# Liberty Lighthouse — Full Content

> Complete content dump for LLM ingestion. All FAQs, videos, glossary, and syllabi from Liberty Lighthouse, a resource for understanding Indian policy. A project of the Centre for Civil Society.

Site: https://liberty-lighthouse.vercel.app/
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Curated index: https://liberty-lighthouse.vercel.app/llms.txt

# India's Constitution

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/

Examining the history and evolution of India's Constitution, the rule of law, and liberalism. 

## FAQs

### How has our constitutional law evolved in the last 75 years?

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/how-has-our-constitutional-law-evolved-in-the-last-75-years/

To understand how our Constitution has fared in the last 75 years of its existence, we need to look at how the Legislature, Executive, and Judiciary have conducted themselves *vis-à-vis* the respective roles assigned to them by the Constitution. Frequent turf wars between the Legislature and Judiciary, which began from the very year the Constitution came into effect, sometimes resulted in landmark decisions, often in missed opportunities and many a time in abject capitulation to the government in power. The Judiciary has often gone beyond its adjudicating powers and stepped into the Executive and Legislature domains, directly taking over the Executive’s administrative duties[^1] or making or nudging the Legislature to make laws where needed, in an activism mode.[^2]  Executive apathy in administering laws, both in the letter and in the spirit of the Constitution, gave rise to the tradition of Public Interest Litigation (PILs) from the 1970s onward. PILs could be filed by individuals or organisations under the Writ Jurisdiction on behalf of groups/ communities who are not in a position to access justice due to economic or other disadvantages.

	We have seen how rule-of-law principles are ingrained in our Constitution, creating the framework for governing a democratic nation. If we go over some of the important cases which have landed up in courts challenging the Parliament’s law-making or how the Executive has implemented (or not) the laws, and how well or poorly the Judiciary has exercised its immense powers as the final arbiter of the Constitution, we would have a fair idea how the three arms of the State have measured up to the Constitutional standards.

**Case:**	*Indira Nehru Gandhi v. Raj Narain (1975)*: In this famous case from the Emergency period, the Supreme Court nullified the 39th Constitutional Amendment (1975) for violating the principles of **judicial review, the supremacy of the Constitution, the separation of powers, and the right to equality**.

	The backstory: Indira Gandhi won the 1971 general elections against Raj Narain. Raj Narain petitioned the Allahabad High Court alleging that Indira Gandhi had indulged in electoral malpractices. The High Court in 1975 found Indira Gandhi guilty of these allegations, invalidated her election and disqualified her from holding any public office for six years. Indira Gandhi appealed to the Supreme Court, which temporarily stayed her removal from Prime Ministership till the case was decided. 

	Even before her case could be decided by the Supreme Court, the government declared a **National Emergency under Article 352,** suspending Fundamental Rights. The Parliament then passed the 39th Constitutional Amendment, which inserted **Article 329A**, validating Indira Gandhi’s election retroactively and placing the elections of the President, the Prime Minister, and the Speaker of the Lok Sabha outside the purview of judicial review. The Supreme Court cited the **Basic Structure Doctrine** to strike down the 39th Amendment for violating:

* **Judicial Review** \- by stripping the Judiciary of its power to scrutinise laws, including Constitutional amendments, and excluding courts from adjudicating election disputes **(Article 13\)**;   
* **Supremacy of the Constitution** \- by elevating an individual to a position of power who could not be touched by constitutional standards **(Article 13\)**;   
* **Separation of Powers** \- by validating an election that was found invalid by the Judiciary;    
* **Fundamental Right to freedom of speech and expression** \- by insulating a specific politician’s election from legal challenge (reading free and fair elections as integral to **Article 19(1)(a)**;    
* **Equality before law** \- by placing certain public officials above the law through a discriminatory and unreasonable classification **(Article 14\)**. 

[^1]:  *T.N. Godavarman Thirumulpad v. Union of India & Others* (1995) \- This is a “continuous mandamus” where the Supreme Court is managing all matters relating to forests for the last 30 years.

[^2]:  *Vishaka v. State of Rajasthan* (1997) \- The Supreme Court established the “Vishaka Guidelines” on protection of women from sexual harassment at the workplace, as there was no law in place. These guidelines served as the legal framework in India till the government enacted the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013\.

### How has our constitutional law evolved in the last 75 years? (Part 2)

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/how-has-our-constitutional-law-evolved-in-the-last-75-years-part-2/

**Case:** *Indra Sawhney v Union of India (1992)* is a modern interpretation of affirmative action. The Supreme Court upheld reservation for Other Backwards Classes (OBC) in government employment. The government reserved 27% of jobs for OBCs in 1990, based on the Mandal Commission Report (1980). The Report identified socially and educationally backward classes worthy of affirmative action. This led to massive protests across the country and legal challenges. 

	The Court acknowledged that “caste” is a valid indicator for determining backwardness. A discriminatory law including the “caste” criterion was permissible under **Articles 14** **and 16,** and the government policy provided the rationale for the differential treatment between classes. The judgement excluded the “creamy layer” from the benefits of reservation \- those sections within the OBC who are socially, economically and educationally already at an advantage- and set a cap of 50% of total reservation for government jobs.

	**Article 14** says every person is entitled to be treated equally and to be fully protected by laws passed by Parliament or State legislatures (plenary legislation) or by executive agencies (delegated legislation). But this does not stop the State from enacting laws that may treat people differently in the interest of giving a leg up to those in need. A discriminatory law for a separate class of people should clearly identify the class and the rationale for the differential treatment. Within that class, all persons should have equal protection of the law. The government cannot arbitrarily use its discretionary powers to pick and choose which persons or groups a law will apply to and how. This Article creates the foundation for affirmative action policies.  
	  
	**Article 16** ensures the right to equal opportunity in public employment, without discrimination based on religion, race, caste, sex, descent, place of birth, or residence. But this Article also carves out exceptions for Scheduled Castes, Scheduled Tribes and backward classes of citizens \- the affirmative action provision. It creates separate categories to achieve social justice and representation of historically marginalised people.

**Case:** *Rajbala v State of Haryana (2015)* concerns the Haryana Panchayati Raj (Amendment) Act, 2015 passed by Haryana government, which barred five categories of citizens from contesting Panchayat elections in the State \- those who, lacked mandated educational qualifications, did not have functional toilets in their homes, had financial liabilities with any government authority, had unpaid utility dues (electricity, etc.), and had serious criminal charges against them. The petitioners (candidates who failed to meet the criteria) had argued that it ruled out a large number of citizens from rural Haryana, especially women, from contesting the Panchayat elections. 

	The Supreme Court upheld the legislation as progressive. The objective was to ensure that candidates seeking election to Panchayats need to have some basic education to discharge their duties as elected representatives effectively. Candidates also need to demonstrate their commitment to civic responsibilities and that their personal records were clean. The legislation was held to be reasonably classified under **Article 14** and not arbitrary.

### How has our constitutional law evolved in the last 75 years? (Part 3) 

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/how-has-our-constitutional-law-evolved-in-the-last-75-years-part-3/

**Case:** The *Tata Cellular v Union of India (1994)* case concerns an arbitrary government tender process. Tata Cellular, a telecommunications company, challenged its disqualification from a government tender to provide mobile telephone services. Tata alleged that, although they had submitted a highly competitive bid, their company was disqualified because the government altered the evaluation criteria after the bidding process had started and unfairly scored competitors. The Supreme Court held that if tender terms are tailor-made to favour a specific bidder and exclude others, it violates **Article 14** on account for its arbitrariness, as the procedures adopted were improper, illegal, and irrational.

**Case:**	*Vodafone International Holding B.V. v Union of India (2012)* relates to Retrospective Taxation. A law made with retrospective effect is contrary to the rule-of-law elements of certainty, transparency, and objectivity in legislation. While the Constitution specifically bars retrospective criminal laws **(Article 20(1)**, there is no such bar on retrospective civil or tax laws. The Supreme Court has not always struck down such laws, holding that if Parliament was competent to legislate prospectively, it can also legislate retrospectively. But retrospectively enacted civil laws can be challenged under **Article 14** when they impose an unduly oppressive and confiscatory financial burden on citizens and are so unreasonable that it is impossible to carry out the fundamental right of business under **Article 19(1)(g)**.[^1]  
	  
	But retrospective legislation, when it impacts the economy, raises the cost of doing business by depriving enterprises of equity, fairness, and tax neutrality. Vodafone, a UK-based telecommunications company, acquired Hutchinson Essar (an Indian telecom company) from its parent Hutchinson Telecommunications International Limited (Hong Kong-based) in 2007\. The transaction was completed entirely outside India. The Indian Income Tax authorities demanded about $2 billion in capital gains and withholding taxes from Vodafone on the ground that, although the money had been fully exchanged offshore, the underlying asset (Hutchinson Essar), which Vodafone had bought, was located in India. 

	Vodafone challenged the tax demand in the Supreme Court on the ground that the Indian tax authorities lacked jurisdiction over offshore transactions. The Supreme Court ruled in favour of Vodafone because Indian tax authorities were not competent to tax transactions between two foreign companies and that Indian tax laws at the time of the transaction were complete and did not provide for retrospective taxation of foreign transactions. Tax planning by a taxpayer to minimise taxes is legitimate when done within an existing legal framework, unless there is evidence of fraudulent avoidance structures.	

	To bypass this judgement, the Indian government amended the Income-tax Act, 1961, in 2012 to allow retrospective taxation of offshore transactions when the underlying asset was located in India. This amendment was made applicable from 1962 onwards, giving the government the power to open and scrutinise earlier settled transactions. Fresh tax demands were made from Vodafone and about 16 other companies.

	Vodafone took the matter to international arbitration, which ruled in its favour in 2020\. Similar tax demands were made against Cairns Energy (a UK-based company) that had undertaken an offshore restructuring in 2006 in preparation for the launch of Cairns India. This transaction had been approved by regulatory authorities in India at the time. Cairns too dragged its case to international arbitration and received a ruling in its favour.

	Deep international embarrassment and loss of investor confidence caused by these two cases led the government to pass the Taxation Laws (Amendment) Act 2021, scrapping the retrospective taxation law on offshore transactions. The government withdrew all tax demands against Vodafone, Cairns, and several other companies, refunded the money collected, and compensated for losses.  
	  
	The *Vodafone* case is also an instance of a threat to the rule-of-law principle of **separation of powers**. By overriding the Supreme Court’s interpretation of the tax law with another retrospective amendment on the same issue, the Legislature undid the Judiciary’s interpretation of the law. It changed the very framework of that interpretation from a back date.

[^1]:  *Rai Ramkrishna v. State of Bihar (1963the)*

### The Rule of Law is a core value in the Indian Constitution. What does Rule of Law mean?

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/the-rule-of-law-is-a-core-value-in-the-indian-constitution-what-does-rule-of-law-mean/

The foundational principle of the Constitution of India - the rule of law - is implicit and permeates its entire framework. Over the last 75 years since the Constitution was adopted, the Supreme Court of India has been interpreting and characterising the Constitution through numerous judgments, and is its final arbiter. The Court has ruled that “rule of law” is one of the pillars of the “basic structure” of the Constitution and cannot be amended by Parliament. 

	

Simply put, “rule of law” implies that the people of a nation are ruled by “law” and not by “man”. It does not prescribe which economic or political system a country should have. Whatever the system, laws must be applied in accordance with the rule of law. Nor is it synonymous with any of the rights or concepts of justice that a constitution may contain, but the rule of law facilitates the respect of such rights. 

So, the rule of law is an objective concept which defines how laws are interpreted and implemented. It is not concerned with the substance of the law - whether it is a criminal or a tax law. A government may follow the rule of law when making or implementing laws, but can still violate constitutional rights. Censorship, violations of personal liberty, expropriation of property, prohibition of alcohol, tobacco, or child labour, destruction of the environment, etc., are examples of policies that violate individual rights but could still be valid law.

By placing the constitution above all, the rule of law opposes the influence of arbitrary and discretionary government power. When the rules of the game are known to all, and there’s certainty about them, an individual is free to pursue their life and aspirations with the expectation that the government will not use its coercive powers to undermine their efforts. This becomes possible when there are effective checks and balances between various arms of the government - the Legislature, Executive and the Judiciary - acting as a restraint on over-concentration of power in the hands of anyone. A sufficiently independent Executive and Judiciary will act as a bulwark against the excesses of politicians. At the same time, the Legislature and Judiciary will protect against the Executive's abuse of power and resources, and the Executive and Legislature will be guardians against the Judiciary seizing power through judicial activism.

### What are Rights to Freedoms? How has the Right to Freedom of Speech and Expression fared in India?

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/what-are-rights-to-freedoms-how-has-the-right-to-freedom-of-speech-and-expression-fared-in-india/

**Article 19(1)** contains the freedoms every citizen has the right to enjoy \-

1) Right to speech and expression  
2) Peaceful assembly without arms  
3) Form associations or unions  
4) Move freely throughout Indian territory  
5) Reside and settle anywhere in India  
   (g)  Practice any profession, trade or business

	Article 19(1)(f) \- the right to acquire property was removed by the 44th Constitutional Amendment in 1978\.

	The freedoms come with **“reasonable restrictions”** listed in **Articles 19(2) to 19(6)** for each right. 

**Free Speech & Expression \- Press Freedom**

	There are eight grounds for restricting free speech and expression under **Article 19(2)**:

i)	Sovereignty and integrity of India  
ii)	Security of the State  
iii)	Friendly relations with foreign states  
iv)	Public order  
v) 	Decency or morality  
vi) 	Contempt of court  
vii)	Defamation  
viii)	Incitement to an offence

	Government’s muzzling of the press in the early years of the Constitution and the criminalisation or takedowns of online content in the era of information technology and social media have been ongoing. Supreme Court’s interpretation of constitutional rights ranged from landmark upholdings of rights to abdication and deference to the powers that be. Let’s look at how the freedom of speech and expression has evolved in India through State action and judicial response.

**Cases:**	Two judgements of the Supreme Court in the very year the Constitution took effect read press freedom into Article 19(1)(a) *\[Romesh Thappar v State of Madras (1950) & Brij Bhushan v. State of Delhi (1950)\]*. In *Romesh Thappar*, the Madras government had issued an order prohibiting entry, sale and circulation of a journal critical of the then Prime Minister, Jawaharlal Nehru, on the grounds of “public safety” and “public order”. The Court held that freedom of speech includes the right to propagate ideas, which would be meaningless without the freedom to circulate those ideas. In *Brij Bhushan*, the Court held that the government order requiring a magazine to submit its content to authorities for prior scrutiny before publication on “public safety” grounds was unconstitutional, as it amounted to pre-censorship directly affecting free speech. “Public safety” could not be used to imply “reasonable restrictions” of “security of the State”. In *Bennett Coleman & Co. v Union of India (1972)*, the Court struck down as unconstitutional the government’s Newsprint Control Order, which fixed the maximum number of pages a newspaper could print. The Court said freedom of the press is both qualitative and quantitative. Freedom lies in both circulation and content, and imposing a page limit on a newspaper curtails free speech and expression.

**First Amendment to Constitution (1951):**  
	  
	In 1950, Article 19(2) only permitted “reasonable restrictions” on free speech if it related to “libel, slander, defamation, contempt of court, or any matter which offends against decency or morality or which undermines the security of, or tends to overthrow, the State”. In its rulings in the two 1950 cases, the Supreme Court found the grounds of “public safety” and “public order” used to restrict press freedom were very broad concepts and could not be equated as a threat to “security of the State”. So the government’s response was to carry out the First Amendment to the Constitution in 1951, adding new “reasonable restrictions” to Article 19(2): “public order”, “incitement to an offence”, and “friendly relations with foreign states”.

### What are Rights to Freedoms? How has the Right to Freedom of Speech and Expression fared in India? (part 2)

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/what-are-rights-to-freedoms-how-has-the-right-to-freedom-of-speech-and-expression-fared-in-india-part-2/

**Free Speech & Expression \- Internet Freedom**

**Case:** *Shreya Singhal v Union of India (2015)* was a landmark decision by the Supreme Court in the age of the internet. The Court struck down Section 66A of the Information Technology Act 2000 as unconstitutional, as it criminalised offensive online content in vague, undefined terms, was overbroad, and thus prone to misuse by the State. This judgment extended constitutional protection for freedom of speech to online content, in the same way as to offline speech and expression. Any restrictions on online content must only be subject to the “reasonable restrictions” enumerated in Article 19(2).

**Case:**	Jammu and Kashmir government imposed indefinite internet shutdowns in the State from August 2019 onwards, in the aftermath of the abrogation of Article 370 of the Constitution.  Anticipating public unrest and terrorist violence, the State government shut down mobile phone, landline connectivity and internet services. Additional restrictions were imposed under Section 144 of the Indian Penal Code on freedom of movement and public assembly.  This not only affected **Article 19(1)(a)**, but also **Article 19(1)(b)** (Freedom to assemble peaceably and without arms) and **Article 19(1)(g)** (Freedom to carry on trade or business).

	In *Anuradha Bhasin v Union of India (2020),* a case filed by a journalist, the Supreme Court ruled that \-

* indefinite suspension of internet services should satisfy the tests of necessity and proportionality. There should be a legitimate aim, an exploration of suitable alternatives, and the adoption of the least restrictive measure. Considering proportionality, indefinite internet shutdown was impermissible.  
* Expressing one’s views or conducting one’s business through the internet are protected under **Articles 19(1)(a) and 19(1)(g)** respectively, and can be restricted only on grounds recognised under **Articles 19(2) and 19(6)**.

\[Note: Fundamental Rights under **Article 19(1)(g)** \- right to carry on trade or business, etc. \- can be restricted in “public interest”, through requirements of professional and technical qualifications and by creating government monopolies which exclude private enterprise.\]

* Orders issued under Section 144 of the Criminal Procedure Code (Cr. P.C.) and Telecom Suspension Rules should be made available to the public to know the reasons, unless there is a “specific ground of privilege” or “countervailing public interest”. Section 144 cannot be used to suppress legitimate expression and assembly and is subject to judicial scrutiny. 

\[Note: Fundamental Right under **Article 19(1)(b)** \- right to assemble peaceably and without arms \- can be restricted under **Article 19(3)**, only for sovereignty and integrity of the nation or public order. Section 144 of Cr. P.C. (new Section 163 of Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023\) allows District Magistrates to ban gatherings of four or more people if there is a threat to public peace or danger to life.\]

**Critique of the Anuradha Bhasin judgement:**  
	  
	This is an instance of “judicial abdication” by the apex Court, as it failed to hold the Jammu and Kashmir government accountable for Fundamental Rights violations and for allowing the government to frustrate the Court’s right to Judicial Review. The Supreme Court \-

* failed to hold the 158-day suspension of internet services as unconstitutional or order its restoration even while holding that such suspension was impermissible;  
* failed to hold a retrospective judicial review of the actions of the State government and told the State to hold a prospective review;  
* set problematic precedents by holding that reasonable restrictions under Article 19(2) can extend to complete prohibition of speech in certain circumstances. Governments could abuse this interpretation since internet shutdowns are often indiscriminate and over-broad in nature;  
* characterised the violation of press freedom as just a “chilling effect” without acknowledging that disabling of telecom services and physically stopping journalists from entering certain areas were a clear violation of press freedom.

### What are Rights to Freedoms? How has the Right to Freedom of Speech and Expression fared in India? (part 3)

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/what-are-rights-to-freedoms-how-has-the-right-to-freedom-of-speech-and-expression-fared-in-india-part-3/

**Case:** *Association for Democratic Reforms v. Union of India (2024)* is a landmark ruling in which the Supreme Court struck down the Electoral Bond Scheme, devised through amendments to the Finance Act 2017 and the Companies Act 2013, as unconstitutional. The Scheme permitted companies and individuals to make unlimited and anonymous financial donations to political parties. 

	The Supreme Court ruled that such absolute anonymity in political funding directly violated the Fundamental Rights of the voter, reading the right to information as a fundamental component of the right of free speech in **Article 19(1)(a)**. Citizens have the right to know so that they can make informed choices. In several earlier cases, the Court had held that freedom of speech and expression includes the right to acquire and disseminate information. It places a duty on public authorities to act transparently by providing information about their functioning to the citizens, necessary to add value to the country’s governance.[^1]

**Critique of the Electoral Bond Scheme judgement:**  
	  
	This Scheme was first challenged in 2019 and again in 2021\. Still, the Supreme Court delayed hearing the case or failed to halt the anonymous corporate donations flowing into political parties' coffers until the decision was struck down in 2024\. An investigation by independent media had revealed how this anonymous Scheme had been a cover for quid pro quo exchanges between the donating companies and the award of government contracts to these companies. Apart from the delay in delivering justice, the Court also refused to order a Special Investigation Team probe into the apparent quid pro quo findings, to order the confiscation of past bond funds, or to monitor subsequent campaign finance regulations.

**Current Status of Freedom of Speech and Expression in India:**

	Free speech and expression face huge challenges in India. Broad, vague laws and executive overreach in pursuing criminal cases for online posts, digital misinformation, and pre-censorship of films are having a chilling effect on free speech and silencing legitimate dissent. Police have been quick to file criminal cases against social media influencers, journalists, stand-up comedians, academicians, and follow with their arrests. Courts, including the Supreme Court, are reluctant to grant bail, which leaves many in jail without trial for months, often years, with no closure on investigations or trials. 

	India ranks 24th out of 33 countries in a global survey by the Future of Free Speech conducted in 2024\. India ranked 157th out of 180 countries in the 2026 World Press Freedom Index published by Reporters Without Borders, down six places from its 2025 rank of 151\.

**Case:**	A draconian law \- the 2023 amendment to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 \- was struck down by the Bombay High Court as unconstitutional (*Kunal Kamra v. Union of India (2024).* This amendment established a Fact Checking Unit (FCU) operated by the government-run Press Information Bureau, whose work was to flag fake, false or misleading online content related to the government’s activities. Once flagged, the intermediaries (social media platforms) were obligated to take down the content or lose their “safe harbour” protections against liability for end-user-generated content. 

	The High Court said that such a law would have a “chilling effect” on free speech through censorship. Journalists, satirists, cartoonists, and other social media participants would lose their ability to share views critical of the government. Many would also lose their livelihood if their consumers were unable to read their posts. Intermediaries (social media and other internet-based platforms) would play safe by taking down content to avoid legal risks. The rules were vague, lacked procedural safeguards and were too broad and arbitrary. The Court thus found the amendment violated **Articles 14, 19(1)(a) and 19(1)(g)** and exceeded the authority granted by the IT Act, 2000\.

	The Supreme Court has stayed the operation of the 2023 amendments, and for now, the government’s FCU remains suspended.	  


[^1]:  *State of U.P. v. Raj Narain (1975)*; *Secretary, Ministry of Information & Broadcasting. Government of India v. Cricket Association of Bengal (1995)*; *Union of India v. Association of Democratic Reforms ,(2002)*, etc.

### What are some of the significant elements of the Rule of Law? Where would one find them in the Constitution of India?

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/what-are-some-of-the-significant-elements-of-the-rule-of-law-where-would-one-find-them-in-the/

* **Supremacy of established law as opposed to arbitrary discretion**. This flows from the fundamental concept that it is a rule of “law,” not a rule of “man” (a king, a person, or a political party), that governs a nation, usually through a constitution, rather than the diktat of any individual leader or political party.   

**Article 13 of the Constitution of India** is the clearest assertion of the rule of law: the Constitution is the supreme law, and the State derives its powers to govern its people from it. Any law, whether made before or after the Constitution came into effect, is void if it takes away the **Fundamental Rights**.  
      

* **Equality before the law.**  Everyone has the same rights and obligations without discrimination on the grounds of status, religion, sexual orientation, political affiliation, gender, race, age, etc., unless a valid law allows for unequal treatment. 

**Article 14** frames the Right to Equality principle \- a direct embodiment of the twin doctrine of the rule of law \- “equality before the law” and “equal protection of the laws”. “Equality before law” is a negative concept (derived from A.V. Dicey’s *Rule of Law*): no person will be denied equality before the law. “Equal protection of the laws” is a positive concept (borrowed from the 14th Amendment to the United States Constitution) \- all persons will be provided equal protection of the laws. Laws cannot be arbitrary, since arbitrariness amounts to inequality. Governments may make discriminatory laws, but these should clearly identify the class of people and the rationale for their differential treatment.

*   **Legality of laws.** 

* Laws must be made by following prescribed procedures laid down in the constitution.   
* Laws need to be unambiguous and objective, not arbitrary or discretionary. Any discretion requires that the purpose be clearly articulated.  
* Laws must be rational \- there must be a clear connection between the law and its objectives.  
* Laws should be prospective, not retroactive, because people need to know in advance that they have to follow the law. Retrospective laws are permissible in extreme circumstances, only if needed to correct unintended consequences or injustice.

These rule-of-law principles permeate our Constitution and have been read into **Article 14 (Equality)** and other **Fundamental Rights** by the Supreme Court. Laws have to be passed in accordance with the processes laid out in the Constitution. **Part XI (Articles 245-255),** read with the **Seventh Schedule** (which contains distribution of subject-wise legislative powers between the Union and the State governments), lays down Parliament’s law-making powers. **Part V (The Union)**, specifically **Articles 107 to 111,** describes the procedures for making laws. **Article 368** lays down the procedure for amending the Constitution. The law-making processes must be mindful of **Article 13,** the **Fundamental Rights,** and the **Basic Structure Doctrine**.

* **Due Process of Law.** Rule of law includes due process and natural justice. Justice is not only done, but has to be seen to be done. Due process refers to all stages of law \- how laws are made, implemented and adjudicated. Processes must be transparent, impartial, and free from the appearance of bias, and administrative action must comply with them. Some of its elements include \- 

1) right to be heard;   
2) right to know what evidence is being considered;   
3) right to be present and cross-examine witnesses;   
4) there can be no trial without a formal charge;   
5) right to written reasons for administrative and judicial decisions;   
6) right of appeal on the merits to an independent judiciary;   
7) right to judicial review of judicial and administrative decisions;   
8) right to information relevant to the case held by the state;   
9) right to seek recusal or dismissal of officials with a conflict of interest.

**Article 21** enshrines our fundamental right to life and liberty.  **Articles 20 and 22** provide the vital rule of law safeguards which protect individuals from overreach by the State \- the procedural framework for Article 21’s “procedure established by law”.

### What are some of the significant elements of the Rule of Law? Where would one find them in the Constitution of India? (Part 2)

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/what-are-some-of-the-significant-elements-of-the-rule-of-law-where-would-one-find-them-in-the-part-2/

* **Separation of powers between the legislature, executive and judiciary.** Making, interpreting and day-to-day administration of laws should be done by three independent arms of the State \- Legislature, Executive and Judiciary. The Legislature should legislate, the Executive should execute, and the Judiciary should adjudicate. Executive cannot make “regulations” to exercise administrative functions. The Parliament should refrain from legislating to nullify judicial decisions or usurp powers of the Judiciary. An ‘activist’ Judiciary must avoid overstepping into the policy-making and administrative powers of the Executive and the lawmaking powers of the Parliament by creating court-mandated laws.

Several Articles in our Constitution establish these checks and balances by demarcating the respective functions of the three arms of the State. **Part V** **(Articles 52 to 151\)** has provisions for the functioning of the Union government, establishes a parliamentary system of government at the Union level, an independent judiciary, and effective separation of powers. **Part VI** **(Articles 152 to 237\)** lays down the governance structure of the States. **Article 50** requires States to separate the Judiciary from the Executive in the provision of public services. **Articles 121 and 211** prevent the Legislatures from discussing the conduct of any judge of the Supreme Court and High Courts relating to the discharge of their duties. **Articles 122 and 212** restrict courts from inquiring into the validity of proceedings in Parliament/State Legislatures.

* **Independence of judiciary.**  Impartial courts should enforce and interpret laws and include the power of judicial review. The highest court of the land is the ultimate authority to interpret the Constitution and conclude appeals. Its judgements form Precedents \- a body of decisions considered manifestations of the law itself. It brings certainty into the interpretation of a law. All other courts and governments must follow these Precedents to bring consistency to government decision-making. 

**Article 13** of the Constitution enshrines the principle of judicial review. The Supreme Court and the High Courts have the power to review any constitutional amendments or law and strike it down as unconstitutional if it violates **Fundamental Rights** or the **Basic Structure Doctrine**. An independent judicial system with powers of judicial review can also be found in **Articles 32, 136, 2and 26** \- **Constitutional Remedies** available to all persons through the Writ Jurisdiction and Appeals. **Article 50** mandates the State to separate the Judiciary from the Executive. **Articles 124 to 147** lay down appointments, security of tenure and jurisdiction of the Supreme Court and **Articles 214 to 231** for the High Courts. 

* **Writ Jurisdiction.** Writ jurisdiction has its origins in the English common law. This is an enforcement mechanism that empowers superior courts to protect individuals from infringements of fundamental rights by the State. There are five Prerogative Writs:

**i)**	**Habeas Corpus** (To have the body). This writ protects personal liberty. The court may order that any person unlawfully detained be brought before the court.  
**ii)**	**Mandamus** (We command). Courts have the power to order public officials to perform a function they are legally required to perform.  
**iii)** **Certiorari** (To be certified). If a lower court passes an order which was not within its powers or has committed an error in law, the superior court can review or quash the order or transfer the case to itself.  
**iv)**	**Prohibition** (To forbid). This writ forbids lower courts, including tribunals and other quasi-judicial authorities, from acting beyond their authority, or violating the rules of natural justice or fundamental rights of a party to a case.  
**v)** 	**Quo Warranto** (By what authority). This writ challenges a public official’s right to hold the public office to which they have been appointed. If found ineligible, the court can prohibit him/her from holding that office.

**Writ Jurisdiction** is a **Fundamental Right** under **Article 32** and enforced by the Supreme Court. These Writs can be exercised by the High Courts also under **Article 226**.

### What are the Fundamental Rights in India’s Constitution? What is the relationship between the Fundamental Rights and Directive Principles of State Policy?

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/what-are-the-fundamental-rights-in-indias-constitution-what-is-the-relationship-between-the/

Rule of law principles embedded within our Constitution create the legal and institutional framework to protect the Fundamental Rights. The **Fundamental Rights** are contained in **Part III (Articles 12 to 35\)**. These are basic civil liberties guaranteed to every citizen of the country (some rights are also assured to non-citizens within the territory of India) against unjust and arbitrary action by the State. There are six categories of **Fundamental Rights**:

* 	Right to Equality \- Articles 14 to 18  
*          Right to Freedoms \- Articles 19 to 22  
*          Right against Exploitation \- Articles 23 and 24  
*          Right to Freedom of Religion- Articles 25 to 28   
*          Cultural and Educational Rights \- Articles 29 and 30   
*          Right to Constitutional Remedies \- Article 32  

The Fundamental Rights are not absolute. They come with **“reasonable restrictions”** and exceptions which not only attempt to balance an individual’s liberty with that of another individual or in the interest of the nation, but also serve the purpose of enabling a just and equitable society. When the government makes laws to circumscribe the rights, it must ensure that such laws are reasonable, both in the substance and proportion, and cannot exceed the scope of the restrictions written into the text of the Constitution.  
	  
Fundamental Rights (except Articles 20 and 21 \- the right to life and personal liberty) can be suspended under **Article 359** when a National Emergency has been declared (under **Article 352**). In the Constitutional history of India, Article 352 was invoked three times \- in 1962 during the India-China war and in 1971 during the India-Pakistan war.  The third occasion \- between 25 June 1975 and January 1977 \- has been the most controversial, officially declared because of “internal disturbances”, in the backdrop of great political instability.

**Directive Principles of State Policy (DPSP) versus Fundamental Rights**  

**Directive Principles of State Policy (DPSP) (Articles 36 to 51\)** contain several entitlements which the State must provide to create a welfare state, based on social, economic and political justice. Unlike the Fundamental Rights, which are negative in nature, DPSP seeks to create positive rights such as free legal aid, early childhood education, panchayats, a uniform civil code, maternity relief, unionisation in industries, public health, agriculture and animal husbandry, and the environment. Also, unlike the Fundamental Rights, the DPSP rights are not justiciable \- if the State fails to operationalise these policies with actual rights, citizens have no recourse to the Constitutional Remedies.

Since DPSP are viewed as conflicting with the Fundamental Rights, they have been a source of contestation between the State intent on implementing policies benefiting the community at large and the judiciary mindful of upholding the fundamental rights of the individual. 

Current judicial interpretation is that the **Basic Structure Doctrine** takes precedence over the DPSP, with the hope that the government will harmonise Fundamental Rights and the DPSP to give effect to the Constitution's goals. Examples of such harmonisation \- 

* Constitution has been amended to introduce the Panchayati Raj system (**Part IX-Articles 243 to 243(O)** by operationalising the DPSP in **Article 40** (organisation of village panchayats); the Fundamental Right to Education has been introduced in **Article 21A,** implementing the DPSP in the original **Article 45** (free and compulsory education for all children upto 14 years);   
* Laws have been passed to enable DPSPs for free legal aid (**Article 39A**), a Uniform Civil Code (**Article 44\)**, the protection and improvement of the environment, forests, and wildlife **(Article 48A), and** equal pay for equal work for men and women **(Article 39),** etc.

### What ideologies and influences shaped the drafting of the Indian Constitution?

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/what-ideologies-and-influences-shaped-the-drafting-of-the-indian-constitution/

India gained independence from Britain on 15 August 1947. The Constitution of India was approved on 26 November 1949 (celebrated every year as Constitution Day) and came into force on 26 January 1950 (celebrated as our Republic Day). Shedding its colonial status, India became a sovereign, democratic republic - a free country that governs itself.



A free nation needed a constitution of its own to govern. In 1946, while India was still under British rule, a Constituent Assembly was formed to draft the constitution. The composition of the Assembly and the outcome of its deliberations have been critiqued for not being truly representative of the Indian people, for being dominated by a single party, and for borrowing elements from the constitutions of other countries.



A law passed by the British, the Government of India Act 1935, had granted limited autonomy to Indian Provinces, a “self-rule” concession given mainly to pacify growing political unrest of the independence movement. First elections to these Provincial Assemblies were held in 1937. The government denied universal adult franchise - only one-sixth of India’s adult population could vote. Using a “divide and rule” strategy, separate electorates were created based on religion (Muslims, Christians, Sikhs), communities (Europeans, Anglo-Indians, Backwards Tribes) and special interest groups like landowners, university constituencies (graduates vote for candidates within their academic community), business owners, labour representatives and women. Only 2.5% of women were permitted to vote, against 41 reserved seats, which were further reserved along religious lines. 



Contrast such special-interest electorates to the electoral system we now have - geographically identified constituencies where all adult residents can vote where they live. 



So these Provincial Assemblies were hardly a fair representation of the country’s electorate at the time. Members elected in the January 1946 elections went on to play a key role in the formation of the Constituent Assembly, acting as an electoral college that elected delegates to the Constitution Drafting Committee (created on 29 August 1947). Of the 299-member Constituent Assembly, 229 were elected from 12 Indian Provinces, which included 15 women, and 70 nominated from 29 Princely States. Apart from inadequate representation of India’s adult population, the Assembly was dominated by the Congress party (82% of members), which was criticised for turning the drafting proceedings into a one-party show.  

The Indian Constitution borrowed heavily from colonial laws, especially the Government of India Act 1935. Constitutions of the United Kingdom also shaped it, along with those of the United States of America, Ireland, France, Australia, Japan, etc. These influences had a significant impact on the concepts of the rule of law, fundamental rights, the independence of the judiciary, the separation of powers, fair legal procedure, and the directive principles of state policy. The Preamble to our Constitution, in which the notions of liberty, equality and fraternity are incorporated, shows the influence of the French Constitution. 



From Britain’s common law tradition, India inherited the rule of law, judicial review with binding precedents (Supreme Court judgments are binding on all courts and the government), an adversarial court system (where lawyers argue their case before a neutral judge), and prerogative Writs (extraordinary powers of the Supreme Court and High Courts to issue orders to stop governments from acting unlawfully). These common law principles influence the procedural framework of our legal system; some have been codified in the Constitution and other laws.



The Indian Constitution stands as the highest law of the country - no person or law is above the Constitution. Parliament has the power to amend the Constitution, but cannot change or destroy its “basic structure” - the core principles the Constitution is built on - which includes supremacy of the Constitution, rule of law, judicial review, federalism, and balance between Fundamental Rights and Directive Principles of State Policy to ensure political, social and economic justice for the people.

### What is the basic philosophy behind India’s Constitution? Is it a liberal one?

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/what-is-the-basic-philosophy-behind-indias-constitution-is-it-a-liberal-one/

A constitution isn’t just a set of rules for running a government. Every constitution is built on certain political and moral philosophies that reflect what a society values and aspires for. This forms the foundation for a country’s laws and its governance.

	The Preamble to the Constitution of India captures the country’s core political beliefs, values and goals. It \-

* describes the nature of the Indian state as a sovereign, socialist, secular and democratic republic;   
* identifies the people of India as the source of power behind the Constitution;   
* sets out the objectives of liberty, equality and fraternity and securing social, economic and political justice for all citizens;   
* promises dignity of the individual; and   
* pledges to keep the unity and integrity of the nation.

	Do these ideals make our Constitution “liberal”? Liberalism is essentially a political idea. In a liberal democracy, if political institutions allow people to think and speak freely, people would naturally recognise that their society comprises different worldviews, religions, moral codes and ways of life. Political liberalism refuses to impose the majority’s idea of what is good onto a whole society.  A pluralistic society allows people the freedom to choose their own ideas of what is good, not just electorally, but also in life.

	In a democratic society, the constitution sets out the principles of justice. It assumes that people with different opinions agree on these basic rules, acknowledging that they live in a pluralistic society. These principles of justice also form the basis of the State's coercion and its justification. In normal parlance, “coercion” implies threat or violence. Constitutionally speaking, it means that under certain situations, the State can legitimately use force \- physical and economic \- to maintain law and order, protect the country, collect taxes, and provide public services. Examples include powers exercised by the police, the military, the courts, and tax and other regulatory authorities. In a liberal democracy, the State can only use these powers within the limits set by a constitution \- one that citizens, or at least the majority, reasonably agree to.

	The idea of liberalism itself has evolved. Classical liberals consider the rule of law, equality before the law, civil liberties, and an independent judiciary as core liberal values. These are “negative rights”, meaning they bar the state from interfering with people’s freedoms. All schools of liberalism agree on these core values. Progressive or modern liberals go further and include “positive rights” \- entitlements that the state is expected to provide, like healthcare, education, food, social security, etc.

	The framers of the Constitution of India avoided calling it a “liberal constitution”. Yet, many of its core elements \- fundamental rights, equality before law, independent judiciary, separation of powers, etc.- are broadly based on classical liberal ideas. Significantly, the rule of law, while never explicitly stated, runs through the entire framework of India’s Constitution. In a nod to progressive liberalism, our Constitution also allows State intervention to ensure social, economic and political justice, moving beyond individual rights to secure rights of disadvantaged and minority groups. The Directive Principles of State Policy aim to provide entitlements for an economically, socially, and politically just society. In essence, what we have is a combination of classical and progressive liberal thought running through our Constitution.

### What is the Basic Structure Doctrine of the Constitution of India?

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/what-is-the-basic-structure-doctrine-of-the-constitution-of-india/

**What is the Basic Structure Doctrine of the Constitution of India?**

	The term **Basic Structure Doctrine** often appears whenever the rule of law, Fundamental Rights or the independence of the judiciary are discussed. The Constitution gives the Legislature two kinds of law-making powers under Article 13(2) \- 

* ordinary laws of governance by using its legislative powers and   
* amendments to the Constitution by using its constituent powers. 

	The Parliament’s constituent powers are superior to its legislative powers, evident from the greater procedural burden required to amend the Constitution \- quorum, ratification by the States, etc., as compared to making ordinary laws.

	The framers of our Constitution wanted the Constitution to be an adaptable document, changing with the times. They ensured that Separation of Powers, an integral element of the rule of law, was enshrined in the Constitution. The checks and balances between the Legislature, Executive and Judiciary are not unfettered. **Article 386** allows the Legislature to amend the Constitution and gives the impression that Parliament has an absolute right to amend any part of it.

	In the historic *Kesavananda Bharti* case (1973), the Supreme Court put the brakes on the understanding that **Article 368** gave the Legislature unlimited power to make laws, including constitutional amendments, by defining the **Basic Structure Doctrine,** which the Court said is embedded in our Constitution. Before *Kesavananda*, Parliament used its amendment powers to undo the Supreme Court’s unfavourable judgements, mostly concerning Fundamental Rights, such as the rights to free speech and property. The conflict between the Parliament and the Judiciary finally became one between the government's right to implement the **Directive Principles of State Policy** (DPSP) by curtailing Fundamental Rights and the courts' power to balance the DPSP against the Fundamental Rights.

	Though the term “basic structure” does not appear in the Constitution, in *Kesavananda,* the Supreme Court held that the Parliament’s constituent power under Article 368 had inherent limitations. The Legislature could not use its powers to damage, destroy, change or alter the “basic structure” or framework of the Constitution by amending any of its provisions. There was no unanimity among the judges on what exactly this “basic structure” or essential framework was. “Basic structure” features continued to be added in *Indira Nehru Gandhi v. Raj Narain* (1975), and something called the “overarching principles” in *M. Nagaraj v. Union of India (2006)*. 

	Various judges viewed these indestructible elements in the Constitution to include \-

* Supremacy of the Constitution   
* Republican and democratic form of government  
* Separation of powers between the Legislature, Executive and the Judiciary  
* Federal character of the Constitution   
* Mandate to build a welfare state contained in the Directive Principles of State Policy  
* Unity and integrity of the nation  
* Sovereignty of India  
* Democratic character of the polity \- free and fair elections   
* Essential features of the individual freedoms   
* The Rule of Law, not rule of men  
* Power of Judicial Review  
* Equality of status and opportunity of an individual   
* Secularism and freedom of conscience  
* Egalitarian equality.

	Crystallising these views, we understand that \-

* there exists something called a “basic structure” of the Constitution;   
* the Legislature had all the constituent powers to amend the Constitution under Article 368, but the amendments are subject to Judicial Review under the **Basic Structure Doctrine**;   
* the “basic structure” of the Constitution includes the rule of law, the sovereign, democratic and secular character of the nation, separation of powers, independence of the Judiciary, Fundamental Rights of citizens, realisation of the Directive Principles of State Policy, etc.,   
* and anything else the Supreme Court may add through its power of judicial review. 

	So the final word on the content of the Basic Structure Doctrine is still to come, but what is clear is that the Supreme Court remains the final arbiter over and interpreter of the Constitution and any amendments made to it under Article 368\.

### What is the Right to Life and Liberty? How has this Right evolved through the history of the Indian Constitution?

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/what-is-the-right-to-life-and-liberty-how-has-this-right-evolved-through-the-history-of-the-indian/

**Article 21** enshrines a significant rule of law principle \- the right to life and liberty of every person (not only citizens) \- *“No person shall be deprived of his life or personal liberty except according to a procedure established by law”*. 

	The term **“due process of law”** used in the United States Constitution gives judges a wider role to interpret whether the violation of the right has happened because of the substantive law or it was due to procedural violations, that is, the way the law was applied. The framers of India’s Constitution deliberately chose the term “procedure established by law” to prevent our Judiciary from getting creative in interpreting what “life” or “personal liberty” means in real-life cases. Judiciary’s role thus becomes passive \- it follows the letter of the law so long as the law is not unconstitutional, even if the law is unfair or unjust. Courts would intervene only if the Executive has not applied the law in a fair, just, reasonable and non-arbitrary manner.

**Case:**	As we will see through the cases discussed, the right to life and personal liberty has moved from the intended narrow interpretation of Article 21’s “procedure established by law”, to the actual **“due process of law”** understanding of the rule of law principle. In *A.K. Gopalan v. State of Madras (1950)*, the Supreme Court read Article 21 narrowly, limiting the term “procedure established by law” to mean that if there was a law authorising detention, it did not require a “fair trial” or “due process”. The case related to A.K. Gopalan, a Communist leader, who had been held in jail under various preventive detention laws without trial for several years. The Court ruled that the detention was lawful, even if the law itself was unfair and unreasonable. There was no attempt to harmonise the right to life and personal liberty with other Fundamental Rights of Equality and Freedom of Movement.    
	  
**Case:**	During the National Emergency between 1975-77, the government detained a large number of politicians, journalists, and activists under the Maintenance of Internal Security Act 1971, without providing any reasons for their arrests and held them without trial. All Fundamental Rights were suspended, including Article 21\. The Supreme Court, in a controversial ruling in *ADM Jabalpur v. Shivkant Shukla (1976),* said that the Writ of **Habeas Corpus** against a person’s unlawful detention can be suspended in the interest of the State. 

**Case:**	The transformation began with *Maneka Gandhi v. Union of India (1978).* In a pivotal decision, the Supreme Court interpreted “procedure established by law” to include two elements: i) the substantive law itself should not be arbitrary, unjust or oppressive. ii) procedural due process must ensure that legal proceedings against an individual are fair, transparent and unbiased, and introduced the rule of law principle of “due process” in its full meaning.

	The government had impounded Maneka Gandhi’s passport without giving her any notice or reasons, relying on a procedure in the Passports Act 1967, which allowed the government to impound passports in “public interest”. While the Supreme Court did not strike down the procedure itself as unconstitutional, it laid down strict procedural safeguards. The Court held that the right to travel abroad is part of Article 21’s right to “personal liberty”. The mere existence of a legal procedure is not enough. Any curtailment of this right should follow procedures that are fair, just, and reasonable, and cannot be arbitrary, oppressive, or fanciful. **Articles 14, 19, and 21** are an integrated web, not silos \- a law that passes the test of one Article must pass the tests of the others as well. The principles of natural justice, that is, right to notice, hearing, and opportunity to respond, are implicit in the “procedure” laid down in any law that deprives a person of life or liberty. The Court held that the procedure followed by the government in impounding Maneka Gandhi’s passport violated her fundamental rights.

### What is the Right to Life and Liberty? How has this Right evolved through the history of the Indian Constitution? (Part 2)

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/what-is-the-right-to-life-and-liberty-how-has-this-right-evolved-through-the-history-of-the-indian-part-2/

**Procedural Safeguards for Protecting Right to Life and Liberty \[Article 20 and 22\]:**

	**Articles 20 and 22** are vital safeguards of the rule of law, protecting individuals from overreach by the State. They provide the procedural framework for Article 21’s “procedure established by law”.  **Article 20** prohibits \-

* Conviction for an act that was not a crime when it was committed or be subjected to a penalty greater than what the concerned law prescribed at the time of the offence;  
* Double jeopardy \- no person can be prosecuted and punished for the same offence more than once;  
* An accused cannot be compelled to self-incriminate; that is, they cannot be compelled to give evidence against themselves.

	**Article 22** addresses both procedural and substantive law safeguards to prevent the arbitrary use of police power. Police cannot act as judge and prosecution. The State must \-

* provide legal counsel to the accused (the right to a fair trial);  
* present the accused to an independent magistrate within 24 hours (judicial oversight);  
* ensure preventive detention laws comply with a three-month limit for detention without trial;  
* ensure a maximum period of preventive detention is written into the law;  
* ensure the law provides for an Advisory Board review of the detention (checks and balances).

### What is the Right to Life and Liberty? How has this Right evolved through the history of the Indian Constitution? (part 3)

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/what-is-the-right-to-life-and-liberty-how-has-this-right-evolved-through-the-history-of-the-indian-part-3/

**Expansion of Right to Life and Personal Liberty**  
	  
	Post the *Maneka Gandhi* judgment, the Supreme Court, in various judgments, read the right to life and personal liberty to include other rights respecting dignity and bodily integrity, liberty and fair process, autonomy and identity, etc. The Court has, in some cases, devised Guidelines that have the effect of law until the government legislates on them. The government has also legislated on some of these rights (as indicated below).

* Right to speedy trial   
* Right of prisoners to a healthy life in prisons   
* Right to free legal aid  
* Hand-cuffing of prisoners is detrimental to human dignity, unless extraordinary reasons exist.  
* Right to livelihood: eviction of hawkers without alternative arrangements violates the right to life.  
* Right to a safe workplace for women free from sexual harassment (Prevention of Sexual Harassment Act, 2013 passed)  
* Right of adults to choose their life partners without interference from family or State  
* Right to privacy (Digital Personal Data Protection (DPDP) Act 2023 passed)  
* Decriminalisation of adultery (Section 497 of the Indian Penal Code stands deleted)  
* Decriminalisation of homosexuality (Section 377 partially struck off the Indian Penal Code)   
* Recognition of transgender persons as a third gender with the right to self-identification (Transgender Persons (Protection of Rights) Act, 2019 passed)  
* Right to health including mental health (Mental Healthcare Act, 2017 passed)  
* Right to make reproductive choice is an element of privacy, dignity and bodily integrity and State cannot usurp a pregnant woman’s autonomy  
* Right to die with dignity (passive euthanasia) (Some States like Karnataka, Maharashtra have followed up with policies based on Supreme Court Guidelines)  
* Right to Clean environment   
* Right to Education (Constitution amended to include in Article 21A)  
* Right to walk on safe footpaths

**Case:**	*Navtej Singh Johar v Union of India (2018) (Decriminalisation of Homosexuality).* Section 377 of the Indian Penal Code criminalised consensual, private, homosexual acts between adults. The Supreme Court struck down as unconstitutional the portion of Section 377 which related to consenting adults. The Supreme Court found that the colonial-era law violated **Article 14** (Equality before the law), **Article 15** (non-discrimination) and **Article 21** (Right to Life and Privacy) by criminalising people based on their sexual orientation.

**Case:** *Joseph Shine v Union of India (2018) (Decriminalisation of Adultery).* Section 497 of the Indian Penal Code (also known as the Adultery Law) criminalised a man for having sexual relations with a married woman without her husband’s consent, in effect treating the woman as the husband’s property. The woman committing adultery was not penalised, nor was it a crime for a married man to be in a sexual relationship with an unmarried woman. The law did not similarly allow married women to complain against their adulterous husbands. The Supreme Court struck down Section 497 as unconstitutional. The Court found the provision patriarchal and discriminatory against both men (by criminalising a certain kind of sexual relationship) and women (by not allowing them autonomy over their bodies). Section 497 was therefore found to violate **Article 14** (Equality before the law), **Article 15** (prohibition of discrimination on the basis of sex), and **Article 21** (right to privacy and dignity).

**Case:** *Common Cause v. Union of India (2018); Harish Rana v. Union of India (2026) (Right to die with dignity).* The Supreme Court ruled that the right to die with dignity is a fundamental right under Article 21\. Court legalised passive euthanasia \- withdrawing medical treatment for terminally ill patients if such treatment artificially prolongs life \- with the approval of authorised Medical Boards. Court recognised Advance Medical Directives (Living Wills), which persons can register in advance to instruct what medical treatments they want or don’t want in case they become terminally ill or are not in a position to give consent for passive euthanasia.  Active euthanasia, which requires administering a lethal medication by a doctor to hasten death and is done only on the request of the patient to relieve pain and suffering, is illegal in India. However, it is legal in some other countries.

### What is the Right to Life and Liberty? How has this Right evolved through the history of the Indian Constitution? (part 4)

Source: https://liberty-lighthouse.vercel.app/topics/constitutionalism/faq/what-is-the-right-to-life-and-liberty-how-has-this-right-evolved-through-the-history-of-the-indian-part-4/

**Right to Privacy**	  
	  
**Case:**	A nine-member Constitution Bench of the Supreme Court in *K.S. Puttaswamy v. Union of India (2017)* unanimously declared the right to privacy a fundamental right rooted in **Articles 14, 19 and 21**. Privacy was held to include bodily integrity, informational privacy, the privacy of choice and dignity. The case originated from challenges to the biometric-based Aadhaar Card system. The Court mandated that an individual’s privacy can be restricted only on the grounds of \-

1) Legality \- there must be an existing, valid law.  
2) Legitimate aim \- the restriction on the right must serve a legitimate purpose concerning the State, like national security or public order  
3) Proportionality \- the State’s intervention must be proportional to the objective it seeks to achieve, using the least intrusive means possible.

	The Court also called for a robust data protection framework, which led to the enactment of the Digital Personal Data Protection (DPDP) Act, 2023, and the DPDP Rules, 2025\. 

**Case:**	The DPDP Act and Rules have been challenged in the Supreme Court in *Venkatesh Nayak, National Campaign for People’s Right to Information and Nitin Sethi, The Reporters’ Collective v Union of India[^1]*. The main contention of the petitioners is that the DPDP Act undermines the Right to Information Act (RTI) 2005\. The RTI Act was formally legislated after several SC judgements declared the “right to know” as a fundamental right read into Article 19(1)(a).

	Section 44(3) of the DPDP Act imposes a blanket ban on the disclosure of the personal information of public officials, overriding Section 8(1)(j) of the RTI Act, which allowed disclosure in the larger public interest. 20-year RTI Act jurisprudence has settled the balance between the right to privacy and the disclosure of information about public officials by testing whether information about a public functionary related to any public activity would lead to an unwarranted invasion of privacy and whether the disclosure is needed in the public interest. 

	Another issue contested in this case concerns unchecked mass surveillance, which allows the State to operate without adequate safeguards to prevent abuse by public authorities. The petitioners also say that no public consultation or legislative debate was held regarding the law's impact on the provisions of the RTI Act. The changes made to Section 8(1)(j) of the RTI Act were not separately tabled in Parliament for specific discussions. 

	The case is pending in the Supreme Court.  


[^1]:  Supreme Court of India, *W.P. (C) No. 177/2026law's impact.*

## Syllabus

## Primary Source Database

1. [Constitution of India](https://www.constitutionofindia.net/) — Centre for Law and Policy Research. Searchable database of historical constitutions, Constituent Assembly Drafting Committee debates and reports, and the text of the Constitution of India, 1950.

## Books

**Indian constitutional history**

1. Granville Austin, The Indian Constitution: Cornerstone of a Nation (1966)
2. Madhav Khosla, India's Founding Moment: The Constitution of a Most Surprising Democracy (2020)
3. Ramachandra Guha, India After Gandhi, ch. 6 "Ideas of India" (2007)
4. Gautam Bhatia, The Indian Constitution: Conversations with Power (2025)
5. Rajiv Dhavan, The Constitution of India: Miracle, Surrender and Hope (2017)
6. The Oxford Handbook of the Indian Constitution (eds. Sujit Choudhry, Pratap Bhanu Mehta, Madhav Khosla, 2016)
7. Tripurdaman Singh, Sixteen Stormy Days: The Story of the First Amendment of the Constitution of India (2020)

**Political and legal philosophy**

8. John Locke, Two Treatises of Government (1689)
9. A.V. Dicey, Introduction to the Study of the Law of the Constitution (1885)
10. Max Weber, Economy and Society, ch. 7 "Sociology of Law" (1922)
11. Karl Popper, The Open Society and Its Enemies (1945)
12. John Rawls, A Theory of Justice (1971)
13. Ronald Dworkin, Taking Rights Seriously (1977)
14. Robert Nozick, Anarchy, State and Utopia (1974)
15. Bruno Leoni, Freedom and the Law
16. Friedrich Hayek, The Road to Serfdom (1944)
17. Friedrich Hayek, The Constitution of Liberty (1960)
18. [Murray Rothbard, Ethics of Liberty](https://pdf.stafforini.com/rothbard-1998-ethics-liberty.pdf) (1998)
19. Frédéric Bastiat, The Law
20. Michael Sandel, Justice: What's the Right Thing to Do? (2009)
21. Amartya Sen, The Idea of Justice (2009)
22. John Rawls, Political Liberalism (1993)
23. Leon Louw, What Is Rule of Law (2007)

**Emergency and political history**

24. Kuldeep Nayar, The Judgement: Inside Story of the Emergency in India (1977)
25. Coomi Kapoor, Emergency: A Personal History (2015)
26. Chintan Chandrachud, The Cases that India Forgot (2021)
27. Prashant Bhushan, The Case that Shook India (2018)

## Academic Papers

1. [Justice as Fairness: Political not Metaphysical](https://johnjthrasher.com/wp-content/uploads/2013/11/Rawls_1985_Justice_as_fairness_political_not_metaphysical.pdf) (1985) 14(3) Philosophy and Public Affairs 223 — John Rawls
2. Liberalism, in Public and Private Morality (ed. Stuart Hampshire, 1978) — Ronald Dworkin
3. [Two Concepts of Liberty](https://berlin.wolf.ox.ac.uk/published_works/tcl/tcl-e.pdf) (1958) — Isaiah Berlin
4. [How Liberal Is India — Is the Indian Constitution Liberal?](https://www.sudhirkrishnaswamy.net/wp-content/uploads/2019/04/Is-the-Indian-Constitution-Liberal.pdf), in The Quest for Freedom in the Biggest Democracy on Earth (ed. Ronald Meinardus, 2019) — Sudhir Krishnaswamy

## Legal Cases

1. Kesavananda Bharati v The State of Kerala, 1973 4 SCC 225 — established the Basic Structure Doctrine
2. Minerva Mills v Union of India (1980) — Fundamental Rights against Directive Principles of State Policy
3. K.S. Puttaswamy v Union of India, (2017) 10 SCC 1 — Justice D.Y. Chandrachud drew on Berlin, Hayek, Sen, Nussbaum, and Shue to discuss positive and negative liberty

## Reports & Trackers

1. [Internet Freedom Foundation](https://internetfreedom.in/) — resource on online speech and privacy, including its [Internet Shutdowns tracker](https://internetfreedom.in/tag/internet-shutdowns/)
2. [Free Speech Collective](https://freespeechcollective.in/free-speech-tracker/) — tracker on state persecution cases over free speech
3. [Electoral Bonds Tracker](https://www.reporters-collective.in/electoral-bonds-tracker) — The Reporters' Collective
4. [How Reporting Six Years Ago Exposed a Political Fundraising Scandal That Rocked India's Elections](https://adrindia.org/content/how-reporting-six-years-ago-exposed-political-fundraising-scandal-rocked-india%E2%80%99s-elections) — Association for Democratic Reforms

## Articles & Blog Posts

1. [Parliament vs Judiciary: Tale of Two Bills Nullifying Judgments](https://www.livelaw.in/columns/parliament-vs-judiciary-tale-of-two-bills-nullifying-judgments-constitution-127th-amendment-bill-tribunals-reforms-bill-179603) — Manu Sebastian, Live Law, 2021
2. [How a Modi-Era Ecosystem of Official & Unofficial Censorship Is Transforming India's Film Industries](https://article-14.com/post/how-a-modi-era-ecosystem-of-official-unofficial-censorship-is-transforming-india-s-film-industries-679fdbcd6f914) — Anna M.M. Vetticad, Article 14, 2025
3. [SC's Kashmir Communication Shutdown Judgement Is Just the Beginning of a Long Uphill Campaign](https://internetfreedom.in/scs-judgement-on-kashmir-communication-is-just-the-beginning/) — Devdutta Mukhopadhaya, Internet Freedom Foundation, 2020
4. [Reporting Electoral Bonds Exposed Political Fundraising](https://gijn.org/stories/reporting-electoral-bonds-exposed-political-fundraising/) — Poonam Agarwal, Global Investigative Journalism Network, 2024

## Podcasts & Videos

1. [Episode 442: A Masterclass on Regulation (and Deregulation)](https://youtu.be/aXMiBOnFHsk?si=MV5rXAFoIATwxe1P) — The Seen and the Unseen

# Economic Growth

Source: https://liberty-lighthouse.vercel.app/topics/economic-growth/

Understand why economic growth matters, and what drives it

## FAQs

### Can Indians get rich before getting old?

Source: https://liberty-lighthouse.vercel.app/topics/economic-growth/faq/can-indians-get-rich-before-getting-old/

Right now, [more than half of India's population is under 30](https://ourworldindata.org/explorers/population-and-demography?country=IND~BGD~PAK~CHN&hideControls=true&indicator=Median+age&Sex=Both+sexes&Age=None&Projection+scenario=None). Which means that for every older dependent in India today, there are roughly two working-age Indians. Economists call this the [demographic dividend](https://www.investopedia.com/terms/d/demographic-dividend.asp): the growth boost a country gets when the majority of its people are of working age. More earners means more savings, more investment, and more production. But the dividend is not automatic — it must be earned.

The share of working-age Indians in the total population will [peak sometime around 2040](https://www.unfpa.org/data/demographic-dividend/IN) and then begin to fall. After that, fewer workers will support more dependents — elderly parents, grandparents, and a shrinking share of children. When that happens, growth gets harder. Household savings decline. Healthcare costs rise. And governments start struggling to meet pension and welfare bills as a smaller tax base tries to pay them. What this means is that India has roughly twenty years to grow fast enough so that when we age, we are wealthy enough to afford it. 

Consider South Korea. In 1960, it was a small, war-devastated country with a [per capita income comparable to India's](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=KR-IN) and no natural resources to fall back on. Over the next three decades, it opened its economy to trade and built globally competitive manufacturing. By the time its population began to age in the [1990s, South Korea had crossed into high-income status](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=KR). It got rich before it got old.

China followed a similar arc. After the reforms of 1978, the country grew at extraordinary speed. And today [an average Chinese person already earns five times what the average Indian earns](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=CN-IN). So China was also able to capitalise on its demographic dividend. 

India's position is more uncertain. We are growing, but our per capita income is still around $2,800. At our current pace, doubling that takes roughly a decade. Meanwhile, India [adds roughly a million new workers to the labour force every single month](https://www.ilo.org/sites/default/files/2024-08/India%20Employment%20-%20web_8%20April.pdf). Our demographic dividend will only pay out if those people are productively employed. A young population that cannot find work is a ticking time bomb.

This risk has a name: getting old before getting rich. Countries like Brazil (per capita income [around $9,000](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=BR)) and Thailand ([around $7,500](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=TH)) are stuck at middle incomes — their populations aged before their economies grew enough to sustain them. If we cannot grow rapidly enough, we risk the same fate.

The encouraging part is that the window is still open. What determines whether we get through it is the set of conditions that drive growth — investment, trade, competition, and institutions. How did other countries get rich, and what can India learn from them?

### How did other countries get rich?

Source: https://liberty-lighthouse.vercel.app/topics/economic-growth/faq/how-did-other-countries-get-rich/

In 1945, Japan lay in ruins. Allied bombing had flattened most of its cities. [Per capita income had fallen by more than 40% from pre-war levels](https://en.wikipedia.org/wiki/Japanese_economic_miracle). Twenty-five years later, Japan was the second largest economy in the world.

What happened in between has been repeated, with variations, by South Korea, China, and Vietnam. Every country that escaped poverty in the last eighty years did so by opening itself to trade, integrating into global markets, and competing with the world's best producers.

Japan rebuilt around exports — textiles first, then steel, then electronics and cars. Each step forced Japanese companies to meet the standards of the world's most demanding buyers. That discipline made Japan rich.

South Korea followed a decade later. In 1960, it had a [per capita income roughly comparable to India's](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=KR-IN) — a small, resource-poor country still recovering from a devastating war. Over the next three decades, it built a globally competitive manufacturing sector around exports: ships, steel, electronics, semiconductors. By the 1990s, South Korea had crossed into high-income status.

China's turn came with Deng Xiaoping's reforms in 1978. He opened [special economic zones](https://www.weforum.org/stories/2022/02/special-economic-zones-how-one-city-helped-propel-its-country-s-economic-development/) — starting with Shenzhen, then a fishing village on the border with Hong Kong — where foreign companies could invest and trade freely. When China joined the WTO in 2001, growth accelerated further. Over the following two decades, it [lifted 800 million people out of poverty](https://www.worldbank.org/en/news/press-release/2022/04/01/lifting-800-million-people-out-of-poverty-new-report-looks-at-lessons-from-china-s-experience). The average Chinese person today earns five times as much as the average Indian.

Vietnam is the most direct comparison for India. In the early 2000s, Vietnam had a [per capita income comparable to ](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=VN-IN)India's. The Doi Moi reforms opened trade, welcomed foreign investment, and plugged Vietnam into global supply chains for electronics, textiles, and footwear. Today, the average Vietnamese earns [nearly twice as much as we do](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=VN-IN).

Now one may argue that Japan and South Korea did not simply open up and step back. Their governments actively directed investment, protected early industries, and provided cheap credit to favoured firms. But if we look carefully, we realise that companies that received state support were required to export — to win in international markets or lose their backing. The state pushed them into the most demanding competition available, not away from it. Compare this with India, and we realise that we have protected our industries from global competition with no requirement to ever prove themselves against the world. The difference is between being open to global competition and refusing to compete.

Every country that got rich did so by selling to the world. But if that's the lesson, India faces an uncomfortable question: what happens to our farmers and manufacturers who have spent decades behind tariff walls?

### What is economic growth and why does it matter?

Source: https://liberty-lighthouse.vercel.app/topics/economic-growth/faq/what-is-economic-growth-and-why-does-it-matter/

If we were born in India in the 1950s or 1960s, our life would have been shaped almost entirely by scarcity. There would have been one doctor for thousands of people. Getting a telephone line would require us to wait years on a government list. And going to university or college would be a luxury. But our world today looks nothing like that — so what changed?

Is it that our government got more generous, or did we receive aid from wealthier countries? It's neither of those two things, but simply that the Indian economy grew.

What that means is that the Indian economy achieved a sustained increase in the amount of goods (mobile phones, schools, hospitals) and services (internet, teachers, doctors) in these years. This is what economists call economic growth. When a country grows, its people collectively earn more, can afford more, and gain access to things that did not exist before. It is [commonly measured through GDP](https://www.imf.org/en/publications/fandd/issues/series/back-to-basics/gross-domestic-product-gdp), the total value of everything an economy produces in a year. When that number rises consistently, we say the economy is growing.

But we don't care about economic growth for its own sake — but for what it does to people’s lives. Growth is the only force in human history that has reliably lifted large numbers of people out of poverty. Not charity, not foreign aid, and not some government subsidy. For most of human history, virtually everyone on earth lived in poverty: short lives, frequent famine, no reliable medicine. But in 18th-century Britain, the world found a systematic way to achieve sustained increases in productivity. [The Industrial Revolution](https://www.libertarianism.org/encyclopedia/industrial-revolution), as it's known today, unleashed an era of economic growth that has transformed the world we live in.

<iframe src="https://archive.ourworldindata.org/20260727-131016/grapher/historys-hockey-stick-gross-domestic-product-per-capita-using-the-ratio-scale-1990.html?tab=line" loading="lazy" style="width: 100%; height: 600px; border: 0px none;" allow="web-share; clipboard-write"></iframe>

The important thing to notice here is that growth was not engineered by a single person. [It emerged from the collective action of millions of individuals.](https://www.cambridge.org/core/journals/journal-of-institutional-economics/article/bottomup-or-topdown-the-origins-of-the-industrial-revolution/CD73088D8681CA4EAEB3D56D96EEBA4D) For instance, the Industrial Revolution was made possible not by a government program but by thousands of inventors, merchants, and tinkerers each pursuing their own interests. No one planned it. Britain simply provided the conditions — rule of law, secure property rights, a free internal market — and what followed transformed the world.

### What is the best way to measure economic growth? 

Source: https://liberty-lighthouse.vercel.app/topics/economic-growth/faq/what-is-the-best-way-to-measure-economic-growth/

When we care about progress, we care about children surviving past the age of five, whether a young person from a small town in Bihar can get a decent education, or whether a farmer in Vidarbha can see a doctor when he falls sick. But measuring all these things comprehensively and simultaneously is both expensive and methodologically complicated. People's lives are shaped by dozens of factors at once — income, health, education, safety, and opportunity, among others. Hence, if we want to track whether India is improving, we need a measure that reliably moves with everything else we care about — one that rises when lives improve and stays low when they don't. This is the problem that [GDP per capita](https://ourworldindata.org/grapher/gdp-per-capita-worldbank) solves surprisingly well.

GDP per capita is simply a country's total GDP divided by its population — the average value of goods and services produced per person in a year. At first glance, it appears to be a narrow measure of income. But the data tells a more interesting story.

In a 2022 paper titled ["Economic growth is enough and only economic growth is enough,"](https://lantpritchett.org/wp-content/uploads/2022/05/Basics-legatum-paper_short.pdf) economist Lant Pritchett shows that GDP per capita has two striking properties when compared against any measure of basic human wellbeing — whether [health](https://ourworldindata.org/grapher/healthcare-expenditure-vs-gdp), [education](https://ourworldindata.org/grapher/learning-outcomes-vs-gdp-per-capita), [nutrition](https://ourworldindata.org/grapher/daily-per-capita-supply-of-calories-vs-gdp-per-capita), or [sanitation](https://ourworldindata.org/grapher/death-rates-from-pneumonia-and-other-lower-respiratory-infections-vs-gdp-per-capita). First, it is empirically sufficient: no country in the world has achieved high GDP per capita while leaving its people with poor [basic wellbeing](https://ourworldindata.org/grapher/gdp-vs-happiness?country=IND~NGA~RUS~BRA~USA~AUS). Second, it is empirically necessary: no country has achieved good basic wellbeing while remaining poor. So, while the GDP per capita number may seem to measure only income, it is the single most reliable indicator of progress across every dimension that matters.

This happens because a growing economy generates the resources that enable better health, education, and infrastructure. A family that earns more can keep children in school longer. A profitable business can afford safer working conditions. Growth does not guarantee these outcomes, but it provides the resources that make these things possible. This is why, when economists want a single number to track whether a country is developing, they reach for GDP per capita. Not because it measures everything, but because it tracks what tends to drive everything else.

### Why is India the 5th-largest economy, yet Indians are still poor?

Source: https://liberty-lighthouse.vercel.app/topics/economic-growth/faq/why-is-india-the-5th-largest-economy-yet-indians-are-still-poor/

India is regularly described as the [world's fifth largest economy](https://www.imf.org/external/datamapper/NGDPD@WEO/OEMDC/ADVEC/WEOWORLD) — ahead of the United Kingdom, France, and Italy. And yet, an [average Indian earns less than $3,000 a year](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=IN). That is less than an [average Sri Lankan](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=IN-LK) — a country that, just three years ago, ran out of foreign exchange and couldn't import fuel. The [average Vietnamese](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=IN-VN), whose country liberalised a decade after ours. And the [average Bolivian](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=IN-BO) — a country most Indians would struggle to place on a map. So what is happening here? 

Think of it this way. Imagine two families, each earning thirty lakh rupees a year. The first has three members; the second has ten. The family of three has ten lakh rupees per person to spend on food, education, and healthcare. The family of ten has three lakh per person. So, while the total income is identical, the lived experience is entirely different.

India's relationship with its GDP works the same way. Our economy produces [nearly $4 trillion](https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=IN) in goods and services — but when [divided among 1.46 billion people](https://data.worldbank.org/indicator/SP.POP.TOTL?locations=IN), the average share comes to around [$2,800 per person](https://www.imf.org/external/datamapper/NGDPDPC@WEO/IND). This makes us both the fifth-largest economy and [the 168th-richest country in the world.](https://www.worldometers.info/gdp/gdp-per-capita/) 

This distinction matters for how we think about our ambitions and how we measure progress. When people celebrate India overtaking the UK to become the fifth largest economy, they are celebrating scale, not prosperity. But the relevant question for us should not be how large our economy is, but how rich the average Indian is. 

The good news is that we know the pathway to becoming rich, because other countries have done it. [China had the same per capita income as India in ](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=CN-IN)the 1980s, and today the average Chinese person earns five times as much as the average Indian. Similarly, [Vietnam had a per capita income comparable to India's in the early 2000s](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=VN-IN); today, the average Vietnamese earns nearly twice as much as we do. These countries did not stumble into prosperity. They charted their own path, grounded in principles we will explore throughout this series.

Today, India's challenge is not to be a large economy — we already are one. It is to ensure that growth is fast enough and broad enough to raise the incomes and opportunities of 1.4 billion individuals. But can we get rich before we get old?

# Education

Source: https://liberty-lighthouse.vercel.app/topics/education/

Exploring market-based approaches to education reform in India — from school choice and voucher systems to the unintended consequences of the Right to Education Act.

## FAQs

### Why do many still pay for school education when we have a fundamental right to free education?

Source: https://liberty-lighthouse.vercel.app/topics/education/faq/why-do-many-still-pay-for-school-education-when-we-have-a-fundamental-right-to-free-education/

Think about the last time you bought bottled water when a tap was free, hailed a cab for a short walk, or ordered delivery instead of cooking or eating college mess food. Each time, you made a deliberate trade-off where you spent money because the paid option gave you something the free one didn\'t: convenience, safety, or quality. That gap in perceived value drove your decision. For millions of Indian parents, the free alternative they are walking away from is the government school.

Government schools are notorious for their abysmal quality, despite heavy investments. Many government schools have poor [infrastructure](https://www.thehindu.com/news/national/karnataka/cag-report-exposes-poor-infrastructure-of-schools-in-karnataka/article68985520.ece) and [unsafe](https://indianexpress.com/article/education/21-kendriya-vidyalaya-buildings-found-unsafe-in-audit-hrd-ministry-5844258/) buildings. Government school teachers are frequently [absent](https://www.sciencedirect.com/science/article/pii/S0047272716301621) from classrooms, and students are not [learning](https://asercentre.org/wp-content/uploads/2022/12/ASER-2024-National-findings.pdf). Eventually, disillusioned parents and students turn away from such schools and opt for private schools.

Nearly [half](https://www.centralsquarefoundation.org/State-of-the-Sector-Report-on-Private-Schools-in-India.pdf) of India\'s children are now in private schools, and the reasons aren\'t hard to find. Private schools deliver [better](https://academic.oup.com/qje/article-abstract/130/3/1011/1931887) learning outcomes at lower cost, even after accounting for students\' socioeconomic backgrounds. Their teachers are [more](https://academic.oup.com/qje/article-abstract/130/3/1011/1931887) present and more engaged. Their campuses are [safer](https://academic.oup.com/qje/article-abstract/130/3/1011/1931887) and better disciplined. When COVID-19 shuttered classrooms, they adapted [faster](https://www.tandfonline.com/doi/full/10.1080/15582159.2024.2352994) than their government counterparts to keep children learning. Parents [cite](https://mospi.gov.in/sites/default/files/publication_reports/Report_585_75th_round_Education_final_1507_0.pdf) 'quality' as one of the top reasons for why they choose private over government schools. Therefore, millions in a relatively poor country are choosing to pay for education even when a free alternative exists. The value that parents are paying for is real.

Reasons parents cite for choosing private schools

![A segmented bar chart showing why parents choose private schools. Nearly three-quarters, 73.1 per cent, cite a better learning environment than government schools. Another 12 per cent cite English-medium education, 10.2 per cent say no government school is available nearby, and 4.7 per cent give other reasons.](/images/content/education-image4.png)

### Why do government schools underperform?

Source: https://liberty-lighthouse.vercel.app/topics/education/faq/why-do-government-schools-underperform/

Imagine yourself as the administrator or principal of a government school. You are not accountable to the parents who have trusted you with their child's education, or even to the children. Good feedback from parents won't get you a promotion or save you from a transfer. You are answerable to your bosses in the Department of Education (DoE). You respond to the targets they set for you. The DoEs, in turn, stipulate targets based on mandates set by Education Ministers at the state or national level. Education Ministers often chase goals that are most 'visible' to the public, such as schools' infrastructure and facilities. Learning, which is invisible until it is far too late, rarely makes the list.

The government\'s own record of achievements in school education makes this plain. It [celebrates](https://pib.gov.in/PressReleseDetail.aspx?PRID=1894915&reg=3&lang=1) a 3.3% increase in enrolment of children with special needs and 19.4 lakh [additional](https://pib.gov.in/PressReleseDetail.aspx?PRID=1894915&reg=3&lang=1) children enrolled at various levels. It points to higher [procurement](https://pib.gov.in/PressReleasePage.aspx?PRID=2091737) budgets under the mid-day meal scheme and the Cabinet\'s [approval](https://pib.gov.in/PressReleasePage.aspx?PRID=2091737) of 85 new Kendriya Vidyalayas. Not one of them asks whether a child can read.

When your job is judged by inputs rather than learning outcomes, you deliver inputs. You build buildings, upgrade old ones, install toilets, order computers, serve mid-day meals, and hit enrolment quotas. You lose sight of learning. The same incentive problem explains why teaching standards in government schools remain poor. Teachers face weak [incentives](#are-the-teaching-standards-poor-in-government-schools-why) to improve learning outcomes. Even when actors are capable and driven by good intentions, the rules of the game in government institutions push them to behave in ways that do not align with the interests of parents and children.

### Would pumping more resources into government schools help improve them?

Source: https://liberty-lighthouse.vercel.app/topics/education/faq/would-pumping-more-resources-into-government-schools-help-improve-them/

The core problem in government schools is weak incentives that lead to bad [investments](#why-do-government-schools-underperform), not insufficient funding. Without addressing these deeper problems, pumping more resources is unlikely to yield any significant gains. The government already spends between INR 15,000 and INR 70,000 per child annually. In [Delhi](https://delhiplanning.delhi.gov.in/sites/default/files/Planning/ch._15_education.pdf), for instance, it was INR 69,736 in 2021-22. But these don't necessarily translate into better performance. Despite the budget for school education [increasing](https://www.indiaspend.com/top-news/learning-crisis-782-increase-in-funding-but-one-in-five-grade-iii-student-struggles-to-read-909986) by 78% between 2014 and 2023, learning gains during this period were minimal. This paradox shows that existing resources are poorly allocated rather than inadequate. Without fixing the underlying incentive problems, pumping in more money will not improve outcomes.

![A line chart tracking learning outcomes among rural Grade III students between 2012 and 2022. The share able to read a Grade II level text rose from 21.4 per cent in 2012 to 27.2 per cent in 2018, then fell to 20.5 per cent in 2022. The share able to do two-digit subtraction with borrowing followed the same path and ended at 25.9 per cent.](/images/content/education-image5.png)
*Source: [IndiaSpend](https://www.indiaspend.com/top-news/learning-crisis-782-increase-in-funding-but-one-in-five-grade-iii-student-struggles-to-read-909986). 2024*

The importance of incentives becomes clearer when comparing government schools with private schools. Private schools are 2.5 to 5 times more [cost-effective](https://documents1.worldbank.org/curated/en/337941469129544845/pdf/107183-Revised-IDU-copy-of-Report.pdf) in improving learning outcomes, depending on the state. This gap exists because private schools face different incentives that align spending with learning outcomes. The difference in cost-effectiveness confirms that the problem lies in how resources are used, not how much is available. There is little evidence that spending more per child improves learning outcomes. More resources are therefore unlikely to solve the problem.

### Are the teaching standards poor in government schools? Why?

Source: https://liberty-lighthouse.vercel.app/topics/education/faq/are-the-teaching-standards-poor-in-government-schools-why/

Teaching standards in government schools are poor. Absenteeism is [common](https://academic.oup.com/jeea/article/3/2-3/658/2281517), and motivation is thin. Studies find a strong [correlation](https://ceid.educ.cam.ac.uk/publications/downloaded_EER_article1.pdf) between teacher pay and student achievement in private schools but not in public schools. The key reasons are limited accountability and low teacher autonomy in government schools.

Many diagnose this issue as inadequate salaries and poor training. But government school teachers in India are often better paid, more trained, and more secure in their jobs than their private school counterparts. Teacher salaries account for a high proportion of the per-student budget in government schools across states. The problem is not that government schools pay teachers too little. It is that they operate in a system where both failures and rewards are met with indifference.

![A table comparing per-student teacher salaries across six states. Rajasthan spends the largest share of its school budget on teacher salaries at 87 per cent and Himachal Pradesh the next largest at 80 per cent, while Bihar spends the least at 59 per cent. Public expenditure per government school student ranges from 4,515 rupees in Bihar to 27,073 rupees in Himachal Pradesh.](/images/content/education-image3.png)*
Source: [PAISA 2014, Accountability Initiative](https://accountabilityindia.in/sites/default/files/how_much_does_india_spend_per_student_on_elementary_education.pdf)*

Government school teachers face weak incentives to perform. They are assured job security. Except in cases of grave misconduct or criminal conviction, the worst punishment they suffer is a transfer. Promotions come with time, not performance. Parents and students have no leverage. On top of this, teachers are often loaded with administrative tasks and have little autonomy in what and how they teach. This system removes any link between effort and reward.

Private school teachers, despite lower pay and negligible perks, show up and teach. Students in private schools also tend to [achieve](https://asercentre.org/wp-content/uploads/2022/12/ASER_2024_Final-Report_13_2_24.pdf) better learning outcomes than those in government schools. Why? Repeated complaints from parents can cost a teacher their job. Good teachers are often noticed, rewarded, and even poached by other schools at higher salaries. Private schools tie teacher performance to consequences that matter. High salaries and training can help attract capable teachers to a school. But the rules of the game bring teachers to the classroom and make them teach well.

### How can we make government school teachers more accountable?

Source: https://liberty-lighthouse.vercel.app/topics/education/faq/how-can-we-make-government-school-teachers-more-accountable/

Governments can take multiple steps to improve teacher accountability. Tying promotions and job security to stricter performance standards would improve teachers\' accountability in government schools. Governments have tried to improve accountability in the past. Realising this goal is far from straightforward because unions, which protect most government school teachers, wield considerable political power and have repeatedly shown they will use it.

The headlines of the last year alone tell the story. Teachers in UP [protested](https://www.opindia.com/2024/07/teachers-protest-against-online-attendance-system-political-up-bjp-once-lost-election-for-banning-copying/) the introduction of an online attendance system until the state [suspended](https://www.business-standard.com/india-news/up-online-attendance-for-teachers-up-digital-attendance-system-for-teachers-launched-on-july-8-suspended-124071700465_1.html) the proposal. Unions in Maharashtra [pushed](https://timesofindia.indiatimes.com/city/pune/maharashtra-teachers-unions-push-for-reduced-workload/articleshow/120350411.cms) back against workload expectations. A teachers\' association in Delhi sought to revoke [guidelines](https://thewire.in/government/aap-govt-issues-show-cause-notice-to-education-dept-over-abrupt-transfer-of-5000-teachers) on transfers. Across West Bengal, para-teachers went on [strike](https://indianexpress.com/article/cities/kolkata/west-bengal-para-teachers-3-day-strike-salaries-9931842/) demanding higher salaries. Each campaign targeted a modest attempt to improve accountability, and most states had to roll back reforms. This pattern shows that even reasonable reforms face organised resistance from unions with the power to block them.

Unionisation gives teachers the tools to rally around shared interests. They can organise strikes, make well-timed threats ahead of elections, and secure representation in the upper house of parliament. A shared interest in retaining privileges makes collective action rational and effective. Taking away those privileges could bring the system to a halt entirely. The threat of a strike makes any [reform](https://discovery.ucl.ac.uk/id/eprint/10129159/1/Kingdon_India_teachers%20unions_January%2024,%202016%20-%20with%20final%20title.pdf) that threatens teacher interests politically costly.

The benefits of limited accountability are concentrated among teachers. The costs are [dispersed](https://www.youtube.com/watch?v=UCQkCyCvk9M) across children, parents, and taxpayers who are too diffuse to organise in the same way. Poor learning outcomes, wasted public money, and children who cannot read or add affect millions, but no single group bears enough of the burden to match the organised power of teacher unions. This asymmetry makes accountability reforms extremely difficult to implement.

### What can we do to fix government schools?

Source: https://liberty-lighthouse.vercel.app/topics/education/faq/what-can-we-do-to-fix-government-schools/

Many academics and policy wonks wrestle with the question of what can fix government schools. This question assumes that government schools are best suited to expand access to quality and affordable education for all children. But is that true?

Government-run schools have a poor [return](https://www.tandfonline.com/doi/abs/10.1080/00220388.2020.1715943) on investment, weak feedback loops, and an incentive structure that does not prize quality. Being funded by taxpayers and shielded from competition means there is limited pressure on the system to be efficient or deliver on its promised goals. The links between parents, students, teachers, the school administration, and policymakers are tenuous. What works and what does not is slow to reach decision-makers and hard to act on. Even at its best, the system lags. It moves slowly and learns reluctantly. These structural features make government schools poorly suited to deliver quality education at scale.

The question of fixing government schools conflates the end with the means. The end is to expand access to quality, affordable education for children. The means is government schooling. Suppose you wanted to get fit. Would you ask how to use your half-broken treadmill to get in shape, or ask what exercises will help you get fit? Or suppose India wanted to become a \$5 trillion economy. Would you ask how agricultural production can lead us there, or what policies will drive economic growth? Fixating on government schools as the solution locks us into one approach before we have properly defined the problem.

A focus on fixing government schools is often driven by concern for those who cannot access private schools. The key issue then is affordability and access, not the performance of government schools. If we care about children\'s learning, we should step back and ask a different question. How do we ensure that all children have the freedom to attend schools that suit their needs and where they learn well?

### Private schools have made education a business. How do we check against that?

Source: https://liberty-lighthouse.vercel.app/topics/education/faq/private-schools-have-made-education-a-business-how-do-we-check-against-that/

Business feels like a dirty word to associate with education. Yet a profit-seeking entrepreneur can bring us closer to quality schooling than a noble bureaucrat. The incentives facing private school owners push them to be responsive to parents in ways that government school administrators are not. Understanding these incentives shows why private provision, despite its flaws, offers a more promising path to quality education than government schooling.

Consider the incentives of private school owners and what their self-interest makes them do. Since their sustenance depends on fee payments, private school owners are pushed to be responsive to parents. A clear demonstration of this is that many private schools are English-medium, a feature parents greatly value but do not find in government schools. The fear of losing children to competitors, including free government schools, creates pressure on private school owners to deliver on outcomes that matter to parents. Consequently, private school teachers must show up in classrooms and produce results. The school\'s reputation is dear to private school owners. More money will only come when more parents deem the school suitable for their child. If they make too many mistakes, a sharp drop in enrolment would force them out of the market. There is no safety net. Finally, efficiency is non-negotiable if they are to remain economically viable. Strong feedback loops, efficiency, agility, and a focus on outcomes are all byproducts of a private school owner\'s profit motive and entrepreneurial mindset.

Proportion of government (left) and private (right) schools with English as the medium of instruction

![A doughnut chart showing the medium of instruction in India's government schools. Hindi accounts for 43.2 per cent while English accounts for only 8.1 per cent, and the rest is divided among Bengali, Marathi, Telugu, Oriya, Kannada, Tamil and other languages.](/images/content/education-image2.png)![A doughnut chart showing the medium of instruction in India's private schools. English accounts for 38.9 per cent and Hindi for 36.1 per cent, with the remainder spread across Bengali, Gujarati, Marathi, Kannada, Telugu, Punjabi and other languages.](/images/content/education-image1.png)
*Source: National Education Policy 2020: A One-time Comprehensive Evaluation. Centre for Civil Society. 2021*

Private school owners also have incentive problems. Some studies note that private school owners tend to focus on visible, easy-to-advertise quality indicators. Other concerns include arbitrary fee hikes, misinforming parents, and economising by compromising quality. Further, while private schools are [better](#private-schools-may-be-better-than-government-schools-but-their-quality-is-still-poor.-why) than their government counterparts, they still do not provide high-quality education. Innovation and variety in schooling are [minimal](#how-can-the-government-ensure-that-private-schools-deliver-quality). Private schools are far from perfect.

We often mistakenly compare the [shortcomings](https://nesslabs.com/nirvana-fallacy) of private schools with the ideal version of government schools. In the real world, though, our choice is between a slow-moving, apathetic system and a profit-driven one. When compared, the interests and incentives of private school owners are better suited to provide more children with access to quality education. Whether this promise of private schools is realised or squandered depends on the way they are governed and regulated. Unfortunately, our approach thus far has been heavy-handed, exacerbating the worst instincts of this system.

### Don't private schools only cater to the rich and elite?

Source: https://liberty-lighthouse.vercel.app/topics/education/faq/dont-private-schools-only-cater-to-the-rich-and-elite/

Private schools are not just for the wealthy. In 2019, nearly 50% of students were enrolled in 4.5 lakh private schools. Of these students, 45% pay less [than](https://www.centralsquarefoundation.org/State-of-the-Sector-Report-on-Private-Schools-in-India.pdf) INR 500 as monthly school fees and only 10% pay more than INR 2,000 per month. Such affordable schools, called budget or low-fee schools, dot every state in the country. The majority of private unaided schools are budget schools that cater to individuals from low-income populations. The data contradict the common perception that private education is a luxury good.

Proportion of enrollment in private schools at various fee tiers

![A bar chart showing private school enrolment by monthly fee band. Just under half of families, 45.5 per cent, pay less than 500 rupees a month and 70 per cent pay less than 1,000 rupees. Only 9.4 per cent pay more than 2,000 rupees.](/images/content/education-image6.png)

*Source: Central Square Foundation. 2020. State of the Sector Report on Private Schools in India.*

Even historically, government schools were not the norm for the poor and vulnerable in India. In the early 1800s, traditional institutions like *pathshalas*, *madrassahs*, and *gurukulas* imparted education. These institutions [were](https://www.arvindguptatoys.com/arvindgupta/beautifultree.pdf) kept alive by revenue contributions from the community, including illiterate peasants. British officials across Bengal, Bihar, and Bombay noted the widespread prevalence of village schools in India, with some stating [that](https://www.arvindguptatoys.com/arvindgupta/beautifultree.pdf) there is hardly a village, great or small, throughout our territories, in which there is not at least one school, and in larger villages more. Communities have long organised and funded education for their children without relying on government provision.

Education was not an exclusive privilege enjoyed only by upper-caste members. Per [records](https://www.arvindguptatoys.com/arvindgupta/beautifultree.pdf) from 1822-25, in an Oriya-speaking region, only 35.6% of students belonged to the three upper varnas (Brahmins, Kshatriyas, and Vaishyas), and 63.5% were Shudras and other castes. Researchers observed similar trends in the indigenous schools of Tamil- and Malayalam-speaking regions. This evidence challenges the assumption that private provision inherently excludes marginalised communities.

When considering how we can support low-income communities in accessing affordable schooling, it is crucial to recognise the role private schools have played and continue to play in achieving this goal.

### Private schools may be better than government schools, but their quality is still poor. Why?

Source: https://liberty-lighthouse.vercel.app/topics/education/faq/private-schools-may-be-better-than-government-schools-but-their-quality-is-still-poor-why/

Our education laws make it expensive and difficult to set up and operate a private school. The Right to Education Act 2009 and 145+ state education laws dictate the following for all private schools: size of the land for building a school (sometimes as high as 2 acres), nature of building (and often colour), classroom size, necessary play and learning equipment, design of staircases, number of library books, the number of teachers they should hire and who they can fire, teacher salaries (that tend to be above market rate) and qualifications, toilets and water facility, and instruction hours. This list is not exhaustive. There are several other conditions on operational matters, fee structure, and ownership norms. To affiliate with boards, schools must meet additional requirements. In Delhi, for [instance](https://ccs.in/sites/default/files/2022-08/anatomy_of_k-12_governance_in_india_1.pdf), a school must submit 125 documents to obtain the necessary permissions. Their documents [move](https://ccs.in/sites/default/files/2022-08/anatomy_of_k-12_governance_in_india_1.pdf) through almost 155 steps and involve more than 40 officers in the Directorate of Education. It can take [over](https://ccs.in/sites/default/files/2022-08/anatomy_of_k-12_governance_in_india_1.pdf) 5 years to set up a school. These requirements create barriers to entry and impose costs that are largely unrelated to learning outcomes.

Meeting these requirements considerably raises the cost of running private schools. In Assam, to comply with the land requirement, schools need at [least](https://ccs.in/sites/default/files/2024-08/gem-report-final.pdf) INR 30 lakh. Schools in Haryana report spending [over](https://ccs.in/sites/default/files/2024-08/gem-report-final.pdf) INR 20 lakh in bribes every year. While some schools respond by raising fees, those that serve low-income communities cannot do so beyond a certain point. They struggle to break even. Between 2015 and 2018, governments across India sent closure notices to [around](https://ccs.in/sites/default/files/2022-08/school-closure-report.pdf) 13,500 private schools for failing to comply with regulatory norms. Around 2,500 of those schools shut down. This wave of closures hit budget private schools that serve low-income families the hardest.

The risk of closure discourages people from setting up schools. Those who do are starved of resources once they meet the norms. Since only a few players can enter the market, the competitive pressure for quality is low. Schools spend a large amount on complying with costly input norms and lining the pockets of bureaucrats. Little remains to improve learning outcomes or respond to the demands of parents and children. All this continues even as multiple [studies](https://pdel.ucsd.edu/_files/paper_2013_karthik.pdf) indicate that infrastructure norms have minimal to no impact on educational outcomes.

### How can the government ensure that private schools deliver quality?

Source: https://liberty-lighthouse.vercel.app/topics/education/faq/how-can-the-government-ensure-that-private-schools-deliver-quality/

Ideally, we want private schools to keep parents\' and children\'s interests at the centre. But what are their interests? How do they define quality? The honest answer is we do not know. Not all parents likely define quality the same way. What parents seek from a school varies and depends on a complex interplay of personal circumstances, experiences, their own education, and their child\'s needs, among other factors. If the government does not know what quality means to different parents, it cannot prescribe a single model that works for everyone.

Currently, our education laws prescribe how schools ought to educate children. Through a series of prescriptive norms, the government dictates all aspects of school education: infrastructure, operations, fees, ownership structure, type of teachers, textbooks, curriculum, and nature of assessments. These norms remain the same [regardless](#private-schools-may-be-better-than-government-schools-but-their-quality-is-still-poor.-why) of the type of school (low-fee or high-fee), the neighbourhood in which it is situated, or the children it caters to. This standardisation leaves little room for schools to respond to the needs and aspirations of parents and innovate. By imposing a one-size-fits-all model, the government prevents schools from discovering what works for different communities.

We would likely find it absurd if the government were to adopt a similar approach in other sectors. Wouldn't it be odd if, along with laying down minimum safety and hygiene standards, the government also dictates how restaurants should deliver the perfect dining experience to their customers? Or if they lay down detailed rules on how educational YouTube channels deliver their content?

We would likely find it absurd if the government were to adopt a similar approach in other sectors. Along with laying down minimum safety and hygiene standards, would the government also dictate how restaurants should deliver the perfect dining experience to their customers? Or lay down detailed rules on how educational YouTube channels deliver their content? The absurdity of such interventions in other sectors reveals the problem with micromanaging education.

Innovation and improvements in quality will come in education as they do in any other sector, by letting a thousand flowers bloom. How do we encourage more enterprising players to set up schools and experiment with different approaches to school education? Make it easy and attractive to do so. As more schools open, they will begin to compete for students and find ways to differentiate themselves. Schools that deliver quality or make education more affordable will benefit from higher enrolment, and those that do not will eventually close.

Competition eases the government\'s burden. They do not have to identify the single right way to educate 260+ million children in India. Schools competing with one another, experimenting, and responding to parents\' needs will create a plethora of options and approaches. These will cater to students and parents with different definitions of quality. The government should instead focus on ensuring that parents receive accurate information from schools and on checking against fraud and negligence by school owners.

### How can we realise the right to free education for all children?

Source: https://liberty-lighthouse.vercel.app/topics/education/faq/how-can-we-realise-the-right-to-free-education-for-all-children/

Ensuring that all children can access education of reasonable quality for free is a difficult task. Any right that guarantees people a good or service for free creates questions about provision and payment. Understanding what a right to free education actually means reveals why fulfilling it is more complex than it appears. A right is a claim that creates a corresponding duty on others. Some rights, like the right to one\'s property, require others to *refrain* from taking what is yours. These types of rights are called negative [rights](https://www.youtube.com/watch?v=gXOEkj6Jz44). Other rights, like the right to education, are positive rights and require someone to provide you with something proactively. This distinction matters because positive rights impose costs that negative rights do not. Someone must actively provide the service and bear the expense.

The government typically fulfils this duty using taxpayer money. We all incur the cost when the government takes this responsibility. Even the beneficiaries of such free services pay for them via indirect taxes. Nothing is truly free.

When people refer to the right to education, they typically mean the right to access schooling. One can seek education anywhere: at home, in libraries, online, on the playground, and even at parties if one is lucky. But the right to education is understood as a right to schooling. Therefore, a right to free education requires using taxpayer money to ensure that 260+ million children in India can access quality schooling.

This promise is non-trivial because taxpayer money is a limited resource. Guaranteeing such rights needs to be balanced against the state\'s other responsibilities, including its core functions such as maintaining law and order. Finite [resources](#would-pumping-more-resources-into-government-schools-help-improve-them), low cost-effectiveness of government schools, poor learning outcomes, and weak [incentives](#why-do-government-schools-underperform) of actors in the system should push us to question the extent and nature of the government\'s role in school education. Since private schools outperform those run by the government and remain parents\' preferred choice, it is worth considering how to make private education accessible to more students rather than relying solely on government provision.

## Syllabus

## Books

1. [The Beautiful Tree](https://www.amazon.in/BEAUTIFUL-TREE-DHARAMPAL/dp/8175310952) — Dharampal

2. [The Beautiful Tree: A personal journey into how the world's poorest people are educating themselves](https://www.amazon.in/dp/B00ELPRLC0) — James Tooley

## Academic Papers

1. [Annual Status of Education Reports](https://asercentre.org/aser-2024/) — ASER Centre

2. [Teacher Compensation: Can Decentralisation to Local Bodies Take India from the Perfect Storm Through Troubled Waters to Clear Sailing?](https://www.brookings.edu/wp-content/uploads/2016/07/2006_pritchett.pdf) — Lant Pritchett and Rinku Murgai

3. [Teacher Absence in India: A Snapshot](https://academic.oup.com/jeea/article/3/2-3/658/2281517) — Michael Kremer, Nazmul Chaudhury, F. Halsey Rogers, Karthik Muralidharan, Jeffrey Hammer

4. [Teacher Unions in India: Diverse and Powerful](https://www.cambridge.org/core/books/abs/comparative-politics-of-education/teacher-unions-in-india-diverse-and-powerful/E1C1E9E4DBAA9AF916303CCB67AC8B8B) — Tara Béteille, Geeta Gandhi Kingdon, and Mohammad Muzammil

5. [A Political Economy of Education in India: The Case of Uttar Pradesh](https://ceid.educ.cam.ac.uk/publications/OPI_KingdonMuzammil20081.pdf) — Geeta Kingdon and Mohd. Muzammil

6. [Why Private Education is Good for the Poor](https://www.cato.org/sites/cato.org/files/pubs/pdf/tooley.pdf) — James Tooley and Pauline Dixon (Cato Institute)

7. [The Risks to Education Systems from Design Mismatch and Global Isomorphism](https://www.hks.harvard.edu/centers/cid/publications/faculty-working-papers/risks-education-systems-design-mismatch-and-global-isomorphism) — Lant Pritchett

8. [Where Has All the Education Gone?](https://academic.oup.com/wber/article-abstract/15/3/367/1657648?login=false) — Lant Pritchett

9. [The Private Schooling Phenomenon in India: A Review](https://docs.iza.org/dp10612.pdf) — Geeta Gandhi Kingdon

## Reports

1. [Anatomy of K-12 Governance in India](https://ccs.in/sites/default/files/2022-08/anatomy_of_k-12_governance_in_india_1.pdf) — Centre for Civil Society

2. [Governance Challenges in K-12 Education in India](https://ccs.in/sites/default/files/2022-08/governance-challenges-in-k-12-education-in-india.pdf) — Bhuvana Anand and Tarini Sudhakar

3. [Ease of Operating Private Schools in India](https://ccs.in/sites/default/files/2024-08/gem-report-final.pdf) — Prashant Narang and Tarini Sudhakar

4. [Ease of Operations for Budget Private Schools in India](https://ccs.in/ease-operations-budget-private-schools-india) — UNESCO / Centre for Civil Society

5. [Reimbursements under RTE Section 12(2): Too Little, Too Late](https://ccs.in/node/159) — Centre for Civil Society

6. [Direct Benefit Transfer in Education: A Policy Blueprint](https://ccs.in/sites/default/files/2022-10/dbt-in-education-policy-brief.pdf) — Ritika Shah and Celia Xinuo Chen

## Articles & Blog Posts

1. [There Is No Role for Government in Owning and Running Schools](https://timesofindia.indiatimes.com/blogs/seeing-the-invisible/there-is-no-role-for-government-in-owning-and-running-schools/) — Sanjeev Sabhlok

2. [Busting Myths and the Double-Speak on Education](https://www.hindustantimes.com/analysis/busting-myths-and-the-double-speak-on-education/story-Ozl6OZBxDzmVUWMevgMSjI.html) — Gurcharan Das

3. [One and a Half Cheers: National Education Policy Promises Much, but Fails to Come to Grips with India's Education Crisis](https://timesofindia.indiatimes.com/blogs/men-and-ideas/one-and-a-half-cheers-national-education-policy-promises-much-but-fails-to-come-to-grips-with-indias-education-crisis/) — Gurcharan Das

4. [Private Schools in India: Over-Regulated and Under-Appreciated](https://world-education-blog.org/2023/01/30/private-schools-in-india-over-regulated-and-under-appreciated/) — Prashant Narang

5. [Schooling Is Not a Public Good](https://fee.org/articles/schooling-is-not-a-public-good/) — Corey DeAngelis

6. [The Difference Between Positive and Negative Rights](https://www.libertarianism.org/columns/is-there-right-health-care) — Trevor Burrus

## Podcasts & Videos

1. [Concentrated Benefits and Dispersed Costs](https://www.youtube.com/watch?v=UCQkCyCvk9M) — Center for Study of Public Choice

2. [Friedman's Law of Spending](https://www.youtube.com/watch?v=5RDMdc5r5z8)

3. [The Profit Motive in Education](https://seenunseen.in/episodes/2017/3/13/episode-9-the-profit-motive-in-education/) — Parth J Shah in conversation with Amit Varma

4. [A Deep Dive into Education](https://www.youtube.com/watch?v=fa_ZXlqwmSM) — Ajay Shah and Amit Varma

5. [What Does It Take to Open a Private School in Delhi](https://www.youtube.com/watch?v=zk9T5mG7i5A) — Centre for Civil Society

6. [Schools in India: Public vs Private](https://idronline.org/podcasts/on-the-contrary-podcast-social-impact/government-schools-or-private-schools-what-is-india-choosing/) — India Development Review (IDR)

7. [One Million Teacher Vacancies That Should Never Be Filled](https://ccs.in/node/1181) ([Part 1](https://ccs.in/node/1181) and [Part 2](https://ccs.in/node/1183)) — Centre for Civil Society

8. [Education Financing: Filling a Sieve with Water](https://ccs.in/node/1186) — Centre for Civil Society

# Feminism

Source: https://liberty-lighthouse.vercel.app/topics/feminism/

Understanding women's economic freedom in India, from land rights and labour law to why markets and feminism are not at odds.

## FAQs

### Are policies like menstrual leave empowering, or do they unintentionally disadvantage women in hiring? 

Source: https://liberty-lighthouse.vercel.app/topics/feminism/faq/are-policies-like-menstrual-leave-empowering-or-do-they-unintentionally-disadvantage-women-in-hiring/

The intent behind menstrual leave policies is easy to respect. They acknowledge that menstruation can cause real physical discomfort and push back against the expectation that women simply absorb it without acknowledgement. Several Indian companies and some states have introduced such policies, and many women have welcomed them.

But good intentions do not settle the question of effect. And here, it is worth thinking carefully about who actually bears the cost.

If an employer must grant paid leave that applies only to women, then hiring a woman carries a cost that hiring a man does not. In sectors with thin profit margins, a garment factory, a small business, or a startup, that difference can influence hiring decisions at the margin. Research on mandatory maternity leave benefits across multiple countries finds a consistent pattern. When employers must bear the full cost of policies that apply only to women, formal sector hiring of women tends to fall, particularly in smaller enterprises.

There is a broader version of this problem. Women's safety in public transport, access to childcare, and adequate workplace facilities are not private obligations;; they are necessary safety requirements that constitute a public good the state has largely failed to provide. When law responds to that failure not by fixing it, but by making employers responsible for it instead, it turns every woman an employer might hire into a regulatory liability. The policy intended to support women makes them a more expensive hire.

This is not an argument against taking these issues seriously. It is an argument for thinking carefully about the mechanism, and asking whether there are ways to address the underlying problem that do not reduce women's access to work.

### Can the state correct gender norms in society?

Source: https://liberty-lighthouse.vercel.app/topics/feminism/faq/can-the-state-correct-gender-norms-in-society/

A common assumption in policy debates is that social norms constraining women's economic participation are a private problem requiring a public solution. The state, on this view, is the corrector of last resort. But in India, the historical record complicates that framing considerably. The state has not stood apart from the norms restricting women's lives. It has been one of their primary authors.

Indian labour law classifies women alongside children as a vulnerable group requiring special management. One state's excise legislation lists women among the categories barred from employment in liquor establishments — alongside criminals and the diseased. Night work restrictions have been defended in court on the grounds that women require protection from moral dangers and to preserve what one judgment called the vigour of the race. These are not historical curiosities. They are provisions that remain in active legal force.

The pattern is consistent. Where women have been excluded from work, restricted in their hours, or deemed unsuitable for entire categories of employment, the restriction has typically carried the force of law. The norm did not precede the legislation. In many cases, the legislation created and entrenched the norm.

This matters when evaluating proposals for the state to correct patriarchal attitudes through new interventions. The institutions being proposed as the solution are the same ones that have spent decades encoding the problem. That does not mean nothing should change. It means the most credible first move is for the state to undo what it has done: remove the restrictions it imposed, repeal the classifications it invented, and stop treating women's economic choices as a matter requiring official supervision. The case for state action here is strongest when it points inward.

### Can you be a feminist and pro-free market at the same time? 

Source: https://liberty-lighthouse.vercel.app/topics/feminism/faq/can-you-be-a-feminist-and-pro-free-market-at-the-same-time/

The assumption that you cannot usually rests on a conflation worth unpacking. It mixes up two different things: existing markets, shaped by centuries of discriminatory law, unequal property rights, and exclusionary practice, and the idea of genuinely open markets, in which every individual can participate on equal terms. Much of what critics correctly identify as harmful about capitalism is, on closer inspection, a critique of the ways markets are not open. Women excluded from certain jobs by law. Paid less because regulation crowds them into a narrow range of roles. Unable to own property independently in practice despite holding the right on paper. These are not the outcomes of free markets. They are the outcomes of markets that were never free to begin with.

Consider what a genuinely competitive labour market does. Employers compete for workers. A firm that refuses to hire capable people based on sex, caste, or any characteristic unrelated to ability hands its competitors an advantage. Over time, that pressure is one of the most powerful forces for breaking down exclusion, not because employers become virtuous, but because they respond to incentives. The historical examples bear this out. When labour shortages forced employers to hire women into skilled industrial roles, women excelled, and the justifications for their exclusion quietly collapsed under the weight of evidence.

The feminist project, in its economic dimension, is to remove the barriers that prevent women from participating on equal terms. The free market project is to ensure that markets are actually open to everyone. These are not competing demands. They are the same demand made from different starting points.

The tension people sense between feminism and free markets is real, but it is a tension between the ideal of open participation and the distorted reality of markets still shaped by law, habit, and accumulated exclusion. Resolving that tension does not require choosing between the two. It requires removing the distortions that make them appear to conflict.

So yes, you can be a feminist and pro-free market at the same time. In the economic domain, if your feminism is about individuals rather than groups, and your market liberalism is about genuine openness rather than defending existing arrangements, you are largely arguing for the same thing.

### Do reservations and quotas help women?

Source: https://liberty-lighthouse.vercel.app/topics/feminism/faq/do-reservations-and-quotas-help-women/

It depends on what kind, and where. The evidence points in different directions depending on the mechanism, and the mechanism matters more than the intent.

In political representation, India's experience with reserving panchayat seats for women has produced clear results. Studies find that villages with women-led panchayats invested more in drinking water, sanitation, and healthcare — public goods that women tended to prioritise. The representational effect produced real policy change. But the same evidence base documents a countervailing problem: the sarpanch pati phenomenon, where a woman holds the reserved seat in name while her husband exercises the actual authority. The seat is filled. The representation is not.

Labour market quotas tell a different story. Tamil Nadu's factory rules require that to employ women on night shifts, a factory must ensure women constitute at least two-thirds of the night workforce and number at least ten. The intent was to encourage inclusion. The effect is the opposite. A factory that cannot easily assemble a predominantly female night shift will simply choose not to hire any women at night at all. Instead of making it easier to hire one woman, the rule makes it costly to hire any unless you hire many. Employers respond to that incentive by not hiring women.

The contrast between these two cases suggests a principle. Reservations that open access — creating space where women were previously excluded — can work. Requirements that attach new conditions to every hiring decision tend to raise the cost of inclusion until exclusion becomes the rational response.

The strongest case for intervention is removing explicit barriers. The weakest is adding new ones in the name of protection.

### How has women's participation in work and public life changed over the years?

Source: https://liberty-lighthouse.vercel.app/topics/feminism/faq/how-has-womens-participation-in-work-and-public-life-changed-over-the-years/

The pattern is consistent enough to amount to a principle: where legal and institutional barriers to women's participation were removed, participation followed. Where they were imposed or maintained, it did not. The history of women's entry into work and public life is largely the history of those barriers and what happened when they fell.

For much of recorded history, the barriers were comprehensive. Law and custom together ensured that women could not own property, enter contracts independently, or access the training that skilled work required. This was not incidental. Public vocational schools funded by all taxpayers trained men in engineering and machine-shop practice while offering women courses in dressmaking. The assumption that certain work was not for women was built into public institutions, not just private attitudes.

What shifted these arrangements was rarely persuasion alone. Labour shortages, most dramatically during the World Wars, forced employers to hire women into skilled industrial roles from which they had previously been excluded. Women performed capably. The justification for exclusion did not survive contact with the evidence.

Legal reform produced similar effects. In India, the Hindu Succession Act was amended in 2005 to give daughters equal inheritance rights over ancestral property. Research that followed found measurable improvements in women's socioeconomic status in states where the reform was implemented. When legal standing over property changed, real outcomes changed with it.

In India, the story is further complicated by caste. Access to education and formal work was determined not by gender alone but by social hierarchy, and the two were rarely separable. Reformers who fought to open schools for girls in the 19th century were fighting the same fight as those challenging caste restrictions on occupation and education. They understood that exclusion by birth, whether by sex or by caste, was a single problem. The cause was the same: that individuals should be able to do what they are capable of, regardless of what they were born into.

### How have markets and trade shaped women's lives historically?

Source: https://liberty-lighthouse.vercel.app/topics/feminism/faq/how-have-markets-and-trade-shaped-womens-lives-historically/

Consider what daily life looked like for a woman in 1800. Several hours of every day went toward tasks that are now automated: hauling water, grinding grain, washing clothes. Childbirth was dangerous. In pre-industrial Europe, maternal mortality ran to roughly 1,000–2,000 deaths per 100,000 live births, meaning a woman who bore several children faced a cumulative lifetime risk that was genuinely life-threatening. Most of life was consumed by domestic labour and the demands of survival.

What changed this was the prosperity generated by industrialisation and expanding trade. That prosperity funded public health infrastructure — safe water, sewage systems — which cut infectious disease and brought maternal mortality down to single digits per 100,000 births in most developed countries today. It produced the technologies that reduced domestic labour: running water, fuel-efficient stoves, washing machines. And it created labour markets in which employers, competing for workers, had a material incentive to hire women into roles from which they had previously been excluded.

That incentive became undeniable during the World Wars, when acute labour shortages forced employers to hire women into skilled industrial roles — mining, engineering, manufacturing — that had previously been declared unsuitable for them. Women performed capably across every field they entered. The assumptions about their unsuitability collapsed not because attitudes changed first, but because competitive pressure made exclusion expensive.

Trade extended these effects beyond industrial economies. Access to global markets raised incomes in ways that reduced child mortality, which in turn reduced the number of births women needed to have. As family sizes shrank and domestic burdens lightened, the conditions for women's participation in economic life shifted accordingly.

Early industrial conditions were harsh, and the gains were unevenly distributed. But the direction of change was clear: expanding markets and trade did more to alter the material conditions of women's lives than any deliberate social programme of the era.

### Is feminism only about women? 

Source: https://liberty-lighthouse.vercel.app/topics/feminism/faq/is-feminism-only-about-women/

When half the population is excluded from work, property, and public life, the loss is not only theirs. The talents and ideas of excluded people do not vanish. They are simply wasted. This is the honest case for women's equality: not a demand for special treatment, but an argument about what any society forfeits when it sorts opportunity by birth rather than by capacity.

The perception that feminism is exclusively about women has a real basis. First-wave feminism, the movements of the 19th and early 20th century, was built around legal equality: the right to vote, own property, work, and enter into contracts. Its logic was individual. Third-wave feminism, from the 1990s onwards, shifted toward systemic power and group identity. Some strands argued that women constitute a distinct political class with interests in conflict with men's. When people say feminism is only about women, they are often describing these traditions accurately. The argument here is that this is not the only version of feminism, nor the most coherent one.

The economic cost of exclusion is real. Studies estimate that closing gender gaps in employment and entrepreneurship could add 20% to global GDP. But the stronger argument is not about aggregate output. Consider what it would mean if any group, defined by a characteristic they were born with, were barred from certain jobs or assumed incapable of certain tasks. We would call that unjust. We would also call it inefficient. The case for women's economic freedom rests on exactly this logic: not that women deserve special accommodation, but that individuals deserve to be treated as individuals.

Indian reformers who fought for women's education and work in the 19th and early 20th centuries understood this clearly. They saw the exclusion of women and the exclusion of lower castes as the same problem: a social order that assigned roles by birth rather than by capacity. Their project was not charity. It was the expansion of freedom.

Feminism, at its best, is not a claim on behalf of one group. It is an argument against sorting human beings by the circumstances they were born into — one that applies wherever that sorting occurs

### What does "economic freedom" actually mean for women?

Source: https://liberty-lighthouse.vercel.app/topics/feminism/faq/what-does-economic-freedom-actually-mean-for-women/

We tend to think of freedom in political terms: the right to vote, to speak, to move. But the more immediate constraint in most women's daily lives is economic. If you cannot earn your own income, own property, or support yourself outside a marriage or family arrangement, your formal rights remain largely theoretical. The threat of destitution is itself a form of control.

Economic freedom, then, is the practical ability to work where you choose, earn what your labour is worth, and leave situations that are bad for you — because you have the means to do so. It is the difference between having options and having none.

In India, the sharpest illustration of this is land. Women make up 73% of rural agricultural workers but own only 12.8% of land holdings. This matters beyond the obvious. Land is the primary collateral for formal credit. A woman without a title cannot access institutional loans on the same terms as men and falls back on informal moneylenders who charge significantly higher rates. And a woman whose name does not appear on a land record is not recognised as a farmer under government schemes. No subsidies. No crop insurance. No institutional support that male farmers receive as a matter of course. She works the land. The state does not see her.

Financial access tells a similar story. The share of women with bank accounts rose from 35% in 2011 to around 89% by 2024, a remarkable shift. But having an account and using it independently are different things. The Global Findex survey found that 42% of women account holders had inactive accounts, compared to 30% of men. The account exists; the financial agency often does not.

This framing changes how we should evaluate any law or programme aimed at women. The relevant question is not: does it express concern for women? It is: does it expand or contract their real capacity to participate in economic life on their own terms? A law that prevents women from working in certain jobs, or makes hiring them significantly more expensive, reduces economic freedom regardless of its intention. And a scheme that substitutes state transfers for earned income does not dissolve dependence. It relocates it.

### What effect do India’s labour laws have on women?

Source: https://liberty-lighthouse.vercel.app/topics/feminism/faq/what-effect-do-indias-labour-laws-have-on-women/

Laws designed to protect women in the workplace can end up reducing their access to it. Understanding why requires looking at both what the laws demand and who ends up bearing the cost.

The Prosperiti State of Discrimination Report, a 2022 audit across 23 Indian states, found that laws restricting women cluster around four categories: working at night, in hazardous jobs, in arduous jobs, and in jobs deemed morally inappropriate. Fourteen of twenty-four states prevent women from working nights in factories. Twenty-two industrial processes restrict women's participation. These are not dormant provisions. They are in active use.

The compliance costs are concrete. A 2025 analysis modelled a textile factory in Coimbatore through Tamil Nadu's requirements for hiring women on night shifts. The requirement to provide separate safe transport alone adds costs equivalent to 86% of a female worker's monthly minimum wage. Under the full set of conditions, the factory's profit margin could fall by 42%. A rational employer avoids hiring women at night not out of bias, but because the law makes it economically irrational. The protection, in effect, becomes the barrier.

But the hiring cost is only part of the problem. The deeper issue is who is responsible for women's safety in public spaces and transport in the first place. That is a core state obligation. What labour law has done is transfer that obligation to private employers, who respond the only way they rationally can: by not hiring women. The state's failure to provide safe public infrastructure becomes, through the mechanism of labour law, a restriction on women's employment. The cost of that failure is borne not by the state but by the women it was meant to protect.

Two distinct problems, then: laws that make hiring women expensive, and a state that has outsourced its own obligations onto employers. Both reduce women's access to work. And both deserve to be named clearly when evaluating whether a protective law is actually doing what it claims.

### What is the gender pay gap, and does it exist? 

Source: https://liberty-lighthouse.vercel.app/topics/feminism/faq/what-is-the-gender-pay-gap-and-does-it-exist/

The gender pay gap is the difference in average earnings between women and men. In India, it is large and documented. A 2022 audit found that in states with the most legal restrictions on women's work, women earn on average 67.7 paise for every rupee earned by men. In states with fewer restrictions, the figure rises to 77.4 paise. The gap is real. The more interesting question is why it exists, because the answer determines what would actually close it.

One explanation is pure discrimination: employers paying women less simply because of who they are. In competitive labour markets, this should be self-correcting. A firm that pays a woman less than her output warrants is offering a discount to any competitor willing to hire her at a slightly higher rate. Over time, discriminating firms lose talent to rivals who do not. In sectors where competition for workers is genuinely intense, gender wage gaps do tend to be smaller. But this mechanism only works when women have access to the same range of jobs as men.

In India, they often do not. Women are legally excluded from night shifts in factories across fourteen states and from twenty-two categories of industrial work. When women are barred from entire categories of employment, they are crowded into a narrower range of roles. More workers competing for fewer positions pushes wages down. The pay gap, in this reading, is largely downstream of a regulatory problem.

Career breaks add a third layer. Women who take time out for pregnancy and childcare accumulate fewer years of experience than men of equivalent age, and less experience typically means lower pay. India's Maternity Benefit Act mandates 26 weeks of paid leave. But when employers bear the full cost of that leave, it can quietly change who they choose to hire, a point examined in a separate question.

Mandating equal pay without removing the restrictions that crowd women into lower-wage roles treats the symptom while leaving the cause in place.

### What would genuinely "free" economic opportunity look like for women in India, and how far are we from it? 

Source: https://liberty-lighthouse.vercel.app/topics/feminism/faq/what-would-genuinely-free-economic-opportunity-look-like-for-women-in-india-and-how-far-are-we-from/

Start with a simple test. Can a woman in India work where she chooses, earn what her labour is worth, own what she produces, and leave situations that are harmful to her, without needing anyone's permission to do any of these things? That is economic freedom. And by that test, India has considerable ground to cover.

The legal starting point is weak. Indian women have access to roughly 60% of the legal protections available to men, covering employment, property, and financial rights, a figure that sits below even the global average of 64%. But the more important problem is that even the protections that exist on paper are not backed by the systems needed to make them real.

Land ownership makes the gap concrete. Women make up 73% of rural agricultural workers but hold title to only 12.8% of land. A woman can farm the same plot her entire life without her name appearing on the record. Without that title, she cannot access institutional credit, cannot qualify for government schemes available to farmers, and has no recognised legal standing over the land she works. The Hindu Succession Act gives her inheritance rights. The land record often does not reflect them.

Time is the other constraint. Women in India spend on average nearly five hours a day on unpaid domestic and caregiving work, roughly three times the figure for men. That is time not available for paid employment, skill-building, or earning an independent income. The hours are not a cultural preference. They are the predictable result of a caregiving infrastructure that does not exist. Publicly provisioned childcare at scale would directly reduce this constraint. India does not have it.

Physical safety in public spaces compounds both. A woman who cannot travel safely to a night shift, or who depends on her employer to arrange transport because the state has not made streets safe, is not exercising free choice. She is navigating a system that has transferred the state's obligations onto her and those who employ her.

The distance between where India is and what genuine economic freedom would look like is not a mystery. The land records need to reflect what the law already says. The legal restrictions on where women can work need to come down. And childcare needs to be treated as economic infrastructure rather than a private arrangement. The gap is not in knowing what needs to change. It is in the distance between the law on paper and the life it describes.

### Why do more educated women in India often participate less in the labour force, rather than more? 

Source: https://liberty-lighthouse.vercel.app/topics/feminism/faq/why-do-more-educated-women-in-india-often-participate-less-in-the-labour-force-rather-than-more/

The relationship between education and women's work is not linear. Participation is highest among women who must work to survive, falls as household incomes rise into the middle range, and is expected to recover at the highest education and income levels. India has not broadly reached that third stage. The result is a U-shaped curve, and the question worth asking is what pulls participation down in the middle, precisely where education is rising.

Part of the answer is social. In many middle-income households, a woman not working is a signal of status. The family has risen far enough that her earnings are not essential, and her presence at home communicates that. Working, particularly in manual or informal roles, can actively undermine that signal. Education raises aspirations without necessarily expanding the range of work that is considered acceptable, which means more educated women face a narrower set of options that their households will support, not a wider one.

Part of the answer is structural. Educated women reasonably expect work that reflects their qualifications. Outside major cities, the formal sector jobs that might meet that expectation are scarce. What remains is informal work: insecure, offering little career progression, often poorly located and difficult to reach safely. For a woman weighing the costs of sustained participation against what the market is actually offering, withdrawal can be the rational response to a bad set of options.

And part of the answer is domestic. The years in which women are most likely to exit the workforce coincide with the years of heaviest caregiving responsibility. Reliable childcare is expensive and unevenly available. Flexible arrangements that might allow women to remain employed through that period are rarely offered. The workforce does not accommodate the double burden, so women leave it.

These are not failures of individual ambition. They are the predictable outcomes of specific, identifiable conditions. And conditions can change.

## Syllabus

## Books

1. A Vindication of the Rights of Woman — Mary Wollstonecraft
2. Concerning Women (1926) — Suzanne La Follette

## Academic Papers

1. [Free Market Feminism](https://deirdremccloskey.org/docs/pdf/Article_233.pdf) (1999) — Deirdre McCloskey
2. [How Markets Empower Women](https://www.cato.org/policy-analysis/how-markets-empower-women-innovation-market-participation-transform-womens-lives#introduction) — Chelsea Follett, Cato Institute, 2018
3. The Impact of Work-Family Policies on Women's Employment (2011) — Hegewisch and Gornick
4. Women's Economic Empowerment in the Developing Countries: Reengineering Patriarchy? (2018)
5. [Why is Female Labour Force Participation Declining in India?](https://www.ilo.org/wcmsp5/groups/public/---dgreports/---inst/documents/publication/wcms_250977.pdf) — ILO, 2014
6. Precarious Drop: Reassessing Female Labour Force Participation in India — World Bank, 2017
7. [Women Workers in India: Why So Few Among So Many?](https://www.imf.org/external/pubs/ft/wp/2015/wp1555.pdf) — IMF, 2015
8. [Women and Work in India](https://ncaer.org/wp-content/uploads/2022/09/a3.pdf) — India Policy Forum, 2018
9. Women's Inheritance Rights and Intergenerational Transmission of Resources in India (2014)

## Reports, Data & Indices

1. [Women's Political Empowerment Index](https://ourworldindata.org/grapher/women-political-empowerment-index), 2025 — Our World in Data
2. [Female Labour Force Participation in India](https://www.worldbank.org/en/country/india/brief/female-labor-force-participation-in-india) — World Bank, 2026
3. [Women, Business and the Law](https://wbl.worldbank.org/en/wbl) — World Bank, 2026
4. [Our World in Data: Maternal Mortality](https://ourworldindata.org/maternal-mortality)
5. [McKinsey Global Institute: The Power of Parity in India](https://www.mckinsey.com/~/media/mckinsey/featured%20insights/employment%20and%20growth/the%20power%20of%20parity%20advancing%20womens%20equality%20in%20india/mgi%20india%20parity_full%20report_november%202015.pdf), 2015
6. State of Discrimination Report — Prosperiti/Trayas, 2022

## Articles & Blog Posts

1. [Too Safe to Work](https://prosperiti.substack.com/p/46-too-safe-to-work) — Prosperiti, 2025
2. [India's Labour Codes: What Changes for Women](https://prsindia.org/billtrack/the-code-on-wages-2019) — PRS Legislative Research, 2019
3. [Indian women's long journey towards equality in law and practice](https://blogs.worldbank.org/en/developmenttalk/indian-womens-long-journey-towards-equality-law-and-practice) — World Bank Blog, 2023

# Goods and Services Tax

Source: https://liberty-lighthouse.vercel.app/topics/gst/

Understanding India's Goods and Services Tax and the economics behind it. Explore how GST works, why it was introduced, and the debates over tax rates, exemptions, compliance, and reform.

## FAQs

### Did GST really create “one nation, one market”?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/did-gst-really-create-one-nation-one-market/

Before 2017, a truck driving from Gurugram to Chennai could expect to stop a dozen times. At each state border it joined a queue at a check-post while officials inspected papers and levied entry taxes, octroi, and assorted local duties. By the government's own account, trucks spent roughly a fifth of their running time idling at these inter-state barriers, and a large part of a typical journey was spent at check-points and official stoppages rather than driving ([Business Standard](https://www.business-standard.com/article/economy-policy/gst-impact-trucks-travel-time-in-interstate-movement-drops-20-says-govt-117073000276_1.html)). India was a single country with internal customs posts.

GST's promise was to tear those down. By folding state and local levies into a single tax and treating the whole country as a single taxable market, it removed the fiscal incentive to stop a truck at a state line. The check-posts came down at more than 20 borders, and the effect on the road was immediate: trucks that once managed about 225 kilometres a day began covering 300 or more, close to a third further, simply because they stopped waiting. For a logistics-heavy economy, that is a large productivity gain.

But "one market" was a strong claim. The physical check-post was replaced by a digital one, the "e-way bill," an electronic permit a transporter must generate for any consignment over ₹50,000, valid for a set number of days by distance. It moves the friction online rather than removing it, and a truck can still be stopped and detained over an e-way bill that does not match its cargo ([LiveLaw](https://www.livelaw.in/amp/high-court/madhya-pradesh-high-court/gst-consigner-and-consignee-same-wrong-address-in-e-way-bill-error-less-likely-to-be-inadvertent-madhya-pradesh-high-court-imposes-100-penalty-514505)). A firm operating across states must also register and file separately in each, so the paperwork of crossing a border has not vanished entirely.

And GST unified only the part of the market it actually covers. Petrol, diesel, and electricity sit outside it, so their taxes still vary state to state (see "Why are petrol, power and property still outside GST?"). Whole stretches of the economy, farm produce moving through state-controlled mandis, real estate, liquor, run on their own local rules. The single market is real for the goods inside GST, and patchy beyond them.

What GST built is not quite the seamless market of the slogan, but it is far closer than what came before. The trucks really do move faster. GST dissolved the tax borders inside India while leaving a thinner set of administrative and sectoral ones standing: a single market in the making rather than a finished one.

### Does GST help small businesses, or crush them with compliance?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/does-gst-help-small-businesses-or-crush-them-with-compliance/

For many small businesses, GST does not feel like the "good and simple tax" it was sold as. In July 2025, a vegetable seller in Haveri, Karnataka received a GST notice for ₹29 lakh. The tax department had added up four years of UPI payments into his account, about ₹1.6 crore, and assumed he owed tax on it, never mind that fresh fruit and vegetables are exempt. He was not alone. The state sent thousands of such notices, traders across Bengaluru pulled down their UPI scanners and put up "cash only" signs, and the government eventually backed off.

That is GST at its most heavy-handed. Like every VAT, GST works through a paper trail: it matches invoice against invoice and follows the digital money trail. That self-policing lays a compliance burden on every firm that files, and it weighs most on the smallest, which is why the designers carved them out. A business turning over less than ₹40 lakh a year (₹20 lakh for services) need not register for GST at all. Beyond this threshold, up to ₹1.5 crore, firms can choose a "composition scheme," paying a flat rate on turnover, about 1% for a trader, instead of running the full system. In return, they cannot charge GST to customers or reclaim tax on their own purchases. This is why the roadside chaiwala, the thela, and the tiny kirana hand you no tax invoice. A firm that sells to bigger companies, by contrast, registers in the normal way rather than opt for composition, because its buyers want an invoice they can claim credit on, and a composition dealer cannot give them one.

The squeeze falls on the firm in the middle. Once turnover tops ₹1.5 crore, composition is no longer allowed, so the firm must run the full machinery, yet it is still too small to hire a tax team. GST is run state by state, so a business operating in five states files in five places, and a normal taxpayer files around two returns a month plus a yearly one, in each state it operates. The rules themselves never sit still either. Rates, forms, and thresholds shift almost every year, so a firm pays twice over: once to comply now, and again to rebuild when the tax changes next year. Predictability, the thing that makes a tax cheap to live with, is what GST has most lacked.

The credit rules do the most damage. Input tax credit is what makes GST a tax on consumption rather than production, but the law lets the taxman deny it to a buyer when the seller fails to deposit the tax he collected. So a shopkeeper who has paid GST on his stock can still lose the credit because a supplier down the line vanished or defaulted, with the money tied up in disputes for a year or more. The rule exists for a reason: fake invoices are a real epidemic, with authorities detecting more than ₹1.1 lakh crore of bogus credit claims between 2020 and 2025. But it effectively deputises every small buyer as an enforcer against fraud he cannot see, and several High Courts have said a good-faith buyer should not be punished for another's cheating.

That is the price of a self-policing tax. The paper trail of matched invoices that makes GST work also carries a compliance cost, and that cost falls unevenly on firms of different sizes.

### Has GST delivered on its promise?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/has-gst-delivered-on-its-promise/

The GST was sold as a clean-up: address the pernicious cascading taxes, remove the barriers at state borders, and create a unified pan-India market. After nine years, it is a real reform that has come halfway.

The GST has been a meaningful reform. The old cascading, tax piling on tax down a supply chain, has been deeply cut. For goods moving through registered firms, GST really does behave like a single tax on final consumption (see "How does GST work?"). The check-post raj is gone, and trucks that once idled at every border now run a third farther in a day (see "Did GST really create 'one nation, one market'?"). Millions of firms entered the formal tax net for the first time. Whatever its flaws, India is not going back to the maze of excise, service tax, and seventeen state VATs that came before.

Now the shortfall, which is just as real. The clean consumption tax the textbooks promise works only if the input-credit chain is unbroken, and India's ITC system breaks in too many places. Petrol, power, and property sit outside GST entirely (see "Why are petrol, power and property still outside GST?"). Exemptions for health, education, and finance break the chain from within (see "Why are exemptions considered cancer in the VAT system?"). Credits and refunds still stick, turning the tax into a cost for the small firms least able to bear it (see "Is India's GST a real VAT?"). The rates will not sit still, shifting almost every year. And despite the record collections, GST has not clearly raised more, as a share of the economy, than the taxes it replaced (see "How has GST performed as a source of revenue?"). The 2025 overhaul simplified the slabs but left this deeper plumbing largely untouched (see "What was GST 2.0, and was it a step in the right direction?").

None of these shortfalls is an accident. Each is the residue of the bargain that made GST possible: the exclusions bought the states' consent, the exemptions bought political peace, and the tangled credit rules grew from a fear of fraud. The distance between the GST India designed and the GST it runs is, in the end, a map of the compromises a federal democracy had to make.

So has GST delivered? It has been a break from the past, but not the clean, broad, single tax it promised to be. It remains an open question whether the government can summon the will to finish what it started, or whether "good and simple" remains an aspiration.

### How does GST work?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/how-does-gst-work/

The GST is a value-added tax in design. This means it is levied at multiple stages of production and distribution, but tax paid on inputs is credited against tax due on output. So each firm effectively pays tax only on the value it adds.
 
The difference compared to a usual sales tax is that while sellers are required to charge the tax on all their sales, they can also claim a credit for taxes that they have been charged on their inputs.
 
This should not be confused with India's earlier state VAT regime. State VAT was also a value-added tax in design, but it was much narrower. It was a state-level tax on the sale of goods within a state. It did not apply to services, and it did not create a seamless credit chain across inter-state trade. Inter-state sales were generally subject to the Central Sales Tax, which often broke the input tax credit chain and led to cascading.
 
GST is more comprehensive because it brings goods and services into a common value-added tax framework and creates a mechanism for taxing both intra-state and inter-state supplies. In intra-state transactions, GST is split between the Centre and the state through CGST and SGST. When goods cross a state line, a single Integrated GST is collected by the Centre, which passes the states' share to the destination state. (See 'When you buy from another state, which government gets the tax?')
 
Here is how VAT is designed to work. Suppose Firm A sells its output (assumed, for simplicity, to be produced using no material inputs) for ₹10,000 (excluding tax) to firm B. Firm B sells its output for ₹40,000 (excluding tax) to firm C. Firm C then sells to final consumers for ₹90,000 (excluding tax). Assume there is a VAT at 10%.
 
Firm A charges firm B ₹11,000 and remits ₹1,000 to the government.
 
Firm B charges firm C ₹44,000 (₹40,000 + 10% VAT). It collects VAT of ₹4,000 on its sale, but claims an input credit of ₹1,000 for the VAT paid to firm A, so it remits ₹3,000.
 
Firm C charges consumers ₹99,000. It collects output VAT of ₹9,000, claims an input credit of ₹4,000 for the VAT paid to firm B, and remits ₹5,000.
 
The government thus collects a total of ₹9,000, equal to 10% of the final pre-tax price of ₹90,000.
 
<table>
  <thead>
    <tr>
      <th>Stage</th>
      <th>Seller → Buyer</th>
      <th>Value added</th>
      <th>Pre-tax sale price</th>
      <th>VAT rate</th>
      <th>Invoice total (price + VAT)</th>
      <th>Input VAT credit claimed</th>
      <th>Net VAT remitted to govt</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td>1</td>
      <td>Firm A → Firm B</td>
      <td>10,000</td>
      <td>10,000</td>
      <td>10%</td>
      <td>11,000</td>
      <td>0</td>
      <td>1,000</td>
    </tr>
    <tr>
      <td>2</td>
      <td>Firm B → Firm C</td>
      <td>30,000</td>
      <td>40,000</td>
      <td>10%</td>
      <td>44,000</td>
      <td>1,000</td>
      <td>3,000</td>
    </tr>
    <tr>
      <td>3</td>
      <td>Firm C → Final consumers</td>
      <td>50,000</td>
      <td>90,000</td>
      <td>10%</td>
      <td>99,000</td>
      <td>4,000</td>
      <td>5,000</td>
    </tr>
    <tr>
      <td colspan="7">Totals</td>
      <td>9,000</td>
    </tr>
  </tbody>
</table>
In its economic effects, the tax is equivalent to a 10% tax on final sales: total VAT paid to the government equals 10% of the final pre-tax price. But because it is collected throughout the supply chain, with credits for tax paid on inputs, it secures revenue more effectively than a tax collected at the final sale alone.
 
Two useful ways to think about this:
 
- Businesses are mostly tax collectors. They charge GST, subtract the GST they paid on inputs, and pay the difference.
- The final consumer bears the tax. The customer cannot claim input tax credit.
GST works by taxing each sale and letting firms claim credit for the GST paid on their inputs. Stage by stage the credits net out, so the tax settles on final consumption instead of lodging inside the cost of production.

### How has GST performed as a source of revenue?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/how-has-gst-performed-as-a-source-of-revenue/

By the obvious measure, GST looks like a triumph. Monthly collections now routinely cross ₹2 lakh crore and touched a record ₹2.36 lakh crore in April 2025; the full financial year 2024-25 brought in about ₹22 lakh crore, an all-time high. The figure climbs almost every month, and the government points to it as proof the reform is working.

But "collections went up" is a weak test. The economy and prices grew over these years too; almost any tax would gather more rupees in 2025 than in 2017. The sharper question is whether GST raises more as a share of the economy than the tangle of taxes it replaced, and there the answer is, at best, "not by much." GST revenue has hovered around 6.7 to 6.9% of GDP recently, only a little above where the old system sat. Compared like-for-like with the specific taxes GST subsumed, and once you strip out the temporary compensation cess that propped up the early years, the gain shrinks close to zero. The states' share of GDP from these taxes has, if anything, slipped ([NIPFP](https://www.nipfp.org.in/publication-index-page/working-paper-index-page/revenue-performance-assessment-of-indian-gst/)).

Why has a reform of this scale not visibly lifted revenue? Two forces are at work. The first is rate erosion. When GST was designed, an expert committee judged that a "revenue-neutral rate" of about 15.3% was needed to match the old taxes' yield ([RNR report](https://gstcouncil.gov.in/sites/default/files/2024-02/cea-rpt-rnr.pdf)). The effective rate has since drifted down to around 11 to 12%, as item after item was shifted to lower slabs. The second is base narrowing: exemptions, and the exclusion of big-ticket items like fuel and electricity (see "Why are petrol, power and property still outside GST?"), keep shrinking what is actually taxed. The September 2025 rate cuts pushed the effective rate lower still.

There is a real bright spot. GST's "buoyancy," how much revenue grows for each rupee of GDP growth, has improved, helped by digital tools like e-invoicing and e-way bills that make evasion harder. The collecting machine is getting better at gathering whatever the rules allow. The trouble is that the rules keep giving away rate and base faster than enforcement can claw them back.

The fair verdict is that GST has been a revenue stabiliser more than a revenue raiser. It collects more reliably and is harder to dodge than the patchwork before it, but nine years on it has not clearly delivered the larger tax take its architects hoped for, because the political habit of cutting rates and widening exemptions keeps eating into the base it stands on.

### How should the tax system help the poor?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/how-should-the-tax-system-help-the-poor/

If a lower rate on essentials mostly benefits the rich (as the last question argued), how should a tax system protect the poor? The worry rests on the assumption that for the tax system as a whole to be fair, every tax within it must be fair on its own. It need not. A welfare system includes policies like old-age pensions, public food-kitchens, subsidized schools and creches, and work-guarantee programs. What matters is that the tax-and-welfare system taken together is fair—that those with more pay more and the poorest are protected—not that each part is progressive by itself. Once a country has a working income tax and welfare system, redistribution is better done through those than through different tax rates on individual goods (See "Shouldn't essential goods be taxed at lower rates to help the poor?"). An income tax and a welfare scheme can see a household's whole circumstances, while a tax on soap or footwear cannot. It charges the industrialist and the daily-wager the same, because the bar of soap does not know who is buying it.

India has already run this experiment. Until the reforms of 2014–15, the government subsidised cooking-gas cylinders for everyone who bought one. Because the subsidy rode on a product, richer households—who simply use more—took the larger share; the IMF found India's energy subsidies flowing disproportionately to the better-off, with wealthy households drawing roughly twice the cooking-gas subsidy of poor ones. The solution was better targeting of the subsidy using direct cash transfers. Under the PAHAL scheme, households bought LPG cylinders at the market price, and the subsidy they were entitled to receive was transferred directly into their bank accounts. The government later used this logic to exclude consumers whose household taxable income crossed ₹10 lakh, encourage voluntary surrender and route targeted support to low-income households.

The key idea is a division of labour. Let GST be a broad tax at a single rate, doing what it does well—raising revenue without distorting how things are made. Tax cigarettes, liquor and luxury goods not by bending GST into extra slabs but with a separate excise on top, which is simpler to set and easier to adjust. And leave redistribution to the tools built for it: a genuinely progressive income tax, and cash paid straight into people's bank accounts, as India's Direct Benefit Transfer already does.

In a country where the income tax doesn't apply to everyone, and the benefits of subsidies on electricity and education fail to reach the poorest households, this theory has its limits. The broader tax and benefit system cannot yet carry the whole weight of fairness—but that is a reason to widen the income tax, not to load the job back onto GST: don't ask a tax on soap to do the work of a broader tax on incomes.

### If something is GST-exempt, why isn’t it cheaper?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/if-something-is-gst-exempt-why-isnt-it-cheaper/

Formal education is exempt from GST, so a school charges no tax on its fees. Yet part of what you pay in those fees is still tax. That is the puzzle of GST exemptions: taking a good out of GST does not take the tax out of its price.

An exemption from GST means two things are true: the seller charges no GST on its sales, and, just as important, it cannot reclaim the GST it paid on its inputs. Take the school. It charges no tax on fees, so the value it adds, the difference between its revenue and costs, goes untaxed. But it still pays GST on what it buys to run: repairs, equipment, electricity, outsourced security, cleaning. Being exempt, it can claim none of that back. A normal business subtracts the GST on its inputs from the tax it owes on its own sales and keeps the difference. The exempt school has no sales tax to subtract from and no refund coming, so the input tax stays stuck in its costs and is passed on in the fee.

A zero rate looks the same on the purchase invoice but works very differently. Take an exporter, a Tiruppur workshop shipping T-shirts abroad. Like the school, it charges no GST on its sale. Unlike the school, it reclaims every rupee of GST it paid along the way, on the cloth, the dye, the electricity. So the shirt leaves India genuinely tax-free. That is the difference: an exemption removes the tax on the final sale but leaves the tax on inputs trapped, while a zero rate removes both. Exemption clears the last stage; zero-rating clears the whole chain. In India, true zero-rating is reserved almost entirely for exports.

So an exempt good is not tax-free, which is why it is rarely as cheap as people expect. It can even be dearer, especially in the case of intermediate goods. Because the trapped tax cannot be reclaimed, when an exempt good or service is sold on to another business, the tax is charged again further down the chain, the very cascading GST was built to kill, and the final price can end up higher than if the thing had simply been taxed in the normal way.

Why exempt anything, then? Usually because the activity is politically sensitive, like schooling or health, or hard to tax cleanly, or too small to be worth the compliance burden. But an exemption is rarely the gift it looks: it can leave the price of the very thing it was meant to protect higher than a real tax cut would, and it carries costs of its own. GST exemption can be perfectly understandable and still fail to make things cheaper the way you might expect

### Is India's GST a real VAT — or “VAT in form, not in function”?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/is-indias-gst-a-real-vat-or-vat-in-form-not-in-function/

India's GST has the shape of a modern value-added tax: tax at every stage, with credit for the tax paid on inputs, so the burden is meant to land only on final consumption (see "How does GST work?"). The economists Arbind Modi, Vijay Kelkar, and Ajay Shah argue that the actual implementation is the trouble: that India built the outward form of a clean VAT without its working parts, leaving ["a VAT in form, not in function."](https://blog.theleapjournal.org/2026/01/cholesterol-in-indian-gst.html) The charge is about the functioning of the input tax credit, the very heart of the VAT.

A tax levied at every stage but reclaimed on every input never accumulates inside production. It passes down the chain and its burden falls, as intended, on the final consumer, leaving a firm's own choices, what to make, what to buy, whether to export, undistorted. When the credit flows, GST is a tax on consumption. When it is blocked or delayed, the unrecovered tax becomes a cost trapped in the business, and a consumption tax turns into a tax on production: the cascade GST was built to end.

India's current GST breaks that flow in several places. Normally a firm uses its credit by setting it against the tax due on its own sales; only when the credit runs bigger than that bill must it ask the government to refund the difference in cash. GST pays such refunds in only two situations: exports, and the "inverted duty" case, where a firm's inputs are taxed more heavily than the good it sells. Anywhere else, credit a firm cannot use simply stays stuck. Even in those two cases the refund is document-heavy, slow, and unpredictable, with money locked up for months.

The inverted-duty problem is large and concrete. In textiles, one of India's biggest employers, inputs are taxed at 12 to 18% but the cloth at 5%; fertiliser makers pay 18% on ammonia to sell a product taxed at 5%. By one industry estimate, ₹2 to 3 lakh crore of working capital sat trapped this way before the 2025 reforms tried to release it ([Business Today](https://www.businesstoday.in/latest/economy/story/working-capital-blocked-industry-flags-gst-inverted-duty-burden-in-letter-to-fm-sitharaman-523143-2026-03-30)). Meanwhile big inputs such as fuel and electricity sit outside GST altogether, so the tax on them cannot be credited at all and sticks inside prices (see "Why are petrol, power and property still outside GST?"). And a buyer's credit is capped to what his suppliers actually upload to the system, so an honest firm can lose credit because someone upstream filed late, a burden that falls hardest on the smallest firms (see "Does GST help small businesses, or crush them with compliance?").

That last point deserves some pause. A large firm can wait out a delayed refund or borrow against it; a small one on thin margins cannot. So blocked credit makes India's GST regressive in an unusual way: the smaller the business, the higher its real rate of tax. The same mechanics weigh most on services and on investment in machinery, exactly the activities India most needs to grow.

The remedy the critics propose is not to abandon GST but to finish it. Kelkar and Shah argue that one well-designed reform would do most of the work: a single-rate GST on a broad base, credit that is full and near-automatic, and refunds paid fast and by default rather than as a favour. There has been movement: from November 2025, exporters and inverted-duty firms can claim 90% of a refund up front within a week. Whether that becomes the rule or stays the exception is the test of whether GST has delivered on its promise (see "Has GST delivered on its promise?").

### Isn’t a consumption tax like GST regressive, since the poor spend more of what they earn?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/isnt-a-consumption-tax-like-gst-regressive-since-the-poor-spend-more-of-what-they-earn/

GST is a tax on what people spend, not on what they earn or save. And here the poor and the rich differ sharply: a poor household spends almost every rupee it earns, while a richer one saves a good slice of its income. So a larger share of a poor family's income passes through the tax—and measured against income, GST takes a bigger share from the poor than from the rich. A tax that falls more heavily, in proportion, on those with less is called regressive; and on a single year's figures, GST looks exactly that.

But that measure confuses the tax with what people do with their money. A rich household's GST looks small next to its income only because it saves a large part of that income rather than spending it—and GST is paid only when money is spent, not when it is saved. But the rich are not spared indefinitely because saving only delays the tax. The tax will have to be paid when the money is eventually spent, by the saver or by whoever inherits it.

Informality bends the picture further: much of what the poorest buy is sold off the books, by sellers too small to be in the tax net, so it carries no GST at all—and the headline rate overstates what the poor really pay (see "Does informality change who really pays GST?").

So GST looks regressive on a single year's snapshot, but that snapshot is the wrong test. What matters is whether the tax-and-spending system is fair taken as a whole—not whether every piece of it is. A consumption tax like GST can sit inside a thoroughly progressive settlement, so long as the income tax and public spending do the real work of redistribution (see "If reduced GST rates don't help the poor, what should we do instead?").

###  Shouldn’t essential goods be taxed at lower rates to help the poor?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/shouldnt-essential-goods-be-taxed-at-lower-rates-to-help-the-poor/

Rice, cooking oil, a bar of soap—these are essential things no household can do without, and on which the poor spend most of what they earn. There is an argument for taxing them lightly, because the poor spend most of their income on these items.

But a low rate on an essential item is not a well-targeted support because it does not discriminate between beneficiaries. It is a discount for everyone who buys those things—and the rich buy more of almost everything. Cut the tax on ghee, and a well-off family that runs through several tins a month saves far more, in rupees, than a poor household buying a small pouch now and then. Because richer households consume more in absolute terms, most of the revenue the government gives up ends up with them, not the poor it was meant to help.

The same holds across a whole economy. In Mexico, when food and other essentials were exempted from VAT, out of every $100 of revenue forgone, less than $5 reached the poorest tenth of households, while more than $20 reached the richest. Sri Lanka's exemptions ran the same way: about $41 per person for the poorest tenth against $208 for the richest.

And the revenue forgone could have funded cash transfers, clinics or schools—help that can be directed to the poor, rather than handed to everyone who buys cooking oil. Rupee for rupee, that targeted spending usually does more for the poorest than a rate cut the rich enjoy alongside them. Taxing essentials lightly feels like helping the poor; but when measured by how much actually reaches them, it is among the least effective ways to do it.

### The GST is levied on the formal economy. How does informality influence GST’s actual impact on society?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/the-gst-is-levied-on-the-formal-economy-how-does-informality-influence-gsts-actual-impact-on-society/

One of the most important nuances when analysing the effects of the GST is recognising how India's vast informal economy mediates the GST's impact on society. One of the main reasons why essential items, like food and footwear, are taxed at reduced rates under the GST is concern for poor households. The assumption is that poor households pay the GST on their daily purchases, so a tax relief directly benefits them.
 
But across low- and middle-income countries, a large share of everyday shopping happens outside the formal economy. Using expenditure surveys from 31 countries, researchers [Pierre Bachas, Lucie Gadenne and Anders Jensen](https://academic.oup.com/restud/article/91/5/2604/7280167?__cf_chl_f_tk=M_cLsXza4zUDt3GT8sRWW09NExfHR2Bm4jQL2WOnWY8-1783413713-1.0.1.1-.Wh5K__jmm5vuTTG9lE5diFumUXUFDWuSww9Ao6Nbhs) document a steep "informality Engel curve": as households get richer, the informal share of their budget falls: in Rwanda, the share of budget spent on informal sellers falls from about 90% for the poorest decile to 70% for the richest decile; in Mexico, it falls from about 55% to 25%.
 
The same gradient runs through India. The poorest tend to buy loose rice or atta from a handcart or a tiny unregistered kirana, where no GST is charged; better-off households buy the branded, packaged version off a supermarket shelf or a quick-commerce app, tax included. So a cut in the GST on "food" often reduces a tax the poorest were never paying in the first place—while handing the saving to those who already shop in the formal sector.
 
Bachas et al. show that in poorer countries, helping the poor by cutting GST on "necessities" (like food) is often weakly targeted because much of poor households' food consumption already happens in informal outlets—so lowering the tax rate on formal food purchases can miss the poorest households.
 
This leads to a sharper way of thinking about "targeting" in low-income settings where informality is widespread:
 
- "What people buy" can be a noisy proxy for poverty, because rich households also buy "essentials" in large rupee amounts.
- "Where people buy" (formal vs informal channels) can segment households more sharply, because richer households shift faster into modern/formal retail.
In India, this channel-vs-product point matters because the system deliberately keeps many very small sellers out of the full invoice-and-credit regime through registration thresholds. (See "Does GST help small businesses, or crush them with compliance?"). That means "the GST rate is X%" can be a misleading shortcut for what different households actually face, depending on where they shop.
 
So informality changes who really pays GST because poorer households often consume through channels where GST is less likely to be collected—so a policy that cuts GST on "essential goods" sold in the formal sector may not help the poor as much as it seems.

### What makes a tax system "good"?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/what-makes-a-tax-system-good/

A tax system is "good" if it raises the money a state needs with minimum collateral damage: it is hard to dodge, reasonably fair, and does not push people into wasteful behaviour. Most arguments about taxes are really arguments about trade-offs between these criteria.

## Taxes should be easy to administer

A tax that looks elegant but collapses under evasion is not a good tax. The income tax, so common today, was not a feasible option for most of human history. Most revenue was raised by taxing land or trade because these were easier to observe and measure. Therefore administrability is the first practical constraint on a tax system. It asks: can the state actually define the tax base, measure it in a verifiable way, and collect taxes at a reasonable cost, without the system collapsing into evasion and disputes?

## Taxes should be fair

Taxes should distribute the burden in a way citizens regard as fair. Most people have an innate sense that those with greater resources should pay more taxes. This justifies the system of progressive taxation which imposes higher tax rates on higher incomes.

But fairness is not only about helping poorer households. It is also about predictable, rule-bound treatment: similar people and firms should not face wildly different burdens because of loopholes or discretion. Redistribution, when a society wants it, still has to be done in a way that survives contact with administration.

## Taxes should distort choices as little as possible

Taxes change prices and prices guide behaviour. A bad tax nudges people to reorganise their lives around tax rules.

Two everyday examples:

- If hiring a contractor is taxed much more heavily than doing the same work in-house, firms will "bring work inside" for tax reasons. If it wasn't for taxation, firms would organize their affairs in more productive ways.
- If two near-identical products are taxed at different GST rates, firms will redesign packaging, ingredients, and labels—and then fight over classification. Real resources get burned in a contest that adds no value.

## Make it intelligible, keep compliance costs proportionate

When nobody can tell what they owe or why, the system invites resentment and opportunism. A tax can be economically "correct" and still socially harmful if it forces millions of small firms into complex filing and disputes.

Therefore, a good system is one that raises revenue reliably while keeping unfairness, distortions, and compliance burdens as low as possible.

### What was GST 2.0, and was it a step in the right direction?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/what-was-gst-2-0-and-was-it-a-step-in-the-right-direction/

For its first eight years, India's GST had too many rates: 0, 5, 12, 18, and 28%, plus cesses, which made it, in the IMF's word, an "outlier"; most countries run one to three. On 22 September 2025 the government finally simplified it. "GST 2.0," announced at the 56th GST Council meeting, scrapped the 12% and 28% slabs and folded their items into two main rates, 5% for essentials and everyday goods and 18% as the standard, with a new 40% rate kept for a handful of sin and luxury goods such as tobacco, fizzy drinks, and big cars. Around 175 items got cheaper, from cement and small cars to shampoo and packaged snacks; health and life insurance premiums were cut to zero ([PIB](https://static.pib.gov.in/WriteReadData/specificdocs/documents/2025/sep/doc202594628401.pdf)).

On its own terms, this was a genuine improvement. Fewer slabs mean fewer of the classification fights that plagued the old system (see "Why do tax reformers keep repeating 'broad base, low rate, simple rules'?"), and less conflict over whether a cream is a cosmetic or a medicine. The government also paired it with faster refunds and a fix for some inverted-duty cases, easing the credit problems critics had flagged (see "Is India's GST a real VAT?"). For consumers and for compliance, it was a step forward.

But "the right direction" depends on where you think the destination lies. To the reformers who wanted a single low rate on a broad base, GST 2.0 went only halfway, and in some respects the wrong way. It made the structure simpler without making the base wider: the big exemptions for health, education, and insurance stayed, and were even extended, so the broken credit chains they create remain (see "If something is GST-exempt, why isn't it cheaper?"). Fuel and electricity are still outside GST altogether. And by moving so many goods down to 5% and 18%, it pushed the effective tax rate lower. The government itself put the revenue cost at about ₹48,000 crore a year, betting that cheaper goods would spur enough extra spending to make up the gap. The IMF's worry is that this moves India further from the rate at which GST pays for itself, not closer (see "How has GST performed as a source of revenue?").

There is also a road not taken. The cleaner way to tax cigarettes and luxury cars is a separate excise on top of one ordinary GST rate, not a special 40% GST slab, which keeps a high rate, and its classification disputes, inside the very system the reform was trying to simplify.

So GST 2.0 was a real step, and mostly a good one: simpler, cheaper, less litigious. But it treated the symptom, too many rates, more than the disease, leaving the exemptions, exclusions, and revenue erosion that keep India's GST short of the clean, broad, single-rate tax it was meant to become.

### When you buy from another state, which government gets the tax?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/when-you-buy-from-another-state-which-government-gets-the-tax/

If you buy a car through a dealer in Punjab that was built in Tamil Nadu, two governments could tax it: Tamil Nadu, where it was made, or Punjab, where it will run. The GST gives it to Punjab, where the car is used, not where it was built. This is the "destination principle."

Why the consuming state? Because the tax is meant for the consumer, and the money should follow them home. That car will run on Punjab's roads; the tax on it should fund the government that serves the family who bought it, not the one a thousand kilometres away where the car happened to be built. Taxing at the destination keeps the link between paying a tax and being governed by the state you pay.

It also lets exports leave untaxed. A good consumed abroad bears no Indian tax, so exports are "zero-rated": the exporter charges no GST and reclaims the GST paid on its inputs, and Indian steel or software reaches world markets carrying none of India's domestic taxes. Imports are taxed on arrival, so foreign and domestic goods meet the Indian buyer on equal terms. Origin-based taxation would invert this, taxing exports while waving imports through, exactly the wrong way round for a trading economy.

The arrangement was fought over. Under the old Central Sales Tax the revenue on an inter-state sale went to the producing state, which suited manufacturing states like Maharashtra, Gujarat, and Tamil Nadu, since they taxed goods consumed elsewhere in the country. Moving to a destination basis handed that money to consuming states instead. The producer states' fear of that loss is why the Centre had to promise them years of compensation to get GST passed at all, a promise that later curdled into a bitter fight (see "Who runs GST, and why does the GST Council matter so much?").

Making this work in a federation took some plumbing. When a Punjab dealer buys the car from a Tamil Nadu factory, it pays tax on the purchase, and it will charge tax again when it sells the car to you. Within one state that nets out: what a business pays on its purchases and what it owes on its sales go to the same government, so one is set against the other and only the gap is paid over. Across a state line it does not. The Punjab dealer paid Tamil Nadu's tax but owes its own tax to Punjab, and Punjab will not cancel its tax for money that went to Tamil Nadu's treasury. Unable to recover it, the dealer folds that tax into the car's price, and you are charged tax on top of it. The car costs more than the rate implies: the old "tax on tax" returning at the border.

The Integrated GST is the fix. On an inter-state sale the Centre, not either state, levies one combined tax, which the dealer credits like any other, so nothing is taxed twice. The Centre, standing between the two states, then passes the destination state its share (see "Did GST really create 'one nation, one market'?").

### Who runs GST, and why does the GST Council matter so much?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/who-runs-gst-and-why-does-the-gst-council-matter-so-much/

GST is meant to be one tax for one national market. So why isn't it simply run by Delhi, like the income tax? Because a broad tax on all consumption was too valuable for the states to hand over, and too important to let fragment back into dozens of state systems. The way out was to run it jointly. Every rate, exemption, and threshold is set not by the Centre or the states alone but by both together, in one body: the GST Council.

The Council is written into the Constitution itself (Article 279A) and seats the Union finance minister alongside a minister from every state. Its arithmetic is deliberately balanced so neither side can override the other: the Centre holds a third of the votes, the states together two-thirds, and nothing passes without a three-fourths majority. Any big change needs the Centre and a broad coalition of states to agree.

In practice the Council barely votes at all. For its first 37 meetings it never once forced a vote. The first came only in December 2019, over the tax on lotteries, and even then the finance minister stressed how hard she had tried to avoid it ([Business Today](https://www.businesstoday.in/latest/economy-politics/story/why-gst-council-broke-its-tradition-of-taking-decisions-unanimously-240677-2019-12-19)). That habit of consensus is the Council's glue, and its constraint. It keeps the body stable, but it also means anything a single state dislikes, such as raising a rate or scrapping an exemption, moves at a crawl. The strain showed in the pandemic, when collections collapsed and the Centre and states fell out bitterly over who should borrow to cover a compensation shortfall of more than ₹2 lakh crore.

That is the bargain, and it cuts both ways. Businesses get one predictable set of rules across the country. States give up the power to set their own tax rates.

### Why are exemptions considered cancer in the VAT system?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/why-are-exemptions-considered-cancer-in-the-vat-system/

Maurice Lauré, the French tax official credited with inventing the first full value-added tax, introduced in France in 1954, described exemptions as "the cancer of the VAT system." That is because exemptions attack the one thing that makes a VAT self-policing: its paper trail.

In a VAT, the buyer wants a tax invoice to claim input tax credit, so the seller is pressured to report the sale. Invoices create third-party data for matching, and underreporting by one party is likely to show up in the other party's records. To claim credit, buyers of inputs insist on a proper tax invoice and correct reporting. To sell to the biggest formal-sector buyers, suppliers are pushed to formalise themselves.

Exemptions cut this thread. Because an exempt seller charges no GST on its output, it has no output tax to set a credit against, so it has no reason to demand a proper invoice from its suppliers either. The chain of buyers policing sellers goes slack exactly where the exemption sits, and the paper trail that makes the rest of the VAT self-enforcing breaks down. The exempt seller also cannot recover the tax on its own inputs, so that tax stays buried in its price and cascades down the chain: the hidden production tax that keeps an exempt good from being cheaper (see "If something is GST-exempt, why isn't it cheaper?").

Exemptions also raise the cost of administering the system. They require precise definitions, or there is no clarity about what qualifies. If education is exempt from VAT, what counts as education? Are play schools educational institutions? What about coaching centres, or online courses? If healthcare is exempt, does that extend to preventative care, like gyms and yoga centres? What about dentists, cosmetic surgeons, wellness centres?

Every such boundary is a potential classification dispute. If a product could plausibly be classified as exempt, businesses have a strong incentive to argue their service qualifies. Tax authorities must then litigate or audit, and compliance costs rise for both sides. Attempts to define categories precisely breed their own complexity, as when the taxation of popcorn came to depend on [whether it was "salted," "caramelized," or sold "loose vs. packaged."](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2086873&reg=48&lang=2) Lauré's metaphor holds because that is exactly how cancer spreads: a single exemption looks contained, but it multiplies the boundaries the system must defend, and the disputes those boundaries generate.

### Why are petrol, power, and property still outside GST, and why does it matter?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/why-are-petrol-power-and-property-still-outside-gst-and-why-does-it-matter/

GST was meant to be one tax on everything. Yet four of the biggest things Indians spend on never came into its fold: petrol and diesel, electricity, liquor, and real estate. They were left out deliberately to get the states to agree to GST.

When GST subsumed most state taxes in 2017, fuel and alcohol were too lucrative for the states to give up. Petroleum and alcohol together still account for about a quarter to a third of a typical state's own tax revenue ([PRS](https://prsindia.org/budgets/discussionpapers/state-of-state-finances-2023-24)). Stamp duty on property is another such lever, which is why land and finished buildings stay out too. Petrol sits in a strange limbo: the constitution already places it inside GST's reach, but at a "nil" rate that holds until the Council votes to change it, which it never has. The reason is that the top GST rate, even the new 40%, is far below the combined central-and-state tax that today makes up roughly half the fuel price at the pump. Bringing fuel in would mean swallowing that revenue loss and giving up a knob both governments love to turn: the Centre raised fuel excise sharply when oil prices crashed, and states crank up VAT whenever budgets tighten. So nobody moves.

The carve-outs were contested from the start. GST's own blueprint, the Thirteenth Finance Commission's 2009 Task Force report, wanted a single low rate on everything. It named electricity duty and stamp duty among the taxes to be folded in, called for real estate, power, and financial services to be brought inside, and proposed taxing fuel, tobacco, and liquor within GST with a separate excise on top to capture their extra social costs, not leaving them out entirely. It warned that every sector left outside breaks the credit chain and lets cascading back in.

The states had already reached the opposite conclusion. Their own founding document that year, the First Discussion Paper of the Empowered Committee of State Finance Ministers, kept alcohol out entirely ("Alcoholic beverages would be kept out of the purview of GST") and placed the main petroleum products outside as well ("the basket of petroleum products, i.e. crude, motor spirit (including ATF) and HSD would be kept outside GST as is the prevailing practice in India\[;] Sales Tax could continue to be levied by the States on these products") ([Empowered Committee, 2009](https://gstcouncil.gov.in/sites/default/files/2024-02/first_discussion_paper_on_gst.pdf)). The reason was revenue: fuel and liquor were among the states' biggest earners, and they would not pool them. That design, not the Task Force's, is the one that prevailed, and economists have pressed the same objection at every reform since.

A VAT stays clean only if the tax paid on inputs can be claimed back all the way down the chain. Electricity and diesel run nearly every factory, and cement and steel build every flat, yet the tax on all of them, sitting outside GST, can never be credited. It lodges in costs and is taxed again at the next stage: the "tax on tax" GST was built to kill (see "Why was GST seen as a landmark reform in 2017?"), smuggled back through the economy's largest inputs.

This is the heart of why critics call India's GST a VAT "in form, not in function" (see "Is India's GST a real VAT?"). The carve-outs were the price of passing GST in a federation, but they shrink the base and break the input-tax credit chain.

### Why do tax reformers keep repeating "broad base, low rate, simple rules"?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/why-do-tax-reformers-keep-repeating-broad-base-low-rate-simple-rules/

A Gujarat tax tribunal once had to rule on what a paratha is. A plain roti was taxed at 5%; a frozen paratha, the bench decided, must be heated before it can be eaten, which made it a different food—taxable at 18% ([India.com](https://www.india.com/business/parathas-different-from-rotis-to-attract-18-gst-gujarat-appellate-authority-5685385/)). Firms and the tax department argued it in earnest, because real money rode on which bread it was. That small absurdity is what "broad base, low rate, simple rules" exists to prevent, and every departure from the rule sends a bill somewhere else.
 
The moment two similar things are taxed differently, someone has to draw the line between them—and the paratha shows how blurry that line can be. A firm redesigns its product to fall on the cheaper side; the tax office disputes where it lands; both spend real effort producing nothing. The more slabs and exceptions a tax carries, the more such lines there are to police, and the more paperwork it takes to prove which side of each you sit on—a cost that falls hardest on the small firms least able to bear it.
 
Carve-outs have an unseen cost as well; a narrow base pushes up the rate on everything else. The revenue a government forgoes by exempting food, or taxing it lightly, has to be raised from whatever is left. India's own task force designing GST warned, back in 2009, that exempting broad categories like food could shrink the base so far that the standard rate would have to be "substantially higher." And once it climbs, the next industry lines up to be declared an "essential" too.
 
An exemption is not even the gift it appears to be. A seller that charges no GST on its sale still pays GST on its rent, equipment and hired services; unable to reclaim that, it buries the tax in its price (see "If something is GST-exempt, why isn't it cheaper?"). The carve-out meant to make something cheaper ends up taxing its production instead.
 
So the mantra is really a warning that has been worn smooth by repetition. A broad base keeps the rate low; a low rate dulls the urge to cheat or reclassify; simple rules leave less to fight over. Each concession of this dictum looks trivial on its own—one exemption, one softer slab—but the costs add up and the GST stops being the clean, cheap tax it was sold as.

### Why was GST seen as a landmark reform in 2017?

Source: https://liberty-lighthouse.vercel.app/topics/gst/faq/why-was-gst-seen-as-a-landmark-reform-in-2017/

GST replaced a fractured indirect tax system with one designed to be predictable, easy to comply with, and efficient. To see why that mattered, look at the system it replaced.
 
Before 2017, indirect taxes split three ways: between the Centre and the states, between goods and services, and between intra-state and inter-state trade. A supply chain could be taxed at several points, with no clean way to credit tax already paid on inputs. Earlier taxes became part of the base for later taxes. Economists call this cascading, or "tax on tax."
 
Consider a box of screws worth ₹10, taxed at 10% each time it changes hands on its way into a home appliance.
 
**Effective sales tax on a ₹10 box of screws**
 
<table>
  <thead>
    <tr>
      <th>Stage</th>
      <th>Transaction</th>
      <th>Pre-tax value</th>
      <th>Turnover tax rate</th>
      <th>Tax charged at this stage</th>
      <th>Post-tax value</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td>1</td>
      <td>Screws sold to motor maker</td>
      <td>10</td>
      <td>10%</td>
      <td>1</td>
      <td>11</td>
    </tr>
    <tr>
      <td>2</td>
      <td>Screws embedded in motor sold to appliance maker</td>
      <td>11</td>
      <td>10%</td>
      <td>1.1</td>
      <td>12.1</td>
    </tr>
    <tr>
      <td>3</td>
      <td>Appliance (with embedded screws) sold to consumer</td>
      <td>12.1</td>
      <td>10%</td>
      <td>1.21</td>
      <td>13.31</td>
    </tr>
  </tbody>
</table>
By the third sale, the effective tax on the original box is 33.1%, not 10%. The Tax Reforms Committee chaired by Raja Chelliah warned in 1993 that once taxes cascade through stages, the true burden on a final product becomes "almost fortuitous and largely unknown to policy makers."
 
Cascading taxes cost the economy more than money changing hands. They distort decisions. A firm facing ₹13.31 in tax-inflated cost for metal screws might switch to plastic inserts priced at ₹12, even though the metal screw performs better. The tax system, not the market, made that call.
 
A subtler distortion ran deeper. A firm often couldn't reclaim tax paid on a part bought from another company, so buying from a specialist carried a tax burden that making the part in-house avoided. India's own 1994 blueprint for a VAT warned that a tax on inputs without full credit "induces vertical integration" and creates a "disincentive for specialisation in production." Firms did more in-house, badly, instead of buying from whoever did it best. Multiply that across the economy and countless goods end up costlier or worse than they should be, a loss that never shows up on any ledger.
 
Exporters bore a related cost. Embedded input taxes stay embedded unless the state rebates them accurately and fast. Chelliah's committee found that under a cascading system, calculating the right refund was "almost impossible," turning delays and disputes into a built-in tax on exports.
 
GST was hailed as a landmark because it replaced this hidden, compounding tax with full input credit: producers get refunded the tax they pay on their own purchases. That is the defining feature of a Value-Added Tax, of which India's GST is one (see "How does GST work?"). Refund the input tax and the cascade disappears, along with the distortions it caused. The promise, though, always carried a condition: the invoice-and-credit chain has to work in practice.

## Syllabus

## Books

1. James Mirrlees et al. (eds.), Tax by Design: The Mirrlees Review (2011) — Institute for Fiscal Studies. Relevant chapters: ch. 2, "The Ingredients of Tax Design," and ch. 6, "Taxing Goods and Services"

## Academic Papers

1. [Targeting, Cascading, and Indirect Tax Design](https://www.imf.org/external/pubs/ft/wp/2013/wp1357.pdf) — Michael Keen, IMF Working Paper 13/57, 2013
2. [The Redistributive Power of Cash Transfers vs VAT Exemptions: A Multi-Country Study](https://www.taxdev.org/sites/default/files/2021-12/Redistributive_Power_Cash_Transfers_vs_VAT_Exemptions.pdf) — Ross Warwick et al., World Development, 2021
3. [Informality, Consumption Taxes and Redistribution](https://www.nber.org/system/files/working_papers/w27429/w27429.pdf) — Pierre Bachas, Lucie Gadenne and Anders Jensen, NBER Working Paper 27429, 2020
4. [Input Tax Credit and Refunds under GST in India: Conceptual and Legal Framework](https://papers.xkdr.org/papers/2025Modi_GST.pdf) — Arbind Modi, XKDR Forum Working Paper 44, 2025

## Reports

1. Chelliah committee-era excise reform report, ch. 4, "Structural Reform of the Excise Tax System"
2. First Discussion Paper on GST in India (2009) — Empowered Committee of State Finance Ministers
3. Task Force on GST — Thirteenth Finance Commission, 2009. Relevant chapters: ch. 2 and ch. 6

## Articles & Blog Posts

1. [Cholesterol in the Indian GST](https://blog.theleapjournal.org/2026/01/cholesterol-in-indian-gst.html) — Arbind Modi and Ajay Shah, The LEAP Blog, 2026
2. [GST Without a Seamless Input Tax Credit System Fails Its Core Principles](https://www.business-standard.com/opinion/columns/gst-without-a-seamless-input-tax-credit-system-fails-its-core-principles-125092800733_1.html) ("To GST or Not to GST") — Vijay Kelkar, Arbind Modi and Ajay Shah, Business Standard, 2025
3. [Steps Towards the Perfect GST](https://www.mayin.org/ajayshah/MEDIA/2025/to_perfect_gst.html) — Vijay Kelkar, Arbind Modi and Ajay Shah, Business Standard, 2025

## Podcasts & Videos

1. [Episode 121: How to Fix Our GST](https://www.youtube.com/watch?v=dEN83za0tqw) — Everything Is Everything, with Amit Varma and Ajay Shah, 17 October 2025

# Labour and manufacturing

Source: https://liberty-lighthouse.vercel.app/topics/labor/

Understanding the bottlenecks to manufacturing and labour productivity growth in India

## FAQs

### How do India's manufacturing prospects compare with those of competing manufacturing economies?

Source: https://liberty-lighthouse.vercel.app/topics/labor/faq/how-do-indias-manufacturing-prospects-compare-with-those-of-competing-manufacturing-economies/

India’s biggest advantage in attracting global manufacturing is competitive wages.  India's [average](https://india2west.com/india-vs-china-in-manufacturing-which-country-is-right-for-your-product-in-2025/) monthly wage in manufacturing is $240, compared with $750 in China. However, when 56 firms [shifted](https://www.theindustryoutlook.com/manufacturing/panorama/can-india-be-the-alternative-for-companies-moving-out-of-china-nwid-1523.html) production out of China between 2018 and 2019, only three chose India. Twenty-six chose Vietnam, which has a population one-fourteenth the size of India's, a far smaller domestic market, and no obvious advantage in infrastructure or geography. What Vietnam [has](https://prosperiti.substack.com/p/50-viet-nam-adapts-india-caps) is a regulatory environment in which a firm can hire workers, set shift schedules, and expand production without triggering a cascade of compliance obligations at every step. 

The true cost of employing a worker is the wage plus the cost of every regulation that worker's presence activates. India's working hour rules, overtime caps, and mandatory premium all add to this cost, and on each dimension, India sits well outside the range of [competing](https://prosperiti.substack.com/p/43-labour-flexibility-for-the-win) economies. Countries that have successfully absorbed labour-intensive manufacturing, like Vietnam, Malaysia, and Bangladesh, allow longer working days, more overtime hours per quarter, and lower mandatory premiums than India does. The cumulative effect of sitting at the restrictive end on hours, overtime caps, and premiums simultaneously is a regulatory cost of employment that no wage advantage can fully offset.



The Factories Act mandates a minimum of 3.38 square metres of floor space per worker, the highest standard found among comparable economies, and requires factories to reserve additional space for canteens, creches, ambulance rooms, and lunch rooms, with each requirement kicking in at a different workforce threshold. A 250-worker factory that hires one additional worker [must ](https://prosperiti.substack.com/p/no-room-to-grow)immediately construct a canteen, a dining hall, and additional sanitation facilities. In a factory in Ambad, Maharashtra, the single hire costs Rs 4.46 lakh in compliance. The rational response is to split rather than grow. Two 150-worker factories require 37% less floor space than one 300-worker factory. The OSH Code, 2020, which came into effect on  25th November 2025, does not solve this problem.

### How do labour regulations affect women's access to manufacturing jobs?

Source: https://liberty-lighthouse.vercel.app/topics/labor/faq/how-do-labour-regulations-affect-womens-access-to-manufacturing-jobs/

Manufacturing jobs [pay](https://www.ilo.org/sites/default/files/wcmsp5/groups/public/@asia/@ro-bangkok/@sro-new_delhi/documents/publication/wcms_638305.pdf) roughly 50% more than agricultural jobs on average. Since women in India are disproportionately concentrated in agriculture, a pathway into manufacturing is also a pathway to meaningfully higher incomes. Whether that pathway is open depends significantly on how labour law treats women.

Across Indian states, women are legally [barred ](https://prosperiti.substack.com/p/dangerous-paternalism)from working in 31 industries on the grounds that these jobs pose risks to their health or safety. The industries range from petroleum refining, which might plausibly carry such risks, to bangle production, where the case for exclusion is harder to make. The consequence in both cases is the same: women are excluded from better-paying manufacturing work and remain in lower-paying agricultural employment. The World Bank's Women, Business and the Law 2026 [report ](https://openknowledge.worldbank.org/bitstreams/4407cff6-6c6b-44cf-b89b-d1260f1a0700/download)ranked India 120th out of 190 countries on legal discrimination against women in the workplace, reflecting how extensively Indian law restricts rather than enables women's economic participation.

Night shift restrictions illustrate the paternalistic approach of India’s approach. Most Indian states restrict or prohibit women from working in factories at night, with the stated aim of protecting their safety. The comparison between Haryana and Punjab shows the cost of this. Haryana extended the right to employ women in night shifts across IT, hotel, and export-oriented establishments in 2003. Punjab did not follow until 2014. Haryana also allows a single woman to work a night shift; in Punjab, at least 5 women must be present before a night shift can operate. In 1980, Haryana's per-capita income was 6% below Punjab's. By 2001, the two had converged. By 2022, Haryana's per-capita income was 49% higher. No single policy explains a divergence of that magnitude, but early access to female night-shift employment gave industries in Haryana a head start whose effects compounded over two decades.

Some states do grant exemptions to the night-shift restriction, but they are awarded at discretion and typically come with costly conditions. Firms that want to employ women at night often have to provide transport, on-site security arrangements, female supervisors, and other services. These conditions may seem reasonable in isolation. However, these conditions increase costs, and only large, profitable firms can afford to meet them. Smaller establishments with more entry-level work remain excluded. The regulation's visible effect is to protect women in the workplace. Its less visible effect is to increase the costs of hiring women to the point where no entrepreneur would be willing to do so.

### How do working hour regulations limit what a factory worker can actually earn?

Source: https://liberty-lighthouse.vercel.app/topics/labor/faq/how-do-working-hour-regulations-limit-what-a-factory-worker-can-actually-earn/

A factory worker's earnings depend not only on the wage rate but also on the number of hours worked. India's Factories Act 1948 [constrains](https://www.indiacode.nic.in/bitstream/123456789/15097/1/factory_acta1948-63.pdf) both how many hours a worker may work and how those hours may be arranged across the day, the week, and the quarter. The combined effect is that workers who want to work more and employers who are willing to pay them are frequently [prevented](https://prosperiti.substack.com/p/lower-the-bar-increase-the-earnings) from doing so by rules that were not designed with workers' incomes in mind.

India’s rules set hard daily and weekly caps on regular working hours. Unlike many economies, India does not permit averaging across weeks or months. A worker cannot work longer during a busy production cycle and shorter during a slow one; each week is evaluated independently. This rigidity [matters](https://prosperiti.substack.com/p/42-week-ideas) because manufacturing earnings are rarely smooth: demand is seasonal, orders are uneven, and workers in many other countries can work through a peak period and earn significantly more as a result. Indian workers cannot, because every week resets to the same ceiling, regardless of what the worker needs or what the employer can offer.

Workers' hours are limited by conflicting legal limits. A worker may work up to nine regular hours a day, which over a six-day week amounts to fifty-four hours. A separate provision caps regular weekly hours at forty-eight. This difference means a worker who works for the full hour limit permitted every day of a six-day week has [done](https://prosperiti.substack.com/p/lower-the-bar-increase-the-earnings) 6 hours of overtime. Since the Act requires employers to pay overtime at twice the regular wage, most find it cheaper to hire an additional worker than to pay the premium, and the existing worker loses those hours entirely. At [average ](https://prosperiti.substack.com/p/lower-the-bar-increase-the-earnings)hourly wage rates, this costs a worker roughly Rs 19,448 a year.

Even where an employer is willing to pay, a ten-and-a-half-hour daily spread-over and a quarterly overtime cap impose a further ceiling. Most states cap quarterly overtime at between seventy-five and one hundred and fifteen hours, while the spread-over alone would theoretically permit around one hundred and forty-four. The worker cannot reach even the limit that the law appears to set.

At twice the regular wage, India's mandatory premium is among the highest in the world. The ILO recommends a premium of 1.25 times the regular rate, while countries such as Germany and Sweden mandate no premium at all, leaving rates to negotiation. The practical [consequence](https://prosperiti.substack.com/p/double-or-nothing) is that employers facing doubled labour costs often find it more rational to halt production entirely than to pay overtime, meaning workers lose even the regular wage, let alone the premium the law promises. Analysis suggests that reducing India's premium to the ILO-recommended rate of 1.25 times the regular wage could allow workers to earn substantially more, because employers would find overtime economically viable to offer rather than systematically avoid.

Karnataka's amendment to its Factories Act in 2023 illustrates both what reform can achieve and how demanding it is to achieve it. The state simultaneously extended the spread-over to twelve hours, shifted the mandatory rest break to after six hours of continuous work, and raised the quarterly overtime cap. Amending any one of these provisions without the others produces little practical improvement, because the binding constraint simply shifts to the next rule in the chain. That no other Indian state has replicated Karnataka's approach suggests that the political economy of labour law reform, rather than ignorance of the problem, remains the deeper obstacle.

### How is India's labour regulatory framework structured?

Source: https://liberty-lighthouse.vercel.app/topics/labor/faq/how-is-indias-labour-regulatory-framework-structured/

India's labour regulatory framework [comprises ](https://cdn-static.teamleaseregtech.com/static/pdf/White_Paper_Labour_Day.pdf)1,536 laws, 69,233 compliance requirements, and 6,632 filings at the Union and state levels. Labour-related statutes alone account for 30% of all firm regulation and 47% of all compliance requirements that businesses face. Manish Sabharwal, one of India's most prominent voices on employment policy, has called this accumulation "regulatory cholesterol"—rules, filings, and compliance requirements that have accumulated over decades and now raise the cost of employing people well beyond what any individual regulation would suggest.

A small manufacturer in Ludhiana or Coimbatore employing a few hundred workers does not face one regulatory system. They face Union government laws, state government laws, and the interaction between the two — often inconsistent, sometimes contradictory, and always requiring separate compliance procedures. The four Labour Codes passed between 2019 and 2020 were designed to consolidate this into a simpler framework. As of 2024, they remain unimplemented because states have not enacted the rules necessary to bring them into force.

The age of the laws compounds the complexity. The Factories Act was passed in 1948. The Industrial Disputes Act, 1947. The Minimum Wages Act,1948. The Apprentices Act, 1961. These laws were written for an economy of large textile mills and public sector enterprises, in which the typical employer was a visible, stable institution that a labour inspector could visit and assess. The Indian economy of 2025 includes gig workers, platform companies, contract manufacturers integrated into global supply chains, and a services sector that did not exist when these laws were drafted. The laws have been amended repeatedly, but their basic architecture — which workers they cover, which thresholds trigger which requirements, which violations attract criminal penalties — reflects the assumptions of a different era.

Criminal penalties deserve particular attention. Violations of provisions governing font sizes on wage slips, the placement of spittoons, and the materials used on latrine floors can attract criminal prosecution under the Factories Act. This does not protect workers; it creates a system in which the threat of prosecution becomes a tool that labour inspectors can deploy selectively. When compliance is technically impossible for most firms because requirements are contradictory or the cost of full compliance exceeds what a firm can bear, the inspector's discretion over when to enforce becomes the operative reality. Firms respond by treating inspectors as a cost to be managed rather than an authority to be respected. That cost falls hardest on smaller firms without the legal resources to navigate compliance. Larger firms absorb it; smaller firms are either deterred from growing or pushed toward informality, where inspectors have less reach.

The result is a system that is simultaneously over-regulated and under-protective. Workers in the formal sector face a dense web of rules, many of which generate paperwork without improving conditions. The majority of workers who sit entirely outside the formal sector face none of it. The regulatory cholesterol does not simply raise costs. It determines who is inside the system and who is not, in ways that systematically exclude the workers with the least bargaining power and the most to gain from genuine protection.

### What does India’s manufacturing sector actually look like?

Source: https://liberty-lighthouse.vercel.app/topics/labor/faq/what-does-indias-manufacturing-sector-actually-look-like/

India's manufacturing sector [employs](https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=1814547&reg=3&lang=2) over 6 crore (60 million) workers and [accounts](https://www.dataforindia.com/measuring-manufacturing/#lf-ftntref8) for around 11% of India’s workforce, yet [generates](https://data.worldbank.org/indicator/NV.IND.MANF.ZS?locations=IN) 13% of India’s GDP. That gap between workforce share and output share suggests that manufacturing is unusually productive. The comparison, however, is misleading. India’s workforce remains heavily concentrated in agriculture, which [employs ](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2158030&reg=3&lang=2)about 46% of workers but generates a much smaller share of output (17%). Any sector that draws workers out of agriculture will therefore appear more productive by comparison. Services, on the other hand, [employs](https://niti.gov.in/sites/default/files/2025-10/Indias_Services_Sector_Insights_from_Employment_Trends_State_level_Dynamics.pdf) 30% of the workforce and [generates](https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2098048&reg=3&lang=2) over 55% of GDP. In reality, India's manufacturing sector runs on small firms, limited productivity, and informal jobs. 

India’s manufacturing firms are extremely small. Only 5% of Indian factories [employ ](https://icrier.org/pdf/Working_Paper_409.pdf)more than ten workers. Even among registered factories, that is, those above the threshold for coverage under the Factories Act, four out of five have [fewer ](https://www.dataforindia.com/factories/)than 100 employees. Countries that [industrialised ](https://academic.oup.com/book/10201/chapter-abstract/272997002?redirectedFrom=fulltext&login=false)successfully, such as South Korea, Germany, and China, built their manufacturing bases on medium- and large-sized firms employing hundreds or thousands of workers. In India, this tier is conspicuously thin, a pattern economists call the “[missing middle](https://www.indiabudget.gov.in/economicsurvey/doc/echapter.pdf).” 

Small factories [have](https://www.oecd.org/en/publications/oecd-compendium-of-productivity-indicators-2025_b024d9e1-en/full-report/productivity-in-smes-and-large-firms_968cffa9.html) limited scope to exploit economies of scale and, on average, exhibit lower productivity than larger ones. Small firms [account ](https://microdata.gov.in/NADA/index.php/catalog/ASI/?page=1&sort_order=desc&ps=15&repo=ASI)for 67% of operational factories but only 10% of total output. The largest firms, employing 5,000 or more workers, account for less than 0.5% of all factories and produce 19% of total output. Workers [concentrated](https://ncaer.org/wp-content/uploads/2023/07/Paper-III-AchyutaAdhvaryu.pdf) in small firms operate with very little machinery and capital, which keeps their output low and their wages lower still.

Factories increasingly opt for informal or contract workers instead of hiring regular staff. The share of contract workers [rose](https://ceda.ashoka.edu.in/the-contractualisation-of-workforce-in-indias-factories-continues/) from 23% to 40% between 2001 and 2022. These contract workers often perform the same tasks as permanent workers but are employed on different terms. They typically receive lower wages, have less job security, and may not receive the same social security benefits. Beyond contract labour, a large [share ](https://cepr.org/voxeu/columns/informal-tradables-and-employment-growth-indian-manufacturing)of manufacturing employment remains outside formal arrangements altogether.

Manufacturing in India is dominated by small, low-productivity firms that rely on limited capital and informal labour. The large manufacturing units that tend to make headlines are aberrations and not the norm.

### What drives firms to prefer contract workers over permanent employees, and who bears the cost?

Source: https://liberty-lighthouse.vercel.app/topics/labor/faq/what-drives-firms-to-prefer-contract-workers-over-permanent-employees-and-who-bears-the-cost/

Indian manufacturing firms employ two broad categories of workers: permanent employees, who have ongoing contracts and full legal protections, and contract workers, who are hired through third-party labour contractors for fixed-term or specific-task assignments. The share of contract workers in India's organised manufacturing sector has [risen](https://ceda.ashoka.edu.in/the-contractualisation-of-workforce-in-indias-factories-continues/) steadily, from around 16% in the early 1990s to over 40% by the 2020s in many industries, and higher still in sectors like chemicals, metals, and textiles. Understanding why requires looking at what permanent employment actually costs a firm under Indian law.

One reason for the high cost of permanent employees is the[ Industrial Relations Code, 2020](https://www.indiacode.nic.in/bitstream/123456789/22040/1/aa202035.pdf), which went into effect on the 25th of November 2025. Under it, firms employing 300 or more workers cannot retrench employees, close a plant, or declare workers redundant without prior permission from the state government. That permission is slow to obtain and uncertain in outcome. A permanent worker who turns out to be unproductive or whose role becomes obsolete cannot easily be reassigned to different tasks without government permission. This provision [effectively](https://the1991project.com/sites/default/files/2024-09/4999_Rajagopalan_Shah_India_Labor_Edition_MR_v1-compressed.pdf) makes workforce flexibility illegal for large, organised firms.

Government data [show ](https://labourbureau.gov.in/uploads/pdf/Industrial-Disputes-Act,-1947-Report_2019.pdf)that between 2012 and 2021, firms retrenched around 8,000 workers. This is an average of 800 workers being retrenched every year. This figure is improbable in a country where crores of workers exist in manufacturing jobs. Whether that figure reflects the process being inaccessible, firms routing around it through contract labour, retrenchments occurring informally and going unrecorded, or simply poor data collection is difficult to establish with certainty. What is clear is that formal retrenchment has ceased to function as a routine mechanism of workforce adjustment.



Contract workers fall outside most of these provisions. The firm's legal relationship is with the labour contractor, not with the worker, which insulates the firm from retrenchment requirements and the Industrial Disputes Act's restrictions on reassignment and closure. The cost of permanent employment pushes [firms](http://robinburgess.com/s/Besley_Burgess_2003_Can-Labor-Regulation-Hinder-Economic-Performance-Evidence-from-India.pdf) toward contractualisation or informality. The protections available to permanent workers raise the price of permanent employment high enough that firms systematically substitute away from it, so the workers the regulation was meant to protect end up outside its reach

### Why do laws designed to protect workers end up restricting them instead?

Source: https://liberty-lighthouse.vercel.app/topics/labor/faq/why-do-laws-designed-to-protect-workers-end-up-restricting-them-instead/

The legislators who drafted India's labour laws were not indifferent to workers' welfare. The overtime premium was meant to ensure workers were compensated fairly for extra effort. The night shift restrictions were meant to protect women from unsafe conditions. The facility mandates were meant to guarantee dignified working conditions. The intentions behind these laws are not difficult to understand or sympathise with. What is harder to see, at the moment of writing a law, is what the law will actually produce once it meets the complexity of a real economy.

Consider what a single rule governing overtime premiums must do. It must work for a capital-intensive automobile plant in Pune, a small garment workshop in Tiruppur, a seafood processing unit in Kerala whose demand surges seasonally, and a machine tools firm in Ludhiana competing with Chinese exporters on price. These firms have different cost structures, different margins, and different seasonal rhythms. Their workers have different preferences about how many hours they want to work and at what rate. No single premium can reflect all of this. India's Factories Act sets it at twice the regular wage. That figure may be reasonable for some of these firms. For others, it prices overtime out of reach entirely.

The disparate impact of legislation is a well-known challenge. The information required to design a rule that produces good outcomes is dispersed across millions of individuals. No single authority can assemble it. A factory owner in Tiruppur knows her cost structure, her workers' preferences, and the seasonal pressures of her export orders. No legislature can replicate that knowledge. Her workers know what combination of wages, hours, and conditions works for their households. Neither she nor any legislature fully knows what they know. When law substitutes a uniform mandate for this process of negotiation, it eliminates the mechanism that would otherwise draw on all this dispersed knowledge. It replaces a process that adapts to local circumstances with a rule that fits no one's situation precisely and many situations badly.

This is not an argument that workers and employers always bargain on equal terms. Bargaining power is real, and workers in labour markets with few employers face genuine asymmetries. The question is whether uniform mandates address that asymmetry or create problems as serious as the ones they solve. When formal employment becomes expensive enough, firms do not simply absorb the cost. They hire informally, use contract workers, or decide not to expand at all. The protections the law intended to provide end up creating outcomes none of the framers intended. India's informal manufacturing employment rate is over 75% and reflects that process playing out over decades.

What the current system produces, then, is not protection. It is a sorting mechanism. Workers in formal permanent employment enjoy real protections. Workers outside it — the majority — have none. The regulations that created this gap were designed to protect the second group. They have instead protected the first, at the second group's expense.

### Why does so much manufacturing employment sit outside formal arrangements, and what does that mean for workers?

Source: https://liberty-lighthouse.vercel.app/topics/labor/faq/why-does-so-much-manufacturing-employment-sit-outside-formal-arrangements-and-what-does-that-mean/

A formal manufacturing job comes with a defined set of protections. The worker has a written contract, which establishes wages, working conditions, and the terms under which employment can end. The employer contributes to the Employees' Provident Fund, building a retirement corpus that the worker cannot easily access until they leave employment. The worker is covered under the Employees' State Insurance Act, which provides medical care, paid sick leave, and maternity benefits. Dismissal requires notice and severance under the Industrial Disputes Act. These protections are not merely legal formalities. For a worker without savings, they represent the difference between a medical emergency being manageable and being catastrophic.

Informal employment provides none of this. The worker has no written contract, no provident fund, no insurance coverage, and no legal remedy against dismissal without cause. Since informal workers cannot document their income, they also struggle to access formal credit, paying higher interest rates to informal moneylenders when they need to borrow. And because informal employment is not captured in official data, these workers have no statistical visibility, making it harder for them to organise or for policymakers to account for their interests.

The scale of informal manufacturing employment in India makes this more than an individual hardship. Between 70 and 80% of manufacturing workers are informally employed. The formal sector's social security architecture, built around ESIC and EPFO, therefore reaches only a minority of the people it was designed to protect. The ILO's India Employment Report 2024 noted that youth employment, in particular, is concentrated in informal arrangements with low pay and poor conditions, not because young workers prefer this, but because the formal sector is not generating jobs at the required rate.

There is a deeper irony here. The regulations that make formal employment expensive for firms are, in intent, designed to protect workers. In practice, they price formal employment out of reach for most workers, pushing the majority into arrangements where no protection applies. The question is not whether workers deserve protection. It is whether the current system delivers it to the workers who need it most.

### Why has India's rapid economic growth not translated into more or better manufacturing jobs?

Source: https://liberty-lighthouse.vercel.app/topics/labor/faq/why-has-indias-rapid-economic-growth-not-translated-into-more-or-better-manufacturing-jobs/

The economic transformations of East Asia offer the most instructive point of comparison.[ South Korea](https://www.nber.org/system/files/chapters/c7859/c7859.pdf), [Taiwan](https://documents1.worldbank.org/curated/en/389881468914960627/pdf/A-rural-non-farm-sector-in-Taiwan.pdf), [China](https://www.sciencedirect.com/science/article/abs/pii/S1043951X11000587), and, more recently, [Vietnam](https://hal.science/hal-04010729/) each used manufacturing to move large numbers of workers out of low-productivity agriculture and into better-paying factory jobs. That [transition](https://www.nber.org/system/files/chapters/c7859/c7859.pdf) drove rapid income growth, reduced poverty, and built a skilled industrial workforce within a generation. India [liberalised ](https://www.southasia.ox.ac.uk/sites/default/files/southasia/documents/media/robinson_a_dissertation.pdf)its economy in 1991 under conditions that appeared similarly favourable: a large surplus of agricultural labour, wages well below those in developed economies, and stated ambitions for industrial expansion. 

India did not experience manufacturing growth comparable to that of the East Asian tigers. India has grown at roughly 7% annually since liberalisation, which is a genuine achievement, but manufacturing's share of GDP [fell](https://data.worldbank.org/indicator/NV.IND.MANF.ZS?locations=IN) from 16% to 13%. More strikingly, the [majority](https://cepr.org/voxeu/columns/informal-tradables-and-employment-growth-indian-manufacturing) of jobs created after 1991 were informal: outside the organised sector, without stable contracts or social protection. India achieved growth, but not the large-scale shift from low-productivity agricultural work to higher-productivity formal employment that defined the East Asian experience. 

One reason for India’s limited success in shifting large sections of society into manufacturing was its focus on services. Services expanded faster than manufacturing. The share of GDP from services [rose](https://data.worldbank.org/indicator/NV.SRV.TOTL.ZS?locations=IN) from 34% to 55% between 1991 and 2025. However, service firms employ far fewer workers per unit of [investment ](https://www.sciencedirect.com/science/article/pii/S2444883421000401)than factories do at comparable stages of development. A mid-sized software firm can generate substantial revenue with a few hundred employees, while a garment factory or electronics assembly plant deploying similar capital can absorb tens of thousands. The services route raised incomes for a relatively narrow slice of the workforce, those with the education to enter it. 

For the workers excluded from the service economy, manufacturing was the natural alternative. Indian manufacturing wages are considerably lower than those in China. India's [average](https://india2west.com/india-vs-china-in-manufacturing-which-country-is-right-for-your-product-in-2025/) monthly wage in manufacturing is $240, compared with $750 in China. This gap in labour costs should, in principle, make India highly competitive for labour-intensive production. However, when 56 firms [shifted](https://www.theindustryoutlook.com/manufacturing/panorama/can-india-be-the-alternative-for-companies-moving-out-of-china-nwid-1523.html) production out of China between 2018 and 2019, only three chose India. Twenty-six firms chose Vietnam. That disparity cannot be explained by wages alone. It points instead to the total cost of doing business after accounting for regulation, infrastructure, and, most consequentially for the argument that follows, the structure of labour law.

## Videos

### How Good Intentions Can Reduce Jobs for Women

Source: https://liberty-lighthouse.vercel.app/topics/labor/videos/how-good-intentions-can-reduce-jobs-for-women/

Many labour laws are designed to protect women, but they can also make hiring them more expensive. This short explores how well-intentioned regulations can unintentionally reduce women's access to better-paying jobs.

### India's Missed Manufacturing Boom

Source: https://liberty-lighthouse.vercel.app/topics/labor/videos/indias-missed-manufacturing-boom/

India had millions of workers, low wages, and economic reforms. So why didn't it become the world's manufacturing powerhouse? This short explores one of the key reasons India missed a historic opportunity.

### Why Indian Factories Stopped Hiring Permanent Workers 

Source: https://liberty-lighthouse.vercel.app/topics/labor/videos/why-indian-factories-stopped-hiring-permanent-workers/

Just 8,000 layoffs in ten years across crores of jobs isn't a healthy labour market, it's a frozen one. This short explores how job security laws pushed firms toward contract labour, leaving over 40% of factory workers without protection.

## Syllabus

## Academic Papers

1. [Can Labor Regulation Hinder Economic Performance? Evidence from India](http://robinburgess.com/s/Besley_Burgess_2003_Can-Labor-Regulation-Hinder-Economic-Performance-Evidence-from-India.pdf) (2003) — Timothy Besley and Robin Burgess
2. [NCAER Paper III](https://ncaer.org/wp-content/uploads/2023/07/Paper-III-AchyutaAdhvaryu.pdf) — Achyuta Adhvaryu, on productivity and capital in small Indian firms
3. [The Contractualisation of Workforce in India's Factories Continues](https://ceda.ashoka.edu.in/the-contractualisation-of-workforce-in-indias-factories-continues/) — CEDA, Ashoka University
4. [Informal, Tradables, and Employment Growth in Indian Manufacturing](https://cepr.org/voxeu/columns/informal-tradables-and-employment-growth-indian-manufacturing) — CEPR VoxEU
5. [India Labor Edition](https://the1991project.com/sites/default/files/2024-09/4999_Rajagopalan_Shah_India_Labor_Edition_MR_v1-compressed.pdf) — Shruti Rajagopalan and Shobana Shah, The 1991 Project
6. [Chapter on East Asian industrialisation](https://academic.oup.com/book/10201/chapter-abstract/272997002?redirectedFrom=fulltext&login=false) — Oxford Academic
7. [NBER chapter on South Korea's economic transformation](https://www.nber.org/system/files/chapters/c7859/c7859.pdf)
8. [A Rural Non-Farm Sector in Taiwan](https://documents1.worldbank.org/curated/en/389881468914960627/pdf/A-rural-non-farm-sector-in-Taiwan.pdf) — World Bank
9. [Paper on China's manufacturing-led industrialisation](https://www.sciencedirect.com/science/article/abs/pii/S1043951X11000587) — ScienceDirect
10. [Paper on Vietnam's manufacturing transition](https://hal.science/hal-04010729/) — HAL Science

## Legal Statutes & Codes

1. Factories Act, [1948](https://www.indiacode.nic.in/bitstream/123456789/15097/1/factory_acta1948-63.pdf)
2. Industrial Disputes Act, 1947
3. Minimum Wages Act, 1948
4. Apprentices Act, 1961
5. Industrial Relations Code, [2020](https://www.indiacode.nic.in/bitstream/123456789/22040/1/aa202035.pdf)
6. Occupational Safety, Health and Working Conditions Code, 2020

## Reports

1. Economic Survey, [chapter on India's "missing middle"](https://www.indiabudget.gov.in/economicsurvey/doc/echapter.pdf)
2. [OECD Compendium of Productivity Indicators 2025: Productivity in SMEs and Large Firms](https://www.oecd.org/en/publications/oecd-compendium-of-productivity-indicators-2025_b024d9e1-en/full-report/productivity-in-smes-and-large-firms_968cffa9.html)
3. [White Paper on India's labour compliance burden](https://cdn-static.teamleaseregtech.com/static/pdf/White_Paper_Labour_Day.pdf) — TeamLease RegTech
4. [India's Services Sector: Insights from Employment Trends and State-Level Dynamics](https://niti.gov.in/sites/default/files/2025-10/Indias_Services_Sector_Insights_from_Employment_Trends_State_level_Dynamics.pdf) — NITI Aayog
5. [Industrial Disputes Act, 1947, Report 2019](https://labourbureau.gov.in/uploads/pdf/Industrial-Disputes-Act,-1947-Report_2019.pdf) — Labour Bureau
6. [Report on manufacturing wages relative to other sectors in Asia](https://www.ilo.org/sites/default/files/wcmsp5/groups/public/@asia/@ro-bangkok/@sro-new_delhi/documents/publication/wcms_638305.pdf) — ILO
7. [Women, Business and the Law 2026](https://openknowledge.worldbank.org/bitstreams/4407cff6-6c6b-44cf-b89b-d1260f1a0700/download) — World Bank

## Articles & Blog Posts

1. [Measuring Manufacturing](https://www.dataforindia.com/measuring-manufacturing/#lf-ftntref8) — Data for India
2. [Factories](https://www.dataforindia.com/factories/) — Data for India
3. [India vs China in Manufacturing: Which Country Is Right for Your Product?](https://india2west.com/india-vs-china-in-manufacturing-which-country-is-right-for-your-product-in-2025/) — India2West
4. [Can India Be the Alternative for Companies Moving Out of China?](https://www.theindustryoutlook.com/manufacturing/panorama/can-india-be-the-alternative-for-companies-moving-out-of-china-nwid-1523.html) — The Industry Outlook
5. [Viet Nam Adapts, India Caps](https://prosperiti.substack.com/p/50-viet-nam-adapts-india-caps) — Prosperiti
6. [Labour Flexibility for the Win](https://prosperiti.substack.com/p/43-labour-flexibility-for-the-win) — Prosperiti
7. [No Room to Grow](https://prosperiti.substack.com/p/no-room-to-grow) — Prosperiti
8. [Lower the Bar, Increase the Earnings](https://prosperiti.substack.com/p/lower-the-bar-increase-the-earnings) — Prosperiti
9. [42: Week Ideas](https://prosperiti.substack.com/p/42-week-ideas) — Prosperiti
10. [Double or Nothing](https://prosperiti.substack.com/p/double-or-nothing) — Prosperiti
11. [Dangerous Paternalism](https://prosperiti.substack.com/p/dangerous-paternalism) — Prosperiti

# Small entrepreneurs

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/

Explore the laws that govern the freedom to earn a living in India, from street vendors and domestic workers to small businesses and self-employed professionals.

## FAQs

### Alcohol, tobacco, gambling, sex work: when a trade is thought immoral, can the state declare it is not really a trade at all?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/alcohol-tobacco-gambling-sex-work-when-a-trade-is-thought-immoral-can-the-state-declare-it-is-not/

The Constitution lets the state regulate harmful trades. The sharper question is whether the state can dodge that scrutiny altogether by declaring that a disliked trade is not a trade at all.

Start with what is settled. Article 19(1)(g) protects the freedom to carry on any trade or business, and Article 19(6) lets the state impose reasonable restrictions in the public interest. So the government may regulate alcohol, tobacco, gambling, or any unsafe or exploitative trade through licences, age limits, warnings, quality rules, advertising curbs, taxes, and location controls. In a serious enough case, a reasonable restriction can even mean a full ban. The condition is that the state must justify itself. It must show real harm, and show that the restriction answers that harm. The burden sits with the state, because the state is the one using force.

The trouble starts when the government says something bolder: this is not really a trade at all. Indian courts have sometimes agreed, through a doctrine called *res extra commercium*, meaning "outside commerce." Gambling and the liquor trade have both been pushed outside the ordinary protection of Article 19(1)(g) this way. Once an activity is placed outside, the state no longer has to justify its restrictions in the usual manner. There is, it says, no protected freedom here to begin with.

This is a quiet but serious move. A business does not stop being a business because people dislike it. Liquor, tobacco, and gambling may be harmful and may deserve strict rules or even prohibition in places. But they still run on labour, capital, contracts, shops, workers, licences, customers, and tax. Calling them "not commerce" changes none of that. It only switches off the scrutiny that would otherwise apply.

The state's underlying worry is fair. Alcohol wrecks families. Gambling breeds debt and addiction. Tobacco loads the public with health costs. A constitution should not tie the state's hands against real harm. But the honest path is to name the harm, prove it, and defend the rule, not to retreat behind the language of sin. Once "immorality" is enough to strip protection, the door opens: moral words can shield powerful incumbents, target disliked groups, or press one section's tastes on everyone.

So the better line is simple. The state may regulate, tax, license, restrict, or even ban a harmful trade when it can justify doing so. It should not be allowed to declare a lawful trade a non-trade because it finds the trade distasteful. In a free country, a citizen should not have to prove his livelihood is respectable. The state should have to prove why restricting it is necessary.

### Can the government ban a peaceful livelihood just because it disapproves of it?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/can-the-government-ban-a-peaceful-livelihood-just-because-it-disapproves-of-it/

No. A constitution need not protect every way of making money, but it should protect every peaceful way of making a living, and disapproval alone is not a reason to take one away.

Start with the easy cases. Nobody has a constitutional right to cheat customers, sell fake medicine, run a banned racket, dump poison in a river, or collect debts with a threat. These are not livelihoods. They are harms wearing the costume of work.

Most occupations are not like that. They are simply small, unfamiliar, informal, or inconvenient to the people in charge. A woman selling snacks from her kitchen, a mechanic fixing phones at a stall, a guide walking tourists through a fort, a student shipping goods from a laptop: none is doing wrong because the work is unorganised or low-status.

Here the Constitution earns its keep. It stops the state reasoning, "We do not care for this kind of work, so we will make it impossible." The state may still regulate, and often should. It can ask the food seller to keep clean, the factory to be safe, the doctor to be qualified, the vendor to keep the footpath clear. What it cannot do is turn each of these concerns into a pretext for shutting the work down.

The test is whether the rule targets the harm. If the worry is food safety, write a cleanliness rule. If the worry is traffic, manage location and timing. If the worry is fraud, punish the fraud. A rule that reaches past the harm to the livelihood itself has stopped regulating and started banning.

Who pays when it does? Not the large firm, which absorbs licences, inspections, and legal doubt as a cost of business. The tailor, the plumber, the home cook, and the vendor cannot. For them, one unclear permit is the difference between working and going under, or between working and working in fear.

So the answer holds at both ends. The Constitution should not shelter harmful money-making. It should shelter honest work equally at the starting line, and make the state explain, every time, why a peaceful livelihood deserves to be restricted. Honest work should not have to prove it is respectable before it is allowed to begin.

### Does the Constitution protect only formal businesses, or also informal workers?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/does-the-constitution-protect-only-formal-businesses-or-also-informal-workers/

The Constitution protects informal work too, and the word that does the lifting is "occupation." Article 19(1)(g) covers any profession, occupation, trade, or business, and an occupation need not be a registered company, a shopfront, or a salaried post to count.

This matters because most Indians work informally. Around 90% of India's workforce is informally employed. In 2023-24, more than half of all workers were self-employed and about a fifth were casual workers. The category holds street vendors, hawkers, home-based workers, repairers, domestic workers, small food sellers, gig workers, and day labourers. Their work is often small, mobile, seasonal, unregistered, or done in public space. None of that, on its own, makes a livelihood unworthy of protection.

The Constitution protects the freedom to earn a living. It does not protect nuisance, encroachment, fraud, or unsafe conduct. An informal worker has no right to block a footpath, ignore safety, or trample the rights of others. But the state, in turn, cannot treat work as illegal simply because it is informal.

The real question is narrow: is this a peaceful livelihood that can be regulated without being destroyed? If it is, the state should reach for clear rules, fair allocation of space, reasonable fees, transparent permissions, and due process. It should not reach for licensing mazes, shifting zones, eviction drives, and municipal discretion that quietly make small self-employment impossible.

Formality is expensive. A person who cannot afford a shop, a lawyer, a licence agent, an accountant, and repeated trips to a government office stays informal by necessity, not by choice. Tie constitutional protection to formal status and you hand the weakest protection to the poorest workers, the very people who most need the shield.

So the Constitution covers both the formal business and the informal worker. The rules may well be stricter where public space, safety, congestion, or the rights of others are in play. But informality should trigger sensible regulation, not constitutional exile. A livelihood is not worth less because it is small, mobile, unregistered, or carried on by the poor.

### Domestic workers depend on several households for their income, often with no written contract, no fixed leave, and no clear protection against mistreatment. Are they protected as workers, or does the home-based nature of the job leave them outside labour law?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/domestic-workers-depend-on-several-households-for-their-income-often-with-no-written-contract-no/

Start with a sharper question: protected against what? A domestic worker may face assault, confinement, harassment, trafficking, wage theft, a broken promise, low pay, or simply a disagreeable employer. These are different problems, and collapsing them all into the single word "exploitation" hides more than it reveals.

Violence, coercion, fraud, and confinement violate basic rights, and the state has a plain duty to act against them. Withholding agreed wages is breach of contract, and the worker needs a quick, cheap way to recover the money. Low pay that comes from weak bargaining is a third thing again. It may be unwelcome, but it is not by itself evidence of force or fraud. Sorting these apart matters, because formal labour law is only one source of protection among several.

Domestic work is also governed by social norms, worker networks, neighbourhood reputation, and informal sanction. Workers trade word on which households pay on time, demand extra, or treat people harshly, and in a dense colony or apartment block that word travels fast. An employer known for mistreatment struggles to hire or keep anyone. These networks do more than find jobs; they work as an informal review system, rating employers, comparing wages, and warning of abuse. The state should not try to replace them with inspectors and paperwork. It should help the information move, and stand behind it as a legal backstop where reputation fails.

The multi-employer pattern matters too. A worker who sells different parts of her day to several households is exercising control over her own labour. It loosens her dependence on any one employer and lets her walk out of a bad house without losing her whole income. Rules built for the single full-time employer can wreck this. Mandatory appointment letters, payroll systems, and benefits tied to one household all raise the cost of hiring someone for a few hours a day, and push the market toward agencies or live-in work. Yet the live-in worker is often the most vulnerable of all, with wages, food, housing, and even mobility resting on one household.

The real fault line is frequently not "power" in the abstract but access to information. A newly arrived migrant may not know local wages, employer reputations, ordinary workloads, or her alternatives. Worker networks correct this by spreading price and reputation; portable identity systems and local wage surveys can help too, so long as they stay tools and do not harden into licences that bar the way to work.

The home also sets a principled limit on enforcement. A private house may be a workplace for part of the day, but it stays a protected personal space. The factory model of routine inspection, record checks, and official entry cannot be stretched across millions of homes without serious intrusion and fresh openings for harassment. Enforcement should therefore run on complaints and be worker-initiated, backed by simple claims procedures, local help, and fast small-claims forums. A ₹5,000 wage dispute should not cost years in a civil court.

Domestic workers do need protection. The framework that fits is narrower and works better: enforce the criminal law, punish fraud and wage theft, give cheap remedies for broken agreements, strengthen the worker networks that already exist, and guard the freedom to work for several households at once. The law's job here is to support reputation, contract, and exit, not to displace them.

### How do vendors decide where to sit when there is no official vending plan?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/how-do-vendors-decide-where-to-sit-when-there-is-no-official-vending-plan/

They work it out among themselves, and the result is not chaos. It is order that grew rather than order that was drawn. In market after market, vendors settle who sits where without a written rule in sight.

They sit where customers already pass: bus stops, school gates, temple doors, office clusters, metro exits. Similar vendors gather together because buyers like choice. The tea stall sits by the repair shop because both serve the same waiting customers. The flower seller sits by the temple because that is where flowers are bought.

Seniority counts. A vendor who has held a spot for years carries a recognised claim, and newcomers negotiate around him. Sometimes the day itself gets shared: the vegetable seller takes the pitch in the morning, the snack seller in the evening.

None of this is perfect. These arrangements can shut out newcomers, favour the old hands, or run on quiet payments. But they hold knowledge no official plan can easily capture: where people walk, when the crowd builds, which spots stay safe, where customers halt, and how the street turns over through the day.

That is why the informal order should not be waved away as disorder. More often, it is the street solving, on its own, a problem the planner finds hard.

### I keep seeing more cars and motorcycles on Delhi's roads, but people say there cannot be too many auto-rickshaws. Who decides how many autos are allowed, and why is there no similar limit on private vehicles?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/i-keep-seeing-more-cars-and-motorcycles-on-delhis-roads-but-people-say-there-cannot-be-too-many-auto/

The auto cap came from the Supreme Court, not the ordinary workings of the Delhi government, and it exposes a deep inconsistency in how the city treats vehicles that earn a living against vehicles that do not. In 1997, hearing the long-running pollution case *M.C. Mehta v. Union of India*, the Court stopped Delhi from issuing new auto permits except to replace an existing auto. The ceiling was later raised and, in 2011, fixed at one lakh. In 2024 the Court refused a manufacturer's plea to relax it, holding that the limit protected the environment.

An auto therefore needs more than ordinary registration. Because it carries passengers for payment, its owner must also hold a commercial transport permit, and governments and courts have treated the total number of such permits as something to be capped. A private car or motorcycle needs no such permit. Meet the registration, tax, safety, and emissions rules and you may ordinarily register one. Delhi restricts old vehicles and may regulate new fuels, but it sets no numerical ceiling on private cars or two-wheelers. By March 2026 the city had about 87.6 lakh registered vehicles, nearly 59.3 lakh of them two-wheelers.

The strongest case for capping autos is that road space is scarce, and every added vehicle worsens pollution and congestion. But that argument does not stop at the auto. Cars take road space and foul the air too, often carrying a single passenger. The original cap answered a specific harm, the heavily polluting two-stroke engine. Autos later moved to cleaner CNG, and in 2018 the Environment Pollution (Prevention and Control) Authority recommended scrapping the ceiling, arguing that it had raised transaction costs, enriched financiers and permit intermediaries, and weakened an important form of public transport.

A scarce permit also grows a price of its own. Rather than letting a new driver buy an auto and start work, the system pushes him to rent, or to pay whoever already controls a permit. So the question is not whether Delhi may manage its traffic. It is why it rations the livelihood vehicle while letting the private vehicle multiply unchecked. A consistent policy would target the actual harms of road use, congestion, and emissions, and it would target them whether the vehicle is an auto, a motorcycle, or a car.

### I rarely see cycle-rickshaws or e-rickshaws in Lutyens' Delhi or much of South Delhi. Are they banned there? If congestion is the concern, why are large private cars and SUVs allowed in narrow, crowded lanes elsewhere?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/i-rarely-see-cycle-rickshaws-or-e-rickshaws-in-lutyens-delhi-or-much-of-south-delhi-are-they-banned/

Partly, yes, this is the law at work, and the pattern of it is hard to defend. Passenger cycle-rickshaws are prohibited across the New Delhi Municipal Council area, which covers much of Lutyens' Delhi. E-rickshaws are not banned from whole districts, but the government has barred them from plying or parking on 236 specified roads, many of them the major arteries of central and South Delhi.

There is a reasonable case for keeping very slow vehicles off fast roads. A large gap in speed raises the risk of collision, and e-rickshaws parked near junctions or metro gates can choke traffic. So far the safety logic holds.

It does not explain the asymmetry. A cycle-rickshaw takes little space, burns nothing, and moves people cheaply over short distances. An e-rickshaw usually carries several passengers. A large SUV may take far more room while carrying one, and it consumes road space parked as well as moving, spilling onto lanes and pavements. Yet the SUV is not barred for being large. It may enter the tight lanes of Shahpur Jat or Uttam Nagar unless a general no-entry or pedestrianisation rule happens to apply, and such car bans stay rare and exceptional. The restrictions fall hardest on the vehicles that carry the poor and earn the poor a living.

The Delhi High Court caught this in the Manushi litigation. It did not sweep away every restriction on cycle-rickshaws, but it held that arterial-road bans needed proper empirical study, and it warned that rickshaw pullers were easy targets for enforcement and harassment.

A neutral rule would start from the harms themselves and ask how much congestion, danger, pollution, and parking pressure each use creates. It might reserve fast roads for fast traffic, build segregated lanes, price parking properly, and restrict every vehicle in the genuinely crowded stretch. What is hard to defend is a system that clears the rickshaw while treating the private car as the default. Delhi's rules carry a real safety rationale, but their lopsided design and thin evidence leave a serious fairness problem.

### I see so many e-rickshaws and auto-rickshaws on the road, but they're all run by individual drivers. Why don't companies run them like they run cabs or airlines?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/i-see-so-many-e-rickshaws-and-auto-rickshaws-on-the-road-but-theyre-all-run-by-individual-drivers/

Because Indian law has treated the rickshaw as a poor man's livelihood, not a business to be built at scale. An airline may own a fleet, lease aircraft, hire pilots, and run a branded service. Rickshaws have long been governed by the opposite rule: one vehicle, one driver, one living, with the state working hard to stop any owner from controlling many vehicles.

The idea started with cycle rickshaws. Delhi's 1960 rules let a man keep or ply a cycle rickshaw only if he owned it himself and held a licence, and no one could hold more than one. Punjab followed in 1976. The reason offered was welfare: richer owners were buying rickshaws and renting them to poor pullers, who did the hard work while paying a fixed daily rent. In the 1980s the Supreme Court accepted this logic and upheld the owner-puller rule.

The model bred its own troubles. Delhi's licence cap began at 750 rickshaws, rose to 20,000 in 1975, and reached 99,000 by the time of the Manushi case. Once licences turned scarce, they turned valuable. The poor migrant who could not buy a rickshaw or arrange the papers still had to rent one, only now informally. In 2010, the Delhi High Court in *Manushi Sangathan v. Government of Delhi* struck down the owner-puller rule and the cap, holding that it blocked poor workers from earning rather than protecting them.

Auto-rickshaws walked the same road. Autos need permits, and in Delhi the permits were capped. Later notices record the Supreme Court raising the three-seater ceiling from 55,000 to one lakh. Scarcity made permits dear. In the late 1990s a new auto with permit ran to around ₹1 to 1.5 lakh. A decade of scarcity later, the same package reportedly cost ₹4 to 4.5 lakh, with the permit alone worth roughly ₹3 lakh of that. In Kolkata a permit that officially cost about ₹15,000 changed hands in the black market for around ₹1.5 lakh.

So the rule never really killed the middleman. It swapped the visible fleet company for the informal financier, the permit-holder, the union, and the rental operator. Delhi eventually admitted as much. In 2016 it allowed auto owners to rent vehicles to drivers, since many were already doing it in the shadows.

E-rickshaws briefly broke the pattern. Parliament legalised them in the 2015 Motor Vehicles amendment, and in 2016 the Union government exempted them from the ordinary permit requirement, making entry far easier than in the auto sector. Then the old instinct returned. Delhi's recent model proposes registration in the driver's name alone, one e-rickshaw per person, again to stop operators from owning many and renting them out.

Some firms did try to build organised electric three-wheeler fleets. SmartE reportedly grew from 30 vehicles to around 1,000 across Delhi NCR and raised ₹100 crore from Mitsui. Ola announced plans for 10,000 e-rickshaws. Oye Rickshaw raised about $13.2 million. But a fleet model needs three things: the freedom to own many vehicles, the freedom to hire drivers who do not own them, and stable rules to operate under. Rickshaw regulation has made all three hard.

There is a real worry underneath these rules. A driver renting by the day may owe the owner even when earnings are thin, the vehicle breaks down, or the police stop him, and a fleet owner can squeeze a worker. But banning fleet ownership is a blunt answer to that worry. Many poor workers rent precisely because they cannot afford to buy. Insist that only owners may drive, and you shut out the asset-poor worker the rule claims to shield.

That is why rickshaws do not look like airlines. The law has treated them as units of poverty relief rather than ordinary transport, and the record of that choice is mixed at best: fewer formal companies, more informal finance, more scarcity rents, and less organised investment in maintenance, safety, charging, and insurance.

### If public land belongs to everyone, why do vendors sit at the same spot every day as if it belongs to them?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/if-public-land-belongs-to-everyone-why-do-vendors-sit-at-the-same-spot-every-day-as-if-it-belongs-to/

The law says the vendor does not own the pavement, and the law is right. The street belongs to the public, with the municipality holding it in trust. A vendor is not a shopkeeper with a title or a lease. Under the Street Vendors Act, 2014, he may earn a right to vend, but never ownership of the exact patch he sits on.

Use and fairness are another matter. Picture a coconut-water seller outside the same metro station for ten years. Customers know where to find him. He keeps his corner clean. Other vendors leave the spot alone. The shopkeepers behind him tolerate him, or bargain with him, or quietly profit from the footfall he draws. That patch of pavement is no longer anonymous ground. It has become part of a working arrangement.

This is why vendors talk as if they "have" a spot the law says they do not own. In a Delhi study of stationary vendors, nearly all used the same place every day, and many left carts and goods there overnight. Vendors also reported renting, selling, and transferring these spots among themselves, none of it recognised on paper.

Ownership was never only about paper title. Property rights grow from peaceful use repeated over time, from local recognition, and from the ability to keep others out without a fight. This is close to the old idea of first possession: peaceful, long-standing use of a scarce resource, backed by labour and settled expectations, earns a claim that deserves respect.

So the use-right should strengthen when the vendor has held the spot peacefully for years, blocks no essential movement, is recognised by his neighbours, and serves customers who depend on him. It should weaken when he blocks passage, creates danger, keeps others from their own property, or grabs more space than he needs.

Both extremes fail. Declare that no vendor owns any spot, and you leave him at the mercy of bribes, strongmen, and political cover. Declare that whoever grabs first owns forever, and you invite chaos. The workable rule sits between: stable, limited, tradable use-rights. The vendor should not own the pavement outright, but he should not be treated as a trespasser every dawn either. His years of use and web of local bargains are real economic value, and the law should stop pretending they do not exist.

### If vendors already manage space among themselves, why do we need government rules at all?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/if-vendors-already-manage-space-among-themselves-why-do-we-need-government-rules-at-all/

Informal order works until the stakes rise, and then it needs backing. In a settled neighbourhood market, where vendors, shopkeepers, and residents know one another, claims over space stay stable and everyone knows who sits where. The trouble comes when a pitch suddenly turns valuable.

A new metro station lifts the footfall. A road-widening scheme shrinks the space. A mall, a festival, or a weekly bazaar concentrates buyers in one spot. Once a place becomes more profitable, the stronger parties start pushing the weaker vendors out. The neighbourly arrangement that held for years cracks under the new money.

This is where rules earn their place. Their job is not to erase informal arrangements. It is to protect the ones that work and correct the ones that turn unfair.

Good rules do a few plain things. They identify the vendors already there. They block arbitrary eviction. They keep passage clear for pedestrians and ambulances. And they stop officials, shopkeepers, resident groups, and politically connected vendors from capturing the process for themselves.

So the choice was never "no rules" against "full planning." The sensible path is modest: leave the working arrangements alone, and step in only where conflict, safety, or serious obstruction makes rules genuinely necessary.

###  If vendors occupy public space, why should the law protect them? What about pedestrians, residents, shopkeepers, buses, and delivery workers who also need the street?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/if-vendors-occupy-public-space-why-should-the-law-protect-them-what-about-pedestrians-residents/

The premise is right, and it points past the current law rather than against the vendor. Congestion is never the vendor's doing alone. The street carries pedestrians, cyclists, buses, autos, delivery workers, shopkeepers, residents, parked cars, construction crews, and processions all at once. Each has a reasonable claim. Each can also block the rest.

The Street Vendors Act, 2014 answers one real but narrow question: how do we shield vendors from harassment, eviction, and arbitrary treatment? That question matters, because vendors are the easiest target for the police officer and the municipal inspector, and without protection a livelihood can vanish in a morning.

But a second question stays open: how should the scarce street be shared among everyone who needs it? Should a given footpath carry walking, vending, parking, restaurant seating, a bus shelter, or a utility box? Should the rules shift for school hours, the evening rush, the weekly market, or a festival? A vendor-specific law cannot answer this, because it looks at one user of the street and not the street itself.

This is why India needs rules for public space, not just protection for one group within it. The law should still guard vendors against arbitrary eviction. It should also set fair, local, and transparent rules for every use of the street. Without that, each group fights for its own exception, and the street ends up governed by whoever holds the most political weight or the heaviest enforcement hand. Protecting the vendor is the right place to start. It is not the whole of the job.

###  If we don't cap the number of street vendors, won't every pavement and market lane become impossible to walk through?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/if-we-dont-cap-the-number-of-street-vendors-wont-every-pavement-and-market-lane-become-impossible-to/

The Act already caps them, and the cap is the problem. The Street Vendors Act, 2014 does not throw the street open to all comers. It says vendors identified by survey should be accommodated up to a norm of 2.5% of the ward, zone, or city population, subject to the holding capacity of each vending zone. In a ward of one lakh people, the law assumes room for roughly 2,500 vendors.

The instinct is not absurd. Streets, metro exits, market lanes, and bus stops are shared. Vendors are not their only claimants. Pedestrians, cyclists, residents, delivery workers, and ambulances have claims too, and the street is not empty land for anyone to occupy at will.

The trouble with 2.5% is not that it limits numbers. Public space is scarce, and some control over how many vendors crowd a given place may well be needed. The trouble is that a single population-based figure treats unlike places alike. Chandni Chowk, Sadar Bazaar, and Sarojini Nagar hold small resident populations against enormous daily footfall and a long history of vending. Tie the quota to residents and you undercount the commercial life of exactly the places where vending thrives. Meanwhile a quiet stretch of Dwarka or Vasant Kunj may carry a larger resident population but far fewer natural vending spots, and there the same 2.5% overstates what the street can bear. There is no magic number. A street's carrying capacity cannot be read off its population.

The cap also raises a plainer problem. Vending is an occupation, and Article 19(1)(g) protects the freedom to carry it on. We fix no numerical ceiling on restaurants, kirana shops, salons, or tuition centres. They are disciplined by demand, rent, competition, and reputation. Vendors feel these same signals: crowd one product into one lane and earnings fall, and some move on. The state should step in against obstruction, nuisance, and danger. It should not treat the sheer number of vendors as the harm.

The strongest case for a cap is that vendors, unlike shops on private property, use public space. That is true, and it argues for a space-based rule, not a crude population percentage. The better question is not "how many vendors should a city allow?" but "how many can this particular pavement or square hold without choking movement, safety, and its other legitimate uses?" Public space needs rules. It needs rules built on actual capacity, treating vendors as entrepreneurs and citizens, not as a population to be rationed.

### Should street vending be allowed only for poor people who have no other source of income?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/should-street-vending-be-allowed-only-for-poor-people-who-have-no-other-source-of-income/

No. Vending is not a poverty-relief scheme, and the right to trade should not depend on proving you are desperate enough to deserve it.

The worry behind the question is fair. Public space is limited, and if the moneyed and connected move into vending, they may seize the best pitches and squeeze poorer vendors out. Reserving the trade for the poorest sounds like a way to protect the weak. It does the opposite.

Vending is enterprise, not only welfare. A person vends because she is poor, but also because she has a skill, a good location, family labour, low capital, or a product people want. A retiree selling tea, a woman selling weekend snacks, a migrant selling phone covers: each is engaged in peaceful exchange. The state may govern how vending uses the street. It has no business deciding who is morally poor enough to trade.

A means test also builds a trap. If a vendor succeeds, hires a hand, buys a second cart, or wins a steady clientele, does he forfeit his right to vend? Such a rule punishes the very mobility the trade exists to offer, and rewards hiding income from the inspector.

Enforcement makes it worse. To admit only the "truly poor," the state would need income checks, asset checks, and periodic verification, the whole apparatus handed to local officials and their intermediaries. The well-connected would secure their poverty certificates. The genuinely vulnerable would be excluded or shaken down.

Section 5 of the Act carries exactly this flaw. It lets a vending certificate go only to someone who declares he "has no other means of livelihood." The clause is divorced from how vending works. Many vendors have seasonal income, family support, a second small trade, or plans to grow. The condition is rarely enforced, because enforcing it would demand an intrusive and unworkable poverty audit. What remains is a bad legal fiction: the statute insists vending is only for the destitute, while the street shows it is ordinary enterprise.

Keep entry open. Regulate conduct. Govern space transparently. Do not make poverty the price of admission to honest work.

### Shouldn't the government move street vendors out of busy streets and into designated vending zones?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/shouldnt-the-government-move-street-vendors-out-of-busy-streets-and-into-designated-vending-zones/

The question rests on a misunderstanding: that a "vending zone" means a separate market, tucked away from the busy street. It does not. Congestion is a genuine concern, and footpaths must stay walkable. But shifting vendors off busy streets into segregated zones is usually the wrong fix, and often an illegal one.

Under the Street Vendors Act, 2014, a vending zone is not a fenced enclosure at the city's edge. The law defines it to include footpaths, pavements, embankments, and portions of the street itself. It recognises that vending belongs where the pedestrians and customers already are.

A vendor sits where customers pass. The tea seller by the office block, the fruit vendor at the metro gate, the snack seller outside the college: each is answering footfall. Move them to a tidy zone with no footfall and you clean up the map while destroying the trade. The vendor loses his customers. The customer loses cheap and convenient access to daily goods. Foot traffic does not follow a planning notification.

The Act sets a high bar before an area can be closed to vending. Under Section 21 with the First Schedule, overcrowding alone is not a valid ground, and sanitation is a ground only if the mess can be blamed solely on vendors and cannot be fixed by ordinary civic action. Congestion, the usual excuse for relocation, is ruled out. Existing natural markets cannot be declared no-vending zones at all.

On paper. In practice these protections mostly stay on paper. No area can lawfully be designated a vending or no-vending zone until the mandatory survey is done and a Street Vending Plan drawn up, yet in city after city the surveys, certificates, plans, and functioning committees remain delayed or disputed. Evictions proceed anyway, dressed as zone regulation, with no working Town Vending Committee for the vendor to appeal to.

Some spots do warrant real limits: a narrow hospital gate, a dangerous junction, a school entrance at closing time. But limits should be specific, reasoned, and proportionate, not a blanket relocation triggered by the mere look of disorder. Better to survey vendors where they actually work, recognise the natural markets, mark walking and vending space clearly, and enforce the rules against every encroacher, including the parked cars and shop spillovers that eat far more footpath than any cart.

### What does it mean to have a right to carry on a trade, business, or occupation in India?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/what-does-it-mean-to-have-a-right-to-carry-on-a-trade-business-or-occupation-in-india/

The right means you can earn a living without first asking the state's permission to exist. You do not have to prove your work is respectable, useful, or approved before you begin.

Article 19(1)(g) gives every citizen the freedom to practise a profession or run a trade, business, or occupation. Open a shop, repair phones, drive a cab, cook and sell food, write code for clients: the Constitution treats all of it as your business, not the government's to license into being.

The freedom is not absolute. Article 19(6) lets the state impose "reasonable restrictions" in the public interest. A restaurant can be held to hygiene standards. A factory can be made to follow safety rules. A doctor can be asked for qualifications. A vendor can be told where and when to set up so footpaths and traffic still work. Regulation of this kind is ordinary and expected.

What the right forbids is different. The state cannot block entry on a whim, pile on licences until only the well-funded survive, or make compliance so slow and costly that the small operator gives up. A rule that protects customers from harm is one thing. A rule that protects existing businesses from competition, dressed up as public interest, is another.

This is not academic. For a person running a tea stall, a one-room workshop, or a cart, the line between lawful work and daily harassment often runs through a single permit.

The B.P. Sharma case shows the line in practice. The government stopped renewing the identity cards of approved tourist guides once they crossed a certain age, arguing that guiding took stamina: long walks, steep steps, hours on your feet. The Court accepted that guides could be regulated. It could set standards for knowledge, conduct, and fees, and stop them cheating tourists. But it struck down the blanket age bar. These guides drew no salary and no government benefit. They earned directly from tourists, and the state could not end that livelihood because a birthday had passed, absent a real public-interest reason.

A safety rule is one thing. A rule that ends a person's living with no clear link to public harm is another. The value of the right is that it forces the state to say which one it is.

###  When I book an auto through an app, I know the fare before the ride. But a metered auto on the road often refuses to go by the meter. If meters are legally required, why do they matter so little in practice?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/when-i-book-an-auto-through-an-app-i-know-the-fare-before-the-ride-but-a-metered-auto-on-the-road/

The meter matters in law and falters on the road because it sets an official price, not a market price. When a driver quotes above the meter, he is usually doing one of three things: pricing in the traffic, avoiding a trip that strands him with no return fare, or charging for scarcity when rain or the evening rush makes autos hard to find. The meter adjusts to none of this well.

That gap explains the daily refusals. If the legal fare sits below what the driver thinks the trip is worth, he refuses, asks for "extra," or bargains outside the meter. The meter works like a price ceiling, and when the ceiling is set too low the shortage does not vanish. It resurfaces as refusals, haggling, waiting, tips, and app-based surge.

And who sets the ceiling? Not drivers and passengers. State transport authorities do. In Delhi the State Transport Authority notifies auto and taxi fares. In Maharashtra the Regional Transport Authorities do it, with a dedicated body for Mumbai. In Karnataka the District Transport Authority approves revisions, after which Legal Metrology recalibrates the meters. Government fixes the fare, the authority approves it, metrology updates the box.

The chain moves slowly. Delhi revised auto fares in 2022-23 only after CNG prices jumped, lifting the meter-down charge from ₹25 to ₹30 and the per-km rate from ₹9.50 to ₹11. Before that, autos had last been revised in 2020, and taxis not since 2013. Costs, traffic, and demand change far faster than fare notifications.

The apps make the gap visible. Book through an aggregator and you see the fare first. It may run above the meter, but it prices in convenience, availability, waiting, route difficulty, and sometimes surge. In Bengaluru, reports after the 2025 revision found app fares still well above the new official rate of ₹36 for the first two kilometres, and drivers often preferring app rides because they paid better and spared the bargaining.

Regulators know this, which is why even the aggregator rules allow some dynamic pricing. The Motor Vehicle Aggregator Guidelines, 2025 permit fares up to twice the state base during peak demand, a quiet admission that a fixed fare card cannot handle real-time scarcity.

Enforcement alone will not close the gap. Weak enforcement makes cheating easy, but strict enforcement of a badly priced fare just produces the other failure: drivers refuse the ride. Where meter compliance is better, it is usually because local supply and demand happen to sit near the official fare. Mumbai is the standard contrast: enough autos and taxis, a fare that broadly works for drivers, and so the meter gets used.

The meter is not useless. It gives the passenger a legal benchmark and a shield against arbitrary pricing. But a benchmark set too low, revised too slowly, and blind to traffic and peak-hour scarcity will keep losing to the roadside bargain. The real question is not only why drivers ignore the meter. It is why the meter fare is so often out of step with what the ride actually costs.

### When many people use public space for private purposes, who should decide who gets to use it, where, and when?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/when-many-people-use-public-space-for-private-purposes-who-should-decide-who-gets-to-use-it-where/

Decisions about a street should be made as close to that street as possible. The use of a market lane, a temple entrance, or a metro exit is intensely local knowledge, and no central ministry or distant municipal headquarters holds it. It cannot know when the lane crowds, where pedestrians really walk, where loading happens, or which stretch turns unsafe the moment vendors are cleared. The Street Vendors Act, 2014 is a Union law running across India. It leaves room for state rules and city schemes, but many design choices still come down from above, and that sits uneasily with the case for local control.

The Act also puts too much faith in planning. It imagines the street can be governed through surveys, certificates, vending zones, no-vending zones, and vending plans. Some planning is unavoidable. Emergency access, pedestrian movement, sanitation, and fire safety need firm rules. But a plan cannot capture the living knowledge of a street: where customers stop, when the crowd forms, which corner turns unsafe after dark, and how all of this shifts across the day. That knowledge is scattered among the people who use the place. Vendors know which pitches sell. Pedestrians know where walking gets hard. Shopkeepers know when deliveries land. The municipal officer, sitting elsewhere, rarely knows any of it in real time.

When the law ignores this scattered knowledge, informal order fills the gap. Vendors work out who sits where, whose long-standing claim holds, how disputes settle, and how newcomers find room. These arrangements can be unequal or coercive. They also prove that people build workable rules when the formal law fails to supply them.

The Act's answer is mainly political: the Town Vending Committee. Representation helps, but committees can be captured, stalled, split by faction, or reduced to one more layer of discretion. A market answer asks a different question. Where public space is scarce and commercially valuable, why not price its temporary use in the open? Cities already do this for parking, through fees, contracts, and hourly rates. There is no principled reason vending space must be handed out by committee while parking is handed out by price. A transparent fee, auction, or time-slot is usually less arbitrary than an inspector, a councillor, or a committee deciding who deserves to stand where.

###  Who should decide how many vendors sit in a market, and where exactly they sit?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/who-should-decide-how-many-vendors-sit-in-a-market-and-where-exactly-they-sit/

The Act hands this job mainly to Town Vending Committees, and that is a better default than the alternatives. The committees survey vendors, identify who already works a market, issue certificates, and prepare the vending plans that decide where vending happens and on what terms. Better a committee than a lone police officer, municipal inspector, or local strongman clearing a pitch on a whim. A vendor should not lose twenty years of livelihood because one official dislikes her or one politician wants the corner empty.

But the committee sits too far from the street. Vending is intensely local, and a distant municipal office will not know which stretch floods at dusk, which lane jams after school, which vendor has held her spot for two decades, or where customers actually stop. Rules drawn far away look neat on paper and fail on the pavement.

So the decision should be pushed as close to the street as it can go. Local bodies should set a few simple rules: keep the walking space clear, protect emergency access, avoid dangerous chokepoints, and record who already vends. They should resist the urge to redesign every market from a desk.

One principle carries most of the weight. Where vendors, customers, shopkeepers, and pedestrians have already found a workable arrangement, the state should leave it alone. Where there is real conflict, rules may be needed, but they should be local, transparent, and built to protect the vendor who has made her living in that place, not to sweep her out of it.

### Why are street vendors allowed to sell on footpaths and roads? Aren't streets for walking and traffic?

Source: https://liberty-lighthouse.vercel.app/topics/livelihoods/faq/why-are-street-vendors-allowed-to-sell-on-footpaths-and-roads-arent-streets-for-walking-and-traffic/

Streets are for walking and traffic. They are also for a hundred things besides. Watch any Indian street for an hour and you will see buses halt, cyclists weave, shopkeepers unload, mechanics fix scooters, children wait for vans, processions pass, scaffolding narrow the path, and private cars park for hours on public land. The street has always been a shared space, not a corridor reserved for two uses.

Once you notice this, the question sharpens. If the street can hold a parked car, a shop's unloading, a builder's scaffolding, or a wedding procession, why is the vendor the one singled out as an intruder? Vending uses public space for private gain, true. But it also does something the parked car does not: it serves the passing public. A tea seller, cobbler, fruit vendor, or snack stall puts cheap goods and quick service exactly where people already are.

The parked car makes the comparison plain. It occupies scarce public space for one owner and may sit idle for hours, serving no one. A vendor takes less room and serves hundreds in a day. Yet cities normalise the parking and treat the vending as disorder. That is not a neutral planning judgment. It is a judgment about whose use of the street looks respectable and whose looks inconvenient.

Vendors also make streets safer. A street with people on it all day has eyes on it all day. The tea seller knows the regular office crowd. The fruit seller notices the lost child. The newspaper vendor knows the rhythm of the lane. Their presence makes the street more legible and more secure than any cleared pavement.

None of this means a vendor may block a road or swallow a footpath. Pedestrians need safe passage. Ambulances must get through. Noise, waste, and congestion need managing. The point is only this: vending is a legitimate use of the street, to be regulated as one, not an illegal intrusion to be cleared on sight.

## Syllabus

## **Books**

1. [The Death and Life of Great American Cities](https://en.wikipedia.org/wiki/The_Death_and_Life_of_Great_American_Cities) — Jane Jacobs. Argues that mixed uses, frequent footfall, small shops, and "eyes on the street" make neighbourhoods safer and more functional; useful for understanding vendors as part of a street's social life rather than as obstructions.
2. The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (Basic Books, 2000) — Hernando de Soto

## **Academic Papers**

1. [The Use of Knowledge in Society](https://www.econlib.org/library/Essays/hykKnw1.html) (1945) 35(4) American Economic Review 519 — Friedrich A Hayek
2. The Problem of Social Cost (1960) 3 Journal of Law and Economics 1 — Ronald H Coase
3. The Property Right Paradigm (1973) 33(1) Journal of Economic History 16 — Armen A Alchian and Harold Demsetz
4. Police Powers and the Constitution of India: The Inconspicuous Ascent of an Incongruous American Implant (2014) 28 Emory International Law Review 63 — Arvind Datar and Shivprasad Swaminathan
5. [The Supreme Court and Article 19(6) of the Indian Constitution: A Study of Judicial Behaviour](http://hdl.handle.net/10603/515694) — Prashant Narang, PhD thesis, Centre for the Study of Law and Governance, JNU, 2019. Supervisors: Prof. Jaivir Singh and P. Puneeth
6. Street Smarts! Vendors and Property Rights in Delhi, India (2024) 1(1) Markets & Society 116 — Prashant Narang and Jayana Bedi

## **Legal Cases & Statutes**

1. State of Bombay v RMDC Chamarbaugwala AIR 1957 SC 699; 1957 SCR 874 — held that gambling competitions were not "trade" or "business" under Article 19(1)(g), establishing that some activities can be treated as outside ordinary constitutional protection
2. Khoday Distilleries Ltd v State of Karnataka (1995) 1 SCC 574 — held that citizens have no fundamental right to trade in liquor, though once the state permits such trade, licensing decisions must still meet standards of fairness and non-arbitrariness
3. Man Singh v State of Punjab (1985) — upheld Punjab's owner-puller rule for cycle rickshaws, accepting the state's argument that it protected pullers from exploitation by vehicle owners
4. All Delhi Cycle Rickshaw Operators Union v Municipal Corporation of Delhi (1987) — upheld Delhi's rule that a cycle rickshaw licence could go only to the owner-puller, and that one person could not hold multiple licences
5. Manushi Sangathan v Government of Delhi (2010) — Delhi High Court struck down Delhi's owner-puller rule and licence cap, holding it harmed poor workers who could not afford to buy a rickshaw but could rent one to earn a livelihood
6. Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014
7. Delhi City Taxi Scheme, 2015 — taxis were allowed to operate through individual and fleet models, while rickshaws were pushed toward one-driver-one-vehicle regulation
8. Delhi Transport Department, E-rickshaw Road Restrictions
9. [Supreme Court's 2024 decision declining to reconsider the one-lakh ceiling](https://www.livelaw.in/top-stories/supreme-court-rejects-plea-by-bajaj-auto-to-raise-cap-on-auto-rickshaws-in-delhi-262918) on auto-rickshaws in Delhi — Live Law

## **Reports**

1. [Report No. 95: Removal of the Three-Wheeler Cap](https://cdn.cseindia.org/epca/EPCA-Reports1999-1917/report-no-95-removal-of-three-wheeler-cap.pdf) — EPCA

## **Podcasts & Videos**

1. [The Plight of Our Street Vendors](https://seenunseen.in/episodes/2020/6/28/episode-179-the-plight-of-our-street-vendors/) — Prashant Narang with Amit Varma, The Seen and the Unseen, Episode 179. A long-form conversation on the legal, economic, and moral questions around street vending in India
2. [पकोड़ानॉमिक्स: फेरीवालों की व्यथा / Street Vending in India](https://www.puliyabaazi.in/p/street-vending-in-india-416) — Prashant Narang on Puliyabaazi. A Hindi discussion on street vendors, public space, corruption, and the Street Vendors Act
3. [Third Wheel](https://www.youtube.com/watch?v=TVWjuH8p1_Q) — Prabodh. A short documentary-style video on Delhi's cycle-rickshaw economy and the everyday reality of rickshaw pullers
4. [Pedalling Past Permits: How India's License Raj Choked Dreams & Dignity](https://www.youtube.com/watch?v=9hhEBRzPRyg) — Prashant Narang, TEDx. On how permit rules and livelihood restrictions shaped the cycle-rickshaw sector
5. [Right to Property](https://www.youtube.com/watch?v=88I99SYlb2g) — Prashant Narang. Compares property rights and livelihood claims of cycle-rickshaw pullers, street vendors, and auto-rickshaw drivers

# Property Rights

Source: https://liberty-lighthouse.vercel.app/topics/property/

A  look into the importance of property rights and its evolution in India

## FAQs

### How did the Right to Property come to be a Fundamental Right in the Constitution of India?

Source: https://liberty-lighthouse.vercel.app/topics/property/faq/how-did-the-right-to-property-come-to-be-a-fundamental-right-in-the-constitution-of-india/

By the end of British rule, zamindars held vast tracts of land and complete control over tillers' rights. Historical patterns of alienation, first under the Mughals and later under the British, had fragmented this land heavily. In the run-up to independence in 1947, socialism dominated the thinking of the Indian National Congress, the party that dominated the Constituent Assembly drafting India's new constitution.

Insecure land tenures, rural poverty and indebtedness, and recurring famine preoccupied the Constituent Assembly throughout its deliberations. Members split sharply over whether the government should take over private property outright, or leave property rights as the Government of India Act, 1935, had defined them. Even members who favoured expropriation rarely opposed abolishing the zamindari system itself. Their disagreements centred instead on how much compensation the state owed to those who lost land. The Constitution that India adopted in 1950 reflected that compromise: citizens gained the fundamental right "to acquire, hold and dispose of property" under Article 19(1)(f), while Article 19(5) subjected that right to reasonable restrictions in the public interest.

Article 31, the eminent domain article, could override this fundamental right to property. The state could still only seize private property by force "by the authority of law," "for public purposes," and on payment of compensation. The Constitution set no requirement that this compensation be "just," only that the relevant law fix the amount directly or specify the principles for determining it.

The Constitution's drafters aimed, above all, at social engineering through agrarian reform, and independent India's land reform agenda rested on five components: abolishing intermediaries such as zamindars, reforming tenancy arrangements, capping the size of land holdings, consolidating fragmented holdings, and compiling and updating land records.

The Constitution places land under the "state list," which lets state governments collect revenue and taxes on land and buildings and pass their own land reform laws, laws that abolish intermediary tenures, regulate holding sizes to enable ceiling-surplus redistribution to the landless, consolidate fragmented holdings, and settle disputed tenures and ownership. The Constitution placed "acquisition and requisitioning of property," meaning eminent domain, on the concurrent list instead, which let both Parliament and state legislatures pass their own laws governing forcible land acquisition.

### How did the Right to Property lose its Fundamental Right status in the Constitution of India?

Source: https://liberty-lighthouse.vercel.app/topics/property/faq/how-did-the-right-to-property-lose-its-fundamental-right-status-in-the-constitution-of-india/

The constitutional history of the right to property turns on a single judicial question: does Parliament hold the power to amend the Constitution under Article 368? The Supreme Court settled that question with the Basic Structure Doctrine. Parliament did hold the power to amend the Constitution under Article 368, the Court ruled, but it did not hold the power to change or destroy any element of the Constitution's "basic structure." The Supreme Court itself, finally, retained the power to decide what that basic structure contained.

The Constitution's drafters expected property law to give government a free hand in pursuing its social engineering goals. A series of Supreme Court and High Court judgments in the early years of independence belied that expectation. Courts repeatedly struck down state laws as violations of fundamental rights, and these rulings hit three property issues in particular, undermining Prime Minister Jawaharlal Nehru's view that no individual right could override the rights of the community: the expropriation of zamindari land on abolition of the zamindari system, the compulsory acquisition of private property, and the nationalisation of trade and businesses.

Each time the judiciary struck down a property law, Parliament responded by amending the Constitution to undo the damage. The early court rulings, though, were not really protecting the sanctity of the fundamental right to property under Article 19(1)(f). Courts upheld the abolition of zamindari property rights, the government's seizure of zamindars' surplus land, and the takeover of private enterprises. The same rulings validated the Ninth Schedule, a creation of the First Constitutional Amendment in 1951, even though that schedule shielded its listed laws from being struck down for violating any fundamental right. Parliament and the judiciary quarrelled only over how much compensation property losers deserved.

The 24th and 25th Constitutional Amendments, passed in 1971 and 1972, made every fundamental right amendable in service of the Directive Principles of State Policy. Article 13 no longer applied, so Parliament could infringe fundamental rights and bar judicial review of that infringement, and the government could carry out eminent domain expropriations with or without compensation.

The Supreme Court answered with the Basic Structure Doctrine in the Kesavananda Bharati case of 1973, ruling that Parliament could not destroy the power of judicial review. Parliament countered by passing the 42nd Constitutional Amendment in 1977, granting itself unrestrained power to amend any part of the Constitution and giving the Directive Principles primacy over fundamental rights. That amendment dispensed with judicial review, the rule-of-law principle at the heart of the earlier fight, and Parliament passed it during the Emergency, when the government had jailed many prominent opposition leaders and parliamentary proceedings ran without much debate or contest.

The post-Emergency Parliament was expected to undo these Emergency-era amendments. Instead, the 44th Constitutional Amendment of 1978 removed what remained of the fundamental right to property altogether. Parliament deleted Article 19(1)(f), the right to property, and Article 31, the eminent domain article, so no fundamental right to property survived, and no safeguard against the state's exercise of eminent domain remained either. Courts could no longer question the amount of compensation paid for expropriated property. Parliament introduced Article 300A in their place, establishing a constitutional right to property stating that no person shall be deprived of property except by the authority of law. Only two exceptions to that diminished right survived: minorities retained the right to establish educational institutions, and only cultivators holding land within the ceiling limit for personal cultivation retained a right to compensation at market value.

In Minerva Mills Ltd. v Union of India (1980), the Supreme Court declared unconstitutional the part of the 42nd Amendment that had barred judicial review. The Court also struck down the provision giving the Directive Principles precedence over fundamental rights, and it held that every constitutional amendment passed after Kesavananda must be judged against the Basic Structure Doctrine. The Court left one gap untouched: it did not challenge the still-bottomless list of Ninth Schedule laws that remained outside judicial review.

The long contest over property rights, fought out across courtrooms and Parliament, ended with the Minerva Mills judgment and the sobering experience of the Emergency. The right to property stopped being a battleground between the executive and the judiciary. The Kesavananda bench had already ruled, unanimously, that the fundamental right to property was not a "basic feature" of the Constitution, and the judiciary conceded that the legislature alone could determine the extent of property rights, while holding firm to its own power of judicial review. Parliament, in turn, kept the power to amend the Constitution so long as it left the basic structure intact, and to exercise eminent domain under the authority of any law, since the right to property now survived only as the constitutional right set out in Article 300A.

A political and social consensus formed across the spectrum on the limited value of property rights. Every major political faction agreed that extinguishing property rights served the nation's social and economic objectives.

### How has the Constitution of India treated property rights of communities ?

Source: https://liberty-lighthouse.vercel.app/topics/property/faq/how-has-the-constitution-of-india-treated-property-rights-of-communities/

Eighty years after independence, the colonial-era Indian Forest Act of 1927 still governs forest management in India. The 42nd Constitutional Amendment of 1976 moved forestry onto the concurrent list, so state governments continued managing forests within their own territory, while the central government set the policies guiding that management.

India's first National Forest Policy, adopted in 1952, called for further intensifying the commercial exploitation of forest resources and made no attempt to reverse the injustices colonial policy had heaped on indigenous populations. The policy stated outright that forests counted as a national asset, and that people held no prior claim over forests or their produce.

Where the 1927 Act had shrunk forest dwellers' rights down to state-granted privileges, the 1952 policy narrowed access further still, reducing "rights" themselves to mere "concessions" and restricting even the privileges that remained. Communities without individual land titles found themselves relabelled "encroachers" almost overnight. As princely states merged into independent India, the Forest Department's reach grew wider too, and the deprivation forest dwellers endured grew right alongside it.

Later legislation carried the same weight of dispossession forward. The Wildlife Protection Act of 1972, passed to protect wild animals, birds, and plants for ecological and environmental security, created Protected Areas such as national parks, wildlife sanctuaries, conservation reserves, and community reserves, and each of these areas further limited how communities could inhabit or use the forest.

The National Commission on Agriculture recommended in 1976 that India raise its output of industrial wood for forest-based industry, defence, and communications, while also proposing social forestry and the harvest of major and minor forest produce to meet forest dwellers' fuel-wood and other needs. Through the 1960s, 1970s, and early 1980s, the government clear-felled thousands of hectares of natural forest and replaced them with plantations of fast-growing, high-yield teak. Tree cover fell steadily as a result, from 70 million hectares in 1950 to 35 million hectares by 1990.

The Forest Conservation Act of 1980 centralised every decision on diverting forest land to non-forest use in the central government, aiming to halt this depletion. Only the Ministry of Environment could approve such a diversion, whether a state government or a central department proposed it, and any approval came only on condition that the user agency carried out compensatory afforestation, planting an equivalent area of non-forest land, or twice that area if the diverted forest had already degraded.

The National Forest Policy of 1988 replaced the 1952 policy and remains in force today. This policy treated environmental stability as the primary goal for the first time, ahead of economic benefit, and it shifted the state's approach from policing forest dwellers toward managing forests in partnership with them. Forest communities, the stakeholders most central to conservation, had their needs considered for the first time under this framework. The Joint Forest Management scheme, launched in 1990, recognised village communities' role in preserving and managing forest land, and it treated communities' need for fuel-wood, fodder, and small timber as the first claim on forest produce, ahead of any commercial use.

Article 244 of the Constitution protects Scheduled Areas, defined as compact, reasonably sized areas with a predominantly tribal population and marked economic disparity relative to the rest of the country. The Fifth and Sixth Schedules of the Constitution mark out these areas geographically. Fifth Schedule areas fall within Chhattisgarh, Rajasthan, Odisha, Maharashtra, Madhya Pradesh, Himachal Pradesh, Gujarat, Jharkhand, Andhra Pradesh, and Telangana. Tribal communities in India's Northeast, by contrast, hold their own political and administrative structures, reflecting their distinct historical, social, and cultural traditions, and the Sixth Schedule covers their areas within Assam, Meghalaya, Tripura, and Mizoram.

The 73rd Constitutional Amendment of 1992 created decentralised institutions of local governance. The Eleventh Schedule of the Constitution gives village panchayats responsibility for social and farm forestry, minor forest produce, and soil conservation, and the Panchayats (Extension to the Scheduled Areas) Act of 1996 empowers the gram sabha, or village assembly, to govern and manage its own village's natural resources, granting communities ownership rights over minor forest produce and non-timber forest produce across Scheduled Areas.

### How have community property rights developed historically?

Source: https://liberty-lighthouse.vercel.app/topics/property/faq/how-have-community-property-rights-developed-historically/

Early colonial law treated community lands, largely held by indigenous peoples, as land belonging to nobody, or terra nullius. Any land that stood uncultivated, or untitled by European standards, lay open to whichever outsider chose to claim it. The doctrine of discovery let European powers dispossess indigenous people of their traditional lands and claim title over them. Colonial administrators assumed that indigenous communities held no property rights at all, largely because those communities used land collectively rather than through individual title, and this pattern of dispossession played out across the Americas, Australia, much of Africa, and the Indian subcontinent.

The economic argument for individual property rights largely echoes this colonial treatment of indigenous people. The "tragedy of the commons" argument holds that when a resource sits under collective ownership without clear governance rules, each individual gains an incentive to overexploit it at the collective's expense. Classical liberals offer clear individual title as the solution, converting common property into private property to fix the incentive problem. That argument ignores both the social and cultural dimensions of community land holding and a community's own ability to govern itself effectively.

By the mid-twentieth century, international law had evolved to recognise community and customary indigenous tenure as a genuine form of property, not merely as occupation of land by a people living on it. A state could no longer impose a Western title system to extinguish rights indigenous communities had already held for generations.

Elinor Ostrom's empirical research overturned the tragedy-of-the-commons assumption directly. Communities across the world have governed their own commons successfully for generations, through locally crafted rules, monitoring, and graduated sanctions, without needing top-down state control or full privatisation. Collective property need not end in tragedy. It requires, instead, governance institutions that function well and rest on the rule of law.

In the debate between individual and community rights, liberal states should recognise and protect community property rights under law, rather than pushing to individualise them entirely. Insecure or unrecognised community rights remain just as vulnerable to expropriation by a state or an elite as unclear individual title does.

### Is the right to property absolute?

Source: https://liberty-lighthouse.vercel.app/topics/property/faq/is-the-right-to-property-absolute/

The right to property ranks among the most contested civil liberties. The Universal Declaration of Human Rights frames it as a human right, and most democracies recognise it as a fundamental one, yet each country still shapes its definition and its limits to fit its own political, social, and economic conditions. No liberal democracy treats the right to property as absolute, and every one of them allows the state to impose reasonable restrictions in the public interest. The real challenge lies in balancing state interference against an individual's freedom to own and enjoy property.

Classical liberals hold that the right to property is a natural right, born from a person's body and labour, and that this right predates government itself. In a minimal state, government exists to protect that right from violation, whether the violator is the state or a private actor. Economic arguments for property rights focus on their consequences: property rights generate prosperity, they stop the state from concentrating control over resources in itself, and they let people transact freely with each other. Progressive liberals reject the idea that an individual's right to property can run unfettered. Since human beings differ from one another, inequalities, including inequalities in property holdings, will always arise, and government must address them through redistribution.

The current liberal view accepts redistribution, provided it does not undermine the basic functioning of markets and does not expropriate private property arbitrarily or without compensation. The same liberal perspective supports community property rights, and evidence shows that self-governed commons, managed through locally crafted rules, monitoring, and graduated sanctions, can function well without a full private-property regime or top-down state control. Effective rule-of-law mechanisms sustain restrictions on the absolute right to property, provided the rules the state uses to take private or community property remain predictable, transparent, and non-arbitrary. Legal systems that enforce contracts between private individuals through fast, fair conflict resolution build the trust and predictability that protect property rights in turn.

### What does Eminent Domain mean in relation to property rights? What is its current legal status in India?

Source: https://liberty-lighthouse.vercel.app/topics/property/faq/what-does-eminent-domain-mean-in-relation-to-property-rights-what-is-its-current-legal-status-in-india/

Eminent domain, from a Latin term meaning "supreme ownership," rests on the old idea that a king or a government held true ownership over all land within its dominion. The term describes a state's power to acquire or expropriate private property for a valid public purpose, after paying the property's owner just compensation. A state exercising this power might, for instance, take over private land to build a road or a dam. This power ranks among the most controversial restrictions placed on the absolute right to property, and governments around the world hold and exercise it regardless.

The British first introduced eminent domain to India through the Bengal Regulation I of 1824, which authorised the state to compulsorily acquire private property in the Bengal Presidency. Similar laws followed for the Bombay and Madras Presidencies, and separate amendments later brought the railways under these same laws. Act VI of 1857 became the first consolidated land acquisition law for British India, repealing everything that came before it. The Land Acquisition Act of 1894, which applied only to British India, empowered the state to acquire private land for a "public purpose" on payment of compensation, and other Indian states passed their own versions of the law, including the Hyderabad Land Acquisition Act of 1899, the Mysore Land Acquisition Act of 1894, and the Travancore Land Acquisition Act of 1914.

Constitutional protection for the right to property first appeared in the Government of India Act, 1935, which made it illegal for the state to expropriate private property, including land and commercial or industrial undertakings, without a public purpose and full compensation. Article 19(1)(f) and Article 31 of the Indian Constitution later enshrined the right to property as a fundamental right, until the 44th Constitutional Amendment removed both provisions in 1978. Eminent domain now operates under Article 300A instead, as a constitutional right rather than a fundamental one.

After independence, the government kept using the 1894 Act, which set out the procedure for land acquisition and compensation, including acquisitions made on behalf of private companies to encourage industrialisation. Various state governments amended the Act further to suit their own conditions. Several other colonial-era laws carried land acquisition provisions too, including the Telegraphs Act of 1885, the Railways Act of 1890 (replaced in 1989), the Electricity Act of 1910 (replaced in 2003), and the Forest Act of 1927, and post-independence laws such as the Coal Bearing Areas (Acquisition and Development) Act of 1957 and the Special Economic Zones Act of 2005 carried similar provisions.

Two questions dominated land acquisition debates after independence: what counted as a legitimate "public purpose," and what compensation the state owed affected landowners and other stakeholders. Once the Constitution stripped the right to property of its fundamental-right status, and the Ninth Schedule shielded land laws from judicial scrutiny, landowners lost the ability to challenge either question under Article 32 as a violation of a fundamental right.

Abuse of eminent domain rose in step with the fundamental right to property's decline, driven mainly through the Land Acquisition Act of 1894. Public anger grew over forcible land acquisitions carried out often without consent, and over compensation that arrived too small and too late. Parliament, wary of political retribution from the victims of brazen land grabs, eventually passed the Right to Fair Compensation and Transparency in Land Acquisition and Rehabilitation and Resettlement Act, 2013. The new Act required 80% of affected families to consent before the state could acquire land for a private project, and 70% consent for a public-private partnership project. It set compensation at four times the market rate in rural areas and twice the market rate in urban areas, and it added rehabilitation, resettlement, and further entitlements on top. Parliament repealed the 1894 Act in the same stroke.

### What is the Ninth Schedule of the Constitution ?

Source: https://liberty-lighthouse.vercel.app/topics/property/faq/what-is-the-ninth-schedule-of-the-constitution/

The First Constitutional Amendment Act of 1951 inserted the Ninth Schedule into the Constitution through Article 31B. Article 31B declared any law listed in the Ninth Schedule valid even where it violated fundamental rights, and it barred courts from reviewing those laws at all. Constitutional challenges to several states' land reform and property laws had prompted Parliament to pass the Amendment, and Parliament placed 13 laws into the Schedule at the outset.

Central and state governments went on to fill the Ninth Schedule over the following decades with laws covering land redistribution, the nationalisation of private industry, tenancy, and rent and price controls. Governments have also used the Schedule to protect election laws and reservation policies. With the fundamental right to property gone, the Schedule has become a bottomless pit, insulating laws from judicial scrutiny regardless of their quality or legality. It now holds 284 laws, including roughly 150 amendment acts.

The Kesavananda Bharati case of 1973, which laid down the Basic Structure Doctrine, never discussed Article 31B, the source of the Ninth Schedule, and the right to property played no part in that doctrine's development at all. In Waman Rao v Union of India (1981), the Supreme Court upheld the validity of both the First Amendment and the Ninth Schedule it created. The Court chose not to allow any challenge to laws inserted before 24 April 1973, the date of the Kesavananda decision, because it did not want to unsettle claims and titles that had already formed on the understanding that Ninth Schedule laws could not be challenged under Articles 14, 19, and 31.

In I.R. Coelho v State of Tamil Nadu (2007), the Supreme Court ruled that Ninth Schedule laws inserted after 1973 remained subject to the Basic Structure Doctrine. The Court then equivocated in Glanrock Estate (P) Ltd. v The State of Tamil Nadu (2010), hesitating to apply Coelho's own principles to another post-1973 law placed in the Schedule. The Court held instead that a law in the Schedule would fall only if it breached certain overarching principles, such as secularism, democracy, separation of powers, judicial review, the rule of law, or egalitarian equality.

These rulings on the Ninth Schedule and fundamental rights carry little relevance to property today, since property no longer counts as a fundamental right at all. Parliament had felt the need to shield "progressive" land reform legislation from judicial scrutiny only because the right to property could once be asserted as a fundamental right. The rent, black market, and price control laws added to the Schedule during India's socialist planned-economy years carry little relevance to today's economy either.

Laws kept entering the Schedule even after Kesavananda made clear that the right to property was not even a basic feature of the Constitution, though the pace of new insertions has slowed over the last three decades. The Supreme Court, despite several opportunities, has never struck the Ninth Schedule from the Constitution, and no government since has attempted to review whether the Schedule still serves any purpose.

### What is the role of the Forests Rights Act in recognising property rights of indigenous communities?

Source: https://liberty-lighthouse.vercel.app/topics/property/faq/what-is-the-role-of-the-forests-rights-act-in-recognising-property-rights-of-indigenous-communities/

The Joint Forest Management Scheme of 1990 and the Panchayat (Extension to Scheduled Areas) Act of 1996 both tried to devolve forest governance, and both failed to give indigenous communities and other forest dwellers real security of tenure. Top-down decentralisation left bureaucrats with excessive control over decisions, created legal confusion through contradictory state forest laws, undermined the gram sabha's authority, and opened the door to elite capture. The Constitution protects land under the Fifth and Sixth Schedule Areas from transfer to anyone outside the community, but that protection never stopped states from exercising eminent domain over the same land. Without real power on the ground, indigenous communities found their consent ignored whenever the state moved to take over a forest.

Against this history, the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006, marked a genuine turning point. The Act adopted a rights-based approach and opened space for democratic, inclusive forest governance. It addressed the historic dispossession of forest-dwelling indigenous populations and other traditional forest dwellers, legally defined as Scheduled Tribes and Other Traditional Forest Dwellers, by granting these communities legal recognition of their property rights over forest land they had occupied and cultivated for generations. Crucially, the Act built its recognition process from the bottom up: claims begin at the gram sabha, the lowest unit of governance, and move upward through a democratic, transparent process set out in the Forest Rights Rules of 2007.

The Act recognises three broad types of property right for forest-dwelling Scheduled Tribes and Other Traditional Forest Dwellers. Individual Forest Rights grant families formal title to land they have occupied for self-cultivation or habitation, and they extend habitat rights to particularly vulnerable tribal groups as well. Community Forest Rights give the gram sabha ownership over forest produce, including all minor forest produce such as bamboo, along with the right to collect, use, process, and sell these products. Community Forest Resource Rights give the gram sabha the right to protect, conserve, regenerate, and manage its village's forest resources for sustainable use.

Every right holder carries a duty to protect the forest, its biodiversity, its catchment areas, and its water resources in return. The Act also permits forest land, up to one hectare, to be used for infrastructure such as roads, electricity or telephone lines, a community health centre, or a school, provided the gram sabha approves the use. Together, these provisions build a framework for decentralised forest management with the gram sabha, made up of the village's own forest-dwelling Scheduled Tribes and Other Traditional Forest Dwellers, sitting at the centre of every decision.

Two decades on, forest dwellers are still fighting to make these rights real. The activists and non-governmental organisations who campaigned for the law soon discovered that implementing it in letter and spirit would take a much longer fight. Beneficiaries and village institutions, carrying a long history of marginalisation, oppression, and illiteracy, struggled to confront the entrenched interests inside the forest bureaucracy. The claims process itself proved burdensome, and it demanded documentation that most claimants' largely undocumented lives simply could not produce. The law asked a bureaucracy built around appropriation to operate an entirely different regime, one built around property rights, and officials struggled both to grasp the law's finer points and to accept the loss of authority the law demanded of them.

### What was the pre-independence legal status of community property rights in India?

Source: https://liberty-lighthouse.vercel.app/topics/property/faq/what-was-the-pre-independence-legal-status-of-community-property-rights-in-india/

Indigenous and tribal communities across the Indian subcontinent organised themselves for centuries around their own distinct identities and cultures. Advanced agricultural societies gradually displaced these hunter-gatherer communities across large parts of India's moist tropical forest tracts, taking over territory that had sustained food gatherers whose survival depended on the forest and its wild animal populations.

This colonisation of northern India's fertile land drove large surpluses in agricultural productivity across the eight centuries from 500 BC to 300 AD. The Mauryas and Kushanas in the north, and the Chalukyas and Sangam Cholas in the peninsula, focused chiefly on pushing the frontier of cultivated land beyond their existing territory, continuing the same conflict between food gatherers and food producers that had run for centuries before them.

Until roughly the early sixteenth century, local communities still controlled forests for food, fuel, fodder, medicine, and timber, even as ownership of the forest land itself sat with local princes and chiefs. Princes carved out elephant forests and hunting preserves as the earliest instances of formal state conservation, cutting these reserves from the same uncultivated land and forest that food-gathering tribes had long controlled, and likely stripping some tribal rights over that land in the process. In some cases, the state went further and cleared forest outright to establish new agricultural settlements.

India had no formal forest policy before the British East India Company arrived. Individual princely states managed forest resources according to their own local approaches instead. Most protected specific pockets of forest, either as hunting grounds known as shikargahas or for defence purposes, and local communities had developed their own informal norms for using and protecting the forest around them.

Britain turned to Indian teak for shipbuilding and railway construction in the eighteenth century, as oak supplies in England ran short and the Royal Navy needed timber. In the Company's early years, forests and other wasteland still counted as community property belonging to whoever lived within their boundaries, and the Company left customary use largely undisturbed.

The Charter of Indian Forestry, passed in 1855, became India's first formal forest policy and sketched an early outline for forest conservation. The British Crown took direct control from the Company and created the Forest Department in 1864, and the Indian Forest Act of 1865 followed as the first real piece of forest legislation, establishing a legal framework for the commercial exploitation of forests. Even the produce that communities extracted for their own use became a source of government revenue under this framework, as the new state monopoly excluded or sharply limited forest communities from any regulated forest area.

The Indian Forest Act of 1878 tightened this control further, regulating the extraction and transit of forest produce closely and raising penalties for violations. The Act sorted forests by their exploitation value into Reserved, Protected, and Village categories, and it either denied local communities access to these forests entirely or bound that access tightly to state control. The state could seize villagers' rights, directly or indirectly, wherever the law allowed, and it could reclassify any forest from one category to another whenever it chose. The Act also drew a new distinction between "rights" and "privileges," a distinction designed to erase centuries of customary forest use: it recognised as "rights" only what appeared in official records, and it downgraded everything else, including grazing and firewood collection, to "privileges," mere concessions the state could grant or withdraw.

The Forest Policy of 1894 declared every forest in British India state property and set the rules governing forest users' remaining rights and privileges. It ranked the claims of cultivation above the claims of forest preservation, so wherever a demand arose for indigenous land, the state required that land relinquished.

The Indian Forest Act of 1927 pursued timber exploitation without disguise. The state claimed a monopoly over declaring both government and private forests, and it exercised that monopoly by strictly regulating, and often extinguishing outright, the traditional rights forest communities had long held, including their right to forest produce itself. Fines and penalties fell on anyone who trespassed or removed forest produce without permission, the government collected revenue on produce forest dwellers took out, and officials leased forest tracts to contractors for plantations and agriculture, all of which damaged the habitat and livelihood of the communities living there.

The Indian Forest Act of 1927, the Forest Policy of 1894, and the Land Acquisition Act of 1894 together cleared forest land for agriculture, for plantation crops such as indigo, and for railway lines and roads. Large-scale forest destruction followed, and forest-dwelling communities were, inevitably, driven off the land that had sustained them.

### What was the status of Property Rights in pre-Independence India ?

Source: https://liberty-lighthouse.vercel.app/topics/property/faq/what-was-the-status-of-property-rights-in-pre-independence-india/

The earliest record of private property in India appears in the Manusmriti, or the Code of Manu, a body of ancient Sanskrit texts that set out religious and legal duties for Hindus and dates from roughly the second century BCE to the second century CE. Judges of the British Empire often turned to classical Hindu law to settle property disputes. English common law later smoothed out the conflicting texts and the divergent customary rules that prevailed across India, and it codified the more troublesome elements of a Hindu's right to property and its transfer.

Muslim rulers, who governed across the subcontinent from roughly the tenth to the eighteenth centuries, introduced the Jagirdari system, under which nobles held temporary land grants called jagirs. In exchange, these nobles collected land revenue from farmers and funnelled it into the emperor's military, paying for soldiers, horses, and the rest of an army's upkeep. As Mughal rule weakened, jagirdars became de facto owners of their jagir land. British rulers inherited this Mughal land settlement system and kept dealing with the jagirdars for the revenue they could still generate, partly because staying engaged with this now-powerful group made good political sense.

The British went on to build three revenue systems, and these evolved into the land tenure systems that independent India inherited. In 1793, the British government granted Permanent Settlements of land to zamindars, the region's landed aristocrats, across Bengal, and it later extended the same settlement to Bihar, Madras, most of present-day Odisha, Uttar Pradesh (except Avadh and Agra), and Rajasthan (except Jaipur and Jodhpur).

Other parts of India received modified versions of these settlements, including short-term land alienations. The Ryotwari system, introduced in Madras in 1792 and in Bombay in 1817-18, governed most of South India, including present-day Maharashtra, Karnataka, Tamil Nadu, Kerala, Andhra Pradesh, most of Madhya Pradesh, and Assam, along with the princely states of Jaipur and Jodhpur in Rajasthan. The Mahalwari system, introduced between 1820 and 1840, governed the two former provinces of Punjab (now split between Pakistan and India), present-day Haryana, parts of present-day Madhya Pradesh and Orissa, and the princely states of Avadh and Agra, now part of Uttar Pradesh.

The term "zamindar" broadly described the intermediaries across these varied tenure systems: officials who administered land on the colonial rulers' behalf without owning it themselves. Tenants who actually tilled the land answered to these zamindars. Under Permanent Settlement, zamindars paid revenue fixed in perpetuity to the East India Company and later to British rulers directly, at rates higher than what they had paid before 1793.

The British, ironically, laid the actual ground for recognising private property rights in India, by imposing English common law onto a country where multiple, often conflicting land-holding patterns already existed. The Land Acquisition Act of 1894 became the substantive law governing eminent domain, the common law doctrine holding that the state remains the ultimate owner of all land within its territory and may compulsorily acquire private property for a public purpose, provided it pays compensation. The Government of India Act of 1935 later codified the right to property, not as a fundamental right, but by requiring that eminent domain expropriation proceed only through constitutionally valid statutory law.

## Syllabus

**Books**

* Sanjoy Chakravorty, 

  *The Price of Land: Acquisition, Conflict, Consequence*

  , Oxford University Press (2013)

* Granville Austin, 

  *Working a Democratic Constitution: A History of the Indian Experience*

  , Oxford University Press (1999)

* Sudhir Krishnaswamy, 

  *Democracy and Constitutionalism in India: A Study of the Basic Structure Doctrine*

   (2009)

* T.R. Andhyarujina, 

  *The Kesavananda Bharati Case: The Untold Story of Struggle for Supremacy by Supreme Court and Parliament*

   (2011)

* Elinor Ostrom, 

  *Governing the Commons: The Evolution of Institutions for Collective Action*

   (1990)

* Madhav Gadgil & Ramachandra Guha, 

  *This Fissured Land: An Ecological History of India*

  , Oxford University Press (1992)

* Sharad Singh Negi, 

  *Indian Forestry Through the Ages*

  , Indus Publishing (1994)

* N.C. Saxena, 

  *Forests, People and Profit: New Equations for Sustainability*

  , Nataraj Publishers (1995)

* John Locke, 

  *Second Treatise of Government*

   (1689)

* Robert Nozick, 

  *Anarchy, State, and Utopia*

   (1974)

* Friedrich Hayek, 

  *The Constitution of Liberty*

   (1960)

* Friedrich Hayek, 

  *Law, Legislation and Liberty*

   (1973)

* Milton Friedman, 

  *Capitalism and Freedom*

   (1962)

* John Rawls, 

  *A Theory of Justice*

   (1971)

* Richard Epstein, 

  *Takings: Private Property and the Power of Eminent Domain*

   (1985)

* Jeremy Waldron, 

  *The Right to Private Property*

   (1988)

* Amartya Sen, 

  *Development as Freedom*

   (1999)

* Ramachandra Guha, 

  *The Unquiet Woods*

   (1989)

* Hernando de Soto, 

  *The Mystery of Capital*

   (2000)

* A.L. Gandhi, 

  *Right to Property: Its Changing Dimensions*

   (1985)

* Sanjiv Agrawal, 

  *The Indian Federalists: The Original Will of India's Founding Fathers*

   (2014)

\
**Academic Papers**

* Jaivir Singh, "Separation of Powers and the Erosion of the 'Right to Property' in India," 

  *Constitutional Political Economy*

   17 (2006): 303–324

* Jaivir Singh, "(Un)Constituting Property: The Deconstruction of the 'Right to Property' in India," CSLG Working Paper Series, CSLG/WP/04-05

*   [A Word on Eminent Domain](https://www.ielrc.org/content/a0902.pdf)

   — Usha Ramanathan, International Environmental Law Research Centre, in Lyla Mehta (ed.), 

  *Displaced by Development – Confronting Marginalisation and Gender Injustice*

   (Sage, 2009)

* Garrett Hardin, "The Tragedy of the Commons," 

  *Science*

   (1968)

* Trupti Parekh & Parth J. Shah, "Keepers of Forests: Foresters or Forest Dwellers?" in 

  *Terracotta Reader: A Market Approach to the Environment*

  , Centre for Civil Society (2005)

* Arnab Kumar Hazra, "History of Conflict over Forests in India: A Market-Based Resolution," Working Paper Series, Julian L. Simon Centre for Policy Research, Liberty Institute (2002)



**Reports**

* Law Commission of India, 

  *Tenth Report: Law of Acquisition and Requisition of Land*

   (1958)

* National Forest Commission, 

  *Report, Chapter Two: Forests in India*

   (2006)

# Public Choice

Source: https://liberty-lighthouse.vercel.app/topics/pubc/

Understanding why governments do what they do, from subsidies and stalled reforms to why good policies fail in practice

## FAQs

### Why are government officials rarely rewarded or penalised based on their performance?

Source: https://liberty-lighthouse.vercel.app/topics/pubc/faq/why-are-government-officials-rarely-rewarded-or-penalised-based-on-their-performance/

In most organisations, performance shapes careers. People who deliver results advance; those who consistently underperform face consequences. India’s civil services operate on a different logic — one built around seniority rather than outcomes.

In the IAS and most state cadres, promotions follow structured timelines based primarily on years of service. An official who transforms a district and one who coast through the same tenure will often follow the same career path.

The data on actual accountability is revealing. According to a 2017 Department of Personnel and Training report, since 2014, only one IAS officer had been prematurely retired, ten had been deemed to have resigned, five had had their pensions cut, and eight had had their remuneration reduced across a cadre of thousands over three years. In 2018, disciplinary proceedings were active against just 36 IAS officers. Yet [581 corruption charges were filed against IAS officers](https://timesofindia.indiatimes.com/blogs/masala-noodles/how-ias-officers-can-let-off-their-colleagues-officially/) in 2020–21 alone. To understand the gap, we need to look at the structure they operate in.

Article 311 of the Constitution of India provides civil servants with significant protection against dismissal, requiring a formal inquiry before any major disciplinary action. These protections exist for good reasons as they are necessary to shield officials from arbitrary political pressure. But they also make accountability slow and expensive to pursue, so in practice, it rarely happens.

Senior officials have additional legal protection. Prosecuting an IAS officer under the Prevention of Corruption Act requires prior government sanction, which must be routed through the state government, potentially creating an obvious conflict of interest when the official was acting on government instructions.

There is also a perverse asymmetry in what actually gets scrutinised. An official who makes a procedural error, i.e., a wrong countersignature or a procurement guideline violation, is most likely to face an audit risk and potential vigilance action. But an official whose programme fails to improve literacy rates, reduce malnutrition, or deliver on any stated goal faces almost none. Predictably, officials protect themselves procedurally rather than chase results.

### Why can a policy seem ‘good’ and still cause harm?

Source: https://liberty-lighthouse.vercel.app/topics/pubc/faq/why-can-a-policy-seem-good-and-still-cause-harm/

Most policies are judged by what they set out to do. A scheme that promises to help farmers, improve health, or create jobs sounds good and is often genuinely well-intentioned. But good intentions are not the same as good outcomes. Policies regularly produce consequences their designers never anticipated, and those consequences rarely draw as much attention as the benefits that were promised at the start.

The economist Frédéric Bastiat called this the distinction between the seen and the unseen. The seen effects are direct and visible: the subsidised bill, the wage payment, and the free textbook. The unseen effects surface later and elsewhere: the market distortions that discourage private investment, the perverse incentives that grow up around any programme, the costs borne by people the scheme was never about. Because the seen arrives first and the unseen arrives quietly, a policy can look like a success long before its full effects are in.

Delhi's winter smog shows how these unseen effects can compound across decades of well-meaning policy. The story is usually told as farmers burning stubble. The fuller story runs back forty years.

In the 1980s, Green Revolution incentives pushed Punjab farmers toward rice and wheat, away from traditional crops. MSP guarantees and [free electricity for groundwater pumping](https://indianexpress.com/article/explained/explained-how-free-farm-power-drains-punjabs-coffers-and-water-reserves-5870813/) made intensive rice cultivation viable. The seen effect was food security. The unseen effect was a quietly depleting aquifer.

When groundwater depletion finally became impossible to ignore, Punjab responded with the [Preservation of Subsoil Water Act in 2009](https://agri.punjab.gov.in/sites/default/files/Pb_preservation_of_Subsoil_Act%2C2009.pdf), delaying rice transplanting to align it with the monsoon so that less groundwater would be drawn. The seen effect was relief on the water table. The unseen effect was a calendar problem: the later transplanting meant a later harvest, leaving farmers days rather than weeks to clear their fields before the wheat sowing window closed. The fastest way to clear a field in days is to set it alight.

Each intervention addressed a real problem. Each one created the conditions for the next. The stubble burning that chokes Delhi every November is not farmers being reckless. It is farmers responding rationally to a sequence of incentives the government itself built, one layer at a time.

So the question a policymaker should ask is not simply "what does this scheme do?" It is "what does it do to everyone it touches, including those it was never designed for, and what will it look like in ten years?" That is a much harder question. It is also the right one.

### Why do good policies so often fail at the point of implementation?

Source: https://liberty-lighthouse.vercel.app/topics/pubc/faq/why-do-good-policies-so-often-fail-at-the-point-of-implementation/

The usual explanation is that officials are incompetent or corrupt. Both can be true, but neither is the deep problem. A well-designed policy fails because of the structure of rules and the knowledge that the people carrying it out work within.

Consider what happened during the COVID-19 lockdown in 2020. The government sensibly permitted inter-state trucking for essential goods to keep supply chains running. But the trucks did not move. It took officials in Delhi weeks to work out why, and the answer was obvious to anyone actually on the highways: the dhabas and roadside repair shops had been shut along with everything else. Without anywhere to eat, rest, or fix a breakdown, no driver can cover 600 kilometres through the night. The policy allowed trucking. It just failed to account for the basic [conditions ](https://www.hindustantimes.com/india-news/in-relief-to-truckers-govt-opens-highway-repair-shops-dhabas/story-XGuG3yuEbNWPZpIYziUIZM.html)that make trucking possible.

The economist Friedrich Hayek called this the [knowledge problem](https://www.econlib.org/library/Essays/hykKnw.html): no central authority can gather and process all the dispersed, local, and tacit knowledge that determines what works in practice. The officials who wrote the lockdown rules did not drive trucks and did not consult anyone who did. They assumed they understood the system, and the supply chain broke before they found out they did not. 

This is not a problem confined to emergencies. Policies are designed in Delhi or the state capitals and then implemented across thousands of districts, blocks, and villages, each with its own conditions. A scheme built around a generalised idea of the rural household meets realities in Vidarbha, Bundelkhand, and coastal Odisha that its designers never imagined. That gap is not a failure of effort. It is a limit on what centralised design can know.

Incentives then widen the gap. Officials who implement a programme are judged on compliance: were the procedures followed, the reports filed, the targets met on paper? They are rarely judged on whether the programme worked. The Swachh Bharat Mission shows both failures at once. The government declared that toilets had been built for all rural households and open defecation had been eliminated. But a Comptroller and Auditor General audit [found ](https://www.orfonline.org/expert-speak/odf-status-claims-vs-reality-swachh-bharat-mission#:~:text=As%20the%20CAG%20report%20mentions,soak%20pits%2C%20or%20incomplete%20construction.)that in 41 of 120 Gram Panchayats it tested in Gujarat, the toilets stood unused because no water connection had ever been extended to them. The knowledge problem recurs here: a toilet without water is a structure, not a sanitation system, and the local condition that made it useless was invisible from the centre. The incentive problem completes the picture. The official's task was to build the physical structure, and it was completed. Whether anyone used the toilet was nobody's responsibility, and the gap between toilets built and toilets used extended well beyond Gujarat.

So the pattern holds wherever the people who design and deliver a policy bear no personal cost when it fails. As long as an official is rewarded for following the procedure rather than for solving the problem, the distance between what a policy promises and what it delivers will remain. A policy is only ever as good as the incentives facing the people who carry it out.

### Why do governments offer subsidies and freebies, especially around elections?

Source: https://liberty-lighthouse.vercel.app/topics/pubc/faq/why-do-governments-offer-subsidies-and-freebies-especially-around-elections/

Subsidies make good political sense, even when they are bad fiscal policy. To see why, start with the gap between who benefits and who bears the cost.

Whether it is a loan waiver, a subsidised electricity bill, or a direct cash transfer, the person receiving it feels the benefit every month. The cost is spread across hundreds of millions of taxpayers and buried in a budget document almost no one will read. A visible, concentrated benefit set against an invisible, dispersed cost is the basic engine of subsidy politics. The recipient has every reason to reward the government that delivered it. The taxpayer, losing a few rupees among many, has almost no reason to object.

And the cost is higher than the headline figure suggests. India's central government subsidy bill reached [roughly ](https://www.deccanherald.com/business/union-budget/subsidy-bill-shoots-up-in-2023-24-to-rs-562-lakh-crore-1186847.html)Rs 5.62 lakh crore in 2023-24. At the state level, electricity subsidies alone accounted for 97 per cent of Rajasthan's subsidy outlay in 2021-22 and 80 per cent of Punjab's, according to [PRS ](https://prsindia.org/budgets/discussionpapers/state-of-state-finances-2023-24)data. The true burden runs higher still once the distortions caused by taxation are counted. Economist Vijay Kelkar, in his 2017 CD Deshmukh Memorial Lecture, estimated that every rupee the government spends may cost society around three rupees once those distortions are accounted for. The figure is one economist's estimate rather than a settled number, but even a fraction of it implies that the real cost of a subsidy far exceeds the line item in the budget.

India's first-past-the-post electoral system sharpens these incentives. A party does not need a majority to win a seat, only more votes than its nearest rival. That makes it more valuable to lock in a decisive bloc of voters than to offer broad improvements that benefit everyone a little. Free power for farmers, cash transfers to women, and loan waivers for agricultural households: each is designed to mobilise a group large and cohesive enough to swing a constituency. Diffuse benefits win gratitude from no one in particular. Targeted ones win a voting bloc.

The 2025 Delhi election saw all three major parties [outbid ](https://www.livemint.com/elections/assembly-elections/delhi-elections-2025-who-is-offering-more-money-freebies-woman-students-elderly-pension-aap-bjp-or-congress-11737624472180.html)each other on welfare packages and freebies. That was not an aberration. It was the logical outcome of a system in which visible benefits win votes, and fiscal costs are someone else's problem.

None of this means subsidies are always wrong. Many address genuine needs, and well-targeted transfers can do real good. The problem is that political incentives push governments to expand subsidies beyond what is sustainable, and to resist reforming them even when they deliver poorly. What is easy to announce is very hard to withdraw.

### Why do politicians announce new schemes when similar ones already exist, instead of fixing the existing scheme?

Source: https://liberty-lighthouse.vercel.app/topics/pubc/faq/why-do-politicians-announce-new-schemes-when-similar-ones-already-exist-instead-of-fixing-the/

Because a new scheme is visible and a repair is not. Announcing a programme lets a leader give it a name, hold a launch event, and claim it as his own initiative. Quietly improving an existing one earns none of that. The work is harder, the credit is thinner, and the photograph is worse.

There is a second reason, less obvious but more powerful. Fixing a scheme means first admitting it is broken. That requires pointing to leakages, administrative failures, and poor implementation, and those failures usually trace back to earlier decisions the same political class is responsible for. Raghuram Rajan made a version of this point in Fault Lines: those in power are reluctant to expose systemic fault lines, because the fault often leads back to them. A new launch sidesteps the problem entirely. It signals action without conceding that anything went wrong.

India's policy history reads as a long demonstration of this. The Total Sanitation Campaign became the Nirmal Bharat Abhiyan, which became the [Swachh Bharat Mission ](https://swachhbharatmission.gov.in/)in 2014, each a rebrand of essentially the same sanitation goal. In 2025, MGNREGA, after nearly two decades, was replaced by the Viksit Bharat Gram Yojana. The underlying objective rarely changes. The name, the branding, and the minister taking credit do.

The choice also serves a narrower electoral logic. A new scheme can be aimed at a specific bloc, farmers, women, a particular region, in a way that patching an old programme cannot. Fixing leaky pipes in an existing welfare system mobilises no one. Announcing a fresh transfer to a target group mobilises exactly the voters a party needs.

Underneath all of this is administrative reality. Indian schemes pass through many hands: central ministries design them, states adapt them, and districts implement them. When something fails, the failure is smeared across that chain, and repairing it demands coordination, procedural change, and sustained monitoring, none of which produces a quick or attributable win. Worse, neglected programmes tend to drift from their original purpose and swell in cost over time, a problem of scope creep examined in the next question.

So the incentive runs one way. The new scheme is seen: named, launched, and credited. The patient reform of the old one is the unseen: slow, awkward, and invisible at the ballot box, even when it would do more good. Governments respond to what voters can see, and a launch is far easier to see than a fix.

### Why do politicians focus on visible, short-term actions rather than long-term reforms?

Source: https://liberty-lighthouse.vercel.app/topics/pubc/faq/why-do-politicians-focus-on-visible-short-term-actions-rather-than-long-term-reforms/

A politician who may not hold the seat in five years has little reason to begin something that pays off in ten. This is the core of it, and it is a problem of incentives, not character. The reforms with the most lasting benefits tend to mature slowly, often beyond a single term, while their costs, disrupting organised interests, creating short-term uncertainty, arrive early and land squarely at the next election.

India makes this calculation sharper than most democracies, because Indian politicians are unusually likely to lose. [Research ](https://carnegieendowment.org/research/2024/05/india-election-incumbent-candidates?lang=en)by the Carnegie Endowment finds that since 1967, returning members have made up only about 38 per cent of the Lok Sabha. A Business Standard [analysis ](https://www.business-standard.com/elections/lok-sabha-election/incumbency-and-churn-ii-india-s-first-time-mps-more-than-its-most-peers-124053001221_1.html)of the 2024 election found that nearly half of all elected MPs were first-timers, a higher rate of turnover than in most comparable democracies. A politician facing those odds has every reason to secure visible, creditable wins now, rather than plant something whose harvest a successor will reap. 

The electoral system reinforces the same instinct. First-past-the-post voting in single-member constituencies means a party needs only more votes than its nearest rival, not a majority. That rewards mobilising a specific bloc over pursuing broad improvements that benefit everyone a little and energise no one. A reform whose gains are real but slow and diffuse competes poorly against an action that can be announced, credited, and felt before polling day.

The distribution of winners and losers further tilts the field. Those who stand to lose from structural reform, protected incumbents, entrenched industries, and organised labour, know precisely what is at stake and can mobilise at once. Those who would gain are usually scattered and unorganised, and slow to notice a benefit that arrives years later. This asymmetry biases politics toward the status quo, and the short electoral horizon ensures the bias is rarely overcome.

None of this means every politician always chooses the short term. But the general pull, especially in India's competitive and high-churn environment, is toward what can be seen, credited, and felt before the next vote. The long reform that would matter more is precisely the one no one is rewarded for starting.

### Why do some government projects in India take far longer and cost far more than expected?

Source: https://liberty-lighthouse.vercel.app/topics/pubc/faq/why-do-some-government-projects-in-india-take-far-longer-and-cost-far-more-than-expected/

Government projects overrun so reliably that overruns have become the norm rather than the exception. The Ministry of Statistics and Programme Implementation's flash [report ](https://mospi.gov.in/sites/default/files/publication_reports/Flash_Report_March_2024.pdf)for March 2024 found that of 1,839 central projects worth Rs. 150 crore or more, 779 were running late, with cost overruns exceeding Rs. 5 lakh crore over their original budgets. The average delay was around 42 months, three and a half years past schedule.

Before diagnosing the cause, it is worth establishing that India is not uniquely bad at this. The Oxford economist Bent Flyvbjerg [studied ](https://sites.krieger.jhu.edu/iae/files/2020/10/Cost-Overruns-in-Infrastructure-Projects-10-04-2020.pdf)258 major transport infrastructure projects across 20 countries and found that 86 per cent exceeded their original cost estimates. The pattern held everywhere: over budget, over time, consistent across project types, geographies, and historical periods stretching back nearly a century. Most striking of all, the accuracy of cost estimates has not improved over that century. Decades of advances in project management have left the underestimation exactly where it started. That points to something structural rather than accidental.

So why does this happen everywhere and repeatedly? There are two distinct problems at the source of this. The first is a bias in the cost estimates made at the approval stage, and it is as much a behavioural problem as a policy one. There is a powerful incentive to underprice a project when seeking approval, because a lower estimate is easier to justify and fund. By the time the true cost surfaces, construction is underway, and cancellation has become politically unthinkable. This is not always deliberate. Often, it is genuine optimism about timelines, geology, land acquisition, or coordination, the same optimism with which you buy the dumbbells and skipping rope, certain you will exercise after work each day, and then watch the equipment gather dust. The difference is that when the optimism is strategic, when a lower number wins the contract, the incentive to underestimate never goes away. 

The second problem appears during execution: accountability is weak. In a private firm, a manager who repeatedly misses deadlines faces consequences, such as lost contracts, demotion, or dismissal. In government, the consequences are far softer. Slipped timelines get revised rather than investigated. Budgets that balloon get topped up rather than scrutinised. Officials are rarely rewarded for delivering on time or penalised for failing to do so, so there is little to press anyone toward either.

The pattern shows up in specific projects. The Mumbai-Ahmedabad High Speed Rail, launched in 2017 with a 2023 target, saw land acquisition drag across three states well past its deadline. The Delhi-Meerut Regional Rapid Transit System spent [years ](https://ncrtc.in/corridors/delhi-ghaziabad-meerut-corridor/)tangled in approvals and funding delays before construction could gain momentum. These are not outliers. They are representative of the hundreds of projects tracked in the government's own monitoring data.

When delay carries no real consequence, delay stops being a failure and becomes the default. Fixing that means changing the incentives that surround a project, not simply adding another layer of management on top of it.

### Why does the government keep running loss-making public enterprises?

Source: https://liberty-lighthouse.vercel.app/topics/pubc/faq/why-does-the-government-keep-running-loss-making-public-enterprises/

Because the people who benefit from keeping them open are not the people paying for the losses.

Before asking why loss-making enterprises stay open, it helps to understand why Public Sector Undertakings (PSUs) exist at all. Some sectors have enormous capital requirements and limited scope for returns, so they attract little private investment. Many PSUs were also created after Independence to generate employment and signal economic self-reliance. From the government's point of view, then, a loss-making PSU is not automatically pointless. It may still be providing something that private firms will not. The harder question is why governments persist with these enterprises even when the original justification no longer holds and private competitors already operate in the same sector.

The numbers tell part of the story. According to the [Department of Public Enterprises’ 2023–24 survey](https://dpe.gov.in/en/public-enterprises-survey-2023-24), 58 of India’s 272 operating central PSUs posted net losses totalling Rs. 21,000 crore in a single year. That money comes from taxpayers. But spread across hundreds of millions of people, no individual loses enough to make fighting back worthwhile. Imagine 50 paise vanishing from your account each month. You would not notice. Yet 50 paise from every Indian adds up to an enormous sum. This is the asymmetry at the heart of the problem, often called the problem of concentrated benefits and dispersed costs: the gains from keeping a loss-making PSU alive are concentrated among a small, organised group with every reason to lobby hard. In contrast, the costs are scattered so thinly that no one is motivated to resist.

This plays out visibly with unions. In the past, when governments have tried to disinvest from PSUs, employee unions have organised nationwide [protests](https://psuwatch.com/latestnews/bms-holds-protests-pan-india-against-govts-privatisation-policy). Any government that moves toward privatisation faces resistance from all sides at once.

Bureaucratic incentives also affect the possibility of change. Ministries that oversee PSUs derive budgets and institutional weight from them. Wind down an enterprise, and the department supervising it shrinks too. Officials thus acquire a personal stake in keeping these firms alive, independent of any judgment about whether the firms are worth keeping.

Loss-making PSUs survive, then, not because decision-makers fail to see the problem but because the incentive to act on it is weak. The people who would gain from reform are many and dispersed. The people who would lose are few and organised. In politics, that is usually a decisive imbalance.

### Why is it so difficult to hold politicians accountable for what they actually deliver?

Source: https://liberty-lighthouse.vercel.app/topics/pubc/faq/why-is-it-so-difficult-to-hold-politicians-accountable-for-what-they-actually-deliver/

Indian voters throw incumbents out all the time, and yet poor policy persists. That paradox is the heart of the problem. [Research ](https://carnegieendowment.org/research/2024/05/india-election-incumbent-candidates?lang=en)by the Carnegie Endowment finds that since 1967, returning members have made up only about 38 per cent of the Lok Sabha, and nearly half of the MPs elected in 2024 were first-timers, a higher rate of turnover than in most comparable democracies. Whatever else is wrong, it is not that voters are passive.

The problem is that electoral accountability and performance accountability are not the same thing. Voters punish governments, but not always for the right reasons. A government may lose an election because of a drought it could not control, and win one despite systematically failing to improve public services, because it ran effective patronage networks. Elections measure satisfaction and alliance, not whether a government actually delivered.

Part of why is that responsibility is genuinely hard to locate. Indian governance runs across three levels, central, state, and local, with overlapping mandates. When schools underperform, roads crumble, or the water supply fails, a voter often cannot tell who is to blame, and politicians exploit the confusion. Positive outcomes are claimed; negative ones are attributed to a predecessor, to another level of government, or to circumstances beyond anyone's control.

Underneath this sits an information problem. Citizens can see outcomes but rarely how decisions were made, and the record that would tell them sits in hundreds of pages of public documents that no individual has any reason to read. So a government can report rising school enrolment while learning outcomes fall. It can announce thousands of new health centres while the quality of care inside them declines. The thing that is easy to measure and claim credit for, buildings, enrolment, and launches, is rarely the thing that actually matters, and the gap between the two is where accountability quietly disappears.

This is why elections alone are not enough. Accountability for performance works only when it is built into the rules of the game, through independent measurement of the outcomes that count. Left to depend on politicians measuring themselves, it does not happen, because no one is rewarded for publishing the number that ends their own career.

## Videos

### How India's Voting System Fuels Freebie Politics 

Source: https://liberty-lighthouse.vercel.app/topics/pubc/videos/how-indias-voting-system-fuels-freebie-politics/

Free bus rides for women, free power for farmers: India's welfare spending keeps favouring narrow groups over universal public goods. This short explores how first-past-the-post elections push politicians toward targeted freebies over broad-based development.

### How Policy Created Delhi's Smog

Source: https://liberty-lighthouse.vercel.app/topics/pubc/videos/how-policy-created-delhis-smog/

Every winter, Delhi's air turns toxic, and farmers are often blamed for stubble burning. This short explores how decades of well-intentioned government policies helped create the incentives behind the problem.

### Why Elections Alone Can't Fix Bad Policy in India 

Source: https://liberty-lighthouse.vercel.app/topics/pubc/videos/why-elections-alone-cant-fix-bad-policy-in-india/

Corruption charges pile up, but IAS dismissals remain almost unheard of. This short explores how constitutional protections and process-focused accountability let Indian civil servants escape consequences for failed outcomes.

### Why Good Policies Fail Even When They're Sensible

Source: https://liberty-lighthouse.vercel.app/topics/pubc/videos/why-good-policies-fail-even-when-theyre-sensible/

The 2020 lockdown let food trucks keep moving, yet they stopped anyway, because policy didn't allow the dhabas and repair shops to stay open. This short explores how governments fix the big visible thing, the truck, the toilet, and miss the small thing that actually makes it work.

### Why India Keeps Renaming Old Government Schemes

Source: https://liberty-lighthouse.vercel.app/topics/pubc/videos/why-india-keeps-renaming-old-government-schemes/

From the Total Sanitation Campaign to Swachh Bharat, and now MGNREGA's rebrand as the Viksit Bharat Gram Yojana, India recycles old policies under new names. This short explores how rebranding lets governments claim credit for old ideas

### Why India's Bureaucrats Are Never Fired

Source: https://liberty-lighthouse.vercel.app/topics/pubc/videos/why-indias-bureaucrats-are-never-fired/

Corruption charges pile up, but IAS dismissals remain almost unheard of. This short explores how constitutional protections and process-focused accountability let Indian civil servants escape consequences for failed outcomes.

### Why India's Loss-Making PSUs Never Get Shut Down

Source: https://liberty-lighthouse.vercel.app/topics/pubc/videos/why-indias-loss-making-psus-never-get-shut-down/

India's central public sector enterprises lose thousands of crores every year, yet governments rarely pull the plug. This short explores how concentrated benefits and dispersed costs keep failing state companies alive.

### Why India's Megaprojects Are Always Delayed 

Source: https://liberty-lighthouse.vercel.app/topics/pubc/videos/why-indias-megaprojects-are-always-delayed/

 The Bullet Train, the Delhi-Meerut transit line: India's flagship infrastructure projects keep missing deadlines. This short explores why cost underestimation and zero accountability make delays a feature, not a bug, of megaproject planning worldwide.

### Why Long-Term Vision Gets Indian Politicians Voted Out

Source: https://liberty-lighthouse.vercel.app/topics/pubc/videos/why-long-term-vision-gets-indian-politicians-voted-out/

Only 38% of Lok Sabha MPs win re-election, and nearly half of 2024's cohort were first-timers. This short explores why survival in Indian politics rewards visible freebies over structural reform.

## Syllabus

## Books

1. Fault Lines — Raghuram Rajan
2. That Which Is Seen, and That Which Is Not Seen — Frédéric Bastiat

## Academic Papers

1. [The Use of Knowledge in Society](https://www.econlib.org/library/Essays/hykKnw.html) (1945) — Friedrich Hayek
2. [Cost Overruns in Infrastructure Projects](https://sites.krieger.jhu.edu/iae/files/2020/10/Cost-Overruns-in-Infrastructure-Projects-10-04-2020.pdf) — Bent Flyvbjerg, Johns Hopkins
3. CD Deshmukh Memorial Lecture (2017) — Vijay Kelkar, on the marginal cost of public funds

## Legal Statutes

1. Article 311, Constitution of India
2. Prevention of Corruption Act, 1988
3. Punjab Preservation of Subsoil Water [Act, 2009](https://agri.punjab.gov.in/sites/default/files/Pb_preservation_of_Subsoil_Act%2C2009.pdf)

## Reports

1. [Public Enterprises Survey 2023-24](https://dpe.gov.in/en/public-enterprises-survey-2023-24) — Department of Public Enterprises
2. [State of State Finances 2023-24](https://prsindia.org/budgets/discussionpapers/state-of-state-finances-2023-24) — PRS Legislative Research
3. [Flash Report, March 2024](https://mospi.gov.in/sites/default/files/publication_reports/Flash_Report_March_2024.pdf) — Ministry of Statistics and Programme Implementation, on central project overruns
4. [Research on incumbency and turnover in Indian elections](https://carnegieendowment.org/research/2024/05/india-election-incumbent-candidates?lang=en) — Carnegie Endowment
5. Department of Personnel and Training report (2017), on disciplinary action against IAS officers

## Articles & Blog Posts

1. [A Market Failure Framework for Evaluating Public Sector Undertakings](https://blog.theleapjournal.org/2026/05/a-market-failure-framework-for.html) — Arjun Krishnan, LEAP
2. [BMS Holds Protests Pan-India Against Govt's Privatisation Policy](https://psuwatch.com/latestnews/bms-holds-protests-pan-india-against-govts-privatisation-policy) — PSU Watch
3. [Subsidy Bill Shoots Up in 2023-24 to Rs 5.62 Lakh Crore](https://www.deccanherald.com/business/union-budget/subsidy-bill-shoots-up-in-2023-24-to-rs-562-lakh-crore-1186847.html) — Deccan Herald
4. [Delhi Elections 2025: Who Is Offering More Money, Freebies](https://www.livemint.com/elections/assembly-elections/delhi-elections-2025-who-is-offering-more-money-freebies-woman-students-elderly-pension-aap-bjp-or-congress-11737624472180.html) — Livemint
5. [Incumbency and Churn II: India's First-Time MPs More Than Its Most Peers](https://www.business-standard.com/elections/lok-sabha-election/incumbency-and-churn-ii-india-s-first-time-mps-more-than-its-most-peers-124053001221_1.html) — Business Standard
6. [Explained: How Free Farm Power Drains Punjab's Coffers and Water Reserves](https://indianexpress.com/article/explained/explained-how-free-farm-power-drains-punjabs-coffers-and-water-reserves-5870813/) — Indian Express
7. [In Relief to Truckers, Govt Opens Highway Repair Shops, Dhabas](https://www.hindustantimes.com/india-news/in-relief-to-truckers-govt-opens-highway-repair-shops-dhabas/story-XGuG3yuEbNWPZpIYziUIZM.html) — Hindustan Times
8. [How IAS Officers Can Let Off Their Colleagues Officially](https://timesofindia.indiatimes.com/blogs/masala-noodles/how-ias-officers-can-let-off-their-colleagues-officially/) — Times of India
9. [ODF Status: Claims vs Reality — Swachh Bharat Mission](https://www.orfonline.org/expert-speak/odf-status-claims-vs-reality-swachh-bharat-mission) — ORF

# Trade

Source: https://liberty-lighthouse.vercel.app/topics/trade/

Understanding India's foreign trade and its record on openness. Explore how comparative advantage works, what four decades of self-reliance cost India, and whether China's rise makes free trade naive.

## FAQs

### After the tariff wars and the new deals, what is the smart trade strategy from here?

Source: https://liberty-lighthouse.vercel.app/topics/trade/faq/after-the-tariff-wars-and-the-new-deals-what-is-the-smart-trade-strategy-from-here/

India's fastest growth came when the world was open and India was only partly so. Between 1991 and 2011, Indian firms found markets abroad, foreign capital and technology came in, and customers on the far side of the planet bought Indian software. Through all of it, India kept its tariffs high and added a thicket of rules behind them, and the world largely let this pass, treating it as an indulgence granted to a poor country thought to be on its way to becoming a full member of the trading system. That indulgence has ended. The countries India sells to now expect access to run both ways, and they will make trouble when it does not.

That leaves India a choice: pull back, or open further. The best argument for pulling back rests on India's own record. Indian exports grew no faster to the countries India signed trade agreements with than to the countries it did not, so on the face of it, opening bought India nothing. Either negotiators struck those deals badly, or Indian firms could not use them.

Both explanations lead back to the same place. A country that enters negotiations charging much higher tariffs than the other side pays more for a deal to cut them than the other side does: its own producers meet real new competition, while its exporters gain little, since the other country's barriers were low to begin with. India's agreements duly felt one-sided, and that feeling became the case for signing no more. Other developing countries have used trade agreements the other way round, binding themselves to reforms they wanted anyway and could not otherwise carry politically. India has negotiated to avoid that commitment. It has promised the world a ceiling far above the duties it actually charges, which leaves Delhi free to raise them whenever it likes. A firm spending years and crores on a factory here must allow for the chance that the duty on its imported parts rises once the money is sunk.

That record is why "what did we win in the deal?" is the wrong question. An agreement is worth what it removes at home. The gains from trade are the things Indians get to buy and the higher productivity Indian firms gain through competition. Tariffs on machinery and components tax every Indian exporter who needs those inputs, and a tariff another country drops is only a bonus on top.

The barriers that matter now are mostly not tariffs at all. They are rules about standards, testing, and certification that decide whether a foreign supplier can sell in a country at all. Agreements to harmonise standards are therefore worth more than reductions in duty.

Forty years behind tariff walls already showed that barriers to trade do not build a competitive industry. If India still wears the label "tariff king," that means Delhi has forgotten the lesson, or never learned it. Indian tariffs and duties hurt Indian firms and Indian people. Delhi wrote those barriers, and Delhi can undo them, without waiting for anyone else to move first.

### Cheap Chinese imports destroyed factory jobs across the West. Did that really happen, and could it happen to India?

Source: https://liberty-lighthouse.vercel.app/topics/trade/faq/cheap-chinese-imports-destroyed-factory-jobs-across-the-west-did-that-really-happen-and-could-it/

This claim gets repeated so often it sounds like a slogan. It happens to be true, though, and it poses a strong challenge to the case for openness to trade.

When China's exports surged after 2000, economists tracked American towns by how exposed each one was to Chinese imports, measuring how much of each town's factory output matched the very goods now pouring in cheaply from China. The textbook prediction was reassuring: workers who lost jobs in shrinking industries would move to growing ones, or to healthier towns. They largely did not move. In the hardest-hit places, people fell into unemployment or dropped out of the workforce altogether. Their skills stayed tied to the threatened industries, so they kept circling back to vulnerable work rather than escaping it. Two decades on, those communities still had not recovered. The country as a whole did grow richer from the cheaper goods, just as the theory promised. What the theory got wrong was its airy assumption that the losers would be quickly absorbed.

The damage hit hard because manufacturing tends to cluster. A single product is often made in just a few towns, so when imports wipe out that industry, they do not shave jobs evenly across the country. They hollow out whole places at once, and the network of suppliers and workers' skills around those places loses value too.

Could the same happen to India? Yes, and possibly worse. India is still trying to build the low- and middle-tier manufacturing that China already dominates, so cheap Chinese goods threaten more than existing jobs. They can smother young industries before those industries ever find their feet. A "second China shock" is now under way, as China surges into solar panels, electric vehicles, batteries, and chemicals, and its trade surplus grew to around a trillion dollars in 2024. These goods are cheap not merely because China is skilled, but because of an undervalued currency, cheap state financing, and enormous subsidised factories producing far more than China itself can use. For a country hoping to industrialise, that combination is a fierce headwind.

This is the point at which an honest friend of free trade has to stop cheerleading. Trade's gains are real, but the China shock shows that its losses can be brutal, concentrated, and lasting. The comforting belief that markets heal those losses quickly is sometimes simply false. That does not make tariff barriers the answer, since their costs are real too. It means the disruption deserves a serious response rather than a shrug or a slogan.

The China shock, then, was real, and India, still building the industries China now floods, is if anything more exposed to a repeat. Trade is not the villain here. Its losers are real people in real places, and pretending otherwise is the surest way to lose the argument for trade altogether.

### China subsidises, undervalues its currency, forces tech transfer. Isn't "free trade" with China just naïve?

Source: https://liberty-lighthouse.vercel.app/topics/trade/faq/china-subsidises-undervalues-its-currency-forces-tech-transfer-isnt-free-trade-with-china-just-naive/

The suspicion is right: China does not compete like an ordinary trading partner. Its goods are cheap not only because its firms are good, but because the state has bent every cost down. Banks lend below market rates, the currency has stayed held down for decades, the household-registration system suppresses wages, provinces compete to hand out near-free land and power to factories, and direct subsidies sit on top of all of it. China spends around 5% of its national income a year on industrial policy, roughly ten times what the United States or Japan spend. Market access into China came at a price too, since for decades a foreign firm could sell there only by taking a local partner and handing over its technology, which built China's own champions and, in time, its rivals.

That spending buys factories far larger than China itself can use. In steel, solar panels, batteries, and cars, Chinese output runs to several times home demand. China now makes more than twice as many cars as it can sell at home, across a hundred-odd plants, so even loss-making firms keep producing and sell the surplus abroad below cost. This is not a normal market at work. Left unchecked, China's strategy of flooding the world with goods priced below cost will drive competitors out of their own home markets.

Tools to defend against that strategy exist, and they are perfectly liberal: an extra duty on the specific product shown, on concrete evidence, to be dumped below cost, applied for a limited time. India already runs about a seventh of the world's anti-dumping cases on a fortieth of its trade, so whatever India's China problem is, naivety is not it.

That heavy hand cuts both ways, though. An instrument reached for so readily slides from answering real dumping into sheltering whoever lobbies hardest, and India is not obviously good at telling the two apart. When the government rolled back the quality orders shielding India's fibre makers, those same firms promptly sought anti-dumping duties on imported yarn instead. Discipline, meaning proven dumping, one product, a fixed end date, marks the difference between a defence and protectionism by another name.

The deeper error is to slide from that defence into walling out China altogether. Blanket protection raises prices for Indian consumers, and the industry built behind it collapses the moment Chinese prices fall further. India's own steel mills, sheltered by high duties, saw their margins evaporate when China's export prices dropped, and Western solar factories shut the instant Chinese panels turned cheaper still. One country's tariffs cannot fix a glut the whole world faces.

Broad protection also mistakes cheapness for menace. A cheap Chinese solar panel or battery is, for India, less a threat than a gift. Indian factories depend on these commoditised inputs, and India's shift to clean power depends on them too. Taxing them at the border would raise costs for every firm downstream. India could not win a subsidy war even if it tried: its flagship scheme runs to about 0.15% of GDP against China's five, so out-spending Beijing is not feasible.

Treating China as an ordinary trading partner would be naive. So is the belief that a wall can cure a worldwide glut. The disciplined course runs narrow: strike at dumping where it is genuinely proven, guard the few goods that are truly strategic, and stay open to the rest, above all the cheap inputs that make Indian industry more competitive.

###  Does the rupee's value decide whether India can compete?

Source: https://liberty-lighthouse.vercel.app/topics/trade/faq/does-the-rupees-value-decide-whether-india-can-compete/

Every few months the rupee touches a record low against the dollar, and the number leads the bulletins as though a verdict had been handed down on the country. The exchange rate is not a verdict, though. It works better as a pressure valve.

Start with the mechanics. The exchange rate is a price for the rupee relative to other currencies, and people buy rupees for one of two reasons: to buy Indian goods, or to invest in Indian assets. Trade in goods is small next to trade in assets such as shares, bonds, and companies. Investors set the rupee's price mainly by deciding what those assets are worth, and the quality of Indian goods barely enters into it.

That is why the rupee tends to fall exactly when India would most like it to rise. A shock lands, oil grows dearer or foreign customers pull back, and investors mark down Indian assets. Money leaves, and the rupee slips.

Notice what that slip does to prices. Say the rupee moves from 80 to the dollar to 90. A tin of oil selling for a dollar abroad cost ₹80 in Mumbai and now costs ₹90, even though no policy changed. Every foreign good in India has grown dearer, and buyers switch at the margin: a household picks the Indian brand, a factory finds the Indian steel mill's quote suddenly competitive. Exporters gain from the same move. A garment factory in Tiruppur that sold its ₹400 shirt in America for $5 now sells it for $4.44, without cutting its rupee price at all. Imports fall, exports rise, and the gap that started the slide closes itself, with no scheme, no ministry, and no meeting.

The same machinery runs in reverse in good times. Money floods in, the rupee strengthens, and the same forces lean against the boom. The exchange rate behaves like a balancer, keeping the economy from leaning too hard in either direction.

China, the argument goes, benefited from an undervalued currency, so why should not India try the same? Grant the premise. China managed its currency from about 2003, and the policy worked: a held-down renminbi made Chinese goods cheaper on every shelf in the world, and factories from Ohio to Tiruppur felt the loss, a real grievance on their part.

The Chinese model still fits India poorly. Holding a currency where a government wants it means controlling the money crossing its border, or investors will move enough of it to overwhelm the effort. China's closed financial system allows that control, at a serious cost of its own. India has spent thirty years opening its financial markets, and closing them again would mean surrendering the foreign capital that builds Indian factories, just to shave a little off Indian export prices.

India has already run the opposite experiment. For decades the state held the rupee stronger than the market would have set it. Foreign goods stayed artificially cheap, more people wanted dollars than there were dollars to go round, and the state rationed the shortage with permits and quotas. A black market grew in the gap, and devaluation came anyway.

So does the rupee's value decide whether India can compete? No. A cheaper rupee lowers the price of Indian goods abroad without making them any better or any cheaper to build. Currency depreciation can only buy temporary competitiveness. Only durable competitiveness survives the next time the rupee moves.

###  Every rich country protected its young industries once. Why is it wrong for India to do the same?

Source: https://liberty-lighthouse.vercel.app/topics/trade/faq/every-rich-country-protected-its-young-industries-once-why-is-it-wrong-for-india-to-do-the-same/

Sceptics of trade liberalisation point out that Britain and America both taxed imports heavily while their industries found their feet. Among the later industrialisers, Korea sheltered shipbuilders and carmakers on its way from poverty to prosperity. What, then, is wrong if India does the same? The argument is a serious one: a firm may be hopeless in its first year and formidable in its twentieth, because making things is how a company learns to make them well. If that is so, a few years of shelter buys a permanent industry, and the tariff pays for itself.

Korea is the case usually meant, so it is worth being precise about what Korea did. Through the 1960s, Korea ran policies that favoured no industry in particular and pushed all of them outward. It devalued its currency sharply, which made Korean exports cheaper abroad, taxed export profits at half the normal rate, cut tariffs, joined the world trading system in 1967, and ran a trade deficit throughout. Firms aimed themselves at foreign customers, and foreign customers decided which ones survived. On that footing, Korea grew at 9.5% a year for a decade.

Only then did the government start picking winners. From 1973 it channelled roughly 60% of bank credit and three-quarters of manufacturing investment into steel, ships, chemicals, and heavy machinery. Growth over the following decade averaged 7.2%, more than two percentage points below what the neutral policies had delivered. Korea's light manufacturers, starved of credit to feed the favoured sectors, lost ground in rich-country markets while Taiwan's kept gaining, and the favoured industries never made up the difference. Hong Kong, Singapore, and Taiwan, which intervened less, grew faster still. The case usually offered as proof that picking winners works is a case where the country grew fastest before it started picking, and slower afterwards.

India managed neither half of Korea's record. Its licensing regime handed each firm as much protection as it needed to turn a profit, and required it to make more and more of the product at home, with no date on which any of the protection would lift. Protection calibrated to guarantee a profit is the precise opposite of a test. Nothing ever obliged an infant industry to grow up, so none did. The same argument arrives today wearing a second costume, as a plea to shield small manufacturers from cheap imports.

So is it wrong for India to do what the others did? The others did not do what the story says they did. A decade of pushing firms to export carried Korea forward, the tariffs came with a deadline attached, and the years of picking winners cost Korea in lost growth. India has never yet managed the deadline, never applied the test, and an industry that is never required to grow up does not.

### If cheap imports can shut Indian factories, why do economists still support free trade?

Source: https://liberty-lighthouse.vercel.app/topics/trade/faq/if-cheap-imports-can-shut-indian-factories-why-do-economists-still-support-free-trade/

When an Indian consumer buys an imported phone, an Indian producer loses a sale. Multiply that choice across thousands of consumers, and workers at Indian factories lose their jobs. Those job losses give politicians a rallying cry, and trade policy, once an arcane corner of economic theory, turns into a political battleground. The debate stays muddled because the losses are visible and the benefits are not.

Start with what a family does with the money it saves. A television that once cost twelve thousand rupees now costs eight, and the family gains four thousand rupees to spend elsewhere: school fees, a doctor's visit, a roof repair. That saved money buys Indian services and Indian labour, and it puts other people to work. The factory's loss is visible to everyone watching. The gains scatter across millions of households, and none of those households notices its own good fortune.

Freeing up money is only half of what trade does. Consider a surgeon who types faster than her receptionist but still leaves the typing to him. Every hour she spends at the keyboard is an hour she does not spend operating, and that hour is worth more to her patients than to anyone else in the building. The receptionist, by contrast, gives up far less by typing. Together they get more done, and both come out ahead, even though the surgeon outperforms him at both tasks.

Countries face the same choice. When India can buy a good abroad for less than it costs to make at home, Indian workers and Indian capital move to tasks where they earn more, and the same people and the same money produce more value than before. That logic holds even when the other country outproduces India at everything. Economists call it comparative advantage.

Comparative advantage does not erase what happens when a factory shuts. Its workers cluster in one trade, often in one town, and their skills stay tied to the industry that just closed. They do not glide into the new jobs that scattered savings created elsewhere in the economy. Economists studying the China shock found that the damage can last two decades, and in the worst-hit places, it has not yet ended.

Economists support trade anyway, because they know the alternative causes more damage to more people, for longer. India spent forty years making everything itself, and its people stayed poor while shortages of basic goods became routine. The case for trade rests on the whole ledger, not on the losses alone, and losers are entered on that ledger too.

###  If we buy far more from a country than we sell it, are we losing?

Source: https://liberty-lighthouse.vercel.app/topics/trade/faq/if-we-buy-far-more-from-a-country-than-we-sell-it-are-we-losing/

India buys far more from China than it sells back, and the gap has run to the better part of a hundred billion dollars in a year. Put that way, it sounds like a scoreboard, and India looks like it is losing badly.

What any two countries buy from each other, though, tells you almost nothing on its own. A customer runs a heavy deficit with his barber, who buys nothing from him at all, and he runs a large surplus with his employer, whose salary covers the rest. Nobody thinks the barber is winning. Countries work the same way. China spends what it earns from India elsewhere, on Australian ore, German machines, Gulf oil, and those countries buy from India in turn. Trade runs in triangles, and no two partners have any reason to balance against each other.

The money itself does not vanish either. A Chinese factory has no use for rupees, so the Indian importer takes his rupees to a bank and buys dollars with them. That swap only happens if somebody, somewhere, is willing to do the opposite: hand over dollars and take rupees instead.

Why would anyone want rupees? Because a rupee buys only Indian things. Whoever accepts one must be planning to buy something India makes, a service India sells, or a piece of India itself, such as shares in a company, government bonds, or land for a factory. A rupee can do nothing else.

So the money comes back, as an order for Indian goods, as payment for an Indian service, or as investment in India. That gives the plainest way to read the whole picture. A deficit on trade is a surplus on investment. Count everything India sells the world, and if it still buys more than it sells, the difference is exactly what foreigners spent buying a piece of India instead. The two are one fact, counted twice.

For a country short of capital, which India has always been, that counted fact is the welcome side of the ledger. Foreign money arriving to build a factory in Chennai is the very thing that half of India's economic policy has spent thirty years trying to attract.

So is India losing? The bilateral number cannot answer that question either way. It ignores the triangles, and it counts money arriving to build Indian factories as a minus sign. The number is too crude to carry any conclusion. The real question is different: does India depend too heavily on a single supplier, China, for imports it cannot easily source elsewhere, from a neighbour that could turn hostile?

###  India exports more software than clothes. How did that happen, and does it matter?

Source: https://liberty-lighthouse.vercel.app/topics/trade/faq/india-exports-more-software-than-clothes-how-did-that-happen-and-does-it-matter/

India earns close to $200 billion a year from software and back-office work, several times what it earns selling the world clothes. India also has hundreds of millions of people looking for work that needs no degree, that is the wrong way round.

The two trades need different things from the state. A garment exporter needs a port that loads on time, a customs desk that clears his cloth, land he can build a shed on, and labour rules that let him hire for a season. A software exporter needs a telephone line and a contract. After 1991, India's telephone and data networks improved beyond recognition, but its roads, ports, and customs desks did not. Its market for skilled service workers stayed loose, while regulation and unions kept formal factory labour bound tight. India specialised where the friction was lowest. Chile, Malaysia, Mexico, and Thailand built better ports and customs desks, so their advantage formed in goods instead.

That outcome has not served the large number of relatively unskilled workers well. When forecasters projected India's software industry would reach two million jobs, China's export factories already employed over fifty million people. Software and back-office work today employ about five and a half million Indians directly. That is a genuine success, and it is a rounding error against a workforce of several hundred million.

The 2025-26 Economic Survey presses a harder version of the charge. Services exports, it argues, are "firm-selective rather than system-forcing." They "do not require ports to function efficiently, customs to clear on time, industrial land to be assembled at scale, or municipal services to work reliably." Software firms therefore succeed inside a weak state without ever forcing it to improve, since they "adapt around institutional failure instead of confronting it," and the foreign exchange they earn eases the pressure for reform. The Survey names its own best evidence for this claim: India.

India did not choose software over shirts. Its ports, its customs desks, and its land records chose for it. Remove the factors that shackled industry, and India would not have to pick between backing services and backing factories.

### India gets called the "tariff king." Why are Indian tariffs so sticky? Do they benefit the economy?

Source: https://liberty-lighthouse.vercel.app/topics/trade/faq/india-gets-called-the-tariff-king-why-are-indian-tariffs-so-sticky-do-they-benefit-the-economy/

India taxes imports more heavily than almost any other large economy, several times the American average, and far more than that on food. The nickname is wholly earned. The case for tariffs is simple: they stop Indian producers being undercut and give them room to grow. Everything rests on what a producer does with that room.

A company good enough to sell abroad is good enough to sell at home. Foreign markets set the harder test, since a firm must beat the world on price and on quality to win a single order there. A firm that has only ever sold at home has passed no such test, and has little reason to cut costs or raise its game. Competing builds the ability to compete. Protect a producer long enough, and it comes to depend on the protection.

Tariffs then rebound on the exporters India does have, through a distortion India has never fixed: the country often taxes the parts of a product more heavily than the finished product. A maker of solar panels or hand tools pays stiff duties on the imported steel and components it needs, and it starts out costlier than its foreign rivals before it competes for a single order. A tax on imports becomes a tax on exports, and a tax on every Indian who buys the dearer good.

India cut its average tariff from around 120% in 1991 to about 13% by 2014, and that opening powered the export boom that followed. Duties have climbed again since, across some 3,200 separate increases that now reach about 70% of what the country imports. Exports peaked at a quarter of the economy in 2012 and fell under a fifth by 2019. Services exports kept growing, while goods exports grew at close to zero per cent a year for seven years. World trade held steady at about 30% of world output across those same years, so India's own choices caused the stall, and tariffs fall on goods, exactly where the stall happened.

Why, then, do tariffs keep coming back? A few visible producers collect the benefit and lobby hard to keep it, while the cost spreads so thin across so many buyers that almost nobody traces a higher price back to the duty behind it. Duties set item by item make the problem worse, since every industry asks for its own carve-out and customs officers gain a lucrative discretion. Protection spreads too, with no date on which any of it ends: shield the phone, and its parts must be shielded next.

Underneath all of it sits a belief about India: that the home market is so vast that firms will build here simply to serve it. Strip out the hundreds of millions too poor to buy much, allow for how much of their income the better-off put into savings, and India's real consumer market comes to somewhere between one and five per cent of the world's, perhaps a fifth of China's. The claim that India's large middle class can supply the scale most countries seek abroad rests on weak foundations. Exports drove three decades of Indian growth. China, when its economy was the size India's is now, reached the opposite conclusion: it judged its own market too small, joined the world trading system, and began the largest export drive in history.

In India, the duties keep coming back, and workers pay the price in the millions of jobs that never get created.

### India tried to make everything itself for 40 years, then opened up in 1991. What did that journey teach us?

Source: https://liberty-lighthouse.vercel.app/topics/trade/faq/india-tried-to-make-everything-itself-for-40-years-then-opened-up-in-1991-what-did-that-journey/

For forty years after independence, the most valuable thing an Indian company could own was a piece of paper. A government licence fixed what a firm was allowed to make and how much of it. Growing meant collecting more licences across more industries, and a single refusal could finish a firm off. Firms competed for permissions instead of for customers.

The intent behind the system was defensible. India was poor and newly independent, and the government meant to build Indian industry rather than buy from the countries that had just stopped ruling it. It banned or taxed above 100% any import that competed with a licensed product, and it reserved whole industries by rule for tiny workshops.

Because licences capped output below what Indians wanted to buy, shortages were built into the design. The government answered them with price controls, and then with permits to buy the scarce goods at all. Families waited years for a scooter or a telephone. Industry, shielded from every rival and pushed to make more of each product at home, turned out goods too costly and too shoddy to sell abroad. India's share of world trade fell from 2.2% in 1950 to under half a per cent by 1985. Growth crawled at about 3.5% a year, against twice that among trade-friendly Asian neighbours, and the factory jobs meant to absorb a farming country never arrived: as late as 1987, two in three Indians still worked the land. Self-reliance made India poor.

Crisis forced the turn. By 1991, years of overspending and a Gulf War oil shock had left India with about three weeks of foreign currency, little enough that the government shipped its gold abroad and pledged it against a loan. Cornered, it scrapped the licences, cut tariffs, opened the door to foreign investment, and devalued the rupee.

Most Indians alive today have lived in the country that followed. Growth climbed from 3.5% towards 8% in the 2000s, and more than 200 million people rose out of poverty in three decades. The queues went. Indian firms began buying their foreign rivals: the Tatas took over Jaguar Land Rover, and an Indian steelmaker bought Arcelor to build what was then the largest steel company in the world.

The job is only half done, though. Liberalisation left the biggest and best-connected firms comfortable, and a new company still struggles for the ordinary conditions of competition: a contract enforced in reasonable time, rules that hold still, credit without connections in Delhi.

India tried to make everything itself and stayed poor. It opened to the world and grew richer and freer. Openness delivered what self-reliance had only promised, and the call to be atmanirbhar, self-reliant, all over again asks India to run the first experiment and expect the second result.

###  "Make in India" pays firms crores to build here. Is it working or just subsidising assembly of Chinese parts?

Source: https://liberty-lighthouse.vercel.app/topics/trade/faq/make-in-india-pays-firms-crores-to-build-here-is-it-working-or-just-subsidising-assembly-of-chinese/

The phone in your pocket was very likely put together in a plant outside Chennai or Noida. A decade ago it would have arrived in a box from China. That much has changed, and quickly.

The government's account of the scheme is a substantial one. Across fourteen sectors it reports some ₹2 lakh crore of investment brought in, incremental production and sales of ₹18.7 lakh crore, exports above ₹8 lakh crore, and more than a million jobs. The case for trying is real too. Agriculture still supports something like 45% of India's workers while producing about 15% of its output, services have grown without absorbing them, and every East Asian country that industrialised did so with the state's thumb somewhere on the scale.

Look at which sectors the scheme actually chose, though. The subsidy pays firms 3% to 5% of their additional sales, it goes only to firms large enough to qualify on scale, and it covers, almost without exception, capital-intensive sectors. The scheme left out apparel and footwear, despite the fact that those industries employ people in large numbers. The scheme has focused away from the very problem it was meant to solve.

Then there is what the same government did with its other hand. Over two years it raised duties on camera modules, display and touch panels, printed circuit boards, and charger parts, pushing the cost of assembling a phone in India up about 8%, or roughly 6% of its ex-factory price, against a subsidy of only 5%. By the industry association's own reckoning, the net benefit of Make in India came to zero. The state paid firms to build here and taxed them by more than it paid.

The state also could not hand the money over. Years in, disbursements ran at a few per cent of the promised outlay, a pace at which the payout would have taken decades to complete. The agencies set up to process claims lacked the staff to do it. By the time the government decided not to extend the scheme beyond its original sectors or push back its deadlines, firms had reached about 37% of their production targets, and the government had actually paid out roughly 8% of the money, with officials blaming the delays on red tape and bureaucratic caution. The semiconductor programme tells the same story in miniature: the government budgeted a thousand crore for a fabrication plant in one year and spent a few lakh.

When a state hands out money on these terms, the firms that collect it are the ones big enough to work the corridors and complete the forms. Fix what is actually broken, meaning company law, the tax code, and the rules on foreign capital, and every firm gains, large or small.

So is Make in India working? It bought assembly, and assembly is a real foothold; both China and Vietnam began there too. But the most valuable parts of the value chain sit with the component manufacturers who make displays, batteries, and the like. Scale, cheap parts, and stable rules are what pull component makers in. This scheme supplied none of the three, aimed itself at the wrong industries, and was undone by the government's own customs duties.

### Opening up made India richer. So why are hundreds of millions of us still poor?

Source: https://liberty-lighthouse.vercel.app/topics/trade/faq/opening-up-made-india-richer-so-why-are-hundreds-of-millions-of-us-still-poor/

India after 1991 is a different country, and most Indians now live better than their parents did. Yet hundreds of millions still live on very low incomes.

Trade does its work through firms. It gave Indian companies machines and components they could not buy before, customers beyond India to sell to, and rivals who would take their business if they failed to improve. The record shows both effects. Across the first years of reform, productivity at Indian manufacturers rose by about 8%, and cheaper and better imported inputs drove more of that gain than foreign competition did. The gains were largest in the industries the state regulated least.

All of that helps a worker who works in such a firm. About nine in ten Indian workers do not. They work outside the organised sector altogether, in workplaces too small to be registered, let alone to buy an imported machine.

Why do Indian firms stay so small? Part of the answer is a staircase of thresholds. A firm using power that employs fewer than ten workers is barely regulated at all. At ten workers it enters the organised sector and the Factories Act, and a labour inspector arrives at the door. At twenty it must run a provident fund. At fifty it comes under the Industrial Disputes Act, which governs whether it may reassign a worker, lay anyone off, or ever close.

Economists dispute how much that staircase explains. Panagariya holds the Disputes Act to be the main barrier to large firms in labour-intensive industry. Anand, Subramanian, and Thomas call it a distraction, and point instead to constant uncertainty about next year's rules, which pushes firms to split themselves into several smaller units. Both accounts describe the same underlying problem from different sides: the Indian state makes bigness risky. Bangladesh, poorer than India, runs much larger factories and exports 95% of what they make, against India's 37%.

A firm hedging against its own government is not on its way to becoming an exporter.

The reforms also stopped short of what actually decides whether a firm can grow: affordable and uninterrupted power, smooth transport to ports that clear cargo quickly, courts that enforce a contract, credit for a company with no connections, and schools that turn out workers a modern plant can use. Trade lowered one barrier while the state left the others standing. Economic growth happens through productive firms, and India never built enough of them, so the benefits of growth never spread widely.

###  The government is making imports meet Indian "quality standards." Surely keeping out shoddy goods is a good thing?

Source: https://liberty-lighthouse.vercel.app/topics/trade/faq/the-government-is-making-imports-meet-indian-quality-standards-surely-keeping-out-shoddy-goods-is-a/

At first hearing, yes. Nobody wants dangerous toys or exploding pressure cookers, and a rule that such goods meet a safety standard sounds sensible. When the government issues "Quality Control Orders" requiring imports to carry an Indian standards mark, the logic sounds unarguable, until you examine how the orders get used.

Take viscose, a soft, wood-based fibre that thousands of small Indian mills spin into yarn for clothing. Only one company makes viscose in India: Grasim, of the Aditya Birla group. Because the mills have nowhere else at home to buy it, Grasim can set their terms. In 2021 the competition regulator found Grasim doing exactly that: charging different mills different prices, pulling its discounts to push some into losses, and even refusing to supply others, deciding who survived downstream. The one check on this monopoly was a mill's freedom to buy viscose from abroad instead.

Grasim set about closing that door. Its managing director asked the textiles minister, in a letter later surfaced under the Right to Information Act, to make an Indian quality certificate compulsory for imported viscose. The order came in 2023. On the face of it, the order did not ban imports; it merely required them to be certified. A foreign supplier could now sell in India only after Bureau of Indian Standards inspectors flew to its factory and cleared it, and the Bureau cleared none of the biggest foreign sellers: not one Chinese or Indonesian viscose plant, only a handful of minor suppliers in Europe. Imports fell by two-thirds within months, and the country's sole viscose maker had the market to itself.

The mills and garment exporters downstream paid for it. Their raw material now cost about a fifth more than it did abroad, and the shortages pushed several units to run below capacity. The damage landed on clothing, India's most labour-intensive industry and its best hope for factory jobs, and on man-made-fibre garments, its most dynamic export line.

A standard exists for the buyer who cannot judge quality for himself, and a standard written for that buyer would accept a European or Japanese certificate as readily as an Indian one. This standard instead required an Indian inspector to fly to a foreign factory first.

In 2025 the government put the orders to a committee under NITI Aayog. The committee concluded that synthetic fibres and yarns "do not inherently present direct health or safety risks to consumers," and it recommended cancelling, suspending, or deferring the orders on more than two hundred products. The government revoked fourteen orders across the polyester chain that November, and then revoked the viscose order itself. Orders on hundreds of other products still stand.

A rule that appears in 2023 and disappears by 2025 cannot be planned around. Anyone deciding whether to build a spinning mill must guess not only at his costs but at whether the government will change them, at the request of the supplier he has to buy from.

Keeping out dangerous goods is what a standard is for. Keeping out shoddy ones is the buyer's own business, and a mill that tests what it spins needs no inspector to do it for him. The viscose order kept out no danger. It kept out competition for the one firm that had asked for it, and days after the government withdrew the order, regulators opened an anti-dumping investigation on the same value chain. Take away one instrument, and the same request arrives in another form. That pattern, more than any single order, is what holds back investment.

### What decides what a country makes well, and can that change?

Source: https://liberty-lighthouse.vercel.app/topics/trade/faq/what-decides-what-a-country-makes-well-and-can-that-change/

India has hundreds of millions of workers willing to work for wages no European would accept. Walk into an Indian shop, though, and the toys, the shoes, and often the shirt on the rack came from somewhere else. Cheap labour alone should decide who makes what. It does not.

After 1991, Indian firms making computer-controlled machine tools, the lathes and cutters other factories use to shape their own parts, had to compete against imports priced about 50% higher. Price was the Indian makers' only advantage, and they could not stretch it much further. Wages accounted for only a fifth of what a machine cost to build, and the computer controls and precision screws, bought from the same few world suppliers the Japanese used, accounted for half. Doubling what each worker produced would have cut the price by only a tenth. Buyers paid the premium anyway.

At the end of the 1990s, researchers placed Indian and imported machines side by side in the same plants, running the same work. Most pairs performed alike, with matching accuracy and matching hours lost to breakdowns. A minority of the Indian machines, though, performed far worse, and no buyer could tell in advance which one they would get. The premium bought near-certainty that the machine would work every time.

An Indian engineer sent to raise standards at a new car-seat plant in China said his six months there would be largely a matter of talking. He changed no machinery. The plant inspected its seats only at the end of the line, so he trained every worker to check each piece as it arrived and again as it left. Consistency of that kind is built from habits, and habits live in the people doing the work. One worker can teach the next, but a firm that loses everyone who knows must start again.

One of India's leading car-seat makers adopted international practice in the mid-1990s, when 20,000 parts in every million left its plant defective, against the hundred per million that carmakers then counted as world class. Five years later, the figure had fallen to 200. A brand-new plant reached 65 within three years, because a fresh workforce learns faster than a settled one unlearns old habits. By 2003, about half the parts suppliers to a new carmaker in India had cleared that hundred-per-million mark, the same share as in China.

The carmakers made that happen. They kept two suppliers for every part, shifted orders to whichever performed better, and sent their own engineers into the plants worth saving. A supplier with a customer like that improves or loses the contract. A supplier without one can stay as it is for years.

Samsonite built its plant at Nashik into the largest luggage factory in the world by volume, ahead of European hubs that had held the trade for generations. When the company needed more capacity, it built there again, drawn by the suppliers that had grown up around the plant and the workforce that had stayed. Habits collect in places as well as in people, and capability gathers where it already exists.

A country, then, can change what it makes well, but firms are the ones who change it, through customers who measure their performance and can walk away. India spent forty years trying to order capability into existence by decree, and got factories that could not sell abroad. Nobody has found a faster route than the seat maker's five years.

### When we depend on a rival for chips, solar panels, medicine ingredients, how worried should we be?

Source: https://liberty-lighthouse.vercel.app/topics/trade/faq/when-we-depend-on-a-rival-for-chips-solar-panels-medicine-ingredients-how-worried-should-we-be/

When Covid closed borders, India, the "pharmacy of the world," discovered how much of its own supply chain originated in China. China makes over four-fifths of the world's supply of some key drug ingredients, and it has since shown it will use that leverage. It banned exports of gallium and germanium, metals it all but monopolises and that go into chips and weapons. It placed the rare-earth magnets used in cars and missiles under export licences, and it reportedly held back machinery and technicians bound for factories in India.

An import dependence that a rival nation can cut off at will is a liability, however cheap it looks. Defence has always been the honest exception to the case for open trade, but self-reliance would be the wrong conclusion to draw from it. No country on earth produces everything it needs, and no economy has the capability to make everything from microprocessors to chemicals to energy. The remedy is to widen the circle of suppliers. An Indian drug firm uneasy about Chinese ingredients can buy them from Taiwan, Japan, or Brazil instead, and many firms, watching Beijing's conduct, are already doing so out of plain self-interest.

Self-reliance by decree runs into a further difficulty: capability grows through competition, learning, and access to globally competitive inputs. China's grip on rare earths took decades of subsidy, a tolerance for pollution that other countries refused, and a willingness to underprice Western entrants into bankruptcy. No government can order that accumulated know-how into existence. When Delhi tried to cut its reliance on Chinese drug chemicals by picking a single company to make each of some twenty key ingredients, drugmakers complained that the scheme had simply created monopolies, since a sheltered firm collects the subsidy and never acquires the capability. The ₹7,280-crore scheme for rare-earth magnets shows the other trap. A magnet is the last link in a chain that begins with refined rare-earth oxides, and India would still buy those oxides from China. The dependence simply moves a step up the chain.

A serious answer draws the list of genuinely strategic goods as narrowly as the evidence allows, what Dani Rodrik calls a small yard behind a high fence. Two questions settle membership. Is the good truly critical to national security, and is China really the only source? Can Indian firms make it competitively, proved by their ability to export rather than by sales made behind a tariff? Where a good clears both tests, India should shield that sector from Chinese imports.

Two forces will push to widen that list regardless. China does not define its own security narrowly, so as it restricts everyday metals and machines, the pressure grows to keep adding goods until a small yard becomes ordinary protectionism. At home, "strategic" is a word every industry learns to use, and once the exception is granted, every lobby will claim it, much as "quality" became the shield of a single producer.

So how worried should India be? Worried enough to spread its suppliers, hold stocks of what cannot quickly be replaced, and build a few strengths alongside friendly countries. Trying to make everything at home would move slower, cost more, enrich sheltered firms without building their capability, and often leave the original dependence intact one step upstream.

# Urbanism

Source: https://liberty-lighthouse.vercel.app/topics/urban/

Understanding Indian cities and urban governance from housing affordability and slums to traffic congestion, walkability, public spaces, and the rules that shape how cities grow.

## FAQs

### Can Indian cities be made to look beautiful, more organised, and less chaotic?

Source: https://liberty-lighthouse.vercel.app/topics/urban/faq/can-indian-cities-be-made-to-look-beautiful-more-organised-and-less-chaotic/

Yes, cities can be beautiful, but that beauty is not the same as the beauty of a work of art. A city is not a painting, and observers easily mistake its order for chaos.

Judging a city's beauty from a hundred feet up, or two hundred, or certainly a thousand, does not work. That vantage point produces symmetric blocks laid out from architectural design principles and turned into master plans. Such plans have drawn admirers for decades, but they never capture what a real city feels like.

A city amounts to nothing more than the sum of its streets, and each street contributes its own character to the whole. Diversity offers the best measure of a street's beauty: diversity in its buildings, diversity among the people who use it, and diversity in the forms and functions packed along it.

Symmetry and consistency serve art and architecture well, but cities gain little from either. A city built for symmetry ages into a boring relic of the canvas it came from. Cities instead build their beauty from patterns that emerge organically, out of countless strange and unique combinations that no planner designs directly. Those patterns reward a viewer who walks the street at eye level, one street at a time. They rarely survive translation onto a master plan drawn on paper.

Any city holds both kinds of street side by side, the remarkable and the boring. Planners often reach for a quick fix to turn a boring street into an interesting one, patching its layout with repairs and small improvements meant to invite the diversity that makes a street worth walking.

### Should we be concerned about slums in cities?

Source: https://liberty-lighthouse.vercel.app/topics/urban/faq/should-we-be-concerned-about-slums-in-cities/

The answer depends on what we mean to protect: the people living in slums, or the structures themselves. If we care about people, we should feel no alarm at those who choose to enter a slum. We should instead worry about those who cannot leave one. If we care about the structures, we have reason to value them rather than condemn them.

India's five megacities, Mumbai, Delhi, Kolkata, Chennai, and Bangalore, house an estimated \[X]% of their combined population in slums. Slums are not an exception in these cities. They are the norm, woven through the urban fabric as tightly as any other thread.

Slums function as a solution, not a problem. Like mushrooms after rain, they emerge in response to underlying conditions, and clearing them away in haste helps nobody. It only damages the networks and livelihoods that residents have built around them.

Five conditions create slums together: poverty, migration, informal labour markets, expensive housing, and weak property rights. The rural poor migrate to cities in search of better opportunity, and cheap, informal housing gives them their first foothold there. That foothold lets them service the city through low-wage informal work, work that itself cannot pay for decent housing, and residents build dense, informal structures on land parcels where property rights sit fuzzy or poorly enforced.

City governments, to be clear, provide slums with almost no services. Slum communities build their own instead, through neighbours, small entrepreneurs, or extra-legal arrangements, and slum dwellers end up paying more than better-housed residents for water, electricity, waste removal, and basic legal protection. Conditions inside a slum can still be abhorrent. Residents stretch themselves to the absolute limit of what a human being can bear, just to survive there.

The real question, then, is why residents who move into a slum cannot move out of one. In cities where household incomes rise slowly, sometimes across several generations, that stagnation traps people in place. In the harshest cities, local goons and mafias capture entire slum territories, overcharge residents for basic services, and exploit the vulnerability that comes with living an informal, illegal existence. Slum dwellers get locked in.

Successful cities show the opposite pattern. Slums appear, and then transform. A city that grows faster and opens its markets to poor slum dwellers on the same terms it offers everyone else sees more residents exit slums, and it can turn the slums that remain into dense but livable neighbourhoods.

Uprooting these informal arrangements, then, means uprooting a product of real human ingenuity, built by people with an admirable instinct for survival, the same people who keep a city's engines running. Doing so in haste is not just poor judgement. It is a moral failure.

### Why are there so few open spaces and parks in Indian cities?

Source: https://liberty-lighthouse.vercel.app/topics/urban/faq/why-are-there-so-few-open-spaces-and-parks-in-indian-cities/

Every city faces the same choice once land runs scarce, and land always runs scarce in a city. A government can use land for built-up area, meaning buildings and roads for commerce and housing, or it can set land aside as open space, meaning parks, promenades, and public squares. The world's best-run cities resolve that choice by using land efficiently. They pack more built-up area onto less land, and the land they save opens up as public space across the city.

India's laws, regulations, and codes governing urban land block that efficiency. One regulation carries most of the blame: the Floor Area Ratio, or FAR, through which governments prescribe how tall a building may rise. In Mumbai, for instance, a building's total floor area, adding every floor together, cannot exceed 1.3 times the area of the land beneath it, and most Indian cities set similarly low limits.

When a city permits less building, it frees up less open space. Take a project that needs 1,300 square metres of built-up area. At an FAR of 1.3, the builder needs 1,000 square metres of land. At an FAR of 13, the same project needs only 100 square metres, and the city saves 900 square metres of land for other use. The difference is stark.

FAR bears most of the blame, but other rules compound the problem. Building setbacks and the spread of large gated societies are privatising open space across Indian cities. The open ground between a building and the boundary wall around it keeps growing, and even where that open space survives, it drops out of the public sphere and serves private consumption only.

Gated societies such as Vasant Kunj in Delhi, most of Noida, and Yellahanka in Bengaluru fill their grounds with private lawns and clubhouses, locked behind gates and closed to anyone outside.

Cities that grow taller, ironically, gain open space rather than losing it. Bangkok and Singapore show the same pattern across South Asia, and Tokyo, despite carrying some of the largest built-up areas found anywhere in the world, holds huge open spaces too, because efficient land use frees the ground beneath its towers. India needs more open space, and the regulations blocking efficient land use are the place to start.

### Why do potholes never stop emerging, and what prevents timely repairs?

Source: https://liberty-lighthouse.vercel.app/topics/urban/faq/why-do-potholes-never-stop-emerging-and-what-prevents-timely-repairs/

The word "pothole" undersells the problem. It captures none of the frustration, the hazard, and the hardship that craters, holes, and depressions inflict on India's roads.

Poor, unstructured paving explains why potholes arise in the first place. Without drainage beneath the road surface, accumulated water punctures the surface and pulls it inward, leaving large holes behind.

Structured, engineered paving would prevent this: water would flow through the surface each time it rains, instead of tearing it apart. Building such a road, though, serves neither the government nor the contractor.

A road can be repaved only once it has broken down, and that breakdown gives the contractor repeat business. Each repaving that goes down on top of the last raises the odds that potholes will return, so in India, potholes breed more potholes. That is the first cause.

The second cause is a problem of ownership and coordination. In Indian cities, every government department capable of building a road builds one. Central bodies such as the NHAI and the PWD build roads, state governments build roads, and local bodies such as a municipal corporation's road department or a gram sabha build roads too. Special purpose vehicles build roads. Inter-government bodies build roads. Development authorities such as the MMRDA build roads, and so do port trusts and the military.

A citizen who wants a contractor held responsible for a pothole must first identify who that contractor answers to, a task that is nearly impossible given how many agencies share the ground. Even a citizen who manages that must then coordinate with other agencies to split the cost and responsibility of the repair, a coordination problem that only grows harder as more agencies tangle together. That tangle is how India governs its roads today.

In Lucknow, some of these potholes have grown into craters, a symptom local reporting has tied to [entrenched corruption in the city's road contracts](https://www.hindustantimes.com/cities/lucknow-news/lucknows-sinking-roads-indicate-stinking-corruption-101709575978280.html).

### Why do some cities become unsafe after sunset?

Source: https://liberty-lighthouse.vercel.app/topics/urban/faq/why-do-some-cities-become-unsafe-after-sunset/

Free movement and a mix of uses, buildings that combine commercial, entertainment, occupational, and residential purposes, make a neighbourhood safe. Walls, cordons, and single-use zoning, whether purely residential or purely occupational, instead make a neighbourhood unsafe.

A survey found that more than[ 50% of people](https://artha.global/wp-content/uploads/2022/05/satarc_april272017.pdf) in Delhi worry about withdrawing cash from an ATM after 9 pm, and more than 90% worry specifically about a woman's safety in the city after that hour. Mumbai's respondents reported far lower worry on both counts.

Making a space lively is the simplest way to make it safe. The urbanist Jane Jacobs called this "eyes on the street": when enough people watch a street, nobody can carry out a snatch, a robbery, an attack, or any other antisocial act without being reported, and the presence of watchers deters the act before it starts. A city does not need more cameras or "hired eyes," such as private security or heavier policing, to achieve this. It needs to unlock its spaces instead, by tearing down the boundary walls and barriers that isolate one block from another, and by inviting a wider mix of uses into its blocks and neighbourhoods.

That kind of change unfolds slowly and can take many forms. A live restaurant or a karaoke bar can funnel life into one neighbourhood, and a clothing store can do the same for another. The more uses a neighbourhood mixes, the safer it tends to become. Even a gazebo, a vending cart, or a market stall can add life to a space, and street vendors and newsstands, in particular, draw patrons and footfall throughout the day. A neighbourhood built purely for housing turns out just as unsafe as a corporate park built purely for offices, or a mall built purely for shopping. Mix those uses, though, and the resulting neighbourhood fills with movement and footfall. It resists the "blight" that a dark, empty, remote street invites, the kind of boredom that becomes a den for illicit activity and harm.

### Why is flooding a norm in Indian cities?

Source: https://liberty-lighthouse.vercel.app/topics/urban/faq/why-is-flooding-a-norm-in-indian-cities/

Indian cities swing between two water crises. Rain floods them, and summer drains them dry. The root cause behind both is simple: Indian cities have built almost no functioning underground infrastructure.

Three systems together regulate how water moves through a city: sewerage, piped water connections, and stormwater pipelines. This infrastructure remains largely out of sight, and across most of urban India, city governments either leave it under-maintained or never build it at all.

Ancient cities rose on exactly this kind of infrastructure. Aqueducts carried water in, and sewerage systems carried waste out; together, those networks made city life possible in the first place. India's cities have failed on both counts.

Sewerage systems separate waste water from clean water and ensure that waste discharge harms no one downstream. Researchers have long identified the development and maintenance of sewerage systems as key drivers of human health and progress. Yet huge, densely populated areas of Indian cities have no sewerage system beneath them at all. Waste water soaks into the ground or runs off untreated into rivers.

Clean water supply fares little better. The infrastructure that delivers drinkable water reaches only a fragment of most cities, and households across huge areas go without it. Families pump groundwater instead and run it through private filters to get water they can drink, and for some of the world's most populous cities, that arrangement wastes money and effort on a massive scale.

Stormwater canals form the third missing piece. These canals direct rainwater away and prevent it from pooling in the streets. Where such a network exists at all, encroachment or fragmentation has usually broken it apart, and preventing floods requires a network planned as a whole and maintained around the clock, not scattered fragments patched up after each monsoon.

City governments currently treat this infrastructure the way someone might treat a pipe with many leaks: they patch it, rather than replace it, and that patching carries consequences nobody sees until the next crisis.

Human health absorbs the largest of those consequences. Every time it rains, the three separate channels- sewers, drinking water pipelines, and stormwater drains- collapse into each other, and the resulting mix spreads waterborne diseases such as cholera and typhoid. These diseases now survive mainly in poor cities. Wealthier cities eliminated them once they built proper underground infrastructure.

Public health institutions compound the problem. Rather than fix the infrastructure that spreads disease at its source, they treat outbreaks with antibiotics, which reach Indian populations cheaply and in huge volume. Pathogens exposed to that volume of medication have grown resistant over time, and the medication's power to cure has begun to fade.

The neglect shows up even in India's wealthiest settlements. Gurugram, for instance, still lacks a functional sewerage system, piped drinking water, and stormwater tunnels. Missing infrastructure of this kind now ranks among the largest threats to human safety in urban India.

###  Why is there so much traffic on city roads and highways?

Source: https://liberty-lighthouse.vercel.app/topics/urban/faq/why-is-there-so-much-traffic-on-city-roads-and-highways/

Road space is a scarce commodity, and in most Indian cities, drivers pay nothing to use it. A driver in an Alto uses far less of that space than a driver in an Innova, and both use far less than a mini-truck driver, yet all three pay the same price: zero.

Every car buyer receives more than an engine and a chassis. The purchase also hands the buyer a claim on road space, and nobody prices that claim. Each time an owner drives the car out or parks it, she draws on public space along with the comfort and utility the car provides.

No amount of road-building changes the underlying arithmetic. Road space will always fall short of the number of cars and other motorised vehicles competing for it.

Congestion is what that shortage feels like on the ground. Drivers face longer wait times, more choke points, and speeds that fall well below what the road was built for. The cost runs high: commuters in Bengaluru lose about 168 hours a year to rush-hour traffic, and the TomTom Traffic Index ranks it the world's second most congested city. Four Indian cities, Bengaluru, Pune, Delhi, and Mumbai, appear among the world's 25 most congested.

Pricing road space is the only real solution to congestion, and pricing takes several forms. A toll charges drivers simply for access to a stretch of road. Congestion pricing goes further, setting a different price for different times of day through dynamic models. Fast lanes carve out a strip of the existing road that drivers can pay to use for faster transit.

The deeper solution, though, asks two different questions: how should people move from one place to another, and why must so many of them travel such large distances at all?

Public transport answers the first question by freeing up a transformative amount of road space. A passenger on a bus or train needs only the space of a seat or a patch of standing room, far less than a car requires. Public transport moves people with comfort and convenience, just as a car does, and that comparison does much of the work of persuading drivers to give up their cars. Once road space stops falling short of demand, public transport can move people over long distances faster than cars can today. The possibilities run wide: water metros, underground transit systems, trams, and double-decker buses built like ships stacked deck upon deck. Reaching that kind of network takes coordination, political will, and lifestyle changes that are hard to make, but a city that makes them can transform how its people move and live.

The second question asks why people commute such long distances in the first place. Why do so many residents live in Noida but work in Hauz Khas? Housing in Hauz Khas costs far more and sits far scarcer than housing in Noida. A city with more diverse neighbourhoods might persuade an employer to move where its staff live, or persuade staff to live nearer their work. That logic has produced the fifteen-minute city, a model built so that residents can reach any essential service or workplace within a fifteen-minute walk. Some residents will always prefer to cross town for a particular team or a particular restaurant. Still, those residents remain the exception, not the rule, for most of a city's population. This vision offers the largest possible answer to congestion, among several others, though building it demands a leap of faith from planners and residents alike. The root cause of traffic jams remains the same throughout: a mismatch between the supply of road space and the demand for it, and that mismatch will only worsen, however much space cities add, until they price it.

### Why is walking in our cities so difficult?

Source: https://liberty-lighthouse.vercel.app/topics/urban/faq/why-is-walking-in-our-cities-so-difficult/

India is a country of walkers. A 2019 survey found that Indians made 63% of all journeys on foot, and other estimates suggest that about 45 million people walk to work across the country. These are enormous numbers, and the people behind them face daily hardship. The Supreme Court recently ruled that the right to walk counts as a fundamental right, and while commentators called the ruling a breakthrough, the finding is simply rational and overdue.

Walkability in India suffers because city governments prioritise motor vehicles in allocating public space, and in most places, roads remain the only infrastructure anyone builds or maintains. Footpaths and pavements exist to protect pedestrians and separate them from traffic, and a city needs to plan them with the same care it plans roads: consistent, smooth, and free of obstacles.

Indian pavements rarely meet that standard. Encroachment eats into them, hawkers claim them as selling spots, and repair crews dig them up for work below ground. What survives often runs in disconnected fragments rather than a continuous path. As a result, pedestrians and motorists end up competing for the same stretch of road, and India's civic norms tend to favour the motorist in that contest.

India also records more road accidents than almost any other country in the world. Road crashes killed 32,825 pedestrians in 2022.

Safety forms a second, less understood barrier to walkability. In neighbourhoods lined with high compound walls and empty streets, even a well-paved pavement can feel unsafe to walk. Pedestrians in these areas must cross long stretches of darkness and isolation to get anywhere on foot.

Poor design compounds the problem, as planners scatter barriers along a pedestrian's path. Safe surface-level crossings, in particular, are rare. Most major junctions force pedestrians up tall footbridges or down into underground crossings instead of letting them cross at street level.

None of these problems admits an easy fix, but one pattern holds across cities worldwide: the wider a city's pavements and footpaths run, the better that city's quality of life and prosperity tend to be.

Pedestrians need real political weight to win wider space, which means municipal officials need more authority to act and elected representatives need a reason to respond to pedestrian demand. Coordinating pedestrians to demonstrate that demand is not easy either, since no single voice speaks for millions of individual walkers. Anyone who has walked an Indian city can attest to the need regardless, and now the Supreme Court has said so too.

### Why is your house rent so high?

Source: https://liberty-lighthouse.vercel.app/topics/urban/faq/why-is-your-house-rent-so-high/

Rent depends on where a resident chooses to live in the city. The search for decent, affordable housing, though, keeps pushing city residents further towards the outskirts. In India's metropolitan regions, that search pushes people to Sonepat or Noida in the National Capital Region, to Yellahanka in Bengaluru, or to Khopoli near Mumbai.

Planners sort housing into three groups by income level: lower-income group (LIG), middle-income group (MIG), and higher-income group (HIG). Housing counts as affordable, by the standard definition, only when a household spends no more than a third of its income on it.

By that definition, \[X]% of city residents in India lack access to affordable housing, and rents are high across all income groups.

Housing prices and the monthly rent that follows them emerge where housing supply meets housing demand. Demand for affordable housing has risen fast in Indian cities, and indeed across every lower- and middle-income country in the world. India will soon house more than half its population in cities, and because incomes there remain low, cities need a much larger stock of LIG and MIG housing.

Supply is not catching up with that demand, for three visible reasons.

Builders lack the incentive to build LIG and MIG housing. Construction in India costs builders dearly, since they must navigate a mix of complex regulations, licensing requirements, limited access to credit markets, uncertain land titles, and court battles just to finish a project on time. Luxury housing for buyers who can absorb these costs is the only route builders find to a profit. Restrictions that keep buildings from growing taller add to this problem too.

Many owners, meanwhile, prefer to keep their houses locked and vacant. They treat housing as an investment that absorbs liquid cash and promises high future returns, and renting a unit out risks losing possession to an illegitimate occupant. India's safeguards, insurance, and monitoring against that risk remain weak, so owners hold units empty rather than rent them, and the supply of already-built housing shrinks further.

Rent control laws create a further difficulty. India's legacy rent laws fixed prices decades ago, sometimes as low as ₹50 a month, and those fixed rents fetch owners no return today. Owners have abandoned such buildings to tenants too poor to maintain them, and nobody can sell the buildings to make way for better ones, since the tenancy locks the land in place. These abandoned units still occupy some of the most valuable ground in Indian cities, notably in Kolkata and Mumbai.

Other reasons exist, but one cause connects them all: India's housing market is not free. Builders cannot easily build, buyers cannot easily buy, and owners cannot easily sell, and each blockage keeps supply from meeting demand and keeps affordable housing prices high.

The consequence falls on families: poor, overcrowded housing that still consumes a large share of household income.

# Agriculture

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/

Understanding agricultural policy in India through the lens of free markets — from APMC reform and contract farming to the economics of minimum support prices.

## FAQs

### Why are Indian farmers called annadatas rather than entrepreneurs?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/why-are-indian-farmers-called-annadatas-rather-than-entrepreneurs/

The term *annadata* (literally \"giver of food\") carries weight in Indian political discourse, but the label reveals more about how we think about farming than about farmers themselves. Behind this label lies a policy framework that treats agriculture as a mission of national survival rather than a domain for enterprise. This framing has roots in the famines and food shortages of the 1940s and 1950s. The challenges of a newly independent India made self-sufficiency an urgent political goal. Policymakers cast farmers as providers of grain to meet national food requirements, not as entrepreneurs who allocate capital, take risks, and respond to markets. Even after scarcity receded, governments continued to treat farmers primarily as *annadatas.*

When India liberalised industry and services in 1991, agriculture [remained trapped](https://www.theeconomicsjournal.com/article/view/494/8-1-62) in the old license-control-subsidy raj. Today, the state still [controls](https://old.ccs.in/sites/default/files/primer.pdf) what farmers grow (through minimum support prices and procurement), how they produce it (through input subsidies and technology approvals), and to whom they can sell (through mandis, stocking limits, and trade restrictions). In such a system, a farmer\'s success depends less on reading markets or innovating and more on navigating government schemes. The ability to take calculated risks, invest in new crops, or differentiate products brings little reward when procurement priorities and subsidy structures point in only one direction. The result? More than [40%](https://www.indiabudget.gov.in/economicsurvey/doc/eschapter/echap06.pdf) of India\'s workforce remains in agriculture, yet few can act as genuine entrepreneurs. We celebrate farmers at harvest festivals, yet deny them autonomy over their land, inputs, markets, and trade. Policymakers can enable farmers by restoring the economic freedom that allows agriculture to be both a livelihood and an enterprise.

### Why do farmers remain poor even though India is a top producer of food?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/why-do-farmers-remain-poor-even-though-india-is-a-top-producer-of-food/

India is among the world\'s [top producers](https://www.fao.org/india/our-office/india-at-a-glance/en) of rice, wheat, milk, fruits, and vegetables. We grow enough to feed ourselves and export to dozens of countries. So why do our farmers remain among the poorest workers in the economy? The problem lies in simple [arithmetic](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2158030&reg=3&lang=2): 46% of India\'s workforce depends on agriculture, yet farming accounts for only 17% of the economy\'s output. That means the average farmer produces roughly one-fourth as much as workers in other sectors. This gap translates directly into lower incomes. Behind this productivity gap are three structural constraints:

First, tiny, fragmented landholdings: The [average farm](https://prsindia.org/policy/analytical-reports/state-agriculture-india) is just 1.08 hectares, often divided into multiple scattered plots. At this scale, mechanisation becomes uneconomic, and farmers lack the bargaining power to negotiate better prices. Compare this to the average farm size in the [United States](https://esmis.nal.usda.gov/sites/default/release-files/795776/fnlo0226.pdf) (180 hectares) and [Brazil](https://agenciadenoticias.ibge.gov.br/en/agencia-news/2184-news-agency/news/37914-in-2022-sorriso-mt-remains-as-the-number-one-agricultural-producer-in-the-country) (75 ha).

Second, low yields despite high effort: Indian rice yields [hover](https://www.fas.usda.gov/data/production/0422110) around 4.3 tonnes per hectare, compared to China\'s 7 tonnes; our maize yields are 3.7 tonnes per hectare, compared to 11.2 tonnes in the United States and 6.6 tonnes in China. Farmers work hard, but fragmented plots, degraded soil, and limited access to better seeds, mechanisation and technology keep productivity low.

Third, markets that restrict rather than reward: Procurement and marketing policies funnel farmers toward a handful of cereal crops, making diversification into higher-value fruits, vegetables, or speciality crops risky. Farmers sell in markets that are heavily regulated but weakly competitive. The tragic irony is that India produces plenty, but its producers remain poor. Production volume doesn\'t equal prosperity when the system keeps each farmer\'s slice of the pie so small.

### Why is farming so heavily subsidised yet still unprofitable?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/why-is-farming-so-heavily-subsidised-yet-still-unprofitable/

The Union government [spends](https://prsindia.org/files/budget/budget_parliament/2025/DFG_Analysis_2025-26_Agriculture_&_Farmers_Welfare.pdf) over INR 4 lakh crore (USD 48 billion) annually on fertiliser, irrigation, and electricity subsidies. This is over INR 30,000 (\$329) per farmer. This amount does not even account for procurement costs (around INR 2 lakh crore annually) or periodic loan waivers. Yet farm incomes remain low. How can such massive spending fail to make farming profitable?

Subsidies are not the only policy tool affecting farmers\' incomes. While the government subsidises inputs, it simultaneously controls output prices through export bans, stock limits, and procurement policies that often depress prices below world levels. The OECD's [Producer Support Estimate](https://www.oecd.org/en/publications/2025/10/agricultural-policy-monitoring-and-evaluation-2025_354e7040/full-report/india_a08610a6.html) (PSE) measures how much government policies raise or lower farmers' incomes. The PSE estimates that India's policy environment has reduced farmer income for most years since 2000. Between 2022 and 2025, the OECD [estimates](https://www.oecd.org/en/publications/2025/10/agricultural-policy-monitoring-and-evaluation-2025_354e7040/full-report/india_a08610a6.html) that government policies reduced Indian farmers' revenues by about 14.5% overall: while budgetary transfers add roughly 11 %, price and market controls reduce revenues by about 25.2%. In rupee terms, input subsidies of around INR 4 lakh crore are outweighed by output restrictions that reduce revenues by about INR 14.2 lakh crore, leaving farmers roughly INR 10 lakh crore worse off, or over INR 75,000 per farmer.

Think of it this way: the government gives farmers a discount on seeds and fertiliser with one hand, then takes away more through artificially lowered crop prices with the other.

Who actually benefits? Procurement-linked subsidies help a narrow group of farmers: mainly wheat and paddy farmers in Punjab, Haryana, and parts of Uttar Pradesh. The vast majority of farmers in other states and for different crops face depressed prices without compensatory procurement support. Meanwhile, the biggest beneficiaries of subsidies are often input suppliers, such as fertiliser companies, rather than farmers themselves. The combination of cheap inputs and controlled outputs leaves farmers dependent on government handouts but not prosperous.

### Why do consumer prices keep rising even when farmers earn so little?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/why-do-consumer-prices-keep-rising-even-when-farmers-earn-so-little/

It\'s one of Indian agriculture\'s cruellest facts: farmers [complain](https://www.ndtv.com/india-news/madhya-pradesh-farmers-hold-funeral-for-onions-as-prices-crash-9693807) they can\'t cover costs while selling onions at INR 5 per kg, yet consumers simultaneously [protest](https://www.hindustantimes.com/business/onion-prices-soar-to-rs-80-in-delhi-mumbai-rates-touch-5-year-high-in-november-101731299141876.html) prices of INR 80 per kg in retail markets. Both are right to feel squeezed. The late farmer leader Sharad Joshi captured this sentiment in a poem translated as "I sell my produce cheap, and die. You pay so much that you die too". So where does the money go? The answer lies in what happens between the farm gate and your kitchen. Between the farm gate and your kitchen, produce passes through one of the world\'s most fragmented and inefficient supply chains, and farmers capture very little of the value along the way.

First, agricultural produce in India typically [passes](https://prsindia.org/policy/analytical-reports/state-agriculture-india) through multiple hands: licensed traders, commission agents (*arhatiyas*), transporters, wholesalers, and retailers. Each layer is governed by different regulations, costs, and taxes: mandi fees, commission charges, transport costs, state taxes, and often informal payments to inspectors and gatekeepers. An RBI [survey](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2146943&reg=3&lang=2) revealed that for perishables like tomatoes and onions, farmers receive less than 30% of the final retail price. The remaining 70% gets consumed by the multiple hands it flows through.

Second, most Indian farmers lack access to cold storage or warehousing. Almost a [third](https://www.manufacturingtodayindia.com/indias-cold-chain-a-case-of-crippled-and-complex-infrastructure) of the total food produced in India is lost due to poor cold-chain technology. When the harvest arrives, supply floods the market simultaneously, driving prices down. Farmers must sell immediately and can\'t wait for better prices. Months later, when supplies dwindle, prices spike. This volatility creates a perverse cycle: traders and retailers must price in the risk of spoilage, sudden gluts, and unpredictable government interventions (such as export bans, import duty cuts, or stock limits). These risk premiums get passed to consumers.

Third, government policy often adds fresh shocks. Export bans are to \"protect consumers\" from high prices. Import duty cuts to flood the market. Stocking limits that discourage warehousing. The Essential Commodities Act plays a significant role in this by criminalising warehousing for when the government feels it is "necessary or expedient to do so for maintaining or increasing supplies." Each intervention seems rational in isolation, but creates unpredictability that raises costs throughout the chain. Think of it as a leaky pipe: water (value) enters at the farm gate, but by the time it reaches the consumer tap, much has been lost to friction, evaporation (wastage), and leaks (inefficiency) along the way. Who benefits? Ironically, often no one. Traders and intermediaries aren\'t getting rich; they\'re absorbing volatility and policy risk. Farmers stay poor. Consumers pay high prices. The real culprit is a system designed for control rather than efficiency.

The solution isn\'t to squeeze intermediaries further or impose more price controls. Instead, we need better infrastructure (cold storage, logistics), more competition (easier entry for new players), and predictable policies so that risk premiums can come down. When farmers can store their produce and sell when prices recover, when traders can invest in warehousing without fearing sudden stock limits, and when the distance between farmer and consumer is reduced, only then will the gap narrow.

### Why are farms in India so small and fragmented, and why does that matter?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/why-are-farms-in-india-so-small-and-fragmented-and-why-does-that-matter/

Land reforms after Independence aimed to break feudal concentration but instead produced extreme fragmentation. State-level ceiling laws, tenancy bans, and inheritance rules divided holdings across generations. Today, the [average operational holding](https://www.pib.gov.in/newsite/PrintRelease.aspx?relid=199780&reg=3&lang=2) is 1.08 hectares, and 86 per cent of farms are smaller than 2 hectares. In contrast, the average farm exceeds 170 hectares in the United States and about 17 hectares in the European Union. Small plots [make](https://www.bu.edu/econ/files/2009/09/Rosenzweig_Seminar-Paper.pdf) mechanisation costly, irrigation fragmented, and productivity low. They also weaken farmers' bargaining power and restrict access to formal credit. Fragmentation also ties [workers](https://www.niti.gov.in/sites/default/files/2022-11/Raising-Agricultural-Productivity-and-Making-Farming-Remunerative-for-Farmers.pdf) to low-return self-employment, even though non-farm jobs could raise incomes. India does not try to abolish small farms but to free them, so that size becomes a choice rather than a constraint.

### Why can't farmers freely buy, sell, or lease their land like other property owners?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/why-cant-farmers-freely-buy-sell-or-lease-their-land-like-other-property-owners/

Imagine you own a house, but the government decides who you may sell it to, restricts whom you may rent it to, and requires multiple approvals before a bank will accept it as collateral. Sounds absurd, yet this is the reality for millions who own agricultural land in India. Agricultural land operates under a regulatory framework fundamentally different from other property. These controls [trace back](https://personal.lse.ac.uk/ghatak/landref.pdf) to the land-to-the-tiller reforms of the 1950s and 1960s, when breaking feudal concentration and protecting tenants from eviction were urgent priorities. But what began as protection has calcified into a system that now restricts farmers\' economic freedom and mobility.

Restrictions on buying and selling: Most states cap the amount of agricultural land an individual can own, ranging from 5 to 20 hectares. Many also restrict sales to \"non-farmers\" or people from outside the state. These rules were meant to prevent land concentration and speculation, but they\'ve created new problems. A farmer who wants to consolidate holdings by purchasing a neighbour\'s plot may be blocked simply because doing so would breach the ceiling. A farmer who wants to exit agriculture and move to a city cannot easily sell at market value because the pool of eligible buyers is legally restricted. Urban families who inherited agricultural land but cannot farm it are left holding an asset they cannot freely sell or put to productive use.

Leasing restrictions are even more binding. Here\'s the paradox: many small farmers would benefit from leasing additional land to reach a viable scale. Many landowners would benefit from leasing out land rather than leaving it fallow. But formal leasing remains rare. Why? Tenancy laws in many states either [prohibit](https://ccs.in/sites/default/files/2022-08/land_law_report_-_final_0.pdf) leasing or impose restrictions, such as rental caps and the risk of land loss. Landowners fear that if they formally lease their land, they might never get it back. The result? [Research](https://niti.gov.in/sites/default/files/2023-02/Report-of-the-Expert-Committee-and-Model-Law-on-Agricultural-Land-Leasing.pdf) by Niti Aayog suggests that up to one-third of India\'s farmland is cultivated under informal oral leases, arrangements that have no legal standing. These invisible tenants can\'t access institutional credit (they don\'t officially farm the land), can\'t get crop insurance, and can\'t invest confidently in soil improvement because their tenure is insecure.

Why do these restrictions matter? Land that could serve as collateral for credit or as capital for starting a business sits locked, accessible only through complex bureaucratic processes to convert it to non-agricultural use. Farmers who want to expand their holdings cannot. When land can\'t be freely bought, sold, or leased, it stops being treated like an asset, and investment in productivity improvements falls.

When we treat farmers as capable decision-makers rather than people who need protection from their own choices, we enable both farming as an enterprise and smooth exits for those who want to leave.

### Why is it hard to shift farmland to non-agricultural use or use it as collateral?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/why-is-it-hard-to-shift-farmland-to-non-agricultural-use-or-use-it-as-collateral/

Agricultural land in India is a legal classification that determines what you can and cannot do with your property. Want to build a small food processing unit on your farm? Start a rural tourism venture? Each requires navigating a maze of approvals to convert land from \"agricultural\" to \"non-agricultural\" use. [Converting](https://ccs.in/sites/default/files/2022-08/land_law_report_-_final_0.pdf) land use requires permission from district collectors, revenue officials, and, sometimes, urban development authorities. Each state has different procedures, timelines, and fees. What might take months in one state can take years in another, if approvals come at all. Some states levy conversion charges as high as 40% of the land\'s market value. For a smallholder wanting to build a warehouse or workshop on a portion of their land, these costs can be prohibitive. Even willing farmers struggle to prove clear ownership, and digitised [records](https://vidhilegalpolicy.in/blog/is-land-digitisation-enough/) often replicate historical errors from patwari entries. This ambiguity affects up to 60% of rural parcels and severely hampers land conversions and access to credit, despite 95%+ digitisation.

The economist Hernando de Soto coined the term "[dead capital](https://yendieu.wordpress.com/wp-content/uploads/2009/04/the-mystery-of-capital.pdf)" to describe assets that are valuable, but cannot be leveraged in the formal economy. That\'s precisely what agricultural land becomes under the restrictions placed on it. Farmers are sitting on what might be their most valuable asset, but they can\'t easily use it to start a business, fund medical expenses, or invest in better farming equipment.

When titles are unclear and conversion is difficult, banks hesitate to accept agricultural land as collateral. Why take the risk if foreclosure and resale would be legally complex? In response, farmers turn to informal moneylenders who charge much higher interest rates. When farmers can confidently use their land as capital for whatever productive activity makes sense, they shift from being beneficiaries of government schemes to being genuine economic actors.

### Why do so many farmers grow water-hungry crops in dry regions?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/why-do-so-many-farmers-grow-water-hungry-crops-in-dry-regions/

It seems irrational at first glance: why do farmers in Punjab, when [facing](https://www.indiaspend.com/agriculture/punjab-farmers-struggle-amidst-plummeting-groundwater-levels-881460) severe groundwater depletion, continue growing water-intensive paddy? Why does Maharashtra\'s sugarcane belt expand in [drought-prone](https://www.gwp.org/contentassets/4d68c9bc5baa4096907a10a6b8ead5fb/iwp_droughts-and-sugar-industry-in-maharashtra-_18july2017.pdf) regions where water tables are falling? Are farmers simply unaware of the ecological damage they cause? Not at all. Farmers are responding logically to the incentives placed before them.

The government\'s Minimum Support Price (MSP) system [guarantees](https://www.pib.gov.in/newsite/PrintRelease.aspx?relid=199104&reg=3&lang=2) the purchase of paddy and wheat at announced prices. Farmers know that whatever they grow will be bought with no market risk. [Contrast](https://prsindia.org/theprsblog/msp-and-public-procurement) this with fruits, vegetables, pulses, or oilseeds, where prices fluctuate wildly, and procurement is limited or absent. Free or heavily subsidised electricity for irrigation makes pumping water seemingly costless. Fertiliser subsidies (skewed toward urea needed for paddy) further tip the scales. When the incremental cost of growing a water-hungry crop appears low, farmers will produce it.

The result? Punjab and Haryana became paddy-dominant zones despite falling aquifers. Maharashtra\'s sugarcane [occupies](https://www.oxfamindia.org/sites/default/files/2020-02/%23Human%20Cost%20of%20Sugar_Maharashtra%20Case.pdf) just 4% of the cropped area but consumes over 60% of the state\'s irrigation water. Ask yourself: if you were a farmer in Punjab, would you grow less water-intensive but riskier alternatives like fruits and vegetables when paddy offers a guaranteed income? When your neighbour who grows paddy receives regular payments while the vegetable grower faces price crashes, what would you choose? Give them the right incentives, and behaviour shifts rapidly.

### Are input subsidies for fertiliser, power, and water a safety net or a trap?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/are-input-subsidies-for-fertiliser-power-and-water-a-safety-net-or-a-trap/

Input subsidies for fertilisers, electricity, and irrigation were introduced with the noble intention of protecting farmers from volatile costs and supporting agricultural productivity. Seven decades later, India spends over INR 4 lakh crore annually on these subsidies, yet productivity has plateaued, environmental damage mounts, and farmers remain dependent. Subsidies have become both a safety net and a trap, offering short-term relief while creating long-term fragility.

Subsidies lower visible costs but produce distortions that ultimately harm the farmers they were designed to protect. Urea is subsidised far more heavily than phosphorus or potassium, encouraging nitrogen overuse while neglecting balanced nutrition. Free power causes tube wells to run for hours longer than needed, and flood irrigation becomes the default over drip or sprinkler systems. In Punjab, Haryana, Gujarat, and parts of Maharashtra, groundwater extraction now exceeds recharge, with the Central Groundwater Board classifying over 35% of assessment blocks as over-exploited. Farmers grow water-intensive paddy in water-scarce regions not because it makes agronomic sense, but because assured procurement and free power make it financially rational. Far from building resilience, these distortions lock farmers into resource-depleting practices that erode the very foundations of agricultural viability.

The fiscal burden of subsidies crowds out the investments that could make Indian agriculture genuinely productive. Every rupee spent on subsidies is a rupee not spent on agricultural research, rural roads, market infrastructure, or extension services. State electricity distribution companies, strained by subsidy burdens, are technically bankrupt and unable to maintain a reliable supply. The subsidy system thus perpetuates the fragility it claims to address, starving the sector of the structural support it needs.

Direct benefit transfers offer a more sustainable path than either the status quo or abrupt abolition. Sudden removal of subsidies would be devastating in the short term, leaving vulnerable farmers exposed without a transition mechanism. Shifting instead to direct cash transfers would preserve support while restoring price signals, giving farmers the flexibility to make decisions based on actual cost and need. Targeting support at incomes rather than inputs is the reform that could finally break the cycle of dependency.

### Does contract farming empower farmers?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/does-contract-farming-empower-farmers/

To assess whether contract farming benefits farmers, we must first clarify what the term means. Contract farming is a system in which farmers agree in advance to supply specific quantities at negotiated prices to buyers such as food processors or retail chains. Contracts promise price certainty, quality incentives, and direct access to organised buyers. But do they genuinely empower farmers, or simply replace old intermediaries with new, perhaps more sophisticated, ones?

At its best, contract farming [offers](https://www.fao.org/4/y0937e/y0937e03.htm) farmers several advantages over selling in spot markets. Price certainty before planting eliminates the anxiety of whether this season\'s tomato glut will crash prices just when you\'re ready to sell. The contract locks in a price or a price formula, dramatically reducing market risk. Many contracts include the provision of quality seeds, fertiliser, technical guidance, or credit. Explicit quality tiers reward higher-quality produce with higher prices, encouraging farmers to invest in improved practices, knowing that the investment will be rewarded. Contract companies often provide training in cultivation practices, pest management, and post-harvest handling, knowledge that improves productivity beyond the contracted crop.

This arrangement is standard practice across the rest of the economy. Steel, cups, buckets, and chairs are routinely sold on contract to wholesalers or retailers at fixed, pre-agreed prices. Farmers have historically been unable to enter equivalent arrangements for two reasons. APMC laws in most states require agricultural produce to pass through licensed mandi traders, making it legally ambiguous or impractical for a food company to contract directly with farmers and bypass the mandi entirely. The Indian Contract Act, designed for commercial parties with comparable legal resources, offered no agrarian-specific protections: no mechanism to resolve quality disputes at harvest, no remedy for delayed payment, and no recognition of the power asymmetry between a corporate buyer and a smallholder. Contract farming, therefore, operated in a legal grey zone that deterred both farmers and buyers from formalising arrangements.

At its worst, contract farming can exploit small farmers through delayed payments and rejection over manipulated quality standards during high-supply seasons. These abuses are real, but they are addressable through targeted legal and administrative reform. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services [Act](https://prsindia.org/files/bills_acts/acts_parliament/2020/Farmers%20(Empowerment%20and%20Protection)%20Agreement%20on%20Price%20Assurance%20and%20Farm%20Service%20Act,%202020.pdf), 2020, demonstrated that Parliament could design a national dispute-resolution framework for contract farming, routing grievances through Sub-Divisional Magistrates rather than civil courts, reducing the cost and delay that ordinarily deter small farmers from seeking redress. State agricultural marketing boards can build on this architecture by mandating contracts that [require](https://dmi.gov.in/Documents/APLCFS_Act2018.pdf) buyers to specify quality-rejection criteria before sowing rather than after harvest, and that impose penalty interest on delayed payments. Maharashtra\'s model contract farming agreement adopts this approach. Mandatory registration of contracts with the relevant marketing committee gives farmers a documentary record and a formal grievance forum. Where these mechanisms are enforced, the specific abuses of arbitrary rejection and withheld payment lose the informational asymmetry on which they depend.

On balance, contract farming [improves](https://www.theindiaforum.in/book-reviews/does-contract-farming-work) the position of Indian farmers relative to selling in spot markets, provided enforcement mechanisms are effective and accessible. Price certainty before planting, subsidised access to inputs, and technical training from the contracting company are real and documented gains. The risks, principally monopsonistic buyers manipulating quality standards or delaying payment during supply gluts, are genuine but are regulatory failures rather than structural features of the contract model itself. India\'s task is to build the legal and institutional infrastructure that makes the benefits of contract farming accessible to small farmers, not only to those large enough to litigate.

### Why are farmers still required or nudged to sell in government mandis?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/why-are-farmers-still-required-or-nudged-to-sell-in-government-mandis/

The mandi (agricultural market yard) system wasn\'t designed to trap farmers but to [protect](https://lokmarg.com/understanding-the-mandi-system-in-india/) them. In the 1960s and 70s, farmers in many regions faced powerful local buyers who could dictate prices, manipulate weighing scales, and delay payments indefinitely. Mandis promised protection: regulated trading spaces with licensed buyers, standardised weighing, transparent auctions, and dispute resolution mechanisms. Over time, what began as protection became restriction.

Most states enacted Agricultural Produce Market Committee (APMC) Acts that designated certain areas as \"notified\" where agricultural produce had to be brought for sale. Licensing systems [limited](https://old.ccs.in/sites/default/files/primer.pdf) who could buy from farmers, typically only licensed traders and commission agents operating within mandis. The stated rationale was to prevent exploitation, ensure farmers get fair weights and prices, and provide a regulated space for transactions.

However, competition dried up inside mandis. High entry barriers and limited licenses meant that a [handful](https://spmrf.org/dismantling-the-mandi-monopoly-a-manifesto-for-agricultural-marketing-reform/) of traders dominated each mandi. Instead of dozens of buyers competing for farmers\' produce, often just 3-5 license holders controlled transactions. The system operated as a monopsony.

Restrictions like movement controls, stocking limits under the Essential Commodities Act, and licensing requirements make it [risky](https://www.niti.gov.in/sites/default/files/2020-11/New_Farm_Acts_2020.pdf) or expensive to buy directly from farmers or to set up private market yards. Even when states formally allowed \"anywhere\" trade, on-ground compliance issues, local fees, and informal gatekeeping kept the mandi as the path of least resistance. As a result, farmers had to bring their produce to mandis, where limited competition meant they could not get the best price.

In states that have liberalised APMC laws, reforms have gradually allowed private market yards, direct purchase centres, contract farming, and electronic trading alongside traditional mandis. In [Karnataka](https://timesofindia.indiatimes.com/city/hubballi/karnataka-over-50-trade-shifts-out-of-apmcs-revenue-hit/articleshow/81086465.cms), legal changes have enabled a substantial share of trade, often more than half in some districts, to take place outside APMC yards. Farmers and traders shift when they can avoid fees or obtain better net prices. These changes have increased competitive pressure on APMCs. The problem is a mandatory monopoly. When farmers must use mandis and face limited competition within them, protection turns into restriction.

### Why is there so much food waste?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/why-is-there-so-much-food-waste/

India\'s agricultural infrastructure gap is staggering. We lose an estimated [35%](https://www.sciencedirect.com/science/article/abs/pii/S0168169923005495) of crops and 15-20% of fruits and vegetables to spoilage every year. Food worth billions that never reaches consumers. There are multiple reasons for this. India's cold chain [coverage](https://www.financialexpress.com/market/stock-insights/indias-broken-cold-chain-is-a-rs-2-3-trillion-bottleneckand-these-2-niche-giants-just-found-the-key/4132626/) remains thin, warehousing capacity is far [below](https://www.grantthornton.in/globalassets/1.-member-firms/india/assets/pdfs/evolving_landscape_of_warehousing_and_logistics_in_india.pdf) demand, and food processing remains [underdeveloped](https://link.springer.com/article/10.1007/s12116-025-09462-6) relative to our agricultural output. Why hasn\'t private investment filled this gap? After all, building cold storage or processing facilities should be profitable if they reduce waste and add value. The problem isn\'t a lack of opportunity but legal risk.

Consider a straightforward business model. You invest INR 10 lakh in cold storage for onions and potatoes. You plan to buy when supply is high and prices are low, store the produce, then release it when supply tightens and prices recover. Your profit comes from this seasonal arbitrage. Now, alarmed by consumer inflation, the government imposes stock limits under the Essential Commodities Act, bans exports under the Foreign Trade Act to keep domestic supplies high, and then cuts import duties to introduce competing supplies from abroad.

Overnight, your carefully modelled business becomes unviable. You\'re stuck with stored produce you can\'t sell profitably, and you might even face penalties for exceeding stock limits. This isn\'t hypothetical. It happens repeatedly with onions, potatoes, pulses, and edible oils. In 2019, the government [imposed](https://www.pib.gov.in/newsite/PrintRelease.aspx?relid=194878&reg=3&lang=2) stock limits on onions. In 2020, export bans were imposed on [onions](https://apeda.gov.in/sites/default/files/dgft_notifications/Notification31_28.09.2020.pdf). In 2022, export restrictions were imposed on [wheat](https://content.dgft.gov.in/Website/dgftprod/9032ac12-29a8-4a67-8e3b-bd0dc07c39a5/Noti%2006%20Eng.pdf) and [rice](https://content.dgft.gov.in/Website/dgftprod/e51d35f2-910e-48ac-9e5e-32cbac228402/Noti%2031.pdf).

Each intervention can seem justified in isolation: controlling consumer prices is a legitimate policy goal. But the cumulative effect is to make agri-infrastructure investment extraordinarily risky. Build cold storage for pharmaceuticals, and no policy change will make your entire investment obsolete overnight. In agriculture, it happens regularly, and investors have learnt to price that risk in, or to avoid the sector entirely. Until policy unpredictability becomes manageable through clear, rules-based thresholds for export restrictions and stock interventions, private capital will not solve India\'s infrastructure deficit. The waste is not a market failure. It is a policy failure.

### Why does the Food Corporation of India buy and hold such large grain stocks?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/why-does-the-food-corporation-of-india-buy-and-hold-such-large-grain-stocks/

The Food Corporation of India (FCI) is one of the world\'s largest grain handlers, typically [holding](https://www.igrain.in/posts/fcis-central-pool-stocks-strong-in-october-2025) up to 700 lakh tonnes of wheat and rice. These stocks far exceed what\'s needed for food security buffers. So why does FCI hold so much grain, and what are the consequences?

The Food Corporation of India was [established](https://dfpd.gov.in/food-corporation-of-india/en) in 1965 with three core [objectives](https://dfpd.gov.in/vision-and-mission/en):

1.  Procure at MSP to provide price assurance to farmers (mainly wheat and paddy)

2.  Maintain strategic buffer stocks for food security and price stabilisation.

3.  Supply the Public Distribution System (PDS) that provides subsidised grain to ration cardholders.

These three objectives have led to a permanently high holding of these agricultural commodities. First, FCI is [required](https://icrier.org/pdf/Working_Paper_283.pdf) to purchase all wheat and paddy offered at MSP in key states (Punjab, Haryana). This policy is known as open-ended procurement. When production is high, procurement surges. Unlike a regular business that might say \"we have enough,\" FCI keeps buying. Second, the government sets buffer stock [requirements](https://cag.gov.in/uploads/download_audit_report/2023/Report-No.-20-of-2023_PA-on-FCI_English-PDF-A-066b9d3c33f4c35.05840530.pdf) high, typically 210 lakh tonnes of rice and 135 lakh tonnes of wheat. But actual stocks often run double or triple these norms, especially after bumper harvests. Finally, the National Food Security [Act](https://nfsa.gov.in/portal/nfsa-act) entitles about 800 million Indians to subsidised grain. It requires FCI to maintain enormous stocks to meet distribution needs.

Why are these large stocks a problem? Storing millions of extra tonnes costs money: warehousing fees, labour, interest on the capital tied up, and transportation. Estimates suggest excess stocks [cost](https://cag.gov.in/uploads/download_audit_report/2023/Report-No.-20-of-2023_PA-on-FCI_English-PDF-A-066b9d3c33f4c35.05840530.pdf) the exchequer INR 30,000-40,000 crore annually in avoidable carrying costs. Despite investment in storage, some grain deteriorates, especially when stored beyond optimal periods. Rats, moisture, and inadequate facilities take their toll.

FCI\'s grain mountains are the physical consequence of a procurement system that encourages open-ended purchasing commitments, politically untouchable buffer norms, and a distribution entitlement covering two-thirds of the population, which combine to make large stocks structurally inevitable. Reforming FCI means reforming the three mandates that drive it: capping procurement at genuine buffer requirements, decoupling income support to farmers from the obligation to buy whatever they grow, and targeting PDS distribution more precisely so that entitlement volumes reflect actual need. Until those upstream decisions change, the grain will continue to accumulate, and the exchequer will continue to pay to store, insure, and eventually write off what it cannot distribute.

### Why is agricultural trade policy so unpredictable, and what does that do to investment?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/why-is-agricultural-trade-policy-so-unpredictable-and-what-does-that-do-to-investment/

Agricultural trade policy in India is characterised by one word: unpredictability. Export bans were announced suddenly. Import duties changed overnight, and stock limits were imposed without warning. Movement restrictions appear and disappear. This system has profound consequences for investment, productivity, and ultimately farmers\' prosperity. But why is trade policy so unpredictable?

Politicians fear consumer anger over high food prices more than they fear farmer distress over low prices. When prices spike, the impulse is to act immediately. Banning exports means farmers may lose money, but consumers are placated. Unlike central banks that set interest rates through rule-based frameworks with some insulation from political pressure, agricultural trade decisions often respond to immediate political pressures.

What does unpredictability do to investment? Build a warehouse to store wheat, onions, or pulses, and your business model depends on the price spread between the harvest and lean seasons. But if export bans or stock limits can wipe out your arbitrage opportunity overnight, why invest? Importers depend on a continuous, reliable supply. Many major importers of Indian agricultural goods have shifted to other markets because they do not know whether the goods they ordered from India will arrive. Such uncertainty kills the export market and harms farmers\' ability to earn money from global buyers.

### Why do many farmers say they would leave agriculture if they could?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/why-do-many-farmers-say-they-would-leave-agriculture-if-they-could/

Survey after survey reveals that around [75%](https://www.downtoearth.org.in/environment/indias-deepening-farm-crisis-76-farmers-want-to-give-up-farming-shows-study-43728) of farmers would leave farming if they had alternative employment options. Many actively discourage their children from taking up agriculture. This is a rational response to the economic reality of small-scale farming in India.

With average holdings of just 1.08 [hectares](https://prsindia.org/policy/analytical-reports/state-agriculture-india), most farmers operate at a subsistence scale. After accounting for input costs, labour, and loan repayments, net income is often below the minimum wage in other sectors, assuming adequate rainfall and stable prices. One bad season can eliminate an entire year\'s earnings. A significant [share](https://www.pib.gov.in/PressReleasePage.aspx?PRID=1605051&reg=3&lang=2) of rural households carries persistent agricultural debt. The combination of production uncertainty and financial precarity makes farming psychologically exhausting in ways that aggregate income data do not capture.

The structural problem runs deeper than individual distress. In [developed](https://ourworldindata.org/employment-in-agriculture) economies, 2--3% of the workforce works in agriculture and earns a decent livelihood. Farmers can do this because each farmer operates at scale, with mechanisation and market access that make the enterprise viable. India has roughly 50% of its workforce in agriculture. Even a substantial productivity improvement cannot generate incomes sufficient for that many people from that land base. The arithmetic does not work.

India needs to create the conditions for a dignified exit from agriculture. Simultaneously, for those who remain in farming, the path to viability runs through consolidation, market access, and the removal of the policy distortions that cap what farming can earn. Keeping 50% of the workforce in agriculture through a combination of inertia and the absence of alternatives is not a support system.

### Who really decides what a farmer grows on their land?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/who-really-decides-what-a-farmer-grows-on-their-land/

On paper, yes: farmers own or lease their land and bear the financial consequences of their cropping decisions. In practice, the government shapes those decisions so heavily through price guarantees, input subsidies, and trade controls that calling the result a free choice stretches the word past its useful meaning.

The most powerful shaping force is MSP procurement. The Food Corporation of India guarantees the purchase of wheat and paddy at announced minimum support prices, with no volume ceiling. A farmer who plants wheat in Punjab knows, before a single seed goes into the ground, that there is a buyer at a known price. No equivalent certainty exists for oilseeds, pulses, or vegetables, which are either excluded from effective procurement or covered only on paper, without the warehousing and payment infrastructure to make the guarantee credible. Farmers in Haryana and Punjab have not failed to diversify because they are uninformed. Instead, they have diversified away from diversification because the asymmetry in downside risk makes it irrational to do so.

Input subsidies create further distortions. Free electricity for agricultural pumping makes water-intensive paddy economically viable in Punjab even as the water table falls by roughly half a metre each year. Urea, the dominant nitrogen fertiliser, is subsidised at roughly 75% of its market price, while other fertilisers are not, which pushes farmers toward nitrogen-intensive cropping regardless of what soil health requires. The prices farmers face do not reflect the actual scarcity of water, nutrients, or land productivity. They reflect a set of political settlements reached in the 1960s and 1970s that have never been fundamentally revised.

Trade policy introduces a third distortion: unpredictability that functions like a tax on export-oriented crops. When domestic prices of onions, wheat, or pulses rise, the government\'s default response is an export ban or a minimum export price, often announced at harvest. A farmer who planted an export-oriented crop based on international price signals finds that the policy environment at sowing and at harvest is materially different. This is not a theoretical risk; it has recurred across multiple crops and multiple governments. Rational farmers update accordingly and avoid crops where sovereign intervention can make an entire season\'s output unmarketable at a stroke.

What would farmers grow in the absence of these distortions? We have partial evidence from the crops that fall outside the procurement system. Across Maharashtra, Karnataka, and Gujarat, farmers have shifted toward horticultural crops, oilseeds, and cash crops wherever irrigation and cold-chain access are available. Farmers have done so without any government instruction. In Madhya Pradesh, sustained investment in pulse procurement infrastructure between 2010 and 2018 led to a visible shift toward lentil cultivation. The cropping pattern changed when the institutional incentives changed. The lesson is not that farmers need guidance on what to grow. It is that they respond sensibly to the institutional environment they are given.

Removing the distortions entirely would require replacing open-ended MSP procurement with income-support mechanisms that decouple farmer revenue from cropping choice, making input subsidies crop-neutral through direct transfers, and committing to rules-based trade policy with announced thresholds rather than discretionary notification. None of this is politically straightforward. But the diagnostic point is clear: Indian cropping patterns are not principally the result of farmer preferences, agro-climatic conditions, or market signals. They are the predictable output of a set of policy instruments designed for a different era and never reformed to meet a different one.

### Why are farmers in developed countries wealthier than Indian farmers?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/why-are-farmers-in-developed-countries-wealthier-than-indian-farmers/

Visit a farm in Iowa, France, or Australia, and you\'ll see a stark contrast with rural India: comfortable farmhouses, modern machinery, reliable incomes, and children who often choose to continue farming because it\'s economically viable. Meanwhile, most Indian farmers struggle despite working equally hard. Why? The answer isn\'t about laziness, intelligence, or work ethic. Indian farmers work incredibly hard. The difference lies in structure: land size, institutional environment, and policy frameworks.

The typical American farm exceeds 170 hectares. In the European Union, it\'s about 17 hectares. India? Just 1.08 hectares, often fragmented into multiple plots. Why does size matter? Mechanisation, irrigation systems, and storage infrastructure only make economic sense at a minimum scale. A combine harvester, a drip irrigation setup, or a grain dryer costs roughly the same whether you farm 1 hectare or 10, but the per-hectare cost drops dramatically at a larger scale.

But scale alone does not explain the gap. Farmers in Iowa or Brittany operate within institutional environments that Indian farmers do not: clear land titles that function as collateral, trade policies that are predictable enough to plan around, and input prices that reflect real costs rather than political settlements. An American farmer who wants to switch crops, lease additional land, or sell directly to a processor can do so without navigating a regulatory system designed to prevent it. An Indian farmer who tries any of the same things encounters APMC restrictions, tenancy-law uncertainties, and trade bans that can arise without warning between planting and harvest.

### How can policy treat farmers as entrepreneurs who are free to stay, free to leave, and free to trade?

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/faq/how-can-policy-treat-farmers-as-entrepreneurs-who-are-free-to-stay-free-to-leave-and-free-to-trade/

This question is the logical destination of everything discussed above. The goal is not to favour large farms over small ones, to empty the countryside, or to import a foreign agricultural model. It is simpler and more demanding than any of those: treat farmers as capable adults who can manage their own land, capital, and commercial relationships.

Three categories of reform follow from that premise.

The first is land. Ceiling restrictions that prevent consolidation, tenancy laws that deter formal leasing, and title records riddled with historical errors together ensure that a farmer\'s most valuable asset cannot function as capital. Removing ownership ceilings, establishing open and legally recognised leasing markets, and completing the land survey and digitisation work that would give every plot an undisputed owner would each make land productive in the full economic sense. Farmers who want to expand could do so. Farmers who want to lease out and work elsewhere could do so without fear of losing their land. Streamlining conversion approvals would allow those who want to start a processing unit, a rural enterprise, or a warehouse on their own property to do so without navigating years of bureaucratic procedure.

The second is incentives. Input subsidies, MSP procurement, and water pricing currently combine to tell farmers, in effect, that the only rational choice is water-intensive cereal cultivation in areas that can least afford it. Replacing per-unit input subsidies with direct income transfers would restore price signals without removing support. Metering electricity and pricing water at a fraction of their real cost would make conservation financially rational, without requiring farmers to act against their own interests. Decoupling income support from specific crops, so that a farmer who switches from paddy to pulses does not lose income, would allow soil, water availability, and market demand to shape cropping patterns rather than procurement lists.

The third is markets. Farmers need access to the full range of commercial arrangements that every other sector takes for granted: spot markets, forward contracts, direct sales, digital trading platforms, and farmer-producer organisations. The mandi system can remain as one option among several, rather than the mandatory route. Trade policy needs a rules-based architecture, with announced thresholds for export restrictions, rather than discretionary notifications that make it irrational to grow for international markets. Contract farming, backed by accessible dispute resolution, registration requirements, and mandatory pre-sowing quality criteria, can offer small farmers the price certainty and access to inputs they cannot easily achieve on their own.

None of this requires the state to abandon farmers. It requires the state to stop making decisions for them. The policies described above constitute a coherent programme, and each element reinforces the others. Secure land tenure makes contract farming more negotiable. Crop-neutral income support makes diversification viable. Predictable trade policy makes cold-chain investment worth the risk. The connecting thread is straightforward: when farmers are free to stay, free to leave, and free to trade, agriculture stops being a system that manages dependency and starts being one capable of generating prosperity.

## Videos

### The Case for Contract Farming

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/videos/the-case-for-contract-farming/

Contract farming allows farmers and buyers to agree on prices before sowing, reducing uncertainty and encouraging investment. This short explores how the model works and why many farmers choose it.

### The Policy Behind India's Food Waste

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/videos/the-policy-behind-indias-food-waste/

India produces enough food to feed millions, yet a huge share is lost before it reaches the market. This short explores how unpredictable government intervention can discourage investment in storage infrastructure.

### Why Farming Pays So Little in India

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/videos/why-farming-pays-so-little-in-india/

India is one of the world's largest agricultural producers, yet many farmers remain poor. This short explores how land policies and fragmented farms have contributed to low productivity and low incomes.

### Why India Stores Grain It Can't Use

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/videos/why-india-stores-grain-it-cant-use/

The Food Corporation of India holds two to three times the grain the government says it needs for food security. This short explores how a policy of near-unlimited procurement at the Minimum Support Price leaves taxpayers paying tens of thousands of crores to store surplus grain that sometimes rots before it is used.

### Why So Many Indian Farmers Want to Quit

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/videos/why-so-many-indian-farmers-want-to-quit/

Around three out of four Indian farmers say they would leave farming if they could, not because they dislike it, but because tiny plots and thin margins mean it barely pays. This short explores why no country has grown rich with half its workforce on one-hectare farms, and why the answer is better jobs outside agriculture rather than trapping more people in it.

### Why Subsidies Aren't Making Farmers Richer

Source: https://liberty-lighthouse.vercel.app/topics/agriculture/videos/why-subsidies-arent-making-farmers-richer/

Despite extensive government support, many Indian farmers struggle to earn a decent income. This short examines how subsidies and market restrictions can work against each other.

## Syllabus

## Books

1. [The Mystery of Capital](https://yendieu.wordpress.com/wp-content/uploads/2009/04/the-mystery-of-capital.pdf) — Hernando de Soto

## Academic Papers

1. [Article on agriculture's exclusion from India's 1991 reforms](https://www.theeconomicsjournal.com/article/view/494/8-1-62) — The Economics Journal
2. [Seminar paper on farm size and productivity](https://www.bu.edu/econ/files/2009/09/Rosenzweig_Seminar-Paper.pdf) — Mark Rosenzweig, Boston University
3. [Paper on Indian land reform](https://personal.lse.ac.uk/ghatak/landref.pdf) — Maitreesh Ghatak, LSE
4. [Working Paper 283](https://icrier.org/pdf/Working_Paper_283.pdf) — ICRIER, on FCI and food-grain procurement
5. [Paper on post-harvest food loss in India](https://www.sciencedirect.com/science/article/abs/pii/S0168169923005495) — ScienceDirect
6. [Paper on the development of India's food processing sector](https://link.springer.com/article/10.1007/s12116-025-09462-6) — Springer

## Legal Statutes & Notifications

1. Essential Commodities Act, 1955
2. Foreign Trade (Development and Regulation) Act, 1992
3. Indian Contract Act, 1872
4. Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services [Act, 2020](https://prsindia.org/files/bills_acts/acts_parliament/2020/Farmers%20\(Empowerment%20and%20Protection\)%20Agreement%20on%20Price%20Assurance%20and%20Farm%20Service%20Act,%202020.pdf)
5. [Agricultural Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Model Act, 2018](https://dmi.gov.in/Documents/APLCFS_Act2018.pdf)
6. National Food Security [Act, 2013](https://nfsa.gov.in/portal/nfsa-act)
7. [2020 export notification on onions](https://apeda.gov.in/sites/default/files/dgft_notifications/Notification31_28.09.2020.pdf) — APEDA
8. [2022 export notification on wheat](https://content.dgft.gov.in/Website/dgftprod/9032ac12-29a8-4a67-8e3b-bd0dc07c39a5/Noti%2006%20Eng.pdf) — DGFT
9. [2022 export notification on rice](https://content.dgft.gov.in/Website/dgftprod/e51d35f2-910e-48ac-9e5e-32cbac228402/Noti%2031.pdf) — DGFT

## Reports

1. [Primer on Indian agricultural policy](https://old.ccs.in/sites/default/files/primer.pdf) — Centre for Civil Society
2. Economic Survey, [chapter on agriculture](https://www.indiabudget.gov.in/economicsurvey/doc/eschapter/echap06.pdf)
3. [State of Agriculture in India](https://prsindia.org/policy/analytical-reports/state-agriculture-india) — PRS Legislative Research
4. [Report on U.S. farm size](https://esmis.nal.usda.gov/sites/default/release-files/795776/fnlo0226.pdf) — USDA
5. [Demand for Grants Analysis 2025-26: Agriculture & Farmers Welfare](https://prsindia.org/files/budget/budget_parliament/2025/DFG_Analysis_2025-26_Agriculture_&_Farmers_Welfare.pdf) — PRS Legislative Research
6. [Agricultural Policy Monitoring and Evaluation 2025: India](https://www.oecd.org/en/publications/2025/10/agricultural-policy-monitoring-and-evaluation-2025_354e7040/full-report/india_a08610a6.html) — OECD
7. [Raising Agricultural Productivity and Making Farming Remunerative for Farmers](https://www.niti.gov.in/sites/default/files/2022-11/Raising-Agricultural-Productivity-and-Making-Farming-Remunerative-for-Farmers.pdf) — NITI Aayog
8. [Land law report](https://ccs.in/sites/default/files/2022-08/land_law_report_-_final_0.pdf) — Centre for Civil Society
9. [Report of the Expert Committee and Model Law on Agricultural Land Leasing](https://niti.gov.in/sites/default/files/2023-02/Report-of-the-Expert-Committee-and-Model-Law-on-Agricultural-Land-Leasing.pdf) — NITI Aayog
10. [Droughts and the Sugar Industry in Maharashtra](https://www.gwp.org/contentassets/4d68c9bc5baa4096907a10a6b8ead5fb/iwp_droughts-and-sugar-industry-in-maharashtra-_18july2017.pdf) — Global Water Partnership
11. [The Human Cost of Sugar: Maharashtra Case](https://www.oxfamindia.org/sites/default/files/2020-02/%23Human%20Cost%20of%20Sugar_Maharashtra%20Case.pdf) — Oxfam India
12. [Dismantling the Mandi Monopoly: A Manifesto for Agricultural Marketing Reform](https://spmrf.org/dismantling-the-mandi-monopoly-a-manifesto-for-agricultural-marketing-reform/) — SPMRF
13. [New Farm Acts 2020](https://www.niti.gov.in/sites/default/files/2020-11/New_Farm_Acts_2020.pdf) — NITI Aayog
14. [Evolving Landscape of Warehousing and Logistics in India](https://www.grantthornton.in/globalassets/1.-member-firms/india/assets/pdfs/evolving_landscape_of_warehousing_and_logistics_in_india.pdf) — Grant Thornton
15. [Report No. 20 of 2023: Performance Audit on FCI](https://cag.gov.in/uploads/download_audit_report/2023/Report-No.-20-of-2023_PA-on-FCI_English-PDF-A-066b9d3c33f4c35.05840530.pdf) — CAG
16. [Report on contract farming](https://www.fao.org/4/y0937e/y0937e03.htm) — FAO

## Articles & Blog Posts

1. [Madhya Pradesh farmers hold funeral for onions as prices crash](https://www.ndtv.com/india-news/madhya-pradesh-farmers-hold-funeral-for-onions-as-prices-crash-9693807) — NDTV
2. [Onion prices soar to Rs 80 in Delhi, Mumbai](https://www.hindustantimes.com/business/onion-prices-soar-to-rs-80-in-delhi-mumbai-rates-touch-5-year-high-in-november-101731299141876.html) — Hindustan Times
3. [India's Cold Chain: A Case of Crippled and Complex Infrastructure](https://www.manufacturingtodayindia.com/indias-cold-chain-a-case-of-crippled-and-complex-infrastructure) — Manufacturing Today India
4. [Is Land Digitisation Enough?](https://vidhilegalpolicy.in/blog/is-land-digitisation-enough/) — Vidhi Centre for Legal Policy
5. [Punjab Farmers Struggle Amidst Plummeting Groundwater Levels](https://www.indiaspend.com/agriculture/punjab-farmers-struggle-amidst-plummeting-groundwater-levels-881460) — IndiaSpend
6. [MSP and Public Procurement](https://prsindia.org/theprsblog/msp-and-public-procurement) — PRS Legislative Research
7. [Karnataka: Over 50% Trade Shifts Out of APMCs, Revenue Hit](https://timesofindia.indiatimes.com/city/hubballi/karnataka-over-50-trade-shifts-out-of-apmcs-revenue-hit/articleshow/81086465.cms) — Times of India
8. [India's Broken Cold Chain Is a Rs 2-3 Trillion Bottleneck](https://www.financialexpress.com/market/stock-insights/indias-broken-cold-chain-is-a-rs-2-3-trillion-bottleneckand-these-2-niche-giants-just-found-the-key/4132626/) — Financial Express
9. [FCI's Central Pool Stocks Strong in October 2025](https://www.igrain.in/posts/fcis-central-pool-stocks-strong-in-october-2025) — iGrain
10. [India's Deepening Farm Crisis: 76% Farmers Want to Give Up Farming](https://www.downtoearth.org.in/environment/indias-deepening-farm-crisis-76-farmers-want-to-give-up-farming-shows-study-43728) — Down To Earth
11. [Does Contract Farming Work?](https://www.theindiaforum.in/book-reviews/does-contract-farming-work) — The India Forum
12. [Understanding the Mandi System in India](https://lokmarg.com/understanding-the-mandi-system-in-india/) — Lokmarg

# Glossary

Source: https://liberty-lighthouse.vercel.app/glossary/

## MSP

Source: https://liberty-lighthouse.vercel.app/glossary/msp/

*Also known as: Minimum Support Price, MSPs*

Minimum Support Price — the government's floor price for select crops, primarily wheat and rice. A guarantee that procurement agencies will buy at this price if market rates fall below.

Introduced in 1965 as part of India's response to recurring food shortages, the Minimum Support Price was meant to insulate farmers from price volatility. In practice it has become a de facto procurement program for two crops, wheat and rice, in two states, Punjab and Haryana, while leaving most farmers in most regions outside its protection.

The MSP is set annually by the Commission for Agricultural Costs and Prices (CACP) and announced by the central government. Procurement agencies, primarily the Food Corporation of India and state agencies, purchase grain from farmers at the announced price.

Critics argue the system distorts cropping patterns, depletes groundwater, and fails to reach the small and marginal farmers it was originally meant to help. Defenders argue that without it, farmers in the procurement states would be at the mercy of trader cartels.

## Right to Education Act

Source: https://liberty-lighthouse.vercel.app/glossary/right-to-education-act/

*Also known as: RTE Act, RTE, Right to Education, Section 12(2), RTE Section 12(2)*

Indian legislation enacted in 2009 making free and compulsory education a fundamental right for children aged 6 to 14. Imposes input-based standards on schools and a 25% reservation for disadvantaged children in private schools under Section 12(2).

The Right to Education Act came into force in 2010 and was hailed as a landmark piece of social legislation. By making schooling a justiciable right, it shifted the relationship between the state, the school, and the child.

In practice it has had ambiguous results. The Act prescribes inputs — pupil-teacher ratios, classroom dimensions, playground sizes, library books per student — rather than learning outcomes. Private schools that fail to meet these inputs can be derecognised, regardless of whether their students are learning. Government schools, exempt from the same standards, face no such consequences.

Section 12(2) requires private unaided schools to reserve 25% of their entry-level seats for children from "disadvantaged" or "economically weaker" backgrounds, with the state reimbursing per-pupil costs at the rate it spends on its own schools. Reimbursement delays are routine, often stretching to several years, putting affordable private schools under acute financial strain.

Defenders argue the Act has expanded access and codified a long-overdue right. Critics argue it has hardened a regulatory model that protects badly-run government schools while squeezing the budget private schools that low-income families actually choose.

**Recommended reading:**

- [Reimbursements under RTE Section 12(2): Too Little, Too Late](https://ccs.in/node/159) — Centre for Civil Society
- [Ease of Operating Private Schools in India](https://ccs.in/sites/default/files/2024-08/gem-report-final.pdf) — Prashant Narang and Tarini Sudhakar

## school choice

Source: https://liberty-lighthouse.vercel.app/glossary/school-choice/

*Also known as: school-choice*

The principle that families should be free to choose the school their child attends, including private schools, with public funding following the student rather than going directly to a government school.

## voucher system

Source: https://liberty-lighthouse.vercel.app/glossary/voucher-system/

*Also known as: school voucher, school vouchers, voucher systems, education voucher, vouchers*

A school-choice mechanism where the state funds a parent-redeemable voucher rather than directly funding government schools. Parents choose where to enrol; schools compete for funding.

# Wiki

Source: https://liberty-lighthouse.vercel.app/wiki/

## 1991 Indian Economic Reforms (entity)

Source: https://liberty-lighthouse.vercel.app/wiki/1991-indian-economic-reforms/

Economic liberalisation measures launched by Manmohan Singh in 1991 that dismantled the licence-permit raj, spurred 7% annual GDP growth for two decades, and transformed India from aid beggar to net donor.

The 1991 Indian economic reforms, initiated by Finance Minister Manmohan Singh, marked a pivotal shift from central planning and the licence-permit raj to partial market liberalisation. Prior to 1991, India grew at just 3.5% annually, lagging behind Asian tiger economies. These reforms, building on creeping changes in the 1980s, ended the need for licences to produce, import, or expand capacity, fostering private enterprise.

Post-reform, India's per capita income rose from $360 in 1991 to $2,100 by 2020 before COVID-19. GDP averaged 7% growth for two decades, earning India'miracle economy' status akin to Asian peers. Agricultural self-sufficiency advanced; India became a net food exporter, including rice, even during droughts. Poverty reduction was substantial, with estimates like the World Poverty Clock showing a drop to 5.3% by 2018 and UNDP reporting 271 million lifted from extreme poverty between 2005-2016.

Geopolitically, India transitioned from G-77 leadership demanding aid to T-20 membership among top economies, gaining US support for UN Security Council permanency. Despite successes, reforms were deemed half-baked, ranking India 121st in the Heritage Institute’s Index of Economic Freedom ('mostly unfree'). Growth decelerated post-2016 due to incomplete reforms, weak judicial enforcement, poor education, and barriers to business exit. Nonetheless, 1991 reforms qualitatively transformed life, eliminating scarcities like decade-long waits for vehicles or consumer goods.

## Indian Railways (entity)

Source: https://liberty-lighthouse.vercel.app/wiki/indian-railways/

India's government-owned railway network, historically operated by over 20 private companies before progressive nationalization starting in 1900 and accelerated in 1920.

Indian Railways is portrayed as unsafe, unclean, and of low quality, leading to public acceptance of issues like filthy platforms, poor train food, and frequent accidents, such as the July 10 derailing of the Kalka Mail. Post-1947 independence, frequent changes in railway ministers have failed to improve services due to its status as a government monopoly.

Historically, Indian Railways was operated by more than 20 private companies. The Great Indian Peninsula Railway Company was transferred to state ownership on July 1, 1900. A pivotal development occurred in 1920 when the East India Railway Committee, chaired by Sir William Acworth, recommended the nationalization of all remaining private railway companies, marking a major shift toward full government control.

Contemporary issues reflect characteristics of a government monopoly. The Controller and Auditor General (CAG) reported that of the ₹4,600 crore allocated for safety works from 2003 to 2008, more than 50 percent remained unspent. Over 86,108 vacancies in safety-category posts persisted unfilled. Additionally, the Research Design and Standards Organisation (RDSO) was behind schedule in developing technologies to mitigate risks to passengers and users.

The source contrasts this with economic theory, noting that railways are excludable and rivalrous, not fitting Paul Samuelson's definition of public goods (non-rivalrous and non-excludable, like lighthouses or national defense), thus providing no economic justification for exclusive government production. It calls for privatization to introduce competition and creative destruction for improvement.

## Licence-Permit Raj (entity)

Source: https://liberty-lighthouse.vercel.app/wiki/licence-permit-raj/

India's pre-1991 regulatory regime under Nehru and Indira Gandhi requiring government licences for production, imports, and capacity expansion, leading to chronic shortages and 3.5% annual growth.

The licence-permit raj, prevalent during the Nehru-Indira Gandhi era, embodied central planning where individuals and firms needed government licences to produce, import, or expand industrial capacity. This system assumed socialist rulers knew better than citizens what to produce or consume, punishing productivity gains with jail for exceeding quotas.

It created pervasive scarcities unimaginable today. In the 1970s, cars required seven-year queues, scooters nine years; HMT held a watch monopoly, making them dowry staples. Essentials like Amul milk powder or cement involved pulling strings or endless waits, with cement often spoiling before use. All justified as 'public interest.'

Economically, it stifled growth to 3.5% annually till 1980, half the rate of market-oriented Asian tigers like Singapore, which India dismissed as Western puppets. High taxes under Indira Gandhi—97.7% income tax plus 3.5% wealth tax—failed to reduce inequality, instead fueling black money, corporate dishonesty, and doubled absolute poverty over three post-independence decades as population grew.

The regime persisted until creeping reforms in the 1980s and bold 1991 liberalisation dismantled it, unleashing private initiative and miracle growth. Yet remnants hinder full potential, underscoring the system's legacy of inefficiency.

## Swaminathan S. Anklesaria Aiyar (entity)

Source: https://liberty-lighthouse.vercel.app/wiki/swaminathan-s-anklesaria-aiyar/

Indian economist, journalist, and columnist known for 'Swaminomics' in The Times of India, former editor of major dailies, and advocate for economic liberalisation.

Swaminathan S. Anklesaria Aiyar, popularly known as Swami, is a prominent Indian economist and journalist. A graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford, he has shaped economic discourse through editorial roles and commentary.

He edited Financial Express (1988-1990) and The Economic Times (1992-1994), served as India correspondent for The Economist for two decades, and is currently Consulting Editor at The Economic Times and a research scholar at the Cato Institute. A frequent World Bank and Asian Development Bank consultant, Aiyar is best known for his weekly Times of India column, 'Swaminomics,' analyzing policy and growth.

Beyond journalism, Aiyar engages in social investing via the Mukundan Charitable Trust. He co-promoted micro-finance institutions—Arohan in Kolkata, Sonata in Allahabad, and Mimo Finance in Dehradun—and serves on the board of Artisans Micro Finance Ltd, aiming to empower artisans as share-owning millionaires. He is also developing medical ships on the Brahmaputra River to provide healthcare to remote islands.

Aiyar's writings, like his analysis of 1991 reforms, critique socialism's failures and advocate market-oriented policies for India's prosperity.

# Spontaneous Order (federated)

Source: <https://spontaneousorder.in/>

## Girl Math: From Public Toilets to Public Policy

Original: https://www.spontaneousorder.in/p/girl-math-from-public-toilets-to

Published: 2026-08-20T11:27:46.357Z

> An everyday conversation with my girlfriends revealed how all of us employ various strategies to “hold it in” (avoiding urination) in the absence of safe sanitation.

[

![](https://substackcdn.com/image/fetch/$s_!wLB9!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe1c47f21-51b7-4a7b-bb49-efad3b43d650_1461x1077.png)



](https://substackcdn.com/image/fetch/$s_!wLB9!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe1c47f21-51b7-4a7b-bb49-efad3b43d650_1461x1077.png)

An everyday conversation with my girlfriends revealed how all of us employ various strategies to “hold it in” (avoiding urination) in the absence of safe sanitation. This “girl math” includes deliberately not hydrating enough and using the washroom several times before leaving home or the office. It also means carrying the extra weight of toilet-seat sanitiser spray, tissues, wet wipes and paper soap, just in case an emergency public-washroom visit becomes unavoidable. This is just an ordinary day for millions of Indian women. And that is before we even consider the ordeal of a menstruating woman trying to find running water to change her menstrual cup. The Annual Status of Education Report (ASER) has repeatedly released data on ‘locked toilets’ in schools across the nation, indicating that women train for this ‘toilet avoidance’ behaviour pattern since childhood, compromising on their health and dignity.

These everyday compromises are not just individual inconveniences. They are evidence of how easily women’s realities can disappear when they are not adequately captured in the data that informs policy. Data is often described as the backbone of all decision-making. The government uses it to decide its spending priorities - where to build roads, hospitals, schools and transport networks. Business owners use it to analyse market trends. Researchers use it to understand the gaps. But data will only work when it reflects the realities of everyone it is expected to represent. More often than not, Indian women disappear in the averages.

In her book, *“Invisible Women”*, Caroline Criado Perez argues that societies repeatedly treat men’s experiences as the “default” while women’s experiences become invisible because either they are not collected or not analysed distinctively. This gender data gap shapes and affects everything from car mortality tests to the importance of footpaths in urban planning. India is no exception.

Take urban mobility. Every day, millions of women travel across cities, but they travel differently from men. An Indian man may commute between home and work. An Indian woman, however, may drop a child at school, visit the boutique, buy medicines at the pharmacy for an elderly parent, travel to work, and stop at a sabzi-mandi before returning home, truly displaying the phenomenon of “trip chaining.” If transport surveys measure only the conventional home-to-work commute, they fail to capture these women’s actual travel patterns. When these patterns are not captured, transport planning can overlook the everyday barriers women face. Vendors and parked vehicles often make footpaths inaccessible, while poorly lit bus stops and inadequate last-mile connectivity force women to make multiple trips, adding to the burden both physically and financially. Additionally, public transport becomes inaccessible after dark because safety concerns again force women to shorten or alter their journeys. These are not merely infrastructure problems. They are evidence problems.

And this is why counting girls is not enough, but understanding their experiences is equally important. The idea is not just to separately collate statistics for men and women, but to recognise that formulating better policies requires different and nuanced data collection. Without this distinction, policies and schemes risk serving an imagined average citizen rather than real people with different needs.

## **What counting women would actually look like**

None of this needs new technology; it just needs better questions to be asked consistently. A city budgeting for public toilets should report usable toilets per thousand women, not per thousand people, because the average hides the real gap. Education departments should track whether school toilets have doors, water, and safe disposal, not just whether a toilet block technically exists. Labour surveys should count unpaid domestic work as economic activity, recognising the millions of women whose labour remains invisible simply because it is not captured by conventional definitions of work.

India does not lack the institutions to collect gender data. It lacks the sustained priority and funding to make that data comprehensive, regular and useful for policy. As of December 2020, only 44.3% of the gender-specific SDG indicators needed to monitor progress were available for [India](https://data.unwomen.org/country/india), leaving major blind spots regarding unpaid care work, labour market outcomes, pay gaps, and women’s access to assets.

## **Why this is not a side issue**

A toilet is where privacy, dignity, safety, and health all meet in one small physical space. This is exactly why it is one of the clearest places where missing gender data becomes a literal locked door. If a system cannot get something this basic right, it is worth asking what else is being planned using half a picture of the population.

The fix does not start with a grand policy document. It starts with a question that should have been asked decades ago: who is this space actually built for, and did anyone ask women what they need to use it safely and with dignity? The next time you stand in a long queue outside a women’s washroom, or hear that a school toilet is locked again, remember this is not bad maintenance. It is what happens when half of India goes missing from the data that shapes its cities, schools, and budgets. Counting women properly is not a favour to them. It is the minimum requirement for a country that works for everyone in it.

* * *

About the Author:

Shalini was a scholar at the Indian School of Public Policy with expertise in stakeholder management, international affairs, and policy research. She is passionate about education policy and policy advocacy, with strong analytical and communication skills. She is currently a Project Consultant at APCO Worldwide.

## How Smart Are India's SMART Cities? 

Original: https://www.spontaneousorder.in/p/how-smart-are-indias-smart-cities

Author: Spontaneous Order

Published: 2026-08-14T08:37:15.040Z

> A newly laid road near my neighbourhood in Ayodhya was satisfying to look at. Days later, workers ripped it open again to lay a water pipeline, because no one had thought to loop in the water departme

By: Nimmi Verma and Titiksha Raushan

A newly laid road near my neighbourhood in Ayodhya was satisfying to look at. Days later, workers ripped it open again to lay a water pipeline, because no one had thought to loop in the water department before the tar went down. Bilaspur tells the same story with a different face. A stretch of road there carries brand-new smart traffic signals and CCTV cameras, standing a few feet from a drain that has overflowed, ignored, for months.

[

![](https://substackcdn.com/image/fetch/$s_!LU7p!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fde193460-503b-4b1a-b4a5-b3caeb595e2a_943x528.png)



](https://substackcdn.com/image/fetch/$s_!LU7p!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fde193460-503b-4b1a-b4a5-b3caeb595e2a_943x528.png)

We are residents of Bilaspur and Ayodhya, and this piece began as a casual conversation between us about our own cities. What started as small talk turned into a pattern neither of us could shake. Freshly lit roads get dug up within weeks. Cameras watch over drains that nobody drains. Both cities sit under the same Smart Cities Mission, the same funding formula, the same guidelines, yet a handful of other SCM cities show none of this neglect. That gap is the puzzle driving this piece: why does one policy produce such different outcomes on the ground?

The Smart Cities Mission was launched in 2015 with an ambitious promise: to transform Indian cities through institutional, physical, social and economic infrastructure, complemented by digital technologies and data-driven governance (MoHUA, 2015). A decade later, judging its success is far from straightforward. Some cities have woven technology into everyday service delivery. Others continue to struggle with basic urban services despite visible investment in smart infrastructure. The policy is the same everywhere. The experience of living with it is not.

**State capacity: The missing piece**

As residents of Bilaspur and Ayodhya, we experience the SCM not through policy documents but through everyday life. A smart traffic signal, a command centre, a newly laid road, and a CCTV system are all visible. The institutional systems that make them work are not.

Urban transformation does not happen through infrastructure alone. It depends on the less visible capabilities of the institutions responsible for planning, financing, implementing, monitoring and maintaining that infrastructure over time. Pritchett, Andrews and Woolcock call this gap isomorphic mimicry: governments sustain legitimacy by copying the outward form of functional, “modern” institutions without building the functional capability that would make those forms actually work. In Bilaspur and Ayodhya, that mimicry looks like beautification drives and digital infrastructure standing in for the administrative capacity needed to run urban systems well. Reforms fail here not because local governments resist reform, but because the policy elites who design them import “best practice” models shaped by their own experience rather than the realities of the cities meant to adopt them.

Over time, that gap between form and function produces what Pritchett, Andrews and Woolcock call a capability trap: governments keep adopting new reforms and institutional structures without building the capacity to make any of them work. Coordination between departments cannot fix this. Before departments can coordinate with each other, each one needs the capacity to do its own job.

**Overlooked basics**

This kind of capability is exactly what a Smart City proposal fails to reward. Beautifying existing infrastructure and installing “SMART” systems is comparatively easy, and both are visible and marketable. The harder work happens behind the scenes, and none of it makes for a ribbon-cutting.

Under the SCM, a Special Purpose Vehicle handles implementation, while water, electricity, roads, telecom, sewerage and transport often remain under separate departments. Policy guidelines and CAG audits have both identified this coordination gap (CAG, 2025), yet it persists, at least in Ayodhya and Bilaspur.

A structural flaw runs through the policy: SCM projects are layered onto weak foundations in water supply, sanitation, waste management, electricity, and mobility, rather than fixing those foundations first. Tier 3 urban local bodies like Bilaspur and Ayodhya compound the problem. Their technical teams are small, their monitoring mechanisms limited, and their reliance on external consultants high. Departments need the capacity to do their own jobs before they can meaningfully coordinate with each other. Yet, the policy treats coordination as achievable independent of the capacity gaps that undermine it.

That gap between promise and practice raises a simple question: what actually constitutes a “smart” city? When technological interventions coexist with unreliable basic services and growing procedural burdens, the promise of “smart” risks becoming a performance rather than a lived urban reality.

**A City that did differently**

Visiting both large and small cities across India as residents of Tier 3 cities ourselves, we came to a simple conclusion: technology and infrastructure alone cannot build a genuinely “smart” city. Efficient delivery depends on the invisible infrastructure beneath it, the administration that makes it run. To test that claim, we turned to Udaipur as a contrast. Like Bilaspur, it is the headquarters of an administrative division. Like Ayodhya, it is a major cultural tourism destination.

What sets Udaipur apart is the distinction it draws between infrastructure and institutional capability. Municipal audits in Bilaspur and Ayodhya reveal deficiencies in financial management, project monitoring, contractor oversight and administrative capacity. Udaipur’s implementation record tells a different story, one that consistently foregrounds the less visible work of project delivery (USCL, 2023). Its Smart City documentation repeatedly treats coordination among the municipal corporation, district administration, engineers, planners, financial officers and project consultants as integral to implementation, not as an afterthought. Set against Bilaspur and Ayodhya, Udaipur shows that smart technologies cannot substitute for weak institutional systems. They depend on those systems to function at all.

Udaipur has not cracked the code. Independent audits of the city reveal persistent weaknesses in the municipal systems meant to sustain urban transformation. Mandatory five-year execution plans and annual municipal plans went unprepared. Annual accounts were delayed for years. Asset registers remained incomplete. Monitoring mechanisms for public infrastructure, public toilets among them, proved ineffective, leaving poor maintenance in place despite contractual provisions for inspection and penalties.

Even so, Udaipur’s emphasis on administrative coordination, multidisciplinary implementation teams and sustained stakeholder engagement supports the same proposition this piece has been building towards: urban transformation depends on organisational capability as much as on technological investment. The contrast with Bilaspur, then, is not simply about the quality of finished infrastructure. It lies in how central institutional coordination is to planning, sustaining and delivering that infrastructure over time.

**Looking beyond**

Taken together, these cities unfold the nuanced story of SCM that operates across municipalities with differing levels of administrative capability, but the real divide is not between “successful” and “unsuccessful” cities but between different degrees of administrative readiness. Technology and infrastructure may be visible symbols of progress, but institutional capacity is what ultimately defines the value of delivery years after a ribbon-cutting ceremony.

Every city under SCM got the same blueprint, but not every city possessed the common starting point to implement the vision. This argument doesn’t make the Smart City Mission a failure; rather, it shifts attention from policy work to analysing what truly makes a city “smart”.

*The next time you walk through your neighbourhood, look beyond brand-new Smart Traffic signals and freshly laid roads and ask yourself: What story do my city’s institutions tell?*

* * *

About the Authors:

Nimmi Verma is a Master’s student in Public Administration with an interest in public policy, particularly education and gender. She previously worked as a Team Co-Lead, Policy and Advocacy Intern at an education-focused think tank, contributing to policy research and advocacy initiatives.

Titiksha Raushan is a Master’s student in Sociology at the Delhi School of Economics. Her interests include public policy, governance, inequality, and gender. She has research experience in areas such as vaccine hesitancy, menstrual health, education policy, and qualitative fieldwork.

## Submission Guidelines

Original: https://www.spontaneousorder.in/p/submission-guidelines

Published: 2026-08-12T08:57:07.823Z

# What kind of articles do we publish?

We publish blogs that:

1.  **Have an argument:** We publish blogs that argue for a point of view. A simple explainer or description will not suffice. You must put forth an argument. That requires claims and evidence to back them up.
    
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5.  **Are concise**: Say what needs to be said and no more. Remove repetition, unnecessary background, and points that do not contribute to the argument. A shorter article with a clear argument is better than a longer article that loses its focus.
    

# Language

Write in simple, clear English. Remember, your aim is to convince the reader, not to dazzle them with your vocabulary. Use British spelling. Prefer short, direct sentences. Use concrete words and active voice. Avoid jargon, unnecessary technical terms, and academic language unless they are necessary to make your argument.

A good blog post for this website will be between **600** and **1,200 words**. Longer pieces are sometimes published if the argument warrants it.

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# What do we not publish?

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We do not publish:

1.  **News reports**: Do not simply report on a new policy, government announcement, court ruling, or political development. Use current events as a starting point for analysis if they help you make a broader argument.
    
2.  **News commentary:** A reaction to yesterday’s events is not enough. We want to understand what it means, why it happened, or what it tells us about a broader policy question.
    
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A useful test is: Would this article still be worth reading six months from now? A good policy article may be prompted by something in the news, but the news should be the starting point, not the subject.

# AI policy

We understand that you will use AI to help you research your piece, but please don’t submit an article generated by AI.

# Email for submission

If you would like to send us an article, share it with us at eacademey@ccs.in

## Who Owns Delhi's Stray Cattle? Traceability, Accountability, and Public Roads 

Original: https://www.spontaneousorder.in/p/who-owns-delhis-stray-cattle-traceability

Author: Spontaneous Order

Published: 2026-08-06T11:33:32.407Z

> The moment I step outside my PG to go to the library or Centre for Civil Society (CCS) office, my movement is often interrupted by cattle occupying the narrow lanes of Vijay Nagar near Delhi Universit

By: Nisshat Sheikh

The moment I step outside my PG to go to the library or Centre for Civil Society (CCS) office, my movement is often interrupted by cattle occupying the narrow lanes of Vijay Nagar near Delhi University’s North Campus. Sometimes there are one or two; at other times, an entire herd. These scenes are not unique to one neighbourhood -they are a familiar sight across much of Delhi.

Freely roaming cattle are more than an inconvenience. They contribute to traffic congestion, cause road accidents, and in some cases, even fatalities. A *[Hindustan Times](https://www.hindustantimes.com/cities/delhi-news/biker-19-killed-after-hitting-stray-cattle-in-central-delhi-101726509102103.html)* report from 2024 noted that three people died in cattle-related road accidents within a single month. Separately, a *[New Indian Express](https://www.newindianexpress.com/states/delhi/2025/May/29/crashes-cattle-chaos-recipe-for-disaster)* report, drawing on Delhi Police data, highlighted stray animals on roads as a contributing factor to road crashes, alongside poor lighting and other road safety concerns.

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At first glance, this appears to be a problem of weak municipal enforcement. My fieldwork, however, suggests something more fundamental. Many of the animals occupying the city’s roads are not abandoned but privately owned. The real challenge is not merely the presence of cattle in public spaces, but the absence of effective systems to trace ownership and enforce accountability, allowing the costs of private ownership to be borne by the public.

While speaking to a worker at one of the gaushalas in Gurmandi, North West Delhi, I discovered that not all cattle on the roads are abandoned. Many of them have owners. When asked why they let their cattle roam freely, some owners responded, *“These cattle are like our family members. Does anyone cage their family?”* Others argued that *“Delhi once had more open spaces where cattle could roam. Urbanisation and population growth have taken away those spaces, but that does not mean we should keep them tied up forever.”*

The owners of these cattle acknowledged that cattle create problems on the roads. However, they also pointed to their own constraints. With limited space to house their animals, many believe they have no option but to let them roam. Most owners agreed in principle that relocation would be acceptable. However, they argued that the absence of affordable alternatives within or around the city leaves them with little practical choice but to continue operating where they currently are.

Pedestrians, however, tell a different story. One resident complained that vehicles often cannot leave their lane because herds block the entrance. Apart from littering the roads and creating an unpleasant odour, cattle pose a genuine safety risk, especially for two-wheelers that skid on slippery roads. A university student even told me that she had to shift her PG because e-rickshaw drivers refused to enter lanes regularly clogged with cattle. These conversations reveal that the issue is not simply one of abandoned cattle, but of privately owned animals whose ownership is rarely visible to authorities.

This raises an important question: who should bear responsibility for cattle occupying public roads? Is the problem rooted in inadequate municipal capacity, insufficient animal shelters, the informal nature of the dairy sector, or a broader failure of urban governance or the cattle owners themselves?

Recent government interventions illustrate how policy has focused primarily on managing cattle after they occupy public roads rather than addressing why they continue to do so. Public attention intensified only after stray cattle reportedly delayed the Chief Minister’s convoy. The incident prompted the Delhi Government to allocate ₹40 crore to develop modern cow shelters in Ghumanhera to improve the sheltering and management of stray cattle. Yet existing gaushalas are already overcrowded, making it difficult for the Municipal Corporation of Delhi (MCD) to relocate cattle from public roads. While these measures address the immediate presence of cattle, they do little to improve traceability of ownership.

The problem is compounded by the largely informal nature of the dairy industry. Many cattle are bought and sold without proper documentation, making it easy for owners to abandon economically unproductive animals. Although several owners claimed they possessed documentation, none were able to produce it during my conversations. As such, establishing ownership often remains difficult. This raises a larger question: why do privately owned cattle continue to occupy public spaces in the national capital, often without any identifiable ownership?

Madhya Pradesh faced a similar challenge and attempted to address it by introducing colour-coded identification tags to distinguish privately owned cattle from stray animals. Such measures make tracing ownership considerably easier.

The legal framework in Delhi also reflects a gap. Article 48 of the Constitution, under the Directive Principles of State Policy, directs the State to preserve and improve cattle breeds and prohibit the slaughter of cows, calves, and other milch and draught cattle. In line with this, the Delhi Government enacted the [Delhi Agricultural Cattle Preservation Act, 1994](https://nititantra.com/wp-content/uploads/2025/04/Analysing-Cow-Protection-Laws-In-Delhi.pdf), which prohibits the slaughter of agricultural cattle. However, the Act remains silent on what happens when cattle become economically unproductive. The law protects cattle but provides little guidance on assigning responsibility once privately owned animals enter public spaces.

This transforms the issue of stray cattle into a broader problem.

The economics of Delhi’s stray cattle crisis can be understood through Garrett Hardin’s insights on the Tragedy of the Commons. Although public roads are not commons in the traditional sense, they function as an open-access resource for the movement and grazing of privately owned cattle. Individual owners reduce their maintenance costs by allowing cattle to use this shared space rather than bearing the full costs of housing and feeding them. For each owner, this decision appears rational. Collectively, however, when many owners make the same choice, the result is congestion, road accidents, deteriorating sanitation and shrinking public space. The case therefore resembles Hardin’s broader insight that individually rational decisions can generate socially undesirable outcomes when access to shared resources remains weakly governed.

This dynamic also represents a classic case of a negative externality. Owners earn private benefits through the sale of milk and dairy products, while commuters bear the costs of delays, pedestrians face safety risks, and municipalities struggle with enforcement. Because many cattle cannot be traced back to their owners, authorities are often unable to fix responsibility or take timely action.

Beyond ownership, the crisis also exposes shortcomings in urban planning and governance. City planning cannot focus exclusively on residential and commercial expansion while ignoring the realities of existing economic activities. Rapid urbanisation has steadily reduced grazing spaces without creating viable alternatives for livestock owners. This reveals a disconnect between urban planning and livestock governance—one that is particularly significant in a city like Delhi.

Improving traceability, rather than merely expanding shelter capacity, should therefore become the focus of policy. Although the Delhi Government has proposed spending ₹40 crore on new shelters, the objective should not simply be to remove cattle from the roads. The larger goal should be to ensure that those who benefit from cattle ownership are also held accountable for their upkeep. [Madhya Pradesh’s proposal to assign unique 12-digit identification tags](https://www.ndtv.com/india-news/madhya-pradesh-to-tag-40-lakh-stray-cattle-with-saffron-tags-11207518), along with colour-coded markers distinguishing stray and domesticated cattle, offers one possible way to improve traceability and accountability.

Delhi’s stray cattle problem is often framed as a question of animal welfare or municipal inefficiency. My fieldwork suggests that it is, more fundamentally, an institutional problem of ownership and accountability. When privately owned cattle occupy public roads without effective systems to assign responsibility, the costs of ownership are borne by society. Better shelters may alleviate congestion temporarily, but they cannot resolve the underlying incentive problem.

Ultimately, the issue comes down to traceability and accountability. In rural areas, informal social norms and close-knit communities make it relatively easy to identify cattle owners, creating social pressure to manage the commons responsibly. Delhi, by contrast, is a large and anonymous city where such informal mechanisms rarely exist. In this context, effective identification systems and enforceable ownership records become essential. Without them, responsibility remains invisible, enforcement remains weak, and public spaces continue to absorb the costs of private decisions.

* * *

About the author:

Nisshat is a postgraduate in Sociology with a strong interest in education policy, gender, and social inequality. Her research spans qualitative fieldwork with tribal women in Assam and Pakistani refugee communities in Delhi, as well as quantitative analysis on the link between female education and labour force participation in India.

## Cooperation in the Cracks: What Delhi's E-Rickshaw Drivers Reveal About the Limits of Competition

Original: https://www.spontaneousorder.in/p/cooperation-in-the-cracks-what-delhis

Author: Spontaneous Order

Published: 2026-07-30T09:19:57.064Z

> If you’re anything like us, you’ve probably mastered making your way through the lines of e-rickshaws outside Delhi Metro stations.

By : Aman Archika and Kritika Sharma

If you’re anything like us, you’ve probably mastered making your way through the lines of e-rickshaws outside Delhi Metro stations. They are such an everyday part of our commute that we rarely notice them unless it is to complain about the traffic they create. But a few weeks ago, we happened to pay closer attention. With dozens of drivers offering the same service, you’d expect fierce competition for every passenger. But that’s not always what we found.

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In Mayur Vihar Phase 1, drivers have developed an informal system for themselves. Each driver sticks to a particular route, and they rarely compete with each other for passengers. In fact, during our visits, we often saw other drivers directing passengers to a particular e-rickshaw driver rather than keeping the fare for themselves. On the other hand, at Vishwavidyalaya Metro Station, several drivers compete for the same passengers, and no such system is in place.

At first glance, classical market theory offers a straightforward answer for what we see at Vishwavidyalaya. The theory states that rational, self-interested actors, left to compete freely with no external referee, will default to rivalry. But the simplest version of this theory does not hold in Mayur Vihar. The drivers there sell the same service, work in the same city, and share the same goal of maximising profit, yet they behave differently from their counterparts a few stations away. Game theory offers a better account. Drawing on the Prisoner’s Dilemma, the Nash equilibrium, and Robert Axelrod’s work on the evolution of cooperation, this shows that self-interest does not produce a single fixed behaviour. It produces different stable outcomes depending on the structure of the game: who is involved, what choices they face, and whether they expect to meet again.

At Mayur Vihar, the driver community is small, and the same faces return daily. That repetition changes the incentives drivers face. In a one-off encounter, a driver gains by poaching a rival’s passenger, because there is no tomorrow to answer for. When the same drivers meet every day, poaching invites retaliation, and breaking the arrangement leaves a driver worse off than if they keep it. Given what every other driver is doing, no single driver benefits from breaking ranks alone. Game theorists call this a Nash equilibrium: a state in which every player has settled on the best response to everyone else’s behaviour, so no one has reason to move first.

Axelrod tested this logic directly. He ran a computer tournament in which different strategies played a repeated “cooperate or betray” game against each other, rather than only once. The winning strategy was strikingly simple and was nicknamed tit-for-tat. It cooperates on the first move, then copies whatever the opponent did last. Cooperation is met with cooperation, betrayal with a single retaliation rather than a permanent grudge. Over many rounds, this simple approach beat every strategy built on aggression or exploitation. Applied to Mayur Vihar, the lesson holds. When the same drivers expect to face each other again and again, cooperation becomes the smarter bet rather than a nicety.

Rigid tit-for-tat, however, has a weakness: it cannot distinguish an honest mistake from a real betrayal. It simply copies whatever happened last. Real interactions are noisy. A driver might cross into another’s route by accident, or a passenger might approach the wrong rickshaw. Strict tit-for-tat treats that misread exactly like deliberate betrayal, so the wronged driver retaliates. The other driver, who did nothing wrong, reads the retaliation as an unprovoked attack and hits back. A single misunderstanding can spiral into open conflict even though neither driver intended to break the truce. What holds Mayur Vihar together appears to be a more forgiving variant of the same strategy. Drivers appear to tolerate occasional, ambiguous lapses rather than answering them immediately, and that margin of forgiveness may be what keeps the arrangement stable when mistakes inevitably occur.

Vishwavidyalaya runs on the opposite conditions. Its driver pool is larger and more transient, and the rush-hour crowd draws in passengers few drivers will see again. Under these conditions, the one-shot Prisoner’s Dilemma takes hold. A driver who competes hard for every fare pays no future cost for it, because there is no relationship left to damage. Competing becomes the rational move each time, even though the result, mutual defection, leaves every driver worse off than cooperation would.

Different kinds of drivers do not populate Mayur Vihar and Vishwavidyalaya. The same self-interest operates at both stations. What differs is the strategic environment each station creates. Repeated interaction and tolerance for occasional error make cooperation the stable outcome at Mayur Vihar. Neither condition holds as strongly at Vishwavidyalaya, and competition fills the gap instead.

None of this overturns the classical view of competition. Self-interest explains the drivers’ behaviour at both stations. The error lies in a common shorthand drawn from that theory, the assumption that self-interested actors default to rivalry as though no other rational response existed. Self-interest instead produces different equilibria depending on whether a game repeats or ends after one round, and on whether the system can tolerate noise and error. Cooperation is not the opposite of self-interest, a moment where drivers set aside their own gain for the collective good. It is exactly as rational as competition, reached by the same logic under different conditions.

Axelrod captured the mechanism at work: in the short run, the environment determines how players behave, but over the long run, players determine the environment. Neither Mayur Vihar’s drivers nor Vishwavidyalaya’s created the conditions they operate under. Repeated interaction was already there to be exploited at one station and largely absent at the other. But once those conditions existed, drivers built the norms that fit them, cooperative at one stop, competitive at the other.

Delhi’s gig economy runs on hundreds of similar informal arrangements, and none of them needs a manager to produce order. Where drivers form small, stable groups, see each other daily, and tolerate the occasional honest mistake, they can build cooperative norms on their own. Policymakers looking to improve conditions for gig and informal transport workers should ask not how to police competition among them, but how to engineer the repeated contact and tolerance for error that make cooperation the rational choice drivers reach for themselves.

* * *

About the Authors:

Aman is a postgraduate Economics student at Guru Gobind Singh Indraprastha University, Delhi, with experience in public policy, social development, and sustainability. She has worked with the Ministry of Culture, Teach For India, and the DEFT Foundation, and is interested in education, social welfare, and evidence-based policymaking.

Kritika is an Economics student at Indraprastha College for Women, University of Delhi. Her interests include public finance, development policy, and political economy, with research on gender, fiscal policy, and welfare. She has worked with the Centre for Policy Research and Governance and Citizens for Reform India, and serves as General Secretary of her college's Economics Society.

## Innovation Needs More Than Incentives: Game-Based Learning in Low-Cost Private Schools 

Original: https://www.spontaneousorder.in/p/innovation-needs-more-than-incentives

Author: Spontaneous Order

Published: 2026-07-24T10:27:06.837Z

> Walk into most Indian classrooms, and you’ll find the same scene that has played out for decades: a teacher at the front, notes on the board, and children copying them down.

By: Shubhangi Yadav

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Walk into most Indian classrooms, and you’ll find the same scene that has played out for decades: a teacher at the front, notes on the board, and children copying them down. This has long been the dominant way of teaching, leaving little room for more interactive learning approaches. Ask a child what they did in class, and you rarely hear, “We played a game to learn fractions.” Game-based learning uses physical or digital games to teach concepts, develop problem-solving skills, and hold student attention. It covers online and video-game-style formats as much as board games, and all of them rest on one idea: that children learn by doing rather than by listening. Teachers who use it are not adding an activity to a lesson. They are changing how the lesson works.

The importance of play is gaining global recognition. In 2024, the United Nations (UN) marked the first [International Day of Play](https://www.un.org/en/observances/international-day-of-play) on 11 June, recognising play as a child’s right and highlighting its role in supporting cognitive, physical, social, emotional, and creative development. The UN also notes that learning via games makes learning more engaging for children.

Far less attention has gone to a prior question: what determines whether a school can adopt such a method at all? Effectiveness alone does not make an innovation spread. Schools must be willing to adopt it, and they must be able to. A principal may see the value in a new teaching method and still fail to introduce it. For low-cost private schools, the constraint is rarely the willingness. It is the capacity.

## The Incentive Is There

Private schools rely largely on fees paid by families, which makes attracting and retaining students a matter of survival. Low-cost private schools feel this most sharply, because enrolment determines whether they stay open. Parents choose these schools for English-medium instruction, exam results, and discipline, so no school can count on game-based learning to fill its classrooms by itself. But a school that improves the learning experience becomes easier to choose and harder to leave. Owners of low-cost private schools therefore have good reason to experiment.

Incentive alone, though, predicts very little. A school with both the desire and the means will experiment readily. A school with the desire but no means will delay, not because it undervalues the method, but because it cannot pay for it. Incentive and capacity together mark out four conditions under which schools decide whether to adopt game-based learning, and the matrix below sets them out.

**Low Capacity**

**High Capacity**

**Low Incentive**

Status quo

Able but unwilling

**High Incentive**

Willing but unable

Most likely to innovate

Low-cost private schools sit in the bottom-left cell. They want to innovate but cannot afford to.

## The Case for Capacity

Wanting to act does not create the ability to act. Introducing game-based learning takes more than buying a classroom activity or subscribing to a digital platform. Teachers need training before they can build games into a lesson. Schools need materials, devices, and internet access, depending on the method, and teachers need time to plan activities and align them with the curriculum and its assessments. All of it demands money before it returns anything. In budget private schools, staff salaries already absorb nearly 60% of expenditure ([Central Square Foundation, 2021](https://www.centralsquarefoundation.org/articles/analysing-the-lack-of-profit-in-budget-private-schools)). A new investment competes directly with the payroll. Cost, not conviction, is what keeps game-based learning out of these classrooms.

But where one school might not find it affordable, a cluster of schools can together share these costs. This can reduce the burden on each school. [James Tooley](https://ccs.in/sites/default/files/2022-08/viewpoint8.pdf) argues that low-cost private schools can improve quality by coming together through school chains or associations. Through this, they can jointly invest in management, teacher training and curriculum development. The same logic applies to procuring game-based learning tools. An association of multiple schools can procure a learning tool once, making the investment more affordable per school. For example, if purchasing a digital learning platform costs ₹1 lakh, ten schools in a network could share the cost, reducing the expense to ₹10,000 per school instead of each school paying the full amount.

Schools can also draw on capacity built elsewhere. Public institutions and non-profits lower the cost of adoption by developing resources and training teachers directly. [CIET-NCERT](https://ciet.ncert.gov.in/activity/gbl), in collaboration with NITI Aayog, has run free online training on game-based learning for teachers. [The Opentree Foundation’s Play2Learn](https://opentree.org/toybanks-play2learn-programme-increases-curiosity-attention-span-in-children/) set up play-based learning centres at no cost in low-income schools in Maharashtra and trains teachers to use play-based methods in the classroom. Each of these initiatives removes an expense a school would otherwise meet on its own, and each sends teachers back to the classroom more confident about using the method.

## Way Forward

Individual schools cannot expand game-based learning on their own. They depend on an ecosystem that makes good learning resources cheaper to develop and easier to reach. Affordable credit, shared teaching resources, and teacher training all build capacity directly. The Government of India’s push to strengthen the [Animation, Visual Effects, Gaming and Comics (AVGC)](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2248271&reg=48&lang=2) sector may also support education indirectly. By expanding India’s pool of game developers, such initiatives could increase the availability of educational games and create more opportunities for collaboration between schools and developers over time.

Educational games will keep getting made. The harder question is which schools can put them to use. Low-cost private schools already understand what game-based learning offers them. What they lack is the money to buy it, the training to teach with it, and the organisation to keep it running. Affordable finance, teacher training, and school networks that spread costs would help address the problems schools face.

* * *

About the author:

Shubhangi Yadav is a third-year Economics student at Hindu College, University of Delhi, with interests in public policy and development studies. She was a Research Scholar under the Centre for Civil Society's Researching Reality 2025 Residency Program, where she worked on governance and decriminalization reforms, and led an Invest India-endorsed research project on India's trade partnerships.

## AI Doesn't Discriminate, Usage Does 

Original: https://www.spontaneousorder.in/p/ai-doesnt-discriminate-usage-does

Author: Spontaneous Order

Published: 2026-07-16T11:27:16.754Z

> Last week, I received an email with one line in bold: “Usage of AI is strictly discouraged as our focus is to understand your thinking and approach.” That line captures a much broader sentiment surrou

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By: Raina Roy

Last week, I received an email with one line in bold: “Usage of AI is strictly discouraged as our focus is to understand your thinking and approach.” That line captures a much broader sentiment surrounding artificial intelligence today. Sceptics worry that AI is sexist, biased, and capable of reinforcing existing inequalities ([UN News, 2026](https://news.un.org/en/story/2026/06/1167776)). Others argue that AI is a shortcut that erodes critical thinking, stifles creativity, diminishes skill development, and threatens intellectual autonomy, an effect researchers have termed “cognitive offloading” ([MDPI, 2026](https://www.mdpi.com/2075-4698/15/1/6)). Major companies have acted on these worries. JPMorgan Chase, Apple, and Spotify have all restricted employees’ use of AI outright ([CNN Business, 2023](https://edition.cnn.com/2023/09/22/tech/generative-ai-corporate-policy)).

But why do we limit a tool designed to enhance human productivity? From an economic perspective, AI is an innovation that lets people achieve more with the same time and effort. Economists would say it shifts the indifference curve outward, raising efficiency without raising resource use. In India, where gender gaps run across corporate structures, a tool that is genderless by architecture could improve equity. A large language model does not decide anything based on who is prompting it. A calculator returns 25 for 5 times 5 no matter who presses the keys, and an LLM answers the same way, which makes it one of the more gender-neutral tools available to the workforce.

The equity problem does not arise from AI itself. It arises from who gets to use it. When more men than women engage with AI, the data and language that models train on tilt toward male usage patterns and professional needs [(Ho et al., 2025)](https://www-sciencedirect-com.dbvista.idm.oclc.org/science/article/pii/S0360319922050728/pdfft?md5=017bbeea3a07810400f928eca19d02b0&pid=1-s2.0-S0360319922050728-main.pdf). Over time, the model’s baseline context shifts. This is not an inherent property of the technology. It is a consequence of who gets to use it. Restricting AI does not neutralise this risk but amplifies it because restrictions rarely fall equally.

In the modern economy, AI is a reality. Employers and workers would do better to adapt than to resist, treating AI as leverage rather than as a threat.

**India’s Comparative Advantage in AI**

India leads the world in AI skill penetration, and the gender data makes the equity opportunity compelling. The government has launched the IndiaAI Mission and established Centres of Excellence for AI, strengthening the country’s research and innovation base. Policymakers have tied these programmes to the vision of Viksit Bharat by 2047, under which India aspires to become a global AI powerhouse.

-   India ranks 1st globally in AI skill penetration with a score of 2.8, ahead of the US (2.2) and Germany (1.9). India’s AI talent concentration has grown by 263% since 2016. ([Stanford AI Index, 2024](https://hai.stanford.edu/assets/files/ai_index_report_2026.pdf))
    
-   India also leads in AI skill penetration for women, scoring 1.7 against the US at 1.2 and Israel at 0.9. This means that when Indian women access AI, they adopt it at a rate that outpaces that of women in the world’s most advanced economies. ([Stanford AI Index, 2024](https://hai.stanford.edu/assets/files/ai_index_report_2026.pdf))
    

Yet a strange contradiction sits alongside these wins. We celebrate AI adoption nationally and discourage it organisationally. Companies announce AI strategies, then email employees telling them not to use ChatGPT. In universities, professors worry about AI-assisted assignments even as their departments launch AI courses. Recruiters say they want tech-savvy employees, yet run AI-averse hiring processes. Investing in highways while banning cars would look much the same. A century ago, literacy meant reading and writing. Today it increasingly means the ability to collaborate with intelligent systems. Institutional resistance to AI is not neutral. It exacts its highest cost on those already structurally disadvantaged.

**The Cost of Pessimism**

Women face a real and well-documented risk in the global labour market. A 2025 [ILO](https://www.ilo.org/resource/news/new-ilo-data-confirm-women-face-higher-workplace-risks-generative-ai-men) analysis with Poland’s National Research Institute found that in high-income countries, jobs at the highest risk of generative-AI automation account for 9.6% of women’s employment against 3.5% of men’s, nearly three times the exposure. Clerical and administrative roles drive that gap, because women disproportionately hold them and because they rank as the most exposed occupational category. Unless employers respond deliberately, through retraining, redeployment, and policies that route women into AI-augmented rather than AI-replaced roles, AI could meaningfully erode female labour-force participation. The risk raises a design question: how should we build institutions and workplaces so that AI becomes a net gain for women rather than a source of displacement?

A [GLO](https://www.econstor.eu/bitstream/10419/284850/1/GLO-DP-1404.pdf) study (2024) shows what happens when institutions leave that question unanswered. Where AI tools are available but not officially sanctioned, women use them significantly less than men, at 45.1% against 57.7%, and associate the usage with misconduct or cheating. A [CNBC](https://www.cnbc.com/2026/03/06/gender-gap-in-ai-revealed-in-cnbc-surveymonkey-women-at-work-survey.html) survey (2026) finds the same instinct at work: 41% of women feel that using AI at work is cheating, compared with 34% of men. Women also tend to seek higher competence before embracing a new technology, while men explore AI at lower proficiency levels. Heavy institutional investment in AI has not dislodged this pessimism at the point of adoption, and the divide deepens along lines of risk tolerance, conformity, and confidence. Women, in particular, disengage rather than experiment: [Stanford Social Innovation Review’s](https://ssir.org/articles/entry/ai-gender-gap-paradox) meta-analysis covered 143,008 people across 25 countries and found that women had 22% lower odds of using generative AI than men. Scepticism about AI’s value did not drive that gap. Lower confidence did, alongside a perceived need for more training before the tool could pay off.

**From “Cheating” to “Fluency”**

The GLO research also identifies a turning point. When the employer formally provides the AI tool, usage rates equalise. Official endorsement of AI use reclassifies it for women, transforming it from a suspected form of cheating into a skill-enhancing tool worth capitalising on. Companies that make space for AI in hiring standards and workflows would stop penalising caution, which often rests on the assumption that AI use is unethical, and start rewarding the people who use AI to sharpen their skills. AI governance could then advance gender equality rather than merely avoid harm.

The same study found that women who used an employer-sanctioned AI tool reported measurably higher confidence. The authors link that confidence to a greater willingness to enter competitive, merit-assessed settings. Hiring and promotion decisions turn on exactly that kind of high-stakes evaluation. [Niederle and Vesterlund](https://www.researchgate.net/publication/24091981_Do_Women_Shy_Away_from_Competition_Do_Men_Compete_too_Much) established the baseline problem years ago: equally skilled women opt into competition less often than men do.

AI also appears to lift women’s performance more than men’s. The law of diminishing marginal productivity explains why. AI adds far more marginal value to a non-technical worker than to a seasoned technical veteran. A male software engineer might gain an incremental bump in coding speed. A woman historically shut out of legacy technical syntax can use an LLM to bypass years of structural barriers, automating processes, building tools, and commanding digital infrastructure in natural language. The skill premium on AI use, in other words, runs structurally higher for women. Equal access here produces unequal gains, and the gains favour those previously excluded.

**Leading by Example**

Some companies have already integrated AI rather than fenced it off. Unilever cut 70,000 person-hours of manual interviewing and assessment, made its job descriptions more inclusive, and attracted a balanced talent pool by combining AI with a blind application evaluation process. Women now hold 51% of its management roles globally (NITI Aayog, 2025). [Young et al. (2023)](https://www.econstor.eu/bitstream/10419/284850/1/GLO-DP-1404.pdf) argue that generative AI offers a rare chance to disrupt traditionally male-dominated fields and to build diversity into them early.

**Way Forward**

Firms that never officially encourage AI widen the gender gap, which makes institutional endorsement a structural imperative rather than a soft preference. When the firm provides AI as a baseline tool, women engage competitively at the same rate as men. Endorsement dismantles barriers that have long gatekept important roles.

The private sector, and the technology industry in particular, carries an outsized role in making AI adoption equitable ([UNCTAD, 2025](https://unctad.org/system/files/official-document/tir2025ch5_en.pdf); [UN Women, 2025](https://www.unwomen.org/sites/default/files/2025-01/partnering-for-gender-responsive-ai-003.pdf)). UN Women (2025) and UNESCO’s Recommendation on the Ethics of AI set the regulatory floor, calling on private organisations to adopt responsible practices: to strip gender bias from models, to increase women’s representation in AI leadership, and to build safeguards against AI-amplified violence.

Which brings me back to that email. “Usage of AI is strictly discouraged” was meant to protect something: original thinking, presumably. But it will not. The people who ignore it will be those already confident enough to experiment, and the GLO and Stanford numbers show who that is. A ban does not measure how well anyone thinks. It measures who was willing to risk being caught, and it sorts a workforce accordingly.

* * *

About the author: An economics and policy enthusiast with an MSc in Development Economics and Policy, exploring the intersections of gender and labour economics. Passionate about research with experience in NGO work and student-led policy initiatives. Beyond economics, she has spent over 20 years practicing classical dance.

## THE CATCHER IN THE RYE- A CASE AGAINST PATERNALISM 

Original: https://www.spontaneousorder.in/p/the-catcher-in-the-rye-a-case-against

Author: Spontaneous Order

Published: 2026-07-09T10:05:43.860Z

> Near the end of The Catcher in the Rye, Holden finally tells his sister, Phoebe, what he actually wants to do with his life.

By: Aanya Monga

[

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Near the end of *The Catcher in the Rye,* Holden finally tells his sister, Phoebe, what he actually wants to do with his life. Holden imagines a field of rye on the edge of a cliff. Thousands of children play in the field, and nobody watches them but him. His job, the only one he can picture wanting, is to stand at the edge and catch any child who strays too close to the drop. He does not want to teach the children, play with them, or ask where they are running. He wants to stand at the boundary and stop the fall.

Strip away the poetry, and Holden has designed a policy. Some people, in his account, cannot see the risks they run. One other person, wiser or more cynical, must stand at the edge and intervene on their behalf. This is paternalism in its most literal form. A milder policy leaves the choice of action to citizens themselves. Holden’s fantasy removes the choice entirely. The protector decides what counts as danger, and the children never learn he is there. Even if they did, nobody asked him to catch them.

This fantasy is well-intentioned, which is what makes it a strong policy case. Nobody builds a restriction on other people’s freedom out of contempt. They build it out of love, fear, or grief, and Holden is writing from grief. He has lost his brother Allie, watched a classmate die, and concluded that the world is a place children fall out of. His catcher fantasy turns that grief into a vocation. Real paternalist policy works the same way. It is rarely the product of malice, and that is precisely what makes it hard to argue against.

The case for the catcher collapses under three questions.

First, who decides what counts as falling? Holden assumes a clean line between the safe field and the fatal cliff edge. But the children running through the rye are not all running toward the same danger. Some are running toward growing up, which Holden experiences as a kind of death, but it is also how anyone becomes their own person. A catcher who cannot tell a child about to be hurt from a child about to change will end up stopping both. He is not qualified to judge what falling means.

Second, what does the child lose when the choice disappears? The child who is caught never learns what waited on the other side of the risk. Holden spares her the fall, but he also spares her the agency, the accountability, and the experience of judging a risk and living with the result. That experience is what turns a child into an adult who can judge the next one. And because the child never jumps, Holden never has to face the possibility that the fall was survivable, or worth it, or none of his business to prevent.

Third, did anyone ask? The children play, Holden watches, and the catching happens to them, not with them. There is no consent, because the whole premise denies them the standing to give it. Every paternalist scheme rests on this same move. To justify acting on someone’s behalf, you must first prove they cannot act for themselves, and the more thoroughly you prove it, the less they look like people whose interests you can claim to know.

Salinger frames this argument from an unusual angle. Holden narrates the whole novel from inside a psychiatric facility, where his family sent him after his breakdown. The boy who dreams of catching children has himself been caught, removed, diagnosed, contained. The adult world aims the same protective impulse at Holden that Holden aims at his imaginary children. Salinger shows both sides of paternalism at once, the good intentions behind it and the cost it rarely lets you see, a loss of self. The catcher’s reward is to be caught and catalogued by other catchers.

The strongest evidence that Salinger argues against the catcher, rather than for him, comes in the final scene. Holden takes Phoebe to the carousel. She reaches for the gold ring the way children on old carousels did, leaning off her horse far enough that she could fall. Holden watches, and he lets her. This moment reverses the whole field of rye. The loving act is not to stand between the child and the risk. It is to step back far enough that the risk becomes hers to take. Holden does not stop fearing for Phoebe. He simply accepts that his fear gives him no right to govern her choices. That distinction between caring about someone’s well-being and claiming the right to override their choices is the argument against paternalism in full.

Salinger did not set out to write a treatise on autonomy, and I doubt he’d recognise this reading. But the policy lesson holds regardless. Before we build the cliff-edge institutions, the bans and mandates and schemes that catch people for their own good, his three questions are worth asking first.

* * *

Aanya Monga is a Grade 11 student at DPS International Saket, New Delhi, with a deep passion for politics, philosophy, economics and IR. An avid reader, researcher and public speaker, she likes engaging with ideas that connect abstract thinking to real-world governance.

## The Economics of Attention: Should Governments Regulate Social Media Algorithms? 

Original: https://www.spontaneousorder.in/p/the-economics-of-attention-should

Author: Spontaneous Order

Published: 2026-07-02T10:04:20.989Z

> In the digital age, attention has become one of the world’s most valuable resources. Social media platforms compete not only for users but also for the time users spend on their applications.

By Kavya Rao

[

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In the digital age, attention has become one of the world’s most valuable resources. Social media platforms compete not only for users but also for the time users spend on their applications. Their algorithms, which determine the content people see online, are designed to maximise engagement by keeping users scrolling and interacting. Although these platforms have transformed how people communicate and access information, they have also raised concerns about misinformation, mental health, and market power.

This raises an important question: should governments regulate social media?

From an economic perspective, attention is a scarce resource. Individuals have limited time and cognitive capacity, so every minute spent on one activity comes at the expense of another. Social media companies monetise attention by selling advertising space. The longer users remain on a platform, the more advertisements they see, generating greater revenue. Firms therefore have strong incentives to design algorithms that maximise engagement, often by promoting emotionally charged content because high-arousal emotions encourage users to continue scrolling.

However, the market for attention can produce several forms of market failure. One is negative externalities. Algorithms may amplify misleading or inflammatory content because it generates engagement, while the resulting social costs are borne by the public rather than the platform. In India, platforms also benefit from safe harbour protections under Section 79 of the Information Technology Act, which generally shields them from liability for content posted by third parties.

The consequences of misinformation extend well beyond individual users. It can undermine public trust in the media and public institutions, distort political outcomes through voter manipulation and coordinated disinformation campaigns, and increase social polarisation. False narratives and hate speech can encourage people to view political opponents not simply as individuals with different opinions but as existential threats.

Another economic concern is information asymmetry. Most users do not understand how algorithms select and rank content. Platforms possess extensive data about user behaviour and detailed knowledge of how their recommendation systems operate, while users know very little about how their attention is being influenced. This imbalance limits consumers’ ability to make informed choices and weakens market discipline. Unlike traditional markets, where consumers can compare products and prices, the mechanisms behind algorithmic recommendations are largely opaque. Modern AI systems rely on complex statistical models trained on vast datasets rather than simple human-written rules, making it difficult for users, researchers, and even regulators to understand why particular content is promoted.

Governments have responded to these concerns in several ways. Measures such as stronger content moderation requirements, transparency obligations, age-appropriate design codes, and regulations like the European Union’s Digital Services Act aim to increase platform accountability and reduce the spread of harmful content. Many companies have also invested in AI-powered moderation systems to detect misinformation, hate speech, and other harmful material more effectively.

Despite these efforts, significant challenges remain. Regulators still lack a universally accepted definition of misinformation, making enforcement difficult without risking restrictions on freedom of expression. Automated moderation systems often struggle to identify misleading content that mixes factual information with false narratives, particularly in regional and low-resource languages. Safe harbour protections may also shield platforms even when their algorithms actively amplify harmful content. At the same time, recommendation systems evolve rapidly, causing legislation to become outdated before it can be effectively implemented. Increased moderation requirements can also lead to overblocking, in which legitimate journalism, political criticism, and artistic expression are mistakenly removed. Similarly, age verification measures designed to protect minors often require the collection of sensitive personal information, raising important privacy concerns. These limitations suggest that existing regulatory frameworks remain insufficient to address the complexities of the modern social media ecosystem.

Policymakers must also consider the unintended consequences of excessive regulation. Strict rules may discourage innovation and make it harder for smaller firms to compete with established platforms that possess greater legal and financial resources. There are also concerns about freedom of expression. Deciding which content to promote or restrict is inherently difficult, and greater government involvement in algorithmic decision-making may pose risks of censorship or political interference.

A balanced regulatory approach is therefore likely to be the most effective solution. Rather than regulating individual speech, governments should focus on platform behaviour by promoting transparency and accountability. Platforms could be required to disclose how their recommendation systems operate, the factors influencing content visibility, and the processes used to moderate content. Greater transparency would reduce information asymmetry by allowing users, researchers, and regulators to better understand how information is prioritised online.

Governments should also distinguish between hosting content and actively amplifying it. Platforms should not be held responsible for every post made by users, but they should be accountable when their algorithms systematically promote harmful or misleading content to maximise engagement. Independent audits and regular risk assessments could improve accountability without giving governments direct control over online discourse.

Digital literacy programmes should also complement regulation. Educating users about misinformation, algorithmic bias, and online manipulation would reduce their vulnerability to harmful content while preserving freedom of choice.

Ultimately, social media algorithms provide significant benefits by expanding access to information and enabling global communication, but they also generate social and economic costs. Government intervention is therefore justified, provided it focuses on transparency, accountability, and user empowerment rather than extensive control over online content. Such an approach is more likely to protect both public welfare and freedom of expression.

In conclusion, government regulation of social media is justified because the market for attention generates important market failures, particularly negative externalities and information asymmetry. Left entirely unregulated, platforms have strong incentives to prioritise engagement and profit over social welfare. At the same time, excessive regulation risks reducing innovation and restricting freedom of expression. A balanced approach is therefore essential. By improving algorithmic transparency, holding platforms accountable for harmful amplification, and investing in digital literacy, governments can correct market failures while preserving the fundamental freedoms that make open societies possible.

* * *

## Licence Raj Is Gone, but the Inspector Raj Persists 

Original: https://www.spontaneousorder.in/p/licence-raj-is-gone-but-the-inspector

Author: Spontaneous Order

Published: 2026-06-25T09:37:49.282Z

> I was in Chandni Chowk last month shopping for my sister’s wedding. If you've been there before a wedding, you know the drill.

By: Aayushi Tripathi

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I was in Chandni Chowk last month shopping for my sister’s wedding. If you’ve been there before a wedding, you know the drill. We were mid-conversation about products with the shopkeeper when he glanced toward the lane and said, almost as an aside, “*Inspector sahab aa gaye”* (the inspector has arrived). A jeep slowed near the entrance. Nobody said anything. The shopkeeper handed some money over to the inspector, and the vehicle moved on to the next shop. The shopkeeper turned back to us and continued his sales pitch as if nothing had happened.

What struck me wasn’t that the shopkeeper paid the inspector. What surprised me was the shopkeeper’s nonchalance. He made the payment while customers were in the shop, with no attempt to hide it, and no interruption to business. He told us that this inspector covered the entire lane daily and made more in a month than most salaried people make in a year, without once actually inspecting anything.

I kept thinking about that word: *Inspector*. It suggests that someone is checking standards and enforcing rules. But that was not what I saw. A jeep drove through, the inspector received the payment, and work continued as usual. There was no inspection, at least none that I could see. A few weeks later, I saw something similar much closer to home. Near my hostel is a small samosa shop run by a man everyone knows as Ramesh bhai. He has been frying samosas at the same corner for over a decade. Once a month, a municipal health inspector arrives; Ramesh Bhai hands over some money, and the inspector leaves within minutes. No checklist. No visible inspection. Afterwards, Ramesh bhai simply goes back to work. When I once asked him about it, he shrugged and said, “*Yahi hota hai*“ (This is just how it is).

Same problem, more or less.

The easy response is to call this corruption and move on. Most people, including me, instinctively see these interactions as wrong. Why should this inspector take money from the poor businessman? But that’s not all that is happening. In return for the payment, the inspector ignores all the various rules that these businesses may have violated. For instance, maybe the store in Chandi Chowk doesn’t have all the licences it should. Street Vendors are not supposed to employ anyone, but Ramesh bhai does since his thela is slightly large. For these businesses, corruption is much less costly than complying with the law. In fact, if they did comply, either the prices would go through the roof, or they would shut down.

There could certainly be cases where a business is fully compliant, but still, the inspector tries to extract some money. These officials should be held accountable. But often, the time, energy, and effort required to seek formal redress are far greater than the inspector asks for.

We, as consumers, in fact, benefit from much of this corruption. Goods are cheaper and more plentiful. But the regulations and payments don’t affect every business the same way. In Chandni Chowk, such costs may be absorbed as part of doing business. For someone like Ramesh bhai, even a small additional burden can matter. The rule may be the same, but the ability to absorb its costs is not. When complying with regulations becomes costly and uncertain, the burden falls disproportionately on smaller businesses. Some absorb it. Others cannot. Over time, that affects who enters a market, who survives, and who grows.

These experiences reminded me of something C. Rajagopalachari wrote in 1963 while criticising the permit-licence-quota raj. He argued that a system created to prevent exploitation had, in practice, begun to encourage it. He wrote, “What appears as progress has been achieved in spite of the incubus, and not on account of the [regimentation](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-dec15-1963.pdf#page=16).” Although Rajaji was speaking about industrial licensing, the concern feels familiar even today.

A 2025 [TeamLease RegTech report](https://cfo.economictimes.indiatimes.com/news/governance-risk-compliance/msme-compliance-burden-over-1450-obligations-and-costs-up-to-rs-17-lakh-annually/122112548) found that a typical manufacturing MSME faces more than 1,450 compliance obligations annually and spends an estimated Rs. 13–17 lakh a year on compliance. For a large firm, that figure is a manageable line item, spread across a much bigger operation and handled by people hired specifically for the purpose. For smaller enterprises, however, regulatory obligations are the difference between staying open and closing.

There are practical alternatives. Inspections can be targeted towards businesses that pose greater risks or have a history of violations, rather than being applied as routine monthly visits regardless of track record. The general public can access Inspection reports, allowing consumers to make informed decisions and regulators to be held accountable from outside the system, not just from within it. India has already experimented with similar approaches: several states have introduced risk-based inspection systems, and certain categories of businesses and startups can adopt self-certification.  
  
None of these ideas is new. In 2016, [RBI Governor Raghuram Rajan](https://www.tribuneindia.com/news/archive/nation/rajan-licence-raj-gone-but-inspector-raj-is-still-there-240342/) observed that India had largely dismantled the licence raj but had done much less to reform the inspector raj. He advocated self-certification backed by random inspections and meaningful penalties for violations. Various states have adopted versions of these reforms in some sectors, but the broader challenge remains a decade on.  
  
The lesson from Chandni Chowk and Ramesh bhai’s samosa shop is not simply that corruption exists. Most Indians already know that. The more interesting question is why these arrangements persist even when everyone involved knows the rules are being bent and the deal is happening outside the formal system. If complying with regulations is often more difficult than finding ways around them, then reform requires more than stricter enforcement. It requires asking whether the system is making compliance easier or merely making non-compliance negotiable.

* * *

About the author:

Aayushi Tripathi is a graduate in Economics and History from the University of Delhi and is currently a Junior Associate at CCS Academy. With a strong interest in public policy, leadership, and social impact, she enjoys debating and engaging with ideas that drive meaningful change.

## Aesthetics is not the problem. Ownership is.

Original: https://www.spontaneousorder.in/p/aesthetics-is-not-the-problem-ownership

Author: Spontaneous Order

Published: 2026-06-14T04:57:23.589Z

> India's cities look chaotic because five departments share one road and none of them is responsible for how it looks.

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By: Abhinav Bhatia

Walk through any Indian city, and you will notice something immediately: different kinds of street poles on the same road. Direction signs buried under political banners. A footpath that begins somewhere, then disappears into a construction pit, then reappears three hundred meters later. A heritage monument in what can be described as disco lighting. This is especially evident in Delhi, where monuments like Qutb Minar and India Gate are lit with random RGB lighting. This looks like chaos, because it is.

I have been following a debate that has been circulating online, which captures this frustration well. One side argues that India needs a Ministry of Aesthetics, a central body with a unified vision for how our cities look and feel. The argument makes sense. India has an extraordinary architectural heritage, a rich visual culture, and cities full of potential. And yet, monuments that would be lit with warm lighting anywhere else in the world end up looking like the backdrop of a college festival. So the frustration is real. But here is the thing: Is this actually an aesthetic problem?

I don’t think so, because the second voice in this debate makes a more stronger argument: The problem is not that India lacks taste, the problem is that no one is in charge. Jurisdictional fragmentation means that most cross-cutting problems have no single agency with authority and accountability for the whole. Take one road. The Public Works Department (PWD) manages it. The Municipal Corporation manages the street lights. The traffic police manage the signals. DISCOM handles the electricity poles. The tourism department has opinions about the heritage sites. Five departments, one road, zero coordination, and most importantly, zero shared responsibility for how the whole thing looks. In cities across India, repeated instances of newly paved roads being re-excavated due to poor coordination between PWD and other departments exemplify the systemic inefficiencies of uncoordinated governance.

There is a concept in political economy that captures this precisely. We all have heard about the tragedy of the commons, but Michael Heller, in his theory of the tragedy of the anti-commons, argued that when too many people own pieces of one thing, nobody can use it, and if too many owners control a single resource, cooperation breaks down, and everybody loses (Heller, 2013). Although Heller originally developed this idea to explain fragmented property rights, but the logic applies perfectly here. India’s public streets are not owned by anybody; they are owned by everybody in pieces. Nobody owns the road as a whole. And so nobody is responsible for what it becomes.

Thus, when nobody owns the whole picture, nobody is responsible for how it looks. The RGB lights on our monuments are not a failure of imagination. They are a failure of coordination. And this is not a small administrative problem. According to NITI Aayog’s 2021 report, *Reforms in urban planning capacity*, 65% of India’s 7,933 urban settlements lack statutory master plans, and governance remains fragmented across multiple agencies, creating jurisdictional issues that hinder accountability. This is the structural reality behind every broken footpath, every mismatched pole, every signboard.

So what is the solution?

Here is the thing, though, this problem does not exist everywhere. Walk into any private gated colony or a shopping mall, and you will notice that the lights match, the signage is consistent, the footpaths are maintained, and nobody has dug up the floor for a water pipe without telling anyone. The difference is not resources. It is ownership. In a mall, a single entity owns the entire property and is responsible for how it looks, feels, and functions. On a public road, nobody does. And it shows.

Let’s build on this through the example of Singapore. Cities in Singapore did not get beautiful public spaces by accident. Singapore’s Urban Redevelopment Authority (URA) is the city’s sole land-use planning and conservation agency, responsible for everything from long-term strategic plans to urban design, the conservation of heritage sites, and the promotion of architectural excellence (National Library Board Singapore, n.d.). URA is a statutory board under the Ministry of National Development of the Singapore Government. Thus, Singapore didn’t get well-maintained streets because they have better taste or aesthetics. They got them because someone was in charge of the whole picture.

Thus, what I think is the solution is not a Ministry of Aesthetics sitting at the top and issuing colour codes for lampposts. That would be a top-down aesthetic vision layered over a broken coordination structure, and it would produce exactly the kind of results you would expect: a few showcase monuments with approved lighting and everything else exactly as it was. What India might actually need is what Delhi is trying to do with DUMTA (Delhi Unified Metropolitan Transport Authority): bringing transport agencies such as the Delhi Transport Corporation, the Public Works Department, the Transport Department, and the Delhi Traffic Police under a single umbrella (Swarajya, 2025).

This approach may be replicated for the issue at hand, where a ministry that decides what things should look like is absent, but a collective body ensures the right people are in the same room when decisions are made. Urban planning and architecture are not decorative professions. They are proper professions which should be included in these conversations. Thoughtfully designed public spaces have the power to reawaken history, celebrate culture, and create meaningful connections between people and place, but that requires moving beyond the aesthetics argument and understanding the deeper problem. India’s cities do not look chaotic because we have bad taste. They look chaotic because we have built a system in which everyone is responsible for a piece, and nobody is responsible for the whole. Fix that, and the aesthetics will follow. Until then, no ministry, however well-intentioned, is going to change what you see when you walk down the street.

* * *

About the Author:

Abhinav holds a BA in Political Science and an MA in Development Studies, and brings experience in research, policy communication, and stakeholder engagement. His interests span sustainability, social entrepreneurship, and social sciences. He currently works at CCS as an Associate in the Academy.

## The Frying Pan of the Streets: Regulatory Barriers Behind India’s LPG Crisis 

Original: https://www.spontaneousorder.in/p/the-frying-pan-of-the-streets-regulatory

Author: Spontaneous Order

Published: 2026-05-28T11:36:26.479Z

> Every evening across India, thousands of street vendors light their stoves, and the hiss of blue flame marks the start of the working night.

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Every evening across India, thousands of street vendors light their stoves, and the hiss of blue flame marks the start of the working night. For these micro-entrepreneurs, liquefied petroleum gas is not a convenience but the fuel that powers their livelihoods. It is the difference between earning that day and not earning it.

That fuel has become a source of constant worry. A field survey of more than 90 street vendors in Delhi and Jaipur, conducted in April 2026, points not to a passing inconvenience but to a system failing the people who depend on it most. Regulatory barriers have shut the poor out of the legal market, over-regulated their work, and left them exposed to every price shock that comes.

## **The Scale of the Disruption**

The disruption is widespread. Of the 78 LPG-dependent vendors surveyed, over 90% reported severe daily operational disruptions in the past 30 days. This situation is not a minor financial setback but a structural failure. Vendors face chronic refilling delays, forced shutdowns of up to 12 days, and a 250% premium charged by the black market.

Take Rajesh, a tea seller at Old Delhi Railway Station. When the shortage first hit, he spent his small savings stocking up on cylinders, expecting it to pass. It did not. Prices climbed week after week and ate through his capital.

At the same spot, Shivpal, who sells cooked meals to daily-wage labourers, was paying Rs 3,500 for a single domestic cylinder, nearly four times the regulated price of Rs 950. That gap is days of hard physical labour swallowed at once, just to buy the fuel to cook for one more day.

## **A Tripled Price on a Thin Margin**

The same pattern shows up across both cities. In Lalarpura, Jaipur, a fast-food vendor named Tejpal watched his fuel costs rise over 30 days leading into March 2026, from the regulated rate of Rs 950 to between Rs 2,800 and Rs 3,200 per cylinder on the black market. That is roughly a threefold increase in a matter of weeks, leaving micro-entrepreneurs little time to adjust and turning a stable input into a threat to the business. For a stall that gets through three or four cylinders a month, that adds Rs 5,000 to Rs 9,000 to its costs.

And vendors cannot pass on the extra cost. Their customers watch every rupee and will simply go elsewhere, so the vendor absorbs the rise himself. Manoj, who sells aloo chaat in Chawri Bazar, put it plainly: “Crisis is temporary, but customers are permanent.” He takes the loss and watches his daily profit shrink to almost nothing.

Unlike air-conditioned corporate restaurants, street vendors have no fiscal cushion. As Shivpal puts it, they operate at the margins of survival, where losing a customer can mean losing the means to feed their own families that night.

## **Slowing the Pace of the Streets**

In Chawri Bazar, a tea seller named Hasan normally works a nine-hour shift, opening his stall at 2:00 PM and serving customers until 11:00 PM. Because of the fuel shortage leading into April 2026, he has been closing two hours early, at 9:00 PM, simply because he cannot secure a reliable supply of LPG. That loss of his late-night hours strips away more than 20% of his daily operating window and cuts directly into his main source of income.

In Mukherjee Nagar, the price swings made it hard for vendors to know what their fuel was really worth. One vendor, Upendra, was out of work for several days. The pause was deliberate: with black-market prices moving hour by hour, he chose to wait and see whether the 250% spike would hold or fade before committing. A vendor with no financial cushion cannot afford to misjudge, since paying an inflated rate for fuel or setting his menu around it could exhaust the working capital he has left.

The financial strain is not the whole story. Locked out of legal commercial LPG, some vendors have gone back to firewood. Between 15% and 18% of those surveyed said they had given up gas stoves in favour of solid biomass, and in Lalarpura, Jaipur, seven vendors, including Raju Gurjar, switched to firewood as a stopgap.

The switch costs more than it first appears. Firewood runs Rs 13 to Rs 20 a kilogram, and on top of that, vendors lose hours scouting local markets to find it, time they would otherwise spend serving customers. It also cooks more slowly. As Deepak, a vendor in the same area, puts it: “An LPG stove is faster and easier to operate. A wooden stove takes far longer to heat up. I cannot make tea on demand, and serving fewer customers means lower daily income.”

Rules that keep affordable LPG out of vendors’ hands push them toward a slower, costlier fuel, which means fewer cups of tea sold and less money at the end of the day.

## **Caught in the Trap**

The core policy problem is a design flaw in the market’s structure: the state over-regulates the vendor’s physical space while denying him any formal commercial identity. To buy a legal 19kg commercial cylinder from the state oil companies, a business must produce a municipal trade licence, proof of permanent address, or formal commercial registration. But municipal corporations have frozen zoning laws and stalled on issuing Certificates of Vending under the Street Vendors Act, so the great majority of vendors hold none of these documents.

The result is a system in which a roadside tea stall sits in the same commercial tier as a five-star hotel, yet is denied the paperwork it needs to legally buy that fuel.

With no legal route, vendors break the rules to survive. Shamim, a tea seller in Hasanpura, says he uses domestic cylinders simply to stay in business, working each day in fear of a fine.

That fear is well-founded. Also in Hasanpura, Usman and Kishan Singh had their cylinders seized during police raids, losing the one tool their livelihood depends on.

The trap closes from three sides. The system bars vendors from the legal supply chain, pushes them into a black market where the likes of Mangi Lal and Sonu Srivastav make call after call to find a cylinder at Rs 2,800, and then sends the police to punish them for buying it. The system is an institutional failure of a basic kind. The system does not protect the vulnerable. It punishes them for surviving.

## **A Blueprint for Reform**

The accounts of Rajesh, Shivpal, Tejpal, and Teena Chawala, who stopped vending for 12 days and lost all income in that time, show that the market design itself is failing. These vendors are not asking for charity or welfare. They want a fair and functioning market in which they can work.

To break this cycle, the state should pursue three structural reforms.

A micro-commercial fuel tier. The Ministry of Petroleum and Natural Gas should scrap the rigid household-versus-corporate binary. Using the country’s existing Digital Public Infrastructure, it could introduce a micro-commercial tier, such as 5kg or 12kg cylinders, tied directly to a vendor’s PM SVANidhi or e-Shram ID. That would let vendors buy clean fuel at stable official rates without having to produce commercial property deeds they cannot obtain.

Spatial deregulation. Municipal corporations should halt punitive raids and actually implement the Street Vendors Act of 2014. Replacing complex licensing with simple, open digital registration based on a market’s natural capacity would give vendors legal standing and protect them from arbitrary seizures and police extortion.

Open access to cleaner technology. To reduce the informal economy’s exposure to fuel-price shocks, the state should remove the barriers that keep vendors off cleaner options, giving them the same access to electricity connections, financing, and induction or solar-assisted equipment that any registered business enjoys. The aim is to widen the choices open to vendors, not to dictate which fuel they use.

When a system makes it easier to operate illegally than legally, the failure lies with the system, not the people trying to earn a living within it. The fix is not more direction from above, but a redesigned market in which the smallest entrepreneurs can register, buy fuel, and trade on fair terms.

* * *

Authored by [Dharmraj Joshi](mailto:dharmraj@ccs.in) Associate, Jeevika App at Centre for Civil Society.

Co- Authored by [Anamika Joshi](mailto:anamika.joshi@ccs.in), Manager, Growth and Innovation at Centre for Civil Society.

## When the Institutions Go Missing: A Stolen Phone and the Limits of the Social Contract 

Original: https://www.spontaneousorder.in/p/when-the-institutions-go-missing

Author: Spontaneous Order

Published: 2026-05-15T07:06:37.039Z

> Abiding by the Social Contract cost me Rs. 54,000

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By: Abhinav Bhatia

So my phone got stolen. It’s a bummer, right? But, fortunately, I knew exactly where it was. Apple’s family sharing feature in Maps meant I could track my phone in real time, a blue dot moving through streets I could name, updating every few minutes, broadcasting its location with quiet precision. What I did not have was anyone willing to act on that information. What followed was not simply a frustrating experience with bureaucracy. It was a reminder of a lesson in political philosophy from my undergrad days.

**Social contract theory**, developed by Hobbes, Locke, and Rousseau, holds that individuals voluntarily surrender certain freedoms to the state in exchange for protection, security, and justice. Hobbes in *Leviathan* (1651) described this as laying down one’s “right to all things” so that the state may act “for their peace and common defence” (Hobbes, 1651, Ch. XIV & XVII). John Locke, whose version of the social contract was more reciprocal than Hobbes’s, highlighted that the state’s authority is not unconditional. In the *Second Treatise of Government* (1689), Locke argued that “the reason why men enter into society is the preservation of their property”, which encompasses life, liberty, and estate, and that government exists solely as a “guard and fence” for those rights (Locke, 1689, sec. 222.). When the state fails this obligation, it does not merely disappoint; in Locke’s own terms, it commits a “breach of trust” by which it forfeits the very power the people had placed in its hands (Locke, 1689, sec. 222.).

Thus, the logic of the contract is straightforward: you give up the right to retrieve (here by force) what is yours, and in return, the state assumes the obligation of doing it for you, lawfully, proportionately, and reliably. This restraint is not incapability or weakness. To be honest, the thought of hiring someone to retrieve the phone or of showing up at the thief’s location myself did cross my mind. What stopped me was not incapacity, but the contract, the unwritten agreement that binds every law-abiding citizen to formal channels even when those channels are failing them.

So, I did what I could do: I filed the FIR. I returned to the station. I shared the live location. I waited. What I did not know at the time was that the theft had occurred on the border between two states, a geographic accident that became a huge problem. Each state’s police force pointed at the other. Responsibility was passed back and forth until the device, which had been moving and traceable, came to a permanent stop, and the phone was gone. A phone that technology had made easy to recover had been lost entirely to an institutional drama.

Moving away from political philosophy, let’s view this from an economic lens. I am a taxpaying citizen. The state institutions are funded by taxes that people like me pay. This is a very important detail that people seem to forget. In a democracy, public institutions are not doing citizens a favour when they respond to a crime; they are fulfilling a function that citizens have already paid for. Even if we remove the tax lens, when these institutions fail, it is not just a service failure. It is a breach of the same social contract that runs in both directions.

This is one example of what’s called the principal-agent problem. The principal-agent problem is a conflict of interest that occurs when one person or entity (the “agent”) makes decisions or takes actions on behalf of another person or entity (the “principal”). In the public sector, the problem arises when there is a disconnect between the goals and interests of politicians or public servants and the citizens they are supposed to serve. In theory, the police are agents acting on behalf of the citizen, the principal. In practice, when jurisdictional ambiguity makes accountability impossible to assign, agents on both sides of a state border can evade their responsibilities entirely, leaving the principal with no recourse. The information was there. The location was live. What was missing was any agent willing to be accountable for acting on it.

The arguments discussed above reveal the deeper problem. The issue is not that the authorities were unkind or that the system is entirely broken. It is that the structure of institutional accountability has not kept pace with the technology available to ordinary citizens. A normal mobile can now broadcast its precise GPS coordinates continuously. The limiting factor in recovering a stolen mobile is no longer a lack of information; rather, it is institutional and jurisdictional clarity. When those fail, the person who loses most is the one who followed every rule, trusted every channel, and exercised exactly the restraint the social contract asks of them; they are the ones who bear the cost (both literally and figuratively) of the state’s failure.

A democratic society asks its citizens to be law-abiding not merely as a civic duty but as part of a reciprocal arrangement. The state’s end of that arrangement is not optional. In my case, when jurisdictional ambiguity became a reason for inaction rather than a problem to be resolved, and when a law-abiding citizen’s only reward for restraint is an irretrievable loss, the contract is not being upheld; it is literally being broken. The blue dot went still on a Tuesday afternoon, and I received an update from the police station that the phone is no longer traceable. The question it left behind is harder to switch off: what do citizens make of institutions that are absent when they are needed most?

**Citations:**

Hobbes, T. (1651). *Leviathan.* Project Gutenberg. [https://www.gutenberg.org/cache/epub/3207/pg3207-images.html](https://www.gutenberg.org/cache/epub/3207/pg3207-images.html)

Locke, J. (1689). *Second treatise of government*. Hanover Historical Texts Collection. [https://history.hanover.edu/courses/excerpts/165locke.html](https://history.hanover.edu/courses/excerpts/165locke.html)

* * *

About the Author:

Abhinav holds a BA in Political Science and an MA in Development Studies, and brings experience in research, policy communication, and stakeholder engagement. His interests span sustainability, social entrepreneurship, and social sciences. He currently works at CCS as an Associate in the Academy.

## The Case of the Real-Life Zootopia 

Original: https://www.spontaneousorder.in/p/the-case-of-the-real-life-zootopia

Author: Spontaneous Order

Published: 2026-05-02T14:10:49.132Z

Topics: patents, rent-seeking, university-rankings, innovation-policy

> As we progress through the seemingly happy utopia that is Zootopia, we encounter the first signs of exclusion of a particular community: the reptiles.

**Summary:**

The post uses Disney's Zootopia 2 as a libertarian allegory for rent-seeking via patents, where crony capitalist Ebenezer Lynxley steals reptile innovator Agnes De’Snake's weather walls idea, patents it under his name, and uses government power to exile reptiles and suppress competition. This mirrors real-world government patent enforcement enabling monopolies for connected firms while barring smaller innovators. In India, universities like Galgotias game the NIRF rankings, which weight patents 30% in research scores, by filing low-quality duplicates—Galgotias filed 2,297 since 2011 (1% grant rate vs. 63% for top IITs), none commercialized. CGPDTM data shows only 1.6% of patents commercially worked in 2026. Patent examiners face monthly targets (15 reports, 25 disposals), leading to backlogs from junk filings. Galgotias falsely claimed a Chinese robot dog as in-house. The system incentivizes paperwork over genuine innovation, teaching appearance over substance and distorting markets through state-administered patents.

**Key points:**

- Government patent enforcement enables rent-seeking by allowing theft and suppression of true innovators, as depicted in Zootopia 2.
- Indian universities file junk patents for NIRF ranking points, with Galgotias achieving 2,297 filings since 2011 but only 1% granted and zero commercialized.
- Patent system backlogs overburden examiners under quotas, degrading quality control.
- Commercially worked patents fell to 1.6% in 2026, proving policy fails to spur market innovation.

**By Disha Banerjee**

The latest discussion on patents can easily lead us into a conversation about Judy Hopps, Nick Wilde, and Gary De’Snake adventuring through Zootopia in search of a long-lost patent. If you are unfamiliar with these characters, they are the heroes of the 2025 sequel, *Zootopia 2*. The film’s premise is something of a libertarian nightmare. It is the story of a crony capitalist, Milton Lynxley, partnering with local government in the form of Mayor Brian Winddancer to extract favours for his business. Milton merely follows in the footsteps of his grandfather, Ebenezer Lynxley, who built his empire on lies and government corruption. The Lynxley family enjoys the respect, fame, and wealth that come with being the descendants of the inventor of Zootopia’s weather walls, an innovation that allows the city to be home to animals from every kind of environment: hot deserts, cold tundra, rainforests, and open meadows.

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As we progress through the seemingly happy utopia that is Zootopia, we encounter the first signs of exclusion of a particular community: the reptiles. After a breathless chase through a water pipe and some heartbreaking disagreements between our cops, the lies Ebenezer Lynxley fabricated to advance his interests are finally laid bare. The weather walls, the single greatest innovation making Zootopia a utopia, are revealed to have been the original idea of Agnes De’Snake, a reptile. Agnes, an extraordinary innovator, had patented her idea and approached Lynxley seeking investment. Seeing the potential in her work, Ebenezer steals it and registers the patent in his own name. Later, he fabricates a murder to frame reptiles as dangerous and exiles them from the city using the force of the state. Eventually, Agnes’s lost patent is revived, and her name and innovation are restored to their rightful place in history.

What should catch the viewer’s attention here is a clear case of individuals seeking benefits and expanding their wealth by lobbying political actors, also known as “rent-seeking”. The Lynxleys used government power to suppress genuine innovators who arrived at their ideas through independent thought.

But how did Ebenezer manage to patent an idea that was already registered? The answer lies not in the failure of government enforcement, but rather in the very fact of government enforcement itself. Government involvement in the administration of patents has a [well-documented](https://prospect.org/2023/06/06/2023-06-06-how-big-pharma-rigged-patent-system/) tendency to create monopolies for connected businesses while shutting out those who threaten established lobbying interests. This erects entry barriers for smaller innovators and exposes them to litigation risks from larger firms operating under state protection.

This discussion would be incomplete without the case of Galgotias University, which filed and received an Indian patent for an “[IoT-Based Writing Pen for Monitoring the Health Parameters](https://share.google/RCIYGWoHgkxHr6uNE)” in 2024. In a manner that echoes *Zootopia 2*, an almost identical patent was filed by Samsung five years prior, in 2018 (see [here](https://share.google/xJlFnUghv19WulzIG)). No legal action was taken or even considered necessary because patent filings by universities do not serve the purpose of eventual commercialisation. They serve a very different, and far more conflicting, set of incentives.

The National Institutional Ranking Framework (NIRF), which ranks universities across several categories, including “Research and Professional Practice” (see [here](https://share.google/UDbE7xC1amimQd1rz)). This parameter carries a 30% weight in the overall score, with the volume of patents filed as a sub-metric. This induces a mindless race to file patents purely to accumulate points and improve rankings, regardless of the quality of those filings or their resemblance to prior work. The formula rewards patents published, not granted, and certainly not commercialised. They do not need a working invention. They just need paperwork.

Since 2011, Galgotias University has filed [2,297](https://share.google/eYYCAVwCsNZce5Aai) patent applications, surpassing the combined totals of IIT Bombay, IIT Madras, and IIT Kanpur. Only 24 of those applications were accepted, a success rate of roughly [one per cent](https://share.google/xMRQontkevr21LWSV), as opposite to a success rate of sixty-three per cent in IITs. Once the ranking points are collected, none of the patents reaches the market. Data from the Office of the Controller General of Patents, Designs and Trade Marks (CGPDTM) for 2026 shows that commercially worked patents fell to just 1.6% of all patents in force. A patent is considered commercially worked when the invention is actually manufactured, sold, or licensed in India, i.e., it has progressed from being a registered idea to being utilised in the market. A policy designed to advance innovation, therefore, not only fails to encourage it but actively distorts it. Educational institutions succumb to treating patents as a quota to fulfil rather than a natural product of genuine inquiry.

Some argue that even low-quality engagement with patents builds awareness and culture, and that imperfect participation is better than none. But consider the practical consequences. Patent examiners already work under government-imposed monthly targets of 15 new examination reports and 25 disposals. A flood of applications filed purely for ranking purposes lands on those same desks, deepening backlogs and squeezing the time available to scrutinise each case properly (see [here](https://share.google/uVxXOA8QeeeKmAzZK)). Quality control degrades under a volume that the government’s own incentive structure created. Teaching institutions that file without any commercial intention do not build an innovation culture. They teach that the *appearance* of innovation is what matters.

The most striking illustration of this is the moment [Galgotias University](https://share.google/wUFLXiXT8bDzbGtX5) announced on national television that the robot dog showcased at the India AI Impact Summit in New Delhi had been developed in-house. Within hours, internet users identified it as the Unitree Go2, a commercially available Chinese product retailing for approximately $2,200. The patent, it turns out, was not the only thing that had been borrowed.

## The Right to Be, Not to Be Proven.

Original: https://www.spontaneousorder.in/p/the-right-to-be-not-to-be-proven

Author: Spontaneous Order

Published: 2026-04-28T09:28:18.695Z

Topics: transgender-rights, self-identification, personal-autonomy, state-intrusion

> When the State starts issuing gender certificates, it shifts from protecting rights to policing identity.

**Summary:**

The Transgender Persons (Protection of Rights) Amendment Bill, 2026, undermines transgender rights by replacing self-declaratory identity certification with mandatory medical board approval via the District Magistrate, medicalizing and bureaucratizing gender identity in violation of the Supreme Court's NALSA v. Union of India (2014) ruling that affirmed self-identification as intrinsic to personal autonomy. While the 2019 Act allowed administrative processes prohibiting discrimination in education, employment, healthcare, and public spaces, the amendment conditions recognition on state-defined medical and sociocultural criteria, excluding non-conforming individuals from legal protections, welfare benefits, and documentation. This shift transforms the state from neutral guardian to gatekeeper of personhood, intruding into the sacred sphere of selfhood and rendering rights contingent rather than inherent. From a classical-liberal perspective, such oversight erodes individual liberty, normalizes state decision-making over intrinsic identity, and actively marginalizes through invisibility in law, echoing NALSA's emphasis on transgender persons' full human rights under constitutional rule of law.

**Key points:**

- The 2026 Amendment requires District Magistrates to obtain Medical Board approval for transgender identity certificates, replacing the 2019 Act's self-declaratory administrative process.
- This contradicts NALSA v. Union of India (2014), which upheld gender self-identification as fundamental to personal autonomy.
- Conditional recognition excludes non-conforming transgender individuals from anti-discrimination protections, welfare, and basic documentation.
- State validation of identity intrudes on privacy, positioning officials as arbiters of personhood rather than rights being inherent.
- Rights must remain unconditional to preserve liberty, avoiding the collapse of protection into control.

**By Jini Susan Thomas**

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The Transgender Persons (Protection of Rights) Amendment Bill, 2026, carries the language of protection but, in practice, restricts rights by imposing stricter conditions on recognising transgender identity. By expanding bureaucratic and medical oversight into the domain of gender identity, the bill makes the State’s gaze more intrusive, more medicalised, in the very sphere where individual liberty should be most sacred: the self. Instead of safeguarding dignity, it places individuals under scrutiny, requiring them to justify who they are, reframing identity as something to be verified rather than lived.

The amendment marks a departure from the constitutional vision established in *[NALSA v. Union of India](https://indiankanoon.org/doc/193543132/)*[,](https://indiankanoon.org/doc/193543132/) where the Supreme Court affirmed that gender identity is **intrinsic to personal autonomy** and upheld **the right to self-identify.** The original 2019 Act, despite its shortcomings, recognised transgender persons, prohibited discrimination in education, employment, healthcare, and public spaces, and enabled identity certification through an administrative process.

The 2026 Amendment, however, ties recognition to medical and sociocultural criteria, undermining the idea that identity is self-determined and making dignity conditional on compliance with **state-defined categories**. This narrowing of recognition raises a deeper concern about who is excluded and what exclusion means in practice. Those who self‑identify as transgender but do not fit these boxes are left outside the law’s protection.

**Recognition** in law is not merely symbolic, it determines access to rights, protections, and resources. When individuals fall outside state-recognised categories, they risk being denied welfare benefits, legal safeguards against discrimination, and even basic documentation. The absence of recognition can render people effectively invisible in the eyes of the law, leaving them without recourse when their rights are violated. In this sense, **lack of recognition is not neutral**, it actively produces marginalisation by excluding individuals from the legal and administrative frameworks.

Earlier, individuals could apply to the District Magistrate for a Transgender Identity Certificate through a largely self-declaratory administrative process, without mandatory medical scrutiny. The bill now requires the District Magistrate to seek approval from a Medical Board before issuing the certificate.

This shift subjects individuals to institutional validation, where doctors and officials determine whether someone’s identity is “legitimate.” It medicalises gender, reducing a deeply personal and lived experience to a clinical assessment. What changes now is the **nature of that proof,** shifting from a largely self-declaratory process to one requiring medical validation. Such a process not only intrudes on privacy but also reinforces the idea that identity must be proven to authority, allowing the State to insert itself into the most intimate sphere of human life

As individuals, we are already something of an open book to the State through documentation of religion, caste, address, and family composition. These practices have normalised the sharing of personal information, but what is happening now feels different because it cuts into something far more intrinsic, not just what the State knows about us, but what it is allowed to *decide* about us. Gender identity is not merely another data point, it is an intrinsic aspect of identity.

When identity requires approval, the State ceases to be a neutral guardian of rights and instead becomes a gatekeeper of personhood. By empowering officials and medical boards to invalidate personal identity, the amendment makes access to rights contingent on institutional acceptance.

Rights, however, are meant to be inherent, not something one earns by satisfying administrative criteria. Once recognition becomes conditional, individuals must prove their legitimacy to access what should already be guaranteed, and the boundary between protection and control begins to collapse. In a country where so many aspects of life are already documented and classified, this shift signals a deeper transformation, one where the State not only records who we are but increasingly decides who we are allowed to be.

*“Our Constitution inheres liberal and substantive democracy with rule of law as an important and fundamental pillar… These TGs, even though insignificant in numbers, are still human beings and therefore they have every right to enjoy their human rights.*” (*NALSA v. Union of India*, 2014)

## When Cities Forget Walkers: The Silent Crisis of India’s Streets

Original: https://www.spontaneousorder.in/p/when-cities-forget-walkers-the-silent

Author: Spontaneous Order

Published: 2026-04-28T09:16:04.445Z

Topics: pedestrian-safety, urban-planning, road-infrastructure, public-accountability

> A few weeks ago, a car mounted the footpath and ran over my foot, leaving me injured. I’m still limping a month later, but I will certainly recover.

**Summary:**

India's urban management systematically neglects pedestrians, the primary street users comprising 63% of urban trips per a 2019 survey, exposing them to precarious risks despite their rightful use of footpaths. The author's personal injury from a car mounting a Delhi footpath in a government office area underscores this failure, where even the capital's expensive neighborhoods lack safety. Key data reveals the crisis: 44% of Delhi roads have no footpaths, nearly half of road crash deaths there are pedestrians, Chennai's pedestrian fatality share rose from 11% in 2019 to 43% in 2023, a Bosch report shows 99% of pedestrians at injury risk with 60,000 crashes and 29,200 deaths in 2021 (91% human error, 63% poor infrastructure), and Nagpur's 6/7 roads fail design standards. Amid Rs 2.8 lakh crore annual public investment in roads, cities like Ahmedabad have 72% roads without footpaths, prioritizing vehicles over people. Successful contrasts like Pune's Pimpri-Chinchwad redesigns—continuous elevated footpaths, barriers, safer layouts under Urban Streetscapes—align with the 2006 National Urban Transport Policy's 'move people, not vehicles' ethos. The classical-liberal call is for accountability on urban bodies, stronger enforcement against encroachments and violations, and redirected focus to pedestrian-centric design to reduce injuries and fatalities.

**Key points:**

- Pedestrians make 63% of urban trips but face neglect, with 44% of Delhi roads lacking footpaths and 72% in Ahmedabad.
- Road deaths heavily impact walkers: nearly 50% in Delhi, up to 43% in Chennai by 2023, 29,200 fatalities nationwide in 2021.
- Despite Rs 2.8 lakh crore annual road investments, 99% of pedestrians remain at injury risk due to poor infrastructure and enforcement.
- Pune's street redesigns with barriers and elevated footpaths succeed by prioritizing walkability per National Urban Transport Policy.
- Urban bodies need accountability and stricter enforcement to prevent footpath encroachments and vehicle intrusions.

**By Aayushi**

* * *

A few weeks ago, a car mounted the footpath and ran over my foot, leaving me injured. I’m still limping a month later, but I will certainly recover. What’s harder to heal from is the realisation that the Indian pedestrian lives a precarious life. I wasn't jaywalking. I was exactly where I was supposed to be on the footpath. Yet, a car climbed onto the pavement and struck me anyway. The photograph below shows the tree-lined road full of government offices, where a car ran over my foot. A pedestrian isn’t safe even in the capital city of India, in an expensive neighbourhood, on a footpath. It points to a deeper failure of urban management, in which design, enforcement, and accountability consistently underperform.

Thanks for reading Spontaneous's Substack! Subscribe for free to receive new posts and support my work.

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India’s urban management neglects the primary user of the streets, pedestrians. A 2019 [survey](https://www.ceew.in/sites/default/files/ceew-study-on-sustainable-transportation-mobility-in-urban-india-2022Oct19.pdf) found that pedestrians accounted for 63% of trips in urban India. However, the infrastructure of most cities doesn’t reflect this reality. A study found that 44% of roads in Delhi have no footpaths.

Anyone who has walked on Indian streets knows what it’s like to deal with broken footpaths and careless driving. Drivers often ignore zebra crossings. Footpaths are broken or obstructed, sometimes by parked vehicles. Crossing the road can require navigating fast-moving traffic with little protection, especially for children or the elderly. Even without data, it’s clear that walking in many Indian cities involves a degree of risk which often leads to serious injury or even death.

In Delhi, nearly half of all road crash deaths are pedestrians. In Chennai, the share of pedestrian deaths has shot up from just 11% of total fatalities in 2019 to 43% in 2023. This data shows that cities need to focus more on safe footpaths, crossings, and traffic management to cut these numbers.

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](https://substackcdn.com/image/fetch/$s_!tvs7!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fd30a4b5f-d5be-4f72-8418-5a1236478ecb_1920x1080.jpeg)

A [Bosch report](https://www.business-standard.com/india-news/around-99-of-indian-pedestrians-at-risk-of-injury-reports-bosch-123051500566_1.html?utm_source=chatgpt.com) based on 2021 data finds that 99% of Indian pedestrians are at risk of injury. That year, there were 60,000 pedestrian crashes, resulting in 29,200 fatalities; 91% were due to human error, 63% due to poor infrastructure, and 44% due to vehicle issues. The vast majority of Indians, including you, could be the victim of a system that fails to protect its most basic road users.

A [report](https://timesofindia.indiatimes.com/city/nagpur/6-of-7-nagpur-streets-fail-design-test-nmc-report/articleshow/122410313.cms?utm_source=chatgpt.com) in Nagpur found 6 out of 7 evaluated roads failed basic design and safety standards. These roads had discontinuous footpaths, encroachments, unsafe junctions, and missing cycle lanes, indicating a broader pattern of gaps in basic street design and safety standards across cities. This failure becomes even more concerning when placed alongside the scale and priorities of public investment in urban roads.

Public investment in roads and highways has surged to over Rs. 2.8 lakh crore annually, reflecting a strong policy focus on vehicle infrastructure. Yet, this investment has not translated into safe spaces for pedestrians. 44% of roads in Delhi lack footpaths, and in cities like Ahmedabad, nearly 72% of roads have none. Despite pedestrians accounting for a majority of road deaths, a poorly designed crossing is not seen as a failure of the system, but as your fault for choosing to cross.

Not all cities in India are equally unsafe for pedestrians. In parts of Pune, especially in Pimpri-Chinchwad, street redesign projects have introduced features like continuous and elevated footpaths, barriers to prevent two-wheelers from entering sidewalks, and safer, more inclusive street layouts under programmes such as the Urban Streetscapes initiative. Pune’s approach aligns with the National Urban Transport Policy (2006). The policy explicitly called for cities to ‘move people, not vehicles,’ and emphasised public transport, walkability, and safe infrastructure for pedestrians.

In most cities, however, pedestrians are neglected. Urban local bodies face little accountability for missing or encroached footpaths, and there are no serious consequences for failing to provide safe pedestrian infrastructure. Even flagship initiatives like Smart Cities need to place greater focus on street-level infrastructure for pedestrians. Currently, most infrastructure projects focus on building flyovers and highways that serve pedestrians poorly.

Even when footpaths exist, vehicles often use them to get through during heavy traffic or simply as free parking spots. Stronger enforcement of rules would make these spaces safer and more reliable for pedestrians. Investment in improving existing footpaths and developing new ones could significantly reduce injuries and fatalities. Streets reflect the priorities we build into them. With better design, consistent enforcement, and thoughtful management, they can work for everyone and not just vehicles.

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## Two Wheels, No Rights: The Bengaluru Bike-Taxi Ban

Original: https://www.spontaneousorder.in/p/two-wheels-no-rights-the-bengaluru-bike-taxi-ban

Author: Spontaneous Order

Published: 2026-03-13T11:48:49.000Z

Topics: bike-taxis, gig-economy, regulatory-capture, economic-freedom

> The recent controversy about the bike-taxi platforms in Bengaluru, particularly the case of Rapido, reveals a deeper conflict between technological innovation, giving autonomy to individuals seeking flexible work, v/s the interests of a few individuals ..

**Summary:**

The Karnataka High Court's ban on bike-taxi services like Rapido in Bengaluru, due to the absence of notified rules under Section 93 of the Motor Vehicles Act, exemplifies regulatory capture by auto-rickshaw and taxi unions protecting their market privileges against innovative competition, as warned by Adam Smith. This decision halted operations within six weeks, immediately devastating over 1.2 lakh lower-income gig workers who earned ₹800–1,000 daily by monetizing their motorcycles, forcing many into parcel delivery at half the wages. Drawing on Hernando de Soto, the author argues this prevents the poor from converting personal assets into productive capital, trapping wealth as 'dead' capital. Echoing Amartya Sen, such policies curtail human capabilities and economic freedoms for gig workers and consumers like students, low-income commuters, and women seeking affordable mobility. The classical-liberal critique frames the conflict as prioritizing incumbent lobbies over individual autonomy, innovation, and public choice, urging regulations that foster competition and participation without foreclosing livelihoods for the least powerful.

**Key points:**

- Karnataka High Court ruled bike-taxis illegal absent Section 93 notification, ordering halt within six weeks.
- Over 1.2 lakh gig workers lost ₹800–1,000 daily earnings, shifting to half-wage delivery jobs.
- Transport unions pressure government to block competition, exemplifying Smith's warnings on merchant monopolies.
- Bans prevent poor from using motorcycles as productive capital, per de Soto.
- Policies should expand freedoms for gig workers and consumers via competition, not protectionism.

**By Abhinav Bhatia**

* * *

The recent controversy about the bike-taxi platforms in Bengaluru, particularly the case of Rapido, reveals a deeper conflict between technological innovation, giving autonomy to individuals seeking flexible work, v/s the interests of a few individuals who are unwilling to share the market. This issue reached the Karnataka High Court after Rapido challenged earlier restrictions placed on its operations, prompting the Court to examine whether bike-taxis were permissible under existing transport law. During the hearings, the Karnataka government informed the Court that it had not notified any rules under Section 93 of the Motor Vehicles Act that would allow bike-taxis to operate as a contract-carriage service. In the absence of such a policy, the Court held that aggregators could **not** legally run motorcycle-based taxi services and ordered all operators to halt bike-taxi operations within six weeks. What began as a petition seeking regulatory clarity, ultimately highlighted the deeper tensions between livelihood freedom and regulatory measures.

The political-economic context behind this issue is crucial to understand the situation. Karnataka’s auto-rickshaw and taxi unions had consistently pressured the government to prevent bike taxis from entering the market, arguing that they represented unfair competition and would erode the earnings of traditional transport workers. This dynamic reflects a pattern that Adam Smith had identified centuries earlier: established commercial interests routinely use political influence to restrict competition and protect their own privileges at the public’s expense. Smith warned that proposals from such groups should be treated with “great precaution,” arguing that merchants and manufacturers possess an interest that is “never exactly the same with that of the public” and that they habitually seek monopoly protections to the detriment of consumers and new market entrants [(Smith, 1776/2005, Book I, Ch. XI, pp. 213–214)](https://www.rrojasdatabank.info/Wealth-Nations.pdf). 

The pressure exerted by Karnataka’s transport unions on the state government to keep bike taxis out of the market is a direct example of this. This dynamic appears in Bengaluru, where political demand to regulate bike taxis was shaped less by evidence and more by fear of organised unions capable of exerting voting pressure. The outcome is an uneven regulatory landscape where new, low-cost forms of mobility/movement remain trapped in legal ambiguity while older transport lobbies maintain their monopolistic stability.

The core issue, however, is not merely administrative delay or sectoral politics, it is the question of **individual freedom**. Bike-taxi riders are not large corporations; they are overwhelmingly lower-income workers who own a motorcycle and seek to monetise it in a flexible manner. Preventing a person from using their own legally purchased asset to earn a livelihood reflects what Hernando de Soto (2000) identified as a foundational barrier faced by the poor in developing economies: they possess real assets but are excluded from the formal legal frameworks that would allow those assets to function as **productive capital**, leaving their wealth effectively “dead” and inaccessible to the wider market [(de Soto, 2000, pp. 29–35)](https://yendieu.wordpress.com/wp-content/uploads/2009/04/the-mystery-of-capital.pdf). 

In Bengaluru, the human cost of the ban was immediate and severe. Over 1.2 lakh gig workers who had built their livelihoods around bike-taxi platforms lost their primary source of income, with riders reporting daily earnings of ₹800–1,000 that were suddenly reduced to nothing [(BangaloreBeat, 2025)](https://www.bangalorebeat.com/post/karnataka-bike-taxi-ban-2025-commuters-drivers-legal-chaos). Many were forced into parcel delivery work, where they earned roughly **half** their previous wages amid intensified competition and fewer opportunities [(NewsBytesApp, 2025)](https://www.newsbytesapp.com/news/india/struggling-bike-taxi-riders-amid-karnataka-ban/tldr). When livelihood choices are restricted through policy non-decisions, the state limits not just income but economic agency.

Framing the bike-taxi debate as one about freedom rather than transport policy highlights how regulations shape **human capability**. Amartya Sen (1999) conceptualised development as the expansion of freedoms, including the freedom to participate in economic activity. When the state, intentionally or through action, eliminates an accessible pathway for work, it reduces individuals’ capabilities to pursue lives they value. For many riders, bike taxis are not a side hustle but a mechanism for financial independence. Likewise, consumers, particularly students, low-income commuters, and women seeking affordable point-to-point transport, lose meaningful choices when the state restricts innovation in mobility services. The concern, therefore, extends beyond gig workers to the broader public, whose everyday freedom to choose efficient and affordable mobility options becomes constrained.

The Bengaluru case demonstrates how modern regulatory debates are often struggles over the distribution of freedom. Innovation introduces new possibilities, incumbents resist those possibilities, and the state’s role becomes arbitrating whose freedom takes precedence. When policy delays function as de facto bans, the freedom that is compromised is that of the **least powerful actors**: small entrepreneurs, gig workers, and ordinary consumers. A democratic society should aspire to regulations that enable participation, competition, and safety without foreclosing livelihood opportunities. The bike-taxi controversy offers a timely reminder that economic freedom is not an abstract principle but a lived experience shaped by everyday access to work, mobility, and choice.

* * *

**About Abhinav Bhatia**

Abhinav holds a BA in Political Science and an MA in Development Studies, and brings experience in research, policy communication, and stakeholder engagement. His interests span sustainability, social entrepreneurship, and social sciences. He currently works at CCS as an Associate in the Academy.

## The Moral Case Against Gun Control

Original: https://www.spontaneousorder.in/p/the-moral-case-against-gun-controls

Author: Spontaneous Order

Published: 2026-02-27T16:01:43.000Z

Topics: gun-control, self-defense, self-ownership, property-rights

> Draconian gun controls make guns whisper, not recoil. They turn firearm possession into a privilege rather than a liberty. Scholars have debated the empirical effects of civilian firearm access, not least in the United States. But statistics aside, we m..

**Summary:**

Draconian gun controls turn firearm possession into a privilege rather than a liberty, lacking moral authority to disarm competent law-abiding citizens. From classical-liberal first principles, self-ownership entails rights to voluntarily acquired possessions, including guns as property, no less protected for their danger than knives or hockey sticks. Property rights are limited by proportionality and discriminability—guns enable discriminate self-defense without infringing others' rights, unlike nuclear weapons, aligning with Robert Nozick's view. The right of self-preservation, per John Locke, precedes the state: aggressors forfeit claims against resistance, and guns provide effective means, especially equalizing for the elderly, women, and weak against stronger attackers. Restrictionists redefine self-defense as aggregate safety, but this, as Lester Hunt argues, hollows its intuitive meaning; needs-based policies fail as victimization is unpredictable. Firearms affirm dignity by enabling resistance, per Deane-Peter Baker, positioning citizens as self-authors rather than passive wards of the state. In a free society prioritizing self-ownership and dignity, prohibitions on gun ownership are morally indefensible; the burden of justification rests with disarmers.

**Key points:**

- Self-ownership grounds property rights in guns, protected morally like other dangerous tools.
- Guns enable proportionate self-defense consistent with others' rights, remedying physical imbalances.
- The right to self-preservation precedes state authority, making disarmament a denial of effective means.
- Restrictionist aggregate-safety arguments drain self-defense of its deontological core.
- Firearm resistance affirms personal dignity against aggression.

**By Anshu Chowdhury**

* * *

Draconian gun controls make guns whisper, not recoil. They turn firearm possession into a privilege rather than a liberty. Scholars have debated the empirical effects of civilian firearm access, not least in the United States. But statistics aside, we must look at a deeper question: does the state have the moral authority to disarm competent law-abiding citizens?

Beginning from first principles will help. A free society rests on the idea that individuals own themselves. The maxim of self-ownership endows individuals with the rights to possessions acquired voluntarily. Property rights flow from this premise. A gun is a type of property. It is dangerous, yes, but tools do not lose moral protection because they are dangerous. What holds for knives and hockey sticks must hold for guns.

Property rights, of course, are not unlimited. No one claims that individuals should be allowed to own nuclear weapons. But that concession is not a case against firearms. The distinction between such extraordinary weapons and guns lies in proportionality and discriminability. Nuclear bombs cannot be used without indiscriminate destruction. Their deployment violates innocent lives. Guns by contrast can be used for defense in ways that are consistent with the rights of others. Robert Nozick did not view gun ownership as infringing the boundaries of others’ rights.

The moral foundation of this position becomes clearer when we turn to the right of self-preservation. Imagine walking home to find a burly attacker lunging at you. John Locke held that an aggressor, by initiating violence, forfeits all claims to not be resisted. You may strike back in self-defense. The right of self-defense is not granted by the state. It precedes political authority and licensing.

Yet a right without a means to exercise it is hollow. A state that makes it difficult for citizens to own guns leaves them unable to defend against lethal violence. Guns are thus an effective means of self-defense.

But why just guns? One could in theory defend using swords and knives. Suppose you’re weak and are faced off against that burly man in close combat. In practice, bodily strength would determine the outcome. A firearm remedies that imbalance. Guns are great equalizers allowing the elderly, women, and physically vulnerable to defend themselves.

Restrictionists respond by redefining the right to self-defense. For them, self-defense is a mere means to enhanced safety— a reduced probability of being harmed. If banning guns lowers aggregate violence, they contend rights are best safeguarded. Accepting this premise would indicate that a few unlucky individuals who might have otherwise defended themselves die, but society gains overall security. But as philosopher Lester Hunt argues, this view drains self-defence of its intuitive meaning. Such an understanding leaves no room for people to defend themselves when faced against an aggressor.

The restrictionist camp offers a secondary argument for limiting gun ownership. Philosopher David DeGrazia suggests that a needs-based policy should restrict guns to people who are vulnerable. This argument too fails since people cannot predict when they will be victimized. Putting a burden of clairvoyance on potential victims is unsound.

Security based accounts of gun controls overlook another moral dimension. Philosopher Deane-Peter Baker argues that firearms help assert dignity. How often do we admire those who resist aggression? Resistance affirms people’s status as ‘persons,’ not as tools at the hands of their aggressors.

This is the moral core of the matter. Should citizens be self-authors of their own preservation, or passive wards who must await the protection of centralized authority? In a free society, self-ownership, and dignity are paramount. When anchored on such a moral order, prohibitions on firearm ownership become difficult to defend. The burden of justification then lies not with those who wish to protect themselves, but with those who would disarm them.

* * *

**About Anshu Chowdhury**

Anshu Chowdhury is Junior Associate at CCS Academy. He studies political science at Hindu College, University of Delhi.

## Indian libertarians must talk to the Elephant, not the Rider

Original: https://www.spontaneousorder.in/p/indian-libertarians-must-talk-to-the-elephant-not-the-rider

Author: Spontaneous Order

Published: 2026-02-04T12:07:56.000Z

Topics: indian-libertarianism, consequentialism, natural-rights, moral-intuitions

> Indian libertarians have been losing the war of ideas. Is this because libertarianism is a weak philosophy? I think not. In fact, libertarianism is very coherent as a philosophy, unlike its three cousins: the closest one liberalism, the farthest communi..

**Summary:**

Indian libertarians are losing the war of ideas not because libertarian philosophy is weak—its coherence stems from commitments to individual moral primacy, non-coercion, and private property—but because they over-rely on consequentialist arguments that emphasize economic outcomes like poverty reduction through markets. These rational appeals target the 'rider' (reasoning) in Jonathan Haidt's metaphor from 'The Righteous Mind,' ignoring the 'elephant' (intuitions) that truly drives moral judgments. In contrast, Marxism succeeds with intuitive theories of history, power, and exploitation addressing unemployment, inequality, and caste; BJP conservatism offers stories of civilizational decay and belonging. Libertarian arguments appear as mere technical preferences like tax cuts and deregulation, lacking explanatory power for existential concerns. To win, Indian libertarians must shift to natural rights frameworks, portraying liberty as a baseline moral entitlement and coercion as inherent wrong and moral injury—e.g., Dalit entrepreneurs needing permissions as violations of dignity, not just inefficiency. This intuitive language resonates more. The path forward: develop Indian libertarian scholarship in philosophy and political thought to make ideas intelligible to everyday moral experiences, speaking to the elephant to escape fringe irrelevance.

**Key points:**

- Indian libertarianism fails politically by over-relying on consequentialist economic arguments that appeal only to reason (the rider), not intuitions (the elephant).
- Marxism and conservatism resonate intuitively with theories of exploitation, power, history, and civilizational belonging, unlike libertarian technical preferences.
- Adopt natural rights frameworks to frame coercion as moral injury and violation of dignity, applicable to issues like caste-based regulatory hurdles for Dalit entrepreneurs.
- Develop Indian libertarian scholarship in philosophy and political thought to make ideas accessible to everyday moral intuitions.

**By Anshu Chowdhury**

* * *

Indian libertarians have been losing the war of ideas. Is this because libertarianism is a weak philosophy? I think not. In fact, libertarianism is very coherent as a philosophy, unlike its three cousins: the closest one liberalism, the farthest communism and conservatism. Unlike its distant relatives it enjoys the support of few around the globe— perhaps one of the reasons why it’s not as diluted. Its consistency is reflected in its three core philosophical commitments: moral primacy of the individual, a focus on non-coercion and the right to maintain private property.

No, this is not an essay about why libertarian philosophy works. It is not my burden to prove, for serious academics have tussled with such problems long. My intention is to point fingers at a glaring aperture in how libertarian ideas are advocated in India.

The way contemporary libertarianism is articulated in India is consequentialist. Consequentialism is a moral philosophy that justifies its actions by its end outcomes. Adopt X policy, and this will lead to Y outcomes. Such arguments, often economic in nature, are maintained by economists, policy wonks, and businesspeople. A libertarian consequentialist argument would be this: markets reduce poverty faster than state planning, and therefore adoption of libertarian rules by a society will lead to increased welfare. There’s nothing bad about such consequentialist arguments. They make the case for libertarian ideas stronger. But are they enough?

I contend not. Over-reliance on consequentialist frameworks has led Indian libertarianism to its own demise. It overlooks the importance of maintaining a coherent doctrine. What’s worse is it lacks rhetorical quality.

Consider the case for Marxism. Its appeal lies not in its economic models. Few Indian Marxists could claim mastery over its heterodox economics and yet this hardly matters. Marxism’s communicative power lies elsewhere. It matters more that Marxism offers a theory of history, a theory of power, and a theory of exploitation. You are unemployed? Your life feels constrained? Is there too much inequality? You’re concerned with your caste position? Marxism offers appealing answers to you. It makes the world legible for you, almost in a cookie cutter format. BJP’s civilizational conservatism has a strong appeal factor as well. It offers a story of civilizational decay, and belonging. Religious humiliation bears more action than data.

Contrast this with libertarian arguments that often appear as a set of technical preferences. Cutting taxes, freer trade and fewer regulations are good rational ideas in themselves. But they do not offer easy answers to existential questions such as the ones posed above. Their explanatory power falters.

Now why do people not see through the rational arguments that libertarian consequentialists promote? Are people stupid?

Looking at social psychologist Jonathan Haidt’s work ‘The Righteous Mind’ (2012) will help. Haidt contends that people make moral judgements intuitively. They adopt ideologies to which they already feel aligned to without much reasoning.  

He uses a metaphor of a ‘rider’ and an ‘elephant’ to describe this. The rider represents our reasoning, and the elephant represents our intuitions. We like to think the rider is in control, but in reality, it is the elephant that decides where to go. The rider just follows and then justifies the direction afterward. This means that reasoning is often not about discovering the truth, but about defending what we already feel.  So, if you try to change someone’s moral commitments by appealing only to reason i.e. by speaking only to the rider, you will fail because their intuitions or the elephant will resist you.

What this means for Indian libertarianism is this: our arguments thus far are rider styled. They are rational, and good reasoning proves them. They are sound economic principles after all. But these don’t always translate to good political communication. We have yet to address the elephant— the intuition. We have been bad at this. The appeal of Marxism and Conservatism is because they target the elephant. Libertarian consequentialist thought relies more on overriding intuitions. Hence the unpopularity.

Indian libertarianism however need not remain anemic in its intuitive richness. Libertarian philosophy has more to offer than its Indian articulation suggests. Consequentialism is but one road to an open society. The answer I believe lies elsewhere. Indian libertarians must pay attention to other foundations of libertarian political thought that are more accessible. 

One promising alternative deserves attention: natural rights. Natural rights can best be understood as a baseline moral right that comes with being a person. All persons possess the same natural rights. For e.g. all people have a natural right to not be enslaved. Such natural rights could be grounded in both theological and secular foundations.

A libertarian natural rights framework argues that liberty is owed to all individuals. Coercion here is not framed as ‘inefficient,’ but as a wrong in itself. Domination is framed as a moral injury. Such arguments could be made to speak to matters of dignity and violation, and extended to the logic of caste and inequality. For instance, when a Dalit entrepreneur must seek permission at every step to start a small enterprise, the injustice could be framed not just as economic inefficiency but the moral injury of being treated as someone whose freedom requires authorization. What matters is that such arguments have a far more intuitive language than the consequentialist vocabulary that dominates libertarian discourse in India. They are more resonant.

To develop this sensibility, we need Indian libertarian scholarship in areas of philosophy, and political thought. It is only through such work that libertarianism will resonate with the Indian intuition. We must learn to speak to the elephant and not just the rider. Libertarian thought must be made intelligible not only to economists but to the everyday moral experience of the Indian. Until then, libertarianism will remain confined to the fringes. Respectable but irrelevant to India’s political culture. 

* * *

**About Anshu Chowdhury**

Anshu Chowdhury is Junior Associate at CCS Academy. He studies political science at Hindu College, University of Delhi.

## The Truman Show: The New Everyday Reality

Original: https://www.spontaneousorder.in/p/the-truman-show-the-new-everyday-reality

Author: Spontaneous Order

Published: 2026-01-22T09:37:12.000Z

Topics: surveillance, privacy, panopticon, self-regulation

> The Truman Show, a 1998 classic starring Jim Carrey as Truman Burbank, follows the life of Truman Burbank, an ordinary man living in Seahaven, who slowly discovers that his entire existence is an elaborately constructed television show broadcast to mill..

**Summary:**

The post draws a parallel between the 1998 film The Truman Show—where protagonist Truman Burbank lives an entire life under constant, manipulated surveillance in a constructed TV set—and contemporary everyday reality in India and beyond. Daily activities like commuting on the Delhi Metro from Green Park to Dilli Haat INA, UPI or bank transactions for groceries, and Instagram doom-scrolling are tracked by multiple institutions through physical and digital means. Unlike Truman's unwitting subjection, individuals now willingly 'Allow' apps, trading privacy for convenience, internalizing surveillance to the point of self-regulation. Invoking Michel Foucault's panopticism, inspired by Jeremy Bentham's Panopticon prison design, the author argues that perceived constant visibility—via apps, platforms, and policies promising efficiency, safety, and connection—leads people to police their own behavior without overt coercion. Modern surveillance differs by rewarding visibility with validation and access, imposing social or economic costs for opting out, turning self-regulation into habit rather than fear. From a classical-liberal lens, this normalized panopticon lacks Truman's dramatic exit; most prioritize convenience over privacy, embedding quiet compliance into daily life as the true tragedy.

**Key points:**

- Everyday activities like Delhi Metro rides, UPI payments, and social media use subject individuals to pervasive surveillance by multiple entities.
- Foucault's panopticism explains how assumed constant watching prompts self-regulation, mirroring Bentham's Panopticon prison.
- Contemporary surveillance incentivizes visibility through convenience and rewards, unlike coercive models, fostering voluntary compliance.
- Most people accept surveillance as the cost of modern life, with no clear escape unlike Truman's realization.

**By Samyuktha Rajesh**

* * *

The Truman Show, a 1998 classic starring Jim Carrey as Truman Burbank, follows the life of Truman Burbank, an ordinary man living in Seahaven, who slowly discovers that his entire existence is an elaborately constructed television show broadcast to millions. Every aspect of Truman’s life, from his intimate relationships to his job and even the physical surroundings, such as his town, is a set and system in place to monitor and track his movements. He, without realising it, is under constant surveillance. The film shows how events in his life are staged, and his actions are manipulated without him realising it. 

While The Truman Show is a satirical film, we may not have realised how closely Truman’s life mirrors our everyday reality. Our daily activities, as small as taking the Delhi metro from Green Park station to Dilli Haat INA, buying everyday essentials such as groceries (using UPI o bank transactions), and even the doom-scrolling that we do on Instagram, are all under some form of surveillance, both physically and digitally. Unlike Truman, we have no single Christof who monitors or tracks our movements. We live in a world where multiple institutions and systems are in place that keep a constant eye on our movements. Every time we tap “Allow”, we trade privacy for convenience; we continue the same bargain Truman never consented to, except we do it willingly. This surveillance has become so internalised that, like Truman, we have also started behaving in a certain way, where our actions and behaviours are manipulated because of this surveillance.

Long before smartphones, Michel Foucault warned that the most effective form of power is one that makes people police themselves. He introduced panopticism, a theory that talks about how individuals start self-regulating their behaviour because they sense that they are always being watched. He came up with this idea based on the Panopticon, a prison system designed by Jeremy Bentham that essentially has one watchtower, and the prison cells are arranged around it such that every prisoner can be monitored from the watchtower. However, the prisoners cannot see when someone is watching over them from the tower. This leads to them thinking they are under constant surveillance, and therefore they self-regulate their behaviour. 

Now, in our everyday life, the world in itself has become a panopticon. Individuals shape their behaviour in a certain way because they feel they are always visible to someone. This idea of always being in someone’s sight has led to internalising self-regulation. 

What makes contemporary surveillance different from the panopticon Foucault described is that it no longer feels like confinement. It presents itself as a choice. The watchtowers now are the apps, platforms, and policies that promise efficiency, safety, and connection. We are not forced to remain visible; we are “encouraged” to be. Visibility is rewarded with convenience, validation, and access, while opting out often comes at a social or economic cost. In this world, surveillance does not operate through overt coercion but through subtle incentives, making self-regulation not an act of fear but a habit of everyday life.

Unlike Truman, whose moment of realisation led to an exit, our surveillance has no clear walls and no single door that will save us, because an overwhelming number of us will always prioritise convenience over privacy. The systems that watch us are normalised and embedded into everyday convenience. There is no dramatic escape, only quiet compliance. In this sense, the tragedy of our reality is not that we are watched, but that we have accepted watching as the cost of convenience.

* * *

**About Samyuktha Rajesh**

Samyuktha Rajesh is a Junior Associate in the Learning and Development (L&D) team at the Centre for Civil Society. She holds a Bachelor’s degree in International Relations and has a strong interest in public policy, with a focus on understanding how ideas translate into effective institutions and governance outcomes.

## Education without Planning: A Spontaneous Learning Ecosystem

Original: https://www.spontaneousorder.in/p/education-without-planning-a-spontaneous-learning-ecosystem

Author: Spontaneous Order

Published: 2026-01-09T10:30:28.000Z

Topics: education, decentralization, school-choice, national-education-policy

> Our education system is one of the most centrally planned sectors of society. From the textbook curriculum to evaluation systems, the learning environment is heavily institutionalised and follows a one-size-fits-all approach. From the very beginning, ch..

**Summary:**

India's education system is one of the most centrally planned sectors, enforcing a one-size-fits-all curriculum and evaluation that teaches 'what to think,' stifling independent thinking, curiosity, and creativity while yielding poor learning outcomes. The author, from a classical-liberal perspective, advocates reimagining it as a spontaneous learning ecosystem emerging bottom-up, where students, teachers, and schools freely adapt to unique needs, diverse teaching styles, and local contexts in a heterogeneous country like India. This rejects top-down uniformity in favor of liberty for stakeholders to decide what and how to teach, enabling diverse pedagogies—such as online learning and project-based sessions—to coexist and spread organically through parental and learner choice, fostering trust-based learning. The state's role shifts from provider to facilitator, ensuring access to quality education and enabling diverse models, as partially begun by the National Education Policy (NEP) 2020, but requiring further scaling back of regulatory and bureaucratic control. In conclusion, this spontaneous order benefits all by providing individualized attention, nurturing curious minds suited to each student's abilities.

**Key points:**

- Centralized education enforces uniformity that kills curiosity and independent thinking, despite poor outcomes.
- Spontaneous learning ecosystems emerge bottom-up, allowing diverse pedagogies to spread via free choice by parents and learners.
- The state must shift to facilitating access and diversity, scaling back regulations beyond NEP 2020 to enable innovation.
- Trust-based learning replaces rote retention, tailoring education to individual needs and local contexts.

**By Samyuktha Rajesh**

* * *

Our education system is one of the most centrally planned sectors of society. From the textbook curriculum to evaluation systems, the learning environment is heavily institutionalised and follows a one-size-fits-all approach. From the very beginning, children are taught ‘what to think,’ moulding them all to follow a certain narrative instead of carving out individual identities. An education system like this kills independent thinking and curiosity, stifles creativity, and leaves students stuck in a cycle of passive learning. Despite such strong central control over the education system, the learning outcomes of students have shown little to no improvement. 

What if the education system were reimagined? What if the education system were allowed to flourish without centralised top-down planning? What if there were more freedom and choice for students and parents? 

First of all, it is imperative that no central authority can ever design a foolproof system that can understand the preferences, needs, and contexts of millions of individuals. It is important to understand that each young mind is unique, each teacher has a different teaching style, and in a diverse country like India, the local contexts are very different. Therefore, to implement a centralised system in such diversity means to force a sense of uniformity when there is none to begin with. Now, if we rethink the learning environment as an ecosystem where students, teachers, and schools have the liberty to function, adapt, and flourish according to their own local needs and contexts, all stakeholders in the learning process gain the freedom to decide what and how to be taught. 

A spontaneous learning order means that a system is allowed to emerge bottom-up instead of designing a new system top-down.

A system that has a centralised textbook curriculum will end up holding examinations that focus on the retention of textbook content. In a spontaneous learning environment, there will be diverse pedagogical approaches that can co-exist, such as online learning, project-based sessions, etc. Successful practices would spread organically, not because they were mandated, but because learners and parents would freely choose what works best. A system of trust-based learning will take over.

This, however, does not mean that there is complete abandonment of the state. Here, the role of the state will shift from being a provider of education to acting as a facilitator, by ensuring access to quality education to all and enabling diverse models of learning to exist. In India, the National Education Policy (NEP) 2020 is a step towards flexibility in the education system. However, there is still a lot of regulatory power that remains with the state that can be further scaled back. In order to build a trust-based learning environment,  there needs to be freedom for schools, teachers, and students to innovate learning strategies without much bureaucratic control. 

In conclusion, a reimagined spontaneous learning environment can benefit all stakeholders, meet the requirements and needs of each student. It will not be a one-size-fits-all policy, allowing each student the care and attention they deserve. This will nurture curious minds by allowing them to learn in a manner that best suits their ability. 

* * *

**About Samyuktha Rajesh**

Samyuktha Rajesh is a Junior Associate in the Learning and Development (L&D) team at the Centre for Civil Society. She holds a Bachelor’s degree in International Relations and has a strong interest in public policy, with a focus on understanding how ideas translate into effective institutions and governance outcomes.

## The Right to Education Act: A Well-Intentioned but Flawed Policy?

Original: https://www.spontaneousorder.in/p/the-right-to-education-act-a-well-intentioned-but-flawed-policy

Author: Spontaneous Order

Published: 2025-12-24T15:29:43.000Z

Topics: rte-act, education-policy, learning-outcomes, private-schools

> Note: This article is generated with the assistance of artificial intelligence and is intended as an analytical interpretation of the referenced dialogue. It reflects the author’s understanding of the discussion and does not claim to be a verbatim trans

**Summary:**

The Right to Education Act (RTE) of 2009 promised to make elementary education (ages 6-14) a fundamental right in India, but after 15 years, it exemplifies well-intentioned symbolism over substantive reform, marked by implementation failures and unintended consequences from a classical-liberal viewpoint emphasizing market realities over rigid mandates. Enrollment rose significantly, especially in underserved areas, yet ASER reports reveal persistently low literacy and numeracy levels, as the Act prioritized inputs like infrastructure and teacher qualifications over learning outcomes. Strict norms led to enforcement harassment, corruption, and closures of rural government schools, while enrollment shifted to private options. The 25% reservation for disadvantaged children in private schools increased access but sparked discrimination claims, circumvention, and reimbursement delays, without altering private education's affluent focus. Teacher quality stagnated amid absenteeism and weak accountability. Politically motivated, the Act exposed systemic flaws in top-down governance. The conclusion urges shifting to sustained investment, robust accountability, and outcome-focused reforms to fulfill equity and quality, recognizing laws alone cannot drive educational transformation.

**Key points:**

- RTE Act boosted school enrollment but failed to improve learning outcomes, with ASER data showing low basic literacy and numeracy.
- Strict infrastructure and teacher norms caused harassment, corruption, and closures of many government schools, especially rural ones.
- 25% quota in private schools faced circumvention, bureaucratic delays in reimbursements, and social tensions without broadly changing access dynamics.
- Focus on inputs like infrastructure neglected teacher accountability and actual student well-being.
- Policymakers should prioritize teaching quality, accountability, and flexible implementation over symbolic laws.

**By Amit Chandra**

* * *

**Note:** *This article is generated with the assistance of artificial intelligence and is intended as an analytical interpretation of the [referenced dialogue](https://www.youtube.com/watch?v=6FqklqyscFY&list=PLnOdBH8DZ6ngCrcHJt4q7ilggtsXwPQQk&index=2). It reflects the author’s understanding of the discussion and does not claim to be a verbatim transcript or an official statement by the speakers*. *Views expressed are personal.*

As the consultation exercise has begun for the upcoming general budget, it is a good time to take stock of the outcomes and capture the learning from the experience captured in the last 15 years  of the implementation of the Right to Education Act. It becomes further more critical as the National Education Policy is being implemented. The Right to Education Act (RTE) of 2009 was introduced with the lofty promise of transforming India’s education system by making elementary education a fundamental right for every child between the ages of 6 and 14. Over a decade later, the Act’s legacy is not one of unmitigated progress, but rather a story of symbolism, implementation gaps, and unintended consequences. While the law was hailed as a milestone, a critical review reveals that it has fallen short of its core objectives and, in many ways, has exposed the systemic flaws in India’s approach to education reform. 

## **Gesture Over Substantive Change**

The RTE Act was not merely a policy decision. It was as much about electoral capital as about social transformation. The Act’s provisions, such as the 25% reservation for disadvantaged children in private schools and the strict norms for school infrastructure, were ambitious but often disconnected from the realities of India’s diverse educational landscape. Many schools, especially in rural and under-resourced areas, found it impossible to comply with these norms, leading to enforcement harassment and corruption rather than genuine improvement. The law became a tool for political posturing, with little focus on the practical challenges of implementation.

## **Enrollment Versus Learning: A False Promise**

One of the most celebrated achievements of the RTE Act is the increase in school enrollment rates. Data shows a significant rise in the number of children attending school, particularly in previously underserved regions. However, this rise in enrollment has not translated into better learning outcomes. National assessments like ASER have consistently shown low learning in basic literacy and numeracy levels among students. The Act’s focus on inputs, such as infrastructure and teacher numbers, has often come at the expense of actual learning, leaving students with certificates but little real knowledge.

## **The Paradox of Government Schools**

Government schools, which were expected to be the main beneficiaries of the RTE Act, have faced a paradoxical decline. Many schools have seen reduced enrollment as students migrate to private institutions, while others have closed due to an inability to meet the Act’s norms. The Act’s emphasis on infrastructure and teacher qualifications has often favored larger, better-resourced schools, further marginalizing those most in need. 

## **Private Schools and the 25% Quota**

The requirement for private schools to reserve 25% of seats for disadvantaged children has been both praised and criticized. While it has increased access for underprivileged children, it has also led to accusations of discrimination and social segregation within schools. Many private schools have found ways to circumvent the law, and the reimbursement process has been fraught with delays and bureaucratic hurdles. The Act has not fundamentally changed the dynamics of private education, which continues to cater largely to the affluent.

## **Teacher Quality and Accountability**

The RTE Act set new standards for teacher qualifications, but the impact on teacher quality has been limited. Many newly recruited teachers lack adequate training, and the Act’s provisions have not been enforced consistently. Teacher absenteeism, lack of accountability, and corruption remain persistent problems in both government schools. The Act’s focus on inputs, such as infrastructure and teacher numbers, has often come at the expense of outcomes, such as learning achievement and student well-being.

## **The Way Forward**

The RTE Act’s journey over the past decade reveals a fundamental truth: laws alone cannot transform education. Real change requires sustained investment, robust governance, and a commitment to equity and quality. The Act has succeeded in increasing access, but it has failed to ensure that every child receives a meaningful education. Moving forward, policymakers must focus on improving the quality of teaching, strengthening accountability mechanisms, and ensuring that the Act’s provisions are implemented in ways that truly benefit the most vulnerable children.

## **Conclusion**

The RTE Act remains a landmark in India’s educational history, but its legacy is one of unfulfilled potential. While it has brought millions of children into the classroom, it has yet to deliver on the promise of quality education for all. The challenge now is not just to amend the law, but to create a system that values learning, equity, and inclusion above all else. The RTE Act was a step in the right direction, but much more needs to be done to ensure that every child in India receives the education they deserve.

* * *

**About Amit Chandra**

## The Paradox of Progress and Stagnation: Case of Street Vending in India

Original: https://www.spontaneousorder.in/p/the-paradox-of-progress-and-stagnation-case-of-street-vending-in-india

Author: Spontaneous Order

Published: 2025-12-15T10:22:39.000Z

Topics: street-vending, spatial-security, political-capture, urban-governance

> The Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014 promised the street vendors of India legal recognition, designated vending zones, and participatory governance through Town Vending Committees. Certificates of Vend..

**Summary:**

The 2014 Street Vendors Act promised legal recognition, designated vending zones, certificates of vending, and participatory Town Vending Committees, yet a decade later, vendors in Delhi and Jaipur endure precarious uncertainty with arbitrary evictions, unnotified zones, and political capture despite formal mechanisms. In Delhi's Yashwant Place, vendors proudly display certificates but report being removed like those without, excluded from surveys, and sidelined in committees. In Jaipur, where the Centre for Civil Society launched the Jeevika App in 2024, leader Banwari Ji of Heritage City Thadi Thela Union describes municipal identity cards without vending certificates, frequent officer transfers, and politically connected groups occupying prime spaces for illegal rentals, bypassing the Act's democratic governance. This paradox highlights 'spatial security'—enforceable urban space claims under Article 19(1)(g)—existing only on paper amid patronage over legal entitlement. From a classical-liberal perspective, the Act marked progress by legitimizing vending livelihoods, but rights without enforcement, independent institutions, and rejection of hierarchies render them symbolic. Vendors need notified zones, empowered committees, and real protection to bridge regulatory intent and lived security.

**Key points:**

- The 2014 Street Vendors Act's certificates and committees fail to prevent arbitrary evictions in Delhi's Yashwant Place and unnotified zones in Jaipur.
- Political capture enables informal rentals of prime vending spaces by connected groups, undermining legal entitlements.
- Spatial security requires enforceable spatial claims and independent institutions beyond paper recognition.
- Vendors need notified zones, authoritative Town Vending Committees, and enforcement to achieve genuine livelihood protection.

**By Chaitanya Kapoor**

* * *

The Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014 promised the street vendors of India legal recognition, designated vending zones, and participatory governance through Town Vending Committees. Certificates of Vending have been issued. Committees have been formed. Rules have been framed. Yet a decade later, vendors across Indian cities continue to operate in a state of precarious uncertainty, where legal documents offer little protection against arbitrary removal, political capture, and systemic exclusion. The law exists. The space, in practice, does not. This is not simply a failure of implementation, but a deeper disconnect between what is written and what is lived, between recognition on paper and security on the street. 

**The Certificate That Protects Nothing**

At Yashwant Place market in Delhi, vendors – who wish to remain anonymous – showed their certificates of vending with a mixture of pride and resignation. *‘Iska kya fayeda sir…Certificate waalo ko bhi waese hata te hai jaese bina certificate waale…*’(There is no benefit to this sir… They evict us as if we don’t have the certificates…). These were official documents, stamped and signed, theoretically guaranteeing their right to occupy designated spaces. Yet these same vendors described being arbitrarily removed from their spots, excluded from renewal surveys meant to update their records, and sidelined from decision-making processes despite some even serving as members of the Town Vending Committee. Here was the paradox at its clearest: legal recognition without the realisation of recognised rights, *spatial security* and participation without power, rights without enforcement. 

*Spatial security* extends beyond the mere allocation of physical space and encompasses the conditions under which marginalised populations can claim and secure their right to place within the city in lieu of Article 19(1)(g). In the context of street vending, it addresses the fundamental question of, ‘what does it mean for the state to recognise a vendor’s right to practise their profession if that recognition cannot be translated into actual, secure occupancy of urban space?’ The Street Vendors Act, 2014 attempted to answer this by establishing a framework for spatial allocation through certificates of vending, town vending committees and designated vending among others. 

Yet *spatial security* requires more than legal designation. It demands that the right to place be enforceable, that once designated, a vendor’s spatial claim cannot be undermined by administrative whim or political convenience. It requires that the institutions meant to protect spatial claims remain independent from those who might violate them. When these conditions are absent, as the evidence from Delhi suggests, *spatial security* becomes a concept that exists only on paper. The vendor possesses a Certificate but not security. They have a designated location but no guarantee of access to it. They occupy a legal category but cannot inhabit the space that category supposedly protects. 

The certificate is supposed to be proof of legitimacy. But legitimacy, it turns out, depends less on what the law says and more on who controls the space where vendors operate.

**Jaipur: Between Court Orders and Political Capture**

The Centre for Civil Society has worked with street vendors in Jaipur since 2011, and launched the Jeevika App in the city in 2024 to provide legal awareness and free legal aid to vendors navigating an increasingly complex regulatory environment. What we collectively realised was a system caught between *formal progress and practical stagnation*.

Banwari Ji, a dosa and pav bhaji vendor near Collector Circle, serving as the leader of *Heritage City Thadi Thela Union, Jaipur* has emerged  as a a leader in Jaipur’s vending community. Over tea at his stall, he walked us through the systemic failures that define vendor life in the city. Major vending areas remain without officially notified zones, more than a decade after the national law mandated their designation. Vendors hold identity cards issued by the Jaipur Nagar Nigam, but not the certificates of vending that would give them legal standing. Survey timings remain unfixed. Officers transfer frequently, disrupting any continuity in implementation.

But the deeper problem Banwari Ji described goes beyond bureaucratic inertia. Certain groups, he explained, leverage political connections and relationships with municipal officers to forcibly occupy prime vending spaces. They then rent these spaces out to vendors, creating an informal rental market that operates entirely outside the law and undermines the Town Vending Committee’s authority. The 2014 Act envisioned democratic governance and *spatial justice*. What has emerged instead is a system where access to urban space depends not on legal entitlement but on patronage, payments, and proximity to power. Even after the countless legal redressals undertaken by Banwari ji, his notable wins remain partial. The broader implementation remains hollow, the rules on paper disconnected from the reality vendors navigate every day.

**The Politics of Space**

What these experiences reveal is a fundamental tension in how we approach urban governance. Street vending regulation is often framed as a technical problem requiring better policies, clearer procedures, more efficient administration. But at its core, it is a question of power. Who controls urban space? Whose claims to the city are recognized as legitimate? When vendors are removed despite holding valid certificates, when zones remain unnotified despite legal mandates, when political actors capture spaces meant for collective use, the issue is not implementation failure. It is the reassertion of older hierarchies that never accepted vendors as rightful claimants to public space.

The 2014 Act represented genuine progress. It acknowledged street vending as a *legitimate livelihood*, not a nuisance to be eliminated. It created mechanisms for vendor participation and spatial justice. These were  significant changes. Yet the persistence of arbitrary evictions, survey exclusions, and rent-seeking arrangements suggests that formal legal change is only one dimension of a much larger struggle.

Rights without enforcement become symbolic gestures. Participation without decision-making power becomes performative inclusion. Certificates without *spatial security* are reduced to mere pieces of paper. 

**What Changes, What Remains**

As we reflect on conversations with Banwari Ji, the vendors at Yashwant Place, and others across these cities, what strikes me is the gap between regulatory intent and lived experience where the fundamental insecurity persists. Vendors still wake up uncertain whether their spot will be available tomorrow. They still navigate informal power structures to secure space. They still face removal without due process, despite the protections the law supposedly guarantees.

The vendors we met do not need better policies. They need the ones that already exist to actually work. They need vending zones to be notified, not promised. They need Town Vending Committees with real authority, not advisory bodies easily bypassed. They need certificates that protect them from arbitrary eviction, not documents that sit in their pockets while political actors decide who can sell where.

Perhaps the real lesson is that changing regulations is necessary but never sufficient. Without genuine enforcement, meaningful participation, and a political commitment to recognizing vendors as legitimate urban actors entitled to space and dignity, laws remain aspirational documents rather than tools for transformation. 

* * *

**About Chaitanya Kapoor**

Chaitanya Kapoor, a lawyer by training and public policy researcher by profession, is dedicated to dismantling implementation barriers in pursuit of social justice. His work emphasizes ecocentrism, constitutionalism, human rights, and equitable societal frameworks, aiming to foster a more just and sustainable world. He is presently a Legal Associate at the Centre for Civil Society.

## The Tyranny of a Single Clock – A Case For Dual Time Zones in India

Original: https://www.spontaneousorder.in/p/the-tyranny-of-a-single-clock-a-case-for-dual-time-zones-in-india

Author: Spontaneous Order

Published: 2025-12-05T14:18:04.000Z

Topics: time-zones, energy-efficiency, bureaucratic-reform, northeast-india

> The territory of mainland India spans a longitude of approximately 30 degrees and covers an area of approximately 3.28 million square kilometres. Whereas, Tennessee, which is merely the 36th-largest state in the United States by area has a longitudinal ..

**Summary:**

India's 30-degree longitudinal span creates a natural two-hour solar time difference between its easternmost and westernmost regions, yet the country operates under a single time zone (UTC+5:30), leading to inefficiencies like lost morning daylight in the Northeast (sunrise as early as 4:30 AM), higher electricity consumption, stress, and safety issues. This contrasts with Tennessee, a much smaller area (110,000 sq km vs. India's 3.28 million), which uses two time zones despite only a 36-minute natural difference. Government objections—railway confusion, 'one nation, one time zone' uniformity, and administrative rigidity—are dismissed as bureaucratic myths, given successful multi-time-zone operations in larger countries like the US, Canada, Russia, and Australia, and the high cost of uniformity to productivity and energy use. Dual time zones (IST-I UTC+5:30 for most, IST-II UTC+6:30 for Northeast/east) would align clocks with natural daylight, boosting productivity and health. Studies cite annual human-capital losses of USD 4.1 billion (₹29,000 crore, 0.2% GDP) from the single zone; a 2018 paper and 1994 TERI report predict productivity gains, 5.7% energy reduction (saving 400 crores INR annually), and staggered demand. From a classical-liberal view, these gains far outweigh adjustment costs, critiquing rigid statism over practical efficiency.

**Key points:**

- India's single time zone imposes a ₹29,000 crore annual human-capital cost (0.2% GDP) due to daylight mismatches, per economist Maulik Jagnani.
- Dual time zones (UTC+5:30 and UTC+6:30) would sync work/school hours with sunrise/sunset, reducing electricity use by 5.7% and saving 400 crores INR yearly, as per TERI 1994.
- Government fears of railway accidents and uniformity needs are overstated, as larger nations like the US manage multiple zones effectively.
- Northeast states lose 4-5 hours of usable daylight, increasing stress and safety risks under the current system.

**By Chetna Sabarigreesan**

* * *

The territory of mainland India spans a [longitude](https://www.britannica.com/science/Indian-time-zone) of approximately 30 degrees and covers an area of approximately 3.28 million square kilometres. Whereas, [Tennessee](https://en.wikipedia.org/wiki/Module:Location_map/data/USA_Tennessee), which is merely the 36th-largest state in the United States by area has a longitudinal spread of approximately 9 degrees and covers about 110,000 square kilometres. These facts when presented in isolation do not denote anything extraordinary, but their significance will become apparent once one understands what longitudes represent. 

Longitude measures how far a place is east or west on the Earth. Because the Earth rotates 360 degrees in 24 hours, every 15 degrees of longitude corresponds to one hour of time difference. In other words, a shift of 1 degree in longitude equals roughly 4 minutes of solar time.

India’s 30-degree spread thus translates to a [natural 2-hour difference](https://www.bbc.com/news/world-asia-india-47168359) in solar time between its easternmost and westernmost regions, and Tennessee’s 9-degree spread amounts to about 36 minutes of natural time difference across the state. This means that even though India functions under a single official time zone, different parts of the country experience sunrise, sunset and daylight patterns that can be up to two hours apart.

Herein lies the irony:

Tennessee, a region with only one-third of the landmass of India, [operates with 2 time zones](https://www.yahoo.com/news/why-tennessee-two-different-time-090139719.html?guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAALnalgnrwcxbP95J0xdyHbG7nEKJr3Sf3RhNRrO7I_rSf-2jClUbo3lkbi2J-ncjLtJ3eSajDKw6Zn76oS8B_RQq5mIiLXOb1q0052q-7ZshuZGO_DTDkWDWcFSHl9hN7SSWQ_jcDYiVGeAc4ppbRlyBEGX3aZASNIsxm5wT8ZB3) “(UTC -5/-4)” and “(UTC-6/-5)”. Whereas, India operates under a [single time zone](https://en.wikipedia.org/wiki/Indian_Standard_Time#:~:text=Indian%20Standard%20Time%20\(IST\)%2C,%22Echo%2DStar%22\).) “UTC+05:30“. In the northeastern states, such as Assam, the sun rises as early as 4:30 AM during summer, yet typical office hours begin only at 9 or 10 AM. As a result, these regions lose four to five hours of usable daylight. This mismatch creates a myriad of new problems including increased electricity consumption, higher stress levels because humans are naturally inclined to work during daylight and rest after sunset, and additional safety concerns for individuals commuting alone in the dark.

The reasons cited by the Indian government for the continuation of this inefficient singular time zone use are as follows:

1.  Multiple time zones may lead to logistical confusion and accidents in [railways](https://www.thehindubusinessline.com/news/science/strategic-reasons-do-not-allow-dual-time-zones-in-india/article30452186.ece) – A weak argument considering the fact that larger countries such as Australia, Canada, Russia, United States of America, operating multiple time zones run perfectly functional complex train networks. The fear that “railways will break” is pure bureaucratic myth
    
2.  Political desire of uniformity, i.e, “One nation, one time zone” – When a [reason](https://www.hindustantimes.com/opinion/the-case-for-two-time-zones-for-india-101751352444152.html) such as this is presented, one must pause to ask the following questions:
    

1.  At what cost must such uniformity be achieved? Productivity and well-being of people across the country, increasing electricity and energy consumption?
    
2.  To what end is uniformity necessary?
    
3.  [Administrative rigidity](https://www.mapsofindia.com/my-india/india/does-india-need-two-or-more-time-zones) in adopting new systems – This is the closest to a legitimate reason, but a weak reason nonetheless. It points to deeper, systemic issues in how the government operates and its persistent inability to keep pace with change.
    

Whereas, here is the rationale for why dual time zones would be advantageous for   India:

1.  Better alignment with natural daylight – A second time zone allows people to wake, work, and sleep in [sync with the sun](https://www.bbc.com/news/world-asia-india-47168359). This, in turn, has the potential to increase productivity, better health, among a few biological benefits.
    
2.  Drastic reduction of electricity consumption – Regions far to the east, to keep up with a single time zone, are forced to waste morning daylight and overuse luminous electricity consuming devices after sunset.  According to economist [Maulik Jagnani](https://www.indiaspend.com/single-time-zone-costs-india-rs-29000-crore-impairs-education-wages-new-study), India may be incurring annual human-capital costs of approximately USD 4.1 billion (around ₹29,000 crore), or about 0.2% of nominal GDP, simply due to the way time-zone boundaries are currently regulated. A 2018 paper titled *“Necessity of two time zones: IST-I (UTC +5:30 h) and IST-II (UTC +6: 30 h) in India and its implementation”* presents an argument that a separate time zone for the Northeast (and some eastern/Andaman regions) has the potential to [improve productivity](https://www.newindianexpress.com/lifestyle/tech/2018/Oct/17/new-study-says-creating-two-time-zones-will-make-northeast-more-productive-1886661.html) and reduce power consumption. The same study suggests that aligning clock-time with local sunrise and sunset will synchronise daily school/work hours with the presence of daylight, better matching people’s biological clocks and improving “[efficiency of populace](https://indiansciencejournal.in/2018/10/11/study-says-two-time-zones-for-india-practical-and-implementabl)”.
    
3.  Historically, organisations such as Tata Energy Research Institute (TERI) in [1994](https://www.downtoearth.org.in/environment/double-timing-32780), argued that multiple time zones in India would help stagger national energy demand and reduce peak pressures by spreading the load of the energy consumed. This practice, according to the study, would lead to a drop in energy consumption by 5.7 percent, resulting in an annual saving of 400 crores (INR).
    

In conclusion, the potential gains such as higher productivity, reduced power consumption, and overall improvement of national health far outweigh the modest adjustment required for adopting two time zones. With successful models abroad and credible support from Indian scientific bodies, it is reasonable to remain optimistic about achieving the anticipated benefits of implementing a dual time zone system in India.

* * *

**About Chetna Sabarigreesan**

Chetna Sabarigreesan is a law graduate deeply influenced by the principles of free markets and classical liberalism. She draws inspiration from Nobel laureate Milton Friedman. In her downtime, she enjoys rock climbing and reading. Chetna is a Next-Gen Fellow with CCS Academy.

## No Country for Clean air

Original: https://www.spontaneousorder.in/p/no-country-for-clean-air

Author: Spontaneous Order

Published: 2025-11-28T15:26:08.000Z

Topics: air-pollution, negative-externalities, market-solutions, stubble-burning

> The morning air in Delhi feels dense this season. An acrid smell lingers long after Diwali night fireworks fade. With the recent lifting of the ban on firecrackers, the city once again woke up to a wall of smog. Schools delayed classes, and flights were..

**Summary:**

India's air pollution crisis, exemplified by Delhi's January 2025 PM2.5 average of 165 micrograms per cubic meter—over 30 times the WHO limit—imposes massive costs, equivalent to 1.3% of GDP (Rs. 4.5 lakh crore annually), with nearly 2 million premature deaths yearly. This man-made problem stems from negative externalities, where industries like steel, cement, and power externalize pollution costs onto the public, degrading the public good of clean air in a classic market failure. Unequal impacts hit informal workers hardest, with respiratory illnesses twice as high as among office workers. Government responses—cloud-seeding, odd-even schemes, subsidized anti-stubble measures—prove temporary and perverse, failing to enforce emission caps or liability via tort law. From a classical-liberal view, solutions lie in internalizing costs through market-based disincentives, robust prosecution of polluters, and commodifying stubble for private markets in biomass or packaging to spur agritech innovation. Protests highlight pollution as a public health emergency stratified by class. Clean air is foundational to human capital and ease of living; treating it as episodic ignores systemic governance failures in prioritizing private profits over societal breathability.

**Key points:**

- Air pollution externalizes costs from industries, causing market failure in the public good of clean air.
- Government subsidies for stubble non-burning create perverse incentives; instead, enable private markets for stubble in biomass and packaging.
- Enforce tort law and emission caps to make polluters internalize environmental costs.
- Delhi's poor bear disproportionate health burdens, with respiratory illnesses twice as high among informal workers.

**By Lavanya Mitra**

* * *

The morning air in Delhi feels dense this season. An acrid smell lingers long after Diwali night fireworks fade. With the recent lifting of the ban on firecrackers, the city once again woke up to a wall of smog. Schools delayed classes, and flights were diverted as the air quality index crossed 450 in parts of the NCR in late October this year. Inside homes and offices, air purifiers continue to hum through the day. 

The haze is no longer a seasonal surprise, but a continuous feature of urban life in India. Delhi’s monthly average PM2.5 (particulate matter below 2.5 microns in diameter; used to monitor pollution levels worldwide) level in January 2025 stood at 165 micrograms per cubic meter, according to the Centre for Research on Energy and Clean Air (CREA). That is over 30 times the WHO’s recommended limit. CREA estimated that health and productivity losses due to air pollution now costs the Indian economy nearly 1.3 percent of its GDP annually (roughly Rs. 4.5 lakh crore). To put that into perspective, this amount could fund the entire rural employment guarantee programme for three years or lift approximately 40 million Indians above the poverty line.

Naturally, the brunt of this crisis is not evenly shared. For Delhi’s middle class, protection is a product, bought through sealed windows, N95 masks, and high-end air filters. For the city’s informal workers, protection is out of reach. Studies by the Indian Institute of Public Health show that street vendors, daily wage labourers, and traffic police register respiratory illness rates almost twice as high as office workers in the same neighbourhoods. Many live near industrial clusters or highways, where particulate matter levels can be 40 percent higher than city averages. The right to clean air, in practice, is stratified by income.

The pattern now extends itself across the subcontinent. Of the world’s 20 most polluted cities, 13 lie in South Asia, spanning India, Pakistan, and Bangladesh. Climate and geography make this subcontinent prone to stagnant air and temperature inversions (any civil service aspirant slogging away in Delhi can spell this out for you), but the crisis is largely man-made and industries remain at the heart of it. They individualise profits and socialise costs. Steel, cement, power, and chemical manufacturing continue to externalise their pollution onto the public, which is an outcome that microeconomics has long recognised as a *negative externality*. When firms do not bear the full cost of production, society does. The result is a classic case of market failure, where public goods such as clean air are degraded because their value cannot be priced in private transactions.

India’s legal framework offers limited recourse. In theory, tort law, which allows citizens to seek compensation for harm caused by another’s actions, should apply to industries that damage public health through emissions. But air pollution diffuses responsibility as no single polluter can be easily identified or prosecuted. And without a robust liability mechanism, industries have little incentive to internalise environmental costs. Public goods, like breathable air, remain unguarded. Private goods, like air purifiers, flourish.

Governments have responded, but often in ways that look and feel temporary. Cloud-seeding experiments, “green” crackers, and odd-even traffic schemes dominate the headlines each winter. Yet long-term measures such as enforcing emission caps on thermal plants, market-based disincentives for polluters, or providing farmers alternatives to stubble burning progress slowly, if at all. These gestures are the equivalent of purifiers on a national scale: cosmetic and evasive. A recent review in *The Lancet Planetary Health* found that while India’s air-quality monitoring network has expanded, regulatory enforcement and public health preparedness remain weak. The country now records the world’s highest number of premature deaths linked to particulate pollution at nearly 2 million a year. So much for our demographic dividend!

Our countryside mirrors the same story. Each winter, stubble burning in Punjab, Haryana, and Uttar Pradesh adds a thick layer of smoke to the northern plains. The government’s attempt to subsidise machinery and pay farmers not to burn fields created a perverse incentive where farmers waited for compensation (often burning stubble so as to avail subsidies for stopping) rather than investing in residue management. Perhaps a shift in our perspective, allowing private buyers to purchase paddy stubble for use in biomass energy, packaging, or paper production, could turn stubble into a tradable good, and give rise to a sustainable agritech industry developing alongside.

Recent protests in Delhi have captured this frustration. Earlier this month, citizens gathered at India Gate demanding immediate action and calling air pollution a “public health emergency, not a weather event.” Their message was straightforward: the burden of inaction falls hardest on those who cannot shield themselves. As a paper in *Environmental Research Letters* (2024) warned, prolonged exposure to PM2.5 can reduce cognitive function and labour productivity, eroding the very economic advantage that a youthful population is supposed to deliver.

We have reached a stage where the air crisis has evolved beyond only an environmental or health issue. It is a question of how we define progress. If ease of living is meant to capture the quality of urban life, then breathable air should be its most basic indicator. The 2022 Ease of Living Index included environmental quality as a parameter, yet most large Indian cities had a poor score, suggesting that the country’s rapid urban expansion is outpacing its capacity to provide safe living conditions. Clean air, like clean water or electricity, is a foundational service. It underpins human capital, public trust, and social cohesion.

The haze that hangs over Delhi each winter remains a symptom of governance that treats pollution as episodic rather than systemic. The question is simple: how long can a nation chase prosperity while its citizens struggle for breath?

* * *

**About Lavanya Mitra**

Lavanya Mitra works with the Centre for Civil Society in strategy and governance. She holds a postgraduate in Politics and International Studies from Jawaharlal Nehru University and has previously worked in disability advocacy and legislative research. Her interests span climate change, gender, inclusion and governance, with a focus on building accessible and equitable policy frameworks.

## Machado’s Nobel: A Win for Human Rights and Dignity

Original: https://www.spontaneousorder.in/p/machados-nobel-a-win-for-human-rights-and-dignity

Author: Spontaneous Order

Published: 2025-11-14T17:08:18.000Z

Topics: human-rights, democracy, authoritarianism, rule-of-law

> “To deny people their human rights is to challenge their very humanity.” – Nelson Mandela What if you had no say in who governs your country? What if speaking your mind meant risking punishment? Imagine living in a place where peaceful protests lead

**Summary:**

María Corina Machado's 2025 Nobel Peace Prize is portrayed as a triumph for human rights and dignity in the face of Venezuela's authoritarian crisis, where democracy's erosion has denied citizens individual freedoms. Human rights are framed as the bedrock of personal liberty, dignity, choice, and equality, safeguarded by democratic institutions that enable free leader selection and accountability. Venezuela, resource-rich yet plagued by manipulated elections, silenced opposition, censorship, and imprisonment, exemplifies this failure: post-July 2024 disputed presidential election protests saw over 2,400 arrests and at least 22 deaths, triggering economic collapse, scarcity, and millions fleeing. Machado's unwavering advocacy for transparent governance, rule of law, and democratic restoration embodies Venezuelans' resilience. The award signals that sovereignty alone cannot secure rights; vigilant citizen defense against authoritarianism is essential. From a classical-liberal lens, societies upholding individual rights foster cooperation, innovation, and prosperity, while authoritarianism breeds stagnation and decline. The prize issues a global imperative to back democracy defenders, preserving freedom for justice and peace.

**Key points:**

- Venezuela's authoritarian shift has manipulated elections, censored opposition, and brutally repressed July 2024 protests with over 2,400 arrests and 22 deaths.
- Human rights and democracy are essential for individual freedom, dignity, choice, and accountability, without which oppression prevails.
- María Corina Machado's 2025 Nobel recognizes her leadership in advocating rule of law and democratic restoration amid repression.
- Classical-liberal governance protects rights to enable prosperity; authoritarianism causes economic and social decline.
- The award urges global support for human rights defenders to safeguard democracy worldwide.

**By Jini Susan Thomas**

* * *

“To deny people their human rights is to challenge their very humanity.” – Nelson Mandela

What if you had no say in who governs your country? What if speaking your mind meant risking punishment? Imagine living in a place where peaceful protests lead to arrests or violence, where your vote doesn’t count, and leaders act without any responsibility. 

These are freedoms many people take for granted every day, freedoms rooted in human rights and democracy. They allow us to live with dignity, make decisions about our lives, and expect equal treatment. Without these rights, life becomes uncertain, unfair, and unsafe.

Human rights are the foundation of individual freedom, the freedom to live with dignity, exercise choice, and shape one’s own life. These rights protect every person’s equality and ensure no one is subjected to oppression or injustice. Democracy is the system that empowers individuals to choose their leaders freely and hold them accountable, making it essential for preserving human rights. When democratic institutions crumble, the inherent freedoms they protect often vanish, replaced by authoritarianism and repression.

Venezuela, a sovereign nation rich in natural resources and cultural heritage, is currently facing a severe crisis that strikes at the core of individual liberty. The country has shifted toward authoritarianism, with political freedoms severely restricted, electoral processes manipulated, and opposition voices silenced through intimidation, censorship, and imprisonment. This repression denies Venezuelans not only political choice but also their fundamental human rights, including freedom of expression and peaceful assembly.

In July 2024, following a disputed presidential election, thousands of Venezuelans peacefully protested to demand transparency and fairness. The government’s harsh response included arresting over 2,400 people and killing at least 22 protesters. This brutal crackdown highlights the grave challenges to democracy and human rights in Venezuela today.

The consequences for ordinary citizens have been devastating. Economic collapse, scarcity of essential goods, and a humanitarian emergency have forced millions to flee their homeland in search of livelihood and safety. Despite its sovereignty, Venezuela’s democratic institutions, the very structures designed to protect rights and freedoms have been hollowed out, undermining the essence of individual choice and freedom.

In this challenging landscape, the 2025 Nobel Peace Prize awarded to María Corina Machado is a powerful beacon of hope and resilience. Machado, a courageous leader within Venezuela’s pro-democracy movement, has stood unwavering against repression. Her tireless advocacy for transparent governance, rule of law, and democratic restoration embodies the ongoing fight of Venezuelans striving to reclaim their rights and rebuild a society rooted in justice and freedom.

This Nobel recognition sends a clear message: sovereignty alone does not ensure democracy or human rights. Genuine democratic governance demands vigilant defense by citizens and leaders who value liberty, especially when authoritarianism seeks to silence the people’s voice and erode their dignity. Machado’s prize serves as an inspiration for all who defend freedom, demonstrating that the spirit of democracy endures even under the harshest repression.

For advocates of democratic liberal governance, Venezuela stands as a cautionary example of the harms that arise when democratic institutions weaken and the rule of law is dismantled. Societies that uphold individual rights and freedoms create fertile ground for cooperation, innovation, and prosperity. On the contrary, authoritarianism stifles these possibilities, leading to social stagnation and decline.

María Corina Machado’s Nobel Peace Prize transcends personal honor. It is a global call to support democracy and human rights defenders everywhere. Venezuela’s story is a reminder that democracy, centered on individual freedom and choice, is precious and must be actively preserved to achieve lasting peace, justice, and human dignity for all.

* * *

**About Jini Susan Thomas**

Jini Susan holds a Master’s in Public Policy and works as a Program Associate at the Centre for Civil Society. She is passionate about gender policy issues, and enjoys exploring new ideas that connect society and governance.

## Diffusion of Responsibility: Why No One Takes Initiative

Original: https://www.spontaneousorder.in/p/diffusion-of-responsibility-why-no-one-takes-initiative

Author: Spontaneous Order

Published: 2025-10-17T15:03:31.000Z

Topics: diffusion-of-responsibility, civic-engagement, governance-accountability, bystander-effect

> Why do many community problems persist despite widespread awareness? This question touches on a core issue in governance and civic engagement: why, even when people know about problems, they don’t take initiative and often wait for others to act. Throug

**Summary:**

Diffusion of responsibility explains why community problems persist despite widespread awareness: individuals feel less personal duty to act in groups, assuming others will intervene. Psychologists Bibb Latané and John Darley's smoke experiment demonstrated this—solo participants quickly reported smoke, but in groups, most ignored it amid social conformity. The author recounts a Delhi Metro incident where passengers endured broken AC until one pressed the emergency button. This phenomenon extends to governance, where diffused accountability among agencies like Jal Board and municipal authorities delays fixes for issues such as irregular water supply, potholes, and waste collection. Citizens' hesitation weakens accountability, fostering policy inertia. Historical cases like the 1964 Kitty Genovese murder in New York, which spurred the 911 system, and the recent suicide of Haryana IPS officer Y Puran Kumar amid unaddressed harassment by seniors, illustrate tragic outcomes. From a classical-liberal viewpoint, passive reliance on government fails; an engaged citizenry must demand answers and action. Only individuals consistently stepping forward will foster responsive governance, healthier communities, and prosperity.

**Key points:**

- Diffusion of responsibility, as shown in Latané and Darley's smoke experiment, leads to inaction in groups due to social conformity.
- In governance, diffused accountability among multiple agencies causes delays in urban services like water supply.
- Citizens must actively demand accountability from officials rather than waiting for others to act.
- Tragic cases like Kitty Genovese's murder and Y Puran Kumar's suicide highlight consequences of bystander indifference in systems.
- Individual initiative is essential for stronger communities and effective governance.

**By Jini Susan Thomas**

* * *

Why do many community problems persist despite widespread awareness?

This question touches on a core issue in governance and civic engagement: why, even when people know about problems, they don’t take initiative and often wait for others to act.

Through a famous experiment, psychologists Bibb Latané and John Darley explored how people respond in situations requiring action. As part of the experiment, participants were placed in a room to fill out a survey. While they were doing this, harmless smoke started to fill the room. When people were alone, almost everyone noticed the smoke quickly and reported it. However, when the number of people in the room increased and others acted like everything was fine, most participants ignored the smoke, even as it grew thicker. This showed a common effect called **diffusion of responsibility**, where people feel less personal duty to act when others are present.

I recently experienced this on the Delhi Metro on a hot summer evening. The air conditioning in a crowded coach was barely working, making the air uncomfortable. Passengers whispered quietly but no one took action. Maybe they assumed the driver already knew or thought others would speak up. Finally, one passenger pressed the emergency button and the air cooled. This shows how, in groups, people often wait for someone else to lead, even when action is clearly needed.

Diffusion of responsibility affects more than just emergencies. It shapes how citizens respond to government policies or community problems. Many public infrastructure issues, like broken streetlights, potholes, or waste collection, persist precisely because individuals assume that others – neighbors, civil society groups, or local officials will respond. This assumption results in everyone waiting for someone else to take responsibility. As a result, fewer citizens engage directly, which weakens accountability and slows change. 

One cause of this is social conformity. People naturally look to others for cues on how to behave. If no one else seems concerned, we hesitate to speak up. While social conformity usually helps maintain harmony and order, it can become paralyzing when action is needed. This hesitation leads to many community problems being ignored or left unresolved.

One of the examples is the delivery of basic urban amenities like water supply. In many cities, problems such as irregular water distribution persist because responsibility is diffused among multiple agencies such as the Jal Board, municipal authorities, and the Ministry of Water, and often there is no clear responsibility or accountability assigned within any single agency. Each assumes that others will address the issue or that it falls under another department’s jurisdiction. As a result, no single entity feels fully accountable, and citizens, aware of the problem, wait for someone else to intervene. The underlying problem is that everyone’s responsibility becomes no one’s responsibility, which prevents timely action and effective resolution. This diffusion of responsibility causes delays in service delivery, frustrating residents and worsening public trust in governance.

This also leads us to a critical point about accountability. It is not sufficient to passively hope that those in power will fix problems. Citizens must actively demand answers and action, rather than waiting. Governments and officials sometimes delay or neglect responsibilities, expecting citizens not to question them. This unequal distribution of responsibility can be challenged only by an engaged citizenry willing to speak up. Silence or apathy contributes to policy inertia and poor governance.

In New York City in 1964, perhaps the most famous case of social apathy was the murder of Kitty Genovese, who was fatally stabbed while numerous neighbors reportedly heard or witnessed parts of the attack but did not intervene or call for help immediately. This tragic death exposed the problem of bystander indifference, eventually leading to the creation of the 911 emergency system in the United States. 

The recent [suicide](https://www.ndtv.com/india-news/y-puran-kumar-haryana-ig-suicide-top-cops-final-decision-suicide-note-ias-wife-says-broken-spirit-9423002) of Haryana IPS officer Y Puran Kumar exposes how diffusion of responsibility quietly seeps into governance. Despite enduring prolonged mental harassment and caste-based discrimination from several senior officers, no single individual took ownership to stop or address the abuse. This case clearly illustrates how when multiple senior officials share responsibility for addressing harassment, the lack of clear individual accountability can allow toxic behaviors to persist, resulting in tragic outcomes. This diffusion of responsibility within the system contributed to his tragic death. But the broader lesson is timeless and global. Strong communities and good governance rest on individuals willing to act, not just on laws or systems.

The lesson is not that people don’t care, rather responsibility gets diluted in groups. We want to help, but we hesitate when we think others will act. The solution is simple but requires courage.

Only when individuals consistently step forward to take responsibility and insist on action and answers will communities become healthier, more responsive, and more prosperous. In conclusion, many community problems persist not because people don’t know about them, but because diffusion of responsibility and a lack of accountability mindset prevent action.

* * *

**About Jini Susan Thomas**

Jini Susan holds a Master’s in Public Policy and works as a Program Associate at the Centre for Civil Society. She is passionate about gender policy issues, and enjoys exploring new ideas that connect society and governance.

## Street Vendors are Eyes on the Street

Original: https://www.spontaneousorder.in/p/street-vendors-are-eyes-on-the-street

Author: Spontaneous Order

Published: 2025-09-20T16:34:35.000Z

Topics: street-vendors, urban-zoning, informal-economy, eyes-on-the-street

> The informal sector offers several appealing features. Entry barriers are low since both start-up capital and skill requirements are minimal. Though some workers acquire vocational training, most entrepreneurs gain experience through informal apprentice..

**Summary:**

Street vending in India's informal sector appeals due to low entry barriers, minimal skills needed via informal apprenticeships, flexibility for balancing household duties, and personalized services unavailable from larger firms. Yet, regulations under the Street Vendors Act 2014, capping vendors at 2.5% of urban population (roughly 10 million based on 430 million urbanites), often penalize rather than protect livelihoods through fines, confiscations, and evictions—echoing Bastiat's 'perversion of law' where law becomes a tool of exclusion. In Chandigarh, fines exceed a week's income for minor cart misplacements, and geo-tagged zoning traps vendors amid shifting foot traffic, denying natural clustering incentives from Hotelling's model, where competitors converge centrally to minimize consumer travel costs and achieve Nash equilibrium. This zoning disrupts the 'sidewalk ballet' Jane Jacobs described, stripping streets of vitality, convenience for daily needs, mixed-use vibrancy, and 'eyes on the street' safety from constant human presence. Classical-liberal critique urges revising such laws, recognizing cities as organic communities, not engineered machines.

**Key points:**

- Street vending provides low-barrier entry, flexibility, and personalized services but faces regulatory penalties like fines exceeding weekly income and rigid zoning.
- India has about 10 million street vendors, capped at 2.5% of urban population under the 2014 Act.
- Vendors naturally cluster at high-traffic spots via Hotelling's model to capture maximum customers amid transport costs.
- Zoning kills street life, safety, and mixed-use vibrancy, opposing Jacobs' 'eyes on the street' principle.
- Revise vending laws to support organic urban communities rather than top-down control.

**By Rimmon Dass**

* * *

The informal sector offers several appealing features. Entry barriers are low since both start-up capital and skill requirements are minimal. Though some workers acquire vocational training, most entrepreneurs gain experience through informal apprenticeships. Another key attraction is the flexibility provided to individuals who need to balance household responsibilities with income-generating activities. Informal sector employment allows them to adjust their working hours as needed. Additionally, the small scale of these enterprises enables them to deliver personalised services that larger firms often cannot match.

Regulatory framework governing street vending makes it a complex activity. Instead of protecting their right to livelihood, the law is often used to penalise or restrict vendors through fines, confiscations, or eviction drives. This reflects what Frédéric Bastiat described as the “perversion of law” in the famous pamphlet “The Law” published in 1850. In this essay Bastiat points out how the law can cease to safeguard life, liberty, and property, and instead become a tool of exclusion or control. Rather than securing justice for vulnerable groups, regulatory frameworks sometimes criminalise their strategies for survival. 

These laws affect a sizable number of people. There are varying estimates on the scale of street vending in Indian cities. Under the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014, the number of vendors is capped at 2.5% of a city’s population. Based on the 2011 Census, India’s urban population stood at 377 million, and if we assume it has now grown to around 430 million, this would translate into roughly 10 million hawkers. This figure also aligns with the estimate put forward in the [National Policy for Urban Street Vendors](https://dcmsme.gov.in/Street%20Vendors%20policy.pdf) (2009).

A few months ago in Chandigarh, fines for small mistakes like placing your cart a few feet outside the assigned spot were hiked. This fine was more than a week’s income for street vendors. The city also restricted vendors to their geo-tagged spots, even if foot traffic shifted elsewhere during the day. Vendors lost flexibility. When customers moved, they couldn’t. Street vendors were being zoned. Zoning is a way of regulating land use where governments divide land into zones and set rules on how that land may be used. 

Believe it or not, businesses have a strategy to zone themselves. This was observed by Harrold Hotelling. The Hotelling Model suggests that when two similar vendors in the city compete among themselves and consumers pay for transportation costs, it is likely that both vendors will place their stalls near the middle of the population of the consumers. It’s worth asking why this happens? Consumers choose to buy from the stall offering the lowest total cost (price of the good + travel cost). Since price is almost the same due to homogeneity in goods, the only differentiation that exists is in travel cost. So, each stall wants to locate where it can capture the maximum share of consumers. This creates a strategic incentive where neither vendor wants to leave “too much space” in the center, because the rival could capture those consumers. The end result of this interaction makes the middle location the Nash Equilibrium – a condition where none of the players have a scope for unilateral deviation. [An interesting Ted-ed video](https://www.youtube.com/watch?v=jILgxeNBK_8) also narrates how this phenomena takes place. 

This is something we can also observe in our daily commutes. To capture maximum consumers, street vendors tend to cluster around metro stations, office hubs, and bus stops creating vibrant markets of their own. Zoning not only disrupts the livelihood of millions of people but it can also make our streets lifeless. An idea that urbanist Jane Jacobs calls the “sidewalk ballet” in her popular book “The Death and Life of Great American Cities”. The ballet is Jacobs’ metaphor for the daily choreography of city life on sidewalks. Each person who is a part of the city contributes to the vitality of its streets. These small interactions affect our daily lives. When street vendors disappear from busy spots, it becomes difficult to find the little things: fruits, snacks, a pen, or a comb. The two-minute walk now becomes a twenty-minute hunt which not just makes it less convenient but results in a loss of time which could have been used productively elsewhere. 

Zoning is the opposite of mixed-use neighbourhoods. When housing, shops, workplaces, restaurants, schools, and street vendors coexist, they make streets lively and extend the time of their use from just the daytime extending into the night. Zoning does the exact opposite. It takes out life and makes streets unsafe. When more people live, work and interact in close proximity, they fuel street life, safety, and economic vibrancy. Safety doesn’t only come from the police or surveillance, but also from continuous presence of people in public spaces. Anyone in these busy spaces can become the “eye of the street”, including street vendors.

This is not to say that all the laws concerning street vending are bad but certain laws require revision, maybe some require more thought and deliberation. Cities are not machines to be engineered. Urban design should support local communities instead of replacing them with abstract notions.

* * *

**About Rimmon Dass**

## Justice or Illusion? The Case Against Capital Punishment

Original: https://www.spontaneousorder.in/p/justice-or-illusion-the-case-against-capital-punishment

Author: Spontaneous Order

Published: 2025-09-05T12:25:59.000Z

Topics: death-penalty, criminal-justice, judicial-efficiency, victim-rights

> Capital punishment serves no meaningful purpose.

**Summary:**

Chetna Sabarigreesan argues from a classical-liberal perspective that capital punishment in India serves no societal good, imposing undue burdens on taxpayers and the justice system while failing victims and risking irreversible errors. Victims and families often find no closure from executions, as the perpetrator's death neither undoes the loss nor prevents accentuating violence. Contrary to assumptions, death penalty cases cost far more than life imprisonment without parole, due to prolonged trials in Sessions Courts, multiple appeals in High Courts and the Supreme Court, and mercy petitions—often resulting in life terms after massive expenditure. This creates opportunity costs, delaying other serious cases amid decreasing global violence driven by social and economic development. Deterrence is unsatisfactory, and errors persist despite safeguards: in the first seven months of 2025, the Supreme Court acquitted or commuted 11 of 14 death sentences from lower courts, highlighting risks to innocents exacerbated by digital evidence tampering like deepfakes. A fair, efficient justice system cannot sustain this costly, fallible practice; abolition aligns with classical-liberal principles of limited state power and individual rights.

**Key points:**

- Capital punishment provides no closure to victims, failing those most affected by crimes.
- Death penalty cases in India cost more than life imprisonment due to extended appeals and safeguards.
- Supreme Court acquitted or commuted 11 of 14 death sentences in the first seven months of 2025, risking innocents.
- It drains public resources and delays other critical cases, imposing high opportunity costs on taxpayers.

**By Chetna Sabarigreesan**

* * *

Capital punishment or the legal authorisation of killing of a person as punishment for a crime is a practice followed by many countries  throughout the world, in some cases, it is even a [glorified](https://www.bbc.com/news/world-asia-india-50812776) measure of bringing justice to the victim.

It is understandable that, in cases of profound violation, a victim or their loved ones might hope a perpetrator’s death will offer some reprieve. Yet many first-hand accounts show that executions often do not bring the closure that they hoped for. [In numerous cases,](https://oxfordre.com/criminology/display/10.1093/acrefore/9780190264079.001.0001/acrefore-9780190264079-e-20?d=%2F10.1093%2Facrefore%2F9780190264079.001.0001%2Facrefore-9780190264079-e-20&p=emailAYysZObd8eMrs&utm) the victims and their families report that the death of the perpetrator does little to ease their pain or repair the harm, possibly because the death of the perpetrator does not undo their loss, and perhaps only accentuates violence with more violence.

This leads one to question whether there is any societal good that might result from capital punishment when it does not even serve the welfare of those affected by the crime.

It is worth considering the notion that capital punishment serves nobody. It is not helpful to the victims who have suffered the most, it is a burden upon the tax payer, whom the execution of capital punishment is beared by and also has an [unsatisfactory effect](https://ohrh.law.ox.ac.uk/law-commission-of-india-recommends-abolition-of-the-death-penalty-a-historic-first-step/) on deterrence of crimes. A common assumption regarding capital punishment is that it saves public money since the state is spared the cost of long-term imprisonment, healthcare and related expenses. However, in practice, the [opposite is true](https://deathpenaltyinfo.org/policy-issues/policy/costs): implementing the death penalty is far more expensive than sentencing an offender to life imprisonment without parole.

The higher cost arises because death penalty cases in India often involve prolonged and complex trials in Sessions Courts, followed by multiple rounds of appeals in High Courts and the Supreme Court. The stakes being a person’s life demand additional safeguards, which require more lawyers, expert witnesses, and judicial time. Mercy petitions to the President or Governors further extend the process. As a result, convicts often end up serving life terms, but only after the state has spent far more resources on extensive litigation. 

Beyond the large sums of public money spent, one must consider the opportunity cost of litigating death penalty cases whose likelihood of ending up in a life sentence verdict is very high, numerous other cases which could be of equally serious consequences remain unheard. While it is difficult to exactly quantify the losses incurred through the non hearing or delayed hearing of those disputes, it is reasonable to imagine the severe costs of such delayed hearings. Unlike death penalty litigation, where outcomes are more predictable, these other cases could go in many different directions, making timely adjudication all the more critical. In fact, as [violence continues to decrease worldwide](https://www.google.co.in/books/edition/The_Better_Angels_of_Our_Nature/c3cWa-GnsfMC?hl=en&gbpv=1&printsec=frontcover) with social and economic development, the disproportionate attention given to death penalty litigation seems increasingly out of step with the direction in which modern societies are moving.

Even with the deliberately long, multi-tier safeguards that accompany a death sentence in India, the system is still very susceptible to errors. There have been [several cases](https://www.project39a.com/annual-statistics) of repeated acquittals, commutations and full exonerations, showing that innocent people can and do get pulled into capital cases. In just the first seven months of 2025, the Supreme Court of India [heard](https://timesofindia.indiatimes.com/city/delhi/why-supreme-court-is-worried-about-lower-courts-hurry-to-hand-out-death-sentences/articleshow/123271645.cms?utm_source) 14 death penalty cases and either acquitted or commuted sentences in 11 of them. That means the overwhelming majority of people sent to the gallows by lower courts were eventually found undeserving of the punishment. Modern digital evidence adds a whole new dimension of [evidence tampering](https://criminallawstudiesnluj.wordpress.com/2025/04/05/the-authenticity-challenge-addressing-the-concern-of-producing-deepfake-generated-media-as-evidence-in-courts/?utm_source): with manipulated media and deepfakes getting harder to detect, courts and forensic capacity are under strain, which increases the chance of evidentiary error.

Taken together, these realities make clear that capital punishment serves no meaningful purpose. It neither brings solace to victims, nor lightens the financial or administrative burden on the state, nor reliably deters crime. Instead, it prolongs trials, drains public resources, and carries the irreversible risk of executing the innocent. A justice system committed to fairness and efficiency cannot afford such a costly and fallible mode of punishment.

* * *

**About Chetna Sabarigreesan**

Chetna Sabarigreesan is a law graduate deeply influenced by the principles of free markets and classical liberalism. She draws inspiration from Nobel laureate Milton Friedman. In her downtime, she enjoys rock climbing and reading. Chetna is a Next-Gen Fellow with CCS Academy.

## Propaganda as a Political Tool

Original: https://www.spontaneousorder.in/p/propaganda-as-a-political-tool

Author: Spontaneous Order

Published: 2025-08-18T13:15:11.000Z

Topics: propaganda, indian-cinema, state-legitimacy, public-choice-theory

> In his commentary on the work of famous British novelist Charles Dickens, George Orwell remarked, “All art is propaganda, on the other hand, not all propaganda is art”. The larger point he sought to convey was that every creator is driven by a set of

**Summary:**

George Orwell noted that all art is propaganda, but not vice versa, embedding creators' beliefs; state propaganda, however, transcends personal views to promote political legitimacy. Distinct from advertisements—which inform choices despite commercial motives—propaganda is biased or false, limiting informed judgments, as argued by economists Christopher Coyne and Abigail Hall in 'Manufacturing Militarism.' Public Choice theory explains politicians' re-election incentives, using propaganda to legitimize interest group demands despite broad costs. Four types include appeals to authority, patriotism, 'us vs them,' and emotional slogans. Indian films exemplify this: 'Uri' (2019) glorifies surgical strikes with PM praise and slogan 'Yeh naya Hindustan hai, yeh ghar mein ghusega bhi, aur marega bhi!'; 'Tejas' (2023), screened at Lok Bhawan, hypes indigenous aircraft ignoring 40-year delays and bureaucratic issues, plus Ram Mandir plot pre-2024 elections. Older cases like 'Haqeeqat' (1964) soothed 1962 war losses and 'Upkar' (1967) echoed 'Jai Jawan, Jai Kisan.' Governments incentivize via tax breaks in risky industry. From a classical-liberal lens, cinema propaganda is a low-cost tool bypassing democratic accountability, imposing costs on uninformed electorates.

**Key points:**

- Propaganda in state-promoted movies is biased or false, unlike ads that enhance consumer choices, limiting public informed judgment.
- Politicians use propaganda to gain legitimacy for interest group policies, per Public Choice theory and Coyne-Hall analysis.
- Indian films like 'Uri' (2019) and 'Tejas' (2023) employ authority appeals, 'us vs them' narratives, and slogans to glorify state actions, ignoring realities like 40-year aircraft delays.
- Governments expedite such films via tax breaks, continuing a trend from 1960s movies like 'Haqeeqat' and 'Upkar.'
- Cinema propaganda bypasses accountability, harming electorates with low-cost legitimacy for politicians.

**By Anshu Chowdhury**

* * *

In his commentary on the work of famous British novelist Charles Dickens, George Orwell remarked, “All art is propaganda, on the other hand, not all propaganda is art”. The larger point he sought to convey was that every creator is driven by a set of beliefs and values which becomes embedded in their work. There is however an exception to this norm: when a message is propagated about the actions of the state. Though crafted by individuals, such messages remain no longer the expression of personal beliefs alone. 

To start off, it is helpful to distinguish propaganda from other forms of persuasion like advertisements. Propaganda is purposefully biased or false. Once produced, it is ripe to promote a political cause. The spread of propaganda is bad for those on the receiving end, as the propagandist’s message limits the receiver’s ability to make informed judgements.  Advertisements also use persuasive techniques, but they do not restrict people’s ability to make informed judgements, even if their intent comes from commercial incentives of profit. Instead they make consumers aware of available options and thereby enhance their capacity to choose. This distinction should sharpen our concern about the reach and prevalence of propaganda in society.

This is an important distinction made by economists Christopher Coyne and Abigail Hall in their book: [Manufacturing Militarism](https://www.sup.org/books/politics/manufacturing-militarism). They also argue that the state possesses strong incentives to deploy propaganda as a means to achieve a specific end. Political legitimacy is that end, and movies become the means. The Indian case reflects this dynamic too. 

Established literature from Public Choice theory makes a strong case that the primary motivation of politicians is to get re-elected. To be re-elected, support from interest groups plays an indispensable role in shaping electoral strategies. Propaganda can help to frame the demands of narrow interest groups as legitimate and to make them politically feasible, even if these policies impose large costs on citizens overall.

Propaganda’s messaging can be of four types. The first looks to appeal to an authority. The second looks to appeal to patriotism that demands vigorous support of state action. The third, and a dangerous one, is an appeal to see events from an “us vs them” perspective, so that there are in-groups who are allies, and out-groups who are enemies. The fourth, is more sophisticated. It embeds slogans and imagery that is emotional with a high recall value. Many of these elements can be seen in Indian movies. 

The movie *[Uri](https://en.wikipedia.org/wiki/Uri:_The_Surgical_Strike)* [(2019)](https://en.wikipedia.org/wiki/Uri:_The_Surgical_Strike)*,* for example, banked on an  appeal to military heroism. In its opening minutes the call out for “based on facts” and the larger-than-life portrayal of the Indian government lend appeal to authority. This messaging got another shot in the arm on authority when the Prime Minister praised the film himself. The “us vs them” narrative is also at play, where the terrorists and well trained soldiers are always in sharp contrasts, with no shared commonalities. Memorable slogans with high recall value are peppered across the movie such as, “*Yeh naya Hindustan hai, yeh ghar mein ghusega bhi, aur marega bhi!*” (This is a new Hindustan, it will enter your house too, and beat you up too). This phrase became popular reflecting the government’s aggressive stance on national security, making it much easier to gain legitimacy for similar strikes in the future. 

Another example is from the movie *[Tejas](https://en.wikipedia.org/wiki/Tejas_\(film\))* [(2023)](https://en.wikipedia.org/wiki/Tejas_\(film\)). It was screened at the Lok Bhawan after the state cabinet meeting. An important narrative of the movie focuses on Tejas, the combat aircraft, designed and manufactured indigenously in India. The movie’s jingoism is apparent when it is contrasted with actual hurdles faced in the production and delays in the production of the aircraft. The aircraft carries several issues on delays in delivery, its maintainability and a prolonged development time taken of up to 40 years in the making. The reality is one of bureaucratic red-tape. None of this was featured in the movie. The pro-Tejas narrative is harmful when objectivity is lost and the dominant messaging amplifies the aircraft’s reliability and performance. What’s worse is that plot lines contained the sensitive matter of *Ram Mandir*, ahead of the General elections of 2024.  
  
Governments also have an active incentive to expedite and promote such movies, through tools like tax breaks. Operating in a high-risk industry compels movie production houses to take that as a signal to alter their productions and script narratives.

This trend however is not new. This has persisted since the formation of the Indian state. *[Haqeeqat](https://www.imdb.com/title/tt0154565/)* [(1964)](https://www.imdb.com/title/tt0154565/) and *[Upkar](https://en.wikipedia.org/wiki/Upkar)* [(1967)](https://en.wikipedia.org/wiki/Upkar) are two such movies that rank high in the list of propaganda movies. Haqeeqat as a war-time movie was meant to soothe the losses of the 1962 Sino-India war, and the Upkar contained a direct reflection on then Prime Minister’s slogan “*Jai Jawan, Jai Kisan.”* 

India’s long history of such films illustrates how propaganda serves as a low-cost, high-yield tool for politicians to secure legitimacy. Its downsides are that it imposes costs onto an uninformed electorate. Propaganda in cinema is a calculated political instrument that can bypass democratic accountability. 

* * *

**About Anshu Chowdhury**

## Why can Flying Abroad be Cheaper than Flying Domestic?

Original: https://www.spontaneousorder.in/p/why-is-flying-abroad-cheaper-than-flying-domestic

Author: Spontaneous Order

Published: 2025-08-06T14:59:12.000Z

Topics: indian-aviation, atf-taxation, route-dispersal-guidelines, airline-competition

> A trip is on the horizon. A familiar ritual for millions in India would be to open a travel website, enter a string of city names, and start tracking a list of flight prices. Most fares are high beyond explanation, with any reasonable option being a red..

**Summary:**

India's aviation market, the world's third-largest, suffers from high domestic flight prices often comparable to international fares like Delhi-Bangkok versus Delhi-Bengaluru, due to government-imposed distortions. The primary culprit is Aviation Turbine Fuel (ATF), comprising 40-50% of operating costs, subjected to double taxation—central excise duty and state VAT—excluded from GST, preventing input tax credits and creating a 'tax on tax' cycle, with an additional 5-12% GST on tickets. International flights benefit from ATF exemptions as 'deemed exports,' evading both taxes. Domestic operations face Route Dispersal Guidelines (RDG), mandating unviable routes to remote areas, leading to cross-subsidization that inflates fares on high-demand routes like Delhi-Mumbai. A duopoly of IndiGo and Air India, post collapses of Jet Airways and Go First, reduces competition, while 150 aircraft are grounded due to supply issues, contributing to a 40% fare hike in the last six quarters. From a classical-liberal view, these regulatory burdens stifle markets; reforms should include bringing ATF under GST for 7-9% cost savings, replacing RDG cross-subsidies with transparent direct subsidies, and fostering competition to lower fares and stabilize the industry.

**Key points:**

- ATF accounts for 40-50% of airline costs in India and faces double taxation (excise + VAT) without GST input credits.
- International flights get ATF tax exemptions as 'deemed exports,' while domestic routes bear full taxes and RDG-mandated cross-subsidies for unviable paths.
- India's domestic market duopoly and 150 grounded aircraft exacerbate capacity constraints and 40% fare increases.
- Bring ATF under GST to cut costs by 7-9% and enable input credits.
- Replace RDG cross-subsidies with direct subsidies and promote competition to make domestic flying affordable.

**By Tapasya Srivastava**

* * *

A trip is on the horizon. A familiar ritual for millions in India would be to open a travel website, enter a string of city names, and start tracking a list of flight prices. Most fares are high beyond explanation, with any reasonable option being a red-eye flight, leaving the consumer disheartened.

India is the [world’s third-largest](https://www.iata.org/en/iata-repository/publications/economic-reports/aviation-in-india/) aviation market. But this market is turbulent, unreliable, and plagued by distortions. For any story of growth there are balancing tales of shutdowns of large, and seemingly capable airlines like Kingfisher, Jet Airways, and Go First. How is this discrepancy explained?

The answer may lie in a complex web of problems. The root cause being: operation costs are high and a large component of it is imposed by the government.  

The single biggest cost component eating into airline profits is Aviation Turbine Fuel (ATF). It is about [40-50% of an airline’s total operating costs](https://www.wrightresearch.in/encyclopedia/chapter-report/chapter-7-challenges-and-investor-overview-of-indias-aviation-sector/) in India. ATF in India is subject to a complex and overlapping tax structure that is often onerous for airlines and extractive in nature.This system is distortionary and a large burden is borne by passengers.

ATF is taxed twice. Central excise duty by the central government, and state VAT by state governments. ATF has been excluded from The Goods and Service Tax (GST) regime that was supposed to streamline such tax codes. 

Airline ticket prices do not consist of just the ATF tax component, but also an additional layer of tax, the GST. GST is levied on the total ticket price, 5% for economy, and 12% for business class. 

Before the advent of GST, airlines could set off the central excise duty paid on ATF, against the service tax that was owed on ticket sales. Following the enforcement of GST, that option is no longer available. So, there are at least three levels of taxes for airlines in India at present. 

It is also surprising that domestic fares are becoming comparable to international fares. Flying to Bangkok from Delhi can sometimes be cheaper than flying to Bengaluru. There are three main reasons behind this. 

First, for the aircrafts flying abroad, ATF is not taxed. For flights departing India, the ATF loaded is treated as a “[deemed export](https://www.financialexpress.com/market/commodities-atf-purchases-by-indian-carriers-for-overseas-flights-exempt-from-11-excise-duty-finance-ministry-2587603/)“, and is completely exempt from both central excise duty and state VAT. This means an airline pays significantly less for the same fuel when flying to Dubai or Bangkok, when compared to flying to any domestic airport like Bengaluru or Vizag. This is the primary burden that domestic passengers bear. 

The second reason is the Route Dispersal Guidelines (RDG). This is a regulatory burden imposed only on domestic operations. It requires airlines to operate a certain percentage of flights on routes connecting remote regions to ensure national connectivity. Many of these routes lack commercial viability and operate at a loss. To compensate for these losses, airlines engage in cross-subsidisation, charging slightly higher fares on high-demand routes like Delhi-Mumbai. In essence, a small portion of a ticket price on a busy domestic route also carries a hidden subsidy that helps pay for a flight to a remote town. There are [no RDG burdens for  international flights](https://aviationdatabykrishnan.medium.com/indias-airfare-paradox-why-flying-abroad-can-sometimes-be-cheaper-than-flying-domestic-dfce3b43c241) to comply with. 

Prices also depend on the state of competition in the overall market. This is the third important reason behind high domestic fares. International routes that connect with hubs like Dubai and Singapore are battlegrounds fought over by numerous foreign and Indian carriers. This competition pushes fares down. The Indian domestic market, in contrast, is getting concentrated into a duopoly dominated by IndiGo and the Air India group, especially after the collapse of major carriers like Jet Airways and Go First, reducing the competitiveness that brings down prices.

Air travel has always been a difficult market to operate in given its high dependence on global supply chains. Domestic carriers in India are confronted with a huge capacity constraint. Close to [150 aircrafts](https://m.economictimes.com/industry/transportation/airlines-/-aviation/domestic-airfares-on-northward-trajectory-still-among-lowest-globally-experts/articleshow/110438608.cms) in India are grounded for poor engine maintenance and lack of spare part availability. 

Together these factors have led to a 40% fare increase in fares on major routes in the [last six quarters](https://m.economictimes.com/industry/transportation/airlines-/-aviation/domestic-airfares-on-northward-trajectory-still-among-lowest-globally-experts/articleshow/110438608.cms), post-pandemic.  
  
The challenges of Indian aviation are complex but solvable. The most impactful reform would be to bring ATF under the GST system. This would allow airlines to claim Input Tax Credit on fuel taxes, breaking a “tax on tax” cycle. Projections show this could reduce airline fuel [costs by 7-9%](https://taxonation.com/index.php/show-detail-news/2249562/atf-likely-to-be-included-in-gst-soon-says-union-minister-hardeep-singh-puri), a relief that could stabilise the industry and lower fares. But the main hurdle is achieving political consensus among states in the GST Council, where states would have to cede their power to levy VAT.

Indian aviation is in desperate need of a holistic approach. Policies must encourage competition to prevent a duopoly from harming passengers. Any social goals of RDG must be at least met through transparent, direct subsidies, rather than market-distorting cross-subsidisation. 

By rationalising fuel taxes, ensuring robust competition, and modernising subsidy transfers, India can create a future where flying is both affordable for its citizens and profitable for the airlines that carry them.

* * *

**About Tapasya Srivastava**

Tapasya Srivastava is an Electronics and Communication Engineer who transitioned from civil services preparation to a purpose-driven career in public policy. She recently completed the Researching Reality 2025 residential research program at the Centre for Civil Society and has now begun her journey as an SBI Youth for India Fellow (August 2025 cohort).

## The Case Against Criminalisation of Laws

Original: https://www.spontaneousorder.in/p/the-case-against-criminalisation-of-laws

Author: Spontaneous Order

Published: 2025-08-01T13:34:22.000Z

Topics: overcriminalization, decriminalization, social-contract, criminal-justice-reform

> The State exists as a result of a social contract between individuals and their communities. Citizens empower the state, as an institution, with a monopoly over the use of violence. In exchange the state must provide them with protection and stability. ..

**Summary:**

The state derives its monopoly on violence from a social contract where citizens are principals and the state their agent, obligated to use force only for harm to others (not minor inconveniences), proportionally, and as a last resort. Modern governments overcriminalize, violating these principles, as seen in India's Narcotic Drugs and Psychotropic Substances Act, 1985 (Section 27), which criminalizes drug consumption in Punjab despite it primarily harming the self-addicted individual, ignoring rehabilitation alternatives. Similarly, the Mental Health Act, 2017 (Section 108) imposes blanket penalties—six months' imprisonment for first violations, two years for repeats—for any breach, equating minor errors like record-keeping to grave offenses. Harsher punishments fail to deter crime, as certainty of detection matters more; US alcohol Prohibition in the 1920s, with life sentences for moonshining but only 15,000 agents nationwide, spurred noncompliance and the 'roaring twenties.' Overcriminalization also boosts recidivism: research by Ilyana Kuziemko shows removing parole opportunities increases reoffending by about 10%, as prisoners lose hope and disengage from rehabilitation. Decriminalization restores the social contract's ethical core, affirming citizens as masters of the state, not subjects.

**Key points:**

- State force is legitimate only for harm to others, with proportional punishment and as last resort.
- NDPS Act Section 27 criminalizes drug consumption, punishing self-harm without prioritizing rehabilitation.
- Mental Health Act Section 108's blanket provisions enable arbitrary imprisonment for minor violations.
- Crime deterrence relies on certainty of capture, not harshness, as US Prohibition exemplified.
- Overcriminalization raises recidivism by 10% via reduced parole hope, per Kuziemko's research.

**By Animesh Sabat**

* * *

The State exists as a result of a social contract between individuals and their communities. Citizens empower the state, as an institution, with a monopoly over the use of violence. In exchange the state must provide them with protection and stability. The relationship between citizens and the state is that of a principal-agent. Where citizens are the principle and the state accountable to them as their agent. If the state is authorised to use force, it is only under particular conditions.

These conditions may vary in different situations but there are at least three consistent principles that the state must follow. 

First, an individual can be punished only if their actions cause harm to others. The use of force is illegitimate and out of proportion when the harm committed to the community is a minor inconvenience.

Second, the punishment must never be disproportional to the crime. The state is also the agent of the person accused of the crime, and it owes them this responsibility. 

Finally, if there is a way to resolve the issue without using force, it should be the first priority. The use of force must be the last resort. 

Modern-day governments often fall short on these conditions, and are behaving in a way that leads to the path of overcriminalisation. 

A useful example is that of the [Narcotic Drugs and Psychotropic Substances Act, 1985](https://www.indiacode.nic.in/bitstream/123456789/18974/1/narcotic-drugs-and-psychotropic-substances-act-1985.pdf) in the state of Punjab. This law deals with the harm caused by drug addiction. Under section 27 of the Act, consumption of narcotic drugs or psychotropic substances is deemed to be a criminal offence. 

The problem with this law is that it fails to understand the problem of addiction from an individual’s view. Someone addicted to drugs cannot instantly change their proclivity to drugs the minute a law is passed, even if the person wishes to do so. Instead of helping individuals overcome their problems, the law intensifies their misery. The person being criminally punished is inflicting harm on themselves from the addiction, not society at large. The punishment is not proportional and does not take into consideration other reasonable alternatives like rehabilitation that can substitute the use of force. This law is a result of the state’s instinct for overcriminalising legal provisions.

The state’s instinct for overcriminalisation can become egregious through blanket provisions of criminalisation. One such instance is section 108 of the [Mental Health Act, 2017](https://www.indiacode.nic.in/bitstream/123456789/2249/1/A2017-10.pdf). The generality of its phrasing is problematic: Any person violating any provision of the act, or any rule, or any regulation, made to implement the act, will be imprisoned for a term of six months, in the first instance, and be imprisoned for two years, in the second instance. 

The criminal generality of this law makes an error in record keeping to be at the par with performing a brain surgery without consent. Arbitrary blanket provisions are dangerous. They are worse than outrightly unjust laws, given their blanket criminal provisions are in the fine print, giving them the impression of laws that are for a legitimate reason. But they are vehicles for injustice in the name of collective good.

Unfortunately, there is much popular support for harsher punishments for inflicting harm in our society. Draconian punishments are often justified through the arguments for establishing deterrence. Disproportionate punishments imposed on individual offenders, it is believed, will prevent that particular offender from committing crimes again, and pass a larger general message to deter others in the society.

Except, harsher punishments in the laws don’t deter crimes at all. It is the certainty of being caught that enforces deterrence, not the punishment imposed. When the United States imposed prohibition on alcohol in the 1920s, the law penalised offences like moonshining with life imprisonment. Despite this, the compliance with this law was so low that the alcohol centred party culture of the decade earned it the nickname of “the roaring twenties”. The Bureau of Prohibition had just 15,000 agents for the entire country. With the low chance of being caught, no punishment could deter defaulters.

But through overcriminalisation there is a larger duty that the state also fails at. It is the agent’s duty towards its principle, the individual citizen who is on the receiving end of criminal punishments. When the state as the principle reacts with brutality it increases recidivism, which is the tendency of the criminal to reoffend.      

Research by the scholar [Ilyana Kuziemko](https://kuziemko.scholar.princeton.edu/sites/g/files/toruqf3996/files/kuziemko/files/inmates_release.pdf) has shown that removing the opportunity for shortening a prison sentence through parole reviews, increased reoffending rates by about 10%.  When the state as the agent abandons thinking from the principle’s perspective, prisoners lose hope, engage less in rehabilitation, and behave worse out of cynical frustration. 

Overcriminalisation violates the foundational principles of the social contract, making the state’s legitimacy over violence questionable. Decriminalisation is not a favour bestowed upon citizens due to the kindness of the state and its leaders, but rather a return to the ethical core of why these leaders are given power, in the first instance. The citizen is not a subject of the state but rather its master. Reforming the legal system in accordance with this principle is an important reform path to take ahead.

* * *

**About Animesh Sabat**

Animesh Sabat is a student of economics at Hindu College, University of Delhi. He aspires to become a policy maker in near-future. He is also a Research Reality Scholar 2025.

## Sarojini Nagar Reveals the Gap Between Law and Livelihood

Original: https://www.spontaneousorder.in/p/sarojini-nagar-reveals-the-gap-between-law-and-livelihood

Author: Spontaneous Order

Published: 2025-07-23T16:48:49.000Z

Topics: street-vendors, informal-economy, urban-planning, rule-of-law

> On 17 May 2025, something routine and brutal played out in Sarojini Nagar. About 200 stalls were torn down under the cover of night. No notice, no consultation, no pause. This wasn’t atypical. For decades, this market, despite being Delhi’s busiest in

**Summary:**

On 17 May 2025, Delhi authorities demolished about 200 stalls in Sarojini Nagar market without notice or consultation, shortly after vendors sought High Court protection, exemplifying a decades-long cycle of a dozen such demolitions since the 1990s justified by vague charges like 'obstruction' or 'nuisance' under the Delhi Municipal Corporation Act. The author invokes the Supreme Court's Olga Tellis vs. Bombay Municipal Corporation (1985) ruling, which deems eviction without due process a violation of the constitutional right to livelihood, arguing that opaque laws enable selective, discretionary state power rather than genuine urban planning. Sarojini Nagar embodies a spontaneous, bottom-up economy of export surplus stalls, family-run shops, tailors, and street kitchens—many led by women supporting households—within Delhi's estimated 400,000+ informal vendors per MCD data, far exceeding the Street Vendors Act (2014)'s 2.5% population cap (875,000 for 35 million residents). Despite the Act's provisions for Town Vending Committees and protections for stationary, semi-stationary, and mobile hawkers, these are ignored. From a classical-liberal lens, vendors are honest laborers penalized for lacking paperwork in a city exploiting their hustle; lawful cities demand state respect for organic economies built on trust, not destructive machinery.

**Key points:**

- State demolished 200 Sarojini Nagar stalls on 17 May 2025 without notice, defying vendors' High Court plea and Olga Tellis (1985) due process mandate.
- Vague municipal laws like those in the Delhi Municipal Corporation Act enable selective enforcement against informal vendors.
- Street Vendors Act (2014) protections, including Town Vending Committees, remain unimplemented despite recognizing 400,000+ Delhi hawkers.
- Informal markets like Sarojini represent legitimate spontaneous economies that state planning destroys rather than integrates.
- Genuine urban legitimacy requires state trust in bottom-up livelihoods over brute demolitions.

**By Neehra Sharma**

* * *

On 17 May 2025, something routine and brutal played out in Sarojini Nagar. About [200 stalls](https://www.ndtv.com/delhi-news/200-shops-removed-in-demolition-drive-at-delhis-popular-sarojini-market-8469194) were torn down under the cover of night. [No notice, no consultation, no pause.](https://m.economictimes.com/news/new-updates/sarojini-nagar-market-demolition-why-over-100-shops-were-razed-in-late-night-action-in-delhi/articleshow/121306244.cms)

This wasn’t atypical. For decades, this market, despite being Delhi’s busiest informal retail space, has lived under the threat of collapse. Since the 1990s, there have been a dozen demolitions in this market. Every few years, the same cycle repeats: a justification is found, the state proceeds to destroy, and livelihoods are left to dust and splinters.

There are legal precedents that can be used to stop this, but they don’t work. In [Olga Tellis vs. Bombay Municipal Corporation (1985)](https://indiankanoon.org/doc/709776/), the Supreme Court said that eviction without due process violates the right to safe livelihood, and reiterates this right to be a right at par with other constitutional rights.

The significance of the May 2025 demolition lay in when it occurred. Just a few days earlier, vendors from Sarojini Nagar had approached the Delhi High Court seeking protection. They were not breaking the law, they were trying to use it to seek protection. The state offered a response: demolition.

The state doesn’t call its actions as punishing people. It instead cites “obstruction,” “nuisance,” or “clearing unauthorised use” as its primary motivators. These vague tools in the hands of municipal power are easy to invoke and hard to challenge.

The [Delhi Municipal Corporation Act](https://www.india.gov.in/my-government/acts-rules/delhi-municipal-corporation-act-1957) practices selective enforcement, where one vendor may face eviction, another is allowed to remain. Opaque laws  preserve discretionary power in the hands of the state. This is not urban planning in any meaningful sense. It is a performative exercise at best. The law, in this context, functions less as a framework for justice, and more as a tool of administrative convenience, invoked to legitimise decisions that were made already by someone behind a powerful desk.  
  
It’s worth asking, is Sarojini Nagar really as illegitimate as the state finds it to be every now and then? 

Sarojini Nagar, like many neighbourhoods in Delhi, didn’t follow a blueprint. It grew out of a settlement of individuals, who followed a routine in pursuit of a livelihood and survival. It was first part of Vinay Nagar, a housing scheme for government workers in the 1950s. Later on in the 1970s, it got renamed after the political activist and poet Sarojini Naidu. Since then it has evolved into a dense network of export surplus stalls, family-run shops, tailors, and street kitchens.

The vendors of Sarojini Nagar are not lawbreakers. They’re just visible. Their work doesn’t fit into the paperwork, so they’re called “illegal.” But what they do is no different from what most small traders do: find a way to survive in a city that gives them almost no space but takes their labour anyway. When they are hurt, and their livelihoods are destroyed, they get alienated from their fair stake in the economy, and are penalised despite their honest labour.

Many of these shops and establishments are run by women, who support households with additional labour that is unpaid and invisible.

To walk through Sarojini is to walk through a street-level economy built on risk, skill, and hustle. It’s a version of the city that the state refuses to admit into its plans. This economy is huge and its strength of numbers, unknown. By the Municipal Corporation of Delhi’s estimates there are more than [400,000 vendors](https://www.hindustantimes.com/cities/delhi-news/mcd-to-conduct-fresh-census-of-street-hawkers-and-vendors-in-delhi-project-expected-to-take-six-months-101692641479236.html), most of them operating without formal recognition but well within the everyday economy of the city. The Street Vendors Act (2014) aims to cap their numbers at 2.5% of a city’s population. With Delhi’s estimated population of 35 million persons, from the state’s view there must be at least 875,000 street vendors. But none of these numbers come close to reality. Sarojini is just one of the many growing flea markets of Delhi.   

A researcher, Shweta Sharma, in her [2015 study on Urban Street Hawkers](https://www.sciencedirect.com/science/article/pii/S2212017316302985), classifies street vendors operating in Delhi. There are those who are Stationary Hawkers who form the dominant size of all street vendors. There are also Semi-stationary Hawkers, who move in interstices. Mobile Hawkers, the third kind, are always on the move, throughout the day. The Street Vendors Act, 2014 acknowledges these vendors and offers them protection and grievance redressal by instituting Town Vending Committees. But in Sarojini, these legal protections are null and void. 

A disheartened vendor, Rashid said, “what’s the point of salvaging a few broken trinkets under this debris?”. When asked how he’ll cope with the destruction, he responded to say, “I’ve grown up here. These things don’t affect me anymore”. He then paused, and offered wisdom on how to be a street vendor in India, “If you don’t have a banner, no one will notice you”. Or in other words, stay invisible. 

Lawful cities are not made with brute machinery. They are formed through trust and care. If the state wishes to govern with legitimacy, it must learn to respect and not destroy what it did not build.

* * *

**About Neehra Sharma**

Neehra Sharma is a third-year student of Political Science at Ramjas College. She is aiming to work in International Development, and looking to explore intersections of gender with climate change and security. She is also a Researching Reality Scholar 2025.

## The Platform Bazaar

Original: https://www.spontaneousorder.in/p/the-platform-bazaar

Author: Spontaneous Order

Published: 2025-07-18T13:41:30.000Z

Topics: railway-platforms, market-regulation, bureaucratic-corruption, informal-vending

> Can there be a market within a market? In the case of railway platform shops, there is. In the larger railway stations operated by the Indian Railways, each platform has its own market of retail shops catering to the needs of travellers. Even if the ch...

**Summary:**

Shubhangi Yadav analyzes railway platform shops in India as 'markets within a market' characterized by high barriers to entry, monopolistic competition, and bidding for licenses via railway tenders, with buyers needing platform tickets or reservations. Sellers face fixed locations amid scarce space, inability to insure inventory despite leasing from Indian Railways (not deemed 'pakka' enough), and extraction of protection money by regulators like Divisional Railway Managers and railway police. Contractors win tenders and sub-lease at high daily/weekly rents in Tier-1 stations, while illegal outside vendors undercut licensed sellers—e.g., 200 vendors at Shahjahanpur station in 2016 paid small fees to regulators to operate without tenancy costs. This fosters a zero-sum 'rock-paper-scissors' game dominated by regulators, who impose tenancy hikes, fake inspections, or license threats, reducing sellers' incentives for quality goods at low prices and harming rushed consumers. Lacking grievance redressal, the setup yields sub-optimal equilibria for buyers and sellers. From a classical-liberal perspective, regulatory overreach and street-level bureaucracy create corruption and inefficiency, contrasting with positive-sum dynamics in freer markets.

**Key points:**

- Railway platform shops require bidding for fixed, scarce locations, preventing mobility unlike external markets.
- Sellers cannot insure inventory, bearing full risks of theft, damage, or natural events.
- Regulators like Divisional Railway Managers extract protection money, enabling arbitrary actions against sellers.
- Contractors sub-lease spaces at high daily/weekly rents, while illegal vendors pay small fees to operate unfairly.
- Absence of effective grievance redressal perpetuates regulatory biases and sub-optimal market outcomes.

**By Shubhangi Yadav**

* * *

Can there be a market within a market? In the case of railway platform shops, there is. 

In the larger railway stations operated by the Indian Railways, each platform has its own market of retail shops catering to the needs of travellers. Even if the character of these small markets embedded within the larger ecosystem of usual markets is different, their challenges are similar and worth examining.  
  
The market for retail stalls on a railway platform has high barriers to entry, much less competition, and is much more challenging to run and make a profit in. From the standard textbook economics view, it is a non-homogenous, monopolistic competitive market. Products are hard to distinguish, and there are fewer sellers. To enter this market, a seller must bid for a license through a railway run tendering system, and a buyer must obtain a platform ticket or a train reservation.   

Like traditional markets, buyers and sellers in the platform market too, arrive at prices through a process of bargaining. An equilibrium for price and quality is struck somewhere in between buyers seeking quality goods at affordable prices and sellers aiming for healthy margins by sourcing cheap inventory. This equilibrium keeps shifting, just like in any other market. But there are several challenges that a shop on a railway platform encounter.

The first challenge is the choice of location. The exact spot of location has to be bid for. And unlike mobile vendors, once locked-in, it’s not easy to move even if there are strategic gains to be made from changing the shop’s location. The space and availability of locations is highly scarce too when compared to the markets outside. 

The second challenge is that these business setups can never have the advantage of insuring themselves. Even if they rented their shop space from a legitimate entity like the government run Indian railways, they still don’t qualify as “pakka” enough, which is a prerequisite for securing insurance. Any inventory loss due to theft, damage, or natural events is borne entirely by the shop owner or leaseholder.

A third and important challenge is for a small and nimble business to have to deal with an exclusive platform regulator: Divisional Railway Manager along with the railway police. Like many other small regulators and street level bureaucracy, platform shops owe them protection money or risk action taken against them on false pretence.

These challenges lead to several negative consequences where buyers, sellers, and regulators get locked into a game of rock-paper-scissors. For any player to win, another must lose. Unlike a positive sum game, where everyone wins. 

The regulator can uproot the seller at any point of time. And the barriers and challenges of the sellers make them want to squeeze out consumers, who can often be in a rush. But the rock-paper-scissor analogy breaks in the relationship between the regulator on one side and the consumers and sellers, on the other side. The dominant player in this game is always the rock or the regulator, winning at the cost of sellers and consumers, both. 

To push the analogy further, the regulator as the rock can go really heavy on the sellers, by increasing tenancy costs, provoking fake inspections, or threatening to cancel licenses. These costs reduce the incentive for the seller to offer high quality goods at lower prices for the large customer base of railway commuters. 

It’s also worth examining how bribes between the regulator and the seller are arrived at. In this transaction, in many instances there can be another third party—the contractor—involved too.  
  
These contractors who win tenders are not the actual shopkeepers but individuals or firms who lease out shop space to other sellers. In some Tier-1 city railway stations, these rents are high and charged to sellers weekly or even daily. It could be that some sellers renting at major stations do earn higher profits and are able to afford high rents. However, many of them face the trouble of inconsistent incomes which makes it difficult to sustain the daily rent and operations. 

Another big challenge is what platform sellers consider “illegal vending”. Outside hawkers may just manage to sell goods without incurring the costs that platform businesses incur, making their livelihoods tougher. In some instances these illegal outside vendors can be hand-in-glove with the regulatory bodies too, like in the case of [Shahjahanpur railway station](https://timesofindia.indiatimes.com/city/bareilly/illegal-vendors-run-free-at-shahjahanpur-railway-station/articleshow/53368881.cms), as found out in 2016. About two hundred vendors paid a small fee to the platform regulators to sell goods without incurring the tenancy cost imposed on platform sellers. 

There is no recourse to such mistreatments, either. Effective grievance redressal mechanisms are missing. While customers may find it easy to file complaints—whether or not they are resolved is another matter—inspectors exhibit personal biases and interests. In this process, they tend to forget that shopkeepers are also members of the public, entitled to fairness and protection. 

But just like in any other market, all these factors affect the level of equilibrium and behaviours of customers, sellers, and regulators. The outcome is sub-optimal for both the buyers and sellers. 

* * *

**About Shubhangi Yadav**

Shubhangi Yadav is a Researching Reality Scholar 2025 and a student of economics at Hindu College, University of Delhi. She is enthusiastic and keen to understand ideas and principles of Public Policy.

## What Else is a Street For, If Not to Perform

Original: https://www.spontaneousorder.in/p/what-else-is-a-street-for-if-not-to-perform

Author: Spontaneous Order

Published: 2025-02-14T16:43:07.000Z

Topics: urban-commons, street-performers, police-norms, public-spaces

> Street busking musicians are more help than nuisance to the police. It takes just one police constable to yank a few cords, cancel expression and remove vitality. Karnataka police recently prevented musician Ed Sheeran from busking on Bengaluru’s Church

**Summary:**

Karnataka police's prevention of licensed musician Ed Sheeran's busking on Bengaluru’s Church Street exemplifies how legal actions become illegitimate through brutish institutional norms, stifling street vitality. Indian street performers know compliance with law is necessary but insufficient, as police discretion often overrides permits based on unsophisticated enforcement culture. Streets should be viewed as urban commons akin to ancient Greek agoras, evolving through participatory governance where performances like haggling, busking, juggling, and athletic displays foster interaction and city life. Urbanist Richard Sennett's observations in 'The Performer' highlight streets' origins in agoras' stoas, which became modern storefronts and pavements as open stages for multiple everyday performances. Busking injects vitality into lifeless streets, enhancing safety and reducing police burdens for crime prevention, contrary to officers' perceptions. This classical-liberal framing urges reconceptualizing streets as participatory spaces for buskers, vendors, and theatre to improve urban quality of life, rather than sterile zones demanding coercive policing.

**Key points:**

- Karnataka police stopped Ed Sheeran's licensed busking on Bengaluru’s Church Street, highlighting arbitrary enforcement norms.
- Streets as urban commons originate from Greek agoras, functioning as open stages for haggling, busking, and performances that build city vitality.
- Busking musicians enhance street safety and reduce police workload by animating public spaces.
- Indian police institutional norms prioritize brute force over recognizing streets' participatory governance potential.
- Reform street governance to embrace performers, vendors, and interactions for safer, livelier cities.

**By Saurabh Modi**

* * *

### Street busking musicians are more help than nuisance to the police.

It takes just one police constable to yank a few cords, cancel expression and remove vitality. Karnataka police recently prevented musician [Ed Sheeran from busking](https://www.instagram.com/reel/DF2tQVNPbRa/?igsh=MTV6N3V1YzRhdmNjag==) on Bengaluru’s Church street. This incident is a reflection on how what is legal may not be legitimate, and how the use of force can make a city, its streets, pedestrians, and musicians worse off.  

Ed Sheeran after the incident pointed out the arbitrariness of Karnataka police. He went on to establish that his team procured the license required to perform in the street. But how law enforcers behave, and what motivates them, can turn something legal into something illegitimate. Buskers and street performers based out of India, know perfectly well that to comply with law is necessary but not sufficient. They can be removed and prevented from performing just because the police on the street feel that it is the right thing to do. Police officers are motivated and expected to behave based on the norms established within the larger law enforcement institution. Karnataka police like several other police forces in India operate by norms that are brutish and unsophisticated. This is common knowledge among anyone who earns their livelihoods on India’s city streets.  
  
The incident is also a revelation of how our law enforcers view streets as public spaces. A street, another way to look at it, is an urban common. Its governance, and who gets to use it and how, evolves and adapts in a participatory way, constantly. Our view of streets in India misses this crucial understanding. It’s worth looking at two noteworthy observations urbanist Richard Sennett makes on streets and performances in his book, [The Performer](https://www.business-standard.com/book/the-performer-examines-the-move-from-open-stages-to-digital-screens-124112501297_1.html). First, a time travel to piece together the origin of streets in our cities. Second, to observe streets as an open stage where multiple performances take place everyday.

One way to look at streets as public places is to observe their origin and connection with the ancient agora in Greece. An agora contained a stoa, which was a large structure where citizens from all walks of life gathered. The stoa opened to a huge open space for everyone to gather. A small flight of steps led to a spacious corridor that was an ideal space to discuss, gossip, and chat with friends. The corridor opened to many freely accessible chambers, where anyone could enter and exit based on their preference. The front ends of the rooms were open and their rear ends walled. Agoras in modern cities expanded and were weaved into the city’s fabric. Stoa rooms became store fronts that customers could visit and large yards became squares and pavements where individuals could gather.

[

![](https://spontaneousorder.in/wp-content/uploads/2025/02/Screenshot-2025-02-14-at-3.01.01 PM-1-1024x684.png)



](https://spontaneousorder.in/wp-content/uploads/2025/02/Screenshot-2025-02-14-at-3.01.01 PM-1-1024x684.png)

The Stoa of Attalos is a great example of a precursor to streets like the Church Street in Bengaluru. (Credits:[David Gill](https://heritagefutures.wordpress.com/tag/agora/))

The heart of a city’s vitality was the agora where performances of multiple kinds took place. Individuals looking to buy goods, and a merchant looking to make a sale, made the great performance of haggling. Customers pretend to be interested, but just enough, sellers keen to sell, but just enough, till they could arrive at a price. But more obvious performers were the lute players offering lyrical compositions, the juggler, fire breather, and acrobat their own masteries. Even Greek athletes could exercise and exhibit their chiseled bodies to onlookers. 

An important takeaway from this vision of a street is that it is a place. A place to be in, interact with, and perform in. When we make this effort to think about streets this way, a musician busking is as natural as a restaurant or bookshop being part of a street. 

Streets are also larger open stages that bring people together. And when they fail to, they are lifeless, unsafe spaces, that are neither private nor public. This outcome has consequences for the law enforcer, who must step up to become vigilant. To use force to prevent a crime, tackle wrong doers, and police for safety. Their burden increases the more lifeless a street becomes.   
Strangely enough, Ed Sheeran is doing Karnataka police a service by putting life into the street. His skill with just a mic, and six strings on the guitar can turn the desolate and lifeless into a vibrant and safe space. Unfortunately, this perception and understanding of a street is missing with Karnataka police. And to be fair, the police officer is held by the norms and practices of the institution he is part of.

What is true for busking is true for theatre, and street vendors. When we look at a street as a common place, we have the opportunity to think about its governance in a participatory way. Streets and the quality of life in a city are interlinked.

Here’s also a remarkable composition by the greatest busker, Woody Guthrie to capture the sentiment:

* * *

**About Saurabh Modi**

Saurabh participated in the Colloquium on the Dilemma of an Indian Liberal organised at the Centre for Civil Society on 26 May 2024. He is an urban policy researcher and Senior Associate with CCS Academy.

## Buildings are natural learners

Original: https://www.spontaneousorder.in/p/buildings-are-natural-learners

Author: Spontaneous Order

Published: 2025-02-11T16:09:41.000Z

Topics: urban-planning, zoning-laws, property-rights, spontaneous-order

> Buildings, like humans, evolve and change; laws and codes shouldn’t restrict them Buildings just like their users, have a life. Buildings react, adapt, grow, transform, evolve, and die. But we don’t hear anyone advocate for buildings to have the same

**Summary:**

Buildings, like humans, evolve through adaptive layers as described in Stewart Brand's 'How Buildings Learn': site, structure, skin, services, space, and stuff. Rigid urban laws hinder this natural learning process. In Delhi, examples abound: the Centre for Civil Society transformed a Hauz Khas residential block (A-69) into offices with reception, conference room, and pantry since 2013; builder floors in Hauz Khas and Greater Kailash host lawyers, accountants, doctors, and startups offering cheap, flexible rents; the Indian School of Public Policy (ISPP) turned a South Delhi bungalow near IIT and JNU into a campus with lecture theatres for 50 students each and sports facilities. These adaptations emerged from owners' and users' ingenuity, not architects' fixed designs. However, Delhi Development Authority (DDA) zoning fixes building uses, requiring permissions that are exceptions, not norms. Institutional zones like Qutub remain empty despite demand, as vibrancy draws users elsewhere; conversions to housing are prohibited, wasting potential for affordable apartments. From a classical-liberal view, assigning fixed uses is futile and costly, akin to locking people into occupations—buildings and users deserve freedom to adapt and foster spontaneous order.

**Key points:**

- Buildings evolve via six shearing layers, enabling adaptation to users' needs without redesign.
- Delhi's residential buildings like CCS's Hauz Khas office and ISPP's bungalow successfully became commercial and educational spaces through owner-user decisions.
- DDA zoning rigidly fixes land uses, blocking evolutions like turning empty institutional buildings into housing.
- Freeing buildings from use restrictions promotes vibrancy, affordability, and spontaneous urban order over state planning.

**By Saurabh Modi**

* * *

## Buildings, like humans, evolve and change; laws and codes shouldn’t restrict them

Buildings just like their users, have a life. Buildings react, adapt, grow, transform, evolve, and die. But we don’t hear anyone advocate for buildings to have the same right to express, or freedom to choose, that persons do. Maybe buildings deserve such an advocacy.   
  
On buildings, writer and thinker Stewart Brand made an important observation that buildings learn. And humanity is better off only when they do. In some sense the force of buildings to learn and adapt is unstoppable. But prescriptions and proscriptions can impose hurdles in their learning.   
  
Stewart Brand in the book, [How Buildings Learn](https://www.goodreads.com/book/show/38310.How_Buildings_Learn), fleshes out the anatomy of a building. Buildings contain layers. The first layer is the chosen site, the second is its structure made of bricks, steel, and concrete. This structure has the third layer, its skin to protect it from the weather. The fourth layer, the layer for services contains plumbing, cabling, and other services a building may need. But what happens within the building in its fifth and sixth layers, or the layers that offer space, is always changing based on the user’s tastes and preferences. A building that can adapt itself well to the vision of its users, is a building that stays relevant for long.

[

![](https://spontaneousorder.in/wp-content/uploads/2025/02/Screenshot-2025-02-11-at-3.33.51 PM-1024x738.png)



](https://spontaneousorder.in/wp-content/uploads/2025/02/Screenshot-2025-02-11-at-3.33.51 PM-1024x738.png)

***The different layers of a building, conceived as Shearing Layers by Architect Frank Duffy.***

Successful buildings are spaces that provoke and promote orders of different kinds to emerge. Over the years, I have spotted three such instances around me. 

### **To house an office**  

My first brush with the Centre for Civil Society in 2013 led to a coat of confusion. Google maps guided me to arrive at a residential block in Hauz Khas. I had imagined an office building with a glass facade and a large staircase. But I spotted a beige coloured three-story building, that looked like someone’s residence, instead. Inside the building, the space plan of a home had evolved brilliantly into an office that had a reception, a waiting area, department offices, a large conference room, a lively pantry, senior management chambers, and sunlit balconies. The primary furniture that would form the innermost layer of the building had transformed to make way for desks, work chairs and bookshelves. The building evolved from a space for a family to an organisation of researchers.

[

![](https://substackcdn.com/image/fetch/$s_!BfVV!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff1d90452-a66b-49cd-9ad9-ae677fd4974d_1024x768.jpeg)



](https://substackcdn.com/image/fetch/$s_!BfVV!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff1d90452-a66b-49cd-9ad9-ae677fd4974d_1024x768.jpeg)

***A-69, the house plan that transformed into the offices of the Centre for Civil Society.***

A similar evolution of buildings is ongoing across many neighbourhoods of Delhi. Like in Hauz Khas, buildings in Greater Kailash have evolved to accept lawyers and their chambers. Where lawyers thrive, accountants do too. Doctor clinics aren’t too far. Buildings made to be living quarters learnt to become commercial offices. 

These buildings, known as builder floors in Delhi, also offer young founders to take advantage of cheaper rents, and nimble units that can become spaces for productive and collaborative work. Productive workers, in exchange, offer vibrancy to neighbourhoods from their constant footfalls and restless activity during breaks. In fact, I had the chance to meet a young founder of a branding agency who took the third level of the residential building to start his agency. The agency founder did not hesitate to make use of the kitchen to cook meals for his entire team.  
  
All of this became possible not through design, but through decisions made by house owners and firm owners renting the place. In some sense, buildings also question the role of architects who lock them into a certain use.  
  
While builder floors can learn to offer space to firms, bungalows of South Delhi elites can learn to become institutions of learning. 

Indian School of Public Policy (ISPP) has the advantage of being in the vicinity of some of India’s premier institutions like IIT, NIFT, JNU, and School of Planning and Architecture. Students pursuing a master’s in public policy have access to lecture theatres, a vibrant canteen, a badminton court, and other facilities they can expect from a university building. Except, the policy school isn’t based out of a university building. It is based out of a bungalow.

The campus challenges the notion of what could have been someone’s living quarters. Every room can be packed with several fifty students or so, with a space to conduct four parallel lectures across the policy school. The chances that the first architect designer and the original resident of the building would have ever thought the bungalow could change into a college campus are slim. But it did.

[

![](https://spontaneousorder.in/wp-content/uploads/2025/02/Screenshot-2025-02-11-at-3.50.58 PM-1024x577.png)



](https://spontaneousorder.in/wp-content/uploads/2025/02/Screenshot-2025-02-11-at-3.50.58 PM-1024x577.png)

***ISPP is a bungalow turned into a college campus.***

To be sure, buildings don’t have consciousness. Their users do. Their ingenuity can transform and the freedom to be able to do so shouldn’t ever have to be challenged. Unfortunately, this is not the norm.  

The city of Delhi is governed by several state agencies, and Delhi Development Authority (DDA) instituted under the central government is at the helm. DDA is also Delhi’s urban planning agency. It has the powers conferred on it by the Parliament of India to fix the use of an area in the city, and by extension the use of a building in any area, can be put to. Buildings in Delhi do not have the freedom to learn. The office of Centre for Civil Society and the ISPP campus could come into being only when the requisite permissions from the state aligned. In some instances that the buildings have changed their use could be an area in grey, and the conversion is an exception, not the norm, reserved for few organisations and purposes only.    

It’s worth questioning that when buildings do change their use, why do they always transform from residences into commercial spaces, but not the other way round? For instance, Qutub Institutional Area in South of Delhi is one large neighbourhood that is assigned a use for institutions only. In the neighbourhood are large commercial buildings that are on an excellent site for a person to want to stay in. Their structures are strong, and the building layer for services is similar to what would be for a traditional apartment in a city. But spaces within these buildings are abandoned and empty. Not because there aren’t enough institutions who seek commercial spaces in the city. It’s because institutions would rather be based in a neighbourhood with vibrancy than an institutional zone. Buildings in such areas are craving to learn. Any builder would take the opportunity of turning these buildings into affordable apartments. If they are turned into housing, thousands of persons who travel to work, can move into these units. But the law prohibits these buildings from learning and evolving. 

It’s futile to assign a building a use or to prohibit it from changing how it’s being used. The cost imposed is similar to what it would be for a person who is assigned an occupation, but could never change it. 

* * *

**About Saurabh Modi**

Saurabh participated in the Colloquium on the Dilemma of an Indian Liberal organised at the Centre for Civil Society on 26 May 2024. He is an urban policy researcher and Senior Associate with CCS Academy.

## Artificial Intelligence: How to Regulate What We Know So Little About?

Original: https://www.spontaneousorder.in/p/artificial-intelligence-how-to-regulate-what-we-know-so-little-about

Author: Spontaneous Order

Published: 2024-11-08T13:27:14.000Z

Topics: ai-regulation, india-policy, innovation-policy, regulatory-challenges

> Artificial Intelligence is the official hot topic. It’s the talk of the town, where everyone has a view but few truly understand how it functions, and what it can truly contribute outside of a well drafted LinkedIn post or hyper real images, limited by

**Summary:**

Artificial Intelligence promises efficiency and innovation through tools like self-driving cars and generative chatbots, but raises concerns over misinformation, job loss, plagiarism, biases, and trust erosion, prompting governments to regulate. The EU's Artificial Intelligence Act uses a risk-based approach with tiered compliance; the US offers a federal AI Bill of Rights blueprint alongside state privacy laws; the UK adopts a pro-innovation strategy with flexible guidelines via existing regulators. Regulating AI is challenging due to its unprecedented rapid integration, causing developer caution over misuse; its evolving, self-learning nature, complicating ex-ante scrutiny; and unclear liability for harms from autonomous decisions. For India, lacking dedicated AI rules, rushing into specific legislation risks stifling innovation amid uncertainties—creative destruction is essential. Instead, grant staggered discretion to sector-specific regulators (e.g., IT for deepfakes), balancing ethical usage, risks, and progress without a specialized AI policy, ensuring norms emerge from liability determinations.

**Key points:**

- AI's rapid evolution and self-learning make ex-ante regulation impractical, favoring flexible oversight.
- Use existing sector-specific regulators like IT for high-risk cases such as deepfakes, rather than new AI-specific laws.
- Adopt a pro-innovation approach like the UK's to manage risks without stifling creative destruction and progress.
- Determine liability norms for AI harms to guide future regulations, striking a balance between innovation and ethics in India.

**By Aakriti Parashar**

* * *

Artificial Intelligence is the official hot topic. It’s the talk of the town, where everyone has a view but few truly understand how it functions, and what it can truly contribute outside of a well drafted LinkedIn post or hyper real images, limited by just botched human faces, for now.  
  
AI is a far reaching phenomenon with consequences well beyond these reductive examples. Be it narrow AI like self driven cars, or generative AI like chatbots that constantly learn and build on information fed to them, AI tools can increase efficiency and propel innovation.  
  
**Should there be regulations for AI?**

Over the past year or so, Open AI’s ChatGPT has taken the world by storm. Everyone is using it to draft emails, write essays, help with homework, and sometimes even as an entity that can listen and offer life and medical advice! But the question remains – Are AI models reliable to take up these tasks? And does its unreliability call for strict regulations? The spread of misinformation, loss of jobs, creative plagiarism, erosion of public trust, and amplified biases from biased data are just some of the important concerns. For governments these are reasons enough to want to rush to regulate.

Many countries have already passed laws to take on the AI behemoth. The European Union has suggested a legislation called the [Artificial Intelligence Act](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A52021PC0206) that attempts to manage AI through a risk-based approach that increases compliance requirements depending on use case. The US government has taken a federal approach through a blueprint for an [AI Bill of Rights](https://www.whitehouse.gov/ostp/ai-bill-of-rights/), while also adopting state-level rules through privacy legislation and AI-related use cases. The UK government, however, has chosen a [“pro-innovation” strategy](https://www.gov.uk/government/consultations/ai-regulation-a-pro-innovation-approach-policy-proposals/outcome/a-pro-innovation-approach-to-ai-regulation-government-response) with a focus on broader guidelines instead of strict legislation. This approach offers flexibility with oversight from existing regulations and regulators with an AI-specific overlay.

**Why regulating AI is a challenge  
  
**Regulating AI is a mammoth task for three main reasons. First, AI’s rapid integration into technology has been unprecedented which has raised concerns among many software developers. As self-regulators they are still grappling with the uncertainty of misuse new software updates can cause. This caution is a response to the potential high risk from unintended consequences. 

A second challenge is its evolving nature. Generative AI systems and their advanced versions can constantly learn and build on information they are fed which in turn creates versions that may differ significantly from the initial product. This makes it difficult to scrutinise models ex-ante and difficult to pre-empt the next iteration. 

The third challenge is the question of liability. Imagine an AI model that makes a harmful decision or causes unintended damage—who should be held responsible? Lawyers and policymakers are struggling with this issue, as AI’s actions aren’t directly controlled by any one individual, once it’s deployed. Assigning accountability is tricky, especially when AI systems make complex, independent choices. Without clear lines of responsibility, it’s hard to decide who should be held accountable when something goes wrong.

**What can India do now?**

Given these reasons and other uncertainties around AI’s dynamic nature, rushing to regulate isn’t ideal. Although imposing stringent constraints might feel instinctive, especially given people’s reluctance toward rapid change, some creative destruction is essential when innovation and progress are at stake.

Does that mean we should give AI a free hand? Absolutely not. The vision for AI regulation should be to recognise its risks and find ways to manage them without stifling innovation. How liability gets determined in the case of harms caused will also set norms for regulations.

Allowing for staggered discretion to more general sector specific regulators, instead of a specialised AI policy, may be more helpful given the dynamic nature of AI. For example, in extreme cases such as deepfakes resulting in child pornography or other harmful consequences, regulations for IT sector and tech platforms can do more than AI specific legislations.

At present, India does not have a dedicated regulation for AI. A good regulatory framework for us would be one that strikes a balance between driving innovation and ethical usage, while anticipating unintended consequences. How India governs AI will matter and it’s important that we don’t lose sight of the forest for trees.

* * *

**About Aakriti Parashar**

Aakriti Parashar is an aspiring public policy enthusiast and writer, currently working as a Junior Associate for the Policy Training and Outreach Department at Centre for Civil Society. A 2021 graduate from the University of Delhi, she has led various social entrepreneurial teams and worked as a Consultant for the Delhi Government. Aakriti has a keen interest in education policy and research. Some of her published articles include India’s Daughter – a commentary on women safety in India; and a number of published works for Her Campus Media.

## Tackling the Stubble Burning Problem in North India: A Three-pronged Approach

Original: https://www.spontaneousorder.in/p/taking-a-principled-view-can-help-to-tackle-stubble-burning

Author: Spontaneous Order

Published: 2024-10-24T12:08:21.000Z

Topics: stubble-burning, agriculture, air-pollution, market-incentives

> Every year, October brings with it a cloud of smog which engulfs the national capital territory (NCT) and its neighbouring states. Cases of asthma, breathing difficulty and cardiovascular diseases in Delhi NCR, Punjab, Haryana, and Uttar Pradesh (UP) in..

**Summary:**

Stubble burning by farmers in Punjab, Haryana, and Uttar Pradesh contributes significantly to PM2.5 smog in North India, pushing Delhi NCR's AQI over 400 and exacerbating respiratory and cardiovascular diseases. Farmers opt for this quickest, cheapest method to clear paddy residue for the next crop, despite health externalities, as alternatives fail due to high costs and logistics: seeder machines are expensive and hard to operate even on rental (per CEEW report); baling for fodder or power plants lacks infrastructure and revenue incentives (limited Haryana-UP success); Pusa bio-decomposer is too slow for timely sowing. Bans and fines alienate debt-burdened, often tenant farmers. From a classical-liberal lens, the author urges a three-pronged approach: disseminate information via government and civil society on viable options; foster coordination across central, state, and local (gram panchayat) levels; build infrastructure for transport, storage, and distribution to transform stubble into valuable industrial input, adjusting costs and incentives. With agriculture at 18.3% of India's GDP, long-term technological innovation in a supportive environment trumps regulations for mass farmer adoption.

**Key points:**

- Stubble burning persists due to economic barriers in alternatives like costly seeder machines, inadequate baling infrastructure, and slow Pusa bio-decomposers.
- Disseminate information through government and civil society to inform farmers of non-burning options and their benefits.
- Treat the issue as a coordination problem requiring collaboration between central, state, and local governments.
- Develop infrastructure for stubble processing to make it a revenue-generating byproduct rather than waste.
- Prioritize technological R&D and market incentives over bans and fines for sustainable solutions.

**By Rubina Malhotra**

* * *

Every year, October brings with it a cloud of smog which engulfs the national capital territory (NCT) and its neighbouring states. Cases of asthma, breathing difficulty and cardiovascular diseases in Delhi NCR, Punjab, Haryana, and Uttar Pradesh (UP) increase around this time as the [AQI crosses the 400 mark](https://indianexpress.com/article/cities/delhi/delhi-aqi-crosses-400-mark-centre-holds-off-stricter-curbs-9125952/). The practice of stubble, or *parali* as known among farmers in north India, burning is a major contributor of PM2.5 in the smog which covers most of north India in winters.  
  
For these farmers, the quickest and the most economical method to get rid of paddy residue and prepare the land for the next crop is to set fire to the straw. Unfortunately, this action imposes a tremendous cost on the health of the citizens in the northern region of the country. Over the last few years, various  alternatives to stubble burning have been proposed but none of them have yielded the desired adoption levels and results.  
  
One approach was to encourage farmers to use seeder machines which can extract the stubble and sow the seed at the same time. The extracted stubble is deposited back to the soil so that it can be converted into mulch and replenish the nutrients in the soil. However, for most farmers these machines are quite expensive and even if they get around to buying it, the technical knowledge to operate them is an additional burden for the farmer as they need to invest their time and funds before they can operate the seeder machines. According to a [report by CEEW](https://www.ceew.in/blogs/ceew-explains-why-punjab-farmers-burn-stubble-and-are-averse-to-using-seeder-machines), this could be one of the reasons why in Punjab even rental models to make seeder machines affordable aren’t working as  the logistics of making these machines available to the farmers at a large scale has been tough to crack.  
  
Another approach is to collect the stubble to turn it into bales of straw which can be used as raw materials for cattle fodder, or as fuel to run thermal power plants. Unfortunately, farmers still don’t see stubble as a potential by-product which can help them earn additional revenue. There has been limited success for some farms in [Haryana which are supplying stubble as animal fodder](https://www.thehindubusinessline.com/news/national/haryana-adopting-solutions-to-stubble-burning/article67518081.ece) to farms in UP but with limited success. The lack of infrastructure and the high cost of operations is one reason why farmers are reluctant to adopt this practice. 

In 2022, the Indian Council of Agricultural Research made a breakthrough in solving the problem of [disposing off paddy residue through the Pusa bio-decomposer](https://acspublisher.com/journals/index.php/ijee/article/view/8747/7678) – a fungi-based formula which can decompose stubble into the soil. Unfortunately, the decomposition process is slow which delays the preparation of the soil for the next crop cycle. As a result, even this is not a viable solution for stubble burning. In order to find a solution to the *parali* problem it is important to understand the farmers’ perspective. Bans, hefty fines, and imprisonments can alienate farmers who are often in debt. Many of them don’t even own the land they cultivate the crops on.Therefore, a breakthrough in solving this problem can arise if we adopt a three-pronged approach to solve the problem. 

The first part is to see how disseminating more information can incentivise the farmers. Both government agencies and civil society have a role to play in disseminating information to help farmers understand the options which are available to the farmers in place of stubble burning. Farmers need to be informed about seeder machines, Pusa-decomposers and the possibility that that stubble collected in bales can be used in animal husbandry, renewable energy and other sectors.   

The second and important approach is to understand the issue as a coordination problem. Any attempt to solve this problem needs a three-way collaboration between all levels of governance – central, state, and local governments at the gram panchayat level.  

The third step is to identify barriers in the development of infrastructural facilities such as enhanced transport, storage, and distribution facilities to process agricultural produce. Stubble is a waste only when it’s not feasible to process it and supply it as raw material to various industries. If the infrastructure exists, costs and incentives can be re-adjusted to solve the problem.     
  
Agriculture [contributes 18.3% to India’s GDP](https://www.pib.gov.in/PressReleasePage.aspx?PRID=1909213); therefore it is important to find  long-term solutions to eliminate stubble burning instead of imposing regulations or finding quick fixes for the problem. Technological innovation and research and development can play an integral role in developing cost-effective solutions; however, it is important to ensure that the researchers and innovators have the right environment and resources to develop solutions which can convince the farmers for mass adoption of these methods.

* * *

**About Rubina Malhotra**

Rubina Malhotra is a marketing communications professional. She participated in the iPolicy for Young Leaders programme with CCS in January 2024.

## Taking a Close Look at Sand Mining in Bhojpur, Bihar

Original: https://www.spontaneousorder.in/p/taking-a-close-look-at-sand-mining-in-bhojpur-bihar

Author: Spontaneous Order

Published: 2024-10-17T13:03:25.000Z

Topics: sand-mining, illegal-economy, political-corruption, environmental-degradation, bihar-development

> Sand mined out of earth is the main component for making bricks that is the fundamental material for construction. UNEP in its report on Sand and Sustainability finds the global demand for sand is at 50 billion tonnes per year. Over the last two decades..

**Summary:**

Bhojpur district in Bihar, home to 27 lakh people and abundant sand resources, ranks among India's 250 most backward districts due to rampant illegal sand mining dominated by a balu mafia-politician nexus. Globally, sand demand stands at 50 billion tonnes annually, with mining tripling over two decades, yet Bihar extracts from 600 Ganga ghats, only 160 legally auctioned at Rs 15-20 crore bids. In Bhojpur's 14 active ghats, mafia operations flout rules, overload trucks, and generate massive revenues funneled to politicians as rents—enabling some to contest elections—while only two of Tarari block's 19 panchayats near Son River see infrastructure gains from mining involvement. This capture diverts public resource revenues, exacerbates losses from alcohol prohibition, and fuels mafia expansion into bootlegging and drugs. Environmentally, groundwater depletes (borewells from 60 to 150-200 feet), and indiscriminate mining erodes riverbanks, altering courses from Koelwar to Rohtas. From a classical-liberal lens, this resource curse stems from regulatory failures enabling corruption; breaking the nexus requires holistic reforms like alternative livelihoods, infrastructure, education, and healthcare to unlock Bhojpur's potential before environmental and economic sands run out.

**Key points:**

- Illegal sand mining controls 440 of Bihar's 600 Ganga ghats via mafia-MLA nexus, capturing revenues exceeding extraction costs and funding political rents.
- Bhojpur's 14 ghats yield uneven local benefits, improving only 2/19 Tarari panchayats near mining sites amid district-wide backwardness.
- Mafia operations cause groundwater depletion to 150-200 feet and river course changes through bank erosion.
- Reforms must break the politician-mafia nexus and provide alternative livelihoods, infrastructure, education, and healthcare.

**By Akanksha Bassi**

* * *

Sand mined out of earth is the main component for making bricks that is the fundamental material for construction. UNEP in its report on [Sand and Sustainability](https://wedocs.unep.org/bitstream/handle/20.500.11822/38362/sand_sustainability.pdf?sequence=3&isAllowed=y) finds the global demand for sand is at 50 billion tonnes per year. Over the last two decades, the mining of sand has tripled around the world. 

Bhojpur district in Bihar is an important part of our country. It is home to a population of 27 lakh persons, many of whom have close ties to the mining of sand. It’s worth asking, why is Bhojpur district, gifted with abundance of sand, also among the [250 most backward districts](https://web.archive.org/web/20120405033402/http://www.nird.org.in/brgf/doc/brgf_BackgroundNote.pdf) of India.

How sand is mined, and understanding the systems of exchanges behind it can help find answers to this question on why Bhojpur isn’t able to reap the benefits of its natural resource. In the middle of it all there is also a lesser known story of ecological destruction taking place of Bihar’s rivers and lakes.    
  
The mining of sand in India is largely an illegal activity. In the eyes of law, sand is a minor mineral ([Section 3(e) of MMDR Act, 1957](https://ibm.gov.in/writereaddata/files/07102014115602MMDR%20Act%201957_10052012.pdf)) and to extract or handle it in any way requires a licence. 

Rights to mine balu ghats are allocated through a bidding process where prices start at Rs 15 to 20 crore for each licence. There is a fixed time allocated for the right to mine these ghats.  
  
In Bihar sand is mined out of 600 *ghats* alongside a 450 km stretch of Ganga river. Out of this only 160 of them are legitimate in the eyes of the state. Others are organised and operated by the nexus of *balu* mafia and local MLAs. Balu mafia violate all norms and rules established by the government and encroach way beyond the area allocated to them. Bhojpur district in South Bihar, is said to have 14 such active ghats. These ghats contain mines with large machines to dig, trucks to move the sand, and labourers who work round the clock under the strict supervision of balu mafia. 

Revenue generated by the sand extracting mafia is way more than the cost they incur for its extraction. A vast number of trucks loaded with *balu* can be seen lining stretches of 5 to 6 km in length on most main roads. These trucks alone violate government regulations on weight limits by carrying overloaded quantities of sand.  
  
A part of this high revenue is captured by politicians as rents for their support. Politicians in this region are known to have made huge earnings worth crores of rupees within months. In some instances the mafia themselves have gone on to become politicians to contest in elections. It’s not unusual to see why in Tarari block of Bhojpur District, only two out of its 19 panchayats have better infrastructure compared to the block’s remaining panchayats. These two panchayats are Himadpur and Bihta  that have benefited because they are both sites located near the coast of the Son River, where about 80% of the population is directly or indirectly involved in mining sand. 

This potential gain and corruption facilitating it makes the nexus strong and difficult to break. Another natural trajectory for the sand mafia is to expand the scope of their operations to include other illegal activities like moving bootlegged liquor, and synthetic drugs that are banned in Bihar.

This is all at a huge cost to the citizens of Bhojpur and Bihar, for whom a large chunk of revenue owed to the state from the mining of sand as a publicly owned natural resource, is lost. This loss is further added to by the loss in revenue from taxing the production and sale of alcohol, given its prohibition in Bihar.     
  
In the middle of it all, there is also a huge cost borne by the environment. A fast depletion of groundwater levels is taking place, where local residents report borewells that offered ground water at 60 feet earlier now have to dig deeper  to 150 to 200 feet to find water. 

The bigger threat to the environment is from the river changing its natural course due to heavy machinery and indiscriminate mining eroding its banks across the entire river stretch from Koelwar in Bhojpur district to Rohtas in south Bihar.  
  
Tackling the issue of illegal sand mining in Bihar requires more than just legal enforcement. While the nexus between politicians and illegal sand mining must be broken, there is also a larger holistic approach needed to address the underlying factors that drive people into this dangerous trade. The list of reforms must include creating alternative livelihood opportunities, improving infrastructure, and investing in education, and healthcare.

The time to act is now, before the sands of time run out on Bhojpur and its people.

* * *

**About Akanksha Bassi**

Akanksha Bassi is an MSc. graduate from Gokhale Institute of Politics and Economics, Pune. She participated in the Advanced Liberty & Society Seminar organised by CCS in September 2024.

## Liberalism Needs India’s Success: Learnings from Atul Kohli’s book on State-Directed Development

Original: https://www.spontaneousorder.in/p/liberalism-needs-indias-success-learnings-from-atul-kohlis-book-on-state-directed-development

Author: Spontaneous Order

Published: 2024-10-09T15:02:10.000Z

Topics: liberal-democracy, economic-development, indian-reforms, state-types

> India shows democracy and economic growth can co-exist.

**Summary:**

Atul Kohli’s 'State-Directed Development' categorizes states into neo-patrimonial (e.g., Nigeria, non-modern and anti-developmental), cohesive-capitalist (e.g., South Korea, Brazil; centralized elite-state alliances driving rapid growth but marked by repression and labeled 'neo-fascist'), and fragmented-multiclass (e.g., India; dispersed authority balancing diverse interests in a liberal democratic framework). While cohesive-capitalist states like South Korea achieved the East Asian miracle and Bangladesh briefly surpassed India’s GDP per capita under semi-dictatorial rule, they compromise freedoms. India’s 'slow and steady' path, critiqued under Nehru’s command economics and Indira Gandhi’s authoritarian Emergency, pivoted with P.V. Narasimha Rao’s 1991 liberalization reforms amid crisis, proving liberal democracy’s resilience under coalition governance. Despite risks of shifting toward chaebol-like corporate-state ties, the 2024 elections reinforced plurality over promised faster growth. From a classical-liberal view, India exemplifies coexistence of economic progress and liberal principles; its continued success without authoritarianism is crucial to validate liberalism as a viable path for underdeveloped nations against neo-fascist alternatives.

**Key points:**

- Cohesive-capitalist states like South Korea achieve rapid development through centralized elite-state cooperation but often involve repression and nationalism.
- India’s fragmented-multiclass state structure enables liberal democracy by balancing diverse interests, yielding slower but sustainable growth.
- P.V. Narasimha Rao’s 1991 liberalization reforms under a coalition government rescued India from economic collapse, highlighting liberal democracy’s potential.
- India must sustain economic success while preserving liberal principles to demonstrate liberalism’s superiority over authoritarian development models for the Global South.

**By Pavit Singh**

* * *

Capitalism first emerged in England. The pre-modern form of capitalism shared many features with capitalism in its contemporary form and the capitalist economic system arose largely without intervention from the state. Capitalism in fact was a revolutionary force that challenged the entrenched feudal order. Naturally, its staunchest opponents became reactionary nobility, who ended up losing their power and stronghold under feudalism. Capitalism evolved spontaneously, except for some states like Prussia and Japan where its emergence was controlled to be slow and deliberate.    
  
Atul Kohli’s book [State-Directed Development](https://www.cambridge.org/core/books/statedirected-development/FF2DE2441F160254D72E3815D0FC750A) has an interesting perspective on the role of state in steering capitalism. Kohli is a political scientist and professor at Princeton University, known for his research on political economy and development, particularly on the global South. The book can help understand the relationship between India’s development trajectory and its political system. 

The author categorises state structures into three main types: Neo-patrimonial, Cohesive-capitalist, and Fragmented-multiclass.  
  
Nigeria for instance, is an example of a neo-patrimonial state, where state resources are treated as personal property by leaders and bureaucrats. This structure in the author’s view is “non-modern” and unsuited for development.  
  
Examples of the cohesive-capitalist state can be seen in South Korea and Brazil. They have features of a centralised authority working with the elites to pursue capitalist goals. Though capitalist, these states are often characterised by repression, nationalism, and militarism. The author labels them “neo-fascist.” The state in these nations plays a leading role, with elites in a secondary but cooperative position.

A fragmented-multiclass state looks like India, where authority is more dispersed. Governments in these states maintain power through diverse alliances and are accountable to the people. The author finds such a state structure to be closer to a liberal democracy, where leaders must balance competing interests.  
  
The nature of the state that evolved in every nation has deep ties to its history. Nations that witnessed an early evolution and adaptation of capitalism, went on to colonise other states that did not transform into capitalist societies. After World War II, developed capitalist nations remained far ahead of newly independent underdeveloped nations despite the destruction they faced in the wars.  
  
Underdeveloped nations after getting rid of colonisation, faced an immense task of catching up with developed economies and were under the pressure to catch up, rapidly. Enlightened leaders of these nations recognized the need for quick economic growth. Unfortunately, they just could not “let things happen”, thus leading to state-led development.  
Case studies in the book suggest that cohesive-capitalist states are more successful in achieving rapid development. The East Asian miracle, where unprecedented growth occurred in countries like South Korea, illustrates this phenomena. China, though classified as a cohesive-communist state in the book, exhibits the same characteristics of a cohesive-capitalist state. In a similar sense under the semi-dictatorial rule of Sheikh Hasina, Bangladesh also achieved its fastest growth, briefly surpassing India’s GDP per capita. This suggests that more centralised, cohesive models might yield faster results. But the author accepts that such an argument may appear to endorse neo-fascism, but he proposes states to take the path of liberal democracy despite its slower decision-making processes.  
  
The chapter on India is titled “Slow and Steady,” and it reflects the importance of this gradual growth. The author’s analysis of India’s performance is fair. Jawaharlal Nehru, who was influenced by the prevailing ideas of command and control economics and had a suspicion for western capitalism, made decisions that can be seen to be prudent for his time. Indira Gandhi’s tenure, however, is largely seen as a disaster, especially during the Emergency years when India steered towards authoritarianism. The book helps the reader answer an important inquiry: Does India’s slower pace of growth reflect the failure of liberalism? 

In the late 1980s, with multiple insurgencies, religious polarisation, and a bankrupt economy, many believed India was on the verge of collapse. Yet, under a septuagenarian prime minister, P.V. Narasimha Rao, who had little mass appeal, India managed to turn things around. Rao managed to change India’s course of history under a coalition government by carrying out liberalisation reforms in 1991. This speaks to the importance of a persistent order of liberal democracy.   
It’s also possible for the liberal path to reverse. Economist Viral Acahrya notes how the Indian corporate structure has started resembling the state-elite coalition of Korean corporates called chaebols. India, it seems, is shifting towards a cohesive-capitalist society. 

The General elections of 2024 saw the loyalists of Gandhi family and other caste-based groups form an alliance to form a stronger opposition in the Parliament than in the recent past. An optimistic view here may see that liberal democracy triumphed once again, rejecting repression in favour of plurality, even at the cost of growth as promised by the ruling party.  
  
India is an example of a country where economic growth and liberal democracy coexist. For liberalism to be seen as a viable alternative to neo-fascism in the underdeveloped world, India’s economic success must continue without succumbing to authoritarianism. India’s journey shows that development is possible without sacrificing liberal principles.

* * *

**About Pavit Singh**

Pavit is currently pursuing his Master's in Development Studies from Tata Institute of Social Sciences, Mumbai. He is also an economics graduate from Hansraj College, University of Delhi. He participated in the Colloquium on the Dilemma of an Indian Liberal organised at the Centre for Civil Society in May 2024.

## Spotting “Governance of the Commons” in How Car Parking Spots are Governed in Delhi

Original: https://www.spontaneousorder.in/p/spotting-governance-of-the-commons-in-how-car-parking-spots-are-governed-in-delhi

Author: Spontaneous Order

Published: 2024-09-14T13:07:49.000Z

Topics: governance-of-commons, urban-parking, spontaneous-order, elinor-ostrom

> Delhi has huge car ownership. A news story found that if Delhi’s cars were stacked bumper-to-bumper, they would reach all the way to Chile. Parking these cars is a challenge. Delhi’s urban design, and its transport policy over the years has resulted i

**Summary:**

Delhi faces acute car parking shortages due to high ownership rates—enough cars to stretch bumper-to-bumper to Chile—exacerbated by poor public transit and walkability that incentivize private vehicles. In neighborhoods like A Block Hauz Khas and Vasant Kunj, residents have spontaneously developed effective governance systems for street parking, embodying Elinor Ostrom's principles from 'Governing the Commons' as summarized by Derek Wall. Four key principles emerge: clearly defined boundaries via gated metal doors limiting access to residents; rules tailored to local contexts, varying by neighborhood like Sector D Pocket 4 Vasant Kunj versus gated societies; effective monitoring through signages threatening tire deflation and house-number labels; and low-cost conflict resolution via WhatsApp groups for quick resolutions. These polycentric, bottom-up solutions demonstrate communities' capacity to manage common-pool resources without state imposition. The author, from a classical-liberal perspective, urges policymakers to observe and build upon such emergent orders rather than preempt them with municipal or state interventions, highlighting their diversity and success across global neighborhoods.

**Key points:**

- Delhi neighborhoods self-govern street parking using Ostrom's principles: defined boundaries, local-fit rules, monitoring, and low-cost conflict resolution.
- Gated doors and signages like 'tyres will be deflated' enforce resident-only access and norms.
- WhatsApp groups enable rapid, low-cost resolution of parking disputes among residents.
- Classical-liberal policy should prioritize observing and improving spontaneous parking orders over state takeovers.

**By Saurabh Modi**

* * *

Delhi has huge car ownership. A [news story](https://www.livemint.com/news/india/parking-full-are-cars-running-out-of-space-11684259682641.html) found that if Delhi’s cars were stacked bumper-to-bumper, they would reach all the way to Chile. Parking these cars is a challenge. Delhi’s urban design, and its transport policy over the years has resulted in a situation that incentivises people to own cars. Probably the only reason to not own a car, is not being able to afford one. Under-connected public transit, and poor walkability make owning private transport  a rational response. As one rises on the income ladder, aspirations rise too, and cars join the household. Unfortunately, car ownership imposes a cost on the society at large. Cars take space both on and off the road. Allocating space and governing who gets to park where is a cause for conflict, also captured in a Tamil movie, [Car Parking](https://en.wikipedia.org/wiki/Parking_\(2023_film\)#:~:text=Parking%20was%20theatrically%20released%20on,and%20became%20a%20commercial%20success.).     
  
It’s remarkable to observe that the problem has many solutions. All unique to each neighbourhood and their constraints. These solutions and how they emerge are illustrations to the seminal work on Governing the Commons by economist Elinor Ostrom. At least four principles laid down in her work emerged in front of my eyes while I was walking to  the office of the Centre of Civil Society in A Block, Hauz Khas.  
  
The picture above is an ingenious method used by a car owner in the neighbourhood to reserve a parking spot. At first sight it may come across as a hostile claim on a parking spot, but when layers are peeled it reveals a governing system for car parking that has evolved in the neighbourhood.  
  
Derek Wall in his book, “[Elinor Ostrom’s Rules for Radicals](https://search.worldcat.org/title/1006584466)”, summarises eight key principles that illustrate and determine the success of common pool resources. The space between the paved road and the buildings on the block is owned by no specific person. But at the same time, it’s not a free-for-all for anyone to park their car. There are many unsaid rules that evolve over repeated interactions between the residents of the community. There are four main principles worth observing, in this instance.  
  
First, as Derek Wall points out in Ostrom’s work, for commons to be sustainable they need to have clearly defined boundaries. That A Block parking spots are for residents of the society alone, is amply conveyed by gated metal doors at several entry and exit points in the block. This is true for many other neighbourhoods like Chittaranjan Park and Greater Kailash.

Second, the rules that emerge fit local circumstances. What works in one locality may not work in another. Gated societies have their own features. Sector D, Pocket 4, in Vasant Kunj has its own layouts, design, and residents, and it’s visible for me as a resident that parking norms are different between the two neighbourhoods. The contrast is wider when compared to a locality in a different city like Mumbai, too.   
  
Third, effective monitoring is important for parking norms and conventions to stay in place. There are elements of policing that help too. Signages that say “tyres will be deflated” are not uncommon at the parking spots claimed by residents. There are clear boundaries established, in some instances by labelling the spot with the resident’s house number.

Fourth, there are means to resolve conflicts in a low-cost way. Residents often create WhatsApp groups where a car parked wrong, or an alien car, is identified and asked to be removed. There may be unpleasant exchanges for repeat offenders, but it all mostly stays within the realm of instant texts. 

While there are many other features that one can identify in how societies govern their parking spots, the central insight is their ability to do so. Before a municipality takes charge, or laws are dictated and enforced by state agencies, being visible and open to this governance is crucial. What is true for Hauz Khas and Vasant Kunj is true for most other neighbourhoods across the world. These gradual achievements vary in their character and diversity of solutions, but they exist and are worthy of admiration. Observing how such orders emerge in our everyday lives is important and can teach us a lot. It can at least check an intuition to propose interventions and plant ideas to interact and improve the order instead.

* * *

**About Saurabh Modi**

Saurabh participated in the Colloquium on the Dilemma of an Indian Liberal organised at the Centre for Civil Society on 26 May 2024. He is an urban policy researcher and Senior Associate with CCS Academy.

## Anti-cheating Act: Is Legislation Alone Enough?

Original: https://www.spontaneousorder.in/p/anti-cheating-act-is-legislation-alone-enough

Author: Spontaneous Order

Published: 2024-09-06T10:15:07.000Z

Topics: exam-cheating, education-reform, anti-corruption, indian-education

> Education for most individuals is a ticket to a brighter future. The recent cheating scandals disrupt such a possibility. When exams get rigged and cheats prosper, it’s not just about losing fairness. It’s also about losing hope for a person’s prosp

**Summary:**

Swati Phogat argues that India's Anti-Cheating Act, criminalizing exam malpractices, will not resolve cheating scandals despite building on prior laws, as historical measures have repeatedly failed. Laws like the Bihar Conduct of Examination Act 1981, Uttar Pradesh Anti-Copying Act 1992, Prevention of Malpractices in Examinations Act 1987, and the National Testing Agency (NTA) established in 2017—including its technological solutions—have not curbed widespread cheating, particularly in state-level and rural exams. Root causes include corruption within education, law enforcement, and administration; political influence protecting cheating networks; inadequate resources and enforcement capacity; and intense societal pressures from high-stakes exams amid limited quality education access. These factors make stringent laws reactive, punishing the caught without preventing incentives to cheat. From a classical-liberal perspective, legislation alone falls short; a multifaceted approach demands deeper structural reforms to enhance education quality, dismantle corruption, and address underlying social and economic drivers, ensuring laws do not remain symbolic amid systemic failures.

**Key points:**

- Past anti-cheating laws, including Bihar's 1981 Act, Uttar Pradesh's 1992 Act, the 1987 national Act, and NTA's 2017 tech measures, have failed to prevent ongoing scandals due to poor implementation.
- Corruption, political patronage, and resource shortages—rampant in rural areas—undermine enforcement of anti-cheating legislation.
- Societal pressures from high-stakes exams and poor education access drive cheating incentives that laws do not address.
- Structural reforms improving education quality and combating corruption are essential beyond reactive legislation.

**By Swati Phogat**

* * *

Education for most individuals is a ticket to a brighter future. The recent cheating scandals disrupt such a possibility. When exams get rigged and cheats prosper, it’s not just about losing fairness. It’s also about losing hope for a person’s prospects and trust and integrity of the entire system. To combat this slide, the Indian government has introduced stringent measures, drafted into what is now popularly known as the Anti-Cheating Act. But will this legislation be a game changer for education and employment opportunities in India?

The law criminalises cheating. But it’s not new for cheating in examinations to be a criminal offence in India. Laws that have already existed, categorise such activities under fraud and malpractice. Over the years, many state legislatures have passed several bills to prevent cheating and to maintain the sanctity of exams. However, cheating scandals continue. This raises an important question on the effectiveness of these laws. Can anti-cheating legislation alone resolve the issue, or is there a role for deeper, structural reforms in education? 

A review of the history of anti-cheating legislations does not instil confidence that these laws have worked. Efforts as early as the Bihar Conduct of Examination Act 1981 and the Uttar Pradesh Anti-Copying Act of 1992 have sweeping provisions like empowering examination bodies to cancel exams in the event of mass cheating, and to ban students from future examinations. But widespread cheating in these states has continued. 

The reality is that these laws, even though stringent, face resistance. They are often hindered by corruption, political influence, and inadequate enforcement. Even national level measures like the Prevention of Malpractices in Examinations Act of 1987 and the establishment of the National Testing Agency (NTA) in 2017 have failed to solve the problem. Technological solutions introduced by the NTA too have limited impact, especially on state-level exams, where cheating syndicates find ways to identify and exploit loopholes. The many laws on cheating continue to struggle with implementation, particularly in rural areas where resources are scarce and local corruption is rampant.  
  
Political influence plays an important role in cheating on examinations. In some instances, cheating networks have protection from local political figures who have a vested interest in maintaining their patronage and securing support from their political party workers and constituents. Corruption is another root cause. Within the educational system, law enforcement, and local administration operate on bribery and coercion to undermine the effectiveness of anti-cheating laws. The lack of resources, capacity, and infrastructure in many states weakens law enforcement further. 

Societal pressure on students to succeed, especially in high-stakes exams, also drives many to cheat. Especially in rural areas where access to quality education is limited, and cheating seems like the only way to a better life. 

It’s important to note that legislation alone is insufficient to combat cheating in India’s education system. While necessary, these laws are reactive, not preventive. They punish those who are caught without addressing the root cause behind cheating.  
  
To solve the problem, truly, a multifaceted approach is required. This approach has to be broader. The way out of cheating is in the direction of carrying out reforms that improve the quality of education and address corruption within the system. 

While anti-cheating laws may be an important step in maintaining the integrity of India’s education system, they alone are not the answer. If the underlying social, economic, and structural issues that drive cheating are not addressed, laws will continue to fall short.   
  
Also read: [Anti-cheating Act Does Not Reduce the Incentive to Cheat in Exams](https://spontaneousorder.in/anti-cheating-act-does-not-reduce-the-incentive-to-cheat-in-exams/)

* * *

**About Swati Phogat**

Swati is a student of Political Science at University of Delhi. She is on a mission to explore complexities of political processes in the real world and find out how public policy can help. She is also a Researching Reality Scholar 2024 with the Centre for Civil Society.

## The Desert Bloom: Rajkumari Ratnavati Girls School

Original: https://www.spontaneousorder.in/p/the-desert-bloom-rajkumari-ratnavati-girls-school

Author: Spontaneous Order

Published: 2024-08-30T11:44:12.000Z

Topics: private-education, girls-education, sustainable-architecture, rajasthan

> There’s a school in the heart of Jaisalmer that is nothing short of a bloom in the middle of wilderness. Rajkumari Ratnavati Girls School in Kanoi Village of Jaisalmer City in Rajasthan is a fine example of what private institutions can create for educa

**Summary:**

In Rajasthan, with the lowest female literacy rate in India at 57.6%, the Rajkumari Ratnavati Girls School in Jaisalmer's Kanoi Village exemplifies what private institutions can achieve in underserved areas. Established by CITTA India, this English-medium school affiliated with the Rajasthan Board serves girls from impoverished artisan communities in the Thar Desert. Its architecture, designed by Diana Kellogg Architects with local collaborators, uses Jaisalmeri Yellow Stone for natural cooling, incorporates jaaliyaan perforated walls for airflow and sand filtration, lime-plastered ceilings, ceramic tile roof cuttings to reflect sunlight, and solar panels for sustainable energy—no air conditioners needed. Classrooms feature hand-painted designs to engage young learners. The school uniform, philanthropically designed by Sabyasachi Mukherjee, integrates traditional Ajrakh woodblock prints by local artisans, blending comfort, culture, and identity. From a classical-liberal viewpoint, this private initiative transforms a harsh desert environment into an inviting educational haven, fostering empowered women and demonstrating how thoughtful private design conquers odds where public efforts lag, opening new life trajectories for marginalized girls.

**Key points:**

- Rajasthan's female literacy rate stands at 57.6%, the lowest in India, highlighting the need for innovative private education solutions.
- The school's passive cooling architecture uses Jaisalmeri Yellow Stone, jaaliyaan walls, lime plaster, and solar power to create an AC-free learning environment suited to desert heat.
- Custom Ajrakh-printed uniforms by Sabyasachi Mukherjee support local artisans while providing comfortable, culturally resonant attire for students.
- CITTA India's private model delivers quality English-medium education to poor artisan girls, proving private institutions can build resilient educational strongholds in arid, low-literacy regions.

**By Paarul Rai**

* * *

There’s a school in the heart of Jaisalmer that is nothing short of a bloom in the middle of wilderness. [Rajkumari Ratnavati Girls School](https://www.youtube.com/watch?v=oo3Qa40_JqU) in Kanoi Village of Jaisalmer City in Rajasthan is a fine example of what private institutions can create for education in India.  
  
At 57.6%, Rajasthan has the lowest [literacy rate for women](https://timesofindia.indiatimes.com/city/jaipur/rajasthan-is-the-worst-performer-in-literacy-of-girls-nso-report/articleshow/78006119.cms) among all Indian states. The school established by [CITTA India](https://cittaindia.org/), is a step ahead at offering not just education, but quality and mindful education. 

This school is in the middle of a desert, because that’s where its students are. It’s much more than a school but an important institution in the lives of many children who live in the area.   
  
The school caters to girl students from local communities of artisans, some of whom live on the margins of poverty. It is an English medium school affiliated to Rajasthan Board of Secondary Education. But it goes above and beyond to offer students a uniquely designed building that caters to the hot and arid weather of Jaisalmer. Their school uniform too is a successful blend of thought, comfort, and traditions.   
  
The school’s architectural design was led by the architecture firm [Diana Kellogg Architects](https://www.dkarchitects.com/) in collaboration with local architects of Rajasthan. The school building is built all with the *Jaisalmeri Yellow Stone* which is often referred to as Sandstone. The use of this building material helps to keep the building cool during high temperatures experienced in Rajasthan. To protect from heat, engineering the flow of air in the buildings is crucial. 

The school building has a boxed-window pattern called *“jaaliyaan”* internalised into boundary walls. These windows allow maximum air exchange and filter out the sand mixed in the air. The school building has no air conditioners. It’s because of its unique design that has many cooling factors integrated into its building form. 

Another such example is the roof-top. It has cuttings of ceramic tiles to reflect harsh sunlight. The ceilings are plastered with lime, not concrete. A cool school building has an important role to play in being inviting for students to spend longer hours to concentrate on learning. The building’s electricity needs are met sustainably by solar panels installed to generate renewable energy.  
  
Classrooms within, are hand-painted. Their walls have different patterns and designs that make the learning environment for young learners exciting. The contrast of the usual tall, and large school buildings battling heat waves is very real when compared to this school in Kanoi. The school building is a home, a shelter, a statement of strength, creativity, and resistance. All in the middle of the desert.

Apart from the classroom, student clothing also has an important role to play in quality education. The uniform is an instance of philanthropy done through design by [Sabyasachi Mukherjee](https://www.vogue.in/fashion/content/rajkumari-ratnavati-girls-school-jaisalmer-sabyasachi-mukherjee-school-uniforms).  
  
Girls in this school do not just wear a uniform, but don a beautifully handcrafted creation of local Rajasthani artisans. *Ajrakh,* which is a unique form of woodblock print, has originated from the Sindh region. It is known for its geometric shapes, in a colour palette of crimson and indigo. This art form is used in *cummerbunds* for men and *dupattas* for women. Every girl student who enters the school oval doors, flaunts *ajrakhs*. 

[

![](https://spontaneousorder.in/wp-content/uploads/2024/08/image.jpeg)



](https://spontaneousorder.in/wp-content/uploads/2024/08/image.jpeg)

Image Source: [Sabyasachi](https://www.instagram.com/p/CGTo735BmFP/)   
  
In the Thar desert, this school is a blossom that can open avenues of new opportunities for kids who may have had a different trajectory to their life without it. They are imbibing knowledge one school hour at a time. If a school building is done right, it can form an important institution for kids to grow and flourish in, for many years.  
  
Located within the golden arena of India’s desertland, this all girls school appeals not just on aesthetics but offers a ray of hope to all the young girls in this region. By laying a foundation of empowered women in one of the most arduous terrains in India, CITTA has presented a wonderful example on conquering against all odds. 

* * *

**About Paarul Rai**

Paarul is an Engineer turned Educator who now holds a Bachelor’s degree in Education. She is pursuing her Masters in English literature from Mahatma Gandhi Kashi Vidyapith University, Varanasi. She considers teaching as a noble profession and a great way to remain connected to the young generation. Apart from that, she likes to paint, write and photograph leisurely. Paarul is a Researching Reality Scholar 2024 with the Centre for Civil Society.

## Scrapping Standardised Textbooks Can Improve Student Learning

Original: https://www.spontaneousorder.in/p/scrapping-standardised-textbooks-can-improve-student-learning

Author: Spontaneous Order

Published: 2024-08-23T17:07:15.000Z

Topics: education, school-choice, textbook-reform, localised-curriculum

> The National Council for Educational Research and Training (NCERT) is set to bring out revised political science textbooks for Class 11 and 12. The revision and its contents has stirred controversy. The objectivity of the newly revised texts, especially..

**Summary:**

The post argues against relying on standardised NCERT textbooks for millions of diverse Indian students, advocating instead for schools and teachers to have the choice to select their own textbooks to deliver the curriculum, fostering autonomy, contextual learning, and critical thinking over rote memorisation. It critiques NCERT's aim of uniform learning experiences, as former director Krishna Kumar notes that such textbooks promote memorisation of potentially outdated or irrelevant content. Centralisation shifts focus from academic to political roles, leading to biases, as evidenced by Nirantar studies on 1993-1997 social science textbooks that glorified Hitler, valorised caste, and depicted non-Hindus as foreigners. The post highlights Professor Padma Sarangpani's recommendation for localised curricula, such as incorporating Baiga tribe knowledge of forests and herbal medicines, which uniform texts overlook. Additionally, the 2022 ASER report reveals over half of government school students in Bihar districts lacked required textbooks. This classical-liberal approach would enable inclusion of local stories, diverse perspectives, and personalised resources, transforming education into holistic, engaging experiences while addressing shortages and unaffordability.

**Key points:**

- Replace standardised NCERT textbooks with school-chosen options to reduce memorisation and political bias.
- Localise curricula to incorporate community-specific knowledge, like the Baiga tribe's forest and herbal expertise.
- Grant teachers autonomy in selecting materials suited to their classrooms for more effective teaching.
- Address textbook shortages, as per 2022 ASER report showing over 50% of Bihar government students without books.
- Distinguish curriculum (goals and outcomes) from syllabus (topics and readings) to enable textbook choice.

**By Aditi Thakur**

* * *

The National Council for Educational Research and Training (NCERT) is set to bring out revised political science textbooks for Class 11 and 12. The revision and its contents [has stirred controversy](https://timesofindia.indiatimes.com/education/news/ncert-textbook-changes-2024-do-allegations-of-saffronisation-hold-true-for-the-latest-revisions-in-political-science-books/articleshow/111107911.cms). The objectivity of the newly revised texts, especially for a diverse and complex nation like India, is in question. Unfortunately, the larger issue of relying upon just one standardised textbook to teach millions of diverse students doesn’t find space in public discourse.

The Indian education system confuses curriculum with syllabus. Curriculum lays out overall content, goals, methods, and learning outcomes. Syllabus outlines specific topics, readings, and assignments for a curriculum. Instead of worrying about the contents of the NCERT textbook, it’s important to offer schools the choice to choose their own textbooks to deliver the curriculum.  
  
NCERT as per its former director Krishna Kumar, aims to offer a consistent and equal learning experience for students across different regions and social backgrounds of India. [Professor Kumar](https://search.worldcat.org/title/Origins-of-India's-%22textbook-culture%22/oclc/18464678), also highlights an important pitfall of taking this approach. Standardised textbooks, he says, “promotes memorization as a mode of achievement”. The content students commit to their memory can be outdated or have little relevance to their lives. 

Textbooks are tools to deepen the understanding and knowledge of students so that they can think for themselves, and not to memorise facts that may or may not have a political importance. Centralisation and standardisation of textbooks has unfortunately diverted attention from their academic role to a political role. NCERT has to play the careful game of balancing representation, identity, and historical presentation. The bureaucratic process of approving and publishing textbooks often results in textbooks that contain biassed information.  
  
For example, studies by the [Nirantar Textbook Regime](https://www.nirantar.net/uploads/files/Gujarat%20Report.pdf) have shown that social science textbooks between 1993 and 1997, “depicted ancient Indian culture as essentially Hindu (Class 5) and categorised Muslims, Parsis, and Christians as ‘foreigners’, valorized caste as a great gift from Aryans (Class 9), and glorified Hitler for enhancing German government prestige and instilling a ‘spirit of adventure’ in the common people (Class 10)”. 

It’s important, though, to not lose sight of the forest for trees. Instead of debating the content, education in India should aim to foster holistic and meaningful learning. This requires that we move away from the traditional textbook culture and see education as an integral part of life. A thought also emphasised by renowned philosopher J Krishnamurti. 

This shift is crucial not only for learners but also for teachers. Removing textbooks as the central source of knowledge—and recognizing them merely as information sources—will transform many aspects of the education system. It will grant greater autonomy to both teachers and students in choosing their teaching and learning materials. This autonomy will encourage the inclusion of localised texts, such as tribal stories and poems, diverse perspectives on various issues, and personalised experiences from different sources. Teachers will also have the freedom to select resources and methods that best suit their classrooms, leading to more effective, engaging, and transformative teaching.

[Professor Padma Sarangpani](https://doi.org/10.1080/03050060302552) recommends an idea on localising curriculum that is worth considering. Her approach can help students learn across many diverse communities. The Baiga tribe in Madhya Pradesh, as she points out, has extensive local knowledge of forest ecosystems, herbal medicines, and traditional healing practices. This knowledge has been refined over generations. The modern schooling system relies on a universal, uniform, and standardised approach to education with the same textbook across India. Such a standardised book will overlook and undervalue the rich, contextual knowledge of such communities. Localising textbooks can suit the needs of the curriculum, alongside conveying the rich information that can help entire generations navigate their future better.  

In many instances, the textbooks that are standardised too are either unavailable, unaffordable to the poor, or poorly translated. The [2022 ASER report](https://img.asercentre.org/docs/ASER%202022%20report%20pdfs/State%20pages/6%20pagers_English/bihar_4.pdf) highlighted that in numerous districts of Bihar, more than half of government school students did not have the required textbooks for their grade levels. 

Dependency on standardised textbooks has significant implications for the educational experience in India. Offering schools and teachers a choice to pick the textbook that suits their needs, including textbooks that are localised, can weed out rote learning and add a rich, context-specific knowledge that can empower students across India. It’s important to focus on the larger picture and not just the politics behind the content of the books.

* * *

**About Aditi Thakur**

Aditi Thakur is pursuing an M.A. in Education from Ambedkar University. She has a keen interest in integrating critical thinking to curriculums and pedagogy. She is a Researching Reality 2024 Scholar with the Centre for Civil Society.

## Zwigato Reflects the Autonomy Mirage of Gig Work in India

Original: https://www.spontaneousorder.in/p/zwigato-reflects-the-autonomy-mirage-of-gig-work-in-india

Author: Spontaneous Order

Published: 2024-08-16T11:32:53.000Z

Topics: gig-economy, platform-workers, labour-policy, social-security

> With the rhythmic sounds of the engine humming softly in the background, Manas was travelling in a dimly lit train. He looked exhausted. Suddenly, a voice full of excitement and promise was heard, loud and clear. It said, “Attention! There’s a new job

**Summary:**

Zwigato, a 2022 film directed by Nandita Das, dismantles the romanticized narrative of gig work as flexible autonomy, portraying delivery driver Manas—a former factory manager—as trapped in a precarious reality of long hours, algorithmic targets, low pay, safety risks, and no social security. While acknowledging that the gig economy provides income opportunities to millions amid India's job scarcity, the film exposes the 'autonomy mirage': workers like Manas face arbitrary app blocks, mental exhaustion, societal disrespect, and weak bargaining power due to high replaceability. A poignant dialogue flips the notion that laborers are forced into hardship, revealing instead how compulsion creates laborers. The ILO projects 23.5 million gig workers by 2030, comprising 6.7% of India's non-agricultural workforce, exacerbating instability without quality jobs. From a classical-liberal lens, the film urges clear legal frameworks to define platform duties, effective grievance redressal, and open dialogues among governments, employers, and workers to balance flexibility with fair treatment, fostering a sustainable gig economy rather than unchecked expansion.

**Key points:**

- Gig work promises flexibility but delivers physical and mental exhaustion, algorithmic pressures, and absent social security for workers like Manas.
- India's gig workforce is projected to reach 2.35 crore by 2030, or 6.7% of non-agricultural jobs, amid lacking stable employment options.
- Workers' high replaceability undermines bargaining power, necessitating clear legal frameworks for platform responsibilities and grievance mechanisms.
- Open dialogue between governments, platforms, and workers is essential to reconcile flexibility with dignity and security in the gig economy.

**By Roselin Indani Losan**

* * *

With the rhythmic sounds of the engine humming softly in the background, Manas was travelling in a dimly lit train. He looked exhausted. Suddenly, a voice full of excitement and promise was heard, loud and clear. It said, “Attention! There’s a new job scheme in town! Secure employment and a brighter future awaits!”. Manas’s heart leapt out of his chest. A brighter future? Secure employment? His ears rang with every successive word. Stability and opportunity were both something he missed having in the past few months. Manas rushed through the crowd with his eyes scanning for the hands distributing the forms for the “Sugam” scheme. But no matter how hard Manas tried he could not get a hold of this life-changing scheme. All of a sudden his surroundings blurred. He woke up, startled and drenched in sweat. This was a dream. The harsh reality of his life settled heavily on his shoulders, right after. Manas delivers food through Zwigato, a fictional  delivery app, which is also the name of the [2022 movie, directed by Nandita Das](https://en.wikipedia.org/wiki/Zwigato).

This opening scene captures the essence of the movie. It showcases a poignant portrayal of the struggles of gig workers in India. The movie tells the story of Manas, played by actor and comedian Kapil Sharma, who is a former factory manager who chose to become a food delivery driver after his factory shut abruptly. 

Gig work often gets romanticised as digital nomadism, suggesting a new era where technology enables a workspace that transcends boundaries and offers flexibility. Zwigato shows brilliantly how gig workers navigate the precarious world of the gig economy. It also shines a light on the lived realities of gig workers. The movie shows the flip side of the autonomous and flexible narrative, peddled to attract prospective workers.  

There is no doubt that the gig economy offers income and opportunities to millions of Indians. In the movie, the Zwigato Zonal representative, portrayed by Sayani Gupta, emphasises this fact brilliantly. She is seen responding to a helpless Manas who visits the office to resolve getting blocked arbitrarily by the app.  

It is important to note that performing gig work is tough. It contains long hours for little pay, with concerns on safety, and an absence of social security, like in the case of most other informal jobs. 

Zwigato portrays beautifully how Manas’s work is not just physically demanding but also mentally exhausting. He often struggles to meet delivery targets set by algorithms which lack a human layer. The movie also shows a society that does not offer gig workers the dignity they deserve.  
  
One dialogue that strikes hard is when Manas’s friends say, “*Wo Majdoor hai isiliye Majboor hai*’, Manas cleverly counters them by saying, “*Wo Majboor hai isiliye Majdoor hai*”. Through the movie it becomes clear that the colourful promise of flexibility and autonomy offered by gig work obscures the reality of gig workers. Like Manas, gig workers lack consistent salaries and have no sense of familiar human relationships within platforms. For a large country with a huge population like India, gig workers are highly replaceable. If one person leaves, hundreds are waiting to replace them affecting their bargaining power. 

Zwigato raises critical questions about the future of work in India. Questions like, what will the balance between work flexibility and need for social security look like? What will grievance redressal look like to make sure workers are treated fairly?

The International Labour Organisation in a report ([ILO, 2024](https://www.ilo.org/publications/expansion-gig-and-platform-economy-india-opportunities-employer-and)) projects that by 2030, there will be about 2.35 crore gig workers in India. They will account for 6.7% of our non-agricultural workforce. In the absence of quality jobs, such a rapid expansion will worsen the issue of stable employment and access to social security. Duties and responsibilities of the platform towards gig workers are often left open to interpretation. Clear legal frameworks for gig work may help gig workers. It may also be that the absence of unions to represent them, may change. 

An open dialogue between governments, employers, and workers will help in shaping the future of the gig economy. Zwigato makes one rethink many things taken for granted while using services offered by gig workers. The movie offers many layers of complexity making it an important watch to understand the job challenge and how gig work will affect it.

* * *

**About Roselin Indani Losan**

Roselin Indani Losan is a researcher and development professional with a master's degree in Development Studies from Ambedkar University in Delhi. Her work focuses on gender, work, and socio-economic development. Roselin is a Researching Reality Scholar 2024 with the Centre for Civil Society.

## Plugging the Leak: From One Size Fits All to Decentralised Approach in Higher Education

Original: https://www.spontaneousorder.in/p/plugging-the-leak-from-one-size-fits-all-to-decentralised-approach-in-higher-education

Author: Spontaneous Order

Published: 2024-08-12T17:47:59.000Z

Topics: higher-education, university-autonomy, centralized-exams, admission-reforms

> On June 19, 2024, the National Testing Agency (NTA) announced the successful completion of the UGC-NET exam. This was the first common exam for Assistant Professorship (NET), Junior Research Fellowship (JRF), and PhD admissions. Next day, however, the N..

**Summary:**

The recent UGC-NET exam leak on June 19, 2024, exemplifies the flaws of India's centralized higher education admission system, which prioritizes bureaucratic control over university autonomy and intellectual freedom. Aman Chouhan argues that centralizing exams like NET, JRF, and PhD admissions—expanded by UGC in 2023—imposes rigid, one-size-fits-all structures that favor rote learners and trivia over critical thinking, as seen in odd questions like Ram Manohar Lohia's 'gungi gudiya' reference. Only top 6% qualify for Assistant Professorship and 1% for JRF+Assistant Professorship, turning admissions into a high-stakes game that disadvantages marginalized candidates and stifles diversity. Echoing the 1970 Gajendragadkar committee's call for university autonomy, Chouhan advocates decentralizing admissions: universities should design their own processes, including separate exams and viva voce, fostering innovation and transparency. The state should shift to supervision, enabling NEP 2020's 50% GER target by 2035. This classical-liberal approach empowers institutions to innovate, builds trust through accountability, and equips scholars for real challenges, rather than perpetuating mistrust and inefficiency.

**Key points:**

- Centralized UGC-NET exams, like the June 2024 leak, erode trust and prioritize control over academic freedom.
- UGC's 2023 centralization of PhD admissions and 2024 NET/JRF merger favors rote trivia over critical thinking, with only 6% qualifying for Assistant Professorship and 1% for JRF+.
- Grant universities autonomy to design their own admission processes, including exams and viva voce, as recommended by the 1970 Gajendragadkar committee.
- Ensure transparent admissions and expand university autonomy to foster innovation, diversity, and NEP 2020's 50% GER goal by 2035.

**By Aman Chouhan**

* * *

On June 19, 2024, the National Testing Agency (NTA) announced the successful completion of the UGC-NET exam. This was the first common exam for Assistant Professorship (NET), Junior Research Fellowship (JRF), and PhD admissions. Next day, however, the NTA retracted its statement. It  said the exam’s integrity was compromised even before it commenced. This event ran in the news cycles as the paper leak scandal. The agency announced that candidates will have to retake the exam. This caused widespread outrage and deepened the mistrust in the centralised examination system. Even if the paper hadn’t leaked, this centralised system was flawed from the start. 

A centralised examination imposes rigid structures and prioritises control over freedom. This lack of freedom hinders intellectual growth and societal progress, leaving future generations ill-equipped to tackle upcoming challenges. The Gajendragadkar committee set up by UGC as far back as 1970 had the same recommendation that needs revisiting. It called for UGC to secure academic integrity by supporting autonomy of universities ([Sancheti and Pillai, 2020](https://www.aiu.ac.in/documents/AIU_Publications/Reimagining%20Indian%20Universities/10.%20Institutional%20Autonomy%20In%20Indian%20Higher%20Education%20System%20By%20Sandeep%20Sancheti%20VC%20SRMIST%20&%20Past%20President,%20AIU%20and%20Latha%20Pillai,%20Director\(QAR\)%20SRMIST,%20Chennai.pdf)), 192-193). Setting universities free to explore, innovate, and pursue knowledge without external interference, can ensure a robust and transparent educational environment. While this is important in every facet of how a university operates, it is especially true for how universities select their candidates.    
  
Last year in 2023, UGC took away university autonomy for PhD admissions by creating a centralised exam. Before this centralised exam, universities conducted separate exams for PhD admissions, and followed them with a *viva voce* for those who cleared the cutoff marks. The commission took away university autonomy and clubbed multiple university entrances into one common entrance exam. This year the commission went a step further by combining exams for NET and JRF with the PhD entrance exam under UGC-NET. This combined exam is now an entrance test similar to other competitive exams like JEE, NEET, and CUET. This model favours candidates who are rote learners over those who excel in critical thinking. It also raises three major questions on the credibility of the one-size-fits-all approach.  Are such common exams a good approach for assessments? Do they produce good quality scholars? Or are they simply a mechanism to eliminate future scholars? 

When entrance exams are centralised, the quality of the exam questions and their objectivity suffers too. To accommodate a large number of students, the exam on Political Science contained strange questions of trivia like, “whom did Ram Manohar Lohia call a ‘*gungi gudiya*‘ (dumb doll)?”. Asking questions like this makes one wonder, what is the exam assessing for? Knowledge for trivia or awareness on political name-calling. 

Combining different examinations also increases their competitiveness. It puts a pressure on candidates to figure out how to crack them not by increasing their level of knowledge but by anticipating questions better to beat other students. From all candidates appearing for the UGC-NET exam, just the top 6% qualify for Assistant Professorship ([Information-Bulletin-2024](https://ugcnet.nta.ac.in/images/information-bulletin-for-ugc-net-june-2024.pdf)), and a mere 1% secure both JRF and Assistant Professorship. Overall, the common exam has reduced the process to a game, where success hinges on a single exam rather than a holistic evaluation of a candidate’s potential.  

In academia, where diversity is valued over standardisation, a common exam may fail to capture the nuanced abilities of candidates. This can lead to a narrow focus on test-taking skills, and applying it as a benchmark to determine crucial attributes like critical thinking, analytical reasoning, and academic writing. It also widens the gap between candidates who are from privileged backgrounds and those from marginalised communities, as the better off usually have better access to resources and preparation opportunities.

To fix the slide taking place in higher education three proactive steps are needed urgently. First, grant universities freedom to choose their own admission process, by allowing departments and colleges to create their own assessment criteria. Second, ensure the admission process is transparent to ensure a fair admission process. Third, expand university autonomy and let institutions decide how they want to strive to deliver quality education.

The National Education Policy 2020 aims to achieve a Gross Enrollment Ratio of 50% in higher education by 2035 ([UGC, 2020](https://www.ugc.gov.in/pdfnews/5294663_Salient-Featuresofnep-Eng-merged.pdf)). Addressing the critical issue of university admission policy, has an important role to play in pursuing NEP’s aim. 

It’s important to note that the push for university autonomy is not to make it harder to get in. It is instead, to encourage every person involved with the exam to raise their game. Right from the person setting the exam to the person conducting and evaluating the exam.  The state too can switch gears from playing a regulatory role to performing a supervisory role. This way, the limited capacity and resources of the state can then be optimised better to deliver a fair and transparent system. 

University autonomy can foster an environment where educational institutions are empowered to innovate and improve without being bogged down by excessive bureaucratic constraints. It will also foster a diversity of models that universities can choose from and adapt to represent their own culture and vision for higher education. This way candidates too will have a choice to use the system to judge the practice and performance of educational institutions before applying for admissions. Setting universities free can foster trust, accountability, and informed decision-making.

* * *

**About Aman Chouhan**

Aman Chouhan has a post-graduate degree in Development Studies from JNU. His learning curve oscillates as he spends equal time learning and unlearning in every way possible. Aman is a Researching Reality Scholar 2024 with the Centre for Civil Society.

## How India’s Proprietary Classes Shrink Economic Growth

Original: https://www.spontaneousorder.in/p/how-indias-proprietary-classes-shrink-economic-growth

Author: Spontaneous Order

Published: 2024-08-09T15:29:29.000Z

Topics: rent-seeking, political-economy, indian-economy, interest-groups

> The economic history of India, especially the history of India’s central planning era, is a complex interplay of ideology, policy, and their unintended consequences. To get a view on how events unfolded and to identify the power and politics behind them

**Summary:**

India's economic stagnation, particularly during central planning, stems from rent-seeking by three proprietary classes—large and medium businesses, large and medium farmers, and professional salaried classes including bureaucrats—who lobby for subsidies, tariffs, and regulations that protect their interests at the expense of overall growth, as analyzed by Pranab Bardhan. Businesses secured licensing and protection from foreign competition, leading to cronyism where by 1976 the top 20 houses controlled two-thirds of private corporate capital, yet per capita income stagnated despite industrial output gains from 1950-1980. Rich farmers, 19% of rural population but controlling 60% of cultivated area and 53% of output in 1975, allied with smaller farmers for subsidized irrigation, electricity, and credit, and continue lobbying for high support prices. Professionals directed education away from masses to preserve elite status and licensing rents in an anti-profit environment. These coalitions caused collective action problems, persisting post-1991 liberalization with unchanged public enterprises, failed farm reforms, manufacturing workforce share dropping from 12.6% in 2011 to 11.4% in 2022, and GDP share at 17% versus promised 25%. Bardhan's framework reveals how such interest group politics shrinks growth, urging recognition for political stability but highlighting classical-liberal critiques of interventionism.

**Key points:**

- Three proprietary classes—businesses, rich farmers, and professionals—engage in rent-seeking via subsidies and regulations, causing India's economic stagnation.
- By 1976, top 20 business houses controlled two-thirds of private corporate capital through licensing and protectionism, failing to boost per capita income.
- Rich farmers (19% of rural population) dominated 60% of cultivated area in 1975 and secured ongoing subsidies like cheap electricity and credit.
- Post-1991, manufacturing's GDP share remains at 17% (2022) below 25% target, with workforce share falling to 11.4%, due to persistent interest group influence.

**By Anshu Chowdhury**

* * *

The economic history of India, especially the history of India’s central planning era, is a complex interplay of ideology, policy, and their unintended consequences. To get a view on how events unfolded and to identify the power and politics behind them, economist Pranab Bardhan’s work is a useful guide. In his book [The Political Economy of Development in India](https://search.worldcat.org/en/title/1000982782), an important concept helps to magnify India’s political economy. He shows how self-interested proprietary classes engage in interest group politics to benefit themselves at the cost of the overall economy. 

Proprietary classes are social groups that hold large economic power and control over resources. Bardhan highlights three proprietary classes that are dominant in shaping India’s trajectory. First, large and medium businesses, second, large and medium farmers, and third, professional salaried classes. Studying how these proprietary classes act holds promise to understanding the interplay of present day politics too. 

Proprietary classes engage in what he describes as rent-seeking behaviour. Public choice economists Gordon Tullock and Anne Krueger describe rent-seeking activities as those that generate wealth without any reciprocal contribution to society. Some examples of these benefits are efforts at obtaining subsidies, securing favourable tariffs to import or export goods, or creating regulations to eliminate competition.

It is important to note that recognising the interests of these classes is crucial for the political stability and re-election prospects of the national party looking to remain in power.

These three self-interested groups in India have caused a collective action problem, or an instance where self-interests are achieved at a net loss to the entire society. Bardhan presents this collective action problem as the cause that led to economic stagnation in India. 

The first proprietary class of large and medium businesses was a group of leading industrialists who drafted the Bombay Plan in 1944 to suggest interventionist strategies for economic development. Licencing policies made under central planning helped to retain their monopoly positions. State policies also protected industrialists from foreign competition. The in-roads made by this proprietary class and the government-industry cooperation led to many instances of cronyism. By 1976, the top 20 business houses controlled nearly two-thirds of the total productive capital in the private corporate sector. While there was an increase in industrial production through pro-industrialist policies, this rise in production did not translate into an overall increase in India’s per capita income. As pointed out by [economist BR Shenoy](https://indianliberals.in/liberals/economic-prophecies.pdf), India lived through a long spiral of poor economic growth that remained unchanged throughout successive five-year plans made between 1950 to 1980. 

The second proprietary class worth examining to understand India’s political economy is the interest group formed of large rural landowners and rich farmers. Although they represented just 19% of the rural agricultural population, they accounted for 60% of cultivated area and 53% of crop output in 1975 ([George Rosen, 1986](https://www.jstor.org/stable/1153861)). Pranab Bardhan also argues that the less well off class of farmers allied with rich farmers, to share the benefits from cheaper means of irrigation, cheaper electricity tariff, and subsidised credit. As an interest group this proprietary class continues to lobby for higher support prices for agricultural commodities even today.   
  
The third crucial proprietary class is that of bureaucrats, salaried professionals, and top-level unionised labour. The Indian Civil Services was composed of individuals, majority of whom were from the upper sections of society. Given, the majority of the country at the time was illiterate, the level of education of this proprietary class gave them a higher status. Bardhan argues that these elites directed educational investments away from the masses to protect their status and the rents they could extract from maintaining positions of power and influence. The strong anti-profit environment, legitimised their authority in issuing licences, allowing them to retain and increase their rental income.

Even though such interest group coalitions had a negative impact on India’s economy for many decades, these coalitions persisted. In an epilogue written to his [book](https://search.worldcat.org/en/title/1000982782) in 1998, Bardhan points out the alarming volumes of subsidies as a symptom to the disease that can be traced back to the continued influence of interest groups. Even post liberalisation in 1991, there was no significant break in this pattern or reduction in the levels of subsidies offered to proprietary classes.

At present, the number of public sector enterprises is largely unchanged. Bills brought into the parliament to reform agriculture are sure to fail. The share of India’s workforce engaging in manufacturing activities has reduced from 12.6% in 2011 to 11.4% in 2022. The share of manufacturing in India’s  GDP in 2022 was at 17% which is lower than the promised 25% ([Suresh Babu, The Hindu, 2020](https://www.thehindu.com/opinion/op-ed/why-make-in-india-has-failed/article30601269.ece)). 

Pranab Bardhan’s work is an important contribution to understand the linkages between proprietary classes, their rent-seeking behaviour, and the negative impacts of their actions on the economy as a whole.

* * *

**About Anshu Chowdhury**

## Anti-cheating Act Does Not Reduce the Incentive to Cheat in Exams

Original: https://www.spontaneousorder.in/p/anti-cheating-act-does-not-reduce-the-incentive-to-cheat-in-exams

Author: Spontaneous Order

Published: 2024-08-05T16:36:51.000Z

Topics: public-exams, exam-cheating, incentives, education-reform

> Anti-cheating Act Does Not Reduce the Incentive to Cheat in Exams

**Summary:**

The Public Examination (Prevention of Unfair Means) Act 2024, passed by the Indian Parliament in February 2024, targets unfair practices in exams conducted by bodies like UPSC, SSC, RRB, and NTA, but fails to reduce incentives to cheat. From a classical-liberal lens, human behavior hinges on weighing rewards against costs; the Act imposes punishments post-offense—fines up to ₹1 crore and imprisonment up to 10 years—but does little to raise cheating costs upfront or lower rewards like government jobs and elite admissions. It claims to 'prevent' yet offers no preventive measures, merely deterring after vulnerabilities are exploited, requiring effective detection and proof. States like Rajasthan, Haryana, Bihar, Gujarat, and Uttarakhand with similar laws still suffer rampant paper leaks and cheating, exposing a broken system. Root causes persist: over-reliance on high-stakes exams amid poor education quality fuels coaching culture and cheating incentives. The government bears liability for breaching candidates' trust, wasting their time and money. Punishment alone cannot disincentivize cheating; preventive reforms addressing systemic flaws are essential.

**Key points:**

- The Act lists offences and punishments but does not alter cost-reward incentives driving candidates to cheat.
- Similar state anti-cheating laws in Rajasthan, Haryana, Bihar, Gujarat, and Uttarakhand have failed to curb paper leaks and rampant cheating.
- High exam stakes for jobs and admissions, coupled with poor education quality and coaching proliferation, sustain strong cheating incentives.
- Government is liable for exam breaches, as candidates entrust it with fair conduct after paying fees.
- Prevention measures, beyond post-facto deterrence, are needed to truly stop unfair means in public exams.

**By Meena Kumari**

* * *

Indian Parliament in February, 2024 passed the Public Examination (Prevention of Unfair Means) Act 2024 law to prevent cheating in examinations.Many have praised it for addressing the issue of leaked question papers before the exam. The Act focuses on regulating how exams are conducted by public examination authorities like the Union Public Service Commission, Staff Selection Commission, Railway Recruitment Board, National Testing Authority and various Ministries and Department of Central Governments that have linkages to conducting exams. The Act requires an evaluation to verify if it delivers on what it promises. 

Human beings before acting on anything, weigh the reward to be gained against the cost incurred of any action. When costs outweigh reward, behaviour can change. When it comes to cheating in public examinations, this is an important yardstick to use. Does the new Act to prevent cheating reduce the incentive to cheat? 

Another yardstick to evaluate the Act on is to see if provisions in the act achieve the stated objective. The Act aims to “prevent” unfair means during public examinations. In the act the term *prevent* implies to stop something from happening. Does the Act provide preventive measures that will stop cheating and the leaking of question papers? 

The Act does not alter the incentives to cheat in an exam. Nor does it offer preventive measures. What it does provide is a list of offences and punishments related to actions of unfair means used to answer public examinations. The Act at best deters cheating but does not prevent it.  
  
Punishment is the end resort when prevention is no longer possible. It’s also important to judge the provisions of the Act based on the statement of objects and reasons articulated [in the bill](https://prsindia.org/files/bills_acts/bills_parliament/2024/Public_Examinations_\(Prevention_of_Unfair_Means\)_Bill,_2024.pdf). One such statement stands out: “The Bill is aimed at effectively and legally deterring persons, organised groups or institutions that indulge in various unfair means and adversely impact the public examination systems for monetary or wrongful gains”. It’s worth noting that the title of the Act and stated objectives are two different approaches. The approach of prevention and the deterrence approach. Questions worth asking are, should one approach be selected over another? Is there a suitable mix of the two approaches that is required to end cheating in Indian public exams?  
  
The deterrence approach is a response for a person who has committed the offence and their action has revealed where and how the system is vulnerable. The punishment serves as a signal tto communicate exploiting this vulnerability again will have consequences. But being able to catch the offence, investigate to find out who has committed it, and proving it, are important pre-conditions of this approach. The Act does not disincentivize the candidate from considering taking advantage of the system and making wrongful gains, in the first place.  

To be sure, I am not against punishment or imposition of fines on offenders. But just punishment without effective preventive measures cannot reduce the incentive to attempt cheating and other unfair means taken in an exam. It is possible to see how this approach played out and how it failed at achieving its purpose. 

In Rajasthan, Haryana, Bihar, Gujrat, and Uttarakhand, there are a series of news reports on question papers getting leaked and rampant cheating taking place to answer the exam. Most of these states already have a law similar to the one proposed by the Central Government. The state laws too, do not disincentivize cheating. It is becoming clear that cheating in India is not an occasional lapse in the system but an instance of a broken system. 

Many see exams as systems of fairness that are also gateways of opportunity. Public examinations are a crucial part of our education system and public services. Success in a public exam can lead to getting a job or an admission in the top tier of higher-education institutes of India. Exam scores are a scale to measure the chances of a person’s success too. We have started valuing exam scores more than the quality of education offered. This is also why we live in a flood of coaching centres. Added expenses on exam prep and the better prospects from cracking the exam are huge incentives to want to cheat. Unfortunately, nothing is being done to address it.It is also worth asking, when exam papers leak, is the government not a liable party? It is in fact a breach of trust that candidates and their families put in the government. By filling out forms and paying a fee to take the exam, candidates have entrusted the government the duty to conduct a fair exam. When cheating takes place, the government is liable to the candidates taking the exam. The breach has many consequences that are hard to remedy for candidates, like the time wasted in preparing for the exam instead of pursuing something else. It could also be monetary like the travel and lodging expenses paid by millions of persons who do not live close to exam centres.

Strong incentives to use unfair means to clear exams still exist. The Public Examination (Prevention of Unfair Means) Act 2024 at best serves a deterrent, but it does little to prevent the cheating taking place in India’s public examinations.

* * *

**About Meena Kumari**

Meena Kumari is working in the Faculty of Law, University of Delhi. Her areas of interest are personal laws and property rights. She is a Researching Reality Scholar 2024 at the Centre for Civil Society. Meena is also a tennis fan.

## Universal Basic Income: A Better Way To Do Welfare

Original: https://www.spontaneousorder.in/p/universal-basic-income-a-better-way-to-do-welfare

Author: Spontaneous Order

Published: 2024-08-02T10:30:42.000Z

Topics: universal-basic-income, welfare-reform, india-policy, financial-inclusion

> In our society today, Universal Basic Income (UBI) has been talked about as if it were an epitome of social welfare, for quite some time now. UBI’s two main features – unconditionality and universality – are what distinguish it from traditional welf

**Summary:**

Priyam Deka argues that Universal Basic Income (UBI), with its unconditionality and universality, offers a superior alternative to India's leaky, corruption-ridden welfare system, which relies on rationing, bribes for ration cards, and discriminates against Dalits and tribals. Current schemes suffer from fraud in bottom-up transfers and fail at targeting, while UBI eliminates intermediaries, guarantees delivery to recipients, and frees individuals from Hayek's 'paternal and clientele ties' with government, enabling personal choice that improves health, nutrition, and education. It could streamline India's 950 overlapping central and state schemes, slashing administrative costs and efforts from duplications. UBI also advances financial inclusion by mandating bank accounts for direct transfers, onboarding millions. Despite critiques of high costs (up to 4.9% of GDP), work disincentives, and risks to public services, the 2011-2013 Madhya Pradesh pilot with 6,000 villagers showed gains in nutrition, health, education, and even labor in agriculture and beyond. Deka recommends more pilots, skill training, monitoring, phased rollouts leveraging digital infrastructure, and sustainable funding to make UBI feasible, urging political will to pursue this classical-liberal welfare path.

**Key points:**

- India's current welfare system is plagued by corruption, discrimination, and exclusion, which UBI's unconditionality and universality can eliminate by bypassing intermediaries and ensuring direct payments.
- UBI streamlines 950 overlapping schemes, reduces administrative costs, and promotes financial inclusion through mandatory bank accounts for direct transfers.
- The Madhya Pradesh UBI pilot (2011-2013) demonstrated improvements in nutrition, health, education, and labor participation, countering work disincentive fears.
- Policymakers should implement phased UBI rollouts with pilots, skill training, robust monitoring, and sustainable funding to address fiscal and behavioral concerns.

**By Priyam Deka**

* * *

In our society today, Universal Basic Income (UBI) has been talked about as if it were an epitome of social welfare, for quite some time now. UBI’s two main features – unconditionality and universality – are what distinguish it from traditional welfare schemes. It is a system that guarantees an unconditional regular income to all legal residents in a country. It is not contingent on the recipient’s status of employment, level of income, or size of family. It ensures a basic minimum lifestyle for all, reduces poverty, and provides economic security in a world moving towards automation. Its unconditionality has the potential to eliminate exclusion of anyone who is vulnerable.

Indian proponents of UBI believe that it can address the shortcomings of the current welfare system that operates on rationing, which has several leaks and is rife with corruption. The current system is also ineffective at targeting recipients. Many states use a bottom up transfer model, in which high-powered federal and state governments give subsidies to low-powered local officials in order to support welfare program implementation. This approach is vulnerable to fraud as pointed out by many economists. 

From the recipient’s view, to receive benefits various state regulations that limit subsidies have to be circumvented. Individuals must also have a ration card, which is tough to obtain. They are sometimes sold in illicit markets, and in many instances recipients have to pay bribes to government officers to obtain one. There is a lot of discretion available to the government machinery in deciding who can obtain a ration card. Dalits and members of tribal communities, for example, are [found to be discriminated against](https://www.aljazeera.com/news/2022/4/27/is-india-food-security-scheme-discriminating-against-dalits#:~:text='There%20is%20caste%20prejudice'&text=In%20many%20cases%2C%20it%20is,demand%20their%20right%20to%20food.) in the traditional public distribution system. 

UBI has the potential to decrease corruption and, more importantly, guarantee that payments are received by the intended recipients. It also eliminates intermediaries who hold power in the current system.

India’s Economic Survey in 2016–17, recognised that UBI has the potential to free people from what Nobel prize winning economist Friedrich Hayek described as “paternal and clientele ties with the government”. Individuals who receive unconditional cash transfers are free to choose how much money to allocate depending on their needs. This feature can lead to improvement in [health, nutrition, and educational outcomes](https://doi.org/10.1016/j.jmoneco.2024.103615).

Universal basic income can also streamline India’s complex welfare system. There are 950 central and state-level schemes, at present. This is an unimaginably complicated system that has [multiple overlaps and high efforts arising from duplications](https://doi.org/10.1016/j.cities.2023.104729). Combining them into one universal cash distribution will eliminate the need for beneficiaries to go from one place to another and can save enormous administrative expenses, at the same time. 

Finally, implementing UBI is crucial for India’s objective of financial inclusion. To receive UBI payments recipients can be required to have bank accounts through direct transfers.  Such a transfer has the potential to bring tens of millions of unbanked Indians into the formal system of finance, starting a virtuous cycle of savings, credit availability, and economic involvement.

One may doubt if universal basic income can be successful in India. Many argue that the cost will be staggering. Even a modest UBI can cost up to 4.9 percent of India’s GDP, causing [significant levels of fiscal stress](https://doi.org/10.1016/j.crsus.2024.100104). It requires that taxes be raised, spending cut, or an increase in borrowing, all of which have significant negative effects on the economy. How to make it feasible is a significant concern, given India’s poor record in providing public services in a cost-effective manner.

Critics also focus on the possibility of harmful behavioural consequences, notable among them is less effort put at work and a culture of dependency. Universality in a country as large as India is a challenge too. There are also potential risks that UBI rollout can shrink the provision of essential public services like [healthcare and education](https://doi.org/10.1016/j.jpolmod.2022.07.005).

However, the results from the UBI pilot in the central Indian state of Madhya Pradesh operational from 2011 to 2013 show promise in addressing these concerns. This trial was the largest cash-transfer programme ever undertaken in India. Its encouraging results show improvements in nutrition, health, education, and economic activity for 6,000 persons across eight villages. It even led to an increase in labour and work, both [within and outside of the agricultural sector](https://doi.org/10.5958/2322-0430.2019.00016.7). To be sure, policymakers can consider running more such broad-based, multi-locus pilots to monitor the impact of UBI on any other specific socio-economic outcome of concern.  

If concerns on UBI disincentivizing work continue, skill-building vocational training programs can be rolled out alongside UBI to motivate and plug gaps in seeking employment.  

It’s als important that robust and responsive monitoring and evaluation machinery should be put in place to monitor the impact of UBI on many important outcomes. Taking care of extensive stakeholder engagement before implementation of schemes and pilots, will also matter.

Some implementation concerns can also be addressed through a phased rollout, targeting initially, specific geographies or budget expenditures. India already has a strong digital infrastructure which can be used to ensure efficient delivery.

Overall, a funding mechanism that is sustainable and fiscally prudent will matter the most on the future of universal basic income in India. On other counts it fares well. The UBI pathway is ripe, it just needs political will and action, now.

* * *

**About Priyam Deka**

Priyam is a graduate in Population Health with Data Sciences from University College London. She is currently a Civil Servant in the UK government within the Department of Transport. With a strong interest in education and gender rights, Priyam is looking to pursue a Masters in Public Policy. Priyam attended the ePolicy course with CCS. In her free time, she enjoys listening to music and reading historical fiction.

## To Improve Mid-Day Meals, There are Some Gaps and Some Fixes

Original: https://www.spontaneousorder.in/p/to-improve-mid-day-meals-there-are-some-gaps-and-some-fixes

Author: Spontaneous Order

Published: 2024-07-31T14:38:26.000Z

Topics: mid-day-meals, school-nutrition, public-private-partnerships, education-decentralization

> Mid-day meal quality and implementation needs improvement, alternative models can help here.

**Summary:**

The Mid-Day Meal scheme, initiated by Tamil Nadu in 1956 and now nationally implemented, has boosted school enrollment and child nutrition but is plagued by implementation failures under central and state governments. Key problems include poor meal quality—insects, undercooked food like ghooogri in Rajasthan, uric acid in grains—with a 2002 survey showing 10% of parents reporting children unwell; inadequate cooking/storage facilities (only one-third of schools have helpers); teachers' time diverted from classes; sporadic supervision fostering corruption, delays in payments/grain delivery, and losses/substitutions; regional disparities (Tamil Nadu succeeds, Bihar/UP fail despite Supreme Court orders); caste-based discrimination; and holiday feeding gaps. A classical-liberal approach favors community-driven models with minimal government involvement, private partnerships like Akshaya Patra (ISKCON nonprofit), local school autonomy over state control, increased funding for independent operations, and better inspections. States should prioritize scheme funding over other initiatives and explore community incentives to resolve these government-centric shortcomings.

**Key points:**

- Mid-Day Meal scheme increases enrollment and nutrition but fails due to poor quality, facilities, supervision, and logistics under government implementation.
- Private partnerships like Akshaya Patra and community-driven models with minimal government role improve delivery.
- Grant local schools decision-making autonomy, boost funding for independence, and enhance inspections to fix state-level bottlenecks.
- Prioritize adequate funding for the scheme over other initiatives across resource-varying states.

**By Siddhant Shetty**

* * *

Serving children mid-day meals in their school started first in 1956 by the government of Tamil Nadu. At present, the mid-day meal scheme has been taken by the national government and implemented across the country. The scheme is often praised for boosting school enrollment and improving child nutrition and health, at the same time. Despite this there are several shortcomings. An important problem to resolve is its implementation by both the central and state governments. There are interesting community driven and private partnerships models that can help here. A scheme on its own can be outstanding. But if implemented poorly it will have little effect.

Despite its popularity, the Midday Meal scheme has had several shortcomings. The mid-day meal scheme aimed to boost school enrollment with meals as an incentive to attend school. It also improved child nutrition, at the same time. While school enrollment did go up, many problems came up with the meals provided. While students may get one guaranteed nutritious meal but regularity and the quality of these meals is a problem yet to be resolved. 

There were several cases of meals containing [insects and some of them being undercooked](https://www.socialconnectedness.org/the-mid-day-meal-scheme-the-unintended-consequences/). Reports have also noted the presence of uric acid in the food grains used for the meal. The argument about meal quality should not be dismissed. [Surveys suggest about 10% of parents](https://mpra.ub.uni-muenchen.de/17386/1/MPRA) reported their children felt unwell after the mid-day meal, at least once in the year 2002. For example in Rajasthan, frequently served *[ghoogri](https://mpra.ub.uni-muenchen.de/17386/1/MPRA)* [was served undercooked](https://mpra.ub.uni-muenchen.de/17386/1/MPRA), repeatedly. This caused digestive issues for several kids.  

Lack of cooking and storing facilities in schools is a major explanation behind poor quality meals. Food in many instances is cooked outdoors in makeshift sheds, or in a classroom. Teachers spend their already constrained time to organise and supervise mid-day meals, which can disrupt classroom activities. Several schools also had to face the problem of lack of fuel and also had inadequate drinking water arrangements to cook. [A survey](https://mpra.ub.uni-muenchen.de/17386/1/MPRA) found that only one-third of the schools surveyed had appointed helpers to assist with the cooking. 

Mid-day meals aren’t supervised well and formal monitoring is infrequent. Despite official guidelines requiring various committees and officers to periodically oversee the scheme, these checks are sporadic. Inadequate supervision leads to various issues, including petty corruption, logistical delays, and poor hygiene. There are also logistical delays at different stages. There are widespread complaints about delayed cash payments post grain delivery. Cooking staff salaries are often delayed for months, and many teachers and *sarpanch* reported contributing advance money from their own pockets to pay for vegetables and other related inputs for the meal. In some states, transport costs are not fully covered, forcing mid-day meal organisers and teachers to make ad hoc arrangements. The loss of grain between FCI godowns and schools, or the substitution of high-quality grain with lower-quality grain by opportunistic intermediaries is also an issue. There are also problems like delays in grain delivery by state government distributors.

There have also been several regional contrasts. For decades, Tamil Nadu has consistently provided nourishing school meals. In contrast, states like Bihar and Uttar Pradesh are yet to implement mid-day meal programs efficiently despite orders from the Supreme Court. The mid-day meal scheme in India has been found to intensify existing inequalities, leading to social isolation. In Rajasthan, for example, children from lower castes were often prohibited from using school utensils and had to drink water with their cupped hands, while others freely accessed school utensils. Since many families now depend on the mid-day meal scheme to provide one nutritious meal on school days to the students, the problem of feeding these children has risen during the holidays. The Supreme Court has ordered the continuation of this program in drought affected areas during the holidays too, but it can still be a problem for families in other areas.

Indian states differ financially, with Tamil Nadu and Karnataka potentially implementing the scheme more effectively than UP and Bihar due to higher resources. Recognising the mid-day Meal scheme’s importance, all states should prioritise adequate funding for it over other initiatives. 

  
[The Akshaya Patra Foundation](https://thecsruniverse.com/articles/case-study-how-akshaya-patra-nourishes-millions-of-children-across-india#:~:text=Akshaya%20Patra's%20mission%20is%20to,safe%20midday%20meals%20to%20schoolchildren.), a nonprofit run by ISKCON, has been a key contributor to the success of the Mid-Day Meal scheme. This public-private partnership exemplifies how involving more private players can be beneficial to the programme too. Community driven models with minimal government involvement show another approach that can work for the mid-day meal scheme. Identifying how to incentivise communities to step up is an idea certainly worth exploring.  

While there’s no single solution to these challenges, many depend on government action—or sometimes inaction. This includes more autonomy to the local schools on decision making, and reducing the hold of the state government. Local schools understand their needs best and can make better decisions, especially regarding the mid-day meal scheme’s challenges. The state now has two roles: increase funding for schools to operate independently and enhance inspections to ensure proper implementation of the scheme.

* * *

**About Siddhant Shetty**

Siddhant Shetty is a student of Economics and International Relations at Ashoka University. His areas of interest include diplomacy, public economics and macroeconomic policy. Outside of this he's also a huge Cricket fan.

## Rethinking the Flow of Funds: The National Education Policy and Direct Benefit Transfers

Original: https://www.spontaneousorder.in/p/rethinking-the-flow-of-funds-the-national-education-policy-and-direct-benefit-transfers

Author: Spontaneous Order

Published: 2024-07-29T16:15:47.000Z

Topics: national-education-policy, direct-benefit-transfers, school-choice, foundational-literacy-numeracy

> Direct benefit transfers can transform education and ensure every child’s success

**Summary:**

The National Education Policy (NEP) 2020 targets universal foundational literacy and numeracy (FLN) for all primary children by 2025, yet over 5 crore elementary students struggle with basic reading, addition, and subtraction. Despite the Union Budget 2024-25 allocating Rs 1,20,627.87 crore to education—including Rs 73,008.1 crore for school education, up from Rs 68,804.85 crore prior—46% of school-going children in private schools, mostly low-fee budget ones, remain overlooked as funds prioritize government schools. Schemes like the National Means-cum-Merit Scholarship Scheme (NMMSS) impose bureaucratic hurdles, stringent eligibility, and high administrative costs, penalizing struggling students and fostering inefficiency. From a classical-liberal viewpoint, excessive government spending and control fail; instead, direct benefit transfers (DBT) to students and parents are urged to empower choice, increase parental involvement, spur market competition among schools, and hold them accountable to families rather than bureaucrats. State per capita education spending of ~Rs 5,300 in FY 2022-23 goes directly to schools, sidelining parents. Policymakers must shift to an inclusive DBT model for all children, regardless of school type, to dismantle red tape, reduce corruption, and achieve NEP goals, ensuring every child thrives through freedom and competition.

**Key points:**

- Over 5 crore elementary students lack FLN skills, with 46% in private schools excluded from budgets favoring government institutions.
- NMMSS and similar schemes burden resources with bureaucracy, exams, audits, and exclusions based on arbitrary merit and income thresholds.
- Adopt DBT to students and parents to enable school choice, boost competition, and create direct accountability from schools to families.
- Reduce government control and empower private sector solutions over increased spending to enhance educational outcomes and meet NEP 2025 FLN targets.

**By Nitesh Anand**

* * *

> **Summary:** *In India, the National Education Policy (NEP) 2020 aims for all primary children to achieve basic reading and math skills by 2025. Despite increased funding in the Union Budget 2024-25, many Indian children are still overlooked. Discover how direct benefit transfers can transform education and ensure every child’s success. Join Vagmi Sharma and Nitesh Anand as they uncover surprising insights and bold solutions.*

**Union Budget, NEP, and FLN targets: How are we Faring?** 

Today marks four years since the [National Education Policy (NEP)](https://www.education.gov.in/sites/upload_files/mhrd/files/NEP_Final_English_0.pdf) 2020 came into existence. It emphasizes achieving universal foundational literacy and numeracy (FLN) skills at the primary level by 2025. Aligning with [Goal 4 of the 2030 Agenda for Sustainable Development](https://www.unesco.org/sdg4education2030/en/sdg4#:~:text=SDG4%20is%20a%20commitment%20to,a%20sustainable%20and%20equitable%20world.), the policy aims to develop essential cognitive skills, making FLN in primary schools crucial. Over 5 crore Indian elementary school students currently struggle with basic reading, addition, and subtraction. This underscores the urgency of achieving FLN by 2025.

The [2024-2025 Annual Budget](https://www.indiabudget.gov.in/) reflects this urgency. Indian Finance Minister Ms. Nirmala Sitharaman [allocated](https://theprint.in/budget/loans-of-up-to-rs-10-lakh-for-higher-education-in-domestic-institutions-announced-in-budget-2024/2188038/) Rs 1,20,627.87 crore to the education ministry. Of this, Rs 73,008.1 crore is for school education and literacy, and Rs 47,000 crore is for higher education. The NEP highlights that achieving FLN is vital for educational reform. It relies on the effective functioning of the school education and literacy department. Despite the [increased budget](https://www.indiabudget.gov.in/doc/eb/sbe25.pdf) from Rs 68,804.85 crore in 2023-2024 and the higher allocation to school education over higher education, a cautious approach is necessary.

Reducing bureaucratic control and fostering private sector solutions could [enhance educational outcomes](https://ccs.in/sites/default/files/2023-09/Quality%20of%20Laws%20Toolkit.pdf) more effectively than excessive government spending and intervention. Policymakers must recognize the urgency and significance of FLN. They need to act decisively to support this fundamental goal, ensuring every child in India has the basic skills needed to succeed. [Empowering the students](https://ccs.in/sites/default/files/2022-08/dbt-monograph-march17.pdf), their parents and communities to take charge of their educational needs is key. It is also imperative to note that the budgetary allocations have historically been directed towards Indian children enrolled in government schools, while the 46% of Indian school going children, who attend private schools (majority of them at low-fee budget private schools) are often overlooked. The critical question for FLN targets would remain evasive if the budgetary allocations continue to exclude this significant group of Indian children. Unfortunately, the Union Budget for FY 2024-2025 continues to disappoint.

**The Case of NMMSS: A Missed Opportunity in Educational Funding** 

The current approach to supporting the Department of School Education and Literacy, particularly through the [National Means-cum-Merit Scholarship Scheme](https://dsel.education.gov.in/sites/default/files/NMMSS_Guidelines_22.pdf) (NMMSS) and the [PM POSHAN](https://pmposhan.education.gov.in/) scheme, desperately needs a compassionate overhaul. While these programs aim to support economically disadvantaged students, their execution, riddled with stringent eligibility criteria and academic benchmarks, is leaving many deserving children behind.

Picture a bright young student with dreams of a brighter future, only to see those dreams shattered because they fall short of an arbitrary academic threshold. These conditions, while intended to ensure merit, create significant barriers for the very children who need the most support. Those already struggling due to systemic failures in the education system are further penalized by rigid performance thresholds and income caps. The bureaucratic red tape is not just a financial burden but a moral one. The substantial administrative costs, annual state-specific exams, creation of Technical Support Groups, super checks, physical verifications, third-party audits, and regular trend identification systems drain resources and foster corruption and inefficiency. These layers of bureaucracy [stifle the potential](https://ccs.in/sites/default/files/2022-10/dbt-in-education-policy-brief.pdf) of our nation’s children.

The average per capita expenditure on education by states in India for the [fiscal year 2022-2023 was approximately Rs 5,300](https://prsindia.org/budgets/parliament/demand-for-grants-2023-24-analysis-education). These funds were transferred directly to schools, leaving students and parents as passive recipients of educational services. This system makes schools accountable only to the government, not to the people they are supposed to serve. It’s a system that undermines the very essence of education—to empower and uplift. If our funding model were effective, there would be no need for NMMSS, which will continue until at least fiscal year 2025-2026. This reliance on direct benefit transfer schemes underscores the urgent need for a funding model that puts children and their families at the center. Imagine a system where financial transfers go directly to beneficiaries, creating a direct accountability relationship between schools and parents. This would ensure better use of resources and improved educational outcomes, fostering a dynamic and inclusive educational landscape.

A [direct benefit transfer-centric system](https://ccs.in/sites/default/files/2022-08/dbt-monograph-march17.pdf) would transform the lives of millions of children by:

1.  Increasing parental involvement and choice, allowing parents to select the best educational option for their children.
    
2.  Enhancing market competition, incentivizing schools to improve services to attract enrollments.
    

Moreover, we must recognize that the majority of private school-going students attend low-fee budget private schools. These students often come from middle and lower-middle-class families, where the investment in education is a significant financial burden. The costs associated with these budget private schools, though lower than elite private institutions, are still substantial for these families. By excluding these students from schemes like NMMSS, we are ignoring the financial struggles of families who make tremendous sacrifices to ensure their children receive a quality education. Universal foundational literacy and numeracy cannot be achieved by denying support to students in private schools. The Department of Education must recognize its responsibility to every child in India, regardless of the type of school they attend.

Indian policymakers must recognize the critical need for a shift towards a more efficient, inclusive, and compassionate funding model. By prioritizing direct benefit transfers to students and their families, we can ensure that every child in India has the opportunity to pursue their dreams and reach their full potential. This approach will not only address current inefficiencies but also lay the foundation for a more equitable and dynamic education system in India. It is time to put our children first and create an educational system that truly serves them. A direct benefit transfer model that empowers parents and fosters competition among schools is essential for creating a vibrant and effective educational landscape. The government’s role should be to facilitate this model, ensuring that every child, regardless of their socio-economic background, receives the quality education they deserve.

Every child deserves a chance to dream, to learn, and to thrive. Let us not bind their potential with unnecessary constraints. Instead, let’s empower them with the freedom to choose, the support to succeed, and the opportunity to shine. It is our moral duty to create an education system that recognizes and nurtures every child’s potential, regardless of their background. The future of our nation depends on it.

**An Urgent Appeal: Empower Every Child through Direct Benefit Transfers to Achieve NEP Goals**

In conclusion, while the increased budget allocation for 2024-2025 is a step in the right direction, achieving the NEP 2020’s goal of universal foundational literacy and numeracy demands a more inclusive and heartfelt approach. We must adopt a funding model centered on direct benefit transfers (DBT) for all children in India, regardless of whether they attend government or private schools. Every child deserves the chance to dream, learn, and thrive without the chains of financial barriers and bureaucratic red tape.

Imagine the transformative power of empowering parents to choose the best educational options for their children, fostering a competitive environment that drives schools to excel. Picture a future where no child is left behind, where every young mind can flourish and reach their full potential. This vision can become a reality if we take decisive action now.

We urge our policymakers to embrace this compassionate and practical solution. Let us tear down the barriers that hold our children back and build a foundation of hope, opportunity, and equality. It is time to put our children first, ensuring that every child, no matter their background, receives the quality education they deserve. Let us act with urgency and unwavering commitment to create an educational landscape that truly serves all of India’s children. The future of our nation depends on it.

* * *

**About Nitesh Anand**

Senior Fellow-Policy Impact & Outreach, Centre for Civil Society Nitesh is a Friedrich-Naumann-Stiftung Scholar and an India Fellow with over thirteen years of experience. He holds a Master's in Politics and Technology from Technical University Munich, Germany. Nitesh is a Policy Advisor to the Department of Policy, Ministry of Education, Youth & Sports (MoEYS), Cambodia.

## To improve education, look at game theory

Original: https://www.spontaneousorder.in/p/to-improve-education-look-at-game-theory

Author: Spontaneous Order

Published: 2024-07-25T19:53:45.000Z

Topics: education-policy, game-theory, teacher-incentives, education-regulation

> Game theory can guide how to align teacher incentive for better education in India

**Summary:**

Durgesh Jha argues that game theory reveals misaligned incentives in Indian education policy among stakeholders—teachers, students, parents, school management, and government—leading to negative-sum outcomes. In teacher recruitment as a signalling game, candidates' degrees fail to indicate teaching aptitude or interest, resulting in hires unable to deliver learning outcomes despite appearing competent. Better hiring practices, like requiring sample lessons in real classrooms, can mitigate this. Experts Karthik Muralidharan and Venkatesh Sundararaman show that even marginal performance-linked bonuses for teachers improve student learning by aligning incentives, rewarding good performance and reprimanding complacency. Teacher performance is the central barrier to quality education; resolving absenteeism, complacency, and incompetency generates spillovers to infrastructure and other investments, per Muralidharan and Abhijeet Singh. NEP 2020 credits with recommending merit-based tenure, promotion, and salary structures, but implementation falters amid regulatory games among bureaucrats, unions, and school owners, fostering over-regulation. This burdens low-budget private schools, passing costs to students through poor outcomes. From a classical-liberal lens, game theory equips policymakers to navigate stakeholder interactions, realign incentives, and transform the system.

**Key points:**

- Teacher recruitment is a signalling game where degrees poorly indicate aptitude; implement demo lessons for better hires.
- Performance-linked bonuses, even marginal, improve student learning by aligning teacher incentives.
- Over-regulation from games among bureaucrats, unions, and school managements stifles low-budget private schools and affordable education.
- NEP 2020's merit-based teacher structures address incentives but face implementation hurdles from vested interests.
- Game theory highlights how resolving teacher complacency yields spillovers to broader education improvements.

**By Durgesh Jha**

* * *

Education policy in India is complex and not always productive. Education is considered a social good and for many, the government is an important stakeholder that should provide it. But it is also important that we look at incentives and how they align. Game theory can help here.   

There are two ideas that can help. First, in game theory stakeholders are players who are looking to maximise their gains. In the space for education larger players are teachers, students,  parents, school management, and the government. Second, in their interactions, not all scenarios lead to a win-win outcome. Some of them are negative-sum games. Where for one player to win, the other player must lose. Game theory makes this clear and this can be of advantage when rules are being framed. A helpful insight comes from signalling games. 

In signalling games, what player one signals affects the choices made by player two. Player two has to use the signal to identify if player one is a desirable player to engage with, or not. If player one sends out false signals, choices made by player two will be sub-optimal.

The case of teacher recruitment is a signalling game. The candidate hoping to become a teacher is player one. The school management is player two. The degree or qualification of player one is the signal that player two will use to identify them as a desirable player to engage with, once hired. Candidates obtain degrees to signal desirability. These degrees may not say anything about teaching aptitude and interest of the candidate. Selected candidates are unable to deliver tangible learning outcomes despite being considered competent since the signals do not correspond to their real type, which might be the undesirable one. 

The lesson here is that the hiring process must do better to remove the negative outcome from signalling games. This can be done through better hiring practices and asking teachers to take a sample lesson in a real classroom. 

  
Experts, [Karthik Muralidharan and Venkatesh Sundararaman](https://www.jstor.org/stable/10.1086/659655) highlight that if teachers are provided with even marginal “amounts of performance-linked bonuses” student learning improves. Why this can work is easy to understand, using the game theory logic. Teachers are players too. And how their incentives get affected can improve outcomes. Teachers must be recognised for good performance and reprimanded for complacency or poor performance. 

Among reforms required in education, improving teacher performance is central. It is the main barrier to quality education. Game theory offers insights on how teacher incentives are not always aligned.  [Karthik Muralidharan and Abhijeet Singh](https://riseprogramme.org/publications/indias-new-national-education-policy-evidence-and-challenges.html) also point out that India needs to overcome challenges related to quality teachers. They find out if absenteeism, complacency and incompetency in public school teachers is resolved, it will generate spillover benefits to infrastructural improvements, and other input-based investments, as well.  

To its credit, The National Education Policy 2020 does address teacher incentives to some extent. [NEP 2020](https://www.education.gov.in/sites/upload_files/mhrd/files/NEP_Final_English_0.pdf) recommends “a robust merit-based structure of tenure, promotion, and salary structure” for teachers. Unfortunately, there are many more players and games that make this implementation tough. 

  
Sometimes regulations are a result of games among players with vested interests. Regulatory environments are also a strategic landscape that players like bureaucrats, school management and teacher unions navigate in pursuit of optimal outcomes. School owners too have to navigate the complex regulatory terrain where they struggle to reconcile their financial objectives with the demands of operational compliance. 

Regulations come together through multiple games taking place among different players, but it is the government-industry game that bears a cost. This cost comes through simpler regulations turning into over-regulation. This loss is also passed on to students through poor learning outcomes. This is true in particular, for low budget private schools that have even fewer resources compared to government schools to provide affordable education. They are stifled by unreasonable operational requirements and myopic guidelines. 

Individuals don’t always act rationally. Their choices are affected by many variables that are tough to identify. Despite these challenges, game theory offers critical new insights for policy-makers. Game theory examines how different stakeholders interact, multiple variables are at play, and why incentives matter. In doing so, it can empower policy makers to offer insights that can transform the Indian education system.

* * *

**About Durgesh Jha**

Durgesh Jha is a 2024 Researching Reality Scholar. Currently a postgraduate student of Political Science at the University of Delhi, his areas of interest include public policy, governance, political economy, international relations and sustainable development. He has experience working with organisations like the National Human Rights Commission, Global Youth India, and Project Statecraft within these domains and disciplines.

## States Should Remove the Compulsory Learning of Regional Languages

Original: https://www.spontaneousorder.in/p/states-should-remove-the-compulsory-learning-of-regional-languages

Author: Spontaneous Order

Published: 2024-07-23T15:16:57.000Z

Topics: language-policy, school-choice, migration, english-education

> I used to favour making regional languages compulsory in public schools. Then something changed. I now believe there is no rationale in imposing the regional language on everyone and making the learning of it compulsory. India is not just a country der...

**Summary:**

Partha Samal argues that states should eliminate compulsory regional language learning in public schools, rejecting the top-down 'three-language formula' from National Education Policies since 1968, which denies choice to children and parents. He traces India's evolution from the 1956 States Reorganisation Act's language-based borders—now rejected in new states like Telangana, Chhattisgarh, and Jharkhand formed for administrative decentralization—to a classical-liberal vision of freedom, egalitarianism, and merit over regionalism. In Tamil Nadu, with 34 lakh migrants (2.6% or 18 lakh born outside per 2011 Census), migrant children skip schools due to bullying fears and language barriers, as seen with Assamese kids in areca nut farms. ASER 2022 shows only 24.5% of rural Class 5 children can read English, down from 37.2% in 2016. Instead of mandating Tamil, states should prioritize English teacher recruitment, infrastructure, and a competitive environment welcoming migrants to access jobs and schemes, amid industries like textiles shifting out. Drawing on Periyar and Shivaji for equality, decentralization, and efficiency, Samal concludes compulsion hinders redemption from imposed mindsets and economic progress.

**Key points:**

- States should scrap compulsory regional language requirements in schools to restore choice to parents and children under the three-language formula.
- New states like Telangana and Chhattisgarh reject language-based borders in favor of administrative decentralization.
- Tamil Nadu's 34 lakh migrants face school enrollment barriers for children due to language issues and bullying fears.
- Improve English education in Tamil Nadu, where only 24.5% of rural Class 5 students can read it per ASER 2022, to boost migrant integration and economic competitiveness.
- Governments must foster welcoming cultures for migrants to access jobs and schemes amid shifting industries.

**By Partha Samal**

* * *

I used to favour making regional languages compulsory in public schools. Then something changed. I now believe there is no rationale in imposing the regional language on everyone and making the learning of it compulsory. 

  
India is not just a country derived in part from colonial British administration. It is an idea of freedom, egalitarianism, respect and redemption from the slavery mindset. For instance, Jawaharlal Nehru, once made a statement that is under-appreciated: “Facts are facts and will not disappear on account of your likes”. In his book The Discovery of India, he carefully navigated the history of India’s development and how the vision for India is grander than the allegations that the British invented India. Yet, with regionalist movements simmering on the horizon, India had to enact a radical policy through the States Reorganisation Act of 1956. Indian polity had finally succumbed to regionalist aspirations and through the act, state borders were drawn on the basis of language. 

The rationale of language divisions and the 1956 States Reorganisation Act has in some sense been rejected in our times. Creation of new states like Telangana, Chhattisgarh, and Jharkhand, are examples that can speak of new borders getting carved on the basis of decentralisation and seeking improvements in administration. Not on language grounds, anymore. It’s now important that states also lose the regional language compulsion imposed on school children. The top-down approach of the “three-language formula” taken by National Education Policies since 1968 takes away choice from children and their parents to choose the languages they want to learn. 

According to the 2011 Census, out of the four crore migrants in the country, Tamil Nadu has the third highest migrant populations at 34 lakh persons, after Maharashtra at 79 lakh and Andhra Pradesh at 37 lakh persons. 2.6% of the state’s population at [18 lakh persons](https://www.thehindu.com/news/national/tamil-nadu/migrants-in-tamil-nadu-case-of-much-ado-about-nothing/article29364682.ece) were born outside Tamil Nadu borders. [News reports](https://www.newindianexpress.com/states/tamil-nadu/2021/Oct/30/kids-of-migrant-workers-missing-from-school-data-2377647.html) have also brought attention to how any information on children of migrant workers and how many are being educated is missing. Their parents are apprehensive about sending them to schools because of the fear of bullying and the lack of choices in receiving education in a language they can understand. It was recently found how children of Assamese migrants working in [Areca nut farms](https://www.newindianexpress.com/states/tamil-nadu/2024/Jan/29/migrant-kids-skip-school-join-kin-in-areca-nut-farms-in-tns-coimbatore), are choosing to not go to school.

  
In addition to addressing the [fear-mongering](https://www.thehindu.com/news/national/tamil-nadu/fact-check-fake-posts-fuel-safety-fears-among-migrant-workers-in-tamil-nadu/article66586550.ece) taking place among the Tamil population about migrants, the government of Tamil Nadu should work to make English-language learning better. 

According to the 2022 ASER Report, only 24.5% of children in class 5 in Tamil Nadu’s rural areas can read English, less than the high of 37.2% achieved in 2016 previously. Instead of making Tamil compulsory in schools, why not push for more recruitment of teachers teaching English and improve infrastructure? Those who are interested in preserving their culture can learn and continue higher education in Tamil. With critical industries like [textiles planning to move out of Tamil Nadu](https://www.thehindu.com/news/cities/Coimbatore/tamil-nadu-textile-industry-concerned-about-investments-in-other-states/article67590644.ece) and the state economy being more and more dependent on migration than ever before, it is essential to foster a positive and welcoming culture for them. Instead of forcing them to learn Tamil, the government can create an environment that fosters competition and enables migrant access to the local job market and state schemes. 

It’s important that we adapt the teachings of social reformers like Periyar Ramasamy to our times. Periyar’s Self-Respect Movement spread throughout Tamil Nadu bringing demands for equality and anti-casteism to the forefront. Maharashtra too can take inspiration from the actions taken by Maratha ruler Shivaji, who hailed from a lower social stratum, and strove for relative decentralisation, merit, and efficiency in his administration. If Tamil Nadu is to redeem Periyar’’s dreams, and Maharashtra wishes to pursue its past glories greatness, the compulsory character of their respective regional languages at the educational level must be removed.

* * *

**About Partha Samal**

Partha Samal is a Researching Reality Scholar at the Centre for Civil Society. He is pursuing an integrated MA in development studies at the Indian Institute of Technology, Madras. He is inclined towards an intersectional approach to evaluating migratory movement. Outside of academics, he is a nyctophiliac and continually attempts to write confessional poems.

## Finland’s Education System can Inspire Indian Reforms

Original: https://www.spontaneousorder.in/p/finlands-education-system-can-inspire-indian-reforms

Author: Spontaneous Order

Published: 2024-07-19T16:14:52.000Z

Topics: education-reform, teacher-autonomy, school-autonomy, curriculum-decentralization

> The Indian education system is broken. This is not an opinion but a fact, and our experiences are testimony to it. Remembering how one had to memorise facts and formulas to do well on tests, compete and not collaborate with our peers, and let our abilit..

**Summary:**

The Indian education system is centralized, underfunded, and failing students, with ASER reports showing half of rural fifth-graders lacking basic literacy and numeracy since 2005, and the 2021 National Achievement Survey revealing declining learning levels from 59% in grade 3 to 36% in grade 10. This rote-learning, competition-driven model prioritizes grades over conceptual understanding and problem-solving, perpetuating poverty. In contrast, Finland's top-ranked system (1st in 2019 Educating For The Future Index) succeeds through school and teacher autonomy: educators draft local curricula, select textbooks, and choose methods, backed by trust, selective training, and high professional status. Past Indian reforms, including NEP 2020, have failed to grant true autonomy, leaving government principals unable to hire/fire teachers, fostering unaccountability, while private schools chase exam ranks. A recent Ei study found 80% of math teachers (grades 3-6) faltering on basics, with 27% unable to answer grade 4 questions and 63% grade 7 topics. India's centralized curriculum ignores regional diversity, unlike Finland's collaborative national-local model. From a classical-liberal view, India should adapt Finnish practices: decentralize curricula, empower teachers with upskilling and improvisation freedom, abandon one-size-fits-all and degree obsession to foster genuine learning and economic growth.

**Key points:**

- Indian students show declining learning outcomes, from 59% average in grade 3 to 36% in grade 10 per 2021 National Achievement Survey.
- Finland's education model excels via school autonomy in curricula, textbooks, and pedagogy, ranking 1st globally in 2019.
- NEP 2020 and prior policies fail to deliver teacher autonomy, resulting in unaccountable educators and poor quality, as 80% of math teachers struggle with foundational concepts per Ei study.
- India must decentralize curricula to local contexts and enable teacher improvisation, adapting Finnish trust-based practices without full replication.

**By Ojaswi Anand**

* * *

The Indian education system is broken. This is not an opinion but a fact, and our experiences are testimony to it. Remembering how one had to memorise facts and formulas to do well on tests, compete and not collaborate with our peers, and let our abilities be defined by our grades, makes one realise there’s a lot that needs to be changed in how we learn and how we teach in India.

The Indian education system is centralised. It is also short on funding teaching and learning infrastructure. [ASER reports since 2005](https://thewire.in/education/education-in-india-at-75-challenges-system-students-teachers) reveal that half the fifth grade students in rural India  lack basic literacy and numeracy skills. This may limit job prospects, and even perpetuate poverty. The Indian education system has consistently underperformed in delivering conceptual understanding and problem-solving abilities among students and teachers. The 2021 [National Achievement survey](https://www.deccanherald.com/opinion/indias-dipping-learning-levels-1124732.html#:~:text=8%20and%2010\).-,The%202021%20survey%20reported%20an%20average%20learning%20level%20of%2059,lower%20grades%20to%20higher%20grades.) reported an average learning level of 59% in grade 3, 49% in grade 5, 42% in grade 8, and 36% in grade 10. This shows a trend of steady decline in learning level as one moves from lower grades to higher grades. India can consider an alternative model to change its grim education landscape and foster economic growth.

One model to aspire to learn from is the [Finland Education Model](https://www.educationfinland.fi/sites/default/files/2022-01/00.%20Finnish%20education%20system%20and%20services%20-%20opening%20words%20by%20Jaakko%20Skantsi.pdf). It is a high performing education system. It secured rank 1 in the Educating For The Future Index by The Economist in 2019. What makes it an efficient model is autonomy for schools and teachers. Teachers are involved in drafting the local curriculum, and school policy. Schools also have the authority to select textbooks of their choice and decide their pedagogical methods. 

Giving autonomy demonstrates the trust and value given to schools and teachers in Finnish society. Teaching is a popular profession where even training universities only select the most motivated and talented applicants. Finland provides pedagogical and facilitation training to teachers that makes them proactive and capable of independent decision making in how to run a classroom, professionally and collaboratively. 

There were several attempts made to transform the Indian education system through commissions and policies like the University Education Commission of 1948, the Secondary Education Commission of 1952, the National Education Policy of 1968, 1986, 1992, 2005, and most recently New Education Policy (NEP) 2020. However, none of them have succeeded in making teachers and institutions truly autonomous. 

NEP 2020 does mention pedagogical autonomy and socio-emotional learning. But its implementation has fallen short.  Government school principals do not have the authority to hire or fire new teachers which results in a lack of accountability for teachers, leading them to do the bare minimum or nothing at all. Unfortunately, even in private schools, production of an AIR1 is the priority, and teachers must conform to a syllabus they had no involvement in making. Overall, the Indian education system under-delivers teaching. 

Indian policy emphasises getting degrees instead of training. To become a teacher, there is now a market for paper leakages, cheating, and fake degrees, that can help non-deserving candidates become teaching professionals. As per a [recent study by Ei](https://economictimes.indiatimes.com/industry/services/education/80-maths-teachers-in-india-middle-east-falter-on-basic-mathematical-questions-study/articleshow/111341070.cms?from=mdr), a leading EdTech company,  nearly 80% of math teachers in India had difficulty with foundational maths concepts like algebra, estimation, ratios, logical and proportional reasoning. This study was conducted over two years, and involved over 1300 maths teachers who teach grades 3 to 6 in 152 schools across India, UAE, Oman, and Saudi Arabia. It highlighted that 27% teachers could not answer grade 4 questions correctly, while 63% could not answer questions based on grade 7 topics.

Localising curriculum is also important. Finland’s national core curriculum tries to establish a high level of trust between the national and local school authorities. This approach builds strong collaboration and enhances educational effectiveness and responsiveness. However, in India the curriculum is centralised. The government appoints school boards that govern local school districts. Additionally, the government controls the majority of funding for public schools, giving it significant influence over resources, teacher salaries, and overall school operations.  NEP 2020 has also been criticised for promoting the political agenda of the ruling government, reflecting ignorance of India’s regional and cultural diversity. The curriculum and teaching instructions are uniform across the country rather than being tailored to local contexts.

It is understandable that Finland and India are not the same on per capita GDP, demography and diversity. Complete replication of a model is not a good solution. The system in one country should not be imitated, but good practices can be adapted to another. In a developing country like India, educational institutions and teachers play an instrumental role in shaping young minds and nurturing kids. 

The Indian model needs to let go of a one-size-fits-all approach and move beyond the obsession with marks and degrees. We also need to provide teachers opportunities to learn and upskill. Our teachers should be able to improvise on what should be taught and how to teach it, taking inspiration from the Finnish model. The system should enable teachers to teach, not train race horses.

* * *

**About Ojaswi Anand**

Ojaswi Anand is a Researching Reality Scholar at the Centre for Civil Society. She has graduated in economics from Lady Shri Ram College and has a keen interest in development economics, international relations, and political economics. Beyond academics, she loves to analyse characters in literature and films, and explore their perspectives and motivations.

## India’s Energy Demand: A Decentralised Solution

Original: https://www.spontaneousorder.in/p/indias-energy-demand-a-decentralised-solution

Author: Spontaneous Order

Published: 2024-07-16T14:37:05.000Z

Topics: rural-electrification, solar-energy, decentralization, energy-markets

> Despite India’s economic rise and development, inequality still persists throughout the nation. Most notably, in the energy sector, where the trope of rural areas, where a large proportion of the population still lives, lacking independent, consistent p

**Summary:**

India's economic growth masks persistent rural energy inequality, where most people live without reliable grid power, exacerbated by inefficient government subsidies that create fiscal burdens, administrative waste, and citizen dependency on the state. The author advocates decentralised solar microfarms—community-owned solar panel arrays on unused village land—as a classical-liberal alternative, harnessing India's abundant sunlight for accessible, low-maintenance renewable energy that cuts CO2 emissions 16 times more effectively than gas-fired plants per UN estimates. Drawing from successes like the DWCRA women's self-help groups, which built local economic independence through government-facilitated but community-led initiatives, and Amul's federal cooperative model, where village-level dairy producers own stakes, reinvest profits, and elect farmer-directors, solar microfarms would empower panchayats to pool funds, build infrastructure with government technical aid, generate local jobs, and supply village needs. Connecting to the main grid enables a two-way open market for buying/selling electricity, incentivising surplus production for community revenue while allowing grid reliance during shortfalls. This decentralised approach shifts power dynamics from state control to populace independence, fostering a self-reliant, equitable economy from megacities to villages.

**Key points:**

- Replace inefficient electricity subsidies with community-owned solar microfarms at the panchayat level to achieve rural electrification and economic independence.
- Emulate DWCRA and Amul models by enabling local cooperatives to manage solar infrastructure, create jobs, and reinvest profits into community needs.
- Establish two-way electricity trading between rural microgrids and the main grid to incentivise surplus solar production and generate village funds.
- Solar power offers low barriers to access and 16x greater CO2 emission reductions than gas plants, per UN estimates, aligning with environmental and classical-liberal goals.

**By Adi Lankipalle**

* * *

Despite India’s economic rise and development, inequality still persists throughout the nation. Most notably, in the energy sector, where the trope of rural areas, where a large proportion of the population still lives, lacking independent, consistent power and connectivity with the larger grid, is ubiquitous. Government freebies attempt to solve these concerns by means of subsidies or limited free units of electricity. However, these programs run the risk of administrative inefficiency, maintaining citizens as clients of the state, and a large fiscal burden. While a substantial proportion of modern Indian policy centres around the propagation of such freebies, their unavailing nature prompts a look in the other direction: decentralisation. 

One promising solution lies in the implementation of solar microfarms. This entails unused space in villages transformed into collectively owned solar panel arrays. By harnessing solar energy on a small, community-focused scale, we can address key issues and create a sustainable model for rural electrification. 

Solar power is the logical choice to both develop economic independence and foster renewable energy use. India has no shortage of the Sun; it has the potential to be the most widely accessible energy source, along with its nature of low barrier to access and maintenance. Most of all, solar power more than plays its part in the reduction of greenhouse gas propagation and air pollution, with [UN estimates](https://www.un.org/en/chronicle/article/promise-solar-energy-low-carbon-energy-strategy-21st-century) placing PV solar power plants nearly 16x more CO2 emission-effective than a standard gas-fired power plant. 

The decentralisation experiment is not a new phenomenon by any means; one needs to look no further than the [Development of Women and Children in Rural Areas (DWCRA)](https://ijmer.in/pdf/volume1-issue3-2012/298-300.pdf) for exemplary community ownership of economic development. Under this scheme, self-help groups of women were formed with the intention to support their communities through income-generating activities. With funding and advice provided by the government, women were able to collaborate on developing valuable skills relevant to their local needs while self-designing infrastructural and vocational opportunities. This grassroots approach not only enhanced economic independence but also fostered community participation and decision-making. 

This success has been reflected in the private sector as well, with Amul, the world’s largest dairy cooperative, [decentralising authority and the supply chain](https://www.ijser.org/researchpaper/A-CASE-STUDY-OF-AMUL-COOPERATIVE-IN-INDIA-IN-RELATION-TO-ORGANIZATIONAL-DESIGN-AND-OPERATIONAL-EFFICIENCY.pdf) to devolve power to local producers. Amul’s organisational structure utilises a federal cooperative model, where each structural unit from the village society level upwards operates independently. This allows each unit to take actions best suited to their local conditions and needs. When Amul turns profits, they are in turn redirected to the farmer, making producers the stakeholders. This allows local societies to reinvest their funds into necessary infrastructure and technology, further looping back into increased production and profit. Furthermore, the firm’s board of directors are dairy farmers themselves serving as elected representatives. They have an inherent share in the well-being of the company, and know how to best support their farmer base. 

Similarly, decentralising energy through solar microfarms can replicate this model by empowering local communities to generate and manage their own energy needs. At the panchayat level, villages will pool their funds to develop solar farms to provide energy for their village. The government will provide the know-how and means to develop the infrastructure on behalf of the panchayat. 

Just like Amul, the beauty of the decentralised energy system is the co-operative ownership. With the village constituents being direct stakeholders of the energy generated, they are entitled to the fruits of their labour, receiving power at will. Local employment is created through the development and maintenance of the infrastructure. 

Furthermore, by connecting these independent rural grids to the larger power grid, an open market system of two-way electricity transfer can be initiated. This would allow local cooperative power grids and the main grid to buy and sell electricity units to one another, as opposed to a typical closed system where energy solely flows from the central infrastructure outwards and money flows back in. Local bodies are incentivised to maximise development and production on their solar fields to sell their surplus units back to the main grid, generating community funds for reinvestment or distribution. On rainy days, both figuratively and literally, villages can lean on the larger power grid for their needs. 

The pressing energy and environmental challenges faced by India demand innovative and sustainable solutions. Decentralisation provides a means to change the resource power dynamic to one of the populace having freedom from the chains of economic dependence. Cooperative energy infrastructure has the potential to create a more connected Indian economy that can also care for itself till the smallest administrative unit. As the nation seeks to consolidate its growth from the largest megalopolis to the smallest village, embracing decentralised solar energy solutions can pave the way for a more equitable, prosperous, and sustainable future.

* * *

**About Adi Lankipalle**

Adi is a student at the Wharton School at UPenn, studying in the Huntsman Program. He is deeply interested in the Indian business and political ecosystem's intersection. He's currently pursuing research at CCS studying the privatisation of the Indian school system to improve educational outcomes. Adi was also part of the ePolicy programme, 2024.

## The Hidden Struggles of Maharashtra’s Sugarcane Cutters

Original: https://www.spontaneousorder.in/p/the-hidden-struggles-of-maharashtras-sugarcane-cutters

Author: Spontaneous Order

Published: 2024-07-12T15:21:25.000Z

Topics: sugarcane-labor, migrant-workers, women-health, informal-employment

> Maharashtra is the second-largest producer of sugarcane in the country. The state also has the highest number of sugar mills. Behind this production prowess of the state, the lives of around 1.5 million cane cutters, who are the backbone of the industry..

**Summary:**

Maharashtra, India's second-largest sugarcane producer with the most sugar mills, relies on 1.5 million cane cutters, mostly migrants from drought-hit Marathwada fleeing agrarian distress and job scarcity. These workers, hired in husband-wife pairs via informal unwritten contracts, harvest, load, and transport cane for 12-15 hours daily, earning lump-sum advances of Rs 50,000-60,000 per season—attractive amid local options but marred by non-payment of leaves, unexplained deductions by contractors, and mills' non-involvement in oversight. Women bear extra burdens: 4-5 hours of household chores atop labor, working through illness and pregnancy fearing wage cuts, amid absent basics like water, toilets, and bathrooms harming reproductive health. Early marriages, driven by couple-based work needs, lead to child marriages, early pregnancies, and worksite deliveries without hygiene. A SOPPECOM study of 946 reproductive-age women found 83% using cloth for menstruation, 87% of pregnant women missing checkups due to no leave, 43% cutting cane until the ninth month, and 35% until the seventh/eighth. In Beed, a state committee survey of 82,309 women revealed 13,861 hysterectomies over a decade, linked to early marriage, poverty, health ignorance, water scarcity, and poor facilities. The author laments these 'hidden struggles,' quoting Faiz Ahmad Faiz to underscore women's unremitting toil, concluding sugarcane's sweetness masks cutters' neglected lives, especially women's.

**Key points:**

- Maharashtra's 1.5 million sugarcane cutters, mainly Marathwada migrants, toil 12-15 hours daily in informal husband-wife contracts for Rs 50,000-60,000 seasonal advances plagued by deductions and no paid leave.
- Women cutters endure additional household work, labor through pregnancy, and lack workplace amenities, leading to severe reproductive health crises.
- SOPPECOM survey shows 83% of 946 women use cloth for periods, 87% of pregnant miss checkups, and 43% work until ninth month.
- Beed district committee found 13,861 hysterectomies among 82,309 surveyed women over a decade, tied to early marriage, poverty, and inadequate facilities.

**By Aditya Taur**

* * *

Maharashtra is the second-largest producer of sugarcane in the country. The state also has the highest number of sugar mills. Behind this production prowess of the state, the lives of around 1.5 million cane cutters, who are the backbone of the industry, are neglected. These cane cutters are primarily from the drought-prone Marathwada region of the state.

Lack of job opportunities and huge agrarian distress compel them to migrate to Western Maharashtra. The cane cutters are expected to perform a variety of tasks such as harvesting, loading, unloading and transporting sugarcane to the factory as a couple, with both husband and wife working together. Wages are paid as a lump-sum advance, usually, Rs 50,000 to Rs 60,000 per season, which makes the work attractive for labourers over other work available locally.

### *Nature of Work*

Harvesting sugarcane is labour intensive work, workers have to work for almost 12-15 hours a day. Workers are hired through informal, unwritten contracts in pairs of husband and wife. Because of informality they do not get paid leaves. Sugar mills do not take the responsibility of overseeing wage payments, and contractors who make payments do not settle dues fully. They indulge in wage deductions that are not explained.

### *Hardships Faced by Women Cane-Cutters*

Apart from long working hours women have to work additionally for 4-5 hours to do household chores, which takes a heavy toll on their mental and physical health. Fearing wage cuts, women even work during illness and pregnancy. Unavailability of basic amenities like water, toilets, and bathrooms at the workplace adversely affects their reproductive health.

Cane-cutters usually marry early, in some instances they even get married off as children. As work is done in couples, it makes economic sense for parents who earn their livelihoods through cane-cutting to marry their children off to be eligible for gainful employment. Early marriage often leads to early pregnancy, abortions, and a range of reproductive health issues. These challenges are exacerbated by heavy physical labour before, during, and immediately after pregnancy. Deliveries frequently occur at worksites, where proper hygiene and necessary facilities are lacking.

According to the study conducted by the Society for Promoting Participative Ecosystem Management (SOPPECOM), among the 946 women cane-cutters of reproductive age surveyed, 83% reported using cloth during their menstrual periods. Among the pregnant women surveyed, 87% reported being unable to attend medical checkups due to the lack of available leave from work. Furthermore, 43% of these women continued sugarcane cutting until the ninth month of pregnancy, while 35% worked until the seventh or eighth month. 

In April 2019, The Hindu Business Line reported on the high prevalence of hysterectomies among sugarcane cutters, beginning with the perplexing question: “Why do many women in Maharashtra’s Beed have no wombs?”. Following which, the State Legislative Assembly convened a discussion that led to the formation of a seven-member committee, chaired by Dr Neelam Gorhe, then Deputy Chairperson of the State Legislative Council. The committee surveyed 82,309 women in Beed district, revealing that 13,861 had undergone hysterectomies in the past decade, predominantly aged 35 to 40 years. The committee identified early marriages, lack of awareness on women’s health issues, poverty, insufficient pre-and-post-operative counselling, water scarcity, and inadequate menstrual hygiene and toilet facilities as key factors contributing to the high rates of hysterectomies. 

The lives of the female sugarcane labourers are reminiscent of the famous lines by Faiz Ahmad Faiz, “*ek bakhiya udheda, ek siya, yun umr basar kab hoti hai”.* Translated loosely to say: Unravelling one stitch and putting in place another, how can life be lived in this manner? 

Yet this is how life is lived.  
  
Clearly, the sugarcane is not so sweet for the cane cutters, particularly women.

* * *

**About Aditya Taur**

## Is the Water Crisis in Maharashtra Natural or Manmade?

Original: https://www.spontaneousorder.in/p/is-the-water-crisis-in-maharashtra-natural-or-manmade

Author: Spontaneous Order

Published: 2024-07-05T15:21:17.000Z

Topics: water-crisis, agricultural-subsidies, forest-policy, fiscal-federalism

> Maharashtra is the third largest state of India in terms of land area. The diverse landscape of Maharashtra includes the vast Deccan Plateau, the biodiversity-rich forests of Vidarbha and Western Ghats along with the beautiful Konkan strip. Its diverse ..

**Summary:**

Maharashtra's water crisis is largely manmade, stemming from policy failures rather than solely climate change, argues Pranoti Awalekar from a classical-liberal viewpoint emphasizing incentives, long-term effects, and citizen involvement. The state's real forest cover stands at 16.5%, far below the 33% National Forest Policy target, exacerbating vulnerability through soil erosion and disrupted water cycles. The Jalyukt Shivar Abhiyan, despite Rs 9,630 crore spent over ten years, achieved negligible results—providing water for just 487 people for one year—while incentivizing water-intensive sugarcane cultivation, causing groundwater levels to drop 1-3 meters across 245 talukas between 2014-2019, per GSDA data. Subsidies for deep borewells on plateaus further deplete resources unsustainably. Invoking Milton Friedman's Law of Spending, the piece critiques inefficient third-party fund use; Henry Hazlitt's focus on long-term policy effects; and Barun Mitra's call to think like citizens. Solutions require holistic ecosystem approaches: shifting cropping patterns with farmer input, active forestation, revising borewell subsidies, and addressing fiscal imbalances where Maharashtra receives only Rs 0.08 per rupee contributed to the Centre's pool, hampering welfare. The crisis is reversible through incentive-aligned, sustainable policies.

**Key points:**

- Maharashtra's Jalyukt Shivar Abhiyan wasted Rs 9,630 crore and promoted sugarcane, dropping groundwater 1-3m in 245 talukas.
- Subsidies for deep borewells on plateaus encourage unsustainable extraction, worsening water tables.
- Revise centre-state fiscal shares, as Maharashtra gets only Rs 0.08 per rupee contributed, limiting welfare spending.
- Involve farmers in cropping pattern changes, boost forestation to 33%, and apply long-term policy scrutiny per Hazlitt and Friedman.

**By Pranoti Awalekar**

* * *

Maharashtra is the third largest state of India in terms of land area. The diverse landscape of Maharashtra includes the vast Deccan Plateau, the biodiversity-rich forests of Vidarbha and Western Ghats along with the beautiful Konkan strip. Its diverse topography supports different methods of agriculture, and a diverse culture while being of historical importance. In the middle of all this beauty there is a severe problem that looms: Lack of water. But is that really the case? To find out why this may be so, it’s worth looking at the larger water crisis taking place in the state of Maharashtra.  
  
Every year newspapers and media channels are flooded with news on water crises that highlight that matters are becoming worse each year. On the surface one can say that it is because of climate change but in reality, that may just be one reason. Maharashtra’s water crisis can be understood better by studying policy blunders of the past that have resulted in an unplanned concretisation of the state.

Forests play an important role in the overall ecosystem by helping to maintain the water cycle and preventing erosion of soil. In March 2022, the state’s declared forest area was 61,907 square kilometres, or roughly 20% of its total geographical area. However, the real forest cover was just 16.5% which is well below the target 33% set by the National Forest Policy. This has made Maharashtra more vulnerable to climate change than ever before.

The Jalyukt Shivar Abhiyan was aimed to make Maharashtra ‘drought-proof’ by 2019. It proposed various soil and water conservation activities. But according to CAG’s 2020 report, even after ten years and spending Rs 9,630 crore, the scheme could provide water storage and irrigation potential that can at best provide water to just 487 persons for one year. It’s worth being critical of not just its poor performance but also how it encouraged farmers to grow more water intensive cash crops like sugarcane from the water it managed to store in tanks and reservoirs ([Down to Earth](https://www.downtoearth.org.in/news/water/after-10-years-rs-9-630-crore-scheme-for-drought-proofing-maharashtra-can-provide-water-to-just-487-people-for-a-year-95456)). This had a major adverse impact on groundwater levels. The Groundwater Survey and Development Agency (GSDA) reported that between 2014 and 2019, the water levels dropped 1-3 metres in villages across 245 talukas of Maharashtra. This scheme is also an example of [Milton Friedman’s Law of Spending](https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html). It shows how different persons have different incentives that determine how money is spent. Overall it can be inefficient and wasteful when using a third person’s funds for another as it does not incentivise the spender to economise or seek the highest value.  
  
There is another problem at play. Water tables are typically much lower in plateaus than in plains. Hence, when water levels drop below acceptable levels, heavy drilling machines are needed to dig borewells. Subsidies given out by Maharashtra, encourage people to dig borewells deeper than sustainable, making matters worse to maintain the water tables in plateaus. Other measures like water based cropping patterns, and community-led demand-side interventions are missing too, making the water crisis severe, demanding immediate policy interventions. 

Insight from journalist Henry Hazlitt can guide how these policies get framed. He was of the view that while studying any policy, it’s important we look at its long-term effects, not just immediate effects. There should be due diligence done before the policy is implemented. Continuous feedback from people is also important. Something pointed out by Barun Mitra who talks about how while analysing policy, it is important to think like citizens, not just as experts.  
  
Right now, before we make any stand-alone policies, we need to understand Maharashtra’s ecosystem in a holistic way. Maharashtra’s ecosystem needs changes in cropping patterns. To do this, farmers must be made part of the decision-making process. Active forestation can also help in preventing soil erosion and desertification. To improve the water table, subsidies that encourage people to extract water from deep borewells can be revised. The centre-state fiscal relations too can be revisited as it is hampering overall welfare projects in Maharashtra. In the current tax system, for every rupee contributed to the centre’s divisible pool, Maharashtra gets just Rs 0.08 back. This has hampered welfare expenditure in Maharashtra. It also affects the morale of people of the state.  
  
Water is a natural resource, but the crisis we are facing today is manmade. It’s possible to fight it and work towards a sustainable future.

References:

1.  Water Conservation and Saving in Agriculture, 2019, Government of Maharashtra, [link](https://wrd.maharashtra.gov.in/site/upload/pdf/Water%20conservation%20and%20saving%20in%20agriculture%20low%20res.pdf?MenuID=1379)
    
2.  Chittaranjan Tembhekar, “Maharashtra’s forest cover expands, but way short of 33% tar”, March 9, 2023, Times of India, [link](http://timesofindia.indiatimes.com/articleshow/98504007.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst).
    
3.  “Securing water in a time of climate change through natural ecosystems  
    management: A report to tackle Maharashtra’s water crisis”, June 12, 2024, The Hindu, [link](https://www.thehindu.com/news/cities/mumbai/securing-water-in-a-time-of-climate-change-through-natural-ecosystems-management-a-report-to-tackle-maharashtras-water-crisis/article68259209.ece)
    
4.  [Lokeshwarri SK](https://bloncampus.thehindubusinessline.com/profile/author/Lokeshwarri-SK-12785/), [Parvathi B](https://www.thehindubusinessline.com/profile/author/Parvathi-Benu-15291/)enu, “Are southern States justified in opposing the revenue-sharing model?”, February 19, 204, Hindu Business Line, [link](https://www.thehindubusinessline.com/data-stories/deep-dive/are-states-justified-in-opposing-revenue-sharing-model/article67860164.ece)
    
5.  Barun Mitra, “Key to India’s Prosperity”, Manthan India, [link](https://www.youtube.com/watch?v=SzAzRanBcxM&t=156s)
    

* * *

**About Pranoti Awalekar**

## Indians Must Arrive at the Liberal Frontier

Original: https://www.spontaneousorder.in/p/indians-must-arrive-at-the-liberal-frontier

Author: Spontaneous Order

Published: 2024-06-28T13:48:06.000Z

Topics: indian-constitution, individual-liberty, economic-reforms, public-responsibility

> The constituent assembly took 156 weeks to draft India’s constitution. The long process and series of debates to arrive at shared principles among assembly members reveal their preference for a liberal society. While these members weren’t elected, the

**Summary:**

India's Constituent Assembly took 156 weeks to draft a constitution inspired by the US model, particularly Part III on Fundamental Rights emphasizing individual liberty, yet public indifference to these liberal values has allowed its erosion. Unlike America's success rooted in widespread concern for liberty, as economist Dwight Lee notes, India's constitution faces constant amendments—106 by June 2024, averaging two per year—pushed by interest groups to expand government power, with Part IV's Directive Principles repeatedly triumphing over Part III. The 1991 economic reforms, India's most liberal since independence, were enacted stealthily amid public apathy, as chronicled by Ashok Desai, with reformers avoiding credit. Pratap Bhanu Mehta characterizes Indian democracy as an elite negotiation lacking ideological passion for freedom. The author argues that liberty requires constant public vigilance and an ethic of individual responsibility; without a cultural push to the 'liberal frontier,' constitutional limits fail. Freedom, as a negative construct limiting actions only to prevent harm to others, demands questioning all restrictions and reminding institutions of restraint—responsibilities that cannot be outsourced.

**Key points:**

- India's Constitution has undergone 106 amendments by June 2024, averaging two per year, mostly expanding government at the expense of individual freedoms.
- Part IV Directive Principles have repeatedly overridden Part III Fundamental Rights, unlike the US Constitution's focus on liberty.
- 1991 reforms succeeded despite public indifference, enacted stealthily without celebration or credit to reformers.
- Liberty survives only with public approval of constitutional limits and an ethic of individual responsibility, per Dwight Lee.
- Indians must constantly push liberal ideas, questioning all freedom-restricting acts to foster a culture of restraint.

**By Saurabh Modi**

* * *

The constituent assembly took 156 weeks to draft India’s constitution. The long process and series of debates to arrive at shared principles among assembly members reveal their preference for a liberal society. While these members weren’t elected, they were chosen to represent a diversity of views and many among them had established great credibility through their contribution in taking back freedom and gaining autonomy from British rule.    
  
The remarkable and celebrated part of the constitution, Part III on Fundamental Rights, was borrowed from the ideas of another constituent assembly in 1787. This was the assembly that  conceived the US Constitution. They too had just achieved autonomy from British rule and were keen to set the foundation of a nation on the values of individual freedom. Despite these commonalities, how the two societies panned out after their founding moments is as different as night from day. The success of the American constitution, economist Dwight Lee points out, was “derived from the fact that it was the product of intense and widespread public concern for individual liberty”. This concern is largely absent in India.   
  
In 1991, India carried out its most liberal set of reforms since independence. They increased economic freedom and welcomed free enterprise like never before. But the nation at large was indifferent to them. [Ashok Desai](https://en.wikipedia.org/wiki/Ashok_Desai_\(economist\)), chronicler of these times, reported four years after the reforms that any cause for celebration was absent. These reforms were brought in by stealth. This is a telling sign and a deep reflection on India’s public indifference towards the values of freedom. Even the reformers themselves shied away from taking any credit. Reforms, it seemed, may have just fallen out of the sky, just like India’s constitution. 

To know why this is a cause for concern, it’s worth turning back to Dwight Lee. His remarkable essay, [Liberty and Individual Responsibility](https://fee.org/articles/liberty-and-individual-responsibility/), points out:  
  
“There is no way of shifting to a constitution the responsibility for protecting individual liberty against the abuse of government power. Liberty will not long survive the absence of effective constitutional limits on government, *but constitutional limits on government will not long remain effective in the absence of public approval of those limits*”.  

Our Constitution has failed to limit government and has been preyed upon by several interest groups over the years. As of June 2024, the Indian Constitution has gone through 106 amendments. That’s an average of roughly two amendments every year. Most of these amendments are pushed for by  interest groups to increase the scope of government, decreasing individual freedom as a result. A document meant to safeguard and protect has changed forms to deliver and expand government power, instead. Part IV of India’s Constitution sets it completely apart from its American counterpart. It contains Directive Principles of State Policy. These are ideas that the state “should” pursue. Part III and Part IV of our Constitution are not compatible with each other. Part IV has triumphed over Part III repeatedly.  
  
Another scholar, Pratap Bhanu Mehta in his excellent essay the [Burden of Democracy](https://www.penguin.co.in/book/the-burden-of-democracy/), builds an important characterisation of India’s democracy that goes on to show that our transition post independence differed. Acknowledging what is missing, can become the start of knowing what is needed. An excerpt from his essay summarises this important view of our society:  
  
“Representative government came to be characterised as simply the outcome of a negotiation between India’s elites on the one hand, and colonial powers on the other. Democracy, on this view, was not the object of ideological passion, it was not born of a deep sense of conviction widely shared, but it was simply the contingent outcome of the conflicts amongst India’s different elites, or an unintended by-product of the British having produced too many lawyers adept in the idioms of modern politics. There was no grand design in Indian democracy, and hence nothing to memorialise in the way the American and French revolutions did their democratic transitions.”

Democracy, unfortunately, is not a flywheel. There is no virtuous cycle that will flow once it starts. The value of freedom is always at play in every interaction of an individual. Freedom from foreign rule and economic liberalisation were just two instances from our past, when our society made major strides. But it’s important that we be at the frontier, pushing for liberal ideas, constantly. 

It’s worth emphasising, freedom at its core is a negative construct. It holds that the actions of individuals should be limited only to prevent harm to other individuals, and no more. Any act that restricts freedom, must be questioned. Reminding the government or any other institution for that matter, the importance of restraint is everyone’s responsibility and something that cannot be outsourced. This culture is still missing, and needs to be pushed for. Without it our constitution alone will have very little to offer. In the words of Dwight Lee, “there is no avoiding the fact that liberty will perish if the exercise of liberty is not tempered by an ethic of individual responsibility”.  

References: 

1.  Dwight R. Lee, “Liberty and Individual Responsibility”, April 1, 1987, Foundation for Economic Education. ([link](https://fee.org/articles/liberty-and-individual-responsibility/)) 
    
2.  Ashok Desai, “Liberalisation and Liberalism in India”, 1995, Liberal Times. ([link](https://indianliberals.in/liberal-times/liberalism-in-south-asia.pdf#page=9))
    

Pratap Bhanu Mehta, “Burden of Democracy”, 2017, Penguin India. ([link](https://www.penguin.co.in/book/the-burden-of-democracy/))

* * *

**About Saurabh Modi**

Saurabh participated in the Colloquium on the Dilemma of an Indian Liberal organised at the Centre for Civil Society on 26 May 2024. He is an urban policy researcher and Senior Associate with CCS Academy.

## Steel Sector in India is better off without PSUs

Original: https://www.spontaneousorder.in/p/steel-sector-in-india-is-better-off-without-psus

Author: Spontaneous Order

Published: 2024-06-20T18:45:05.000Z

Topics: steel-industry, psu-privatization, economic-liberalization, industrial-policy

> This article examines the critical role of steel in India’s industrial economy, highlighting the inefficiencies of public sector undertakings (PSUs) compared to private companies, and advocating for privatization to enhance productivity and innovation i

**Summary:**

India's steel sector, vital for industrial growth, lags globally with just 6.6% of 2022's 1,885 million tonnes world production versus China's 54%, hampered by underperforming public sector undertakings (PSUs) like SAIL, which produced 18 MT domestically with over 50,000 employees, compared to private JSW Steel's 27.7 MT with 15,000 employees and Tata Steel's 21.6 MT. PSUs struggle with steel's high capital intensity (Rs 7,000 crore per MT capacity) and demand volatility tied to business cycles, which private firms manage better via efficient funding and flexibility. State enterprises lack competition, stagnating innovation and upgrades—Tata has modernized while PSUs depend on foreign tech and face purchase guarantees that erode quality incentives. CAG reports highlight accountability deficits in PSUs. Steel contributes 2.5% to GDP and employs 2.5 million, so PSU inefficiencies burden downstream sectors like real estate and autos. Drawing on Hayek's insight into dispersed knowledge, the author argues bureaucratic centralization in PSUs prevents efficient coordination, while private incentives excel. Privatizing steel PSUs would spur competition, innovation, and resource reallocation to superior producers, boosting overall sector performance from a classical-liberal viewpoint.

**Key points:**

- India's PSUs like SAIL underperform private peers like JSW and Tata Steel in output per employee and global presence.
- Steel production faces high capital intensity and volatility, which private firms handle better than state-funded PSUs.
- PSUs suffer from stagnant innovation due to lack of competition and purchase guarantees, plus accountability lapses per CAG reports.
- Privatizing steel PSUs aligns with Hayek's dispersed knowledge principle, enabling better market coordination and efficiency.
- Steel sector's 2.5% GDP share and 2.5 million jobs make PSU reform essential to reduce downstream economic costs.

**By Anshu Chowdhury**

* * *

Steel is the backbone of an industrial economy. How India does well on production of steel matters, a lot. Compared to its peers like China, India is unfortunately far behind. Compared to the private sector, India’s public sector undertakings (PSUs) are far behind. India’s poor performance in steel and the poor performance of its PSUs are interlinked. For India’s steel industry to perform better, reducing the role of government can help.       

In 2022, the world crude steel production reached 1,885 million tonnes (MT). China had the largest share in production at 54% with India at just 6.6% of global production (World Steel Association, 2022). Government owned SAIL produces steel only within Indian borders. It produced [18 MT](https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1912965) in 2022. JSW Steel produced [27.7 MT](https://www.jswsteel.in/sites/default/files/assets/downloads/steel/IR/Financial%20Performance/Annual%20Reports%20Steel/22-23/JSW%20Steel%20IR%2022-23_Web_Final.pdf) and Tata Steel [produced 21.6 MT](https://www.tatasteel.com/investors/integrated-report-2022-23/manufactured-capital.html#:~:text=We%20are%20one%20of%20the,Kalinganagar%20and%20Meramandali%20in%20Odisha), just domestically. Both corporations have a global presence with significant levels of steel manufacturing taking place outside Indian borders.  
  
But the worker productivity of government owned SAIL and privately owned JSW Steel and Tata Steel vary considerably. SAIL in its annual report boasted of a workforce of [over 50,000](https://sail.co.in/sites/default/files/ticker/2023-09/SAIL_Annual-Report-2022-2023.pdf) employees, while JSW Steel reported a workforce of [15,000 direct employees](https://www.jswsteel.in/sites/default/files/assets/downloads/steel/IR/Financial%20Performance/Annual%20Reports%20Steel/22-23/JSW%20Steel%20IR%2022-23_Web_Final.pdf). This is a considerable difference that shows a large difference in worker productivity.   
  
On a closer examination one finds that Steel manufacturing is full of constraints that the private sector can balance better than government owned firms. The two largest  constraints are, high capital intensity of production, and high volatility.  
  
On capital intensity, it takes an investment of roughly Rs 7,000 crore to establish a steel plant with a capacity of just one tonne ([PwC](https://www.pwc.in/assets/pdfs/consulting/technology/the-indian-steel-industry-growth-challenges-and-digital-disruption.pdf)). This is a huge investment that the private sector can mobilise faster and efficiently compared to PSUs that rely on state funding.  
  
On volatility, steel demand is subject to seasonal fluctuations and is part of the cyclical industries that are highly responsive to business cycles. During an economic upswing when there is increased demand for automobiles and real estate, the steel demand also rises. When there is a downturn, like a decrease in real estate construction during the monsoon season, it can have a negative impact on steel demand. These cyclical trends often present significant challenges.  
  
Apart from tough constraints, state run enterprises have limitations that make them worse off when compared to their private peers. There are two limitations worth highlighting.  
  
First, lack of competition stagnates innovation and prevents technological upgrades. Private firms like Tata Steel have made significant efforts in the past two decades to gradually replace older facilities, something that state enterprises are yet to catch up on. The fact that the government extends purchase guarantees through other PSUs to procure sub-standard steel as raw materials, removes incentives to maintain quality standards further. Steel manufacturing PSUs do not invest in research and development, either. They are overly dependent on foreign technology from companies such as Mannesmann Demag, Siemens, and L&T.  
  
Second, public officers lack accountability. The Comptroller and Auditor General (CAG) of India in its report on Central Public Sector Enterprises (CPSEs) for FY 2019 revealed significant lapses in financial reporting and internal controls, signalling a lack of accountability.  
  
When PSUs in major sectors like steel manufacturing do badly, they impose costs on firms downstream that use steel as raw materials. Key sectors, such as real estate and automotive, are particularly reliant on steel. In India, steel accounts for about 2.5% of GDP and employs 2.5 million persons, directly or indirectly. Any stagnation within the steel industry affects the state of the overall economy and various sectors related to it.

  
There is a close consensus that is worth repeating here, that a big push needed to improve the steel sector is to privatise PSUs. To know why, we can look up to the insight offered by economist Friedrich Hayek. Knowledge, as he pointed out, is dispersed. Knowledge of the most efficient and cost-effective way to produce steel too, is dispersed. Bureaucratic processes hamper the proper coordination of such knowledge by preventing deep localised knowledge from rising up. PSUs operate by a simplistic centralised policy to address the many regional nitty-gritties of coordination required in steel production. Private incentives and knowledge far outweigh that of government run steel manufacturing companies.  

Privatising steel producing PSUs will not only push for increased competition, but also free up resources to offer increased roles to producers who are able to do it better than them. 

* * *

**About Anshu Chowdhury**

## Kinds of Electricity Markets and the PV Systems Enabled Disruption

Original: https://www.spontaneousorder.in/p/kinds-of-electricity-markets-and-the-pv-systems-enabled-disruption

Author: Spontaneous Order

Published: 2024-06-12T14:48:08.000Z

Topics: electricity-markets, solar-pv, market-liberalization, natural-monopoly

> As I write, it is midnight in Bangkok, Thailand. My air conditioner is keeping me cool, my room is well-lit, and my laptop is functioning. Electricity powers all my appliances and devices. From a quick glance, electricity acts almost like goods in a mar..

**Summary:**

Electricity markets have historically operated as natural monopolies due to grid infrastructure, evolving from simple monopolies serving small areas to segmented structures involving generation, transmission, distribution, and retail as societies urbanize. While transmission and distribution remain monopolistic, competition has been introduced in generation through wholesale markets where multiple producers bid to supply at lowest prices, and in some advanced economies, retail competition allows consumers to choose suppliers. Many countries, including Thailand under an Enhanced Single Buyer model post-1997 Asian Financial Crisis, rely on a Transmission System Operator (TSO) that centrally procures power via reverse bidding, resembling command-and-control with limited competition but potential as a stepping stone to liberalization. Dynamic pricing based on time-of-use further enhances efficiency in advanced markets. Solar PV systems disrupt this by plummeting in cost and rising in efficiency, enabling households to become 'prosumers'—producing their own electricity and competing against utilities. This embodies classical-liberal ideals: private ownership of means of production, voluntary exchange, and market competition emerging at the retail end, even without national liberalization, as seen in the author's Thai home where his PV system creates a personal liberalized market.

**Key points:**

- Electricity markets segment into generation (competitive), transmission/distribution (monopolistic), and retail, with advanced economies achieving wholesale and retail competition.
- Single buyer models like Thailand's Enhanced Single Buyer use TSOs for reverse bidding, offering impartial grid access but lacking full market freedom.
- Solar PV systems empower consumers as prosumers, generating electricity at home and disrupting incumbent utilities through private production.
- Household PV adoption creates liberalized markets via voluntary choice and private capital ownership, bypassing national market structures.

**By Pasamon Pechrasuwan**

* * *

As I write, it is midnight in Bangkok, Thailand. My air conditioner is keeping me cool, my room is well-lit, and my laptop is functioning. Electricity powers all my appliances and devices.

From a quick glance, electricity acts almost like goods in a market of perfect competition, similar to a market selling wheat, for example. Electrons, after all, are electrons. Electricity consumed in the morning for a coffee maker is no different than electricity consumed in the evening for primetime television. They are identical products. Except making electricity available has a high element of central planning involved as opposed to its provision through competition in a free market. 

Historically, in many parts of the world, electricity utilities started off as a [simple monopoly](https://www.sciencedirect.com/science/article/abs/pii/S0957178799000132) with one power producer providing direct electricity to consumers in small villages or towns. This is a feature shared between all goods that need a physical infrastructure like a grid for its delivery. To deliver electricity to end users in an efficient and reliable way requires management of electricity grids and entities running them enjoy a natural monopoly.   

As societies progress, and towns become cities, the business of electricity utilities becomes more complex. Large power producers use large machinery to generate electricity. The source of fuel and location of their operations tends to get further away from city centres. These large power producers need to transmit electricity over long distances using high voltage grids. When electricity reaches cities, it needs to step-down to a medium and low voltage to power our appliances and devices. With increase in this complexity, the simple monopoly structure gets separated into four segments, that of generation, transmission, distribution, and retail. 

For electricity users to benefit from the lowest price possible, competition is necessary. While grid owners and operators act like natural monopolies with single ownership and authority over physical infrastructure in their area, competition in electricity markets is introduced gradually at least in the generation segment.  

Some countries are ahead of the curve and have achieved a state of wholesale competition, where several power producers compete to sell at the lowest price possible and provide in bulk to the electricity market. They manage to do this while maintaining profits from operational efficiency and effective management of fuel cost.  
  
Some countries have taken the state of competition even further to achieve a state of retail competition. In these markets several companies buy electricity from power producers in bulk, and then sell it to individual consumers, to make profits. Consumers have the choice to buy from companies that offer the lowest price. 

Not all countries, though, have developed electricity markets. In these countries, governments support the provision of electricity by providing for infrastructure, and legal frameworks to replace market exchanges. In such economies, producers of electricity take part in a process of reverse bidding, where various entities bid to build power plants, and sell electricity to a single entity which will procure it from them to retail it to end users. This is true for not just the market for electricity but also the market for power sources like coal and liquified natural gas. This structure is known as either a single buyer model or an enhanced single buyer model that has multiple power producers.

The single buyer model is a model close to being a command and control system, that can decide which power producer can sell electricity, at what price, and when. The industry term for this single entity who decides is a Transmission System Operator ([TSO](https://www.sciencedirect.com/topics/engineering/transmission-system-operator)). While the model controlled by TSOs is lacking in free and open market competition, when compared with other models in advanced countries, it can become a potential stepping stone towards a fully liberalised electricity market. TSOs have some elements of competition where they are required by law to be impartial and allow all power producers an equal opportunity to connect with and sell to the grid. These terms are governed by the terms agreed and signed upon in electricity supply contracts.   
  
Advanced economies in addition to electricity markets also have electricity operators who have the capability to offer dynamic pricing that can vary based on time of use and fluctuations in the demand and supply of electricity in the grid. 

There is however a great disruption at sight to this arrangement of electricity markets. This is thanks to the dramatically decreasing prices of Solar PV systems and increase in their efficiency. Solar PV systems are enabling more and more consumers to become power producers themselves by simply installing such systems in their homes. While many countries still lag behind with limitations in technology and non supporting legal framework, the change is inevitable.  
  
As I finish writing this piece, I realise I should have written it during the day. Not just to get more sleep, but also to benefit from consuming electricity generated by my own Solar PV system during the day. 

While Thailand, where I live, may not have the electricity markets similar to those established in advanced countries, but in my home, such a market already exists! The day my Solar PV system started generating electricity for me during the day, I had the choice of consuming it or not. By installing the Solar PV system, I have become a producer and an entrepreneur in the market. I am now competing against the incumbent electricity utilities which sold electricity to me. If I do not want to choose to consume their electricity, I can produce my own. It is my own means of production. 

With voluntary exchange through the market and the private ownership of the means of capital, a liberalised electricity market can now be found at what was once the last part of the value chain: at everyone’s home.

* * *

**About Pasamon Pechrasuwan**

Pasamon Pechrasuwan is currently working as a principal consultant of the Energy, Industrial, and Sustainability business unit of a private consulting company. He is based in Thailand where the electricity industry structure has been operating under the Enhanced Single Buyer model since after the 1997 Asian Financial Crisis. The transition toward a liberalised electricity market is underway with the introduction of the new Power Development Plan. He is a graduate of Austrian Economics Seminar orgnaised by Centre for Civil Society in March 2024

## Why does Corruption Flourish? Case of ‘Cut Money’ in West Bengal

Original: https://www.spontaneousorder.in/p/why-does-corruption-flourish-case-of-cut-money-in-west-bengal

Author: Spontaneous Order

Published: 2024-06-07T11:34:52.000Z

Topics: corruption, west-bengal, state-intervention, austrian-economics

> Corruption is usually described as abuse of public power for private benefit. Corruption arises from the expansion of state power beyond its legitimate bounds. Government authorities often manipulate protocols and laws for personal gain and distort mark..

**Summary:**

Corruption, defined as abuse of public power for private gain, flourishes due to the expansion of state power beyond legitimate bounds, distorting markets and creating rent-seeking opportunities as per classical-liberal theory. In India, rooted in its socialist democratic system, it persists post-Licence Raj through opaque regulations granting bureaucrats and politicians quasi-monopoly powers. West Bengal exemplifies this: Left Front rule (1977-2011) fostered absenteeism and corruption, closing factories like Dunlop and Hindustan Motors, five jute mills, and costing 302,000 jobs. Recent scandals include a Rs 1,300 crore coal scam, Rs 52 crore seized in a teacher recruitment fraud nullifying 25,373 appointments, and a Rs 10,000 crore PDS scam. 'Cut money'—illegal commissions by local politicians for welfare schemes—has institutionalized bribery, with 46% of residents admitting to paying bribes per a survey. Drawing on Austrian economists Rothbard and Mises, the author argues corruption is inevitable in interventionist economies; anti-corruption movements like Anna Hazare's fail as they expand state power. Solution: Shrink government intervention to curb corruption, echoing BR Shenoy's thesis.

**Key points:**

- Expansion of state power creates rent-seeking opportunities, enabling corruption through opaque regulations and permits.
- West Bengal's 34-year Left Front rule institutionalized corruption, leading to industrial closures and massive job losses like 302,000 workers.
- Recent scams in coal (Rs 1,300 crore), teacher recruitment (25,373 appointments cancelled), and PDS (Rs 10,000 crore) highlight ongoing issues, rebranded as 'cut money'.
- Austrian economists Rothbard and Mises show corruption thrives in interventionist states; reducing government intervention is essential to prevent it.

**By Barendra Nath Chakraborty**

* * *

Corruption is usually described as abuse of public power for private benefit. Corruption arises from the expansion of state power beyond its legitimate bounds. Government authorities often manipulate protocols and laws for personal gain and distort market mechanisms. It not only misleads economic incentives and corrodes public trust but also leads to inefficiency, resource misallocation, and economic stagnation. 

Corruption in India has a long history, and its origin is rooted deeply in the foundation of India’s socialist democratic system. Its presence in the public policy discourse is steered usually by a recollection of a series of high-profile “scams” that plagued the country during the rule of the previous government. Numerous cases of corruption still permeate news headlines today and are subjects of public gossip. 

## **Why does corruption flourish?**

Even though the [Licence Raj](https://en.wikipedia.org/wiki/Licence_Raj) has been formally abolished, inefficiency and lack of transparency still persists. Private enterprises no longer need approvals from multiple government agencies. However, regulations remain opaque, and competitive dynamics for permit granting are still restrained. This centralised control empowers bureaucrats, ruling politicians, and mercenary ministers to exploit ample opportunities for bribery. 

In developing countries like India, government rules regulate business activities, which require licences, permits, and authorisations. Multiple government approvals are often needed, which lead to interactions with various public servants to obtain these permits. Such regulations that confer this authority upon officers makes them agents with a quasi-monopoly power in the market. These exchanges are consistent with the theory of rent-seeking ([Tullock](https://onlinelibrary.wiley.com/doi/10.1111/j.1465-7295.1967.tb01923.x), 1967), and overall corruption has negative consequences for economic development. This is visible in West Bengal. 

## **Case of corruption in West Bengal**

For over 34 years between 1977 to 2011, the Left Front ruled the state of West Bengal for seven consecutive terms. Throughout their rule, they have affected the work culture practised by government employees. It has been replaced by a culture of absenteeism and corruption.  
  
During their political terms major factories like Dunlop and Hindustan Motors have shut down. Hundreds of workers have lost their jobs. Another five jute mills closed within a single year. As a result, around 302,000 workers have lost their jobs. 

In 2021, central investigation agencies also exposed a [coal mining scandal](https://www.indiatoday.in/india/story/coal-smuggling-case-cbi-arrests-bengal-anup-majhi-abhishek-banerjee-1857867-2021-09-27), which is estimated to be over Rs 1,300 crore. Several IPS officers, ministers, and high-profile members of the ruling party were incriminated in this case.

This pattern continues in the department of education. In 2022, the Central Enforcement Directorate raided several places in Kolkata and confiscated [Rs 52 crore](https://www.hindustantimes.com/india-news/partha-chatterjee-used-to-take-arpita-mukherjee-for-joyrides-report-101659228152058.html) from the residences of a former West Bengal minister for education. Central agencies also uncovered illegal real estate, linked ostensibly to a potential scam in the recruitment of teachers. Calcutta High Court, nullified appointments of [25,373](https://www.cnbctv18.com/india/politics/teacher-recruitment-scam-impact-on-west-bengal-lok-sabha-election-2024-trinamool-vs-bjp-19400455.htm) teacher appointments across the state. 

The Public Distribution System (PDS) was next. In 2023, a former West Bengal food and supplies minister was arrested for a multi-crore ration distribution [scam](https://timesofindia.indiatimes.com/india/west-bengal-pds-scam-exceeds-rs-10000-crore-claims-ed/articleshow/109255288.cms). The scam involved diverting goods worth over [Rs 10,000 crore](https://timesofindia.indiatimes.com/india/west-bengal-pds-scam-exceeds-rs-10000-crore-claims-ed/articleshow/109255288.cms) away from PDS to the open market.  
  
Corruption is so institutionalised that it has a new name. The ruling party of West Bengal has introduced “[cut money](https://timesofindia.indiatimes.com/india/whats-the-cut-money-that-bengal-is-angry-about/articleshow/69987898.cms)”, instead. Cut money is the modified version of bribery, wherein an illegal commission is levied by local politicians to sanction grants for local area schemes. Citizens who need government services, such as medical aid or any of the welfare schemes, have to pay this cut money, often. According to a [survey](https://transparencyindia.org/wp-content/uploads/2019/11/India-Corruption-Survey-2019.pdf), 46% residents of West Bengal admitted to offering bribes to get their work done, out of which 36% paid bribes multiple times while 10% gave bribes once or twice. Authorities who received these bribes were spread across various departments of the public sector. 

## **How to prevent corruption?**

Corruption is not confined to West Bengal but is a nationwide issue. Every day, citizens witness new corruption cases that involve high-profile ministers, bureaucrats, and even [Chief Ministers](https://m.economictimes.com/news/elections/lok-sabha/rajasthan/situation-in-country-bad-as-2-cms-in-jail-gehlot/articleshow/108950753.cms) from various states. Whether it is at the centre or state level, corruption is pervasive in every government. Austrian economists Murray Rothbard and Ludvig Von Mises offer important insights into what we are witnessing on corruption in India.

Murray Rothbard once [remarked](https://cdn.mises.org/The%20Progressive%20Era_0.pdf), “A vital part of urban progressivism was a frenetic attack on the ‘corruption’ of politicians”. This remark stands true in India’s recent history. Urban progressivism continues to play a crucial role in shaping political discourse and action up to the present time. In 2011, India witnessed a widespread [movement](https://en.wikipedia.org/wiki/2011_Indian_anti-corruption_movement#:~:text=The%20movement%20gained%20momentum%20from,of%20the%20Jan%20Lokpal%20Bill.) led by Anna Hazare in which thousands of common civilians joined in demonstrations against a series of corruption by the ruling politicians and their cronies. Ludvig Von Mises pointed out, rightly, that corruption is an inevitable by-product of an interventionist economy. The more power the government exerts, the more corruption flourishes. This has been true of most government policies, especially in the state of West Bengal.   
  
In the era of increased urban progressivism in India today, the government does advocate expanding democracy and eliminating corruption. The pretext is noble, but the agenda is sinister. Citizens need to be on guard to make sure governments do not manipulate democracy to favour certain groups, while altering political power in the process. Governments are capable of deceiving individuals and organisations ([Newman](https://qjae.mises.org/article/9140-taking-government-out-of-politics-murray-rothbard-on-political-and-local-reform-during-the-progressive-era), 2018). If the government mechanism propagates corruption, one thing that is never going to decrease corruption is more government. The question of how to reduce corruption makes the question of how to reduce government intervention significant. 

*Also read: “[Economics of Corruption](https://indianliberals.in/wp-content/uploads/2021/08/TheoreticalVision_Final.pdf#page=126)” by economist BR Shenoy. In February 1975, he delivered this lecture at the H A College of Commerce, Ahmedabad, the put forward the thesis that corruption is an inevitable by-product of the policy of interventionism.*

* * *

**About Barendra Nath Chakraborty**

Barendra Nath Chakraborty is a Ph.D. scholar at Cooch Behar Panchanan Barma University, West Bengal, India. He is a recipient of the prestigious silver medal in MA Economics. His current endeavors delve into the nuanced application of econometric and time series analysis tools across the domains of macroeconomics, finance and environmental economics. He has completed Austrian Economics Seminar organized by Centre for Civil society.

## Overcoming Obstacles: Street Vendor, Nitya Shankar

Original: https://www.spontaneousorder.in/p/overcoming-obstacles-street-vendor-nitya-shankar

Author: Spontaneous Order

Published: 2024-05-28T23:58:17.000Z

Topics: street-vendors, street-vendors-act, informal-economy, rule-of-law

> A Path to Empowering Victory: The Jeevika’s Fights for Street Vendor Justice Nitya Shankar’s journey as a street vendor symbolizes the financial independence of informal economy workers and their battle against the unnecessary obstacles created by the

**Summary:**

Nitya Shankar, a street vendor at Anna Dosa Point in New Delhi for over seven years, faced state-imposed obstacles when the Municipal Corporation of Delhi (MCD) fined her INR 10,000 for alleged littering under DMC Act sections 357 and 397—where fines should be only INR 50—despite her possessing a Certificate of Vending (CoV) and Letter of Recommendation (LoR). This arbitrary action threatened her family's sole livelihood, children's education, and rent. The Centre for Civil Society's Jeevika app intervened, enabling Nitya to file a complaint and receive legal representation in municipal court. The advocate highlighted the fine's disproportion, her compliance, and violations of the Street Vendors Act 2014 (SVA), which mandates Town Vending Committees for fair treatment and grievance redressal. The judge reduced the fine to INR 1,000, affirming her rights. From a classical-liberal perspective, Nitya's journey exemplifies informal economy workers' financial independence battling unnecessary state hurdles, with poor SVA implementation undermining rule of law. Jeevika empowers vendors through legal aid, knowledge, and confidence, fostering economic freedom and justice for overlooked marginalized groups.

**Key points:**

- MCD fined compliant street vendor Nitya Shankar INR 10,000 instead of INR 50 for littering, threatening her livelihood.
- Jeevika app provided swift legal aid, reducing the fine to INR 1,000 via arguments on SVA violations and disproportionate penalty.
- Street Vendors Act 2014 requires Town Vending Committees for fair vending zones and grievances, but implementation fails rule of law.
- Jeevika equips vendors with tools to challenge arbitrary state actions, promoting empowerment and economic independence.

**By Deepak Sharma**

* * *

**A Path to Empowering Victory: The Jeevika’s Fights for Street Vendor Justice**

Nitya Shankar’s journey as a street vendor symbolizes the financial independence of informal economy workers and their battle against the unnecessary obstacles created by the state. Despite difficulties, she has overcome challenges with assistance from the Jeevika initiative by the Centre for Civil Society.

Nitya Shankar, the familiar presence at Anna Dosa Point in the bustling area of Bhikaji Cama Place in New Delhi for more than seven years, is well-acquainted with the everyday challenges and joys of being a street vendor. However, her world was thrown into turmoil on 11 March 2023, when the Municipal Corporation of Delhi (MCD) issued her a substantial fine of INR 10,000 for alleged littering under the sections 357 and 397 of the DMC Act 1957. As per the DMC Act the fine for these sections should be INR 50 for every violation.

Nitya takes great pride in keeping her surroundings clean. She diligently obtained all the necessary documents, including a Certificate of Vending (CoV) and Letter of Recommendation (LoR), to ensure her legitimacy as a street vendor. However, despite her compliance, the MCD official was unmoved and insisted on the hefty fine, even going as far as threatening police action. This situation was not just about a fine; it posed a real threat to Nitya’s survival, since this food stall is the only means of livelihood for her family, putting her children’s education and monthly rent in jeopardy.

However, Nitya’s story doesn’t end in despair. It takes a powerful turn with the intervention of the Jeevika App, a mobile application launched by the Centre for Civil Society (CCS). This innovative initiative embodies the spirit of empowerment and justice for street vendors like Nitya. The app provides not just legal aid but also a sense of agency, equipping vendors with the knowledge and tools to navigate challenging situations.

**A Fight for More Than Just a Challan: The Street Vendors Act, 2014** 

Nitya’s case goes beyond a simple challan. It raises questions about the implementation of the Street Vendors Act, 2014 ([SVA](https://mohua.gov.in/upload/uploadfiles/files/StreetVendorAct2014_English\(1\).pdf)). This landmark legislation was enacted to protect the rights and livelihoods of millions of street vendors across India. The SV Act mandates the establishment of Town Vending Committees (TVCs) with equal representation from vendors, government officials, and public representatives. These committees are crucial for ensuring fair treatment of vendors, resolving grievances, and designating vending zones. In Nitya’s situation, the seemingly arbitrary fine and lack of due process go against the very spirit of the SV Act, and the fundamental tenets of rule of law itself. This Act emphasizes the importance of respecting vendors’ vending rights and their dignity.

**[Jeevika App](https://play.google.com/store/apps/details?id=com.jeevika&hl=en_US&pli=1): An icon of Hope and Empowerment for Street vendors**

Nitya filed a complaint on the Jeevika Mobile app and shared about unfair treatment by the MCD official. The Jeevika team responded swiftly, requesting her documents and assuring her of legal representation. In the Municipal Court, an advocate from the Jeevika team presented a compelling case, highlighting the financial hardship that challan of INR 10,000 would cause Nitya, and presented her CoV and LoR as undeniable proof of her right to operate the stall under the SVA. He also pointed out the potential violation of the Act’s provisions regarding fair treatment and grievance redressal. Initially, the judge seemed dismissive. But the advocate persevered, and meticulously explained the legalities, emphasizing the disproportionate nature of the fine and potential violation of SVA provisions.

**Justice Prevails: A Reduced Challan and a Restored Sense of Security for Street vendors**

After presenting all the necessary documents the Municipal Court Judge acknowledged the legitimacy of Nitya’s documents and the advocate’s arguments, recognizing the importance of the SVA in protecting vendors’ rights. The challan amount was reduced from INR 10,000 to INR 1,000. The Jeevika team not only provided legal aid but also addressed Nitya’s fear of police harassment and, most importantly, instilled confidence in her, to handle future interactions with authorities.

Nitya’s story is a powerful testament to how the Jeevika App empowers market vendors. In one of the interactions with her fellows, she acknowledged Jeevika App to be  more than just legal aid; but as a beacon of hope, fostering a sense of empowerment and justice within the street vendor community. This case highlights the critical role of such initiatives and the SVA in ensuring a level playing field for street vendors. Jeevika App not only protects their rights but also equips them with the knowledge and confidence to navigate the complexities of the system. It’s a story of resilience, legal victory, and, ultimately, the triumph of a system that empowers its most vulnerable members. Nitya’s case is just one example of the challenges faced by street vendors. 

Her journey underscores the transformative power of initiatives like the Jeevika App in empowering marginalized groups. Beyond merely offering legal aid, it serves as an emblem of aspiration, igniting a flame of empowerment and justice within the street vendor community. By leveraging technology and legal advocacy, the app not only safeguards their rights but also fosters economic freedom and empowerment for those whom we encounter daily but yet often overlook. 

Watch the full video: [Nitya’s Jeevika Justice story](https://www.youtube.com/watch?v=pdTfQYWWugc) 

Read another street vendor, Jai Prakash’s story \[[here](https://spontaneousorder.in/street-vendors-unyielding-struggles-and-their-battle-for-rights/)\]

* * *

**About Deepak Sharma**

Deepak Sharma is an electronics graduate from the University of Delhi and a champion of the cause of street vendors, as a leading member of the street vending policy impact and outreach work , he is currently working as Associate at Centre for Civil Society.

## Reimagining Targeted Public Distribution System with AI

Original: https://www.spontaneousorder.in/p/reimagining-targeted-public-distribution-system-with-ai

Author: Spontaneous Order

Published: 2024-05-25T13:21:59.000Z

Topics: public-distribution-system, ai-in-policy, decentralization, spontaneous-order

> The Targeted Public Distribution System (TPDS), the largest beneficiary-centric programme in India covering 81.35 crore population, is a well-planned policy with noble intentions meant to provide essential food commodities at affordable prices. However,..

**Summary:**

India's Targeted Public Distribution System (TPDS), covering 81.35 crore people under the National Food Security Act 2013, aims to provide affordable food grains but suffers from inaccurate beneficiary mapping, leakages, inefficient supply chains, opacity, and limited portability. While SMART-PDS addresses some issues like transparency and portability via technology, it overlooks human psychology and structural flaws: top-down central allocation from surplus states, weak incentives per Friedman's Law of Spending hierarchy (participants lack economizing motives), and absence of spontaneous order from voluntary exchanges. The author proposes a classical-liberal reversal: AI-driven bottoms-up demand planning where states use big data on crop yields, consumption, and health records to estimate district-level nutritional gaps, shifting the Centre to bulk procurement and fortification. This decentralizes incentives, expands grain variety, reduces pressure on water-intensive crops in Punjab-Haryana, and promotes ecological sustainability. Rule-based AI incentives link Fair Price Shop (FPS) grain allocations to beneficiary ratings via ePOS and ONORC portability, fostering competition and customer-centricity. AI optimizes transport/warehouses by minimizing wastage, with PPP enhancing outcomes and elevating incentives up Friedman's hierarchy. Mimicking spontaneous order, GPS data enables efficient routing. This yields nutritional security, healthier workforces, job creation, and economic progress, provided biases in data are addressed and skills/culture for Responsible AI are built.

**Key points:**

- Replace TPDS top-down allocation with AI-driven decentralized demand planning using state-level data on crop yields, consumption, and nutritional deficiencies from health records.
- Implement rule-based AI incentives linking FPS grain allocations and margins to beneficiary ratings and sales via ePOS, ONORC portability, and grievance modules to drive competition and customer-centricity.
- Apply AI to GPS and wastage data for optimizing transport routes/warehouses, with payments tied to efficiency and PPP to introduce competition and mimic spontaneous order.
- Shift supply chain actors up Friedman's Law hierarchy through incentives, reducing leakages and enabling ecological sustainability by diversifying grains beyond wheat/rice.

**By Kajal Kiran**

* * *

The Targeted Public Distribution System (TPDS), the largest beneficiary-centric programme in India covering [81.35 crore population](https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1897933#:~:text=The%20National%20Food%20Security%20Act%2C%202013%20\(NFSA\)%20provides%20for,comes%20to%20about%2081.35%20crore.), is a well-planned policy with noble intentions meant to provide essential food commodities at affordable prices. However, it has been criticised extensively for its key operational shortcomings like:  

1.  Inaccurate mapping of beneficiaries
    
2.  Leakage of food grain and diversion of food grains
    
3.  Inefficient supply chain management
    
4.  Lack of transparency and accountability
    
5.  Limited portability
    

The Centre has initiated a technology-driven SMART-PDS to address challenges like inefficient supply chain, transparency and portability, but it fails to address challenges posed by human psychology.

Here are three key structural deficiencies in the current policy.

1.  **Top-down program** with the Central Government allocating resources to states based on procurement from net food surplus states. 
    
2.  Like most government programs, it falls in the lowest rung of *Friedman’s Law of Spending hierarchy* (each participant in the supply chain has **weak incentive** to economize and seek highest value)
    
3.  It is not a *Spontaneous Order* created by the unplanned voluntary exchanges between the participants but a **centralised system** handed down by the Government
    

**How do we overcome these challenges?**

Gear Reversal: A Bottoms-Up Drive with AI

Apply AI on big data sets like crop yields and consumption patterns from various states to identify demand-supply gaps. Thus, instead of a top-down bulk-allocation approach by the Centre, state governments can leverage AI to estimate grain requirements linked to on-ground demand from various districts. 

The SMART-PDS, expected to provide data on consumption patterns, when integrated with the public health care system can identify prevalent nutritional deficiency diseases. This can turn our food security program into a nutritional security champion when AI is applied to data from district health centres to raise demand that is better aligned with nutritional gaps faced by the targeted beneficiary group in a district. 

A **decentralised demand planning approach** will serve beneficiaries more efficiently, delivering nutritional and food security. While the Centre can focus on efficient bulk procurement and nutrient fortification, the states are **incentivised** to provide accurate demands for their nutritional gap fulfilment. This will eventually expand the variety of grains covered under the scheme and reduce demand pressure on surplus states like Punjab and Haryana to grow water-intensive crops (wheat and rice). This is an *ecologically sustainable long-term program* than the current top-down approach of surplus allocation of grains.

Better nutritional security will mean a healthier and more efficient workforce in states that can attract better private investments. The result is more job creation and economic progress of the states. On the other hand, AI driven health record analysis will scale up the identification of malnutrition at grass root level with speed and help in combating the same. *Thus, a **decentralised demand process** will have a compounding effect on the overall economy.* 

**Rule based Incentives that matter**

SMART-PDS coupled with the implementation of One Nation One Ration Card (ONORC) can equip Fair Price Shops (FPSs) with ePOS devices. A grievance redressal module can be plugged into this digital ecosystem to enable beneficiaries register complaints or rate an FPS. These initiatives can feed granular level data to AI algorithms.

AI can bring in **rule-based incentive schemes** that will eventually shift user behaviours. An allocation-cum-margin system based on performance of ration shops will incentivise FPS to seek high ratings from beneficiaries because grain allocation in future is linked to ratings. This will not only reward the better performing shops but also create competition and bring beneficiary satisfaction into the equation that has been missing so far. 

When margins are linked to quantity of grains sold but grain allocation itself is linked to beneficiary ratings, it will incentivise customer centricity amongst FPS owners. The 100% portability with ONORC will also incentivise customer centric behaviour as FPS owners wouldn’t want to lose beneficiaries to neighbouring ration shops.

**Rule based incentive schemes powered by AI** can be designed for the transport and warehouse partners. Minimum wastage algorithm rules will automatically pick up the most efficient routes, transport companies and warehouses across the supply chain. Payments to these partners could be linked to delivering minimum wastage during the transport or storage process. Also, a Public-Private Partnership (PPP) approach to supply chain management will greatly enhance competition and outcomes.

***Incentives coupled with competition** can move transport, warehouse and ration shop players up the Friedman’s Law of Spending hierarchy.* 

**Mimicking Spontaneous Order with AI**

In the real world, efficiencies emerge as Spontaneous Order systems evolve with time, participation and competition. GPS tracking data under the SMART-PDS can enable AI to identify more efficient transport routes and storage facilities to reduce time, wastage and logistic costs. AI algorithms can create competition by rewarding efficient logistic vendors or minimise storage waste by analysing spare warehouse capacity in a given location during a given season.

The future of Public Policy looks promising in the era of AI but we need to watch out for existing biases in historical data, build the desired skill set and promote a culture of analysis that are some of the prerequisites for this leap into the realm of *Responsible AI*.

* * *

**About Kajal Kiran**

Ms. Kajal Kiran, Founder & Director of Investment Sprouts, an investment advisory firm, holds a B.E in computer Science & Engg. along with MBA in Systems & Finance from T.A Pai Management Institute, Manipal. She has completed ePolicy for Young Leaders organized by Centre for Civil Society in 2023

## APMCs: The Farmers’ Mouse-trap in the Agriculture Industry

Original: https://www.spontaneousorder.in/p/apmcs-the-farmers-mouse-trap-in-the-agriculture-industry

Author: Spontaneous Order

Published: 2024-05-19T11:16:20.000Z

Topics: agriculture, apmc, farm-reforms, agricultural-subsidies

> In 2020, the Government of India (GoI), in an attempt to solve the chronic problems within the agriculture sector, passed three contentious farm laws that were a cause for major political uproar. These laws were a definitive departure from the protectio..

**Summary:**

Indian agriculture is hampered by Agriculture Produce Marketing Committees (APMCs), statutory monopsonies established by states that force farmers to sell wholesale produce only through licensed arhtiyas, who exploit information asymmetries to buy low at or near minimum support prices and sell at market value, pocketing the difference after taxes. This system stifles price discovery, burdens small farmers with high costs if they opt out, fosters corruption, and neglects promised market services like storage and transport. The 2020 Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act—colloquially the Mandi Bypass Act—sought to override state APMC laws nationally, allowing farmers to sell directly outside mandis to enable competition, better prices, and service improvements. Drawing on Mises and Hayek, the author argues this aligned with purposeful action and dispersed knowledge but faced fierce protests, mainly from Punjab and Haryana—India's grain bowl—where APMCs generate state revenue and arhtiyas form a key vote bank and funding source for politicians. These states' protectionism has locked farmers into water-depleting wheat and paddy, exporting groundwater via exports. The Act's flaws included no stakeholder consultation and risks for small farmers lacking alternative services. Despite repeal, reforms are urgent: dismantle APMC monopsony at state or national level, provide safety nets like affordable crop insurance and efficient procurement/storage, and redirect fertilizer subsidies to infrastructure such as irrigation, transport, warehousing, and processing to boost investment and productivity.

**Key points:**

- APMCs create monopsonies that prevent price discovery and primarily benefit arhtiyas and state governments at farmers' expense.
- The Mandi Bypass Act aimed to allow farmers to sell produce outside APMCs, fostering competition and better services.
- Protests in Punjab and Haryana were driven by revenue losses for governments and arhtiyas as a major vote bank.
- Essential reforms include eliminating APMC monopsony, implementing crop insurance and efficient storage, and shifting subsidies to agricultural infrastructure.

**By Arul Gupta**

* * *

In 2020, the Government of India (GoI), in an attempt to solve the chronic problems within the agriculture sector, passed three contentious farm laws that were a cause for [major political uproar](https://frontline.thehindu.com/the-nation/agriculture/india-at-75-epochal-moments-2020-farmers-protests-take-the-country-by-storm/article65722271.ece). These laws were a definitive departure from the protectionist policies governing the sector and were viewed as the largest reforms since the series of technological and policy changes of the 1960s, also known as the ‘Green Revolution.’ However, the three laws were repealed after a year of back and forth with stakeholders. 

One wonders, what if the policy hadn’t been repealed? What were the incentives and disincentives for the stakeholders? Did the policy make intuitive sense? If so, why did people collectively oppose this law? One of the laws among the three and the biggest bone of contention was the *Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020*, colloquially known as the Mandi Bypass Act.

Ludwig von Mises in his book ‘[Human Action: A Treatise on Economics](https://mises.org/online-book/human-action/chapter-i-acting-man/1-purposeful-action-and-animal-reaction)’ says “Action is will put into operation and transformed into an agency, is aiming at ends and goals, is the ego’s meaningful response to stimuli and to the conditions of its environment, is a person’s conscious adjustment to the state of the universe that determines his life.” To understand the sentiment that prevailed against the laws, we need to first understand the change in the state of the universe that took place. Let’s analyse it the Austrian way!

Agriculture in India is a matter of the State List, i.e., it is subject to legislation by individual states. As mentioned before, Indian agriculture is subject to very stringent regulation, even post the 1991 economic liberalisation. One such regulation is the [Agriculture Produce Marketing Committee (APMC)](http://arthapedia.in/index.php/Agricultural_Produce_Market_Committee_\(APMC\)#:~:text=Agricultural%20Produce%20Market%20Committee%20\(APMC\)%20is%20a%20statutory%20market%20committee,issued%20by%20that%20state%20government.), a statutory market committee constituted by State Governments for trade in certain notified agricultural, horticultural, or livestock products. The system was envisaged as a platform to enable farmers to sell their produce at fair prices while extending market-led services such as transportation, warehousing, and processing. However, there’s a caveat, which  undoes the market process. The caveat is that farmers in the jurisdiction of the APMC can only carry out wholesale marketing activities (the first sale) in the notified agricultural commodities through licensed commission agents (*arhtiyas*) of the APMCs who are subjected to taxes and licence fees.

What this feature does is it creates a monopsony – many sellers selling to a single buyer, disabling price discovery. The people who benefit the most out of this system are the *arhtiyas* as they are able to purchase produce at or just above government-set minimum support prices and sell the goods at their true market value, pocketing the difference after paying taxes to the state government, making complete use of the asymmetry in information. Furthermore, small and medium farmers who opt out of the system face much higher marketing costs and are unable to generate profits. To add salt to the wounds, there has been very little development of market-led services for agriculture and corruption has bred like mosquitoes near stagnant water.

The Mandi Bypass Act (as the colloquial name suggests) was to break the monopsony at the national-level, overruling state laws by permitting farmers to sell to buyers outside the APMC to facilitate price discovery and promote the development of alternative markets that force APMCs to offer better services as they try to survive by staying competitive. It provides the farmer with options to sell in alternative markets which offer them the highest value for their produce. However, this was protested with no compromise and it was demanded that all the three laws be repealed.

Interestingly, most of the protests were concentrated in Punjab and Haryana, ‘The Grain Bowl of India’, where the APMCs are well-established, since the taxes collected are a major source of revenue for the governments and the *arhtiya* community is a major vote bank and source of funding for the politicians of these states. It is also a fact that these protectionist markets have incentivised farmers to only grow wheat and paddy which has severely affected the water tables in these states. These are also a major part of India’s exports, essentially implying that India is exporting groundwater. 

Even though the Mandi Bypass Act brought with it the promise of solving some of the problems in the current system, it came with some problems of its own. Friedrich Hayek in ‘[The Use of Knowledge in Society](https://fee.org/articles/the-use-of-knowledge-in-society/)’ asserts that “every individual has some advantage over all others because he possesses unique information of which beneficial use might be made, but of which use can be made only if the decisions are left to him or are made with his active cooperation.” Policymakers formulated these new laws [without any consultation with the stakeholders](https://www.thehindu.com/news/national/no-record-of-consultations-on-farm-laws/article33552859.ece), lacking complete information of the situation on the ground. The GoI acted unilaterally and brought the new laws, first as ordinances, then as laws, with little discussion, passing them by virtue of their majority. Secondly, the APMCs already have a well-established market. If the small and marginal  farmers  aren’t  able  to  arrange market-led services at affordable costs independently, it would force them to return to the APMC Mandis to sell their produce.

Albeit, the current situation of agriculture screams for reforms and I, like most other economists, bat for it. Primarily, it must be ensured that the monopsonistic features of APMCs are done away with, be it at the state-level or at the national-level, while ensuring that there is a safety net that farmers can fall upon during slow seasons, beyond the loan-waiving political prasad that hurts all taxpayers. 

A safety net would entail providing affordable crop insurance while ensuring efficient procurement and storage of food crops. Affordable crop insurance allows farmers to transfer the risk of crop failure by paying a small premium which doesn’t inhibit their ability to produce in the next cycle whereas efficient procurement and storage of crops helps stabilise the supply, and thus, the prices of crops. This should be complemented with policies that take away subsidies from fertilisers and focus them on agricultural infrastructure such as irrigation, transportation, warehousing, cold storage, and agricultural processing to incentivise investment in these capital goods as they are the missing link in Indian agriculture.

* * *

**About Arul Gupta**

Arul Gupta is an economics graduate from St. Stephen's College interested in Public Policy, Urban Planning, and Sustainable Development. He has completed Austrian Economics Seminar organized by Centre for Civil society.

## Dollar Crisis in Bangladesh – Lens of Austrian School of Economics

Original: https://www.spontaneousorder.in/p/dollar-crisis-in-bangladesh-lens-of-austrian-school-of-economics

Author: Spontaneous Order

Published: 2024-05-03T15:39:28.000Z

Topics: austrian-economics, exchange-rate-policy, monetary-policy, bangladesh-economy

> In 1997, Bernard Lewis insightfully wrote in his article, “When people realize that things are going wrong, there are two questions they ask. One is, ‘What did we do wrong?’ and the other is ‘Who did this to us?’ The second scenario gives rise t

**Summary:**

Bangladesh's dollar crisis, marked by forex reserves falling from $48 billion in 2021 to $20 billion in February 2024, stems from poor economic management and central bank interventions that artificially prop up the taka's value, distorting market price discovery according to the Austrian School of Economics. These policies, including multiple regulated exchange rates for exporters, importers, and remitters, have fueled 9.37% average inflation from November 2022 to October 2023, eroded purchasing power, and hampered imports, as exemplified by Meghna Group's $78,000 daily demurrage costs for stranded ships despite local payments. In contrast, nations like China, Cambodia, India, and Vietnam improved outcomes by allowing market-driven devaluations. The author advocates minimal central bank interference, urging a free-floating taka to enable supply-demand equilibrium, efficient resource allocation, and self-correction—echoing IMF conditions for its $4.7 billion loan, resisted due to RMG lobbies and import dependencies. Policymakers should redirect resources to inflation control, revenue enhancement, forex rebuilding, and inclusive growth, requiring political will for a market-driven transformation to avert further instability.

**Key points:**

- Bangladesh's forex reserves plummeted from $48 billion in 2021 to $20 billion in 2024 due to fixed exchange rates and poor monetary policy.
- Central bank interventions distort currency price discovery, causing high inflation (9.37% average 2022-2023) and trade imbalances, per Austrian School principles.
- Allow the taka to float freely to restore market equilibrium, make exports competitive, and curb imports.
- Implement IMF-mandated reforms like floating rates alongside inflation control and revenue boosts for economic stability.

**By Maksudur Rahman**

* * *

In 1997, Bernard Lewis insightfully wrote in his [article](https://www.jstor.org/stable/20047913), “When people realize that things are going wrong, there are two questions they ask. One is, ‘What did we do wrong?’ and the other is ‘Who did this to us?’ The second scenario gives rise to conspiracy theories and a sense of paranoia. However, the initial question prompts a different thought process: ‘How do we put it right?’”

The recent economic history of Bangladesh has seen a continuity of broken economic policies, yet 2023 was the most challenging year ever, even surpassing the difficulties seen during the 2008 global financial crisis. Although outside factors contributed to the beginning of economic problems, a delay in tackling inflation and currency rate swings made matters worse. These problems have gotten worse due to inadequate domestic reform capabilities, poor implementation, and inappropriate policies.

**Forex Crisis Unfolding**

The currency reserve fell from a peak of around $48 billion in 2021 to a little over $20 billion in February 2024, according to [official statistics](https://www.thedailystar.net/business/economy/news/forex-reserves-go-above-20-billion-3550331) from the Bangladesh Bank. The decline has been continuous for nearly two years. Bangladesh has been experiencing severe fiscal instability and a dollar crisis, mostly as a result of poor economic management and a lack of adequate monetary policy. 

Additionally impacted by this issue is the nation’s capacity to fulfil its financial commitments abroad. For instance, Meghna Group of Industries (MGI), a $1.2 billion Bangladeshi conglomerate, experienced a serious [currency issue](https://www.aljazeera.com/economy/2023/2/23/severe-dollar-crisis-hobbles-bangladesh-businesses) in January 2023 when trying to import necessities like cooking oil and sugar. Despite having sufficient funds in the local currency, and having paid the full amount to Agrani Bank (the guarantor for the transaction), MGI found themselves short of US dollars. Due to the bank’s inability to settle the payment, they were required to pay $78,000 in shipping demurrage per day while the ships were stranded in the port.

**Central Bank Intervention: A Double-Edged Sword**

Through manipulation of official and market-based exchange rates, the central bank tried to maintain an artificially inflated value for the local currency. independent of market forces. To make the situation even worse, multiple regulated rates applied to various groups such as exporters, importers, and those sending remittances. However, market-set exchange rates can offer a way out for a nation like Bangladesh, which has a large trade imbalance. Market rates can assist in maintaining trade balance by making imports more expensive and exports cheaper.

Nations like China, Cambodia, India, and Vietnam had adopted a strategic approach by allowing the market to set the rate, leading to a devaluation of their currencies and better policy outcomes. Unfortunately, Bangladesh Bank’s inability to make sound policies led to an average [9.37% inflation rate](https://www.bssnews.net/business/156860) from November 2022 to October 2023. This high inflation rate has led to a sharp increase in living expenses, which has decreased the purchasing power of consumers.

**Towards a Market-Driven Economy**

Through the Austrian School’s lens, such central bank interventions are inherently disruptive. It distorts the natural price discovery process of currencies in the free market. The Austrian School advocates for minimal intervention in the economy, emphasizing that prices, including exchange rates, should be set by market forces of supply and demand which is key to economic equilibrium. 

According to the foundations of the Austrian School, an economy that is driven by the market and not influenced by the central bank is more robust and able to self-correct. The market would more accurately represent the actual status of the economy and enable a more effective use of resources if the taka was allowed to float freely. This was also a condition set by the IMF for the $4.7B loan it provided  to stabilize the economy. However, the government was reluctant to implement such measures because of the powerful RMG (Ready-Made Garment) lobby and import-based economy.

**What to Expect Next**

Keeping an artificially fixed exchange rate for the Bangladeshi taka, ostensibly to protect the economic interests of the people, is ultimately detrimental to the very group it aims to safeguard. The resources saved from not having to defend a fixed rate could then be redirected to provide targeted policy reforms such as controlling inflation, increasing revenue collection, and improving forex reserves. Policymakers should focus on broad-based and inclusive growth to reduce inequality.

This transformation will not be easy. It will require political will and effective policy implementation. The year 2024 presents a new opportunity for Bangladesh to learn from its past mistakes and to chart a structural change towards a market-driven economy. By minimizing central bank intervention, allowing the Taka to float freely, and letting market forces determine prices, Bangladesh can restore its economic equilibrium. The question remains, “How do we put it right?” The answer lies within the collective will of the nation and its ability to embrace change and forge a new path forward.

* * *

**About Maksudur Rahman**

Maksudur Rahman is a Prometheus fellow at Students For Liberty. Rooted in his South Asian heritage, Maksudur's advocacy explores the challenges and opportunities that libertarians encounter in regions where such ideas are nascent yet hold vast potential. He has completed Austrian Economics Seminar organized by Centre for Civil society.

## Street Vendors’ Unyielding Struggles and Their Battle for Rights 

Original: https://www.spontaneousorder.in/p/street-vendors-unyielding-struggles-and-their-battle-for-rights

Author: Spontaneous Order

Published: 2024-05-03T15:07:01.000Z

Topics: street-vendors, street-vendors-act, corruption, rule-of-law

> Jai Prakash, a street vendor, made the journey from Chapra, Bihar, to Delhi, driven by the desire to create opportunities for his family. Having established his cycle repair shop in Vikaspuri West Delhi in 1978, he had already woven a rich tapestry of s..

**Summary:**

Jai Prakash, a street vendor in Delhi since 1978 with valid Certificate of Vending (COV), Letter of Recommendation (LOR), and elected Town Vending Committee (TVC) member since 2018, faced illegal demolition of his cycle repair shop and seizure of his Rs 3,000 vending cart by Municipal Corporation of Delhi (MCD) on 7 March 2023, despite presenting documents. MCD demanded a Rs 4,000 fine for release, exemplifying corruption and disregard for due process. Through the Jeevika App by Centre for Civil Society, Jai Prakash connected with fellows who filed a case in Delhi High Court on 13 July 2023, securing a stay order on 20 July 2023. Though MCD initially resisted, the cart was released without fine after insistence. This underscores systemic violations of the Street Vendors Act 2014, which mandates identity cards for certified vendors, 30-day eviction notices, and alternate vending sites, yet officials harass vendors routinely. From a classical-liberal viewpoint, the story highlights the urgent need to enforce legal protections, combat corruption in executive agencies, hold officials accountable, and amplify voices of marginalized vendors through civil society legal aid to prevent such injustices.

**Key points:**

- Despite valid COV, LOR, and TVC membership, MCD demolished Jai Prakash's 1978-established shop and seized his Rs 3,000 cart on 7 March 2023 without notice.
- Jeevika App facilitated filing in Delhi High Court on 13 July 2023, yielding a stay order on 20 July 2023 that led to cart release without the demanded Rs 4,000 fine.
- Street Vendors Act 2014 requires 30-day eviction notices, alternate sites, and prohibits harassment of certified vendors, yet officials routinely violate it.
- Enforce the Act strictly and prosecute corrupt officials to protect street vendors' rights and livelihoods.

**By Deepak Sharma**

* * *

Jai Prakash, a street vendor, made the journey from Chapra, Bihar, to Delhi, driven by the desire to create opportunities for his family. Having established his cycle repair shop in Vikaspuri West Delhi in 1978, he had already woven a rich tapestry of service to the local community. 

Jai Prakash has all the essential documentation, such as the Certificate of Vending (COV) and Letter of Recommendation (LOR) given by the Municipal Corporation of Delhi (MCD). These certificates confirm his legal status as a street vendor. In 2018, Jai Prakash was elected as a Town Vending Committee member from the West Zone TVC 2.  However, it did not give him immunity or any sense of relief  against the corrupt officials at local government offices. This story revolves around the demolition of his shop and goods seized despite valid documents, and his fight for justice and recognition, putting his struggles as a street vendor in focus. 

**The Incident: Unjust Eviction and Seizure of a Street Vendor’s Cart**

An incident took place on 7 March 2023. On this day, the MCD came unannounced and unexpectedly removed Jai Prakash’s  Shop, which has been at the same location since 1978, and seized his vending cart. Despite possessing valid documents, his shop was dislodged without prior notice or explanation, sparking concerns about due process and the rights of street vendors. Jai Prakash diligently presented his legal documents to the MCD, demonstrating his compliance with regulations. However, his pleas were disregarded, and authorities resorted to force. The value of Jai Prakash’s vending cart, estimated at 3000 rupees, extended beyond monetary worth, representing years of dedication, his family’s livelihood, and his integral role within the local community. 

The next day, when he went to get his vending carts released from MCD, they asked him to pay a fine of Rs. 4000. The amount may seem meagre to some, however, for a cart priced at Rs 3000, the penalty of  Rs.4000 was unjustified by all means. He felt let down by the system. Feeling cheated, humiliated and defeated, he returned and shared the incident with his friends, asking them for their advice. This was not happening to Jai Prakash for the first time. Previously, Jai Prakash was forced to pay hefty fines, which were incurred on him based on baseless claims, and he was contemplating resigning to his fate of being violated quite regularly.

**Assistance: Mobilising Support for Street Vendors Through Legal Intervention of Jeevika App**

Since Jai Prakash was a TVC member, the [Jeevika App](https://play.google.com/store/apps/details?id=com.jeevika&hl=en_US&pli=1) team had contacted him earlier to share about its legal awareness and aid services. This time after his rights were violated again by the Municipal Corporation of Delhi (MCD), Jai Prakash knew he had support available. Through the app, Jai Prakash complained and got connected to the Jeevika team from Centre for Civil Society. With the help of the Jeevika team, Jeevika Fellows were sent to Jai Prakash, who heard his grievances and prepared a case fact sheet for him. The case was filed in the  Delhi High Court on 13 July 2023, and on 20 July 2023, Jai Prakash got a stay order from the Delhi High Court. After careful deliberation, the Judge passed an order in his favour.

Jai Prakash, high on justice, went to the MCD with the court’s order to get his vending cart released. His dreams soon came crashing down when the MCD refused to release his vending cart without paying a substantial fine. Jai Prakash tried rationalising with them while saying that he is a member of TVC and he should not have to pay to get his vending cart back, but his plea fell on the corrupt official’s deaf ears. The spat continued for a while, and eventually, Jai Prakash convinced MCD to release his cart without any fine. Jai Prakash’s thirst for justice was hence quenched. Despite this incident, he is undeterred and continues to advocate for street vendor recognition and rights in his local community and among the Town Vending Committee. 

**Upholding Street Vendors’ Rights and Combating Corruption**

According to the [Street Vendors Act of 2014](https://mohua.gov.in/upload/uploadfiles/files/StreetVendorAct2014_English\(1\).pdf), every street vendor who has been issued a certificate of vending under subsection (1) of Section 3 of the Street Vendors Act receives an identity card to undertake vending operations. If a vendor is left out of the survey, local officials cannot evict them. Alternatively, law enforcement must provide a 30-day notice to the vendor before eviction. If eviction occurs, the Act states that authorities must provide alternate locations for vendors to continue their vending activity. Despite this, official agencies such as the police and the Municipal Corporation continue harassing and evicting vendors illegally. The Act prohibits such actions.

This highlights the impending need to enforce the Act and hold corrupt officials accountable for their actions. Jai Prakash’s story is not an isolated event. One can visit other articles in this periodical to see how many other Street Vendors have similar stories and have been affected by this slacking off of executive entities in our country. It is about time that grievances and issues of weaker sections of our society are given a voice. Without this, our reality will be no different than a horror movie. Jai Prakash’s story doesn’t end here. He continues to be an active Street Vending community member and participates in processions promoting street vendors’ rights. 

Read the full story of [Bhupender’s Battle for Justice](https://spontaneousorder.in/bhupenders-battle-for-justice-a-triumph-for-street-vendors-in-delhi/), another street vendor in Delhi.

* * *

**About Deepak Sharma**

Deepak Sharma is an electronics graduate from the University of Delhi and a champion of the cause of street vendors, as a leading member of the street vending policy impact and outreach work , he is currently working as Associate at Centre for Civil Society.

## Bhupender’s Battle for Justice: A Triumph for Street Vendors in Delhi

Original: https://www.spontaneousorder.in/p/bhupenders-battle-for-justice-a-triumph-for-street-vendors-in-delhi

Author: Spontaneous Order

Published: 2024-04-19T15:18:28.000Z

Topics: street-vendors, legal-empowerment, street-vendors-act, bureaucratic-overreach

> Bhupender’s story epitomizes the struggles of street vendors in Delhi, highlighting the need for legal advice and aid. Facing Unjust Challenges as a Street Vendor It is often said that hard and honest work is the best way to earn a livelihood. However,

**Summary:**

Bhupender, a tea seller in Delhi's Rajendra Nagar Market earning Rs 400-500 daily, faced unjust harassment from MCD officials on February 14, 2024, who issued a challan under sections 357 and 397 of the Delhi MCD Act, 1957, despite his valid Certificate of Vending (CoV) and Letter of Recommendation (LoR). The court initially imposed a Rs 5000 fine—far exceeding the Rs 50 prescribed—leaving him vulnerable. This exemplifies widespread exploitation of street vendors by corrupt officials, turning honest work into a battle for survival. The Centre for Civil Society (CCS), advocating a classical-liberal approach, counters this through the Jeevika mobile app, providing free legal aid rooted in the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014. This Act mandates Town Vending Committees, vendor surveys, and Grievance Redressal Committees to protect vendors, who form 2% of India's urban population and sustain urban economies. With Jeevika's support, Bhupender contested the fine; on February 17, 2024, the court recognized his documents and reduced it to Rs 500. CCS argues that equipping vendors with legal knowledge dismantles bureaucratic overreach, affirming their dignity as nano-entrepreneurs and promoting rule-of-law over arbitrary power.

**Key points:**

- Despite possessing valid CoV and LoR, Bhupender received an unlawful challan and Rs 5000 fine, reduced to Rs 500 via Jeevika legal aid.
- Street Vendors Act 2014 establishes TVCs, surveys, and GRCs to protect vendors' livelihoods against harassment.
- Jeevika app by CCS delivers one-click legal support, enabling vendors to challenge corrupt officials effectively.
- Street vendors, 2% of urban population, face routine evictions; legal empowerment upholds their rights as essential urban entrepreneurs.

**By Deepak Sharma**

* * *

Bhupender’s story epitomizes the struggles of street vendors in Delhi, highlighting the need for legal advice and aid.

## Facing Unjust Challenges as a Street Vendor

It is often said that hard and honest work is the best way to earn a livelihood. However, when judicial forces set to protect one’s basic rights are unjust, simply the act of carrying out honest hard work becomes a fight for sustenance. Such is the story of Bhupender, a hardworking tea seller (*chaiwala*) from Rajendra Nagar Market, central Delhi. He has been  an integral part of his local community for the past decade. Bhupender runs a small tea stall near the BLK-Max Super Speciality Hospital. This stall is his only means of livelihood to support his family through the earnings scraped together each day.  Yet, like countless other street vendors, his path to securing a dignified livelihood is fraught with unnecessary, unwanted and unanticipated obstacles.

## The Impact of Unlawful Challans on Street Vendors

On the morning of February 14th 2024, MCD officials visited Bhupender and other co-vendors’ shops in the Rajendar Nagar market. Bhupender, like other vendors of the area, has all the requisite legal documents to carry out vending activities such as the Certificate of Vending (CoV) and a Letter of Recommendation (LoR). Despite his efforts to explain that he possessed these valid documents, the MCD officials issued a challan against him under sections 357 and 397 of the Delhi MCD Act, 1957 for encroaching on public land and depositing waste. Both these sections deal with the question of cleanliness in  the area including the disposal of garbage and other sanitary issues. The prescribed fine under these sections is Rs 50 each. However, when Bhupender appeared in the Metropolitan court on the appointed date, the judge imposed a fine of Rs 5000  and instructed him to pay it within 3 days. This amount might seem meager to many, however, for a street vendor who barely manages to earn Rs 400-500  a day, the amount is significant. The encounter left Bhupinder  feeling helpless and vulnerable.

What happened with Bhupender is not an isolated event. Many vendors, not only in the Rajendra Nagar market but all around Delhi and beyond, share similar experiences. Such unlawful challans and evictions have become a part of every small scale urban entrepreneur’s  routine and has turned earning a livelihood into a battle for them. One can ask , why street vendors? What can be done to help them? Weak and vulnerable, unarmed with the knowledge of their basic rights, street vendors have become an easy target for corrupt local officials. We at the Centre for Civil Society believe that by equipping vendors with knowledge of the legal structures in place to protect their rights, such as the Street Vendors Act of 2014, and by providing easily accessible legal aid free of charge, the present conditions of street vendors can be considerably improved.

## The Role of Legal Empowerment for Street Vendors

The Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, which took effect on 01 May, 2014, is aimed at safeguarding the livelihoods of street vendors and regulating their activities across urban areas nationwide. This legislation addresses various issues pertaining to the protection of vendors’ rights, ensuring their social security, and managing urban street vending in a balanced manner that also promotes public welfare. Among its provisions, the Act calls for the establishment of Town Vending Committees (TVCs), mandates surveys of street vendors, and facilitates the resolution of disputes through Grievance Redressal Committees (GRCs). Street vendors, who constitute approximately 2% of the urban population, play a crucial role in the urban landscape, supporting themselves through various vending activities such as selling fruits, clothing, cooked and uncooked meals, and more. Preserving their rights is therefore imperative given their integral contribution to urban life.

## Bhupender’s Journey Towards Justice as a Street Vendor

Keeping in mind the perils of street vendors and ethos of the Union Act, Center for Civil Society designed the Jeevika Mobile App, which is an accessible online platform that makes legal aid and advocacy available to the street vendors at the convenience of one click. 

Fortunately for Bhupender, Veer Bhadra, a respected figure in the market, emerged as a ray of hope. Bhadra guided Bhupender to seek recourse through the Jeevika mobile app. Bhupender lodged a complaint on the app. With the assistance of the Jeevika team, an advocate was allotted to help Bhupender. With the advocate’s guidance, Bhupender lodged a complaint on February 15, 2024, marking the beginning of his journey towards justice. The wheels of justice, though initially daunting, began to turn in Bhupender’s favor. Despite the metropolitan judge imposing a substantial fine of Rs 5000 during the initial hearing on February 15, 2024, Bhupender refused to capitulate. Armed with determination and supported by the Jeevika team lawyer, Bhupender attended subsequent hearings, where the validity of his vending documents was vehemently defended.

## A Victory for Street Vendors

On February 17, 2024, Bhupender’s perseverance bore fruit as the metropolitan court acknowledged the legitimacy of his vending documents. In a significant victory, the fine was reduced from Rs 5000 to Rs 500, aligning with the stipulations of the DMC Act. This outcome not only spared Bhupender from an unjust financial burden but also underscored the efficacy of legal support provided through initiatives like  Jeevika mobile app.

## The Broader Impact on Street Vendors

Bhupender’s account represents street vendors’ persistence in the face of adversity. Their everyday hardships often go beyond the everyday challenges of running a small stall, including the potential of harassment and exploitation. However, initiatives such as Jeevika mobile app provide a ray of hope for street vendors who need legal assistance and representation. The reduction in Bhupender’s fine demonstrates the power of constructive support and the commitment of initiatives like Jeevika  to protect the rights of street vendors. Beyond legal successes, these achievements have broader cultural ramifications, indicating a greater awareness of the dignity and legitimacy of these nano-scale entrepreneurs and their contributions to the urban landscape.

As Bhupender continues to run his stall at Rajender Nagar market, his story serves as a reminder of the value of legal empowerment and collective action in protecting the rights of the street vendors.

* * *

**About Deepak Sharma**

Deepak Sharma is an electronics graduate from the University of Delhi and a champion of the cause of street vendors, as a leading member of the street vending policy impact and outreach work , he is currently working as Associate at Centre for Civil Society.

## The Fallacy of Planning Development at Attappady

Original: https://www.spontaneousorder.in/p/the-fallacy-of-planning-development-at-attappady

Author: Spontaneous Order

Published: 2024-04-12T17:27:02.000Z

Topics: central-planning, tribal-development, local-governance, paternalism

> The Tribal Block of Attappady Attappady is a tribal block in Kerala that has received wide national attention for its poor socio-economic indicators including high infant mortality rates. Having an area of 735 km2 the block is as large as a district and..

**Summary:**

Attappady, a 735 km² tribal block in Kerala with 30,460 tribals and 34,473 non-tribals per 2011 Census, suffers high infant mortality despite heavy government intervention via the Integrated Tribal Development Project, including community kitchens, alcohol bans, and free healthcare. Drawing on Hayek's 'The Use of Knowledge in Society,' the author argues central planning fails because it ignores dispersed local knowledge: community kitchens shifted diets from nutritious millets to rice, reducing health and devastating millet farmers; forced hospital deliveries clashed with ancestral customs, fostering distrust despite incentives; and the 1996 alcohol ban spurred illicit liquor networks, required extra excise forces, and impoverished residents via cross-border travel. Ludwig von Mises warns restricting freedoms leads to decline, as seen in sidelined traditional Oorukoottam village councils. The classical-liberal solution: government must retreat from paternalistic planning, empower Oorukoottams for local problem-solving, protect tribal lands from alienation, maintain law and order, and intervene only on serious market failures, allowing individual choices to drive development.

**Key points:**

- Central planning via community kitchens in Attappady replaced millet-based diets with rice, harming nutrition and local farmers' livelihoods.
- The 1996 alcohol ban increased illicit liquor supply, necessitated more government resources, and further impoverished the community.
- Government-imposed healthcare ignored tribal customs like hamlet deliveries, eroding trust despite free services and incentives.
- Empower traditional Oorukoottam village councils to enable local decision-making and restore community autonomy.
- Limit government to protecting tribal lands, ensuring law and order, and addressing market failures only.

**By Anand S Unni**

* * *

## **The Tribal Block of Attappady**

Attappady is a tribal block in Kerala that has received wide national attention for its poor socio-economic indicators including high [infant mortality rates](https://timesofindia.indiatimes.com/city/kochi/kerala-tribal-infant-deaths-continue-unabated-in-attapadi-region/articleshow/89959041.cms). Having an area of 735 km2 the block is as large as a district and has a diverse geography and population. According to the 2011 Census, 30,460 tribal people and 34,473 non-tribal people call Attappady their home. The tribal groups comprise mainly the Irula, the Kurumba, and the Muduga communities.

The tribal development activities in the region are coordinated through the [Integrated Tribal Development Project](https://itdpattappady.kerala.gov.in/2018/03/24/itdp-attappady/) which works as part of the Scheduled Tribe Development Department, Government of Kerala.

A casual visit to Attappady will make one aware of the large presence of the government machinery that, to achieve its goal of bringing development to tribal communities, constantly interferes in every matter of life from providing cooked meals through [community kitchens](https://www.business-standard.com/article/pti-stories/ker-govt-to-expand-community-kitchens-across-attappady-116101901096_1.html) to banning sales of alcohol in the region. Even after crores of rupees spent in multiple schemes managed by various departments every year, the region remains backward.

## **The Paternalistic State in Action**

Friedrich Hayek in his essay “[The Use of Knowledge in Society](https://fee.org/articles/the-use-of-knowledge-in-society/)” suggests that the most important problem of central planning is that governments cannot have all the knowledge but it is in the form of “dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess”.

Consider the case of the community kitchens which was a flagship initiative of the Government of Kerala to provide cooked food for the tribal community in Attappady. [Studies](https://www.researchpublish.com/upload/book/The%20Community%20Kitchen-8021.pdf) point out that the intervention shifted food habits from traditional items such as millet to products bureaucrats picked such as rice. Attappady has for a long time farmed and consumed millets and this shift in diet meant that the nutritional intake was reduced thereby [negatively impacting](https://www.onmanorama.com/content/mm/en/kerala/top-news/2021/12/13/projects-galore-attappady-tribes-food-crisis.html) the health of the community.

Also, with centrally planned public distribution systems and community kitchens, there was no local demand for millet, and the livelihood of numerous millet farmers in Attappady was directly [affected](https://www.thehindu.com/sci-tech/agriculture/The-good-are-not-wanted/article60430393.ece). This led to a decline in millet production which ironically the government plans to rejuvenate through a separate [millet village scheme](https://www.stdd.kerala.gov.in/millet-village).

Healthcare is another area where government planning has failed. Even when healthcare services are provided for free and those seeking healthcare at government establishments receive monetary compensation (ideally you are given money if you go to a hospital), the community is still [reluctant to approach formal healthcare institutions](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7320563/). An important reason for this is that government healthcare systems have been forced on the people from outside and neglected the traditional practices followed by the community. For instance, as per local customs, a baby should be delivered by a mother within their hamlets as people believe this is necessary for the baby to receive the blessings of their ancestors. Though it may be scientifically unsound, rejecting it outright by maligning the system altogether and forcing pregnant mothers to come to hospitals for delivery has created distrust among the population. A better approach to tribal healthcare has been followed by the [Tribal Health Initiative](https://tribalhealth.org/) in Sittilingi, Tamil Nadu wherein local and traditional knowledge has been integrated into modern medicine.

Another instance of government planning in Attappady going haywire is the case of the [alcohol ban](https://www.thenewsminute.com/kerala/attapadi-lessons-how-state-should-not-tackle-alcoholism) in the region. Framed as a policy that would solve the menace of alcoholism, Attappady was made a no-liquor zone in 1996. While the intention of the centrally planned policy was good, the outcomes turned out to be counter-productive in the long run. Attappady experienced an increase in the supply of [illicit liquor](https://www.newindianexpress.com/states/kerala/2014/aug/23/despite-checks-illicit-liquor-trade-thriving-in-attappadi-651427.html?botrequest=true&) immediately following the ban as the demand for alcohol continued unabated. To tackle the illicit liquor network, the government spent even more resources as a [large contingent of excise personnel](https://timesofindia.indiatimes.com/an-excise-squad-will-be-set-up-at-attappady-based-on-the-request-made-by-the-delegations-that-visited-the-region-following-the-reports-of-malnutrition-deaths-several-committees-that-visited-the-region-had-raised-concern-over-the-illicit-liquor-brewing-in-the-region-for-the-squad-15-posts-have-also-been-created-/articleshow/22098257.cms) had to be placed in the region. Furthermore, as the ban did not apply to the region bordering Attappady, people travelled every evening to Anakkatti in neighbouring Tamil Nadu to purchase alcohol. Thus the ban directly led to people consuming illicit liquor supplied by a newly formed network of bootleggers or having to travel large distances, the excess money spent [impoverished the community further](https://www.downtoearth.org.in/news/sinking-in-illicit-liquor-41606).

## **Village Councils for More Freedom**

Similar to many tribal communities in the country, [land alienation](https://www.thehindu.com/news/national/kerala/Tribal-land-alienated-in-Attapady/article12153055.ece), [social exclusion](https://rrjournals.co.in/index.php/rrjss/article/view/49/36), and [logistical and geographical impediments](https://thewire.in/rights/in-keralas-attappady-adivasis-are-being-excluded-from-development) have meant tribal communities in Attappady lag behind other sections of society in Kerala. However, this does not mean that the community is incapable of making informed decisions for themselves. When the government prescribes to people what they should and should not do, they are denying the freedoms and local knowledge of the people.

Economist Ludwig von Mises asserts that as soon as one starts to restrict freedom, “one enters upon a decline on which it is difficult to stop”. Intending to bring development to Attappady, central planning by the government without considering local and individual choices has fallen into this decline which has done more harm than good.

Attappady traditionally had a hamlet-level governance system called *Oorukoottam* (Village Council) headed by the *Oorumoopan* (Village Head) where various people in the hamlet could deliberate and develop solutions for local problems. [Studies](https://www.downtoearth.org.in/news/victims-of-development-41614) have pointed out that these traditional committees became insignificant as the government took decisions on their own without consulting them.

Moving forward, the government machinery must step back from planning development in Attappady and give space for people to develop their solutions based on their individual choices and preferences. The first step the government can take is to empower and divulge powers to *Oorukoottams* so that society can be given a chance to solve their problems wherever possible. The government’s primary role should be to ensure that tribal lands are protected (there are numerous [cases](https://www.thenewsminute.com/kerala/kerala-s-attappady-illegal-sale-protected-tribal-lands-continues-unhindered-165444) where protected lands are illegally sold), the law and order system is maintained, and intervene only when there are serious market failures.

* * *

**About Anand S Unni**

Anand S Unni is the co-founder of Nayaneethi Policy Collective, a social sector startup. He previously underwent the Mahatma Gandhi National Fellowship programme at Palakkad, Kerala. He has participated in ePolicy for Young Leaders, Austrian Economics Seminar and Prism Policy Championship organised by Centre for Civil Society.

## Origins and Relevance of a Spontaneous Order

Original: https://www.spontaneousorder.in/p/origins-relevance-spontaneous-order

Author: Spontaneous Order

Published: 2024-04-04T12:46:04.000Z

Topics: spontaneous-order, hayek, austrian-economics, indian-society

> Spontaneous order is defined as those social structures that emerge organically and spontaneously over a long period of time from individual uncoordinated actions of a large number of people without any central guidance. It is a key concept in the liber..

**Summary:**

Spontaneous order refers to social structures like trade, language, money, and moral codes that emerge organically from uncoordinated individual actions without central guidance, a core libertarian concept originating with Michael Polanyi's essay and popularized by Austrian economists Carl Menger, Ludwig von Mises, Friedrich Hayek, and Adam Smith in works like 'The Theory of Moral Sentiments' (1759) and 'Wealth of Nations' (1776). The author argues it enables voluntary cooperation aligning individual self-interests—distinct from selfishness—with societal good, countering fears of anarchy raised by Kautilya's Saptanga doctrine or Hobbes' view of human nature, as self-interested exchanges like trade benefit all without state intervention. Hayek emphasizes its bottom-up nature versus top-down planned order, highlighting superior adaptability to complex, diverse societies amid uncertainty. Critiques from conservatives and religious thinkers decry its 'irrationality' against divine or planned cosmos, yet everyday examples like mall crowds reveal emergent codes. In India, with 9,000-year-old Indus Valley roots fostering Samaaj (society), Sarkaar (government), and Bazaar (market), spontaneous order manifests in rickshaw pullers' locally negotiated standard prices via shared language and geography, underscoring its role in historical adaptation and prosperity.

**Key points:**

- Spontaneous order emerges from individual actions without central planning, as theorized by Polanyi, Austrian School thinkers, and Adam Smith.
- Hayek contrasts its adaptable bottom-up approach with rigid top-down planned orders, better suiting complex societies.
- Self-interested actions, unlike selfishness, produce societal benefits like trade, countering anarchy concerns from Kautilya and Hobbes.
- Indian examples, such as rickshaw price consensus among pullers, illustrate spontaneous order rooted in shared identity and geography.
- The concept reveals how order arises from chaos, fundamental to libertarian understanding of social and economic systems.

**By Akansha Sinha**

* * *

Spontaneous order is defined as those social structures that emerge organically and spontaneously over a long period of time from individual uncoordinated actions of a large number of people without any central guidance. It is a key concept in the libertarian line of thought. 

The idea of spontaneous order originated with Michael Polanyi’s essay “[The Growth of Thought in Society](https://www.jstor.org/stable/2550108),” wherein he is credited with coining the term ‘spontaneous order’. The proponents of the Austrian School of Economics, led by Carl Menger, Ludwig von Mises, and Friedrich Hayek, also popularised the idea in their social and economic theories. Further, Adam Smith developed the concept of spontaneous order extensively in both ‘The Theory of Moral Sentiments’ ([1759](https://www.ibiblio.org/ml/libri/s/SmithA_MoralSentiments_p.pdf)) and ‘An Inquiry into the Nature and Causes of the Wealth of Nations’ ([1776](https://www.econlib.org/library/Smith/smWN.html)). Numerous social structures, such as trade, language, money, and the moral code, are regarded as instances of spontaneous order. 

When first introduced to the idea of spontaneous order, one may wonder whether it is possible for people to cooperate as voluntary agents to accomplish goals that both perfectly align with the social order and the greater good of humanity. Indeed, this is what spontaneous order is defined as. But then one might also wonder: what about the society slipping into anarchy without any state intervention? 

According to the Saptanga doctrine developed by Kautilya in Arthashastra, one of the necessary components that the Swami (king) must yield to construct a prosperous kingdom is Danda (army). Furthermore, how can we get past Hobbes’ presumption that people are self-interested, though a distinction needs to be made here between selfishness and self-interests. Selfishness invariably causes another actor to suffer a negative outcome, yet a group of individuals acting in their own best interests can benefit society and produce a positive outcome. For instance, monetary or materialistic transactions—which we might characterise as an exchange that can take place between people depending on their interests and value for certain products, therefore serving their own self-interests—are a necessary component of trade. However, there is a likelihood that individuals would violate the naturally occurring coordinated order due to personal objectives that may conflict with the larger good. For example, theft and loot usually serves the interest of one party at the expense of the other party’s welfare and sometimes at the expense of the greater societal good. 

The beauty of spontaneous order comes from the simple reality that people unintentionally create an order in their daily lives that supports the economy and increases societal productivity. [Hayek observes](https://www.britannica.com/topic/libertarianism-politics/Libertarian-philosophy#ref799930) that as social order is rooted in human acts rather than human planning, it emerges from the conclusion of human judgments and does not require the creation of any particular social or economic framework. For Hayek, spontaneous order emphasizes a bottom-up strategy as opposed to planned order’s top-down strategy. Additionally, he argues that economies and societies are too complicated to comprehend for a single pattern of order to apply to all situations, which considers the complexity of the presence of many diverse societies and ethnic groups. 

As social orders in economies and societies evolve, so do the higher levels of the bottom-up strategy. Hayek further points out that because spontaneous order has its roots deeply ingrained in human behavior and deeds, it has the unique quality of adaptability to various situations as it is characterized by fast change and vast uncertainty, which might not be possible for intended or constructed order.  

A lot of anarchists think that the core idea of anarchism is spontaneous order. They contend that in anarchy, the inherent feeling of coordination developed amongst the various actors of the society via their individual duties and labor would allow the community to function even in the absence of state authority and intervention.  

Numerous critiques of spontaneous order exist, but they mostly center on the charge of irrationality. This is because conservationists, who embrace a planned order more comprehensively, view spontaneous order as somewhat unusual. Many religious and classical thinkers disagree with the idea of spontaneous order because it contradicts [the view](https://www.britannica.com/topic/libertarianism-politics/Libertarian-philosophy#ref799930) held by some that the cosmos was created by a higher power, namely God. 

Also, both intended and spontaneous orders may closely relate to the situation. Hence, it simply depends on the lens of the viewer. For instance, thousands of people amicably and cooperatively move past one another as soon as you enter a mall. When examined closely, one might see that it is a naturally occurring social order—more like a code of conduct—that has been established through individual behaviors and opinions about how to act in a mall when shopping. However, if you look at it through a different lens, one may notice that there is a sense of structured formal organisation that has been put in place to maintain harmony and coordination. 

India’s culture has fostered harmony, peace, and collaboration for societal improvement across generations. With its cultural origins in the Indus Valley society, this almost 9,000-year-old society has adapted to its complexity and achieved much despite it. Given the history of societies and nations, it is likely that people first developed an innate sense of survival and identity rather than a formal authority when our civilization first emerged. 

Nevertheless, people could still adapt to complex structures, which led to the development of society, government, and trade, i.e., Samaaj, Sarkaar and Bazaar. For instance, when you take a rickshaw to go from one place to another, the rickshaw pullers will always ask you for a standard price, which even the passengers know and agree upon. However, this standard is not set by the government or any other official authority; rather, it is the result of discussions among the rickshaw pullers in each area, and only through these discussions are rickshaw prices set from one locality to the next. We can argue that a consensus of this kind could only arise from a shared language, geography, or even identity. 

Overall, spontaneous order remains a fundamental concept in understanding the dynamics of social, economic, and even natural systems, providing valuable insights into how order can emerge from seemingly chaotic interactions.

* * *

**About Akansha Sinha**

Akansha is currently pursuing her honours in Political Science from University of Delhi. She attended the iPolicy for Young Leaders in September 2023, organised by Centre for Civil Society.

## Revitalising Budget Private Schools in a Post-Pandemic Era

Original: https://www.spontaneousorder.in/p/revitalising-budget-private-schools-in-a-post-pandemic-era

Author: Spontaneous Order

Published: 2024-03-26T16:37:35.000Z

Topics: budget-private-schools, education-regulation, learning-outcomes, school-choice

> Allowing private schools to operate as for-profit entities, easing regulations, establishing an independent regulator, and prioritising learning outcomes as the foremost indicator of success, can uplift a stagnant education system. Life during the many ..

**Summary:**

The post argues that India's budget private schools (BPS), serving 70% middle/low-income students with fees under Rs1,000/month (45% under Rs500), are crucial for education yet devastated post-pandemic, with 20,021 closures in 2021-2022 and learning losses per ASER 2022 reverting reading to pre-2012 levels and arithmetic declining since 2018. These 2.8 lakh low-fee schools, enrolling half of students at one-third government school costs and marginally better outcomes, face over-regulation: Delhi requires 125 documents and 155 steps to open, non-profit status blocks credit, and input-focused rules burden operations while ignoring learning. From a classical-liberal view, solutions include allowing for-profit MSME operation for credit and investment (as in Maharashtra/Haryana), easing entry/operations, and establishing NEP-mandated independent regulators for all schools to enforce standardized learning assessments, shifting competition to outcomes over inputs. This fosters parental demand, transparency, accountability, and quality, with interim philanthropic aid for pedagogy. Half of 8.7 crore private unaided school students demand supply-side reforms to match rising enrollment from 9% (1993) to 35% (2017).

**Key points:**

- Allow private schools to operate as for-profit MSMEs to enable credit access, financial transparency, and entrepreneurial investment.
- Establish an independent regulator per NEP to oversee all schools, conduct standardized learning assessments, and ensure a level playing field.
- Prioritise quantifiable learning outcomes over input regulations to drive competition and parental demand for quality education.
- Ease entry barriers like Delhi's 125 documents/155 steps and operational rules to prevent BPS closures and support low-fee models serving low-income families.

**By Stephanie Samuel**

* * *

*Allowing private schools to operate as for-profit entities, easing regulations, establishing an independent regulator, and prioritising learning outcomes as the foremost indicator of success, can uplift a stagnant education system.*

Life during the many lockdowns may become a distant memory, but one need only scratch the surface to find the lingering impact of the pandemic, especially on school education. The last [ASER report on foundational learning](https://img.asercentre.org/docs/ASER%202022%20report%20pdfs/All%20India%20documents/aser2022nationalfindings.pdf) noted a significant fall in basic reading ability to pre-2012 levels across government and private schools, reversing the slow improvement in the intervening years. Basic arithmetic levels have also declined nationally for most grades since 2018. 20,021 schools closed down in 2021-2022, mainly private and ‘other management’ schools (UDISE+ report 2021-2022). Many were low-fee or budget private schools. 

According to the [State of Sector Report: Private Schools in India, 2021](https://www.centralsquarefoundation.org/State-of-the-Sector-Report-on-Private-Schools-in-India.pdf), nearly 80% of private schools are small schools charging low fees, contrary to popular belief that only the affluent educate their children at private schools. The report also states that around 70% of students attending these schools belong to middle or low-income families and pay less than Rs.1,000 a month; 45% pay less than Rs. 500 a month. Budget private schools or BPSs rely heavily on school fees for revenue, a dependence that left them cash-strapped when parents, mostly from low-income groups, were unable to pay school fees during the lockdown. The widespread non-payment of fees deeply impacted revenues and left budget private school owners in debt, unable to pay back loans taken from private financiers and banks to meet rent, salaries and other recurring expenses. With no respite from the government, closures were inevitable. 

Roughly half of India’s student population is enrolled in privately managed schools, making it imperative for any intervention to enhance learning outcomes to consider their substantial presence.

### **Complex Regulations Govern Private Schools, Over-Regulating Inputs, Under-Regulating Learning**

To give a sense of scale, 8.7 crore students study in 3.5 lakh private unaided schools [(State of the Sector, 2021)](https://www.centralsquarefoundation.org/State-of-the-Sector-Report-on-Private-Schools-in-India.pdf). Roughly 2.8 lakh schools fall under the low-fee/ budget/ affordable classification. Low-fee schools provide education at one-third the cost of government schools and fare marginally better on learning parameters ([Ease of Operating Budget Private Schools in India,](https://ccs.in/ease-operating-budget-private-schools-india) 2022).

The enrollment share of private unaided schools rose from 9% in 1993 to 35% in 2017, driven by rising income levels and a subsequent rise in demand for high-quality private education. Almost 20% of incomes across rich and poor households are spent on children, particularly on ‘good education’ (ibid.) But the supply is unable to cope with the demands of 88 million students enrolled in 400,000 unaided private schools, neither in quantity nor quality.

Barriers to quality education begin at the onset with heavy regulations on entry, operations, and scale. For example, opening a private school in Delhi requires 125 documents and applications to move through at least 155 steps within the Directorate of Education [(Ibid.)](https://www.centralsquarefoundation.org/State-of-the-Sector-Report-on-Private-Schools-in-India.pdf). Furthermore, the mandate that schools can only operate either as a non-profit trust or society deters banks and financial institutions from providing credit. It is also a deterrent for entrepreneurs with the zeal and experience to invest in affordable schools.

While existing regulatory and licensing requirements make it extremely difficult for new schools to set up, the existing infrastructure is crumbling. Operational requirements – infrastructure, teacher salaries, fee increases, admin processes, etc.- are challenging for low-fee school owners who lack the financial and management resources to comply. Operating as trusts and societies under the Societies Registration Act or the Indian Trusts Act, most private schools do not maintain reliable accounts and engage in cash transactions, resulting in their financial exclusion by credit institutions.

Budget Private Schools owners invest in ‘visible’ indicators of learning standards like computer labs, low-teacher absenteeism, and heavy advertising of English-medium instruction. In the absence of standardised test scores – 60% of BPSs do not extend to board classes – parents find it hard to assess the quality of education their children receive and are ill-equipped to make demands of school owners. 

Funds alone cannot improve the quality of education but they can shape outcomes, coupled with improved governance and accountability structures. 

### **Creating an Open, Transparent & Accountable Education Sector Focused on Quality Learning**

The challenge and the solution lie in nurturing parental demand for quality school education driven by quantifiable learning outcomes.

Allowing private schools to operate as MSMEs instead of non-profit organisations would result in easy credit access, ensure financial transparency and accountability, and attract investment as well as entrepreneurial talent. With Maharashtra and Haryana allowing schools to register as corporate bodies, the call for converting education into for-profit structures is growing louder, but it will be some time before investors start venturing into affordable schools. In the interim, philanthropic funding can be encouraged to invest in improving pedagogy, curriculum, etc. and other such measures to improve the status quo. Their active intervention can also encourage non-banking institutions to create credit options tailored to meet the challenges of low-budget schools.

Currently, the state regulates private schools while competing with them for enrollment. To ensure a level playing field, an independent regulator representative of all stakeholders in education – government, private school operators, teachers, parents, etc. – is required. The NEP provides for an independent State School Standards Authority to rectify this issue of regulation asymmetry. This body can also be tasked with conducting standard learning assessments (or key stage assessments, also provisioned in the  NEP) which can serve as the barometer of learning in all schools regardless of management type.

An open, transparent, and fair education sector incentivizes all stakeholders to compete on one parameter alone –  learning outcomes.

* * *

**About Stephanie Samuel**

Stephanie is a journalist-turned-marketer with a decade of experience helping organisations craft their stories. She is passionate about converting complex data and information into engaging, people-first narratives that impact how people 'feel' about policy issues.

## Life at the Crossroads: The Resilient Heartbeat of New Delhi’s Street Vendors

Original: https://www.spontaneousorder.in/p/life-at-the-crossroads-the-resilient-heartbeat-of-new-delhis-street-vendors

Author: Spontaneous Order

Published: 2024-01-16T18:40:12.000Z

Topics: street-vendors, street-vendors-act, urban-governance, rule-of-law

> In the ever-bustling lanes of New Delhi, amidst the vibrant chaos and ceaseless energy, a myriad of stories unfold every day. These are the tales of dreamers like Ali, a 40-year-old fruit vendor whose life epitomises resilience, hope, and entrepreneuria..

**Summary:**

In New Delhi's bustling streets, fruit vendor Ali exemplifies the resilient entrepreneurial spirit of the city's approximately 450,000 street vendors, who are legally recognized under the Street Vendors Act 2014 but often unaware of their rights. Ali faced a Rs 4000 fine from the Municipal Corporation of Delhi (MCD) for briefly leaving his cart unattended—far exceeding the correct Rs 100 penalty—threatening his livelihood and his daughter Heena's law studies. This highlights systemic issues: vendors endure harassment, evictions, and regulatory overlaps amid economic hardships, skill gaps, gender discrimination, and COVID impacts, while authorities struggle with urban sprawl, limited resources, and vending zone enforcement. From a classical-liberal viewpoint, the post critiques poor implementation of protective laws that should empower micro-entrepreneurs rather than burden them. It spotlights the upcoming documentary 'Error 404: Justice Denied' by Centre for Civil Society, advocating collaboration among vendors, planners, and communities. Solutions include effective Act enforcement, rights education, empathy-building, and learning from global models to integrate vendors harmoniously into city life without stifling their vital economic role.

**Key points:**

- Street vendors like Ali are fined excessively (Rs 4000 vs. rightful Rs 100) due to unawareness of Street Vendors Act 2014 protections.
- Delhi has ~450,000 street vendors facing harassment, evictions, and regulatory confusion amid urban growth pressures.
- Authorities must balance order with vendors' rights under resource constraints.
- Implement Act effectively, educate vendors on rights, and foster stakeholder collaboration for sustainable solutions.

**By Sudeshna Saha**

* * *

In the ever-bustling lanes of New Delhi, amidst the vibrant chaos and ceaseless energy, a myriad of stories unfold every day. These are the tales of dreamers like Ali, a 40-year-old fruit vendor whose life epitomises resilience, hope, and entrepreneurial spirit.

**Ali’s Cart: More Than Just a Business**

Ali’s vibrant fruit cart, set against the backdrop of New Delhi’s clamorous streets, is not just a means of livelihood but a symbol of defiance and hope. Every day, as Ali sets up his cart, he enacts a ritual that embodies his fight for existence in a metropolis where dreams are as often deferred as realised. However, Ali’s story takes a challenging turn when he faces a Rs 4000 fine from the Municipal Corporation of Delhi (MCD) for a minor infraction of leaving the cart unattended to answer a phone call from his daughter posing a threat not only to his livelihood but also to his daughter Heena’s aspiration to study law.

**The Invisible Many**

Ali’s narrative is just one among the approximately 450,000 street vendors in New Delhi, who face such legal issues. Though they have legal recognition as street vendors under the Street Vendors Act 2014, they are often not aware of their rights when fined by the authorities. In Ali’s case, the fine should not have exceeded Rs 100 but the MCD authorities imposed a hefty fine of Rs 4000. In addition, vendors like Ali find themselves at the crossroads of various traffic and urban regulations resulting in complex overlaps and confusions. Hence, a lack of formal support mechanism places them in a precarious position, navigating the uncertain terrain of various legislations and daily survival.

**The Other Side of the Story**

While the plight of street vendors like Ali is stark, understanding the challenges faced by urban authorities like the MCD is crucial. They are tasked with maintaining order, managing urban sprawl, and designating vending zones amidst rapidly evolving cityscapes. Despite laws like the [Street Vendors Act, 2014](https://mohua.gov.in/upload/uploadfiles/files/StreetVendorAct2014_English\(1\).pdf), intended to protect vendors, implementation challenges often leave vendors vulnerable. However, it’s essential to recognise that the authorities are also working under constraints, striving to balance the needs of a growing population with limited resources and infrastructure.

**Unraveling Complex Challenges**

The profession of street vending is riddled with hurdles, including economic hardships, educational and skill-related barriers, gender-based discrimination, and the impact of events like the COVID-19 pandemic. Vendors often face [harassment](https://core.ac.uk/download/pdf/287380491.pdf), confiscation of goods, and eviction threats, adding to the complexity of their struggles.

**Justice and Accessibility: Two Sides of a Coin**

Ali’s challenging interaction with the legal system highlights the broader issue of justice accessibility for those who cannot afford penalty or legal services. However, the legal landscape is not always unfair to the street vendors. There are instances where the law has acted as a protective shield for vendors, indicating a varied spectrum of experiences.

**A Call to Action: “Error 404: Justice Denied”**

The documentary “Error 404: Justice Denied”(to be released soon) by the Centre for Civil Society and Patric Reasonover brings to light the multifaceted challenges faced by vendors. It advocates for a collaborative approach, urging vendors, city planners, and the community to work together towards inclusive, sustainable solutions.

**Envisioning a Brighter Future**

Reflecting on Ali’s journey and insights from “Error 404: Justice Denied,” it’s evident that the path to a harmonious future lies in a balanced approach. This involves recognising the vendors’ struggles alongside the predicaments of city authorities. Effective implementation of the Street Vendors Act, educating vendors about their rights, and fostering empathy among all stakeholders are crucial steps. Moreover, exploring successful models from other urban contexts and acknowledging the limitations in our current understanding can lead to more innovative and effective solutions.

The stories of vendors like Ali are integral to New Delhi’s vibrant narrative. By fostering dialogue, understanding the challenges of urban governance, and promoting cooperative efforts, we can ensure that these resilient entrepreneurs find their rightful place in the heart of the city.

* * *

**About Sudeshna Saha**

Sudeshna is a senior fellow at Centre for Civil Society. Earlier, she has developed joint programs with Central and State government ministries, as well as with private sector firms, on issues such as UN Sustainable Development Goals, integrated village development, universal water and sanitation services, and Covid-appropriate behavior.

## Nehru as India’s Constitutional Sisyphus

Original: https://www.spontaneousorder.in/p/nehru-as-indias-constitutional-sisyphus

Author: Spontaneous Order

Published: 2023-12-12T10:31:17.000Z

Topics: constitutionalism, first-amendment, free-speech, judicial-review

> Jawaharlal Nehru played a luminous role in planting the Kalpavriksha of constitutionalism in India, but by steering the First Amendment, he cut the very taproot of it. We must respect the judiciary, the Supreme Court and the other High Courts in the lan..

**Summary:**

Jawaharlal Nehru championed constitutionalism in India's founding, contributing to the 1931 Karachi Resolution demanding free speech, the 1946-47 Objective Resolution emphasizing popular sovereignty and freedoms, and praising judicial independence in 1949. However, he undermined this by piloting the Constitution (First Amendment) Act of 1951, invalidating Supreme Court rulings just 16 months after the Constitution's adoption. Courts had struck down bans on magazines like Romesh Thapar's Crossroads (Madras, 1950) and K.R. Malkani's Organizer (Delhi, 1949) under public order laws, and deemed sedition (IPC Section 124A) unconstitutional in Tara Singh v. State of Punjab (1951), upholding Article 19(2) limits strictly. Nehru's amendment expanded restrictions to include 'security of the State,' 'friendly relations with foreign states,' and 'public order,' introduced the Ninth Schedule shielding laws from review, and passed 228-20 despite opposition warning of authoritarianism. The author frames this as Nehru cutting the 'taproot' of constitutionalism—a social contract limiting state power via judicial review and rights supremacy—turning him into a Sisyphus who planted the Kalpavriksha only to uproot it, enabling repressive laws and parliamentary dominance over fundamental rights.

**Key points:**

- Nehru's First Amendment invalidated Supreme Court protections of free speech in Crossroads and Organizer cases, expanding Article 19(2) restrictions.
- The Ninth Schedule emasculated judicial review, shielding laws from constitutional scrutiny.
- Early court rulings, including Tara Singh (1951), struck down sedition and broad public order curbs as violating Article 19.
- Opponents like Shyama Prasad Mookerji and HN Kunzru warned the amendment effectively repealed free speech guarantees.
- President Rajendra Prasad lamented the assault on Part III Fundamental Rights, foundational to constitutionalism.

**By Faisal C K**

* * *

*Jawaharlal Nehru played a luminous role in planting the Kalpavriksha of constitutionalism in India, but by steering the First Amendment, he cut the very taproot of it.*

We must respect the judiciary, the Supreme Court and the other High Courts in the land. As wise people, it is their duty to see that in a moment of passion, in a moment of excitement; even the representatives of the people do not go wrong. In the detached atmosphere of the courts, they should see to it that nothing is done that may be against the Constitution.

\-Jawaharlal Nehru solemnly stated in the Constituent Assembly on 10 September 1949. (Quoted in *Nehru and Indian Constitutionalism*  edited by N.R.Madhava Menon published by Indus Source Books -2015)) 

This statement underscored Nehru’s unalloyed commitment to the nascent Indian constitutionalism. Nehru was a towering presence amongst the founders of our Constitution. He contributed richly to its framing. In 1931, he moved a Resolution in the Karachi session of the Congress that demanded the freedom of speech and press.

But the same Nehru ironically subverted the vital spirit of constitutionalism by piloting the Constitution (First Amendment) Act in 1951 to invalidate the judgments delivered by India’s constitutional courts in the very honeymoon days of constitutional order. Thus, Nehru, along with Dr Ambedkar and C Rajagopalachari, became both the makers and the breakers of India’s Constitutional aspiration.

**The uphill task**

A constitution is a social contract entered into by the people of a territory with a State that exercises sovereignty over the territory. The social contract of the Constitution defines and limits the governmental powers of the State and delineates, proclaims, and safeguards the fundamental rights of the citizenry. People’s obedience towards the State and the State’s assurance of fundamental rights constitute the *quid pro quo* for the social contract. This idea of social contract is the gist of *constitutionalism*.

A constitution not revitalised by constitutionalism is only an ‘empty shell constitution’. The separation of powers and checks and balances function as a protective mechanism of constitutionalism, which is anchored at the supremacy of the Constitution. Constitutionalism demands an independent judiciary with powers of judicial review. Jawaharlal Nehru played a luminous role in planting the *Kalpavriksha* of constitutionalism in India, but by steering the First Amendment, he cut the very taproot of it!

Jawaharlal Nehru successfully navigated the Objective Resolution, the kernel of the Constitution, through the Constituent Assembly. The Resolution, moved on 13 December 1946 and passed on 22 January 1947, set the basic algorithm of India’s Constitution making. The Resolution underscored the principle of popular sovereignty and guaranteed justice, equality, and freedom of thought and expression for the citizenry. ‘*It is a very vital resolution\[,\] and it lays down the essentials of the next constitution*’,- observed MR Jayakar, a member of the Constituent Assembly. (Quoted in *Sixteen Stormy Days: The Story of the First Amendment to the Constitution of India* by Tripurdaman Singh ,Penguin Random House 2020.)

**Rolling the Constitution down**

*Judicial review* is a cardinal principle of constitutionalism. However, Jawaharlal Nehru circumvented the unsavoury judgments of the constitutional courts through the constitutional amendment. As the judiciary steadfastly upheld the civil liberties enshrined in the Fundamental Rights, Nehru successfully moved the First Amendment (1951), creating a perilous constitutional architecture for authoritarian government. He upset the Constitutional apple cart merely within sixteen months of its making!

Prof Upendra Baxi called the First Amendment the ‘Nehruvian Constitution’, a radical rewriting of the constitution’s Fundamental Rights Charter. The Fundamental Rights were effectively disregarded and the Constitutional social contract was violated. The Constitution was made subservient to the will of the government of the day. The constitutional groundwork was done for a host of repressive legislation to follow. The judiciary, ‘guardian of the people’s liberties’, was emasculated, and the newly introduced the Ninth Schedule curtailed the judicial review.

The *Cross Roads,* a magazine edited by Romesh Thapar, was staunchly critical of the Congress governments. The Madras government banned the magazine’s circulation in the State on 1 March 1950 under the Madras Maintenance of Public Order Act, which was also banned in Bombay in 1949. Meanwhile, the *Organizer,* edited by K.R. Malkani, assaulted Nehru’s Pakistan policy and argued that ‘*the villainity of Pakistan is matched only by our own idiocy*’. The Delhi government issued a pre-censorship order against the *Organizer* under the East Punjab Public Safety Act*,* demanding the editor to submit to the government for approval of all communal matters, news, and opinions about Pakistan. Following these incidents, the *Cross Roads* and the *Organizer* approached the Supreme Court to regain their constitutional right of free speech. 

The Supreme Court quashed the order banning the *Cross Roads* in Madras, and the relevant provisions of the Madras Maintenance of Public Order Act were held ultra vires. Similarly, in the *Organizer* case, the pre-censorship order and relevant section of the Act were held to be repugnant to the Constitution. The court held that laws could impose restrictions on free speech only based on Clause 2 of Article 19: libel, slander, defamation, contempt of court or undermining the security of the State and any other reason, including public order, was held unacceptable. In *Tara Singh v. State of Punjab* (1951), the Punjab High Court held that Section 124 A of the IPC (sedition) contravened the right to freedom of speech and was thus unconstitutional.

**Nehru’s authoritarian avatar**

Nehru made his stand clear for the Constitutional Amendment for bypassing the Court verdicts. He wrote to the Chief Ministers on 31 December 1950: 

“We have to make clear that no individual in India, whoever he may be, can challenge the authority of the State or of Parliament…so far as we are concerned, we are not going to tolerate any defiance of the State’s authority. “

It was an authoritarian statement which dimmed Nehru’s democratic halo. 

Jawaharlal Nehru introduced the Constitution (First Amendment) Bill in Parliament on 12 May 1951, which was referred to a Select Committee. In the committee, Dr Shyama Prasad Mookerji said that democratic freedom implied that any viewpoint could circulate in the country so long as it did not advocate violence and chaos. HN Kunzru opined that Articles 19 and 31 were not being amended; they were effectively being repealed, and if passed, the new article would extinguish freedom of speech and expression almost entirely. He pointed out the dangers of amendment: the revalidation of sedition and revival of censorship.

The Amendment Bill was passed with an overwhelming majority of 228 ayes against 20 noes. New grounds for restricting free speech were introduced- interests of security of the State, friendly relations with foreign states, and public order. As Hussain Imam put it, the amendment laid the foundation of an authoritarian state. As Justice Hidayatullah pointed out, fundamental rights became a plaything of parliamentary majorities. President Rajendra Prasad sagaciously stated: 

Part III of the Constitution\[,\] which lays down the Fundamental Rights\[,\] has a special importance and significance of its own…it is an irony of fate that this Part\[,\] which stands above every other Part of the Constitution\[,\] is the first to be assailed. 

Nehru ploughed the tough terrain for constitutionalism but, advertently or inadvertently, sowed the dragon’s teeth of authoritarianism in India’s marshy land. He was Prometheus who brought the fire of constitutionalism down to India but took a Sisyphean turn by pressing the First Amendment.

Read more: [Addressing the Urban Nutritional Challenges in ICDS](https://spontaneousorder.in/addressing-the-urban-nutritional-challenges-in-icds/)

* * *

**About Faisal C K**

Faisal C K is Deputy Law Secretary to the Government of Kerala and an independent researcher having a master’s degree in law and political science. Constitutional law and political philosophy are his areas of interest.

## Addressing the Urban Nutritional Challenges in ICDS

Original: https://www.spontaneousorder.in/p/addressing-the-urban-nutritional-challenges-in-icds

Author: Spontaneous Order

Published: 2023-10-06T12:15:32.000Z

Topics: child-nutrition, icds-reform, urban-malnutrition, public-health

> The National Family Health Survey 2019-21 reveals that one in every three children below five years of age are stunted and underweight. Even the numbers on children’s urban nutritional status are far from being acceptable. The National Urban Health Miss

**Summary:**

India faces severe urban child malnutrition, with NFHS 2019-21 showing one in three children under five stunted or underweight, and among urban poor, over 46% underweight and 60% missing full immunization by age one. Urbanization will rise from 31.16% in 2011 to 43.2% by 2035, exacerbating disparities for poor children, where stunting links to 1.4% economic productivity loss per 1% adult height loss. ICDS, launched in 1975, suffers urban-rural gaps: only 1.36 lakh of 14 lakh AWCs are urban, serving just 7% of beneficiaries. Urban AWCs face space shortages, with 24.3% in rented buildings amid low rent allocations, plus challenges from migrant populations and weak community ties. The classical-liberal perspective calls for a separate urban ICDS approach: portable structures like Mohalla Clinics, slum-proximate mapping, school relocations, community involvement beyond mothers/children, city-specific maternal education, NGO/urban body monitoring, and private CSR funding. Pilot interventions ensure stakeholder accountability, enhancing availability, accessibility, and quality for equity, better health outcomes, and SDG 2 against malnutrition.

**Key points:**

- Urban poor children show 46% underweight rates and 60% immunization gaps, demanding targeted ICDS reforms amid rising urbanization to 43.2% by 2035.
- ICDS urban coverage lags with only 1.36 lakh AWCs versus 14 lakh total, serving just 7% of beneficiaries due to spatial disparities in slums.
- Urban AWCs struggle with infrastructure, 24.3% in inadequate rented spaces, migrant challenges, and weak community bonds.
- Adopt separate urban ICDS via portable structures, slum mapping, CSR funding, and community/NGO monitoring for better service delivery.
- Implement pilot interventions to test localized models, enforce accountability, and achieve nutritional equity supporting SDG 2.

**By Spontaneous Order**

* * *

The National Family Health Survey 2019-21 reveals that one in every three children below five years of age are stunted and underweight. Even the numbers on children’s urban nutritional status are far from being acceptable. The [National Urban Health Mission Framework for Implementation Report, 2013](https://nhm.gov.in/images/pdf/NUHM/Implementation_Framework_NUHM.pdf) shows that over 46% of urban poor children are underweight and almost 60% miss total immunisation before completing one year, highlighting the issue of urban malnutrition. 

Per the [United Nations-Habitat’s World Cities Report 2022](https://www.telegraphindia.com/india/indias-urban-population-to-stand-at-675-million-in-2035-un/cid/1872563), the percentage of India’s population at mid-year residing in the urban area will increase from 31.16% in 2011 to 43.2% in 2035. Therefore, the increasing urban population coupled with growing socioeconomic and spatial disparities within cities will significantly impact child nutrition, specifically those from [poor socioeconomic strata](https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-020-09864-2). According to the [World Bank](https://www.orfonline.org/research/the-importance-of-nutrition-in-building-the-human-capital/#:~:text=According%20to%20the%20World%20Bank,children%20who%20are%20not%20stunted.), ‘A 1 per cent loss in adult height due to childhood stunting is associated with a 1.4 per cent loss in economic productivity.’ Hence, urban children’s nutritional status is a critical indicator of the country’s development status.

**Spatial Disparities within the Integrated Childhood Development Scheme**

India’s flagship scheme for early childhood care and development (i.e.) the Integrated Childhood Development Scheme (ICDS) was initiated in 1975 to break the vicious cycle of child malnutrition, morbidity, reduced learning capacity, and mortality. Despite its universal nature, an urban-rural divide exists, with only 1.36 lakh Anganwadi centres (AWCs) located in urban areas against a total of [14 lakh AWCs](https://pib.gov.in/Pressreleaseshare.aspx?PRID=1541558#:~:text=A%20total%20of%2014%20lakh,located%20in%20the%20urban%20areas) sanctioned across states and union territories. A [right to information query](https://www.thehindu.com/news/national/only-7-in-100-anganwadi-beneficiaries-are-in-cities/article30736445.ece) in 2020 revealed that for every 100 Anganwadi beneficiaries in the country, only seven are in urban areas. 

Even within urban areas, further spatial disparities exist based on the nature of settlement. The access and utilisation of ICDS services in slum and non-slum areas show discrepancies, as highlighted by different [studies](https://www.academia.edu/14872031/INTEGRATED_CHILD_DEVELOPMENT_SERVICES_ICDS_PROGRAMME_IN_THE_CONTEXT_OF_URBAN_POOR_AND_SLUM_DWELLERS_IN_INDIA_EXPLORING_CHALLENGES_AND_OPPORTUNITIES). Furthermore, the nature of the slum (i.e.) [recognised or notified](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6003417/), determines its access to public services. This becomes critical as children in such settlements are at high risk of malnutrition owing to poor or lack of access to potable drinking water, sanitation services, proper housing, and immunisation. 

**Challenges of Urban Anganwadis**

The constraints of space, proper infrastructure, sanitation, and town planning, without adequate childcare provision, plague the functioning of [urban ICDS](https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-020-09864-2). The absence of adequate and affordable land or government buildings to build ICDS centres is significantly hindering the construction of Anganwadis. Per the [ICDS Monitoring Information System](https://pib.gov.in/Pressreleaseshare.aspx?PRID=1541558#:~:text=A%20total%20of%2014%20lakh,located%20in%20the%20urban%20areas), about 24.3% of AWCs out of 13.63 lakh operational AWCs (rural and urban) run in rented buildings. Even in the case of renting, the [low rent allocation](https://pib.gov.in/newsite/printrelease.aspx?relid=92848#:~:text=The%20revised%20rate%20of%20rent,5000%2F%2D%20in%20Metropolitan%20cities.) under ICDS and poor status of rented building hinders efficient and effective delivery of services in the low income neighbourhoods. 

Access to creche facilities in urban settings becomes crucial as mothers usually need to travel long distances for work and might not have the social networks to look after their children. This often results in the elder girl child taking on maternal tasks for the younger siblings, further aggravating the vulnerability of young children and adolescent girls. Furthermore, urban centres with high population density and larger migrant population pose unique challenges for Anganwadi workers in the delivery of services. Moreover, while rural Anganwadi workers have stronger community bonds with the beneficiaries, their urban counterparts find this challenging. Therefore, several spatial, infrastructural, and social challenges impact the urban AWCs. 

**Way Forward**

A separate approach to urban ICDS services could be the way forward, given increasing urbanisation and demands for nutritional security and maternal health. AWC creches in urban settings can facilitate working women, especially those from the informal sector who do not have access to maternity rights, including paid maternity leaves and creche facilities. Furthermore, mapping AWC services closer to slums can ensure ease of access and better outreach. [Portable structures](https://www.livemint.com/news/india/why-delhi-govt-is-building-mohalla-clinics-from-shipping-containers-11630380870479.html) like those adopted by [Mohalla Clinics in New Delhi](https://dgehs.delhi.gov.in/dghs/aam-aadmi-mohalla-clinics) can be used to overcome the lack of space in dense urban settings. Simultaneously, AWCs can be relocated to schools. Increased involvement of local communities within ICDS beyond its current focus on mother and child is crucial for the ‘continuum of care’ through awareness programmes that can enhance ICDS services to help reduce maternal and child mortality. Additionally, it would be beneficial to develop city-specific education programmes for educating mothers about changing complementary feeding practices. Monitoring implementation by active engagement with community-based organisations, non-governmental organisations, and urban local bodies can also strengthen the services. Lastly,  corporate social responsibility funds from the private sector can be used to strengthen the urban nutrition framework. 

It is a matter of equity and a right to improve the health and nutrition of urban poor children. Decision-makers can use pilot interventions as a long-term policy tool to investigate and identify localised models  while ensuring the accountability of different stakeholders, which can improve the urban ICDS programmes. The aim should be to enhance the availability, accessibility, and quality of child development services, especially in impoverished neighbourhoods. ICDS is crucial for a child’s nutritional status, enabling better health and nutrition outcomes, and supporting SDG Goal 2 on ‘ending all forms of malnutrition’.

Read more: [The Need for Comprehensive Sexuality Education in Indian Schools](https://spontaneousorder.in/the-need-for-comprehensive-sexuality-education-in-indian-schools/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## The Need for Comprehensive Sexuality Education in Indian Schools

Original: https://www.spontaneousorder.in/p/the-need-for-comprehensive-sexuality-education-in-indian-schools

Author: Spontaneous Order

Published: 2023-09-29T12:47:32.000Z

Topics: comprehensive-sexuality-education, adolescent-health, education-policy, gender-norms

> Adolescence is the stage of transition and transformation from childhood to adulthood. A phase of exploration, curiosity, and confusion about one’s body and mind. Ever-inquisitive teenagers constantly find themselves wondering – ‘What is happening t

**Summary:**

Indian society's taboo around sex and sexuality leaves adolescents confused, turning to peers or unreliable internet sources, exacerbating issues like inadequate menstrual awareness, harassment, abuse, teen pregnancies, STIs, and gender-based violence. Comprehensive Sexuality Education (CSE), as defined by UNESCO, goes beyond 'sex-ed' to cover cognitive, emotional, physical, and social aspects of sexuality, empowering youth with knowledge, skills, attitudes, and values for informed decision-making, respectful relationships, and rights protection. Key facts underscore urgency: NFHS-4 shows 7.9% of women aged 15-19 have begun childbearing and 27% of women 20-24 married before 18; NACO reports 2.4 million HIV cases; NCRB notes a 19.34% rise in rape cases from 2020-2021. With 253 million adolescents (21% of population per 2011 Census), schools offer practical, economical access to instill values challenging harmful norms, delay sexual debut, promote safe practices, and foster inclusivity for LGBTQIA+ youth. From a classical-liberal lens, CSE builds individual agency and autonomy amid India's diverse traditions, reducing negative outcomes while enhancing well-being—a moral imperative for a healthier future.

**Key points:**

- Societal silence on sexuality drives adolescents to misleading sources, worsening teen pregnancies (7.9% of 15-19 women per NFHS-4), early marriage (27%), STIs (2.4M HIV cases), and violence (19.34% rape increase).
- CSE provides age-appropriate, stigma-free education on sexuality's broad aspects, enabling informed choices, consent, and rights awareness per UNESCO guidance.
- School-based CSE is feasible for India's 253 million adolescents, leveraging schools' reach to challenge gender norms and promote inclusivity.
- Implementing CSE empowers youth agency, delays sexual debut, curbs health risks, and transforms relationships in a culturally diverse society.

**By Aakriti Parashar**

* * *

Adolescence is the stage of transition and transformation from childhood to adulthood. A phase of exploration, curiosity, and confusion about one’s body and mind. Ever-inquisitive teenagers  constantly find themselves wondering – ‘What is happening to my body?’, ‘Why am I going through this change?’, ‘Why do I feel attracted towards that person?’, ‘Whenever I have my periods, why am I not allowed to go to the temple?’. 

The word ‘sex’ is a major taboo in Indian households – only discussed in hushed tones and euphemisms. Our society associates a number of negative connotations with the idea of sex, and sexual & reproductive health – things one must never speak of with a child, especially teenagers. 

Unfortunately, this leads to the overlooking of critical issues stemming from our collective ignorance, including inadequate menstrual and reproductive health awareness, harassment, abuse, and enduring trauma.

The silence, which begins at home, school, community, or society adds to this confusion. Parents believe that children are too young for this ‘talk’ and they will eventually know what they need to ‘at the right age’. In schools, teachers lack proper training on how to address these questions and thus end up skimming through biology chapters dealing with adolescence. The community and society stigmatise young people who speak up and seek information to make sense of the changes they face. Given the silence, where do they get answers to their endless list of questions? They turn to their peers or the internet to sate their curiosity. Said peers are equally confused and the internet does not provide accurate and age-appropriate stigma-free information which further leads to misleading notions around ideas of sex and sexuality. This culminates in a larger and adverse impact on the mental and thereby physical health of young people. Therefore, there is an urgent need to bridge this information gap. 

**Comprehensive Sexuality Education (CSE): More than ‘Sex-Ed’**

Comprehensive Sexuality Education addresses all these long detailed questions in a safe and non-judgmental space providing young people with the necessary knowledge, abilities, attitudes, and values to approach the topic of sex and sexuality. Sexuality is not the same as sex, it is much more than that. It covers gender identities, the gender roles one plays, how one experiences touch, love, and intimacy, as well as how they display attraction. The foundation of CSE  hence lies in empowerment via informed decision-making. 

[UNESCO, under the Revised Edition of the International Technical Guidance on Sexuality Education (2018),](https://unesdoc.unesco.org/ark:/48223/pf0000260770) defines CSE as *“a curriculum-based approach of teaching and learning about the cognitive, emotional, physical and social aspects of sexuality. It aims to equip children and young people with knowledge, skills, attitudes, and values that will empower them to: realise their health, well-being and dignity; develop respectful social and sexual relationships; consider how their choices affect their own well-being and that of others; and, understand and ensure protection of their rights throughout their lives”*

**CSE as the Need of the Hour: Facts & Figures**

India bears a disproportionate share of the worldwide burden of unwanted pregnancies, particularly among teens. According to the National Family Health Survey ([NFHS-4](http://rchiips.org/nfhs/nfhs-4Reports/India.pdf)), roughly 7.9% of women aged 15 to 19 had already started having children (Table 4.11). In spite of efforts to combat the practice of child marriage, [27% of Indian women aged 20-24 were married before the age of 18](http://rchiips.org/nfhs/nfhs-4Reports/India.pdf). CSE’s ability to delay sexual debut and promote healthy relationships makes it an effective tool in the fight against teen pregnancy and early marriage.

On another concerning note, the rate of Sexually Transmitted Infections (STIs) in India is alarming. According to the National AIDS Control Organization ([NACO](https://naco.gov.in/sites/default/files/India%20HIV%20Estimates%202021%20_Fact%20Sheets__Final_Shared_24_08_2022.pdf), 2021), about 2.4 million persons in India are infected with HIV. By providing young people with the information and resources they need to make educated decisions about their reproductive health, safe sex practices, such as the use of condoms and regular testing, CSE has the potential to drastically bring down instances of teenage pregnancies and the spread of STIs.

Gender-based violence is still a major concern in India, with reports of sexual assault against women on the rise. As per the NCRB’s ‘[Crime in India 2021](https://ncrb.gov.in/sites/default/files/CII-2021/CII_2021Volume%201.pdf)’ report, there was a **19.34% increase in rape cases** from 2020 to 2021. These numbers, including other sexual violence incidents, are often a  result of the lack of proper sex education and gender sensitization. CSE, by including modules on relationships & boundaries, offers an effective technique for combating harmful gender norms and encouraging respectful, consenting partnerships.

For the LGBTQIA+ youth in India, CSE can be a beacon of inclusivity and acceptance. While the Supreme Court’s historic decision decriminalising homosexuality in 2018 marked a significant milestone, challenges persist. CSE creates an environment where queer individuals get the space to be understood, supported, and celebrated. 

**Case for CSE in Indian Schools**

India is home to 253 million adolescents; young people in the age group of 10-19 years who comprise 21% of the country’s population (Census, 2011). Adolescence is a crucial stage in development. Hence, it is important that the right form of intervention is taken at this phase when an individual assumes a sense of self-identity and is marked by a myriad of emotions including enthusiasm, idealism, self-doubt, and anxiety. Young people’s schooling has a significant impact on whether stereotypes are reinforced or contested. Since it is easier to access adolescents enrolled in school and incorporate crucial life skills in their curricula, school-based interventions are both practical and economical. An important aspect of schools is their social position and acceptance as educational institutions among family, community, and society. In schools, students not only acquire knowledge but also imbibe values, and develop an understanding of social norms that finally influence their behaviours. 

The aim of CSE is therefore not only to reduce potentially negative consequences of sexual behaviour like unwanted pregnancies, STIs, and child sexual abuse, but also increase the well-being of an individual by enhancing the quality of life and relationships of young people. It develops a sense of agency and autonomy among young people in a country as culturally varied as India, where traditions and conventions differ greatly. CSE empowers adolescents with the right kind of information and builds the capacity to make personal decisions, understand and identify the options and act in a responsible way. 

In a rapidly changing world, CSE is not just a necessity, but a moral imperative. CSE has the potential to empower, protect, and transform the lives of India’s youth. It is high time that we embrace this essential component of education to ensure a brighter, and healthier future for the generations to come.

Read More: [Seeding Success: Harnessing Women’s Potential in Agriculture](https://spontaneousorder.in/seeding-success-harnessing-womens-potential-in-agriculture/)

* * *

**About Aakriti Parashar**

Aakriti Parashar is an aspiring public policy enthusiast and writer, currently working as a Junior Associate for the Policy Training and Outreach Department at Centre for Civil Society. A 2021 graduate from the University of Delhi, she has led various social entrepreneurial teams and worked as a Consultant for the Delhi Government. Aakriti has a keen interest in education policy and research. Some of her published articles include India’s Daughter – a commentary on women safety in India; and a number of published works for Her Campus Media.

## Seeding Success: Harnessing Women’s Potential in Agriculture

Original: https://www.spontaneousorder.in/p/seeding-success-harnessing-womens-potential-in-agriculture

Author: Spontaneous Order

Published: 2023-09-26T15:38:03.000Z

Topics: agriculture, women-farmers, land-ownership, gender-equity

> Agriculture has been the backbone of the Indian economy. Over the years, it has employed more than half of our population, including women and contributed immensely to our country’s growth. Women have been a silent yet resilient pillar in this achieveme

**Summary:**

Women form 80% of India's economically active agricultural workforce amid the 'feminization of agriculture' driven by male urban migration—70% of cultivating women from migrant households—yet only 13% own land due to patriarchal norms, poor records, and legal hurdles, denying them recognition as farmers. This excludes them from Kisan Credit Cards, insurance, seeds, and entitlements, while heavy workloads, low literacy, caste barriers, and mobility limits exacerbate exploitation and low productivity. The author argues from a classical-liberal lens that securing property rights and recognition is essential for unleashing women's potential, as FAO data shows equal resource access could raise yields 20-30%, enhancing food security and rural development since women invest more in families. Government schemes like Mahila Kisan Sashktikaran Pariyojana and self-help groups fall short without ownership reforms. Recommendations include gendered policy audits (e.g., National Policy for Farmers, PM Fasal Bima Yojana), women farmer ID cards as in the 2011 Women Farmers’ Entitlements Bill, official training, community sensitization via NGOs and inclusive SHGs, and women-friendly supports like childcare. True empowerment via rights promises inclusive growth.

**Key points:**

- Despite 80% of economically active women in agriculture, only 13% own land, blocking access to credit, insurance, and entitlements.
- Feminization stems from male migration (70% of women cultivators from such households) and agrarian distress, widening gender gaps.
- Equal resource access for women could boost yields 20-30% per FAO, improving productivity and family investments.
- Introduce women farmer ID cards and audit policies like PM Fasal Bima Yojana for gender equity.
- Sensitize officials, communities, and include men in SHGs to enforce land rights and reduce patriarchal barriers.

**By Maghdhi Jain**

* * *

Agriculture has been the backbone of the Indian economy. Over the years, it has employed more than half of our population, including women and contributed immensely to our country’s growth. Women have been a silent yet resilient pillar in this achievement, fighting all odds. Yet, how much is their contribution recognized? 

As India commemorates 75 years of its Independence, celebrating **Azadi ka Amrit Mahotsav** emphasizing women’s empowerment, it is time to acknowledge these silent patrons of Indian agriculture and grant them the rights they deserve. This research article discusses women’s challenges in Indian agriculture and highlights the transformative potential of empowering them in the sector. 

Women’s increasing participation in agriculture is an undeniable reality. The **[Oxfam](https://www.oxfamindia.org/women-empowerment-india-farmers)** report shows that the agriculture sector employs 80% of all economically active women in India. They pursue diverse roles in farming, food production, and agribusiness. This trend of increasing participation is termed by the [Economic Survey 2017-18](https://www.im4change.org/docs/751economic%20survey%202017-18%20-%20vol.%20II.pdf) as the **Feminization of Agriculture**.  

The prime reason for the increasing feminization in Indian agriculture is male migration to urban areas for better opportunities. According to the **[Institute for Human Development](https://www.ihdindia.org/ILERpdf/Highlights%20of%20the%20Report.pdf),** New Delhi, 70% of all women engaged in cultivation are from households witnessing migration. Yet again, we notice a growing agrarian distress, forcing men to seek casual low-paying jobs in urban areas. Poverty is another impediment to making women work as agricultural laborers. 

However, the escalating number of women farmers in India does not indicate their self-independence and empowerment. Instead, it has unveiled the growing gender gap in the agricultural sector, restricting women’s access to resources and opportunities. 

**No Ownership and Recognition** 

In India, land ownership rights have traditionally been enjoyed by male members. The **[Oxfam](https://www.oxfamindia.org/women-empowerment-india-farmers)** data shows that, despite having 85% of our rural women engaged in agriculture, only 13% of them own land. This indicates an abysmally low number of women landowners in India, in spite of having legal recognition of inheritance rights. Several factors constrain women from exercising their rights, like the patriarchal nature of Indian society, patrilocal residence, low female literacy, and male dominance in administrative and judicial offices. Furthermore, poor maintenance of land records, limited digitalization, and improper data management exacerbate the situation. 

The **[Tamil Nadu Federation for Women Farmers’ Rights](https://www.downtoearth.org.in/news/agriculture/study-highlights-dismal-condition-of-women-farmers-57262)** 2017 study also revealed the poor recognition of women farmers despite spending double working hours in the field and allied activities. This absence of recognition restricts their access to vital resources necessary for a sustainable livelihood, like access to institutional credit, insurance, seeds, equipment, and government entitlements. For instance, land ownership is a requirement for obtaining Kisan Credit Cards. The lack of recognition also reduces their bargaining power, leaving them susceptible to exploitation and harassment. 

Thus, limited legal rights and recognition harm agricultural productivity and growth and push rural India further into the circle of poverty. 

**Other Challenges** 

Women taking up farming deal with intensive workloads. Apart from managing farm work, they are expected to fulfill their traditional household duties, child-rearing, cooking, and cleaning, which impedes their growth and empowerment. Additionally, low education levels among women lead to a lack of information, limited access, and increased chances of exploitation. 

Women agricultural laborers and marginal farmers, with limited resources at their disposal face further difficulties. Despite long work hours, they are paid low wages and sometimes remain unpaid. Caste barriers, along with gendered stereotypes, worsen their condition. 

Narrow mobility, lack of information about markets and prices, limited storage, and access to transportation hamper women in agriculture, affecting their choices. It damages crops, and negatively affects agricultural productivity, marketing, and agribusiness. 

**Addressing the Gender Gap** 

Promoting gender equity in agriculture has manifold benefits, such as reducing poverty and hunger and improving the agricultural systems. According to [FAO estimates](https://www.wfp.org/news/empowering-women-and-girls-crucial-ensure-sustainable-food-security-aftermath-covid-19-say-un), women farmers could boost yields by 20 to 30 percent if they had equal access to productive resources as men. Research also suggests that women engaged in agriculture are likely to make better decisions, and are likely to invest more of their earnings in their families and community compared to men. As a result, India’s food security and nutritional status may improve. Thus, gender equity in agriculture can contribute to overall rural development and community well-being. 

Acknowledging this importance, the Government of India has taken several measures to support women in agriculture. One such initiative is the **[Mahila Kisan Sashktikaran Pariyojana](https://mksp.gov.in/)**[,](https://mksp.gov.in/) a sub-component of the **National Rural Livelihood Mission**, launched for capacity building, training, and skill development to enhance women’s participation in various farm activities. The government’s enhanced focus on self-help groups to provide collateral-free micro-credit and empower women’s independence is another significant step forward. The **[Rashtriya Mahila Kosh](https://rmk.nic.in/)** has been established to assist women financially in various income-generating activities, including agriculture. Furthermore, **Women Farmers’ Day** is celebrated annually on the 15th of October to spread awareness. 

However, all these efforts remain fruitless unless women get adequate recognition. Though launched with good intentions, the efforts fail to deal with the issue of women’s legal and ownership rights over the land they cultivate. Without ownership rights, no woman can be recognized as a farmer. According to the 2011 census, 3.6 crore women are cultivators. However, this mere count does not give them a farmer’s identity to help secure their due rights. 

**Way Forward** 

A thorough gendered analysis of exciting agricultural policies is needed to address women’s concerns in agriculture adequately. These include various agriculture-related policies like the **[National Policy for Farmers](https://pib.gov.in/newsite/PrintRelease.aspx?relid=117468#:~:text=National%20Policy%20for%20Farmers&text=Government%20has%20a)**[,](https://pib.gov.in/newsite/PrintRelease.aspx?relid=117468#:~:text=National%20Policy%20for%20Farmers&text=Government%20has%20a) crop insurance schemes like **[Pradhan Mantri Fasal Bima Yojana](https://pmfby.gov.in/)**, agricultural subsidies, and market related programs. Women-friendly products, for example, health insurance covering pregnancy and birth-related expenses, and childcare support facilities in rural areas must be designed to meet the needs of women active in agriculture. 

Sensitizing and training local officials and staff who enforce land rights like registries, cadastral offices, titling agencies, and land magistrates is essential to enforce women’s ownership rights. Women’s farm certificates or identity cards must be introduced to recognize women’s farming rights. This concept was introduced under the **[Women Farmers’ Entitlement Bill 2011](https://ruralindiaonline.org/en/library/resource/the-women-farmers-entitlements-bill-2011/)** by renowned agricultural scientist, **M.S. Swaminathan**. Such cards would open doors for women to access government entitlements and other agricultural resources. 

Women engaged in agriculture often find themselves limited to unskilled secondary roles. It is the patriarchal nature of our society that restricts the growth and potential of women in agriculture. We must sensitize and educate family members and the local community to address this issue. Mobilization campaigns by NGOs and civil society organizations must be encouraged and supported by the government. One such initiative is  **[Aroh Campaign](https://www.oxfam.org/en/india-women-farmers-persevere)** by Gorakhpur Environmental Action Group and four local NGOs and funded by Oxfam, which aims to help women get recognition as farmers. To create a supportive and participatory rural environment, SHGs must also include male members along with women. Thus, comprehensive efforts, from policy changes to sensitization, are required to harness women’s potential in agriculture.    

As the saying goes, ‘*If you teach a man to farm, his family will eat. If you teach a woman to farm, the community will eat*.’ Therefore, addressing the gender gap in agriculture is a critical requirement to fulfilling India’s vision of an inclusive and just society.

Read More: [India’s Economic Impoverishment and Trade Restrictions](https://spontaneousorder.in/indias-economic-impoverishment-and-trade-restrictions/)

* * *

**About Maghdhi Jain**

Maghdhi is a graduate in Political Science and History from Ramjas College, Delhi University. After two years for Civil Services preparation, she developed a renewed interest in the field of public policy and social impact. She is currently pursuing a diploma in Government and Governance studies. With a desire to make a positive impact on society, Maghdhi is looking forward to pursuing her Master's in Public Policy. She enjoys reading fiction and learning about different contemporary topics that concern our society.

## India’s Economic Impoverishment and Trade Restrictions

Original: https://www.spontaneousorder.in/p/indias-economic-impoverishment-and-trade-restrictions

Author: Spontaneous Order

Published: 2023-09-14T10:34:03.000Z

Topics: trade-liberalization, import-substitution, protectionism, india-economy

> After two decades of economic growth, the haunting ghost of trade restrictions has returned. It proposes steadily but surely to put shackles on the flowing incremental streams of prosperity in the Indian economy. The Indian government has put an effecti..

**Summary:**

India's recent embargo on importing laptops and PCs from China to boost domestic manufacturing revives the failed import substitution policies of the pre-1991 era, threatening the prosperity gained from liberalization. Since 1991's pivot amid a balance-of-payments crisis, GDP surged from $275.4 billion to $3.39 trillion by 2022, with trade-to-GDP ratio rising from 15% to 45%, driving extreme poverty down from 46% to under 20% in a decade and rural consumption growth of 3.8% annually through 2005. Trade liberalization enabled technological exchange, productivity gains, and access to global goods, lifting ordinary Indians. Contrasting India's protectionism, which stifled innovation in automotive, electronics, steel, and textiles—leaving consumers with high prices and limited choices—Japan's post-WWII openness to trade imported not just goods but knowledge, efficient methods, and market feedback, fostering world-leading industries. Protectionism grants domestic firms monopolies, reducing incentives to innovate, while open trade provides diverse ideas for entrepreneurs to recombine profitably. The author, from a classical-liberal perspective, concludes India must remove the China embargo to sustain progress, as trade enriches economies, empowers citizens, and prevents regression.

**Key points:**

- India's 1991 liberalization boosted GDP from $275 billion to $3.39 trillion and cut extreme poverty from 46% to under 20% in a decade via expanded trade.
- Protectionist policies like the laptop import embargo from China undermine innovation by shielding domestic firms from competition and knowledge inflows.
- Japan's openness to trade post-WWII enabled knowledge diffusion and superior outcomes in auto, electronics, steel, and textiles compared to India's stagnation under protectionism.
- Remove trade restrictions to access global ideas, spur entrepreneurial innovation, and maintain prosperity gains since 1991.

**By Vibhu Vikramaditya**

* * *

After two decades of economic growth, the haunting ghost of trade restrictions has returned. It proposes steadily but surely to put shackles on the flowing incremental streams of prosperity in the Indian economy. The Indian government has put an effective embargo on the importation of laptops and the personal computer segment from China to boost domestic manufacturing and address securing concerns. To fully appreciate the context of this perverse development, one must consider the economic journey of India since the watershed moment of 1991, when a fresh era of liberalization commenced.

In 1991, facing a balance of payments crisis, India pivoted from socialism to a market-driven economy, boosting its GDP from $275.4 billion to $3.39 [trillion](https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=IN) by 2022, becoming the fifth-largest global economy. This resulted from expanding international trade, where the trade-to-GDP [ratio](https://www.macrotrends.net/countries/IND/india/trade-gdp-ratio#:~:text=Trade%20is%20the%20sum%20of,a%202.16%25%20decline%20from%202019.) rose from 15% to 45% in 2021, propelled by reduced tariffs, liberalized foreign investment, and a business-friendly environment. This integration fostered increased goods inflow, technological exchange, and enhanced productivity and consumption. 

Trade liberalization, however, is not just a cold economic term for India; it is the beating heart of a transformative journey that touched the lives of ordinary, often overlooked Indians. The compelling [study](https://openknowledge.worldbank.org/entities/publication/47fd8fe2-e713-5a81-b033-7d1da902d783) by Datt and Ravallion paints a stirring image: extreme poverty plummeted from 46% in 1991 to under 20% within a mere decade. This is not a story of wealth merely trickling to the top; it is a tale of economic waves lifting countless souls from the depths of poverty. Nowhere is this miracle more pronounced than in rural India. [Topalova](https://www.aeaweb.org/articles?id=10.1257/app.2.4.1)’s research shines a light on this rural renaissance: a staggering 3.8% annual growth in consumption from 1991-2005, bringing households modern comforts and the basics of clean water and sanitation as well as possession of durable goods like televisions and radios. The echo of progress resonates, and it is profoundly human.

***The Zombie of Import Substitution and its Detrimental Effects***

Once, luxuries like fine foods, exotic fabrics, and rare spices were reserved for royalty and the elite as symbols of status and power. Today, these commodities, such as coffee, tea, and chocolate, are casually enjoyed by millions, with modern supermarkets offering goods from all over the world. Where kings once had reserved jesters, musicians and intellectuals, today’s individuals have devices offering music, movies, books, games, and knowledge across cultures and eras.

In the dynamically shifting landscape of global commerce, modern entrepreneurs, propelled by relentless competitive forces, strategically gravitate toward international cost-efficiency solutions to amplify product access to all. This paradigm starkly contrasts with methodologies of the past that were deeply entrenched in tradition, wary of change and viewed nascent innovations as potential disruptors. The modern drumbeat for import substitution emanates from an aspirational vision to fortify domestic industries against foreign competition, championing the cause of economic self-determination. 

Such sentiments harmoniously intertwine with the venerable *Infant Industry Argument*, which postulates that nascent sectors warrant transitory shielding. Instruments like Production Linked Incentive schemes further accentuate this doctrine, encouraging domestic production via subsidy incentives. Though intended for societal benefit and employment generation, these endeavors fundamentally misunderstand innovation’s drivers. Presuming that merely providing subsidies and securing domestic market monopolies catalyzes technological advancement is flawed. Such policies, while well-intentioned, inadvertently compromise public economic progress and living standards.

In the modern globalized world, many regions have experienced unprecedented innovations in production and consumption. Yet, these transformations have been concentrated in areas with the right institutional frameworks that encourage trade and commerce. Comparing India’s past economic isolationism with Japan provides a clear example. Post-WWII, Japan, guided by the USA, transitioned from isolationism to open trade, transforming from a war-ravaged state to an innovation hub with high living standards. Meanwhile, India opted for trade protectionism, using import substitution and subsidies, leading to less-than optimal outcomes. Instead of merely importing goods, Japan’s openness brought a wealth of knowledge and information, fostering industry efficiency and quality.

It came about because by opening up its borders to trade, Japan did not only open itself to foreign competition and foreign goods but to a vast interconnected network of knowledge and information. This crucial knowledge includes knowledge about efficient production methods, product standards, and comprehensive feedback from other market participants. Japanese entrepreneurs then employed these vital bits of knowledge in the incentive structure of the market. Furthermore, by striving to best satisfy consumers’ wishes, they could survive in the international market, earning profits and, in many cases, gradually dominating and setting standards for the industry.

The most significant gift that openness to trade provides the people of a country is access to varied markets, each with its unique bits of information and knowledge, which, having survived the cleansing process of profit and loss have  become fit for emulation, such that people can learn about the best ways of using resources. The process of innovation, which reduces cost and improves economic well-being, takes place when different existing ideas are combined skillfully, such that it replaces an existing form of technology or product. Therefore, it becomes crucial to have a wide disposal of ideas to learn and use to avoid stagnation. Trade thus acts as a bowl of inspiration for entrepreneurs looking to profitably combine and recombine ideas to best serve consumers.

Whereas, markets become diffusion points of knowledge, competition ensures adequate incentives for producers to serve consumers. The implementing trade restrictions that prevent foreign firms from serving consumers exerts a disproportional monopolizing force on consumers. This is because domestic firms face a significantly lesser ***need*** to engage in the process of innovation, which improves economic well-being than if foreign firms with better ways of using resources were allowed to serve consumers. The effects of such policies can be seen clearly when contrasting the growth trajectories of different sectors in India and [Japan](https://archive.org/details/mitijapanesemira00chal).

Protectionist measures, including high tariffs and quotas, have stymied innovation in India’s automotive sector. Such policies kept international competition at bay, resulting in a lack of motivation for domestic firms to evolve. Consequently, Indian consumers had limited access to advanced automotive products, facing high prices and limited choices compared with other countries. Contrarily, [Japan](https://www.researchgate.net/publication/236729799_Competing_to_be_Really_Really_Good_The_Behind-the-Scenes_Drama_of_Capability-Building_Competition_in_the_Automobile_Industry_review)’s automotive industry, nurtured by policies promoting competition, witnessed rapid progress. The synergy between government, industry, and academia led to pioneering research and product development, giving Japanese consumers a rich selection of vehicles.

A similar trend was observed in the [electronics](https://www.semanticscholar.org/paper/From-Partial-to-Systemic-Globalization%3A-Production-Ernst/11d836ca0b404c4700597fcb51b8990360e18bc9) sector. India’s industry, hindered by protectionism, trailed behind in technological advancement, resulting in consumers having limited access to quality electronic products. In contrast, Japan’s policies of integration and innovation rendered it a global leader in electronics, with its citizens enjoying diversely ranged advanced products.

Despite its rich iron ore reserves, [India’s](https://www.academia.edu/16343045/THE_GLOBAL_RESTRUCTURING_OF_THE_STEEL_INDUSTRY_INNOVATIONS_INSTITUTIONS_AND_INDUSTRIAL_CHANGE) steel industry faced inefficiencies because of protectionist policies and lagging in technological adoption. This impacted the quality and price of steel, narrowing the range of steel-dependent products available to Indian consumers. Japan, emphasizing technological adoption and international standards, transformed into one of the world’s most advanced steel producers, reflecting a diverse consumption basket. India’s once globally renowned textile industry experienced stagnation because of protectionism, confining consumers to traditional styles. Conversely, Japan’s emphasis on modernization and global integration led to a flourishing textile sector, offering its customers varied products. 

In conclusion, India’s experience with protectionism, when juxtaposed with Japan’s openness to global trade, unequivocally highlights the latter’s merits. Openness to trade is not merely an exchange of goods; it is a gateway to knowledge, innovation, and prosperity. Therefore, as India grapples with the ghost of trade restrictions, it should recall its lessons from the past and remove the trade embargo with China. Trading enriches economies, broadens horizons, empowers citizens, and ultimately paves the way for a nation’s sustained progress. Ignoring the evidential benefits of global integration could set India on a regressive path, potentially impeding the immense progress achieved since 1991.

Read More: [Reviving India’s Pursuit for Speed: Evolution and Challenges](https://spontaneousorder.in/reviving-indias-pursuit-for-speed-evolution-and-challenges/)

* * *

**About Vibhu Vikramaditya**

Vibhu Vikramaditya is a don lavoie fellow at Mercatus Center, George Mason University, with research interests in capital theory, monetary theory, and business cycles. He writes about events in the economy from a legal and economic standpoint with a pro-liberty outlook and believes that safeguarding the liberty and rights of each individual is the most important action toward peace, prosperity, and growth. His other works can be found at the Econ Lib, Mises.org: https://mises.org/profile/vibhu-vikramaditya, Libertarian Institute, the Austrian Economic Center, Swarajya, and The Print. He can be reached at Vibhu3333@gmail.com and on Twitter (@vibhu3333).

## Reviving India’s Pursuit for Speed: Evolution and Challenges

Original: https://www.spontaneousorder.in/p/reviving-indias-pursuit-for-speed-evolution-and-challenges

Author: Spontaneous Order

Published: 2023-08-02T11:36:25.000Z

Topics: indian-railways, transport-liberalization, public-private-partnerships, infrastructure-modernization

> Despite being a key player in India’s transport ecosystem, the railways have been steadily losing passengers to the fast-expanding aviation market providing connectivity to tier-II cities. The following article looks at the possibilities of India’s Sp

**Summary:**

Indian Railways, once central to post-independence transport, are losing long-distance passengers to aviation's dynamic growth via low-cost carriers and UDAN scheme connecting tier-II cities. The Speed Up Campaign (Mission Raftar) seeks to boost mainstream network speeds, building on pursuits since 1969 and projects like the diamond quadrilateral high-speed corridors, but infrastructural bottlenecks persist: 13 signalling failures in five years, post-Balasore upgrades including INR 1 trillion for signalling and Kavach system, INR 307 billion for track doubling, and INR 173 billion for renewals—yet CAG notes track renewal fell from INR 9,607 crores (2018-19) to 7,417 crores (2019-20). Roadblocks include slow post-liberalization adaptation, strict entry regulations stifling low-cost innovations for the poor or premium services, social resistance to upper-class trains like Rajdhani, top-down policies favoring capital-intensive ventures like INR 1,07,000 crore bullet trains amid competing cheap airfares and roads, and unprioritized Kakodkar safety investments of INR 100,000 crores. From a classical-liberal view, emulate aviation's private liberalization via Rakesh Mohan Committee's PPP push; decentralize policymaking, separate policy from operations allowing private focus on maintenance, foster creative bureaucracy to modernize infrastructure, cut travel times, and reclaim market share from airlines.

**Key points:**

- Indian Railways must prioritize signalling upgrades (e.g., Kavach) and track renewals to enable speed increases amid 13 recent failures.
- Introduce private players through PPPs to handle operations and maintenance, separating them from policymaking as per Rakesh Mohan Committee.
- Decentralize railway policymaking to involve zones, experts, and private entities for holistic infrastructure modernization.
- Shift from top-down capital projects to market-responsive innovations like low-cost rail to compete with aviation and roads.

**By Chitresh Shrivastva**

* * *

*Despite being a key player in India’s transport ecosystem, the railways have been steadily losing passengers to the fast-expanding aviation market providing connectivity to tier-II cities. The following article looks at the possibilities of India’s [Speed Up Campaign](https://www.metrorailnews.in/railways-to-introduce-mission-raftaar-to-increase-the-speed-of-train/) in regaining the passenger market and the challenges to the campaign from an infrastructural perspective.*

The railways globally, especially in India, have occupied a prominent position in the post-independence economy. However, the railway systems of first-and-third-world countries are notably distinct in their management styles and the proportions of investment in expanding their infrastructure. 

In the contemporary transport sector, the keyword dominating the game is ‘speed’. This, however, is also a point of contention, where the railways have constantly been [lagging in the long-distance segment](https://prsindia.org/policy/analytical-reports/state-indian-railways) against the rapidly growing aviation market. The aviation market has been comparatively dynamic when looking at approaches such as [Low-Cost Carriers and Inter-Regional Connectivity or the UDAN scheme](https://www.civilaviation.gov.in/sites/default/files/Final%20Regional%20Connectivity%20Scheme%20%28RCS%29.pdf), helping connect metro cities with tier-II cities and providing access to air travel at affordable fares. The railways are no exception to the idea of affordability and accessibility. Despite the fast-growing aviation market, railways are the primary means of transport for many remote communities deprived of air connectivity.     

Apart from India’s much-discussed high-speed rail corridor projects being executed under the [diamond quadrilateral programme](https://pib.gov.in/Pressreleaseshare.aspx?PRID=1594273), which aims to upgrade the existing golden quadrilateral (Delhi, Mumbai, Chennai, Kolkata) and its diagonals to high-speed rail corridors, there is an emerging need for an increase in speed on its mainstream railway network. India has been [pursuing the idea of speed since 1969](https://irfca.org/faq/faq-seltrain.html) after Japan pushed for High-Speed Railway in 1964, which had its share of challenges in its inception stages. 

The decision to increase train speeds amplified the need for infrastructural investment, which remains a challenge plaguing India’s vision for speed. Tracks and signalling contribute significantly to the issue and require foremost attention. P[er a response by Ashwini Vaishnaw in the Rajya Sabha](https://timesofindia.indiatimes.com/india/13-cases-of-signalling-failure-in-5-years-but-none-due-to-defects-in-interlocking-signal-system-railway-minister-ashwini-vaishnaw/articleshow/102023978.cms), 13 incidents of signalling failure have been reported on the Indian railway network. Post Balasore Train Tragedy, the [outlay for the upgradation](https://www.livemint.com/economy/railways-plans-1-tn-signal-system-recast-11689101622602.html#:~:text=NEW%20DELHI%20%3A%20Signalling%20systems%20along,aware%20of%20the%20plans%20said.) of the signalling system on the trunk routes has increased to avert signal malfunctioning. The railways have also planned to install [Kavach System](https://www.moneycontrol.com/news/business/explained-kavach-could-help-avert-crash-how-does-railways-collision-prevention-system-work-10736781.html) on the railway network for an automatic train protection system. Similarly, [the ministry has allocated INR 307 billion and INR 173 billion for track doubling and renewals, respectively.](https://www.railjournal.com/fleet/record-spend-at-indian-railways/) India’s quest for speed revived post-liberalisation. The high-speed railway made headway into the [2000 railway budget speech](https://indianrailways.gov.in/railwayboard/uploads/directorate/finance_budget/Previous%20Budget%20Speeches/2000-01.pdf) by the then railway minister Mamata Banerjee proposing high-speed freight routes to accelerate the transportation of freight commodities.

**Major Roadblocks in India’s Pursuit of Speed**

In the years following independence and economic liberalisation, [India has been slow in adapting to the changes](https://www.unescap.org/sites/default/files/RailwayRestructuring.pdf) experienced in the global railway communities because of social, economic, and policy challenges. Some changes are regarding adapting to the passengers’ needs with evolving times because of strict entry regulation, excluding the possibility of providing innovative forms of low-cost rail transport, which would help meet the needs of poor segments of society, or meeting the demands of those who are willing to pay. Another challenge from the social perspective was observed when India’s first high-speed train service, *Rajdhani Express*, was first launched. It witnessed resistance because of its perceived catering to the upper class rather than fulfilling the social welfare objectives of the Indian railways. This was when comfort and ambience were not the government’s priority (Aklekar, 2019). 

Furthermore, the growing operational ratio and decline in revenues post revenue indicate low resource allocation for spending on infrastructure renewal. [The Comptroller and Auditor General of India, in its report,](https://theprint.in/india/governance/safety-in-focus-but-whats-railways-spending-money-on-more-on-new-projects-less-on-upkeep/1624187/#:~:text=However%2C%20the%20Comptroller%20and%20Auditor,were%20also%20not%20fully%20utilised.) indicated the decline in track renewal works from INR 9607 crores in 2018-19 to INR 7,417 crore in 2019-20. India’s transport policies are plagued by a top-down approach with abrupt legislative interventions and an apprehensive bureaucracy working in silos. The policies are also beset by a disproportionate focus on capital-intensive projects such as the [high-speed rail corridor involving investments worth INR 1,07,000 crores](https://www.thehindu.com/news/national/other-states/mumbaiahmedabad-bullet-train-project-to-cost-rs-98000-crore/article7943313.ece), with an uncertain return on investments. The uncertainty can be attributed to cheaper airfares than before and an expanding network of roads, providing alternative and economical options to the people.  

The [Kakodkar Committee](https://indianrailways.gov.in/FINAL-BOOK-HLSRC%20latest.pdf) had projected a total investment of INR 100,000 crores for improving the safety of Indian Railways, which has been progressing at a moderate pace and requires prioritisation to help enhance safety before increasing train speeds. This includes fencing of tracks on high-speed routes, elimination of level crossings, installation of automatic signals, and complete transition from [traditional ICF coaches to LHB coaches](https://www.newindianexpress.com/nation/2022/aug/27/railwayreplacing-all-conventional-coaches-with-lhb-to-ensure-zero-casulty-in-derailment-2492010.html) to increase the speed of trains while also minimising impacts in cases of accidents. 

**The Way Forward**

India’s Speed Up Campaign has been a long pending demand since the opening of the Indian economy in 1991. The government opened the Indian aviation market for private players and gradually developed a low-cost carrier concept making air travel accessible across income levels. However, the railways [were slow to the changing economic scenario, failed to grab the pulse of the travelling public, and were increasingly resistant and sceptical to changes](https://economictimes.indiatimes.com/industry/transportation/railways/three-years-on-indian-railways-passenger-traffic-remains-below-pre-pandemic-numbers/articleshow/99458137.cms) recommended by various committees. The most prominent is the [Rakesh Mohan Committee](http://www.rakeshmohan.com/docs/Railway_Report.pdf). The committee has been instrumental in pushing forth the idea of railway restructuring during the 2001 financial crisis when the railways were severely cash strapped with only Rs.359 crores, inadequate to repay for the ageing assets. The committee has also been instrumental in promoting the idea of Public – Private Partnership at a time when the railways was a prohibited sector with the private players restricted from entering the railway sector. 

The railway sector lacks a creative and accommodating bureaucracy that has been trapped since time immemorial, with every new idea subjected to conflicting opinions between experts and bureaucrats. [The coming of private players into the foray presents opportunities and challenges](https://www.thehindubusinessline.com/news/why-private-passenger-trains-havent-found-too-many-takers/article35983648.ece). For instance, the participation of private players can help the railways distinguish roles between [policy making and operation and maintenance. The private players can focus on the latter,](https://timesofindia.indiatimes.com/blogs/voices/how-private-holding-in-the-indian-railways-can-be-a-game-changer/) while the apex body of the railways can focus on formulating and executing policies. Furthermore, they can supplement the efforts in railway modernisation. 

The policymaking process must be decentralised to help railways achieve infrastructure modernisation. This will help facilitate equal participation of the railway zones, private players and transport experts. It will also emphasise on the technicalities of infrastructure and train operations. This will provide a holistic outlook to policy distribution, expand their ambit, and balance the dominance of the road and aviation sectors. Increasing train speeds will reduce the travel time and regain a significant portion of the passenger traffic, which has been lost to airlines, improving the reputation of railways in the passenger segment.

Read more: [From Shadows to Sunshine: Maharashtra’s Trailblazing Leap into Formal Agricultural Tenancy](https://spontaneousorder.in/from-shadows-to-sunshine-maharashtras-trailblazing-leap-into-formal-agricultural-tenancy/)

* * *

**About Chitresh Shrivastva**

Chitresh Shrivastva obtained his M.Phil. in Public Policy from JAIN (Deemed to be University), Bengaluru, and his Masters in International Relations from CHRIST (Deemed to be University). He is currently pursuing his PhD on the topic “Governance of High–Speed Rail in India: A Case Study of Mumbai – Ahmedabad Region” He is currently associated with the Department of Media Studies as an adjunct faculty at CHRIST (Deemed to be University), Bengaluru. He is also an honorary member in the capacity of the board of advisors and Senior Non–Resident Fellow, Railways and Critical Transport Infrastructure at the Global Policy Insights, a Delhi-based think tank. He has also written articles for newspapers such as Dainik Bhaskar, The Hindu. He has written for other renowned publications such as The South Asia Centre, London School of Economics, The Asia and Pacific Society, Crawford School of Public Policy, Australian National University, Down To Earth, Rail Business \[FOCUS INDIA\], Global Railway Review, International Union of Railways. He has contributed chapters to edited volumes of Springer Nature, Jain University Press. He also wrote a paper titled "Border Region Railway Development in Sino- Indian Geopolitical Competition" jointly authored by Stabak Roy, Post-Doctorate Fellow, University of Gdansk, Poland, and Dhruv Ashok, PhD scholar, CHRIST (Deemed to be University), published by the Indian Council of World Affairs, a think-tank under the Ministry of External Affairs, Government of India. He has been featured on the podcast “India: Our Trains, electric” by the British Broadcasting Corporation.

## From Shadows to Sunshine: Maharashtra’s Trailblazing Leap into Formal Agricultural Tenancy

Original: https://www.spontaneousorder.in/p/from-shadows-to-sunshine-maharashtras-trailblazing-leap-into-formal-agricultural-tenancy

Author: Spontaneous Order

Published: 2023-08-01T13:45:34.000Z

Topics: agricultural-tenancy, land-leasing, land-reform, maharashtra

> Introduction Agricultural tenancy in India, a vibrant and bustling sector, has long been mired in informality, an unintended consequence of well-intentioned post-independence laws. However, the state of Maharashtra, a standout in this landscape, has rec..

**Summary:**

Maharashtra has activated its 2017 Agricultural Land Leasing Act—based on NITI Aayog's Model Land Leasing Bill 2016 and recently assented by the President—marking a classical-liberal shift to formalize agricultural tenancy stifled by post-independence laws like the 1948 Maharashtra Tenancy and Agricultural Lands Act (MTAL). Those laws, intended to protect tenants via purchase rights and rent ceilings, instead drove leasing underground: official data reveals just 0.01% formal leasing versus a 590-fold higher 5.90% informal, leaving tenants without institutional credit, crop insurance, or services. The new Act removes rent and duration restrictions, enabling free rental agreements that alleviate landlords' fears of land loss while granting tenants formal access to finance and support. This win-win reform promises elevated tenant security, stimulated landlord investments for productivity gains, quelled disputes via written leases, kindled rural entrepreneurship, and lured private capital for technological progress. The author hails Maharashtra as a torchbearer, urging other states to follow suit to shatter informality's chains and unleash India's agricultural potential.

**Key points:**

- Maharashtra's revived 2017 Act legalizes informal tenancy by removing rent ceilings and lease duration limits, addressing a 590-fold gap between 0.01% formal and 5.90% informal leasing.
- Tenant farmers gain access to institutional credit and crop insurance through formal leases previously denied under restrictive MTAL 1948 laws.
- Landlords are freed from fears of tenant land grabs, encouraging investments in land improvements and productivity.
- The reform reduces land disputes, fosters tenant entrepreneurship, and attracts private investment to modernize agriculture.
- Other Indian states should adopt similar laws to formalize tenancy nationwide and boost rural economies.

**By Arjun Krishnan**

* * *

# Introduction

Agricultural tenancy in India, a vibrant and bustling sector, has long been mired in informality, an unintended consequence of well-intentioned post-independence laws. However, the state of Maharashtra, a standout in this landscape, has recently taken a daring leap forward. On [June 27, 2023](https://www.teamleaseregtech.com/updates/article/24673/maharashtra-agricultural-land-leasing-act-2017/), it blew the dust off the Maharashtra Agricultural Land Leasing Act, 2017, and breathed life into it, heralding a transformative shift in its approach to land leasing. The enactment of this Act, based on the Model Land Leasing Bil 2016, is a momentous step that could be the rainbow after a storm for the countless tenant farmers shackled by the chains of informality.

# The Enigma of Informality

According to official data, the formal leasing landscape in Maharashtra is akin to a desert, with a scant 0.01% of land formally leased. Step into the parallel world of the informal sector, however, and this figure bursts forth, a veritable Amazon rainforest swelling to a startling 5.90%—a 590-fold [discrepancy](https://ccs.in/sites/default/files/2022-08/land_law_report_-_final_0.pdf). Within this nebulous realm, tenant farmers are adrift without a compass and deprived of critical lifelines like crop insurance, institutional credit, and support services.

# Unintended Consequences of Post-Independence Laws

Post-independence India sought to create agricultural reforms with laws like the Maharashtra Tenancy and Agricultural Lands Act 1948 ([MTAL](https://lj.maharashtra.gov.in/Site/Upload/Acts/The%20Maharashtra%20Tenancy%20and%20agricultural%20Lands%20act,%201948__Back20181029.pdf)) to protect vulnerable farmers. These laws sought to protect tenants by granting them the right to buy the land they lease at discounted rates and enforced rent ceilings. However, like opening Pandora’s Box, it unleashed a wave of unintended consequences. The onerous restrictions imposed by MTAL deterred formal leasing, driving tenants and landlords alike into the welcoming but shadowy arms of informal arrangements.

# Awakening a Dormant Solution: The Model Land Leasing Bill, 2016

The Niti Aayog, recognizing the prevalence of informal tenancy across India and the legal hurdles causing them, introduced the Model Land Leasing Bill, 2016, a lighthouse beckoning the informal leases into the sunshine of formal [recognition](https://www.niti.gov.in/sites/default/files/2020-05/Report-of-the-Expert-Committee-and-Model-Law-on-Agricultural-Land-Leasing.pdf). Its goal is to sow the seeds for a robust formal land leasing ecosystem. But despite its potential to reshape the agricultural landscape, the bill languished, collecting dust as a mere model with no state daring to awaken it from slumber. 

# Maharashtra: The Torchbearer of Change

Maharashtra’s houses of government passed a modified version of the bill in 2017 called the Maharashtra Agricultural Land Leasing Act 2017. However, this bill was stuck in limbo, waiting for presidential approval for years. After a drawn-out hibernation, the President assented to the Maharashtra Agricultural Land Leasing Act, awakening it. This new law extends an olive branch to tenants and landlords, allowing them to carve rental agreements in stone, free from rent or duration constraints. This seismic shift alleviates landlords’ fear of land loss while offering tenant farmers a golden ticket to formal credit and insurance—a win-win scenario birthed by groundbreaking legislation.

# The Ripple Effect of Reform

With its trailblazing step, Maharashtra has thrown a lifeline to the tenant farmers adrift in the stormy seas of informality. By embracing this progressive reform, the state stands poised to bring a wave of transformation that will ripple through the agricultural landscape:

1\. Elevating Tenant Farmers: Armed with formal leases, tenant farmers can claim institutional credit and insurance, reinforcing their financial fortress against nature’s whims.

2\. Stimulating Investment: The new law creates a fertile ground for landlords to sow investments into their lands, potentially reaping a harvest of improved agricultural practices and heightened productivity.

3\. Quelling Land Disputes: With leases etched in black and white, disputes between landlords and tenants can be quelled, fostering peace and stability within rural communities.

4\. Kindling Entrepreneurship: Secure land access kindles the entrepreneurial spirit of tenant farmers, potentially sparking innovation and investments that fuel rural economic growth.

5\. Luring Private Investments: The allure of a formal land leasing system might prove irresistible to private investors, ushering in a wave of technological progress and overall sectoral growth.

# Emulating Maharashtra’s Vanguardism

While Maharashtra’s groundbreaking move is a shining beacon, India’s agricultural tenancy challenges stretch beyond its borders. It’s high time other states followed in Maharashtra’s footsteps, carving their unique paths to reform. Only through this symphony of collective action can India shatter the glass ceiling of informality and unleash the dormant potential of its agricultural sector.

# Conclusion

With the enactment of the Maharashtra Agricultural Land Leasing Act 2016, Maharashtra has penned a new chapter in its agricultural saga. This bold move towards formal land leasing could revolutionise the lives of countless tenant farmers and inject new vigour into the agricultural ecosystem. The road ahead is long and fraught with challenges, but Maharashtra’s bold stride illuminates the way. As other states tread this revolutionary path, the dawn of a new era for India’s agricultural sector, free from the bonds of informality, is on the horizon. And with it, the promise of prosperity and security for the many unsung heroes labouring on India’s fertile lands.

Read more: [Scope for Multilingualism in South Asian School Education](https://spontaneousorder.in/multilingualism-in-south-asian-school-education/)

* * *

**About Arjun Krishnan**

Arjun Krishnan is a political science graduate from Ashoka University and has a master's degree from Warwick University. Prior to joining CCS, he interned with the Cato Institue and the Institute of Economic Affairs. The ideal of freedom, both economic and social, are of great importance to him. He enjoys travelling, reading books, and listening to podcasts.

## Scope for Multilingualism in South Asian School Education

Original: https://www.spontaneousorder.in/p/multilingualism-in-south-asian-school-education

Author: Spontaneous Order

Published: 2023-07-18T15:22:00.000Z

Topics: multilingual-education, language-policy, south-asia, nep-2020

> Does the medium of instruction affect how students learn Algebra and coding in South Asian schools? How can solving a quadratic equation or studying conditions change with language? Additionally, does language only impact students’ learning, or does it

**Summary:**

The article advocates for multilingualism in South Asian school education to counter English's postcolonial elitism and dominance as the medium of instruction, arguing it enhances learning in subjects like algebra and coding without harming national unity. Studies indicate students perform better in math when using preferred regional languages, and multilingual coding tutorials, as in Accenture's Filipino and Vietnamese programs, build empathy and inclusive technologies. A 2019 Forbes survey found 35% of hiring managers favor multilingual candidates proficient in English and regional languages for global jobs. Country cases highlight Bhutan's balanced Dzongkha-English approach amid endangered languages; Sri Lanka's English as unifier post-ethnic conflict; and India's 1968 Three-Language Policy and NEP 2020 recommending local languages up to Grade 8 with bilingual science/math from Grade 6. Challenges include teacher shortages, assessment difficulties, and translation limits, addressed via Finland-style pre-service training, translanguaging (e.g., Hinglish for comprehension), interpreter councils, and diverse curriculum committees inspired by UNESCO's LINKS. From a classical-liberal lens, multilingualism promotes cultural preservation, individual proficiency, and market-relevant skills through choice and inclusion, not hierarchy.

**Key points:**

- Regional languages as mediums improve mathematical proficiency and enable successful multilingual programming with translations.
- NEP 2020 recommends local language instruction up to Grade 8 and bilingual science/math teaching to balance heritage and employability.
- Adopt translanguaging and selective teacher training like Finland's to overcome implementation hurdles.
- Form diverse curriculum committees to integrate indigenous knowledge and prevent linguistic subsumption.

**By Poorvaja Jain**

* * *

Does the medium of instruction affect how students learn Algebra and coding in South Asian schools? How can solving a quadratic equation or studying conditions change with language? Additionally, does language only impact students’ learning, or does it also affect national integrity, both being equally significant? This article delves into a comprehensive exploration of multilingualism in South Asian school education, considering the presence of multiple languages, some flourishing and others endangered. 

In the current context of South Asia, especially the Southeastern region, English is considered a ‘[natural, neutral and beneficial’](https://www.jstor.org/stable/40284624) choice for learning and teaching. Being a postcolonial region, the language of colonisers holds importance; hence, its true nature and value are dubious. English is also a marker of elitism and a [link language](https://www.encyclopedia.com/humanities/encyclopedias-almanacs-transcripts-and-maps/link-language) in today’s globalised world. Simultaneously, knowledge of regional languages can promote [acculturation](https://www.thoughtco.com/acculturation-definition-3026039), blurring cultural boundaries. Thus, discussing the opportunities and challenges of introducing multilingualism in schools becomes imperative for effective policy interventions. 

**Regional languages as mediums of instruction**

Using regional languages may be easier to comprehend in subjects like geography than mathematics, which is supposed to serve as a standard, universal, objective ‘language’. For instance, ‘a+b = b+a” mean the same regardless of their representation. Several [studies](https://www.jstor.org/stable/40284624) reveal that it benefits their mathematical proficiency when people are permitted to solve mathematical problems in their [preferred language](https://www.jstor.org/stable/pdf/40284625.pdf?refreqid=excelsior%3A4db80bdabf917873be3b70871873374a&ab_segments=&origin=&initiator=).

Similarly, [multilingualism can succeed](https://www.mdpi.com/2226-471X/4/4/87) in programming languages (expected to be English-dominated) if adequate translations are available. Accenture, an Irish-American IT company, demonstrated this by effectively [organising](https://www.consultancy.asia/news/1699/accenture-extends-coding-tutorial-to-filipino-and-vietnamese-languages) [coding tutorials](https://www.consultancy.asia/news/1699/accenture-extends-coding-tutorial-to-filipino-and-vietnamese-languages) in Filipino and Vietnamese. Embracing multilingualism allows developing [empathy](https://www.mdpi.com/2226-471X/4/4/87) [and user-experience skills](https://www.mdpi.com/2226-471X/4/4/87), fostering culturally-inclusive technologies.

**Multilingualism and job opportunities** 

Any education-related discussion is incomplete without discussing its direct returns (i.e.) good job opportunities. In today’s world, most companies aspire to connect with people globally, and a link language like English helps achieve that. Furthermore, the knowledge of regional languages may supplement these benefits. A 2019 survey by [Forbes](https://www.forbes.com/sites/forbestechcouncil/2019/07/02/how-the-power-of-language-can-grow-your-career-and-business/?sh=1a1d9eae70b9) supported these beliefs by revealing that approximately 35% of hiring managers believed that being well-versed in a link language like English made multilingualism favourable for candidates.

**Country-specific cases**

The following paragraphs present the asymmetric statuses of the regional languages of three South Asian countries vis-à-vis English and each other.

*Bhutan* is a small state which has emphasised [cultural heritage, sustainable development and Gross National Happiness](https://files.eric.ed.gov/fulltext/EJ1000220.pdf) in its education policies since the 1960s. It is [socially less fragmented](https://practiceconnect.azimpremjiuniversity.edu.in/improving-the-quality-of-schooling-some-observations-from-bhutan/) than India. Currently, *[Dzongkha](https://www.researchgate.net/publication/307638356_Linguistic_landscape_of_Bhutan_An_overview_of_number_of_lan-_guages_language_policy_language_education_and_language_use_in_Bhutan)* [receives reverence](https://www.researchgate.net/publication/307638356_Linguistic_landscape_of_Bhutan_An_overview_of_number_of_lan-_guages_language_policy_language_education_and_language_use_in_Bhutan) as the lingua franca and the national language of Bhutan, while English is the medium of instruction in most schools. It is interesting to learn that the former does [not get neglected](https://practiceconnect.azimpremjiuniversity.edu.in/improving-the-quality-of-schooling-some-observations-from-bhutan/) because of the latter, which is generally true in many multilingual countries. However, this does not imply that Dzongkha enjoys an equal status as English. For instance, Dzonghka [textbooks still need to be produced in various technical subjects](https://www.researchgate.net/publication/307638356_Linguistic_landscape_of_Bhutan_An_overview_of_number_of_lan-_guages_language_policy_language_education_and_language_use_in_Bhutan). With over 20 living languages in Bhutan, including Hindi, many languages are endangered because of the lack of a script, showing that no literature and education policy caters to them. Hence, Bhutan may not suffer much linguistic imbalance if certain tangible resources like books are provided in various scripts.

*Sri Lanka* has experienced severe [ethnic conflict](https://www.researchgate.net/publication/341545007_The_Struggle_for_a_Multilingual_Future_Youth_and_Education_in_Sri_LankaYouth_and_Education_in_Sri_Lanka?enrichId=rgreq-14ae1bddad954719e6d67baf67e68576-XXX&enrichSource=Y292ZXJQYWdlOzM0MTU0NTAwNztBUzoxMTI4) in the past owing to its language and education policies. Learning English along with Sinhala or Tamil has enabled teaching many subjects in English. Having a common language amongst plural ethnicities, which does not favour a particular ethnicity and cross-linguistic flexibility, has [positively changed social relations](https://www.researchgate.net/publication/332599569_Bilingual_Education_Classrooms_in_Sri_Lankan_Schools_A_Social_Space_for_Ethnolinguistic_Reconciliation) towards increased recognition and acceptance of diversity. Hence, English serves as a unifier rather than an antagonist to the local groups responsible for their erosion. However, some ethnic inequalities persist, suggesting that language policy alone cannot bring national integrity.

Lastly, *India,* like other South Asian countries*,* has [three imperatives](https://www.cambridge.org/core/journals/annual-review-of-applied-linguistics/article/abs/multilingualism-and-education-in-south-asia-resolving-policypractice-dilemmas/5AB870671FBBCF2CD133828160C09569) in this context: safeguarding minority languages, establishing a national identity, and gaining access to socio-economic resources through English. The [Three-language Policy](https://frontline.thehindu.com/cover-story/language-in-education-theres-power-in-multilingualism/article38492094.ece) was introduced in 1968 to achieve these imperatives. It required students to learn (a) the regional language of the State, (b) Hindi in the non-Hindi speaking areas and any other Indian language in the Hindi-speaking areas, and (c) English or any other modern European language. However, the [policy implementation has been](https://www.jstor.org/stable/3444906) more difficult in small towns and rural areas than in urban areas experiencing a shortage of teachers. It has also [reinforced the pre-existing linguistic hierarchies](https://www.cambridge.org/core/journals/annual-review-of-applied-linguistics/article/abs/multilingualism-and-education-in-south-asia-resolving-policypractice-dilemmas/5AB870671FBBCF2CD133828160C09569). The [New Education Policy 2020](https://frontline.thehindu.com/cover-story/language-in-education-theres-power-in-multilingualism/article38492094.ece), a recent development in the education system, recommends, ‘*wherever possible, the medium of instruction until at least Grade 5, but preferably till Grade 8 and beyond, will be the local language*’. Students should also begin learning science and mathematics bilingually in Grade 6 so that they can discuss them in their home language and English (if they are different) by the end of Grade 9. It also recommends [standardising](https://www.educationworld.in/nep-2020-school-education-multilingualism/) [sign language](https://www.educationworld.in/nep-2020-school-education-multilingualism/). The policy is yet to be implemented. Hence, while India has made immense efforts, in theory, people await real action!

**The challenges of multilingual education and their solutions**

The challenges of multilingual education are evident in these cases. First, there is a significant lack of clarity regarding what multilingualism implies in a country’s education, and many questions remain unanswered. Would multiple languages be used as mediums of instruction or taught as separate subjects? Would schools be designated for specific languages, or would they offer varied options? Lastly, whether these policies would apply to public and private schools is also unclear.

Including multiple languages in the curriculum invites [difficulty in grading and assessing students](https://www.mdpi.com/2226-471X/4/4/87) and the time and labour-intensive process of preparing lesson plans, especially in subjects like programming languages. 

Additionally, the teacher capacity in the above countries is lacking. Improving the quality and quantity of education can yield better outcomes in multilingual education, which often involves cumbersome tasks. One solution is investing heavily in pre-service teacher education, as successfully done in [Finland](https://blogs.worldbank.org/education/teachers-and-trust-cornerstones-finnish-education-system). When aspiring educators undergo proper training, their techniques enhance. Aspirants must possess passion, time, and skills to be willing to undergo extensive training, making recruitment selective and ensuring that only the most qualified candidates are chosen. This approach may seem counterintuitive to addressing inadequate teacher capacity. However, imagine the potential achievements regarding workload and learning outcomes with an efficient body of teachers!

The translation limitations also pose a challenge, especially in preparing assessments and comprehending international research. Hence, councils of [interpreters](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6778489/) who can help in translation and data analysis are recommended. 

As a small-scale example, based on personal experiences of developing lesson plans for multilingual children from Asawarpur, Haryana, the author believes that translanguaging benefits children. *[Translanguaging](https://www.tandfonline.com/doi/full/10.1080/01434632.2017.1284855)* refers to the combined usage of languages from one’s language repertoire, such as ‘Hinglish’ (a mixture of Hindi and English) used in the everyday conversations of many Indians. This has two significant [academic benefits](https://minnetesoljournal.org/journal-archive/mtj-2021-2/academic-benefit-of-translanguaging/): an improved comprehension of academic content and the formation of connections between regional languages and English, enabling good acquisition of English. However, many English-medium schools prohibit using regional languages to communicate on their premises, consequently reinforcing the superiority of English. Similarly, the children from Asawarpur enjoyed learning English. However, they faced difficulties memorising its concepts because they lacked exposure to English outside the classrooms and unrelatable examples in the curriculum. Hence, [translanguaging addresses this linguistic hierarchy](https://minnetesoljournal.org/journal-archive/mtj-2021-2/academic-benefit-of-translanguaging/). It may allow for balanced learning of regional languages (important for preserving cultural heritage) and English (important for various educational and employment opportunities).

Lastly, the prospect of linguistic chauvinism reigning needs to be tackled while ensuring that [many languages are not](https://frontline.thehindu.com/cover-story/language-in-education-theres-power-in-multilingualism/article38492094.ece) [subsumed](https://frontline.thehindu.com/cover-story/language-in-education-theres-power-in-multilingualism/article38492094.ece) under the dominant one as mere dialects. Therefore, curriculum development committees should be formed to represent diverse knowledge systems (closely connected to languages). We may take inspiration from UNESCO’s [Local and Indigenous Knowledge Systems Programme](https://en.unesco.org/links) (LINKS) initiative for climate change. LINKS aims to establish a dialogue between scientific knowledge holders and indigenous people to blend technology with sustainable traditions. Similarly, previously marginalised groups can be consulted and involved in the curricula development process in South Asian schools. 

**Conclusion**

Introducing multilingualism in South Asian schools is a valuable option, considering the sociolinguistic context. Furthermore, although it can cater to identity politics and enhance students’ intelligence and proficiency, it cannot serve as the sole tool to embrace unity. While preserving native languages is important, education may not always be a viable approach to achieving this. Simultaneously, the status of English may seem irreplaceable, but it should not be promoted and prioritised at the expense of other languages. Thus, with sensitivity, empathy and inclusivity, multilingualism may thrive!

Read more: [Solving India’s Solid Waste Management Problem: Undoing the Legacy of Waste](https://spontaneousorder.in/solving-indias-solid-waste-management-problem-undoing-the-legacy-of-waste/)

* * *

**About Poorvaja Jain**

Poorvaja is a student of Psychology and Philosophy at Ashoka University, Sonepat. She aspires to join the field of public policy, in particular, education policy. Her non-academic interests include writing, managing her Instagram page, organising events and documenting the world around her through photos and videos.

## Solving India’s Solid Waste Management Problem: Undoing the Legacy of Waste

Original: https://www.spontaneousorder.in/p/solving-indias-solid-waste-management-problem-undoing-the-legacy-of-waste

Author: Spontaneous Order

Published: 2023-07-12T13:09:52.000Z

Topics: solid-waste-management, circular-economy, urban-governance, right-to-repair

> India has been on a trajectory of progressively increasing levels of urbanisation since independence, with waves of migration from rural to urban agglomerates in search of better life and employment opportunities. Presently, over 377 million urban peopl..

**Summary:**

India's rapid urbanization, with 377 million urban residents generating 62 million tonnes of municipal solid waste annually (160,000 TPD), faces governance failures from resource-starved Urban Local Bodies (ULBs) plagued by insufficient funds, functions, and functionaries. Only 75-80% of waste is collected, 22-28% untreated, with 43,000 TPD neither segregated nor scientifically processed, perpetuating unscientific 'lift and dump' landfills. From a classical-liberal viewpoint, the linear 'take-make-dispose' model must yield to a circular economy prioritizing waste prevention, measurement ('what gets measured gets managed'), and market-driven solutions. Swachh Bharat Mission 2.0 aims for garbage-free cities but lacks standardized technologies and outcomes. Key reforms include mandating 'segregator indicators' on product packaging for source segregation, legislating 'right to repair' for e-waste to generate $20 billion annual revenue and 5 million jobs by 2025, and emulating private-NGO models like Pune's SWaCH cooperative, achieving 100% collection via decentralization, audits, and informal worker integration. Comprehensive waste data inventories and public-private partnerships will enable proactive, low-cost strategies toward zero-waste sustainability, countering reactive state-led inefficiencies.

**Key points:**

- Mandate segregator indicators on all product packaging to enable source segregation and reduce community participation costs.
- Legislate 'right to repair' for electronics to extend product lifespans, cut e-waste, and create $20 billion revenue and 5 million jobs annually from 2025.
- Shift to private-NGO waste collection models like Pune's SWaCH, achieving 100% efficiency through decentralization and informal worker formalization.
- Prioritize waste measurement with consolidated data inventories to inform circular economy strategies and public-private incentives.

**By Anmol Rattan Singh**

* * *

India has been on a trajectory of progressively increasing levels of urbanisation since independence, with waves of migration from rural to urban agglomerates in search of better life and employment opportunities. Presently, over [377 million](https://www.downtoearth.org.in/blog/waste/india-s-challenges-in-waste-management-56753) urban people live in 7,935 towns and cities, which is expected to double by 2035. Urban India generates [62 million](https://www.downtoearth.org.in/blog/waste/india-s-challenges-in-waste-management-56753) tonnes of municipal solid waste per annum. Several landfills surpassing the heights of globally recognised monuments like Qutub Minar are now a common sight in cities.

### **Resource-starved Urban Local Bodies**

Sanitation primarily rests in the domain of the state list, with solid waste management (SWM) being an essential service provided by Urban Local Bodies (ULBs). However, ULBs continue to face the historical problem of the three F’s, *funds, functions, and functionaries*, making them vulnerable to governance failures.

ULBs are yet to ensure a [100](https://www.ndtv.com/delhi-news/delhi-needs-44-small-dams-480-new-waterbodies-study-1444048) per cent collection of solid waste. Under the *Swachh Bharat Mission*, the releases to ULBs were a meagre 50 per cent of the total budget allocation. Hence, only [75-80](http://www.indiaenvironmentportal.org.in/files/file/Urban%20Development.pdf) per cent of the municipal solid waste (MSW) is collected, of which [22-28](http://www.indiaenvironmentportal.org.in/files/file/Urban%20Development.pdf) per cent remains untreated or unprocessed. Furthermore, per the [Annual Report of the Central Pollution Control Board for 2020-21](https://cpcb.nic.in/openpdffile.php?id=UmVwb3J0RmlsZXMvMTQwM18xNjU1MzU0NzkxX21lZGlhcGhvdG8xNjQ3MS5wZGY=), India generated approximately 160,000 tonnes per day (TPD) of solid waste, of which approximately 153,000 TPD was collected, 80,000 TPD was segregated and treated, and 29,000 TPD was landfilled. Thus, the remaining waste of approximately 43,000 TPD was neither segregated nor treated scientifically. The mounting heaps of garbage and stinky landfills now dot the landscape of metropolitan cities like Maharashtra and Delhi, which continue to lead in per-day solid waste generation.

A critical challenge faced in solid waste management pertains to the *‘lift and dump’ model* pursued by contract-based transporters hired by the municipalities. Presently, around [20](http://www.indiaenvironmentportal.org.in/files/file/Urban%20Development.pdf) per cent of ULBs’ budget is spent on paying transporters engaged in the dumping of the wastes. This model has outlived its utility, as landfills continue operating unscientifically because they lack suitable liner systems, leachate management, gas collection, and treatment. This makes the untreated waste vulnerable to uncontrolled fires, insufficient coverage and odour control, and poor waste segregation and recycling methods. Transporters are rarely interested in how the waste is disposed of and processed.

The *[Swachh Bharat Mission 2.0](https://sbmurban.org/storage/app/media/pdf/swachh-bharat-2.pdf)* intends to make Indian cities garbage-free through effective waste source segregation, 100% door-to-door pickup, and thorough waste remedial treatment. However, India still needs solutions that quantify the outcome towards a high-value, low-cost strategy. There persists a particular requirement to standardise relevant technologies with cost breakdowns for operation and maintenance, including procurement, in addition to official identification and appointment of service providers.

Currently, India’s *linear-waste management approach* (comprising resource extraction, manufacture, consumer use, and trash disposal based on a ‘take-make-dispose’ concept)  remains squarely focused on [waste disposal](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5383819/). This preferential pattern must be switched and waste prevention prioritised to ensure a complete harmonisation and shift towards a circular economy. These steps must be within a framework where the ‘measurement’ of solid waste is considered the key aspect. Placing waste management at the centre stage will enable informed decision-making, developing effective waste management strategies, evaluating initiatives, and  monitoring progress towards waste reduction and sustainability goals. 

At present, India lacks [measurement indicators for solid waste](https://link.springer.com/chapter/10.1007/978-3-030-84180-5_4#:~:text=A%20weighbridge%20system%20is%20applied,waste%20dumped%20at%20the%20landfill.); hence, a consolidated data inventory must be created since ‘what gets measured gets managed’. This approach would keep the policymakers ahead in the race to a zero-waste future while ensuring a sustainable future for all.

[

![](https://substackcdn.com/image/fetch/$s_!GmrG!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F224282c9-0902-4b40-b35c-66ef5369c372_1600x824.png)



](https://substackcdn.com/image/fetch/$s_!GmrG!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F224282c9-0902-4b40-b35c-66ef5369c372_1600x824.png)

*[Figure 1:The Waste Hierarchy and the Circular Economy](https://ieg.worldbankgroup.org/sites/default/files/Data/Evaluation/files/MunicipalSolidWasteManagement_v5.pdf)*

*Note. Panel (a) illustrates the waste management hierarchy framework that guides and ranks waste management decisions at individual and organisational levels. Panel (b) illustrates the circular economy approach as a sustainable alternative to the traditional linear model.*

### **The Way Forward**

India’s SWM lacks effective waste segregation at the point of origin, primarily because of no segregator indicator on product packaging. As part of a product’s packaging, this indicator designates the proper waste stream (recyclables, non-recyclables, or organic waste) for disposal of the product. The segregator indicator acts as a visual indicator for consumers on the appropriate manner of disposal, dissuading the waste generator from disposing of the waste in separate bins. Therefore, the government must frame ‘segregator indicator at every product’ bye-laws to enable effective waste segregation. Visual disposal cues on product packaging would cut down on community participation expenditures. Furthermore, by incorporating clear symbols or labels on product packaging, the segregator indicator system automates knowledge dissemination, allowing individuals to easily understand and follow waste segregation guidelines. This further improves waste management practices and raises public awareness at no additional cost to the producer. As the famous saying goes, *charity begins at hom*e; hence waste segregation at the point of origin itself will streamline the subsequent processes. The Ministry has issued [guidelines](https://cpcb.nic.in/uploads/plasticwaste/2-amendment-pwmrules-2022.pdf) for extended producer responsibility for plastic packaging, mandating targets for recycling plastic packaging waste, reusing rigid plastic packaging, and using recycled plastic content. While the government has been proactive in introducing  *[extended producer responsibility guidelines](https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1909909#:~:text=The%20Guidelines%20on%20Extended%20Producer,use%20of%20recycled%20plastic%20content.)*, currently, there is no proposal under consideration for introducing a ‘Segregator Packaging Indicator’.

The increasing thrust of digitisation and e-governance is also resulting in rising e-waste. Per the Ministry of Electronics and Information Technology, the e-waste generation in India is increasing at a rate of ten [](https://www.meity.gov.in/writereaddata/files/EWaste_Sep11_892011.pdf)per cent per annum. An effective way to tackle e-waste is using the ‘repair not replace’ approach, thereby prolonging the durability of electronic products. The *[‘right to repair’](https://ec.europa.eu/commission/presscorner/detail/en/ip_23_1794)* [movements](https://ec.europa.eu/commission/presscorner/detail/en/ip_23_1794) worldwide testify to the increasing acceptance of this approach as it extends product lifespans, reducing e-waste, and fostering innovation. Moreover, it would boost product competition while upholding digital rights and promoting knowledge sharing. For instance, in India, industry figures estimate an annual revenue of over *[$20 billion](https://economictimes.indiatimes.com/industry/cons-products/electronics/india-as-electronics-repairs-hub-can-create-annual-20-billion-revenue-five-million-jobs/articleshow/82220627.cms?from=mdr)* for four years from 2025 onwards and an employment generation of over five million jobs in the electronics repairing sector. Hence, in rapidly developing countries like India, the idea of the right to repair should be legislated to prevent unnecessary waste generation.

Considering the complexities of steps involved in urban waste management, policymakers should take lessons and emulate best practices at each step. *Mawlynnong*, dubbed Asia’s cleanest village, saw increased community participation in waste management. Similarly, *Indore*, which has topped Swachh Bharat Rankings, has been instrumental in efficiently organising door-to-door waste collection from source and ensuring effective waste segregation. 

One such step that is highly recommended is where waste collection is done by private contractors and NGOs. Data shows a [100](https://www.orfonline.org/wp-content/uploads/2020/11/ORF_OccasionalPaper_283_SolidWasteManagement_FinalForUpload-2.pdf) per cent waste collection efficiency in these jurisdictions. An example of the public-private model is the *Pune-based Solid Waste Collection and Handling Cooperative Society,* formed in 2008. It has successfully upgraded [Pune’s SWM system](https://resilientcitiesnetwork.org/wp-content/uploads/2022/10/case-study-pune-01-.pdf) by incorporating transparent third-party audits, decentralisation with NGO and private sector participation, and diverse waste management initiatives, including bio-methane plants, composting projects, and waste separation systems. Collaborations with private CSR initiatives and the successful implementation of waste recycling for energy recovery have further contributed to Pune’s waste management model. Pune’s SWM model has boosted and preserved the lives of its 3,500+ informal waste worker members through the SWaCH Cooperative. Through daily interactions with the public, media events, and international platforms, the waste workers engage with the community to raise awareness about best waste management practices. Additionally, the cooperative extends support to the families of waste workers, offering work opportunities and access to formalised services, such as ID cards and insurance, and micro-credit, education and vocational training for their family members. The initiative successfully integrated marginalised waste workers into the formal waste management system and fostered deep engagement within the community.

As India imbibes its journey of being a net-zero emitter, it is important to reiterate the need to combine innovative solutions with data measurement and collection. Proper management of waste data has two main benefits. First, it allows us to focus on and fix areas that need improvement, thus saving money. Second, it helps us plan and implement new technologies and incentives, encouraging the private and public sectors to work together. As India moves towards creating a circular economy, it is imperative that our approach to SWM is proactive and not reactive and that steps are taken to ensure that India is not left behind in the race to a sustainable future.

Read more: [The Siren Call of Welfare Politics: A Bad Political Equilibrium](https://spontaneousorder.in/the-siren-call-of-welfare-politics-a-bad-political-equilibrium/)

* * *

**About Anmol Rattan Singh**

Anmol Rattan Singh is pursuing his MA in Public Policy and Governance from Centre for Federal Studies, Jamia Hamdard, New Delhi.

## The Siren Call of Welfare Politics: A Bad Political Equilibrium

Original: https://www.spontaneousorder.in/p/the-siren-call-of-welfare-politics-a-bad-political-equilibrium

Author: Spontaneous Order

Published: 2023-06-06T17:06:35.000Z

Topics: welfare-politics, fiscal-deficits, agricultural-subsidies, indian-elections

> The Indian National Congress’s (INC) recent victory in the Karnataka elections, buoyed by an aggressive welfare agenda, has drawn applause from many quarters. Supporters are touting this as a blueprint for success in the 2024 national elections, calling

**Summary:**

The Indian National Congress's Karnataka election victory, driven by welfare guarantees like free bus rides for women, ₹2,000 monthly to women heads of families, ₹3,000 unemployment allowance for graduates, ₹1,500 for diploma holders, 10 kg rice, and 200 units free power per household, signals a risky blueprint for 2024 national polls. This mirrors the 2004 shift from Vajpayee's reforms to UPA's welfare focus, where MGNREGA costs rose from 0.3% to 0.6% of GDP with only 32% funds reaching the poor due to corruption, and the Food Security Bill projected 1% GDP subsidy with 15% leakages. Fiscal deficits ballooned from 4.5% to 6.5% of GDP, public debt-to-GDP from 66.3% to 68.6%, crowding out capital expenditure. Both INC and BJP indulge in such politics—BJP in UP and Assam with loan waivers and cash transfers straining finances; states like Tamil Nadu (4.4% deficit), Telangana (3.9%), and AAP's Delhi face FRBM breaches. Punjab exemplifies long-term fallout: free electricity spurred 165% groundwater over-extraction, paddy monoculture, 86% indebted farmers (₹5.52 lakh/household average), stubble burning, and stagnation. From a classical-liberal view, welfare politics creates a race-to-the-bottom equilibrium undermining efficiency; governments must prioritize property rights, civil society, entrepreneurship, and targeted, accountable welfare to foster self-sustainability and prosperity.

**Key points:**

- INC's Karnataka welfare promises risk nationwide fiscal strain akin to UPA's MGNREGA (0.6% GDP cost, 68% leakages) and Food Security Bill (15% leakages).
- BJP states like UP, Assam, and others pursue populist subsidies breaching FRBM limits, mirroring INC's approach.
- Punjab's free electricity and MSP led to 165% groundwater over-extraction, farmer debt (86% at ₹5.52 lakh/household), and environmental degradation.
- Reform by upholding property rights and civil society to unleash entrepreneurship, while making welfare efficient and less dependency-inducing.

**By Vibhu Vikramaditya**

* * *

The Indian National Congress’s (INC) recent victory in the Karnataka elections, buoyed by an aggressive [welfare](https://www.msn.com/en-in/news/other/karnataka-polls-people-of-state-have-decided-to-choose-welfare-oriented-govt-mallikarjun-kharge/ar-AA1aYLXf) agenda, has drawn applause from many quarters. [Supporters](https://www.thequint.com/opinion/welfare-politics-over-gandhis-karnataka-win-must-guide-congresss-2024-plan) are touting this as a blueprint for success in the 2024 national elections, calling for a nationwide extension of the welfare policies espoused in Karnataka.

After Congress had won its decisive victory in Karnataka, its party leader Rahul [Gandhi](https://timesofindia.indiatimes.com/videos/toi-original/rahul-gandhi-vows-to-keep-the-5-promises-congress-made-in-election-rallies/videoshow/100211915.cms?from=mdr) reaffirmed the guarantees that were part of the party’s manifesto. The guarantees include free bus rides to women, ₹ 2,000 per month to women heads of families, ₹ 3,000 unemployment allowance to graduates, and ₹ 1,500 to diploma holders. The party will also give every household 10 kg of rice and 200 units of free power every month. Such commitments, while undoubtedly appealing to the public, foreshadow a considerable potential financial burden and potential inflationary pressures that could exert a destabilizing effect on the economy.

The current scenario bears an uncanny resemblance to the political landscape during the transition from the Vajpayee-led Bharatiya Janata Party government to the INC-led United Progressive Alliance (UPA) government. The early Vajpayee years focused on structural reforms, fiscal consolidation, and infrastructure development. However, the INC’s welfare-oriented rhetoric in the subsequent elections outshone these efforts. The UPA government swept to power on the back of extensive welfare promises. It implemented several wide-ranging schemes that, while beneficial in the short term, led to fiscal strains and systemic inefficiencies, as mentioned previously. 

***Welfare Politics: A Race to the Bottom***

India, an emerging economic giant and the world’s largest democracy, boasts a complex and diverse political landscape. The country’s history is marked by a deep-rooted commitment to social welfare, inextricably linked to its political ethos. Welfare policies have often been used as powerful tools for political mobilization, shaping electoral dynamics, and influencing governance paradigms. However, it often leads to bad political equilibrium—a state of affairs compromising efficient economic decision-making and hampering long-term development.

The period from 2004 to 2012 under the UPA, was a significant phase in the Indian political economy. This period was marked by an increase in subsidy-based politics, which, although intended to provide a safety net for the underprivileged, resulted in substantial fiscal strain and exacerbated systemic issues such as bureaucratic corruption and indebtedness. 

Two major initiatives of the UPA government, the Mahatma Gandhi National Rural Employment Guarantee Act ([MGNREGA](https://mnregaweb4.nic.in/netnrega/MISreport4.aspx)) and the [Food Security Bill](https://prsindia.org/billtrack/the-national-food-security-bill-2011) epitomized their approach toward subsidy-based politics. While these initiatives were perceived as steps toward social equity, a deeper analysis reveals a more complicated picture. MGNREGA, which guarantees 100 days of wage employment in a year to every rural household, was hailed as a revolutionary step toward eliminating rural distress. However, the costs associated with the scheme were substantial, rising from around 0.3% of the gross domestic product (GDP) in 2006-07 to 0.6% in 2009-10, per the [Reserve Bank of India’s report](https://www.rbi.org.in/scripts/AnnualReportPublications.aspx?Id=1048).

Furthermore, benefits from MGNREGA were often marginal because of systemic inefficiencies and corruption. The National Council for Applied Economic Research [found](https://www.ncaer.org/ncaer-microsites) that only about 32% of the total funds were actually received by poverty-stricken individuals in 2010. The rest were lost in leakages and misappropriation at various levels, indicating rampant low-level bureaucratic [corruption](https://www.jstor.org/stable/25664171).  Since 2010, the Indian government has introduced several measures to curb these leakages, especially in key welfare programs like MGNREGA and PDS such as the introduction of Aadhaar, a biometric-based unique identification number for individuals, and Direct Benefit Transfer with Adhar linked bank accounts. 

However, the [implementation](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3045235) of this system, far from facilitating seamless access to benefits, has created additional hurdles for beneficiaries such as biometric failures and network issues that have denied rightful beneficiaries their entitlements, effectively contributing to the very leakage the system sought to prevent.

The Food Security Bill aimed to provide subsidized food grains for approximately two-thirds of India’s [1.2](https://egazette.nic.in/WriteReadData/2013/E_29_2013_429.pdf) billion population. The estimated annual food subsidy bill was projected at around [1.25](https://timesofindia.indiatimes.com/india/Govt-defers-promulgation-of-ordinance-on-Food-Security-Bill/articleshow/20569710.cms) lakh crore, approximately 1% of India’s GDP. However, a Comptroller and Auditor General of India [report](https://www.cag.gov.in/uploads/download_audit_report/2016/Union_Civil_National_Food_Security_Report_54_of_2015.pdf) for 2015 found that around 15% of the total food grains did not reach the intended beneficiaries from 2009-2011 because of leakages.

Such high expenditure on subsidies had far-reaching implications for India’s fiscal health. From a fiscal deficit of 4.5% of GDP in 2007-08, the deficit widened to [6.5%](https://www.indiabudget.gov.in/budget2011-2012/es2010-11/estat1.pdf) in 2009-10. This increase was primarily financed through borrowing, significantly increasing public debt. The public debt-to-GDP ratio rose from 66.3% in 2007-08 to 68.6% in 2012-13, which had major implications.

First, it raised the interest burden. Interest payments as a percentage of total revenue receipts of the central government rose from 33% in 2007-08 to [36%](https://www.insightsonindia.com/2014/07/09/download-economic-survey-2013-2014-pdf/) in 2012-13. This left less fiscal space for the government for capital expenditure, which is crucial for long-term growth. Second, the high fiscal deficit and debt had a bearing on India’s current account deficit. 

However, Welfare politics is not solely a strategy used by the INC. The BJP has extensively employed welfare politics in its governed states, manifesting in populous policies for electoral gains. In Uttar Pradesh, the BJP implemented measures such as farm loan waivers, free housing, and electricity connections [increasing](https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/STATEFINANCE2021227C651261B0DD463396E448E1D6528D88.PDF) the fiscal strain. Similarly, Assam, under BJP rule, introduced populist measures, including direct cash transfers and free rice provision causing a [surge](https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/STATEFINANCE2021227C651261B0DD463396E448E1D6528D88.PDF) in the state’s debt-GSDP ratio to 21.9%.

The practice of welfare politics by different political parties across India is increasingly leading to fiscal profligacy, as states continue to make populist promises that strain their financial resources.  India’s widespread welfare politics, seen in initiatives like Tamil Nadu’s ‘Amma Canteens’ by AIADMK and Telangana’s ‘Rythu Bandhu’ scheme by TRS, is straining states’ finances. The 2022-23 RBI [report](https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/0STATEFINANCE2022233E17F212337844888755EFDBCC661812.PDF)  highlights Tamil Nadu’s significant debt and 4.4% fiscal deficit, and  Telangana’s 3.9% deficit, both breaching the FRBM-prescribed 3% threshold. Further AAP’s populist policies like free electricity and water have also led to financial issues.Its gross deficits while still at 1.6% is relatively high for the capital in comparison with its past. 

***Welfare Politics in Punjab: Assessing the Long-term Fallout***

Once a beacon of prosperity and a symbol of the successful Green Revolution, Punjab presently tells a cautionary tale. Punjab’s success story started gradually fraying around the edges, their increasing reliance on welfare politics being a major contributing factor. While initially popular, policies such as free electricity for farmers and various subsidies started distorting their economic and environmental equilibrium. The free electricity policy, for instance, led to excessive groundwater extraction as farmers had little incentive to conserve energy or [water](https://link.springer.com/book/10.1007/978-94-007-5709-7). This resulted in a significant drop in the water table, threatening the long-term sustainability of agriculture in the state. 

The Green Revolution in the 1960s and 1970s significantly shifted Punjab’s agricultural landscape, introducing high-yield variety seeds, primarily wheat, and paddy. This was met with initial resistance, skepticism, and [rejection](https://academic.oup.com/book/40846) from the government and bureaucracy. However, entrepreneurial risk-taking farmers utilized them and were rewarded for their enterprising attitude. Upon being encouraged by its success, the state later implemented a minimum support price (MSP) and free electricity for groundwater extraction, encouraging all farmers to increasingly adopt paddy cultivation. This gradually led to a monoculture, with paddy and wheat dominating Punjab’s agricultural landscape.

However, paddy (primarily suited to the Gangetic plains) is a water-intensive crop ill-suited to Punjab’s semi-arid climate. The artificial competitiveness of paddy, fueled by subsidies, has led to the over-extraction of groundwater. Studies show that Punjab is extracting groundwater at [165%](http://cgwb.gov.in/GW-Assessment/GWRA-2017-National-Compilation.pdf) of its natural recharge capacity, leading to a severe water crisis.

The over-reliance on subsidies had another unintended consequence of discouraging entrepreneurial spirit among Punjab’s farmers. Instead of diversifying their crop production or venturing into allied activities like livestock, farmers are caught in a wheat-paddy cultivation cycle owing to the assurance of receiving the MSP. Research shows that farm incomes in Punjab could increase up to [60%](https://www.cabdirect.org/cabdirect/abstract/19921899690) if farmers diversified their crops and adopted modern farming practices. However, the safety net of subsidies and MSP discourages such endeavors. Consequently, [farmers](https://journals.sagepub.com/doi/abs/10.1177/09767479211031312?journalCode=atha) are more vulnerable to price shocks and changes in government policy, potentially having devastating consequences for their livelihoods.

Punjab’s agricultural practices have further led to significant environmental consequences, such as soil nutrient depletion and declining yields. Burning paddy stubble, a common practice, contributes significantly to air pollution. Excessive farm subsidies have resulted in a cycle of indebtedness, with [86%](https://www.jstor.org/stable/44166175) of farmers trapped in debt averaging *₹ 5.52 lakh per household*. Despite its previous prosperity, Punjab now grapples with economic stagnation, environmental degradation, and a notable trend of emigration. It serves as yet another warning in the long line of failures where the political parties played with the future of their constituents by relying on welfare politics to meet their short-term political agenda.

***Conclusion***

 In conclusion, the overemphasis on welfare politics in India has shown it can undermine economic health and stunt long-term development, as seen in the UPA regime and in Punjab. Governments should refocus efforts on fostering an environment conducive to individual productivity and self-sustainability. This involves promoting and upholding civil society and property rights, thus allowing the inherent entrepreneurship and creativity of the people to flourish. By ensuring these rights, we encourage personal investment in the economy, leading to prosperity emerging from the grassroots level. 

This transition should be accompanied by reforms to make welfare schemes more efficient and accountable, reduce dependency, and ensure their integration with broader economic and environmental goals. 

Read more: [Congestion Pricing: Road to a Better Living?](https://spontaneousorder.in/congestion-pricing-road-to-a-better-living/)

* * *

**About Vibhu Vikramaditya**

Vibhu Vikramaditya is a don lavoie fellow at Mercatus Center, George Mason University, with research interests in capital theory, monetary theory, and business cycles. He writes about events in the economy from a legal and economic standpoint with a pro-liberty outlook and believes that safeguarding the liberty and rights of each individual is the most important action toward peace, prosperity, and growth. His other works can be found at the Econ Lib, Mises.org: https://mises.org/profile/vibhu-vikramaditya, Libertarian Institute, the Austrian Economic Center, Swarajya, and The Print. He can be reached at Vibhu3333@gmail.com and on Twitter (@vibhu3333).

## Congestion Pricing: Road to a Better Living?

Original: https://www.spontaneousorder.in/p/congestion-pricing-road-to-a-better-living

Author: Spontaneous Order

Published: 2023-03-30T10:57:36.000Z

Topics: congestion-pricing, traffic-congestion, urban-mobility, air-pollution

> The importance of time is not lost on us– whether it is the two minutes we fight for during examinations or the two minutes determining if we make it in the nick of time with that one meeting with our boss. Yet, somehow in our daily commutes we do not t

**Summary:**

India's major cities suffer severe traffic congestion, with Bengaluru ranked second and Pune sixth globally per the 2022 TOMTOM Traffic Index, leading to 134 extra hours annually in Pune, 3 days 12 hours in Mumbai, and similar losses elsewhere, plus 208-275 kg CO2 emissions per commuter. These impose negative externalities like time waste and air pollution, linked to 385,000 deaths from diesel emissions. The author advocates congestion pricing—charging vehicles for entering peak-hour zones in business districts—as a classical-liberal solution to internalize these costs, drawing from successful implementations in London (30% congestion drop, 15-20% CO2 reduction post-2003), Singapore (since 1975), and Hong Kong. Existing policies like Smart Cities Mission improve infrastructure indirectly but fail to limit vehicles directly. Implementation requires ANPR or GPS tech, optimal non-discriminatory fees, public awareness, and revenue ringfenced for transport. Pilot studies in Bengaluru and elsewhere show receptivity if benefits like reduced travel time are clear. Challenges include infrastructure costs, public buy-in, and taxi driver burdens, but calculated plans could align with India's sustainability goals.

**Key points:**

- India's Bengaluru and Pune rank 2nd and 6th most congested globally, costing commuters 134 extra hours and 275 kg CO2 yearly in Pune alone.
- Congestion pricing charges peak-hour road use to reduce vehicles, as proven in London with 30% congestion and 15-20% CO2 cuts.
- Use ANPR/GPS for enforcement, set incentivizing fees, and reinvest revenue in public transport to build support.
- Conduct pilots and awareness campaigns to address privacy, equity, and compliance hurdles before scaling.

**By Ishieta Dhar**

* * *

The importance of time is not lost on us– whether it is the two minutes we fight for during examinations or the two minutes determining if we make it in the nick of time with that one meeting with our boss. Yet, somehow in our daily commutes we do not take losing 15 minutes in traffic on our way to or from home gravely. 

According to the [TOMTOM Traffic Index](https://www.tomtom.com/traffic-index/ranking/) ranking in 2022, two of India’s cities appear in the top 10 most congested cities in the world, Bengaluru ranking second and Pune at sixth, with Delhi at 34th and Mumbai at 47th global ranks. 

According to the Index, in Pune, 134 extra hours are spent driving in rush hours, about five days and 14 hours, with approximately 275 kg of C02 emissions yearly. Mumbai’s statistics are three days and 12 extra hours spent driving in rush hours with 272 kgs of C02 emissions. Contrarily, they are five days and 14 hours for Bengaluru and three days and 13 hours for Delhi, with almost 275 kg and 208 kg of CO2 emissions, respectively.

Time is not the only negative externality of congestion. Pollution is another grave externality. [As congestion increases, fuel consumption and CO2 emissions increase](https://www.accessmagazine.org/fall-2009/traffic-congestion-greenhouse-gases/#:~:text=If%20congestion%20reduces%20the%20average,will%20directly%20reduce%20CO2%20emissions). A [transportation study](https://reader.elsevier.com/reader/sd/pii/S2352146517305896?token=DD75C777B581BAFA86223EE75B65731BCFC8BB7637C8D70B81C39C1BDAF3054A7ABA4ADF99B2AC163D095B663C2E97FB&originRegion=eu-west-1&originCreation=20230102090433) conducted in Mumbai in 2014 had predefined routes highlighted that the additional time spent traveling during congestion periods can explain the increased CO2 emissions recorded in that period.

High levels of congestion naturally lead to higher levels of air pollution. A study in [The Economic Times](https://economictimes.indiatimes.com/news/politics-and-nation/majority-of-air-pollution-deaths-in-india-linked-to-diesel-vehicle-emissions-study/articleshow/68184315.cms?from=mdr) estimated around 3,85,000 deaths caused by exhaust emissions from diesel vehicles.  

A solution called “Congestion Pricing” or “Congestion Charging” can be implemented here. I was introduced to this concept on a recent trip to London, Britain, where it is implemented to reduce road congestion. Under congestion charging, vehicles entering a predetermined congestion charge zone have to pay for using those roads or driving in that area during particular hours of the day. An automatic number plate recognition system charges the fee. Signs are displayed informing drivers upon entering a congestion charge zone, along with the time slots for the fee. The driver can pay in advance or on the day of their trip. If paid later, there are specific [penalties applied over the basic fee](https://motorway.co.uk/sell-my-car/guides/london-congestion-charge).

A similar system is implemented on their trains. Commuters planned their travel considering the “peak” and “off-peak” ticket prices. Charges were applied for parking in Central London (with time restrictions and relaxations displayed on boards). People traveling to Central London even had to plan and reserve a parking spot occasionally. 

The concept of congestion pricing or charging is not new. It has been followed since[1975](https://www.outlookindia.com/website/story/congestion-tax-dear-mandarins-delhi-isnt-singapore-come-up-with-doable-idea/310363) in [Singapore](https://ops.fhwa.dot.gov/publications/fhwahop08047/02summ.htm#:~:text=Congestion%20pricing%20has%20been%20a,9%3A30%20in%20the%20morning.) and erratically since 1983 in [Hong Kong](https://theicct.org/sites/default/files/publications/congestion_apr10.pdf). Is it finally time for India to introduce something similar in its congested cities?

Business districts and bottlenecks of cities can implement it during their peak congestion hours on private vehicles. Boards can be displayed, informing drivers upon entering congestion zones, allowing them to divert and choose a different route or continue through the congestion zone. This could encourage commuters to use various public transport options or carpooling, reducing the number of private vehicles on the road.

While public policies have been [aimed at transportation](https://www.orfonline.org/research/policymaking-towards-green-mobility-in-india/#_edn4), such as National Urban Transport Policy, Atal Mission for Rejuvenation and Urban Transformation, Smart Cities Mission and National Transit Oriented Development Policy, none directly reduce congestion or limit the number of vehicles. They tackle the problem indirectly by having funds for improving public transport, building supporting transportation infrastructure, or revising urban planning, such as making smart cities. 

The debate of introducing congestion pricing in some Indian cities (Delhi, Mumbai and [Bengaluru](https://timesofindia.indiatimes.com/city/bengaluru/pay-a-toll-to-shop-on-brigade-road/articleshow/19372227.cms)) has been [on](https://www.orfonline.org/expert-speak/can-congestion-pricing-be-a-solution-to-mumbais-traffic-snarls-50124/#:~:text=It%20charges%20a%20flat%20fee,owners%2C%20residents%20and%20trade%20organisations.)[going](https://www.theguardian.com/world/2011/dec/08/delhi-congestion-charge-ease-gridlock) for many years. However, no concrete action has been taken in this direction. 

Two primary factors that should be considered for implementing congestion pricing are as follows: 

1.   Choosing the infrastructure via which congestion pricing would be executed and the subsequent infrastructure expenditure
    
2.  Determining the fee or “additional charge” and time slots 
    

London presently [uses](https://content.tfl.gov.uk/cc-cameras.pdf) an automatic number plate recognition (ANPR) system that reads a vehicle’s registration number, which is checked for congestion fees. If the fee is paid within time, the image captured by the ANPR is [deleted the same day or the following day](https://content.tfl.gov.uk/cc-cameras.pdf).  

 ANPR and other GPS-based technologies are being considered to [replace FASTags](https://www.cartoq.com/fastag-going-automatic-number-plate-recognition-anpr-coming-trials-begin-in-india/) in India. Either of these technologies could be used for the execution of congestion pricing. Furthermore, a user interface and redressal system would have to be established for drivers to track all the deductions or payments made and raise questions or grievances.

Devising the charge and time intervals is also a sensitive matter. It should be optimal enough to ensure that certain sections are not targeted (for instance, those residing in congested areas who cannot avoid these roads) and it is not taken casually and disregarded. Hence, the pricing should not be discriminatory but rather incentivizing. 

The biggest hurdle to implementing this concept is banking on the public’s support. Demonstrating how this additional fee would improve commuters’ quality of life is a tall order. Other concerns could involve the taxi/cab businesses. Not all drivers own the vehicle they use. Hence, if the congestion charge is to be levied by reading number plates, the burden of payment could be troublesome. Additionally, if GPS applications are used for congestion charging, ensuring that all drivers installed it and comply would be tricky. In this case, the privacy of the data collected of one’s location and whereabouts, would have to be maintained along with transparent communication of the terms of data treatment and management.

To attain the public’s trust and appeal, awareness campaigns and open public discussions could be organized to elucidate them regarding the process, its benefits, and how the charged money would be utilized.. For example, in [London](https://theicct.org/sites/default/files/publications/congestion_apr10.pdf), the net revenue from these charges must be used in the transportation sector.

A [University of Chicago](https://voxdev.org/topic/infrastructure-urbanisation/congestion-pricing-solve-traffic-jams-bangalore-not-so-fast) study in Bengaluru reported that people did not mind leaving even an hour early if it could save 15 minutes of commuting time. [Another study](https://www.sciencedirect.com/science/article/abs/pii/S0739885922000038) suggested that people are greatly receptive to congestion pricing when the perceived benefits included reduced travel time and increased public transportation satisfaction. That is, the accumulated money via congestion charging, when directed toward the city’s public transportation service, increased the commuters’ satisfaction. The government should focus on conducting pilot studies to chalk out the motivators and concern areas of the policy for its successful implementation.

London saw a [reduction of 30% in congestion](https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.20.4.157) and [15-20% in CO2](https://theicct.org/sites/default/files/publications/congestion_apr10.pdf) within two and five years, respectively, after introducing congestion pricing in 2003. The offset against carbon and nitrogen oxide will further aid India to achieve its Conference of Parties and Sustainable Development Goals.  

Is it finally time for India to put this concept into gear? The results can only be realized with a calculated plan and exhaustive research. 

Read more: [Exploring India’s Platform Economy](https://spontaneousorder.in/exploring-indias-platform-economy/)

* * *

**About Ishieta Dhar**

Ishieta Dhar after completing her B.Com (Hons) pursued M.A Economics from Amity University. She is interested in policy development. She is currently looking forward to pursuing a Masters in Public Policy while leaning towards economic and welfare policies. She likes learning about various disciplines and the possible impacts they could have on policies. In her free time she indulges in solving puzzles and practicing cardistry.

## Exploring India’s Platform Economy

Original: https://www.spontaneousorder.in/p/exploring-indias-platform-economy

Author: Spontaneous Order

Published: 2023-03-16T17:36:18.000Z

Topics: platform-economy, gig-workers, labor-rights, social-security

> Fairwork India Report shows that 11 platforms in India report about 30 lakh workers in 2021. The platform economy, described as the new-age workforce, holds immense potential. However, a grim reality hides beneath its glory. India’s leading think tank,

**Summary:**

India's platform economy, employing about 30 lakh workers across 11 platforms in 2021 per Fairwork India, promises flexibility, freedom, and job opportunities leveraging the demographic dividend of over 400 million millennials, as highlighted by NITI Aayog. Yet, platforms classify workers as 'independent contractors' rather than employees, denying them social security, collective bargaining, minimum wages, and protections against occupational risks like accidents and assaults. ILO surveys reveal skill mismatches, with 29% of freelancers overqualified for tasks, and only 11% of delivery executives valuing independence. Fairwork finds most full-time workers (48 hours/week) earn below local minimum wage, with no compensation for downtime and zero platforms recognizing worker associations. The author argues for classical-liberal aligned reforms: immediately declare platform workers under the Social Security Act 2008 for life/disability cover, health/maternity benefits, gratuity, and paid leaves; enforce rights against workplace violence via existing acts; and mandate accident insurance, inspired by Indonesia and the Code on Social Security 2020, in government-private partnerships. These steps would address precarity, enabling the 'new normal' of flexible work without undermining market potential.

**Key points:**

- Classify platform workers as 'workers' under the Social Security Act 2008 to grant parity with formal sector benefits like health, maternity, gratuity, and paid leaves.
- Implement redressal mechanisms and protections against occupational risks including road safety, theft, assault, and workplace violence under existing labor laws.
- Provide accident insurance for platform workers via digital platforms in collaboration with government and private sectors, as per the Code on Social Security 2020.
- Platforms misclassify workers as contractors, leading to below-minimum wages, no bargaining power, and skill underutilization despite employing 30 lakh in 2021.

**By Falguni Lalwani**

* * *

[Fairwork India Report](https://fair.work/wp-content/uploads/sites/17/2021/12/Fairwork-India-Report-2021-accessible.pdf) shows that 11 platforms in India report about 30 lakh workers in 2021. The *platform economy*, described as the new-age workforce, holds immense potential. However, a grim reality hides beneath its glory.

India’s leading think tank, NITI Aayog, describes the platform economy as a result of the Fourth Industrialization Revolution (i.e., gig economy) in its latest report, [“](https://www.niti.gov.in/sites/default/files/2022-06/25th_June_Final_Report_27062022.pdf)*[India’s Booming Gig and Platform Economy](https://www.niti.gov.in/sites/default/files/2022-06/25th_June_Final_Report_27062022.pdf)*[.](https://www.niti.gov.in/sites/default/files/2022-06/25th_June_Final_Report_27062022.pdf)” 

The definition of the *gig economy* remains ambiguous and can include various workers outside of a traditional worker’s definition. However, the platform economy’s definition is “[concretized”](https://www.niti.gov.in/sites/default/files/2022-06/25th_June_Final_Report_27062022.pdf) as it exclusively focuses on using online platforms such as Ola, Uber, Dunzo, Zomato, Swiggy, or Urban Company to connect with customers; their workers are called *platform workers*.

Independent work is not new, but its digital shift through *[platformization](https://www.google.com/search?q=platformization&oq=platformization&aqs=chrome..69i57j0i512l8j46i512.399j0j9&sourceid=chrome&ie=UTF-8)* is. The number of web-based platforms has risen by [three times](https://www.ips-journal.eu/work-and-digitalisation/changing-employment-in-the-age-of-labour-platforms-5116/) and the taxi and delivery platforms have increased nearly [tenfold](https://www.ilo.org/global/about-the-ilo/how-the-ilo-works/multilateral-system/brics/2021/WCMS_819793/lang--en/index.htm) globally. [The Economic Survey of 2020-21](https://economictimes.indiatimes.com/tech/technology/economic-survey-2020-21-indias-gig-economy-now-among-largest-in-the-world/articleshow/80586505.cms?from=mdr) echoes the same; India has emerged as one of the world’s largest countries for *[flexi-staffing](https://www.google.com/search?q=flexi-staffing&oq=flexi-staffing&aqs=chrome..69i57j0i30l8j0i15i30.1077j0j9&sourceid=chrome&ie=UTF-8)* (i.e., gig and platform work).

The rise of platformization has been described as the “new normal” of work defined along three Fs: the *future*, *flexibility*, and *freedom* of work.

**Nevertheless, what is its reality?**

The platform economy is characterized by low-entry barriers. Access to internet-enabled smartphones and a monetizable tangible (driving) or intangible skills (cooking or plumbing), and the flexibility to hold multiple jobs (as they can choose the place and time of work) is advantageous to those with disabilities or care responsibilities. 

From an employer’s perspective, they can hire workers for services not needed regularly, helping them control expenses and retain the best talent for their business needs. For instance, a new website requiring a one-time overhaul can hire workers only for that period rather than a full-time in-house writing team.

The platform economy has considerable potential to leverage India’s [demographic dividend](https://www.investopedia.com/terms/d/demographic-dividend.asp) of more than [400 million millennials](https://www.morganstanley.com/ideas/india-millennials-makeover-disruption-growth). While the platforms provide an immense opportunity for flexible work, they are fraught with anomalies.

The platforms classify workers as “[drivers/delivery partners,” “independent contractors,”](https://defindia.org/wp-content/uploads/2021/04/swiggy-zomato-delivery-workers-india-entrepreneurs-labour.pdf) and not “employees,” giving them an excuse not to provide their workers with social or income security. This leaves the workers in a precarious state with [no collective bargaining power.](https://www.ilo.org/global/topics/collective-bargaining-labour-relations/lang--en/index.htm) 

Further, [NITI Aayog reports](https://www.niti.gov.in/documents/reports) the rising platform economy as an opportunity for employment. However, the [International Labour Organization’s (ILO) surveys](https://www.ilo.org/wcmsp5/groups/public/---ed_emp/documents/publication/wcms_726816.pdf) suggest that the jobs created do not commensurate with people’s skills.As per [ILO’s surveys](https://www.ilo.org/wcmsp5/groups/public/---ed_emp/documents/publication/wcms_726816.pdf), platform workers reported “*that they have more skills as opposed to the demand for a task with a little difference by gender*.”  On freelance platforms, [29%](https://www.ilo.org/global/about-the-ilo/how-the-ilo-works/multilateral-system/brics/2021/WCMS_819793/lang--en/index.htm) responded that they have significantly more skills than the task demands. 

These platforms describe freedom and flexibility using phrases such as “be your boss” or “you choose when you deliver”. However,  [Independence in work](https://tiss.edu/uploads/files/Online_Food_Delivery_Platform.pdf) was mentioned only by [11%](https://tiss.edu/uploads/files/Online_Food_Delivery_Platform.pdf) of the delivery executives. 

Despite the rise of India’s vast platform economy, [not even a single platform](https://fair.work/wp-content/uploads/sites/17/2021/12/Fairwork-India-Report-2021-accessible.pdf) expressed willingness to recognize the association of the workers. This renders the workers in a precarious state as they do not have significant power to settle disputes and resolve their grievances, unlike employees who have rights in their employee agreements. They are entitled to leaves during their tenures, gratuity under the [Payment of Gratuity Act, 1972](https://clc.gov.in/clc/sites/default/files/PaymentofGratuityAct.pdf), and protection against [Sexual Harassment under Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013](https://legislative.gov.in/sites/default/files/A2013-14.pdf), among [others](https://www.roedl.com/insights/india-employees-benefits-labour-law).

The [report](https://fair.work/wp-content/uploads/sites/17/2021/12/Fairwork-India-Report-2021-accessible.pdf) further finds that most workers surveyed worked full-time on a single platform and earned less than the hourly local minimum wage despite working for 48 hours a week. Second, only [three out of the 12 platforms](https://fair.work/en/fw/publications/fairwork-india-ratings-2021-labour-standards-in-the-platform-economy/) in the study compensated their workers for the lost income during externalities. These included being unable to log into work, sickness, and other personal reasons. Hence, as the [report](https://fair.work/wp-content/uploads/sites/17/2021/12/Fairwork-India-Report-2021-accessible.pdf) aptly states, “*For the most part, platform work as a whole has remained largely invisible in the context of labor laws.*” 

**Salvaging the situation**

First, they must be declared “workers” under the [Social Security Act, 2008](https://legislative.gov.in/sites/default/files/A2008-33.pdf), with immediate effect, to bring them at parity with other formal sector workers. This will entitle them to [life and disability cover](https://legislative.gov.in/sites/default/files/A2008-33.pdf), [health and maternity benefits](https://legislative.gov.in/sites/default/files/A2008-33.pdf), [Gratuity under the Payment of Gratuity Act, 1972](https://clc.gov.in/clc/sites/default/files/PaymentofGratuityAct.pdf), and [paid leaves, among others.](https://legislative.gov.in/sites/default/files/A2008-33.pdf)

Second, workers should be protected by giving them their due rights against occupational risks such as safety concerns regarding road safety, theft, and physical assault. Thereby, [redressal mechanisms](https://assets.bii.co.uk/wp-content/uploads/2022/10/25124342/Platform-work-guidance_BII-and-SIFEM.pdf), [remedial provisions](https://www.financialexpress.com/opinion/protecting-platform-workers/2990913/), and provisions against criminal, service user, and workplace violence must be arranged for their safety. Furthermore, the worker-on-worker violence in the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, and the Industrial Employment (Standing Orders) Act, 1946, will favor and protect them at the workplace. They can take a legal route if their rights are violated at any point in their tenure, as “employees” in the formal sector can do.

Lastly, workers should be protected against occupational diseases and be offered work accident insurance. Corresponding with [Indonesia’s initiative](https://www.social-protection.org/gimi/gess/ShowWiki.action?wiki.wikiId=1296) to provide insurance and accident coverage to workers via digital ways, ride-hailing, e-commerce, and delivery, platforms may create and adopt a model that provides accident insurance to all the platform’s delivery and drivers. These may be provided in collaboration with the government and private sector, as proposed under the [Code on Social Security, 2020](https://labour.gov.in/sites/default/files/SS_Code_Gazette.pdf). Thus, the workers need not worry about contingencies of out-of-pocket expenditures. 

While the platform economy has immense potential for job creation, it is fraught with insecurity, including occupational risks and the lack of rights and grievance redressal systems. These must be addressed by the concerned authorities to create the “new age” workforce envisaged in the [NITI Aayog Report](https://www.niti.gov.in/documents/reports).

Read more: [The Need for Responsible Business Practices in the Technology Sector](https://spontaneousorder.in/the-need-for-responsible-business-practices-in-the-technology-sector/)

* * *

**About Falguni Lalwani**

Falguni Lalwani is currently pursuing a Triple Major in Economics, Media Studies, and Political Science from CHRIST (Deemed to be University). She is a bibliophile who reads various disciplines, from economics to technology. She has a keen interest in Political Economy and Public Policy and tries to analyze her surroundings through an interdisciplinary lens.

## The Need for Responsible Business Practices in the Technology Sector

Original: https://www.spontaneousorder.in/p/the-need-for-responsible-business-practices-in-the-technology-sector

Author: Spontaneous Order

Published: 2023-03-09T15:50:02.000Z

Topics: tech-layoffs, labor-laws, employee-reskilling, business-ethics

> The technology sector has recently seen an alarming rise in layoffs both in the United States and India. Companies such as Alphabet, Amazon, Microsoft, and Meta have let go of thousands of employees in response to growing economic uncertainties and a ne..

**Summary:**

The technology sector faces an alarming rise in layoffs amid economic pressures, with over 150,000 'tech startup' employees worldwide losing jobs in 2022 from 970 firms, mostly in the US due to funding shortages. In India, post-2021 FOMO-driven funding peaks, 67 startups including unicorns like BYJU’S laid off 20,484 employees by February 2023, hitting edtech hardest with 16 firms cutting over 8,000 jobs and five shutting down. From a classical-liberal policy lens, companies bear primary responsibility to balance economizing with ethical practices like retraining/reskilling displaced workers, providing adequate notice, severance, and support to build a resilient workforce. Existing laws such as India's Industrial Employment (Standing Orders) Act 1946 (30-60 days notice, severance) and US WARN Act (60 days notice) set benchmarks. Governments can incentivize via tax breaks, subsidies, or loans for training and retention, as seen in Europe, US states, Canada, Asia, and Latin America, without stifling innovation. Market regulators should enforce fair labor standards to protect rights, counter exploitation in lightly regulated tech, attract talent, and ensure profits align with employee well-being for a stable industry.

**Key points:**

- Over 150,000 global tech startup layoffs occurred in 2022, with 20,484 in India from 67 firms by February 2023.
- Companies must implement retraining programs and ethical layoff practices like notice periods and severance to mitigate impacts.
- Governments should offer tax incentives, subsidies, and loans to encourage employee training and retention.
- Market regulators need to enforce labor laws to protect workers and promote responsible business in tech.

**By Spontaneous Order**

* * *

The technology sector has recently seen an alarming rise in layoffs both in the United States and India. Companies such as Alphabet, Amazon, Microsoft, and Meta have let go of thousands of employees in response to growing economic uncertainties and a need to economize. The year 2022 saw over [150,000 “tech startup” employees](https://www.statista.com/topics/10370/tech-sector-layoffs/#topicOverview) worldwide lose their jobs, with over [970 firms](https://www.statista.com/topics/10370/tech-sector-layoffs/#topicOverview) making layoffs. Most of these layoffs occurred in the United States, where startups [struggled](https://www.statista.com/topics/10370/tech-sector-layoffs/#topicOverview) to secure funding amid high inflation, rising interest rates, slowing economic growth, and geopolitical tensions.

After the unprecedented [“FOMO-driven funding” of 2021,](https://inc42.com/features/indian-startup-layoffs-tracker/') startup valuations in India are at their peak, pressurizing startups to increase their runway and cut costs. This has led to [67 startups](https://inc42.com/features/indian-startup-layoffs-tracker/), including unicorns such as BYJU’S, Chargebee, and Ola, laying off [20,484 employees](https://inc42.com/features/indian-startup-layoffs-tracker/') as of February 2023. Edtech, consumer services, and e-commerce have seen the most layoffs, with 40 startups letting go of [16,792 employees](https://inc42.com/features/indian-startup-layoffs-tracker/). The Edtech sector is particularly under intense scrutiny, with [16 Edtech startups](https://inc42.com/features/indian-startup-layoffs-tracker/) (including four of the seven Edtech unicorns) laying off over 8,000 employees and [five startups shutting down](https://inc42.com/features/indian-startup-layoffs-tracker/).

From a policy standpoint, market regulators could play a role in setting ethical practices for mass layoffs and protecting employees’ rights. [The Ministry of Labour and Employment](https://en.wikipedia.org/wiki/Ministry_of_Labour_and_Employment_\(India\)) and the respective state labour departments are the Indian government bodies responsible for [implementing and enforcing labor laws and regulations.](https://labour.gov.in/) However, the companies are ultimately responsible for ensuring the fair treatment of their employees. Each company must balance its cost-cutting needs with the obligation to provide stability and security to its employees.

A possible solution to mitigate the impact of layoffs is for the companies to implement retraining and reskilling programs for employees who may be displaced by the changes in the industry. This would not only help employees maintain their livelihoods, but also contribute to a resilient and adaptable workforce. Another solution is to establish ethical practices for layoffs, such as providing adequate notice and support for affected employees and avoiding indiscriminate mass layoffs. 

Various countries have existing laws and guiding principles for layoffs and employee protection. In the United States, the [Worker Adjustment and Retraining Notification Act](https://en.wikipedia.org/wiki/Worker_Adjustment_and_Retraining_Notification_Act_of_1988) requires companies with more than 100 employees to provide [60 days’ notice](https://www.ecfr.gov/current/title-20/chapter-V/part-639) before a mass layoff or plant closure. The law aims to give employees and their families sufficient adjustment time to prospective employment loss, seek alternative jobs, and plan for the transition.

Similarly, the [Industrial Employment (Standing Orders) Act 1946 in India](https://clc.gov.in/clc/acts-rules/industrial-employment-standing-orders-act-1946) mandates employers to provide at least 30 days’ notice before laying off 50 or more workers, or at least 60 days before laying off 100 or more workers. [The act](https://legislative.gov.in/sites/default/files/A1946-20.pdf) stipulates that workers affected by layoffs receive severance pay and other benefits. 

Additionally, governments can incentivize companies to invest in employee training and development and prioritize their well-being by offering tax breaks or other benefits. Some examples of “other benefits” could include subsidies for employee training programs, grants for workplace wellness initiatives, or reduced tax rates for companies meeting specific criteria on employee retention and satisfaction. Additionally, governments may offer low-interest loans or other forms of financial assistance to companies investing in their employees. The specific benefits offered may vary by the country and region. For example, some [European countries](https://www.eib.org/en/stories/employer-provided-training) have mandatory training requirements and provide subsidies for employee training, while some [US states](https://www.apprenticeship.gov/investments-tax-credits-and-tuition-support/state-tax-credits-and-tuition-support) and [Canada](https://www.canada.ca/en/services/jobs/training.html) offer tax credits for investing in training and development programs. Some [Asian](https://www.ilo.org/jakarta/info/public/pr/WCMS_725535/lang--en/index.htm) countries have mandatory training programs and tax incentives. In [Latin America](https://www.imf.org/en/Publications/WP/Issues/2022/01/21/Tax-Policy-for-Inclusive-Growth-in-Latin-America-and-the-Caribbean-511829print-pdf.pdf), labor laws protect workers’ rights, and some [countries](https://www.cepal.org/en/publications/45204-tax-incentives-businesses-latin-america-and-caribbean-summary) offer tax incentives and subsidies for employee development. 

Many of these principles are applicable in the technology industry, with some unique challenges. For example, the industry is known for its fast-paced innovation and constant change, making it challenging to maintain job stability and keep up with new skills and technologies. Additionally, the industry attracts highly skilled workers who may be less likely to unionize or engage in collective bargaining.

The implications of these labor practices on overall employment and ease of doing business in the technology industry can be significant. For instance, companies prioritizing employee well-being and ethical business practices may attract and retain top talent, leading to a highly competitive and innovative industry. 

Contrarily, those prioritizing profits over labor standards may face negative public perception and difficulty recruiting and retaining employees.

Furthermore, market regulators play a crucial role in enforcing fair labor practices and protecting workers’ rights. However, the technology industry has historically been subject to less regulation than other industries, causing concerns about worker exploitation and unfair labor practices. Hence, some governments and organizations advocate for increased regulation of the technology industry to protect workers and hold businesses accountable for their actions.

  
In conclusion, the recent layoffs in the technology industry serve as a reminder of the importance of prioritizing responsible business practices. While profit is undoubtedly a crucial aspect of any business, it should not come at the expense of the well-being and livelihood of employees. As the industry continues to grow and evolve, companies must be mindful of the ethical implications of their decisions, particularly during periods of economic uncertainty. One way to ensure that companies are held accountable for fair labor practices is through market regulators that protect workers’ rights and ensure a level playing field for all. Additionally, companies should adhere to globally accepted principles, such as fair wages, safe and healthy working conditions, and the right to join a union and engage in collective bargaining. By striking a balance between profit and ethical business practices, companies can help create a stable and secure future for their employees and the technology industry as a whole.

Read more: [Sri Lankan Refugees: A Policy Concern for India](https://spontaneousorder.in/sri-lankan-refugees-a-policy-concern-for-india/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Sri Lankan Refugees: A Policy Concern for India

Original: https://www.spontaneousorder.in/p/sri-lankan-refugees-a-policy-concern-for-india

Author: Spontaneous Order

Published: 2023-03-03T10:50:59.000Z

Topics: sri-lankan-refugees, immigration-policy, refugee-integration, indian-foreign-policy

> “We are caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly, affects all indirectly.” Dr. Martin Luther King, Jr. (Letter From a Birmingham Jail, 1963) The consequences of any crisis are no

**Summary:**

Sri Lanka's 2022 crisis, marked by 90% inflation, shortages, and political upheaval including President Gotabaya Rajapaksa's resignation, has driven fresh waves of Tamil asylum seekers to India, particularly Tamil Nadu's Dhanushkodi beaches. India has hosted around three lakh Sri Lankan refugees since 1983, with 58,843 in 108 Tamil Nadu camps and 34,000 outside as of 2021, plus over two lakh total refugees. This influx strains local resources like water, food, housing, and healthcare, depresses informal sector wages through competition, and hinders social integration due to refugees' lack of belonging and vulnerability to exploitation. India's ad hoc refugee policy, absent codified law and non-signatory to the 1951 Refugee Convention or 1967 Protocol, relies on the Foreigners Act 1946 and Citizenship Act 1955, treating refugees as criminals liable to deportation and leading to inconsistent benefits across groups. From a classical-liberal viewpoint, this policy vacuum fosters inefficiency and marginalization; refugees could contribute productively if granted opportunities for livelihoods and socioeconomic inclusion, supported by international responsibility-sharing, rather than remaining a burden amid government neglect.

**Key points:**

- India hosts 58,843 Sri Lankan Tamils in 108 Tamil Nadu camps and 34,000 outside, straining local resources and labor markets.
- Ad hoc policies under Foreigners Act 1946 criminalize refugees, causing inconsistent treatment and blocking integration.
- Only 3,800 of 58,000 refugees wish to repatriate amid Sri Lanka's ongoing instability.
- Tamil Nadu provides humanitarian aid including 7,469 new houses at Rs 231.54 crore, but lacks national refugee law.
- Refugees can become productive if given livelihood opportunities and international solidarity, avoiding unmitigated burdens.

**By Nadia Samad**

* * *

*“We are caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly, affects all indirectly.”*

*Dr. Martin Luther King, Jr. (Letter From a Birmingham Jail, 1963)*

The consequences of any crisis are not limited to geographical territories but extend outside the national periphery. 

The Ministry of Home Affairs’ 2021-2022 Annual Report states that about [three lakh](https://www.mha.gov.in/sites/default/files/AnnualReport202122_24112022%5B1%5D.pdf) Sri Lankan refugees entered India between July 1983 and August 2012 and were provided relief, including shelter, subsidized ration, educational assistance, medical care, and cash allowances. 

While Sri Lanka’s streets chanted “Gota Go Home,”  its echoes were heard in India. The 2022 Sri Lankan political crisis, due to years of mismanagement, corruption, short-sighted policymaking, and agricultural policies, caused severe inflation, daily blackouts, and shortages of necessities for all. [President Gotabaya Rajapaksa resigned](https://www.livemint.com/news/world/ranil-wickremesinghe-resigns-as-prime-minister-of-sri-lanka-11657372907589.html) in July, preparing for better governance or stepping back in a critical time. The crisis had reached a crescendo with high inflation rates when it became difficult to even purchase staple food and fuel for common people, compelling them to rampage on the streets in anguish. The crises undermined the country’s ability to maintain a stable economy, with [](https://www.wsws.org/en/articles/2022/08/19/tjsp-a19.html)the [inflation rate soaring to 90 percent](https://www.wsws.org/en/articles/2022/08/19/tjsp-a19.html).

This article sheds light on the peripheral existence of a community often ignored in the silhouette of economic, political, or social outbreaks.

India officially hosted more than [two lakh](https://www.macrotrends.net/countries/IND/india/refugee-statistics) refugees and asylum seekers. Such a scenario challenges the Indian government regarding the management of their livelihoods, social integration, and economic turmoil, among others. 

Tamil Nadu has witnessed the impact of Sri Lanka’s unprecedented crisis in the form of asylum seekers. The legality of this cross-border movement takes a back seat when communities are desperate and ready to risk it all. Sri Lankan asylum seekers in the recent crises entered in batches, usually by boats, to [Serankottai beach in Dhanushkodi](https://www.thehindu.com/news/cities/Madurai/sri-lankan-refugee-reaches-dhanushkodi/article66531981.ece) to escape the exorbitantly high prices. The Tamil Nadu government ensured food grains, vegetables, and medicines as humanitarian aid alongside setting up [rehabilitation camps in the Dindigul district.](https://timesofindia.indiatimes.com/city/chennai/tamil-nadu-cm-stalin-opens-321-houses-in-sri-lankan-tamils-refugee-camp-near-dindigul/articleshow/94194923.cms) The government also decided to construct 7,469 houses in refugee camps at Rs 231.54 crore to ensure a safe and dignified life for the crisis-hit community. 

Since the 1960s, Sri Lankan refugees have taken shelter in Indian territory. The [Black July riots](https://pearlaction.org/black-july-a-tamil-genocide/) and Sri Lankan civilian war have caused the influx of thousands of asylum seekers. According to India’s Home Ministry, [58,843 Sri Lankan](https://www.mha.gov.in/MHA1/Par2017/pdfs/par2021-pdfs/rs-17032021/2443.pdf) Tamils were residing across 108 refugee camps in Tamil Nadu as of 2021. Besides, around 34,000 refugees were staying outside the camps, registered with the state authorities.

This flow of people from places of denial to the regions of guarantee poses vast economic, social, political, and environmental impacts on the host country. Right from arrival, refugees compete with local citizens for limited resources such as water, food, housing, and health-care services.

It is arduous to quantify the contribution toward social expenses and calculate the government’s available funds for refugees. Most forms of refugee impact are felt at the local level. Since refugees are desperate to earn a living, they are willing to work for lower pay hampering the informal sector’s overall payroll. Their entrance into the labor market generates a rivalry between them and local laborers. Contrarily, refugees are also susceptible to manipulation due to ignorance and constant fear in a distant country. 

The prospect of a swelling population of desperate people clinging to economic recovery in their homeland has its own risks. In their constant hope for improvement in the homeland, refugees do not feel a sense of belongingness towards the host nor an urge to invest in improving their livelihoods. In September, the Sri Lankan government appointed a committee to facilitate the repatriation of Sri Lankan refugees from India. However, only [3,800 out of 58,000](https://www.usnews.com/news/world/articles/2022-09-05/sri-lanka-appoints-committee-for-repatriation-of-refugees-from-india-statement#:~:text=The%20government%20said%20about%2058%2C000,ready%20to%20return%20at%20present.&text=Copyright%202022%20Thomson%20Reuters) wanted to return to the unpredictability. After witnessing acute shortages and long-term deprivation, debt sustainability and closing financing gaps are now elusive dreams.

From the very beginning, India has espoused an ad hoc approach to various refugee influxes. It is neither a party to the [1951 Convention on Refugees](https://www.unhcr.org/1951-refugee-convention.html) nor the [1967 Protocol](https://www.ohchr.org/en/instruments-mechanisms/instruments/protocol-relating-status-refugees). India does not have a codified law on the status of refugees posing issues, confusion, and massive exploitation. This government approach has resulted in the inconsistent treatment of different refugee groups. Some groups are granted a gamut of benefits, including legal residence and ability to be employed, whilst others are criminalized and denied access to basic social resources. For instance, while one government school may admit a child deemed a refugee by UNHCR, another may be within its rights to deny admission because he/she is an “illegal” resident.

The legal status of refugees in India is governed mainly by the [Foreigners Act 1946](https://legislative.gov.in/sites/default/files/A1946-31.pdf) and [Citizenship Act 1955](https://egazette.nic.in/WriteReadData/1955/E-2210-1955-0023-101599.pdf). These Acts do not differentiate refugees fleeing persecution from other foreigners and apply to all non-citizens equally. Under the Acts, not having valid travel or residence documents is a criminal offense. These provisions render refugees liable to deportation and detention. India lacks a well-defined concept and concrete legislation on the subject of “Refugee” and has adopted international notions and definitions about the refugee issue. However, continuous changes in the international political state of affairs also affect India’s refugee discourse. Humanitarian migrants are often excluded from formal systems for socioeconomic inclusion and possibly socially marginalized because of denied access to government-issued documentation, affecting themselves and future generations.

While headlines are crowded with figurative analyses, each migrant refugee struggles to fill cultural gaps, find livelihoods, and be accepted and recognized. Refugees and asylum seekers exist in gray areas, ushered in failure to socially integrate into society while facing a constant “Us versus them” narrative. This predicament is linked to years of government neglect and a fundamental policy vacuum. Refugees need not be an unmitigated burden on the host countries, especially if they are provided opportunities to utilize their productive capacities, and if the international community wholeheartedly endorses them with the [principles of international solidarity, cooperation, and responsibility-sharing.](https://www.unhcr.org/excom/standcom/4de4f7959/role-host-countries-cost-impact-hosting-refugees.html)

Read more: [Tackling Shortages in Affordable Indian Urban Housing through Free Market Forces](https://spontaneousorder.in/tackling-shortages-in-affordable-indian-urban-housing-through-free-market-forces/)

* * *

**About Nadia Samad**

Nadia currently works with the Policy Training and Outreach department of Centre for Civil Society and contributes to bringing social change through Public Policy. A 2022 graduate from Sri Venkateswara College, she has got the opportunity to work with ONGC Ltd, Bajaj Finance and led various social entrepreneurial initiatives contributing to several underserved communities including refugees, disaster-hit communities, overlooked genders, and artisans.

## Tackling Shortages in Affordable Indian Urban Housing through Free Market Forces

Original: https://www.spontaneousorder.in/p/tackling-shortages-in-affordable-indian-urban-housing-through-free-market-forces

Author: Spontaneous Order

Published: 2023-02-24T11:21:09.000Z

Topics: urban-housing, affordable-housing, rent-control, fsi-regulation, building-permits

> India faces a pertinent and immediate problem of affordable urban housing shortage caused by various governmental interventions distorting the free market in housing. This hampers the provision of affordable housing to those who need it the most, the lo..

**Summary:**

India's urban housing shortage, affecting 19 million households amid 31.1% urbanization of its 1.21 billion population and projections of 50% urban by 2050, stems from government interventions distorting free markets, leaving lower- and middle-income groups in slums despite rising vacant houses. States like Tamil Nadu (48.4%), Kerala (47.7%), Maharashtra (45.2%), and Gujarat (42.6%) bear one-third of urban population stress. The author, from a classical-liberal viewpoint, advocates three market-oriented solutions: (1) Liberalize Floor Space Index (FSI) caps—Indian cities limit FSI to 1-5 versus Singapore's 25—to enable vertical growth, boost supply, lower prices, and counter Mumbai's redevelopment disincentives from past FSI reductions. (2) Rationalize rent control acts, which create shortages by capping rents below market levels, shifting demand to pricier segments and deterring maintenance; relax for new buildings while protecting against arbitrary evictions to spur investment and stabilize rents via market forces. (3) Streamline bureaucratic building permits through single-window clearance, penalize government delays under RERA, and leverage technology for transparency, reducing costs passed to consumers. These steps unleash free market dynamics to resolve the paradox of empty houses and shortages, prioritizing first principles over well-intentioned restrictions.

**Key points:**

- Liberalize FSI caps beyond current 1-5 limits to enable vertical urban growth, increase housing supply, and reduce prices for lower-income groups.
- Abolish or relax rent controls that cap rents below market rates, as they cause shortages, poor maintenance, and inflated non-controlled segment prices.
- Implement single-window clearances for building permits, penalize government delays, and use technology to cut bureaucratic hurdles and project costs.

**By Arindam Goswami**

* * *

India faces a pertinent and immediate problem of affordable urban housing shortage caused by various governmental interventions distorting the free market in housing. This hampers the provision of affordable housing to those who need it the most, the lower- and middle-income groups.

The article examines some perspectives on this problem and discusses three solutions.

Of India’s population of approximately 1.21 billion, [31.1%](https://censusindia.gov.in/census.website/data/census-tables) live in urban areas. [Fifty-three cities](https://censusindia.gov.in/census.website/data/census-tables) in India had a million-plus population. Over 50% of the country’s population is [projected](https://desapublications.un.org/file/615/download) to be urban by 2050.

However, because of the skewed and asymmetric urbanisation levels in India, Tamil Nadu (48.4%), Kerala (47.7%), Maharashtra (45.2%), and Gujarat (42.6%) together [account for](https://censusindia.gov.in/census.website/data/census-tables) one-third of the Indian urban population. Thus, a few megacities in India face higher stress from urbanisation than others.  For instance, about 19 million households grapple with a housing shortage in [urban India](http://mospi.nic.in/sites/default/files/Statistical_year_book_india_chapters/HOUSING%20-%20WRITEUP.pdf), among many other challenges accompanying urbanisation. 

The Indian housing problem in urban areas is, however, paradoxical. The stock of vacant houses is [increasing but not adding](https://csep.org/policy-brief/indias-housing-paradox-empty-houses-and-housing-shortages/) to the market’s housing supply. Prices of available housing increase because of low supply and high demand. Hence, houses available for sale tend to cater to high-income groups, further inflating the prices. The lower- and middle-income groups are left without an  option but to choose slums and congested housing.

Let us explore some of the causes and possible solutions.

**Solution 1: Liberalising Floor Space Index (FSI) Caps**

FSI prescribes the floor space ratio that can be built on a plot of land. When land is in shortage or land costs are high, FSI reduces the land cost per unit. Higher FSI enables a city to grow vertically and provide enough space for the burgeoning urban population. Caps on FSI were [premised on](https://www.idfcinstitute.org/knowledge/publications/op-eds/fix-the-issues-that-plague-the-indian-housing-market-opinion/) two fallacious concepts. First, restricting FSI will limit the number of people crammed into an area. Second, infrastructure creation has to precede an increase in FSI to prevent a collapse of urban services provisioning.

However, people migrate to cities for jobs without an assurance of decent housing. With increasing demand and low supply due to FSI caps, prices have skyrocketed, slums proliferated, and infrastructure has crumbled under high stress.

World’s leading cities have a much higher FSI than Indian cities. For example, Singapore allows an [FSI of 25](https://www.hindustantimes.com/analysis/fix-the-issues-that-plague-the-indian-housing-market-ht-analysis/story-EIIkHKBd3Wic1Lni3grrRM.html), whereas Indian cities have much lower FSIs, including [1, 1.1, and 5](https://www.thehindu.com/real-estate/tns-latest-fsi-guidelines/article25453685.ece) and impose [height restrictions](https://www.thehindu.com/real-estate/tns-latest-fsi-guidelines/article25453685.ece). These rules also necessitate acquiring large land parcels to build tall buildings. This further results in  a city’s horizontal growth, increasing infrastructure stress.

There is another aspect to this problem. Mumbai earlier had a [higher FSI](https://www.hindustantimes.com/mumbai/state-hikes-fsi-for-pre-1969-buildings-in-mumbai/story-egqUuM3oIibIQlUESzN58K.html), but later, caps were regressively placed on the FSI. Consequently, the older buildings, built under the higher FSI regime, are now in dilapidated conditions and urgently need redevelopment, but their owners do not have the right incentives to do so. If they are demolished, they will have to adhere to the current lower FSI rates.

Liberalising FSI caps will increase the housing supply within a given space, benefiting buyers and renters. High supply also brings down the prices, reducing the problems of urban sprawl, slums, and congested housing. City building is a dynamic process. Hence, cities must increase their infrastructure capacity to counter population growth.

**Solution 2: Rationalising Rent Control Acts**

Rent Control Acts place a rent ceiling and impose restrictions on evictions. Often the rent ceiling is below market prices, leading to an artificial housing shortage. Thus, rent control ironically creates a problem it was supposed to solve. 

While rent and tenancy control acts protect tenants against arbitrary rent increases and evictions, a rent ceiling below market prices causes people to move into congested housing or slums. Since lower rents lead to improper maintenance of houses, it further causes hazardous living conditions.

With the shortages in such rent-controlled segments, the excess demand shifts to the noncontrolled segment ([typically, new upper-bracket rental units or condominiums](https://www.econlib.org/library/Enc/RentControl.html)), which, however, has fewer houses (fearing that larger numbers might attract rent controls). High demand coupled with low supply causes price rises even in this segment, leading to a general shortage and price rise in rental housing.

Therefore, rent control has been relaxed over the years in cities like New York, especially for new buildings. Removing rent control while providing reasonable protection against arbitrary rent hikes and evictions increases the rental housing supply and incentivises landlords to maintain their rental units. This further attracts investments and stabilises the rents across the housing market. Thus, the invisible hand of the free market will create a spontaneous order out of chaos.

**Solution 3: Rationalise and Reduce the Bureaucratic Steps in Acquiring Building Permits and Approvals, and Fasten the Process**

Another problem engulfing the housing development industry is the time taken due to the bureaucratic hassles in acquiring building permits and approvals. Many states have diluted their RERA rules, thus defeating the entire purpose of strengthening the real estate sector. While the costs of acquiring permits may not be exorbitant, the delays by various government departments affect the entire project cost, including interest, opportunity, and redesign costs. Often the laws are confusing and disincentivise new entrants.

The builders, in turn, will have to pass on this increased cost to the consumers. Therefore, they cater to the high-income population who can afford high-priced accommodations, creating a shortage of affordable housing. 

Single window clearance with simple and easy processes is the solution. Take away control from the government departments and put the onus on the developers to adhere to the guidelines. While the [Real Estate Regulatory Authority (RERA) Act](https://legislative.gov.in/sites/default/files/A2016-16_0.pdf) penalises developers for delays in project deliveries, it does not hold government departments accountable for delays. They should have to bear penalties for undue delays. Technology can play a vital and enabling role in bringing transparency, neutrality and simplicity to this entire process.

The three solutions discussed in this article are not exhaustive. However, they are an attempt to allow free market forces to work their magic efficaciously. We have had too many restrictions for a long time, distorting the markets, even if our intentions were good. As is often said, the road to hell is paved with good intentions. We need to revisit our ideas and think from the first principles to ensure affordable housing does not remain a dream.

Read more: [A Critical Insight into the Right to Education Act](https://spontaneousorder.in/a-critical-insight-into-the-right-to-education-act/)

* * *

**About Arindam Goswami**

Arindam is a B.Tech., MBA, is a software professional with considerable experience in the fintech industry. He has a profound interest in public policy, political economy, economics, law and public administration.

## A Critical Insight into the Right to Education Act

Original: https://www.spontaneousorder.in/p/a-critical-insight-into-the-right-to-education-act

Author: Spontaneous Order

Published: 2023-02-09T14:36:21.000Z

Topics: rte-act, education-policy, private-schools, school-accountability

> The 86th Constitutional Amendment Act, 2002 introduced Article 21A, which provides ‘free and compulsory education to all children of the age of six to fourteen years in such manner as the State may, by law, determine’. Thereafter, the Parliament enact

**Summary:**

The Right to Education (RTE) Act, enacted in 2009 to implement Article 21A's mandate for free and compulsory education for children aged 6-14, imposes input-focused norms like infrastructure and pupil-teacher ratios that disproportionately penalize private schools—potentially leading to derecognition—while lacking clarity on applying them to government schools, undermining educational equality and disincentivizing private sector participation. This has caused closures of low-budget private schools offering affordable quality education, limiting options for underprivileged children and forcing reliance on underperforming government schools. The Act's neglect of learning outcomes, only partially addressed in 2017 amendments, contributes to over five crore elementary students lacking foundational literacy and numeracy (FLN), as per Draft NEP 2019. The 25% reservation in private unaided schools faces issues like discrimination, admission denials, and reimbursement delays from governments. Additional flaws include no accountability for teachers/administrators and top-down funding leaving School Management Committees (SMCs) with minimal control (e.g., 2% of SSA budget in 2012-13). From a classical-liberal perspective, the Act requires reforms prioritizing uniform accountability across schools, outcome orientation (e.g., Gujarat RTE Rules' weighted metrics), financial/academic decentralization (e.g., Delhi's Rs 5 lakh SMC fund), and stakeholder engagement to enhance competition, choice, and quality.

**Key points:**

- Apply RTE infrastructure norms uniformly to private and government schools to promote equality and private sector viability.
- Shift emphasis from inputs to learning outcomes, adopting models like Gujarat RTE Rules that weight outcomes at 70%.
- Streamline 25% reservation reimbursements via integrated public finance systems and enforce anti-discrimination measures.
- Mandate teacher and administrator accountability through professional regulatory bodies.
- Empower SMCs with financial autonomy, as in Delhi's model providing at least Rs 5 lakh per school shift annually.

**By Supriya Lakhtakia**

* * *

The 86th Constitutional Amendment Act, 2002 introduced Article 21A, which provides ‘*free and compulsory education to all children of the age of six to fourteen years in such manner as the State may, by law, determine*’. Thereafter, the Parliament enacted the [Right to Education (RTE) Act](https://legislative.gov.in/sites/default/files/A2009-35_0.pdf) in 2009 to implement this fundamental right. However, the mere existence of a law does not guarantee its effective implementation. The RTE Act continues to face many challenges, and this article discusses some of them.

First, the RTE Act enforces certain standards and norms for schools, including basic physical infrastructure like separate toilets for boys and girls, safe and adequate drinking water availability, and pupil-teacher ratio. Hence, a private school failing to fulfil these standards within the specified period will be derecognised and shut down (Section 18, 19). However, there is a [lack of clarity](https://www.education.gov.in/en/sites/upload_files/mhrd/files/upload_document/RTE_Section_wise_rationale_rev_0.pdf) in the Act about whether such a sanction would apply to government schools as well. If there is indeed a differentiation in the treatment of private and government schools upon non-performance, then such an approach goes against the principles of a sound public policy and educational equality. It also disincentivises private education sector, and [compromises the quality of public education](https://spontaneousorder.in/lopsided-justice-fate-of-low-budget-private-schools-under-rte/). A uniform and fair approach can be adopted by holding both institutions categorically accountable to these norms and standards.

A school is not merely responsible for providing adequate resources to students but also for channeling resources towards improving their learning and education levels. For instance, ensuring a minimum pupil-teacher ratio and adequate teaching equipment need not necessarily improve student performance unless utilised effectively. However, the norms and standards under the Act focus excessively on inputs such as physical infrastructure provisions without mentioning learning outcomes or teaching quality standards. Only through the [RTE (Amendment) Rules, 2017,](https://www.education.gov.in/en/sites/upload_files/mhrd/files/upload_document/RTE_Amendment_2017.pdf) was mapping of learning outcomes and preparation of corresponding guidelines made compulsory for all elementary classes. The Act’s lack of emphasis on learning outcomes may be one reason behind the substandard foundational literacy and numeracy (FLN) skills of many children. As per the [Draft National Education Policy 2019](https://www.education.gov.in/sites/upload_files/mhrd/files/Draft_NEP_2019_EN_Revised.pdf), over five crore elementary school students in India have not attained FLN. The primary causes highlighted in the draft include a lack of early childhood care and learning, reduced curricular focus on FLN, inadequate teacher capacity, insufficient teacher deployment, and poor health and nutrition of children. 

Many low-budget private schools providing effective and good quality education have [closed down](https://www.sundayguardianlive.com/news/11613-rte-leading-closure-low-budget-private-schools) owing to the Act’s high compliance costs (in the form of standards and norms which these schools cannot afford to implement due to their low fees). This may limit affordable quality education options for children from underprivileged backgrounds, compelling them to choose government schools or drop out altogether. Hence, the Act lacks foresight and consideration towards the varying financial capacities of schools. It penalises them for not meeting input norms while ignoring their contributions to students’ learning outcomes. The [Gujarat RTE Rules, 2012](https://righttoeducation.in/sites/default/files/Gujarat%20rte%20rules%202012.pdf#overlay-context=) provided a practical solution to this issue and can be used as a reference. It recognises schools by their input facilities (giving it a weightage of 15%), absolute student learning outcomes (30%), improvements in the outcomes from schools’ past performances (40%), and students’ non-academic outcomes (like co-curricular activities) and parent feedback (15%). 

The mandate in private unaided schools to reserve a minimum of twenty-five per cent of seats for children from disadvantaged groups is another issue in the Act (Section 12). Though a well-intentioned step towards inclusive classrooms and equitable education, the potential psychological impact on children from poor socio-economic backgrounds sitting in elite private schools was unanticipated. Furthermore, although the Act mandates the government and local authority to prevent discrimination against these children (Sections 8 and 9), [many reports](https://www.indiaspend.com/how-reservation-in-private-schools-isnt-working-for-poor-children/#:~:text=Social%20discrimination%2C%20illegal%20demands%20for,hobble%20the%20state%27s%20RTE%20system) indicate otherwise. Creating platforms for dialogue and interaction between parents and students from different backgrounds, cultivating empathy, enhancing teachers’ and school administrators’ capacities to support diversity, and community engagement to change mindsets are [ways](https://cprindia.org/wp-content/uploads/2021/12/State-of-the-Nation-RTE-Section121c_2015-Provisional.pdf) to make this provision effective.

Another concern associated with Section 12 is that sometimes parents of RTE students are pressured to pay tuition fees, and buy books, stationery, and uniforms from their own pockets. [Cases](https://mumbaimirror.indiatimes.com/mumbai/civic/andheri-school-denies-rte-admissions-bmc-intervenes/articleshow/78069734.cms) of private schools denying RTE admissions altogether have also surfaced. [Private schools argue](https://link.springer.com/article/10.1007/s12564-022-09815-z) that the government has failed to reimburse the costs incurred by them in educating poor disadvantaged children (as mandated in the Act). There appears to be a discrepancy in the timely and adequate flow of reimbursements from states to schools and centre to states. A [report](https://www.indusaction.org/wp-content/uploads/2019/10/BSR-2019.pdf) by Indus Action recommends integration of the RTE reimbursement process with the Public Finance Management System for real-time tracking of fund flow and fund utilization to address this issue.

Lack of accountability of teachers and school administrators is another unaddressed issue of the Act. Currently, [no regulatory body penalises teachers or school administrators for the non-performance](https://theleaflet.in/indias-right-to-education-is-a-failing-in-reality/) of their duties, adversely impacting the learning outcomes and hindering quality universal elementary education. Perhaps, mandatorily registering school teachers and administrators with professional regulatory bodies, similar to lawyers with bar councils, can ensure professional conduct and allow for punitive action against them at an individual level. Alternatively, perhaps the National Council for Teacher Education can be entrusted with this function of ensuring accountability of teachers.

The last issue concerns School Management Committees (SMC), which have elected representatives of the local authority, parents, and teachers to monitor the school’s working, utilisation of grants, and prepare the School Development Plan (Section 21). While this decentralised model of governance is appreciable, the flow of funds to the SMC largely follows a [top-down approach](http://img.asercentre.org/docs/Publications/ASER%20Reports/ASER_2013/ASER2013_report%20sections/yaminiaiyararticle.pdf). For instance, teacher recruitment and salary remuneration decisions lie with state administration. Contrastingly, key infrastructure development implementation decisions are taken by district administration based on the state government’s priorities. In [2012-13](http://img.asercentre.org/docs/Publications/ASER%20Reports/ASER_2013/ASER2013_report%20sections/yaminiaiyararticle.pdf), schools and SMCs controlled a mere two per cent of the total Sarva Shiksha Abhiyan budget leading to a mismatch between schools’ needs and actual expenditures. The [Delhi government](https://www.indiatoday.in/education-today/news/story/delhi-govt-to-give-rs-5-to-rs-7-lakh-to-each-govt-school-under-new-smc-fund-1359985-2018-10-10) took a positive step by creating an SMC Fund under which SMCs would receive at least five lakh per annum per shift, greatly empowering SMCs by providing them financial autonomy.

The RTE Act was a watershed moment for the Indian education system. Over the thirteen years of its existence, efforts have been made to improve its implementation through government guidelines and notifications, reports by various organisations, amendments of Rules, and states adopting innovative approaches. However, scope remains for improving the following within the law and its implementation process: (i) accountability (of schools, teachers, school administrators, and education department staff), (ii) decentralisation (of finances and academic and administrative decision-making), (iii) outcome orientation, and (iv) stakeholder and community engagement. These steps and better centre-state coordination and cooperation can strengthen this legislation and meet its intended objectives.

Read more: [Kalasa Banduri Nala Project’s Impact on Goa’s Ecology](https://spontaneousorder.in/kalasa-banduri-nala-projects-impact-on-goas-ecology/)

* * *

**About Supriya Lakhtakia**

Supriya is a young researcher with a bachelor's in computer science and master's in economics from BITS Pilani. As a policy enthusiast, she is interested in areas of gender, education and health. She has appeared for the civil services examination thrice. She enjoys bird-watching, reading and yoga.

## Kalasa Banduri Nala Project’s Impact on Goa’s Ecology

Original: https://www.spontaneousorder.in/p/kalasa-banduri-nala-projects-impact-on-goas-ecology

Author: Spontaneous Order

Published: 2023-02-01T14:56:40.000Z

Topics: inter-state-water-disputes, environmental-conservation, western-ghats-biodiversity, water-resource-management

> In present India, it is rare to witness two chief ministers from the same ruling party disagreeing over something, let alone wage war over an inter-state issue. However, the ongoing water crisis in Karnataka has propelled it to choke the lifeline of Goa..

**Summary:**

The Kalasa Banduri Nala Project, approved by the Central Government amid Karnataka's water crisis and election politics, allows Karnataka to divert 2.18 tmc from Bhandura dam and 1.72 tmc from Kalasa dam on the Mahadayi river, threatening Goa's ecology in the Western Ghats biodiversity hotspot. The Mahadayi Wildlife Sanctuary, a key tiger corridor with rare species like Royal Bengal Tigers, critically endangered Long-Billed Vultures, endemic frogs, endangered bats, and bioluminescent fungi, faces saltwater intrusion, reduced water levels, and habitat loss, potentially derailing its tiger reserve status. Goa invokes Gandhi's stewardship principle, arguing development cannot sacrifice fragile ecosystems for political gains, especially as the Gadgil Commission recommended banning inter-basin diversions. Legally, the Mahadayi Water Disputes Tribunal award is sub-judice in the Supreme Court, and Goa's Chief Wildlife Warden issued a stop-work notice under Section 29 of the Wildlife Protection Act, prohibiting diversions without state approval. From a classical-liberal lens, Karnataka should resolve its self-inflicted crisis—exacerbated by water-intensive crops like sugarcane and paddy, and corporate allocations like Pepsico's 4 lakh litres daily—through farmer incentives for low-water millets, efficient groundwater use, prioritizing citizens over multinationals, and tapping alternatives like Kali or Ghataprabha rivers. Without such reforms, Supreme Court intervention is essential to prevent biodiversity loss.

**Key points:**

- Karnataka's Kalasa Banduri Nala Project risks saltwater intrusion and habitat destruction in Goa's Mahadayi Wildlife Sanctuary, home to tigers, endangered birds, bats, and endemic species.
- Goa has legally challenged the project via Supreme Court appeals and a stop-work notice under Wildlife Protection Act Section 29, as the Tribunal award remains sub-judice.
- Karnataka should incentivize farmers to shift from water-guzzling sugarcane and paddy to millets, manage groundwater effectively, and prioritize drinking water for people over corporates like Pepsico.
- Alternative rivers like Kali, Bedti, and Ghataprabha can supply Karnataka's needs without diverting Mahadayi water.
- Supreme Court intervention is urged to protect Western Ghats ecology from political water wars.

**By Ushashi Datta**

* * *

In present India, it is rare to witness two chief ministers from the same ruling party disagreeing over something, let alone wage [war](https://www.hindustantimes.com/india-news/goa-will-fight-for-each-drop-of-mhadei-water-cm-pramod-sawant-over-row-with-karnataka-101672342273213.html) over an inter-state issue. However, the ongoing water crisis in Karnataka has propelled it to choke the lifeline of Goa – the Mahadayi river, through the [Kalasa Banduri Nala Project](https://www.downtoearth.org.in/blog/water/tale-of-transboundary-river-conflict-understanding-kalasa-banduri-dam-project-73203) (‘**the Project**’). 

Although the water-sharing dispute between Goa and Karnataka is about five decades old, the Central Government’s appeasement politics in poll-bound Karnataka have renewed hostilities. The approved Project will allow Karnataka to construct dams on the Mahadayi river, to divert water from Kalasa and Banduri canals to the Malaprabha river basin. The Project aims to improve water facilities for consumptive purposes in Belagavi, Bagalkot, Dharwad and Gadag districts in Karnataka. 

Consequently, Goa apprehends acute water deficit and ecological damage in its State. The transboundary riverine politics reminds one of Mahatma Gandhi’s words, ‘*the earth, the air, the land and the water are not an inheritance from our forefathers but on loan from our children…we have to hand over to them at least as it was handed over to us*’. These words make evident that while development is necessary, it cannot be at the cost of (vulnerable) ecological systems purely for political ambitions. 

The Mahadayi river runs about 11 km through the Mahadayi Wildlife Sanctuary in the Western Ghats–a [global biodiversity hotspot](https://www.thehindu.com/todays-paper/tp-in-school/the-western-ghats-biodiversity-hotspot/article14403413.ece1), making it an ecologically fragile zone. The Gadgil Commission referred to the Western Ghats as the ‘[Protector of the Indian Peninsula](https://indianexpress.com/article/cities/bangalore/ecologist-madhav-gadgil-calls-kasturirangan-panel-report-faulty-and-unscientific-7662823/)’, recommending a ban on inter-basin diversions of rivers for its [protection](https://www.cppr.in/wp-content/uploads/2013/03/Gadgil-report.pdf). Saltwater intrusion will be an immediate and palpable spillover effect of the diversion of the Mahadayi river. Aquifers will be highly saline if the sea’s salt water is not balanced by fresh water from the river. This will affect groundwater and potability, alter vegetation growth patterns along the riverbed, and ultimately affect wildlife species thriving in the Mahadayi basin. 

The biodiversity-rich region is India’s prominent tiger corridor and the world’s eighth-[finest tiger habitat](https://jalshakti-dowr.gov.in/sites/default/files/MWDT-Vol-2_0.pdf). It has been proposed to be developed into a tiger reserve on several occasions owing to the frequently spotted Royal Bengal Tigers. The sanctuary has several watering holes near the river bank. More water holes are [proposed](https://jalshakti-dowr.gov.in/sites/default/files/MWDT-Vol-5_0.pdf) to be built considering the increase in the spotting of tigers. Any depletion of the river’s water flow will reduce its level, consequently affecting the striped animal and [wildlife sanctuary](https://jalshakti-dowr.gov.in/sites/default/files/MWDT-Vol-5_0.pdf). Therefore, the Project’s long-term effect is the possible derailment of establishing a tiger reserve in the sanctuary. 

Besides the Royal Bengal Tiger, the sanctuary also cradles rare species of frogs, endemic to the Western Ghats, whose life cycles are impacted by the dam constructions and [reduced water levels](https://www.mdpi.com/1424-2818/6/3/567). The area is also ornithologically important and has been declared an [Important Bird and Biodiversity Area](https://portals.iucn.org/library/node/28011) for attracting species like the [Long-Billed Vulture (critically endangered) and the Malabar Pied Hornbill (near threatened)](https://timesofindia.indiatimes.com/city/goa/53-bird-species-found-breeding-in-mhadei/articleshow/6273485.cms). Wildlife conservationists have frequently spotted endangered species in the sanctuary, including the black panther, sloth bear, pangolin, jungle cat, dhole, mouse-deer, and slender loris. The Barapedi and the Krishnapur Caves in the Mahadayi Valley are the only places in the world home to [two endangered bat species](https://mohanpai.wordpress.com/tag/mahadayimandovi-river-valley-india-biodiversity/), Wroughton’s free-tailed bat and Theobald’s tomb bat! The existence of these species in Mahadayi is a splendid example of gene-pool conservation, an age-old traditional practice of [sacred grove](http://jalshakti-dowr.gov.in/sites/default/files/MWDT-Vol-5_0.pdf,%20page%20839) in India.

The forests of Mahadayi basin host diverse biota and sentries to Goa’s best-kept secret, a bioluminescent fungus called *[Mycena](https://www.conservationindia.org/gallery/bioluminescent-fungi-western-ghats-goa)*. Discovering such species could serve as natural wonders and be potential breakthroughs in environmental bioscience. However, when such ecologically rich systems are sacrificed at the altars of politics, biodiversity and conservation die slowly. Therefore, Goa’s apprehensions are certainly not misplaced given the multi-fold implications of diverting the Mahadayi river on Western Ghats’ diverse flora and fauna. 

The Mahadayi river [water allocation](https://egazette.nic.in/writeReadData/2020/216437.pdf) issue for dam construction can be traced back to the Mahadayi Interstate Water Disputes Tribunal. It permitted Karnataka to divert 2.18 tmc of Mahadayi water at the Bhandura dam and 1.72 tmc at the Kalasa dam. However, Goa, and the other two riverine states (Maharashtra and Karnataka) have [appealed against](https://indiankanoon.org/doc/144763079/) the Tribunal’s order before the Supreme Court, and the matter remains sub-judice. Meanwhile, Goa’s government is [holding talks](https://www.outlookindia.com/national/solution-to-mahadayi-water-issue-soon-union-minister-shekhawat-news-252975) with the Union Minister of Jal Shakti, hoping to get the permission for the Project’s construction revoked. Additionally, Goa’s [Chief Wildlife Warden](https://www.outlookindia.com/national/mahadayi-diversion-goa-wildlife-warden-issues-stop-work-notice-to-karnataka-govt-news-252431) has issued a stop work notice to the Karnataka government for violating [section 29 of the Wildlife Protection Act, 1972](https://indiankanoon.org/doc/942665/) (‘the Act’). 

Section 29 of the Act prohibits *inter-alia,* the diversion of water into or outside a sanctuary unless the Chief Wildlife Warden permits. However, such a permit is issued only after obtaining mandatory approval from the respective State Government. In other words, without Goa’s approval, Karnataka has no legal right to divert the Mahadayi river. Goa’s Chief Minister is keen to raise the issue for urgent [discussion](https://www.outlookindia.com/national/goa-cm-sawant-asks-state-leaders-to-exercise-restraint-while-speaking-on-mahadayi-river-diversion-news-252076) during the upcoming legislative session in Goa to place all facts on record, track the Goan government’s efforts to save the river and consider other remedies. 

There are a few potential alternatives for Karnataka to address its water scarcity without destroying Goa’s ecological balance. First, encourage and incentivise farmers in Karnataka, to grow alternatives to water-intensive crops. The increased cultivation of water-guzzler crops like sugarcane and paddy has [immensely pressurised the Malaprabha basin](https://indiatogether.org/tailend-environment). Most of the water from the Naviluteertha reservoir on the Malaprabha river is reportedly used to irrigate cash crops, despite being [earmarked](https://jalshakti-dowr.gov.in/sites/default/files/MWDT-Vol-2_0.pdf) for drinking water purposes. This situation is remediable, provided the State promotes and revives cultivation of crops like millets that demand little water and are suited to arid conditions.

Second, practising effective water resource management in Karnataka can [remedy the scarcity](https://www.navhindtimes.in/2016/06/07/goanews/goa-exposes-ktakas-water-resource-mismanagement/), without claiming water from the Mahadayi. Despite being blessed with an abundant groundwater supply, the State [fails to effectively manage and utilise it](https://jalshakti-dowr.gov.in/sites/default/files/MWDT-Vol-2_0.pdf). Karnataka must prioritise people’s needs instead of giant multinational companies while allocating drinking water. For instance, [Pepsico’s Dhaward unit](https://www.navhindtimes.in/2016/06/07/goanews/goa-exposes-ktakas-water-resource-mismanagement/) (in the water-scarce Hubli-Dharwad region) is reportedly supplied approximately four lakh litres of water daily from the Malaprabha Reservoir by the Karnataka Water Board. Furthermore, identifying alternative sources of water supply in Karnataka (such as the Kali, Bedti, and Ghataprabha) [can also meet the water supply needs of the Hubli-Dharwad region](https://jalshakti-dowr.gov.in/sites/default/files/MWDT-Vol-2_0.pdf), without causing ecological havoc in Goa. Prima facie, the Mahadayi river may not need to be diverted. The judicious use of the Malaprabha basin can significantly help Karnataka resolve its water crisis. 

Therefore, unless Karnataka finds ways to mitigate its self-engineered  water crisis, without sabotaging the Mahadayi, the inter-state river water dispute is unlikely to cease. Furthermore, if Goa’s concerns over the Project are not adequately addressed, the rich biodiversity of the Mahadayi Basin will become collateral damage in the water war between Goa and Karanataka. It seems unlikely that ecological concerns can dissuade political ambitions, therefore, the only remedy available to Goa now, is an immediate intervention by the Honourable Supreme Court. 

Read more: [Maharashtra Agricultural Land Leasing Bill: A Fair Chance for Farmers](https://spontaneousorder.in/maharashtra-agricultural-land-leasing-bill-a-fair-chance-for-farmers/)

* * *

**About Ushashi Datta**

Ushashi is a lawyer, an avid reader, and policy enthusiast. Her love for policy bloomed during her time as a LAMP Fellow. She is passionate about social justice and using her law degree to make a difference. When she is not reading or advocating for change, you can find her cooking experimentally or listening to true crime podcasts.

## Maharashtra Agricultural Land Leasing Bill: A Fair Chance for Farmers

Original: https://www.spontaneousorder.in/p/maharashtra-agricultural-land-leasing-bill-a-fair-chance-for-farmers

Author: Spontaneous Order

Published: 2023-01-31T17:55:45.000Z

Topics: land-leasing, agricultural-reform, property-rights, farm-credit

> As a farmer in rural Maharashtra, the thought of leaving your small plot of land behind to find work in the city may seem attractive. You could lease your land, collect some payment, and have the security of returning to farming if the city job doesn’t

**Summary:**

The Maharashtra Tenancy and Agricultural Lands Act, 1948, redistributed land to tenants on 'tillers day' April 1, 1957, but prohibited formal leases longer than eleven months, causing landlords to fear permanent loss of ownership and pushing leasing into informal arrangements. These informal deals breed disputes, financial losses, land grabbing, inadequate rents, poor tenancy rights, and block access to bank credit requiring legal contracts, resulting in lower crop yields and incomes. The 2017 Maharashtra Agricultural Land Leasing Bill, modeled on the national framework, legalizes leasing to other farmers, agri-businesses, and government for mutually agreed terms, with dispute resolution and compensation provisions. It passed both Maharashtra legislative houses and was sent to the President; clarifications were provided on 14.09.2020, but Union approval is stalled, citing no fixed timeline. From a classical-liberal view, enacting this bill would revolutionize the land market by enabling transparent, legally-binding contracts, tracking leased land, and fostering fair leasing/renting opportunities, positioning Maharashtra as India's land reform leader and boosting farmer livelihoods through secure property rights and market freedom.

**Key points:**

- MTAL 1948 bans leases over 11 months, forcing informal arrangements that cause disputes and block credit access.
- Informal leasing leads to land grabbing, unfair rents, and lower productivity due to investment hesitancy.
- 2017 Bill legalizes formal leasing with dispute resolution, passed state legislature but awaits President's approval since 2020.
- Enacting the bill would create transparent land markets, enabling farmers to lease/rent securely and improve incomes.

**By Arjun Krishnan**

* * *

As a farmer in rural Maharashtra, the thought of leaving your small plot of land behind to find work in the city may seem attractive. You could lease your land, collect some payment, and have the security of returning to farming if the city job doesn’t work out. But the Maharashtra Tenancy and Agricultural Lands Act, 1948,([MTAL](https://lj.maharashtra.gov.in/Site/Upload/Acts/The%20Maharashtra%20Tenancy%20and%20agricultural%20Lands%20act,%201948__Back20181029.pdf)) makes this dream a nightmare. The MTAL converted all tenants to landowners on “tillers day,” April 1, 1957. This was an attempt to redistribute land from landlords to tenant farmers. But this was not just a one-time redistribution, it also added a provision where landlords lose their ownership of land on new leases that lasts for more than eleven months. Landlords are constantly at risk of losing their land to tenants, so most prefer informal arrangements instead of formal contracts.

These informal markets create disputes and conflicts, leading to financial losses for both parties. As a lessor, you’re hesitant to enter into an informal agreement with a lessee because of the risk of losing your land or not being compensated fairly. And as a lessee, you’re hesitant to enter into an informal agreement because of little clarity around your rights and responsibilities. 

Furthermore, informal arrangements make it difficult for farmers to access credit. Banks and financial institutions may be willing to lend money only with a formal, legally-binding contract in place. This makes it challenging for farmers to invest in and improve their land or equipment, ultimately leading to lower crop yields and incomes. The lack of transparency in the land leasing market also leads to issues such as land grabbing, inadequate rents, and poor tenancy rights.

The [Maharashtra Agricultural Land Leasing Bill](https://prsindia.org/files/bills_acts/bills_states/maharashtra/2017/MH%20Bill%20No.%2031%20of%202017.pdf), introduced in 2017, could change this scenario. Based on the Model Agricultural Land Leasing Act, the bill aims to address some issues with the MTAL. The bill allows farmers to lease their land to other farmers, agri-business firms, and government agencies for a mutually agreed upon period of time. The bill also includes provisions for dispute resolution and compensation in case of disputes arising between the landowner and the lessee. However, the bill has not yet been passed into law. 

The bill passed both houses of the Maharashtra legislature and was sent to the President for approval. The Union government sought clarifications, which were provided by the Government of Maharashtra on 14.09.2020. However, the Union has not yet approved the bill claiming that “\[t\]he consultation process in such cases takes time. No time frame can be laid down for according such [approval](https://www.mha.gov.in/MHA1/Par2017/pdfs/par2021-pdfs/LS-16032021/3276.pdf).”

This bill has the potential to revolutionise the agricultural land market in Maharashtra by providing clear, legally-binding contracts and a better understanding of the rights and responsibilities of both parties. No other state in India has adopted the model Act, Maharashtra would lead the way in land reform by adopting this bill. With the adoption of this bill, leased land can be tracked and monitored, allowing for a fair and transparent market. Farmers in rural Maharashtra will finally have a fair chance to lease as well as rent land and improve their livelihoods.

Read more: [A Teary Tale of Onion Farmers](https://spontaneousorder.in/a-teary-tale-of-onion-farmers/)

* * *

**About Arjun Krishnan**

Arjun Krishnan is a political science graduate from Ashoka University and has a master's degree from Warwick University. Prior to joining CCS, he interned with the Cato Institue and the Institute of Economic Affairs. The ideal of freedom, both economic and social, are of great importance to him. He enjoys travelling, reading books, and listening to podcasts.

## A Teary Tale of Onion Farmers

Original: https://www.spontaneousorder.in/p/a-teary-tale-of-onion-farmers

Author: Spontaneous Order

Published: 2023-01-11T11:25:03.000Z

Topics: onion-farmers, export-bans, essential-commodities-act, agricultural-markets

> Onions are a vital crop for Indian farmers and consumers, but the government’s frequent changes in trading rules for onions have created instability in the market. This is due to the Essential Commodities Act (ECA) and the Foreign Trade (Development Reg

**Summary:**

Onions are vital for Indian farmers and consumers, yet government interventions under the Essential Commodities Act (ECA) and Foreign Trade (Development Regulation) Act (FTDR) create market instability through limits on warehousing—resulting in up to 40% stock losses from poor storage—and arbitrary export bans without justification when prices rise. Case studies from Nashik, Maharashtra, illustrate the harm: In Lasalgaon, once Asia's onion capital, sudden unannounced export bans caused distress and losses for farmers like Mukund Dnyaneshwar Holkar and traders like Om Chauthani, eroding market spirit. In Satana, farmer Mr. Wagh faced rising labor and transport costs, with onion prices dropping from INR 1300-1400 per quintal last year to INR 700-800 this year, squeezing profits despite APMC auctions. Conversely, Pimpalgaon Baswant APMC thrives with superior 100-acre facilities, lodges, and connectivity, attracting farmers from afar and offering a model of success through better infrastructure. From a classical-liberal viewpoint, ad hoc trade policies foster uncertainty and reduce farmer incomes; a stable, transparent export policy framework is essential to enable reliable markets and protect producers.

**Key points:**

- Government's ECA and FTDR powers lead to arbitrary onion export bans and warehousing limits, causing up to 40% stock losses.
- In Lasalgaon, sudden export bans inflicted losses on farmers and traders due to lack of communication.
- Satana farmers like Mr. Wagh saw prices fall from INR 1300-1400 to 700-800 per quintal amid rising cultivation costs.
- Pimpalgaon Baswant APMC succeeds with advanced infrastructure, serving as a model for other markets.
- Stable, transparent export policies are needed to end uncertainty and boost farmer incomes.

**By Arjun Krishnan**

* * *

Onions are a vital crop for Indian farmers and consumers, but the government’s frequent changes in trading rules for onions have created instability in the market. This is due to the Essential Commodities Act (ECA) and the Foreign Trade (Development Regulation) Act (FTDR) which give the government broad power to limit warehousing capacity and regulate the trade of commodities. As a result, investments in onion warehousing are poor, and up to [40% of the stock is lost due to poor storage conditions](https://icar.org.in/content/onion-cold-storage-potential-stabilize-price-fluctuation), hurting farmers and others in the supply chain. These regulations also enable the government to ban the trade of onions and other commodities with no justification or legal recourse, particularly when prices of onions rise. The following [case studies](https://ccs.in/sites/default/files/2022-11/ttof_final_5pm_26july_0.pdf) of onion farmers in the Nashik region of Maharashtra demonstrate these challenges. 

# Lasalgaon 

Lasalgaon, a small town in the Nashik district of Western Maharashtra, was once known as the Onion capital of Asia. The town has an Agricultural Produce Market Committee(APMC) dedicated solely to onion trade. However, recent export bans and market fluctuations caused distress among onion farmers and traders in Lasalgaon. Farmer Mukund Dnyaneshwar Holkar and trader Om Chauthani shared their experiences of the erratic nature of the export bans and lack of clear communication from the government. These sudden and unannounced bans led to losses for traders and farmers who were not able to export their produce. The situation in Lasalgaon caused a general sense of uncertainty and dwindling spirit in the once thriving onion market. The solution to this problem would be a transparent policy framework that protects farmers from future obstacles and provides clear guidelines on export regulations.

# Satana

Satana is a small town located 90 km northeast of Nashik city known for its busy APMC, which provides a marketplace for farmers in the area to sell their harvest. The Satana APMC Secretary, Mr. Tambe explained the process of trading at the APMC. This process involves auctioning of the produce, where the highest bid wins, and a trade receipt, called the Sauda Patti, is provided to the farmer. The produce is then inspected and weighed by an APMC-appointed weigher. The weight and rate are mentioned in the Kaata Patti, which is used to calculate the total fee, after deducting the trader’s costs and labour, and the farmer is paid in cash. 

Mr. Wagh, a farmer from the region, discussed what it was like to experience a slow market first-hand. The rising costs for onion cultivation were one of his top concerns. He said that labour costs had risen this year, and since onion is a labour-intensive crop, it has a significant impact on onion production costs. Mr. Wagh said that transport expenses have also increased because of fuel costs. He feels lucky to live 5 km away from the APMC and is empathetic towards farmers from villages as far as 25 km. These increased costs have further reduced his profits this year. A year ago, Mr. Wagh had sold his yield for around INR 1300-1400 per quintal. This year the rate has been INR 700- 800 per quintal. 

Satana plays an important role in the onion trade as it offers a localised marketplace for the farmers of the onion-growing belt and ensures the transaction. However, prices in Satana are lower compared to other markets. 

# Pimpalgaon Baswant

Pimpalgaon Baswant is a town located 30 km from Nashik, and unlike Lasalgaon and Satana, the farmers here are optimistic. The Pimpalgaon Baswant APMC is housed in a grand facility of 100 acres, complete with amenities like farmers’ lodges, merchant’s complex, water storage ponds, wastewater treatment plants, and sheds for afternoon onion auctions. Mr. Deepak Gawli, the head of the Onion and Tomato market at the Pimpalgaon Baswant APMC, explained that the market separated from the Lasalgaon APMC in 1995 and had grown significantly since then.

Farmers travel from many surrounding villages to sell their produce at Pimpalgaon APMC, as it offers better facilities and connectivity compared to other markets like Satana. Even though Pimpalgaon area is not ideal for onion cultivation, its location and good infrastructure attract farmers for trading. The success of Pimpalgaon Baswant could be a valuable example for other agricultural markets across India.

# Conclusion

Ad hoc trade policy decisions have created market uncertainty and reduced the incomes of onion farmers across the country. Adopting a stable export policy approach would be beneficial to the farmers. You can learn more about these case studies in detail [here](https://ccs.in/sites/default/files/2022-11/ttof_final_5pm_26july_0.pdf).

Read more: [The affordability of free electricity](https://spontaneousorder.in/the-affordability-of-free-electricity/)

* * *

**About Arjun Krishnan**

Arjun Krishnan is a political science graduate from Ashoka University and has a master's degree from Warwick University. Prior to joining CCS, he interned with the Cato Institue and the Institute of Economic Affairs. The ideal of freedom, both economic and social, are of great importance to him. He enjoys travelling, reading books, and listening to podcasts.

## The affordability of free electricity

Original: https://www.spontaneousorder.in/p/the-affordability-of-free-electricity

Author: Spontaneous Order

Published: 2023-01-10T14:50:14.000Z

Topics: public-choice-theory, electricity-subsidies, free-rider-problem, delhi-policy

> Defined as “Politics without Romance” by James Buchanan, the Public Choice Theory, attempts to apply economic methods to the tenets of political phenomenon in society. It believes in the overlap between political science and economic issues, which has

**Summary:**

Applying Public Choice Theory's assumptions of self-interested actors, limited knowledge, and economizing behavior, the post critiques Delhi's AAP government's universal free electricity scheme as politically motivated 'freebies' that create policy loopholes. The scheme offers up to 200 units free and 50% subsidy on 201-400 units to all households, regardless of income, leading to a 92.38% surge in subsidy expenditure from Rs 1,867.61 crore in 2015 to Rs 3,592.94 crore in 2020, while revenue surplus fell from seven crores to five crores. Over 80% of households benefit per a 2019 study, yet only 28% live in slums as genuine needy; high-income free-riders exacerbate overconsumption and budget strain, mirroring a Canadian study's 50% free-riding in energy subsidies. The October 2022 opt-in amendment resolves free-riding by making subsidies voluntary, incentivizing judicious use, though it introduces concentrated benefits for low-income groups financed by dispersed taxpayer costs—mitigated by Delhi's large middle/upper-class base (50% households) and strict tax collection. From a classical-liberal lens, incentives via opt-in streamline policy, making 'free' electricity affordable by curbing waste without subversive fiscal impacts.

**Key points:**

- Delhi's universal electricity subsidies fueled free-riding by high-income households, inflating costs 92.38% from 2015-2020.
- The October 2022 opt-in amendment eliminates free-riding by requiring voluntary application, promoting electricity conservation.
- Concentrated benefits for low-income users are financed through dispersed taxes on Delhi's 50% middle/upper-class households, minimizing opposition.
- Public Choice Theory reveals self-interested political incentives behind AAP's subsidies, resolved via targeted incentives.

**By Arshiya Khanna**

* * *

Defined as “Politics without Romance” by James Buchanan, the *[Public Choice Theory](https://www.econlib.org/library/Enc/PublicChoice.html)*[,](https://www.econlib.org/library/Enc/PublicChoice.html) attempts to apply economic methods to the tenets of political phenomenon in society.  It believes in the overlap between political science and economic issues, which has thus revolutionized the art of democratic decision-making. Public policy has always juggled these two disciplines, and their thorough knowledge is invaluable in tackling policy hiccups. The Public Choice Theory emphasizes the use of key economic tools to deal with traditional problems of political science. It takes into account the following pragmatic assumptions: 

● Government players are as “self-interested” as market players 

● People have limited knowledge and benevolence 

● People try to economize as much as possible 

Many policy loopholes largely abide by the rationale laid down by the Public Choice Theory. [Incentives](https://www.smartcapitalmind.com/what-is-an-incentive-policy.htm) are a suitable tool used to plug such loopholes. What makes a policy effective are the tangible benefits it provides to various stakeholders through incentives. Based upon assumptions made by the Public Choice Theory, policymakers find it easier to streamline relevant incentives to formulate an apt policy. Let us look at how this theory functions in reality.

The Aam Aadmi Party’s (AAP)  key polling tactic has been to provide free and subsidized services. These provisions have been the cornerstone of the party’s [manifesto](https://theprint.in/opinion/how-aap-govt-can-rationalise-free-electricity-reduce-subsidy-burden-and-keep-poll-promise/1134114/) since its conception in 2012 that they have honored, making amendments in October 2022. Let us first explore Delhi’s power subsidy scheme. 

The Delhi government provides subsidies on three key services: electricity, water, and bus rides for women*.* The [subsidy structure](https://theprint.in/opinion/how-aap-govt-can-rationalise-free-electricity-reduce-subsidy-burden-and-keep-poll-promise/1134114/) is given as follows for electricity: 

● Up to 200 units of electricity provided free of cost 

● 210 to 400 units of electricity subject to a 50% subsidy (up to Rs 800) 

● Households exceeding this quota of free electricity must pay the amount normally applicable 

Unlike most subsidy provisions that serve only a target audience, this scheme serves all Delhi residents regardless of their income level. It not only benefits those with a genuine lack of financial resources but also well-to-do households. The AAP government has been criticized for distributing “freebies” as electoral bait. These subsidies have massively impacted the state government’s budget, weighing it down with pending subsidy bills and unpaid power bills, increasing the overall electricity supply cost. The Delhi government’s expenditure on subsidies increased by a whopping [92.38 %](https://theprint.in/opinion/how-aap-govt-can-rationalise-free-electricity-reduce-subsidy-burden-and-keep-poll-promise/1134114/) between 2015 and 2020 from Rs 1,867.61 crore to Rs 3,592.94 crore. The revenue surplus has come down from approximately [seven crores](https://theprint.in/opinion/how-aap-govt-can-rationalise-free-electricity-reduce-subsidy-burden-and-keep-poll-promise/1134114/) in 2015 to five crores in 2020. 

Besides the heavy monetary consequences of a rather generous subsidy policy, another stone remains in the shoe: the free rider problem. *Free-Riding* is an economic concept of market failure that occurs when people benefit from goods or services they do not pay for. This heightens the risk of over-providing goods and services. Free-Riding is commonly witnessed with public goods as they provide non-excludable benefits (i.e., benefits applicable to everyone).

We can witness this issue starkly in Delhi’s free electricity provisions applicable to all societal levels. Hence, households with the adequate financial privilege to afford unsubsidized electricity can now free-ride on the state government’s financial resources. 

According to a [2019 study](https://cprindia.org/wp-content/uploads/2021/12/Mapping-Power-28-Jan-Final-1.pdf), over 80% of households benefit from the power subsidy scheme in Delhi. Furthermore, around [28%](https://asha-india.org/how-we-help/the-slums-of-delhi/#:~:text=Officially%2C%20there%20are%20about%20750,have%20more%20than%209%20members.) of Delhi’s population lives in slums and unwarranted colonies,  a genuine beneficiary of power subsidy schemes. Hence, a striking number of high-income households do not spend a rupee on electricity despite being able to afford it. Thus, high-income households free-ride upon subsidiary benefits. 

Let us look at a similar case study. A study published in the [Energy Journal (2016)](https://www.jstor.org/stable/44075502), analyzed the provision of subsidized energy in Canada and assessed the extent of free-rider rates involved within these subsidy schemes. The study drew the following conclusions: 

● Around 50% of total expenditures under the Canadian subsidy and tax credit programs showcased free-riding. 

● Over 80% of grant recipients were those who would have chosen an identical furnace at the time of replacement*.* 

● The grant regressively affected the income distribution because a substantial portion of the grants was received by middle- and high-income households 

● Hence, such grants are not optimal for improving residential energy efficiency. 

The consequences of the subsidy models of Canada and Delhi mirror each other. In May 2022, Arvind Kejriwal declared an [amendment](https://www.hindustantimes.com/cities/delhi-news/from-oct-1-power-subsidy-in-delhi-for-consumers-who-opt-in-cm-kejriwal-101651794167921.html) in power subsidy provisions making it applicable only to those who choose to opt into it. He addressed the liabilities of the free-rider phenomenon in a press briefing- 

“We get an appreciation for the Delhi government’s free electricity scheme from all sections of the society. But, over the years, people have suggested that instead of providing subsidies to financially strong households, the money be used for schools and hospitals. Considering their demand, all consumers will be given a choice to opt for the scheme from October 1. Based on their choice, we will provide free electricity to those families who wish to seek the benefit of the scheme.”

Hence, power subsidies have been rationalized since October 1, 2022, ensuring only those who voluntarily apply for the subsidy may receive its benefits. Karthik Ganesan, fellow, and director at the Council on Energy, Environment, and Water, [said](https://www.hindustantimes.com/cities/delhi-news/from-oct-1-power-subsidy-in-delhi-for-consumers-who-opt-in-cm-kejriwal-101651794167921.html), “This is a good first step to rationalize subsidy. It might require a little more than merely asking people to opt-in but put the onus on the consumer to establish the need for subsidy and then allow an opt-in.” As this is a quota-specific subsidy, it also incentivizes beneficiaries to use electricity judiciously to avoid exhausting their subsidized power quota.  This is a huge advantage as opposed to the lavish overconsumption of electricity by free-riders who could otherwise afford electricity at normal rates. 

With the policy’s shift on low-income groups, another policy loophole arises, the  “concentrated benefits and dispersed costs” issue. This issue arises when the benefits of a given policy are concentrated on a specific group, while the costs to finance these benefits are highly diffused/dispersed amongst many people. 

Likewise, in this case, low-income households are the targeted beneficiaries of electricity subsidies. These subsidies are largely financed by taxpayers’ money collected from all citizens residing in Delhi. As such resultant costs get diffused everywhere, the negligible increase in taxes hardly concerns well-off individuals. The worst-case scenario that results here is that there exists collective disapproval of hiked tax rates. However, because the hike is minor and evenly dispersed across a state’s populace, the affected taxpayers are not strongly incentivized to raise complaints against relevant authorities. Take a micro-scale example; if there is an increase in taxes by Re 1, whose proceeds go to the state government, the government consequently collects over one crore worth of additional revenue. Here, it is not worth complaining against the loss of an additional rupee although it is resented to some degree. 

The individual benefit earned trumps the individual cost imposed on every taxpayer. This idea can be a significant boon in Delhi’s subsidized power issue: 

1\. Delhi’s large population: 

The main source of financing power subsidies comes from taxes collected from the general public. Hence, the government needs to “disperse” electricity taxes to ensure a minor raise in taxes. About 50% of Delhi’s households fall in the middle and upper-class categories (i.e., monthly expenditure in the range of Rs 10,000 to Rs 50,000 and above). The costs of power subsidies can spread over half of the households of Delhi, which is a large populace. Such classes can conveniently handle a slight tax hike without  serious financial crunches. 

2\. Stringent Tax Collection: 

Spreading tax collection as much as possible can prove effective when tax collection norms are kept strict. Tax evasion is a rampant issue in India. It has deprived the government of a large amount of funds for financing essential public goods and services. Placing stringent checks to prevent tax evasion can expediently finance the government’s subsidy-induced expenses. 

The provision of subsidies holds the promise of re-election for a political player, the AAP, in Delhi’s case. It primarily benefits lower-income groups by lifting a large portion of monetary commitment off their shoulders. Although this subsidy comes at the cost of increased taxes derived from the general population, the effectiveness of dispersed costs and how they can be magnified is noteworthy.

The power subsidy provision in Delhi is galvanized by the AAP’s motive to gain political power. The provision’s enthusiasm was such that the affordability of providing free electricity weighed heavily on the state government’s budget. Hence, the question remained- is free electricity truly affordable?

After being subjected to intense scrutiny, power provisions were amended to become pragmatic and feasible for the state budget. Consequently, the free rider problem in Delhi stands resolved, without imposing financially subversive consequences on the general taxpayers’ bracket.

Read more: [Testing the waters of Financial Education in schools](https://spontaneousorder.in/testing-the-waters-of-financial-education-in-schools/)

* * *

**About Arshiya Khanna**

## Testing the Waters of Financial Education in Schools

Original: https://www.spontaneousorder.in/p/testing-the-waters-of-financial-education-in-schools

Author: Spontaneous Order

Published: 2023-01-06T13:08:14.000Z

Topics: financial-literacy, education-reform, school-curriculum, policy-pilot

> Coherent vision, reformed processes, and accessible products in financial education will create money-smart individuals. Financial literacy must rank at the top among the many critical skills fundamental for a fulfilling life but still largely outside t..

**Summary:**

Financial literacy is essential for a fulfilling life but absent from India's education system, with only 27% of adults literate per NCFE survey, often relying on informal, misleading sources. A DDIP pilot in 14 Tamil Nadu government schools trained 30 teachers via NCFE to teach 840 students basics like banking, budgeting, compounding (using RBI comics), and practical case studies over three weeks, receiving positive response. Challenges include English/Hindi-only materials (except SEBI Tamil modules), incomplete activity solutions, neglect of primary ages despite evidence of habits forming by age seven, and demand-driven model favoring private over government schools. For nationwide rollout, adopt coherent, science-based vision per Heckman curve targeting primaries like Australia from age five, integrating into NEP. Reform processes to supply-by-default via states controlling 68.5% schools, emulating USA's 21 mandating states and India's state boards adopting RBI program. Improve NCFE products: all languages, solutions, culturally tailored via SCERT (e.g., Tamil film rhymes). This creates money-smart individuals harnessing fintech, curbing ills like online gambling and domestic violence.

**Key points:**

- Institutionalize financial education in schools to address 27% adult literacy rate and informal learning pitfalls.
- Pilot in 14 Tamil Nadu government schools trained 30 teachers and reached 840 students but highlighted needs for regional languages, complete modules, and primary coverage.
- Adopt supply-by-default model led by states (68.5% of schools) for mandatory FE curriculum.
- Enhance NCFE products with multilingual, solved, culturally relevant materials via SCERT collaboration.
- Target primary ages per Heckman curve for highest human capital returns, as in Australia from age five.

**By T. Bhuvanesh Ram**

* * *

**Coherent vision, reformed processes, and accessible products in financial education will create money-smart individuals.**

Financial literacy must rank at the top among the many critical skills fundamental for a fulfilling life but still largely outside the ambit of our education system. More often than not, we learn concepts like saving, budgeting, and wealth creation through informal channels like our parents. Worse still, misinformation could turn young adults into financial profligates. A [National Centre for Financial Education](https://www.ncfe.org.in/images/pdfs/ExecSumm_.pdf) (NCFE) survey states that only 27% of adults in India are financially literate. Thus, the time has come to institutionalize financial education (FE) in our schools. 

Towards this end, under the [District Development Internship Program](https://cdn.s3waas.gov.in/s39431c87f273e507e6040fcb07dcb4509/uploads/2022/02/2022020155.pdf) (DDIP) of the Tiruvallur collectorate, Tamil Nadu, the internship team, guided by the Chief Educational Office, embarked on a pilot project to introduce FE in 14 government schools (one school per block). We partnered with NCFE, a government-backed entity, to train teachers who trained the children. The three-week campaign was undertaken in two phases. The first phase involved training the school teachers by NCFE-empanelled experts and the second phase, where teachers transmit their knowledge to students, was further divided into theory and practical sessions.

[

![](https://substackcdn.com/image/fetch/$s_!mPQG!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F61c48124-7c83-4df1-a441-c6f0cf072f71_428x363.png)



](https://substackcdn.com/image/fetch/$s_!mPQG!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F61c48124-7c83-4df1-a441-c6f0cf072f71_428x363.png)

*Novel teaching methods being deployed in a theory session*

While the theory sessions introduced the basics of banking, budgeting, insurance, power of compounding etc. using [comics](https://www.rbi.org.in/commonman/Tamil/scripts/basicbanking.aspx) created by the Reserve Bank of India, the practical sessions prodded the students to apply the concepts in case studies, like budgeting for an upcoming family tour.

The children received the one-off campaign well and were excited to perform activities that mirrored real-life demands, like managing their monthly family budget. At the end of three weeks, about 30 teachers and 840 students were exposed to information that would help improve their money management. 

[

![D:\\TRL INTERNSHIP\\FE\\Week 2\\412f863f-814d-4fa2-8dc7-e03776d4bfb9.jpg](https://substackcdn.com/image/fetch/$s_!ATyz!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa21658b0-9336-49d6-9346-694476967823_1038x630.jpeg "D:\TRL INTERNSHIP\FE\Week 2\412f863f-814d-4fa2-8dc7-e03776d4bfb9.jpg")



](https://substackcdn.com/image/fetch/$s_!ATyz!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa21658b0-9336-49d6-9346-694476967823_1038x630.jpeg)

*Learning to prioritize between needs and wants*

What merits our attention, however, are the multiple challenges during the implementation, which provide insights for a potential nationwide rollout of FE.

First, not all resources are available in the regional languages. The workbooks designed by NCFE for classes VI to X and its flagship National Financial Literacy Assessment Test (NFLAT) are available only in English and Hindi, limiting the scope of the geography of implementation. For the DDIP campaign, [Securities and Exchange Board of India](https://investor.sebi.gov.in/fem-ver-lan/fevernacular.html)’s modules in Tamil proved useful.  Second, most of these activity-based modules are incomplete, as they do not come with a solution handbook. This seemingly minor lapse made it hard for the teachers to familiarize themselves with a topic outside their expertise. Third, despite [evidence](https://kidwealth.com/wp-content/uploads/the-money-advice-service-habit-formation-and-learning-in-young-children-may2013.pdf) that monetary behavior is established by the age of seven, NCFE has *de facto* disregarded this age cohort (primary school children). Fourth, currently, FE is the preserve of those who are aware enough to ask for it. This demand-driven model has led to private schools constituting a major chunk of NCFE’s customers, leaving behind government school children. 

For a financially aware and empowered India, we must revisit the vision, processes, and products currently guiding the financial education ecosystem.

-   Vision:  
    
    -   While the [National Strategy for Financial Education](https://ncfe.org.in/images/pdfs/reports/NSFE_20-25_ENG.pdf) 2020-25 includes young children in its target audience, the [National Education Policy](https://www.education.gov.in/sites/upload_files/mhrd/files/NEP_Final_English_0.pdf) 2020 makes only a passing mention of financial literacy under the “adult education” section, necessitating a coherent vision for FE. 
        
    -   Not only is there a need for coherence in the vision, but also it must be rooted in science. The Heckman curve illustrates that the earlier the investment in human capital development, the greater the returns. For instance[, Australia](https://www.oecd.org/daf/fin/financial-education/3%20DRAKE%20Robert%20-%20Presentation_v%205.pdf) has integrated FE with the school curriculum for children as young as five. Targeting the children of primary schools is thus of paramount importance.
        
-   Processes:
    
    -   We must pivot from a demand-driven delivery of financial education to a supply-by-default model.  Mainstreaming FE would not be possible without the states taking the lead, as they directly control [68.5%](https://www.education.gov.in/sites/upload_files/mhrd/files/statistics-new/udise_21_22.pdf) of all schools present in India.  In [the USA](https://www.forbes.com/advisor/personal-finance/states-mandating-personal-finance-in-school/), 21 states have legislated to teach FE in their schools mandatorily. A recent [positive development](https://indianexpress.com/article/education/state-boards-to-adopt-rbis-financial-literacy-programme-for-schools-official-8268112/) is that all the state boards barring three, have agreed to work with the RBI to integrate FE into their curriculum.
        
-   Products
    
    -   As the national lead agency, NCFE’s products will be more accessible if they are available in all official languages (along with solutions to problems) and are more culture-specific than they are currently. Greater collaboration between the State Council for Educational Research and Training (SCERTs) and NCFE can help curate customized content taking local financial narratives into account. For example, in Tamilnadu, the peppy lines  “*varavu ettanna selavu pathanna, adhigam rendanna kadaisiyil thundhanaa” (8 annas in, 10 annas out! Two in deficit leaves your life in doubt!)*  from the cult movie, *[Bama Vijayam](https://www.youtube.com/watch?v=SdvJMrsKd2E),* can be effectively used to illustrate that one must live within their means! 
        

Equipping our students with FE is extremely relevant in an era where India’s Fintech sector offers an array of innovative investment avenues. A financially literate society can also keep many social ills like [online gambling addiction](https://scroll.in/article/1039362/while-centre-drafts-a-law-tamil-nadu-has-banned-real-money-online-games-to-curb-gambling-addiction) and [domestic violence](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3809469) at bay. Coherent vision, reformed processes, and accessible products in FE will create money-smart individuals whose decisions will ultimately benefit the nation!

Read more: [Challenges for India’s G20 Presidency](https://spontaneousorder.in/challenges-for-indias-g20-presidency/)

* * *

**About T. Bhuvanesh Ram**

T. Bhuvanesh Ram, a student of physics by graduation, is a ‘cinephile’ whose interests include policymaking, Constitution, physical comedy, punching above his weight, and daydreaming. He has cleared the UPSC Civil Services examination 2019 and keeps himself busy catching up to his own rising expectations from life.

## Challenges for India’s G20 Presidency

Original: https://www.spontaneousorder.in/p/challenges-for-indias-g20-presidency

Author: Spontaneous Order

Published: 2023-01-03T19:29:04.000Z

Topics: g20-presidency, global-south, sustainable-development, food-security, global-security

> The official announcement for India’s G20 presidency reads, ‘India’s G20 Presidency will work to promote this universal sense of one-ness. Hence our theme – One Earth, One Family, One Future.’ The theme of one-ness and India’s stint to chair t

**Summary:**

India's G20 Presidency for 2023, themed 'One Earth, One Family, One Future,' arrives amid global challenges like post-pandemic recovery and the Ukraine-Russia war, offering a chance to amplify the Global South's voice in a forum representing over 80% of global GDP, 75% of trade, and 60% of population. The author outlines four key priorities: first, consulting Global South partners—inviting guests like Nigeria (India's top African trade partner), Oman (bilateral trade up 82% to $9.94 billion in 2021-22), and others—to ensure their representation, including engaging China, the second-largest economy. Second, promoting sustainable lifestyles via India's traditions, leveraging its third global ranking in renewable energy additions and initiatives like Mission LiFE (P3: Pro-Planet People). Third, depoliticizing global supplies of food, fertilizers, and medical products to avert humanitarian crises, building on India's vaccine and wheat diplomacy despite export ban criticisms. Fourth, fostering honest discussions on weapons of mass destruction, cybersecurity, AI, and terrorism to enhance global security. As part of the Troika, India must navigate geopolitical tensions, declining multilateral zeal, and scrutiny over ties like increased Russian exports, positioning itself as an emerging leader while balancing interests and intent.

**Key points:**

- India invites Global South guests like Nigeria and Oman to amplify underrepresented voices in G20 deliberations.
- India pushes sustainable lifestyles through Mission LiFE and invites organizations like the International Solar Alliance to advocate climate justice without burdening developing nations.
- India seeks to depoliticize food, fertilizer, and medical supplies to prevent geopolitical tensions from causing humanitarian crises.
- India aims to initiate honest conversations on mitigating WMD risks, cybersecurity, AI, and terrorism among G20 powers.

**By Anushka Das Sharma**

* * *

[The official announcement](https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1880141#:~:text=India's%20G20%20Presidency%20will%20work,One%20Family%2C%20One%20Future'.) for India’s G20 presidency reads, *‘India’s G20 Presidency will work to promote this universal sense of one-ness. Hence our theme – One Earth, One Family, One Future.’*

The theme of one-ness and India’s stint to chair the G20 cohort for 2022-23 could not have come at a more crucial stage in global relations than this. The post-pandemic hiccups and the Ukraine-Russia war cast a somewhat unruly shadow on Indonesia’s presidency. However, India will have to steer the conversation along its official theme through the approximately 200 meetings planned during its presidency.

[G20 countries comprise](https://www.india.gov.in/spotlight/group-twenty-g20#:~:text=The%20G20%20members%20represent%20around,thirds%20of%20the%20world%20population.&text=The%20G20%20Presidency%20steers%20the,Track%20and%20the%20Sherpa%20Track.) over 80% of the global GDP, 75% of international trade, and 60% of the world population. Since its inception, it has discussed multiple issues, including trade, climate change, sustainable development, energy, and the environment. The presidency is an opportunity for India to highlight the promising Global South and its rising stake in global affairs. It will also have to ensure cooperation amongst member participants from the Global South and other G20 participating countries.  

Concerns around the global economy, climate change mitigation, and sustainable development are no longer limited to developing countries or specific regions. These issues and their spill-over effects have been felt equally in developed economies. A [Financial Times report](https://www.ft.com/content/3dd140d2-a2a7-4882-b832-96950c3fb661) stated that the UK economy is now 0.2% smaller than in February 2020. [JP Morgan claims](https://www.businesstoday.in/latest/world/story/as-leaders-chill-in-davos-emerging-economies-going-downhill-fast-60115-2016-01-20) China’s central bank reserves declined more than $500 billion last year, increasing the stakes of developed economies in these gatherings.

While global deliberations require a multilateral approach, it is no secret that the zeal amongst [countries has declined](https://www.livemint.com/). 

With India being a part of ***‘The Troika’*** (comprising the previous, current, and incoming chair), let us understand [India’s approach](https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1880141) amidst the ongoing global chaos and how it can be a challenge to India’s G20 presidency:  

1.  *‘Our G20 priorities will be shaped in consultation with not just our G20 partners, but also our fellow-travellers in the global South, whose voice often goes unheard.’*
    

*Global South* broadly refers to Latin America, Asia, Africa, and Oceania. The countries of these regions faced historical neglect by the developed countries of North America and Europe. For instance, no African nation is part of the G20 cohort. However, the perception is seeing a significant shift with [groups such as](https://en.wikipedia.org/wiki/List_of_country_groupings) QUAD, BRICS, ASEAN, and I2U2, including the recently concluded [US-Africa Leaders’ Summit](https://www.state.gov/africasummit/) in Washington, DC.

India has invited Bangladesh, Egypt, Mauritius, Nigeria, Oman, Singapore, Spain, and UAE as guest countries, an impressive list representing the Global South. It is not simply an invitation to India’s prominent trade partners but will ensure a global shift to listen, deliberate, and discuss the potential future and collective growth of the Global South. For instance, Nigeria is India’s [largest trading partner](https://idsa.in/backgrounder/india%E2%80%93nigeria-relations-akumar-081021) in Africa, and bilateral trade between Oman and India [rose by 82%](https://www.thehindu.com/news/international/india-oman-to-hold-meeting-to-boost-eco-ties-on-wednesday/article65400669.ece) to $9.94 billion in 2021-22. Additionally, Oman is the only country in the Gulf region with which Indian defence services conduct regular bilateral exercises. Oman also provides critical operational support to Indian naval deployments in the Arabian sea for anti-piracy missions. Therefore it is an essential player in a sustainable security roadmap.

India is engaging as the ‘Voice of Global South’. The hope to commence ‘One Future’ will require involving big and small countries to ensure a seat on the decision-making table and appropriate representation of their action plan for the coming decades. That will also mean getting China, the world’s [second-largest economy](https://www.nasdaq.com/articles/the-5-largest-economies-in-the-world-and-their-growth-in-2020-2020-01-22), on board with its maiden plans.

2.  *‘For healing our planet, we will encourage sustainable and environment-friendly lifestyles based on India’s tradition of trusteeship towards nature.’*
    

With a growing energy demand from its fast-developing economy, [India ranked third](https://economictimes.indiatimes.com/industry/renewables/india-ranks-3rd-globally-for-total-renewable-additions-in-2021-report/articleshow/92246122.cms) in the Renewable Energy Country Attractive Index in 2021. The ranking is based on a country’s renewable energy investments and deployments. India is also the world’s third-largest energy-consuming country. India’s prime minister, Narendra Modi and UN Secretary-General Antonio Guterres also launched the [Mission Lifestyle For Environment initiative](https://www.thehindu.com/news/national/pm-modi-launch-mission-life-presence-u-n-secretary-general-antonio-guterres/article66035847.ece), an India-led global movement to *nudge individual and collective action to protect and preserve the environment* based on the P3 model of Pro-Planet People.

In its efforts to continue advocating for sustainable and environment-friendly development, India has invited International Solar Alliance, Coalition for Disaster Resilient Infrastructure, and Asian Development Bank as international guest organisations.

India will engage as a stern stakeholder in voicing the concerns of the developing nations. As the presiding chair, India will lead these conversations to deliberate on sustainable development solutions without expecting the developing countries to take on the environmental deterrents from developed economies. For instance, [COP27’s loss and damage fund](https://unfccc.int/news/cop27-reaches-breakthrough-agreement-on-new-loss-and-damage-fund-for-vulnerable-countries), the details of which are still awaited, is a step towards ensuring ‘climate justice’ for the developing countries.

3.  *‘For promoting harmony within the human family, we will seek to depoliticise the global supply of food, fertilizers and medical products so that geo-political tensions do not lead to humanitarian crises.’*
    

The Ukraine-Russia war has been a quintessence of the failure of the concerned stakeholders to unite themselves on the global food supply. It has also caused the age-old confrontation on the politicisation of food supply and essential commodities like vaccines and fertilisers.

India’s efforts through ‘vaccine (during the pandemic) and wheat diplomacy (post the Ukraine-Russia war)’ was [appreciated](https://www.orfonline.org/research/the-dynamics-of-vaccine-diplomacy-in-indias-neighbourhood/) by its immediate neighbours and the Caribbean. However, the ‘wheat diplomacy’ soon came under criticism during India’s wheat export ban amidst the soaring local food prices.

Russia’s temporary [suspension of the grain export deal](https://www.npr.org/2022/10/29/1132608672/russia-says-it-is-suspending-a-grain-export-deal-with-ukraine) politicisation in October 2022 risked an increase in the global hunger rate while directly [threatening 7.6 to 13.1 million people](https://www.nature.com/articles/s41562-022-01391-x). Amongst other direct implications, this trend will also curtail the minimal achievements made within Sustainable Development Goal 2 of Zero Hunger in the last decade.

India’s stance on the war has ruffled a few feathers in North America and Europe. However, its G20 presidency will ensure a fresh dialogue on separating geopolitical tensions from humanitarian crises without sharing an obligation to align with either side.

4.  *‘For imbuing hope in our future generations, we will encourage an honest conversation among the most powerful countries – on mitigating risks posed by weapons of mass destruction and enhancing global security.’*
    

G20 has lost its enigma over the years, given the simmering tensions between its member countries (West and Russia, US and China, India and China) and the need for further direction to their agenda. With its renewed position as a representative of the Global South, India will have an additional responsibility to synergise the forum with an intent that serves the global population.

Global security is evolving in its form and approach with cyber security, artificial intelligence, data breaches, and the like. It requires an evolved intent to tackle these issues. With India’s no-tolerance approach towards terrorism of all kinds, the conversation and discussions may create a difference in the global discourse and develop a much-needed stance against the proliferation of the same.

Global forums tend to astray in the charm and frenzy of their locations (Davos Summit) or the host country’s history (COP26 in Egypt), and India will be the same. With international attention on its internal and international policies, India is responsible for proving itself as the emerging leader in global affairs.

India’s G20 presidency will also trigger the much-anticipated debate of interest versus intent, given the imminent backlash amidst [increasing exports from Russia](https://www.thehindubusinessline.com/economy/oil-positions-russia-as-indias-fifth-largest-importer-but-exports-languish/article66116366.ece), while trying to balance the scales with the war running in its [tenth month.](https://www.aljazeera.com/news/2022/12/28/little-prospect-of-peace-as-ukraine-war-reaches-10-month-mark)

It is a proud moment for the country to chair the G20 cohort for 2023. Hence, while the country is preparing to tackle the apparent challenges and host international delegates, every move of the voice of the Global South will be under the watchful eye, and rightly so!

Read more: [The story told and made by Kantara](https://spontaneousorder.in/the-story-told-and-made-by-kantara/)

* * *

**About Anushka Das Sharma**

Anushka Das Sharma is an Associate, Policy Training and Outreach at Centre for Civil Society. Previously, she has worked in Advertising and holds a B.A. Mass Communication from Symbiosis Centre for Media & Communications, Pune. She has a keen interest in international relations, global policy, and history.

## The story told and made by Kantara

Original: https://www.spontaneousorder.in/p/the-story-told-and-made-by-kantara

Author: Spontaneous Order

Published: 2022-12-29T16:26:10.000Z

Topics: forest-rights, property-rights, tribal-lands, free-markets

> If you haven’t heard of the Kannada film Kantara, there is a good chance you are living under a rock. This film, made with a budget of just Rs 16 crores, became a huge pan-India success. Spoiler alert: You might want to watch the movie before reading th

**Summary:**

The Kannada film Kantara, made on a Rs 16 crore budget and grossing Rs 400 crore worldwide, narrates the story of a tribal community's conflicts with the state over forest rights, livelihoods, and land, while its pan-India success tells a story of free markets triumphing in 'New India'. The film critiques pre- and post-colonial forest legislations like the Indian Forest Act 1927 for excluding forest-dwelling tribals who have historically depended on these resources, questioning why it took until the 2006 Forest Rights Act to recognize their symbiotic relationship with forests. Scenes depict tribals asserting pre-state rights to forest produce and Podu lands, mirroring real conflicts like those in Telangana's Mahabubabad district. The plot evolves from state-tribal discord—over hunting, rituals, and alleged encroachments—to alliance, with police aiding tribals in claiming legal property rights against antagonists. From a classical-liberal lens, the film underscores property rights as a natural, universal human right essential to life and profession, enabling trust-building between state and society. When the state protects stakeholder sensibilities and individual rights via rule of law, divine intervention becomes unnecessary, fostering healthy democratic evolution. The film's merit-based success across India's diverse markets exemplifies equal opportunities for prosperity.

**Key points:**

- Kantara critiques state forest policies for excluding tribals with historical claims, advocating recognition of their rights predating government.
- The film portrays the state evolving from disruptor to protector of tribal property rights, building societal trust through rule of law.
- Property rights are fundamental natural rights enabling life, profession, and other freedoms, as per classical-liberal thought.
- Low-budget Kannada film's Rs 16 crore to Rs 400 crore pan-India success signals free markets rewarding merit in aspirational India.

**By Manasa Pidatala**

* * *

If you haven’t heard of the Kannada film Kantara, there is a good chance you are living under a rock. This film, made with a budget of just [Rs 16 crores](https://www.timesnownews.com/entertainment-news/kantara-box-office-collection-rishab-shetty-film-continues-to-roar-mints-rs-400-crore-worldwide-bollywood-news-entertainment-news-article-95686560), became a huge pan-India success. Spoiler alert: You might want to watch the movie before reading this article. This article speaks about two things; the story told in the film and the story made by the film.

Since the beginning of humankind, storytelling has been a significant part of civilization, manifested in captivating art forms like music, dance, and painting. Films reflect the evolution of storytelling and these art forms, while their stories reflect the progression of society. Kantara is a film that narrates the story of a tribal community weaved around their beliefs, rights, and conflicts with the state. While the main plot focuses on how their local deity protects them, the film also poses some interesting questions about the regular conflicts between tribal communities and the State. 

For instance, one scene towards the movie’s beginning shows the tribals carrying some vegetation when the forest officer stops them and asks for a permit to take the produce from a reserve forest. An argument ensues when the tribals claim they have a right to collect their forest produce and the forest officer threatens them with arrest. Then the protagonist of the movie says, “We have been living in this forest even before the government was here. Hence the state should ideally take permission from the tribals to operate in the forest”. This might not be a memorable scene, but it raises some interesting questions about the State’s initiatives in protecting the forests.  

When the State took upon itself the duty to protect forests through various [pre and post-colonial legislations](https://www.legalserviceindia.com/legal/article-7138-the-indian-forest-act-1927-an-overview.html), why did it exclude the humans living in the forests, dependent on them for their livelihood? Don’t the forest communities have a bigger stake in the protection of forests than the government-appointed officials? Why did it take till [2006](https://tribal.nic.in/FRA.aspx#:~:text=Thus%2C%20the%20Act%20empowers%20the,community%20of%20forest%20dwellers%20to) for the Indian government to recognize the symbiotic relationship between the tribals and the forests? 

The film also depicts similar conflicts related to wildlife hunting and local rituals. These scenes based on everyday real issues of livelihoods and land rights in the forests of India,  highlight the rising discord between the police and tribals, thus thickening the movie’s plot. The dispute reaches its crescendo when the government claims that the tribals had encroached on the forest area. Let us pause the movie for a while and get to reality. Telangana’s Mahabubabad district witnessed [constant tussles](https://www.deccanherald.com/national/south/podu-land-issue-award-winning-forest-officer-killed-in-tribals-attack-1164865.html) in recent years over Podu lands. While the tribals claim they hold a historical right to cultivate these lands, the government prevents such activities alleging the lands belong to the government. 

Let us resume the movie. In the pre-climax scene, the police officials and tribals who were at loggerheads till then realize they are all on the same side, protecting the forest lands from any damage or illegal encroachment. When the antagonist of the movie attempts to take away the property of the tribals, the police help them understand how they can claim legal rights over their land even if it is declared government property. 

The narrative on the right to property in India is often associated with the rich and powerful. But in any democracy, this right is quintessential to every citizen, rich or poor. It is a natural right of a human being, and is also part of [Universal Declaration of Human Rights](https://www.un.org/en/about-us/universal-declaration-of-human-rights#:~:text=Article%2017,arbitrarily%20deprived%20of%20his%20property.). As Nani Palkhivala, a jurist,  says, [the right to property is the handmaid to other fundamental right](https://www.libertarianism.org/publications/essays/constitution-common-man)s. If the tribals are not guaranteed right over their lands, their right to life and freedom of profession hang in the balance. The film makes a clever point associating the relationship of the tribal community with the state to the police safeguarding their right to property.

The movie ends with a mesmerising song set to the [Bhuta Kola](https://timesofindia.indiatimes.com/travel/things-to-do/kantaras-famous-buta-kola-and-other-majestic-ritual-dances-of-india/photostory/95577073.cms) dance ritual in the tribal village. It depicts the protagonist in the form of the local deity entrusting the responsibility of protecting the tribals and the forest. He then mysteriously disappears into the woods. This brilliant scene marks the heights of the art of storytelling. The film initially depicts the State as a disruptive force with low trust in society. Then it captures the transition of this State machinery, gaining the people’s trust by protecting their rights. This is how the State and society evolve in a healthy democracy. When the State formulates and implements legislation considering the sensibilities of the stakeholders, trust builds up in society. When solid institutions are built, individual rights are protected, and the rule of law exists, divine intervention is no longer needed to protect the people. The climax of the film drives home this point beautifully through the drama.

This movie is produced by the fourth biggest film industry in India. With all due respect to the lead characters, it does not have star actors or big budgets. But its spectacular success across the country narrates another story, the story of New India. A new idea triumphing over a seemingly ossified old idea signals free markets. We are an extensive, diverse and aspirational country. We are a huge market of producers and consumers of ideas with merit. When the best ideas succeed in the country, we all have equal opportunities to thrive and prosper in this world. On the one hand, the movie told a beautiful story about the transformation of the relationship between the State and society.  On the other hand, the movie made a story with its success, indicating a revolutionary change in the Indian markets.

Read more: [Understanding the Knowledge problem](https://spontaneousorder.in/understanding-the-knowledge-problem/)

* * *

**About Manasa Pidatala**

Manasa is a Senior Associate at the Centre for Civil Society. She speaks on Agricultural Policy challenges in India at our epolicy program.

##  Understanding the Knowledge Problem

Original: https://www.spontaneousorder.in/p/understanding-the-knowledge-problem

Author: Spontaneous Order

Published: 2022-12-28T08:29:10.000Z

Topics: knowledge-problem, hayek, austrian-economics, socialist-calculation-debate, central-planning

> F.A. Hayek is a renowned economist who won the Nobel Prize in Economic Sciences in 1974. He is also known for his works in other fields of social sciences. One of Hayek’s most popular works was his paper “The Use of Knowledge in Society” published i

**Summary:**

Hayek's 1945 paper 'The Use of Knowledge in Society,' published in The American Economic Review, articulates the 'knowledge problem': knowledge is dispersed, tacit, and context-specific, making central planning by a single authority impossible, as argued in the socialist calculation debate against Mises's focus on rational calculation via private property and prices. Hayek, Nobel laureate in 1974, emphasizes that while firms and individuals can plan decentrally using undistorted market prices as signals for scarcity and demand, central planners cannot aggregate this 'knowledge of time and place.' Critics like Hoppe and Rothbard, who prioritize private property over the knowledge issue, miss this distinction; firm planning succeeds within competitive markets where bad decisions lead to losses, unlike socialism. Prices enable entrepreneurs and consumers to act on localized information, irreplaceable by statistics, AI, or computers. The knowledge problem champions decentralized planning through individual liberty, rejecting central authority—even elected or intellectual—over individual capabilities, aligning with classical-liberal advocacy for free markets against socialist or interventionist overreach.

**Key points:**

- Central planners cannot access dispersed tacit knowledge required for efficient resource allocation, unlike decentralized market actors using price signals.
- Firms succeed in planning only within competitive markets with undistorted prices, facing profit-loss discipline absent in socialism.
- Hayek's knowledge problem prioritizes individual liberty and decentralized decision-making over Mises's calculation focus and critics' property-only emphasis.
- No tools like AI can replicate human contextual knowledge, affirming markets as spontaneous orders of human action.

**By Yash Dubey**

* * *

F.A. Hayek is a renowned economist who won the Nobel Prize in Economic Sciences in 1974. He is also known for his works in other fields of social sciences. One of Hayek’s most popular works was his paper “[The Use of Knowledge in Society](https://fee.org/articles/the-use-of-knowledge-in-society/)” published in the September 1945 issue of [The American Economic Review](https://www.aeaweb.org/journals/aer). Hayek, and his mentor and Austrian Economics colleague, Ludwig von Mises, were part of the “[Socialist Calculation Debate](https://www.libertarianism.org/topics/socialist-calculation-debate),” the economic debate between supporters of centrally planned socialism and free market-based capitalism. Both Austrian Economists debated in favour of free market capitalism and argued that the market system allocates resources more efficiently than central planners.  

According to Mises, [rational economic calculation](https://oll.libertyfund.org/page/mises-on-the-impossibility-of-economic-calculation-under-socialism) is essential to allocate scarce resources efficiently, and this requires private ownership of property and market prices. But Hayek believed that knowledge is dispersed among the people, and it is impossible for a single central planner or a small group of planners to acquire the knowledge required to allocate the limited resources adequately. However, years after the fall of Soviet Russia and the end of the Calculation debate, there are [differences](https://mises.org/library/hayek-and-mises-controversy-bridging-differences-0) between modern Hayekians and Misesians in this regard. Arguably, a crucial argument of Hayek is not only misunderstood by market opponents, but also by some supporters of the market mechanism.

Other scholars from the Austrian school of thought, like Hans-Herman Hoppe and Murray Rothbard, have disregarded “the knowledge problem.” They believe that the only requirement for a market system to operate is private property. Hoppe, a constant critic of Hayek, [commented](http://www.hanshoppe.com/wp-content/uploads/publications/hoppe_polish-interview.pdf) that the ‘fundamental error’ is “*If socialism’s central problem is the practical impossibility of concentrating decentralized knowledge in the mind of a single central planner, then it is difficult to explain why there are firms and why the owner of a firm does not face exactly the same problem as the central planner under socialism. The owner of a firm also cannot concentrate in his mind all of the decentralized knowledge of the particular circumstances of time and place of all of his employees. Nonetheless, the owner of the firm designs a central plan, and within the guidelines of this overall plan, the firm’s employees then use their own decentralized knowledge to implement and execute this plan. And yet: the owner of a firm does not face the problems of the socialist central planner!*”

However, Hayek, in his *Use of Knowledge* paper, argued that the problem doesn’t lie in planning *per se*, but *“whether planning is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals.”* While it is arguably impossible for one authority to collect and process all the knowledge required to make decisions, individuals, or smaller groups (families, communities, and even companies) can coordinate and make decisions for themselves. Per Hayek, as long as undistorted prices existed in the market, the prices act as a signal to communicate the required information for individuals to make decisions, whether on behalf of themselves or for a group. 

Rothbard [quoted](https://mises.org/library/end-socialism-and-calculation-debate-revisited-0) Joseph T. Salerno as having said that the price system is not, and [praxeologically](https://mises.org/library/praxeology-methodology-austrian-economics), cannot be, *“a mechanism for economizing and communicating the knowledge relevant to production plans.”* Though a price system is important for most Austrian and neo-classical economists, Rothbard saw prices less as signals to economic players and more as tools for economic calculation. 

However, Hayek described ‘tacit’ knowledge as knowledge that is difficult to express in words or numbers. It is a knowledge of a certain localized time, place, or personal context. According to Hayek, knowledge in an economy is transferred through the price mechanism. An increase or decrease in prices communicates to the buyer and seller about the availability and scarcity of a product. Prices are, therefore, crucial in the market system since they signal the market players to make decisions. Prices help an entrepreneur to decide if there is demand for a product or a service, and a consumer decide on their purchases and manage their budgets. 

The argument that large private firms like Walmart engage in planning, and hence the State should also be able to do it, aren’t just from the economic Left, but there are some free market believers as [well](https://mises.org/wire/classical-liberalism-will-never-satisfy-left). As explained earlier, this planning is only possible within a market system and when prices exist, without which, we will end up with the calculation problem [again](https://www.cato.org/commentary/no-walmart-not-evidence-centrally-planned-economies-work). Even in private firms, the owner isn’t capable of doing all the tasks. Various experts handle different departments with their skills. The owner may or may not have the expertise to make decisions about their firm.  If they make bad decisions, they lose money, but if they allocate resources efficiently, they profit.  

No statistical formulas, computer programs, or any other tools are capable of collecting the *tacit* knowledge that drives decision-making. Even if scientific knowledge and data are supplied to an Artificial Intelligence(AI) robot, it would still be unable to allocate resources efficiently. This is because the knowledge of time and place is available to a specific person at a specific time, place, and in a specific context. This shows that the working of the economy isn’t possible without human involvement. It is a result of human action, even when it is not planned by human design. 

Hayek’s knowledge problem is relevant till the existence of human resources. The price system working freely allows knowledge to flow in the economy. Contemporary experts like Israel Kirzner have built their work on [entrepreneurship theories](https://www.jstor.org/stable/2729693) on Hayek’s concept.

Each individual has different expertise and knowledge, and therefore, a system of decentralized planning is required rather than a collective one. A society can, therefore, not be run completely by a few individuals even if they are elected on the basis of majority public voting or even if they qualify to be called “intellectuals.” The argument of the ‘knowledge problem’ is not primarily about the difficulty in the calculation and allocation of scarce resources in a command and control socialist economy, as argued by Mises. The argument advocates the importance of individual capability, individual liberty, and rejecting intellectuals’ superiority complex. 

Read More: [Sex Work in India: A Bird’s Eye View](https://spontaneousorder.in/sex-work-in-india-a-birds-eye-view/)

* * *

**About Yash Dubey**

Yash Dubey is currently doing his masters in economics from Delhi School of Economics and did his Bachelor's from Galgotias University in India. He has a strong interest in Neoclassical and Austrian Economics. His blog site is Eco-Binge.com.

## Sex Work in India: A Bird’s Eye View

Original: https://www.spontaneousorder.in/p/sex-work-in-india-a-birds-eye-view

Author: Spontaneous Order

Published: 2022-12-21T13:48:31.000Z

Topics: sex-work, human-trafficking, public-choice-theory, policy-reform

> Conversations around sex workers in India have always been received with moral panic and prominent stigmas. They are looked at disdainfully, not considered a part of “civilized” society, with their existence confined to the red light areas. Prostituti

**Summary:**

Sex work in India, legalized by a Supreme Court judgment for equal protection and to curb police harassment, remains burdened by stigmas, flawed laws like the Immoral Traffic (Prevention) Act 1956, and policy gaps that criminalize shared housing as brothels, hindering normal lives. Root causes include trafficking, Devadasi practices, and poverty, trapping generations; of 20 million commercial sex workers, 16 million are trafficking victims, with three of every four girls entering hourly being coerced. Sex workers face healthcare denial—over two-thirds report judgmental treatment—and post-COVID debt ensnares 95% in Maharashtra. Critiquing the 2018 Trafficking Bill for conflating consensual work with trafficking without consultation, the author advocates a classical-liberal approach: apply Public Choice Theory to craft sensitive policies empowering marginalized sex workers via education, legal aid, healthcare access, and alternate livelihoods, distinguishing voluntary choice from exploitation. Networks like the National Network of Sex Workers (50,000 members) push for rights, urging social inclusion over moral panic to reduce state-people conflicts and prosecute true criminals.

**Key points:**

- India's 1956 Act criminalizes brothels, rendering shared homes by sex workers illegal and disrupting lives.
- Over two-thirds of sex workers experience healthcare stigma and denial in hospitals.
- 16 million of India's 20 million sex workers are trafficking victims, exacerbated by post-COVID debt affecting 95% in Maharashtra.
- Apply Public Choice Theory to design inclusive policies providing sex workers education, legal aid, and distinguishing consensual work from trafficking.
- Empower sex worker networks like NNSW to influence policy for welfare and social inclusion.

**By Ananya Sharma**

* * *

Conversations around sex workers in India have always been received with moral panic and prominent stigmas. [They](https://youtu.be/jj8SxLdk55E) are looked at disdainfully, not considered a part of “civilized” society, with their existence confined to the red light areas. Prostitution is now legalized in India— a [historical](https://www.cnbctv18.com/legal/sc-recognises-sex-work-as-a-profession-know-where-prostitution-is-legal-13636642.htm) judgment aiming for equal protection under the law and preventing harassment or coercion by uniformed officers during raids. Hence, it is essential to evaluate how policy-making and legal systems have assisted the community, or become an increased burden. 

The root causes of prostitution in India include human trafficking, religious practices like the Devadasi system, and abject poverty pressurizing women into the trade with no other avenues left. The sector is a vicious circle trapping even their children, who are [discriminated](https://www.youtube.com/watch?v=jj8SxLdk55E) against and denied equal educational and work opportunities owing to their background and residence. 

Sex work in India had not been explicitly illegal, despite being defined in the [Immoral Traffic (Prevention) Act 1956](https://www.indiacode.nic.in/handle/123456789/1661?view_type=search&sam_handle=123456789/1362) as an individual’s sexual exploitation for monetary or commercial purposes. Activities regarding sex work, such as owning a brothel, pimping, or living on a sex worker’s wages, had been criminal offenses. This was done to criminalize exploitative acts and punish organized crimes in the sector. However, social stigmas, the pendency of judicial cases, and loopholes in the act have relentlessly added to the plight of sex workers. [For instance](https://www.legalserviceindia.com/legal/article-7943-laws-pertaining-to-sex-workers-in-india-contemporary-loopholes-and-way-ahead.html), Section 3 of the 1956 act stated punishments for keeping, running, and managing a brothel. The act described a brothel as a premises “for the mutual gain of two or more prostitutes.” However, this rendered even houses shared by prostitutes illegal, presuming that the accommodation is solely being shared for monetary gains through sexual activity, like a brothel. It becomes challenging for sex workers to lead a normal life if their homes are labeled brothels and dismantled. 

Sex workers in India are a large community [most vulnerable](https://www.ijcmph.com/index.php/ijcmph/article/view/1106) to issues like sexually transmitted diseases or infections, unwanted pregnancies, violence from clients, and being devoid of facilities. They should be receiving adequate healthcare and sensitization and not be refused medical care by any institution. However, [studies](https://www.ijcmph.com/index.php/ijcmph/article/download/1106/989) have found that more than two-thirds of sex workers have had appaling experiences in hospitals or rehabilitation centers. These include being refused healthcare because of their profession, facing embarrassing questions, and being neglected, rebuked, or charged more than other patients. They also reported facing a judgemental or disapproving attitude from healthcare professionals upon determining their profession. These experiences are not specific to India and often deter sex workers from seeking healthcare. Furthermore, being HIV-positive further increases this stigma.

Therefore, despite substantial attempts, such as the [Trafficking of Persons (Prevention, Protection, and Rehabilitation) Bill, 2018](https://prsindia.org/billtrack/the-trafficking-of-persons-prevention-protection-and-rehabilitation-bill-2018), to reduce the community’s struggles and prosecute criminals, it received [backlash](https://theprint.in/india/governance/why-sex-workers-are-opposing-a-bill-that-aims-to-protect-them/166087/) from sex workers. They contest that the bill conflates consensual sex work with trafficking, making everyone involved in the profession a victim of trade or a criminal. It was [alleged](https://theprint.in/india/governance/why-sex-workers-are-opposing-a-bill-that-aims-to-protect-them/166087/) that no sex worker groups were consulted while drafting the legislation. The law’s 2021 [revised](https://www.iralr.in/post/the-draft-anti-trafficking-bill-does-it-address-indemnity-to-sex-workers-in-india) draft was welcomed by anti-trafficking activists, lawyers and researchers and aimed to prevent and counter trafficking while ensuring the care, protection, and rehabilitation of victims. It aims to respect their rights while creating a supportive legal, economic and social environment, ensuring offenders’ prosecution. We need a sensitive and inclusive approach to understand their needs and wants. Concepts like Public Choice Theory must be applied with good policy-making principles to empower this marginalized community having little to no access to education or legal aid. It is imperative that we evaluate and reduce areas of conflict between the state and its people. The Public Choice Theory can ensure that politicians and civil servants act, safeguarding people’s best interests through appropriate policies and welfare measures. 

Human Trafficking is a crime affecting multitudinous lives globally, robbing them of their rights. Every year, countless women and children are deceived, abducted, or sold for forced prostitution, to men that victimize them into the horrors of sexual exploitation. Of an estimated 20 million commercial prostitutes in India, 16 million women and girls are [sex trafficking](https://www.indiatimes.com/amp/explainers/news/human-trafficking-in-india-552763.html) victims. Out of every four girls in India that enter prostitution every hour, three are coerced. 

The COVID-19 pandemic rendered most sex workers riddled with financial problems, accepting clients and risking their lives to repay debts. [Over 95%](https://www.cnbctv18.com/views/post-pandemic-debt-bondage-sex-workers-need-urgent-govt-attention-8054091.htm) of sex workers from Maharashtra helplessly continue sex trade due to their debts. The lockdown resurfaced the ugly dynamics of red-light areas that force prostitutes to depend on pimps and brothels for basic amenities. 

 The discourse on sex work takes multiple standpoints, with many schools of thought regarding it an outcome of crime, systemic exploitation, and abuse of rights. With voluntary sex work becoming commonplace because of media platforms like [OnlyFans abroad](https://www.nytimes.com/2019/02/09/style/onlyfans-porn-stars.html), it is important to sensitize people and create avenues toward their social inclusion irrespective of circumstances. Organizations like Amnesty International have [worked](https://www.amnesty.org/en/latest/news/2016/05/amnesty-international-publishes-policy-and-research-on-protection-of-sex-workers-rights/) toward decriminalizing sex work in countries like Hong Kong, Norway, and Papua New Guinea and ensure protection from exploitation and violence through state obligation. In cities like [Hyderabad and Kolkata](https://theprint.in/india/governance/why-sex-workers-are-opposing-a-bill-that-aims-to-protect-them/166087/), sex workers are politically engaged and advocate for their community’s rights and welfare. The [National Network of Sex Workers](http://nnswindia.org/about-us.aspx) is a pan-India network of sex worker-led organizations and allies and has membership of 50,000 people. It mobilizes female, male, and transgender sex workers to function a pressure group influencing policy and working toward awareness and welfare of sex workers across states. Media portrayal also plays a significant role in shaping public opinion, especially in India. Movies like *Udta Punjab* or *Begum Jaan* paint the gritty realities of women exploited and pushed into the profession. Contrarily, instances from movies like *Dev D* are few and far between showcasing a voluntary sex worker aided by coworkers to complete her education and pursuing it after the age of consent. As we discover icons like Gangubai Kathiawadi, it is important to prioritize sex workers’ welfare by providing them and their children access to quality healthcare services, educational institutions, and alternate livelihoods. Despite the stigma around sex workers and their morals, the [pro-postitution feminists](http://www.inquiriesjournal.com/articles/28/a-feminists-argument-on-how-sex-work-can-benefit-women) and sex workers themselves hold the profession as a dignified lifestyle and choice. Society should not punish them for their historical lack of representation and instead reprimand the oppressive systems we enable. 

Read More: [Indian Education: Schools vs Schooling](https://spontaneousorder.in/indian-education-schools-versus-schooling/)

* * *

**About Ananya Sharma**

Ananya is a final year undergrad student at Maitreyi College, Delhi University. Being a student of political science, she is passionate about social issues such as gender inequality, welfare of marginalised communities, LGBTQIA+ rights and human security. She aspires to learn more about policy as a key instrument in supporting change in these areas and has dabbled in research and content writing internships for the same.

## Indian Education: Schools versus Schooling

Original: https://www.spontaneousorder.in/p/indian-education-schools-versus-schooling

Author: Spontaneous Order

Published: 2022-12-19T12:51:50.000Z

Topics: rte-act, learning-outcomes, teacher-reform, nep-2020

> India’s journey with education has been long and arduous – its most recent escapade being the National Education Policy (NEP) 2020. Being a country with such a vast population of children, the need to impart fundamental education during the early year

**Summary:**

India's education policies like the RTE Act 2009 and NEP 2020 prioritize enrollment over actual learning, sending children to poorly performing government schools baited with free uniforms, books, meals, and no-detention up to eighth grade, but yielding dismal outcomes from a classical-liberal viewpoint that demands accountability and incentives. Enrollment has risen significantly since RTE's 2010 implementation, yet retention and passing rates lag, learning levels are low, and teacher absenteeism is high. ASER 2021 reports in Chhattisgarh show second-standard students recognizing letters dropping from 76.3% in 2018 to 57% in 2021, and third-standard basic subtraction from 20% in 2016 to 9% in 2021. The pandemic exacerbated dropouts via digital divide, with government school smartphone access at 63.7% versus 79% in private schools. NITI Aayog critiqued no-detention for removing learning pressure. The author argues for shifting focus to measurable outcomes like retention and passing rates through curriculum reform, teacher training via state-private cooperation, aligning incentives for educators and motivating parents to see education as a long-term investment rather than child labor supplementation, to deliver genuine schooling beyond mere schools.

**Key points:**

- RTE Act boosted enrollment but failed on retention, learning outcomes, and curbed teacher absenteeism in government schools.
- ASER surveys reveal learning collapse: 2nd graders recognizing letters fell to 57% (from 76.3% in 2018), 3rd graders doing subtraction to 9% (from 20% in 2016).
- No-detention policy up to 8th grade demotivates learning by guaranteeing diplomas regardless of performance.
- State-private partnerships must educate teachers, reform curriculum, and align incentives for quality education.
- Policymakers should prioritize outcomes over enrollment to foster long-term investment in education by families.

**By Aakriti Parashar**

* * *

India’s journey with education has been long and arduous – its most recent escapade being the National Education Policy (NEP) 2020. Being a country with such a vast population of children, the need to impart fundamental education during the early years is ever-increasing. The government has formulated policies to address this responsibility in the past few decades. Article 21-A of the Constitution and the Right to Education Act (RTE) 2009 came into effect on April 1st, 2010. They aimed to ensure that all children aged six to fourteen (proposed to increase to ages three to eighteen by NEP) have access to free education throughout the country. According to the RTE Act, *every child has a right to full-time elementary education of satisfactory and equitable quality in a formal school that satisfies certain essential norms and standards.* 

The RTE is well-intentioned and noble in its idea of ensuring that no child in India goes without an education. The title of the RTE Act incorporates the words ‘free and compulsory’. It aims to ensure that every child attends school and that financial constraints do not impede one from having access to a decent education. The Act has made strides to ensure provision for admission of children to age-appropriate classes. The [enrollment statistics have significantly risen](https://schoolchoice.in/blog/wp-content/uploads/2011/05/School_Progress_Mar_2007.pdf) since the implementation of the RTE. However, the [retention and passing numbers](https://schoolchoice.in/blog/wp-content/uploads/2011/05/School_Progress_Mar_2007.pdf) are far from ideal, learning levels are low, and teacher absenteeism is high. [This led](https://schoolchoice.in/blog/wp-content/uploads/2011/05/School_Progress_Mar_2007.pdf) to poor quality of education in most government and government-aided schools.

Per the Act, government school students are authorised to receive free stationery, books, and uniforms up to eighth-standard. It would not be bizarre to compare government schools to a cage, albeit a faulty one, and the free uniforms, mid-day meals, and other monetary aid dangling as bait for the poor, easily lured by basic needs for their children’s sustenance. But what happens once the bait is taken? The learning outcomes barely reflect the speed at which students supposedly go to school. Beyond enrollment, there is [little evidence](https://www.indusaction.org/wp-content/uploads/RTE-RetentionLearning-Survey_2019_Final-Version.pdf) suggesting that these students are acquiring knowledge at the level of their classes. Simply put, the current policies to ensure education for all are *sending students to schools* but *not educating them*. 

With the added digital divide caused by the pandemic, numerous [students were forced to drop out of school](https://thewire.in/education/millions-of-indian-children-affected-by-covid-related-school-closures-digital-divide) during the harrowing years of 2020 to 2022. Online classes became a privilege only a few could access. Despite smartphones reaching the most remote corners, it was inadequate to keep students in school. The [Annual Status of Education Report (ASER) 2021](http://img.asercentre.org/galleries/pressrelease_aser2021_english_final1.pdf) survey noted that while smartphone ownership doubled since 2018, more private school students owned smartphones at home (79%) than those in government schools (63.7%), limited to one phone per household, with many users in need. 

The recent [ASER survey](http://img.asercentre.org/docs/asercg2021_fullreport_11.01.2021.pdf) was carried out in Chhattisgarh focusing on learning outcomes. Per the report, children’s reading and numerical abilities had reached their lowest point in a decade. The percentage of second-standard students capable of comprehending letters fell from 76.3% in 2018 to just 57% in 2021. In arithmetic, the number of third-standard students who could do basic subtraction crashed from 20% in 2016 to an unfortunate 9% in 2021. Additionally, the RTE Act stipulates that no child, regardless of performance, can be held back up to the eighth-standard. This implies that they are entitled to an eighth-standard diploma even if they cannot recognise any letter or number. In its review of the [Twelfth Five Year Plan, the NITI Aayog had contested](https://www.thehindu.com/news/national/Niti-Aayog-calls-for-review-of-RTE-Act/article17029895.ece), ‘But despite this good intention, the provision has a detrimental effect on learning outcomes, since it takes away the pressure to learn and to compete’. 

The advancements made in the Indian education policies seek to bring much-needed reform, but their approach is misguided. A basic principle of a sound and effective public policy is considering the long-term impact on all communities. But the RTE’s mission to send kids to school begins and ends with enrollment. Little has been done to improve student retention in schools, with the added post-pandemic challenge staring us in the face: the [dropout numbers highest in the decade](https://theprint.in/india/education/not-distance-or-cost-but-this-is-the-main-reason-kids-are-dropping-out-of-school-nfhs-5-finds/982403/), and [learning outcomes at their lowest](https://www.indusaction.org/wp-content/uploads/RTE-RetentionLearning-Survey_2019_Final-Version.pdf). 

An exigent shift in focus is required to ensure effective education reaches the students. Using bait and distributing diplomas irrespective of performance has become a great demotivator for students to persist academically. A major reason behind the lack of quality education stems from teacher absenteeism and poor qualifications. An appropriate level of cooperation and understanding is required between the state and private entities to *educate educators* to drive curriculum reform and increase the number of graduates from these schools with adequate knowledge*.* Once the incentives of the teachers and the school heads align with the mission of the RTE Act, which is to provide quality learning to all students, will we see a positive change in our education system overall.

In conclusion, focusing on measurable outcomes, including retention and passing rates, is more crucial than a well-intentioned ‘go-to-school’ initiative. The existing student population can be well educated only once the policies favour curriculum reform and motivate students and parents to commit to schooling rather than viewing their children as an addition to family labour. The uneducated population needs to view education as a long-term investment, and it is crucial for the state and the existing policies to reinforce that perception. It is, therefore, the duty of the policymakers to not simply build schools but provide proper education to one and all. 

Read More: [Why India must learn to live with agitations](https://spontaneousorder.in/why-india-must-learn-to-live-with-agitations/)

* * *

**About Aakriti Parashar**

Aakriti Parashar is an aspiring public policy enthusiast and writer, currently working as a Junior Associate for the Policy Training and Outreach Department at Centre for Civil Society. A 2021 graduate from the University of Delhi, she has led various social entrepreneurial teams and worked as a Consultant for the Delhi Government. Aakriti has a keen interest in education policy and research. Some of her published articles include India’s Daughter – a commentary on women safety in India; and a number of published works for Her Campus Media.

## Why India must learn to live with agitations

Original: https://www.spontaneousorder.in/p/why-india-must-learn-to-live-with-agitations

Author: Spontaneous Order

Published: 2022-12-15T09:35:36.000Z

Topics: infrastructure-delays, democratic-agitations, environmental-protests, nimbyism

> Some BJP spokespersons believe that foreigners are trying to sabotage India’s economic growth by spurring agitations against projects of national importance. No, such agitations are intrinsic to democracy. The latest example was the stalling of construc

**Summary:**

Swaminathan SA Aiyer argues that agitations against major infrastructure projects are not foreign sabotage, as claimed by some BJP spokespersons, but an intrinsic feature of democracy that India must accept, much like Western nations. The Vizhinjam mega-port in Kerala, India's deepest with a 20-metre draft designed to attract giant container ships from Colombo, was stalled for 140 days by Christian fishermen backed by the Church and environmentalists over erosion and fish catch fears, despite expert rebuttals and environmental clearance. The CPM government initially opposed awarding it to Gautam Adani but had to invite him when others balked at viability. Police inaction to avoid communal clashes prolonged the blockade until agitators attacked a station, prompting arrests and resolution. Nationally, protests contribute to delays in 647 of 1,526 central projects (up from 547), with 21% average cost overruns and some stalled 23 years; examples include Ratnagiri's 60-million-tonne refinery, a French nuclear plant, Delhi-Mumbai/Kolkata rail corridors, and Mumbai-Ahmedabad bullet train. While past poor planning justifies some scrutiny, improving project quality, NIMBYism (or BANANA in Britain) has slowed Western growth, blocking fracking and refineries despite benefits like US energy independence. India, developing later, pays this democratic price.

**Key points:**

- Agitations like Vizhinjam's 140-day blockade are democratic norms, not foreign plots, and require firm response only after agitators lose peaceful credibility by attacking police.
- Protests have delayed 647 of 1,526 central projects with 21% cost overruns, stalling key initiatives like Ratnagiri refinery and bullet train over land and environmental concerns.
- Western democracies endure NIMBY/BANANA attitudes that block vital projects like fracking and refineries, denting growth, a disadvantage India must live with as a late developer.

**By Swaminathan SA Aiyer**

* * *

Some BJP spokespersons believe that foreigners are trying to sabotage India’s economic growth by spurring agitations against projects of national importance. No, such agitations are intrinsic to democracy. The latest example was the stalling of construction at the mega-port at Vizhinjam, Kerala, for 140 days. Agitating fishermen, mostly Christians, were backed by the Latin Catholic Church and sundry environmentalists. Last week the agitators attacked the local police station, injuring policemen. The CPM-led state government arrested top church leaders, who called off the agitation.  
Giant container ships cannot enter Indian ports, and so offload containers at the deep-water port of Colombo, to be trans-shipped to Indian ports by smaller vessels. Vizhinjam was planned to attract giant container ships away from Colombo. With a 20-metre draft it will be India’s deepest port. It is located at India’s southern tip, close to major sea routes.  
Initially, the CPM opposed the project going to India’s biggest port-operator, Gautam Adani. But other bidders, unconvinced of the economic viability of the project, dropped out. The CPM had to woo Adani to do the job. This was no crony capitalist handout.  
The project got environmental clearance. But fishermen blocked construction, claiming the port would accelerate coastal erosion and reduce their fish catch. They rejected expert assurances that coastal erosion was common everywhere on the west coast and building ports would not worsen the erosion or reduce fish yields.

**Protests and inaction**

Adani asked the state government to throw out the agitators. But for months the police allowed the agitators to block the project, saying this was a delicate matter that could turn into a Hindu-Christian clash. The police recalled a similar agitation at Vedanta’s copper smelter at Thoothukudi on pollution grounds. Experts cleared the plant. But in 2018 the police fired on agitators, killing 11. Public outrage then made it impossible to re-open the plant after fixing environmental issues: that would be seen as insulting to the 11 killed.  
To avoid a similar outcome at Vizhinjam, the police for months avoided a tough crackdown. But then the agitators made the mistake of attacking a police station and injuring policemen. Church leaders behind the agitation lost their peaceful Gandhian aura. This encouraged the state to crack down. That holds lessons on dealing with agitations.  
Demonstrators have delayed or scuppered many key projects. An August report said that of 1,526 ongoing central projects, 647 were delayed, up from 547 in January due to various reasons including protests, land acquisition and forest clearance delays. Some projects were delayed 23 years. The cost overrun averaged 21%.  
Agitating villagers have forced the abandonment of a 60-mn-tonne oil refinery at Ratnagiri with Gulf partners. They say the refinery will pollute and devastate their lands. Environmental activists have made it impossible to build new refineries in the USA or Europe. India is, prematurely, going down that path. Land acquisition problems have stalled a nuclear power plant with French assistance. After almost two decades, India has yet to complete dedicated rail corridors from Delhi to Mumbai and Kolkata. The Prime Minister’s pet project, a bullet train from Mumbai to Ahmedabad, has also been stalled by land acquisition problems.

**The challenges**

The BJP blames foreign funders and activists for sabotaging India’s progress. But such agitations have spread in all democracies, especially western ones. Attitudes have shifted, with big projects seen as nuisances rather than national gems. Activists care little that economic growth gets dented: they think it more important to focus on environmental risks and citizen approval. Besides, many past projects were poorly planned and callously executed, so stopping and delaying some projects can be a public service. Past agitations have undoubtedly improved the quality and sensitivity of new projects.  
But this has slowed GDP growth in the West. Several years of environmental assessment and public hearings are needed before clearing major projects, even roads. Mines and oil refineries simply cannot be built in some countries. Objectors can kill projects of national importance, ignoring scientific evidence. Fracking, for instance, has saved the US from becoming dependent on energy imports, but agitators in Europe have blocked fracking although no public harm has been demonstrated in the US. The same is true of genetically modified foods.  
Western citizens increasingly want projects to come up elsewhere, not nearby. NIMBY (Not in my Backyard) has become a public position that politicians bow to. In Britain the problem is so acute that it is called BANANA—Build Absolutely Nothing Anywhere Near Anyplace.  
Western countries did not experience such agitations when they were at India’s stage of development. India will have to live with that disadvantage: it is a price of democracy.

This article was originally published by [The Times of India](https://timesofindia.indiatimes.com/india/why-india-must-learn-to-live-with-agitations/articleshow/96137386.cms) on December 10, 2022.

Read More: [Labour of Love: Critical Analysis of the Wages against Housework Policy](https://spontaneousorder.in/labour-of-love-critical-analysis-of-the-wages-against-housework-policy/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Labour of Love: Critical Analysis of the Wages against Housework Policy

Original: https://www.spontaneousorder.in/p/labour-of-love-critical-analysis-of-the-wages-against-housework-policy

Author: Spontaneous Order

Published: 2022-12-02T15:30:06.000Z

Topics: unpaid-care-work, gender-roles, female-labour-participation, welfare-schemes

> We say: stop celebrating our exploitation, our supposed heroism. From now on, we want money for each moment of it so that we can refuse some of it and eventually all of it. -Silvia Federici “Wages against Housework”, 1974 The ‘Grihini Samman’ sche

**Summary:**

The 'Grihini Samman' scheme, an Indian National Congress electoral promise in Assam, offers ₹2000 monthly to every housewife, including widows and divorcees, to recognize unpaid care work that disproportionately burdens women—five hours daily versus men's 1.5 hours per NSO 2020 data—and valued globally at $10.9 trillion. From a classical-liberal viewpoint, while visibilizing this 'labour of love' challenges patriarchal undervaluation, cash payments risk counterintuitively entrenching gender roles by institutionalizing women's domestic responsibilities as a social contract without altering divisions of labor. This could discourage female labour market entry, education investment, and independence, fostering dependency on state handouts rather than empowering choice. A blanket wage ignores socio-economic variations, potentially undervaluing work and leading to overconsumption of female labour amid rigid norms, sidelining better market opportunities. The policy provides short-term recognition but fails to overhaul cultural barriers; true emancipation demands structural liberal reforms like expanded public childcare and eldercare, time-saving technologies, improved infrastructure (electrification, water access), and equal maternity/paternity leaves to redistribute burdens and boost workforce participation.

**Key points:**

- 'Grihini Samman' scheme's ₹2000 monthly payments to housewives reinforce unequal gender roles without promoting shared domestic responsibilities.
- Women perform five hours of unpaid domestic work daily compared to men's 1.5 hours, per NSO 2020, hindering labour force participation.
- Cash incentives risk discouraging women's market entry and education, perpetuating dependency over autonomy.
- Policy undervalues diverse housework across classes and fails to shift norms, unlike structural changes such as public childcare and equal leaves.

**By Vedika Sakhardande**

* * *

*We say: stop celebrating our exploitation, our supposed heroism. From now on, we want money for each moment of it so that we can refuse some of it and eventually all of it. -Silvia Federici “Wages against Housework”, 1974* 

The ‘Grihini Samman’ scheme was an electoral promise by the Indian National Congress before the Assam Legislative assembly elections. This scheme provides ₹2000/- per month to every housewife, including widowed and divorced women. The ‘Wages for housework’ policy addresses the unequal division of unpaid care work amongst men and women, which hinders the quantity and quality of women’s participation in the labour force. Recognition through remuneration goes a long way in combating the patriarchal notion that housework is a ‘labour of love’. However, this policy might counterintuitively further solidify gender roles and increase the dependence on women eventually. 

Time spent doing routine housework and care work is defined as [Unpaid labour](https://www.oecd.org/dev/development-gender/Unpaid_care_work.pdf) *(OECD, 2019)*. Due to gendered social norms, unpaid care work falls disproportionately on women across different socio-economic classes and cultures. In the *[NSO 2020 report](https://www.pib.gov.in/PressReleasePage.aspx?PRID=1660028)* on time use in India, women spend five hours per day on unpaid domestic services, while men spend only 1.5 hours. Unequal distribution of caring responsibilities also translates into unequal opportunities for time to participate in paid activities. This affects female labour force participation, quality of employment, and wages. Neglecting unpaid care work leads to incorrect inferences about levels and changes in individuals’ well-being and the value of time, [limiting policy effectiveness](https://www.ilo.org/wcmsp5/groups/public/---dgreports/---integration/documents/publication/wcms_119142.pdf) across a range of socio-economic areas. 

Despite the importance of women’s contribution to care work, it is severely underestimated and excluded from accounting in most countries. This leads to a narrow view of women’s work represented by the predominant notion of housework being their sole responsibility. Women’s work (caring for children and older adults, emotional labour, cooking, and cleaning), however, is valued at [$10.9 trillion](https://www.oxfamamerica.org/explore/research-publications/time-care/) globally. Recognising this work in the economic system and adding it to the labour supply equation improves the labour force analysis. Domestic worker organiser Ai-Jen Poo noted that isolation, irregular hours, and exclusion from labour laws that women face in households coincide with those of domestic paid workers. But no legal recognition of domestic work as ‘work’ invalidates calls for more fair distribution. 

An unintended consequence of this policy, however, is that provision of cash incentives to women and girls for unpaid care work further institutionalises the unequal division of work and reinforces the existing gender roles. While wages for care work will transform what was understood as a ‘natural attribute’ of women into a social contract, it need not change the division of housework. It would not enhance their independence in the long run and may discourage labour market participation and investment in education, further maintaining the traditional division of work. A policy giving cash incentives without social messaging and structural change would entrench the roles prescribed to women. 

This policy might also fail to change the valuation of unpaid work from chores performed ex gratia to a valuable economic activity. This reflects in how we treat domestic workers. Despite being paid, their work and stature are considered inferior, especially in case-segregated countries like India.

While a policy that visibilises unpaid work may help improve women’s conditions, it is unlikely to give them the autonomy to decide the work they want to do. This policy, therefore, ignores the multitudes of norms and social patterns that impact the labour supply equation for women. 

Another question is setting the wage payable to women. A blanket wage is unlikely to account for the vast differences in women’s work and the divisions across socio-economic classes. It tends to undervalue the value beneficiaries obtain from the labour performed. Undervaluation of wages could also result in overconsuming labour beyond the optimal level. Supplemented by rigidities imposed by social norms, women will be all the more chained to housework. This would keep women out of better-paying market opportunities and reduce the scope for emancipation.  
  
The wages for housework policy is a short-term solution to visibility for women’s work and a recognition of the gendered roles of work division in society. However, equal division of burden and an equitable representation of women in the workforce requires a socio-economic overhaul considering the cultural norms that pervade work relations. Improved access to public services is an essential institutional change to facilitate the reduction and redistribution of unpaid work. These include child care and care for older adults, investment in time-saving technology, electrification and improved access to water, and equal provision of maternity and paternity leaves. 

Read More: [The Mahatma of Shramjeevi: Ela Bhatt, the ‘Personal Hero’ of millions of workers](https://spontaneousorder.in/the-mahatma-of-shramjeevi-ela-bhatt-the-personal-hero-of-millions-of-workers/)

* * *

**About Vedika Sakhardande**

Vedika Sakhardande is currently pursuing her Bachelor's in Economics from Miranda House, Delhi University. They are interested in Feminist Economics and are eager to pursue empirical research on current issues relating to female workforce participation and gender equality.

## The Mahatma of Shramjeevi: Ela Bhatt, the ‘Personal Hero’ of millions of workers

Original: https://www.spontaneousorder.in/p/the-mahatma-of-shramjeevi-ela-bhatt-the-personal-hero-of-millions-of-workers

Author: Spontaneous Order

Published: 2022-11-14T15:30:48.000Z

Topics: street-vendors, informal-economy, women-empowerment, policy-implementation

> The Grande Dame of the informal sector, a gentle revolutionary and a Gandhian at heart, lives on as a personal hero of millions of workers, reformers, and street vendors across the country. Ela Bhatt, lovingly referred to as ‘ben,’ or sister, by milli

**Summary:**

Ela Bhatt, founder of the Self Employed Women’s Association (SEWA), empowered 2.1 million informal women workers through self-reliance and economic independence, embodying Gandhian simplicity and an 'Economy of Nurturance' that prioritizes local livelihoods aligned with community and ecology. As a pioneer for the invisible labor force, she championed street vendors—comprising 2% of the urban informal sector and essential for affordable goods—leading to the 2014 Street Vendors Act (SVA), which formalizes vending rights but suffers from poor implementation, including harassment, evictions, and lack of gender protections for women (30% of Delhi's 300,000 vendors) and transgenders. Vendors face extortion, poor hygiene, and insecurity without robust mechanisms or court relief. SEWA's Mahila Bazar, launched in 2009 on Delhi's Tagore Road, exemplifies her vision: accommodating over 200 women vendors with dignity, water, toilets, and infrastructure improvements via advocacy. Bhatt's bottom-up approach awakens unheard voices for accountable, exploitation-free local economies, crediting vendors' GDP contributions and urging collective action like 'Ame karishu kamyab' for sustainable change.

**Key points:**

- Ela Bhatt's SEWA empowered 2.1 million informal women workers via self-reliance and visibility.
- The 2014 Street Vendors Act formalizes rights but fails due to harassment, evictions, and absent gender protections.
- Women constitute 30% of Delhi's 300,000 street vendors, lacking hygiene, safety from goons, and basic facilities.
- SEWA's Mahila Bazar since 2009 supports 200+ women vendors harassment-free with essential amenities.
- Bhatt's 'Economy of Nurturance' promotes local, accountable livelihoods integrating producers, consumers, and ecology.

**By Sanskriti Shree**

* * *

The Grande Dame of the informal sector, a gentle revolutionary and a Gandhian at heart, lives on as a personal hero of millions of workers, reformers, and street vendors across the country.

Ela Bhatt, lovingly referred to as ‘*ben*,’ or sister, by millions of women across the world, was a pioneer who redefined the concept of empowerment, especially for the ‘invisible’ labour force. Ela ben devoted herself to the cause of sustaining the voice, visibility, and validation of the approximately 2.1 million informal women workers through Self Employed Women’s Association (SEWA).

Ela ben was a philanthropist, women’s rights activist, lawyer, and gentle leader. She believed in empowering the social position of every woman in the workforce. Her message was not loud, yet it was powerful enough to be heard for generations, in the echoes of ‘self-reliance’ and ‘economic empowerment’ of women. Ela ben believed and strongly advocated that empowerment is a constant opportunity to practice self-confidence which leads to ‘Azadi’ or freedom. A worker attains true freedom only when they have the opportunity to grow and earn their livelihood. 

An exemplar of Gandhian principles, Ela ben believed in the virtue of simplicity to identify problems and their solutions. Untouched by her achievements and recognitions,  Ela ben remained open to new ideas to understand the various economic challenges faced by women in the informal economy. Ela ben’s work inspired many world leaders, making her a ‘personal hero’ of women workers globally.

A staunch supporter of equal economic participation, Ela ben in her book *‘Anubandh: Building Hundred-mile Communities’,* envisaged an economy of nurturance. It is an economy that champions local means of livelihood to align with its natural environment. This concept, as highlighted by Ela ben, is not a solution but a means to plan ahead to study the impact of our actions on others in a community that includes a producer, consumer, and their ecology, to build accountability locally. Ela ben believed in developing an ecosystem where the community, including the locally integrated change agents, witnessed the impact of their actions leading to informed decisions. She believed that change is initiated from the bottom of the pyramid when the unheard voices become the catalysts of revolution. One of many such voices is that of street vendors.  
  
Approximately 2% of the population in the urban informal sector take up street vending since it is a low-cost enterprise. Street Vending caters to the demands of millions of consumers for a sustainable supply of affordable and essential goods. This is the concept of an ‘Economy of Nurturance’, free of gaps and exploitation,  empowering local means to promote sustainable livelihood for all. 

Championing the rights of the lower strata of society, Ela ben advocated for the rights of street vendors. Her efforts materialised  in 2014 when the Parliament of India passed the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014 (SVA). This Act formalises vending and creates a uniform framework for protecting vendors’ rights. However, vendors continue to face harassment, extortion, and evictions at the hands of local authorities without any relief from the courts. One of the gaps in the proper [implementation of the  SVA](https://ccs.in/sites/default/files/progress-report-2020-implementing-the-street-vendors-act.pdf) is a  lack of dedicated and robust mechanisms. 

From the perspective of affirmative action, the law further fails to establish gender protection guidelines for women and transgenders. A study by [Women in Informal Employment: Globalizing and Organizing (WIEGO)](https://www.wiego.org/sites/default/files/resources/files/IC-Delhi-SV-Case-Study1.pdf) reveals that women constitute 30% of roughly 3,00,000 street vendors in Delhi. As consumers, we fail to realise these vendors’ plight and the hardships they face regularly. Apart from constant evictions and harassment, these vendors, while working in extreme conditions over long hours, lack basic hygiene requirements such as water and toilet facilities. In addition, the SVA fails to define guidelines for the safety and security of women street vendors at the workplace from local goons, burglars, and money lenders, among others.  The model of ‘*Mahila Bazar*’ initiated by SEWA under Ela ben’s leadership to address the aforementioned struggles is a milestone initiative in this regard. Established in Tagore Road in 2009, Mahila Bazaar accommodates over 200 women vendors from different parts of Delhi who vend with dignity, without facing any harassment. The bazaar has arrangements for drinking water and toilets for the vendors. Further, following constant pursuit, the MCD has also reconstructed the roads dug for the sewer connections, and the police department and traffic control authority are now being pursued for no objection certificates for vendors.

Street vendors in India contribute greatly towards the country’s savings and gross domestic product. Their role in the economy deserves due credit and Ela ben, being the holistic visionary she was, focused on empowering the most vulnerable yet significant players of the sector. She believed when millions join hands to achieve a single goal and recite *‘Ame karishu kamyab’* (Gujarati song similar to We Shall Overcome), there will be light to guide the path towards change. Ela ben awakened a spirit of hope in millions of workers and reformers through her actions and guided us to realise the true value of simplicity and the power it beholds to maneuver history. 

Read More: [Designing the language pill for medical education in India](https://spontaneousorder.in/designing-the-language-pill-for-medical-education-in-india/)

* * *

**About Sanskriti Shree**

Sanskriti works as a Project Manager, Jeevika in the Research and Training Programs at Centre for Civil Society. A graduate in Political Science from University of Delhi, she holds a demonstrated history of working in research, project management and strategy in various profit/non-profit/government organizations. She worked as a Child Rights Fellow at the Delhi Commission for Protection of Child Rights (DCPCR), GNCT Delhi and Ashoka University and contributed to some of the flagship projects in the Juvenile Justice Division of DCPCR. Besides this, she was also a Gandhi Fellow in the Aspirational Districts Transformation program of NITI Aayog & Piramal Foundation where she coordinated the implementation of various educational schemes in the district of Sonbhadra, Uttar Pradesh. Given her multidisciplinary exposure to the on-ground implementation of various policies, she wishes to contribute to bridge the gap between implementation and policy making, thus creating an all-inclusive development paradigm.

## Designing the language pill for medical education in India

Original: https://www.spontaneousorder.in/p/designing-the-language-pill-for-medical-education-in-india

Author: Spontaneous Order

Published: 2022-11-08T14:06:55.000Z

Topics: medical-education, language-policy, healthcare-reform, indian-federalism

> Expertise, trust, and empathy are three pillars of an effective doctor-patient relationship. At the heart of this relationship lies communication. A common language helps bridge the information asymmetry between doctor and patient, facilitating the trea..

**Summary:**

Dr. Kaustubh Bondre critiques the Madhya Pradesh government's decision to introduce Hindi-medium MBBS courses, arguing it undermines medical education despite aiming to improve doctor-patient communication and accessibility. From a classical-liberal policy lens, the move lacks evidence that English hinders quality, ignores medical education's complexities, and risks fragmenting the profession across linguistically diverse states, potentially restricting student and doctor mobility. India's constitutional federalism (Medical Education on Concurrent List) could trigger a 'domino effect' with states adopting local languages, harming national uniformity and career prospects. Backward linkages include challenges for the >40% of MP students from English-medium schools (U-DISE 2021), bilingual exam issues, and reduced appeal to out-of-state NEET aspirants. Forward linkages threaten postgraduate access and India's medical tourism/export status, where English bridges global knowledge sharing. Amid healthcare crises—4% allopathic doctor shortfall, 80% specialist shortfall in rural areas (RHS 2020-21), 1.28% GDP health spend, 53.2% out-of-pocket expenditure, 3.8:1 urban-rural doctor ratio, 57.3% unqualified practitioners—language shifts distract from real reforms. Recommendations: Retain English as MBBS medium; offer local language courses/apps; pilot vernacular MBBS in AIIMS-like institutions; pursue global healthcare hub ambitions via more colleges and English skills; develop comprehensive education language policy prioritizing student interests and 'first, do no harm.'

**Key points:**

- Retain English as the primary medium for MBBS to ensure national uniformity, access to global literature, and career mobility for students and doctors.
- Facilitate doctor-patient communication through supplementary local language courses, translation apps, and avoiding politicized 'language wars.'
- Conduct pilot projects in central institutions like AIIMS to test vernacular MBBS viability before statewide implementation.
- Address healthcare shortages by expanding medical colleges and English proficiency rather than fragmenting education along linguistic lines.
- India should leverage English to become a global medical education and tourism hub, exporting professionals amid domestic challenges.

**By Dr Kaustubh Bondre**

* * *

Expertise, trust, and empathy are three pillars of an effective doctor-patient relationship. At the heart of this relationship lies communication. A common language helps bridge the information asymmetry between doctor and patient, facilitating the treatment process. It makes doctors more ‘accessible’ instead of ‘elite’ in patients’ eyes, especially those from rural areas. From this perspective, the recent decision of the Madhya Pradesh (MP) government to conduct the MBBS course in Hindi seems pertinent. However, good intentions do not always result in good outcomes. 

Through the policy lens, the decision appears unsound for three reasons. First, there is a lack of clarity regarding why this change is necessary. The claim that reliance on English negatively affects the accessibility and quality of medical education needs evidence. Open discussion and debate on the issue are called for. Second, it tends to neglect the complexity of medical education. A half-baked policy may impose high costs on the entire system while delivering unintended negative consequences. The contemplated benefits from policy change must be scrupulously weighed against the costs. Third, the ‘native’ language in the Indian context does not just mean Hindi. The government seems oblivious to the ‘domino effect’ the implementation of this policy may have on medical education across the Indian States. Thus, hasty announcements and implementation of such an impactful decision might do more harm than good. 

Russia, China, Japan, and many other countries have MBBS courses in their native languages. But unlike these nations, India does not have linguistic homogeneity of the natal tongue. Indian states are formed on a linguistic basis. Medical Education is placed in List III (Concurrent List) in the Seventh Schedule of the Indian Constitution. If MP provides MBBS education in Hindi, we may soon see various state governments developing MBBS courses in their official languages. Such fragmentation of medical education and profession based on language might restrict choices for medical aspirants and graduates to study and work, respectively. 

 **Backward and forward linkages**

Firstly, let us look at the backward linkage. The policy would suit students who completed their school education in Hindi medium. The MP government announced that there would be bilingual classes–Hindi and English in medical colleges. At later stages, students would be given a choice regarding the medium of instruction. Considering that more than 40% of students in MP pass out of English-medium private schools ([U-DISE 2021](https://www.education.gov.in/sites/upload_files/mhrd/files/statistics-new/UDISE%2B2020_21_Booklet.pdf)), nearly half of medical students are likely to prefer English as the medium of instruction. Medical colleges, thus, would require simultaneous facilities for instruction in both languages. Would the colleges conduct examinations in bilingual mode? Would the external examiners for viva always be comfortable in Hindi? Would it affect the availability of quality examiners? The policy must address these issues.

Through the National Eligibility cum Entrance Test (NEET), aspirants seek admission to medical courses across different medical institutes in the country. What happens when each state government conducts an MBBS course in the state’s official language? The proposed bilingual classes may not be attractive to students outside the state. This may become a political tool for state governments to promote the ‘sons of the soil’ policy discouraging students from other states. Such a scenario would be inimical to national interest and may hurt the students’ interests.

 English as a medium of instruction allows for uniformity in curriculum and academic standards across the country. The existing large pool of doctors, practitioners, and academicians provide expert faculty ensuring the quality of instruction in medical colleges. English is not just a language. It is a skill and tool for upward mobility in an increasingly competitive world. Classrooms, hospitals, and teachers provide exposure, but doctors are made in libraries, where these students burn the midnight oil exploring numerous sources on multiple topics. Access to quality medical literature and exchange of knowledge with mentors and peers allows students to expand their horizons and get better career opportunities within and outside the country.

Let us now consider the forward link. Will we conduct various postgraduate courses in the vernacular medium in the future? Would non-English medium MBBS candidates have a disadvantage while applying to prestigious postgraduate and super-speciality institutes in India and abroad? Ill-conceived ideas implemented without adequate planning may adversely affect the career growth of students. India is emerging as a top medical tourism destination and an exporter of medical services and professionals. Indian doctors make up a sizable proportion of medical professionals in countries like the US, UK, Canada, and Australia.

Modern medicine is an ever-evolving and dynamic field. Despite the enormous body of knowledge available, COVID-19 has shown that there are many ‘unknowns’ yet. The growth of medical research and development is contingent upon sharing knowledge, learnings, and insights within the medical fraternity. In a linguistically diverse landscape, English acts as a bridge. In this context, creating a language barrier may be the last thing we need. 

Public healthcare in India is faced with acute challenges. According to the [Rural Health Statistics 2020-21](https://hmis.nhp.gov.in/downloadfile?filepath=publications/Rural-Health-Statistics/RHS%202020-21.pdf) by the MoHFW, there is a shortfall of 4% of allopathic doctors and 80% of specialists in rural India. The government spends only [1.28%](https://pib.gov.in/PressReleasePage.aspx?PRID=1858770) of GDP on healthcare, and out-of-pocket expenditure is [53.2%](https://pib.gov.in/PressReleasePage.aspx?PRID=1858770) of current health expenditure (2018-19). The urban-to-rural doctor density ratio is [3.8:1](https://pib.gov.in/PressReleasePage.aspx?PRID=1858770), representing a highly skewed distribution. Currently, [57.3%](https://pib.gov.in/newsite/PrintRelease.aspx?relid=192491) of allopathic medicine practitioners do not have a medical qualification. The language issue appears peripheral to the overall strengthening of the country’s healthcare system when weighed against these stats.

**The language pill**

Certain steps can be taken to ensure the best outcome without compromising the long-term interests of students, teachers, and colleges.

First, the medium of instruction for the MBBS course must be English. Any change in the status quo would be justified when clarity about forward and backward linkages is obtained. The issues of access to medical education and facilitating doctor-patient communication are crucial. But the cure must not be worse than the disease. Changing the medium of instruction in medical colleges is not the solution to the mentioned issues. We must refrain from using students as pawns in the ‘language wars’ manufactured for political interests.

 Second, medical colleges can encourage and facilitate communication in the local languages. Candidates having difficulty understanding the local language can be offered supplementary courses to improve the same. Workable knowledge of such languages would simplify various medical terms and aid the process of doctor-patient communication. Apps can be developed to easily translate complex medical jargon into local languages to avoid overburdening medical students.  

Third, reputed central institutions like AIIMS, can conduct pilot projects to test the viability of MBBS courses in native languages. The data from these small-scale studies must be shared and used to devise policies to be implemented at a large scale. State governments must go slow, discussing and debating the data obtained from pilot studies. Simultaneous efforts can be made to translate medical curricula into native languages without diluting the quality.

 Fourth, while addressing domestic demand, India must aim to develop into a global healthcare hub. India has an advantage because of highly professional doctors, cutting-edge technology, and state-of-the-art medical infrastructure. Increasing the number of medical colleges and promoting English language skills can help build a pool of human resources that would be an asset to the nation. India can become a medical education and tourism hub, catering to the developed and developing world.  This will also contribute to improving the domestic healthcare industry.

Lastly, we need a comprehensive language policy for the entire education sector–including higher education. This is in the spirit of the National Education Policy 2020, seeking to break silos and vows to keep the learners’ interests at the core. However, we mustn’t miss the forest for the trees. The core objective of medical education is to produce competent and compassionate doctors and promote the health and well-being of patients. Let the Hippocratic injunction of *Primum non nocere* (‘first, do no harm’) be the cornerstone of any policy change in medical education.

Read More: [MSP seen through the lens of the Austrian School of Economics](https://spontaneousorder.in/msp-seen-through-the-lens-of-the-austrian-school-of-economics/)

* * *

**About Dr Kaustubh Bondre**

Dr. Kaustubh A. Bondre is a medical practitioner and owner of WeCare Polyclinic, Karve Nagar. He works as a Medical Consultant at Gokhale Institute of Politics & Economics, Pune. A graduate from the GMCH Nagpur, he completed his Post-Graduate Program in Policy Design & Management from ISPP, New Delhi. He has a decade-long rich and diverse experience of working in government, non-government and private sectors. He has been associated with YASHADA, Pune & Jnana Prabodhini (NGO) for more than a decade. A policy enthusiast, he is passionate about the domains of Health, Education, National Security & International Affairs. As an educator & an entrepreneur, he continues to train & mentor civil services aspirants across the country, including those from Ladakh, Arunachal Pradesh, Gujrat, Karnataka & Maharashtra. An avid reader, he operates his own YouTube channel in an attempt to democratise knowledge.

## MSP seen through the lens of the Austrian School of Economics

Original: https://www.spontaneousorder.in/p/msp-seen-through-the-lens-of-the-austrian-school-of-economics

Author: Spontaneous Order

Published: 2022-11-04T16:40:25.000Z

Topics: minimum-support-price, austrian-economics, price-discovery, agricultural-policy

> The Minimum Support Price(MSP) is an advisory price that the Government of India(GoI) announces for certain agricultural products before the sowing season, to procure them if open market prices are lower. In this article, we will look at MSP through the..

**Summary:**

From an Austrian School of Economics perspective, India's Minimum Support Price (MSP) for agricultural products distorts markets by overriding spontaneous price discovery, which aggregates dispersed knowledge across time and place as per Hayek's Knowledge Problem. MSP, calculated by the Commission for Agricultural Costs & Prices (CACP) using production costs and other aggregates, ignores subjective marginalism and the labor theory of value, exemplified by a laborious but worthless book. Free market prices signal resource allocation, as in the Diwali milk price surge redirecting supply to sweet shops. MSP subverts entrepreneurship, preventing farmers from discovering optimal uses amid factors like heatwaves, pest attacks, wars, or innovations in GMOs and precision farming. Consequences include distorted signals causing water-intensive paddy in drought-prone areas (e.g., Haryana's 81 dark-zone blocks), food inflation, rotting grains in FCI stores, and excess exports. In Chhattisgarh and UP (Nov 2020), market prices trailed MSP by Rs 300/quintal and Rs 200/quintal for paddy. Haryana's 'Mera Pani, Meri Virasat' program counters this with Rs 7000/acre for diversified crops, honoring market prices over higher MSP demands. The conclusion: Policymakers should have no opinion on prices and avoid controlling them, per Vijay Kelkar.

**Key points:**

- MSP calculation based on production costs ignores subjective marginal value and distorts price signals essential for coordinating dispersed knowledge.
- Government price interventions like MSP subvert entrepreneurial judgment, leading to inefficiencies such as water table depletion from paddy in unsuitable areas.
- MSP causes food inflation, grain wastage in FCI godowns, and mismatched protein production despite changing demands.
- Haryana's Rs 7000/acre subsidy for crop diversification encourages entrepreneurial discovery by prioritizing market prices over MSP hikes.
- Policymakers should refrain from setting or controlling agricultural prices to enable spontaneous market order.

**By Abhimanyu Gupta**

* * *

The *Minimum Support Price*(MSP) is an advisory price that the Government of India(GoI) announces for certain agricultural products before the sowing season, to procure them if open market prices are lower. In this article, we will look at MSP through the Austrian School of Economics lens.  
  
But what is the ‘Austrian School of Economics’, you may ask? Simply put, it’s an economic school of thought that believes that an individual’s subjective choices and actions drive economic activities ([methodological individualism](https://mises.org/library/mengers-discovery-self#:~:text=%22There%20is%20no%20economic%20phenomenon%20that%20does%20not%20ultimately%20find%20its%20origin%20and%20measure%20in%20the%20economically%20acting%20human%20and%20his%20economic%20deliberations%22)). Based on this subjective-individualistic approach, the school regards any analysis starting with the collective as unscientific. Starting from this basic premise this school of thought has given many seminal ideas like subjectivism, marginalism, the signaling role of price, and the central role of the entrepreneur in market discovery. We will examine these ideas in the context of MSP as we go further.  

The MSP is set by the GoI using the [Commission for Agricultural Costs & Prices (CACP)](https://cacp.dacnet.nic.in/content.aspx?pid=62) recommendations, which factors in the cost of production, domestic and international prices, demand-supply conditions, inter-crop price parity, and terms of trade between agricultural and non-agricultural sectors. If you notice the calculation, it includes the cost of production and labour, indicating it is based on the labor theory of value. However, according to the [subjective theory of value](https://www.libertarianism.org/essays/mengers-principles-economics-what-makes-something-valuable#:~:text=Value%20is%20thus%20the%20importance%20that%20individual%20goods%20or%20quantities%20of%20goods%20attain%20for%20us%20because%20we%20are%20conscious%20of%20being%20dependent%20on%20command%20of%20them%20for%20the%20satisfaction%20of%20our%20needs) proposed by Carl Menger, the subjective perception of the individual consumers at the ‘margins’ determines the cost.  An example is a badly written book. Writing it may have been laborious. Yet it’s without value in the market.

  
What do we mean by the phrase ‘at the margin’ or ‘marginalism’? Imagine yourself stranded in a desert with no water. You may be willing to exchange diamonds for a bottle of water. However, having had the first bottle, you may not be willing to exchange similar quantities of the diamond for the second bottle of water. So you see how the value we assign to a product is subjective and determined by how useful we perceive the next unit of that item? That’s the basic idea behind marginalism.  

Another central idea in the Austrian school is the spontaneous [emergence of prices](https://mises.org/library/source-prices) from the interaction of buyers and sellers, known as Price discovery. To understand its role in ‘signaling’ and addressing [Hayek’s Knowledge Problem](https://fee.org/articles/hayek-the-knowledge-problem/), let us take an example:

  
Around Diwali have you observed the local milkman’s reluctance to deliver extra milk on short notice, and the rising milk prices? If you investigate further, you may find that his milk was being diverted to sweet shops for the holiday season. 

  
Notice how the milk price ‘signaled’ both the consumer and the milkman. While the consumer economizes on milk consumption, the milkman reallocates milk to its highest valued use while carrying the circumstantial knowledge of time and place – an upsurge in demand for sweets due to an upcoming festival.  

In an economy, such knowledge is distributed across time and place for every commodity. No single “central planner” can know this information in its entirety. F.A. Hayek called this the ‘[Knowledge Problem](https://www.econlib.org/library/Essays/hykKnw.html#:~:text=The%20economic%20problem%20of%20society%20is,given%20to%20anyone%20in%20its%20totality.).’

  
But luckily, as Hayek noticed, [prices](https://www.econlib.org/library/Essays/hykKnw.html#:~:text=Fundamentally%2C%20in%20a,precisely%20it%20accomplishes.) aggregated this precise knowledge of time and place into a single number. This economized the information people needed to process while transacting in a marketplace.  
  
Similarly, there are many factors affecting the demand and supply of crops at any given time and place like diverse agro-climatic zones, a climatic phenomenon like a [heatwave](https://www.cbsnews.com/news/india-heat-wave-wheat-prices-soar-climate-change-ukraine-war-supplies/), a  [pest attack](https://www.businesstoday.in/industry/agriculture/story/worst-locust-attack-in-decades-crops-damaged-in-maharashtra-madhya-pradesh-up-rajasthan-259454-2020-05-27), a war like the current [Russia-Ukraine war](https://www.wionews.com/world/how-does-the-russia-ukraine-war-impact-indias-wheat-export-strategy-467097), or a [COVID lockdown](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9235290/) induced disruption. It could also be the [Schumpeterian creative destruction](https://www.econlib.org/library/Enc/CreativeDestruction.html) in the form of a novel [GMO crop](https://www.fda.gov/food/agricultural-biotechnology/how-gmo-crops-impact-our-world) like [Bt-Brinjal](https://theprint.in/india/how-modi-govt-has-scuttled-gm-farming-in-india-by-moving-bt-brinjal-trials-to-states/628682/#:~:text=According%20to%20a,using%20Bt%20brinjal.), [Dhara Mustard Hybrid-11](https://www.thehindu.com/sci-tech/agriculture/explained-the-new-hybrid-variant-of-mustard/article66088166.ece), or innovations in [precision farming](https://indianexpress.com/article/opinion/columns/precision-farming-needs-to-be-promoted-to-get-more-output-with-less-exploitation-of-natural-resources-8131126/). Leveraging AIML(Artificial intelligence and machine learning), Big Data, Cloud computing, robotics, drones, and Low Earth Orbit(LEO) also affects [supply](https://www.technologyreview.com/2020/12/18/1013239/precision-agriculture-farmwise-remote-sensing-salinas/).  
  
One must note here that listing these factors exhaustively is not the point. [Hayek’s Knowledge Problem](https://www.econlib.org/library/Essays/hykKnw.html#:~:text=The%20economic%20problem%20of%20society%20is,given%20to%20anyone%20in%20its%20totality.) makes it impossible in any case. But we should understand that freely adjusting prices arising spontaneously from the interaction of buyers and sellers will [accurately convey the relevant information](https://www.econlib.org/library/Essays/hykKnw.html#:~:text=The%20mere%20fact,in%20the%20process.) for the concerned crop and enable market coordination. This was Hayek’s seminal insight.  
  
Hence, the CACP’s calculation to arrive at an MSP, is only upending and at best poorly replicating the discovery function that prices in a spontaneously ordered market transaction enable. It’s the discovery process of transacting in the market by which participants and entrepreneurs, in this case, farmers, learn and correct errors, discover novel and better ways of organizing economic activity to satisfy their desired functions optimally, and ensure the most efficient allocation of scarce resources. 

MSP  subverts the role of the entrepreneur. It’s the entrepreneur who exercises judgment through their commitment and action to [bring novel solutions to the market despite the uncertainty of profits](https://mises.org/wire/rising-importance-austrian-school-entrepreneurs#:~:text=In%20Austrian%20economics,comprehend%20entrepreneurial%20judgment.). In essence, the entrepreneur invests the capital goods at his disposal based on his best guess of the subjective value of that particular good a consumer in the future may perceive. The profits or losses in the future signal the entrepreneur about the quality of his decisions. This makes him course-correct subsequently as further knowledge is gathered by market operations. For this reason, the Austrian economists [Joseph Schumpeter](https://www.econlib.org/library/Enc/bios/Schumpeter.html#:~:text=Indeed%2C%20Schumpeter%20was,process%20of%20invention.) and [Israel Kirzner](https://www.econlib.org/library/Enc/bios/Kirzner.html#:~:text=Kirzner%E2%80%99s%20view%20is,on%20this%20alertness.) regard the entrepreneur as the central hero of the Austrian school.

MSP along with subsidized inputs, and restrictions on sale/purchase completely distorts the entrepreneurial functioning of a farmer by providing incorrect ‘signaling’.A simple glance at the [difference in market prices and MSP](https://indianexpress.com/article/opinion/columns/crops-msp-farmers-income-support-money-transfer-7680783/) of Paddy in Chhattisgarh(Rs 300/quintal) and UP(Rs 200/quintal) in Nov 2020 indicates the problem.  
 

Government-induced price distortions through MSP further lead to [food inflation](https://www.downtoearth.org.in/news/agriculture/msp-on-crops-has-major-impact-on-inflation-rbi-61489#:~:text=RBI%20found%20that%20there%20is%20a%20clear%20impact%20on%20inflation%20due%20to%20MSP.%20It%20also%20states%20that%20the%20impact%20gets%20stronger%20as%20government%20assures%20procurement.) while excess [grains rot](https://www.indiatoday.in/india/story/in-6-years-over-40-000-tonnes-of-food-grains-damaged-in-fci-godowns-1696650-2020-07-03) in FCI stores and are [exported](https://economictimes.indiatimes.com/news/economy/foreign-trade/india-exported-1-8-million-tonnes-wheat-to-several-countries-since-ban-food-secretary-sudhanshu-pandey/articleshow/92471779.cms?from=mdr#:~:text=Stating%20that%20India,security%2C%20he%20said.) as ‘aids’ due to overflowing granaries. In addition, inadequate procurement machinery limits MSP’s benefits, as seen in the case of [tur dal](https://scroll.in/article/869545/case-of-tur-dal-farmers-shows-that-hiking-minimum-support-price-wont-help-if-implementation-is-poor) in 2018. It wrongly encourages farmers in drought-prone areas to cultivate water-intensive crops like [sugarcane](https://timesofindia.indiatimes.com/city/pune/sugarcane-cultivation-in-state-on-an-18-year-high/articleshow/66396103.cms#:~:text=Sources%20in%20the,official%20told%20TOI.) and [paddy](https://indianexpress.com/article/explained/punjab-groundwater-crisis-what-it-will-take-to-move-from-paddy-to-maize-6140351/#:~:text=As%20the%20discussion,area%20under%20maize.)\], depleting the water table when [substitute water-efficient crops could be grown](https://www.reuters.com/article/india-rice-hunger-idINKBN1JV25E). Price signaling aberrations also explain why [protein production](https://www.jstor.org/stable/44685881) in India is not responding to changing consumption patterns of Indians. Entrepreneurial discovery guided by prices would have easily course-corrected these anomalies and created many other opportunities that only an entrepreneur’s discerning eye can see.

  
Interestingly, in 2020, the Haryana State Government launched the [Mera Pani, Meri Virasat](https://theprint.in/economy/why-haryanas-plan-to-move-farmers-away-from-paddy-and-wheat-is-floundering/606179/) program. To address the depleting water tables in the state, farmers were offered Rs 7000/acre of diversified crops. The situation was so severe that [81 blocks](https://www.tribuneindia.com/news/archive/haryana/save-water-drive-in-81-dark-zone-blocks-799634) were on the [dark zone](https://www.lawinsider.com/dictionary/dark-zone#:~:text=Dark%20Zone%C2%A0means%20those%20areas%20of%20the%20state%20where%20the%20ground%20water%20exploitation%20is%20extremely%20high%20and%20are%20notified%20for%20protection%20by%20the%20State%20Government%20from%20time%20to%20time%20as%20provided%20for%20in%20Schedule.) list with restrictions on groundwater extraction.  

After all, Haryana farmers would have planted agro-climatically suitable and financially viable crops like coarse grains, cereals and pulses anyway if there was no MSP. It was a misplaced MSP policy that led to paddy cultivation in the first place. Having realized its mistake, the state government rightly wants the farmers to shift to sustainable alternatives that are easier on the water table. A higher MSP could have incentivized a switch to an alternate crop, and there were [demands for that from some corners](https://theprint.in/economy/why-haryanas-plan-to-move-farmers-away-from-paddy-and-wheat-is-floundering/606179/#:~:text=%E2%80%9CThe%20government%20doesn%E2%80%99t%20procure%20crops%20such%20as%20vegetables%2C%20pulses%20and%20oilseeds%20if%20we%20replace%20paddy%20and%20grow%20them.%20This%20makes%20diversification%20unviable%20for%20us%2C%E2%80%9D%20said%20Mangal%20Dhull%2C%20a%20farmer%20from%20Sirsa.). However, the State Government wisely allowed farmers to take a call based on the market prices. The Rs.7000/acre subsidy for diversified crops was the State Government trying to counter the distortions of the Union Government’s MSP policy.  
  
Even though distortions in the form of subsidized inputs, electricity, export restrictions, etc still plague Indian farming and Haryana farmers in particular, adherents of the Austrian school can take comfort from the fact for now that entrepreneurial discovery is being encouraged, and that prices are being honored in a limited way in this state!

  
Clearly, the lesson to be taken from all this is what the Indian policymaker [Vijay Kelkar has succinctly stated](https://books.google.co.in/books?id=2Sm-DwAAQBAJ&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false):  
  
“The policymaker should have no opinion on prices and should not try to control them.”

Read More: [Empowering working women in India with PoSH Act](https://spontaneousorder.in/empowering-working-women-in-india-with-the-posh-act/)

* * *

**About Abhimanyu Gupta**

Abhimanyu is an Electronics & Instrumentation engineer by training. He earlier worked in the Analog VLSI industry and is currently dabbling in the drone startup space. Football and Chole Bhature are what he lives for. The field of Economics and Public Policy fascinates him. Playing the piano or flute, and reading non-fiction are his hobbies.

## Empowering Working Women in India with the PoSH Act

Original: https://www.spontaneousorder.in/p/empowering-working-women-in-india-with-the-posh-act

Author: Spontaneous Order

Published: 2022-11-02T14:57:11.000Z

Topics: posh-act, workplace-harassment, women-empowerment, labour-law

> Overview It wasn’t until recently that Indian women were given the freedom to leave the house and work for a living. Their freedom, however, did not necessarily guarantee their safety. Bhanwari Devi, a social worker prevented an infant girl from marryi.

**Summary:**

The post recounts how the 1992 Bhanwari Devi gang-rape incident spurred the Supreme Court's 1997 Vishaka Guidelines, leading to the 2013 PoSH Act that criminalizes workplace sexual harassment—defined broadly to include physical, verbal, or written acts without consent—and mandates Internal Complaints Committees (ICCs) and Local Complaints Committees (LCCs). From a classical-liberal lens emphasizing individual rights to life, equality, and natural justice, the Act fills a legislative void but falters in implementation: it excludes non-work social settings, remains women-only (despite hearing rights for men/transgender), and fails the unorganized sector employing 95% of female workers, with only 29% of districts having LCCs. Biases in ICCs, societal stigma, and poor state monitoring undermine redressal. Recommendations urge proactive compliance via awareness programs, online portals like shebox for oversight, bi-annual refresher courses, self-defense training, 'Feel like Family' mental health teams, victim right to suspend work without pay loss (as in German law), professional registration of ICC/LCC members, and convergence with Companies Act 2013 and Criminal Law Act 2018. Effective enforcement, despite higher reporting costs, promises safer workplaces and empowers women through robust rule of law.

**Key points:**

- PoSH Act protects women via broad workplace definition and consent focus but excludes non-work social harassment and remains gender-specific.
- 95% of India's female workforce in unorganized sector largely unprotected, with only 29% districts having LCCs.
- Recommendations include awareness training, online complaint portals, mental health support, and statutory convergence for oversight to ensure natural justice and effective redressal.

**By Avantika Kalra**

* * *

**Overview** 

It wasn’t until recently that Indian women were given the freedom to leave the house and work for a living. Their freedom, however, did not necessarily guarantee their safety. *Bhanwari Devi,* a social worker prevented an infant girl from marrying but was gang-raped in retaliation. This tragic incident happened in 1992, which publically showcased the hostility women encounter routinely. This event ultimately led to the establishment of the Vishaka Guidelines issued by the Supreme Court of India in a 1997 milestone [judgment](http://www.nitc.ac.in/app/webroot/img/upload/546896605.pdf).

**Judicial Precedent to Legislative Foundation** 

The SC ruling gave an enforceable judicial order to fill a legislative void. Finally, the Indian Parliament passed the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) [Act](https://legislative.gov.in/sites/default/files/A2013-14.pdf) in 2013 to criminalise sexual harassment at workplaces. The Act intends to protect women from workplace sexual harassment and ensure that sexual harassment complaints are dealt with effectively. This legislation, commonly known as [PoSH Act](https://poshhelp.in/) superseded the Vishaka Guidelines. 

The Act’s definition of ‘sexual harassment’ encompasses overt and covert sexual behaviour that may be expressed physically, verbally, or in writing. Therefore, ‘consent’ is a key component of the Act. 

**Devil in the Effective Implementation** 

The Act strives to provide every woman with a safe and respectable working environment free from humiliation, thereby securing their fundamental rights to ‘life’ and ‘equality’. However, effective implementation and awareness of the Act’s provisions remain a challenge. 

According to the Act, the incident of sexual harassment must have occurred at the ‘workplace’ for a woman to seek protection under the Act. The legislation offers a [comprehensive definition](https://elearnposh.com/posh-awareness-for-extended-workplace/#:~:text=The%20POSH%20Act%20clearly%20defines,from%20the%20place%20of%20employment%E2%80%9D.) of ‘workplace’ such that an alleged victim can seek redressal for events even outside the designated physical workspaces. However, it does not cover harassment by co-worker in non-work related social/leisure settings. Therefore, this personnel-driven approach is a missed opportunity. 

Furthermore, the Act is not gender-neutral and solely protects women. The PoSH Act allows equal opportunity for hearing men/transgender men as the Internal Complaints Committee (ICC) is legally bound to follow the principles of [natural justice](https://elearnposh.com/posh-judgements/principles-of-natural-justice/). However, the complainants can only be women. Therefore, the Act’s provisions do not apply to men or other genders. Although employers may choose to extend the protection through their organisation-level PoSH policies, this initiative has no statutory backing. Despite this opportunity to offer an inclusive setup, the initiative depends solely on the organisations’ discretion. 

Although the legislation applies to both the organised and unorganised sectors, the poor implementation of the law is an abortive attempt at helping women in the unorganised sector. The informal sector employs over [95%](https://en.gaonconnection.com/95-per-cent-women-workforce-in-india-is-employed-in-the-informal-sector-and-does-not-have-access-to-maternity-benefits/) of the country’s female workers and therefore the majority of the country’s women are [failed](https://theswaddle.com/indias-sexual-harassment-law-fails-94-of-working-women-report/#:~:text=India%20has%20codified%20workplace%20protections,Redressal\)%20\(POSH\)%20Act.) by the security net as intended by the law against sexual harrasment law. Many victims of sexual harassment have been speaking under the MeToo movement, wherein they publically shared their sufferings in the workplace. But women working in the unorganised sector hardly participated, as they’re often subjected to societal stigma, retaliation by the employers, and uncertainty about a drawn-out [legal process](https://timesofindia.indiatimes.com/blogs/foreign-media/for-indian-women-working-as-cooks-and-nannies-no-metoo-moment-nyt/). 

To resolve this, the Act provisions to set up Local Complaints Committees (LCCs) under the District Magistrate’s [office](https://elearnposh.com/local-complaints-committee/). LCC receives and responds to sexual harassment complaints in organisations with fewer than ten employees in unorganised sectors. In organisations where the complaint is against the employer, it receives and responds to  complaints even if these have more than ten employees. However, the execution has been unsatisfactory in how the designated machinery has responded. A study reveals that only [29% of the districts](https://indianexpress.com/article/india/only-29-pc-districts-have-local-committees-to-address-sexual-harassment-at-workplace-5416906/) have local committees to address sexual harassment in the workplace. The LCCs are more powerful than the ICCs of the organised sector because of their closer institutional proximity to the state machinery. In addition, ICC comprises many internal members, leaving room for [biases](https://humanrights.gov.au/our-work/employers/good-practice-guidelines-internal-complaint-processes) and prejudices. However, the lack of seriousness of the state machinery to monitor the effective administration of the Act defeats the purpose.

Finally, sexual harassment is a very personal experience. There is no fair definition of a ‘hostile working environment’. The event of harassment in itself is subject to individual choices and interactions and not a limited locality or geography. The mental and psychological trauma caused can’t and shouldn’t be estimated solely on the grounds of the material evidence the ICC prepares/understands of the incident. 

**Recommendations** 

1.  The first step should be proactive compliance with the Act’s provisions by the relevant agencies. This includes holding awareness programmes, and conducting orientations and training programmes for the LCC and ICC members. Additionally, suitable monitoring and evaluating mechanisms must also be set up for effective implementation. 

2.  Online portals (along the lines of the shebox portal) should be introduced wherein victims can file their complaints against the ICCs and LCCs if these fail to solve the issue. A simple ‘inform your government’ option could be offered so that the victim can raise a ticket of notification to the Ministry as a legally binding yardstick for the Committees. The management of the portals can be outsourced to private entities under the Public Private Partnership model to ensure timely and efficient implementation.

3\. The Ministry should hold bi-annual refresher courses on the relevant operational prescriptions under the Act. These should be mandatorily delivered via the DM’s office to all the local workplaces’ employees. Additionally, self-defense training could also be offered to women workers. 

4.  Often, women workers who’ve faced harassment do not file complaints as they fear or feel pressured by their families’ responses to social abandonment. The Ministry can set up a ‘Feel like Family’ team of mental health and counseling professionals tasked with offering emotional and mental support to struggling women. Having different channels will ensure that the state machinery provides a well-defined support system to the citizens. 

5.  Similar to the [German domestic law](https://cms.law/en/int/expert-guides/cms-expert-guide-on-sexual-harassment-in-the-workplace/germany) concerning sexual harassment at the workplace, in case the ICC fails to provide due redressal to the victim, the victim should have the right to suspend their activities at work without a loss in compensation. 

6.  The professionals at the ICCs and LCCs must be registered with the Ministry of Women and Child Development and the counterpart state-level ministries. For urban workplaces, National and State Commissions of Women for urban workplaces and State Rural Livelihood Missions for rural workplaces  should be empowered to oversee the compliance and case resolutions for cases reported under the Act. They can help with community mobilization and sensitisation to deal with the issues of non-compliance in ICCs and LCs. 

Accordingly, relevant rules (to incorporate and implement the above-mentioned recommendations) in convergence with the [Companies Act, 2013](https://www.mca.gov.in/Ministry/pdf/CompaniesAct2013.pdf) (as administered by the Ministry of Corporate Affairs) and the [Criminal Law Act 2018](https://www.mha.gov.in/sites/default/files/CSdivTheCriminalLawAct_14082018_0.pdf) (as administered by the Ministry of Home Affairs) must be framed for more robust, timely and resources-backed oversight of the said mandates. 

**Conclusion** 

It is encouraging for working women to have legislative backing under the PoSH Act. But it is equally essential to acknowledge that there are various challenges, and opportunities for its effective enforcement. Hence, relevant steps must be taken to ensure the participation of all the stakeholders, matched with efforts taken to improve policy coherence in legislation and implementation. 

This may increase costs of reporting. However, taking action and delivering justice to these women will ensure more positive benefits regarding safer and more secure working conditions for Indian women than without them. 

Read More: [Integrative Medicine – Hope towards Right to Health](https://spontaneousorder.in/integrative-medicine-hope-towards-right-to-health/)

* * *

**About Avantika Kalra**

Avantika Kalra is a graduate with a degree majoring in economics from Indraprastha College for Women, University of Delhi. She is currently pursuing MA Development from Azim Premji University. Her interests lie in the fields of socio-political inclusion of marginalized groups, feminist rights & consultative frameworks for grass root level development interventions. She looks forward to contributing to social causes through the course of her career ahead.

## Integrative Medicine – Hope towards Right to Health

Original: https://www.spontaneousorder.in/p/integrative-medicine-hope-towards-right-to-health

Author: Spontaneous Order

Published: 2022-10-28T16:34:25.000Z

Topics: integrative-medicine, ayush-systems, medical-pluralism, health-policy

> The Covid-19 pandemic has put the healthcare system to the test by exposing its inadequacies. However, it has also provided a chance to build strong health systems. One can enhance the health system by merging resources from several medical systems for ..

**Summary:**

The Covid-19 pandemic exposed India's healthcare inadequacies but offers an opportunity to integrate AYUSH systems (Ayurveda, Yoga, Naturopathy, Unani, Siddha, Homeopathy) with allopathic medicine for a stronger system, as proposed by a Kochi conference advocating a national AYUSH grid for scientific data and accountability. India's doctor-population ratio of 1:1456 falls short of WHO's 1:1000, but including 5.65 lakh AYUSH practitioners alongside allopathic doctors improves it to 1:854, enabling medical pluralism. States deployed AYUSH personnel for Covid-19 duties in care and vaccination centers. Supported by the 2017 National Health Policy, WHO's traditional medicine reports, and bodies like the Central Council for Research in Ayurvedic Sciences paralleling ICMR, integration fosters knowledge sharing. Modern medicine excels in emergencies, infections, and surgery, while Ayurveda emphasizes holistic mind-body treatment via yoga, dietetics, and regimens. The National Medical Commission Act allows bridge courses for AYUSH practitioners as mid-level providers. Preserving each system's uniqueness while combining strengths provides comprehensive care, advancing universal health coverage and SDG goals, despite evidence gaps requiring ongoing debate.

**Key points:**

- Propose national AYUSH grid policy to integrate traditional and allopathic systems with scientific validation.
- Leverage 5.65 lakh AYUSH practitioners to improve doctor-population ratio to 1:854 via medical pluralism.
- Incorporate AYUSH in curricula and bridge courses for holistic care complementing modern emergency treatments.
- Deploy AYUSH infrastructure for Covid-19 and routine healthcare to achieve universal coverage.

**By Prachie Singh**

* * *

The Covid-19 pandemic has put the healthcare system to the test by exposing its inadequacies. However, it has also provided a chance to build strong health systems. One can enhance the health system by merging resources from several medical systems for essential activities. A conference on integrative medicine in Kochi proposed a national policy to integrate the Ayurvedic and allopathic systems of medicine. Ayurveda, Yoga, Naturopathy, Unani, Siddha, and Homeopathy—collectively referred to as AYUSH—are the six Indian medical systems widely used and practiced in India and other Asian nations. The national implementation of the AYUSH grid aims to produce scientific data to improve the scientific accountability of Ayurvedic treatment. The [National Health Policy of 2017](https://www.nhp.gov.in/nhpfiles/national_health_policy_2017.pdf) also strongly emphasized the promotion of integrative medicine. 

The doctor-population ratio in India is [1:1456](https://www.indiabudget.gov.in/budget2020-21/economicsurvey/doc/echapter_vol2.pdf), whereas the WHO recommendation is 1:1000. However, medical pluralism in the country improves this ratio to [1:854](https://pqars.nic.in/annex/257/AU1039.pdf), considering 5.65 lakh AYUSH practitioners in addition to the 80% of registered allopathic doctors. Several states and UTs availed AYUSH personnel for Covid-19 mitigation duties and AYUSH facilities for COVID Care Centers, COVID Health Centers, and Vaccination Centers. Additionally, each system of traditional medicine has research committees like the [Ayurveda Graduate Institute of Teaching and Research](https://itra.ac.in/) and [The Central Council for Research in Ayurvedic Sciences](https://namayush.gov.in/content/central-council-research-ayurvedic-sciences-ccras), comparable to the Indian Council of Medical Research (ICMR) for contemporary medicine. Hence, there is potential for knowledge sharing and synergy between modern medicine and the AYUSH medicine system in healthcare and research. 

Traditional medicine, as [defined](https://www.who.int/news/item/25-03-2022-who-establishes-the-global-centre-for-traditional-medicine-in-india#:~:text=The%20term%20traditional%20medicine%20describes,treat%20physical%20and%20mental%20illness.) by the WHO, includes manual techniques, exercises, spiritual therapies, and medicines derived from plants, animals, and minerals. These are used individually or in combination to maintain health and well-being to prevent, diagnose, and treat physical and mental illness. WHO’s Global [Report](https://apps.who.int/iris/bitstream/handle/10665/312342/9789241515436-eng.pdf?sequence=1&isAllowed=y) on Tradition and Complementary Medicine 2019 recommends combining the best elements of traditional and Complementary Medicine (CAM) to achieve the health goals of the twenty-first century. [Integrated health care](https://www.who.int/docs/default-source/primary-health-care-conference/linkages.pdf) is a collaborative team care approach between various western medicine, traditional therapies, indigenous and CAM health care officers. 

Several states [permitted](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3326870/) Ayurvedic, Sidha, and Unani practitioners to prescribe allopathic medicines under the [Drugs and Cosmetics Rules, 1945.](https://cdsco.gov.in/opencms/export/sites/CDSCO_WEB/Pdf-documents/acts_rules/2016DrugsandCosmeticsAct1940Rules1945.pdf) The [National Medical Commission Act](https://pib.gov.in/newsite/PrintRelease.aspx?relid=192491) provides for a limited license to AYUSH practitioners to become mid-level Community Health Providers after completing a bridge course. Ayurveda emphasizes treating both mind and body to achieve a state of good health through Yoga, Dincharya, and Ritucharya (seasonal regimen), Ahar-Vidhi (Dietetics), and Swashvritta (good health). Contrarily, modern medicine can better manage emergencies (like heart attacks and strokes), accidents, infections, pediatric illnesses, and operative circumstances. Modern and traditional systems must understand and appreciate the benefits of each other and incorporate them into their curricula to practice an integrative approach. 

This integration is a crucial step in maintaining, safeguarding, and revitalizing health. The goal of integration is to preserve the unique characteristics of each system while combining their best practices. An integrative medical system can provide a continuum of care and comprehensive healthcare in India, which will also assist in achieving the Sustainable Development Goal of universal health coverage.

Integrative medicine has both supporters and detractors. There is still a dearth of evidence in support of its scientific claims. Many people have doubts about the efficacy of traditional therapy for back pain because some people respond well to certain treatments while others do not. Modern medicine is quick and follows evidence-based medical procedures. Contrastingly, traditional medicine relies heavily on natural ingredients and how they interact with and cure the body. Practicing integrative medicine is a marathon, not a sprint. Doctors on both sides must discuss and debate the scope of collaboration to provide improved and efficient healthcare in India.

Read more: [Export restrictions impoverish farmers](https://spontaneousorder.in/export-restrictions-impoverish-farmers/)

* * *

**About Prachie Singh**

Prachie Singh is a law graduate from UPES Dehradun and is enrolled as an advocate in Chhattisgarh High Court. Her interest lies in the fields of healthcare, intellectual property rights, and technology law ( AI, FinTech, Cybercrime and Blockchain.) She also enjoys reading and is a part-time photographer.

## Export Restrictions Impoverish Farmers

Original: https://www.spontaneousorder.in/p/export-restrictions-impoverish-farmers

Author: Spontaneous Order

Published: 2022-09-20T10:58:13.000Z

Topics: export-restrictions, agriculture-policy, free-trade, farmer-welfare

> The Directorate General of Foreign Trade (DGFT) prohibited broken rice exports and imposed a 20% export tariff on non-basmati rice from September 9. This ban is due to low rice yield caused by poor rainfall and the Southern Rice Black-streaked Dwarf vir..

**Summary:**

The Indian government's recent prohibition on broken rice exports and 20% tariff on non-basmati rice, justified by low yields from poor rainfall and the Southern Rice Black-streaked Dwarf virus, aims to shield domestic consumers from price rises but impoverishes farmers from a classical-liberal viewpoint. These interventions distort price signals that incentivize production, hinder long-term price stabilization, and treat rural farmers paternalistically unlike urban economic actors. Farmers face planning difficulties for inputs, quantities, and time due to arbitrary restrictions; India's exporter reputation suffers, as seen in Bangladesh's shift during the 2020 onion ban and global backlash to wheat curbs; and incomes fall, contradicting the goal to double farmers' incomes. An OECD-ICRIER study quantifies export controls as implicit taxation totaling Rs 45 lakh crore from 2000-01 to 2016-17 (Rs 2.65 lakh crore annually), with onion rules changing seven times in 2020 alone. The 2018 Agriculture Export Policy called for limiting bans to essential commodities, high-level committee decisions, and WTO compliance, but these remain unimplemented, perpetuating uncertainty and eroding farmer freedom and wellbeing. A stable, minimally interventionist trade policy is essential for reliable exporting and farmer prosperity.

**Key points:**

- Export restrictions distort price signals, making production planning impossible for farmers who must predict demand, prices, and costs.
- Frequent bans damage India's reputation as a reliable exporter, prompting buyers like Bangladesh to source elsewhere during onion and wheat curbs.
- Government export controls impose implicit taxation worth Rs 45 lakh crore on farmers from 2000-01 to 2016-17, undermining income-doubling goals.
- The 2018 Agriculture Export Policy's reforms—limiting bans, committee oversight, WTO alignment—have not been enacted, perpetuating trade uncertainty.

**By Arjun Krishnan**

* * *

The Directorate General of Foreign Trade (DGFT) prohibited broken rice exports and imposed a [20% export tariff](https://www.business-standard.com/article/economy-policy/govt-imposes-20-duty-on-rice-exports-of-various-grades-122090801093_1.html) on non-basmati rice from September 9. This ban is due to low rice yield caused by poor rainfall and the Southern Rice Black-streaked Dwarf virus, which stunts paddy crops. 

These restrictions aim to protect domestic consumers from rising prices. While these measures may lower prices in the short run, they distort signals that higher prices send to increase production. These interventions would also hurt price stabilisation in the long run. Further, negative impacts on farmers will be inevitable. 

Such restrictions cause a variety of problems. First, they make it difficult for farmers to plan production. Second, they hurt India’s image as a reliable exporter. Third, they lower farmer income. 

Let’s consider each of these issues. Farmers struggle to plan for production. Like any other entrepreneur, a farmer needs to plan their production cycle. They decide on the inputs to buy, goods to produce, quantity  to produce, and how to prioritise their time. These decisions depend on expected demand, expected price, current costs, and a host of other factors. Making such  decisions becomes far more challenging, if not impossible, when the government arbitrarily introduces restrictions on how people can ply their trade. Such sudden changes in the trade environment are uncommon for other economic participants. But, while the government treats the urban non-agricultural population of India as rational economic actors capable of making decisions about their economic lives, it treats the agricultural population of Bharat as incapable of doing so. 

India is not viewed as a reliable exporter. The [Agriculture Export Policy, 2018](https://commerce.gov.in/wp-content/uploads/2020/02/NTESCL636802085403925699_AGRI_EXPORT_POLICY.pdf) attributes India’s low share in international exports to its “inward-looking policies aimed at food security and price stabilisation”. It recognises that a stable and predictable trade policy, with limited interference from the state, is required to send a positive signal to the global market. However, while the policy vision envisages a freer trade environment, this has not translated into action. The lack of trade freedom hurts importer confidence in India as a supplier. For instance, during the onion export ban of 2020, Bangladesh expressed its [disapproval](https://theprint.in/diplomacy/bangladesh-asks-india-to-resume-onion-exports-upset-over-breach-of-unwritten-understanding/504489/) against the move and decided to import onions from Egypt and Turkey. There was also widespread global [pushback](https://www.kuwaittimes.com/heatwave-hit-india-irks-g7-with-ban-on-wheat-export/) against India’s decision to restrict wheat exports on May 13. The frequent usage of such policy instruments will hurt India’s image as a reliable exporter, and importers may move to other markets. As a consumer, would you be comfortable relying on a store that frequently and unpredictably stops selling the things you want to buy? 

One aim of the Modi government is to double farmers’ income. This oft-repeated slogan cannot be translated into reality if the government makes it more difficult for farmers to get higher prices for their goods. An OECD and ICRIER study documented that the government’s control over agri-exports was a form of implicit taxation. The report estimates that this implicit taxation amounted to Rs 2.65 lakh crores per annum between 2000-01 and 2016-17, totalling Rs [45 lakh crore](https://www.financialexpress.com/opinion/from-plate-to-plough-over-rs-45-lakh-crore-plundered-from-farmers/1449874/). In 2020 alone, the rules on the export of onions changed seven times. While the 2018 export policy shows some political will to overhaul this system, it has not slowed down export restrictions and trade uncertainty. Such restrictions will not help in doubling farmers’ incomes; they will only double farmers’ woes. 

The 2018 policy suggests limiting these interventions with three changes. First, bans should be limited to fewer commodities essential for food security. Second, a high-level committee should decide on a ban. Finally, such a decision must be compatible with our WTO obligations. None of these policy goals have translated to reality. Instead the government hurts farmer choice, freedom, and wellbeing.

*Read more: [A fundamental problem of democracies: What constitutes good and bad freebies?](https://spontaneousorder.in/a-fundamental-problem-of-democracies-what-constitutes-good-and-bad-freebies/)*

* * *

**About Arjun Krishnan**

Arjun Krishnan is a political science graduate from Ashoka University and has a master's degree from Warwick University. Prior to joining CCS, he interned with the Cato Institue and the Institute of Economic Affairs. The ideal of freedom, both economic and social, are of great importance to him. He enjoys travelling, reading books, and listening to podcasts.

## A fundamental problem of democracies: What constitutes good and bad freebies?

Original: https://www.spontaneousorder.in/p/a-fundamental-problem-of-democracies-what-constitutes-good-and-bad-freebies-2

Author: Spontaneous Order

Published: 2022-09-01T11:43:52.000Z

Topics: subsidies, freebies, democracy, agricultural-subsidies

> Chief Justice N V Ramana has, astonishingly, waded into the controversy of political parties promising endless freebies that could plunge countries into disaster. He says political parties do not want to curb such excesses, so a specialised body should ..

**Summary:**

In liberal democracies, markets drive efficiency and GDP growth but require political decisions on taxation and subsidies to achieve desirable income distribution, with parties competing to convince voters on the optimal mix of 'revadis' (wasteful freebies) and 'jalebis' (meritorious subsidies). Chief Justice Ramana's call for a specialised body to curb excessive freebies is misguided, as this lies in the political domain of voters and parties, not judiciary or technocrats. Economists estimate total subsidies fell from 12.9% of GDP in 1987-88 to 10.28% in 2015-16, with non-merit subsidies (revadis) at 5.7% of GDP, 4.1% from states. Key revadis include free power and canal water to farmers, causing aquifer depletion and inefficient crops; cheap urea leading to soil ruin and smuggling; farmer electricity dues waivers bankrupting discoms with ₹2.5 trillion arrears; and universal food subsidies where better-off benefit. Jalebis encompass expanded police-judicial systems, quality education, public health, infrastructure, and corruption-free safety nets. Democracy risks myopic freebie races destroying economies like Sri Lanka's, but must be resolved politically, echoing Juncker's quip on knowing what to do but fearing electoral backlash.

**Key points:**

- Political parties and voters, not judiciary or technocrats, must decide the mix of wasteful revadis and meritorious jalebis in subsidies.
- Non-merit subsidies total 5.7% of GDP, with states accounting for 4.1%, including free farmer power, cheap urea, and electricity dues waivers causing ₹2.5 trillion arrears.
- Merit subsidies like quality education, public health, police-judicial expansion, and infrastructure should be prioritised, potentially funded by cutting revadis.
- Free power and urea subsidies encourage water wastage, inefficient pumps, soil degradation, and smuggling.
- Democracy enables right priorities but risks economic ruin through competitive freebies, as in Sri Lanka.

**By Swaminathan SA Aiyer**

* * *

Chief Justice N V Ramana has, astonishingly, waded into the controversy of political parties promising endless freebies that could plunge countries into disaster. He says political parties do not want to curb such excesses, so a specialised body should tackle the problem. Sorry, subsidies lie squarely in the province of politics, not the judiciary or technocrats. Voters and political parties must decide what freebies to have.

Last month, Narendra Modi criticised the culture of revadis. These are north Indian sweets, and in colloquial jargon mean freebies. Modi said the myopic revadi culture in Delhi and Punjab – both ruled by the Aam Aadmi Party (AAP) – lavished scarce funds on freebies at the expense of long-term investments in infrastructure and education that alone could bring prosperity. Arvind Kejriwal fired back that the BJP distributed revadis to contractors, whereas he distributed them to the people.

**The Best Party Mix**  
Subsidies lie at the heart of liberal democracy. Markets can spur high efficiency and GDP, but cannot create a desirable income distribution. A vital function of liberal politics is to decide whom and what to tax, and whom and what to subsidise. Different parties have to convince voters on the best mix.

Many freebies can rightly be castigated as revadis, but many others are highly desirable, and can be hailed as jalebis. Opinions will differ on what are revadis or jalebis. But while criticising excessive revadis, don’t lose sight of insufficient jalebis. Indeed, the best reason for cutting some freebies (revadis) may be to finance other freebies (jalebis).

Economists Sudipto Mundle and Satadru Sikdar recently estimated total subsidies – which they defined as the difference between cost of providing goods and services and sums recovered from users – had fallen from 12.9% of GDP in 1987-88 to 10.28% in 2015-16. These included subsidised schooling and primary health, which some would not regard as subsidies. It excluded transfers that many would regard as subsidies, such as the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) grant to farmers, or concessional prices and interest rates for favoured beneficiaries. However, the Mundle-Sikdar model is a reasonable starting point.

The economists recognise the difference between non-merit subsidies (revadis) and merit subsidies (jalebis). They estimate non-merit subsidies at a whopping 5.7% of GDP, of which 4.1% comes from state governments, which are the chief culprits and most in need of reform.

What are the key revadis? I would begin with free power to farmers. This encourages wasteful pumping that destroys aquifers, discourages the replacement of inefficient by efficient pumpsets, and encourages inappropriate water-guzzling crops like paddy and sugarcane in low rainfall areas like Punjab and Maharashtra. Free canal water has similar evils. Many canal systems are moribund, since bankrupt irrigation departments have no funds for maintenance or de-siltation.

Urea is supplied to farmers at a quarter of the international price. Phosphoric and potassic fertilisers are less subsidised. So, farmers are induced to use excessive urea and insufficient other nutrients, leading ultimately to the ruination of farm soil. Urea is made so cheap that large quantities are smuggled to neighbouring countries or diverted to chemical industries.

**Sell at MSP, Buy Back at PDS**  
Cancelling electricity dues of farmers is a terrible revadi that discourages honest folk from paying bills. Electricity subsidies to farmers and urban consumers have bankrupted electricity distribution companies in most states, which have payment arrears of ₹2.5 trillion to suppliers. High rail freight rates are used to subsidise passenger fares, another revadi that ends up taxing and discouraging exports.

Sometimes revadis and jalebis are mixed together. The Food Security Act provides wheat and rice at ₹2 and ₹3 per kg. What goes to poor households is a jalebi. But the scheme covers two-thirds of the population, and what goes to the better-off is a revadi. Some farmers sell their grain at the high procurement price, get it back as subsidised grain for consumption, but re-sell the same to procurement agencies.

Outright grants to farmers like PM-KISAN are revadis. There is no logical reason for preferring farmers over others. But there is an excellent political reason – they constitute an important vote bloc. Many other revadis also reward vote blocs.

What are the key jalebis? I would stress expanding the volume and quality of the police-judicial system to improve safety and justice for all. Quality education is a badly needed jalebi, and public health is a little recognised jalebi. Good infrastructure provides livelihood opportunities to those most lacking them. Corruption- free safety nets for those hit by misfortune are jalebis.

There are grey areas. Kejriwal justifies modest amounts of free electricity for urban consumers as meeting basic needs. But direct cash transfers to the needy would achieve the same result while excluding the undeserving – such as myself.

Democracy helps countries choose the right priorities. But it can also spur myopic competition in freebies that destroys economies, as in Sri Lanka. Former European Commission president Jean-Claude Juncker put it pithily, ‘We all know what is to be done. What we don’t know is how to get re-elected after doing it.’ That is a fundamental problem of democracy. But it has to be resolved by political parties and voters, not judicial or technocratic commissions.

*This article was originally published by [The Economic Times](https://economictimes.indiatimes.com/opinion/et-commentary/a-fundamental-problem-of-democracies-what-constitutes-good-and-bad-freebies/articleshow/93462745.cms) on August 10, 2022.*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## A fundamental problem of democracies: What constitutes good and bad freebies?

Original: https://www.spontaneousorder.in/p/a-fundamental-problem-of-democracies-what-constitutes-good-and-bad-freebies

Author: Spontaneous Order

Published: 2022-09-01T10:34:25.000Z

Topics: freebies, subsidies, fiscal-policy, democracy

> Chief Justice N V Ramana has, astonishingly, waded into the controversy of political parties promising endless freebies that could plunge countries into disaster. He says political parties do not want to curb such excesses, so a specialised body should ..

**Summary:**

In liberal democracies, subsidies are essential for addressing income distribution that markets alone cannot fix, with political parties competing to convince voters on the optimal mix of undesirable 'revadis' (non-merit subsidies) and desirable 'jalebis' (merit subsidies). Chief Justice Ramana's call for a specialized body to curb excessive freebies is misguided, as this lies in the political domain of voters and parties, not judiciary or technocrats. Modi criticized AAP's freebies in Delhi and Punjab for sacrificing infrastructure and education investments, while Kejriwal countered that BJP favors contractors. Economists estimate total subsidies fell from 12.9% of GDP in 1987-88 to 10.28% in 2015-16, with non-merit subsidies at 5.7% of GDP, mostly from states (4.1%). Key revadis include free farmer electricity causing aquifer depletion, cheap urea leading to soil ruin and smuggling, farmer electricity dues waivers bankrupting discoms (₹2.5 trillion arrears), and universal food subsidies benefiting the well-off. Jalebis encompass expanded police-judiciary, quality education, public health, infrastructure, and corruption-free safety nets. Democracy risks myopic freebie competition as in Sri Lanka, but must resolve it politically, echoing Juncker's quip on knowing what to do but fearing electoral backlash.

**Key points:**

- Non-merit subsidies (revadis) total 5.7% of GDP, with states contributing 4.1%, demanding reform.
- Free electricity to farmers depletes aquifers, discourages efficient pumps, and promotes water-guzzling crops.
- Subsidized urea at a quarter of international prices causes overuse, soil degradation, and smuggling.
- Merit subsidies (jalebis) like quality education, public health, and judicial expansion are vital for prosperity.
- Voters and political parties, not judicial or technocratic bodies, must decide the subsidy mix.

**By Swaminathan SA Aiyer**

* * *

Chief Justice N V Ramana has, astonishingly, waded into the controversy of political parties promising endless freebies that could plunge countries into disaster. He says political parties do not want to curb such excesses, so a specialised body should tackle the problem. Sorry, subsidies lie squarely in the province of politics, not the judiciary or technocrats. Voters and political parties must decide what freebies to have.

Last month, Narendra Modi criticised the culture of revadis. These are north Indian sweets, and in colloquial jargon mean freebies. Modi said the myopic revadi culture in Delhi and Punjab – both ruled by the Aam Aadmi Party (AAP) – lavished scarce funds on freebies at the expense of long-term investments in infrastructure and education that alone could bring prosperity. Arvind Kejriwal fired back that the BJP distributed revadis to contractors, whereas he distributed them to the people.

**The Best Party Mix**  
Subsidies lie at the heart of liberal democracy. Markets can spur high efficiency and GDP, but cannot create a desirable income distribution. A vital function of liberal politics is to decide whom and what to tax, and whom and what to subsidise. Different parties have to convince voters on the best mix.

Many freebies can rightly be castigated as revadis, but many others are highly desirable, and can be hailed as jalebis. Opinions will differ on what are revadis or jalebis. But while criticising excessive revadis, don’t lose sight of insufficient jalebis. Indeed, the best reason for cutting some freebies (revadis) may be to finance other freebies (jalebis).

Economists Sudipto Mundle and Satadru Sikdar recently estimated total subsidies – which they defined as the difference between cost of providing goods and services and sums recovered from users – had fallen from 12.9% of GDP in 1987-88 to 10.28% in 2015-16. These included subsidised schooling and primary health, which some would not regard as subsidies. It excluded transfers that many would regard as subsidies, such as the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) grant to farmers, or concessional prices and interest rates for favoured beneficiaries. However, the Mundle-Sikdar model is a reasonable starting point.

The economists recognise the difference between non-merit subsidies (revadis) and merit subsidies (jalebis). They estimate non-merit subsidies at a whopping 5.7% of GDP, of which 4.1% comes from state governments, which are the chief culprits and most in need of reform.

What are the key revadis? I would begin with free power to farmers. This encourages wasteful pumping that destroys aquifers, discourages the replacement of inefficient by efficient pumpsets, and encourages inappropriate water-guzzling crops like paddy and sugarcane in low rainfall areas like Punjab and Maharashtra. Free canal water has similar evils. Many canal systems are moribund, since bankrupt irrigation departments have no funds for maintenance or de-siltation.

Urea is supplied to farmers at a quarter of the international price. Phosphoric and potassic fertilisers are less subsidised. So, farmers are induced to use excessive urea and insufficient other nutrients, leading ultimately to the ruination of farm soil. Urea is made so cheap that large quantities are smuggled to neighbouring countries or diverted to chemical industries.

**Sell at MSP, Buy Back at PDS**  
Cancelling electricity dues of farmers is a terrible revadi that discourages honest folk from paying bills. Electricity subsidies to farmers and urban consumers have bankrupted electricity distribution companies in most states, which have payment arrears of ₹2.5 trillion to suppliers. High rail freight rates are used to subsidise passenger fares, another revadi that ends up taxing and discouraging exports.

Sometimes revadis and jalebis are mixed together. The Food Security Act provides wheat and rice at ₹2 and ₹3 per kg. What goes to poor households is a jalebi. But the scheme covers two-thirds of the population, and what goes to the better-off is a revadi. Some farmers sell their grain at the high procurement price, get it back as subsidised grain for consumption, but re-sell the same to procurement agencies.

Outright grants to farmers like PM-KISAN are revadis. There is no logical reason for preferring farmers over others. But there is an excellent political reason – they constitute an important vote bloc. Many other revadis also reward vote blocs.

What are the key jalebis? I would stress expanding the volume and quality of the police-judicial system to improve safety and justice for all. Quality education is a badly needed jalebi, and public health is a little recognised jalebi. Good infrastructure provides livelihood opportunities to those most lacking them. Corruption- free safety nets for those hit by misfortune are jalebis.

There are grey areas. Kejriwal justifies modest amounts of free electricity for urban consumers as meeting basic needs. But direct cash transfers to the needy would achieve the same result while excluding the undeserving – such as myself.

Democracy helps countries choose the right priorities. But it can also spur myopic competition in freebies that destroys economies, as in Sri Lanka. Former European Commission president Jean-Claude Juncker put it pithily, ‘We all know what is to be done. What we don’t know is how to get re-elected after doing it.’ That is a fundamental problem of democracy. But it has to be resolved by political parties and voters, not judicial or technocratic commissions.

This article was originally published by [The Economic Times](https://economictimes.indiatimes.com/opinion/et-commentary/a-fundamental-problem-of-democracies-what-constitutes-good-and-bad-freebies/articleshow/93462745.cms) on August 10, 2022.

*Read more: [The Science and the Law Behind the Genetically Modified (GM) Regulatory Logjam](https://spontaneousorder.in/the-science-and-the-law-behind-the-genetically-modified-gm-regulatory-logjam/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## The Science and the Law Behind the Genetically Modified (GM) Regulatory Logjam

Original: https://www.spontaneousorder.in/p/the-science-and-the-law-behind-the-genetically-modified-gm-regulatory-logjam

Author: Spontaneous Order

Published: 2022-08-05T16:15:26.000Z

Topics: gm-crops, agricultural-regulation, judicial-overreach, biotech-safety

> Abstract: Bt Cotton is the only GM crop that has been approved for commercial use in the country in the year 2002. Since then, all the other GM varieties have been entangled in a sea of bureaucratic scrutiny. The core discussion of this article is Aruna..

**Summary:**

The article critically examines the Aruna Rodrigues v. Union of India (2011) Supreme Court case, which has stalled GM crop approvals in India since Bt Cotton's 2002 commercialization, the only approved GM crop. Rodrigues bypassed the National Green Tribunal by alleging GEAC's regulatory flaws and independence, leading to court-imposed 2007 guidelines like 200-meter separation distances and 0.01% LoD tests, criticized as excessively precautionary with little evidence of rampant contamination—contrasting EU's 0.9% threshold. A 2012 Technical Expert Committee interim report recommended a 10-year moratorium on field trials, challenged by industry and government for bias; the final report echoed an indefinite moratorium, dissented by Dr. R.S. Paroda and backed by NAAS. Empirical science counters anti-GM claims: WHO, US FDA, Health Canada affirm GM foods' safety, with no biodiversity harm observed in Japan's 15-year GM rapeseed/soybean study. Bt Brinjal trials resumed only in late 2021. From a classical-liberal view, the case exemplifies judicial overreach on scientific matters, deepening divisions amid farmer protests and natural farming pushes; regulation should rest with GEAC, not courts.

**Key points:**

- Supreme Court's 2007 guidelines imposed overly stringent measures like 200m separation and 0.01% LoD, lacking evidence and hindering GM field trials.
- TEC's 2012 interim report called for a 10-year moratorium on GM crops due to regulatory flaws, opposed by biotech industry and NAAS.
- Global scientific consensus, including WHO and studies from US, Canada, Japan, confirms GM crops pose no greater risks to health or biodiversity than non-GM.
- Aruna Rodrigues case bypassed NGT, prolonging regulatory logjam; GEAC should handle approvals scientifically, not courts.

**By Manickam Valliappan**

* * *

**Abstract**:

Bt Cotton is the only GM crop that has been approved for commercial use in the country in the year 2002. Since then, all the other GM varieties have been entangled in a sea of bureaucratic scrutiny. The core discussion of this article is *[Aruna Rodrigues and Others v. Union of India and Others](https://indiankanoon.org/doc/17826198/)* where the petitioner pushed for a complete ban on introducing GM in India, without raising their complaints to the appellate authority for GM-related issues. Why the Supreme Court entertained this petition is not clear till date, but in 2012, a Technical Expert Committee appointed by the Court for this matter called for a 10-year moratorium on field trials for GM crops in its interim report. It was only in late 2021 that field trials for two varieties of Bt Brinjal were permitted again.

In this piece, we flesh out and critically analyse the arguments laid out in *Aruna Rodrigues and Others v. Union of India and Others*. Given the recent protest in [Ahmednagar](https://theprint.in/opinion/i-am-launching-a-civil-disobedience-movement-against-moratorium-on-gm-crops-heres-why/833654/) by farmers against the restrictions on GM crops and the government’s push for [chemical-free natural farming](https://www.thehindubusinessline.com/economy/agri-business/budget-gives-a-push-for-chemical-free-natural-farming/article64961527.ece), this piece holds value in understanding how the regulatory approvals of GM are held up in the Court and for what reason.   

**Introduction:**

The cultivation of genetically modified (GM) crops and the regulatory mechanism governing its approvals has been a subject of extensive debate and litigation in India. Environmental and agricultural activists have often challenged the field trials and approvals of GM crops through various Public Interest Litigations (PIL).

At the heart of the legal discussion surrounding GM crops has been the [Aruna Rodrigues and Others v. Union of India and Others 2011 case](https://indiankanoon.org/doc/17826198/), which has been pivotal in unraveling the roots of anti-GM thought. Rodrigues challenged the release of GM crops before the Supreme Court in 2006. Since Rodrigues broadly contended that the Genetic Engineering Appraisal Committee (GEAC) did not lay out proper guidelines and questioned its independence in granting approvals, the case did not fall under the jurisdiction of the National Green Tribunal (NGT), the appellate authority for challenging GEAC’s approvals. For instance, in the case of Dr. K. Thiruthanikachalam v. Union of India and Others [2010](https://indiankanoon.org/doc/204380/), the petitioner had approached the High Court against the GEAC’s approval of Bt Brinjal but was redirected to NGT, the appellate authority. The court observed that any decision regarding the appeal against GEAC’s approvals first lies with the appellate authority, in this case, the NGT.

Rodrigues argued that planting GM crops contaminated nearby fields and was harmful to public health. In response, to prevent health hazards in the absence of an appropriate regulatory framework, the Supreme Court directed GEAC, the apex body for GM regulation, to withhold all GM approvals.

**The preventative guidelines and its subsequent criticism**:

On 8 May 2007, the Supreme Court laid out a series of guidelines for the GEAC to ensure that neighbouring fields were not contaminated due to GM crops field trials:

-   There should be a distance of at least 200 meters between the trial fields and the neighbouring fields having the same type of cultivation;
    
-   For all field trials, the name of the scientists who will be responsible for all aspects of the trials, along with their other details, should be reported to the GEAC and these trials should be regularly supervised
    
-   Before bringing out the GM material from the greenhouse for conducting field trials, the approved institution should submit validated event specific test protocol at an Limit of Detection (LoD) of a minimum of 0.01% to confirm that no contamination has taken place.
    

But these guidelines laid down by the court have been met with sharp criticism. The distance of separation of 200 meters to prevent gene flow through pollination was criticized for being too high and born out of the assumption that there is rampant contamination between GM and non-GM crops, for which there is little evidence. The LoD was also deemed too low, especially relative to other international precedents such as EU – a precautionary regulator of GM crops – which permits imports with 0.9% GM material. Additionally, the protocols for testing such low LoD levels only exist in sophisticated laboratories, presenting practical difficulties (Rao and Annadana [2014](https://www.researchgate.net/publication/272421715_Genetically_Engineered_Crops_in_India_A_Gordian_knot_needing_an_Alexandrian_solution)).

The Supreme Court added that GM crops that were already commercially approved must not be further modified to create new species. Due to the commercial nature of these existing crops, the Court also mentioned that the GEAC must also account for their toxicity and potential to induce allergy in organic crops.

**The contentious panel report of the Technical Expert Committee (TEC)**:

Despite the guidelines, in 2012, Aruna Rodrigues contested that the environmental release of GM crops due to improper scientific examination was threatening biosafety. She sought to stop all forms of GM release through imports, manufacture, and other means. The Supreme Court then appointed a six-member Technical Expert Committee (TEC) to look into the biosafety of GM crops, composed of experts on environmental safety, gene toxicology, food safety, nutritional sciences, plant biotechnology genetics and agricultural sciences.

On 7 October 2012, the TEC released an interim report calling for a 10-year long moratorium on GM crops given the flaws within the existing regulatory system. This report was challenged by the biotech industry, which alleged that it lacked focus and relied on scientific evidence from selected sources (PTI [2012](https://economictimes.indiatimes.com/news/economy/agriculture/panel-report-on-gm-crops-lacks-focus-biotech-companies/articleshow/16882279.cms?from=mdr)).

The interim [report was challenged by the Union Government](https://main.sci.gov.in/jonew/bosir/orderpdfold/1623031.pdf) on the count of missing representation from Plant Genetics and Agricultural Sciences. The Court then appointed Dr. R. S Paroda as the Agriculture Ministry’s nominee.

TEC’s final report called for an indefinite moratorium on the release of GM crops till the flaws in the regulatory system were addressed (TEC [2013](http://indiagminfo.org/wp-content/uploads/2013/08/TEC-Main-Report-2.pdf)). But Dr. Paroda had a dissenting opinion. He pushed for the continuation of GM field trials by emphasizing on the role of biotechnology in India’s agricultural development. Dr. Paroda’s report was backed by the National Academy of Agriculture Sciences (NAAS), an agricultural body of 500 renowned Indian agricultural scientists. The NAAS also condemned the final report of the TEC and alleged that the committee refused to have structured discussions regarding the objections raised by Dr. Paroda (Mukherjee [2013](https://www.business-standard.com/article/economy-policy/scientists-body-criticises-moratorim-on-gm-crops-field-trials-113083100490_1.html)).

**What does the science say?**

Contrary to the claims laid by Rodrigues, empirical evidence elsewhere suggests that the cultivation of GM does not harm biodiversity or human health. Most scientific research studies conclude that GM food is safe for consumption (Norris [2015](https://sitn.hms.harvard.edu/flash/2015/will-gmos-hurt-my-body/)). Food regulators in major developed economies such as the USA and Canada have maintained that GM crops are safe for consumption (Health Canada [2020](https://www.canada.ca/en/health-canada/services/food-nutrition/genetically-modified-foods-other-novel-foods/safety.html); FDA [2020](https://www.fda.gov/media/135279/download)), pointing out that they are no more riskier than their non-GM counterparts. The World Health Organization (WHO) also noted that GM foods currently in the market have passed safety assessments and that no adverse health effects have been observed in the countries where they have been approved (WHO [2014](https://www.who.int/foodsafety/areas_work/food-technology/Frequently_asked_questions_on_gm_foods.pdf)). A study done by the Japanese Ministry of Agriculture also found out that cultivation of GM rapeseed and soybean over a period of 15 years had no effect on surrounding biodiversity (MAFF [2021](https://www.maff.go.jp/j/press/syouan/nouan/attach/pdf/210108-1.pdf); Neo [2021](https://www.foodnavigator-asia.com/Article/2021/02/15/Japan-GM-food-safety-update-Transgenic-soy-rapeseed-have-no-impact-on-biodiversity-even-after-15-years-government-study)).

**Conclusion**:

As of 2022, there have not been any other substantial decisions on the case. While the case has helped bring the GM debate into mainstream political discourse, it has only deepened division on the matter rather than arriving at an objective solution. The continuance of Rodrigue’s case in the Supreme Court remains a mystery since the GEAC was set up for this very purpose: to objectively assess complex scientific questions. The longevity of the case and the lack of progression evokes a key question: do the norms governing GM crops be laid out by the court – or is it a scientific duty that must be carried out by the GEAC?

*This article was originally published in [GNLU Issues in Science, Law, and Ethics](https://gnluisle.wordpress.com/2022/07/08/the-science-and-the-law-behind-the-genetically-modified-gm-regulatory-logjam/) blog on 8 July 2022.*

*Read more: [Empowering Women: Kerala’s Kudumbashree Programme](https://spontaneousorder.in/empowering-women-keralas-kudumbashree-programme/)*

* * *

**About Manickam Valliappan**

Manickam Valliappan is a former Research Assistant with the Centre for Civil Society who is currently engaged in economic and market research.

## Empowering Women: Kerala’s Kudumbashree Programme

Original: https://www.spontaneousorder.in/p/empowering-women-keralas-kudumbashree-programme

Author: Spontaneous Order

Published: 2022-08-02T13:09:48.000Z

Topics: women-empowerment, decentralised-governance, microfinance, poverty-eradication

> Since our Independence in 1947, successive governments have intended to enable socio-economic upliftment of the masses through various schemes and programs. Governments, at the Centre or state, have explored several paths with varying levels of success ..

**Summary:**

Kudumbashree, Kerala's women-led poverty eradication programme launched in 1998 and rooted in the decentralised People's Plan Campaign that devolved 35% of plan funds to local bodies, exemplifies successful socio-economic empowerment through a three-tier structure: Neighbourhood Groups (NHGs) of 10-20 women focusing on thrift, internal micro-credit, and bank linkages via NABARD grading; Area Development Societies (ADS) coordinating at ward level; and Community Development Societies (CDS) at local government level for planning and implementation. Managed by the state Kudumbashree Mission, it receives government grants and subsidies to foster micro-enterprises, financial independence, and anti-violence initiatives without creating welfare dependence. As of September 2021, it boasts 4.58 million women members across 294,436 NHGs. During the pandemic, NHGs drove health campaigns via 1.9 lakh WhatsApp groups, distributed interest-free loans under Sahayahastham, and supported education via Vidyashree. Studies confirm enhanced self-worth, household contributions, and agency among participants, akin to Grameen Bank's model. From a classical-liberal lens, Kudumbashree demonstrates government's facilitative role in promoting community agency and independence, offering a scalable blueprint for other regions.

**Key points:**

- Kudumbashree's NHGs enable women to build savings, access micro-credit after 3-6 months, and link with banks for enterprise funding.
- The decentralised structure integrates with local governments, empowering women in planning via ADS and CDS.
- Program scaled to 4.58 million members, aiding Kerala's pandemic response through information dissemination and economic relief schemes.
- Research shows NHG participation boosts women's self-worth, power navigation, and household roles, reducing state dependence.

**By Sreesreshta Nair**

* * *

Since our Independence in 1947, successive governments have intended to enable socio-economic upliftment of the masses through various schemes and programs. Governments, at the Centre or state, have explored several paths with varying levels of success and failure in meeting their envisioned goals. The Kudumbashree programme is one such model from the southern state of Kerala. It aims at poverty eradication through economic and social empowerment of women. It has received much attention and considerable success since its inception in the late 1990s. This essay aims to understand the success of the Kudumbashree programme. 

‘Kudumbashree’ is a Malayalam word that translates to ‘prosperity of the family’. The Kudumbashree programme is rooted in [Kerala’s People’s Plan Campaign](https://www.newindianexpress.com/states/kerala/2021/aug/17/peoples-planning-turns-25-the-way-forward-2345656.html), which  aimed at decentralisation through local planning. The Campaign famously involved the then state government’s call to devolve nearly 35% of the plan fund from a centralised bureaucracy to the local bodies. The programme has a decentralised three-tier structure with Neighbourhood Groups (NHGs) at the lowest level, followed by the Area Development Society (ADS) and the Community Development Society (CDS) at the local government level. The programme witnesses decentralised, democratic leadership of women. While similar to the Self Help Groups (SHGs), the NHGs also function as a forum for development action and planning. 

Inaugurated by the Prime Minister in 1998, the programme was gradually extended to all parts of the state in phases during 2000-2002. The community structure of the program evolved through [experiments](https://www.kudumbashree.org/pages/178) done in Alappuzha and Malappuram municipalities during the early 1990s. The NHGs have 10 to 20 women members from every locality. Membership remains open to all women with the sole restriction that only a single member from each family can join an NHG. In the group meetings, members deposit a pre-fixed thrift amount towards the group savings fund. The NHG issues small loans to members as per requirement, based on an interest rate decided by consensus. Internal lending activities begin only 3 months after formation and regular meetings of each local group. Once a group has been functioning for 6 months, they qualify for bank linkages thereby increasing their internal lending capability. A 15-point grading system developed by [NABARD](https://www.kudumbashree.org/pages/5) is used in deciding eligibility for bank linkages. The above model of thrift and credit promotes saving habits among the poor and further provides them with opportunities for responsible credit. 

All the NHGs in a ward together form the Area Development Society. The ADS works closely with local governments at the ward level and has the elected ward member as its patron. It supports the functioning of NHGs and also has a key developmental role in conducting gram sabhas at the ward level. The Community Development Society at the local government level is at the top of Kudumbashree’s community organisational structure. A CDS has upto 30 ADS as its members, with an executive committee having one representative each ADS. Other than monitoring member ADS, CDS plays a key role in awareness building, information dissemination, plan formulation and implementation at the local government level.

The overall management and implementation of the programme is carried out by the [Kudumbashree Mission](https://kudumbashree.org/pages/171#), which is a state poverty eradication mission of the Government of Kerala. It works closely with local self-government institutions aiding the expansion and promotion of community networks, information dissemination and provision of required financial & technical assistance. Kerala’s minister for local self government heads the governing body in-charge of the Mission. The Mission also functions as the nodal implementing agency for urban poverty alleviation schemes, both Central and state, including the National Urban Livelihood Mission and Valmiki Ambedkar Awaz Yojana, among others. 

The state government provides financial support for the programme through grants and interest subsidies. It facilitates independent implementation and empowerment over dependence on government welfare. The three levels of Kudumbashree i.e NHGs, ADS and CDS enable socio-economic empowerment of women in the following ways: 

(i) Support via micro-finance for setting up micro-enterprises, livestock farming, market development, etc. 

(ii) Promote greater financial independence and empowerment among the members.

(iii) Women empowerment initiatives to provide agency and elimination of violence against women.

As of 15th September 2021, Kudumbashree has a total membership of [45,85,677 women with 2,94,436 NHGs](https://www.kudumbashree.org/pages/171). During the pandemic, the Kudumbashree network was instrumental in the state’s response strategy. The network was used in spreading the health department’s Break the Chain initiative. As per the Kudumbashree [website](https://www.kudumbashree.org/pages/830), 1.9 lakh Whatsapp groups were formed to help people access proper information regarding the pandemic. As part of measures to boost the economy post-pandemic, the state government is using Kudumbashree NHGs to disperse interest-free loans to members under the Chief Minister’s [Sahayahastham](https://www.newindianexpress.com/cities/thiruvananthapuram/2020/aug/31/kerala-cm-pinarayi-vijayans-pandemic-loan-scheme-sahayahastham-breather-to-22-lakh-women-2190418.html) (helping hand) scheme. Amidst the pandemic, [KSFE (Kerala State Financial Enterprises)](http://ksfe.com/)  launched the [Vidyashree](https://www.onmanorama.com/news/kerala/2021/02/20/kerala-vidyashree-student-laptop-distribution.html) micro-credit scheme in collaboration with Kudumbashree ‘ayalkoottams’ (NHGs) to help students from poor backgrounds to continue their online education. 

For more than two decades, from the days of People’s Plan to the recent Covid response, Kudumbashree has been an important tool of empowerment in Kerala’s society. Numerous studies and awards are a testimony to the success of Kudumbashree. Sarava Selvi C and KS Pushpa in their [research](https://www.kudumbashree.org/storage//files/uecbe_factors%20influence%20on%20rural%20women%20empowerment%20of.pdf), published in the International Journal of Current Advanced Research, found that women who participated in NHGs have developed a strong sense of self-worth, faith in their ability to interact within power structures. There was also an increase in their contribution to the household. 

  
Much like the famous Grameen Bank [model](https://www.nobelprize.org/prizes/peace/2006/grameen/facts/) of Bangladesh, Kudumbashree of Kerala provides insight into how empowerment and independence can be promoted among local communities. The Kudumbashree model shows how the government can play a supportive role in ensuring the social and economic empowerment of the rural poor. The programme provides a sense of agency rather than the sense of dependence on the state. Monitoring and analysing the success and efficiency of such models is important for other states and regions that may wish to adapt them in accordance with their local conditions.

*Read more: [Gauging Efficacy: Production Linked Incentive Scheme](https://spontaneousorder.in/gauging-efficacy-production-linked-incentive-scheme/)*

* * *

**About Sreesreshta Nair**

Sreesreshta Nair is currently pursuing his first year of Masters in Development Studies at Tata Institute Of Social Sciences (TISS), Mumbai. He is a graduate in Management Studies (BMS) from Narsee Monjee College of Commerce and Economics, Mumbai. Sreesreshta’s area of interests include Gandhian thought in 21st century, public policy, decentralised governance, Indian politics, mindfulness and conscious living.

## Gauging Efficacy: Production Linked Incentive Scheme

Original: https://www.spontaneousorder.in/p/gauging-efficacy-production-linked-incentive-scheme

Author: Spontaneous Order

Published: 2022-07-25T14:31:18.000Z

Topics: production-linked-incentives, industrial-policy, labor-intensive-sectors, wto-compliance

> The Production Linked Incentive (PLI) scheme offers financial incentives on incremental sales and capital investment (over a base year) to identified industrial sectors. The scheme was introduced in phases for different sectors with the objective of sup..

**Summary:**

The Production Linked Incentive (PLI) scheme incentivizes incremental sales and capital investments in 14 sectors to advance Make in India, targeting USD 500 billion in domestic production and 6 million jobs within 5 years. From a classical-liberal perspective valuing simplicity and measurable outcomes, it excels with a straightforward application process and quantity-based criteria, adhering to Occam's razor and avoiding pitfalls of profitability-linked tax incentives or NPA-prone credit schemes. However, poor sectoral targeting undermines efficacy: only textiles among the 14 is labor-intensive, despite India's labor endowment and a 2020 study showing a 15 percentage point shortfall in global low-skill exports, equating to $140 billion lost (5% of GDP) in textiles alone. Expanding to sectors like gems and jewellery could generate jobs (e.g., 7.5 lakh in textiles) and formalize women’s employment. Risks include WTO challenges from local value addition norms in textiles, batteries, and solar modules, and difficulties enforcing 4-6 year sunset clauses amid beneficiary resistance—a classic protectionism concern. Regular, rigorous impact evaluations are essential for monitoring progress and refining the scheme.

**Key points:**

- PLI scheme's simple, quantity-based incentives on incremental sales outperform complex tax and credit alternatives by directly boosting production.
- Only textiles among 14 PLI sectors is labor-intensive, forgoing India's advantage in low-skill exports worth $140 billion annually.
- Include more labor-intensive sectors like gems and jewellery to create jobs and leverage India's labor force, including women.
- Local value addition norms risk WTO violations under subsidies agreement; implement corrective measures.
- Enforce sunset clauses and conduct regular impact evaluations to avoid long-term protectionism.

**By Gauri Kapoor**

* * *

The Production Linked Incentive (PLI) scheme offers financial incentives on incremental sales and capital investment (over a base year) to identified industrial sectors. The scheme was introduced in phases for different sectors with the objective of supporting the ‘Make in India’ initiative and achieving a host of growth and welfare objectives. The industrial sectors qualifying for these incentives are largely identified through their potential for job creation, enhanced production, tax collection and social welfare. The scheme may [generate 6 million jobs in the next 5 years](https://www.business-standard.com/budget/article/pli-scheme-may-generate-6-million-jobs-in-next-5-years-fm-sitharaman-122020100561_1.html) according to Finance Minister Sitharaman. 

A sound policy attaches measurable outcomes to its objectives. The PLI scheme is expected to boost domestic production worth [USD 500 billion within 5 years](https://www.pib.gov.in/PressReleasePage.aspx?PRID=1710134) of its implementation*.* It specifies the sectoral expenditure outlay along with expected annual production, investment and employment outcomes*.* Without these quantifiable reference figures, it would be difficult to assess the ongoing and ex-post progress made by the scheme. 

The PLI scheme deserves credit for its simple process of application and a straightforward qualifying criterion for claiming incentives*.* Conventional tax and credit incentives face [challenges](https://www.livemint.com/opinion/columns/productionlinked-incentives-a-well-designed-scheme-11618245189412.html) in the form of limited relevance (linked with profitability) and the possibility of getting turned into NPAs, respectively. Innovatively designed, the quantity-based PLI scheme directly incentivizes sales and pushes production figures. Moreover, it adheres to [Occam’s razor](https://www.ncaer.org/uploads/photo-gallery/files/1485529992Press%20Release_CDDL%202017.pdf), a problem-solving principle that promotes simplicity in approach over complicated policy design mechanisms*.* 

The parameters for determining industrial sectors, which have a dedicated PLI scheme have improved over time. However, the scheme still suffers from poor sectoral targeting. Out of the [14 sectors](https://www.investindia.gov.in/production-linked-incentives-schemes-india) covered under the scheme, only the textile and apparel sector falls under the category of labour-intensive production. A [2020 study](https://ashoka.edu.in/static/doc_uploads/file_1602585593.pdf) indicated that India’s share of global low-skill exports is about 15 percentage points less than its share of the labour force. For instance, according to the study, India should be making an additional $140 billion (5% of GDP) in the textile and clothing sector alone. This is a tremendous loss.

The inclusion of textiles within the PLI scheme is expected to create over [7.5 lakh jobs](https://www.pib.gov.in/PressReleasePage.aspx?PRID=1753118). It is also likely to increase the participation of women in the formal economy since the sector predominantly employs a female labour force. These statistics are telling of the need to consider India’s labour endowment and include more labour-intensive sectors such as gems and jewellery within the realm of the PLI scheme. This is especially important given that low-skilled production in India is usually associated with labour-intensive industries. 

The PLI scheme is especially rewarding for firms engaged in high-tech production, which have the ability to scale up substantially. Emphasis has been laid on boosting production and investments to foster India’s integration into global value chains. A spurt in India’s export sector and reduction of import dependence are viewed as the positive externalities resulting from improved domestic manufacturing capacities. Further, regionally diversified foreign investments under the PLI Scheme are expected to provide a cushion to the domestic manufacturing industry during times of instability in a given international market.  

Though the scheme has been designed to adhere with WTO norms, some PLI schemes (such as those for textile products, ACC batteries and solar PV modules) specify local value addition norms, which necessitate a percentage of domestic value addition for firms to be eligible for availing incentives. Such specifications may be [challenged at the WTO](https://www.knowledgeridge.com/c/ExpertsViewsDetails/137) for violating the Agreement on Subsidies and Countervailing Measures. While the scheme is not directly linked to exports, a reasonable share of goods produced by manufacturers eligible for the PLI scheme could be exported. There is a need to address this possibility and implement corrective measures*.*

Any government-led manufacturing scheme requires a comprehensively framed sunset-clause. The PLI scheme has an inbuilt sunset clause. Depending on the sector, incentives are applicable on incremental sales of products [for a duration of four to six years](https://www.investindia.gov.in/production-linked-incentives-schemes-india). However, once the scheme is implemented it will be difficult to withdraw governmental support and incentives due to reluctance on part of  the domestic beneficiaries. This is a popular argument against protectionism and relevant in the case of PLI given the involvement of non-market financial incentives. While massive improvements are expected in India’s manufacturing capacity as a direct consequence of the scheme, long-term impacts should also be considered while there is time. 

Moving forward, regular and rigorous impact evaluations will be essential to monitor the progress of the scheme and introduce provisions to enhance the efficacy and reach of the production-linked incentives.

*Read more: [NEED FOR PRIVATISATION: DEFENCE MANUFACTURING](https://spontaneousorder.in/need-for-privatisation-defence-manufacturing/)*

* * *

**About Gauri Kapoor**

Gauri holds a master’s degree in International Business Economics and Finance and is working as a Young Professional with the Ministry of Commerce & Industry, GoI. Her areas of interest include foreign trade, public policy and development finance.

## NEED FOR PRIVATISATION: DEFENCE MANUFACTURING

Original: https://www.spontaneousorder.in/p/need-for-privatisation-defence-manufacturing

Author: Spontaneous Order

Published: 2022-07-11T14:42:38.000Z

Topics: defence-privatisation, self-reliance, arms-exports, defence-manufacturing

> India was among the top 5 military spenders in the world as per the Stockholm International Peace Research Institute (SIPRI) 2021 report. After the 1956 Industrial Policy Resolution, the defence manufacturing sector was made the exclusive prerogative of..

**Summary:**

India's defence manufacturing sector, reserved for public sector undertakings (PSUs) post-1956 Industrial Policy Resolution, has failed to deliver self-reliance despite liberalization allowing 100% private participation and FDI since 2001. PSUs exemplify inefficiencies: HAL's Tejas fighter took 33 years for induction in 2016, while INSAS rifles suffered faults like magazine cracks during Kargil War. India, a top-5 global military spender per SIPRI 2021 with ₹5.25 lakh crore (13.3% of 2022-23 budget), remains the largest arms importer (2017-2021), despite 5000 MSMEs and 369 licences by FY2018-19. A classical-liberal push for privatisation argues competition from private firms—as in the US with Boeing and Lockheed Martin—would slash costs, spur R&D and innovation (contra PSU faulty ammunition), and boost exports toward ₹35,000 crore target by 2024 (from ₹8,434 crore in 2020-21). Security concerns over data leaks or misaligned sales are addressable via regulations. Privatisation fosters Aatmanirbhar Bharat by assigning private sector non-sensitive items like gliders, parachutes, and optics, per new import bans on 101 items, without eliminating PSUs for missiles.

**Key points:**

- PSU dominance has caused delays like 33-year Tejas induction and INSAS rifle failures, hindering self-reliance.
- Private sector competition, as in the US, would reduce defence costs, drive R&D innovation, and improve quality.
- Privatisation enables surplus production for exports, targeting ₹35,000 crore by 2024 to rival USA and France.
- Regulations can mitigate security risks, allowing private handling of non-sensitive items like optics and parachutes.

**By vikrant pratap singh**

* * *

India was among the top 5 military spenders in the world as per the Stockholm International Peace Research Institute (SIPRI) 2021 [report](https://www.sipri.org/media/press-release/2022/world-military-expenditure-passes-2-trillion-first-time). After the [1956 Industrial Policy Resolution](https://www.orfonline.org/expert-speak/70-policies-industrial-policy-resolution-1956/), the defence manufacturing sector was made the exclusive prerogative of defence PSU. In 2001, however, the [government allowed](https://pib.gov.in/PressReleasePage.aspx?PRID=1654091) up to 100% participation by the private sector in the defence industry sector, and capped FDI at 26%. The NDA government first opened the country’s defence sector to 49% FDI in 2014, then to 74% in 2020, and [100% under the ‘approval route’](https://www.makeinindiadefence.gov.in/pages/fdi-policy-in-defence-sector). This was seen as a big step toward the sector’s privatisation. 

It was anticipated that the opening of the sector would result in more access to modern foreign technologies. However, India’s defence industry capability [highlights a different reality](https://thewire.in/security/make-in-india-strategic-arms-import-defence-industrial-base).  Some experts attribute this dismal condition of self-reliance to the failure of public sector manufacturing in defence. The best example here is that of [HAL Tejas](https://hal-india.co.in/Product_Details.aspx?Mkey=54&lKey=&CKey=20), an idea and proposal, started in the 1980s to replace the MiG-21s, which took [33 years to get inducted](https://timesofindia.indiatimes.com/india/33-years-on-tejas-squadron-hits-runway/articleshow/52948288.cms) into the Indian Air force in 2016.

With the Bofors scam, Jeep scandal or Rafale deal tainting the history of the defence industry, corruption concerns remain. The exclusion of private enterprise from defence production may have protected PSUs from competition, but it has also curbed innovation owing to the lack of competition. The problems with deliveries of public sector manufacturing units count as several delays, faulty ammunition, sub-standard rifles. For example, INSAS rifles often [invited criticism](https://www.aviation-defence-universe.com/insas-rifle-from-an-asset-to-a-liability/#:~:text=During%20the%201999%20Kargil%20War,firing%20practice%20were%20also%20reported.) like magazine cracks, improper loading, shells getting stuck in chambers.

[Since 2001](https://www.sidm.in/sectorsnapshot), 5000 defence MSMEs have emerged in the defence industry, and 369 defence industrial licences have been issued (as of FY 2018-19). However, India remained the biggest importer of arms between [2017 and 2021](https://theprint.in/defence/india-biggest-importer-of-arms-in-2017-2021-but-atmanirbharta-push-sees-volume-fall-by-21/872896/). A move towards private participation in the defence sector is likely to have multiple benefits.  

**Reduction in Defence Expenditure**

India allocated ₹5.25 lakh crore for military spending in this union budget of 2022-2023. The share of the defence budget stands at 13.3% of the total government expenditure. This share can be reduced if doors to the private sector are opened. How does the private sector reduce cost? Through competition. If we take the example of the United States, multiple companies produce the same equipment, such as Boeing, Lockheed Martin, General Dynamics and McDonnell Douglas. This has [created competition](https://web.stanford.edu/class/e297a/U.S.%20Defense%20Industry%20and%20Arms%20Sales.htm) between them for pricing and quality, further strengthening the United States’ image as reliable defence manufacturers.

**R&D and Innovation** 

Research and development [play a crucial role](https://www.orfonline.org/research/the-case-for-nurturing-military-scientists-in-the-indian-army/) in the survival of private players in the market. They have to constantly innovate to stay relevant to the changing demands of a competitive market. Private companies have to maintain quality standards to remain in competition. In India, Ordnance units are accused of producing [faulty and poor quality ammunition](https://indianexpress.com/article/cities/pune/cag-report-on-defence-services-584-accidents-in-ordnance-factories-products-between-2014-15-and-2018-19-7857314/).

**Boost Export Opportunities**

Surplus production, achieved through combined efforts of the public and private sector, will open doors to the global market. It would allow Indian companies to set up joint ventures with foreign companies, gaining access to modern foreign technologies. Private firms will have the incentive to attract defence deals from different countries, which will help increase exports. Increased exports would also establish India as a major military power worldwide [like USA and France](https://www.sipri.org/media/press-release/2020/usa-and-france-dramatically-increase-major-arms-exports-saudi-arabia-largest-arms-importer-says) with whom all the countries would be willing to keep strong defence ties. In this pursuit India has set the [target of exports of 35000 crore by 2024 which stands at 8,434 crore in 2020-21.](https://web.stanford.edu/class/e297a/U.S.%20Defense%20Industry%20and%20Arms%20Sales.htm)

Despite these advantages, there are some apprehensions regarding privatisation. These include security concerns. It is a challenge to protect sensitive data when it goes to a private company. There are [some examples](http://www.millenniumpost.in/civilian-defence-contractor-admits-leaking-military-secrets-to-his-partner-198817?infinitescroll=1) where private defence companies compromised sensitive information for money. Critics could argue that privatisation can reduce control as companies may sell weapons to customers who are not aligned with India’s national interest. Such concerns can be combatted through careful and robust regulations. 

However, the private sector must be considered a stakeholder in attaining Aatmanirbhar Bharat. Privatisation of the defence sector is the need of the hour to  improve India’s military industry capability, self-reliance quotient, design capability in critical systems and quality, time and cost-effectiveness. India can foster this by giving certain elements to the private sector like manufacturing handle gliders, parachutes, optics, components and ancillaries, and products designed for troop comfort.  The same has been outlined in [India’s new import policy which restricts import of 101 defence items](https://www.newindianexpress.com/nation/2020/aug/09/rajnath-singh-announces-restrictions-on-import-of-101-defence-items-2181250.html) to give boost to indigenous firms and private sector as a partner in India’s quest for higher self-reliance. 

Privatisation of the defence sector does not necessarily mean the removal of State-owned companies. Private players may still not be trusted with most sensitive technologies such as missile technology.

*Read more: [Forest Rights Act: Implementation Across States](https://spontaneousorder.in/forest-rights-act-implementation-across-states/)*

* * *

**About vikrant pratap singh**

Vikrant is a postgraduate in political science and a public policy enthusiast. His interests include foreign policy, defence policy and military conflicts around globe. Other keen interests include sports, yoga and environmentalism. He believes in free choice, optimism and nation first.

## Forest Rights Act: Implementation Across States

Original: https://www.spontaneousorder.in/p/forest-rights-act-implementation-across-states

Author: Spontaneous Order

Published: 2022-06-29T13:41:41.000Z

Topics: forest-rights-act, minor-forest-produce, gram-sabhas, free-market-environmentalism

> The following essay provides an insight into Centre for Civil Society’s recent Primer, Opening Gates for India’s Keepers of Forests, 2022. After nearly fifteen years of the Forest Rights Act (2006), it is common knowledge that there is a dissonance be

**Summary:**

The Forest Rights Act (2006) sought to restore control of forests and resources to indigenous and tribal communities, traditional caretakers displaced by state control, but implementation has faltered after 15 years due to forest department resistance, particularly over non-timber forest produce (NTFP) worth nearly 6,000 crores annually. Forests are regulated by both Union and state governments per the 42nd Constitutional Amendment, yet states invoke archaic laws undermining the FRA, leading to irregular implementation. Comparing Gujarat, Madhya Pradesh, and Odisha—states that nationalized minor forest produce (MFP) sales historically—reveals persistent issues: Gujarat denationalized four MFPs (Timru leaves, Mahuda flowers, Doli, gums) post-PESA in 2017, but its state corporation trades them 'on behalf of' Gram Sabhas, with transit permits hindering non-nationalized produce. Madhya Pradesh, largest Kendu leaves producer (25%), first transferred MFP ownership to Gram Sabhas under FRA but its federation allegedly retained 500 crores for collectors in 2017. Odisha's 2000 MFP policy recognized community rights but Gram Sabhas lack price determination authority, yielding mid-level implementation. From a classical-liberal lens, success demands empowering forest dwellers with full MFP rights—collection, sale, transport, pricing—and dismantling bureaucratic and monopolistic barriers.

**Key points:**

- Forest departments resist FRA implementation to retain control over NTFP worth 6,000 crores annually.
- Gujarat denationalized key MFPs post-PESA but state entity trades on behalf of Gram Sabhas and transit permits persist.
- Madhya Pradesh transferred MFP ownership to Gram Sabhas but retained 500 crores owed to collectors.
- Odisha partially empowers villages on MFP but denies Gram Sabhas pricing rights.
- Empower forest communities with full MFP rights and eliminate state hindrances for FRA success.

**By Sarthak Kwatra**

* * *

*The following essay provides an insight into Centre for Civil Society’s recent Primer, [Opening Gates for India’s Keepers of Forests, 2022](https://ccs.in/sites/default/files/kof-policy-brief-v4.pdf).*

After nearly fifteen years of the Forest Rights Act (2006), it is common knowledge that there is a dissonance between what was intended, and what was implemented. The Act intended to initiate a transfer of land back to the indigenous and tribal communities that were the traditional caretakers of the land, before they were stripped away from it. Several reasons exist as to why the existing number of claims of forest dwelling communities have been far greater than the number of claims that have been accepted. One of the main reasons for this is that it would transfer control of the forest and forest resources from the forest department to the forest-dwelling communities. The rights that forest communities get over the non-timber forest produce turnover is close to 6,000 crores per annum, and a push away from it is something that the forest department isn’t on board for. 

Forests in India, as per the 42nd Amendment to the Constitution, are now regulated by both the Union and the state governments, with the Union government having the final say. However, several cases have surfaced of states using archaic laws that undermine the spirit of the Forest Rights Act (FRA). Owing to which, it has been observed that the implementation of the FRA has been incredibly irregular across states. 

For the purpose of this article, I will be comparing the implementation of the Forest Rights Act across three states – Gujarat, Madhya Pradesh, and Odisha – to discuss said irregularities in implementation.

The common point of origin among these case studies is the fact that at distinct points in their history, the sale of minor forest produce (MFP) in the state was nationalised. In Gujarat, the sale of four items –  Timru leaves, Mahuda flowers, Doli and all types of gums – were nationalised under the Gujarat Minor Forest Produce Trade Nationalisation Act, 1979. Only after the enactment of PESA (Panchayats (Extension to Scheduled Areas) Act, 1996), the ownership of MFP was given to Gram Sabhas. On the 24th of May 2017, post the enactment of PESA, the aforementioned MFP were also denationalised. Despite this progress, however, in the case of nationalised MFP, Gujarat’s state-run MFP corporation trades in MFP from scheduled areas “on behalf of gram panchayats/sabhas,” as per GSFDCL. In the case of non-nationalised produce, [transit permits](https://spontaneousorder.in/on-the-origin-of-transit-permits/) continue to be present as an issue. 

Even in Madhya Pradesh, the state with the largest production of Kendu leaves (25%), the implementation is far from perfect. The nationalised MFP items are Kendu leaves, Sal seeds, and Kullu gum. The trade of the MFP items was to be carried out solely by the state government under the Madhya Pradesh Vanopaj (Vyapar Viniyaman) Adhiniyam, 1969. Upon the advent of the Forest Rights Act, Madhya Pradesh was the first to initiate the transfer of MFP-ownership to gram sabhas. However, in 2017, the MP Lokayukta alleged that the state MFP Co-operative Federation had retained an amount close to INR 500 crores, which was supposed to have been dispersed to MFP collectors. Therefore, the hindrances from the Forest Department continue to prevail, and here they take the shape of retention of funds. 

Finally, in the case of Odisha, the state monopoly on forest produce was enabled by the Orissa Forest Produce (Control of Trade) Act, 1981. This continued till 2000, when the state of Orissa came out with an MFP policy, the entire purpose of which was to recognize the rights of the forest dwelling communities over forest produce. However, even after said policy, gram sabhas weren’t given the rights for price determination of MFP. At present, Orissa’s implementation of the FRA witnesses mid-level completion – while some villages have rights over the collection, sale, and transport of MFP, a lot of them are still struggling. 

As is evident, the inter-state irregularities in the implementation of the FRA are gargantuan. However, the solution to all of those irregularities is simple. It rests in enabling forest dwellers with the rights to MFP, and removing the hindrances in their way to actualise and exercise those rights. The success of the FRA is in the empowerment of forest communities.

*Read more: [Lessons from History: Failure of Price Controls](https://spontaneousorder.in/lessons-from-history-failure-of-price-controls/)*

* * *

**About Sarthak Kwatra**

Sarthak is an Economics graduate from Hansraj College, Delhi University and he's currently working as a Junior Associate at the Centre for Civil Society. Sarthak's areas of interest include Economic History, Free Market Environmentalism, Pop Culture, and often their intersections.

## India needs Agnipath, not pensionpath

Original: https://www.spontaneousorder.in/p/india-needs-agnipath-not-pensionpath

Author: Spontaneous Order

Published: 2022-06-21T14:11:56.000Z

Topics: agnipath-scheme, defence-reform, pension-reform, security-integration

> The defence of India is not a job creation scheme, as many rioters seem to believe. India urgently needs to modernise its military capability, focusing on high-tech areas such as cyberwarfare, drones, missiles, and even space weapons. Boots on the groun..

**Summary:**

India's defence requires modernization in high-tech domains like cyberwarfare, drones, missiles, and space weapons, rather than treating the military as a job scheme, argues Swaminathan SA Aiyer from a classical-liberal perspective emphasizing efficiency over populist entitlements. Agnipath is a vital reform: recruits currently serve 15 years and draw pensions for 50, with post-'One Rank One Pension' spending on pensions exceeding hardware costs. The scheme hires 46,000 Agniveers annually, releasing 34,000 after four years with Rs 11 lakh lump-sum, targeting a 50:50 regular-Agniveer ratio to drop average age from 32 to 26 for fitter troops. Savings fund skilled, equipped forces. Reforms must extend beyond 1.2 million armed personnel to ~1 million in paramilitaries like CRPF (350,000), CISF (150,000), and RPF (75,000), via integrated career paths: army in twenties, then paramilitary, then civilian security, curbing silos, excess staff, salaries, and pensions. Critics' claims of unskilled 'kindergarten' soldiers are refuted by WWII Indian Army feats; demobilization fears by post-WWII global experience and current annual releases. Government must resist agitators, unlike farm/land reform retreats, for holistic security integration over vested interests.

**Key points:**

- Agnipath cuts pension burdens by limiting most service to four years, redirecting savings to high-tech equipment and modernization.
- Integrate armed forces, paramilitaries, and civilian security into progressive career paths to reduce total personnel, costs, and age mismatches.
- Lower average soldier age from 32 to 26 years for superior fitness and effectiveness.
- Dismiss fears of violence from demobilized youth, citing WWII successes and post-war global demobilizations without chaos.
- Resist populist pressures and vested interests to avoid wasteful 'job creation' via excessive security posts.

**By Swaminathan SA Aiyer**

* * *

The defence of India is not a job creation scheme, as many rioters seem to believe. India urgently needs to modernise its military capability, focusing on high-tech areas such as cyberwarfare, drones, missiles, and even space weapons. Boots on the ground still matter, but less than before. A thorough overhaul of human resources is imperative. The Agnipath scheme is just a small step in that direction but an important one. The government can tweak the details to assuage hurt aspirations but must not surrender to agitators as it did earlier in the case of land acquisition and farm reforms. 

Currently most recruits serve for around 15 years and may then draw pensions for 50 years!

After the “One Rank One Pension” populist reform, defence spending on pensions exceeds that on military hardware. This is insane. Agnipath will reduce the pension bill gradually but very substantially. The money saved can be redirected to high-tech staff and equipment. India will have fewer but more skilled, better-equipped armed forces.

Agnipath aims to hire 46,000 ‘Agniveers’, of whom 34,000 will leave service after four years with lump-sum benefits of Rs 11 lakh. The ultimate aim is to have regular soldiers and Agniveers in a 50:50 ratio. This will reduce their average age from 32 years to 26, a huge improvement since younger soldiers are fitter and tougher. 

However, the new approach must not be limited to the 1.2 million armed services personnel alone. India also has close to a million personnel in ten para-military and civilian security forces. The biggest of these is the Central Reserve Police Force with around 350,000 personnel, used for internal security and counter-insurgency. Next comes the Central Industrial Security Force with over 150,000 personnel, providing security for public sector corporations and departmental undertakings.

The Railways have a separate Railway Protection Force with 75, 000 personnel. The Assam Rifles look after security in the North-East, the Border Security Force staffs the borders with Pakistan and Bangladesh, the Indo-Tibetan Border Police staffs the border with China, and the Sashastra Seema Bal is deployed on the borders with Nepal and Bhutan.

Obviously, different tasks require different sorts of specialisation. But the current approach of having independent forces with separate procedures for recruitment and development is highly inefficient and expensive. It leads to excessive numbers, excessive salary and pension payments, and people of the wrong age in the wrong place. 

It will make more sense to deploy youngsters in the armed services in their twenties, when they are fittest, then retrain them for para-military duties, and later still for civilian security duties. This general approach can be fine-tuned for the requirements of each force. 

Every security force will require specialists, but a big chunk of staff in each force can be from the armed services. This will reduce total staff, salary, and pensions. That will dismay those who view wasteful proliferation of posts as “job creation.” Vested interests in each service will oppose reforms tooth and nail. Yet we surely need an integrated approach to security rather than unconnected silos.

Some critics say that soldiers with just a year or two of experience will be like kindergarten kids, unsuited for warfare. Phooey. In World War II, the British Indian Army hired over two million recruits who within a couple of years thrashed the earlier-triumphant Japanese Army. If this is what kindergarten kids can achieve, let’s have more of them.

Other critics warn that demobilising so many gun-trained youngsters in an era of high unemployment will mean leading them into crime, terrorism, or other forms of violence. The fear is vastly exaggerated. After World War II, countries across the globe demobilised maybe 40 million people. This caused a huge unemployment problem everywhere yet was managed peaceably with few exceptions. 

Even today up to a lakh service members per year are demobilised in their thirties without violent outcomes (though of course they have the security of pensions). Civilian security services are expanding rapidly today in India and have become one of the greatest job creators. They will happily snap up trained Agniveers with four years of skills.

Unemployment is a huge problem today. Youngsters hoping to get into the armed forces on cushy terms are understandably angry with Agnipath, especially those fearing they will not be able to apply under the new age guidelines (which subsequently have been relaxed). But wasting limited military budgets on unwanted staff would be the worst possible way of tackling unemployment.

After the riots, the government explained that Agniveers would get preference in recruitment in other paramilitary services like the Assam Rifles. This sounds more an attempt to assuage the rioters than a well-planned strategy. India needs a major re-think to integrate its different security arms.

*This article was originally published in [The Times of India](https://timesofindia.indiatimes.com/blogs/Swaminomics/india-needs-agnipath-not-pensionpath-2/) on June 18, 2022.*

*Read more: [Wheat Export Ban: A Knee-jerk Anti-farmer Reaction](https://spontaneousorder.in/wheat-export-ban-a-knee-jerk-anti-farmer-reaction/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Wheat Export Ban: A Knee-jerk Anti-farmer Reaction

Original: https://www.spontaneousorder.in/p/wheat-export-ban-a-knee-jerk-anti-farmer-reaction

Author: Spontaneous Order

Published: 2022-06-16T11:01:59.000Z

Topics: agricultural-trade, export-bans, pro-consumer-bias, farm-policy

> The wheat export ban reflects a deep-rooted anti-producer bias in Indian trade policy. As Ukraine and Russia, producers of one-fourth of the world’s wheat, are engaged in a bitter war disrupting global wheat supply, the world has turned to India – ano

**Summary:**

The Indian government's sudden ban on wheat exports exemplifies a deep-rooted pro-consumer, anti-producer bias in agricultural trade policy, prioritizing domestic price control over farmers' profits amid global shortages caused by the Ukraine-Russia war. Initially planning to export 10 million tonnes to capitalize on high prices, the government imposed a blanket ban after a lower harvest of 105 million tonnes (versus 111 million projected), rejecting milder options like minimum export prices or tariffs. This echoes recurring onion export bans and a World Bank-ICRIER study documenting an implicit annual tax on farmers of Rs 2.65 lakh crore from 2000-17, totaling Rs 45 lakh crore. Wheat procurement hit a 15-year low at 18 million tonnes, down from 43.3 million last year. The ban erodes India's credibility as a supplier, drawing G7 criticism, and contradicts the withdrawn 2020 Essential Commodities Amendment aimed at curbing arbitrary interventions. Now, India faces import requests for 1.5 million tonnes. From a classical-liberal view, such knee-jerk ad-hocism undermines farmer incomes, market predictability, and export potential, urging policies free of consumer bias to foster stability and prosperity.

**Key points:**

- India's wheat export ban sacrifices farmers' gains from high global prices to curb domestic inflation, reflecting chronic pro-consumer bias confirmed by a World Bank-ICRIER study estimating Rs 45 lakh crore implicit tax on farmers over 17 years.
- The ban, opting for a blanket prohibition over milder tools like MEP or tariffs, follows a 15-year low procurement of 18 million tonnes and has provoked G7 backlash, damaging India's supplier credibility.
- Despite the 2020 Essential Commodities Amendment's intent to limit arbitrary restrictions, its withdrawal enables such interventions, contradicting goals to double farmer incomes.
- Policymakers should eliminate consumer bias in trade rules to ensure stability, predictability, and expanded markets for Indian agriculture.

**By Musharraf Aamir**

* * *

*The wheat export ban reflects a deep-rooted anti-producer bias in Indian trade policy.* 

As Ukraine and Russia, producers of one-fourth of the world’s wheat, are engaged in a bitter war disrupting global wheat supply, the world has turned to India – another major wheat producer – to address the global wheat shortages. To capitalise on this development, the government initially [planned to export](https://www.financialexpress.com/economy/india-aims-to-export-10-million-tonne-of-wheat-worth-4-billion-in-2022-23/2480352/) around 10 million tonnes of wheat this year. However, things seem to have taken a different turn.

Just weeks after drum-beating grand plans to export record amounts of wheat, the government imposed a [ban](https://timesofindia.indiatimes.com/business/india-business/explained-why-did-india-ban-wheat-exports-despite-big-trade-plans/articleshow/91565703.cms) on the exports of wheat itself. Government officials claim that the drastic measure is driven by the need to lower domestic wheat prices, which are likely to be accentuated because of a lower wheat harvest of 105 million tonnes instead of the earlier projected 111 million tonnes. This is due to the early arrival of summer in March, which has negatively affected wheat output, especially in north-western India. 

Instead of pursuing the less severe paths of Minimum Export Prices (MEP) or export tariffs, the government has chosen the most severe of all – a blanket ban. This sudden policy change is not new, but it reflects the endemic problem that has long been plaguing Indian agriculture. 

Firstly, it reflects the deep-rooted pro-consumer, anti-producer bias within trade policies where authorities always prioritise consumers’ interests over that of farmers. Instead of letting farmers export their produce and reap profits from high global wheat prices, authorities sacrificed their interests to reign in inflation for the domestic consumers. This is also reminiscent of [export bans on onions](https://thewire.in/agriculture/indias-onion-export-ban-goes-against-the-spirit-of-recent-agricultural-reform) that usually kick in every year around September-November when prices reach their peaks, and export bans are imposed to provide relief to domestic consumers at the expense of farmers. 

A 2017 [joint study](https://www.livemint.com/Politics/OG7jcGRYxqKjOAeSc0vPyO/Indias-agriculture-trade-policy-has-a-proconsumer-bias-st.html) by The World Bank and Delhi-based Indian Council for Research on International Economic Relations (ICRIER) also supports this view. It found that India’s agriculture trade policy has a pro-consumer bias that implicitly taxes farmers through measures like export bans, MEP, stock limits, movement restrictions and so on. Because of this, Ashok Gulati, who was then the agriculture chair professor at ICRIER, called for the banning of the export bans. The study also estimated that from 2000-01 to 2016-17, the various restrictions were equivalent to an implicit tax of Rs 2.65 lakh crore per annum (at 2017-18 prices). Thus, farmers were taxed around Rs 45 lakh crore in a seventeen-year period.

Secondly, the ban negatively impacts India’s credibility as a reliable global supplier. It is difficult to trust nations where governments engage in knee-jerk reactions and policy changes at the drop of a hat. There has already been a global backlash, as agriculture ministers of the G7 nations have [criticised India’s moves](https://www.thehindu.com/business/Economy/g7-criticises-india-decision-to-stop-wheat-exports/article65414229.ece) and called upon India to lift the ban. 

Government’s wheat procurement figures have also fallen to a 15-year-low, as only [18 million tonnes](https://indianexpress.com/article/explained/behind-low-wheat-procurement-india-farmer-7908812/) have been procured so far in the 2022-23 marketing season, against 43.3 million tonnes in 2021-22. It is likely that the Government procured less in the anticipation that private players would step in to buy wheat at above MSP, exporting it for higher prices. If so, the arbitrary ban would hurt them too. 

It was precisely in view of circumstances like these that the Government passed the [Essential Commodities (Amendment) Act in 2020](https://indianexpress.com/article/explained/simply-put-redefining-essential-items-6608203/), to check arbitrary policy interferences. The Act stipulated that regulation and restrictions on production, supply and distribution of food commodities would only kick in during extraordinary events like exceptional price rises, wars, famines and grave natural calamities. Unfortunately, the much needed progressive law, along with two others in the reform package, was withdrawn by the government in the face of year-long protests by farmer groups. 

The official intention behind the amendment as [quoted](https://indianexpress.com/article/explained/simply-put-redefining-essential-items-6608203/) by government officials themselves was that bringing interventions under a well defined framework would minimise the earlier uncertainties associated with the imposition of abrupt restrictions. This would thus lead to transparency and better governance. However, engaging in arbitrary policy interventions like the wheat ban betrays the government’s own stated intentions. The ban also runs contrary to this government’s [own claims](https://m.economictimes.com/news/economy/agriculture/govt-pursuing-target-of-doubling-farmers-income-by-2022-tomar/articleshow/80773240.cms) to augment farmer incomes. 

While the [rationale](https://economictimes.indiatimes.com/news/economy/foreign-trade/india-says-ban-on-wheat-exports-is-to-check-unregulated-trade/articleshow/91563039.cms) behind the ban seems somewhat reasonable, less severe measures such as export disincentives could have been considered. Knee-jerk responses and policy ad-hocism could also impact future efforts to expand international markets for Indian agricultural goods. It is important to rid trade policies of consumer bias to bring about stability and predictability. 

A month since the ban, India is now considering wheat import requests worth more than [1.5 million tonnes](https://www.business-standard.com/article/economy-policy/post-export-ban-india-asked-to-supply-over-1-5-mn-tonnes-wheat-report-122053001337_1.html) from various governments. 

*Read more: [Do countries need freedom to achieve prosperity?](https://spontaneousorder.in/do-countries-need-freedom-to-achieve-prosperity/)*

* * *

**About Musharraf Aamir**

Musharraf Aamir is studying Political Science at University of Calcutta, and is a Writing Fellow at Fellowship for Freedom in India.

## Do countries need freedom to achieve prosperity?

Original: https://www.spontaneousorder.in/p/do-countries-need-freedom-to-achieve-prosperity

Author: Spontaneous Order

Published: 2022-06-13T11:23:12.000Z

Topics: economic-freedom, political-freedom, rule-of-law, india-prosperity

> Freedom catalyses prosperity as world history shows. India’s growth depends on strengthening the economic, legal and political freedoms of the diverse people within India The headline featured prominently in the discourse at the Copenhagen Democracy Su.

**Summary:**

Freedom—encompassing economic (property rights, free trade, investment), political (civil liberties, rights), and legal (judicial, regulatory effectiveness)—catalyses prosperity, as evidenced by the Atlantic Council’s Freedom and Prosperity Report on 174 countries and Asian history. India’s pre-colonial 24.4% share of world GDP fell to 4.2% by 1950 independence due to absent freedoms. Singapore prospered via free markets and rule of law despite scant resources, unlike resource-rich Myanmar under military rule. Bhutan transitioned to constitutional monarchy with growth. South Korea, embracing capitalism under dictators then democracy, became 50 times wealthier than North Korea by 2021 UN data. Among China entities, freer Hong Kong ($46,324 per capita 2020) and Taiwan ($25,055) escaped the middle-income trap, unlike PRC ($10,055). For India, 1991 liberalisation boosted industries but must expand to informal sectors like street vendors and small farmers via repealing archaic laws, clearing judicial backlogs, and strengthening institutions. Prosperity requires competing/cooperating globally, addressing polarization by enhancing freedoms for diverse populations, enabling broad-based growth.

**Key points:**

- Freedom in economic, political, and legal dimensions drives prosperity, with delayed but significant impacts as seen in India, Vietnam, and Philippines.
- South Korea's embrace of capitalism and later democracy made it 50 times wealthier than North Korea.
- Freer Hong Kong and Taiwan escaped the middle-income trap, unlike China prioritizing political control.
- India must extend 1991 liberalisation benefits to informal sectors by repealing outdated laws and reforming judiciary.
- Strengthening freedoms for diverse Indians will mend religious and wealth divides, fostering prosperity.

**By Lakshmi Sampath Goyal**

* * *

*Freedom catalyses prosperity as world history shows. India’s growth depends on strengthening the economic, legal and political freedoms of the diverse people within India* 

The headline featured prominently in the discourse at the [Copenhagen Democracy Summit](https://www.allianceofdemocracies.org/initiatives/the-copenhagen-democracy-summit/the-summit-2022/) last week. As part of a multi-country panel on how the message resonated in various parts of the world, I gathered viewpoints on the topic which stems from the Atlantic Council’s recent *[Freedom and Prosperity Report](https://www.atlanticcouncil.org/in-depth-research-reports/report/do-countries-need-freedom-to-achieve-prosperity/)* of 174 countries. The freedom here refers to a combination of three sub-parts – economic freedom (property rights, free trade, free investment), political freedom (civil liberties, political rights) and, legal freedom (judicial and regulatory effectiveness)

As a whole, Asia provides an excellent proof of concept for the message that freedom contributes to prosperity or rather, absence of freedom denudes a country and her people of prosperity. As home to many former colonies, Asian history provides ample evidence. No statistic illustrates this better than the fact that India before colonisation in 1700 was 24.4% of world GDP; her share was down to 4.2% in 1950, at independence.

What matters now, of course, is what the free countries achieved, and here, many models exist. Singapore, a parliamentary democracy, is a prosperous nation today despite having meagre natural resources. It achieved super-normal growth through free markets and stable institutions, which uphold the rule of law. In contrast, Myanmar at independence in 1948, was rich in natural resources and fine intellectual capital in the form of educated elites. Having been mostly under the military junta rule, it has stayed unprosperous. Nearby Bhutan is a success story, transitioning in 2008 from absolute monarchy to constitutional monarchy with an elected legislature. An important difference is in the incentives of democratic and autocratic administrations, as autocracies would typically be extractive. 

The report interestingly demonstrates that there is a delayed impact of freedom translating into prosperity. India, Vietnam, Philippines are examples of those that are fundamentally poised to grow in the next decade, with freedom being an enabling factor in promoting productivity and enterprise. Those with relatively high freedom and lower prosperity at present need to be viewed from a forward-looking perspective.

People living in freedom have become more prosperous over time. North and South Korea were both poor in 1950 and did not have political freedom until 1980. However, on economic freedom, South Korea’s dictators chose capitalism and secure property rights, while North Korea’s leaders selected a communist economy. By 1980, South Korea’s per capita income was more than double that of North Korea. Starting in 1980s, South Korea transformed itself into a democracy, while North Korea stayed a dictatorship. The addition of political freedoms in South Korea resulted in an even larger divergence in the economic destinies of these two nations. United Nations 2021 data shows that today, people living in South Korea are fifty times wealthier than those living in North Korea.

The curious case of unfree China needs mention here, emerging as it has as a global superpower. Deeper look at the Chinese people living under different political and economic systems reveals a nuanced story. The People’s Republic of China (PRC) has never had political freedom, having been governed by the Chinese Communist Party since 1949 (although it started liberalising its economy in the 1980s). Hong Kong enjoyed some democratic freedoms and ranked among the freest world markets, until its takeover by the PRC in 2020. Taiwan is a constitutional republic, and embraced free markets post World War II. The results for these three countries are materially different. The PRC, Taiwan and Hong Kong were all poor in 1961, with GNI per capita of $76, $163 and $437 respectively. However, different levels of freedom resulted in different levels of prosperity by 2020, with per capita income in China at $10,055, Hong Kong at $46,324 and Taiwan at $25,055. The middle-income trap, the World Bank measure that refers to a situation wherein a developing country attains middle-income, but gets stuck below the high-income threshold — currently pegged at $12,695 GNI per capita. Taiwan and Hong Kong were able to break out of the middle-income trap, while China is not likely to, given its lack of broad-based prosperity and prioritisation of political control over economic growth. 

The Freedom and Prosperity report holds inspiration for India in writing the playbook for the next decade. Foremost is the need to pursue economic growth for all, especially those in the informal sectors (Think street vendors, small farmers, fisherfolks, nano-enterprises and forest dwellers subsisting on forest produce). The liberalisation of the economy in 1991 provided flight to prosperity for industries and professionals. This ‘freedom’91 circle’ of prosperity needs to enlarge to include the poorest of the poor too. There is a need to strengthen the muscles of democracy, in the form of strong institutions which implement the rule of law. Archaic laws have been barriers to those living on the margins from thriving to the best of their abilities. The government initiative in the past 6-8 years to repeal outdated laws is progressive, and many other laws await their turn at the sunset. The judicial cholesterol too needs an urgent deep-flush, to rid it of the chronic pendency of cases and to allow for adherence to the due process, in a timely and effective manner.

India’s road to prosperity lies in collaborating freely with progressive countries, competing and cooperating at the same time. Climate change and subsequent impact on health, livelihoods and habitats are gaining prominence in the social agenda and there is much to learn, both from the successes and follies of the global North.  The greatest divide in present-day India is the social polarization on religion and wealth inequalities. These have a detracting influence on the well-being of her people and can be mended only by strengthening the economic, legal and political freedoms of the diverse people within India.

*Read more: [India could be an upper middle income country within a decade](https://spontaneousorder.in/india-could-be-an-upper-middle-income-country-within-a-decade/)*

* * *

**About Lakshmi Sampath Goyal**

Lakshmi is the Chief Executive Officer at the Centre for Civil Society, and was previously the CEO of the India Sanitation Coalition (ISC), FICCI. She has a leadership career spanning over 25 years, having worked with Ogilvy, HSBC, and Standard Chartered Bank overseeing multi-geographic teams.

## India could be an upper middle income country within a decade

Original: https://www.spontaneousorder.in/p/india-could-be-an-upper-middle-income-country-within-a-decade

Author: Spontaneous Order

Published: 2022-06-10T11:43:06.000Z

Topics: economic-growth, per-capita-income, development-economics, asian-tigers

> India is currently what the World Bank describes as a lower middle income country. The average income of an Indian was $1,935 in 2020. The International Monetary Fund (IMF) now estimates that number will go up to $3,769 in 2027, the latest year for whic..

**Summary:**

India, currently a lower middle-income country with $1,935 per capita income in 2020, is projected by the IMF to reach $3,769 by 2027 and exceed $4,000 by the decade's end, nearing upper middle-income status per World Bank definitions. Comparable Asian transitions post-1980 show China doubling from $2,000 to $4,000 in 4 years, Taiwan in 6, South Korea in 5, while Thailand, Philippines, Indonesia, and Malaysia took over a decade; India's trajectory aligns with the 10-year median, akin to Sri Lanka and Vietnam. While exchange rates influence dollar-denominated incomes, real output growth—stripping inflation—drives long-term standards of living, as exemplified by the Asian Tigers despite varying global conditions (weak negative correlation with world growth, R-squared 0.1203). RBI estimates 6.5-8.5% medium-term growth potential, crucial for quality jobs amid a young population, pandemic output gaps persisting a decade, and looming climate shocks. India may narrow income gaps with Philippines and crisis-hit Sri Lanka, but catching others hinges on the upper growth range, underscoring sustained domestic dynamism over external factors.

**Key points:**

- India's per capita income is forecast to double from around $2,000 to over $4,000 by the end of the decade, matching a 10-year median for Asian peers.
- Real economic growth, not exchange rates or global conditions, primarily determines successful income doublings, as in China, Taiwan, and South Korea.
- RBI projects 6.5-8.5% medium-term growth as essential for jobs, youth opportunities, and absorbing shocks like pandemic lags and climate risks.
- Achieving the higher growth end will determine if India closes gaps with neighbors like Sri Lanka and Philippines faster.

**By Niranjan Rajadhyaksha**

* * *

India is currently what the World Bank describes as a lower middle income country. The average income of an Indian was $1,935 in 2020. The International Monetary Fund (IMF) now estimates that number will go up to $3,769 in 2027, the latest year for which the multilateral lender publishes its forecasts, which were recently redone after the Indian government pointed out some inconsistencies in its calculations. This means that per capita income in India is expected to cross $4,000 towards the end of the decade. India will thus be on the cusp of becoming an upper middle income country, according to the current definition used by the World Bank.

How long have other countries taken to double their per capita income from $2,000 to $4,000? The accompanying table provides data from some comparable Asian countries that have made the journey after 1980 and some that are on the verge of doing so. China, Taiwan and South Korea clearly maintained a scorching pace of economic transformation when they were broadly at our current level of development. Thailand, the Philippines, Indonesia and Malaysia took more than a decade. India seems on track to double its income at a rate that Sri Lanka and Vietnam maintained.

For any country, average income in US dollars depends on a combination of nominal economic growth in its domestic currency and the exchange rate of that currency against the dollar. How both move then matters. China let its currency appreciate in the four short years that its average income doubled to reach $4,000. Thailand saw its currency collapse in the second half of 1997. Such sharp movements in exchange rates undoubtedly affect the conversion of nominal average incomes calculated in terms of national currencies into a common measure like the US dollar.

However, no country will see its standard of living shoot up or reduce sharply over long periods of time just based on the international value of its currency or movements in domestic prices. That is because exchange rates eventually reflect inflation differentials between various countries, so a country with high inflation will see its exchange rate come down over a reasonably long period of time, and vice versa. A lot more depends on the rate at which economic output is growing in real terms, or after stripping out the effects of inflation.

Two of the original Asian Tigers—Taiwan and South Korea—as well as China are good examples. They could successfully double their average incomes in terms of US dollars in six, five and four years respectively. Others took far more time. Why these three countries could race ahead, while comparable countries with similar structural features and economic policies could not, is one of the great debates in development economics. The median time taken in this small sample is 10 years, which is close to what India will need, by current estimates, to reach a per capita income of $4,000.

There is another factor to consider: the state of the world economy, especially since export growth was such a big part of the economic strategy of successful Asian economies when they were in the early stages of their economic transformation. But global economic growth is not a dominant influence. A quick—and perhaps simplistic—look at the data shows that there is a negative correlation between the number of years taken by a country to double its income in US dollars and the pace at which the world economy expanded in the relevant time periods for each country.

In other words, a country is more likely to quickly double its average incomes when the world economy is also doing well. However, this negative correlation is weak, and not the dominant explanation (the R-squared is 0.1203). That continues to be rapid domestic growth sustained over long periods of time.

In its new Report on Currency and Finance released a few weeks ago, the Reserve Bank of India has estimated that India can maintain an economic growth rate of between 6.5% and 8.5% over the medium term. Rapid growth is needed not just to boost our position in international rankings, but also provide economic opportunities to a young population, especially given our failure to create quality jobs in productive enterprises. There are also shocks to consider. Indian output is still below where it would have been if the pandemic had not struck, and is expected to remain below trend for perhaps another decade. (Note: this is about the level of output rather than its growth rate.) A climate shock is on the horizon.

This decade may see India narrow its income gap with countries such as the Philippines and Sri Lanka, especially the latter because of its ongoing economic tragedy. India will need more time to reduce the income gap with most of the other countries considered here. A lot will depend on whether we move ahead near the lower or higher end of the potential growth estimate made by our central bank.

*This article was originally published in [Mint](https://www.livemint.com/opinion/columns/india-could-be-an-upper-middle-income-country-within-a-decade-11653411257881.html)* *on May 25, 2022.*

*Read more: [Lessons from History: Failure of Price Controls](https://spontaneousorder.in/lessons-from-history-failure-of-price-controls/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Lessons from History: Failure of Price Controls

Original: https://www.spontaneousorder.in/p/lessons-from-history-failure-of-price-controls

Author: Spontaneous Order

Published: 2022-05-30T13:43:41.000Z

Topics: price-controls, austrian-economics, economic-history, public-sector-inefficiency

> What is it about the idea of price controls that appeals to us? Whenever we are faced with the uncertainty of high inflation, nations look to price controls for relief. Today, amid the Russia-Ukraine war and with the world economy still recovering post ..

**Summary:**

Price controls, often proposed during inflation crises like post-pandemic recovery and the Russia-Ukraine war, distort market coordination by undermining price signals that guide producers and consumers amid competition and rational action. Historical evidence from post-WWII and 1970s US/Europe shows price ceilings cause shortages, quality deterioration, and black markets as producers lack incentives to expand supply while consumers exhaust available goods. The 'greed' narrative ignores global factors like crude oil prices, hurting small businesses more than large ones. From an Austrian economics view, controls violate subjectivism in human action (Mises) and exacerbate the knowledge problem (Hayek), where dispersed information cannot be centrally managed, leading to rationing, further interventions, and nationalization. In India, PSU dominance in steel, petroleum, chemicals, and mining fosters inefficiencies and moral hazard without market penalties. US examples include Nixon's 1971 wage-price freeze sparking stagflation, shortages, and the 1973 oil embargo's gasoline lines. The essay concludes that price controls, including subtle forms like tariffs or export bans, inevitably fail, demanding avoidance despite their appeal.

**Key points:**

- Price ceilings disrupt supply incentives, causing shortages, black markets, and quality decline as seen post-WWII and in 1970s.
- Nixon's 1971 wage-price freeze led to stagflation, shortages, and gasoline lines during the 1973 oil embargo.
- Austrian economics highlights how controls trigger the knowledge problem, necessitating endless further interventions like nationalization.
- India's PSUs in key sectors exemplify moral hazard and inefficiencies from lacking market discipline.

**By Kathryn Kane**

* * *

What is it about the idea of price controls that appeals to us? Whenever we are faced with the uncertainty of high inflation, nations look to price controls for relief. Today, amid the Russia-Ukraine war and with the world economy still recovering post the pandemic, this question is more relevant than ever.

Can we impose price ceilings on what private companies can charge for goods and services? What would be the consequences of doing this? This essay revisits history to answer these questions — specifically, at price controls imposed post World War II and in the 1970s when prices in the United States and European nations were rising but the output was stagnant. 

The economy is shaped by dynamic processes, with forces of demand and supply coordinating the actions of millions of individuals. Market prices drive economic decisions and coordination, given that there is competition among producers and rational human action on part of consumers. Price fixing, then, distorts coordination by changing the incentives at play. 

Those consumers lucky enough to get the reduced price when a price ceiling is imposed, actively consume until the quantity available is exhausted. Under price ceiling, producers no longer have an incentive to produce more quantities to meet demand. Therefore, price ceilings (and other forms of price control) disrupt the signaling and allocation mechanism of prices. Quality deterioration, shortages and the emergence of black markets are rampant under such circumstances. 

Often the case for price controls is made by blaming rising prices on the greed of large corporations. This point of view can miss the broader picture. For example, consider the case of rising energy prices. Crude oil prices are set in a global market that companies often have no control over. For businesses that use crude oil as raw material, times of high inflation translate to higher input costs. This leads to an increase in prices. While larger businesses are often better placed than small and medium ones in the face of higher input costs, price controls do not hurt large businesses as much either. However, they do end up hurting small or medium businesses that lack the same advantages. 

John Kenneth Galbraith, a Canadian-born American Economist, supported the use of [price controls](https://www.researchgate.net/publication/23546890_The_Theory_of_Price_Control_John%20_Kenneth_Galbraith's_Contribution) during World War II as well as post the War. Galbraith held several government posts for anti-inflationary measures during this period. War financing poses unique problems that cause high inflation like the need to use the existing means of production towards war goods. This can cut down on the production of consumer goods, but also increase employment — both of which contribute to high inflation by way of reducing supply and increasing demand, respectively.

Price controls are not limited to price ceilings or floors, but also include policies and regulations by which market prices can be modified or influenced. More subtle price controls include political pressure, tax incentives, reduction of import tariffs, ban on exports, etc. 

From an Austrian economics standpoint, price controls undermine the subjectivism that underlies [human action as described by Ludwig von Mises](https://mises.org/library/human-action-chapter-chapter-summary). Any attempt to impose such controls furthers the need for planning to deal with the unintended consequences of the first action, this takes us right back to the [Knowledge Problem argued by F.A Hayek](https://www.econlib.org/library/Essays/hykKnw.html).

Hayek argued that the information implicit in prices is distributed and decided through coordination among a large number of localised experts, and to have this information available to a central committee in a timely manner would be almost impossible. Problems would surely arise, the solutions to which would require even more intervention. 

Consider, for instance, shortages that may arise due to imposition of price ceilings as producers no longer have the incentive to produce more quantities to meet demand. A central committee may now ration for fair allocation. This would require that it anticipate the fluctuating needs of a plethora of different individuals. This undermines the market process, which through the price mechanism, would have coordinated the actions of both producers and consumers in deciding what to produce and consume. Further intervention by a central committee to incentivise producers and consumers requires more planning. In some cases, the government may have to become the producer and distributor by setting up their own subsidiaries. Nationalisation of sectors that were privately owned or acquisition of a dominant stake in private companies, takes this one step further. 

In India, sectors like steel, petroleum, chemicals and mining are dominated by PSUs. The lack of any penalty for inefficiency on part of a nationalised entity, unlike that which would be suffered by a private player, can be seen as a moral hazard problem. This often furthers or leaves unchecked inefficiencies in manufacturing.

Government involvement in operations of PSUs, especially in industries such as telecom, aviation and banking, has impacted their performance often at a cost to the consumers and the job market in which they participate. The large losses suffered by these entities, if nationalised on account of them being [too big to fail](https://www.thebalance.com/too-big-to-fail-3305617), can be seen as additional tax for the tax paying consumers. 

In the United States, on 15th August 1971, the Nixon Administration announced a [wage & price freeze](https://www.cato.org/commentary/remembering-nixons-wage-price-controls). This would prove over the course of several years a failed [economic experiment](https://www.wsj.com/articles/nixon-fight-inflation-price-controls-stagflation-gas-shortages-biden-democrats-reconciliation-bill-federal-reserve-11628885071) leading to several shortages and an ensuing period of stagflation (high inflation coupled with slow economic growth and steadily high unemployment). Shortages and severe inflation on the removal of these price controls led to the need for further intervention, which simply stopped being effective upon being resisted by producers.

A second price freeze, coupled with the decision to take the dollar off the gold standard and other policies in the backdrop of the Yom Kippur war, was imposed. This led to the [oil embargo of 1973](https://www.khanacademy.org/humanities/us-history/postwarera/1970s-america/a/stagflation-and-the-oil-crisis) imposed by the OPEC on the USA, which led to huge shortages of gasoline and long lines at the pump. Ultimately, [price controls and their effects](https://www.city-journal.org/never-a-good-time-for-price-controls) discredited them in the eyes of the common people, but this ultimate realisation did not mitigate its lasting damage. This is a lesson that we should look upon especially when lured by the idealised argument of price controls.

*Read more: [Can Rights-based management end the race to fish?](https://spontaneousorder.in/can-rights-based-management-end-the-race-to-fish/)*

* * *

**About Kathryn Kane**

Kathryn is a software developer specialising in algorithmic trading. She is an avid reader & learner with a keen interest in financial economics and the impact of macroeconomic factors on financial markets.

## Can Rights-based management end the race to fish?

Original: https://www.spontaneousorder.in/p/can-rights-based-management-end-the-race-to-fish

Author: Spontaneous Order

Published: 2022-05-18T15:49:50.000Z

Topics: fisheries-management, property-rights, artisanal-fisheries, rights-based-approach

> The year 2022 is of global significance with the United Nations declaring it as the International Year for Artisanal Fisheries and Aquaculture. The commemoration highlights the need for recognition of the rights of artisanal and small-scale fisherfolk a..

**Summary:**

The post argues for rights-based fishery management to end the 'race to fish' in India, empowering artisanal communities with property rights over marine resources as a classical-liberal alternative to failing top-down regulations. Globally, 2022 was the UN's International Year for Artisanal Fisheries and Aquaculture, highlighting threats to 492 million livelihoods dependent on small-scale fisheries, including 45 million women. India, with an 8118 km coastline and second in global production, relies on small fleets but faces stock depletion from open-access fishing, environmental rules like mesh-net limits, and state-driven disruptions such as port industrialization harming communities like Gujarat's Wagher fishers. Centralized governance disincentivizes stewardship, while rights-based approaches assign catch-based quotas, area-based Territorial Use Rights in Fisheries (TURFs), or bundles including management duties to communities or cooperatives, enforced by the state. The padu system in stake-net fisheries exemplifies this, with fisher associations allocating and rotating sites for fair catch distribution. Such models align with customary practices, foster long-term incentives, and adapt to local realities, urging India to adopt exclusive rights via market instruments or community assignments for sustainable, equitable fisheries balancing people, ocean, and economy.

**Key points:**

- Top-down regulations in India's fisheries exacerbate stock depletion and hurt small-scale fishers by removing incentives for stewardship.
- Rights-based management empowers communities with enforceable access, catch, or area rights, promoting long-term planning and responsibility.
- Area-based TURFs, like India's padu system, allocate fishing sites to associations for rotation and fair distribution, mirroring traditional property rights.
- India should implement catch-shares or community-based rights programs to sustainably manage its fisheries amid technological changes and challenges.
- 492 million globally, including 45 million women, depend on small-scale fisheries, underscoring the need for rights recognition.

**By Mohammad Anas Khan**

* * *

The year 2022 is of global significance with the United Nations [declaring](https://www.fao.org/artisanal-fisheries-aquaculture-2022/about/en/#:~:text=The%20United%20Nations%20General%20Assembly,of%20the%20United%20Nations%20system.) it as the International Year for Artisanal Fisheries and Aquaculture. The commemoration highlights the need for recognition of the rights of artisanal and small-scale fisherfolk across the world, particularly at a time when global fisheries are threatened by predatory fishing practices coupled with moribund centralised institutions to govern marine resources. A good chunk of artisanal fishers are part of small-scale fisheries primarily in developing countries such as India. And globally around [492 million](https://www.fao.org/artisanal-fisheries-aquaculture-2022/home/en/) people depend at least partially on small-scale fisheries for their livelihoods. This includes the complex value chains of fisherfolk, small-scale traders, people part of the transport facilities, workers in the cold-storage value chain as well as those involved in value addition such as the dried fish economy. Women are a crucial part of small-scale fisheries and around 45 million women participate in it. That is to say that four in ten fishers and fish workers are women. 

With a total coastline of 8118 km, India ranks second in global fisheries production. However, the Indian fisheries sector is still heavily reliant on less capital-intensive fishing involving smaller fleet size with a mix of motorized and non-motorised boats. Along India’s western, southern and eastern coasts, millions of traditional fishing communities are involved in the sector as a source of livelihood. Fish also serves as an essential for a healthy diet, providing protein and nutrients like omega-3 fatty acids, calcium, selenium and zinc. The nutritional importance of fish can be gauged by its relatively stable accessibility in the form of a cheap source of protein, in contrast to ever-fluctuating market prices of protein rich foods such as pulses and eggs. 

Despite what many may call a “boom” in the Indian fisheries sector, a myriad sector specific as well as interconnected challenges have come to the fore. For example, increased disastrous fishing practices in open access marine fisheries has led to depletion of fish stocks, often hurting the small and artisanal fishers. Also, environmental concerns on conservation of marine ecosystem has added a new set of regulations such as impractical limits on mesh-net sizes, often hurting small-scale fishers. These challenges have made fishing a volatile occupation with an increase in effort, coupled with decreasing catch. The Government’s response has been focused on enacting new legislation to regulate India’s fishing sector. Like all top-down regulations, new problems have arisen not despite of, but because of regulatory controls put in place. 

**A Rights-based Approach**

Over the past two decades, traditional and indigenous communities have asserted their property rights over land, forest and marine resources much more vigorously in the light of changing economic patterns as well as a state-led development and conservation venture. For example, State sponsored large scale developmental plans such as coastal privatisation and port-based industrialisation have come at the cost of traditional fishing grounds of local communities. A case in point is of the Wagher fishing community of Gujarat’s Kutch region which [fought](https://thewire.in/environment/upholding-world-banks-immunity-case-gujarat-fishermen-will-long-term-ramifications) a landmark litigation against the World Bank over the latter’s support of the Mundra power plant. The power-plant has fragmented the community’s traditional fishing grounds.  Numerous other similar stories of loss of livelihood due to the State’s non-recognition of customary and traditional fishing rights continue to come to the fore. They have raised some fundamental questions on the institutional framework that governs coastal and marine resources in India. Most importantly, to what extent local communities are empowered or dis-empowered due to the existence of these institutions? 

The rights-based approach to fisheries is about balancing the needs of the people, ocean and the economy. It approaches development and conservation through empowering local coastal communities and co-operatives with access and management rights over their fishing areas. These rights are enforced by the State, which becomes the duty-bearer or the enforcer, and the communities or co-operatives become the right holders who can exercise their rights over the resources. Rights-based regimes, unlike centralised and bureaucratic control, see fishers as important stakeholders towards securing sustainable fisheries and prosperous economies. Rights-based regimes introduce stakeholder responsibility with well-defined rights, which create incentives for long-term planning and stewardship. In top-down regulatory models, fishers have little to no incentive to consider long term stewardship because management of fisheries is in the hands of agencies of the State. 

One of the most significant aspects of rights-based fishery management programs is their ability to respond to local realities, cultural norms and customary practices. For example, depending on local dynamics, different models such as catch-based rights, input-based rights or area-based rights can be assigned and enforced.

Catch-based rights involve capping a total allowable catch in a particular fishery, based on scientific evidence. Quotas on catch-share are then assigned to entities within the fishery and often these quotas are transferable.

Area-based rights are assigned to a defined special marine zone and there are many examples of small-scale fisheries in developing countries that are managed under this type of system commonly referred to as Territorial Use Rights in Fisheries. Often, area-based approaches include a “bundle of rights” where, for example, catch- or effort-based rights are combined with rights to carry out management functions such as surveillance and data collection in a defined area. Instead of assignment of effort or catch rights, a community agrees to a conservation target and sets harvest rules for fishers. Area-based rights are identical to customary practices of property rights-based fishery management found in various traditional fishing communities, where rights to a fishing area and access to it are exclusively granted to individuals or groups.

The [padu system](https://www.sciencedirect.com/science/article/abs/pii/S0308597X03000873) of community-based fishing management in stake-net fishery, is an excellent example of area-based rights enforced by a legally empowered community. In the padu system, fishing sites are allocated by an association of fishers called a *Sangam.* A key element of the padu system is its attempt to redistribute the catch fairly among the fishers by rotating access to fishing locations.

With technological advancements rapidly changing the nature of fisheries, and as new fishery management challenges emerge, the way forward for India is to create rights-based programs to sustainably and equitably manage fisheries. While rights-based principles may not give a one-size-fits-all policy, they do emphasize on the need to assign exclusive rights either through market-based instruments such as catch-shares or through area-based models of property rights assigned to co-operatives or communities. The environmental, developmental and social significance of traditional and small-scale fisheries can be realised through sound institutions, which augment rather than erode their ability to manage or choose in matters linked so closely to their lives and livelihoods.

*Read more: [US wants a reboot of World Bank but it’s on wrong track](https://spontaneousorder.in/us-wants-a-reboot-of-world-bank-but-its-on-wrong-track/)*

* * *

**About Mohammad Anas Khan**

Mohammad Anas Khan is a law graduate and is currently working as a Senior Associate with Centre for Civil Society. Anas is an academic enthusiast and has a keen interest in legal theory, public policy and the terracotta approach to environmentalism.

## US wants a reboot of World Bank but it’s on wrong track

Original: https://www.spontaneousorder.in/p/us-wants-a-reboot-of-world-bank-but-its-on-wrong-track

Author: Spontaneous Order

Published: 2022-05-06T11:40:43.000Z

Topics: world-bank, development-finance, private-capital, debt-crisis

> At the spring meeting of the World Bank and International Monetary Fund, US Treasury Secretary Janet Yellen, and Deputy Secretary of State Daleep Singh called for a total overhaul of the two institutions. Daleep Singh said the Bank was too conservative ..

**Summary:**

US Treasury Secretary Janet Yellen and Deputy Secretary Daleep Singh advocate overhauling the World Bank and IMF, criticizing the Bank for conservative lending obsessed with its AAA rating, but author Swaminathan SA Aiyer, a former Bank staffer, counters that the Bank lends recklessly to meet internal targets, accumulating huge bad debts written off repeatedly. Far from relevance, the Bank is a 'pygmy' today: India receives mere billions annually from it versus $65 billion in FDI, up to $80 billion in commercial loans, and $87 billion in remittances. Post-WWII, the Bank filled a capital markets void for reconstruction and development, but by the 1970s markets recovered, and post-2000 a global savings glut—led by China—drove trillions into risky ventures like Argentina's perpetual bonds, Chinese lending surpassing the Bank, and over 100 Indian/1,000 Chinese unicorns. Private capital obviates the need for Bank expansion into riskier areas amid a new debt cliff with Sri Lanka's default. From a classical-liberal view, the Bank should downsize to a 'knowledge bank' offering expertise and financing only to the poorest and war-torn regions, conserving funds for debt relief rather than competing with abundant private flows.

**Key points:**

- World Bank is not too conservative but lends recklessly to repeat delinquents, leading to massive bad debt write-offs.
- Private capital markets have rendered the World Bank irrelevant for most developing countries, as seen in India's $65B FDI, $80B commercial loans, and $87B remittances dwarfing Bank aid.
- Amid a global savings glut and debt crisis, the Bank should conserve funds for defaulters rather than expand into riskier lending harnessed with private capital.
- Bank's future role lies in downsized expertise as a development consultant and financier for the poorest and war-devastated areas.

**By Swaminathan SA Aiyer**

* * *

At the spring meeting of the World Bank and International Monetary Fund, US Treasury Secretary Janet Yellen, and Deputy Secretary of State Daleep Singh called for a total overhaul of the two institutions. Daleep Singh said the Bank was too conservative in lending because it was obsessed with maintaining its AAA rating for borrowing from capital markets to on-lend it to developing countries. This sounded barmy. Truth is, the Bank can do the riskiest lending, yet retain its AAA rating since it is backed by the richest governments. 

Having worked in the Bank I can testify that its staff shovel aid desperately as each fiscal year comes to an end: their departmental budgets and promotions depend on lending volume. Hence, the Bank keeps lending to repeat delinquents. Far from being too conservative, the Bank and Fund have repeatedly accumulated huge bad debts that have to be written off.

Today the world stands on a new debt cliff. Sri Lanka has defaulted on its debt and many other countries look certain to follow suit. There are many reasons for this, but over-conservative Bank lending is not one of them. 

The bigger question is whether we need the World Bank at all. Once, the Bank was the main source of funds for developing countries. Today it is a barely relevant pygmy. Once, NGOs staged mass demonstrations at Bank-Fund meetings to protest against filthy capitalism. Today no NGO agitators come because the Bank simply does not matter. India gets a few billions per year from the Bank against $65 billion from direct foreign investment, up to $80 billion from commercial loans and $87 billion in remittances from overseas Indians.

World War II destroyed all the world’s capital markets. The World Bank was set up to fill the breach. It lent first for reconstruction and then for development projects while global capital markets were gradually rebuilt. The IMF was created to oversee exchange rates and act as lender of last resort to bust countries.

By the 1970s the world’s capital markets had recovered substantially. The World Bank diversified from financing development projects to tackling poverty and social sectors like health and education. It set up a soft-loan window, the International Development Association, to assist the poorest countries. This was financed by grants from rich countries, not borrowing from capital markets. After 1990 the Bank helped finance the transition of communist countries to capitalism. But after 2000 it has become increasingly irrelevant.

In earlier decades, global savings were scarce and only the most creditworthy could access them. But savings skyrocketed after 2000, with China becoming a massive contributor. A global savings glut has replaced the old money scarcity. That glut drove interest rates down to zero in safe investment havens in the West. Desperate for higher yields, global savings sought riskier and riskier channels in search of higher returns. Argentina, a repeat defaulter, was able to sell perpetual bonds requiring no repayment of principal. China, once a big borrower from the World Bank, now lends more than the Bank and Western aid donors put together.

Private capital today channels trillions to dubious countries and companies, highly leveraged schemes, and cryptocurrencies. Gigantic sums flow into unicorns, start-ups that have never made a profit yet are valued at over one billion dollars each. India has over 100 unicorns and China almost 1,000. Investors know the majority of unicorns will go bust but persevere in the hope of finding one or two super-giants like Amazon or Facebook.

When trillions of private capital flow into the riskiest areas, why does Daleep Singh want the World Bank to go into riskier areas? Surely the Bank and IMF should be conserving their funds right now for debt relief to defaulters. Daleep Singh and Yellen say the Bank should harness more private sector funds. Why so, when a savings glut has created excessive flows?

Since the 1990s, the Bank has claimed that its comparative advantage lies in its vast pool of expertise on everything from sewerage and education to reconstruction in war-hit zones. Former World Bank president Wolfensohn called it “a knowledge bank.” Long after China became a capital-surplus country it still borrowed modest sums from the Bank for a very wide range of projects because it needed its expertise, not its money.

Domain expertise is available from commercial global consultants. Yet the Bank has a role as a development consultant. And it has a role in providing financial access to those still lacking it — the most backward and those devastated by civil war. The Bank can remain a downsized development consultant and financier. But there is no case for expanding it into a massive lender for riskier projects.

*This article was originally published in [The Times of India](https://timesofindia.indiatimes.com/blogs/Swaminomics/us-wants-a-reboot-of-world-bank-but-its-on-wrong-track/) on May 1, 2022.*

*Read more: [Are Vices Crimes?](https://spontaneousorder.in/are-vices-crimes/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Are Vices Crimes?

Original: https://www.spontaneousorder.in/p/are-vices-crimes

Author: Spontaneous Order

Published: 2022-04-27T11:23:04.000Z

Topics: paternalism, vices-crimes, individual-liberty, social-norms

> I went into this Colloquium expecting to understand the limits of government paternalism and see if we could have a framework for it. And while I was there, maybe get answers to equally important (if not more so) questions like – Can the state declare e

**Summary:**

Abhimanyu Gupta recounts a colloquium exploring the limits of government paternalism, starting from Sarah Conly's argument in 'Against Autonomy' that behavioral economics justifies coercive interventions to prevent self-harm, challenging John Stuart Mill's harm principle. Participants countered that while information asymmetries warrant regulations like pictorial warnings on cigarettes, allergy labels on food, or caffeine limits on drinks, outright bans on vices such as alcohol, marijuana, or Chole Bhature overstep, as vices harm only oneself per Lysander Spooner's distinction: 'Vices are those acts by which a man harms himself or his property, crimes are those acts by which one man harms the person or property of another.' Public Choice Theory highlights state self-interest, questioning paternalistic benevolence. Harm is contextual and degree-based—e.g., occasional bhang or alcohol isn't problematic until addiction affects others like via domestic violence. Social norms, driven by desire to fit in, enforce behavior without coercion, evolving spontaneously as with COVID-era greetings, aligning with Mill's liberty and Locke's equality of authority. Criminalizing vices would imprison everyone, as all have them. The classical-liberal conclusion: prioritize individual autonomy, learning from mistakes, and non-coercive norms over state bans.

**Key points:**

- Vices harm only oneself and should not be criminalized, unlike crimes that harm others, as per Lysander Spooner.
- Government can address ignorance through warnings (e.g., cigarette pictorials, food allergens) but not bans on informed choices.
- Social norms enforce good behavior via ostracism without state coercion, offering a libertarian alternative to paternalism.
- State paternalism risks abuse due to self-interested actors, per Public Choice Theory.
- Harm from vices is contextual and degree-based, not absolute, preserving individual pursuit of happiness.

**By Abhimanyu Gupta**

* * *

I went into this Colloquium expecting to understand the limits of government paternalism and see if we could have a framework for it. And while I was there, maybe get answers to equally important (if not more so) questions like – *Can the state declare eating Chole Bhature (my soul food) a crime?* Possibly because it is loaded with [bad cholesterol](https://food.ndtv.com/food-drinks/6-most-unhealthy-indian-street-food-you-must-avoid-1750241), and one could argue that bingeing on it is a vice. 

With such questions in my mind, we began by discussing an excerpt from Sarah Conley’s 2012 text, *[Against Autonomy: Justifying Coercive Paternalism](https://www.google.co.in/books/edition/Against_Autonomy/Hl4hAwAAQBAJ?hl=en&gbpv=1)*. Her premise was that human beings aren’t entirely rational as recent advances in the field of Behavioural Economics and Psychology have shown. And so, exceptions could be made to John Stuart Mills’ idea of liberty – wherein we respect the decisions of individual agents, when those decisions affect no one other than the individuals themselves. She argues that we should not let the idea of the autonomy of an individual degenerate to a point where we are mute spectators to individuals harming themselves. After all, should one stand by and watch a person consume antifreeze mistakenly for a sports  drink? No, right? And so maybe there was a case for saving people from themselves at times – a case for saving them from alcohol, cigarettes, marijuana, or simply from Chole Bhature! 

The ensuing discussion brought forth some crucial points. Our pursuit of vices at times is simply because of our ignorance of the harm they may cause. So, there may be a use of government legislation when addressing issues of ignorance or information asymmetry. However, the pursuit of a vice, once ignorance or information asymmetry is addressed, should be left to the individual. A case in point is cigarettes, where the government mandates [pictorial warnings](https://www.thehindu.com/sci-tech/health/policy-and-issues/cigarette-packs-to-have-pictorial-warnings-on-both-sides/article6504389.ece) to individuals. This is similar to [allergy warnings](https://www.scconline.com/blog/post/2021/06/11/fssai/#:~:text=The%20present%20Regulations%20come%20with%20a%20host%20of%20new%20requirements%20viz.%20mandatory%20declaration%20of%20allergen%20information%2C) on packets of food items or the [maximum recommended consumption](https://www.redbull.com/in-en/energydrink/can-you-drink-too-much-of-red-bull-energy-drink#:~:text=Many%20authorities%20around,to%20200%20mg.) of caffeinated sports drinks. However, the question of an outright ban needed further interrogation. 

Largely, participants agreed that the paternalistic benevolence of the state could also be questioned in the face of self-interest. Even if we agree to the legislation of vices by the state, what is the guarantee that the state, composed of fallible humans, will always have our best interests at heart? And isn’t this precisely what the field of [Public Choice Theory](https://spontaneousorder.in/self-interest-drives-people/) has cautioned us against? 

Going forward we probed the idea of what exactly is a vice and what is a crime? [Lysander Spooner](https://cdn.mises.org/vices_are_not_crimes.pdf) gave us a good starting point: 

“Vices are those acts by which a man harms himself or his property, crimes are those acts by  which one man harms the person or property of another…. vices are simply the errors which a  man makes in his search after his happiness.” 

So, prima facie Chole Bhature are in the safe. Since I am not harming any other person or their property, at most, bingeing on Chole Bhature can be classified as a vice. On second thought though, it could be construed as a crime if I shared my plate of Chole Bhature with someone and they ended up with bad cholesterol! However, being a good samaritan, I wouldn’t want to take that chance and ‘harm’ another person (assuming that I am aware of their existing high cholesterol levels). No wonder good samaritans like me don’t share Chole Bhature!

But what about harming oneself, you may ask. And that point did crop up. To dissect that further we interrogated what is harm and how does one quantify it objectively? Take bhang for instance. In Northern India, it is integral to Holi celebrations. Broadly we can agree that consumption once a year is not a serious issue. But what about it becoming an addiction and the person experiencing withdrawal symptoms when given a miss? Or take alcohol for that matter. Drinking on special occasions may not be an issue, but what if one is addicted to the point of experiencing withdrawal symptoms. Maybe then we can deem it a vice. Only when this addiction to alcohol harms others (for instance, domestic violence as a result of alcoholism), does it become a crime.

Notice the use of the word ‘maybe’ in the above paragraph. I used it intentionally. At the colloquium, we  realised that harm isn’t absolute but often a question of degree. The real challenge in the above examples was to determine the consumption level, on the spectrum of total abstention to complete addiction, at which an activity could become a vice. 

*Further, a vice might not even be an intrinsic character of the act itself.* Take lying for instance. Most of us would jump to declare it a vice. However imagine this scenario which was thrown at us by the moderators of the colloquium – You are living in Hitler’s Germany and hiding a Jew friend in your cabinet. A Nazi soldier knocks on your door to enquire if there are any Jews hiding around in your house. For they need to be taken to the concentration camps. Should you tell the truth? Remember, your good friend could end up in the gas chambers. As you would expect most of the participants agreed that it was acceptable to lie here. But then what happened to our principle that lying is a vice? The example illustrated that there was more to classifying an act as a vice. It wasn’t the act itself but the context of the act that was equally important and decided the nature of an act. 

But even if we could define it objectively, it boiled down to how much harm one was willing  to take upon oneself in the pursuit of their idea of happiness. The state, by putting a limit on this pursuit, was curtailing individuals’ exploratory urge to seek happiness. At most, we understood vices as a wrong turn on our individual explorations. 

[Lysander Spooner](https://cdn.mises.org/vices_are_not_crimes.pdf) had an interesting analogy in this regard. He said, parents may prevent their kids from  committing mistakes but that wouldn’t allow the child to learn. No amount of talking about  fire will tell a child about the nature of fire. Of course, there was a case for advising but good  parenting entailed allowing mistakes and letting the child figure out right from wrong and find  what makes him/her happy. To a first-order approximation, paternalistic interventions of the state could also be seen in the same light. An adult navigating the vices of the world is also  learning. The state by inhibiting the learning and discovery process was only acting to the  detriment of the individual. 

Apart from these abstract philosophical arguments, we also dealt with a pragmatic question – *Is there anybody without a vice?* We agreed that it would be hard to find an individual with no vices, given that the definition of vice itself remains unclear. And so, if the government was to take cognizance of all vices and punish them impartially then everybody would be in prison for some or the other vice. There would be no  one left outside to lock the doors of these prisons! I am sure that’s an indefensible position to even the most ardent supporter of government paternalism. 

During the colloquium, regulation emerged as a fair compromise. However, there remained a need to circumscribe the role of the state in regulating behaviours of individuals. Which led us to the question – *Could good behaviours be ensured through ways other than the fear of a coercive state?* 

Peter McWilliams’s text, *[Ain’t Nobody’s Business if You Do](https://books.google.co.in/books/about/Ain_t_Nobody_s_Business_If_You_Do.html?id=nsQvU_nxIX4C&redir_esc=y)*, on the difference between norms and customs of the society, and the laws of a state offered a useful pointer. That we obey the laws of the state isn’t surprising, given the coercive, policing powers of the state. But why do we obey customs and norms of a society that doesn’t have legal, coercive powers? Turns out the answer is surprisingly simple. We all want to fit in. If our behaviour is sufficiently eccentric, society would punish us simply by ostracising us. 

So, in principle, I could have come dressed to this colloquium in aluminium sheets, walked backward, and insisted on shaking hands while everyone was doing a namaste or an ‘elbow bump’ as a precaution against COVID-19. But it is the strange stares from everyone that force me to be more careful. 

And notice that these norms are spontaneously evolving. Shaking hands at a colloquium was  after all acceptable before COVID-19. The beauty of such behaviours is that none of them are mandated. Nobody has to tweak a law somewhere for us to obey it. Nor is the policing arm of the state ensuring compliance. It’s simply our desire to fit in that does the trick. 

This shows that society has equal, if not more, power over an individual’s behaviour than law enforcement does. Moreover, it strikes a good compromise between [John Stuart Mill’s idea of  liberty](https://home.csulb.edu/~jvancamp/Odyssey/Mill_Liberty.html#:~:text=%232.%20The%20object,individual%20is%20sovereign.) and enforcement of good behaviour without penal coercion. 

Further such an arrangement for dealing with vices is in line with [John Locke’s libertarian idea of equality](https://fee.org/articles/liberty-the-other-equality/), which demands “equality of authority”. The argument goes that we all have equal faculties. Thus, there cannot be a case for subordination of one by the other. Further governments cannot possess a right that citizens lack. This implies, just as citizens have no rights over another person or their property, the state can have no rights over another person or their property. And this should apply even when the individual is pursuing a vice. 

And for the Chole Bhature warriors out there like me, our dish is safe from the coercive pries of the state! I assure you I tried my best to put forth our case.

*Read more: [Smart Agriculture in India](https://spontaneousorder.in/smart-agriculture-in-india/)*

* * *

**About Abhimanyu Gupta**

Abhimanyu is an Electronics & Instrumentation engineer by training. He earlier worked in the Analog VLSI industry and is currently dabbling in the drone startup space. Football and Chole Bhature are what he lives for. The field of Economics and Public Policy fascinates him. Playing the piano or flute, and reading non-fiction are his hobbies.

## The inflation dragon will not be easy for RBI to tame

Original: https://www.spontaneousorder.in/p/the-inflation-dragon-will-not-be-easy-for-rbi-to-tame

Author: Spontaneous Order

Published: 2022-04-25T13:05:34.000Z

Topics: inflation, monetary-policy, rbi, macro-economics

> The inflation problem can no longer be ignored. Price pressures have spread across the economy—and there are few signs right now that they will abate soon. The Reserve Bank of India (RBI) has begun to tighten monetary policy without explicitly saying so

**Summary:**

Inflation in India is persistent and widespread, posing a challenge for the Reserve Bank of India (RBI) to tame without delay. Headline inflation has averaged 5.5% since April 2021, with core inflation even higher at 6%, creating a false sense of security from temporary drops like September 2021. Pressures are broad-based, as shown by trimmed means and diffusion indexes excluding outliers, not confined to a few items. Drivers include supply-side factors like oil prices, higher money supply, rural wages, domestic constraints, and rupee depreciation, outweighing weak demand. Compared to 42 major economies, India has 17 with higher inflation but 24 lower; relative to targets, it fares better than the US or UK but worse than Japan or Indonesia. Inflation expectations are rising, and RBI has raised its FY2022-23 forecast from 4.5% to 5.7%. With policy acting with a 3-4 month lag, RBI's implicit tightening risks being behind the curve, demanding proactive measures to anchor expectations and prevent entrenched inflation from a classical-liberal viewpoint favoring stable money for economic freedom.

**Key points:**

- Headline inflation averaged 5.5% and core 6% since April 2021, indicating sticky pressures despite weak demand.
- Broad-based inflation confirmed by trimmed means and diffusion indexes, not limited to idiosyncratic shocks.
- Key drivers include oil prices, money supply, rural wages, supply constraints, and rupee depreciation.
- RBI raised FY2022-23 inflation forecast to 5.7% amid rising expectations, risking being behind the curve due to policy lags.

**By Niranjan Rajadhyaksha**

* * *

The inflation problem can no longer be ignored. Price pressures have spread across the economy—and there are few signs right now that they will abate soon. The Reserve Bank of India (RBI) has begun to tighten monetary policy without explicitly saying so. Many companies have indicated that they will increase their product prices. The government’s decision to provide free food for another six months could at least partly be explained by the need to protect the purchasing power of households.

It is useful right now to look more closely at Indian inflation, beyond the headlines. There are five issues worth focusing on.

First, inflationary pressures have been lying in wait for far longer than most people realize. The sharp drop in headline inflation in September 2021 may also have created a false sense of security. It began climbing soon after. The average numbers over the past year tell a more worrisome story. Headline inflation has averaged 5.5% since April 2021. Average core inflation—which excludes volatile food and fuel prices—has been even higher at 6%. Other measures of core inflation, which exclude the prices of petrol, diesel, gold and silver, have also been flashing amber. So, even though the discussion after every monthly data release looks at the impact of a few individual items in the consumer price index, the broader story is that inflation has been sticky. Why core inflation has been persistently high despite weak demand is an analytical puzzle that economists have not yet convincingly answered.

Second, inflation has not been restricted to a few items. In the US, those who argued that the price pressures in that country were transitory because they were concentrated in a few areas such as used cars and timber have now seen inflation spread. It is much the same story in India. There are various measures to show widespread price pressures are across the Indian economy. One such measure is the trimmed mean. The outliers in the price index, or the items that have seen the largest and least price increases, are removed from the calculation. Various trimmed means in India show that price pressures are not concentrated in a handful of items that have been hit by idiosyncratic demand or supply shocks. It is much the same with diffusion indexes, which calculate the proportion of items that drive the rise in any index, such as the one for consumer prices.

Third, the drivers of inflation in India are worth examining. Recent inflation has generally been fuelled by goods inflation rather than services inflation. This is true of many other countries where demand for goods recovered faster than demand for services, and that could change as consumers begin going out with greater confidence. A sharp rise in hotel prices is one early indication. The other way to look at the drivers of inflation is to see whether pressures are coming from the supply or demand side. In its latest monetary policy report released earlier this month, the Indian central bank has used a statistical technique called vector auto regression to show that consumer prices are being pushed up by factors such as oil prices, higher money supply, rural wages, domestic supply constraints and rupee depreciation. Weak demand is working in the opposite direction, to keep inflation down. Finally, the role of imported inflation is growing in importance, which is no surprise given the resurgence of inflation in most advanced economies and the sharp increase in global commodity prices.

Fourth, where does India stand compared to other major economies on the inflation front? Much is made of the fact that US inflation is now higher than Indian inflation, but a wider look tells us a more sobering story. The Economist tracks the latest data from 42 major economies every week. There are 17 countries which have higher inflation than us, but 24 countries with lower inflation. So while India is not a global inflation outlier, as it was a decade ago, it is not a safe zone either. However, each country has its own macro fundamentals, and a more useful measure that I prefer is how far inflation in any country has drifted away from its formal or informal inflation target. This exercise can only be done with data from countries where central banks have numerical inflation targets, but it shows India in a better light. As this column pointed out two weeks ago, there are three groups of countries. The first group comprises countries such as the US, Brazil, Germany, Mexico and the UK, where the most recent inflation reading is way above target. The second group has countries such as France, South Korea, Taiwan and South Africa, where inflation is slightly above comfort levels. And then there are countries where inflation is still below target. These countries include Japan, China, Indonesia and the Philippines.

Fifth, Indian monetary policymakers have to look at two other measures of inflation as well: inflation expectations and the forecast of future inflation. Inflation expectations have been drifting up in India for some time. Think of this as inflation psychology in the country. The central bank has also increased its inflation forecast for the new fiscal year that began on 1 April. RBI had said in February that it expected inflation to average 4.5% in fiscal 2022-23; that forecast has now been raised sharply to 5.7%, though the central bank still expects quarterly inflation to sequentially come down over the year.

The inflation forecast is important because a central bank has to design policy by looking through the windshield rather than the rear-view mirror. The reason: Monetary policy operates with a lag of three or four months, so what RBI does now will only have an effect a year or so down the line. That is why our central bank being behind the curve is now risky.

*This article was originally published in [Mint](https://www.livemint.com/opinion/columns/the-resurgent-inflation-dragon-will-not-be-easy-for-rbi-to-tame-11650386091606.html) on April 20, 2022.*

*Read more: [Smart Agriculture in India](https://spontaneousorder.in/smart-agriculture-in-india/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Smart Agriculture in India

Original: https://www.spontaneousorder.in/p/smart-agriculture-in-india

Author: Spontaneous Order

Published: 2022-04-13T18:16:14.000Z

Topics: agriculture, agritech, india-policy, farm-innovation

> Agriculture and allied sectors are the primary source of livelihood for nearly 55 per cent of India’s population (Census 2011), but accounted only for approximately 17.8 per cent of the country’s Gross Value Added in 2019-20. The yields on cereal crop

**Summary:**

India's agriculture, primary livelihood for 55% of the population (Census 2011), contributes just 17.8% to GVA (2019-20), with cereal yields 50% lower than in the US or China due to structural barriers like average 1-hectare holdings (86% small/marginal), intermediaries, credit shortages, and limited tech access. These issues hinder efficiency, especially as ag output feeds industries like retail. Agritech—IoT, big data, AI, drones, sensors—addresses 'unknowns' like weather and soil via predictive analytics, crop recommendations, and livestock monitoring, promising higher yields and profitability. Government initiatives at central/state levels support integration, alongside 500+ startups (e.g., Fasal, DeHaat, CropIn) boosted by Digital India. From a classical-liberal lens, persistent challenges—blanket solutions ignoring local contexts, fragmentation, small farmers' cost concerns, slow adoption, and advisory disconnects—demand market-friendly reforms: stakeholder synergy including farmers, ramped-up investment/R&D, and regulatory easing to build a robust ecosystem unleashing agritech's potential.

**Key points:**

- Agritech using AI, IoT, and drones minimizes agricultural uncertainties to boost yields and efficiency for small Indian farmers.
- Over 500 agritech startups like Fasal and CropIn are disrupting intermediaries and improving market linkages via Digital India.
- Challenges include non-localized solutions, land fragmentation, and slow tech adoption among cost-sensitive smallholders.
- Policy must prioritize stakeholder synergy, increased R&D investment, and regulatory simplification to scale agritech.

**By Ankita Sharma**

* * *

Agriculture and allied sectors are the primary source of livelihood for nearly 55 per cent of India’s population (Census 2011), but accounted only for approximately 17.8 per cent of the country’s Gross Value Added in [2019-20](https://www.indiabudget.gov.in/). The yields on cereal crops are about 50 per cent lower in India, than in countries such as the United States or [China](https://assets.ey.com/content/dam/ey-sites/ey-com/en_in/topics/start-ups/2020/09/ey-agritech-towards-transforming-indian-agriculture.pdf?), and speak to the numerous structural barriers that continue to persist in the sector. With agricultural output being utilized as important input for various industries, including retail and e-commerce, the importance of agriculture and improving yields becomes all the more pressing. 

The average size of farm holdings in the country are just over 1 hectare, with small and marginal farmers holding nearly 86 per cent of the [total.](https://www.insightsonindia.com/2020/07/10/the-average-size-of-holdings-has-shown-a-steady-declining-trend-over-the-last-three-decades-what-are-the-challenges-faced-by-farmers-due-to-fragmentation-of-land-what-needs-to-be-done-in-this-regard/#:~:text=Body%3A,of%20the%20total%20land%20holdings.) Small holders find it particularly difficult to invest in expensive technologies and other inputs that would improve efficiency. Additionally, the existence of a large number of intermediaries across the value chain, challenges in access to credit and technology, limited sales channels, and lack of digital infrastructure have inhibited agricultural potential. These distinctive attributes of the agriculture sector in India have made it imperative to look towards policies that improve yield, simplify value chain networks, democratize digital infrastructure, and improve access to credit and insurance.

An important solution lies in the rapid adoption of agritech, defined here as technologies and tools that improve yield, efficiency and profitability by leveraging Internet of Things, big data, artificial intelligence, machine learning, drones, and sensors in agricultural processes to track, monitor, automate and [analyze.](https://internetofthingsagenda.techtarget.com/definition/smart-farming) 

The rationale behind the use of such emerging technologies is to minimize the impact of the ‘unknowns’ of agriculture. For instance, weather, soil and climatic conditions have historically been an important determinant of the agricultural processes in India. Using predictive technologies to detect erratic weather, sensors to map the specific type of climate and soil in an area, and machine learning algorithms that determine the appropriate crops based on this data, can substantially improve the quality and quantity of yield. In the dairy and livestock vertical, the use of sensors to monitor the health and nutrition of cattle and drones to track herds can improve efficiency and traceability.

The agritech space in the country involves various actors, including think tanks, research laboratories, government, incubators, and startups. The Central as well as various State governments have undertaken numerous initiatives to enable and support the integration of smart technologies in agriculture. A few of these initiatives have been outlined below.

[

![](https://substackcdn.com/image/fetch/$s_!d8Xy!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3d78c308-a63b-48e7-a2a3-d367bb04e885_553x570.png)



](https://substackcdn.com/image/fetch/$s_!d8Xy!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3d78c308-a63b-48e7-a2a3-d367bb04e885_553x570.png)

Table: Central and state govt initiatives

Recognizing the growing necessity in the country for the integration of such solutions, agritech startups have been driving innovation towards bridging the various gaps that persist along the value chain. Acting as the link between farmers, wholesalers, retailers, and consumers, these startups have been improving market linkages, while disrupting traditional agricultural systems with innovative and affordable solutions. There are over 500 agritech startups in the country, which witnessed a significant rise with the government’s Digital India campaign that has prioritized the creation of digital infrastructure for all. Some notable agritech startups which are utilizing cutting-edge technologies to drive solutions in the sector include Fasal, DeHaat, Clover, CropIn, and Intello Labs.

Even as the various stakeholders are driving smart agriculture in India, certain fundamental issues must still be addressed to effectively bring about this digital revolution. These include the issuing of blanket solutions as opposed to localized recommendations which are sensitive to geographical, socio-cultural and demographic requirements, the fragmented and unorganized structure of agriculture that involves multiple levels of intermediaries, the hesitation of small holders to undertake technologies that would not be commercially viable and cost-efficient. Additionally, even with the launch of initiatives such as Digital India, the adoption and penetration of technology is a slow process that diminishes investor interest. The lack of synergy between the various advisories and their disconnect from on-ground situations also perpetuate low uptake of smart technologies.

Therefore, the process of unleashing the true potential of [agritech in the country](https://www.entrepreneur.com/article/366366) would involve developing a synergistic relationship between the various stakeholders in the process, including the farmers themselves, enhancing investment and R&D to constantly improve and update solutions, and further improving the regulatory environment to ease accessibility of startups and other companies to create a robust ecosystem.

*Read more: [Predictive Policing: Drenched in Biases, Draped in Numbers](https://spontaneousorder.in/predictive-policing-drenched-in-biases-draped-in-numbers/)*

* * *

**About Ankita Sharma**

Ankita is Assistant Vice President, Policy, Strategy & Research, Invest India.

## Predictive Policing: Drenched in Biases, Draped in Numbers

Original: https://www.spontaneousorder.in/p/predictive-policing-drenched-in-biases-draped-in-numbers

Author: Spontaneous Order

Published: 2022-04-11T12:51:29.000Z

Topics: predictive-policing, privacy-rights, police-bias, data-surveillance

> Introduction Policing has had, within its folds, the essential element of crime prevention since antiquity. This wasn’t confined to just deterrent effects emanating from deified morality or fear of coarse and arbitrary punishment; but was in many cases

**Summary:**

Predictive policing, leveraging algorithms to forecast crime via theories like rational choice and crime pattern, promises objective prevention but amplifies biases from historical arrest data, as evidenced by LAPD's PredPol and LASER, NYPD's 2012 software, and Chicago's ineffective 'heat list' targeting people likely to commit gun violence. These systems perpetuate systemic racism through feedback loops and dirty data, especially in jurisdictions with unlawful police practices. In India, amid casteist and communal policing biases, Delhi's CMAPS and Hyderabad's Integrated People Information Hub aggregate intrusive data from ISRO, banks, biometrics, passports, phone numbers, utilities, and family profiles, flouting the Principle of Least Privilege. The Criminal Procedure (Identification) Bill 2022 mandates 75-year retention of fingerprints, iris scans, and biological samples from anyone arrested. From a classical-liberal lens, this draconian surveillance invades privacy and discriminates against marginalized groups, prioritizing state control over individual liberties. The author urges algorithmic accountability laws like NYC's Local Law 49, step-by-step auditing, and citizen lawsuits invoking privacy precedents to harmonize tech with rights.

**Key points:**

- Predictive policing algorithms magnify biases in arrest data, creating feedback loops that target minorities and communities of color.
- India's CMAPS and Hyderabad's Integrated People Information Hub collect vast personal data without safeguards, enabling mass surveillance.
- The Criminal Procedure (Identification) Bill 2022 requires 75-year retention of biometric data from arrested persons, risking privacy violations.
- Reforms must include legislative algorithmic accountability, technical auditing, and legal challenges to protect fundamental rights.

**By Gokul K. Sunoj**

* * *

**Introduction**

Policing has had, within its folds, the essential element of crime prevention since antiquity. This wasn’t confined to just deterrent effects emanating from deified morality or fear of coarse and arbitrary punishment; but was in many cases linked to the idea of surveillance and *pre-emptive action* as well. 

Back in the days of Ashoka, surveillance is said to have been performed through an elaborate system of spies. Indeed, a [police state](https://www.jstor.org/stable/41855800?searchText=Police%2Bin%2BAncient%2BIndia&searchUri=%2Faction%2FdoBasicSearch%3FQuery%3DPolice%2Bin%2BAncient%2BIndia%26so%3Drel&ab_segments=0%2Fbasic_search_gsv2%2Fcontrol&refreqid=fastly-default%3Af88bc660fcd8a8e214bd920e2a762150&seq=1&metadata_info_tab_contents). The information gathered was assessed, and probable criminals, rebels, insurgents and the like were promptly taken into custody.

Which brings us to an important questions – *what about new-age predictive policing? Is it any better?* As appealing as it sounds, the relatively novel fanfare behind the supposedly “objective” algorithm-based prediction of datasets, crime records and criminal profiles may not be truly fair and just. Centuries ahead, it is disturbing to ponder if in an era of lofty ideals of International Human Rights*,* we still seek solutions that are no more refined and no less draconian.

**Predictive Policing**

[Predictive policing](https://www.brennancenter.org/our-work/research-reports/predictive-policing-explained) today is essentially the use of algorithms to analyse massive amounts of information to predict and possibly prevent crimes in the future. The theoretical justification for such predictive policing comes from a few relevant and proven theories in criminology, such as *rational choice theory* and *crime pattern theory.* Together, known as the *[blended model](https://www.rand.org/content/dam/rand/pubs/research_reports/RR200/RR233/RAND_RR233.pdf),* it proposes that criminals and victims follow common and overlapping patterns of behaviour. The presence of these traits indicates a higher likelihood of crime. Geographical and temporal features point towards when and where such crimes might occur. Criminals too, while contemplating crimes, take many of these factors into consideration to avoid the risk of getting caught. With legitimacy derived from the same, data is collected to compute possible hotspots within places, communities, ethnic, racial and religious settlements and even households in order to take pre-emptive action against crime.

The most infamous example of algorithm-driven predictive policing comes from the state of Los Angeles and its Police Department, the LAPD. From LASER, a gun-violence likeliness predictors, to [PredPol](https://theintercept.com/2018/05/11/predictive-policing-surveillance-los-angeles/), a software-based assessment of crimes “hotspots”, these *Bureau of Justice Assistance* funded programs have been the subject of scathing political, ethical and even constitutional scrutiny and criticism. Similar is the case with the New York Police Department’s predictive policing software started in 2012. It was meant to help identify [several offences](https://www.thedailybeast.com/red-flags-as-new-documents-point-to-blind-spots-of-nypd%20predictive-policing), from felony assaults and burglaries to shootings and [motor vehicle accidents](https://pubsonline.informs.org/doi/10.1287/inte.2016.0860). The Chicago Police Department has gone several steps further and has made a *heat list* of *people* most likely to commit gun violence.

**Faultlines**

Behind this theorised marvel is a tale of disastrous and dreadful biases and perilous consequences. Most of these [methods were not just ineffective](https://www.theverge.com/2016/8/19/12552384/chicago-heat-list-tool-failed-rand-test) but have also been subject to the criticism for targeting communities of colour. One of the [several reports](https://igchicago.org/wp-content/uploads/2020/01/OIG-Advisory-Concerning-CPDs-Predictive-Risk-Models-.pdf) on the same showed that the predictor relied heavily on *previous arrest records* – and not even those arrests that ended up in convictions. This meant that all the biases that went into the classical arrest of a person, got further magnified by the repetitive feeding of the same into software; these algorithms then keep marking such people, communities and areas as ones of *high risk* and the chain continues. This *feeds into* age-old evils as we know them, including *systemic racism* and *selective oppression*.

Additionally, the documentation of these algorithms and the data fed into them were (and still are) questionable. Audit records are not maintained systematically, this renders checks and balances by civic society but a distant dream. More alarmingly, studies reveal that the very collection of these datasets is at times corrupt, and more often than not, unethical in means. “Deploying predictive policing systems in jurisdictions *with extensive histories of unlawful police practices* presents elevated risks that *[dirty data](https://www.techpolicy.com/Articles/D/Dirty-Data-Bad-Predictions-How-Civil-Rights-Violat.aspx)* will lead to flawed or unlawful predictions, which in turn risk perpetuating additional harm via *feedback loops throughout the criminal justice system*.”

**Indian Snapshot**

The Indian stage, if anything, is set against an even more dilapidated background drenched in biases. With a police force influenced by [casteism and communalism](https://thewire.in/caste/police-casteist-communal#%3A~%3Atext%3DOur%20society%20is%20divided%20on%2Cbiases%20and%20prejudices%20with%20them), and an even larger society validating these prejudices. Lower caste and religious minorities are known to have been at the receiving end of constant [systemic discrimination](https://minorityrights.org/wp-content/uploads/2017/06/MRG_Rep_India_Jun17-2.pdf) and [fundamental rights violations](https://www.livemint.com/Politics/ino3tfMYVsd6VVGUdWXB8H/The-many-shades-of-caste-inequality-in%20India.html). Feeding humungous datasets that scream discrimination to unguarded algorithms will only perpetuate these horrendous practices and incriminate larger swaths of innocents from minority communities. The [Crime Mapping Analytics and Predictive System](https://www.vidushimarda.com/storage/app/media/uploaded-files/fat2020-final586.pdf) (CMAPS) from Delhi and the Integrated People Information Hub sourced software that the Hyderabad Police employs gathers data from places as diverse as the Indian Space Research Organisation, bank transactions, family background, biometrics and even [passport details](https://www.deccanherald.com/national/south/telangana-govt-denies-surveillance-snooping-on-citizens-774306.html).

Integrated People Information Hub that claimed to offer a ‘360 degree view’ on every citizen is an intrusive database that stores not just *information on arrested people, offenders lists, missing person reports, FIRs, case diaries* and the like; but also [personal details](https://www.firstpost.com/tech/news-analysis/a-centralised-database-of-citizens-in-the-state-of-telangana-is-under-consideration-3696851.html) such as *phone numbers, power and water connections, tax payments, voter IDs, RTA licences, relationship profile etc*. In short, this database collects and stores [all such data](https://archive.factordaily.com/hyderabad-police-surveillance-integrated-information-hub/) that an individual would ideally prefer to shield from public disclosure.

It is also pertinent in this context to invoke the *Principle of Least Privilege*, which expounds that for any access or use of private information, (i) there is a prerequisite of a legitimate process coupled with a legitimate purpose, and (ii) only such minimal data as is absolutely necessary must be beckoned and utilised. In the case at hand, the Telangana Govt. intends to open such information to all departments without sound safeguards; clearly so, the impugned affair suffers from acute incongruence with these [principles](https://thewire.in/government/hyderabad-smart-policing-surveillance).

Making matters worse, it is unsettling to digest the fact that even post-judicial scrutiny, this systematic bias stands [glaring](https://blogs.lse.ac.uk/humanrights/2021/04/16/predictive-policing-in-india-deterring-crime-or%20discriminating-minorities/). Punishments adjudged by the Courts are disproportionately severe and rather discriminatory when the marginalised are in question. Not to much surprise, and in fact much to our dismay, the same biases that predictive systems showed in the United States’ NYPD and LAPD speckle the Indian terrain.

Further, the newly tabled *[Criminal Procedure (Identification) Bill of 2022](https://prsindia.org/billtrack/the-criminal-procedure-identification-bill-2022)* cannot be overlooked; the proposed piece of legislation intends to collect fingerprints, palm prints, physical and biological samples and even signatures and handwritings of ‘prisoners’ – defined therein as ‘any person arrested under any law’. The draconian ramifications of the Bill upon the various facets of liberties and privacy remains to be observed; however, with explicit legislative intentions such as “*establishing the crime of the accused*”, read along with a clause that pegs the data retention period as 75 years, fearful scepticism permeates the implications of this Bill. 

**Conclusion**

The case here is one of a conflict between – (a) the possible fortunate predictability of crime and its prevention thereof; and, alternatively (b) the Orwellian, blatant invasion of privacy, compounded by an aggravation of *incrimination and discrimination* of selective historically oppressed sections of society. Harmoniously reaping technological benefits while discarding biases would then be the ideal way to go about it. Perhaps, in this case, reforms and solutions have to come from numerous facets. Legislatively, civic societies can push for laws that introduce algorithmic accountability – the likes of which can be seen in the form of *[Local Law 49](https://www.jdsupra.com/legalnews/nyc-s-task-force-to-tackle-algorithmic-93703/),* New York City. Tech developers can introduce mechanisms such as “[step by step algorithm auditing](https://www.hks.harvard.edu/centers/mrcbg/publications/awp/awp130)” to scrupulously monitor such codes and ascertain fairness. Citizens must also, in legal rigour, challenge the existing predictive systems. Citizens and civil society can evoke numerous precedents that promise [privacy](https://globalfreedomofexpression.columbia.edu/cases/puttaswamy-v-india/), and call for [neutrality](https://www.lawyerservices.in/Madhu-and-Another-Versus-Northern-Railway-and-Others-2018-01-17) in policies and laws that provide protection from discrimination.

Little need be said about how these methods of mass surveillance are *prima facie* infringements upon the fundamental rights embodied in the Indian Constitution. Law and order practices that disregard privacy, if left unchallenged, will pave way for arbitrary and unbridled demolition of the individual’s privacy and liberties. 

*Read more: [Why the MPC must pay attention to recent monetary arithmetic](https://spontaneousorder.in/why-the-mpc-must-pay-attention-to-recent-monetary-arithmetic/)*

* * *

**About Gokul K. Sunoj**

Gokul is a student at The National University of Advanced Legal Studies, Kerala. He has keen interest in Cyber law and Data policy; especially its implications in International Law and Relations. He also serves in various editorial and research roles in Centres and forums within the University.

## Why the MPC must pay attention to recent monetary arithmetic

Original: https://www.spontaneousorder.in/p/why-the-mpc-must-pay-attention-to-recent-monetary-arithmetic

Author: Spontaneous Order

Published: 2022-04-08T14:36:01.000Z

Topics: monetary-policy, inflation-targeting, rbi-mpc, money-velocity

> Inflation worries are rapidly spreading across the world. Price pressures are not the same across countries, despite the fact that all of them have been hit by very similar supply shocks over the past two years. What is different is the extent of the de..

**Summary:**

Inflation varies globally due to differing demand stimuli post-COVID supply shocks, with countries like the US and UK far above targets, while Japan and China remain below. India's February inflation slightly exceeded the RBI's 2-6% band upper end and 2.1 percentage points above the midpoint, with both headline and core inflation elevated for 30 months, risking unanchored expectations despite no broad wage pressures. RBI flooded the economy with liquidity via forex purchases, government cash balances, excess bank reserves, and currency in circulation, but Indian households' precautionary excess cash holdings—₹3.12 trillion or 1.6% of broad money stock versus pre-pandemic—have lowered income velocity of money (GDP/M3), muting inflationary effects. As velocity normalizes with reduced cash hoarding, this monetary expansion could add upward pressure on inflation, warranting MPC attention to 'monetary arithmetic' beyond real-side factors. While repo rate hikes have weak justification amid rising market rates, a stronger case exists for higher reverse repo rate, shifting stance from accommodative to neutral, and dovish guidance, especially as RBI updates its higher inflation forecast.

**Key points:**

- Global inflation divergences reflect varying post-COVID demand stimuli, placing India above its 2-6% target midpoint by 2.1 points with persistent pressures.
- Excess household cash holdings of ₹3.12 trillion have reduced money velocity, dampening inflation from RBI's liquidity injection.
- Normalization of money velocity risks additional inflation from past monetary expansion, demanding MPC vigilance on monetary factors.
- MPC should prioritize higher reverse repo rate, neutral stance shift over repo hikes amid weak case for the latter.

**By Niranjan Rajadhyaksha**

* * *

Inflation worries are rapidly spreading across the world. Price pressures are not the same across countries, despite the fact that all of them have been hit by very similar supply shocks over the past two years. What is different is the extent of the demand stimulus that various governments have injected into their economies in response to the crisis. It is thus quite likely that the extent of stimulus explains the different shades on a global inflation heat map, though trade intensity will also play a part.

One way to assess the risk in different countries is by checking how far inflation has drifted away from either formal or informal inflation targets. There are three groups of countries. The first group comprises countries such as the US, Brazil, Germany, Mexico and the UK, where the most recent inflation reading is way above target. The second group consists of countries such as France, South Korea, Taiwan and South Africa, where inflation is slightly above comfort levels. And then there are countries where inflation is still below target. These countries include Japan, China, Indonesia and the Philippines.

What about India? A lot depends on how the inflation target is interpreted. Inflation in February was slightly higher than the upper end of the 2-6% range that the Reserve Bank of India (RBI) has been given as its formal target by the government. However, it is 2.1 percentage points more than the midpoint of the inflation target band. The entire idea of giving the Indian central bank a range rather than a point target is to ensure that it does not hastily overreact to temporary supply shocks. However, both inflation as well as core inflation have been high over the past 30 months. There is also the risk that inflation expectations will lose their anchor if these price pressures persist for too long.

There does not seem to be any generalized wage pressure in the economy as yet, but many Indian companies have indicated to their shareholders that they will pass on higher input costs to their consumers. RBI is expected to raise its inflation forecast later this week, which is important because an inflation-targeting central bank in effect uses its inflation forecast as the intermediate target of monetary policy. How the six members of the monetary policy committee (MPC) react to a higher inflation forecast when they meet this week will thus be an interesting high-wire act to watch.

There is only a weak case for raising the repo rate right now, but market interest rates have been increasing over the past few weeks. So have bank deposit rates. However, there is a stronger case for some combination of a higher reverse repo rate, a change in the policy stance from accommodative to neutral and maintaining dovish guidance for financial markets.

Much of the public discussion on Indian inflation has focused on the real side of the economy. The rest of this column looks at another set of issues that deserve some attention—on the monetary side.

Like its peers around the world, RBI flooded the economy with liquidity to protect the economy after the covid pandemic brought the world to a standstill. The four main fundamental drivers of liquidity in the economy are net purchases of foreign exchange by the central bank, cash balances of the government, excess commercial bank reserves with the central bank, and currency in circulation (which is cash kept in bank vaults plus the cash holdings of households and firms).

Indian households have held on to more cash for precautionary reasons since the pandemic began, even though digital payments have increasingly been used for transactions. This excess cash holding—around 1.6 percentage points in terms of the stock of broad money in India compared to pre-pandemic levels—has been a ‘leakage’ from the liquidity generation process. A quick estimate is that Indians now hold ₹3.12 trillion of excess cash compared to the fiscal year ended March 2019.

Decisions to hold more financial savings as cash rather than as bank deposits have, expectedly, reduced the income velocity of money in India, or the ratio of our gross domestic product in nominal terms to the stock of broad money (GDP/M3). Look at the chart. What does this mean in practical terms? The rate at which money flows through the economy has come down because of cash kept in cupboards or under the mattress as a precaution. Lower income velocity of money essentially means that the inflationary consequences of monetary expansion will be less than anticipated.

Few today would argue that inflation is determined only by monetary factors, but they do matter. So the question worth asking is: Will there be an additional monetary push to inflation as the income velocity of money normalizes in India? This may seem a minor matter in a world where real shocks dominate the headlines, but it is still something that India’s central bank needs to pay attention to. To borrow from the title of a 1981 paper by Thomas Sargent and Neil Wallace, monetary arithmetic can sometimes be unpleasant.

*This article was originally published in [Mint](https://www.livemint.com/opinion/columns/why-the-mpc-must-pay-attention-to-recent-monetary-arithmetic-11649177737086.html) on April 6, 2022.*

*Read more: [If US wants to sell us gas, it must match Russian discounts](https://spontaneousorder.in/if-us-wants-to-sell-us-gas-it-must-match-russian-discounts/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## If US wants to sell us gas, it must match Russian discounts

Original: https://www.spontaneousorder.in/p/if-us-wants-to-sell-us-gas-it-must-match-russian-discounts

Author: Spontaneous Order

Published: 2022-04-06T11:58:30.000Z

Topics: russian-oil, energy-security, ukraine-conflict, foreign-policy

> Western governments and media have criticised India for buying Russian oil since economic sanctions are seen as the way to end Russia’s invasion of Ukraine. US commerce secretary Gina Raimondo said India’s action was “deeply disappointing.” She ad

**Summary:**

Swaminathan SA Aiyer defends India's purchase of discounted Russian oil amid Western criticism, arguing that rich oil-exporting nations like the US and Australia, which benefit from high post-sanction prices, should match Russia's 30% discount if they want India to switch suppliers. India, a lower middle-income country 70% dependent on imported energy, faces skyrocketing costs: wholesale price inflation hit 12% pre-war, consumer inflation crossed 6.07% in March (above RBI's 6% limit), imported gas doubled, and fiscal deficits were already at 10% of GDP, now worsening despite fuel duty cuts. Aiyer critiques the one-sided Western narrative, citing US scholar John Mearsheimer's view that NATO's reckless expansion into Ukraine and Georgia provoked Russia, with tensions escalating since 2008 and 2014 events. Historical border ambiguities in Crimea and Ukraine undermine simplistic democracy-vs-autocracy framing, especially given US allies like Saudi Arabia. While opposing invasions in principle, India must prioritize realpolitik, including the Indo-Russian defense relationship and sanction costs, continuing Russian purchases unless equivalents are offered—unlikely, as Europe still buys Russian energy.

**Key points:**

- India should continue buying Russian oil at a 30% discount unless the US and Australia match it for equitable sanction burden-sharing.
- Western sanctions on Russia have spiked global energy prices, benefiting rich exporters while devastating import-dependent India's economy with 12% pre-war wholesale inflation and 10% GDP fiscal deficits.
- NATO's expansion into Ukraine since 2008 provoked Russia's response, per John Mearsheimer, making the conflict less one-sided than Western portrayals.
- India prioritizes its Indo-Russian defense ties and economic needs over purely principled opposition to the invasion.

**By Swaminathan SA Aiyer**

* * *

Western governments and media have criticised India for buying Russian oil since economic sanctions are seen as the way to end Russia’s invasion of Ukraine. US commerce secretary Gina Raimondo said India’s action was “deeply disappointing.” She added, “Now is the time to stand on the right side of history, and to stand with the United States and dozens of other countries, standing up for freedom, democracy and sovereignty with the Ukrainian people, and not funding and fuelling and aiding President Putin’s war.”

Dan Tehan, Australia’s trade minister, said that democracies must work together “to keep the rules-based approach that we’ve had since World War II.”

India should shrug off such criticism. The US and Australia are rich countries that are also oil exporters. Their oil companies (though not consumers) have benefited enormously from the sharp rise in oil and gas prices after imposition of western sanctions. But India is a lower middle-income country that is 70% dependent on imported energy. Skyrocketing oil and gas prices have mauled its economy at a juncture when wholesale price inflation was already 12% before the war. Imported gas has doubled in price. Consumer price inflation in March crossed 6.07%, above the RBI’s acceptable maximum of 6%.

In the face of public protests against expensive petrol and diesel, the government has slashed the excise duty on these fuels and VAT on gas, providing some consumer relief. But that has exacerbated a bleak fiscal situation already worsened by slowing growth. Even before the Ukraine war, the combined fiscal deficit of the centre and states was projected at a whopping 10% of GDP. It will now be worse.

India should tell Australia and the US it will be delighted to buy their oil instead of Russia provided they match the 30% discount Russia is offering. This will be equitable burden-sharing of the cost of sanctions. Why should poor countries in tough economic conditions be forced to bear enormous burdens when rich countries escape with far less?

The case against Russia is less one-sided than the West would have you believe. Top US academics like John Mearsheimer had earlier warned against the “reckless” expansion of Nato into Ukraine and Georgia, predicting that Russia would respond to that as a security threat — which indeed it has. Now, I think countries must be free to join any alliance they choose without being invaded. But the fact remains that if Ukrainian president Zelensky had stated on coming to power that he would keep Ukraine neutral — a position he has offered Russia right now — the war would not have happened.

Mearsheimer has argued that “the West, and especially America, is principally responsible for the crisis.” Tension over Ukraine started at Nato’s Bucharest summit in April 2008, when the US sought to expand Nato to cover Ukraine and Georgia. An outraged Russia called this an existential threat that it would never allow. The US ignored Moscow’s red line and pushed forward to make Ukraine a western bulwark. This eventually sparked hostilities in February 2014, after a Kyiv uprising (supported by the US) caused Ukraine’s pro-Russian president, Viktor Yanukovych, to flee abroad. In response, Russia invaded Crimea and helped fuel a civil war that created Russian ethnic enclaves in eastern Ukraine.

Historically, the Russian-Ukraine border was unclear. Crimea had a Tatar majority during centuries of Ottoman rule. This was eroded after Russia conquered Crimea. Then in 1944 Stalin deported the bulk of Tatars to northern Russia as punishment for their alleged collaboration with German Nazis. Some historians call it the Tatar genocide. Crimea was repopulated with Russians and Ukrainians. Then for no apparent reason — maybe because Crimea was a geographically logical shipping outlet for Ukrainian agrarian surpluses — Khrushchev decided in 1954 to transfer Crimea from Russia to Ukraine in 1954. This brief history shows how muddled are border claims in the region.

To portray the Ukrainian imbroglio as democracy versus autocracy is a stretch. The US-led group includes several Gulf autocracies, notably Saudi Arabia. Countries that abstained on the UN resolution included Tanzania, Bangladesh, Bolivia, Madagascar, and Pakistan, which are doubtless flawed democracies but no more so than some US allies.

Invasions are wrong, whether of Crimea in 2014 or Ukraine now. On principle, India should oppose it. But realpolitik often requires the sacrifice of a principle to preserve something as strategically important as the Indo-Russian defence relationship.

Besides, India badly needs help to offset the heavy cost of anti-Russian sanctions. Since Europe continues buying oil and gas from Russia, why not India? If the West offers equally discounted oil, India should happily switch. If not — and that seems impossible — India should keep buying Russian oil.

*This article was originally published in [The Times of India](https://timesofindia.indiatimes.com/india/india-should-keep-buying-russian-oil-unless-west-can-match-discounts/articleshow/90613597.cms) on April 3, 2022.*

*Read more: [The Problem of State Dependence](https://spontaneousorder.in/the-problem-of-state-dependence/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## The Problem of State Dependence

Original: https://www.spontaneousorder.in/p/the-problem-of-state-dependence

Author: Spontaneous Order

Published: 2022-03-30T12:22:17.000Z

Topics: populism, subsidies, state-dependence, economic-freedom

> Amid flickers of economic freedom, demand for state dependence (specially when designing policies for the poor) remains high in India. Through the years, Central and state governments have both enabled and been overburdened by this dependence. While the..

**Summary:**

India's persistent demand for state dependence, particularly in policies for the poor, is enabled by governments through populist freebies like cash transfers and subsidies, especially ahead of elections, overburdening state finances. Examples include AAP's INR 25,000 crore promises (15% of Punjab's budget) for cash and electricity subsidies, Tamil Nadu's projected INR 5,70,189.29 crore debt by March 2022, and Punjab and Uttar Pradesh's highest debt-to-GSDP ratios at 39.9% and 38.1%. While subsidies for merit goods like education and health correlate positively with literacy and inversely with infant mortality, non-merit subsidies like electricity (e.g., Punjab's INR 18,000 crore in 2020-21 plus INR 9,000 crore more) foster overconsumption and environmental harm. This dependence exposes beneficiaries to political volatility, as seen in the Farm Laws' passage post-2019 elections and rollback before 2022 state polls. From a classical-liberal view, the solution lies in greater economic freedom: liberal policies enhancing ease of doing business create market opportunities, as in Bangladesh's textile sector boosting women's participation and bargaining power, reducing reliance on paternalistic state interventions for sustainable upward mobility.

**Key points:**

- Populist election promises of cash transfers and electricity subsidies, like AAP's INR 25,000 crore in Punjab, drive high state debt levels such as Tamil Nadu's INR 5.7 lakh crore.
- Subsidies for merit goods like education and health improve literacy and reduce infant mortality, but non-merit subsidies like electricity cause overconsumption.
- State dependence on subsidies makes the poor vulnerable to political changes, exemplified by the Farm Laws' rollback ahead of state polls.
- Classical-liberal policies promoting ease of doing business create economic opportunities that empower the poor, as seen in Bangladesh's garment industry enhancing women's independence.

**By Paavi Kulshreshth**

* * *

Amid flickers of economic freedom, demand for state dependence (specially when designing policies for the poor) remains high in India. Through the years, Central and state governments have both enabled and been overburdened by this dependence. While the burden is a result of gaps in state capacity, the enabling is often rooted in the politics of public policy. 

This year started with [state polls](https://www.bbc.com/news/world-asia-india-60674233) for India, and with the polls came an [unsurprising surge](https://www.indiatvnews.com/elections/news/election-freebies-an-easy-tool-for-parties-to-woo-voters-jayalalitha-aap-arvind-kejriwal-2022-03-11-763872) in freebies. These often take the form of cash transfers and subsidies. Ahead of Punjab polls, Delhi’s incumbent Aam Aadmi Party made the [news](https://thewire.in/politics/in-do-or-die-situation-aap-resorting-to-populist-policies-welfare-schemes-in-punjab) for promising direct cash transfers and electricity subsidies worth INR 25,000 crore, 15% of the state’s budget. This, however, is neither a new trend nor unique to any political party. Tamil Nadu, often credited with the initiation of freebie politics, is expected to owe [INR 5,70,189.29 crore](https://www.news18.com/news/india/the-tamil-nadu-sop-opera-how-political-freebie-culture-has-saddled-state-with-debt-3537356.html) in debt by the end of March, 2022. Punjab and Uttar Pradesh, on the other hand, have the highest debt to GSDP ratios at [39.9% and 38.1%](https://www.bloombergquint.com/economy-finance/20-indian-states-have-debt-levels-higher-than-threshold-shows-rbi-state-finances-report) respectively.

Schemes promised by political contenders ahead of polls tend to have a populist appeal and rely heavily on the government (of the day). The braver bills, ones most likely to turn into subjects of contention, come soon after parties are voted to power. At the Centre, a glaring example of this was the Farm Laws. Farm Laws were passed in September 2020, a little over a year after 2019 general elections; a safe distance from 2024 general elections. Interestingly enough, these were [rolled back](https://www.bbc.com/news/world-asia-india-59306356) ahead of UP and Punjab state polls. The contentious Citizenship (Amendment) Act, 2019 was passed in December of the year, 6 months after the general elections. 

**Where is the problem?**

Irrespective of their personal incentives, political contenders often make promises that claim to benefit poor households. In theory, who would refute the merit of a direct transfer of INR 1000 to the women heads of poor households? 

In a 1990 [paper](https://indianliberals.in/content/the-retreat-from-socialism-2/), Indian diplomat B.K. Nehru wrote, “The word socialism literally is meant to convey only that society should be so organised that the interests of the members of that society as a whole should take precedence over the interests of a part of that society whenever there is a conflict between sectional interests and social interests that conflict must invariably be resolved in favour of the latter. With this objective nobody can possibly differ.” This attractiveness of socialism in theory mirrors the attractiveness of populist promises. Therefore, a similar dilemma of theory vs implementation may be faced by a critical thinker when analysing populist promises. 

An important question to ask then would be – are all subsidies and cash transfers a bad idea? No. While all subsidies and cash transfers create state dependence, in low and middle income nations, subsidisation can boost consumption of [merit goods](https://www.britannica.com/topic/government-economic-policy#ref238878), and through it, growth.  

In their paper *[Subsidies, merit goods and fiscal space – II](https://www.ideasforindia.in/topics/macroeconomics/subsidies-merit-goods-and-fiscal-space-ii.html)*, Mundle and Sikdar highlight the positive correlation between per-capita education subsidy and literacy rate (statistically significant at 1% level). The paper also highlights the inverse and positive correlation between per-capita subsidy for consumption of services (or the per-capita consumption of subsidised health services) and infant mortality rates (statistically significant at 1%). Please note, this subsidisation is important because the lack of subsidisation of healthcare services and primary education would lead to underconsumption of these services (primarily, by the poor) in the economy. 

However, subsidisation of non-merit goods tends to be economically unsound. Hiked subsidisation of electricity, an emergent trend ahead of state polls, raises significant financial concerns. The AAP promise of free electricity to nearly 70 lakh households in Punjab would mean an additional expense of INR 9000 crore. In 2020-21, Punjab’s electricity subsidisation cost was nearly [INR 18,000 crore](https://www.indiatoday.in/news-analysis/story/punjab-power-play-empty-coffers-permit-free-electricity-announcements-1821026-2021-06-30#:~:text=Punjab%20spends%20nearly%2010%20per,that%20can%20make%20Punjab%20pauper.). Electricity is not a merit good. It is not likely to be consumed less (than desired levels) in the absence of subsidisation. In fact, electricity subsidisation can cause [overconsumption](https://www.livemint.com/news/india/the-incentive-problem-behind-groundwater-overuse-in-india-1551228889470.html), resulting in severe environmental costs. 

**Is greater economic freedom the answer?** 

The main concern of this essay is the impact of populism on the beneficiaries. Beneficiaries who depend greatly on subsidisation and cash transfers for sustenance are vulnerable to uncertainties that come with change in politics of the day. The contentious Farm Laws present an interesting case study. 

Irrespective of whether or not the proposed Farm Laws aimed at the eventual withdrawal of MSP, the uproar was a result of the dependence. It is unsurprising that the section of farmers that depended greatly on subsidisation of crops like wheat and paddy did not allow for a change in status quo. And while in the case of Farm Laws the interest groups (or beneficiaries) were both [well-organised and well-backed](https://www.nytimes.com/2021/11/20/world/asia/india-modi-farmer-protests.html) to shake even the Central government, this may not always hold true. 

When citizens’ upward economic mobility depends on the longevity of the government in power, their livelihoods remain vulnerable to political fluctuations. Therefore, creating greater economic opportunities that facilitate greater economic freedom for the poor is crucial for sustainably improving the lives of citizens. There is significant anecdotal and [statistical](https://www.cato.org/policy-analysis/how-markets-empower-women-innovation-market-participation-transform-womens-lives#:~:text=prosperity%20than%20men.-,Markets%20empower%20women%20in%20at%20least%20two%20interrelated%20ways.,independence%20and%20heightened%20bargaining%20power.) evidence on how free markets improve lives.

When the government adopts liberal policies that enhance ease of doing business, there is an increase in available economic opportunities. For instance, a textile market with greater ease of doing business in Bangladesh has led to the creation of more economic opportunities for women. It created demand for women’s labour. Women’s economic participation in turn has improved their socio-political bargaining power. In her book *[The Power to Choose](https://books.google.co.in/books?id=U0qXtjCPgLgC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false)*, Naila Kabeer provides anecdotal evidence for the same. She outlines the failure of governments and nonprofits in improving female labour force participation, through planned programs, in Bangladesh. However, what did lead to women’s participation was the availability of jobs in an “export oriented garment industry” of the 1980s. It is also important to note, financial independence and out-of-home work often increase women’s public sphere and intra-household bargaining powers. Such change requires the State to take on a facilitative and not paternalistic role.  

*This article is part of a series titled, Making Markets Work for the Poor. The next article will be published in April, 2022.*

*Read more: [The macroeconomic framework that can guide our policy choices](https://spontaneousorder.in/the-macroeconomic-framework-that-can-guide-our-policy-choices/)*

* * *

**About Paavi Kulshreshth**

Paavi has completed her undergraduate study in journalism and postgraduate study in public policy. Her areas of interest include health and Market Systems Development. She is currently working as an Associate at the Centre for Civil Society.

## The macroeconomic framework that can guide our policy choices

Original: https://www.spontaneousorder.in/p/the-macroeconomic-framework-that-can-guide-our-policy-choices

Author: Spontaneous Order

Published: 2022-03-28T12:40:18.000Z

Topics: macroeconomic-policy, balance-of-payments, exchange-rate-policy, inflation-control

> Indian policymakers have faced a tricky situation over the past few months in maintaining support to the economy while being careful not to fan inflation further. The result has been a gradual exit from the stimulus put in place after the pandemic hit i..

**Summary:**

Indian policymakers are gradually withdrawing post-pandemic stimulus amid inflation risks, but the Ukraine invasion has spiked Brent crude to $140 per barrel—far above the RBI's $75 forecast and government's budgetary assumption—driving up energy imports by an estimated $100 billion if sustained, per Neelkanth Mishra. This pressures the balance of payments (BoP), especially with potential equity outflows, while influencing inflation and budgets via excise duties or subsidies. Though not at 2013 crisis levels, responses require balancing internal (full employment, stable inflation) and external (sustainable current account) equilibria, per James Meade and Harry Johnson. The Swan diagram frames this: Y-axis real exchange rate adjusts import/domestic demand composition (expenditure switching); X-axis monetary/fiscal policies control total demand. Four scenarios—current account deficit/surplus with low growth or rising inflation—dictate combinations like rupee depreciation for deficits or demand tightening for inflation. India must adapt fiscal, monetary, and exchange rate policies to sustain balance amid turbulence, weighing recovery vs. inflation risks, policy burden-sharing, and RBI's currency defense choices as political-economy decisions.

**Key points:**

- Ukraine-driven oil price surge to $140/barrel threatens India's BoP with $100 billion higher energy imports and fuels inflation beyond RBI's $75 forecast.
- Swan diagram guides policy via real exchange rate depreciation for current account deficits and monetary/fiscal tightening for excess domestic demand.
- India faces likely current account deficit with rising inflation, requiring coordinated fiscal-monetary-exchange rate adjustments to avoid imbalances.
- Policymakers must prioritize uneven recovery or inflation risks and decide rupee flexibility versus reserve use.

**By Niranjan Rajadhyaksha**

* * *

Indian policymakers have faced a tricky situation over the past few months in maintaining support to the economy while being careful not to fan inflation further. The result has been a gradual exit from the stimulus put in place after the pandemic hit in early 2020. The one area of comfort through all this was India’s balance of payments. International capital flows were more than what we needed to cover the current account gap. The Reserve Bank of India (RBI) could absorb these excess dollars into its burgeoning foreign exchange kitty, especially as domestic investment by the private sector was weak.

The situation has become more complicated after Russian tanks rolled into Ukraine. International prices of crude oil have gone up sharply. Brent crude surged towards $140 a barrel on Monday, and have eased only a bit since. It is important to remember that RBI’s inflation forecast as well as the budgetary calculations of the Union government have been made assuming crude prices at $75 a barrel. The prices of other industrial commodities have also gone up in tandem with energy prices. All this is bound to hit a commodity importer such as India. Credit Suisse India equity strategist Neelkanth Mishra estimates that energy imports, both oil and non-oil, could increase by $100 billion if current prices sustain for a long time. The higher energy import bill—partly balanced by our exports of petroleum products—will put pressure on the balance of payments, especially in case portfolio investments into Indian equities ebb as a result of risk aversion. The higher oil bill will also influence headline inflation as well as the government budget, depending on the extent to which the government passes on higher oil prices to consumers and how much it absorbs through reductions in excise duty on petrol or higher fertilizer subsidies. India is nowhere near unmanageable stress in its balance of payments, as a comparison with 2013 will show. Yet, there are policy choices to be made in response to this fast-developing situation.

One useful way to frame the challenge is by looking at two types of macroeconomic balance: internal and external. They have been defined in various ways. An economy can be said to have internal balance when there is full employment or economic growth is at potential or when inflation is not accelerating. An economy with external balance has neither a large current account deficit nor surplus. The idea of an internal and external balance, and the interaction between them, is most closely identified with the work of international economists such as James Meade and Harry Johnson. J.P. Morgan chief India economist Sajjid Chinoy has earlier used this framework in an article for Mint in July 2018 (bit.ly/3vK7e1x) as well as in a couple of recent research reports.

The Australian economist Trevor Swan gave a very good framework to understand how a country should respond to various combinations of internal and external imbalances in its economy. Take a look at the accompanying chart. The two policy levers in play are changes in the real exchange rate (on the Y-axis), and changes in monetary and fiscal policies to manage domestic demand (on the X-axis). The former affects the composition of demand between imported goods and domestically produced goods in an economy, or expenditure switching. The latter affects the size of domestic demand, or expenditure control.

[

![](https://substackcdn.com/image/fetch/$s_!S4bM!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F18cc59e2-9162-44dc-be5b-2f5bbbb8e7e8_1024x1024.png)



](https://substackcdn.com/image/fetch/$s_!S4bM!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F18cc59e2-9162-44dc-be5b-2f5bbbb8e7e8_1024x1024.png)

Swan Diagram

There are now four stylised macroeconomic possibilities:

1) A current account deficit with growth below potential.

2) A current account deficit with rising inflation.

3) A current account surplus with rising inflation.

4) A current account surplus with growth below potential.

Any country that seeks to maintain an internal and external balance at the same time will have to come closer to the blissful point where the two lines intersect, by maintaining the levels of real exchange rate and domestic demand required to do the job. The Swan framework provides clues that are relevant even today, depending on where a country is in the macroeconomic space shown here. However, factors such as productivity growth, trade shocks or capital controls can change the equilibrium point.

The general rule is that the real exchange rate needs to depreciate to reduce the current account deficit or appreciate to bring down a current account surplus. Meanwhile, interest rates and net government spending have to be calibrated to manage domestic demand, depending on the combination of economic growth plus inflation that a government seeks to target. The Swan diagram can help think through the policy task conceptually, rather than give exact estimates of the necessary adjustments.

India will thus have to adapt its mix of fiscal, monetary and exchange rate policies to maintain a balance in case global turbulence persists for an extended period of time, to ensure that neither internal nor external imbalances get out of hand. A lot also depends on whether the government sees the uneven recovery or inflation as the bigger risk; how the burden of domestic adjustment is shared between fiscal and monetary policy; and whether RBI chooses to let the rupee depreciate or use its foreign exchange reserves to defend the currency. These are as much political-economy calls as they are technical ones.

This article was originally published in [Mint](https://www.livemint.com/opinion/columns/the-macroeconomic-framework-that-can-guide-our-policy-choices-11646756181437.html) on March 9, 2022.

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Happiness and Freedom in India

Original: https://www.spontaneousorder.in/p/happiness-and-freedom-in-india

Author: Spontaneous Order

Published: 2022-03-25T13:49:20.000Z

Topics: world-happiness-report, human-freedom-index, personal-freedom, india-policy

> Although an elusive concept, happiness is something perhaps all of us seek in some sense. Each of us has a different understanding of what happiness means to us, and how we can attain it. If you do hold that happiness is subjective then freedom to pursu..

**Summary:**

Happiness is subjective and individual, with freedom—personal and economic—as essential for its pursuit, yet the World Happiness Report's metrics warrant scrutiny from a classical-liberal viewpoint. India ranks 136th out of 146 countries in the 2022 report with a score of 3.777, among the top 10 with largest happiness drops since 2012; its happiness is explained 31% by GDP per capita and 17% by 'freedom to make life choices,' measured via subjective Gallup polls asking satisfaction with life choices (national average rising to 0.647 in 2022). This perceptual freedom diverges from the objective Human Freedom Index (HFI) by Cato and Fraser Institutes, where India's rank fell to 119/165 in 2019 across 82 indicators, showing declines in rule of law, security, religion, and expression. The report's majority-weighted averages may mask minority rights erosion, yielding a utilitarian bias over individual rights. A 2014 study confirms only weak correlation between actual and perceived freedom, both positively linked to happiness. National happiness policies risk overriding individual pursuits; true welfare lies in liberty, rule of law, and rights protection, as echoed by BR Shenoy and Gandhi's self-realization ideal. Freedom is both means and virtuous end.

**Key points:**

- World Happiness Report's 'freedom to make life choices' for India rose perceptually to 0.647 in 2022 but contradicts HFI's objective decline to 119/165 rank.
- India's low happiness score of 3.777 (136/146) is driven more by GDP (31%) than freedom (17%), highlighting subjective measurement flaws.
- Perceptual freedom metrics are majority-biased, potentially overlooking minority rights violations in a utilitarian framework.
- Classical-liberal welfare prioritizes individual liberty and rule of law over national happiness policies to enable personal happiness pursuit.

**By Samrudha Surana**

* * *

Although an elusive concept, happiness is something perhaps all of us seek in some sense. Each of us has a different understanding of what happiness means to us, and how we can attain it. If you do hold that happiness is subjective then freedom to pursue this happiness is a natural next step. A conversation around that is something I want to explore in this essay.

Happiness is subjective to the individual may appear to be a self-evident fact, but some experts do not necessarily agree. Armed with the [belief](https://s3.amazonaws.com/happiness-report/2012/World_Happiness_Report_2012.pdf#page=7) that it is possible and meaningful to measure, assess and correlate happiness with other factors objectively, and that the pursuit of happiness may be a national policy rather than an individual endeavour, Jeffrey Sachs and development experts started measuring National Happiness in 2012. The [World Happiness Report 2022](https://happiness-report.s3.amazonaws.com/2022/WHR+22.pdf) finds that “attention to income and GDP is decreasing, and in books published since 2013, the words GDP (or the like) have appeared less frequently than the word ‘happiness’.”

The 20th of March has been proclaimed as the International Day of Happiness by the United Nations General Assembly, following a High-Level Meeting on Well-Being and Happiness and the release of the first World Happiness Report in 2012. In India, most, I believe, are reminded of the day by news headlines that highlight how India is among the unhappiest nations. They may also be reminded by memes such as the following that showed up on my Instagram feed:

[

![](https://substackcdn.com/image/fetch/$s_!6S2d!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3107b9fd-9c5a-4628-adf6-ea7c8902b02b_886x883.png)



](https://substackcdn.com/image/fetch/$s_!6S2d!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3107b9fd-9c5a-4628-adf6-ea7c8902b02b_886x883.png)

*Photo: [ScoopWhoop](https://www.instagram.com/p/CbS1S0qrj9F/?utm_source=ig_web_copy_link) Translation: “Where is India on the Happiness Index ranking? Check from the bottom”*

The 2022 report lists India among the top 10 countries with largest drops in happiness from 2012 to 2021. In the 2022 report, India ranks 136 of 146 countries studied. 

Happiness in the report is measured in the simplest way you might imagine – asking people how happy they are. Annually, 1000 people are surveyed in a country, and they are asked to imagine a ladder with steps numbered from 0 at the bottom and 10 at the top. The top of the ladder represents the best possible life for the respondent and the bottom of the ladder represents the worst possible life for the respondent. The respondent is then asked where they feel they stand on the ladder at this point of time. This number is then averaged for the country. The report takes into account data from 3 years, so the sample size for each country would be about 3000. The 2022 report would have data from 2019, 2020, and 2021. India’s score in the 2022 report was 3.777.

The 6 factors considered by the report that may have an impact on happiness of the people are – 

(i) GDP per capita; 

(ii) Social support; 

(iii) Health in terms of life expectancy; 

(iv) Freedom to make life choices; 

(v) Generosity; 

(vi) Perceptions of corruption 

The report, through some simple statistical analysis, tries to find to what extent each factor determines the happiness that they have measured. Happiness in India, in 2022, was explained mostly by ‘GDP per capita’ at 31%, then by ‘freedom to make life choices’ at 17%, and least by ‘perceptions of corruption’ at 3%. Note that the national happiness figure is not an actual combination of the factors, but is measured independently, unlike indices where the quantities of the factors are either added or multiplied to arrive at a total index value. 

Freedom is important in terms of its consequences – personal freedom entails that people are free to do things that they find value and happiness in as long as they respect the rights of others, and economic freedom is the greatest explanator of prosperity (another determinant of happiness). In the following sections, I thus explore what this freedom is that the report talks about and how much does it actually tell us about people’s freedom?

According to the [methodology of the report](https://happiness-report.s3.amazonaws.com/2022/WHR+22.pdf#page=23), here is how ‘freedom to make life choices’ is measured:

Freedom to make life choices is the national average of binary responses (0=no, 1=yes) to the GWP question, “Are you satisfied or dissatisfied with your freedom to choose what you do with your life?”

Basically, the value of the measure is determined by the *perception* of the individual. The happiness explained by ‘freedom to make life choices’ has increased between 2015 and 2019 from 0.398 to 0.498, and stands at 0.647 in 2022.

There is another, very different measurement of freedom, which is more institutional – the [Human Freedom Index](https://www.cato.org/sites/cato.org/files/2021-12/human-freedom-index-2021.pdf) (HFI) published by the CATO Institute and Fraser Institute. The index uses 82 distinct indicators of personal and economic freedom. HFI is constructed as a weighted average of various measures of freedom, based on how restrictive State institutions are and data on violation of freedoms. 

Individual freedom as per HFI has decreased between 2015 and 2019 (diverging from the Happiness Report’s increase in ‘freedom to make life choices’). A quick calculation of the correlations between the happiness explained by ‘freedom to make life choices’ with HFI between 2015 and 2019 for India (periods when the data overlaps) tells us that the measured perceived freedom (by the World Happiness Report) has been moving in opposite direction to freedom measured by HFI. The table below shows the change in India’s freedom on particular components of the Human Freedom Index.

[

![](https://lh3.googleusercontent.com/_LC-nQ2RDhvGiniUgeQGX6vof3eJp_h0Uulb8Zq7L2lq4jSv8bMJzEi8OXSa7cC8_NThxoz4K9H3gSlfdDTOkEk3R5J0_VzvdTUAUwADyRoLGgS4AMRZ_lcfvmZSoWpuUyDoXw4)



](https://lh3.googleusercontent.com/_LC-nQ2RDhvGiniUgeQGX6vof3eJp_h0Uulb8Zq7L2lq4jSv8bMJzEi8OXSa7cC8_NThxoz4K9H3gSlfdDTOkEk3R5J0_VzvdTUAUwADyRoLGgS4AMRZ_lcfvmZSoWpuUyDoXw4)

In the Human Freedom Index 2021, looking at 2019 data, India ranked 119 out of 165 countries, doing better than only 18% of the countries. In the World Happiness Report 2022, it performed better than 77% of the countries in terms of the ‘freedom to make life choices’ as perceived by the people. 

Although it is a small sample that we are considering, this divergence is a little puzzling. 

The Gallup Poll, which is the source of the data of the World Happiness Report, takes a representative sample of the country. This data is thus weighted by the size of various demographic groups – majority groups would have greater weightage than minority groups. Let us consider religious freedom. Religious freedom has reduced significantly in India, [particularly for the minorities](https://www.fraserinstitute.org/article/freedom-under-attack-in-india). Freedom perceived by individuals belonging to minority groups may have reduced, but if that of individuals belonging to majority groups may have increased, the net outcome as per the World Happiness Report would be an increase. This kind of measure is very utilitarian in nature, it focuses on total rather than individual components. Happiness and freedom are very virtuous, but if they are to come at the expense of rights and freedoms of others, there would be few things more vicious. The Happiness Report does say that the numbers are supposed to be more illustrative than conclusive, but the illustration may be a little biased. 

A [2014 study](https://psywb.springeropen.com/articles/10.1186/s13612-014-0017-4) also found only a small, although positive correlation between actual freedom and perceived freedom, while still additionally reinforcing the point that freedom (both actual or perceived) is a significant determinant of happiness. 

**Happiness as a matter of National Policy**

On whether happiness must be a matter of national policy, I’d like to refer to what Indian economist BR Shenoy wrote in his 1957 essay [My Idea of a Welfare State](https://indianliberals.in/bn/content/my-idea-of-a-welfare-state/):

“A state where the Rule of Dharma prevails, is a welfare state, the objective of welfare here being the creation, to the extent permissible on the governmental side, of conditions facilitating the attainment of the goal of life by individuals.”

Liberty – in the personal, political and economic sense, rule of law and protection of everyone’s rights are most crucial for happiness that individuals can attain. Gandhi wrote in *The Story of My Experiments with Truth*, “What I want to achieve – what I have been striving and pining to achieve these thirty years is self-realisation… to attain Moksha. I live and move and have my being in pursuit of this goal.” 

Happiness, and the pursuit of it, is a very individual thing. Do not let development experts convince you otherwise. Additionally, I believe that while freedom is an important means to the attainment of happiness, freedom is also a virtuous end in itself. 

*Read more: [Educating Children with Disability: Role of Teacher Training](https://spontaneousorder.in/educating-children-with-disability-role-of-teacher-training/)*

* * *

**About Samrudha Surana**

Samrudha Surana is a graduate student in economics and has previously worked as an Associate with Centre for Civil Society. His research interests lie in studying market processes, political economy, and economic history.

## Educating Children with Disability: Role of Teacher Training

Original: https://www.spontaneousorder.in/p/educating-children-with-disability-role-of-teacher-training

Author: Spontaneous Order

Published: 2022-03-23T11:06:24.000Z

Topics: inclusive-education, teacher-training, disability-policy, education-reform

> Children with disability (CwD) are an integral part of the student body, and their education must be a part of the education discourse in India. Economically vulnerable sections are more prone to becoming disabled owing to poor living conditions. Disabi..

**Summary:**

Children with disabilities (CwD) face a vicious poverty-disability cycle in India, exacerbated by limited employment opportunities and high healthcare costs, making inclusive education essential for dignity and equality. The Rights of Persons with Disabilities (RPD) Act 2016 mandates free education in preferred schools but prioritizes physical infrastructure like ramps over pedagogical transformation, curriculum adaptation, and attitude change. Drawing on Michael Fullan's framework from successful inclusive systems, India has cleared stage one with strong policies like IEDC 1974 and National Trust Act 1999, but lags in stage two—robust teacher training—and stage three—an ecosystem of consultants and researchers. Sarva Shiksha Abhiyan (SSA) offers a voluntary elective 'Children with Special Needs,' covering identification, classroom organization, IEPs, and evaluation, but an NCERT study reveals most teachers lack confidence in inclusive practices, especially in mixed classrooms. Current training assumes teacher openness without rigorous preparation akin to medical training. The classical-liberal emphasis is on empowering teachers to contextualize curricula, adopt flexible lesson plans, differentiate assessments, and collaborate with special educators and parents. With two-thirds of persons with disabilities (PwDs) unemployed, mostly in unorganized sectors, mandatory, comprehensive teacher training is crucial to break this cycle and foster equitable opportunities.

**Key points:**

- India must prioritize robust, mandatory teacher training on inclusive education to advance beyond policies to effective implementation.
- Make the 'Children with Special Needs' elective compulsory in SSA training, focusing on mixed-classroom practices like IEPs and differentiated assessments.
- Teachers require rigorous preparation comparable to medical training to handle diverse classroom dynamics without trial-and-error.
- Build an ecosystem of education consultants and researchers to support on-field problem-solving for CwD inclusion.

**By Radha Gupta**

* * *

Children with disability (CwD) are an integral part of the student body, and their education must be a part of the education discourse in India. Economically vulnerable sections are more prone to becoming disabled owing to poor living conditions. Disability worsens poverty by limiting employment opportunities and higher out of pocket expenditure on healthcare. Hence, poverty is both a cause and an effect of disability. This increases inequalities in society. 

Education is an important asset for disabled persons to live with dignity. Inclusive education is a system wherein all children, including those with a disability, are taught together under the same roof. It aims to do away with [segregated education](https://lepole.education/en/pedagogical-culture/63-the-inclusive-school.html?start=1), which excludes children based on their natural abilities. 

[Rights of Persons with Disabilities (RPD) Act (2016)](https://legislative.gov.in/sites/default/files/A2016-49_1.pdf) aims to create an equitable society for persons with disability. Chapter 3 of the Act talks about the right to free education for CwD in a school of their liking. The Act prioritises resources and physical access (e.g. distribution of aid and appliances) or infrastructures such as ramps in schools over transforming systems like pedagogy, curriculum or attitudes. [Michael Fullan](http://mehrmohammadi.ir/wp-content/uploads/2019/07/The-New-Meaning-of-Educational-Change.pdf) has drawn insights from countries that have successfully implemented inclusive education. He talks about three stages: 

-   First, strong policies that favour inclusivity. 
    
-   Second, a robust training program for teachers. 
    
-   Third, an ecosystem of education consultants and researchers who produce knowledge and information needed for problem-solving and decision making on the field. 
    

India has solid policies for inclusive education; [Integrated Education of Disabled Children (IEDC) 1974](https://enabled.in/wp/integrated-education-for-disabled-children/#:~:text=IEDC%20is%20a%20centrally%20sponsored,Ministry%20of%20Welfare%2C%20Central%20Government), [National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities Act 1999](https://www.thenationaltrust.gov.in/upload/uploadfiles/files/National%20Trust%20Act%20-%20Englsih.pdf).  Therefore, India has passed stage one, however, it is stuck between stages two and three. It needs a strong teacher training program to progress to stage two and subsequently to stage three.  

The Sarva Shiksha Abhiyan (SSA) [educates teachers](https://pib.gov.in/newsite/PrintRelease.aspx?relid=175308#:~:text=The%20Sarva%20Shiksha%20Abhiyan%20is,of%20learning%20levels%20of%20children) about inclusivity in the classroom via effective practices in classroom organisation, seating arrangements, teaching-learning material (TLM), individualised education programs (IEPs), evaluation tools, etc. In this teacher training, there is an elective subject – ‘Children with Special Needs’ – that educates teachers on how to identify a disability and include CwD in everyday classroom activities. This elective is voluntary and hence sends out the message that it is not the most important concept under teacher training. As a result, not many teachers get trained in inclusive education. 

An [NCERT study](http://14.139.60.153/bitstream/123456789/232/1/NCERT-national%20focus%20group-special_ed_final1.pdf) shows that most teachers in India are not confident in their ability to educate CwD, and the current training support is insufficient. Teachers pointed out that training is given to educate CWD in isolation from other students, whereas in real-life scenarios, they teach both kinds of students together. 

A major assumption that the above policies make is that teachers are open to the inclusion principle (and are optimistic about it). This attitude was also related to the quality of training provided to teachers on inclusion. Educators should not be left with trial and error when it comes to making classrooms more inclusive. As a doctor is given rigorous training before she is allowed to treat a patient, the same should be true for educators. 

School teachers must be mandated to contextualise curriculum needs as per their classrooms and adopt different learning styles as and when required. This calls for making flexible lesson plans, which can accommodate any changes in classroom dynamics. Assessment and evaluation tools also need to be differentiated for the two groups or designed to provide all students with an equal chance to prove their ability. Lastly, it is important that teachers collaborate with important stakeholders like special educators, paraprofessionals, and parents of CwD.

[Two out of three](http://www.nhfdc.nic.in/upload/nhfdc/Persons_Disabilities_31mar21.pdf) PwDs in India today are unemployed,  and a majority of those who do work do so in the unorganised sector as migrant or contractual labour. Most of their families are struggling financially – now even more than before owing to the pandemic. In the face of all of this, how India manages and implements teacher training becomes crucial to turning the tide. 

*Read more: [Solution to stubble burning that polluted Delhi air, is finally here](https://spontaneousorder.in/solution-to-stubble-burning-that-polluted-delhi-air-is-finally-here/)*

* * *

**About Radha Gupta**

Radha is a Teach for India Fellow. An economist by training, she is passionate about creating a conducive learning environment for all children in India by influencing different policies and government machinery. She enjoys travelling, running and reading about philosophy.

## Solution to stubble burning that polluted Delhi air, is finally here

Original: https://www.spontaneousorder.in/p/solution-to-stubble-burning-that-polluted-delhi-air-is-finally-here

Author: Spontaneous Order

Published: 2022-03-21T11:40:12.000Z

Topics: stubble-burning, air-pollution, agricultural-innovation, carbon-credits

> A bio-decomposer developed by a research institute and a pesticide firm has the potential to make North India’s pollution woes a thing of the past. Sometimes a breakthrough seems too good to be true. A solution is in sight to end the terrible air pollut

**Summary:**

Swaminathan SA Aiyer celebrates a classical-liberal market-driven breakthrough against Delhi's seasonal air pollution from Punjab and Haryana farmers burning 12 million tonnes of rice stubble left by harvester-combines, which governments failed to stop despite bans due to farmers' tight sowing windows and lack of viable alternatives. The Indian Agricultural Research Institute (IARI) and UPL, India's largest pesticide firm, developed a bio-decomposer using eight fungi in easy-to-transport powder form, sprayed via specialized machines with 20 nozzles covering hundreds of acres daily. In 2021, 700 machines treated 4.2 lakh acres free-of-charge, achieving 92% success in preventing burning, with satellite verification, soil enrichment reducing urea needs by 20%, and emission cuts including 1.04 million tonnes CO2, 141,612 tonnes ash, and 2,135 tonnes particulate matter. UPL funds scaling to 20 lakh acres next season and all 60 lakh acres eventually via carbon credits from Kyoto/Paris schemes, overcoming past logistical hurdles through private coordination with apps, satellite data, and clustering. This innovation promises to end pollution where coercive laws failed, boosting farmer profitability and soil health.

**Key points:**

- IARI-UPL bio-decomposer decomposes stubble into green manure in days, providing an economically viable alternative to burning.
- In 2021, 700 spraying machines covered 4.2 lakh acres free-of-charge with 92% success rate, verified by satellites.
- Scaling targets 20 lakh acres next season and full 60 lakh acres via carbon credits funding UPL's hundreds of crores investment.
- Farmers report enriched soil and 20% less urea use, improving profitability over burning's nutrient loss.
- Private innovation and market mechanisms succeed where government bans on farmers failed.

**By Swaminathan SA Aiyer**

* * *

A bio-decomposer developed by a research institute and a pesticide firm has the potential to make North India’s pollution woes a thing of the past. Sometimes a breakthrough seems too good to be true. A solution is in sight to end the terrible air pollution that suffocates Delhi-wallahs every October and November when farmers in Punjab and Haryana burn 12 million tonnes of stubble from their newly harvested rice crop. Farmers have a gap of just a few weeks between harvesting of rice and sowing of winter wheat, so they burn the stubble to clear their fields.

Once harvesting was done manually by workers who left very little stubble. But now harvester-combines do the harvesting and leave six to ten inches of stubble. Burning this destroys nutrients and worsens the soil even while killing and maiming people with air pollution. But farmers say they have no economically viable alternative. Burning has been declared illegal, but farmers ignore the law and politicians dare not act against all farmers. 

So, what is the new breakthrough? Some years ago, the Indian Agricultural Research Institute developed a bio-decomposer using eight fungi. When sprayed in a technically sound manner, it decomposed stubble into green manure in a few days. This had the potential to end stubble burning and enrich the soil. But the original process required mixing it with a chickpea solution for fermentation before spraying. The logistics of getting the bio-decomposer to farmers, fermenting and spraying it in the short window of time between crops proved too formidable.

Now, a joint development of the bio-decomposer by the IARI and UPL, India’s largest pesticide company, has overcome the obstacles. UPL has developed a process to mass-produce the decomposer in powder form that can be transported to warehouses across target areas, ready for mixing with water and spraying when the window of time appears. UPL has also designed machines for spraying the decomposer. Each machine has two hollow arms ten feet long with spraying nozzles every foot, adding up to 20 nozzles. A worker manually spraying the solution can cover only a few acres per day. But each machine covers hundreds of acres per day. Around 700 machines were deployed in the 2021 season, and 3,000 will be deployed in the coming season.

In October-November 2021, the project covered 4.2 lakh acres in Punjab and Haryana. The plan is to target 20 lakh acres which should reduce pollution significantly. UPL hopes in a few years to cover almost the entire 60 lakh acres under rice in the two states, ending air pollution altogether.

Expanding acreage so fast is feasible since UPL provides the service free of charge, so farmers queue up to participate. The company spent Rs 50 crore on spraying in the first season and is prepared to spend hundreds of crores to fully cover the two states. How can it afford to do this free of charge?

The answer is that it will earn carbon credits from the emissions trading scheme of the Kyoto Protocol and Paris Agreement on climate change. Under the scheme, companies with pollution above specified limits have to buy offsetting carbon credits in the international market from other entities that have cut emissions. Hopefully carbon credits will enable UPL to make a profit, but that is not guaranteed.

In 2021, spraying is estimated to have reduced emissions of carbon dioxide by 1.04 million tonnes, ash by 141,612 tonnes, carbon monoxide by 42,697 tonnes, particulate matter by 2,135 tonnes and sulphur dioxide by 1,423 tonnes. It will take two years for the documentation and data to be submitted and approved. UPL will not get any revenue through carbon credits till late 2023.

The project is a major exercise in co-ordination. It starts with outreach, spreading awareness of the with outreach, spreading awareness of the Satellite data helps identify farmers who are confirmed stubble burners. Field data is analysed to organise farmers into clusters for spraying. Stocks of decomposition powder are built up in every cluster for use when needed. Using smartphone apps, machines are scheduled to reach each registered farmer at an agreed time. Post-spraying satellite studies showed a 92% success rate: only 8% of farmers still resorted to burning.

I met several of the farmers covered in the 2021 spraying season. They all lauded the efficiency of operations: appointments were properly scheduled and adhered to. They said the conversion of stubble into green manure enriched the soil and helped reduce urea application by up to 20%. This improved profitability and soil quality.

Scaling up the project from 4.2 lakh acres last season to 20 lakh acres next season poses huge logistical challenges. Nobody should be surprised if there are some glitches in curbing pollution. But there is suddenly a lot of light at the end of the tunnel.

*This article was originally published in [The Times of India](https://timesofindia.indiatimes.com/india/solution-to-stubble-burning-that-polluted-delhi-air-is-finally-here/articleshow/90325545.cms) on March 19, 2022.*

*Read more: [India’s arduous exit from easy money policy](https://spontaneousorder.in/indias-arduous-exit-from-easy-money-policy/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## India’s arduous exit from easy money policy

Original: https://www.spontaneousorder.in/p/indias-arduous-exit-from-easy-money-policy

Author: Spontaneous Order

Published: 2022-03-15T11:47:35.000Z

Topics: monetary-policy, fiscal-policy, inflation-control, post-pandemic-recovery

> The pandemic knocked down entire economies. In response, governments around the world opened the spending spigots while central banks pumped extra liquidity into financial systems. Such coordinated action is necessary during a crisis—as we saw in the af

**Summary:**

India faces an arduous exit from pandemic-era fiscal and monetary stimulus, akin to Abhimanyu's inability to escape the chakravyuha in the Mahabharata—policymakers know how to enter stimulus but struggle to withdraw without sparking inflation or balance-of-payments crises, as seen in India's early 2010s. The February Union budget and RBI monetary policy signal a gradual taper, as private-sector demand remains weak, rattling bond markets amid high public debt from extra borrowing. A classical-liberal lens underscores the need for timely discipline to prevent imbalances, prioritizing market signals over prolonged intervention. James Tobin's funnel model illustrates coordination challenges: fiscal and monetary 'taps' fill an economy 'tank' limited by supply capacity, overflowing into inflation. RBI's dual role as inflation manager and government debt handler creates dilemmas—raise rates against price pressures or keep them low for smooth borrowing? Critics note the model's simplicity, especially post-supply-shock pandemic, yet it highlights policy as art and science. Fiscal consolidation has a clear path with credible adherence, but RBI's dovish rhetoric contrasts rising market rates, sending confusing signals. Success hinges on synchronized withdrawal pace and credible communication to restore private-led growth.

**Key points:**

- India's February budget and RBI policy opt for gradual stimulus exit due to weak private demand, unsettling bond markets.
- Exiting stimulus risks inflation or BOP pressures if mistimed, as in India's 2010s experience.
- Tobin's funnel model stresses coordinating fiscal spending and money supply to avoid inflation overflow beyond supply capacity.
- RBI must balance inflation-fighting rate hikes against aiding high government borrowing amid global price worries.
- Clear fiscal consolidation contrasts RBI's mixed signals of dovish words and rising market rates.

**By Niranjan Rajadhyaksha**

* * *

The pandemic knocked down entire economies. In response, governments around the world opened the spending spigots while central banks pumped extra liquidity into financial systems. Such coordinated action is necessary during a crisis—as we saw in the aftermath of the North Atlantic financial crisis of 2008 as well. Two years later, as life limps back to normal and the worst economic impact of the pandemic is a receding memory, policymakers have to figure out how to reverse the decisions they took in early 2020. Many will struggle.

India is no exception. This month \[February\] saw the finance minister announce the Union budget for the next fiscal year. Then the monetary policy committee of the Indian central bank announced its new policy. The common element in both was the fact that India will exit its extraordinary fiscal and monetary policies only gradually, as the economy continues to need policy support till private-sector demand becomes stronger. It is well known that both these decisions have rattled the local bond market.

There are two tricky policy choices in India right now. First, how to withdraw the macroeconomic stimulus before economic imbalances build up. Two, how to coordinate the fiscal and monetary components of this withdrawal, either separately or jointly.

Former Reserve Bank of India (RBI) governor D. Subbarao had famously compared the first challenge to the situation Abhimanyu faced in the Mahabharata. The young warrior knew how to enter the dreaded chakravyuha formation used by the Kaurava army at Kurukshetra, but did not know how to come out of it. In economic policy, there is a similar problem. It is often likely that policymakers know how to enter the stimulus zone, but not how to exit it. The failure to get out in time — as India saw in the first few years of the previous decade — can lead to excess inflation or balance-of-payments pressures (or both). The timing of a successful exit from an extraordinary stimulus policy will always be a tricky problem, especially since economic recoveries from crises tend to be uneven.

The second challenge is to figure out the different speeds at which the monetary and fiscal stimulus are withdrawn. One simple mental model to think about such policy coordination was provided by James Tobin, who won the Nobel Prize for economics in 1981. I like to use it while teaching because it offers an instinctive feel of policy coordination, even though many critics feel it is too simplistic in its depiction of the economy.

A nation-state that seeks to manage aggregate demand has control over two taps, one for net government spending and another for money supply—or fiscal and monetary policy. The water that pours out of these taps rushes through a common funnel into a tank below. The moment the tank below the funnel gets full, it overflows in the form of inflation above the central bank target. The volume of the tank depends on the productive capacity (i.e., the supply side) of the economy.

The underlying assumption in the Tobin funnel is that fiscal and monetary policy can sometimes be used alone and sometimes in combination. One of the criticisms of the Tobin funnel is that it assumes that fiscal and monetary policies have the same effect on the water level in the tank below, but is that true of a supply shock, as was the case in the pandemic? How does a sovereign turn the taps on or off, especially when the law has carved out separate zones of intervention for the government and the central bank? This is as much art as science, and creates important policy dilemmas that many countries, including India, are facing right now.

Let us consider one specific component of the policy dilemma. The extra government borrowing needed to sustain economic activity over the past two years has left India with a huge pile of public debt. The bond market appears to believe that the Centre’s borrowing programme in the next fiscal year is too high for comfort. All this, when there are inflation worries in many parts of the world. RBI is both the inflation manager of the economy as well as debt manager for the government. Should it then calibrate interest rates to suppress any latent price pressures or to help the government borrow smoothly? In other words, should it raise interest rates to tackle inflation or keep them low to support the government budget?

A lot then depends on the pace at which the stimulus is withdrawn in the coming year or two, as well as the relative role assigned to fiscal and monetary policies in the mix. The signals sent out will be as important as the actual actions. The finance ministry has laid out a clear path of fiscal consolidation that it has till now shown it will try sticking to. The monetary policy signals have been more confusing. RBI has made dovish statements while gradually allowing market interest rates to rise, a puzzling gap between what it says and what it does.

*This article was originally published in [Mint](https://www.livemint.com/opinion/the-tobin-funnel-and-post-covid-stimulus-withdrawal-dilemmas-11645549260242.html) on February 23, 2022.*

*Read more: [Crypto-assets ne](https://spontaneousorder.in/crypto-assets-need-environmental-regulation/)*[ed](https://spontaneousorder.in/crypto-assets-need-environmental-regulation/) *[Environmental Regulation](https://spontaneousorder.in/crypto-assets-need-environmental-regulation/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Crypto-assets need Environmental Regulation

Original: https://www.spontaneousorder.in/p/crypto-assets-need-environmental-regulation

Author: Spontaneous Order

Published: 2022-03-10T10:33:14.000Z

Topics: crypto-assets, environmental-impact, cbdc, blockchain-regulation

> In a run towards more digitalization and search for modern ways of economic transactions, the rise of digital currencies and virtual assets popularly known as crypto assets are at the forefront. These crypto-assets are generated using complex mathematic..

**Summary:**

Crypto-assets, driven by blockchain technology and proof-of-work mining, pose significant environmental risks due to their massive energy consumption and carbon emissions, necessitating a multifaceted regulatory framework in India that prioritizes climate concerns alongside economic and social impacts. With 15-20 million Indian investors holding roughly $6 billion in crypto, the unregulated nature lures high-risk investments while contributing to global warming—Bitcoin's electricity use surged from 4.8 TWh in 2017 to 73.12 TWh in 2019, each transaction emitting 619 kWh (equivalent to 20.92 days of an average US household's energy), and mining consuming about 5 GW or 1% of global energy. As India develops its Digital Rupee CBDC, policymakers should assess these impacts and shift toward eco-friendly alternatives like IOTA's Tangle (0.00011 kWh per transaction) or XRP (0.0079 kWh), which avoid energy-intensive mining, over Bitcoin's 707 kWh per transaction. This approach ensures sustainable digital currency innovation without forgoing decentralization's benefits, aligning regulation with environmental stewardship in a classical-liberal policy context that balances innovation and planetary limits.

**Key points:**

- Crypto mining via proof-of-work consumes vast energy, with Bitcoin using 73.12 TWh in 2019 and 1% of global electricity, exacerbating CO2 emissions.
- India's 15-20 million crypto investors hold $6 billion, demanding regulation addressing consumer risks and environmental damage.
- Adopt eco-friendly technologies like IOTA's Tangle (0.00011 kWh/transaction) for India's CBDC to minimize emissions compared to Bitcoin's 707 kWh/transaction.
- Policymakers must integrate environmental impact assessments into crypto policy frameworks alongside economic considerations.

**By Akash Ankur Srivastav**

* * *

In a run towards more digitalization and search for modern ways of economic transactions, the rise of digital currencies and virtual assets popularly known as crypto assets are at the forefront. These crypto-assets are generated using complex mathematical calculations and encryption algorithms and are introduced in the market that provides an alternative medium of exchange. It has lured  investors as these currencies are unregulated, resistant to inflation, and are easily portable. The rising popularity and use of crypto-assets poses a challenge for India’s  policymakers to design a policy framework that should take care of its multifaceted impact on the  economy and society. Industry estimates suggest there are some 15 to 20 million crypto-investors in  the country with total crypto-holdings of [roughly $6 billion](https://thewire.in/government/indias-proposed-crypto-bill-banning-payments-could-mean-jail-for-violations). These investors are either lured by advertisements or the inflated prices of cryptocurrencies, which can provide high-risk returns. The major problem faced by sovereign states is the unregulated nature of cryptocurrencies. Apart from high potential risk for consumers and investors, crypto-assets can contribute significantly to the climate crisis.

While the Swedish Financial Supervisory Authority has outlined [consumer risks](https://www.thestatesman.com/technology/crypto-assets-big-threat-people-climate) of crypto-assets (terrorist financing, money laundering, and ransomware payments), the Swedish Environmental Protection Agency highlights the impact of crypto mining. Increased carbon emissions and an even greater threat to global warming must be factored in to policy discussions and frameworks.

India is currently weighing the risks associated with cryptocurrencies and looking into different sectoral implications of launching an official digital currency. In this analysis, India should follow a multifaceted approach for regulating crypto-assets, and needs to design a crypto policy that is mindful of environmental implications.

**Mining of Cryptocurrencies**

To understand the energy requirements of cryptocurrencies it is important to understand the  methodology of cryptocurrency generation. Cryptocurrency transactions are based on a public key  encryption, also known as asymmetric encryption. Cryptocurrencies use a decentralized ledger known as blockchain, which is essentially a series of chained data blocks that contain key pieces of data, including cryptographic hashes. The creation of [blockchain requires](https://doi.org/10.1051/e3sconf/202129403004): 

• The existence of nodes (individual devices that exist within the blockchain);  

• Hashes (one-way cryptographic functions used by nodes to verify the legitimacy of transactions, which are generated by combining the header data from the previous blockchain block with a nonce); 

• Miners (specific nodes that verify or solve unconfirmed blocks in the blockchain by verifying the hashes;  

• Transactions (separate transactions are bundled and form a list that gets added to an unconfirmed block); 

• A consensus algorithm (a protocol within blockchain which helps different nodes come to an  agreement whilst verifying data – Proof of Work and blocks. Blocks are individual sections that contain a list of completed transactions – a block that was verified cannot be later modified).

One must determine how many sums are performed every second in order to answer the riddles.  Then calculate how much electricity is required to do each calculation in [terms of hashes](https://doi.org/10.2139/ssrn.3846774).

**Environmental Impact of Cryptocurrencies**

The adoption of Bitcoin as an official currency by El Salvador manifests the beginning of the legalization of cryptocurrencies as an [official method of payment](https://doi.org/10.1108/CFRI-09-2021-0191). The Government of India also proposed to introduce [Digital Rupee](https://pib.gov.in/Pressreleaseshare.aspx?PRID=1794167), using blockchain and other technologies, to be issued by the Reserve Bank of India starting 2022-23 for a more efficient and cheaper currency management system. Therefore, the assessment of environmental impacts of this new form of money and investment asset has become increasingly important.

Considering cryptocurrency mining’s negative impact on the environment there is only limited existing research to evaluate the extent of its growing energy consumption problem. Most studies focus on the electricity consumption and CO2 emission issues of Bitcoin, but there are more than 4000 cryptocurrencies available on the market with [different underlying technologies](https://doi.org/10.1108/CFRI-09-2021-0191). The electricity consumption of Bitcoin itself has increased from 4.8 TWh to 73.12 TWh over the  years, [2017 to 2019](https://www.frontiersin.org/article/10.3389/fenrg.2019.00021). As for the carbon footprint of Bitcoin transactions, each Bitcoin transaction can contribute 619 Kwt to the carbon footprint, which is equal to 350,000 bank card transactions or the energy consumption of an average [US family over 20.92 days](https://doi.org/10.1109/ACCESS.2021.3068636).

In August 2018, a Princeton University associate professor, expert in cryptocurrency, testified at a hearing of the US Senate Committee on Energy and Natural Resources. The testimony said that bitcoin mining accounts for nearly 5 gigawatts — or about 1% of the world’s energy use. That is slightly higher than what is used by the [entire state of Ohio](https://www.energy.senate.gov/services/files/8A1CECD1-157C-45D4-A1AB-B894E913737D). One big source of concern among environmentalists is that when the price of bitcoin rises, mining becomes less efficient. In the case of bitcoin, the mathematical problems  required to generate blocks become increasingly complex as the price rises, while transaction throughout remains constant. This means that as time goes on, the network will require more computing power and energy to handle the same [amount of transactions](https://doi.org/10.2139/ssrn.3846774). Hence, the trade-off between the number of transactions and prices of crypto-currencies will determine the complexity of the algorithm and thereby its adverse effect on CO2 emissions and the environment. 

**Way Forward** 

With the adverse environmental impact of cryptocurrencies being well established, developers around the world are researching more eco-friendly options when it comes to digital currencies. Hence, sustainability  is the new emerging factor that started to cause a shift in the creation of digital assets. An interesting [study](https://www.trgdatacenters.com/most-environment-friendly-cryptocurrencies/) compiled by TRG Datacenters, based in Houston, Texas, has highlighted the most eco-friendly cryptocurrency options, ranking them by the amount of energy required to power each  transaction: 

**Currency Kilowatt-hour (KWh) consumed per  transaction\***IOTA 0.00011XRP 0.0079Chia 0.023Dogecoin 0.12Cardano 0.5479Litecoin 18.522Bitcoin Cash 18.957Ethereum 62.56Bitcoin 707

From the above table, it is evident that options such as IOTA and XRP will have a limited impact on  transactions and are thus gaining popularity in the field of eco-friendly cryptocurrencies. IOTA uses an alternative to blockchain called the ‘Tangle’ which essentially removes the need for miners.  Instead, the network is maintained by smaller devices and uses calculations that require less power and thus consume less [energy per transaction](https://www.trgdatacenters.com/most-environment-friendly-cryptocurrencies/). These analyses provide a substantial ground for India to consider other technologies such as ‘Tangle’ and ‘Open Representative Voting (ORV)’ apart from the blockchain for launching its Central Bank Digital Currency (CBDC) to limit its environmental impact and CO2 emissions. 

*Read more: [Land, Livelihood and Legal Empowerment](https://spontaneousorder.in/land-livelihood-and-legal-empowerment/)*

* * *

**About Akash Ankur Srivastav**

Akash is a public policy enthusiast and a self-driven energetic individual who is passionate about creating impact. Currently he is pursuing PGP in public policy, design and management from ISPP. His key interest lies in analyzing and interpreting data for social impact, policy consultancy in digital transformation, infrastructure development and environmental concerns.

## Land, Livelihood and Legal Empowerment

Original: https://www.spontaneousorder.in/p/land-livelihood-and-legal-empowerment

Author: Spontaneous Order

Published: 2022-03-08T14:42:02.000Z

Topics: forest-rights-act, minor-forest-produce, tribal-women-empowerment, community-conservation

> The United Nations declared ‘Gender Equality Today for a Sustainable Tomorrow’ as the theme for International Women’s Day 2022. The theme is an effort to commemorate and recognise “the contribution of women and girls around the world, who are lead

**Summary:**

The post argues from a classical-liberal perspective that empowering tribal women to lead forest conservation and sustainable livelihoods requires recognizing community land and tenure rights, particularly under India's Forest Rights Act 2006, which uniquely grants equal rights to adult women in village assemblies and mandates their decision-making participation. These rights enable access to minor forest produce (MFP), an economy worth Rs. 200 crores annually supporting 275 million forest dwellers, with 100 million directly dependent and women comprising 57% of collectors for items like mahua, tendu patta, and chironji. While rights provide incentives for communities to protect forests, challenges like poor market access persist; solutions involve civil society and government facilitating capacity building, value addition, and self-help groups rather than top-down conservation like Kaziranga National Park expansions that evict dwellers. A key example is the Nelakottai Kattunayakan Women’s Cottage Industry Co-operative in Tamil Nadu, where nine tribal women increased honey prices from Rs. 200-300/kg to Rs. 1000/kg, generating income that incentivizes community-led harvest controls and conservation. The conclusion emphasizes government's role as guardian of people's rights over forests, not as forest guards, aligning with free-market environmentalism to achieve gender equality and sustainability.

**Key points:**

- Forest Rights Act 2006 recognizes equal community forest rights for tribal women, requiring their participation in decisions, making it one of only two such laws globally.
- Minor forest produce economy, worth Rs. 200 crores yearly, directly livelihoods 100 million people with 57% women collectors, but needs better market access via cooperatives.
- Nelakottai cooperative raised honey prices from Rs. 200-300/kg to Rs. 1000/kg, boosting incomes and enabling community conservation controls.
- Governments and civil society should prioritize rights recognition, capacity building, and value addition over evictions to empower women in forest stewardship.

**By Sarthak Kwatra**

* * *

The United Nations declared *‘Gender Equality Today for a Sustainable Tomorrow’* as the theme for International Women’s Day 2022. The theme is an effort to commemorate and recognise  “the contribution of women and girls around the world, who are leading the charge on climate change adaptation, mitigation, and response, to build a more sustainable future for all.” Around the world, women’s contribution towards climate change mitigation and adaptation has gained immense traction over the years. Gender equity as well equality under law is recognised as a Sustainable Development Goal. While we fondly read about women’s movements to tackle climate change, we hardly think about what set of rules best enable them to do so. For example, the well-meaning conservationists within us will agree with the [expansion](https://www.thehindu.com/sci-tech/energy-and-environment/assam-approves-addition-of-3053-sq-km-areas-to-kaziranga-national-park/article32523409.ece) of Kaziranga National Park without considering its unseen consequences i.e. eviction of forest dwellers including thousands of women whose livelihoods are dependent on the forest. This begs the question: What kind of policies empower women, especially tribal women, to be at the forefront of protecting forests while securing a sustainable livelihood?  

**Community Land and Tenure Rights**

Let’s begin by understanding what we mean by the land and tenure rights for communities. Historically, indigenous people and tribal communities have depended on their forest land and its resources for food, livelihood, medicinal products, water, and so on. Their relationship with their land and its resources is rooted in a set of customs and traditions, which is often called a tenure system. Tenure rights define who gets to use what resources, under what conditions, and for how long. When communities have land and tenure rights, they reap a lot of economic and social benefits from them. The rights over forest produce also allow them rights to access, manage, and use those resources. Communities can use the forest produce for consumption, which guarantees food security. They can also forage and sell the forest produce, which makes for a source of income. Since these communities directly depend on these forest resources, they have the most incentive to protect them. Therefore, there are a lot of environmental benefits of community land and tenure rights as well. 

With men migrating from villages to cities in search of work, the role of indigenous and rural women, who have been left behind, becomes crucial when understanding community rights. *[Power and Potential](https://rightsandresources.org/wp-content/uploads/2017/05/Power_and_Potential_Final_EN_May_2017_RRI-1.pdf)*, a report by the Rights and Resources Initiative, highlights how the recognition of the rights of communities must be accompanied by the recognition of the rights of women of these indigenous and rural communities. In fact, the report emphasizes that laws that protect women’s rights to community forests are more likely to safeguard the forest ownership rights of entire communities. The [Forest Rights Act, 2006](https://tribal.nic.in/FRA/data/FRARulesBook.pdf) is one of only two legislative frameworks (out of the 80 frameworks studied in 30 countries) that not only recognizes the equal rights to community forests for all adult women members of the village assembly, but also requires their participation in decision-making ([Madhu Sarin, 2017](https://landportal.org/blog-post/2021/02/qa-madhu-sarin-strengthening-women%E2%80%99s-land-rights-india))

**Women’s Role in Minor Forest Produce Economy**

Community tenure over forest resources includes the rights to access, collect, use and dispose of minor forest produce, as provided under section 3(1)(c) of the Forest Rights Act, 2006. The Minor forest produce (MFP) economy in India is worth around [Rs. 200 crores](https://india.mongabay.com/2020/02/india-urgently-needs-to-streamline-multi-billion-rupees-worth-ntfp-market/) annually. The importance of the MFP economy lies in the fact that around [275 million](https://www.downtoearth.org.in/infographics/http-www-downtoearth-org-in-dte-userfiles-infographics-mfp-mfp-htm-2224) forest dwellers are supported by income generated through collection and sale of minor forest produce, while around 100 million people directly derive their livelihood from this economic activity. Tribal women form a crucial part of the economy and are mostly involved in the collection of minor forest produce. Estimates suggest that women’s participation in the minor forest produce economy is around 57%, primarily as collectors for different kinds of MFP such as mahua, tendu patta, sal seeds, chironji etc. It wouldn’t be unwise to say that the benefits of a prosperous minor forest produce regime accrue directly to tribal women. 

The recognition of community forest rights over minor forest produce is a precursor to financially empowering tribal women, but it does not by itself ensure viable livelihood opportunities. The economy is riddled with challenges such as the inability of tribal people to negotiate for better prices given lack of market access. Also, the majority of collectors are small time individual collectors, and are not well-organized to ensure attractive returns through bargains. It is here that civil society and government efforts can go a long way. Capacity building, value addition to minor forest products in the form of processing and packaging, and assistance to organize self help groups, are some of the ways in which governments and civil society groups can facilitate change. 

One such example is the successful [model](https://www.thehindu.com/news/cities/Coimbatore/a-tribal-women-led-initiative-to-ensure-fair-price-for-forest-produce/article38268863.ece) of Nelakottai Kattunayakan Women’s Cottage Industry Co-operative in Nilgiris District, Tamil Nadu. This is a group of nine tribal women who set up a co-operative to sell minor forest produce, including honey, greens, yams, spices, vegetables and medicinal herbs on which they have depended for generations. They felt that the government and NGOs including other private traders purchased their forest produce at very low prices. The setting up of the cooperative created new market opportunities and the impact was such that 1 kg of honey, which was earlier sold for Rs. 200-300, is now worth Rs. 1000 per kg. — the benefits go directly to the community. 

The income generated through this venture has also incentivised the local community to create strict controls on the amount of forest produce that can be harvested, thereby ensuring community-led conservation. It is pertinent to mention that this project is supported by the Revenue Department as well as other civil society organizations. The many lessons learnt from such examples of community engagement include the recognition of community forest rights, legally and financially empowering tribal women, and the reaffirmation that the government’s role is not to be the forest guard, but the guardian of people’s rights over forest resources. 

*Read more: [How the virus changed our financial behaviour](https://spontaneousorder.in/how-the-virus-changed-our-financial-behaviour/)*

* * *

**About Sarthak Kwatra**

Sarthak is an Economics graduate from Hansraj College, Delhi University and he's currently working as a Junior Associate at the Centre for Civil Society. Sarthak's areas of interest include Economic History, Free Market Environmentalism, Pop Culture, and often their intersections.

## How the virus changed our financial behaviour

Original: https://www.spontaneousorder.in/p/how-the-virus-changed-our-financial-behaviour

Author: Spontaneous Order

Published: 2022-03-07T14:37:25.000Z

Topics: household-savings, pandemic-economics, consumption-patterns, financial-assets

> Indian households faced a massive income shock in the worst months of the pandemic. How did they respond? And will their reaction have an impact on the trajectory of India’s economic recovery in the years ahead? The government recently released revised

**Summary:**

In the fiscal year 2020-21, Indian households responded to pandemic-induced income shocks by sharply cutting real personal final consumption expenditure by ₹5 trillion (nearly 6%), with nominal spending down ₹2 trillion (1.7%), prioritizing essentials like food, utilities, health, and communications while reducing outlays on clothing, footwear, restaurants, and transport. Gross household savings rose ₹4.61 trillion nominally, driven by a ₹7.09 trillion surge in financial savings and a ₹2.25 trillion drop in physical assets, including stable precious metals spending; this marks a decisive shift from the prior decade's preference for physical savings amid high inflation and negative real rates. Unlike post-demonetization borrowing, household debt did not rise significantly, suggesting households perceived the shock as permanent rather than temporary, opting to protect savings over consumption smoothing—a psychological response confirmed by RBI data showing Q1 savings at 21% of GDP. Corporate savings fell ₹1.19 trillion despite profits, possibly masking small-firm distress. While savings rates may normalize with recovery, the pivot to financial assets could bolster long-term growth, though lingering precautionary behavior might slow consumption rebound and affect economic trajectory.

**Key points:**

- Real consumer spending fell ₹5 trillion (6%) in 2020-21, with cuts in non-essentials like clothing and transport.
- Household financial savings rose ₹7.09 trillion while physical savings dropped ₹2.25 trillion, signaling a lasting shift from gold to financial assets.
- Limited borrowing increase indicates households viewed pandemic shock as permanent, prioritizing savings protection.
- Corporate savings declined ₹1.19 trillion, contrasting higher profits and weak capex.
- Excess Q1 savings persisted rather than being spent down post-lockdown.

**By Niranjan Rajadhyaksha**

* * *

Indian households faced a massive income shock in the worst months of the pandemic. How did they respond? And will their reaction have an impact on the trajectory of India’s economic recovery in the years ahead?

The government recently released revised estimates on national income, consumption expenditure, savings and capital formation for the fiscal year that began soon after the pandemic hit India and ended on 31 March 2021. The new data can be used to get vignettes of how households managed through the crisis, especially their finances. Here are some salient facts.

First, consumer spending in the first year of the pandemic fell compared to the previous fiscal year, more sharply in real terms than in nominal terms. Real personal final consumption expenditure, or consumer spending, came down by ₹5 trillion, or nearly 6%. It fell by a more modest ₹2 trillion (1.7%) in terms of current rather than constant prices.

Second, nominal spending on some items such as food, utilities, health and communications went up, despite the overall decline in consumer spending. The money spent on education remained more or less steady. The data on output suggests that households cut back on items such as clothing, footwear, restaurants and transport, partly because of the restrictions imposed on mobility during various lockdowns.

Third, even as the gross savings of Indian households went up by ₹4.61 trillion in nominal terms, the distribution of these savings between financial and physical savings tells an important story. Gross financial savings increased by ₹7.09 trillion while savings in physical assets declined by ₹2.25 trillion. The money spent on precious metals such as gold and silver was more or less the same. (Note: Households include unincorporated enterprises in the informal sector.)

The sharp increase in gross financial savings by households in 2020-21 was partly forced by the harsh lockdown in the early months of the pandemic. The Reserve Bank of India had estimated that household financial savings had shot up to 21% of gross domestic product in the first quarter of 2020-21, but then came back to their normal level of around 8% once mobility restrictions were eased. The unusually high household savings in the first quarter have undoubtedly bloated the annual numbers, though this also means that the excess savings between April and June 2020 were not spent down.

Why would this be so? The answer is rooted in psychology. Economists generally believe that people respond to severely negative income shocks in two ways. They either borrow to maintain previous levels of consumption or cut their spending to protect savings. A lot depends on whether people expect the income shock to be temporary or permanent. The usual response to a temporary income shock is to smoothen consumption through borrowing, while in the case of a permanent income shock, the household cuts back on spending to protect savings over the long term.

The fact that household debt has not increased significantly in 2020-21, compared to the sharp increase in the two years after demonetization, suggests that Indian households have gradually begun to see income shocks as more permanent than transitory. This is just a guess from reading the macro numbers, but this is an issue that needs more detailed household surveys to understand the underlying behaviour.

It is likely that the gross financial savings rate of households—as a percentage of disposable income—will normalize as the economic recovery deepens. Yet, it is worth pointing out that Indian households seem to have made a decisive switch from physical to financial savings, compared to what they did in the initial years of the previous decade, when physical savings were higher than financial savings as a result of high inflation as well as negative real interest rates.

On the other hand, the savings of private sector companies—or private non-financial corporations, in the precise lingo of government statisticians— actually came down in nominal terms in 2020-21, by ₹1.19 trillion. This fact sits uncomfortably with the overall trend of higher corporate profits plus weak capital spending by companies. Is it possible that the strengthening balance sheets of large companies hides the damage to the balance sheets of smaller companies?

The data cited in this column is on flows rather than stocks. It is quite likely that more savings in 2020-21 has increased the stock of household savings as well, though as this column had earlier argued in another context, a large increase in the stock of household financial savings is not immediately evident in banking data.

In countries such as the US, massive income support for households led to a stock of excess savings that is now being spent down, so an increase in household savings was a mirror image of a higher fiscal deficit. The Indian fiscal response to the pandemic shock was quite different, so the link between a higher fiscal deficit and household finances is less clear.

The Indian economy has recovered from its massive drop in output in the worst months of 2020. It is likely that the difficulties faced by households then could have lingering effects, especially in the choices made between spending, saving and borrowing.

*This article was* *originally published in [Mint](https://www.livemint.com/opinion/columns/how-covid-altered-the-financial-behaviour-of-indian-households-11644338323589.html) on Feb 9, 2022*

*Read more: [Free the Land, Free the Farmer](https://spontaneousorder.in/free-the-land-free-the-farmer/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Free the Land, Free the Farmer

Original: https://www.spontaneousorder.in/p/free-the-land-free-the-farmer

Author: Spontaneous Order

Published: 2022-03-03T11:07:08.000Z

Topics: land-ceilings, land-leasing, agricultural-policy, farmer-livelihoods

> Laws enacted at the state level restrict the sale, purchase, use, and lease of land. These laws depress the value of the land and constrain the choice of livelihood while limiting the farmer’s income. Land ceiling laws restrict the size of agricultural

**Summary:**

State-level land laws in India, including ceiling restrictions and overly restrictive leasing regulations, depress land values, fragment holdings, and trap farmers in low-productivity agriculture while limiting livelihood choices. In Andhra Pradesh, families of five are capped at 4.05 ha of Class A land, contributing to national fragmentation where average household holdings are just 0.411 ha and 82.9% are small or marginal per the 2021 NSSO survey. Leasing laws mandate minimum six-year terms, require owners to surrender at least 50% of land if terminating tenancy, and involve special judicial oversight, deterring formal markets—formal records show only 0.36% leased land versus 33% in NSSO household surveys, indicating widespread informality with enforcement and investment issues. A CSDS survey reveals over 70% of farmers wish to exit farming, yet cultural attachment to land prevents sales; leasing could enable revenue generation and career shifts, but restrictions persist. Low incomes (Rs 8,768 monthly average in AP) and rare sales (5% in prior five years per survey) underscore the trap. The classical-liberal solution: Andhra Pradesh should adopt NITI Aayog's 2016 Model Land Leasing Act to legalize mutual tenancy agreements, freeing farmers to lease without selling and boosting productivity.

**Key points:**

- Land ceiling laws fragment Indian agriculture, with average holdings at 0.411 ha and 82.9% small/marginal farmers.
- Andhra Pradesh leasing laws deter formal markets, showing 0.36% formal leases versus 33% informal per NSSO data.
- Over 70% of farmers want to exit farming but face barriers to leasing due to restrictive tenancy rules.
- Adopt NITI Aayog's Model Land Leasing Act to enable mutual lease agreements and allow farmers to pursue alternatives without selling land.

**By Arjun Krishnan**

* * *

[Laws](https://ccs.in/sites/default/files/primer.pdf) enacted at the state level restrict the sale, purchase, use, and lease of land. These laws depress the value of the land and constrain the choice of livelihood while limiting the farmer’s income. Land ceiling laws restrict the size of agricultural land that an individual or a family can own. The ceilings vary across states based on factors like the kind of crop sown, soil fertility, and family size. In Andhra Pradesh, a family of 5 can only hold 4.05 ha of *Class A* land ([Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973](https://www.indiacode.nic.in/bitstream/123456789/16595/1/act_no_1_of_1973.pdf)).

These laws have had a detrimental effect on the land market in India. As a result of caps on land size, agricultural land in India is highly fragmented and dominated by small and marginal holdings. The 2021 Situation Assessment [Survey](https://www.mospi.gov.in/documents/213904/301563//Report_587m1631267040957.pdf/3793650e-8cf1-7872-ae90-51470c8d211c) of Agricultural Households done by the National Sample Survey Office showed that the average size of household ownership holdings was only 0.411 ha, with small and marginal farmers making up 82.9% of all holdings. 

In addition, laws depress the leasing market. In Andhra Pradesh, land leasing is legal, but if an owner wants to end leasing and take the land back from the tenant, the owner must give at least 50% of the land to the tenant. Leasing has to be for a minimum of six years, and the tenancy can be terminated only by an application to a special judicial officer. Under these conditions, why would anyone lease their land?

A Centre for the Study of Developing Societies (CSDS) [survey](https://www.lokniti.org/media/upload_files/Report%20Farmer%20Survey.pdf) showed that over 70% of farmers want to leave farming. But land is a matter of pride in much of India. Families and individuals may not want to sell their land but merely lease it out. Leasing allows people to retain their land, generate revenue, and pursue alternate career options. But the overly restrictive leasing laws have meant that leases do not typically occur in the formal market. 

The agricultural [census data](https://agcensus.nic.in/document/agcen1516/ac_1516_report_final-220221.pdf) from 2015-16, which relies on formal land records, report that only 0.36% of the land area is leased in Andhra Pradesh. This is in stark contrast to the [NSSO data](http://doc.inflibnet.ac.in/datarepository/index.php/catalog/96/download/1296), which relies on household surveys, where reports show that 33% of the land is leased. 

This discrepancy suggests that much of the land leasing in Andhra Pradesh is happening informally. Informal agreements suffer from enforcement problems and low capital investment in leased land. The average monthly income for an agricultural household in Andhra Pradesh is only [Rs 8,768](https://www.mospi.gov.in/documents/213904/301563//Report_587m1631267040957.pdf/3793650e-8cf1-7872-ae90-51470c8d211c).

Inability to liquidate the prime asset traps families in low-productivity activities. A [survey](https://www.im4change.org/siteadmin/tinymce/uploaded/Farmers%20Report%20Final.pdf) of 18 states and over 5000 respondents reveals that only 5% of farmers sold their land in the preceding five years. In March 2016, NITI Aayog proposed a [Model Land Leasing Act](https://www.niti.gov.in/writereaddata/files/document_publication/Final_Report_Expert_Group_on_Land_Leasing.pdf). The proposed act suggests the legalisation of tenancy. It allows for conditions of lease to be defined mutually by the tenants and landlords. Andhra Pradesh should adopt this Act and allow farmers the freedom to exit farming, without having to sell their land. 

*Read more: [For True Vigyaan Sarvatra Pujyate, Bring Science to Agriculture](https://spontaneousorder.in/for-true-vigyaan-sarvatra-pujyate-bring-science-to-agriculture/)*

* * *

**About Arjun Krishnan**

Arjun Krishnan is a political science graduate from Ashoka University and has a master's degree from Warwick University. Prior to joining CCS, he interned with the Cato Institue and the Institute of Economic Affairs. The ideal of freedom, both economic and social, are of great importance to him. He enjoys travelling, reading books, and listening to podcasts.

## For True Vigyaan Sarvatra Pujyate, Bring Science to Agriculture

Original: https://www.spontaneousorder.in/p/for-true-vigyaan-sarvatra-pujyate-bring-science-to-agriculture

Author: Spontaneous Order

Published: 2022-02-28T12:02:00.000Z

Topics: gm-crops, agricultural-biotech, food-security, regulatory-reform

> This past week, the Government of India has been celebrating ‘Vigyan Sarvatra Pujyate’ as a lead up to National Science Day today. Dr Jitendre Singh, Union Minister of State of Science and Technology and Earth Science, also announced the theme, Integr

**Summary:**

In the context of India's 'Vigyan Sarvatra Pujyate' celebrations and National Science Day, the post urges embracing genetically modified (GM) crops to achieve sustainable agriculture, better farmer livelihoods, and food security, criticizing decades of anti-GM sentiment as a corporate conspiracy myth. It argues GM crops are safe, citing nearly 3,000 studies and endorsements from 284 institutions including WHO, European Commission, and Royal Society, plus a 2016 National Academies review of over 900 publications finding no greater health or environmental risks than non-GM crops. Farmers in Indian districts like Ahmednagar and Akola demand GM varieties, willing to face arrest, mirroring Bangladesh where Bt Brinjal reduced pesticide use by 61% and boosted profits six-fold; globally, GM acreage hit 190.4 million hectares in 2019 (11.6% of cropland), with 56% in developing countries, and Zimbabwe lifted its GM corn import ban in 2020 to avert famine. Alternatives like large-scale organic farming fail, as seen in Sri Lanka's 2021 ban on chemical fertilizers leading to crop failures, high prices, and $200 million in farmer compensation. India's regulatory delays, like the 10-year Bt Brinjal moratorium ended in 2020, hinder progress, while pushing 'chemical-free' farming traps farmers in poverty; GM crops cut costs, ease environmental burdens, and enhance nutrition, aligning science with classical-liberal emphasis on innovation over restrictive policies.

**Key points:**

- GM crops are safe for human health and the environment, backed by 3,000 studies and endorsements from WHO and others.
- Indian farmers in key districts demand GM crops, as evidenced by protests and successes like Bangladesh's Bt Brinjal reducing pesticides by 61% and multiplying profits six-fold.
- Global adoption of GM crops reached 190.4 million hectares in 2019, with 56% in developing countries, proving their value.
- Large-scale organic farming fails, as Sri Lanka's policy caused crop failures requiring $200 million compensation.
- India must end regulatory logjams on GM crops like Bt Brinjal to enable farmer prosperity and sustainable agriculture.

**By Tarini Sudhakar**

* * *

This past week, the Government of India has been celebrating ‘Vigyan Sarvatra Pujyate’ as a lead up to National Science Day today. Dr Jitendre Singh, Union Minister of State of Science and Technology and Earth Science, also announced the theme, *Integrated Approach in S&T for Sustainable Future*. But in all this cheer, we forget to mention the most important thing: how science can bring sustainability to agriculture. And yes, we are talking about genetically modified crops.  

Genetically modified (GM) crops are the way forward to ensure better livelihoods for farmers, sustainable agriculture, and improved food security for the world. But for decades, we have painted them in a negative light, only seeing them as a tool of corporates. Here are three reasons why we should not pay heed to this thinking, and instead understand the advantages of GM crops.  

1.  Genetically modified crops are safe
    

International watchdogs and regulators across the world have found GM to be largely safe. Nearly 3,000 scientific studies have assessed the safety of these crops and 284 institutions globally, including the World Health Organisation, European Commission and Royal Society of Medicine, recognise that GM crops are safe. In [2016](https://www.nap.edu/resource/23395/GE-crops-report-brief.pdf), the National Academies of Sciences, Engineering, and Medicine reviewed more than 900 publications, heard 80 speakers, and took more than 700 comments from the public to understand issues surrounding GE crops. They all came to the same conclusion: GM crops did not pose any more of a risk to human health compared to non-GM crops, nor did they conclusively lead to any environmental problems.

2.  Farmers want to plant genetically modified crops
    

Ahmednagar, Akola, Fatehabad. All these places are key points in the history of Indian agriculture where farmers voiced their support in favour of GM in the country.  But did we pay attention? No. Farmers are ready to court arrest and face prison, just to be able to plant a reliable crop. And why should they not? Their neighbours in Bangladesh [cut their pesticide use by 61% and increased their profits six-fold](https://www.frontiersin.org/articles/10.3389/fbioe.2018.00106/full?&utm_) by growing Bt Brinjal.  Global acreage of GM crops has increased to 190.4 million ha in 2019, accounting for nearly 11.6% of global cropland. As of [2019](https://www.isaaa.org/resources/publications/pocketk/16/), 56% of global acreage under GM crops was planted by developing countries. Countries across the world are starting to see the value in genetically modified crops. For instance, although Zimbabwe put temporary moratoriums on GM seeds, in [2020](https://time.com/5775168/zimbabwe-genetically-modified-corn-famine/), it lifted the ban on imports of GM corn to avoid an impending famine. 

3.  Alternatives such as large-scale natural farming are bound to fail 
    

Anti-GM proponents like to call for a switch to “chemical-free” or “zero budget” organic farming. But is this really feasible? In 2021, the Sri Lankan government banned the import of chemical fertilisers and other agrochemicals in an attempt to go 100% organic. What followed were depressed yields, high prices, and crop failure for more than a million farmers. Unsurprisingly, the government reversed its decision and had to pay [$200 million](https://www.aljazeera.com/news/2022/1/26/sri-lanka-200-million-compensation-farmers-organic-crops-drive#:~:text=News%7CAgriculture-,Sri%20Lanka%20to%20pay%20%24200m%20compensation%20for%20failed%20organic,farming%20nation%20will%20be%20compensated.) to farmers whose crops failed under this scheme.

High yielding varieties planted during the Green Revolution sapped fields of their nutrients and water levels. Organic farming depends on compost, manure, seed knowledge, and most of all, soil that is nutrient-replenished. When Sri Lanka made the switch at a large-scale, the harvest was bound to fail.  In India, GM crops have been stuck in a regulatory logjam for many years now. It was only after a 10-year moratorium that the government allowed field trials for Bt Brinjal to resume in 2020. There is still, however, a dangerous push for “chemical-free natural farming” accompanying these changes. Organic natural farming is a great way to grow crops when you would like to feed only your family. But to demand that farmers take this up, is as good as saying that we will make sure they never grow to see prosperity. GM crops help farmers cut costs, [reduce burden](https://www.tandfonline.com/doi/full/10.1080/21645698.2020.1773198) on the environment, and provide more nutrition. They are a better alternative for farmers and for the world. This National Science Day, let us bring science back into agriculture and see anti-GM claims for what they are: a perpetual poverty trap.

*Read more: [Why it is too early for government to bet big on green hydrogen](https://spontaneousorder.in/why-it-is-too-early-for-government-to-bet-big-on-green-hydrogen/)*

* * *

**About Tarini Sudhakar**

Tarini studied History at Lady Shri Ram College for Women. She is a former Research Associate of the Centre for Civil Society.

## Why it is too early for government to bet big on green hydrogen

Original: https://www.spontaneousorder.in/p/why-it-is-too-early-for-government-to-bet-big-on-green-hydrogen

Author: Spontaneous Order

Published: 2022-02-25T11:50:45.000Z

Topics: green-hydrogen, energy-policy, industrial-policy, government-subsidies

> Industrialists have delightedly hailed the government’s new green hydrogen policy offering incentives to produce 5 million tons of hydrogen by 2030. India already produces solar and wind energy more cheaply than new thermal power. But while renewables c

**Summary:**

Swaminathan SA Aiyar argues that India's government should not heavily subsidize green hydrogen production targeting 5 million tons by 2030, despite its potential to decarbonize hard-to-abate sectors like steel, cement, shipping, airlines, and fertilizers using cheap renewable electricity. While industrialists like Mukesh Ambani ($80 billion investment pledge) and Gautam Adani ($70 billion) are ambitiously investing, with Ambani aiming to cut green hydrogen costs from $3/kg to $1/kg in a decade, the technology remains experimental and risky. Aiyar warns of safety hazards, citing the 1937 Hindenburg airship disaster that collapsed the industry due to hydrogen's flammability, and nuclear setbacks like Fukushima (2011, 150,000 evacuated) and Chernobyl (1986). He also references the US Solyndra flop, where Obama's $535 million loan guarantee failed amid cheaper Chinese silicon solar tech. From a classical-liberal viewpoint, governments should avoid picking winners prematurely, as technologies evolve rapidly; instead, encourage research and pilot plants, reframe the 2030 goal as an 'aspiration,' build Plan B exit strategies, limit subsidies to prevent cronyism and bailouts, and keep green hydrogen's energy share modest to avert economic cripples if it fails. Prioritize safer green alternatives.

**Key points:**

- Rename the 2030 target of 5 million tons of green hydrogen production as an 'aspiration' to avoid politically driven wasteful spending.
- Limit government financial commitments to research and pilots, leaving most risks and investments to private industrialists like Ambani and Adani.
- Maintain a modest proportion of green hydrogen in total energy mix to prevent industry-wide collapse if safety disasters or technological failures occur, as with Hindenburg or Solyndra.
- Prepare a Plan B for prudent retreat, learning from past government bets like Obama's $535 million Solyndra loan that busted amid market shifts.

**By Swaminathan SA Aiyer**

* * *

Industrialists have delightedly hailed the government’s new green hydrogen policy offering incentives to produce 5 million tons of hydrogen by 2030. India already produces solar and wind energy more cheaply than new thermal power. But while renewables can replace fossil fuels in many uses, coal is still needed in industries like steel and cement, and liquid fuels in shipping and airlines (renewables cannot power long trips).

Passing electricity through water produces hydrogen. If the electricity comes from renewable power, the output is called green hydrogen. This can be stored and later burned to produce high-intensity energy for steel, cement, shipping and airlines. It can be used to produce fertilisers. It has enormous potential. But please hold the champagne. It also carries big economic and safety risks. An experimental technology, it could be a big hit or big flop. The government should be cautious in expending financial and human resources.

Encouraging research and pilot plants is highly desirable. But the huge 2030 target should be renamed an “aspiration” since a “target” may be seen by politicians as an excuse to throw good money after bad if the technology fails. A Plan B for prudent retreat should be built into the overall strategy.

A hundred years ago, heavier-than-air aircraft invented by the Wright brothers were too costly and fuel-guzzling to be viable, and had little passenger capacity. Since hydrogen was lighter than air, companies built huge hydrogen-filled steel airships needing little energy for propulsion. Airships could carry 100 people over long distances. Their future seemed bright. But hydrogen is highly inflammable and explosive. The slightest leak or spark could mean disaster. In 1937, the Hindenburg, an enormous airship, caught fire, killing 36 people. Dramatic photos spread the message that airships were unsafe. The entire airship industry collapsed, never to revive.

No matter how attractive green hydrogen may seem today, it is also dangerous. If the government and big industrialists spend lakhs of crores on developing it, this carries the risk of disaster and industrial collapse as with the Hindenburg. India should keep the proportion of green hydrogen in total energy modest so that a shutdown after a possible disaster does not cripple transport and industry.

Another cautionary tale comes from the Fukushima nuclear power station in Japan. An earthquake in 2011 let the sea flood in, causing nuclear meltdowns, hydrogen explosions, and large-scale radioactive leakage. Over 150,000 people were evacuated and long-run effects are still unknown. Earlier, the Chernobyl nuclear disaster of 1986 killed thousands and highlighted the risks of nuclear power. Fukushima forced countries across the world to rethink the green strategy of replacing fossil fuels with nuclear power is now just a niche solution.

Technology changes so often and swiftly that no country should choose winners in advance. The classic cautionary story is US President Obama’s loan guarantee of $535 million to Solyndra, a company with a new technology based on copper indium gallium selenide rather than conventional silicon. The company promised to create thousands of jobs but alas the price of conventional silicon solar cells made in China kept plummeting. Solyndra’s brave new technology became hopelessly uneconomic, and it went bust. Obama never got over that fiasco.

The Indian government is not choosing any specific green hydrogen technology: it is happy to see many hydrogen technologies compete. However, as with Solyndra, the risk remains that some other technology may prove more economic and kill green hydrogen. We must prepare for that possibility. 

In January, Mukesh Ambani pledged a massive $80 billion investment in renewables, hydrogen and related sectors. Gautam Adani proposed spending $70 billion on renewables including solar equipment. Last year, Ambani said that within a decade his new plants would reduce the price of green hydrogen — produced using renewable energy — from $3/kilo to just $1/kilo. It is an admirable, ambitious target that would be a boon for humanity. But what if he fails? If the massive investments proposed by Ambani, Adani and other players require huge government subsidies, critics will, rightly, call it cronyism. If their multi-billion ventures cannot compete and go bust, will they be bailed out? If so, critics will call it the cronyism of the century. The government must keep its financial commitments modest and leave most risks on the shoulders of industrialists. 

Green hydrogen is a risky gamble. I would rather go for other green technologies that are safer. Never forget the lessons from Hindenburg, Solyndra, or Fukushima.

*This article was originally published in [The Times of India](https://timesofindia.indiatimes.com/business/india-business/why-it-is-too-early-for-government-to-bet-big-on-green-hydrogen/articleshow/89690895.cms) on Feb 20, 2022.*

*Read more: [On the Origin of Transit Permits](https://spontaneousorder.in/on-the-origin-of-transit-permits/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## On the Origin of Transit Permits

Original: https://www.spontaneousorder.in/p/on-the-origin-of-transit-permits

Author: Spontaneous Order

Published: 2022-02-24T16:17:19.000Z

Topics: forest-rights-act, public-choice-theory, transit-permits, bureaucratic-resistance

> In 2006, with the Forest Rights Act (FRA), India aimed to undo the historical injustices faced by communities that were stripped away from the land that they had traditionally stewarded. It envisioned the return of forest resources to the forest dwellin..

**Summary:**

The Forest Rights Act (FRA) of 2006 sought to rectify historical injustices by empowering forest-dwelling communities through Gram Sabhas to manage Community Forest Resources (CFR), including issuing transit permits for Minor Forest Produce, shifting control from state Forest Departments. Transit permits, a colonial relic from the Indian Forest Act of 1927 (Section 41), historically allowed bureaucrats to regulate forest produce movement. Despite FRA, Forest Departments resist this power transfer, driven by Public Choice Theory's 3I framework—incentives, information, and interests—where bureaucrats maximize their turf rather than assuming benevolence. Examples include Odisha villages Naupada and Dekhnapada denied permits for nationalized Kendu leaves despite CFR rights (Kukreti, 2018), and Jharkhand's Forest Produce Rule 2020, which exempts permits only for domestic use, confining communities to subsistence and violating FRA's spirit. This bureaucratic opposition hampers FRA implementation. From a classical-liberal lens, Public Choice reveals how flawed incentives perpetuate colonial control; the solution lies in exposing these contradictions to prevent repetition and unlock FRA's potential for community empowerment.

**Key points:**

- Forest Rights Act 2006 empowers Gram Sabhas to issue transit permits for Minor Forest Produce in CFR areas, overriding colonial-era Forest Department control.
- Bureaucrats resist via Public Choice dynamics, prioritizing turf maximization over community rights.
- Odisha denied transit permits to Naupada and Dekhnapada villages for Kendu leaves despite CFR titles.
- Jharkhand's 2020 Forest Produce Rule limits permit exemptions to subsistence use, undermining FRA.
- Expose bureaucratic contradictions using Public Choice to improve FRA implementation.

**By Sarthak Kwatra**

* * *

In 2006, with the [Forest Rights Act (FRA)](https://tribal.nic.in/FRA/data/FRARulesBook.pdf), India aimed to undo the historical injustices faced by communities that were stripped away from the land that they had traditionally stewarded. It envisioned the return of forest resources to the forest dwelling communities that had depended on these resources for habitation, livelihood, and other socio-economic needs. However, in the last fifteen years, efforts to thwart any progress made under the Forest Rights Act, 2006 have been ever-increasing and overwhelming. It is paradoxical to note that at the bedrock of these violations are the very people who were entrusted with the implementation of the FRA – the bureaucrats. Even today, it is not hard to find laws and legislations that harbour a dated colonial essence, or a state government’s new rules that are in complete violation of the spirit of the FRA. So, why are the officials of this entrenched Indian Forest Department reluctant to lose control of the forests and its products? This article briefly attempts to explore the reasons for the languid impact of arguably one of the most well-intentioned steps towards empowering communities – the Forest Rights Act, 2006, with an emphasis on transit permits. 

In the 1960s, Gordon Tullock and James M. Buchanan championed the insights that surface when foundational economic principles are used to explain happenings in politics. Even a cursory glance at [Public Choice Theory](https://ccs.in/sites/all/books/com_books/public-choice-a-primer.pdf), or simply Public Choice as it came to be called, gives far-reaching insights into the existence of these contradictory rules, and the behaviours of politicians and bureaucrats with respect to forests and forest resources in India. 

Using the framework of the 3I’s – Incentives, Information, and Interest – Public Choice connects the dots between a flawed political system and faulty incentives. An assumption of the benevolence and impartiality of all bureaucrats precedes any welfare economist’s argument; bureaucrats only put to practise the legislators’ decisions with candour. However, Public Choice points to the futility of expecting extraordinary benevolence and impartiality from bureaucrats. Within the constraints on their power, they attempt to maximise their own ambitions and turf. Thereby, when a monumental legislation like the Forest Rights Act is put into place, which threatens to limit the powers or turf of bureaucrats (in this case, transfer of power from Forest Departments to Gram Sabhas), there is a palpable opposition from them. One way in which this opposition has manifested itself is in the use of transit permits. 

Let’s understand what transit permits mean in the first place. As is suggestive from the name, transit permits are essentially documents permitting the carrying of forest produce out of the area where it grows. Transit permits are a prime example of an institution that came into existence in colonial times with Indian Forest Act, 1927, and still lingers in what can only be described as a colonial hangover. This is explained by the fact that the Indian Forest Act of 1927 oft-borrowed from the Indian Forest Act of 1878, which is why at the centre of it were only guns and guards to gate-keep indigenous people and local communities from the forest resources they had traditionally stewarded. Under Section 41 of the Indian Forest Act, 1927: 

Power to make rules to regulate transit of forest produce —

*(1) The control of all rivers and their banks as regards the floating of timber, as well as the control of all timber and other forest-produce in transit by land or water, is vested in the 1 \[State Government\], and it may make rules to regulate the transit of all timber and other forest-produce.*

*(2) In particular and without prejudice to the generality of the foregoing power such rules may—*

*(a) prescribe the routes by which alone timber or other forest-produce may be imported, exported or moved into, from or within 2 \[the State\];*

*(b) prohibit the import or export or moving of such timber or other produce without a pass from an officer duly authorised to issue the same, or otherwise than in accordance with the conditions of such pass;*

Thereby, for nearly fifty years after Indian independence, the Indian Forest Department controlled the transit of forest produce using permits. This changed with the Forest Rights Act, 2006. With this, a committee formed by Gram Sabhas could issue transit permits themselves over the areas that they have Community Forest Resource (CFR) Rights, instead of having to approach the state forest departments. In essence, Gram Sabhas now had the onus of what they choose to do with the Minor Forest Produce (non-timber forest produce of plant origin); transport and sell it in a way that seems suitable to them, and draw up conservation and management plans and integrate them with the plans of the respective state (if considered necessary). 

While this was a foundational step towards empowering communities, the reality is far from hunky-dory. Deliberating in the framework that we have established so far, it is hard to imagine that this transition of power from bureaucrats of the forest department to Gram Sabhas has been smooth. State forest departments still intervene to hinder the exercise of community rights. For instance, owing to the *Kendu* leaf being a nationalised product of the state of Odisha, the villages of Naupada and Dekhnapada faced troubles in the issuance of transit permits, despite having received their CFR rights years prior ([Kukreti, 2018](https://www.downtoearth.org.in/news/forests/despite-forest-right-titles-2-kalahandi-villages-denied-transit-permit-60504)). Another recent example that comes to light in this regard is the Forest Produce Rule 2020 that was enacted in Jharkhand. The Forest Produce Rule 2020 limits the power that had been vested in Gram Sabhas by exempting the need for transit permits only when using the forest products domestically ([Toppo, 2020](http://adivasiresurgence.com/2020/07/09/undoing-the-fra-how-the-new-jharkhand-forest-produce-rule-2020-undermines-forest-rights/)). This has been interpreted to mean subsistence for these local communities. While the idea of the subsistence way of living is often romanticised, a voluntary movement towards it is hardly observed. Therefore, while the Forest Rights Act continues to empower these communities in giving them the liberty to conserve and manage the Minor Forest Produce in their areas, limiting use to subsistence is restraining and is against the spirit of the FRA.  

An analysis of the implementation of the Forest Rights Act with a lens of Public Choice Theory highlights the token of transit permits that is used by forest departments to circumscribe the power of the Gram Sabhas. The solution that Public Choice Theory suggests for this is the exposure of bureaucratic incompetence, as [Eamonn Butler writes](https://ccs.in/sites/all/books/com_books/public-choice-a-primer.pdf). In my sense, the more these contradictions in legislation come to light, the lesser a chance there is of their repetition in different states. After all, the potential of the Forest Rights Act is unfathomable, but the implementation has a long way to go.

*Read more: [The budget has got its building blocks more or less right](https://spontaneousorder.in/the-budget-has-got-its-building-blocks-more-or-less-right/)*

* * *

**About Sarthak Kwatra**

Sarthak is an Economics graduate from Hansraj College, Delhi University and he's currently working as a Junior Associate at the Centre for Civil Society. Sarthak's areas of interest include Economic History, Free Market Environmentalism, Pop Culture, and often their intersections.

## The budget has got its building blocks more or less right

Original: https://www.spontaneousorder.in/p/the-budget-has-got-its-building-blocks-more-or-less-right

Author: Spontaneous Order

Published: 2022-02-14T11:45:30.000Z

Topics: fiscal-deficit, public-debt, indian-budget, economic-recovery

> Nirmala Sitharaman has to be complimented for two of the main building blocks of her fourth budget as finance minister. First, she has budgeted for a modest reduction in the fiscal deficit when the recovery in domestic demand is still uneven. A sharp re..

**Summary:**

Nirmala Sitharaman's fourth budget rightly features a modest fiscal deficit reduction from 6.9% of GDP in 2021-22 to 6.4% in 2022-23, avoiding risks to uneven economic recovery amid expected RBI monetary tightening and paving the way for sharper corrections toward a 4.5% medium-term target by 2025-26, despite impending elections testing resistance to political business cycle pressures. The budget rests on reasonable, conservative assumptions like 11.1% nominal GDP growth—below 2021-22's 17.6%—and slower tax revenue growth relative to the economy, providing an inbuilt buffer after stellar 2021-22 collections exceeding estimates by ₹2.20 trillion despite ₹2.99 trillion supplementary subsidies. It continues the COVID-era strategy of supply-side credit guarantees (e.g., extended Emergency Credit Line) and capex over revenue spending, cutting rural employment and food/fertilizer subsidies while boosting infrastructure, though state capacity for execution is questioned. High public debt at nearly 90% of GDP—up 20 points pre-pandemic—drives interest payments to 48.6% of net tax collections in 2022-23 (from 37.9% in 2019-20), narrowing the growth-interest rate gap and necessitating primary deficits near IMF's 2.9% stabilization level. From a classical-liberal lens, continuity trumps tax tinkering or compression, but creeping protectionism and recovery sustainability amid global headwinds loom as concerns.

**Key points:**

- Budget targets fiscal deficit reduction from 6.9% to 6.4% of GDP to balance recovery and medium-term prudence.
- Assumes conservative 11.1% nominal GDP growth and slower tax revenue expansion as a buffer.
- Prioritizes capex and supply-side measures like extended credit guarantees over revenue spending and subsidies.
- Public debt nears 90% of GDP, with interest payments claiming 48.6% of net tax collections in 2022-23.

**By Niranjan Rajadhyaksha**

* * *

Nirmala Sitharaman has to be complimented for two of the main building blocks of her fourth budget as finance minister.

First, she has budgeted for a modest reduction in the fiscal deficit when the recovery in domestic demand is still uneven. A sharp reduction in the fiscal deficit, even as the Reserve Bank of India (RBI) is expected to tighten monetary policy to quell rising inflationary pressures, could have put the economic recovery at risk. The aim to reduce the fiscal gap from 6.9% of gross domestic product (GDP) in 2021-22 to 6.4% of GDP in 2022-23 also means that the fiscal correction in the subsequent three years will be more severe, if India is to meet its medium-term fiscal deficit target of below 4.5% of GDP in 2025-26. Remember, there is a general election scheduled in the middle of all this. Whether the Narendra Modi government can avoid the usual demands of the Indian political business cycle will be an acid test. Bond yields surged soon after the size of the borrowing programme was announced.

Two, the budget has been built on reasonable assumptions. The finance minister has generally stuck to this strategy during her tenure, and also made budgeting more transparent than before. At 17.6%, nominal GDP growth was off the charts in 2021-22, thanks to the economic recovery as well as rise in consumer and wholesale prices. There is an overwhelming consensus that nominal GDP growth will be much lower next year. The budget has been built on the assumption that the Indian economy will grow at 11.1% in nominal terms, which seems out of line with the estimates of real growth that economists in the finance ministry announced on Monday, as well as most inflation forecasts. The conservative assumption on nominal GDP growth next year is an inbuilt buffer in the new budget.

Tax collections this year have been stellar, partly because the economic recovery has favoured large enterprises as well as people with higher incomes. The fact that net tax revenue is likely to be ₹2.20 trillion more than what the budget had announced last year ensured that the government will be able to almost stick to its fiscal deficit target, despite the ₹2.99 trillion supplementary demand tabled in parliament in December to pay for an increase in food and fertilizer subsidies. Growth in tax revenues in 2022-23 is expected to be slower than growth in the underlying economy, which is a safe assumption.

The Indian fiscal response to the covid shock had two elements. The intervention to protect the supply side of the economy was skewed towards ‘below-the-line’ measures such as credit guarantees rather than direct income support. The extra spending to support aggregate demand focused on capital rather than revenue spending, because of the higher fiscal multipliers for the former. This strategy continues in the new budget as well, even though the supply shock has now morphed into stress on the demand side. For example, the Emergency Credit Line Guarantee Scheme has been extended for another year. The budget for the national rural employment scheme has been cut significantly—implicitly assuming a jobs revival—while the subsidy bill for food and fertilizers has also been reduced sharply, even as funding for drinking-water, sanitation and roads programmes has been increased. The inability of government departments to spend on new projects—as a recent report from the Controller General of Accounts showed—raises questions about state capacity to deliver on such a strategy.

There is a shadow looming over the new budget. As a result of the borrowing needed to support the economy in the worst months of the pandemic, public debt is now nearly 90% of GDP, the highest in many decades and nearly 20 percentage points higher than its pre-pandemic level. The interest burden of this higher debt is evident in the finances of the government. For example, the total spending of the Union government has increased by ₹12.47 trillion in two years of the pandemic while interest payments have gone up by ₹3.16 trillion. Also, interest payments will suck up 48.6% of the net tax collections of the Union government in 2022-23, compared to 37.9% in 2019-20, which was the last fiscal year before the covid pandemic struck.

The dynamics of public debt are complex, but India has usually brought down its public debt as a percentage of GDP when nominal economic growth is far higher than the borrowing costs of the government. In 2021-22, the gap between nominal growth and the interest rate was the highest in a decade. It will narrow next year as nominal growth comes down while RBI increases interest rates. The narrower the gap, the sharper the fiscal correction will have to be, to meaningfully reduce the burden of public debt over the next decade. The International Monetary Fund has estimated that the primary deficit needed to stabilize India’s debt/GDP ratio is 2.9% of GDP, which is close to what has been budgeted.

The pandemic has left behind deep scars on the Indian economy. The overarching strategic theme of Budget 2022 seems to be continuity rather than any sudden changes in tax laws or severe expenditure compression. There has been the usual tinkering with tax rates, and creeping protectionism is a worry. Much now depends on whether the economic recovery can sustain itself given the international economic situation, higher domestic interest rates and a gradual withdrawal of fiscal support.

*This article was originally published in [Mint](https://www.livemint.com/opinion/online-views/the-budget-has-got-its-building-blocks-more-or-less-right-11643737885740.html) on Feb 2, 2022.*

*Read more: [FM could privatise 1% at a time](https://spontaneousorder.in/fm-could-privatise-1-at-a-time/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## FM could privatise 1% at a time

Original: https://www.spontaneousorder.in/p/fm-could-privatise-1-at-a-time

Author: Spontaneous Order

Published: 2022-02-07T13:04:31.000Z

Topics: privatization, psu-reform, fiscal-policy, economic-reforms

> The Budget has been widely praised for avoiding populist freebies before the coming state elections and focusing instead on a big investment thrust to accelerate economic growth and lift all boats. The black spot is the failure of privatisation this yea..

**Summary:**

Swaminathan SA Aiyer criticizes the Indian government's failed privatization efforts, which missed last year's Rs 175,000 crore target, revising to Rs 78,000 crore, with next year's estimate at just Rs 68,000 crore. Stalled sales of heavyweights like BPCL, Container Corporation of India, and Shipping Corporation of India after two years, silence on bank and insurance privatizations, and non-materialization of the Rs 600,000 crore National Monetisation Pipeline underscore the disaster of the current approach amid a fiscal crisis with falling tax-to-GDP ratios and rising interest-to-GDP burdens. From a classical-liberal viewpoint, vested interests, trade unions, and procedural delays block structural reforms needed for investment thrust. Aiyer proposes selling 1% of selected PSU shares monthly at market prices to generate steady revenue, avoid under-pricing accusations, and bypass cronyism fears, as suggested by Niti Aayog under Arvind Panagariya. Additionally, pass an omnibus law authorizing all asset sales, overriding original ownership laws to speed processes and reduce opposition. The Finance Minister must implement a time-bound plan with bureaucratic accountability to enable outright privatization, countering populist retreats post-farm agitation.

**Key points:**

- Sell 1% of shares in selected PSUs every month at market price to generate steady revenue without cronyism accusations.
- Pass an omnibus law authorizing sales of any government assets, overriding original ownership laws.
- Privatization targets slashed from Rs 175,000 crore projected to Rs 78,000 crore revised, with next year at Rs 68,000 crore.
- Stalled sales of BPCL, CCI, SCI after two years and no progress on National Monetisation Pipeline of Rs 600,000 crore over four years.
- Implement time-bound asset sales plan with fixed bureaucratic responsibility and penalties for failure.

**By Swaminathan SA Aiyer**

* * *

The Budget has been widely praised for avoiding populist freebies before the coming state elections and focusing instead on a big investment thrust to accelerate economic growth and lift all boats. The black spot is the failure of privatisation this year and diminished hope for the future.

The current privatisation approach is a proven disaster. We need something different. One solution would be to sell 1% of the shares of selected PSUs every month at the going market price. That would avoid accusations of under-pricing and cronyism. Right now, we hear constant fears of what might go wrong and how structures and procedures must be devised to avoid scam accusations and ensure a good sale price. By all means address those issues, but meanwhile keep selling 1% per month so that money for fresh investment keeps rolling in and is not hostage to constant roadblocks from vested interests. Niti Aayog suggested an approach of this sort in the Arvind Panagariya era.

In many cases, fresh legislation is required to permit privatisation, creating procedural delays and inviting heated political and trade union opposition in each case. Instead, the government should pass one omnibus law authorising sales of any of its assets, overriding the original laws that gave it ownership. This will speed up sales and reduce political sensitivities.

Last year, the Budget projected asset sales of Rs 175,000 crore. The revised estimate is now just Rs 78,000 crore. In what looks like a despairing loss of confidence, the estimate for next year is even lower at Rs 68,000 crore.

Despite the spurt in GST collections and the attack on black money, the overall trend in revenues is simply not buoyant enough. Sitharaman’s Budget speech said there was “fiscal space” for a big investment thrust, but this was based on a bounce-back from Covid, and cannot be sustained. Rathin Roy, former member of the PM’s Economic Advisory Council, says there is an ongoing fiscal crisis demonstrated by the tax to GDP ratio, which was targeted at 8% from 2017-18 onwards but keeps falling short. Meanwhile, the ratio of interest to GDP rises inexorably as government debt keeps mounting. The only way forward is large-scale asset sales, but these have now foundered.

Finance Ministry sources are ambiguous about whether the Rs 78,000-core figure for asset sales this year includes proceeds from the IPO of the Life Insurance Corporation which officials hope to complete by March end. Maybe this will fetch a bonanza. But none should confuse an IPO with privatisation. The latter is a real structural reform ensuring a new management that improves future performance.

Almost two years ago the government decided to privatise heavyweights like BPCL, Container Corporation of India (CCI) and Shipping Corporation of India (SCI). Many hailed this as a breakthrough. Almost two years later, none of the three have been sold.

This is not the stuff that reforms are made of.

Last year’s Budget speech promised privatisation of two banks and one insurance company. This year’s speech was deafeningly silent on that. 

Last year, Sitharaman announced a National Monetisation Pipeline that would sell a whopping Rs 600,000 crore of old infrastructure (such as ports, roads, airports, and rail routes) over four years to finance new infrastructure. Many of us hailed that as revolutionary. But what has actually happened? The Budget gives no clue about sales this year or next, or why the huge promised inflows have not materialised. It says nothing of the railway routes fiasco. The government called for bids for 151 privately-run passenger trains on 109 routes. It failed to get a single acceptable bid. Among other things, bidders had no faith in the proposed regulatory structure to give them a level playing field with government-run competition. Entrenched bureaucratic interests do not want loss of turf.

Government surrender to the farm agitation seems to have taken the wind out of the sails of radical change. Privatisation seems to be a casualty. If the BJP fares badly in the UP state election, it will unfortunately give further impetus to BJP factions that favour the promotion of communalism over economic change as the way forward.

Sitharaman needs a time-bound plan for asset sales, with bureaucratic responsibility clearly fixed and heads rolling after any serious failure. The government is often criticised for being too authoritarian, but asset sales require more toughness, not less.

In addition, she should announce a scheme to sell 1% of shares of select public sector undertakings every month. That will keep revenue rolling in while political sensitivity fades, setting the scene for eventual outright privatisation.

*This article was originally published in [The Times of India](https://timesofindia.indiatimes.com/india/how-fm-could-privatise-1-at-a-time/articleshow/89371390.cms) on February 5, 2022.*

*Read more*: *[Price Cap Policy on Coronary Stents and its Unintended Consequences](https://spontaneousorder.in/price-cap-policy-on-coronary-stents-and-its-unintended-consequences/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Price Cap Policy on Coronary Stents and its Unintended Consequences

Original: https://www.spontaneousorder.in/p/price-cap-policy-on-coronary-stents-and-its-unintended-consequences

Author: Spontaneous Order

Published: 2022-02-01T10:58:11.000Z

Topics: price-controls, coronary-stents, ncd-prevention, health-policy

> Many LMIC economies, including India are getting crippled due to the surge in non communicable diseases (NCDs). A report titled India – Health of Nation’s States (2019) estimated that 61% of mortality and 55% of the disability adjusted life years were

**Summary:**

India's 2017 price cap on coronary stents slashed prices by 85%—bare metal stents (BMS) to Rs 7,260 from Rs 45,000, drug-eluting stents (DES) to Rs 29,600 from Rs 1.21 lakh—aiming to enhance affordability amid NCDs causing 61% of mortality and 55% of DALYs in 2016. From a classical-liberal viewpoint, this well-intentioned policy ignored information constraints like absent RCTs on stents' efficacy over lifestyle changes, yielding unintended consequences: foreign firms withdrawing premium products, hospitals hiking non-stent costs (balloons, catheters), 60% rise in DES and emergency procedures, 71% drop in BMS use, and shifts from CABG to PCI. Stents offer only short-term symptomatic relief, not reducing long-term heart attack risks. Per the Bhagwati-Ramaswami theorem, superior policy targets root causes via primary care screening, awareness campaigns, incentives for 150-300 minutes weekly moderate physical activity, workplace stress reduction (gym vouchers, yoga), and nutrition labeling, avoiding market distortions that provoke compensatory behaviors and clinical misuse risking artery damage or clots.

**Key points:**

- India's stent price cap led to 71% decline in BMS procedures, 60% rise in DES, non-transparent billing hikes, and PCI over CABG shifts.
- Stents provide short-term relief but lack evidence for long-term CVD risk reduction without RCTs versus medications or lifestyle changes.
- Policymakers should prioritize preventive measures like early screening, PA incentives, stress reduction programs, and nutrition awareness over price controls.
- Bhagwati-Ramaswami theorem favors intervening at CVD sources (lifestyle risks) rather than consequences like stenting.

**By soumya gupta**

* * *

Many LMIC economies, including India are getting crippled due to the surge in non communicable diseases (NCDs). A report titled *India – Health of Nation’s States* (2019) estimated that 61% of mortality and 55% of the disability adjusted life years were caused by NCDs in 2016 in the country. Common NCDs are cancer, diabetes, cardio-vascular diseases (CVDs), stroke, chronic kidney disease and Chronic obstructive pulmonary disease (COPD). 

Percutaneous coronary intervention (PCI) with stenting and angioplasty is a common treatment in patients with obstructive coronary artery disease (CAD). In a move to bring relief to the pockets of cardiac patients by making stents more affordable, the Central government announced a reduction in the prices of coronary stents by 85% in February 2017. A price ceiling of Rs 7,260 (previously priced at Rs 45,000) for bare metal ones (BMS) and Rs 29,600 (previously priced at Rs 1.21 lakh) for the drug eluting variety (DES), inclusive of all the taxes. Foreign manufacturers complained that the price of production was higher than the new selling price. This demotivated private players, lowering their sales and increasing their keenness on withdrawing premium stents from India.  

Coronary stents are used to keep blocked arteries open and to regularize the flow of blood to and from the heart, thus believed to prevent recurrences of heart attacks or death among cardiac patients. Contrary to the above statement, recent [research studies](https://med.stanford.edu/news/all-news/2019/11/invasive-heart-treatments-not-always-needed.html) found that stents can only offer symptomatic relief and may improve function in the short run but do not offer a permanent solution  to reducing the risk of sudden death or future heart attacks in cardiac patients with stable heart disease. 

Without a series of randomized controlled trials (RCTs) and other health data on the efficacy of invasive procedures (like the stents) over medications and lifestyle modifications in CVD risk reduction, it is unclear why the Central government prioritized one intervention over another. The **information constraint** or absence of sound data from a reliable data source can hamper a good intentioned policy and can alter outcomes.      

With medical research indicating that stents are a short term fix for the chronic, lifestyle illness, it remains unclear why the government is so keen to offer cost relief. The answer lies in India’s higher prevalence (over a crore) and mortality rate due to CVDs and [widespread use of stents](https://www.expresshealthcare.in/cardiac-care/the-stent-saga/133121/) in healthcare settings. 

Price ceiling on stents intended to improve access and affordability. However, it had unintended consequences like most well-intentioned but not well-researched schemes. The price ceiling adversely impacted profit margins of hospitals and led to clinical distortions, forcing hospitals  to resort to non-transparent billing on discharge and diverting cardiac patients from coronary artery bypass graft (CABG) procedures to increased emergency usage of percutaneous coronary interventions (PCI). Study also observed pre- and post-price cap policy changes in the type of stent and the number of stents used during the PCI procedure, accounting for up to 60% increased drug eluting stents (DES) and emergency DES procedures while both elective and emergency usage of bare metal stents (BMS) declined sharply by 71% each. The rise in DES procedures could be attributed to the clinical superiority of a DES stent combined with a narrowing of the pricing gap between DES and BMS stents ([Deo and group, 2020](https://doi.org/10.1016/j.socscimed.2019.112737)). 

Further, following the price control of cardiac stents, the National Pharmaceutical Pricing Authority (NPPA) revealed that many institutions [increased the cost of non-stent components](https://indianexpress.com/article/business/business-others/after-cap-rise-in-complaints-that-hospitals-hiking-price-of-non-stent-components-4657522/) to compensate for their post-price cap losses. These included the prices of balloons and catheters, used during angioplasty.

Individuals and markets have a tendency to analyze policies and schemes to rethink or rework optimizations that work best for them. The price ceiling policy whose intention was to make cardiac invasive devices affordable to all, led to an unintentional distortion in the healthcare system’s choices to compensate for their losses. 

In rare cases, misusing stents (in cases of a ≤ 50% blockage with cholesterol plaque), according to a [comprehensive report](https://www.thelancet.com/journals/lancet/article/PIIS0140-6736\(11\)61317-2/fulltext), can result in artery damage, bleeding, stroke, heart attack, or life-threatening blood clots, which can have long-term negative consequences for patients and eventually result in a reduced quality of life for cardiac patients and their families.

As per [Bhagwati-Ramaswami theorem](https://www.ncaer.org/uploads/photo-gallery/files/1485529434C%20D%20Deshmukh%20memorial%202017.pdf), it is always superior to provide interventions to solve the problem at its source rather than providing solutions on consequence. In this scenario, the optimal solution to this lifestyle and public health issue would be for  government policies to focus on training primary healthcare staff to play a central role in early screening, spreading awareness and preventing modifiable CVD risk factors. 

Government, through the involvement of multiple players, can motivate people of all ages to engage in *[moderate physical activity](https://www.hsph.harvard.edu/obesity-prevention-source/moderate-and-vigorous-physical-activity/)* (PA) to improve cardiorespiratory fitness including 150-300 minutes per week of any aerobic activity like brisk walking, dancing, sports, jogging, swimming, etc. that raises heart rate and causes it to beat faster than normal. Public health agencies can also consider providing ‘monetary incentives or consumption vouchers’ on the basis of frequency and time spent in a sufficiently intense physical activity. [Recent public health research](https://doi.org/10.1186/s12889-021-10175-3) also confirmed that modest financial incentives along with buddies or peers encourage leisure time PA (gymming and walking behavior) and substantially improves the adherence to leisure time PA for longer durations.           

Workplace stress reduction strategies also play a key role in reducing mental stress, anxiety attacks, etc. in the working population. Incentives in the form of gym memberships, vouchers for counseling sessions, regular workshops on meditation, yoga, mindfulness training and other stress reduction techniques, flexible timings, etc. can prove effective in controlling modifiable risk factors and preventing CVDs. While these incentives have their merit, in the Indian context, where the majority is employed in the informal sector [(81% in 2018)](https://www.orfonline.org/expert-speak/future-of-unemployment-and-the-informal-sector-of-india-63190/), there remain undeniable limitations.  

Unhealthy dietary habits are central among the factors that promote blockage of arteries, inflammation and frequent heart attacks. Awareness is the key to curtailing the growing number of cardiac patients. To encourage nutrition-seeking behaviours among consumers, public health messaging can also use celebrities to create awareness. [Numerous reforms](https://academic.oup.com/heapro/article-abstract/36/1/155/5835399?redirectedFrom=fulltext) are already taking place in this direction. This includes [enhancing](https://www.obesityevidencehub.org.au/collections/prevention/nutrient-warning-labels) *[nutrition labels](https://www.obesityevidencehub.org.au/collections/prevention/nutrient-warning-labels)* to protect consumers from unhealthy dietary choices. 

It is imperative to note that singular motive driven interventions are unlikely to provide the targeted benefit to the public. Therefore, instead of market-distorting policies that tend to have unintended consequences within the healthcare ecosystem, policymakers should focus on strengthening India’s health care in the long term that can be achieved through preventive and sustainable measures. 

*Read more: [The pros and cons of big d](https://spontaneousorder.in/the-pros-and-cons-of-big-data-used-as-economic-signals/)*[ata used as ec](https://spontaneousorder.in/the-pros-and-cons-of-big-data-used-as-economic-signals/)*[onomic signals](https://spontaneousorder.in/the-pros-and-cons-of-big-data-used-as-economic-signals/)*

* * *

**About soumya gupta**

Dr. Soumya Gupta is an Assistant Professor at M S Ramaiah University of Applied Sciences in Bengaluru and holds a Ph.D. in Human Nutrition. She is also a Certified Diabetes Educator. She works in the sphere of public nutrition, non-communicable diseases, and food science as a researcher and academician. Her research interests include health policy, behavioral science for health, and public health nutrition.

## The pros and cons of big data used as economic signals

Original: https://www.spontaneousorder.in/p/the-pros-and-cons-of-big-data-used-as-economic-signals

Author: Spontaneous Order

Published: 2022-01-24T15:34:15.000Z

Topics: big-data, economic-indicators, covid-economy, mobility-data

> The new wave of covid infections led by the Omicron variant of the Sars-CoV-2 virus has once again restricted mobility in most parts of the country. People are spending more time at home, rather than at work places or retail stores or parks, going by th..

**Summary:**

Big data sources like Google mobility reports, night lights from satellites, and e-way bills have proven invaluable for tracking economic activity in real-time during the COVID-19 pandemic in India, offering quicker insights than slow government quarterly estimates based on surveys and administrative data. However, analysts must exercise caution when using them for growth forecasts. An OECD study of 51 countries in Q2/Q3 2020 and 43 in Q4 found the link between mobility and GDP growth weakening: a 10 percentage point mobility change correlated with 2.2 percentage-point GDP change early on, dropping to 0.9 by Q4, due to targeted policies and societal adaptations like remote work. Night lights data suffers from cloud-induced downward bias, as noted by xKDR researchers Ayush Patnaik et al., who developed a correction algorithm. E-way bills rise with goods demand shifts away from services during lockdowns but may fall with reversals, misleading overall activity reads. Aggregating such data into indexes is tricky due to varying frequencies and seasonality. From a classical-liberal view, these private and innovative signals are here to stay, accelerating economic analysis amid rapid change, but require solving analytical puzzles for reliable use.

**Key points:**

- Big data like Google mobility fills the timeliness gap left by slow official statistics during crises like COVID.
- OECD analysis shows mobility's GDP predictive power halved from 2.2 to 0.9 percentage points per 10pp mobility change by late 2020 due to adaptations.
- Night lights data needs cloud-bias corrections, as developed by xKDR Forum researchers.
- E-way bills overstate activity during goods-demand surges and understate during services recovery.
- Handle big data cautiously for economy-wide inferences, despite its welcome permanence.

**By Niranjan Rajadhyaksha**

* * *

The new wave of covid infections led by the Omicron variant of the Sars-CoV-2 virus has once again restricted mobility in most parts of the country. People are spending more time at home, rather than at work places or retail stores or parks, going by the anonymized data released for India by Google based on mobile phone locations.

Such new forms of data have been immensely useful to track economic activity on a regular basis during the pandemic. They give us a quick sense of what is happening in the economy, rather than having to wait for government statisticians to collate the usual quarterly estimates of activity across the economy with structured surveys as well as administrative data. These established procedures can sometimes come in too slowly to understand a rapidly evolving situation. The past two years have seen various types of big data step into the gap.

However, it is also important to be careful while using big data to make anything more than tentative guesses about economic growth. In this context, let us stick with mobility data for some time.

There have been several studies that show how Google mobility data moves in sync with underlying economic activity in normal times. But what about uncertain times such as these?

Economists at the Organisation For Economic Co-operation and Development (OECD) took a close look at the link between mobility trends and economic growth. They examined the data for 51 countries in the second and third quarters of 2020, and 43 countries in the fourth quarter of that year. The researchers found out that the impact of mobility indicators on economic growth weakened with each successive quarter. There are two possible reasons for this. First, policymakers have learnt to target specific types of economic activity, rather than impose blanket bans on movement. Second, both citizens as well as enterprises have learnt how to adapt to newer forms of work and leisure.

What is common to both factors is that we have adapted to the pandemic as a society. The relationship between mobility indicators and economic growth has not been the same across time. In more technical language, the regression coefficients have changed as economic agents have largely learnt to live with the virus. The OECD data indicates that a 10 percentage point change in mobility was associated with a 2.2 percentage-point change in economic growth in the second and third quarters of 2020, but only a 0.9 percentage-point change in economic growth in the fourth quarter of that year. That is a sharp drop.

It also means that an analyst trying to forecast the impact of changes in mobility data on quarterly economic activity based on the coefficients for the first and second quarters of 2020 will get very different results from another analyst working with the coefficient from the fourth quarter. This fact matters when trying to estimate the impact of the third wave on the Indian economy, especially when mobility data is an important element being considered.

There are challenges with some of the other types of big data as well.

Consider night lights, which are now being used by some economists as a proxy for economic activity. The input data on lights kept on past sundown comes from a number of satellites that can help pick up the intensity of lights generated by human beings in an area. Ayush Patnaik, Ajay Shah, Anshul Tayal and Susan Thomas of research firm xKDR have highlighted, in a recent working paper, that clouds interfere with the way data on night lights can be captured by satellites that hover kilometres above the land. The four researchers show that there is a downward bias in readings during cloudy months, and have built an algorithm to at least partially correct this downward bias.

Another problem with interpreting big data is the context in which it is read. The pandemic months, for example, have seen consumer demand shift from services to goods in many categories, either because of lockdowns or fear of stepping out. The e-way bills generated when goods move around the country are a very useful advance indication of economic activity. But such bills do not need to be generated for services. So a broad shift in demand from services to goods will likely lead to a sharper rise in e-way bills than can be explained by total economic activity. Similarly, a shift of demand back to services may show that e-way bills growth has come down. This does not necessarily mean that the economy has slowed down.

The easy availability of new forms of big data is definitely an opportunity for economic analysts. The examples cited above— on mobility data, night lights and e-way bills —have been used to show that such data still needs to be handled with care when it is used to make broader guesses about the economy as a whole. Some of these data points are also aggregated into easy to follow indexes of current economic activity. They have been immensely useful during the pandemic, but aggregating data with different reporting frequencies as well as potentially different seasonality patterns is a tricky problem.

The use of big data in economic analysis is welcome. There is no turning back. However, there are still a bunch of analytical puzzles that need to be sorted out.

*This article was originally publish in [The Mint](https://www.livemint.com/opinion/columns/the-key-driver-of-our-economic-path-out-of-the-covid-pandemic-11639500148781.html) on 12 January 2021.*

*Read more: [Sharpening the Tiger’s Teeth: Restoring Gram Sabha as the Gatekeeper of Forests](https://spontaneousorder.in/sharpening-the-tigers-teeth-restoring-gram-sabha-as-the-gatekeeper-of-forests/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Sharpening the Tiger’s Teeth: Restoring Gram Sabha as the Gatekeeper of Forests

Original: https://www.spontaneousorder.in/p/sharpening-the-tigers-teeth-restoring-gram-sabha-as-the-gatekeeper-of-forests

Author: Spontaneous Order

Published: 2022-01-20T11:24:39.000Z

Topics: forest-rights, gram-sabha, decentralization, adivasi-livelihoods

> On 2 October 2021, hundreds of Adivasi forest-dwellers marched against the coal mining project in Hasdeo Arand, Chhattisgarh. Their call to action? Revoking clearance to the Parsa Open Cast mine. This project, although worth more than Rs 1960 crore, wou..

**Summary:**

The article argues that empowering the Gram Sabha as the true gatekeeper of forests is essential to protect Adivasi livelihoods and biodiversity from resource extraction projects like the Rs 1960 crore Parsa Open Cast mine in Hasdeo Arand, Chhattisgarh, which threatens 995 families and a major biodiversity reserve. Drawing on the classical-liberal emphasis on decentralization akin to Gandhian village republics, it critiques the flawed implementation of the Forest Rights Act (FRA), 2006, and Panchayats (Extension to Scheduled Areas) Act (PESA), 1996, which position Gram Sabha as the nucleus of local decision-making but fail in practice. Key flaws include state forest departments' monopoly over minor forest produce despite FRA grants to Gram Sabha; improper constitution pooling multiple villages (e.g., 11.7 villages per Gram Sansad in West Bengal), violating the one-village-one-Gram-Sabha mandate and quorum requirements; and inadequate powers, with government officials chairing Sub-Divisional and District Level Committees, resulting in high claim rejections (Karnataka 89%, Chhattisgarh 55%). Citing court rulings like Gauhati High Court (2015) and poverty data (65 million poor Scheduled Tribes), it concludes that restoring Gram Sabha through single-village constitution, claim processing monitoring, and regular meetings will foster participatory democracy, economic growth, and rural development by curbing bureaucratic overreach.

**Key points:**

- State forest departments retain monopoly over minor forest produce despite FRA granting ownership to Gram Sabha.
- Gram Sabhas are improperly constituted at multi-village Gram Panchayat levels, averaging 11.7 villages in West Bengal, hindering representation and quorum achievement.
- Government officials chair SDLC and DLC, enabling de facto Forest Department authority and high FRA claim rejections like 89% in Karnataka.
- Constitute one Gram Sabha per village, monitor claim processing rates, and enforce regular meetings to empower local decision-making on forest rights.

**By Gauri Bansal**

* * *

On 2 October 2021, hundreds of Adivasi forest-dwellers marched against the coal mining project in Hasdeo Arand, Chhattisgarh. Their call to action? Revoking clearance to the Parsa Open Cast mine. This project, although worth more than [Rs 1960 crore](https://www.theleaflet.in/pushed-to-the-brink-adivasis-march-against-coal-mine-expansion-in-hasdeo-arand-chhattisgarh/), would affect the livelihoods of 995 families and inflict major losses on one of India’s biggest biodiversity reserves. Such a tussle between indigenous livelihoods, resource extraction, and conservation is not new for 275 million forest-reliant people in India. The deer caught in the headlights is the authority responsible for granting the clearance – the Gram Sabha. This article proposes that despite the existing framework of rights, Gram Sabha needs power in both letter and spirit to be an effective institution representing forest dwellers.

Gram Sabha represents the Gandhian ideal of self-sufficient village republics and decentralisation of power to the local level. Laws pertaining to forest rights in India, such as the Forest Rights Act (FRA), 2006 and the Panchayats (Extension to Scheduled Areas) Act, PESA, 1996 have attempted to make the Gram Sabha the nucleus of decision making in rural areas. These laws, though well-intentioned, have not been implemented to their full extent. 

Three main flaws ail the proper functioning of the Gram Sabha: State forest departments hold a monopoly over minor forest produce despite the FRA granting ownership rights to the Gram Sabha. The Gram Sabha is further rendered ineffective due to its improper constitution. It is also not representative of local interests. In practice, multiple villages, instead of a single village, are pooled under one Gram Sabha. Further, the Gram Sabha has inadequate decision-making power and is unable to process claims for individual and community forest rights.The Gram Sabha as per the **Forest Rights Act, 2006** is meant to

***(a) initiate the process of determining the nature and extent of forest rights, receive and hear the***

***claims relating thereto;  
….(c) pass a resolution on claims on forest rights after giving reasonable opportunity to interested persons and authorities concerned and forward the same to the Sub-Divisional Level Committee” (Section 4.1).*** 

In addition, the **Panchayats (Extension to Scheduled Areas) Act, PESA, 1996** mandates consultation with Gram Sabha before any land acquisition, with Section 4(f) outlining the following: 

*“Every Panchayat at the village level shall be required to obtain from the Gram Sabha a certification of utilisation of funds by that Panchayat for the plans, programmes and projects.”* 

But in many instances, the state forest department has been issuing the notices for such acquisition. In Hasdeo, the Hasdeo Aranya Bachao Sangharsh Samiti filed FIRs alleging that the meeting approvals and clearance documents have been forged and were not consented to by the respective Gram Sabha [(Menon, 2021)](https://www.theleaflet.in/pushed-to-the-brink-adivasis-march-against-coal-mine-expansion-in-hasdeo-arand-chhattisgarh/). Inserted to prevent the alienation of lands for mineral exploitation, the lack of stringent implementation of these laws has put the ecological and economic interests of the local communities at risk.  
  
In 2015, the Gauhati High Court reiterated the pivotal role of the Gram Sabha in **[Kabin Ronghang and Others v. Union of India and Others](https://indiankanoon.org/doc/196401000/)**[.](https://indiankanoon.org/doc/196401000/) The Court adjudicated that the Gram Sabha is only the appropriate authority to initiate the process for determining the nature and extent of individual and community forest rights. In reality, the Gram Sabha is unable to fulfill this function due to its improper constitution. The Forest Rights Act mandates the institutionalisation of Gram Sabha at the level of an individual village, implying the presence of one Gram Sabha per village [(Baginski and Sarin, 2010.)  
  
](https://assets.publishing.service.gov.uk/media/57a08b0be5274a27b2000909/dp45.pdf)However, in most states, Gram Sabhas are recognised at the Gram Panchayat level which consists of many villages. For instance, in West Bengal, due to a large number of small villages, ‘Gram Sansads’ have emerged in place of Gram Sabhas. The average number of villages per Gram Sansad is 11.7, contrary to the one village-one Gram Sabha vision. Convening a single Gram Sabha for multiple revenue villages is a serious challenge for the villagers involved as it involves converging thousands of people from across many separate settlements [(Baginski, Sarin, 2010).](https://assets.publishing.service.gov.uk/media/57a08b0be5274a27b2000909/dp45.pdf) This practice might be undertaken to meet the necessary quorum for meetings. The quorum for Gram Sabha meetings is the presence of 50% of all villagers. In addition, women must constitute 1/3rd of all attendees [(JFM Handbook, Ministry of Environment, Forests and Climate Change)](http://ifs.nic.in/Dynamic/pdf/JFM%20handbook.pdf). This informal practice makes meetings inaccessible for peripheral regions and as a result, local concerns are not well represented (Madhya Pradesh Committee Report, 2010). 

Another issue pertains to the nature of power sharing between the Gram Sabha and its associated bodies. The Forest Rights Committee (FRC) is the constituent body of the Gram Sabha. It submits the received claims to the Sub-Divisional and District Level Committees. The Forest Rights Act requires that both the SDLC and DLC should have six members—three government officials from the tehsil and block level and three people’s representatives elected by the Gram Sabha. 

Although the seats are distributed equally between the government officials and people’s representatives in the DLC and SDLC, government officials are granted the position of chair in both Committees, giving them the [final decision-making power.](https://tribal.nic.in/FRA/data/FRARulesBook.pdf.) Since the Act does not specify the weightage that governmental and non-governmental members of the Committees will hold, this results in a *[de facto](https://cdnbbsr.s3waas.gov.in/s3c8758b517083196f05ac29810b924aca/uploads/2019/11/2019112687-1.pdf)* [authority of the Forest Department.](https://cdnbbsr.s3waas.gov.in/s3c8758b517083196f05ac29810b924aca/uploads/2019/11/2019112687-1.pdf) Vertical decentralization needs to be accompanied by a process of horizontal decentralization which increases the number of decision makers, enhancing guidance and accountability at all levels [(Ranis, 2019)](https://www.cambridge.org/core/books/from-divided-pasts-to-cohesive-futures/vertical-and-horizontal-decentralisation-for-equity-and-stability/C7A8A2474A6105E8BD97B0FCF27367A8). In many instances, this has resulted in large scale rejection of claims for individual and community forest rights filed under FRA. States like Gujarat, Jharkhand and Tamil Nadu had processed (accepted or rejected) less than 40% of the claims received. Besides, the percentage of rejection was high in Karnataka (89%) and Chattisgarh (55%). A major issue in most states was the wrongful rejection of these claims. While most did not specify the reason for rejection, others cited the absence of GPS measurements, both of which are invalid reasons under FRA (Madhya Pradesh Committee Report, 2010).  

  
UNDP Global Multidimensional Poverty Index 2021 points out that five out of six poor people are from lower tribes or castes in India. The Scheduled Tribes (STs), occupying a dominant place in the Hasdeo Arand demographic, are the poorest in the nation, comprising 65 million of the 129 million people living in abject poverty. The Hasdeo Arand demonstration is a strong clarion call to invest efforts in making Gram Sabha the fulcrum of deliberative and participatory democracy by protecting the livelihood of tribals and forest-dwellers. On-ground issues in the implementation of these forest laws have made the Gram Sabha an inadequate guarantor of forest rights. Although the Gram Sabha has been pitted as a panacea to a dominant bureaucracy, its functioning has been impaired due to inadequate power transfers. It is important to enhance the operational and coercive capacity of Gram Sabhas for it to enable better economic growth and rural development. By ensuring its constitution at each individual village level, monitoring its rate of processing claims and enforcing regular meetings, the Gram Sabha can go beyond being a rubber stamp. 

*Read more: [Keeping up with Technological Advancements](https://spontaneousorder.in/keeping-up-with-technological-advancements/)*

* * *

**About Gauri Bansal**

Gauri is a final year student of Political Science at Lady Shri Ram College for Women. Her research interests include political psychology and the governance of global commons, especially in the context of environmental resources and cyberspace.

## Keeping up with Technological Advancements

Original: https://www.spontaneousorder.in/p/keeping-up-with-technological-advancements

Author: Spontaneous Order

Published: 2022-01-17T16:05:40.000Z

Topics: tech-regulation, data-privacy, antitrust, cryptocurrency, parliamentary-scrutiny

> AI, cryptocurrency, social media apps, gene editing, multinational e-commerce, fintech companies and more – today, technological advancements outpace the political system’s ability to bring in laws that deal with the ethical challenges they may pose.

**Summary:**

Technological advancements like AI, cryptocurrency, social media, gene editing, and fintech outpace India's political and legal systems, creating ethical and regulatory gaps in areas such as data privacy, fraud, and anti-competitive practices. In fintech, RBI's data localisation norms and consent requirements emerged as catch-up measures to multi-tenant cloud services and payment platforms. Tech giants like Google, accused of anti-competitive practices in mobile OS markets, and Facebook, exposed in the Cambridge Analytica scandal, have often evaded accountability due to inadequate laws like the outdated IT Act 2000, with India's personal data protection bill still under discussion. Amazon exemplifies how current antitrust frameworks, focused on short-term consumer welfare via prices, fail to address predatory pricing and market power in e-commerce. Bans, such as on cryptocurrencies amid speculation, money laundering, and energy concerns, risk stifling blockchain innovations in food security and land records, driving activities underground rather than fostering transparent, decentralized systems. From a classical-liberal viewpoint, governments should prioritize least intrusive interventions through ongoing consultative processes involving experts and stakeholders, robust parliamentary committees, periodic law reviews, and scrutiny of executive overreach to balance rights protection with innovation space.

**Key points:**

- Technological innovations outpace laws, necessitating consultative stakeholder involvement to craft balanced regulations.
- Current antitrust doctrines inadequately address tech giants' predatory pricing and dominance beyond short-term prices.
- Cryptocurrency bans would harm blockchain applications in non-financial sectors like land records and food security.
- Parliaments must strengthen independent scrutiny via committees to prevent half-baked laws and executive dominance.
- Governments should opt for least intrusive policies, with mechanisms for periodic law updates to sustain innovation.

**By Arindam Goswami**

* * *

*AI, cryptocurrency, social media apps, gene editing, multinational e-commerce, fintech companies and more – today, technological advancements outpace the political system’s ability to bring in laws that deal with the ethical challenges they may pose.* 

It would be fair to assume that a majority of laws in most nations, and surely in India, have been outpaced by the emerging challenges of a technologically dynamic, ever-evolving world. This leads us to a bigger question – Is India’s political system well-equipped and willing to understand these changes and introduce pertinent laws?

Let’s look at India’s fintech industry. The growth of multiple payment platforms and the use of multi-tenant cloud services to host them have given rise to [concerns of data privacy, data localisation and fraud](https://www.orfonline.org/research/privacy-security-risks-digital-payments/), among other things. The use of such platforms can not only have legal ramifications, but also ethical ones. For instance, something as seemingly minor as whether or not these platforms take the consent of users before storing their card details can pose serious challenges. The strict legal requirements regarding data localisation ([RBI’s data localisation norms](https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=11244)), explicit consent, and fraud prevention that we see now were a result of the political and legal system playing catch-up with technological enhancements.

**Tech Giants & Anti-competitive Practices** 

Big names like Google and Facebook have long been accused of using their dominant position in the market to indulge in [anti-competitive practices](https://www.financialexpress.com/industry/technology/cci-probe-finds-google-guilty-of-anti-competitive-practices-in-mobile-os-market-report-says/2332684/), increasing their ad revenues and creating entry barriers for smaller firms. The [Facebook-Cambridge Analytica scandal](https://www.nytimes.com/2018/04/04/us/politics/cambridge-analytica-scandal-fallout.html) clearly showed that these tech giants don’t give enough thought to aspects of user privacy on their platforms. In the absence of clear laws that deal with their actions in India, as well as around the world, they have gone relatively [scot-free](https://www.theleaflet.in/companies-go-scot-free-despite-breach-of-customer-data/) in the past. In the absence of specific provisions against data breach, companies in India have even [escaped](https://www.theleaflet.in/companies-go-scot-free-despite-breach-of-customer-data/) fines. The comprehensive General Data Protection Regulation (GDPR) – EU law on data protection – was adopted as late as in 2016. While the GDPR also applies to Indian companies in some ways, India still doesn’t have a comprehensive data privacy law of its own. In India, it is only now that the Parliament is discussing a personal data protection law to monitor and regulate data protection and privacy concerns, which are currently inadequately serviced by the Information Technology Act, 2000. But the process remains slow and larger players often find loopholes to bypass laws, [rendering them ineffective](https://www.livemint.com/companies/news/amazon-used-secret-ways-to-flout-rules-11613580960255.html).

Take Amazon as an example. As discussed in this note in The Yale Law [Journal](https://www.yalelawjournal.org/note/amazons-antitrust-paradox):

*“Amazon is the titan of twenty-first century commerce. … Although Amazon has clocked staggering growth, it generates meager profits, choosing to price below-cost and expand widely instead. Through this strategy, the company has positioned itself at the center of e-commerce and now serves as essential infrastructure for a host of other businesses that depend upon it. Elements of the firm’s structure and conduct pose anticompetitive concerns—yet it has escaped antitrust scrutiny.*

*This Note argues that the current framework in antitrust — specifically its pegging competition to “consumer welfare,” defined as short-term price effects — is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output. Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive.”*

Tech behemoths have built their products and empires on innovations that have changed the world radically in the recent past. We need a consultative system that collaborates with various stakeholders and experts to understand the issues and devise regulations to deal with them. This has to be an ongoing process, but that can happen only with a committed political system which needs to be sufficiently aware of the issues and their details to be able to take a balanced and rational view on all of this.

In India, Parliament committees and the consultative processes, to be followed before introducing laws and policies, are ways of ensuring that the political class takes into account knowledge, opinion, and challenges tabled by experts and stakeholders. However, with the increasing tendencies to [bypass all these procedures](https://www.drishtiias.com/daily-updates/daily-news-editorials/parliamentary-scrutiny) in Parliament, half-baked laws that do more harm than good may emerge.

**Are Bans the Solution to Emerging Concerns?** 

Let’s answer this with the cryptocurrency example. Given its current speculative nature, investing in cryptocurrencies can be a risky proposition for small investors. In the absence of taxation laws specifically covering cryptocurrencies, money laundering is another serious concern. The huge energy requirements of crypto mining also raise environmental concerns. Then, are bans the solution to these concerns?    

The starting premise for cryptocurrencies in particular, and blockchain technology in general, was that of making the financial system more decentralised and free from governmental stranglehold. The idea was to make the process more transparent, tamper-free, secure, and within the control of people. Apart from its use in financial systems, blockchain technologies can be used in various other fields, right from [food security](https://onlinelibrary.wiley.com/doi/abs/10.1002/jsfa.9912) to [creating immutable land records](https://www.sciencedirect.com/science/article/pii/S1877050920311649). Therefore, a ban on  cryptocurrencies could also lead to a ban on blockchain innovations – essentially, throwing the baby out with the bathwater. 

Bans in general should very rarely be an instrument of public policy. They only drive the banned activity underground, making it even more difficult to regulate and ensure that there is a level playing field. Governments should seriously weigh the pros and cons of intervention, and even then go with the least intrusive action. How do we analyse all these complex issues and then devise laws that can effectively safeguard rights, alleviate ethical concerns and protect people, while at the same time give enough space for innovation and technology to flourish? The first step would be for the state to earnestly involve experts and civil society participants. There would also emerge a need for a mechanism that periodically re-looks at laws and their relevance, and updates the same if so deemed necessary. 

The Parliament and State Legislative Assemblies need to be more proactive and serious w.r.t their independent legislative function. They must also be subject to scrutiny in case of neglect of their crucial deliberative roles and for operating merely as an extended arm of the executive, which rubber stamps the legislative agenda of the government of the day. Parliamentary committees and working groups have a tremendous role to play in vigorously discussing concerns and evolving consultative mechanisms to thrash out issues in detail.

*Read more: [Is Delhi a City for Cars or for People?](https://spontaneousorder.in/is-delhi-a-city-for-cars-or-for-people/)*

* * *

**About Arindam Goswami**

Arindam is a B.Tech., MBA, is a software professional with considerable experience in the fintech industry. He has a profound interest in public policy, political economy, economics, law and public administration.

## Is Delhi a City for Cars or for People?

Original: https://www.spontaneousorder.in/p/is-delhi-a-city-for-cars-or-for-people

Author: Spontaneous Order

Published: 2022-01-11T14:51:25.000Z

Topics: air-pollution, urban-planning, walkability, zoning-reform

> It is no longer the season of stubble burning, the time of the year when air pollution around Delhi-NCR reaches alarming levels. This is also a time of great debate and deliberation. From politicians to government officials, environmental activists and...

**Summary:**

Delhi faces year-round air pollution, with AQI in 'very poor' category even in January (PM2.5 >300), ranking as the world's most polluted capital from 2018-2020. Vehicular emissions dominate, causing 80% of carbon monoxide and nitrogen oxides, and 28% of PM2.5, amid a surge in vehicles from 317 to 643 per thousand people (2005-06 to 2019-20). This erodes public space, widens streets, builds flyovers, and displaces the urban poor. Government panic measures like odd-even schemes or Supreme Court-suggested lockdowns treat symptoms, ignoring the root: an unwalkable urban landscape forcing car use for short trips. Drawing on Jane Jacobs' 'The Death and Life of Great American Cities,' the author advocates spontaneous urban attrition of cars through dense, mixed-use areas dominated by pedestrians and commerce, not mandates. Delhi should prioritize: improving sidewalks (absent on 40% of roads, often inadequate), adopting smaller blocks for easier crossings, and liberalizing zoning to enable mixed residential-commercial uses, reducing commutes. These classical-liberal reforms incentivize walking over coercive limits, fostering vibrant street life and curbing pollution long-term.

**Key points:**

- Vehicular emissions account for 80% of CO/NOx and 28% of PM2.5 in Delhi, exacerbated by 643 vehicles per thousand people.
- Nearly 40% of Delhi's roads lack footpaths, making the city unwalkable and compelling car use for short distances.
- Adopt Jane Jacobs' principles: enhance sidewalks, create smaller urban blocks, and ease zoning for mixed-use to organically reduce car dependency.
- Prioritize urban design that incentivizes pedestrian activity over mandates like odd-even or lockdowns to limit pollution.

**By Anirudh Goel**

* * *

It is no longer the season of stubble burning, the time of the year when air pollution around Delhi-NCR reaches alarming levels. This is also a time of great debate and deliberation. From  politicians to government officials, environmental activists and judges to concerned citizens, all rise to the occasion and recommend their solutions to the problem. 

It is true insofar as the months of October and November are concerned, that stubble burning is a significant cause of the problem, its contribution to Delhi’s PM2.5 pollution is estimated to be at about 40% ([Mint](https://www.livemint.com/news/india/delhi-stubble-burning-contributed-to-36-of-pollution-today-relief-expected-by-tomorrow-11636187863520.html)). However, one cannot ignore the fact that air pollution is a menace for the region throughout the year. As I write this article in the first week of January, Delhi’s AQI remains in the ‘very poor’ category with PM2.5 above 300 ([Business Standard](https://www.business-standard.com/article/current-affairs/delhi-remains-polluted-as-aqi-further-slips-in-very-poor-categpry-122010100140_1.html)). IQAir, a Swiss group measuring air quality levels across the globe based on the concentration of PM2.5, has reported Delhi to be the most polluted capital city of the world for three consecutive years from 2018 to 2020 ([Reuters](https://www.reuters.com/article/us-india-pollution-idUSKBN2B817F)).

Vehicular emissions are the single biggest source of air pollution in Delhi. They account for 80% of the total carbon monoxide and nitrogen oxides, and 28% of the total PM2.5 emissions in the state ([Arpan Chatterji](https://www.orfonline.org/research/air-pollution-delhi-filling-policy-gaps/#_edn28)). It is well known that Delhi has an extraordinarily high number of automobiles. In the last fifteen years, the number of motor vehicles in Delhi has increased from 317 per thousand in 2005-06 to 643 per thousand in 2019-20, far exceeding all other major cities of India ([Hindustan Times](https://auto.hindustantimes.com/auto/news/rapid-rise-in-vehicle-count-in-delhi-643-units-per-thousand-people-41615269262610.html)).

High incidence of automobiles adversely impacts cities in several ways other than air pollution. Foremost of them all is the sacrifice of public space. To accommodate higher traffic, streets are widened, a large proportion of the land is reserved for parking vehicles, and huge flyovers shrouding the city from one corner to another are built. Often, the urban poor bear the cost of these projects as slums are forcefully cleared and street vendors are evicted from their place of livelihood. Thus, it is desirable to reduce the absolute number of automobiles in use in cities.

But the government, caught unaware and unprepared during the peak months of air pollution in the state, comes up with band-aid solutions to reduce automobiles on the streets. Most well known of them all is the “Odd-Even Scheme” under which private vehicles ending with an odd number are allowed on one day and vice versa on another ([Business Standard](https://www.business-standard.com/about/what-is-odd-even-scheme)). In a more recent instance, the Supreme Court went many steps further and suggested a 2-day lockdown for reducing air pollution in the state ([Deccan Herald](https://www.deccanherald.com/national/north-and-central/supreme-court-suggests-2-day-lockdown-to-bring-down-severe-air-pollution-level-in-delhi-1050273.html)). 

Such desperate measures taken under panic and pressure, address the symptoms of the problem instead of diagnosing its root cause and treating the same appropriately. In Delhi’s case, high usage of automobiles can largely be attributed to its unwalkable urban landscape that compels people to take automobiles even for covering short distances ([Hindustan Times](https://www.hindustantimes.com/delhi-news/wanted-in-delhi-safe-walkable-pavements/story-kyvFVriwE3R6NaOs89FSTP.html)). In 1964, the eminent urban theorist Jane Jacobs, in her book ‘The Death and Life of Great American Cities’, proposed certain principles that can reduce people’s dependence on automobiles and nudge them to prefer walking instead ([Jane Jacobs](https://humantransit.org/2012/04/jane-jacobs-on-transportation-my-take.html)).

Jacobs’ observed a spontaneous urban phenomena, not deliberately planned or imposed, that contributes to the attrition of vehicles. She illustrated the same using instances from certain localities in New York, where intense commercial use coupled with dense crowding of vendors and customer-pedestrians, induced private passenger cars to avoid taking those streets. Dominated by pedestrians, the concentrated and mixed use of urban land, besides reducing vehicular traffic, promoted diverse uses, and increased street commerce.

It is important to note that Jacobs’ idea of attrition is very different from a legal demarcation of “vehicle-free zones”. Instead of imposing a mandate, it reduces the incidence of automobile usage by making it more convenient for the people to walk. It does not import an exogenous solution but uses the features of a vital urban landscape itself to achieve its objective. Jacobs’ herself stressed that her point was “not attrition of automobiles *in* cities, but rather the attrition of automobiles *by* cities”.

There is much for Delhi’s urban planners and municipal authorities to learn from Jacobs’ observations. First, that the city should invest seriously in improving its sidewalks. Reports suggest that nearly 40% of Delhi’s roads have no footpaths ([Newslaundry](https://www.newslaundry.com/2019/08/07/delhi-pedestrians-nightmare)). Even the ones that do have it, are either too high or too narrow, forcing people to either walk on the main road or avoid walking altogether ([Hindustan Times](https://www.hindustantimes.com/delhi-news/wanted-in-delhi-safe-walkable-pavements/story-kyvFVriwE3R6NaOs89FSTP.html)). 

Second, smaller blocks should be preferred over large ones so that there are frequent crossings and corners for people to turn ([Jane Jacobs](https://joe-urban.com/the-need-for-small-blocks-38th-street-station/)). Presently, large blocks in many parts of the city make it greatly difficult for pedestrians to cross the road. In Central Delhi in particular, the blocks are so large that pedestrians are either compelled to cover long stretches in order to arrive at a zebra crossing and move to the other side, or risk their life by crossing through the middle of the road itself.

Third, zoning regulations in the city should be eased to enable diverse uses within each locality ([Shanu Athiparambath](https://marketurbanism.com/2019/04/26/human-cost-zoning-indian-cities/)). Separation of residential, commercial, and agricultural zones, as is the current practice in most parts of the city, compels people to commute long distances to and from their daily errand, making it inevitable for them to use automobiles ([Teal India](https://tealindia.in/insights/mixed-use-in-residential-colonies-in-delhi/)). To reverse this, the city needs to liberalise its zoning regulations, augment the scope for mixed uses and promote dense concentration of people.

I recognise that the three proposals, evinced above, do not offer an immediate solution to the problem. However, they can serve as a long-term guide for policy makers to think beyond lockdowns or odd-even, for reducing the number of automobiles and limiting air pollution in the state. Instead of mandating limits on vehicular use, the aim should be to transform urban design in a manner that incentivises, at least a section of the inhabitants, to give up motor vehicles and prefer walking instead.

Read more: *[There is only one way for India to manage the post pandemic debt burden](https://spontaneousorder.in/there-is-only-one-way-for-india-to-manage-the-post-pandemic-debt-burden/)*

* * *

**About Anirudh Goel**

Anirudh Goel is a final year student of BA LLB at the West Bengal National University of Juridical Sciences. He has a profound interest in economics, governance, and urban theory.

## There is only one way for India to manage the post pandemic debt burden

Original: https://www.spontaneousorder.in/p/there-is-only-one-way-for-india-to-manage-the-post-pandemic-debt-burden

Author: Spontaneous Order

Published: 2021-12-17T11:01:42.000Z

Topics: public-debt, fiscal-policy, economic-growth, macroeconomic-policy

> The Indian economic recovery has gathered strength in recent months. Annual output will likely cross pre-pandemic levels by the end of this fiscal year. However, there are some long shadows over the economic outlook—consumer confidence is still low, cor

**Summary:**

India's post-pandemic economic recovery is strengthening, with output likely exceeding pre-pandemic levels by fiscal year-end, but high public debt—now at 89.8% of GDP, up 15 percentage points in a year—poses a persistent burden, exceeding emerging-market averages by 26 points (64.3%) and Asian peers by 20 points, exacerbated by pre-crisis fiscal weaknesses. Debt reduction requires nominal GDP growth (g) exceeding interest rates (r) on government borrowings, minimizing the need for aggressive primary deficit cuts; historically, India cut debt-to-GDP by 18 points from 2002-03 to 2010-11 via growth acceleration despite few primary surpluses. Current dynamics show elevated interest costs persisting into mid-decade, but sustainability holds if growth remains robust—the IMF pegs India's debt-stabilizing primary deficit at 2.9% of GDP, aligning with medium-term averages. As RBI shifts to inflation control, raising rates, fiscal policy must avoid dominance over monetary policy or premature austerity. The classical-liberal path forward: make economic growth the central theme of the next Union budget to lighten debt organically over a decade.

**Key points:**

- India's public debt-to-GDP ratio reached 89.8%, 26 points above emerging-market average, requiring reduction over a decade via growth outpacing interest rates.
- Nominal GDP growth exceeding interest rates reduced debt-to-GDP by 18 points from 2002-03 to 2010-11 without consistent primary surpluses.
- IMF estimates India's debt-stabilizing primary deficit at 2.9% of GDP, sustainable with strong growth.
- Next Union budget should prioritize economic growth to manage debt without premature austerity or fiscal dominance over RBI.

**By Niranjan Rajadhyaksha**

* * *

The Indian economic recovery has gathered strength in recent months. Annual output will likely cross pre-pandemic levels by the end of this fiscal year. However, there are some long shadows over the economic outlook—consumer confidence is still low, corporate investment has not yet recovered, smaller enterprises have been hit hard, inflation is likely to rise in the first half of the next calendar year, global interest rates could rise, and the threat from the new variant of the covid virus needs to be watched carefully. Some of these economic concerns should ease over the coming quarters if the growth momentum is maintained.

One of the more persistent economic burdens that the pandemic leaves behind is the high level of public debt. It is a burden that has to be reduced over a decade rather than a few quarters. The collapse in economic activity during the worst months of the pandemic forced the government to borrow more to run its essential services, provide some support to the poor, and build infrastructure in the absence of robust private-sector investment. Public debt as a proportion of India’s gross domestic product (GDP) shot up by 15 percentage points in a year, to levels never seen before. It is expected to decline only gradually, from the current 89.8% to 85.7% at the end of 2025-26, according to estimates of the 15th Finance Commission. That will still be 25 percentage points higher than what the committee to review the Fiscal Responsibility and Budget Management Act had recommended in 2017.

Most countries have seen their public debt shoot up because of a decline in revenues as well as an increase in spending after the pandemic struck, so India is not an exception. Yet, it is important to remember that the combined debt of the Union government and states is a massive 26 percentage points higher than the average of emerging-market and middle-income countries, which was 64.3%. It is also 20 percentage points higher than its Asian peers. Much of this gap is not just because of what happened in the first two years of the pandemic, but also because India entered the crisis with weaker public finances than most comparable economies.

How do countries bring down their public debt as a proportion of their economy? Economists look at three main drivers of change—nominal economic growth, the interest rate that the government pays on its debt, and the primary balance in the government budget. A useful thumb rule is that the burden of public debt will automatically get lighter when the rate of nominal economic growth is much higher than the rate of interest that the government pays on its debt; the need for a sharp reduction in its primary deficit is relatively small. On the other hand, the government will have to aggressively bring down its primary deficit, or even aim for a primary surplus, in case nominal economic growth is weak and/or there is a jump in interest rates. Another way to say the same thing is that the need to go for fiscal austerity is lower when the economy is growing rapidly and the government is paying low rates of interest on its public debt.

The charts here show the India story since the turn of the century in terms of the rate of interest on government borrowings (r), the rate of nominal economic growth (g) , and the difference between the two (r-g).

India managed to bring down its ratio of public debt to GDP by 18 percentage points between 2002-03 to 2010-2011 because of its splendid growth acceleration; the Union government reported a primary surplus in only two of those nine years. The gap between interest rates and nominal GDP growth narrowed after that, as nominal economic growth came down sharply because of a combination of slower real growth as well as lower inflation. The public debt dynamics in the first decade of the century were very different from those in the second decade.

What about the third decade? Most estimates suggest that the burden of public debt—and hence the interest costs of the government—will continue to be high by historical standards till at least the middle of this decade. However, there is no reason to be worried about the sustainability of Indian public debt as long as economic growth is on track. The International Monetary Fund says that the debt-stabilizing primary deficit for India is 2.9% of GDP, which is lower than the current elevated level because of the pandemic but in line with the average level over the medium term.

This has important implications for Indian macroeconomic policy. As the monetary policy of the Reserve Bank of India pivots back towards inflation control, and thus gives less importance to supporting the fiscal operations of the government, interest rates will begin to inch up. The primary deficit will only gradually come down to sustainable levels in the next three years. A lot will then depend on the Indian growth trajectory in terms of bringing down the ratio of public debt to GDP, without imposing premature austerity or hindering inflation control via fiscal dominance over monetary policy.

Every Union budget has a central theme. There is now good reason for finance minister Nirmala Sitharaman to make economic growth the focal point of the new budget she is scheduled to announce early next year.

*This article was originally publish in [The Mint](https://www.livemint.com/opinion/columns/the-key-driver-of-our-economic-path-out-of-the-covid-pandemic-11639500148781.html) on 15 December 2021.*

*Read more: [Are Research Parks a Promising Way Forward for India’s STI Ecosystem?](https://spontaneousorder.in/are-research-parks-a-promising-way-forward-for-indias-sti-ecosystem/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Are Research Parks a Promising Way Forward for India’s STI Ecosystem?

Original: https://www.spontaneousorder.in/p/are-research-parks-a-promising-way-forward-for-indias-sti-ecosystem

Author: Spontaneous Order

Published: 2021-12-15T13:47:52.000Z

Topics: research-parks, sti-policy, r-d-funding, startup-ecosystem

> The modern-day research park is envisaged as a space where various stakeholders in the science and technology ecosystem come together to innovate. Diverse functions of Science, Technology, and Innovation (STI), such as academic advancement, economic uti..

**Summary:**

Research parks aim to integrate academic, economic, and social STI functions but face scrutiny for under-delivering on commercial promises, as seen in India's IIT Madras Research Park (IITMRP), established in 2010 with government loans and Rs 137 crore grants, housing 70+ R&D companies including BHEL and TCS, and incubating 200+ startups—yet lacking public data on efficacy. Plans for similar parks at eight IITs and IISc, budgeted Rs 75-100 crore each, demand measurable returns amid India's low GERD at 0.7% of GDP (vs. 2% global average) and heavy government funding (56%). Globally, US Research Triangle Park (RTP, 1959) spans 7,000 acres with 250+ companies, 50,000 jobs, and $5.9B VC over a decade, but is an exception amid doubts on parks' economic impact. Challenges include inconsistent research priorities across policies, and digitalization eroding physical proximity benefits. From a classical-liberal view, India should adopt market-driven approaches over top-down mandates, ensure transparent public investments with clear goals, and reorient parks toward startup incubation (aligning with Aatma Nirbhar Bharat and Startup India) and social impact like renewables, subjecting all to taxpayer scrutiny for viability.

**Key points:**

- IITMRP lacks public data to assess returns on heavy government funding, highlighting need for transparency in STI investments.
- Global evidence shows research parks like RTP as rare successes, urging India to set realistic, measurable outcomes beyond vague economic growth.
- India's low 0.7% GERD and priority inconsistencies demand market-led direction in parks rather than top-down planning.
- Digitalization reduces physical parks' unique value, requiring adaptation to virtual collaboration.
- Re-focus parks on startups and social impact (e.g., renewables) to justify public funds under taxpayer scrutiny.

**By Pratyaksha Jha**

* * *

The modern-day research park is envisaged as a space where various stakeholders in the science and technology ecosystem come together to innovate. Diverse functions of Science, Technology, and Innovation (STI), such as academic advancement, economic utility, and social impact, are brought together in the same space. These come with incentive models and infrastructure in place to build industrial research and development units, experimentation and research laboratories, and incubators for commercially viable and socially responsive tech products.

Historically, much has been said about the promise that scientific research parks hold when it comes to creating commercially viable products that are cutting edge. However, there have been growing concerns in recent years that they under-deliver on this promise. India’s foray into the university-based research park space over the last decade makes these considerations central to STI research and policy in the country right now. I posit that it is in India’s interests to draw on the lessons offered by the trajectory that the research park model has taken in other countries, and identify measurable, realistic outcomes towards which it can be deployed.

##### **The IIT Madras Research Park Model**

Established in 2010, the [IIT Madras Research Park (IITMRP)](https://respark.iitm.ac.in/) currently houses more than 70 Research and Development companies, and has incubated more than 200 startups. Some well-known [companies](https://respark.iitm.ac.in/corporate-clients/) that operate R&D units out of the park include BHEL (Bharat Heavy Electricals Ltd.), Tata Consultancy Services, Saint Gobain, and Titan Industries. The park received a large chunk of its [initial capital investment](https://www.inae.in/storage/2018/12/The-IIT-Madras-Research-Park-by-Prof-MS-Ananth-.pdf) from the MHRD in the form of a loan. Later, Rs 137 crore were invested in it by the government in the form of grants-in-aid. It is important to note that a lack of publicly available data that can measure its efficacy and functioning makes it difficult to assess whether or not these investments have yielded desirable economic and STI-oriented outcomes so far.

Plans to recreate the IITMRP model in [eight other institutions](https://pib.gov.in/Pressreleaseshare.aspx?PRID=1523301) — IIT Kharagpur, IIT Bombay, IIT Gandhinagar, IIT Delhi, IIT Guwahati, IIT Kanpur, IIT Hyderabad, and IISc Bangalore — have been underway over the last few years. The parks at IIT Kharagpur and IIT Bombay have been budgeted to cost Rs 100 crore each, while Rs 90 crore is allocated to the IIT Gandhinagar Research Park, and Rs 75 crore to the remaining parks. With the high level of investment being made into these parks, their ability to provide returns on this investment by way of fostering tangible economic growth and development in the future is a key indicator upon which their success hinges.

##### **Perspectives from around the Globe**

The research park model is not a particularly novel one. It has been deployed to different ends in countries including the United States, Japan, and Australia over the last few decades. Many of these parks focus on accelerating the process of synthesising research insights into technologically advanced, commercially viable products.

The [Research Triangle Park (RTP)](https://www.rtp.org/), located in North Carolina, USA, exemplifies this form of development. It was created in 1959, in the middle of a triangle between University of North Carolina, Chapel Hill; Duke University, Durham; and North Carolina State University, Raleigh. The Research Triangle Regional Partnership, responsible for running the park, is an economic development organisation that brings together 12 counties in Central North Carolina, and connects businesses to governments, other businesses, and economic development organisations. At present, [RTP](https://www.researchtriangle.org/counties/rtp/) stretches across 7,000 acres and is home to more than 250 companies. It employs more than 50,000 people. It also boasts of a thriving ecosystem for startups — the combined value of venture capital deals in the Research Triangle Region over the last decade was $5.9 billion.

While the economic success of the RTP is documented with more precision and vigour than has been done for IITMRP so far, it is widely [considered an exception](http://www.lsccgrowthcommission.org.uk/wp-content/uploads/2016/02/CASE_STUDY_-_The_Triangle_North_Carolina.pdf) as far as the contributions of scientific research parks to economic growth are concerned. For the most part, the last two decades have seen [much scrutiny](https://www.researchgate.net/publication/46454449_Do_Science_Parks_Generate_Regional_Economic_Growth_An_Empirical_Analysis_of_their_Effects_on_Job_Growth_and_Venture_Capital) over whether or not scientific research parks are able to stimulate regional economic growth and justify the high amounts of public and private investment they demand. 

##### **Challenges Faced by the Research Park Model**

India’s move to establish more university-based scientific research parks comes at a time when their economic utility is being re-examined and re-evaluated in many parts of the world. This section looks at three aspects of India’s STI landscape to question how research parks can be best deployed towards maximising utility.

The first thing to consider is the context of R&D funding. At [0.7%](https://dst.gov.in/sites/default/files/R%26D%20Statistics%20at%20a%20Glance%202019-20.pdf), India’s Gross Expenditure on Research and Development (GERD) is a tiny fraction of its GDP. Compared to other well-performing economies’ average of 2%, this figure leaves much to be desired. While 56% of all R&D spending in India is taken up by the government, the figure averages at 20% more for countries such as the USA, China, Japan, Germany, and Canada. Then, the channeling of more public funding into STI research and development seems central to making India a competitive player in scientific R&D at the global level. At the same time, one would be remiss not to consider the need for investing public resources in transparent, goal-oriented ways. In order to justify committing taxpayer-generated resources towards any project, the government must account for how exactly these resources will be utilised, and map out the returns that will be made on them. Thus far, it remains to be seen how effectively these resources are being channeled when it comes to research parks, and uncertainty surrounds their economic efficiency.

Second, and relatedly, there appears to be a lack of consensus around India’s areas of research priority in the STI domain. Different [websites](https://www.psa.gov.in/), [portals](https://www.serbonline.in/SERB/Irhpa_Instruction), and [policy documents](http://dst.gov.in/sites/default/files/STI%20Policy%202013-English.pdf) on the subject offer up fairly different lists of priority STEM subfields, ranging from artificial intelligence to petrochemical engineering to stem cell biology. At present, most research parks that are already operational, including IITMRP, house R&D facilities and incubators for a vast variety of these subfields. One way to interpret this is to see it as a market-first approach — as opposed to determining research priorities in a top-down fashion, these research parks can be imagined as spaces that interact with the private sector on its own terms, allowing for its measures of market trends and commercial viability to steer them directionally. On the other hand, the lack of coherent direction and mappable research goals from the government’s end, evident from these vastly different lists of research priority areas, is also a cause for concern, especially in light of the release of the otherwise fairly comprehensive [draft Science and Technology Innovation Policy (STIP)](https://dst.gov.in/sites/default/files/STIP_Doc_1.4_Dec2020.pdf) in December 2020. In the absence of clear research imperatives, any potential that research parks hold is arguably bound to go to waste.

Finally, it is important to consider the implications of rapidly growing digitalisation on the strategic value of research parks. The move towards entire workplaces and economic processes going digital has been hastened significantly by the COVID-19 pandemic. Up to this point, the utility of research parks has by and large been defined in terms of their unique ability to bring moving parts of STEM R&D processes into geographical proximity with one another. If digital modes of work end up becoming the norm, research parks would lose a central part of their allure.  Housing different forms of R&D in the same space in order to foster collaboration would no longer remain a necessity or pose a unique advantage if digital spaces become the primary mode of intra and inter-sector collaboration, as they increasingly seem to be. As with other aspects discussed above, this indicates the need to look critically at models for university-based research parks, and sharpen focus through considerations around utility, viability, and scalability potential.

##### **Re-evaluating the Promise of Research Parks**

Given the reasonable doubts that have emerged over the economic potential of research parks, I suggest that there is a need to re-evaluate what they can meaningfully achieve. India’s adoption of the university-based scientific research park model holds promise in at least two distinct areas— its connection with the startup ecosystem, and its capacity to mobilise social impact. While both of these things also fall within the broader ambit of economic potential, they represent a departure from the model’s success being measured through parameters like aggregate employment generation and capital growth. 

As potential hubs of startup incubation, research parks align with the current government’s flagship economic initiatives [Aatma Nirbhar Bharat](https://aatmanirbharbharat.mygov.in/) and [Startup India](https://www.startupindia.gov.in/). At the same time, they could also be reimagined as spaces where the social impact of STI could be harnessed. Leveraging the potential of technology for social good is a 21st-century imperative that is becoming increasingly important as the world tackles massive challenges such as climate change, poverty, and other forms of structural inequality. The antecedents of this can already be seen in green technology and renewable energy being areas of research priority for multiple research parks in the country. IITMRP recently [announced](https://respark.iitm.ac.in/iit-madras-research-park-partners-with-st-andrews-university-for-renewable-energy-goals/) a partnership with University of St. Andrews that will work towards the goal of India being 100% fuelled by renewable energy sources over the upcoming decades. In a future where research parks were to take up endeavours such as promoting women and gender minority participation in STEM, addressing rural development through technology, or creating multi-stakeholder agendas around areas of STI research priority, there would be a stronger case to make for the high amounts of public funding that they demand.

As plans around them stand, India’s research parks seem to be promising many different kinds of growth. Their ability to deliver on these promises remains to be seen, and must be a subject of every taxpayer’s critical scrutiny over the next few years.

*Read more: [How Similar are Markets and Languages?](https://spontaneousorder.in/how-similar-are-markets-and-languages/)*

* * *

**About Pratyaksha Jha**

Pratyaksha holds an MA in Women’s Studies from Tata Institute of Social Sciences, Mumbai, and a BA (Hons) in Political Science from Ashoka University. They revel in spaces of interdisciplinary research, and are currently utilising their training in socio-political research as a Research Assistant in CCS’ Science & Technology Policy vertical.

## How Similar are Markets and Languages?

Original: https://www.spontaneousorder.in/p/how-similar-are-markets-and-languages

Author: Spontaneous Order

Published: 2021-12-08T11:12:22.000Z

Topics: spontaneous-order, markets, languages, austrian-economics

> I am a student of economics. And while I cannot say the same for Literature, some of my recent readings and ‘listenings’ have prompted an interesting line of thought – languages and markets are actually quite similar. In a talk I was attending two y

**Summary:**

Samrudha Surana argues that markets and languages are strikingly similar as spontaneous orders—emergent institutions shaped by human interactions rather than deliberate design, per Hayek's framework and Douglass North's definition of institutions as 'humanly devised constraints.' Both facilitate coordination: languages enable communication, markets enable exchange, production, and consumption, with endogenous rules like grammar or market norms reducing transaction costs. Exogenous regulations, akin to language regulators or government market interventions, often hinder their purpose. Words and prices parallel each other: both emerge from subjective human perceptions and interactions (e.g., onomatopoeia varies by language; prices from valuations and opportunity costs), convey dispersed knowledge for coordination (Hayek's 'marvel' of prices feeding Paris, per Bastiat and Russ Roberts), and exist only relatively (words defined by context, prices via ratios of inputs/substitutes). Rule-breaking in language yields beauty and utility, just as voluntary exchanges spur innovation without third-party harm. Centrally planned alternatives like Esperanto or socialist economies fail. The classical-liberal conclusion urges humility in obstructing voluntary exchanges, recognizing markets' self-correcting nature through participant learning.

**Key points:**

- Markets and languages emerge as spontaneous orders from individual interactions, not central design.
- Grammar and market rules are endogenous institutions that lower transaction costs to enable communication and exchange.
- Prices, like words, communicate subjective knowledge to coordinate billions, existing only in relative ratios.
- Top-down interventions, such as language regulators or central planning, defeat the purpose of these institutions and fail, as seen in Esperanto.
- Be humble about criminalizing voluntary exchanges, as they generate utility and innovation akin to linguistic creativity.

**By Samrudha Surana**

* * *

I am a student of economics. And while I cannot say the same for Literature, some of my recent readings and ‘listenings’ have prompted an interesting line of thought – languages and markets are actually quite similar. In a talk I was attending two years ago, I learnt Douglass North’s (the 1993 Nobel-prize winning economist) [definition of institutions](https://www.cambridge.org/core/books/institutions-institutional-change-and-economic-performance/AAE1E27DF8996E24C5DD07EB79BBA7EE) – “humanly devised constraints that shape human interaction.”  And of course, there is the first similarity – languages and markets both have constraints devised by us to serve their function better. 

Languages and Markets are both socially required institutions. Languages allow two humans to communicate with each other and markets allow humans to exchange, to produce and to consume. The similarities between markets and languages exist in their origin, their development, the kind of rules they operate in and their functions in a society. Let me explore these further to better convince you.

Firstly, markets and languages are both emergent, in the sense that they are both a result of human action but not of human design. No single person or authority has designed either of them. Both have evolved through numerous interactions among individuals. These are what Hayek would have described as *Spontaneous Orders*. 

Now, there may be innate grammar in languages, but my argument that grammar itself is a result of the spontaneous order also has [support](http://bleedingheartlibertarians.com/2013/11/spontaneous-order-language-and-social-justice/). Grammar provides the rules for common use of both spoken and written language so we can more easily understand each other. In markets too, the rules that emerge make it easier to exchange, by reducing the transaction costs (simply the cost incurred to make an exchange, could be the cost of planning, contracting, resolving disputes, etc). My primary focus here is on the institutions that [Boettke, Coyne and Leeson](https://onlinelibrary.wiley.com/doi/full/10.1111/j.1536-7150.2008.00573.x) would describe as ‘indigenously introduced endogenous’. 

Rules and regulations may also try to be introduced exogenously. Although it might sound ridiculous (and they might as well be), there are various [language regulators](https://en.wikipedia.org/wiki/List_of_language_regulators), just as there are various market regulators set up by governments. If there are rules and regulations that make it difficult to interact – *communicate* in the case of languages, and *exchange* in the case of markets – the institutions are actually defeating their purposes. 

Many renowned-littérateurs have been known to [break grammar rules](https://www.huffpost.com/entry/grammar-rules_n_4768485). Few would deny though that a certain beauty has emerged from their adventure. This rule-breaking produces utility for people, and no person is really harmed from it. Similarly, if two people wish to exchange, and there’s no direct and real harm to a third person, we must be a little humble about trying to make it difficult or even criminal for them to exchange. These individuals, if exchanging voluntarily, may only be trying to gain utility. Additionally, in the process, the society may benefit through the innovations that might emerge, just as beautiful poems emerge through linguistic rule-breaking. 

**Words & Prices** 

Now that we have explored the similarities between languages and markets through a dragon’s eye view, I would like to look at a specific component of each, namely words and prices. There are many nuances to them, which I think make them truly good analogies for each other. 

Prices, like words, communicate information and are very necessary to coordinate actions of millions, and even billions of people. Frédéric Bastiat, a 19th century economist, asked [‘How does Paris get fed?’](https://www.econlib.org/library/Bastiat/basSoph.html?chapter_num=17#book-reader) and economist Russ Roberts’ [‘It’s a Wonderful Loaf’](https://wonderfulloaf.org/) is a wonderful answer. Hayek writes that it is the **[marvel](https://fee.org/articles/the-use-of-knowledge-in-society/)** [of the price system](https://fee.org/articles/the-use-of-knowledge-in-society/) that allows the many people around the world to coordinate their actions despite never meeting or communicating in any way except through prices. When Uber shows surge prices, it tells me that there may be people who may have a greater need to travel right now, and I might decide to just take the metro – all this communication and coordination only through prices.

Another similarity between the two is that prices and words both emerge only from human actions and interactions. They are certainly natural, but do not come from a nature absent of humans. You might say that [onomatopoeia](https://www.merriam-webster.com/dictionary/onomatopoeia) comes from nature, but it actually comes from how humans perceive nature. Otherwise, why would a dog’s bark be ‘woof woof’ in English and ‘bhow bhow’ in Hindi? Prices are purely a result of subjective valuations, and even the ‘objective costs blade’ of the [Marshallian Scissors](http://www.artmarket.org.uk/Marshallian%20Scissors.html) actually comes from subjective costs – particularly opportunity costs. 

An important feature of both a word and price is that they cannot exist independently, and have no essence in the absence of other words and prices respectively. One cannot define a word in a dictionary without having other words first. Thus, words simultaneously are defined by and do define each other. Similarly, considering a price independent of other corresponding prices (prices of inputs, substitutes and complements) makes no sense. That’s why economists belonging to the Austrian tradition stress on the importance of price ratios in individuals’ decision making, and it also explains why it makes little sense to aggregating or averaging various prices to determine a price level in an economy and making policy decisions based on the same.

The essence of the essay is this –  languages and markets foster coordination and cooperation among individuals. They both result from numerous individual interactions and rely on the particular knowledge of time and circumstance, that more often than not, only individuals can have. Just as Esperanto, a language ‘designed’ to be a universal language failed, so have centrally planned economies. I again implore you to be humble while thinking about obstructing an exchange between two people, who are interacting voluntarily because you believe that it may be wrong. I may have unknowingly broken some grammar rules while writing this essay, but I do hope that I was able to get my message across. Similarly, markets may not be perfect, but they do work – and the people participating in the market learn from their mistakes – as I have from my editor while writing. 

*If you found the role of prices and markets in an economy, spontaneous order, and similarities between languages and markets interesting and would like to explore them further, keep an eye out for the Austrian Economics Seminar. The seminar will be conducted by the Centre for Civil Society on the weekends between 5th and 27th of February 2022. Austrian Economics is an entirely different approach to understanding social realities, dissenting from mainstream method, theory, and policy. Economist Peter Boettke beautifully describes it as being “Humanistic in Approach and Humanitarian in Concern”. To apply for the seminar, and for more information, visit [here](https://form.typeform.com/to/RwmBSztp).*

*Read more: [Power freebies show pitfalls of electoral politics](https://spontaneousorder.in/power-freebies-show-pitfalls-of-electoral-politics/)*

* * *

**About Samrudha Surana**

Samrudha Surana is a graduate student in economics and has previously worked as an Associate with Centre for Civil Society. His research interests lie in studying market processes, political economy, and economic history.

## Power freebies show pitfalls of electoral politics

Original: https://www.spontaneousorder.in/p/power-freebies-show-pitfalls-of-electoral-politics

Author: Spontaneous Order

Published: 2021-12-06T17:28:59.000Z

Topics: electoral-politics, subsidies, freebies, renewable-energy

> Always sacrifice economic sense if it wins a few more votes. That logic drives competitive politics in India, spurring myopic measures that inflict long-term damage. Too many elections are dominated by three issues — subsidies, job reservations and comm

**Summary:**

Electoral politics in India prioritizes short-term vote-winning freebies over economic rationality, leading to myopic policies that cause long-term harm, dominated by subsidies, job reservations, and communalism. Economists estimate merit subsidies at 4.5% of GDP versus 5.7% for non-merit ones, diverting significant funds from development given total government revenue is only 18% of GDP. Hidden costs include 153 official holidays in 2022, inflating labor expenses, discouraging job creation, formal employment, and labor-intensive industries, trapping workers in agriculture. In Punjab, free electricity for farmers accounts for two-thirds of the state's debt, raising industrial tariffs and stifling industry. Ahead of elections, Congress slashed household tariffs by Rs 3/unit, costing Rs 3,316 crore annually for 7 million consumers, while AAP promises 300 free units. This populism ignores COP26 climate commitments for carbon taxes, instead pushing energy subsidies. Punjab's new law rescinds 73 renewable projects (983.5 MW), overriding contracts despite solar tariffs falling to Rs 2.50/unit from over Rs 10/unit, threatening trillions in needed renewable investments by 2030 and investor confidence. Courts may intervene, but political myopia consistently undermines development from a classical-liberal standpoint favoring markets and long-term growth.

**Key points:**

- Non-merit subsidies consume 5.7% of GDP, exceeding merit subsidies at 4.5% and diverting from social and economic development.
- Excessive official holidays totaling 153 days in 2022 raise labor costs, discourage formal jobs, and promote mechanization over labor-intensive growth.
- Punjab's free farm power causes two-thirds of state debt, leads to high industrial tariffs, and blocks investments in education, health, and infrastructure.
- Political promises of free household electricity, like AAP's 300 units and Congress's Rs 3/unit cut costing Rs 3,316 crore yearly, oppose climate goals for energy taxes.
- Punjab's law cancelling 983.5 MW renewable contracts risks scuttling India's 2030 renewable investment needs by eroding contract sanctity.

**By Swaminathan SA Aiyer**

* * *

Always sacrifice economic sense if it wins a few more votes. That logic drives competitive politics in India, spurring myopic measures that inflict long-term damage. Too many elections are dominated by three issues — subsidies, job reservations and communalism.

Economists Mundle and Sikdar estimate that merit subsidies (for elementary and secondary education, food distribution, water supply and sanitation) are 4.5% of GDP against 5.7% for non-merit subsidies. You may argue that some other subsidies should also qualify for the “merit” list. But considering that the entire revenue of the centre and states is just 18% of GDP, a considerable sum is diverted from social and economic development to unwarranted populism.

Nor do explicit subsidies in the above calculation capture anything like the true cost of giveaways. For instance, the full list of official holidays in 2022 comes to a staggering 153 days! This includes holidays falling on Sundays, applicable only in some states and valid only for certain religious groups. Different states often have different holidays on the same day, so the list duplicates several dates. Nevertheless, the list is humungous. A recent news report said West Bengal in 2022 would have 48 holidays, of which 11 would fall on Sundays.

Official holidays are over and above weekly holidays, annual leave, medical leave and casual leave. This jacks up the real cost of salaries and wages and helps explain why employers try to minimise jobs. It discourages labour-intensive industries and encourages premature mechanisation. It rewards formal sector workers, the labour aristocracy, while keeping the vast majority in the informal sector. This is why farmers are unable to shift out of agriculture even when they desperately want to. Yet politicians press for ever more holidays to cater to one vote bank or another.

On explicit subsidies, Punjab is witnessing an unusual battle. It is the biggest giver of free electricity to farmers among states. S S Johl, the top agricultural authority in the state, estimates that two-thirds of the state’s entire debt can be ascribed to free farm power, checking its ability to finance education, health and infrastructure. No political party dares suggest charging farmers. A sad consequence is high industrial power tariffs, discouraging badly-needed industry. 

Now, a new battle has begun on the tariff for residential consumers. The state goes to the polls in February-March and the ruling Congress Party faces a major challenge from the Aam Aadmi Party (AAP), which currently rules Delhi. AAP gained fame by making consumer electricity free in Delhi up to 200 units per household, plus a 50% subsidy for consumption between 200 and 400 units. The party has promised 300 units of free power to households if elected in Punjab.

Congress chief minister Charanjit Singh Channi has fought back by slashing his power tariff by Rs 3/unit, benefiting almost 7 million household consumers at an extra cost of Rs 3,316 crore per year to the exchequer. AAP says it will send Channi a list of one lakh households in Delhi that get free electricity and ask how many in Punjab do. Channi responds that the subsidy in Delhi — a tiny state — is only Rs 2,000 crore, whereas Punjab’s total subsidy (including farm subsidy) is Rs 14,000 crore.

Neither has anything to say about meeting India’s climate commitments at the COP26 summit, which emphasised the need for stiff carbon taxes to discourage energy consumption. Yet electoral politics is taking India in the opposite direction, towards massive subsidies rather than a tax on energy.

Worse, to cut losses in its power sector, Punjab has enacted a new law to rescind all renewable electricity contracts signed with private sector companies, hitting 73 projects with 983.5 MW capacity. The companies won auctions at relatively high prices many years ago. The new law seeks to override all other laws and court judgments.

Solar and wind energy auctions in the last decade have been a tremendous success. Initially the winning tariffs were very high, above Rs 10/unit. But this enabled a renewables infrastructure to come up and gain scale economies. Meanwhile global prices for solar panels and wind turbines crashed. So, the winning tariff in new solar energy auctions is down to around Rs 2.50/unit, cheaper than for new coal-based power.

India’s climate pledge requires trillions of rupees of investment in renewables by 2030. These will be scuppered if states like Punjab seek retrospective tariff changes. How many companies will invest in a country where politics drives good projects into bankruptcy?

Andhra Pradesh was the first to enact a renewables contract-breaking law. This was stayed by its High Court, and doubtless Punjab’s will be too. The matter may ultimately go to the Supreme Court, which will hopefully uphold the contracts. But it is sad to see political myopia constantly hobbling development.

*This article was originally published in [The Times of India](https://timesofindia.indiatimes.com/india/power-freebies-show-pitfalls-of-electoral-politics/articleshow/88095162.cms) on 6 December 2021*.

*Read more: [Rumblings of the coming central bank digital currency](https://spontaneousorder.in/rumblings-of-the-coming-central-bank-digital-currency/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Rumblings of the coming central bank digital currency

Original: https://www.spontaneousorder.in/p/rumblings-of-the-coming-central-bank-digital-currency

Author: Spontaneous Order

Published: 2021-12-03T12:36:48.000Z

Topics: cbdc, monetary-policy, crypto-regulation, financial-stability

> A recent advertisement by a group of Indian crypto exchanges claimed that Indian citizens have over ₹6 trillion invested in crypto assets. A separate crypto platform company said that more than 100 million Indians have invested in crypto assets. These n

**Summary:**

Amid growing crypto investments—estimated at over ₹6 trillion by 100 million Indians, though likely overstated—RBI Governor Shaktikanta Das deems them a threat, prompting a government bill to regulate them, possibly banning use as currency while enabling RBI's CBDC pilot as early as Q1 next fiscal year. An Indian CBDC is inevitable, mirroring global trends where 14% of central banks have pilots and 60% experiment per BIS survey. While supply-side issues dominate discourse, the demand side—household responses—is crucial from a classical-liberal lens wary of monetary disruptions. Indian households hold ₹17.3 trillion in bank deposits vs. ₹2.4 trillion cash; converting cash to CBDC minimally impacts, but deposit shifts could spark instability, akin to 2016 demonetization's reverse flow. CBDC design matters: zero interest mimics cash for payments only, but positive rates make it a store of value, with usability via UPI key. Macro factors like income distribution drive demand, with Canadian estimates at 4-55% of cash+deposits; India needs tailored research. Echoing Tobin's 1985 idea, digital tech enables direct RBI accounts, but unstable demand will complicate monetary management post-financial liberalization.

**Key points:**

- Indian CBDC pilot likely in Q1 next fiscal year amid crypto regulation to curb threats to financial stability.
- Shifts from ₹17.3 trillion bank deposits to CBDC could cause instability, especially under stress, reversing demonetization dynamics.
- CBDC interest rates and usability via UPI will determine household switches between cash, deposits, and CBDC.
- Demand sensitive to macro factors like income; India requires local estimates beyond rich-economy models showing 4-55% uptake.
- Focus on CBDC demand as vital for monetary policy, given unstable money demand since 1980s liberalization.

**By Niranjan Rajadhyaksha**

* * *

A recent advertisement by a group of Indian crypto exchanges claimed that Indian citizens have over ₹6 trillion invested in crypto assets. A separate crypto platform company said that more than 100 million Indians have invested in crypto assets. These numbers are most likely an overestimate, even if we consider the sharp increase in the prices of various crypto assets in recent months.

However, the growing number of Indians parking money in these new-age assets does seem to have rattled policymakers. Reserve Bank of India (RBI) Governor Shaktikanta Das said last month that crypto assets are a threat to India’s financial system. The government now plans to table a bill regulating crypto assets in the country. The details are not clear. One possibility is that crypto assets such as Bitcoin will be allowed to continue as an investment alternative, but will be banned as a currency used for economic transactions. The government will also clear the road for RBI to introduce its own digital currency. A senior RBI official has said that the pilot launch of a new central bank currency could happen as early as the first quarter of next financial year.

An Indian central bank digital currency (CBDC) is inevitable. A survey of central banks earlier this year by the Bank of International Settlements showed that 14% of the surveyed institutions had launched pilot projects, while 60% were experimenting with the technology. A lot has already been written on the supply side of the CBDC opportunity—from whether it would initially be open for retail or wholesale payments, for domestic or international payments, and how it can be made interoperable with the existing payments system, to data protection concerns, for example.

However, it is also important to focus attention on the demand side of the CBDC opportunity. How will ordinary citizens respond to a CBDC, which in effect will give them an opportunity to bank directly with RBI? Households generally hold most of their liquid financial assets in bank deposits rather than in cash, or bank money rather than central bank money. A CBDC will provide them an option other than cash to hold central bank money in order to make payments or protect the value of their savings.

There are three sets of issues worth highlighting when it comes to understanding the potential demand for CBDCs from the private sector.

First, much depends on how households think about their balance sheets. In India, for example, household balance sheets have ₹17.3 trillion of bank deposits, compared to ₹2.4 trillion of cash. There will be a minimal impact in case cash is converted into CBDC holdings, since one type of central bank money is being converted to another. However, a sudden movement of financial savings from bank deposits to a CBDC could create financial instability, especially during times of economic stress. In 2016, the initial weeks after demonetization saw people forcibly convert their cash into bank deposits, or central bank money into bank money. Now think about this as a permanent feature of the financial system.

Second, the way households dynamically move from one form of money to another will depend on the design of our CBDC. One of the major factors affecting such behaviour will be the interest rate offered on CBDC holdings. Zero interest rates on these holdings will in effect mean that they are no different from cash, which is also a zero-interest liability of the central bank. People will then hold the CBDC only for payments. However, the situation will get more complicated if interest rates are involved and the CBDC becomes a store of value. Also, the ease of using the CBDC, for example through existing digital wallets or the United Payments Interface, will be an important determinant of household behaviour, especially switching between the CBDC, cash and bank deposits.

Third, quantitative estimates by several economists show that demand for a CBDC will be sensitive to macroeconomic factors such as household income, income distribution, the share of household funding of the banking system etc. Most of the estimates available right now are for rich economies, so more work needs to be done on this in the Indian context. For example, Bank of Canada economist J. Li has used household survey data to estimate that expected demand for a CBDC by Canadian households could range from 4% to 55% of their combined holdings of cash and bank deposits, depending on the design of Canada’s sovereign digital currency.

Economist James Tobin had way back in 1985 proposed that households should be allowed to have direct accounts with the US central bank. The development of new digital technologies now makes that possible. A lot of the ongoing debate on an Indian CBDC is focused on what RBI should do; far less attention is paid to the equally important question of how households will respond.

A final technical point: The demand for money is as important as the supply of money in monetary economics. It should be the same for CBDCs. Unstable demand for money has foxed central bankers ever since the financial liberalization of the mid-1980s expanded portfolio choices of the private sector, both households and businesses. It will be the same with CBDCs. Monetary management will become more complicated.

*This article was originally publish in [The Mint](https://www.livemint.com/opinion/columns/rbis-launch-of-a-digital-currency-will-mark-a-big-monetary-moment-11638290166126.html) on 1 December 2021.*

*Read more: [Smog and Order](https://spontaneousorder.in/smog-and-order/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Smog and Order

Original: https://www.spontaneousorder.in/p/smog-and-order

Author: Spontaneous Order

Published: 2021-11-30T12:30:32.000Z

Topics: stubble-burning, agricultural-subsidies, green-revolution, groundwater-depletion

> As we look at Diwali in the rear-view mirror and wonder if Delhi and other parts of North India can see anything at all, the question, which was last raised during the Farm Law negotiations, has returned. As stubble in Punjab and Haryana have been lit o..

**Summary:**

Stubble burning by Punjab and Haryana farmers contributes to Delhi's winter smog, as tracked by NASA, but the root cause lies in decades of government interventions distorting agriculture. The Green Revolution in the 1980s incentivized a shift from sustainable traditional crops like maize, pearl millet, pulses, and oilseeds to water-intensive paddy and wheat via MSP guarantees, free electricity, and water subsidies, making Punjab a top rice producer at the cost of groundwater depletion. In 2009, Punjab's Preservation of Subsoil Water Act (followed by Haryana's) banned early rice sowing to conserve water, forcing monsoon planting without farmer input. This delayed harvest left insufficient time to clear stubble before wheat sowing, making burning the cheapest option amid Delhi's winter wind slowdown and location disadvantages. Farmers share blame alongside Diwali crackers, but government policies—lacking stakeholder involvement—entrenched unsustainable rice cultivation. Recent farm law rollback decriminalized stubble burning, while election promises of free electricity risk worsening smog and groundwater crisis. From a classical-liberal view, scrapping perverse incentives since the 1980s could have prevented this, allowing easier breathing in Delhi winters.

**Key points:**

- Government incentives from the Green Revolution and MSP shifted Punjab-Haryana to unsustainable rice-wheat cycles, depleting groundwater.
- 2009 subsoil water acts delayed rice planting to monsoon, rushing stubble clearance and promoting burning.
- Stubble smoke, tracked by NASA, exacerbates Delhi's smog when winter winds slow, but policy distortions are the primary culprit.
- Decriminalization of stubble burning and new free electricity promises will likely intensify pollution and resource strain.

**By Sourya Banerjee**

* * *

As we look at Diwali in the rear-view mirror and wonder if Delhi and other parts of North India can see anything at all, the question, which was last raised during the [Farm Law](https://www.downtoearth.org.in/news/agriculture/a-thaw-centre-agrees-to-farmers-demands-on-stubble-burning-power-subsidy-74842) negotiations, has returned. As stubble in Punjab and Haryana have been [lit on fire again](https://indianexpress.com/article/cities/jalandhar/8-days-punjab-farmers-paddy-stubble-burning-1-lakh-hectares-7599791/), and the Government, while rolling back the farm laws, has also promised to [decriminalize stubble burning](https://timesofindia.indiatimes.com/india/centre-accepts-demand-of-farmers-decriminalizes-stubble-burning-agriculture-minister-tomar/articleshow/87947455.cms), let us tackle the ploughing bull by its horns; *are the farmers who burn stubble to be solely blamed for the winter smog in Delhi?*

Stubble burning by farmers in Punjab and Haryana does lead to an increase in pollution in Delhi, but the *simple truth* is a bit more complicated. Many have argued that stubble burning has been in practice, admittedly at a smaller scale, since the 1980s, but the great Delhi smog is a relatively recent phenomenon – the burning is not to blame at all. That is unfortunately not true. The burning does deserve its share of the blame. Thanks to [NASA’s Earth Observatory](https://indianexpress.com/article/cities/jalandhar/8-days-punjab-farmers-paddy-stubble-burning-1-lakh-hectares-7599791/), much like with other causes of pollution, we can track the smoke from the stubble burning on its journey to Delhi NCR.

But to understand the why and how of the problem, we must revisit certain historical events. 

**The History**

Historically, Punjab had always grown what is considered to be their traditional crops, i.e [maize, pearl millet, pulses and oilseeds](https://www.downtoearth.org.in/coverage/punjabs-paddy-dilemma-44957). During the early 1980s, driven by the [Green Revolution](https://en.wikipedia.org/wiki/Green_Revolution_in_India) the Central Government incentivized Punjab farmers to shift to paddy and wheat cultivation. The Central Government had argued for this change in the name of “food security”. However, this was done with little thought about sustainability and indegenious practice.

Fast-forward to 2000 – guaranteed [MSP incentivised cultivation of rice and wheat](https://theprint.in/india/punjab-farmers-want-status-quo-on-msp-subsidies-at-the-root-of-agrarian-crisis/580135/) and [electricity and water](https://indianexpress.com/article/explained/explained-how-free-farm-power-drains-punjabs-coffers-and-water-reserves-5870813/) subsidies made it possible for Punjab to slowly become one of the biggest producers of rice.

And all was well, till the *unseen* cost of this continuous cycle of rice and wheat finally caught up. Rice is a very water-intensive crop. With an [electricity subsidy](https://www.hindustantimes.com/chandigarh/free-power-bleeds-punjab-s-coffers/story-GMwv3dC33XFDv7yvyLWbVO.html) to run machines to extract groundwater coupled with the availability of free water, Punjab produced a lot of rice at the cost of diminishing their groundwater.

Eventually, this caught the state government’s eye and it was in 2005 that the [Punjab State Farmers Commission](https://www.psfc.org.in/) (PSFC) came up with a seemingly novel idea. Rice cultivation till then was generally done in April and hence depended heavily on the groundwater. The PSFC [suggested](https://www.downtoearth.org.in/coverage/punjabs-paddy-dilemma-44957) that the government ban sowing rice in April and ask the farmers to sow rice only during the monsoon season to reduce groundwater distress. This seemed sound on paper and in 2009 the Punjab Government passed the [Punjab Preservation of Subsoil Water Act](https://agri.punjab.gov.in/sites/default/files/Pb_preservation_of_Subsoil_Act%2C2009.pdf). This was soon followed by the [Haryana Preservation of Subsoil Water Act, 2009](http://www.ielrc.org/content/e0921.pdf) by the Haryana Government which was facing the same problem.

That moment in 2009 was a turning point. Punjab and Haryana were producing more rice, thanks to the [Green Revolution](https://www.moneycontrol.com/news/opinion/stubble-burning-how-the-green-revolution-has-left-behind-grey-skies-7528971.html) than either of the states or for that matter the country required. Instead of going back to the traditional sustainable crops of maize, millet, pulses, etc, the respective governments decided to intervene and entrench rice cultivation deeper in the states.

**The Fallout**

The decision to change the planting cycle, taken without the involvement of farmers and their expertise, caused two different kinds of issues. For the farmers, the delayed cycle meant that if the monsoon failed, they would be left with no other crop. Additionally, the seasonal change also increased the need for pesticides and other additional costs. On the other hand, it also meant that farmers had less time to properly harvest and clear their fields before the next cropping season for wheat began. This is more pertinent to the discussion at hand, because at this stage of the farming season, in order to quickly clear their fields for the next harvest, farmers were left with only one quick and cheap option to get rid of the stubble that is generated post harvest– [burn it](https://thewire.in/environment/laws-meant-to-save-water-unexpectedly-led-to-more-air-pollution-study).

All this leads us to the last factor the beauracary never accounted for, i.e the [location of Delhi](https://scroll.in/article/901029/delhi-could-blame-location-wind-speed-himalayas-for-its-terrible-air-or-it-could-blame-itself). For in the land-locked city, winter is when the [wind almost dies down](https://qz.com/india/1448666/delhis-location-is-the-reason-it-suffers-smog-every-winter/). By the time the stubble smoke from Punjab and Haryana reaches Delhi in late October-November, the [wind speed has slowed down to a crawl](https://weather-and-climate.com/average-monthly-Wind-speed,New-Delhi,India) in the region. And this pushes the usually “yellow”, in terms of Delhi’s air quality, to “red”.

To sum up the story, one could blame farmers in Punjab and Haryana for burning stubble in winter. And they do share some of the blame as the smoke from the stubble, along with Diwali crackers, is perhaps what pushes the usually very bad Delhi air to outright toxic. But if one looks at the line-up of the *usual suspects*, one will notice that government intervention  devoid of stakeholder involvement is perhaps the real guilty party which gets to walk away scot-free. Now that stubble burning is [decriminalized](https://www.timesnownews.com/india/article/stubble-burning-may-have-been-decriminalized-but-can-it-be-prevented/701342) as a result of the Farm Laws negotiations and all political parties are falling over themselves to offer Punjab [free electricity](https://www.indiatvnews.com/news/india/punjab-assembly-election-2022-aap-arvind-kejriwal-free-electricity-free-medicine-farmers-737548) ahead of the state’s upcoming polls, matters may only get worse. The situation is likely to turn dire not just for Delhi NCR, but also for Punjab’s groundwater levels. 

It’s true that Delhi air would be toxic even without the stubble burning. However, maybe without the government trying to change cropping patterns in 2009 and throw horrible incentives since the 1980s (in the race to win elections), it could have been much easier to breathe in Delhi winters.

*Read more: [Community Forest Rights: Lessons for India](https://spontaneousorder.in/community-forest-rights-lessons-for-india/)*

* * *

**About Sourya Banerjee**

Sourya is the Project Associate for CCS Academy in Hyderabad. A BBA-LLB (Hons.) degree holder, Sourya used to practice law in Hyderabad before joining CCS. Sourya has also worked with numerous non-profits social organizations including Red Elephant Foundation, and Red Dot Foundation and also written on law and policy for online platforms such as LiveLaw, The Logical Indian, Qrius etc. An ex- Students for Liberty Hyderabad Local Coordinator, in his free time, Sourya runs a citizen journalism platform called Arguendo.

## Community Forest Rights: Lessons for India

Original: https://www.spontaneousorder.in/p/community-forest-rights-lessons-for-india

Author: Spontaneous Order

Published: 2021-11-24T10:28:30.000Z

Topics: community-forest-rights, forest-rights-act, indigenous-land-rights, free-market-environmentalism

> In today’s global commitments towards environmental conservation, international organisations like the United Nations (UN), the International Union for the Conservation of Nature (IUCN), the European Union Forest Law Enforcement, Governance, and Trade (

**Summary:**

Community Forest Rights (CFR) represent a classical-liberal approach to environmental conservation by recognizing legal ownership of forests by indigenous peoples and local communities, who have historically stewarded over 50% of the world's lands but legally own only 10%. In India, colonial and post-colonial centralization treated these forests as 'unowned,' displacing communities and perpetuating insecurity that leads to exploitation and loss of traditional knowledge. The Forest Rights Act (FRA), 2006, enables communities to claim rights for livelihood, habitation, and socio-cultural needs, with India scoring 13/15 in the Rights and Resources Initiative's 2020 Opportunity Framework—indicating readiness for large-scale tenure reforms. Yet, only 3% of potential has been realized: affecting 200 million forest dwellers across 170,000 villages and 85.6 million acres. Barriers include poor dissemination of rights awareness and state forest departments' resistance, favoring controlled Joint Forest Management Committees (JFMCs) or Vana Samrakshana Samithies (VSS) over autonomous CFRs, violating FRA's intent to undo historical injustices. Benefits of CFR include lower deforestation, better biodiversity management, poverty reduction, women's rights protection, and climate mitigation. The author urges speeding implementation to harness communities' incentives for conservation over centralized control.

**Key points:**

- Indigenous communities customarily manage 50% of global lands but legally own only 10%, highlighting the need for rights recognition to enable stewardship.
- India's FRA 2006 has potential to benefit 200 million forest dwellers across 170,000 villages and 85.6 million acres, but only 3% has been implemented.
- State forest departments undermine FRA by promoting JFMCs/VSS, which remain under departmental control, instead of autonomous CFRs.
- Recognizing CFR reduces deforestation, enhances biodiversity, alleviates poverty, and aids climate adaptation through local incentives.

**By Sarthak Kwatra**

* * *

In today’s global commitments towards environmental conservation, international organisations like the United Nations (UN), the International Union for the Conservation of Nature (IUCN), the European Union Forest Law Enforcement, Governance, and Trade (FLEGT) initiative, and the International Labour Organisation (ILO) are united by something more than their exemplary ideas and efforts. They are invested in securing biodiversity and climate by securing one fundamental yet largely untapped tool for conservation –  the recognition of *Community Forest Rights.*

In order to establish the premise for Community Forest Rights, especially in India, I believe that one ought to take a brief detour to understand the history behind it. Indigenous peoples & local communities have historically been the stewards of our natural resources, which include our forests. However, this stewardship has often been misappropriated under the sole lens of common custodianship. As a result, even though indigenous peoples and local communities customarily claim and manage over 50 percent of the world’s lands, they legally own just 10 percent ([Rights and Resources Institute, 2017](https://rightsandresources.org/wp-content/uploads/2017/09/Stockholm-Prorities-and-Opportunities-Brief.pdf)). 

In India’s colonial period when the ownership of forests was centralised, these lands came to be observed as “Unowned.” The historical stewards, indeginious people and local communities were pushed away not just from their livelihoods, but resources they had looked after for generations. What’s important to note here is that even in India’s post-colonial years, the centralized approach towards forests has remained firm; the approach is separating forests from the very people who have the greatest incentive to protect them. 

This insecurity of land rights not only leads to exploitation of and violence against these local communities, but it also endangers the customs and traditional knowledge that are invaluable to the conservation of forests. Therefore,  the recognition of community land rights is crucial. The essence of these is in the name itself – placing the legal ownership of lands back in the hands of communities. 

Now that we understand *what* community forest rights are, we must also understand *why* they are essential. From lower rates of deforestation to better management of biodiversity, from poverty reduction to protection of indigenous and rural women’s rights, and from climate change mitigation to adaptation – the benefits are truly immense. 

**Realising Rights**

The Rights and Resources Initiative, on September 15, 2020, published a groundbreaking analysis, titled *[Opportunity Framework, 2020](https://rightsandresources.org/publication/the-opportunity-framework-2020/).* The idea behind this analysis was to gauge a country’s readiness to formally foster Afro-descendant peoples’, indigenous peoples’, and local communities’ rights to their land and resources through reforms. Based on the following five parameters, each country considered was scored out of fifteen:

(i) The adequacy of existing legal frameworks;

(ii) National willingness towards the aforementioned reforms; 

(iii) Sub-national governments’ willingness towards the aforementioned reforms;

(iv) The government’s capacity to institute reforms; 

(v) Accompanying communities’ and civil society organisations’ capacity for implementation. 

India was one of the countries observed under the Opportunity Framework, being given the score of 13 out of 15 – ‘*Ready for large, national, or sub-national projects to implement tenure reforms*’ – owing largely to the Forest Rights Act, 2006. As defined by the Ministry of Tribal Affairs – the Forest Rights Act (FRA), 2006 recognizes the rights of the forest dwelling tribal communities and other traditional forest dwellers on forest resources. The communities were dependent on these resources for a variety of needs, including livelihood, habitation and other socio-cultural needs.

At this juncture, with the context of the benefits of local peoples’ land rights and India’s readiness for reforms, it feels nearly impossible to not ask the question – *Why hasn’t it been implemented so far?*

The answer is a recipe composed of one-part education and two-parts state intervention. To begin with, in about fifteen years of the Forest Rights Act, we’ve failed to disseminate, promulgate, and most importantly, realise the true potential of this historical legislation. [200 million forest dwellers](https://www.epw.in/journal/2017/25-26/forest-rights-act/promise-and-performance-forest-rights-act.html) across [1,70,000 villages](https://www.epw.in/journal/2017/25-26/forest-rights-act/promise-and-performance-forest-rights-act.html), with community forest resources rights over [85.6 million acres](https://www.epw.in/journal/2017/25-26/forest-rights-act/promise-and-performance-forest-rights-act.html) of India’s forests – that is the estimated potential of a Forest Rights Act that is in full force. These figures seem even more herculean when compared to what’s been realised – only 3%. Therefore, a communication to all stakeholders about not just their rights, but also of the aforementioned potential will benefit the implementation of the Forest Rights Act multi-fold. 

As far as the latter point on state intervention is concerned, one can not fail to observe that the narrative of progress with the Forest Rights Act, 2006 has been one step forward and two steps back, at best. The highlight of this retrograde has to be in the actions of several state authorities that are responsible for either the dilution or the blatant violation of the Forest Rights Act, 2006. This is done through the creation of new institutional mechanisms or the distortion of existing ones.

India has had a centralized approach towards forests, as we previously discussed. This has led to what can now only be called a deeply entrenched forest department; one that is quite unwilling to lose control of the forests of India. States continue to promulgate the creation of Joint Forest Management Committees (JFMCs), as against Community Forest Resource (CFR) rights. Community Forest Resource (CFR) rights are one of the most indispensable parts of the Forest Rights Act – it allows communities to protect and manage their customary forests; it is at the very pith of what makes conservation participatory. Therefore, giving rights to JFMCs not only emanates that overarching hesitation, but is also an overt violation of the Forest Rights Act, 2006. This is because JFMCs are controlled by the forest department, as against the CFRs, which are autonomous. 

A case in point here is Andhra Pradesh, where Vana Samrakshana Samithies (VSS) were formed. Vana Samrakshana Samithies (VSS) are akin to the Joint Forest Management Committees. The transfer of rights to JFMCs or VSSs is like chasing an illusion, because they’re still not independent and technically still  fall under the forest department. In addition to that, this transfer also defeats one of the main purposes of the Forest Rights Act, 2006 – giving back the land to communities that was taken away from. The intent was also to symbolise the undoing of the historical injustices against these communities. 

While we’ve seen the involvement of communities and initiatives with valiant efforts, like [ARCH-Vahini](https://yourstory.com/2017/03/right-to-property-tribal-gujarat-arch/amp), that are an extraordinary aid in the process of mapping and claiming of rights, the need of the hour is speeding-up the implementation. There is no question of veracity as far as benefits of the aforementioned transfer of rights are concerned. However, in the global efforts towards conservation, to undermine Community Forest Rights would be to miss the elephant in the room altogether; it would mean undermining the global efforts towards conservation altogether.

*Read more: [Private investment, the holy grail for India’s recovering economy](https://spontaneousorder.in/private-investment-the-holy-grail-for-indias-recovering-economy/)*

* * *

**About Sarthak Kwatra**

Sarthak is an Economics graduate from Hansraj College, Delhi University and he's currently working as a Junior Associate at the Centre for Civil Society. Sarthak's areas of interest include Economic History, Free Market Environmentalism, Pop Culture, and often their intersections.

## Private investment, the holy grail for India’s recovering economy

Original: https://www.spontaneousorder.in/p/private-investment-the-holy-grail-for-indias-recovering-economy

Author: Spontaneous Order

Published: 2021-11-22T12:20:13.000Z

Topics: private-investment, economic-recovery, investment-cycle, schumpeterian-innovation

> The economists at the finance ministry have ended their new monthly review of the Indian economy with a bold statement, that the stage is now set for the Indian investment cycle to get a kickstart. The subtext in this statement is that the splendid econ..

**Summary:**

India's splendid post-pandemic economic recovery, led by profits and large firms, requires a private investment revival for sustainability, as the current downturn—nearly a decade long—has depressed potential growth and exceeds the typical 12-quarter cycle identified in a 2018 RBI paper. Preconditions are aligning: capacity utilization, at 15 percentage points below the investment trigger in Q1 FY22, is likely improving; corporate deleveraging enables capex from cash flows; financial conditions remain easy despite debates on negative real rates; and non-bank funding sources are robust. However, risks from pandemic disruptions or global tightening loom, and household savings may normalize amid reduced international flows. Government capex must continue for 6-8 quarters to build private momentum, as the investment-to-GDP rate lingers 6 points below its 2007 peak. The author contrasts cyclical Keynesian investment (tied to output gaps) with potential Schumpeterian creative destruction from structural shifts to a digital, decarbonized economy post-exogenous shocks like COVID, promising new entrants in EVs and supply chains.

**Key points:**

- India's private investment downturn has lasted nearly a decade, far longer than the typical 12-quarter cycle per RBI analysis.
- Capacity utilization remains 15 points below the capex trigger but is improving, with deleveraged firms poised to invest from cash flows.
- Government must sustain heavy investment for 6-8 quarters to ignite private capex amid easy financial conditions.
- Future growth may stem from Schumpeterian shifts to digital and decarbonized investments rather than just cyclical recovery.

**By Niranjan Rajadhyaksha**

* * *

The economists at the finance ministry have ended their new monthly review of the Indian economy with a bold statement, that the stage is now set for the Indian investment cycle to get a kickstart. The subtext in this statement is that the splendid economic recovery we have seen in recent months will need an investment revival to become sustainable. Preconditions for a revival in private-sector spending on new capacity seem to be in place, but there are still obstacles to be overcome. This column had said in October 2018 that the Indian investment cycle had begun to turn. We now know how that episode of crystal ball gazing went!

India has seen the longest period of weak investment activity in several decades. Economists at the Reserve Bank of India (RBI) had shown in a 2018 paper that the typical Indian investment cycle lasts for 12 quarters—with seven quarters of a rising investment rate followed by five quarters of an investment downturn (India’s Investment Cycle: An Empirical Investigation by Janak Raj, Satyananda Sahoo and Shiv Shankar, Reserve Bank of India working paper). The magnitude of Indian investment downturns has lengthened after the 1991 reforms, but the current one is a clear outlier. It is now close to a decade since private-sector investment fell off a cliff. The fall in the investment rate has led to a decline in potential growth, or the rate at which the Indian economy can expand without lighting an inflationary fire.

The private-sector investment cycle in India is sensitive to many other economic variables, among them capacity utilization, corporate leverage, real interest rates, domestic financial savings, global growth and government policy. How does each of these variables look as the second year of the pandemic draws to an end? The economic recovery has been led by profits rather than wages and by large firms rather than small enterprises.

Companies will build new capacity only once they are convinced that the current demand recovery is sustainable. Data from RBI shows that Indian companies still had ample excess capacity in the first quarter of the ongoing fiscal year, and capacity utilization was still around 15 percentage points below what is usually considered a trigger for higher capital spending by companies. However, it is quite likely that capacity utilization has improved since then. Companies are also in a better financial position to invest in new capacity. The deleveraging over the past four years makes it more likely that cash flows will be used to buy machines rather than repay excess debt.

Financial conditions are also easy, though it is likely that they will tighten next year as central banks withdraw some monetary stimulus. The October meeting of the monetary policy committee had a surprise focus on real interest rates. Ashima Goyal and Jayant Varma argued in their comments that the Indian central bank should keep nominal interest rates below the rate of inflation for some more time, while Mridul Saggar said that negative real interest rates had to be corrected for savers.

An extended period of negative real interest rates could affect the financial savings of Indian households, which have anyway normalized after the sharp increase in forced and precautionary savings after the first covid lockdown in the middle of 2020. This could happen at a time when international capital flows could reduce as global central banks battle resurgent inflation. A lot of attention is focused on weak growth in bank credit, though this is now less of a worry as nearly half the funding for large companies comes from money markets, bond markets, stock markets and private equity allocations. Also, bank credit can sometimes be a lagging rather than leading indicator of economic growth.

Preconditions for a revival in the private capital expenditure cycle are in place, though risks from further disruptions from the pandemic or a sharp tightening of global financial conditions cannot be ignored. The government has been doing most of the heavy lifting as far as investment activity goes, and this will need to continue for another six to eight quarters before private-sector capital spending gains enough momentum. There is also an important distinction between a cyclical recovery and a secular shift in investment spending. The investment rate as a proportion of gross domestic product (GDP) is six percentage points lower than its 2007 peak.

Much of the discussion about the private-sector investment cycle tends to focus on the state of existing capacity utilization by existing companies. However, the next decade could also see new investments because of structural shifts towards a digital and decarbonized economy.

History shows that new ways of doing things emerge after large exogenous shocks. So, for example, will the new wave of investments come from traditional car companies making vehicles running on fossil fuel or new firms that will produce electric vehicles? Or some combination of the two? The same question can be asked about their supply chains, and many other parts of the economy.

Let’s call them the Keynesian investment cycle based on output gaps versus the Schumpeterian investment cycle based on creative destruction. This is an issue that this column will return to in the coming weeks.

*This article was originally publish in [The Mint](https://www.spontaneousorder.in/subscribe?) on 17 November 2021.*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Electricity socialism could be the reason for power sector’s crisis in India

Original: https://www.spontaneousorder.in/p/electricity-socialism-could-be-the-reason-for-power-sectors-crisis-in-india

Author: Spontaneous Order

Published: 2021-11-15T15:45:08.000Z

Topics: power-sector, electricity-subsidies, discom-reforms, state-owned-enterprises

> The power sector plays a crucial role in economic growth in a developing country like India. India’s ever-increasing demand for electricity is an indicator of growing market size and rising ambitions. Hence, government policies in this field have a larg

**Summary:**

India's power sector crisis, exemplified by recent coal shortages at thermal plants supplying over 60% of energy needs, stems from 'electricity socialism'—artificially low tariffs imposed by state governments to shield consumers, especially agriculture, from market prices. This triggers a vicious cycle: loss-making state-run Discoms default on payments to GENCOs, which then delay dues to Coal India Limited (CIL) serving 130+ plants, crippling coal replenishment. Subsidy reimbursements are chronically delayed, exacerbating liquidity crunches and underinvestment in infrastructure. Schemes like UDAY, which took over 75% of Discom debts, failed spectacularly, with debts ballooning from Rs 4 lakh crores pre-2016 to Rs 6 lakh crores in FY2022, all funded by taxpayers. From a classical-liberal lens, these interventions distort markets, harm industries reliant on reliable power—like cement, steel with captive plants, semiconductors deterred despite incentives, and future EV infrastructure—stifling GDP growth and jobs. Low tariffs and cross-subsidies protect no one, imposing unseen costs on MSMEs and non-subsidized users via diesel generators. The author urges policymakers to analyze unintended consequences and pursue operational and structural reforms for sustainable benefits.

**Key points:**

- Artificially low tariffs by state-run Discoms create losses, leading to payment defaults up the chain to GENCOs and CIL.
- UDAY scheme failed to fix Discoms, with debts rising from Rs 4 lakh crores in 2016 to Rs 6 lakh crores in FY2022.
- Delayed subsidy reimbursements cause liquidity issues, underinvestment, and unreliable supply, forcing industries to build captive plants.
- Unreliable power deters investments in semiconductors and EV infrastructure, harming economic growth and jobs.
- Policymakers must conduct impact analysis of subsidies and tariffs to design effective structural reforms.

**By Manasa Pidatala**

* * *

The power sector plays a crucial role in economic growth in a developing country like India. India’s ever-increasing demand for electricity is an indicator of growing market size and rising ambitions. Hence, government policies in this field have a large-scale impact ranging from a village household to a global conglomerate in India.

Thermal power meets more than 60% of India’s energy requirement. Coal India Limited (CIL), a Central Government PSU, supplies coal to 130+ thermal power generation plants across various states. The power generated is then transmitted through the grid system before the Power Distribution Companies (Discoms) distribute this power to consumers in their states.

Recently there were many [reports](https://www.livemint.com/economy/coalfired-power-plants-with-less-than-4-day-stock-rise-to-70-as-blackouts-loom-11633963506079.html) on meager coal stocks at thermal power stations. Some reasons for this shortage were unanticipated high demand post-Covid, steep prices of coal imports, and stagnation in coal mining and transport due to heavy rains disrupting the operation of mines.

There was one more factor, according to the [Power Ministry](https://zeenews.india.com/india/ministry-of-power-lists-4-reasons-for-coal-shortage-amid-looming-power-crisis-2401304.html). The state-run power generation companies (GENCOs) did not pay their dues to CIL, and hence it could not replenish its stocks within time. The GENCOs probably would have paid CIL, but they did not receive payments from state-run Discoms as per their power purchase agreements. These Discoms defaulted on their payment to GENCOs due to hefty losses, mainly caused by the mismatch of low and inadequate tariffs and high supply cost. This chain of events is what we call the vicious cycle of *electricity socialism*! 

Most state-run Discoms impose artificially low tariffs because the state governments want to protect the consumers from paying market prices for electricity, an essential good. But these Discoms run into huge losses due to lack of enough revenues, hence they depend on schemes like Ujwal Discom Assurance Yojana (UDAY). UDAY’s key feature was to reduce the AT&C losses of Discoms through takeover of 75% of their debts by their respective states. However, as long as the revenue earning models of Discoms remain unchanged, such schemes fail to bring any significant and sustainable improvement in the operation of Discoms. [ICRA](https://www.icraresearch.in/research/ViewResearchReport/3567), a credit rating agency, reported that the debt levels of Discoms are likely to go up to Rs 6 lakh crores in FY 2022 compared to the Rs 4 lakh crores during pre-implementation of the UDAY scheme in 2016. Ironically, these schemes with minimal or no impact get funded by the taxpayers’ money, whom the low tariffs intended to protect in the first place.

State governments intend to protect sectors like agriculture through power subsidies. Discoms provide electricity to the consumers in such cases and then get reimbursed by the government for these subsidies later. Often, these payments get [delayed](https://www.niti.gov.in/sites/default/files/2021-08/Electricity-Distribution-Report_030821.pdf) and cause a liquidity crunch for Discoms, leading to underinvestment in long-term infrastructure development. This, in turn, limits the reliability of uninterrupted power supply, increasing the dependence on diesel-powered generators, which also burns a hole in the pockets of non-subsidized non-rich consumers and industries, especially in MSMEs like textiles and auto ancillaries. 

A continuous power supply is a crucial factor for a country’s industrial development. Many cement and steel plants in India have [captive power plants](https://cef.ceew.in/masterclass/explains/captive-power-generation) to ensure constant power supply and reduce costs of high industrial tariffs. In case of a more reliable electricity supply by the state, these industries could have focused their investments and efforts on their core competencies leading to better outputs and more jobs. 

The Indian government attempted to attract foreign companies to set up [semiconductor manufacturing units](https://www.cnbctv18.com/technology/indias-big-dreams-of-semiconductor-manufacturing-and-the-challenges-that-lie-ahead-10991262.htm) in India through customs duty waivers in 2017 and through an [Expression of Interest](https://www.meity.gov.in/writereaddata/files/EoI_Semiconductor_FAB_dated-15122020.pdf) in 2020. Though India is one of the largest chip markets globally, not a single semiconductor industry showed interest in setting up its unit in India, owing to a [lack of uninterrupted and reliable power supply](https://www.business-standard.com/article/economy-policy/india-wants-to-the-next-taiwan-in-chip-making-but-its-dream-is-misguided-121100400082_1.html). India aims to become a global leader in Electric Vehicle(EV) manufacturing and replace diesel vehicles with a massive fleet of EVs. But unless the Transmission Grid Companies and Discoms can invest in building their capacities to meet the development and maintenance needs of [EV charging infrastructure](https://www.niti.gov.in/sites/default/files/2021-08/HandbookforEVChargingInfrastructureImplementation081221.pdf), there would be volatility in power demand and the grid stability. Hence, the subsidized power is not subsidizing either regular or industrial consumers, and low tariffs are not really protecting anyone. In other words, the GDP that did not increase and the jobs that did not get created are the unseen effects of cross-subsidies, artificial tariffs, and the inefficiencies of India’s power sector.

The current coal crisis might not turn into a major power crisis. Still, it certainly brought attention once again to the fragility of the power sector. Though some policies and schemes appear to support the average poor consumer, the policymakers should monitor their actual outcomes carefully to understand their unintended consequences. When the operational and structural reforms are formulated based on such impact analysis, they are more likely to achieve the intended benefits.

*This article was originally publish in [The Print](https://www.spontaneousorder.in/subscribe?) on 13 November 2021.*

* * *

**About Manasa Pidatala**

Manasa is a Senior Associate at the Centre for Civil Society. She speaks on Agricultural Policy challenges in India at our epolicy program.

## Realising the Need for Mentorship in Higher Education

Original: https://www.spontaneousorder.in/p/realising-the-need-for-mentorship-in-higher-education

Author: Spontaneous Order

Published: 2021-11-08T15:02:57.000Z

Topics: higher-education, employability, mentorship, nep-2020

> Gone are the days where one’s educational qualification could land them a steady, well-paying job. According to the Report on the Fifth Annual Employment-Unemployment Survey 2015-16, a positive correlation was seen between unemployment rates and incre..

**Summary:**

India's educated youth face rising unemployment, with the Fifth Annual Employment-Unemployment Survey 2015-16 showing a positive correlation between education levels and joblessness, as graduates struggle to match market demands for tech-driven skills. While 85% of candidates seek internships for experience per the India Skills Report 2020, and 94% view apprenticeships as boosting employability, these opportunities often fall short due to inadequate training, heavy workloads, short durations, low industry participation, and implementation bottlenecks. The author argues for a government-mandated mentorship system in higher education to guide job-seekers, citing surveys like Springboard's (87.9% report career catalysis) and others affirming mentorship's role for 79% of millennials. Leveraging NEP 2020's Institution Development Plan, HEIs should implement mentorship via consultations with stakeholders, assigning faculty and industry mentors to student cohorts, fostering industry-academic linkages, and providing support for disadvantaged groups. This systemic guidance would help identify skill gaps, prioritize in-demand tech skills, clarify career paths, and enhance employability in a competitive market, making mentorship a core policy component.

**Key points:**

- Rising educated unemployment in India demands evaluation of job market needs favoring tech skills, where internships and apprenticeships often fail due to poor quality and low uptake.
- Effective mentorship, valued by 87.9% of professionals per surveys, enables skill prioritization, career clarity, and informed internship choices.
- Integrate mentorship into NEP 2020's IDP through stakeholder consultations, faculty-industry mentor cohorts in HEIs, and industry partnerships to boost employability.

**By Manav Lal**

* * *

Gone are the days where one’s educational qualification could land them a steady,  well-paying job. According to the [Report on the Fifth Annual Employment-Unemployment Survey 2015-16](http://labourbureaunew.gov.in/usercontent/eus_5th_1.pdf), a  positive correlation was seen between unemployment rates and increased levels of education among the youth in India. The survey also suggested that graduates could not find work in accordance with their educational experience and salary expectations. Such statistics point to the need for evaluating the requirements of the Indian job market – which indicate an increasing preference for [tech-driven](https://indiaeducationforum.org/pdf/ISR-2021.pdf) skill sets. To meet the demands of a dynamic and competitive job-market, [upskilling](https://www.financialexpress.com/brandwagon/upskilling-apps-tap-into-indias-white-collar-workforce/2253095/#:~:text=The%20job%20market%20crisis%20heightened,to%20switch%20occupations%20by%202030.) has become critical for freshers to gain entry-level jobs.    

Internships and government-mandated apprenticeship schemes have a pivotal role to play in skill building, and improving employability of job-seekers. According to the [India Skills Report 2020](https://wheebox.com/assets/pdf/ISR_Report_2020.pdf), about  85% of the candidates surveyed sought internships for gaining work experience and acquiring new skills, and 94% believed that apprenticeship opportunities improved their employability to a great extent.

While the prospects of such opportunities seem encouraging, they may not always have a catalytic effect on enhancing the overall employability quotient of job seekers. Effective training, exposure,  balanced workload,  and the presence of a conducive learning environment are [crucial](https://science.thewire.in/education/india-internship-policy-student-workforce-employability-exploitation-social-damage/) for reaping the benefits of such opportunities.

However, due to the absence of a uniform regulatory mechanism that mandates industry-centric training for interns, the [quality](https://science.thewire.in/education/india-internship-policy-student-workforce-employability-exploitation-social-damage/) of learning for incoming candidates is not as promising . Evidence from a [study](https://www.researchgate.net/publication/338430452_PROBLEMS_FACED_BY_ENGINEERING_STUDENTS_ON_INTERNSHIP_TRAINING_PROGRAM) conducted by two post-doctoral candidates in Tamil Nadu, corroborates such facts; undergraduate engineering students surveyed complained about the lack of adequate exposure due to the limited duration of their internship, and also expressed reservations regarding the workload and inflexible timings. 

As far as apprenticeships are concerned, there is a [minor](https://wheebox.com/static/wheebox_pdf/india-skills-report-2018.pdf) fraction of organisations that have registered for the scheme. There is also limited awareness about the policy among job-seekers. Additionally, [implementation bottlenecks](http://www.isec.ac.in/WP%20440%20-%20K%20Gayithri,%20Malini%20L%20T%20and%20D%20Rajasekhar%20-%20Final.pdf) of apprenticeship policies continue to produce sluggish outcomes for all stakeholders involved.

The lack of exposure and hands-on learning through work opportunities deters the ability of graduates to enhance their employability quotient. When internships and apprenticeship opportunities do not prove useful, what should job-seekers rely on to gain employment? 

**The Role of Mentorship** 

Developing a government mandated mentorship system, would be an effective method to help job-seekers deal with [road blocks](https://www.forbes.com/sites/forbescommunicationscouncil/2020/02/24/what-makes-a-great-mentor-and-the-importance-of-having-one/?sh=12c6f077556f) at early stages in their career. While job-seekers must do a majority of the heavy lifting, there is a need to formulate a systemic guidance mechanism that helps them navigate through the ups and downs of their careers, in a comprehensive manner.

According to a [Springboard survey](https://economictimes.indiatimes.com/news/company/corporate-trends/six-in-10-professionals-prefer-to-take-an-upskilling-programme-that-gives-them-access-to-a-mentor-survey/articleshow/76686060.cms), 87.9% of the respondents felt that effective mentorship has had a catalytic effect on their career. Additionally, [79% of millennials](https://www.huffpost.com/entry/four-key-benefits-of-work_b_9432716?guccounter=1&guce_referrer=aHR0cHM6Ly90aGVuZXh0d2ViLmNvbS9jb250cmlidXRvcnMvMjAxNy8wOS8wNy9tZW50b3JpbmctcHJvZ3JhbXMtcmlzZS1oZXJlcy8&guce_referrer_sig=AQAAAC94rnlEtqsAsGOJNZbL3FWwKDL80R3EbDl5T_HEw4RlK1jn7w3i3JdG2toz4fQl1WBZAd4eVCuJ1S9y8s8_rxCAFX7w7laXXZGxI3GLmYHts7bxDlIhoZUwI9OSBpcwHfPZaxv5GKhQp6mkX5eGSoQELVp_1tHl7bRx5sgJPjiI) feel that mentorship plays a critical role in enabling a successful career, and employees part of a [Gartner study](https://www.gartner.com/en/documents/3981575/boosting-the-impact-of-mentoring) shared similar views.

Roping in industry professionals and institutional faculty for the purpose of mentorship, will help candidates gain a [holistic](https://www.indiatoday.in/education-today/featurephilia/story/why-is-mentoring-important-in-education-1676137-2020-05-11) perspective about the job-market. To begin with, candidates could utilise mentorship sessions to identify personal lacunae, and also assess which work opportunities they can target to maximise their learning, improve and gain relevant experience.

Secondly, mentors could advise students to prioritise and focus on skill sets that could give them a competitive edge while applying for jobs. The [India Skills Report 2021](https://indiaeducationforum.org/pdf/ISR-2021.pdf), outlined the need for developing more tech-driven skill sets among its labour force; mentors could advise students to choose skilling programs that are popular among recruiters on a priority basis. This would further help students in their decision making process about which skills to pick and prioritise.         

Comprehensive guidance about internship selection and skill building will help candidates make an informed choice about their career trajectory. As per the India Skills Report 2020, 40% of the students felt that they lacked clarity about their career decisions owing to information ambiguity and overload. Clarity about career choice can also help candidates gauge if they ought to make a career switch; direction provided by mentors could help make this transition smoother. 

**Incorporating Mentorship in Education Policy**

The National Education Policy (NEP) 2020, developed under the able leadership of Dr. Kasturirangan,  could serve as a pivot to formulate a full-fledged mentorship system for Higher Education Institutions (HEIs). 

The NEP 2020 calls for the formulation of an [Institution Development Plan](https://www.education.gov.in/sites/upload_files/mhrd/files/NEP_Final_English_0.pdf) (IDP) to promote holistic growth and learning for students. Expanding the ambit of this plan to facilitate mentorship- HEIs could be directed to devise a system which demarcates the method of mentoring, and responsibilities for industry professionals, and institutional faculty towards students. 

The following measures could be adopted for implementing the policy: 

1.  Begin with consultation: To develop a comprehensive mentorship mechanism, an extensive consultation process that gauges the requirements of students, faculty and job-providers should be a starting point.  A Central Ad-hoc committee could be instituted for implementing the consultation process; the committee would be responsible to coordinate with state governments to assess requirements of local HEIs, students and industry professionals.  This would help spur momentum from all fronts rather than relying on a single actor to fulfil their end of the bargain. The outcome of such a process could further help in identifying what each stakeholder’s role would be as far as mentorship is concerned.
    

2.  Demarcate role of Institutions: Each institute could form a cohort of students allotted to faculty members and industry professionals (who act as faculty and industry mentors respectively) to enable efficient and constructive career-centric discussions. HEIs that lack the wherewithal to develop such a framework independently should be given the opportunity to work with the government and leaders from various sectors to devise an operational system. Additionally, for students from socio-economically disadvantaged groups, the respective institution should also incorporate high quality support centres (as specified in NEP 2020) to guide students in tandem with faculty and industry mentors.  
    

3.   Specify role of job-providers: As part of the policy’s efforts to boost industry-academic linkages, each university, depending on their domain of specialisation, could be provided a list of local corporate partners for collaborations. The role of the corporate partners with respect to mentorship should be based on an amicable understanding between HEIs and chosen professionals (industry mentors). Respective professionals/industry mentors can engage with students and faculty during cohort based interactions to help students attain clarity.   
    

In sum, the harrowing status of employability in the country is a case in point to realise why India needs a mentorship system. While upskilling and gaining relevant work experience is important, there is a requirement of a systemic thrust that helps candidates navigate their career paths. Mentorship needs to become an integral component of  policy making, and the NEP 2020 presents a window of opportunity to do just that.

*Read more: [India’s Impending Energy Crisis](https://spontaneousorder.in/indias-impending-energy-crisis/)*

* * *

**About Manav Lal**

Manav Lal graduated this summer from FLAME University, Pune, pursuing Economics and Public Policy. He is currently interning with the ASEAN Youth Organisation India in the Economic Enhancement department.

## India’s Impending Energy Crisis

Original: https://www.spontaneousorder.in/p/indias-impending-energy-crisis

Author: Spontaneous Order

Published: 2021-11-02T10:55:28.000Z

Topics: energy-crisis, coal-shortage, power-sector, renewable-energy

> The global energy crisis reminds us of the world’s continued reliance on fossil fuels for energy generation, despite efforts to move to renewable energy. International coal prices are increasing as a result of both an increase in demand and a disruption

**Summary:**

India faces an impending energy crisis due to acute coal shortages at thermal power plants, where inventories have plummeted to an average of four days' supply against the required 30 days, triggered by monsoon flooding in coalfields, global coal price spikes from Rs 5,000 to Rs 15,000 per tonne, and power plants' failure to stockpile amid supply chain disruptions and budgetary constraints. Post-COVID economic recovery has driven electricity demand beyond 4 billion units daily—an 18% rise in coal usage since 2019—exacerbated by 28.2 million new household connections. Northern and eastern states like Punjab, Rajasthan, Gujarat, Maharashtra, Uttar Pradesh, and Bihar report power deficits of 2.3% to 14.7%, with industries such as five paper mills in Vapi shutting down, idling thousands of workers. Imported coal generation has dropped 43.6% versus 2019, adding 17.4 million tonnes to domestic demand. Government responses include warning states against profiteering on power exchanges (where prices hit Rs 19/unit from Rs 3-4), allowing captive miners to sell 50% of output to plants, and directing Coal India Limited (supplying 80% of needs) to prioritize power sector deliveries while halting non-power supplies and e-auctions. Amid slowing fossil fuel investments and insufficient renewable scaling, the author urges accelerating green energy spending to avert derailing economic recovery.

**Key points:**

- Coal inventories at Indian thermal power plants have fallen to four days' supply versus the 30-day norm due to monsoons, global price hikes, and inadequate stockpiling.
- Electricity demand exceeds 4 billion units daily with 18% higher coal use than 2019, causing deficits up to 14.7% in states like Punjab and Rajasthan, and shutdowns at industries like Gujarat's paper mills.
- Imported coal power generation declined 43.6% from 2019 levels, boosting domestic coal demand by 17.4 million tonnes from April to September 2021.
- Government directs states to avoid selling unallocated central power at high exchange prices, allows captive miners to supply 50% coal to plants, and prioritizes Coal India deliveries to power sector.
- Accelerate investments in renewables, as green energy expansion lags behind fossil fuel decline, risking repeated crises during economic recovery.

**By V. P. Vivek Das**

* * *

The global energy crisis reminds us of the world’s continued reliance on fossil fuels for energy generation, despite efforts to move to renewable energy. International coal prices are increasing as a result of both an increase in demand and a disruption in supply. As India’s economy recovers from the fatal second wave of COVID-19, industries have resumed operations, resulting in a [major rise in electricity consumption](https://indianexpress.com/article/india/india-staring-at-power-crisis-after-rains-hit-coal-movement-generation-at-pvt-plants-down-7562764/) in the country. In contrast, Indian thermal power plants are suffering from a severe coal shortage, with coal inventories falling to an [average of four days](https://indianexpress.com/article/explained/india-coal-shortage-explained-7555184/) of fuel versus the required inventory level of thirty days. This supply shortage is caused by a combination of reasons such as severe rains in coal mines, increased worldwide coal prices, and a lack of coal inventories in power plants.

In India, protracted monsoons caused [flooding in the central and eastern coalfields](https://www.ndtv.com/india-news/coal-minister-pralhad-joshi-says-flooding-due-to-monsoon-led-to-coal-shortage-at-powr-plants-2575324), reducing coal output and delaying coal delivery to power plants. Despite the fact that power plants are required to have an inventory of [15 to 22 days](https://www.sentinelassam.com/editorial/current-power-crisis-in-india-559681), they failed to stock coal owing to supply chain challenges and budgetary restrictions. Given the global crunch, the price of imported coal has increased to [Rs 15,000](https://indianexpress.com/article/cities/surat/coal-shortage-five-paper-mills-temporarily-shut-in-vapi-7580604/) per tonne from Rs 5,000 per tonne a month ago. Additionally, analysts predict that the price would rise to Rs 20,000. Formerly, power stations had a 90-day credit term from the date of purchase, but dealers are now taking advantage of the situation and demanding advance payments. Even Tata Power, which promised to deliver power from its imported coal-based plant in Mundra to Gujarat (1850MW), Punjab (475MW), Rajasthan (380MW), Maharashtra (769MW), and Haryana (380MW), halted production due to high import coal prices. The rise in price of imported coal has reduced reliance on imported coal, and a shift to domestic coal has occurred. In comparison to 2019, there has been a [43.6%](https://www.sentinelassam.com/editorial/current-power-crisis-in-india-559681) decrease in power generation from imported coal, resulting in an additional demand of [17.4 million](https://indianexpress.com/article/india/india-staring-at-power-crisis-after-rains-hit-coal-movement-generation-at-pvt-plants-down-7562764/) tonnes of coal from April to September 2021, which has been supplied solely by Indian coal.

Globally, since power firms cannot readily obtain coal, they have [shifted to oil, raising the price of crude oil](https://www.livemint.com/market/commodities/five-reasons-why-global-oil-prices-have-jumped-to-3-year-high-11633953731294.html), which in turn has boosted the price of petrol and diesel in India. Energy has become a rare commodity, with the IEX (Indian Energy Exchange) bid presently reaching Rs 19 per unit, up from [Rs 3 – Rs 4](https://www.sentinelassam.com/editorial/current-power-crisis-in-india-559681) per unit three months ago. Simultaneously, India’s daily electricity demand has surpassed [4 billion units](https://www.livemint.com/industry/energy/india-considering-strategic-reserve-for-imported-coal-to-tackle-power-shortage-11634797344688.html), leading to an 18% increase in coal usage as of September 2021, compared to the same period in 2019. Furthermore, during the pandemic, the government electrified [28.2 million](https://indianexpress.com/article/explained/india-coal-shortage-explained-7555184/) households, and these families will be purchasing lights, fans, and television sets shortly, resulting in a rise in electricity consumption. 

With intermittent power disruptions, the northern and eastern regions have already begun to feel the effects of the coal crisis. The worst affected states include Punjab, Rajasthan, Gujarat, Maharashtra, Uttar Pradesh, and Bihar, with power deficits ranging from 2.3% to 14.7%. Even the southern states are experiencing coal shortages, and power disruptions are likely in the near future. Andhra Pradesh Chief Minister YS Jagan Mohan Reddy has [asked the Centre to take immediate action](https://www.newindianexpress.com/states/andhra-pradesh/2021/oct/09/help-tide-over-energy-crisis-andhra-pradesh-cmsends-sos-to-pm-2369578.html), claiming that additional water is needed in the last stages of the harvesting season and that any unscheduled power outages would be disastrous for farmers. Furthermore, companies that rely on coal as a fuel source have been severely impacted. For example, five paper mills in Vapi, Gujarat, have shut down owing to insufficient coal supplies in recent weeks, leaving thousands of workers jobless. Several other paper mills are fighting to stay afloat. In these mills, coal is utilised in the boiler to produce steam, which is then used to dry the wet paper. Moreover, it would be fair to assume that work-from-home setups, relied on by many firms due to the pandemic, would face disruptions owing to frequent power outages.

To address the current power crisis, the Government of India has taken various actions and issued directives to state governments, instructing them not to overuse electricity or take undue advantage of it. The Ministry of Power has [warned states](https://www.livemint.com/industry/energy/coal-crisis-centre-warns-states-against-selling-power-at-high-price-on-exchange-11634025610990.html) that if their utilities are caught selling power on exchanges to profit from rising prices, federal power providers would reduce supply to them. The Centre has advised all states and UTs to use unallocated electricity from central generating stations (CGS) to satisfy the needs of their own customers rather than imposing load shedding or selling it on power exchanges at higher prices. Typically, [15%](https://www.sentinelassam.com/editorial/current-power-crisis-in-india-559681) of the central sector’s electricity is retained as unallocated power, which is then dispersed among states according to predetermined formulae. To make up for the shortage, the government has allowed private or captive miners to sell 50% of their coal to power plants. The CIL (Coal India Limited), which supplies 80 percent of the country’s coal needs, is instructed to increase coal production and prioritise coal delivery to power plants. The CIL has temporarily halted the delivery of coal to non-power companies. In addition, CIL has urged its subsidiaries and other collieries to prioritise coal shipment to power plants and has requested that E-auctions be avoided.

Coal scarcity is a serious concern since it impacts electricity supply, which is the foundation of all economic activities. Furthermore, India is in a transition period as it recovers from the pandemic-induced recession. If the coal situation is not handled properly, the economic recovery will be significantly delayed. While investments in fossil fuels are dropping as part of climate change mitigation, [green energy spending is not expanding fast enough to bridge the energy gap](https://www.wsj.com/articles/energy-crisis-fossil-fuel-investment-renewables-gas-oil-prices-coal-wind-solar-hydro-power-grid-11634497531). As a result, investments in renewables must be accelerated in order to avoid a similar crisis in the future.

* * *

**About V. P. Vivek Das**

Vivek is an experienced data analyst with excellent problem-solving and critical reasoning abilities. He is currently pursuing MBA in Sustainable Management at IIM Lucknow. He is a Public Policy enthusiastic who has worked with 'Noida Authority' and drafted Solid Waste Management (SWM) policies for the academic institutes in Noida.

## Navigating our economy in a post-pandemic world

Original: https://www.spontaneousorder.in/p/navigating-our-economy-in-a-post-pandemic-world

Author: Spontaneous Order

Published: 2021-10-25T14:07:54.000Z

Topics: pandemic-recovery, india-economy, green-economy, digital-economy

> Economists at the International Monetary Fund (IMF) provide estimates of the future trajectory of the global economy twice a year. The latest set of forecasts are out in the October 2021 edition of the World Economic Outlook. The numbers on India give u..

**Summary:**

The IMF's October 2021 World Economic Outlook reveals lasting pandemic damage to India's economy: 2024 GDP projected at $4.08 trillion, $550 billion below the pre-pandemic October 2019 forecast of $4.63 trillion, signaling permanent output losses and reduced opportunities for ordinary Indians. Emerging markets like India face steeper challenges than developed economies or peers like Vietnam, which is now expected to reach $513 billion in 2024 versus a prior $395 billion estimate. Despite recovery celebrations, India risks a lost decade of slow growth and inflation unless it leverages disruptions for Schumpeterian creative destruction. The IMF outlines four building blocks: reversing human capital erosion from health shocks and school closures; facilitating growth via green technology and digital networks; tackling rising inequality post-uneven recovery; and restoring fiscal sustainability amid high debt. From a classical-liberal lens, the most promising path is policy enabling dual transitions to green (energy, transport, agriculture, cities) and digital economies, building on private telecom expansion and public digital goods to spur entrepreneurial investment and innovation, while mitigating risks like digital access gaps, monopolies, and privacy issues.

**Key points:**

- IMF forecasts show India's 2024 GDP at $4.08 trillion, over $500 billion below pre-pandemic projections, indicating permanent economic losses.
- Emerging economies like India face greater post-pandemic trajectory deviations than developed nations or outperformers like Vietnam.
- Reverse human capital damage and facilitate green/digital transitions to harness creative destruction for productivity gains.
- Address inequality and fiscal burdens to sustain recovery, with policy creating space for entrepreneurial innovation.

**By Niranjan Rajadhyaksha**

* * *

Economists at the International Monetary Fund (IMF) provide estimates of the future trajectory of the global economy twice a year. The latest set of forecasts are out in the October 2021 edition of the World Economic Outlook. The numbers on India give us a good idea of the lasting economic damage done by the pandemic. The precision of economic forecasts is suspect even at the best of times; and more so when there is immense uncertainty. However, these economic forecasts do usually give us a good sense of the general economic trajectory.

The IMF now says that the size of the Indian economy will be $4.08 trillion in 2024. Compare this with the estimate provided in the World Economic Outlook published in October 2019, before the pandemic struck. The multilateral lender then said that it expects the size of the Indian economy to be $4.63 trillion in 2024. This means that the value of economic activity in India will be far lower than what its pre-pandemic trajectory would have suggested. The difference is more than $500 billion.

It is a similar story for earlier years as well. The permanent output losses—and thus loss of economic opportunity for ordinary Indians—is a big setback. This sobering fact should be kept in mind even as we celebrate the smart economic recovery from the depths of recent downturns. The IMF had said in its April 2021 report on the world economy that developed economies are more likely to get back to their earlier economic trajectories, while emerging economies would find the going more difficult. That message has been reiterated in the October 2021 edition of the report. There is likely to be some divergence within emerging markets as well. Some countries such as China, Vietnam and Bangladesh are expected to return to their earlier trend earlier than their peers. The latest estimates suggest that the Vietnamese economy will be larger by around $118 billion compared to what was expected in October 2021—$512.99 billion versus $394.88 billion.

What can turn the tide? The more pessimistic view is that India is headed for a lost decade with slow growth combined with rising inflation. The more optimistic view is that dislocations over the next few years will provide the necessary backdrop for a wave of innovation, just as the decades that followed the destructive world wars saw immense economic buoyancy in many parts of the world. In June 2020, this column had cited an article by macroeconomist Barry Eichengreen in which he had identified three worries as well as one silver lining for the post-pandemic world. The three worries were the suspension of education, weak public investment and supply-chain disruptions. The silver lining was a possibility that the disruption of existing ways of doing things “will open up space for innovative new entrants, through the process that the early 20th century Austrian economist and social theorist Joseph Schumpeter referred to as creative destruction.”

The IMF has pointed to four building blocks to think about the post-pandemic economy. It is an interesting list. First, governments will have to reverse the damage done to human capital because of the health shock as well as the closure of education institutions. Second, public policy will have to facilitate new opportunities for economic growth, especially through green technology and digital networks. Third, countries will have to attack the problem of rising income inequality after the uneven economic recovery. And fourth, public finances will eventually have to be brought back to a sustainable path.

Each country will have to design its own path out of the pandemic. However, these four broad themes are relevant to most economies, and are a good way to frame some of the ongoing policy conundrums. India is no exception. All moves to reopen schools, invest in public health and help migrants come back to cities are welcome in these circumstances. Higher inequality could strangle a sustainable recovery in domestic private-sector demand; the export boom has till now taken pressure off the Indian economy on the demand side. A sharp rise in tax collections has created fiscal space for more spending by the government right now, but the burden of high public debt is likely to persist through this decade.

The most attractive of the four themes is using policy to hasten two structural shifts that can provide the next boost to productivity. The transition to a green economy entails rethinking energy, transport, agriculture and the design of cities. The rapid digitalization of life has been supported by the spread of telecom networks by the private sector and the creation of new digital public goods by the public sector. The risks here come from lack of access to digital networks for the poor, and a growing tendency towards monopoly power and privacy protection. A well-managed dual transition to a green as well as digital economy will provide both an opportunity for new investments by entrepreneurs and new space for creative thinking by policymakers.

*This article was originally published in [Livemint](https://www.livemint.com/opinion/columns/the-post-pandemic-economy-s-contours-have-begun-to-emerge-11634662190185.html)  on 20 October 2021*.

*Read more: [Semi-hope for Semiconductors](https://spontaneousorder.in/semi-hope-for-semiconductors/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Semi-hope for Semiconductors

Original: https://www.spontaneousorder.in/p/semi-hope-for-semiconductors

Author: Spontaneous Order

Published: 2021-10-22T14:47:45.000Z

Topics: semiconductors, chip-shortage, government-subsidies, indian-industrial-policy

> The usual fanfare around festival discounts for automobiles and electronic gadgets seems relatively mellow this year. Reason: the semiconductor crisis. But why deem it a crisis? The spill-over has affected a significant number of industries, their conse..

**Summary:**

The global semiconductor shortage, projected by Gartner to persist until mid-2022, stems from a demand-supply mismatch triggered by the pandemic: auto demand plummeted while laptop and tablet demand surged 200% and 90% respectively, prompting manufacturers to reprioritize. This disrupted industries, with Maruti Suzuki slashing production by 60% and Hyundai sales dropping 34.2% in September 2021. Semiconductor production takes 26 weeks, amplifying vulnerabilities. Private innovation shines as tech giants like Apple (M1 processor), Tesla, and Baidu develop custom chips to bypass shortages. Asia dominates with 60% of global sales, led by South Korea (19%), Taiwan (6%), China (5%), and Japan (5%), while the US holds 47% revenue. Governments are subsidizing aggressively: Taiwan covers half of land/construction and 25% equipment costs; China plans $200 billion by 2025; the US $52 billion. In India, high R&D costs and policy inconsistency deter investors, but classical-liberals advocate starting with ATMPs (Assembly, Testing, Marking, Packaging) to attract firms like Intel and Samsung, alongside MeitY's SPECS offering 25% capital incentives and a potential $7.5 billion Taiwan deal for self-reliance. Global knowledge-sharing is essential to resolve the crisis without perpetuating distortions.

**Key points:**

- Pandemic-driven demand shift from automobiles to electronics caused manufacturers to deprioritize auto chips, leading to shortages.
- Tech firms like Apple and Tesla are innovating custom semiconductors to evade mass shortages.
- Governments worldwide, including US ($52B), China ($200B by 2025), and Taiwan, are heavily subsidizing chip production.
- India should prioritize low-investment ATMP facilities via SPECS incentives (25% capex) and a $7.5B Taiwan deal to enter the sector.

**By Anushka Das Sharma**

* * *

The usual fanfare around festival discounts for automobiles and electronic gadgets seems relatively mellow this year. Reason: the semiconductor crisis. But why deem it a crisis? The spill-over has affected a significant number of industries, their consequent outputs and industry targets. According to a [report by Gartner](https://www.gartner.com/en/newsroom/press-releases/2021-05-12-gartner-says-global-chip-shortage-expected-to-persist-until-second-quarter-of-2022), the global shortage will continue well into mid-2022.

The chip, equivalent to 1/billionth of a meter, carries the world on its tiny shoulders. From smartphones and pacemakers to hypersonic aircraft and electric vehicles, the chip has made sure we know its value. Naturally, the shortage of such an essential piece of the puzzle was bound to throw industries off. Maruti Suzuki [reduced its production](https://www.business-standard.com/article/automobile/semiconductor-shortage-pulls-down-passenger-vehicle-dispatches-in-september-121100101288_1.html) by 60% in September 2021, owing to the chip shortage, thereby extending the waiting period for a 4-wheeler. Hyundai reported a 34.2% decline in sales during the same month.

The shortage has been incoming for some time now. While the pandemic and subsequent lockdowns did affect the supply chains, they weren’t the only cause for this crisis. There’s a simple demand-supply loop at play here. 

In the initial months of the pandemic, the demand for automobiles [plummeted](https://www.business-standard.com/article/companies/covid-19-pandemic-washes-out-6-years-of-growth-in-auto-sales-%E2%80%88siam-data-121041300034_1.html) across the country. The shift from physical offices to a work-from-home set-up added to the need for laptops, computers, servers – the other set of semiconductor dependent products and services. The demand for laptops and tablets [rose to 200% and 90%](https://tech.hindustantimes.com/tech/news/how-covid-19-changed-consumption-of-home-appliances-electronic-devices-in-india-71617189275249.html) (respectively) as per pre and post-lockdown numbers according to the senior marketing members of Flipkart, a leading e-commerce site in India. 

It would be fair to assume that semiconductor manufacturers moved priority from Industry A (Automobiles) to Industry B (Electronics). While this could have helped meet demand temporarily, the crux of the problem remained intact – the impending supply shortage. Given the high demand for semiconductors and the move to digital during the pandemic, the impact of supply shortages made industries especially vulnerable.  

As tiny as it is, the semiconductor demands an extensive R&D process. Further the finished output takes approximately [26 weeks to complete](https://www.semiconductors.org/chipmakers-are-ramping-up-production-to-address-semiconductor-shortage-heres-why-that-takes-time/). The global crunch has reinforced that necessity is the month of all innovation. Tech giants, like Amazon, Tesla, Apple are now focusing on [niche semiconductor chips](https://www.cnbc.com/2021/09/06/why-tesla-apple-google-and-facebook-are-designing-their-own-chips.html) – ones that are specific to their products and services, thereby avoiding the mass shortage as much as possible.

Apple has already moved towards its own M1 processor, Tesla and Baidu are investing in AI chips to improve the autonomous driving experience.

A [Deloitte analysis](https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/technology-media-telecommunications/cn-tmt-rise-of-the-big-4-en-082820.pdf) identified the “Big 4” in the Asia Pacific. The region is the world’s biggest semiconductor market, accounting for 60% of global sales. The “Big 4” include South Korea (19%), Taiwan (6%), China (5%) and Japan (5%). Across the Pacific, the US leads the list with a 47% overall semiconductor revenue.

With a surge in demand for these chips, the semiconductor industry is the latest addition to the subsidy lists of governments. In Taiwan, a dominant producer in the market, the government covers almost half of the land and construction costs and 25% of the equipment costs. In China, the government aims to spend $200 bn to subsidise the industry by 2025, while the US has issued a bipartisan vote to [invest $52 billion](https://www.washingtonpost.com/technology/2021/06/14/global-subsidies-semiconductors-shortage/) towards the research and production of new chips.

The Indian Chapter

Given the lack of consistent policies and high costs in the R&D stage of semiconductor production, big players are not too keen to invest in India. 

Mr Rajeev Khushu, Chairman, India Electronics and Semiconductor Association has [vouched for ATMPs](https://www.livemint.com/technology/tech-news/indias-journey-in-chip-making-may-start-with-atmps-11623259001571.html) – Assembly, Testing, Marking and Packaging as the first step to luring international companies. These include the likes of Intel and Samsung before going for the big guns. The ATMP facilities will not only help generate employment but also mark India’s entry into the semiconductor sector with relatively less investment, he says.

Meanwhile, the Government of India has been doing some intensive follow-up of its own. The Ministry of Electronics and Information Technology (MeITy) has already drawn up the Scheme for Promotion of manufacturing of Electronic Components and Semiconductors ([SPECS](https://www.meity.gov.in/esdm/SPECS)). According to the scheme, a financial incentive of 25% will be provided for capital expenditure on a list of electronic goods with an identified downstream value chain, which in turn will encourage high-value manufacturing.

India is also aiming for a [$7.5 bn trade deal](https://www.news18.com/news/india/india-taiwan-may-ink-mega-deal-to-set-up-7-5-bn-chip-manufacturing-plant-heres-why-its-global-rescue-4249961.html) with Taiwan, which holds 56% of the foundry business of manufacturing chips. The deal will benefit both India and Taiwan – with the former developing its self-reliance in the industry and the latter building its own diplomatic relations in order to come out of the ever-looming Chinese shadow.

The current crisis requires resource-abundant countries to share their knowledge and expertise with growing economies. To get through a global shortage of this magnitude, every economy has a role to play. Unless that is accommodated, it is going to be a tough road for every player in this supply chain.

*Read more: [Are Human Rights and Environmentalism Opposing Ideas?](https://spontaneousorder.in/are-human-rights-and-environmentalism-opposing-ideas/)*

* * *

**About Anushka Das Sharma**

Anushka Das Sharma is an Associate, Policy Training and Outreach at Centre for Civil Society. Previously, she has worked in Advertising and holds a B.A. Mass Communication from Symbiosis Centre for Media & Communications, Pune. She has a keen interest in international relations, global policy, and history.

## Are Human Rights and Environmentalism Opposing Ideas?

Original: https://www.spontaneousorder.in/p/are-human-rights-and-environmentalism-opposing-ideas

Author: Spontaneous Order

Published: 2021-10-20T14:38:22.000Z

Topics: environmental-justice, forest-rights-act, indian-forest-act, rights-based-conservation

> The recently published IPCC Sixth Assessment Report is a scathing reminder of the extent to which climate change has altered the ecological as well as the socio-economic balance of the earth. The report’s publication was followed by renewed demands by c

**Summary:**

The IPCC Sixth Assessment Report underscores climate change's impacts, prompting calls for action that must balance environmental conservation with human rights. The author argues that modern environmentalism should adopt a rights-based approach, as endorsed by the IUCN since the 1990s, promoting 'conservation with justice' by securing substantive rights like land tenure and procedural rights like free prior informed consent for local communities and indigenous groups. This empowers communities as stewards rather than relying on bureaucratic control that extinguishes rights. In India, the colonial Indian Forest Act, 1927 violates these principles by allowing state governments to reserve forests over lands with unsettled customary claims, creating 'section 4 forests' where settlements drag on for up to 53 years, labeling dwellers as encroachers. The Forest Rights Act, 2006 counters this by recognizing community rights but conflicts with the IFA due to administrative overlaps and contradictions. From a classical-liberal viewpoint, states should facilitate community rights to complement conservation, not impose top-down restrictions. The conclusion calls for overhauling the IFA to align with FRA provisions and rights-based principles, ensuring just environmental policies.

**Key points:**

- Adopt rights-based conservation approaches that secure land tenure and procedural rights for communities to enable effective stewardship.
- India's Indian Forest Act, 1927 violates human rights by reserving forests without settling customary claims, leading to decades-long delays like 53 years in Andhra Pradesh.
- The Forest Rights Act, 2006 promotes community rights but requires repealing conflicting IFA provisions.
- Overhaul the Indian Forest Act to align with FRA and IUCN's 'conservation with justice' framework.

**By Mohammad Anas Khan**

* * *

The recently published [IPCC Sixth Assessment Report](https://www.ipcc.ch/report/ar6/wg1/) is a scathing reminder of the extent to which climate change has altered the ecological as well as the socio-economic balance of the earth. The report’s publication was followed by renewed demands by civil society groups, environmental activists and concerned world citizens for serious action towards mitigating climate change effects. In light of these events, it is pertinent to assess the role played by science in informing public policy decisions and whether good intentioned science-based conservation policies may actually end up violating human rights.

Environmental conservation is a complex issue confined not just to the natural environment. Questions pertaining to livelihoods, land & tenure rights, economic opportunities and the corresponding trade-offs to be made, assume significance in deciding and mapping out conservation policies. 

The growing human rights movement, coupled with an assertion by indigenous groups, forest dwellers and local communities, has led to a re-assessment of modern day environmentalism. Can States and bureaucracies manage the environment better with an extended set of rules? Will tenure and resource rights for local communities help improve environmental health? The answers to these questions determine the course which environmental conservation takes. The right to a clean and safe environment has been recognised as a fundamental right within many Constitutions in the world. While exercising its obligation under the Constitutional mandate, the States’ role of enforcing and protecting this right depends on institutions through which it exercises this role of a protector.

There are two ways through which States can choose to act : 1) Assuming the role of protection through legislations which substantially limit or altogether extinguish existing rights of local communities/individuals. 2) Facilitating an approach where the rights of local communities and resource user groups do not hinder but complement conservation efforts. In the former case, bureaucracies manage the health of the natural environment and in the latter case, it’s the people. 

**Conservation With Justice** 

The United States Environmental Protection Agency [defines](https://www.epa.gov/environmentaljustice) environmental justice as “fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation and enforcement of environmental laws, regulations and policies. Fair treatment means no group of people should bear a disproportionate share of the negative environmental consequences resulting from industrial, governmental and commercial operations or policies.” The idea of environmental justice started as a social movement decrying the disproportionate impact of environmental hazards on marginalised groups. For example, a waste dumping ground or waste management site located in a marginalised neighbourhood exposes the community to immediate harm, and is an example of unequal access to the right to a clean environment. However, environmental justice is not confined merely to the issue of equitable distribution of burden.  Environmental justice is also about a just and humane approach towards those impacted by governmental legislations/diktats intended to mitigate environmental degradation. Fishing bans to conserve marine habitat or banning agriculture/grazing in protected forest areas, often leads to loss of livelihoods and violates user rights of (often marginalised) local communities. An approach that seeks to protect these fundamental rights and at the same time encourage conservation is not just humane but also makes economic sense. 

The IUCN since the 1990s has routinely emphasised the importance of frameworks and institutions which link human rights protection to conservation. The rights-based approach is an approach to conservation that respects, and seeks to protect and promote, recognized human rights standards. The IUCN Environmental Law Centre [links](https://www.iucn.org/sites/dev/files/content/documents/iucn_rba_systematization_compiled.pdf) rights-based approaches to IUCN’s mission, highlighting that a rights-based approach enables and promotes “conservation with justice.” They note that: “Conservation with justice means that all State and non-State actors planning or engaged in policies, projects, programmes, and activities with potential impact on nature conservation shall secure to all potentially affected persons the substantive and procedural rights that are guaranteed by national and international law. Substantive rights include, among many, the right to land and natural resources, right of indigenous peoples, the right to development and equitable benefit sharing etc. Among the procedural rights are the rights to full participation and consultation, the right to free, prior and informed consent (FPIC), the right to an effective and fair grievance system etc. Procedural rights augment and support the realisation of substantive rights. The IUCN’s endorsement of rights-based approaches clarifies two things: 1) environmental conservation policies are unsuccessful without respect and enforcement of human rights 2) Securing tenure/access rights of local communities and indigenous people enables good stewardship of natural resources. While it is understandable that different environmental contexts will require different policy frameworks, it is nevertheless important that some broader principles have to be considered to make conservation a just and humane exercise, respecting the rights of all stakeholders. 

**Are India’s Forest Laws Rights-based ?** 

The primary legislation governing India’s forests is the colonial era [Indian Forest Act, 1927](http://nbaindia.org/uploaded/Biodiversityindia/Legal/3.%20Indian%20forest%20act.pdf) enacted by the Imperial Legislative Assembly. The objective of the Act states that it is “an Act to consolidate the law relating to forests, the transit of forest-produce and the duty leviable on timber and other forest-produce.” The Act bestows upon the State Governments the power to reserve forests on “any forest-land or waste-land which is the property of Government, or over which the Government has proprietary rights, or to the whole or any part of the forest-produce of which the Government is entitled.” The aforementioned provision is violative of the right to land and natural resources as a governing principle of the rights-based approach. Land and tenure rights, including those derived from custom have to be recognised and protected. The power to reserve forests must also be seen from a broader historical lens. The extension of colonial Government sovereignty over forest lands and the erasure of customary rights of forest communities is a historical reality relevant to this discourse. A good chunk of ‘forest land’, over which the Government presumes proprietary rights, are those areas where the claims by forest dwelling communities have continued to exist and remained unsettled. To reserve a forest where ownership transfer happened through legislative coercion violates both the substantive and procedural rights of forest communities. A just approach has to first involve a due process of settling claims of tenure and land rights. 

The Indian Forest Act provides for the appointment of a Forest Settlement Officer (FSO) to ‘settle claims’ over areas to be notified as reserve forests under Section 4 of the Act. This led to what I call the section 4 tyranny – the creation of forest areas called the ‘section 4 forests.’ It is pertinent to note that ‘section 4 forests’ are not a category of forest area recognised under the Indian Forest Act, 1927 but they are a creation of procedural lacunas present within the Act. There is no fixed time within which the Forest Settlement Officer ( FSO) has to settle claims pertaining to forest areas to be notified as ‘reserved forests.’ As long as the claims are not settled in a just and equitable manner, the claimants i.e. forest dwellers continue to remain ‘encroachers’ over Government property. Settlement claims have remained unattended for as long as [53 years or more](https://www.downtoearth.org.in/news/forests/people-s-rights-and-status-of-forest-in-limbo-for-53-years-in-andhra-pradesh-74836), leading to generations of forest dwelling communities to live as ‘encroachers’ on forest lands. Many other similar provisions of the Indian Forest Act, 1927 violate rights-based principles in letter and in spirit. 

The Forest Rights Act, 2006 sought to overturn many of the ills of the Indian Forest Act, 1927 and is in many ways a rights-based legislation. The FRA, 2006 continues to be plagued by an administrative overlap between Central and State Governments as well as between the MoEFCC and the Ministry of Tribal affairs. Moreover, many of the provisions of the Indian Forest Act, 1927 are in direct violation and in contravention of the rights guaranteed under the Forest Rights Act, 2006. Despite such discrepancies, both these Acts continue to exist together, leading to a legislative conundrum. The only way forward is an overhaul of the Indian Forest Act, 1927 to bring it in line with the principles of the rights-based approach and to the provisions of the Forest Rights Act, 2006. 

*Read more: [As Covid wanes, economy back on recovery path](https://spontaneousorder.in/as-covid-wanes-economy-back-on-recovery-path/)*

* * *

**About Mohammad Anas Khan**

Mohammad Anas Khan is a law graduate and is currently working as a Senior Associate with Centre for Civil Society. Anas is an academic enthusiast and has a keen interest in legal theory, public policy and the terracotta approach to environmentalism.

## As Covid wanes, economy back on recovery path

Original: https://www.spontaneousorder.in/p/as-covid-wanes-economy-back-on-recovery-path

Author: Spontaneous Order

Published: 2021-10-18T14:01:47.000Z

Topics: economic-recovery, fiscal-deficit, tax-cuts, privatisation

> This is the time of year when optimistic budget projections usually prove false, tax revenues fall short of expectations, austerity is decreed for government departments, government dues and capital spending are postponed for want of funds, and budgetar..

**Summary:**

India's economy has sharply rebounded from the Covid second wave's April-June lockdowns, with tax revenues surging to 41% of the annual budget estimate in April-August—against 18.3% last year, 30.7% pre-Covid, and a 24-year average of 28%—driving the fiscal deficit down to potentially 5.8% of GDP from the budgeted 6.8% and Fitch's feared 8.3%. Initial GDP growth forecasts were cut to 9.5% by RBI and IMF, but the rapid wave recession (except Kerala) suggests these may prove pessimistic. This buoyancy validates Finance Minister Nirmala Sitharaman's 2019 corporate tax slash from 30% to 22% (15% for new firms without breaks), despite a Rs 145,000 crore initial loss, yielding 16% overall tax growth, 23% in corporate tax, 34% in excise, and 6% in GST versus two years ago. Unlike Arun Jaitley's failed bids to hit 3% deficit amid slowdowns and fudging, current trends show cash balances at Rs 4.5 trillion (2% GDP). Yet challenges loom: high corporate debts risking banks, SME and unorganised sector distress, slow privatization (Air India sold but with $6 billion debt taken over; BPCL, others delayed). A classical-liberal view hails this market-led spurt but calls for reforms to sustain it.

**Key points:**

- Tax revenues reached 41% of annual estimates in April-August, exceeding 24-year average of 28%, fueling fiscal deficit drop to ~5.8% of GDP.
- Corporate tax cuts to 22% proved buoyant with 23% compound annual growth despite initial Rs 145,000 crore loss.
- Economy bounced back post-second Covid wave, potentially exceeding RBI/IMF 9.5% GDP forecasts.
- Persistent risks include corporate debts, SME distress, and stalled privatizations like BPCL and rail services.

**By Swaminathan SA Aiyer**

* * *

This is the time of year when optimistic budget projections usually prove false, tax revenues fall short of expectations, austerity is decreed for government departments, government dues and capital spending are postponed for want of funds, and budgetary fudging of all sorts begins to try and keep the fiscal deficit close to the budget target. But not this year. Thanks to a booming economy, tax revenue has soared beyond all expectations and the fiscal deficit has plummeted.

The economy has recovered sharply from the traumatic April-June quarter, when Covid’s second wave caused lockdowns and shutdowns. At that time the budget projections looked far too optimistic. The RBI cut its GDP growth forecast for the year from 10.5% to 9.5%, and the IMF reduced its forecast from 12.5% to 9.5%.

But then the second Covid wave receded as quickly as it had risen (save in Kerala). Consequently, the economy bounced back so strongly that earlier GDP and budget projections may turn out to be too pessimistic, not too optimistic.

This will help the BJP when five states go to the polls four months hence. GDP growth is not a key determinant of state elections, but a booming economy is always better than a sluggish one for the ruling party.

The budget estimated the fiscal deficit — net borrowing of the government to finance spending — at a high 6.8% of GDP. When the second wave of Covid struck, rating agency Fitch projected a worsening of the fiscal deficit to 8.3% of GDP. But the latest trend suggests it could end up at maybe 5.8% of GDP, a huge saving.

To understand how remarkable the shrinkage is, recall former finance minister Arun Jaitley’s attempts to get the fiscal deficit down to his target of 3% of GDP. He started in his first year with a fiscal deficit of 4.1%, followed by 3.9%, 3.5%, 3.5% and 3.4% in subsequent years. He just could not get the figure down to 3.0% despite fudging to cloak borrowing by government-owned entities and huge arrears of payment to the Food Corporation of India and others. The economy was slowing in those years, and so was revenue.

But right now, the economy has bounced back sharply, and tax revenue with it. In April-August, revenue receipts were a high 41% of the annual estimate against only 18.3% last year (because of Covid) and 30.7% the preceding year, before Covid.

Credit Suisse estimates that the average in the last 24 years was no more than 28%. Earlier we feared that Covid would depress the long-term trend of collection, but no longer. Compared with the pre-Covid period two years ago, total tax revenue has grown at a compound rate of 16% per year, corporate tax at 23%, excise duty at 34%, and GST at 6%.

Tax buoyancy is the key reason why the fiscal deficit in April-August was only 31.1% of the budgeted amount for the year, against a 24-year average of 57%. Hence Central and State cash balances with the RBI have soared to Rs 4.5 trillion (or 2% of GDP).

Nirmala Sitharaman took over as finance minister in 2019 and slashed the peak corporate tax from 30% to 22% (plus surcharge and cess) for existing companies, and further to 15% for new companies that did not avail of other tax breaks.

This meant a huge short-term loss in corporate tax (Rs 145,000 crore). in the hope that improved buoyancy would make up for this later. That optimism looked a stretch at the time, but the latest figures suggest it may be well grounded.

So, is all well? No, there are several problem areas. Covid has deeply scarred many companies, which are saddled with high debts that they are not able to repay. The risk of sick companies dragging down creditor banks continues.

Big companies have greatly improved their profitability this year while many small and medium companies are in serious trouble. Covid has killed many companies and others are bleeding. The problem is worst in the unorganised sector, which has historically been an important employer.

Privatisation and asset sales have been very slow. Air India has finally been privatised, but this entails the government taking over $6 billion of the company’s debt, which will burden the exchequer.

BPCL, Container Corporation and the Shipping Corporation of India have yet to be privatised almost two years after the intention was announced. Faulty bid conditions meant no bids at all were received for running 109 private passenger rail services.

In sum, there is much hard work ahead for the government if the current spurt in growth is to be sustained. But for now, let us welcome the spurt.

*This article was originally published in [The Times of India](https://timesofindia.indiatimes.com/blogs/Swaminomics/as-covid-wanes-economy-back-on-recovery-path/) on 10 October 2021*.

*Read more: [Shackled to the Land](https://spontaneousorder.in/shackled-to-the-land/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Shackled to the Land

Original: https://www.spontaneousorder.in/p/shackled-to-the-land

Author: Spontaneous Order

Published: 2021-10-13T15:33:26.000Z

Topics: agriculture, land-reform, farmer-incomes, economic-freedom

> The recently released National Sample Survey Office (NSSO) survey of agricultural households should concern anyone interested in the wellbeing of India’s farmers. While farmer incomes have risen, from Rs 6,426 in 2012-13 to Rs 10,218 in 2018-19, the dat

**Summary:**

The NSSO survey reveals troubling trends for India's farmers: average monthly incomes rose modestly from Rs 6,426 in 2012-13 to Rs 10,218 in 2018-19, but landholdings shrank from 1.15 hectares to 0.876 hectares, with 76.5% of farmers now holding less than 1 hectare (up from 69.6%). For these smallholders, most income derives from non-agricultural wage labor, reflecting low agricultural productivity—agriculture employs 59% of the workforce yet contributes only 23% to GDP. Restrictive land laws, including ceiling limits, lease bans, sales restrictions, and arduous conversion processes, prevent small farmers from exiting or repurposing land efficiently, devaluing it and trapping them despite over 76% wanting to leave. Subsidies disproportionately benefit larger farmers. From a classical-liberal viewpoint, farmers should be treated as entrepreneurs with a full right to exit; reforming these laws would enable land consolidation, economies of scale, capital investment, and productivity gains. Global trends show prosperity requires shrinking agricultural employment—India, already food-surplus, must reduce its farmer numbers voluntarily through liberalization to realistically double incomes and avert a demographic crisis.

**Key points:**

- Average landholding size fell from 1.15 ha to 0.876 ha (2012-19), with 76.5% of farmers now on <1 ha relying mostly on non-farm wages.
- Restrictive land laws—ceilings, leases, sales limits, conversion hurdles—devalue land and block farmers' exit despite 76%+ wanting to leave.
- Government subsidies favor large farmers, exacerbating smallholders' low productivity in a sector with 59% workforce but 23% GDP share.
- Reform land laws to allow free sales and repurposing, enabling consolidation, investment, and shrinkage of farm employment per global prosperity patterns.
- Treat farmers as entrepreneurs with exit rights to double incomes realistically in food-surplus India.

**By Arjun Krishnan**

* * *

The recently released [National Sample Survey Office (NSSO) survey of agricultural households](https://www.mospi.gov.in/documents/213904/301563//Report_587m1631267040957.pdf/3793650e-8cf1-7872-ae90-51470c8d211c) should concern anyone interested in the wellbeing of India’s farmers. While farmer incomes have risen, from Rs 6,426 in 2012-13 to Rs 10,218 in 2018-19, the data hides something troubling. The average landholding size has decreased from 1.15 hectares to 0.876 hectares (ha) in the same period. 

Currently, 76.5 percent of farmers have less than 1 ha — up from 69.6 percent in 2012-13. This increase has consequences for not just how much farmers earn but also how they earn. A majority of the income for farmers with less than 1 ha of land now comes from non-agricultural sources. What this means is that these farmers are predominantly wage earners. 

It is not surprising that farmers need to supplement their income. Agricultural productivity in India is low. While 59% of the country’s total workforce is directly or indirectly dependent on agriculture, the sector only contributes 23% of GDP. This low productivity is further compounded for small farmers that cannot benefit from economies of scale. Furthermore, multiple studies have shown that the input subsidies offered by the Government of India benefit large farmers more than small farmers ([Sant](https://www.epw.in/journal/1996/51/special-articles/beneficiaries-ips-subsidy-and-impact-tariff-hike.html), [Murgai](http://epw.in/journal/2003/16/commentary/karnataka-incidence-agricultural-power-subsidies.html)). 

But why are landholdings so small? The average holding size in India has steadily reduced since the 1970s. Restrictive land laws — from land ceiling laws to lease restrictions and use restrictions — devalue the price of agricultural land. Some states even restrict whom you can sell your land to. 

In effect, farmers do not really have a right to exit farming. This is especially concerning since over 76% of farmers said they would move out of agriculture if they could ([Sood](https://theprint.in/economy/indias-small-marginal-farmers-have-essentially-become-wage-labourers-data-shows/745390/)). But the ability to exit is low. This, in part, is because the restrictions on sale make prices for these lands less  remunerative. 

Further, the laws restricting land use mean that small and marginal landowners cannot put their land to the most efficient use. Even though conversion of land for other uses is allowed,  most states have a complicated process that requires multiple approvals. This process is especially arduous for a smaller farmer with fewer resources. As a result, farmers must continue to use their farm for farming even if better alternatives exist. 

Any commodity or asset that is so heavily restricted will lose some market value. Land that cannot be sold with ease is worth less than land that can be. Non-agricultural land is worth more than a similar piece of land restricted to agricultural use. 

What can be done to improve the situation? If the aim of doubling farmers’ income is serious, we first need to reduce the number of farmers. Historical trends from around the globe show that quick gains in prosperity depend on shrinking agricultural employment ([Shane](https://scroll.in/article/904524/the-real-cause-of-indias-farm-crisis-too-many-farmers)). India has too many farmers. India is already a food surplus country and spends billions of dollars in subsidies. Doubling farmer incomes while maintaining the same number of farmers is unlikely. This doesn’t mean farmers should be forced to sell their land and join the labour force. The land laws ought to be reformed so that farmers who want to leave, can. This would allow farm sizes to become larger and allow for capital investment, improving productivity.

Farmers need to start being treated as entrepreneurs engaged in the business of farming and granted the right to exit farming. This means lifting the onerous and counterproductive restrictions that hurt farmers. India’s demographic dividend may soon become a demographic nightmare as landholdings shrink and farmers continue to remain trapped in agriculture.

*Read more: [Self-Interest drives People](https://spontaneousorder.in/self-interest-drives-people/)*

* * *

**About Arjun Krishnan**

Arjun Krishnan is a political science graduate from Ashoka University and has a master's degree from Warwick University. Prior to joining CCS, he interned with the Cato Institue and the Institute of Economic Affairs. The ideal of freedom, both economic and social, are of great importance to him. He enjoys travelling, reading books, and listening to podcasts.

## Self-Interest drives People

Original: https://www.spontaneousorder.in/p/self-interest-drives-people

Author: Spontaneous Order

Published: 2021-10-11T11:08:14.000Z

Topics: public-choice, self-interest, farm-laws, policy-design

> Many people assume that people work for the greater glory of the common good. And, therefore, politicians will work for the benefit of society. Businessmen will work for the benefit of society. Citizens will agitate for the general public interest. And ..

**Summary:**

Luis Miranda argues from a classical-liberal perspective that self-interest, not altruism, drives human behavior in politics, business, and society, as illuminated by Eamonn Butler's 'Public Choice – A Primer' (free PDF from IEA and CCS). Politicians seek re-election, bureaucrats larger budgets, businessmen profits, consumers low prices, and citizens free goods; ignoring these incentives leads to policy failures. Triggered by discussions on wealth advisors prioritizing commissions over client interests, Miranda applies public choice to explain opposition to India's 2020 farm laws: despite broad farmer support and prior bipartisan work, a vocal minority—opposition politicians denying credit and Punjab middlemen protecting easy income—protested. Government mishandling of parliamentary conventions contributed to repeal. No unified 'public interest' exists; farmer leaders like Sharad Joshi advocated pricing freedom, while Amar Habib's 2018 booklet 'Anti-Farmer Laws' critiqued acts like Agricultural Land Ceiling, Essential Commodities, and Land Acquisition for failing distressed farmers (e.g., suicides). Public choice highlights vote banks and focused interest groups' influence. Miranda urges designing policies that align with self-interests to mitigate government and market failures.

**Key points:**

- Design policies accounting for self-interests of politicians, bureaucrats, businesses, and citizens to avoid failures.
- Wealth advisors generally prioritize commissions over client interests, as expected under public choice theory.
- Opposition to 2020 farm laws stemmed from self-interested minorities like Punjab middlemen and rival politicians, despite majority farmer support.
- No single public interest exists; farmer advocates like Sharad Joshi and Amar Habib criticized restrictive laws for harming producers.
- Study public choice to understand vote banks and interest groups' outsized political influence.

**By Luis Miranda**

* * *

Many people assume that people work for the greater glory of the common good. And, therefore, politicians will work for the benefit of society. Businessmen will work for the benefit of society. Citizens will agitate for the general public interest. And so on. But that doesn’t happen. A few years ago, I came across a fascinating book, “Public Choice – A Primer”, written by Eamonn Butler. You can access a pdf copy, published by The Institute of Economic Affairs and the Centre for Civil Society, for free [here](https://ccs.in/sites/all/books/com_books/public-choice-a-primer.pdf). This is an excellent primer for students, teachers, sociologists and government officials. It explains how we can reduce government failure and market failure by understanding the behaviour of the various characters on stage.

Public Choice shows how human behaviour impacts the way people operate. Politicians want to be re-elected. Bureaucrats want a larger budget. Businessmen want to make more money. Consumers want the lowest price. Citizens want everything for free. If we design policies that do not take into account these vested self-interests, we will have failed policies. 

What triggered me to write this article, was a long discussion yesterday on WhatsApp about why wealth advisors ‘generally’ do not have the interest of their clients in mind. They are only interested in pushing products where they get a higher commission. And my reaction was, “Why are you surprised? If you had studied public choice, you would have realised that your wealth advisor is ‘generally’ expected to look after his or her self interest and sell a product that makes financial sense to their business.” I use the word ‘generally’ so that I do not paint all wealth managers with the same brush; there are some who do give advice based on the interest of their client. 

Similarly, we can look at the agitation against the 3 farm laws that were announced by the government last year. This was something that was worked on by the previous government also. Why did they protest now? This was something that most farmers across the country supported. Why did a very vocal minority protest? It is easily explained by the self-interest driver that public choice talks about. Politicians of other parties do not want to give the current party the credit for bringing in these changes. Farmers and middlemen in Punjab do not want to give up their easy income. Hence, by ignoring the importance of self-interest, a good policy struggles to become effective law. Part of the blame for the failure also lies with the government – if the government had followed parliamentary convention, the outcome may have been different. The ability to design public policies properly is, therefore, so important.

What complicates matters further is that there is no single “public interest”. Take for example the farmer bills. The late Sharad Joshi and his organisation, Shetkari Sanghatana, argued for the right of farmers to have freedom in the pricing of their products. A few years ago, I was given a booklet titled, “Anti-Farmer Laws” written in 2018 by Amar Habib of the Kisanputra Andolan and published by Parisar Prakashan in Ambajogai. Over 34 pages, he argues very articulately for the scrapping of 3 laws that were specifically set up to help farmers – Agricultural Land Ceiling Act, Essential Commodities Act and Land Acquisition Act. The farmer suicides in his state drove him to write this book. He argues that the policies of the government in response to these suicides were destined for failure because they did not address the root cause of the suffering of these farmers. You can access a pdf copy for free [here](https://www.sabhlokcity.com/2018/09/please-download-and-share-amar-habibs-excellent-book-anti-farmer-laws-for-free/) (there are 3 versions in Marathi, Hindi and English).

Public Choice also explains why vote banks play a critical part in the political process and why focused interest groups can be very successful.

*Read more: [Did Corporate Lobbying Nurture British Imperialism?](https://spontaneousorder.in/did-corporate-lobbying-nurture-british-imperialism/)*

* * *

**About Luis Miranda**

Luis Miranda connects dots. He started investing in India’s infrastructure a long, long time ago. He started IDFC Private Equity and was earlier a part of the start-up team of HDFC Bank. Luis has invested in and has been on the boards of companies like GMR Infrastructure, L&T Infrastructure, Delhi International Airport, Gujarat Pipavav Port, Gujarat State Petronet, and Manipal Global Education. Luis today spends most of his time, together with his wife, on non-profits. He is Chairman of CORO and Centre for Civil Society and Managing Trustee for Nadathur Trust. Other organisations include 17000 Ft Foundation, SNEHA, Muktangan, Sunbird Trust and Samhita Social Ventures. Luis graduated with an MBA from Chicago Booth and is a Chartered Accountant.

## Did Corporate Lobbying Nurture British Imperialism?

Original: https://www.spontaneousorder.in/p/did-corporate-lobbying-nurture-british-imperialism

Author: Spontaneous Order

Published: 2021-10-08T12:38:19.000Z

Topics: corporate-lobbying, east-india-company, crony-capitalism, competition-policy

> Corporate lobbying as a subject in this day and age is contentious. Is it pervasive, perverse, or perhaps both? The unequivocal truth is – it has been around far longer than we think. One may date it back all the way to 1845, when Frederic Bastiat wrote

**Summary:**

Corporate lobbying originated with the East India Company (EIC), founded in the 1600s as the Governor and Company of Merchants of London trading into the East Indies, which pioneered the practice by bribing British Parliamentarians—spending £1,200 annually on prominent MPs and ministers as early as 1693, securing crucial support that enabled its imperial dominance. From a classical-liberal viewpoint, while lobbying itself is not inherently bad and a conducive legal framework for market competition is essential, illicit lobbying corrupts rules and regulations, transforming them from efficient enablers of consumer-responsive competition into anticompetitive 'escape routes' for vested interests. Historical critiques by Adam Smith, David Ricardo, James Mill, and John Stuart Mill highlight the EIC as a poster child for regulatory capture, with parallels to modern scandals like India's 2G Spectrum Scam (1.76 lakh crores loss), where selective licensing and distorted auctions concentrated power, benefiting cronies via investments like 214 crores into Kalaignar TV. The EIC's vulnerabilities during the 1770 Great Bengal Famine echo 2008 financial crisis dynamics. The conclusion urges preventing misuse of regulations for self-gain, promoting transparent lobbying that fosters integrity and genuine competition rather than fraud or coercion.

**Key points:**

- The East India Company invented corporate lobbying by annually bribing British MPs with £1,200 starting in 1693 to secure parliamentary support.
- Illicit lobbying corrupts rules meant to enhance competition, creating personal incentives like post-retirement jobs for regulators.
- India's 2G Spectrum Scam exemplified anticompetitive rule-bending, with 1.76 lakh crores loss from selective licensing favoring cronies.
- Lobbying should foster competition, integrity, and transparency within a proper legal framework, not enable unscrupulous means as critiqued by classical liberals like Adam Smith.

**By Sarthak Kwatra**

* * *

Corporate lobbying as a subject in this day and age is contentious. Is it pervasive, perverse, or perhaps both? The unequivocal truth is – it has been around far longer than we think. One may date it back all the way to 1845, when [Frederic Bastiat](https://oll.libertyfund.org/person/frederic-bastiat) wrote to the French Parliament. In this letter, titled *[The](https://mises.org/library/candlemakers-petition)* [](https://mises.org/library/candlemakers-petition)*[Candlemakers’ Petition](https://mises.org/library/candlemakers-petition),* Bastiat imbued his view of the protectionist climate with satire and talked about candlemakers facing “unfair competition from a foreign rival (the sun)”. While we can still find an example of lobbying that is 176 years old, it is certainly not the oldest. The oldest recorded case of corporate lobbying dates back all the way to the 1600s. Initially titled the *Governor and Company of Merchants of London trading into the East Indies,* the **East India Company (EIC)** were indeed the inventors of corporate lobbying. 

In his 2019 book – *The Anarchy –* William Dalrymple so eloquently mentions, “Yet perhaps the most crucial factor of all was the support that the East India Company enjoyed from the British Parliament” and “In 1693, less than a century after its foundation, the EIC was discovered for the first time to be using its own shares for buying parliamentarians, annually shelling out £1,200 a year to prominent MPs and ministers.” 

The peculiar thing about events in economic history, and often events in history altogether, is that they tend to repeat themselves. For instance, when we look at [Andrew Jalil’s work](https://blogs.lse.ac.uk/usappblog/2016/01/22/the-evidence-suggests-strong-parallels-between-the-banking-panics-of-the-pre-depression-era-and-the-2008-crisis/), the panic of 1893 in the United States seems familiar to the infamous Financial Crisis of 2008. Quite similarly, the East India Company’s vulnerabilities during the Great Bengal Famine of 1770 poses an odd similarity to the same Financial Crisis of 2008. Therefore, it is quite important to observe the history of the East India Company as a nuanced lens to understand the competitive markets of today.

**How can lobbying lead to corruption?** 

Economists of the time, the likes of Adam Smith, David Ricardo, James Mill, and John Stuart Mill fervently discussed the East India Company in their works. Now, while lobbying in itself isn’t bad, when it is done for the purpose of circumventing regulations illicitly it can be quite harmful and anticompetitive. This is greatly verifiable all through the history of the East India Company. One could argue, the EIC was a poster child of sorts for an argument for regulation. 

For the purpose of this essay, we’ll look at corrupt lobbying through the lens of what it adversely and immediately affects – the rules and regulations, which in turn affect competition.

Rules and regulations happen to be a dual-edged sword. While on one end, they can make competition more efficient and responsive to consumers’ interests, they can also serve as the political “escape-route” from competition. Therefore, lobbying in circumstances where people with vested interests are responsible for making the “rules of the game” can be a recipe for disaster. 

Take an instance where representatives of a corporation are illicitly lobbying with the players of a government department. Now, if these governmental players have vested interests in what the corporation is offering, for instance a position in the corporation post-retirement, there is an undeniable (personal) incentive to give in to the corporation’s demands. Therefore, when those  responsible for making “the rules of the game” are provided self-serving incentives by corporations, lobbying can lead to corruption.

Here’s [how Nicholas Shaxson put it](https://taxjustice.net/2015/04/30/adam-smith-and-the-british-east-india-company-a-perspective-on-competitiveness/) – “The British East India Company was granted an English Royal Charter in 1600. This allowed it pretty much free licence to behave as it pleased so long as it could make the after-the-fact argument that it had acted on behalf of the sovereign to meet the country’s commercial objectives. From where, though, did those objectives originate? They were laid down in 1622, by the Standing Commission on Trade, which just so happened to have as one of its founding members Thomas Mun, who was also the Director of the British East India Company.” 

What may also be of relevance here is the case of the **2G Spectrum Scam**, with the weighty figure of [1.76 lakh crores](https://www.ndtv.com/india-news/what-is-2g-spectrum-scam-439271). Rules and regulations in this case were alleged to have been bent to aid the motives of certain telecommunication players, which offers insight into blatant impediments to competition. 

The Telecommunications Ministry under A. Raja had selectively issued 2G licences, that too at distorted prices. The auctions carried out were not free or fair. Counters were allegedly shut so that some players could physically not buy licences. Clearly, this led to saturation of power in the hands of a few. Earlier on, we established that lobbying where people with vested interests are responsible for making the “rules of the game” can be a recipe for disaster. So, what was in it for the telecommunication players that benefited from this? Well, licence owners made money off them. And what was in it for the telecommunications minister, responsible for allocating airwaves and licences? He was accused of getting Swan Telecom to invest 214 crores into Kalaignar TV Pvt. Ltd, run by some members of the DMK’s (Dravida Munnetra Kazhagam) first family. This twisting of the rules and regulations became blatant impediments to competition. 

Therefore, the effects of illicit lobbying harm the very rules and regulations that’re supposed to foster competition in the economy.

**Is lobbying always bad?** 

It is essential to promote and protect competition in the economy. However, even in the interpretations of what Adam Smith put forward, this is hardly competition in every immoral and unscrupulous means and ways possible – the ways that the East India Company went about it. In the words of [Viktor J. Vanberg](https://econpapers.repec.org/article/bpjjeehcn/v_3a4_3ay_3a1993_3ai_3a1_3ap_3a26_3an_3a1.htm) “*To make only the most obvious point, we could compete with each other by means of fraud, threats and coercion, but we would hardly consider such a competitive regime a desirable social order.*” 

Lobbying is a sensitive matter, and while the East India Company and all of history will always be a lesson for reference, we must understand that lobbying in itself isn’t bad. In a sense, the idea isn’t to promulgate the absence of lobbying or rules and regulations altogether – a conducive legal-institutional framework for market competition is good. Lobbying in a way that fosters competition, integrity, and transparency is what is necessary. The idea is to stop the misuse of those rules and regulations for self-gain through anticompetitive means. 

* * *

**About Sarthak Kwatra**

Sarthak is an Economics graduate from Hansraj College, Delhi University and he's currently working as a Junior Associate at the Centre for Civil Society. Sarthak's areas of interest include Economic History, Free Market Environmentalism, Pop Culture, and often their intersections.

## Grand sale but, as rly auction shows, where are the buyers?

Original: https://www.spontaneousorder.in/p/grand-sale-but-as-rly-auction-shows-where-are-the-buyers

Author: Spontaneous Order

Published: 2021-10-04T13:53:47.000Z

Topics: privatisation, national-monetisation-pipeline, ppps, infrastructure-reform

> The government’s failure to sell any of the 109 railway passenger routes it auctioned in August is a shameful fiasco. Many bidders showed interest in rights to run passenger services for 35 years, and the government hoped to garner Rs 30,000 crore from

**Summary:**

The government's auction of 109 railway passenger routes in August, aiming to raise Rs 30,000 crore over 35 years, collapsed with zero bids despite initial interest, as bidders cited rules favoring Indian Railways, lack of independent regulators, and route inflexibility. This echoes the 2018-19 Air India privatization failure and reveals ministries' reluctance to create level playing fields, protecting public sector undertakings (PSUs) from private competition. Private players distrust ministries' fairness amid unforeseen changes like technology or climate shifts. The National Monetisation Pipeline (NMP) seeks Rs 6 trillion over four years—Rs 0.9 trillion this year, rising to Rs 1.9 trillion in 2023-24 and Rs 1.7 trillion in 2024-25—by leasing infrastructure, a politically easier alternative to privatization to fund 10% GDP infrastructure spend, constrained by 90% debt/GDP ratio. Yet, railway fiasco questions buyer availability without trust. Author urges Kelkar Committee reforms: an Infrastructure PPP Project Review Committee for contract flexibility and an Adjudication Tribunal for disputes, citing Vajpayee's telecom revenue-sharing pivot. Privatization of profitable PSUs like BPCL remains stalled two years on, despite booming markets, signaling deep procedural rot needing drastic reform for NMP success.

**Key points:**

- Railway auction of 109 routes failed due to rules protecting Indian Railways and lack of independent regulators, yielding zero bids despite Rs 30,000 crore hopes.
- NMP targets Rs 6 trillion from infrastructure leasing over four years to fund capex amid borrowing curbs from 90% debt/GDP.
- Implement Kelkar Committee measures like PPP Review Committee and Adjudication Tribunal to build trust and enable contract flexibility.
- Privatization of BPCL and two other profitable PSUs stalled for two years despite record stock market highs, exposing ministerial wrangling.

**By Swaminathan SA Aiyer**

* * *

The government’s failure to sell any of the 109 railway passenger routes it auctioned in August is a shameful fiasco. Many bidders showed interest in rights to run passenger services for 35 years, and the government hoped to garner Rs 30,000 crore from the auction. But ultimately the bidders backed out, citing rules favouring the national transporter, lack of a truly independent regulator, curbs on route flexibility and other unresolved issues.

This reminds me of the failure to get any bids to privatise Air India in 2018-19 — a much more difficult case since it had huge accumulated losses — despite significant buyer interest. In general, ministries want to add all sorts of conditions, and are reluctant to create level playing fields that may enable private operators to kill public sector rivals. Every ministry acts as a champion for its own public sector undertakings. Private bidders rightly do not trust ministries to be fair, or appoint truly independent regulators. 

The railway fiasco puts in perspective the government’s announcement of a National Monetisation Pipeline (NMP), leasing out existing infrastructure to private parties to Rs 6 trillion over four years. This is a second-best option to outright privatisation, but politically easier.

The NMP will finance a rise in infrastructure investment to 10% of GDP, which India badly needs to become world class. This year’s NMP target is Rs 0.9 trillion, rising to Rs 1.9 trillion in 2023-24 and Rs 1.7 trillion in 2024-25.

The idea is not new. Several toll roads have been leased out. But this option aims to extend this to a very wide range of assets. Other countries like the US and China are also planning massive infrastructure spending but mainly funded by deficit financing (government borrowing). India cannot do this because Covid’s impact has raised the government debt/GDP ratio to almost 90%. The target ratio is 60%, which means sharp curbs on borrowing in coming years. The NMP is a plausible alternative funding route.

But while the government seeks a grand sale, are willing buyers in sight? The railway auction is a sobering dose of reality. India has many potential bidders who would be very interested if they trusted the political system to provide a level playing field and fair treatment in the event of unforeseen events like technological or climate change. That trust does not exist today.

The government should implement suggestions of the Kelkar Committee on Public Private Partnerships (PPPs). This included an Infrastructure PPP Project Review Committee that can make appropriate changes in contract terms without attracting cries of “corruption”. The Committee also suggested an Infrastructure PPP Adjudication Tribunal to settle disputes.

It is worth recalling the mess in Indian telecom when bidders who won telecom auctions in the 1990s discovered they had grossly overestimated demand, and looked certain to all go bust. Prime Minister A B Vajpayee had the courage to create a new revenue-sharing tariff model and allow existing telecom companies to migrate to this model even though it meant favouring private players and raising cries of cronyism. Such flexibility is a must if the NMP is to be a success.

Outright privatisation eliminates some of the NMP risks. But the government is fearful, unnecessarily so, that privatisation will spur accusations of selling the family silver. Besides, the government’s internal processes seem much too slow to make privatisation a reliable source of funding for a massive infrastructure drive.

Back in November 2019, the government declared it would sell its entire shareholding in three major companies — Bharat Petroleum and Chemicals Ltd , Shipping Corporation of India, and Container Corporation of India. These were giant profit-making companies, not small loss-makers whom earlier governments had thought of selling without actually doing so. It seemed, at last, that fear of privatisation had been shelved, and the process would now start.

Alas, not a single sale has happened after close to two years. The government claims that Covid disrupted the economy and made sales difficult. But even though the economy was indeed hit by Covid, the stock market started booming in late 2020, and the Sensex and Nifty have today soared to record heights as domestic plus foreign investors have poured in unprecedented billions. The share prices of public sector companies have soared too.

The climate for getting good bids for privatisation could not be better. Hence the delay in the sale of the three companies reveals procedural shortcomings and unfinished wrangling within ministries that suggest a rot so deep that some drastic reform is called for in managing the whole process. Otherwise dreams of getting Rs 6 trillion in four years from the NMP will remain dreams.

*This article was originally published in [The Times of India](https://timesofindia.indiatimes.com/blogs/Swaminomics/grand-sale-but-as-rly-auction-shows-where-are-the-buyers/) on 5 September 2021*.

*Read more: [Future of Democracy: Gandhi’s Politics without Political Parties](https://spontaneousorder.in/future-of-democracy-gandhis-politics-without-political-parties/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Future of Democracy: Gandhi’s Politics without Political Parties

Original: https://www.spontaneousorder.in/p/future-of-democracy-gandhis-politics-without-political-parties

Author: Spontaneous Order

Published: 2021-10-01T19:00:46.000Z

Topics: gandhi, village-republics, kudavolai-system, decentralized-governance

> Gandhiji was a strong votary of gram swaraj. He believed that village republics should be the foundation of the political system of free India. However, many of his contemporaries thought it to be Gandhi’s romanticism of the ancient Indian village or an

**Summary:**

Parth Shah argues that Gandhi's vision of gram swaraj, rooted in self-governing village republics, was not mere romanticism but reflected historical realities like the Kudavolai system under the Chola dynasty from 900 CE in Uttaramerur, Tamil Nadu. Villages were divided into 30 kudumbu wards, with representatives selected via random draw from palm-leaf tickets in earthen pots by a young boy, after strict qualifications: age 35-70, ownership of one veli (6.17 acres) of land plus a house thereon, and exclusion for crimes like killing women, children, Brahmins, or cows, or associations with thieves and drunkards. Elected served one year, ineligible for three years, with in-term disqualifications. This system evolved independently of ancient texts through local experiments. Shah contrasts it favorably with modern party-based elections, plagued by opaque funding, expenditure limits, vote-bank politics exploiting caste and religion, hate speech, public apathy, and dominance by professional politicians barring ordinary citizens. Gandhi urged dissolving Congress post-independence not for new parties but for politics without parties, embodying true 'government of the people, by the people, for the people' via Kudavolai-like direct democracy. From a classical-liberal lens, Gandhi’s village republics and party-less politics represent democracy's future, prioritizing local accountability over centralized party machines.

**Key points:**

- Historical Kudavolai system in Chola-era villages used random selection of qualified candidates (age 35-70, owning 6.17 acres land and house, no major crimes) via palm-leaf draws for one-year terms.
- Modern elections suffer from party funding opacity, vote-bank abuses, hate speech, and professional politician dominance, sidelining ordinary citizens.
- Gandhi advocated dissolving Congress for politics without parties, aligning with direct village governance like Kudavolai.
- Village republics exemplify true democracy closer to the people than party-dominated systems.

**By Parth Shah**

* * *

Gandhiji was a strong votary of gram swaraj. He believed that village republics should be the foundation of the political system of free India. However, many of his contemporaries thought it to be Gandhi’s romanticism of the ancient Indian village or an image of a utopia that Gandhi had crafted to guide Indians to a higher moral life.

Looking at India’s history, it turns out that self-governing villages were real. Their political organisation was rather unique and though democratic in nature, the modalities were rather different. Given the paucity of historical records, it is hard to assess with any degree of confidence how prevalent this democratic system of village governance was in India. One could surmise that the system must have been known to most people on the continent. India produced commodities that showed a high degree of specialization and had deep trading networks within as well as with the outside world. These communication channels would have transmitted information also about governance systems. In any case, the existence of these village republics shows that it wasn’t just Gandhi’s romanticism or utopia.

Several temples in the town of Uttaramerur in today’s Tamil Nadu have inscriptions that describe the workings of the governance system in the villages. This was under the Chola dynasty from 900 CE onwards. It is the Kudavolai system of governance. Most historians refer to it as an election system but it was much more than a particular method of election, though that is probably the most novel aspect of the system.

Each village was divided into 30 *kudumbu* or wards and the representatives elected from each ward were then divided across various governance committees like the Annual Committee, Garden Committee, Tank Committee and some also had Gold Committee. The qualifications to run for the election were minutely described: above the age of 35 but below 70, must own one veli (6.17 acre) of land and also own a house built on the land, those who killed women, children, brahmins or cows were disqualified, so were close relatives of defaulters, thieves, drunkards and who had been given other punishments.

Those who qualified and had an interest in being a representative put their names on a palm leaf and then dropped that ‘ticket’ in an earthen pot. A young boy would draw a ticket out of the pot and the name will be read out by all the temple priests present. The representative elected by draw would serve for one year and would not be able to run again for three years. There was a list of violations that would disqualify representatives during their term in office.

This Kudavolai system is not described in Rig Veda or other ancient texts. It means that the system evolved over time and there must have been many different experiments that would have happened, if only we had some records of them.

The random selection of representatives seems rather superior in many ways to our current competition-based election system where political parties or candidates compete for votes. The list of woes with our current system is long: funding of political parties, limits imposed on election expenditures, vote bank politics leading to widespread abuse of caste, religious, class identities and communal and hate speech, general apathy of the public since their role is once in a few years, the rise of professional politicians and impossibility of ordinary citizens to hold any public office. There is one solution to all these evils: Kudavolai system!

Gandhiji had strongly urged that the Congress party must be dissolved after independence. Most assumed that he did not want one party to dominate the politics of free India and was suggesting the formation of new competing political parties. Actually, he was championing politics without any political party. He was pointing to something like the Kudavolai system. The democratic ideal of government by the people, for the people, and of the people is represented by Kudavolai system far more truthfully than our political-party dominated democracy.

Gandhi’s village republics—or more pertinently governments closest to the people—and politics without political parties are the future of democracy.

*Read more: [India’s Drone Policies and the Way Ahead](https://spontaneousorder.in/indias-drone-policies-and-the-way-ahead/)*

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## India’s Drone Policies and the Way Ahead

Original: https://www.spontaneousorder.in/p/indias-drone-policies-and-the-way-ahead

Author: Spontaneous Order

Published: 2021-10-01T14:38:20.000Z

Topics: drone-regulation, pli-scheme, national-security, aviation-policy

> Drones are creating headlines in the technology and aviation industry of India right now. The Ministry of Civil Aviation has released Drone Rules, 2021. These are more liberalised rules when compared to previous drone policies in the country. The sector..

**Summary:**

India's new Drone Rules, 2021, represent a liberal shift from decades of restrictive policies, easing drone ownership and operations to spur rapid sector growth amid rising commercial and defense demands. The Union Cabinet approved a ₹120 crore Production-Linked Incentive (PLI) scheme over three years, offering a constant 20% incentive on value addition—computed as annual sales revenue minus purchase costs (net of GST)—for manufacturers of drones, components, and related IT products, an exception to typical declining PLI rates. Preceding this, initiatives like ICMR's beyond-visual-line-of-sight (BVLoS) drone deliveries of COVID-19 vaccines up to 3,000 meters in Andaman & Nicobar, Nagaland, and Manipur, and Telangana's 'Medicine from the Sky' project underscore practical applications. However, escalating security threats, exemplified by the drone attack on Jammu airbase, highlight vulnerabilities along borders, prompting development of indigenous Counter Unmanned Aircraft Systems (CUAS) with soft-kill jamming and hard-kill capabilities via contracts by Army, Navy, and Air Force. Zoned operations aim to mitigate airport and security risks, but the author urges close monitoring to balance commercial, leisure, and security drone uses, positioning India's liberalization against global scrutiny amid drone warfare risks.

**Key points:**

- Drone Rules 2021 liberalize ownership and operations compared to prior restrictive policies.
- PLI scheme provides 20% incentives on value addition for drone manufacturers over three years with ₹120 crore allocation.
- BVLoS drone trials deliver vaccines and medicines in remote areas like Andaman & Nicobar and Telangana.
- Rising drone threats, like Jammu airbase attack, drive indigenous CUAS development with soft and hard kill options.
- Zoned guidelines and policy balance needed for commercial, leisure, and security drone uses.

**By Bhavya Mehta**

* * *

Drones are creating headlines in the technology and aviation industry of India right now. The Ministry of Civil Aviation has released [Drone Rules, 2021](https://www.civilaviation.gov.in/sites/default/files/Draft_Drones_Rules_14_Jul_2021.pdf). These are more liberalised rules when compared to previous drone policies in the country. The sector is also expected to see rapid growth in the coming few years. To put it plainly, the new set of rules have eased out owning and operating drones in India. 

On 15th September 2021, the Union Cabinet also cleared the production-linked incentive (PLI) scheme that shall provide incentives up to [20% to the manufacturers](https://www.business-standard.com/article/economy-policy/union-cabinet-clears-pli-scheme-to-make-india-a-drone-hub-by-2030-121091501712_1.html#:~:text=The%20PLI%20scheme%20will%20provide,be%20spread%20over%20three%20years.) of drones and drone components over the value addition that they make. The annual sales revenue (net of GST) minus the purchase cost (net of GST) of the manufactured drone and drone components would be used to compute this value addition. 

The government also announced that it has allocated a sum of ₹120 crores for the PLI scheme that will be spread over a period of 3 years. The 3 year constant PLI rate of 20% for the drone industry is an exception to the PLI rates, which usually keep reducing every year. Apart from manufacturers of drones and drone components, the scheme shall also include drone-related IT products. 

This announcement was preceded by the aviation ministry announcing the conditional permission granted to the Indian Council of Medical Research (ICMR) to use drones to deliver COVID-19 vaccines in Andaman and Nicobar Islands, Nagaland and Manipur, beyond the visual line of sight (up to the height of 3,000 metres). Telangana became the first state to launch the Beyond Visual Line of Sight (BVLoS) flights through its project ‘Medicine from the Sky’ to deliver COVID-19 vaccines, units of blood and medicines. 

While the predicted boom in the drone industry might seem exciting to potential investors and manufacturers, a huge security threat concerns the defence forces of the country. India’s borders and hinterland continue to be vulnerable and have already seen an increase in the threat posed by drone warfare. The recent [drone attack on Jammu air force station](https://www.indiatoday.in/india/story/jammu-iaf-base-attack-rdx-explosives-drones-reveals-probe-air-force-1824002-2021-07-05) became a security concern, indicating the need for India to be prepared with sophisticated anti-drone mechanisms and suitable policies to manage a potential crisis caused by drone warfare. 

It is believed that the Drone Rules, 2021 shall aid the government to be prepared with indigenously-developed Counter Unmanned Aircraft Systems (CUAS), the process and contracting out for which has already begun. These anti-drone systems will have critical soft and hard kill capabilities. A soft kill renders an incoming drone ineffective by jamming it, whereas a hard kill destroys the drone with a direct hit. Indian Army, Navy and Airforce have all given out contracts for suitable anti-drone systems to be created for use.

The PLI scheme and liberalised Drone Rules are hoped to cater to the growing commercial and defense demands in the country for drone and drone related products, both hardware and software. The division of zones and respective guidelines to operate drones in the same, will ensure, to an extent, that the drones operating in such areas do not obstruct operations of the airports and do not pose security threats. However, India may need to monitor the situation closely and be ready to balance its drone rules with respect to drone usage for commercial, leisure and security purposes. The shift from restrictive drone rules in India for the past few decades to the now newly liberalised rules of 2021, combined with the increase in drone attacks across the borders of the country, puts India in the limelight as the world waits to see how the situation unfolds for the subcontinent over the next few years. 

*Read more: [Slum Rehabilitation Scheme: A disconnect between intention and implementation](https://spontaneousorder.in/slum-rehabilitation-scheme-a-disconnect-between-intention-and-implementation/)*

* * *

**About Bhavya Mehta**

Bhavya is a Science and Technology Policy Consultant at Centre for Civil society. She has a Post Graduate Diploma in Liberal Studies from Ashoka University and has previously worked in the field of risk consulting with Genpact Enterprise Risk Consulting. She also has a B.Com (Hons.) degree from the University of Delhi and a Korean language diploma from the language institute (Sejong Hakdang) of the South Korean Embassy in India. Bhavya also completed the Business Fundamentals Course (CORe) from Harvard Business School Online and is currently involved in learning coding as hobby. Bhavya enjoys studying about cultures and economies, cooking on weekends, and is a professionally trained western vocalist from Rock School London.

## Slum Rehabilitation Scheme: A disconnect between intention and implementation

Original: https://www.spontaneousorder.in/p/slum-rehabilitation-scheme-a-disconnect-between-intention-and-implementation

Author: Spontaneous Order

Published: 2021-09-29T13:58:06.000Z

Topics: slum-rehabilitation, urban-housing, private-development, community-participation

> From the archaic Slum Clearance scheme introduced in 1956 to more novel programs such as the Prime Minister’s Grant Program 1985; over the years, there has been a shift in policy paradigm. Policies have gone from slum clearance to slum rehabilitation. W

**Summary:**

The Slum Rehabilitation Scheme (SRS), launched by Maharashtra in 1995, represents a classical-liberal policy shift from slum clearance to in-situ rehabilitation, leveraging private developers through increased Floor Space Index (FSI) to cross-subsidize free tenements from market sales. Intended to harness slum land as a resource and uphold dweller rights, it has instead produced 'vertical slums' with poor design, inadequate ventilation, construction flaws, and health risks like elevated TB cases in Mumbai resettlements. Implementation disregards dwellers' street-based lifestyles, social networks, and micro-entrepreneurship, leading to abandonment of new housing. Progress is glacial: in Mumbai, housing 62 lakh in 12.5 lakh slum areas, only 2.06 lakh families received homes in 23 years; nationally, ISSR under PMAY-U sees just 4% uptake. Examples like Delhi's Katputli Colony highlight community resistance due to exclusion. The author calls for a people-first classical-liberal fix: enforce development controls, involve communities/NGOs/CSOs transparently, and pursue alternatives like in-situ upgrading, as slum-dwellers in Nagpur prefer and Shantadeep cooperative exemplifies sustainable success.

**Key points:**

- SRS's private developer incentives via FSI create profitable cross-subsidies in theory but yield substandard high-rises compromising livability and health.
- Mumbai's SRS delivered homes to only 2.06 lakh families in 23 years despite slums housing over half the city's 62 lakh population.
- Top-down implementation ignores slum-dwellers' street-centric socio-economic needs, prompting abandonment and resistance as in Katputli Colony.
- Reforms must enforce strict DCRs, mandate community consent and CBO involvement, and explore in-situ upgrades over relocation.

**By Aanchal Aggarwal**

* * *

From the archaic [Slum Clearance scheme](https://legislative.gov.in/sites/default/files/A1956-96.pdf) introduced in 1956 to more novel programs such as the Prime Minister’s Grant Program 1985; over the years, there has been a shift in policy paradigm. Policies have gone from slum clearance to slum rehabilitation. Where the prevalent strategy in the past was removal of slums for ‘cleaning’ the city, novel policies reflect a deeper commitment to slum-dweller rights.  

In 1995, the government of Maharashtra introduced the Slum Rehabilitation Scheme (SRS) with an emphasis on using slum land as a resource through private sector involvement by allowing an increase in the Floor Space index (FSI). The FSI increase allowed utilization of the same land better by permitting more dwelling units than what the building rules allowed. The excess units were to be sold in the open market to cross-subsidise reconstruction of slum tenements. Along with increasing occupancy on the same land, it was also a measure to incentivize the private sector to take up slum redevelopment activity, which otherwise was not profitable for them. 

Following its perceived success, SRS became a role model for many states to emulate. The scheme has since been initiated in many Indian cities. It is also a vertical, In-situ Slum Redevelopment (ISSR), under the Centre’s Pradhan Mantri Awas Yojana-Urban, 2014. 

On the face of it, the policy seems to benefit the slum dwellers. However, the  motivation given by the state to developers to earn profits has made SRS a lopsided development model. The lens through which the scheme is drafted fails to take into account the material realities of the population in need of better housing. Furthermore, the viability of the model is highly questionable owing to its [slow pace of delivery as seen over the years.](https://timesofindia.indiatimes.com/city/mumbai/over-500-sra-projects-failed-to-take-off-in-15-years-report/articleshow/79935677.cms) 

**Rise of Vertical slums** 

SRS primarily focuses on relocation or in-situ development of multi-storey complexes, which free up swathes of prime real estate. The construction of rehabilitation housing is led by developers with little or no direct monitoring by the government over its design and construction. Since the scheme allows for greater profits for the developers but not greater accountability to the consumers (slum dwellers), what the developers end up building for the  poor is a by-product of their business.  

Developers often disregard prescribed development control regulations (DCR) in construction of the housing stock, thus compromising on basic livability standards for the poor. Along with an abrupt shift to vertical living, congestion of buildings resulting in lack of proper daylight & ventilation, poor quality of construction, inadequate infrastructure have been major causes of occupants’ discomfort and deteriorating health. A recent [study](https://iihs.co.in/knowledge-gateway/association-between-architectural-parameters-and-burden-of-tuberculosis-in-three-resettlement-colonies-of-m-east-ward-mumbai-india/) highlights the rise in TB cases among the residents due to the poor design of colonies built under SRS in Mumbai.

Ramifications can be seen with inhabitants [moving out of the new housing](https://www.sciencedirect.com/science/article/pii/S0197397519300839) stating poor design and planning of the SRH as reasons for leaving. 

**Disregarding people’s interests and lifestyles**

The high-rise apartment building characteristic to SRS is a paradox to the ‘life on the streets’  inherently tied to the fabric of slum settlements. Living adjacent to the streets present economic and social opportunities for slum dwellers. Streets act as places of community interaction leading to strong social connections, and often become areas of work providing micro entrepreneurial opportunities to the residents. The displacement from low-rise, high-density dwellings to more impersonal high-rise, high-density housing has a [negative impact](https://www.oxfordhandbooks.com/view/10.1093/oxfordhb/9780195380620.001.0001/oxfordhb-9780195380620-e-35) on social networks. It further disconnects slum-dwellers from their means of subsistence, which is often completely dependent on the access to the street, thereby threatening the socio-economic sustainability of slum dwellers.  

The absence of involvement of communities during the entire implementation process further subjugates interests of slum dwellers. The policy restricts their role w.r.t consenting to the scheme and lacks transparency w.r.t eligibility for the scheme. 

The Katputli colony redevelopment in Delhi is a fine example of the stark gap between people’s socio-economic needs, their interests and the state’s imagination of housing provisions for the poor. The failure to involve the community in the planning process as well as accusations of leaving out a large number of residents led to strong and sustained [resistance from communities](https://www.hindustantimes.com/delhi/residents-of-kathputli-colony-in-delhi-resist-slum-re-development-through-song-dance-magic/story-JyPPXuPg3pRNJiomvFK6aM.html) and difficulties in implementation of the project.

**Question of Viability** 

Even with luring developers with additional benefits to boost their interest in these projects,  the delivery of housing construction under SRS has not moved at an expected fast pace. 

According to estimates, 12.5 lakh slum areas in Mumbai house nearly 62 lakh population (more than half of Mumbai’s population). [In the 23 years](https://www.hindustantimes.com/mumbai-news/sra-scheme-in-23-yrs-only-2-06l-families-living-in-slums-got-homes/story-7LYqwDOprNMT7K11EQzF9M.html) since the Slum Rehabilitation Authority (SRA) was formed, only around 2.06 lakh families have got new homes. 

In Delhi, the projects under slum rehabilitation with public-private partnership face  difficulties to start up. This [study](https://online.dda.org.in/mpd2041dda/_layouts/MPD2041FINALSUGGESTION/Baseline_Shelter_%20160721.pdf) notes that the capital has only 3 ISSR projects (that are under implementation) and 5 that are planned or in process. The model was also available in the [Master Plan of Delhi 2021](http://52.172.182.107/BPAMSClient/seConfigFiles/Downloads/MPD2021.pdf) and yet has not shown any signs of large scale uptake. 

Furthermore, as data from the Ministry for Housing and Urban Affairs’ CSMC shows, in the seven years since its inception, the ISSR model has the least uptake (4%) among the four verticals in Prime Minister’s Awas Yojana-Urban. 

**Disparity between stated principles and actual implementation** 

Since there is little to no rational basis for the profit margins of the developers, they tend to find illegal ways of increasing profits. These include compromising on Development Control Regulations (DCR) and building by-laws. To combat this problem there shall be strict enforcement of DCR and the state shall take a proactive role in supervising the implementation of the project at various stages. Additionally, the state shall extend its role in initiating rehabilitation projects in slums with the help of NGOs, civil society organisations (CSO), experts and other professionals. 

Slum rehabilitation has to take a people-first approach. The entire planning and implementation process shall involve consent and mandatory involvement of community-based organisations (CBOs) and slum dwellers along with complete transparency about the modalities of implementation. [Shantadeep housing Co-operative in Kailashnagar, Sabarmati](https://cept.ac.in/UserFiles/File/CUE/Working%20Papers/Revised%20New/27CUEWP%2027_Slum%20Rehabilitation%20Schemes%20\(SRS\)%20across%20Ahmedabad%20-%20Role%20of%20an%20External%20Agency.compressed.pdf) presents an excellent example of Slum Rehabilitation which took shape with active participation of slum-dwellers and involvement of NGOs.

Nevertheless, it is imperative to note that the sole model of SRS with involvement of private developers is unlikely to provide a comprehensive  and sustainable solution to the lack of decent housing for slum dwellers.  Findings from this [study](http://yuvaindia.org/wp-content/uploads/2017/03/City-se-Housing-Need-of-the-urban-poor-in-nagpur.pdf) in Nagpur reveal that a majority of those living in notified slums preferred to upgrade their existing homes rather than move to new housing facilities. There is a need to devise alternate policies that take into regard aspirations and needs of slum dwellers in order to provide them with housing that is affordable, adequate and viable.

* * *

**About Aanchal Aggarwal**

Aanchal is an Architect & Urban Practitioner whose core areas of interest lie at the intersection of Affordable housing, Sanitation, Gender and Urban informality. As part of her practice, she likes to engage with problems of social security, identity-based discrimination and associated rights that accompany these sectors.

## Pawnshop mentality won’t do, we need new lending models

Original: https://www.spontaneousorder.in/p/pawnshop-mentality-wont-do-we-need-new-lending-models

Author: Spontaneous Order

Published: 2021-09-27T11:53:06.000Z

Topics: digital-finance, credit-access, informal-economy, structural-transformation

> I recently read the speech given by Jack Ma at the Bund Finance Summit in October 2020. It was shared by the Marcellus Investment Managers team in its newsletter. The speech is now considered to have triggered off a series of events, beginning with the ..

**Summary:**

Niranjan Rajadhyaksha draws on Jack Ma's 2020 critique of banks' 'pawnshop mentality'—lending based on collateral rather than big data—to advocate for India's emerging digital finance models. He highlights the account-aggregator system, which enables secure sharing of financial data like bank statements and GST returns via a public credit registry, potentially allowing small businesses without collateral or credit histories to access cheaper loans, akin to UPI's revolution in payments. Research shows tiny enterprises pay interest rates far exceeding their default risks, and this system could shift lending to cash-flows, easing credit constraints. Rajadhyaksha questions if it overcomes the 'De Soto Effect,' where informal poor lack property rights for collateral, trapping them in poverty and reliance on costly informal credit. He also sees potential for structural transformation: closing productivity gaps by enabling informal firms to scale into formal ones, rather than just labor migration to large firms, though not all distress enterprises will survive. From a classical-liberal lens, better credit access via market-friendly tech can formalize the economy, boost small enterprise growth employing most post-farm workers, provided strong data privacy and enforceable contracts.

**Key points:**

- Replace collateral-based 'pawnshop mentality' lending with big data and cash-flow models to meet modern financial needs.
- India's account-aggregator system can lower credit costs for small businesses lacking collateral by aggregating data like GST returns and bank statements.
- Cash-flow lending may mitigate the De Soto Effect, enabling informal enterprises to access formal credit without clear property rights.
- New lending could drive structural transformation by helping viable informal firms scale and formalize, closing domestic productivity gaps.

**By Niranjan Rajadhyaksha**

* * *

I recently read the speech given by Jack Ma at the Bund Finance Summit in October 2020. It was shared by the Marcellus Investment Managers team in its newsletter. The speech is now considered to have triggered off a series of events, beginning with the cancellation of an initial public offer by Ma’s Ant Financial, that has led to the ongoing crackdown by the Chinese government on internet companies. However, beyond the political impact, some of the points made by Ma on digital finance in the course of his speech are worth reading in the context of the progress made in Indian digital finance over the past few years.

Ma has thrown firebombs at the traditional financial architecture. One of his targets is what he evocatively describes as the “pawnshop mentality” of established banks, based on collateral, which was necessary for their development but is now at odds with the possibilities of new forms of lending. One part is worth quoting in full: “Collateralization with a pawnshop mentality is not going to support the financial needs of the world’s development over the next 30 years. We must replace this pawnshop mentality with a credit-based system rooted in big data using today’s technological capabilities. This credit-based system is not built on traditional IT, not based on a personal relationship-driven society, but must be built on big data, in order to truly make credit equal wealth. Even the beggar must have some credit; without credit, you can’t even beg for food. I think every beggar is (can be) creditworthy.”

These remarks on the need to move from a lending system based on collateral to one based on big data resonates at a time when India has inaugurated an account-aggregator system, which its enthusiasts say will help small businesses with inadequate collateral or credit histories access credit at far lower rates than they do now. Account aggregators working through a secure public credit registry can do for credit what the United Payments Interface (UPI) has done for retail payments in India.

There is ample research to show that tiny enterprises pay interest rates that are far higher than what their default rates predict, and that is when they can access any form of credit. By easing these credit constraints, the account-aggregator system can potentially engineer a shift from lending based on assets to lending based on cash-flows, at least to small enterprises that have some digital and tax footprints. Lenders can access data on bank statements, GST returns, personal spending, etc, to price loans to enterprises they would earlier stay away from—though hopefully this system is in practice backed with very strong data safety and privacy protocols.

There are two broader macro issues worth focusing on in such new forms of lending. First, can lending based on cash-flows overcome what Tim Besley and Maitreesh Ghatak of the London School of Economics had once called ‘the De Soto Effect’? The reference is to a famous argument by the Peruvian economist Hernando De Soto—that the global poor working in tiny informal enterprises are in effect shut out of the formal credit system, and hence condemned to live in poverty, because a lack of clear property rights makes it difficult for them to offer their land assets as collateral to banks.

A slum dweller with no formal land title thus has to depend on informal sources of money that leave her with little to reinvest in the business. It is quite likely that a successful shift to lending based on borrower cash-flows will ease the ubiquitous credit constraints on informal enterprises. Of course, that still leaves the issue of the sanctity of credit contracts unanswered. Even lenders with rich data on the cash-flows of tiny enterprises will need to be sure that they can get some money back in case of a default.

Second, can the new credit system change the dynamics of structural transformation in India, or the way people migrate from low-productivity to high-productivity activities? There are two ways in which this can happen—one by closing the global productivity gap and the other by closing the domestic productivity gap. The first is the classic pattern observed when people trapped in farms or informal enterprises get employed in large enterprises. This transition has been common in much of Asia east of our borders, but such labour- intensive industrialization has till now not been enough to absorb India’s surplus labour.

The second way is when informal enterprises grow in scale while closing their productivity gap with larger firms in the organized sector. Such a shift from informal to formal is not easy (see Cafe Economics, 26 April 2017, bit.ly/39l7ebY ), but is now part of the national conversation on the overdue formalization of the Indian economy. Credit constraints are part of the reason why small firms fail to scale up in India, though there is also the harsh truth that not all neighbourhood enterprises—many of them a form of distress entrepreneurship—can survive the transition even if their borrowing costs came down. The opportunities that cash-flow-based lending offer can have a profound influence on easing some of the constraints on smaller enterprises which employ most Indians who have left farming behind.

*This article was originally published in [Livemint](https://www.livemint.com/opinion/online-views/a-new-vajpayee-moment-for-the-troubled-indian-telecom-sector-11631123688457.html) on 22 September 2021*

*Read more: [Unintended Consequences: Sri Lanka’s Organic Farming](https://spontaneousorder.in/unintended-consequences-sri-lankas-organic-farming/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Unintended Consequences: Sri Lanka’s Organic Farming

Original: https://www.spontaneousorder.in/p/unintended-consequences-sri-lankas-organic-farming

Author: Spontaneous Order

Published: 2021-09-22T16:15:27.000Z

Topics: organic-farming, unintended-consequences, agricultural-policy, government-intervention

> Sri Lanka is staring at an economic emergency. Country’s forex reserves have dropped more than 60% from over $7.5 billion in 2019 to around $2.8 billion in July this year. Food inflation in the country has reached double digits and its currency, Sri Lan

**Summary:**

Sri Lanka's economic crisis, marked by forex reserves plummeting from $7.5 billion in 2019 to $2.8 billion in July 2021, double-digit food inflation, currency depreciation over 7%, and food shortages, stems from President Gotabaya Rajapaksa's unilateral April 2021 mandate for organic-only agriculture without consulting experts. In a nation where 90% of farmers rely on chemical fertilizers and only 20% have organic knowledge, this policy ignored the law of unintended consequences, as highlighted by economists like Vijay Kelkar and Ajay Shah, leading to market distortions from top-down interventions. Crop yields fell 19-25%, tea production—Sri Lanka's $1.25 billion annual export earner—slashed in half from 300 million kg to 150 million kg, input costs surged due to higher labor and processing needs, exacerbating forex woes and food insecurity. Additional issues include insufficient farmland for low-yield organics risking deforestation and a manure shortfall, with current 2-3 million tonnes production versus 8 million needed for paddy and tea. The classical-liberal lesson: governments' well-intentioned but hasty policies overlook unseen second- and third-order effects; all interventions demand rigorous prior evaluation, a safeguard absent in Sri Lanka's Rajapaksa-dominated one-party rule.

**Key points:**

- Sri Lanka's organic-only farming ban caused crop yields to drop 19-25% and halved tea production from 300 million kg to 150 million kg, devastating $1.25 billion in exports.
- Higher organic input costs from increased manual labor and processing fueled demand slump, forex crisis, and currency depreciation.
- Organic farming requires more land, risking deforestation in tourism-dependent Sri Lanka, and faces a manure shortage of 5-6 million tonnes annually.
- Public policies must rigorously evaluate unseen second- and third-order effects to avoid market distortions from interventions like bans and subsidies.

**By Rakesh Kumar Yadav**

* * *

Sri Lanka is staring at an economic emergency. Country’s [forex reserves](https://www.thehindu.com/business/explained-what-caused-the-sri-lankan-economic-crisis/article36314148.ece) have dropped more than 60% from over $7.5 billion in 2019 to around $2.8 billion in July this year. [Food inflation](https://tradingeconomics.com/sri-lanka/food-inflation?embed&embed/survey) in the country has reached double digits and its currency, Sri Lankan rupee, has fallen by [more than 7%](https://www.newindianexpress.com/world/2021/sep/06/sri-lankan-parliament-approves-emergency-regulations-to-contain-food-prices-2355118.html) against the US Dollar. Country is also staring at a massive food shortage. Consequently, Sri Lankan president Gotabaya Rajapaksa passed emergency regulations in the country last month to control the [prices of essential commodities and stop hoarding.](https://www.newindianexpress.com/world/2021/sep/06/sri-lankan-parliament-approves-emergency-regulations-to-contain-food-prices-2355118.html) 

At the root of this economic catastrophe is one man’s “vision” for making Sri Lanka the first country in the world to practice **organic-only agriculture**. On 29th April of this year, Rajapaksa announced that Sri Lanka will do only organic farming without consulting agriculture scientists or economists. This happened in a country where an island-wide [survey](http://www.veriteresearch.org/farmerspulse/) suggested that 90 percent farmers rely on chemicals, only 20 percent had any knowledge to transition to completely organic farming. 

**The Law of Unintended Consequences**

The law of unintended consequences suggests that “[actions of people — and especially of government— always have effects that are unanticipated or unintended.](https://www.econlib.org/library/Enc/UnintendedConsequences.html)” Vijay Kelkar and Ajay Shah in their book, *In Service of the Republic*, argue that “a government intervention that is intended to have a certain outcome will very often end up yielding a very different outcome.” 

In the domain of public policy, we always encounter and are witness to the law of unintended consequences. What’s happening in Sri Lanka is not new. Governments all over the world, driven by different incentive structures, resort to policies which may be well-intentioned, but often cause more harm than good. 

Governments tend to rely on price controls, quotas, subsidies, and import substitutions. All of these have the potential to distort markets.  For instance, in India, Prohibition on liquor in states like Gujarat and Bihar, taxes and cesses on cigarettes, et al. have all had unintended second or third order effects.

**The Unintended in Sri Lanka’s Organic Farming Push**

The law of unintended consequences often stems from ignoring the second order effects of a problem. Focusing on the “seen” while ignoring the “unseen” as famous French economic journalist Frédéric Bastiat had described it. Let’s see in detail what were the unintended consequences in the case of Sri Lanka’s push for organic. 

**The unintended #1: Loss in outputs and threat to food security**

The ban on organic farming has resulted in huge loss in farm outputs. On an average, crops in Sri Lanka have [witnessed reduction in yields somewhere between 19% and 25%](https://theprint.in/world/how-sri-lankas-overnight-flip-to-total-organic-farming-has-led-to-an-economic-disaster/728414/). The loss of farm outputs has also significantly hampered the exports in the island region. 

Tea is Sri Lanka’s biggest export, bringing in over $1.25 billion/year. The ban on chemical fertilizers, on which more than 90% of farmers depend, will now cut the average annual production to about 150 million kg from the current production of 300 million kg. This means losing 50% of the crops.  

This loss of farm outputs have caused massive food scarcity and threat to food security of the nation.

**The unintended #2: Increase in input costs hurting demand and exports**

Moving to organic has increased the input costs in Sri Lanka. Organic farming has exponentially [higher monetary input costs](https://theprint.in/world/how-sri-lankas-overnight-flip-to-total-organic-farming-has-led-to-an-economic-disaster/728414/) due to a lack of usage of pest and pathogen-resistant chemicals, which increases manual labour. Also the processing and marketing costs are higher for organic productions. These higher input costs have hurt demand and exports, which in turn have wreaked forex havoc and currency depreciation in this island nation.

**The unintended #3: Where is the required farmland?**

Eminent researchers have also noted that organic farming demands an increase in farmland due to its low yields. This results in deforestation, leading to large scale extinction of species and a rise in greenhouse emissions. For Sri Lanka, being primarily a tourism driven economy, that would mean disaster. 

**The unintended #4: Where do we get so much organic manure?**

Currently, Sri Lanka can produce 2-3 million tonnes of organic manure, generated through municipal organic waste. Organic paddy alone, however, will require 5 million tonnes and tea will require another 3 million. 

**Conclusion**

Nobel laureate Amartya Sen argues that democracies don’t face famines as the institutions in a democracy ensure accountability of political leadership. Sri Lanka, however, has virtually one party rule now. All top 5 positions in the government are occupied by the Rajapaksa family. Unsurprisingly, the government has the ability to act dictatorially on almost all levels. This explains why such a radical move with far-flung consequences could be taken. 

The important public policy lesson is that all actions have consequences, both seen and unseen. The seen effects come intuitively to most, even policy makers. The unseen, which are primarily second and third order effects, tend to appear with time. While these may be unintended, they are not necessarily unpredictable. Therefore, all policy actions should be subject to careful evaluation prior to roll out.

*Read more: [Basic Economics for Battling India’s Hepatitis B Crisis](https://spontaneousorder.in/basic-economics-for-battling-indias-hepatitis-b-crisis/)*

* * *

**About Rakesh Kumar Yadav**

Rakesh is a public policy consultant to various Central and State Governments. An MBA from Indian Institute of Management Kozhikode and an engineering graduate from Cochin University of Science and Technology, Rakesh’s interest lies in the areas of Public Policy, Economics, Technology, History and Contemporary politics. He regularly blogs on substack at https://rakeshkumaryadav.substack.com/

## Basic Economics for Battling India’s Hepatitis B Crisis

Original: https://www.spontaneousorder.in/p/basic-economics-for-battling-indias-hepatitis-b-crisis

Author: Spontaneous Order

Published: 2021-09-17T17:51:29.000Z

Topics: hepatitis-b, vaccination-policy, market-failures, public-health, health-policy

> It is estimated that approximately 40 million people in India are infected with Hepatitis B and as per National Centre For Disease Control, India has an “intermediate to high endemicity” of the disease. Though the Hepatitis B vaccination is a part of

**Summary:**

India faces a severe Hepatitis B crisis with approximately 40 million infected and intermediate-to-high endemicity, despite the vaccine being part of the Universal Immunization Programme; overall coverage is 86%, but birth-dose coverage is only 45% amid 79% institutional deliveries. The author justifies government intervention using basic economics, citing market failures: information asymmetry in healthcare workers' mishandling of 10-dose vaccine vials (ignoring WHO's 28-day open-vial policy), leading to wastage and low birth-dose uptake, and inadequate blood screening during transfusions. Vaccination generates positive externalities by curbing transmission via blood, sexual contact, or fluids, causing under-vaccination below socially optimal levels as marginal social benefit exceeds marginal social cost. Though health is not truly a public good—evidenced by COVID excludability—Article 21's right to life encompasses health. Proposed interventions include awareness campaigns, data management networks linking facilities for timely birth-doses (critical within 12-24 hours for infected mothers), training healthcare workers with nudge theory for efficiency, reallocating Ayushman Bharat funds (INR 5 lakh/family) from tertiary to preventive care (vaccine costs INR 45-500), and emulating Thailand's model which reduced HBsAg prevalence below 1% through similar universal birth-dosing and scalable organization. These measures will help meet the 2030 SDG to end viral hepatitis, minimizing costs and saving millions.

**Key points:**

- India's Hepatitis B birth-dose coverage remains at 45% due to healthcare workers' unawareness of WHO's 28-day open-vial policy, causing vaccine wastage and information asymmetry.
- Vaccination creates positive externalities by reducing transmission, justifying state intervention to achieve socially optimal coverage beyond private incentives.
- Government should implement data management systems connecting facilities for timely birth-doses and train workers using nudge theory to minimize wastage.
- Reallocate Ayushman Bharat funds to prevention, as vaccine doses cost INR 45-500, reducing secondary/tertiary care expenses.
- Adopt Thailand's scalable health organization model, which lowered HBsAg prevalence to <1%, to meet the 2030 viral hepatitis elimination SDG.

**By Bhavya Mehta**

* * *

It is estimated that approximately 40 million people in India are infected with Hepatitis B and as  per [National Centre For Disease Control](https://ncdc.gov.in/linkimages/guideline_hep20158117187417.pdf), India has an “intermediate to high endemicity” of the  disease. Though the Hepatitis B vaccination is a part of the Universal Immunization  Programme, the [coverage of the vaccine](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7012144/) is only 86%, with coverage at the birth-dose level being  as low as 45% even though almost 79% of the deliveries were estimated to be institutional  deliveries in the year 2015. I realised the severity of this issue during a conversation with my own doctor.  

India has officially committed to ending viral hepatitis by 2030 as a sustainable development  goal (SDG), and it is time that the government intervenes with adequate measures. The need for  such intervention can be justified through basic economics. Situations of market failures call for state  intervention and the issue of Hepatitis B certainly has quite a few market failures attached  to it. Market failures can be of four types: market power, information  asymmetry, externalities and public goods.  

Two major causes of Hepatitis B are mother-child transmission in pregnancy and infection through blood transfusion. Information asymmetry exists as there is a severe lack of knowledge  of resource management in healthcare workers in the country, that leads to wastage of vaccine in the 10-dose vial. The healthcare workers are unaware of the fact that the World Health  Organisation (WHO) has stated an [open-vial policy](https://apps.who.int/iris/bitstream/handle/10665/135972/WHO_IVB_14.07_eng.pdf) for a maximum of 28 days for the same. Due  to this market failure, the birth-dose coverage has remained at low levels in the country and has  also often led to misallocation and underutilisation of resources.  

Further, another problem of information asymmetry exists in blood transfusion cases as a result  of inadequate screening tests for the Hepatitis B virus (HBV). The inadequate screening tests  leave the patient with no way of knowing whether the blood being received by them is infected  with HBV.  

Though the right to health is not a fundamental right in the Constitution of India, multiple  judicial bodies have interpreted the Right to Life under Article 21 to include the right to health. The Supreme Court of India’s verdict in [Bandhua Mukti Morcha v Union of India & Ors](https://indiankanoon.org/doc/595099/) also  interpreted Article 21 in a similar manner, deeming the right to health a public good. A  public good is one that is non-rival and non-exclusionary in nature. While this can’t be deemed true in economic terms, given that health is in fact a private good. India’s pandemic experience reinforced this as hospital beds and Covid-19 treatment became incredibly excludable. However, recognising every individuals’ right to be healthy and safe from the disease of Hepatitis B is the need of the hour for India.   

Further, wider coverage of the Hepatitis B vaccine, much like public goods, will have positive externalities. The vaccine would not only protect the individual but also limit the possibility of transmission through blood transfusion, sexual transmission via semen, or any other exchange of bodily fluids. These are factors that a person would not directly take into  account when deciding how much they are willing to pay for the vaccine. While healthcare can’t be deemed a public good, the mismatch between marginal social benefit (MSB) and marginal social cost (MSC) will lead to a market failure as vaccinations will take place at a level that is less than what is socially optimal. 

Successful implementation of state intervention is possible if we closely look at the issues at  hand. The problem of wastage of vials showcases that there is a need for increasing awareness  and developing an effective network for data management for the vaccine vials. Though having  vaccine vial monitors (VVMs) for each vial would be the ideal and direct way of solving the  issue, the pandemic has led to a shortage of VVMs. This makes the open-vial policy of WHO, difficult to be implemented because of the lack of VVMs and proper monitoring of the  temperature-controlled storage at every center after opening of the vials. Since the birth dose is a  safety net that is critical for minimizing the chances of transmission, the only way of affording a  delay in the process of giving the dose, is through testing of the mother for Hepatitis B surface antigen (HBsAg) and the test coming out as negative for the same.  

What happens in case the test comes out as positive? The critical window for babies born to  mothers infected with the virus is only 12 to 24 hours. Hence, this calls for the government to  establish a data management system that can timely connect hospitals, healthcare centres in rural  as well as urban areas to specific central district or provincial hospitals that have proper facilities  for the temperature-controlled vaccine storage and provide for enough inflow of patients from  around the region.

As per a Times of India [report](https://timesofindia.indiatimes.com/home/science/your-insulin-hepatitis-b-vaccine-may-get%20cheaper/articleshow/54874681.cms), the price of a Hepatitis B vaccine ranges from INR 45 to INR 500 for paediatric and adult dose.  Under the Ayushman Bharat, INR 5 lakh is to be provided to each family in a year  for health coverage. These funds, however, are allocated for secondary and tertiary care. A small part of these funds, if used for prevention of Hepatitis B, can reduce secondary and tertiary costs for the government.It is important that India formulates periodic impact assessments of the HBV vaccine and make  changes to its model accordingly. The National Action Plan – Viral Hepatitis, launched in 2019,  must include adequate training of the healthcare workers so that they efficiently use the vaccines  to the best extent possible, leading to minimum wastage of the vials. To encourage healthcare workers to seek training, behavioural economics’ [nudge theory](https://www.businessballs.com/improving-workplace%20performance/nudge-theory/) can be employed. This would lead to positive reinforcement and improved resource management decisions at healthcare establishments. 

India can look at [Thailand’s model](https://www.sciencedirect.com/science/article/pii/S2055664020300030) for controlling the disease that has helped the nation to successfully reduce the HBsAg prevalence to <1%. Both India and Thailand have a policy of universal Hepatitis B vaccine birth dose and as per a [report](http://nhsrcindia.org/sites/default/files/Understanding%20of%20Thailand%20Health%20System%20%20-%20Note.pdf) published by National Health Systems Resource Centre, Thailand’s method of health care service organization is very similar to India and they in fact started by studying the example of Kerala. Hence, India can use the same to  scale up and enhance efficiency of health care services in a phased manner.  These state interventions shall not only help India meet its Sustainable Development Goal for 2030, but also play a pivotal role in saving the lives of millions of Indians. 

*Read more: [Is it time for a Vajpayee moment in Indian telecom?](https://spontaneousorder.in/is-it-time-for-a-vajpayee-moment-in-indian-telecom/)*

* * *

**About Bhavya Mehta**

Bhavya is a Science and Technology Policy Consultant at Centre for Civil society. She has a Post Graduate Diploma in Liberal Studies from Ashoka University and has previously worked in the field of risk consulting with Genpact Enterprise Risk Consulting. She also has a B.Com (Hons.) degree from the University of Delhi and a Korean language diploma from the language institute (Sejong Hakdang) of the South Korean Embassy in India. Bhavya also completed the Business Fundamentals Course (CORe) from Harvard Business School Online and is currently involved in learning coding as hobby. Bhavya enjoys studying about cultures and economies, cooking on weekends, and is a professionally trained western vocalist from Rock School London.

## Is it time for a Vajpayee moment in Indian telecom?

Original: https://www.spontaneousorder.in/p/is-it-time-for-a-vajpayee-moment-in-indian-telecom

Author: Spontaneous Order

Published: 2021-09-13T10:51:00.000Z

Topics: telecom-reform, agr-dues, telecom-policy, financial-stability

> The ubiquity of mobile phones in India, combined with low monthly charges, has empowered citizens as well as enterprises. The rapid growth of online payments over the past few years is a case in point. It would not have been likely without widespread ac..

**Summary:**

The Indian telecom sector, pivotal for mobile ubiquity enabling UPI payments and pandemic online education, faces financial strain from Supreme Court-mandated expanded AGR dues—including promotional offers, asset sales, bad debts, and commissions—requiring ~₹22,000 crore annual payments from FY 2021-22 to 2030-31, threatening Bharti Airtel and Vodafone Idea's stability. This risks tariff hikes harming consumer welfare, market consolidation into a duopoly, and bank exposures. Echoing the 1999 New Telecom Policy under Vajpayee—which allowed firms to exit fixed-fee contracts for AGR shares, resolved litigation, eased entry, and bolstered TRAI for competition—the author calls for a similar intervention. Proposal: Government accepts tradable zero-coupon bonds (discounted to sovereign yield, 10-year tenure matching court schedule) for dues, easing cash flows without interest or tariffs. Pair with vouchers granting 10% equity option at six-month average issuance price, plus an independent Supreme Court judge-chaired committee for transparent dues calculation. This classical-liberal framework safeguards competition, financial stability, and growth while letting taxpayers capture upside, preventing regulatory instability's investor toll.

**Key points:**

- Supreme Court expanded AGR dues impose ~₹22,000 crore annual payments on telecom firms, risking tariff hikes, duopoly, and financial instability.
- Government should accept discounted zero-coupon bonds (10-year, tradable) for AGR dues to relieve cash flows without tariff increases.
- Issue equity vouchers alongside bonds for 10% government stake option at issuance price average, capturing taxpayer upside.
- Form independent expert committee chaired by retired Supreme Court judge for transparent AGR calculation.

**By Niranjan Rajadhyaksha**

* * *

The ubiquity of mobile phones in India, combined with low monthly charges, has empowered citizens as well as enterprises. The rapid growth of online payments over the past few years is a case in point. It would not have been likely without widespread access to mobile phones that can use digital public goods such as the United Payments Interface. The online education—however imperfect—provided to millions of children during the pandemic would not have been possible without mobile communications. The need to maintain a robust telecom sector is important for country-wide access to citizens and for accelerating economic growth. The ongoing financial strain in the telecom sector thus requires policy attention.

We argue here that the Indian telecom sector is at the cusp of another ‘Vajpayee moment’. The context is worth reiterating. India opened up the telecom sector to private investment in 1994. Aggressive bidding by companies to get licences led to financial stress, including defaults. The New Telecom Policy was announced in 1999. The government led by Atal Bihari Vajpayee offered a grand bargain that set the stage for the telecom sector’s subsequent success story.

The government allowed telecom companies that held licences under the earlier auction to exit the contracts they had signed. Companies were allowed to shift from paying fixed licence fees to paying the government a share of their adjusted gross revenues (AGR). On their part, telecom companies agreed to withdraw the multiple cases that had led the entire telecom sector into a legal quagmire. The New Telecom Policy also made it clear that it sought to “transform in a time-bound manner the telecommunications sector to a greater competitive environment in both urban and rural areas providing equal opportunities and level-playing field for all players”. Among the steps taken in that direction were easing of entry restrictions and strengthening the Telecom Regulatory Authority of India.

It has been about a year since the Supreme Court instructed telecom companies to share not just their core telecom revenues with the government, but also to take into account promotional offers to consumers, income from the sale of assets, bad debts that were written off, and dealer commissions. The apex court has allowed the affected telecom companies to make a small upfront payment and then pay their excess AGR dues to the government in ten annual instalments, from fiscal year 2021-22 to 2030-31, in an attempt to ease their immediate burden, which has raised concerns about the financial stability of Bharti Airtel and Vodafone Idea. Analysts estimate that the extra annual payments by all telecom firms could be around ₹22,000 crore a year.

The situation right now is different from the one that led to the introduction of the New Telecom Policy 25 years ago. However, it is similar in the sense that there is a good case for policy intervention by the government. There are three broad policy concerns that need to be addressed in the context of the telecom sector: consumer welfare, competition and financial stability. Possible tariff hikes to generate extra revenues to meet AGR commitments will hurt consumer access. The inability to charge consumers more could mean that the three-player telecom market becomes a duopoly, through either a firm’s failure or acquisition. The banks that have lent to domestic telecom companies are also worried about their exposure in case AGR dues overwhelm the operating cash flows of these companies.

Here is one possible solution to be pursued by the government. The administration should accept special zero-coupon bonds worth the entire amount due from telecom companies that have AGR funding issues, at a discount to face value, based on the comparable sovereign bond yield at the time of issue. The zero-coupon structure would mean that telecom companies will have no immediate interest costs, thus easing pressures on cash flows without tariff increases. The ideal tenure of the bonds could be 10 years, to match the payment schedule given by the Supreme Court in its decision in September 2020, but higher tenures can also be considered. These zero-coupon telecom bonds should be tradable instruments, so that the government does not necessarily have to hold on to them till maturity.

However, taxpayers should also be able to capture the upside of this investment in the telecom sector. The zero-coupon bonds that we are suggesting here should be accompanied by a voucher which gives the government an option to get a 10% equity stake in the issuing companies, at the six-month average share price at the time of the vouchers’ issue. Admittedly, the details of both the pricing as well as the convertibility clauses will be important issues to work on. The government should also set up an independent committee of experts, chaired by a retired judge of the Supreme Court, to calculate the excess AGR dues to be paid based on a transparent formula.

The solution we are suggesting here is only a broad framework—it would provide telecom companies with funding to meet their AGR commitments, it does not impose any immediate pressure on cash flows because of interest payments, and it allows the government to make capital gains through its equity stakes in telecom companies. A vibrant telecom sector is central to economic growth, and the past decade has seen investors suffer because of an unstable regulatory regime. Matters have now come to a head, and an innovative public policy response is needed. The Indian telecom success story after the telecom policy reforms introduced in 1999 by the A.B. Vajpayee government show that the benefits of such policy intervention can have a multiplier effect across the economy.

*This article was originally published in [Livemint](https://www.livemint.com/opinion/online-views/a-new-vajpayee-moment-for-the-troubled-indian-telecom-sector-11631123688457.html) on 9 September 2021*

*Read more: [Ideological Transition: Bollywood and the Missing Entrepreneur](https://spontaneousorder.in/ideological-transition-bollywood-and-the-missing-entrepreneur/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Ideological Transition: Bollywood and the Missing Entrepreneur

Original: https://www.spontaneousorder.in/p/ideological-transition-bollywood-and-the-missing-entrepreneur

Author: Spontaneous Order

Published: 2021-09-08T12:03:05.000Z

Topics: bollywood-ideology, entrepreneurship, cultural-shift, indian-economy

> Pop culture is often held up by scholars as a mirror to society. In a country as diverse as India, no single form of pop culture can engulf all that India has to offer. However, Bollywood, India’s largest film industry, comes close. In my opinion, it ca

**Summary:**

Bollywood films reflect India's ideological evolution from socialist suspicion of wealth and businessmen in the 1950s-1960s—evident in movies like *Upkar* and *Do Beegha Zameen* where poor villagers are heroes and wealthy villains embody vices—to embracing classical liberal values of individualism, self-interest, success, and wealth by the late 1980s and 1990s. Films like *Swarg* (1990) portrayed noble businessmen, while 1990s blockbusters featured wealthy protagonists flaunting conspicuous consumption. The 2000s marked a milestone with *Guru* (2007) critiquing the License Raj and celebrating entrepreneurship's social benefits, followed by *Rocket Singh* (2009) and *Band Baaja Baaraat* (2010), signaling market self-correction over state intervention. However, the 2010s reversed this with bureaucrat and uniformed heroes in hits like *Dabangg* and *Singham*, attributed to the 6th Central Pay Commission raising government salaries and the 2008 Global Financial Crisis causing private sector layoffs—UPSC applicants surged from 325,000 in 2008 to 550,000 in 2010 and 1 million in 2014. Despite this, India's startup boom, producing 8 unicorns in the decade's first half versus 8 in 2018 alone and 26 this year, foreshadows entrepreneurship's return as aspirational, likely reviving entrepreneur protagonists in Bollywood during the 2020s.

**Key points:**

- Bollywood shifted from portraying businessmen as villains in 1950s-60s socialist-era films to heroes in late 1980s-2000s movies like *Guru* and *Rocket Singh*.
- The 2010s resurgence of bureaucrat protagonists stemmed from government pay hikes via the 6th Pay Commission and private sector layoffs post-2008 crisis, boosting UPSC applicants from 325,000 in 2008 to 1 million in 2014.
- India's startup ecosystem exploded with 8 unicorns in early 2010s versus 8 in 2018 alone and 26 this year, poised to restore entrepreneurship's cultural prestige in Bollywood.

**By Yuvraj**

* * *

Pop culture is often held up by scholars as a mirror to society. In a country as diverse as India, no single form of pop culture can engulf all that India has to offer. However, Bollywood, India’s largest film industry, comes close.

In my opinion, it can be a reasonably effective tool to gauge the collective consciousness of Indian society. Unsurprisingly, much like Indian society, it is dramatically complex. There are multiple ways to analyse the workings within and the films produced by the industry.  Analysis in this essay, however, would emphasise the changing pattern of the socio-economic ideology within Bollywood films and their attitude towards classical liberal values viz. individualism, self-interest, success and wealth.

A recent video [series](https://indianliberals.in/content/role-of-ideology-in-indias-liberalisation/) by Nimish Adhia, Associate Professor at Manhattanville College, delves deeper into the ideological shift across Bollywood films. Adhia observes that in the 1950s and 60s, when the dominant ideology of the Indian political elite was socialism, Bollywood also followed suit. Films had a strong socialistic fervor and portrayed a suspicion of the businessman. This was also congruent with the Hindu caste system that shaped the ideological beliefs of a significant share of the population at the time. The caste system did not give a high status to businessmen, keeping them in the third *varna*. 

Commonly expressed themes in the films of that era placed emphasis on the common good over self-interest, on suppression of individual desire and on a pejorative portrayal of the wealthy. 

Conceptually speaking, the protagonist in any story is the personified repository of virtues and the antagonist is the personified repository of vices, as per the writer of the story. So, the morality conveyed by the story can be understood by the characteristics of its protagonist and antagonist.

**Ideological Transition: 1950s – 1990s**

Observing the films of the 1950s and 60s, one sees that the “hero” is mostly poor, often a villager, but hardly ever someone wealthy. Wealth was often associated with evil qualities, portrayed by the “villain”. For instance, in the film *Upkar*, the protagonist, played by Manoj Kumar, is a noble hearted villager who keeps the country’s interest over his own. The protagonist, *Bharat,* blames Indian farmers, who wish to migrate to cities, and wealthy businessmen for the country’s poverty.

The same ideological pattern could be seen in *Do Beegha Zameen.* In the film, a poor villager, played by Balraj Sahni, suffers land alienation because a company wants to build a factory on the land. The villains of the film are the landlord turned businessman Harman Singh and the city of Calcutta. 

The ideological tide begins to turn in the late 1980s, when the wealthy cease to be seen in the pejorative light of the past. In a 1990 film, *Swarg,* Rajesh Khanna plays the role of a noble-hearted businessman, who is betrayed by an unscrupulous businessman. His loyal servant, played by Govinda, goes on to become a *wealthy* film star who avenges the betrayal. This marked a positive view of upward economic mobility. 

This shift in perspective is also observed by economic historian and author, Deirdre McCloskey. McCloskey in her book, *Bourgeoisie Dignity,* studies several countries in the period before their respective industrial revolutions. She finds that economic growth exploded in all of them once wealth creators were given a respectable status and freedom within those societies. Further, she claims that this change in the ideology of the society could also be gauged by the changing ideology in their pop cultures. About Bollywood, she says that in the 1970s the protagonists were mostly bureaucrats and policemen. But by the late 1980s, the protagonists became innovators and businessmen. According to her, Indian society by the late 1980s was ready to give the entrepreneurial class dignity and liberty, which eventually happened in 1991. 

In the 1990s, Bollywood saw the entry of the Khan trio and filmmakers such as Sooraj Barjatya and Karan Johar. The protagonists of this era were “Rahuls” and “Prems”, who were mostly from rich backgrounds and didn’t shy away from flaunting their wealth. In *Kabhi Khushi Kabhi Gham,* Shah Rukh Khan’s entry in the film was in an actual helicopter! 

This marked the moral acceptance of another liberal value – conspicuous consumption. It showed that the masses (at least the section of society who were the primary film audience) who had previously accepted the notion of suppressing individual desire for the common good were no longer in the mood to do so.

**What Changed in the 2000s**

By the turn of the millennium, liberal values, in particular wealth accumulation, had made a moral transition from vices to virtues. But their virtuosity was still implicit, that they were a peripheral aspect of the protagonist’s personality and the story. Although the protagonists were businessmen, their entrepreneurship was not the core of the film, which was to be the next stage in the moral transition.

This began to happen towards the end of the 2000s with the release of the 2007 film *Guru*. The film, in many ways, is a milestone – an antithesis of the Nehruvian consensus of the 1950s. The film shows the State and its License-permit Raj as the villains. As a complete contradiction of *Upkar,* the film showcases the social benefits of individual entrepreneurship and that the two are not mutually exclusive. 

*Guru* was followed by a series of films with entrepreneur protagonists. Next came *Rocket Singh* in 2009 and *Band Baaja Baarat* in 2010. *Rocket Singh* shows in the first half that the mighty of the industry are quasi crooks but eventually the protagonist succeeds because he gives much better service to the clients. That was intelligent because it implied that the market, if left free, can correct itself on its own and the heavy hand of the State is not required, another repudiation of the Nehruvian consensus.

By 2010 the trend of entrepreneurship-based films was firmly in place. Cinema observers predicted the years ahead as the decade of the ‘entrepreneur’ in Bollywood. However, the 2010s witnessed the return of the bureaucrat. 

**Why did the Bureaucrat Return?**

The decade saw the rise of the *Dabangg* and *Singham* series, which were mega hits. Indian actor Akshay Kumar donned his nationalist avatar playing an army officer in *Holiday* and a CRPF officer in *Baby*. Even the younger generation joined in, when Ranveer Singh played a policeman in *Simbaa* and Tiger Shroff played an army officer in *War.*

So, why did the seemingly inevitable flood of entrepreneurship in Bollywood films fail to arrive? Well, I don’t pretend to know the answer, however, I do have a theory.

Towards the end of the decade of 2000s, India was still experiencing the effects of unprecedented economic growth with GDP growth rate [surging beyond 9%](https://tradingeconomics.com/india/gdp-growth-annual) from 2004 to the first half of 2008. The private sector was the go-to place for talented people. Then two significant events happened – 6th Central Pay Commission and the Global financial crisis.

The first dramatically increased the salaries of Central Government employees and the second resulted in mass layoffs in the private sector. The two events increased the desirability of government jobs and made the private sector less attractive. As per my deduction, a significant section of youth turned away from the vagaries of the market and sought a secure government job. Entrepreneurship was no longer ‘cool’ in the eyes of the youth. 

This change can be gauged by the fact that whereas in 2008 about [3,25,000 candidates](https://www.clearias.com/number-of-candidates-apply-ias-exam/) had appeared for the UPSC exam, the number increased to about 5,50,000 in 2010, and to about 10 lakhs in 2014.

However, Indian youth are diverse and can’t be reduced to a monolithic category. Another important undercurrent was taking shape during the 2010s – the coming of age of the Indian start-up ecosystem. As the decade progressed, this undercurrent has taken the shape of a tsunami. While the first five years of the decade, in total, produced 8 unicorns, the year 2018 alone saw an equal number of start-ups joining the [1-billion-dollar club](https://www.ventureintelligence.com/Indian-Unicorn-Tracker.php). The current year has already seen the rise of 26 unicorns, at the last count.

This is the light at the end of the tunnel. As the unicorn revolution gains speed, entrepreneurship will keep on getting a more aspirational status in Indian society. Bollywood would certainly track this trend. Eventually, the missing flood of entrepreneur protagonists of the 2010s should return to the silver screen in the 2020s.

*Read more: [India should fix its warped state-citizen relationship](https://spontaneousorder.in/india-should-fix-its-warped-state-citizen-relationship/)*

* * *

**About Yuvraj**

Yuvraj is a part time researcher and aspiring public intellectual. He is an avid reader and leans libertarian. His interests include history, economics and philosophy

## India should fix its warped state-citizen relationship

Original: https://www.spontaneousorder.in/p/india-should-fix-its-warped-state-citizen-relationship

Author: Spontaneous Order

Published: 2021-09-06T11:05:55.000Z

Topics: public-goods, night-watchman-state, state-capacity, indian-state

> The Indian state is the antithesis of what any state should do. It barely provides public goods and is instead overwhelmingly present in provisioning and subsidizing private goods or regulating private interactions. This extends to everything. Instead o..

**Summary:**

The Indian state exemplifies a warped state-citizen relationship by neglecting public goods like law and order, criminal justice, contract enforcement, and infrastructure, while excessively provisioning and subsidizing private goods such as cooking gas, toilets, loan waivers, and farm subsidies. This pattern, entrenched post-liberalization and intensified under Narendra Modi, favors electoral politics and cronyism over equitable growth, disproportionately harming minorities and women. Classical liberals, from Adam Smith onward, advocate a night-watchman state limited to preventing predation via law/order, contracts, and basic public goods, which fueled Western development. Contrasting failed planning states and expansive welfare democracies like Scandinavia, which invested in public goods but now face innovation-stifling redistribution and fiscal strains, India must radically redesign: exit private goods provisioning, dismantle the socialist-regulatory overreach stifling enterprises from news channels to universities, and build capacity for public goods delivery. This inversion would spur private investment, exchange, economic growth, job creation for millions, and citizen safety from violence—urgently needed amid health, economic, and fiscal crises.

**Key points:**

- Indian state fails to provide public goods like law/order and contracts, instead subsidizing private entitlements like cooking gas and loan waivers.
- Post-liberalization shift prioritizes electoral handouts over infrastructure, worsening under Modi government.
- Adopt night-watchman state model: exit private goods provisioning, roll back regulations, focus on public goods for growth and safety.
- Redesign state-citizen relationship to boost private enterprise, accommodate job seekers, and signal non-interference.

**By Shruti Rajagopalan**

* * *

The Indian state is the antithesis of what any state should do. It barely provides public goods and is instead overwhelmingly present in provisioning and subsidizing private goods or regulating private interactions.

This extends to everything. Instead of law and order, the government focuses on providing cooking gas subsidies. Instead of enforcing justice for crimes against Dalits, the state absolves itself of responsibility, often by pointing to reservations. Instead of enforcing contracts and having fair rules for all private enterprise, the state is seen to pick cronies as economic winners, granting them subsidies and monopoly privileges. Instead of investing in strengthening public goods and services, the state games electoral politics by giving away private entitlements. As always, religious and caste minorities and women are the worst affected, by the underprovisioning of public goods.

This shift from public goods to unequal private entitlements has been the modus operandi of the bloated and costly Indian state, post-liberalization. It only seems to have strengthened under the Narendra Modi government. Toilets instead of sewage systems, government jobs instead of a functional public education system, loan waivers instead of contract enforcement, free credit instead of well-regulated banking, and farm subsidies instead of farm infrastructure have been the markers of modern India.

Since Adam Smith, classical liberals across the world and centuries have made a passionate case for a night watchman state. This is a government that prevents private predation by maintaining law and order, enforcing contracts, and administering criminal justice, and limits itself to provisioning basic public goods. While this model served the development of the western world in the 19th and early 20th century, one is hard-pressed to find a night watchman state today, as most countries have drifted from this liberal vision.

One type of drift is the planning state that arose in the early 20th century. These economies envisaged that nearly all goods and services, not just public goods, would be produced or controlled by the government. We now know how central planning devastated economies, causing famines that killed millions of people. The political control over individual freedoms, stifling of free speech, use of genocide, etc., by communist regimes are also well known. While there are few takers for central planning today, there is no doubt that some socialist states invested in public goods and infrastructure. Some erstwhile socialist states continue to benefit from those investments, though their citizens paid the price for socialist tyranny.

The other type of drift is that of the liberal democracy with an ever-expanding welfare state, a consequence of the redistributive nature of democratic politics. The highly romanticized modern ideal are the Scandinavian countries, followed by western Europe and to a less extent, the US. These states have also made massive investments in public goods and infrastructure, though their high taxation and redistribution have lost them innovators.

No matter where Indians find inspiration, successful states have demonstrated a strong capacity to deliver on public goods, including law and order, a functional criminal justice system, enforcement of contracts in market economies, strong public health and sanitation systems, and even quasi-public goods like universal primary education. Public goods infrastructure increases private investment and fosters private exchange—the only long-term recipe for growth.

Increasingly, for even the most developed economies, large regulatory state and welfare entitlements that impede innovation have become a problem. With an ageing population and limited immigration, the long-term feasibility of such a state-citizen relationship seems fiscally impossible. The pandemic, prompting large amounts of government stimulus, only makes the problem more immediate.

The Indian approach, even without the economic havoc caused by the pandemic, was unsustainable. The government spends too much on government-provided private goods while largely failing to provide public goods. Spending on private entitlements has two effects. First, the fiscal requirements of the Indian state lead to high deficits and borrowing that crowd out private investment. Second, money spent on public goods provisioning is likely to attract more private investment and private exchange.

The way out is not marginal reforms, but a complete redesign of the state-citizen relationship. The Indian state must turn its approach upside down, exit its provisioning of private goods, and significantly roll back the socialist and regulatory state that is overwhelming and stifling every aspect of private life—whether it is establishing a news channel, a power plant, a small restaurant, or a university. Instead, it should focus only on the provisioning of public goods and developing strong state capacity to deliver these.

This is the solution to many problems—increasing economic growth, expanding private enterprise to accommodate millions of job seekers, signalling to the private sector that the government will not stifle or crowd out business, and signalling to citizens that they are safe from private and state-sanctioned violence.

As India battles a health crisis, an economic slump and a fiscal crisis, it has never been more urgent to redefine the state-citizen relationship.

*This article was originally published in [Livemint](https://www.livemint.com/opinion/columns/india-should-fix-its-warped-state-citizen-relationship-11602513627251.html) on 12 October 2020*

*Read more: [The Road to Normalcy: India’s Vaccine Policy](https://spontaneousorder.in/the-road-to-normalcy-indias-vaccine-policy/)*

* * *

**About Shruti Rajagopalan**

Advisor, Centre for Civil Society Senior Research Fellow, Mercatus Center at George Mason University

## The Road to Normalcy: India’s Vaccine Policy

Original: https://www.spontaneousorder.in/p/the-road-to-normalcy-indias-vaccine-policy

Author: Spontaneous Order

Published: 2021-09-03T12:37:33.000Z

Topics: vaccine-policy, state-intervention, private-procurement, public-health, self-reliance

> India’s National Vaccine Policy has been through various ebbs & flows over the course of the past few months. The procurement policy witnessed several iterations itself – from centralised to decentralised to again being centralised. While issues like

**Summary:**

India's vaccine policy shifted from centralized procurement to decentralized in April 2021 amid second-wave criticism, pitting states against each other, fragmenting the market, and forcing higher prices, before reverting to centralization on June 21 due to states' financial constraints and global shortages. Self-reliance burdened two firms—Serum Institute and Bharat Biotech—with supplying 950 million adults, creating a duopoly and inelastic supply amid urgency. While state intervention was necessary for procurement, last-mile delivery, and addressing positive externalities, it erred by initially banning private procurement, missing spontaneous order in urban areas where private hospitals in Bengaluru administered nearly half the doses. This restricted coverage for low-income groups like Dharavi's 11% inoculation rate, exacerbated by slot shortages rather than hesitancy. Rural progress varies, with successes like 100% vaccination in Maharashtra's Janefal via local leaders and ASHAs, underscoring need for localized nudges and structural rural health fixes. Over 60 crore doses administered, 50% adults with first dose, but August's 58.46 lakh daily pace falls short of 1 crore needed by December 2021. Classical-liberal lens calls for limited, coordinated state role enabling private markets and local solutions to sustain pace, equity across urban-rural/gender/economic lines ahead of third wave.

**Key points:**

- State intervention was essential for self-reliant vaccine supply and externalities but failed by initially prohibiting private procurement, hindering urban coverage via spontaneous order.
- Decentralized procurement fragmented markets, raised state costs (up to 30% health budgets), and proved unviable, necessitating return to centralization.
- Local bottom-up efforts by ASHAs and leaders achieved 100% vaccination in some rural areas, highlighting need for localized incentives over top-down mandates.
- India administered 60 crore doses with 50% adults getting first jab, but must accelerate to 1 crore daily to meet December 2021 target amid equity gaps.

**By Shiladitya Mishra**

* * *

India’s National Vaccine Policy has been through various ebbs & flows over the course of the past few months. The procurement policy witnessed several iterations itself – from centralised to decentralised to again being centralised. While issues like market fragmentation and supply constraint have been resolved to an extent, new issues have arisen in the form of urban-rural divide, gender divide and variation across states in vaccine coverage. 

Instead of free-riding on the approval & trials of vaccines approved in OECD countries, India opted for self-reliance. This meant that the burden of supply for an adult population of about 950 million was placed on just two companies – Serum Institute & Bharat Biotech. While the procurement process was initially centralised, the Centre gave in to the [demands for decentralisation of procurement](https://www.news18.com/news/india/creating-hesitancy-shifting-demands-how-the-opposition-played-mind-games-and-vaccine-politics-with-india-3820406.html) in April, after coming under heat for its unpreparedness during the disastrous second wave. The [liberalised pricing policy](https://www.mohfw.gov.in/pdf/LiberalisedPricingandAcceleratedNationalCovid19VaccinationStrategy2042021.pdf) pitted states against each other & fragmented the market. States had to purchase vaccines at [higher prices](https://indianexpress.com/article/india/covid-vaccine-price-sii-states-centre-7283762/), a move derided by most states. In addition, many states decided to provide free vaccines for political gains. Some effectively earmarked [30% of their health expenditures](https://www.business-standard.com/article/current-affairs/india-s-8-poorest-states-may-spend-30-health-budget-on-covid-vaccination-121051100137_1.html), redirecting money from other development schemes. [Many states floated global tenders, but the entire decentralised process turned out to be a dead-end](https://carnegieindia.org/2021/05/19/what-is-happening-to-india-s-covid-19-vaccine-program-pub-84570) because of financial constraints, price caps, & overall shortage in the global market. Fortunately, the Union Govt. reverted to the erstwhile centralised policy on June 21st. 

**Was State Intervention Needed?** 

While competition and prices are important for efficient functioning of the market, vaccine self-reliance demanded state intervention. The state became indispensable for ensuring large scale procurement and last-mile delivery. 

With the adoption of a self-reliant policy, free market procurement became [infeasible due to simple economics: the supply of vaccines is inelastic](https://scroll.in/article/992763/indias-plan-to-fragment-the-vaccine-market-across-the-states-is-mind-bogglingly-bad-economics). This means, an increase in prices will not lead to a proportionate increase in supply in the short run due to production constraints. The unintended consequences of reliance on indigenous vaccine makers created a duopoly of SII & Bharat Biotech that amplified supply issues. 

During the short-lived liberalisation of vaccine policy, one could argue that India would have become the world’s largest producer of vaccines, but the case of Covid-19 vaccines is completely different because of the uncertainty and urgency of the situation. 

Lastly, vaccine markets are susceptible to market failure because the marginal social benefit is more than private benefits. This creates a positive externality and state intervention to finance the positive externality is the suggested policy. 

**Where did State Intervention Go Wrong?**

The initial restriction on private procurement and distribution by the state led to unfortunate consequences. This goes to show that even when state intervention is needed, the state has to be controlled, coordinated, and limited in its area of interference. The push for domestic vaccines and the [inability to successfully negotiate (to this date)](https://theprint.in/health/india-unlikely-to-give-indemnity-to-foreign-vaccines-may-consider-only-if-shortage-persists/710493/) with foreign players like Pfizer & Moderna hasn’t helped the case.

In addition, there was a demand by private buyers and willingness on the part of private sellers to sell at a competitive price; the spontaneous order that would have resulted from this would have ensured better coverage especially in the urban agglomerations. Given India’s limited state capacity, this would have helped the government in catering to the vulnerable sections of the population more effectively. 

This was evident when the restriction was removed in May. Private hospitals, residential societies were quick to organise vaccination camps at competitive prices. For example, [in Bengaluru, nearly half the doses were given in private hospitals.](https://www.thenewsminute.com/article/close-half-all-covid-19-jabs-bengaluru-were-given-private-hospitals-152141) While most big cities have covered a substantial amount of their population, a considerable amount of people, especially those belonging to low-income groups, remain unvaccinated. For instance, in Dharavi in Mumbai, only 11% are inoculated. Policymakers have tried to address the issue by making vaccination mandatory for entry into public transport, malls, etc. The measure is bound to fail because the bigger problem within low-income groups isn’t vaccine hesitancy but the shortage of free vaccination slots in large cities. The rising load of pending second doses has only added to the stress on the government vaccination centres. 

Daily administration of doses has also been scaled up in rural India. While vaccine hesitancy is not as bad as once predicted, the issue remains. The [reasons vary from village to village](https://www.ideasforindia.in/topics/governance/covid-19-vaccine-hesitancy-trends-across-states-over-time.html%20%20), with religion, misinformation and an absent sense of urgency having a role to play. Local governments have to be proactive in ensuring that the right incentives are provided to nudge people to get vaccinated, wherever needed. In [Maharashtra’s remote village of Janefal](https://www.orfonline.org/research/indias-covid-19-vaccination-campaign/), through bottom-up approach and confidence-building measures, 100% of the eligible population has been vaccinated. A major role in this was played by the ASHAs and local leaders. This clearly indicates that the national policy would be successful when localised policies are successful. This is particularly true for rural India, where quality of healthcare services and infrastructure remains well behind its urban counterparts. It is paramount for policymakers to address the structural issues in the rural health sector, and the socio-cultural & economic constraints that are deep-rooted. The problems lie in the system, and not the people. 

Seven months since India’s vaccination programme took off, [more than 60 crore doses](https://timesofindia.indiatimes.com/india/over-63-crore-covid-vaccine-doses-administered-in-india-so-far/articleshow/85717564.cms) have been administered in the country. While it’s a commendable number, even more so given India’s limited state capacity – the pace (current average of [58.46 lakh daily](https://indianexpress.com/article/india/coronavirus-1-25-cr-jabs-on-last-day-august-sees-18-1-crore-doses-7481205/) for the month of August) is nowhere close to that required (average of 1 crore daily) to fully vaccinate the target adult population by December 2021. 

The challenge that remains to be seen is whether the current pace can be sustained and improved upon, quick enough to dampen the effects of an impending third wave. The majority of the government’s year end projections are based on vaccines that are yet to arrive in the market. The emergency approval, pricing, as well as supply constraints of these vaccines is yet to be seen. Another challenge to be tackled is the inequitable distribution of vaccines be it on [gendered lines](https://www.cnbctv18.com/healthcare/as-3rd-covid-19-wave-looms-expert-points-to-gender-gap-challenge-in-inoculation-drive-10478371.htm) or [economic lines](https://qz.com/india/2041072/indias-cowin-has-many-paid-vaccination-slots-despite-shortage/). This can only be effectively addressed through local governments, by capitalizing on human resources (volunteers, local leaders, ASHAs, etc.) and by ramping up the supply chain infrastructure. With a substantial distance covered ([50% of adults jabbed with 1st dose](https://indianexpress.com/article/india/coronavirus-vaccine-milestone-reached-50-per-cent-have-got-at-least-one-dose-7472786/)), and an even longer path yet to traverse, it remains to be seen what swerves the vaccine policy will take.

*Read more: [Inflation in India isn’t quite the same as in other large economies](https://spontaneousorder.in/inflation-in-india-isnt-quite-the-same-as-in-other-large-economies/)*

* * *

**About Shiladitya Mishra**

Shiladitya is in his final year of B.A. Hons. (Economics) at SGTB Khalsa College, University of Delhi, together with pursuing a BSc.in Data Science & Programming from IIT Madras. He has a keen interest in the fields of Political Economy, Development Economics, Data Analytics and Public Policy.

## Inflation in India isn’t quite the same as in other large economies

Original: https://www.spontaneousorder.in/p/inflation-in-india-isnt-quite-the-same-as-in-other-large-economies

Author: Spontaneous Order

Published: 2021-09-01T13:11:34.000Z

Topics: indian-inflation, monetary-policy, rbi, inflation-targeting

> Indian inflation has been outside the tolerance band of the Reserve Bank of India (RBI) for 10 out of the 16 months since April 2020, which was the first full month after the pandemic hit economic activity. The new monetary policy framework says that th..

**Summary:**

Indian inflation has persistently exceeded the RBI's 4% target with a 6% upper tolerance band, outside the band for 10 of 16 months since April 2020, technically failing the monetary policy framework despite unreliable lockdown data. After brief respites, CPI inflation remains elevated around 5-6%, with RBI projecting 5.9% in Q2 FY22, falling to 5.3% in Q3, then rising to 5.8% in Q4, aided by high base effects. Globally, supply disruptions rather than demand drive pressures, with India's rate higher than most major economies but below Brazil, Mexico, Turkey, Pakistan, Russia, and far from Argentina's 51% in July; notably, 24 of 35 targeted economies exceeded targets that month. Unlike peers, India's inflation was high throughout the pandemic, not just post-recovery. Rising expectations question if RBI has shifted to a de facto 6% target; MPC minutes distinguish target from band. RBI must reaffirm 4% commitment as pandemic eases, pursuing gradual normalization—money-market rates to corridor, reverse repo hike, neutral stance, then repo increase—to balance recovery without entrenching inflation.

**Key points:**

- Indian CPI inflation exceeded RBI's tolerance band for 10 of 16 months since April 2020.
- India's inflation remained high during the pandemic, unlike most economies where it surged post-recovery.
- RBI should explicitly reaffirm its 4% inflation target to anchor rising expectations, distinguishing it from the 6% upper band.
- Monetary policy normalization will proceed gradually in four steps starting with money-market rates.
- In July 2021, 24 of 35 major economies with inflation targets exceeded them.

**By Niranjan Rajadhyaksha**

* * *

Indian inflation has been outside the tolerance band of the Reserve Bank of India (RBI) for 10 out of the 16 months since April 2020, which was the first full month after the pandemic hit economic activity. The new monetary policy framework says that the Indian central bank has failed in its main task of keeping inflation under control if average inflation is more than 6% for three consecutive quarters. That did happen in the first three quarters of fiscal year 2020-21, from April to December, but the fact that government statisticians were unable to collect enough data from retail markets during the first national lockdown meant that inflation estimates for those months were not considered reliable enough to go into RBI’s record. That is understandable.

Price pressures did seem to ease during December 2020 and January 2021. There was also a sharp fall in April 2021. However, inflation jumped again after these short respites. The July data also offers some hope. Inflation in consumer prices came down more sharply than expected. It is quite likely that it will continue to drift downwards over the next few months, helped by the high base of the corresponding months in the previous year. RBI estimates that average inflation will come down from 5.9% in the second quarter to 5.3% in the third quarter, before it accelerates again to 5.8% in the fourth quarter of the ongoing fiscal year.

Central banks around the world say that the recent increase in price pressures is because of disruptions in supply chains, rather than excess demand. They are also wary of premature withdrawal of monetary policy support from economies that are not yet out of the woods. The Indian central bank broadly makes the same argument, though the minutes of the latest meeting of the monetary policy committee (MPC) clearly shows that there are now concerns about staying on the current path for too long. The bond-market consensus is that monetary policy normalization will move forward in four steps: Money-market rates rising to get back into the policy corridor, an increase in the reverse repo rate, a change in the monetary policy stance from accommodative to neutral, and finally an increase in the repo rate. This will unfold very gradually, rather than in sudden leaps that can unsettle the bond market as well as the underlying economy.

This is also a good time to see where India stands on the inflation front compared to the other major economies. The sharp spike in US inflation has obviously captured a lot of attention. There are rising inflation concerns in some other countries, such as Germany. Indian inflation is still comparatively high compared to other major economies, both in developed and emerging markets. Countries such as Brazil, Mexico, Turkey, Pakistan and Russia have higher inflation than India does. Argentina is a clear outlier, with an inflation rate for July in excess of 51%.

Another way to examine the international price situation is to look at where inflation is compared to the targets given to central banks in various countries. I took a look at 35 major economies with formal inflation targets, including the multinational euro area. In July, inflation in 24 of these economies was running ahead of their respective inflation targets (either their point targets or the middle of a range, depending on the formal mandate). Among the handful of exceptions that managed to keep inflation close to target were China, Japan, Britain, Sweden, Switzerland, Indonesia, Thailand and Israel. It will be interesting to see how many countries will eventually be able to keep average inflation for this year below or close to target.

The data presented above points to two facts. First, India has an inflation problem that has persisted for well over a year. Second, most other major economies are also struggling to keep inflation near their formal targets. The one big difference is that Indian inflation has been high right through the pandemic; most other major economies have seen resurgent inflation only after their economic recoveries accelerated. Most central banks will begin to pivot towards monetary policy normalization in 2022, assuming that the pandemic is under control. They have a difficult balancing act to manage. They must not act so rapidly that an economic recovery is halted in its tracks, but also not act so late that inflation expectations rise to levels that trigger a self-fulfilling cycle of price pressures.

Inflation expectations in India have begun to rise. There are now doubts over how the Indian central bank is interpreting its inflation targeting mandate. Has the inflation target in effect been moved from 4% to 6%, or from the mid-point to the upper end of the mandated range? The latter has been put in place for RBI to have some manoeuvring space to deal with issues such as weather shocks or incorrect inflation forecasts. The minutes of various recent MPC meetings show that members have been careful to make a distinction between the inflation target and its tolerance band, a subtle yet important distinction. It is thus important that the Indian central bank reiterates that its inflation target is 4%, which it will pursue once the pandemic shock eases.

*This article was originally published in [Livemint](https://www.livemint.com/opinion/columns/inflation-in-india-isn-t-quite-the-same-as-in-other-large-economies-11629819560351.html) on 25 August 2021*

*Read more: [Sri Lanka’s Unsustainable Price Control Policy](https://spontaneousorder.in/sri-lankas-unsustainable-price-control-policy/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Sri Lanka’s Unsustainable Price Control Policy

Original: https://www.spontaneousorder.in/p/sri-lankas-unsustainable-price-control-policy

Author: Spontaneous Order

Published: 2021-08-27T12:53:38.000Z

Topics: price-controls, food-security, social-protection, market-intervention

> The past two years have been unusual and difficult for Sri Lanka, with the pandemic crippling what was an already weakening economy. Consequently, public authorities and policy-makers need to focus on protecting the poorest and most vulnerable segments...

**Summary:**

Sri Lanka's government imposed price ceilings on essential foods like rice, dhal, and canned fish in March 2020 to shield low-income earners from COVID-19-induced price rises, but this classical-liberal critique argues the policy backfired disastrously. By setting prices below market equilibrium, it disrupted price signals, spiking demand and causing shortages, black markets, and hoarding. Small 'petti kadés' retailers in the informal sector suffered heavy losses—e.g., Rs. 60 per kg of dhal—forcing many to stop stocking controlled items, undermining food access for the poor they aimed to help. The unseen effects outweighed the seen short-term affordability gains, hitting vulnerable informal workers hardest. A superior, market-respecting alternative: expand social protection via cash transfers or vouchers, allowing the poor to buy at market prices while suppliers and retailers operate freely. Sri Lanka's Samurdhi program was just 2% of 2020 recurrent expenditure; cash transfers reached only 0.6% of GDP in 2020 and 0.1% in 2021—far below South Asian peers. Prioritizing such targeted aid over interventions ensures sustainable food security and economic recovery.

**Key points:**

- Sri Lanka's March 2020 price ceilings on dhal caused retailers Rs. 60 per kg losses, leading to shortages and black markets.
- Price controls disrupted market signals, increasing demand and hoarding while harming informal sector small businesses.
- Expand social protection like Samurdhi and cash transfers—currently only 2% of recurrent spending and <1% GDP—to enable poor access at market prices.
- Avoid price interventions to assure suppliers stable markets and retailers profits during crises.

**By Tehani Rassool**

* * *

The past two years have been unusual and difficult for Sri Lanka, with the pandemic crippling what was an already weakening economy. 

Consequently, public authorities and policy-makers need to focus on protecting the poorest and most vulnerable segments of societies from economic distress. Their struggle to do so raises a major question – at the onset of an economic and social crisis, what is the most reliable and sustainable way to protect the interests of the poor?

While COVID-19 brought with it a slew of economic challenges, this essay will focus on its large and immediate threat to food supply. The threat was, in part, [due to the fragmentation of agricultural supply chains](https://www.ifpri.org/publication/covid-19-risks-global-food-security) which led to higher costs of production. As we know, higher costs translate to higher prices for essential food items.

So how should policies be designed to enable equal access for the poor, who cannot afford to pay these higher prices? 

**The Plight of Sri Lanka** 

Consider the case of Sri Lanka and its government’s misguided relief package for COVID-19, intended to alleviate some of the economic burden on low-income earners. To combat [rising food prices](https://www.dailymirror.lk/breaking_news/Fixed-price-for-dhal-and-canned-fish/108-185170) at the onset of the pandemic in March 2020, price ceilings were imposed on a number of essential food items, including rice, dhal, and canned fish. Government-mandated price ceilings are set *below* the market equilibrium price for goods, forcing merchants to reduce the selling prices of price-controlled products.

While on the surface, this well-intentioned policy action aimed to enhance the affordability and availability of food for low-income earners, it wound up achieving the opposite.

**The Irony of Price Ceilings**

Although price ceilings make staples affordable for consumers in the short run, they often carry *long-term* disadvantages, including shortages, black markets, and, as will be explored in greater depth, greater costs for small business owners. It should also be noted here that with a pandemic (which is still raging over a year and a half later), long-term and sustainable policy decisions are key. 

In Sri Lanka’s case, the small independent retailers that make up a large proportion of Sri Lanka’s sizeable informal sector workforce bore the brunt of price ceilings. Anyone who has been to Sri Lanka can attest to the sheer volume of *‘petti kadés’* or wayside shops on virtually every street. These small business owners make their living selling essential food items that the government imposed price controls on overnight. 

An [article](https://roar.media/english/life/in-the-know/price-controls-who-will-pay-for-the-canned-fish-and-dhal) by local media agency, Roar, confirms that small business owners had to suffer losses from the sale of price-controlled food products. For instance, an independent retailer would actually make a loss of Rs. 60 on a kilo of dhal following the price controls imposed in March of 2020. 

Economic theory dictates that when the price of a good or service falls, the demand for it rises. Price serves an indispensable signalling function. When the Sri Lankan government interfered with this function and imposed price controls, there was a disproportionate increase in demand for the essential items. 

Unsurprisingly, reports of [shortages and black markets](https://economynext.com/sri-lankas-caa-ends-black-markets-it-started-in-dhall-and-tinned-fish-69803/) of the same commodities also emerged shortly after. This could have been foreseen, given that commodities with artificially-reduced prices are usually targets of hoarding – where speculators purchase large quantities to re-sell at higher prices on a black market. Shortages and hoarding ultimately rendered the intended effects of price controls, accessibility and availability, useless. 

With the sudden imposition of price controls, the government failed to consider the full impact of meddling in product markets; it failed to consider both the ‘seen’ and the ‘unseen’ effects of the policy action. Ironically, the country’s financially insecure informal sector workers, who were the intended beneficiaries of the government’s policy response, ended up bearing the costs of the price ceilings. 

**Alternatives to Price Ceilings**

A longer-term, more sustainable alternative to ensure equal access to food would have been to  scale up the country’s social protection schemes. This measure would provide the poverty-stricken with the means to obtain their own food products at market-determined prices – whether these means were through vouchers or direct cash transfers. 

There is certainly scope for Sri Lanka’s social safety net to be expanded and prioritized as the country’s foremost policy response. Expenditure on the Samurdhi programme, which is the government’s main social protection program, accounted for only [2% of recurrent expenditure](https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/publications/annual_report/2020/en/10_Chapter_06.pdf) in 2020.  Additionally, cash transfers to vulnerable groups only amounted to around 0.6% of GDP in 2020, and around 0.1% of GDP thus far in 2021, as [estimated](https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#S) by the IMF. This is significantly lower than the assistance provided in other South Asian countries.  

In the absence of price controls, suppliers of agricultural products could be assured of a strong and autonomous market; retailers could be assured of stable profits during an economic crisis; and the citizens of a country could be assured of food security and a less painful path out of the pandemic.

*Read more: [Ensuring Freedom from Compliance Raj](https://spontaneousorder.in/ensuring-freedom-from-compliance-raj/)*

* * *

**About Tehani Rassool**

Tehani Rassool is a Research Intern at the Advocata Institute, an independent public policy think tank based in Sri Lanka. She has a keen academic interest in Development Sociology and feminist economic theory.

## Ensuring Freedom from Compliance Raj

Original: https://www.spontaneousorder.in/p/ensuring-freedom-from-compliance-raj

Author: Spontaneous Order

Published: 2021-08-25T11:12:46.000Z

Topics: regulatory-reform, compliance-burden, entrepreneurship, governance-reform

> “The most persistent tendency in India has been to have too much government and too little administration; too many laws and too little justice; too many public servants and too little public service; too many controls and too little welfare.” Nani Pa

**Summary:**

India's 'Compliance Raj'—with 1,536 Acts, 69,233 compliances, and 6,618 filings—stems from the state's deep distrust of private enterprises, driving up costs, forcing firms to stay small and unproductive, and diverting entrepreneurs' time to regulatory navigation rather than innovation. Practices like hiring only contract workers exemplify arbitrage to evade onerous labor laws. The author, from a classical-liberal perspective, advocates shedding this distrust through the Department for Promotion of Industry & Internal Trade's Business Reforms Action Plan, which simplifies, digitizes, and decriminalizes compliances. Key reforms include principle-based regulations over rigid rules, emulating RBI/SEBI's board-driven decisions for transparency, mandating Department Related Standing Committees (DRSCs) for cost-benefit reviews of laws, pre-legislative consultations with impact analysis, a U.S.-style Administrative Procedure Act for stakeholder input, and a Transparency of Rules Act to end 4,000 annual circulars distorting certainty. Institutionalized third-party audits and digitization would curb rent-seeking. These steps would liberate enterprises, unleash entrepreneurial energies, catalyze growth, and create jobs by prioritizing administration over excessive controls.

**Key points:**

- India's regulatory framework imposes 1,536 Acts, 69,233 compliances, and 6,618 filings, incentivizing enterprises to remain small via strategies like contract labor hiring.
- Adopt principle-based regulations, board-driven decisions like RBI/SEBI, and DRSC-mandated reviews with cost-benefit analysis for all laws and rules.
- Enact a Transparency of Rules Act requiring disclosure of all regulations and amendments, alongside a U.S.-style Administrative Procedure Act for stakeholder consultations.
- Digitize processes and self-certification to reduce rent-seeking, compliance costs, and the 4,000 annual regulatory changes burdening enterprises.

**By Jasman Dhanoa**

* * *

*“The most persistent tendency in India has been to have too much government and too little administration; too many laws and too little justice; too many public servants and too little public service; too many controls and too little welfare.”*

Nani Palkhivala’s unerring description of the Indian state holds true to this day. The public manifestation of the Indian state’s deep distrust of its enterprises has resulted in a [regulatory framework of 1,536 Acts, 69,233 compliances and 6,618 filings](https://www.indiatoday.in/magazine/up-front/story/20200720-shed-regular-cholestrol-1699365-2020-07-11) as identified by Teamlease and Avantis RegTech. Unfortunately, this archaic regime also increases compliance costs, which create a perverse incentive for enterprises to remain small and unproductive. 

Multiplicity of approvals and the associated obstinate red-tapism also forces entrepreneurs to spend a bulk of their time navigating the maze of regulations. Consequently, entrepreneurs are forced to adopt strategies like arbitrage to operate within the four corners of law. For example, Some enterprises [only hire contract workers](https://www.indiabudget.gov.in/budget2016-2017/es2015-16/echapvol1-10.pdf), who are employees of the contractor and not considered a part of the firm’s workforce under the extant labour laws. This allows enterprises to remain small enough to be exempted from onerous labour regulations. Although not ideal, such hiring practices are often the most rational option for enterprises.

Recognising the compliance burden on our entrepreneurs, the Department for Promotion of Industry & Internal Trade has formulated a [business reforms action plan](https://eodb.dipp.gov.in/PublicDoc/Download/30336). It seeks to simplify and digitise compliances, identify all outdated laws along with concomitant rules/regulations and decriminalise offences which can be resolved through civil remedies. Complete digitisation of  processes and forms would also [reduce rent seeking opportunities](https://www.financialexpress.com/money/income-tax/faceless-income-tax-appeal-will-it-bring-transparency-reduce-corruption/2093672/) by curbing physical interface with government officials.  

Adoption of a principle-based regulatory regime, instead of trying to draft rules addressing all eventualities that may or may not arise in the future, is the need of the hour. Our risk averse bureaucracy, however, has institutionalised this practice of formulating rules for any eventuality due to the fear of ex post facto investigations of their decisions. For instance, despite expert committees recommending a need for allowing more discretion in the bidding process for government contracts, we still rely on the [lowest cost method or L1 criteria to select bidders.](https://www.indiabudget.gov.in/economicsurvey/doc/vol1chapter/echap06_vol1.pdf) The L1 system is prevalent since it allows for mechanical regulation by bureaucrats rather than any exercise of administrative discretion. This apprehension is on account of investigative overreach in cases where decision makers were charged with corrupt practices [despite no proof  of malafide intent](https://www.firstpost.com/india/hc-gupta-gets-three-year-sentence-in-coal-scam-a-good-bureaucrat-was-hung-out-to-dry-while-his-politician-boss-got-away-5675421.html) or unjust enrichment. Such apprehensions can be addressed by instituting transparent decision-making processes in different ministries and statutory regulators.

A good institutional architecture would be to emulate the board-driven decision making process of regulatory bodies like the RBI and SEBI. Such boards consist of members drawn from government, academia, business, etc. This ensures that any decision taken undergoes proper scrutiny, allowing for evaluation of the same by officials from diverse backgrounds. Adopting such a structure would also help prevent any ad-hoc decision making, avoid mistakes leading to disputes and ensure that no single person is able to unduly influence decisions.  

Department Related Standing Committees (DRSCs) of the Parliament or state legislatures could be mandated to conduct a review and cost benefit analysis of all existing legislations and rules made thereunder. The DRSCs can ask relevant departments to justify the rationale for keeping such rules or laws on the statute books. Additionally, any new rule or regulation brought out by any department should follow a process similar to that of the [pre-legislative consultation policy](https://legislative.gov.in/documents/pre-legislative-consultation-policy). This would require the proposed rule or regulation to be put up for comments from stakeholders along with detailed impact analysis, justification for introduction, etc. Subsequently, the department can place the proposed rule or regulation before the DRSC with a brief summary of the feedback received from stakeholders along with its responses.   

A legislation along the lines of the U.S. Administrative Procedure Act, 1946, should also be  promulgated by the Parliament. This [act](https://indiankanoon.org/doc/116404795/) subjects *“all subordinate legislation to a transparent process by which due consultations with all stakeholders are held, and the rule or regulation  making power is exercised after due consideration of all stakeholders’ submissions, together  with an explanatory memorandum which broadly takes into account what they have said and  the reasons for agreeing or disagreeing with them.”* Adopting such a consultative approach would increase transparency, reduce arbitrariness and the risk of affected parties seeking a judicial recourse for striking down the concerned rule or regulation.  

Governance through periodic issuance of circular/office memorandum distorts the principle of regulatory certainty for enterprises and citizens. [There are close to 4,000 regulatory changes a year that affect enterprises.](https://www.orfonline.org/expert-speak/8-reforms-to-end-indias-regulatory-cholesterol/) This forces entrepreneurs to divert their creative energies towards keeping a track of such circulars instead of focusing on expanding their enterprises. As suggested in the economic survey 2016-17, [a Transparency of Rules Act](https://www.indiabudget.gov.in/budget2017-2018/es2016-17/echap08_vol2.pdf) should be enacted, which requires all governmental departments or entities to disclose all relevant acts, rules and regulations to the public. This would allow for lesser litigation and compliance costs for entrepreneurs. Additionally, as rules and regulations undergo amendments at regular intervals, the concomitant circular should mention such amendments along with a copy of the updated rule/regulation. This would provide regulatory certainty to enterprises as they would not have to keep a record of all the amendments to circulars. An institutionalised process audit by a third party should also be put in place to prevent application of any rule or regulation which has not been disclosed to the public.  For example, [street vendors could not access loans](https://www.business-standard.com/article/specials/pm-svanidhi-scheme-a-thousand-hurdles-for-a-rs-10k-loan-to-street-vendors-120122201488_1.html) under the PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme since they lacked knowledge about onerous regulations like obtaining a letter of recommendation from the urban local body, affidavits on stamp papers, etc. 

The prevalence of regulatory cholesterol prevents millions of small enterprises from scaling up productivity and providing gainful employment to others. The Central and state governments have made a good beginning by digitising existing processes, focusing on self certification for compliance, etc. This must be accompanied by an institutionalised approach as outlined in this article, which would require the government to shed its distrust of private  enterprises. Liberating private enterprises from the clutches of numerous filings, forms, inspections, etc. would unveil entrepreneurial energies, catalyzing economic growth and job creation on a large scale.

*Read more: [The global demand boost from a leap in pandemic-time savings](https://spontaneousorder.in/the-global-demand-boost-from-a-leap-in-pandemic-time-savings/)*

* * *

**About Jasman Dhanoa**

Jasman Dhanoa is currently an associate with the Telecom, Media and Technology team at Saikrishna & Associates. He completed his B.A., LL.B. (Hons.) from Gujarat National Law University, Gandhinagar. He has a keen interest in public policy, trade and regulatory compliance.

## The global demand boost from a leap in pandemic-time savings

Original: https://www.spontaneousorder.in/p/the-global-demand-boost-from-a-leap-in-pandemic-time-savings

Author: Spontaneous Order

Published: 2021-08-23T10:35:50.000Z

Topics: excess-savings, fiscal-policy, global-trade, indian-macroeconomics

> The strong recovery in US domestic demand has spilled over to the rest of the global economy. The largest economy in the world is sucking in goods from the rest of the world at a record rate, either to restock inventories or for final consumption. The U..

**Summary:**

The US's strong post-pandemic demand, reflected in a June goods trade deficit over $93 billion, has boosted global exports, including India's, amid weak domestic demand. IMF data shows excess savings accumulated in 2020 were highest in countries like the US, UK, Japan, and Canada, which provided substantial above-the-line fiscal support to households, buffering incomes and enabling potential private-sector demand to sustain recovery. In contrast, nations like China, France, Germany, and Sweden have lower or negative excess savings due to modest or no such support. India's RBI data indicates household financial savings spiked to 21% of GDP in Q1 FY2020-21 during lockdown but normalized to 8.2% by Q3, with unclear stock levels and skepticism from analysts like Saugata Bhattacharya given income losses and deposit trends. India's fiscal response emphasized below-the-line measures like liquidity support, favoring supply-side protection over demand-side boosts, limiting excess savings drawdown potential. This underscores India's macroeconomic challenge: monetary easing exhausted, cautious fiscal policy relying on infrastructure capex to crowd in private investment, with foreign demand buffering weak domestic aggregate demand until private-sector strength returns—a classical-liberal nod to private engines over prolonged state intervention.

**Key points:**

- US goods trade deficit exceeded $93 billion in June, driving global demand and benefiting Indian exports.
- Excess savings stocks are higher in countries with above-the-line fiscal support like the US, enabling private demand to replace fiscal stimulus.
- India's below-the-line fiscal measures limited excess household savings buildup, hindering domestic demand acceleration.
- Policymakers should leverage foreign demand as a buffer while infrastructure capex crowds in private investment.

**By Niranjan Rajadhyaksha**

* * *

The strong recovery in US domestic demand has spilled over to the rest of the global economy. The largest economy in the world is sucking in goods from the rest of the world at a record rate, either to restock inventories or for final consumption. The US trade deficit in goods was over $93 billion in June; its overall trade deficit was lower because the US has a surplus in services trade. India has been one of the beneficiaries of rising demand from countries such as the US. Indian goods exports have had a splendid run in recent months, at a time when domestic demand is still relatively weak.

In the recent update to the World Economic Outlook published at the end of July, economists at the International Monetary Fund (IMF) have presented an interesting set of data on excess savings in select economies around the world in 2020, including the US (see chart). The numbers can give us some clue about which countries have built up a stock of excess savings over the pandemic months, and can thus support private- sector demand in the coming quarters. What is especially important is that the countries that have high excess savings also tend to be those where governments have pursued expansionary fiscal policies after the pandemic struck.

[

![](https://substackcdn.com/image/fetch/$s_!wzUX!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2a7a965c-fb14-40ad-b6ba-9e595135fbd3_697x427.png)



](https://substackcdn.com/image/fetch/$s_!wzUX!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2a7a965c-fb14-40ad-b6ba-9e595135fbd3_697x427.png)

“Savings tended to accumulate more in countries with larger above the line fiscal support to households, which buffered disposable income,” says the IMF. These savings now open the possibility of private-sector demand, taking the baton from fiscal authorities to keep the economic engine running.

There are two notes of caution here. First, the IMF analysis only focuses on what it describes as above-the-line fiscal support, or direct spending. It does not cover below-the-line support, such as credit guarantees, special liquidity schemes, regulatory forbearance or payroll support. Second, it is quite likely that some part of the excess savings will not be spent in countries where households with excess debt may want to first put their own finances in order.

The main insight is still useful when thinking about the global economic recovery. Countries that provided direct support to the private sector are now well placed to let the engine of private sector demand do more of the pulling. These include economies such as the US, Britain, Japan and Canada. Countries such as China, France and Germany have relatively lower excess savings, thanks to their more modest above-the-line fiscal support. Sweden is a rare country that has actually seen its stock of savings go below normal.

What about India? The IMF analysis cited here does not cover the country. However, the Reserve Bank of India (RBI) has provided estimates of one part of the total savings in the Indian economy—household financial savings. These had shot up to 21% of gross domestic product (GDP) during the first quarter of fiscal year 2020-21, when consumption had fallen off a cliff during the national lockdown. Quarterly household financial savings have since normalized, and were at 8.2% of GDP in the third quarter of fiscal year 2020-21. High-frequency estimates of total savings—by households, companies and the government—are not yet available.

The data from the Indian central bank deals with flows. The IMF analysis is about stocks. That is an important difference. It is unclear whether there is a modest stock of excess household financial savings to spend down, even as the quarterly flow has normalized. In a recent research note, Axis Bank economist Saugata Bhattacharya writes, though in a different context, that the possibility of excess accumulated savings does not fit very well with the narrative of widespread income losses outside of large enterprises and salaried employees. He also points to the lack of supporting evidence in bank deposits data.

If the correlation between excess savings on one hand and above-the-line fiscal spending on the other holds in India’s case, then it is unlikely that household spending can suddenly accelerate powered by accumulated savings. This is especially so since, as this column noted in October 2020, the Indian fiscal response to the pandemic was focused more on below-the-line items such as liquidity support, rather than above-the-line items such as income support. The former tends to protect the supply side of the economy while the latter tends to support the demand side.

All this is important while thinking of India’s macroeconomic policy conundrum. There is now widespread agreement that the monetary-policy option has run its course, even while there is disagreement about whether this is an opportune moment for RBI to actually begin withdrawing its extraordinary monetary support to the economy. The government continues to run a cautious fiscal policy, betting on the expectation that higher capital expenditure on infrastructure projects will crowd in private-sector investments in the quarters ahead.

The economic impact of the pandemic has expectedly moved from its first stage as a supply shock to its second stage as weakness in domestic aggregate demand. Foreign demand will hopefully provide a buffer till domestic private-sector demand strengthens.

*This article was originally published in [Livemint](https://www.livemint.com/opinion/columns/the-global-demand-boost-from-a-leap-in-pandemic-time-savings-11628612148634.html) on 10 August 2021*

*Read more: [Insuring India](https://spontaneousorder.in/insuring-india/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Where are the forest keepers: A look at India’s forest regime

Original: https://www.spontaneousorder.in/p/where-are-the-forest-keepers-a-look-at-indias-forest-regime

Author: Spontaneous Order

Published: 2021-08-21T15:52:58.000Z

Topics: forest-rights, property-rights, tragedy-of-commons, community-management

> Forests are a country’s natural resource. Like the mountains and rivers etching their paths across a country, forests have their mark to make. Forest conservation has historically been viewed as the State’s responsibility; that only the State can mana

**Summary:**

India's forest regime, rooted in the colonial Indian Forest Act of 1865 that centralized control for resource extraction rather than conservation, has persisted post-independence through laws like the 1980 Forest Conservation Act, prioritizing state authority over forest-dwelling communities' customary rights. Despite vilifying these communities as encroachers, data reveals recorded forest area at 76.52 million hectares, with cover at 63.72 mha (38.79 mha degraded, 60% of cover; 24.93 mha dense), while total encroachment is just 1.25 mha or 1.9% of recorded area—dwarfed by degradation under state foresters. The Forest Rights Act 2006 (FRA) acknowledges historical injustices by recognizing rights for scheduled tribes and traditional dwellers integral to forest ecosystems, but implementation lags, denying claims like 18,000 in Kerala over 12 years. Drawing on Elinor Ostrom's Nobel-winning principles against the tragedy of the commons, the author argues state control erodes local incentives, while well-defined community property rights enable sustainable management by stakeholders. The classical-liberal solution: divest state foresters, enforce FRA rights fully, and empower forest dwellers for superior conservation and dignified livelihoods, rejecting top-down state monopoly.

**Key points:**

- Encroachment accounts for only 1.9% (1.25 mha) of India's recorded forest area (76.52 mha), versus 60% degradation of forest cover (38.79 mha out of 63.72 mha).
- Colonial-era laws like the 1865 Indian Forest Act centralized forests for exploitation, a model retained post-independence, sidelining communities' customary rights.
- Elinor Ostrom's principles prove community-managed commons with defined property rights, monitoring, and sanctions outperform state control in preventing overexploitation.
- The 2006 Forest Rights Act aims to rectify injustices but faces poor implementation, denying land rights to many Adivasi farmers and tribespeople.
- Enforce community ownership via FRA to protect forests and alleviate poverty among dwellers, transferring control from state agents to locals.

**By Swati Singh**

* * *

Forests are a country’s natural resource. Like the mountains and rivers etching their paths across a country, forests have their mark to make. Forest conservation has historically been viewed as the State’s responsibility; that only the State can manage and conserve such vast land areas. It’s almost inconceivable to let private parties lay sole claims on it.

In this debate, forest-dwelling communities have more often than not been villanized. They’re looked at as forest depleters, encroachers, making a living off of forest resources and inevitably causing the demise of our green cover. However, the numbers show a different picture.

The [country’s recorded forest area](https://ccs.in/sites/all/books/com_books/terra-forest-dwellers-versus-foresters.pdf) is 76.52 million hectares (mha), whereas the forest cover is 63.72 mha, out of which 38.79 mha is degraded, and 24.93 mha is dense. Thus, the country’s degraded forest area is as high as 60 percent of the total forest cover. As against this, the total encroachment in forest areas in the country is 1.25 mha, which is merely 1.9 percent of the total forest area. Out of this total encroachment, the area used by the forest dwellers would be even smaller. So, the extent of encroachment is minuscule in the context of the degradation of forests and is essentially played up to divert attention from real problems. The noise around the encroachment issue has silenced valid criticisms of state foresters’ (state agents’) performance in sustaining the forests.

**So, when and how did the tussle between forest communities and the State begin?**

For years, forest-dwelling communities have had no say in deciding what becomes of the home where they’ve lived for centuries. But it wasn’t always like that. In pre-colonial India, the ruling monarchs owned all the land and resources within their territorial claims. The forests, however, were still accessible to the locals for their livelihood. 

It all changed when the British traders recognized the Indian flora as a repository of sturdy teak, suitable for [shipbuilding](https://www.jstor.org/stable/44141601) and eventually fighting wars. Initially established under the pretext of “scientific forestry”, the [Indian Forest Act of 1865](https://www.academia.edu/35174697/Indian_Forest_Act_Interpretation_of_Subservient_the_Forest_Needs_Elucidation) allowed the then East India Company to gradually usurp authority over all forestland that was not privately owned. This formally consolidated state power over forestry and obliterated centuries-old customary rights of forest communities in India. This law had nothing to do with conservation. It was created only to exploit India’s resources, like many other acts of the colonial era.

**Now, how did the situation change post-independence?**

You’d expect that now that the British had left and India was independent, the newly elected government would have repealed laws that had exploited Indians and their resources for so long. Sadly, that didn’t quite happen. 

In 1980, the [Forest Conservation Act](http://nbaindia.org/uploaded/Biodiversityindia/Legal/22.%20Forest%20\(Conservation\)%20Act,%201980.pdf) was enacted to check deforestation and conserve forests. It laid down a few objectives, but in essence, the Act merely shifted powers for decisions concerning forest land use from the British to the Centre. So, earlier, the British had exclusive control over forests. Now, it was the government. Thus, even post-independence, forest laws did not have anything to do with conservation but more with state control.

The Act ignored the plight of the forest communities who had inhabited these forests for centuries. Eight years later, the [National Forest Policy 1988](http://asbb.gov.in/Downloads/National%20Forest%20Policy.pdf) was enacted, aiming to ensure compensatory afforestation for cleared areas, sustainable utilization and essential safeguards for the rest of the land. It [recognized](https://eco-intelligent.com/2020/11/07/national-forest-policy-1988/) that forest resources have severely depleted because of “*relentless pressures arising from the ever-increasing demand for fuelwood, fodder, and timber; inadequacy of protection measures; diversion of forest lands to non-forest uses without ensuring compensatory afforestation and essential environmental safeguards; and **the tendency to look upon forests as a revenue-earning resource**.*” Its focus was on reducing the degradation of forests by forest communities.

Finally, in 1990, the [Joint Forest Management programme](http://ifs.nic.in/Dynamic/pdf/JFM%20handbook.pdf) felt like a turning point in this long struggle. It enabled the villages and forest departments to decide together how to deal with their respective forest blocks. Participatory Forest Management (PFM) is an informal agreement that allows the local communities to consume particular forestland if they protect it for 5–10 years. But it’s important to note that the local community still had no legal authority over the forest resource.

Fast forward a few years, in 2006 the Government of India via the [Scheduled Tribes and the Other Forest Dwellers (Recognition of Forest Rights) Act 2006](https://www.fra.org.in/), finally admitted that, “*Forest rights on the ancestral lands and their habitat were not adequately recognized in the consolidation of state forests during the colonial periods as well as in Independent India resulting in Historical injustice with the scheduled tribes and other traditional forest dwellers, who are integral to the very survival of the forest ecosystem.”*

**Should the government control forests? Do forest communities cause the demise of our green cover?**

The answer to both these questions is no. The proponents of exclusive state control on forests base their case on the “[tragedy of the commons](https://www.youtube.com/watch?v=Qr5Q3VvpI7w&ab_channel=BigThink).” The idea is that commonly held open-access resources like forests and grazing lands inevitably suffer over-exploitation as no individual has an incentive to stop his/her use of the resource as long as others can use it too. But, what is not known is that these “communally held open access resources”, in practice, are never free for all but are controlled by a host of intricate rules and regulations for their use.

[Dr. Elinor Ostrom](https://www.nobelprize.org/prizes/economic-sciences/2009/ostrom/facts/) won a Nobel Prize for her work in Economics (the first woman to win it) for working out a solution to the tragedy of commons. While it’s true that individuals have an incentive to avail of individual benefits to the fullest when the community bears the damage, there are other factors at play. Ostrom argued that shared resources are managed by their most prominent stakeholders – those who have everything to gain and lose from that resource. Her research in Kenya, India, and Indonesia concluded that people are more likely to act selfishly, and the tragedy kicks in in cases of an outside source of power (political, economic, or social).

So, bringing forests under state control actually created the tragedy of open access rather than solving it, as local communities lost all incentives to manage forests. The forests no longer belonged to them, and they started acting irresponsibly.

On the other hand, a rapid decline in India’s recorded forest area has been observed, most notably in regions occupied by tribal communities. A total of 218 tribal districts, which hold about [three-fifths](https://india.mongabay.com/2020/01/indias-forest-cover-is-rising-but-northeast-and-tribals-lose/#:~:text=According%20to%20the%202019%20report,slightly%20up%20from%2093%2C815%20sq.) of India’s 712,249 sq. km forest cover, are identified by the government. An [FAO](http://www.fao.org/3/XII/0250-A1.htm#:~:text=Growing%20population%2C%20widespread%20poverty%2C%20limited,grazing%20resulting%20in%20forest%20degradation.) report states: “*growing population, widespread poverty, limited employment opportunities in agricultural and industrial sectors have resulted in heavy pressure on forests, primarily due to unsustainable extraction of fuelwood and over-grazing resulting in forest degradation*“. 

The chronic ostracisation from modernization and the abject lack of government attention are to blame. Ridden with perpetual poverty, the forest communities swelled in size. They are accused of being encroachers mooching off the land but are provided with no alternatives. Moreover, since the dwellers do not have appropriately outlined ownership rights, they are forced to live off the land they have inhabited for ages (that they do not own), but not recognized by the government as legitimate owners. Despite having a symbiotic relationship with nature for centuries, the lack of a legal one has further exacerbated the tragedy of the commons issue, worsening India’s environmental degradation.

Ostrom recommended a “bottom-up” approach in legally defining the minutiae of the communal interactions with the said resource to prevent the tragedy. She constructed eight “design principles for a [Common Pool Resource (CPR) institution](https://www.onthecommons.org/magazine/elinor-ostroms-8-principles-managing-commmons)“. The common pool resource must be clearly defined, and the relevant “resource appropriators” should be able to engage in collective choice arrangements. These would help smoothen the conversations as well as the decision-making process that ensues. Accordingly, the appropriators should also be monitored and punished (she adds, at “a scale of graduated sanctions”). If the issues escalate to a legal dispute, it is essential to ensure that the conflict gets resolved through cheap and accessible means. Lastly, the whole system ought to be bound by a body of considerable authority. In large pools of resources, the “bottom-up” approach comes to the rescue – layer the regulators upwards from the local level.

[The Forest Rights Act, 2006](https://www.fra.org.in/) works loosely on this basis by granting land ownership and other rights to forest-dwelling communities. In all its pomp and glory though, the FRA is yet to be implemented entirely, especially with respect to property rights. [Adivasi farmers](https://www.firstpost.com/india/centres-farm-laws-and-non-execution-of-fra-insidiously-linked-say-maharashtras-adivasi-farmers-at-azad-maidan-protest-9241221.html), in particular, have been gravely harmed by this. Land ownership is still not a guarantee – many Maharashtrian farmers are either waiting for their applications to be passed or duped with illegitimate documents altogether.

Then there are stories of [tribespeople of Kerala](https://timesofindia.indiatimes.com/city/kochi/tribespeople-denied-rights-for-12-yrs/articleshow/80868881.cms) having been denied their basic right under the Scheduled Tribe Scheduled Tribes and Other Traditional Forest (Recognition of Forest Rights Act) 2006. A whopping 18,000 claims for individual land rights have been denied by successive governments for the past 12 years, from 2008 to 2020. 

Without a doubt, community ownership and forest management through well-defined and enforceable property rights is the best way. It solves two problems simultaneously: it protects forests and provides a dignified livelihood to the country’s most impoverished communities. The most efficient and moral resolution is to take our forests from the foresters (state agents) and put them in the hands of forest dwellers.

*Read More: [How 100 unicorns are propelling India forward](https://spontaneousorder.in/how-100-unicorns-are-propelling-india-forward/)*

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## Insuring India

Original: https://www.spontaneousorder.in/p/insuring-india

Author: Spontaneous Order

Published: 2021-08-20T12:57:02.000Z

Topics: insurance-privatization, strategic-disinvestment, insurance-penetration, public-sector-reform

> On the 11th of August, 2021, the Rajya Sabha passed The General Insurance Business Nationalisation (Amendment) Bill, 2021, after the Lok Sabha had passed it on the 2nd of August. This law, once it comes into effect, will allow the Central Government to ..

**Summary:**

The 2021 General Insurance Business Nationalisation (Amendment) Bill, passed by Parliament, allows the Central Government to dilute its stake below 51% in state-owned general insurers like New India Assurance, National Insurance, Oriental Insurance, and United India Insurance, advancing the strategic disinvestment policy in sectors like insurance. Public insurers face chronic issues: United India reported a Rs 1,485 crore net loss in 2019-20, National Insurance Rs 4,100 crore, with solvency ratios below the 1.5 regulatory minimum, impairing claim settlements and growth. India's insurance penetration stands at 3.76% (vs. US 11.43%) and density at $78, far below peers, despite liberalization since 2000 allowing 26% FDI (raised to 100% for intermediaries). Studies show capital infusion boosts penetration and economic growth, which nationalization stifled. From a classical-liberal view, privatization injects private capital to revitalize underperforming PSUs, countering criticisms of unethical practices by noting public insurers' claim rejections and private sector reliability. Disinvestment alone won't achieve universal coverage; it requires state-market collaboration via schemes like PMJAY, awareness, and prioritizing economic development to make insurance affordable.

**Key points:**

- The 2021 amendment enables stake dilution below 51% in public general insurers to facilitate privatization and capital infusion.
- Public insurers like United India (Rs 1,485 crore loss) and National (Rs 4,100 crore loss) have low solvency below 1.5, limiting penetration at 3.76%.
- Privatization addresses capital shortages, positively correlating with higher insurance penetration and economic growth per Ray et al. (2020).
- Criticisms of private unethical practices are flawed, as public insurers reject claims mechanically and private firms have grown reliably.
- Boosting coverage demands joint state-market efforts, financial literacy, and economic development over mere disinvestment.

**By Sourya Banerjee**

* * *

On the 11th of August, 2021, the Rajya Sabha [passed](https://www.moneycontrol.com/news/business/govt-may-propose-united-india-insurance-for-privatisation-report-7340481.html) The [General Insurance Business Nationalisation (Amendment) Bill, 2021](https://prsindia.org/files/bill_track/2021-07-30/General%20Insurance%20Business%20\(Nationalisation\)%20Bill%20Text.pdf), after the Lok Sabha had passed it on the 2nd of August. This law, once it comes into effect, will allow the Central Government to dilute its stake in state-owned general insurers below 51 percent. The passage of the bill amends The [General Insurance Business (Nationalisation) Act](https://legislative.gov.in/sites/default/files/A1972-57.pdf), which was first passed in 1972.

The state-owned general insurance companies include The New India Assurance, National Insurance Corporation, General Insurance Corporation of India (GIC Re), The Oriental Insurance Company, and United India Insurance. As per [Business Standard](https://www.business-standard.com/article/economy-policy/union-cabinet-paves-the-way-for-privatisation-of-govt-owned-insurers-121072900050_1.html), NITI Aayog is learnt to have recommended United India Insurance as one of the primary potential candidates for privatisation.

This entire practice is part of the government’s long term [strategic disinvestment policy](https://www.indiabudget.gov.in/doc/budget_speech.pdf) \[Page 37, Budget 2021-22\]. According to the policy, in strategic sectors such as banking, insurance and financial services, the Government would be reducing its stake.

A Brief History

To understand the amendment, we will have to revisit the original Act, i.e, the General Insurance Business (Nationalisation) Act \[“Parent Act”\]. In 1972, with the passing of the Parent Act, the general insurance business was [nationalised](https://www.irdai.gov.in/ADMINCMS/cms/NormalData_Layout.aspx?page=PageNo4&mid=2) with effect from 1st January, 1973. One hundred and seven insurers were amalgamated and grouped into four companies, namely National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited, and the United India Insurance Company Limited. Following the recommendations of the Malhotra Committee report, in 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. 

By early 2000, IRDA had realised that nationalisation of insurance was not working out. The IRDA opened up the market in August 2000, and additionally allowed foreign companies to have ownership of up to 26%. Fast forward to 2021, the sector has transitioned from being an exclusive State monopoly to a competitive market, with 100% FDI in insurance intermediaries (via Budget 2019-20). However, public-sector insurers hold a greater share of the insurance market, even though they are fewer in number.

The Insurance Sector Problem

Covid-19 once again exposed what experts in the insurance sector have been saying for some time – the penetration of insurance, and it’s density in India, while much better than pre-liberalisation, is still abysmal. 

Insurance penetration is defined as the ratio of total premium to GDP. In 2019, it stood at 3.76 percent in India, compared to 11.43 percent in the US, 4.03 percent in Brazil, and 13.4 percent in South Africa. Additionally, insurance density, which is measured as a ratio of total premium to population, in India stood at $78 in 2019. This is comparatively [less than](https://theprint.in/ilanomics/india-needs-more-private-insurance-companies-govt-must-use-covid-trigger-to-make-this-happen/705813/) other emerging economies. 

As per [Ray et al. 2020](http://icrier.org/pdf/Working_Paper_394.pdf), insufficient capital makes it difficult for companies to increase their market penetration, as such growth of the insurance sector is contingent on continuous infusion of capital. While the Union Government has been [pumping money](https://www.timesnownews.com/business-economy/industry/article/cabinet-approves-capital-infusion-of-rs-12450-crore-in-3-state-run-insurance-companies/618332#:~:text=New%20Delhi%3A%20The%20Union%20Cabinet,in%20FY%202019-20\).) into these companies, the performance of the entities have been less than desirable. United India Insurance had reported a [net loss](https://uiic.co.in/sites/default/files/uploads/publicdisclosure/AR%202019-20.pdf) of Rs 1,485 crore in 2019-20 while the National Insurance Company [reported](https://timesofindia.indiatimes.com/business/india-business/national-insurance-co-widens-fy20-loss-to-rs-4100-crore/articleshow/78403496.cms) a loss of Rs 4,100 crore in 2020. Additionally, the solvency ratio (size of an insurer’s capital in relation to the risk) of the public sector general insurance companies is lower than the regulatory minimum of 1.5. Low solvency ratio affects the ability of insurance firms to settle claims. The general insurance industry recorded a decrease in profits, with public-sector general insurers posting losses, while their private-sector counterparts recorded profits.

Additionally as per Ray et al. 2020, there is a [significant positive relationship](https://www.ideasforindia.in/topics/money-finance/india-s-insurance-sector-challenges-and-opportunities.html) between insurance penetration rates (life, non-life, and total) and economic growth in India. The paper also goes ahead to show that liberalisation (increasing of the FDI cap to 49%) positively influenced life and total insurance penetration rates, while the effect on non-life insurance was negative and insignificant. The preliminary empirical assessment showed a positive and significant relationship between insurance penetration and insurers’ equity capital, in the case of life and non-life insurance in India for the period of analysis. 

To simplify, the more capital available to the insurance companies, the easier it is for it to increase its market penetration. Currently Public Sector Insurance companies are bleeding out capital. The solution to the same is to allow individuals to invest more money in the PSU, and rejuvenate it’s existing capital stock. The new Amendment to the Parent Act allows for the same. For a developing country like India, we need to ensure we get as many people insured as quickly as we can. Insurance provides a safety blanket during disasters for people and in turn allows for mobilisation of savings leading to the [economic growth](https://openknowledge.worldbank.org/handle/10986/9257) of the society as a whole. Covid-19 already pushed thousands without insurance into poverty. We cannot afford to wait for the next pandemic or crisis. 

Let us however, briefly take a look at two of the criticisms of the Amendment. The primary one being that because the Government will sell off a majority controlling stake, it shall open a “flood gate of unethical practices” by private insurance providers. To this we must note that the only profit making State Insurance company, United Insurance, mechanically [rejects claims](https://www.moneylife.in/article/united-india-continues-to-reject-insurance-claims/21652/21860.html) on technical issues, like small filing delays, despite instructions from IRDA to not do the same. Assuming that private companies will reject claims for profits, but Government companies don’t or won’t is a fallacy. We do need the IRDA to be doing a better job, irrespective of whether it’s a State-owned company or private, so that such mechanical rejections don’t happen. An additional criticism of the disinvestment is about the possible lack of trust in insurance companies, without the presence of the Government.  For one, the Government may still remain the largest shareholder for sometime, even if it doesn’t control the majority stake, for another the rapid growth of private insurance companies can be taken as proof that consumers have found such services reliable.

Conclusion:

It is important to understand that by merely disinvesting from State-controlled insurance companies, we will not overnight and automatically ensure everyone in India has insurance.  Increasing insurance penetration will have to be a joint endeavour by the State and the Market. Hopefully with new capital, the erstwhile government insurance will design products with the rural sector and the challenges of rural people in India. The focus of the insurance sector is steadily shifting towards increasing access to low-cost, simple insurance products, including those that can be sold through online channels. This can be incentivised by government policies and on ground activism by NGOs, which spread awareness, and improve financial literacy, particularly the concept of insurance, and its importance. In this context, government insurance schemes such as Pradhan Mantri Jan Arogya Yojana, Pradhan Mantri Fasal Bima Yojana, Pradhan Mantri Suraksha Bima Yojana, and Pradhan Mantri Jeevan Jyoti Bima Yojana [are notable contributors](https://www.ideasforindia.in/topics/money-finance/india-s-insurance-sector-challenges-and-opportunities.html) in expanding insurance coverage among the population.

Lastly, we need to focus on the economic development and opportunities for people, especially the uninsured. Most of the time, poor people are not uninsured because they are financially illiterate, but because they are too poor to afford said insurance. Their economic development will have a net positive result on insurance penetration and provide a safer future for everyone, irrespective of what disaster strikes in the future.  

*Read more: [The Dilemma of Online Free Speech](https://spontaneousorder.in/the-dilemma-of-online-free-speech/)*

* * *

**About Sourya Banerjee**

Sourya is the Project Associate for CCS Academy in Hyderabad. A BBA-LLB (Hons.) degree holder, Sourya used to practice law in Hyderabad before joining CCS. Sourya has also worked with numerous non-profits social organizations including Red Elephant Foundation, and Red Dot Foundation and also written on law and policy for online platforms such as LiveLaw, The Logical Indian, Qrius etc. An ex- Students for Liberty Hyderabad Local Coordinator, in his free time, Sourya runs a citizen journalism platform called Arguendo.

## The Dilemma of Online Free Speech

Original: https://www.spontaneousorder.in/p/the-dilemma-of-online-free-speech

Author: Spontaneous Order

Published: 2021-08-19T13:37:17.000Z

Topics: free-speech, online-censorship, uapa, sedition-law

> The fundamental unit of a Liberal democracy such as ours is the rational individual endowed with civil, economic and political rights. Among the most crucial of these is the right to free speech. This, however, is not an absolute right and hence poses a..

**Summary:**

In a liberal democracy centered on the rational individual with rights including free speech, the Indian state employs 'reasonable restrictions' under Article 19(2) and extraordinary laws like UAPA (1967, amended 2019) and colonial-era Sedition Law (IPC Section 124A) to curb dissent, enabling detention up to 180 days without charges and targeting activists, journalists, and students—evidenced by 5,128 UAPA cases and 229 sedition cases from 2015-19, yet conviction rates below 2% for UAPA and 3.3% for sedition per NCRB data. This misuse, amid India's downgrade to 'Partly Free' by Freedom House, reflects collectivist Hindutva trends prioritizing state control over individual liberty. Online, post-2015 Shreya Singhal victory striking down IT Act Section 66A, 2021 IT Rules empower government to mandate traceability of messages, content takedowns for 'sovereignty' threats, and grievance mechanisms, turning platforms into state extensions and undermining spontaneous social orders. Drawing on public choice theory, Hayek, and Spooner, the author argues self-interested state actors cannot justly regulate speech, as individuals rationally filter information; regulations foster tyranny, stifling dissent and progress toward a free society emergent from human action, not design. The dilemma demands pushing back state moral authority to protect political speech and liberty.

**Key points:**

- Indian laws like UAPA and sedition have been used in 5,128 and 229 cases (2015-19) against dissenters, with conviction rates under 4%, indicating misuse for suppression.
- 2021 IT Rules allow government to compel social media intermediaries to trace message originators and remove content deemed harmful to sovereignty, threatening user privacy and speech.
- Classical-liberal theory posits government as self-interested, making speech regulation prone to abuse rather than benevolent protection, as per public choice and Hayek.
- State overreach on online speech undermines spontaneous orders and individual liberty, warranting minimal or absolute free speech protections.

**By Sanjana Sitaraman**

* * *

The fundamental unit of a Liberal democracy such as ours is the *rational individual* endowed with civil, economic and political rights. Among the most crucial of these is the right to free speech. This, however, is not an absolute right and hence poses a big dilemma. Humans have an inherent urge for self-expression and speech, but some speech can hurt the society’s peace at large. This might then legitimize the role of the state in regulating free speech (eg: prevention of hate speech that spurs a communal riot). So, how free can free speech be?

The [](http://www.goforthelaw.com/articles/fromlawstu/article48.htm)*[reasonable restrictions](http://www.goforthelaw.com/articles/fromlawstu/article48.htm)* clause (Art 19(2)) leaves room for *amebic excursions* of the Indian state into everyday lives of the people, while claiming to guarantee protection of public order. The pronouncement of fundamental rights granted constitutional protection to the citizens from the state. The state has, however, found ways to crack down on individual rights and liberties, especially conventional free speech. This is evident in the use of [extraordinary legal measures](https://allindialegalforum.in/2020/10/05/a-brief-analysis-of-anti-terror-of-legislation-uapa/) such as Unlawful Activities (Prevention) Act (1967) and [Sedition Law](https://www.orfonline.org/expert-speak/sedition-law-threat-indian-democracy/) (Section 124 A) in the name of national security. UAPA was introduced decades ago to curb terrorism and maintain the integrity and sovereignty of the country. It has gradually grown, through multiple amendments, to [constrict Article 19](https://thewire.in/rights/uapa-anti-terrorism-laws), permitting detention up to 180 days without any charge by the state authorities. The recent amendment to the UAPA in 2019 only furthered the state power to [encroach upon individual freedoms](https://www.firstpost.com/india/uapa-amendment-bill-2019-violates-the-very-international-laws-it-quotes-defies-principles-of-natural-justice-7104391.html), making it possible for the government to hold not only organizations but also the individuals accountable. 

Section 124 A of Indian Penal Code, on the other hand, is a colonial law continued to this day. It renders [immense power](https://www.hindustantimes.com/analysis/the-crippling-effect-of-sedition-and-uapa-on-dissent-in-india/story-QBCPtSpVcYgbdnavysc8UL.html) to the government to charge any visible representation, words spoken or written, which can potentially cause hatred or contempt as illegal and demanding legitimate governmental action. The ambit of declaring an activity unlawful and imposing a country-wide ban on associations, or framing individuals as potential threats to national integrity has brought free speech to the grey area. These extraordinary laws have been [mostly used on](https://www.hrw.org/news/2020/09/16/india-arrests-activists-politically-motivated) lawyers, activists, journalists and civil society members. Government reported to the Rajya Sabha that a total of [5,128 UAPA cases, 229 sedition](https://timesofindia.indiatimes.com/india/5128-uapa-cases-229-sedition-cases-lodged-in-five-years-government/articleshow/81433613.cms) cases were lodged across the country from 2015-19. These included the arrests of student activists Devangana Kalita and Natasha Narwal, Umar Khalid, and Disha Ravi, to name a few. Academics, like Apoorvanand, Honey Babu and Jayati Ghosh, have also been slapped with sedition charges. A jump of 165 % from 35% of UAPA cases has been recorded by [NCRB](https://www.hindustantimes.com/analysis/the-crippling-effect-of-sedition-and-uapa-on-dissent-in-india/story-QBCPtSpVcYgbdnavysc8UL.html) between 2016 and 2019. A similar hike of 33% in Sedition charges has been observed. 

Despite growing arrests the conviction rate is extremely low in both cases – [Below 2%](https://economictimes.indiatimes.com/news/politics-and-nation/below-2-of-those-arrested-under-uapa-convicted-in-2015-19-ncrb/articleshow/83624754.cms?from=mdr) of those arrested are convicted in UAPA between 2015-2019 and only [3.3%](https://www.thequint.com/podcast/sedition-laws-need-to-be-scrapped-cji-ramana-revives-debate#read-more) till 2019 in cases of Sedition according to NCRB Data. 

The trajectory of Indian democracy from “Free” to “Partly Free” in Freedom House’s latest [report](https://freedomhouse.org/countries/freedom-world/scores) is reflective of the state’s attempts to curb political dissent. As India moves towards *collectivist ideals* of Hindutva, which promote greater governmental interference in the domain of free speech, a dilemma arises. Should the state, which has time and again been accused of hampering free speech, be the judge of what constitutes a ‘good’ speech? Should the growing influence of the state in the areas of free speech become a valid ground to rethink questions on speech in a democratic country that claims to uphold fundamental rights? There are no easy answers to these dilemmas of free speech and state control. 

Individuals participate in exchange of ideas and information that drives social action. The premise of which is also that individuals need to express themselves for achieving self growth. Further, government regulation on the free flow of information only juxtaposes the conventional understanding of individuals as rational actors, who can screen required [information](https://www.jstor.org/stable/1341698?seq=1#metadata_info_tab_contents) which suits them. Public choice theory argues that much like private individuals (or market actors), government agents are also self-interested, rational actors. Therefore, to assume that government regulation on free speech would be motivated by benevolence and not self-interest is a faulty assumption. 

The vulnerability of political speech and information and the fact that politicians are *self-interested actors* raises another dilemma. Free speech runs through troubled waters when it is [used to stifle](https://theprint.in/campus-voice/right-to-free-speech-is-democracys-precious-gift-but-not-when-it-stifles-others-voices/555715/) the voice of others who might hold contrary opinions or challenge the dominant voices. On the other hand, hate speech and war mongering might not be free speech at all if it systematically threatens the capacity of other individuals to protect their freedom. For instance, [Kapil Mishra](https://thewire.in/communalism/watch-bjp-kapil-mishra-interview-delhi-riots)’s inciting speech and sloganeering by Anurag Thakur is said to have stirred the North-East Delhi riots.

**On online free speech** 

In an evolving world, social media has enabled a more *spontaneous* global order. Free speech has assumed increased importance. Platforms like Facebook and Twitter have become spaces for free speech and expression, which has also facilitated speedier and easier dissemination of information. This has created not only new social but also new political and even economic relationships between people. For instance, [Facebook’s market capitalization](https://www.usnews.com/opinion/articles/2016-05-23/free-speech-is-good-for-the-economy) is twice the size of all large European tech giants combined. Twitter, Facebook and other social networking sites have also aided digital activism like the [#MeToo Movement](https://www.usatoday.com/story/news/2018/10/13/metoo-impact-hashtag-made-online/1633570002/) or [Black Lives Matter movement](https://www.newyorker.com/culture/cultural-comment/the-second-act-of-social-media-activism). In India, a more recent victory for online free speech was the [social media-led rescue](https://foreignpolicy.com/2021/06/28/social-media-covid-19-india-resources/) of the near collapse of the country’s public health system during the pandemic. But what happens when this free flow of information is regulated? 

Before 2015, [Section 66A](https://sflc.in/any-regulation-online-speech-india-must-safeguard-rights-free-speech-and-privacy) of the IT Act 2002, acted as a legal censor for online speech in India. The objective of the law was to tackle cyber crime, and it was grossly misused by the state. The draconian law was struck down in 2015 in the [Shreya Singhal vs Union of India Case,](https://indiankanoon.org/doc/110813550/) a major victory for online speech. However, it came to the Supreme Court’s notice that the Section was surprisingly [still in use](https://lawschoolpolicyreview.com/2019/06/04/section-66a-an-unending-saga-of-misuse-and-harassment/). In 2021, the government introduced its new IT rules. These rules only increased the purview of government control, which might further harm the *cooperative and dynamic framework* of social media. Government-mandated [IT Rules](https://www.indiatoday.in/technology/news/story/govt-announces-guidelines-for-intermediaries-and-digital-media-ethics-code-2021-here-s-all-you-need-to-know-1772974-2021-02-25) will now allow it to regulate digital platforms. The former can ask the latter to reveal the originator of a message or Tweet under the [Digital Ethics Code](https://www.scconline.com/blog/post/2021/05/26/information-technology-intermediary-guidelines-and-digital-media-ethics-code-rules-2021-2/). Such traceability puts in jeopardy the privacy of users and thwarts their free speech. According to the Rules, any content impacting the sovereignty and integrity of the country or is detrimental to the country’s international relations will be under the scrutiny of an intermediary who shall be notified about such content by the government or its agency and/or Court. These intermediaries are protected under [Section 79](https://thewire.in/tech/new-it-rules-the-great-stretching-of-due-diligence-requirements-under-section-79) of the [IT Act, 2000,](http://kanoon.nearlaw.com/2017/10/28/information-technology-act-2000/) provided they comply with government guidelines. 

The IT Rules then legally allow the government to regulate online free speech and give them the [legal cover](https://www.trtworld.com/opinion/what-do-india-s-new-laws-mean-for-the-world-s-biggest-democracy-47769) to take down any or all material from social media deemed unlawful. This can be seen as yet another measure for the government to curb political dissent. The new Rules will enhance the role of the government from a regulator to a [controller](https://scroll.in/article/988105/explainer-how-indias-new-digital-media-rules-are-anti-democratic-and-unconstitutional). The creation of Grievance Redressal Mechanism [(Rule 11)](https://thewire.in/government/it-rules-digital-media-grievance-redressal) now has the power to not only receive complaints but also acknowledge and resolve the complaints within a 15-day deadline without giving any reason for the decision taken by them. Thus, the new IT Rules’ provisions leave scope for the government to maneuver itself as a judge on good and bad speech, detrimental to (online) free speech. 

A free society is a result of *human action and not human design* as Adam Ferguson wrote. Such a regulatory framework, with an intermediary or the state constantly [scrutinizing individuals](https://www.voanews.com/silicon-valley-technology/india-internet-law-adds-fears-over-online-speech-privacy), undermines free speech. Further, Hayek stated that when government regulations, commands and prohibitions dictate people’s interactions and actions, people are limited in their [liberty](https://www.fff.org/explore-freedom/article/f-a-hayek-on-individual-liberty/). In India, this was evident even during the Pandemic! [55 journalists](http://www.rightsrisks.org/banner/india-medias-crackdown-during-covid-19-lockdown-2/) were arrested or slapped with sedition for their reporting of the pandemic according to Rights and Risks Analysis Group in the months of March and May, in 2020 alone. 

Do the recent encroachments upon online speech using legal and policy apparatus by the government make a compelling case for absolute free speech? Would it help to completely remove the biased moderator? [Lysander Spooner](https://oll.libertyfund.org/person/lysander-spooner), an American legal theorist, abolitionist and radical individualist, states that no entity can coerce any individual to act in obedience to what the former feels is the right action or knowledge. In the current scenario, the government often steps in as the moral authority over what fits as good and bad speech, stopping the progress of knowledge, impacting individual liberty and pursuit of [happiness](https://www.libertarianism.org/columns/lysander-spooner-vices-crimes). A convincing reason to push back the state from the sphere of free speech. 

The government has put forth the spread of false news, public morality and safety of citizens as the reasons for control on [speech](https://www.aljazeera.com/news/2013/12/16/report-india-free-speech-under-threat/). However, government surveillance in citizens’ daily lives, regulating human behaviour and action, will result in tyranny. As [Hayek](https://www.minneapolisfed.org/article/1992/hayeks-legacy-of-the-spontaneous-order) quotes, *“Tyranny results from the government’s attempt to plan the workings of daily life,”* the constant fear of privacy and subsequent clampdown might fundamentally change the way we engage online.

*Read more: [Why Pegasus is just the tip of the iceberg](https://spontaneousorder.in/why-pegasus-is-just-the-tip-of-the-iceberg/)*

* * *

**About Sanjana Sitaraman**

Sanjana is a Post Graduate in Political Science from Jawaharlal Nehru University. She is a passionate and driven student of politics with keen interest in Ancient Western Philosophy, Democracy and Gender studies.

## Why Pegasus is just the tip of the iceberg

Original: https://www.spontaneousorder.in/p/why-pegasus-is-just-the-tip-of-the-iceberg

Author: Spontaneous Order

Published: 2021-08-16T11:44:42.000Z

Topics: cybersecurity, surveillance, national-security, privacy

> A global media investigation has revealed that Pegasus, a telephone hacking software invented in Israel and supposedly sold only to governments, has been used across the world to tap the phones of politicians, journalists, NGOs and others. In India, the..

**Summary:**

Swaminathan SA Aiyer argues that Pegasus spyware revelations—targeting 300 in India including Rahul Gandhi, two Union ministers, and 40 journalists—represent just the tip of a massive global cybersnooping iceberg driven by national security and corporate competition, not primarily press freedom subversion. Citing Edward Snowden's 2013 exposures and a cybersecurity expert's estimate that every email and phone call is monitored by about 100 entities (52% private actors, 48% state actors from multiple countries), Aiyer asserts privacy has long been an illusion. With 70% of websites compromised, hacks taking 240 days to detect, and viruses growing 66% yearly, even powerful states and corporations fail at defense. From a classical-liberal realist perspective, India must leverage its IT prowess to build offensive hacking against rivals like China and Pakistan—mirroring WWII code-breaking wins—and robust cyber defenses, as no country can afford to lag in this amoral arms race. While urging legal protections for personal privacy, Aiyer notes governments retain vast surveillance powers under national security laws, with non-state threats like terrorists and ransomware posing greater dangers than state misuse.

**Key points:**

- Pegasus is a minor side-effect of ubiquitous cybersnooping essential for national security and corporate espionage.
- India must develop advanced hacking and cyber-defense capabilities to match rivals like China and Pakistan.
- Every communication is monitored by roughly 100 entities, with 52% private and 48% state actors.
- 70% of websites are compromised, hacks evade detection for 240 days, and viruses grow 66% annually.
- Governments retain surveillance powers for security; protect privacy via law amid broader cybersecurity threats.

**By Swaminathan SA Aiyer**

* * *

A global media investigation has revealed that Pegasus, a telephone hacking software invented in Israel and supposedly sold only to governments, has been used across the world to tap the phones of politicians, journalists, NGOs and others. In India, the 300 targets include Rahul Gandhi, two serving Union ministers and 40 journalists.

I applaud the investigative work behind these revelations. The media is rightly worried about press freedom. But Pegasus is just the tip of the iceberg. Cybersnooping has become vital for everything from national security to corporate competition. All countries (and many corporations) have bought or are developing a hundred versions of cybersnooping, many far more powerful than Pegasus.

Edward Snowden revealed in 2013 the extent of global surveillance by the US and its European allies. Since then, high-tech snooping has become a multi-billion dollar industry financed by governments and corporations. German Chancellor Angela Merkel was targeted by US snoopers.

I understand the indignation of hacked journalists. But this is not just a game to subvert press freedom — that is a tiny side-effect of a much bigger game. Snooping has become the very heart of national security, and covers almost everybody under sundry laws. Since the US snooped on Merkel, surely it also tried snooping on Xi Jinping, Vladimir Putin, Boris Johnson, Narendra Modi, and every leader of substance. Can anyone believe these targets are so well defended that they are hacker-proof?

The US complains bitterly about growing Russian and Chinese hacking. But the national interest of China and Russia demands that they equal or excel the US. India, with its significant IT prowess, must surely build its own hacking abilities, as well as cyber-defence capabilities.

World War II was won mainly by the British breaking Germany’s military codes and the US breaking Japan’s codes. This superiority of intelligence translated into great military victories.

For this reason, surely India must do its level best to hack into Xi Jinping, Imran Khan, and all possible systems of China and Pakistan, just as those countries must be hacking into ours. This is not a morality play. It is not about the sanctity of privacy. It is a deadly arms race in which no one can afford to be left behind.

The corporate world is fully into hacking. I was told by a New York investment banker that, for security, his colleagues change their passwords every single day and their telephones every week. A small scrap of commercial intelligence can translate into profits of billions. Commercial espionage is common in every high-tech industry, and even in conventional industries like autos. This does not happen in the US alone. No one should think Indian industry lives on a higher moral plane.

Four years ago, I attended a sobering meeting addressed by the head of a top government cybersecurity organisation. He estimated that every email and phone call is monitored by at least a hundred invisible entities, of whom 52% are private actors and 48% are state actors (of more than one country). Privacy was already an illusion long before Pegasus arrived.

Countries and corporations with the most powerful anti-hacking systems have failed to protect themselves. What hope, then, do individuals have? The cybersecurity expert says 70% of websites worldwide are compromised. Daily checks are no defence: it can take 240 days for experts to detect a hack. Viruses are growing by 66% per year, some aiming to watch and record, others aiming to destroy systems. They can see every financial transaction, every compromising revelation in emails and phone calls, every movement of you and your family.

The state has no monopoly on snooping. Rather, states themselves are hacked daily. Despite spending billions on cybersecurity, states are losing this war. Drug lords and terrorist groups have used hacking as a low-risk way of penetrating the most powerful nations.  
Ransomware has become a huge commercial business. Hackers paralyse a corporate system and unfreeze it only after being paid billions. As a professed atheist, I am in greater danger of being cyber-tracked and killed by a religious fanatic than an oppressive government. The Taliban and ISIS could become greater security threats than Pakistan.

The rise of hacking is no excuse for governments to spy on their citizens through Pegasus or other devices. Personal privacy must be protected by law. But the government has vast powers to tap phones for national security, and no government will give up that power, or stop its misuse. My phone has been tapped since at least 1978, and cybersecurity experts now say a hundred other agents are watching and listening too. I do not let that inhibit my writings.  
In sum, privacy matters, but is just a tiny part of the massive problem of cybersecurity. We face unprecedented threats and have no clear answers.

*This article was originally published in [The Times of India](https://timesofindia.indiatimes.com/blogs/Swaminomics/why-pegasus-is-just-the-tip-of-the-iceberg/) on 7 August 2021*.

*Read more: [Tamil Nadu’s Unsustainable Energy Policy](https://spontaneousorder.in/tamil-nadus-unsustainable-energy-policy/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Tamil Nadu’s Unsustainable Energy Policy

Original: https://www.spontaneousorder.in/p/tamil-nadus-unsustainable-energy-policy

Author: Spontaneous Order

Published: 2021-08-14T14:48:32.000Z

Topics: energy-subsidies, direct-benefit-transfer, groundwater-depletion, agricultural-policy

> In September 1984, Tamil Nadu’s then chief minister M.G. Ramachandran launched a free power scheme for all small & marginal farmers and hut residents. Eventually, the benefits were extended to the big farmers and farmers engaged in horticulture and praw

**Summary:**

Tamil Nadu's free electricity schemes, starting with farmers in 1984 and extending to all households with 100 units bimonthly since 2016, impose a heavy fiscal burden—₹3,073 crores in subsidies to TANGEDCO in FY 2019-20—while distorting incentives and promoting waste. Farmers, receiving unlimited free power, over-pump groundwater, depleting the water table in regions like the Kaveri delta and necessitating higher-capacity pumps that exacerbate electricity use in a vicious cycle of resource exploitation. Households, even low-consumers using under 100 units, lack motivation to conserve, as bills are fully subsidized regardless of usage. Wealthier homes benefit equally, and illegal practices like bribing for extra meters to double free units have proliferated. From a classical-liberal viewpoint, these blanket subsidies erode accountability and efficiency. The author advocates replacing them with Direct Benefit Transfers (DBT), tailoring subsidies by land size for farmers or targeting the poor for households, enabling farmers and residents to pay metered bills and pocket savings for other uses. DBT fosters judicious consumption of electricity and water, as evidenced by Bihar's cycle scheme with <5% leakage and 30%+ enrollment gains, while curbing illegality through bank-linked mapping and enhancing sustainability by reducing emissions.

**Key points:**

- Free electricity for Tamil Nadu farmers causes groundwater over-extraction and a vicious cycle of deeper pumping and higher power use.
- Blanket 100-unit free power to all households eliminates conservation incentives, benefiting the wealthy and enabling illegal extra-meter installations.
- Switch to DBT for targeted subsidies empowers farmers and poor households to pay bills, save on usage, and redirect funds productively.
- Bihar's DBT cycle scheme proves low leakage (<5%) and strong outcomes like 30% enrollment rise, supporting DBT's efficacy over free schemes.

**By V. P. Vivek Das**

* * *

In September 1984, Tamil Nadu’s then chief minister M.G. Ramachandran launched a free power scheme for all small & marginal farmers and hut residents. Eventually, the benefits were extended to the big farmers and farmers engaged in horticulture and prawn/fish cultivation. Later, the scheme was extended to weavers. Handloom weavers got 250 units of free electricity and power-loom weavers got 750 units. In 2016, the Tamil Nadu government started delivering [100 units of free electricity to all domestic users](https://cms.tn.gov.in/sites/default/files/go/energy_e_37_2016_lr.pdf), irrespective of their economic status. This free power scheme is still in practice (now the [Tatkal scheme](https://sarkariyojana.com/tamil-nadu-tatkal-scheme-free-power-connection-farmers-application-form/)). The scheme is implemented through a significant tariff subsidy to TANGEDCO, the state electricity board. In FY 2019-20, this subsidy amounted to [₹3,073 crores](https://www.aurovilleconsulting.com/blog/the-double-edged-sword-of-electricity-subsidies/).

As the electricity is provided free for the farmers, the farmers [do not judiciously use the electricity](https://www.aurovilleconsulting.com/blog/water-and-energy-in-tamil-nadus-agricultural-sector-from-a-problem-to-an-opportunity/) given. This leads to over-pumping groundwater. As the farmers don’t have any incentive to save electricity, they become less conscious of their consumption, and it discourages electricity and water conservation. This creates a vicious cycle. As the excessive pumping of the groundwater pushes the water table further down, the farmers will be forced to switch to high-capacity pump sets, which increase power consumption. This vicious cycle leads to the exploitation of both water and electricity. Moreover, the Kaveri delta region in Tamil Nadu is currently experiencing a worrying rate of [groundwater depletion](https://indiaclimatedialogue.net/2018/03/19/reduced-cauvery-share-deepen-crisis-tamil-nadu/). 

To avoid this vicious cycle, the Tamil Nadu government must switch from a free power supply to a ‘Direct Benefit Transfer’ (DBT) for the farmers. Under a DBT scheme, the government will transfer subsidies directly to the farmer’s bank accounts. The government can decide the subsidy amount for each farmer based on the size and nature of the agricultural land. The farmers can use this DBT money to pay their electricity bills, and now the farmers will have an incentive to save electricity as the money saved from reducing the electricity bills can be used by them for other agricultural purposes. DBT will make the farmers more accountable and encourage judicious usage of money, electricity and water.  

The 100 units of free electricity bi-monthly to all domestic users also brings the issue of lack of accountability. Many houses in Tamil Nadu which don’t have heavy electrical equipment like air conditioners and geysers [use electricity much less than 100 units bimonthly](https://timesofindia.indiatimes.com/city/coimbatore/5-4l-households-in-coimbatore-region-dont-pay-for-electricity/articleshow/57116431.cms). So these households never pay the electricity bill as the entire bill is subsidized. Hence, these households don’t care whether they consume 50 units of electricity or 80 units of electricity as both are the same in their perspective as they don’t pay for it. When the residents realize that switching off the lights and fans will make no difference in their bill amount, they will fail to switch off lights and fans when not in use. The lack of incentive to conserve electricity creates a lack of accountability among these households. Due to this lack of accountability, the household that is supposed to consume only 50 units of electricity will now consume above 50 units. Moreover, the economically stronger people also enjoy this free electricity.  

So instead of providing free electricity, direct benefit transfers (DBTs) for the subsidized amount can be given to households. It is intuitive to say that the funds will be misused when they are directly given in cash. But in reality, DBTs are efficiently utilized. [Mukhyamantri Balika Cycle Yojana](https://www.pradhanmantriyojana.co.in/mukhyamantri-balika-cycle-bihar/) scheme by the Bihar government in 2006 is one such example. Every girl student of class 9 and above was given Rs 2500 to purchase a cycle under the scheme. The intent was to ensure an easy commute to school. Leakages for the scheme were observed to be [below 5%](https://www.ideasforindia.in/topics/social-identity/wheels-of-power-long-term-effects-of-the-bihar-cycle-programme.html), indicating little misuse of the DBTs. Moreover, the enrolment of the girl students [increased by over 30%](https://www.ideasforindia.in/topics/social-identity/wheels-of-power-long-term-effects-of-the-bihar-cycle-programme.html) in the first year itself. Under the given context, such a scheme would encourage households to reduce their electricity bill and use saved DBT money for other purposes. This will reduce overconsumption of electricity. The livelihood of these households will also improve due to increased savings. Moreover, the beneficiaries of this scheme can be limited to the economically weaker section of society. 

Additionally, as observed by the author, the free power scheme has incentivised certain illegal practice. As the first 100 units of each electricity bill are subsidized, people have started bribing government officials to split their electricity bill into two by installing additional electricity meters for the same house. So now these households get the benefit of 200 units of free electricity. It has started becoming a common practice in Tamil Nadu, where heavy electrical equipment like air conditioners and water pumps are connected to the illegally installed additional meter. Through the DBT scheme, even this illegal practice can be avoided as the additional bill cannot be generated as each bill will be mapped to the corresponding family card and bank accounts. Moreover, replacing the free electricity scheme with the DBT scheme is a highly sustainable approach as it conserves water and reduces carbon emissions by saving electricity. 

*Read more: [Climate change has raised tricky questions over policy responses](https://spontaneousorder.in/climate-change-has-raised-tricky-questions-over-policy-responses/)*

* * *

**About V. P. Vivek Das**

Vivek is an experienced data analyst with excellent problem-solving and critical reasoning abilities. He is currently pursuing MBA in Sustainable Management at IIM Lucknow. He is a Public Policy enthusiastic who has worked with 'Noida Authority' and drafted Solid Waste Management (SWM) policies for the academic institutes in Noida.

## Climate change has raised tricky questions over policy responses

Original: https://www.spontaneousorder.in/p/climate-change-has-raised-tricky-questions-over-policy-responses

Author: Spontaneous Order

Published: 2021-08-11T11:46:10.000Z

Topics: climate-policy, carbon-pricing, green-economy, public-goods

> From a heatwave in the Arctic region to devastating floods in many countries, the threat of climate change is now stark. Some new urgency can be seen in an official statement released by G20 environment ministers last weekend. It said that all 20 countr..

**Summary:**

Climate change poses challenges for policy, highlighted by the G20 environment ministers' commitment to limit warming to 1.5°C above pre-Industrial Revolution levels—a more aggressive target than the Paris Agreement's 2°C—amid upcoming UN talks in Glasgow. Achieving net zero emissions by 2050 requires global cooperation without degrowth, as the 2020 pandemic's emissions drop increased poverty. As a global public good, it demands government action complemented by private sector innovation and investment. Classical-liberal policy frameworks must adapt: first, incorporate stock variables like natural capital depletion alongside GDP flows in green national accounts; second, ensure climate justice between rich historical emitters and poor nations like India (low per capita emissions and carbon intensity), plus intergenerational equity via debated discount rates; third, favor price incentives like carbon taxes over quotas to avoid a 'licence raj' and allow market-driven green innovation rather than government-picked technologies; fourth, supplement national plans with voluntary private commitments from cities, companies, and others, echoing Elinor Ostrom's work on commons. These shifts balance mitigation with economic progress.

**Key points:**

- G20 commits to 1.5°C warming limit, pushing for net zero by 2050 without sacrificing growth in poor nations.
- Incorporate natural capital stocks into economic accounts to track green transitions beyond GDP flows.
- Prefer carbon taxes or price signals over pollution quotas to spur innovation without government technology picking.
- Complement government mitigation with voluntary private sector pledges for net neutrality.

**By Niranjan Rajadhyaksha**

* * *

From a heatwave in the Arctic region to devastating floods in many countries, the threat of climate change is now stark. Some new urgency can be seen in an official statement released by G20 environment ministers last weekend. It said that all 20 countries would try to limit global warming to 1.5° Celsius above temperatures before the Industrial Revolution; this is a more aggressive target than that of the Paris agreement in 2015, when almost all countries in the world agreed to keep it below 2° Celsius.

The new G20 agreement comes just before the United Nations Climate Change Conference in Glasgow this November. There remain many stumbling blocks before we get a credible global climate deal that will have all large countries reduce their net carbon emissions to zero by 2050, while ensuring that the poor are not denied opportunities for economic progress. The sharp drop in economic activity in 2020 caused by the pandemic led to a parallel decrease in carbon dioxide emissions and a big increase in poverty, globally. A global action plan to limit climate change can’t be built on degrowth.

Keeping climate change in check is perhaps the biggest example of a global public good, in the sense that its benefits are non-rival and non-excludable. Most would agree that governments need to play a big role in delivering this public good. However, the private sector will also be an important player to both drive innovation as well as invest in green production systems. The frameworks that drive economic policy discourse will also have to adapt in the years ahead. Let’s look at four of these shifts.

First, debates on economic performance are usually focused closely on flow variables such as gross domestic product (GDP). Shifting to a green economy will mean that changes in stock will matter too. A lot of economic activity converts stocks into flows. Some economists have already proposed new frameworks for this. One example is to look at changes in natural capital in tandem with those in physical and human capital. The latter two generally increase with economic growth; the former shrinks. Green national accounts would have to take that depletion into account.

Second, any such green shift will be disruptive. At the very least, it will involve large financial costs. Most of the carbon pumped into the atmosphere has come from rich countries. Countries like India still have low carbon emissions per capita, as well as low carbon intensity for every unit of GDP. It is unfair to expect the global poor to share the burden of mitigation equally with the global rich, especially if it means sacrificing income growth. This has been a sore point in most climate change negotiations.

However, there’s another aspect of climate justice that is just as important: between current and future generations. Some argue that today’s generation should only minimally pass on costs to future generations for emissions that the latter were not responsible for. Others say that generations to come will be richer than the current one and better able to afford the bill for a green shift.

A lot depends on what economists call the discount rate, on how costs are shared between generations. There are two tricky questions here, and the answers to both are as philosophical as they are technical. Should the discount rate in climate change economic models be low or high? A low rate, in effect, will place a higher burden on the current generation. And should the discount rate be chosen subjectively or taken from an objective number such as the long-term interest rate used to value investment projects? This is an unsettled issue, and much of the trajectory of climate change mitigation pivots around this tangle.

Third, there are two contrasting ways in which incentives can be used to make the shift to a green economy as smooth as possible. One option is to impose hard pollution quotas decided by a public agency. This could slip into a new version of the licence raj. The other is to use policy levers to change relative prices, either by imposing high carbon taxes or by subsidizing alternatives, or some combination of the two.

The use of subsidies leads us to an old question about whether governments are good at picking technologies. For example, big subsidies for solar power or one variant of electric vehicles might make it harder for other green options to attract investment. A carbon tax is simpler because it punishes polluters, but makes no distinction between green alternatives available right now and ones that can potentially emerge later.

Fourth, most heavy lifting in terms of climate change mitigation policy is being done by governments, and naturally so, given the negative externalities involved. However, individual cities or companies can also draw up their own strategies to reach net carbon neutrality by 2050, or even earlier. When former US President Donald Trump pulled the US out of the Paris agreement, individual states, companies and universities responded with voluntary pledges to cut their carbon footprints. Local voluntary cooperation to overcome the tragedy of the commons that Elinor Ostrom studied may not work on its own for a global challenge such as climate change, but it is equally true that national action plans should be complemented with private sector commitments. That could well be an emerging issue in corporate governance in the years ahead.

*This article was originally published in [Livemint](https://www.livemint.com/opinion/columns/climate-change-has-raised-tricky-questions-over-policy-responses-11627402453792.html) on 27 July 2021*.

*Read more: [Science and State: A Nightmare for Forest Dwellers](https://spontaneousorder.in/science-and-state-a-nightmare-for-forest-dwellers/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Science and State: A Nightmare for Forest Dwellers

Original: https://www.spontaneousorder.in/p/science-and-state-a-nightmare-for-forest-dwellers

Author: Spontaneous Order

Published: 2021-08-09T13:42:55.000Z

Topics: forest-conservation, indigenous-rights, scientific-forestry, public-choice

> Terms like ‘national forests’, ‘national resources’ and ‘national property’ have been part of academic and policy discourses since the turn of this century. However, in the early 1800s, any talk of using the adjective ‘national’ with fores

**Summary:**

The essay traces the origins of state-owned 'national forests' to 19th-century 'scientific conservation,' inspired by George Perkins Marsh's 1864 book Man and Nature, which advocated sustained-yield management through state control rather than outright bans on resource use. This philosophy, adopted globally including in Germany, France, and the USA, was imported to India via German botanist Dietrich Brandis, who established the Imperial Forest Department in 1864. It displaced forest-dwelling communities by criminalizing their customary practices like pastoralism and shifting agriculture, labeling them encroachers—a colonial legacy persisting in evictions and rights violations. From a classical-liberal perspective, this top-down approach fails due to Hayek's insight on the limits of scientific knowledge, ignoring local, tacit knowledge of time and place, as seen in the Banni Grasslands where state-introduced Prosopis juliflora worsened salinity. Public choice theory highlights misaligned incentives: bureaucrats prioritize turf expansion, leading to corruption and corporate land grabs, while communities lose stewardship incentives. The conclusion calls for rejecting state-centric scientific conservation, fully implementing the 2006 Forest Rights Act to empower indigenous communities as natural stewards, and adopting incentive-based policies respecting human rights over colonial dogmas.

**Key points:**

- Scientific conservation nationalized forests via state ownership, displacing indigenous communities whose customary rights were criminalized starting with India's 1864 Imperial Forest Department.
- Hayek's knowledge problem reveals top-down scientific policies ignore local tacit knowledge, as in Banni Grasslands where state intervention degraded ecosystems.
- State control creates public choice failures like bureaucratic corruption and misallocated land, dis-incentivizing communities who are natural stewards.
- India must empower forest dwellers through better implementation of the 2006 Forest Rights Act and reject colonial scientific conservation for incentive-driven policies.

**By Mohammad Anas Khan**

* * *

Terms like ‘national forests’, ‘national resources’ and ‘national property’ have been part of  academic and policy discourses since the turn of this century. However, in the early 1800s, any talk of using the adjective ‘national’ with forest land and resources would have raised many eyebrows. The question then is, how did forest land come to be nationalised? What was the rationale behind having State ownership of forests? These questions demand not just a clear historical analysis but also an examination of whether the State executed idea of conservation has actually helped preserve forest cover. If it has, what has been the human cost of it?  

This essay analyses the historical context of present-day understanding of environmental conservation. The apparent ‘human-nature’ conflict which is seen in the struggle between livelihoods and conservation, between ‘humans’ and ‘wilderness’ is the result of institutions that can be traced back to the 19th century. This essay seeks to deconstruct the ideas, the philosophy and implications of those institutions on modern-day environmentalism and on the rights of indigenous communities such as the forest dwellers. 

**Conservation and the Role of State**

The industrial revolution created numerous upheavals in the social, political, economic and natural landscape of Europe and North America. The first wave of environmentalism was led by a resistance to undo the industrial revolution and return to the age of simple village life and the beauty of the countryside. British poets such as William Wordsworth, John Ruskin and William Morris spearheaded the initial rebellions against the industrial revolution. Their call was to undo the effects of the revolution and [return to the land](https://www.google.co.in/books/edition/Environmentalism/Hu7DBAAAQBAJ?hl=en&gbpv=1&printsec=frontcover) (a metaphorical phrase for preservation of country life). However, by the mid-1800s, there was a growing realisation that the benefits of industrial revolution to humankind were too great to consider a call to undo the revolution itself. 

In 1864, an American Conservationist [George Perkins Marsh](https://www.britannica.com/biography/George-Perkins-Marsh) published his seminal work *[Man and Nature](https://uwapress.uw.edu/book/9780295983165/man-and-nature/)*. Hardly foreseen by Marsh himself, his book would go on to change the socio-economic undertones of the global environmental movement. A realisation dawned upon humankind that the answer to environmental damage does not lay in banning the axe but regulating its use. *Man and Nature* would go on to become a truly universal book. Its message of scientific conservation accompanied by principles of [sustained yield](https://www.safeopedia.com/definition/3019/sustained-yield) management would go on to be adopted by many countries, including Germany, France and the USA. Proponents of scientific conservation were of the firm belief that science can help undo the damage done by unbridled industrialisation. They argued that scientists could accurately predict and plan sustainable resource management. However, the most significant aspect of scientific conservation was its implementation mechanism – it involved the transfer of ownership of forest land and natural resources to the State. Conservation of forests would go on to become a ‘national responsibility’. The State was deemed to be the only instrument through which such change was possible. The State and its agents were presumed to prioritize public interest, in contrast to profit maximization tendencies of private individuals. The talk of national forests and national resources became an acceptable part of discourses on environmentalism and would soon become unquestionable aspects of global environmentalism. 

**The ‘Green’ Refugees – Victims of Scientific Conservation**

The Germans with their scientific expertise and conservation model would go on to spearhead the development of national forest services not just in Germany but also across the globe. At the peak of the German-British rivalry, the British Government in India did not shy away from appointing a German Botanist, [Dietrich Brandis](https://www.projekt-mida.de/reflexicon/dietrich-brandis-1824-1907-botanist-and-founder-of-the-science-of-tropical-forestry/), to head and organise India’s first national forest department. This was the Imperial Forest Department, established in 1864. It is pertinent to mention Brandis’ links to George Perkins Marsh given that there was active correspondence between the two. Brandis shared with his American counterpart an abiding faith in the power of scientific expertise to reverse deforestation. Proponents of scientific conservation were hostile towards not just industrial exploitation but also indigenous forms of land use. These included pastoralism, shifting agriculture and harvesting of forest produce, among others.

The establishment of the Imperial Forest Department and subsequently the Imperial Forest Service (1867) went on to have large scale repercussions for the State-forest relationship. More importantly, however, impacted the fate of those who have historically been linked to the forest land and resources. The forest dwelling communities who enjoyed customary rights over forest land and resources were soon replaced by bureaucrats and forest officers. Subsequently, a series of legislative diktats of His Majesty’s Government in India criminalised forest dwellers and labelled them as encroachers on forest land. Effects of this colonial dogma of conservation continue till date as evictions of tribal groups, human right violations by agents of the State, and the struggle for reclaiming lost forest land continues.

**The Flawed Economics of Scientific Conservation**

The abolishment of customary land and forest rights of forest dwelling communities did not merely pose a human rights issue. It proved to be a medicine worse than the disease in terms of achieving goals of forest conservation and management. The fundamental flaw in the idea of scientific conservation was the presumption that scientific knowledge-based policies implemented by ‘selfless bureaucrats’ will help conserve and manage forests. Both the aforementioned presumptions i.e. the reliance solely on scientific knowledge as well on bureaucrats proved to be self-defeating. 

The Nobel Prize winning economist Frederic Hayek, in his seminal essay *[The Use of Knowledge in Society](https://www.cato.org/sites/cato.org/files/articles/hayek-use-knowledge-society.pdf)*, writes about the limitations of scientific knowledge in determining a rational economic order: “Today it is almost heresy to suggest that scientific knowledge is not the sum of all knowledge. But a little reflection will show that there is beyond question a body of very important but unorganized knowledge which cannot possibly be called scientific in the sense of knowledge of general rules: the knowledge of the particular circumstances of time and place. It is with respect to this that practically every individual has some advantage over all others because he possesses unique information of which beneficial use might be made, but of which use can be made only if the decisions depending on it are left to him or are made with his active coöperation.” Extending the Hayekian argument to the issue of forest conservation brings forth the limitations of using science alone to solve environmental problems. 

There exists a body of knowledge, concerning time, circumstance and place, that has been inherited by communities closely linked to the forests. Infact, policies made in furtherance of an alleged scientific rationale and without consultation of local communities may end up degrading the land which they intended to protect. The case of [Banni Grassland](https://www.downtoearth.org.in/video/forests/how-india-lost-its-finest-banni-grasslands-to-an-exotic-species-called-prosopis-juliflora-66734) is a textbook example of the limitations of scientific conservation. The Forest Department, in order to scientifically manage the grasslands, introduced a new plant species in the region to check salinity ingress. The decision was taken without the consultation of Maldharis (the pastoralists dependent on the grassland). The new alien species, *prosopis juliflora* or *ganda babool,* has now covered much of the grassland and even increased salinity in the soil. The opposite of what was intended has happened. 

The second presumption of having the State control and manage forest land with the help of forest officers is a classic [public choice](https://www.econlib.org/library/Enc/PublicChoice.html) problem. It is a problem of mis-aligned incentives. The romanticism of bureaucracy and forest department led to [large scale corruption](https://www.deccanherald.com/city/forest-dept-officials-find-710058.html), [mis-allocation of forest land to corporations](https://www.business-standard.com/article/current-affairs/govt-industries-dodge-law-take-over-forest-land-without-tribals-consent-119010500640_1.html) and a conflict of interest with the local communities. The bureaucracy, acting in its self-interest to increase its turf and control over forest land, had little incentive in achieving resilient conservation. It neither had any skin in the game nor any economic incentive to responsibly manage forest resources. On the other hand, the communities whose livelihoods were dependent on forest resources have historically been natural stewards of forests. They share an economic, social and cultural bond with the forest. The transfer of ownership of forests from local communities to the State thereby mis-incentivised the bureaucrats as well as dis-incentivised the local community from sound forest management. The end result was anything but conservation. 

The way forward for India’s forest conservation is to rethink the role of the State in forest management and to empower (through forest rights) local and indigenous communities to be good stewards of forests. While some commendable steps have been taken in this direction such as the enactment of the [Forest Rights Act – 2006](https://tribal.nic.in/FRA/data/FRARulesBook.pdf), its implementation has been a [cause of concern](https://indianexpress.com/article/india/from-2012-odisha-saw-steep-fall-in-recgnition-of-fra-claims-study-7438897/). To overcome these challenges, there must be an exit from the idea of scientific conservation executed by the State, and an acknowledgement of the role played by incentives and ownership in solving environmental problems. 

India needs a new forest policy which is not governed by the old colonial dogmas of ‘scientific conservation’ but inspired by good economics coupled with respect for the human rights of indigenous communities. In this regard, the words of Abraham Lincoln contain a message worth pondering upon: *“The dogmas of the quiet past, are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise — with the occasion. As our case is new, so we must think anew, and act anew. We must disenthrall ourselves, and then we shall save our country.“* 

*Read more: [Should the Government add Ethanol to Petrol?](https://spontaneousorder.in/should-the-government-add-ethanol-to-petrol/)*

* * *

**About Mohammad Anas Khan**

Mohammad Anas Khan is a law graduate and is currently working as a Senior Associate with Centre for Civil Society. Anas is an academic enthusiast and has a keen interest in legal theory, public policy and the terracotta approach to environmentalism.

## Should the Government add Ethanol to Petrol?

Original: https://www.spontaneousorder.in/p/should-the-government-add-ethanol-to-petrol

Author: Spontaneous Order

Published: 2021-08-06T12:52:56.000Z

Topics: ethanol-blending, biofuels-policy, agricultural-subsidies, market-distortions

> On 5th June 2021, World Environment Day, PM Narendra Modi released the “Report of the Expert Committee on Road Map for ethanol blending in India 2020-2025,” published by NITI Aayog. The theme for this year’s event was ‘promotion of biofuels for a

**Summary:**

The Indian government's push for 20% ethanol blending in petrol (E20) by 2025, as outlined in NITI Aayog's 2021 report, promises ₹30,000 Cr annual savings on import bills and lower emissions, but from a classical-liberal perspective, it exemplifies flawed top-down intervention reliant on subsidies and ignoring market signals. Ethanol production, mainly from water-intensive sugarcane in dry Maharashtra due to subsidies, generates surplus sugar (cost ₹32/kg vs. international ₹21-22/kg) but is unviable without support, distorting prices set by the Cabinet Committee rather than markets. Environmentally, tailpipe emission reductions (up to 20% for E10/E20) are offset by lifecycle emissions exceeding petroleum, per University of Michigan studies, plus energy-intensive production and groundwater depletion. Consumers suffer as 20 Cr existing vehicles aren't E20-compatible, risking corrosion and lower efficiency from ethanol's inferior calorific value; ex-mill ethanol costs ₹51.55-62.65/litre vs. petrol's ₹41 base. SIAM deems retrofitting impossible and costly. The policy embodies mercantilist errors. Instead, markets should determine blending levels, starting with universal E10 where vehicles comply.

**Key points:**

- Ethanol blending targets exploit subsidized sugar surplus from unviable production, distorting markets via government-fixed prices.
- Lifecycle environmental analysis shows ethanol increases greenhouse gases and depletes groundwater more than petrol.
- Mandating E20 damages non-compliant vehicles (20 Cr on roads) and raises consumer fuel costs due to ethanol's lower efficiency.
- Prioritize universal E10 adoption before E20, and let markets signal optimal blending levels.

**By Samrudha Surana**

* * *

On 5th June 2021, World Environment Day, PM Narendra Modi released the “[Report of the Expert Committee on Road Map for ethanol blending in India 2020-2025](http://www.niti.gov.in/sites/default/files/2021-07/Ethanol-blending-in-India-compressed.pdf),” published by NITI Aayog. The theme for this year’s event was ‘promotion of biofuels for a better environment’. 

In the report, the committee laid down the roadmap to achieve 20% ethanol blending in petrol (E20) in the country by 2025. Currently, the proportion is at 8.5%. The report provides two reasons for this policy – that it would save India ₹30,000 Cr (US$ 4 billion) annually in the import bill, and that ethanol is a less polluting fuel and offers equivalent efficiency at lower cost than petrol.

**Background and History of the Policy**

The union government has been trying to bring an Ethanol Blended Petrol (EBP) policy since 2004. In 2018, the National Policy on Biofuels provided an indicative target of 20% ethanol blending under the EBP Programme by 2030. The 2021 report is an attempt to fast track the same by 5 years. Use of 5% EBP (E5) and 10% EBP (E10) were notified in 2015 and 2019 respectively by the MoRT&H. All vehicles produced in India since 2008 are compatible with E10.

Although the policy certainly looks good on paper and is founded on presumably good intentions, its results and implications are far off. Jonah Goldberg, a fellow at the American Enterprise Institute, succinctly expressed his [argument against ethanol blended fuels](https://www.baltimoresun.com/opinion/op-ed/bs-ed-goldberg-ethanol-20160905-story.html):

“Ethanol is stupid, wasteful and bad for cars (because it’s corrosive and inefficient), the economy and the environment.”

**Environmental Impact**

Although the report cites two studies that show that E10 and E20 blends could reduce Hydrocarbon emissions by up to 20%, these numbers only show a fraction of the entire picture. These studies only measure the final emissions from the vehicles, and not over the lifetime of these fuels. A [study](https://www.baltimoresun.com/opinion/op-ed/bs-ed-goldberg-ethanol-20160905-story.html) from the University of Michigan found that biofuels create more greenhouse gases than petroleum. Moreover, ethanol production and distribution is energy-intensive, so it contributes to more greenhouse gas emissions.

Ethanol production in India primarily happens from sugarcane, which is a water intensive crop. This is a major concern, especially given India’s rapidly depleting groundwater levels. Curiously, sugarcane is primarily grown in the relatively dry areas in the state of Maharashtra, only because of subsidies support – causing more harm to the environment.

**Faulty Policy Design**

The target of 2025 was set by the authors of the report after noting that there is surplus sugar production in the country. But the primary reason for the surplus in production is due to the subsidies that go into the industry. Sugar production from sugarcane in India is actually not viable without government support. In the previous season, sugar contracts in the international market were trading at ₹21-22 per kg, while the cost of production in India was ₹32. Recently, Prakash Naiknavarne, the managing director of the National Federation of Cooperative Federation of Cooperative Sugar Factories Limited, stated that lack of government support will result in a ‘[vertical collapse of the sector](https://indianexpress.com/article/explained/sugar-industry-export-subsidy-6929962/)’. This clearly indicates that the industry is highly dependent on government support and subsidies. 

The prices at which ethanol is procured for blending is decided not in the open market, but by the Cabinet Committee on Economic Affairs (CCEA). Prices actually play an important role in signalling to various market participants the supply and demand of a particular commodity. But when prices are decided outside the market, they send wrong signals. For instance, the Minimum Support Price (MSP) for various agricultural commodities incentivises high production despite limited demand.  This creates a slump in market prices, thus, feeding into the need for MSPs. 

Even the efforts to combat an ‘unfavourable’ trade balance of the country due to high imports are rooted in faulty mercantilist ideas of export-led economic growth. 

**Impact on Consumers**

The vehicles that are currently on Indian roads are not E20 compliant. If E20 fuel is used in them, it will lead to the corrosion of several crucial components in the engine, due to the water content in ethanol. The current vehicles made for E0 fuel (no ethanol content) are compatible with E10 but they exhibit significantly lower efficiency.

According to the Society of Indian Automobile Manufacturers (SIAM), retrospectively fitting existing vehicles to make them E20 compliant is an [impossible task](https://theprint.in/india/auto-industry-hesitant-about-govts-e20-fuel-rollout-by-2025-says-focus-on-e10-first/689043/) considering mainly the large population of 20 Cr vehicles that are not compatible, and the cost associated with it, which will have to be borne by the consumers. 

Ethanol also has a significantly lower calorific value than petrol, which would reduce the fuel economy of the vehicles. Consumers will thus have to spend more on fuel. Moreover, the government’s claim that ethanol is cheaper than petrol is a claim contradictory to facts. According to its own report, the Ex-mill Ethanol price is in the range of ₹51.55-62.65 based on the source, while the [base price of petrol](https://iocl.com/admin/img/UploadedFiles/PriceBuildup/Files/English/906e78535dd4439a985356ed135219e9.pdf) as on 16th July in Delhi is ₹41.00.

As SIAM has recommended, it is more prudent to first focus on making E10 universal in the country since vehicles are already compliant with it. 

To conclude, for the environment and the economy at large, it is imperative that the government allows markets to decide when and to what extent it would be feasible to blend ethanol with petrol. A top-down approach would prove costly for citizens and may not have equivalent benefits for the environment. 

*Read more: [Staying Logically Informed](https://spontaneousorder.in/essay-staying-logically-informed/)*

* * *

**About Samrudha Surana**

Samrudha Surana is a graduate student in economics and has previously worked as an Associate with Centre for Civil Society. His research interests lie in studying market processes, political economy, and economic history.

## Staying Logically Informed

Original: https://www.spontaneousorder.in/p/essay-staying-logically-informed

Author: Spontaneous Order

Published: 2021-08-04T13:09:07.000Z

Topics: misinformation, fact-checking, social-media, covid-19

> The Covid-19 pandemic shed light on more than just the healthcare sector of India. It also highlighted how social media, when used for all the right reasons, can arrange beds and medicines across the country, and when exploited, can cause extreme trust ..

**Summary:**

The COVID-19 pandemic exposed social media's dual role in India: enabling coordination for beds and medicines while fueling misinformation that erodes trust. A 2021 Journal of Medical Internet Research study found 30% of Indians used WhatsApp as a primary COVID-19 information source, but less than 50% verified it before sharing, leading to unreliable content. Examples include a viral video falsely claiming WHO warnings on Indian COVID deaths, a WhatsApp forward causing a TV channel to air fake Chinese soldier deaths post-Galwan clash, risking national security; disinformation vilifying the Tablighi Jamaat community, curbed only by Supreme Court intervention; and false claims of COVID-infected chickens, costing the poultry industry ₹13 billion in three weeks. Such misinformation threatens health, security, democracy, and mental well-being. The author urges individual responsibility: distinguish fake news, misinformation (unintentional false info), and disinformation (intentional harm); check sources rigorously; avoid sharing unverified content; and use AI-powered fact-checkers like Logically.ai, an IFCN-accredited platform that won India's AatmaNirbhar Bharat App Challenge. Staying logically informed through verification preserves privacy and counters tech-driven risks.

**Key points:**

- 30% of Indians relied on WhatsApp for COVID-19 information, but less than 50% fact-checked before sharing.
- Misinformation examples include Galwan clash fake lists, Tablighi Jamaat vilification, and poultry rumors causing ₹13 billion industry losses.
- Distinguish fake news, misinformation, and disinformation, and verify sources before sharing to prevent harm.
- Use fact-checking platforms like Logically.ai, which employs AI and human investigators, to vet information.

**By Anushka Das Sharma**

* * *

The Covid-19 pandemic shed light on more than just the healthcare sector of India. It also highlighted how social media, when used for all the right reasons, can arrange beds and medicines across the country, and when exploited, can cause extreme trust issues.

With every aspect of our social being getting morphed into its virtual alternative, social media is not only harping on our privacy but also feeding off of our addiction to the platforms for “news.” A study published in the peer-reviewed [Journal of Medical Internet Research 2021](https://publichealth.jmir.org/2021/1/e19858/) highlights patterns of content consumption among internet users in India during the pandemic. According to the study, **30% of Indians referred to WhatsApp** as one of the primary sources for Covid-19 information. In comparison, **less than 50% of this information was verified or fact-checked** by the individuals before forwarding. Therefore, what constitutes Covid-19 information through these platforms is as reliable as the wandering space of human imagination!

Case in point, the World Health Organisation had to release an [official statement](https://twitter.com/WHOSEARO/status/1379296571141939200?s=20) clarifying that no warning had been issued regarding the number of deaths due to Covid-19 in India, in response to a viral video stating otherwise.

But why is fact-checking so important?

The circulation of fake news can have [serious implications](https://www.rfi.fr/en/international/20210512-misinformation-dominates-india-s-media-landscape-in-covid-surge) on national security, human health, privacy, democracy, and even the mental health of those involved. The infamous incident of a well-known English news channel in India, reading names of 30 dead Chinese soldiers post the Galwan-clash last year, [was sourced from a WhatsApp forward](https://scroll.in/article/965016/ladakh-clash-times-now-falls-for-fake-whatsapp-list-naming-30-dead-chinese-soldiers). The list, read out on a prime-time slot, not only risked circulating misinformation, but also put national security and India’s bilateral relations with China on edge.

Misinformation post the Tablighi-Jamaat congregation in Delhi in the wake of a nation-wide lockdown, was another prime example of how words, stories and situations can be manipulated and vilify communities without any actual proof. It was only after the [Supreme Court intervention](https://www.hindustantimes.com/india-news/freedom-of-speech-is-most-abused-sc-while-hearing-case-seeking-action-against-tv-channels-for-spreading-fake-news-on-tablighi-jamaat-congregation/story-AIny7fcoKPFmtZrsHH0ZHM.html) requesting the Government to take steps and curb the spread of fake news, that the blame-game was put to rest.

Another piece of misinformation doing rounds during the first phase of the lockdown was concerned with egg/poultry consumption. A Facebook post with unverified information claimed a chicken in Bangalore had been infected with Covid-19. Similar information was circulated across Mumbai about a chicken broiler infected with the virus. This false information, linking the virus infection with consumption of chicken or eggs, was circulated along with fake images of chickens with ‘Ranikhet’ disease and not Covid-19. Source? a social media platform. [Impact](https://www.linkedin.com/pulse/poultry-covid-19-how-fake-news-can-kill-industry-sourav-raina/)? The industry took the brunt of losing out on ₹13 billion, merely 3 weeks after the speculation.

One ignorant WhatsApp forward not only spreads misinformation to a large group of receivers simultaneously, but also dilutes and/or exaggerates the brevity of the situation at hand and digresses the readers from the primary issue itself.

**How can you fact-check your information before sharing it with other?**

We can stop this chain of forwarding messages and take the responsibility to verify our sources before we thump our chest and go out of our way to defend a rumor, especially within our social circles.

First, [understand the difference](https://en.unesco.org/fightfakenews) between fake news, misinformation, and disinformation.

-   Fake news: is the false information crafted in and around the mainstream conversation with no particular intention in place
    
-   Misinformation: is the false information in-circulation with no harmful intention as its primary objective
    
-   Disinformation: false information drafted to manipulate the narrative with an intention to cause harm
    

While both misinformation and disinformation can be intentional, it is generally categorised on the basis of the primary investigation by the concerned officials.

Second, use these terminologies as per the context and not what seems comfortable since that will only fuel an already flammable situation. This is to avoid any pre-existing bias towards the news subject or conversation that can influence the audience and send a wrong message, like the Tablighi Jamaat case – where **disinformation** was spread against a particular community to fuel pre-existing prejudices.

Third, check your sources before you intend to share any piece of information on your favorite groups or your social media channels – this holds for both Covid-19 and non-Covid-19 related information. In case of any doubt, don’t share the news – nothing will do more harm than spreading false information.

Fourth, refer to fact-checking platforms like [Logically.ai](https://www.logically.ai/) for vetting misinformation and disinformation before sharing what seems worth passing in your immediate circle.

Logically.ai, founded by Lyric Jain in 2016 – involves technological aides like Artificial Intelligence and IFCN-accredited human fact-checkers and investigators to identify and act as gatekeepers to prevent the spread of false information. The organization won AatmaNirbhar Bharat App Innovation Challenge – in the [news category](https://pib.gov.in/PressReleasePage.aspx?PRID=1644229), launched by the Indian Government in 2020.

Lastly, stay aware. Technology is catching up with us by the hour, and the only thing keeping us safe between the use of jargon and concerns of privacy, is staying aware and verifying our news sources before sharing.

*Read more: [1991 reforms gave us miracle growth, but now it’s fading](https://spontaneousorder.in/1991-reforms-gave-us-miracle-growth-but-now-its-fading/)*

* * *

**About Anushka Das Sharma**

Anushka Das Sharma is an Associate, Policy Training and Outreach at Centre for Civil Society. Previously, she has worked in Advertising and holds a B.A. Mass Communication from Symbiosis Centre for Media & Communications, Pune. She has a keen interest in international relations, global policy, and history.

## 1991 reforms gave us miracle growth, but now it’s fading

Original: https://www.spontaneousorder.in/p/1991-reforms-gave-us-miracle-growth-but-now-its-fading

Author: Spontaneous Order

Published: 2021-08-02T10:52:56.000Z

Topics: economic-liberalization, india-economy, institutional-reform, economic-growth

> When Manmohan Singh launched economic liberalisation in 1991, India was the world’s biggest beggar for aid. Today India is a net aid donor, having committed $30.6 billion to Asian neighbours and Africa. In 1991, India’s capita income was just $360 a y

**Summary:**

Swaminathan SA Aiyer argues that India's 1991 economic liberalization under Manmohan Singh sparked 'miracle growth' at 7% for two decades, transforming it from the world's biggest aid beggar—with per capita income at $360—to a net aid donor committing $30.6 billion, a net food exporter even in droughts, and a T-20 economy backed for UN Security Council membership. Poverty plummeted, with UNDP estimating 271 million lifted out of extreme poverty from 2005-06 to 2015-16. This classical-liberal shift ended the suffocating 'licence-permit raj' of Nehru-Indira socialism, which stifled growth at 3.5% annually amid scarcities like seven-year car queues and dowry watches, while high taxes (97.7% income plus 3.5% wealth) bred black money without reducing poverty. Yet reforms were only 'half-baked,' ranking India 121st in Heritage's Economic Freedom Index as 'mostly unfree.' Growth has faded since 2016-17—from 8.3% to -7.3% in 2020-21—due to a moribund police-judicial system blocking contract enforcement, a hollow education system producing unemployable graduates, and barriers to business exit impeding creative destruction. Aiyer concludes India must deepen liberalization in these areas to regain 7% miracle growth and avoid socialist pitfalls.

**Key points:**

- 1991 liberalization lifted per capita income from $360 to $2,100 and made India a net aid donor of $30.6 billion.
- Socialist licence-permit raj caused chronic scarcities and 3.5% growth, while reforms enabled 7% miracle growth for two decades.
- Growth decelerated post-2016 due to incomplete reforms, ranking India 121st in economic freedom.
- Reform police-judicial system, education, and business exit mechanisms to restore high growth.

**By Swaminathan SA Aiyer**

* * *

When Manmohan Singh launched economic liberalisation in 1991, India was the world’s biggest beggar for aid. Today India is a net aid donor, having committed $30.6 billion to Asian neighbours and Africa.

In 1991, India’s capita income was just $360 a year, having been overtaken by several “miracle economies” of Asia growing at 7% per year or more. Three decades later, before Covid hit. India’s per capita income was up to $2,100. GDP had grown at 7% for two decades, making India a miracle economy too.

Back then, the green revolution had made India self-sufficient in normal monsoons but still dependent on food aid during droughts. Today India is a net food exporter even in droughts, and the world’s biggest exporter of rice.

In 1991, India was a leader of G-77 (group of poor countries constantly demanding more concessions to develop). Today India is in the T-20, the top 20 economies that lead the world. Hence, the US now backs it for permanent membership of the UN Security Council.

Data controversies have muddled estimates of poverty reduction. The World Poverty Clock, a Vienna-based think tank, estimated in 2018 that India’s poverty rate was just 5.3%. The UNDP estimated that 271 million Indians were lifted out of extreme poverty between 2005-06 to 2015-16. Other estimates are much lower, but doubtless hundreds of millions came out of poverty before Covid struck.

A million statistics cannot convey the qualitative transformation of life from the licence-permit raj of the Nehru-Indira era. Central planning then claimed India was best off when people had no power to decide what to produce, consume, or import — that was supposedly best left to benevolent socialist rulers who knew what was good for people better than they knew themselves. You could not produce or import anything without a licence. Raising productivity was not rewarded but punished with jail for exceeding licensed capacity.

This made almost everything scarce in ways Indians under 45 years will scarcely believe today. In the 1970s, one had to queue up for seven years for a car and nine years for a scooter. Government-owned HMT had a monopoly on watch production, and getting a watch was so difficult that it was often part of a bride’s dowry. I had to pull strings to get Amul milk powder for my first child. Cement was so scarce you had to wait in queues to get batches that in time might suffice to build a house — if the first batch had not gone bad already. All in the public interest, you understand.

The licence-permit raj meant that till 1980 India grew at 3.5% annually, half the rate of outward looking market-oriented Asian tiger economies. India patronisingly pitied the tigers (like Singapore) for being western puppets. Alas, the puppets grew richer than their colonial masters, while India remained poor.

Today, socialists still moan about 30 years of reform saying it neglects inequality. They forget that Indira Gandhi in the 1970s imposed income tax of 97.7%, plus a wealth tax of 3.5%. A Finance Ministry spokesman said at a post-budget press conference that if a rich man invested all his wealth in National Savings Certificates at 7% interest, the maximum he could earn after taxes was Rs 25,000. In theory a socialist paradise had arrived. In fact, black money exploded, corporate honesty collapsed, crooks soared and the honest went bust. In three decades after independence, India’s poverty rate fluctuated with the monsoons but showed no improvement at all. Meanwhile the population doubled. So, the absolute number of poor people doubled, an outrageous consequence of Indira’s attack on crushing inequality. Alas, many leftists want to revive that approach.

Creeping reforms began in the 1980s but became official policy in 1991. Some say liberalisation went too far. No, it was only half-baked, maybe quarter-baked. The Heritage Institute’s Index of Economic Freedom puts India at just 121st in the world, in the category “mostly unfree.”

Yet half-baked liberalisation sufficed to produce 7% “miracle growth” for almost two decades. But since 2016-17 growth has decelerated from 8.3% to 7%, 6.1%. 4.2% and minus 7.3% in the Covid year 2020-21. India looked better after 25 years of reform than after 30.

Apart from incomplete economic reform, the greatest hurdle is a moribund police-judicial system that gives no real justice, prevents enforcement of contract (the heart of a market system), and permits gross misuse for political vendettas. Second, apart from a few centres of excellence like IITs, the educational system produces semi-illiterate schoolboys and unemployable college graduates, so beneath a thin veneer of world-class skills India is hollow. Third, business entry has been liberalised but not exit, checking the creative destruction needed for success. Without tackling these, India will not regain 7% miracle growth.

*This article was originally published in [The Times of India](https://timesofindia.indiatimes.com/blogs/Swaminomics/1991-reforms-gave-us-miracle-growth-but-now-its-fading/) on 24 July 2021*.

*Read more: [How to exit farming risk trap](https://spontaneousorder.in/how-to-exist-farming-risk-trap/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## How to exit farming risk trap

Original: https://www.spontaneousorder.in/p/how-to-exist-farming-risk-trap

Author: Spontaneous Order

Published: 2021-07-29T22:57:01.000Z

Topics: indian-agriculture, farm-reforms, agricultural-subsidies, economic-liberalization

> At the height of the farm protests, the ideologically charged rhetoric that the new farm laws would result in a corporate takeover of Indian farms led to the toppling of Reliance cell towers in Punjab. Soon afterward, Reliance issued an official stateme..

**Summary:**

Indian agriculture remains trapped in a high-risk, low-return landscape due to excessive state interventions across 13 central ministries and countless state agencies regulating everything from land rights to marketing, stifling productivity and resource mobility. Despite avoiding nationalization thanks to 1950s Swatantra Party opposition, post-Green Revolution data from 734 districts (1966-2018) shows persistent yield gaps—Punjab and Haryana far outpace others in rice and wheat—with high geographic variability in yields outside these states, exacerbated by uneven public goods like irrigation and absent markets for land, crops, inputs, and labor. This fragmentation prevents decentralization's promise of experimentation and best-practice adoption, leaving each district in a unique policy trap. Input subsidies and MSP procurement worsen outcomes by degrading soil, water, and climate while locking farmers into rice-wheat cycles amid higher risks in maize and cotton. From a classical-liberal view, firms prudently avoid this sector, unlike politically driven public enterprises. The three farm laws are merely a start; comprehensive reforms must free farmers to optimize resources, enter/exit agriculture freely, contract privately, and enable corporate entry—signaling a shift to low-risk, high-return progress—demanding long-term stakeholder commitment to escape these currents.

**Key points:**

- Excessive government agencies create conflicting interventions, trapping agriculture in low productivity and high yield variability across 734 districts.
- Punjab-Haryana yield advantages persist post-Green Revolution, with higher risks elsewhere due to poor public goods and market failures.
- Subsidies and MSP distort incentives, degrading resources and confining farmers to high-risk rice-wheat focus.
- Reforms must enable farmer and resource mobility, free contracts, and private entry/exit to realize decentralization's experimentation benefits.
- Corporate willingness to enter agriculture will mark success in achieving low-risk, high-return outcomes.

**By Nimai Mehta**

* * *

At the height of the farm protests, the ideologically charged rhetoric that the new farm laws would result in a corporate takeover of Indian farms led to the toppling of Reliance cell towers in Punjab. Soon afterward, Reliance issued an official statement that the company had no interest in entering the farm sector. It’s this reluctance of private corporations, large or small, to plunge into the currents of Indian agriculture that ought to worry us all.

Contrary to the dark warnings of capitalist takeovers, the mundane reality of a market economy is that firms survive by being prudent in taking risks. In contrast with the imperial era, when the East India Company grew by muscling its hold within the country, private firms in a market economy grow in size primarily because they have efficiently managed the level of risk while securing real productivity gains for all. Instead, our large public sector undertakings suffer perennial losses because political, not market, motives have inevitably shaped the risk-to-returns profile of our overextended public sector while undermining productivity gains for the economy.

While Indian agriculture was saved from outright nationalisation — thanks to principled opposition by the Swatantra Party in Parliament against [Jawaharlal Nehru](https://indianexpress.com/about/jawaharlal-nehru/)’s farm collectivisation efforts in the 1950s — the Indian state has since then, in the name of food security, done everything for the peasant farmer but stay off his back, to paraphrase Gandhi’s prophetic views. Even today, a cornucopia of government agencies have a say on all aspects of the farmer’s livelihood — the latest count ([https://icrier.org/pdf/Agriculture-India-OECD-ICRIER.pdf](https://icrier.org/pdf/Agriculture-India-OECD-ICRIER.pdf)) includes 13 central and countless state ministries and agencies that oversee rural property rights, land use and land ceilings; commodity prices, input subsidies and taxes, infrastructure, production, credit, marketing and procurement, public distribution, research, education and extension services; trade policy; agri-business and research — the list goes on.

The result has been a suffocating mix of arbitrary and conflicting policy interventions by both the central and state government agencies. This, combined with poor and varying levels of provision of basic public goods, including irrigation, has meant that some 50 years after the Green Revolution, we all find ourselves trapped in an all-India agricultural landscape characterised by relatively low productivity levels that co-exist with high levels of variation in crop yields across our farming districts. Ironically, we have bought “food security” at the cost of an agricultural sector that ensnares all of us — farmers, households, consumers, traders, firms, and the state — with lower levels of individual welfare and higher levels of overall risk.

Using official crop production statistics for some 734 districts, I have computed the median (typical) district-level yield (in tonnes-per-hectare) for four major crops — rice, wheat, maize, and cotton — along with the geographic variability of this yield (risk) across all reporting districts for each year from 1966 to 2018. Combining these two values — median district yield and its geographic variability across all farming districts — provides us a measure of the all-India level of risk-to-return, in percentage terms, that has shaped the agricultural landscape for each of the four major crops over the past 50 years. The results for rice and wheat, captured in the chart, confirm the following stark lessons.

One, the large gap in rice and wheat yields that opened up between Punjab and Haryana and the farm districts in the rest of the country remains far from being closed — some five decades after the Green Revolution took root in these two states. Plus, rice and wheat grown outside of Punjab and Haryana continue to display far higher levels of yield variation or risk across districts.

Two, severe unevenness in the provision of common goods across districts — irrigation, roads, power, etc — when combined with the absence of well-functioning markets for agricultural land, crops, and inputs, the slow if any progress achieved on labour reform, and the poor quality of education have, taken together, worked to reduce overall resource mobility within and across our farming districts. Most importantly, they have limited the mobility of ideas and technology needed to increase productivity and reduce the variation of yield across districts.

Three, as a result, the real promise of a decentralised system — of experimentation, of learning from each other, and the adoption of best-practices and policies — has failed to materialise. Instead, Indian agriculture since Independence has remained a highly fragmented effort. We seem to have a different “agricultural model” for each of the 734 farming districts in the country.

Without fundamental reforms that allow for greater mobility of farmers and agricultural resources across the country, our farm households remain trapped, each subject to the failings of their own farming districts and states. Within a true decentralised polity, a farmer in Assam ought to benefit as much from the “Punjab model” as do farmers in Punjab, and vice-versa.

Four, the various input subsidies and minimum price guarantee procurement schemes provided by the state, far from addressing the above underlying problems, have worked to worsen the overall levels of productivity and the risk in agriculture, generating adverse effects for all of us, through the degradation of our water resources, soil, health, and climate. At the same time, these policies have tightened the trap our farm households find themselves in. Thus, as is evident in the next chart, outside of rice and wheat, the risk-to-return levels are even higher in the case of maize and cotton, including for Punjab. It is no surprise then that the farm households of Punjab and Haryana fear both, the loss of state support for rice and wheat and the higher risks implied by a switch to other crops.

Finally, the three farm laws are only a part of the far wider set of economic reforms that will be needed to stabilise Indian agriculture. The guiding principle for these reforms must be to create conditions that allow farm households to maximise their income while minimising the overall level of risk in Indian agriculture. Farmers must be made free to determine the best mix of resources, land, inputs, technology, and organisational forms for their farms. The state has too long subjected our farm households to top-down production, marketing, and distribution schemes while trapping them in an agricultural landscape fraught with risk. Farmers, just as entrepreneurs in the non-farm sector, must be allowed to enter and exit agriculture, on their own terms and contract with whomever they wish. The day large or small private corporates show a greater willingness to enter the Indian agricultural stream will at the same time prove to be the day the Indian farmer, along with the rest of us, will have moved to a low-risk, high return path of progress. Getting there is a long-term project that will require commitment on part of all stakeholders. The more we delay the needed reforms, the more difficult it will prove to be for all of us to extract ourselves out of these risk-laden currents of agriculture.

*This article was originally published in [The Indian Express](https://indianexpress.com/article/opinion/columns/farm-laws-india-protest-7427334/) on 29 July 2021*.

*Read more: [Terracotta Approach: Putting an End to Poaching](https://spontaneousorder.in/terracotta-approach-putting-an-end-to-poaching/)*

* * *

**About Nimai Mehta**

Dr. Nimai Mehta is Professorial Lecturer, Department of Mathematics and Statistics, at American University, Washington D.C. Dr. Mehta has held teaching positions at the School of Economics, University of the Philippines, where he was a Research Fellow and Program Associate with the Center for Integrative and Development Studies, and previously with the Ateneo de Manila University, Department of Economics.

## Terracotta Approach: Putting an End to Poaching

Original: https://www.spontaneousorder.in/p/terracotta-approach-putting-an-end-to-poaching

Author: Spontaneous Order

Published: 2021-07-28T10:38:14.000Z

Topics: poaching, terracotta-environmentalism, wildlife-conservation, community-incentives

> Much to the dismay of policy makers and environmentalists alike, poaching continues to occur in India. Under law, poaching refers to the illegal shooting, trapping, or taking of game, fish, or plants from private property or from a place where such pr...

**Summary:**

Poaching in India persists despite laws, leading to biodiversity loss, and surged during COVID-19 due to unemployment driving people to hunt for sustenance amid halted tourism and lax forest security. Colonial-era Indian Forest Acts of 1878 and 1927 alienated forest communities from resources, eroding their conservation incentives; the 2006 Forest Rights Act aimed to restore rights but faced implementation issues, including a 2019 Supreme Court rejection of many claims under its multi-layered Section 6 process. The author critiques the 'green approach' for separating humans from nature and failing, advocating the classical-liberal 'Terracotta approach' that recognizes human-environment interdependence by realigning incentives. Global and Indian successes include Pakistan's legalized trophy hunting, where 38 Village Conservation Communities boosted Markhor populations; in Madhya Pradesh's Panna Tiger Reserve, former Pardhi poachers became eco-tourism guides; and Kerala's Periyar Reserve formed India's first eco-development committee of ex-poachers and smugglers for alternative livelihoods. Post-COVID, policymakers should incentivize locals via wildlife protection roles and tourism employment, fostering government-NGO-community collaboration to end poaching.

**Key points:**

- Poaching surged during COVID-19 due to unemployment, halted tourism, and lax security, threatening species like tigers.
- Colonial Forest Acts alienated communities, reducing conservation incentives; the 2006 Forest Rights Act's implementation faltered with Supreme Court rejections.
- Terracotta environmentalism realigns human incentives, succeeding in Pakistan via trophy hunting by 38 communities that increased Markhor numbers, and in India through ex-poachers in Madhya Pradesh and Kerala eco-tourism.
- Policymakers should provide locals incentives for wildlife protection and tourism jobs to combat poaching.

**By Devyanshi Agarwal**

* * *

Much to the dismay of policy makers and environmentalists alike, poaching continues to occur in  India. Under law, [poaching](http://www.jstor.org/stable/24884749) refers to  the illegal shooting, trapping, or taking of game, fish, or plants from private property or from a place where such practices are specially reserved or forbidden. This practice has led to a loss of biodiversity in our country and  is a concern for all. With the Covid-19 pandemic, there have been reports of increased poaching  activities across the country. Many reasons have been attributed to this, including loss of  employment due to the pandemic which made many people turn to hunting and poaching wild animals to sustain themselves.  

**Background of the issue** 

[Tiger poaching](https://www.businessinsider.in/science/environment/news/list-of-endangered-wild-animals-in-india-is-under-threat-as-poaching-doubles-during-the-covid-19-lockdown/slidelist/82195658.cms) is on the rise again as tourist activities have come to a halt in many states. This has given poachers an opportunity to hunt wildlife as forest security has also become lax. Poaching is a lucrative trade and  allows people to earn a substantial amount of money. Along with poaching, animals also face other threats in our country such as loss of habitat, accidental deaths and conflicts with people living in nearby areas. 

During colonial times, the [Indian Forest Act of 1878](http://www.environmentandsociety.org/tools/keywords/indian-forest-act) was passed. This restricted the forest  communities from accessing forest resources. Forest dwellers felt alienated from policy making  and the administration, and hence their incentive to protect the forest was reduced. The Indian [Forest  Act of 1927](https://www.iitr.ac.in/wfw/web_ua_water_for_welfare/environment/IFA_1927.pdf) further separated the forest communities from accessing the forest. In recent times, the  approach has somewhat changed and it is recognised that the tribes and communities living near the  forests should have access to its resources. 

For example, the [Forest Rights Act of 2006](https://tribal.nic.in/FRA.aspx), asked the government to give back the rights of forest to  the communities. However, we know that there have been several problems with this. In 2019, the  [Supreme Court](https://www.thehindu.com/news/national/supreme-court%20continues-its-stay-on-eviction-of-lakhs-of-forest-dwellers/article29403695.ece) rejected the rights of forest dwellers on forest land. Section 6 of the [Scheduled  Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act of 2006](https://forestrights.nic.in/doc/Act.pdf) shows a  multi-layered and hierarchical procedure for recognition or rejection of forest-dweller claims starting  at the Gram Sabha level with multiple appellate committees at the state-level. 

**The Terracotta Approach** 

This is where the Terracotta approach to environmentalism can be useful. For the longest time, the  green approach has been adopted where the environment was supposed to be left as it is, and human action was to be separated from it, so that the environment can be protected. However, this  approach has not been successful as it alienated humans from the environment that they are so intrinsically part of. An alternative approach to this is the [Terracotta approach](https://spontaneousorder.in/what-is-terracotta-environmentalism/), where the intricate relationship between humans and the environment is recognized. It is focused on realigning and  restructuring human incentives. 

There have been examples from all over the world as to how the Terracotta approach has proven to  be successful. For example, trophy hunting is a practice where animals are hunted for sport and are  considered as a prized possession for the hunters. Unregulated, trophy hunting can lead to animals  getting killed at a faster rate than ever. However, ironically legalised trophy hunting in Pakistan has  

resulted in the conservation of the Markhor mountain goat. Thirty-eight [Village Conservation  Communities](https://tribune.com.pk/story/2298670/trophy-hunting-for-economic-growth) have been given the responsibility to protect the Markhor goat, which has led to an increase in their population.

In India too, places where local communities are directly involved in animal protection have fared  much better than those where communities have been kept separated from them. In [Madhya  Pradesh](https://www.theindianwire.com/wildlife/alternative%20means-of-livelihood-to-poachers-can-serve-our-fight-against-wildlife-trafficking-312057/), youths belonging to the Pardhi community used to engage in poaching due to lack of  employment opportunities. However, in recent years, they have turned to contributing to the eco tourism activities of the area by becoming forest and tourist guides at the Panna Tiger Reserve.  These kinds of initiatives have also been successful in [Kerala’s Periyar Reserve](https://www.theindianwire.com/wildlife/alternative%20means-of-livelihood-to-poachers-can-serve-our-fight-against-wildlife-trafficking-312057/), where Vidiyal  Vanapathukappu Sangam, India’s first eco-development committee composed solely of former  poachers and sandalwood smugglers was established. This was done to empower former poachers  by giving them alternative means of earning a livelihood. 

**Solutions** 

In the wake of the Covid-19 pandemic, many people have lost their jobs in cities and have returned to their hometowns. Due to lack of proper employment opportunities, many have returned to poaching and killing animals in order to sustain their livelihoods. The Terracotta approach can prove  to be useful in this regard. Policy makers can provide incentives to protect wildlife and also generate employment for the locals in areas of travel and tourism. Such collaborative efforts of governments, NGOs and local communities can go a long way in protecting the environment and wildlife.  

*Read more: [Why fiscal federalism in India appears to be a zero-sum game](https://spontaneousorder.in/why-fiscal-federalism-in-india-appears-to-be-a-zero-sum-game/)*

* * *

**About Devyanshi Agarwal**

Devyanshi Agarwal is a journalism graduate from the Indian Institute of Mass Communication, Delhi and is currently pursuing Masters in Sociology from Delhi School of Economics, Delhi University. Her research interests include media, environment, and urban sociology. Additionally, she has worked in the communications industry, working with brands like CRY, Bytedance and JK Cement.

## Why fiscal federalism in India appears to be a zero-sum game

Original: https://www.spontaneousorder.in/p/why-fiscal-federalism-in-india-appears-to-be-a-zero-sum-game

Author: Spontaneous Order

Published: 2021-07-26T11:07:31.000Z

Topics: fiscal-federalism, tax-reform, finance-commission, centre-state-relations

> Only a buoyant tax system can ease the battle for resources and help minimize Centre-state mistrust. The First Finance Commission was set up in 1951 to decide how taxes collected by the Union government have to be shared with Indian states. The 15th Fin..

**Summary:**

Indian fiscal federalism has evolved over seven decades with states gaining access to more taxes in the divisible pool and larger shares—from the First Finance Commission's 1951 allocation of 50% income tax and 40% excise on three commodities, to all Union taxes shareable post-2000 constitutional amendment, and the 14th Finance Commission's 42% devolution from 2015—yet Centre-state battles for resources have intensified, marked by mistrust. The Centre counters via cesses and surcharges, which rose from 10.4% of gross tax revenues in 2011-12 to 19.9% in 2021-22, reducing actual state shares below 35%. Historical examples like the Seventh Finance Commission's doubling of excise share to 40% strained Centre finances. This zero-sum dynamic stems from India's stagnant tax-to-GDP ratio at ~17% since the 1990s, as noted by the 15th Finance Commission. From a classical-liberal perspective, only a buoyant tax system—via reforms like GST overhaul—can expand the pie, ease resource fights, and minimize mistrust between Centre and states.

**Key points:**

- India's stagnant 17% tax-to-GDP ratio since the 1990s forces fiscal federalism into a zero-sum game between Centre and states.
- Centre's reliance on cesses and surcharges, rising to 19.9% of revenues by 2021-22, evades 14th Finance Commission's 42% devolution, keeping actual state shares under 35%.
- Historical Finance Commission increases in state shares prompted Centre countermeasures, fostering ongoing mistrust.
- 15th Finance Commission urges fiscal reforms, including GST overhaul, to boost tax buoyancy and expand the divisible pool.

**By Niranjan Rajadhyaksha**

* * *

Only a buoyant tax system can ease the battle for resources and help minimize Centre-state mistrust.

The First Finance Commission was set up in 1951 to decide how taxes collected by the Union government have to be shared with Indian states. The 15th Finance Commission gave its recommendations to the government in November 2020. Its report was made public in February.

Seventy years have thus passed between these two milestones. Indian fiscal federalism has seen two big trends over these seven decades. First, the number of taxes included in the divisible pool has increased since 1951. Second, states have been allocated a growing share of the taxes collected in the divisible pool. Yet, the battle between the Union government and states for money has only intensified. This is the grand paradox of Indian fiscal federalism. Why is that so?

A bit of history would help. The tax-sharing deal was modest when the First Finance Commission was appointed in 1951. States were assigned half the income tax collected by New Delhi. The First Finance Commission added a 40% share of Union excise duties on three commodities.

Subsequent Finance Commissions increased the share of states in income tax revenue as well as the number of commodities in the list of Union excise duties to be shared. In 2000, as a result of a constitutional amendment, all taxes collected by the Union government were made shareable with states.

The access to a growing number of taxes as well as a greater share in them should have satisfied the states, but that is not so. State governments have had growing fiscal responsibilities. The Union government has not been passive either. It has strategically reacted to successive Finance Commission reports in ways designed to protect its own fiscal space. The result has been a game marked by mistrust. This has recently come to the fore in the five years since the recommendations of the 14th Finance Commission became operational in April 2015.

The 14th Finance Commission recommended a sharp increase in the share of taxes to be devolved to states, to 42%. This was 10 percentage points higher than the devolution formula of the previous panel. However, as Roshan Kishore pointed out in a data story published in the Hindustan Times in September, the actual share of states in the gross revenues of the Union government has been less that 35% in the past five years. The main reason is well known. Cesses and surcharges do not have to be shared with the states, and the Union government has thus come to depend more on these than on taxes to collect additional revenues in recent years. The share of cesses in gross central tax revenues has nearly doubled from 10.4% in 2011-12 to 19.9% in 2021-22 (though this includes the goods and services tax compensation cess that is paid to states, so the effective share is lower than the accounting one).

The past five years show how the Union government has used cesses and surcharges to slip past the devolution envisaged by the 14th Finance Commission.

There is an older example that led to a very different type of outcome. The Seventh Finance Commission had also made a radical recommendation in the late 1970s. In one stroke, it doubled the share of states in Union excise duty collections, from 20% to 40%. This was because excise duty was a more buoyant source of revenue than income tax at the time. Economist Ashok Desai has argued that the sharp increase in the share of states “brought about a sudden deterioration in the Centre’s fiscal balance” after 1980.

The upshot: The Union government and Indian states have been playing an intricate game to protect their respective fiscal resources. The reason they have to do this is that the country’s tax pie has not been increasing as a proportion of gross domestic product (GDP). India’s tax-to-GDP ratio has been stagnant for many years now.

The 15th Finance Commission has nailed the problem in its recent report: “The tax revenue of the Union and states in India stood at about 17% of GDP in 2017-18 and has remained broadly constant since the early 1990s, but is now coming under pressure during the covid-19 crisis. At the same time, cesses and surcharges earmarked by the Union government have grown over time, amounting to about 15% of its gross revenues, reducing the proportion of Union revenues eligible for transfers to states from the divisible pool. Given international trends, there is a compelling case for increasing India’s tax ratio from both macroeconomic and redistributive purposes, especially at the sub-national level.”

The country’s inability to increase its share of taxes as a proportion of GDP over the past three decades means that Indian fiscal federalism has been reduced to a zero-sum game. One player gains only at the expense of another when it comes to sharing the pie. The 15th Finance Commission has thus recommended a slew of fiscal reforms to increase the tax-to-GDP ratio, especially through an overhaul of the goods and services tax.

Only a buoyant tax system can ease the battle for resources in our federal system, and hopefully minimize the mistrust that has grown in recent years between the Centre and states.

*This article was originally published in [Livemint](https://www.livemint.com/opinion/online-views/why-fiscal-federalism-in-india-appears-to-be-a-zero-sum-game-11616514681778.html) on 23 March 2021*.

*Read more: [Does Electronic Media Need a Regulator?](https://spontaneousorder.in/does-electronic-media-need-a-regulator/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Does Electronic Media Need a Regulator?

Original: https://www.spontaneousorder.in/p/does-electronic-media-need-a-regulator

Author: Spontaneous Order

Published: 2021-07-23T12:29:33.000Z

Topics: media-regulation, press-freedom, self-regulation, journalistic-ethics

> In a 2002 opinion piece, Chairman of the Press Council of India (PCI), Justice Markandey Katju, argued in favour of an electronic media regulatory authority. He proposed that the Press Council of India be renamed Media Council of India (to include telev..

**Summary:**

Paavi Kulshreshth evaluates Justice Markandey Katju's 2002 proposal for a Media Council of India to regulate electronic media, modeled on the autonomous Press Council of India (PCI), which has a majority of 20 press representatives out of 28 members, a retired Supreme Court judge as chairperson selected non-partisanly, and final decisions without court appeals. She distinguishes state control from independent regulation, arguing electronic media's agenda-setting and gatekeeping powers—evident in amplifying the 2020 migrant exodus leading to NITI Aayog's 2021 policy draft, but neglecting COVID-19 amid Sushant Singh Rajput sensationalism—demand ethical oversight akin to medicine and law. While acknowledging risks from government misuse like UAPA arrests (24 journalists in 2020 lockdown) and India's 142/180 World Press Freedom Index rank, she posits PCI-like structure minimizes censorship. Self-regulation via News Broadcasting Standards Authority fails: no channel licenses suspended, fines rare (e.g., one channel withdrew then rejoined), unpunished 2011 Mumbai attack leaks and fake news by Republic TV, Times Now. A Media Council would enforce standards, protect press freedom, and allow PCI evaluation, aligning classical-liberal emphasis on institutional autonomy over unchecked power.

**Key points:**

- PCI's structure ensures independence with press majority and no appeals, serving as a model for electronic media regulation.
- Electronic media's influence on public opinion and policy justifies regulation to penalize ethical violations, unlike limited-impact fields like medicine.
- Self-regulation by NBA lacks enforcement, with no suspensions, rare fines, and unaddressed fake news incidents.
- A Media Council of India could counter government overreach while upholding journalistic standards and press freedom.

**By Paavi Kulshreshth**

* * *

In a 2002 [opinion piece](https://www.thehindu.com/opinion/lead/media-cannot-reject-regulation/article3374529.ece), Chairman of the Press Council of India (PCI), Justice Markandey Katju, argued in favour of an electronic media regulatory authority. He proposed that the Press Council of India be renamed Media Council of India (to include television and online media). In doing so, however, he asserted, “I may clarify here that I am not in favour of regulation of the media by the government but by an independent statutory authority like the Press Council of India.” This essay aims to evaluate the viability of such a regulator. 

Prior to the evaluation, however, it is crucial to establish a distinction between state control and regulation. Autonomy of any regulatory body determines the level of state control. For instance, the Press Council of India is a statutory body established under the PCI Act of 1978. The PCI Chairperson is selected by the Chairperson of the Rajya Sabha, the Speaker of the Lok Sabha, and a third member elected by the PCI. The Chairperson is traditionally a retired Supreme Court judge. The PCI governs on matters relating to journalistic ethics and professional misconduct by print media organisations, journalists, and editors. Its regulatory authority extends to violation of journalistic ethics by the press and violation of press freedom by the state (or others). On all matters, under the jurisdiction of the PCI, the regulator’s decision is the last word. The complainant or violator cannot appeal to other courts for further enquiry. All decisions are taken through a majority. Membership-wise, the majority is composed of representatives from the press (a total of 20 of the 28 members). Therefore, in theory, one can rule out arguments of state control or Chairman-imposed autocracy. While collusion can never completely be ruled out; based on the structure of the PCI, it is fair to argue against state control or government-prompted censorship. 

Now, returning to Justice Katju’s proposal. I’d argue there is merit in extending regulation to electronic news media (televised and online). As confirmed by Justice Katju, counters include (i) potential harm to freedom of press and (ii) sufficiency of self-regulating bodies like the National Broadcasters Association (NBA). The following sections critically analyse the same.   

**Potential Harm to Freedom of Press**

This argument is fearful of threats to freedom of press under a regulatory authority. By this logic, print media has a regulatory body and hence curbed freedom of press. Indian films and television shows must go through the Central Board of Film Certification and therefore have curbed artistic independence. This, however, is clearly not the case. That being said, the absence of harm is neither a necessary nor sufficient condition for regulation. 

Justice Katju supports his argument for media regulation by pointing out the existence of regulatory authorities in medicine and law. One must then ask, is the argument applicable to doctors and lawyers justified when it comes to broadcast journalists and editors? Arguably, yes. Ethics and professional standards are crucial to all three fields. The violation of the same should, as it does for the first two, be subject to penalisation. But it is important to evaluate the nature of the institutions as well. Is the media different from law and medicine? Yes. The impact of violations in medicine and law, under usual circumstances, are limited to an individual or a group of individuals. Media, on the other hand, is an agenda setter. It influences policies and shapes public opinion. For instance, media coverage of the migrant exodus during the nation-wide lockdown in March 2020, drew public attention to the plight of migrant workers across states. Migrant workers’ status has long been neglected due the lack of political incentive to assess their living and working conditions in the cities they migrate to. Centrally sponsored schemes for the urban poor have also had a tendency of leaving migrant workers out of beneficiary lists. However, post the migrant exodus amplification, NITI Aayog released the draft National Migrant Labour Policy, 2021. 

The media is also a gatekeeper of information. It decides both what we think and how we think about it. The sensationalised coverage of Indian actor Sushant Singh Rajput’s death and the subsequent media trial came at the cost of COVID-19 coverage. Most television news networks completely neglected the rise in COVID-19 cases and the near-collapse of Indian health infrastructure that came with it. I’d argue that a more critical coverage of health system inadequacy during the first wave would have drawn greater public and subsequent government attention to the situation. Therefore, a regulator becomes all the more crucial. 

However, when taking into account the nature of the institution, one must also ask — is there greater incentive to curb media activity and restrict journalists? Again, yes. Media is the fourth estate, the watchdog. Unsurprisingly, there are political incentives to tame the watchdog. These have been made evident through the use of Section 66A of the Information Technology Act and the Unlawful Activities Prevention Act. In 2015, the Supreme Court struck down Section 66A for being “vague and overbroad, such that it also penalized speech that was constitutionally protected.” It found the provision to be in [violation of Article 19 (1) (a) and Article 21](https://globalfreedomofexpression.columbia.edu/updates/2019/02/revisiting-section-66a-an-afterw%20ord-to-a-concluded-tale/#:~:text=On%2024th%20March%2C%202015%2C%20the,Union%20of%20In%20dia.). However, arrests of journalists and editors (eg: journalist Prashant Kajolia, Editor Anshul Kaushik) under the provision have continued. 

In 2019, an amendment to the UAPA broadened its jurisdiction. The amendment allowed the state to deem individuals as terrorists (was applicable only to organisations earlier). This aided the arrests of multiple journalists — during the nation-wide lockdown alone, a minimum of 24 journalists were booked under the UAPA. More recently, Frontier Manipur editor-in-chief Dhiren Sadokpam and executive editor Paojel Chaoba were arrested for publishing an anarchist [article](https://indianexpress.com/article/north-east-india/manipur/manipur-journalists-arrested-under-uap%20a-sedition-charges-7150632/). As per the 2021 World Press Freedom Index, India ranks 142 out of 180 countries. Therefore, the institutional structure of a regulatory authority becomes crucial. 

At present, there is no regulatory body for electronic media but that ensures no protection from the UAPA or Section 66A. Interestingly enough, when Republic TV Founding Editor Arnab Goswami was allegedly attacked by motorists associated with the Maharashtra state government, the PCI released a statement defending Goswami’s rights as a journalist. It asserted, “Violence is not the answer even against bad journalism.” 

In his argument, Justice Katju talks about establishing a regulatory body similar to the Indian Council of Medical Research for medicine or the Bar Council of India for law. The existence of these bodies ensures their superiority in matters relating to medicine and law. Their superiority and expertise in these matters, one can argue, places the state on the backseat. Therefore, the existence of a regulatory body comprising industry experts, like the proposed Media Council of India, could hold a similar if not identical position. 

**Self Regulation**

The second argument against a regulator is rooted in the perceived sufficiency of broadcasting associations. The News Broadcasting Standards Authority under the NBA is responsible for ensuring compliance to the association’s Code of Ethics. It can disapprove content and impose a fine up to INR 1,00,000 on the concerned news channel. In his piece, Justice Katju asks these associations, “How many licences of TV channels have you suspended or cancelled till now? So far as we know, only one channel was awarded a fine, at which it withdrew from the body, and then was asked to come back. How many other punishments have you imposed? Let us have some details, instead of keeping everything secret.” His argument also addresses problems of transparency and accountability. He recommends, if the associations insist on self-regulation, why not televise meetings for greater transparency. An association formed out of its own members is not a regulatory authority. I’d argue it has enforcement powers no greater than a residents welfare association. 

Televisation of the 2011 Mumbai terror attack witnessed a serious violation of protocols. Reporters unintentionally leaked operational details — [“It was through news television that terrorists realised fires had been lit and that helicopters were trying to land on the roofs of the Oberoi Hotel and the Jewish Chabad House with an American rabbi and his family being held inside.”](https://www.orfonline.org/expert-speak/2611-and-the-media-where-were-the-protocols-45705/) This was a clear violation of the reasonable restriction imposed for ensuring security of the State under Article 19 (2). However, no action was taken. Electronic media is unlike print. Its agenda setting (ability to shape public opinion) and gatekeeping (ability to filter out certain news stories in favour of certain others) powers are immense. With the rapid decline in Indian print media, the reach of broadcast and online news would be boundless in the years to come. 

Among the most difficult to counter is the phenomenon of fake news. Over the years, AltNews identified and exposed fake news stories shared by prominent media outlets like Republic TV, Times Now, and The Quint. In 2017, Republic TV aired a detailed coverage accusing Delhi’s Jama Masjid of non-payment of dues worth over INR 4 crore. The [report](https://www.altnews.in/jama-masjid-electricity-bills-non-payment-fake-news-starts-social-media-republic-tv-takes/) covered the Imam’s alleged luxurious lifestyle and claimed that the BSES had suspended power supply to the Masjid. When exposed by AltNews, the organisation simply withdrew the news stories online and did not issue an apology or clarification. Therefore, the need for a regulator to ensure adherence to journalistic standards, ethics is justified. 

Post-emergency, when TOI’s Samir Jain was asked if the news media was anti-establishment or pro-establishment, he had said, “We are the Establishment.” One can critique the news media all one likes, but the fact of the matter is, the media is an undeniable force to be reckoned with in India. It shapes public opinion in more ways than one. I’d like to leave the reader with a thought. When analysing the efficiency of self-regulating associations, we must ask ourselves how efficient is a regulator? A move from Press Council of India to Media Council of India is also an opportunity to evaluate the autonomy and effectiveness of the same. 

*Read more: [What a Crypto Ban can do to Blockchain Innovations](https://spontaneousorder.in/what-a-crypto-ban-can-do-to-blockchain-innovations/)*

* * *

**About Paavi Kulshreshth**

Paavi has completed her undergraduate study in journalism and postgraduate study in public policy. Her areas of interest include health and Market Systems Development. She is currently working as an Associate at the Centre for Civil Society.

## What a Crypto Ban can do to Blockchain Innovations

Original: https://www.spontaneousorder.in/p/what-a-crypto-ban-can-do-to-blockchain-innovations

Author: Spontaneous Order

Published: 2021-07-21T12:00:32.000Z

Topics: cryptocurrency-regulation, blockchain, smart-contracts, agricultural-innovation

> Ever since the RBI banned transactions in cryptocurrency in 2018 and the Supreme Court later revoked it in March 2020, there has been constant back and forth on the subject. The Government, at times influenced by the RBI, thinks crypto is bad and decide..

**Summary:**

The Indian government's repeated threats to ban private cryptocurrencies, following the RBI's 2018 ban (revoked by the Supreme Court in 2020), create uncertainty for investors and blockchain developers, despite a potential crypto bill with stakeholder inputs and a fintech experimentation window being tabled in Parliament's monsoon session. Blockchain, the distributed ledger technology underlying cryptocurrencies like Bitcoin and Ether, extends far beyond fintech to disrupt supply chains, contract management, data sharing, and voting. Ethereum enables smart contracts—self-executing programs that automate enforcement, reducing intermediaries and discretion, crucial in India where contract enforcement is weak. In agriculture, smart contracts could boost low-uptake rainfall insurance by linking payouts to verifiable data, and enable instant payments in contract farming. Blockchain can integrate fragmented supply chains, enable real-time traceability, and cut post-harvest losses to raise farmers' incomes. Platforms like Cardano support secure decentralized apps for social networks and messaging. Banning cryptocurrencies, the primary funding and operational mechanism for blockchain, would stifle these innovations—like banning the internet while expecting computers to thrive. From a classical-liberal view, comprehensive regulation providing clarity is essential for long-term investor confidence and blockchain flourishing across sectors, rather than bans or limited experimentation.

**Key points:**

- Banning cryptocurrencies would prevent deployment and funding of blockchain innovations essential for sectors like agriculture and supply chains.
- Smart contracts on Ethereum automate enforcement, reducing intermediaries and discretion in India's weak contract ecosystem.
- Blockchain enables traceable agricultural supply chains, cutting post-harvest losses and boosting farmers' incomes via real-time data sharing.
- Government must enact comprehensive cryptocurrency regulation for clarity, rather than bans that delay or kill innovation.

**By Nikhil Kanakamedala**

* * *

Ever since the RBI [banned](https://rbidocs.rbi.org.in/rdocs/notification/PDFs/NOTI15465B741A10B0E45E896C62A9C83AB938F.PDF) transactions in cryptocurrency in 2018 and the Supreme Court later [revoked](https://www.livelaw.in/pdf_upload/pdf_upload-370875.pdf) it in March 2020, there has been constant back and forth on the subject. The Government, at times influenced by the RBI, thinks crypto is bad and [decides to ban](https://www.cnbc.com/2021/01/30/the-indian-government-may-ban-cryptocurrencies-like-bitcoin.html) all private cryptocurrency. At times, influenced by investors and other interest groups, decides to [take on a calibrated approach](https://www.livemint.com/market/cryptocurrency/fms-push-for-calibrated-approach-on-crypto-trading-calms-frayed-nerves-11615112421872.html). This has left investors and blockchain developers uncertain. Recently, Finance Minister, Nirmala Sitharaman, [mentioned in an interview](https://www.businessinsider.in/cryptocurrency/news/indias-new-crypto-regulations-are-ready-for-the-monsoon-session-of-parliament-according-to-sitharaman/articleshow/84168068.cms) that the cryptocurrency bill is ready and could potentially be taken up in the ongoing monsoon session of the Parliament. The bill is said to have been prepared with inputs from stakeholders. It is also expected to have a window for fintech experimentation.

However, cryptocurrency is not just about fintech, even though that is a major part of it. The underlying technology of cryptocurrency is blockchain, which is a distributed ledger technology (DLT). Blockchain has the potential to disrupt several areas such as supply chain management, contract management, data sharing, voting mechanisms etc. For example, Ethereum, a decentralized blockchain platform, through its native cryptocurrency Ether supports the development and running of smart contracts. A smart contract is essentially a computer program that gets triggered to execute when certain conditions are met. It reduces the need of intermediaries and lowers cost of enforcement and arbitration. In developing countries like India, contract enforcement is a huge challenge. By automating contractual decisions, smart contracts reduce the scope for discretion. 

A use case is rainfall insurance for farmers. [Researchers have found](https://www.povertyactionlab.org/evaluation/demand-rainfall-insurance-india) that the take up of such an insurance is low despite its benefits. This is because of distrust towards insurance companies, among other reasons. A smart contract, linking claims to rainfall data, can solve this problem. Smart contracts can also be used in contract farming to facilitate instant payments to farmers when quality of produce is met, thus, reducing discretion after harvest.

Another area where blockchain can be useful is supply chain management. Once again, we can look at the example of agriculture. Agriculture in India is plagued with several inefficiencies such as food loss, fragmented supply chains, missing markets etc. Blockchain can help in the creation of an integrated supply chain, enabling real-time monitoring and traceability of produce. This helps stakeholders in the supply chain to share data with each other and make efficient decisions. By managing records on blockchain, post-harvest loss can be reduced by targeting the right services to farmers at the right time. This can make agriculture more remunerative, thereby increasing farmers’ income.

Blockchain platforms such as Cardano with its internal cryptocurrency ADA allows building of decentralised apps with better security and privacy features. Many common applications we use on our phones such as social networks, messaging, news apps can be built on blockchain. This can completely change the way we store and exchange data.

All these fast-rising innovations may not directly involve cryptocurrency but still use the underlying blockchain technology. Cryptocurrency being the most popular use case of blockchain is also the most common way of operating on the blockchain. Hence, banning cryptocurrency can have an unintended effect of not being able to deploy blockchain technology. This can be bad for the technology overall. Cryptocurrency being an asset class, in a way helps fund innovations in blockchain. It draws the attention of investors and institutions, and also enables developers to innovate. 

Fintech is at present the leader in blockchain based innovations. The government has to allow this innovation to permeate into other sectors. The only way to do that is through regulation. Regulation provides clarity for investors, developers, start-ups and other stakeholders in the ecosystem who will now start to think for the long term. Banning cryptocurrency but expecting blockchain to flourish is like banning the internet but expecting computers to flourish. Even having a window for experimentation may not be sufficient for the long term. It only delays innovation. The government must instead provide a comprehensive regulatory environment for cryptocurrency to thrive in its natural state. This will in turn allow blockchain and its innovations to flourish. 

With the monsoon session of the Parliament underway, all eyes of the Indian crypto and blockchain community are on the government. Have they been influenced enough to stay on the forward path? Or have they gone back to the status quo?

*Read more: [There is no political freedom without economic liberty](https://spontaneousorder.in/there-is-no-political-freedom-without-economic-liberty-2/)*

* * *

**About Nikhil Kanakamedala**

Nikhil is a post-graduate in public policy, design & management from the Indian School of Public Policy, Delhi. Prior to this, he was an India Fellow and has worked with tribal communities in Raigad, Maharashtra on sustainable livelihoods. His interests lie in agriculture, technology, RCTs and system design.

## There is no political freedom without economic liberty

Original: https://www.spontaneousorder.in/p/there-is-no-political-freedom-without-economic-liberty-2

Author: Spontaneous Order

Published: 2021-07-19T12:46:33.000Z

Topics: economic-freedom, press-freedom, government-controls, indian-democracy

> Market freedom fosters a freer press, keeps open means of expression, and thus strengthens democracy. Last week [of January], as farmers were gearing up for protests on Republic Day, the Uttar Pradesh administration used an old trick from the Indian boo..

**Summary:**

Market freedom is essential for a freer press, open expression, and strong democracy, as economic controls enable governments to suppress dissent. The Uttar Pradesh administration's January 2021 order halting diesel sales to farmers ahead of Republic Day protests exemplifies how price and quantity controls on essentials like diesel limit the means of protest, mirroring urban tactics like internet shutdowns. Historical precedents include the 1975 Emergency's power cuts to Delhi newspapers, Nehru-era Newspaper (Price and Page) Act 1956 struck down in Sakal Papers (1962) for inhibiting idea dissemination, journalist wage regulations upheld in Express Newspapers (1958), and newsprint controls invalidated in Bennett Coleman (1973). These pre-Emergency Congress policies parallel modern internet blackouts in Kashmir and broadcast licensing fees. Drawing on Hayek's Road to Serfdom (1944) and Friedman's Capitalism and Freedom (1962), a 2018 study by Christian Bjørnskov across 177 countries confirms economic freedom, especially market openness, drives press freedom improvements. Socialists and progressives who endorse such controls elsewhere are myopic, as they entangle economic actions with political liberties, threatening democracy.

**Key points:**

- Uttar Pradesh's diesel sales ban to farmers before Republic Day 2021 protests restricted their freedom of expression by denying protest means.
- Supreme Court struck down newspaper price/page and newsprint controls in Sakal Papers (1962) and Bennett Coleman (1973) for violating Article 19(1)(a).
- Economic freedom causally precedes and improves press freedom, per Bjørnskov’s 2018 study of 177 countries.
- Government controls on production means—like diesel, electricity, newsprint—enable suppression of speech across regimes, not just authoritarians.

**By Shruti Rajagopalan**

* * *

Market freedom fosters a freer press, keeps open means of expression, and thus strengthens democracy.

Last week \[of January\], as farmers were gearing up for protests on Republic Day, the Uttar Pradesh administration used an old trick from the Indian book of controls. It ordered supply officers in all districts to stop selling diesel to farmers. A plan to parade tractors in protest on Republic Day not only requires the right to freedom of expression, but also the means to exercise that right—in this case, diesel. If you think the government controlling diesel sales and prices is good for the poor, especially farmers, and not a means of controlling the democratic process, think again. For urban elites, such control usually takes the form of cutting off the internet, shutting down phone networks and electricity, even specific social media apps.

Explicit censorship laws are rightly criticized as an assault on democracy. But, India’s long legacy of socialist policies—price controls, quantity controls, and ownership controls on the means of production—also directly affects the resources Indians need to express themselves. The Yogi Adityanath government of UP is not the first to exploit this legacy and likely won’t be the last.

One famous example is the Indira Gandhi government’s attempt on 25 June 1975 to suppress news of the arrest of opposition leaders at the proclamation of Emergency. A chain of orders directed the general manager of Delhi Electric Supply Undertaking to cut off supply to newspaper offices in New Delhi. Newspaper editions from other cities carried the news, while some of the Delhi editions of 26 June struggled. The same story manifests itself in different ways —sometimes through diesel and electricity, and at other times, through social media and the internet.

It is not just ‘authoritarian’ leaders who have used means of production to control free speech. In the 1950s, the Nehru government passed the Newspaper (Price and Page) Act, 1956, and the Daily Newspapers (Price and Page) Order, 1960. These laws regulated the prices publishers could charge for newspapers, based on page count and the amount of content. Sakal Papers challenged their constitutionality. In Sakal Papers (P) Ltd. vs. The Union of India (1962), the Supreme Court held the laws unconstitutional as they would either increase prices or reduce the number of pages, both of which would inhibit the dissemination of ideas, and therefore violate Article 19(1)(a) of the Indian Constitution.

Unfortunately, the Supreme Court was not always consistent in fighting economic controls that infringed speech. Another socialist policy in the 1950s was to regulate the wages of journalists through the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955. This was challenged by Indian Express, arguing that Wage Board rates would make it prohibitively expensive to run the newspaper. In Express Newspapers vs. Union of India (1958), the Supreme Court held this law valid, though it did set aside the punitive order of the Wage Board.

Even before the Emergency, Indira Gandhi’s government tried to use old orders in a new form to control press freedom. In addition to custom duties and limits placed on importing newsprint under the Import Order, 1955, and regulation of the sale, acquisition and use of newsprint under the Newsprint Order, 1962; the government directly regulated the size and circulation of newspapers under the Newsprint Policy of 1972-73. When challenged, in Bennett Coleman & Co. vs. Union of India (1973), the Supreme Court held that regulating newsprint supply and fixing quantity in terms of number of pages per newspaper would either lead to reduced advertisements or reduced news, and directly impact the economic viability of the paper.

These cases are a small sample of the long list of controls. They are not new. In fact, they are all pre-Emergency, imposed by Congress governments. The modern-day version of this is the internet lockdown in Kashmir, costly licensing fees for TV and radio broadcasting of news channels, and the shutdown of mobile networks, electricity, internet, social media platforms, and specific media accounts to quell protests. It is the same old economics of control that directly impacts freedom of press, civil liberties and the core of a functioning democracy.

This is also not just an Indian aberration. In The Road to Serfdom (1944), F.A. Hayek pointed out the deep link between political and economic freedom, and warned the world that without economic freedom, civil liberties remain under threat. In Capitalism and Freedom (1962), Milton Friedman argued for strong property rights protection and economic freedom as a requirement for democracy. This theory also holds up empirically. In a 2018 study, Christian Bjørnskov analysed the relationship using measures of economic freedom and press freedom indices in 177 countries. He finds that improvements in economic freedom are associated with subsequent improvements of press freedom, and that the overall association is mainly driven by changes in market openness.

Socialists and progressives who support price controls, quantity controls and minimum wages across other sectors are often the first to cry foul when these tools are used against journalists. But this view is myopic. The Uttar Pradesh administration’s restriction of diesel sales to protesting farmers demonstrates that the economy is not separate from the individuals who inhabit it. All our actions—economic, political, civic—are deeply entangled. Letting the government control the prices and sale of diesel can be as harmful to our freedom and democracy as direct censorship.

*This article was originally published in [Livemint](https://www.livemint.com/opinion/columns/there-is-no-political-freedom-without-economic-liberty-11612277918481.html) on 2 February 2021*.

*Read more: [Tamil Nadu RTE Quota: A Ground Report](https://spontaneousorder.in/tamil-nadu-rte-quota-a-ground-report/)*

* * *

**About Shruti Rajagopalan**

Advisor, Centre for Civil Society Senior Research Fellow, Mercatus Center at George Mason University

## Tamil Nadu RTE Quota: A Ground Report

Original: https://www.spontaneousorder.in/p/tamil-nadu-rte-quota-a-ground-report

Author: Spontaneous Order

Published: 2021-07-16T14:12:19.000Z

Topics: rte-quota, school-choice, education-policy, private-schools

> The Tamil Nadu government has started the application process under section 12(1)(c) of Right to Education Act from the 5th of July for this year. The section obligates unaided (private) schools to set aside at least 25% of seats at the entry level (pre..

**Summary:**

Tamil Nadu has made significant progress in implementing Section 12(1)(c) of the Right to Education Act, mandating 25% reservation in private unaided schools for weaker and disadvantaged children, with seat fill rates rising from 11.25% in 2013-14 to 59% in 2019-20, aided by digitization and a helpline. However, from a volunteer perspective with NGO Bhumi, persistent flaws undermine this: the 1km neighbourhood radius excludes rural parents lacking nearby private schools; entry-level restrictions prevent Class I admissions in schools starting at pre-primary, with only 3 of 438 Chennai schools qualifying; post-admission, schools demand fees for tuition, books, and uniforms despite rules prohibiting this, exacerbated by delayed state reimbursements; and no transfer rights trap children in one school till completion, unlike government school students. The author, advocating a classical-liberal emphasis on parental choice and efficient state support, urges reforms like Delhi's flexible distance bands (0-1km to beyond 6km), extending quotas to aided schools as in Karnataka, norm-based timely reimbursements per IIM-Ahmedabad recommendations, enforcing CBSE inclusion, and enabling transfers for special cases to empower low-income families without rigid barriers.

**Key points:**

- Tamil Nadu's RTE quota seat fill rate improved from 11.25% in 2013-14 to 59% in 2019-20 through digitization and outreach.
- The 1km radius and entry-level rules severely limit options for rural parents and Class I seekers, with only 3 of 438 Chennai schools eligible for Class I.
- Schools violate rules by charging RTE quota parents fees due to delayed reimbursements, burdening intended beneficiaries.
- Amend rules for flexible distances like Delhi, include aided and CBSE schools, ensure timely norm-based funding, and add transfer rights to enhance parental choice.

**By T. Bhuvanesh Ram**

* * *

The Tamil Nadu government has started the application process under section 12(1)(c) of [Right to Education Act](https://legislative.gov.in/sites/default/files/The%20Right%20of%20Children%20to%20Free%20and%20Compulsory%20Education%20Act,%202009.pdf) from the 5th of July for this year. The section obligates unaided (private) schools to set aside at least 25% of seats at the entry level (pre-primary or Class I) for children belonging to ‘weaker sections’ and ‘disadvantaged group’ from their ‘neighbourhood’. The expenditure under the quota is borne by the government, typically as reimbursements to schools. The provision envisages inclusivity and representativeness in classrooms, breaking the divisive nexus between access, quality and affordability of education.

In recent years, Tamil Nadu has taken remarkable strides in widening the reach of the provision. From a seat fill rate (number of students admitted divided by the total number of seats available under the quota) of 11.25% in 2013-14, there has been a healthy  increase to [59%](https://www.ilavasakalvi.in/about-english/) in 2019-20. The application process was digitised fully from 2017, and has a dedicated helpline number to assist parents. The broad definition of ‘disadvantaged group’ to include children of HIV-affected parents and transgender community is indicative of progressive policymaking. However, all this still cannot explain some gaping holes in the statute and its implementation.

PERSISTENT ISSUES

As a volunteer with [Bhumi](https://bhumi.ngo/programmes/catalyse/rte/), an NGO that guides parents through the application process under Section 12(1)(c), it was observed that the execution of the process left much to be desired. Section 8(3) of [TN RTE rules 2011](https://cms.tn.gov.in/sites/default/files/gos/sedu_e_173_2011.pdf) stipulates that parents can select only those unaided schools that fall within 1 km radius from their residence. This puts those from disconnected, rural habitations, where finding low-budget private schools in their vicinity is often difficult, at a serious disadvantage. 

Another complication in the process, which perhaps was unintended, is the conditionality that reservation is only at the level from which the school starts. This implies that a parent can avail the benefit of the quota for Class I, only if she finds a school which starts at Class I, which also must meet the ‘neighbourhood criterion’ of 1 km. Therefore, if a parent has an eligible school close by that starts at kindergarten level, she still cannot admit her child in Class I under the scheme as the school is reserved for ‘LKG parents’.

While this rule perhaps aims to ensure that no school is made to give reservation at Class I in addition to the carry-over from pre-primary RTE quota, it severely punishes parents who seek admission freshly for Class I. For instance, a perusal of the [Tamil Nadu RTE portal](https://rte.tnschools.gov.in/home?returnUrl=%2Freg-parent) illustrates that, in Chennai, only 3 out of 438 schools have their ‘entry level’ as Class I. While there’s no data on how many parents miss out on the quota due to this, one has no easy answer when parents point out this arbitrary restriction of choices for children seeking Class I admission. 

Post-admission grievances include being asked to pay ‘part’ of the tuition fee on the promise of refunding and ‘miscellaneous’ fees for books, uniform, etc. It’s a blatant violation of Section 5 of TN RTE rules, which clearly stipulates that the school must bear all these expenses of children under the RTE quota, pending reimbursement from the state. The result is that while the state is oblivious in its snail-paced disbursements of funds and the unaided schools make merry citing the same reason, the intended beneficiaries end up being the scape-goats. 

Since Section 12(1)(c) mandates the schools to provide “free and elementary education till it’s completion”, the effect is that children have to continue in the same school to claim the benefits of the quota. Parents who are forced to migrate, whose children are in schools only till Class V, or in schools that face sudden closure, do not have the option of transferring their children to another school under the scheme. Interestingly, though Section 5 of the RTE Act gives the right of transfer to children in government schools, it makes no mention of children claiming RTE quota, though both are recipients of state funding in theory.

BEST PRACTICES

Swift action in enhancing and enforcing the rules can do wonders at the ground level. Tamil Nadu can explore amending the [rules on the lines of Delhi](https://www.education.gov.in/en/sites/upload_files/mhrd/files/upload_document/delhi_rte-rules-2011_dt-25112011.pdf), which mandates the extension of ‘neighbourhood criterion’ from time to time. Delhi’s RTE portal lets parents choose schools in 0-1, 1-3, 3-6 and beyond 6 km distance range, in their order of preference. This would greatly expand the options before parents who face geographic and ‘entry level’ barriers. Like [Karnataka](https://www.thehindu.com/news/cities/bangalore/from-next-year-aided-schools-need-to-reserve-seats-under-rte-quota/article22515684.ece), Tamil Nadu could also explore if triggering Section 12(1)(b) of the Act, that mandates government-aided schools to reserve seats in proportion to aid received, would be viable.

According to [IIM-Ahmedabad’s report](http://accountabilityindia.in/sites/default/files/state_of_the_nation_-_section_12_1_c_csf_march_2015.pdf), to be fair to unaided schools, the calculation of per-child cost must be liberal and norm-based. The spirit of ‘cooperative federalism’ must move from paper to practise, where the Centre and states disburse the requisite funds on time, every time. Updated estimation and timely dispatch of funds are both necessary to prevent parents from helplessly paying up for admission. The perplexing evasion of [CBSE schools](https://www.thehindu.com/news/cities/Madurai/private-cbse-schools-out-of-bounds-for-rte-admissions/article24060691.ece) from the process with impunity can be tackled immediately. The right to transfer must be amended to accommodate the special cases under the quota. Such low-cost interventions can stop citizens from falling through the cracks of the State’s machinery.

*Read more: [The Half-Baked Forest Policies of India](https://spontaneousorder.in/the-half-baked-forest-policies-of-india/)*

* * *

**About T. Bhuvanesh Ram**

T. Bhuvanesh Ram, a student of physics by graduation, is a ‘cinephile’ whose interests include policymaking, Constitution, physical comedy, punching above his weight, and daydreaming. He has cleared the UPSC Civil Services examination 2019 and keeps himself busy catching up to his own rising expectations from life.

## The Half-Baked Forest Policies of India

Original: https://www.spontaneousorder.in/p/the-half-baked-forest-policies-of-india

Author: Spontaneous Order

Published: 2021-07-14T17:52:07.000Z

Topics: forest-policy, tribal-rights, forest-rights-act, property-rights

> The Indian government’s efforts to maintain ecological balance and environmental stability culminated in the formulation of the National Forest Policy (NFP) in 1952, and in 1988, a new version of the policy came into being. Conserving the natural herita

**Summary:**

India's National Forest Policies of 1952 and 1988 promised forest communities a 'first charge' on produce, leading to the Forest Rights Act (FRA) of 2006 to recognize dwellers' rights over resources and undo colonial laws, yet implementation has failed after over a decade. No national definition of 'forest' exists, leaving states to decide, while FRA claims cover only 14% of eligible land—1.8 million titles for 5.7 million hectares by 2017—and 118 violations were documented in 2018. Contradictory laws, high rejection rates, and a 2019 Supreme Court order for evicting over 1 million tribal households (later stayed) highlight ongoing encroachments and injustices. The central government prioritizes forest land diversions for projects and private sector involvement, like 2018 recommendations to lease wasteland to corporates, over community rights, as seen in withdrawn drafts empowering forest officials. From a classical-liberal view, sound policy must prioritize individual rights over collective interests, rejecting colonial state ownership; FRA lacks community resource rights, exacerbating tragedy of the commons. Empower self-governing institutions, equip communities with knowledge, and enact a concrete National Forest Policy treating locals as right holders, not mere stakeholders.

**Key points:**

- India's forest policies fail to deliver promised rights, with FRA implementing only 14% of eligible claims (1.8M titles for 5.7M ha by 2017) amid 118 documented violations.
- Central government favors project clearances and private leasing over tribal rights, as in 2018 expert committee recommendations and withdrawn drafts empowering officials.
- Reject colonial state control; empower forest communities as right holders through self-governing institutions to manage resources and avoid tragedy of the commons.
- A new National Forest Policy must define 'forest' nationally and prioritize individual rights, viewing locals as owners rather than stakeholders.

**By Nilesh Goswami**

* * *

The Indian government’s efforts to maintain ecological balance and environmental stability culminated in the formulation of the [National Forest Policy (NFP)](https://forest.kerala.gov.in/images/pdf/nfp1952.pdf) in 1952, and in 1988, a new version of the policy came into being. Conserving the natural heritage and protecting the  country’s remaining flora and fauna, among many other issues, formed some of the basic  objectives of the policy. The policy was ambitious in its scope, as it recognized that forest  communities have the ‘first charge’ on forest produce, paving the way for the Forest Rights Act . 

33 years later, the forest rights that the 1988 policy promised for the forests and the communities  that inhabit them have been largely non-existent. At present, there is no clear definition of  ‘forest’ that is accepted nationally. States are left to determine their definition of forests. The Union Ministry of Environment, Forest and Climate Change believes that a clear definition can open up the possibility of loopholes that can further  be exploited.  

[Forest Rights Act (FRA) of 2006](https://tribal.nic.in/FRA/data/FRARulesBook.pdf), a legislation that aimed to do away with colonial-era laws,  recognized the rights of the forest dwellers to manage forest resources, but more than a decade  since its implementation, land encroachment still continues. In 2018, [Land Conflict Watch](https://www.bloombergquint.com/politics/how-governments-across-india-are-violating-forest-rights)  documented 118 cases of violation and non-implementation of FRA. According to Ministry of Tribal Affairs [data](https://tribal.nic.in/FRA/data/MPROct2017.pdf), 1.8 million land titles have been given for over 5.7 million hectares of forest land till October 2017. This, however, constitutes only 14% of the total forest land on which  forest dwellers can actually claim their rights. 

It seems that multiple existing laws contradict the FRA, and a change is required either in the  others or in the Act itself. The Act also comes with a number of implementation challenges, as a  large number of claims are being rejected; pending or limited rights are recognized. One can’t also  forget the [order by the apex court](https://www.business-standard.com/article/current-affairs/sc-orders-forced-eviction-of-more-than-1-million-tribals-forest-dwellers-119022000855_1.html) in 2019 to evict more than a million or 10 lakh tribal and other forest-dwelling households across 16 states in India. If implemented, it would have amounted to  the largest forced eviction in Indian history. However, after the government was cornered by  opposition parties and environmentalists, the [court order was ultimately stayed](https://www.thehindu.com/news/national/sc-stays-feb-13-order-for-eviction-of-tribals-forest-dwellers/article26396154.ece). 

The central government over the years has been more focused on giving clearances to projects  requiring forest land diversion than recognizing the rights of tribal people and forest dwellers over  forests. In 2019, when the central government unveiled a zero draft of an amendment to the Indian  Forest Act 1927, it failed to ascertain that it was giving ‘more power to the forest department  authorities, including giving them the power to shoot people’, and undermining the  role of forest dwellers. The zero draft was withdrawn shortly by the government. A year before,  [Draft NFP of 2018](http://www.indiaenvironmentportal.org.in/files/file/Draft%20National%20Forest%20Policy,%202018.pdf) drew attention for potential violation of indigenous people’s rights. 

The centre’s focus seems to be more on commercial exploitation than safeguarding the interests of  forest dwellers and tribal people. ‘Several government reports over the past five years have pushed  for the involvement of the private sector in managing the forests’. For instance, in  2018, an [expert committee report](https://ntps.nic.in/writereaddata/EXPERT-COMMITTEE-REPORT-ON-TOF-18112018.pdf) had recommended leasing of wasteland to the corporate sector  for re-greening.  

A sound public policy must not sacrifice the rights of an individual for the interest of many, and  therefore, the government needs to comprehend that measures like these would only turn forests  into an asset for forest officials and private companies and disrupt the lives of many forest and  tribal communities dependent on them. 

The FRA also lacks community forest resources rights. The forest communities and forest  resources are inseparable. The inability of forest communities to enjoy common resource rights  can also be attributed to the tragedy of commons. Multiple users compete for the same resource,  and as a result, there is unregulated use of the resources. It is up to the protectors of the resources to come up with institutions in order to manage them. However, such institutional arrangements either do not exist, or they are simply non-functional. Therefore, there is a need to empower self-government institutions to manage their resources, and at the same time, the community members should also be equipped with necessary knowledge that allows them to enhance their capacities.

The aforementioned examples illustrate that policies related to forests and tribal rights have never  really been concrete. A policy cannot be expected to be progressive just by including terms like  climate change or rights of forest communities; it is not more than a hollow document in that case. There is a need to view the local communities as the actual right holders, not just stakeholders. The  colonial conception that a forest belongs to the forest department or country needs to be done away  with, and a concrete National Forest Policy is required that is relevant.

*Read more: [Big Pharma has reinforced its saviour image](https://spontaneousorder.in/big-pharma-has-reinforced-its-saviour-image/)*

* * *

**About Nilesh Goswami**

Nilesh is an English Literature student at Hansraj College, University of Delhi. He enjoys writing about anything that is even remotely related to pop culture. He is currently navigating through the complex ecosystem of public policy, and has a keen interest in educational, environmental, and foreign policies.

## Big Pharma has reinforced its saviour image

Original: https://www.spontaneousorder.in/p/big-pharma-has-reinforced-its-saviour-image

Author: Spontaneous Order

Published: 2021-07-12T15:20:41.000Z

Topics: pharma-industry, intellectual-property, r-and-d-funding, covid-vaccines

> Arguably, the most-hated industry in the world is the pharmaceutical industry. Since dying people will pay anything, the normal price resistance of consumers disappears. So, profit margins for new patented drugs can be humongous. When anti-AIDS drug coc..

**Summary:**

Swaminathan S.A. Aiyar defends the pharmaceutical industry as a historical savior despite its notoriety for humongous profits on patented drugs, arguing that these incentives are essential for R&D that has doubled life expectancy and cured incurable diseases. He cites the anti-AIDS drugs, where US firms charged $15,000/year initially, offered 'at cost' $1,500 to poor countries, but Indian firm Cipla undercut at $800, driving prices to $200 by 2010 amid patent disputes. COVID vaccines exemplify pharma's miracle: developed in under a year versus expected five years, with Pfizer/Moderna following protocols, AstraZeneca/Oxford at $3-4/dose for poor nations, storable in ordinary refrigerators. The author critiques the flawed international patent system but insists profit-motivated private R&D outperforms public efforts, as Soviet bloc failed to innovate despite free healthcare. Governments should fund basic research, guarantee purchases for tropical diseases with price caps, and support clinical trials rather than relying on price controls or nationalizing R&D. COVID underscores harnessing pharma's skills to reduce super-profits' odium while advancing public health as a public good.

**Key points:**

- Pharmaceutical companies' profit incentives have driven life-saving innovations like anti-AIDS drugs (prices fell from $15,000 to $200) and rapid COVID vaccines.
- International patent system enables high R&D recovery but is flawed; private profit-motivated research vastly outperforms public sector efforts like the Soviet Union's.
- Governments should provide R&D funding, purchase guarantees with price caps for diseases like tropical ones, instead of just price controls.
- AstraZeneca/Oxford COVID vaccine at $3-4/dose suits poor countries, highlighting accessible innovation potential.

**By Swaminathan SA Aiyer**

* * *

Arguably, the most-hated industry in the world is the pharmaceutical industry. Since dying people will pay anything, the normal price resistance of consumers disappears. So, profit margins for new patented drugs can be humongous.

When anti-AIDS drug cocktails were invented in the 1990s, US drug companies charged a whopping $15,000 per year. This created an uproar. To mollify critics, major US companies offered the drug “at cost” to poor countries — just $1,500, they said.

But Cipla, an Indian company, was already exporting the drugs at just $800. Cipla was lambasted by US companies as a “pirate” violating patents.

Cipla retorted that the US companies were the real robbers and pirates. US President Bill Clinton ultimately sided with the activists.

Production shifted massively to countries like India, and prices kept falling. By 2010, the cost was just $200. No wonder activists denounced US drug companies as killers. Yet, ironically, these very companies had created the cures and saved millions.

The hated drug industry has just performed a miracle, producing several different vaccines against Covid in a few months. It had proved impossible to develop any vaccine at all for several viruses, including AIDS. When Covid struck, sober specialists noted that new vaccines took at least five years to be created, tested and approved. Bill Gates said we would be lucky to get an anti-Covid vaccine in 18 months. Yet in less than a year, vaccines galore have emerged. Russia and China were among the first to create and approve their own vaccines. Western experts cautioned that these countries had not followed all the usual safety protocols. However, it can make sense to shorten test procedures to expedite a vaccine that could save millions of lives.

Pfizer and Moderna in the US have produced vaccines following the usual protocols and are ready for mass vaccination. AstraZeneca and Oxford University have developed a different vaccine which — at the insistence of Oxford University — will be sold at just $3-4 per dose in poor countries. This vaccine can be stored at 2 to 7 degrees Celsius in ordinary refrigerators, making it suitable for poor countries like India lacking the super-cooling facilities required by the Pfizer and Moderna vaccines.

Maybe half the population of most countries will be vaccinated by late 2021, slashing further transmission of Covid. Gradually, people will resume travel, office meetings, social gatherings and tourism.

What lessons flow from this? First, the pharma industry is a saviour, not a killer. The international patent system is seriously flawed. To make up for huge R&D losses on drugs that fail tests, companies make enormous profits on the few that work. This can sound odious. But remember, the drug companies are the saviours that have doubled life expectancy in the last century, curing dozens of diseases once incurable, relieving the world of immense misery and death.

People have shown that they will happily give up their entire life savings for another year or two of life. By that standard, the life-extending services of drug companies make them among the greatest saviours in history.

What the Covid example shows is that government guarantees can make a huge difference. R&D is expensive. If governments are serious about health, they should offer significant funding for basic research, research on diseases of specific local interest, and for clinical trials.

For tackling tropical diseases, developing countries as well as aid consortia and institutions like the World Bank should guarantee to buy a large quantity of promising drugs even before expensive testing begins. This can be linked to price caps for drugs that clear testing.

In theory, all medical R&D could be done by governments and offered patent-free to all. However, the historical experience in this has been dismal.

The Soviet Union and its Red Empire stretching across Eastern Europe and Cuba boasted of good and free healthcare but failed to produce significant new drugs. Virtually all the hundreds of new medicines that saved millions of lives were created by profit-motivated R&D by drug companies. The social motivation of public sector research proved insufficient.

Drug companies have been found guilty of many sins: of cartelisation to raise prices or diminish competition; of fudging clinical trials; of promoting unsuitable or even bogus drugs; of bribing doctors to promote their particular medicines; of encouraging addictive opioids; and of enormous profits on some drugs. Yet the very same sinners have saved millions of lives through R&D. We must harness their skills while reducing the odium of super-profits on a few drugs.

Covid shows that we need new systems of government support for medical research. Public health is a public good that governments have a duty to improve. This does not mean just price controls and hospital subsidies but guarantees and funding for relevant R&D on diseases.

*This article was originally published in [The Times of India](https://timesofindia.indiatimes.com/blogs/Swaminomics/big-pharma-has-reinforced-its-saviour-image/) on 2 January 2021*.

*Read more: [Fabricated Poverty](https://spontaneousorder.in/fabricated-poverty/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Fabricated Poverty

Original: https://www.spontaneousorder.in/p/fabricated-poverty

Author: Spontaneous Order

Published: 2021-07-09T12:53:49.000Z

Topics: freight-equalisation, industrial-policy, resource-curse, policy-decentralization

> The Freight Equalisation Policy was meant to be a harbinger of uniform industrial growth across a newly independent India. After years of deindustrialization and economic exploitation by the British, it sought to create uniform industrialization across ..

**Summary:**

The Freight Equalisation Policy, implemented in 1952 to promote uniform industrial growth by subsidizing transport costs for key raw materials like coal, steel, iron, and cement, instead undermined the comparative advantages of resource-rich Eastern states such as West Bengal and Bihar. In 1950, these states produced 92% of India's iron and steel and 48% of engineering-related manufacturing output due to proximity to mines. By equalizing freight nationwide without a sunset clause, the policy removed incentives for factories to locate near resources, leading to industrial concentration near markets and ports in Maharashtra, Gujarat, Punjab, and Tamil Nadu. Eastern states effectively subsidized richer regions, fostering a 'resource curse' with persistent poverty, corruption, and underdevelopment. Bihar's GDP per capita stands at $640 (33% of national $1,890 in 2019-20), with 63% literacy; Jharkhand at 66%; West Bengal ranks 24th out of 33 states. Scrapped in 1993, its agglomeration effects endure, as noted in critiques linking it to Naxalism. From a classical-liberal view, well-intentioned centralized intervention distorted markets; uniform development would have fared better without it. Future policy should prioritize decentralization, stakeholder representation, and rigorous effectiveness checks.

**Key points:**

- Freight Equalisation Policy (1952-1993) subsidized raw material transport nationwide, eroding Eastern states' locational advantages and concentrating industry in Western and Southern states.
- Resource-rich Bihar and West Bengal, once industrial leaders (92% iron/steel in 1950), now suffer resource curse with Bihar's GDP per capita at 33% of national average and lowest literacy rates.
- Lack of sunset clause and poor monitoring prolonged distortions, with effects persisting post-1993 repeal due to agglomeration externalities.
- Centralized bureaucratic interventions fail complex markets; advocate decentralized policymaking with stakeholder input and regular effectiveness audits.

**By Revant Khullar**

* * *

[The Freight Equalisation Policy](https://www.elibrary.imf.org/view/journals/024/1958/001/article-A002-en.xml) was meant to be a harbinger of uniform industrial growth across a newly independent India. After years of deindustrialization and economic exploitation by the British, it sought to create uniform industrialization across the map. 

Freight Equalisation means that transportation charges would be leveled across the country through subsidies, for key raw materials such as coal, steel, iron, and cement in the case of India’s scheme that came into effect in 1952. In the [First & Second Five Year plans](https://www.elibrary.imf.org/view/journals/024/1958/001/article-A002-en.xml#:~:text=Abstract-,INDIA'S%20FIRST%20FIVE%20YEAR%20PLAN%20covered%20the%20period%20from%20April,capita%20income%20in%2025%20years.), the uneven distribution of raw materials and production houses is cited as the reason for the desire for such a policy.

Entrepreneurs could set up their factory without keeping in mind the location of the raw materials, the freight for which was partially or wholly subsidized by the scheme. Rather than ensuring that factories were set up uniformly across the country, it led to the concentration of factories near major markets and ports while the resource-rich Eastern states saw a rampant economic decline as a long-term result of this policy. 

The policy played a stark role in shaping present-day India’s industrial landscape. The government sought to incentivize industries to develop across the country evenly through this scheme once it came into effect. The resource-rich Eastern states housed most of the mines for the raw materials covered by the scheme and housed most of the extractive as well as processing industries for the same at the time. 

In 1950, West Bengal and Bihar accounted for [92 percent](http://barrett.dyson.cornell.edu/NEUDC/paper_316.pdf) of all iron and steel production in India and 48 percent of all manufacturing output in engineering-related industries. This can be attributed to a natural advantage due to the presence of rich iron ore and coal mines across the region.

Freight Equalisation, in effect, took away the comparative advantage of proximity to resources and reduced the economic incentive for entrepreneurs and industrialists to set up their factories in these states. Raw material processing units taking advantage of the scheme became concentrated near major markets in more affluent states such as Maharashtra, Gujarat, and Punjab. Units in South Indian states such as Tamil Nadu were being set up citing the advantage of being in close proximity to a number of ports. 

It could be said that a cross-subsidy was paid by the poorer Eastern states to the Western and Southern states as a result of the policy. A form of implicit tax was paid by producers and consumers in the East as there was no incentive to manufacture in their states.

The lack of a sunset clause in the policy meant that there was no set time period for the subsidies. The Western and Southern states that benefited from the policy saw manufacturing agglomeration in their states. Once raw material processing units were established, it made sense for other manufacturers and service businesses built from allied industries to set up shop there too. This agglomeration externality was great enough that even after the policy was scrapped in 1993, it didn’t drive back these industries to the east. 

There was a lack of quality data on the effects of Freight Equalisation: in 1977 an [inter-ministerial report](https://dspace.gipe.ac.in/xmlui/bitstream/handle/10973/51877/GIPE-172848.pdf?sequence=1) stated that the scheme could not have had an effect on the geography of production. A deeper analysis, coupled with routine checks on the effectiveness of the scheme would have yielded a more accurate and very different picture, leading to an earlier repeal of the policy. 

The effects of the policy echo to date, leaving a deeply negative footprint on the economic landscape of the eastern states. Present-day Bihar and Jharkhand have become synonymous with a situation typically associated with Sub Saharan Africa, known as a [resource curse](https://www.thehagueinstituteforglobaljustice.org/wp-content/uploads/2015/10/PB4-Escaping-Resource-Curse-Sub-Saharan-Africa.pdf). An abundance of valuable raw materials coupled with a lack of economic development has fostered poverty, corruption, and illiteracy. 

Bihar has the lowest [GDP per capita in India](http://mospi.nic.in/sites/default/files/press_releases_statements/State_wise_SDP_15_03_2021.xls), at about a mere 33% of the national figure to date, at about $640 nominal per capita against a national average of $1,890 in the 2019-20 financial year with a large chunk of the population living below the poverty line. [Stuart Corbridge](https://casi.sas.upenn.edu/iit/scorbridge) of the Center for Advanced Study of India in the University of Pennsylvania refers to Jharkhand as an internal colony, which under Freight Equalisation (then part of Bihar) saw nationalization of mines and establishment of PSUs, where politicians seek to seize geological rents and enforce order through violence. Corbridge also sees Naxalism as an indirect effect of the habitat created by the conditions following Freight Equalisation in the state. The state of Jharkhand has repeatedly ranked among the lowest GDP per capita in the country, often among the last three. 

Looking at the national statistics on the Below Poverty Line population, Bihar and Jharkhand have the highest percentage while Odisha, Chattisgarh, and Madhya Pradesh too rank far below the national average repeatedly. West Bengal, which until the 1960s ranked among the richest states in India, has fallen to well below average, ranking at [24 out of 33 states](https://statisticstimes.com/economy/india/indian-states-gdp-per-capita.php) in the 2019-20 financial year. 

Bihar and Jharkhand have the lowest literacy rates at about 63% and 66% respectively, the states of Chhattisgarh and Madhya Pradesh rank well below the national average, [referring to the 2011 Census.](https://censusindia.gov.in/2011-prov-results/data_files/india/Final_PPT_2011_chapter6.pdf) 

The above statistics reaffirm the unintended yet ghastly effects of the scheme in a region of India that is still lagging far behind the rest of the states.

Centralized bureaucratic intervention, although well-intentioned, in the complex mechanism of freight prices led to the most resource-rich regions of India ending up the most rupee poor. The goal of more uniform industrial development, albeit noble, could have potentially been more so achieved with no government intervention at all.

Moving forward, we must focus on a decentralized approach to policymaking that has a better representation of stakeholders that may be affected by its implementation coupled with stringent, measurable, and regular checks on its effectiveness once implemented.

*Read more: [The new Zoom economy: Who can adjust to it and who cannot?](https://spontaneousorder.in/the-new-zoom-economy-who-can-adjust-to-it-and-who-cannot/)*

* * *

**About Revant Khullar**

Revant is a Sales Director at Pelican Ceramic Industries and Terra Infra Projects living in New Delhi. He completed his Bachelors in Science from Babson College with a concentration in Technology, Entrepreneurship, & Design. He has a keen interest in agriculture, political science, and economics.

## The new Zoom economy: Who can adjust to it and who cannot?

Original: https://www.spontaneousorder.in/p/the-new-zoom-economy-who-can-adjust-to-it-and-who-cannot

Author: Spontaneous Order

Published: 2021-07-07T13:06:33.000Z

Topics: remote-work, pandemic-economy, labour-markets, income-inequality

> Most people with the option of working from home have been relatively safe from the economic storms that have engulfed the world since the pandemic struck in early 2020. The others whose jobs require them to be at their workplace, or in close contact wi..

**Summary:**

The pandemic has exposed stark divides in the 'Zoom economy,' where workers able to shift to remote work—primarily in advanced economies and high-skill sectors—have been shielded from job losses and health risks, while those in essential, contact-intensive roles, especially in emerging markets like India, have suffered disproportionately. Globally, only 17.4% of the 3.2 billion workforce (557 million) worked from home in Q2 2020, with under 10% of urban jobs in developing countries amenable to it, compared to 40% in places like the US and Germany. In India, 7.35 million jobs were lost in April 2021 amid the second wave. IMF analysis ranks sectors by telework feasibility: IT, finance, and professions lead, while construction, retail, transport, and food services—major Indian employers after agriculture—lag, hitting low-income workers hardest due to their concentration in non-teleworkable jobs and lack of savings. The author highlights a U-curve resilience in Indian regional economies based on agriculture or high-end services. Consumer shifts toward online buying, especially household items in India, pose questions about labor reallocation, such as chefs versus waiters or gig delivery growth. While some trends may reverse post-pandemic, persistent effects warrant government attention to structural labor market adaptations from a classical-liberal lens emphasizing economic flexibility over intervention.

**Key points:**

- Only 17.4% of the global workforce could work from home in Q2 2020, far lower in developing countries where under 10% of urban jobs allow it.
- High-income sectors like IT and finance are most telework-compatible, leaving low-income workers in retail, construction, and food services most vulnerable.
- India lost 7.35 million jobs in April 2021, with agriculture and high-end services showing relative lockdown resilience in a U-curve pattern.
- Pandemic-driven online consumption shifts raise questions about labor reallocation, such as favoring chefs over waiters or boosting delivery gigs.
- Governments must consider long-term structural changes in work and consumption patterns.

**By Niranjan Rajadhyaksha**

* * *

Most people with the option of working from home have been relatively safe from the economic storms that have engulfed the world since the pandemic struck in early 2020. The others whose jobs require them to be at their workplace, or in close contact with customers, have had a far tougher time on average. They are far more likely to have lost livelihoods or faced pay cuts. And those who have been at their workplaces have faced greater health risks than those who have been able to plug into the *Zoom economy*.

The nature of work—and especially the ability to flexibly work from home— can provide additional insights into who has borne an oversized portion of the overall pain in the labour market the world over. Of course, there are the mandatory exceptions—of people losing income in sectors that can shift online and vice versa. Meanwhile, the *Centre for Monitoring Indian Economy* said this week that 7.35 million Indians lost jobs in April, as the virus re-emerged to wreak havoc on the health system.

Three economists from the *International Labour Organisation* have recently estimated that around 557 million employees worked from home in the second quarter of 2020, or 17.4% of the total global labour force of 3.2 billion. Sergei Soares, Florence Bonnet and Janine Berg used household and labour force surveys in 31 countries to arrive at these estimates. There are some important nuances to the broad conclusion that less than a fifth of the total global workforce can work from home.

A lot depends on the nature of work in an economy—and thus its main structural features. Several studies show that workers in advanced economies are in a better position to work from home than those in emerging economies such as India. The specific estimates may sometimes vary. In advanced economies such as the US, Germany and Singapore, 40% of workers can do their work from home.

Economists Charles Gottlieb, Jan Grobovšek, Markus Poschke and Fernando Saltiel estimate in a recent paper that less than a tenth of urban jobs in developing countries can be done from home. This is a large difference and perhaps explains why the economic impact of lockdowns is perhaps higher in emerging-market economies than in developed ones. It may make sense to think about Indian regional economies in a similar manner, with those based on either agriculture or high-end services relatively resilient to lockdowns, in a U-curve relationship.

Such inequality of outcomes is also observed within countries, as our own experience over the past year shows. The *International Monetary Fund* (IMF) has used data from several countries, as well as an April 2020 paper by Jonathan Dingle and Brent Neiman for the *National Bureau of Economic Research*, to estimate which sectors are more amenable to teleworking. The results are not very surprising.

The list, in descending order, reads as follows: information technology, finance, professions such as law, education, public administration, health, manufacturing, retailing, support services, transportation, construction, accommodation and food. This is broadly in line with what most people would expect. In India, construction and retailing are the biggest employers after agriculture.

What the IMF then highlights is more interesting. The sectors that are the most likely to transition to working from home are also those with higher average earnings. “Workers at the bottom of the income distribution are already disproportionately concentrated in the hardest-hit sectors like food and accommodation services, which are among those sectors least amenable to teleworking. Low-income workers are also more likely to live hand-to-mouth and have little financial buffers like savings and access to credit,” write IMF economists Mariya Brussevich, Era Dabla-Norris, and Salma Khalid, in a July 2020 blog.

Hopefully, at least some of these trends will reverse once life comes back to normal in the coming years. But will there also be more persistent effects of the pandemic? Let us for a moment switch attention from the labour market to the consumer market. The London-based *Financial Times* recently cited a study by consulting firm *McKinsey* on the change in consumers intending to buy online compared to their behaviour before the pandemic. India is one of the nine countries where consumers were surveyed. There is a big online shift in India, especially in the purchase of household items, though it remains to be seen how much of this shift sustains in the years ahead.

Here is a thought experiment: Suppose there is a large shift away from eating in restaurants to ordering food home. Would it mean that chefs are more secure than waiters? And will it mean that even more gig jobs will be created in delivery services? How will the labour be reallocated? Similar questions can be asked about many other sectors as well.

The pandemic has altered the way we work and consume, at least for now. The impact has been skewed, with some forms of work doing better than others. The impact over the long term is not clear at this juncture, but this is an issue that governments need to be thinking about.

*This article was originally published in [Livemint](https://www.livemint.com/opinion/columns/the-new-zoom-economy-who-can-adjust-to-it-and-who-cannot-11620153630824.html) on 5 May 2021.*

*Read more: [The Complexities of School Complex Governance](https://spontaneousorder.in/the-complexities-of-school-complex-governance/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## The Complexities of School Complex Governance

Original: https://www.spontaneousorder.in/p/the-complexities-of-school-complex-governance

Author: Spontaneous Order

Published: 2021-07-05T12:11:25.000Z

Topics: national-education-policy, school-complexes, education-governance, implementation-challenges

> In 1986, India drafted the National Education Policy with the aim of improving education in the country. They decided to do this by increasing the number of schools and the number of teachers who join the system. The other big goal of that policy was to..

**Summary:**

The National Education Policy (NEP) 2020, building on 1986's focus on expanding schools and literacy and the 2015 Kasturirangan committee's recommendations, introduces school complexes as clusters of one secondary school, other schools, and Anganwadis within 5-10 km, governed by a School Complex Management Committee (SCMC) including school heads, teachers, community members, students, and parents. The secondary school principal heads the complex, controlling resource allocation, finances, and administration. While aiming to optimize resources, this centralized governance is ambiguous and problematic, per the author. Key concerns include: inadequate upskilling for principals already overburdened managing single schools; risks of power concentration leading to imbalanced decisions without full contextual knowledge; historical failures of similar 'educational complexes' proposed in 1986 NEP, unfulfilled after 35 years; and challenges adapting to NEP's broader infrastructural shifts without capacity building. From a classical-liberal lens, the policy promises holistic, world-class education but falters on decentralized, efficient implementation, leaving governance uninspired and prone to inefficiency. NEP appears ambitious yet lacks detailed strategies for school complexes, assessments, and regional languages.

**Key points:**

- School complexes cluster nearby schools under centralized control of the secondary school's principal for resource allocation and administration.
- Centralized power risks imbalanced financing and unequal attention across schools due to principals' limited context and overburden.
- Principals require upskilling to manage multiple schools, as they already struggle with single-school strategic leadership amid administrative burdens.
- Similar educational complexes mandated in 1986 NEP have failed to function effectively in urban and rural India over 35 years.
- NEP 2020 lacks clear implementation plans for building capacity in school complex governance amid broader policy changes.

**By Arushi Sharma**

* * *

In 1986, India drafted the [National Education Policy](https://www.education.gov.in/sites/upload_files/mhrd/files/upload_document/npe.pdf) with the aim of improving education in the country. They decided to do this by increasing the number of schools and the number of teachers who join the system. The other big goal of that policy was to reduce gaps in education by focussing on basic literacy and numeracy. In 2015, a [committee headed by K Kasturirangan](https://timesofindia.indiatimes.com/home/education/news/ex-isro-chief-k-kasturirangan-to-head-drafting-committee-of-national-education-policy/articleshow/59321875.cms) came together to draft a new NEP of which the aim now had shifted to transform India’s education system. 

In June of 2020, the [National Education Policy](https://www.education.gov.in/sites/upload_files/mhrd/files/NEP_Final_English_0.pdf) was released and one may really say that the entire education system and people came together to break it down, analyse it and critique every line of it. Opinions, thoughts and questions were raised towards this draft. Most of these changes are welcome but the question still stands – Is the system designed to accommodate this new idea of world-class education?

The NEP covers everything that is needed to be thought about while we seek to create holistic education for a child. It talks about the role of the teachers, the governance of the state and district, the infrastructure of the school, the management of the School Management Committee (SMC) and the decision making authorities in the school.

It talks about methods of using the schools more optimally by clustering schools and creating school complexes. If one reads the NEP, the word school complexes will come up multiple times but it’s chapter 7 that talks in detail about the structure and governance of school complexes. 

**What are School Complexes?** 

It’s a cluster of schools comprising 1 secondary school, other schools and *Aaganwadis* within a radius of 5-10 km. These would be governed and managed by the School Complex Management Committee (SCMC) consisting of school heads, selected teachers, members of the community, students and parents. 

While the purpose of using the current schools optimally is a great strategy, the governance of these complexes is ambiguous and centralised in nature. ‘School will be organised into school complexes which will be the basic unit of governance and administration.’ The principal of the secondary school will be the head of the whole school complex and take decisions for all the schools under the complex with regard to resource allocation, finances and accounting. What makes all of this ambiguous is the lack of clarity, raising some key questions:

1.  How will the principals/ heads be upskilled and trained to manage multiple schools? The current scenario with schools has shown multiple times that principals struggle with managing one school strategically. This has multiple reasons ranging from overburdening principals with administrative tasks to lack of motivation in the principals. With more schools, the efficiency and the quality of the work will further diminish resulting in unequal attention to all schools in the complex.
    
2.  What will be the role that power will play when it is concentrated in the hands of a top few?  Power plays a very important role in seeing actions take place effectively and equitably. With power being centralised towards one school’s principal, resource allocation, competition and financing may become extremely imbalanced. If a principal for one school is taking decisions for all the schools in the complex, these might not serve the same benefits for everyone as it’s not possible for the principal to have complete context of all the schools. 
    
3.  Under the New Policy of Education (1986), at least one Educational Complex may be established in every district during the Eighth Five Year Plan, so as to develop a functional model” – An educational complex was intended to be established for the same reasons as the current School Complex proposition. Hence this idea of school governance has been in implementation for more than 35 years and has not completely been functional in urban and rural India. What is currently making us believe that with the new NEP the implementation is going to be stronger? 
    
4.  And finally, as the infrastructural compositions of schools change, principals/heads of schools also need to get accustomed to the other big changes, as mentioned above, that come with the implementation of the NEP. Even bringing one small shift into the school system requires training and developing teachers, informing and investing stakeholders and making time for long-term strategic planning. 
    

While the structure of school complexes in its essence works towards problem-solving the poor resource allocation in the different schools of a region, it tragically doesn’t lay down how will these big changes in power and increase in roles and responsibilities work towards building capacity and efficiency in schools, their governance and in the school complex system overall. 

On the surface, the NEP comes up as one of the most ambitious policies to be taken up by any government and promises a lot. It is bold and far-fetched in theory and comes forward to not shy away from change. But when one dives deep, this policy falls short of clearly laying out well-thought-out strategies and plans for its implementation – of assessments, regional languages or even School Complexes and hence leaves its observers and implementers uninspired and conflicted.

*Read more: [COVID-19 or Police: What strikes greater fear in women street vendors?](https://spontaneousorder.in/covid-19-or-police-what-strikes-greater-fear-in-women-street-vendors/)*

* * *

**About Arushi Sharma**

Aarushi has worked in the education sector for just over five years now starting her journey as a Teach for India fellow in 2016. She is a strong advocate for equality in holistic education in all sects of society. She wishes to work closely with policy implementation over the coming years.

## COVID-19 or Police: What strikes greater fear in women street vendors?

Original: https://www.spontaneousorder.in/p/covid-19-or-police-what-strikes-greater-fear-in-women-street-vendors

Author: Spontaneous Order

Published: 2021-07-02T15:13:27.000Z

Topics: street-vendors, police-harassment, covid-lockdowns, police-accountability

> Chinta Devi, a vendor selling Tobacco products, “could not earn throughout” the early days of the lockdown in 2020. The only means of survival, she added, “after all our savings ran out was to cut down our consumption of food.” Most Indian laws th

**Summary:**

Street vendors in India, particularly women, endured severe hardships during COVID-19 lockdowns, with police harassment instilling greater fear than the virus itself, as one vendor stated: 'COVID se zyada toh vardi walon se dar lagta hai.' Chinta Devi, a tobacco vendor, survived early 2020 lockdowns by cutting food consumption after savings depleted. A Madhya Pradesh study found shopkeepers and vendors as the second-largest 'offenders,' facing goods confiscations. India's response relied on broad executive powers under the Disaster Management Act 2005, Epidemic Diseases Act 1897, and CrPC Section 144, enabling vague, disproportionate measures like curfews and quarantines, often exceeding orders via bribes and extra restrictions. Despite WHO and NDMA calls for balancing health protection with minimizing economic disruption, respecting rights, and adopting a 'humane approach,' police harassed compliant vendors, overturned carts, and used violence, especially against women vulnerable to livelihood loss and sexual harassment. Centre for Civil Society interviews with over 40 women in Delhi and Rajasthan confirmed seizures under COVID pretexts. While PM SVANidhi offers Rs 10,000 working capital loans, unaddressed police excesses under the Street Vendors Act 2014 undermine livelihoods, demanding accountability to protect citizens from a defaulting state.

**Key points:**

- Women street vendors fear police harassment more than COVID-19, reporting goods seizures, bribes, and extra restrictions beyond official orders.
- Lockdowns under broad laws like DMA 2005 and EDA 1897 caused significant livelihood losses, with vendors cutting food consumption to survive.
- NDMA urged a 'humane approach' with compassion, but police actions including violence and cart overturns violated this spirit.
- PM SVANidhi scheme provides Rs 10,000 loans to address capital shortages, but fails to curb ongoing police harassment.
- Street Vendors Act 2014 and pandemic orders lack mechanisms to hold authorities accountable for excesses.

**By Jayana Bedi**

* * *

*Chinta Devi*, a vendor selling Tobacco products, “could not earn throughout” the early days of the lockdown in 2020. The only means of survival, she added, “*after all our savings ran out was to cut down our consumption of food*.” Most Indian laws that regulate economic activity protect us from a defaulting buyer and a defaulting seller.

But how do they protect us from a defaulting State, especially one that has failed to protect its citizens? 

In the past year, street vendors in India have been subject to unjust criminalisation, harassment, and loss of livelihood. Shopkeepers and street vendors, as per a [Criminal Justice & Police Accountability 2021](https://www.thakur-foundation.org/upload/grant_applicants_outcome/1598765446_Final%20-%20Mapping%20Pandemic%20Policing.pdf) study in Madhya Pradesh, were the second-largest “offenders” in the state. Several vendors had their goods, carts, or two-wheelers confiscated by the police. [Lockdowns](https://www.wiego.org/sites/default/files/publications/file/WIEGO_FactSheet_Delhi_for%20Web.pdf) also cost many vendors a significant portion of their earnings. Already living precarious socio-economic lives, women street vendors were severely struck by these restrictions.

India’s pandemic response is based on three legislations: Disaster Management Act, 2005 (DMA), the Epidemic Diseases Act, 1897 (EDA), and the Code of Criminal Procedure, 1974 (Section 144). All three legislations give the executive, broad and extraordinary powers to tackle a crisis through government orders. These took the form of excessive measures such as [mandatory quarantines, prohibitions on movement](https://thewire.in/law/can-an-1897-law-empower-the-modern-indian-state-to-do-whats-needed-to-fight-an-epidemic), an app [for tracking location and movement](https://scroll.in/latest/961736/covid-19-order-on-mandatory-use-of-aarogya-setu-app-is-utterly-illegal-says-former-sc-judge), and [curfews](https://thewire.in/law/is-the-national-lockdown-in-india-constitutionally-valid). Some of these orders have been categorised as [“vague, overboard and disproportionate”](https://www.thakur-foundation.org/upload/grant_applicants_outcome/1598765446_Final%20-%20Mapping%20Pandemic%20Policing.pdf).

These measures seem reasonable when we consider how the World Health Organisation’s Director-General urged all countries to “take urgent and aggressive action”. What we missed, however, is the following part in his [speech](https://www.who.int/director-general/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19---11-march-2020): “Countries must strike a fine balance between protecting health, **minimizing economic and social disruption**, and respecting human rights”.

In fact, closer home in India, the National Disaster Management Authority (NDMA) also recognised this in its [March 2020](https://cglabour.nic.in//MHA/4_NDMA.pdf) order:

“Adopt a **humane approach** in dealing with the public, particularly those who are left adrift by the lockdown. Enforcement of the laid down restrictions must be **tempered with compassion** and a sense of duty of care for our citizens.”

A simple scan of the news reveals the police and civic authorities did not quite embody this spirit. The police repeatedly [harassed people](https://www.thequint.com/news/india/police-harassing-citizens-delivery-agents-amid-covid-19-lockdown?#read-more#read-more), including ones who are complying with the executive orders. They have not been any easier on street vendors.

Some instances from across the country include [physical violence on women street vendors](https://scroll.in/video/959616/watch-police-overturn-vegetable-cart-in-mumbai-containment-zone-scuffle-ensues-as-vendor-hits-back), [overturning hawker carts](https://www.ndtv.com/india-news/varanasi-cop-suspended-after-video-of-him-damaging-maize-goes-viral-2277555), [retaliation against vendors who do not pay bribes](https://www.india.com/viral/after-12-year-old-egg-vendor-refuses-to-pay-rs-100-bribe-indore-civic-body-officials-topple-his-cart-watch-4093361/). Other [studies](https://cjp.org.in/women-street-vendors-face-high-loss-of-livelihood-sexual-harassment-during-lockdown-finds-survey/) reveal that women vendors are particularly vulnerable during the lockdown. Added to the challenges of loss of income, is the threat of sexual harassment. 

To probe further, the *Centre for Civil Society* spoke to over 40 women street vendors across Delhi and Rajasthan. Women reported that their goods were often seized under the garb of violating COVID-19 protocols and released only after ‘paying off’ the police officials. In several instances, police officials imposed restrictions in addition to the ones mentioned in government orders. Even when the lockdown was eased, ‘business-as-usual for vendors was fraught with harassment. 

Our conversations with women vendors made it clear that there are two major obstacles that stand in their way of resuming their livelihoods.

First, several vendors do not have the capital needed to sell their goods due to the loss of income incurred during the pandemic. In June last year, the *Ministry of Housing and Urban Affairs* recognised this and launched the [PM SVANidhi loan scheme](https://pmsvanidhi.mohua.gov.in/). Under this scheme, vendors can avail of a working capital loan of Rs. 10,000. While there are several challenges with the implementation of the scheme, it is positive to see the government take this initiative.

The second obstacle lies entirely undealt with—police harassment of compliant vendors. This stark reality is captured by what one woman street vendor said—“*COVID se zyada toh vardi walon se dar lagta hai*” \[*We fear police officials more than the COVID-19 virus*\].

Unfortunately, the orders passed during COVID-19 and the [Street Vendors Act 2014](https://legislative.gov.in/sites/default/files/A2014-7.pdf) fail to hold public authorities accountable for their actions.

NDMA has nudged the authorities to act with ‘compassion’ and adopt a ‘humane approach’. But what happens when police officials do not do that? Without any repercussions or penalties, it is difficult to bring these excesses under control and protect livelihoods.

As *Ranu Salvi*, a woman vendor from Rajasthan rightly stated, “*If the government can’t help us monetarily, allow us to work and look out for ourselves. Don’t take away both.*”

*Read more: [The Learning Crisis Starts Early](https://spontaneousorder.in/the-learning-crisis-starts-early/)*

* * *

**About Jayana Bedi**

Jayana Bedi is a Researcher at the Centre for Civil Society. She pursued her bachelors in Sociology from Miranda House, Delhi University. Jayana has been working on the issue of vendor livelihoods for the past three years.

## The Learning Crisis Starts Early

Original: https://www.spontaneousorder.in/p/the-learning-crisis-starts-early

Author: Spontaneous Order

Published: 2021-06-30T16:33:16.000Z

Topics: foundational-literacy, nep-2020, learning-outcomes, education-reform

> India’s learning crisis has reached staggering levels, with pandemic induced school closures expected to have far-reaching consequences on schooling. However, with the gross enrollment ratio for students at elementary level (grades I-VIII) reaching 97%,

**Summary:**

India's learning crisis begins early, with 97% gross enrollment in grades I-VIII but only half of grade 5 students able to read grade 2 texts and 22.7% in government schools able to do division, signaling a foundational literacy and numeracy (FLN) deficit across public and private schools. This gap, affecting nearly 5 crore children and with 43% under five at risk of not reaching developmental potential, widens over time, leading to lost higher education, employment, and a workforce ill-equipped for 21st-century jobs amid skill shortages. The National Education Policy 2020 prioritizes universal FLN by grade 5 via a mission by 2025, emphasizing curriculum redesign, teacher training, and platforms like DIKSHA. From a classical-liberal viewpoint, success demands shifting from input-focused metrics like enrollment to outcome-based school assessments, decentralizing implementation to districts for flexible planning and budgets, reforming curricula and teacher incentives, and prioritizing remedial education. FLN underpins all future learning, employability, and GDP growth, requiring these market-oriented reforms to foster a skilled youth driving innovation.

**Key points:**

- India's 97% elementary enrollment masks a learning crisis where only half of grade 5 students read grade 2 texts and 22.7% in government schools perform division.
- NEP 2020 mandates universal foundational literacy and numeracy by 2025 through curriculum redesign, teacher training, and state roadmaps.
- Measure school performance on student learning outcomes rather than enrollment or infrastructure to prioritize results.
- Decentralize FLN implementation to districts for flexible budgets, local planning, teacher incentives, and remedial education focus.
- Universal FLN is essential for employability, better life outcomes, and economic growth via a skilled workforce.

**By Swati Rao**

* * *

India’s learning crisis has reached staggering levels, with pandemic induced school closures expected to have far-reaching consequences on schooling. However, with the [gross enrollment ratio](https://www.education.gov.in/sites/upload_files/mhrd/files/statistics-new/ESAG-2018.pdf) for students at elementary level (grades I-VIII) reaching 97%, access to education is not our primary concern anymore. The high percentage of students going to school does not necessarily suggest that all these students are actually learning.

If only [half of all students](http://img.asercentre.org/docs/ASER%202021/ASER%20TOT%202012-18/f-allindia.pdf) in grade 5 can read texts meant for grade 2 students and only [22.7% of all students](https://scroll.in/article/985869/indias-school-students-are-facing-a-learning-crisis-budget-2021-does-nothing-to-solve-that) in government schools in grade 5 are able to do division, India has a learning crisis on its hands. This learning deficit witnessed across both government and private schools highlights the dire state of *Foundational Literacy and Numeracy* (FLN) in India.

[

![](https://lh6.googleusercontent.com/-k994FOD52JZdflfUvU6eqasLi_2jD3Ti0To3TzZBTl1v59tZJ8XInRL8I9HGa7hYa9dxv0-6A5LRkZsjktDekCwmLfBsrj52kQsYDSZLgO_7UGyl-RAqgx4Ojtoh0DfB8NO8Iq5)



](https://lh6.googleusercontent.com/-k994FOD52JZdflfUvU6eqasLi_2jD3Ti0To3TzZBTl1v59tZJ8XInRL8I9HGa7hYa9dxv0-6A5LRkZsjktDekCwmLfBsrj52kQsYDSZLgO_7UGyl-RAqgx4Ojtoh0DfB8NO8Iq5)

###### *\*Source: ASER 2018: % children in primary school who can read at different levels*

FLN is commonly understood as the ability to read and comprehend basic text and the ability to carry out basic addition and subtraction with Indian numerals. To be able to learn, a student needs to be able to read first, whether in English, Hindi or their regional language. If a student is unable to attain expected literacy and numeracy skills at an early stage, progressing to higher grades will not amount to mastery of the higher grade-level curriculum. 

The potential impact of this learning lag is enormous. As these students progress to higher grades, the gap between their average learning levels and the standards of the curriculum will also expand. This gap continues expanding, resulting in the students eventually losing out on higher education and employment opportunities. Estimates suggest that nearly [5 crore children](https://www.indiatoday.in/education-today/featurephilia/story/-many-children-at-risk-of-not-reaching-their-developmental-potential-1751461-2020-12-20) have not learnt these critical skills yet and over 43 % of children under the age of five are at risk of not fulfilling their full developmental potential.

This has significant repercussions for the Indian economy as well. Low levels of conceptual know-how, creativity and critical thinking skills in the youth will result in a workforce that is [ill-equipped and underprepared](https://www.adb.org/sites/default/files/publication/159351/adbi-workforce-dev-india.pdf) for 21st century jobs. The growing shortage of skilled workers and knowledge workers in the Indian economy is a testament to the need for universal FLN.

Against this backdrop, the *[National Education Policy 2020](https://www.education.gov.in/sites/upload_files/mhrd/files/NEP_Final_English_0.pdf)* underlines the importance of universal FLN, with its aim of “ensuring every child in grade 5 and beyond has achieved foundational literacy and numeracy”.  Through the proposed Foundational Literacy and Numeracy Mission, India is expected to achieve universal FLN in primary schools by 2025. The mission would focus on redesigning the curriculum, conducting teacher training and facilitating community participation. NEP mandates state and UT governments to develop a roadmap for attaining universal foundational literacy and numeracy in all primary schools, identifying stage-wise targets and goals to be achieved by 2025. Government platforms like Digital Infrastructure for Knowledge Sharing (DIKSHA) will make available high-quality teaching and learning resources.  

While the NEP provides for a much needed push towards investing in early childhood education, its implementation will need to work in alignment with other government policies. Success of this mission will hinge on creating an ecosystem where learning triumphs schooling. Schools’ performance will need to be measured on learning outcomes of the students and not on enrolment rate or infrastructure. Experience with early grade teachers and teacher educators suggests that attaining universal FLN will require a significant shift in the organizational structure and associated incentive system. NEP also needs to further decentralise implementation of the FLN mission from the states to districts, making them the unit of administration with more flexibility in making plans and control over the budget. With a focus on reforming curricula and teacher recruitment, training and incentive-based performance plans, district-level officials can create roadmaps for improving learning outcomes. Given the enormous learning gap India is facing today, remedial education for those who have failed to attain FLN skills will also need to become a priority.  

FLN skills form the basis of all future learning, without which the benefits of education are lost. Foundational learning has been linked to increased employability, better later-life outcomes and as a result, higher GDP for the country. While NEP clearly articulates the goal of attaining universal FLN by 2025, the success of the mission will hinge on decentralization, curriculum reforms, teacher training and incentives, and prioritising remedial education. Acquisition of FLN skills at early grades is the only way to ensure that a new generation of educated and skilled youth can serve as driving forces for innovation and growth in India.

*Read more: [Recovering from the Covid-19 pandemic won’t be easy for Indian women](https://spontaneousorder.in/recovering-from-the-covid-19-pandemic-wont-be-easy-for-indian-women/)*

* * *

**About Swati Rao**

Swati Rao is Assistant Manager, Advocacy at Centre for Civil Society. Previously, she has worked for the US Department of State, Swaniti Initiative in India, and holds an Erasmus Mundus Masters in Public Policy and B.A. LL.B (Hons) from Hidayatullah National Law University, Raipur.

## Recovering from the Covid-19 pandemic won’t be easy for Indian women

Original: https://www.spontaneousorder.in/p/recovering-from-the-covid-19-pandemic-wont-be-easy-for-indian-women

Author: Spontaneous Order

Published: 2021-06-28T17:20:25.000Z

Topics: covid-19, women-employment, labor-force-participation, gender-inequality

> Amid the Covid-19 crisis, three out of four Indians are experiencing their first recession. As might be expected, women are bearing the brunt of the pain — and the consequences could be long-lasting. A tiny elite of urban, educated women has benefited..

**Summary:**

The COVID-19 pandemic has disproportionately harmed Indian women, exacerbating their already low labor force participation and threatening long-term economic independence, in a classical-liberal critique of systemic dependencies and unequal burdens. While a tiny urban elite of educated women saw a 7% rise in formal workforce participation via remote work (LinkedIn data, April-July 2020), most women in informal sectors suffered. Urban poor, like domestic workers in slums such as Dharavi, face impossible living conditions, leading wealthy employers to fire them rather than advocate reforms, pushing women into family dependency with diminished bargaining power. School closures and lockdowns intensified India's unequal household labor division, with women bearing childcare and chores; men's temporary help waned by August (Deshpande study). CMIE data shows women's LFPR at 11% (vs. 71% for men), unemployment at 17% (vs. 6%), with young women in their 20s dropping from 14.3% to 8.7% participation. Recovery favored men, who regained most lost jobs by November 2020, while women accounted for half of remaining losses. This slowdown, compounded by cultural family expectations, risks permanent workforce exit, declining household incomes, and greater reliance on strained families or state, derailing women's path to independence.

**Key points:**

- COVID-19 reduced women's labor force participation to 11% from already low levels, with young women in their 20s seeing a drop from 14.3% to 8.7% (CMIE data).
- Urban elites fired domestic workers, mostly women, instead of addressing slum conditions, worsening poverty and bargaining power.
- Lockdowns shifted household burdens onto women, as men's chore-sharing declined after initial uptick (Deshpande study).
- Job recovery was unequal: men regained most losses by November 2020, leaving women with half of persistent joblessness.

**By Shruti Rajagopalan**

* * *

Amid the Covid-19 crisis, three out of four Indians are experiencing their first recession. As might be expected, women are bearing the brunt of the pain — and the consequences could be long-lasting.  

A tiny elite of urban, educated women has benefited from the shift to remote work under lockdown: A recent study released by LinkedIn, based on internal data for India, found women’s participation in the labor force actually increased by 7% between April and July. But this only applies to jobs in the formal, white-collar, urban economy — a tiny fraction of the labor market. For most Indian women, the situation is deeply worrying.

[Covid-19](https://www.livemint.com/topic/coronavirus-vaccine-tracker) has exposed one of the biggest problems of urban India: Most of the wealthy and middle class live in nice neighborhoods, while those who serve their needs live in slums. In Dharavi, Mumbai’s largest slum, it is not uncommon for a few hundred families to share a single water source or toilet facility, which makes social distancing all but impossible.

The urban rich, who have ignored this reality for decades, have for the first time had to confront the living conditions of their nannies, cleaners and drivers. They have not responded by campaigning for better living conditions. Instead, they’ve fired their domestic staff and looked to replace them with the latest vacuums, baby monitors and dishwashers.

Tens of thousands of domestic workers, predominantly women, are now struggling to make ends meet. Their children are falling behind due to school closures. With so many unemployed competing for jobs, these workers are likely to have even less bargaining power in the labor market after the pandemic. Many are now depending for support on their extended families, a trend that may not reverse even when society returns to normal.

Their former employers are struggling in their own way. India has one of the worlds’ most unequal divisions of household labor between men and women. As household incomes increase, women are more likely to enjoy greater support for household work since they can afford to hire staff.

But the economic lockdown and school closures have severely disrupted this system, with the burden falling on women. A recent study by economist Ashwini Deshpande found that Indian men initially stepped in to share household chores when the spring lockdowns were imposed. By August, however, men’s time spent on housework, while still higher than pre-pandemic levels, had declined. And more educated men spent less time on domestic work than their less-educated counterparts. Gadgets can only help around the margins, especially when mothers are also tasked with watching after children who are stuck at home.

While this particular burden might be eased once India returns to pre-pandemic levels of growth and families can hire servants again, the long-term prospects for women who work outside the home are even more worrying. According to the Center for Monitoring [Indian Economy](https://www.livemint.com/opinion/columns/the-awkward-myth-of-a-revival-in-the-country-s-rural-economy-11608220540424.html), the economic shock and the pandemic have shrunk the already low labour participation rate for women even further: It’s now 11% for women compared to 71% for men. And, even with so few of them in the workforce, women have suffered a much higher unemployment rate of 17% compared to 6% for men.

The recovery, like the pandemic, has also been unequal. By November 2020, men had regained most of the jobs they’d lost during the spring lockdowns. Women accounted for nearly half of the remaining job losses.

Perhaps the most disturbing trend reported by CMIE is the impact of the pandemic on women in their early 20s. By the end of last year, young women were just beginning to recover from the twin shocks of demonetization in 2016 and the introduction of a goods-and-services tax in 2017; their workforce participation rate had climbed up to 14.3%. The recession has shrunk that rate to 8.7%.

The world over, women have trouble re-entering the workforce after losing their jobs or taking time off to have kids, and this is even truer for India, where women are culturally burdened with high family expectations. Consequently, even if India rebounds, this cohort of young women is likely to be left behind.

It’s all-too-likely that even the depressingly low participation rates of women in the workforce will not recover quickly. The overall economic slowdown, school and daycare closures, as well as the need to bring children back up to speed in schoolwork, will slow the process of rejoining the economy for many. This doesn’t bode well either for India’s economy or its women. Household incomes will decline and women specifically will become more financially dependent on their families or the state, which itself is struggling to fund a proper safety net.

The road to economic and social independence for India’s women was already a daunting one. The pandemic is making a bad situation dangerously worse.

*This article was originally published in [Livemint](https://www.livemint.com/opinion/online-views/recovering-from-covid-19-pandemic-won-t-be-easy-for-indian-women-11608431263443.html) on 20 Dec 2020.*

*Read more: [Precarious Livelihoods: The case for direct benefit transfers to street vendors](https://spontaneousorder.in/precarious-livelihoods-the-case-for-direct-benefit-transfer-to-street-vendor/)*

* * *

**About Shruti Rajagopalan**

Advisor, Centre for Civil Society Senior Research Fellow, Mercatus Center at George Mason University

## Precarious Livelihoods: The case for direct benefit transfers to street vendors

Original: https://www.spontaneousorder.in/p/precarious-livelihoods-the-case-for-direct-benefit-transfer-to-street-vendor

Author: Spontaneous Order

Published: 2021-06-25T18:07:13.000Z

Topics: street-vendors, direct-benefit-transfers, informal-economy, pandemic-relief

> Without the luxury of working from home, street vendors and hawkers, who could often be seen selling on the street corners, footpaths and local markets, have been struggling to survive. While the first wave hit them hard, there was a glimmer of hope tow..

**Summary:**

Street vendors, comprising 4.2% of urban employment and 14% of India's urban informal economy with a daily turnover of Rs 80 crore, have faced severe livelihood threats from the COVID-19 pandemic, exacerbated by harassment, evictions, and lockdowns. Despite legal recognition via the 2014 Street Vendors Act establishing Town Vending Committees (TVCs), implementation has faltered, as seen in Delhi's 28 TVCs and Chandigarh's defunct one, failing to protect vendors or improve conditions. The PM SVANidhi micro-credit scheme, providing up to Rs 10,000 loans, has sanctioned 23.24 lakh and disbursed 18.54 lakh by March 2021, but excludes many due to app-based applications, low registration (only 131,000 of 300,000 in Delhi), and a one-year repayment pushing vendors into debt traps via moneylenders. Centre for Civil Society conversations with women vendors in Delhi and Rajasthan highlight these issues. The author advocates converting SVANidhi into an AADHAR-linked direct cash transfer scheme via TVCs, easing credit constraints, enabling vendor choice in usage, and ensuring universal access—mirroring successful state efforts in Karnataka, Odisha, and Madhya Pradesh. This classical-liberal approach would recognize vendors as entrepreneurs, enhance ease of doing business, and alleviate pandemic distress without debt burdens.

**Key points:**

- Street vendors represent 4.2% of urban employment but legal protections under the 2014 Act have failed due to poor TVC implementation and ongoing harassment.
- SVANidhi loans exclude many via tech barriers and registration requirements while trapping others in debt amid pandemic earnings collapse.
- Convert SVANidhi to AADHAR-linked direct cash transfers through TVCs to provide choice, universal access, and relief without repayment pressures.
- States like Karnataka, Odisha, and Madhya Pradesh have successfully delivered cash aid to vendors, proving the model's viability.

**By Swati Rao**

* * *

Without the luxury of working from home, street vendors and hawkers, who could often be seen selling on the street corners, footpaths and local markets, have been struggling to survive. While the first wave hit them hard, there was a glimmer of hope towards the end of last year with lockdown restrictions easing up. However, the second wave has brought with it a myriad of setbacks, the persisting fear of infection being overshadowed by the threat to their livelihood. 

The [Period Force Labour Survey](http://mospi.nic.in/sites/default/files/reports_and_publication/PLFS_2018_19_Anual/Annual_Report_PLFS_2017_18.pdf) from 2017-18 shows that street vendors account for 4.2% of total urban employment in India and for over [14% of India’s urban informal economy](https://www.orfonline.org/research/strengthening-urban-indias-informal-economy-the-case-of-street-vending/). Metropolitan cities host the highest concentrations of street vendors, with close to [3,00,000 street vendors in Delhi](https://thewire.in/labour/as-the-impact-of-lockdown-yet-to-wear-off-delhi-street-vendors-travails-persist) and [2,50,000 in Mumbai](https://indianexpress.com/article/explained/street-vendor-act-pm-svanidhi-scheme-explained-6911120/). Despite forming such a critical part of India’s informal economy, with a daily turnover of [Rs 80 crore](https://thewire.in/labour/street-hawkers-lockdown)s, the profession received legal recognition only in 2014.

*The Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014* intends to regulate street vendors in public areas and protect their rights, providing for Town Vending Committees (TVCs) to be set up in each city.

TVCs are responsible for carrying out surveys of street vendors, issuing vending certificates and drawing lots to ensure that the holding capacity of zones is maintained. TVCs have been working in most cities with varying degrees of success. While Delhi boasts of over [28 TVCs, which some claim has diluted the implementation of the Act](https://thewire.in/rights/delhi-street-vendor-loan-tehbazaari), Chandigarh’s TVC has been [lying defunct for the last 4 months](https://www.tribuneindia.com/news/chandigarh/town-vending-committee-lying-defunct-for-3-months-272695). To date, the Act has been unsuccessful in providing improved work conditions for street vendors, protecting them against arbitrary and exploitative law enforcement practices and using urban spaces to generate employment opportunities for the poor. In an effort to balance the interests of urban planning and mobility with the welfare of street vendors, the policy has empowered law enforcement to essentially clamp down on vending.

Threats and harassment from municipal and law enforcement authorities and illegal evictions from their vending spots were made worse by the pandemic and lockdown. Consumer preference for online retailers, hygiene issues and unplanned lockdowns have created a ripple effect on the earning capacity of millions of street vendors. The government’s solution to this was a micro-credit relief package in the form of *[PM Street Vendor’s Atma Nirbhar Nidhi](https://pib.gov.in/PressReleseDetail.aspx?PRID=1632543)* or *SVANidhi*. Touted by the government to be the first urban livelihood programme for street vendors in Indian history, the scheme provides vendors with a working capital loan of up to Rs. 10,000, which is repayable in monthly instalments in the tenure of one year. The web portal and app have been designed to administer the scheme with an end-to-end solution. *The Ministry of Housing and Urban Affairs* claims that [23.24 lakh loans had been sanctioned and 18.54 lakh loans had been disbursed](https://pib.gov.in/PressReleasePage.aspx?PRID=1706616) to the beneficiaries by March 2021. 

*Centre for Civil Society* organised several community conversations with women street vendors from Delhi and Rajasthan to understand the challenges they faced during the lockdown and their experiences with the micro-credit scheme. While some vendors were not aware of the process to be followed for availing the loan, most vendors had at some point tried to apply. The app-based application process, with the objective of promoting paperless digital access to micro-credit facilities, has also proven to be a deterrent for vendors lacking the technological resources or prowess to navigate through the portal. One woman shared that her loan applications were rejected without providing any reasoning. Moreover, the benefits of the scheme are only extended to street vendors [profiled by the government](https://pib.gov.in/Pressreleaseshare.aspx?PRID=1679960), which essentially links it to registration requirements. When only 131000 out of 300000 street vendors are in possession of registration proof in Delhi, the scheme is bound to exclude many. 

However, the most widely cited grievance among the street vendors was perhaps the requirement of paying back the loan within a year. Given the deep impact of the pandemic and the subsequent lockdowns, street vendors have had to dip into their savings to survive. In the last one year, with markets and transportation either shut down or heavily restricted, their earnings have fallen drastically. In this situation when street vendors are struggling to feed themselves and their families, availing a loan under the *SVANidhi* scheme has pushed many further into the debt trap. Some women shared that they had to borrow from local moneylenders at exorbitant rates to be able to pay back the loan on time, while others have already [defaulted on payments.](https://english.lokmat.com/aurangabad/40-per-cent-street-vendors-under-pm-svanidhi-turn-defaulters/)

Given the unintended consequences arising out of a micro-credit scheme like SVANidhi, the government should consider converting it into an *AADHAR*\-linked direct cash transfer scheme, to be implemented through local Town Vending Committees. The advantage of this approach would be threefold: credit constraints would be eased, street vendors would be able to choose whether to use the cash towards setting up a business or saving and every vendor with an *Aadhar* account would be able to avail the benefits. Conversations with street vendors make it clear that alleviating their pandemic-induced distress will take a lot more than the current policy. Encouraged by cash benefits provided to e-rickshaw drivers and construction workers by the Delhi government, street vendor associations have been [demanding similar support](https://www.newsclick.in/Delhi-Street-Vendors-Face-Debt-Trap-Absence-Government-Relief) from their local governments. States like [Karnataka](https://economictimes.indiatimes.com/news/india/relief-for-street-vendors-yediyurappa-asks-banks-not-to-adjust-hardship-assistance-to-settle-loan-dues/articleshow/83341554.cms?from=mdr), [Odisha](https://urbanupdate.in/bhubaneswar-mc-to-provide-covid-assistance-to-12000-street-vendors/) and [Madhya Pradesh](https://www.mpinfo.org/News/TodaysNews.aspx?newsid=20210429N23&LocID=1) among others, have successfully transferred funds to accounts of street vendors.  

Street vending was illegal in urban India for almost six decades and even though it was legally recognised in 2014, vendors are still not considered entrepreneurs or business owners. The impact of the pandemic has been particularly severe since the nature of work, which requires excessive mobility and access to consumers, goods and markets, precludes the luxury of work-from-home. Street vendors, who have been a part of India’s urban life for centuries, have played a critical part as the last link in the supply chain, ensuring essentials like groceries, vegetables and fruits were available throughout the pandemic at the risk of their own health. It is surprising that government schemes like *SVANidhi* have done very little to improve the ease of doing business for these frontline workers.

*Read more: [It makes sense to export, not scrap old cars](https://spontaneousorder.in/it-makes-sense-to-export-not-scrap-old-cars/)*

* * *

**About Swati Rao**

Swati Rao is Assistant Manager, Advocacy at Centre for Civil Society. Previously, she has worked for the US Department of State, Swaniti Initiative in India, and holds an Erasmus Mundus Masters in Public Policy and B.A. LL.B (Hons) from Hidayatullah National Law University, Raipur.

## It makes sense to export, not scrap old cars

Original: https://www.spontaneousorder.in/p/it-makes-sense-to-export-not-scrap-old-cars

Author: Spontaneous Order

Published: 2021-06-22T18:35:28.000Z

Topics: vehicle-scrappage, emission-standards, auto-exports, pollution-policy

> The government is reportedly very keen on a vehicle scrappage policy, making it mandatory for old vehicles to be scrapped or giving subsidies for voluntary scrappage. One aim is to increase the demand for new cars, boosting the auto industry — this was

**Summary:**

Swaminathan S.A. Aiyar argues against India's proposed vehicle scrappage policy, which aims to boost auto sales, reduce pollution, and cut fuel use, drawing from global failures like the US 2009 program where half of 250,000 new sales would have occurred anyway, and Germany's scheme where 50,000 subsidized cars were illegally exported despite €125 million spent. Scrapping well-maintained old vehicles, like the author's 17-year-old US car passing emissions, wastes resources, raises second-hand prices harming poorer owners, and enriches profitable manufacturers without long-term sales gains. Instead, cities should ban vehicles failing biennial emission tests by credible institutions, generating revenue to curb bribes, regardless of age. Failed urban vehicles can be sold cheaply to rural areas with cleaner air, replacing polluting tractors and aiding NGOs. A superior classical-liberal approach: incentivize auto firms to refurbish old vehicles with warranties for domestic longevity and capital conservation in a poor country, then export to low-vehicle-intensity African nations, exporting localized pollution while creating export markets, as Germany's illicit trade proved. This avoids subsidies distorting markets and prioritizes trade over destruction.

**Key points:**

- Reject mandatory scrappage; enforce emission tests every two years for all vehicles regardless of age.
- Export or sell failed urban vehicles to rural areas or Africa to improve affordability and redistribute pollution.
- Incentivize auto companies to refurbish old vehicles with warranties for domestic and export markets, conserving capital.
- Scrappage subsidies fail to boost long-term auto sales and enrich manufacturers at the poor's expense.

**By Swaminathan SA Aiyer**

* * *

The government is reportedly very keen on a vehicle scrappage policy, making it mandatory for old vehicles to be scrapped or giving subsidies for voluntary scrappage. One aim is to increase the demand for new cars, boosting the auto industry — this was indeed the aim for scrappage incentives in the US and Europe after the 2008 recession. The second aim is to reduce pollution, since old vehicles typically emit more polluting gases and harmful PM2.5 than new vehicles. The third is to reduce fuel consumption: newer vehicles are more fuel-efficient. Transport minister Nitin Gadkari has been the keenest proponent of a new scrappage policy.

However, global experience from earlier scrappage policies highlights the shortcomings of scrappage. For starters, scrapping older vehicles makes for bad policy if the older vehicles have been well-maintained or fitted with new engines, as often happens in India. I personally own a 17-year-old car in the US that passes Washington DC’s emission tests with flying colours.

Second, scrapping old vehicles will raise the price of second-hand vehicles. This will hit all poorer car owners and smaller truck owners even while enriching car manufacturers who are already profitable.

Third, evidence from many countries suggests that a scrappage policy brings forward new vehicle purchases by a few months but does not improve long-run sales. Consulting firm Macroeconomic Advisers estimated that in the US in 2009 *“roughly half of the 250,000 in new sales would have occurred in the months following the conclusion of the program, and the other half would have occurred during the program period anyway”*. India’s Auto Industry was badly hit during 2020 and would have welcomed a boost then, but sales are booming again today, and the industry needs no artificial boost at government expense.

A big issue is pollution.

Cities must definitely ban vehicles that cannot pass emission tests, and this has nothing to do with age: many vehicles are serious polluters because of bad maintenance even if relatively new. Indian cities need mandatory vehicular testing every two years, as in the US, by serious institutions. These should be seen as a source of government revenue, and that will improve the political motivation to check bribes for bogus clearances.

Vehicles failing emission tests in many countries are typically sold to rural areas at lower prices. This improves affordability and living standards there. Rural areas have relatively cleaner air that can tolerate some additional vehicular pollution. This will not, of course, reduce carbon emissions, but will redistribute other pollutants to areas where they reduce damage to human health.

Newer vehicles will reduce imported fuel consumption. Electric vehicles will do so even more but may take a decade to become widespread enough to have a significant impact. One silver lining: if older cars go to rural areas, they will to some extent replace transportation of goods and people by tractors, which are extremely fuel-intensive and polluting.

Many NGOs working in rural areas are hamstrung for funds and mobility. In the US, many people gift old cars to the Salvation Army, which then uses them for charitable work or even for gifting to really needy folk. Using public funds to incentivise scrappage makes less sense than incentivisation sales to rural NGOs and panchayats.

Germany had a cash-for-clunkers programme in 2009, subsidising scrappages to revive its car industry. Germany’s police union, the Bund Deutscher Kriminalbeamter, estimated that 50,000 cars supposedly sold to scrapyards were illegally resold to Africa and Eastern Europe. The government had paid around 125 million euros for these vehicles to be destroyed so that people would buy new, more fuel-efficient cars. German environmental group Deutsche Umwelthilfe predicted a doubling of illicit exports by the end of the year.

Instead of forcing older vehicles to be scrapped, why not incentivise them to be exported to countries (mostly in Africa) with very low vehicle intensities that import second-hand vehicles since they cannot afford new ones?

Ideally the government should incentivise a scheme by auto companies to refurbish old vehicles to pass emission standards and give new buyers a limited warranty. This will improve the longevity of vehicles in India and conserve scarce capital in a poor country. Refurbished, warrantied vehicles have a thriving market even in the US.

Such refurbished vehicles will be especially attractive for export to other developing countries. Even un-refurbished vehicles will have an export market, as was proved by the German experience in 2009. This will export pollution to other low-intensity countries, reducing the problem in India. It will not reduce global carbon emissions, but old vehicles are tiny contributors to that global problem.

*Read more: [Between Payment and Parity: How India can tackle Unpaid Domestic Work](https://spontaneousorder.in/between-payment-and-parity-how-india-can-tackle-unpaid-domestic-work/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Between Payment and Parity: How India can tackle Unpaid Domestic Work

Original: https://www.spontaneousorder.in/p/between-payment-and-parity-how-india-can-tackle-unpaid-domestic-work

Author: Spontaneous Order

Published: 2021-06-21T12:57:06.000Z

Topics: unpaid-domestic-work, gender-equality, paternity-leave, family-policy

> Every time I look at my grandmother, a mix of emotions like awe, wonder and, to some extent, jealousy fill my mind. She doesn’t remember her birthday but her looks and culinary zeal belie her age. So, when I came across the conversations around paying w

**Summary:**

T. Bhuvanesh Ram critiques the proposal to Pay for Unpaid Domestic Work (PUDW) in India, arguing it is well-intentioned but ultimately misguided from a classical-liberal lens prioritizing individual responsibility and market-like efficiencies over state payments. While acknowledging UDW's massive economic value—estimated at 40% of GDP or 19 trillion USD annually—and potential benefits like financial independence for women and better national income accounting (as in the Supreme Court's Kriti vs Oriental Insurance ruling on notional income for homemakers), he highlights ideological flaws: PUDW sidesteps the root issue of unequal household burden, where NSO's Time Use Survey shows women spend ten times more time on UDW than men, potentially entrenching gender divisions rather than dissolving them. Operationally, challenges include means-testing, valuation, and eligibility criteria. Ram concedes a limited trial via local bodies for needy households but urges innovative policies for equitable sharing, such as legalizing paid paternity leave like Nordic models to normalize fathers' childcare roles. He emphasizes grassroots change: parents assigning UDW regardless of gender, schools debunking stereotypes, and media challenging norms. Paying out, he concludes, misses the forest for the trees—true equality begins at home through voluntary redistribution of responsibilities.

**Key points:**

- PUDW hardens gender divisions in domestic work rather than addressing women's disproportionate 10x burden shown in NSO Time Use Survey.
- Legalize and expand paid paternity leave to shift perceptions that childcare is solely mothers' responsibility.
- Involve parents, schools, and media in breaking artificial gender-UDW links through socialization and education.
- Trial PUDW selectively via local bodies for unemployed households, but prioritize fundamental equitable sharing.

**By T. Bhuvanesh Ram**

* * *

Every time I look at my grandmother, a mix of emotions like awe, wonder and, to some extent, jealousy fill my mind. She doesn’t remember her birthday but her looks and culinary zeal belie her age. So, when I came across the conversations around paying women for Unpaid Domestic Work (UDW), I couldn’t help but juxtapose the discourse with my grandmother, wondering what price would befit her contribution to our household!

The proposition of Paying for Unpaid Domestic Work (PUDW) has a long history. Its primary objective is to shock the patriarchal mindset into acknowledging the role of UDW as the vital cog behind the human capital in any economy. For instance, the estimation by various studies, of the contribution of UDW to the Indian economy differs from [40% of its GDP](https://www.downtoearth.org.in/blog/economy/unpaid-work-women-and-the-burden-of-unpaid-labour-63035) to as much as [19 trillion USD](https://www.unwomen.org/en/news/stories/2021/6/experts-take-investing-in-women-crucial-to-india-recovery) per year! 

PUDW certainly presents a strong case. The sheer radicalism, it is hoped, would make it impossible to take the domestic chores that women do for granted. It could enable women to be more financially independent, increase their bargaining power, resist domestic violence and even empower them to exit failed marriages. It could also lead to a more inclusive calculation of national income accounts if and when we manage to put an appropriate monetary value on UDW. In *[Kriti vs Oriental Insurance](https://www.mondaq.com/india/employee-benefits-compensation/1028860/the-calculation-of-compensation-in-the-case-of-non-earning-deceaseds-kirti-v-oriental-insurance)*, the Supreme Court has supported the idea of assigning a ‘notional’ income for the non-earning victims (including homemakers), although in the context of calculating compensation in motor vehicle accidents. 

However, PUDW appears high on intentions but low on outcomes, given the various ideological and operational concerns. The idea conveniently dodges the underlying issue of unequal sharing of domestic responsibilities at the household level. As NSO’s first [Time Use Survey](https://www.pib.gov.in/PressReleasePage.aspx?PRID=1660028) shows, in India, women spend ten times more duration in UDW than men. Paying women for UDW only hardens the arbitrary divisions of domestic work that it sought to address in the first place. The proposal appears to have a condescending tone, wherein the need for recognition of the performance of UDW trumps the much greater need for redistributing the disproportionate burden of UDW thrust on women. The unfair burden of domestic struggle leads to a low labour force participation rate in women, which is an issue of concern in India and unlikely to be solved by the proposal. Operationally, devising the right means-test for beneficiary identification, valuation of UDW at household level etc., remain unaddressed. It would also be challenging to decide if the age and marital status of recipients should matter, as the performance of UDW by women is hardly dependent on them.

The idea of PUDW merits a trial. Perhaps a household where no adult is productively employed will benefit more from the proposal than one where the woman, for example, owns a small eatery. To achieve the targeted delivery of this idea, it’s best to involve the local bodies to identify beneficiaries. Nevertheless, it would need far-sighted, innovative policy interventions to address the more fundamental issue of equitable sharing of UDW. One of the low-hanging fruits is to legalise and expand the applicability of paid paternity leave, following other [Nordic nations](https://reba.global/content/learnings-from-scandinavia-on-how-shared-parental-leave-can-encourage-gender-equality). It would help in changing the perception that childcare is solely the mother’s responsibility. 

There is an iconic scene in the much-celebrated movie, *‘The Great Indian Kitchen’*, where the lead actress almost cathartically scolds her brother for asking her to fetch water to drink, when he could have easily done the same.

The smallest of measures by the agents of socialisation have the most significant role in the long run. Parents could ensure that children are regularly engaged in UDW, such as cleaning utensils, drying clothes etc., regardless of their gender. Schools could ensure that children are educated about the artificial link between gender and UDW. The media has a crucial role in either propagating or challenging existing gender stereotypes in their content. In sum, paying our way out of the issue is akin to missing the wood for the trees.

After all, like charity, equality begins at home.

*Read more: [Caste barriers still play a big role in our economic choices](https://spontaneousorder.in/caste-barriers-still-play-a-big-role-in-our-economic-choices/)*

* * *

**About T. Bhuvanesh Ram**

T. Bhuvanesh Ram, a student of physics by graduation, is a ‘cinephile’ whose interests include policymaking, Constitution, physical comedy, punching above his weight, and daydreaming. He has cleared the UPSC Civil Services examination 2019 and keeps himself busy catching up to his own rising expectations from life.

## Caste barriers still play a big role in our economic choices

Original: https://www.spontaneousorder.in/p/caste-barriers-still-play-a-big-role-in-our-economic-choices

Author: Spontaneous Order

Published: 2021-06-18T12:13:29.000Z

Topics: caste-system, economic-mobility, labour-markets, affirmative-action

> The lively office book club will later this month discuss a searing essay writer by B.R. Ambedkar. That gave me a welcome reason to once again read Annihilation Of Caste, which was published after a scheduled speech by Ambedkar in Lahore was cancelled b..

**Summary:**

Niranjan Rajadhyaksha revives B.R. Ambedkar's insight from 'Annihilation of Caste' that India's caste system imposes a rigid hierarchy of labourers, not merely a division of labour, stifling economic freedom. A field experiment by Suanna Oh in rural Odisha confirms this: workers forgo substantial income—nearly half rejecting offers at 10 times their daily wage—to avoid 'identity tasks' linked to other castes or joint work with lower castes. Despite post-independence convergence in education, income, occupations, and consumption across castes, as noted by Kaivan Munshi, wide gaps persist, particularly in education between Dalits/Tribals and upper castes. Munshi highlights strong intergenerational human capital persistence, projecting many generations before equalization, while caste networks provide insurance against shocks but deter urban migration and lock farmers to land. Examples of caste mobility exist, like agricultural castes entering business and affirmative action's role, yet caste remains a central barrier in economic choices, from rural labour to urban industries like real estate and diamond trading. The classical-liberal lens underscores how such social hierarchies distort voluntary economic exchange and mobility.

**Key points:**

- Caste identity leads rural Odisha workers to forgo 10 times their daily wage to avoid tasks associated with other castes.
- National data shows post-independence convergence in education, income, and occupations across castes, but education gaps between Dalits/Tribals and upper castes persist.
- Caste networks offer insurance and aid migration but hinder broader urban mobility and intergenerational economic equalization.

**By Niranjan Rajadhyaksha**

* * *

The lively office book club will later this month discuss a searing [essay writer](https://typers.net/) by B.R. Ambedkar. That gave me a welcome reason to once again read Annihilation Of Caste, which was published after a scheduled speech by Ambedkar in Lahore was cancelled by the organizers of a conference on social reforms because, in Ambedkar’s own words, *“the views expressed in the speech would be unbearable to the conference”*.

The essay brims with insights, which is the default status for almost everything Ambedkar wrote. Each reading of Annihilation Of Caste leaves the reader with something new to think about.

One part of the essay that never fails to resonate with me is this: *“\[The\] Caste System is not merely division of labour. It is also a division of labourers. Civilized society undoubtedly needs division of labour. But in no civilized society is division of labour accompanied by this unnatural division of labourers into watertight compartments. Caste System is not merely a division of labourers which is quite different from division of labour—it is a hierarchy in which the divisions of labourers are graded one above the other. In no other country is the division of labour accompanied by this gradation of labourers.”*

Cut to our times. A young scholar from Columbia University, where Ambedkar also studied economics, shows through a field experiment in rural Odisha how caste identity makes workers avoid certain tasks even if that means substantial economic costs to them. Suanna Oh looked at behaviour for two sets of tasks—“identity tasks” that are associated with specific castes, and “paired control tasks” that do not have any traditional caste associations. Workers were generally unlikely to take up work offers involving tasks that were not traditionally associated with their own caste identities. They were not keen on working in joint tasks with members of other castes, especially if the latter were lower than them in the caste hierarchy.

How much potential income are workers willing to forgo to avoid caste-inconsistent tasks? A supplementary experiment run by Oh shows that nearly half the surveyed workers in rural Odisha chose to stay away from caste-inconsistent tasks despite being offered 10 times their daily wage. Such behaviour falls squarely within the Ambedkarite insight that the caste system is not just a division of labour, but also a division of labourers.

Recent decades have seen some examples of caste mobility as well. Harish Damodaran has written about how entrepreneurial elements from agricultural castes have moved into business. Nicholas Stern and his colleagues have shown in their Palanpur surveys how some of the castes deemed inferior in the traditional social system have grabbed new opportunities, while farmers have remained locked to the land. Affirmative action by the government has also helped.

Some of the best work on the economic impact of the caste system has been done by Kaivan Munshi, who is the Frank Ramsey professor of economics at Cambridge University. His recent paper on caste and the Indian economy, published in the Journal Of Economic Literature, provides a great deal of food for thought. Munshi says that national data indicates that there has been a convergence in education, income, occupations and consumption across caste groups in the years since independence.

However, India still has a great distance to go before there is complete convergence. There is still a wide gap in education between Dalits/Tribals and the so-called upper castes. *“Given the strong intergenerational persistence in human capital, the key variable driving convergence, it will be many generations before income and consumption are equalized across caste groups,”* says Munshi.

He has also shown in his earlier work how caste networks provide insurance to members when they face income shocks, but this has also hindered the necessary migration of people to cities. Other scholars have shown how caste networks are an important institution when internal migration actually takes place. An earlier instalment of this [column](http://bit.ly/2RYah2o) had mentioned how caste networks continue to be influential in many businesses such as real estate. Some of these lending networks are under stress right now because of a downturn in the real estate market.

Several recent political narratives are about how caste is no longer as powerful a predictor of voting behaviour as before. There is socio-economic data that there is some convergence between castes. As Munshi argues: *“Some of this convergence is likely due to affirmative action, but caste-based networks could also have played an equalizing role by exploiting the opportunities that became available in a globalizing economy.”*

However, there is also no doubt that caste continues to be a central fact of Indian economic life—be it the work choices of rural labourers in Odisha or the informal networks in many industries such as real estate and diamond trading.

*This article was originally published in [Livemint](https://www.livemint.com/opinion/columns/caste-barriers-still-play-a-big-role-in-our-economic-choices-11576598049492.html) on 17 December, 2019.*

*Read more: [The “Stree” behind Street Vendors](https://spontaneousorder.in/the-stree-behind-street-vendors/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## The “Stree” behind Street Vendors

Original: https://www.spontaneousorder.in/p/the-stree-behind-street-vendors

Author: Spontaneous Order

Published: 2021-06-16T11:51:00.000Z

Topics: street-vendors, street-vendors-act, policy-implementation, covid-impact

> With no luxury of working from home and maintaining social distance, street vendors have been fighting for ‘atma-nirbharta’ during the extended lockdown period. The blows of the pandemic have silenced the active hubs of commerce and urban conviviality

**Summary:**

Women street vendors in Rajasthan have struggled immensely during COVID-19 lockdowns, lacking the option to work from home and facing sharpened gender disparities, as highlighted in Centre for Civil Society's State Community Conversations. Vendors like Machi Devi, Sunita Singh, and Rani Mali report exhausted savings, household burdens, sexual harassment, unsafe streets, police brutality, and frequent evictions by Urban Local Bodies, which confiscate goods and impose fines, often escalating during lockdowns. Extortion by police and authorities goes largely unreported. While some, like Lakshmi at Pandit Ji ka Chouraha, succeed through collective action to ward off harassment, many resort to asset sales and high-interest moneylender loans, trapping them in debt and jeopardizing children's education, as Ranu Salvi notes. The Street Vendors Act (2014) mandates vending zones, registration for protection and social security, and licensing to secure livelihoods, but lacks effective implementation. The SVANidhi scheme, with Rs. 5,000 crore for 50 lakh vendors offering subsidized loans, fails to reach most due to poor execution. From a classical-liberal viewpoint, atma-nirbharta requires rule-of-law protections against arbitrary state actions; priorities include opening markets with safety measures, halting retrenchments, ensuring wage security, and providing regulatory tools for recovery.

**Key points:**

- Women street vendors in Rajasthan endure police brutality, evictions, sexual harassment, and extortion during lockdowns, with many exhausting savings and falling into debt traps.
- Proper implementation of the Street Vendors Act (2014) is essential to designate vending zones, register vendors, and provide licensing for livelihood security and social benefits.
- The SVANidhi scheme's Rs. 5,000 crore stimulus for 50 lakh vendors is undermined by ineffective rollout, limiting access to subsidized working capital loans.
- Collective organization among vendors, as exemplified by those at Pandit Ji ka Chouraha, effectively deters harassment by authorities.
- Governments must prioritize reopening markets with safety protocols, generating work, stopping retrenchments, and supplying regulatory tools to aid pandemic recovery.

**By Tanya Mittal**

* * *

With no luxury of working from home and maintaining social distance, street vendors have been fighting for ‘atma-nirbharta’ during the extended lockdown period. The blows of the pandemic have silenced the active hubs of commerce and urban conviviality, and the gender disparities have sharpened. Women across the unorganized sector, be it street vendors or daily wagers or domestic workers, are particularly vulnerable during the lockdowns imposed due to the COVID 19 pandemic.

Centre for Civil Society conducted its second chapter of State Community Conversations with Women Street Vendors based in Rajasthan through video conferencing. *“Customers have shunned the streets and we have been left struggling to make ends meet”*, says Machi Devi, a local vendor from Jaipur. Her lockdown struggle was corroborated by the voices of 10 other women street hawkers from Rajasthan, whose stories were rife with complaints and helplessness. Most of them have exhausted their savings and have been grappling with the burden of household chores, sexual harassment on the streets, lack of safety measures, and police brutality. 

During our conversation with the stakeholders, many women cited the frequent eviction drives by Urban Local Bodies as a deterrent to pursuing their livelihoods. *“They came at the break of day, took my weighing scales and cart, and I had to run to the police station thrice, that week. I was tossed around with disregard!”,* Sunita Singh shares about the confiscation of her goods.

Authorities often seize their products, and these women have to keep visiting the baton-wielding police personnel and paying heavy fines to procure their belongings. Such incidents have increased during the extended lockdown, with numerous encounters of harassment and brutality by the police and civic authorities occurring off the books. Women street vendors are vulnerable to extortion as well, by local police and municipal authorities. Most of these cases go unreported. *“Streets aren’t safe places for women! Men clad in police uniforms abuse us, harass us, dominate us. I have two children.”*, says Rani Mali, a vegetable vendor from Udaipur, almost breaking into tears, *“I have indoctrinated both my children to be their strongest version, to survive on the streets. There are all kinds of people on the street and one has to exercise utmost caution while vending, especially as a woman in isolated areas.”*

On the other end of the spectrum are iron ladies like Lakshmi, who set up their *mandis* at the Pandit Ji ka Chouraha in Hasanpura. They have insulated themselves from the cycle of misery and harassment. *“Nobody raises their voice with me. In fact, Nagar Nigam authorities do not dare to question me because of the power I wield. By joining hands together with all my sisters in the market, we can keep the authorities at bay.”*

Many of these street vendors have resorted to negative coping strategies such as the distressed sale of assets and loans from moneylenders at very high-interest rates. Vicious debt traps have forced some of them to even beg for food. The apathy and lack of sensitivity displayed by the lenders while dealing with the vendors, who are just able to stay afloat in these challenging times, is appalling. 

The most significant conclusion reached after the interaction included the proper implementation of the [Street Vendors Act (2014)](https://legislative.gov.in/sites/default/files/A2014-7.pdf). The Act promotes the regulation of street vending as a livelihood opportunity for vendors by designating vending areas and by statutorily providing for the registration of vendors for access to protection and social security benefits. Also, the licensing of street vendors is imperative to ensure that the livelihoods remain secured. 

Without effective implementation and percolation of the myriad of policies and legislations on paper, the constitutional promise of [social justice and equality](https://www.constitutionofindia.net/constitution_of_india/preamble) remains out of reach. 

 *“We can barely afford our meals; education is a luxury for our household,”* laments Ranu Salvi, a Town Vending Committee member in Rajasthan. *“Our children’s education has been jeopardized. Last year, I made my daughter complete her 7th grade with every penny I had on me, but this year it seems like a herculean task to fund her online education, especially since private schools have not offered any rebate in the wake of the pandemic.”*

Another issue that surfaced amongst the other woes was the [SVANidhi Government Scheme](https://pmsvanidhi.mohua.gov.in/), which the participants commonly referred to as the ‘10000 rupees’ scheme. SVANidhi aims at facilitating working capital loans at a subsidized rate of interest, incentivizing regular repayment of the loan, and rewarding digital transactions. However, despite reasonable efforts undertaken by the Government, the actual benefits of the relief schemes such as the SVANidhi Scheme under the Act are not accessible to the majority of informal workers. For this scheme launched in the wake of the COVID 19 pandemic, the Centre has earmarked a stimulus package of Rs. 5,000 crore for nearly 50 lakh vendors. However, present times have called for the Government to strengthen the implementation of the scheme. 

After listening to different representatives across Rajasthan, the most significant course of action is the opening of markets with proper safety and social distance measures need to be a priority.

In addition, there is an urgent need to generate work, stop retrenchment, ensure wage security and provide the access to [regulatory tools](https://cjp.org.in/women-street-vendors-face-high-loss-of-livelihood-sexual-harassment-during-lockdown-finds-survey/) so that workers, especially women can recover themselves from the impact of the pandemic.

*Read more: [Women of Janpath](https://spontaneousorder.in/women-of-janpath/)*

* * *

**About Tanya Mittal**

Tanya Mittal is a student at Lady Shri Ram College for Women, pursuing her undergraduate degree in History with a minor in Political Science. She is a motivated individual with a passion for international relations, public policy and gender studies. Currently an intern with the Centre for Civil Society, she wants to make people aware about the glaring issues prominent in the current world scenario through her writing. She is fond of reading and watching mysteries and playing the piano in her spare time.

## How Trophy Hunting Saved the Markhor

Original: https://www.spontaneousorder.in/p/how-trophy-hunting-saved-the-markhor

Author: Spontaneous Order

Published: 2021-06-14T12:13:49.000Z

Topics: wildlife-conservation, trophy-hunting, community-incentives, property-rights

> Wildlife conservation is a crucial aspect of managing ecosystems that are threatened by the expansion of detrimental activities. However in the discourse surrounding ‘human-wildlife’ conflict, some significant considerations on conservation vis-a-vis

**Summary:**

State-controlled wildlife conservation alienates local communities by extinguishing their customary rights and economic ties to nature, leading to human-wildlife conflict, as seen in the Markhor's case across South Asia. In Pakistan's Gilgit-Baltistan, regulated trophy hunting since the 1990s reversed the Markhor's decline from critically endangered to near threatened on the IUCN Red List. Two initial community reserves expanded to 38 areas; 80% of permit revenues—up to $60,000 USD each—go to communities, funding anti-poaching guards, roads, schools, and hospitals, while shifting locals from poaching for food to active conservation. This market-driven incentive structure prospered impoverished communities amid high unemployment. Conversely, India's Jammu & Kashmir employs a 'guns and guards' approach under the 1978 Wildlife Protection Act, cordoning habitats and criminalizing activity, yielding mixed results: stable or declining populations like in Hirapora due to overgrazing by nomadic herders without incentives. Pasture schemes and awareness failed sans economic benefits. The author, from a classical-liberal viewpoint, urges India to emulate Pakistan by restructuring incentives, harnessing markets to fund conservation without state burden, rejecting zero-sum human-wildlife views and prioritizing community rights over ethical qualms about trophy hunting absent better alternatives.

**Key points:**

- Regulated trophy hunting in Pakistan's Gilgit-Baltistan allocated 80% of revenues to communities, boosting Markhor numbers from critically endangered to near threatened.
- Pakistan's model created 38 community reserves where locals fund anti-poaching and infrastructure, transforming communities into conservation advocates.
- India's 'guns and guards' approach in Jammu & Kashmir failed to curb poaching and overgrazing due to lacking economic incentives for locals like Gujjars.
- Aligning market incentives makes conservation profitable for communities, reducing state funding needs and avoiding zero-sum conflicts.

**By Mohammad Anas Khan**

* * *

Wildlife conservation is a crucial aspect of managing ecosystems that are threatened by the expansion of detrimental activities. However in the discourse surrounding ‘human-wildlife’ conflict, some significant considerations on conservation vis-a-vis rights of local communities are overlooked. The 20th century wisdom of State controlled ‘scientific’ forest management eventually extended to wildlife conservation. The result was that wildlife conservation became the sole domain of the State thereby alienating local communities who have historically been linked to the wildlife through emotional, spiritual, and economic connections. Conservation regimes, that extinguished the customary rights as well as historical relationships of local communities with the natural environment, have created a tussle between local communities and wildlife. The challenge is to bridge this schism by securing the rights as well livelihoods of local communities, along with the protection of endangered wildlife. 

Another challenge faced by conservationists as well as policymakers around the world has been that of funding conservation, especially in impoverished countries. In places where people can barely make ends meet, funding conservation becomes not just problematic but extremely difficult. How does one overcome this ‘conundrum’? The answer perhaps lies in fundamentally reconsidering the vision through which conservation is approached. In the age of the anthropocene, it would be naive to not include people as one of the most important stakeholders in the conservation process. One may ask how can people, who are themselves threatening wildlife, become their saviours? The answer is simpler than one could think of but it requires us to focus on restructuring incentives in a way that makes it profitable for communities to conserve wildlife. The story of Markhor, the majestic mountain goat which is found in the mountainous regions of South & Central Asia, is worth pondering upon and has important insights on sound policy frameworks. The Markhor’s habitat is scattered across multiple countries including India, Pakistan, Afghanistan and Tajikistan. 

**Markhor Conservation – The Gilgit-Baltistan Model**

In the Gilgit-Baltistan region administered by Pakistan, the numbers of Markhor were dwindling fast owing to indiscriminate poaching, habitat loss, and the competition with livestock for grazing pastures. Moreover, the region of Gilgit Baltistan faced high unemployment ratios and low socio-economic indicators. The challenge for policymakers and conservationists was to create a conservation framework which does not scuttle the economic prospects of the region’s already impoverished communities. In the 1990s, Pakistan officially started regulated trophy hunting in the region and as counter-intuitive as it may sound, the experience in Gilgit-Baltistan has helped not just save the Markhor from possible extinction but also brought in much needed prosperity for the local community. 

As part of the project, two community game reserves were [established](https://www.researchgate.net/publication/344787899_Trophy_hunting_impacts_on_Kashmir_Markhor_and_changing_the_negative_perception_of_local_communities_about_wildlife_in_Chitral_District_Pakistan) i.e. Tooshi-Sasha and the Gehrait Golain Markhor Conservancies where Trophy hunting was officially authorised in 1998. A total of around 38 community areas have been identified by the Government as hunting spots. To incentivise the local community to actively participate in the process, the Government decided that 80% of the revenue generated by trophy hunting operations shall go back to the local communities and the remaining 20% to the wildlife department. It is pertinent to mention that one of the threats to Markhor population came from the local impoverished communities who used to hunt it for food during winter. The trophy hunting project [changed the relationship](https://www.thethirdpole.net/en/nature/trophy-hunting-markhor/) between the animal and the local community in a way that the villagers are now at the forefront of conservation efforts due to the benefits it brings to them. 

The trophy hunting season lasts from November to April where a limited number of permits are issued based on the annual population survey of the animal. An open bidding takes place for individual permits and each permit can cost as much as [60,000 USD](https://www.tribuneindia.com/news/world/american-national-in-pakistan-hunts-highest-rated-rare-astore-markhor-203117). In trophy hunting, only old male goats are shot and they are usually identified from its gait, body and the horns. Due to the success of the trophy hunting operations, there has been a [substantial increase](http://www.wildlife-baldus.com/download/HP%2012%20Baldus%202.pdf) in the number of Markhor to the extent that it is now considered ‘near threatened’ in the [IUCN’s red list](https://www.iucnredlist.org/), a two level improvement from its earlier status as critically endangered. On the other hand, the communities which receive 80% of the revenue use a share of it to invest in anti-poaching operations as well as paying off the salaries of guards who protect the animals. The [Village Conservation Committees ( VCCs)](https://www.thethirdpole.net/en/nature/trophy-hunting-markhor/) which manage the funds have used the money to fund roads, hospital infrastructure and schools thereby bringing prosperity to the communities. 

**Markhor and the Indian Story** 

In Jammu & Kashmir, the Markhor has been historically found in the Pir Panjal mountain ranges. According to a survey conducted by the [Wildlife Trust of India](https://www.wti.org.in/), some populations have been sighted in Kazinag, Hirapora, Bunyar and Shamsari in the Kashmir valley as well as in places like Poonch outside the Kashmir valley. There has been substantial fragmentation of the habitat, and [habitat loss](https://www.thethirdpole.net/en/nature/markhor-struggling-to-survive-in-kashmir/) due to poorly planned development projects.  Overgrazing by livestock as well as poaching are also severely affecting the population. Markhor has been included as a protected animal under the Jammu & Kashmir Wildlife Protection Act, 1978. India’s response to this crisis has followed the ‘guns and guards’ approach by cordoning off the habitat of Markhor as ‘protected areas’ and limiting as well as criminalising human activity in these zones. 

The evidence in terms of conservation outcome has been mixed i.e. in some areas the population of Markhor has remained stable while in places such as Hirapora, the numbers have [gone down](https://www.firstpost.com/long-reads/markhor-struggles-to-survive-in-kashmir-as-its-hirapora-habitat-is-overgrazed-fragmented-by-roads-and-power-lines-9259431.html) alluding to a failure. While the political volatility in the region and increased militarisation does act as a significant impediment to any conservation activity, it is pertinent to note that the threat of livestock overgrazing by nomadic pastoralists and illegal poaching pretty much remain at the core of the problem. For the nomadic pastoralists such as the Gujjars and Bakharwal community, Markhor is an economic liability competing for grazing pastures with their livestock. The Government has tried to find a middle ground by creating some pasture management schemes. As part of the scheme, no-grazing zones were established in the protected areas with patrolling activity to guard pastures from illegal grazing. However it has shown [little success](https://www.wti.org.in/feature/markhor-and-migratory-herders-a-community-conservation-perspective/) owing to no incentives for the communities to sacrifice their livestock i.e. their only source of income. Community awareness about biodiversity conservation has also not yielded tangible benefits for the Markhor in the region. 

**Communities and Conservation – Not a Zero Sum Game** 

The Markhor conservation regimes adopted by the Indian and Pakistani Governments highlight two different visions through which wildlife conservation has been approached. The Indian Government’s policies are closely aligned with the wilderness approach which presupposes that the only relationship between human activity and wildlife is that of conflict. Cordoning off wildlife habitats, restricting human activity in protected areas and using guns & guards, are reflective of the Indian approach to the issue of Markhor. The approach has not just failed to protect the Markhor but further alienated the local communities who now have little incentive to protect the Markhor. Infact, it may lead to local communities colluding with poachers to safeguard their pastures from being designated as protected areas. 

In Gilgit Baltistan, the opening up of trophy hunting and community reserves successfully harnessed the active involvement of local communities by making conservation an economically viable venture. It has also shown that there must not necessarily be a zero-sum game between the interests of local communities to that of wildlife. Properly aligning incentives as well as calibrating the force of markets can assist remarkably well in funding conservation which also decreases the burden on the State exchequer. While the ethical dimensions of activities such as trophy hunting are up for debate, it must not stifle the success of ongoing operations unless a viable alternative can be found. And those alternatives must not come at the expense of local communities lest the hard-won success will be lost. 

*Read more: [Women of Janpath](https://spontaneousorder.in/women-of-janpath/)*

* * *

**About Mohammad Anas Khan**

Mohammad Anas Khan is a law graduate and is currently working as a Senior Associate with Centre for Civil Society. Anas is an academic enthusiast and has a keen interest in legal theory, public policy and the terracotta approach to environmentalism.

## Women of Janpath

Original: https://www.spontaneousorder.in/p/women-of-janpath

Author: Spontaneous Order

Published: 2021-06-11T12:00:00.000Z

Topics: street-vendors, rule-of-law, women-vendors, street-vendors-act

> “I am a very strong woman and can give any man in this market equal competition because I don’t lack zeal. However, what I do lack is support to stand up to officials who misuse their uniform and exploit us.” For the longest time, street vendors and

**Summary:**

Street vendors, particularly women, face systemic exploitation by police and local authorities who violate the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014, through illegal seizures and arbitrary penalties, exacerbating vulnerabilities during the COVID-19 pandemic. A March 2021 Centre for Civil Society study interviewed 40 women vendors in Delhi and Jaipur, revealing common practices of goods seizure without 30-day notice or inventory lists as required by Section 19, used as extortion tactics that disrupt business and instill fear, especially for solo women operators. Authorities impose fines up to Rs 4,000, exceeding the Act's Section 28 limit of Rs 2,000, compelling payments to reclaim goods or avoid eviction. Women endure additional gender-specific hardships like low sanitation access, harassment, theft, and unpaid home labor, with pandemics pushing them deeper into poverty per UN reports. From a classical-liberal viewpoint, enforcing property rights and rule of law is essential. Solutions include sex-disaggregated data collection, Act amendments imposing penalties on harassing officials (higher for targeting women), and ensuring meaningful women representation in Town Vending Committees beyond tokenism.

**Key points:**

- Centre for Civil Society's study of 40 women vendors in Delhi and Jaipur documented illegal seizures under Section 19 and extortion by authorities violating the Street Vendors Act 2014.
- Authorities impose arbitrary fines up to Rs 4,000, surpassing the Act's Rs 2,000 limit under Section 28, forcing vendors to pay for business continuity.
- Women vendors face compounded gender vulnerabilities including safety risks, harassment, and pandemic-induced poverty, as highlighted by UN reports.
- Policy recommendations: collect sex-disaggregated data, amend the Act to penalize official harassment (with higher fines for women), and verify effective women participation in Town Vending Committees.

**By Simranjyot Kaur**

* * *

*“I am a very strong woman and can give any man in this market equal competition because I don’t lack zeal. However, what I do lack is support to stand up to officials who misuse their uniform and exploit us.”*

For the longest time, street vendors and their presence in public spaces has been projected as illegal and unwanted. This could be attributed to absence of a law specifically pertaining to street vendors and their welfare. It was only in 2014 that a national legislation named “The Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act” was notified. But, the awareness of the same still remains questionable. Street vendors as a community are poorly educated and have few resources at their disposal. This makes them more likely to be exploited by those in powerful positions.

The situation is worsened when one’s gender identity adds to their vulnerability and it is an entirely different ball game when a ravaging pandemic is underway. According to a UN [report](https://www.unwomen.org/en/news/stories/2020/9/feature-covid-19-economic-impacts-on-women), women who are poor and marginalised are more likely to lose their livelihood during a pandemic since they typically earn less than men and have even lesser savings. The report also states that the pandemic would push more women into extreme poverty than men. From earlier experience of the Ebola outbreak, it has been seen that men and their economic activity are quick to rebound but it took longer for women to escape the cycle. Not just economically, even socially women have to bear the brunt when they are burdened with unpaid labour at home and more prone to domestic violence during these times. In this article, we look at Women of Janpath, who were vocal about the challenges faced by them while  vending during the past year.

In March 2021 , Centre for Civil Society conducted a study to understand the impact of coronavirus on the lives of women vendors. We interviewed  women  in Delhi and Jaipur. They were asked to share their stories with us for an insight into their lives over the past year. The appalling theme that bound all 40 women was blatant violations of law by police and local authorities.

*“Our items being seized is a common occurrence. We need to pay to get our own goods back.”*

Section 19 of the Street Vendors Act, 2014,  permits seizure only in cases where the vendor has failed to comply with eviction or relocation orders after the notice period of 30 days has expired. Following which, the vendor must be provided with a list of goods being seized, duly signed by the designated person of the local authority.

In  our interviews we observed that seizure was often used as an extortion tactic by the local authorities. The authorities do not comply with the Act and seize goods illegally, and violate the rights of the vendors under the Act. Moreover, for the vendors to have a thriving business, the most basic requirement is access to goods but the practice of undue seizure of goods interrupts this access. It has instilled a fear amongst these vendors, which makes them run and hide with their goods as soon as they hear the police and local authorities approaching the market. This tends to disadvantage women who are single handedly working at their stalls. Post seizure, vendors are made to run from pillar to post to reacquire their goods. This results in loss of precious time and money, which can again be a stumbling block for women for various reasons including safety concerns.

*“NDMC charges us wrongly if we don’t play by their rules.”* 

Arbitrary penalty is another weapon in the hands of the local authority who often charge and fine the street vendors excessive amounts. The Street Vendors Act, 2014 under Section 28 provides for fine upto two thousand rupees only. This section, however, empowers the local authority to determine the amount to be charged. This leaves scope for arbitrary penalties and vendors being financially abused. 

Many women shared that they were compelled to pay a hefty amount just to reclaim their goods or carry on their business without interruptions. These women informed us that if they did not do as the officers said, they were given a challan for upto Rs 4000 for disobeying them. Even if vendors were stating facts, the officers construed it as misbehavior and in return fined them. This fear of losing their place of vending, goods and other such possibilities make the vendors pay unreasonable amounts to the authorities without questioning them or fighting back.

Women street vendors not just have to deal with the usual issues related to their line of business such as low income and lack of social and legal protection, but also have to suffer additional hardships owing to their [gender](https://www.isstindia.org/publications/1610689722_pub_Final_Designed_Street_Vendors_Report_compressed.pdf). They face problems of low access to sanitation and health facilities. They face safety issues such as theft and sexual harassment. They often have to play multiple roles in their personal and professional life, adding to their distress . They do not get the required support from the systems in place. 

The possible solutions would firstly include collating more sex disaggregated data through studies on women vendors to help unearth and recognise challenges exclusive to women. This will help in bringing to light issues which are often overlooked or not given due weightage because they impact a minority of the population. The subsequent action would be bringing in suitable policy changes and amendments to the Street Vendors Act, 2014. A suggestion would be introducing penalties for authorities if they are found harassing the vendors. A higher penalty can be charged if the harassment is directed at a woman. This would be an effective deterrent in reducing the cases of undue seizure, illegal eviction and arbitrary penalties.

The problem could also be resolved if women are able to access an increasing number of platforms for engaging and participating in discussion concerning them and their welfare. It will be insightful to study if Town Vending Committees across states are complying with the requirement of women reservations. If yes, whether the same is serving its purpose of empowering women by giving them a voice or if it merely serves as tokenism. Because till the time women’s opinions are not heard, the problem will continue to persist.

*Read more: [It’s time for Police Reforms in India](https://spontaneousorder.in/its-time-for-police-reforms-in-india/)*

* * *

**About Simranjyot Kaur**

Simranjyot Kaur is a Junior Research Associate at Centre for Civil Society. She is a graduate of the National Law School of India University, Bangalore. She is also an Advocate registered with the Punjab and Haryana High Court. In her personal time, she likes to read and play sports. She is keen on expanding her knowledge of caste and gender.

## It’s time for Police Reforms in India

Original: https://www.spontaneousorder.in/p/its-time-for-police-reforms-in-india

Author: Spontaneous Order

Published: 2021-06-09T17:01:07.000Z

Topics: police-reforms, police-brutality, rule-of-law, police-accountability

> On 26th March 2021, after months-long protests against police brutality, the city of New York, passed a law to end qualified immunity for the New York police department. In simple words, previously, qualified immunity for the officers made it extremely ..

**Summary:**

India's police system, rooted in the colonial Police Act of 1861 designed to suppress dissent post-1857 mutiny, persists post-independence to serve political executives rather than protect citizens' life, liberty, and property, embodying a classical-liberal critique of state overreach. Brutality is rampant, with 1739 custodial deaths in 2019, unprovoked assaults on migrant workers and grocery buyers during COVID lockdowns, and cheered encounter killings. Sovereign immunity under CrPC Sections 132 and 197 shields officers from prosecution without state sanction, enabling impunity amid political quid-pro-quo. Despite recommendations from National Police Commission (1981), Ribeiro (1998), Padmanabhaiah (2000), Malimath (2003) committees, a 2006 Model Police Act, and Supreme Court directives in Prakash Singh vs Union of India, reforms remain ignored or partial. The force comprises mostly undertrained, under-equipped constables (12th pass entry, lathi-armed), leading to poor incentives, low convictions, bribery, and unsafe environments hindering personal liberty and economic choices. Comprehensive state-central interventions are urged: independent politically-neutral accountability bodies and enhanced training for rule-of-law policing.

**Key points:**

- Colonial Police Act 1861 structures Indian police for citizen control, not protection, with political executives exploiting state superintendence for suppression.
- Sovereign immunity via CrPC Sections 132 and 197 prevents police prosecution without government sanction, fostering impunity as in 1739 custodial deaths in 2019.
- Supreme Court in Prakash Singh (2006) mandated reforms, but central and state governments largely failed to comply.
- Undertrained, understaffed constables armed with lathis perpetuate brutality due to flawed incentives.
- Reforms demand independent accountability bodies and better training to uphold rule of law and individual rights.

**By Sourya Banerjee**

* * *

On 26th March 2021, after months-long protests against police brutality, the city of New York, passed a law to end qualified immunity for the New York police department. In simple words, previously, qualified immunity for the officers made it extremely difficult for citizens to hold police officials accountable for their actions, even when such actions led to the death of innocent citizens and the destruction of property. While this is truly a historic moment for the United States, it immediately threw into sharp contrast the lack of any police reforms back here in India. 

**Overview of police brutality in India:** 

The unprovoked assault on [migrant labourers](https://www.thehindu.com/news/cities/Vijayawada/covid-19-lockdown-police-beat-up-migrant-workers-send-them-to-shelter-homes-later/article31599485.ece) heading home during the lockdown, unprovoked assault on people out to [buy essential groceries](https://www.telegraphindia.com/india/cops-beat-up-people-out-to-buy-sell-food-amid-coronavirus-lockdown/cid/1758903),  coustodial torture and death of [two shopkeepers in Chennai](https://www.newindianexpress.com/states/tamil-nadu/2020/jun/23/father-and-son-duo-allegedly-killed-in-police-custody-for-opening-shop-beyond-time-in-tamil-nadu-2160262.html) etc.  are among many such instances. As per a report, around 1739 individuals [died in police custody](https://www.thehindu.com/news/national/five-custodial-deaths-in-india-daily-says-report/article31928611.ece) in the year 2019. A simple Google search for “Police brutality in India” would yield enough hits to almost cover the extent of the problem. Almost, because we have to assume at least some cases go unreported. While it was one death which finally broke the proverbial camel’s back and led to massive protests for police reforms in the US of A,  both custodial deaths and encounter killings are quite common in India, the latter being cheered on as “justice” by the mobs.  

As the states entered into a second phase of lockdowns to tackle the Covid virus, similar horror stories have reemerged. 

**The Institutional Problem:**

The British administration, following the 1857 mutiny, had enacted the Police Act, 1861 in order to support the executive and political interests of the British empire. The original police force was designed to suppress any dissent. Surprisingly, or perhaps not some much in hindsight, the government of independent India continued to adopt an adversarial stance against citizen’s right to dissent using the Police Act and other supplementary legal instruments. 

Since independence, no central or state government has sincerely taken a firm stand on police reforms or tried to replace colonial laws that do not conform with India’s democratic and argumentative identity. Even as some states have enacted their own legislations they closely resemble the colonial framework and thus make the police complicit in suppressing dissent. In India, states have power of superintendence and control over the Police. However more often than not, the state political executive uses this power for political or personal reasons instead of ensuring transparency and accountability. There is a current interdependence between elected politicians and police officials which create a quid-pro-quo arrangement between the two. Such a relationship reduces the police to a mere agent of the elected government, which is often used to enforce its political will and target opposition and dissenters. 

**The Incentive Problem:** 

Not quite unlike the concept of “qualified immunity”, in India all public officials have “sovereign immunity”. [Sections 132](https://indiankanoon.org/doc/295559/) and [197](https://indiankanoon.org/doc/12704/) of the Code of Criminal Procedure 1973 prohibit the prosecution of certain categories of public officials, including any police officer, without the prior sanction of the state government. In simple words, if a state government orders the police to lathi charge and disperse a protest, and the police, while lathi charging, kills a bystander/protestor, the police official cannot be held liable unless the same government which ordered him to lathi charge the crowd decides to allow him to be punished.

[In the case of the police](https://ohrh.law.ox.ac.uk/the-prior-sanction-requirement-under-indian-public-law/), such a protection is designed to protect officers from vexatious and frivolous claims filed against them in criminal courts. In its [8th Report in 1981, the National Police Commission](https://police.py.gov.in/Police%20Commission%20reports/8th%20Police%20Commission%20report.pdf) noted the inefficacy of this protection for police officers and recommended that it be repealed. A 2009 report from Human Rights Watch entitled [‘Broken System: Dysfunction, Abuse, and Impunity in the Indian Police](https://www.hrw.org/sites/default/files/reports/india0809web.pdf)’, also recommended that the Indian parliament repeal Section 197 or, alternatively, retain the provision but delineate the boundaries of what constituted ‘official duty’. 

Apart from the [National Police Commission](https://police.py.gov.in/Police%20Commission%20reports/8th%20Police%20Commission%20report.pdf) (1981), the [Ribeiro Committee](http://humanrightsinitiative.org/old/programs/aj/police/india/initiatives/analysis_ribeiro.pdf) (1998), the [Padmanabhaiah Committee](https://www.humanrightsinitiative.org/programs/aj/police/india/initiatives/summary_padmanabhaiah.pdf) (2000), and the [Malimath Committee](https://www.mha.gov.in/sites/default/files/criminal_justice_system.pdf) (2002-03) had made further reports and recommendations on police reforms which were mostly disregarded over the years.  The Ministry of Home Affairs had set up an Expert Committee to draft a new Model Police Act in September 2005. The Committee had submitted a model Police Act on 30th October 2006. 

In 2006, the Supreme Court of India, in the case of [Prakash Singh and Others vs Union of India (Writ Petition (Civil) No.310 of 1996)](https://indiankanoon.org/doc/34932766/) ordered directives on police reform, but the central and state governments either never complied at all or only partially made efforts in that direction.

Another important aspect to be understood is that an overwhelming [majority of the police force](https://prsindia.org/policy/analytical-reports/police-reforms-india) consists of “constables”. The entry requirements for the post in most states is between 12 pass to graduation. These constables are the primary investigation and outreach for the police. Irrespective of their performance, the only promotion available to them is a “Head Constable”. Considering that they are under equipped (most police forces in India have nothing better than a lathi), under-staffed ([there is a backlog of cases in virtually every police station](https://theprint.in/india/there-can-be-no-modern-india-without-an-improved-police-force-think-tank-urges-for-reforms/509124/)), and undertrained (in terms of effective policing, use of technology, and knowledge of latest laws) it is virtually no surprise that the set up is currently poor.

As the saying goes, if you give a man a hammer, everything looks like a nail. In India, our solution to any problem is to give an undertrained man a lathi. Every problem is bound to look like one which can be solved by beating someone. This is not due to any individuals, but due to how the entire incentive structure of the system is set up. 

That is, the existing police machinery in India is designed to control citizens, not to protect them. It has resulted in the subversion of the rule of law and obstructed the growth of service-oriented policing. The repercussions of not having an effective police setup are widespread. It ranges from false convictions of minorities to demands of bribery from poor vendors, to horrible law and order leading to low prosecution and conviction rates, further leading to an unsafe societal environment which in turn impacts both personal liberty and economic choices. 

This problem, unfortunately, cannot be solved overnight and requires wide-ranging policy intervention at both the State and Central levels. This includes, but is not limited to, an independent body devoid of political influence enforcing accountability and police training,  if we wish to have a police force that functions as an agency that protects the life, liberty, and property of every citizen, even dissenting ones, and upholds the rule of law in the country. 

*Read more: [Bitcoin & NFTs: Opportunities or Ponzi schemes?](https://spontaneousorder.in/bitcoin-nfts-opportunities-or-ponzi-schemes/)*

* * *

**About Sourya Banerjee**

Sourya is the Project Associate for CCS Academy in Hyderabad. A BBA-LLB (Hons.) degree holder, Sourya used to practice law in Hyderabad before joining CCS. Sourya has also worked with numerous non-profits social organizations including Red Elephant Foundation, and Red Dot Foundation and also written on law and policy for online platforms such as LiveLaw, The Logical Indian, Qrius etc. An ex- Students for Liberty Hyderabad Local Coordinator, in his free time, Sourya runs a citizen journalism platform called Arguendo.

## Bitcoin & NFTs: Opportunities or Ponzi schemes?

Original: https://www.spontaneousorder.in/p/bitcoin-nfts-opportunities-or-ponzi-schemes

Author: Spontaneous Order

Published: 2021-06-07T18:24:59.000Z

Topics: bitcoin, nfts, cryptocurrencies, financial-innovation

> Why put all savings into traditional forms of wealth such as land or shares? Why not into non-traditional forms such as Bitcoin and NFTs (non-fungible tokens)? These have made millionaires of initial investors. I advise ordinary folk to steer clear of t..

**Summary:**

Swaminathan SA Aiyer advises ordinary folk to avoid Bitcoin and NFTs due to their high prices and significant risk of collapsing to zero, positioning them as gambles rather than stable investments. While initial investors have become millionaires, cryptocurrencies like Bitcoin suffer from extreme daily price volatility, making them unsuitable as currency—most merchants refuse them—and they are favored by drug dealers and money launderers for anonymity, leading many countries to ban or restrict them. Bitcoin's proof-of-work mining consumes vast electricity, potentially 5% of China's total where 80% occurs, prompting crackdowns, though proof-of-stake alternatives like Cardano use far less energy. Governments dislike private currencies outside their control, posing further risks. NFTs, as digital authenticity certificates, derive value from exclusivity and scarcity, akin to a $450 million Leonardo da Vinci painting; Beeple's NFT sold for $69.3 million to Tamil Nadu entrepreneur Vignesh Sundaresan, who is likely a billionaire at 32 via digital innovation. For the wealthy, a small portfolio slice in these assets may diversify amid central bank money printing. Enthusiasts see cryptocurrencies and blockchain as decentralizing finance, hedging inflation, eroding bank and government control, and promoting liberty—yet they could be giant Ponzi schemes.

**Key points:**

- Ordinary investors should steer clear of Bitcoin and NFTs due to high risk of total collapse.
- Wealthy individuals may allocate a small portfolio portion to cryptocurrencies for diversification amid fiat money expansion.
- Bitcoin mining's massive energy use, especially in China, invites regulatory crackdowns, unlike efficient proof-of-stake alternatives.
- NFTs gain value from digital scarcity and exclusivity, enabling rapid wealth creation like Vignesh Sundaresan's $69.3 million Beeple purchase.
- Cryptocurrencies promise financial decentralization and innovation but face government hostility and volatility as potential Ponzi schemes.

**By Swaminathan SA Aiyer**

* * *

Why put all savings into traditional forms of wealth such as land or shares? Why not into non-traditional forms such as Bitcoin and NFTs (non-fungible tokens)? These have made millionaires of initial investors.

I advise ordinary folk to steer clear of these exotic new digital assets. Current prices are high and the risk of complete collapse to zero is significant.

Bitcoins are especially vulnerable because of green concerns on their energy consumption. But for rich folk looking for way to diversify their portfolios, putting a small slice of their wealth into the new digital schemes may be a worthwhile gamble. Central banks have pumped trillions of dollars into the global economy, so investors with cash surpluses are seeking non-traditional assets. Both risks and potential rewards are high.

Objects are worth what people will pay for them, not any abstract concept of “true” value. A painting by Leonardo da Vinci recently sold for a record $450 million despite fears of it being a fake. Why is an exact copy of that painting worthless despite having identical aesthetic value? Because rich people pay for exclusivity —ownership of the original — and exclusivity/ scarcity create value for collectors.

Bitcoin, launched in 2009 by ‘Satoshi Nakamoto’ a pseudonym for a person or persons unknown, is a digital currency or cryptocurrency issued privately, not by a central bank like the Reserve Bank of India. Thousands of other cryptocurrencies are being created all the time, such as Ethereum, Dogecoin, Cardano and Polkadot.

In theory these can be used for payments instead of cash, credit cards or cheques, and could save sums made by intermediaries like banks. In practice cryptocurrency prices vary so hugely from day to day that they represent gambles, not currency. In theory you can buy and sell in cryptocurrencies, but just ask your servant or grocer, and they will refuse such payment. Major Bitcoin transactions are done by drug dealers and money launderers because of the encrypted anonymity. This is one reason cryptocurrencies are banned or limited by many countries.

Internet enthusiasts say Bitcoin and blockchain (a public distributed ledger on which Bitcoin runs) represent the future, and that traditional monetary systems are dying dinosaurs. Cryptocurrencies are decentralised systems that cannot be manipulated by individuals or institutions and have inbuilt checks on the amount that can be issued, providing a hedge against inflation. Some idealists think cryptocurrencies free humans from unwarranted control by central banks and governments, promote liberty and innovation, and democratise the financial system. The grip of banks and investment banks on money and politicians will erode away. It will also provide investors a new asset class to diversify into.

However, cryptocurrencies like Bitcoin are “proof-of-work” currencies where the validity of transactions is confirmed by “miners” competing to solve complex equations. Miners are decentralised individuals or groups using heavy duty computers, and winners are rewarded with a few Bitcoins each. This “proof-of-work” mining uses huge amounts of electricity. It threatens to consume 5% of all electricity in China, where nearly 80% of mining takes place. So, China has cracked down on Bitcoin and its like, threatening their future. However other cryptocurrencies like Cardano and Polkadot have a different “proof of stake” technology using tiny amounts of electricity. They may survive even if Bitcoin sinks.

Governments do not like the idea of private currencies beyond their control. They will probably make cryptocurrencies illegal or very expensive to deal with in practice. That remains a risk for those investing in cryptocurrencies.

Very different is an NFT, which is little more than a certificate of authenticity of anything digital — it can be a song, writing, or drawing. It can be replicated by others, but only the owner will have the “original” token. Most NFTs are for works of art. The NFT for a collage of paintings by US artist Beeple was sold recently for a whopping $69.3 million. The purchaser was a young digital entrepreneur from Tamil Nadu, Vignesh Sundaresan. He says the NFT represents less than a tenth of his assets, meaning he is probably a billionaire.

Gone are the days when industrial empires were gradually built with the help of inherited money, muscle, and influence. You can now innovate digitally to become a billionaire by the age of 32, like Sundaresan. He may have pioneered a new form of wealth in NFTs.

You could call this a huge democratisation of wealth, enabling youngsters with no inherited wealth or networks to beat old wealth by creating, buying, and selling new ideas and concepts. You could also call this one more giant Ponzi scheme that nobody fully understands today. Time will tell.

*Read more: [Lives Vs Livelihoods: The story of women street vendors in Delhi](https://spontaneousorder.in/lives-vs-livelihoods-the-story-of-women-street-vendors-in-delhi/)*

*This article was originally published in the [Times of India](https://timesofindia.indiatimes.com/blogs/Swaminomics/bitcoin-nfts-opportunities-or-ponzi-schemes/) on June 5, 2021.*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Lives Vs Livelihoods: The story of women street vendors in Delhi

Original: https://www.spontaneousorder.in/p/lives-vs-livelihoods-the-story-of-women-street-vendors-in-delhi

Author: Spontaneous Order

Published: 2021-06-04T10:21:02.000Z

Topics: street-vendors, lockdown-impacts, informal-economy, women-entrepreneurs

> The lockdown has delivered a deadly punch to the informal sector. The empty streets are eerily quiet as the hustlers, hawkers, buyers and sellers’ usual energy has melted away. The lockdown has shut down the largest segment of self-employed men and wome

**Summary:**

The COVID-19 lockdowns have devastated Delhi's street vendors, the embodiment of India's ineffectively harnessed entrepreneurial spirit in the informal sector, with a stark gender imbalance affecting women vendors hardest. SEWA Delhi estimates 3 lakh vendors citywide, while MCD records 1.25 lakh, 30% women. A Centre for Civil Society discussion with 24 women vendors revealed 2021 lockdowns far worse than 2020: no market reopening efforts, ration access, or e-passes; male vendors infiltrated women-only 'Mahila bazar', forcing bribes; and PM SVANidhi loans up to Rs 10,000 became unrepayable amid prolonged shutdowns, customer shifts to online grocery (Statista), and lost vending spots, driving women to high-interest private lenders over rigid government schemes. Mistrust in authorities prevails, with neighbors unable to help. Women face compounded burdens: doubled domestic workloads, rising violence, and battles for survival without relief. Lata from SEWA urges including vendor voices in market-opening discussions, prioritizing their spaces equally. The piece underscores the second wave's disproportionate toll on the poorest women, critiquing inadequate state interventions that hinder livelihoods.

**Key points:**

- Delhi has around 3 lakh street vendors per SEWA, with MCD counting 1.25 lakh where 30% are women, facing severe gender-disparate lockdown impacts.
- 2021 lockdowns lacked 2020's aids like e-passes, ration distribution, and market precautions, worsening vendors' plight with market infiltrations and bribes.
- PM SVANidhi loans of up to Rs 10,000 proved burdensome as shutdowns erased income, pushing women to private lenders despite high rates.
- Street vendors' voices must be included in authorities' market-reopening discussions to treat their spaces equitably.

**By Jyotsana Awasthi**

* * *

The lockdown has delivered a deadly punch to the informal sector. The empty streets are eerily quiet as the hustlers, hawkers, buyers and sellers’ usual energy has melted away. The lockdown has shut down the largest segment of self-employed men and women who personify India’s ineffectively harnessed entrepreneurial spirit – street vendors. However, even in this segment, a gender imbalance is visible.

According to 2018 data by [SEWA Delhi](http://www.businessworld.in/article/Life-Of-Women-Street-Vendors-Protection-Of-Livelihood-And-Need-For-Regulation/24-12-2018-165482/), there are close to 3 lakh street vendors in Delhi. However, the Municipal Corporation of Delhi’s official figure accounts for only 1.25 lakh vendors, of which 30% are said to be women. Centre for Civil Society recently held a discussion with 24 women street vendors from Delhi, and uncovered how Covid-19 has impacted them.

A contentious point of the discussion was how the 2020 and 2021 lockdowns have been starkly different. Seema, a vendor from Raghubir Nagar said, *“The situation in 2020 was different. Active efforts were made to open the markets while practicing precautions. The government too came to aid at a level. Quarantining was possible because ration was made available at different locations throughout the city. However, things this time around can’t be helped. Our condition is worse than ever before and whom should I even reach out to?”*

Stressing the situation further Seema adds, *“There is a prevailing mistrust towards the authority. In the 2020 lockdown, we were able to ask around for money in our neighbourhood when we needed it. However, this year the situation is so bad that no one is able to help. These are terrible times.”* 

COVID’s wave in 2021 has deteriorated the posse in unforeseeable ways. Lata from SEWA stressed the circumstances, *“Until last year we had ‘Mahila bazar’ was up and running even when the pandemic was at its prime. In 2021 because of strict shut down at other markets, male vendors started to infiltrate our space and the authorities cracked down on us. To sustain ourselves, us women were left with no choice but to offer bribes but that didn’t last long either and we have nowhere to go anymore.”*

Lata reminded us that 2020 also had the provision of accessing e-passes online to continue street vending but those passes don’t stand any longer. Along with e-passes, [PM SVANidhi scheme](https://pmsvanidhi.mohua.gov.in/) was another initiative by the government to offer relief to the community during uncertain times like these. Under the scheme, vendors could avail a working capital loan of up to Rs 10,000, repayable in monthly instalments in a year. Even though the scheme has received a tremendous response from vendors across the country, repayment became a problem for many women. Given that the markets have remained shut for many months and only open for a few, the existing customer base, location of vending and other factors which kept their businesses a going concern were all gone. Moreover, many people shifted to online ordering as well from the fear of catching the virus if they stepped out. “*Online grocery purchases saw a surge during the coronavirus (COVID-19) pandemic in India*” says a report by [Statista](https://www.statista.com/statistics/1132054/india-online-grocery-delivery-during-covid19-by-company/). In such a situation, those who had managed to get loans under the SVANidhi Scheme last year, have now found themselves in a tough position to pay it back. Some women have even had to take separate loans to pay the government back as there have been no relief efforts from the government in this regard.

Dr Shinee, Research Analyst at Institute of Social Studies Trust points out in her research, *“Due to a strictly defined time limit the vendors can’t escape these hardships. In fact, street vendors prefer private money lenders because their inability to make returns are more effectively heard by them despite the skyrocketing interest rates issued on these loans.”* 

Talking about reasonable amends that can be made to make life easier for Street Vendors in India, Lata suggests, *“The authorities and other organisations are constantly working to open up other market spaces.”* She said that it’s good that discussions about opening up markets and businesses are taking place, but it’s important to include street vendor voices in them, and give equal importance to vendor markets as other markets. 

The discussion with women street vendors of Delhi highlighted just how severe the second wave of the pandemic has been, and who it has impacted the most; the poorest of the poor. Since the lockdown, workload of working women has increased as domestic responsibilities have risen, with families staying indoors. Along with battling increasing domestic violence ([owed to the lockdown](https://theprint.in/india/increased-work-domestic-abuse-how-covid-lockdown-was-especially-hard-on-women-in-india/601328/)), women street vendors are fighting a battle for their lives and livelihoods, with little relief from the government.

*Read More: [https://spontaneousorder.in/the-unsung-heroes-of-waste-management/](https://spontaneousorder.in/the-unsung-heroes-of-waste-management/)*

* * *

**About Jyotsana Awasthi**

## The Unsung Heroes of Waste Management

Original: https://www.spontaneousorder.in/p/the-unsung-heroes-of-waste-management

Author: Spontaneous Order

Published: 2021-06-02T10:43:24.000Z

Topics: waste-management, waste-pickers, sector-formalization, ulb-reform

> Ever since the Government of India came out with the Solid Waste Management Rules (2016) and the Plastic Waste Management Rules (2016) which decentralized the process of waste management, especially in towns and cities, and provided more responsibilitie..

**Summary:**

Despite India's Solid Waste Management Rules (2016) and Swachh Bharat initiative, urban waste management shows minimal improvement, with urban local bodies (ULBs) spending 60-70% of budgets on collection and segregation, 20-30% on transportation, less than 5% on essential treatment and disposal, and 30-50% on street cleansing alone. Waste collection efficiency stands at 70-90% in metro cities but falls below 50% in smaller ones, highlighting the critical yet undervalued role of informal waste pickers who lack government benefits, face stigma, violence, and livelihood disruptions like during COVID lockdowns. From a classical-liberal perspective, formalizing this sector through self-employed cooperatives like Pune's SWaCH—which manages 8,000 trained collectors via a municipal MoU—offers a market-friendly path: provide daily wages, unemployment benefits, legal status, protective gear, and performance incentives such as house-to-house collection fees and direct cash transfers for top performers. This streamlines collection and segregation, cuts ULB costs, employs more workers, frees funds for disposal to curb pollution, and integrates pickers into society with occupational identity and welfare access, ultimately enhancing efficiency over state-centric approaches.

**Key points:**

- ULBs must formalize waste pickers into cooperatives like SWaCH, providing wages, benefits, and training to boost collection efficiency from below 50% in small cities to metro levels.
- Shift to house-to-house collection with fees and performance-based cash incentives to replace inefficient street sweeping and motivate better segregation.
- Grant legal recognition, protective gear, and societal respect to waste collectors to reduce harassment and enable access to government schemes.
- Reallocate freed-up ULB budgets from collection (60-70%) toward treatment and disposal to prevent environmental pollution.

**By Arjun Gargeyas**

* * *

Ever since the Government of India came out with the [Solid Waste Management Rules (2016)](https://bbmp.gov.in/documents/SWM-Rules-2016.pdf) and the [Plastic Waste Management Rules (2016)](http://www.mppcb.nic.in/proc/Plastic%20Waste%20Management%20Rules,%202016%20English.pdf) which decentralized the process of waste management, especially in towns and cities, and provided more responsibilities to the urban local bodies (ULBs), there was a certain expectation of these legislations to improve the process of waste management across the country. However, as seen by Swachh Bharat’s initiative, Swachh Survekshan, which surveys the hygienic and cleanliness condition of cities across the country, there has only been minuscule improvement in the process, especially in metropolitan cities.

As per the 12th Schedule of the Constitution, which was added by the 74th Constitution Amendment Act of 1992, it is the responsibility of the ULBs and municipal authorities to ensure the effective running of the process of waste management and maintaining the cleanliness of towns and cities. With a significant increase in the urban population across the country, there is a need for creating an efficient method for waste management. It is seen that the ULBs spend a [majority of their funds (around 60% to 70%) on collection and segregation of wastes alone](https://www.orfonline.org/research/solid-waste-management-in-urban-india-imperatives-for-improvement-77129/), while only 20% to 30% is spent on transportation and less than 5% is spent on treatment and disposal which is most essential step to prevent environmental pollution. There is further evidence that ULBs spend almost 30% to 50% of their waste management budgets on street cleansing alone. 

It is imperative that the process of collection and segregation of wastes must be streamlined by the ULBs in order to manage the scientific process of waste disposal. This is where the role of the waste collectors comes into the limelight with their contribution proving to be of utmost importance in the process of waste collection and segregation.  The current [waste collection efficiency for major Indian metro cities](https://www.researchgate.net/publication/6394075_Municipal_solid_waste_management_in_Indian_cities_-_A_review) ranges from around 70 to 90% while it drops below 50% for the smaller cities in the country. The recognition provided, along with the organization of these workers can improve the efficiency in the collection and segregation of wastes along with helping local governments perform better on the waste management front.

**Formalization of the Sector** 

Currently, waste pickers in the cities are a loosely based group of workers who are part of the informal sector of the economy. Along with the ones employed by the municipal corporations and authorities, there are quite a few waste pickers who indulge in picking scrap and selling them for money to earn their daily wages. These waste pickers do not get any benefits from the government and are left to fend for themselves in most cases. The incessant curfews and lockdowns due to the Covid-19 pandemic have thrown their lives into disarray with no means of livelihood. Hence, there should be a formal structure of employment of waste pickers in the cities by the concerned authorities and ensure each of them are [provided with daily wages and unemployment benefits](https://vidhilegalpolicy.in/research/waste-pickers-welfare-law-in-karnataka/). Civil society organisations can play a major role in this process as seen in Pune. 

The concept of a self-employed co-operative organization, ‘SWaCH’, is currently working in Pune. The Pune Municipal Corporation (PMC) entered into a MoU with the organization for the maintenance of over 8000 waste collectors in the city who are trained in waste collection and segregation to improve the efficiency of the waste management process. 

**Recognition and Integration**

It is not news that the Indian society does not accord the same respect for all types of employment and it is a proven fact that these waste pickers do not get the necessary admiration they deserve from either the State or the society as a whole. There has been cases of violence perpetrated against these social workers along with the [constant harassment and humiliation meted out to them](https://indianexpress.com/article/cities/bangalore/despite-toiling-through-lockdown-and-pandemic-bengaluru-waste-pickers-claim-stigma-7283641/) by the general public. It is also seen that even the government employed personnel are not provided with necessary protective equipment and gear when handling toxic wastes and are constantly exposed to shambolic hygienic conditions.

There should be a mechanism for the State to give its due recognition for these hardworking social workers and gradually integrate them into the society. Providing legal status and protection to the group of waste collectors and addressing any institutional and financial issues which are raised pertaining to the welfare of the workers should be of primary importance for the State to improve the current condition of the process of waste collection in the cities. An occupational identity and access to government welfare schemes will make it easy for local authorities to reduce its spending and get more people employed in the process of waste collection and segregation which would ultimately improve the process of treatment and disposal of wastes.

**Monetary Compensation** 

The waste pickers who are employed by the government are all daily wage labourers who depend on each day’s work to run their families. The others, not employed by the government, scrape through each day depending on the waste they collect each day to sell. It is known that every person responds to incentives and generally, the prospects of monetary benefits will attract better quality of work and engage more people in the field. The focus should be on [incentivizing the waste pickers to perform better](https://www.thenewsminute.com/article/oppressed-and-unrecognised-life-waste-pickers-crucial-india-s-sanitation-72426) and do their work more diligently along with providing them financial security. 

Replacing the existing form of primary collection of wastes through street sweeping by house to house collection of wastes with a fee given for each house’s waste collection will help to create a stable financial situation for these workers. Direct cash benefit transfers and providing an extra monetary compensation for the best performing waste collectors under the ULB will help in making the process of waste segregation more efficient and streamlined in each city. This will also ensure an occupational identity for these workers and legitimise the role of the waste collector by the government.

Despite the Swachh Bharat initiative which was launched in 2016, there is a significant need for improving the process of waste management, especially in cities. The primacy of waste collection and segregation has emphasised on the need for waste pickers and collectors and their role in society. Addressing the issue at the onset of waste generation i.e. proper collection and segregation will help in allotment of more funds towards the process of treatment and disposal of these wastes. It is absolutely essential for the State and the general public to recognise the importance of these workers and help them attain a respectable role in society.  

*Read More : [https://spontaneousorder.in/cleaner-and-now-cheaper-solar-power-beats-coal](https://spontaneousorder.in/cleaner-and-now-cheaper-solar-power-beats-coal)*

* * *

**About Arjun Gargeyas**

Arjun Gargeyas is currently a 23-year-old engineer working as a Consulting Engineer for Cisco Systems. An Electronics and Communication graduate, he is a bibliophile with a soft spot for History, Economics, and World Affairs books. Being a trekker and mountaineer, he aims to combine his scientific background with his love for the social sciences to become an Energy and Environmental Policy Analyst.

## Cleaner, and now cheaper: Solar power beats coal

Original: https://www.spontaneousorder.in/p/cleaner-and-now-cheaper-solar-power-beats-coal-2

Author: Spontaneous Order

Published: 2021-05-31T10:05:24.000Z

Topics: solar-power, renewable-energy, energy-policy, power-financing

> The Covid crisis has diverted attention from a major breakthrough that should leave all smiling. The latest auction for 400 MW of solar power, including storage, has been won by ReNew Power with a levelised tariff of Rs 3.52/unit over 15 years. The equi..

**Summary:**

Solar power with storage has achieved a breakthrough by winning a 400 MW auction at a levelised tariff of Rs 3.52 per unit over 15 years, beating coal-based thermal power's Rs 4.5 per unit even without coal taxes or cesses, enabling a market-driven shift to renewables without subsidies. This deal by ReNew Power includes lithium-ion batteries for 80% annual capacity utilisation (not less than 70% monthly), matching thermal efficiency while being cheaper, unlike earlier auctions like Bhadla's Rs 2.44 per unit without storage. From a classical-liberal viewpoint, falling solar panel prices and storage advancements make solar the future of bulk power generation, with coal limited to backup and old inefficient plants replaced by efficient ones, implying stable emissions without carbon taxes. Thermal plants' forced back-down to 55-58% utilisation from 75% necessitates new tariff formulas for idled capacity. High Indian interest rates of 10-11% (vs 4% in Middle East) inflate costs; cheaper finance via World Bank loans to PFC/REC, guarantees, BRICS Bank, and AIIB could drop tariffs to Rs 2 per unit, boosting competitiveness.

**Key points:**

- ReNew Power won 400 MW solar-plus-storage at Rs 3.52/unit, cheaper than thermal power's Rs 4.5/unit without subsidies.
- Solar with storage achieves 80% capacity utilisation, matching thermal plants economically.
- India's shift to solar requires no carbon taxes; coal serves only as backup with stable emissions.
- High 10-11% interest rates burden solar; tap World Bank loans and guarantees for cheaper finance to reach Rs 2/unit.

**By Swaminathan SA Aiyer**

* * *

The Covid crisis has diverted attention from a major breakthrough that should leave all smiling. The latest auction for 400 MW of solar power, including storage, has been won by ReNew Power with a levelised tariff of Rs 3.52/unit over 15 years. The equivalent thermal power tariff would have been closer to Rs 4.5/unit. Solar energy has beaten coal-based power hollow and would do so even if taxes and cesses on coal were lifted. The bulk of future power generation can be solar without subsidies.

Coal-based thermal power will still be needed as backup, but very little new capacity is required. Meanwhile inefficient old thermal plants will be replaced by efficient new ones. That implies a virtual standstill in future emissions of carbon dioxide, sulphur, mercury, particulate matter and other pollutants. India does not need additional carbon taxes to induce a shift to renewables. The shift is already here.

Solar power has looked a bright prospect for years since the price of solar panels keeps falling. However, solar power is typically available only 30% of the time — it is not available at night or when clouds and pollution block the sun. However, thermal plants can work 80% of the time.

During the day, India now has excess power capacity. Solar generation is given priority, while thermal stations have to back down till sunset. Priority to solar power makes economic sense since it entails no running costs, whereas thermal power entails fuel costs. But thermal plants that once ran 75% of the time have been forced to back down to just 55-58% to accommodate rising solar production. This hidden cost of solar power cannot be borne fully by the thermal sector, which needs a new tariff formula to cover capital costs on generation and transmission when forcibly idled.

In the giant 1,200 MW Bhadla solar park in Rajasthan, the winning auction in 2018 was just Rs 2.44/unit. But it had no provision for storage, something experts estimated would add Rs 2/unit to the tariff. That meant solar power was not cheaper than thermal power and could not be switched on and off at will, as thermal plants could.

However, the new 400 MW deal won by ReNew Power includes enough storage to ensure 80% capacity utilisation over a year and not less than 70% in any month. This is not quite 24/7 power, but is as efficient as thermal power and much cheaper. That is why it is a breakthrough.

ReNew Power will be using lithium-ion storage batteries to store excess power during the day and releasing it later to achieve its capacity target. Elon Musk of Tesla plans to mass produce lithium-ion batteries on a grand scale to greatly lower their prices. While designed primarily for electric cars, such batteries also make solar storage cheap.

The biggest problem Indian solar companies face is the high rate of interest. This matters a lot in an industry with high capital costs. RBI has lowered its lending rate, but banks are too risk-averse to lend to solar companies, which still pay 10-11% interest on the bulk of their borrowing from public sector entities like Power Finance Corporation and Rural Electrification Corporation. By contrast, solar plants in the Middle East can borrow at just 4% in their own currencies. If Indian companies could access money as cheaply, the cost of power plus storage could fall to just Rs 2/unit, transforming the competitiveness of Indian industry. India must aim for this.

The World Bank no longer lends for coal-based plants but is keen on renewables. It cannot lend directly to private sector companies. One solution is to negotiate massive loans from the World Bank to Power Finance Corporation and Rural Electrification Corporation, earmarked for on-lending to the solar companies with a small mark-up.

World Bank loans to India can be repayable over 19 years with a 5-year moratorium and interest at LIBOR (now just 0.17% in dollars) plus 1.4%. Small loans are also available from the Bank’s Clean Technology Fund and IFC, the Bank’s private sector lending arm. But past Bank loans have been less than $100 million – peanuts for a solar industry that now needs billions. The Bank should step up solar lending hugely.

Problem: this could hit limits on Bank lending to any one country. So, it can be supplemented by Bank’s power to guarantee commercial loans to the private sector, a power grossly underutilized. That can slash the interest rate. New Institutions like the BRICS Bank and Asian Infrastructure Investment Bank can be tapped too. That is mostly Chinese money, but so what?

*Read more : [https://spontaneousorder.in/english-education-and-employment-connecting-the-dots/](https://spontaneousorder.in/english-education-and-employment-connecting-the-dots/)*

*This article was originally published on 24th May 2020 on [swaminomics.org](http://swaminomics.org/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## English, Education and Employment: Connecting the dots

Original: https://www.spontaneousorder.in/p/english-education-and-employment-connecting-the-dots

Author: Spontaneous Order

Published: 2021-05-28T12:50:49.000Z

Topics: english-education, budget-private-schools, education-access, spoken-english

> Post liberalization, we’ve often come across the statement that “English is the language of the elite” However, with each passing day I feel this notion changing in ways that are not easy to comprehend. We come from a nation that has more than 19,50

**Summary:**

Post-liberalization India sees English evolving from an elite language to a necessity for low-income students aspiring to global opportunities and employment, driven by parental push for quality education. Despite over 19,500 mother tongues, parents from rural and low-income backgrounds enroll children in English-medium schools for job prospects, communication, and confidence. However, only 10.4% of government schools offer English as a subject, creating a dilemma unaffordable for many private options. Budget Private Schools (BPS) emerge as affordable revolutionaries, with 42% of unaided private schools using English as the medium of instruction, narrowing the public-private education gap through community-based access. The Centre for Civil Society's Project Bolo English, launched in July 2020, addresses spoken English gaps in grammar, vocabulary, and confidence via free premium mobile apps, reaching over 30,000 students (1,200 completing a CEFR module) in Haryana, Tamil Nadu, and Telangana amid the pandemic. Teachers, parents, principals, and associations enable this two-way learning, proving students lack not potential but nurturing environments. English is framed as a vital life skill linking education to employment, urging classical-liberal support for such market-driven interventions over state monopolies.

**Key points:**

- Only 10.4% of government schools offer English, pushing low-income parents toward Budget Private Schools where 42% use English as the medium.
- Project Bolo English has provided free app access to over 30,000 students since July 2020, with 1,200 completing a CEFR module despite the pandemic.
- Budget Private Schools improve education quality and access affordably for low-income families, acting as silent revolutionaries.
- Teachers and parental aspirations create nurturing environments to unlock student potential in spoken English for employment.
- English proficiency determines wages, expression, and confidence, making it a necessity beyond an academic subject.

**By Simran Gulati**

* * *

Post liberalization, we’ve often come across the statement that “English is the language of the elite” However, with each passing day I feel this notion changing in ways that are not easy to comprehend. We come from a nation that has more than 19,500 mother languages but somehow every student who learns a vernacular language, be it from a multistoried private school or a small government school across the street has the dream of studying abroad and becoming a global citizen for which English becomes a necessity.

Perhaps, this dream might sound unrealistic at first for those coming from low-income backgrounds, but these aspirations are supported by parents who wish to impart quality education to their child. A term used quite often, the aspiration of providing ‘Quality Education’ to their child is what pushes them to look beyond their conventional beliefs and motivates them to break our boundaries.

The first step that a parent takes to cross that boundary and move beyond their comfort zone is to enroll their child into an English-medium school. Despite being from a rural background, parents want their students to be fluent in english as it opens a window of job opportunities, helps them to communicate with others fluently and gives them a sense of confidence that is unparalleled. However, only 10.4% of the government schools offer English as a subject. This is where the dilemma arises for those who cannot afford to send their students to highly maintained private schools, only to realize that Budget Private Schools is another alternative in the Indian education system.

The name “Budget Private Schools” might look like an oxymoron because we often don’t associate budget with private. The common Indian’s notion of privatization in every sphere is their lack of affordability to avail those services. However, these schools have played a critical role in improving education quality and access at an affordable cost, especially for children coming from low income families. Since their establishment, Budget Private Schools did not receive the recognition that they deserved, but with higher enrollment rates in such schools, we see the gap between public and private education reducing as they act as silent revolutionaries to provide community based, approachable learning to their students with the best interest in their minds.

My familiarity with Budget Private Schools began as I stepped foot into a project run by the Centre for Civil Society called “Project Bolo English.” The project aims to equip students from low income backgrounds with spoken English, by providing them free access to premium mobile applications. In my limited interactions with students who had the dreams of becoming confident English speakers, I came to one simple conclusion- the problem is not lack of potential, but rather the lack of a nurturing environment to maximize it.

Approximately 42% of unaided private schools provide English as the medium of instruction, however students enrolled in Budget Private Schools often struggle in terms of Grammar, Vocabulary and more particularly the confidence to speak English. These problems highlighted the need for a Project like Bolo English as an external intervention to help students in their journey towards Spoken English. The project was found of paramount importance by State Associations as well as school principals in terms of making learning English as easy and fun as possible. As the team continuously engaged with students and their parents, we could see a sense of pride and confidence developing in their personality.

Since its launch in July 2020, the project has provided access to the application to more than 30,000 students with nearly 1200 students completing 1 CEFR module on the application. The project has had a strong footprint in the states of Haryana, Tamil Nadu and Telangana with continuous engagement through Student Cafes, Webinars and Outreach events.

However, the impact that we achieved in a period of one year despite the pandemic turning over every effort was due to the teachers: I like to describe them as heroes who don’t wear capes. Despite having the most tedious schedule of managing the household and not getting their salaries for months, they did not leave a single opportunity to follow-up with the students and ensure their interest in the project.

We live in an era where the level of English determines the wage you receive,the way you express, and the way you showcase yourself. Project Bolo English is now on a mission to ensure that every student receives the “privilege” of speaking English which is now a necessity.

To conclude, I do not believe that students are containers into whom knowledge must be put. It is a two-way learning street that requires educators to refigure themselves and mould themselves into a situation similar to their students. As we move forward with the support of Association Leaders, Principals, Teachers and parents, and with the realization that English is not just an academic discipline but a life skill, we are ready to learn and unlearn along the way to support a child’s journey from Education to Employment.

* * *

**About Simran Gulati**

Simran Gulati has graduated from Hansraj College, University of Delhi who currently works as a Communications and Outreach Associate at the Centre for Civil Society. She has previously interned with UNDP India, Tata Trusts and other development organizations exploring fields such as Education, Inclusive Growth and Public Health. She is on a mission to leverage the power of communications and advocacy to speak the voices of the unseen, with a keen enthusiasm to understand both; the challenges and blessings of development.

## The Future of Virtual Rallies in a Post-Pandemic World

Original: https://www.spontaneousorder.in/p/the-future-of-virtual-rallies-in-a-post-pandemic-world

Author: Spontaneous Order

Published: 2021-05-26T12:38:52.000Z

Topics: virtual-rallies, field-rallies, digital-divide, indian-elections

> National elections in India, the world’s largest democracy, are an exercise of epic proportions. The lifeblood of election campaigns is political rallies meant to mobilize the public. Such rallies allow politicians to communicate directly with the publi

**Summary:**

The COVID-19 pandemic accelerated the shift from massive physical rallies to virtual ones in Indian and global elections, exemplified by South Korea's truck-screen telecasts and India's BJP events like Amit Shah's June 2020 Bihar rally drawing 14 lakh viewers on YouTube, Facebook, and Zoom. Virtual rallies offer classical-liberal advantages: cost-effectiveness democratizing politics for smaller parties by slashing expenses on travel and setups; nationwide reach without location constraints; preservation of civic life by avoiding traffic jams, noise, and school closures; freedom from permits and suppression, as in Hong Kong's pro-democracy efforts; and transparency reducing 'hired crowds' and corruption. Yet field rallies persist for their festival-like camaraderie, unignorable street disruption signaling strength (e.g., Mamata Banerjee's virtual Martyrs’ Day lacking 2014 Kolkata spectacle), and addressing India's 36% internet penetration and digital divide favoring resourced parties like BJP's 9,500 IT cells and 72,000 WhatsApp groups. Virtual formats risk sabotage, suit scripted speakers less (e.g., Trump, Modi), amplify glitches, and challenge election authorities on misinformation. Concluding from a free-market lens, with 2019 Lok Sabha costs at Rs 60,000 crore (double 2014), virtual rallies warrant permanence for efficiency, savings redirection, and targeted voter info, provided safeguards ensure truth in digital democracy.

**Key points:**

- Virtual rallies drastically cut costs, potentially saving billions from India's Rs 60,000 crore 2019 election spend and leveling the field for smaller parties.
- They eliminate civic disruptions like traffic jams and noise pollution caused by field rallies.
- India's 36% internet penetration and digital divide hinder virtual rallies' equity, benefiting national parties like BJP with extensive digital infrastructure.
- Field rallies endure for their emotional solidarity and visual optics that virtual formats cannot replicate.
- Election authorities must develop rules to combat virtual misinformation, which spreads faster than in physical campaigns.

**By Tarini Patel**

* * *

[

![Outlook India Photo Gallery - Trinamool Congress (TMC)](https://lh3.googleusercontent.com/k9XInIUrdZTnj--4DbBjEK1DVAY_AMwhw3RNX58HStIM7ROy8A_8d2J8G2iCP5_6rKSGgaE_HZSnFBhFtInHEHLfK4bXXfHuJ3JX8ZVaeE2u0gafriAJZ4bxrjvu5Ya1lmSVxYc "Outlook India Photo Gallery - Trinamool Congress (TMC)")



](https://lh3.googleusercontent.com/k9XInIUrdZTnj--4DbBjEK1DVAY_AMwhw3RNX58HStIM7ROy8A_8d2J8G2iCP5_6rKSGgaE_HZSnFBhFtInHEHLfK4bXXfHuJ3JX8ZVaeE2u0gafriAJZ4bxrjvu5Ya1lmSVxYc)

*All India Trinamool Congress Martyrs’ Day Rally in Kolkata, 2014*

National elections in India, the world’s largest democracy, are an exercise of epic proportions. The lifeblood of election campaigns is political rallies meant to mobilize the public. Such rallies allow politicians to communicate directly with the public. These outreach efforts involve gathering huge crowds at a large venue to listen to rousing speeches by candidates and other leaders of political parties to either tout their achievements since taking office or criticize the opposition. Whether a party is in power or in the opposition, both promise to come good on various goals if elected. Any campaign manager’s mandate is simple: use rallies to generate media attention, instill confidence in the party cadre, persuade undecided voters, and, if possible, switch the allegiance of those supporting the opposition. 

This was the scenario in normal times. The COVID-19 pandemic has led to numerous changes, including how politicians cultivate support among voters. Social distancing restrictions have resulted in mass meetings being replaced by innovative forms of virtual rallies across the world. The 2020 South Korean legislative election is a case study on how election campaigns successfully adapted to the new reality and ran live online events during the pandemic. A country known for loud, large street rallies saw political candidates holding quieter, small virtual rallies instead. With giant screens installed on trucks, candidates reached out to citizens through live telecasts of their speeches. Similarly, in the US, France, and Sri Lanka, political parties have leaned on digital platforms to connect with their constituents. Political parties are using digital platforms like Zoom, Skype, and WhatsApp group calls to conduct internal meetings; and Facebook Live and YouTube Live for reaching wider audiences in real-time.

### **Do virtual rallies offer any advantages over field rallies?**

[

![Villagers of Chak Chilla 'swell with pride' taking part in BJP's virtual  rally- The New Indian Express](https://lh5.googleusercontent.com/IW8j4NMusrC7CEQ7AqBI6iblTST2rMTvi5eptfxcHz-KKCEpAGH2ueZ6i1Mle29mthFABojD9lVnZNkVrZNabjHcDnuqXBj6sNgVrH08XRZu_qFHPDZFKGzjxZybwuFUC6M5AcA "Villagers of Chak Chilla 'swell with pride' taking part in BJP's virtual  rally- The New Indian Express")



](https://lh5.googleusercontent.com/IW8j4NMusrC7CEQ7AqBI6iblTST2rMTvi5eptfxcHz-KKCEpAGH2ueZ6i1Mle29mthFABojD9lVnZNkVrZNabjHcDnuqXBj6sNgVrH08XRZu_qFHPDZFKGzjxZybwuFUC6M5AcA)

*Villagers in Chak Chilla village in Delhi attending a BJP virtual rally in 2020*

Virtual rallies offer many advantages, albeit in areas with good internet connectivity. First, the location of the participants—candidates and the public—is not a constraint. From any location, candidates can reach out to large crowds in multiple venues in real-time. Depending on the speaker’s mass appeal, the audience can span an entire city, region, or country. Social media sites such as Facebook and Twitter enable organizers to publicize the event and amplify the message quickly. 

Second, virtual rallies are cost effective, which can democratize the political process. Virtual rallies offer a relatively cheap way to build and sustain a political campaign. The relatively lower cost of organizing such rallies levels the playing field, particularly for smaller parties with budgetary constraints. In countries with high internet penetration, candidates can reach out to voters without spending on travel, entourage, and election paraphernalia associated with field rallies. All that is needed to hold a virtual rally is a camera, microphone, internet connectivity, and social media presence to publicize the event. At venues in a constituency, one needs a laptop and a giant LED screen or alternatively, a television. Further, with real-time and easy access to voter data and analytics, candidates can get accurate insights into voter attitudes and political beliefs, enabling them to run target advertising. Also, the use of online advertisements is cheaper than even the briefest airtime on TV. Moreover, candidates can see the impact of their virtual speech based on comments and likes received by the event. Field rallies do not offer any of these valuable low-cost features. Bharatiya Janata Party (BJP) leader Amit Shah’s Bihar virtual rally in June 2020 galvanized party workers in an election cycle during the pandemic. The party claimed that more than 14 lakh viewers watched Shah’s rally on online platforms such as YouTube, Facebook, and Zoom.  

Third, virtual rallies preserve the quality of life. Field rallies disturb the community and economic activity in and around the venue. Large field rallies cause traffic jams, create noise pollution, and generate waste. Schools and colleges are often forced to close because of the disruption. In contrast, virtual rallies are attended by small groups in public spaces or from the privacy of individual spaces without disturbing civic life. 

Fourth, virtual rallies offer organizers freedom from bureaucratic hurdles and suppression. Organizers do not have to worry about seeking municipal permits to assemble people. The success of this exemption was most recently evident in the pro-democracy movement in Hong Kong when government officials banned public meetings in March 2020. Virtual rallies helped demonstrators keep the movement alive during the lockdown and escape violent police crackdowns. 

Fifth, virtual rallies enable a more transparent political participation process. The political future of a candidate does not depend on the visuals of a large physical audience. Therefore, organizers do not have to resort to bussing ‘hired’ crowds to the venue or forcing government employees, students, and locals to occupy seats. This independence from fake optics can weaken corruption and the culture of reciprocity of favors in political campaigns.

### **So why do field rallies still endure?**

Despite the many advantages of virtual rallies, the fact is that field rallies have endured for several reasons. 

First, well-organized, large field rallies exude a celebratory mood of a *mela* or a festival. The camaraderie among strangers brought together by political kinship has the potential to build a groundswell of support for the political party and candidate. Even with the most dazzling digital add-ons, a virtual rally lacks the sensory cues of a mass gathering. It cannot generate comparable energy and a sense of solidarity among viewers. Moreover, virtual events limit two-way conversations between the candidate and the public. However emotionally charged and engaging a speech maybe, watching a brilliant orator virtually cannot emulate the persuasive power of an address at a field rally. My personal experience of remote learning for the past 12 months tells me that the twenty-nine tiles on the screen cannot bring alive the magic of what happens within the four walls of a concrete classroom. Even though my classmates and I can see each other, I am unsure whether we are aware of each other. The virtual learning experience tells me that a shared physical space motivates a group. The collective energy has to cascade among people to build momentum. Unfortunately, in a virtual rally, just like in a virtual classroom, the group energy gets dissipated to little effect.

Second, online rallies cannot create the same street impact and ambience as field rallies. Though viewers can watch online rallies anywhere, those not interested can simply choose not to tune in. However, a sizeable field rally cannot be ignored. It is disruptive and affects even non-participants. Well aware of this attribute of a field rally, organizers of a protest in Mumbai in August 2017 drew attention to their cause of reservations in government jobs and college admissions. They flooded the streets with more than a million protestors which brought the city to a halt. The large crowds paralyzed the city’s transportation system. All schools, colleges, and offices were forced to close for the day. Even the most disengaged residents heard the message, loud and clear.

Third, a field rally can have enduring effects beyond creating a short-term buzz. No doubt that the size of the audience at a field rally is symbolic of the speaker’s popularity and power. However, it is the optics created by the density of the audience that largely shapes the candidate’s fate. Field rallies attract press coverage, rouse supporters, and provide a litmus test of the candidate’s winnability in the election. Often, party leaders decide to grant the coveted nomination ticket based on a candidate’s ability to draw large crowds. Such large crowds are missing in virtual rallies. The absence of large crowds and its fallout was most evident in the celebration of the annual Martyrs’ Day in West Bengal last year. Complying with COVID-19 restrictions, the celebration was held virtually with a small live audience. It robbed the state Chief Minister, Mamata Banerjee, of an opportunity to showcase her political strength. Political observers felt that not holding a field rally was a strategic loss to her party in a critical year before the state elections in 2021. The number of likes online could not match the impact of wide-angle shots of people choking the streets of the state’s capital, Kolkata, as in previous years.

Fourth, field rallies endure when there is a digital divide among people. Take the case of India. With 36% internet penetration and poor connectivity, not everyone, even in the cities, has access to a smartphone or the internet. This digital divide impedes fairness in the democratic exercise of elections in two ways:

First, it creates an information divide among voters. Voters in digitally-connected regions get access to more information about political parties than those living in the digitally-excluded regions. Even within a geographical region, voters with smartphones and internet access are better informed than others. This asymmetric information leads to biased decision-making among voters. Those without access to the internet may be unaware of certain political parties’ agendas, achievements, and promises. In contrast, those with a smartphone or a social media account may be receiving messages continuously from parties. In sum, the digital divide causes lopsided political messaging and can introduce bias in the voter’s decision. 

Second, this digital divide creates barriers for smaller regional parties with limited budgets. Reaching constituents in rural areas, small towns, and remote regions requires huge initial outlays to build digital infrastructure. In addition, parties need to acquire LED screens, digital equipment, hologram technology, and smartphones. This qualification gives national parties with larger budgets a significant edge over regional parties with limited resources. It is no surprise that the BJP was most agile in unveiling its virtual campaigns in March 2020 when social distancing restrictions were first imposed in the country. Ahead of the 2020 Bihar elections, the party established 9,500 IT cells or *shakti kendras* and 72,000 WhatsApp groups to keep voters informed in real-time of the party’s messages, speeches, and initiatives. 

Fifth, beyond the digital divide, is the constraint of tech-savviness. Engaging the public in a virtual rally becomes more problematic, especially the elderly. Many are not tech-savvy nor active on social media. They may be politically minded but not technologically aware. Hence, they may not know about Zoom meetups or Facebook Live. 

### **Are there idiosyncrasies associated with virtual rallies?** 

While virtual rallies have their advantages and disadvantages, they are also associated with some idiosyncrasies. First, virtual rallies provide political parties more opportunities to play dirty politics. For example, they can sabotage an opposition party’s efforts by disconnecting internet services or local cable networks during a virtual rally. If the ruling party is powerful, it may exert influence on social media companies. To please the politicians in power and protect their corporate interest, platforms such as Twitter and Facebook may not delete an incendiary post by the ruling party that violates the company’s own hate-speech rules.

Second, virtual speeches work well for a specific type of personality. In a virtual rally, not every leader can successfully replicate the energy, enthusiasm, and excitement of a live-rousing event. For people like Donald Trump, Narendra Modi, and Mamata Banerjee, who deliver largely unscripted speeches and feed off a live crowd’s energy, the virtual medium may not do justice to their oratorial style. On a PBS show, John Brabender, a Republican political strategist, commented on Trump’s strengths. He remarked, “Trump is a live candidate. He can be entertaining. He can be interesting. And he knows how to steal the news cycle, which is much easier to do with a big rally than it is online.” In his opinion, virtual rallies work well for Joe Biden, given his sedate, controlled, and predictable personality.  

Third, virtual rallies can amplify missteps. Biden’s Zoom rally in Tampa, Florida in May 2020 demonstrated how a series of small mistakes can cascade into a full-blown disaster. Technical glitches, asynchronous audio, blank screen, off-screen sound bites, and presenters not being aware that they are on a live event resulted in a steep decline in live viewership and gave fodder to the opposition who turned him into a meme. 

Fourth, virtual events require tech-savvy teams. Parties need to hire communications and media experts, data analysts, graphic designers, content creators, and video editors to avoid glitches and provide entertainment to keep viewers’ attention. Political parties reluctant to mimic digital newsrooms of corporate media houses may lag in their public outreach efforts.

### **Do constitutional authorities have a role?**

Beyond political parties, an important stakeholder in the debate between field and virtual rallies is the constitutional authority responsible for holding fair elections. Political campaigning on social media poses new problems for it. It has to distinguish between free speech and the manipulative behavior of leaders. Specifically, fake news, hate messages, and rumors in virtual rallies spread quickly and are difficult to track and stop. It is much easier for authorities to identify and remove incendiary content and false messaging in field campaigns and punish those responsible in a timely manner. Monitoring content in traditional campaigns is easier, be it painting over messages on a wall, tearing offensive physical posters and banners, or banning certain groups. Rectifying wrongful conduct in a virtual event is tricky. Once online, videos and messages take a life of their own. They can spread quickly and manipulate voters’ beliefs and perceptions. Authorities have to digitally identify, track, and remove the false narrative from social media to halt the dissemination of inflammatory messages. The process is complex and slow, as social media provides anonymity to people behind false propaganda. Election officials have catchup to play and will have to introduce new rules to combat these unique set of challenges associated with virtual rallies.

In conclusion, the pros and cons of field and virtual rallies notwithstanding, there is a case to be made for the latter. According to a Centre for Media Studies (CMS) study, the 2019 Lok Sabha elections in India cost approximately Rs 60,000 crore, twice the amount spent on the elections in 2014. If virtual rallies become more common, the country can put the saved money to more productive uses. Based purely on economics, it would appear imprudent to revert to the extravagant field rallies once the threat of COVID-19 recedes. As more people gain access to smartphones and internet connectivity, virtual rallies should become more commonplace. They will enable targeted campaigning. Political rhetoric will give way to voters being informed by distilled information before they cast their vote. However, as elections in various countries have shown, digital media can be hijacked to spin a false narrative that many will follow without questioning. Democracy in the digital age can only thrive if the voter is informed and truth trumps falsehoods. 

*Read more; [The hidden social cost of vehicles](https://spontaneousorder.in/the-hidden-social-cost-of-vehicles/)*

*This article has been written under the guidance of Prof. Ajit Phadnis, Department of Humanities and Social Sciences, Indian Institute of Management Indore*.

* * *

**About Tarini Patel**

Tarini Patel is a pre-university student at Mallya Aditi International School, Bangalore. She is keen to understand how technology is being used in politics to influence voters. Specifically, she wants to know how a digital divide creates distortions in political participation in society. In her free time, Tarini makes beds for community dogs from recycled materials.

## The hidden social cost of vehicles

Original: https://www.spontaneousorder.in/p/the-hidden-social-cost-of-vehicles

Author: Spontaneous Order

Published: 2021-05-24T16:46:39.000Z

Topics: transportation, externalities, subsidies, pollution

> The Centre for Science and Environment has launched a campaign to make drivers of cars and two-wheeler vehicles pay the full social cost that they impose on the economy, which I fully support. These costs are typically invisible to the public, but are r..

**Summary:**

Swaminathan SA Aiyar endorses the Centre for Science and Environment's campaign to charge drivers the full social costs of vehicles, which are massive but hidden subsidies to car owners. These include road and bridge construction (several crore per km, hundreds of crores for flyovers), traffic management, high accident rates (among world's highest per vehicle), congestion (US example: $63 billion in 85 cities from time wasted), parking (Delhi residential space Rs 1.5 lakh/sq yard, implying Rs 30 crore for a 100x20 yard lot or Rs 37.8 lakh per space; cars occupy 11% of Delhi's area, equaling all parks), pollution causing respiratory diseases (India's top killer) and winter smog disrupting flights and tourism (India gets 4 million tourists vs China's 124 million), plus fuel subsidies (Rs 25,000 crore) and kerosene adulteration worsening emissions. Aiyar, a classical liberal, rejects abolishing cars for public transport, affirming freedom to travel privately but insisting owners pay these externalities via user charges or taxes, not subsidies that burden society with pollution, congestion, and lost green space. He criticizes politicians and middle class for opposing reforms, noting even Left and Sonia Gandhi treat cheap fuel as a right, despite Indian petrol/diesel prices matching US levels when ignoring social costs.

**Key points:**

- Drivers receive hidden subsidies for roads (crores per km), parking (11% of Delhi's area), and congestion, which must be replaced by full user charges.
- Vehicular pollution, subsidized by Rs 25,000 crore in fuel aid and kerosene adulteration, causes India's top killer respiratory diseases and tourism losses.
- India's high per-vehicle accident rate and winter smog from cars impose uncompensated costs on society, highest on the poor.
- Classical liberals support private vehicle freedom but require owners to internalize all externalities like time wasted ($63B US congestion example) and green space loss.
- Politicians and middle class block reforms like Rs 120/day Delhi parking, treating cheap fuel as a right despite massive social burdens.

**By Swaminathan SA Aiyer**

* * *

The Centre for Science and Environment has launched a campaign to make drivers of cars and two-wheeler vehicles pay the full social cost that they impose on the economy, which I fully support. These costs are typically invisible to the public, but are real and gargantuan.

First, there is the cost of building and maintaining roads, bridges and flyovers. Roads cost several crore per kilometre, bridges and flyovers can cost hundreds of crores. Yet, these are free save for a few toll roads.

Second, traffic police and traffic lights cost large sums. No driver wants to pay for them. But when a power failure puts traffic lights out of action, traffic jams bring home to drivers their true value.

Third, we suffer hundreds of deaths and disabilities every year from road accidents. The cost of human life cannot be estimated, it is said. Yet, this cost is especially high in India, since the accident rate per vehicle is among the highest in the world.

Fourth, we suffer high costs of congestion. Time wasted is money wasted. Slow traffic consumes more fuel and pollutes more. In the US, says Sunita Narain of CSE, the cost of traffic congestion in 85 cities was estimated at a staggering $63 billion in 2003, on account of time wasted alone.

Fifth, cars impose high social costs by occupying parking space. Residential space in Delhi sells for Rs 1.5 lakh per square yard in most localities. So a parking lot 100 yards long and 20 yards wide has a social cost of Rs 30 crore. A single parking space of 23 sq m has a social cost of Rs 37.8 lakh. A car occupies more space than an office desk, yet the desk space pays full commercial rent while parking space costs just Rs 10 per day.

This is a huge, unwarranted subsidy, especially to those who keep their cars parked all day. In New York or Washington DC, parking costs $9 (Rs 400) per hour. CSE’s efforts to raise the parking rate to Rs 120/day in Delhi were kayoed by the middle class and politicians. The parking space occupied by cars is estimated by CSE at 11% of Delhi’s area, as much as all its parks put together. That is a measure of the social cost.

Sixth, vehicles impose high costs through pollution, which leads to respiratory and other disease. Respiratory disease is the number one killer in India. By subsidising petrol and diesel, we subsidise deaths by pollution. The impact is worst on poor pavement dwellers who live closest to the worst pollution.

Seventh, vehicular pollution causes smog that makes it impossible for planes to land in Delhi in winter, forcing them to travel to distant airports to dump their disgruntled passengers. This imposes high costs on the passengers, the airlines, and on tourism. India has barely scratched the surface of world tourism: it gets four million tourists per year, against China’s 124 million. Yet, vehicular pollution strikes right at the peak of the tourist season. The cost to tourism must be huge.

There is little appreciation among politicians or the middle class of the huge social cost of cars. They cannot see that huge subsidies, mostly hidden, are being ladled out to car-owners. These need to be abolished and replaced with user charges or taxes that reflect the full social cost of cars. The Left front, which once supported high taxes on petrol, now acts as though petrol is a Fundamental Right. So does Sonia Gandhi. And so the government hands out Rs 25,000 crore to oil companies to keep the price of cooking and transport fuels low.

Indian petrol is more expensive and diesel just as expensive as in the US (though they are far costlier in Europe and Japan). So, you may think that we tax liquid fuels less than in Europe, but do not actually subsidise them. Wrong. If you compute the enormous social costs of cars enumerated above, you will find that car-owners are often getting a free ride.

Kerosene is subsidised because villagers use it for lighting and the middle class for cooking. Yet, the biggest single use of kerosene is probably for adulterating petrol and diesel. This ruins vehicle engines and increases pollution. In other countries, carbon taxes have been proposed or already imposed on fuels to curb emissions of greenhouse gases. I am a skeptic on global warming. But even I find it zany to actually subsidise carbon emissions, which is what current government policy does.

I am not among those who want cars to be abolished and replaced entirely by buses and trams. Public transport has an important place in cities, but so does private transport. I believe in the freedom of people to travel where and when they want. But this freedom imposes a wide array of hidden costs on a city economy, and car-owners should pay these costs in full. Otherwise we will be subsidising pollution, fuel adulteration, congestion, respiratory disease, and the disappearance of green spaces.

*Read more: [The economics of India’s high prevalence of child brides](https://spontaneousorder.in/the-economics-of-indias-high-prevalence-of-child-brides/)*

*This article was originally published on 24th March 2007 in [Times of India](https://timesofindia.indiatimes.com/sa-aiyar/swaminomics/the-hidden-social-cost-of-vehicles/articleshow/1804387.cms#:~:text=Roads%20cost%20several%20crore%20per,traffic%20lights%20cost%20large%20sums.).*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## The economics of India’s high prevalence of child brides

Original: https://www.spontaneousorder.in/p/the-economics-of-indias-high-prevalence-of-child-brides

Author: Spontaneous Order

Published: 2021-05-21T17:10:38.000Z

Topics: child-marriage, son-preference, marriage-laws, economic-development

> The government is considering raising the minimum legal age of marriage for women from 18 to 21, to reduce the prevalence of child brides (below 18) in India. This is, of course, well intentioned. If only the problem were so simple that it could be solv..

**Summary:**

India's high prevalence of child brides—223 million women alive today married before 18, one-third of the global total, with 102 million before 15—is not primarily a legal issue but a market phenomenon driven by cultural son preference and economic pressures on poor families. High costs of raising girls lead parents to marry daughters young to invest in sons, creating a supply of child brides, while skewed sex ratios from female foeticide and underinvestment in girls generate demand, especially among lower-quality grooms in endogamous groups. States like Uttar Pradesh (36 million child brides) exemplify this. Boys face far less: only 4% married before 18. Raising the women's legal marriage age from 18 to 21 ignores these roots and risks unintended consequences like increased sex-selective abortions or infanticide, as shown in Paola Suarez's 2017 paper. Leeson and Suarez's analysis highlights supply-demand dynamics. From a classical-liberal view, de facto later marriages require economic prosperity and cultural evolution; child marriages have already fallen from 75% in 1970 to 27% today amid growth and poverty decline. Laws alone fail; sustained economic success, paired with anti-son preference efforts, offers the lasting solution.

**Key points:**

- Child marriage in India arises from son preference creating a market supply of brides from poor families and demand due to sex ratio imbalances.
- Raising the legal marriage age for women risks boosting female foeticide and infanticide in high son-preference, poor contexts.
- Economic growth has reduced child marriages from 75% of women in 1970 to 27% today, proving prosperity's role in cultural change.
- Cultural factors like endogamy and variable groom quality sustain demand for prepubescent brides despite existing laws.

**By Shruti Rajagopalan**

* * *

The government is considering raising the minimum [legal age of marriage](https://www.livemint.com/news/india/why-modi-s-plan-for-higher-legal-marriage-age-of-women-is-enormous-economic-booster-11603354241286.html) for women from 18 to 21, to reduce the prevalence of child brides (below 18) in India. This is, of course, well intentioned. If only the problem were so simple that it could be solved with the stroke of a pen.

The benefits of later marriage for women are well established. It is associated with higher nutrition levels for women and their children, lower maternal mortality, improved educational outcomes and greater financial independence.

The problem is particularly dire in India. According to Unicef, 650 million women alive today were married before they turned 18. India is home to 223 million or one in three of these child brides. Just under half that number, 102 million were married before they turned 15. Uttar Pradesh has the largest number of child brides, at 36 million, followed by Bihar, West Bengal, Maharashtra and Madhya Pradesh. The problem, however, is not the law. Even though there is a minimum age for marriage for men, India doesn’t have the same extent of this problem with child grooms. Only 4% of Indian boys/men were married before age 18. And 20% were married before the minimum legal age of 21, compared to the 27% of girls/women married before the age of 18. Raising the legal age of marriage displays a lack of understanding of the reasons for the low age of marriage for women in India, which have little to do with the law.

The real issue is that various long-persistent cultural factors have created a market for child brides in India. Society imposes a very high cost of raising girls on parents, especially in poor Indian families, which, attempt to reduce those costs by marrying daughters off at a young age, if they prefer to invest in sons.

In their 2017 paper, Peter Leeson and Paola Suarez explain the supply and demand for child brides in India. The real problem, they explain, begins with a very high son-preference. South Asian countries exhibit the highest levels of son preference in the world, though there is much variation within India. A consequence of high son-preference is that in trying to produce sons, couples sometimes produce daughters. To afford the sons they want, some of these couples dispose of their unwanted daughters.

However, there is also demand for child brides. Between female foeticide skewing the sex ratio at birth and son-preferring couples investing fewer resources in the care of daughters than sons, more males survive to traditional marriage age than females in India. To find brides in the face of this sex ratio imbalance is a struggle.

We know families in states like Haryana “import” and “buy” brides from poorer states. But another consequence is that in highly-endogamous sections of Indian society, where families prefer to find brides within their own caste group, marriage-aged men must look for younger female cohorts within their community.

In some groups, that means adult-age men are even matched with prepubescent girls, creating demand for prepubescent brides. Only relatively impoverished son-preferring parents dispose of their unwanted daughters to afford the sons they seek.

Leeson and Suarez also point out that this affects the “quality” of potential grooms. When potential grooms are of variable quality, men whose inferior prospects or socio-economic status prevents them from competing successfully for the limited number of traditional-marriage-age brides may end up looking for child brides.

While it doesn’t solve the problem, policymakers see no harm in increasing the age of marriage. But these laws have unintended consequences. Raising the cost of disposing unwanted daughters through marriage, and punishing families for violating the rule, could push families with a strong male preference towards sex selection and female foeticide, or trafficking and other worse ways of disposing unwanted daughters. In her 2017 paper, Paola Suarez finds that raising the female marriage age in such countries with high son preference and high poverty may have the unintended consequence of increasing the prevalence of female infanticide and sex-selective abortion.

To increase marriage age, not just de jure but de facto, requires India to evolve economically and culturally. Some of this has happened. As Indians have become more prosperous, and as extreme poverty levels have declined, we see a decline in child brides. In 1970, almost 75% women were married before they turned 18, which has now decreased to 27%. Economic growth will save Indian girls from child marriage. Combined with educational and cultural awareness against a sex preference, which no doubt will take longer, economic success is the only lasting solution.

*This article was originally published in [Livemint](https://www.livemint.com/opinion/online-views/the-economics-of-india-s-high-prevalence-of-child-brides-11603727733091.html).*

*Read More: [Improving Preventive Menstrual Health for Urban Poor Women](https://spontaneousorder.in/improving-preventive-menstrual-health-for-urban-poor-women/)*

* * *

**About Shruti Rajagopalan**

Advisor, Centre for Civil Society Senior Research Fellow, Mercatus Center at George Mason University

## Improving Preventive Menstrual Health for Urban Poor Women

Original: https://www.spontaneousorder.in/p/improving-preventive-menstrual-health-for-urban-poor-women

Author: Spontaneous Order

Published: 2021-05-19T16:23:23.000Z

Topics: menstrual-health, urban-poor, market-solutions, women-empowerment

> Menstrual health is among the hardest to resolve health challenges in India. Besides access and affordability, menstrual health challenges come with significant social stigma. In recent years, there has been a celebrated increase in the number of girls ..

**Summary:**

Menstrual health challenges for urban poor women in India persist despite high female school enrollment (80.97% GER for girls vs. 79.16% for boys at secondary level), with nearly 60% of girls dropping out by senior secondary often due to menarche, exacerbated by low awareness—only 36% use hygiene products, under 18% sanitary napkins, 70% of mothers viewing menstruation as 'dirty,' and 77-88% relying on unhygienic alternatives like rags, increasing risks of UTIs, Hepatitis B, and cervical cancer. Urban issues mirror rural ones, with 64% of girls using pads but 52% having unsatisfactory hygiene. Products are accessible and affordable (Rs 28-30 for 7 pads from P&G/J&J; Rs 2-3 fluff pads), yet prioritization lags in hand-to-mouth households due to stigma, info gaps, and sanitation lacks. Root causes: non-gender-responsive spending, stigma-driven low info/demand, supply shortages of cheap government pads (Suvidha at Rs 1, demand up five-fold). A classical-liberal market systems approach advocates community-driven promoters from urban poor SHGs, educated by NGOs, to normalize discussions, promote savings for reusables (Rs 200-250), and partner with private firms via loan-based distribution models, spurring demand, entrepreneurship, and scalable private supply—90% of issues preventable early.

**Key points:**

- High school enrollment masks 60% female dropout by senior secondary due to menarche and poor menstrual hygiene awareness.
- Urban poor women face prioritization issues despite affordable pads (Rs 28-30/7-pack), with stigma and info gaps sustaining unhygienic practices used by 77-88%.
- Government Suvidha pads at Rs 1 see five-fold demand surge but supply shortages, underscoring need for private sector scale-up.
- Community promoters from SHGs, partnered with NGOs and private firms via loan-sales models, can reduce stigma, boost savings for reusables, and create entrepreneurial opportunities.

**By Paavi Kulshreshth**

* * *

Menstrual health is among the hardest to resolve health challenges in India. Besides access and affordability, menstrual health challenges come with significant social stigma. In recent years, there has been a celebrated increase in the number of girls being enrolled in schools. At the secondary level, GER for girls is 80.97%, compared to 79.16% for boys (2015-16). The high enrolment rate, however, veils a dire estimate. Nearly 60% of girls drop out of schools by the time they reach senior secondary. In many cases, this trend can be largely attributed to menarche. Studies also suggest that an earlier onset of menstruation can prepone school dropouts. A graver concern, however, is lack of awareness. Only 36% of women in India use menstrual hygiene products, less than [18% use sanitary napkins](https://www.downtoearth.org.in/blog/health/menstrual-hygiene-a-challenging-development-issue-66973). 70% mothers perceive menstruation as ‘dirty’, and 71% girls have no idea about what a period is until they get theirs ([2015](https://www.dasra.org/assets/uploads/resources/Spot%20On%20-%20Improving%20Menstrual%20Management%20in%20India.pdf)). [77%](https://www.downtoearth.org.in/blog/health/menstrual-hygiene-a-challenging-development-issue-66973) women ([88%](https://www.dasra.org/assets/uploads/resources/Spot%20On%20-%20Improving%20Menstrual%20Management%20in%20India.pdf) according to one estimate) use an old cloth, ashes, newspapers, husk, wood shavings, dried leaves, plastic, etc. in place of menstrual hygiene products. These methods make women more susceptible to UTIs, Hepatitis B, and cervical cancer. 

While menstrual health concerns manifest more deeply in rural India, the problem is fairly concerning in urban spaces as well. A [comparative study](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4311354/), with a sample of 500 girls from a school in Rajpur Sonarpur municipality in West Bengal, indicated that 64% girls used sanitary pads. The remaining relied on reusable cloth pads. 52% of urban schoolgirls fell under the ‘unsatisfactory’ category when measured for ‘cleaning external genitalia’ (n = 500) – a mere 10% increment compared to the rural estimate (n = 490).

While the association of shame with menstruation (not limited to urban poor women) adds to plausible affordability challenges, access is no problem at all. Urban markets are lousy with menstrual hygiene products. Oligopolists like P&G and Johnson & Johnson offer affordable varieties that sell for Rs 28-30 per 7 pads. It is advisable to change the pad every 4 to 6 hours, and menstruation is expected to last anywhere between 2 and 7 days. Let us now indulge in some best-case scenario math. A woman, whose menstrual cycle lasts no more than 2 days, changes her pad every 6 hours. She would still require 8 pads. This is keeping aside considerations of menstrual flow and length of cycle. Therefore, costs are likely to rise and differ from woman to woman. Further, the above scenario assumes that women are changing their pads every 6 hours. This may not hold true for urban women, especially due to lack of access to proper sanitation facilities, both in places of work and residence. Despite the undeniable merit of increasing information w.r.t menstrual hygiene, best practices are likely to amp up costs. Prioritisation of such increased costs may not appear desirable to many urban poor women, especially to those with a hand-to-mouth existence. 

Circulated by regional manufacturers, fluff pads that cost Rs. 2-3 per pad (colloquially known as cotton pads; not made with cotton) present a reasonable alternative. However, it is important to note that this is a recurring cost and fewer alternatives often encourage the sustenance of higher prices. Reusable alternatives like menstrual cups have higher up-front costs and are limited to a more niche, largely online market in India. Reusable markets are yet to become accessible and affordable for urban poor women. 

While tedious challenges remain, [90%](https://www.dasra.org/assets/uploads/resources/Spot%20On%20-%20Improving%20Menstrual%20Management%20in%20India.pdf) of menstrual health problems are preventable if detected early. A root cause analysis, under a market systems approach, could then be narrowed down to the following: 

1.  Affordability and lack of prioritisation: household expenditure is not gender-responsive in urban poor household, therefore, menstrual hygiene products often get left out of priority expenditure lists. 
    
2.  Lack of information and stigma: lack of prioritisation is also closely related to lack of information when it comes to menstrual hygiene and health. As discussed previously, social stigma sustains lower demand for information. 
    
3.  Supply shortage of affordable pads: with a nearly [five-fold increase](https://www.thehindu.com/news/national/karnataka/demand-for-suvidha-exceeds-supply-in-jan-aushadhi-kendras/article29956216.ece) in demand for government-supplied *Suvidha* pads, sold at Rs 1/pad, Jan Aushadhi Kendras are running out of supply – a classic problem concerning economies of scale. For large scale manufacturing and circulation, well-established private players must step in. It is the most cost-effective and arguably the only way to meet demand. 
    

A community-driven approach to promotive and preventive menstrual health coupled with a market-driven solution could potentially save the day. Community menstrual hygiene promoters (urban poor women belonging to SHGs or urban unorganised settlements, et al), in partnership with or educated by third-party facilitators (menstrual health NGOs, et al), can work towards reducing information asymmetry and normalising conversations around menstruation. This could also involve promotion of savings behaviours that make prioritisation of menstrual hygiene products easier. Involvement of third-party facilitators could also improve information about and access to reusable menstrual hygiene products. Savings behaviours would then allow urban poor women to save up for more expensive, long-lasting reusables products like menstrual cups and reusable cloth pads (standard up-front cost: Rs 250/cup and Rs 200/pad). While increased information is likely to increase demand, hence, incentivising private markets to cater to urban poor women, there is also scope for people-private-partnerships. A partnership between community promoters and private firms, where private firms act as lenders, community promoters as borrowers, and urban poor women as savers/consumers, can yield desirable results. Firms can offer their menstrual hygiene products as loans to community promoters that then sell within their designated areas to urban poor women. Firms receive payments for units sold. Such a model, however, assumes an increase in demand with increase in information and is aided by savings behaviours (it does not create lower than usual prices). This model would not only improve information and normalise conversations around menstruation but would also produce entrepreneurial opportunities for community promoters. 

*Read more: [Non Fungible Tokens (NFTs): Another snowflake trend?](https://spontaneousorder.in/non-fungible-tokens-nfts-another-snowflake-trend/)*

* * *

**About Paavi Kulshreshth**

Paavi has completed her undergraduate study in journalism and postgraduate study in public policy. Her areas of interest include health and Market Systems Development. She is currently working as an Associate at the Centre for Civil Society.

## Non Fungible Tokens (NFTs): Another snowflake trend?

Original: https://www.spontaneousorder.in/p/non-fungible-tokens-nfts-another-snowflake-trend

Author: Spontaneous Order

Published: 2021-05-17T16:41:10.000Z

Topics: nfts, blockchain-technology, crypto-art, decentralized-finance

> With a recent surge in the popularity of crypto art, the NFTs have become a popular form of trading digital assets. Be it Beeple’s record-breaking sale of ‘Everydays-The first 5000 days’ for $69M or the sale of Jack Dorsey’s first-ever tweet for $

**Summary:**

Harshit Gupta explores Non-Fungible Tokens (NFTs) as unique digital assets verified via blockchain, contrasting them with fungible assets like money. Highlighting high-profile sales such as Beeple's 'Everydays: The First 5000 Days' for $69 million and Jack Dorsey's first tweet for $2.9 million, he notes the crypto art market's growth from $44 million in 2018 to $338 million in 2020, with NBA Top Shot reaching $370 million since October 2020. From a classical-liberal viewpoint, NFTs empower artists by enabling direct global sales, royalties on resales, and bypassing middlemen like Sotheby's, while tokenizing real estate could enhance liquidity and reduce inefficiencies. In India, WazirX launched the first NFT platform amid regulatory uncertainty from the upcoming cryptocurrency bill. Drawbacks include gas fees, Ethereum's energy consumption equivalent to Libya's, volatility (some prices down 70%), and unclear legal rights—ownership is merely a blockchain record without copyright. Gupta likens NFTs to traditional art's subjective value, as in Maurizio Cattelan's taped banana, warning against hype amid loose monetary policy but seeing them as evidence of public appetite for decentralized finance.

**Key points:**

- NFTs provide artists direct sales, royalties, and protection against fakes via blockchain without intermediaries.
- Tokenizing real estate via NFTs could liquify illiquid markets by eliminating middlemen and enabling fractional global ownership.
- NFT trading surged with crypto art from $44M in 2018 to $338M in 2020, boosted by pandemic indoor time and crypto rallies.
- Drawbacks include high gas fees, massive carbon footprints from mining, volatility, and limited legal ownership rights beyond blockchain records.
- India's WazirX launched an NFT marketplace, but government crypto regulations pose risks for adoption.

**By Harshit Gupta**

* * *

With a recent surge in the popularity of crypto art, the NFTs have become a popular form of trading digital assets. Be it Beeple’s record-breaking sale of ‘[Everydays-The first 5000 days](https://www.theverge.com/2021/3/11/22325054/beeple-christies-nft-sale-cost-everydays-69-million)’ for $69M or the sale of Jack Dorsey’s [first-ever tweet](https://www.bbc.com/news/business-56492358#:~:text=Twitter%20founder%20Jack%20Dorsey's%20first,by%20Mr%20Dorsey%20for%20charity.) for $2.9M, people are wondering as to why such a large amount of money is being spent on something that is digital and can be viewed online for free.

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![](https://substackcdn.com/image/fetch/$s_!_XAA!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F53b29a94-594f-4381-8724-c3d2d28556a3_1024x682.jpeg)



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*Everydays- The first 5000 days’.  Sold for $69M| Credit: The Verge*

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![](https://substackcdn.com/image/fetch/$s_!kfJe!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F13c2f296-ab21-452a-bc47-87275b7f1566_1024x436.jpeg)



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*Jack Dorsey’s first-ever tweet. Sold for $2.9M*| *Credit: BBC News*

So, what’s the buzz about?  

An NFT or a Non-Fungible Token is a digital file with verified identity and ownership. A fungible asset means an asset that can be interchanged with other individual assets of the same kind. Fungible assets simplify the exchange and trade process, and the best example of a fungible asset is (you guessed it) money! On the other hand, a non-fungible asset is something unique that cannot be exchanged or traded. NFTs exist in all kinds of digitals forms such as art, music, video, etc. It is different from traditional artwork as it stores different information about the artwork that is distinct and provides safeguards against fake collectables.

The concept of NFT is to create a digital certificate of ownership that stores information about an item that is ‘unique’ and can be bought and sold by ‘tokenizing’ artwork. A record of who owns the artwork is stored on a digital ledger decentralized using [blockchain technology](https://builtin.com/blockchain), which essentially means that no one entity controls the ledger. These records are impossible to forge or duplicate and cannot be destroyed.    
NFTs were introduced a long time back but first became popular due to a game called ‘[CryptoKitties](https://techcrunch.com/2017/12/03/people-have-spent-over-1m-buying-virtual-cats-on-the-ethereum-blockchain/)’ in 2017. Since then, NFTs have caught quite a few eyes but the crypto art world [suddenly boomed](https://youtu.be/zpROwouRo_M), increasing the trade approximately 8 times from 2018 ($44M) to 2020($338M). The total value of [crypto art traded](https://cryptoart.io/data) in the past year is around $44M. 

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![](https://substackcdn.com/image/fetch/$s_!dTdf!,w_1456,c_limit,f_auto,q_auto:good,fl_lossy/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F17881082-c9ac-45dd-859c-1d50f60af6cf_920x613.gif)



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*‘Nyan Cat’ GIF. Sold for $600,000*| *Credit: The Verge*

But why have NFTs become so popular recently? With the sale of Beeple’s ‘Everydays-The first 5000 days’ and the sale of Jack Dorsey’s first-ever tweet, the stage has been set for even greater sales in the future. This sudden surge in popularity of NFTs can be attributed to rallying prices of cryptocurrencies and people spending much of their time indoors due to the pandemic. Also, the innate desire to own something unique is a secondary factor. The ‘[NBA Top Shot](https://www.si.com/nba/2021/03/17/nba-top-shot-crypto-daily-cover)’ has also traded player highlights and other digital artwork for a net worth of $370M since October 2020 in the form of NFTs. 

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‘*LeBron James NBA Top Shot Moment’. Sold for $387,600*| *Credit: USAToday*

*The world has already witnessed the exclusivity, along with the extent of shenanigans at posh Sotheby’s or Christie’s auction halls. Are NFTs remodelling or destroying the 21st century collectible business?* 

Well firstly, artists tend to benefit from NFTs a lot. They can sell their artwork directly to a global audience in digital form and at the same time eliminate the need for any third-party verification, saving themselves time and money. Since the artists can sell their work to anyone, there need not be any *beau monde* auctioneering around you like Sotheby’s – should you ever want to delve into the pool of NFTs. Another perk that NFTs offer is the royalty given to the artist each time their artwork is sold. Artists can also use NFTs as a means against identity theft and also for copyright laws.

Since, NFTs are an uncharted territory for the tax authorities, it seems that they are [not going to incur](https://news.artnet.com/market/nft-taxes-1953726) any sales tax for at least some time. This is because sales tax is intended to apply to ‘tangible personal property’ while NFT is a non-tangible property. But according to a recent [IRS guidance](https://www.cnbc.com/2021/02/24/failure-to-report-crypto-on-tax-returns-can-lead-to-trouble-with-irs.html) , if a collector uses cryptocurrency to buy an NFT (which is usually the case) and dispose of it for a higher price at a later date, it is liable for a capital gains tax. This is since cryptocurrencies are treated as a capital asset and are thus subject to capital gains tax. 

Another use of NFTs is tokenizing real estate and land digitization. Some of the famous monuments around the world including but not limited to the Eiffel Tower, Statue of Liberty, Big Ben have already been tokenized on a site called [Etherland](https://etherland.world/).

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](https://spontaneousorder.in/wp-content/uploads/2021/05/1_dvF5Tq8V3f_R7fQbhFZ6QA-1024x333.jpeg)

*Credit: Etherland-Medium*

It is expected that in the near future, we would be able to tokenize our own house on the NFT platform which could bring a huge change as it can bring liquidity to the notoriously illiquid real estate market. The real estate market as we know it is quite inefficient involving a lot of middlemen. But ‘tokenizing’ the real estate would help eliminate the middlemen and would make it possible for investors around the world to own as much, or as little, as they can afford. Also, recently a digital house dubbed ‘[Mars House](https://edition.cnn.com/style/article/digital-nft-mars-house-scli-intl/index.html)’ was sold for about half a million dollars. It is the first digital property to exist as an NFT (or maybe not exist!).

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*First digital house in the world ‘Mars House’. Sold for over $500,000| Credit: CNN*

The trend of NFTs has started gaining momentum in India too. Last month, [WazirX](https://wazirx.com/) (an Indian cryptocurrency exchange) launched India’s first NFT platform. The exchange will not charge fee from its customers for listing and creating NFTs, but a gas fee still has to be paid. Now, many modern and traditional artisans in India can verify their work and avoid any duplicability by using NFTs. That being said, the take of Indian government on the NFT market is still unclear. While the government has not expressed any desire to ban NFTs, the upcoming private cryptocurrency [Bill](https://prsindia.org/billtrack/draft-banning-of-cryptocurrency-regulation-of-official-digital-currency-bill-2019) surely casts a doubt on the legality of NFTs in India. As of now, NFTs are traded as digital art pieces but investors advise to be cautious as these tokens are high-risk assets. 

Every new trend has some disadvantages, and this trend is no exception. Inexperience in crypto and blockchain technology may serve as the barriers to entry for immature artists.  Moreover, for the creation of an ‘NFT’ token, a small fee, also known as ‘gas’, has to be paid by both parties involved. This fee is used by miners to process transactions and the amount of ‘gas’ to be paid depends on the size of transaction and how fast it is to be executed. It is an essential regulator that prevents anyone from spamming the Ethereum network. Another disadvantage is the massive carbon footprint caused by the mining of cryptocurrency used for purchasing these tokens as it takes place on the blockchain network that requires huge amounts of raw power powered by fossil fuels. For example, the whole [Ethereum blockchain consumes energy](https://techcrunch.com/2021/03/21/the-debate-about-cryptocurrency-and-energy-consumption/) equal to that of a small country like Libya. 

NFTs are certainly the topic of the month and maybe even have the potential to be the future of art itself. But right now, there are some pertinent questions *which* need to be answered. What are the legal rights of buyers and what does it mean to own a tweet? What if the tweet is deleted in the future or if Twitter shuts down permanently? Artists may also con people by tokenizing multiple NFTs of the same item on the same or different blockchains.  

As things stand, the ownership of an NFT confers no actual rights, other than being able to say you own the work. You don’t own the copyright and you don’t get a physical print, and anyone can look at the image on the web. What you are essentially paying for is a record in a public database that says you own it. And while that is certainly worth something, whether it is worth millions of dollars remains to be seen.  

Proponents argue that NFTs are not so different from physical works of art i.e., that the different attributes of an artwork are worth what we choose they are worth. This does not mean that the historical significance and immaculate brushwork and technical skill of a Van Gogh are worthless attributes, it just means that the value of those attributes is what we choose to put on them. When people buy a banana taped to a wall for eye-watering amounts of money, they aren’t really interested in buying the banana, but rather in ‘owning’ the bragging right to say that they bought it and the story surrounding it. NFTs simply take this concept to the extreme and remove any pretence of buying artwork for its physical attributes.

[

![](https://spontaneousorder.in/wp-content/uploads/2021/05/promo-banana-1024x1024.jpeg)



](https://spontaneousorder.in/wp-content/uploads/2021/05/promo-banana-1024x1024.jpeg)

 *Banana and Tape. Not sold yet | Credit: Vogue*

In the past few days, the prices of some NFTs have tumbled 70% which is making investors jittery around the world. While this level of volatility isn’t indicative of a bubble on its own, it becomes one when it happens in the backdrop of easing monetary policy around the globe with interest rates going to zero and central banks pulling out all stops to prop up the world economy. This is one reason why people shouldn’t jump on the NFT bandwagon too soon. The transformation of blockchain technology into a more eco-friendly one will play a pivotal role in the fate of NFTs. That being said, whether or not this craze stays, NFTs are proof that the public is in favour of a crypto-economy and is ready to take risks for a [decentralized system of finance.](https://www.youtube.com/watch?v=Xdkkux6OxfM&t=331s)

*Read more: [Signs of hope for 100 million missing women.](https://spontaneousorder.in/signs-of-hope-for-the-worlds-100-million-missing-women/)*

* * *

**About Harshit Gupta**

Harshit Gupta is a student at Indian Institute of Technology, Delhi pursuing a Major in Biotechnology and a Minor in Economics. He has always been fascinated by the world of crypto and is always keen to read about new economic developments. When not reading or writing, one can find him in the city of Verdansk (Call of Duty: Warzone).

## Signs of hope for the world’s 100 million missing women

Original: https://www.spontaneousorder.in/p/signs-of-hope-for-the-worlds-100-million-missing-women

Author: Spontaneous Order

Published: 2021-05-13T12:38:39.000Z

Topics: missing-women, sex-ratio, son-preference, social-norms

> It is now nearly 30 years since Amartya Sen famously argued in an essay that the world was missing 100 million women. Scholars have since come up with different estimates as well as provided a range of explanations of why many countries have fewer women..

**Summary:**

Amartya Sen's 1990 claim of 100 million missing women due to son preference, female infanticide, sex selection, and neglect persists strongly in China and India. Yet signs of hope emerge: Haryana's sex ratio at birth rose from 833 girls per 1,000 boys in 2011 to 920 in 2019. Anthropologist Lihong Shi's study of rural China's Lijia village identifies five reasons families now prefer a single daughter: market economy redefining happiness around material possessions and leisure over child-rearing costs; focus on one child's education and consumption; daughters seen as more filial; bride shortages shifting wedding costs to grooms; financial ability trumping family continuity for status. A 2008 World Bank study on South Korea, which reversed its skewed ratios from 1991-2005, attributes three-fourths of the decline in son preference to normative shifts, aided by education and urbanization—contrasting with policies there that initially reinforced patriarchy, unlike gender-equity efforts in India and China. Economic changes like non-agricultural jobs, migration, and urbanization, plus norm evolution, enable earlier normalization in India and China. Recent developments signal early victories in a longer battle, emphasizing social norm changes alongside market-driven progress.

**Key points:**

- Haryana achieved a steady rise in sex ratio at birth from 833 girls per 1,000 boys in 2011 to 920 in 2019 through targeted efforts.
- Rural Chinese families in Lijia now favor daughters due to market economy costs of child-rearing, education focus, filial daughters, marriage market shifts, and new status markers.
- South Korea normalized its sex ratio via normative changes (75% of decline) plus urbanization and education, offering a model for India and China.
- Economic progress, urbanization, non-farm jobs, and pro-gender-equity policies can accelerate reduction in son preference before full development.

**By Niranjan Rajadhyaksha**

* * *

It is now nearly 30 years since Amartya Sen famously argued in an essay that the world was missing 100 million women. Scholars have since come up with different estimates as well as provided a range of explanations of why many countries have fewer women than expected. These explanations range from female infanticide to cheaper prenatal sex determination technology to inadequate nutrition given to young girls. The underlying reason is a strong preference for sons. China and India are the biggest culprits. Can the tide ever turn?

The Haryana government said in October that there has been a steady rise in the sex ratio at birth within the state—from only 833 girls per 1,000 boys in 2011 to 920 girls per 1,000 boys in 2019. This is a remarkable achievement that needs to be replicated in other states, though the results of the 2021 census will give a better idea of what is happening across the country. It is in this context that the recent work done in a small Chinese village called Lijia by an anthropologist from Case Western University is highly relevant.

Lihong Shi found that the preference for sons has been declining in this rural corner of China, despite a 1986 law that says that rural families with a first daughter are not bound by the nation’s law that every family can have only one child. In her recent book *Choosing Daughters: Family Change In Rural China*, Lihong provides five main reasons families in rural China are quite happy to have a single daughter rather than a single son.

First, the spread of the market economy has redefined the idea of happiness. It now revolves around material possessions and leisure. Families see child rearing as something that jeopardizes the pursuit of happiness.

Second, the strategy of child rearing has undergone a remarkable change. The focus is now on providing the child with a good education as well as a higher level of consumption. That is more likely when there is only one child, irrespective of gender.

Third, there has been a gradual decline in the preference for sons. The families Lihong covered in her ethnographic study said that daughters are more filial than sons and daughters-in-law, or that the former are more likely to take care of parents.

Fourth, a shortage of girls in rural China altered the dynamics of the marriage market. The groom rather than the bride is now expected to bear most of the financial burden of the wedding, the costs of which sometimes drive families into debt.

Fifth, there is an erosion in the old belief that it is important to have sons to maintain family continuity. Lihong says that financial ability has replaced family continuity as the marker of social status.

These five reasons suggest that a change in social norms is as important as economic progress to break the stranglehold that a preference for sons has in many countries. This is also broadly the main finding of a 2008 study published by the World Bank on the improvement in the sex ratio at birth in South Korea.

South Korea faced the same problem that India faces right now. Its initial burst of economic growth was accompanied by deepening discrimination against daughters. The easy availability of sex selection technology added to the problem. However, South Korea became the first Asian country to push back as its sex ratio at birth declined between 1991 and 2005. Woojin Chung and Monica Das Gupta showed in a study of survey data that much of the change was driven by a change in social norms. Nearly three-fourths of the decline in the preference for sons was because of normative changes in South Korean society, while the rest was explained by a rise in education and urbanization.

The scholars also said that South Korea was better placed than either India or China for a reduction in child sex ratios. It was more industrialized, urbanized, and had more social cohesion because of its smaller size. Yet, they argued that India and China could begin to normalize their sex ratios at birth well before the two reach South Korean levels of development. The availability of jobs outside agriculture, greater internal migration, and higher levels of urbanization would reduce family pressure to have a son. Also, the study observed, “Public policies in China and India have sought hard to increase gender equity, through a wide range of interventions aimed at changing people’s perception that girls are less desirable than boys, as well as to bring women firmly into public life… This contrasts sharply with South Korea, where successive military regimes sought through their public policies to uphold muscular authoritarian Confucian traditions and keep women marginalised. These policies were gradually reversed only when three decades of military rule came to an end.”

Recent developments, be they in Haryana or rural China, suggest that their optimism is not misplaced. However, these are in all likelihood early victories, rather than the end of a longer war.

*Read more: [Steps towards a drone friendly sky](https://spontaneousorder.in/steps-towards-a-drone-friendly-sky/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Steps towards a drone friendly sky

Original: https://www.spontaneousorder.in/p/steps-towards-a-drone-friendly-sky

Author: Spontaneous Order

Published: 2021-05-12T14:25:43.000Z

Topics: drone-regulation, uas-rules, protectionism, aviation-policy

> One means of transportation that has emerged as the champion for safe and efficient future transport are drones. The Indian government has been quick to realize the immense potential for drone operations and had begun implementation of a legal framework..

**Summary:**

The Draft Unmanned Aircraft System Rules, 2020 (Draft UAS Rules) represent a significant expansion of India's drone regulations, originally legalized in 2018, by covering all registered UAS including autonomous ones and classifying them into five weight-based categories: nano (≤250g), micro (250g-2kg), small (2-25kg), medium (25-150kg), and large (>150kg). All except nano require registration, and manufacturers, importers, traders, owners, and operators need five-year authorizations via the DigitalSky platform, restricted to Indian nationals or majority-Indian-owned firms, effectively discouraging foreign participation in a market reliant on imported hardware and software. Positive steps include recognizing autonomous UAS for beyond-visual-line-of-sight operations with proof-of-concept clearance, mandating design standards like GPS and No Permission No Take-off (NPNT), and empowering the government to establish Unmanned Traffic Management Systems (UTM) and drone corridors. However, from a classical-liberal viewpoint, the rules risk over-regulation: undefined 'components' lead to ambiguities and multiple certifications, protectionism stifles technological advancement and R&D imports, privacy and data concerns are unaddressed without redressal mechanisms, and penalties up to two years imprisonment or ₹1 lakh fines loom large. While forward-looking, these gaps could hinder the nascent industry's growth, urging lighter regulation to foster a truly drone-friendly sky.

**Key points:**

- Draft UAS Rules classify drones into five weight categories, requiring registration and DigitalSky authorizations for all but nano drones, limited to Indian nationals or majority-Indian firms.
- Mandated design standards like NPNT and GPS apply to manufacturers, while autonomous UAS enable BVLS operations with DCGA clearance.
- Protectionist restrictions on foreign players harm an import-dependent industry lacking clear definitions for components and facing multiple certifications.
- Rules ignore privacy/data redressal and risk over-regulation, potentially slowing technological progress despite UTM and drone corridor provisions.
- Penalties include up to two years imprisonment or ₹1 lakh fine for violations.

**By Harris Amjad**

* * *

One means of transportation that has emerged as the champion for safe and efficient future transport are drones. The Indian government has been quick to realize the immense potential for drone operations and had begun implementation of a [legal framework](https://www.mondaq.com/india/aviation/733820/flying-drones-in-india-legal-from-1-december-2018-indian-aviation-ministry-unveils-the-national-drone-policy-2018) for the same as far back as 2018, making the use of drones in India legal for a number of purposes. However, this industry is in a very nascent stage and by nature is one that evolves rapidly with advancements in technology. 

The functioning of drones and advancements in the production has exposed a number of missing links in the policy and legal framework and thus a new set of [Draft Unmanned Aircraft System Rules, 2020](https://www.natlawreview.com/article/future-drones-india-draft-rules-2020) (**Draft UAS Rules**) were introduced by the Ministry of Civil Aviation (MoCA) in June 2020. The question that arises is whether these regulations aid in the process of drone production and usage or significantly hamper it.

These draft UAS rules certainly take a huge leap in drone regulations as they now extend not just to those UAS within the territory of India but to all that are registered in India. The new rules also extended the classification from just Remotely Piloted Aircraft Systems (RPAS) and model RPAS to include a third category, namely autonomous UAS. These are categorised on the basis of weight into 5 categories:

-   Nano: Less than or equal to 250 grams 
    
-   Micro: From 250 grams  to 2kg 
    
-   Small: From 2kg to 25kg 
    
-   Medium: From 25kg to 150kg 
    
-   Large: Greater than 150kg
    

Drones in all categories, except Nano, require registration. The part where the new rules significantly depart from the earlier ones is the area of authorization. All persons associated with the drone ecosystem (i.e. Manufacturer, importer, trader, owner, or operator) require authorisation which has to be applied through the government’s [DigitalSky](https://digitalsky.dgca.gov.in/home) platform. Upon authorization the person would receive a Unique Authorisation Number which would be valid for 5 years, unless revoked/suspended. The caveat is that the said authorisation can be obtained only by an Indian national or an organization whose majority stakeholders are Indian nationals. This, in effect, significantly discourages participation by foreign players in India’s market.

Additionally the manufacturer of the UAS is required to comply with certain design standards set by the Directorate General of Civil Aviation (DCGA), such as GPS, Return-to-home, Anti-collision light, ID plate, a flight controller with flight data logging capability, and No Permission No Take-off (NPNT). The NPNT is a system included within the DigitalSky platform which requires the drone pilot to request clearance every time before take-off, without which the drone would simply not be able to take-off. 

The inclusion of the third category of UAS, namely the autonomous UAS, is a much appreciated and forward looking measure. This addition allows the application of Drone systems that follow a predetermined route and operate Beyond Visual Line of Sight (BVLS) subject to a proof of concept clearance by DCGA. This move would lead to a significant boost in UAS-based commercial activities and enhance operations. The central government, according to these rules, has the authority to establish Unmanned Aircraft Traffic Management System (**UTM**) in the Indian airspace to facilitate UAS operations. This also enables it to create a drone corridor, which is a segregated airspace for operation of UAS. However, there is no provision that specifies the requirements to be met to establish a drone corridor.

The disregard of any of the rules laid down in Draft UAS Rules, 2020 can lead to a penalty which can involve a suspension of the authorisation of those found guilty and can lead to a maximum imprisonment period of two years or fine of maximum one lakh Rupees depending on the degree of the crime.

While these new rules significantly expand the scope of UAS operations and exhibit a forward looking vision, they still leave certain important questions and concerns unattended. Concerns of privacy and data collection (either by individuals or the government) have not been addressed in these regulations and no structure for redressal for such issues has been set up. 

The Draft UAS Rules fail to lay down the definition of ‘components’, which may include both hardware and software elements of a UAS. The restriction of foreign players in such a situation where the domestic industry is heavily reliant on import of both hardware and software from other countries can have a detrimental impact on the growth of this infant industry. As mentioned before the authorizations required for drone manufacturing can be obtained only by an Indian national or an organization whose majority stakeholders are Indian nationals, this discourages foreign industry leaders to make significant inroads in the Indian drone industry as the policy tips slightly in favour of Indian manufacturers. While this protectionist move might help build up the capacity of the Indian manufacturers, it might slow the technological advancements in this field as the Indian industry is not only heavily reliant on imports for drone parts but also for research and development in the field. Further, these laws require multiple certifications- for both, individual spare parts and the final drone. Some parts (such as propellers, batteries, motors/rotors etc.) required in production of drones might have uses in other industries and thus bring up an ambiguity on whether the UAS rules would be applied to them. It appears that the new policy that has been proposed is clearly lacking in some critical dimensions. 

While making the Indian airspace more “Drone-friendly” it is important to steer clear of over-regulation of the marketplace making it difficult for stakeholders to easily produce and operate drones.

*Read more: [The story of a budget private school owner from India](https://spontaneousorder.in/the-story-of-an-anonymous-private-school-owner-from-india/)*

* * *

**About Harris Amjad**

Harris is a second-year undergraduate student of History at St. Stephen’s College, Delhi, keen on issues of public policy and international relations. Apart from reading and writing, he enjoys being behind a camera taking photographs or making videos and short films.

## The story of a budget private school owner from India

Original: https://www.spontaneousorder.in/p/the-story-of-an-anonymous-private-school-owner-from-india

Author: Spontaneous Order

Published: 2021-05-10T14:58:31.000Z

Topics: private-schools, education-regulation, bureaucratic-red-tape, school-autonomy

> (The interviewee runs an affordable private school in a low-income neighbourhood in New Delhi, India. Given the sensitive revelations on red tape and corruption, the interviewee requested anonymity. Some details are edited out for brevity and anonymity...

**Summary:**

The anonymous owner of a budget private school in low-income New Delhi recounts his journey from a failing government school—where he learned no alphabet until sixth grade and teachers bore no responsibility for outcomes—to founding his own school on ancestral land in 1992. The school broke even only after 2002, with zero income for a decade, forcing summer jobs in Dubai earning 900 Dirhams to cover family costs. Classical-liberal critique highlights suffocating regulations: essentiality certificate requires three months of bureaucratic visits; scheme of management approval took 1.5 years; even a kitchenette needs health certificates, and building audits demand architects. Corruption is rampant—'purchasing' a water test certificate for 800 rupees, bribes of 1-1.5 lakh rupees a decade ago (now higher)—as officials from peons to officers extract rents, viewing private schools as profiteers despite no-profit rules and mandates to pay teachers at 7th Pay Commission scales. The owner bent rules via bribes to survive red tape, not for personal gain. Hypocrisy abounds: officials send kids to private schools while regulating them punitively. Pre-British India had 550,000 autonomous schools; the call is to dismantle colonial-era interventions, grant autonomy, and let stakeholders drive education enterprise.

**Key points:**

- Regulatory hurdles like essentiality certificates and scheme of management approvals delay school operations by months to years, diverting passion into paperwork.
- Corruption demands bribes from 1-1.5 lakh rupees (now higher) and fake certificates like water tests for 800 rupees to navigate inspections.
- No-profit rules coexist with mandates to pay private teachers at government 7th Pay Commission scales, squeezing budget schools serving the poor.
- India needs to revive pre-British model of 550,000 autonomous schools by reducing government intervention and granting operational freedom.

**By Spontaneous Order**

* * *

*(The interviewee runs an affordable private school in a low-income neighbourhood in New Delhi, India. Given the sensitive revelations on red tape and corruption, the interviewee requested anonymity. Some details are edited out for brevity and anonymity.)*

My parents enrolled me in a government-run school as it was the only available, affordable and accessible option for them. Throughout high school, the only thing I learned was the application for a sick leave even though I didn’t learn an alphabet till the sixth grade.  

I didn’t dislike my Municipal Corporation-run school. I just wasn’t satisfied by the school’s curriculum that didn’t cater to the needs of many students like me. They certainly had a documented syllabus, but they (teachers) had no onus whatsoever for the learning outcomes.

I opted for a commerce degree because my friend’s father wanted him to join his business and I wagged my tail behind him. Until the second year of my bachelor’s degree, I couldn’t distinguish between ‘credit’ or ‘debit’. I dropped out in the final year because I faced a linguistic barrier. Having opted for English as the medium of instruction, I later realized it was not my cup of tea. 

My next phase of life was joining the Indian Army. Soon, the realization dawned upon me that I came to this world for better things. 

In 1992, when I was back from my stint in the Army, my parents asked me to run their business. Yet I was not sure; business wasn’t my calling either. 

My parents got tired, and so did I. That’s when my parents gave me ancestral land to start my own school. But the school did not make any profit for the first ten years. From 2002 to 2012, my income was zero. With familial responsibilities increasing my fiscal burdens, I went to Dubai every summer to earn 900 Dirhams and finance my expenses for the rest of the year here. 

\-x-

The law isn’t friendly to passion, it rather works on hard facts. The law did not bother about the inner drive I had for revolutionizing modern education. No matter what education you’re imparting or however genuine your intention is, for “them”, the classroom sizes mattered. 

In 2006, I got recognition for my school, after hundreds of certifications and documentations I filed. The scheme of management – a standard document to run the school was to be approved to run ones’ school. It took me one and a half years to get this one approved with my name and address without any objections. 

The time spent to procure this one document could have made me a seer in a parallel universe, perhaps.

The essentiality certificate (EC) is needed prior to the establishment of a school. Issuance of essentiality certificates is ministerial and again has many loopholes, requiring me to regularly visit government offices. From “zone” to “Act-branch” to the “district office”, getting this piece of paper with five sentences on it takes three-month efforts of regularly knocking on the doors of government officials. 

*\[Check out this CCS study “[Licenses to open a school: it’s all about money](https://ccs.in/licenses-open-school-it-s-all-about-money)”\]*

Something as simple as ‘change of address’ involved heaps of documentation and reduced us clerical puppets in the clutches of the governments, time and again. The government thinks of private school owners as a group of money mongers. Ironically, a government official who hasn’t completed his own education is assigned to oversee approval of such documentation. 

We don’t have a canteen for students. We just have a kitchenette to prepare tea for employees. We still have to show a health certificate every time a government official comes down for inspection.  

Government asks us to call an architect for a building audit to make sure that our building won’t crumble in an earthquake. Student safety is a secondary concern to them; they seem more invested in collecting documents. These documents include certificate of registration for society, essentiality certificate,  certificate of recognition,  certificate of upgradation, certificate of affiliation, building fitness certificate, health certificate, site plan for the school building, water testing report, scheme of management. 

From the office peon to an old officer in a municipal corporation, everyone was aware of this charade. If you don’t comply, you’ll have to pay hefty fines.

I had to ‘purchase’ a water test certificate costing 800 rupees because the regular channel would have taken me years.

10 years ago, one to one and a half lakh was a neat numerical to get things done. This hasn’t changed today; only the amount has gone up by a few zeroes. 

*\[Check out this CCS video “[what does it take to open a private school in Delhi](https://www.youtube.com/watch?v=zk9T5mG7i5A)”\]* 

Private schools are not allowed to earn profit. Yet no teacher (in a private school) can be paid below the 7th pay commission – the government scale of salary for government employees. 

*\[Read “[Stop parents from spending on education](https://spontaneousorder.in/nep_satire/)” and “[deconstructing disdain for for-profit education](https://www.educationworld.in/deconstructing-disdain-for-for-profit-education/)”\]*

The education minister should ideally set an example by not accepting his steady government salary.

\-x-

I never broke rules, bent them rather.  Setting up a school taught me the justification of bribery to fight the red tape. I am not proud of it. Speaking the truth in times of universal deceit is criminal indeed. So I lied for the greater good. I have never and will never take a bribe for myself.

I felt overwhelmed quite often by the reality I was stuck in. The anti-bribery laws are of no help. The law views citizens who pay bribes as willing participants, and therefore equally liable and subject to prosecution.  

I was struggling in the same year (of setting up the school) as my father was a critical patient. The memory of queues for documentation and the maltreatment of government officials still pinch me today.

**\-x-**

Government officials who hold prejudices against private schools send their kids to private schools. Kids from underprivileged students attend the government school.  

If the security of classrooms and schools is such a concern, why can’t the government deploy policemen in each classroom?

If they are so concerned with water quality, why not send a water tank on a daily basis for the children of my school to ensure a regular and safe drinking supply?

My school would then become the heavenly abode of education. 

Alas!  This won’t happen. Because how will they earn their bribes? 

\-x-

Democracy is not a panacea. Government plays the enemy more often than not and scares private schools, with constant threats. 

Did you know that India had 550,000 *autonomous* schools before British rule? 

That’s what we need today: to overcome the colonial hangover and give more autonomy to schools. Government must stop its intervention and believe in the enterprise of various stakeholders in education, to work in tandem. 

*Interviewed by Prashant Narang | translated by Tanya Mittal*

*(Prashant Narang is Senior Fellow – Research & Training Programs at Centre for Civil Society, New Delhi)*

*Read more: [School financing in India: How budget private schools are losing out](https://spontaneousorder.in/school-financing-in-india-how-budget-private-schools-are-losing-out/)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## School financing in India: How budget private schools are losing out

Original: https://www.spontaneousorder.in/p/school-financing-in-india-how-budget-private-schools-are-losing-out

Author: Spontaneous Order

Published: 2021-05-07T13:42:41.000Z

Topics: education-financing, budget-private-schools, rte-reforms, school-regulations

> As India makes significant progress in ensuring access to education and enrolment in schools, the learning crisis is not yet solved. Pandemic-induced school closures are expected to have far-reaching consequences on schooling, galvanising the need for e..

**Summary:**

India's budget private schools (BPSs), numbering 200,000-400,000 and enrolling 70% of private school students, represent a vital sector meeting parental demand for affordable education amid a persistent learning crisis exacerbated by pandemic closures. However, BPSs face severe financing constraints due to heavy regulations, including RTE Section 15's non-profit mandate, which bars them from bank loans as not-for-profit entities and deters investors wary of fragmented, low-margin operations that take years to reach 20% operating margins. State fee-collection bans in Tamil Nadu, Karnataka, Maharashtra, and others compounded revenue losses. Philanthropy is limited, venture capital hesitant, and NBFCs like Indian School Finance Company and Varthana offer loans at over 20% interest with low awareness among owners. Cash flow issues from delayed parent payments and high setup costs further hinder scalability. From a classical-liberal viewpoint, reforming restrictive RTE rules to allow for-profit schools—as in Haryana, Maharashtra, and Uttar Pradesh—along with simplifying banking processes, providing collateral-free loans, and boosting financial literacy, would enable investment, expansion, and quality improvements, fostering a competitive ecosystem where private initiative drives learning outcomes for low-income children.

**Key points:**

- RTE Section 15's non-profit requirement prevents BPSs from accessing bank credit, limiting scalability and investment.
- Pandemic-era fee bans in states like Tamil Nadu, Karnataka, and Maharashtra caused severe revenue losses for BPSs.
- NBFCs provide loans at over 20% interest, but low awareness and high collateral needs deter BPS owners.
- Reform state RTE rules to permit for-profit schools, as in Haryana, Maharashtra, and UP, to attract investors.
- Government should incentivize banks for seamless, collateral-free loans and raise financial literacy among BPS owners.

**By Swati Rao**

* * *

As India makes significant progress in ensuring access to education and enrolment in schools, the learning crisis is not yet solved. Pandemic-induced school closures are expected to have far-reaching consequences on schooling, galvanising the need for education policy to focus on the primary goal of education, ensuring learning for all children irrespective of whether they are enrolled in government or private schools. 

With [70% of private school students](https://centralsquarefoundation.org/State-of-the-Sector-Report-on-Private-Schools-in-India.pdf) enrolled in over  [200,000-400,000 budget private schools (BPSs),](https://idronline.org/budget-private-schools-education-india/) this growing demand among parents for BPSs is indicative of the potential scale of this sector. Unfortunately, the affordable schooling ecosystem has been hard-hit by the pandemic. BPS owners have reported loss in revenues due to school closures and non-payment of fees. State-level regulations added to this financial distress, with [Tamil Nadu](https://timesofindia.indiatimes.com/city/erode/tamil-nadu-minister-tells-schools-not-to-collect-fees/articleshow/74990006.cms), [Karnataka](http://www.schooleducation.kar.nic.in/pdffiles/CPIOrder30032020.pdf) and [Maharashtra](https://www.thehindubusinessline.com/news/education/private-schools-make-plea-to-maharashtra-govt-to-remove-ban-on-fee-collection/article31430109.ece) mandating schools to not collect fees and [Haryana, Telangana, Delhi and Madhya Pradesh](https://centralsquarefoundation.org/State-of-the-Sector-Report-on-Private-Schools-in-India.pdf) requiring them to only collect tuition fees. 

In India, private schooling is highly regulated with both the central and state governments imposing regulations on licensing, recognition and inspection of schools, as well as setting up barriers to accessing financing. Operating in a highly fragmented and competitive environment, BPS owners need significant investment in order to meet the input and entry requirements. Sources of funds include [philanthropic funding](https://ccs.in/sites/default/files/publications/chapter_11_reasons_for_hope_for_investing_in_the_bps_sector_in_india.pdf), [investments](https://core.ac.uk/download/pdf/4430482.pdf) from venture capitalists and social investors, and [loans](https://core.ac.uk/download/pdf/4430482.pdf) from banks and financiers. However, philanthropic funding caters only to a small population of schools, and the non conducive regulatory environment makes banking institutions and investors wary of investing. 

There are major impediments to access and availability of capital for BPSs. Legal and regulatory hurdles, in particular, Section 15 of RTE which states that “school is not run for profit to any individual, group or association of individuals or any other persons”, have long prevented BPSs from accessing credit. Banks refuse to provide loans to not-for-profit organizations. Moreover, [lack of collateral and complicated documentation processes](https://ccs.in/internship_papers/2014/321_financial-need-analysis-of-budget-private-school-owner_riya-garg.pdf) deter BPS owners from seeking credit from banks. To address this gap in the market, Non Banking Financial Companies like [Indian School Finance Company](https://isfc.in/) and [Varthana](https://varthana.com/school/) provide medium term loans to affordable private schools.  Despite providing easy loan taking processes, high interest rates (over 20%) and [low awareness](https://core.ac.uk/download/pdf/4430482.pdf) about the existence of these services among edupreneurs has resulted in limited borrowing.  

BPSs are fragmented and spread across geographies, with the existence of thousands of small private schools that are run by individuals. Due to high upfront investment and fixed costs, these schools take several years to reach a 20% [operating margin](https://www.fsg.org/sites/default/files/Understanding%20the%20Affordable%20Private%20School%20Market%20in%20India.pdf), providing investors no financial incentive to invest in these ventures. Further, the lack of models that can scale successfully also limits the amount of margins. Low income parents often delay paying fees, negotiate discounts and frequently move schools leading to challenges in managing cash flows. From an investor’s perspective, a more organized and structured ecosystem would be able to facilitate business models that can provide returns comparable to alternate investment avenues.

Non-profit status makes access to credit more challenging for BPSs. But currently, [Model and state RTE Rules](https://ccsindia.org/restrictions-profit-education-india) restrict for-profit schools from qualifying for recognition. Under several state RTE Rules, only societies, trusts and Section 8 companies can run schools. Several private school alliances like NISA, FICCI Arise etc. and educationist lobbying groups have long been [advocating for reforms](https://www.business-standard.com/article/education/declare-education-for-profit-educationists-private-schools-urge-govt-120012801670_1.html) to these restrictive policy provisions. Other states need to take inspiration from Haryana, Maharashtra and UP RTE Rules which allow companies to run recognised schools. For investors and financiers to see BPSs as a viable investment option, affordable schooling needs to become scalable and profitable.

BPS owners are discouraged from accessing credit through banks and NBFCs due to [lack of awareness](https://ccs.in/internship_papers/2014/321_financial-need-analysis-of-budget-private-school-owner_riya-garg.pdf) and trust in the banking system. Complicated banking processes and high collateral requirements also act as deterrents. Government initiatives to raise financial awareness and literacy among these groups, incentivising banks and NBFCs to create easy and seamless loan making and documentation procedures, and allowing BPSs to access collateral free loans will go a long way. 

For a BPS owner, financing continues to be difficult, whether through investments or loans. High infrastructure and set-up costs, compliance costs and disrupted cash flow prevent credit providers from viewing BPSs as a good investment option. This prevents these schools from making large investments in expansion or quality improvement, which in turn impacts their scalability and salability, further reinforcing the loop in which education, learning and students lose out.

*Read more: [What a carbon tax can and can’t achieve against climate change](https://spontaneousorder.in/what-a-carbon-tax-can-and-cant-achieve-against-climate-change/)*

* * *

**About Swati Rao**

Swati Rao is Assistant Manager, Advocacy at Centre for Civil Society. Previously, she has worked for the US Department of State, Swaniti Initiative in India, and holds an Erasmus Mundus Masters in Public Policy and B.A. LL.B (Hons) from Hidayatullah National Law University, Raipur.

## What a carbon tax can and can’t achieve against climate change

Original: https://www.spontaneousorder.in/p/what-a-carbon-tax-can-and-cant-achieve-against-climate-change

Author: Spontaneous Order

Published: 2021-05-05T14:13:56.000Z

Topics: carbon-tax, climate-change, india-policy, pigouvian-taxes

> It has sometimes been described as the most important number that you have perhaps never heard of. The social cost of carbon captures the current monetary value of the costs of climate change that will pile up in the future. That number is important in ..

**Summary:**

The social cost of carbon, central to climate policy, is fraught with uncertainty, with estimates ranging from Nicholas Stern's $85 per tonne to William Nordhaus's $8 per tonne; the IMF recently proposed a global carbon tax of $75 per tonne to limit warming to 2°C per the Paris Agreement. A carbon tax is superior to quantity restrictions like carbon credits or subsidies for specific renewables, as it leverages the price system—a classical-liberal preference—allowing markets to innovate without governments picking winners. India's recent fuel tax hikes and quadrupled coal cess approximate this, though only a third of post-2014 oil price declines passed to consumers. However, a $75/t tax would spike prices dramatically: coal by 230%, natural gas by 25%, electricity by 83%, petrol by 13%, making it politically untenable in a developing nation where the poor need affordable energy and influential groups consume most. Globally, a uniform tax ignores historical emissions from industrialized nations, unfairly burdening developing countries; taxes suit national contexts, not global imposition. India should embrace carbon taxes domestically under Common but Differentiated Responsibilities, participate in global efforts, but insist developed nations finance its clean energy transition given its low per capita energy use and historical innocence.

**Key points:**

- A carbon tax is preferable to quantity controls or targeted subsidies because it internalizes externalities via prices, enabling market-driven innovation.
- IMF's $75 per tonne global carbon tax would raise Indian energy prices sharply—coal 230%, electricity 83%—posing political challenges amid poverty and inequality.
- Global uniform carbon tax unfairly penalizes developing countries for historical emissions by rich nations since the Industrial Revolution.
- Climate policy must adhere to Common but Differentiated Responsibilities, with India joining mitigation while demanding financing from the developed world.

**By Niranjan Rajadhyaksha**

* * *

It has sometimes been described as the most important number that you have perhaps never heard of. The social cost of carbon captures the current monetary value of the costs of climate change that will pile up in the future. That number is important in a world that needs to adapt to erratic rain patterns, rising sea levels and heat waves.

Economists working on climate change have had to grapple with several technical issues to estimate the social cost of carbon. One of the trickiest—which people in financial markets will appreciate—is selecting the rate at which future costs are to be discounted to arrive at their monetary value today. Another is to think of climate change policy in terms of tail risks rather than averages, or extreme events that have relatively low probability but whose impact could be catastrophic. It is the same reason we buy insurance.

Profound uncertainty about the impact of climate change means that estimates of the social cost of carbon have been all over the place. Consider two of the most influential estimates that were released in recent years. Nicholas Stern of the London School of Economics estimated it at $85 per tonne of carbon. William Nordhaus of Yale University came up with a much lower estimate of $8 per tonne. It gives us some idea about the fragile nature of such estimates.

It is against this backdrop that economists at the International Monetary Fund (IMF) have argued in a recent report that the world needs a global carbon tax in the next 10 years. Their recommendation is $75 per tonne of carbon. The IMF team argues that such a Pigouvian tax will help limit global warming to 2 degrees Celsius above pre-industrial levels, as embedded in the 2015 global climate change agreement in Paris.

Economists have often debated whether the best way to reduce carbon use is via higher prices or through quantity restrictions. The consensus now is that a carbon tax is the better policy response. The decision of the Narendra Modi government to increase fuel taxes as well as quadruple the coal cess is sometimes interpreted as a variant of a carbon tax. Only a third of the sharp decline in global oil prices after 2014 was passed on to consumers.

A carbon tax increases the price that consumers pay for energy. What will be the price impact of a carbon tax of $75 per tonne of carbon consumed in India? The IMF estimates that a tax of this magnitude will increase the price of coal by 230%, natural gas by 25%, electricity by 83% and petrol by 13%. Such steep price hikes will necessarily make such a tax a political hot potato, especially in a developing country like India, where on the one hand politically influential groups such as the urban middle class or rich farmers are the biggest consumers of energy, and on the other, people emerging out of poverty need access to cheap electricity and fuels. The proceeds of the carbon tax could be used to protect the household budgets of poor families, but that is easier said than done, despite the availability of the JAM trinity of Jan Dhan accounts, Aadhaar numbers and mobile phones.

The idea of a global carbon tax will run into two problems. First, it will penalize incremental carbon emissions rather those that have already been spewed into the atmosphere since the Industrial Revolution. A homogenous global carbon tax will, in effect, impose costs on developing countries rather than those that have been responsible for most of the existing stock of pollution. Second, taxes are part of national social contracts that emerge out of very specific conditions that cannot necessarily be replicated on a global scale.

The idea of a carbon tax in itself is a good one. It does its work thorough the price system, rather than rationing quantities through instruments such as carbon credits. It is superior to subsidies for specific alternate energy sources; such targeted subsidies assume that governments have the capability to pick winners among a big set of emerging technologies.

However, the underlying principle should be of Common but Differentiated Responsibilities and Respective Capabilities that has been recognized by the United Nations Framework Convention on Climate Change.

Climate change is undoubtedly one of the most serious challenges for the entire world, and the poor in countries such as India are especially at risk. A carbon tax can eventually be an important part of any mitigation strategy—from new technologies to rethinking cities to lifestyle changes. Global cooperation is also needed, since climate change is essentially a global challenge. India should be part of the global alliance to fight the problem, but it also needs to reiterate that it is not responsible for what has been pumped into the atmosphere over the past three centuries, that its average citizen consumes too little energy, and that the developed world needs to help finance its transition to cleaner energy.

*This article was originally published in [Live Mint](https://www.livemint.com/opinion/columns/opinion-what-a-carbon-tax-can-and-can-t-achieve-against-climate-change-11571163318243.html) on 15 Oct 2019*.

*Read more: [The Glass Ceiling for Women in Justice](https://spontaneousorder.in/the-glass-ceiling-for-women-in-justice/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Spontaneous Dialogue Ep 8: India needs a Second Green Revolution

Original: https://www.spontaneousorder.in/p/spontaneous-dialogue-ep-8-india-needs-a-second-green-revolution

Author: Spontaneous Order

Published: 2021-05-05T13:38:59.000Z

Topics: agriculture, farm-policy, green-revolution, food-subsidies

> India’s farm policy since the green revolution has not led to improved farmer productivity or income. The complex system of procuring and selling grain through the Food Corporation of India and the Public Distribution System is full of leakages and has

**Summary:**

India’s farm policies since the first Green Revolution have failed to improve farmer productivity or incomes, according to this podcast episode from Spontaneous Order, a classical-liberal outlet critiquing pseudo-socialism. The post highlights the inefficiencies of the state-run system for procuring and selling grain through the Food Corporation of India (FCI) and Public Distribution System (PDS), which is riddled with leakages and has not fulfilled promises of remunerative prices for farmers or affordable grain for consumers. From a classical-liberal perspective, the episode advocates for a 'Second Green Revolution' as the essential path forward, exploring reforms to India's farm policy that prioritize market dynamics over bureaucratic intervention. This aligns with Spontaneous Order's mission to promote liberal ideas against dominant statist values in Indian history.

**Key points:**

- India's post-Green Revolution farm policies have not boosted farmer productivity or incomes.
- The FCI and PDS suffer from leakages, failing to deliver remunerative farming or cheap grain.
- A Second Green Revolution is crucial for reforming India's farm policy.

**By Spontaneous Order**

* * *

India’s farm policy since the green revolution has not led to improved farmer productivity or income. The complex system of procuring and selling grain through the Food Corporation of India and the Public Distribution System is full of leakages and has not delivered on the promise of remunerative farming and cheap grain. This podcast explores the path forward for India’s farm policy and explains the importance of having a “Second Green Revolution”.

Listen now:

To listen to all other episodes of the Spontaneous Dialogue Podcast on your favourite platforms, click [here](https://anchor.fm/spontaneousdialogue).

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## The Glass Ceiling for Women in Justice

Original: https://www.spontaneousorder.in/p/the-glass-ceiling-for-women-in-justice

Author: Spontaneous Order

Published: 2021-05-03T14:30:55.000Z

Topics: gender-diversity, justice-system, police-reform, judicial-reform

> Over the years, India’s justice delivery system has witnessed several path breaking and trailblazing women lawyers and judges who have etched their names in history. But just like the deficits in India’s capacity to deliver justice, gender imbalance i

**Summary:**

The India Justice Report 2020 exposes a persistent glass ceiling for women across India's justice pillars—police, prisons, judiciary, and legal aid—mirroring broader deficits in justice delivery capacity. In police, national female representation averages 10% (up from 7% in 2017), with targets of 33% in most states unmet and officer-level shares as low as 5-6% in Bihar and Himachal; many states need over 100 years for parity. Prisons average 13% women staff, with declines in Delhi (15% to 13%), Uttarakhand (3%), and Goa (2%), exacerbating vulnerabilities for female prisoners due to male staffing. Judiciary sees 30% women in subordinate courts but only one in nine in high courts (national average ~11%), with gains in Jammu & Kashmir (15 points), Chhattisgarh (14), Himachal (11), but drops in Bihar (-6.3 points). Legal aid stagnates at 18% women panel lawyers and 35% paralegals. Linking this to 20.7% female LFPR and patriarchal norms, the author advocates classical-liberal solutions: reframe domestic work attitudes to boost participation, elevate women to leadership to curb bias, strengthen autonomous anti-harassment committees, yielding diverse forces that empower women to seek justice.

**Key points:**

- India's police have 10% women nationally, but officer-level representation remains below 6% in top-target states like Bihar, signaling a glass ceiling.
- Prisons average 13% women staff, with Uttarakhand and Goa at 2-3%, leading to male oversight of female prisoners and heightened vulnerabilities.
- Judiciary features 30% women judges in subordinate courts but only ~11% in high courts, with uneven progress across states.
- Solutions include shifting domestic workload attitudes, promoting women to leadership roles, and bolstering anti-harassment mechanisms to shatter the ceiling and enhance justice access.

**By Swati Singh**

* * *

Over the years, India’s justice delivery system has witnessed several path breaking and trailblazing women lawyers and judges who have etched their names in history. But just like the deficits in India’s capacity to deliver justice, gender imbalance is plaguing the four pillars of justice- judiciary, police, prisons and legal aid. The recently released [India Justice Report 2020](https://www.tatatrusts.org/Upload/pdf/ijr-2020-overall-report-january-26.pdf) shows us the grim reality of the glass ceiling for women in justice. 

The report analyses India’s structural and financial capacity to deliver justice, using the latest available government data. It does so by ranking states based on identified parameters like infrastructure, budget allocations, work load, vacancies etc. but most importantly, on gender diversity. These rankings are across 4 pillars: Police, Prisons, Judiciary and Legal Aid. Let’s look at the status of women in each one of these:

**Police:**

Women representation in India’s police is abysmal. Most states have set a target of achieving 33% women representation in their police forces, however, there are still eight states with no such targets. Tamil Nadu is the only state to have reduced its target from 33 to 30% since 2017. Bihar stands out with the highest target at 38%. However, if we look at actual numbers, the national average for women representation is 10% (a marginal increase from 7% in 2017).

But these numbers hide more than they reveal. For instance, though Bihar has the highest reservation quota for women, only 6% women are at the higher officer level. In Himachal, this number is 5%. This is the problem of the glass ceiling; an invisible barrier that is preventing women from rising beyond a certain level in India’s police forces.

The report also shows us that most states and union territories are likely to take more than 100 years to see a strengthened women police force.

**Prisons:**

Similar to the police force policy, even in prisons, the set standard of women working in prisons is 33%. None of the 18 states surveyed are close to meeting this number. The national average of women representation under this pillar, divided into officers, cadre staff, correctional staff, and medical staff, is 13%. The report shows us that though most states and UTs have made steady progress, women representation has in fact fallen in Uttarakhand, Delhi and Goa. In Delhi, the women staff in prisons fell from 15 to 13 per cent. Uttarakhand (3 percent) and Goa (2 percent) have the lowest shares of women working in prisons.

It’s shocking to read these numbers while knowing that Indian jails constantly remain under-staffed. Due to the ambiguity of laws and lack of uniformity relating to prisons, there continues to be limited female staff in prisons. This often leads to [male staff becoming responsible](https://sabrangindia.in/article/women-indian-prisons-do-not-get-gender-specific-services-lack-basic-sanitation-hygiene#:~:text=The%20lack%20of%20female%20staff,be%20provided%20by%20female%20staff.&text=Most%20jails%20are%20lacking%20in%20basic%20facilities%20of%20sanitation%20and%20hygiene) for female prisoners which is highly undesirable. Structural exclusions within prisons makes female prisoners from marginalised communities extremely vulnerable. 

**Judiciary:** 

On average, the share of women judges in subordinate courts has risen from 28 per cent to 30 percent. While one in three judges in the subordinate courts is a woman, in the high courts, only one in nine judges is a woman. For instance, Goa has the largest share of women in their subordinate courts (72%) but only 13% in High Courts. Thus, the glass ceiling remains intact. 

According to the report, the marginal improvement in gender diversity in High Courts  in comparison to 2019, took place in three states namely: Jammu and Kashmir (15 percentage points), Chhattisgarh (14 percentage points), and Himachal Pradesh (11 percentage points). Previously, none of the three states had a woman judge in the state’s high court.

Unfortunately on the other end of the spectrum, states like Bihar, Madhya Pradesh, Rajasthan, and Uttar Pradesh do not show much improvement. In fact the largest fall from the previous year of 6.3 percentage points was in Bihar. It’s not a shocker that Uttar Pradesh and Bihar have the worst justice system in India. While Uttar Pradesh stands at the bottom of the barrel, Bihar ranks number 17, in terms of justice delivery. 

**Legal aid** 

Traditional judicial adjudication is a very expensive process and the provision of legal aid makes the law and legal services accessible to the poor. It remains necessary to uphold human rights and equality. 

Unfortunately, Indian [women panel lawyers](https://dslsa.org/hrf_faq/who-are-panel-lawyers/#:~:text=%E2%80%9CPanel%20Lawyer%E2%80%9D%20means%20a%20lawyer,needy%20persons%20under%20the%20scheme) (who render free legal services to the needy) and [paralegals](https://districts.ecourts.gov.in/para-legal-volunteers) (trained in subsidiary legal matters) are least heard of in this domain of legal aid. The presence of a large number of women among legal services providers is also important for reaching out to a section that traditionally faces sociocultural barriers in accessing legal services.Under India’s [Legal Aid](https://nalsa.gov.in/acts-rules) law, there should be a compulsory paralegal volunteer to offer legal aid to file a case with the victim or the family at the police station. These intermediaries bridge the gap between the common people and the Legal Services Institutions, and the appalling shortage leads to obstruction of justice delivery.

Nationally, the share of women amongst the panel lawyers, has stagnated at 18 percent, and among paralegals at about 35 per cent this year. At nearly 73 per cent, Goa had the highest share amongst all the states while West Bengal had the lowest with just one woman out of every five paralegals. 

**Conclusion:** 

The glass ceiling for women is not shocking, considering how abysmal women’s participation in the labour force is ([20.7 percent in 2019](https://www.statista.com/statistics/983020/female-labor-force-participation-rate-india/#:~:text=In%202019%2C%20about%2020.7%20percent,reflects%20the%20economy's%20active%20workforce.)). On top of that, the patriarchal structures make the glass ceiling inevitable. But there are solutions:

-   **Domestic workload** is one of the biggest reasons why women do not participate in the labour force. Reducing this burden by changing our attitudes towards domestic work being a woman’s responsibility would go a long way in increasing participation.
    
-   With **increased female representation in higher level positions**, gender discrimination and bias would also significantly reduce. Women would be incharge of making important decisions of national significance which would inspire other women to join the justice workforce.
    
-   **Stronger and autonomous harassment/internal complaints committee bodies** need to exist to ensure that women feel safe and comfortable with working in the 4 justice pillars that are primarily dominated by men.
    
-   A more gender diverse justice workforce would not just mean more women in courts, police stations and legal aid clinics, but would **increase the willingness of other women to seek justice**.
    

The spin offs of shattering the glass ceiling for women in justice are countless.

*Read more: [Higher Education Reforms in India](https://spontaneousorder.in/higher-education-reforms-in-india/)*

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## Higher Education Reforms in India

Original: https://www.spontaneousorder.in/p/higher-education-reforms-in-india

Author: Spontaneous Order

Published: 2021-04-30T12:39:51.000Z

Topics: higher-education, research-funding, education-reform, multidisciplinary-education

> Every year, organizations such as QS and Times Higher Education released their lists of top universities and educational institutions around the world. A consistent theme is the absence of Indian institutes as part of the lists. Barring the appearance o..

**Summary:**

India's higher education institutions largely absent from global rankings like QS and Times Higher Education, except for a few IITs in science/technology and IIMs in business, due to poor research output and academic reputation. Reforms are urgently needed to enhance research capabilities, where government funding is skewed: IITs, IIMs, and NITs, representing just 3% of students, receive 50% of funds, leaving others under-resourced for R&D. The National Research Foundation (NRF) under NEP 2020 should allocate funds without distinguishing public from private institutions and involve private sector for incubation centers and labs, as echoed by AICTE chairman. Introduce holistic, multidisciplinary education by merging regulators like UGC and AICTE into a single commission, allowing students freedom to select courses across streams rather than rigid programs. Improve opportunities up the academic ladder with higher PhD stipends, more postdoc positions, and private incentives to retain talent and curb brain drain. These classical-liberal reforms—emphasizing competition, private investment, and reduced regulatory silos—can elevate Indian universities, attract foreign students, and position India as a global education hub.

**Key points:**

- Increase research funding via NRF equally for public and private institutions, with private sector participation for labs and incubators.
- Merge UGC, AICTE, and other regulators into a single commission to enable multidisciplinary education and student course flexibility.
- Raise PhD stipends, expand postdoc positions, and introduce private fellowships to retain top academic talent in India.

**By Arjun Gargeyas**

* * *

Every year, organizations such as [QS](https://www.topuniversities.com/subject-rankings/2021) and [Times Higher Education](https://www.timeshighereducation.com/world-university-rankings/by-subject) released their lists of top universities and educational institutions around the world. A consistent theme is the absence of Indian institutes as part of the lists. Barring the appearance of a few Indian Institute of Technology (IITs) in the Science and Technology field and a few Indian Institute of Management (IIMs) in the Business and Management Studies field, India still remains a no show with respect to competing with the world’s most elite group of universities. These rankings are generally determined based on the academic reputation and research output of universities which serve as an incentive for attracting foreign students. 

Independent India’s vision to be an educational hub and provide quality technical education has definitely not gone according to plan. There is an urgent need for reforming the way higher education institutions work in the country so as to get the best out of them.

**Research Capabilities**

Each university has its own way of indulging in research and development but the budget allocation from each institution towards setting up research centres have been minimal and not encouraging. The academic reputation of a higher education institute is directly proportional to the quality of research done in the institute. There is a need for improving the capacity of institutes in terms of R&D which can result in the output of well-recognised papers. This can only be done with increased spending on research and investment in the field. It is seen that government funding is [highly skewed towards IITs and IIMs](https://theprint.in/india/governance/iits-iims-nits-have-just-3-of-total-students-but-get-50-of-government-funds/89976/) while the rest get peanuts in terms of capital to set up effective and state of the art research centres. The funding that PhD students receive after the money given to the department is disbursed to the senior Professors and others is not sufficient to even set up basic experiments and surveys. 

The setting up of the National Research Foundation (NRF), as per the [National Education Policy (2020)](https://www.education.gov.in/sites/upload_files/mhrd/files/NEP_Final_English_0.pdf) is a small step towards encouraging and prioritising research at educational institutions. The primary goal of the NRF will be to ensure adequate funds are allocated for research work at higher education institutes. But it is imperative that the NRF should function in a way that no distinction is made between public and private institutions in research funding. This has also been [echoed by the chairman of the AICTE](https://www.livemint.com/news/india/there-must-be-no-distinction-between-private-public-in-research-funding-aicte-11614354351323.html) who notes that except for a few IITs and IISc, research work has been absent in most other universities across the country. It is also necessary to include the participation of the private sector towards the setting up of the NRF as this would substantially increase the investment and also provide the private companies to take their advancements in the field directly to the students. Incubation centres and labs set up with the help of successful corporates will be instrumental in increasing the research output and creating a win-win situation for both the private sector and the universities.

**Holistic Education**

The concept of a university in the country is different to what we see in the West. The University Grants Commission (UGC) has created a system of Public, Deemed and Private universities along with Institutes of National Importance which are technically not universities but autonomous institutions. The concept of different colleges (of different streams like Law, Engineering, Medicine) under the umbrella of a university, with the student free to tailor their program by selecting courses from different colleges, has not been established in the country with certain exceptions. A student is tied down to a single course and specific subjects with no opportunity to explore his/her choices. The idea of multidisciplinary education which encompasses the freedom of studying has to be introduced and encouraged. 

The [recent bill which seeks to merge all higher education regulators](https://www.hindustantimes.com/india-news/bill-to-merge-aicte-ugc-in-final-stages/story-30Q8YPFcgzLBq4OoUQgTsK.html) such as the UGC and the All India Council for Technical Education (AICTE) into a single entity is a welcome move that can place all higher education institutes under a single framework. Earlier, each body was focused on sectoral education like AICTE for technology education and Medical Council of India (MCI) for medical education. A single Education Commission, which has been proposed, will help in bringing in multidisciplinary education at the institutes. It will be the responsibility of the Commission to ensure that students get a holistic education that can help them in both their personal lives and their professional careers. 

**Opportunities up the Academic Ladder**

With low stipends for PhD students and dismal number of post doc positions, which are temporary positions given to PhD holders to continue their research and establish themselves in academia, there is no incentive for the average Indian student to pursue higher education in the country. There has been a significant outflow of brilliant minds due to the dwindling opportunities for students as they move up the academic ladder. It is imperative that we provide adequate facilities and monetary compensation for students conducting exemplary work in their respective academic fields. Raising PhD stipends to encourage students to conduct their own research in the country along with increasing the number of postdoc positions in the educational institutes will help keep the brightest minds in the country and build up the academic reputation of the institute itself. Currently, it’s only the government that has a fellowship for PhD students. Private donors, along with educational institutions can introduce programmes in providing incentives to aspiring researchers and academics in the country.

There is a lot that needs to be done in order to reform the higher education system in the country. While Indian students have managed to create a diaspora on every continent of the world, Indian universities have failed to attract foreign students to come and study in the country. Just like how the Indian diaspora in Silicon Valley and the financial hubs such as London have transformed the respective countries’ economies, educational reforms can make India an educational hub worth investing in, for both students and the private sector.

*Read more: [Doing business in the valley: looking beyond EoDB ranking](https://spontaneousorder.in/doing-business-in-the-valley-looking-beyond-eodb-ranking/)*

* * *

**About Arjun Gargeyas**

Arjun Gargeyas is currently a 23-year-old engineer working as a Consulting Engineer for Cisco Systems. An Electronics and Communication graduate, he is a bibliophile with a soft spot for History, Economics, and World Affairs books. Being a trekker and mountaineer, he aims to combine his scientific background with his love for the social sciences to become an Energy and Environmental Policy Analyst.

## Doing business in the valley: looking beyond EoDB ranking

Original: https://www.spontaneousorder.in/p/doing-business-in-the-valley-looking-beyond-eodb-ranking

Author: Spontaneous Order

Published: 2021-04-28T15:08:02.000Z

Topics: ease-of-doing-business, business-reforms, infrastructure, jammu-kashmir-economy

> A few months ago, the J&K administration announced that there is no requirement of getting a NOC from the Industries and Commerce department before setting up an Industrial Unit. The J&K government has been trying to improve the ease of doing business i..

**Summary:**

The J&K administration has simplified business setup by eliminating the need for a No Objection Certificate (NOC) from the Industries and Commerce department, reducing prior requirements from at least 15 NOCs, as part of efforts to boost Ease of Doing Business (EoDB) and attract investors amid 9% unemployment (vs. national 7.8%). J&K ranked 21st in 2019 EoDB rankings (pre-UT bifurcation), with 137 of 187 Business Reforms Action Plan (BRAP) 2019 reforms implemented, but essentials like public checklists for approvals remain pending. Digitization for single-window systems is undermined by frequent internet shutdowns—4G restored after 1.5 years in January 2021—and unreliable electricity, with 6 months of winter outages and non-publication of outage data per reform 282. Post-Article 370 abrogation, the economy declined, with Rs 17,878 crore losses in Kashmir over 4 months per Kashmir Chamber of Commerce, and many startups shuttered due to lockdowns. From a classical-liberal view, regulatory cuts are promising for private sector growth, but EoDB rankings overlook basics; Srinagar's 49th rank in Ease of Living Index underscores high opportunity costs from poor infrastructure. True business revival demands 24/7 high-speed internet, reliable power, and infrastructure over mere regulatory tweaks.

**Key points:**

- J&K reduced NOC requirements for industrial units from 15 to none from the Industries department to attract investors and combat 9% unemployment.
- Only 137 of 187 BRAP 2019 reforms implemented, missing key items like public approval checklists and outage data publication.
- Internet shutdowns and 6-month winter power outages hinder digitization and business viability.
- Post-Article 370, Kashmir lost Rs 17,878 crore in 4 months, with Srinagar ranking 49th in Ease of Living due to infrastructure deficits.
- Prioritize reliable internet, electricity, and infrastructure alongside regulatory reforms for genuine EoDB improvement.

**By Marwah Koul**

* * *

A few months ago, the [J&K administration](https://www.business-standard.com/article/economy-policy/j-k-govt-simplifies-business-establishment-process-opens-door-for-investors-121021400447_1.html) announced that there is no requirement of getting a NOC from the Industries and Commerce department before setting up an Industrial Unit. The J&K government has been trying to improve the ease of doing business in the state, by reducing the various NOC burdens that exist. Earlier at least 15 NOCs/Clearances were required to set up an industrial unit, which has now been reduced. 

Reducing NOCs is a move aimed at attracting more investors and businessmen to the valley. It is also focused on encouraging the local population to start their ventures. It is important to note that the unemployment rate in J&K is at 9% while the national average is 7.8% according to the [Centre for Monitoring Indian Economy](https://unemploymentinindia.cmie.com/). This is mainly due to the absence of the private sector. Currently, J&K ranks at [21](https://www.tribuneindia.com/news/j-k/jk-21st-in-ease-of-doing-business-rankings-136876) in the Ease of doing business rankings 2019. This ranking is for the regions of Jammu, Kashmir and Ladakh combined before the state was divided into two Union Territories. 

According to the Business Reforms Action plan 2019, a total of 187 reforms were introduced for the state and out of which [137](https://eodb.dipp.gov.in/StateReport?year=2019&state=15) have been implemented so far. Many reforms which are quite essential for smoothing out the process of setting up a business have still not been implemented. For example, developing and making publicly available a comprehensive checklist of the application procedure and timeline of all required pre-establishment NOCs, licenses, registrations and other mandatory State approvals required for setting up of a business has still not been done. 

One of the major reforms introduced in the entire country is the digitalisation of all the applications and approvals. The aim is to make the application process smooth with a focus on reducing the time taken to submit hard copies of various documents to the department offices. The government is working towards establishing a single-window system to make the whole process a lot easier. The digitisation exercise is also followed in the state without paying heed to widespread internet shutdowns in the state. 4G internet services were finally restored after [one and a half years](https://thewire.in/rights/jammu-and-kashmir-4g-internet-costs) in January 2021. But these shutdowns continue whenever there is minor unrest anywhere in the state. Unless and until there is 24 \*7 access to high-speed internet, the idea of digitization is a distant dream for the state. 

One cannot ignore the fact that any successful business needs capital resources like electricity. In the winter months, which is almost 6 months of the year, everyone struggles to get basic 24-hour electricity in the region. In [reform 282](https://eodb.dipp.gov.in/ReformReport/Index?year=2019&state=15&status=no#) in the BRAP 2019, under Obtaining Electricity Connection, it is required that the regulator publishes monthly or quarterly data regarding the total duration and frequency of outages online in the public domain. This reform has not been implemented, as the inefficient electricity supply records cannot be put out in public. 

Improving the business atmosphere is a part of the ‘development’ narrative that underlines the removal of Article 370. In the one and a half year after the removal of Article 370, the economy of the region has only sloped downwards. A lot of young people who started their businesses had to shut down due to the lockdown post August 2019. According to a [report](https://im.rediff.com/news/2020/jan/21kashmir.pdf) by the Kashmir Chamber of Commerce and Industry, in 4 months after the removal of Article 370, Kashmir’s economy suffered a loss of Rs 17,878.18 crores. All the reforms to improve the business environment cannot be seen in a vacuum and are a part of the narrative of portraying ‘normalcy’ in the valley to the world. 

The need is to focus on very basic problems like accessibility to the internet, better power connectivity, and better infrastructure to develop the business environment in the region. While the Ease of Doing Business rankings usually focus on regulations and approvals, the need for developing basic infrastructure cannot be denied. 

In today’s world, no one can imagine a life without proper electricity and internet facilities, let alone the survival of a successful business. It is no wonder that Srinagar, J&K’s capital city was recently ranked as [49th](https://www.hindustantimes.com/india-news/ease-of-living-index-2020-srinagar-at-bottom-of-list-of-49-cities-101614859429981.html) in the ‘Ease of Living Index’ and comes under the worst livable cities in the country. One of the major reasons why people are hesitant to invest in the valley is because of this uncertainty and until there is a policy backed solution to that, the opportunity cost of doing business in the region is too high.

*Read More: [Yes, the glaciers are melting but no need to panic.](https://spontaneousorder.in/yes-glaciers-are-melting-but-no-need-for-panic/)*

* * *

**About Marwah Koul**

Marwah Koul is a recent MSc Economics graduate from the University of Liverpool. She is interested in the areas of Development Economics and Public policy. She is also passionate about researching social and economic issues affecting her hometown Kashmir.

## Yes, glaciers are melting but no need for panic

Original: https://www.spontaneousorder.in/p/yes-glaciers-are-melting-but-no-need-for-panic

Author: Spontaneous Order

Published: 2021-04-26T17:34:22.000Z

Topics: climate-change, himalayan-glaciers, water-resources, environmental-alarmism

> The recent flash flood in Uttarakhand was widely called a “glacier burst” although glaciers are not balloons and do not burst. It has spurred renewed warnings that global warming threatens quick melting of the Himalayan glaciers, decimating flows in t

**Summary:**

Swaminathan SA Aiyer argues that while Himalayan glaciers are retreating, there is no need for panic over claims of impending water scarcity, desertification, or agricultural collapse in the Gangetic plain due to global warming. He debunks the 2007 IPCC prediction of all Himalayan glaciers vanishing by 2035, corrected after glaciologist V K Raina's report showed steady melting since the last Ice Age without recent acceleration, with glaciers contributing just 2% to Ganga flow at Allahabad—mostly from rain. A 2019 study by Richard Armstrong et al. provides precise breakdowns above 2,000m: in the Ganga basin, glacial melt <1%, snow on glaciers 4%, snow on land 43%, rainfall 52%; Indus: 2%,6%,67%,23%; Brahmaputra:1%,7%,26%,66%. ISRO data (2001-2011) on 2,018 glaciers found 248 retreating, 1,752 stable, 18 advancing. Aiyer emphasizes distinguishing snowmelt from glacial melt, noting snow—renewed annually—dominates, sustaining rivers even post-glacier disappearance, as pre-Ice Age geology confirms. Speculative forecasts on snowfall ignore potential increases from warmer oceans. Glaciers are not rivers' primary source; rain over vast basins is. Good science reveals no crisis of dry rivers, famine, or wars, despite minor ecological side-effects.

**Key points:**

- Glacial melt contributes less than 1% to river flows in the Ganga basin above 2,000m, per 2019 Armstrong study.
- Rainfall (52%) and snowmelt (47%) overwhelmingly drive Ganga flows, not glaciers.
- ISRO monitored 2,018 Himalayan glaciers (2001-2011): only 12% retreating, 87% stable, 1% advancing.
- Even full glacier melt centuries hence won't dry rivers, as snow and rain persist.
- Past IPCC alarm of 2035 glacier disappearance was retracted after scientific correction.

**By Swaminathan SA Aiyer**

* * *

The recent flash flood in Uttarakhand was widely called a “glacier burst” although glaciers are not balloons and do not burst. It has spurred renewed warnings that global warming threatens quick melting of the Himalayan glaciers, decimating flows in the Gangetic plain, causing desertification and devastating agriculture. Academics like Brahma Chellaney predict wars from water scarcity.

In 2007 the International Panel on Climate Change incorrectly predicted that all Himalayan glaciers might disappear by 2035, and was obliged to correct itself. Then environment minister Jairam Ramesh commissioned an independent study by glaciologist V K Raina. His report said while glaciers had been melting since the end of the last Ice Age and would continue doing so, melting had not accelerated in recent decades even if temperatures had risen. Raina says glacial melt contributes barely 2% to the flow of the Ganga at Allahabad: rain is the overwhelming source of flow. Corollary: even when all the glaciers melt centuries hence, the river and agriculture will be impacted very modestly.

Even Raina’s 2% estimate may be too high. A 2019 research paper by Richard Armstrong, National Snow and Ice Data Center, USA, with 11 international collaborators is the first study to break down separately the contribution to river flows in Himalayan river basins by (a) snow on land melting; (b) snow on glaciers melting; (c) glacial ice melting; and (d) rainfall.

The study covers only high-altitude areas above 2,000 metres (the altitude of Mussoorie or Darjeeling). This is because river flows in the plains are obviously dominated by rainfall. But even above 2,000 metres, the contribution of exposed glacial melt to river flows in the Ganga basin is less than 1%; of snow on glaciers 4%; of snow on land 43%; and of rainfall 52%. The four contributions in the Indus basin are 2%, 6%,67% and 23%; and in the Brahmaputra basin 1%, 7%, 26% and 66%.

Many readers will be astonished that the contribution of glacial melt can be just under 1% even in the higher Himalayas. The estimates of some other researchers are far higher. The new study suggests the other researchers have failed to distinguish between snowmelt and glacial melt because the technology and data to make the distinction was not easily available earlier, but makes a huge difference.

Raina’s report complained of the woeful lack of Himalayan weather stations to collect data. The Indian Space Research Organisation collects data by satellite, and said in a 2014 report that it had monitored 2,018 Himalayan glaciers between 2001 and 2011. It found that only 248 glaciers were retreating, 1,752 were stable and 18 were advancing. Other studies say most but not all glaciers are retreating. There is net melting but no crisis.

Substantial snow falls in winter. In early summer, snow on land and glaciers starts melting. Snowmelt from high mountains can flow onto the glaciers and be mistaken for glacial melt. After the snow covering glaciers has melted, the exposed glacial ice melts too between June and late September.

This coincides with the monsoon, which then dominates river flows. So, Raina emphasises, it is a myth that glacial melt is critical for river flow in the lean pre-monsoon season. Armstrong shows snowmelt is the key contributor. And snow will continue to fall, melt, and feed the rivers after every glacier disappears centuries hence. This should surprise none: geology shows huge rivers descending from the Himalayas even before the last Ice Age created the glaciers.

All forecasts of the impact of global warming on Himalayan snowfall are highly speculative: we really don’t know. Global warming should increase ocean evaporation and clouds, increasing rain and snow. Its distribution is uncertain.

The area covered by winter snow is many times greater than that covered by glaciers, so it contributes more. Even at the snout of glaciers, where rivers emerge, glacial melt is a minor contributor. Armstrong puts it at just 1-2% at high altitudes. This keeps falling as the river moves downhill and is fed by rain.

In common parlance, glaciers are often but misleadingly called the source of Himalayan rivers. In fact glaciers are merely the highest point of rivers. The actual source of the Ganga is not the Gangotri glacier but every drop of rain that falls on the 860,000sq km of the basin, and then flows downhill to the river. That creates the flow.

The studies of Raina, ISRO and Armstrong will shock those predicting accelerated melting and famine. But distinguishing between snowmelt and glacial melt is good science, and leads to happier conclusions. Let’s rejoice. Glacial retreat will have some adverse side-effects on glacial lakes and flora and fauna. But not even glacial disappearance will mean dry rivers, famine and war.

cold truths: Contrary to what people think, it’s rain and not glaciers that contribute most of the flow to Ganga.

*This article was originally published in [Swaminomics](http://swaminomics.org/yes-glaciers-are-melting-but-no-need-for-panic/).*

*Read more: [What is Terracotta Environmentalism?](https://spontaneousorder.in/what-is-terracotta-environmentalism/)*

*\*Views expressed are personal\**

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## What is Terracotta Environmentalism?

Original: https://www.spontaneousorder.in/p/what-is-terracotta-environmentalism

Author: Spontaneous Order

Published: 2021-04-22T11:18:05.000Z

Topics: terracotta-environmentalism, emission-trading, community-forests, wildlife-incentives

> When we think of nature, we usually think of it as the presence of pristine wilderness and the absence of human touch. This image of a natural environment where human action has absolutely no role has informed our discourse on environmentalism for years..

**Summary:**

Terracotta environmentalism critiques the dominant 'green' vision, which posits perpetual human-nature conflict and relies on coercive state policies like evicting forest dwellers and bureaucratic controls, leading to failed environmental outcomes, human rights violations, and economic costs. Instead, it embraces human action as integral to nature in the Anthropocene, akin to a potter shaping terracotta, and realigns incentives through three pillars: Markets, Communities & Livelihoods, and Incentives. Markets enable preservation via flexible mechanisms like Emission Trading Schemes (ETS), which cap emissions and allow trading, reducing compliance costs, boosting profits, and cutting pollution without growth trade-offs—exemplified by Surat's world's first particulate matter ETS pilot. Communities & Livelihoods emphasize property rights for forest dwellers, reversing colonial Indian Forest Acts (1865, 1927) that criminalized them as encroachers; India's Forest Rights Act 2006 and Nepal's model (2,831,707 hectares community-managed, restoring degraded lands) show stewardship incentives protect forests and livelihoods. Incentives transform wildlife from liability to asset, as in Zimbabwe's CAMPFIRE (community revenues from tourism/hunting increased endangered species) and Pakistan's Markhor conservation via regulated trophy hunting. This classical-liberal framework bridges economy-environment divides for resilient, prosperity-enhancing conservation.

**Key points:**

- Replace command-and-control emission policies with market-based Emission Trading Schemes like Surat's pilot to cut pollution cost-effectively while preserving growth.
- Grant forest communities property rights and access, as per India's Forest Rights Act 2006 and Nepal's model, to incentivize stewardship over state mismanagement.
- Restructure wildlife incentives through community revenues from tourism and regulated hunting, as in Zimbabwe's CAMPFIRE and Pakistan's Markhor project, to boost conservation and local prosperity.

**By Mohammad Anas Khan**

* * *

When we think of nature, we usually think of it as the presence of pristine wilderness and the absence of human touch. This image of a natural environment where human action has absolutely no role has informed our discourse on environmentalism for years. And most environmental policies have focused on ‘undoing’ human action on nature. This notion of a perpetual human-nature conflict is aligned with the green vision of environmentalism, which presumes that the segregation of human action from the natural world is the only way forward. Moreover, the greens focus on reforming human nature through the force of law, which culminates in policies such as eviction of forest dwellers from ‘protected’ forest areas, bureaucratic control of natural resources and restriction on economic activity or commercial use of the natural environment. The green approach lacks a sound economic outlook and has not just failed to deliver positive environmental outcomes but has also come at the cost of human rights and prosperity. 

An inclusive policy framework to tackle environmental challenges in the Anthropocene age must recognise human action as inalienable to the natural environment. Similar to a potter’s moulding of earthenware which aptly depicts the influence of human action, the terracotta vision values natural resources, not for their mere existence but recognises the relationship between human beings and the environment around them. Terracotta environmentalism differs from the green vision because, unlike the green approach, its end goal is not reforming human nature but to realign and restructure human incentives. There are broadly three pillars that support the terracotta vision: Markets, Communities & Livelihoods and Incentives.

**The Role of Markets** 

While markets are seen as enablers of environmental degradation, it may sound counter-intuitive to think about markets as the source of environmental preservation. Markets are agnostic. They are not accustomed to work only in a certain way, and can always be recalibrated to provide environmental solutions. Think about industrial emissions that cause large scale pollution. To curb the emissions, various governments have adopted command and control approaches such as heavy taxation and “one-size-fits” emission standards for different industries. This is not just economically unfeasible but also presumes a trade-off between economic growth and the environment. 

An alternative to such ineffective policies are [Emission Trading Schemes](https://theconversation.com/climate-explained-how-emissions-trading-schemes-work-and-they-can-help-us-shift-to-a-zero-carbon-future-122325#:~:text=An%20emissions%20trading%20scheme%20\(ETS,one%20tonne%20of%20greenhouse%20gases.). In an emission trading scheme, there is a cap put on the total emission based on the targets to which they have to be cut down. Based on the cap, the allowable emissions are then traded between industries. The emission units are also transferable hence if an industry uses less units and has spare units of emission permits, then it can sell its share to an industry which has a greater requirement. Emission trading schemes greatly decrease the compliance costs for industries, incentivise industries to shift to cleaner energy sources and also provide a cleaner environment without jeopardising economic growth. The practice has already started in some parts of India. Surat has the [world’s first pilot project](https://timesofindia.indiatimes.com/city/surat/worlds-first-emission-trading-scheme-yields-positive-results/articleshow/71729263.cms) on emission trading in particulate matter. 

In this way, the system uses the power and flexibility of markets and leads to a win-win situation of simultaneously (i) reducing total cost of regulation, (ii) increasing firm profits, and (iii) protecting citizens from pollution.Markets are a result of human action and are fundamental to Terracotta Environmentalism as it seeks to bridge the ‘economic growth vs. environment’ divide. 

**Communities and Livelihoods**

Indian Forest Act of 1865 formally consolidated state power over forestry and obliterated centuries-old customary rights of forest communities in India. The Indian Forest Act, 1927 further consolidated the Indian State’s sovereignty over forest land and forest resources. The State maintains control over forests in the name of conservation while excluding the immediate stakeholders i.e. forest communities. The outcome of these legislative enactments was that forest communities which live off forest land and resources became ‘encroachers’ on the lands which they have historically been the stewards of. 

On the other hand, foresters or agents of the State were bestowed with the power and responsibility of ‘scientifically’ managing and conserving forest resources. Since the forest officials are neither immediate stakeholders of forest resources nor are their livelihoods dependent on the same, instances of forest mismanagement, illegal timber trade and human rights violation of forest communities have often come to the fore. 

The Terracotta vision stresses the role of forest communities, conservation-based livelihoods and property rights. Land rights and rights of access to forest resources are crucial not just for the prosperity of forest communities but are integral for good stewardship and management of forests. Since the livelihoods of these communities are directly linked to forest resources, they have greater incentives in safeguarding, managing and preserving forests. Community ownership and forest management through well-defined and enforceable property rights solves two problems simultaneously: they protect forests and provide a dignified livelihood to the country’s most impoverished communities. Nepal, which has a robust system of community forest management, has around 2,831,707 hectares of forests managed by local communities who earn their livelihood from forest produce. Forest management by communities has led to [environmental improvement](https://www.cifor.org/publications/pdf_files/events/documentations/yogyakarta/papers/chapter%205%20dahal.pdf) in the form of barren lands, denuded hills and degraded forest-lands being converted into productive woodlands. 

In India, Forest Rights Act, 2006 is landmark legislation which augments the terracotta vision i.e. it recognises the land rights and rights to forest resources of forest communities. 

**Incentives Matter!** 

When wildlife is state-owned, people who live in proximity to the protected animal are not keen on protecting the animals. For them, wildlife is an economic liability. They simply have no incentive to protect the wildlife. Infact, the probability of them choosing to collude with poachers and hunters is higher since it is one way of doing away with the economic loss which wildlife causes these communities. 

The [Communal Areas Management Programme](https://www.campfirezimbabwe.org/) (CAMPFIRE) in Zimbabwe was the first community-based wildlife conservation initiative that approached wildlife as a renewable and profitable resource. Millions of impoverished Zimbabweans participated in the programme which changed their view towards wildlife and modeled their behaviour towards its conservation. It incentivised the Zimbabweans who lived near communally owned wildlife areas by generating revenue through wildlife tourism, trophy hunting and forestry. Since the economic gain of the participating community is directly linked to the presence of wildlife in their natural habitat, they have a direct incentive to not just safeguard but also efficiently manage wildlife. 

The outcome of the CAMPFIRE has been positive with an increase in numbers of endangered wildlife and the generation of much-needed revenue to finance the upkeep of the conservation project. Funding conservation activities is a difficult task in countries where a good chunk of the population is impoverished, hence the CAMPFIRE project offsets the costs borne by the Government by transferring wildlife management to local communities. Projects similar to the CAMPFIRE have also been implemented in places in India’s neighbourhood. Pakistan’s much-acclaimed conservation project of its national animal i.e. the Markhor is [a case study](https://www.thethirdpole.net/en/nature/trophy-hunting-markhor/) that is at the heart of the terracotta vision. The markhor, an endangered species of mountain goats, which was projected to be extinct given its indiscriminate poaching, has now returned back to its habitat. The legalisation of regulated Trophy hunting with community partnership in Gilgit-Baltistan fundamentally restructured the incentives of the local community towards conservation of markhor and its habitat. 

In the terracotta vision, incentives matter and so do people. They matter precisely because conservation efforts that include communities, sustainable livelihoods and market-based incentives are much more resilient because they connect good intentions to sound conservation policies.

*Read more: [Restructuring political incentives to reform urban governance](https://spontaneousorder.in/restructuring-political-incentives-to-reform-urban-governance/)*

*\*Views expressed are personal\**

* * *

**About Mohammad Anas Khan**

Mohammad Anas Khan is a law graduate and is currently working as a Senior Associate with Centre for Civil Society. Anas is an academic enthusiast and has a keen interest in legal theory, public policy and the terracotta approach to environmentalism.

## SO Basically Ep 20: क्या है Terracotta Environmentalism?

Original: https://www.spontaneousorder.in/p/so-basically-ep-20-terracotta-environmentalism

Author: Spontaneous Order

Published: 2021-04-22T11:02:00.000Z

Topics: environmentalism, terracotta-environmentalism

> When we think of nature, we usually think of pristine wilderness and the absence of human touch. This image of a natural environment where human action has absolutely no role has gained popularity over the last few years. In this episode of SO Basically..

**Summary:**

This is a short promotional post for Episode 20 of SO Basically, questioning the popular notion of nature as pristine wilderness untouched by humans and introducing 'Terracotta Environmentalism' as an alternative perspective. It teases a discussion on this 'green notion' and directs viewers to ccs.in/terracotta-environmentalism to watch the episode. No detailed argument or specifics are provided in the post itself.

**Key points:**

- Challenges the ideal of nature as absent of human influence.

**By Spontaneous Order**

* * *

When we think of nature, we usually think of pristine wilderness and the absence of human touch. This image of a natural environment where human action has absolutely no role has gained popularity over the last few years. In this episode of SO Basically, we question this green notion and talk about Terracotta Environmentalism.

Watch now:

Visit ccs.in/terracotta-environmentalism for more.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Restructuring political incentives to reform urban governance

Original: https://www.spontaneousorder.in/p/restructuring-political-incentives-to-reform-urban-governance

Author: Spontaneous Order

Published: 2021-04-21T14:35:19.000Z

Topics: urban-governance, decentralization, megacities, electoral-delimitation

> In the month of March this year, the Ministry of Housing and Urban Affairs, Government of India, released the Ease of Living Index 2020. The index is an examination of 114 Indian cities to assess their livability and their citizens’ wellbeing. The posit

**Summary:**

Indian cities perform poorly in global livability rankings—New Delhi and Mumbai at 118th and 119th out of 140 in the EIU Global Liveability Index, Hyderabad and Pune at 143rd out of 231 in Mercer's Quality of Living—due to politicians' lack of incentives to prioritize urban improvement amid rural-dominated electoral constituencies. The author, from a classical-liberal viewpoint, attributes this to centralized control and proposes three institutional reforms to realign political incentives. First, fully implement the 1993 74th Constitutional Amendment by devolving fiscal and administrative powers to urban local bodies like municipal corporations, treating cities as organically evolving ecosystems requiring local feedback rather than central planning, as echoed by Milton Friedman's emphasis on mobility and competition. Second, grant autonomy to India's five current megacities (with two more by 2030) as separate administrative units under elected mayors, akin to models in China and the US, reflecting their cosmopolitan demographics distinct from states. Third, conduct a new census and delimitation—overdue since 2002—to boost urban seats in Parliament and assemblies, accounting for a 51% surge in rural-urban migrants from 52 million to 78 million between 2001 and 2011. These changes would make urban governance a political priority, fostering innovation in cities as engines of growth.

**Key points:**

- Fully devolve powers and fiscal resources to urban local governments as per the 74th Constitutional Amendment to enable local accountability and problem-solving.
- Establish India's megacities as autonomous units under elected mayors, independent of state control, to match their cosmopolitan nature and priorities.
- Conduct a census followed by delimitation of constituencies to increase urban representation in legislatures, reflecting post-2002 demographic shifts.
- Restructuring political incentives through decentralization, autonomy, and fair representation will compel politicians to prioritize livable cities.

**By Anirudh Goel**

* * *

In the month of March this year, the Ministry of Housing and Urban Affairs, Government of India, released the [Ease of Living Index 2020](https://pib.gov.in/PressReleasePage.aspx?PRID=1702417). The index is an examination of 114 Indian cities to assess their livability and their citizens’ wellbeing. The position of Indian cities in some global urban rankings such as the [Global Liveability Index of the Economic Intelligence Unit](https://www.eiu.com/n/the-global-liveability-index-2019/#:~:text=The%20EIU's%20Global%20Liveability%20Index,the%20top%2010%20this%20year.) and the [Quality of Living Rankings by Mercer](https://mobilityexchange.mercer.com/insights/quality-of-living-rankings) is along expected lines. In the [Global Liveability Index](https://www.livemint.com/news/india/these-two-indian-cities-are-in-global-liveability-index-2019-1567582279267.html), the only 2 Indian cities featuring in a list of 140 were New Delhi and Mumbai, ranked poorly at 118 and 119 respectively. Similarly in [Mercer’s Quality of Living Rankings](https://www.mercer.co.in/newsroom/2019-quality-of-living-survey.html), Hyderabad and Pune shared the 143rd position as best Indian cities, in a list of 231 cities worldwide. What is the reason for this abysmal state of our cities? 

One explanation is the lack of political incentives, that politicians are driven by votes and do not find it politically profitable to invest in improving cities. One of the reasons for this is that a large majority of the electoral constituencies in India, both for the Parliament, and for state assemblies are rural. However, there are some ways in which we can institutionally restructure the incentives for political actors to improve governance in our cities:

**1\. The promise of decentralization**

In 1993, the Indian Constitution was amended by the [74th Constitutional Amendment Act](http://www.mohua.gov.in/upload/uploadfiles/files/74th_CAA13.pdf), to mandate the establishment of urban local governments in the form of Municipal Corporations, Municipal Councils, and Nagar Panchayats in urban parts of the country. These local governments were supposed to be entrusted with the responsibility of economic development and social justice. They were recognised as a level of autonomous government with legal powers and responsibilities, fiscal resources, and direct accountability towards the people for their performance through elections. Nearly three decades since the introduction of this amendment, it has not been implemented in spirit. For example, the job of a municipal corporation’s commissioner is still reserved for an IAS Officer who is deputed by the state government. For its fiscal resources also, a corporation is still almost completely dependent on the state government. Such a centralized approach to urban governance stems from the fundamental misunderstanding that a city is a mechanical system to be designed by a central authority. No, a city is not a machine; it is an [organically evolving ecosystem](https://www.business-standard.com/article/opinion/sanjeev-sanyal-the-ideology-of-cities-113123101038_1.html) characterized by complex interactions between people, institutions, cultures, and the amenities which they use on a daily basis. Instead of central planning, it requires day to day monitoring, feedback and prompt adjustment. 

Devolution of power in local governments ensures that local people who are aware of the local conditions are themselves responsible for resolving their problems. It motivates the interested actors, the politicians as well as the voters, to take local urban problems such as drainage, sanitation, street lighting, and general cleanliness with seriousness, and bring them to the forefront during elections. Besides this, decentralized decision making ensures that the possibility of harm caused by an intervention is the least. [Dr. Milton Friedman](https://www.goodreads.com/book/show/51877.Capitalism_and_Freedom) best summarises this feature in the following words: “If I do not like what my local community does..I can move to another local community, and though few may take this step, the mere possibility acts as a check. If I do not like what my state does, I can move to another. If I do not like what Washington imposes, I have few alternatives in this world of jealous nations.”

**2\. Making large cities autonomous**

Presently, India is home to 5 cities that have a population of more than 10 million. The [UN Human Settlement Program](https://www.globalcitizen.org/fr/content/india-add-megacities-reach-10m-by-2030/#:~:text=Currently%2C%20India%20has%20five%20major,Kolkata%2C%20Bengaluru%2C%20and%20Chennai) (UN Habitat) estimates that India will have 2 more such cities by the year 2030. One of the ways to ensure better governance for these megacities is to free them from the control of states to which they currently belong, and make them autonomous units of administration under the direct representation of elected mayors. Megacities are a creation of people migrating to them in millions from all corners of the country, and are hence cosmopolitan, different in their demography from the state in which they are situated. [Kelkar and Shah](https://www.mayin.org/ajayshah/books/isotr2019.html) have also observed that “in the future, the identity of many individuals will be tied closer to a home city than to a home state.” The political  issues and priorities of these cities will be quite different from the states in which they are situated. 

Therefore, it will be desirable to have a separate mode of political organisation for their governance. The idea has been tried earlier in other countries in different forms and has yielded positive outcomes. [China for instance](https://www.bbc.com/news/world-asia-pacific-13908276), has categorised its large cities as “municipalities” that have the same economic, political and jurisdictional rights as the provinces. In the United States, [city mayors](https://www.brookings.edu/wp-content/uploads/2016/06/20050520_ippr.pdf) are vested with considerable powers in terms of their ability to raise finances and provide public goods to the citizens. In India also, remodelling megacities as autonomous units of administration under an elected mayor can encourage active political participation from locals and bring competitiveness in urban governance.

**3\. Delimitation of constituencies**

In India, delimitation of constituencies for the Union Parliament and the State Legislative Assemblies is based on the principle of equal representation for equal population segments. The last delimitation commission was set up in the year 2002 which conducted delimitation based on the census of 2001. Since then, there has been large scale migration of people from rural to urban areas. The 2011 census reflected a [51% jump in rural to urban migration](https://www.livemint.com/news/india/what-the-rural-to-urban-move-says-about-migration-1564424289751.html), raising the absolute number of such migrants from 52 million to 78 million. One can only expect the number to have gone even higher in the last 9 years since then. Therefore, the delimitation of 2002 is not at all a true reflection of the demographic realities of India today. 

Due to the substantial increase in their share in the total population, cities deserve a much higher number of seats in the Parliament as well as the state assemblies than they currently have. It is important that  the government  conducts  a census and follows it with the delimitation of parliamentary and assembly constituencies. This will ensure that cities are appropriately represented in legislative bodies as per their proportion in the population, and issues of urban governance become important to the legislators when they make laws.

Cities are the engines of economic growth. It is urban dynamism and cosmopolitanism that engenders innovation and entrepreneurship. Through the three aforesaid institutional reforms in our political setup, we can incentivize political actors to invest more of their time and resources in improving our cities and making them more liveable.

*Read more: [Science, Technology, and Innovation Policy 2020: Embracing Change](https://spontaneousorder.in/science-technology-and-innovation-policy-2020-embracing-change/)*

*\*Views expressed are personal\**

* * *

**About Anirudh Goel**

Anirudh Goel is a final year student of BA LLB at the West Bengal National University of Juridical Sciences. He has a profound interest in economics, governance, and urban theory.

## Science, Technology, and Innovation Policy 2020: Embracing Change

Original: https://www.spontaneousorder.in/p/science-technology-and-innovation-policy-2020-embracing-change

Author: Spontaneous Order

Published: 2021-04-19T17:57:27.000Z

Topics: science-policy, stip-2020, open-science, research-funding, gender-in-stem

> The past decade has outlined the salience of science, technology, and innovation (STI). New challenges and opportunities have necessitated new approaches to teaching, learning, and sharing scientific knowledge. Science and scientific temper are imperati..

**Summary:**

The article traces India's science, technology, and innovation (STI) policies from the 1958 Scientific Policy Resolution, which built research infrastructure, to the Technology Policy Statement 1983 emphasizing self-reliance, Science and Technology Policy 2003 boosting R&D via SERB, and STIP 2013 encouraging private sector innovation. The 5th STIP 2020, amid Covid-19 and Atmanirbhar Bharat, adopts an inclusivity-driven, bottom-up approach for open science, proposing 'One Nation One Subscription' to replace Rs.1500 cr/yr fragmented journal spends accessible to only a third of researchers. It envisions a National STI Observatory for data convergence, Open Data Policy, cluster schools, innovation hubs, and 30% women in decision-making to address the 14% female share among 2.8 lakh researchers. Despite 90% public funding going to central universities with 10% researchers, STIP urges private R&D ramp-up, as India has just 216.2 researchers per million. While ambitious for SDGs and global superpower status, challenges like researcher shortages, low GERD, and weak institutions demand evidence-based reforms, NEP synergy, and scientific diplomacy to foster innovation over rote learning from a classical-liberal lens prioritizing private investment and open ecosystems.

**Key points:**

- STIP 2020 proposes 'One Nation One Subscription' for universal journal access, replacing Rs.1500 cr/yr fragmented spending.
- Establishes National STI Observatory and Open Data Policy to converge research data across sectors.
- Targets 30% women in STI decision-making to correct 14% female researcher share among 2.8 lakh total.
- Urges private sector to boost R&D spend, as 90% public funds go to 10% researchers in central universities.
- India needs to increase researchers from 216.2 per million and GERD for Atmanirbhar Bharat.

**By Sakshi Jain**

* * *

  
The past decade has outlined the salience of science, technology, and innovation (STI). New challenges and opportunities have necessitated new approaches to teaching, learning, and sharing scientific knowledge. Science and scientific temper are imperative for the growth and development of individuals and society as a whole. 

Acknowledging that science is the panacea for socio-economic challenges in the diverse sectors of health, education, climate change, energy, and others, the Indian STI ecosystem has been evolving, with scientific advancements proliferating the Indian economy and increasing our living standards. Scientific temper was first coined by the first Prime Minister of independent India, Jawaharlal Nehru, in his book ‘[Discovery of India](https://kamp.res.in/Info/Common?Page=ScientificTemper#:~:text=An%20individual%20is%20considered%20to,'The%20Discovery%20of%20India'.)‘. The idea of scientific acumen was later incorporated into the Indian constitution in [Article 51A (h)](https://legislative.gov.in/sites/default/files/COI_1.pdf) that encourages citizens to “develop the scientific temper, humanism and the spirit of inquiry and reform” as a fundamental duty of every citizen.

There has been a range of scientific policies rolled out by the consecutive governments to instill the society’s scientific temper. This article seeks to trace the transition of scientific policies since Independence and highlight the changing contours of the [5th Science, Technology, and Innovation Policy (STIP)](https://dst.gov.in/draft-5th-national-science-technology-and-innovation-policy-public-consultation#:~:text=Draft%205th%20National%20Science%2C%20Technology%2C%20and%20Innovation%20Policy%20for%20public%20consultation,-Release%20of%20Draft&text=As%20India%20and%20the%20world,crucial%20juncture%20during%20mid%2D2020.), driven by tech and innovation. 

The first [Scientific Policy Resolution, 1958](https://www.india.gov.in/information-scientific-policy-resolution-1958-department-science-and-technology) (SPR1958), laid the scientific enterprise’s foundation and established research infrastructure in biotechnology, defense research, nuclear energy, space, etc. Driven by self-reliance goals, the second [Technology Policy Statement (TPS) 1983](https://www.india.gov.in/technology-policy-statement-1983-department-science-and-technology) was rolled out, which focused on promoting and developing indigenous technology. 

In the subsequent years, the focus was on the conversion of scientific knowledge into value. With the [Science and Technology Policy 2003](http://missioncsir.nclinnovations.org/wp-content/uploads/2014/10/News-STPolicy-2003.pdf), investments in Research and Development were ramped up. An institutional apparatus in the form of the Scientific and Engineering Research Board (SERB) was put in place, promoting engineering research in India. The decade of innovation that followed was accompanied by [Science, Technology, and Innovation Policy 2013 (STIP 2013)](https://dst.gov.in/st-system-india/science-and-technology-policy-2013), which invigorated the private sector to invest in technology-led innovation.

Fast forward today, in the wake of the Covid-19 crisis, reiterating the goals of Atmanirbhar Bharat and innovation, India treads on the path of reorientation through radical and progressive proposals enshrined in the 5th STIP. Through an inclusivity-based, expert-driven bottom-up approach, which constitutes the heart of [STIP 2020](https://dst.gov.in/sites/default/files/STIP_Doc_1.4_Dec2020.pdf), the draft policy addresses the contemporary requirements of accessibility to scientific knowledge and creating an innovation culture. With this, it sets sight on the club of scientific superpowers in the future. 

The draft policy aims to foster an open science framework that will ensure all stakeholders’ equitable participation in the STI ecosystem. Indian institutions spend about [Rs.1500 cr/yr on journal subscriptions](https://thewire.in/the-sciences/plan-s-open-access-scientific-publishing-article-processing-charge-insa-k-vijayraghavan), available to only a third of our researchers. STIP’s vision of **One Nation One Subscription** enables universal accessibility of journals, both Indian and foreign, instead of a centrally negotiated payment, allowing Open Educational resources. 

Moving away from fragmented subscription and democratizing science epitomizes an **Open science framework** that aims to share scientific knowledge produced within the STI ecosystem with the stakeholders in other sectors. The policy envisages a robust mechanism to link academia with the industry and generate tangible solutions to achieve the Agenda 2030- SDGs. 

From divergence and working in silos, STIP stipulates convergence and integration by establishing a **National STI observatory** that will be a centrally organized scientific data repository accessible to all the economy’s verticals. The development of cheap PPE kits and vaccines shed light on Indian research capabilities and scope of collaboration. The metadata generated from the publicly funded research will be accessible through **Open Data Policy**. This accessibility to research-backed data and the exchange of ideas will accentuate accountability in research outcomes.

Also, to stimulate scientific temper in the society at all levels, the draft policy proposes new educational institutes for holistic growth and capacity building. To foster innovative thinking, **cluster schools, and innovation hubs** will be created at the preliminary level. **Innovation and Entrepreneurship Centres** are expected to aid in innovative research by undergraduates at the university level.   

Lobbying societal good, the globally competitive STIP observes a gender skewed ratio in STEM. Women researchers form only [14% of the 2.8 lakh](https://timesofindia.indiatimes.com/india/there-are-too-few-women-in-science/articleshow/63575929.cms) total researchers, engineers, and scientists in India. To correct this lopsided gender representation, the policy proposes 30% of women’s participation in decision-making bodies. 

In addition to social inclusion, stimulating innovation culture demands substantial fund flow. Provisionally [90% of public funding](https://indianexpress.com/article/explained/sti-policy-science-technology-innovation-policy-atmanirbhar-bharat-5th-national-sti-policy-7135888/) goes to central universities with a pool of merely 10% researchers, whereas 90% of students in state universities have no access to state-of-the-art tech for R&D. 

As per the [Indian Economic Survey 2020-21](https://www.businesstoday.in/current/economy-politics/no-jugaad-boost-research-and-development-spend-says-economic-survey/story/429559.html), the government is heavy-lifting its research and development. For STI-led innovation, the private sector should rev up its gross expenditure on R&D.

To achieve the goal of an *Atmanirbhar Bharat*, there’s a need to catapult Gross Domestic Expenditure On R&D (GERD) and private investment in R&D, avoid overlap of research in public institutions and industries, intensive development of indigenous technology, and promoting traditional scientific knowledge. 

The draft policy lays down an ambitious framework, but the grim reality is we are devoid of resources and researchers. According to the report by a policy think-tank Brookings India, [India has merely 216.2 researchers per million](https://www.livemint.com/education/news/india-has-six-times-less-researchers-than-china-33-times-less-than-south-korea-11574865096710.html) people compared to other nations. The shortage of researchers imperils the innovation culture in India.

The policy envisages an innovative environment, the prerequisite for the group of curious learners, intellectuals, researchers, and not rote learners. STIP outlook for the educational institutes and National Education Policy 2020 would have to work in tandem to arouse students’ interests in research.

In the pursuit to leave a global footprint, there’s a need to upskill scientific diplomacy. Also, the policy must work upon involving all the similar institutions and let them align themselves to work on a mission mode. 

In contrast to other nations, India’s low ratio of laurels also reflects the shortage of stronger institutions. These issues should be the main driving force in curating a policy that promotes scientific quest, follows an evidence-based field approach, and nurtures and retains the human capital of the country.

*Read more: [Where did liberalism come from, and where is it going?](https://spontaneousorder.in/where-did-liberalism-come-from-and-where-is-it-going/)*

*\*Views expressed are personal\**

* * *

**About Sakshi Jain**

Sakshi Jain works as an intern at Atal Bihari Vajpayee Institute of Good Governance and Policy Analysis, a center that works under the aegis of the Madhya Pradesh Government and promotes good governance. She is also a published author who has got her research papers, articles, and commentaries published in various journals. Sakshi satiates her penchant for public policy by taking up responsibilities that help in the upward mobility of citizens. Her commitment is reflected in her roles as a social impact consultant at Impact Consulting and Startup Support Chairperson- Bhopal chapter of Women Economic Forum.

## Where did liberalism come from, and where is it going?

Original: https://www.spontaneousorder.in/p/where-did-liberalism-come-from-and-where-is-it-going

Author: Spontaneous Order

Published: 2021-04-16T14:22:25.000Z

Topics: liberalism-origins, indian-liberalism, economic-liberalization, state-intervention

> The word liberal is commonly thrown around, sometimes with derogatory intentions. The meaning of the term is lost and far from being understood for what it actually means. In this piece, I’ll take you on a quick journey into the past and explore the ori

**Summary:**

Liberalism emerged in mid-17th century Europe amid the Renaissance, Reformation, and Industrial Revolution as a protest against absolute monarchies and arbitrary authority, championing individual liberty, equality before the law, and consent of the governed across intellectual, social, religious, cultural, political, and economic spheres. Initially destructive—removing hindrances to individual development—it progressed against cruelty and superstition until challenged by Marxism, socialism, and fascism in the 20th century. In India, exposed via British entry in 1608 and social reformers like Raja Ram Mohan Roy and Gopal Krishna Gokhale who combated practices like sati, liberalism influenced the independence movement under the Congress Party but yielded to Nehru's democratic socialism and Indira Gandhi's license-permit-quota regime. Free trade faltered due to swadeshi suspicions of monopolies. Watersheds include 1991 liberalization demonstrating open markets' benefits, B.R. Shenoy's 1955 dissent against the Second Five-Year Plan's central planning (praised by Milton Friedman), and Sharad Joshi's Shetkari Sangathana advocating subsidy removal for agricultural trade freedom. Despite these, License Raj remnants persist per WTO reports, agriculture remains regulated trapping small farmers in poverty, and conservative forces prioritize collective will over individual rights. Liberalism, rooted in individual liberty rather than elite privilege, requires a 'Second Freedom Struggle' for comprehensive economic and social liberalization to counter state dominance.

**Key points:**

- Liberalism arose in 17th-century Europe to challenge absolute state authority and secure individual freedoms in all life spheres.
- In India, liberalism via 19th-century social reforms and independence efforts was overtaken by post-1947 socialism, embedding License Raj until 1991 reforms proved markets' efficacy.
- B.R. Shenoy's 1955 dissent against central planning foreshadowed India's economic woes, as noted by Milton Friedman.
- Agriculture demands deregulation, as pushed by Sharad Joshi, to enable farmer prosperity amid ongoing heavy controls.
- India needs a 'Second Freedom Struggle' for economic and social liberties against protectionism and collectivism.

**By Swati Singh**

* * *

The word liberal is commonly thrown around, sometimes with derogatory intentions. The meaning of the term is lost and far from being understood for what it actually means. In this piece, I’ll take you on a quick journey into the past and explore the origins of liberal thought (liberalism), its entry into India’s political arena, and the path it’s currently on. 

In the simplest of terms, liberalism is a political and moral philosophy based on individual liberty, equality before the law and consent of the governed. 

The age of colonialism began somewhere around the 1500s. Countries in Europe discovered various sea routes around Africa’s southern coast and America, and by conquest and settlement, these nations expanded and colonized throughout the world. It was only about a couple of centuries later that people started questioning this and, publicly speaking about being oppressed and living under someone’s control. That’s where we began seeing liberalism as a popular ideology.

It would be incorrect to say that “Hey, this year is when liberalism started” because an ideology isn’t created at one particular point in time. Ideologies are sets of ideas that take decades and centuries to evolve and develop. However, it would be safe to say that liberalism was born in Europe during the mid-17th century. 

It was a product of the climate of opinion that emerged at the time of the Renaissance, Reformation and the industrial revolution in England and Europe. The establishment of absolute nation-states in England and Europe gave birth to a political system in which the king’s authority was absolute. The beginning of liberalism was a protest against this hierarchical and privileged authority and monarchy, which involved every aspect of life. The protest’s main slogan was freedom from every authority capable of acting arbitrarily and the individual’s liberty to develop all of his potentialities. In an attempt to achieve the liberty of the individual and challenge the state’s authority, liberalism demanded freedom in every field of life: intellectual, social, religious, cultural, political and economic. So, you can see how liberalism is closely related to the relationship between the individual and the state.

## **How well did it work?**

Quite well at first, if you look at world history. It proliferated as a movement of people who wanted to be free from state control. However, the negative or the classical aspect of liberalism remained dominant for a very long time. It’s interesting to note how the initial aim of liberalism was more destructive than constructive; its purpose was not to elucidate the positive aims of civilization but to remove hindrances in the individual’s development path. 

Till the latter half of the 19th century, it was a progressive ideology fighting against cruelty, superstitions, intolerance and arbitrary governments. It fought for the rights of man and nations. But in the last hundred years, it has had to face the challenges brought by other ideologies and political movements such as marxism, socialism and fascism.

Let’s look at India’s experience with liberalism. Being a primarily socialist country, the challenge has been long and arduous. The entry of the British in India, first, as a trading company in 1608, followed by their expansion of power, both political and economic, exposed Indians to western intellectual thought that was largely liberal in its approach ([Liberalism In India](https://ccsinternship.files.wordpress.com/2013/05/300_liberalism-in-india_anjali-kumar.pdf), CCS). Modern liberalism in India has its [roots](https://ccs.in/evolution-liberalism-india) in the social reform movements of the mid and late nineteenth century. Social reformers like Raja Ram Mohan Roy, Gopal Krishna Gokhle and others launched a systemic attack on anti-life social practices like sati and the ban on widow remarriage. These movements influenced a lot of people, particularly in India’s eastern and western parts.

*“With the rise of demands for independence from the British, social reform liberalism gave way to the liberalism of political independence,”* says *Parth J Shah in his piece on [Evolution of Liberalism in India](https://ccs.in/evolution-liberalism-india).*

India’s freedom movement was rooted in the idea of liberalism. Under the National Congress Party, it flourished until independence, with freedom fighters and social reformers participating in the discussions that decided India’s economic and political future post-independence. However, a majority of leaders then were attracted to the idea of socialism for a young India. These ideas seeped into our planning processes and have stayed in place, despite evidence demanding change. 

*Nehru’s democratic socialism metamorphosed into Indira Gandhi’s license-permit-quota socialism. She produced the unique brand of Indian socialism. The slippery slope of planning-the logic of more and more intensive and extensive government interventions and controls -just could not be escaped* (*[Evolution of Liberalism in India](https://ccs.in/evolution-liberalism-india)*).

The idea of free trade, central to classical liberalism, also could not become popular due to the rise of the ‘swadeshi’ movement, a model of economic development that would reduce India’s dependence on other countries. By the 1870s, the opposition to free trade strengthened with the emergence of a national political economy. The actions of the East India Company had convinced Indians that free trade would only lead to monopolies and oppression. It has been hard to recover from this belief, as many Indians still are afraid of big companies exploiting small traders/businessmen.

However, there have been a few watershed moments in the evolution of liberalism in India’s history. The liberalisation of 1991 stands strong as one of the most remarkable of them. It proved just how flawed India’s protectionist economic philosophies were, and just [how much society can benefit](https://spontaneousorder.in/luis-1991/) from open markets and competition.

Another moment for liberalism was Professor B R Shenoy’s famous Note of Dissent on the Second Five-Year Plan. The Planning Commission was a panel of 21 eminent economists entrusted with the task to make the 2nd Five-Year Plan in 1955. Prof Shenoy was the only one among them to disagree with the approach which looked at central planning and deficit financing as the core elements. These elements would prove to be a big challenge to ensuring economic freedom, and that’s exactly what happened. Interestingly, in 1963, Nobel Laureate Milton Friedman had said about Shenoy’s dissent note: “If one reads Shenoy’s report now, it sounds like a retrospective description of what happened rather than a forecast.”

Hints of liberalism can also be seen in other fields, like Agriculture, for instance. Though a number of industries were liberalised in 1991, agriculture, till date, remains to be one of the most regulated sectors. Shetkari Sangathana, under the leadership of late Sharad Joshi, has been demanding the removal of all subsidies in exchange for the freedom to trade. 

All these sustained liberal attempts however have been inadequate given the scale of the problem. Fast forward a few decades, the people of India still haven’t achieved economic and social freedom. There are too many examples to quote. Due to heavy regulation of agriculture, with the farm laws now on hold, small and marginal farmers remain poor, and doubling incomes are nowhere in sight. 

The ‘Licence Raj’, was an elaborate system of regulating trade that made it mandatory for Indian businesses to acquire licences to set up and run businesses in the country. The system was dismantled with the liberalization policy introduced in 1991. A lot has happened since then, but the remnants of license raj remain, and a recent [WTO report](https://www.wto.org/english/tratop_e/tpr_e/tp503_e.htm) agrees: “India continues to rely on trade policy instruments such as the tariff, export taxes, minimum import prices, import and export restrictions, and licensing.”

## **So, where is India headed?**

Conservative communities have only grown in influence and political power, with caste and religion at the centre of their ideologies. Growing intolerance towards minority communities (making [Love Jihad a punishable offence in MP](https://www.hindustantimes.com/india-news/mp-guv-clears-love-jihad-ordinance/story-SwIdGrYtLq68EMGhajmsRM.html), for example) has only contributed to the decline of liberalism in Indian society. Indian society, though diverse, has often stifled individual rights in the name of collective will. 

More than that, the Indian state has continued to dominate its citizens’ economic and social life. We haven’t moved too far away from protectionist policies, and still, emphasise the importance of “we” above “I”. The individualistic outlook to development, that liberalism talks about, is not a popular notion in India.

The real challenge lies in the further liberalisation of the domestic sectors. It’s commonly believed that Indian liberalism is an [elite phenomenon](https://www.livemint.com/Opinion/F7bR85589b4bUrNtdGYnIO/Why-liberalism-is-turning-into-a-joke-in-India.html), marked by all forms of privilege—caste, class, geography, and so on. This however is far from the truth. Centre for Civil Society’s [Indian Liberals project](https://indianliberals.in/introduction-to-indian-liberals/) has often advocated for voices in India’s liberal history like Jyotiba Phule, Gopal Krishna Gokhale etc. Leaders like Sharad Joshi, for instance, were rooted in the ground, with small and marginal farmers, fighting to make their lives better, and their businesses profitable. 

Liberalism has strong intellectual roots, with well thought out perspectives on economic, political, and social spheres that rest on individual rights and liberal ideals. Sadly, it has not been easy to translate these ideas to seem attractive to a vast Indian population. Adding to the problem, the meaning of the term liberalism in popular discourse today has completely changed, with most people who identify as liberals being democratic socialists.

We’re living in an era where our citizenry (especially the young population) wants to be involved in society, question government action, and express dissent. At the core of every protest today, for instance, is liberty and freedom, for different groups of people, in varying ways. What we need is a shift in thinking of liberty in terms of both social and economic freedom. This would be the “[Second Freedom Struggle](https://ccs.in/evolution-liberalism-india)” as Parth J Shah calls it.

*Read more: [Does price control by government on COVID-19 Vaccination help Atma Nirbhar Bharat?](https://spontaneousorder.in/does-price-control-by-government-on-covid-19-vaccination-helps-atma-nirbhar-bharat/)*

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## Viral Memes and Bengaluru Traffic – Time to Price the Roads?

Original: https://www.spontaneousorder.in/p/viral-memes-and-bengaluru-traffic-time-to-price-the-roads

Author: Spontaneous Order

Published: 2021-04-12T14:59:24.000Z

Topics: congestion-pricing, urban-transport, traffic-congestion, incentive-policy

> When Jeffrey Archer flew down to Bangalore to attend his book launch, being introduced first-hand to Bengaluru traffic on his way from the airport, he jokingly remarked, “A woman walking on the pavement overtook my car eight times and my car overtook he

**Summary:**

Bengaluru faces severe traffic congestion, ranked the world's worst in TomTom's 2019 report, with commuters losing 243 extra hours annually—equivalent to 215 Game of Thrones episodes—and Rs 52,264 per person in direct costs, alongside 12,000 air pollution-related deaths in 2019, where vehicles contribute 50% of PM10 and PM2.5. With 80 lakh vehicles overwhelming road capacity fivefold, flawed responses like vehicle taxes or endless road expansion induce more demand. Drawing on Nobel economist William Vickrey's insight that unpriced roads cause waste, the author advocates congestion pricing: dynamic fees for peak-hour use, disincentivizing private vehicles and promoting public transport, as proven in Singapore (15 km/h speed increase via Electronic Road Pricing), London, and Stockholm (10-20% eCO2 cuts, 30% car use drop in Stockholm). This incentive-based 'terracotta vision' prioritizes market signals over coercive taxes. India's Fastag success—85% toll collection via RFID across 631 plazas—demonstrates feasibility; recalibrate it for urban congestion charges, involve private players for management and revenue to fund metros/buses, with public sensitization. Policymakers should price Bengaluru's scarce roads to restore efficiency and liveability.

**Key points:**

- Bengaluru's congestion costs commuters 243 hours and Rs 52,264 yearly, with vehicles causing 50% of air pollution and 12,000 deaths in 2019.
- Congestion pricing charges peak-hour road use dynamically, reducing traffic as in Singapore (15 km/h speed gain) and Stockholm (30% car drop).
- India's Fastag RFID success (85% adoption) enables low-cost congestion pricing implementation without new infrastructure.
- Price roads via incentives rather than vehicle taxes or expansion to align with classical-liberal resource allocation.
- Couple pricing with public transport expansion, using revenues and private management for sustainable urban mobility.

**By Mohammad Anas Khan**

* * *

  
When Jeffrey Archer flew down to Bangalore to attend his book launch, being introduced first-hand to Bengaluru traffic on his way from the airport, he [jokingly remarked](https://www.bbc.com/news/world-asia-india-38155635), “A woman walking on the pavement overtook my car eight times and my car overtook her eight times. Two more times and we would have been engaged.” Memes about the time taken to reach Bengaluru city from the airport have been flooding the internet since the meme culture got a grasp of this problem. A good chunk of memes emerge from newspaper headlines which highlight the city’s traffic congestion problem and its subsequent effect on the city’s air quality as well as liveability. It is not just the viral internet memes or celebrities who happen to be talking about the issue. A [TomTom report](https://www.tomtom.com/press-room/general/26026/tomtom-traffic-index-global-traffic-congestion-up-as-bengaluru-takes-crown-of-worlds-most-traffic-congested-city/#:~:text=Traffic%20congestion%20has%20increased%20globally,63%20cities%20showing%20measurable%20decreases.) published in 2019 ranked Bangalore as the world’s most traffic congested city, a title which is anything but laudable. 

The human cost of road congestion gives a clearer picture on what is at stake and how we see the problem evolving. According to the report, a commuter in Bengaluru spent an additional 243 hours in traffic while driving during peak hours. To put it simply, one could have watched 215 episodes of Game of Thrones. Indeed, the opportunity cost is too high ! But it’s not just people’s time which gets severely affected, it is also their productivity and subsequently the economic output of the city as a whole. According to a [study](https://www.deccanherald.com/city/cost-of-bengalurus-traffic-jams-has-a-number-876309.html), a commuter loses Rs 52,264 per year directly due to congestion. Bengaluru is India’s IT and Tech hub, a growing metropolitan but unlike other Tech hubs such as London, Singapore or the Silicon Valley, Bengaluru’s air quality index has remained relatively poor. The primary pollutant in Bengaluru’s air is particulate matter i.e. PM10 and PM2.5 which comes mostly from transport and road dust. It has been [reported](https://www.deccanherald.com/metrolife/metrolife-your-bond-with-bengaluru/how-bad-is-bengaluru-air-909370.html) that upto 50% of Bengaluru’s pollution is due to vehicular emissions or phenomena triggered by vehicular movement ( i.e. road dust). While the air pollution in other metropolitans such as Delhi or Mumbai is higher than that of Bengaluru, vehicular emissions do not take up a disproportionate share in the air pollution in those cities. The effect on people’s health due to a deteriorating air quality in Bengaluru led to a total of [12,000 deaths](https://www.thehindu.com/news/cities/bangalore/air-pollution-led-to-12000-deaths-in-bengaluru-last-year/article33874517.ece) attributed to air pollution during 2019. 

Experts have diagnosed a number of factors leading to the congestion crisis in the city including inefficient public transport system, half-baked infrastructure plan, disproportionate population growth and encroached roads. But it has been difficult to bring about solutions in a city which is increasingly moving towards a traffic deadlock. If economics of resource use is applied to this scenario, one could arrive at an inference that the roads in Bengaluru are scarce resources and their demand tremendously outstrips the supply. In 2019, the number of vehicles in Bengaluru crossed [80 lakhs](https://www.newindianexpress.com/cities/bengaluru/2019/apr/02/80-lakh-and-counting-bengaluru-roads-choke-with-vehicles-1959072.html#:~:text=According%20to%20figures%20compiled%20by,kilometres%20per%20hour%2C%20officials%20say.) which is 5 times more than what the roads can handle. Unfortunately, the focus of policymakers has been on the vehicles and not the roads. The oft-cited suggestions have been to tax vehicles and make it difficult for people to buy them, eventually leading to decrease in road traffic. Another solution which is offered is to increase and expand roads in the city to accommodate the vehicles however doing so will pave the way for a never ending rat-race. Expanding roads as an answer to traffic congestion may decrease traffic for a brief period but in the long run, it will incentivise more people to buy vehicles and occupy the roads.

**Congestion Pricing and the Economics of Incentives** 

William Vickrey, a Nobel Prize winning economist studied road congestion, its implications and arrived at the conclusion that it was actually the absence of a market or a price system which rendered  roads ( especially in metropolitan areas) to be congested. He is [quoted](http://www.econ.hku.hk/~timhau/congestion_pricing_and_road_investment.pdf) to have said in this regard that, “I will begin with the proposition that in no other major area are pricing practices so irrational, so out of date, and so conducive to waste as in urban transportation. Two aspects are particularly deficient: the absence of adequate peak-off differentials and the gross undermining of some modes relative to others. In nearly all operations characterized by peak load problems, at least some attempt is made to differentiate between the rates charged for peak and off-peak service.” Vickrey was alluding to a simple issue, why isn’t the use of roads priced upon their usage by motorists, especially in spaces which suffer severe congestion distress?

It was decades after Vickrey’s analysis that his idea found a home in Singapore. But before we discuss Singapore, it is pertinent to understand the fundamentals of congestion pricing. The idea behind congestion pricing follows the concept of pricing, users i.e. motorists must pay for their usage of roads and when the demand is high or during peak traffic hours, the road prices will fluctuate accordingly. Hence a motorist may end up paying nothing while driving on an empty road but will pay a higher amount of road usage charge during peak hours on a road where congestion is usually more. Pricing the roads in this way does two things : firstly it increases the cost of using the vehicle during peak hours and secondly, it eventually dis-incentivises vehicle use, and diverts users to look for other cost effective ways of travelling such as public transport. Through congestion pricing, the solution is arrived not so much by coercive blanket taxation on vehicles or roads. but rather on the road usage of a motorist vis-a-vis the system of prices. Motorists end up having greater control on their costs and are incentivised to behave accordingly. This framework of using people and incentives in achieving resilient policy solutions is aligned with the terracotta vision of environmentalism wherein restructuring incentives takes precedence over use of coercive force of law to reform human nature. While proponents of the ‘guns and guards’ approach will rally behind fines, taxes and penalties, the terracotta vision seeks to rework incentives in a way that the optimal solution is arrived at through co-operation and not confrontation. 

**Learning from the Singapore Experience**

The system of congestion pricing has been implemented in places such as Singapore and London. In Singapore, the practice of licensing particular roads (Area Licensing Scheme) i.e. creating paper licences for congested roads was a practice prevalent since 1975. Although it was similar to the idea of congestion pricing, it did not fulfil the purpose which is charging users on the actual usage of the road and with regard to the traffic congestion. The licence, which was available in post offices, provision stores and other similar outlets, was not priced in terms of the road congestion but it was rather priced at one value regardless of the peak or non-peak hours. 

In 1998, Singapore created the Electronic Pricing System which was the world’s first road congestion pricing system charging users according to their usage as well as based on the congestion on the road. This was achieved by installation of an IU or an In-unit in every vehicle and integrating it with a credit card payment system. Gantries were constructed in various roads, and motorists were automatically charged whenever they crossed them and entered a road where congestion pricing was applicable. The EPS has been a phenomenal success in Singapore however its success should also partly be attributed to Singapore’s focus on ensuring a world-class public transport system which connects the length and breadth of the city. It makes it easier for motorists to give up usage of their private vehicles when not needed and incentivises their behaviour towards the same.

Congestion pricing has also been implemented in Stockholm, among others. All three cities ( Singapore, London and Stockholm) have different ways of collecting and charging on road usage however the overarching principle remains the same. De-congestion of roads is just one of the many benefits coming out of pricing roads. Stockholm experienced a 30% reduction in daily car use. The traffic speeds in Singapore increased by 15 kms per hour. Lesser cars on the roads and more incentives to use public transport also meant better air quality. In all three cities, eCO2 emissions went down by 10-20%. It is pertinent to mention that the air pollution aspect is significant in the case of Bengaluru where vehicular emissions contribute to a disproportionate share in air pollution.

**Is it possible to implement congestion pricing in India?**

There is always a sense of excitement and enthusiasm in the discussion pertaining to solutions to policy problems in developed parts of the world. However, that enthusiasm quickly turns into pessimism when thinking about the same in India. The unprecedented evolution of technology and markets must infuse some enthusiasm in our ability to confront ( with the best resources) the challenges our country faces. In the words of Matt Ridley, we must not just be optimistic but rather [‘rationally optimistic’](https://www.rationaloptimist.com/) given our experience in achieving significant feats in areas such as Fastag implementation. The Fastag, which was introduced in 2016, is a method of electronic toll collection intended to lower the waiting time, decrease road congestion, and cost required for toll collection on national highways. A Fastag is a device which employs the [Radio Frequency Identification technology (RFID)](https://www.financialexpress.com/auto/car-news/explained-rfid-technology-what-role-does-it-play-in-fastag-price-banks/1793347/) and has an electronic produce code ( EPC) through which every vehicle is uniquely identified. Fastags can be easily recharged using UPI/Amazon and they can be bought from banks such as HDFC, ICICI etc. 

While initially met with skepticism, the Fastag today i.e. in a span of around 5 years has become the primary method of toll collection in national highways across the country. All the 631 tolls at national highways are now equipped with Fastag toll collection and around [85% percent](https://theprint.in/theprint-essential/how-fastag-has-become-the-easier-faster-and-environment-friendly-way-to-collect-toll-fees/608754/#:~:text=At%20present%2C%20toll%20collection%20through,to%20shift%20completely%20to%20FASTag.) of all toll collection is through Fastags. With all the tolls becoming operational, India will become the only country to have a uniform e-toll collection facility. It paves the way for a cashless, transparent and a seamless system across the country. This is just one out of many examples of how given the right set of incentives and push, India can accomplish wonderful feats. 

The success of FasTag has important implications for experiments with congestion pricing and it has renewed hope towards the success of the system in India. The management of road pricing and upkeep of infrastructure can be given to private players. The revenue thus generated can also help the Government in funding as well as developing crucial infrastructure for expanding public transport services such as metros and buses. While congestion pricing is an excellent way to address road traffic, it must be coupled with expanding cost-effective and environmentally friendly alternatives. Perhaps, the RFID technology in Fastags can be recalibrated to also collect congestion charges. Doing so will help bring down the costs of implementation since all vehicles are now mandated to have Fastags.

One important observation from the working of electronic pricing in Singapore as well as Fastag in India is that people need to be sensitised, given time and be made aware about the benefits as well as the modalities of these systems. In Singapore, there was public outreach pertaining to the entire process behind electronic pricing. In the case of Fastag in India as well, when it was implemented in 2016, there was a dedicated campaign and promotion towards using Fastag. Many toll plazas had one or two lanes specifically for Fastag users ( when it was not mandatory) and this allowed those in the long queues to know the benefits of it. Another factor is the accessibility and ease of usage. Fastags are available at all major banks as well as on online shopping platforms such as Amazon. It can easily be recharged using digital methods such as UPI. To sum it up, markets and private players played a major role in augmenting Government efforts towards the successful implementation of Fastag and the same can be emulated in the case of congestion pricing. It is time to be rationally optimistic and price the roads!

*Read more: [Vaccinations, increasing COVID-19 cases, and the Peltzman Effect.](https://spontaneousorder.in/vaccinations-increasing-covid-19-cases-and-the-peltzman-effect/)*

*\*Views expressed are personal\**

* * *

**About Mohammad Anas Khan**

Mohammad Anas Khan is a law graduate and is currently working as a Senior Associate with Centre for Civil Society. Anas is an academic enthusiast and has a keen interest in legal theory, public policy and the terracotta approach to environmentalism.

## Repealing the draconian sedition law

Original: https://www.spontaneousorder.in/p/repealing-the-draconian-sedition-law

Author: Spontaneous Order

Published: 2021-04-07T19:54:00.000Z

Topics: sedition-law, free-speech, civil-liberties, indian-constitution

> Indian democracy dropped from “Free” to “Partly Free” status in Freedom House’s latest report: Freedom in the World 2021. The government’s clampdown on free speech, unplanned lockdowns that forced millions below the poverty line, and the rise

**Summary:**

India's drop from 'Free' to 'Partly Free' in Freedom House's 2021 report stems partly from frequent misuse of the colonial-era sedition law under Section 124A IPC, which erodes constitutionally guaranteed free speech and individual liberties. Cases surged 160% from 2016-2019 per National Crime Records Bureau data, yet convictions plummeted from 33% to 3.3%, with 50% of 2019 arrestees aged 18-30; Article 14's database logs dozens during farm protests (6), anti-CAA protests (25), Hathras (22), and Pulwama (27). The law, originally designed to suppress colonial dissent—imprisoning Gandhi, Tilak, and others—targets modern critics via slogans like 'Azadi', posters, or social media posts. Supreme Court rulings like Kedarnath limit it to incitement of violence or public disorder, but enforcement ignores this, enabling surveillance of activists, students, and journalists. The government defends it for 'public order' via federalism, rejecting repeal as 'anti-national' despite Law Commission's 2018 recommendation, Congress's 2019 manifesto promise, and abolitions in UK, Indonesia, etc. From a classical-liberal standpoint, repealing this illiberal provision—or at least making it bailable—is essential to restore vibrant democracy and protect dissent against authoritarian overreach.

**Key points:**

- Sedition cases under Section 124A rose 160% from 2016-2019 with convictions falling to 3.3%, often targeting young dissenters.
- The law, a colonial tool against freedom fighters, violates Supreme Court limits requiring incitement to violence for applicability.
- Law Commission recommended revoking sedition in 2018; other democracies like UK and Indonesia have abolished it.
- Repeal Section 124A to safeguard free speech and individual liberty from government misuse.

**By Spontaneous Order**

* * *

Indian democracy dropped from “Free” to “Partly Free” status in Freedom House’s latest report: [Freedom in the World 2021](https://freedomhouse.org/countries/freedom-world/scores). The government’s clampdown on free speech, unplanned lockdowns that forced millions below the poverty line, and the rise of a Hindu nationalist movement, all contributed to India moving towards [authoritarianism](https://freedomhouse.org/report/freedom-world/2021/democracy-under-siege) on the index.  While India’s score on political freedom (34/40) was heartening, abysmal scores for civil liberties (33/60) and internet freedom (51/100) rightly raised concerns. The Indian government soon released a [rebuttal](https://pib.gov.in/PressReleasePage.aspx?PRID=1702697), claiming that the findings of the report are “misleading, incorrect and misplaced” and that India remains a “vibrant democracy, which gives space to those who hold varying views”.

According to the [report](https://freedomhouse.org/country/india/freedom-world/2021), India’s archaic law on sedition had a significant role to play in this decline. “Frequent use of sedition and other charges in recent years to deter free speech, including discussion of a discriminatory citizenship law and the COVID-19 pandemic” have been noted as encroachment upon constitutionally guaranteed freedom of speech and individual freedom. The government’s [response](https://pib.gov.in/PressReleasePage.aspx?PRID=1702697) to this particular observation was to first claim that these measures were taken to preserve “public order” and to then feign plausible deniability by using India’s federal structure where law and order are state subjects. According to the government, “Public Order and Police are state subjects under India’s federal structure of governance. The responsibility of maintaining law and order, including investigation, registration and prosecution of crimes, protection of life and property etc. rests primarily with the concerned State Governments.  Therefore, measures as deemed fit are taken by law enforcement authorities to preserve public order.”

In recent years, sedition laws have been used frequently as a tool of surveillance to target activists, students and journalists who exercise their individual liberties in questioning government action or inaction. According to data released by the [National Crime Records Bureau](https://economictimes.indiatimes.com/news/politics-and-nation/arrests-under-sedition-charges-rise-but-conviction-falls-to-3/articleshow/81028501.cms?from=mdr), the number of cases filed under [Section 124A](https://indiankanoon.org/doc/1641007/) (sedition) of the Indian Penal Code (IPC) increased by 160% between 2016 to 2019. However, the rate of conviction dropped from 33% to 3.3% in the same period. In 2019, around 50% of those arrested were in the age group of 18-30. 

Article 14’s [sedition database](https://www.article-14.com/post/our-new-database-reveals-rise-in-sedition-cases-in-the-modi-era) found that in the last year, six sedition cases during the farm protests, 25 during anti-CAA protests, 22 after the Hathras gangrape and 27 cases after Pulwama were registered. Apart from these, writing a [letter against mob lynching](https://www.thehindu.com/news/national/ramchandra-guha-mani-ratnam-aparna-sen-and-others-who-wrote-open-letter-to-pm-modi-booked/article29593009.ece), holding a [“free Kashmir” poster](https://www.thenewsminute.com/article/sedition-charges-filed-against-mysuru-university-students-holding-free-kashmir-poster-115803), uploading a [video related to the Pulwama attack](https://www.thenewsminute.com/article/sedition-charges-filed-against-mysuru-university-students-holding-free-kashmir-poster-115803) on Facebook, raising “[Azadi](https://www.newindianexpress.com/nation/2020/dec/28/up-college-students-booked-for-sedition-for-raisinganti-national-slogans-2242161.html)” related slogans and having [private phone conversations](https://indianexpress.com/article/india/ladakh-police-congress-councillor-booked-for-leaked-phone-calls-6467506/) have been considered seditious. While the central government maintains that the [larger question](https://indianexpress.com/article/india/larger-question-is-if-some-abusing-social-media-to-defame-india-promote-secessionism-prasad-7234893/) to be considered is “whether some people abuse social media internationally to defame India, to promote secessionism”, there have been several [discussions in the Parliament](https://indianexpress.com/article/india/congress-government-engage-in-war-of-words-in-lok-sabha-over-sedition-cases-7231080/) on the misuse of Section 124A. 

While a bevy of statutory provisions under [Unlawful Activities Prevention Act, 1967](https://www.mha.gov.in/sites/default/files/A1967-37.pdf), [Prevention of Damage to Public Property Act, 1984](http://legislative.gov.in/sites/default/files/A1984-3.pdf), the [Information Technology Act, 2000](https://www.indiacode.nic.in/bitstream/123456789/1999/3/A2000-21.pdf) and [Prevention of Insults to National Honour Act, 1971](http://legislative.gov.in/sites/default/files/A1971-69_0.pdf) etc. have been used, Section 124A remains the primary weapon. 

[Section 124A](https://indiankanoon.org/doc/1641007/) of the IPC states that “Whoever, by words, either spoken or written, or by signs, or by visible representation, or otherwise, brings or attempts to bring into hatred or contempt, or excites or attempts to excite disaffection towards the Government estab­lished by law shall be punished with im­prisonment for life, to which fine may be added, or with impris­onment which may extend to three years”. An explanation to the Section adds that comments that do not excite or attempt to excite hatred, contempt or disaffection are not to be considered seditious. From [Kedarnath](https://indiankanoon.org/doc/111867/) to [Balwant Singh](https://indiankanoon.org/doc/123425906/), the Supreme Court has time and again reiterated that the section can only be used when there is a threat to public disorder or an attempt to incite violence. However, before the Kedarnath case, sedition had been deliberately expunged from the Constitution for its proclivity to be misused and abused. 

Sedition was [designed by the colonial empire](https://frontline.thehindu.com/the-nation/how-a-supreme-court-judgment-brought-back-the-sedition-law-in-india/article33481062.ece) to contain discontent, criticism, and thwart all attempts made by the colonies to gain freedom. During the Indian freedom movement, Bal Gangadhar Tilak, Annie Besant, Ali Brothers, Maulana Azad and Mahatma Gandhi were all imprisoned under this law. Post this, those involved in the freedom movement were [convinced](https://www.hindustantimes.com/india-news/when-gandhi-stood-trial-for-sedition/story-5NKJFXXvjL4mSdum64vFYP.html) that this law would be antithetical to the values of democracy that new India intended to embrace. In 1948, an amendment unanimously passed by the Constituent Assembly erased Section 124A from the IPC. This was affirmed by the Supreme Court in the 1950 case of [Romesh Thapar](https://indiankanoon.org/doc/456839/), where Judge Patanjali Sastri held that “deletion of the word sedition from the draft Article 13(2), therefore, shows that criticism of government exciting disaffection or bad feelings towards it, is not to be regarded as a justifying ground for restricting the freedom of expression and of the press, unless it is such as to undermine the security of or tend to overthrow the state.” Then came the Kedarnath case which upheld the constitutionality of Section 124A and in effect brought back sedition as a criminal offence.

Demands for scrapping the provision go as far back as 1922, when Mahatma Gandhi called Section 124A “the prince among the political sections of the Indian Penal Code designed to suppress the liberty of the citizen”. In 2018, the Law Commission of India [recommended](https://lawcommissionofindia.nic.in/reports/CP-on-Sedition.pdf) revoking sedition as an offence. In its 2019 election manifesto, Congress had committed to deleting the provision. However, as things currently stand, any demand for repeal of the sedition law is considered [“anti national”](https://scroll.in/latest/929275/sedition-law-will-not-be-scrapped-centre-tells-rajya-sabha), with the government affirming its intention to strengthen the law even further “to effectively combat anti-national, [secessionist and terrorist elements](https://www.hindustantimes.com/india-news/sedition-law-will-not-be-repealed-says-amit-shah-s-ministry/story-OPpCw6I2bIV96w4joKsloN.html)”. The [United Kingdom](https://www.hindustantimes.com/world/sedition-law-in-uk-abolished-in-2009-continues-in-india/story-Pkrvylv6J0T3ddY8uqvKsO.html), Scotland, South Korea and Indonesia have long abolished their sedition laws, while countries like the US and Germany have severely restricted the scope of its implementation. India now has the distinction of [sharing this law](https://www.newslaundry.com/2016/02/18/india-shares-sedition-laws-with-countries-like-saudi-arabia) with countries like Saudi Arabia, Malaysia, Iran, Uzbekistan, Sudan, Senegal and Turkey, none of which would be considered a “vibrant democracy”.  
Just last week, in the case of [Rajat Sharma vs. Union of India](https://www.livelaw.in/top-stories/supreme-court-says-not-seditious-to-have-views-different-from-govt-farooq-abdullah-170643), the Supreme Court held that views expressing dissent against the government can not be considered seditious. For now, disregarding constitutional right to free speech and individual liberty and ignoring numerous Supreme Court judgements, sedition continues to be used by the government as carte blanche to curtail dissent. Demands for repealing this illiberal and unconstitutional provision have been rejected under the guise of national interest. Even making the offence bailable and non-cognizable, as it was in 19th century England, would be progress over the status quo. The 2019 “promise” of a [sedition law so strong it will send shivers down the spine](https://indianexpress.com/elections/bjp-sedition-law-strong-gujarat-rajnath-lok-sabha-elections-5673386/) does not seem distant any more.

About Author:

***Swati Rao***

*Swati Rao is Manager, Advocacy at Centre for Civil Society. Previously, she has worked for the US Department of State, Swaniti Initiative in India, and holds an Erasmus Mundus Masters in Public Policy and B.A. LL.B (Hons) from Hidayatullah National Law University, Raipur.*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Safeguarding electoral democracies from majoritarianism

Original: https://www.spontaneousorder.in/p/safeguarding-electoral-democracies

Author: Spontaneous Order

Published: 2021-04-07T11:55:42.000Z

Topics: majoritarianism, liberal-democracy, individual-rights, populism

> Democracy always demands committed vigilance. Threats to democracy and freedom itself, in the form of the emergence of authoritarian leaders and the rise of populism, have increased. Populist leaders of all ideologies have emerged in every continent, en..

**Summary:**

Michelle Bernier argues from a classical-liberal perspective that electoral democracies are endangered by majoritarianism and populism, which enable authoritarian leaders to manipulate majority rule against individual freedoms. She cites Latin American examples: Nicaragua's Ortega retaining political prisoners amid COVID releases; Guyana's election denial; Bolivia's interim government postponing elections and banning opposition; and Venezuela's Maduro bribing voters with food and money for 2020 legislative control. These illustrate how weak democratic systems, often conflated with majority sovereignty, become tools for state control over citizens. Drawing on Heinberg, J.S. Mill, Octavio Paz, and Norberto Bobbio, Bernier critiques pure majoritarianism as tyranny equivalent to dictatorship, violating individual sovereignty. In liberalism, true 'rule by the people' means self-governance, not subjection to majority whims. She warns against the illusion that democracy guarantees freedom, as seen in Malaysia's ethnic restrictions. The remedy: constitutionally exclude fundamental rights (habeas corpus, speech, property, association) from majority vote and require near-unanimity for constitutional changes, granting individuals veto powers against encroachments.

**Key points:**

- Populist regimes in Latin America, like Maduro's Venezuela and Ortega's Nicaragua, manipulate elections and crises to entrench power under democratic guise.
- Majority rule in democracy often leads to minority exploitation and individual rights violations, indistinguishable from dictatorship in effect.
- Liberalism demands distributing and limiting power to prioritize individual sovereignty over collective majoritarian decisions.
- Protect core freedoms from majority encroachment via constitutional exclusions and require unanimity for constitutional amendments to prevent tyranny.

**By Michelle Bernier**

* * *

Democracy always demands committed vigilance. Threats to democracy and freedom itself, in the form of the emergence of authoritarian leaders and the rise of populism, have increased. Populist leaders of all ideologies have emerged in every continent, endangering freedom. 

For instance, this phenomenon is most evident in [Latin America](https://nuso.org/articulo/la-lucha-por-la-democracia-en-america-latina/): In [Nicaragua](https://www.nytimes.com/es/2020/07/29/espanol/america-latina/democracia-america-latina-pandemia.html), President Daniel Ortega released thousands of prisoners due to the threat posed by the virus but has retained political prisoners, while in Guyana, a blockade prevented protests against the government’s attempt to stay in power despite losing an election. On the other hand, [Bolivia’s](https://www.nytimes.com/es/2020/07/29/espanol/america-latina/democracia-america-latina-pandemia.html) interim government has used the pandemic to postpone elections, resorted to emergency aid to prop up its election campaign, and threatened to ban the primary opposition candidate from running.

These examples show us how weak the democratic system of the Latin American region is. Interestingly, it is in this region where the coincidence of democracy with the majority rule is most defended, in one way or another. As Octavio Paz once said, “Without democracy, freedom is a chimera.”

The Venezuelan context is even more delicate with crucial issues like manipulation and social control deliberately exercised over the majority that is supposed to decide the country’s future. For the elections of December 6, 2020, the [Maduro regime](https://www.dw.com/en/venezuela-maduro-wins-total-control-of-legislature-after-vote/a-55836514) bribed the Venezuelan population with food and money, taking advantage of their need and poverty. In this way, the State uses democracy as a weapon against citizens. Maduro has used democracy to legitimize his power on behalf of the international community, coaxing vulnerable sections of the population to make decisions that affect everyone else.

[John Heinberg (1932)](http://dx.doi.org/10.2307/1946465) said: “The majority principle means that it is the majority that decides, it is the will of a majority that becomes the will of the whole group”. In this form of democracy, the majority has complete sovereignty over the remaining minorities, regardless of their size. A commonly used phrase is that democracy is the majority’s tyranny. That’s why there is no difference between the rule of a dictator whether minority or majority. Just imagine a world entirely determined by majority votes, including your personal decisions! 

The truth is that none of these forms of government put individual sovereignty on the driver’s seat, and all forms of government violate individual rights to varying degrees. As J.S. Mill (1859) in his book “On Liberty” said: “The people who exercise power are not always the same as those over whom it is exercised, and the ‘self-government’ spoken of is not the government of each for himself, but of each for all the others.”

Many modern constitutions proclaim that sovereignty is ultimately that of the people. In that case, democracy cannot be “rule by a majority vote”. Nor does it imply that the majority vote is an authoritative expression of what is right. Democracy refers to the rule of the people, for the people and by the people. In liberalism, this definition has a direct impact: the people rule their lives. Everyone in the community has their decision-making powers, and they are not subject to the wishes of the majority.

Norberto Bobbio (2013) has already addressed this dilemma in his book “Liberalismo y Democracia” and concluded that there are two significant problems in democracy related to liberalism. First, the need to distribute power; and second, the need to limit power. These functional defects of democracy tell us that majority vote decisions often lead to results that the minority does not want. Still, the problem may go deeper than that because sometimes majority decisions can exploit minorities.

In many countries, majority rule has led to minority rights and representation issues. On the other hand, the minority is sometimes looked at as a threat, and democracies transformed to restrict rather than expand participation. In a collectivist society, no group member wants to stand out especially since “the group” has the priority. For example, in Malaysia, no Chinese can be the prime minister. 

This illusion that the democratic process is the same as freedom is an ideal weapon for those who wish to destroy freedom and replace it with an authoritarian society. Freedom can quickly be taken away from the individual citizen, but more and more people are under the spell of the democracy illusion.

A government can enslave its citizens, and yet the belief prevails that as long as democracy is preserved, we can be sure that freedom will continue in its entirety. Unfortunately, democracy does not have to serve freedom. It is entirely consistent with freedom-destroying elections, even though people believe otherwise. Consequently, it is essential to refocus attention on the importance of freedom over democracy as we exercise our voting power.

The defects we have just recounted must be taken as symptoms of deeper problems. The remedy is two-fold. The first step should be to exclude fundamental freedoms such as *habeas corpus*, freedom of thought and expression, property rights, freedom of association, among others, from encroachment by majority decisions. The other is that the rule of majorities should come as close as possible to unanimity, at least as far as the Constitution is concerned. These two limitations on majority decisions could be interpreted as veto powers granted to individuals, an absolute veto of invasions of personal freedoms, and a modified veto in constitutional matters.

Metaphorically, it could be said that the political exercise in the democratic State is like that which a chess player must face: the player, since s/he participates in the game of chess, knows in advance that s/he can use many strategies, that s/he can use them to obtain specific expected results; but, in the same way, s/he knows that to transgress the rules that govern the game in question implies a violation. For this reason, the metaphor of the chess player is undoubtedly imperfect. But on the other hand, the rules allow us to know who is playing and who is cheating instead.

*The author is  a part of Students for Liberty’s first cohort of [Fellowship for Freedom](https://signrt.website/click?redirect=https%3A%2F%2Fstudentsforliberty.org%2Fsouth-asia%2Ffellowship-for-freedom%2F&dID=1614107749425&linkName=Fellowship%20for%20Freedom) in India.* 

*Read More: [What the Govt Can Do To Fix India’s e-waste Problem](https://spontaneousorder.in/what-the-govt-can-do-to-fix-indias-e-waste-problem/)*

* * *

**About Michelle Bernier**

Michelle Bernier is an attorney specializing in international law and commercial law. She is currently studying Master of Laws and International Business, with a double degree from the Universidad Internacional Iberoamericana in Mexico and the Universidad Europea del Atlántico. She is also a part of Students for Liberty’s inaugural cohort of Fellowship for Freedom in India.

## So Basically Episode 19: Disinformation की समस्या

Original: https://www.spontaneousorder.in/p/so-basically-episode-19-disinformation

Author: Spontaneous Order

Published: 2021-04-06T10:58:00.000Z

Topics: disinformation, free-speech, government-regulation, social-media

> Disinformation is a problem that has been worsened by the infodemic of the social media age. Interest groups have often called for government regulations to curb the menace. In this episode of SO Basically, we dig deeper into the problem and see how gov..

**Summary:**

This promotional post for Episode 19 of SO Basically introduces disinformation as a problem exacerbated by social media's infodemic, critiques interest groups' calls for government regulations, and argues that such actions erode democracy's fabric, aligning with Spontaneous Order's classical-liberal lens on resisting state overreach in information control.

**Key points:**

- Disinformation has worsened in the social media age, prompting calls for government regulation.
- Government action against disinformation risks undermining democratic freedoms.
- Episode explores these issues from a classical-liberal perspective.

**By Spontaneous Order**

* * *

Disinformation is a problem that has been worsened by the infodemic of the social media age. Interest groups have often called for government regulations to curb the menace. In this episode of SO Basically, we dig deeper into the problem and see how government action on disinformation can erode the fabric of our democracy.

Watch now:

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## What the Govt Can Do To Fix India’s e-waste Problem

Original: https://www.spontaneousorder.in/p/what-the-govt-can-do-to-fix-indias-e-waste-problem

Author: Spontaneous Order

Published: 2021-04-05T16:51:15.000Z

Topics: e-waste-management, extended-producer-responsibility, deposit-refund-scheme, environmental-regulation

> The Prime Minister has managed to capture the national imagination on core economic issues, through schemes such as ‘Make in India’ and ‘Digital India’. But now the government must acknowledge the impact of these schemes on e-waste generation in t

**Summary:**

India's e-waste crisis is escalating due to schemes like Make in India and Digital India, with 90% recycled informally by unauthorised operators who dump toxic residues like lead and mercury, contaminating Delhi's Loni, Mandoli, and Krishna Vihar soils, polluting the Yamuna, and spiking air quality issues in Moradabad and Seelampur. The 2016 E-Waste Management Rules' Extended Producer Responsibility (EPR) model has failed: over 53% of major EEE firms rank below average in compliance per a 2018 Toxics Link study, and many of 178 authorised recyclers operate under-capacity or at a loss. Unauthorised recyclers dominate by offering double the prices—e.g., Rs 4,642.9 vs Rs 1,133.3 for an end-of-life HP laptop—due to evading disposal costs, regulations, and safety norms, while refurbishing and reselling in markets like Nehru Place. From a classical-liberal lens, the solution lies in market incentives: mandate a Deposit Refund Scheme (DRS) where producers charge refundable fees higher than informal offers to draw consumers; enforce third-party audits, proven effective in a 2013 Gujarat experiment to curb leakages; and create a government-monitored Common Deposit Account for flexible refunds and e-waste tracking. These reforms, building on EPR, address state capacity limits and must be implemented in the government's first 100 days to enable a sustainable New India.

**Key points:**

- 90% of India's e-waste is recycled informally, leading to toxic pollution from untreated residues.
- Unauthorised recyclers offer at least double the prices of authorised ones (e.g., Rs 4,642.9 vs Rs 1,133.3 for an HP laptop) by evading regulations.
- Mandate a Deposit Refund Scheme with fees exceeding informal prices to incentivise consumers to return e-waste to producers.
- Introduce third-party audits, as in Gujarat's 2013 experiment, to verify proper disposal and prevent sales to unauthorised recyclers.
- Establish a Common Deposit Account for cross-producer refunds and government tracking of e-waste flows.

**By Tarini Sudhakar**

* * *

The Prime Minister has managed to capture the national imagination on core economic issues, through schemes such as ‘Make in India’ and ‘Digital India’. But now the government must acknowledge the impact of these schemes on e-waste generation in the country, and act quickly to check India’s rapidly increasing e-waste.

Previous policies have failed to curb the pollution caused by unauthorised recyclers who do not treat toxic residue properly. We propose three modifications to the current e-waste management model which will incentivise consumers to return their e-waste to producers, cut off leakages to unauthorised recyclers, and help the government track e-waste transactions more efficiently.

## How Do We Ensure Proper Treatment of Toxic Residue?

Out of the total e-waste recycled in India, 90 percent is done informally. Unauthorised recyclers extract profitable metals such as gold, copper and aluminium, but dump toxic substances like lead and mercury. Studies show that the soil in Loni, Mandoli and Krishna Vihar in Delhi, where e-waste is openly discarded, is deeply contaminated with heavy metals. The terrible condition of the Yamuna river is well-known, and the air quality of e-waste hubs like Moradabad and Seelampur have hit record-high pollution levels.

So, how do we ensure proper treatment of this toxic residue?

> The E-Waste Management (EWM) Rules, 2016 tried to divert the flow of e-waste from unauthorised recyclers and guarantee the safe disposal of hazardous residue through the Extended Producer Responsibility (EPR) model. 

Under this, producers of electronics and electrical equipment (EEE) have to ensure that their products are sent to authorised recyclers at their end-of-life stage.

But according to a [2018 Toxics Link study](http://toxicslink.org/docs/Time%20to%20Reboot%203.pdf), more than 53 percent of major EEE companies in India rank ‘below average’ in their fulfilment of EPR. In fact, our [research](https://ccs.in/sites/default/files/research/doing_business_in_delhi.pdf) on authorised recyclers in India showed that many of the 178 recyclers registered with the Central Pollution Control Board in 2016 are performing under-capacity, or running at a loss.

## Recycling In The Informal Sector

Meanwhile, recycling in the informal sector is lucrative. Unauthorised recyclers handle more than 95 percent of e-waste in India because they offer [at least double](https://ccs.in/sites/default/files/research/doing_business_in_delhi.pdf)the prices of authorised recyclers. For instance, they quote Rs 4,642.9 for an end-of-life HP laptop, while authorised recyclers offer Rs 1,133.3.

This price gap is the result of unauthorised recyclers’ operational efficiency. They circumvent the cost of disposing toxic residue securely, bypass the regulatory costs of acquiring licences, and neglect workers’ safety.

> Moreover, unauthorised recyclers refurbish/repair EEE intended for disposal, and sell them at secondary markets such as Nehru Place and Gaffar Market in Delhi to make additional profits. 

Authorised recyclers are prevented from doing so by producer companies, that demand evidence of destroyed e-waste to prevent second-hand goods from competing with their new products.

These leakages to the informal sector can be contained by building on two principles: First, consumers must be incentivised to sell their e-waste only to authorised recyclers. Second, authorised recyclers should be prevented from selling their collected e-waste to unauthorised recyclers. Instead, they should recycle it, and dispose hazardous residue properly.

Acting on these fundamentals, we recommend three modifications to the existing EPR model: a mandatory Deposit Refund Scheme (DRS), third-party audits, and a Common Deposit Account.

First, a DRS compels consumers to return their end-of-life products to the producer. Producers charge an additional amount at the time of sale of EEE, which is returned either partially or fully to consumers, only when they return the EEE.

## A Clarion Call To The Govt

A single producer will not implement a DRS as it would be disadvantageous in market competition. The government needs to mandate the DRS implementation and not keep it optional. The quantum of the Deposit Refund fees also needs to be fixed; otherwise, producers will set it close to zero to avoid increasing their prices. Fees refunded from the deposits should always be higher than the prices offered by unauthorised recyclers. This will prevent consumers from selling their e-waste to *kabadiwalas*.

> Second, third-party audits administer better checks on the flow of e-waste. Currently, the government needs to ensure that authorised recyclers are disposing hazardous residue properly. 

However, its checks have remained ineffective. We have documented authorised producers and recyclers selling their collected e-waste to unauthorised recyclers in Seelampur. The latter borrowed certificates from other authorised recyclers for a certain fee to ‘verify’ their transactions as per regulations.

Given limited state capacity, third-party auditors would serve as a superior alternative. A [2013 experiment run by Duflo et al,](https://www.nber.org/papers/w19259.pdf) in Gujarat, showed that third-party audits were more reliable when the Gujarat Pollution Control Board (GPCB) randomly assigned auditors to pollution-emitting firms. GPCB paid the auditors a fixed amount from a central pool of funds. This also resulted in lower emissions as the firms knew that GPCB was receiving accurate information.

> Finally, a government-monitored Common Deposit Account holds the fees collected from consumers as part of the DRS. 

This Account has two benefits: First, consumers can get their refund from any producer selling EEE. They can walk into an Apple store to return a Samsung phone, and withdraw their deposit. Second, the government can track the quantity of e-waste sold to authorised recyclers and hence, check whether all hazardous residue is treated properly.

Pollution caused by improper processing of e-waste is a clarion call for government intervention. However, the current EPR model has failed to achieve its intended results. The government must ready it for reform in its first 100 days of its second terms, to make sure people survive to see his ‘New India.’

*This article was originally published in [The Quint.](https://www.thequint.com/news/environment/modi-government-electronic-waste-management-climate-pollution-climate-change#read-more#read-more#read-more)*

*Read more: [Just enough democracy: from ‘free’ to ‘partly free.’](https://spontaneousorder.in/category/articles/)*

* * *

**About Tarini Sudhakar**

Tarini studied History at Lady Shri Ram College for Women. She is a former Research Associate of the Centre for Civil Society.

## Spontaneous Dialogue Ep 7: Education Financing – Filling A Sieve With Water

Original: https://www.spontaneousorder.in/p/spontaneous-dialogue-ep-7-education-financing-filling-a-sieve-with-water

Author: Spontaneous Order

Published: 2021-04-05T10:54:00.000Z

Topics: education-financing, school-education, india-policy

> In this episode of Spontaneous Dialogue, Prashant Narang, Associate Director, CCS speaks to Mridusmita Bordoloi, Senior Researcher at the Accountability Initiative, about how school education is financed in India. Listen here: To listen to all other epi..

**Summary:**

This post is a brief announcement for Episode 7 of the Spontaneous Dialogue podcast, titled 'Education Financing – Filling A Sieve With Water,' featuring Prashant Narang (Associate Director, CCS) interviewing Mrdusmita Bordoloi (Senior Researcher, Accountability Initiative) on school education financing in India. No transcript, detailed arguments, or specific facts from the discussion are provided, only links to listen. The post frames content through Spontaneous Order's classical-liberal lens, critiquing pseudo-socialism in Indian history.

**Key points:**

- Announces podcast episode on inefficiencies in India's school education financing.

**By Spontaneous Order**

* * *

In this episode of Spontaneous Dialogue, Prashant Narang, Associate Director, CCS speaks to Mridusmita Bordoloi, Senior Researcher at the Accountability Initiative, about how school education is financed in India.

Listen here:

To listen to all other episodes of the Spontaneous Dialogue Podcast on your favourite platforms, click [here](https://anchor.fm/spontaneousdialogue).

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Wait, how and why do we vote?

Original: https://www.spontaneousorder.in/p/wait-how-and-why-we-vote

Author: Spontaneous Order

Published: 2021-04-01T11:51:01.000Z

Topics: voter-psychology, voting-behavior, elections-india, decision-making

> In one of our casual conversations, my cousin, a first-time voter, posed a question that stirred a train of queries in my head. In the context of the imminent assembly elections in Tamil Nadu, she asked me, “How do I decide who I should vote for?”. Th

**Summary:**

T. Bhuvanesh Ram reflects on his cousin's question as a first-time voter in Tamil Nadu's assembly elections, highlighting the lack of easy answers for young, apolitical voters amid India's high volume of first-timers. He dissects 'why' people vote: 2019 Lok Sabha turnout was 67.1%, driven not by direct rewards but social factors like altruism, conformity, self-expression, the 'voter’s illusion' (belief in personal impact), and identity affiliations (caste, language, religion). 'How' voters choose leans on emotional, intuitive System 1 thinking per Kahneman—fear, anger, loyalty, anti-incumbency, ideological affinity, even candidate attractiveness—over rational deliberation, with Indians prioritizing parties over candidates. An ideal framework might involve manifesto comparisons for benefits to self, community, then state/country, starting with basics like roads and water; yet gaps persist, e.g., for transpersons or disabled voters. Research shows polls often miss due to voting's personalized, multi-influenced nature seeking marginal life improvements. Voters must guard against biases in this 'festival of democracy,' though no universal rational method exists.

**Key points:**

- Voter turnout in India's 2019 Lok Sabha elections was 67.1%, motivated by altruism, conformity, self-expression, and the 'voter’s illusion' rather than direct personal gain.
- Voting decisions are dominated by emotional System 1 thinking, including fear, anger, loyalty, and candidate attractiveness, especially in party-focused India.
- Ideal voting requires comparing party manifestos for benefits to self, community, and country, but information shortages hinder marginalized groups.
- Voters operate in personalized contexts seeking marginal improvements, with polls failing to predict due to emotional and identity influences.

**By T. Bhuvanesh Ram**

* * *

In one of our casual conversations, my cousin, a first-time voter, posed a question that stirred a train of queries in my head. In the context of the imminent assembly elections in Tamil Nadu, she asked me, “How do I decide who I should vote for?”. This deer-in-headlights moment made me realise that her question had no easy answers. It is one thing for opinionated adults to vote. However, it’s quite another to explain to an energetic, apolitical first-time voter the criteria on which they must decide their voting preferences. Given the sheer volume of young, first-time voters in India, it is imperative to make this engagement a fruitful, fulfilling affair.

While meditating on the initial question, two key questions seem to emerge. The first one, “*Why* do we vote?”, addresses the motivation and incentives behind one’s decision to participate in voting. After all, not every eligible voter turns up at the polling booth. For instance, the voter turnout percentage for the 2019 Lok Sabha elections [was 67.1%](https://timesofindia.indiatimes.com/india/at-67-1-2019-turnouts-a-record-election-commission/articleshow/69419715.cms). The second question, which is related to the first, is ‘*How* do we vote?’. This question seeks to understand how we choose our preferred candidate/party from the rest. 

Answering the ‘why’ requires us to set the context in which voting occurs. Every eligible voter takes time out of his schedule on polling day and casts his vote based on specific determinants (his liking for a party, ideology, candidate etc.). At the same time, the reward, if any, is social. While one might argue that voting is a democratic right and must be exercised to hold governments accountable, a layman gets no answer to his question: “What’s in it for me?”.

Research on political psychology reveals that voting behaviour has a high correlation with [altruistic tendencies](https://www.apa.org/monitor/2008/06/vote). A person who is naturally inclined to think pro-socially is more likely to resolve the ‘social dilemma’ stated above and vote, than a self-centred person. The need for [conformity](http://www.donaldgreen.com/wp-content/uploads/2015/09/Gerber_Green_Larimer-APSR-2008.pdf) or to ‘fit in’ is another solid extrinsic motivator. Apart from these social determinants, individual factors like the opportunity for self-expression, belief of having an impact on outcomes of the election etc., may also come into play. The latter, especially prevalent in loyalist voters, is termed by Melissa Avecedo as the [‘voter’s illusion’](https://www.jstor.org/stable/3792526?seq=1). A person enthusiastically votes, believing that others will follow him and have a final cumulative impact on the results. Apart from the prominent role of identity-centric affiliation (along caste, language, religion and regional lines), these studies present a fascinating sneak-peak into a voter’s mind and his/her various motivators.

Among those motivated enough to vote, the ‘how’ question seeks to identify the factors influencing a voter’s choice. Theories on decision making identify two modes of thinking – Unconscious, intuitive thought ruled by emotions ([System 1 as Daniel Kahneman](https://en.wikipedia.org/wiki/Thinking,_Fast_and_Slow) puts it) and Conscious, deliberative thinking ruled by rationality (System 2). It would be wrong to assume that all those who vote are rational, and several studies show the disproportionate effect of emotions in voting choice decisions. A [recent study](https://www.orfonline.org/research/emotions-and-vote-choice-perspectives-from-the-us-and-india/) lucidly explains that humans are more prone to emotional appeals (based on fear and anger, real or imagined). More importantly, this effect is just as strong, if not more, on educated voters who consider themselves as objective. This is how emotional tendencies like loyalty, general distrust in politics, anti-incumbency and ideological affinity play a substantial role in voting outcomes. Other studies also indicate that qualities like [candidates’ attractiveness](https://www.bbc.com/future/article/20150506-the-dark-psychology-of-voting) are more influential than we consider them to be. In the Indian context, one votes for a party, not for a candidate. If you try and remember your local MP and MLA, you’ll see what I mean.

It is interesting to explore why/how people vote. The more important question, however, with which we started, is how *people should* vote. Pursuing this thought, we could also ask, “can and should there be an ideal framework based on which we might decide our voting choices?”. 

Let’s dare to hypothesise how an ideal voter must think. She could choose her candidate by assessing which party, if voted for, would be most beneficial for a) herself, (b)her community and then c) her state/country as a whole. Given that people essentially want their most basic, immediate needs satisfied first (like good roads, clean water, reliable power), we could further assume that most of them use criteria (a) and (b)rather than (c). For both options, an excellent place to start is an objective and comparative analysis of parties’ manifestos. If she is a farmer, she might easily find what the fray parties have promised for the farming community, compare them, and decide. However, if she is a transperson or a person with a disability, she won’t even have basic information to make her decision[, as is often the case](https://www.newindianexpress.com/states/tamil-nadu/2019/mar/21/raw-deal-for-pwds-women--transpersons-in-manifestos-1953973.html). This simple exercise is only to point out that it’s almost impossible to find a universal rational framework for deciding one’s voting choice!

Despite many attempts, research studies have not conclusively understood why and how people vote. The [variance](https://www.hindustantimes.com/lok-sabha-elections/lok-sabha-elections-2019-1998-to-2014-what-exit-polls-predicted-and-what-voters-decided-a-look/story-equsfdbM4CYpHB7i2LBANK.html) between opinion polls, exit polls and actual results is a case in point. In sum, each voter has a personalised context in which he/she votes. In doing so, they look for even a marginal improvement in their micro-world of wants and needs, which is subject to multiple influences. One has no right to wail and whine later if he/she isn’t a willing participant in the ‘festival of democracies’. 

Before deciding on our preferred candidate, it’s helpful to keep in mind the unconscious influence of emotions, biases, hateful content, which is more pertinent today than ever before. One might feel left with more questions than answers, to which I reply with the Zen quote, “We don’t find the answers, we lose the questions”. My cousin surely isn’t going to like that.

*Read more: [Repealing the draconian sedition law.](https://spontaneousorder.in/repealing-the-draconian-sedition-law/)*

Author: *T. Bhuvanesh Ram.*

About the Author:

T. Bhuvanesh Ram, a student of physics by graduation, is a ‘cinephile’ whose interests include policymaking, Constitution, physical comedy, punching above his weight, and daydreaming. He has cleared the UPSC Civil Services examination 2019 and keeps himself busy catching up to his own rising expectations from life.

* * *

**About T. Bhuvanesh Ram**

T. Bhuvanesh Ram, a student of physics by graduation, is a ‘cinephile’ whose interests include policymaking, Constitution, physical comedy, punching above his weight, and daydreaming. He has cleared the UPSC Civil Services examination 2019 and keeps himself busy catching up to his own rising expectations from life.

## Air: A Tragedy of the Commons

Original: https://www.spontaneousorder.in/p/air-a-tragedy-of-the-commons

Author: Spontaneous Order

Published: 2021-03-26T12:56:17.000Z

Topics: tragedy-of-the-commons, air-pollution, market-incentives, property-rights

> Aristotle believed that any resource shared by a large number of users is the least cared for. The tragedy of the Commons, a global dilemma, is at the centre of this belief. The idea is that commonly held open-access resources like air, water bodies etc..

**Summary:**

Air pollution exemplifies Aristotle's tragedy of the commons, where shared resources like air suffer over-exploitation due to lack of individual incentives to restrain use. While global governments face increasing accountability—such as a 2020 UK court ruling linking air pollution to a nine-year-old girl's 2013 death—India treats deteriorating air quality as low priority despite hosting six of the world's most polluted cities in 2019 and ranking third in air pollution deaths in 2018 after Afghanistan and Pakistan. The 2021-22 budget allocated far less than requested for pollution control. From a classical-liberal perspective, effective public policy favors incentives over mandates: promote affordable electric vehicles (EVs) via market competition and manufacturer incentives under Make in India; impose heavier taxes on diesel vehicles; electrify government buses like BEST and PMT; offer corporates tax breaks for green initiatives, as Cisco powers 60% of its Bangalore office with wind energy; incentivize states to expand forests with higher budgets; mandate environmental projects in STEM curricula for awareness; and establish well-defined property rights through pollution rights markets for cost-efficient control. All stakeholders—from individuals to corporates—must be incentivized to safeguard this shared resource.

**Key points:**

- Air pollution is a tragedy of the commons best addressed through incentives rather than mandates.
- Promote affordable EVs by fostering market competition, manufacturer incentives, and heavier taxes on diesel vehicles.
- Electrify public buses and incentivize corporates with tax benefits for renewable energy adoption, like Cisco's 60% wind-powered Bangalore office.
- Establish pollution rights markets and property rights to enable cost-efficient pollution control.
- Incentivize states for forest expansion and integrate environmental projects into STEM education for public awareness.

**By Rafiya Sheikh**

* * *

Aristotle believed that any resource shared by a large number of users is the least cared for. [The tragedy of the Commons](http://dlc.dlib.indiana.edu/dlc/bitstream/handle/10535/1622/Managing_the_Atmosphere_as_a_Global_Commons.pdf?sequence=1), a global dilemma, is at the centre of this belief. The idea is that commonly held open-access resources like air, water bodies etc., inevitably suffer over-exploitation as no individual has an incentive to stop his/her use of the resource. Air pollution is a direct result of this tragedy of the commons.

Governments worldwide have been trying to tackle the issue of air pollution. Quite recently, in December 2020, a UK court passed a landmark [ruling](https://www.nytimes.com/2020/12/16/world/europe/britain-air-pollution-death.html), highlighting air pollution as the cause of death of a nine-year-old school-going girl. While the girl had passed away in 2013, acknowledging that air pollution can be fatal was a big step towards shining light on the issue. Globally, governments are being held more accountable than ever before for failing to recognize this.

In India, deteriorating air quality is yet to be regarded as an issue of high urgency, though we house some of the most polluted cities in the world. Air quality does not seem to be a priority for the government. A look at the [Financial Budget for the year 2021-22](https://swachhindia.ndtv.com/budget-2021-experts-analyse-budget-allocations-for-clean-air-initiatives-56250/#:~:text=The%20government%20has%20allocated%202%2C217,a%20voluntary%20vehicle%20scrapping%20policy.&text=On%20the%20other%20hand%2C%20the,allocated%20for%20FY%202021%2D22.), shows that the budget allocated towards curbing pollution and environmental preservation falls short by millions from the [original](https://science.thewire.in/environment/air-pollution-union-budget-2020-government-moefcc-mohua-cpcb-priority/) ask. If we look at the [data for deaths from Air Pollution as of 2018](https://www.healtheffects.org/announcements/state-global-air-2018-over-7-billion-people-face-unsafe-air), India ranks third highest after Afghanistan and Pakistan. According to the [World Air Quality Report, as of 2019](https://www.healtheffects.org/announcements/state-global-air-2018-over-7-billion-people-face-unsafe-air), there are 6 Indian cities in the world’s most polluted cities, and things are only getting worse.

In public policy, policies that incentivise are much more effective than those that mandate. There is a need to incentivise ordinary people and institutions to make smart use of resources. Air quality which has a direct influence on the health of our loved ones must be incentivised as a priority. 

To begin with individual citizens, their most direct contribution can be towards curbing pollution from car traffic. India is paving the way for electric vehicles, but they also need to be made more accessible. Electric vehicles (EV) have to move from being exorbitantly priced to being accessible and affordable by the masses. This can be done if more competition is allowed to flourish in the market for EVs. The government could give incentives to manufacturers and enterprises producing electric transport, as a part of the Make in India initiative. The government can also levy a fine on those responsible for actions tarnishing common resources further. For instance, the government can charge diesel engine-based vehicles a heavier tax than petrol or CNG. One big step in curbing air pollution has to be making government busses electric. Even today, government busses such as BEST, PMT are major air polluters. Delhi government recently announced its [EV policy](https://ev.delhi.gov.in/) which aims to improve Delhi’s air quality and create an entire supply-chain ecosystem for this new segment of vehicles. This includes switching Delhi’s public transport to electric. It remains to be seen how effective the entire policy proves to be, but it’s a welcome move.

Even corporates and tech giants can be involved in this process. [Cisco Systems, for instance, has powered 60% of its Bangalore office on wind energy](https://blogs.cisco.com/csr/ciscos-bangalore-campus-now-powered-by-solar). Such companies could be given corporate taxation or SEZ rental benefits as incentives. At Cisco, there is a team dedicated to Environment Sustainability that carries on projects in the protection of the environment at a large scale, inviting the common public and internal employees to bring the effort to fruition. 

Talking about markets, [‘Economists prefer dead trees’](https://www.mckendree.edu/academics/scholars/issue4/tonnies.htm), meaning that economists find value when the standing tree in a forest is broken down for paper, wooden furniture etc. Governments need to first look at incentivising the markets.

STEM institutions have a massive role in helping people become aware of air pollution as an issue and get the public concerned. Not many people sitting on level 4 (of income level) acknowledge air as a tragedy of commons. The gap is in awareness which when fulfilled can help individuals across different income levels, age groups and cultures become aware of the tragedy of air pollution and ways to contribute to its prevention and mitigation. The medium for raising awareness will vary for different stakeholders, but learnings from scientific research and studies can be disseminated to neighbourhoods, communities and societies. 

Likewise,  state governments can be incentivised to promote and safeguard the forests. The states working toward expanding vegetation and forest cover could receive higher budgetary rewards. Every semester project an environmental project could become mandatory towards attaining credits for students. Additionally, the absence of well-defined property rights to the use of environmental resources is an important source of pollution-related problems.  The creation of [pollution rights markets](https://www.mckendree.edu/academics/scholars/issue4/tonnies.htm) just may be the answer to bring pollution control in a cost-efficient manner.

Given air is a shared resource, every stakeholder, from an individual to the corporates, must be held accountable to work for the betterment of the air we breathe altogether.

*Read more: [Imperfect Reforms Are Still Reforms](https://spontaneousorder.in/imperfect-reforms-are-still-reforms/)*

* * *

**About Rafiya Sheikh**

Network Consulting Engineer at Cisco Systems by profession. Public Policy enthusiast. A Toastmaster by choice. Love reading on governance, people and consuming the universe through books. Living in the wondrous realm at the confluence of math, science and fiction. A fellow explorer with a stubborn heart driven by curiosity!

## Imperfect Reforms Are Still Reforms

Original: https://www.spontaneousorder.in/p/imperfect-reforms-are-still-reforms

Author: Spontaneous Order

Published: 2021-03-19T14:08:57.000Z

Topics: farm-reforms, agriculture-policy, market-liberalization, india-economy

> While the current farm reforms are imperfect, the route to improvement is through amendments not repeal. These laws have their share of problems but it is still an improvement from the previous system. In his article on Project Syndicate, Kaushik Basu c..

**Summary:**

Arjun Krishnan defends India's recent farm laws against Kaushik Basu's call for repeal, arguing that while imperfect, they represent progress toward market openness and should be amended rather than scrapped. Basu criticizes the laws for assuming ceteris paribus (lacking farmer trust due to poor government outreach and no consultations), no legal MSP guarantee (risk of low prices or poor procurement), absence of judicial redress (bureaucratic disputes only), and potential corporate monopsonies. Krishnan counters that trust issues are procedural, not substantive; MSP risks predate the laws and are mitigated by new options like inter-state trade to high-procurement states with bonuses; judicial fixes can come via amendments benefiting all parties; and the laws foster competition by allowing anyone with a PAN card to buy produce, dismantling existing APMC monopsonies. Repeal would entrench the status quo of restricted markets, reversing gains in farmer choice without removing mandis. From a classical-liberal view, these reforms enhance freedom and competition despite flaws, aligning with the need for agricultural liberalization Basu himself acknowledges.

**Key points:**

- Farm laws provide farmers more choices without eliminating existing APMC mandis, making repeal unnecessary.
- MSP concerns are unrelated to the new laws, which enable inter-state trade to access better prices and procurement.
- Bureaucratic dispute resolution is a fixable flaw via amendments, not grounds for repeal.
- Reforms reduce monopsony risks by allowing broad market participation, countering current APMC dominance.
- Imperfect reforms should be improved through amendments to advance market openness.

**By Arjun Krishnan**

* * *

*While the current farm reforms are imperfect, the route to improvement is through amendments not repeal. These laws have their share of problems but it is still an improvement from the previous system.*

In his article on [Project Syndicate](https://www.project-syndicate.org/commentary/india-new-farm-laws-market-state-balance-by-kaushik-basu-2021-02), Kaushik Basu criticises the recently passed farm bills on a variety of grounds. He argues that the laws are sufficiently flawed to require repeal. While some of his points have merit, the recommendation to repeal the laws is an overreaction.

Kaushik Basu makes four key criticisms of the agriculture reforms. He argues that the laws (i) assume ceteris paribus, (ii) Minimum Support Price (MSP), (iii) does not allow judicial redress and, (iv) could create monopsonies.  In the following article, I will address each of these concerns. 

Ceteris paribus is a phrase meaning “all other things being equal”.  It is a frequently used assumption in economics to assess the impact of some change. Kaushik Basu argues that *ceteris paribus*, the farm laws, cannot hurt the farmer since it provides more choice without removing current markets. He argues that this assumption requires a level of trust in the government that farmers do not have. The government has not worked hard enough to build awareness or consensus about the farm laws. The government did not undertake the traditional steps of public consultations and stakeholder meetings to discuss the text of the law.  This outreach and procedural failure eroded trust in the government. But this is not an argument against the content of the laws. A meaningful discussion needs to happen about procedural safeguards when passing laws, but that does not mean the law is flawed. 

He also argues that without a legal guarantee of MSP, policymakers can effectively dismantle it by setting the price so low that no farmer will want to sell. Policymakers could also fail to provide accessible product collection centres.  However, this objection is unchanged even if the government repeals the farm laws. It is, in fact, unrelated to the farm laws. If anything,  the laws protect the farmers from this by ensuring options outside the government mandi framework. Laws that make inter-state trading easier will allow farmers from states with low procurement to sell to states that procure at better rates and higher quantities.  Many states also provide a bonus on top of MSP to increase farmer income. Ease of inter-state trade would mean farmers can sell to the buyer that offers the best price. 

He argues that the reforms do not allow redress in the judicial system. The law, as it stands, offers dispute resolution only through the bureaucratic system. A purely bureaucratic dispute resolution mechanism is a problem with the Act and must be addressed. But this can be fixed using amendments. There is no need for repeal. Lack of judicial redress is a problem for all parties in a contract. 

Kaushik Basu ends his article by warning against the risk of corporate monopsonies. The concern about monopsonies is important, but a repeal of the laws would allow the current monopsony to continue. The new laws by allowing competition will reduce the risk of monopsony power since it allows for more people to buy. The law, as it stands, allows anyone with a PAN card to set up a market yard or purchase farm produce. Suggesting that the government should repeal the laws to reduce the chance of a monopsony is strange since there currently exists a monopsony in the market of many farm goods in the Agricultural Produce Market Committee(APMC) yards.  

Like Dr Basu himself admits, the market for grains needs reform and openness. Repealing the law would mean taking many steps back from that goal. The current law is imperfect but an improvement over the previous system. 

*Read more: [Where are the forest keepers: A look at India’s forest regime](https://spontaneousorder.in/where-are-the-forest-keepers-a-look-at-indias-forest-regime/)*

* * *

**About Arjun Krishnan**

Arjun Krishnan is a political science graduate from Ashoka University and has a master's degree from Warwick University. Prior to joining CCS, he interned with the Cato Institue and the Institute of Economic Affairs. The ideal of freedom, both economic and social, are of great importance to him. He enjoys travelling, reading books, and listening to podcasts.

## How 100 unicorns are propelling India forward

Original: https://www.spontaneousorder.in/p/how-100-unicorns-are-propelling-india-forward

Author: Spontaneous Order

Published: 2021-03-15T14:43:06.000Z

Topics: indian-economy, startups, unicorns, regulatory-reform, venture-capital

> Many believe constant claims by Opposition parties and leftist journals that our economy is dominated by two-Modi-friendly conglomerates. Rubbish. A research paper by Neelkanth Mishra of Credit Suisse reveals India has spawned 100 “unicorns”—unliste

**Summary:**

Swaminathan S.A. Aiyar debunks claims by opposition parties and leftists that India's economy is dominated by two Modi-friendly conglomerates, citing Credit Suisse research by Neelkanth Mishra identifying 100 unicorns—unlisted new companies valued at over $1 billion each. These represent a broad-based surge of entrepreneurs unconnected to old wealth or political favors, funded by billions from global investors betting on innovative ideas despite high failure risks. Two-thirds started post-2005, spanning IT, e-commerce, SaaS, biotech, logistics, and more, atop 80,000 startups. Examples include Serum Institute (world's top vaccine producer), Flipkart (sold for $16 billion to Walmart), and Ola Cabs planning a 10 million electric two-wheeler factory. Aiyar criticizes SEBI's obsolete IPO rules requiring three years of profits, which exclude high-potential unicorns like Amazon or Facebook, while praising globalization and SPACs (raising $83 billion in 2020) for bypassing red tape. Most unicorns are foreign-owned with minimal Indian promoter stakes; he urges Finance Minister Nirmala Sitharaman to allow differential voting rights like Zuckerberg's to retain founder control, fostering classical-liberal entrepreneurship over regulatory hurdles.

**Key points:**

- India hosts 100 unicorns per Credit Suisse, challenging dominance by old conglomerates with new global-backed ventures.
- SEBI's profit-based IPO rules block listing of high-potential unicorns, but globalization enables funding via venture capital and SPACs.
- Two-thirds of unicorns started after 2005, fueling 80,000 startups across diverse sectors like SaaS, biotech, and logistics.
- India should adopt differential voting rights to let promoters retain control while raising foreign capital.

**By Swaminathan SA Aiyer**

* * *

Many believe constant claims by Opposition parties and leftist journals that our economy is dominated by two-Modi-friendly conglomerates. Rubbish. A research paper by Neelkanth Mishra of Credit Suisse reveals India has spawned 100 “unicorns”—unlisted new companies worth over a billion dollars each.

Never before has India witnessed such a broad-based upsurge of massive new businesses unconnected with old wealth, political contacts, or dirty deals with public sector banks. The unicorns have raised billions of dollars from global investors keen to invest not in venerable names but newcomers with ideas capable of dominating the 21st century. The investors know that many unicorns will fail, but enough will succeed to make their investment profitable.

In the bargain, they are giving opportunities unknown in history to entrepreneurs earlier shut out of big business for want of capital, contacts, and bribing capacity. This does not mean the newcomers are Yudhisthirs who have never sinned. But it does mean old businesses are being challenged by a veritable explosion of new entrepreneurs backed by global billions. Earlier, challengers started small and grew slowly. Today they can explode from nothing to a billion dollars in a few years, threatening all existing giants.

Earlier, financial experts estimated that India had 30-50 unicorns. Credit Suisse used a slightly different definition, including firms valued at at least $1 billion in a recent round of funding; companies where, at the average multiple of similar firms, operating profits of newcomers would justify a billion-dollar valuation; and companies where business momentum had risen so strongly since the last round of funding that a fresh round would have a valuation of one billion-plus. Credit Suisse excluded subsidiaries of existing companies and firms that once rode high but had subsequently slipped in momentum. This gives it credibility.

Some unicorns are famous. The Serum Institute of India is the world’s biggest producer of vaccines. Flipkart sold its e-commerce business for $16 billion to Walmart. But few readers know other names like Wonder Cement, GRT Jewellers, Greenko, Digit, or Chargebee. Ask Credit Suisse for the full list.

Two-thirds of these unlisted unicorns started after 2005. They are very diverse, covering not just IT and e-commerce but more humdrum areas. The fastest growth is of Software-as-a-Service, including gaming, new-age distribution and logistics, modern trade, biotech, pharmaceuticals, and consumer goods. Unicorns are just the tip of a fast-growing pyramid of 80,000 start-ups, one-tenth of new companies formed every year.

Their ambitions are stunning. Ola Cabs, famous for transport, also plans the world’s biggest electric two-wheeler factory of 10 million vehicles. The dream may fail, but what a dream!

SEBI, India’s stock market regulator, is pathetically obsolete in rules and outlook. An Initial Public Offering enables companies to list shares on stock exchanges. For this, SEBI has dozens of onerous conditions, including profits in three of five preceding years. But giants like Amazon and Facebook made no profits for years, even as their value soared because of their potential. Many Indian unicorns too have never made a profit and would not qualify for a stock market listing under SEBI rules.

SEBI focuses on saving Indian household investors from crooks, not on nurturing unicorns. Had India been dependent only on local money and SEBI, it would not have 100 unicorns with hundreds more raring to go. Luckily globalization has enabled unicorns to sidestep local rules and red tape. Brand new companies with great ideas but no profit record are viewed by global investors as potential giants rather than potential crooks (as SEBI does).

This is not a bubble about to burst. The world has created massive new pools of private capital in recent decades from venture capitalists and private equity funds. It is now witnessing the explosion of a new species — SPACS, or Special Purpose Acquisition Companies. These raise billions from private investors (including the most illustrious financial names) with no specified investment targets or strategies, which is why some call them “blank-cheque” companies. They are free to search the world for good investment opportunities. In 2020, 248 SPACs in the US raised $83 billion, and in January 2021 alone, they raised $26 billion. SPACs can finance promising newcomers without the onerous, expensive route of an IPO to get listed on stock exchanges. Once, a stock market listing was essential for reputation and large-scale financing. Not anymore.

Most unicorns are owned overwhelmingly by foreigners. Indian promoters typically have only a small shareholding. In the US, Facebook CEO Mark Zuckerberg issued shares to others with reduced or zero voting rights, enabling him to raise billions without losing control over his company. India needs to go the same way. Nirmala Sitharaman, please pay attention.

*This article was originally published in [The Times of India](https://timesofindia.indiatimes.com/blogs/Swaminomics/how-100-unicorns-are-propelling-india-forward/) on March 14, 2021.*

*Read more: [From solid fuel to LPG: The way forward for Pradhanmantri Ujjawala Yojana](https://spontaneousorder.in/from-solid-fuel-to-lpg-the-way-forward-for-pradhanmantri-ujjawala-yojana/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## From solid fuel to LPG: The way forward for Pradhanmantri Ujjawala Yojana

Original: https://www.spontaneousorder.in/p/from-solid-fuel-to-lpg-the-way-forward-for-pradhanmantri-ujjawala-yojana

Author: Spontaneous Order

Published: 2021-03-12T13:04:16.000Z

Topics: cooking-fuel-subsidies, energy-access, public-choice, rural-health

> India is a fast-growing economy and with rapid economic growth, its energy consumption is expected to increase in the next decade. Primary energy consumption has nearly tripled since liberalization, reaching an estimated 916 million tons of oil equivale..

**Summary:**

India's primary energy consumption has tripled since liberalization to 916 million tons of oil equivalent, yet 660 million people, especially in rural areas, have not fully switched to clean cooking fuels despite Pradhan Mantri Ujjwala Yojana (PMUY) providing over 80 million LPG connections to poor households since 2016. Low utilization persists due to high refill costs (Rs 800-1000 per 14.2 kg cylinder against rural per capita expenditure of Rs 1287), cultural preferences (92% prefer chulha taste, 86% deem it healthier), male financial decision-making sidelining women's health concerns from smoke, behavioral resistance, and seasonal cash crunches. COVID halved LPG subsidies to Rs 124.8 billion for FY2022, spiking prices and reverting users to solid fuels. From a classical-liberal lens invoking public choice theory—'people respond to incentives'—the author advocates targeted incentives over blanket subsidies: summer vouchers, cash transfers to ASHA workers, extra rural employment days or reduced health premiums for refill users, performance incentives for distributors, and annual direct transfers to women. Subsidies should be time-bound to curb fiscal costs, with NGOs aiding health messaging to tackle gender inequality and indoor pollution. Sustained transition to LPG is vital for India's economic ascent.

**Key points:**

- PMUY delivered 80 million LPG connections but utilization lags due to refill costs exceeding rural affordability and cultural attachment to chulhas.
- Rural LPG refills drop in summer from cash shortages, exacerbated by halved subsidies post-COVID.
- Incentivize sustained use via summer vouchers, ASHA worker payments, employment bonuses, and distributor rewards per public choice principles.
- Limit subsidies to a fixed period, use direct cash to women refilling cylinders, and leverage NGOs for health campaigns addressing gender dynamics.

**By Prabhash Sinha**

* * *

India is a fast-growing economy and with rapid economic growth, its energy consumption is expected to increase in the next decade. Primary energy consumption has nearly [tripled](https://www.eia.gov/international/analysis/country/IND) since liberalization, reaching an estimated 916 million tons of oil equivalent. Despite the recent success in the expansion of LPG usage(*under Pradhanmantri Ujjawala yojana*) in rural areas [660 million](https://webstore.iea.org/download/direct/4287) Indians have not fully switched to clean cooking fuels or technologies. 

The *[Pradhanmantri Ujjawala Yojana](http://petroleum.nic.in/sites/default/files/pmuy.pdf)* was set up in the year 2016 with the aim of providing clean cooking gas fuel to low-income families in rural areas. More than [80 million poor households](https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1653977) have availed of the scheme since its inception. The gas connections, however, have not been fully utilized and many of the Ujjawala beneficiaries continue to use biomass and solid fuels, impacting their own health and that of the village. It thus becomes essential to understand and address what the problems are: is it the cost, a social issue, or simply behavioral change?

The social and cultural aspect has been reflected in the expenditure behavior in rural areas. Even though women suffer the most from the hazardous pollutants, their voices remain unheard. Meanwhile, men, unaware of the lethal damage caused by smoke, are the financial decision-makers in the family. Although the scheme provides cooking stoves, cylinders, and the subsidy amount to the women in the family, the final decision on how to spend the money rests with the men. This shows that even though the intention and inputs were good, the outcomes of the policy were not favorable.

Many surveys have been conducted to study the behavioral shift among people after they have used LPG cylinders provided under PMUY. According to a [survey](https://ccapc.org.in/policy-briefs/2019/8/4/ujjwala-2-series-gupta-vyas), 92% of the respondents said that the food cooked on traditional ‘*chulhas’* tastes better than food cooked on gas. 86% of the respondents agreed that food cooked on *‘chulhas’* is healthier and 22% of the respondents said that cooking food on *‘chullas’* is better for the health of the cook. Difficulty in accepting new ways of cooking and new technology also affects the transition. After all, it takes time to change old practices.

One of the most important factors is the cost involved. The PMUY provides poor women with a one-time subsidy and a loan to cover the initial cost of stoves, pipes, and burners. The non-subsidized price of a 14.2 kg cylinder hovers around Rs 800 to Rs 1000. The average per capita expenditure in rural India is [Rs 1287.17](https://www.business-standard.com/article/current-affairs/committee-to-review-nsso-survey-questionnaire-114010200644_1.html).  Under the PMUY scheme, the beneficiary needs to pay a full non-subsidized amount upfront and receive the subsidy in their bank account after a while.  Households are therefore reluctant to avail refills, as they cannot afford non-subsidized cylinders or even subsidized ones in many cases. Various [surveys](https://open.library.ubc.ca/cIRcle/collections/ubctheses/24/items/1.0380887) have found that LPG consumers in rural areas are sensitive to price and seasonality i.e. LPG refill rates are lower in summer due to cash crunch as agriculture activity is limited.

The repercussion of the COVID pandemic has also been reflected in the recent budget in which provision for the LPG cooking fuel subsidies was [halved](https://www.bloombergquint.com/business/deadly-smoke-set-to-return-as-india-cuts-outlays-on-fuel-program) for the fiscal year ending in March 2022 to 124.8 billion rupees from 255 billion rupees a year earlier. Due to this step the prices of LPG have surged making it more difficult for the PMUY beneficiaries to cope up with the rising prices and forcing them to use unclean solid fuels.

Some of the problems mentioned above can be addressed through incentives, as the basic principle of public choice theory suggests that “people are people” and people respond to incentives.

LPG usage dips in summer due to cash crunch, and thus, the use of summer vouchers can help to ensure continued usage. Additionally, direct cash transfers can be given to ASHA workers who can act as an important channel to disseminate the benefits of LPG access and usage. Another way to incentivize LPG take-up is by offering additional days in the rural employment guarantee schemes and by reducing health insurance premiums for those who avail the Ujjawala Yojana. Annual incentives in the form of direct cash transfer to women’s bank accounts that avail refills can also be fruitful. Rural distributors can be given performance-based incentives that will encourage them to provide good quality service to consumers.

LPG subsidies have a high fiscal cost, which will only increase with the increase in consumers. Therefore, a specific time period should be assigned to avail the subsidy and it should not be lifelong. Secondly, the policy must address the issue of gender inequality and public health through better messaging and campaigns. NGOs can play an important role in publicizing the health risks associated with indoor air pollution.

If India aims at becoming the economic giant, then it is important to transition millions of households that use solid fuel to better energy access.

*Read more: [The relevance of a century-old Indian report on protectionism](https://spontaneousorder.in/the-relevance-of-a-century-old-indian-report-on-protectionism/)*

* * *

**About Prabhash Sinha**

Prabhash Kumar Sinha is a final year petroleum engineering student from the University of Petroleum and Energy Studies, Dehradun. He is an energy enthusiast, aspiring to become a policymaker.

## Spontaneous Dialogue Ep 5 & 6: One million teacher vacancies that should never be filled

Original: https://www.spontaneousorder.in/p/spontaneous-dialogue-episode-5-one-million-teacher-vacancies-that-should-never-be-filled

Author: Spontaneous Order

Published: 2021-03-11T16:32:00.000Z

Topics: education, teacher-vacancies, indian-schools

> In this episode of Spontaneous Dialogue, Prashant Narang, Associate Director, CCS speaks to Professor Geeta Gandhi Kingdon, Chair of ‘Education Economics and International Development at University College London about the state of teachers and teacher

**Summary:**

This promotional post announces Spontaneous Dialogue podcast episodes 5 and 6, where Prashant Narang interviews Professor Geeta Gandhi Kingdon on teacher vacancies in Indian schools. The title provocatively claims 'one million teacher vacancies that should never be filled,' suggesting a classical-liberal critique of government hiring practices. No substantive arguments, facts, or revelations from the discussion are detailed in the post itself, which instead provides listening links and partnership mentions. The content is fragmentary, serving primarily as a teaser for the audio episodes.

**Key points:**

- Podcast episodes explore why one million teacher vacancies in Indian schools should not be filled, from a classical-liberal viewpoint.

**By Spontaneous Order**

* * *

In this episode of Spontaneous Dialogue, Prashant Narang, Associate Director, CCS speaks to Professor Geeta Gandhi Kingdon, Chair of ‘Education Economics and International Development at University College London about the state of teachers and teacher vacancies in schools in India. They uncover some shocking revelations in this two-part episode, brought to you in partnership with the Friedrich Naumann Foundation for Freedom.

Listen to part 1:

Listen to part 2:

To listen to all other episodes of the Spontaneous Dialogue Podcast on your favourite platforms, click [here](https://anchor.fm/spontaneousdialogue).

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## The relevance of a century-old Indian report on protectionism

Original: https://www.spontaneousorder.in/p/the-relevance-of-a-century-old-indian-report-on-protectionism

Author: Spontaneous Order

Published: 2021-03-10T15:47:32.000Z

Topics: protectionism, indian-economic-history, industrial-policy, tariffs

> There is protectionism in the air. This year marks the centenary of a committee that recommended the first tariff hikes to protect Indian industry, but at a time when India was an impoverished colony rather than an independent nation with the fifth larg..

**Summary:**

A century ago, the Indian Fiscal Commission, chaired by Ibrahim Rahimtoolah with John Maynard Keynes as vice-president, recommended selective tariff protection for Indian industries meeting three criteria: natural advantages, inability to develop without protection, and eventual readiness for global competition. Key principles included minimizing consumer burdens via higher prices, duty-free imports of raw materials and capital goods, light taxes on intermediate goods, no export taxes, and establishing a permanent Tariff Board. The report analyzed protection's effects on productivity, wages, inflation, monopolies, revenues, foreign capital, and imperial preferences, emphasizing its temporary nature due to long-term costs. Five of seven Indian members dissented, seeking stronger protection, aligning with nationalist views inspired by Germany, Russia, and Japan. Rare free trader Jadunath Sarkar criticized protection as fostering inefficiency. Though colonial circumstances have changed, the report remains relevant amid India's post-2014 tariff hikes on nearly 3,500 items and modern global supply chains dominated by intermediate goods trade. From a classical-liberal viewpoint, it offers structured lessons for weighing protectionism's advantages and disadvantages in industrial policy.

**Key points:**

- The 1922 Indian Fiscal Commission recommended protecting select industries based on natural advantages, developmental necessity, and future competitiveness.
- Protection should impose minimal consumer costs, exempt raw materials and capital goods from duties, lightly tax intermediates, ban export taxes, and involve a permanent Tariff Board.
- The report stressed temporary protection due to economic costs and examined impacts on productivity, wages, inflation, and more.
- India has raised import tariffs on nearly 3,500 items since 2014, making the report's balanced analysis timely for current protectionist policies.

**By Niranjan Rajadhyaksha**

* * *

There is protectionism in the air. This year marks the centenary of a committee that recommended the first tariff hikes to protect Indian industry, but at a time when India was an impoverished colony rather than an independent nation with the fifth largest economy in the world. It is a good cue for this column to embark on one of its periodic excursions into economic history.

The Indian Fiscal Commission began its work in November 1921 and submitted its report the following year. Its chairman was Ibrahim Rahimtoolah, while John Maynard Keynes was vice-president. Keynes could not come over to India to make any meaningful contribution. There were seven Indians and five Englishmen in the commission. Rahimtoolah, in the company of others such as Gopal Krishna Gokhale and Madan Mohan Malaviya, had fought a hard battle over the previous decade to get the colonial government to support Indian industrialization as well as fiscal autonomy.

There were two major reasons why the British gave in to their demands. First, they were trying to neutralize the growing opposition to their rule by accepting the nationalist argument that industrialization led by the state was needed for India to break out of the colonial division of labor. Second, there was a dollop of self-interest as well, as the recent world war had shown how the most important colony in the British Empire did not have the strategic depth to deal with economic disruptions.

The report of the Indian Fiscal Commission is still worth reading. It called for the protection of select industries based on three criteria. First, India should have natural advantages in the industry that was to be protected. Second, that industry would not develop rapidly enough or even not at all without such protection. Third, it should eventually be ready to face global competition once protection was removed.

There were some other principles as well. Protection should not impose a heavy burden on domestic consumers through higher prices. Raw materials and capital goods should be imported free of any protective duties. Semi-manufactured goods used in the Indian industry—or intermediate goods in modern parlance—should be taxed as lightly as possible. There should be no tax on exports. Most importantly, a permanent Tariff Board should be set up to advise the legislature on the claims of various industries for protection.

The Commission looked at the issue of import tariffs from two angles—protecting infant industries and diversifying the Indian industrial structure. However, despite its overall support for protection, the Commission also took a detailed look at related issues such as its impact on productivity, wages, inflation, monopoly profits, government revenues, foreign capital, and imperial preferences (like free trade agreements within the British Empire). Protection was to be temporary since it would impose economic costs over the long term.

Five of the seven Indian members added a long dissent note to the main report, arguing that its arguments for protection are too tentative. The overall recommendations were very much in tune with the mainstream nationalist view that countries such as India which were late in the industrialization process would need some government intervention to provide an initial push. The examples of countries such as Germany, Russia, and Japan were studied by Indian nationalists.

The Indian mainstream had few free traders at that time. One of the rare exceptions was the historian Jadunath Sarkar. In History Men: Jadunath Sarkar, G. S. Sardesai, and Raghubir Sinh, a fine book on three brilliant historians, T.C.A. Raghavan write how Sarkar held a contrarian position. “Protection would be a premium on inefficiency and would foster a fatal indolence,” wrote Sarkar in his 1911 book on the economics of British India. He was critical of the swadeshi movement as well.

The Indian Fiscal Commission was one of the three milestones in Indian industrial policy at that time. In 1918, the Indian Industrial Commission had a report on how to accelerate industrialization. In 1927, the Royal Commission on Indian Currency and Finance submitted its recommendations on the rupee’s exchange rate as well as the need to set up a central bank in India. I have written about both these reports on these pages, especially the powerful dissent note by Malaviya in the former and B.R. Ambedkar’s masterly submissions in the latter.

The circumstances that led to the formation of the Indian Fiscal Commission are no longer relevant today. However, the report is still valuable, not just as a source of Indian economic history, but also of how to think about the advantages and disadvantages of protection, identify industries to be supported, assess broader economic consequences, and consider differential treatment for raw materials, capital goods, intermediate goods, and consumer goods. The structure of global production is also very different now, with trade-in intermediate goods dominating trade in consumer goods, thanks to an intricate web of global supply chains.

These are lessons worth remembering at a time when the Indian government has increased import tariffs on nearly 3,500 items since 2014 in a clear push towards protectionism.

*This article was originally published in the [LiveMint](https://www.livemint.com/opinion/columns/the-relevance-of-a-century-old-indian-report-on-protectionism-11614094311933.html) on 23 February 2021.*

*Read more: [Women in STEM: An Indian Perspective](https://spontaneousorder.in/women-in-stem-an-indian-perspective/)*

* * *

**About Niranjan Rajadhyaksha**

Niranjan Rajadhyaksha is Research Director and Senior Fellow at IDFC Institute. He provides direction to the Institute's research programmes. His research interests include macroeconomics, political economy and economic history.

## Policy For Women

Original: https://www.spontaneousorder.in/p/policy-for-women

Author: Spontaneous Order

Published: 2021-03-08T17:59:03.000Z

Topics: gender-policy, women-empowerment, maternal-health, public-policy

> On International Women’s Day 2021, CCS brings to you a compilation of our latest work focussing on #PolicyForWomen. Through these articles and videos, we aimed to highlight various gender issues plaguing India’s public policy. From understanding the p

**Summary:**

On International Women’s Day 2021, the Centre for Civil Society (CCS) compiles recent articles and videos under #PolicyForWomen, spotlighting gender issues in Indian public policy through a classical-liberal lens that critiques state interventions and favors market-friendly solutions like direct cash transfers and local empowerment. Key themes include low female participation in STEM requiring foundational reforms; gender data gaps rendering policies gender-blind; grassroots efforts like Ekal Mahila Sanghatana empowering village women in Maharashtra; potential of work-from-home to boost female employment post-Covid; insufficiency of laws alone against gender-based violence, as shown in a Delhi case study; disproportionate long-term Covid impacts on women; progress in reducing maternal mortality via two decades of safe motherhood programs; surge in domestic violence as a 'pandemic within a pandemic' during lockdowns; and successes of direct cash transfers in enhancing maternal healthcare access for the poor. Videos feature bamboo entrepreneur Rekha Dey, Sharad Joshi’s advocacy for women’s property rights, women farmers’ plight, and arguments for cash transfers in maternal health. This work amplifies classical-liberal critiques of paternalistic policies while showcasing entrepreneurial and decentralized paths to women’s advancement.

**Key points:**

- Gender data gaps in India lead to policies that overlook women and girls.
- Direct cash transfers have improved maternal healthcare access, especially for the poor.
- Laws alone fail to address gender-based violence, as evidenced by Delhi case studies.
- Work-from-home post-Covid could boost female employment rates.
- Grassroots initiatives like Ekal Mahila Sanghatana empower women at the village level in Maharashtra.

**By Spontaneous Order**

* * *

On International Women’s Day 2021, CCS brings to you a compilation of our latest work focussing on **#PolicyForWomen**. Through these articles and videos, we aimed to highlight various gender issues plaguing India’s public policy. From understanding the pandemic’s effects on women to amplifying the voice of female entrepreneurs, over the last one year, we delved into a range of women’s issues and the policies that attempt to tackle them. 

### Some articles from our board members, alumni, and team members:

1.  **[Women in STEM: An Indian Perspective](https://spontaneousorder.in/women-in-stem-an-indian-perspective/)**
    

This article talks about the foundation for ensuring the large participation of women in the field of STEM in India and how there is a lot of work to be done still.

2.  **[Where are the women](https://spontaneousorder.in/where-are-the-women-understanding-the-interlinks-of-gender-data-gap-and-policy/)?**
    

This article talks about the gender data gap created by the lack of data on women and girls that often makes gender-specific policies turn gender-blind. 

3.  **[Women power at the village level](https://spontaneousorder.in/women-power-at-the-village-level/)**
    

This article talks about the Ekal Mahila Sanghatana, a single women’s party that’s leading women empowerment in a village in Maharashtra. 

4.  **[Will work-from-home give a boost to female employment](https://spontaneousorder.in/will-work-from-home-give-a-boost-to-female-employment/)?**
    

This article talks about the work from home culture that the Covid-19 pandemic has put in place and how it can benefit female employment rates in India.

5.  **[Laws alone are insufficient to tackle gender-based violence](https://spontaneousorder.in/laws-alone-are-insufficient-to-tackle-gender-based-violence/)**
    

In this case study from Delhi, we see how laws alone are insufficient to tackle gender-based violence. 

6.  **[Women won’t recover easily from India’s pandemic](https://spontaneousorder.in/women-wont-recover-easily-from-indias-pandemic/)**
    

In this article, we explore the possibility of women bearing the brunt of the Covid-19 crisis, the consequences of which could be long-lasting. 

7.  **[Maternal Mortality Ratio in India: How far have we come](https://spontaneousorder.in/maternal-mortality-ratio-in-india-how-far-have-we-come/)?**
    

This article explores how far India has come in its efforts to tackle maternal mortality with more than two decades of committed safe motherhood programs. 

8.  **[Domestic violence: A pandemic in itself](https://spontaneousorder.in/domestic-violence-a-pandemic-in-itself/)?** 
    

In this article, we take a look at how domestic violence during the lockdown in India is a pandemic within a pandemic.

9.  **[How India saved its mothers with direct cash transfers](https://spontaneousorder.in/how-india-saved-its-mothers-with-direct-cash-transfers/)**
    

This article looks into how a direct cash transfer scheme has made maternal healthcare more accessible, especially for those who need it the most.

### Here are some of our videos on #PolicyForWomen:

1.  **[Bamboo Entrepreneur](https://youtu.be/k7_cG3O0dzI)**
    

This video showcases the impact of CCS’s ‘Bamboo is not a Tree’ campaign on the life of Rekha Dey, a bamboo entrepreneur. 

2.  **[Sharad Joshi on women’s & farmer’s rights](https://youtu.be/EZiIUdsLSb8)**
    

In this monologue, activist Shailaja Laxmikant Deshpande talks about Sharad Joshi’s contribution to advancing women’s property rights. 

3.  **[A female farmer describing women’s plight in agriculture](https://youtu.be/rpry_aZWuWk)**
    

In this video, Ms. Pradnya Bapat of Yavatmal district of Maharashtra describes the problems faced by women farmers in India. 

4.  **[SO Basically – Episode 16 | “Swasthya, Paisa, and Direct Cash Transfer”](https://youtu.be/1l23HzIQjP0)**
    

This video makes a case for Direct Cash Transfers to improve access to quality healthcare for all Indians, with a focus on maternal health. Health and Nutrition, (Including Angwanwadi)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Women in STEM: An Indian Perspective

Original: https://www.spontaneousorder.in/p/women-in-stem-an-indian-perspective

Author: Spontaneous Order

Published: 2021-03-08T14:47:15.000Z

Topics: women-in-stem, education-reform, gender-parity, higher-education

> The prestige associated with studying the sciences in Indian society has become a recurring theme in the criticism of the Indian education system. While the humanities have consistently produced well-known bureaucrats and policymakers, the sciences hold..

**Summary:**

India leads globally in female STEM undergraduate enrollment, with women comprising over 43% of total enrollments per AISHE 2018-19 data, yet progression stalls dramatically: only 3% pursue PhDs in sciences and 14% occupy research institution roles. This under-representation heightens job loss risks from AI and automation, mirroring low US figures like 1 in 20 women as academic deans. High mid-career dropouts stem from societal pressures like marriage and pregnancy in conservative India. From a classical-liberal viewpoint, solutions prioritize financial independence via university emphasis, scholarships, government skill programs for girls, and private sector leadership—e.g., IBM, PepsiCo elevating women to boards and panels with recruitment gender ratios. Current 10+2+4 model intervenes too late; NEP's 5+3+3+4 enables early interest identification in middle/high school. Academia must enforce gender parity in recruitment, tenure, and pay, with government funding incentives. Shared responsibility across government, institutions, and society is essential to retain talent in STEM's exponential growth.

**Key points:**

- Women make up 43% of STEM undergrad enrollments but only 3% of science PhDs and 14% of research workforce positions.
- Instill financial independence in universities and provide scholarships, skill programs, and private sector recruitment quotas to retain female graduates.
- Shift to NEP's 5+3+3+4 model to identify and nurture girls' STEM interests from middle school.
- Incentivize universities with funding for gender-balanced hiring, no pay gaps, and equal tenure opportunities.

**By Arjun Gargeyas**

* * *

The prestige associated with studying the sciences in Indian society has become a recurring theme in the criticism of the Indian education system. While the humanities have consistently produced well-known bureaucrats and policymakers, the sciences hold a special place in the Indian household. This has its own pros and cons, which can be extensively debated, but one of the more encouraging signs is the enrollment of more girls into scientific programs at the university level.

While the quality of scientific education in Indian universities, in terms of infrastructure and research capabilities, has a long way to go before it reaches the standards provided in developed countries the fact that female students occupy a much [larger percentage in securing admissions into STEM (Science, Technology, Engineering, and Mathematics) undergraduate courses](https://www.businessinsider.in/careers/news/india-tops-the-world-in-producing-female-graduates-in-stem-but-ranks-19th-in-employing-them/articleshow/74117413.cms) in India, is a much-appreciated statistic. However, the silver lining ends there as the number of female students going on to have successful careers in the hard sciences is a very sorry figure.

Data from [All-India Survey on Higher Education (AISHE) Report 2018-19](https://www.education.gov.in/sites/upload_files/mhrd/files/statistics-new/AISHE%20Final%20Report%202018-19.pdf) shows that women account for over 43% of the total enrollments for STEM undergraduate courses in the country. But this number decreases for higher qualifications, with a mere 3% enrolling for Ph.D. in the sciences. Additionally, women occupy a measly [14% of the workforce in scientific research institutions](https://www.orfonline.org/expert-speak/stem-and-the-digital-economy-for-women/) across the country. The under-representation of women in the scientific community has put them at the risk of loss of jobs with the advancement of Artificial Intelligence (AI) and automation in the industry. Data from the US shows that [just 1 in 20 women are made deans and department heads of scientific departments](https://files.eric.ed.gov/fulltext/EJ944199.pdf) in academia which would suggest that the number in India is comparable or worse off. This would further discourage future generations of women from taking up the sciences as their primary subject of study.

How do we ensure that the female students coming out of college as STEM graduates choose the same as their career choice? A need for effective policies to encourage girls to actively pursue careers in the sciences is of primary importance.

Indian women have a high rate of mid-career dropouts due to societal obligations such as marriage and pregnancy. India is still a conservative society and it is necessary for Indian universities to instill the importance of financial independence in all students, especially girls. Encouraging girls to pursue their academic dreams by providing incentives in the form of scholarships and career growth opportunities is a good first step in that direction. The government actively promoting technical skill development programs for young girls can help bring them into the scientific community. The private sector has already taken the lead in establishing a minimum fixed gender ratio during the recruitment of engineers and scientists. These policies would help young graduates kick-start their careers and ensure they remain in the workforce. In terms of career growth, private companies such as IBM, PepsiCo, and General Motors have elevated women to significant leadership positions along with providing necessary professional development opportunities for women, thus giving them more reasons to stay in the workforce. Private companies are now helping women establish their credentials by providing them opportunities to speak at panels and sit on different boards, which ensures their longevity in the field.

The policies currently in place, such as the 10+2+4 educational model, target girls at the university level to encourage them towards the sciences but unfortunately, it is too late. An educational framework must be designed to target girls in middle and high school setting them on a path to pursue a career in the sciences. The proposed NEP design of  5+3+3+4 will help to optimize learnings based on students’ interests and abilities helping identify girls interested in the sciences at a younger age. The process of piquing young minds’ interests at a young age can help them make better career choices and will result in more female researchers in institutes.

Lastly, it is imperative to ensure gender parity and equal opportunities for women to continue their careers in the scientific field. Beginning from university recruitment to providing tenure for senior professors, the scientific community in India should wholeheartedly accept women who are technically fit for the role offered. The universities can be incentivized with increased funding by the government for ensuring that no gender pay gap exists between professors and ensuring gender balance in recruitment and intake. It should be the job of the research institutes and universities in the country to provide a better platform for women to advance their careers in the sciences.

With exponential scientific advancements in the 21st century, the field of STEM is the future. While India has laid the foundation for ensuring the large participation of women in the field of STEM, there is a lot of work to be done to keep the talented ones in the field. This must not only be the responsibility of the government, but also of academic institutions, and society as a whole.

*Read More: [Is Individual Liberty the price to pay for National Security in India?](https://spontaneousorder.in/is-individual-liberty-the-price-to-pay-for-national-security-in-india/)*

* * *

**About Arjun Gargeyas**

Arjun Gargeyas is currently a 23-year-old engineer working as a Consulting Engineer for Cisco Systems. An Electronics and Communication graduate, he is a bibliophile with a soft spot for History, Economics, and World Affairs books. Being a trekker and mountaineer, he aims to combine his scientific background with his love for the social sciences to become an Energy and Environmental Policy Analyst.

## SO Basically Episode 18: जंगलों के रखवाले (Keepers of Forests)

Original: https://www.spontaneousorder.in/p/so-basically-episode-18-keepers-of-forests

Author: Spontaneous Order

Published: 2021-03-05T16:38:00.000Z

Topics: forest-conservation, community-forests, state-responsibility

> Forest communities are often looked at as forest depleters, encroachers, making a living off of forest resources and inevitably causing the demise of our green cover. It’s commonly believed that forest conservation is the State’s responsibility. In th

**Summary:**

This short promotional post for Episode 18 of the SO Basically podcast, titled 'जंगलों के रखवाले (Keepers of Forests)', challenges the common view that forest-dwelling communities deplete forests and encroach on them, portraying them instead as effective conservators. It rejects the notion that forest conservation is solely the state's responsibility, aligning with Spontaneous Order's classical-liberal perspective that critiques state-centric approaches and pseudo-socialism in Indian policy.

**Key points:**

- Forest communities are stereotyped as depleters but can effectively conserve forests.
- Conservation is not exclusively the state's duty.
- The episode questions prevailing notions about forest dwellers' role.

**By Spontaneous Order**

* * *

Forest communities are often looked at as forest depleters, encroachers, making a living off of forest resources and inevitably causing the demise of our green cover. It’s commonly believed that forest conservation is the State’s responsibility.

In this episode of SO basically, we question all these notions and talk about how forest-dwelling communities can conserve our forests effectively.

Watch now:

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Is Individual Liberty the price to pay for National Security in India?

Original: https://www.spontaneousorder.in/p/is-individual-liberty-the-price-to-pay-for-national-security-in-india

Author: Spontaneous Order

Published: 2021-03-05T16:13:07.000Z

Topics: preventive-detention, article-22, national-security, individual-liberty

> “[T]he principle that no one shall be deprived of his life and liberty without the authority of law was not the gift of the Constitution. It was a necessary [corollary] of the concept relating to the sanctity of life and liberty; it existed and was in f

**Summary:**

The post argues from a classical-liberal perspective that India's constitutional framework for preventive detention, enshrined in Article 22, sacrifices individual liberty for nebulous national security and public order concerns, enabling arbitrary state power without due process. It traces this to British colonial laws and Constituent Assembly debates, where Dr. B.R. Ambedkar proposed safeguards, but 'due process' was rejected in favor of 'procedure established by law' to preserve detention powers, as noted by Alladi Krishnaswami Ayyar. The Constitution empowers Union and states via Schedule 7 to enact laws like UAPA (1967), MISA (1971), NSA (1980), and POTA (2002). Article 22(3)-(7) offers minimal procedural safeguards—such as Advisory Board review after three months—which are routinely bypassed, denying rights like grounds of detention. Misuse is evident in 5,558 preventive detentions in Uttar Pradesh during 2019 CAA protests. Despite Maneka Gandhi (1978) mandating fair procedures, habeas corpus is ineffective, with a study showing only 20 successful Supreme Court grants from 2000-2019. The author concludes preventive detention inverts 'innocent until proven guilty,' violates natural justice, and must be abolished, as liberty once lost is lost forever, echoing John Adams.

**Key points:**

- Preventive detention lacks definitions of 'national security' or 'public order,' allowing detention without proven crime or trial.
- Article 22 permits detention beyond three months without Advisory Board approval in specified cases, negating core safeguards.
- Over 5,558 individuals were preventively detained in Uttar Pradesh from December 10-27, 2019, to suppress CAA protests.
- Habeas corpus has been a 'meaningless remedy,' succeeding in only 20 Supreme Court cases from 2000-2019.
- India must abolish preventive detention under Article 22 to uphold individual liberty and rule of law.

**By Md Tasnimul Hassan**

* * *

*“\[T\]he principle that no one shall be deprived of his life and liberty without the authority of law was not the gift of the Constitution. It was a necessary \[corollary\] of the concept relating to the sanctity of life and liberty; it existed and was in force before the coming into force of the Constitution.”* – H.R. Khanna, J.

National security is the Achilles’ heel of the Indian Constitution, apropos individual liberty. Even in the absence of any alleged wrongdoing, it allows prolonged detention of individuals, not as punishment for a proven transgression of a crime, but because the individual is considered a potential “threat” to national security or public order. However, neither the Constitution nor preventive detention legislation defines the very acts threatening “public order” and “national security.” Thus, the lack of any vibrant proscription precludes individuals from altering their actions to the administration’s expectations. This deficiency poses a fundamental challenge to the legality of such a concept – preventive detention. In British India, a concentrated network of enactments provided for detention and arrest without trial, thus the concept has a politically charged history in India. 

The chairman of the Drafting Committee, Dr. B.R. Ambedkar [had proposed](http://www.nja.nic.in/2cad.pdf) Article 15A \[Article 22 in the present Constitution\] as a safeguard against the arbitrary exercise of state power, while limiting the authority of the legislature and executive to not violate the right to personal liberty of individuals in matters of arrest and detention. The Constituent Assembly had voted against including a “due process” clause in the personal liberty protection under Article 21\[referred to as Article 15 in the Constituent Assembly\] perhaps because such a provision might authorize the judiciary to strike down preventive detention laws. Thus, “due process” was substituted with the phrase “except according to the procedure established by law,” which obviously generated considerable controversy within the assembly itself. For instance, Alladi Krishnaswami Ayyar said that “\[T\]he main reason why ‘due process’ has been omitted was that if that expression remained there, it will \[would\] prevent the State from having any detention laws…” 

Currently, the Constitution empowers the Union and the States to enact preventive detention laws providing for reasons connected with “Defence, Foreign Affairs, or the Security of India” (Schedule 7 – List I, Entry 9) and “security of a State, the maintenance of public order, or the maintenance of supplies and services essential to the community,” (Schedule 7 – List III, Entry 3), respectively. In view of the facts thereof, several legislations have been enacted over the period including the Unlawful Activities (Prevention) Act of 1967, Maintenance of Internal Security Act of 1971, National Security Act of 1980, Prevention of Terrorism Act of 2002. Therefore, human rights and national security are deemed to contradict each other very many times.

The first two clauses of the present Article 22 are about safeguards and the rights against detention or arrest available to all, such as the right to be informed of grounds of detention. Whereas clauses (3) to (7), best read as restrictions on fundamental freedoms, enlist the minimum procedural safeguards for preventive detention laws to be valid. Article 22(3) provides that the progressive protections accorded by clauses (1) and (2) do not extend to any person arrested or detained under any preventive detention law. Thus, the denial of protections constitutes a significant negation of the procedural rights regime, despite the Supreme Court judgment in *[Maneka Gandhi](https://indiankanoon.org/doc/1766147/)* [v](https://indiankanoon.org/doc/1766147/)*[. Union of India](https://indiankanoon.org/doc/1766147/)* (1978) recognized the “procedure” laid down in the Constitution to necessarily be just, fair and reasonable.  

Article 22(4) provides that no preventive detention law shall authorize the detention of a person for a period longer than three months without the approval of an Advisory Board. Yet, this clause is generally negated in practice, given that Parliament may by law prescribe the “class or classes of cases” in which a person could be detained for a period longer than three months without the approval of the Advisory Board (Article 22(7)(a)). It involves detention or arrest without a criminal trial, i.e., no criminal offense is proven, nor any charge is formulated for trial (Article 22(5)). Therefore, it is often misused by the State to settle scores with dissidents. For instance, in the State of Uttar Pradesh, over 5558 persons [were preventively detained](https://www.thehindu.com/news/national/anti-caa-protests-1113-arrests-5558-preventive-detentions-19-dead-in-up/article30402858.ece) (between 10 December 2019 to 27 December 2019) to curb opposition to the Citizenship (Amendment) Act, 2019. Thus, the government presumes the individual to be “guilty until proven innocent,” which potentially takes us far away from the established principles of natural justice. 

Further, the principle of judicial control over detention is analogous to the English remedy of *habeas corpus*, which enables a person arrested or detained to challenge their detention before a court of law, and be freed if wronged. However, [a recent study](http://nujslawreview.org/wp-content/uploads/2020/08/13.2-Bhardwaj-Preventive-Detention-3.pdf) showed that even based only on “successful” petitions between the year 2000 to 2019, i.e., the twenty cases where the Supreme Court granted relief to petitioners, habeas corpus is reduced to “a meaningless remedy.” Moreover, the Indian executive governance demonstrates the inadequacies of the international treaties and conventions, allowing Indian security forces to continue to violate human rights. India needs to teach its law enforcement agencies that individual rights are a *sine qua non* for the rule of law to prevail.

“A Constitution of Government,” once [wrote](https://founders.archives.gov/documents/Adams/04-01-02-0160) John Adams, the second President of the USA, “once changed from Freedom, can never be restored. Liberty, once lost, is lost forever.” Regrettably, state vendetta ends up curtaining the liberty of an individual, for days or even years. Those who are incarcerated are cut off from the world, and the inhumane conditions of Indian jail make them accept any coerced confession that promises halting torture by police. What do justice and freedom mean to someone wrongfully imprisoned for 23 years, without any actual wrongdoing? Clark Neily, Director of the Center for Judicial Engagement at the Institute for Justice, raises a concern, “\[M\]ust government has a good reason to lock people up in cages, or may it do so more or less on a whim?” 

It is unfortunate that India has saved preventive detention through Article 22 as an integral part of its Constitution, unlike the UK and the USA, and it needs to be done away with as soon as may be because limiting liberty a day is a day too many.

*The author is  a part of Students for Liberty’s first cohort of [Fellowship for Freedom](https://signrt.website/click?redirect=https%3A%2F%2Fstudentsforliberty.org%2Fsouth-asia%2Ffellowship-for-freedom%2F&dID=1614107749425&linkName=Fellowship%20for%20Freedom) in India.* 

*Read More: [Managing Water Towards Building Sustainable Cities](https://spontaneousorder.in/managing-water-towards-building-sustainable-cities/)*

* * *

**About Md Tasnimul Hassan**

Md Tasnimul Hassan is currently a third-year B.A.LL.B. (Honours) student at Jamia Millia Islamia, New Delhi. He is a part of Students for Liberty’s first cohort of Fellowship for Freedom in India. He is passionate about individual rights and criminal justice reforms. His intellectual influences include John Locke, Jeremy Bentham, J.S. Mill, Robert Nozick, and Ilya Somin.

## Managing Water Towards Building Sustainable Cities

Original: https://www.spontaneousorder.in/p/managing-water-towards-building-sustainable-cities

Author: Spontaneous Order

Published: 2021-03-03T15:41:44.000Z

Topics: urban-water-management, jal-jeevan-mission, national-water-policy, iuwm

> The Union Budget 2021 comes as a massive relief for our overburdened water resources. Where last year’s budget allocated INR 39,029 crore for water across the Ministry of Jal Shakti, Ministry of Agriculture and Farmers’ Welfare, Ministry of Rural Deve

**Summary:**

The Union Budget 2021 provides significant relief for India's water resources by expanding the Jal Jeevan Mission (JJM) with Rs 50,011 crore—4.5 times the prior revised budget—and launching JJM-Urban (JJM-U) with Rs 2,87,000 crore over five years to deliver universal water supply in 4,378 urban local bodies and 2.86 crore households, alongside liquid waste management in 500 AMRUT cities. While JJM has connected 35% of rural households to tap water, with Goa and Telangana at 100%, urban areas face acute crises: India uses 634 BCM annually, projected to reach 1,447 BCM by 2050 against 1,123 BCM usable supply; 30 cities risk imminent crisis, 600 million face high stress, and 0.2 million die yearly from unsafe water. The author praises the draft National Water Policy 2020's classical-liberal reforms—graded user fees for cost recovery, water users' associations retaining charges, state-level independent regulators for tariffs, and alternatives to dams—which counter the 'public good' critique by fostering accountability, disincentivizing waste via metered pricing (especially for industry), and treating citizens as consumers. Further decentralization to cities is urged, adopting Integrated Urban Water Management (IUWM) to holistically integrate the water cycle, empower local governments, balance stakeholders, and deploy public-private partnerships, as in Karnataka's ADB-funded program. Integrating IUWM into JJM-U and the policy will build resilient cities, averting 6% GDP loss by 2050.

**Key points:**

- Union Budget 2021 expands JJM to urban areas via JJM-U, allocating Rs 2,87,000 crore for universal supply and waste management.
- Draft National Water Policy 2020 introduces graded fees, user associations, and state regulators to ensure cost recovery and usage-based accountability.
- IUWM framework centers local governments to integrate urban water cycles, including supply, sanitation, stormwater, and reuse, with PPPs for efficiency.
- Cities must become primary units for water planning to address contamination, waste, and demand amid projected shortages to 2050.

**By Swati Rao**

* * *

The Union Budget 2021 comes as a massive relief for our overburdened water resources. Where last year’s budget allocated [INR 39,029 crore](https://www.indiawaterportal.org/articles/union-budget-2020-2021-what-came-kitty-water) for water across the Ministry of Jal Shakti, Ministry of Agriculture and Farmers’ Welfare, Ministry of Rural Development, and Ministry of Housing and Urban Affairs, an increase of 6% over the budget of 2019-20, it managed to overlook concerns of urban water management. The focus has now been expanded from rural water supply to urban water management through the Jal Jeevan Mission- Urban (JJM-U) and the Swachh Bharat Mission 2.0. 

The government’s commitment through the Har Ghar Jal program was to ensure that every rural household gets piped water by 2024. Tasked with creating water supply infrastructure for rural areas, the [Jal Jeevan Mission](https://ejalshakti.gov.in/jjmreport/JJMIndia.aspx) has been successful in providing tapwater connection to almost 35% of rural households, with the states of Goa and Telangana achieving 100% connection. 

In the current budget, JJM has been allotted an outlay of Rs 50,011 crore, about 4.5 times the revised budget for 2020-2021, along with an expansion in its scope through the [Jal Jeevan Mission-Urban](https://pib.gov.in/PressReleasePage.aspx?PRID=1694420). JJM-U aims at a universal water supply in all 4,378 urban local bodies with 2.86 crores household tap connections, as well as liquid waste management in 500 AMRUT cities. It will be implemented over the next five years with an outlay of Rs 2,87,000 crore. 

The budget has rightly recognized that health indicators are intrinsically linked to the availability of clean drinking water,  which in turn is dependent on the safe treatment of drinking water sources. As a result, the implementation of the Swachh Bharat Mission 2.0 with its focus on complete fecal sludge management and wastewater treatment will be crucial to the success of JJM. 

India uses around [634 billion cubic meters (BCM)](https://iuwm.urbanwatermanagementindia.org/integrated-urban-water-management/) per year and this usage is projected to grow to 1447 BCM by 2050. However, the usable amount of water available would be 1,123 BCM per year. Several international and national reports have highlighted the dire state of water availability in India, with the WWF Water Risk Filter report concluding that 30 Indian cities face an imminent water crisis. According to NITI Aayog, 600 million Indians face high to extreme water stress and about 0.2 million people die every year due to inadequate access to safe water. Delhi is already expected to face a [water crisis](https://www.livemint.com/news/india/delhi-to-face-water-crisis-if-govt-closes-nangal-hydel-channel-for-repair-says-raghav-chadha-11614245750874.html) in the coming summer months.

First developed in 1987, India’s National Water Policy which has since been revised in 2002 and 2012, [aims](http://jalshakti-dowr.gov.in/sites/default/files/NWP2012Eng6495132651_1.pdf) to “take cognizance of the existing situation, to propose a framework for the creation of a system of laws and institutions and for a plan of action with a unified national perspective”. The draft [National Water Policy, 2020](https://theprint.in/india/governance/user-fees-state-level-regulators-fewer-dams-what-draft-national-water-policy-proposes/591233/) was released in March 2020 bringing some key changes:

-   A graded water fee system through which operation and maintenance costs would be fully recovered
    
-   water users’ associations to collect and retain a portion of charges
    
-   Appointment of independent regulatory authorities in all states, which would have the mandate of fixing tariffs for domestic water usage
    
-   Finding cost-effective alternatives to constructing more dams
    

The fundamental right to life and personal liberty, under Art 21, has been interpreted in the [Bandhua Mukti Morcha](https://indiankanoon.org/doc/595099/) case to include the right to safe drinking water. Water is considered a “public good” because of which the draft policy has been criticized for charging citizens for access to water. States like [Maharashtra, Haryana, Bihar, and Uttar Pradesh](https://theprint.in/india/governance/user-fees-state-level-regulators-fewer-dams-what-draft-national-water-policy-proposes/591233/), which currently have fixed user charges for water, have barely been able to recover the costs incurred. A graded fee system will ensure that commercial and industrial entities consuming more water would need to pay accordingly, while the vulnerable sections could be identified and charged separately. The advantages are two-fold: when the government becomes a service provider, and the citizens become consumers, there will be increased accountability. At the same time, when consumers are charged according to their usage, they will be disincentivized from wasting water. 

Delegating authority of fixing tariffs to independent regulators within states, while a noble solution, needs to be decentralized further. As water is a State subject, each state is more or less free to deal with issues linked to supply, distribution, and storage. However, what most states have overlooked is that issues of water management are different for rural and urban areas. 

Cities have to bring in water from distant sources, struggling to meet increasing demands with limited supplies. [Quality issues](https://www.epw.in/journal/2015/30/special-articles/urban-water-systems-india.html) have also arisen, with groundwater getting contaminated with fluoride, arsenic, mercury and even uranium in some areas. Lacking in sufficient [waste management infrastructure](https://www.epw.in/journal/2015/30/special-articles/urban-water-systems-india.html), many urban stretches of rivers and lakes are overburdened by industrial waste, sewage and agricultural run-off. However, since cities are not considered a unit of planning for water management, water and its allied sectors like wastewater management and storm water drainage work in silos. 

[Integrated Urban Water Management (IUWM](https://www.sciencedirect.com/science/article/abs/pii/S0957178716301138#:~:text=%E2%80%9CIntegrated%20urban%20water%20management%20\(IUWM,services%2C%20and%20water%20management%20scales.)), a globally accepted practice, could prove to be the solution to urban India’s water woes. Based on hydrological, environmental, and socio-economic context, the IUWM framework integrates all elements of the urban water cycle, from source management, water supply, sanitation, stormwater management, sewage treatment, and its reuse to solid waste management. More importantly, it places local governments at the epicenter of reforms, tasked with the mandate of reaching a common understanding and vision of challenges and activities, understanding and balancing interests and needs of different stakeholders, strengthening cooperation, sustainability, and ownership, and inducing behavior change and realistic demand management.

With funding from the Asian Development Bank, the [Karnataka Integrated Urban Water Management Investment Program](https://www.adb.org/projects/43253-024/main#project-pds) is working to improve water resource management in urban areas by expanding urban water supply and sanitation, strengthening relevant institutions to enhance efficiency, productivity, and sustainability in water use and deploying public-private partnerships and reform-oriented incentives. Similar programs can be explored for other states too. 

This year’s budget provides relief in terms of provisions and priorities for water, indicating that there is a strong political will in the country to improve water management. In order to meet future urban water challenges, there needs to be a shift in the way we manage urban water systems. JJM-U provides a unique opportunity to integrate the IUWM mechanism into its implementation, while the draft National Water Policy 2020 could ensure the efficient use of our scarce water resources. Earmarking cities as the unit of management would only be the first step. It requires a holistic approach, managing water resources, and their waste in a new integrated way to strengthen the resilience of urban water systems infrastructure. If mitigation measures are not implemented, India faces a six percent loss in its gross domestic product by 2050. Therefore, IUWM has the potential to become a critical tool for building resilient and sustainable cities.

*Read More: [Bad Banks For a Good Economy](https://spontaneousorder.in/bad-banks-for-a-good-economy/)*

* * *

**About Swati Rao**

Swati Rao is Assistant Manager, Advocacy at Centre for Civil Society. Previously, she has worked for the US Department of State, Swaniti Initiative in India, and holds an Erasmus Mundus Masters in Public Policy and B.A. LL.B (Hons) from Hidayatullah National Law University, Raipur.

## Bad Banks For a Good Economy

Original: https://www.spontaneousorder.in/p/bad-banks-for-a-good-economy

Author: Spontaneous Order

Published: 2021-03-01T13:57:39.000Z

Topics: bad-banks, non-performing-assets, banking-reform, financial-crisis

> This article was written by Neeti Shikha, Urvashi Shahi and Rahul Prakash. The Government of India has recently announced that India is set to have its first Bad Bank. While the decision is received with great fervor by some, many have shown their worry..

**Summary:**

India's establishment of its first bad bank addresses the mounting Gross Non-Performing Assets (GNPA) crisis, totaling roughly 27 lakh crore rupees or 14% of GDP, projected to reach 13.5% of advances by September 2021 amid pandemic stress. From a classical-liberal viewpoint, this one-time measure cleans bank balance sheets, freeing public sector banks to focus on core lending and growth essential for India's potential GDP expansion, while restoring confidence among investors and rating agencies. Historical precedents like Mellon Bank's 1988 strategy and post-2008 models in the US, Ireland, and Spain underscore its crisis utility. Success hinges on structure: off-balance-sheet SPVs like ARC/AMC models (PAMC for short-term viable assets, NAMC for unviable ones), true price discovery, private capitalization without majority PSU stakes to curb moral hazard, and limited leverage. Funding challenges require attracting private investors via securities, not government equity. Authors caution against recurring use to prevent risky lending incentives, advocate stress-testing, IBC recovery or securitization, banker accountability reforms, and dissolution timelines. Execution must prioritize market dynamics over past over-regulation to foster a robust financial sector.

**Key points:**

- India's GNPA of 27 lakh crore (14% GDP) demands a bad bank to restore lending capacity and support growth.
- Bad banks should be one-time 'emergency medicine' with private participation and <51% PSU stake to avoid moral hazard.
- Adopt ARC/AMC models like PAMC or NAMC for stressed assets, emphasizing off-balance-sheet transfers and price discovery.
- Fund via private equity/debt securities, not government capital, and enable securitization for monetization.
- Set dissolution timelines and reform PSU banker incentives for bold decisions.

**By Neeti Shikha**

* * *

*This article was written by Neeti Shikha, Urvashi Shahi and Rahul Prakash.*

The Government of India has recently announced that India is set to have its first Bad Bank. While the decision is received with great fervor by some, many have shown their worry, if not discontent with the concept of Bad bank.

The bad bank concept dates back to 1988 where Mellon Bank used a bad bank strategy to separate $1.4 billion of bad loans to a subsidiary entity. The concept has made its come back with every financial crisis. In the USA, a bad bank was suggested as part of the Emergency Economic Stabilization Act of 2008 to help address the subprime mortgage crisis. The Republic of Ireland had its first bank, the National Asset Management Agency in 2009. Spain too established an entity called ‘SAREB’ to which troubled and illiquid assets were transferred. Pandemic has amplified the already existing economic stress and rekindled the debate of efficacy of bad banks for resolving the NPA conundrum. Bad banks aids in a renewed focus on long-term core operations of the good bank without getting stressed about the troubled assets. Removing troubled assets from the balance sheet infuses more optimism from credit rating agencies, investors, lenders, depositors as well as borrowers. It relieves pressure on capital, enabling the institution to engage in more profitable and growth-oriented business activities and further lending.

There is a case for the institution of bad banks in the present circumstances mainly owing to the size of Gross Non-Performing Assets (GNPA) which is equal to roughly 27 lakh crore, almost 14% of the present GDP. As NPAs rise, Banks need additional capital for provisioning which effectively curtails their lending power. In a country like India where credit growth is very much important to achieve its potential GDP growth, the inability of the Banking sector in lending will hamper its growth to a large extent. Financial Stability Report states that gross NPAs of the banking sector is expected to shoot up to 13.5% of advances by September 2021, from 7.5% in September 2020, under the baseline scenario, as “a multi-speed recovery is struggling to gain traction” amidst the pandemic. The report warned that if the macroeconomic environment worsens into a severe stress scenario, the ratio may escalate to 14.8%. To avoid this, a one-time solution of creating a bad bank to clean the balance sheet of the banks is a welcome step.

BAD BANKS: ONE TIME OR FOR ALL TIME?

Bad banks can be used as a one-time tool to “clean up” the balance sheet. However, if we use this as a recurring model, it could lead to wrong incentives for the bankers to undertake risky lending and transfer the same to bad banks. It is only an “emergency medicine” and not a “staple diet”. As per current status, bad loans of Rs. 500 crore and above will be eligible for resolution by this entity, with an estimated total corpus of Rs.25 trillion. It will be wise that banks must stress test their portfolios and take a forward-looking approach in determining risky assets.

MODELS FOR BAD BANKS

The success and efficacy of bad banks in India would depend on the choice of structure which must be made taking into consideration independence of institution and veracious price discovery.

The choice of a model depends on two decision factors. The first is to decide whether or not to keep the bad assets on the bank’s balance sheet. Moving assets off the balance sheet are better for investors and counterparties and provide more transparency into the bank’s core operations. But it is more complex and expensive. Second, whether the bad-bank assets will be housed and managed in a banking entity or a special purpose vehicle (SPV). Secondly, whether to house and manage the bad-bank assets in a banking entity or to accomplish the transfer of risk in a less concrete manner.

The government is currently mulling over adopting the ARC/AMC model for bad banks. This entity will be set up to take over the stressed assets from the books of public sector banks and try to resolve them like any other ARC. This will require a considerable regulatory overhaul and adequate capitalization.

For adopting an AMC model-based bad bank, Acharya suggested two models of a bad bank. The first is a private asset management company (PAMC), which is said to be suitable for stressed sectors where the assets are likely to have an economic value in the short run, with moderate levels of debt forgiveness. The second model is the National Asset Management Company (NAMC), which would be necessary for sectors where the problem is not just one of excess capacity but possibly also of economically unviable assets in the short to medium terms.

Further, when a bad loan is sold off to bad banks, it can either focus on recovery or consider it to repackage and monetize it through the issue of new securities. If the objective of a bad bank is to recover, it will have to adopt the IBC route and given the attitude of the committee of creditors that focuses on upfront payment or less haircut and the efficiency of courts, the recovery will be a herculean task. If the bad bank looks at a longer objective to monetize the bad debt till the recovery happens, it requires a sophisticated debt market that will allow easy sale and purchase of such securities.

FUNDING FOR BAD BANKS

Funding for the bad bank will be the biggest challenge, to begin with. The bad bank must be well capitalized. It will obtain a limited amount of capital from reserves allocated to the acquired assets. Currently, there is a lack of clarity on the funding of such banks. While the government is unwilling to inject any initial equity in such banks, the role of such banks is also unclear- whether they will just hold the asset on the balance sheet and concentrate on recovery or whether they will raise securities back by these assets. A bad bank is typically funded primarily by selling equity or debt securities. Experience from past crises shows that private investors who experienced significant losses as a result of sizable investments in financial institutions are reluctant to step forward and invest in troubled institutions. Instead, investment in discrete pools of assets may attract private investors interested in targeted and concentrated ownership with significant control over the new entity. There should be limited regulatory oversight. Whatever the case may be, it will be wise if public sector banks together do not hold more than a 51% stake in the bad bank to allow for more flexibility.

WEIGHING PARTICIPATION OF PSU BANKS

For the functioning of bad banks, the bad loans will be required to be sold below the book value. Given that most of the PSU bankers fear CVC, they are less eager to make any concession on the count of their accountability and constantly (and perhaps understandably) avoid taking decisions. This may become a hurdle for the banks. Thus, participation by the PSU banks in bad banks will need to come with greater clarity of role and responsibilities to the bankers. If the bad banks run into the private banking sphere, there will be more freedom for players to take bold and dynamic decisions.

SETTING THE PREMISE RIGHT

There could be a high possibility that the bad bank may recover less than the transfer value of the troubled asset. In such a case, the good bank should be required to make the bad bank whole. For such a solution to be implemented, new accounting guidance would be required permitting such a transfer, notwithstanding the retained interest on such transactions.

There have also been models suggested wherein existing shareholders get to participate in working of bad banks and are given interests in the new bad bank, as well as rights to subscribe for new shares of the good bank. It would be easier to attract private capital to the good bank than to the bad bank, limiting the cost to the government, a key consideration is given the scope of the current crisis.

In such a design, losses on the bad bank assets would be borne first by pre-existing shareholders, rather than by new investors. Given that any risk of loss to bad bank debt holders may reduce the ability of financial institutions to borrow in the future, it is suggested that bad banks should not be as highly leveraged.

BAD BANK FOR NEW INDIA

Banking sector in India could not grow to its full potential initially due to over protection and later due to over regulation. Time is right to undo the mistakes of the past and set the policy goal of preventing moral hazard arising from government intervention.

The current government has shown a bold front by eschewing the old protectionist approach and embracing dynamic options for developing the financial market. Whatever its final form, the creation of the Bad Bank may serve as a model and springboard from which creative private investors may partner with financial institutions interested in structures that can be tailored to individual circumstances. However, Bad Banks should not be a source or incentive for careless lending by the banks. There should be a time frame by which bad banks should be dissolved.

While the decision to have a bad bank is good in principle, its success will depend on the way it is executed. Given that execution and quality control is our Achilles heel, it will not be an easy task to ensure the success of bad banks on the ground.

*This article was originally published in [The Daily Guardian](https://thedailyguardian-com.cdn.ampproject.org/c/s/thedailyguardian.com/bad-banks-for-good-economy/amp/) on February 27, 2021.*

*Read More: [Why India Finds a Safe Harbor in Failed Policies](https://spontaneousorder.in/why-india-finds-a-safe-harbour-in-failed-policies/)*

* * *

**About Neeti Shikha**

Dr. Neeti Shikha, Head Centre for Insolvency & Bankruptcy, Indian Institute of Corporate Affairs.

## An urgent need to reform the country’s legislative processes

Original: https://www.spontaneousorder.in/p/an-urgent-need-to-reform-the-countrys-legislative-processes

Author: Spontaneous Order

Published: 2021-02-24T12:16:31.000Z

Topics: legislative-reform, anti-defection-law, parliamentary-dysfunction, agricultural-policy

> The dysfunction in Indian democracy is no longer hidden. Many, including me, believe that the Indian agricultural system needs reform and agree with the core idea of India’s farm bills, but have criticized the government for not following a transparent

**Summary:**

India's legislative processes are deeply dysfunctional, as seen in the rushed passage of farm bills without debate or committees, subverting constitutional principles despite broad agreement on needed agricultural reforms. This traces to the mid-1980s 52nd Constitutional Amendment's anti-defection law, which penalizes legislators for defying party whips—including abstentions or conscience votes—thus preventing representation of constituents and concentrating power in party leadership, exacerbating India's centralized governance. Deliberations shift to opaque party offices, slashing parliamentary attendance, committee referrals (only 25% of 16th Lok Sabha bills, vs. 71% in 15th and 60% in 14th), and debate time, though 32% of bills got over three hours (up slightly). State assemblies are worse: Haryana's 12th term averaged 11 session days/year, passing 129 bills same-day; Goa's bills averaged four minutes; Delhi's 2012 saw one of 11 bills discussed over 10 minutes; Gujarat's 12th passed 90% same-day. With no forum for consensus, protests become the sole feedback, fostering binaries unfit for nuanced policy like escaping agriculture's transitional gains trap. Classical-liberal reform demands restoring legislator independence and parliamentary deliberation.

**Key points:**

- The 52nd Constitutional Amendment's anti-defection law restricts legislators from voting conscience or representing constituents, centralizing power in party leaders.
- PRS data reveals only 25% of 16th Lok Sabha bills were referred to committees, down sharply from prior Lok Sabhas.
- State assemblies pass bills with minimal scrutiny, such as Haryana's 129 same-day passages in limited sessions and Goa's four-minute average debates.
- Protests cannot build nuanced policy consensus, leaving issues like farm reforms mired in transitional gains traps.
- Reform legislative processes to revive deliberation and escape dysfunctional democracy.

**By Shruti Rajagopalan**

* * *

The dysfunction in Indian democracy is no longer hidden. Many, including me, believe that the Indian agricultural system needs reform and agree with the core idea of India’s farm bills, but have criticized the government for not following a transparent legislative process. While it followed the basic checklist to pass those reforms quickly, it subverted constitutional principles and the parliamentary spirit. Consider the lack of attendance and the absence of debate, deliberation, or expert committees in Parliament. The legislature has become a stage for laws to be passed in minutes. And it only takes a few days from tabling bills to receiving the President’s signature. This is not unique to the 17th Lok Sabha. It was just less visible earlier.

It started in the mid-80s, with the 52nd constitutional amendment that created rules to expel legislators who defect from political parties and de-stabilize governments in exchange for money. The amendment defined defection not just as switching parties, but also disobeying a party directive on a vote. So, legislators can lose membership of the House if they abstain or vote against their party’s whip.

This amendment has three consequences. First, it damages the legislative process because it restricts legislators from voting their conscience and representing the interests of their constituents. Second, the forum where legislators express their views has changed. All deliberations and deal-making are done behind closed doors in party offices. Third, all power is concentrated in the party leadership; individual legislators are rendered powerless. In the case of a ruling party, the prime minister or chief minister and party president hold power, worsening the already centralized nature of Indian governance. If a party has a majority, even checks by coalition partners are absent.

Over the decades, this has corrupted the processes of deliberation. When decisions are made in a party’s office, legislators stop attending Parliament or legislative assembly sessions. When each party confers with its preferred experts, legislators stop demanding parliamentary or standing committees. And if bills are introduced wholesale and voted into law in mere hours, the opposition stops preparing debates. Legislative action is predetermined and staged in Parliament or an assembly.

According to PRS Legislative’s Functioning of 16th Lok Sabha (2014-2019) Report, only a quarter of the bills introduced in that period were referred to committees, much lower than 71% during the 15th and 60% during the 14th Lok Sabha. However, the 16th Lok Sabha discussed 32% of the bills for more than three hours. This is an improvement of over 22% in the 15th Lok Sabha and 14% in the 14th. In the 15th Lok Sabha, a quarter of the bills were passed in under 30 minutes, which went down to 6% in the 16th.

PRS Legislative reports on legislative assemblies are even more startling. During the 12th term of Haryana’s Assembly (2009-2014), it was in session for only 11 days per year on average, with the budget session occupying 70% of the total session time. In the remaining time, the state’s assembly passed 129 bills, all of which were passed on the same day that they were introduced. In Goa’s Assembly, on average, each bill was discussed for four minutes. In 2012, in Delhi’s Assembly, only one of the 11 bills passed was discussed for more than 10 minutes. During the 12th Gujarat Assembly (2008-12), in session for half the days as Parliament, over 90% of all bills were passed on the very day they were introduced.

One consequence of such a dysfunctional democratic process is that there is no forum left for consensus building. Constituents are left with no choice but to protest, which is an extremely important part of the democratic process and a direct line of feedback from people between elections. But protests are only good for some kinds of action, like starting an inquiry or reopening a case, or demanding repeal or ban. They have no mechanism for consensus formation or discussions on policy options. By their nature, protests foster binaries—one is either for or against protesters. Protests do not make space for the mediation of nuanced criticism or agreement.

A few months ago, in this space, I argued that farmers protesting the agricultural reforms are seeking to keep their rents and entitlements at the cost of others and that the policy is stuck in a transitional gains trap. Agriculture needs to be reformed, but that trap cannot be wished away or solved through protests. It needs deliberation, perhaps even reforms in other areas like land policy. We cannot build a consensus through protests any better than we can through a dysfunctional parliament and assemblies.

*This article was originally published in the [Live Mint](https://www.livemint.com/opinion/columns/an-urgent-need-to-reform-the-country-s-legislative-processes-11613493071341.html)* *on 16 Feb 2021*,

*Read more: [The Curious Case of Government Advertising](https://spontaneousorder.in/the-curious-case-of-government-advertising/)*

* * *

**About Shruti Rajagopalan**

Advisor, Centre for Civil Society Senior Research Fellow, Mercatus Center at George Mason University

## The Curious Case of Government Advertising

Original: https://www.spontaneousorder.in/p/the-curious-case-of-government-advertising

Author: Spontaneous Order

Published: 2021-02-22T15:55:58.000Z

Topics: government-advertising, free-fair-elections, election-finance, fiscal-prudence

> On a rare occasion when I sat in front of the TV (in the age of smartphones and OTT), something caught my attention. I witnessed a sudden barrage of advertisements on almost all regional channels, tied together by the theme ‘Vetrinadai podum thamizhagam

**Summary:**

The post examines the blurring of government advertisements (GA) and political advertisements (PA) in India, spotlighting Tamil Nadu's 'Vetrinadai Podum Thamizhagam' campaign launched December 29, 2020, coinciding with the ruling party's poll kickoff, featuring the state emblem and late CM Jayalalithaa's image despite Supreme Court restrictions. This misuse of taxpayer funds, a classical-liberal concern for fiscal prudence and electoral integrity, is evidenced by a 2018 Factly report showing central government spent ₹10,000 crore on publicity over 16 years, surging in election years. GA, meant for welfare awareness, morphs into PA promoting party ideology, fostering personality cults contrary to Ambedkar's warnings against political bhakti. Supreme Court's 2014 judgment, via N.R. Madhav Menon committee, mandated CCRGA ombudsmen at central/state levels to regulate content—limiting images to President, PM, CJI (later expanded)—but enforcement falters under DAVP control. Model Code of Conduct activates only post-election announcement, enabling pre-poll advantages. The author urges a robust framework: independent CCRGA teeth, six-month pre-poll GA ban, party expenditure caps mirroring candidate limits, and Australian/Canadian models emphasizing objectivity, efficiency, and parliamentary rationale for high-spend GA, prioritizing codification over colorable practices for level-playing-field elections.

**Key points:**

- Ruling parties exploit GA-PA ambiguity to fund electoral propaganda with public money, as seen in Tamil Nadu's VPT ads violating Supreme Court image-use rules.
- Central government spent ₹10,000 crore on publicity over 16 years per 2018 Factly report, with spikes in election years demanding expenditure rationalization.
- Empower CCRGA independently, impose six-month pre-poll GA bans, and adopt Australian/Canadian principles for objective, accountable government ads.
- Cap pre-election party expenditures akin to candidate limits and ban state symbols in PA to curb money's electoral influence.

**By T. Bhuvanesh Ram**

* * *

On a rare occasion when I sat in front of the TV (in the age of smartphones and OTT), something caught my attention. I witnessed a sudden barrage of advertisements on almost all regional channels, tied together by the theme ‘Vetrinadai podum thamizhagam’ (Tamil Nadu, marching victoriously). It wouldn’t have been noteworthy except for the fact that Tamil Nadu goes to the polls in 2021. Did I just witness an advertisement by the government that aims to create awareness regarding citizens’ rights and entitlements? Or was it one by the political party that appeals to the electorate to vote in its favor? Does this mean that the party in power has unfettered access to the treasury, where it can mask its own campaign as ‘government’s achievements’? This distinction is critical, especially in an election year. To uphold the ideal of ‘free and fair elections, and to provide a level-playing field for all the parties in the fray, it’s imperative that the ruling party doesn’t use the taxpayers’ money for its own electoral propaganda. A recent petition by the opposition party in the Madras High Court, questioning the authenticity of the said advertisements vindicates this line of inquiry.

Let us clarify the agenda of Governmental Advertisements (GA) and Political Advertisements (PA). GAs are aimed towards the electorate, to educate the citizen of the various welfare measures and to attract investors enumerating its achievements. However, PAs are aimed towards the *election,* to canvass voters based on the party’s ideology and promises. Since GAs are funded by the government and PAs are funded by the parties themselves, the increasingly blurry line between the two has troubling implications for fiscal prudence and the sanctity of elections.

The need for overseeing GA is evident for various reasons. Firstly, the expenditure behind them must be rationalized. A [2018 report by Factly](https://factly.in/the-central-government-spent-10000-crore-on-publicity-in-the-last-16-years/) indicates that apart from the increasing trend of expenditure for government publicity by DAVP (Department of Advertisements and Visual Publicity), the same skyrockets during election years, proving that GA-PA delinking is all the more essential. Secondly, more often than not, they discreetly promote party interests. For instance, the Vetrinadai Podum thamizhagam(VPT) series liberally uses the image of late former Chief Minister Jayalalithaa, despite a Supreme court judgement (discussed later) that limits the personalities whose images can be used in GA. Thirdly, the megalomaniac nature of such GA contributes to the culture of personality-cult politics. In this context, Dr.B.R. Ambedkar’s words sound ominously relevant “Unlike in worship, in Politics, Bhakti is a sure road to degradation and to eventual dictatorship”.

The complexity of the issue and inconsistency in oversight becomes apparent when we trace the regulatory track record behind GA. Deciding on a PIL filed by Common Cause in 2002 to regulate both the expenditure and content of GA, the Supreme Court in 2014 formed a [committee headed by N.R Madhav Menon](https://indianexpress.com/article/india/india-others/sc-panel-comes-out-with-guidelines-on-govt-advertisements/) to probe the issue. Based on its recommendations, the Honourable [Supreme Court](https://www.livemint.com/Politics/zi9OO28Cu3wEqg9uO77GLK/Supreme-Court-issues-guidelines-for-govt-advertisements.html), noting that GA “should be related to government responsibilities”, ruled that a three-member ombudsman, at the central and state level, must be formed to regulate the same. It also ruled that pictures of government functionaries, other than the president, prime minister, and Chief Justice of India, must not be used as focussing on few personalities, rather than the message, will be “antithetical” to democracy. Curiously, the SC also expanded this list to include Chief ministers and ministers when few poll-bound states sought review in March 2016, while the original prayer in 2002 was to disallow any picture at all! The three-member committee, called the CCRGA (Committee on Content Regulation on Government Advertising) has hardly given out notices to the innumerable violations by the Central and state governments, perhaps as it is functioning under (no prize for guessing) DAVP. 

Given this sketchy regulatory regime and the nature of the Model Code of Conduct (MCC), the ruling party easily benefits by conflating GA and PA. Though Section VII (4) of MCC says “Issue of advertisement at the cost of public exchequer…during the election period for…publicity regarding achievements…shall be scrupulously avoided”, the provision, along with the whole MCC, doesn’t come into force until the announcement of election dates, which is the case in Tamilnadu at the time of writing. Let’s also consider the following facts: the VPT advertisements, despite appearing like GA as they consist of the official emblem of the Tamilnadu government, were launched on 29th December 2020, the same day the ruling party launched its campaign at Namakkal for 2021 polls. They also invoke the image of a former chief minister of the party violating the Supreme court judgment, as mentioned earlier. Given all this, the picture that emerges isn’t a pretty one for our internationally reputed electoral fairness.

To be fair, the VPT ads are among the most well-executed GA (or PA?) in recent times. It’s the intention and timing of the ads that ruffle one’s feathers. In the ultimate analysis, a water-tight legal framework around both GA and PA must be envisaged to avoid any convenient GA-PA swap. Considering GA, if the proposition of not using any picture in GA seems radical, it can at least be limited to apolitical personalities like the President and Governor, in whose name all executive action is taken. Our policymakers can also take a leaf out of the Australian and Canadian examples, duly recognized by the SC [in its 2014 judgment](https://indiankanoon.org/doc/195687967/). The [Australian regulations](https://www.finance.gov.au/sites/default/files/2019-11/campaign-advertising-guidelines.pdf) require GA to strictly adhere to five cardinal principles including objectivity, efficiency, etc. For GAs that cross a certain budget threshold, the guidelines require the government to explain the rationale behind such expenditure to the parliament. Likewise, clause 4.3 of Canadian publicity regulations lays emphasis on fairness. In stark contrast, the Indian policy stops itself with issues like the empanelment of media outlets, the process of paying them, etc., looking away from more substantive issues.

 The CCRGA must be given more teeth, free from ministerial oversight. [In its latest meeting](http://newsonair.com/Main-News-Details.aspx?id=399277), it was revealed that only a handful of states are on course to set up state-level content moderation committees. The unwilling states must submit their regulatory authority in CCRGA, as suggested by the government. The possibility of a six-month ban on GA before elections can also be explored, as originally suggested by the Madhav Menon committee, to counter the delay in the announcement of election dates by the Election Commission. Likewise, for regulating PA by parties, it is mandatory to place an upper limit on pre-election party expenditure, similar to those on per-candidate expenditure, to reduce the influence of money in elections. While, according to this judgment, there is a bar on promoting political symbols using state expenditure (including GA), there is no comparably explicit rule that states government symbols cannot be used in PA! Honoring the duty of maintaining communication with the citizen in a non-partisan, cost-effective fashion, while demarcating the boundary between GA and PA needs probity and political will. What we need is codification, not colorability, in public advertisement policy.

Read More: [Make Real an Urban Legend](https://spontaneousorder.in/make-real-an-urban-legend/)

* * *

**About T. Bhuvanesh Ram**

T. Bhuvanesh Ram, a student of physics by graduation, is a ‘cinephile’ whose interests include policymaking, Constitution, physical comedy, punching above his weight, and daydreaming. He has cleared the UPSC Civil Services examination 2019 and keeps himself busy catching up to his own rising expectations from life.

## Make Real an Urban Legend

Original: https://www.spontaneousorder.in/p/make-real-an-urban-legend

Author: Spontaneous Order

Published: 2021-02-19T16:23:36.000Z

Topics: political-decentralization, urban-governance, fiscal-federalism, property-tax-reform

> India’s political system is too topdown. In a first-past-the-post electoral system, few talented new faces can gain enough critical mass to win elections. India’s political parties tend increasingly to represent family dynasties. In addition to the Ga

**Summary:**

India's top-down political system, dominated by family dynasties like the Gandhis and regional leaders such as Mulayam Yadav and Lalu Prasad Yadav, stifles talented newcomers in a first-past-the-post electoral setup. The author advocates for empowered mayors in cities—some with populations exceeding tens of millions—as a meritocratic ladder, mirroring Indonesia's Joko Widodo, who rose from mayor of Surakarta to president via proven performance. The 15th Finance Commission (FC) report, devolving ₹1,21,000 crore (4.3% of divisible pool) to urban bodies over five years including a ₹38,196 crore Million-Plus Cities Challenge Fund tied to benchmarks like air quality, rightly prioritizes urban engines of growth, given World Bank's 55% urban population estimate versus census's flawed 30%. However, it misses conditioning grants on creating powerful mayors. Instead of ideal matching grants to spur local taxes, it mixes unconditional and priority-linked transfers. The FC castigates states for neglecting state finance commissions (SFCs) mandated by 73rd/74th amendments, urging fund cutoffs for non-compliance. Classical-liberal reforms like aggressive property tax hikes (e.g., Economic Survey's tiered rates estimating ₹65,344 crore potential) and matching grants could overcome vested interests, enabling cities to foster competitive, non-dynastic leaders.

**Key points:**

- Empower mayors in large cities to create performance-based political ladders breaking family dynasties.
- 15th FC devolves ₹1,21,000 crore to urban bodies, including ₹38,196 crore performance-linked fund for million-plus cities.
- Condition central grants on states appointing SFCs and devolving funds, staff, and tax powers to municipalities.
- Implement matching grants and property tax reforms at 0.1-0.3% of value to boost local revenues and overcome resistance.

**By Spontaneous Order**

* * *

India’s political system is too topdown. In a first-past-the-post electoral system, few talented new faces can gain enough critical mass to win elections. India’s political parties tend increasingly to represent family dynasties. In addition to the Gandhis, we have regional dynasties including those of Mulayam Yadav, Lalu Prasad Yadav, Biju Patnaik, Sheikh Abdullah, M Karunanidhi, H D Deve Gowda, and Devi Lal.

India needs a political system enabling dozens of politicians to prove their capabilities as mayor of cities, some of which have populations of tens of millions, more than that of many nations. Successful mayors should compete to become chief ministers, and then national leaders. A good model would be Indonesia’s president, Joko Widodo. He was a teak businessman who joined politics and became mayor of Surakarta. Gaining recognition as an excellent mayor, he got elected as governor of Jakarta in 2012, and as president of Indonesia in 2014. India needs similar political ladders to facilitate the political rise of people of proven capability, unrelated to dynasties.

I wish the 15th Finance Commission, which has just submitted its report, had used it to push for the creation of powerful, empowered mayors. India’s Constitution mandates the appointment of finance commissions (FCs) every five years to recommend how central government revenue should be shared with the states. In recent decades, FCs have also started recommending a share of revenue as grants to local bodies, rural and urban.

The share of urban bodies in devolved funds has risen from 0.78% of the divisible revenue pool in the report of the 11th FC to 4.3% in the current one. The 15th FC’s urban devolution is ₹1,21,000 crore over five years, a substantial sum.

The FC rightly views cities as engines of future development. India is often called mainly rural. The census says barely 30% of the population is urban. But the census definition of towns is highly flawed. India has ‘villages’ of 10,000 people, while other countries have ‘towns’ with under 1,000 people. Using a broader definition of urban characteristics, the World Bank says 55% of India’s population can be considered urban. Hence, decentralization should focus more on municipalities than rural panchayats.

**Mayor Tribe Multiply**

The 15th FC has devised a mix of unconditional and conditional transfers. Global experience shows that unconditional grants induce local bodies to abolish or reduce their own taxes so that the aim of increasing local body funds is foiled. Matching grants — those linked to local revenue collection — are a good way to avoid this problem, but the15th FC does not do so.

Instead, it recommends a mix of unconditional grants and those linked to national priorities like drinking water, water harvesting, and sanitation. For large cities with more than one million population, the FC has recommended additional grants worth ₹38,196 crores through a Million-Plus Cities Challenge Fund, linked to performance benchmarks for air quality and other such parameters.

Ideally, one condition should have been the creation of empowered mayors with large financial resources. That is too politically sensitive to be done in one step and is better done by a series of nudges. The 15th FC has castigated many states for not appointing state finance commissions (SFCs) to devolve powers and revenue to local bodies, as mandated by the 73rd and 74th amendments to the Constitution. Many states have not done so because state-level politicians want to monopolize funds and the associated power, and not share these with local bodies that may throw up inconvenient political rivals.

Without devolution of funds, staff, or administrative and tax powers, many cities have been poorly managed. Many municipalities have been superseded by state governments, and others are obliged to use state-level bureaucrats, who are more answerable to state capitals than city governments.

The 15th FC suggests cutting off funds to states that fail to appoint SFCs to devolve funds and powers. This should accompany serious reform of property taxes, which in India are abysmally low, with vested interests conspiring to keep it that way. In many countries, property tax can be 1% or more of market value. In India, it is often1/100th of this.

**Room to Grow**

The Economic Survey 2017-18 suggested property tax rates of zero for houses with one room, 0.1% for two rooms, 0.2% for three, four, and five rooms, and 0.3% for six and above rooms. It estimated house tax potential at ₹42,160 crores for rural areas and ₹23,184 crores for urban areas. The Survey imputed the same valuation per square foot in rural and urban areas, a phenomenal underestimation of urban tax potential.

The15th FC recommends floor values below which house tax should not fall. A better system would be matching grants. If property tax collected by cities is fully matched by additional grants from central revenue, resistance from vested interest can be overcome.

But more important than technical fixes for city administration is the potential of using empowered cities to nurture elected mayors who can progress to top political heights based on performance and not family links. 

*This article was originally published in [The Economic Times](https://economictimes.indiatimes.com/news/politics-and-nation/make-real-an-urban-legend/articleshow/80773414.cms?from=mdr) on Feb 09, 2021*.

Read more: [Where Are The Women: Understanding The Interlinks of Gender Data Gap and Public Policy](https://spontaneousorder.in/where-are-the-women-understanding-the-interlinks-of-gender-data-gap-and-policy/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Where Are The Women: Understanding the Interlinks of Gender Data Gap And Policy

Original: https://www.spontaneousorder.in/p/where-are-the-women-understanding-the-interlinks-of-gender-data-gap-and-policy

Author: Spontaneous Order

Published: 2021-02-17T13:44:59.000Z

Topics: gender-data-gap, sex-disaggregated-data, women-in-policy, indian-welfare-programs

> Data helps us understand the world around us. From a doctor’s diagnosis to the Instagram algorithm, everything is powered by data. It bridges the gap between curiosity and knowledge. But there are some gaps that data cannot bridge. Lack of data on women

**Summary:**

The post argues that a pervasive gender data gap—lack of sex-disaggregated data on women's issues like employment, sanitation, maternal health, crimes, and asset ownership—leads to 'gender-blind' policies that fail to address women's constraints, stagnating progress for half of India's population. India ranks 112th in the Global Gender Gap Index 2020, with women's workforce participation at a mere 20.3%, exacerbated by absent sex-disaggregated data in programs like MGNREGA, Skill India, NRLM, PMMY, and sanitation schemes. Infrequent data, such as decadal census figures for Beti Bachao Beti Padhao's child sex ratio, hinders outcome tracking. Even in the US, scarce data on violence against women impedes policy design. The Mewar Angithi example illustrates success: an NGO's consultation with Rajasthan women yielded a cheap, user-friendly cookstove reducing smoke and health hazards, unlike government high-efficiency stoves that ignored women's needs. Government failures, like post-2001 Gujarat earthquake homes without kitchens due to male-only planning, underscore the need for women's inclusion. From a classical-liberal lens, the author calls for a 'data revolution'—intentional sex-disaggregated data collection, analysis, and women's involvement at every stage from data to implementation—to enable evidence-based, gender-specific policies fostering accountability and effective development.

**Key points:**

- Lack of sex-disaggregated data in Indian programs like MGNREGA, Skill India, NRLM, and PMMY obscures whether women benefit equally and hinders targeted improvements.
- Infrequent data collection, such as decadal census for Beti Bachao Beti Padhao, prevents real-time tracking of scheme effectiveness on child sex ratios.
- Consulting women in data collection, as Climate Healers did for Mewar Angithi, produced a successful cookstove addressing Rajasthan women's cooking needs, unlike government failures.
- Policymakers must intentionally collect and analyze sex-disaggregated data while including women in decision-making to shift from gender-blind to gender-specific policies.
- Closing the gender data gap requires treating women not as 'other' but as equal participants, enabling just development across domains.

**By Harshvi Trivedi**

* * *

Data helps us understand the world around us. From a doctor’s diagnosis to the Instagram algorithm, everything is powered by data. It bridges the gap between curiosity and knowledge. But there are some gaps that data cannot bridge. Lack of data on women’s and girls’ issues blocks our insights into half the population. 

In most countries, with India being no exception, there is a [gap created by the lack of data on women and girls](http://www.noceilings.org/country-snapshots/#IND). Such data is either limited, hard to access, or in some cases, it just does not exist. The existing data is often not sex-disaggregated (categorized as per sex), making it hard to recognize women’s issues such as female employment rates, sanitation, maternal healthcare, crimes against women, asset ownership, etc. When the issues that constrain women are not recognized correctly due to inadequate data, it’s not hard to see why the resulting policies and programs often fall short of expectations. 

Even developed countries like the United States are victims of the gender data gap. Data available on [violence against women in the US](https://www.amacad.org/publication/fighting-violence-against-women-laws-norms-challenges-ahead) is scarce, and thus, designing and implementing policies for women’s safety is a challenge there. Due to this gap, the present data is uni-dimensional and it fails to prioritize the interest of women, for issues that concern women, and thus, strategizing and focusing on women in policy becomes tough.

With [almost half of India’s population](http://www.dataforall.org/dashboard/censusinfoindia_pca/) consisting of women, it is no surprise that the gender data gap stagnates women’s progress across all domains. India is ranked 112th in the [Global Gender Gap Index 2020](http://www3.weforum.org/docs/WEF_GGGR_2020.pdf), with our rank in economic participation of women being in the bottom five. Understanding women’s limited participation in the workforce, social security benefits, women’s education, and their employability would require data on skills expected from women in the workplace, workplace discrimination, and most importantly, the availability of jobs for women. Only when this data is collected and analyzed consistently can policymakers implement programs that improve women’s participation in the workforce, which is a mere [20.3%](https://data.worldbank.org/indicator/SL.TLF.CACT.FE.ZS?locations=IN) as of now. Even on the website of the world’s largest employment program, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), sex-disaggregated data is not available for crucial indicators like wages, duration of work, and facilities available for workers. According to an [IWWAGE report](https://iwwage.org/), data from the government’s flagship program, Skill India, provides no sex-disaggregated insight into the skills imparted, making it difficult for a researcher to understand if women are facing a skill mismatch in the job market, and if that is the case, what policies enabling women’s skill development can be implemented. **The failure to capture data that is crucial for women’s development results in policies that are essentially “gender-blind” when they should be “gender-specific”.** 

This data mismatch is not just on the employment front. The [Beti Bachao, Beti Badhao](https://pmmodiyojana.in/beti-bachao-beti-padhao-yojana/) program requires annual or bi-annual data on child sex-ratio to be collected in crucial districts to track the progress of the scheme. However, this data is only made available once a decade during the census survey, causing a gap in tracking the outcomes of the measures undertaken by the scheme. This means that unless a scheme or policy specifically undertakes data collection and analysis as a part of its structure, its effectiveness in reducing gender-based inequalities cannot be determined. Programs like the [National Rural Livelihood Mission (NRLM)](https://nrlm.gov.in/outerReportAction.do?methodName=showIndex) that aims to ease financing for self-help groups or the [Pradhan Mantri Mudra Yojana (PMMY)](https://www.mudra.org.in/) that provides loans to small and micro enterprises cite success in achieving their respective targets. But, the data they collected to track the outcomes was not sex-disaggregated. So there is ambiguity about whether women are benefitting from these programs at the same rate as men. If they are not, we are not sure how to make these programs more effective for women, because we don’t know why they are not working for women in the first place. 

The data collected by sanitation programs like the [Individual Household Latrine Scheme](https://sbm.gov.in/sbmReport/home.aspx) and the NSSO and Census data on the availability of toilets in the workplace and shared toilets at home is not categorized by sex. Such data can prove to be a game-changer in designing policies aiming to benefit health and sanitation for not just women, but entire communities. Data available on issues crucial to girls’ development, such as child marriage, child abuse, child labor, child nutrition, etc. is scarce and often not collected regularly enough to track for progress, stagnation, or deterioration.

An example of the importance of gender-sensitive data collection can be illustrated through the progress of the [Mewar Angithi](https://climatehealers.org/blog/2015-8-9-the-mewar-angithi-a-1-device-that-transforms-a-traditional-chula-into-a-high-efficiency-cook-stove/) – a simple device that has played a huge role in solving the firewood burning problem in Rajasthan. After almost two decades of efforts by the government to promote High-Efficiency Cookstoves (HECs), the policies were failing at yielding desirable outcomes. Despite its “high-efficiency”, this cookstove had not convinced the women in Rajasthan to switch to the HEC distributed by the government. The HECs simply required more maintenance and did not accommodate the different styles of cooking practiced in the region. The reason behind the failure of HECs was clear – the design of the product to be used by women, did not take into account the requirements and concerns of women. [Climate Healers](https://climatehealers.org/blog/2015-8-9-the-mewar-angithi-a-1-device-that-transforms-a-traditional-chula-into-a-high-efficiency-cook-stove/), an NGO based in Phoenix, looked into this data gap and decided to ask the women what they expect from a *chulha*, leading to the birth of a 3-stone hearth – the Mewar Angithi. This new device was cheap, safe, and accommodated a Rajasthani household’s cooking requirements. The Mewar Angithi achieved the HEC’s goals of reducing smoke production and the health hazards caused by a traditional *chulha*. The only difference between the government’s HEC distribution program and the Mewar Angithi distribution program was that the latter gave appropriate weightage to women in the data collection process and thus the scheme they designed using that data, proved to be more efficient. Unlike the home building scheme after the Gujarat earthquake of 2001 where homes were built without kitchens due to the lack of women in the planning process, the Mewar Angithi illustrates the ease with which policymakers can ensure effective planning and implementation by taking into account the issues that concern women.

The [UN High-Level Panel report](http://www.un.org/sg/management/pdf/HLP_P2015_Report.pdf) on the post-2015 development agenda asserts that the world needs a “data revolution … to strengthen data and statistics for accountability and decision-making purposes”. This data gap is often not deliberate, it is merely the product of generations of thinking of men as the “default” and women as the “other”. The effort to close this gap, however, has to be intentional. 

Yes, closing the data gap is easy. We have to start by collecting data sex-disaggregated data and using the right data to plan and implement policies. Just collecting data without due considerations to its implications will not be enough. Simply presenting sex-disaggregated data for tokenism will not be enough. Designing policies for women without giving women a seat at the table will not be enough. To close the data gap, we have to close the representation gap, too. Only when women are involved at every stage in decision-making, from data collection to implementation, will we solve the gender gap. It is important to remember that women are not confounding variables in our research, they are not the deviation from the standard, or the “other”. They are equally present in the spaces that we wish to develop, and thus, only their inclusion can enable us to design a just future.

*Read more: [Women Power at the Village Level](https://spontaneousorder.in/women-power-at-the-village-level/)*

* * *

**About Harshvi Trivedi**

Harshvi is a student of the Masters of Public Policy program at St. Xaviers College, Mumbai. She is an economics graduate and an aspiring journalist with a keen interest in gender policy, international relations, and media policy.

## Women Power at the Village Level

Original: https://www.spontaneousorder.in/p/women-power-at-the-village-level

Author: Spontaneous Order

Published: 2021-02-15T16:23:57.000Z

Topics: women-empowerment, panchayati-raj, grassroots-leadership, gender-equality

> In the recent gram panchayat (village council) elections in Maharashtra, a young organisation created a storm. 194 women from the Ekal Mahila Sanghatana (meaning ‘Single Women Organisation’) (EMS) contested the elections and 68 women were elected. EMS

**Summary:**

In Maharashtra's recent gram panchayat elections, Ekal Mahila Sanghatana (EMS), founded in 2015 with CORO support, fielded 194 women candidates, resulting in 68 victories, including 10 of 16 single women, in the patriarchal Marathwada district. These 'Mi Navryala Takale' (Dumped My Husband) women—widowed, divorced, or abandoned—overcame hardships through CORO's 18-month Grassroots Leadership Development Programme (GLDP), funded by donors like EdelGive Foundation. EMS built momentum via gram sabha campaigns attended by 10,000 women and January 2019 mock elections mimicking panchayat processes, empowering women independent of male or political party backing. Initially focused on single women to combat violence and stigma, EMS expanded to all women pursuing independence, with single women in leadership. Campaigners highlighted EMS solidarity, past COVID relief, and priorities like roads, water, pensions, girls' education, and libraries. Without party affiliations, their success via community strength and constitutional challenges to patriarchal customs exemplifies how focus, hard work, and enlightened grassroots leadership can transform society from the village level.

**Key points:**

- EMS fielded 194 women in Maharashtra gram panchayat elections, securing 68 wins, including 10 of 16 single women candidates.
- CORO's GLDP trained EMS leaders, while gram sabha campaigns reached 10,000 women and mock elections prepared contestants.
- EMS broadened from single women to all seeking independence, emphasizing solidarity over political or familial support.
- Elected women prioritized village issues like infrastructure, water, pensions, girls' education, and libraries, proving community backing enables impact.

**By Luis Miranda**

* * *

In the recent gram panchayat (village council) elections in Maharashtra, a young organisation created a storm. 194 women from the Ekal Mahila Sanghatana (meaning ‘Single Women Organisation’) (EMS) contested the elections and 68 women were elected. EMS was set up only in 2015 with support from [CORO](http://coroindia.org/), an NGO working towards a society based on equality and justice.  I was extremely excited to get this news because four years ago I had spent a weekend with some of these women in Ambejogai, when CORO had organised the first-ever convention of [Single Women](http://coroindia.org/what-we-do/regional-campaigns/single-womens-organization). These women had been abandoned, widowed or divorced and faced a huge number of hardships, in the very patriarchal Marathwada district. Yet, their enthusiasm, positivity and feeling of sisterhood were highly energising. I learnt a new term that weekend – *Mi Navryala Takale* – to describe these women. It means “Dumped My Husband”. 

I still strongly remember two events from that weekend. The first was when the women (who were all wearing *phetas* on their heads) picked up a copy of our Constitution that had been set in a metal frame and rushed towards a thermocol wall on which were listed the various constraints that a patriarchal society had placed on them. They charged and broke down this wall, symbolically showing that these women will use constitutional methods to challenge customs that hold them back. The second was a discussion we had till late at night talking about their aspirations. 

This blog talks about how these women prepared for this election. EMS was set up to reduce violence against women and make society look at single women differently. The leadership of EMS was trained through the Grassroots Leadership Development Programme (GLDP) of CORO. This is an 18-month programme that has been running for over 10 years to develop grassroots leaders to tackle challenging issues in their communities and beyond. The work with EMS was funded by donors like [EdelGive Foundation](https://www.edelgive.org/).

I spoke to some of the elected women after the elections. They were extremely excited because during the campaigning most people wrote them off. They had no affiliation with political parties and had no backing from the people in power. What happened over the past few years to make these women so powerful today?

Gram panchayat elections are held every five years. The gram panchayats are considered to be the third tier of governance (the first being the centre, and the second the state). Elections are not held on party lines. For three years EMS ran gram sabha (bodies consisting of all persons from the village who are eligible to vote) campaigns, where women were encouraged to attend. About 10,000 women attended at least one of these gram sabhas. After attending these meetings, many women decided that they would contest the elections. In January 2019, EMS conducted mock elections. This was to elect block-level representatives for EMS. The process followed was similar to that of the gram panchayat elections. There were two objectives – to elect EMS representatives and to let women experience the process in the gram panchayat elections. Many women were contesting for the first time. In the past, some women had got elected in gram panchayat elections, but the men had controlled those elections. This time women clearly understood what the entire process involved. 

Initially, EMS had started working only with single women, but gradually other women also became part of the programme. Since EMS want all women to accept single women, they accepted married women as well.  The leadership of EMS, however, is only by single women. One of the learnings of EMS is that single-hood is often decided on the availability or non-availability of a male partner. If the woman has a husband and if she is heading the family due to the inability of her husband to do so (due to alcoholism, laziness, etc), she is not considered to be single even though she has to manage the family on her own. Therefore, they broadened their definition of single women. Hence, EMS works with all women with the ultimate goal of helping them become independent, regardless of whether she is with a partner or not. Furthermore, it is not easy for any woman to contest elections in Marathwada because of the highly patriarchal mindset there.  Out of the 194 women who contested, 16 women were single. And 10 of these 16 women got elected. All are members of EMS and are amazing women. 

During the campaign, many of the women were asked how they would be able to get things done because they were either single or did not have the support of their husbands. But when people saw that there is a large organisation, EMS, behind them, the voters realised that these women can actually get things done. The solidarity shown by all members was amazing. Rukmini Nagapure told me that she continuously campaigned saying that women needed to be in power to handle women’s issues and, therefore, please vote for her. She talked about various issues the women would look at – roads, water, pension collection, educating girls, setting up libraries, etc. Mira Tupare said that they were continuously pressured to step down, but they did not get afraid. Chitra Patil, when campaigning, talked about how, despite having no family backing, they were able to achieve so much COVID relief work, thanks to the support of [CORO](http://coroindia.org/). Therefore, if they had the stronger backing of everyone in the village, they could achieve so much more. 

These women were very influential and charismatic at all levels. They were chasing their dreams of getting elected. Nearly all of them had no support from any political party.  Ekal Mahila Sanghatana, by harnessing the strengths of the community, has shown them a way to make it a reality. This is a lesson for all of us who hide behind various excuses. The single women of Marathwada have shown that focus, hard work and enlightened leadership can change the world. 

*Read more: [Will work-from-home give a boost to female employment?](https://spontaneousorder.in/will-work-from-home-give-a-boost-to-female-employment/)*

* * *

**About Luis Miranda**

Luis Miranda connects dots. He started investing in India’s infrastructure a long, long time ago. He started IDFC Private Equity and was earlier a part of the start-up team of HDFC Bank. Luis has invested in and has been on the boards of companies like GMR Infrastructure, L&T Infrastructure, Delhi International Airport, Gujarat Pipavav Port, Gujarat State Petronet, and Manipal Global Education. Luis today spends most of his time, together with his wife, on non-profits. He is Chairman of CORO and Centre for Civil Society and Managing Trustee for Nadathur Trust. Other organisations include 17000 Ft Foundation, SNEHA, Muktangan, Sunbird Trust and Samhita Social Ventures. Luis graduated with an MBA from Chicago Booth and is a Chartered Accountant.

## Misjudge A Nudge And It Might Not Budge

Original: https://www.spontaneousorder.in/p/misjudge-a-nudge-and-it-might-not-budge

Author: Spontaneous Order

Published: 2021-02-12T12:00:56.000Z

Topics: nudges, behavioral-economics, policy-failures, paternalism

> But if it fudges, get read for grudges. Ask not what your country can do for you; ask what you can do for your country.’ While the latter clause of JFK’s now-immortal line rouses and rivets the dullest of hearts, the president clearly dodged a bullet

**Summary:**

Modern libertarian politics limits government intervention to free market failures, but behavioral economics introduces 'behavioral market failures' addressed via nudges—subtle policy hints preserving autonomy—or shoves like regulations. Nudges gained popularity post-UK's Nudge Unit, with India's NITI Aayog considering a behavioral insights group per 2018-19 Economic Survey. However, a Queen Mary University of London study analyzing 65 articles (2008-2019) identifies eight nudge failure types, including confusing designs, inaccurate info, ineffectiveness, and backfires, especially in social behaviors like tax compliance or healthy habits. Backfires occur due to 'sticky norms' (Kahan 2000), where nudges in taboo cases like sexual assault signal state indifference. Examples include maternity leave discouraging female hiring and lower pay, health campaigns fueling body dysmorphia via 'thin ideal' association, and sin taxes like Bloomberg's soda ban criticized as paternalistic. Nudges suffer short-term efficacy, habituation (e.g., cigarette warnings), and inherent paternalism assuming citizens need government prodding, masking unseen effects (Bastiat). From a classical-liberal view, their unpredictability, costs, and arbitrary 'right outcomes' render them unworthy.

**Key points:**

- A Queen Mary University study of 65 articles from 2008-2019 identifies eight types of nudge failures, including backfires that worsen targeted behaviors.
- Nudges backfire in cases of 'sticky norms' around taboos like sexual assault, where leniency signals state endorsement of crime.
- Policies like maternity leave and health campaigns have unintended gendered harms, such as reduced female hiring and body dysmorphia.
- Nudges are paternalistic, short-term tools prone to habituation, undermining libertarian emphasis on individual autonomy over government hints.

**By Renuka Bhat**

* * *

## But if it fudges, get read for grudges.

*Ask not what your country can do for you; ask what you can do for your country.’* 

While the latter clause of JFK’s now-immortal line rouses and rivets the dullest of hearts, the president clearly dodged a bullet on the former (too soon?). 

The question “what can – or rather, *should* and *shouldn’t* – your country do for you” has aeons of political, philosophical and economic disagreements to its name. What the government can, or rather *should* be able to do is fundamental to the very definition of State, People and Society. 

Modern libertarian politics advocates restricting government interference only to where the free market fails. With the evolution and subsequent incorporation of behavioral economics in policymaking, a new market failure is recognized. [“Behavioral market failures”](https://www.capitalideasonline.com/wordpress/behavioral-market-failures/) refer to the irrational blindspots in people that lead them to suboptimal outcomes. The government, here, has two alternatives to achieve the desired outcome. It can issue a direct regulation/ban (a “shove”) or introduce a policy (a “nudge”) that would merely *hint* at the desired outcome. 

The nudge, as a policy tool, has risen to popularity for its discretion. It simultaneously protects the individual’s autonomy whilst getting the job done. The success of the UK’s “Nudge Unit” has prompted governments across the world to innovate. In keeping with the 2018-19 Economic Survey’s recommendations, the [NITI Aayog](https://health.economictimes.indiatimes.com/news/industry/nudging-india-towards-better-health-incorporating-behavioural-economics-into-healthcare/73286326) has a tentative idea of setting up a behavioral insights group in the works. In fact, Prof Ramit Debnath of Cambridge encourages the same. For a country as large and diverse socially, religiously, and linguistically, a nudge-based policy can incite results ubiquitously. Nudges can prove to be universal in their approach, barring any demographic impediments, especially literacy. Yet, as seductively simple and clever as it may sound, the reality leaves much to be desired.

A recent [study](https://www.sciencedaily.com/releases/2020/10/201028110633.htm) by Queen Mary University of London, analyzing 65 articles, published between 2008 and 2019, revealed a total of eight types of failures in nudge-based policies. These include nudges that are “confusing” or based on inaccurate information or just produce no result at all. A prominent kind is the “backfire”, when the nudge is, conversely, counterproductive. This becomes especially critical, considering the cost – both in terms of money and time – of testing and implementing these policies. The study highlighted the significant failures in attempting to alter [social behavior](https://www.psychologytoday.com/intl/blog/future-minded/202010/why-nudges-fail-more-often-you-think), such as encouraging tax compliance, charity donations, pro-environment behavior, and healthy life changes.

In part, these failures can be understood by the obstinacy of certain social habits. [Kahan (2000)](https://chicagounbound.uchicago.edu/uclrev/vol67/iss3/2/) describes this phenomenon as “sticky norms”. It is observed that when accosted with cases that are sensitive or societally taboo (such as rape, sexual assault, or domestic abuse), a hard “shove” does not work. Having a strict sentence only deters jurors from convicting the accused due to the stigma of the issue. However, when replaced by a “nudge”, the effect was worse. A lenient sentence was perceived as the State is not only indifferent but also encouraging of such criminal behavior: a “nudge” becomes a “sly wink”.

The case reveals an interesting relation between law and societal norms. It is society’s idea of morality and judgment that birth its legal structure. But, if you reverse the causality, the nudge cannot budge one’s biases.

Nonetheless, biases persist on the individual’s as well as the State’s end. Policies are, after all, devised by very real, very much fallible people which have their own blindspots. Frederic Bastiat called it the “unseen” effects of policies. A most glaring example would be the maternity leave policy. The policy intended to not make a woman choose between starting a family and building a career. However, it backfired as most companies saw the mandatory maternity leave as an additional cost. It not only dissuaded them from hiring more women (irrespective of their family plans) but also *justified* paying them less than their male counterparts, citing their lesser productivity. 

Other policy decisions also have notably gendered (negative) effects. Another infamous case is how health-targeting policies can lead to disastrous consequences. Although well-intentioned, government health propaganda in the US began to be seen in poor light. Instead of fitness, it came to be interpreted as promoting “slimness”. Especially since mainstream beauty and media industries (such as advertising) *actually* peddled the “thin beauty ideal”, the policies became associated with the same. In effect, [these policies only fuelled body-image issues](https://www.jstor.org/journal/agenpolianalyref#:~:text=Description%3A,of%20Business%20and%20Economics%2C%20ANU.&text=It%20deals%20largely%20with%20economic,foundations%20and%20implications%20of%20policy.), promoting anorexia and body dysmorphia, instead of wellness, amongst young women. Then there are paternity and period leaves. Feminist economics is rife with many such instances.

Yet, the crux of the problem with nudges is the nature of nudges themselves. A nudge is an instrument to simply prod an individual towards a certain outcome by framing their choice of architecture. Fundamentally, it isn’t normative in nature – it suggests, not sermonizes. Two obvious issues become apparent. First, it is only useful in the short-term. Repeated use of a nudge can make an individual immune to it, as is in the case of cigarette packets. 

The second concern is the need for a nudge at all. The notion that people are unable to make the right choice by themselves, and need to be directed by their Big Brother government, is patronizing, at best. Despite its “soft” nature, nudge-based policy approaches are ultimately rooted in a paternalistic state. The nudge only gives it a free pass under the guise of autonomy in libertarianism. [Sin taxes](https://www.researchgate.net/publication/285150035_Sin_Taxes_and_Sindustry_Revenue_Paternalism_and_Political_Interest) present the darker side of nudges. For instance, the ex-New York mayor, Michael Bloomberg, was met with heavy criticism on his ban of sodas in containers larger than 16 ounces. 

It opens a Pandora’s Box of questions: How is the right outcome decided? Who decides which areas require nudging? And how much punishment is enough?

All in all, knowing how unpredictable, fallible, and arbitrary nudges as a policy device can be, the bottom line is: is it really worth it?

*Read More: [There Is No Political Freedom Without Economic Liberty](https://spontaneousorder.in/there-is-no-political-freedom-without-economic-liberty/)*

* * *

**About Renuka Bhat**

Renuka Bhat is a BSc Economics graduate from NMIMS University. She is a freelance research writer, with her primary interests being political economy, public policy and behavioural economics.

## Camel can be preserved but not by declaring it as the state animal

Original: https://www.spontaneousorder.in/p/camel-can-be-preserved-but-not-by-declaring-it-as-the-state-animal

Author: Spontaneous Order

Published: 2021-02-08T12:38:54.000Z

Topics: livestock-regulation, pastoral-communities, rural-livelihoods, state-intervention

> It’s interesting how on one side the government is trying to deregulate industries by bringing in the new farm laws, but on the other is still regulating the trade of cattle. Observing a fall in the camel population in Rajasthan by 56% between 1992 and

**Summary:**

Rajasthan's declaration of the camel as state animal in 2014 and the 2015 Camel Prohibition Bill banning slaughter and regulating trade failed to halt the species' decline—camel population fell 56% in Rajasthan from 1992-2012, and from 3.26 lakhs in 2012 to 2.5 lakhs in 2019 per the 20th Livestock Census—while crippling Raika pastoralists' livelihoods. Camel fair arrivals dropped 63% between 2012-18, owners' cumulative income plummeted from Rs 73.01 crore to Rs 24.20 crore, and male camel prices crashed from Rs 20,000-50,000 to Rs 5,000, deterring international buyers and affecting over 20,000 families. The Ushtra Vikas Yojana offered Rs 10,000 per newborn but herders received only Rs 2,000. From a classical-liberal perspective, such interventions exacerbate problems caused not by trade but by shrinking pastures, grazing bans like the 2004 Kumbhalgarh order, and lacking infrastructure. Instead, governments should relax grazing restrictions on commons and sanctuaries, promote high-value camel milk (rich in ayurvedic plants, beneficial for TB, autism, allergies) through market infrastructure, and enable sustainable herder livelihoods over coercive prohibitions.

**Key points:**

- Rajasthan's camel trade bans caused fair incomes to fall from Rs 73 crore to Rs 24 crore (2012-18) without reversing population decline.
- Camel prices dropped from Rs 20-50k to Rs 5k, making business unviable and impacting 20,000 Raika families.
- True threats to camels are pasture shortages and infrastructure gaps, not trade or slaughter.
- Governments should promote camel milk markets and relax grazing laws instead of bans.
- Holistic support for herders, not state animal declarations, better preserves camels.

**By Ashwini Kumar**

* * *

It’s interesting how on one side the government is trying to deregulate industries by bringing in the new farm laws, but on the other is still regulating the trade of cattle. Observing a fall in the camel population in Rajasthan by [56%](http://animalhusbandry.rajasthan.gov.in/livestock_census.aspx) between 1992 and 2012, the camel was [declared as Rajasthan’s state animal in 2014](https://www.thehindu.com/news/national/other-states/camel-made-rajasthan-state-animal/article6167575.ece) and a strict watch on its trade was brought into place. As a direct result, the livelihood of the Pastoral/Raika community in Rajasthan has taken a hit as the camel trade was their bread and butter. This was followed by the Rajasthan Camel (Prohibition of Slaughter and Regulation of Temporary Migration or Export) Bill a year later. This made camel slaughter a criminal offense punishable by imprisonment for five years. 

As the policy came into effect, camel transport became stringent and vigilance on transport increased. Famous camel fairs at Pushkar and other places witnessed a decline in the scale of availability and the selling price crashed. As per a [report](https://thewire.in/government/purchasing-cattle-invites-either-extortion-or-murder-so-why-will-we-risk-our-lives) published in The Wire, the Animal Husbandry Department, Rajasthan estimates that the arrival of animals in the state livestock fairs has fallen by 63% between 2012-13 and 2017-18. Due to this, the cumulative income of cattle owners in 2017-18 declined to Rs 24.20 crore from Rs 73.01 crore in 2012-13. During my visit to Rani village, Pali, I communicated with a camel breeder Mr. Rakesh Raika about the issue. He said, “Before the law came into effect, a male camel used to sell for Rs 20,000 to Rs 50,000. Now it fetches only up to Rs 5000”. The international traders refrained from coming to market as they could not export camels to Gulf countries where there is more demand. The whole business became unviable for them.  

However, to support the owners, the government initiated a ‘[Ushtra Vikas Yojana](https://www.deccanherald.com/content/573901/camel-farmers-get-rs-10k.html)’ (Camel Development Scheme) in 2016 to provide monetary support of Rs 10,000 to camel herders for every newborn calf, in three installments over the course of 18 months. The budget for the first phase was set as Rs. 3135 lakh for 4 years. However, several herders I spoke to in the Pali and Pokharan region of Rajasthan said they have barely received Rs 2,000. 

[

![members of the Raika community interacting with researchers](https://substackcdn.com/image/fetch/$s_!3dJC!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F914f519d-919e-4e84-9b27-7a5d10c1644f_280x158.png "members of the Raika community interacting with researchers")



](https://substackcdn.com/image/fetch/$s_!3dJC!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F914f519d-919e-4e84-9b27-7a5d10c1644f_280x158.png)

Further, looking at the intended effect of the law, has the population of camels increased? The [20th livestock Census Report](https://dahd.gov.in/sites/default/filess/20th%20Livestock%20census-2019%20All%20India%20Report_0.pdf) 2019 shows that since 2012, the population of camels in India has declined by 34.6%. In Rajasthan, the population of camels in 2019 stands at 2.5 lakhs compared to 3.26 lakhs in 2012. The policy intervention did not achieve its end and in fact, led to many unintended consequences such as a decrease in trading of camels and loss of livelihoods. The camel population earlier did not plummet because of slaughtering or trading but lack of integrated service, infrastructure, and lack of pastures and grazing land affected severely.

[

![members of the Raika community sitting in the desert with their camels in the background](https://substackcdn.com/image/fetch/$s_!dcwg!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc6478823-6a4f-41db-9d61-b6ebb9a5eb77_284x212.png "members of the Raika community sitting in the desert with their camels in the background")



](https://substackcdn.com/image/fetch/$s_!dcwg!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc6478823-6a4f-41db-9d61-b6ebb9a5eb77_284x212.png)

As a consequence of declaring it as the state animal and making its transportation stringent, the pastoral community has been adversely affected. An [analysis report](https://thewire.in/government/rajasthan-no-cattle-fair-this-year-camel-owners-worst-hit) found that  “the cumulative income of cattle owners declined from Rs 73.01 crore in 2012-13 to Rs 24.20 crore in 2017-18, and the state income (tolls, fees and fair tax charged by the government) dropped to Rs 1.04 lakh from Rs 7 lakh in the corresponding years”. It is estimated that more than 20,000 families’ livelihoods would have been affected.

The government should support  Raika communities in getting an identity and help them establish sustainable sources of livelihoods. Because camels are free-ranging and feed on 36 and more ayurvedic plants, their milk is considered to be one of the healthiest in the world. The milk is beneficial for people suffering from Tuberculosis, autism, and severe food allergies. Thus, it should be promoted as a health supplement for them. There is a need for the right kind of infrastructure where the government can chip-in.

In 2004, following the [order](https://www.downtoearth.org.in/coverage/ban-on-grazing-hits-raikas-community-hard-5748) issued by the Central Empowered Committee (CEC) appointed by the Supreme Court, the forest department of Rajasthan banned Raikas from grazing in Kumbhalgarh sanctuary. The government needs to relax the laws for grazing, allowing Raika camels to graze in village common land. 

Instead of declaring camels as a state animal, holistic support to rearers can certainly work better to preserve camels.

*Read more: [Forgotten Nation Builders](https://spontaneousorder.in/forgotten-nation-builders/)*

* * *

**About Ashwini Kumar**

Ashwini Kumar is an engineer and holds M.A in Social Entrepreneurship from TISS, Mumbai. He has been working in the development sector for the last 6 years. He has worked with rural women, small entrepreneurs, and indigenous communities like tribal and pastoral communities. He is Senior Project Manager at Access Livelihoods. His passion lies in rural development.

## Forgotten Nation Builders

Original: https://www.spontaneousorder.in/p/forgotten-nation-builders

Author: Spontaneous Order

Published: 2021-02-04T14:07:29.000Z

Topics: budget-private-schools, covid-education-impact, private-teacher-support, education-policy

> In my journey of understanding India’s education system, I visited various institutions and met several budget private school owners, leaders and teachers. As I went searching deeper, I was surprised at every step! On 31st December 2020, I was fortunate

**Summary:**

Budget private schools, vital for India's education, faced devastating challenges during COVID-19, with teachers—described as nation builders—losing jobs and turning to menial work like vegetable hawking, watchmen duties, daily wage labor, or driving Uber rentals. The author, after visiting schools and attending a Micro Innovation Award Ceremony in Ambala on December 31, 2020, highlights stories such as Hindi teacher Mahendra ji, who exhausted savings on COVID treatment and sells vegetables; Srinivasan, unpaid for nine months and now driving rentals; and MBA-qualified Ajmeri Begum, now working at KFC after 15 years teaching. School buses were shuttered with no buyers, exacerbating financial distress for students, parents, teachers, and owners amid massive learning loss. While government aid supports public school teachers, private ones receive none. In response, the National Independence School Alliance (NISA) launched the NISA CARE FUND in October 2020 under its Save Education campaign to assist affected private school communities through contributions from leaders. The author aims to publicize this private initiative nationwide, urging identification and support for those in need to sustain these essential low-cost education providers.

**Key points:**

- Budget private school teachers lost jobs during COVID-19, resorting to survival gigs like vegetable selling and Uber driving while government aid excluded them.
- NISA CARE FUND, launched October 2020, provides financial relief to stressed students, parents, teachers, and schools in the private sector.
- Private school innovations during the pandemic, like online adaptations, were recognized at events but did not alleviate economic hardships.
- Author calls for school leaders to contribute to NISA CARE FUND and inform affected individuals to access help.

**By Basu Rai**

* * *

In my journey of understanding India’s education system, I visited various institutions and met several budget private school owners, leaders and teachers. As I went searching deeper, I was surprised at every step! On 31st December 2020, I was fortunate to attend the Micro Innovation Award Ceremony in Ambala, where teachers from across the country were present. They were sitting tight in the hope that their school’s name would be announced to collect the award.  

I got pretty curious about these awards, so I started talking to some school leaders and organisers. I spoke to Mr Dilip Modi, from Jhunjhunu, Rajasthan and he shared that, “We have done many innovations to impart education for children during COVID-19. Our teachers showed admirable encouragement to use online platforms as an opportunity of creation, and today we might get appreciation for that. If not we will get it next year.” When he was talking about these innovations during COVID-19, my curiosity piqued and I asked another question: “What were the challenges you faced during the Coronavirus pandemic?” He frowned and replied with a sad expression, “Challenges were intolerable. For instance, hundreds of school buses had to be shut and there wasn’t anyone to buy those buses. Teachers lost their jobs and were forced to become watchmen, vegetable hawkers and some even started to do daily wage labour.” 

A teacher is someone who helps students to acquire knowledge, competence and virtue. This profession is historically respected because teachers are one of the most important nation builders; who put all their efforts and energy into ensuring that the future of the nation, our children, live up to their full potential. 

During this award ceremony, I heard Dr. Kulbhushan Sharma, President of National Independence School Alliance (NISA). Talking about NISA CARE FUND, he announced on the microphone, “Dear leaders, kindly contribute to the NISA CARE FUND and also start finding the teachers and students who are financially challenged because of COVID-19 so that we can reach the helpless and help them.”

I was delighted to hear such an announcement after understanding the challenges of Mr Dilip Modi. That announcement is what made me write this article, so that I could take the story of this initiative nationwide. My goal is to try and inform as many teachers and students as possible who have been affected by Covid-19, so that they can knock on the door of NISA whenever they are in dire need and get benefited from the NISA CARE FUND.  

NISA CARE FUND was announced in October 2020 as a part of NISA’s Save Education campaign, with the objective of helping students, parents, teachers, and schools under financial stress to cope with the pandemic. During my conversation with Dr Kulbhushan Sharma, I was acquainted with stories of teachers which highlight the reality of challenges being faced by budget private schools, and also highlights the need for the NISA CARE FUND. In fact, the following stories were the reason for the genesis of NISA CARE FUND:

[

![](https://substackcdn.com/image/fetch/$s_!oiie!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fb7514760-2f27-4bd7-acb0-e6c9cb995069_445x425.jpeg)



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Mr Mahendra ji, is a Hindi teacher teaching in Sahithi High School for the last eighteen years. This pandemic has ruined his occupation completely and he now has to sell vegetables to make a living. The schools are closed, and there are very few of them which may reopen in the future.

His life completely circled around his school. He used to guide and mentor hundreds of students, but now he is having trouble finding solutions to his own problems. Mahendra’s life stands at a crossroad, and he can’t figure out where to go. He also caught the COVID-19 virus. Whatever savings he had, they got exhausted in his treatment and medicines, which added further financial obstacles in his life. He says, “No one is coming forward to help these private school teachers in distress. The government is taking care of the government school teachers, but, sadly no one is there for private school teachers.”

[

![](https://substackcdn.com/image/fetch/$s_!7nxf!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc9bfdccf-a624-43e9-bf3f-2d316d13c08b_471x492.jpeg)



](https://substackcdn.com/image/fetch/$s_!7nxf!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc9bfdccf-a624-43e9-bf3f-2d316d13c08b_471x492.jpeg)

Mr Srinivasan is a teacher who has been working in the Lily Model Group of Schools for the last ten years, and he absolutely loves this profession. But it has been more than nine months since he received his salary. He can’t pressurise the school management, as even they are not getting fees from parents. So, for his survival, Srinivasan is driving Uber rental bikes and cars to meet his daily needs. 

He says, “I want the government at the centre and the state to be mindful of the problem faced by private school teachers like me and provide them with financial support for their sustenance.” Since the beginning of the lockdown in March, Srinivasan received only half of his salary for three months, and the school subsequently stopped paying him altogether. With the wages he gets from driving rental bikes and cars, he has only so much to provide to his family.

[

![](https://substackcdn.com/image/fetch/$s_!aQ5t!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fb9005eef-d99b-4e99-b15d-8abf38957acf_439x527.jpeg)



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Ms Ajmeri Begum is a teacher at Lily Model High School. She has been working as a teacher for the last 15 years. But because of the pandemic, like many others, she has been facing financial problems. She was not getting any salary from the school due to scarcity of funds. She has two children, and her husband also lost his job during the pandemic. Naturally, it was getting difficult for them to survive. With no income of her own, and her husband being unemployed, she decided to quit teaching temporarily and search for a new job. Despite having an MBA degree, she had trouble finding jobs. Eventually, she secured a job in a KFC restaurant, and it has now been four months since she joined. Even though she is not unemployed anymore, she still feels disappointed because she had to give up teaching. She used to teach children and brighten up their lives. But today, her own life seems dark and gloomy, and her future appears bleak. 

My journey of understanding budget private schools was full of such disheartening stories and challenges of students, teachers and parents alike. School owners had their own problems, teachers were unemployed, parents lost their jobs and students’ learning loss was massive. To tackle this situation, organisations like NISA put in the collective efforts to support India’s budget private schools. But these schools are still awaiting support from the government.

Watch this video to learn more:

*Read more: [Where are the students of India?](https://spontaneousorder.in/where-are-the-students-of-india/)*

* * *

**About Basu Rai**

Author, Development Professional and advocate for child rights globally, Basu Rai has been a speaker at many organisations like ILO and United Nations. He began his journey of social work with Nobel Laureate Mr Kailash Satyarthi, in 1998 as a part of the worldwide movement "Global March Against Child Labour."

## India’s trade policy is affecting agricultural trade

Original: https://www.spontaneousorder.in/p/indias-trade-policy-is-affecting-agricultural-trade

Author: Spontaneous Order

Published: 2021-01-29T11:45:02.000Z

Topics: trade-policy, agricultural-trade, minimum-support-price, wto-review

> Recently, the final session of India’s seventh Trade Policy Review (TPR) concluded at the World Trade Organization (WTO) in Geneva, Switzerland. The TPR is an important mechanism under the WTO’s monitoring function in which member countries’ trade a

**Summary:**

India's seventh WTO Trade Policy Review (TPR) in 2021, following the 2015 review, reveals unchanged reliance on License Raj remnants like tariffs, export taxes, minimum import prices, import/export restrictions, and licensing, creating uncertainty for international traders through frequent changes. The Essential Commodities Act classifies farm produce like onions as essential, enabling annual export bans—such as the 2020 halt of in-transit shipments to Bangladesh—damaging India's reliability as an exporter and disincentivizing trade partnerships. WTO recommends ending 'stop and start' policies on agricultural exports/imports to allow farmers objective crop sowing decisions. Domestically, Minimum Support Price (MSP) procurement, robust in Punjab and Haryana but weak elsewhere, distorts cropping patterns toward government-procured wheat, rice, cotton, and sugar, away from pulses, coarse grains, and oilseeds, exacerbating regional disparities. Fragmented markets and poor infrastructure ensure farmers receive only a fraction of consumer prices, with intermediaries capturing the rest. From a classical-liberal viewpoint, these protectionist measures, designed for a famine-hit era, undermine farmers' livelihoods and India's global trade position; urgent reforms are needed.

**Key points:**

- India's trade policy instruments like tariffs and restrictions create trader uncertainty via frequent changes, as noted in the 2021 WTO TPR.
- Essential Commodities Act enables repeated onion export bans, harming India's exporter reputation, e.g., 2020 Bangladesh shipments.
- MSP procurement favors wheat and rice in states like Punjab and Haryana, distorting cropping away from pulses and oilseeds.
- WTO advises against erratic export/import policies to enable farmers' rational crop decisions.
- Protectionist policies rooted in food security harm farmers and trade; reforms are essential.

**By Swati Singh**

* * *

Recently, the final session of India’s seventh [Trade Policy Review](https://www.wto.org/english/tratop_e/tpr_e/tp503_e.htm) (TPR) concluded at the World Trade Organization (WTO) in Geneva, Switzerland. The TPR is an important mechanism under the WTO’s [monitoring](https://www.wto.org/english/tratop_e/tpr_e/tp503_e.htm) function in which member countries’ trade and related policies are examined with an aim to contribute towards improved adherence to WTO rules.

India’s [last TPR](https://www.wto.org/english/tratop_e/tpr_e/tp413_e.htm) took place in 2015. Six years later in 2021, India’s trade policy remains largely unchanged. In this article, we’ll delve into why this is problematic, and what it means for India’s agricultural trade going forward.

In 1947, India was a new country racked by pains of the Partition and the dire poverty of her people. The ‘Licence Raj’, an elaborate system of licences and regulations that were required to set up and run businesses in the country, was dismantled with the liberalisation policy introduced in 1991. A lot has happened since then, but the remnants of *license raj* still remain, and the WTO [report](https://www.wto.org/english/tratop_e/tpr_e/tp503_e.htm) agrees: “*India continues to rely on trade policy instruments such as the tariff, export taxes, minimum import prices, import and export restrictions, and licensing.*”

Now, why should we be concerned about this? Licenses, taxes and restrictions are a way of protecting our country’s economy from domestic price fluctuations. *“As a result, frequent changes are made to tariff rates and other trade policy instruments, which creates uncertainty for international traders*”, said the [report](https://www.wto.org/english/tratop_e/tpr_e/tp503_e.htm).

An example of such a restriction is the Essential Commodities Act that gives the government power to categorise some commodities as essential and control and regulate their supply, production, distribution and price. This list includes farm produce like onions, edible oil, potatoes, sugar and rice. Let’s look closely at onion to understand the implications of this control. Because it’s an “Essential Commodity”, the government bans exports of onion due to rising prices at least once every year. In 2020, for instance, in-transit exports to Bangladesh were [stopped](https://www.dhakatribune.com/business/commerce/2020/09/14/india-bans-onion-export-to-bangladesh-yet-again#:~:text=The%20Indian%20government%20on%20Monday,not%20exporting%20onions%20in%202019.) and forced to come back. India’s perception as a reliable exporter of goods regularly takes a hit in the international markets. Arbitrary bans also disincentivise other countries to look \\ to India as a stable exporter and business partner. Thus, the WTO report rightly recommends that “*there must not be a ‘stop and start’ policy on exports and imports of agricultural products because that prevents farmers from taking objective decisions on sowing different crops*“.

That brings us to the uncertainty India’s trade policy has created in agriculture markets domestically. Minimum Support Price (MSP) is the rate at which the government procures crops from farmers each year, to ensure that the farmers are not affected by price fluctuations. But the procurement infrastructure is not perfect and differs between states. For instance, states like Punjab and Haryana which were the epicentre of the green revolution in India, have top-notch procurement infrastructure. But other states, not so much.

Thus, the practice of procurement from certain states has resulted in regional [disparities](https://www.business-standard.com/article/economy-policy/farmers-protest-msp-distorting-cropping-patterns-says-wto-report-121010701649_1.html) in production. The major [problem](https://theprint.in/theprint-essential/whats-msp-and-how-is-it-determined-the-issue-at-the-heart-of-farm-protests/562172/) with the MSP is the lack of government machinery for procurement of all crops except wheat and rice, which the Food Corporation of India actively procures under the Public Distribution System (PDS). “*Distortion of cropping patterns is in favour of commodities such as wheat, rice, cotton, and sugar that are pro­cured by the central government at MSP and away from other items such as pulses, coarse grains, and oilseeds*”, found another [report](https://www.wto.org/english/tratop_e/tpr_e/s403_e.pdf) by the WTO Secretariat.

The report also noted that due to fragmentation of agricultural markets and weak infrastructure, farmers rece­ive only a fraction of the price paid by consumers, with the bulk going to intermediaries. The MSP issue is also at the centre of the ongoing farmer protests.

India’s Trade Policy Review rightfully nudges us to think about how our agricultural policy, formulated back when India was a famine hit country, still aims at providing food security through protectionist measures like licenses, tariffs etc. Reform is necessary, as these measures seriously harm not only India’s position as an international trade partner but also our farmers’ livelihoods, which has already suffered enough.

*Read more: [It’s chiefly rent-seekers who oppose our farm reforms](https://spontaneousorder.in/its-chiefly-rent-seekers-who-oppose-our-farm-reforms/)*

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## Bandhan: A Story of Market-based Financial Inclusion

Original: https://www.spontaneousorder.in/p/bandhan-a-story-of-market-based-financial-inclusion

Author: Spontaneous Order

Published: 2021-01-22T12:02:22.000Z

Topics: financial-inclusion, microfinance, private-banking, market-solutions

> There has been much effort towards bringing financial inclusion in India. Much of these efforts came from the State, and the banking sector was mostly unwilling to serve the poor unless they were compelled to. Despite these attempts at financial inclusi..

**Summary:**

Bandhan Bank, founded by Chandra Sekhar Ghosh from humble origins, exemplifies a classical-liberal success in financial inclusion through market mechanisms, outperforming state-led efforts that failed to serve the poor promptly. Observing moneylenders charging over 700% annual interest to poor vegetable sellers, Ghosh launched Bandhan as an NGO in 2001, transitioned to an NBFC to escape grant dependency, and in 2015 became one of only 15 banks licensed since India's independence—the first in the underbanked East and North-East. This enabled deposit-taking, slashing lending rates from 22.4% to 18.52% and ballooning deposits from INR 12,089 crores in 2016 to INR 66,130 crores in 2020. Despite crises like Andhra Pradesh microfinance meltdown, demonetisation, GST, CAA protests, and COVID-19, Bandhan sustained a low gross NPA of 1.2%—better than many peers—by leveraging relationship-based lending, peer pressure as collateral, targeting women, and mobilizing urban funds for rural borrowers. As the 7th largest bank by market cap in 2020, it proves profitability and inclusion are compatible, subverting NPA risks via diversified microloans and due diligence. Markets, not state compulsion, drive sustainable financial inclusion for the unbanked.

**Key points:**

- Chandra Sekhar Ghosh built Bandhan from an NGO to India's 7th largest bank by market cap, pioneering universal banking in the underbanked East.
- By converting to a bank, Bandhan accessed deposits to cut microloan interest rates from 22.4% to 18.52% and grew deposits from INR 12,089 crores (2016) to INR 66,130 crores (2020).
- Bandhan achieved a gross NPA of 1.2% through relationship-driven microloans to women, using peer pressure as collateral, proving microfinance profitability serves the poor.
- Markets enable financial inclusion by combining profit incentives with outreach to unbanked regions, outperforming reluctant state-compelled banking.

**By Srinidhi R**

* * *

There has been much effort towards bringing financial inclusion in India. Much of these efforts came from the State, and the banking sector was mostly unwilling to serve the poor unless they were compelled to. Despite these attempts at financial inclusion, it was a goal whose materialisation was too remote in the future.

To fulfil the banking needs of the underserved and unserved in India, there was a candidate who arose to the endeavour and that candidate was Chandra Sekhar Ghosh. His story and that of Bandhan has much to offer for admiration. 

Chandra Sekhar Ghosh, born to a small sweet-shop owner in Tripura, started Bandhan as a not-for-profit operation and it now stands as the [7th largest bank in terms of market capitalisation](https://www.screener.in/company/BANDHANBNK/) (as of January 19, 2020). This journey from a not-for-profit microfinance operation to a universal bank is unique where the magic formula of combining profitability and inclusive financing was applied, and the balance between greed and idealism was found.

Ghosh hanged around Shobhabazar sabzi market and observed that moneylenders charged the poor vegetable-sellers an interest which amounted to [more than 700% per annum](https://www.youtube.com/watch?v=zFLwClwHLXA). With the insight (read as Eureka moment) that there was no alternative for these poor borrowers and armed with his experience at the BRAC, he resigned from his stable job and set out to start Bandhan with the motivation of serving the unbanked.  

Bandhan, as a microfinance entity, initially took form as an NGO.  To shed the constraints on growth and a dependence on grants, it later converted into a Non-Banking Financial Company (NBFC).  

Microfinance Institutions took a hit with the Andhra Pradesh crisis wherein criticisms were levelled that these entities charged exorbitant high interests. Bandhan was not left unaffected and its path through it involved the solution of taking Bandhan to the next level i.e. converting it into a bank. This was so that they can take deposits to reduce interest rate instead of relying on banks for their funds. With the implementation of this solution, [Bandhan reduced the interest rate from 22.4% to 18.52%.](https://www.youtube.com/watch?v=zFLwClwHLXA) This solution is further vindicated when it is seen that deposits rose from [INR 12, 089 crores in 2016](https://www.bandhanbank.com/pdf/Bandhan-Bank-AR-2016-17.pdf) to [INR 66,130 crores in 2020](https://www.bandhanbank.com/pdf/Investor-Presentation_Q2FY20-21.pdf).

The success of Bandhan’s remarkable conversion into a bank is further elevated by the fact that only fifteen banks have been given a banking license since India achieved independence. The bank is also the only one among the fifteen to have been set up in the East. This is significant as the East and the North-East are the most underbanked regions in India.

Bandhan’s journey has not been smooth sailing. It has faced challenge after challenge in the form of the unconducive business and political environment of West Bengal, the Andhra Pradesh crisis, the effects of GST on small-scale businesses, demonetisation, the CAA protests in Assam, the Herculean task of obtaining a banking license and the COVID-19 pandemic.  Still, Bandhan has continued in their path of financial inclusion while combining it with the seemingly contradictory incentive of profits.  

According to Tamal Bandyopadhyay, the author of ‘Bandhan: The Making of a Bank’, Bandhan has taken the conventional banking system head-on. It has changed traditional banking while competing on a seemingly exterior plane in which serving the banking needs of the poor was the epicentre. It took money from the urban and deployed it to the rural.  It went straight to its borrowers to save them travel and the loss of half a day’s labour. It targeted women. It mobilised the untapped capital of the unbanked. It made lending relationship-driven. It made peer-pressure as the collateral.

It is known that the Indian banking sector is plagued by Non-Performing Assets (NPAs) and microloans have additionally suffered the reputation of being risky. Subverting the expectations and that reputation, Bandhan Bank has sustained a [gross NPA of 1.2 %](https://www.bandhanbank.com/pdf/Investor-Presentation_Q2FY20-21.pdf) which is low even among the high-street banks. Inversely, the risk of NPAs may be reduced *due* to the nature of microloans which necessitates a widespread client-base. Of course, this requires due diligence without which the whole exercise would be moot. In this way, microloans and profits have come to be complimentary with the end-result being a robust business serving a large number of poor customers.  

Business and serving the poor can go together. The market is capable of driving financial inclusion. And Bandhan is testament to this.

*Read more: [Will work-from-home give a boost to female employment?](https://spontaneousorder.in/will-work-from-home-give-a-boost-to-female-employment/)*

* * *

**About Srinidhi R**

Srindhi R is currently a student pursuing law at the Tamil Nadu National Law University. She is interested in the history of liberal thought in India, and the understanding and application of liberal principles in the Indian context. In the future, she hopes to be a part of market-based solutions which also combines social outcomes.

## SO‌ ‌Basically‌ ‌Episode‌ ‌17:‌ ‌Padhai,‌ ‌Likhai‌ ‌aur‌ ‌National‌ ‌Education‌ ‌Policy

Original: https://www.spontaneousorder.in/p/so-basically-episode-17-padhai-likhai-aur-national-edu

Author: Spontaneous Order

Published: 2021-01-20T21:00:56.000Z

Topics: national-education-policy, school-education, education-reform, classical-liberalism

> The National Education Policy 2020 imagines a radical restructuring of the regulatory framework governing school education in India. In this episode of SO Basically, we’ll talk about the reforms that the NEP brings with it, and their potential to change

**Summary:**

This short promotional post announces SO Basically Episode 17, which examines the National Education Policy 2020's radical restructuring of India's school education regulatory framework from a classical-liberal viewpoint. It teases the episode's discussion of NEP reforms and their potential to transform the education landscape, aligning with Spontaneous Order's mission to critique pseudo-socialism through liberal ideas drawn from modern Indian history and native political dynamics.

**Key points:**

- NEP 2020 proposes a radical restructuring of school education regulation in India.
- The episode explores NEP reforms' potential to change India's education landscape.
- Spontaneous Order promotes classical-liberal perspectives against pseudo-socialism.

**By Spontaneous Order**

* * *

The National Education Policy 2020 imagines a radical restructuring of the regulatory framework governing school education in India. In this episode of [SO Basically](https://www.youtube.com/playlist?list=PLysF1qZYkiGFX32APX8-p6AeOnev7InjZ), we’ll talk about the reforms that the NEP brings with it, and their potential to change India’s education landscape.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Will work-from-home give a boost to female employment?

Original: https://www.spontaneousorder.in/p/will-work-from-home-give-a-boost-to-female-employment

Author: Spontaneous Order

Published: 2021-01-19T11:31:03.000Z

Topics: work-from-home, female-labour-participation, demographic-dividend, gender-norms

> The Covid pandemic will change the world permanently in many ways. Most obviously, people will increasingly work from home. Workplaces will not disappear, but an increasing share of work will be done at home. This will save employers office space and an..

**Summary:**

The Covid-induced shift to work-from-home (WFH) could permanently reverse India's plummeting female labour-force participation rate (FLPR), which crashed from 33% in the early 1990s to 25% per government data or 11-12% per CMIE surveys, dragging the overall participation rate from 50% a decade ago to a pathetic 41%. While rising education keeps more girls in school—a positive for the long run—deep social and cultural factors, especially in a Muslim-influenced belt from north Africa to north India affecting Hindu culture, view outside work for women as unsafe and stigmatizing, with families prioritizing status by keeping them home amid falling poverty and rising wages. Urban FLPR remains abysmal at 16%, and farm mechanization has cut rural group work. WFH via Zoom and tele-conferencing allows women to work on par with men without commuting risks, molestation fears, or 'badnami', enabling family chores and servant hiring. The author urges permanently abolishing obsolete telecom rules suspended for Covid and subsidizing firms hiring women for WFH to harness the demographic dividend, boost GDP like Asian miracles, and challenge entrenched culture.

**Key points:**

- India's FLPR has fallen to 11-12%, lowering overall labour participation to 41% and squandering the demographic dividend.
- Cultural norms in north India, influenced by Islamic traditions, deem women's outside work unsafe and status-lowering.
- WFH eliminates commuting hazards and stigma, enabling women to work productively from home alongside family duties.
- Government must abolish outdated telecom rules and subsidize companies hiring women for WFH to reverse the trend.

**By Swaminathan SA Aiyer**

* * *

The Covid pandemic will change the world permanently in many ways. Most obviously, people will increasingly work from home. Workplaces will not disappear, but an increasing share of work will be done at home.

This will save employers office space and ancillary facilities. It will save employees money, time, and hassle in commuting to work. It will slash the need for meetings of every sort. More people will be available for part-time work or piecework from home, boosting productivity.

In India, working from home could finally reverse the dramatic crash in the female labour-force participation rate (FLPR). In rich countries, two-thirds of women above the age of 15 work, increasing incomes and living standards. In every Asian miracle economy, a rising FLPR enabled GDP growth to exceed 7%.

The one exception is India, where the FLPR has fallen from 33% in the early 1990s to just 25% according to government data, and to as little as 11-12% according to surveys of the Centre for Monitoring the Indian Economy. The CMIE figure looks too bad to be true. Maybe Covid has made it even more unsafe for women to leave home to work.

The FLPR crash means India’s overall labour participation rate, for men and women, has been falling. This is the very opposite of the increase that a demographic dividend was supposed to give India. The total participation rate was around 50% a decade ago, but fell to 43% in 2019-20, fell further with Covid, and has revived slightly to a still pathetic 41%. Male participation has been more or less constant, but female participation has crashed, lowering the national average.

Why so? One encouraging reason is that a greater proportion of girls in the 15-25 age group are now in school and college instead of the fields. The same is true of boys of 15-25 years. This is good for the long run, though the quality of education must be upgraded.

But female participation has also fallen in every other age group from 25 to 65, above all in agriculture. In urban areas, the FLPR has always been among the lowest in the world at around 16%. It has shrunk a bit despite rising female education. The boom in college-going girls has not translated into a boom in urban jobs for females.

Deep social reasons explain this. A global map displaying female participation will show that by far the lowest rates lie in a mostly Muslim belt stretching from Morocco across north Africa and the Middle East to north India. The Islamic culture that discourages female education, employment and outside work has affected north Indian Hindu culture too. I have seen microfinance groups in UP where every woman covered her face with her pallu, very unlike the open faces you see in Kerala or Tamil Nadu.

In north India, women are considered fair prey for men if they roam outside their houses, especially at late hours. They are not supposed to complain of molestation for fear of “badnami”, a slur on their reputation. In rural India, women (especially Dalits) transplant rice and harvest crops in groups and feel reasonably safe. But farm mechanisation has slashed such work.

Once, poor families perforce sent women to work to earn cash. But now with falling poverty, rising wages and remittances from urban relatives, many rural families keep their young women at home as a status symbol. Chandra Bhan Prasad, a Dalit scholar, says that families whose girls work in the fields get only low-quality sons-in-law, so keeping women at home improves both status and marriage-related prosperity. Thus, the social roots of low female participation run very deep and cannot easily be removed.

What might just change this culture is the ability to work from home. Zoom, Google groups and other tele-conferencing facilities now mean that women can work from home on par with men, with no social stigma or lack of safety. They do not have to leave home and face molestation or “badnami.” Zoom slashes commuting time and can make it feasible for women to do both office and family chores. Besides, working from home can provide enough income to hire servants.

Obsolete laws had earlier made it difficult for IT firms to get the telecom clearances needed for creating efficient network working from home. Luckily, those rules were suspended because of Covid and should be abolished permanently. Women now outnumber men in colleges, and this needs reflection in urban hiring. The government should consider subsidising companies hiring women to work from home, since this increases the demographic dividend and helps society overall. We must change the terrible culture that keeps women at home, out of the workforce.

*This article was originally published in the [Times of India](https://timesofindia.indiatimes.com/blogs/Swaminomics/will-work-from-home-give-a-boost-to-female-employment/) on January 11, 2021.*

*Read more: [The answer to India’s food security woes](https://spontaneousorder.in/the-answer-to-indias-food-security-woes/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## The answer to India’s food security woes

Original: https://www.spontaneousorder.in/p/the-answer-to-indias-food-security-woes

Author: Spontaneous Order

Published: 2021-01-18T17:24:40.000Z

Topics: food-security, supply-chains, market-based-interventions, smallholder-farmers

> 2020 marked a disastrous year for food security. The pandemic and the ensuing lockdown have brought on an unprecedented food crisis, exacerbated by geopolitical conflicts, socio-economic inequalities, climate change and pollution. Globally, before the p..

**Summary:**

India's food security crisis during the 2020 pandemic stemmed not from production shortfalls—record foodgrain output reached 296.65 million tonnes in 2019-20, surpassing estimates, with FCI stocks at 81.66 million tonnes in June 2020 sufficient until March 2021—but from supply chain disruptions, export restrictions, income losses, and access barriers. Government in-kind interventions like PM-GKAY (321 lakh tonnes allocated) and NFSA expansions provided staples to 69 crore beneficiaries via One Nation One Ration Card, yet failed to address nutritional diversity, as perishable sectors like poultry (Rs 22,500 crore losses), dairy (20-25% milk demand drop), and fruits/vegetables suffered from demand crashes and transport halts. From a classical-liberal viewpoint, these welfare measures distort markets and offer unsustainable relief, ignoring root causes in market functionality. The author advocates market-based programming: cash/voucher assistance to boost purchasing power, support for all market players (farmers, traders, transporters), and prioritization of small-scale farmers' short value chains for resilient, localized, nutritionally diverse supply. This approach would stabilize availability, access, utilization, and stability, fostering sustainable rural livelihoods over symptomatic government handouts.

**Key points:**

- India achieved record foodgrain production of 296.65 million tonnes in 2019-20 amid ample FCI stocks, proving no supply shortage.
- Pandemic lockdowns disrupted supply chains and perishable food sectors, causing massive losses like Rs 22,500 crore in poultry, while in-kind aid failed to ensure nutritional security.
- Market-based solutions, including cash transfers and support for small-scale farmers' local value chains, are essential to restore food market systems and access.
- Government should aid all market players—producers, traders, transporters—and promote short value chains over distortive welfare distributions.

**By Swati Rao**

* * *

2020 marked a disastrous year for food security. The pandemic and the ensuing lockdown have brought on an unprecedented food crisis, exacerbated by geopolitical conflicts, socio-economic inequalities, climate change and pollution. Globally, before the pandemic, [900 million](https://www.latinamerica.undp.org/content/rblac/en/home/blog/2020/la-seguridad-alimentaria-frente-a-la-pandemia-del-covid-19.html) people lacked access to adequate and sufficient food, out of which [150 million](https://www.latinamerica.undp.org/content/rblac/en/home/blog/2020/la-seguridad-alimentaria-frente-a-la-pandemia-del-covid-19.html) suffered from severe food deficiencies.

The key to food security is [continuous and systematic access to food](https://www.latinamerica.undp.org/content/rblac/en/home/blog/2020/la-seguridad-alimentaria-frente-a-la-pandemia-del-covid-19.html). [Food security](https://www.wfp.org/publications/2020-global-report-food-crises) necessitates that food be both consistently available and accessible in sufficient quantities and diversity, and households must be able to utilize (store, cook, prepare and share) the food in a way that has a positive nutritional impact. Since the [2020 staples harvest has been promising](https://docs.wfp.org/api/documents/WFP-0000114546/download/?_ga=2.139469811.1124362981.1609166547-1764537380.1609166547), the pandemic has caused very little dent in global food supply and global food prices. The global grain market has witnessed a price rice of only [10%](https://www.worldbank.org/en/topic/agriculture/brief/food-security-and-covid-19) between January to December 2020. Experts agree that the present food security crisis does not stem from issues with food production, as much as its availability and people’s capacity to access it. 

The food security crisis during the pandemic is a direct result of disruptions in food supply chains, export and import restrictions as well as the loss of incomes, employment and remittances. Movement restrictions, intended to halt the spread of the virus, have interfered with the availability of inputs (fertilizers, pesticides, tools, cattle feed etc.) and manpower required for processing and transport of food. This in turn has made it difficult for producers to access agricultural markets, thereby impacting the availability of even basic commodities in the open market. Protectionist policies of tariff barriers, quotas and border closures have added to the woes of the supply chain. With reduced purchasing power due to unemployment and under-employment, as well as as movement restrictions, people are further prevented from accessing the food markets. 

In India, the Department of Agriculture, Cooperation and Farmers Welfare estimated that the production of crops for the agriculture year 2019-20 would be higher than normal. According to the [2nd Advance Estimates](https://pib.gov.in/PressReleasePage.aspx?PRID=1603539#:~:text=Oilseeds%20%E2%80%93%2034.19%20million%20tonnes.&text=As%20per%20Second%20Advance%20Estimates,tonnes%20achieved%20during%202018%2D19.), total foodgrain production during 2019-20 was estimated to be 291 million tonnes, higher by 26.20 million tonnes than the average of the previous five years (2013-14 to 2017-18).

[

![](https://lh3.googleusercontent.com/-C4_vMMM0nJzRN72520eID9od_vCLjB3qVXVDTDcVP9VvaOTU3BFlk-RbfGnKzF8ADMQ3315OJbJ70FunoK3g_9Q8MMAHEJWQnBtbDf-iWjh6MaY6VILfvfgCwnrja0a31WG0gFQ)



](https://lh3.googleusercontent.com/-C4_vMMM0nJzRN72520eID9od_vCLjB3qVXVDTDcVP9VvaOTU3BFlk-RbfGnKzF8ADMQ3315OJbJ70FunoK3g_9Q8MMAHEJWQnBtbDf-iWjh6MaY6VILfvfgCwnrja0a31WG0gFQ)

  Source: [Second Advance Estimates 2019-20](https://static.pib.gov.in/WriteReadData/userfiles/Time%20.pdf)

Above average rainfall, timely sowing and innovations in irrigation ensured that we were able to surpass the 2nd Advance Estimates 2019-20 with a record foodgrain production of [296.65 million tonnes](https://timesofindia.indiatimes.com/business/india-business/government-sets-foodgrain-output-target-at-record-301-million-tonnes-for-2020-21/articleshow/78236298.cms). As per [First Advance Estimates for Kharif season 2020-21](https://pib.gov.in/PressReleseDetailm.aspx?PRID=1657839), total foodgrain production is estimated at 144.52 million tonnes, higher than than the average foodgrain production of the previous five years by 9.83 million tonnes. Owing to this bump in production, India has a surplus of staple foodgrains.  

The Food Corporation of India (FCI) is mandated to conduct large-scale procurement of food, with the objective of maintaining stocks in the Central Pool towards meeting the requirements of various welfare schemes. As of June 2020, FCI had [816.60 lakh tonnes](https://www.outlookindia.com/newsscroll/fcis-foodgrains-buffer-stocks-at-81660-lakh-tonnes/1880965) of foodgrains, with the FCI Chief even estimating that the stock is adequate to [meet demands till March 2021](https://www.thehindu.com/news/national/foodgrain-stock-will-last-till-next-march-says-fci-chief/article31427695.ece). By 1st September 2020, FCI was stocking [478.32 and 221.95 lakh tonnes of wheat and rice](https://pib.gov.in/PressReleasePage.aspx?PRID=1656292) respectively. 

Before the pandemic, the National Food Security Act and other welfare schemes required over 55 lakh tonnes of foodgrains every month. In light of the loss of income and employment brought on by the pandemic, the government had to make allocations to the tune of [680 lakh tonnes](https://pib.gov.in/PressReleasePage.aspx?PRID=1684317) to supplement entitlements under NFSA. While [350 lakh tonnes](https://pib.gov.in/PressReleasePage.aspx?PRID=1684317) were allocated to states for distribution under NFSA, [321 lakh tonnes](https://pib.gov.in/PressReleasePage.aspx?PRID=1684317) were allocated for distribution under Pradhan Mantri Garib Kalyan Anna Yojana (PM-GKAY) and [8 lakh tonnes](https://pib.gov.in/PressReleasePage.aspx?PRID=1684317) under Atma Nirbhar Bharat Scheme (ANBS).

Under PM-GKAY, foodgrain entitlements of 5 Kg/person/month were distributed to all NFSA beneficiaries from April to November 2020. Similarly under ANBS, 5 Kg foodgrains/person/month were given to migrants, stranded migrants and those without ration cards from May to June 2020, as a result of which around [2.74 crore people](https://pib.gov.in/PressReleasePage.aspx?PRID=1684317) received rations. To ease identification of migrant beneficiaries, the government also expanded its One Nation One Card initiative, which now covers [32 states and union territories, and 69 crore beneficiaries](https://pib.gov.in/PressReleasePage.aspx?PRID=1684317).

Perhaps unsurprisingly, adequate availability of foodgrains during the pandemic was not sufficient to deter food insecurity in a large section of the population, particularly the poor and most vulnerable. Since [nutritional security](http://www.fao.org/3/y4671e/y4671e06.htm), an important component of food security, cannot be achieved through rice, wheat and pulses alone, the impact of the pandemic on the supply, availability and accessibility of perishable foods has had an important role to play. 

-   Rumours linking eggs, meat and poultry to the virus led to a massive fall in demands. Along with restrictions on inter-state transportation, this has led to a loss of [Rs 22500 crores](https://www.outlookindia.com/newsscroll/covid19-outbreak-poultry-sector-faces-rs-225k-crore-loss/1790419) for the poultry industry since the lockdown. 
    
-   Much like poultry, the dairy and animal husbandry industry has also suffered with demand for milk falling by [20–25 percent](https://thewire.in/agriculture/india-covid-19-dairy-farmers-milk-production). While the cooperatives continued to procure milk, many private dairies and informal milkmen sharply reduced purchase of milk. 
    
-   Farmers who produce fruits and vegetables, have suffered massive losses because of disruption of exports as well as fall in domestic demand and market prices. Farmers of excotic vegetables in Haryana, who sold [bell peppers, broccoli etc.](https://livewire.thewire.in/rights/how-farmers-are-adjusting-to-the-new-normal-a-view-from-haryana/) to restaurants, had to sell their produce at huge losses. 
    

It would not be a stretch to say that in-kind interventions have done little to combat food insecurity, both before the crisis and during it. When millions go hungry each day, it is hard to argue that the government should not be providing them food. However, these interventions have not only failed to meet the needs of the population, but have also generated temporary and unsustainable supply that distorts the market. Therefore, it becomes necessary to engage with the food market system, understand the role of all market players and assist them to improve their ability to cope and recover. 

Market-based programming, focussing on the impact of the pandemic on critical food market systems, can be an effective solution. This can take the form of cash based assistance, through conditional or unconditional cash, mobile money, voucher systems and cash-for work etc., but does not need to be limited to it. Indirect assistance, by supporting farmers, promoting agribusinesses and value chain approaches, focusing on cooperatives and promoting local markets, [has been successful in the past](https://knowledge4food.net/wp-content/uploads/2020/04/aid-transition_quick-scan_report02.pdf). An often overlooked aspect of market based approach is supporting market players like traders, larger suppliers, financial service providers and large retailers etc. that are usually considered immune to economic shocks.

While lockdown restrictions accommodated exceptions for agricultural activities, inter-state movement of agricultural equipment and manufacturing activities of agricultural inputs, small scale farmers were heavily impacted by the lack of labor supply, equipment and inputs at the local level and by states’ poor pre-existing agricultural market arrangements. [Small-scale farmers](https://www.ifad.org/en/web/latest/story/asset/42208116) serve predominantly domestic and local markets, overriding the need for complex transport mechanisms and supply chains when inter-state and inter-district trade is compromised. Their produce is better equipped to fulfil the [dietary and nutritional diversity requirements of the local population](https://www.ifad.org/en/web/latest/blog/asset/41903536). Additionally, with localized environmental knowledge and dependence on the land, they are likely to resort to more environmentally sustainable farming practises.

If small scale farmers had been put at the forefront, India’s food market system would have been better equipped to survive the pandemic today. A major thrust of the government’s solution should be on protecting short value chains. Promoting local and homegrown food, facilitating local value chains, informal markets, local market linkages and ICT based distributions would go a long way in overcoming disruptions to formal food supply chains. 

[Market based programming](https://fscluster.org/sites/default/files/documents/key_recommendations_to_support_food_market_systems_facing_covid.pdf) would deploy a two-fold approach to tackle food insecurity during the pandemic. Firstly, through aiding the food market system by supporting a wide variety of market players like input suppliers, producers, laborers, traders/wholesalers, retailers and market workers, transporters, street vendors and restaurant owners.  Secondly, enhancing the purchasing power of consumers, and as a result their ability to access food, through cash based interventions. 

The pandemic has disrupted the food market system in the country and all four dimensions of food security, [availability, access, stability, and utilization,](http://www.fao.org/elearning/Course/FC/en/pdf/trainerresources/learnernotes0411.pdf) have been impacted.  The government’s policy of providing in-kind support to consumers is a half-hearted attempt at targeting the symptoms and not the root cause. The situation calls for remedies that support the food market systems and its key market players to tide over the economic shocks of the pandemic. Flourishing small-scale farmers can offer local solutions to the food insecurity faced by their communities, while enriching the quality of rural lives and livelihoods.

*Read more: [Laws alone are insufficient to tackle gender-based violence](https://spontaneousorder.in/laws-alone-are-insufficient-to-tackle-gender-based-violence/)*

* * *

**About Swati Rao**

Swati Rao is Assistant Manager, Advocacy at Centre for Civil Society. Previously, she has worked for the US Department of State, Swaniti Initiative in India, and holds an Erasmus Mundus Masters in Public Policy and B.A. LL.B (Hons) from Hidayatullah National Law University, Raipur.

## Laws alone are insufficient to tackle gender-based violence

Original: https://www.spontaneousorder.in/p/laws-alone-are-insufficient-to-tackle-gender-based-violence

Author: Spontaneous Order

Published: 2021-01-15T12:15:17.000Z

Topics: gender-based-violence, ngo-collaboration, women-empowerment, patriarchy

> During the ongoing COVID19 pandemic, the World Bank referred to gender-based violence as a global pandemic that affects 1 out of 3 women in their lifetime. Yet, this invisible pandemic is not novel and it is ever-present in our society, the consequences..

**Summary:**

Laws alone cannot eradicate gender-based violence, as patriarchal norms are deeply internalized by young girls in Delhi's unauthorized colonies, leading them to accept school dropout after ninth grade due to puberty-related 'safety' concerns and domestic roles, confessing marriage as their only future milestone. World Bank data highlights 1 in 3 women face lifetime GBV, yet girls lack even mobile phones to access helplines, underscoring cultural barriers beyond legal fixes. From a classical-liberal lens, government lacks cultural reach; flexible civil society NGOs like Shakti Shalini excel via community outreach in six Southeast Delhi localities, sensitizing men and women, imparting skills for autonomy, and prioritizing agency in line with feminist empowerment focusing on awareness, self-reliance, and decision-making. Unlike bureaucratic government shelters—obsessed with rescue stats, offering band-aid rehab with poor facilities, rigid hierarchies stifling innovation—Shakti Shalini provides family-like environments, unlimited rehab timelines, and staff autonomy mirroring resident empowerment. Critiquing Beti Bachao Beti Padhao for spending 65-90% funds on publicity since 2016 (<5% on education/health), the author urges government-NGO collaboration preserving NGOs' non-legalistic agility to unlearn patriarchy, unleashing women's potential for Atmanirbhar Bharat self-reliance.

**Key points:**

- Laws fail against internalized patriarchal norms causing girls' school dropout and submissiveness in Delhi slums.
- NGOs like Shakti Shalini outperform government via flexible outreach, skill-building, and autonomy-respecting culture, unlike stats-driven, rigid state shelters.
- Government schemes like Beti Bachao Beti Padhao waste 65-90% funds on ads, neglecting actual interventions.
- Classical-liberal solution: government partner with civil society to culturally shift norms for women's agency and national self-reliance.

**By Upasha Kumari**

* * *

During the ongoing COVID19 pandemic, the World Bank referred to [gender-based](https://www.worldbank.org/en/topic/socialsustainability/brief/violence-against-women-and-girls) violence as a global pandemic that affects 1 out of 3 women in their lifetime. Yet, this invisible pandemic is not novel and it is ever-present in our society, the consequences of which affect women’s right to live with dignity and access to opportunities.  In February and March, I visited some unauthorized colonies in Nehru Nagar, South East Delhi, to conduct the fieldwork for my dissertation. My work primarily focused on understanding the role of NGOs in addressing gender-based violence against women. My research involved interactions with women and girls to understand the problems faced by them on account of their gender. While alcoholism and domestic violence were some serious issues that impacted a few women, what struck me the most was the internalization of the patriarchal ideology by young girls of 15 years old. It seemed that they had given up all hopes of attending school and making a career for themselves. Three of the girls with whom I interacted in the Adivasi Camp – Shreya, Babita and Guddi (names changed) shared their dreams of becoming a dancer, a singer and a fashion designer respectively. They confessed that by virtue of being female, they could not attend school beyond ninth grade. Further, they agreed with their families that girls do not need to acquire education as they mostly have to stay indoors and perform household chores. One does not need to guess that their withdrawal from school was due to their families’ concern for their ‘safety’, mainly because these girls have attained puberty. They confessed that the only exciting event in their future would be their marriage and they had no choice but to give in to their parents’ wishes. The sheer submissiveness of these young girls made me realize that there exist two worlds in the national capital and the rift between the two is alarming and even shameful.

A pertinent question that must arise in our minds is that if even today young girls are not able to complete their schooling then how would the vision of our Prime Minister of creating an ‘*Atmanirbhar Bharat’* be fulfilled? Self-reliance requires the development of one’s full potential so that we can reduce our dependence on others. Women are not only the untapped resource of the nation, but they are human beings first who are entitled to a dignified life. The girls in the Adivasi camp coolly shared that they do not use mobile phones by virtue of being female. One of them shared- *“Hum bahar jaate nahi, hum kyu mobile phone rakhe? Koi zaroorat nahi hain. Hum ladki hain*” (We do not go outdoors. Why should we keep mobile phones with us? We don’t need it. We are girls.) One must wonder that in such a scenario when girls and women do not even have access to mobile phones, how can they seek help from domestic violence helplines in the event of abuse or violence.

Laws alone cannot guarantee a gender-just society. We need to explore avenues of collaboration with civil society members and organizations which can engage with the people to discuss these social issues and help them unlearn patriarchal norms and values. In my research, I have analyzed the critical work done by grassroots NGOs for women through a case study of NGO Shakti Shalini, which is working with these communities. The government has limited access when it comes to the domain of culture, and for this reason, NGOs can operate as outreach workers of the government. This collaboration will only succeed if NGOs continue to stay true to their flexible nature of working, which is different from the legalistic and formalistic approach of the government. 

NGO Shakti Shalini carries out its Community Outreach Program in six localities in South East Delhi district. It refers to these localities as “communities” which encompasses marginalized sections of society with poor income background. Their social status largely determines their life course. In my understanding, the NGO uses the term “communities” to refer to the localities where it works because it strives to create solidarity within and among families so that they realize their common concerns and work towards eradicating them collectively. The term, therefore, is very uplifting because it gives power to the people. The concept of power as conceptualized by Hannah Arendt identifies the people and not the government as the locus of power. Power here has a positive connotation and it refers to “collective will” of the people. The organization prioritizes the role of choice and agency while addressing different types of violence faced by women in these communities. Through these programs it aims to sensitize and educate not just the women but the menfolk too. It also focuses on imparting various skills to women so that they can lead an independent life. It adopts a feminist approach towards women empowerment that focus on increasing [“awareness, autonomy, self-reliance, rights, engagement in decision-making process, capacity building, and certain level of power”.](https://journals.sagepub.com/doi/10.1177/0019556120140317)  

Some staff members who were previously working with the government in the social sector shared that NGOs and other government-led organizations operate by different goals and values. For instance, a member shared that government-run organizations are motivated by data collection of the number of victims they rescued and rehabilitated and they ignore the needs of the victims after they are sent to shelter homes. Therefore, their work does not aim to correct the root cause of the problem but merely offer a band-aid solution. A possible reason behind this could be that the work done by these organizations is often linked with the performance of the government; this could partially justify their obsession with statistics. Further, they do not put enough emphasis on preventive measures to stop violence against women. Further, their impact is limited as they have to follow standard rules for all cases. They have a very formal work culture, and strict hierarchy is observed which makes it very difficult for the staff and interns in government-run shelter homes to come out of their comfort zone and present a new idea. As a result, the skills and potential of the staff members are not utilized and their autonomy is not respected. However, the work culture in private NGOs is starkly different. The staff of Shakti Shalini shared that there is a feeling of equality and empathy among all the members. This enables the team members to exercise considerable autonomy in introducing new ideas and thus they feel empowered in their job. The interns shared that since they got in touch with this organization, they have always felt free to choose a project of their choice and to carry any workshop or activity in the communities or in the shelter home as long as it benefits the people and it aligns with the goals of the organization. On the contrary, members of government-run shelter home do not experience this sense of autonomy and empowerment. As Shakti Shalini works towards ending violence against women, they are very particular about not being even remotely violent towards any other person and thus, for this reason, they ensure that the autonomy of its team members does not get violated or their rights are not taken away in the process. It was also shared that Shakti Shalini follows a humanitarian approach and it puts the needs of the victim first. 

Further, vast differences exist in the facilities provided in shelter homes run by NGOs and those run by the government. In ‘Pehchan’ the shelter home of Shakti Shalini people receive decent household facilities and they enjoy considerable freedom which creates a conducive environment for their growth. Even in situations of low funds, there is no drastic change in the lifestyle of the residents as they always live a simple and sustainable life and the funds are managed well by the organization.  Some of the inhabitants of the shelter home shared that in government-run shelter homes, women do not even have access to a fridge nor can they eat as per their wish. An example was given of one such shelter home, where the food served in fixed quantities is collected from a small window outside the kitchen and women residents take the plate to their rooms to eat. But in Shakti Shalini, everyone participates in the cooking process and they sit together and eat like a family. There is also no rule about how many servings a person can take. Another difference brought out was in the rehabilitation process of NGOs and those of government-run shelter homes. The latter enrol a person in the shelter home for a short term period of three months or the recommendation of the concerned courts and then renews the permission by exercising their discretion. However, there is no time limit for the rehabilitation process in Shakti Shalini. This is a very pragmatic policy as it is difficult to ascertain beforehand how long the rehabilitation process will take for any individual. Thus, they are sensitive to the needs of the victims which includes: a stable home, emotional wellbeing and a friendly environment.

While the government has launched several campaigns and schemes to promote the education of girls, however, the experiences of the girls in these colonies show that these schemes have not benefited them. One can critically assess the *Beti Bachao, Beti Padhao* campaign in which the [government has spent between 65 per cent to 90 per cent of the total funds issued on publicity alone since 2016 and only less than 5 per cent of funds were used for interventions in the education and health sector](https://thewire.in/women/beti-bachao-beti-padhao-advertisement-money). The likes of Sherya, Babita and Guddi, exist all across our country. If in spite of living in the national capital girls face these challenges, then one should shudder at the thought of how much control do girls in other parts of the country exercise over their lives. Gender discrimination not only deprives women of leading a dignified life based on their terms, but it is also a significant impediment to achieving overall prosperity and development of the country. While the Republic dreams of becoming self-reliant, we must realize the crucial role of gender justice and a sound model of development in achieving this goal.

genderRead more: [The Growing Burden of Child Malnutrition in India](https://spontaneousorder.in/the-growing-burden-of-child-malnutrition-in-india/)

* * *

**About Upasha Kumari**

Upasha has pursued her Bachelor's in Political Science from Lady Shri Ram College for Women, University of Delhi. She's currently a final year student at the Department of Political Science in the same university. Her key interest areas include development issues, public policy, gender, and Indian government and politics.

## Resolving disputes under the farm laws

Original: https://www.spontaneousorder.in/p/resolving-disputes-under-the-farm-laws

Author: Spontaneous Order

Published: 2021-01-11T15:25:26.000Z

Topics: farm-laws, alternative-dispute-resolution, agriculture-reform, judicial-pendency

> The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act 2020 and the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act 2020 (FPTC Act) both contain a unique dispute resolution mechanism where which

**Summary:**

The farm laws of 2020 introduce conciliation boards appointed by Sub-Divisional Magistrates (SDMs) for resolving disputes between farmers and traders, aiming for settlements within 30 days, with appeals to Collectors and ultimate recourse to High Courts and Supreme Court, bypassing overburdened civil courts with 38.87 million pending cases. Critics fear executive overreach and exploitation without judicial oversight, prompting government offers to revert to courts, but the author argues this undermines efficient Alternative Dispute Resolution (ADR), endorsed by Supreme Court precedents like Afcons Infrastructure and statutory frameworks. Indian judiciary's delays, corruption at district levels, and high costs disadvantage small farmers, while ADR offers participatory, speedy, cost-effective justice with negotiable compensations. Conciliation levels the field, protects sharecroppers, enforces payments, and avoids land ownership shifts to traders. Instead of repeal, government should build ADR legitimacy via awareness campaigns, mediator training, digitization, and enforceability. Propose opt-in ADR with civil court fallback, as voluntary participation enhances efficacy per global evidence, aligning with classical-liberal emphasis on pragmatic, market-enabling reforms over rigid judicial monopoly.

**Key points:**

- Farm laws mandate SDM-appointed conciliation boards with equal representation for disputes, targeting resolution in 30 days to sidestep 38.87 million court backlogs.
- ADR provides faster, cheaper justice than corrupt, delayed courts, enabling farmers to negotiate compensations unavailable in litigation.
- Address skepticism by promoting awareness, capacity-building for conciliators, digitization, and transparent enforcement of ADR processes.
- Adopt opt-in ADR with civil court recourse if conciliation fails, leveraging voluntary buy-in for effectiveness as shown internationally.
- Retain farm laws' ADR to empower small farmers with participatory dispute resolution rather than yielding to protests.

**By Swati Rao**

* * *

The [Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act 2020](http://egazette.nic.in/WriteReadData/2020/222040.pdf) and the [Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act 2020](http://egazette.nic.in/WriteReadData/2020/222039.pdf) (FPTC Act) both contain a unique dispute resolution mechanism where which any disputes under the Acts are to be settled by conciliation boards. The opposition to this provision is premised on the fear that without recourse to civil courts, farmers are likely to be exploited in the process. In an attempt to appease the farm laws’ protestors, the government has offered to roll back this provision, and bring disputes under the jurisdiction of civil courts. However, instead of rescinding the provision under pressure, the government should prioritize fostering legitimacy in the Alternative Dispute Resolution (ADR) process and getting the farmers’ buy in.

Alternative Dispute Resolution refers to a set of techniques or approaches that provide an alternative to the formal legal path to justice through conciliation, arbitration, mediation etc. These approaches are aimed towards more efficient, less costly, and more satisfying resolution of conflicts. Most rely on a neutral third-party to hear arguments from both sides and make decisions.

Government’s willingness to rollback the conciliation provisions is not surprising because in the Indian context, ADR as a conflict-resolution mechanism might have received legal recognition but it is yet to be widely practised. With around 38.87 million cases currently pending before the District Courts according to the [e-Courts website](https://ecourts.gov.in/ecourts_home/), the formal legal system is currently ill equipped. The pandemic and the resulting lockdown have further burdened judicial modes of dispute resolution, thereby exacerbating the existing problem of pendency of cases. The Chief Justice of India has [emphasised on mediation, both pre and post litigation](https://economictimes.indiatimes.com/news/politics-and-nation/there-will-be-flood-of-pending-cases-post-covid-mediation-needs-to-be-emphasised-cji/articleshow/78077676.cms?from=mdr), as an effective tool to address the backlog of cases pending before the courts during the pandemic. 

In the past, the Supreme Court has been a flagbearer of ADR. In [Afcons Infrastructure v. Cherian Varkey Construction](https://indiankanoon.org/doc/1875345/), it emphasised the importance of ADR in commercial and consumer disputes, matrimonial disputes and matters of tortuous liability. Section 89 of the Code of Civil Procedure, 1908 and the Arbitration and Conciliation Act, 1996 provide statutory reference to ADR. Additionally, Section 20(1) of the Legal Services Authorities Act 1987, provides for reference to Lok Adalats. A study analysing the [efficacy of ADR in Delhi, Mumbai and Bangalore](http://ghconline.gov.in/library/document/conference2728072018/II1ADR%20Status_Effectiveness%20Study.pdf) concluded that while ad hoc arbitration has not been a success, other methods such as mediation, conciliation and Lok Adalats are developing on the right track. 

In an attempt to bring an ADR approach to dispute resolution in the interest of speedy justice, both the farm laws provide for an executive driven conciliation mechanism. Under the FPTC Act, disputes between farmers and traders are to be referred to a conciliation board appointed by the Sub-Divisional Magistrate (SDM). The SDM has to ensure that both parties are equally represented on the conciliation board. If the Board is unable to arrive at a settlement within 30 days, the SDM is authorized to decide the case. Appellate authority lies with the Collector, but not with civil courts, hence circumventing the judicial process.  

The [Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Rules 2020](http://www.bareactslive.com/ACA/act3681.htm), released in October 2020, requires every farming agreement to provide for a conciliation process and conciliation board, in the absence of which the SDM is authorised to appoint the board. Similar to the FPTC Act, the SDM has authority to pass a settlement order if the conciliation board fails to do so within 30 days and the appellate authority lies with the Collector. The Price Assurance Act also provides safeguards for farmers by creating payment obligations on traders, protecting rights of  sharecroppers, and disallowing the traders from taking ownership of or permanently modifying the farmer’s land.

Critics of this dispute settlement process believe that overreliance on the executive by circumventing the jurisdiction of civil courts [dilutes the authority of the judiciary](https://www.livelaw.in/columns/farm-laws-diluting-dispute-resolution-mechanism-167061). This argument is often used to discredit ADR as an alternative approach to justice, with some scholars going as far as claiming that the popularity of ADR causes a [rule of law issue](https://www.ucl.ac.uk/laws/sites/laws/files/36th-f-a-mann-lecture-19.11.12-professor-hazel-genn.pdf). Overriding the jurisdiction of civil courts is not unique to these two laws, with statutes like the Income Tax Act, Rent Control Laws, Companies Act etc. containing similar provisions. However, neither of the farm laws precludes the parties from challenging the decision of the SDM before the [High Courts and the Supreme Court](https://indianexpress.com/article/explained/explained-in-farm-laws-the-dispute-settlement-provision-govt-has-offered-to-roll-back-7106606/). 

It is important to acknowledge that the judiciary alone can not deal with all the cases that are currently pending in our country. Consequently, cases filed usually take years to be brought before the district courts, by which time the litigant has already suffered a great deal of financial loss and mental anguish. The judicial process is dragged on for years, with hearing dates postponed for nefarious reasons. While those with means can use bribes to speed up the process and get favorable decisions, the system has now developed in a way that predisposes poor and vulnerable people to being denied speedy and effective justice. 

Conciliation, as envisaged under the farm laws, has the potential to be a more participatory mechanism offering a level playing field to both farmers and traders alike. It would encourage a just result, where the control of the result is in the hands of the parties and not the lawyers or the judges. This could finally give small farmers a chance to reach a solution that is beneficial and agreeable to them. Since the conciliation board will be set up for the sole purpose of resolving the dispute, it will be in the interest of all parties involved to reach a conclusion as quickly and effectively as possible. This expediency will be highly beneficial for small and midsize farmers who rely on farming for livelihood.  

Another seemingly valid concern is that bureaucratic interference in justice delivery will make the process more susceptible to rent seeking. This claim loses credibility owing to the rampant corruption within the judiciary at [district level](https://magazine.outlookindia.com/story/corruption-is-rampant-in-the-lower-courts/281457). Seeking justice through courts is more expensive for farmers if bribes to the court staff, extra \`fees’ to the legal aid lawyer, bribes to the policemen for obtaining documents or to court officials for small favours are taken into consideration. 

One incentive for farmers to forgo the legal system and engage in conciliation is the opportunity to recover costs they incurred during the process. Apart from court fees, cost of legal representation, cost of obtaining certified copies etc., the legal system fails to acknowledge, and therefore compensate litigants for any other costs incurred. During the conciliation process, the farmers can negotiate for some of these compensations.  

There is a dire need to [develop the ADR ecosystem in India](https://vidhilegalpolicy.in/research/the-future-of-dispute-resolution-in-india/) and foster legitimacy in the approach. People’s scepticism towards ADR arises from lack of [awareness of the various alternative legal remedies](https://www.theweek.in/news/india/2020/07/09/opinion--we-need-alternative-dispute-resolution-mechanisms-in-in.html) and their benefits. Court congestion and delays often deter farmers from approaching the public justice system, yet they are wary of ADR. By bringing more awareness among the farming community along with capacity building of mediation and conciliation professionals, digitizing the process and developing a watertight enforceability mechanism, the government can get the farmers’ buy in. 

A transparent and accountable ADR ecosystem is imperative to compensate for the lackings of our formal legal system. The conciliation mechanism under the farm laws aims to provide farmers an alternative to the lengthy and often troublesome judicial process. Instead of repealing the provisions to appease the vocal protestors, the government should consider implementing an opt-in approach to ADR under the farm laws where farmers will have judicial recourse to civil courts if the conciliation process fails. [Evidence from several countries](https://vidhilegalpolicy.in/research/the-future-of-dispute-resolution-in-india/) indicates that ADR is most effective when both parties make that choice, not when they are forced to opt for it in the absence of other options. 

*Read more: [Where are the students of India?](https://spontaneousorder.in/where-are-the-students-of-india/)*

* * *

**About Swati Rao**

Swati Rao is Assistant Manager, Advocacy at Centre for Civil Society. Previously, she has worked for the US Department of State, Swaniti Initiative in India, and holds an Erasmus Mundus Masters in Public Policy and B.A. LL.B (Hons) from Hidayatullah National Law University, Raipur.

## Where are the students of India?

Original: https://www.spontaneousorder.in/p/where-are-the-students-of-india

Author: Spontaneous Order

Published: 2021-01-08T16:03:29.000Z

Topics: budget-private-schools, school-choice, education-reform, rte-act

> Is India’s government giving the people what they want? Are we truly a democracy in practice? When it comes to education, the answers might surprise you. Although India’s government runs one-third of schools, only a little more than half of all studen

**Summary:**

India's government runs one-third of schools, yet only 52% of students attend them in 2017, down from 74.1% in 1998, with nearly 12 crore students opting for private schools, including 92 million in budget private schools (BPS) serving economically backward communities at minimal fees—45.5% under Rs 1000 monthly—contributing Rs 1.75 lakh crores to the economy. Parents from middle and lower-middle classes prefer these community-driven BPS over free government options due to their innovations and accountability to local communities for enrollment and reputation. In Himachal Pradesh, leaders like Roop Ram Sharma and Sushma of B.L Central Public School exemplified dedication during COVID-19, paying teachers from savings despite unpaid fees, providing phones for online classes, and offering scholarships, producing alumni in top jobs like Facebook and Amazon. Despite challenges like 35% of rural Class V private students unable to read Class II text and pandemic disruptions, BPS prioritize practical, outcome-focused education over rote learning. The author argues from a classical-liberal lens that the Right to Education Act's input-focused norms (e.g., playground sizes) burden BPS; government should shift to child-centric, learning-outcome-based regulations to enable these market-responsive schools to thrive and meet parental demands in a true democracy.

**Key points:**

- Middle and lower-middle-class parents prefer budget private schools over free government schools, enrolling 92 million children despite minimal fees.
- Budget private schools innovate and remain accountable to communities to ensure survival through high enrollment and student success.
- During COVID-19, BPS leaders paid teachers from personal savings and provided resources like phones, prioritizing education over revenue.
- Government should reform RTE Act to emphasize learning outcomes rather than physical inputs like playground sizes.

**By Basu Rai**

* * *

Is India’s government giving the people what they want? Are we truly a democracy in practice? When it comes to education, the answers might surprise you.

Although India’s government runs [one-third of schools](https://ccs.in/sites/default/files/attachments/faces-of-bps-in-india-report2018.pdf), only a little more than half of all students attend government schools. Budget Private Schools are a growing segment of private schools that cater to economically backward communities. They charge a minimal fee and provide regular and quality education to nearly [92 million children](https://ccs.in/sites/default/files/attachments/faces-of-bps-in-india-report2018.pdf) in India. 

Times of India [reported](https://timesofindia.indiatimes.com/india/why-half-of-india-prefers-private-schools/articleshow/77107620.cms) that nearly 12 crore students in India are enrolled in private schools. When we look at the numbers, the enrollment in government schools has dropped from 74.1% in 1998 to 52% in 2017. However, private schools still have a long way to go in terms of achieving desired learning outcomes. A report by the [Central Square Foundation](https://youtu.be/LqYZH9TeB2g) shows us that 35% of rural private school students in Class V can’t read basic class II level text. The report also showed that 45.5% students in private schools pay less than Rs 1000 a month as fees and yet the sector contributes approximately Rs 1.75 lakh crores to the economy. This shows us that the middle and lower-middle-class population of India would rather pay some of their hard-earned money to budget private schools who work hard and innovate to ensure education, rather than sending their children to government schools for free.

Recently, I embarked upon a journey to explore innovative initiatives of schools in Himachal Pradesh. What I found indeed reaffirmed my belief that parents have more faith in their community private schools than in government schools.

### **Goodwill and passion of school leader** 

In Himachal Pradesh, I met Mr Roop Ram Sharma, Chairman, Himachal Academic School, Solan. Mr Ram started his career as a government school teacher and was the principal of various senior secondary schools. He recalls and shares his experience, “My entire life I was into the teaching but I didn’t see education becoming interesting. I tried to contribute to various schools that I was the principal of. I always had a dream that I will change the education system at least through my own initiatives. When I retired, I immediately opened my budget private school in this village so that I could do all the innovations with students” he said. 

The day I met him, he picked his students up from their homes and took them to the ground where they all gathered to study. Students gathered in groups of five, wore masks and kept a safe distance from each other. It was interesting to see Mr Ram using measuring tapes and other educational props to teach the students. The students were very friendly with him, calling him “Principal” instead of “Principal Sir”. I was genuinely impressed by his efforts to ensure that every child enrolled in his schools gets educated.

I asked Mr Ram, “Did you get paid during the COVID-19 pandemic? I assume the school was shut?” He smiled and said, “*Nahi sabne nahi diyeh, par mera dharma to bachhon ko sikshya dena hai, uskeliyeh jo bhi saving hai mai laga dunga, aur kuch parents to fee bhi de rahen hai* (Not all are paying the fees, but my duty is to give these children education, and I will spend every last penny of my saving if required. But some parents appreciated my hard work and they are coming to pay the fee.)”

I soon asked him another question: “You wish to impart education in a way that children can comprehend easily. Do you recall an incident where your way of education brought appreciation?”

He smiled again and said, “Yes, last time when I met with a parent, he shared an incident with me. He had hired a mason to build two-rooms. While the mason was calculating the area, his child also took the measuring tape, measured the room and started to calculate the area. His child found around five thousand rupees extra incurred against the mason’s calculation. That was the award for me; when my student’s action gets appreciation by the parents. Education should come in handy in daily life, and that’s what quality education is about. If the child can survive in mainstream life with dignity, that’s what real education is”.  **[Click here to see the video](https://www.facebook.com/ccsindia/videos/?ref=page_internal).**

If you see the challenges of COVID-19, you’ll find the data around it shocking. According to a survey conducted by [Central Square Foundation](https://www.thequint.com/news/education/no-pay-for-80-percent-private-school-teachers-since-march-says-survey#read-more), nearly 50% of teachers surveyed had not received their salary for March 2020, the month when all schools nationwide were shut. More than 50% schools surveyed had uncollected dues ranging from 13% to 80% of their annual revenue, compared to the previous financial year. 

But during my visits to these schools when I interacted with teachers, students and parents, I learnt that these schools paid all their teachers. However, most of the parents could not pay the school because they had lost their jobs. School leaders were running into huge losses but they were determined to spend every last penny they had in their pocket. They started this school to see their students learn differently and they wanted to bring a change in the education system. The pandemic was not going to stop them. 

School students also started developing health issues while taking online classes for long hours. It was tough for schools nationwide to impart education as they used to do in the classroom. When it comes to community schools, the accountability of teachers and schools lies more towards the community, since the community ensures the goodwill, fame and business of the school. The survival of community schools depends on the amount of love and faith they receive from the parents and teachers, and to win the communities’ heart is not an easy task for schools. 

The driving motivation of community schools is to impart quality education. Even if you talk to small edupreneurs, they have a vision and to see it through they have to ensure their outcomes. They have a commitment towards the growth of their schools and growth is possible only if they get more enrolments of students. To do that they need to produce students with high success rates in the community and need to keep the promises they have been making. Only then the community’s hearts and arms will open to embrace these budget private schools. 

I also got a chance to spend an afternoon with Ms Sushma, General Secretary of **B.L Central Public School, Kunihar, Solan, Himachal Pradesh.** With a welcoming and smiling face, she said, “I didn’t have any vision of opening schools, but I got married to the school founder and gradually started getting involved in the school. Suddenly, a sense of accountability and responsibility towards the community children emerged within me. I promised myself that the community has immense trust in us, so it’s my responsibility to churn out a great student. 

I asked her, “Do you have any scholarship programs for students?” It was as if she was waiting for this question and said, “Many scholarship programs are available, in fact, it has only become possible because some good people are contributing from their personal salary. We give scholarships to those students who score eighty per cent marks.” In this conversation, she also shared that, “one student got a job at Facebook, and another student in Amazon and their annual salaries are more than a crore. In addition, one student got enrolment in MBBS and these students received free education from our school which makes me proud.” 

It was interesting to separately meet with the students in their community to understand their learning experience during this pandemic. I found that both students and parents appreciated the efforts that the teachers and schools were taking. They were very friendly, frank and expressed their feelings, indicating their positive relationship with their teachers, school and community.  

During the conversation with Ms Sushma, she addressed the challenge that, “Most of the parents are not giving fees and some parents didn’t have mobile phones to continue online classes of children. Thus, we provided them with phones, didn’t take fees from them and still paid the full salary to the teachers because we believe that we have also earned from them, so it’s our chance to give back from whatever we have. We shouldn’t forget that we started our school to provide a good education to our Kunihar children. They are our community’s pride, and it’s worth it to help the community whenever they need it. We want all the children of our community to get a good education in our school and we will do that till the last penny remains with us. This year is our silver jubilee and we are celebrating with a “not taking fee” moto.  

It’s interesting to know the views of the students of these schools. They believe in their teachers more because they are giving extra time and less burden to the students. They treat them well, and school leaders also believe in learning through activities rather than rote learning. This makes the students learn while having fun. I met with students Chahat, Sneha and many others. 

In these schools, they all complained that their eyes and head hurt when they use mobile for a longer time period. Moreover, they’re not able to understand concepts clearly, and thus they miss their school more. 

To know more: **[See the video B.L Central Public School](https://www.facebook.com/ccsindia/videos/247999203391389)** 

### **Demands of budget private schools** 

When the Right to Education Act 2009 came into force with lots of formalities and norms, it brought mandatory compliances for all the schools across the nation. An interesting part of these compliances is that they don’t talk much about ensuring the quality of education but put more emphasis on the physical inputs. For instance; the guidelines focus on how big a playground should be, rather than focusing on the real learning outcomes of the students. 

Thus, the government needs to make child-centric norms focused on learning outcomes rather than inputs so that schools can focus on ensuring quality education rather than submerging and spending most of their resources on fulfilling RTE formalities and compliances.  

### **Key findings:** 

1.  The middle & lower-middle-class population prefers budget private schools over free government schools
    
2.  Budget private schools are community schools 
    
3.  Budget private schools are required as they constantly perform better in order to survive.
    
4.  They are implementing many micro innovations to ensure quality education for children.
    
5.  COVID-19 has brought survival challenges 
    
6.  Students’ concepts are not being cleared on online classes and they also have to deal with health problems 
    
7.  The government needs to change norms for budget private schools 
    

*Read more: [India’s police force is overstretched and needs help](https://spontaneousorder.in/indias-police-force-is-overstretched-and-needs-help/)*

* * *

**About Basu Rai**

Author, Development Professional and advocate for child rights globally, Basu Rai has been a speaker at many organisations like ILO and United Nations. He began his journey of social work with Nobel Laureate Mr Kailash Satyarthi, in 1998 as a part of the worldwide movement "Global March Against Child Labour."

## India’s police force is overstretched and needs help

Original: https://www.spontaneousorder.in/p/indias-police-force-is-overstretched-and-needs-help

Author: Spontaneous Order

Published: 2021-01-06T12:55:03.000Z

Topics: police-reform, law-enforcement, judicial-reform, public-finance

> Like many, I have watched the fascinating Netflix series ‘Delhi Crime’. Unusually, it is told from the viewpoint of a harassed, overworked and unfairly castigated police force. Arguably, it goes overboard on this theme. Yet, its viewpoint deserves ser

**Summary:**

Swaminathan SA Aiyer acknowledges the Indian police's notorious corruption, callousness, and political bias—extorting bribes, colluding with criminals, protecting politicians' favorites, and staging fake encounters—but argues they are fundamentally overstretched and under-resourced, deserving sympathy and support. India's sanctioned police strength is 181 per lakh population, but actual deployment is around 140 due to massive vacancies, well below the UN's recommended 222 and half the US level; Bhutan boasts 500. State governments prioritize vote-winning subsidies over filling posts, as seen in Bihar's 'jungle raj' dropping below 80 per lakh and Uttar Pradesh's 50% vacancies in 2016, leaving no bandwidth for tasks like checking power theft. In 2008 Mumbai attacks, over 90% of policemen had never handled guns, yet hero Tukaram Omble captured terrorist Ajmal Kasab bare-handed. Aiyer advocates classical-liberal reforms: boost budgets for staff, training, and forensic equipment over outdated 'third-degree' interrogations that fail in court; overhaul the sluggish judiciary for swift verdicts; and curb politicians' misuse of police. With resources, India's many honest officers can deliver justice effectively.

**Key points:**

- India's actual police strength is 140 per lakh population due to unfilled vacancies, far below UN's 222 recommendation.
- State governments understaff police to fund populist subsidies, exacerbating crime control failures like in Bihar's 'jungle raj'.
- Shift police training to forensic skills and equipment from prolonged witness interrogations that lead to case dismissals.
- Reform judiciary for quick verdicts and stop political interference to enable effective policing.

**By Swaminathan SA Aiyer**

* * *

Like many, I have watched the fascinating Netflix series ‘Delhi Crime’. Unusually, it is told from the viewpoint of a harassed, overworked and unfairly castigated police force. Arguably, it goes overboard on this theme. Yet, its viewpoint deserves serious attention.

The police are widely hated for being corrupt and callous; for extorting sums from those who come for justice, and even of raping women who come to report rapes; for extorting hafta (weekly payments) from street hawkers and small businessmen; for refusing to register crimes unless bribed; for colluding with criminal gangs; for protecting the favourites and harassing the foes of their political masters; for arresting dissidents and even the patriotic Muslim agitators at Shaheen Bagh on trumped-up grounds of terrorism and sedition; for bumping off supposed criminals in bogus ‘encounters’; and for not checking countless crimes all around us.

**The Proof of the Pudding**

No amount of sugar-coating through films like ‘Delhi Crime’ will invalidate those criticisms. India has almost the lowest urban labour participation rate in the world (14%) for females above 15, a major reason being that women feel unsafe going out to work. And, yet, the other side of the story needs telling.

India is by no means a safe or wellpoliced country. Yet, tourists will tell you it is far safer than many other developing countries. Most policemen are armed with just lathis (staves). When Pakistani terrorists hit Mumbai in 2008, it came to light that over 90% of Mumbai policemen had never handled a gun. The policeman, Tukaram Omble, who caught the terrorist Ajmal Kasab did so with his bare hands and died in the process, a truly heroic act.

The UN estimates that countries need 222 police per lakh population. India’s sanctioned police strength is 181 per lakh. But massive vacancies mean the actual strength is nearer 140 per lakh, half that of the US. Ironically, Bhutan, the Shangri-La boasting of gross national happiness (GNH), has 500 police per lakh population.

All state governments feel they must dole out ever-rising subsidies to win votes, yet have fiscal limits. So, they save money by simply not filling posts that fall vacant. During Lalu Prasad Yadav’s ‘jungle raj’ in Bihar, police strength fell below 80 per lakh population. Uttar Pradesh in 2016 had an estimated 50% police vacancies. Not even the best police force can control crime if desperately understaffed and deprived of training or resources.

I visited UP in 2017 after Adityanath became chief minister. The department of power said the enormous financial losses of the state distribution companies (discoms) were caused mainly by power theft. Police stations had their hands full with felonies like murder and rioting, and so had no staff to attend to electricity theft. To overcome this, Adityanath ordered that, as in Gujarat, every district should have one police station dedicated to checking electricity theft. When I visited the state three years later, a crestfallen bureaucrat said that the state was still in the process of hiring and training two lakh new constables. But these were urgently needed for existing vacancies, so it would take time to create police stations dedicated to check power theft.

**Gunning for Justice**

As for lynchings and rapes, the UP Police claimed that in every case the culprits had been arrested and charged. But the courts let them out on bail and the cases dragged on forever. The police had utter contempt for the judicial process.

An impatient Adityanath once swore to simply liquidate bandits through ‘encounters’. This was widely criticised as illegal, but was cheered by voters. In many states, police ‘encounter specialists’ are heroes. The 2004 Nana Patekar-starring film Ab Tak Chhappan, about an encounter specialist who had shot 56 criminals, was so popular that it bred a sequel.

Former Bihar director general (DG) Abhayanand, who helped end Lalu Yadav’s ‘jungle raj’, told me that the entire training and methodology of the Indian police was faulty. They would examine dozens of witnesses (sometimes using ‘third degree’ interrogation), take a year or two to complete interrogations and file chargesheets, and later find that many witnesses reneged on their original statements. Meanwhile, those arrested were let out on bail and intimidated or bribed witnesses. So, the police-judicial system simply did not work. He urged that police training must refocus on sophisticated equipment and high forensic skills to establish crimes, not interrogations that yielded only delays and case dismissals.

The web series ‘Delhi Crime’ shows police officers working non-stop for days because of staff shortages. They lack budgets for even work-related expenses or travel, let alone sophisticated forensic equipment. This is an accurate picture.

Many policemen may be crooks. Yet, I have personally known police officers of unimpeachable integrity, such as Ved Marwah, Hari Pillai and Keki Daruwalla. We have many more such officers. Give them the budgets, the staff, the forensic equipment and training that they need — and that India deserves — and they will do an excellent job.

Of course, that may come to nothing unless the judiciary is reformed to ensure quick verdicts, and politicians stop using the police to harass opponents and dissenters, while protecting crooks in their own ranks.

*This article was originally published in the [Economic Times](https://economictimes.indiatimes.com/news/politics-and-nation/view-indias-police-force-for-all-its-blights-and-corruption-is-overstretched-and-needs-help/articleshow/79745058.cms) on Dec 15, 2020.*

*Read more: [Does Property Rights Help Only the Rich and Powerful?](https://spontaneousorder.in/does-property-rights-help-only-the-rich-and-powerful/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## The Growing Burden of Child Malnutrition in India

Original: https://www.spontaneousorder.in/p/the-growing-burden-of-child-malnutrition-in-india

Author: Spontaneous Order

Published: 2021-01-04T15:57:41.000Z

Topics: child-malnutrition, nutrition-policy, cash-transfers, poverty-alleviation

> India is facing an unprecedented nutrition crisis and children are the ones most severely impacted. Even before the multiple shocks caused by the pandemic, India was not on its way to meet the Sustainable Development Goal 2 to end hunger and all forms o..

**Summary:**

India faces a worsening child malnutrition crisis, with NFHS-5 (2019-20) data from 18 populous states like Gujarat, Maharashtra, Bihar, West Bengal, and Karnataka showing stalled or reversed progress in stunting, wasting, and underweight compared to NFHS-4 (2015-16), even before the pandemic. Despite massive government interventions—PDS under National Food Security Act, POSHAN Abhiyan, ICDS via 13.77 lakh anganwadi centres, and the world's largest school-meal program—undernutrition stalled at 8.4% from 2014-2018, costing 0.8-2.5% of GDP. The pandemic exacerbated this through service disruptions, with 71% of surveyed households reporting worse nutritional quality and 66% reduced quantity. From a classical-liberal perspective, these in-kind schemes suffer implementation flaws like poor monitoring and corruption, proving inadequate in crises; cash transfers would enable diversified diets and savings. Root cause is poverty, intertwined with sanitation, education, gender disparity, and maternal health. Solutions include performance incentives for anganwadi workers (reducing underweight by 5%, height by 1cm in studies), restoring maternal services, and prioritizing income growth over dietary interventions alone to break the poverty-malnutrition cycle and support economic ambitions.

**Key points:**

- NFHS-5 data shows child stunting, wasting, and underweight have stalled or worsened in major states like Gujarat and Bihar.
- Government schemes like ICDS, PDS, and school meals have failed to improve outcomes despite massive scale, exposed by pandemic disruptions.
- Cash transfers outperform in-kind aid by allowing families diversified diets and flexibility during crises.
- Performance-based incentives for anganwadi workers reduce underweight prevalence by 5% and improve height.
- Sustainable malnutrition reduction requires income growth to address poverty as the root cause, beyond food security buffers.

**By Swati Rao**

* * *

India is facing an unprecedented nutrition crisis and children are the ones most severely impacted. Even before the multiple shocks caused by the pandemic, India was not on its way to meet the Sustainable Development Goal 2 to end hunger and all forms of malnutrition. To make matters worse, data released from the [first phase of the National Family Health Survey 2019-2020](http://rchiips.org/NFHS/NFHS-5_FCTS/NFHS-5%20State%20Factsheet%20Compendium_Phase-I.pdf) (NFHS 5) indicates reversal of any gains India had made in child malnutrition in the last few decades.

Child undernutrition or malnutrition is measured on three key indicators: stunting (a lower-than-expected height for age), wasting (lower-than-expected weight for height), and underweight (lower-than-expected weight for age). While the prevalence of [undernutrition](https://globalnutritionreport.org/resources/nutrition-profiles/?country-search=india) in India had reduced from 13.4% in 2003 to 8.4% in 2014, it has stalled at 8.4% from 2014-2018. 

Unfortunately, the latest round, NFHS 5, provides grim data on both input as well as outcome-based malnutrition in children. With a sample of some of the most populous states, Gujarat, Maharashtra, Bihar, West Bengal and Karnataka and comparing the data on Stunting, Wasting and Underweight prevalence between NFHS 4 (2015-16) and NFHS 5 (2019-20), it is evident that progress has mostly stalled or deteriorated on almost all three indicators (Figures 1, 2 and 3). The first phase of the survey has covered only 18 states, but it would not be a reach to extrapolate these findings to the remaining states. 

[

![](https://lh5.googleusercontent.com/vo45MGnpdVzjJuRYLYzJmMRZWkgk7iaNAfYvz1w--iPQv6XlUuqtgMNvfkxfIm6TfqyKP3vpDcAcniiOHCy49QjqiLGq2QBfAiJvdJdWw8D4fh4rvxqKI0DIvy3L878WCVHXrnND)



](https://lh5.googleusercontent.com/vo45MGnpdVzjJuRYLYzJmMRZWkgk7iaNAfYvz1w--iPQv6XlUuqtgMNvfkxfIm6TfqyKP3vpDcAcniiOHCy49QjqiLGq2QBfAiJvdJdWw8D4fh4rvxqKI0DIvy3L878WCVHXrnND)

*Figure 1: Stunting in children under five.* 

*[Source: National Family Health Survey 2019-20](http://rchiips.org/NFHS/NFHS-5_FCTS/NFHS-5%20State%20Factsheet%20Compendium_Phase-I.pdf)*

[

![](https://lh5.googleusercontent.com/cNmRkIf8kxicqv6HFdLGf2rbdUYq8V8_9x_W2Xjm91JZoXqiA-hpDXridFX2fEPhWdFui0uqJyVMeC2Yav15p_JX2CCpuaR1J6FoqLboGDQDsdQEdnA3N0FsiBgkcXByx49FrvNB)



](https://lh5.googleusercontent.com/cNmRkIf8kxicqv6HFdLGf2rbdUYq8V8_9x_W2Xjm91JZoXqiA-hpDXridFX2fEPhWdFui0uqJyVMeC2Yav15p_JX2CCpuaR1J6FoqLboGDQDsdQEdnA3N0FsiBgkcXByx49FrvNB)

*Figure 2: Wasting in children under five.* 

*[Source: National Family Health Survey 2019-20](http://rchiips.org/NFHS/NFHS-5_FCTS/NFHS-5%20State%20Factsheet%20Compendium_Phase-I.pdf)*

[

![](https://lh5.googleusercontent.com/_eZX_--o6D9R2XCS0ruGtBI52uGZEhllVxk7V3P72-gswGOGk89eChgId1g2pvxnAzJQLxQ1tDxE8C0fmACYqoU6fDyVMoNiBhwEDid_BRRfWB3gh8vDepOK5l18jxcvw5LfzaPc)



](https://lh5.googleusercontent.com/_eZX_--o6D9R2XCS0ruGtBI52uGZEhllVxk7V3P72-gswGOGk89eChgId1g2pvxnAzJQLxQ1tDxE8C0fmACYqoU6fDyVMoNiBhwEDid_BRRfWB3gh8vDepOK5l18jxcvw5LfzaPc)

*Figure 3: Underweight prevalence in children under five.* 

*[Source: National Family Health Survey 2019-20](http://rchiips.org/NFHS/NFHS-5_FCTS/NFHS-5%20State%20Factsheet%20Compendium_Phase-I.pdf)*

A complicated combination of social safety nets in the form of the Public Distribution System (PDS) under the National Food Security Act, POSHAN Abhiyan, ICDS services, anganwadi centres and the world’s largest school-meal programme has done little to improve India’s standing on health and nutrition indicators.

Child malnutrition is a multi-faceted problem, intertwined with several other factors. Apart from the obvious causes like poverty, access to healthcare and food or nutritional security, child malnutrition is also correlated to lack of safe drinking water, sanitation and sociological issues like gender disparity. In India, mothers are still considered the primary caretaker of children. When these mothers do not have any agency, reproductive or otherwise, it leads to a vicious cycle of undernutrition in pregnant women, lactating mothers and as a result, their children. Unfortunately, the impact of [climate change](https://www.scientificamerican.com/article/climate-shocks-could-reverse-gains-in-child-malnutrition/), environment degradation and pollution on nutrition levels in children, while undeniable, is still under-researched. In India, child malnutrition is also correlated to factors like [caste, family’s education level and housing structure](https://www.indiaspend.com/caste-fathers-education-sanitation-affect-child-malnutrition-new-data-36560). In all this, it is imperative to acknowledge that the root cause of any kind of malnutrition is [poverty.](https://academic.oup.com/wber/article-abstract/17/1/107/1676289)

The causal link between child malnutrition and several of these developmental indicators is well established and the [consequences](https://www.unicef.ca/en/malnutrition) are clear. Malnourished children suffer from developmental delays, vulnerability to diseases and stunted growth, turning into adults who struggle with pursuing meaningful work. As [several studies](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5837457/) have demonstrated, there is a direct link between child nutrition and economic development.  [The economic growth of countries like the UK, France](https://www.nber.org/system/files/working_papers/w4638/w4638.pdf) etc., in the last two centuries, is attributed to improvement in human capital indicators through investment in nutrition and health. [One study](http://www.ncaer.org/uploads/photo-gallery/files/1405592534IPF%202014%20Desai-Vanneman%20Conference.pdf) estimates the economic costs of malnutrition in India at 0.8-2.5 percent of GDP.

The NFHS 5 paints a dismal picture but the findings need to be interpreted with a sense of foreboding. The pandemic’s disproportionate impact on the lives of India’s poor has undeniably [exacerbated undernutrition across all sections of the affected population](https://e-jghs.org/search.php?where=aview&id=10.35500/jghs.2020.2.e19&code=9986JGHS&vmode=PUBREADER), both adults and children. While government data on this is awaited, the [Right to Food campaign’s Hunger Watch](https://indianexpress.com/article/opinion/columns/india-hunger-index-poor-pds-welfare-programme-coronavirus-lockdown-narendra-modi-7061645/) survey across 11 states and 3,500 households found that 71 percent respondents reported that the nutritional quality of food had worsened during the lockdown. 66 percent reported that the quantity of food consumption decreased. 

Despite the [Supreme Court order](https://economictimes.indiatimes.com/news/politics-and-nation/ensure-supply-of-midday-meals-amid-closure-sc/articleshow/74699626.cms) urging all states to continue mid-day meals in schools and ICDS services in anganwadi centres for children, pregnant women and lactating mothers, the [National Human Rights Commission](https://www.hindustantimes.com/india-news/lockdown-hit-food-security-of-children-rights-body-tells-ministries/story-pzQYgrpgwX39WRPOO3jxbL.html) found that in most states, schools and anganwadi centres remained closed during the lockdown. The closure of anganwadi centres also severely disrupted the delivery and uptake of various [immunization programmes and schemes](https://timesofindia.indiatimes.com/city/ranchi/lockdown-halts-routine-immunization-programmes-for-kids/articleshow/75035671.cms). [WHO has](https://www.who.int/news/item/15-07-2020-who-and-unicef-warn-of-a-decline-in-vaccinations-during-covid-19) warned that by stalling these immunization drives, we are trading one health crisis for another. Above all, the pandemic has led to disruption in healthcare services considered to be non-essential, leading to unavailability of healthcare providers and protective equipment. Even when services are available, people have not been able to access them because of transport interruptions, economic hardships, restrictions on movement, or reluctance to be potentially exposed to the virus. As a result, we lost ground on what little progress had been made in improving child malnutrition in the country.  

ICDS and allied schemes, tasked with improving health and nutrition, suffer from various [implementation issues](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5296463/). Lack of adequate infrastructure, logistic supply issues, lack of awareness and proper utilization by the local people, poor monitoring and corruption in food supplies, to name a few. The soundness of a policy is measured on outcomes and not just inputs and good intentions. As [various studies](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5296463/) have indicated, these programmes have not been delivering the [expected results](https://pubmed.ncbi.nlm.nih.gov/11291790/), and the pandemic has proven that they were not well placed to deal with situational exigencies. 

Once the anganwadi centres and schools were shut down, the delivery of these schemes stalled. While implementing these drastic measures to prevent further spread of the virus was justified, the states could have at least provided delivery of dry rations to households or cash transfers as a stopgap solution. 

A standard diet of rice, wheat and pulses provided by PDS or mid-day meal scheme will never be able to fulfill the nutritional requirements of growing children. Situations like the pandemic highlight the inadequacies of in kind transfer schemes like ICDS and PDS, and the benefits of cash transfer schemes. Without going into the intricacies of the [cash versus in-kind transfer](https://web.iitd.ac.in/~reetika/WP325cash.pdf) debate, cash transfers during the pandemic would have allowed people to invest in a diversified diet and better quality of food, while giving them the option to save for the future. 

Maternal health and child nutrition are [intrinsically linked](https://internationalbreastfeedingjournal.biomedcentral.com/articles/10.1186/s13006-019-0228-7). [Evidence](https://internationalbreastfeedingjournal.biomedcentral.com/articles/10.1186/s13006-016-0076-7) suggests a strong correlation between child nutrition and utilization of maternal health services such as antenatal care visit, institutional delivery, and postnatal care services, as well as practicing breastfeeding. Restoring interventions for pregnant and lactating women, such as food and nutrition supplements, Vitamin-A, Iron and Folic Acid supplements, antenatal care, and ICDS benefits at the time of breastfeeding will mitigate the risk of child undernutrition in the first 1000 days of birth. In the long term, strengthening maternal healthcare will contribute to improving child malnutrition.  

The backbone of all the governmental health, nutrition and early learning initiatives are the Anganwadi Workers and Anganwadi Helpers, who provide immunization, health check-up and supplementary nutrition services for children, pregnant women and lactating mothers.  Currently, a total of [13.77 lakh anganwadi centres](https://m.economictimes.com/news/politics-and-nation/government-plans-to-upgrade-2-5-lakh-anganwadi-centres-in-next-5-years-women-and-child-development-ministry-official/articleshow/72828637.cms#:~:text=Currently%2C%20a%20total%20of%2013.77,multiple%20levels%20in%20the%20government.) are operational with 12.8 lakh workers and 11.6 lakh helpers. By deeming their contribution “[voluntary social service](https://thewire.in/labour/anganwadi-icds-child-development-ministry)”, state governments have been able to get away with grossly underpaying them. If ICDS and other schemes are to work, Anganwadi workers and helpers need to be incentivised for their work, either through performance based incentives or regular bonuses. A [2017 Study](https://www.sciencedirect.com/science/article/pii/S0167629617306902) conducted to understand the correlation between incentives for anganwadi workers and the nutritional status of children under their care found that performance pay reduced underweight prevalence by 5 percent and improved height by one centimeter over three months, whereas fixed bonuses had limited impact. 

Child malnutrition perpetuates the cycle of poverty, increasing healthcare costs, reducing productivity of the workforce, and hence, slowing economic growth. The true burden of child malnutrition will have a sobering effect on India’s dream of achieving a [$5 trillion economy](https://www.businesstoday.in/current/economy-politics/india-can-still-be-5-trillion-economy-says-pm-modi/story/420217.html) by 2024. It is disconcerting to note that we do not yet have an estimate of the impact of Covid-19 and the ensuing lockdown on these indicators. While food and diet have an intrinsic importance, they are not the only factors that need to be addressed. India has considerable buffers to meet any food security shocks, but the nutritional and health status of the poor and marginalised communities have not improved owing to this. Essentially, dietary interventions alone, without any [income growth](https://academic.oup.com/wber/article-abstract/17/1/107/1676289), will not accelerate reduction in malnutrition. As the economy attempts to recover lost ground, the government needs to reimagine child nutrition as a policy priority. Although schemes like POSHAN Abhiyan, ICDS, PDS etc. have been instrumental in providing nutrition support to children and women from low income backgrounds, the pandemic has proven that these are ill equipped to deal with widespread disruptions to economic activities and health systems.

*Read more: [Maternal Mortality Ratio in India: How far have we come?](https://spontaneousorder.in/maternal-mortality-ratio-in-india-how-far-have-we-come/)*

* * *

**About Swati Rao**

Swati Rao is Assistant Manager, Advocacy at Centre for Civil Society. Previously, she has worked for the US Department of State, Swaniti Initiative in India, and holds an Erasmus Mundus Masters in Public Policy and B.A. LL.B (Hons) from Hidayatullah National Law University, Raipur.

## The Challenge of Taking Street Food Online in a Pandemic

Original: https://www.spontaneousorder.in/p/the-challenge-of-taking-street-food-online-in-a-pandemic

Author: Spontaneous Order

Published: 2020-12-24T16:20:08.000Z

Topics: street-vending, pm-svanidhi, food-delivery, market-regulation

> Covid-19 has made us pivot to a different style of living, one where we think about whether or not what we’re eating/touching/drinking will infect us with the virus. Though we’re not in lockdown anymore, people are still hesitant to drop by their favo

**Summary:**

The COVID-19 pandemic devastated India's $65 billion foodservice market, with unorganized street vendors—comprising 63% or $41 billion—suffering Rs 48,960 crore losses in just 36 days, prompting the MoHUA's PM SVAnidhi scheme offering collateral-free loans up to Rs 10,000 (2 million applications, 7 lakh sanctioned, 2 lakh disbursed). A novel partnership with Swiggy pilots onboarding 250 vendors in five cities, providing PAN/FSSAI registration, tech training, and hygiene support, now scaling to 36,000 vendors across 125 cities. From a classical-liberal view, this enables private sector innovation to digitize an overregulated street vending space, aiding vendors' recovery by bringing customers online safely and reducing harassment risks. However, challenges persist: Swiggy's weekly payments clash with vendors' daily wage needs; commissions of 18-40% risk exploitation without fixed terms; high transaction costs (FSSAI compliance, packaging) and solo operations hinder sustained use; government partnership invites overregulation; and a separate 'Street Vendors' app category may deter cautious post-pandemic consumers. Success hinges on transparent data, vendor incentives, tech support, airtight contracts, and minimal bureaucracy to foster genuine market progress.

**Key points:**

- PM SVAnidhi-Swiggy partnership onboards street vendors online, starting with a successful pilot of 250 in five cities and expanding to 36,000 in 125 cities.
- High Swiggy commissions (18-40%) and weekly payments must be fixed and adapted for daily-wage street vendors to prevent exploitation.
- Sustained platform use requires incentives, ongoing tech assistance, and low transaction costs amid FSSAI and packaging demands.
- Private sector entry into overregulated vending promises recovery and reduced extortion, but government involvement risks stifling innovation.
- Separate 'Street Vendors' app category may limit demand from hygiene-conscious post-COVID consumers.

**By Swati Singh**

* * *

Covid-19 has made us pivot to a different style of living, one where we think about whether or not what we’re eating/touching/drinking will infect us with the virus. Though we’re not in lockdown anymore, people are still hesitant to drop by their favourite *panipuri* stall and this has naturally caused financial problems for street food vendors. In light of this, a first of its kind [partnership](https://www.hindustantimes.com/india-news/swiggy-to-onboard-nearly-30-000-street-food-vendors-under-pm-svanidhi-scheme/story-Fub8wGCozsA4WNa2NpvTgP.html) between the food delivery company Swiggy and the Ministry of Housing and Urban Affairs (MoHUA) [PM SVAnidhi scheme](https://www.india.gov.in/spotlight/pm-street-vendors-atmanirbhar-nidhi-pm-svanidhi) has taken shape. What is it, and what does it mean for street vendors and consumers in a post-Covid India?

The foodservice market in India, [valued](https://yourstory.com/2020/10/street-food-market-tech-adoption-online-swiggy-zomato-pm-svanidhi) at $65 billion, took a big hit in the initial months of the lockdown. The unorganised street food vendors make up 63% of the total market, valued at $41 billion in revenue. The economic losses for vendors were immense. [Data](https://www.news18.com/news/india/roadside-vendors-incur-loss-of-close-to-49000-crore-in-last-36-days-hawkers-body-demands-relief-package-2598127.html) from the National Hawker Federation shows that more than four crore hawkers incurred a whopping Rs 48,960 crores in losses within 36 days of the lockdown. Thus, the MoHUA launched the PM SVAnidhi scheme, providing collateral-free working capital loans of up to Rs. 10,000 to registered street vendors. Close to [2 million applications](https://www.india.gov.in/spotlight/pm-street-vendors-atmanirbhar-nidhi-pm-svanidhi) were received under this scheme, of which over 7 lakh have been sanctioned, and over 2 lakh loans have already been disbursed.

The next step in this scheme’s implementation has been a one-of-a-kind partnership with the food delivery company, Swiggy. In October 2020, MoHUA and Swiggy ran a [pilot program](https://pib.gov.in/PressReleseDetailm.aspx?PRID=1661766) for onboarding 250 vendors across five cities – Ahmedabad, Chennai, Delhi, Indore, and Varanasi. The street vendors were helped with PAN and FSSAI registration, training on technology/partner app usage, menu digitization, pricing, hygiene and packaging practices. The pilot was [reportedly](https://www.livemint.com/companies/news/swiggy-aims-to-bring-36-000-street-vendors-online-with-pm-s-atmanibhar-nidhi-11607588973178.html) successful, and now the partnership is moving to its next stage, expanding to 125 cities, with a plan to onboard 36,000 vendors to whom the loan has been disbursed in these cities.

We talked about losses faced by vendors due to the pandemic. Thus by taking street food online, and bringing customers to the vendors in a safe manner, street vendors will get a chance to recover. More than that, this partnership allows the private sector to enter a space which has historically been overregulated – street vending. Though there is almost no data available in the public domain on the pilot project’s results, if it was indeed successful, then Swiggy was able to help onboard 300 vendors in just 3 months. If all of this has happened, that is immense progress.

But, there’s no  data available on how well the street vendors were onboarded in the pilot, and on how Swiggy and MoHUA went about achieving those impressive targets. In any case, there are some policy angles that need to be explored before this partnership can be deemed a success.

1.  Street vendors are daily wage earners. They work on daily profit margins and receiving daily income is key to their survival. Swiggy on the other hand, makes weekly, and not immediate, payments to restaurant partners. Onboarding the street vendors on Swiggy would mean either convincing them to be comfortable with weekly(and not daily) payments or changing Swiggy’s revenue model for specific restaurant partners. Both are significant developments, something that the pilot project does not talk about.
    

2.  At present, Swiggy’s [commission rates](https://www.financialexpress.com/industry/hotel-association-writes-to-swiggy-zomato-to-cut-commission-charges-on-takeaway-services/2104803/) vary anywhere between 18-40% of the order value. Sometimes, the commissions are [higher](https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/swiggy-seeks-higher-commissions-from-restaurants-in-certain-regions/articleshow/73077733.cms?from=mdr#:~:text=Swiggy%20seeks%20higher%20commissions%20from%20restaurants%20in%20certain%20regions,-TNN&text=Swiggy%20has%20raised%20its%20charges,charge%20earlier%2C%20people%20told%20ET.) depending on the location and popularity of the restaurant. As a policy, the terms specifying Swiggy’s commission rates in the orders that street vendors get need to be airtight. This percentage should be fixed, and adequate measures should be in place to check for abuse of power by Swiggy.
    

3.  Onboarding street vendors does not mean they will stay on the platform and continue using it. Transaction costs of operating on a digital platform like Swiggy are high – maintaining FSSAI standards with regular sanitation, packaging costs etc. Moreover for a street vendor (who usually works alone, or maybe with a helper), selling on Swiggy will mean doing both: using the app on one hand, and cooking and packaging on the other. How practical is that? So, though the pilot tells us how many street vendors were onboarded, it does not provide details on whether the vendors are using it. One solution could be to incentivise them to stay on for longer during the initial onboarding period, with regular tech assistance until they get comfortable.
    

4.  Since this project is in partnership with the government, Swiggy will be susceptible to overregulation, particularly because street vending is already heavily regulated by the government. It remains to be seen how tight a leash Swiggy will be on while trying to digitise street food vending.
    

5.  On the app, Swiggy has decided to list these businesses as a [separate](https://www.business-standard.com/article/companies/swiggy-set-to-onboard-36-000-street-vendors-under-pm-svanidhi-scheme-120121000506_1.html) category of “Street Vendors”.  Is this demarcation truly the best idea? There has been a drastic change in consumer behaviour due to the pandemic. Online food ordering [dropped 70%](https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/zomato-swiggy-orders-drop-70-in-10-days/articleshow/74977835.cms?from=mdr) in the first month of the lockdown, and people are only slowly getting back to ordering online, that too with caution. How many people would actually want to buy from the street vendors category right now? 
    

The success of this programme depends on how well the vendors will be onboarded. The points mentioned above might just be a few in a large pool of unseen consequences that could arise. Though street vendors have had laws protecting them, they have still been harassed and extorted by local authorities. The entry of a private player might make things better, but if the rules of the game remain bureaucratic, we might not see as much progress. For now, a lot of questions remain unanswered, especially from a policy perspective.

*Read more: [Does Property Rights Help Only the Rich and Powerful?](https://spontaneousorder.in/does-property-rights-help-only-the-rich-and-powerful/)*

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## Spontaneous Dialogue Ep 4: The Role of Agri-Businesses in Doubling Farmer Income

Original: https://www.spontaneousorder.in/p/spontaneous-dialogue-ep-4-the-role-of-agri-businesses-in-doubling-farmer-income

Author: Spontaneous Order

Published: 2020-12-24T13:20:00.000Z

Topics: farm-laws, agri-business, farmer-income, agricultural-policy

> In this episode of the Spontaneous Dialogues podcast, Anand Chandra from Arya Collateral Warehousing Services joins Prashant Narang, Associate Director of Research at the Centre for Civil Society to discuss the impact of the farm laws, the role that bus..

**Summary:**

This post is a promotional announcement for Episode 4 of the Spontaneous Dialogues podcast from Spontaneous Order, featuring Anand Chandra of Arya Collateral Warehousing Services and Prashant Narang of the Centre for Civil Society. It previews a discussion on the impact of India's farm laws, the potential role of agri-businesses in doubling farmer incomes, and persistent legal hurdles in the agriculture sector, framed through a classical-liberal lens critiquing pseudo-socialism in Indian policy.

**Key points:**

- Podcast episode explores how farm laws and agri-businesses can contribute to doubling farmer incomes.

**By Spontaneous Order**

* * *

In this episode of the Spontaneous Dialogues podcast, Anand Chandra from Arya Collateral Warehousing Services joins Prashant Narang, Associate Director of Research at the Centre for Civil Society to discuss the impact of the farm laws, the role that businesses can play in doubling farmer income and the legal hurdles that still exist in the agri-sector.

Listen now:

To listen to all other episodes of the Spontaneous Dialogue Podcast on your favourite platforms, click [here](https://anchor.fm/spontaneousdialogue).

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Does Property Rights Help Only the Rich and Powerful?

Original: https://www.spontaneousorder.in/p/does-property-rights-help-only-the-rich-and-powerful

Author: Spontaneous Order

Published: 2020-12-23T14:17:54.000Z

Topics: property-rights, fundamental-rights, tribal-displacement, state-overreach

> “It is not true that the legislator has absolute power over our persons and property. The existence of persons and property preceded the existence of the legislator, and his function is only to guarantee their safety.”― Frederic Bastiat, The Law As

**Summary:**

Opposition to private property from political extremes harms the poor and marginalized most, as India's abolition of the fundamental right to property in 1955 enabled arbitrary state seizures. Originally enshrined in Articles 19(1)(f) and 31 of the 1950 Constitution, this right—rooted in the 1935 Government of India Act and UDHR—was removed via the 4th Amendment amid land reforms targeting zamindars, but led to abuses like seizing media printing machines. A weaker constitutional right under Article 300A now fails to protect vulnerables: Supreme Court ordered eviction of over 1,000,000 tribal forest-dwellers across 16 states in 2019 (later stayed); 43,000 Delhi slum-dwellers near rail tracks in 2020 without resettlement; thousands of tribals displaced for Sardar Patel Statue without compensation; generations-old farmers evicted from expanded Kaziranga park in 2020. In contrast, influential figures like Kangana Ranaut secured a Bombay HC stay on demolition within 24 hours in 2020, while slum-dwellers could not. Property rights, per Bastiat, preexist the state and safeguard the powerless from vengeful or crony-driven state actions, countering claims that 'property is theft' by highlighting state seizures as true violence against tribals and slum-dwellers.

**Key points:**

- India abolished its fundamental right to property via the 1955 4th Constitutional Amendment, replacing it with a weaker Article 300A that fails to prevent arbitrary evictions.
- Over 1,000,000 tribal households faced 2019 Supreme Court-ordered eviction from forest lands, stayed only after state admissions of procedural lapses.
- 43,000 Delhi slum-dwellers were ordered removed in 2020 without compensation or stays, unlike quick judicial relief for celebrities like Kangana Ranaut.
- Restoring a strong fundamental right to property would protect marginalized groups from state overreach in projects like the Sardar Patel Statue and Kaziranga expansions.
- Private property rights precede and limit state power, shielding the poor from violence disguised as public interest.

**By Sourya Banerjee**

* * *

*“It is not true that the legislator has absolute power over our persons and property. The existence of persons and property preceded the existence of the legislator, and his function is only to guarantee their safety.*”― Frederic Bastiat, The Law

As surprising as it may seem, people on both extremes of the political spectrum are in agreement when it comes to opposition to private property. While their reasons may be different, the overall effect on people remains the same. Almost invariably, it’s the poor and the marginalized who lose out and suffer, in the absence of a fundamental right to property.

Before going further, it is vital to understand that India did not always lack a fundamental right to property. Under the Constitution of India, 1950, the right to property was included as a ‘*fundamental right*’ under Article 19(1)(f) and Article 31 in Part III, making it an enforceable right. Historically this right can also be traced back to Section 299 of the Government of India Act, 1935 and the Universal Declaration of Human Rights of 1948. Additionally, it is evident from the Constituent Assembly debates that the Drafting Committee clearly understood the importance of such a right. However, it was during the first decade of our independence that the then Government, in an effort to provide economic justice to the deprived, clashed with land-owning zamindars and threw out *the baby with the bathwater*. The fundamental right to property was effectively abolished by the 4th Amendment to the Constitution of 1955. What began as an attempt to redistribute land to allow a newly independent population a chance at a better future ended up being used to seize land and property, including printing machines from media houses, from the citizens at the whims and fancy of a Government with complete [power](https://ccs.in/internship_papers/2002/25.pdf). It was not until much later that a much less enforceable and actionable constitutional right to property was added to the Constitution. But the said [Constitutional right](https://www.barandbench.com/news/litigation/right-to-property-still-a-constitutional-right-supreme-court-reiterates) is merely a weak reflection of what the fundamental right was meant to be and has been unable to prevent marginalized people from being disposed off their property. Some examples of this:

a) In February 2019, the [Supreme Court had ordered](https://www.scconline.com/blog/post/2019/02/20/sc-orders-forced-eviction-of-more-than-1000000-tribals-from-from-forestlands-across-16-states/) the forced eviction of more than 1,000,000 tribal and other forest-dwelling households from forest lands across 16 states. The court’s orders had come in a case questioning the validity of the Forest Rights Act, 2006. The petitioner, who was a wildlife preservation NGO, had demanded that all those whose claims over traditional forest lands were rejected under the law should be evicted by state governments as a consequence. It is important to point out here, that those being evicted were indigenous tribal communities that did not have historic government records for land ownership. In this specific case, even the state governments had admitted that they did not really follow the procedure before rejecting the claims and were willing to review the claims. Thankfully, the Supreme Court had [stayed](https://www.thehindu.com/news/national/sc-stays-feb-13-order-for-eviction-of-tribals-forest-dwellers/article26396154.ece) the Order before the tribal people were forcibly displaced.

b) On the 3rd of September 2020, the Supreme Court [ordered](https://www.livelaw.in/top-stories/sc-orders-removal-of-48000-slum-dwellings-around-delhi-rail-tracks-in-3-months-stops-courts-from-granting-stay-162324?fbclid=IwAR0VnEm819z4Wc63DDaDVA6EyQFENtrt4dSwQhrbOsUc2kxZY8iF7jSzAqQ#.X1Bo8-vQUDg.twitter) 43,000 slum dwellers to be removed from their dwelling places near the railway lines. Surprisingly, the Court order stated that it could not be stayed in future by any authority. The slum dwellers are going to be displaced and the railways have no real obligation to resettle or compensate them. Allegedly the slum dwellers were a cause of nuisance, but the apartment complex right next to the slums are deemed to be of no concern by both the SC and the Railways. 

3) The Sardar Patel Statue, which seems to have been erased from media memory, perhaps because it did not generate the revenues the Government had expected, had resulted in thousands of tribals [disposed off](https://www.landconflictwatch.org/conflicts/tribals-affected-by-statue-of-unity-boycott-inauguration-yet-to-receive-compensation) their lands in the name of tourism and regional development. Those displaced includes many tribal families who were never given a choice or [compensated](https://www.deccanherald.com/national/west/tribals-from-villages-around-statue-of-unity-stage-protest-887048.html).

4) In October 2020, the Guwahati High Court passed an order asking Kaziranga park authorities to evict “illegal” occupants of the park, as the park expanded to almost twice its original size. The so-called “illegal” occupants are farmers and tribal families who have lived there for [generations](https://www.theglobeandmail.com/world/article-hundreds-evicted-as-indias-kaziranga-national-park-expands/). 

Such examples are littered across our past and present, instances of Government removing tribal communities from their own lands, either due to NGO interventions, or cronies wanting to seize the land without consent of adequate compensation. In the absence of a Fundamental Right to Property, it’s almost always the poor and the marginalized who have stuffed. It is important to remember that Ms Kangana Ranaut got the Bombay HC to [stay](https://economictimes.indiatimes.com/magazines/panache/kangana-leaves-himachal-home-for-mumbai-bmc-all-set-to-demolish-illegal-alterations-at-her-bandra-office/articleshow/78010760.cms#:~:text=The%20Bombay%20High%20Court%20has,a%20reply%20on%20actor's%20petition.&text=The%20actress%20had%20sought%20a,from%20the%20Bombay%20High%20Court.) the destruction of her allegedly illegal construction by BBMC within 24 hours, through an urgent hearing in the middle of a pandemic. This was during the same month when slum dwellers were not even allowed to seek a stay against the order rendering them homeless. 

In Mumbai, it is well known that the once planned Peddar Road Flyover was scrapped because of influential individuals, including Lata Mangeshkar. The reasons for their opposition ranged from possible damage to nearby [buildings](https://economictimes.indiatimes.com/magazines/panache/kangana-leaves-himachal-home-for-mumbai-bmc-all-set-to-demolish-illegal-alterations-at-her-bandra-office/articleshow/78010760.cms#:~:text=The%20Bombay%20High%20Court%20has,a%20reply%20on%20actor's%20petition.&text=The%20actress%20had%20sought%20a,from%20the%20Bombay%20High%20Court.) to the flyover [blocking ventilation](https://mumbaimirror.indiatimes.com/mumbai/cover-story/pedder-road-flyover-plan-fails-crz-test/articleshow/15675770.cms) to Ms Mangeshkar’s house. It must be understood that those with power and influence do not necessarily lose the power or influence when a government suspends the Fundamental Right to Property. By virtue of their influence, they are still safeguarded from having their property rights violated. The Fundamental Right to Property was always supposed to protect those without power and influence against the acts of a State – whether it’s a State which is on a vengeful campaign to seize property in the name of ‘*[revenge](https://www.hindustantimes.com/india-news/supreme-court-notice-to-up-on-confiscating-property-of-anti-caa-protesters/story-hEvkFmQVfX7JG81cg3E9DJ.html)*‘ or a State which helps some crony remove tribals and seize their land.

So to those who say “*property is theft*“, “*property ownership is violence*“, “*the State has absolute right over all property*“; I would ask them to look at the tribal families, slum dwellers, among thousands of others dispossessed of their property by the State, and tell them that the State act of seizing their land and rendering them homeless is not violence, but their owning land, they have historically lived on, is.

*Read more: [Women won’t recover easily from India’s pandemic](https://spontaneousorder.in/women-wont-recover-easily-from-indias-pandemic/)*

* * *

**About Sourya Banerjee**

Sourya is the Project Associate for CCS Academy in Hyderabad. A BBA-LLB (Hons.) degree holder, Sourya used to practice law in Hyderabad before joining CCS. Sourya has also worked with numerous non-profits social organizations including Red Elephant Foundation, and Red Dot Foundation and also written on law and policy for online platforms such as LiveLaw, The Logical Indian, Qrius etc. An ex- Students for Liberty Hyderabad Local Coordinator, in his free time, Sourya runs a citizen journalism platform called Arguendo.

## Women won’t recover easily from India’s pandemic

Original: https://www.spontaneousorder.in/p/women-wont-recover-easily-from-indias-pandemic

Author: Spontaneous Order

Published: 2020-12-21T13:33:45.000Z

Topics: women-labor-participation, covid-19-impact, urban-inequality, gender-roles

> Amid the Covid-19 crisis, three out of four Indians are experiencing their first recession. As might be expected, women are bearing the brunt of the pain — and the consequences could be long-lasting. A tiny elite of urban, educated women has benefite...

**Summary:**

India's COVID-19 recession has disproportionately burdened women, exacerbating their already low labor force participation and hindering long-term economic independence, in a classical-liberal critique of disrupted market arrangements and cultural barriers. While a tiny urban elite of educated women saw a 7% rise in formal labor participation from April to July 2020 per LinkedIn data, most women in informal sectors like domestic work suffered mass layoffs as affluent households fired nannies, cleaners, and drivers amid slum overcrowding that made distancing impossible, opting instead for gadgets over advocacy for better living conditions. CMIE data shows women's participation plummeted to 11% (vs. 71% for men) with 17% unemployment (vs. 6% for men); by November 2020, men recovered most lost jobs while women bore nearly half the remaining losses. Young women in their early 20s saw participation drop from 14.3% to 8.7%, unlikely to rebound quickly due to family expectations, school closures, and competition. Household labor imbalances worsened as men's chore-sharing declined post-spring lockdowns per Ashwini Deshpande's study, increasing women's unpaid burdens and financial dependence on families or a strained state, stalling India's path to gender economic freedom.

**Key points:**

- COVID-19 lockdowns led urban elites to fire predominantly female domestic workers rather than improve slum conditions, deepening their unemployment and bargaining power loss.
- Women's labor force participation fell to 11% with 17% unemployment, versus 71% and 6% for men, per CMIE data, with young women dropping from 14.3% to 8.7%.
- Men regained most jobs by November 2020, leaving women accounting for half of persistent job losses, compounded by unequal household labor resumption.
- Pandemic disruptions like school closures increase women's unpaid work and financial dependence, impeding workforce re-entry and broader economic recovery.

**By Shruti Rajagopalan**

* * *

Amid the Covid-19 crisis, three out of four Indians are experiencing their first recession. As might be expected, women are bearing the brunt of the pain — and the consequences could be long-lasting.   

A tiny elite of urban, educated women has benefited from the shift to remote work under lockdown: A recent study released by LinkedIn, based on internal data for India, found women’s participation in the labor force actually increased by 7% between April and July. But this only applies to jobs in the formal, white-collar, urban economy — a tiny fraction of the labor market. For most Indian women, the situation is deeply worrying.

Covid-19 has exposed one of the biggest problems of urban India: Most of the wealthy and middle class live in nice neighborhoods, while those who serve their needs live in slums. In Dharavi, Mumbai’s largest slum, it is not uncommon for a few hundred families to share a single water source or toilet facility, which makes social distancing all but impossible.

The urban rich, who have ignored this reality for decades, have for the first time had to confront the living conditions of their nannies, cleaners and drivers. They have not responded by campaigning for better living conditions. Instead, they’ve fired their domestic staff and looked to replace them with the latest vacuums, baby monitors and dishwashers.

Tens of thousands of domestic workers, predominantly women, are now struggling to make ends meet. Their children are falling behind due to school closures. With so many unemployed competing for jobs, these workers are likely to have even less bargaining power in the labor market after the pandemic. Many are now depending for support on their extended families, a trend that may not reverse even when society returns to normal.

Their former employers are struggling in their own way. India has one of the worlds’ most unequal divisions of household labor between men and women. As household incomes increase, women are more likely to enjoy greater support for household work since they can afford to hire staff.

But the economic lockdown and school closures have severely disrupted this system, with the burden falling on women. A recent study by economist Ashwini Deshpande found that Indian men initially stepped in to share household chores when the spring lockdowns were imposed. By August, however, men’s time spent on housework, while still higher than pre-pandemic levels, had declined. And more educated men spent less time on domestic work than their less-educated counterparts. Gadgets can only help around the margins, especially when mothers are also tasked with watching after children who are stuck at home.

While this particular burden might be eased once India returns to pre-pandemic levels of growth and families can hire servants again, the long-term prospects for women who work outside the home are even more worrying. According to the Center for Monitoring Indian Economy, the economic shock and the pandemic have shrunk the already low labor participation rate for women even further: It’s now 11% for women compared to 71% for men. And, even with so few of them in the workforce, women have suffered a much higher unemployment rate of 17% compared to 6% for men.

The recovery, like the pandemic, has also been unequal. By November 2020, men had regained most of the jobs they’d lost during the spring lockdowns. Women accounted for nearly half of the remaining job losses.

Perhaps the most disturbing trend reported by CMIE is the impact of the pandemic on women in their early 20s. By the end of last year, young women were just beginning to recover from the twin shocks of demonetization in 2016 and the introduction of a goods-and-services tax in 2017; their workforce participation rate had climbed up to 14.3%. The recession has shrunk that rate to 8.7%.

The world over, women have trouble re-entering the workforce after losing their jobs or taking time off to have kids, and this is even truer for India, where women are culturally burdened with high family expectations. Consequently, even if India rebounds, this cohort of young women is likely to be left behind.

It’s all-too-likely that even the depressingly low participation rates of women in the workforce will not recover quickly. The overall economic slowdown, school and daycare closures, as well as the need to bring children back up to speed in schoolwork, will slow the process of rejoining the economy for many. This doesn’t bode well either for India’s economy or its women. Household incomes will decline and women specifically will become more financially dependent on their families or the state, which itself is struggling to fund a proper safety net.

The road to economic and social independence for India’s women was already a daunting one. The pandemic is making a bad situation dangerously worse.

*This article was originally published in the [Deccan Herald](https://www.deccanherald.com/national/women-won-t-recover-easily-from-india-s-pandemic-929460.html) on 20 December, 2020.*

*Read more: [Maternal Mortality Ratio in India: How far have we come?](https://spontaneousorder.in/maternal-mortality-ratio-in-india-how-far-have-we-come/)*

* * *

**About Shruti Rajagopalan**

Advisor, Centre for Civil Society Senior Research Fellow, Mercatus Center at George Mason University

## Maternal Mortality Ratio in India: How far have we come?

Original: https://www.spontaneousorder.in/p/maternal-mortality-ratio-in-india-how-far-have-we-come

Author: Spontaneous Order

Published: 2020-12-18T16:32:29.000Z

Topics: maternal-mortality, janani-suraksha-yojana, women-empowerment, health-incentives

> Maternal health is the building block of any developing country. Ensuring the well being of mothers is to ensure the progress of society in terms of health and development of its citizens. Universal access to quality maternal care and neonatal care ser...

**Summary:**

India's maternal mortality ratio (MMR) has declined modestly from 130 per 100,000 live births in 2014-2016 to 122 in 2015-2017, driven by the Janani Suraksha Yojana (JSY), a 2005 conditional cash transfer program under the National Rural Health Mission that boosted institutional deliveries from low levels—e.g., 10% in Uttar Pradesh with 517 MMR in 2001-2003—to 72% by 2009, especially among disadvantaged castes. States like Kerala exemplify success with 97% institutional deliveries and 110 MMR. However, JSY's incentive structure, reliant on ASHA workers, failed to improve postnatal care, iron-folic acid consumption, or overall MMR, as increased workloads degraded care quality and emergency response for complications. The author critiques this from a classical-liberal lens, arguing that deeper barriers—women's illiteracy, economic dependence, patriarchal control over reproductive decisions, child marriage, and clashes between formal health institutions and informal customs—undermine progress. Empowering women through education on health, bodily autonomy, family planning, and safe abortions is essential. JSY should incorporate counseling and monitor informal institutions like marriage norms to sustainably lower MMR toward SDG targets.

**Key points:**

- JSY dramatically increased institutional deliveries to 72% by 2009 but did not reduce MMR due to poor care quality and flawed ASHA incentives.
- States with high institutional deliveries like Kerala (97%) have lower MMR (110) compared to Uttar Pradesh (517 MMR with 10% deliveries in 2001-2003).
- Women's education and economic status strongly correlate with better maternal care utilization, necessitating empowerment to overcome patriarchal barriers.
- Policies like JSY must address informal institutions such as child marriage and family decision-making through counseling on family planning and abortions.

**By Reetika Raj**

* * *

Maternal health is the building block of any developing country. Ensuring the well being of mothers is to ensure the progress of society in terms of health and development of its citizens.  Universal access to quality maternal care and neonatal care services is pivotal to achieving the first Sustainable Development Goal (SDG) – to reduce the global maternal mortality ratio to less than 70 per 1,00,000 live births by 2030. Efforts to reach this goal have to come from multiple fronts, but only the quality of services provided can ensure their sustainability. 

India has a history of tackling maternal mortality with more than two decades of committed safe motherhood programming. In 1950 – 1970, maternal health care started on the right note as the first five-year plan focussed on target based family planning approach. But a considerable setback were forced sterilisations during the Emergency (1975 – 1977), leading to substandard childbirth care and overall maternal safety. The discussion around quality in maternal care in India came into play only in the 2000s, which was heavily influenced by national policies and economic development as well as global trends in health and development priorities. Quality of care encompasses both the technical competence of service providers and patient satisfaction with the treatment received.

Several studies have shown that states with the highest number of institutional deliveries accounted for far less Maternal Mortality Ratio (MMR) in the country. [Kerala](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2761784/), for example, had the highest percentage of institutional deliveries, i.e. 97% and accounts for the lowest MMR in India; 110 maternal deaths per 100,000 live births. On the flip side, a state like Uttar Pradesh had 517 MMR with only 10% of institutional deliveries in 2001-2003. In light of this, the Government of India rolled out one of the most extensive conditional cash transfer programs in the world, [Janani Suraksha Yojana  2005](http://nhp.gov.in/janani-suraksha-yojana-jsy-_pg), (JSY). Conditional Cash Transfers (CCT) are quite popular in low or middle-income countries (World Bank, [2015](https://documents.worldbank.org/en/publication/documents-reports/documentdetail/993841468322435735/closing-the-gap-the-state-of-social-safety-nets-2015)). While JSY was designed to benefit new mothers and to increase institutional deliveries in states,  it’s prime objective remains to lower the Maternal Mortality Rate.

Maternal Mortality Ratio (MMR) has seen a [decline](https://www.thehindu.com/sci-tech/health/india-registers-a-steep-decline-in-maternal-mortality-ratio/article32106662.ece) from 130 per 1 lakh live births in 2014-2016 to 122 per 1 lakh live births in 2015-2017. These achievements are a result of the quality of care provided in maternal institutional deliveries.

Janani Suraksha Yojana (JSY) was launched 12 April 2005, under the umbrella of National Rural Health Mission to modify the existing National Maternity Benefit Scheme. JSY integrated cash assistance with antenatal care during the pregnancy period, institutional care during delivery and the immediate postpartum period. The JSY program is a 100% centrally sponsored scheme. The proportion of institutional deliveries saw a phenomenal [increase](https://www.banglajol.info/index.php/JHPN/article/view/13416) after the implementation of JSY, so much so up to 72% in 2009 and almost most of the beneficiaries belonged to disadvantaged sections of the society like Scheduled Castes women, Scheduled Tribes and other backward castes. 

The JSY program is introduced and supported at the community level by accredited social health activists(ASHA), an incentivised village resident urging women to seek maternal health facilities in public health institutions over. This turned out to be a significant structural flaw in the JSY program. Incentives did motivate women to avail medical deliveries from local health institutions. Still, it [did not improve](https://wcd.nic.in/acts/rapid-survey-children-rsoc-2013-14) other health indicators like postnatal check-ups or proportion of women consuming iron and folic tablets. Incentives matter, but it’s the incentive structure of the JSY program that has led to the collapse of other maternal health indicators in India. The role of ASHA workers is seen to deteriorate post-delivery especially in terms of postnatal visits as the efforts to locate the mother, the cost of travel etc, is higher than the small amount of cash received by them.

The central point of contestation is whether the implementation of JSY decreased the Maternal Mortality Rate in India. With the increase in institutional deliveries, the [per-case fatality ratio did decrease](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2761773/) with professional medical care. But this had little effect on MMR. The workload of healthcare workers and medical staff has also increased with institutional deliveries. The popularity of the JSY scheme has adversely affected the quality of treatment and emergency care given to pregnant women with complications.

The education and economic status of a woman are [correlated](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2761784/). Moreover, these factors also influence the use of maternal care. Illiteracy and lack of information on maternal care lead women to neglect their physical well being from an early age. Empowering women through education about their physical, mental and sexual health should be an essential aim to elevate the maternal health sector. Educated women are better suited for going through the different complexities of pregnancies and seek healthcare support when needed. When it comes to bodily rights and maternal care in India, we see a clash of formal institutions such as the healthcare sector with the informal institutions of taboos, customs, code of conduct etc. The patriarchal Indian society doesn’t give women a say over their bodies, and they are not active agents when it comes to making decisions about their reproductive health. Issues like going to a hospital for childbirth, planned parenthood, postnatal care, safe abortions etc. still fall under the jurisdiction of the man or the elders of the family. This lack of autonomy prevents women from using available contraceptives, resulting in unintended or unwanted pregnancies. Child marriage is another cause for numerous young mothers, who are too young and too constrained to take care of themselves and their babies. Deaths due to post-delivery negligence or unsafe abortions are direct results of women being insufficiently informed and not seeking proper guidance from public health institutions. A policy as widespread as JSY should include monitoring informal institutions of marriage and parenting. JSY should provide for counselling on matters of family planning and abortions to affectively decrease MMR in India.

*Read more: [How India saved its mothers with Direct Cash Transfers](https://spontaneousorder.in/how-india-saved-its-mothers-with-direct-cash-transfers/)*

* * *

**About Reetika Raj**

Reetika is s recent graduate in Masters in Political Studies from Jawaharlal Nehru University. Born and raised in the state of Jharkhand, she's keenly interested in carrying out the conversation around public policy from an academic set up to her local community and household.

## SO Basically – Episode 16 | “Swasthya, Paisa, and Direct Cash Transfer”

Original: https://www.spontaneousorder.in/p/so-basically-episode-16-swasthya-paisa-and-direct-cash-transfer

Author: Spontaneous Order

Published: 2020-12-17T21:00:22.000Z

Topics: healthcare, direct-cash-transfers, pandemic-response

> The pandemic has been a true stress test for India’s healthcare systems and has shown us how expensive healthcare can be. In this episode of SO Basically,​ we make a case for Direct Cash Transfers to improve access to quality healthcare for all Indian

**Summary:**

This short promotional post for Episode 16 of SO Basically highlights the COVID-19 pandemic as a stress test exposing the high costs and inadequacies of India's healthcare system, advocating from a classical-liberal viewpoint for Direct Cash Transfers as a means to improve access to quality healthcare for all Indians. It lacks detailed arguments or data from the episode itself.

**Key points:**

- The pandemic revealed India's healthcare system's vulnerabilities and expense.

**By Spontaneous Order**

* * *

The pandemic has been a true stress test for India’s healthcare systems and has shown us how expensive healthcare can be. In this episode of [SO Basically](https://www.youtube.com/playlist?list=PLysF1qZYkiGFX32APX8-p6AeOnev7InjZ),​ we make a case for Direct Cash Transfers to improve access to quality healthcare for all Indians.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Domestic Violence: A Pandemic in itself?

Original: https://www.spontaneousorder.in/p/domestic-violence-a-pandemic-in-itself

Author: Spontaneous Order

Published: 2020-12-14T13:50:26.000Z

Topics: domestic-violence, covid-19-lockdowns, limited-government, civil-society-solutions

> The exponential rise in the incidences of Domestic Violence cases across the world since the outbreak of Covid-19 garnered so much attention that UN Secretary-General Antonio Guterres appealed to governments to address the “horrifying global surge in do

**Summary:**

The COVID-19 lockdowns have triggered a surge in domestic violence (DV) in India, with the National Commission for Women reporting complaints doubling from 123 to 239 distress calls between March 23 and April 16, 2020, and rising from 607 cases in March-May 2019 to 1,477 in 2020; Kolkata NGO Swayam saw monthly complaints jump from 22 to 57. UN Women labels this a 'shadow pandemic' exacerbated by isolation and severed support networks. From a classical-liberal viewpoint, calls for harsher punishments and greater governmental interference fail, as they ignore entrenched patriarchy and gender inequality while worsening outcomes through victims' fears of police escalation, underreporting (the 'dark figure of crime'), social stigma, and politicized definitions that overlook diverse abuse types. State interventions risk placing women in greater danger rather than empowering them. Instead, effective solutions emphasize civil society: fund DV charities for more counselors, prioritize in-person counseling to evade abusers, create ringfenced government funds for NGO-run shelters, invest in victim-centered research on abuse drivers, and bolster local women-only support groups to combat stigma. Shifting from ineffective state-centric approaches to choice-enhancing, community-based strategies is essential to address cultural degradation of women.

**Key points:**

- COVID-19 lockdowns doubled DV complaints in India, per NCW data (123 to 239 in early 2020 period; 607 to 1,477 March-May).
- Governmental interference via harsher punishments increases underreporting due to fears of escalation, stigma, and vague DV definitions.
- Fund NGOs and charities for counselors and in-person support to help women recognize and escape abuse.
- Establish ringfenced funds for DV shelters and promote local women-only community groups to reduce stigma.
- Prioritize victim-led research for tailored solutions over generalized state interventions.

**By Rohini Anand**

* * *

The exponential rise in the incidences of Domestic Violence cases across the world since the outbreak of Covid-19 garnered so much attention that UN Secretary-General Antonio Guterres appealed to governments to address the “horrifying global surge in domestic violence”. Guterres pointed out that “for many women and girls, the threat looms largest where they should be safest: in their own homes”. Research by the [World Health Organisation](https://apps.who.int/iris/bitstream/handle/10665/85241/WHO_RHR_HRP_13.06_eng.pdf;jsessionid=3780B91D03A6CDBAD9BA46067B533FB3?sequence=1) has detailed the devastating consequences of Domestic Violence on women’s physical, mental, sexual and reproductive health.

All governments have been urged to make the prevention of violence against women a central part of their COVID-19 national response plan. [UN Women](https://www.unwomen.org/en/news/in-focus/in-focus-gender-equality-in-covid-19-response/violence-against-women-during-covid-19) have expressed their concerns that DV is itself a ‘shadow pandemic’ and we need a global collective effort to fight it. 

### How Covid-19 Lockdowns have exacerbated the existing situation

[UN Women](https://www.unwomen.org/en/news/in-focus/in-focus-gender-equality-in-covid-19-response/violence-against-women-during-covid-19) has found that the nationwide lockdown has ensured factors such as movement restrictions, cramped living conditions, disconnection from networks of social support and reduced interaction with family, friends and neighbours. In turn, this has meant that women and girls are spending extended amounts of time trapped in isolation with their abusers. 

[The National Commission of Women](https://thelogicalindian.com/gender/domestic-violence-during-lockdown-23944) (NCW), has found that in India, the number of Domestic Violence complaints has doubled from 123 distress calls to 239 DV complaints from March 23rd, 2020, to April 16th 2020. When comparing the rates of complaint from the previous year, the NCW received 607 DV cases between March to May 2019, compared to 1,477 cases in 2020. In data provided by Kolkata-based NGO, Swayam, who released a [#StopDomesticViolence](https://brandequity.economictimes.indiatimes.com/news/marketing/rediffusion-swayams-campaign-highlights-different-forms-of-domestic-violence/76953560) campaign in June, there were 22 complaints of DV violence received on average per month before lockdown, which increased to 57 complaints per month through emails and helplines. In addition, DV shelters are either closed or full, and helplines have reached [maximum capacity](https://news.un.org/en/story/2020/04/1061052).

This data clearly shows that there has been a clear rise in Domestic Violence cases amidst the nationwide lockdown. Many women who are victims of DV violence on a daily basis are more vulnerable during such lockdown periods. Covid-19 lockdowns mark a significant turning point in our discussions about how we might respond to the alarming problem of domestic and gender-based violence. 

### The Problem of Governmental Interference

Almost all solutions to address the problem of Domestic Violence cases in India have called for harsher punishment and more extensive governmental interference. However, there has been much evidence to suggest this response has failed to be effective; as it does not address the deeper motivating sentiments of the problem. Such calls fail to address the entrenched system of gender inequality and patriarchy, which is firmly embedded within the fabric of Indian society. In addition, governmental interference has been found to actually worsen the existing problem of gender and sexual-based violence in the country. Though the intended aims of calls for greater governmental interference might be to protect the welfare of women and girls’, it may have the unintended consequence of placing them in even greater danger.  

Victims’ fears that state and [police involvement](https://www.justiceinspectorates.gov.uk/hmicfrs/wp-content/uploads/the-police-response-to-domestic-abuse-an-update-report.pdf) might escalate perpetrator behaviour and make them feel less safe are widespread. The consequences of this fear are serious, as it can lead to underreporting of cases, known as the [“dark figure of crime”](http://library.college.police.uk/docs/hors/hors107.pdf). In many cases, this is due to the fear of [social stigma](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4768593/). In addition, there are differing definitions as to what “domestic violence” actually is, which means that the labelling of the term can change depending on who is using it, and risk becoming politicised. Indeed, state interference might tend to combine all the experiences of women and girls and fail to provide an effective solution for the [different types of abuse](https://www.opendemocracy.net/en/5050/domestic-violence-on-frontline-of-intersectionality/) that they experience. Generalised solutions will not work.  

### Policy and Practice Based Recommendations

-   Increased funds and attention provided to domestic abuse charities and humanitarian organisations, which could enable them to invest in more counsellors and well-being experts. This investment is essential, as such support could help women and girls to recognise that the abuse they are suffering is problematic and that there are avenues of help open to them. 
    

-   Counselling should be provided in-person where possible so that women and girls do not have to fear their abuser overhearing them if they take sessions online at home. In-person events will also allow women and girls the opportunity to escape the domestic sphere and seek support outside of their home. For many, it will be a welcome escape. 
    

-   A ringfenced Covid-19 support fund administered by governments to women’s refugee centres and shelters. This would enable them to expand their capacity which currently stands at full. 
    

-   Increased investments into developing research, to carry out more analyses of DV, gender and sexual-based violence, find out what are the mechanisms driving this type of abuse and what women and girls’ themselves think will work to address the problem. Trying to address the problem from the perspective of women and girls’ themselves, will allow for more tailored and less generalised solutions. 
    

-   More attention could be given to local and community-based solutions. Increased funding and provision into support groups, where women and girls can come together in a safe space with the help of a mediator to share their experiences. By coming together and realising that they are not the only person to be in this situation, this could help to reduce the social stigma. Locally based NGO’s and counsellors could help to preside over these sessions which would strictly be women only. 
    

Ultimately, calls for increasing governmental interference to solve the problem of DV have failed to be effective. Any discussion of domestic and sexual in India must be considered within the broader debates of perceived male superiority and cultural inferiority of women, which has led to the culturally sanctioned degradation of women. It is critical that policy and practice recommendations move away from ineffective solutions which have repeatedly been proven not to work, into better solutions which can provide more choice for women and girls in the country. 

*Read more: [How India saved its mothers with Direct Cash Transfers](https://spontaneousorder.in/how-india-saved-its-mothers-with-direct-cash-transfers/)*

* * *

**About Rohini Anand**

Rohini Anand is a MSc student in International Social and Public Policy from the London School of Economics. Her research interests lie in crime and criminal justice policy.

## COVID-19: A Boost for Digital Education in India?

Original: https://www.spontaneousorder.in/p/covid-19-a-boost-for-digital-education-in-india

Author: Spontaneous Order

Published: 2020-12-09T14:52:22.000Z

Topics: digital-divide, budget-private-schools, ed-tech-regulation, rural-education

> Schooling is among the long list of activities that have been hit hard by COVID-19. In India, all schools nationwide were shut by March 19 with a lot of ambiguity on how they would function. All the fears surrounding this ambiguity came to life when the..

**Summary:**

COVID-19 forced Indian schools online, exposing a massive digital divide: pre-pandemic, only 24% owned smartphones, 23.8% of households had internet access (14.9% rural vs. 42% urban), and 20.1% could use it. Budget private schools (BPS), serving 92 million mostly rural, low-income children, suffered most due to thin margins, fee payment issues, fee caps, and lack of digital resources, leading many to close or be sold. ASER 2020 revealed 20% of rural children lacked textbooks and one-third did no learning activities. While 10% of rural households bought smartphones (60% now have access), this often came at great cost, like selling livestock, underscoring the need for financial inclusion. From a classical-liberal view, the pandemic highlights the failure of top-down online mandates without infrastructure. Solutions lie in market liberalization: emulate Odisha's TCS partnership for teacher training and content; reduce ed-tech barriers like 18% GST and infrastructure hurdles; avoid subsidies, instead foster a business-friendly environment as Raghuram Rajan advises, enabling entrepreneurs to innovate and bridge the divide for sustainable digital education.

**Key points:**

- India's digital divide left millions of rural students, especially in budget private schools serving 92 million children, without effective online learning during COVID-19 school closures.
- ASER 2020 showed 20% of rural children had no textbooks and one-third engaged in no learning activities amid the pandemic.
- 10% of rural households bought new smartphones for education, but access remains uneven and costly for poor families.
- Governments should reduce regulatory barriers and 18% GST on ed-tech to enable private innovation, rather than direct interventions.
- Create a neutral business environment to let entrepreneurs develop digital education solutions, per Raghuram Rajan's advice.

**By Swati Singh**

* * *

Schooling is among the long list of activities that have been hit hard by COVID-19. In India, all schools nationwide were shut by March 19 with a lot of ambiguity on how they would function. All the fears surrounding this ambiguity came to life when the government asked the schools to move online, without addressing the massive digital divide that plagues India. 

### **How digital was India before the pandemic?**

A [2018 global survey](https://www.thehindu.com/news/national/24-pc-of-indians-have-a-smartphone/article26212864.ece) conducted by Pew Research Centre showed that nearly 64% of Indian respondents owned a mobile phone, but only 24% owned a smartphone. Despite the rise in wireless users in recent years, urban and rural India are miles apart in their online presence. The [75th report of the National Sample Survey Office (NSSO 2017-18](http://mospi.nic.in/sites/default/files/publication_reports/mospi_Annual_Report_2017-18.pdf)) shows that only 23.8% of households in India have access to the internet. The gap between rural and urban India is apparent, with only 14.9% of rural households and 42% of urban households having internet access. 

This gap in access to the internet also spills over to the ability of people to use it – only 20.1% of Indian households can use the internet, with rural households at 13% and urban at 37.1%.

With these numbers, you can imagine the number of students that must have suffered when schools moved online.

### **Budget Private Schools & Rural India in the pandemic:**

It is [estimated](https://ccs.in/sites/default/files/attachments/faces-of-bps-in-india-report2018.pdf) that 92 million children in India are enrolled in Budget Private Schools (BPS) that offer education at affordable rates. BPS have been the [hardest hit](https://www.straitstimes.com/asia/south-asia/indias-budget-private-schools-struggle-to-survive-amid-covid-19) for a number of reasons. These schools sustain on extremely thin margins, given that they charge very little fees from parents. Moreover, the children in these schools belong to the most economically vulnerable section of society. Their families have been hit hard too, losing their capacity to pay school fees. Naturally, BPS didn’t have the resources to make a rapid shift to digital learning. Even if we look past the students’ ability to learn online, most BPS teachers are also ill-equipped for online teaching.

Coupled with parents’ inability to pay for their children’s education, many state governments also imposed a cap on fees. All of this made survival a huge challenge for these schools, leading to a number of them being put up [for sale](https://timesofindia.indiatimes.com/india/covid-effect-over-1000-schools-up-for-sale-across-india/articleshow/78197285.cms).

Access to quality education at K-12 and higher levels has been a challenge in rural India for many years. Now, with learning moving to an online mode, this challenge has further intensified for these students due to poor access to electricity, smartphones, computers and the internet. 

About 20% of rural children have no textbooks at home, according to the [Annual State of Education Report (ASER)](http://img.asercentre.org/docs/ASER%202020/ASER%202020%20REPORT/aser2020nationalpressrelease_english.pdf) survey conducted in September 2020. In the week of September when this survey was conducted, about [one in three rural children](https://www.thehindu.com/news/national/coronavirus-20-of-rural-school-children-had-no-textbooks-due-to-covid-19-impact-finds-aser-survey/article32966299.ece) had done no learning activity at all.

### **Still, the pandemic might have slightly helped in bridging the digital divide:**

The [15th Annual Status of Education Report (ASER 2020](http://img.asercentre.org/docs/ASER%202020/ASER%202020%20REPORT/aser2020nationalpressrelease_english.pdf)) found that 10% of all rural households in India purchased a new smartphone in the pandemic to ensure that children were not cut off from education. It also reported that 60% of all students had access to a smartphone at home (in rural India). But these numbers might be hiding more than they reveal.

Heartbreaking stories like that of [Kuldip Kumar](https://www.tribuneindia.com/news/himachal/man-sells-cow-to-buy-smartphone-for-online-studies-of-his-children-116524), a man who sold his cow (his only source of income) to buy a smartphone for his children to continue their online education came to light during the pandemic, and he wasn’t the only struggling parent. Thousands, if not lakhs of parents have struggled to ensure the continued education of their children during the months of lockdown. This tells us just how important the financial inclusion of rural India is in today’s day and age. Livelihood and education shouldn’t be an either-or decision for anyone, especially when both of them are fundamental rights.

Thus, even though the numbers do paint a positive picture in terms of rural India’s journey towards digital education, they are far from comforting.

### **So, what should be done?**

The digital divide in India has led to a massive learning loss for students in rural and urban areas alike. Access to technology and the internet is an urgent requirement and cannot be a luxury anymore, especially with this rising need for digitisation of education.

In times like these, realistic solutions lie in opening up the market for education. The Government of Odisha, for example, [recently partnered](https://timesofindia.indiatimes.com/city/bhubaneswar/odisha-govt-ropes-in-tcs-to-help-strengthen-online-education/articleshow/79219693.cms) with Tata Consultancy Services (TCS), to train teachers on the effective use of technology in teaching and to provide digital content to students. Following Odisha, other state governments should also reduce entry and regulatory barriers for ed-tech companies that are developing innovative solutions.

One of the biggest challenges ed-tech companies in India face is the [lack of infrastructure](https://inc42.com/features/indias-edtech-boom-a-tale-of-digitisation-engagement-and-covid-19/) in terms of availability of decent internet, access to laptops with optimal screen size, or even means to purchase devices for the family. Some regulatory barriers also hinder ed-tech penetration in India, for instance, all edtech services are under a relatively high [18% GST bracket](https://inc42.com/features/budget-2019-edtech-startups-demand-gst-be-cut-from-18-to-5/). A tax relief, especially during COVID-19, could go a long way in ed-tech reaching as many Indians as possible.

I’m tempted to say that the government should encourage investment in ed-tech, but former [RBI governor Raghuram Rajan](https://inc42.com/features/budget-2020-india-edtech-startups-call-for-bigger-focus-on-rd-from-sitharaman/) counters that perfectly: “*Let us not encourage anything; that might be the surest way of killing it. Instead, let us make sure we create a good business environment that can support any kind of activity, and then let our myriad entrepreneurs figure out what new and interesting businesses they will create.”*

A global economic catastrophe strikes the world at least once every decade. Covid-19 has provided the much needed “look in the mirror” for India’s digital and educational infrastructure. It’s time we act fast.

*Read more: [How India saved its mothers with Direct Cash Transfers](https://spontaneousorder.in/how-india-saved-its-mothers-with-direct-cash-transfers/)*

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## How India saved its mothers with Direct Cash Transfers

Original: https://www.spontaneousorder.in/p/how-india-saved-its-mothers-with-direct-cash-transfers

Author: Spontaneous Order

Published: 2020-12-08T14:34:27.000Z

Topics: direct-cash-transfers, maternal-health, healthcare-access, indian-welfare-schemes

> The Coronavirus pandemic has shown us how unaffordable health care in India is. In the last few months, patients have had to pay bills running in lakhs at private hospitals for Covid-19 treatment. There is no way ordinary Indians can afford that, and th..

**Summary:**

The post argues that Direct Cash Transfers (DCT) outperform subsidies in enhancing healthcare access, exemplified by India's pandemic response and the Pradhan Mantri Matru Vandana Yojana (PMMVY). Amid COVID-19, when 70% of economic activities halted, the government delivered relief to over 800 million people—two-thirds of the population—via DCT, providing immediate aid, boosting consumer spending, and averting economic slowdown. DCT avoids subsidy pitfalls like poor targeting, corruption, and leakages, while empowering beneficiaries with choice and freedom to select goods/services. Across 331 schemes, DCT improves public service delivery. PMMVY, launched in 2017, gives Rs 5,000 in three installments to pregnant/lactating women for their first child (plus Rs 1,000 under JSY for institutional delivery), targeting low institutional-delivery states like Uttar Pradesh and Bihar. It addresses India's Maternal Mortality Rate—still double UN SDG targets—by incentivizing checkups and nutrition, doubling institutional deliveries from 38.7% to 79% (2006-2016). Implementation efficiency rose from 38% in 2018 to 90% in 2019, with 1.28 crore beneficiaries receiving Rs 5,280 crore by February 2020. DCT fosters financial inclusion, preventive healthcare, and individual agency, benefiting health and economy from a classical-liberal viewpoint.

**Key points:**

- Direct Cash Transfers to 800 million during COVID-19 provided immediate relief and stimulated spending, outperforming leaky subsidies.
- PMMVY delivers Rs 5,000 in installments to pregnant women, doubling institutional deliveries to 79% and improving maternal/child health outcomes.
- DCT across 331 schemes reduces corruption and leakages while expanding beneficiary choice and freedom.
- Implementing more DCT schemes promotes preventive healthcare, financial inclusion, and economic growth.

**By Upasha Kumari**

* * *

The Coronavirus pandemic has shown us how unaffordable health care in India is. In the last few months, patients have had to pay bills running in lakhs at private hospitals for Covid-19 treatment. There is no way ordinary Indians can afford that, and that is the case for all quality healthcare services in India. Times like these make us wonder: *how can public welfare schemes be used to improve access to healthcare?*

During the initial months of the pandemic, when [70 per cent of the economic activities in the country came to a halt](https://www.downtoearth.org.in/news/economy/cash-on-delivery-how-india-has-taken-up-dbt-in-the-times-of-covid-19-72247), the government resorted to a “Direct Cash Transfer” (DCT) mechanism [to provide relief to over 800 million or two-thirds of India’s population.](https://www.downtoearth.org.in/news/economy/cash-on-delivery-how-india-has-taken-up-dbt-in-the-times-of-covid-19-72247)  In fact, many economists have argued in favour of [DCT](https://www.marketplace.org/2020/04/09/covid-19-low-income-help-cash-transfers-esther-duflo/) as it is a means of providing immediate relief and confidence to the underprivileged people in an already economically and socially polarised society. Moreover, it is a sound economic policy measure as it encourages consumer spending and prevents the slowing down of the economy. 

The Direct Cash Transfers mechanism involves a direct transfer of money to the bank account of the beneficiaries instead of offering them goods and services at subsidized prices. Policy experts prefer Direct Cash Transfers over subsidies because the latter is prone to failures such as improper targeting of beneficiaries, poor administrative capacity, corruption and leakages. Moreover, DCT expands the choice and freedom of the beneficiaries and they can avail any good or service of their choice from any seller or service provider in the market.  

The benefits of Direct Cash Transfers are not limited only to the times of crisis; about [331 government schemes of the Indian government resort to DCT](https://dbtbharat.gov.in/scheme/scheme-list) for improving public service delivery in the country. 

[

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**Figure 1: Target beneficiaries of DBT schemes from 2013-2021**

**Source**: [DownToEarth](https://www.downtoearth.org.in/news/economy/cash-on-delivery-how-india-has-taken-up-dbt-in-the-times-of-covid-19-72247) 

The Pradhan Mantri Matru Vandana Yojana is an example of a Direct Cash Transfer scheme that has improved healthcare outcomes for India’s mothers. Let’s see how.

India’s Maternal Mortality Rate (MMR), or the number of maternal deaths per 1 lakh registered childbirths, has reduced over the last few years but it’s still double the targets set by the UN in their Sustainable Development Goals. One of the reasons for maternal deaths is the lack of institutionalised delivery, which means delivery that does not take place at a medical facility staffed by skilled delivery assistance, especially in rural areas. 

Started from 1st January 2017, [the Pradhan Mantri Matru Vandana Yojana (PMMVY) scheme](https://wcd.nic.in/sites/default/files/PMMVY%20Scheme%20Implemetation%20Guidelines%20._0.pdf) \[rechristened from the erstwhile [Indira Gandhi Matritva Sahyog Yojana (IGMSY)](https://niti.gov.in/writereaddata/files/document_publication/IGMSY_FinalReport.pdf)\],  provides a cash incentive of Rs 5000 in three instalments to pregnant and lactating women aged 19 years or above for their first child. The first installment is given at the time of registration of pregnancy at the Anganwadi Center; the second installment is given after three months of delivery at the time of registration of childbirth and the third installment follows later.  Further, an additional Rs 1000 is given to the woman under Janani Suraksha Yojana (JSY) after she avails institutional delivery of her child. By receiving the money directly in her account, the mother can access any of the three instalments from any location of the country. Thus, this scheme caters to the migrating class of people. Moreover, the mother can exercise her agency on how she wants to spend the money on herself and her child. Not only does this scheme aim at the financial empowerment of the woman but it also attends to her and the child’s health during and immediately after pregnancy. 

The PMMVY scheme caters to the poor pregnant women living in [states that have low institutional delivery rates](https://main.mohfw.gov.in/sites/default/files/03Chapter.pdf), such as Uttar Pradesh, Uttarakhand, Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh, Assam, Rajasthan, Odisha and Jammu and Kashmir. The provisions of the scheme incentivize pregnant and lactating women to follow up their medical check-up from time to time even after the delivery of the child. Usually, expecting mothers from a poor socio-economic background neglect their prescribed medical checkups due to a lack of funds. According to the statistics presented by the Department of Women and Child Development in 2018,  [only 21% of the pregnant women attain full ante-natal checkups and 37 out of every 1000 infants born die within the first year of birth](https://jgu.s3.ap-south-1.amazonaws.com/jsgp/Ajay+Gautam.pdf). Thus, the money being given under the scheme is crucial for those women who live in poverty. The scheme aims to reduce maternal and child mortality rate by attending to the needs of the pregnant women through routine medical checkup and improved nutritional intake. By receiving the money directly in her account, the woman can exercise her agency by deciding how she wants to spend the money on herself and her child. Not only does this scheme aim at the financial empowerment of the woman but it also attends to her and her child’s health during and immediately after pregnancy. 

The efficiency in the implementation of the Scheme which was [38% in 2018 has touched the 90% mark in 2019](https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1601734). It is primarily due to the conditional cash transfer schemes of the government that [the rate of institutional delivery has doubled from 38.7 to 79% during 2006-2016.](https://bmcpregnancychildbirth.biomedcentral.com/articles/10.1186/s12884-019-2473-6) (IGMSY was in force since 2010). As of February 2020, [1.28 crore beneficiaries received Direct Benefit Transfer under the PMMVY scheme directly in their bank accounts amounting to Rs. 5280 crore.](https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1601734)  

By devising more direct cash transfer schemes, not only can we improve the overall health of the marginalized communities but we can also significantly affect their health behaviour. Such schemes will encourage people to focus on preventive healthcare. Further, DCT improves financial inclusion, it encourages consumer spending, and it is likely to expand the choice and freedom of the individual. Implementing DCT in healthcare is a win-win situation for healthcare and the economy. 

*Read more: [Loan Waivers Fail to Address Farmers’ Distress in India](https://spontaneousorder.in/loan-waivers-fail-to-address-farmers-distress-in-india/)*

* * *

**About Upasha Kumari**

Upasha has pursued her Bachelor's in Political Science from Lady Shri Ram College for Women, University of Delhi. She's currently a final year student at the Department of Political Science in the same university. Her key interest areas include development issues, public policy, gender, and Indian government and politics.

## SO Musings: Economic Freedom by M.A. Venkata Rao

Original: https://www.spontaneousorder.in/p/so-musings-economic-freedom-by-m-a-venkata-rao

Author: Spontaneous Order

Published: 2020-12-04T16:24:36.000Z

Topics: economic-freedom, negative-freedom, socialism-critique, classical-liberalism

> The ideal of ‘Freedom’ is cherished and sought by thinkers of all ideological hues. However, when it comes to the specifics of the concept, philosophers hold widely divergent views. Over time these different views of the idea of Freedom come to be gro

**Summary:**

M.A. Venkata Rao, in a 1958 Indian Libertarian article, deconstructs economic freedom, highlighting the divide between positive and negative conceptions that splits the modern left and right. Left-leaning intellectuals view negative economic freedom as capitalist exploitation of workers, claiming true freedom exists only in socialist societies; Rao counters this by examining the Soviet Union, where such ideals failed. He argues leftist thought—manifesting in socialism and communism—gains fanatic hold through emotion: sympathy for the underdog mixed with hatred for society's favored, amplified by inability to experiment socially or measure outcomes under dictatorships. Socialism originated from frustration post-French Revolution, where political democracy granted legal equality and franchise but left workers powerless against capitalists without capital, failing to deliver economic freedom alongside political liberty. Reformers' faulty analysis of economic processes led to erroneous remedies, blinded by 19th-century European humanitarianism (excluding Asia/Africa) and Marx's politicization of masses via hunger, jealousy, and greed, promising immediate economic salvation. From a classical-liberal lens, this emotional current overrides rational refinement, perpetuating flawed policies.

**Key points:**

- Leftists equate negative economic freedom with capitalist exploitation, seeing true freedom only in socialism, but Soviet evidence contradicts this.
- Leftist ideologies thrive on emotional sympathy for underdogs and hatred for the privileged, hindering objective analysis.
- Socialism arose from post-French Revolution frustration that political democracy failed to grant workers economic bargaining power without capital.
- Reformers' faulty economic analysis, fueled by humanitarianism and Marxism, produced misguided remedies like communism.

**By Spontaneous Order**

* * *

*The ideal of ‘Freedom’ is cherished and sought by thinkers of all ideological hues. However, when it comes to the specifics of the concept, philosophers hold widely divergent views. Over time these different views of the idea of Freedom come to be grouped into two categories – positive freedom and negative freedom. In fact, it is this basic distinction which divides the modern left and the modern right, especially in the economic domain, i.e. Economic Freedom.*

*Shri M. A. Venkata Rao in this article published May 1958 edition of the **Indian Libertarian** magazine, deconstructs the concept of economic freedom. He writes that for left-leaning intellectuals, Negative economic freedom is actually economic exploitation by the capitalists of the working class and true economic freedom can only be experienced in a socialist society. However, when he examines the application of this concept in the erstwhile Soviet Union, he concludes the opposite.*

The entire stream of thought, feeling and policy, (social, economic and political), now called Leftist, and issuing in various forms and degrees of socialism and communism illustrates how a partial truth can obtain strong and fanatic hold of whole generations and large areas of globe when it is supported by a major emotion. Leftist thought is borne on a swift and strong current of emotion; namely sympathy with the under-dog, mixed with hatred for the favoured ones of society. The tendency is assisted by a number of factors such as the impossibility of experimentation in social affairs, and the limited opportunity for even statistical measurement even when dictatorial governments introduce changes by force.

**Frustration, The Main Basis** 

Socialism and communism have ostensibly originated in the sense of frustration that leaders of progress experienced with the course of democracy in European countries, after the French Revolution. It was found that political democracy brought equality no doubt in the legal sense but without capital the worker benefitting· little or nothing by the new equality and new right of franchise. Equality before the law did not come on him the capacity to bargain with the capitalist employer. Hence they felt that the goal of “earthly paradise” was yet far off from the large majority of the people, who could not resist the exploitation of the capitalist class. It was felt poignantly that economic freedom should be added to political freedom, if democracy and its great ideals of liberty, equality and fraternity were to be realised in any significant measure. The problem was how to put the substance of humanism into the framework of democracy.  

But the analysis the reformers made of the economic process was faulty, and hence the remedy they came to suggest for the extension of political freedom, to include economic freedom, was also faulty. But the emotion of humanitarianism so widespread in the nineteenth century in Europe (which however halted before the lesser breeds without the law in Asia and Africa) blinded thinkers to the necessity of fuller analysis and riper consideration. To this must be added the Marxist working class movement which prevented the refinement of. the vital ideas of socialism and communism by politicalization and even militarisation of the masses mobilising their hunger, jealousy and greed. Marx offered to the fascinated gaze of the poor and disinherited the ecstatic hope of economic salvation here and now. 

To read the full article, visit page number 11 on this [link](https://indianliberals.in/the-indian-libertarian/the-indian-libertarian-may15-1958.pdf).

Read more: [Should We Alter Our Constitution?](https://spontaneousorder.in/so-musings-should-we-alter-our-constitution/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Spontaneous Dialogue Ep 3: Politics of Education Reform

Original: https://www.spontaneousorder.in/p/spontaneous-dialogue-ep-3-politics-of-education-reform

Author: Spontaneous Order

Published: 2020-12-04T13:13:00.000Z

Topics: education-reform, nep-2020, indian-liberalism

> In this episode of Spontaneous Dialogue, Prashant Narang, Associate Director, Research, CCS, speaks to author Rajeev Mantri about the “Politics of Education Reforms”. At this critical juncture, post the National Education Policy (NEP 2020), it is nece

**Summary:**

This post is a brief promotional announcement for Episode 3 of the Spontaneous Dialogue podcast, where Prashant Narang interviews Rajeev Mantri on the 'Politics of Education Reform' post-National Education Policy (NEP 2020). It emphasizes the need for structural reforms to liberate India's education system, drawing from Harsh Madhusudhan and Rajeev Mantri's book 'A New Idea of India,' which critiques pseudo-socialism from a classical-liberal perspective. The content is fragmentary, primarily driving listens rather than detailing arguments.

**Key points:**

- Podcast episode discusses politics of education reforms at a critical juncture following NEP 2020.
- Book 'A New Idea of India' presents critical points for liberating the education system.

**By Spontaneous Order**

* * *

In this episode of Spontaneous Dialogue, Prashant Narang, Associate Director, Research, CCS, speaks to author Rajeev Mantri about the “Politics of Education Reforms”.

At this critical juncture, post the National Education Policy (NEP 2020), it is necessary to discuss some much needed structural reforms in education. Harsh Madhusudhan and Rajeev Mantri, in their latest book “A New Idea of India”, bring forth some critical points about liberating the education system.

Listen now:

To listen to all other episodes of the Spontaneous Dialogue Podcast on your favourite platforms, click [here](https://anchor.fm/spontaneousdialogue).

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Loan Waivers Fail to Address Farmers’ Distress in India

Original: https://www.spontaneousorder.in/p/loan-waivers-fail-to-address-farmers-distress-in-india

Author: Spontaneous Order

Published: 2020-12-02T14:05:18.000Z

Topics: loan-waivers, agricultural-policy, moral-hazard, fiscal-policy

> The agricultural sector in our country faces challenges in terms of growth, sustainability, efficiency and equity. Declining productivity, lack of adequate infrastructure, high cost of farming inputs, underdeveloped market networks and small landholding..

**Summary:**

India's agricultural sector grapples with declining productivity, inadequate infrastructure, high input costs, underdeveloped markets, small landholdings, weather risks, pests, and intermediaries, yet loan waivers offer only short-term relief without tackling these root causes for growth, sustainability, efficiency, and equity. From a classical-liberal viewpoint, sound policy prioritizes long-term gains for all over short-term benefits for one group; loan waivers, often election-timed gimmicks (e.g., 1990 Union ₹10,000 Cr pre-1989 polls; 2008 Union ₹52,000 Cr pre-2009; 2014 AP ₹40,000 Cr and Telangana ₹20,000 Cr; 2017 UP ₹36,000 Cr; 2018 Maharashtra ₹34,000 Cr), foster moral hazard by encouraging defaults, disrupting credit discipline—farmers shift to nationalized banks expecting waivers, punishing honest repayers and deterring future lending. The 2008 UPA ADWDR scheme exemplified implementation flaws: CAG audit of 90,576 accounts revealed 13.5% eligible farmers excluded, 8.5% ineligible included, and 34.28% without certificates, rendering them defaulters ineligible for new loans, pushing reliance on usurious moneylenders. Landless farmers, lacking collateral or certificates, are entirely excluded. Waivers burden fiscally, fail to break debt cycles or boost productivity, and leave agrarian distress unaddressed, making them undesirable long-run policy.

**Key points:**

- Loan waivers correlate strongly with election years, as shown in announcements like ₹52,000 Cr in 2008 before 2009 polls and ₹36,000 Cr in UP 2017.
- They create moral hazard, with farmers defaulting strategically and shifting accounts to nationalized banks expecting waivers, eroding credit culture.
- The 2008 ADWDR had major errors: 13.5% eligible excluded, 8.5% ineligible benefited, 34.28% uncertified and deemed defaulters.
- Waivers exclude landless farmers and fail to address core issues like productivity and infrastructure, perpetuating debt traps.
- Classical-liberal policy favors long-term reforms over populist short-term relief that harms overall efficiency.

**By Upasha Kumari**

* * *

The agricultural sector in our country faces challenges in terms of growth, sustainability, efficiency and equity. Declining productivity, lack of adequate infrastructure, high cost of farming inputs, underdeveloped market networks and small landholdings which reduce the bargaining capacity of the farmer are some of the critical issues plaguing the sector today. Farming is a risky occupation as it is affected by the unpredictability in weather, credit or the market. Other than this, crops are at risk due to pests, diseases and shortage of inputs such as fertilizers and pesticides. The role of intermediaries further aggravates the situation. While loan waivers may provide a band-aid solution to the problem of agricultural distress, it does little to address the challenges of growth, sustainability, efficiency and equity that affect the sector.

### **Loan waivers are not a sound policy measure**.

A sound policy does not look at the short term gain for one group, but rather, it aims to promote the long term gain of all groups. Critics believe that agricultural loan waivers are mere election gimmicks to appease the large population of farmers in the country as they are mostly announced close to the election year (See Table 1). In fact, political parties often put loan waivers in their election manifesto. For example, the Congress party in the recently concluded Bihar state assembly elections had [promised to grant farm loan](https://timesofindia.indiatimes.com/elections/assembly-elections/bihar/cong-promises-farm-loan-waiver-free-edu-to-girls/articleshow/78797228.cms) waiver to the electorate. 

**Table 1. Data showing correlation between the year in which loan waiver was announced and the election year**

**Year of announcement Nearest Election YearState/CentreAmount sanctioned (Cr INR)**19901989Union10,00020082009Union5200020142014Andhra Pradesh4000020142014Telangana2000020172017Uttar Pradesh3600020182019Maharashtra34000

Further, loan waivers are seen to be morally hazardous. Economist Paul Krugman defines a moral hazard as [“any situation in which one person makes the decision about how much risk to take, while someone else bears the cost if things go badly”](https://www.orfonline.org/expert-speak/are-loan-waivers-breeding-a-defaulter-nation/#:%7E:text=%E2%80%9CIf%20the%20absence%20of%20dissent,there%20will%20be%20one%20someday.%E2%80%9D).  In a paper titled “*Look into the future and imagine the next bubble – for there will be one someday*,” financial historian and economist Peter L Bernstein warned that [“if the absence of dissent means that we have become more tolerant of moral hazard, the consequences could be catastrophic”](https://www.orfonline.org/expert-speak/are-loan-waivers-breeding-a-defaulter-nation/#:%7E:text=%E2%80%9CIf%20the%20absence%20of%20dissent,there%20will%20be%20one%20someday.%E2%80%9D). P.T. Kuppuswamy, the Chairman of Karur Vysya Bank and CEO, had [reported](https://www.livemint.com/Companies/bmjbPPoEebRpvpviV05kPI/Does-loan-waiver-harm-credit-culture.html) farmers’ shifting of their accounts to nationalised banks before elections. He said that this move was led by the strong expectation of loan waivers in the face of an election year as they knew that if it is a private sector bank, then they might not get a waiver. Due to this reason,  some farmers who have the capacity to repay loans, sometimes default voluntarily. In many cases, those who defaulted were given a loan waiver, and those who managed to make some payments to the bank were left to fend for themselves. Thus, loan waivers might disrupt the credit discipline leading to even the well-off farmers becoming complacent. Consequently, banks will become wary of lending credit to farmers in future. 

### **The loan waiver scheme suffers from several implementation problems**.

[The Agriculture Debt Waiver and Debt Relief  Scheme (ADWDR)](https://www.rbi.org.in/scripts/BS_CircularIndexDisplay.aspx?Id=4190) of the UPA led government in 2008 covered only those farmers possessing small landholdings who suffered on account of crop failure but not those who had big farms and had invested in infrastructure. Even farmers with big lands were dependent on their crop yield to repay their loan, but they were omitted from the scheme just because they had big lands. As a result, such farmers became defaulters and did not become eligible for new loans. Loan waivers can also be seen as anti-farmer because not all farmers benefit from it, and neither do they address the problems that affect the agricultural sector per se. The 2008 UPA scheme had strong inclusion and exclusion errors. In the [CAG audit](https://www.bloombergquint.com/business/past-experience-points-to-futility-of-loan-waiver-schemes) of 90,576 bank accounts, it was found that 13.5 per cent of the 9334 accounts were eligible for the scheme but were not included in it. Further, 8.5 per cent of the 80,299 accounts were ineligible to benefit from the scheme, but they still got the benefit. In 34.28 per cent of the accounts, there was no acknowledgement receipt given to the farmer. Thus, no debt waiver certificate was issued. Due to the unavailability of the debt waiver certificate, these farmers became defaulters in the eyes of the bank and were ineligible to take fresh loans. This can create several hurdles when a large number of farmers rely on credit to meet their needs. In the absence of access to institutional credit sources, the farmers have to depend on the local moneylenders that charge an exorbitant rate of interest. Another problem with loan waivers is that most of the farmers in distress are landless. Due to the unavailability of land, they lack proof of residence and hence do not possess caste certificates. This automatically denies them access to social welfare schemes. They find it challenging to conduct business in the market, and they lack storage facilities too. These loan waivers do not reach the most oppressed actors.

Loan waivers may have an impact on the level of indebtedness, but it does not break the vicious cycle of debt trap for millions of farmers. They not only increase the fiscal burden of the government but also do little to boost productivity in the agriculture sector. Moreover,  farmers end up finding themselves in a similar position after every crop cycle, thus leaving the main issues of the agrarian sector unaddressed. While loan waivers are an easy option for the government to provide temporary relief to the farmers and to secure electoral victory, it is not a desirable policy option in the long run.

*Read more: [Why an urban job guarantee scheme is a bad idea](https://spontaneousorder.in/why-an-urban-job-guarantee-scheme-is-a-bad-idea/)*

* * *

**About Upasha Kumari**

Upasha has pursued her Bachelor's in Political Science from Lady Shri Ram College for Women, University of Delhi. She's currently a final year student at the Department of Political Science in the same university. Her key interest areas include development issues, public policy, gender, and Indian government and politics.

## Masani, Rajaji and Shenoy — the free-market troika that challenged the Nehruvian State

Original: https://www.spontaneousorder.in/p/masani-rajaji-and-shenoy-the-free-market-troika-that-challenged-the-nehruvian-state

Author: Spontaneous Order

Published: 2020-11-30T12:46:02.000Z

Topics: swatantra-party, free-markets, nehruvian-state, classical-liberalism

> The domination of the Nehruvian consensus in the early years of the Indian republic is a fact well-known. It is not as if the critics of the Nehruvian vision did not exist, but their challenge remained limited and ineffectual, in both ideological and el..

**Summary:**

The post highlights the free-market challenge to the Nehruvian mixed economy by Minoo Masani, Chakravarti Rajagopalachari (Rajaji), and B.R. Shenoy, who formed the ideological core of the Swatantra Party, critiquing statism despite limited electoral success. Their ideas persisted beyond the party's 1970s collapse under Indira Gandhi's populism, influencing the 1991 liberalization. Reviewing Aditya Balasubramanian's paper, the author praises its analysis of their transnational anti-communist efforts and political dissent against Congress hegemony but critiques its labeling of Masani as conservative serving big business—Masani self-identified as liberal, targeted peasants and middle-class, criticized cronyism, and lacked business funding, as noted by G.D. Birla and scholars like Howard Erdman. Rajaji embodied traditional conservatism infused with liberal individualism against statism. Shenoy's free-market advocacy, invoking dharma and idealized varna as division of labor akin to markets, aligns more with neoliberalism like Hayek and Friedman than Hindu revivalism. Neglect of this tradition stems from Swatantra's demise and leftist academia's class-based analyses, urging recognition of Indian classical liberals' principled anti-statism, individualism, and pro-market stance adapted to local electoral and discursive contexts.

**Key points:**

- Masani, Rajaji, and Shenoy led the Swatantra Party's free-market critique of Nehruvian planning, emphasizing fiscal prudence, decontrol, and limited government.
- Masani was a classical liberal, not conservative, targeting peasants and middle-class while decrying big business cronyism, as evidenced by lack of funding from figures like G.D. Birla.
- Shenoy's economic ideas reflected neoliberalism and historicist liberalism rooted in idealized Indian traditions, not Hindu revivalism.
- Their anti-statist, pro-market ideology survived Swatantra's fall to underpin 1991 liberalization, neglected due to leftist academic dominance.

**By Sanjeet Kashyap**

* * *

The domination of the Nehruvian consensus in the early years of the Indian republic is a fact well-known. It is not as if the critics of the Nehruvian vision did not exist, but their challenge remained limited and ineffectual, in both ideological and electoral domain. In the domain of economic policy, the fundamental critique of the Nehruvian mixed economy model came from the free-market camp coalesced in the Swatantra Party.

The free-market challenge to the Nehruvian State was unique in the sense that while the organisational structure underpinning the ideology crumbled under the populist wave unleashed by Indira Gandhi in the early 1970s, the ideas themselves survived only to be implemented after the 1991 liberalisation.

However, this Indian tradition of free-market ideology that could underpin and legitimise the economic liberalisation drive has been neglected today due to two reasons. One, the lack of knowledge about the Indian free-market tradition partly owes to the early demise of the Swatantra Party, along with a [shrunken liberal space](https://clpr.org.in/wp-content/uploads/2019/06/Is-The-Indian-Constitution-Liberal.pdf) in the Indian public discourse. The second cause relates to the politics of knowledge production as the largely Leftist tilt of the Indian academia translates into a tendency to analyse the political economy in terms of class interests, not ideological imperatives.

### **New research on the Swatantra ideology**

In this regard, a new [paper](https://doi.org/10.1093/pastj/gtaa013) by historian Aditya Balasubramanian on India’s free-market tradition seeks to fill the void. The paper mainly engages with the economic ideas of three public figures who led the charge against the Nehruvian mixed economy — Minoo Masani, Chakravarti Rajagopalachari or Rajaji as popularly known, and Bellikoth Raghunath Shenoy. Masani and Rajaji were the founding members of the Swatantra Party. Shenoy, the economist, was not a member of the party but advised both Masani and Rajaji on economic policy matters. Together, they formed what could be called the ‘Swatantra consensus’.Aditya Balasubramanian’s paper situates these thinkers in the transnational public sphere where Cold War superpowers were vying for control over hearts and minds. Much of the recent nostalgic commemoration of the Swatantra Party has focused on its economic liberalisation agenda as a bulwark against the ‘licence-permit raj’. However, Balasubramanian’s novel contribution lies in highlighting the political element of the Swatantra dissent against the single-party hegemony of the Congress. Also, the paper shows how the characterisation of India as a neutral ground in the Cold war could be contested on the basis of the initiatives undertaken by Indian liberals in coordination with the Western anti-Communist forces. The Communist manoeuvres in the Indian public sphere during the Cold War have already been revealed in the famous [Mitrokhin](https://www.hindustantimes.com/world/kgb-s-most-extensive-intelligence-files-from-mitrokhin-archive-open-to-public/story-gNIGBmYrCzKlCmUQ1dAyeJ.html) [archive](https://www.indiatoday.in/magazine/nation/story/20051003-mitrokhin-archive-kgb-operations-in-india-during-cold-war-786931-2005-10-03) papers.

### **Rajaji and Masani: Conservatism and Classical Liberalism**

In an otherwise brilliant paper by Aditya Balasubramanian on the Indian free-market tradition, it is the conceptual formulation of economic conservatism that warrants critical scrutiny and juxtaposition with an alternate reading of the ‘Swatantra consensus’. For instance, in calling Masani a conservative for his advocacy of lower taxation and less strident government regulation, which supposedly served the interest of the privileged big businesses, Balasubramanian reproduces the now-tiresome Leftist cliché.

In response to such an interest-based argument, one can point out that Masani saw peasant proprietors and urban middle-class, and not the big businesses, as the [core constituencies](https://spontaneousorder.in/minoo-masani-on-the-raison-detre-of-swatantra-party/) of his party. He further [criticised](http://indianliberals.in/~_admin/pdflanguage?id=342040209.pdf/) political brokers and big businesses who worked in cahoots to corner gains under the protectionist framework of Nehruvian planning.

Also, ironical as it may seem in light of Balasubramanian’s charge, the big businesses did not necessarily see Masani as their own. G.D. Birla, for instance, [declared](https://books.google.co.in/books?id=JjPHeRd7_UYC&lpg=PP1&pg=PA382#v=onepage&q&f=false) “Swatantra politics were not good businessman’s politics”. In his study of business and politics in India, Stanley Kochanek [pointed](https://books.google.co.in/books?id=0v0KFAAQCLkC&lpg=PP1&pg=PA36#v=onepage&q&f=false) out the lack of financial support for the Swatantra Party even from the business houses that were sympathetic to its ideological programme. Political scientist Howard Erdman’s study also [concluded](https://archive.org/details/swatantrapartyin00erdm/mode/2up) that “No one who has seen the party’s financial records would conclude that it was generously supported by India’s richest men”. In fact, if defending the interest of big businesses would make someone a conservative, one could rhetorically argue that it was the Nehruvian State that was conservative in its protectionist policy.

The charge of Masani’s relational conservatism in a post-colonial environment, dominated by socialist political groups, could also be overturned by positing Masani’s free-market liberalism as a relatively radical dissent against the prevalent statist consensus in both India and around the globe.

In order to show that Masani is a conservative, the paper also situates him in a transnational public sphere where many American conservatives appropriated liberal tenets in their anti-Communist posturing. However, in his [numerous](http://indianliberals.in/~_admin/pdflanguage?id=196655482.pdf) [writings](http://www.freedomfirst.in/uploads/issues/pdf/290.pdf), Masani clearly [self-identified](https://www.dbnl.org/tekst/bolk008mode01_01/bolk008mode01_01.pdf) as a liberal (not a conservative) and advocated classic liberal principles. In an interview in 1979, he made his ideological conviction as clear as possible: “Rajaji was conservative and I was Liberal.” As Howard Erdman has pointed out, the contemporary Western discourse saw Swatantra as a classic liberal party due to an excessive focus on its [formal ideology](https://archive.org/details/swatantrapartyin00erdm/page/256/mode/2up), which was mostly the brainchild of Masani.

Masani himself took [umbrage](http://www.freedomfirst.in/uploads/issues/pdf/251.pdf) to the application of the label ‘conservative’ to the likes of Milton Friedman in the Western media. As an aside, this semantic confusion could be attributed to both the expansion of the meaning of liberalism in the early 20th century and the appropriation of classic liberal ideas by conservatives in the mid-20th century. Masani, though, was [influenced](http://indianliberals.in/~_admin/pdflanguage?id=590973500.pdf) not only by conservative James Burnham’s *The Managerial Revolution* but also by Hayek’s *Road to Serfdom* and Wilsonian liberal internationalism. He participated in the post-war liberal international order as a member of the UN sub-commission on minorities only to [draw praise](https://www.jstor.org/stable/pdf/43901824.pdf) from John Humphrey, a co-author of the Universal Declaration of Human Rights. Thus, it could be plausibly argued that Masani was a principled liberal in his social and economic outlook, not an anti-Communist conservative appropriating liberal tenet.

To illustrate the point further, one can draw on the comparative ‘conservatism’ of Masani and Rajaji in the Indian context. Rajaji was a self-professed [conservative](https://books.google.co.in/books?id=JjPHeRd7_UYC&lpg=PP1&pg=PA446#v=onepage&q&f=false) rooted in Hindu tradition. Hence, unlike in the case of Masani, Balasubramanian feels no need to situate Rajaji’s conservatism in the transnational public sphere. However, if the ideological position of Rajaji and Masani is to be situated in the Indian context, there appears a stark contrast between the traditionalist conservatism of Rajaji and the liberal modernism of Masani. On Masani’s modern attitude in a largely traditional Indian society, political scientist Morris-Jones [remarked](https://archive.org/details/governmentpoliti00morr/page/178/mode/2up?q=minoo+masani) and Howard Erdman [concurred](https://archive.org/details/swatantrapartyin00erdm/page/104/mode/2up), “No figure in Indian public life could be more unambiguously modernist than its secretary Minoo Masani”.

In the case of Rajaji, Balasubramanian’s recognition of the attributes of economic conservatism (honest administration, fiscal prudence, and decontrol) makes sense. The same goes for his argument that Rajaji reworked liberal justifications for what was his older conservative intellectual genealogy under the influence of Shenoy. However, it could further be added that in his Swatantra days, Rajaji [supplemented](https://archive.org/details/swatantrapartyin00erdm/page/94/mode/2up) a conservative defence of social order with classic liberal individualism as he came to decry Nehruvian statism.

### **R. Shenoy: Hindu revivalism or Neoliberalism?**

While Rajaji and Masani were politicians, Shenoy was an economist, academic, and a technocrat. Accordingly, much of his public pronouncements were concerned with economic matters. However, Balasubramanian’s paper posits Shenoy’s ideological commitments in terms of both free-market economics and Hindu revivalism. The arguments demonstrating Shenoy’s Hindu revivalist tendency are tenuous though, and could be seen as the weakest spot in an otherwise brilliant paper. For instance, Shenoy’s invocation of dharma to make the case for a limited State is in accordance with the long-prevalent tendency of Indian liberals to historicise their case. As C.A. Bayly [showed](https://books.google.co.in/books?id=0GLAWY6L8fIC&lpg=PP1&pg=PA306#v=onepage&q=historicism&f=false), Indian liberals like Ram Mohan Roy, Ram Raz, Ishwar Chandra Vidyasagar, all resorted to historicism to make case for a liberalism rooted in the Indian tradition.

Moreover, the argument about Shenoy’s exposure to religious revivalism in his Banaras Hindu University (BHU) days is not adequately backed by corresponding evidence. Shenoy’s cultural critique of totalitarian progress, which he [saw](https://digitalcollections.hoover.org/objects/52837/mont-pelerin-society-meeting-at-oxford?ctx=932d8ef8-81b4-4bfa-b220-e7a905b59cfc&idx=5) as “a case of voidness of the swimming pool”, need not relate to conservative rhetoric about dharma and a stable order as argued in the paper. His remarks on the absence of cultural well-being in a totalitarian society could be seen as a liberal critique of the absence of civil society and cultural freedom in a totalitarian society.

Further, Balasubramanian’s paper argues that Shenoy’s public engagement method mirrored that of the Hindu revivalist leader and the BHU founder Madan Mohan Malviya. However, as in the case of historicism, an Indian liberal precedent could also be found for Shenoy’s method of engagement with public discourse. Both Gopal Krishna Gokhale and Gopal Ganesh Agarkar, for instance, were involved with academic initiatives and used their pedagogy as well as the public platform to advance liberal ideas.

The only plausible case for Shenoy’s Hindu revivalist tendency could be seen in his [defence](http://indianliberals.in/~_admin/pdflanguage?id=1799775426.pdf) of the caste system as a “flexible set-up \[that\] had the advantages of comparative cost and maximum production…” But even here, Shenoy was talking about an idealised *varna* system in which occupational mobility for individuals was ubiquitous. In this version, the caste system was functionally akin to the division of labour, not division of labourers as pointed by B.R. Ambedkar. Hence, Shenoy’s historicism borrowed from an idealised Hindu tradition, only in so far as it served his advocacy of free markets. Hindu revivalism did not inform his outlook in any meaningful way.

### **Indian market liberals and their borrowings**

The above reading of the ideas of these three Indian public figures opens the scope for different labelling in contrast to Balasubramanian’s formulation. For their advocacy of anti-Communism, anti-statism, individualism, fiscal prudence, pro-market policy (not pro-business); defence of private property; and belief in the link between economic and political freedom, both Masani and Shenoy came closer to neoliberals/libertarians like Friedman and Hayek instead of the conservatives and revivalists. Though Rajaji certainly was a prominent Indian conservative who later veered towards classic liberal ideas in his opposition to statism based on an indirect exposure to the MPS ideas.

However, as Aditya Balasubramanian convincingly argues, Indian market liberals did not only borrow from their neoliberal counterparts in the West but also contended with the peculiar local context in their advocacy of liberalism. The Western neoliberal approach of encasing market forces from politics through the law was not seen in the Indian case, with the exception of private property rights. In fact, in the Indian context, the market liberals sought to advance their ideas in both electoral politics and public discourse. Shenoy was very clear about it when he stressed the need to sell the neoliberal doctrine first to people before the government in his 1959 MPS [speech](https://digitalcollections.hoover.org/objects/52837/mont-pelerin-society-meeting-at-oxford?ctx=932d8ef8-81b4-4bfa-b220-e7a905b59cfc&idx=5) at Oxford.

*This article originally [appeared](https://theprint.in/opinion/masani-rajaji-and-shenoy-the-free-market-troika-that-challenged-the-nehruvian-state/544977/) in ThePrint, and has been republished here with permission.*

*Read more: [Should we alter our constitution](https://spontaneousorder.in/so-musings-should-we-alter-our-constitution/)?*

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## SO Musings: Should We Alter Our Constitution?

Original: https://www.spontaneousorder.in/p/so-musings-should-we-alter-our-constitution

Author: Spontaneous Order

Published: 2020-11-26T14:11:30.000Z

Topics: indian-constitution, constitutional-amendments, judicial-independence, n-a-palkhivala

> The Indian Constitution has been the subject of numerous debates both during the time of its drafting and after it came into force. Throughout Independent India’s judicial, legislative and executive history, the dialogue between the Constitution and age

**Summary:**

On Constitution Day 2020, Spontaneous Order revisits N.A. Palkhivala's 1976 article in the Illustrated Weekly of India, critiquing demands for constitutional amendments amid ongoing debates in India's judicial, legislative, and executive history. Palkhivala, an eminent jurist and Indian liberal thinker, contends that no perfect law exists—quoting Lord Macnaghten—due to the infinite variety of situations requiring justice beyond rigid rules. He lambasts the perpetual 'law-making industry' boom, urging a respite from the 'Niagara of Rules and Notifications, Ordinances and Acts,' as rulers and bureaucrats mistake change for progress. From a classical-liberal perspective, the core imperative is preserving the Supreme Court and High Courts' powers under Articles 32 and 226 to interpret the Constitution, protect citizens' liberties and property, and check executive interference—echoing Lord Atkin's Privy Council judgment in Eshugbai Eleko’s case (1931) on British jurisprudence traditions. Frequent amendments risk eroding separation of powers and judicial independence essential to liberal order.

**Key points:**

- No perfect law exists because justice often arises where law ends, given infinite situational varieties.
- The nation needs assurance of respite from endless new laws, rules, ordinances, and acts to boost morale, rather than equating amendments with improvement.
- Supreme Court and High Courts must retain powers under Articles 32 and 226 to protect citizens against executive actions, upholding separation of powers.
- Judges should not shrink from deciding liberty and property issues against the executive, per British justice traditions.

**By Spontaneous Order**

* * *

*The Indian Constitution has been the subject of numerous debates both during the time of its drafting and after it came into force. Throughout Independent India’s judicial, legislative and executive history, the dialogue between the Constitution and agencies of the State have taken numerous turns. Fundamental to this debate is the question of Constitutional amendments, ‘reforms’ and demand for structural changes.*

*Today, on the occasion of India’s Constitution Day 2020, we look back at a piece published in January 1976 in the Illustrated Weekly of India by eminent Jurist and Indian Liberal thinker Mr. N.A. Palkhiwala. In this piece, he reflects upon the demand for Constitutional amendments in a journal paper which was in wide circulation. Mr. Palkhiwala breaks down the arguments of the paper and then goes on to assess its effect on the separation of powers, role of judiciary etc.* 

Lord Macnaghten, one of the wisest and most learned of judges, observed towards the end of his life that he had given all his days to the study of the law and was satisfied that there was nothing in it. You may or may not agree with the Irishman who said, “There is no such thing as a large whisky,” but there can be no two opinions on the point that there is no such thing as a perfect law. Doubtless the law is imperfect, and it would be imperfect even if it were made by a committee of archangels. 

The reason is that such is the infinite variety of situations in which justice is required to be done between citizen and citizen or between citizen and the state that situations are bound to arise in which justice begins only where the law ends. To expect a perfect system of justice based on rules of law is no more rational than to hope to balance soap bubbles on hat-pins. However acute the recession, there is one activity which thrives and is in a state of perpetual boom — the law-making industry. What the nation needs more than anything else by way of legal reform is assurance of some respite from the Niagara of Rules and Notifications, Ordinances and Acts. No amendment of the law will boost the morale of the people so markedly as an assurance that no new laws would be passed for a stated period. Rulers and Bureaucrats perpetually mistake change for progress and amendment for improvement. 

Whatever alterations we may or may not make in our legal system, we should never deprive the Supreme Court or the High Courts of their power to interpret the Constitution and other laws, and to give relief to the citizens under Article 32 or 226 of the Constitution against the executive. Lord Atkin, delivering the judgment of the Privy Council in Eshugbai Eleko’s case (1931 A.C. 662, 670), observed: 

“In accordance with British jurisprudence no member of the executive can interfere with the liberty or property of a British subject on the condition that he can support the legality of his action before a Court of justice. And it is the tradition of the British justice that Judges should not shrink from deciding such issues in the face of the executive.” 

To read the full piece *“Should We Alter Our Constitution?*“, click [here.](http://www.indianliberals.in/~_admin/pdflanguage?id=1344595249.pdf)

*Read more: [What is libertarianism?](https://spontaneousorder.in/so-musings-what-is-libertarianism/)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Why an urban job guarantee scheme is a bad idea

Original: https://www.spontaneousorder.in/p/why-an-urban-job-guarantee-scheme-is-a-bad-idea

Author: Spontaneous Order

Published: 2020-11-25T12:44:26.000Z

Topics: employment-guarantee, urban-jobs, labor-migration, minimum-wage

> The government is reportedly considering an urban jobs scheme. Some economists hope this can be the start of an Urban Employment Guarantee Scheme, analogous to the Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGA). Economist Jean Drèze has sugg.

**Summary:**

Swaminathan S.A. Aiyar argues against scaling up urban job guarantees like a proposed Decentralised Urban Employment and Training (DUET) scheme analogous to MGNREGA, warning it would distort labor markets from a classical-liberal viewpoint. Urban minimum wages, such as Delhi's ₹570 per day for unskilled labor versus MGNREGA's national average of ₹202, would attract rural migrants, swelling urban slums, congestion, pollution, and potentially unemployment without reducing absolute joblessness. This could trigger a migration cycle where higher budgetary outlays draw even more immigrants, undermining full employment goals. States like Uttar Pradesh pay MGNREGA ₹201 against ₹337 minimum wage plus dearness allowance, making urban schemes fiscally inefficient—doubling wages halves jobs created per rupee spent. Amid slowing GDP growth, deglobalisation, tripling of open unemployment to 6%, and labor force participation crashing from 64% to under 50%, structural job losses from technology make guarantees impossible. Aiyar favors expanding budget-strapped MGNREGA to maximize rural jobs for the poorest and curb migration, or limited experiments like job stamps for maintenance, but rejects full urban guarantees that sabotage MGNREGA's anti-migration intent and ignore labor shortages post-Covid.

**Key points:**

- Urban job guarantees at high city minimum wages like Delhi's ₹570/day will induce rural immigration, creating congestion and a cycle of rising expenditures without achieving full employment.
- Fiscal constraints demand prioritizing MGNREGA expansions, which create twice as many jobs per rupee as urban schemes at double the wage.
- Structural trends like 6% unemployment tripling, labor force participation falling below 50%, and technological job losses make urban guarantees unviable.
- Limited experiments with job stamps for urban maintenance are acceptable, but full guarantees risk corruption via placement agencies and inspector raj.

**By Swaminathan SA Aiyer**

* * *

The government is reportedly considering an urban jobs scheme. Some economists hope this can be the start of an Urban Employment Guarantee Scheme, analogous to the Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGA). Economist Jean Drèze has suggested a Decentralised Urban Employment and Training (DUET) scheme.

Emergency action to create jobs in a disaster like Covid-19 is warranted. But scaling this up to an urban job guarantee poses serious problems. Urban jobs pay more, sometimes double the rural rate. The minimum wage for unskilled labour in Delhi is ₹570 a day, against the national MGNREGA average of ₹202. The national picture is complex. The MGNREGA rate is often below the rural minimum wage in many states. Economists will say this is good policy — it helps ensure that labour is not diverted from normal jobs to MGNREGA.

### Minimum Requirement

Urban wages are typically much higher and so attract rural immigrants. Some states have separate minimum wages for rural work and urban tasks under the Shops and Commercial Establishments (SCE) Act. Others have the same minimum wage for both rural and urban areas. In some states, the minimum wage is supplemented by a variable dearness allowance (DA), which in some states (such as Andhra Pradesh) can more than double the overall wage. In Uttar Pradesh, MGNREGA pays ₹201a day against ₹337 a day for the minimum wage plus DA.

I doubt if it is politically or morally possible to pay the low MGNREGA rate in cities. Certainly, Opposition parties and trade unions would scream murder. I suspect that for any urban job guarantee, the states will have to pay at least the much higher minimum rate under the SCE Act. If so, guaranteed high wages will induce an additional inflow of rural immigrants. That will mean urban slums with more congestion and pollution, and maybe no decrease at all in the absolute number of urban unemployed. If the government then doubles budgetary allocations to employ the new migrants, that can pull in still more migrants from rural areas, in a neverending cycle.

Till now, urban schemes in states with limited outlays have created too few jobs to induce large immigration. But scaling up to a full-fledged job guarantee will guarantee ever-rising immigration that skewers the attempt at full employment.

The scheme might just work if GDP growth is so rapid, labour-intensive and urbanised that urban jobs rise faster than fresh immigration for long periods. Alas, GDP was slowing fast even before Covid-19, and deglobalisation looks like slowing future global growth. Economist Shankar Acharya has pointed out that recent National Sample Survey Office (NSSO) data suggest a tripling of open unemployment to 6%, and a crash in the proportion of people of working age seeking work from 64% to under 50%.

The supposed demographic dividend has vanished. New technology is killing old jobs. These structural trends highlight the crisis in employment, but equally highlight the impossibility of solving it through urban job guarantees.

Since a guaranteed urban wage can be double the MGNREGA rate, any given budget outlay can create up to twice as many jobs in rural as in urban areas. Given humongous budget constraints, surely, any spare money must go to rural areas to create the most jobs and help the poorest. One objective of MGNREGA is to curb rural migration to towns. An urban guarantee scheme will do the opposite, stimulating migration and sabotaging MGNREGA’s intent.

### Bigger Basket

A crisis like Covid-19 justifies emergency outlays to help unemployed urban workers. GoI should have had a bigger immediate stimulus that included job measures to reduce the massive reverse migration of urban workers to villages in March-July. But today the lockdowns have eased, workers are coming back, and many manufacturing and service establishments complain of a labour shortage. State budgets are under enormous strain. In these circumstances, expanding MGNREGA is surely better than creating urban jobs at far higher costs per job.

Drèze’s DUET proposes a centrally sponsored scheme to give job stamps to institutions like schools, colleges, neighbourhood associations and local bodies for repairs and maintenance, which are badly needed. These institutions will use job stamps to pay workers hired through placement agencies that will register the unemployed and later monitor work done to prevent collusive fraud. The job stamps will have to be used within a fixed period of time.

Job stamps can be for a full day’s work at the prescribed wage, or for halfdays to accommodate women who cannot work full time. The placement agencies will also help in training by, for instance, having apprentices accompany skilled workers like electricians and plumbers to learn these skills.

I am for such experiments, but must caution that the placement agencies can become hubs of nepotism and corruption. If they are to certify work done, that could turn into another inspector raj. Drèze advocates experimentation by states to mitigate immediate distress and see what works, and later scale up a full urban job guarantee. I see the case for experiments for a limited urban works programme. I see none for a full-fledged job guarantee scheme.

*This article was originally published in the [Economic Times](https://m.economictimes.com/news/economy/policy/view-why-an-urban-job-guarantee-scheme-is-a-bad-idea/amp_articleshow/79268995.cms) on 17th November 2020. You can read it on Swaminomics [here](http://swaminomics.org/countryside-not-countrywide/).*

*Read more: [How the Social Security Code 2020 fails gig workers](https://spontaneousorder.in/how-the-social-security-code-2020-fails-gig-workers/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## How the Social Security Code 2020 fails gig workers

Original: https://www.spontaneousorder.in/p/how-the-social-security-code-2020-fails-gig-workers

Author: Spontaneous Order

Published: 2020-11-23T12:43:07.000Z

Topics: gig-economy, social-security-code, labour-regulation, platform-workers

> In the wake of the pandemic, the gig economy is being hailed as the future of work. A gig economy is a free market system in which temporary positions are common and organizations hire independent workers for short-term commitments. The gig economy crea..

**Summary:**

The Social Security Code 2020 promises gig workers benefits like insurance, maternity coverage, and provident funds by requiring aggregators to contribute 1-2% of annual turnover to a Social Security Fund, marking a step toward recognizing them outside traditional employment. However, from a classical-liberal viewpoint, this regulatory intervention risks harming workers through increased aggregator costs inevitably passed on via lower wages or higher commissions, as seen in recent Swiggy and Uber protests amid pandemic income hits. Gig economy, driving 56% of new jobs (3 million in India) and projected to grow 17% to $455 billion by 2023, thrives on flexibility allowing multi-platform work and self-determined hours—features regulations could rigidify with minimum hours, entry barriers, and Aadhaar-mandated registration prone to corruption like in PDS or 2008 Unorganised Workers Act. Jurisdictional overlaps between Centre and States, fund management opacity, and lack of judicial oversight exacerbate cronyism risks. Citing California's Proposition 22 (58% voter support for independent contractor status) and ASSOCHAM's 'portable benefits' like Uber/Lyft perks, the author argues markets better provide security; governments should prioritize ease of doing business, flexible payments, and tax harmony over over-legislation that could stifle the model sustaining workers during crises.

**Key points:**

- Aggregators' 1-2% turnover contributions to the Social Security Fund will raise costs passed to gig workers via lower pay and selective hiring.
- Regulations threaten gig workers' prized flexibility, potentially imposing rigid hours and barriers that multi-platform workers currently avoid.
- Aadhaar registration and database maintenance echo past failures like PDS corruption and poor implementation under 2008 Unorganised Workers Act.
- Prefer market-driven 'portable benefits' as in US (Uber/Lyft perks) and Proposition 22's success over mandatory contributions.
- Governments should ease regulations, streamline payments, and harmonize taxes to boost gig economy growth.

**By Swati Rao**

* * *

In the wake of the pandemic, the gig economy is being hailed as the future of work. A gig economy is a free market system in which temporary positions are common and organizations hire independent workers for short-term commitments. The gig economy creates an estimated 56% of all [new employment, 3 million of which are in India](https://government.economictimes.indiatimes.com/news/economy/opinion-indias-gig-economy-needs-affirmative-policy-push/73121847). ASSOCHAM predicts that it’s expected to grow at an annual rate of [17% to $455 billion by 2023](https://www.bloombergquint.com/business/gig-workers-may-end-up-paying-for-their-own-social-security). While the lockdown might have diminished profits for aggregators and gig companies, gig workers’ incomes have also taken an astronomical hit. Delivery partners and workers associated with [Swiggy](https://www.newsclick.in/striking-wages-swiggy-workers-champion-collective-care) and [Uber](https://mediaindia.eu/politics/ola-uber-drivers-threaten-strike/) recently came out to protest against low wages and high commissions. To these workers who have remained in a regulatory grey zone, the [Social Security Code, 2020](https://labour.gov.in/sites/default/files/SS_Code_Gazette.pdf) promises an assortment of social security benefits. 

Intending to consolidate laws relating to social security for the organised and the unorganised sector, the Social Security Code 2020 provides legal recognition and social security benefits to gig workers. This is a significant step in recognising gig workers as a separate category outside the traditional employer-employee relationship. The Code requires aggregators like ride-sharing services, food and grocery delivery services and e-commerce platforms to contribute towards providing disability and life insurance benefits, accident cover, maternity coverage, creche services, old-age protection, gratuity, provident fund contributions and other social security benefits for gig workers. With the pandemic offering an urgent impetus to operationalise the Code, the Ministry of Labour and Employment recently notified the [draft Code on Social Security (Central) Rules, 2020](https://labour.gov.in/whatsnew/draft-code-social-securitycentral-rules-2020) for which it is currently seeking feedback and recommendations. The draft rules provide for the Centre to establish a national platform, workers’ database and monitor progress, while States will be tasked to create policies that provide social security benefits on a self-registration basis.

The Code provides for a Social Security Fund comprising contributions from gig companies and the Centre or State government, with gig companies expected to allot 1-2% of their annual turnover. Apart from that, these companies are also expected to maintain a register of their gig workers, and any expense borne for maintenance and updation of the database could fall on them. While the Code and the draft Rules are a significant step intended to guarantee social security for gig and platform workers, the tyranny of good intentions might just end up hurting their interests. 

The requirement of contributions to the Social Security Fund will result in increased costs for aggregators, which they will inevitably look to pass to the workers. The requirement of maintaining a register of workers eligible for the Fund will result in additional economic and human resource burden on the aggregators. The financial inability of aggregators to comply with these obligations will not only impact the earnings of gig workers, but it will also force these companies to practice selective hiring. Gig [workers, who rely on these platforms to supplement their earnings, would themselves prefer more income in-hand over promises of social security.](https://www.bloombergquint.com/business/gig-workers-may-end-up-paying-for-their-own-social-security)  

The flexibility gig work affords these workers is a crucial reason they flocked to these platforms in the first place. If there are any changes to payments, incentive structures or commission rates, gig workers can easily exercise their freedom to switch between platforms. A significant percentage of gig workers are usually registered with multiple platforms at the same time, giving them the agency to determine their own work hours, shifts and the intensity of jobs they undertake. Currently, an enterprising gig worker can choose to work long hours for a few days to supplement his/her income. Regulating this structure will result in platforms implementing rigid minimum working hour requirements, as well as entry and exit barriers to minimise their costs. Needless to say, a company made to pay for health benefits, maternity benefits, education, and housing etc. will rely on changing hiring practises and payout structures to remain profitable. 

The Code requires every gig worker to be registered through an Aadhaar card, adding an unnecessary layer of documentation. Lack of state capacity was apparent in the poor implementation of the registration process under the Unorganised Workers’ Social Security Act of 2008. Moreover, given India’s experience with social protection schemes like PDS and MNREGA, it’s fair to assume that this Code will provide ample opportunities for cronyism and red tapeism. Those responsible for maintaining the database of beneficiaries will find themselves in a position where they are able to extract hefty bribes from desperate gig workers. [Research](https://www.prsindia.org/administrator/uploads/general/1388728622~~TPDS%20Thematic%20Note.pdf) shows that the implementation of PDS is rife with issues of identification. In some cases, non-existent people were added to the list of beneficiaries, whereas in others, eligible beneficiaries found their names missing. It would not be a stretch to anticipate similar issues with registering gig workers and enrolling them under the schemes.

While the draft Rules require States to create policies to provide social security, both Central and State governments have the authority to frame and notify welfare schemes under the Code. Both are also authorised to set up funds requiring a contribution from gig companies. In situations where companies are required to contribute to multiple funds, jurisdictional issues are expected to arise. The Code lacks clarity on how these funds will be managed and processed and which body will be accountable. Moreover, a glaring omission in the form of provisions for judicial intervention raises questions on the limits of executive powers under the Code.

While mainstreaming gig workers into the formal economy could provide them with the recognition they need to negotiate for their rights, enforcing social security contributions on gig companies is bound to backfire. According to [ASSOCHAM](https://www.assocham.org/userfiles/GIG%20REPORT_2020.pdf)’s Report, one way of resolving the issue of social security for gig workers is through “potable benefits”. In the US, Uber and Lyft have stepped up to provide perks and rewards. While Uber subsidizes car maintenance and offers phone plan discounts, Lyft provides discounts for fuel, roadside assistance and telemedicine. 

Last year, California’s landmark [Assembly Bill 5 (AB 5)](https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB5), providing for employee classification and benefits for gig workers, was quoted widely by Indian experts in support of the Social Security Code 2020. But during the recent US presidential election, [58% Californians voted in support of Proposition 22](https://www.nytimes.com/2020/11/04/technology/california-uber-lyft-prop-22.html), a ballot measure that allows gig companies to classify gig workers as “independent contractors” and not “employees”. The success of Proposition 22, which will bring some much needed regulatory stability to contract work in California, is indicative of workers preferring the flexibility of contract work over the stability of employee benefits.

States like [Gujarat](https://indianexpress.com/article/india/four-labour-bills-passed-in-gujarat-assembly-easier-for-small-firms-to-lay-off-workers-6606902/) and [Andhra Pradesh](https://spontaneousorder.in/the-tyranny-of-good-intentions/) that have made pro-business amendments to their labour laws, through the establishment of flexible labour markets are now reaping the benefits in the form of improvement in employment and growth. Given the large scale poverty in India, there is no denying that labour rights and social security are pertinent issues. Still, these are issues which the market is more than capable of solving. The government’s priority should be improving ease of doing business in the gig economy by streamlining regulatory hurdles. Supporting aggregators by minimizing regulatory constraints, facilitating the development of faster and flexible payment solutions and harmonizing tax structures would go a long way. After all, regulating through the lens of “the big bad corporations versus gig workers” might just result in more working hours, lower incomes and lower incentives for the workers. In over-legislating this space, the government runs the risk of altering the very model of a gig economy that has provided subsistence to innumerable people during the pandemic. 

Read more: [Air Pollution is helping Covid-19 in Delhi](https://spontaneousorder.in/air-pollution-is-helping-covid-19-in-delhi/)

* * *

**About Swati Rao**

Swati Rao is Assistant Manager, Advocacy at Centre for Civil Society. Previously, she has worked for the US Department of State, Swaniti Initiative in India, and holds an Erasmus Mundus Masters in Public Policy and B.A. LL.B (Hons) from Hidayatullah National Law University, Raipur.

## SO Musings: What is Libertarianism?

Original: https://www.spontaneousorder.in/p/so-musings-what-is-libertarianism

Author: Spontaneous Order

Published: 2020-11-20T16:33:17.000Z

Topics: libertarianism, liberty-definition, classical-liberalism, human-individuality

> ‘Men are born free’ is an old adage. The ideas of ‘Liberty, Equality and Fraternity’ animated the participants of the French Revolution. The guiding principle of human liberty laid the intellectual foundation of Classical liberalism, which led to

**Summary:**

The article from the April 1958 Indian Libertarian defines libertarianism as rooted in classical liberalism, which drove 19th-century European prosperity through human liberty, evolving into modern libertarianism essential for understanding today. Liberty is the absence of coercion by one human on another, with restrictions minimized due to human fallibility; its opposite is slavery. This liberty is a precondition of morality, preceding moral judgment itself, echoing Ayn Rand's ideas. Humanity has intuitively fought for liberty since antiquity, battling threats alongside natural forces. Man's biological nature harmonizes with liberty: research reveals extreme diversity in knowledge, wisdom, ignorance, and foolishness among individuals, who remain independent unitary organisms even in cooperation or crowds—collectives are illusory. Liberty elevates knowledge and wisdom; its absence enthrones ignorance and foolishness. Thus, preserving liberty aligns with human essence, countering coercion to foster individual flourishing in a classical-liberal framework.

**Key points:**

- Liberty is defined as the absence of coercion of one human being by another, with restrictions at a minimum.
- Man's biological nature, marked by extreme diversity and unitary individuality, is attuned to liberty, which promotes knowledge over ignorance.
- Liberty precedes and preconditions morality, making it unjudgeable by moral standards.
- Humanity has battled for liberty intuitively from the dawn of existence, akin to fighting natural threats.

**By Spontaneous Order**

* * *

*‘Men are born free’ is an old adage. The ideas of ‘Liberty, Equality and Fraternity’ animated the participants of the French Revolution. The guiding principle of human liberty laid the intellectual foundation of Classical liberalism, which led to unprecedented prosperity in 19th century Europe. Classical liberalism has since given way to libertarianism, but nevertheless, it is essential to understand the idea of libertarianism and why it is still important.*

*In this article published in the April 1958 edition of the **Indian Libertarian** magazine, the author defines liberty as the absence of coercion on humans by other humans. Further he states that liberty is the precondition of morality, and therefore liberty itself cannot be judged on the moral compass, as it precedes any moral judgment. Coincidentally, his ideas are very similar to another libertarian thinker – Ayn Rand.* 

The preservation of liberty has been the concern of mankind from the very dawn of his existence. As he battled for life and life’s betterment, he must surely have faced constant threats to his liberty, just as he was confronted with the tides, the tornadoes, and pestilences of all sorts. All these must have been a part of man’s experience from time immemorial. Prior to any carefully reasoned contemplation of such obstructions, mankind must have battled them intuitively. He must have battled for his liberty, without having any deep sense of what liberty really is, just as he battled for his existence among the forces of nature without knowing precisely and formally the laws of natural phenomena.

**MAN’S NATURE IS ATTUNED TO LIBERTY** 

The biological nature of the organism of man is in harmony with liberty. Biological research has revealed that there exists an extreme diversity between one person and another. Among these infinitely variable qualities evidencing the nature of man is variation in his knowledge and wisdom or in his ignorance and foolishness. Liberty tends to enthrone knowledge and wisdom: the absence of liberty tends to enthrone ignorance and foolishness. Biological research brings into focus the independent unitary nature of the human organism. Persons are born alone as distinctly separate units one at a time. They likewise die one at a time as separate units. All-their acts in between are as separate units as well, even in their cooperative endeavours. An aggregation of any sort fails to blend even two persons into one unit, so long as there is life in each. Even in panic or any like phenomenon where the herd seems to operate as a unit, it is entirely individual persons who do all the acting, however much their apparent concert. Every collective is an illusory construction. 

**LIBERTY DEFINED** 

Liberty stems from liber, which means to be free. The definition we would propose is: Liberty is the absence of coercion of a human being by any other human being: a condition where restriction is at a minimum. This definition may lack logical precision. But it is the most practical definition we can offer. A condition which is characterised by the absence of coercion is liberty. Conversely a condition in which there is coercion of a human being by another is slavery. As to the latter part of the definition, we do not say it is a condition where there is total absence of “restriction”, because liberty is related to the limitations of action one person may suffer at the hands of another person. In as much as society consists of fallible humans, total absence of ‘restriction’ is an impossibility. But restriction should be at a minimum.

**\[Contd…\]**

For the full article, visit page number 17 on this [link](http://indianliberals.in/~_admin/pdflanguage?id=536799578.pdf).

*Read more: [SO Musings: Intellectual and Masses](https://spontaneousorder.in/so-musings-intellectual-and-masses/)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Air Pollution is helping Covid-19 in Delhi

Original: https://www.spontaneousorder.in/p/air-pollution-is-helping-covid-19-in-delhi

Author: Spontaneous Order

Published: 2020-11-18T20:38:19.000Z

Topics: air-pollution, covid-19, economic-incentives, stubble-burning

> This article is a part of CCS’ winter series: Pollution Ke Solutions – liberal solutions to combat air pollution in north India. With winter setting in, a thick blanket of smog is engulfing the national capital again. Simultaneously, Covid-19 cases in

**Summary:**

Delhi's worsening air pollution, with AQI reaching 400 (eight times the safe level), directly correlates with rising COVID-19 cases and hospitalizations, as both target the respiratory system; a Harvard study links a one microgram per cubic meter increase in PM2.5 to an 8% higher COVID-19 death rate, putting long-exposed north Indian residents at greater risk. Pollution disproportionately harms the poor, like roadside workers versus affluent air-purifier users, and exacerbates COVID spread in cramped slums. Government interventions like odd-even car rationing fail since vehicles contribute only 3% to pollution per CPCB, while Supreme Court deems it half-baked; construction dust accounts for 38-42% of particulates year-round, yet bans are seasonally reactive. Stubble burning persists despite court orders due to high machinery costs for farmers. From a classical-liberal viewpoint, reactive state policies have proven ineffective; long-term solutions lie in economic incentives harnessing self-interest, such as Punjab's ₹2,500 per acre payment to farmers avoiding stubble burning or rebates like carbon tax reductions and lower fees for greener construction firms. With forecasts of 15,000 daily COVID cases in winter, markets must be empowered to innovate solutions over failed government measures.

**Key points:**

- Air pollution increases COVID-19 death risk by 8% per one microgram per cubic meter rise in PM2.5, per Harvard study.
- Government odd-even scheme ineffective as cars contribute only 3% to Delhi's pollution.
- Provide economic incentives like ₹2,500 per acre to farmers to avoid stubble burning.
- Offer carbon tax rebates and reduced fees to construction firms adopting greener practices.
- Shift from reactive policies to market-driven incentives for long-term pollution reduction.

**By Swati Singh**

* * *

*This article is a part of CCS’ winter series: **Pollution Ke Solutions*** – *liberal solutions to combat air pollution in north India.*

With winter setting in, a thick blanket of smog is engulfing the national capital again. Simultaneously, Covid-19 cases in the city are [rising](https://www.hindustantimes.com/delhi-news/as-cases-rise-covid-hospitalisations-increase-in-delhi-govt-data/story-gABl9L6V29T8bcbXYlTYaI.html), and more people are being hospitalised daily. How are these two problems linked, and what do they have in store for Delhi?

For a brief period, the Air Quality Index (AQI) of Delhi improved dramatically and pollution dropped to a [20-year low](https://edition.cnn.com/2020/04/23/india/india-air-pollution-coronavirus-nasa-intl/index.html) when the lockdown started. But this didn’t last for too long. Since early September, the AQI has risen to 400; 8 times the safe level. And with the rising pollution, rose the COVID-19 cases; a direct correlation as explained by [medical experts in the city](https://scroll.in/article/978454/coronavirus-the-record-high-number-of-new-cases-in-delhi-is-a-direct-effect-of-air-pollution).

Several studies around the world have linked air pollution to higher Covid-19 case numbers and deaths. This is because both these target the respiratory system. A [Harvard University study](https://projects.iq.harvard.edu/covid-pm) shows that an increase of only one microgram per cubic metre in PM 2.5 (the dangerous particles suspended in the air that have diameters of less than 2.5 micrometres) can be associated with an 8% increase in the Covid-19 death rate. The [study](https://www.hsph.harvard.edu/news/hsph-in-the-news/air-pollution-linked-with-higher-covid-19-death-rates/) also suggested that someone who lives for decades in a county with high levels of fine particulate pollution is 8% more likely to die from COVID-19 than someone who lives in a region that has just one unit (one microgram per cubic meter) less of such pollution. This puts the citizens of Delhi (and other long-polluted north Indian cities) at more risk.

Everyone breathes the same air, so does air pollution impact the rich and the poor alike? This is [hardly true](https://www.unenvironment.org/news-and-stories/story/air-pollution-hurts-poorest-most).  A comparison can not be made between a rickshaw puller who sleeps on the road and a businessman who lives in a house with 3 air-purifiers. As for Covid-19: it can spread faster in poorer localities where people lived in cramped conditions.

With Delhi being the heart of our country, both the state and the central government have tried implementing policies in the past and the present to tackle this issue. Odd-Even, a yearly policy implemented in the city has been a go-to. But as per [Central Pollution Control Board (CPCB)](http://cpcbenvis.nic.in/cpcb_newsletter/AUTO%20EMISSION.pdf), the contribution of cars to pollution is only around 3%. The [Supreme Court](https://www.financialexpress.com/india-news/odd-even-scheme-half-baked-solution-ineffective-in-reducing-pollution-says-supreme-court/1766191/) said last year that the odd-even vehicle rotation scheme of the Delhi government was a “half-baked solution” to the severe pollution level as it was not effective in reducing pollution.

A [study](https://www.teriin.org/sites/default/files/2018-08/Report_SA_AQM-Delhi-NCR_0.pdf) done by The Energy and Resources Institute (TERI) in 2018 said that during summers, dust and construction activities contribute to almost 38- 42% of the overall particulate matter in the air. Since the last three years, construction activities have been banned in Delhi, but only during peak pollution season. If construction dust is a year-round problem, banning it for a couple of weeks during the peak season is not going to help. None of the anti-pollution policies implemented by the governments so far have been effective, because they are all reactive, and not preventative, solutions. Therefore, we need long term solutions; not just because COVID-19 is making things worse, but because the air pollution in Delhi has already been unbearable for quite a while now.

History bears witness to the fact that economic incentives are usually effective tools in policymaking. 

[Stubble burning](https://www.ndtv.com/delhi-news/delhi-air-quality-very-poor-stubble-burning-contributing-40-to-delhis-pollution-maximum-so-far-safar-2319141#:~:text=The%20national%20capital's%20air%20quality,to%20a%20government%20forecasting%20agency.) is one of the major causes of air pollution in Delhi. Despite a [Supreme Court order](https://www.thehindu.com/news/cities/Delhi/burning-fields-farmers-say-they-are-helpless/article29995283.ece) against stubble burning, farmers are continuing with the practice. They say they are aware of the consequences but do not have other viable options as the cost of using machines to dispose stubble is too high.

Following the Supreme Court order last year, the [Punjab government had decided to pay ₹2,500](https://economictimes.indiatimes.com/news/economy/agriculture/punjab-announces-rs-2500-per-acre-for-not-burning-stubble/articleshow/72044065.cms?from=mdr) per acre to all small and marginal farmers who did not burn their stubble. [Farmers had said](https://www.thehindu.com/news/cities/Delhi/burning-fields-farmers-say-they-are-helpless/article29995283.ece) that this incentive could help them cover the cost of fuel used in operating machinery for in-situ management of stubble. This is yet to kick off.

Similarly, construction companies adopting a greener approach can be provided with economic incentives like carbon tax rebates, reduced permit fees etc. The significance of self-interest in incentivizing companies to reduce their carbon prints is truly underestimated. 

A [government report](https://www.hindustantimes.com/delhi-news/delhi-should-prepare-for-15-000-daily-covid-19-cases-during-winter-report/story-660FGzMDOPNiMybXnAiz6H.html) has predicted that Delhi is likely to report 15,000 Covid-19 cases per day in winter months, and pollution will increase the likelihood of these cases becoming severe. This is an alarming situation and the urgency of combating air pollution is at its peak. A long-term problem requires a long-term solution. The government’s policies for combating air pollution have clearly not worked over the last few years. Economic incentives for farmers and construction businesses could go a long way in reducing air pollution. It’s time to let markets come up with solutions.

Last year, we released [An Alternative 7-Point-Agenda for Combating Delhi Air Pollution](https://spontaneousorder.in/an-alternative-7-point-agenda-for-combating-delhi-air-pollution/). Read now!

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## Cracker Ban: An Overbroad Remedy

Original: https://www.spontaneousorder.in/p/cracker-ban-an-overbroad-remedy

Author: Spontaneous Order

Published: 2020-11-17T14:07:18.000Z

Topics: firecracker-ban, air-pollution, judicial-overreach, police-enforcement

> The National Green Tribunal (“NGT”) on 9th November 2020, ordered for a complete ban on the sale and use of all kinds of crackers in the National Capital Region (“NCR”) between November 09 to November 30, 2020. The deteriorating air quality in the

**Summary:**

The NGT's complete ban on firecracker sales and use in the NCR from November 9-30, 2020, is critiqued as an overbroad remedy for poor air quality and COVID-19 risks, ignoring India's weak enforcement capacity with only 138 police per lakh population—the fifth lowest globally—and past failures like the Supreme Court's Arjun Gopal restrictions, which were widely disregarded. Such bans lead to token policing that disproportionately burdens poor vendors through bribes and risks, while failing to curb pollution, as CPCB data shows PM2.5 spikes from crackers last just 48 hours amid dominant stubble burning since mid-October. The order overlooks deeper NCR pollution sources like construction dust and vehicles, endangering 4 lakh workers' livelihoods without evidence of significant air quality gains. From a classical-liberal view, courts' adversarial proceedings are ill-suited for balancing rights and costs like unemployment; Parliament should handle this, avoiding outright bans lacking research support. Instead, propose minimal interventions: eco-friendly cracker labels for consumer choice and incentives rewarding low-pollution neighborhoods via municipal upgrades and real-time local data, fostering targeted, liberty-preserving solutions over coercive overreach.

**Key points:**

- NGT's firecracker ban fails due to India's understaffed police (138 per lakh) and leads to arbitrary enforcement harming poor vendors.
- Crackers cause short PM2.5 spikes (48 hours) but stubble burning is the main NCR pollution driver, per CPCB, while ignoring 4 lakh workers' livelihoods.
- Courts should defer pollution policies to Parliament for better reconciliation of rights, costs, and unemployment.
- Promote eco-friendly labels and neighborhood incentives with real-time local air data instead of bans.

**By Anuj Aggarwal**

* * *

The National Green Tribunal (“**NGT**”) on 9th November 2020, [ordered](https://images.assettype.com/barandbench/2020-11/93d21737-4874-4f42-8c66-d541a410aef1/NGT_Cracker_ban.pdf) for a complete ban on the sale and use of all kinds of crackers in the National Capital Region (“**NCR**”) between November 09 to November 30, 2020. The deteriorating air quality in the NCR, and also the fears of worsening the conditions of the COVID-19 patients, acted as an important consideration for the NGT to prescribe the cracker ban. While one cannot deny the public good and the noble intentions behind the order, it is important to consider the limitations and unintended consequences arising from it. 

Expansive orders, such as the present one, often disregard the cost and the logistics of ensuring compliance. Generally, substantial compliance with such orders requires an effective machinery for penalizing the lawbreakers, to produce a deterrent effect against the bursting of crackers. Invariably, this task falls on the shoulders of an already overburdened and understaffed police force with no added incentives to implement the order. This problem of implementation is of particular importance in the context of India, which has [one of the weakest police forces in the world, and an abysmal ratio of 138 police personnel per lakh of population](https://economictimes.indiatimes.com/news/defence/indias-ratio-of-138-police-personnel-per-lakh-of-population-fifth-lowest-among-71-countries/articleshow/48264737.cms). To add to the woes, it suffers from a severe resource crunch and lacks the sensitivities to implement such large-scale measures, as the recent implementation of a nation-wide lockdown seems to indicate. 

The incapacity of the state to implement such orders was acutely felt in the aftermath of the Supreme Court judgment in the matter of *[Arjun Gopal Union of India](https://indiankanoon.org/doc/63024516/)*, where the Court chose to impose heavy restrictions on the burning of crackers instead of an outright ban. The order was largely disregarded, and NCR witnessed cracker burning without any perceptible change. Therefore, it is reasonable to believe that the present order was not to be implemented in its letter and spirit. 

However, as often is the case, to demonstrate compliance, the police will likely resort to token confiscation and apprehend individual violators. The victims of such action are prone to be the ones who are incapable of offering a bribe or availing social protection by selling in illegal but collectivized bazaars. Their businesses become more vulnerable to arbitrary police action and solicitation of illegal bribes. In addition, the ban makes the procurement of crackers riskier and costlier, disproportionately impacting the economically weaker vendors. As a result, a direct consequence of banning crackers will not be the improvement of air quality, but reduced freedom for the least well-off. In this sense, the ban is an overbroad remedy opted by the NGT, especially when the evidence of it making a significant impact on the air quality is limited. 

The report of the Central Pollution Control Board (“**CPCB**”) dated November 06, 2020, which formed a part of NGT’s consideration, states that the elevated levels of PM 2.5 particle concentration (a measurement of pollutant levels in the air) is predominantly present for the first 48 hours. Besides, it also states that the air quality of Delhi was deteriorating since the second week of October due to stubble burning, hinting towards the real culprit behind NCR’s poor air quality. While the judgment explores the link between pollution and an increase in COVID-19 related complications in detail, it does not adequately explore the impact of the short spurts of particulate concentration during Diwali. Yet, the order directly impacts the [livelihood of 4 lakh workers](https://images.assettype.com/barandbench/2020-11/93d21737-4874-4f42-8c66-d541a410aef1/NGT_Cracker_ban.pdf) engaged in the industry as submitted by the State of Tamil Nadu. Moreover, the Order fails to address the deeper causes of pollution in NCR and Delhi as such construction dust, vehicular pollution, and stubble burning. 

In turn, the inevitable violations of the order will further foster and encourage the culture of disregarding judgments of the Supreme Court and NGT, especially where the compliance cost is more than the pleasure derived from the action. This adds to the general tendency of disregarding compliance with environmental legislation due to weak supervision. As a matter of prudence, therefore, the Court will gain more if it chooses to relegate such issues to the legislature. The adversarial nature of the proceeding as well as the inflexibility in issue-specific proceedings do not make the Courts an ideal venue to adjudicate such matters. In comparison, Parliament has a broader bandwidth to reconcile competing rights and interests, and allows for consideration of important ancillary factors such as unemployment arising from an outright ban. 

Given the lack of research indicating the use of crackers as a major cause of pollution in NCR, the Parliament should avoid considering an outright ban. Instead, I suggest a very limited form of state intervention such as making it easier for the consumers to identify eco-friendly crackers through the introduction of easily recognizable marks. In the long term, neighborhoods can also be incentivized for reducing the use of crackers by rewarding the areas that have lower pollution-levels post-Diwali through municipal upgrades and additional resources. Such an exercise will require the introduction of more localized air quality indicators that provide real-time data and assist in measuring the impact of crackers on air quality. These measures can also help in introducing more localized approaches towards tackling pollution and would go a long way to reduce its scourge in the NCR. 

*Read more: [The Cracks in India’s Anti-Bribery Law](https://spontaneousorder.in/the-cracks-in-indias-anti-bribery-law/)*

* * *

**About Anuj Aggarwal**

Anuj Aggarwal is a lawyer specializing in dispute resolution. He has previously worked with a Member of Parliament of the Upper House. He is interested in exploring the intersection between law and economics and often blogs at swatrantraopinion.com, a blog inspired by the free-market ideas of Rajaji.

## SO Musings: Intellectual and Masses

Original: https://www.spontaneousorder.in/p/so-musings-intellectual-and-masses

Author: Spontaneous Order

Published: 2020-11-13T15:15:58.000Z

Topics: intellectuals, role-of-intellectuals, indian-libertarian, classical-liberal-critique

> What is the role of the intellectual in society? This question has been debated from several perspectives over the centuries, mostly by intellectuals themselves. While Ayn Rand saw the intellectual class as the fountainhead of the dominant philosophy of..

**Summary:**

Eric Hotter's 1958 article in the Indian Libertarian critiques intellectuals from a classical-liberal perspective, portraying them as developing scorn for the common folk and indulging in vanity by imposing their opinions as superior wisdom. Unlike men of action, intellectuals seek leadership and conquest through the 'sanction of ideals' and grand designs for liberty, equality, and justice, often masking personal grievances rather than genuine sympathy for the downtrodden—as Thoreau noted, their ardor cools once their 'private ail' is righted. Hotter describes their cast of mind as essentially aristocratic, echoing Heraclitus in believing that 'ten thousand [masses] do not turn the scale against a single man of worth' and viewing the many as mean while only the few are noble. Intellectuals doubt the masses' ability to achieve anything worthwhile independently and resent their attempts at autonomy, preferring to impose discipline. They would feel out of place in a prosperous society without grievances, where leadership opportunities diminish and a self-assured populace offends their sensibilities. This view aligns with critics like Thomas Sowell and Nassim Taleb, contrasting with idealizations by Ayn Rand or Lenin.

**Key points:**

- Intellectuals scorn the knowledge of the masses and seek to impose their opinions as wisdom.
- They pursue leadership through grandiose ideals for the downtrodden, driven more by personal vanity than sympathy.
- Intellectuals possess an aristocratic mindset, doubting the masses' independent capabilities and resenting their prosperity.

**By Spontaneous Order**

* * *

*What is the role of the intellectual in society? This question has been debated from several perspectives over the centuries, mostly by intellectuals themselves. While Ayn Rand saw the intellectual class as the fountainhead of the dominant philosophy of the age, Lenin saw them as the backbone of the vanguard party, which would bring about the revolution.*

*However, intellectuals like Thomas Sowell criticized them as contributing little to the society’s progress, and Nassim Nicholas Taleb calls most of them IYIs (Intellectual yet Idiots)*

*Views of Mr. Eric Hotter, given in this piece published in the January 1958 edition of the **Indian Libertarian** magazine fall in the critical category. According to him, most intellectuals over time develop a scorn for the common folk and get indulged in their vanity. They disregard the knowledge of the masses and seek to impose their opinion on society as ‘wisdom’.*

The intellectual goes to the masses in search of weightiness and a role of leadership. Unlike the man of action, the man of words needs the sanction of ideals and the incantation of words in order to act forcefully. He wants to lead, command, and conquer. But he must feel that in satisfying these hungers he does not cater to a petty self. He needs justification, and he seeks it in the realization of grandiose design and in the solemn ritual of making the word become flesh. Thus he does battle for the downtrodden and disinherited and for liberty, equality, justice, and truth, though as Thoreau pointed out, the grievance which animates him is not mainly “his sympathy with his fellows in distress, but, though he be the holiest son of God. Once his “private ail” has been righted, the intellectual’s ardour for the under-privileged cools considerably. 

His cast of mind is essentially aristocratic. Like Heraclitus he is convinced that “ten thousand (of the masses) do not turn the scale against a single man of worth” and that “the many are mean and only the few are noble.” He sees himself as a leader and master. Not only does he doubt that the masses could do anything worthwhile on their own but he would resent it if they made the attempt. The masses must obey. They need the shaping force of discipline in both war and peace. It is indeed doubtful that the typical intellectual would feel wholly at home in a society where the masses get their share of the fleshpots. Not only would there be little chance for leadership where people are almost without a grievance but we might suspect that the cockiness and the airs of a prosperous populace would offend his aristocratic sensibilities. 

For full article, visit page 15 on [this link](http://indianliberals.in/~_admin/pdflanguage?id=928760873.pdf).

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

*Read more: [SO Musings: Full Employment and Monetary Policy](https://spontaneousorder.in/so-musings-full-employment-and-monetary-policy/)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## The Cracks in India’s Anti-Bribery Law

Original: https://www.spontaneousorder.in/p/the-cracks-in-indias-anti-bribery-law

Author: Spontaneous Order

Published: 2020-11-12T11:13:43.000Z

Topics: anti-corruption, bribery-laws, incentives, public-policy

> In economics and much of life, the definition of a rational actor is closely grounded in decision-making that promotes self-interest or maximising the payoff that we receive from our actions. While there is a heated debate in psychology about whether hu..

**Summary:**

India's Prevention of Corruption Act, 1988, failed to curb corruption, estimated at up to 5% of GDP, with over 50% of Indians admitting to paying bribes in recent surveys. The 2018 Amendment symmetrically criminalizes both bribe-taking by public servants and bribe-giving, removing prior immunity for givers who reported takers. This aligns the interests of both parties as 'partners in crime,' discouraging bribe-givers from reporting harassment bribes—payments coerced for entitled services like tax refunds or train tickets, affecting 54% of citizens per Transparency International. Drawing on rational self-interest, the author endorses Kaushik Basu's proposal to legalize giving such harassment bribes: this imposes asymmetric liability, freeing givers from punishment while leaving takers exposed, diverging their incentives and encouraging reports. An experiment by Abbink et al. confirms this, boosting bribe-giver reporting from 25% to 59% under asymmetry and cutting official bribe demands from 38% to 25%. From a classical-liberal view, anti-corruption laws must prioritize incentive structures over symmetric punishment to effectively nudge behavior via self-interest.

**Key points:**

- Symmetric criminalization in the 2018 Amendment makes bribe-givers and takers partners in crime, reducing incentives to report corruption.
- Legalizing harassment bribe-giving, as Basu proposes, creates asymmetric liability that encourages givers to report takers without personal risk.
- An experiment showed asymmetric liability increased reporting from 25% to 59% and reduced bribe demands from 38% to 25%.
- Effective anti-bribery policy should design incentives reflecting rational self-interest rather than equal punishment for all parties.

**By Sakshi Dhawan**

* * *

In economics and much of life, the definition of a rational actor is closely grounded in decision-making that promotes self-interest or maximising the payoff that we receive from our actions. While there is a heated debate in psychology about whether human beings are innately wired to cooperate or compete, we have enough clarity on the fact that much of our conditioning orients us towards selfishness.

However, this fact is not yet reflected in policymaking. The most explicit example of this can be found in *The Prevention of Corruption (Amendment) Bill, 2018*. The Prevention of Corruption Act, 1988, has not been significantly successful in reducing corruption. Estimates of public sector corruption range upto [5%](https://books.google.co.in/books/about/Corruption_in_India.html?id=k5VuMwEACAAJ&redir_esc=y) of our GDP and [over 50%](https://theprint.in/india/governance/new-corruption-survey-says-56-indians-admitted-to-paying-a-bribe-in-last-one-year/132743/) of Indians have admitted to bribery in 2019. 

Under the original act, the receipt of a bribe by a public servant was criminalised, and the bribe giver could only be penalised for abetment of the offence conducted by the bribe taker. [Immunity](https://www.lexology.com/library/detail.aspx?g=3e36e01f-e5aa-40d9-a501-710a0c70f387) from prosecution was also previously available for the bribe giver if they provided a statement against the public servant during a trial for corruption.  

One of the most important provisions of the amendment is the [symmetric criminalisation](https://timesofindia.indiatimes.com/india/parliament-passes-bill-to-punish-bribe-givers-along-with-takers-highlights/articleshow/65127834.cms#:~:text=4.,comes%20forward%20within%207%20days) of collusive bribery. Now, bribe giving has been made a direct offence, at par with the act of taking bribes. The provision for immunity no longer holds. This is a move contrary to [suggestions](https://www.ideasforindia.in/topics/governance/should-bribe-givers-be-let-off.html) of many prominent policymakers, who have suggested treating bribes as legal in some cases.

For a class of bribes known as “*harassment bribes*”, in which citizens are forced to pay bribes in order to obtain goods or services that they are legally entitled to, policymakers have suggested a radically different approach. Kaushik Basu, the former Chief Economic Adviser, makes a case for this in his seminal paper, “*[Why, for a Class of Bribes, the Act of Giving a Bribe should be Treated as Legal](https://ideas.repec.org/p/pra/mprapa/50335.html#:~:text=The%20central%20message%20of%20this,punitive%20action%20by%20the%20state.&text=The%20bribe%20giver%20will%20be,getting%20the%20bribe%20taker%20caught.)*”.

He begins with examples of bribery from everyday Indian life: having to pay money under the table to obtain an income tax refund, or to purchase a train ticket. These are not uncommon situations in India. [Transparency International’s Global Corruption Barometer](https://www.transparency.org/en/publications/global-corruption-barometer-2013) for 2013 states that 54% of citizens have paid bribes for common government services. The prevalence of harassment bribes leads to widespread inefficiency and distortions in the economy. Basu argues that the symmetric treatment of the bribe giver and the bribe taker by the law contributes to it. Once a bribe is given, the bribe giver and the bribe taker are both “[partners in crime](https://dea.gov.in/sites/default/files/Act_Giving_Bribe_Legal.pdf)”.    

As long as the act of bribe giving and bribe taking are criminalised, the interests of the bribe taker and bribe giver align. Their payoff would reduce if either one chooses to report the other, as they would both face punishment. Therefore, there exists a clear incentive for the bribe giver to not report the bribe taker. However, if the act of bribe giving is legalised, the bribe giver is free from any punitive action from the state. Hence, the interests of bribe taker and the bribe giver diverge. The bribe givers payoff remains unaltered if they choose to report the harassing official. 

[An experiment](https://poseidon01.ssrn.com/delivery.php?ID=354126086101081080118102102125072127015022034039066089096028006029026015064119066102033025057058114013010097011016101079099006061012033001045102110018111106018024040081077079091000125093002087005083092099115112025098093029088079110099095020027100006&EXT=pdf) using an asymmetric liability mechanism for harassment bribes (such as the one Basu proposes) conducted by Abbink et al. is consistent with this analysis. The percentage of citizens who were willing to pay the bribe and then report it increased from 25% to 59% when the bribe giver and the bribe taker were equally liable and when there was an asymmetric liability policy. A similar drop was observed in the number of public officials who demanded a bribe. The percentage dropped from 38% in a symmetric liability scenario to 25% in an asymmetric liability scenario. 

It is clear to us that a law sets the rules of the game, and attempts to nudge individuals to act in certain ways through incentives (setting aside the capacity of the law to change normative attitudes for now) and disincentives. The government will possibly see more success with an anti-bribery law if it is evaluated in terms of the incentives that it offers those citizens who refrain from this practice.

*Read more from our alumni: [Why a national period leave policy is a bad idea](https://spontaneousorder.in/why-a-national-period-leave-policy-is-a-bad-idea/)*

* * *

**About Sakshi Dhawan**

Sakshi is currently pursuing her Bachelors in Economics from Miranda House, Delhi University. Her research interests lie in the domains of game theory and behavioural economics, and she's keenly interested in the use of data science and statistical models to predict economic behaviour.

## Poona Sarvajanik Sabha and Its Liberal Affiliations

Original: https://www.spontaneousorder.in/p/poona-sarvajanik-sabha-and-its-liberal-affiliations

Author: Spontaneous Order

Published: 2020-11-09T12:00:22.000Z

Topics: civil-society, indian-liberals, representative-politics, 19th-century-nationalism

> The formative years of the modern, pan-Indian nationalism can be traced back to the latter half of the 19th century. The culmination of the British expansion into a centralized governance mechanism partly contributed to this pan-Indian political conscio..

**Summary:**

The Poona Sarvajanik Sabha (PSS), founded on 2 April 1870, emerged as a pioneering classical-liberal association in India, embodying representative politics and civil society principles amid rising pan-Indian nationalism. Drawing from European liberal ideas of self-rule, press freedom, and responsible government, alongside indigenous territorial sentiments, PSS positioned itself as a mediator between the colonial state and people, requiring members to hold mukhtiarnamas from at least 50 adults—reaching 140 members representing 17,000 by June 1871. Its democratic structure featured annual elector meetings, majority voting, and provisions for dissenters. Dominated by elites like sardars, lawyers, and teachers, including diverse Parsi, Muslim, and Christian members, PSS fostered civic consciousness in Poona and Deccan, advocating moderate reforms: simultaneous ICS exams, industry protection, swadeshi, famine relief, primary education, press freedom, fiscal accountability, and Indian parliamentary representation. Under leaders Mahadev Govind Ranade and Ganesh Vasudev Joshi, it launched a Quarterly Journal in 1878 and arbitration courts emulating panchayats. PSS's famine interventions (1872, 1876-78, 1896-97) highlighted liberal civil society activism. It declined post-1897 due to state derecognition after extremist takeover by Tilak, liberal exits by Gokhale and Ranade, and rival associations, yet its legacy endures in pioneering representative politics and pan-Indian democratic foundations.

**Key points:**

- Poona Sarvajanik Sabha founded in 1870 required members to represent at least 50 adults via mukhtiarnama, achieving 140 members for 17,000 people by 1871.
- PSS advocated liberal reforms including simultaneous ICS exams, swadeshi promotion, famine relief, primary education, and press freedom.
- Under Ranade and Joshi, PSS created civic spaces via Quarterly Journal and panchayat-style arbitration courts.
- Sabha declined after 1897 state derecognition amid Tilak's extremist control and liberal formation of Deccan Sabha.
- PSS pioneered representative democracy and pan-Indian political community, contributing to modern Indian democracy.

**By Sanjeet Kashyap**

* * *

The formative years of the modern, pan-Indian nationalism can be traced back to the latter half of the 19th century. The culmination of the British expansion into a centralized governance mechanism partly contributed to this pan-Indian political consciousness. Inspired by the induction of ideas of modernity in India, the newly emergent political associations in major provincial centers responded to this consolidation of colonial administration. These associations fashioned themselves as representatives of native opinion and made claims on behalf of the community. Prominent among them in the western province was the Poona Sarvajanik Sabha.

With a recent past of political gravity as the Maratha center of power that underpinned Poona, the local elites were infused with a strong nationalist sentiment that was inimical to the raj. Of course, as C A Bayly argued, the Marathas demonstrated a strong sense of territoriality which could be interpreted as an indigenous root of primordial patriotism. But, also influential were the ideas of European nationalists like Mazzini and Garibaldi. Moreover, the liberal ideas of self-rule, civil society, press freedom, and a responsible executive as well came to find adherents among the English-educated elites.

After a couple of short-lived experiments in associational politics, the Poona Sarvajanik Sabha was founded on 2nd April 1870. Prior to the coming of the Indian National Congress, the Sabha easily was among the leading native associations in India. The origin story of the Sabha has been a matter of historical debate. Scholars like Ravindra Kumar, R C Majumdar, and S R Tikekar have seen it as a revived form of the earlier Poona Association which was founded in 1867. The Association went defunct by the middle of 1869.  

On the other hand, late historian S R Mehrotra traced its origin to the Parvati Temple fund controversy. Author N C Kelkar and historian Anil Seal regarded both the defunct Association and the temple fund controversy as the impetus for the formation of the Sabha. Based on the contemporary account in the 9 May 1871 issue of the Bombay-based *Star of India*, Mehrotra made a convincing case for the latter. The Sabha was meant to work as a mediating body between the state and people by airing the grievances of people and helping them make claims on the state.

The Sabha has been described as the first Indian association with a representative character which lent some credence to its claim of being a mediating body. The membership to the Sabha was contingent on the production of a *mukhtiarnama* (power of attorney) signed by at least fifty adults. What it essentially means is that every member of the Sabha could claim to represent and speak on behalf of these signatories on public matters. S R Mehrotra showed that by June 1871, the Sabha had 140 members serving as representatives of about 17,000 people. Moreover, the internal functioning of the Sabha also reflected its democratic character. 

The Sabha’s constitution made the provision for an annual meeting of all the electors. The office bearers who were to be elected annually and could stand for re-election included the President, Vice-President, secretaries, and treasurers. A general committee and a managing committee formed the governing apparatus of the Sabha. The decision-making in the Sabha followed the democratic principle of majority voting. However, there also existed a provision for dissenting members to have their arguments annexed in the minutes.    

The democratic functioning and representative base of membership apart, the Sabha was dominated by the wealthy and intellectual elites of the local community. As Mehrotra showed on the basis of the lists of members and office bearers, the Sabha was dominated by *sardars*, landholders, businessmen, retired government servants, lawyers, and teachers. Despite the heavy influence wielded by the Hindu brahmin elites, ‘the Sabha also had a fair number of Parsi, Moslem, and Christian members.’

The Sabha played a crucial role in creating a civic consciousness and public sphere in Poona and the nearby rural areas of Deccan. Moreover, despite the local character of the Sabha in initial years, it also made strides in fomenting a pan-Indian political community by making overtures to political associations in other provinces. In its demands, the Sabha was a moderate association jostling for concessions in terms of political representation and Indianisation of administrative services. Major issues that were of concern to the Sabha included relaxation in the age limit for and simultaneous conduct of the Indian Civil Services exam, state protection for nascent Indian industries against foreign competition, promotion of the swadeshi agenda, famine relief work, liberal political reform in native states, compulsory primary education, press freedom, fiscal accountability, the extension of the limited elective franchise in municipalities, and native Indian representation in the British parliament.

According to Mehrotra, under the able leadership of Mahadev Govind Ranade and Ganesh Vasudev Joshi, the Sabha emerged as the foremost political association in India with a progressive bent. The Quarterly Journal of the Sabha was launched in July 1878 to educate and shape public opinion on matters of social, economic and political interest. In line with the Indian liberal tendency to find an indigenous root of liberal political institutions, the Sabha began to organize arbitration courts in the Deccan for the private settlement of civil disputes. As was stated in Poona Observer, the Sabha here was emulating the ancient institution of the panchayat. 

In the years of Deccan famines in 1872, 1876-78, and 1896-97, the Sabha sent its representatives to rural areas to collect accurate information which then were sent to the government demanding adequate famine relief measures. In the 1896-97 famine, the Sabha volunteers also made the peasantry aware of their rights under the Famine Relief Code. Despite the predominantly urban middle-class character of the Sabha, its work as a mediating body between the state and peasantry stemmed from the liberal conviction of the Sabha leaders who sought to operate in the domain of civil society. The Sabha’s mediating role though was essentially contingent upon the state acceptance of its legitimacy.

Hence, it shouldn’t come as a surprise that with the state derecognition of the Sabha as a representative body, it went moribund after 1897. Earlier in 1895, the extremist faction under Tilak had taken control over the Sabha. The liberals- Gopal Krishan Gokhale and Mahadev Govind Ranade – left the Sabha to form Deccan Sabha in 1896. During the famine of 1896-97, the extremist criticism of the Bombay government led the latter to pass a resolution on 17th March 1897 derecognising the Sabha as a representative body. The Anglo-Indian press was already hostile to the Sabha due to the threat posed by its representative character. Problems were also exacerbated by the death of Joshi earlier in July 1880 who was the dynamic force behind the Sabha. The rift between liberals and conservatives weakened the prospect of cooperation under the auspices of a single body. The coming of new associations like the Indian National Congress, Abhinav Bharat, Deccan Sabha, Satyashodhak Samaj, Dinabandhu Sarvajanik Sabha, and Servants of India Society in the western province made the older association riven with conflict even more irrelevant in public discourse. In the long run, though, the legacy of the Poona Sarvajanik Sabha lies in its pioneering effort at representative politics and a pan-Indian outlook that has contributed to the making of modern Indian democracy.

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

*Read more: [SO Musings: What the Voter Should Know](https://spontaneousorder.in/what-the-voter-should-know-the-historical-origins-of-democracy/)*

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## SO Musings: What the Voter Should Know – The Historical Origins of Democracy

Original: https://www.spontaneousorder.in/p/what-the-voter-should-know-the-historical-origins-of-democracy

Author: Spontaneous Order

Published: 2020-11-06T12:23:58.000Z

Topics: democracy-origins, limited-government, populism, classical-liberalism

> Elections are an indelible part of the democratic process. However, the current trend of populism around the world has made the electoral process and the subsequent democratically elected government entirely contradictory to what the purpose of democrac..

**Summary:**

In a 1961 article from Indian Libertarian magazine, M.A. Venkata Rao argues that democracy's fundamental purpose is to curb arbitrary governmental power, not to deliver welfare or paternalistic providence, countering the populist misconceptions driving modern electoral trends. Historically, democracy arose from the people's need to limit oppression by hereditary rulers like monarchs and oligarchs, born out of intolerance for unchecked power and luxury. Key milestones include the Norman Barons forcing King John to sign the Magna Carta at Runnymede; John Locke's Bill of Rights after the 1688 'bloodless revolution'; the American Declaration of Independence and Rights of Man; the French Revolution's Liberty, Equality, Fraternity; and gradual English constitutional reforms culminating in universal adult franchise post-1914-18 war. These 'bulwarks of liberty' represent limitations imposed by people's representatives to protect daily life from undue government interference. Rao urges voters in India's 'tremendous democracy' to grasp this classical-liberal essence—democracy as a check on power expansion disguised as welfare—rather than endorsing populist governments that contradict its origins.

**Key points:**

- Democracy's raison d'être is to impose checks on arbitrary power by rulers, not to provide welfare.
- Historical landmarks like Magna Carta (1215), Bill of Rights (1689), and French Rights of Man established bulwarks against government overreach.
- Modern populism inverts democracy by using elections to expand governing powers under welfare pretexts.
- Voters must understand these origins to make informed choices and prevent oppression from elected governments.

**By Spontaneous Order**

* * *

*Elections are an indelible part of the democratic process. However, the current trend of populism around the world has made the electoral process and the subsequent democratically elected government entirely contradictory to what the purpose of democracy was. It is pertinent to clarify the concept of why democracy exists for voters to make informed choices.* 

*In this article published in the April 15, 1961 edition of the Indian Libertarian magazine, the author M.A. Venkata Rao emphasises that the origin of democracy was intended to place limits on governing powers and not to invite them to expand powers in the guise of welfare.* 

The first and most important truth that the voter in our tremendous democracy should know is that the raison d’etre of democracy is not welfare or Ma Bap providence to the children as is probably the dominant impression current among the ignorant multitudes. The far more urgent necessity that transferred power to the people from former hereditary holders, (whether monarchies or oligarchies) was the felt need to curb the exercise of arbitrary power on their part resulting in the daily and hourly oppression of the subjects. It is said that democracy was born in envy of the holders of power and their pomp and luxury. It was also attributed to the common man’s intolerance of the ease and comfort that came as a prerequisite to the holders of the governmental power whether they deserved it or not by their discharge of their duties in a faithful manner. 

But the fact remains that the central justification and motive of democracy consisted historically in the necessity of imposing checks on the exercise of arbitrary power by kings and tyrants. The action of the Norman Barons at Runnymede in forcing King John to sign the Magna Carta was the first of the great signals and achievements that came to be written into democratic government in all future times. The Bill of Rights codified by John Locke after the “bloodless revolution” of 1688, the Declaration of Independence and the Rights of Man connected with the American Revolution, the Liberty, Equality, Fraternity and the Rights of Man formulated by the French Revolution not long after in Paris and the democratic rights written into the English constitution stage by stage throughout the nineteenth century, (full universal adult franchise being reached only after the war of 1914-18) are all so many landmarks that spell out the bulwarks of liberty. They are primarily limitations on absolute power imposed by the people’s representatives out of bitter experience to safeguard their daily life from undue interference from their own legitimate governments!

To read the full article, visit page number 3 on this [link.](http://www.indianliberals.in/~_admin/pdflanguage?id=489167936.pdf)

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

*Read more: [SO Musings: Full Employment and Monetary Policy](https://spontaneousorder.in/so-musings-full-employment-and-monetary-policy/)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Spontaneous Dialogue Ep 2: Decoding India’s Onion Crisis

Original: https://www.spontaneousorder.in/p/spontaneous-dialogue-ep-2-decoding-indias-onion-crisis

Author: Spontaneous Order

Published: 2020-11-05T13:08:00.000Z

Topics: onion-crisis, agriculture-policy, government-intervention, price-volatility

> The government has policies related to exports, imports, transportation, and even storage of onions. Why is the price of onions so volatile, reaching as high as Rs.180 at least once every year? What are the root causes? What are the solutions? Are high...

**Summary:**

This promotional post for Spontaneous Dialogue podcast Episode 2 teases a discussion on India's recurring onion price crisis, attributing volatility—peaking at Rs.180/kg annually—to government interventions in exports, imports, transportation, and storage. Hosted by Kumar Anand with guests Barun Mitra of Liberty Institute and journalist Vivian Fernandez, it questions root causes, solutions, and whether this reflects broader issues in Indian agriculture, from a classical-liberal viewpoint critiquing state overreach.

**Key points:**

- Government policies on onion exports, imports, transportation, and storage drive annual price spikes to Rs.180/kg.
- Podcast decodes root causes and solutions to the onion crisis with experts Barun Mitra and Vivian Fernandez.

**By Spontaneous Order**

* * *

The government has policies related to exports, imports, transportation, and even storage of onions. Why is the price of onions so volatile, reaching as high as Rs.180 at least once every year? 

What are the root causes? What are the solutions? Are high onion prices a manifestation of a larger problem facing Indian agriculture?  
  
In this episode of Spontaneous Dialogue, Kumar Anand decodes India’s onion crisis with Barun Mitra, Founder & Director of the Liberty Institute and Vivian Fernandez, Delhi-based journalist.

Listen now:

To listen to all other episodes of the Spontaneous Dialogue Podcast on your favourite platforms, click [here](https://anchor.fm/spontaneousdialogue).

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Doing good in India gets harder: Philanthropy should be regulated by an independent regulator, not by the home ministry

Original: https://www.spontaneousorder.in/p/doing-good-in-india-gets-harder-philanthropy-should-be-regulated-by-an-independent-regulator

Author: Spontaneous Order

Published: 2020-11-04T11:46:11.000Z

Topics: fcra, philanthropy-regulation, ngo-funding, civil-society

> Indira Gandhi’s Emergency was a tragedy in modern India’s history. A second tragedy was not to have undone the terrible laws enacted during the Emergency. One of these is the Foreign Contributions (Regulations) Act or FCRA, which was amended last mont

**Summary:**

The recent amendment to the Foreign Contributions (Regulation) Act (FCRA), a draconian law from Indira Gandhi’s Emergency era, has made philanthropy in India harder by prohibiting transfers of foreign donations to other organizations and capping administrative overheads at 20%, evoking the licence raj and undermining the government’s ease of doing business reforms. This creates panic among thousands of NGOs employing lakhs, halting collaborative programs like education initiatives where international funders sub-grant to local experts, scientific research, and rapid COVID-19 relief efforts for migrant workers—efforts the prime minister praised. Even India’s Green Revolution would have been impossible under these rules, as the Rockefeller Foundation couldn’t have sub-granted for hybrid wheat implementation. From a classical-liberal perspective, FCRA is unnecessary since foreign remittances are already managed by the finance ministry under FEMA, terrorism is addressed by FATF, and NGOs face multiple regulations like PMLA, income tax, and charities commissioners. Both UPA and BJP have worsened FCRA, with the former expanding its scope and the latter adding compliance burdens, while hypocritically amending it for political parties. The solution: scrap FCRA or shift regulation from the distrustful home ministry to an independent regulator under finance ministry’s economic affairs, enabling a transparent social stock exchange and embodying ‘maximum governance, minimum government’ to foster civil society without harassment.

**Key points:**

- FCRA amendment bans sub-granting foreign donations, illegalizing collaborative NGO programs essential for education, research, and relief.
- 20% cap on overheads misclassifies capacity-building and institutional expenses, threatening schools, hospitals, and training for government.
- Replace home ministry oversight with independent regulator under finance ministry to promote philanthropy via social stock exchange.
- Scrap or reform Emergency-era FCRA, as existing laws like FEMA and FATF already control funds and terrorism without harassing innocents.

**By Gurcharan Das**

* * *

Indira Gandhi’s Emergency was a tragedy in modern India’s history. A second tragedy was not to have undone the terrible laws enacted during the Emergency. One of these is the Foreign Contributions (Regulations) Act or FCRA, which was amended last month and has become more draconian.

Its purpose is to regulate funds received by charity groups from abroad. Its consequence, however, has been to create panic among lakhs of people in India and give a bad name to our country abroad. The latest amendment evokes images among international donors of the return of India’s dreaded licence raj. At one stroke, it has undone the good work of this government in the ‘ease of doing business’ as well as the positive atmosphere created by the recent agriculture and labour reforms.

Some international donors have begun to question if grants meant for India should now be diverted to more hospitable countries where philanthropy is more welcome. There are a number of provisions in the latest amendment but let me focus on two that are almost impossible to implement.

One forbids the transfer of a foreign donation to another organisation. I shall illustrate with a real life example. An international foundation discovers a major breakthrough to improve children’s learning in reading and arithmetic. It gives a grant to a reputable Indian NGO with expertise in education to implement the programme. The latter selects ten outstanding local NGOs in the states, each with a proven record of working with schools to execute such a project. This FCRA amendment has now declared this collaborative programme illegal. There’s panic across India as thousands of local NGOs with lakhs of employees now face the prospect of closing down.

Many scientific research projects that depend on external funding face the same future. India’s green revolution wouldn’t have occurred under this FCRA amendment because the Rockefeller Foundation, which discovered the high yielding hybrid wheat in Mexico, wouldn’t have been able to sub-grant to implement the programme in the field.

The timing of this amendment is also ironic. When India is battling a deadly virus and the prime minister has applauded NGOs for their stellar role in delivering urgent relief, the regulator has decided to punish them. The NGOs were able to set up shelters and feeding centres for migrant workers with unimaginable speed precisely because modern philanthropy works in a collaborative way by sub-contracting field execution to smaller NGOs.

A second provision has put a cap of 20% on overhead expenses. Again, it misunderstands how civil society works. Those NGOs who run research institutions, schools, hospitals, and shelters out of foreign funds will now have to prove that most of their employee expenses are non-administrative. More difficult will be the job of NGOs involved in capacity building of state governments. The salaries of these employees will be termed as ‘overheads’ because their employees don’t interface with ‘beneficiaries’ but train government employees instead, who in turn deliver benefits to beneficiaries.

After this fiasco, the government should question if such a law from the Emergency era is needed. In practice, all foreign remittances – to persons, to industry, to civil society – are controlled by the finance ministry under Foreign Exchange Management Act. Why should charitable contributions be controlled by the home ministry under FCRA? If the purpose is to control terrorism, there is already the FATF (Financial Actions Task Force) to do that.

Most countries control terrorist funding through FATF type mechanisms. Moreover, NGOs are already regulated by many existing controls – Prevention of Money Laundering Act regulated by RBI, income tax and 12A certification, 80G certificate, Charities Commissioner, Registrar of Companies. In fact, the government did once consider scrapping FCRA in the early 1990s in the spirit of liberalising the economy.

If the law can’t be scrapped, why should the home ministry be burdened with regulating philanthropy? The home ministry is a well-meaning policeman, trained to distrust people, and its natural reaction is to use force. Wouldn’t it be better to entrust the regulation of civil society and philanthropy to an independent regulator in a department such as economic affairs in the finance ministry? It would then want to implement finance minister Nirmala Sitharaman’s excellent promise in 2019 to create an electronic fund-raising platform, a transparent social stock exchange under SEBI for listing social enterprises and volunteer organisations. This change would make it easier for both: For those trying to do good in India and for the home ministry, freeing it to do its job of catching terrorists.

There’s no point in blaming BJP alone. UPA made the FCRA law harsher in 2010 by extending its net to cover more civil society groups. In 2012, three NGOs lost their licence during the protest against the Kudankulam nuclear power plant. BJP went further to make compliance more onerous by increasing e-filing requirements and making licence renewal more difficult. Both political parties were complicit also in breaking the FCRA law. In 2014, the Delhi high court found them guilty of illegally receiving foreign contributions. The law was quietly amended to make it easier for political parties to accept foreign funds.

Vidura, royal counsellor in the Mahabharata, explains to King Dhritarashtra that raj dharma begins and ends with doing good to the people. A king enacts a law to catch a thief but if that law ends in harassing lakhs of innocent people, it is adharma. When this government implemented ‘self-attestation’, it was an act of dharma. But this FCRA amendment is an act of adharma. Without meaning to, the government has created fear among lakhs of idealistic, committed young people and is about to throw the baby out with the bathwater. Now’s the time to practise ‘maximum governance and minimum government’ and undo this damage.

*This article was originally published in the [Times of India](https://timesofindia.indiatimes.com/blogs/men-and-ideas/doing-good-in-india-gets-harder-philanthropy-should-be-regulated-by-an-independent-regulator-not-by-the-home-ministry/) on 3rd November 2020.*

*Read more: [Big Tech Needs Regulation but Govt Action No Solution](https://spontaneousorder.in/big-tech-needs-regulation-but-govt-action-no-solution/)*

* * *

**About Gurcharan Das**

Gurcharan Das is an author and public intellectual and former CEO of Procter & Gamble India. After heading Procter & Gamble India and South East Asia, he became Managing Director, Procter & Gamble Worldwide (Strategic Planning). At 50, he took early retirement to become a full-time writer. He is the author of many acclaimed works, including India Grows at Night (which was on the Financial Times list of best books for 2013), The Difficulty of Being Good and India Unbound. He is a regular columnist at major newspapers including the Times of India and Dainik Bhaskar; and also writes periodically in the New York Times, Wall Street Journal, Financial Times, Foreign Affairs, and Newsweek.

## Why a national period leave policy is a bad idea

Original: https://www.spontaneousorder.in/p/why-a-national-period-leave-policy-is-a-bad-idea

Author: Spontaneous Order

Published: 2020-11-02T11:31:46.000Z

Topics: period-leave-policy, hiring-bias, informal-sector, hayek-knowledge-problem

> Recently Zomato, one of the biggest Indian food delivery start-ups, announced its paid period leave policy. This policy grants 10 additional paid leaves a year to all female and transgender employees to normalize leaves for the sole purpose of resting d..

**Summary:**

A national government-mandated paid period leave policy, like the 2017 Menstruation Benefits Bill, is a bad idea despite Zomato's voluntary offer of 10 additional paid leaves for female and transgender employees to address menstruation stigma and issues affecting 20% of women per a 2012 study. From a classical-liberal perspective invoking Hayek's 'Use of Knowledge in Society,' governments lack the dispersed knowledge firms have about costs and employee preferences, leading to unintended harms. Key consequences include heightened hiring bias against women in small enterprises and MSMEs, especially in India's informal sector employing 82.6% of the workforce (NSS 2011-12 data), exacerbating low female labor participation. A uniform mandate assumes all women want or are comfortable disclosing period needs, ignoring privacy preferences and desires for flexible leaves. Instead, enterprises should freely decide after employee surveys, while government enables women's rights protection, incentives for progressive policies, and stigma reduction without coercion. Special knowledge of women's needs belongs to individuals, not central planners.

**Key points:**

- Government-mandated period leave policies will increase hiring discrimination against women in cost-sensitive small firms and the 82.6% informal sector workforce.
- Firms should voluntarily implement period leave after surveying employee preferences to respect privacy and individual needs.
- Governments lack Hayekian knowledge of firm-specific costs and should avoid mandates, focusing instead on protecting women's rights and incentivizing private initiatives.

**By Asmita Kapoor**

* * *

Recently *[Zomato](https://www.nytimes.com/2020/08/11/business/india-zomato-period-leave.html)*, one of the biggest Indian food delivery start-ups, announced its paid period leave policy. This policy grants 10 additional paid leaves a year to all female and transgender employees to normalize leaves for the sole purpose of resting during their menstruation cycle.

Naturally so, this move received praise on one hand while stirring up many debates on the other. Advocates of this policy called it a bold and a long-overdue progressive move to get rid of the stigma associated with menstruation. It accounts for the pressure that severe medical conditions related to menstruation, such as pelvic and lower back pain, endometriosis, PCOS and the like, put on women. [A 2012 study](https://www.aafp.org/afp/2012/0215/p386.html) shows that painful periods interfere with 20% of women’s daily activities. Thus, it is important to accept the biological differences between genders and de-stigmatize menstruation.

Often, this debate leads to one pressing question: *Should any government, central or state, mandate that all companies, in all sectors, mandate a paid menstruation leave policy?*

In [2017,](http://164.100.47.4/billstexts/lsbilltexts/asintroduced/2651LS%20As%20In.pdf) *[The Menstruation Benefits Bill](http://164.100.47.4/billstexts/lsbilltexts/asintroduced/2651LS%20As%20In.pdf)* was introduced in the Lok Sabha by Member of Parliament, Shri Ninong Ering, “to provide certain facilities to female employees during menstruation at the workplace and for matters connected therewith or incidental thereto.”

Supporters of the bill are of the view that such a mandate by the central government will further the cause of tackling the taboo against periods. In a poll that I conducted within a small group of people, not a single person was skeptical of such government intervention. Much like the majority of people who have taken to social media to share their views about this, the respondents of my poll also believed that a special “period leave” should be given. Supporters of such a government policy see this as a step towards shifting mindset and attitudes of people, especially those in the corporate world, towards menstruation.

However, the unintended costs and consequences of imposing a paid national menstrual leave policy are far worse for the condition of women in workplaces. The government’s role should be limited to promoting an enabling environment for women through other ways while leaving it up to individual firms to decide if they wish to implement a policy of paid period leaves.

As Hayek points out in his piece on *[The Use of Knowledge in Society](https://www.econlib.org/library/Essays/hykKnw.html)*, the economic problem of society is a “problem of utilization of knowledge not given to anyone in its totality”. He points out that an individual’s active cooperation and planning is preferred over the central government’s planning because the individual has unique knowledge over others. When governments impose such policies on firms, possessing only a tiny fraction of knowledge about the costs each firm would incur, it will do more harm than good.

What are the unintended consequences in this case?

Firstly, there will be an increase in hiring bias from companies that cannot afford the costs of providing additional leaves to their employees. It is essential to take into account that the majority of India’s population (82.6%) works in the unorganized informal sector, according to [NSS 68th unit-level data on Employment and Unemployment](http://microdata.gov.in/nada43/index.php/catalog/127), 2011-12. This sector already bears the brunt of huge costs. The “woke” decision taken by Zomato, the largest Indian food delivery start-up, cannot be taken by small enterprises and MSMEs which do not have the same earnings. Thus, it would not be surprising to see such small firms practice discrimination against hiring women, preferring to hire more men. This would be alarming, considering that the number of women in the workforce is already pitiable. This is contrary to what the advocates of a paid period leave policy want!

Another consequence of the limited knowledge that the government has is that they do not have the knowledge to determine what women want in different companies. Implementing a government-mandated uniform policy for all firms means that an assumption is being made that all women need such leaves and more importantly, that they are comfortable discussing their menstrual cycles with their employers. Such an assumption is detrimental. It is a possibility, especially given the conservative society that shapes our mindset, that some women are simply not comfortable sharing such information. There might be women who prefer keeping their cycles a private matter, simply because they have the right to do so. Such women would prefer a more flexible leave policy over special ‘period’ labelled leaves. Therefore, instead of the government deciding for everybody, women should be able to decide for themselves.

Having elaborated upon these points, I would like to re-emphasize that period leaves are not problematic per se but a government-imposed policy on period leaves is not the way to go about it.  All enterprises should have the freedom to decide for themselves if they can bear the costs of such a policy. Those who decide to implement such a policy should conduct surveys of their employees to get a better understanding of individual preferences.

There are other ways through which the government can target ending the stigma around menstruation and providing a safer workplace environment. A few examples include having government policies that centre around building strong institutions to protect the rights of women, building an effective incentive structure to encourage firms to take such policy decisions and talk about the sensitivity of the issue themselves.

I would like to end with a slightly tweaked but more relevant version of what Hayek mentioned in [The Use of Knowledge in Society](https://www.econlib.org/library/Essays/hykKnw.html): *Special knowledge of time and place can be left to the woman on the spot.*

*Read more: [A Case for Decriminalising Sex work in India](https://spontaneousorder.in/a-case-for-decriminalising-sex-work-in-india/)*

* * *

**About Asmita Kapoor**

Based in Delhi, I became a student of Economics three years back and completed my Bachelors from Delhi University this year. While I have always been sure of Economics as my field, very recently I developed an interest in development economics and policy analysis. Therefore, for me, this year is all about constantly learning about this field and myself. I do not wish to rush through life but figure it out at my own pace.

## SO Musings: Full Employment and Monetary Policy

Original: https://www.spontaneousorder.in/p/so-musings-full-employment-and-monetary-policy

Author: Spontaneous Order

Published: 2020-10-30T15:06:22.000Z

Topics: labour-markets, full-employment, labour-unions, free-markets

> The recent bills on labour codes passed by the parliament make the labour market in India more flexible. However, they have met with opposition from the labour unions and activists who contend that since the bills make the firing of workers easier they ..

**Summary:**

Recent Indian labour code bills introduce greater flexibility by easing worker firing, drawing opposition from unions fearing reduced job security and higher unemployment. Ludwig von Mises, in a 1957 piece in The Indian Libertarian, counters that lasting unemployment stems from institutional restrictions like government decrees or hyper-unionisation, not free markets. In an unhampered labour market, wage rates naturally tend toward full employment, as everyone willing to work at market rates can find jobs and employers can hire. Market wages rise with increased capital per worker—via savings, investment, or reduced labour supply from immigration barriers—or when labour productivity outpaces capital. Mises criticises Keynesian 'full employment' via government spending and questions union desirability. He notes historical liberalism had no migration barriers, unlike today's welfarism and unionism, which impose quotas, prohibit immigration (e.g., USA), or exclude groups like coloured workers to limit jobseekers. Government interventions above market prices leave supply unsold, applying equally to labour. The classical-liberal view champions unrestricted labour markets to eliminate unemployment.

**Key points:**

- Labour code reforms making firing easier enhance flexibility and counter institutional unemployment causes, per Mises.
- Free labour markets ensure full employment as market wages match supply and demand without restrictions.
- Unemployment arises from government minimum wages, union power, or barriers like immigration quotas that distort markets.
- Wage rises occur through capital accumulation per worker or reduced labour supply, not Keynesian spending.

**By Spontaneous Order**

* * *

*The recent bills on labour codes passed by the parliament make the labour market in India more flexible. However, they have met with opposition from the labour unions and activists who contend that since the bills make the firing of workers easier they will reduce job security and increase unemployment.*

*However, Mr. Ludvig Von Mises, in his piece published in the September 1957 issue of **The Indian Libertarian** magazine, opines that lasting unemployment is not a feature of a free market but is of ‘institutional nature’. Whenever the labour market is restricted by either thorough political decree or hyper-unionisation, unemployment will result. He advocates a free market in labour and also castigates the Keynesian idea of ‘full employment’ brought about through government expenditure.*

*(One of the world’s greatest teachers of economics refuses here to beat around the bush and bluntly asks: Are Labour Unions Desirable?)*

As the price determined in an unhampered market all those who consider it satisfactory can sell and all those who are prepared to pay it can buy. If commodities remain unsold, this is not due to their “unsaleability” but to speculation on the part of their owners; they expect that they will be able to sell later at a higher price. It is different when the authorities try to influence the market by compulsion. If the government decrees and enforces minimum prices higher than the potential market prices a part of the supply offered for sale at the official minimum prices remains unsold. This fact is well known. Therefore, if the government wants to push the prices of a commodity above the potential market price, it does not simply resort to the fixing of minimum prices. It rather tries to reduce the quantity offered for sale on the market; for instance, by purchasing and withholding a part of the supply available.

All this applies to labour. At the wage rates determined in the labour market everybody who looks for a job can get it and everybody who wants to employ workers can hire them. In the unhampered labour market, wage rates always tend toward full employment. Market wage rates rise when the marginal productivity of labour outruns the marginal productivity of capital goods or more simply~ when the per-head quota of capital invested increases. This is effected either by the accumulation of new capital or by a drop in the number of workers. An increase in the amount of capital is the result of saving and consequent investment. A reduction in the supply of labour on the market can be brought about by restricting immigration. In the age of liberalism (in the traditional classical connotation) there were practically no migration barriers. In this age of welfarism and unionism wellneigh all governments have either completely prohibited immigration-as for instance USA and other American Republics-stipulated definite quotas. Beyond that, some American unions have tried to reduce still more the number of jobseekers in their segment of the labour market by excluding coloured people from some kinds of employment and by rendering entrance into certain branches extremely difficult. 

**\[Contd…\]**

To read the full text of this article, please visit page 11 on [this](http://indianliberals.in/~_admin/pdflanguage?id=71184343.pdf) link.

*Read more: [Removal of Statues](https://spontaneousorder.in/so-musing-removal-of-statues/)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## ਫਾਰਮ ਕਾਨੂੰਨਾਂ ਦੇ ਜ਼ਰੀਏ ਹੋਰ ਆਜ਼ਾਦੀ ਅਤੇ ਬਿਹਤਰ ਕੀਮਤਾਂ ਲਿਆਉਣਾ

Original: https://www.spontaneousorder.in/p/20-10-29

Author: Spontaneous Order

Published: 2020-10-29T10:56:00.000Z

Topics: farm-reforms, contract-farming, agricultural-markets, minimum-support-price

> ਵਿਰੋਧੀ ਪਾਰਟੀਆਂ ਅਤੇ ਕੁਝ ਕਿਸਾਨੀ ਸੰਗਠਨਾਂ ਨੇ ਤਿੰਨ ਨਵੇਂ ਖੇਤੀਬਾੜੀ ਸੁਧਾਰ ਕਾਨੂੰਨਾਂ ਦੇ ਵਿਰੁੱਧ ਵਿਰੋਧ ਜਤਾਇ

**Summary:**

Swaminathan S.A. Aiyar defends India's three new farm reform laws against opposition from parties and farmer unions, arguing they provide essential freedoms for farmers to sell produce anywhere in India, bypassing middlemen in state-designated mandis, taxes, and commissions to secure better prices and marketing efficiency. He dismisses false claims that the laws end minimum support prices (MSP) and government procurement, noting these continue for key grains needed for ration shops. Farming is unattractive—42% of farmers want to exit, farm numbers doubled from 71 to 145 million between 1970-71 and 2015-16, average size halving from 2.28 to 1.08 hectares—making the real solution a shift to industry and services. Contract farming with agro-processors ensures minimum prices; ITC's e-Choupals have aided 4 million farmers across 10 states voluntarily with market info, yielding fair prices and minimal corporate profit. Amending the Essential Commodities Act removes stock limits that deterred storage investment. Global evidence warns high guaranteed prices cause gluts, as in the EU; direct cash transfers like Odisha's KALIA (₹10,000/acre for landowners, tenants, sharecroppers) or Telangana's Rythu Bandhu (₹10,000/acre) are superior interim aids. True path: sales freedom, exit from farming, cash support over high prices.

**Key points:**

- New farm laws empower farmers to sell produce anywhere in India, eliminating middlemen, mandi taxes, and commissions for better prices.
- MSP and government procurement for key grains continue unaffected, countering opposition misinformation.
- Contract farming and models like ITC e-Choupals benefit 4 million small farmers voluntarily with assured prices and market information.
- Amending Essential Commodities Act removes stock limits to boost storage and stabilize prices for farmers.
- Direct cash transfers to farmers, as in Odisha's KALIA scheme, outperform high-price guarantees and facilitate shift out of unviable small farms.

**By Swaminathan SA Aiyer**

* * *

ਵਿਰੋਧੀ ਪਾਰਟੀਆਂ ਅਤੇ ਕੁਝ ਕਿਸਾਨੀ ਸੰਗਠਨਾਂ ਨੇ ਤਿੰਨ ਨਵੇਂ ਖੇਤੀਬਾੜੀ ਸੁਧਾਰ ਕਾਨੂੰਨਾਂ ਦੇ ਵਿਰੁੱਧ ਵਿਰੋਧ ਜਤਾਇਆ ਹੈ |  ਇਹ ਬਹੁਤ ਜ਼ਿਆਦਾ ਲੋੜੀਂਦੇ ਸੁਧਾਰ ਪ੍ਰਦਾਨ ਕਰਦੇ ਹਨ ਜੋ ਕਿ ਦਰਮਿਆਨੀਆਂ ਨੂੰ ਕੱਟ ਕੇ ਕਿਸਾਨਾਂ ਨੂੰ ਵਧੀਆ ਕੀਮਤ ਪ੍ਰਾਪਤ ਕਰਨ ਵਿਚ ਸਹਾਇਤਾ ਅਤੇ ਮਾਰਕੀਟਿੰਗ ਦੀ ਕੁਸ਼ਲਤਾ ਵਿੱਚ ਸੁਧਾਰ ਕਰਨਗੇ | ਵਿਰੋਧ ਝੂਠੇ ਇਲਜ਼ਾਮਾਂ ਤੋਂ ਪੈਦਾ ਹੁੰਦਾ ਹੈ ਕਿ ਨਵੇਂ ਕਾਨੂੰਨਾਂ ਦਾ ਅਰਥ ਘੱਟੋ ਘੱਟ ਸਮਰਥਨ ਕੀਮਤਾਂ (ਐਮਐਸਪੀ) ਅਤੇ ਕੇਂਦਰ ਅਤੇ ਰਾਜ ਸਰਕਾਰਾਂ ਦੁਆਰਾ ਖਰੀਦ ਨੂੰ ਖਤਮ ਕਰਨਾ ਹੈ |

ਨਵੇਂ ਕਾਨੂੰਨ ਕਿਸਾਨਾਂ ਨੂੰ ਉਨ੍ਹਾਂ ਦੀ ਉਪਜ ਭਾਰਤ ਵਿੱਚ ਕਿਥੇ ਵੀ ਵੇਚਣ ਦੀ ਆਜ਼ਾਦੀ ਦਿੰਦੇ ਹਨ | ਪਾਠਕੋ, ਆਪਣੇ ਆਪ ਨੂੰ ਪੁੱਛੋ, ਕੀ ਤੁਸੀਂ ਭਾਰਤ ਵਿੱਚ ਅਜ਼ਾਦੀ ਨਾਲ ਕਿਥੇ ਵੀ ਤਨਖਾਹ ਕਮਾਉਣਾ ਜਾਂ ਚੀਜ਼ਾਂ ਜਾਂ ਸੇਵਾਵਾਂ ਨੂੰ ਵੇਚਣਾ ਚਾਹੁੰਦੇ ਹੋ ਜਾਂ ਸਿਰਫ ਰਾਜ ਸਰਕਾਰਾਂ ਦੁਆਰਾ ਮਨੋਨੀਤ ਥਾਂਵਾਂ ਤੇ ਸਿਰਫ ਵਿਚੋਲੇ ਨੂੰ ਕਮਿਸ਼ਨ ਭੁਗਤਾਨ ਕਰਨ ਤੋਂ ਬਾਅਦ , ਅਤੇ ਸਿਰਫ ਰਾਜ ਸਰਕਾਰਾਂ ਨੂੰ ਟੈਕਸ ਅਦਾ ਕਰਨ ਤੋਂ ਬਾਅਦ (ਕਿਸਾਨਾਂ ਦੁਆਰਾ ਮੰਡੀ ਟੈਕਸ ਦਿੱਤਾ ਜਾਂਦਾ ਹੈ )?  ਜੋ ਕਿ ਇੱਕ ਨਿੰਦਕ ਦੇ ਤੌਰਤੇ ਤੇ ਗੁੱਸਾ ਹੋਵੇਗਾ | ਕਿਸਾਨ ਭਾਰਤ ਵਿਚ ਕਿਥੇ ਵੀ ਖਰੀਦਣ ਅਤੇ ਵੇਚਣ ਲਈ ਗੈਰ-ਕਿਸਾਨ ਵਾਂਗ ਆਜ਼ਾਦ ਹੋਣੇ ਚਾਹੀਦੇ ਹਨ |

ਖੇਤੀ ਇੱਕ ਆਕਰਸ਼ਕ ਕਿੱਤਾ ਨਹੀਂ ਹੈ | ਸਰਵੇਖਣ ਵਿੱਚ 42% ਕਿਸਾਨ ਇਸ ਤੋਂ ਬਾਹਰ ਜਾਣਾ ਚਾਹੁੰਦੇ ਹਨ | 1970-71 ਅਤੇ 2015-16 ਦੇ ਵਿਚਕਾਰ, ਫਾਰਮਾਂ ਦੀ ਗਿਣਤੀ 71 ਮਿਲੀਅਨ ਤੋਂ ਵੱਧ ਕੇ 145 ਮਿਲੀਅਨ (ਦੁੱਗਣੀ) ਹੋ ਗਈ ਹੈ | ਸਤਨ ਖੇਤ ਦਾ ਆਕਾਰ 2.28 ਹੈਕਟੇਅਰ ਤੋਂ 1.08 ਤੱਕ ਅੱਧਾ ਹੋ ਗਿਆ ਹੈ | ਕੋਈ ਵੀ ਅਜਿਹੇ ਛੋਟੇ ਫਾਰਮਾਂ ਤੋਂ ਚੰਗੀ ਕਮਾਈ ਨਹੀਂ ਕਰ ਸਕਦਾ | ਲੋਕਾਂ ਨੂੰ ਖੇਤੀਬਾੜੀ ਤੋਂ ਬਾਹਰ ਉਤਪਾਦਨ ਅਤੇ ਸੇਵਾਵਾਂ ਵੱਲ ਲਿਜਾਣਾ ਹੀ ਮੁੱਖ ਹੱਲ ਹੈ | ਹੋਰ ਉਪਾਅ ਸਿਰਫ ਉਪਚਾਰੀਆ ਹਨ‌ |

ਵਿਰੋਧੀ ਪਾਰਟੀਆਂ ਦਾ ਦਾਅਵਾ ਹੈ ਕਿ ਵੇਚਣ ਦੀ ਆਜ਼ਾਦੀ ਦੇ ਅੰਤ ਦਾ ਮਤਲਬ ਹੋਵੇਗਾ ਐਮਐਸਪੀਜ਼ ਵਿਖੇ ਸਰਕਾਰੀ ਖਰੀਦ | ਇਹ ਇਕ ਸਪਸ਼ਟ ਝੂਠ ਹੈ | ਸਰਕਾਰ ਕੁਝ ਉਤਪਾਦਾਂ (ਹਾਲਾਂਕਿ ਸਾਰੇ ਨਹੀਂ) ਦੀ ਖਰੀਦ ਐਮਐਸਪੀ ਤੇ ਜਾਰੀ ਰੱਖੇਗੀ | ਸਰਕਾਰ ਰਾਸ਼ਨ ਦੀਆਂ ਦੁਕਾਨਾਂ ਲਈ ਅਨਾਜ ਕਿਵੇਂ ਪ੍ਰਾਪਤ ਕਰੇਗੀ? ਹਾਏ, ਅਸੀਂ ਜਾਅਲੀ ਖ਼ਬਰਾਂ ਦੇ ਯੁੱਗ ਵਿਚ ਰਹਿੰਦੇ ਹਾਂ | ਸੀਰੀਅਲ ਦੇ ਇੱਕ ਹੈਕਟੇਅਰ ਵਿੱਚ ਇਕ ਵਧੀਆ ਆਮਦਨੀ ਨਹੀਂ ਮਿਲਦੀ | ਛੋਟੇ ਕਿਸਾਨ ਪਸ਼ੂਆਂ ਪਾਲਣ, ਸਬਜ਼ੀਆਂ ਅਤੇ ਫਲਾਂ ਵੱਲ ਜਾ ਰਹੇ ਹਨ | ਇਹ ਘੱਟ ਜ਼ਮੀਨ ਤੋਂ ਵਧੇਰੀ ਆਮਦਨੀ ਦਿੰਦੇ ਹਨ | ਪਰ ਸਬਜ਼ੀਆਂ ਅਤੇ ਫਲ ਨਾਸ਼ਵਾਨ ਹਨ ਅਤੇ ਇਹ ਹੌਲੀ ਚੱਲਦੀ ਸਰਕਾਰੀ ਏਜੰਸੀਆਂ ਦੁਆਰਾ ਖਰੀਦੇ ਅਤੇ ਵੰਡੇ ਨਹੀਂ ਜਾ ਸਕਦੇ | ਸਭ ਤੋਂ ਵਧੀਆ ਤਰੀਕਾ ਅੱਗੇ ਕਿਸਾਨਾਂ ਦੇ ਸਮੂਹਾਂ ਲਈ ਐਗਰੋ-ਪ੍ਰੋਸੈਸਰਾਂ ਨਾਲ ਸਮਝੌਤੇ ਕਰਨਾ ਹੈ | ਇਕਰਾਰਨਾਮੇ ਦੀ ਖੇਤੀ ਨਾਲ ਕਿਸਾਨਾਂ ਲਈ ਵਿਸ਼ਾਲ ਅਰਥ ਵਿਵਸਥਾ ਪੈਦਾ ਹੋਵੇਗੀ ਅਤੇ ਇਹ ਯਕੀਨ ਬਣਾਇਆ ਜਾਏਗਾ ਕਿ ਘੱਟੋ ਘੱਟ ਕੀਮਤ ਕਿਸਾਨਾਂ ਨੂੰ ਮਿਲੇ |

ਖੱਬੇਪੱਖੀ ਕਹਿੰਦੇ ਹਨ ਕਿ ਕਿਸਾਨ ਹਾਰ ਜਾਣਗੇ ਅਤੇ ਸਿਰਫ ਕਾਰਪੋਰੇਸ਼ਨਾਂ ਨੂੰ ਲਾਭ ਹੋਵੇਗਾ.  ਤਾਂ ਕਿਵੇਂ? ਕੋਈ ਵੀ ਕਿਸਾਨ ਇਕਰਾਰਨਾਮੇ ਦੀ ਖੇਤੀ ਤੋਂ ਬਾਹਰ ਜਾਂ ਅੰਦਰ ਆ ਸਕਦਾ ਹੈ | ਦੋ ਦਹਾਕਿਆਂ ਤੋਂ ਵੱਧ,ਆਈ ਟੀ ਸੀ ਨੇ ਇਲੈਕਟ੍ਰਾਨਿਕ ਦੇ ਨਾਲ ਈਕੋਪਲ, ਖਰੀਦ ਕੇਂਦਰ ਸਥਾਪਤ ਕੀਤੇ ਹਨ |

ਮੰਡੀਆਂ ਅਤੇ ਵਿਦੇਸ਼ੀ ਭਾਅ ਨੂੰ ਟਰੈਕ ਕਰਨ ਲਈ ਕਿਸਾਨਾਂ ਨੂੰ ਸਮਰੱਥ ਕਰਨ ਵਾਲੀ ਬਾਜ਼ਾਰ ਦੀ ਜਾਣਕਾਰੀ , ਆਪਣੇ ਆਪ ਨੂੰ ਸੰਤੁਸ਼ਟ ਕਰਦੇ ਹੋਏ ਉਹ ਇੱਕ ਉੱਚਿਤ ਕੀਮਤ ਪ੍ਰਾਪਤ ਕਰ ਰਹੇ ਹਨ |  ਈ-ਚੌਪਲਾਂ 10 ਰਾਜਾਂ ਦੇ 35,000 ਪਿੰਡਾਂ ਵਿੱਚ ਸੋਇਆਬੀਨ, ਕਾਫੀ, ਕਣਕ, ਚਾਵਲ, ਦਾਲਾਂ ਅਤੇ ਝੀਂਗਿਆਂ ਦੀ ਕਾਸ਼ਤ ਕਰਨ ਵਾਲੇ 40 ਲੱਖ ਕਿਸਾਨਾਂ ਦੀ ਸਹਾਇਤਾ ਕਰੋ।  ਇਹ ਸਪੱਸ਼ਟ ਹੈ ਉਨ੍ਹਾਂ ਕਿਸਾਨਾਂ ਦੀ ਮਦਦ ਕਰਦਾ ਹੈ ਜਿਹੜੇ ਸਵੈ-ਇੱਛਾ ਨਾਲ ਹਿੱਸਾ ਲੈਂਦੇ ਹਨ.  ਫਿਰ ਵੀ ਆਈ ਟੀ ਸੀ ਦਾ ਮੁਨਾਫਾ ਇੰਨਾ ਮਾਮੂਲੀ ਹੈ ਕਿ ਵਿਰੋਧੀ ਇਸਦੀ ਨਕਲ ਕਰਨ ਲਈ ਕਾਹਲੇ ਨਹੀਂ ਹੋਏ | ਇਹ ਇਕਰਾਰਨਾਮੇ ਦੀ ਖੇਤੀ ਬਾਰੇ ਸੱਚ ਹੋਵੇਗਾ |  
  
ਇਸ ਤੋਂ ਇਲਾਵਾ, ਇਕਰਾਰਨਾਮੇ ਦੀ ਖੇਤੀ ਛੋਟੇ ਕਿਸਾਨਾਂ ਦੁਆਰਾ ਸਮੂਹਕ ਖੇਤੀ ਨੂੰ ਪੈਮਾਨੇ ਦੀ ਆਰਥਿਕਤਾ ਨੂੰ ਵਡਣ ਲਈ ਉਤਸ਼ਾਹਤ ਕਰੇਦੀ ਹੈ‌ ਅੱਜ ਅਤੇ ਖਰੀਦ ਕਾਰਪੋਰੇਸ਼ਨਾਂ ਕਿਸਾਨਾਂ ਨੂੰ ਵਧੀਆ ਨਵੀਂ ਤਕਨੀਕ ਅਤੇ ਫਾਰਮ ਪ੍ਰਦਾਨ ਕਰਨਾ ਉੱਚਤ ਹੋਵੇਗਾ ਪਰ ਕੁਝ ਸਰਕਾਰੀ ਵਿਸਥਾਰ ਸੇਵਾਵਾਂ ਬੁਰੀ ਤਰਾਂ ਅਸਫਲ ਰਹੀਆਂ ਹਨ| 

ਜ਼ਰੂਰੀ ਚੀਜ਼ਾਂ ਐਕਟ ਨੂੰ ਰੋਕਣ ਲਈ ਦਹਾਕਿਆਂ ਪਹਿਲਾਂ ਹੋਰਡਿੰਗ ਰੋਕਣ ਵਾਸਤੇ ਲਾਗੂ ਕੀਤਾ ਗਿਆ ਸੀ | ਰਾਜ ਵਪਾਰੀਆਂ ਲਈ ਸਟਾਕ ਸੀਮਾਵਾਂ ਦਾ ਐਲਾਨ ਕਰ ਸਕਦੇ ਹਨ ਅਤੇ ਉਨ੍ਹਾਂ ਨੂੰ ਸਮੁੱਚੇ ਰਾਜਾਂ ਵਿੱਚ ਮਾਲ ਭੇਜਣ ਤੋਂ  
ਰੋਕ ਸਕਦੇ ਹਨ | ਅਮਲੀ ਤੌਰ ‘ਤੇ, ਇਸ ਦਾ ਅਸਰ ਕਿਸਾਨਾਂ’ ਤੇ ਵੀ ਪਿਆ।  ਉਹ ਸੁਰੱਖਿਅਤ ਨਹੀਂ ਸਨ ਜੇ ਆਲੂ ਜਾਂ ਪਿਆਜ਼ ਦੀਆਂ ਕੀਮਤਾਂ ਘਟੀਆਂ ਸਨ | ਪਰ ਜਦੋਂ ਕੀਮਤਾਂ ਵਧਦੀਆਂ ਹਨ ਤਾਂ ਵਧੇਰੇ ਮੁਨਾਫਾ ਕਮਾਉਣ ਤੋਂ ਰੋਕਿਆ ਜਾਂਦਾ ਹੈ | ਇਸਦਾ ਮਤਲਬ ਵੀ ਖੇਤੀ-ਗੁਦਾਮਾਂ ਵਿੱਚ ਥੋੜਾ ਨਿਵੇਸ਼ ਸੀ ਜੋ ਦੂਜੇ ਦੇਸ਼ਾਂ ਵਿੱਚ ਖੇਤੀ ਲਈ ਲਾਜ਼ਮੀ ਹਨ | ਕਿਹੜਾ ਵਪਾਰੀ ਵੱਡੇ ਗੁਦਾਮਾਂ ਵਿੱਚ ਨਿਵੇਸ਼ ਕਰੇਗਾ ਜੇ ਸਰਕਾਰ ਅਚਾਨਕ ਸਟਾਕ ਲਿਮਟ ਲਗਾਉਂਦੀ ਹੈ ਜੋ ਉਸਨੂੰ ਅਪਰਾਧੀ ਬਣਾਉਂਦਾ ਹੈ?  ਇਸ ਐਕਟ ਵਿਚ ਸੋਧ ਕਰਨ ਨਾਲ ਕੀਮਤਾਂ ਵਿਚ ਵਾਧਾ ਹੋਣ ‘ਤੇ ਕਿਸਾਨਾਂ ਨੂੰ ਲਾਭ ਮਿਲੇਗਾ।

ਕੁਝ ਸਿਆਸਤਦਾਨ ਸੋਚਦੇ ਹਨ ਕਿ ਸਰਕਾਰ ਦੁਆਰਾ ਉੱਚ ਕੀਮਤ ਤੇ ਸਾਰੇ ਖੇਤ ਉਤਪਾਦਾਂ ਦੀ ਖਰੀਦ ਹੀ ਹੱਲ ਹੈ | ਹਾਲਾਂਕਿ, ਗਲੋਬਲ ਤਜਰਬਾ ਦਰਸਾਉਂਦਾ ਹੈ ਕਿ ਜੇ ਸਰਕਾਰੀ ਗਾਰੰਟੀਸ਼ੁਦਾ ਮੁੱਲ ਅੰਤਰਰਾਸ਼ਟਰੀ ਪੱਧਰਾਂ ਤੋਂ ਉੱਪਰ ਹੈ ਤਾਂ ਇੱਕ ਗਲੋਟ ਫੁਸਲਾਓ ਹੋਏਗਾ ਜਿਸ ਲਈ ਨਾ ਤਾਂ ਘਰੇਲੂ ਅਤੇ ਨਾ ਹੀ ਵਿਦੇਸ਼ੀ ਮੰਗ ਹੋਵੇਗੀ | ਯੂਰਪੀਅਨ ਯੂਨੀਅਨ ਕੋਲ ਖੇਤੀ ਸਮਰਥਨ ਦੀਆਂ ਉੱਚ ਕੀਮਤਾਂ ਵੇਚੇ ਹੋਏ ਮੀਟ, ਮੱਖਣ ਅਤੇ ਦੁੱਧ ਦੀਆਂ ਝੀਲਾਂ ਦੇ ਪਹਾੜਾਂ ਤੋਂ ਪੈਦਾ ਹੁੰਦੀਆਂ ਹਨ ਜੋ ਕਿ ਆਖਰਕਾਰ  ਸੋਵੀਅਤ ਯੂਨੀਅਨ ਨੂੰ ਇੱਕ ਭਾਰੀ ਘਾਟੇ ਤੇ ਵੇਚਿਆ | ਹੁਣ ਯੂਰਪੀਅਨ ਯੂਨੀਅਨ ਨੇ ਮੁੱਖ ਤੌਰ ‘ਤੇ ਕਿਸਾਨਾਂ ਲਈ ਸਿੱਧੀ ਆਮਦਨੀ ਸਹਾਇਤਾ ਲਈ ਤਬਦੀਲੀ ਲਿਆਈ |

ਤੇਲੰਗਾਨਾ ਦੇ ਰਾਇਥੂ ਬੰਧੂ ਨਾਲ ਭਾਰਤ ਵੀ ਇਸੇ ਦਿਸ਼ਾ ਵੱਲ ਵਧ ਰਿਹਾ ਹੈ ਯੋਜਨਾ (10,000 / ਏਕੜ) ਅਤੇ ਮੋਦੀ ਦੀ ਪੀ.ਐਮ.ਕਿਸ਼ਨ ਯੋਜਨਾ (6,000 ਰੁਪਏ ਪ੍ਰਤੀ ਏਕੜ) | ਓਡੀਸ਼ਾ ਦੀ ਕਾਲੀਆ ਸਰਬੋਤਮ ਹੈ, ਨਕਦ ਟ੍ਰਾਂਸਫਰ ਮੁਹੱਈਆ ਕਰਵਾਉਂਦੀ ਹੈ (ਰੁਪਏ 10,000 / ਏਕੜ) ਸਿਰਫ ਜ਼ਿਮੀਂਦਾਰਾਂ ਨੂੰ ਹੀ ਨਹੀਂ ਕਿਰਾਏਦਾਰਾਂ ਅਤੇ ਹਿੱਸੇਦਾਰਾਂ ਨੂੰ ਵੀ ਅਤੇ  
ਬੇਜ਼ਮੀਨੇ ਘਰਾਂ ਨੂੰ ਪੋਲਟਰੀ, ਬੱਕਰੀ ਪਾਲਣ ਅਤੇ ਸ਼ੁਰੂ ਕਰਨ ਲਈ 12,500 ਰੁਪਏ ਮੱਛੀ ਪਾਲਣ;  ਛੋਟੇ ਅਤੇ ਸੀਮਾਂਤ ਕਿਸਾਨਾਂ ਨੂੰ ਪੰਜ ਸਾਲਾਂ ਦੌਰਾਨ  ਖੇਤੀਬਾੜੀ ਲਈ ਸਮਾਨ ਖਰੀਦਣ ਲਈ 25,000 ਰੁਪਏ ਅਤੇ ਬੀਮਾ ਲਾਭ ਮਿਲਦੇ ਹਨ |

ਸੰਖੇਪ ਵਿੱਚ, ਕਿਸਾਨਾਂ ਨੂੰ ਵੇਚਣ, ਖੇਤੀਬਾੜੀ ਤੋਂ ਬਾਹਰ ਜਾਣ, ਅਤੇ  
ਅੰਤਰਿਮ ਵਿੱਚ ਉੱਚ ਕੀਮਤਾਂ ਦੀ ਬਜਾਏ ਨਕਦ ਸਹਾਇਤਾ , ਹੀ ਸਹੀ ਰਸਤਾ ਹੈ |

*Read the original article [here](https://timesofindia.indiatimes.com/blogs/Swaminomics/farm-laws-to-bring-more-freedom-and-better-prices/).*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## A Case for Decriminalising Sex work in India

Original: https://www.spontaneousorder.in/p/a-case-for-decriminalising-sex-work-in-india

Author: Spontaneous Order

Published: 2020-10-28T11:13:10.000Z

Topics: sex-work, decriminalization, labour-freedom, criminal-justice-reform

> There are over 800,000 sex workers in India. However unofficial figures place these numbers far higher. Sex workers organisations and UN agencies have understood and articulated sex work as a contractual arrangement where sexual services are negotiated ..

**Summary:**

India's Immoral Traffic (Prevention) Act, 1956, permits individual consenting adult sex work but criminalizes brothels, pimping, and solicitation within 200 meters of public places, creating unintended harms for over 800,000 sex workers (with unofficial estimates much higher). This forces solitary operations, increasing risks of abuse and violence at clients' locations, while raids and extortion in red-light areas like Mumbai's Kamathipura and Kolkata's Sonagachi leave workers homeless and harassed, without addressing pimping or trafficking. From a classical-liberal viewpoint, the law paternalistically stigmatizes consensual contractual arrangements, denying sex workers agency to collectively run businesses for safety and profit, and excludes them from policy-making. Decriminalization—rather than legalization, to avoid License Raj-style regulations—would enable fearless operations, reduce stigma, and improve welfare. Evidence from Rhode Island, Greece, and Thailand shows expanded indoor markets lowered rapes and STDs while boosting economic contributions. New Zealand's model prioritizes healthcare without red tape. Urgent decriminalization reforms are needed to uphold freedom in consenting sex trade and protect marginalized workers.

**Key points:**

- India's 1956 Act criminalizes brothels and solicitation, forcing sex workers into risky solitary operations and enabling police extortion in areas like Kamathipura and Sonagachi.
- Decriminalization allows collective sex work businesses for enhanced safety, profits, and reduced violence, treating it like any consensual contract.
- Rhode Island, Greece, and Thailand saw fewer rapes and STDs after expanding indoor sex markets, with workers contributing economically.
- Prefer decriminalization over legalization in India to evade burdensome regulations that could criminalize deviations for marginalized workers.
- Reform inspired by New Zealand would prioritize sex worker healthcare and agency without paternalistic state overreach.

**By Shabnam Sheikh**

* * *

There are over 800,000 sex workers in India. However unofficial figures place these numbers far higher. Sex workers organisations and UN agencies have understood and articulated sex work as a contractual arrangement where sexual services are negotiated between consenting adults. Implicit in this consent is the act of agency; wherein sex work can be a realistic choice to sell sex. In India, sex work and prostitution are regulated by the Immoral Traffic (Prevention) Act, 1956. Even though it’s legal for a consenting adult to offer sex for remuneration, the Act renders maintaining brothels, pimping activities and solicitation of customers illegal. A law that intended to prohibit sex slavery and human trafficking, today is prohibiting the work of sex workers.

There are numerous unintended and unseen consequences of the Act that oppress sex workers in India. Since the Act only permits sex work that takes place “alone” (i.e. not in a brothel), it forces sex workers to often visit the clients’ houses/hotels increasing the risk of abuse and violence. Had there been an option to collectively and mutually run the business of sex work, as any other business, it would not only help the sex workers maximize their profits but also enable them to ensure their own safety in the presence of other sex workers.

The Act further mandates that sex work should not be taken up within the radius of 200 m of any public place or inside the brothels. Since brothels are practically also the homes of sex workers, frequent raids and rent seeking often leaves them homeless and harassed. Moreover, prohibition in this case does not ensure that brothels cease to exist, or that pimping does not take place. This is demonstrated by two of the largest red light areas in India: Kamathipura in Mumbai and Sonagachi in Kolkata. These two red light areas are constituted of numerous brothels and pimps who manage the sex workers. By  virtue of it being illegal, police officers often harass and extort money out of these sex workers. Further, cases of abuse at the hands of pimps are often not reported to the police either.

The differentiation between sex work from all other occupations and businesses further stigmatises the profession and sex workers themselves. The fear of legal consequences makes it difficult for sex workers to carry on their work, even if done voluntarily. Criminalisation often ends up victimising all the stakeholders involved and the state takes up a paternalistic role excluding them from having a say in creating policy decisions that affect their lives. While the law conveniently criminalises the major aspects of the business, the government has done little to improve the working conditions and the safety of sex workers. The law, in a way, delegitimizes consensual transactions between individuals which also affects the independent sex workers in the industry, as it ends up stigmatizing their work too. 

Apart from giving sex workers the freedom to carry out their profession fearlessly, decriminalisation of prostitution and sex work in all forms could significantly contribute to the economy as well. For instance, in Rhode Island,  Greece and Thailand, where indoor sex markets were expanded and prostitution was legalised, it resulted in fewer number of rape offences and sexually transmitted diseases (*S. Rajeshwari (2018). Formalisation of Labour: The Economics of Prostitution in India. PEOPLE: International Journal of Social Sciences, 4(2).288-303)*. Further, the sex workers earned well enough to contribute to the economy. 

However, in India, there might be a stronger case for decriminalization of prostitution rather than legalisation as the latter could result in severe unintended consequences, like messy regulations that involve licensing etc. Multiple industries (including [education](https://www.youtube.com/watch?v=zk9T5mG7i5A)) have been victims of the *License Raj*, and in this case, it would mean that any deviation from the administrative regulation would render an already marginalised sex worker, a criminal. 

Thus, to promote freedom of consenting sex trade and to ensure the safety and welfare of the sex workers, urgent reforms are needed to decriminalise sex work in India. There are enough examples worldwide to get inspired from, like [New Zealand,](https://www.businessinsider.in/law-order/Sex-worker-explains-the-difference-between-legalizing-and-decriminalizing-prostitution/articleshow/47621744.cms) for example, which focuses on the healthcare of the sex workers while also stopping red-tapism.

*Read more: [Big Tech Needs Regulation but Govt Action No Solution](https://spontaneousorder.in/big-tech-needs-regulation-but-govt-action-no-solution/)*

* * *

**About Shabnam Sheikh**

Shabnam Sheikh is a second-year law student at the National Law University, Nagpur. She is passionate about gender equality and women empowerment. She wishes to advocate and work for the rights of the marginalized communities particularly women from such groups. Her research and career interests lie at the nexus of human rights, public policy and constitutional law.

## Big Tech Needs Regulation but Govt Action No Solution

Original: https://www.spontaneousorder.in/p/big-tech-needs-regulation-but-govt-action-no-solution

Author: Spontaneous Order

Published: 2020-10-26T12:11:45.000Z

Topics: big-tech, antitrust, creative-destruction, market-monopolies

> I am among those favouring regulation of the internet giants — Google, Facebook, Amazon, Apple, and Microsoft — because of their humungous control of viewers’ data (raising issues of privacy and national security) and unintended role in spreading fa

**Summary:**

Swaminathan S.A. Aiyar supports regulating internet giants like Google, Facebook, Amazon, Apple, and Microsoft due to their control over user data—raising privacy and national security concerns—and their role in spreading falsehoods and hate speech. However, he criticizes the US government's antitrust prosecution to break up Google, rejecting claims that it is an 'unchallenged gateway' harming advertisers and users, as Google holds only 29% of digital advertising, behind competitors like Facebook and TikTok. From a classical-liberal viewpoint, he argues that these firms offer free services, avoiding traditional monopoly price gouging. Citing Ryan Bourne's Cato Institute paper 'Is This Time Different' and Joseph Schumpeter's 'creative destruction,' Aiyar shows innovation, not government intervention, dismantles monopolies. Historical examples abound: IBM's 13-year antitrust case collapsed amid PCs; A&P, once dominant, fell to Walmart and e-commerce; MySpace (74% social traffic in 2008) was overtaken by Facebook; Nokia (predicted uncatchable in 2007) dropped to 3% by 2013; Kodak lost to digital cameras and smartphones; iTunes (80%+ share) to Spotify; Netscape (90% browsers in 1996) to Chrome; Xerox to rivals like HP. Antitrust efforts often prove farcical and wasteful, as disruptors emerge before cases end. Instead, close tax loopholes and target side-effects like privacy issues, without market-share controls.

**Key points:**

- Internet giants warrant regulation for data privacy, national security, and curbing hate speech/falsehoods, but not antitrust breakups.
- Historical monopolies like IBM, A&P, MySpace, Nokia, Kodak, iTunes, Netscape, and Xerox were toppled by innovation, rendering government antitrust cases unnecessary or farcical.
- Google's 90% search dominance and 29% ad share do not constitute harmful monopoly, as free services preclude price gouging and rivals like TikTok loom.
- Prioritize closing Big Tech tax loopholes and addressing unintended side-effects over controls on market share.

**By Swaminathan SA Aiyer**

* * *

I am among those favouring regulation of the internet giants — Google, Facebook, Amazon, Apple, and Microsoft — because of their humungous control of viewers’ data (raising issues of privacy and national security) and unintended role in spreading falsehoods and hate speech. But I am sceptical of the US government’s move to prosecute and break up Google, claiming advertisers and viewers are harmed by its being “the unchallenged gateway to the internet for billions of users worldwide”.

Google gets only 29% of digital advertising, followed by Facebook, Amazon, Netflix, and new internet stars like TikTok. Google is simply not an “unchallenged gateway”, though it is the dominant search engine. The historical argument against monopoly is price gouging. But the internet giants typically offer free news, entertainment, and knowledge. This can create problems of privacy and hate speech but is the opposite of price gouging.

A brilliant policy paper by Ryan Bourne of the Cato Institute, ‘Is This Time Different’, shows that anti-monopoly cases can end farcically, with the supposed monopoly being ousted by new innovations. Economist Joseph Schumpeter said the “creative destruction” of innovation constantly killed established giants, creating new ones. Innovation, rather than government controls on market share, was the key killer of monopolies.

IBM seemed a classic monopolist in mainframe computers in the 1970s. An anti-trust case against IBM lasted 13 years but then collapsed since the personal computer and laptop killed IBM’s supposed mainframe monopoly. They are in turn threatened by the smartphone.

Is Amazon a retail monopoly? Please recall A&P, the US retail monopolist from the 1910s to 1960s. By creating the chain store, it beat traditional retailers hollow, and had greater market share than its four nearest rivals. Yet A&P was eventually trounced by big-box supermarkets like Walmart, which in turn are now threatened by e-commerce. Once-mighty A&P filed for bankruptcy in 2010.

Facebook is often called a monopolist. But back in 2007, The Guardian had an article titled ‘Will MySpace Ever Lose its Monopoly?’ MySpace had 74% of social network traffic in 2008, and “network effects” supposedly made it impregnable. Facebook disproved that. It too can be decimated by a newcomer with superior technology. When will the rival come? Nobody knows, but as in IBM’s case, new rivals could come long before an anti-monopoly case ends, wasting government and corporate time and money.

In November 2007, Forbes magazine’s cover story on Nokia was ‘One Billion Customers — Can Anyone Catch the Cellphone King?’ This was, of course, written just as Apple and Samsung began their mighty ascent, and Nokia its long descent. Microsoft ultimately bought Nokia in 2013 when its market share was 3%.

Kodak dominated cameras and photo films for decades, and in 1978 was labelled a monopolist by a US jury. This happened just as it was losing market share to Nikon, Olympus, and Fujifilm. The digital camera then decimated all of them, and in turn was decimated by the smartphone.

Apple pioneered iTunes for music download sales and got a market share exceeding 80%. In 2010, the British music magazine NME asked, ‘Who will Break iTunes’ Monopoly?’ The US government began an anti-monopoly inquiry. But iTunes was soon disrupted by streaming services like Spotify and Pandora. Later, consumers got free music from many sites such as YouTube.

In 1996, 90% of internet users had Netscape as their browser. It seemed unstoppable. Yet by 2001 its market share fell to 12%, decimated by Microsoft’s Internet Explorer. Through its Windows system, Microsoft made Internet Explorer the default browser for millions. Harvard Business School Professor Pai-Ling Yin called this unassailable. Yet by 2008 Mozilla began gaining market share, and then all were overtaken by Google’s Chrome.

Xerox was once so dominant in photocopying that the very act was called “Xeroxing”. An anti-trust suit in 1973 led to a costly legal struggle. But then rivals like HP, Canon and Minolta emerged with better, cheaper copiers. Today Xerox is an also-ran.

Yahoo once dominated search engines. Google did not invent the search engine: it was 35th in line. In 1998, Fortune published a piece, ‘How Yahoo won the Search Wars’. As usual, this happened just as Yahoo’s fortunes were declining and Google’s rising. Google today has 90% of the market. Should it be broken up as a monopolist?

History suggests this will be dicey, unnecessary, and maybe farcical.  
This column began by saying that some aspects of the internet giants (including Google) should be regulated. Their tax loopholes should be closed. But the reason is less their monopoly power than unanticipated side-effects such as privacy problems and proliferation of hate speech and falsehoods.

This article was originally published in the [Times of India](https://timesofindia.indiatimes.com/blogs/Swaminomics/big-tech-needs-regulation-but-govt-action-no-solution/) on 25th October 2020.

Read more: [SO Musing: Removal of Statues](https://spontaneousorder.in/so-musing-removal-of-statues/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## SO Basically Episode 15: Contract Farming के फायदे

Original: https://www.spontaneousorder.in/p/so-basically-episode-15-contract-farming

Author: Spontaneous Order

Published: 2020-10-23T21:00:04.000Z

Topics: contract-farming, farm-laws, agricultural-reform, market-liberalization

> In the last episode of SO Basically, we explained how, until recently, farmers did not have the freedom to sell their produce directly to buyers. The recently passed Farm Laws not only give more choice to farmers but also ensure that in a volatile line ..

**Summary:**

This promotional post for Episode 15 of SO Basically explains the benefits of contract farming under India's recently passed Farm Laws, particularly The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020. From a classical-liberal perspective, it argues that farmers previously lacked freedom to sell produce directly to buyers due to restrictive systems. The laws empower farmers with more choices, enabling steady income in the volatile agricultural sector while providing buyers consistent product quality. Crucially, the 2020 Act ensures farmers remain protected in all scenarios. Spontaneous Order frames this as dismantling pseudo-socialist barriers, fostering market freedoms that align with liberal principles historically sidelined in India.

**Key points:**

- Farm Laws remove restrictions preventing farmers from selling produce directly to buyers.
- Contract farming under the 2020 Act provides farmers steady income amid agricultural volatility.
- Buyers gain access to consistent quality products through these agreements.
- The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, safeguards farmers in all scenarios.

**By Spontaneous Order**

* * *

In the last episode of [SO Basically](https://www.youtube.com/playlist?list=PLysF1qZYkiGFX32APX8-p6AeOnev7InjZ), we explained how, until recently, farmers did not have the freedom to sell their produce directly to buyers. The recently passed Farm Laws not only give more choice to farmers but also ensure that in a volatile line of business like agriculture, the farmer can get a steady income. Moreover, buyers can also have access to a consistent quality of products. All of this will happen while ensuring that the farmer remains protected in all scenarios under The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020. How? Watch this video to find out!

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musing: Removal of Statues

Original: https://www.spontaneousorder.in/p/so-musing-removal-of-statues

Author: Spontaneous Order

Published: 2020-10-23T11:03:29.000Z

Topics: cancel-culture, statue-removal, colonial-legacy, indian-history

> These are the times of ‘cancel culture’ which is quite popular among many left-leaning thinkers. The psychological root of this phenomenon is the well-meaning and moral abhorrence against racism and injustice. Although the root is justified, its expre

**Summary:**

The post critiques the post-independence Indian trend of removing statues of British imperial figures as an emotional frenzy akin to modern 'cancel culture,' driven by moral abhorrence against injustice but lacking reason. Quoting Shri A. Ranganathan from Indian Libertarian, it argues that such acts cannot change or distort history, provide no real outlet beyond passions, and fail to foster racial harmony, a longstanding Indian trait—misinterpreting even Gandhi's distinction between the Englishman and his system. Dr. Bhagwan Das, in The Leader, highlights positive Indo-British legacies: relief from pre-Victorian anarchy ('tiger and sheep drink water side by side'), founding of cities like Calcutta, Bombay, Madras, hill stations such as Simla, Ooty, Naini Tal, Mussoorie, Darjeeling; origins of the Congress via A.O. Hume, William Wedderburn, George Yule; humanitarian efforts by missionaries like C.F. Andrews and doctors. While not minimizing foreign rule's evils, the classical-liberal view urges preserving historical symbols to honor complexities rather than erasing them through nationalist fervor, as seen in the 1857 revolt centenary's misuse.

**Key points:**

- Removing statues of British figures cannot alter history or promote racial harmony, per A. Ranganathan.
- British rule brought relief from anarchy, modern cities (Calcutta, Bombay, Madras), hill stations (Simla, Ooty, etc.), and Congress origins via figures like A.O. Hume.
- Humanitarian contributions from missionaries like C.F. Andrews and doctors should be acknowledged alongside colonial evils.

**By Spontaneous Order**

* * *

*These are the times of ‘cancel culture’ which is quite popular among many left-leaning thinkers. The psychological root of this phenomenon is the well-meaning and moral abhorrence against racism and injustice. Although the root is justified, its expression is problematic, because the force behind it is emotion rather than reason. The movement gained momentum a few years ago with demands of taking down ‘Confederate symbols’ and statues of past figures which were considered racist in the USA. It later spread to other countries like the UK, with demands of taking down statues of people like Cecil Rhodes etc.*

*A similar emotional frenzy was prevalent in India in the 1950s when people demanded that all traces of British imperialism be wiped out from public spaces. Shri A. Ranganathan in this piece published in the September issue of Indian Libertarian magazine presents a contrarian take. He writes that the past can’t be changed by removing its symbols, and such an attitude cannot create racial harmony.* 

Since Independence, there is a growing tendency to remove statues in an organized attempt to “wipe out the traces of British Imperialism”. While it cannot be denied that it provides an outlet for the passions and feelings of people, who have not got anything better to do, it must be remembered that such acts can neither change nor distort history. Mahatma Gandhi once said that he had no quarrel with the Englishman in India. but only with his system. But this idea was completely misunderstood by the masses to whom it was explained. There may be a principle involved, in removing a particular statue of a General, whose name is obnoxious to the people. But this attempt to do away with every statue can hardly create racial harmony, which has been the distinguishing trait of India through the ages. The centenary of the great revolt of 1857 was celebrated to satisfy the nationalistic instinct of our people. But it has been interpreted by interested parties as an exhibition of our hatred against the British.

### **Dr. Bhagwan Das’ Views**:

Dr. Bhagwan Das, one of our greatest men, has made a significant contribution on this topic, in an article published recently in The Leader. In the beginning, he gives us an idea of the general state of our people during his father’s generation. It was a sigh of relief, after a period of anarchy. Dr. Bhagwan Das states that when Queen Victoria took over the East India Company, the sentiments of the people were explained in the following lines:- “Queen Victoria reigns now. It is not the Nawab today. The tiger and sheep drink water side by side.” Apart from this feeling of relief, the period of lndo-British contact was not a dismal one. As Dr. Blwgwan Das points out, we owe to the British, the cities of Calcutta, Bombay, Madras and the lovely hill stations of Simla, Ooty, Naini Tal, Mussorie and Darjeeling. The beginnings of the Congress movement can be traced in the dedicated works of A.O. Hume, Sir William Wedderburn, Sir George Yule and a host of others, some well known and others not so well known. Who can forget the humanitarian work of missionaries like C. F. Andrews and the efforts of thousands of doctors providing relief to the needy? This does not mean that Dr. Bhagwan Das, or for that matter anyone, is trying to minimise the evils of foreign rule. which no self-respecting people will tolerate.

To read the full article, visit page number 15 on this [link](http://indianliberals.in/~_admin/pdflanguage?id=71184343.pdf).

*[IndianLiberals.in](http://IndianLiberals.in) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

*Read more: [SO Musings: Liberty And Limited Government](https://spontaneousorder.in/so-musings-liberty-and-limited-government/)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Land-Use Change for Harnessing Solar Energy in India: Too good to be true?

Original: https://www.spontaneousorder.in/p/land-use-change-for-harnessing-solar-energy-in-india-too-good-to-be-true

Author: Spontaneous Order

Published: 2020-10-22T11:42:29.000Z

Topics: solar-energy, land-use-change, social-impact-assessment, rural-livelihoods

> Despite the sun being a renewable source of energy, several state governments in India face problems of land possession and acquisition for construction of Ultra Mega Solar Power Parks. This happens because the livelihood of 70% of rural households in I..

**Summary:**

While solar parks promise renewable energy benefits like low carbon footprints and job creation, India's state policies, such as Karnataka's Solar Policy 2014-21, enable rapid conversion of agricultural land without pollution clearances or formal approvals, overlooking profound local harms. With 70% of rural households dependent on agriculture, projects like the 2000 MW Pavagada solar park in Tumkur district lease land from 3000 owners at 21,000 rupees per acre annually (plus 2% increment every two years) for 28 years, locking assets and illiquidating them. This exacerbates injustices for landless laborers, dairy farmers losing grazing land, families without toilets relying on fields, and disrupts biodiversity near Ramagiri West forest. Construction pits hinder future agricultural viability, and panel cleaning demands 7 crore liters of water fortnightly, depleting fluoride-laden groundwater. Citing studies on procedural and distributional injustices, the author critiques the 'win-win' narrative, noting unaddressed social unrest risks for marginalized communities. A classical-liberal lens highlights how top-down policies burden the poor without equitable outcomes or exit clauses. Compulsory Social Impact Assessments are essential, alongside strategies for panel waste disposal post-lease, to balance renewable ambitions with local livelihoods.

**Key points:**

- Karnataka's Solar Policy 2014-21 waives clearances for converting agricultural land to solar parks, prioritizing speed over local impact evaluation.
- Pavagada's 2000 MW solar park leases 3000 farmers' land for 28 years at 21,000 Rs/acre/year but harms landless workers, grazing, sanitation, biodiversity, and groundwater with 7 crore liters water use fortnightly.
- Land-use changes cause procedural injustices like excluding marginalized voices and distributional inequities, risking social unrest as per Yenneti et al. studies.
- Government must mandate Social Impact Assessments for solar projects and plan waste disposal for decommissioned panels to protect rural poor.

**By Tarul Jain**

* * *

Despite the sun being a renewable source of energy, several state governments in India face problems of land possession and acquisition for construction of Ultra Mega Solar Power Parks. This happens because the livelihood of 70% of rural households in India is dependent on agriculture ([Balasubrimanian 2017](https://www.slideshare.net/bala1957/landuse-in-india)). Solar parks require huge parcels of land for construction, but the population’s massive dependence on land acts as a barrier. Land-use change for such a cause can have unexpected ramifications such as loss of livelihood and income, which is not addressed as much as it should be.

In order to harness the potential of solar resources in Karnataka, the Government of Karnataka had introduced the solar policy, 2011-2016, later revised in 2014, which is now known as [the Karnataka Solar Policy, 2014-21](https://www.kredlinfo.in/solargrid/Solar%20Policy%202014-2021.pdf). According to one of the policy initiatives, there is no requirement of pollution control clearance and formal approval to convert agricultural land into solar parks. Once the land is acquired/leased in, the work can get started without any formal obligations.

Any land-use change for construction of renewable energy projects, including solar parks, is perceived to be a ‘win-win’ for all, because solar parks with low carbon coalition and low carbon footprint add to international goods. Besides, they are beneficial for economic development as they use renewable energy instead of an exhaustible natural resource. It helps cut the cost of exploration and exploitation of inexhaustible resources like coal ([Gonzalez et. al 2016](https://ideas.repec.org/a/gam/jsusta/v8y2016i11p1171-d82745.html)). Maintenance of solar parks requires workers which in turn increases the occupational opportunities for people residing in the vicinity of such parks ([Rio and Burguillo 2009](https://www.sciencedirect.com/science/article/abs/pii/S1364032108001044)). 

Despite the perceived optimism, the various studies praising solar parks forget to emphasize local and regional impacts of such a land-use change. Even the environmentally sound projects can put the local communities in distress if not planned strategically, something which the Karnataka Solar Policy has not taken into consideration. [Yenneti and Day (2016)](https://www.sciencedirect.com/science/article/abs/pii/S0743016716300791) indicate that if the outcomes of such projects are not distributed equally, it can lead to distributional injustices in society. Procedural injustices like lack of complete information and neglecting the marginalized communities in decision making can lead to social unrest later ([Yenneti and Day 2015](https://www.researchgate.net/publication/283757336_Procedural_injustice_in_the_implementation_of_solar_energy_The_case_of_Charanaka_solar_park_Gujarat_India)). Sometimes in the process of land-use change, the village common lands are also acquired, which can affect the livelihood of grazing communities. Such spatial injustices are left unaddressed in most cases ([Yenneti et al. 2016](https://www.sciencedirect.com/science/article/abs/pii/S0016718515303249)).

One such example of a land-use change from agriculture to solar park has occurred in the Pavagada taluk of Tumkur district in Karnataka in the year 2016. The 2000 MW capacity of the solar park is constructed on leased land in denominations of 50 MW each. Almost 3000 landowners have leased out their land for 28 years. Every year, a compensation of 21,000 Rupees per acre of land is provided to them, along with an increment of 2% every two years. As stated in the lease agreement provided to the landowners, the solar park will be decommissioned after 25 years and 3 more years will be utilized to bring the land back for agriculture viability.

The Karnataka government, under the Karnataka Solar Policy, 2014-21, in coordination with the revenue department, has created private land bank accounts for the landowners. Operational for a period of 30 years, these accounts are used for transferring the lease amount. 

Nevertheless, Rajendran in “*[Emergence of the Largest Solar Power Plant in Karnataka–A Microscopic Analysis](http://www.nanoient.org/upload/word/ENT191351_1555926597.pdf)“* discusses how this policy has not addressed the existence and impact of land-use change on the landless labourers and other stakeholders residing in the vicinity of the solar park. Also, little is being discussed about the lack of any exit clause. The land leased out by the farmers cannot be made liquid for the next 28 years. Even families with a land dispute have engaged their lands in this project. Dairy farmers have been facing the problem of shrinking land for their cattle to graze on.

This paper also discusses how families who don’t have toilet facilities in their respective homes are facing problems because they were dependent upon these fields. Highlighting the ecological impact of land use change, [Rajendran (2019)](http://www.nanoient.org/upload/word/ENT191351_1555926597.pdf) mentions three important findings.

Firstly, it points out how 3 meters deep pits are dug at intervals to install iron rods for fixing panels which will create problems in making the land sustainable and viable for agricultural purposes. Further, construction has severely hampered biodiversity. Migration of several animals is expected to be disrupted due to such a large scale project. The livelihood and ecosystem in the nearby reserve forest- Ramagiri West forest range (2 Km from Pavagada) will also get affected. Lastly, the already exploited groundwater is being used for the purpose of cleaning the panels, thereby increasing its fluoride content. According to the [Environment Impact Assessment (2016)](http://www.kspdcl.in/sp_docs/Environment%20Assesment%20impact%20report%20Feb-16.pdf), conducted by a private organization- Knight Frank, 7 Crore liters of water is needed to wash the solar park once in a fortnight, which will further exploit the groundwater in Pavagada.

It appears that the Government of Karnataka has failed to look beyond the obvious benefits of the solar park. The aforementioned studies emphasize the point that “environmentally good” projects have the potential to create social and economic unrest in the local area and livelihoods. It becomes important to consider the local and regional effects of the land-use change from agriculture to any large-scale project. A compulsory Social Impact Assessment of solar projects is a vital step to ensure that the poor and marginalized sections of the society are not always the burden-bearers.

In 2006, the Ministry of New and Renewable Energy had removed the requirement of Environment Impact Assessments of Renewable Energy Projects ([EIA 2006](http://www.environmentwb.gov.in/pdf/EIA%20Notification,%202006.pdf)). However, because of the difficult disposal of the solar Photovoltaic cells, they revised this in 2017 and mandated EIAs for any upcoming solar projects. This indeed is a positive step towards unpacking the assumption of no negative environmental impact of solar parks. Unfortunately, the revised rule does not apply to existing solar parks like the Pavagada solar park. The need of the hour is to strategize waste disposal mechanisms for large solar panels, like the ones in Pavagada, which will be removed after 28 years. Voluntary land leasing/selling for compensation, along with the aforementioned economic benefits accruing from solar parks, makes it a proposition that is “too good be true”‘. A lot is at stake in such a project, including livelihoods of local people who are dependent on the land since generations. The social, economic and environmental impact of land-use change for construction of any large-scale project, including renewable energy projects, is too massive to be ever ignored.

Read more: [Service Sector, Metros Dampen Growth Rebound](https://spontaneousorder.in/service-sector-metros-dampen-growth-rebound/)

* * *

**About Tarul Jain**

After completing my Bachelor's in Economics from Kamala Nehru College, I have recently graduated from TERI School of Advanced Studies, New Delhi with a Masters degree in Economics with specialization in Natural Resource and Environmental Economics. In partial fulfilment of the course, I wrote a dissertation after conducting year-long research (primary and secondary) regarding the Pavagada Solar Park in Karnataka. My interest in data-driven research and issues related to development further motivated me to find work in a similar domain. I am currently working as the Monitoring and Evaluation Coordinator at Development Solutions, which is a research and consulting organization in Delhi. I am also working on extending my research related to the Pavagada solar park in the near future. I hope to continue working with an everlasting zeal to contribute my bit in the development sector through my research.

## Spontaneous Dialogue Ep 1: From Annadata to Farmpreneur – Do farm laws benefit farmers?

Original: https://www.spontaneousorder.in/p/spontaneous-dialogue-ep-1-from-annadata-to-farmpreneur-do-farm-laws-benefit-farmers

Author: Spontaneous Order

Published: 2020-10-20T12:56:00.000Z

Topics: farm-laws, agricultural-reforms, agri-liberalisation

> As the debate around the current agri-reforms refuses to settle, it’s imperative to take a deep dive into these reforms and try to understand how exactly they will benefit the farmer. Why are some farmers opposing these reforms, what are the gaps, if an

**Summary:**

This post is a promotional announcement for the first episode of the Spontaneous Dialogue podcast, titled 'From Annadata to Farmpreneur – Do farm laws benefit farmers?', featuring Dr Parth J Shah (President, CCS) and Dr Jayaprakash Narayan (Founder, Foundation for Democratic Reforms). It teases a classical-liberal discussion on the benefits of India's agri-reforms for farmers, reasons for opposition, gaps in the reforms, and further steps needed to liberalise agriculture, without providing the episode's content or detailed arguments.

**Key points:**

- The podcast episode examines how farm laws aim to transform farmers from 'Annadata' (food providers) to 'Farmpreneurs' through market-oriented reforms.

**By Spontaneous Order**

* * *

As the debate around the current agri-reforms refuses to settle, it’s imperative to take a deep dive into these reforms and try to understand how exactly they will benefit the farmer. Why are some farmers opposing these reforms, what are the gaps, if any; and how much further are we yet to go in terms of liberalising agriculture?

In this episode of Spontaneous Dialogue with Dr Parth J Shah, President, CCS and Dr Jayaprakash Narayan, Founder, Foundation for Democratic Reforms, where we uncover answers to these questions, and many more.

Listen now:

To listen to all other episodes of the Spontaneous Dialogue Podcast on your favourite platforms, click [here](https://anchor.fm/spontaneousdialogue).

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Service Sector, Metros Dampen Growth Rebound

Original: https://www.spontaneousorder.in/p/service-sector-metros-dampen-growth-rebound

Author: Spontaneous Order

Published: 2020-10-19T16:41:51.000Z

Topics: covid-recovery, services-sector, industry-growth, fiscal-stimulus

> The worst is over. Covid infections and deaths seem to have peaked, though it remains to be seen if India escapes the resurgence of the virus seen in many countries as winter approaches. India’s lockdowns are being eased and some economic sectors are re

**Summary:**

India's economy shows signs of rebounding from Covid lockdowns, with industry booming—PMI hitting an eight-year high of 56.8 in September, power demand up 16%, e-way bills rising 10%, and rail freight up 19%—while agriculture thrives after a good monsoon, with record kharif sowing of 108.22 million hectares and rural wages growing 4.1-9.2% in May. Exports rose 5.7% but imports fell, signaling weak domestic demand. However, services, comprising 55% of GDP, remain in contraction with PMI at 49.8, decimated by lockdowns on travel, tourism, trade, and entertainment. Google mobility is 27% below pre-Covid levels, improving from worse earlier but still slow, especially in metros like Mumbai, Pune, and Chennai where it's half normal due to high density and infection fears. Less urbanized states like Bihar and Uttar Pradesh show better mobility gains. Despite a milder GDP contraction than the predicted 15% (likely under 10% from a low base), services and metros will drag growth through 2021, with recovery to pre-Covid levels only by 2022. This bolsters the case for further fiscal stimulus and lockdown easing to unleash market recovery.

**Key points:**

- Industry PMI reached 56.8 in September, signaling strong expansion post-lockdown.
- Agriculture benefits from record sowing and rising rural wages, countering urban migrant influx.
- Services sector PMI at 49.8 indicates ongoing contraction, pulling down overall GDP.
- Metro cities like Mumbai and Chennai show mobility at half pre-Covid levels, worst laggards.
- Advocate additional fiscal stimulus and full lockdown easing for faster recovery.

**By Swaminathan SA Aiyer**

* * *

The worst is over. Covid infections and deaths seem to have peaked, though it remains to be seen if India escapes the resurgence of the virus seen in many countries as winter approaches. India’s lockdowns are being eased and some economic sectors are rebounding. Industry is booming again, and agriculture is doing well after a good monsoon. Some indicators show double-digit growth — power demand is up 16%, e-way bills (electronic permits for goods transport) rose 10% in September, and rail freight improved by 19% in the last ten days of September.

Pessimists like Goldman Sachs had predicted that India’s GDP growth would fall by almost 15% in 2020-21. The latest indicators suggest the fall may be less than 10%, aided by a low base level last year. That is still a disaster, though much milder than pessimists expected. The economic laggards are services and the big metro cities, which will pull down growth for a long time.

The Purchasing Managers Index (PMI) for industry, a quick indicator of industrial demand, hit an eight-year high of 56.8 in September, up from 52 in August (any figure above 50 signifies expansion and any figure below 50 signifies contraction). In the April-June quarter, the Covid lockdown sent the PMI for industry crashing to just 35.1. The lifting of the lockdown has helped industry spurt. However, not all of this reflects higher sales: some reflect higher inventories with dealers. Consumers are still wary of spending as usual until the virus abates, salary and wage cuts are reversed, and employment rises again. After six months of decline, exports rose by 5.7% in September, a welcome sign. But imports fell sharply, indicating deficient domestic demand.

A good monsoon encouraged farmers to sow a record 108.22 million hectares this kharif season. The expected bumper crop should dampen food inflation. The copious rain that boosted food grains was excessive for some vegetables, whose prices rose sharply. Rabi prospects are excellent since irrigation reservoirs are full and the monsoon has left plenty of soil moisture. Tractor sales had fallen during the lockdown in April and May, but in subsequent months grew by 22.5%, 37.2%, 27.8% and 28.4%.

Rural wage data come with a lag. No data could be collected in April because of the lockdown, but wage data for May indicate a welcome spurt of 4.1% for agricultural occupations and 9.2% for non-agricultural operations. In the pre-Covid period, wage growth in March was lower at 3.5% for agricultural operations and 4.4% for non-agricultural operations. So, the lockdown’s forced return of city migrants to villages did not, happily, create a “reserve army” of rural workers and bring down wages.

However, industry and agriculture together contribute less than half of GDP in a normal year. The Economic Survey estimates the share of services in GDP at 55% in 2019-20. The share will fall dramatically this year because the lockdown decimated all passenger traffic, tourism, real estate, financing, trade, entertainment, and shopping. In April, the services PMI fell to just 5, a figure unthinkable earlier. It recovered to 49.8 in September, which still means slight contraction compared with a year ago.

Even if the government lifts all curbs, people will still be afraid to travel, shop, go to theatres or do anything that might infect them. So, services will pull down the economy until fear of the virus finally abates. That may not happen till 2022 even if a vaccine becomes available in 2021.

The Google mobility index, the most quickly available indicator of human activity, is still 27% below the pre-Covid level. This is, however, an improvement on declines of 41% in April-May and 34% between mid-May and July. It is still tragically slow.

The greatest laggards are the big metro cities — Delhi, Mumbai, Kolkata, Pune, Bengaluru, Hyderabad, and Chennai. These cities are densely populated, have relatively high rates of infection, and have suffered steep falls in mobility because public transport has either been curbed or avoided for fear of Covid. Mobility in Mumbai, Pune and Chennai is still just half the normal level.

Among the states, the biggest improvement in mobility has been in Bihar, most of Uttar Pradesh, and the hill states of the north-west and north-east, which are among the least urbanised. Delhi, Maharashtra, and Karnataka are among the laggards. For no obvious reason, Chhattisgarh is also a major laggard.

In sum, despite buoyant industry and agriculture, services and the metros will drag the economy down for the rest of 2020 and most of 2021. Only in 2022 is GDP likely to recover to the pre-Covid level. That bolsters the argument for another fiscal stimulus and further easing of lockdowns.

This piece was originally published in the [Times of India](https://timesofindia.indiatimes.com/blogs/Swaminomics/service-sector-metros-dampen-growth-rebound/) on October 11th.

Read more: [SO Musings: Liberty And Limited Government](https://spontaneousorder.in/so-musings-liberty-and-limited-government/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## SO Musings: Liberty And Limited Government

Original: https://www.spontaneousorder.in/p/so-musings-liberty-and-limited-government

Author: Spontaneous Order

Published: 2020-10-16T13:51:23.000Z

Topics: limited-government, individual-liberty, free-economy, socialism-critique

> India is a constitutional democracy. The basis of constitutionalism is a government limited in its scope and exercise of powers by limits put up by the constitution. Such a government doesn’t have the power to encroach upon the private domain of citizen

**Summary:**

India's constitutional democracy requires a limited government constrained by constitutional limits to protect individual liberty, but the government has expanded, causing inefficiency and corruption. Shri M. A. Venkata Rao, in his September 1957 Indian Libertarian column, advocates limited government as the solution, emphasizing that a free society rests on a free economy, echoing later thinkers like Sharad Joshi and Ronald Reagan who declared government itself the problem. Venkata Rao discusses C. Rajagopalachari's (C.R.) forthright criticism of governance and call for a Rightist conservative opposition party to balance democracy, noting barriers like dependence on government favors. He critiques C.R.'s definition of Leftism—demands for state-driven welfare and equality—as superficial; its essence is the state's absorption of economic power through nationalization of production, as in socialism and communism. This erodes liberty and democracy's economic basis, making bold opposition impossible when livelihoods depend on the governing group. Social democrats' faith in liberty under socialism ignores human psychology, as centralized control stifles dissent even in democratic states.

**Key points:**

- India's expanded government breeds inefficiency and corruption; limited government protects individual liberty.
- A free society requires a free economy, as government expansion undermines both.
- C. Rajagopalachari calls for a Rightist conservative opposition party to balance democracy amid hypnotic fear and dependence on government favors.
- Leftism's core is state nationalization of production, removing democracy's economic basis and enabling control over livelihoods.
- Socialism, even in democratic forms, leads to loss of liberty by centralizing economic power.

**By Spontaneous Order**

* * *

*India is a constitutional democracy. The basis of constitutionalism is a government limited in its scope and exercise of powers by limits put up by the constitution. Such a government doesn’t have the power to encroach upon the private domain of citizens and therefore constitutionalism acts as a bulwark that protects individual liberty. However, with time the government in India has got only bigger and brought with itself myriad problems like inefficiency and corruption.*

*Shri M. A. Venkata Rao in his column in the September 1957 issue of **Indian Libertarian** magazine writes that the solution to these problems of a big government is a limited government which fosters individual liberty. He opines that a free society rests on a free economy and one cannot exist without the other. His thoughts are in line with later thinkers like Sharad Joshi and Ronald Reagan who boldly put forward the idea that government is not the solution to the problem, it itself is the problem.*

Sri C Rajagopalachari is becoming more and more explicit in his utterance on current public affairs, particularly on the governance of  the county and more forthright in his criticism of it. It is intriguing why he did not exert his influence, while in office, to check the adoption of the wrong policies he now castigates. He has stated clearly, in a recent address in Madras that “although there is to-day abundant material for a powerful opposition, hypnotic fear and the pressure of individual interests operate to prevent the gathering together of the forces.” He places his finger on the crucial point when he goes on to say:” Day-today life cannot be carried on without appeal for favours of all kinds from the government in power, and any effort in the direction of forming an Opposition party must involve sacrifice and considerable risk on the part of those who would make such a venture … men of experience are inclined to political caution in the personal sense.”

### **Unscientific Definition**

This was the experience of all Opposition candidates during the last General Elections. What then is the remedy? Sri. C. Rajagopalachari is right in calling for a Rightist conservative party to form the Opposition so necessary for the balanced working of democracy. He gives a working definition of Leftism so as to clarify what he means by Rightist. But this definition is unscientific, and does not indicate the essence of Leftism. “The Left” he says “consists of people who demand changes in order to bring about a· speedy advance in the welfare of the people, and more, even distribution of it among all sections”. Welfare and equality to be brought about by State action is no doubt an essential part of Leftism but they are its outward marks, not its differentia. The real differentia of Leftism is the absorption of all economic power by the State (which is the repository of political power) through the nationalisation of centralisation of all capital or means of production. Socialism and communism of the Marxist kind (which is the only kind dominant today in the world) creating the basic problems of the cold war in international relations, and loss or attrition of liberty in internal affairs, even in professedly democratic states, are committed to the socialisation of capital. Such socialisation removes the economic basis of democracy. The hope and faith of social democrats, that liberty or democracy can be safe under a socialist regime, are short-sighted and contrary to human psychology. When all means of livelihood come to depend on the governing group, no man can, as C. R. points out, form an opposition and express himself boldly. “the Centre becomes an agency for dealing with every tankbund, school, hospital and social service club.” 

To read the full article, visit page number 5 on this [link.](http://www.indianliberals.in/~_admin/pdflanguage?id=793830834.pdf)

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

*Read more: [Swatantra Party: A Big Tent Challenge to Congress Hegemony](https://spontaneousorder.in/swatantra-party-a-big-tent-challenge-to-congress-hegemony/)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Swatantra Party: A Big Tent Challenge to Congress Hegemony

Original: https://www.spontaneousorder.in/p/swatantra-party-a-big-tent-challenge-to-congress-hegemony

Author: Spontaneous Order

Published: 2020-10-14T17:30:20.000Z

Topics: swatantra-party, classical-liberalism, political-coalitions, indian-conservatism

> recent writings have brought more nuance to the debate about economic and even foreign policy elements of the Swatantra vision. However, what has been absent in the current discourse about the Swatantra is its interest/identity aggregation function.

**Summary:**

Recent discourse on the Swatantra Party revival emphasizes its economic liberalism and vindicated policies against Nehruvian socialism, but overlooks its core function as a big-tent secular-conservative coalition challenging Congress's one-party dominance and radical left economic drift. Formed in response to the Nagpur Congress resolution fearing Soviet-style collectivization, it united disparate groups: business class, middle peasants, conservative ex-Congressmen, princely rulers, free-market liberals, and cultural conservatives. Core leaders embodied three streams—village conservatism (Rajaji, Ranga), cultural nationalism (Munshi), and industrial capitalism (Mody)—under intellectual guidance from classical liberal Minoo Masani, who advocated individualism, free markets, limited state, and cited Hayek and Friedman. Rajaji blended Gandhian traditionalism with anti-statism, defending social institutions like jati and joint family; Munshi pushed Hindu cultural revival and strong national identity; Masani represented unambiguous modernism. Despite ideological diversity and provincial interest tensions, Swatantra allied with Jan Sangh against statist left hegemony. From a classical-liberal view, its lesson endures: market liberals must build broad coalitions with traditionalists and conservatives to contest single-party ideological and electoral dominance in today's India.

**Key points:**

- Swatantra Party aggregated business, peasants, aristocrats, and conservatives into a broad anti-Congress coalition triggered by fears of farm collectivization.
- Core leaders Rajaji, Masani, Ranga, Munshi, and Mody represented village conservatism, classical liberalism, cultural nationalism, and industrial capitalism.
- The party allied with Jan Sangh and others to challenge Nehruvian socialism's one-party grip.
- Classical liberals like Masani strategically allied with traditionalists to fight statist hegemony, offering a model for contemporary coalition-building against single-party dominance.

**By Sanjeet Kashyap**

* * *

The [recent](https://theprint.in/opinion/when-maharajas-business-tycoons-and-peasant-leaders-joined-the-mundu-clad-rajaji-to-form-the-swatantra-party/33246/) [revival](https://spontaneousorder.in/why-we-need-a-swatantra-party-in-present-day-india/) of the Swatantra Party in the [public](https://theprint.in/opinion/60-years-ago-a-right-liberal-swatantra-party-had-challenged-nehrus-socialist-raj/246715/) [discourse](https://www.livemint.com/opinion/columns/opinion-the-contemporary-relevance-of-swatantra-party-s-liberal-view-1559032923329.html) has mostly been focused on its [economic](https://magazine.outlookindia.com/story/a-case-for-swatantra/291551) [liberalism](https://spontaneousorder.in/rajaji-relevance-to-todays-politics-of-the-right/) [agenda](https://twitter.com/ShashiTharoor/status/1135875167542865923?s=20). The underlying driving factor, of course, is the Indian market liberals’ search for the [Indian roots](http://indianliberals.in) of liberalism. Also reflected in the Indian neoliberal writings on the Swatantra is a wishful tendency to see a [viable political home](https://www.youtube.com/watch?v=nvGTl2JCNFo&t=4s&ab_channel=CentreforCivilSociety) in the Swatantra party, if only it had managed to survive the Indira onslaught in the early 1970s. Of course, the Swatantra’s economic and foreign policy positions have been [vindicated](https://books.google.co.in/books?id=Kkyom-cQNecC&lpg=PA446&vq=swatantra%20party&pg=PA436#v=snippet&q=swatantra%20party&f=false/) and in that sense, the party could claim victory, if only posthumously. Also, in contrast to the earlier [dismissive attitude](https://theprint.in/opinion/when-maharajas-business-tycoons-and-peasant-leaders-joined-the-mundu-clad-rajaji-to-form-the-swatantra-party/33246/) towards the Swatantra policy as a mere pro-business agenda, recent writings have brought more nuance to the debate about [economic](https://spontaneousorder.in/not-a-rich-peoples-lobby/) and even [foreign policy](https://theprint.in/opinion/swatantra-party-had-a-lot-to-say-on-china-after-1962-if-only-nehru-had-heard-them/465578/) elements of the Swatantra vision. However, what has been absent in the current discourse about the Swatantra is its interest/identity aggregation function.

It is true that under the intellectual leadership of Minoo Masani, the party espoused a classic liberal agenda. But it also operated as a broad tent secular, conservative coalition of social groups. These groups included the business class, middle peasants and proprietors, conservative ex-Congressmen, former administrators, princely rulers, free-market liberals, and cultural conservatives. What enabled this coalition of disparate groups was the Nehruvian Congress’ grip over political power which effectively turned India into one-party democracy and a radical left drift in economic policy. Minoo Masani was arduously trying to stitch together a political platform to challenge Nehruvian socialism for some time. The immediate trigger was provided by the Nagpur Congress resolution which stoked the fears of Soviet-style farm collectivization. The disparate dissidents this time hobbled together and the Swatantra was born.

As Howard Erdman argued, the core inner group of the Swatantra leaders [reflected](https://archive.org/stream/swatantrapartyin00erdm/swatantrapartyin00erdm_djvu.txt) three ideological streams- self-sufficient village conservatism, cultural nationalism, and industrial capitalism. This core group consisted of Rajaji, Minoo Masani, N G Ranga, K M Munshi, and a less active Homi Mody. Rajaji was a veteran Gandhi disciple turned dissident Congressman who had earlier served as the Chief Minister of Madras and the Home Minister of India. Ranga was an Oxford-educated Andhra peasant leader with a rather proficient party-hopping tendency. Educated at the London School of Economics, Masani participated in the Indian nationalist movement and founded the Congress Socialist Party only to be disillusioned with the left politics.

Munshi was a freedom fighter, leading cultural nationalist, an architect of the Indian constitution, and an entrepreneurial revivalist of Hindu civilizational heritage reflected notably in the Bharatiya Vidya Bhavan initiative. Homi Mody was a leading voice of the Bombay business community with significant experience of local self-governance in the Bombay municipality. Notables among the aristocrats included Maharani Gayatri Devi, Raja Kamakhya Narain Singh of Ramgarh who controlled a significant vote bank in the tribal Bihar, and Maharaja of Kalahandi whose Ganatantra Parishad [imitated](https://archive.org/stream/swatantrapartyin00erdm/swatantrapartyin00erdm_djvu.txt) Tory democrats.

Rajaji is regarded as a leading Indian conservative figure and rightly so. In his writings, the Gandhian skepticism towards the destabilizing and degrading impact of the industrial urban landscape is often reflected. His defense of social stability against creative destruction brought by industrial capitalism made him a traditionalist seeking to unwittingly preserve the caste system. The charge was made explicitly against him when he sought to introduce a hereditary skill-based training program in Madras’ schools. However, it is my sense that as Rajaji turned to the political battleground with an anti-statist agenda, his writings reflected [a classic liberal turn](https://archive.org/stream/swatantrapartyin00erdm/swatantrapartyin00erdm_djvu.txt) that favored individualism and market forces. The anti-industrial attitude though was also shared by Ranga who was opposed to large-scale factories for its impact on artisans. With his rather unusual form of leftist populism, Ranga stood for peasant proprietorship against both feudal landlordism and state collectivization of farms.

Mody, in sharp contrast, was one of the most influential voices of the business community and had been proactive in negotiations from the side of the community. His closeness to the business establishment probably led to his appointment as the party treasurer. Masani by then had adopted a classical liberal worldview with all its emphasis on individualism, free market, strong civil society, and a limited state. In terms of economic policy, he was critical of Nehru’s statism and advocated economic freedom for farmers, industrialists, and consumers. He would cite the likes of Milton Friedman and Friedrich Hayek in his writings. Moreover, in the Indian context, he was close to the economist B R Shenoy and would receive his advice on economic matters.

In cultural terms, Rajaji again was a conservative sans communal leaning, rooted in the Hindu civilizational worldview. Biographer Rajmohan Gandhi [dubbed](https://books.google.co.in/books/about/Rajaji.html?id=JjPHeRd7_UYC&redir_esc=y) him ‘as unabashed a Hindu as a defender of Muslim rights’. Apart from authoring a very popular telling of the Hindu epic Mahabharata, Rajaji also talked about the spiritualization of politics. In his view of progress driven by the restoration of culture and spirituality, Rajaji came closer to Munshi. Social institutions like *jati*, joint family, and village were seen by him as the pillars of Indian society serving the function of a welfare state of sorts. Rajaji’s spiritualized Hinduism though was no bar to progress and modernization. In many of his actions and speech-act, as Erdman [noted](https://archive.org/stream/swatantrapartyin00erdm/swatantrapartyin00erdm_djvu.txt), Rajaji reflected a Burkean acceptance of gradual progress. Munshi shared Rajaji’s belief in the relevance of Hindu cultural values but the similarity also went with differences. He certainly held more strong views on territorial nationalism than Rajaji and favored a strong centralized state. It is plausible that his views stemmed from the prevalent context of communal mobilization and partition-induced violence. For the same reason, he also wanted to ban religious outfits’ involvement in politics. Like many right-wing nationalists of today, Munshi deplored ‘minorityism’ and linguistic assertions. In contrast to the ‘unity in diversity’ vision of Indian nationalism, he preferred a strong sense of Indian national identity overriding other forms of identity. Moreover, his concern for Hindu unity led him to advocate social reforms and deplore the orthodoxy which defended the caste order. 

In sharp contrast to Rajaji and Munshi, [Masani](https://theprint.in/opinion/no-accident-india-forgot-swatantra-leader-my-father-minoo-masani-the-beef-eating-parsi/250483/) was a secular, westernized, and modern Parsi. Reflective of Masani’s credential was the [remark](https://archive.org/stream/swatantrapartyin00erdm/swatantrapartyin00erdm_djvu.txt) by political scientist Morris-Jones that no person prominent in Indian public life today is more unambiguously modernist than Masani.    

The discussion above captures the ideological diversity of the core Swatantra leadership in economic and cultural domains. However, not only did the Swatantra harbor a range of ideological positions, but it also had to deal with contending interest groups across provinces. Thus, the classic liberal, free-market agenda was part of a broad secular and conservative platform. Given the formidable political opposition from a statist left, it only made sense for market liberals like Masani to ally with traditionalists and democratic aristocrats. In fact, the fight against Congress hegemony led the Swatantra to enter into a grand alliance with the Jan Sangh and others. In the current context, the Swatantra lesson on coalition building to fight the ideological and electoral hegemony of a single party should be clear for political actors in India.

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

*Read more: [SO Musings: Bread and Circuses – The Welfare State](https://spontaneousorder.in/so-musings-bread-and-circuses-the-welfare-state/)*

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## SO Basically Episode 14: जा Farmer जा: Jee Le Apni Zindagi!

Original: https://www.spontaneousorder.in/p/so-basically-episode-14-farmer-jee-le-apni-zindagi

Author: Spontaneous Order

Published: 2020-10-13T21:00:59.000Z

Topics: farm-laws-2020, agricultural-reform, market-freedom, economic-liberalism

> DDLJ fans will relate to the plight of the farmers in our country. For decades, our farmers could only sell their produce in government mandis, similar to how Simran was being forced to marry Kuljeet. In this episode of SO Basically, we’ll explain how t

**Summary:**

In Episode 14 of SO Basically, titled 'जा Farmer जा: Jee Le Apni Zindagi!', Spontaneous Order draws a DDLJ analogy to illustrate the plight of Indian farmers, who for decades were compelled to sell produce exclusively in government mandis, akin to Simran's forced marriage to Kuljeet under Bauji's control. The episode highlights the Farmers Produce Trade and Commerce (Promotion and Facilitation) Act 2020 as a liberating reform that unshackles farmers from this bureaucratic system, granting them freedom to sell to any buyer, at any location, and at a price they negotiate. From a classical-liberal viewpoint, this Act dismantles pseudo-socialist constraints imposed post-independence, empowering farmers with market choice and agency over their livelihoods. The piece positions this as part of a broader narrative by liberal thinkers critiquing India's dominance by false political values disconnected from independence ideals or native traditions, advocating for a spontaneous order that could transform the nation through genuine economic liberty.

**Key points:**

- The 2020 Farmers Produce Trade and Commerce Act allows farmers to sell produce outside government mandis to any buyer at negotiated prices.
- Decades of mandi restrictions mirrored coercive family controls in DDLJ, limiting farmers' freedom.
- This reform frees farmers from bureaucratic oversight, promoting classical-liberal market principles.
- Spontaneous Order critiques pseudo-socialism in Indian history, favoring spontaneous order for national transformation.

**By Spontaneous Order**

* * *

DDLJ fans will relate to the plight of the farmers in our country. For decades, our farmers could only sell their produce in government mandis, similar to how Simran was being forced to marry Kuljeet. In this episode of [SO Basically](https://www.youtube.com/playlist?list=PLysF1qZYkiGFX32APX8-p6AeOnev7InjZ), we’ll explain how the Farmers Produce Trade and Commerce (Promotion and Facilitation) Act 2020 frees the farmer from the clutches of a highly bureaucratic system (or the Bauji in this case) and allows them the freedom to sell to whomever they like, wherever they like, and at a price of their choosing.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## A Free Market Critique of the Agricultural Laws

Original: https://www.spontaneousorder.in/p/a-free-market-critique-of-the-agricultural-laws

Author: Spontaneous Order

Published: 2020-10-13T18:08:32.000Z

Topics: agricultural-reforms, farm-laws, free-markets, rule-of-law

> “If it was really a revolution, they wouldn’t be calling it one,” quips Mr. Barun Mitra, in a recent interview where I asked him to compare the recently pushed (read: bulldozed) agricultural reforms with the 1991 industrial liberalization program. M

**Summary:**

Akshat Singh offers a classical-liberal critique of India's three agricultural laws, questioning their 'free market' credentials despite being framed as reforms akin to 1991 liberalization. Drawing on Barun Mitra's skepticism, he evaluates them against four parameters: rule of law, government size, regulatory efficiency, and market openness. On rule of law, the laws establish parallel three-tier dispute mechanisms (reconciliation committee, SDM, DM) without judicial oversight, empowering bureaucrats prone to rent-seeking via corporate influence. Government size expands centrally by prohibiting state fees on APMC trade, crippling state procurement of MSPs (relied on by 6-8% of farmers) and sidelining states like Kerala and Chhattisgarh that pay above central MSPs; ECA amendments grant discretion on 'extraordinary' price rises (100% horticultural, 50% agricultural). Regulatory efficiency falters by sidelining middlemen—who provide credit and insurance to 86.2% marginal/small farmers—while favoring corporate 'aggregators', risking anti-competitive behavior. Markets remain unopened, as laws ignore land-use conversion, bar contractors from buying farmland or building infrastructure, and allow government limits on stockpiling, trapping farmers paternalistically. Overall, the laws shift from status quo but head 'downhill', far from a true free-market revolution.

**Key points:**

- Agricultural laws undermine rule of law by creating bureaucrat-led dispute mechanisms without judicial review, inviting rent-seeking.
- They centralize power by defunding state MSP procurement via fee bans, affecting 6-8% of farmers reliant on it.
- Laws ignore middlemen's vital role for 86.2% small farmers while enabling corporate aggregators, prone to anti-competitiveness.
- Reforms fail to liberalize land use or allow farmer entrepreneurship, with government retaining stockpiling controls.

**By Akshat Singh**

* * *

“*If it was really a revolution, they wouldn’t be calling it one*,” quips Mr. Barun Mitra, in a recent interview where I asked him to compare the recently pushed (read: bulldozed) agricultural reforms with the 1991 industrial liberalization program. Mr. Mitra, an expert on land reform and agricultural policy is one of the few who have questioned the ‘liberal-free market’ credentials of the three agricultural laws. Thus, while the debate surrounding the laws has been forced into a binary between those on the economic left and right, the truth may be more nuanced.  

To make our assessment more holistic, let us look at these four essential parameters of a free market set up and see how the laws measure up against them: i. Rule of law, ii. Government size, iii. Regulatory efficiency and iv. Market openness.  

## 1\. **Rule of law** 

**Articles 14 & 19 of [The Farmers Agreement on Price Assurance and Farm Services Act, 2020](<https://www.prsindia.org/sites/default/files/bill_files/Farmers%20%28Empowerment%20and%20protection%29%20bill%2C%2 02020.pdf.>)** talk about dispute settlement mechanisms in case of a disagreement between the farmers and contractors. The mechanism is three-tier- beginning from a stakeholder appointed reconciliatory committee, followed by judgement from the Sub Divisional Magistrate and finally the DM or Additional DM as the final appellate authority, wherein the latter two are given the jurisdiction of a civil court.  

The creation of a parallel legal mechanism and explicitly prohibiting judicial intervention (as per **Article  15 of [The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020](<https://www.prsindia.org/sites/default/files/bill_files/Farmers%27%20Produce%20Trade%20and%20Commerce%20bill%2C%2 02020.pdf>)**) is contentious. Even if we ignore the substantial increase in the scope of powers of the SDMs, there is no evidence that they have ample training to assess and give judgement on such cases. While many would argue that separate tribunals are given judicial powers in specific domains (such as the National Green  Tribunal), these usually consist of domain experts who can still be subjected to judicial intervention.  

The incentives for an SDM to give judgements in favor of larger corporations are colored with a serious  rent seeking opportunity. Regular transfers might aid bureaucrats by alleviating the fear of community  reprisal.  

## 2\. **Government size** 

The laws claim to severely reduce government size through the prohibition on state governments from charging additional fees, taxes from traders. Given that the fees collected by the state government are crucial for the maintenance of the APMCs and by extension the distribution of MSPs, this will be a severe blow to the state procurement capacity. While only 6-8% of farmers rely on MSPs, this has severe political economy effects. By centralizing decision making, the centre has viably pushed the state governments off the high table and made itself the center of corporate lobbying.  

States such as Kerala and Chhattisgarh which pay the farmers an amount much higher than the [centre mandated MSP](<https://en.gaonconnection.com/when-the-cost-of-different crops-varies-from-one-state-to-the-other-why-is-there-a-common-msp-for-the-entire-country/.>) will not be able to maintain the state procurement system without collecting fees. In effect, a parallel market is a death warrant for state procurement.  

**[Article 2.2 of the ECA](http://egazette.nic.in/WriteReadData/2020/219748.pdf.)** points to another problem. This article tries to allow price regulation in extraordinary circumstances. ‘Extraordinary price rise’- a given precursor is defined as a 100% increase in the price of horticultural and 50% in agricultural commodities. The extensive discretion that the government has, given that 100% price increase is commonplace in products such as onions, would disincentivize smaller traders to build storage capacities.  

## 3\. **Regulatory efficiency** 

The laws seek to stop the tyranny of the fang bearing middlemen. It overlooks the crucial role middlemen play in aiding 86.2% marginal and small farmers in India through credit and risk insurance. Furthermore,  Article 10.1 of the Empowerment and Protection Act supports the accommodation of ‘aggregators’.  This essentially implies that the arthiyas/middlemen can still carry on aggregating if they are included in the contract, thus in effect if they supply to the larger contractor. This, combined with the entry of corporate behemoths, reduces the negotiating power for middlemen.  

On one hand, companies would rely on middlemen for cost efficiency while on the other the market becomes prone to anti-competitive behaviour- something that decentralized aggregators provided effective warranty against.  

## 4\. **Open markets**  

The laws do not touch on land-use conversion, thus impeding on farmers’ intersectoral mobility.  Furthermore, Article 8 of the Empowerment and Protection Act prohibits the sale of farming land or the infrastructural development by the contractor, thus even affecting their inter-functional mobility. The paternalistic viewpoint which limits the ‘poor farmer’ to being a gullible signatory, reeks of colonial-era rules. It limits the farmers from engaging in any entrepreneurial venture while also forcing them to farm  (by not allowing for land use conversion). For those who may dare to venture out and build storage by themselves, Article 2.2 b. of the Essential Commodities Amendment Act which gives government discretionary powers to limit stockpiling, waits with a dagger.  

Thus, all in all, while the laws provided for a much-needed movement from the status quo, the direction of the shift is yet to be seen. My guess: It is downhill from here. It is then a good thing that we had not climbed much high, to begin with.

*All views are author’s own*

*Read more: [SO Musing: The Shetkari Sanghathana and the History of Farmers’ Movements in India](https://spontaneousorder.in/so-musing-the-shetkari-sanghathana-and-history-of-farmers-movements-in-india/)*

* * *

**About Akshat Singh**

Akshat Singh is currently a Research Associate at the Society for Policy Studies, New Delhi. He holds a degree in Politics & Government from Sciences Po, Paris and is presently enrolled at Columbia University, New York where he pursues Economics. He is keenly interested in the intersection of public policy and neuroeconomics.

## SO Musings: Bread and Circuses – The Welfare State

Original: https://www.spontaneousorder.in/p/so-musings-bread-and-circuses-the-welfare-state

Author: Spontaneous Order

Published: 2020-10-09T12:38:23.000Z

Topics: welfare-state, free-market, state-intervention, capital-accumulation

> India is supposed to have a welfare state according to Article 39 of the constitution. Come elections and all the political parties try to vie for the Indian voter by giving her a plethora of freebies, all in the name of welfare. The ‘welfare mindset’

**Summary:**

India's constitution under Article 39 mandates a welfare state, yet elections see all parties competing with freebies under the guise of welfare, reflecting a bipartisan 'welfare mindset' unchanging across the political spectrum. B.S. Sanyal's 1957 article in Indian Libertarian argues that welfare states obstruct prosperity by deploying non-productive bureaucrats to extract resources from productive classes, spending inefficiently on consumption rather than investment. Such interventions impose a 'tremendous nuisance value' on freedom-loving individuals, concentrating economic and political power in rulers' hands, emasculating the ruled, degrading rulers' character, and triggering capital consumption that fosters progressive poverty. In the unhampered market economy, private saving seamlessly coincides with capital accumulation and investment—savers forgo present satisfaction for future benefits via banks or insurance, enabling steady investments without disinvestment upon withdrawals, thus selfish conduct yields social welfare. Conversely, governments squander savings on current expenditure and malinvestment, ignoring market calculation needs for capital maintenance. Sanyal notes the British socialist experiment persists via American capitalism, while welfarists denounce saving and prescribe spending, falsely assuming state superiority over market-driven capital formation.

**Key points:**

- Welfare states extract resources from productive classes via bureaucrats for inefficient consumption spending, hindering capital accumulation and prosperity.
- Free market saving aligns with investment through banks and insurance, ensuring steady capital growth even as savers consume withdrawals.
- State intervention concentrates power, erodes freedom, emasculates citizens, and leads to capital consumption and poverty.
- British socialism relies on American capitalism for sustenance, proving market efficiency over welfarist methods.

**By Spontaneous Order**

* * *

*India is supposed to have a welfare state according to Article 39 of the constitution.  Come elections and all the political parties try to vie for the Indian voter by giving her a plethora of freebies, all in the name of welfare. The ‘welfare mindset’ of the Indian state and policies emanating from that is the only constant in Indian politics that doesn’t change and finds approval throughout the political spectrum.*

*However, Shri B. S. Sanyal, in this article published in the August 1957 edition of Indian Libertarian magazine, explains how a welfare state hinders the growth of prosperity in a society. According to him, it involves non-productive bureaucrats extracting resources from the productive classes and spending it inefficiently, mostly on consumption expenditure rather than investment.*

Welfarists fail to see that all intervention has a tremendous nuisance value. At least to all those who have developed some sense of freedom. Most have not. Hence the welfarists thrive. It is not necessary for one to be a capitalist, an exploiter or a criminally selfish man to abhor state interventionism. It is quite easy to see that if power, both economic and political, be concentrated in the hands of the rulers, we lose not only freedom but also prosperity. One cannot show a surer way to lose both. 

Freedom-loving men wish to plan their own course of life. In the welfare state, this prerogative rests only in the planners. ‘Everyone else is a planee,’ as Reginald Jcbb puts it. Welfarism thus emasculates the ruled and degrades the character of the rulers. Confiscatory policies destroy freedom, slow down further accumulation of capital, and start the process of capital consumption. These arrest progress towards prosperity and bring about a disposition to progressive poverty. 

## THE FAILURE OF BRITISH EXPERIMENT IN SOCIALISM 

The welfarist misses or deliberately ignores the permanent elements in Free Economy which make up the ground of all economics. He refuses to see that the British experiment in socialism is sustained by American capitalism and the Communist experiment by state capitalism. He also does not recognize that between the two methods of capital formation, the welfarist political and the ordinary economic, the latter has greater efficiency. 

In the unhampered market economy saving, capital accumulation and investment coincide. The saver forgoes a part of his present satisfaction for some future benefit. As he saves through a savings bank or an insurance policy, the bank or the insurance company invests the equivalent. The saver may later consume the savings; yet no disinvestment or capital consumption results. The withdrawals do not affect the investments of the banks and insurance companies: the investments increase steadily. The ordinary saver’s ordinary selfish conduct thus leads to social welfare.

## STATE SQUANDERING 

The private citizens may go on saving; but the government squanders the savings by spending them for current expenditure and malinvestment. The welfarists fail to understand that even the mere maintenance of capital requires skilful handling of the questions of investment and successful speculation and presupposes economic calculation and hence the operation of the market economy. In any case they prescribe spending as a panacea while denouncing over-saving and underconsumption. 

Furthermore, on the one hand, they say that both maintenance of capital and further accumulation of capital will be the preserve of the government and no longer left to the selfish individuals; on the other hand, they falsely assume that the good of the future generation will tum one’s selfishness to greater saving. And these, when under ordinary market economy conditions the selfishness drives man to save and invest in such a way as to fill best the most urgent needs of the consumers. 

The original document can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=1856980936.pdf). 

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

*Read more: [Food Prices and Libertarian Solution](https://spontaneousorder.in/so-musings-food-prices-and-libertarian-solution/)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Chakravarti Vijayaragavachariar – The Lion from The South!

Original: https://www.spontaneousorder.in/p/chakravarti-vijayaragavachariar-the-lion-from-the-south

Author: Spontaneous Order

Published: 2020-10-07T17:05:07.000Z

Topics: classical-liberalism, indian-national-congress, decentralized-governance, freedom-struggle

> The flame of democracy and its wings of fire thrive only if the feathers of democratic institutions function effectively. These institutions, like the power of the people, are entrusted in the execution apparatus of the rule of law and governance under ..

**Summary:**

Chakravarti Vijayaraghavachariar, dubbed the 'Roaring Lion of the South,' exemplified classical-liberal principles in India's freedom struggle as a lawyer, educator, and Indian National Congress leader from its inception in 1885. Born in 1852, he drafted the Congress constitution in 1888, popularized it in South India, and emphasized economic and social needs. As Congress President in 1920 at Nagpur, he supported Gandhi's Non-Cooperation but insisted on Non-Swarajya as the goal. He championed land ownership rights against colonial feudalism in 1906, advocated fundamental rights in 1919 influencing India's Constitution, and drafted the Swaraj Constitution in 1930 favoring a strong unitary central government. Vijayaraghavachariar opposed repressive laws like the Rowlatt Act and Defence of India Rules, fought untouchability, promoted gender equality including daughters' property rights and adult marriages, and believed in decentralized governance for enlarging public freedoms, liberty, and property protection. The post critiques modern political parties for failing to implement constitutional schemes for grassroots decentralization, urging emulation of his pragmatic liberal approach to true democratic functioning. He lived to 92, passing in 1944, and the article calls to celebrate the centenary of his presidency.

**Key points:**

- Vijayaraghavachariar drafted the Indian National Congress constitution in 1888 and made economic-social needs central to its agenda.
- He moved key resolutions on permanent land settlement in 1906 affirming people's ancient ownership rights and fundamental citizen rights in 1919 that shaped India's Constitution.
- As Congress President in 1920, he shaped Non-Cooperation goals toward Non-Swarajya while advocating decentralized governance and human rights.
- He opposed colonial repressive laws and promoted social reforms like ending untouchability and ensuring gender equality in property and marriage.
- Modern parties must emulate his classical-liberal focus on freedoms, property, and grassroots decentralization to fulfill constitutional democracy.

**By Chandrasekaran Balakrishnan**

* * *

The flame of democracy and its wings of fire thrive only if the feathers of democratic institutions function effectively. These institutions, like the power of the people, are entrusted in the execution apparatus of the rule of law and governance under the Constitutional provisions. 

Democracy functions to catalyse the achievement of public freedom, liberty and protection of property through the participation of people.  However, the hardwired question is- “do our political parties established under Constitutional democracy work for enlarging the freedom of people?” Do the political parties effectively implement Constitutional schemes after being elected to power and thereby empower decentralized decision making, reaching the grassroots levels of the country? 

One prime example is the grand old political party of India, the Indian National Congress; which, in the past, fought for freedom struggles through great freedom fighters and thinkers which included statesmen like Salem Chakravarti Vijayaraghavachariar. He was President of the Indian National Congress Party in 1920. It becomes important to go into some detail to understand the life and times of the great statesman Vijayaraghavachariar. 

He was a successful lawyer from the town of Salem in the Madras Presidency (now Tamil Nadu) since 1881. He became a Member of the Legislature in the Madras Presidency in 1895 and served the people until 1901. It was there that he came into close contact with the great liberal thinkers V.S.Srinivasa Sastri, C.Sankaran Nair, V.Bhashyam Iyengar;  and many other eminent freedom fighters. He was a Member of the Imperial Legislature from 1913-1916 and played a historic role in that capacity. 

Chakravarti Vijayaraghavachariar was famously called ‘The Roaring Lion of the South.’ He was born on June 18, 1852, at Madurantakam in Chingleput district in Madras Presidency. His father was a priest cum scholar who was adept in Sanskrit and traditional scriptures. Sadagopachariar wanted his son to take up after him. The young Vijayaraghavachariar learned the scriptures but was keen to learn English too. Later, he joined Pachaiyappas High School and stood second in the Matriculation Exams (1871). 

He received his B.A degree in 1875 from Madras Presidency College. He was appointed as a Lecturer in the Madras Presidency College in the same year . Later, he was transferred to the Government College, Mangalore, where, after three years of service, he resigned. Those were times when Indians were ill-treated by the Europeans and Vijayaraghavachariar met the same fate with his Principal. He quit the job but was requested to stay back by the Director of Public Instruction. However, the bold youngster resolved to take a stand for himself. He moved to Salem town and taught English and Mathematics at the Salem Municipal College. He left his job and became an advocate in Salem after clearing the law examination. He was married to Lakshmi and had a daughter named Seetha. 

Vijayaraghavachariar was involved with the Indian National Congress from day one. He had known A.O.Hume before the founding of the party, and he helped him to go ahead with the same. The first meeting took place in Mumbai (28.12.1895) under W.C.Banerjee (1844 – 1906), and Vijayaraghavachariar also participated along with Dadabhai Naoroji (1825 -1917), Pheroze Shah Mehta (1845 – 1915), Dinshaw Wacha (1844 -1936), S.Subramania Iyer (1842 -1924), G.Subramania Iyer (1855-1916) –  the founder of The Hindu newspaper, etc.

At the age of 36, in 1888, Vijayaraghavachariar drafted the Constitution of the Congress Party. He was responsible for making the Congress popular in South India. He persuaded the founders to make the economic and social needs of the people a central concern of the party. It was during this formative period that Vijayaraghavachariar and his friends played a key role in making the Indian National Congress an effective political organization with a focus on national consciousness, unity, and development. In 1899, he was appointed as a member of the Congress Propaganda Committee. 

At the Calcutta Session in 1906, Vijayaraghavachariar moved a resolution relating to the Permanent Land Settlement of Land Tenures. He argued that the people owned the land in India since time immemorial, and the ruler was only paid a share of the produce. The ruler never owned everything, and a shift in thought and action was the result of colonial tendencies and reeked of European feudalism. Later this was to become the basis for various Acts connected with land reforms in India. 

The Surat session of the Congress in 1908 caused a split between the extremists and moderates. Tilak inspired all the extremists, and Vijayaraghavachariar was with him. The Amritsar Congress (1919) was important for Vijayaraghavachariar who spoke about the Fundamental Rights of the Citizens. The meeting went on for long hours, and he received approval from the members instantly. The Constitution of India was based on this resolution. Vijayaraghavachariar had, thus, always been a foresighted man.   

He moved closely with leaders like Mahatma Gandhi, Madan Mohan Malaviya, Surendranath Banerjee, Gopala Krishna Gokhale, etc., The government brought in the Criminal Act Law Amendment Bill in 1913 and Vijayaraghavachariar opposed it vehemently along with Banerjee. They had to face threats but stood by their decision. He actively participated in debates and discussions on several subjects and always argued in favour of human rights. He was astutely well-read and was an expert in parliamentary proceedings. The government was forced to acknowledge his intelligence grudgingly.

The Nagpur Session took place in 1920, and Vijayaraghavachariar was made the President of the party. Gandhi also proposed the Non-Cooperation Movement during this session. It was announced in the backdrop of the Rowlatt Act and Jallianwala Bagh tragedy. Vijayaraghavachariar insisted that Gandhi keep Non-Swarajya as the goal of the movement; which he accepted. These details can be found in the autobiography of Gandhi. 

Vijayaraghavachariar supported the non-violent approach publicly. Lord Birkenhead, the Secretary of State of India had once stated that Indians were incapable of drafting their own constitution. Vijayaraghavachariar took up the challenge and prepared the Swaraj Constitution of India (1930). He wanted a strong central government and therefore had proposed a Unitary Constitution.

The year 1932 saw the 80-year-old Vijayaraghavachariar heading the Unity Conference in Prayagraj and it was at this moment that he turned emotional while emphasizing the need for national unity. 1935 saw the people of our country celebrating Vijayaraghavachariar’s 50-year tenure in the Congress. The Congress formed a Government in the Madras Presidency under the wise C.Rajagopalachari or Rajaji in 1937. Vijayaraghavachariar supported prohibition then. He opposed the Defence of India Rules in 1940 for it could imprison patriots. Rajaji was inspired by Vijayaraghavachariar who guided him in a political career. 

Vijayaraghavachariar opposed the Sir Stafford Cripps Mission in 1942 and Rajaji stated that there was nothing on Earth that could stand against the courage of Vijayaraghachariar. He clearly understood that the old Congress was a national movement that had been a meeting point for people coming from diverse backgrounds. He used to tell people often that it was the freedom movement which had enriched the party. Therefore, it was incumbent on the leaders of the time to serve the country on an equitable basis. 

Vijayaraghavachariar had come from a low-income family who could not afford to give him milk every day. He had earned well but had spent most of it on the well being of the people. He was kind-hearted and selfless. He fought and stood against untouchability. He believed in gender equality and campaigned for women to be married only after they were adults and strongly advocated the right of a daughter to have a share in her father’s property.

He believed in a decentralized form of governance. He was a classical liberal in the constitutional sense and believed in pragmatism. His wisdom and knowledge were the two oars that took forward the vessel of freedom based on his liberal approach. His endearing nature brought out the liberal in him. His many good habits led him to live for 92 years. He passed away in 1944. 

He commanded much respect through his fabulous arguments that were made in the interest of the people. Let us salute him now by celebrating the centenary year of his Presidentship of the old Indian National Congress. The people of the country will forever remember the “Roaring Lion of South India”. 

*This article is co-authored with Mr.Rajesh Govindarajulu, a historian based in Coimbatore, Tamil Nadu. He has written copiously on the history of Coimbatore city.* 

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

*Read more: [B R Ambedkar on Justice Ranade, Social Reform, and the failure of Indian Liberalism](https://spontaneousorder.in/b-r-ambedkar-on-justice-ranade-social-reform-and-the-failure-of-indian-liberalism/)*

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## B R Ambedkar on Justice Ranade, Social Reform, and the failure of Indian Liberalism

Original: https://www.spontaneousorder.in/p/b-r-ambedkar-on-justice-ranade-social-reform-and-the-failure-of-indian-liberalism

Author: Spontaneous Order

Published: 2020-10-06T16:45:20.000Z

Topics: indian-liberalism, social-reform, caste-hierarchy, ambedkar-ranade

> India’s anti-imperial struggle against British colonialism constituted of many voices of the nation. Given the sheer geographical and social diversity of India, it only made sense that the national political aspirations took different expressions. Some

**Summary:**

In his 1943 speech commemorating Justice Mahadev Govind Ranade's 101st birthday, B.R. Ambedkar praised Ranade's liberal social reform efforts against Hindu society's caste hierarchy, highlighting Ranade's founding of the pan-Indian Social Conference as an adjunct to the early Indian National Congress. Ambedkar viewed society's tyranny—exemplified by untouchability—as more pernicious than the state's, necessitating state intervention to enable substantive rights, a view later enshrined in India's Constitution via anti-untouchability provisions and affirmative action. He critiqued conservative opponents like Tilak and Chiplunkar for prioritizing political self-rule or orthodox Hinduism over social change, arguing that rights must precede policing and that India's graded caste system precluded social democracy without prior reforms. Ambedkar approved Ranade's gradualism but clinically diagnosed Indian liberalism's failure: elite-led, lacking organization, mass outreach, ideological propaganda, and emotional connection, it ceded ground to Congress hegemony, dooming popular government. From a classical-liberal lens, the author sees Ambedkar—despite not being a liberal—mirroring Ranade's struggle for individual freedom, urging modern Indian liberals to build mass alliances, embrace outreach, and avoid elitism to revive liberalism against single-party dominance.

**Key points:**

- Ambedkar lauded Ranade's multifaceted activism, including founding the Social Conference, to combat caste ills as essential for true freedom.
- Society's caste-based tyranny exceeds the state's, requiring state countermeasures like constitutional bans on untouchability before enforcing rights.
- Indian liberals failed due to elitism, poor organization, and lack of mass emotional appeal, enabling Congress's single-party rule.
- Modern liberals should ally with Ambedkarite social justice traditions, prioritizing outreach to counter conservative and nationalist oppositions.

**By Sanjeet Kashyap**

* * *

India’s anti-imperial struggle against British colonialism constituted of many voices of the nation. Given the sheer geographical and social diversity of India, it only made sense that the national political aspirations took different expressions. Some forms of activism went beyond a narrow political demand for self-rule to fashion a broader conception of freedom and dignity. Prominent strands along this line consisted of moderate liberals and radical Dalit leaders. Differing in their modus operandi and view of the role of state, both constitutionalist liberals and subaltern leaders recognized the need to reform Indian society from inside to enable a ‘true’ sense of freedom for Indians. These two largely marginalized visions of nation overshadowed by the big tent Congress nationalism were brought in conversation in a speech by Bhimrao Ambedkar.

Delivered in 1943 at the invitation of the Deccan Sabha to commemorate the 101st birthday of the liberal leader Mahadev Govind Ranade, Ambedkar’s speech discussed a host of issues relevant for the prevailing political climate, Ranade’s contributions, and the larger cause of social reforms. The speech was supposed to be an assessment of Ranade’s legacy, but it received widespread coverage in the contemporary press for an altogether different reason. Ambedkar’s embittered take on both Gandhi and Jinnah as a sideway reference in the speech opened him to criticism in the Indian press. Ambedkar defended himself on the ground that his love for India explained his dislike for the two giants who were no greater than the country. To me, though, the relevance of Ambedkar’s incisive speech lies in the meat of the matter which shall be discussed below.

Bereft of any personal connection with Ranade, Ambedkar relied on the Great Man theory as propounded by Carlyle to assess him. Ambedkar’s view of history did not deny the role of structural forces in shaping human history but also underlined human agency in responding to structural constraints. For Ambedkar, Ranade’s sincerity, intellect, and commitment to social reform made him worthy of the epithet. Ranade’s recognition of ills in the Hindu society was complemented by his tireless efforts to bring change. Like a marathon sprinter, Ambedkar recalled, Ranade would conduct meetings, arrange missions, deliver lectures, publish articles, give interviews, write letters, establish societies, and found journals, all in pursuit of the noble cause. To give a more permanent footing to his social reform initiatives, Ranade founded the Social Conference, a pan-Indian body pursuing the agenda. The body operated as an adjunct to the Indian National Congress which in early years kept itself distanced from matters of social reform.

Ambedkar’s appreciation of Ranade and by extension other contemporary liberal social reformers stemmed from his own preoccupation with the cause of Dalit dignity. Having borne the brunt of caste discrimination, Ambedkar was well aware of the tyranny of society which to him was more pernicious than the tyranny of the state. Consequently, his vision of individual freedom saw a role for the state as a counterbalance to the social sanction for untouchability, reflected later in constitutional sanction against untouchability and provision for affirmative action. Moreover, the stiff opposition faced by Ambedkar from social conservatives perhaps made him recognize the struggle of liberal social reformers who were in the same position in the late 19th century. Ambedkar argued that a reformer challenging established social mores is even more courageous than a political prisoner because the reformer lacks support and praise otherwise received by political activists.

In line with Ambedkar’s argument, Ranade and other like-minded reformers faced opposition in the western province, not just from the masses but also from conservative thinkers like Bal Gangadhar Tilak and Vishnushastri Chiplunkar. In Bengal province, things were no different for liberal-minded reformers like Raja Rammohan Roy, Ishwar Chandra Vidyasagar, and Henry Derozio who were opposed by the likes of Raja Radhakanta Deb and his Dharma Sabha. Ambedkar recognized two different strands within the conservative intelligentsia. Activists like Chiplunkar were orthodox in belief but kept away from politics. They believed in a stylized vision of Hinduism serving as a guiding mechanism to arrange the society. Ambedkar in his speech tore down this conservative social vision by pointing out the graded hierarchy of caste system which would hollow out any society instead of infusing it with a sense of national unity. The idealistic individualism of Hindu philosophical schools, Ambedkar rightly pointed out, never came to challenge the dominating hold of hierarchical caste practice. Though, one might argue that such philosophical traditions might provide an indigenous intellectual base for Indian liberals to make the case for social reforms.

The other strand of opposition to social reforms came from modernist politicians like Tilak who prioritized self-rule and thus opposed any colonial state intervention in local customs. In that sense, their modernist vision prioritized political emancipation over the social. Ambedkar, of course, took exception to this view. According to him, a Jeffersonian limited state protecting the natural rights of people would not make sense in India because these rights did not exist for a vast majority of people. Thus, ‘\[R\]ights must exist before policing becomes a serious matter of substance.’ Moreover, Ambedkar also recognized the futility of granting fundamental rights after political independence without a profound change in social attitude. Legal provisions against discrimination would not mean much if the social conscience refuses to recognize the validity of legal rights. In Ambedkar’s assessment, India’s prevalent condition was not suitable for social democracy. Echoes of such concern could also be heard in his famous last speech to the Constituent Assembly.

It was the fundamental unsuitability of India for a social democracy that necessitated the breakdown of the artificial division between social reforms and political rights. Ranade, Ambedkar, and Gandhi recognized that social reforms were a necessary precursor to a functional democracy premised on substantive citizenship. Not only did Ambedkar recognize the important groundwork laid by Ranade and Phule in this regard, but he also approved of liberal gradualism as the method to bring change.  

The argumentative Ambedkar though was not just all praise for Justice Ranade and liberals. Speaking in front of a largely liberal gathering, he presented a clinical analysis of the failure of Indian liberals. Indian liberalism at the time basically amounted to a bunch of elite leaders, deemed the ultimate ‘contemptible’ of Indian politics. They lacked organization, mass outreach, ideological propaganda, emotional connection, and a rallying cry. The tragedy was such, Ambedkar argued, that the leading liberal figure reposed his faith in Congress, effectively paving way for a single party hegemony. Thus the collapse of the Liberal party was ‘really a disaster to the country’ because ‘the rule of a single party is fatal to Popular Government.’

In conclusion, Ambedkar himself was no liberal. That much he made clear in the speech itself. Yet, he was able to find a lot of common ground with them. Ranade’s career and his struggle for social reform in many sense mirrored Ambedkar’s later efforts in a similar direction. The radical in him notwithstanding, Ambedkar was very much willing to admit the connection. To me, herein lies the possibility of making an alliance between the ideological descendants of Ambedkar and Ranade in ensuring individual freedom. Moreover, Ambedkar’s diagnosis of Indian liberal failure also has relevance today. The lack of mass outreach, a distaste for identity-based emotive politics, and largely elite character of liberal individuals still account for the absence of a liberal political party in India. Indian liberals might as well do better to pay heed to Ambedkar’s counsel.

*The text of the speech can be accessed [here](http://www.columbia.edu/itc/mealac/pritchett/00ambedkar/txt_ambedkar_ranade.html).*

*Read More: [SO Musings: Liberalism and Freedom](https://spontaneousorder.in/liberalism-and-freedom/)*

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## SO Dialogue: From Annadata to Farmpreneur – Do farm laws benefit the farmers?

Original: https://www.spontaneousorder.in/p/so-dialogue-from-annadata-to-farmpreneur-do-farm-laws-benefit-the-farmers

Author: Spontaneous Order

Published: 2020-10-05T16:00:05.000Z

Topics: farm-laws, agricultural-reforms, india-agriculture

> As the debate around the current agri-reforms refuses to settle, it’s imperative to take a deep dive into these reforms and try to understand how exactly they will benefit the farmer. Why are some farmers opposing these reforms, what are the gaps, if an

**Summary:**

This post announces an upcoming SO Dialogue event on Gandhi Jayanti titled 'From Annadata to Farmpreneur: Do farm laws benefit the farmers?', featuring Dr. Parth Shah of CCS and Dr. Jayaprakash Narayan of Foundation for Democratic Reforms. It promotes a discussion on India's agri-reforms, exploring how they benefit farmers, reasons for opposition, gaps in implementation, and further steps needed for liberalizing agriculture from a classical-liberal perspective.

**Key points:**

- Announces SO Dialogue event on farm laws' benefits to farmers.
- Features experts Dr. Parth Shah and Dr. Jayaprakash Narayan discussing reforms, opposition, and liberalization paths.

**By Spontaneous Order**

* * *

As the debate around the current agri-reforms refuses to settle, it’s imperative to take a deep dive into these reforms and try to understand how exactly they will benefit the farmer. Why are some farmers opposing these reforms, what are the gaps, if any; and how much further are we yet to go in terms of liberalizing agriculture? Join us this Friday, on the occasion of Gandhi Jayanti, for an [SO Dialogue](https://www.youtube.com/playlist?list=PLysF1qZYkiGHtkO2ycfweBuFfScohV_M2) on “From Annadata to Farmpreneur: Do [farm laws](https://spontaneousorder.in/the-way-forward-for-indias-new-farm-laws/) benefit the farmers?” with Dr. Parth Shah, President, CCS, and Dr. Jayaprakash Narayan, Founder, Foundation for Democratic Reforms, where we will uncover answers to these questions, and many more.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: Food Prices and Libertarian Solution

Original: https://www.spontaneousorder.in/p/so-musings-food-prices-and-libertarian-solution

Author: Spontaneous Order

Published: 2020-10-01T15:53:56.000Z

Topics: agriculture, price-controls, libertarianism, government-intervention

> With the recent debates over the new Farm Bills; the concept of Minimum Support Price (MSPs) and state control over food prices has been brought into the limelight. This week’s SO Musings will explore the very origin of MSPs in India and government inte

**Summary:**

In a 1957 article excerpted from The Indian Libertarian, M.A. Venkata Rao critiques government intervention in India's agriculture during the Second Five Year Plan era. Authorities initially touted surplus food production from 'grow more food' campaigns, irrigation, and community projects, with prices falling from around 420 to 390, suggesting export potential. Post-elections, they admitted acute scarcity, importing millions of tons of wheat and rice, straining foreign exchange amid machinery imports. Facing self-made crisis, officials proposed floor and ceiling prices alongside an Essential Commodities Act amendment enabling requisition of hoarded grains at three-month average prices, not current rates. Rao warns this forms a vicious circle: more intervention begets worse consequences, propelling towards communism and eroding private initiative. Libertarians offer alternatives—one school demands complete laissez-faire, confining government to law/order, defense, foreign affairs, and currency, leaving production/exchange to citizens; extremists (anarchists) advocate abolishing government for a harmonious society of voluntary negotiations without coercion or controls. The piece aligns with classical-liberal rejection of socialist meddling in markets.

**Key points:**

- Government claims of agricultural surplus via campaigns like 'grow more food' quickly reversed into massive imports of wheat and rice, exacerbating foreign exchange strain.
- Interventions like price controls and grain requisitions under the Essential Commodities Act deepen the vicious circle towards a controlled economy and communism.
- Laissez-faire libertarians limit government to law/order, defense, foreign affairs, and currency, freeing economic activities for private citizens.
- Anarchist libertarians propose eliminating government entirely for a society based on voluntary justice and negotiation.

**By Spontaneous Order**

* * *

*With the recent debates over the new Farm Bills; the concept of Minimum Support Price (MSPs) and state control over food prices has been brought into the limelight. This week’s SO Musings will explore the very origin of MSPs in India and government intervention in the agricultural sector.* 

*Below is an excerpt from an enlightening article by M.A. Venkata Rao in the august 1957 issue of The Indian Libertarian magazine; titled ‘Food prices and libertarian solution’, in which he gives suggestions for regulation in food prices that align with liberal principles:-* 

In a predominantly agricultural country like ours, surplus in food grains and industrial raw materials (like jute and oil seeds) is the foundation of industrial advance. Unlike England we cannot pay for our imports with manufactured goods in export. Our exports of manufactures though growing in the postwar years (and can grow phenomenally if socialism will let it alone without meddling) are too meagre to support an industrial drive of the dimensions contemplated in the second Five Year Plan. 

Just a year ago, the authorities were spreading the illusion that the country had turned the corner in the matter of agricultural production and had ·raised it enough to meet the full needs of consumption with even a little to spare for export! They gave impressive figures of millions of tons of extra production achieved through the grow more food campaign, through additional acres brought under irrigation and through the impetus given through the community development projects etc. and the number of prices declined a little from around 420 to 390 and things looked promising. 

#### A DIFFERENT TALE 

But now immediately after the elections the authorities come out with a sadly different tale. They speak of the millions of tons of wheat and rice purchased from abroad which would tide over the acute scarcity everywhere and lower the rising prices which have again approached war-time records! Now the authorities shamelessly speak of importing more millions of tons, the foreign exchange for which would add to the almost impossible strain already placed on it by the greatly accelerated imports of machinery on account of the requirements of the second Five Year Plan! 

Confronted with this crisis of their own making, the authorities now speak alarmingly of fixing floor and ceiling prices for agricultural products at one and the same breath! Meanwhile, as an interim measure they have passed an Amendment to the Essential Commodities Act whereby the Government takes power to requisition stocks of food grains in the hands of hoarders at prices calculated at an average of three month preceding instead of at current rates. And so we move deeper and deeper into controlled economy and ourselves within the realm of communism without realising where we are! 

It is a vicious circle. The more the Government intervenes in the economy, the more the deleterious  consequences necessitating further interference will ensue until the private citizen loses all freedom of action and of initiative. What then is the remedy? What would a libertarian suggest in the circumstances for a way out of the labyrinth and return to a saner way out of the economic deadlock brought about by socialism or interventionism? 

#### LIBERTARIANS AND LIBERTARIANS 

There seem to be different types of libertarians. One type is that of libertarians committed to complete laissez faire .Thinkers of this laissez faire school advocate a “hands off” policy so far as the Government is concerned in matters of public economy. They want the Government to confine themselves to law and order, foreign affairs, defence and currency and leave all economic functions. production, exchange and distribution to citizens in their private capacity. They have their own answer to critics who complain that this policy would put the majority of the public at the mercy of capitalists. 

A more extreme school would go further and abolish the government itself as an institution. They are called anarchists who believe that the Government as an instrument of coercion is the source of all evil in society and that man is essentially so good that released from fear of the Government he would follow the star of justice and good will in all his relations and settle all affairs in society through peaceful negotiation. Such an anarchist society would be full of natural harmony! In such a society there is no meaning in controls and government price fixing, for government will have ceased to exist!

Read the full text which can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=1856980936.pdf). 

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

*Read more: [Do the farm bills benefit the farmers?](https://spontaneousorder.in/do-the-farm-bills-benefit-the-farmers/)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Basically Episode 13: Pandemic और Street Vendors की समस्या

Original: https://www.spontaneousorder.in/p/so-basically-episode-13-pandemic-street-vendors

Author: Spontaneous Order

Published: 2020-09-30T18:00:11.000Z

Topics: street-vendors, pandemic-impact, india-regulation, vendor-rights

> The lockdown severely impacted the livelihood of street vendors, with many struggling to remain “Atmanirbhar”. In this episode of SO Basically we talk about how the lockdown has affected street vendors and what the government is doing to help them. Hi

**Summary:**

Episode 13 of SO Basically examines the severe impact of the COVID-19 lockdown on street vendors in India, disrupting their livelihoods and self-reliance ('Atmanirbhar'). It highlights how historical state and municipal laws have regulated against vendors, burdening their entrepreneurial activities. The Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act 2014 was enacted to protect urban street vendors' livelihood rights and provide social security. However, persistent implementation gaps have made it difficult for vendors to conduct business, particularly during the pandemic, as explored in linked analysis on challenges like taking street food online. From a classical-liberal perspective, the episode critiques these regulatory failures and poor execution, underscoring the need for reforms to enable vendors as free entrepreneurs in a market-friendly environment, countering pseudo-socialist constraints on spontaneous order.

**Key points:**

- Lockdown devastated street vendors' livelihoods, challenging their self-reliance.
- Historical state and municipal laws have disadvantaged street vendors.
- The 2014 Street Vendors Act aims to protect livelihoods and regulate vending but suffers from implementation gaps.
- These gaps hinder vendors' business operations, especially amid the pandemic.

**By Spontaneous Order**

* * *

The lockdown severely impacted the livelihood of street vendors, with many struggling to remain “Atmanirbhar”. In this episode of SO Basically we talk about how the lockdown has affected street vendors and what the government is doing to help them. Historically, street vending in India has been regulated by several state and municipal laws that weighed against vendors. The Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act 2014 was enacted to protect the livelihood rights and social security of urban street vendors. However, there are many gaps in the implementation of this act, which has made it difficult for vendors, as entrepreneurs, to do business, [especially during the pandemic](https://spontaneousorder.in/the-challenge-of-taking-street-food-online-in-a-pandemic/).

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musing: The Shetkari Sanghathana and the History of Farmers’ Movements in India

Original: https://www.spontaneousorder.in/p/so-musing-the-shetkari-sanghathana-and-history-of-farmers-movements-in-india

Author: Spontaneous Order

Published: 2020-09-28T17:07:00.000Z

Topics: farmers-movements, shetkari-sanghathana, agricultural-history, market-liberalization

> The crisis facing India’s farmers has been as old as time itself. And throughout history, there have been numerous struggles and demands for reforms by Indian farmers against all dispensations. The demand for reforming the agricultural sector, giving ac

**Summary:**

The post recounts the history of Indian farmers' movements, emphasizing the Shetkari Sanghathana (SS), founded by Sharad Anantrao Joshi in the late 1970s in Maharashtra, as a non-political, non-communal peasants' union with a single goal: securing remunerative prices for agricultural produce, seen as the key to India's economic development from a classical-liberal perspective. It traces farmers' struggles from British rule, where the zamindari system, cash taxes, and influx of cheap British textiles crippled village artisans and economies, leading to indebtedness blamed on moneylenders rather than colonial policies. Post-1947 independence abolished zamindars and moneylenders but replaced them with state controls that extracted agricultural surplus to urban areas amid food shortages. The 1960s Green Revolution boosted productivity manifold yet left farmers poorer as incomes inversely correlated with yields, debunking excuses like low productivity or social customs. This created space for SS's emergence as a nationalist farmers' organization demanding freer markets and deregulation to alleviate farmers' plight, contrasting with earlier movements and highlighting state intervention as the root cause of rural poverty.

**Key points:**

- Shetkari Sanghathana, started by Sharad Joshi in the late 1970s, demands remunerative prices for farm produce as the core to India's economic development via market liberalization.
- British land tenure and industrial imports destroyed village economies, causing indebtedness misattributed to landlords rather than colonial extraction.
- Post-independence state measures continued surplus transfer from farms to cities, perpetuating poverty despite abolishing zamindars and moneylenders.
- Green Revolution of 1960s multiplied yields but reduced farmer incomes proportionally, enabling SS's rise against state policies.

**By Spontaneous Order**

* * *

*The crisis facing India’s farmers has been as old as time itself. And throughout history, there have been numerous struggles and demands for reforms by Indian farmers against all dispensations. The demand for reforming the agricultural sector, giving access to open markets and de-regulating the economic freedom of farmers has been time and again raised in the past decades.*

*While the debate surrounding the current agri-reforms refuses to settle, it is pertinent to go back in time and to recall the rise of the Shetkari Sanghathana spearheaded by Sharad Anantrao Joshi. The Shetkari Sanghathana mobilised one of the largest farmer’s movements in the country and their demands were clear, a freer and liberal market to allay the plight of India’s farmers.*

*Produced below is the excerpt from a booklet titled ‘ Visionaries of a New Bharat – Shetkari Sanghathana’ which traces the evolution, the ideology and the vision of the Shetkari Sanghatana and elaborately lays down their demands with their rationale.* 

The Shetkari Sangathana (SS) in Maharashtra functioning since 1998 is a true representative of the present epoch of the farmer’s movement. The SS has been spearheading the developmental and ideological debate. The SS was kick-started in the late 1970s by Sharad Joshi. The SS is a non-political, non communal and non-pastoral union of peasants with a single point-programme – “Securing remunerative prices for the agricultural produce.” The single point may seem to be extremely simplistic, but, according to the thought of SS, it is the key to the economic development of India. 

#### HISTORY OF FARMERS’ MOVEMENTS IN INDIA 

Movements; agitations, uprisings and revolts by peasants are as old as history itself. The primary objective of the farmers’ uprising, agitations and conquests during the period of British Rule was to seek abolition of the Zamindari as against the Ryotwari (lease holder) system. In the long tradition of lndian history, the land in the village belonged to the village Panchayat. The division of agricultural labour continued from generation to generation between the cultivators and the artisans. The British brought in their own revenue system based on private ownership of land. Land was measured, numbered and allotted to prominent villagers who undertook to collect their revenue for the government or to those whose traditional role came closest to that of the cultivator/ accountant. 

The British land tenure system had two effects. The invasion of the Indian domestic market by cheap products of the British industry, particularly textiles, crippled the village artisans and dried up the money inflows into the village economy. Under these circumstances, levy of land-taxes payable strictly in cash, drove even the relatively well-off farmers to borrow money from whoever happened to have some spare cash, howsoever paltry. In a very short time, indebtedness mounted and the mortgaged lands passed on to the moneylenders/zamindars. The resultant discontent was directed at the moneylender and revenue collecting landlords instead of the prime villains i.e. the Colonial State. The newly English educated and articulate nationalists movement blamed the state of Indian agriculture on the internal contradiction between the rich farmers and the small peasants.  Till the independence in 1947, the poverty of the countryside was attributed to either the weaknesses of the cultivator or to the exploitation by the landlords and the moneylenders. The independence in 1947 brought in the abolition of both the revenue collector zamindars as also the moneylenders. The despised institutions were replaced by rigid credit and bureaucratic institutions that did not attenuate the level of exploitation but carried the agricultural surplus away from the countryside to the urban areas. 

The independence and the partition marked the beginning of the years of food shortage and famines. The new national State started taking draconian measures calculated to take away food surplus from the villages to urban industrial areas. The commonly prevalent notion, at the time, was that the poverty of the farmers was due to low productivity, illiteracy, poorer health conditions and age-old social customs. The generally pervading spirit of nationalities did not permit the emergence of any farmers’ movement directed against the State. The Green Revolution of the 1960s changed all that. The agricultural productivity in most areas and crops multiplied manifolds. The farmers found, nevertheless, that their income was inversely proportional to the yields they obtained. India had a “Green Revolution” producing an abundance of crops but leaving the farmers indebted and poor. 

This signaled the right moment for the emergence of a Nationalist farmers’ organization. The blame for the poverty could no more be put on the moneylenders or on the landlords.  It was no more possible to blame the illiteracy, the indolence and wasteful social customs. The time survived for the emergence of the Shetkari Sanghatana.  

To read the full text, click on this [link](http://www.indianliberals.in/~_admin/pdflanguage?id=1599523700.pdf). 

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

*Read more: [Do the farm bills benefit the farmers?](https://spontaneousorder.in/do-the-farm-bills-benefit-the-farmers/)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Farm laws to bring more freedom, and better prices

Original: https://www.spontaneousorder.in/p/farm-laws-to-bring-more-freedom-and-better-prices

Author: Spontaneous Order

Published: 2020-09-28T12:36:19.000Z

Topics: farm-laws, contract-farming, agricultural-reform, msp

> Opposition parties and some farmers’ organisations have protested against three new agricultural reform laws. These provide much-needed reforms that will help farmers get a better price by cutting out middlemen and improving marketing efficiencies. The

**Summary:**

Swaminathan SA Aiyer defends India's three new agricultural reform laws against protests from opposition parties and farmers' groups, which falsely claim the laws abolish minimum support prices (MSP) and government procurement. The laws grant farmers freedom to sell produce anywhere in India, bypassing middlemen, mandi taxes, and state restrictions—freedoms non-farmers enjoy and which would be condemned as outrageous if denied to others. Farming is unattractive, with surveys showing 42% of farmers wanting to exit; farm numbers doubled to 145 million from 1970-71 to 2015-16, halving average size to 1.08 hectares, making decent incomes impossible without shifting labor to manufacturing and services. Government will continue some MSP procurement for ration shops, while contract farming with agro-processors ensures minimum prices and scale economies, as proven by ITC's e-choupals aiding 4 million farmers across 35,000 villages in 10 states. Amending the Essential Commodities Act removes stock limits that deterred warehouse investments and hurt farmers during price spikes. High MSPs create gluts, as in the EU's past; better alternatives are cash transfers like Telangana’s Rythu Bandhu (Rs 10,000/acre), PM-KISAN (Rs 6,000/acre), and Odisha’s KALIA scheme. In sum, farmers need sales freedom, exit options from agriculture, and cash support over price distortions.

**Key points:**

- New farm laws enable farmers to sell produce anywhere in India, eliminating middlemen and state mandi taxes to secure better prices.
- Contract farming and models like ITC's e-choupals voluntarily benefit millions of small farmers with fair prices, technology, and scale economies.
- Amending the Essential Commodities Act removes stock limits that discouraged agri-warehouse investments and restricted farmer profits during price rises.
- Cash transfer schemes like PM-KISAN and Odisha’s KALIA provide direct support to farmers, tenants, and landless households, superior to distortionary high MSP procurement.

**By Swaminathan SA Aiyer**

* * *

Opposition parties and some farmers’ organisations have protested against three new agricultural reform laws. These provide much-needed reforms that will help farmers get a better price by cutting out middlemen and improving marketing efficiencies. The protests arise from false accusations that the new laws mean abolition of minimum support prices (MSP) and procurement by central and state governments.

The new laws give farmers freedom to sell their produce anywhere in India. Readers, ask yourselves, would you rather be free to earn a salary or sell goods or services anywhere in India, or only in places designated by state governments, only after paying middlemen a commission, and only after paying a tax to state governments (akin to the mandi tax paid by farmers)? That would be condemned as an outrage. Farmers must be as free as non-farmers to buy and sell anywhere in India.

Farming is not an attractive occupation. Surveys show 42% of farmers want to move out of it. Between 1970-71 and 2015-16, the number of farms more than doubled from 71 million to 145 million while the average farm size more than halved from 2.28 hectares to 1.08. Nobody can earn a decent income from such tiny farms. The main solution lies in moving people out of agriculture into manufacturing and services. Other measures are only palliatives.

Opposition parties claim freedom to sell will mean the end of government procurement at MSPs. That is a plain falsehood. The government will continue procuring some (though not all) produce at MSPs. How else will the government get the grain for ration shops? Alas, we live in an era of fake news. Since one hectare of cereals will not yield a decent income, small farmers are shifting to animal husbandry, vegetables, and fruit. These yield more income from less land. But vegetables and fruit are perishable and cannot be procured and distributed by slow-moving government agencies. The best way forward is for groups of farmers to strike contracts with agro-processors. Contract farming will create scale economies for farmers and ensure a minimum price.

Leftists say farmers will lose and only corporations will gain. How so? Any farmer can opt into or out of contract farming. Over two decades, ITC has set up echoupals, procurement centres with electronic information enabling farmers to track prices at mandis and foreign markets, satisfying themselves they are getting a fair price. E-choupals help up to four million farmers growing soyabean, coffee, wheat, rice, pulses, and shrimp in 35,000 villages across 10 states. This obviously helps farmers who participate voluntarily. Yet ITC’s profits are so modest that rivals have not rushed to copy it. The same will be true of contract farming.

Besides, contract farming will encourage group farming by small farmers to reap scale economies. The buying corporations will have a high incentive to provide farmers with the best new technologies and farm practices, something government extension services have failed miserably to do.

The Essential Commodities Act was enacted decades ago to stop hoarding. States could decree stock limits for traders and prevent them from moving goods across states. In practice, it hit farmers too. They were not protected if the prices of potatoes or onions fell but were prevented from reaping high profits when prices rose. It also meant little investment in agri-warehouses that are essential for farming in other countries. Which trader will invest in large warehouses if the government suddenly imposes stock limits that make him a criminal? The amendment of this Act will help farmers benefit when prices rise.

Some politicians think government procurement of all farm produce at a high price is the solution. However, global experience shows that if the governmentguaranteed price is above international levels, this will induce a glut for which there is neither domestic nor foreign demand. The European Union used to have high farm support prices that created mountains of unsold meat and butter and lakes of milk, which were ultimately sold at a huge loss to the Soviet Union. Now the EU has shifted mainly to direct income support for farmers.

India is shifting in a similar direction with Telangana’s Rythu Bandhu scheme (Rs 10,000/acre) and Modi’s PMKisan scheme (Rs 6,000 per acre). Best is Odisha’s KALIYA, providing cash transfers (Rs 10,000/acre) not just to landowners but also tenants and sharecroppers; Rs 12,500 to landless households to start poultry, goat-rearing and fisheries; Rs 25,000 over five years for small and marginal farmers to buy inputs; and insurance benefits.

In sum, farmers need the freedom to sell, move out of agriculture, and cash support rather than high prices in the interim. That’s the way to go.

*All views are personal*. *This article was originally published in the [Times of India](https://timesofindia.indiatimes.com/blogs/Swaminomics/farm-laws-to-bring-more-freedom-and-better-prices/) on September 27, 2020.*

*Read our explainer on the 3 farm bills: [Do the farm bills benefit the farmers?](https://spontaneousorder.in/do-the-farm-bills-benefit-the-farmers/)*

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Do the farm bills benefit the farmers?

Original: https://www.spontaneousorder.in/p/do-the-farm-bills-benefit-the-farmers

Author: Spontaneous Order

Published: 2020-09-25T16:43:44.000Z

Topics: farm-reforms, apmc, contract-farming, essential-commodities-act

> Three farm bills were passed in the Rajya Sabha this week. A wave of protests and media conversations have questioned the undemocratic way in which these bills were passed. Even though it’s valid to question the procedure, we must not lose sight of the

**Summary:**

The three farm bills—Farmers Produce Trade and Commerce Bill (bypassing APMC monopolies), Essential Commodities Amendment Bill (easing stock limits and price controls), and Farmers Agreement on Price Assurance Bill (enabling contract farming)—benefit India's over 9 crore farmers by dismantling outdated government regulations from the British-era APMC Acts and 1955 ECA. APMCs restricted first sales to just 7,000 mandis, prohibiting direct sales or interstate trade, creating a state monopoly. The first bill allows farmers to sell anywhere, to anyone, at chosen prices, with mandis now competing alongside private markets and an e-NAM portal. The ECA amendments delist onions, potatoes, cereals, etc., from essential commodities, ending arbitrary export bans (e.g., onion rules changed 17 times from 2014-2019) and stock limits that deterred cold storage investments. Contract farming secures pre-agreed prices benefiting farmers in both rising and falling markets, with disputes resolved via conciliation boards and sub-divisional magistrates, bypassing courts. From a classical-liberal view, these reforms introduce competition, attract private investment, empower farmers with choices, and counter fears of corporate exploitation by preserving APMC options. They mark a vital step toward liberalizing agriculture, long hindered by protectionist laws.

**Key points:**

- Farm bills end APMC monopoly by allowing farmers to sell produce directly anywhere, anytime, to anyone, forcing mandis to compete.
- ECA amendments remove stock limits and price controls on key commodities like onions and cereals, enabling investments in storage and processing while stabilizing exports.
- Contract farming bill guarantees price assurance with safeguards like conciliation boards and SDM arbitration, giving farmers control without mandating corporate deals.

**By Swati Singh**

* * *

Three farm bills were passed in the Rajya Sabha this week. A wave of protests and media conversations have questioned the undemocratic way in which these bills were passed. Even though it’s valid to question the procedure, we must not lose sight of the most important question here – do these bills benefit the farmers? 

Let’s start by seeing what these three bills mean in the simplest of terms. Farm Bills, as they are being referred to, consist of these three Bills:

-   “*The Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020*” – Bypasses APMC Acts
    

-   “*The Essential Commodities (Amendment) Bill, 2020”* – Allows more freedom for stocking/storing farm produce
    

-    “T*he Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020*” – Allows for contract farming.
    

#### **What do these bills change, and more importantly, why do we need them in the first place?**

Long before Coronavirus took over the world, the two most pressing government regulations affecting our farmers were the Agriculture Produce Market Committee (APMC) Acts and the Essential Commodities Act (ECA) 1955.

An APMC is a marketing board established by the state governments with the intention to ensure that farmers are safeguarded from exploitation by private corporations. The APMC system was first established by the British to make sure that the textile mills in England could get cheap cotton from India. It was designed to exploit our farmers and this same Act was retained after independence with only a few tweaks.

According to the Act, the first sale of agricultural produce can occur only at the APMC mandis and only to government authorised traders. We have just over 7000 of these regulated mandis for all of India’s farmers (over 9 crores of them). Moreover, the APMC Acts prohibited farmers from selling directly to the customers, and direct intra-state and inter-state trade. **These limitations ensured a government monopoly over first sale and purchase of farm produce.**

*The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020* gives Indian agriculture a freer, more market-oriented structure. Make no mistake, it does not do away with government mandis. But government mandis will now have to compete with private trade areas. The farmer is now free to sell to whomever they want, wherever they want, and at a price of their choosing. If they are not happy with the price they get in the private market, they have the option of going back to the mandi.

A lesser talked about provision under the new Bill is that an electronic trading portal, e-NAM, will be set up by the government through which farmers and traders alike will be able to carry out digital transactions. How effective this will be, remains to be seen.

#### **The 2nd regulatory plague was the** ***Essential Commodities Act, 1955***.

Under this, the government had the power to categorise some commodities as essential and control and regulate their supply, production, distribution and price. This list included farm products like onions, edible oil, potatoes, sugar and rice. If the price of any of these commodities rose, the government could bring it down forcefully. Now, forceful price meddling is never good for an economy or for business in general. If the actual price of a product is Rs.100, selling it at Rs.60 does not make business sense. It not only causes instability but also the immense financial loss to the farmer.

Increase in prices would ideally give the farmer a chance to earn more, produce more. But due to government control on prices, that has never been possible.

The best example of this is India’s yearly onion crisis. Because it’s an Essential Commodity, the government bans all exports of onion due to rising prices at least once every year. This year, in-transit exports to Bangladesh were forced to come back and India’s perception as a reliable exporter of goods took a hit, yet again. The implications of these arbitrary export bans cannot be overstated. It disincentivises other countries to consider India a stable exporter and business partner.

Even domestically, due to the government’s arbitrary decision making, the farmer has to live in uncertainty. Between 2014 and 2019, the government changed the rules on [onion export 17 times](https://theprint.in/ilanomics/onion-export-ban-is-not-the-answer-it-hurts-farmers-indias-image-as-a-reliable-exporter/505051/#:~:text=Between%202014%20and%202019%20\(five,and%20reliable%20exporter%20of%20onions.), more than three times a year on average. Imagine the plight of an onion farmer in a country where the policy for his produce could change between the time he sows and harvests his onions.

Under this Act, the government can also impose stock limits, one amount of produce that a trader or dealer can store. They can conduct raids anytime and if a dealer is found storing more than the limit, their license can be revoked, a fine can be imposed and, in some cases, they can also be imprisoned. The idea behind this was to discourage hoarding at a time when the country faced an acute shortage of several commodities, including food grains. But much has changed since 1955, and India is no longer a victim of regular famines. Such a strong regulatory mechanism creates an environment for easy rent-seeking.

As a direct consequence of this Act, there was no incentive for investment in cold storage, processing and warehousing infrastructure; a much-needed innovation in our country’s agriculture sector. Thus, an amendment to this Act was long overdue.

So, what changes with the new Bill? It removes commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities. Along with this, it also removes private investors’ fear of excessive regulatory interference in their business operations.

Moreover, the freedom to produce, hold, move, distribute and supply farm produce will lead to the harnessing of economies of scale and attract private sector/foreign direct investment into the agriculture sector.

#### The final bill is ***The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020*****:**

This Bill essentially allows for contract farming. Contract farming means that farmers and buyers can directly enter into a written contract prior to production. So, a farmer can commit, in October, to a buyer that he’ll produce 10,000 Kgs of Rice at Rs. 100/kg, to be delivered in November, after the sowing cycle. Now, even if the price drops to Rs.80/kg in November, the farmer will still get Rs.100/kg.

It gets better. If the price rises, to say, Rs.120/kg, the farmer will be entitled to this price over and above the initially decided Rs. 100/kg. This ensures that the farmer benefits in both scenarios.

Now, one common cause of concern has been that the little farmer will be of no match to big corporates who’ll enter into contracts with them. In case there is a contract dispute, there’s no way a farmer could afford to get involved in the legal conundrum of fighting the corporates, right? The Bill provides enough safeguards for this as well.

The contract that the farmers enter into will have to list out a dispute settlement process. This will include two provisions:

a) a **conciliation board** has to be set up; which will include members representing both the farmer and the buyer. In case of a dispute, the matter will first be put in front of this board. 

b) If the board is not able to resolve the matter within 30 days, the farmer & buyer can approach the **sub-divisional magistrate (SDM)**. 

The SDM is an IAS officer who is the head official of a district subdivision. Approaching him would mean that the farmer will not have to seek redressal from our already overburdened courts. This is a local dispute redressal mechanism which makes it relatively easier for the farmer to seek justice in case something goes wrong. However, the fact that the dispute resolution mechanism is limited to the bureaucratic machinery could be problematic as there exists no provision for a judicial means to appeal decisions in the bill.

There is fear that big corporates will take over our small farmers. Well, if the farmer is not happy with the rates they get in a private market, they can simply go back to the APMC mandi. If we see a trend of lesser farmers going to mandis in the coming years, it won’t be because corporations will be forcing farmers to sell to them, it would be because they get better prices there.

Another concern has been that the farmer won’t have control over the price of his produce. This is a myth. In fact, only the government can and has forced the farmer to sell at a lower price than he wishes. Under this new system, the farmer has complete control over the price that he demands.

Also, it’s not that now the farmer will have to go around knocking on doors of big giants like Big Basket & Amazon. In fact, [even after signing a contract](https://pib.gov.in/PressReleasePage.aspx?PRID=1656929), the farmer will not have to seek out traders. The purchasing consumer will pick up the produce directly from the farm.

So, even though some farmers are worried about the entry of the private sector, history stands witness to the fact that privatisation has only improved matters for not one, but several industries. For instance, the privatisation of telecom services has ensured that Indians today enjoy the cheapest data services in the world! Countless consumers & companies in India have benefited from domestic & foreign competition.

The same can happen for agriculture. Why shouldn’t a farmer in Maharashtra be able to strike a deal with Big Basket, directly? Why shouldn’t Amazon Pantry, Walmart, Grofers etc. compete with each other to get the best farm produce from Indian farmers? Imagine the economic empowerment of farmers in a world like that! This is exactly what these three bills aim to achieve; more choice and freedom for our farmers.

Of course, it’s not that just because these restrictions are removed, the farmers will get rich instantly. The rot in agricultural markets runs deep in India, and it will take time for complete reform. For instance, we still need land reform in agriculture, as even today, farmers can only sell their land to other farmers.

These three bills, however, are the first, and thus a significant step in ensuring that the agriculture in India is liberalised. 

We have clung to the need for protecting our farmers from dangers that don’t exist anymore. The true shame is that it took 30 years and a global pandemic for us to muster the courage to free almost 60% of our population from the shackles of outdated & archaic laws. We still have a long way to go before people take up farming as a profession of choice, but we’re off to a good start.

*For more information, watch this video: [SO Basically- Episode 11 | Mandiyon ki Manmaani](https://spontaneousorder.in/so-basically-episode-11-mandiyon-ki-manmaani/)*

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## Badruddin Tyabji: Being a Secular, Liberal Nationalist

Original: https://www.spontaneousorder.in/p/badruddin-tyabji-being-a-secular-liberal-nationalist

Author: Spontaneous Order

Published: 2020-09-24T16:56:07.000Z

Topics: liberal-nationalism, indian-secularism, social-reform, historical-liberals

> India’s recent turn towards ethnic nationalism and democratic backsliding have led to a soul searching among the secularists. Some have argued that Indian secularism’s failure to resonate with the masses enabled ethnic nationalists to project it as a

**Summary:**

India's recent ethnic nationalism and democratic backsliding have sparked soul-searching among secularists, who some blame for failing to resonate with masses, but Badruddin Tyabji exemplifies early liberal nationalism parallel to Indian secularism, antithetical to ethnic visions. Born into a mercantile Muslim family, Tyabji studied law in Britain, practiced at Bombay High Court, and entered politics via municipal reforms: in 1871, he joined elites like Pherozeshah Mehta demanding local self-government, leading to the 1872 Municipal Act and his wins in 1875 and subsequent elections as part of the Mehta-Telang triumvirate. Elected to Bombay's Legislative Council in 1883, he backed Viceroy Ripon's reforms and the Ilbert Bill against racial discrimination. Founding Anjuman-e-Islam in 1876, he pushed Muslim education—including Hindustani, Persian, vocational training, and scholarships—while supporting women's emancipation via the Age of Consent Bill, rejecting sectarian politics. In 1885, he co-founded the pan-Indian Bombay Presidency Association, presided over INC's 1887 session, ensured 1888 resolutions avoided Hindu-Muslim disputes, and rejected Syed Ameer Ali's Muslim-only group, clashing with Sir Syed Ahmed Khan's separatism for a united, plural India. The author sees Tyabji's classical-liberal legacy in Nehruvian secularism's modus vivendi, critiquing its communitarianism yet highlighting its model for Muslim liberals today against majoritarianism.

**Key points:**

- Tyabji championed local self-government, winning Bombay municipal elections from 1875 after the 1872 Act spurred by 1871 elite advocacy.
- Through Anjuman-e-Islam (1876), he advocated inclusive Muslim education and social reforms like the Age of Consent Bill without prioritizing community over national interests.
- He co-founded the Bombay Presidency Association (1885) and presided over INC's 1887 session, enforcing rules to prevent sectarian disputes.
- Tyabji rejected separate Muslim politics, promoting a classical-liberal united India accommodative of diversity over Sir Syed Ahmed Khan's communal separatism.

**By Sanjeet Kashyap**

* * *

India’s recent turn towards ethnic nationalism and democratic backsliding have led to a [soul](https://theprint.in/opinion/dont-blame-only-english-elite-indian-secularism-failed-in-hindi-heartland-first/478481/) [searching](https://theprint.in/opinion/secularism-language-religion-ayodhya-bhoomi-pujan-ram-mandir-kashmir/475307/) [among](https://theprint.in/national-interest/modi-redefined-secularism-with-ram-mandir-as-hindu-voters-were-fed-up-of-sonia-left-version/477422/) [the](https://theprint.in/opinion/idea-of-india-wasnt-demolished-at-ayodhya-but-our-liberal-homes/472935/) [secularists](https://theprint.in/opinion/indian-secularism-still-has-a-future-if-followers-stop-blame-game-with-rss-rajmohan-gandhi/460265/). Some have argued that Indian secularism’s failure to resonate with the masses enabled ethnic nationalists to project it as a western, elite, and hence an unsuitable idea for a nation with a long civilizational past. However, modern as it may be, Indian secularism from its very genesis ran [parallel](https://frontline.thehindu.com/the-nation/roots-of-indian-secularism/article6233782.ece) to the liberal nationalism of Indian freedom fighters, both of which were antithetical to ethnic nationalism. Badruddin Tyabji belonged to this clique of early liberal nationalists who envisioned a secular India accommodative of its bewildering diversity.

Born in a family belonging to the mercantile class, Tyabji had access to education in the English medium and he went to Britain for a degree in law. This enabled him to capitalize on new opportunities generated by the consolidation of British administration in the western province in the late 19th century. His initial years in public life saw him as a barrister in the Bombay High court. A successful career at the Bar opened the doors of a political career for him to which he would turn soon.

As A G Noorani [notes](https://archive.org/details/BadruddinTyabji-English), Tyabji’s political career had a modest beginning. Not unlike many of his liberal compatriots, municipal governance formed the plank of his politics from where he would later be launched in national politics. The first major public appearance came with the public meeting demanding municipal reform and local self-government. On June 30, 1871, the who’s who of the native Bombay elites- Jamsetjee Jijibhoy, Navrozji Fardunji, Pherozeshah Mehta, Mahadeo Govind Ranade, and others- gathered in the Town Hall to make the case for devolution of power. The Municipal Act of 1872 and subsequent elections followed. Tyabji would go on to win the 1875 election and then the four subsequent ones. In Bombay politics, Tyabji was part of the formidable triumvirate which also included Pherozeshah Mehta and Kashinath Trimbak Telang. 

In 1883, he entered the Legislative Council of the Governor of Bombay. Himself a beneficiary of the liberal viceroy Lord Ripon’s local self-government reform in 1882, Tyabji’s classic liberal vision of political progress stressed the role of educated male citizens in handling local governance and dispensing civic duties. When the issue of Ripon’s term extension went up for a discussion, Tyabji supported him in line with other liberal moderates. Dadabhai Naoroji in February 1883 wrote to Tyabji about the need for Indian liberals to raise their voice in support of Ripon. Naoroji was [maneuvering](https://archive.org/details/BadruddinTyabji-English) in support of the liberal viceroy in response to the conservative attack on him for being too radical and mischievous.

Like many liberals of his time, Tyabji was charting sort of a middle ground in colonial-era politics. In focusing on both political demands and social reforms, liberals had to contend with the racist colonizers and conservative Indians. Indian liberals saw in the Enlightenment values a framework for progress and sought alliances with the liberal-minded British administrators and intelligentsia to advance their agenda. However, based on their bitter lived experiences, they were well-aware of the racist mindset prevalent among imperial rulers. The Ilbert bill controversy brought the racist elements of the imperial rule to the fore. Chagrined at the Anglo-Indian disapproval of trial under native judges in District and sessional courts, Badruddin campaigned with Pherozeshah Mehta and KT Telang in support of the bill. The controversy, however, went on to show that racial equality under the empire remained a pipedream, and the efforts at demanding self-governance would be rife with obstacles.

The challenge for liberals like Tyabji also lay in the domain of civil society, as mentioned earlier. Indian liberals of his age shared a belief in education as an indispensable tool for progress and women’s emancipation as part of the agenda for modernization. Like Rammohan Roy, Gopal Ganesh Agarkar, Dadabhai Naoroji, Behramji Malabari, R G Bhandarkar, and Gopal Krishna Gokhale, Tyabji also advocated social reforms directed at liberating women from socially-mandated restrictions. The battle, of course, was an uphill task in a traditional society, made even more fraught by conservative politicians like Tilak who wielded tradition and custom as a [political tool](https://www.cambridge.org/core/books/provincial-politics-and-indian-nationalism/2DF44D084A9BB0104FC1C18CCC055AA0). Illustrative of such tensions within the budding nationalist politics was the controversy over the Age of Consent Bill. While the campaign in favor of reform was steered mainly by Behramji Malabari, the bill received support from Tyabji. While the majority of the Muslim community was opposed to the change, Tyabji argued that the bill in no way offended the Muslim law and sent an [approving memorial](https://archive.org/details/BadruddinTyabji-English) to the government on behalf of his reformist organization. 

Founded in 1876, the reformist organization Anjuman-e-Islam was devoted to improving the lot of the Muslim community. It primarily focused on the promotion of education to enable the community to stake claim to newly created economic opportunities. In contrast to other leaders of his community who opposed the introduction of reforms that would benefit the literate Hindus, Tyabji did not want the progress of his community at the expense of the other. In his deposition before the Hunter Commission, he suggested the inclusion of Hindustani and Persian with western literature and sciences in the curriculum in order to attract Muslim pupils to the classroom. Other recommendations included provisions for vocational education and scholarship for poor students. As a general rule, the Anjuman did not take up political matters. The underlying logic went that most such initiatives affected Indians as a whole and as such should be considered by a pan-Indian nationalist body, not an organization representing the interest of a particular community. The Anjuman emerged as the influential voice of the aspirational and educated Muslim public, albeit one riven with a fractious divide. 

In the political domain, Tyabji’s next big move came in early 1885 as part of the Bombay triumvirate. Earlier in 1884, Mehta and Telang had come up with the idea of an active [political association](https://archive.org/details/BadruddinTyabji-English) focused on the Bombay province. They found in Tyabji an apt representative of the Muslim community with a liberal outlook. With the active involvement of Jamsetji Jijibhoy, the Bombay Presidency Association was thus established. The association was pan-Indian in outlook and lent support to AO Hume’s effort to arrange the inaugural session of the Indian National Congress. Local select committees of the association were spread across the country in Karachi, Surat, Lucknow, Bombay, Banaras, Madras, and Calcutta. Most notably, under the influence of Naoroji, the association sent Narayan G Chandavarkar to Britain to [endorse](https://core.ac.uk/download/pdf/154867863.pdf) the Liberal party candidates in the upcoming election.

The leaders involved in the association also emerged as prominent figures in the Indian National Congress which at this stage pretty much amounted to ‘three days of annual *tamasha*’. Tyabji presided over the third annual session aka the tamasha in 1887. As Noorani [notes](https://archive.org/details/BadruddinTyabji-English), at around the same time, a notable Muslim figure Syed Ameer Ali was trying to forge a Muslim political outfit exclusively concerned with advancing the community’s interest. The invitation for the Ali-led Central National Mahomedan Association’s conference was extended to Badruddin Tyabji as well. Adhering to a classic liberal position that privileged advancing of general national interest over sectarian ones in politics, Tyabji [denied](https://www.cambridge.org/core/books/recovering-liberties/DFFAC6CCD37E1844C0425E6B8866E443) the overture. In order to placate the Muslim suspicion of the Congress turning into a vehicle for Hindu domination, Tyabji ensured a provision in 1888 which put out of bounds for discussion any matter unanimously objected to by either Hindu or Muslim delegates. 

Tyabji also sparred with Sir Syed Ahmed Khan over differing visions of the nation and the place of the Muslim community within India. As C A Bayly [noted](https://www.cambridge.org/core/books/recovering-liberties/DFFAC6CCD37E1844C0425E6B8866E443), Sir Syed ‘had espoused a notion of community (quam) that effectively made it a nation separate from’ the common rights of all Indians in the public sphere irrespective of their religious dispensation. In contrast, Badruddin Tybaji espoused a [classic liberal view](https://www.cambridge.org/core/books/recovering-liberties/DFFAC6CCD37E1844C0425E6B8866E443) in which religion was to be detached from politics or sectarian interests in the public sphere were to be subjugated within the larger domain of a national system. In Tyabji’s view, it was possible for a united India with all its diversity to be sufficiently accommodative of Muslim citizens and hence Muslims ought to throw their lot with Hindu brethren in demanding political rights. Tyabji further clarified that this need not come at the expense of the group interest of the community. But, for him, a sufficient degree of mutual interest existed among different communities to warrant a vision of plural and united India, charting a liberal path to progress.

I would argue that the post-partition Nehruvian republic was built on the legacy of Tyabji’s intellectual foundations so far as secularism is concerned. Echoes of a form of modus vivendi liberalism that came to drive Nehru’s secular agenda could be seen in the 1888 Congress resolution which barred discussion over contentious matters. I think such acceptance of group rights and claims have had deleterious implications for individualism in India. But, on other hand, one could [deploy](https://www.cambridge.org/core/books/recovering-liberties/DFFAC6CCD37E1844C0425E6B8866E443) Chandras Kukthas’ conception of the [liberal archipelago](http://pdfs.semanticscholar.org/92ef/9660adf89391edcbb8831555095c876d848d.pdf) to argue that such communitarian approaches were needed to hold together as diverse a country like India. More importantly though, for Indian liberals today, Tyabji’s politics shows the possibility for a Muslim leader to be a secular and liberal nationalist in a country with a majority population of Hindus. In pushing back against religious majoritarianism, figures like Tyabji could be deployed in the liberal discourse to demonstrate the possibility of a better and inclusive vision of the Indian nation-state.

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

*Read more: [Prof S.Ambirajan’s Thoughts on Development Economics](https://spontaneousorder.in/prof-s-ambirajans-thoughts-on-development-economics/)*

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## India’s Language Conundrum: The Teacher is the Obstacle

Original: https://www.spontaneousorder.in/p/indias-language-conundrum

Author: Spontaneous Order

Published: 2020-09-21T12:56:41.000Z

Topics: national-education-policy, language-in-education, teacher-reform, bilingualism, school-choice

> In 1947, Britain packed up and left India, leaving behind absent-mindedly the English language and a headache for Indians. Ever since, we’ve been quarrelling over the place of English in our lives, particularly in what language to teach our children

**Summary:**

India faces a language conundrum in education: children learn best early in their mother tongue, but lack of English fluency by age 10 disadvantages them lifelong, especially for jobs. Gurcharan Das praises the National Education Policy (NEP) for elegantly navigating this by recommending mother tongue instruction up to grade 5 while allowing states, schools, and parents freedom, avoiding bans on English-medium schools that previously harmed states like Bengal, Gujarat, and UP. The classical-liberal solution is bilingual early education—mother tongue for arts, English for sciences—leveraging children's natural bilingualism, now feasible with technology like Hello English apps and rising teacher salaries. However, the core obstacle is incompetent teachers: 91% of 730,000 tested in 2012 failed basic eligibility, due to governance failures like bribe-based hiring and absenteeism, not policy. Post-1990s reforms, English democratized via private schools (47.5% of children enrolled, many at <Rs 1,000/month fees), shifting mindsets from colonial resentment to economic skill. BJP-RSS conceded on Hindi imposition amid parental demand. NEP promotes teaching as a calling via four-year BEd, but state governments must enforce merit-based hiring to enable bilingualism and prevent social divides like 'HMT' slurs.

**Key points:**

- NEP recommends mother tongue till grade 5 but preserves choice by not banning English-medium schools.
- Implement dual-medium instruction: mother tongue for arts, English for sciences, to achieve fluency by age 10.
- 91% of 730,000 teachers failed 2012 eligibility test; fix via merit-based hiring, not bribes.
- Private schools have enrolled 47.5% of children, democratizing low-cost English access post-reforms.
- State governments must address teacher absenteeism and quality for policies to succeed.

**By Gurcharan Das**

* * *

In 1947, a weary Britain packed up and left India, leaving behind absent-mindedly the English language and a headache for Indians. Ever since, we’ve been quarrelling over the place of English in our lives, particularly in what language to teach our children. The latest to join the debate is the National Education Policy (NEP), which to its credit, has skirted elegantly a political minefield, coming up with an answer that has satisfied almost everyone, offending only those who insisted on being offended. But the obstacle is the teacher.

At the root is a conundrum based on two facts: One, children learn best in the early years in their mother tongue; two, if a child isn’t fluent in English by age 10, she’s disadvantaged for the rest of her life, especially in getting a job. There’s plenty of research to support both facts. Nativists and educationists focus on the first, practical parents on the second.

The answer is simple: Teach the child in grades 1-5 in the mother tongue but also give a strong dose of English to ensure the child is fluent by 10. Since a child is naturally bilingual, this is possible. Have a dual medium of instruction – teach the arts in the mother tongue; the sciences in English. The practical problem is the average Indian teacher cannot teach, not just in English but in any language. 91% of 7,30,000 teachers tested in 2012 failed the basic teacher eligibility test. This is not a failure of policy but of governance.

NEP, through brilliant drafting, has given freedom to states, schools and parents. While strongly recommending learning in the mother tongue, it has refused to ban English medium schools. Its framers were mindful of damage done in Bengal, Gujarat, UP and other states that had banned English earlier in primary schools and decimated the futures of a whole generation. Having missed the IT revolution, all these states have made a U-turn. Mamata Banerjee destroyed communists in Bengal on this issue. Yogi Adityanath proudly reintroduced teaching English in primary schools in UP.

BJP-RSS, by accepting NEP, has in effect conceded defeat. One of its oldest, dearest projects was to rid India of English and make Hindi the national language. Just last year, Amit Shah pushed the case for Hindi. But the Sangh Parivar has lost its convictions – its own sons and daughters want to learn English and get a good job. Imposing Hindi today is a vote loser.

Sometime in the 1990s, India’s mindset changed. The constant whining against the colonial language died and English became an Indian language. A middle class of aspirers came up after the economic reforms. Confident in its own skin it regarded English not as an alien imposition, but as a skill to navigate the global economy. With the IT revolution, parents began to move their children from government to private schools that taught English. Today, 47.5% of India’s children are in private schools, making it the third largest school system in the world. In it, 70% of parents pay a monthly fee less than Rs 1,000 and 45% less than Rs 500. English has been democratised.

Meanwhile, English is even more dominant globally after the IT revolution. Linguists believe that whoever speaks a language owns it. They predict that India will soon have the world’s largest number of English speakers. Given the proliferation of Indian writing in English, they foresee Indian English becoming a widely spoken variant like American English.

NEP rightly reminds us, however, of the virtue of bilingualism and let’s hope we’ll do a better job this time. The last time, it led to a tragic social divide. The well-off kids, led by the Khan Market gang, went to English medium schools and aam admi’s kids in Sadar Bazaar went to Hindi (or regional language) medium schools. The former became brown sahibs and the latter were condemned to be ‘deaf’ in any serious discussion in business, government, or the university. HMT, ‘Hindi medium type’, became a slur. English became the new Sanskrit, the language of exclusion. In the charming film Hindi Medium, Irrfan Khan makes heartbreaking attempts to get his daughter into an English medium school. Frustrated, he says, “India is English, English is India.”

Back to the conundrum: The rise of English shouldn’t be at the expense of the mother tongue. Language is not just for communication; it’s a source of new ideas, new emotions. I cannot think and feel without language. There are certain emotions I feel in Punjabi that I don’t in English. Since a child is naturally bilingual, India should aim for bilingual instruction. Today, technology can help. There are a number of interactive apps on our phones, such as Hello English, that can make one fluent in English and become teacher aids. It’s also possible now to have bilingual teachers since teacher salaries have risen to respectable levels.

The NEP envisions teaching becoming a true ‘calling’ and has even proposed a four-year BEd professional degree. But India’s problem remains governance. Unqualified teachers have proliferated, hired not on qualifications but by paying a bribe. A chief minister is serving a 10-year jail sentence for selling teaching jobs to 3,206 teachers. Once hired and protected in this way, teachers don’t feel they need to teach and are routinely absent. Unless state governments fix this problem, no amount of good policy making will help the Indian child to realise her future.

*This article was originally published in [The Times of India.](https://timesofindia.indiatimes.com/blogs/men-and-ideas/indias-language-conundrum-the-national-education-policy-has-skirted-elegantly-a-political-minefield-but-the-obstacle-is-the-teacher/)*

*Read more: [SO Musings: Inflation vs. Morality](https://spontaneousorder.in/so-musings-inflation-vs-morality/)*

* * *

**About Gurcharan Das**

Gurcharan Das is an author and public intellectual and former CEO of Procter & Gamble India. After heading Procter & Gamble India and South East Asia, he became Managing Director, Procter & Gamble Worldwide (Strategic Planning). At 50, he took early retirement to become a full-time writer. He is the author of many acclaimed works, including India Grows at Night (which was on the Financial Times list of best books for 2013), The Difficulty of Being Good and India Unbound. He is a regular columnist at major newspapers including the Times of India and Dainik Bhaskar; and also writes periodically in the New York Times, Wall Street Journal, Financial Times, Foreign Affairs, and Newsweek.

## SO Musings: Inflation vs. Morality

Original: https://www.spontaneousorder.in/p/so-musings-inflation-vs-morality

Author: Spontaneous Order

Published: 2020-09-18T14:55:50.000Z

Topics: inflation, monetary-policy, economic-morality, government-redistribution

> With inflation rates recently on a rise in India- this week’s SO Musings will look at the very concept of inflation and how it disproportionately affects the market process and creates an artificial demand. Inflation is in its very nature immoral and un

**Summary:**

Henry Hazlitt's 1960 article 'Inflation vs. Morality,' excerpted in this Spontaneous Order musing, argues from a classical-liberal perspective that government-induced inflation is inherently immoral and unfair, functioning as forced redistribution of real incomes that benefits specific groups at others' expense. Inflation starts with targeted spending—such as on defense contractors, farmer subsidies, or social-security benefits—allowing recipients to buy at pre-inflation prices, which drives up costs for those whose incomes lag. This uneven process ensures total losses equal total gains, but victims never fully recover, fostering class divisions, resentment toward 'profiteers,' and perceptions of gains via luck, speculation, or political favoritism rather than merit or effort. Inflation demoralizes society: gainers prefer speculation and gambling over work and production, spending ostentatiously; savers abandon fixed-income assets; temptations for corruption and crime rise. Hazlitt cites the 1923 German hyperinflation as sowing seeds of Nazism through such dynamics. The post frames rising Indian inflation as highlighting these timeless market distortions and moral hazards of monetary manipulation.

**Key points:**

- Government-induced inflation redistributes real incomes unfairly by first benefiting specific groups like defense contractors or subsidy recipients, who buy at old prices and force up costs for others.
- Inflation creates class resentments as gains are seen as unearned via speculation or favoritism, not productivity.
- It demoralizes society by promoting gambling and speculation over work, eroding savings incentives, and increasing corruption.
- The 1923 German hyperinflation exemplifies how inflation sows political extremism like Nazism.

**By Spontaneous Order**

* * *

*With inflation rates recently on a rise in India- this week’s SO Musings will look at the very concept of inflation and how it disproportionately affects the market process and creates an artificial demand. Inflation is in its very nature immoral and unfair, as argued by Henry Hazlitt in his article ‘Inflation vs. Morality’ in the June, 1960 edition of The Indian Libertarian. Hazlitt argues that Government induced inflation is similar to forced redistribution where some are benefactors and others lose.* 

*Produced below is an excerpt from this article which highlights how inflation is a precursor to gambling and corruption*: 

Inflation never affects everybody simultaneously and equally. It begins at a specific point, with a specific group. When the government puts more money into circulation, it may do so by paying defence contractors, or by increasing subsidies to farmers or social-security benefits to special groups. The incomes of those who receive this money go up lint. They begin to buy at the old prices. But their additional buying forces up prices. Those whose money incomes have not been raised are forced to pay higher prices than before: the purchasing power of their incomes has been reduced. Eventually, through the play of economic forces, their own money-incomes may be increased. But if these incomes increase, are either less or later than the average prices of what they buy, they never fully make up the loss they suffered from the inflation. 

Inflation, in brief, involves the redistribution of real incomes. Those who benefit by it do so, and must do so, at the expense of others. The total losses through inflation offset the total gains. This creates class or group divisions. The victims of inflation resent the profiteers from inflation. Even the moderate gainers from inflation envy the bigger gainers.There is general recognition that the new distribution of income and wealth that goes on during an inflation is not the result of merit, effort, or productiveness but of luck ,speculation,or political favouritism. It was in the  tremendous German inflation of 1923 that the seeds of Nazism were sown.  

An inflation tends to demoralize those who gain by it as well as those who lose by it. They become used to “unearned increment.” They want to hold on to their relative gains. Those who have made money from speculation prefer to continue this way of making money to the former method of working for it. The trend in an inflation is  toward less work and production, more speculation and gambling. The profiteers from inflation tend to spend freely, frivolously, and ostentatiously. This increases popular resentment. The incentive for ordinary saving, in the form of savings-bank accounts,insurance, bonds or other fixed income obligations,  tends to disappear. The spectacle of quick and easy returns increases temptation to corruption and crime. 

The original text can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=819013580.pdf). 

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: Our Borders with China

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Basically Episode 12: Pandemic और School Fee Waiver की समस्या

Original: https://www.spontaneousorder.in/p/so-basically-episode-12-pandemic-school-fee-waiver

Author: Spontaneous Order

Published: 2020-09-15T15:18:21.000Z

Topics: education, school-fees, pandemic-policy

> https://youtu.be/yRPBJTEK9bA

**Summary:**

This post fragment is titled 'SO Basically Episode 12: Pandemic और School Fee Waiver की समस्या' (Pandemic and the Problem of School Fee Waiver) but provides no substantive content, only an about description of Spontaneous Order as a series exploring modern Indian history through liberal lenses critiquing pseudo-socialism and false political values alien to India's independence movement.

**Key points:**

- Post lacks main body discussing school fee waivers during the pandemic.

**By Spontaneous Order**

* * *

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## How Romanticization of Environment Does More Harm than Good

Original: https://www.spontaneousorder.in/p/how-romanticization-of-environment-does-more-harm-than-good

Author: Spontaneous Order

Published: 2020-09-15T14:56:16.000Z

Topics: environmental-romanticism, market-incentives, sustainable-development, urban-transport

> From spotting dolphins in the canals of Venice and peacocks on the streets of Mumbai to finding roads without pollution emanating vehicles, various newspaper headlines have been proclaiming that nature is healing. Humans are termed as the virus, as oppo..

**Summary:**

Romanticizing the environment harms policy analysis by framing humans as adversaries to nature, oversimplifying debates into binaries like trees versus development, and ignoring the inextricable link between human prosperity and conservation. The author critiques the 2019 Aarey Movement in Mumbai, where activists opposed tree-felling for a Mumbai Metro Line 3 car shed, reducing complex urban transport needs—strained infrastructure boosting private vehicles and pollution—to a narrow trees-vs-metro narrative, despite the Bombay High Court's dismissal of petitions. This view neglects how technological innovation, driven by profit motives, enables 'land sparing' to produce more from less land, preserving wilderness, as Matt Ridley argues. Economic freedom fosters higher incomes, freeing people for environmental pursuits. Romanticization dismisses self-interest, overlooking private examples like Godrej's Mumbai mangroves absorbing 6 lakh tonnes of carbon, and economic incentives like carbon taxes outperforming regulations, per a 2001 US EPA report saving $45 billion annually. Governments should set rules, not micromanage, to harness markets for sustainable development through meaningful trade-offs.

**Key points:**

- Romanticizing the environment oversimplifies policy debates into human-vs-nature binaries, as seen in Mumbai's Aarey Movement opposing metro infrastructure vital for reducing private vehicle pollution.
- Technological innovation driven by profit motives achieves environmental gains like land sparing more effectively than nature reserves.
- Private interests align with conservation, exemplified by Godrej's mangroves storing 6 lakh tonnes of carbon and EPA-documented economic incentives saving $45 billion yearly.
- Policies must recognize trade-offs between development and environment, leveraging markets and limited government for sustainable outcomes.

**By Priyanka Tibrewal**

* * *

From spotting dolphins in the canals of Venice and peacocks on the streets of Mumbai to finding roads without pollution emanating vehicles, various newspaper headlines have been proclaiming that nature is healing. Humans are termed as the virus, as opposed to Covid-19, who continue to destroy the environment for their greed. Without delving into their veracity, it is important to note that such arguments romanticize the notion of the environment. It portrays environmentalism as an ideal goal that everyone must strive for. As it is placed on a pedestal, morality seeps in and protecting the environment becomes a virtue. This, in turn, leads to negligence of fundamental issues and oversimplification of complex ones. Human activities and environment are seen as prosecutors and defendants perpetually pulling against each other. 

This view of environmentalism distorts the way we analyse policies. Environmental policies are only seen as either black or white i.e. for development or environment. This can be further argued while analysing the Aarey Movement that took place in Mumbai in 2019. In October 2019, the [Bombay High Court dismissed](<https://indianexpress.com/article/explained/aarey-tree-cutting-protests-supreme-court-shiv-sena-bjp-deve ndra-fadnavis-mumbai-metro-6058177/>) four petitions and allowed tree cutting in 30 hectares of Aarey land to accommodate a car shed for Mumbai Metro Line 3. The petitioners had questioned the propriety and legality of the BMC Tree Authority’s permission for the tree-felling and asked for Aarey to be declared a flood plain and a forest. Activists argued that construction of the car shed would pave the way for greater commercial exploitation of the area. The complex ideas of the environment and urban transport system was quickly reduced to trees vs. metro narrative. As [Sulakshana Mahajan explains in her article](https://www.epw.in/journal/2019/51/commentary/debating-metro-car-shed.html), the Save Aarey movement was single-mindedly focused on the loss of trees. It failed to take into account a holistic view of Mumbai’s urban transport which is strained and poor. The inadequate infrastructure leads to an increase in the number of private vehicles which has an adverse effect on air quality. However, such an in-depth analysis does not reach the public who protest keeping in mind a narrow binary. The romanticization of the environment strives to separate the environment from human actions. It sees environmental problems as consequences of human violations. It does not allow us to see the inextricable link between human development and environmental conservation. [Matt Ridley writes](<https://www.perc.org/2013/02/07/ecology-or-economics-which-has-done-more-for-our-environmental-futur e/>) ‘ What is really making a positive dent in the environmental arena is the unintended effects of technology rather than nature reserves or exhortations to love nature’. He has pointed out that technological advancement has led to land sparing which allows us to produce from less land and leave more for forests and wilderness. We must understand that human actions do not inherently go against the environment. Humans have innovated in the field of technology due to necessity and with the drive to earn profits. However, we can focus on higher ends only when our basic needs are satisfied. Developmental activities lead to growth, higher capita incomes and better infrastructure. As individuals in such societies have a higher standard of living, they do not have to worry about food, clothing, shelter or security. They are free to pursue goals such as environmentalism, technological advancement, etc. Such pursuits are more common in countries which are economically free. 

The romanticization of environmentalism leads to another problem. As it places the environment on a pedestal, the only acceptable actions that aim at conserving the environment must be altruistic ones. It fails to recognise self-interest as an important incentive. This affects policymaking and analysing. It does not see individual and private interests coinciding with environmental conservation. Through discussions that have taken place in e-colloquiums, webinars and classes that I have attended, it has become increasingly clear to me that the interests of private companies are seen diametrically opposite to environmental conservation. The generalized view of markets and private companies is that it only aims at generating profits and in this process pays no heed to the environment. However, there are several examples that prove this assumption wrong. Godrej owns several hundreds of acres of land in the [eastern suburbs](<https://www.hindustantimes.com/mumbai-news/vikhroli-mangroves-in-mumbai-store-6-lakh-tonnes-of-car bon-says-study/story-MVfT01IQTnIC2xU7zpUkcM.html>) of Mumbai. This land is home to thousands of mangroves which absorbs nearly six lakhs tonnes of carbons. It is one of the largest private mangrove forests in the State. Moreover, markets and individuals can be effectively incentivised to reduce their carbon footprints. The United States Environmental Protection Agency (EPA) published a report in 2001 assessing the role of economic incentives to encourage companies to adopt greener practices as opposed to governmental regulation. The report states that incentives often generate beyond what is possible for traditional regulations. The economic incentives that have been mentioned are pollution fees, emission permit fees, carbon tax, subsidies, imposing liability for natural resource damage, etc. The savings from economic incentives reach $45 billion annually. The role of the government becomes important as the market fails to prevent externalities. However, the government must be present to set the rules of the game not regulate it. Though individuals may not have a favourable view of the government, they still demand active intervention. This has led to an increase in bureaucratic apparatus which is largely inefficient and corrupt. 

Our romanticized idea of the environment is a relic from the past. Neither can we go back to that idea nor is it desirable. Humans are a part of nature and their demands cannot be isolated. Human development and environmental conservation are linked and thus, our future policies must involve meaningful trade-offs. We must aim at formulating policies that incorporate ideas of sustainable development. In order to bring about sustainable change, we must examine the role of the markets in being a catalyst for economic development and environmental preservation.

*Read more: [Prof S.Ambirajan’s Thoughts on Development Economics](https://spontaneousorder.in/prof-s-ambirajans-thoughts-on-development-economics/)*

* * *

**About Priyanka Tibrewal**

## SO Musings: Our Borders with China

Original: https://www.spontaneousorder.in/p/so-musings-our-borders-with-china

Author: Spontaneous Order

Published: 2020-09-11T12:00:00.000Z

Topics: india-china-border, panchsheel, territorial-claims, foreign-policy

> The roots of the border dispute between India and China go back to the 1950s. Although the mood in the Indian diplomatic circles was upbeat after the Panchsheel agreement in 1955, relations started going south towards the end of the decade. The Chinese ..

**Summary:**

In a 1959 article 'Our Borders with China' published in Indian Libertarian, M.A. Venkata Rao warns of China's surreptitious territorial claims on Indian lands, as depicted in Chinese maps and a recent Soviet journal New Times issue showing parts of Ladakh, Sikkim, Bhutan, and the North East Frontier Agency (NEFA) tracts of Assam as Chinese territory. He critiques the Indian government's optimistic reliance on the 1955 Panchsheel agreement with China and Russia, which promised peaceful coexistence and non-interference, arguing that reissued maps reveal fading 'flowers of Panchsheela' amid communist expansionism following Tibet's annexation. Rao highlights Chinese responses to Indian protests—dismissing maps as outdated while retaining claims—as implicit assertions of sovereignty over these areas. From a classical-liberal standpoint, he urges India to take a firm stand: instantaneously repudiate China's claims, unambiguously reassert India's historical border-line to all governments and global publics, and broadcast this position to preempt future disputes and safeguard territorial integrity against the 'international jungle' realities.

**Key points:**

- Chinese maps and a Soviet New Times publication claim Sikkim, Bhutan, and NEFA as Chinese territory, signaling expansionist intent post-Tibet annexation.
- Panchsheel's principles of non-aggression and non-interference are undermined by China's map practices and Soviet endorsement.
- India must immediately repudiate Chinese claims and reassert its historical borders to all world governments and publics.

**By Spontaneous Order**

* * *

*The roots of the border dispute between India and China go back to the 1950s. Although the mood in the Indian diplomatic circles was upbeat after the Panchsheel agreement in 1955, relations started going south towards the end of the decade. The Chinese started to lay claim on parts of Ladakh and Arunachal Pradesh (then NEFA) first in their maps and then on the ground through military incursions, eventually leading to the India-China war in 1962.*

*This piece titled ‘Our Borders with China’ was published in the magazine Indian Libertarian on January 1, 1959  written by Shri M. A. Venkata Rao after a map was published in a Soviet journal showing parts of India as Chinese territory. He sees through the Chinese plan of eventually claiming parts of Ladakh, Sikkim and Arunachal Pradesh as their territory and advocates taking a firm stand by the Indian government to safeguard India’s historical territorial interests.*

### MAPS AND CHAPS! 

Our northern borders run with the Chinese all along the Himalayan North from Ladakh to the northern tip of Burma abutting Assam. Now that Tibet has been frankly annexed by Red China, we are confronted with China all along the immense extent of the boundary. A fresh issue of a map of this area in Moscow’s journal New Times recently became the occasion for an excited hour of questioning in the Lok Sabha. The Indian public had noticed with misgivings earlier issues of maps of the area by China in which Sikkim and Bhutan and the North East Frontier Agency Tracts of Assam were shown as part of Chinese territory. Indian official protests and inquiries elicited the reply that they were old maps or reissues of old maps, and that the Red Government had not yet given their mind to a consideration of their border in these areas; and till then no importance need be attached to any differences with Indian maps and claims.

### PANCHSHEELA AT WORK? 

This attitude of the Red Government of China poses an intriguing problem to Indian diplomacy and brings into question the supposed wisdom and efficacy of the much-boosted foreign policy of Panchsheela which is supposed to have been ratified by China and Russia. Indeed it is held out to be an example to the rest of the world in the matter of peaceful intentions, non-aggression and mutual non-interference with each others internal affairs. Now these maps imply a surreptitious claim for a considerable part of Indian territory which may be raised explicitly and in earnest any time suitable to the Chinese. The fact that the maps have been reissued in The New Times of Moscow registers the endorsement of the Chinese claims on Indian lands by Soviet Russia. Thus are the flowers of Panchsheela fading before our eyes, and the grim realities of the international jungle revealed to our champions of peace and ahimsa. The Government of India, to judge from Nehru’s replies in the Lok Sabha, have no answer to this situation in their diplomatic bag. 

### WE MUST ACT BETIMES AND REGISTER OUR HISTORIC CLAIMS

It is to be realised that the answer of the Chinese Government to the Indian protest to the effect that till they pay attention to this border question, they propose to retain their version of the matter and show part of Indian territory as coming under their political jurisdiction means that they do in fact recognise the Indian border-line as shown in Indian maps. This means that according to China, Sikkim, Bhutan and the NEFA Tract belong, not to us but to China! This claim should instantaneously be repudiated and our rejection of it and reassertion of our border-line as understood by us should be intimated unambiguously to all the Governments of the world. It should be broadcast to the public of all nations, so that when the subject comes alive in a dispute with China, the world should know the background of India’s rights. 

To read the full article, visit page number 4 on this [link](http://indianliberals.in/~_admin/pdflanguage?id=229669191.pdf).

*[IndianLiberals.in](http://IndianLiberals.in) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

*Read more: [Prof S.Ambirajan’s Thoughts on Development Economics](https://spontaneousorder.in/prof-s-ambirajans-thoughts-on-development-economics/)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Prof S.Ambirajan’s Thoughts on Development Economics

Original: https://www.spontaneousorder.in/p/prof-s-ambirajans-thoughts-on-development-economics

Author: Spontaneous Order

Published: 2020-09-10T12:25:35.000Z

Topics: development-economics, indian-economic-policy, classical-liberalism, population-control

> Prof Ambirajan had a profound understanding of the subject of development economics before many theories evolved around it.

**Summary:**

The post highlights Prof. S. Ambirajan's classical-liberal critique of post-independence Indian development economics in his 1959 book 'The Grammar of Indian Planning,' challenging Nehru-era centralized planning and socialism. From a perspective emphasizing scarcity, opportunity costs, spontaneous order, liberty, individual freedom, private property rights, free trade, and institutional frameworks for good governance, Ambirajan argued these principles are essential for competition, choice, and efficiency in delivering public or private goods. He prophetically warned that economic development, via industrialization, entrepreneurship promotion, resource optimization, and infrastructure in communications, railways, health, hygiene, and education, accompanies and remedies rapid population growth—'economic development alone can be the effective remedy to the threat of overpopulation'—rather than coercive birth control, abortion, or deficit financing, which prove dangerous. Governments' misplaced focus on population control has failed, with only 13 states achieving below-replacement fertility by 2018 and states like Bihar lagging, while neglecting growth. Advocating limited state power, profit motives, and self-reliance over foreign capital dependence, his insights critique ongoing policy flaws amid India's economic slowdown, border issues, trade restrictions, and pandemic challenges.

**Key points:**

- Economic development, not coercive birth control, is the effective remedy for overpopulation, as rapid population growth accompanies prosperity.
- Promote entrepreneurship, private enterprise, and industrialization to leverage division of labor and increasing returns for higher per capita productivity.
- Prioritize state investment in communications, railways, health, hygiene, and education to raise productivity in early development stages.
- Avoid deficit financing without firm monetary controls and over-reliance on foreign capital; emphasize self-reliance and judicious democracy-state balance.

**By Chandrasekaran Balakrishnan**

* * *

Development economics is a subject which has evolved over the years primarily post World War II both in terms of theorizing concepts, galvanizing methods, and assumptions over societies, state and markets functions. It also invented tools to frame public policies across the world to promote the development of a gamut of things in society in order to achieve prosperity. 

Over the years, some intelligentsia within the domain narrowed down the focus of   development economics by confining it as a system only for developing economies, now fashioned as emerging economies. Now, development economics has been subdivided into many branches of economics. The subject is still growing with specializations. The latest one is behavioural economics which aims at a new dimension of inquiry into causes from poverty to prosperity.

After independence especially in countries like India, the policies and methods were structured around development economics through political dictates. This notion was a considerably flawed framework at least from the established basic economics principles like scarcity of resources, demand, and supply, opportunity costs, spontaneous order, liberty, individual freedom, private property rights, trade is positivism game, compatibility of democracy and economic freedom, the institutional framework for good governance to deliver services to people, etc. These were all necessary to promote competition, choice, and efficiency in an economy, whether a nation aims for public goods or private goods.

However, in a controlled regime of governance like the one which was under Jawaharlal Nehru, the compartmentalization of policies would impede the progress of any society irrespective of growth of population, lack of natural resources, turbulent political and social systems, etc. Further, in the process to glamorize the art of politics to people on democracy, the goal of building independent institutional networks to promote structural transformations for economic development and  growth were hugly undermined for decades after independence. 

Against this background, it is interesting to note Professor Srinivasa Ambirajan’s thoughts on the social and economic development of post-Independent India. He had a profound understanding of the subject of development economics before many theories evolved around it. He had never narrowed either his research or his teaching of economics for several decades both in India and abroad. He had written copiously on the nexus of the interdependence of public policymaking, economic growth, and development, development of social, cultural, and history of economic thoughts for about half a century.

His first major book was **“The Grammar of Indian Planning (1959)”** which is a classic treatise on the Indian political economy of the first decade post-independence. It has systematically dealt with major structural issues and challenges of developing economies, breaking away from the dogmatic thinking of centralized planning, less tested ideas of socialism and communism. He was an awed original thinker like V.S.Srinivasa Sastri, B.R.Ambedkar, Rajaji, Prof.B.R.Shenoy, etc.

Prof Ambirajan had provided a profound analysis of the survey of literature in the book. His prophetic warnings on key issues such as population growth and control measures, economic growth and development, pitfalls of deficit financing, promotion of entrepreneurship with limited power of State, liberty, freedom, etc. came true across the developing economies after decades of socialist command and control regimes failed.

On the growth of population, Prof Ambirajan firmly believed that *“Generally a rapid rise in population accompanies rapid economic development”* and *“economic development alone can be the effective remedy to the threat of overpopulation.”* According to him, *“Economic development is but one of the many factors that determine a country’s or a community’s prosperity. Without social betterment and general cultural progress, mere economic development can have no meaning for us.”* 

And he perceptibly warned the policymakers that *“drastic measures to cut birth rates like birth control, abortion, etc. will not help to alleviate human misery; the remedies may actually prove worse than the disease!”* He also warned the leaders at the helm of affairs that *“Can we efficiently industrialise — for without industrialisation the problem of our age-long poverty cannot be solved — and at the same time avoid the evils of overcrowding, uprootedness, slum-life, bad sanitation, disease, ignorance, gross inequality in standards of life, and chronic insecurity?”*

Still, Governments in India spend thousands of crores towards population control measures even after the efforts of many decades but with little outcomes. For instance, just 13 states were able to achieve below replacement fertility levels as of 2018, and states like Bihar have to go for years to reach replacement fertility. Instead, the efforts could have been systematically focused on economic and social development fronts which could have effectively arrested the growth of fertility.

According to Prof Ambirajan *“wealth gives comfort and security; it also provides more leisure. Because economic growth increases efficiency, the necessities of the people could be produced more easily and in a much shorter period, and hence there will be plenty of time or leisure for various liberal arts like music, painting, literature, dance, drama, etc. to flourish. Economic growth enables people to have the advantage of more goods and services, more and more of them, without any foreseeable limit of exhaustion. Thus new types of goods are produced and sold in highly developed economies, and inventive ingenuity, advertisement, and pressure publicity give currency to these newer and still newer goods which people are most eager to possess. Because fewer people are engaged in the production of the necessities, the rich modern societies are able to spare more people for other vocations like medicine, law, music, teaching, etc. Again, man being a rational and intelligent being…gains progressively greater control over his environment and thus increases his freedom”*.

Countries like India after independence were not able to use natural and human resources towards achieving higher economic growth and this was observed in 1959 by Prof Ambirajan that *“what we witness in the underdeveloped countries today is the sorry spectacle of the misuse of the natural resources. Not until resources are used carefully and to the fullest extent can real economic growth be achieved.”* Moreover, he believed that *“it is also necessary to encourage the entrepreneurial class and thus give incentives to private enterprise…. The available quality and quantity of entrepreneurship is thus a crucial factor in the economic development of any country.”* 

He also vividly noted that *“as there are immense possibilities of improving the agricultural and industrial productivity of the underdeveloped countries, more attention could be given to the increase of the per capita production than to the decrease of the birth rates.”* Further, he states that *“another line of action to fight overpopulation would be to embark on industrialisation. In the sphere of industrialisation the law of increasing returns comes into operation, and every increase in population will make the process of industrialisation more profitable, because with more people, a more extensive application of the principle of ‘ division of labour ’ would be possible.”*

Physical and social infrastructure developments are inevitable for higher economic growth. Thus, Prof. Ambirajan states that sectors like *“Communications, Railways, Health, Hygiene, and Education are some of the important items which, if expanded, will greatly raise the productivity per man. Hence it is the duty of the state to give top priority to these items in the initial stages of development.”* Alas, these essential services are still lacking in most parts of the country and hence result in poor productivity. Moreover, he believed that *“scientific and technical education and administrative or managerial efficiency are two necessary factors in rapid economic development.”*

Free enterprises were not allowed even to the extent of reasonable terms during the first four decades after independence in India. Prof Ambirajan strongly advocated that *“it is true that profit is the main motive force in the private enterprise system. It is no less true that a completely state-controlled economy has little to fear from business cycles or inflation, even if it also means the denial of freedom. Nevertheless, the profit motive has after all been powerful enough to develop some countries into great economic powers. Hence the underdeveloped countries should utilise this motive also to increase the pace of economic development. Again, for the fullest self-expression of man, the play of freedom, however hedged in by unavoidable controls, is quite necessary. A judicious mixture of democracy and state control will therefore be the ideal type of economic government for the underdeveloped nations.”* 

After seven decades of independence, India is again at the crossroad of a historic economic slowdown. It is also encountering many systemic structural challenges amidst the COVID-19 pandemic, border disputes, imposing bans, and restrictions on most of the trade and commerce from China, USA, etc.

It would be apt to remember the prophetic words of caution by Prof Ambirajan who said this way back in 1959 *“the climate is rather unfavourable today for the unrestricted migration of capital from the richer advanced to the poorer undeveloped countries.”* 

Prof Ambirajan warned that *“it must also be remembered that however much foreign capital may be beneficial to the economic progress of a country, undue reliance should not be placed upon it. Self- reliance should always come first. People must be ready to undergo hardships within measure before they can enjoy the fruits of economic development. At best foreign capital could be only complementary to fully mobilised local capital, not take its place entirely.”*

Further, macroeconomists across the world seem to agree that governments should spend more to fight against the pandemic and on welfare measures to create demand, etc. Most politicians tend to forget what Prof Ambirajan cautioned decades ago *“the dangers of deficit financing could be kept in check. But, without such a firm and clear policy regarding physical and monetary controls, and without continuity in that policy over a period of years, deficit financing would prove very dangerous indeed — dangerous to the economy and fatal to the democratic way of life.”* The excessive expenditure may be lucrative for the short term. However, looking at medium and long term perspectives the deficit financing would generate an economic crisis like the one witnessed during the 1990s.

*[IndianLiberals.in](http://IndianLiberals.in) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

*Read more: [SO Musings: Land Reform-True and False](https://spontaneousorder.in/land-reform-true-and-false/)*

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## The Existential Imperative of Education Policy

Original: https://www.spontaneousorder.in/p/the-existential-imperative-of-education-policy

Author: Spontaneous Order

Published: 2020-09-08T15:29:57.000Z

Topics: education-policy, indian-democracy, political-philosophy, nep-2020

> Plato’s Republic describes a process by which a well-governed state degenerates through constitutional forms: aristocracy, timocracy, oligarchy, democracy, and tyranny. A Platonic reading of history suggests that India may be on a trajectory to fulfil t

**Summary:**

Drawing on Plato's Republic, Roshan Gandhi argues that India is tracing the philosopher's sequence of constitutional degeneration from aristocracy (early dynasties) to timocracy (frequent wars), oligarchy (corrupt politicians lining pockets amid rich-poor resentment and unfair elections), and now edging toward democracy as mob rule, risking tyranny. Plato viewed uneducated masses as unfit for self-governance, a concern echoed in modern terms by Condorcet's Jury Theorem: in the world's largest democracy, ensuring average voters exceed 50% accuracy in 'correct' decisions—defined as evidence-based, accountability-focused choices—is vital, with education boosting this probability exponentially. While Ambedkar doubted literacy's link to intelligence, India's Constitution mandates universal education, aligning with classical-liberal support for state-funded education as a public good to empower informed voting and liberal democracy, distinct from socialist motives. Without quality education to hold leaders accountable, India faces Platonic tyranny, symbolized by lawlessness like stray cattle. The New Education Policy (NEP 2020) offers pedagogic ideals but neglects systemic flaws; policymakers must prioritize fixes as existentially imperative to halt the spiral.

**Key points:**

- India mirrors Plato's oligarchy with ubiquitous corruption, vote-buying, and class tensions, transitioning toward mob-rule democracy.
- Education raises voter decision quality above 50% per Condorcet's Jury Theorem, enabling better democratic outcomes in a vast electorate.
- Classical liberals endorse state-funded education as a public good for informed citizenship and accountability, averting tyranny.
- NEP 2020 fails to address systemic education problems, requiring urgent reassessment to safeguard democracy.

**By Roshan Gandhi**

* * *

Plato’s *Republic* describes a process by which a well-governed state degenerates through constitutional forms: aristocracy, timocracy, oligarchy, democracy, and tyranny. A Platonic reading of history suggests that India may be on a trajectory to fulfil the Greek philosopher’s problematic prophecies of 375 BC. Effective education policy may avert this fate.

The best states, according to Plato, begin as hereditary *aristocracies*, ruled by trained philosopher-guardians. This corresponds to early India’s dynasties. However, things go awry: class warfare occurs, or philosopher-guardians fail to raise their children as good rulers. Aristocracy declines into *timocracy*, where the government pursues ‘honour’ – a state better suited to rule by the war-minded than by philosopher-guardians. This has parallels in India: various dynasties engaged in increasingly frequent wars, culminating in the Empire with a ‘timocratic’ tension between foreign elite and native majority. Eventually, timarchs circumvent laws to spend money on themselves. Others copy until the majority of people behave this way. Wealth becomes glorified, and poor and rich live together but plot against one another. Plato refers to this as timocracy’s descent into *an oligarchy*.

The post-oligarchy phase in Plato’s sequence is *a democracy*, but according to *The Republic*’s definitions, India would more accurately be categorised as an ‘oligarchy’. Politicians use power to line their pockets. Like Plato’s oligarchs; corruption is ubiquitous; his notion of poor and rich living together with mutual resentment seems prescient, and elections are of questionable fairness: we hear of parties buying votes and bussing villagers to polls.

We should be grateful that India is not yet a ‘democracy’ in Plato’s sense, as he makes little distinction between democracy and ‘mob rule’. Oligarchy deteriorates into democracy because people desire wealth: the poor revolt, expelling opponents and chaotically assigning positions of power by lot. Plato would likely have interpreted modern India as an oligarchy beginning the undesirable transition to democracy, where early signs of mob rule are apparent not so much in religiously-motivated assault as in the readiness of the government to turn a blind eye; not so much in violent protests as in the divisive legislation that stokes them.

It would be reasonable to question Plato’s assertion that democracy is mob rule. Some modern democracies have flourished as peaceful economic powerhouses – imperfect, yet ‘better than all other forms of government tried’, as the adage goes. Practicalities can perhaps explain the difference between Plato’s and contemporary democracies in the ancient world, where large institutions to facilitate democracy were inconceivable. Predominant among these is *education*: Plato felt an uneducated citizenry could not make governance decisions. When practical constraints ensured that only the elite could afford education, it seemed preposterous to Plato that anyone other than trained aristocrats could administer affairs of state.

Whether universal education is a prerequisite for a successful democracy is a matter of debate. Ambedkar opposed the idea, writing in his memorandum to the Simon Commission (1928):

*Those who insist on making \[literacy\] a condition precedent to enfranchisement, in my opinion, commit two mistakes. Their first mistake consists in their belief that an illiterate person is necessarily an unintelligent person. Their second mistake lies in supposing that literacy necessarily imports a higher level of intelligence or knowledge than what the illiterate possesses…*

This did not stop his Drafting Committee from including universal education in the Indian Constitution. Their motivation might have been a socialistic ideal of state duty to supply public services. However, many libertarians agree that education should be state-funded – albeit with the alternative motivation that education is a public good underpinning liberal democracy by empowering citizens to make informed voting decisions.

Regardless of whether education is a *necessary* condition for a successful democracy, it helps. Condorcet’s Jury Theorem shows that if the average voter has a greater than 50% chance of voting ‘correctly’, then a greater number of voters yields a greater chance of ‘correct’ voting outcomes. The converse is also true. So, given that the effects increase with the number of voters, the world’s largest democracy ought to prioritise being on the right side of the 50% probability mark of average voters’ decision quality. Education increases this likelihood.

The ‘correctness’ of any decision is inherently subjective, but some broad principles always apply. Correct voting decisions are informed by relevant evidence, hold the government accountable, and select representatives to improve the status quo – even if the perception of evidence, accountability, and improvement varies by each voter’s subjective reality. Education facilitates better democratic outcomes by raising the probability that decisions abide by these criteria.

With an education system that better empowers citizens to hold leaders accountable, India’s democracy could escape Plato’s downward spiral. But failure to deliver quality education could condemn India to Plato’s degenerative fate. We must heed his warning that democracy’s “insatiable desire for freedom” pushes it into *tyranny* when laws are ignored until cattle “roam freely and proudly along the streets” (familiar to the Indian reader?). Quality education is thus more than a desirable social good: it could guard against a Platonic descent into tyranny.

Commentary on the New Education Policy (NEP 2020) has welcomed its idealistic pedagogic vision but rightly criticised its failure to make the more important addressal of deeper systemic problems afflicting education. Policymakers must reassess the NEP in the context of the relationship between education, democracy, and tyranny. They may find that fixing education’s underlying problems is not merely desirable, but existentially essential.

*Read more: [Nudging – A tool for liberal policymaking](https://spontaneousorder.in/nudging-a-tool-for-liberal-policymaking/)*

* * *

**About Roshan Gandhi**

Roshan Gandhi is Director (Strategy) of City Montessori School – the world’s largest city-school, with 57,000 students. A graduate from the University of Oxford with an MBA in Educational Leadership from University College London (UCL), he has worked in and continues to consult for various education technology companies, and is a frequent speaker in national education fora. He has been associated with CCS as a Colloquium Moderator and iPolicy volunteer faculty.

## SO Musings: Land Reform-True and False

Original: https://www.spontaneousorder.in/p/land-reform-true-and-false

Author: Spontaneous Order

Published: 2020-09-04T16:10:18.000Z

Topics: land-reform, private-property, agricultural-policy, zamindari-abolition

> The State has for very long had a strong presence in the agricultural markets in India. When the government recently passed the ordinances related to Essential Commodities Act, contract farming and APMCs, it fulfilled the long standing demand by agricul..

**Summary:**

The post critiques India's post-independence agrarian reforms, particularly the 1950s zamindari abolition, as tyrannical and uncivilized, driven by socialist slogans like 'land to the tiller' that destroyed private property rights under the guise of eliminating exploitative middlemen. Quoting M.A. Venkata Rao from the May edition of Indian Libertarian, it argues that these reforms replaced zamindar exploitation with state exploitation, culminating in failures like the 1973 nationalization of wholesale wheat trade, which was quickly reversed. From a classical-liberal perspective, socialism's abolition of private property is inherently flawed; instead, progress requires limiting property to curb monopolies via civilized means such as cooperative societies for capital access, compulsory sales above land ceilings at market rates to peasant bidders, and land mortgage banks providing spot cash to zamindars, recoverable at low interest—the Danish model of redistribution. The recent ordinances on the Essential Commodities Act, contract farming, and APMCs rightly fulfill long-standing demands to liberate farmers from state control in agricultural markets, echoing pre-1950s demands by experts and organizations like Shetkari Sanghatana.

**Key points:**

- 1950s zamindari abolition destroyed private property rights through force and inadequate compensation, paving the way for greater state control in agriculture.
- The 1973 nationalization of wholesale wheat trade failed spectacularly and was reversed, exemplifying the harms of socialist interventions.
- Civilized land reform should use cooperatives, market-rate ceilings, and land mortgage banks like the Danish model, preserving property rights.
- Recent farm law ordinances correctly free Indian farmers from state-controlled agricultural markets.

**By Spontaneous Order**

* * *

*The State has for very long had a strong presence in the agricultural markets in India. When the government recently passed the ordinances related to Essential Commodities Act, contract farming and APMCs, it fulfilled the long standing demand by agricultural experts and farmer organizations like Shetkari Sanghatak of freeing up the Indian farmer from State control.*

*The beginnings of this State control of agri-markets goes back to the agrarian reforms undertook by the government in the 1950s. Though they had the noble intention of doing away with the exploitative class of ‘absentee zamindars’, they led the way to a slippery slope which climaxed with the nationalization of wholesale trade in wheat in 1973. Expectedly, the move failed spectacularly and had to be recanted.*

*In this article published in the May edition of **Indian Libertarian,** Shri M. A. Venkata Rao criticizes the agrarian ‘reforms’ of the government as uncivilized and tyrannical. He is prescient when he writes that this move will only replace zamindar’s exploitation with State’s exploitation and the Indian farmer will be worse off.* *Read on:*

The Zamindari System has been abolished by law i.e. by force. Though there is a case for such abolition of the artificial class of revenue collectors for Government (created by the British long ago as a convenience of administration in Northern India,) there is none for the manner in which it was put through under the impulsion of ill-digested slogans. The guiding slogan was furnished by communist technique, namely “land to the tiller.” The appeal of the cry derives plausibility because of the idea that there should be no middlemen or at least, unnecessary middlemen, between the cultivator and the State. It is a question whether the class of Zamindars was really one of unnecessary middlemen. However, the great harm that the measure did to the stability and progress of society flows from the blow it gave to the institution of private property. Socialism and communism are committed to the abolition of private property, and it was in pursuance of socialism that the Zamindari was abolished with inadequate compensation.

The basic idea of socialism, namely the abolition of private property is inherently wrong. What is necessary for progress is only the limitation of private property to prevent monopoly and unjust use or non-use. If the Zamindar was not able to cultivate all his lands, or was unable to afford the capital necessary for improved methods of agriculture, all that was necessary was to create institutions like co-operative societies to· make such facilities available. And to help those who were able to cultivate land, but were unable to obtain it on account of the paucity of such land, open to purchase on the free market, the State could have imposed ceilings above which lands were to be sold compulsorily to peasant bidders at the market rate. Land mortgage banks could have paid spot cash to Zamindars, recovering it with a low rate of interest from the purchaser over a long period of time. This was the Danish way of redistribution of land. It was a civilised way without the destruction of property rights in toto and the destruction of a whole class.

To read the full article, visit page number 5 on the link [here](http://indianliberals.in/~_admin/pdflanguage?id=18562756.pdf).

*[IndianLiberals.in](http://IndianLiberals.in) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: *[States Should Follow Karnataka in Land Reforms, Opposition is Unfounded](https://spontaneousorder.in/states-should-follow-karnataka-in-land-reforms-opposition-is-unfounded/)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Nudging – A tool for liberal policymaking

Original: https://www.spontaneousorder.in/p/nudging-a-tool-for-liberal-policymaking

Author: Spontaneous Order

Published: 2020-09-03T15:51:32.000Z

Topics: nudging, behavioural-economics, public-policy, liberal-policymaking

> Nudge is being used by governments all across the world for better implementation of public policies in the area of health, education, sanitation, environment protection, etc.

**Summary:**

The post advocates nudging from behavioural economics as a classical-liberal tool for policymaking, enabling governments to influence behaviour effectively without coercive mandates, punishments, or restrictions on liberty. It contrasts traditional rationalist policies, which assume perfect rationality and often fail—like India's APMC Act that restricted farmers to mandis, intended to protect them but hindering livelihoods until recent COVID amendments—with low-cost nudges that respect choice. Examples include Maharashtra's chalk circles for 1-metre social distancing at shops, far more effective than mere guidelines, and suggested posters using social pressure for mask-wearing over fines. Globally, the UK's Behavioural Insights Team boosted recycling via deposit schemes: amid 14 billion litres of soft drinks (234 litres per person in 2007), Irn-Bru achieved 70% bottle returns with 30p refunds, and loss-aversion deposits garnered 82% support. In India, Economic Survey 2018-19 endorsed a nudge unit; Swachh Bharat Mission leveraged prospect theory (loss aversion on sanitation deaths) and social proofing (observability of open defecation), raising rural sanitation from 38% to 93% and declaring 2900 cities open defecation free. Nudges ensure paternalistic guidance while preserving opt-out freedom, ideal for India's limited state capacity.

**Key points:**

- Use visual nudges like chalk circles for social distancing instead of punishment to achieve better compliance at low cost.
- Traditional coercive policies fail due to human irrationality, as shown by the APMC Act's barriers to farmers' freedom until amended.
- Swachh Bharat Mission applied loss aversion and social proofing to boost rural sanitation from 38% to 93% and make 2900 cities open defecation free.
- Adopt nudging in India via a dedicated unit, as per Economic Survey 2018-19, to craft liberty-preserving policies in health, education, and environment.

**By Ananya Kalra**

* * *

Social distancing is one of the most important preventive measures for COVID-19 but it has been difficult for the government to assure that everyone follows it. One way out was that the government just releases some guidelines, stating the measures that need to be followed but instead, for better results, many states in India started implementing a unique way for social distancing. The district administration asked traders and shopkeepers to draw circles, at a 1-metre distance each, using white chalks in front of their shops for customers to stand there and buy the essentials such as groceries, fruits and vegetables, medicines, etc. [An official from the Maharashtra Chief Minister’s Office](https://economictimes.indiatimes.com/news/politics-and-nation/social-distancing-circles-squares-drawn-outside-maharashtra-shops/articleshow/74806244.cms) said that the government has started pushing the concept across the state by sharing photos of such social distancing practices across the state. The idea is proving a healthy option for people who come out of their homes to purchase groceries, medicines and vegetables. 

Now, let’s analyse the tool used in this example. These circles or boxes act as a Nudge, which keeps on reminding the people to maintain distance. Hence by using a nudge, the government is able to make its policy more effective. In the current scenario, we can devise a Nudge to make people wear masks such as using posters in public areas with messages like “Use a mask as not using one puts you as well as others at risk”. This puts social pressure on the people to wear masks and they also feel that not wearing one will affect not only them but others as well. Right now the government uses its power of punishment to do so which is an expensive method as well as forceful and ineffective. 

Similarly, Nudge is being used by governments all across the world for better implementation of public policies in the area of health, education, sanitation, environment protection, etc. Behavioural Economics is one of the hottest ideas in public policy worldwide.The White House has announced its own behavioural insights team last summer. The UK government’s [Behavioural Insights Team](https://inside.rotman.utoronto.ca/behaviouraleconomicsinaction/files/2013/12/Nudging-Around-The-World_Sep2013.pdf) (BIT) uses this discipline to craft better policies and their implementation. To solve the issue of littering and to promote recycling of waste products, the UK government came up with tools like incentives and loss aversion to make effective policy. The United Kingdom consumed approximately [14 billion litres of soft drinks in 2007](https://www.instituteforgovernment.org.uk/sites/default/files/publications/MINDSPACE.pdf), equivalent to around 234 litres per person. Recycling rates of such products is markedly less in the UK compared to other countries in Western Europe. There are a couple of examples of incentive schemes that have been used in the United Kingdom to improve recycling rates. IrnBru, a consumer drink, was made available in refundable glass bottles. Empty bottles could be returned to retailers, who would provide either cash refunds or a credit voucher. The deposit value was 30p, and an impressive 70% of bottles were returned for cleaning and reuse. Another deposit scheme was introduced which used loss aversion as a tool, wherein the consumers paid an additional fee to the retailer when purchasing a bottle or associated packaging. The deposit was refunded when the consumer returned the empty packaging. In a recent survey, 82% of people in the United Kingdom supported the scheme. So this case study clearly depicts how nudge can be successfully used to bring about a desirable change in the behaviour of the people without using forceful means. 

But why does the need to use Nudge in public policy arise? 

## **Evolution of Public Policy Implementation**

Public policy is used to bring about a desirable change in the behaviour of people. One fundamental issue that we find when we look back at the inception of policy making, is that the government assumed that people are completely rational beings who know exactly what is best for them and society. In the real world, however, that’s not the case. The logic was straight: the government would make a law which if people didn’t follow, would result in punishment. Naturally, if people were rational, this would work in regulating behaviour. However, unseen consequences are omnipresent. 

Such policies do work in some cases but fail in most. A government intervention that is intended to have a certain outcome often ends up yielding a different result. For example: according to the APMC Act, farmers can only sell their produce in government-regulated APMC mandis. The intention was to protect farmers from exploitation by private companies. But this act turned out to be one of the biggest barriers in farmers’ freedom to earn a dignified livelihood. This act was recently amended owing to the Covid-19 pandemic. 

It requires extreme clarity of thought to devise policy initiatives that hit the target, and too often the actual outcomes stray far from what was desired.

## **Liberal Policy making**

With the evolution of public policy making, we bring in a new approach of behavioural economics; the love child of economics and psychology – nudging. Bringing more realistic knowledge into the design of public policies can make them more effective. But more than anything, it promotes liberty and choice.

Let’s see how.

A nudge is a means of encouraging or guiding behaviour without mandating it. To steer people’s choices in directions that will improve their lives, governments can “nudge” citizens by presenting issues in a certain way, without forbidding any options. Behavioural interventions can be powerful. Low-cost tools can help governments improve their public policies by taking into account how people make choices. Some policy commentators conceptualise nudging as an alternative to the law and regulation as they are **design-based choice approaches** to regulation which provide the state with tools which are not the traditional policy instruments of command, competition and communication.

## **Usage of Nudge in India** 

India is not too far behind. The [Economic Survey 2018-19](https://www.indiabudget.gov.in/budget2019-20/economicsurvey/index.php) talks in-depth about setting up a nudge unit in India. “*Given our rich cultural and spiritual heritage, social norms play a very important role in shaping the behaviour of each one of us. Behavioural economics provides the necessary tools and principles to not only understand how norms affect behaviour but also to utilize these norms to effect behavioural change*,” it says.

Programmes such as *Swachh Bharat Mission*, *Jan Dhan Yojana* and *Beti Bachao Beti Padhao*, provide testimony to the potential for behavioural change in India. *Swachh Bharat Mission* (SBM) has used ‘Prospect Theory’ extensively for driving behavioural change. Prospect Theory shows that people are loss averse, i.e. people will go greater lengths to avoid a perceived loss than obtaining a perceived benefit, even if the loss and benefit are of equal value so by highlighting the ill effects of poor sanitation and the number of deaths, SBM was able to impact the behaviours of millions. Another concept that has gained traction is ‘Social Proofing’. Studies show that making the actions of people more observable adds social pressure on people towards preferred behaviour. By making open defecation more ‘observable’ as unacceptable social behaviour, SBM could motivate more and more people to build toilets by applying social pressure. In four years of SBM, rural sanitation has gone up to 93% from only 38% and 2900 cities have [declared themselves](https://swachhindia.ndtv.com/4-years-of-swachh-bharat-abhiyan-india-inching-towards-open-defecation-free-9-crore-toilets-25117/) open defecation free.

## **The way forward** 

There are many areas where nudge thinking may prove more effective—and potentially much more cost-effective than the carrots-and-sticks approach. Most state and local governments are just beginning to scratch the surface of this approach. Given the complexity of policies, participants can also be tempted to cut corners. In lieu of India’s questionable state capacity, the agencies can use nudges to boost compliance at little cost. Moreover, using nudges makes the policy more liberal in nature as it does not force the people to do a certain thing. Rather, it encourages and influences them to pursue or desist from certain actions by knowing how people think.

As we advocate for sound public policy making, nudging ensures liberty, i.e. people are free to do what they like and opt-out of undesirable arrangements if they want to. But at the same time, it also ensures paternalism, i.e. the policy influences people to make better choices for themselves as well as society. 

In the coming years as people are increasingly realising the value of liberty, it would be immensely beneficial for the government to use the applications of behavioural economics and nudging to institute more effective public policies.

*Read more: [Indian Agriculture Sector: Time to let the ‘Invisible Hand’ Lead](https://spontaneousorder.in/indian-agriculture-sector-time-to-let-the-invisible-hand-lead/)*

* * *

**About Ananya Kalra**

Ananya is an undergraduate student, pursuing B.A. Economics Honours from Lady Shri Ram College for Women. She is passionate about researching and expressing her views. She has a diversified research interest in the areas of behavioural economics, political economics and social economics. She has a newfound interest in public policy and currently, she is interning at the Centre for Civil society. She loves travelling and photography. She wishes to run her own research firm someday.

## Indian Agriculture Sector: Time to let the ‘Invisible Hand’ Lead

Original: https://www.spontaneousorder.in/p/indian-agriculture-sector-time-to-let-the-invisible-hand-lead

Author: Spontaneous Order

Published: 2020-09-02T15:18:46.000Z

Topics: indian-agriculture, agricultural-reforms, apmc, land-ceiling, essential-commodities-act

> There are several laudable changes brought by the Ordinance. It provides for ‘barrier-free inter-state and intrastate trade’ in agricultural produce and ‘eliminates intermediaries’. Further, it promotes ‘trade & commerce’ outside the physical

**Summary:**

India's agriculture sector, employing over 50% of the workforce yet contributing less than 20% to GDP, has long suffered from government apathy and overregulation. The 2020 Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance marks a historic liberal shift, enabling barrier-free inter-state and intra-state trade, eliminating intermediaries, allowing sales outside APMC mandis, electronic trading for PAN-holding farmers, direct engagement with processors and exporters, and future contracts—empowering farmers to realize full prices and achieve self-reliance. Government intervention is restricted to emergencies like war or famine. To make these reforms permanent, the author urges new legislation and amendments to archaic laws: land ceiling acts (e.g., limiting holdings to 6 hectares in Manipur, 6.74 in Assam, 7 in West Bengal), which block successful farmers from expansion; APMC legislations, which cartelize markets and harm small farmers; and the Essential Commodities Act, which deters storage and processing investments despite agriculture's seasonality. Additional needs include revamping land records, infrastructure, credit, derivatives markets, and insurance. The classical-liberal call is clear: remove the 'visible hand' of state overregulation and let the 'invisible hand' guide the sector.

**Key points:**

- The 2020 Ordinance liberalizes trade by permitting barrier-free sales outside APMCs, direct farmer-buyer contracts, and electronic trading.
- Amend land ceiling laws to allow farmers to expand holdings beyond limits like 6-7 hectares in various states.
- Reform APMC acts to end market restrictions and foster competition for better farmer prices.
- Revise the Essential Commodities Act to encourage storage investments and reduce hoarding fears.
- Permanently embed market-centric reforms by limiting state interventions to true emergencies.

**By Neeti Shikha**

* * *

Agriculture sector in India has suffered from the apathy, inaction and myopism of the government until 2020. The sector employs more than 50 percent of the workforce of the country; however, it contributes less than twenty percent to the country’s GDP.

For the first time in the history of India, efforts have been made by the current Government to create a liberal framework for agriculture. With the introduction of the farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, the government has taken a giant leap in reforming the sector. The Ordinance proposes to bring a paradigm shift by adopting truly market centric, liberal reforms.

There are several laudable changes brought by the aforesaid Ordinance. It provides for “barrier-free inter-state and intra-state trade” in agricultural produce and “eliminates intermediaries”. Further, it promotes “trade and commerce” outside the physical premises of markets covered by State Agricultural Produce Marketing legislation. It allows farmers to sell their produce outside the Agriculture Produce Market Committee (APMC) mandis. Farmers having permanent account numbers with the Income Tax Department may conduct “electronic trading” transaction platforms for agricultural commodities. Most importantly, it allows farmers to engage directly with processors, aggregators, wholesalers, large retailers and exporters. Farmers and buyers may also enter into future contracts. Through these changes, the government has ensured that each farmer can become “Atma Nirbhar” by reducing their dependency on agency, allowing them full realization of the price by having direct bargaining power.

Under the Ordinance, the power of the government to impose regulations on agricultural commodities is also limited to situations such as war, famine, extraordinary price rise and natural calamity.

Given that this Ordinance can best be valid for six month, there is a need to bring in a new set of legislations and amend some existing legislations to ensure that the liberalization of the agriculture sector is here to stay. There is a need to understand the laws that have contributed towards apathy of the agriculture sector. Some laws that need rethinking and “weeding” are land ceiling laws, APMC legislations and Essential Commodities Act.

The current land laws do not allow a person to hold land beyond a specified limit. For instance, an individual cannot hold more than 6 hectares in Manipur, 6.74 in Assam, and 7 in West Bengal. These agricultural land ceiling laws were enacted in the 1960s after the abolition of the zamindari system. The legislation puts a limit on how much land a family can possess. These laws act as an obstruction to the growth of farmers’ pay. Successful farmers who possess the land as per the ceiling limits can’t purchase more land and increase their profit. Those who can afford to take the risk to expand their produce are prevented by the laws.

Another law that requires amendment is APMC legislations. Interestingly, the Ordinance does not abolish the state APMCs. It is no secret that APMC legislations have resulted in restricting access to markets for the small farmers who were left at the bargain and mercy of strong representatives. Criminalization of settling up informal markets and dependence on license for access to Mandis (formal market) has forestalled competition, affecting the farmers’ odds of finding a better price for their produce.

This is contrary to the generally accepted models of price setting in agriculture.

With the changes introduced through the Ordinance, there is likelihood that APMCs will become competitive and effective, offering better negotiations to the farmers. But legislative amendments in the state APMC legislations need to be accordingly made, limiting the power of the state to institute any trade barriers against the spirit of liberalization.

 The Essential Commodities Act (ECA) is yet another law that imposes draconian restrictions on agricultural trade that have deterred investment in storage and processing of produce. Intention of ECA was to prevent hoarding and blackmarketing. The fact that Agriculture is a seasonal activity and it requires storage for “rainy days” of farmers, has been totally missed. The disincentives created by the ECA has led to irrational reactions from the market that includes not investing in warehousing and storage infrastructure. Alongside, various institutions such as the registry of land records, roads and transport, and storage, etc. need to be revamped. It is equally pertinent to focus on availability of easy credit for farmers, development of a sophisticated derivatives market for future trading and competitive insurance agricultural schemes.

It is important that the new agricultural policy and laws are not made under the shadow of old archaic laws and displaced economic incentives. There is a need to remove the “visible hand” form of state regulations that has an overarching power and over regulates the agriculture sector and allow the ‘invisible hand’ to take care of the activities and its output.

*This piece was originally published in The Daily Guardian, **Tarun Nangia’s Legally Speaking Page**. Click [here](https://thedailyguardian.com/indian-agriculture-sector-time-to-let-the-invisible-hand-lead/) to read.*

*Read more on agriculture: [Harmful Bans and Limited State Capacity: An Agricultural Example](https://spontaneousorder.in/harmful-bans-and-limited-state-capacity/)*

* * *

**About Neeti Shikha**

Dr. Neeti Shikha, Head Centre for Insolvency & Bankruptcy, Indian Institute of Corporate Affairs.

## SO Musings: Bilingualism for India

Original: https://www.spontaneousorder.in/p/so-musings-bilingualism-for-india

Author: Spontaneous Order

Published: 2020-08-28T15:22:16.000Z

Topics: language-policy, bilingualism, english-in-india, nep-2020

> The English language has always had an uneasy existence in independent India. While the cultural chauvinists, particularly from North India wanted to root it out due to its ‘foreign’ origins and have Hindi as the national language, the South Indian le

**Summary:**

The post highlights historical tensions over English in post-independence India, where northern cultural chauvinists pushed for Hindi as the national language, opposed by southern leaders defending regional tongues with English as a safeguard. It references NEP 2020's push for 'Indian' languages up to primary level, non-mandatory. Drawing from P. Kodanda Rao's 1953 Freedom First article, it argues against viewing English as inherently foreign or a 'necessary evil' to be minimized. Rao asserts no language belongs exclusively to any nation or ethnicity, urging Indians to wholeheartedly embrace English. The piece contrasts Mahamahopadhyaya P.V. Kane's presidential address at the 1953 Indian Languages Development Conference in Poona—criticizing indefinite English use in administration and universities as undignified for a free India, though conceding its superiority for decades—and C. Rajagopalachari's 1953 Madura speech, hailing English as a 'gift from Goddess Saraswati,' essential for modern science, research, politics, and scholarship. From a classical-liberal lens, the post advocates bilingualism, rejecting Hindi imposition and promoting English retention for practical advancement beyond the Constitution's 15-year limit.

**Key points:**

- No language belongs to a particular nation or ethnic group, so English should be welcomed wholeheartedly by Indians rather than tolerated as an evil.
- P.V. Kane viewed prolonged English use in administration and universities as hurtful to India's self-respect, though practically necessary for decades.
- C. Rajagopalachari praised English as a divine gift and universal language vital for science, politics, and scholarship.
- NEP 2020 encourages Indian languages in primary education but does not mandate replacing English, aligning with bilingual advocacy.

**By Spontaneous Order**

* * *

*The English language has always had an uneasy existence in independent India. While the cultural chauvinists, particularly from North India wanted to root it out due to its ‘foreign’ origins and have Hindi as the national language, the South Indian leaders saw this demand as a threat to their regional languages and culture. They wanted English to stay as a bulwark against the imposition of Hindi in their states.*

*The NEP 2020 seeks to encourage the teaching of ‘Indian’ languages upto the primary level to students instead of English, although it does not make it mandatory.*

*In this article published in the July 1953 edition of the magazine **Freedom First,** Shri P. Kodanda Rao questions the supposed foreignness of the English language and writes that no language can belong to a particular nation or ethnic group. In his opinion, English should just not be seen as a necessary evil but rather welcomed whole heartedly by Indians.*

In his presidential address to the Indian Languages Development Conference, held recently in Poona, Mahamahopadhyaya P. V. Kane, a former Vice Chancellor of Bombay University and a great scholar and patriot, observed that it would not be in keeping with the dignity and self-respect of India to retain a foreign language like English as the official language of the Union and the medium of instruction in the Universities for an indefinite period. He added that there was probably no free country in the world where instruction in the schools and even in the University was imparted through the medium of a foreign language. His main objection to the English language was that it was foreign and therefore its retention hurts the self-respect of India, particularly when she became free and independent. Mr. C. Rajagopalachari, no less a scholar and patriot, claimed that the English language was one of the languages “given to us by our Goddess Saraswati,” and pleaded that India should not give up the English language, which was a universal language and the language of modern science, research, politics and scholarship. (Public speech in Madura, March 23, 1953) Mr. Kane admitted that today and perhaps for the next fifty years English had no equal competitor for higher administration and education in the regional languages of India and that it might have to be continued beyond the fifteen-year limit envisaged in the Indian Constitution. His attitude seems to be that the English language should be tolerated for the minimum possible time as an inescapable evil, while Mr. Rajagopalarchari would welcome its retention as desirable…

To read the full article, click [here](http://www.freedomfirst.in/uploads/issues/pdf/14.pdf).

*Read more: [SO Musings: The Myth Of Free Education](https://spontaneousorder.in/so-musings-the-myth-of-free-education/)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Harmful Bans and Limited State Capacity: An Agricultural Example

Original: https://www.spontaneousorder.in/p/harmful-bans-and-limited-state-capacity

Author: Spontaneous Order

Published: 2020-08-25T16:58:59.000Z

Topics: agriculture, pesticide-regulation, state-capacity, better-regulation

> Bans are the worst form of regulation. Ad-hoc measures such as this ban do not take into consideration the long term seen and unseen effects of the policy. When bans exist, they only provide opportunities for rent-seeking.

**Summary:**

The Indian Ministry of Agriculture's draft Banning of Insecticides Order, 2020, proposes banning 27 pesticides accounting for 40% of domestic usage, despite flawed rationale including non-submission of data due to unmet deadlines and bans in low-capacity countries like Syria, Mozambique, and Palestine, rather than advanced regulators like the EU, US, or Australia. Of these, six are 'green triangle' (unlikely harmful), eight 'blue triangle' (mildly toxic), and only 11 highly/extremely toxic; examples include Diuron (recommended for continued use with caveats, banned only in Mozambique), Malathion (banned only in Syria and Palestine), and Deltamethrin (safe for household use and malaria control, banned agriculturally). Substitution with costlier imports (Rs 350 vs Rs 2000 per litre, up to 5x) burdens farmers, contradicts Atmanirbhar Bharat self-reliance, and increases regulatory uncertainty amid ease-of-doing-business efforts. From a classical-liberal view, ad-hoc bans are the worst regulation, fostering rent-seeking, ignoring long-term effects, and misallocating India's limited state capacity (135 police per 100,000 vs global 318). The author advocates regular 10-year reviews and wider consultations over hasty prohibitions.

**Key points:**

- The ban on 27 pesticides, 40% of domestic use, relies on weak justifications like data non-submission from tight deadlines and bans in low-capacity nations like Syria and Mozambique.
- Many targeted pesticides like Diuron, Malathion, and Deltamethrin are approved in EU, US, Australia, and useful for public health, contradicting the Anupam Verma Committee's recommendations.
- Replacement costs could rise 5x (Rs 350 to Rs 2000 per litre), harming farmers and self-reliance goals.
- Ad-hoc bans waste limited enforcement capacity and invite rent-seeking; opt for regularized 10-year reviews instead.

**By Bhuvana Anand**

* * *

On the 14th of May 2020, the Ministry of Agriculture and Farmers Welfare published a draft order called the [Banning of Insecticides Order, 2020](http://agricoop.nic.in/sites/default/files/Notification.pdf). The ministry cited various reasons justifying the ban of each pesticide, including a list of other countries that have banned these pesticides. 

This ban is based, at least in part, on the advice of the Anupam Verma Committee set up in 2013. However, of the 27 proposed compounds, six are classified as “green triangle” or unlikely to be harmful, and eight as “blue triangle”, or mildly toxic. 11 are classified as highly or extremely toxic. 

One reason that the ministry provided for banning the pesticides in the green and the blue triangle is that producers and interested parties have not submitted reports to them. Pesticide associations like the Crop Care Federation of India say the reason for non-submission or partial submission is that while the Registration Committee added new requirements for their review, they decided not to extend the deadline for submitting those [studies](https://www.financialexpress.com/opinion/banning-pesticides-make-haste-slowly/2060146/).

Take the case of Diuron. The Anupam Verma Committee [recommended](http://ppqs.gov.in/sites/default/files/361rc2015.pdf) that the use of diuron should be continued, the only caveat being it should be avoided in areas adjoining water bodies. The 2020 order lists non-submission of the data on bio-efficacy as one of the reasons for the diuron ban. The only other country where it is banned, according to the report, is Mozambique. It is currently in use in the European Union, Australia and the USA. This approach is not limited to Diuron; many banned pesticides are banned in only a handful of other countries. Malathion, an insecticide, is banned only in Syria and the State of Palestine. Deltamethrin, another insecticide, is not banned anywhere else and considered safe enough for household use, but the ban restricts its use in agriculture. It is still approved for use in public health since it has proved useful in [malaria control](https://pubmed.ncbi.nlm.nih.gov/21771693/). 

India has frequently used the idea of regulatory piggybacking. That is to rely on the regulatory capacity of another state to determine the efficacy of a product. For instance, India allows drug manufacturers to sell drugs in India if regulatory bodies greenlight it in approved countries. This enables them to launch the drug in India without having first to conduct local [trials.](https://cdsco.gov.in/opencms/export/sites/CDSCO_WEB/Pdf-documents/NewDrugs_CTRules_2019.pdf)

However, when relying on regulatory bodies from other countries, it is usual practice to rely on countries that have more regulatory capacity than India or have similar conditions to India. Syria, Mozambique and the State of Palestine hardly fit this bill. They have neither more regulatory capacity and expertise, nor are they agricultural powerhouses. 

The list of 27 accounts for around 40% of domestic pesticide usage and would need to be substituted by alternatives. Imported or branded alternatives cost significantly more than the currently used options. The President of the Pesticides Manufacturers and Formulators Association of India, suggests that the cost differential could be over 5x, with domestic pesticides costing as little as Rs. 350 and imported varieties costing as much as Rs. 2,000 per [litre](https://theprint.in/india/move-to-ban-27-pesticides-will-hand-over-rs-12000-cr-market-to-china-indian-manufacturers/438973/). 

The ban does not fit in with the focus on helping the stressed agriculture sector and the backdrop of Atmanirbhar Bharat. In an age where the focus is on improving the ease of doing business and reducing regulatory uncertainty, this ban does not inspire much confidence. Farmers and industrial groups have expressed concern over this move. 

The secretary of Chemicals and Petrochemicals, under the Ministry of Chemicals and Fertilizers, suggested “wider stakeholder consultations” should take place. Instead of adopting ad-hoc policies and regulatory decisions about what molecules to allow or prohibit, Verma indicates that India should move to regularised 10-year reviews so new information can be incorporated in a more formal and regularised way.  

All regulations impose compliance costs on both the business and on government for enforcing those regulations. Bans are the worst form of regulation. Ad-hoc measures such as this ban do not take into consideration the long term seen and unseen effects of the policy. When bans exist, they only provide opportunities for [rent-seeking](https://www.independent.org/pdf/tir/tir_24_2_01_rajagopalan.pdf). India also lacks the state capacity to enforce and prosecute violations of this ban. India has only 135 police per 100,000, compared to the global mean of [318](https://www.independent.org/pdf/tir/tir_24_2_01_rajagopalan.pdf). Diverting state resources towards enforcing a ban is not an effective use of limited state capacity. This is even more true given the questionable rationale for banning many of these pesticides.

*Read more: [SO Musings: Agricultural Policy of Swatantra Party](https://spontaneousorder.in/agricultural-policy-of-swatantra-party/)*

* * *

**About Bhuvana Anand**

Bhuvana Anand is Director, Research at Centre for Civil Society, one of India’s leading think tanks. Bhuvana’s subjects of interest are better regulation and governance, public finance management, and political economy. In India, she has worked extensively on reforms of welfare programmes, including reforms of the Public Distribution System and implementation of various Direct Benefits Transfers. At the Centre, she works on unpacking how government actually functions using administrative data, legislative analysis, field research, and machine learning. In addition, her team develops blueprints for programme design and policy implementation. Bhuvana has worked with various donors and civil society organisations in Sudan, Afghanistan, Sri Lanka, India and the United States, in policy advocacy, managing multi-pronged programs and research. She previously worked with the United Nations, the British Government's Department for International Development, and most recently at MIT’s Poverty Action Lab.

## SO Musings: “Monopolist” Can He Charge “Anything He Wants?”

Original: https://www.spontaneousorder.in/p/so-musings-monopolist-can-he-charge-anything-he-wants

Author: Spontaneous Order

Published: 2020-08-21T16:21:38.000Z

Topics: monopolies, market-competition, pricing-power

> The author brings forth the misconceptions about a monopoly through a dialogue within a classroom and discusses the popular misconceptions about control by monopolists in the market.

**Summary:**

In this SO Musings, Spontaneous Order recalls John A. Sparks’ 1972 article '“Monopolist” Can He Charge “Anything He Wants?”' from The Indian Libertarian, highlighting common student misconceptions about monopolies. Through a classroom dialogue, a student claims a sole producer, like one dairyman in a town, holds monopoly power to charge any price without competitors, with the class agreeing. Sparks refutes this fallacy, noting that people fixate on 'competition by competitors'—rivalry among established firms—while ignoring other vital competitive forces. He quotes that most industry studies emphasize only intra-firm rivalry when discussing competition's role in regulating outputs and prices. From a classical-liberal viewpoint, the piece challenges the notion of unchecked monopolist pricing power in the absence of 'flesh and blood' rivals, teasing alternative market disciplines that prevent a lone seller from charging 'anything he wants.' The full text, on page 16 of the magazine, is available via IndianLiberals.in, underscoring the rich Indian liberal tradition against socialist misconceptions.

**Key points:**

- Students mistakenly believe a sole producer without direct competitors can charge any price desired.
- The class overlooks competitive forces beyond rivalry among established firms.
- Industry studies typically focus only on competition between existing firms, neglecting broader market dynamics.
- Sparks poses that other forms of competition curb the monopolist's pricing power.

**By Spontaneous Order**

* * *

*In this week’s SO Musings, we recall John A. Sparks’ piece titled **“Monopolist” Can He Charge “Anything He Wants?”**  published in the August 1972 edition of The Indian Libertarian magazine. The author brings forth the misconceptions about a monopoly through a dialogue within a classroom and discusses the popular misconceptions about control by monopolists in the market. Towards the end of the piece, the author asks again “Can the seller who is without actual competitors really charge anything he wants?”* 

*Published below is an excerpt from the original piece.* 

To their first course in economic principles, college students bring a wide assortment of misunderstandings. The “nature of competition” is a subject where there is almost always confusion. During a recent classroom discussion one student, who is representative, said: “This idea of rivalry between producers is fine, but what if there is only one producer of a product, for example, one dairyman in a town. Then, it seems to me that he would have a monopoly and could successfully charge any price he wanted to charge.” The class nodded a general assent. 

The fallacy that the exclusive producer of a good or service holds the enviable power to charge “anything he wants” has been exposed and refuted. Yet, most members of the class assumed that in the absence of other “flesh and blood” competitors there would be no curb upon the pricing practices of the single seller. Preoccupied with “competition by competitors,” the class neglected other important kinds of competition. They are not alone. 

“When competition is named as a regulator in enterprise outputs and prices, it is usually the competition among the firms already established in this or that industry which is emphasized…Most studies of individual industries refer, when discussing competition, almost entirely to rivalry among established firms.”

What are the alternatives to “competition by competitors”? What forces keep the lone producer from charging “anything he wants”? 

To find out the answers, *read the full text which can be accessed [here](http://www.indianliberals.in/~_admin/pdflanguage?id=1500419189.pdf) on page no. 16* 

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

*Read more: SO Musings: [The Myth Of Free Education](https://spontaneousorder.in/so-musings-the-myth-of-free-education/)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: The Myth Of Free Education

Original: https://www.spontaneousorder.in/p/so-musings-the-myth-of-free-education

Author: Spontaneous Order

Published: 2020-08-14T12:33:14.000Z

Topics: education, free-education-myth, private-education, government-subsidies

> Om Prakash Kahol criticizes the rhetoric of ‘Free education’. He strongly emphasizes that there is no such thing as a ‘Free’ education and suggests that for the provision of quality education to all Indians, the Government must change its prohibit

**Summary:**

This post from Spontaneous Order reprints a 1959 article by Prof. Om Prakash Kahol in Indian Libertarian, critiquing the myth of 'free education' amid India's post-independence government policies. It contextualizes ongoing state provisions: highly subsidized schools and colleges, the Right to Education Act 2009 mandating 'free and compulsory' education up to age 14, and NEP 2020 extending this to secondary levels. Kahol, from a classical-liberal viewpoint, dismantles the notion that education can be truly free, arguing there is 'no such thing as a free education'—subsidies are always borne by someone else, often hidden taxpayers, deceiving the public into believing in 'something out of nothing.' He satirizes pre-partition fantasies of free milk, medicines, and education via magical means like Aladdin's Lamp or divine intervention, noting ten years of experience have disillusioned the masses that provisions require payment. Emphasizing nature's no-shortcuts principle, Kahol urges the government to cease its 'prohibitive attitude towards private educational institutions' to enable quality education for all Indians through voluntary, market-based provision rather than coercive state rhetoric.

**Key points:**

- There is no such thing as truly 'free' education; government subsidies are always paid by hidden taxpayers elsewhere.
- Post-independence rhetoric of free amenities deceives people into ignoring economic reality and nature's no-shortcuts rule.
- The government must end its prohibitive policies against private educational institutions to deliver quality education to all.
- Experience in Free India has taught that essentials like provisions and medicines require payment, and education is no exception.

**By Spontaneous Order**

* * *

*Provision of education to its citizens has been considered an important responsibility of the Government right from the early days of independence in India. Accordingly, States and Centre have been providing highly subsidized education through various schools and colleges. The Right to Education Act, 2009 mandated the provision of ‘free and compulsory’ education to each child upto the age of 14 years. This provision has been extended upto Secondary education in the recently unveiled NEP 2020.*

*In this article published in the magazine **Indian Libertarian** on January 1, 1959 Prof. Om Prakash Kahol criticizes the rhetoric of ‘free education’. He strongly emphasizes that there is no such thing as a ‘free’ education and suggests that for the provision of quality education to all Indians, the Government must change its prohibitive attitude towards private educational institutions.*

There used to be a wide-spread belief among the illiterate masses before partition that in Free India, milk and ghee would be supplied free to every child; all sorts of medicines would be available in the hospitals without any cost; customers would get provisions and sweet-meats in the market without having to pay any price. And in the same train of ideas came the fanciful notion that education up to the highest degree would be free. Ours is a land, where people seem to believe in all seriousness that Aladin ‘s Lamp is still preserved in the Moghal Fort at Delhi and Herculean tasks like the manufacture of penicillin, construction of moon-rockets and installation of thermonuclear plants can be accomplished without entailing any cost to ourselves. When, for our defence, we can confidently depend upon the arrival of the Lord Himself with his Sudarshana Chakra, and consider all military preparations unnecessary, is there any wonder that we also believe that some superhuman race of teachers will come someday descend on earth-in this part of it- and convert, by magic touch, all students into doctors, engineers and lawyers without demanding a penny by way of remuneration?

Thank God, ten years experience in Free India has taught them that we cannot get “something out of nothing.” There are no shortcuts in the scheme of nature. We can deceive ourselves into the belief that in a free country, we can get amenities without having to pay anything in return, but we cannot deceive nature. Most people have been disillusioned by now and no longer labour under the myth that they can freely help themselves with a rosagulla at the confectioner’s shop and nobody would bother them about the price. Provisions, medicines and other necessaries have to be paid for even in Free India; and if someone is getting them free, rest assured, someone else, not always in sight, is paying the price. Whenever we get comfort and have not paid for it, we must realise clearly that we are enjoying it at somebody else’s cost. 

*The original text can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=229669191.pdf) at page no*. 20

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Rajaji on Communism and Indian Communists

Original: https://www.spontaneousorder.in/p/rajaji-on-communism-and-indian-communists

Author: Spontaneous Order

Published: 2020-08-12T11:32:03.000Z

Topics: communism, socialism, rajagopalachari, economic-freedom

> Soon after independence, the ideas of liberal society which nurtured freedom, liberty, decentralization, and free enterprises, however, were subsided by the domination of socialists and communists’ centralization across the public spheres.

**Summary:**

The post revives C. Rajagopalachari (Rajaji)'s warnings against communism and socialism in India, arguing that despite three decades of economic liberalization since the 1990s, these ideologies persist in political parties, academia, media, NGOs, and policy-making, undermining liberal principles of freedom, liberty, decentralization, and free enterprise that fueled the independence movement. It traces how moderates and liberals like V.S. Srinivasa Sastri, Gandhi, and Rajaji were sidelined by socialists influencing Nehru from the 1920s, leading to post-independence centralization. Key examples include the paradoxical 1976 Emergency insertion of 'socialism' into the Constitution's Preamble—originally rejected by the Constituent Assembly and opposed by Ambedkar—and a 2017-2019 National Youth Award application requiring promotion of 'socialism' as a national value. Drawing from Rajaji's 1955 book 'The Indian Communists,' a collection of his 1952-1954 speeches as Madras Chief Minister, it highlights his declarations of communists as India's 'enemy No.1' for exploiting grievances via psychological tactics like the 'G.C.M. method' (exaggerating common measures of discontent), brainwashing youth and workers, and pursuing dictatorship. Rajaji advocated free markets for producers, warned against over-centralization, and noted communists' electoral hypocrisies, such as 1952 wins via Rs.2 crores and undisclosed 2019 funds (CPI Rs.15 crores, CPI(M) Rs.10 crores). The conclusion urges vigilance against these threats to spontaneous social order and economic freedom.

**Key points:**

- Rajaji identified communists' core tactic as exaggerating grievances (G.C.M. method) to destabilize governments and brainwash the discontented.
- Socialism was forcibly added to India's Constitution Preamble in 1976 during the Emergency, despite Constituent Assembly rejection and Ambedkar's opposition.
- Even today, government forms like National Youth Awards indoctrinate youth to promote 'socialism' alongside democracy.
- Indian communists hypocritically decry money in elections while benefiting from massive undisclosed funds, e.g., Rs.25 crores total in 2019 Tamil Nadu alliances.
- Liberal principles of decentralization and free enterprise, not socialist centralization, are essential for wealth creation and social cooperation.

**By Chandrasekaran Balakrishnan**

* * *

On August 15, India will celebrate 74th Independence Day amidst the COVID-19 pandemic. Many powerful ideas emerged during the freedom movements, which ended on August 15, 1947, and after. The first three decades (1885-1915) of the Indian National Congress were dominated by moderates or liberals who advanced freedom movements by pursuing constitutional methods largely without violence. 

Since the 1920s, some segments of the freedom movements mischievously diverted some of the mainstream political leaders including Jawaharlal Nehru towards the ideas of socialism and communism by underestimating the liberal principles of India centric decentralized ideas advocated by V.S.Srinivasa Sastri, P.S.Sivasamy Aiyer, Gandhi, Rajaji, Patel, etc.   

Thus, soon after independence, the ideas of liberal society which nurtured freedom, liberty, decentralization, and free enterprises, however, were subsided by the domination of socialists and communists’ centralization across the public spheres. It was so imbibed that, it took several decades to realize the grave danger of both communism and socialism not just in India but also in the rest of the world. Further, it took decades to accept the fact that only economic freedom with social and political stability would produce wealth to distribute among the community by themselves or through the State.

Some people now think especially the youth that after decades of economic reforms and moving away from shackles of command and control regime, where is the question of socialism or communism in contemporary India? Alas, even after three decades of liberalization of the economy, the ideas of socialism and communism continue to thrive on different flames in most political parties, academia, media, publishing industry, N.G.Os and policy-making domain no matter which political party rules the country. 

For example, the Union Ministry of Youth Affairs and Sports has a question in the application for National Youth Award (2017-2019) that whether persons or organizations applying for the awards had worked towards the “popularisation of nationally accepted values like national integration, democracy, ***socialism,*** etc”. When did we nationally accept the word “socialism” in India as true democracy? And why is the current Union Government indoctrinating the country’s youth and forcing them to popularize the toxic terms like “socialism”? 

Indeed, it was so paradoxical to forcefully insert the word “socialism” into the Preamble of our Constitution during the BLOCK days of emergency by Indira Gandhi government through an amendment in 1976. Originally, the Constituent Assembly had rejected the moves to add the words like “socialism” and “secular” in the Constitution after a long debate. Even B.R.Ambedkar had strongly warned against the move to insert the words “socialism” and “secular” in the Indian Constitution which according to him should not force future generations to believe any particular ideology and also not conducive to Indian democracy.

Keeping these in mind, Rajaji had perceptibly warned the people in India against the communists who strive always cleverly to brainwash the youth, college students, working-class community, and labourers including farmworkers towards the empty promises either to envy the landowners or wealth creators like private enterprises. Rajaji also wrote repeatedly that Indian communists were always played through gangs of underworld mafia for the distraction of democracy, national unity, and cultural values of people. 

In 1955, the Cultural Books Limited, Madras (now Chennai) had published a slim book titled **“The Indian Communists” by C.Rajagopalachari or Rajaji, as he was called famously**. The book was printed by Swathanthra Press, Madras, and is a collection of speeches of Rajaji as Chief Minister of Madras State, delivered from 1952 to 1954 both in the Madras Legislative Assembly and on the public platforms. Rajaji was one of few Congress leaders who understood not only the communism around the world but also the real nature of Communists in India. 

In the postmodern world, there is a very thin line between the idea of communism and socialism. Both ideas have never had consistency with values of freedom and liberty. Rajaji warned that *“there is a permanent and inherent conflict in the Communist jargon…The communists believe in the method of producing a dictatorship if possible without violence, but if necessary through violence.”* He also warned that ***“the intellectual instability of the educated classes is used and exploited and that is what gives Communist its strength.”***

Perhaps, in the history of independent India, Rajaji was the only sitting Chief Minister who publically declared that ***“to save my country from the traps and the dangers of the Communist Party. That is my policy from A to Z. I consider the Communist Party a great and dangerous trap, a trap not only because of the inherent qualities and policies of the Communist Party but also because of the condition of our country.”***

He further went on to say that ***“the illiterate man is often more educated than the very literate man. There is a large amount of ignorance in our country. I consider the Communist Party, therefore, is a great danger to India, greater danger than to any other country…. I place my cards on the table. I tell the Communist Party, “You have to take me as your enemy No.1. May I say you are my enemy No.1.”***

Rajaji was an astute reader and prolific writer both in English and Tamil languages for several decades. According to him, the communists play very dangerous tactics to confuse the people on public policies and brainwash poor people. He vividly noted that *“What is the policy of the Communists Party? Every difficulty in the country, every discontent in the country, every complaint in the country must be taken up, interpreted in the language of opposition to the status quo and to the Government, expanded, exaggerated, repeated, added to and rolled on and made to grow like a snowball so that the Government may get a bad name….Every kind of contradictory satisfaction to every kind of discontented men. This is the technique of communism in India.”* Largely, this has been the case of Indian communists and socialists in both pre and post-independence.

Rajaji also understood the maligning method of human psychology used by Indian communists. He noted that *“the Communists are humble in the beginning, how they are smooth and oily and get into every group and try to get first the G.C.M. as I would call it and then by multiplying it by a convenient figure get the L.C.M. ”.* 

He further beautifully observed that *“the Communists first find out the Greatest Common Measure of everybody who have grievances and take possession of the G.C.M. and then multiply it by a factor which I call exaggeration and the exaggerated G.C.M. becomes the L.C.M. the Least Common Multiple. This is the arithmetical formula of the Communists. I have not discovered it here. It has been discovered during the last few decades to be the process by which Communists are operating in Eastern Europe…The formula has not been discovered by the Communist Party here. It is the result of long research in human psychology. They know how to work on human psychology.”*  

Across the world, the *“Communism works through this G.C.M. method, it gets hold of the people and the industries, and then everything is changed. Let me warn the country and the people as to what will happen in any country where Communists are to rule. After all, the fruit is the test of the tree”* said Rajaji.

Most of the regional political parties in India survive with vote banks by instigating one or other issues of language, religion, caste, class conflicts, and street politics of hate speeches with violence. Rajaji observed that *“the communists, the Communist theory, the Communist policy. They believe that class conflict is necessary and inherent in the present day civilization… It is inherent in the present civilization and now that must be ended –the inherent class conflict –by the transfer of the means of production to national ownership and that is to be attained by force and revolution.”* 

Any coherent societies are not designed by men with intensions of particular types but they emerge through omnipotent spontaneous order which evolves among the community on its own by social co-operation. Rajaji observed that *“Humanity has found from time immemorial that social co-operation must be also added on to this urge of selfishness. Otherwise, no happiness is possible and no life is possible. Now social co-operation and mutual co-operation are contrary to the spirit of selfishness, and how then are we to bring these together? The communists believe that compulsory dictatorship will bring about that social co-operation.”*

According to Rajaji, the communists *“do not believe in the magic of property to which the old economists were wedded.” He further profoundly stated that “if we wish really to increase production of food in our country, we must allow the producer of the food a free market for what he produces and what he achieves by way of production. If we strangle him by restrictions and regulations which he cannot bear, if we make him walk about, like a prisoner of a thief, carrying his own produce in order to sell in surreptitiously he cannot have an interest to produce food.”* He had foreseen “the danger of over-centralising our resources” in India.

In September, 2019, many were shocked after reports emerged that communist parties in Tamil Nadu such as Communist Party of India (CPI) and Communist Party of India (Marxist) CPI(M) received Rs.15 crores and Rs.10 crores respectively during the 2019 Lok Sabha elections for an alliance with the Dravida Munnetra Kazhagam which failed to disclose during the elections. Both CPI and CPI (M) had won four seats to lower house of the parliament. 

This is not something new. The Communist parties in India were serial sabotages of democracy for quite a long time. Rajaji spoke openly about how the communist parties won the elections in 1952. Rajaji said that communists *“had only two seats then (in 1947) in the Assembly. Now we have got 70…. That is what Rs.2 crores did. They were underground or in hiding somewhere and this Rs.2 crores made them come into the Assembly. I say, that this Rs.2. crores was well spent, even if it had produced nothing but the present attachment of the Communist Party Parliamentary methods.”*

The above two incidents show the real face of communists in India who always pretend that they are transparent and criticize others for disproportionate use of money power in the electoral processes. Every word uttered by communists’ especially Indian communists has to be taken cautiously because they would always inject some hidden agenda of either dictatorship or violence by masticating the name of poor people or plights of some marginalized community.

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## Why localised lockdowns are a bad idea

Original: https://www.spontaneousorder.in/p/why-localised-lockdowns-are-a-bad-idea

Author: Spontaneous Order

Published: 2020-08-11T10:52:40.000Z

Topics: covid-19, local-lockdowns, supply-chains, economic-recovery

> The Centre’s decision to re-open the economy and allow states discretion to enforce local lockdowns has led to unintended consequences. State governments are now re-imposing local lockdowns at will.

**Summary:**

Localised lockdowns by Indian states, following the nationwide lockdown from March 24, 2020, are misguided as they disrupt interconnected supply chains spanning multiple states—for instance, Delhi fridge manufacturers relying on Rajasthan materials—leading to broader economic harm. Experts like CRISIL's Dharmakirti Joshi note that partial unlocking and erratic containment hinder supply chains, transportation, and logistics, while supplier Vimal Kedia highlights interdependencies in labour and supplies causing trigger effects across markets. In contrast, Delhi avoided on-off lockdowns, using increased testing and healthcare expansion to cut active cases and reach over 80% recovery rate, proving states need not choose between virus control and livelihoods. With India past one million COVID-19 cases, overall unemployment back to pre-pandemic levels but urban rates high, the post urges Centre-state coordination for realistic crisis management over arbitrary measures creating a 'facade of good COVID management.' From a classical-liberal viewpoint, this critiques central planning's failures and state overreach, advocating market revival alongside health infrastructure boosts to safeguard both lives and economic freedom.

**Key points:**

- Localised lockdowns disrupt interstate supply chains, harming businesses in unaffected areas due to material and labour interdependencies.
- Delhi reduced active COVID-19 cases and achieved over 80% recovery through ramped-up testing and healthcare capacity without reimposing lockdowns.
- States should coordinate with the Centre to balance virus containment and economic recovery, rejecting arbitrary weekend or city shutdowns.
- Urban unemployment remains elevated despite national rates returning to pre-COVID levels, underscoring the cost of erratic restrictions.

**By Swati Singh**

* * *

India recently, officially, crossed the one-million mark of confirmed COVID-19 cases. The curve hasn’t flattened, as some *pundits* predicted, and there is still a long way to go before Indians can roam around freely without a mask. 

The nationwide lockdown declared on March 24, 2020, made sense for a while, as the country was, physically speaking, not prepared in terms of its health infrastructure, to handle a crisis of that magnitude. 

The government, however, learnt quickly enough that central planning does not work in the case of a nation-wide pandemic. Businesses, hard-hit by the lockdown, breathed a sigh of relief when Unlock 1.0 was announced, but there was little clarity on what lay ahead. 

Now it is known. The Centre’s decision to re-open the economy and allow states discretion to enforce local lockdowns has led to unintended consequences. State governments are now re-imposing local lockdowns at will. The idea behind these arbitrary actions is the local government’s inability – and morbid fear – to handle a surge in cases. They are, at best, poor attempts to keep the numbers down desperately – even at the cost of endangering public health. 

In doing so, state governments are actively choosing to control the virus, as opposed to reviving their economy. But a lockdown in one state or city not only affects the economy of that state but possibly other, neighbouring states as well. Let’s see how. 

Supply chains are not geographically isolated. For instance, a company manufacturing a fridge in Delhi is probably sourcing the materials from a number of other states. So, while Delhi is not under lockdown, a closed Rajasthan ensures that the passage of the materials is stymied, and the product does not reach its intended destination.

Supply chains can be much more complicated than this one simplistic example, but that’s precisely why local lockdowns are pinching businesses so much.

Experts concur. Dharmakirti Joshi, Chief Economist at CRISIL, brought it out well in his article in the *Indian Express*: ‘’The partial unlocking of the economy and the back and forth on containment measures will continue to pose a hindrance to supply chains, transportation and logistics.” 

Vimal Kedia, a core supplier to Coca-Cola, Procter & Gamble and Nestle, told the *Economic Times* in an interview: “Intermittent closure and reopening of states is disturbing the entire cycle of business. It takes a lot of time to streamline processes back to capacity. The disruptions in one state have a trigger effect on the other markets as well, since there is interdependency in terms of labour and other supplies.” 

It is clear that no state or city can be in a state of total lockdown, which is why a city like Kolkata and a vast state like UP are innovating, opting for a new concept called a \`weekend lockdown’. However, it’s difficult to quantify how beneficial these measures are in containing the spread of the virus. 

Nevertheless, shutting down cities may not be the solution, difficult as the situation is. Delhi, for instance, did not follow an on and off lockdown phase-out policy. A combination of increased testing and a significant expansion in the state’s medical capacity has helped to reduce the number of active Coronavirus cases with a recovery rate of well over 80%, without putting people’s livelihoods at risk.

[

![](https://lh4.googleusercontent.com/jeoF6yNRGeX5Zp_GZ-rFdnePgR_sTU5a-_IDl8dv7HlbtzefFRZ5dQhXNz8N3GoN_ou1enAxIKD5F8dQZ_bhGcjIJOKhS3aNckZuPTrzhX9LYEI8L4lIwjJAZyImIvbUnZ4vlnx6IdQ14t6ToA)



](https://lh4.googleusercontent.com/jeoF6yNRGeX5Zp_GZ-rFdnePgR_sTU5a-_IDl8dv7HlbtzefFRZ5dQhXNz8N3GoN_ou1enAxIKD5F8dQZ_bhGcjIJOKhS3aNckZuPTrzhX9LYEI8L4lIwjJAZyImIvbUnZ4vlnx6IdQ14t6ToA)

The graph above shows Delhi’s progress over the last three months, in comparison to other metro cities. This progress is due to increased testing and massive expansion in healthcare infrastructure. There’s a smart lesson to be learnt from Delhi – states needn’t necessarily make a choice between controlling the virus and reviving the economy.

[

![](https://lh5.googleusercontent.com/Ld1KYdZ6k55hX9mdxzXyIEwfXAZJpF3xnibE7U7ocqGr--6pgqF1NDpKOvICvYCCt06o8879g2kppT-6QklfD3vNN8JQezLjamCnA_bhK5Fkz5k5fDBu_nzi0IJR4o2n7a2w7BfW-gRcNmTXuA)



](https://lh5.googleusercontent.com/Ld1KYdZ6k55hX9mdxzXyIEwfXAZJpF3xnibE7U7ocqGr--6pgqF1NDpKOvICvYCCt06o8879g2kppT-6QklfD3vNN8JQezLjamCnA_bhK5Fkz5k5fDBu_nzi0IJR4o2n7a2w7BfW-gRcNmTXuA)

India’s Coronavirus curve, however, continues to rise. But more important than the graph above is the one given below.

[

![](https://lh3.googleusercontent.com/aj2Z_47w5OymxQkREKFkCMfBZeSL6JYqCQbfH0XXQeB-N6a32ve2rlF8w7CFMPdMJdOJ48dfmpl-855SBysoX9WNMijJ3HEVfN7-w_mtZA-lPhVpfFQTGeQlq76QzSkY_zydMSIYe1ekd3D6_A)



](https://lh3.googleusercontent.com/aj2Z_47w5OymxQkREKFkCMfBZeSL6JYqCQbfH0XXQeB-N6a32ve2rlF8w7CFMPdMJdOJ48dfmpl-855SBysoX9WNMijJ3HEVfN7-w_mtZA-lPhVpfFQTGeQlq76QzSkY_zydMSIYe1ekd3D6_A)

Although the overall unemployment rate in India is back to pre-Corona levels, urban unemployment continues to be high. At this stage, it is difficult to choose between containing the virus and protecting livelihoods. Both need to happen simultaneously, and the experience of Delhi shows us that it is possible.

However, Delhi can’t act alone. The impact on a state’s economy is immense. All states need to come together and make an active effort to realistically handle this crisis rather than trying to create a facade of “good COVID-19 management”. 

Lives and livelihoods are two critical imperatives to India’s Covid management strategy. It’s not an easy task to prioritise both, given India’s economic and infrastructural constraints, but that makes it even more crucial for the Centre and the states to work together to ensure that all sections of our population come out unscathed from the pandemic.

*Read more: [A Libertarian’s View of the Corona-19 Pandemic](https://spontaneousorder.in/a-libertarians-view-of-the-corona-19-pandemic/)*

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## Building temples unlikely to pay poll dividends

Original: https://www.spontaneousorder.in/p/building-temples-unlikely-to-pay-poll-dividends

Author: Spontaneous Order

Published: 2020-08-10T13:02:03.000Z

Topics: ram-temple, bjp-electoral-strategy, communal-polarization, indian-politics

> The Ram temple is coming up today not because the BJP won a great popular victory but because the Supreme Court came out with an odd verdict that slammed BJP vigilantes for destroying the Babri Masjid and categorically named the Muslims as victims, yet ..

**Summary:**

Swaminathan Aiyar dismisses the hype around the Ram temple bhoomi pujan in Ayodhya as a minor event with negligible political impact, arguing it won't deliver electoral dividends for the BJP. He recounts his initial fears post-1992 Babri Masjid demolition that it would spark endless temple-mosque conflicts and BJP dominance via Hindutva, but these proved wrong: Narasimha Rao dismissed BJP governments in four states, leading to BJP defeats in Uttar Pradesh, Madhya Pradesh, and Himachal Pradesh despite expectations of Hindu backlash support. BJP repeatedly failed to mobilize voters on the temple issue, slipping to fourth in UP by the 2000s. The temple proceeds due to a peculiar 2019 Supreme Court verdict naming Muslims as victims yet allocating land, not popular fervor. BJP's 2014 UP and 2019 national successes stemmed from Modi's nationalist image, anti-Pakistan strikes, job promises, and anti-corruption stance, not communalism. Polarization flopped in 10 state elections (Karnataka to Delhi), including a thrashing in Delhi (8/70 seats) despite anti-Muslim rhetoric. Though Indian politics has shifted from Nehruvian secularism, BJP relies on Modi's personal appeal amid economic woes and COVID-19, not temples amid voters' myriad complaints.

**Key points:**

- The 1992 Babri demolition did not propel BJP to lasting dominance, as it lost three of four dismissed state governments despite anticipated Hindu support.
- BJP's Uttar Pradesh revival in 2014 hinged on Modi's nationalism and development promises, not Ram temple agitation.
- Communal polarization failed in 10 consecutive state elections, including a Delhi rout where BJP won only 8 of 70 seats.
- Voters prioritize economic performance and jobs over temple-building, rendering Ayodhya's Ram temple politically insignificant.

**By Swaminathan SA Aiyer**

* * *

The bhoomi pujan for the new Ram temple at Ayodhya has hogged the headlines and has been called a historical event by both Hindutva stalwarts and bitter Hindutva critics, with one group cheering and the other groaning about the transition of a secular India into a BJP-Hindutva dominated one. Forget this hype and razzmatazz. The Ram temple will turn out to be a minor event with no serious political consequences.

When the Babri Masjid was destroyed in 1992, I thought that was a gamechanger that would launch endless attempts by the BJP to demolish hundreds of other mosques and build new Hindu temples on these sites. Having succeeded so spectacularly in harnessing Hindu passions over the Babri Masjid, I was certain the BJP would repeat this again and again to profit politically as a champion of ancient Hindu honour.

Prime Minister Narasimha Rao passed a law saying that henceforth the character of no religious place could be changed. But I thought that law would easily be reversed or amended to irrelevance when the BJP came to power. I feared India was about to descend into Hindu-Muslim terrorism, with vigilantes on both sides accelerating the mayhem. I thought I was vindicated by the post-Babri Mumbai pogrom of Bal Thackeray in Mumbai, to which Muslim don Dawood Ibrahim responded with his serial Mumbai bomb blasts. Many other analysts shared these fears.

Happily, we were proved dead wrong. Narasimha Rao took the gamble of dismissing the BJP-ruled state governments in UP, Himachal Pradesh, Madhya Pradesh and Rajasthan, and holding fresh elections there in 1993. The BJP expected a resounding victory, since it believed mosque’s destruction was very popular with the Hindu masses. Besides, Narasimha Rao’s image had been tarnished by the stock market collapse of 1992 and the claim of master manipulator Harshad Mehta that he had personally bribed Rao with Rs 1 crore.

Yet the BJP was beaten in all four states. With the help of Independents it returned to office in Rajasthan, but was decisively rejected in the other three states, above all in Uttar Pradesh. In the next decade the BJP made repeated efforts to stoke Hindu passion for building a Ram temple on the Babri site, yet lost ground steadily in the state. It slipped to no. 4 position after the SP, BSP and Congress. This proved that mob violence can more easily be harnessed for destruction than construction.

The Ram temple is coming up today not because the BJP won a great popular victory but because the Supreme Court came out with an odd verdict that slammed BJP vigilantes for destroying the Babri Masjid and categorically named the Muslims as victims, yet created a new trust to build a Ram temple. Between 1992 and 2019, the BJP tried hard but failed dismally to excite Hindus about building a new temple in Ayodhya. Indeed its comeback in UP after 2014 was due entirely to Modi’s new image of a nationalist who would get tough with Pakistan, provide millions of new jobs, and squelch Congress corruption. Its comeback had nothing to do with renewed popular passion for a Ram temple.

Modi’s tough nationalism and strikes at Uri and Balakot were highly popular, and paid dividends in the 2019 general election. But the Amit Shah-inspired aim in state elections to raise communal temperatures and label Muslims as pro-Pakistani traitors clearly failed. The BJP fared badly in 10 state elections in a row — Karnataka, Rajasthan, Madhya Pradesh, Chhattisgarh, Odisha, Telangana, Andhra Pradesh, Jharkhand, Haryana and Delhi. The Delhi campaign was the most communal, with the BJP accusing the peaceful, patriotic Muslim agitators at Shaheen Bagh of being Pakistani agents. Yet the BJP was thrashed electorally, winning only 8 of 70 seats.

Although the BJP is India’s biggest party by far, it is nowhere near hegemony. Its strategy of polarising the electorate has yielded dismal electoral outcomes. The centre of gravity of Indian politics has indeed shifted away from Nehruvian secularism, and the Congress has tried (though in vain) to portray itself as a Hindutva-lite party.

Yet the BJP’s poor performance in a string of state elections shows that its strength lies overwhelmingly in Modi’s personal popularity, not in communalism or temple building. India has lakhs of temples to dozens of deities, and one more in Ayodhya will make little difference. Indian voters have a thousand complaints about their rulers, exacerbated by Covid-19 and a sick economy that was already slipping badly before the disease struck. If the BJP cannot succeed on these fronts, it will not be saved by building temples at Ayodhya or anywhere else.

*This article was [originally published](https://timesofindia.indiatimes.com/blogs/Swaminomics/building-temples-unlikely-to-pay-poll-dividends/) on the Times of India website on 9th of August, 2020.*

**Read more: [‘Saare jahan se achha’ is a better economic mantra](https://spontaneousorder.in/saare-jahan-se-achha-is-a-better-economic-mantra/)**

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Food Controls in India: Vestiges of Second World War

Original: https://www.spontaneousorder.in/p/food-controls-in-india

Author: Spontaneous Order

Published: 2020-08-10T12:45:14.000Z

Topics: essential-commodities-act, food-controls, agricultural-markets, market-liberalization

> India attained freedom from British rule on 15 August 1947 but hardly from British rules and regulations. Many restrictions, imposed during world war 2, by the British government continue to govern independent and war-free India.

**Summary:**

India continues to be governed by WWII-era food controls inherited from British rule, such as the Essential Supplies (Temporary Powers) Act, 1946, which evolved into the Essential Commodities Act (ECA), 1955, and state-level Agricultural Produce Markets Committee Acts. These measures, prompted by the 1943 Bengal Famine that killed 3 million and wartime scarcity fears, restrict the sale, purchase, movement, storage, and pricing of food grains, vilifying private stockists as hoarders. A 1948 case saw Bombay halwai Hiralal Manilal imprisoned for six months and fined Rs 1000 for possessing 48 kg extra rice and 219 kg wheat (claimed as corn flour). Brief decontrol in Madras in 1952 under C. Rajagopalachari led to falling prices, prompting other states to follow by 1954, ending rationing and subsidies. However, reimposed controls persist; in 2019, 76,000 raids occurred under ECA, convicting 2,900 individuals. The Economic Survey 2019-20 highlights ECA's failure to stabilize prices and its disincentive to private storage vital for seasonal agriculture. The 2020 ordinance allows controls only on 100% price rises for perishables or 50% for non-perishables, but from a classical-liberal view, such powers inhibit investment and agricultural growth. Gandhi and Rajagopalachari opposed controls morally and practically; India would thrive without ECA, as scarcity fears from war and socialism endure despite prosperity.

**Key points:**

- WWII-era food controls like the ECA 1955 persist in India, restricting grain trade and punishing private storage despite no wartime scarcity.
- 1952 decontrol in Madras caused prices to fall, leading six other states to end rationing by 1954.
- ECA raids in 2019 targeted 76,000 entities, convicting 2,900, yet failed to stabilize prices or encourage private storage.
- Economic Survey recommends abolishing ECA to foster market investment and agricultural growth in a food-sufficient India.

**By Ritika Shah**

* * *

India attained freedom from British rule on 15 August 1947 but hardly from British rules and regulations. Many restrictions, imposed during world war 2, by the British government continue to govern independent and war-free India. The fear of scarcity and runaway inflation dictate many aspects of policy, most notably in the case of food commodities.

In October 1948, the shop, godown and residence of Hiralal Manilal, a *halwai* in Bombay, were raided by an Inspector of Rationing. The Inspector had found 48 kgs of rice more than the legally permissible quantity for a family of nine. Hiralal was also in possession of over 219 kgs of wheat at his godown. Hiralal’s counsel argued that the additional rice at his home was for the six servants that worked at his shop and the flour was not wheat flour but corn flour. The Judge was not convinced and convicted Hiralal for violating the terms of Essential Supplies (Temporary Powers) Act, 1946. Hiralal was imprisoned for six months and fined Rs 1000.

During world war 2, the world came face to face with stemming hoarding and managing uninterrupted food supplies. In India, the Bengal Famine of 1943—killing 3 million Bengalis—had imprinted the population with images of mass hunger and deprivation.

The British government in a state of alarm adopted a system of controls, rationing and state procurement of food grains from a policy of laissez-faire in 1942. Even the staunch supporters of free trade found themselves hard pressed to argue against systematic controls. For instance, the governor of Bihar, T. Stewart, wrote in a letter to the viceroy of India, Linlithgow: “By conviction I hold with Adam Smith but in a crisis like this I am prepared to accept 100% control.” ([Indivar Kamtekar](https://www.jstor.org/stable/pdf/26552665.pdf?ab_segments=0%252Fbasic_SYC-5187%252Ftest&refreqid=excelsior%3A9981fdc43c4fc11ca0068e81b27cb7bd) 2017)

Unfortunately, even though the war got over, the war-time measures remained (and remain till date today). The Essential Supplies (Temporary Powers) Act, 1946 was one among the many injunctions Independent India inherited. The 1946 Act was modified to what is called the Essential Commodities Act 1955. Besides, the state governments adopted the Agricultural Produce Markets Committee Acts restricting the sale and purchase of agricultural products outside the government-mandated markets. Together, these allowed the government to sale, purchase, movement, storage and price of grains.

Few dared to argue against these controls. The most vocal and influential was Gandhi. Concerned that such restrictions would dilute moral values and lead to “fraud, suppression of truth, intensification of the black market and to artificial scarcity”. Taking a moral position, in a 1947 letter, he argued: 

*I have not the least doubt in my mind that food control must go now—as soon as practicable. If a few Indians die in consequence, I will shed no tears. But the idea that we should share the available food equally cannot be spread through laws, and even if legislation were to succeed in doing so, I would not praise it. On the contrary, I would not hesitate to charge it with having done violence to the human spirit.*

C. Rajgopalchari, was perhaps the first to rise above the scathing images of mass hunger and support free trade fearlessly. In a 1953 article, [Sovani](https://www.jstor.org/stable/pdf/3024485.pdf?ab_segments=0%252Fbasic_SYC-5187%252Ftest) critically calls him an astute politician. Why? Because he suspended rationing and brought a halt to the procurement system in the state of Madras in 1952. As prices fell, states like Bihar, Uttar Pradesh, Hyderabad, Mysore, Saurashtra and Madhya Bharat followed suit. At the end of 1954, rationing was lifted entirely, and there were no subsidies.

However, the phase of decontrol was short-lived; whenever prices short up, the state quickly re-emerged from the contours to procure, distribute, and interfere with the market system. 

Till date, the government continues to loathe stockists, vilifying them as hoarders; in 2019, 76,000 individuals’ enterprises were raided, according to the Economic Survey 2019-20. Over 2,900 men and women, like Hiralal, were convicted under the Essential Commodities Act 1955.

The Economic Survey dedicates a chapter to the ineffectiveness of these measures. The ECA has not been successful in stabilizing prices and has dis-incentivized private storage of food grains—a necessity emerging from seasonal nature of agriculture markets. Yet, in the 2020 ordinance, the government retains the power to interfere with the market, albeit in “extraordinary” circumstances. Only in case of a 100% increase in the price of perishable goods and 50% increase in non-perishables (over the price in the preceding 12 months or average retail price of the past five years) can/will the government impose price or stock controls. 

In a freer world, with infrequent emergencies, and sufficient food production, the power to impose such controls inhibit market investment, handicap market development and hence agricultural growth. As the Economic Survey suggests, the country would be better off without the ECA. The measures that were adopted temporarily have stayed permanently. But unfortunately, the fear of price rise and scarcity, associated with times of war and carried over by our socialist leaders, has seeped in so deep that no degree of external prosperity undoes the fear of impoverishment.

**Read more: [An Ode to the Krishi Mandis of India](https://spontaneousorder.in/an-ode-to-the-krishi-mandis-of-india/)**

* * *

**About Ritika Shah**

Ritika has a bachelors in economics (honors) from Delhi College of Arts and Commerce, Delhi University. Prior to joining CCS, she worked as a research analyst with Cians Analytics and Rocsearch, for over 2.5 years. She developed an inclination for the social sector during her college years, when she interned with various organizations including Teach for India, Becoming I and Centre for Equity Studies. She has a keen interest in reading, travelling and yoga. Her areas of focus include economics, philosophy and theology.

## SO Musings: Making Democracy Work

Original: https://www.spontaneousorder.in/p/making-democracy-work

Author: Spontaneous Order

Published: 2020-08-07T12:24:27.000Z

Topics: separation-of-powers, political-corruption, democracy-reform, institutional-design

> In order to make democracy work, a morality development programme is futile and structural changes in the political system might just yield good results.

**Summary:**

The republished 1994 article by Y.D. Altekar argues from a classical-liberal perspective that making Indian democracy work demands structural institutional changes, particularly separating the executive from the legislature, rather than futile morality development programs. Analogizing to ineffective genetic engineering of mosquitoes (only one of twenty species transmits malaria) and religions' failure over six millennia to morally perfect humanity, Altekar asserts that systems must act as a 'vaccine' to limit damage by those in power without relying on saintly leaders. The proposal reduces legislators' enormous post-election bargaining power, making politics less attractive to self-seekers, and establishes real checks and balances via legislative scrutiny of executive actions. It counters municipal counterexamples by noting executives like Pune's Commissioner Ajay Dua face pressures from ruling party corporators via state government ties, lacking true independence. Implementation requires widespread public discussion to forge consensus, pressuring MPs and MLAs to enact reforms, as seen in Britain's Parliament curbing the House of Lords.

**Key points:**

- Separate executive from legislature to strip elected legislators of bargaining power and enable genuine checks and balances against corruption.
- Morality development programs are doomed like genetic mosquito alteration or religious efforts over millennia, failing to cover entire populations.
- Municipal systems fail because executives remain beholden to legislative pressures through party affiliations and state government appointments.
- Build public consensus on reforms through discussion to compel self-interested MPs and MLAs to implement structural changes.

**By Spontaneous Order**

* * *

*Corruption in the political sphere has been an issue of debate since time immemorial. While some thinkers have argued in favour of engineering a morally upright society, others have considered approaches that target human nature in such a way that the cost of being corrupt is too high. The Liberal stand has also been that of changing and modifying institutions to limit corruption and to make democracy work.* 

*Produced below is an article by Y.D Altekar titled “Making Democracy Work” published in the October 1994 edition of the Freedom First magazine. The author explains coherently that, in order to make democracy work, a morality development programme is futile and structural changes in the political system might just yield good results.* 

In an earlier article, the difficulties we experience with the parliamentary system were discussed and it was suggested the separation of the Executive from the Legislature would solve our difficulties to a great extent (*Freedom First, No. 417, April-June 1993)*. Personal discussions of the topic with various people revealed many doubts. Some of the more important ones are given below along with the answers. Any system we devise is bound to be subverted by self-seekers for their personal ends. Is it not better, therefore, that we should concentrate on improving the moral standards of the people? 

Some time back there was a news item in the papers reporting that some scientists were trying to genetically alter the mosquito such that it will be incapable of harbouring the malarial parasite. The futility of this approach to malarial control should be apparent when we consider that out of some twenty odd species of the mosquito only one is capable of transmitting the disease. The genetically engineered mosquito will form just another harmless addition to the species and, unless all the anopheles are genetically transformed, will in no way reduce the danger. The wholesale destruction of the mosquito by insecticides has also not succeeded and the emphasis now is on developing a vaccine to contain the damage.

Any morality development programme is also similarly doomed as it is difficult to cover the entire population by any such programme. Practically all world religions have found over six millennia that it is impossible to cover the whole of the human race with morality building activity and governments become necessary to contain the bad element. Weeding out entirely the troublesome element is also not possible. Lord Parshuram made seven attempts to rid the world of Kshatriyas but achieved no lasting success! 

Our attempts should, therefore, be on the lines of developing a vaccine i.e. devising a system which does not need holy men at the helm and which will reduce the damage the men in power can do. The proposed system attempts to achieve this by : 

a) taking away from the legislators the enormous bargaining power that they secure on winning an election, so that getting elected will cease to be such a profitable business as it is today, thus making it less attractive to the self-seekers;

b) getting the legislature to scrutinize and control the executive action – *real* ‘checks and balances’.

If the separation of executive and legislative powers is expected to solve the problems of corruption, how is it that in municipalities where the executive and legislative functions are separate, we continue to face the same problems? 

The key requirements are: the executive and the legislature must be separate and independent of each other. Although the Municipal Commissioner is not elected by the corporators and does not need to have majority support, he cannot be said to be free from pressures that the corporators, especially those belonging to the ruling party, can exert.

Despite the enormous popular backing he enjoyed, Commissioner Ajay Dua, was transferred out of Pune because the corporators opposed his attempts to streamline the municipal administration. The Commissioner is appointed by the state government and the state executive are members of the Legislature. Moreover, ‘party’ feeling is strong hence, the corporators belonging to the ruling party can always pressurize the Commissioner through their party affiliation at the state level. The Commissioner is thus, not quite independent of the corporators. Hence the difficulty.

The changes proposed can be brought about only by MPs and MLAs who will clearly not be interested in them. How do we go about getting the changes implemented? This, indeed, is a very valid point. Whatever changes we need in the system have to be introduced by our MPs and MLAs. And they are bound to resist the changes.

However, we have not yet reached a point where we have to think about the ways and means of getting the changes introduced. We have yet to agree on what changes we need. These need to be discussed widely, and a consensus evolved, first on the need for a change and then what exactly these changes ought to be. Once we get a majority public opinion in favour of these proposals, it will be difficult for MPs and MLAs to resist them. After all, it will be recalled that the British Parliament curtailed the powers of the House of Lords, with the concurrence of the House of Lords. 

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Why India needs to tread with caution with ‘Atmanirbharta’ and ‘Vocal for Local’

Original: https://www.spontaneousorder.in/p/why-india-needs-to-tread-with-caution-atmanirbharta-vocal-for-local

Author: Spontaneous Order

Published: 2020-08-06T16:19:40.000Z

Topics: atmanirbhar-bharat, protectionism, free-trade, make-in-india

> Ideologically, we have simply repackaged Make in India and served it with renewed enthusiasm. This should not come as a surprise; after all this nation is built on the back of ‘Swadeshi’ and ‘Self-Reliant India’.

**Summary:**

India must approach 'Atmanirbharta' (self-reliant India) and 'Vocal for Local' with caution, as these slogans repackage the failed 'Make in India' initiative rooted in protectionist 'Swadeshi' ideals unsuitable for a globalized economy. The author argues that 'Make in India' led to plummeting new project investments since 2015, sluggish FDI in manufacturing, stagnant employment and wages, and India's mere 2% share of world exports. High tariffs averaging 17.1%—among the world's highest per WTO—shield inefficient MSMEs but foster complacency, as seen in the recent ban on global tenders up to Rs 200 crore to protect them from 'unfair' foreign competition. Protectionism contradicts building competitive supply chains requiring technology and expertise. Instead, India should embrace free markets and trade, allowing competition to incentivize local innovation—big chains introduce products that even benefit small grocers. Dismantle barriers, avoid central planning which lacks local knowledge, and let entrepreneurs drive growth. Positive elements like privatizing non-strategic PSEs, PPPs for 6 airports, space sector opening, and facilities for farmers and housing offer true self-reliance paths.

**Key points:**

- 'Make in India' failed with investments dropping since 2015 and sluggish manufacturing FDI.
- India's 17.1% average tariffs and 2% world export share make self-reliance improbable without free trade.
- Banning global tenders up to Rs 200 crore protects inefficient MSMEs, breeding complacency rather than competitiveness.
- Embrace free markets and competition to incentivize local producers instead of protectionism.
- Prioritize privatization of PSEs and PPPs in sectors like airports and space for genuine growth.

**By Dhruvit Shah**

* * *

On May 12, Prime Minister Narendra Modi delivered his fourth COVID-19 address to the nation. This speech was very distinct from the previous three, for it came with a new vision, a new promise of a new India, accompanied by two very catchy slogans: “A*tmanirbhar Bharat*” and “*Vocal for Local*”. 

The Prime Minister asserted that based on these underlying principles, India would dominate the 21st century, as it is destined to do so. Upon looking closely, both these slogans connote the same government programme: Make in India. 

Ideologically, we have simply repackaged Make in India and served it with renewed enthusiasm. This should not come as a surprise; after all this nation is built on the back of *‘Swadeshi’* and *‘Self-Reliant India’*.

Atmanirbharta is a reiteration of the same philosophy rather than enunciating a new policy. India’s founding fathers propagated this ideal for the first 40 years of the country’s independence. Unfortunately, it remains as unsuitable today as it was 70 years ago. 

These ideals are hardly ideal for India. The country’s manufacturing capabilities and supply chains are still not up to the mark and their robust makeover has left much to be desired. There is a need to acknowledge that manufacturing involves a fierce combination of technology and expertise and it takes a lot of time to expand the scope of local production in a globalised world. The unsuccessful attempt at ‘Make in India’ is a shining example of what happens when this winning combination is not present. 

So what happened with ‘Make in India’? [Investments in new projects dropped since 2015](https://www.livemint.com/news/india/new-investment-plunges-to-a-15-year-low-1561976363936.html) and while we courted impressive foreign direct investments (FDI), money coming into the manufacturing sector [remained sluggish](https://m.rbi.org.in/Scripts/AnnualReportPublications.aspx?Id=1278).

Not to mention, the courage it takes to see our [employment numbers](http://www.mospi.gov.in/sites/default/files/publication_reports/Annual%20Report%2C%20PLFS%202017-18_31052019.pdf) and [wages per worker](http://www.mospi.gov.in/sites/default/files/publication_reports/Annual%20Report%2C%20PLFS%202017-18_31052019.pdf).

If that was not enough, India imposes tariffs on cheap consumer goods and keeps services out of the country. In fact, World Trade Organisation (WTO) has rightly pointed out that India’s tariffs are one of the highest in the world, with an average rate of 17.1%, according to WTO’s World Tariff Profiles.

This sounds like ‘Protect in India’ as columnist Swaminathan Aiyar has mentioned. So how can India prepare its MSMEs for the world while aggressively shielding them with protectionism and import duties? How can India attract investors while increasing trade barriers? 

She cannot because these things scarcely work in exclusion. Currently, India accounts for about 2% of the total world export and so the idea that it can suddenly become self-reliant and a leader in trade is not just highly improbable, but virtually impossible. If India does not dismantle its protectionist system, ‘Vocal for Local’ will have the opposite effect of what it intends to do and in turn, hurt Indians. 

India needs to let the free market do its work while simultaneously, continue to strengthen its local capacities. Protectionism doesn’t necessarily help the local economy. People will always buy the best of something, not just because the product is made in India. 

When a certain player brings in a new or a better product, other players and entrepreneurs are incentivised to keep up. The local grocery store would not have half the products if some big chain had not introduced them first; as a matter of fact, the local grocery store would lose out on half its sales as well.  

This is the essence of the free market that helps small players rather than hurting them. Right now, under the ‘Atmanirbhar Bharat Abhiyan’ global tenders up to Rs 200 crore are being [disallowed by the government](https://economictimes.indiatimes.com/news/economy/policy/finance-ministry-confirms-restrictions-on-global-tenders-for-amounts-up-to-rs-200-crore/articleshow/76134570.cms). Why? To protect MSME businesses that face ‘unfair competition’ from foreign companies. These MSME companies are not some nascent start-ups that need government help; they are rather inefficient age-old businesses that India protects at the cost of her citizens. 

Provisions like these make them more complacent and ensure that they never become globally adept. India must strike down such provisions and free up the economy to ensure the prosperity of her local producers. Embracing free trade policies will drive the Indian economy faster and better. 

Lastly, none of these steps should involve central planning. The government does not have the resources or the knowledge to implement an initiative of this magnitude. One of the key reasons why ‘Make in India’ didn’t succeed was that officials in Delhi did not have the knowledge of the domestic economy and its advantages; neither were they well-equipped and well-prepared to make the lion roar. 

India can truly transform, and this is the perfect window to mop up the spilt milk, but we must not fall for the fallacies and delusions of the past. The ‘Atmanirbhar Bharat Abhiyan’ is not without its merits; the government intends to privatise all non-strategic PSEs and has decided to open up various sectors via PPPs (Public-Private Partnerships). Under the PPP model, the government has decided to auction off 6 airports, build a research reactor for the production of medical isotopes, establish irradiation technology facilities to assist farmers, convert government-funded housing to affordable rental housing complexes and best of all, it has opened up the space sector. Such measures will positively make our nation ‘Atmanirbhar’ and then India will dominate the 21st century as she is destined to do so. 

Read more: **[‘Saare jahan se achha’ is a Better Economic Mantra](https://spontaneousorder.in/saare-jahan-se-achha-is-a-better-economic-mantra/)**

* * *

**About Dhruvit Shah**

Dhruvit is an Engineering Graduate based out of Pune. Known to be a person who has always had a soft corner for Politics, Economics, and Entrepreneurship, he is an avid debater. Dhruvit firmly believes in the quote that nothing is more important to a democracy than a well-informed electorate and hopes that every young person participates in the public discourse. His dream is to venture into nuclear power someday.

## ‘Saare jahan se achha’ is a better economic mantra

Original: https://www.spontaneousorder.in/p/saare-jahan-se-achha-is-a-better-economic-mantra

Author: Spontaneous Order

Published: 2020-08-04T17:35:46.000Z

Topics: aatmanirbhar-bharat, education-reform, china-tech-competition, trade-liberalization

> India will truly have to open up. Aatmanirbhar or self-reliance does not mean protectionism. That will get India nowhere. It is a throwback to the 1970s, the period of failed economics for this country. The real battle between India and China will be te..

**Summary:**

Swaminathan S.A. Aiyar argues that India's 'Aatmanirbhar' (self-reliance) mantra revives Nehru's failed protectionism, dooming it to lag behind China's technological dominance, and advocates instead for 'Saare jahan se achha'—becoming the world's best through global collaboration. China leads in 5G (Huawei ahead of Ericsson, Samsung, Nokia), solar panels (JinkoSolar), batteries, and microchips (Taiwan Semiconductor a generation ahead of Intel), with Xi Jinping targeting top global position by 2025 in AI, robotics, and space. The US won the Cold War via superior tech, unlike the self-sufficient USSR's failure. India cannot compete behind tariff walls but must join democracies in high-tech supply chains, leveraging high skills to become indispensable. Critiquing the New Education Policy, Aiyar highlights government schools' failures—teachers absent half the time per Pratham surveys, India second-last in PISA—driving parents to private options. He urges using RSS's Vidya Bharati network (5,241 elementary schools, 2,635 high schools, 3 million students) to build world-class education rivaling China's.

**Key points:**

- Abandon 'Aatmanirbhar' protectionism, which echoes Nehru's and USSR's failures, and pursue global collaboration to lead in technology against China.
- China dominates in 5G, solar, batteries, and AI, outpacing the US in key areas like microchips and drones.
- Reform education by addressing government schools' dismal outcomes (PISA second-last, high teacher absenteeism) and expanding RSS Vidya Bharati schools for excellence.
- India wins by producing the world's best goods through alliances with democracies, not self-sufficiency behind tariffs.

**By Swaminathan SA Aiyer**

* * *

*India will truly have to open up. Aatmanirbhar or self-reliance does not mean protectionism. That will get India nowhere. It is a throwback to the 1970s, the period of failed economics for this country. The real battle between India and China will be technological, an area where our neighbour has made huge strides, even beating the US. A shining example of our bad planning is the New Education Policy, which does not take into account government schools that have failed to become centres of excellence and do not attract the best students, who prefer private schools. Can Indian students compete with Chinese students in the Programme for International Student Assessment or PISA, organised by the OECD? The sad fact is that they can’t.* 

US secretary of state Mike Pompeo says a new Cold War has already begun with China seeking global hegemony that must be combated by a combined front of democracies. Sadly, President Trump has wrecked trade and political relations with Europe, Japan, India and other traditional allies. But the Chinese hegemonic threat will remain the big challenge of the 21st century. In this context, clashes In the Galwan Valley or Doklam are tiny, irrelevant skirmishes. The real battle will be fought and won at the highest technological level.

China has made huge technological strides even as the USA loses steam. India has woefully under-appreciated this. India’s new mantra of Atmanirbhar (self-sufficiency) is an unfortunate throwback to Nehru’s failed self-sufficiency. Industries cowering behind protective trade walls will never beat China economically or strategically. Indian businessmen still accuse China of using cheap labour and subsidies to dump cheap exports. Stop this nonsense. Far from specialising in cheap-labour goods, China has become the world’s technological leader in many areas. In 5G, the telecom of the future, China’s Huawei is well ahead of competition from Sweden’s Ericsson, Korea’s Samsung or Finland’s Nokia. Amazingly, no US company is in contention.

For decades, Intel was world leader in microchips, doubling their computing power every two years. But suddenly Intel has fallen a full generation behind Taiwan Semiconductor in microchips. When France’s Notre Dame cathedral caught fire, Chinese drones were used to guide firefighters because they were the best. JinkoSolar is the world biggest, best supplier of solar cells and panels. Chinese battery companies are forging ahead.

President Xi plans to make China the world’s top power by 2025 in 10 fields, including artificial intelligence, robotics and space technology. China is already number one or two in many of them. The US won the Cold War because of superior technology. The Soviet Union had areas of excellence but overall lagged far behind the West. So, it could never attain hegemony.

The USSR followed the Atmanirbhar philosophy of trying to make everything at home. That proved a colossal failure, an expanded version of Nehru’s failure in India. Success means becoming the best in the world, and that entails collaboration with top allies in supply chains. The right goal is not “Atmanirbhar” but “Sare jahan se achha (best in the world)”. India cannot compete with China by producing highcost goods behind high tariff walls. It can win only by producing the best goods in the world by developing the best technology in collaboration with the best collaborators. This means not self-sufficiency but joining hands with other democracies to create high-tech value chains in which India becomes indispensable because of its high skills.

Today India produces millions of useless, unemployable graduates. A new education policy has just been unveiled with details enough to occupy hundreds of pages of analysis. But it fails altogether to tackle the dismal fact that government schools are so bad that poor people pull children out of free government schools and put them in expensive private schools that are scarcely better but give desperate parents some hope whereas government schools give none. Government teachers lack passion, accountability or commitment, are absent half the time, and so educational outcomes remain dismal year after year in Pratham surveys. When India participated in the global PISA school competition, it came second last. Can such a country compete with China?

Narendra Modiji, I am no RSS fan. But you could use the passion and commitment that the RSS undoubtedly has to create world class schools that the formal state education system cannot. The RSS’ Vidya Bharati school network now has 5,241 elementary schools and 2,635 high schools with over 3 million students. Its original aim was to inculcate Hindutva philosophy and help create future RSS cadres. But without sacrificing this aim, why not expand this massive educational network to produce centres of excellence that can beat the Chinese?

*To read the rest of this article, [click here](http://swaminomics.org/saare-jahan-se-achha-is-a-better-economic-mantra/). This article was originally published on the Times of India website on 2nd of August, 2020.*

Read more: [A Case Of Flawed And Misogynistic, Abortion Laws In India](https://spontaneousorder.in/a-case-of-flawed-and-misogynistic-abortion-laws-in-india/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## A Case Of Flawed And Misogynistic, Abortion Laws In India

Original: https://www.spontaneousorder.in/p/a-case-of-flawed-and-misogynistic-abortion-laws-in-india

Author: Spontaneous Order

Published: 2020-08-04T17:05:42.000Z

Topics: abortion-laws, womens-rights, personal-liberty, maternal-health

> While it has become a cliché to say that Covid-19 has affected everyone across the globe, it would not be an overstatement to suggest that some sections have been more seriously impacted than the others. Like Indian women, wanting to shed unwanted pre...

**Summary:**

India's abortion laws under the Medical Termination of Pregnancy (MTP) Act, 1971, and its 2020 amendment are flawed and misogynistic, denying women true autonomy over their reproductive choices by vesting decisions in doctors, courts, and medical boards rather than the women themselves. The Act permits abortions up to 20 weeks (extended to 24 for rape survivors, minors, incest victims, and differently abled women) only under strict conditions like threats to life/health, fetal abnormalities, rape, or contraceptive failure in married couples, with post-20-week cases needing court approval. This bureaucratic control forces women into unsafe abortions, causing 13 daily deaths—the third leading cause of maternal mortality at 8% annually—and 6.4 million terminations yearly. COVID-19 lockdowns shut clinics, spiking quackery and projecting 834,042 additional unsafe abortions and 1,743 maternal deaths. Landmark cases like Datar v Union of India highlight judicial failures in recognizing women's rights. From a classical-liberal perspective, such laws violate fundamental rights to life, liberty, and personal choice; lawmakers must repeal gestational limits and approvals, empowering women to control private matters for equality, justice, and national potential.

**Key points:**

- India's MTP Act denies women abortion autonomy by requiring doctor approvals up to 20 weeks and court permission beyond, leading to unsafe practices.
- Unsafe abortions kill 13 women daily, contribute 8% to maternal deaths, and affect 6.4 million pregnancies yearly.
- COVID-19 lockdowns are projected to cause 834,042 more unsafe abortions and 1,743 additional maternal deaths due to clinic closures.
- The 2020 MTP Amendment extends limits to 24 weeks for select groups but retains conditional medical boards, perpetuating control over women's choices.
- Lawmakers must eliminate gestational caps and approvals to uphold women's liberty and reproductive rights.

**By Madiha Islam**

* * *

While it has become a cliché to say that Covid-19 has affected everyone across the globe, it would not be an overstatement to suggest that some sections have been more seriously impacted than the others.  

Like Indian women, wanting to shed unwanted pregnancies.  

In order to make medical facilities and space available to those hit by the Coronavirus pandemic, India put abortion under the non-essential medical services category. Wisely, the government changed its decision while re-considering its grave importance. 

However, the damage seems to have been done. During the lockdown, most abortion clinics have been shut down and an increasing number of women have been forced to resort to quackery using sticks, roots and herbal medicines, which have zero credibility. There are also those who have taken recourse to abortifacient medicines that are easily available over the counter. 

First a look at some grim statistics: 

\*\*Nearly 6.4 million pregnancies are terminated every year in India. 

\*\* 13 women die every day in India because of unsafe abortion. 

\*\* It is the third leading cause of maternal deaths, contributing to 8% of all such casualties annually

Dr. Aisha Perveen, Assistant Professor at Jamia Hamdard, says that she has seen many complications due to unsafe abortions, including a ruptured uterus and intestines. 

The Coronavirus, has, if anything, worsened the situation. A report by the Foundation for Reproductive Health Services, India, estimates that the pandemic situation could lead to an additional 834,042 unsafe abortions and 1,743 maternal deaths. 

Indian laws relating to abortion are anything but uncomplicated. The right to abortion comes under a human right imperative and cannot be overlooked even when the country is in a state of an emergency. The pandemic lockdown has made it even more tedious than it already was for women to get a safe abortion. 

According to the Medical Termination of Pregnancy (MTP) Act, 1971, a woman cannot get an abortion done after 20 weeks into pregnancy, except when her life is in danger. A layman, unaware of the basic foundations of women rights, may perceive the MTP Act as very liberal and supportive of women’s choices and rights. 

However, a closer look reveals that the idea of choice that it offers, is merely an illusion. The conditions under which a woman is allowed by law to get an abortion are:

-   When pregnancy poses a serious threat to the mother’s life or to her physical or mental health.
    
-   The foetus has severe abnormalities
    
-   Pregnancy is a result of rape/sexual assault
    
-   The pregnancy was caused because of the failure of contraceptives in case of married couples.
    

The decision to abort does not lie in the hands of the mother, but of the doctor. Any abortion to be performed after 20 weeks needs the permission of a court. 

India’s history, when it comes to abortion rights, is patchy, to say the least. 

The Datar v Union of India is a landmark case in this regard. The case was filed by Mumbai-based Dr Nikhil Datar in the Supreme Court to appeal that the then existing time limit of 20 weeks of foetal age for termination of pregnancy violates a woman’s fundamental right. 

This was done after the Bombay High Court in 2008 failed to grant permission for MTP to one of his patients, a pregnant woman whose foetus was diagnosed with severe abnormalities in her 24th week. She was advised to get the foetus aborted, but the court failed to acknowledge her mental anguish and denied her the right to do so. 

This and many similar cases forced Dr Datar and the Human Rights Law Network to go to the Supreme Court in appeal. When several similar medico-legal histories came to the limelight, the government could no longer ignore the necessity of addressing this clause in the MTP Act. 

Naturally then, a sense of optimism arose in Indian women after the Medical Termination of Pregnancy (Amendment) Act, 2020, was passed in March 2020. Under this Act, the gestational period under which a woman could get an abortion was increased from 20 to 24 weeks – yet again with certain conditions and applicable only to differently abled women, victims of incest, rape survivors and minors. 

Why are women resorting to unsafe abortions? Medical officer Dr. Farheen believes it is on account of the restrictions imposed by law. According to her, it “is a tedious process to get permission from the court to perform an abortion past 24 weeks and it adds to increase the period of gestation to few more weeks, which raises the risk to the patient.”  

So why should there be a gestation period at all? Dr. Deepa Jaiswal, a gynaecologist working at the Life Care Hospital in Gorakhpur, gets cases related to complications from unsafe abortions almost every month. She is candid enough to admit that out of 67% unsafe abortions in India, 50% don’t even bother to consult a doctor! 

Another provision of this MTP amendment includes the formation of a medical board in each state, which will decide whether an abortion can be performed or not. At one stroke, this provision takes India back by a thousand years, when private matters did not lie in the hands of the affected, but with their representatives. 

The lawmakers have failed to implement laws that allow women to have control over issues that are private and personal. The fundamental right to life, including personal liberty, should provide for a woman to be able to make her own reproductive decisions and choices. 

Economically, the annual cost of treating major complications from unsafe abortions is considerably high. Says Sophia Pierre-Antoine, programme coordinator of the Young Women’s Christian Association, “A big part of being a feminist is to make sure that young women know that they have rights.”

It would be unrealistic to expect a drastic change in the outlook of the legislature, once so heavily clouded by misogynistic beliefs and gender inequality, that even women failed to recognise the fact that they have exercisable rights. 

What is needed from lawmakers is implementation of laws that adhere to fundamental values such as equality, justice, liberty and freedom of choice. It is time for India to break this cycle of control and enable women to make their own decisions and in doing so, rise together as a nation operating to its full potential. 

Read more: [Swatantra Party had a lot to say on China after 1962. If only Nehru had heard them](https://spontaneousorder.in/swatantra-party-had-a-lot-to-say-on-china-after-1962-if-only-nehru-had-heard-them/)

* * *

**About Madiha Islam**

Madiha Islam is a second-year student of Politics and International Relations at the University of Bath, England. She is an alumna of Kasiga School, Dehradun. She is currently Interning with the communications team of Centre for Civil Society, one of India's leading think tanks. From her school days, Madiha has always participated in activities that are directed towards bringing positive changes in society.

## Swatantra Party had a lot to say on China after 1962. If only Nehru had heard them

Original: https://www.spontaneousorder.in/p/swatantra-party-had-a-lot-to-say-on-china-after-1962-if-only-nehru-had-heard-them

Author: Spontaneous Order

Published: 2020-08-03T15:59:50.000Z

Topics: swatantra-party, china-threat, non-alignment, national-security, democracy-at-war

> The recent incursions by China into the Indian territory has been compared with 1962 and 1967 by many military historians. But what is not so widely known is how independent India’s first classic liberal party, the Swatantra Party’s leaders such as C.

**Summary:**

The Swatantra Party, independent India's first classical-liberal party, responded to the 1962 Sino-Indian War by vindicating its long-standing distrust of Communism, criticism of Jawaharlal Nehru's non-alignment policy, and advocacy for alignment with the Western bloc. Leaders like C. Rajagopalachari, Minoo Masani, and N.G. Ranga foresaw the 'two-front' war threat from China and Pakistan, urging resolution of tensions with Pakistan—including support for Ayub Khan's 1959 joint defense proposal—to refocus defenses northward. They criticized Nehru and Defense Minister V.K. Krishna Menon for policy failures that squandered India's comparable economic power (minimal GDP gap per Rajesh Rajagopalan), demanding offensive measures: best weapons, air force involvement, anti-aircraft defenses, Western military aid, and insistence on Chinese withdrawal to 1957 positions before negotiations. Foreign policy critiques highlighted non-alignment's futility amid Soviet support for China and sparse NAM backing. Amid war, they championed preserving democracy—scrutinizing Defence of India rules, enabling opposition criticism and press freedom—while calling to ban the Communist Party as 'fifth columnists.' Their prescient ideas, from Quad-like coalitions to Taiwan alliances, prefigure today's balancing strategies against China, underscoring the need to emulate their realistic, liberty-preserving approach.

**Key points:**

- Swatantra Party criticized Nehru's non-alignment and gradualism, advocating Western alignment for military aid and offensive border strategies to counter China effectively.
- Leaders foresaw two-front war risks, urging Pakistan reconciliation and joint defense against Chinese expansionism.
- They demanded preservation of democratic rights during war, including opposition scrutiny and press access, while pushing to ban Indian Communists as security threats.
- Swatantra proposals anticipated modern measures like Quad alliances, Taiwan ties, and Tibet leverage for balancing China's rise.

**By Sanjeet Kashyap**

* * *

The recent incursions by China into the Indian territory has been compared with 1962 and 1967 by many military historians. But what is not so widely known is how independent India’s first classic liberal party, the Swatantra Party’s leaders such as C. Rajagopalachari and Minoo Masani reacted to the foreign policy challenge and spoke of preserving liberty amid the national security threat during the 1962 war.

For Swatantra leaders, the 1962 war with China vindicated their distrust of Communism, criticism of Jawaharlal Nehru’s non-alignment policy, and advocacy of cordial relations with the Western bloc. They even foresaw what is today known as the threat of a ‘two-front’ war with China and Pakistan.

The Swatantra Party’s apprehensions of the Chinese intent made it critical of Nehru as well as of the then defence minister V.K. Krishna Menon who, its leaders believed, imperilled national interest. 

Military setbacks at the border prompted the parliamentary board of the Swatantra Party to take an offensive approach against China. The recommended measures included the provision of best weapons to the army, active involvement of air force as support measure, and enactment of anti-aircraft defences. There are at least two possible arguments why.

Historian Srinath Raghavan makes it clear in his [analysis](https://books.google.co.in/books?id=EbtBJb1bsHUC&lpg=PR4&pg=PA316#v=onepage&q&f=false) that the gradualist escalatory approach of Nehru failed to work in China’s case. By extension, an offensive military and diplomatic strategy might have plausibly succeeded. Such a claim is supported by the second argument on the relative power gap between India and China in 1962. According to Rajesh Rajagopalan, professor of international politics at Jawaharlal Nehru University, in terms of GDP, the gap between the two countries was not significant. Additionally, even the GDP multiplied by GDP per capita approach to [measure power](https://www.mitpressjournals.org/doi/full/10.1162/isec_a_00328) would pretty much yield the same outcome. Hence, India’s defeat in 1962 was partly an outcome of the failure of converting [latent (economic) power](https://books.google.co.in/books?id=lDzCD_C_ipoC&lpg=PA1&pg=PT77#v=onepage&q&f=false) into military power. This failure stemmed from a moderate policy approach that sought to avoid confrontation with China.

For Swatantra Party leaders, their advocacy of a firm stand on China came as a corollary to the critical targeting of Nehru’s policy. Speaking in the parliamentary debate on 8 November 1962, N.G. Ranga chided the Nehru government for its failure in the elementary duty of defence preparations. He further laid out the demand for the Chinese to go back to their positions of 1957 as a prerequisite for any diplomatic negotiation. Aware of the problem of inadequate military supplies, both Ranga and Masani insisted on procuring military aid from friendly countries in the Western bloc.

**Foreign policy**

The Swatantra Party’s approach to foreign policy was characterised by the criticism of Non-Alignment as both policy and movement, recognition of China as the primary strategic challenge in the neighbourhood, distrust of the Communist USSR as a revolutionary state, and vocal support for the Indian tilt towards the US-led bloc in the Cold War.

Writing in the 11 November 1962 issue of *Bhavan’s Journal*, Swatantra politician K.M. Munshi criticised Indian foreign policy for its sense of righteousness and complacency. The self-righteous adherence to non-alignment, wrote Munshi, had come to naught in the moment of crisis. Masani’s earlier speech in Bombay (now Mumbai) on 31 October 1962 laid bare the disappointing fence-sitting of the Non-Aligned Movement (NAM) bloc countries in the wake of Chinese aggression. He noted that the very few voices of support coming from the Afro-Asian block included that of Malaysia, Tunisia, and Ethiopia. The Non-Aligned posturing of India had not prevented Soviet Union premier Nikita Khrushchev to take the side of China on [ideological grounds](https://books.google.co.in/books?id=EbtBJb1bsHUC&lpg=PR4&pg=PA302#v=onepage&q&f=false). Referring to the *Pravda* editorial of 25 October 1962, which affirmed the China-Soviet bonhomie based on a shared ideology, Masani warned against misplaced hopes of USSR aid.

In their advocacy of alignment with the West, Swatantra leaders also anticipated and sought to stave off possible criticism. For Rajagopalachari, the policy of Non-Alignment might have been justifiable during the Cold War, but not during a ‘shooting war’. 

Ranga, in his earlier mentioned speech in Parliament, argued that the unconditional support from the US should dispel any charge of subordinating national interest to the whims of great powers. In his Bombay speech, Masani had also singled out the cases of the NAM bloc countries, including Yugoslavia, Egypt, and Indonesia, all of which had taken military aid from the US. Thus, the acceptance of military help from another country would not contravene the policy of Non-Alignment.

It fell upon Masani to explain what Munshi characterised as complacency in Indian foreign policy. Masani’s [charges](https://spontaneousorder.in/so-musings-a-democracy-at-war/) against Nehru’s mishandling of India’s foreign policy included the appeasement of Chinese aggression, failure to join the United Nations forces in Korea, betrayal of Tibet, and objection over the Dalai Lama’s appeal to the UN Security Council in 1950. In an ‘I told you so’ moment, he also drew attention to the November 1951 debate in the Provisional Parliament in which he and other leaders, including [Hriday Nath Kunzru](https://spontaneousorder.in/hriday-nath-kunzru/), Syama Prasad Mookerjee, N.G. Ranga, Frank Anthony, had warned of the challenge posed by the Chinese invasion of Tibet.

In recent debates on Indian strategy in the fraught neighbourhood, the challenge of two-front war looms large. Acutely aware of the problem in the 1950s-60s, Swatantra Party leaders argued for resolving tensions with Pakistan to recalibrate the border defence mechanism towards China. In their approach towards the northern frontier, they thus differed from defence minister Menon, who saw Pakistan as the major threat. 

Noticeably, then-Pakistan President Ayub Khan’s 1959 proposal for a [joint defence arrangement](https://www.theweek.in/news/india/2020/05/27/when-nehru-rejected-pakistan-offer-of-joint-defence-pact-against-china.html) for the Indian subcontinent against Chinese expansionism had come as a suitable mechanism for implementing the Swatantra standpoint. However, Nehru had outright rejected the proposal citing his adherence to Non-Alignment.

For Rajagopalachari, it was the unviable defensive challenge of a two-front war, the identical destiny of India and Pakistan in the long run, and the shared threat perception of Communism that necessitated such an arrangement. In the middle of the 1962 war, Masani argued that Pakistan’s incentive for supporting a joint endeavour with India lay in saving East Pakistan, which could have become a Chinese target if it had moved to attack Assam.

**Democracy at war**

Insofar as the Swatantra Party espoused a classic liberal agenda of the free market, individualism, and democratic polity, the implications of national security falling into a crisis for the state of liberty did not escape its attention. “Inevitably, in any war, the first casualty would be democracy. That should not be allowed,” proclaimed Rajagopalachari in his public address in Madras (now Chennai). He further pointed out the steps already taken in that direction including the proclamation of war emergency and suspension of certain constitutional protections to people. The parliamentary board of the party also stressed on the need to closely scrutinise the [Defence of India](https://enemyproperty.mha.gov.in/PdfFile/Act/DIACT1962.pdf) Ordinance, Bill, and Regulations to prevent deterioration of fundamental rights and democratic process.

Ironically, though, the Swatantra Party’s concern for liberty and democracy did not extend to Communist outfits. Suspicious of the revolutionary character of the Communist movement, Swatantra Party politicians deemed them as a potential threat to national security and dubbed them as ‘Fifth Columnists’. Rajagopalachari criticised the Madras government for inducting Communists into the State Defence Aid Committee. Masani, on the other hand, applauded the West Bengal, Kerala, and Gujarat governments for keeping Communists away from such initiatives.

The Swatantra Party demand for banning the Communist Party of India (CPI) stemmed from the prevalence of ‘Cold War liberalism’, which articulated a grand narrative of the global struggle between totalitarian Communist states and the free world of capitalist democracies. The Cold War liberals professed to defend democracy, rule of law, and civil liberties at home and advocated for the same in the Communist sphere of influence. Faced with the pressing challenge of an alternate vision of global order, especially attractive to the newly independent so-called ‘third world’ countries, the liberal anxiety ironically appeared in terms of demand for curtailing political rights of Indian Communists. The limits of Cold War liberalism were apparent in Masani and Rajagopalachari’s apprehension of a Communist takeover of India with the active role of homespun revolutionaries. The solution to them was deploying state power to curtail civil liberties of a particular political dispensation.

To be sure, the liberal perception of existential threat was partly due to the ideology-driven Chinese-Soviet nexus during the 1962 war as well as the export of revolutionary pronouncements from both Moscow and Beijing, which were duly lapped up by Indian Communists. Apart from this, the Swatantra Party leaders were rightfully concerned about the deleterious implications of a ‘[national security state](https://www.jstor.org/stable/1191397?seq=1)’ for political and civil liberties. The parliamentary board of the party reiterated that the “Opposition should carry out its responsibility of free and frank criticism whenever it is necessary”. They also demanded public provision of information regarding war efforts as well as permission to journalists to report from the war frontier. Stressing on the need for non-partisan defence effort, Rajagopalachari argued in favour of an all-party government similar to Western democracies during war times.

The emulation of Western democracies was further evident in Masani’s frequent use of the British Labour Party’s [trope](https://spontaneousorder.in/so-musings-a-democracy-at-war/) of constructive opposition to the Chamberlain government in 1940, despite the apparent threat of Nazi blitzkrieg. During the May 1940 debate in the British Parliament, Labour MPs, as well as a section of the Conservative Party, had vehemently opposed then-PM Neville Chamberlain for the Munich appeasement of Hitler. It was only after the resignation of Chamberlain on 10 May that the Labour Party agreed to form a coalition government with the Conservative Party.

Even so, Masani pointed out that “a large number of Labour MPs were allowed to sit in Opposition and to criticise the government and the policies” during the war. 

As historian Ramachandra Guha writes in his book *India After Gandhi*, socialist leader J.B. Kripalani also referred to British conservatives compelling Chamberlain to resign in his much-applauded speech in the Indian Parliament on 11 April 1961. The implication of such pleas was clear: a democracy at war need not see a thriving opposition and free press as impediments to war efforts. Constructive criticism of the ruling party made in the national interest would enable course correction and strengthen the nation against adversarial forces.

**Relevance today**

Recognising the endurance of threat posed by China even after the unilateral ceasefire, Rajagopalachari wrote in the *Swarajya* magazine that the future trajectory of geopolitics “clearly demands a great and drastic change of policy in order to build up a balance of power to preserve peace — and the independence of nations — in Asia”.

In taking a realistic approach to international politics based on the logic of balancing, Rajagopalachari was matched by Masani. Speaking in Parliament in 1965, Masani [anticipated](http://indianliberals.in/~_admin/pdflanguage?id=590973500.pdf) the Quad-based security coalition, which is now being touted as the balancing response to China’s rise in the Indo-Pacific. His conception of the regional security arrangement in 1965 included India, Japan, Australia, and New Zealand along with other South-East Asian nations to defend Asian democracies against China. Apart from making the case for such external balancing and western military aid, he had also suggested in 1962 to bring the matter of Chinese aggression to the UN.

Further, in his 31 October 1962 speech, Masani borrowed the Kautilyan dictum of ‘the enemy’s enemy is my friend’, as described in nationalist historian Kashi Prasad Jayaswal’s *[Hindu Polity](https://archive.org/details/in.ernet.dli.2015.280538/)*. The strategic application of the dictum for Masani lay in Indian support to the Taiwan-based nationalist leader Chiang Kai-shek. Defeated in the Chinese Civil War against Communists, Chiang had to leave the Chinese mainland for Taiwan. From his tiny island-state across the strait, he posed a perennial security threat to Communist rule in the Chinese mainland. Masani presciently saw that a military alliance with Taiwan would allow India to deter Chinese aggression due to the possible opening of a second front by Taiwan in case of war. To cement his case for close cooperation with Taiwan, he also brought up the history of Chiang’s support for Indian independence during World War II in his speech.

As the Indian foreign policy establishment gears up to deal with a powerful revisionist challenger in Asia, policy experts have suggested a slew of balancing measures as the way forward. These measures include closer [alignment with the United States](https://carnegieindia.org/2017/09/14/india-s-strategic-choices-china-and-balance-of-power-in-asia-pub-73108), [institutional balancing](https://warontherocks.com/2018/09/india-and-the-rise-of-china-soft-balancing-strategy-reconsidered/), strengthening of [ties with Taiwan](https://www.hindustantimes.com/analysis/it-is-time-for-india-to-invest-in-ties-with-taiwan/story-HCNTqDMTDEk4WazS3aqKmJ.html), use of [Tibet as leverage](https://tibet.net/brahma-chellaney-tibet-is-the-real-source-of-sino-indian-friction/), and Quad-based security arrangement.

In the Swatantra Party’s response to the Chinese challenge in 1962, we find a precursor to all these elements of India’s potential balancing strategy. Moreover, contrary to what Swaraj India president and columnist Yogendra Yadav has [argued](https://theprint.in/opinion/remember-vajpayee-nehru-episode-congress-modi-off-hook-china/434595/), the Swatantra Party’s concern with preserving democratic rights and stress on constructive opposition amid a national security crisis ought to be emulated today. The lessons of history have the potential to guide Indian strategic policy.

*This article was originally published in [ThePrint.in](https://theprint.in/opinion/swatantra-party-had-a-lot-to-say-on-china-after-1962-if-only-nehru-had-heard-them/465578/). It has been republished here with permission.*

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## One And A Half Cheers: National Education Policy Promises Much, But Fails To Come To Grips With India’s Education Crisis

Original: https://www.spontaneousorder.in/p/one-and-a-half-cheers-national-education-policy-promises-much-but-fails-to-come-to-grips-with-indias-education-crisis

Author: Spontaneous Order

Published: 2020-08-01T10:40:59.000Z

Topics: national-education-policy, school-choice, indian-education, government-schools

> There is so much good in the recently announced National Education Policy (NEP) that it seems churlish to point out its failings. It will receive well deserved applause. However, the truth is that it has failed to come to grips with the crisis in Indian..

**Summary:**

Gurcharan Das praises the National Education Policy (NEP) for shifting focus from inputs to outcomes, rejecting rote learning for critical thinking, launching a mission for all children to achieve basic language and math skills by Class 3 by 2025, introducing standardized assessments in Classes 3, 5, and 8, and separating regulation from state school operation to end conflicts of interest. However, he argues NEP fails to confront India's schooling crisis, ignoring eight key facts: 25% teacher absence in state schools (50% of present teachers not teaching despite high salaries like Rs 48,918 pm in UP); <10% teachers passing eligibility tests in many states; <50% Class 5 students reading Class 2 text; India's 73rd/74 PISA ranking; 2.4 crore children shifting to private schools (2011-2018), now 47.5% enrollment with 12 crore students, mostly low-fee (<Rs 1,000/month for 70%); 35-125 permissions needed to start schools, taking years and bribes; emptying govt schools becoming 'ghost schools'; private education costs one-third of govt. From a classical-liberal view, parents exit failing govt schools due to governance rot, not pedagogy. The solution is funding children via scholarships from age 5 for any school, enabling competition, teacher accountability, and efficient outcomes while freeing govt resources.

**Key points:**

- NEP rightly emphasizes outcomes, assessments, and regulatory separation but ignores govt school failures like 25% teacher absenteeism and poor learning metrics.
- Private schools now educate 47.5% of Indian children affordably, yet excessive permissions (35-125) and bribes stifle supply of good options.
- Fund children, not schools, via age-5 scholarships to empower parental choice, spur competition, and achieve better learning at lower cost.

**By Gurcharan Das**

* * *

There is so much good in the recently announced National Education Policy (NEP) that it seems churlish to point out its failings. It will receive well deserved applause. However, the truth is that it has failed to come to grips with the crisis in Indian education. I will focus only on schooling, the crucial foundation of the edifice. Instead of three cheers, I am afraid I can only offer it one and a half.

NEP has many excellent recommendations. It clearly shifts the focus away from inputs to outcomes. It junks rote learning in favour of critical thinking, conceptual and creative skills. Its best feature is to launch a mission to achieve basic language and math skills by Class 3 for all children by 2025. Tracking a student in Classes 3, 5 and 8 through a reliable, standardised assessment will help improve her performance, allowing her parents to make an informed choice among schools.

Finally, it separates the government’s role into two bodies, one that regulates education and a second that runs state schools. Thus, it overcomes a conflict of interest which has forced regulators to gloss over the disastrous performance of state schools while shackling private schools in a penalising licence raj.

With all this, why doesn’t NEP get three cheers? Because it hasn’t honestly faced the ground reality of these eight facts. Fact 1: One out of four teachers is absent in state schools across India and one in two, who is present, is not teaching. This is not because of low teacher salaries – starting salary of a junior teacher in UP last year was Rs 48,918 pm, or 11 times UP’s per capita income.

Fact 2: In many states, less than 10% of teachers pass the Teacher Eligibility Tests. Fact 3: Less than half the students in Class 5 can read a para or do a maths sum from a Class 2 text. Fact 4: India’s children ranked 73rd out of 74 countries in the international PISA test of reading, science and arithmetic (just ahead of Kyrgyzstan). The UPA government was so embarrassed – it banned the test.

Fact 5: As a result of this rot, even the poor are abandoning government schools. Between 2011 and 2018, 2.4 crore children left state schools and joined private schools, according to the government’s own DISE data. Today, almost half of India’s children (47.5%) are in the private school system, with 12 crore children, making it the third-largest in the world. In it, 70% parents pay a monthly fee of less than Rs 1,000 and 45% of parents pay less than Rs 500. Hence, India’s private schools are not elitist.

Fact 6: But good private schools are very few and it’s heartbreaking to see long lines of parents waiting to get their child into a decent school. The reason is that it’s difficult for an honest person to start a school. From 35 to 125 permissions are required depending on the state, and can take up to five years and lakhs in bribes. Hence, idealistic educators stay away and private schools end up mediocre.

Fact 7: If the rate of emptying of government schools continues, “they will be history” as Amartya Sen put it. Many are already ghost schools with teachers but no students. Fact 8: Overall, it costs a third to educate a child in the private system versus the government system as a result of efficiency. Society as a whole, thus, gains through better learning outcomes at a lower cost.

Framers of the NEP did not face up to these inconvenient eight truths. Why should a parent spend hard-earned money to send her child to a private school when she can be educated free plus get a mid-day meal, uniforms and books in a state school? Parents are not stupid and exit state schools because of governance failure, not pedagogy. If the teacher is absent or doesn’t teach, what would you do? State teachers get away because they monitor the polls and politicians are afraid to touch them.

So, what is the answer? The only solution is to fund children, not schools. This idea was first mooted in 2000 when Prime Minister Atal Bihari Vajpayee realised that government schools kept failing despite 50 years of reforming them. The idea is simple: When a child reaches age 5, she qualifies for a monthly scholarship for any school of the parent’s choice. Teachers are paid salaries from the income a school earns from scholarships; so, they show up and teach with inspiration. With competition good schools will flourish, bad schools will close.

The poorest child will have dignity because she will have the power to exit a bad school. The government will have plenty of money for scholarships from not having to run schools plus the money from the sale/ lease of its schools.

*Read the rest of the article [here](https://timesofindia.indiatimes.com/blogs/men-and-ideas/one-and-a-half-cheers-national-education-policy-promises-much-but-fails-to-come-to-grips-with-indias-education-crisis/). This article was originally published on the Times of India website on 1st of August, 2020.*

Read more: [NEP Hits Bull’s Eye By Fixing Regulatory Framework For Schools](https://spontaneousorder.in/nep-hits-bulls-eye-by-fixing-regulatory-framework-for-schools/)

* * *

**About Gurcharan Das**

Gurcharan Das is an author and public intellectual and former CEO of Procter & Gamble India. After heading Procter & Gamble India and South East Asia, he became Managing Director, Procter & Gamble Worldwide (Strategic Planning). At 50, he took early retirement to become a full-time writer. He is the author of many acclaimed works, including India Grows at Night (which was on the Financial Times list of best books for 2013), The Difficulty of Being Good and India Unbound. He is a regular columnist at major newspapers including the Times of India and Dainik Bhaskar; and also writes periodically in the New York Times, Wall Street Journal, Financial Times, Foreign Affairs, and Newsweek.

## NEP Hits Bull’s Eye By Fixing Regulatory Framework For Schools

Original: https://www.spontaneousorder.in/p/nep-hits-bulls-eye-by-fixing-regulatory-framework-for-schools

Author: Spontaneous Order

Published: 2020-07-30T21:55:18.000Z

Topics: nep-2020, school-regulation, private-schools, rte-reform

> The Cabinet finally approved the National Education Policy (NEP) on Wednesday, more than a year after the Kasturirangan Committee released the Draft National Education Policy. The final policy hits the mark on many points. Its most important proposal i...

**Summary:**

The National Education Policy (NEP) 2020 excels by separating the government's conflicting roles in school education as policymaker, regulator, and service provider into independent bodies, addressing a core classical-liberal critique of concentrated power and bias against private schools. Currently, state governments regulate private schools harshly while excusing their own, as seen in a Telangana raid where officials threatened demolition for private schools but proposed repairs for government ones; CCS analysis of laws in five states (Maharashtra, Delhi, Haryana, Jharkhand, Uttar Pradesh) reveals punitive language like 'take over' and 'debar' for private schools versus 'monitor' and 'develop' for public ones. NEP establishes a State School Standards Authority (SSSA) as an independent regulator applying equal criteria to public and private schools (except central ones), enabling competitive federalism among states. The Department of School Education handles policymaking and monitoring, while the Directorate of School Education manages public school delivery. It critiques RTE Act 2009's input-heavy norms (e.g., playgrounds, classroom sizes) hindering budget private schools, advocating 'light but tight' outcomes-based regulation responsive to ground realities. This structural reform recognizes private sector contributions, eases operations, and prioritizes quality education for India's youth.

**Key points:**

- NEP separates school education governance into independent bodies: State School Standards Authority for regulation, Department of School Education for policy, and Directorate for public school delivery.
- SSSA ensures equal regulation of public and private schools, fostering competitive federalism across states.
- NEP shifts regulatory focus from RTE's input-heavy norms to outcomes-based recognition, easing private school operations.
- Current system shows bias: punitive laws for private schools versus lenient ones for government schools in five analyzed states.

**By Tarini Sudhakar**

* * *

The Cabinet finally approved the National Education Policy (NEP) on Wednesday, more than a year after the [Kasturirangan Committee](https://mhrd.gov.in/sites/upload_files/mhrd/files/Draft_NEP_2019_EN_Revised.pdf) released the Draft National Education Policy. 

The final policy hits the mark on many points. Its most important proposal is on [separating](https://ccs.in/reforming-education-governance-india-policy-blueprint-separation-powers-0) the role of the government as regulator and service provider. 

At present, state governments hold three roles in school education. They set policies, regulate private schools and operate their own schools. The NEP vests these functions of the government into separate independent bodies. But what is going wrong with the current system? 

Suppose there is a [cricket match](https://www.youtube.com/watch?v=-SsVtD1Exmc) between you and your neighbour’s family. Usually, you choose random strangers to be the umpire. But for some reason (perhaps due to COVID-19), no one else is on the street. You have no one else to sub in, so your neighbour asks his mother to be the referee. Would it be a fair match? 

This is the current state of the school education system in India. The government runs schools while also regulating private schools. There is a clear conflict of interest, concentration of powers and lack of focus on who does what.  

Consider an instance from [Telangana](https://timesofindia.indiatimes.com/city/hyderabad/hyderabad-after-school-tragedy-education-department-to-launch-shock-raids/articleshow/65300714.cms). When the state Education Department raided all schools in Hyderabad following the collapse of one school building, an education inspector first told a newspaper reporter: “if any schools are found running in dilapidated conditions or constructed of poor quality material, notices will be issued and \[private schools\] may face action including demolition”, adding later, “we have proposed repairs in few government schools”. 

The attitude of the officer and the punishment for violating the same standards are different for government and private schools. This is true across India and is not isolated to geography or politics (CCS forthcoming). 

It is not only a personnel problem. CCS (forthcoming) analysed education laws for five states, Maharashtra, Delhi, Haryana, Jharkhand and Uttar Pradesh. Even the legislative language used for both schools is starkly different. 

Private schools are slapped with phrases like *take over*, *debar*, and *cease to function*. And what language is used for government schools? *Monitor*, *develop*, and *undertake*. 

India is a growing economy. It needs its youth to enter the market in large numbers but equipped with quality education. Private schools can and have been facilitating this. Yet, state governments often treat them as villains. NEP corrects this impression. It acknowledges the significant contribution of the private sector and attempts to ease its operations in two ways. It asks states to set up an independent regulator and raises the need to shift regulatory focus towards outcomes. 

The constitution of the State School Standards Authority is a significant measure for multiple reasons. Education is a concurrent subject in India. Both Union and state governments can regulate it. But for years, the Central government has been taking charge, leaving states with little freedom. Asking states to form a State School Standards Authority changes this dynamic. 

States finally have the power to exercise true competitive federalism. We will be able to see who regulates and enforces norms better. Will it be the Centre, trying to control everything from afar? Or will it be the states, closer to home and better aware of the on-ground situation? 

More importantly, the independent State School Standards Authority will finally treat public and private schools equally. Central government schools remain an exception. But the remaining schools will be governed by the same criteria, benchmarks, and processes. 

NEP separates other roles of the state government into different bodies. The *Department of School Education*, the apex state-level body in K-12 education, will be responsible for overall monitoring and policymaking. It will not be involved with service delivery or regulation of education. The *Directorate of School Education* will handle the service delivery for the public schooling system of the whole state. This separation removes the issue of conflict of interest. The match now has a neutral umpire. 

NEP does not stop there. It prods the public to think deeper about the regulatory environment for schools by raising the need to revisit the existing regulations. One big challenge has been the Right to Education (RTE) Act, 2009. 

RTE has served well as a vehicle for ensuring access to education. But it has come at the cost of hindering many schools from entering the education sector. 

RTE’s emphasis on input-heavy recognition norms for private schools have posed many challenges to running schools in dense urban neighbourhoods. Norms such as playgrounds or minimum classroom size have made it difficult for budget private schools to operate. NEP recommends making such requirements “more responsive to realities on the ground.” 

There is urgent need to move towards [outcomes-based recognition](https://ccs.in/sites/default/files/research/draft-blueprint-on-use-of-learning-outcomes-in-education-governance-april-2019.pdf). Regulations must not deter private schools. Instead, they should encourage all types of schools to participate and work towards the same goal: that of providing quality education. The NEP attempts to do so through its “light but tight” regulatory framework where all schools, public and private, must follow a minimal set of standards. 

School education in India has been suffering for long. NEP recognises its root ailments and lays out strong structural reforms. All that is left is thoughtful implementation of its recommendations. 

*We have revised our article on the basis of the National Education Policy published on the MHRD website. Our earlier version argued that the NEP explicitly recognises the need to revisit RTE Act.*

Read more: [Making life easier for small enterprises: An example from Punjab](https://spontaneousorder.in/making-life-easier-for-small-enterprises-an-example-from-punjab/)

* * *

**About Tarini Sudhakar**

Tarini studied History at Lady Shri Ram College for Women. She is a former Research Associate of the Centre for Civil Society.

## SO Musings: Defections And Their Control

Original: https://www.spontaneousorder.in/p/so-musings-defections-and-their-control

Author: Spontaneous Order

Published: 2020-07-30T19:24:27.000Z

Topics: political-defections, indian-constitution, democracy, liberal-thought

> A.G. Mulgaokar in the August 1968 edition of Freedom First Magazine wrote a piece on “Defections And Their Control” wherein he refers to desertions by members of legislatures as an onslaught on the Constitution. Mulgaonkar mentions that the trend of d

**Summary:**

In an August 1968 Freedom First article, A.G. Mulgaokar decries legislative defections as a profound assault on India's Constitution and democracy, perpetrated by those duty-bound to protect it. He argues that such party-switching, perceived universally as driven by personal gain, disillusioned citizens who initially celebrated the Constitution's promise of stable democratic governance post-independence. This erodes public confidence, fostering doubts about democracy's viability in India and risking a slide toward authoritarian alternatives. Mulgaokar contrasts these 'onslaughts'—distinct from legitimate amendments—with the moral imperative for legislators, Speakers, and Ministers to uphold constitutional sanctity. While acknowledging defections as part of democratic evolution historically, he insists the trend demands urgent reversal to halt the 'rot.' Critically, he posits no legal fix suffices; a lasting solution requires political parties to embrace basic morality, propriety, and decencies of public life, aligning with classical-liberal emphasis on ethical conduct over coercive controls in fostering genuine democratic order.

**Key points:**

- Legislative defections constitute onslaughts on the Constitution by eroding public faith through evident personal gain motives.
- Citizens' disillusionment with democracy risks pushing India toward undemocratic alternatives if defections proliferate.
- Political parties must adhere to morality, propriety, and public decencies for a lasting solution to defections.
- Legislators, Speakers, and Ministers have a primary duty to uphold constitutional sanctity without implanting doubts in citizens' minds.

**By Spontaneous Order**

* * *

*A.G. Mulgaokar in the August 1968 edition of Freedom First Magazine wrote a piece on “Defections And Their Control” wherein he refers to desertions by members of legislatures as an onslaught on the Constitution.* 

*Mulgaonkar mentions that the trend of defections is not new, and he cites historical precedents of such acts as being part of the process of democratic evolution.* 

*Among the many points that the author highlights, the most pertinent is his observation that a lasting solution to the problem of defection can only come when political parties adhere to the basic tenets of morality and observe well-accepted guidelines of propriety and basic decencies of public life.* 

*Produced below is the excerpt from the article by A.G Mulgaonkar titled “Defections and Their Control” published in the August 1968 edition of the* Freedom First *magazine.*

For some time past now the problem of defections by elected members of political parties in the legislature has become a major headache; not merely to the political bosses, whose domain would thereby be in danger, but to many in this country and outside, who, on the advent of freedom felt a natural glow of pride that the price, in a historical sense, had been so little. With the birth of the Indian Constitution, few short years later, it was commonly felt the ship of the Indian State was embarked on a smooth voyage in fair weather. 

Alas, the many who nourished these fond hopes were soon to be disillusioned. That the disillusionment came at the hands of those who were charged with the duty of protecting and nurturing the Constitution was sadly ironical. Because let us not forget that it is the primary duty of every member of a legislature, every Speaker and every Minister to uphold the Constitution and never to do anything which will implant in the mind of the common citizen doubts about its sanctity. Applying this simple test, we cannot escape the irresistible conclusion that some of the biggest onslaughts on the Constitution and even to Democracy have come from these quarters. Onslaughts on the Constitution are not to be confused with efforts to eradicate defects or to improve its efficacy. One such onslaught indeed is when the ordinary citizen going about his daily avocation sees members of legislatures changing and rechanging their party allegiances; his common sense tells him clearly that personal gain is the motive in every case. 

It is small wonder if he then begins to feel doubtful of the success of democracy in this country and his thoughts turn to less pleasant alternatives. If this situation multiplies on a large scale, it can be imagined without much effort where the country will go. Therefore, the need to stop this rot and reverse the process is urgent.

*The original text can be accessed [here](http://www.freedomfirst.in/uploads/issues/pdf/195.pdf)*.

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [India, China: ancient civilisations, different paths](https://spontaneousorder.in/india-china-ancient-civilisations-different-paths/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Making life easier for small enterprises: An example from Punjab

Original: https://www.spontaneousorder.in/p/making-life-easier-for-small-enterprises-an-example-from-punjab

Author: Spontaneous Order

Published: 2020-07-29T13:40:26.000Z

Topics: msme-reforms, ease-of-doing-business, punjab, deregulation

> The Chamber of Industrial & Commercial Undertakings (CICU), a non-profit society that represents industrial and trade interests in Punjab, wrote a letter to the Prime Minister requesting support for Micro, Small, and Medium Enterprises (MSMEs) to cope w..

**Summary:**

Punjab's Right to Business Act exemplifies classical-liberal reforms to boost MSMEs by slashing upfront regulatory hurdles, responding to Covid-19 pressures and prior slowdowns where industrial output growth fell to 1.3% in 2019-20 from 5.2% prior. Previously, new MSMEs required seven approvals with overlapping documents plus final registration before operating. Now, a District Nodal Agency issues in-principle approval within 15 days (three days in industrial parks) or it's deemed approved, enabling 3.5 years of operation free from inspections except serious complaints, while securing full clearances. This covers building plans, occupation certificates, fire NOC, trade license, factory plans, shop registration, and partial land permissions—cutting admin time and 'facilitation' costs. Though it postpones rather than eliminates burdens amid Punjab's ~1,500 state compliances, paired with reforms like two-document trade licenses issued in 12 days, it builds on the state's ease-of-doing-business score rising from 36.7 to 54.4 (2015-2018). Gujarat's similar ordinance lacks Punjab's timelines. The Act fosters a startup-friendly environment for MSMEs employing much of India's non-agricultural labor; other states should follow to revive small enterprises.

**Key points:**

- Punjab's Right to Business Act provides in-principle approval for MSMEs within 15 days (or three in industrial parks), deemed approved if delayed, allowing 3.5 years of operation without full clearances.
- The approval exempts new MSMEs from seven key pre-operation sanctions, reducing administrative costs and delays.
- Combined with reforms like simplified trade licensing (two documents, 12-day issuance), it enhances Punjab's business climate, lifting its ease-of-doing-business score from 36.7 to 54.4 between 2015-2018.
- Other states should adopt similar measures to support MSMEs, vital non-agricultural employers battered by Covid-19 and slowdowns.

**By Bhuvana Anand**

* * *

The Chamber of Industrial & Commercial Undertakings (CICU), a non-profit society that represents industrial and trade interests in Punjab, [wrote a letter](https://www.hindustantimes.com/chandigarh/ludhiana-heads-of-msme-bodies-write-to-modi-gadkari-for-aid/story-DCU8f3GBIORQcfRNc3peNO.html) to the Prime Minister requesting support for Micro, Small, and Medium Enterprises (MSMEs) to cope with the Covid-19 crisis. 

Industry bodies have asked the Union and state governments for various relief measures, including financial assistance and reforms in land and labour regulation. States have responded by relaxing previously rigid regulations across a variety of domains. 

Punjab, for instance, [passed](https://www.indiacode.nic.in/bitstream/123456789/14734/1/punjab_right_to_business_act.pdf) the Right to Business Act recently. The stated aim of the Act is to improve the ease of doing business by allowing “self-declaration, exemptions, \[and\] speedier approvals and inspections” for new MSMEs. 

Before the passage of the Act, MSMEs needed seven different approvals prior to beginning operations. Each of these approvals requires multiple documents, many of them overlapping. After getting the clearances, MSMEs had to apply to the state-level Department of Industries and Commerce, for final registration. 

The Punjab Right to Business Act simplifies this process. Now, a prospective business owner can apply to the newly created District Nodal Agency before getting any clearances. The nodal agency has to provide “in-principle approval” for the MSME within 15 days for enterprises located outside industrial parks and three days for those in industrial parks. If the nodal agency does not respond before the deadline, registration is deemed approved. 

This approval allows MSMEs to operate for three-and-a-half years before wading into regulatory clearances. During the ‘in-principle approved’ period, MSMEs are free from inspection, unless there is a specific complaint that is “of a serious nature”. 

The MSME can use this period to plan and secure the full set of approvals. It is not clear what would be serious enough to warrant inspection, but that may be clarified once the rules are released. The in-principle approval reduces the administrative time and costs involved in starting a business, especially those incurred to ‘facilitate’ administrative processes. 

The in-principle approval covers six sections: the sanction of building plans, issuance of an occupation certificate for buildings, application for fire NOC, registration of trade license, approval of factory building plan, and registration of shop or establishment. While the approval does cover a seventh sanction, land permissions, it does not allow the nodal officer to alter land-use restrictions. 

At first glance, this Act merely postpones the regulatory burdens of MSMEs into the future and does not change the need for the various licenses. This Act only focuses on the ease of opening a new MSME. It does not, on its own, impact the regulatory or legal burdens of existing MSMEs. All the clearances still need to be obtained, the only difference being, later. 

Punjab still has close to 1,500 state-level compliance requirements in its books, besides central compliances. Take, for instance, the trade license requirement. The Right to Business Act does not eliminate the need for the license; it merely does away with requiring the clearance ex-ante. But in combination with The District Reform Action Plan, the process for obtaining this particular licence has been made simpler. Only two documents are required to obtain the licence, identity proof and an occupancy certificate and the government obliged to issue the license in 12 days. Perhaps over time, the government will do away with the requirement altogether.

Some other states have also attempted such simplifications. Gujarat, in late 2019, passed the Gujarat Micro, Small and Medium Enterprises (Facilitation of Establishment and Operation) Ordinance. The stated aim of the Ordinance was similar to that of the Punjab Act. 

In the case of Gujarat, the applicant applies not to a district level officer, but to a state-level one. The “Acknowledgement Certificate”, is similar to the “In-principle approval” given in Punjab. In Gujarat, unlike Punjab, there are no defined deadlines in this ordinance. The ordinance says that after submission of intent to start a business, the acknowledgement certificate will be provided “forthwith”. In Punjab, there are defined timelines, and a presumption of acceptance if those timelines are not met.

The Right to Business Act, along with the additional reforms taken place by the Government of Punjab will likely engender a friendly environment in which to start and operate small enterprises. From 2015 to 2018, the state’s ease of doing business score has [increased](https://m.rbi.org.in/Scripts/PublicationsView.aspx?id=18911) from 36.7 to 54.4. This Act is likely to push the score up even higher. 

MSMEs, which employ a substantial chunk of India’s non-agricultural labour, have been struggling for the past few years. The ongoing COVID-19 pandemic has not been kind to small firms, but troubles started well before that. Industrial output [growth](https://www.business-standard.com/article/economy-policy/industrial-output-sees-steepest-fall-in-8-years-shrinks-4-3-in-september-119111101559_1.html) was at 1.3% for 2019-2020, compared to 5.2% in 2018-19. Other states should consider the Right to Business approach to encourage small businesses to start up again and come back stronger.

Read more: [India, China: ancient civilisations, different paths](https://spontaneousorder.in/india-china-ancient-civilisations-different-paths/)

* * *

**About Bhuvana Anand**

Bhuvana Anand is Director, Research at Centre for Civil Society, one of India’s leading think tanks. Bhuvana’s subjects of interest are better regulation and governance, public finance management, and political economy. In India, she has worked extensively on reforms of welfare programmes, including reforms of the Public Distribution System and implementation of various Direct Benefits Transfers. At the Centre, she works on unpacking how government actually functions using administrative data, legislative analysis, field research, and machine learning. In addition, her team develops blueprints for programme design and policy implementation. Bhuvana has worked with various donors and civil society organisations in Sudan, Afghanistan, Sri Lanka, India and the United States, in policy advocacy, managing multi-pronged programs and research. She previously worked with the United Nations, the British Government's Department for International Development, and most recently at MIT’s Poverty Action Lab.

## India, China: ancient civilisations, different paths

Original: https://www.spontaneousorder.in/p/india-china-ancient-civilisations-different-paths

Author: Spontaneous Order

Published: 2020-07-28T15:45:19.000Z

Topics: india-china-relations, chinese-imperialism, economic-reforms, self-reliance

> Only a few nations have a long history of civilisation, antiquity and harmony, with peace as the fundamental motive of carving out a national boundary. India is one such country, which continues to strive for world harmony and peace.

**Summary:**

Chandrasekaran Balakrishnan contrasts ancient civilizations India and China, arguing that China's economic rise under authoritarianism has fueled aggressive territorial claims against India, as seen in the mid-June Galwan Valley clash amid the coronavirus crisis it exported. He invokes historical quotes: William I. Chamberlain's 1899 depiction of Chinese education as practical for earthly citizenship versus Indian idealism for heavenly priesthood; R.C. Majumdar's 1965 warning of China's 2,200-year imperial tradition, reviving claims over regions acknowledging nominal suzerainty, now affecting 17 nations. The West has overlooked China's disregard for civil liberties, rule-based democracy, and transparency. Deng Xiaoping's 1974 UN speech renouncing superpower status and advocating self-reliance—relying on own people, resources, and planned economy—is cited as a model India should emulate for political and economic independence, echoing Rigveda's call for noble thoughts from all directions. India must heed prophets like Rajagopalachari, Patel, and Ambedkar, implementing structural reforms to transform economic strengths, lest it remain in limbo while China dominates.

**Key points:**

- China's historical imperialism spans over 2,200 years, with claims revived against 17 nations including India.
- Cultural ethos differs: China educates for practical worldly citizenship, India for spiritual renunciation.
- India should pursue structural economic reforms and self-reliance, drawing from Deng Xiaoping's emphasis on controlling economic lifelines through own resources and people.
- Ignore warnings from Indian leaders like Patel and Ambedkar at peril, to avoid permanent economic limbo.

**By Chandrasekaran Balakrishnan**

* * *

The world is in turmoil during the last six months, battling against the coronavirus pandemic, which many experts believe, was exported by authoritarian China.

Unlike the 1918 Spanish Flu holocaust, when the term became a mill around Spanish necks, China has escaped the opprobrium of Corona being branded a Chinese Flu! It would certainly have gladdened Indian hearts, but, alas, not to be.

In the modern world, nearly 200-plus nations on the planet are tackling disputed national boundaries to safeguard natural resources and to ensure the freedom, liberty, peace and prosperity of their citizens.

Traditionally, most nations were carved out after disputes over natural resources, since gaining independence from their colonial masters. In some cases, nations were also born out of disputes over religious faith and communal antagonism; such nations, often, ended up with leaderships more interested in power and establishing dictatorships at the cost of peace and prosperity of their citizens.

Only a few nations have a long history of civilisation, antiquity and harmony, with peace as the fundamental motive of carving out a national boundary. India is one such country, which continues to strive for world harmony and peace.

While the mid-June Galwan Valley clash in the Himalayas over an unsettled border dispute between India-China has received worldwide attention, even amid the China-inspired corona crisis, the fact is that Beijing has been persistently pushing its territorial claims across several countries, including India.

The trigger for the current Chinese aggression against India is the outcome of the Big Dragon’s burgeoning economic prowess and its domination of international trade and commerce over the last many decades. What has given China the big window of opportunity is its ability – or perception – that it can take on the United States, both economically and militarily. To be sure, this is not something the modern Chinese visionary, Deng Xiaoping, envisioned for his country when he opened its economy to the global market.

It would be interesting to recall the unusual, if accurate, narratives of eminent writers and philosophers in the 20th century, which can be considered relevant to current Sino-Indian ties.

One fundamental difference between India and China is vividly encapsulated in the immortal words quoted by William I Chamberlain (1862-1937) in his book, Education in India, (1899). “Chinese educate for practical life, the Indians for the ideal; those (Chinese) for earth, these (Indians) for heaven; those educate their sons for entering the world, these for going out of it; those educate for citizenship, these for priesthood; those for industrial activity, these for knowledge; those teach their sons the laws of the state, these teach them the essence of the Godhead; those lead their sons into the world, these lead them out of the world into themselves; those teach their children to earn and enjoy, these to beg and to renunciate.” How lyrical, representing two world views, but nonetheless, spectacular.  
Irrespective of agreement or the lack of it, it is difficult to better these words, which capture the difference between India and China in its ethos and antiquity. The economic, social, and political developments in these two countries must be seen through the words of German historian Heinrich Wuttke (1818-1876).

During the last century, relations between India and China were never static; it was always dynamic, with China more than keen to play the Big Brother.

Eminent Indian historian, Dr. Ramesh Chandar Majumdar’s (1884-1980) warning several decades ago, encapsulates it well. His vivid assessment of Chinese behaviour and thinking, which he penned down for the Diwali issue of Organiser in 1965, is quite telling: “There is, however, one aspect of Chinese culture that is little known outside the circle of professional historians. It is the aggressive imperialism that characterized the politics of China throughout the course of her history at least during the part which is well known to us. Thanks to the systematic recording of historical facts by Chinese themselves, an almost unique achievement in oriental countries … We are in a position to follow the imperial and aggressive policy of China from the third century B.C. to the present day, a period of more than twenty-two hundred years … It is the characteristic of China that if a region once acknowledged her nominal suzerainty even for a short period, she should regard it as a part of her empire forever and would automatically revive her claim over it even after a thousand years whenever there was a chance of enforcing it.” Prophetic, it can be said, from the benefit of hindsight. During the last half-century, this has been proved by China across the territories of no less than 17 nations!

The eternal truth is that the West has ignored authoritarian China for far too long. In post-World War II, China has been non-aligned with the world order on crucial subjects like civil liberty, individual liberty, rule-based democracy, transparency in government functions, policies and integrity of data, among other subjects.

Consider the prescient summation by none other China’s former strongman and the man who set out his country on the road to economic superstardom, Deng Xiaoping. In a speech at the United Nations on April 10, 1974, Deng said, “China is not a superpower, nor will she ever seek to be one. What is a superpower? A superpower is an imperialist country which everywhere subjects other countries to its aggression, interference, control, subversion, or plunder and strives for world hegemony. If capitalism is restored in a big socialist country, it will inevitably become a superpower …. If one day China should change her colour and turn into a superpower, if she too should play the tyrant in the world, and everywhere subject others to her bullying, aggression, and exploitation, the people of the world should identify her as social-imperialism, expose it, oppose it and work together with the Chinese people to overthrow it.” Amazing lucidity.

While concluding his historic address, Deng was a model of sobriety, whose relevance can come back to haunt China and the world today. “The whole world is in turbulence and unrest. The situation is one of `great disorder under heaven,’ …. This`disorder’ is a manifestation of the sharpening of all the basic contradictions in the contemporary world. It is accelerating the disintegration and decline of the decadent reactionary forces and stimulating the awakening and growth of the new emerging forces of the people.”

Combining reasoning with logic, Deng stated: “We have every reason to unite more closely, and no reason to become estranged from one another.” It would help if Chinese President, Xi Jinping, takes a leaf out of his distinguished predecessor’s book!

India must learn from the mistakes of history and make efforts to introduce structural reforms to transform its economic strengths to uplift itself in the world – like China has.

If the prophetic teachings of great scholar- statesmen like C. Rajagopalachari, Vallabhbhai Patel, B.R.Ambedkar, Cho S.Ramasamy and others, continue to be ignored and forgotten, India will be stuck permanently in a limbo.

If anything, India could do well to learn from Deng himself: “… political independence and economic independence are inseparable. Without political independence, it is impossible to achieve economic independence; without economic independence, a country’s independence is incomplete and insecure.” With such leaders at the helm, little wonder that China has reached the stage it has.

Even India’s clarion call for self-reliance or aatmanirbharta, could take inspiration from what Deng said in 1974. “By self-reliance, we mean that a country should mainly rely on the strength and wisdom of its own people, control its own economic lifelines, make full use of its own resources, strive hard to increase food production and develop its national economy step by step and in a planned way. The policy of independence and self-reliance in no way means that it should be divorced from the actual conditions of a country; instead, it requires that distinction must be made between different circumstances, and that each country should work out its own way of practicing self-reliance in the light of its specific conditions.”  
The great Rigveda sums up the same thing, differently. “Let noble thoughts come to me from all directions” (1.89.1 Rigveda). Indeed, why not.

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [Making life easier for small enterprises: An example from Punjab](https://spontaneousorder.in/making-life-easier-for-small-enterprises-an-example-from-punjab/)

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## Atmanirbharta comes in through knocking on the pandemic door

Original: https://www.spontaneousorder.in/p/atmanirbharta-comes-in-through-knocking-on-the-pandemic-door

Author: Spontaneous Order

Published: 2020-07-27T17:32:21.000Z

Topics: atmanirbharta, medical-devices, pandemic-manufacturing, deregulation

> Which sector of the economy is witnessing the deepest impact of Prime Minister Narendra Modi’s clarion call for atmanirbharta or self-reliance? It is a good question to ask. While industry experts are still grappling with the meaning of self-reliance i.

**Summary:**

The COVID-19 pandemic has unexpectedly advanced Prime Minister Modi's atmanirbharta (self-reliance) agenda in India's medical devices sector by sparking a boom in domestic manufacturing through rapid deregulation and entrepreneurial innovation from unlikely quarters. Pre-pandemic, India lacked production for PPEs and N-95 masks, relying on imports; now, over 1,000 government-listed firms plus private players produce PPEs, with 2 lakh kits and coveralls daily via MoD PSUs and 358 DRDO-supervised firms, creating a Rs 7,000-crore industry second only to China. Non-health companies like footwear and textile firms have pivoted to produce gloves, masks, sanitisers, ventilators, and kits, with dramatic capacity jumps: gloves from 20 firms/211 crore pieces annually to 30/247.78 crore; ventilators from 8/3,360 to 17/4.27 lakh; sanitisers from 35/1.95 crore litres to 49/5.97 crore; N-95 masks from 5/1.38 crore to 36/79.92 crore. While oversupply and export bans cause woes, and quality varies with some shortcuts, the author hails this as embracing privatisation over protectionism, fostering jobs and proving self-reliance via quick private adaptation rather than coddled industry. Atmanirbharta, born of pandemic necessity, is poised to endure.

**Key points:**

- Pandemic-driven deregulation enabled over 1,000 firms to produce 2 lakh PPE kits daily, turning shortages into oversupply.
- Entrepreneurial pivot by non-health firms like textile and footwear makers massively scaled production of masks, gloves, ventilators, and sanitisers.
- India's medical devices sector grew to Rs 7,000-crore industry via atmanirbharta, creating jobs despite quality challenges from new entrants.
- Government eased regulations through MoD PSUs and DRDO, demonstrating privatisation's role in self-reliance over protectionism.

**By Ranjit Bhushan**

* * *

Which sector of the economy is witnessing the deepest impact of Prime Minister Narendra Modi’s clarion call for *atmanirbharta* or self-reliance? It is a good question to ask. 

While industry experts are still grappling with the meaning of self-reliance in an Indian eco-system ravaged by the pandemic and before that by exceedingly poor growth rate, there are some clues blowing in the wind – clues that are intimately connected to the rampaging pandemic in the country.

Even as Coronavirus is slowly but steadily pushing India higher on the list of most-affected nations, there is an upside to this medical emergency. The pandemic has spawned a gigantic parallel cottage industry, manufacturing a variety of anti-COVID gear. Before the viral swept in, there was no production facility for personal protective equipment (PPEs) and N-95 masks. What existed were small units that assembled ventilators and testing kits.

How times have changed. There are currently more than 1,000 firms on the government list that are producing PPE kits. The list of private producers, those that are not recognised by the government, are a handful as well, but their details are sketchy.

In addition to the government list, several other companies, of varying shapes and sizes, are manufacturing gloves, masks, ventilators, swabs, sanitisers and RNA extraction kits, since Coronavirus was declared a pandemic in March 2020. 

Therefore, from a scenario of acute shortages in the middle of March 2020, India has grown to have an oversupply glut with huge increase in manufacturing, compounded by imports flooding the markets at nil import duties. To add to their woes, manufacturers are unable to export their surplus capacity due to the continued ban on exports, says Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry, who also works closely with the Government of India’s Department of Pharmaceuticals.   

Now comes the spirit of *atmanirbharta.* Jumping on this bandwagon with a flourish are companies that have nothing to do with either health or wellness. True to the spirit of Swadeshi – and of quick thinking and innovation – they include footwear firms, hosiery manufactures, textile mills, exporters, boutique shop owners, dealers in apparels, ordnance clothing, polythene bag makers – you name it and they are there.

First the PPEs, considered sacrosanct for frontline anti-COVID warriors, including health workers, municipal volunteers, accredited social health activists (ASHA) and hospital and sanitation staff, who interact closely with potential and positive virus patients.

To meet the rapid and non-stop increase in Coronavirus positive cases, the government has pulled out all stops, easing manufacturing regulations like never before, demonstrating that if *atmanirbhrata* or self-reliance has to be taken to its logical conclusion, then privatisation will have to be embraced wholeheartedly. Cussed protectionism will simply not do.

Resultantly, companies have been awarded contracts, accorded through the single window with a speed that is astonishing, with the Ministry of Defence’s (MoD) public sector units (PSUs) and departments acting as the nodal agencies. 

The companies awarded contracts to manufacture PPEs by various MOD departments include the Heavy Vehicle Factory, Avadi, Tamil Nadu; Metal and Steel Factory; Ordnance Factory, Ambarnath; Ordnance Factory, Kanpur; the Ordnance Factory Muradnagar that is overseeing the single largest number of companies and the Small Arms Factory, Kanpur.

In addition to this list, are another 358 firms, which are manufacturing PPE Body Coveralls under the supervision of the Defence and Research Development Organisation (DRDO). Coveralls are a PPE item designed to protect the body and other clothing against dirt or outside contaminants. 

The speed has fetched dividends. Today there are 2 lakh PPE kits and coveralls being churned out daily by this new assembly line production, as per the specifications of the Ministry of Health and Family Welfare. In addition, roughly the same number is being produced daily by other manufacturers and suppliers to state governments, autonomous institutes and private healthcare. 

Testing the quality of material at different stages of processing, from fibre to fabric and evaluation of processing performance by the application of physical, chemical and processing tests, have been assigned to the South India Textile Research Association or SITRA for all important quality characteristics.

“PPE production capacity has increased so much that it has become a Rs 7,000-crore industry in India, the biggest after China,” PD Vaghela, Union Secretary in the Department of Pharmaceuticals and Chairman of one of the 11 empowered groups constituted for planning and ensuring implementation of response to the disease outbreak, told a media conference.

The vagaries of self-reliance are also evident. The PPEs being manufactured include all varieties – from high quality to downright sub-standard and shoddy, supplied in accordance with the budget. It proves that while self-reliance is a great catchword, the nuances it represents are far too subtle to be painted by one single brush. 

In an interview to this writer, Rajiv Nath explains the pitfalls of self-reliance. “The new manufacturers are yet to appreciate quality and go through the learning curve of understanding the medical usage needed for critical requirements. Many of them, instead of learning deployment of quality management systems to become globally competitive, are resorting to short cuts by buying fake proofs from certification bodies that are not National Accreditation Board for Certification Bodies (NABCB) or International Accreditation Forum (IAF)-authorised and are armed with dubious claims of endorsements from private bodies.” 

But if PPEs constitute a safeguard for frontline COVID warriors, the pressing need for other paraphernalia deemed mandatory, has created another segment in this cottage industry, which is doing booming business. The massive demand for masks, gloves, sanitisers and ventilators is never-ending. The *atmanirbhar* producers have proved to be equal to the task. 

Consider the following: 

\*\* According to the Association of Indian Medical Device Industry (AIMED), before the outbreak of the virus, there were 20 companies making gloves, as compared to 30 today. From 211 crore pieces per annum, the production today stands at 247.78 crore per annum.  

\*\* There were eight ventilator companies manufacturing 3,360 pieces per annum. Now 17 firms are producing 4.27 lakh pieces. 

\*\* From 35 companies producing 1.95 crore litres of sanitiser liquid per annum, today 49 companies churn out 5.97 crore litres

\*\* There were no specialist goggles manufactures; now there are 17. From zero production at the start of the year, the goggles production count has zoomed up to 2.08 crore pieces per annum! 

\*\* There were 25 surgical mask producers till February, catering mostly to the anti-pollution users; the number has today jumped to 71. From 31.36 crore pieces per annum, the total production stands at 328.06 crore pieces per annum. 

\*\* From five N-95 mask makers at the start of the year producing 1.38 crore pieces per annum, the number has climbed up to 36 producers churning out 79.92 crore pieces of masks per annum. 

\*\*\* There are five swabs manufacturers compared to none a few months ago. From no production, the number is now pegged at 37.6 crore pieces per annum.

The scene is similar in other niche areas of corona medicare like diagnostic kits, rapid diagnostic kits and RNA extraction kits. The number of diagnostic kit companies have gone up from 0 to 8 with a total manufacturing capacity of 147.24 crore pieces per annum; while there were no rapid diagnostic kits at the beginning of the year, four companies are now producing 4.8 crore pieces per annum; likewise for viral transport media kits (VTM), from zero firms at the beginning of the year, today 10 manufacturers are producing 197.4 crore VTM pieces per annum.    

“This is a positive development and the impact of COVID-19 is that jobs have been created around the provision of these essential supplies. I hope that this trend continues,” Director of the Washington-based Center for Disease Dynamics, Economics and Policy and Senior Research Scholar and Lecturer at Princeton University, Ramanan Laxminarayan, told this writer in an interview. 

By no chance either, is this list of cottage industries a final one. According to industry insiders, “this list is a dynamic one, which changes every two weeks.” Looks like *atmanirbharta* as a concept is here to stay. 

Read more: [Minimum educational qualification is no criteria for local body elections](https://spontaneousorder.in/minimum-educational-qualification-is-no-criteria-for-local-body-elections/)

* * *

**About Ranjit Bhushan**

Ranjit Bhushan is an independent journalist and former Nehru Fellow at Jamia Millia University. In a career spanning more than three decades, he has worked with Outlook, The Times of India, The Indian Express, the Press Trust of India, Associated Press, Financial Chronicle, and DNA. He is also the author of a book \`Maoism in India and Nepal’, published by Routledge.

## Minimum educational qualification is no criteria for local body elections

Original: https://www.spontaneousorder.in/p/minimum-educational-qualification-is-no-criteria-for-local-body-elections

Author: Spontaneous Order

Published: 2020-07-24T16:30:56.000Z

Topics: panchayati-raj, local-elections, educational-qualifications, decentralization

> Years before he became the Father of the Indian Constitution, Dr Bhimrao Ambedkar in his famous memorandum to the Simon Commission in 1928, laid down what was to become the benchmark for those Indian nationalists pleading the case for universal franchis..

**Summary:**

Ayush Mehrotra argues against minimum educational qualifications for local body elections, echoing Dr. B.R. Ambedkar's 1928 view that literacy does not equate to intelligence and should not bar enfranchisement. He critiques 2015 amendments in Rajasthan (Class 8/10 for sarpanch/zila parishad) and Haryana, upheld by the Supreme Court in Rajbala v. State of Haryana, which Rajasthan scrapped in 2018. These barriers limit voter choice, disproportionately affect marginalized groups—68% of Dalit women and over 50% of women in Haryana—and contradict the 73rd and 74th Constitutional Amendments' aim of grassroots self-governance for accountable local decision-making. No empirical evidence shows formally educated representatives outperform others at the panchayat level; anecdotal evidence highlights women's experiential knowledge in addressing deprivation. Such rules reflect state failure in education delivery and paternalism, ignoring Hayek's 'knowledge problem' of distributed local knowledge and Bastiat's warning on unintended consequences. Governments should prioritize equitable education, local autonomy, and awareness over coercive schemes like toilet mandates, fostering true liberal democracy at the grassroots.

**Key points:**

- Minimum educational qualifications for local elections lack empirical support and disproportionately disenfranchise marginalized groups like Dalit women.
- Rajasthan's 2015 amendment requiring Class 8/10 qualifications was scrapped in 2018, renewing debate on 73rd/74th Amendments' potential for accountable governance.
- Such barriers subtly restrict voters' right to choose representatives based on local knowledge, per Hayek's insights.
- States should focus on providing equitable education and respecting panchayat autonomy rather than imposing top-down schemes.

**By Ayush Mehrotra**

* * *

Years before he became the Father of the Indian Constitution, Dr Bhimrao Ambedkar in his famous memorandum to the Simon Commission in 1928, laid down what was to become the benchmark for those Indian nationalists pleading the case for universal franchise.  

“Those who insist on literacy as a test and insist upon making it a condition precedent to enfranchisement, in my opinion, commit two mistakes. Their first mistake consists in their belief that an illiterate person is necessarily an unintelligent person. Their second mistake lies in supposing that literacy necessarily imports a higher level of intelligence or knowledge than what the illiterate possesses,” he stated in his now-classic memorandum.  

In 2015, the Rajasthan government brought in an amendment to the Rajasthan Panchayati Raj Act, 1994, which required candidates contesting sarpanch elections to have passed Class 8 and those contesting zila parishad and panchayat samiti elections, to have cleared Class 10.   

The amendment also restricted people with non-functional toilets in their houses from contesting elections. Soon after, Haryana introduced similar educational qualification requirements for its own local body elections. 

In the *Rajbala v. State of Haryana* case, 2015, the Supreme Court upheld the contentious amendments, saying that the right to contest is neither a fundamental right nor a statutory right, but is a constitutional right, and can be regulated by laws passed by the legislature. The court opined that, “It is only education which gives a human being the power to discriminate between right and wrong, good and bad. Therefore, prescription of an educational qualification is not irrelevant for better administration of panchayats.”

However, the new Rajasthan government scrapped these amendments soon after assuming power in December 2018, resulting in a renewed debate on this subject, which should be an opportunity to remind Indians of the huge potential that the 73rd and 74th Amendments bestow on the people when it comes to better governance, accountability and transparency. 

These landmark Constitutional Amendments were passed by the Parliament in 1992 and introduced local self-governance in rural and urban India. Panchayats in rural areas and municipalities in urban areas became the institutions of self-government. It was envisaged that this arrangement would bring the decision-making authorities closer to the people, thereby making governance more effective and accountable.

India strives to be a forward-looking country but still has backward-looking institutions, according to noted social scientist, Shiv Vishwanathan, in an April 2015 article entitled *A New Public Policy for New India.* The 73rd and 74th amendments are an important institution in themselves, which have the capacity to transform how India is governed. 

There is no empirical evidence to suggest that people with formal education can be better public representatives and administrators than those without education, especially at the panchayat level.

Ironically, anecdotal evidence seems to propose the opposite. Many elected representatives, especially women panchayat leaders, draw from their own experiences and hardships that their families face every day to tackle issues more effectively due to their holistic understanding. It makes them seem better equipped to handle deprivation and lack of opportunity, as opposed to those who have been empowered all their lives.  

Barring people from contesting elections by erecting barriers to entry based on educational qualification limits the people’s right to choose their representative who they deem most suitable. This is an indirect and more subtle way of restricting people’s right to choose their leader. 

Such laws have the tendency of being discriminatory. On the face of it they might seem to be applicable for everyone, but the most disproportionate effect of such restrictions is seen more among the marginal and other vulnerable groups in the society. 

According to Namita Bhandare’s article, *Panchayat and Gender Imbalance* published in 2015, 68% of Dalit women and over 50% of all women were disenfranchised because of the Haryana law.

It is unwise to blame the people for not being formally educated, when in fact it reflects the state’s failure to discharge its constitutional obligations effectively. 

Lastly, the central and state governments should stop treating local bodies as their vassals by imposing on them the responsibility of ensuring the success of the Central and state government’s schemes and policies only. Rather than adopting a carrot and stick policy for implementing schemes like Swachh Bharat Mission, a more inclusive way would be to spread awareness about the various benefits of having toilet and clean surroundings. 

Deprivation is a function of state’s neglect and social discrimination. Instead of behaving like an ostrich by burying its head in the sand in calamitous times, state governments would do better if they focused more on ensuring equitable educational opportunities and respecting and strengthening the autonomy of the local bodies. 

The first and second tiers of governments as well as the judiciary should remember the ‘knowledge problem’, which dwells on the distributed nature of knowledge that cannot be accessed by just a handful of decision makers at the top, as pointed out evocatively by Fredrick A. Hayek, in an article entitled *The Use of Knowledge in Society,* in the American Economic Review.

In a liberal democracy, it is imperative that any such law, which can have considerable impact on one of the tenets of democracy, should be formulated keeping in mind both its intended as well as unintended consequences, noted Claude-Frédéric Bastiat, French economist, writer and a prominent member of the French Liberal School, in the nineteenth century.  

Paternalistically mandating what makes a person a ‘worthy’ candidate runs counter to the spirit of seeking to expand democracy by bringing self-government to the grassroots.

Read more: [SO Musings: A Dialogue Between Socrates And Lenin](https://spontaneousorder.in/a-dialogue-between-socrates-and-lenin/)

* * *

**About Ayush Mehrotra**

Ayush is a Master of Public Policy (MPP ‘21) candidate at the National Law School of India University, Bengaluru. He has a bachelor’s degree in Economics from the University of Delhi. Ayush is interested in exploring policies at the intersection of political economy, governance, and institutional design. He also has a keen interest in following Indian politics and wishes to try his hands on food blogging someday.

## SO Musings: A Dialogue Between Socrates And Lenin

Original: https://www.spontaneousorder.in/p/a-dialogue-between-socrates-and-lenin

Author: Spontaneous Order

Published: 2020-07-24T16:03:46.000Z

Topics: communism-critique, state-coercion, private-property, liberal-dialogue

> The Communist doctrine of ‘from each according to his ability, to each according to his needs’ seemingly presents a rosy vision of justice and equality. However, it crucially ignores the way incentives shape human behaviour and the role of the agency.

**Summary:**

The post critiques the communist principle 'from each according to his ability, to each according to his needs' from a classical-liberal viewpoint, arguing it ignores how incentives shape human behavior and individual agency, while state coercion to enforce a 'Just Society' devolves into Orwellian inequality where some animals are more equal than others. It features an excerpt from Feroza Seervai's July 1969 article in Freedom First magazine, staging a fictional dialogue between Socrates and the newly deceased Lenin on January 21, 1921. Socrates inquires if Lenin's Communist State mirrors his ideal republic, prompting Lenin to denounce bourgeois ideology and assert that true justice, per Marx, ends exploitation by abolishing private property and establishing proletarian rule for equality. Socrates, feigning ignorance of modern terms like 'bourgeois,' 'capitalist,' and 'proletariat,' requests simpler explanations, highlighting the fallacies in the Leninist vision. The post promotes IndianLiberals.in as a repository of Indian liberal writings and positions Spontaneous Order as showcasing liberal critiques of pseudo-socialism in India.

**Key points:**

- Communist doctrine overlooks incentives and human agency, leading to coercive state enforcement that creates inequality.
- Feroza Seervai's 1969 Freedom First article uses a Socratic dialogue to expose flaws in Lenin's Marxist vision of justice via proletarian rule and abolition of private property.
- Lenin claims his classless society achieves true equality, contrasting it with Socrates' 'bourgeois' republic.
- Socrates probes Lenin for plain-language definitions of key terms to reveal ideological inconsistencies.

**By Spontaneous Order**

* * *

*The Communist doctrine of ‘from each according to his ability, to each according to his needs’ seemingly presents a rosy vision of justice and equality. However, it crucially ignores the way incentives shape human behaviour and the role of the agency. Moreover, the Communist deployment of state coercion as a tool to create a Just Society translates into an Orwellian caricature of some animals being more equal than others.*

*In the July 1969 issue of the* Freedom First *magazine, Feroza Seervai, discussed the vexed issue in an interesting manner. She put Lenin in a Socratic dialogue with – who else but – Socrates. In a fictional setting, she would expose the fallacy in the Leninist vision of a Just Society built by state coercion.*

*Produced below is an excerpt from the article.*

Since Socrates was a pagan and Lenin an atheist, neither of them went to Heaven. But on the 21st of January 1921, the soul of Lenin newly arrived from Earth, met the soul of Socrates somewhere in. . . . and they talked upon matters of importance.

**Socrates**: I am overjoyed, Lenin, to meet you. Hundreds of years ago I expounded the idea of the perfect republic and now, I understand you have established a Communist State. Have you based it on my ideal republic?

**Lenin:** What a joke! Comrade Socrates, what a joke! But an intellectual like you is capable of any nonsense. I realize your bourgeois ideology! I, who have fought and won against the capitalists-scoundrels! I, who have brought equality to all men!! I, who have established a classless society!!! Not I, comrade. In my state I have established justice. In your bourgeois ideology there is no freedom, but serfdom. How can you know Justice, with your bourgeois mentality!

**Socrates:** Lenin, you strike terror in me indeed, when you speak so vehemently. Pray, be gentle with me, and a little patient; for I would fain know from you, in what does Justice consist?

**Lenin:** As my master Marx taught, there is but one evil: the exploitation of man by man. There is one way to put an end to it: by abolishing all private property, by establishing the rule of the proletariat. This is the way to bring true equality among all men- this is Justice.

**Socrates:** I fear Lenin, I am not qualified to understand you. I have been long away from Earth. You have called me bourgeois; you speak of the capitalist and the proletariat; you address me as comrade. These terms are new to me and I must request you to speak to me in simple words.

  
*The full text can be accessed [here](http://www.freedomfirst.in/uploads/issues/pdf/206.pdf).*

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [Who is Getting Their Hands Dirty – Solid Waste Management Rules, 2016](https://spontaneousorder.in/who-is-getting-their-hands-dirty-solid-waste-management-rules-2016/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Who is Getting Their Hands Dirty – Solid Waste Management Rules, 2016

Original: https://www.spontaneousorder.in/p/who-is-getting-their-hands-dirty-solid-waste-management-rules-2016

Author: Spontaneous Order

Published: 2020-07-22T15:25:14.000Z

Topics: solid-waste-management, waste-segregation, urban-planning, public-private-partnerships

> Imagine lifting your car. Now, multiply it 175 times. That is the volume of waste generated by the time a reader finishes reading this article. About 350 tonnes, disintegrating into methane, toxic heavy metals and other pollutants, combusting spontaneou..

**Summary:**

Urban India generates 54.75 million tonnes of municipal solid waste annually, much of which is mismanaged through unchecked contractor dumping, as seen in Bangalore's Mavallipura village with 3,600 tonnes per day illegally dumped in 2015. The 2016 Solid Waste Management Rules aim to assign responsibilities across stakeholders but fail structurally: they mandate source segregation without effective incentives or penalties—Delhi's Rs 200 fine yields only 39% door-to-door collection and 2% compliance—appeal to private manufacturers' altruism for packaging waste recovery without economic logic, and promote waste-to-energy plants that risk toxic emissions like dioxins without prior segregation. From a classical-liberal viewpoint, these top-down mandates neglect individual responsibility and market incentives. Solutions emphasize threefold reforms: enforce segregation via national advocacy under Swachh Bharat and Smart Cities, combined with local penalties like Bangalore's refusal to collect unsegregated waste; reclaim municipal land from dumpsites, as Indore did 100 acres for under Rs 10 crores, aided by public-accessible audits to curb illegal landfills and inefficiencies like Nanded's Rs 15 crore spend against Rs 75 lakhs tax revenue; and boost private door-to-door collection through PPPs like SWaCH cooperatives, cutting costs (e.g., 35% MCD budget hike avoided) while integrating informal sectors under safety standards.

**Key points:**

- Solid Waste Management Rules 2016 mandate source segregation and private waste handling but lack incentives, leading to low compliance like Delhi's 2%.
- Implement incentives and penalties for segregation, including local refusals to collect unsegregated waste and national advocacy via Swachh Bharat.
- Prioritize land reclamation from dumpsites with public audits, as in Indore's successful Rs 10 crore recovery of 100 acres.
- Expand private and cooperative door-to-door collection via PPPs to reduce government costs and street litter while ensuring worker safety.

**By Kaustubh Sharma**

* * *

Imagine lifting your car. Now, multiply it 175 times. That is the volume of waste generated by the time a reader finishes reading this article. About 350 tonnes, disintegrating into methane, toxic heavy metals and other pollutants, combusting spontaneously.  

Ironically, the waste that is thrown out returns more potent, mixed with the air that people breathe and the water, which is consumed. According to a 2018 Press Information Bureau (PIB) release, urban India produces 54.75 million tonnes of municipal solid waste annually. 

The responsible handling of this waste has been a challenge for megacities dealing with the urban sprawl. The go-to strategy has been for municipalities to pay contractors to dispose it off. In an ideal world – and by law – this would mean the proper treatment of waste.

In reality, this system runs largely unchecked and cases like Mavallipura village (in Karnataka) came up where illegal dumping of nearly 3.600 tonnes per day in 2015 was normal, according to Shwetmala H.N. and Ramachandra T.V. in a 2017 article entitled *“Nature and extent of unauthorized waste dump sites in and around Bangalore city”* in the Journal of Material Cycles and Waste Management. 

To improve the system, the central government updated the Solid Waste Management Rules in 2016. The rules dictate the roles and responsibilities of various stakeholders in the supply chain of waste and try to push more responsibility on to local bodies. However, there are major structural problems here.  

The first is related to the segregation of waste at source. The rules devolve the responsibility to individual households, laying down the categories to segregate waste into and the ways to categorise waste in each of them. Trouble is that the rules abruptly end at this point and do not generate any structure to ensure this happens or even nudge people to do so. Incentive and/or penal structures are devolved to the states and they vary in effectiveness. 

For instance, the Delhi government fines households Rs 200 for non-compliance with the segregation directive. Yet, based on self-reported data, there was only 39% door-to-door collection in Delhi, point out I.J. Ahluwalia and U. Patel, in an ICRIER Working Paper entitled *“Solid Waste Management in India An Assessment of Resource Recovery and Environmental Impact”.* 

This makes the assigning responsibility for non-compliance difficult and is reflected in a 2% estimated compliance rate, points out U Patel. Besides this, the rules acknowledge the need to create capacity at the local level for waste segregation and management, but this is neither arranged nor accounted for in the subsequent assignment of responsibility.

Secondly, the rules try to bring compliance from private sector manufacturers in handling their waste, but do not generate any incentive structure for this. 

There is an appeal to manufacturers and brand owners to recollect packaging waste. This appeal lacks any serious backing or implementation logic; private manufacturers would naturally collect that in which they find value. Companies like Coca Cola invest in recollecting supplied bottles because they can reuse them in their production. However, other companies like Amazon would not find it profitable to collect their packaging material. So, this appeal does little more than plead to the altruism of a company to consider a potentially non-viable economic idea.

Lastly, the rules promote the setting up of centralised waste to energy (WTE) plants. While there is benefit to be had from these plants, their effectiveness presupposes effective segregation and strict emission controls.

In their absence, WTE plants could release heavy metals like mercury and lead. They would also generate dioxin and furan, which can cause health ailments, MR Beychok, explains in an article entitled *“A data base of dioxin and furan emissions from municipal refuse incinerators”,* which appeared in Atmospheric Environment, Elsevier B.V. in 1987.

Dioxin was one of the components of the herbicides used in Agent Orange and has led to mental and physical deformities in the exposed Vietnamese population many generations on, wrote a group of experts in *“Recent Dioxin Contamination From Agent Orange in Residents of a Southern Vietnamese City,”* which came out in the Journal of Occupational and Environmental Medicine. Therefore, while WTE plants are carbon negative, they are not an entirely reliable source of waste handling.

Solutions need to be threefold. Firstly, target segregation. If the expectation is for individuals, households and businesses to segregate waste at source, there needs to be an effective incentive and penal structure in place. From the central and state point of view, this involves strong advocacy for individual responsibility under the umbrella of the Swachh Bharat Mission and the Smart Cities Mission. For example, Smart City projects undertaken in cities with large waste generation like Ahmedabad do not include any waste management project.

Locally, ward-level redundancy needs to be built into the system to ensure that the segregation happens as close to sources as possible, if not exactly at the source. 

This can be combined with penal action for non-compliance, such as in Bangalore where waste collectors refuse to collect unsegregated waste. This helps with downstream costs of segregation and downstream segregated handling.

Secondly, increase greater focus on municipal land reclamation from dump sites. This has economic and ecological value as shown in Indore, where the city reclaimed about 100 acres of land in six months for less than Rs 10 crores. 

This would be aided by an independent reporting and auditing mechanism to be set up for two reasons; (a) to prevent any outbreak or health disaster during bacterial decomposition of waste and (b) to avoid illegal landfills from operating.

Having a random audit mechanism, approachable by the public, would help pass more power to the people and avoid situations like Nanded, where the city spent Rs 15 crore on collection and transport of waste to landfills against a tax accrual of Rs 75 lakhs, data published here after a personal communication with the Commissioner of Nanded, Sameer Unhale, revealed. 

Lastly, increase private involvement in a door-to-door collection level. This reduces street litter since people do not have to bring their waste to a location, which helps integrate the informal sector at a lower cost to the government. For instance, door-to-door collection would require a 35% increase in the MCD budget, suggest R Mehta and S Dasgupta in *“Alternative service delivery models to transform citywide municipal waste services: the case of the Municipal Corporation of Delhi”* at a  CWG-WASH Workshop on Solid Waste, Health and Millennium Development Goals, held in 2006. 

Instead, private entrepreneurs and cooperatives (like SWaCH) working directly with the municipal government can bring this cost down. 

However, this involvement needs to adhere to minimal acceptable safety standards for workers. It cannot be done ex post-facto, the integration of a municipal level PPP, since it would expose not just the workers to health hazards, but also potentially the citizens.

Read more: [Railway Privatisation Needs an Indian Spin](https://spontaneousorder.in/railway-privatisation-needs-an-indian-spin/)

* * *

**About Kaustubh Sharma**

Kaustubh Sharma is a student at IIM Lucknow and an ex-business intelligence consultant and a product analyst. He is passionate about urban planning, solid waste management and environmental policies in India. He uses his interest in wildlife photography to drive messages of conservation.

## Railway Privatisation Needs an Indian Spin

Original: https://www.spontaneousorder.in/p/railway-privatisation-needs-an-indian-spin

Author: Spontaneous Order

Published: 2020-07-21T18:14:43.000Z

Topics: railway-privatization, infrastructure-reform, public-sector-efficiency, pricing-policy

> In India, private railways have a chequered history. The country began with British-inspired private railway companies in the middle of the 19th century, when the then Governor-General of India, Lord Charles Hardinge, pursued the idea of allowing entrep..

**Summary:**

India's railways, nationalized in 1951 after private origins under British rule, face chronic inefficiencies as a bureaucratic monolith despite being the world's fourth-largest network: persistent accidents, 8.85 crore waitlisted passengers in 2018-19, endless waiting lists, and diversion to non-core functions like schools and medical services. The 2020 plan to privatize 151 trains on 109 high-demand routes with Rs 30,000 crore investment aims to introduce modern technology, cut transit times, boost competition, lower costs, and improve service quality via private operators paying fixed charges, energy costs, and revenue shares. However, the UK's 1994 privatization fragmented the network, leading to poor maintenance, accidents, cost escalations, and partial re-nationalization under Network Rail, underscoring the need for an 'Indian spin' tailored to railways as a natural monopoly prioritizing massive investments and passenger safety over pure profit motives. Classical-liberal reforms should include demand-supply pricing to end taxpayer subsidies and price ceilings that starve modernization funds, construction of dedicated freight corridors to separate passenger and freight traffic, shedding non-core activities, and establishing a regulator to resolve conflicts between public and private operations, fostering efficiency amid bureaucratic hurdles like unions and reservations.

**Key points:**

- Privatize select high-demand routes with Rs 30,000 crore investment, where private operators pay fixed haulage, energy, and revenue shares to Indian Railways.
- Adopt demand-supply pricing over subsidized price ceilings to generate revenue for modernization and reduce waitlists by curbing unnecessary travel.
- Build dedicated freight corridors to separate passenger and freight traffic, enabling faster speeds and more passenger trains.
- Tailor privatization to Indian conditions with a regulator to address natural monopoly risks, safety concerns, and potential conflicts, learning from UK's failures.

**By Ananya Kalra**

* * *

In India, private railways have a chequered history. The country began with British-inspired private railway companies in the middle of the 19th century, when the then Governor-General of India, Lord Charles Hardinge, pursued the idea of allowing entrepreneurs to set up a rail system in India. 

Independent India nationalised the railway network in 1951, which has continued since, but in 2020, the urge to revisit privatisation has come up yet again.  

On July 1, 2020, the Railway Ministry announced that 151 trains on 109 identified routes will be operated by the private sector. The project would entail an investment of about Rs 30,000 crore and the trains will run on routes where the demand is higher than the existing capacity. 

The private entity selected, will pay the Indian Railways fixed haulage charges, energy charges as per actual consumption and a share in gross revenue determined through a transparent bidding process. 

“Among the major objectives of this project are the induction of modern technology and reduction in transit time and the demand-supply deficit. We are eyeing a quantum jump in technology,” Railway Board Chairman, V.K. Yadav, told this writer. 

The government believes that private players will encourage greater competition, lower costs and improve the quality of service. 

Indian Railways, correctly known as the nation’s lifeline, is the world’s fourth-largest network, according to e-Rail. But despite its presence and utility over the decades, it has turned into a vast bureaucratic monolith, which could do with some more efficiency.  

**INFRASTRUCTURE**

A look at the numbers is revealing. According to official figures, with a budgetary allocation of Rs. 65,837 crore and the highest-ever outlay of capital expenditure pegged at Rs 1.6 lakh crore in the Union Budget 2019-20, the quality of services offered, a rise in the number of rail accidents, lack of modernisation and never-ending waiting lists, have all made a strong case for introducing privatisation in the Indian Railways.  

In 2018-19, for instance, the reserved passenger volume was 16% of the total originating commuters, and almost 8.85 crore waitlisted travellers could not get tickets!  

To resolve the increasing need for road decongestion, accident reduction and ensuring energy security, additional dedicated freight corridors need to be constructed. This will lead to separation of passenger and freight traffic and availability of tracks for more passenger trains. 

To be sure, many countries have privatised parts, or even their entire railway networks. UK, Japan, Canada, Sweden, Australia and New Zealand, among other countries, come under this category. The UK government decided to privatise railways in 1994 to meet the increased demand for rail services. The single entity of government-owned British Rail was broken up, with various regulatory functions transferred to the newly created office of the Rail Regulator. The ownership of infrastructure, including the larger stations, was passed to Railtrack, a group of companies that owned the track, signalling, tunnels, bridges, level crossings and all but a handful of the stations of the British railway system until 2002.

Track maintenance and renewal assets were sold to 13 companies across the network and ownership of passenger trains and rail freight was passed to other private firms. 

Post this decision, private players failed to deliver effective network enhancement. Besides, inadequate control of infrastructure maintenance led indirectly to significant cost escalation and rail accidents. 

As this arrangement did not work out, the government took charge of the railway strategy, including expenditure, the main aim being to protect the interests of both the taxpayers and the fare-payers. Network Rail, the new infrastructure owner, was given fuller responsibility for the operation and performance of the rail network, but the government specified what Network Rail should deliver in terms of infrastructure outputs,  being priced via a high-level output specification (HLOS), and a statement of funds available (SOFA). 

This case study clearly suggests that privatisation or even partial privatisation needs to be tailored to Indian conditions. 

The railway is considered a natural monopoly that requires prodigious investment while being also responsible for the safety of its passengers. There is a fear that the private sector might overlook these two critical aspects, driven by their profit-earning motive. The adage holds good: \`If your train is on the wrong track, every station you come to is the wrong station.’ 

With traditional railways operating in competition with new private trains, conflict of interest could lead to disputes, minus a regulator proposed for settling them. Railway Board chairman VK Yadav, however, believes that the national transporter will get a regulator. 

**PRICING**

The government needs to consider not just the farepayers, but also taxpayers. It must adopt the demand-supply model for pricing, rather than opting for the price ceiling template. It needs to fund the railways more from fares than subsidising them from taxes. 

Under the price ceiling policy, the economic burden ultimately falls on the taxpayers as most of the cost of the ticket is subsidised and ultimately the railways are starved of funds that are critical for modernisation. 

The demand-supply model will not only resolve the waiting list issue, as the ones who really need to travel will do so and undue travelling will stop due to higher prices, but the railways will end up with more revenue, which is crucial for modernisation and expansion.

In an interview, responding to a question on the possibility of higher fares in these trains, Chairman Yadav said that due to the competition in the market, he did not expect the fares to be very high.

**EFFICIENCY**

Currently, a great deal of railway’s attention gets diverted from its core functions like running trains and serving passengers, to include a list of non-core functions like running schools and offering medical services to its employees. The civil engineering department gets the responsibility of maintaining the tracks as well as the stations. 

More dedicated freight corridors need to be constructed so that the passenger and freight traffic is separated, which will ultimately lead to faster speed and availability of tracks for additional passenger trains. 

Sadly, the bureaucratic minefield, where factors such as reservation, labour unions and procurement routinely discredit the merits of the talented workforce, have also come to dominate the operational agenda of the Railways. Privatisation could offer a way out of these institutional troubles. 

Read more: [Unboxing the e-Vidya Scheme for Learning](https://spontaneousorder.in/unboxing-the-e-vidya-scheme-for-learning/)

* * *

**About Ananya Kalra**

Ananya is an undergraduate student, pursuing B.A. Economics Honours from Lady Shri Ram College for Women. She is passionate about researching and expressing her views. She has a diversified research interest in the areas of behavioural economics, political economics and social economics. She has a newfound interest in public policy and currently, she is interning at the Centre for Civil society. She loves travelling and photography. She wishes to run her own research firm someday.

## Unboxing the e-Vidya Scheme for Learning

Original: https://www.spontaneousorder.in/p/unboxing-the-e-vidya-scheme-for-learning

Author: Spontaneous Order

Published: 2020-07-20T18:48:12.000Z

Topics: education-policy, online-education, decentralization, rural-education

> As the new school session reopens, children smell their new books, try their uniforms and wait to share summer shenanigans with their friends and peers. Not this time though. With the global pandemic, the new school session will be different. Mobile ph...

**Summary:**

The PM e-Vidya scheme, announced as part of India's economic relief package, promises multi-mode access to education via apps, TV, radio, and podcasts for 25 crore school students and 3.7 crore in higher education, but it largely fails marginalized, rural, and low-income groups due to limited access—only 24% of Indians own smartphones, 15% of rural populations have internet, and DTH subscribers number 69.3 million. The 'One Nation, One Platform' DIKSHA app covers just 14 languages amid 47 mediums of instruction, sidelining linguistic diversity, while 'One Class, One Channel' raises questions about state board involvement versus centralized NCERT content and lacks mechanisms for teacher monitoring. Community radio efforts, limited to one CBSE podcast amid 289 stations, add little without guidelines or training. Special content for disabled students ignores broader needs beyond visual/hearing impairments. From a classical-liberal lens, the scheme's top-down approach neglects decentralization; states and districts should curate content, supplement with SMS/IVR learning, distribute textbooks via ration shops (as 68% Delhi parents desire), provide teachers student contacts for socio-emotional support and WhatsApp groups, and plan post-scheme recovery with teacher training for a shorter academic year.

**Key points:**

- PM e-Vidya assumes universal tech access, excluding rural and poor students where smartphone ownership is 24% and rural internet 15%.
- DIKSHA covers only 14 languages despite 47 mediums of instruction, and TV channels unclear on state vs. NCERT control.
- Decentralize implementation to states/districts for content curation on DIKSHA, radios, and channels; add SMS/IVR and textbook distribution via ration shops.
- Equip teachers with student contacts for calls, WhatsApp groups, and socio-emotional support; train for new normal and learning recovery.

**By Deepali Barapatre**

* * *

As the new school session reopens, children smell their new books, try their uniforms and wait to share summer shenanigans with their friends and peers. 

Not this time though. With the global pandemic, the new school session will be different. Mobile phones, tablets, and laptops have turned many students’ homes into classrooms, while for others, the new session may not begin until the physical spaces called schools, reopen. 

Unfortunately, the recent announcement of the fifth tranche of economic relief package did not offer any solace for the latter. On May 17, the finance minister, Nirmala Sitharaman, announced PM e-Vidya scheme, which will allow multi-mode access to online education. It focusses on a range of measures, including mobile applications, TV channels, community radio and podcasts. 

The government claims it will benefit 25 crore school students and 3.7 crore students enrolled in higher education. But before we hail digital education as the new panacea for all ills, we must realise the scheme assumes access to smartphones, internet and DTH connection. 

India is a country where 24% of the population own a smartphone, and only 15% of the rural population has access to the internet and the number of DTH subscribers stands at merely 69.3 million, points out L Silver in an article titled *Smartphone Ownership Is Growing Rapidly Around the World, but Not Always Equally.* 

The new PM e-Vidya scheme has failed to include the needs of the marginalised, rural and economically backward communities into their narrative of the new ‘Aatmanirbhar’ Indian. 

Even with the population that has access to the internet and smartphone, the PM e-Vidya scheme excludes them piece by piece. Under ‘One Nation, One Platform’, the government promoted DIKSHA application to access e-learning content available in 14 languages. The ground reality is India has 47 languages as a medium of instruction, points out R Meganathan in a study entitled *Medium of Instruction in School Education in India: The policy, status and the demand for English medium education.* 

It prompts the question: why have we left many students behind during the global pandemic? To include students who do not have access to the internet and smartphones, the government launched the ‘One Class, One Channel’ initiative where each class from Grade 1 to 12 will get a dedicated channel. 

For the new DTH channels, the government had asked NCERT to work on the content. However, what remains unclear is the role of state boards in the initiative. Will the states have the freedom to develop content or will they broadcast centralised curriculum from NCERT? Besides, learning is not a one-way process and with lectures beaming out of screens, it is also unclear how teachers will monitor and evaluate students’ learning.

One strand of the scheme focuses on increasing penetration by extensive use of community radios and podcasts. The only podcast that exists is Shiksha Vani, which has CBSE content for grade 9-12. Without clear guidelines on the use of 289 community radio channels, and training teachers on using them, it adds little value to provide personalised learning. 

Special e-content is developed for visually impaired and deaf students on Digitally Accessible Information System (DAISY) and in sign language on NIOS website/YouTube. The state of students with disabilities was dire before COVID-19 and it is unlikely to change with digital content available. Visual and hearing-impaired students are only less than half of the differently-abled community, points out NCERT’s Eighth All India Education Survey.

Education for the differently-abled is much more nuanced than making e-learning available and a top-down approach will not solve it. 

The e-Vidya scheme can have a bigger impact if it decentralises its implementation, allowing states and districts to curate content for DIKSHA, community radios and TV channels. 

The government should also consider supplementing it with SMS-based or Interactive Voice Response (IVR) -based learning to include students with low or no-tech abilities. 

These tools will give the power back into teachers’ hands who knows each student best, allowing them to differentiate learning. The education departments should also plan for distributing free textbooks through ration shops, since 68% of parents in Delhi said they want textbooks to accompany online learning, according to a media report.

However, the customers, in this case, are India’s children and their needs come before any Math or Science lessons. Teachers have always played the role of secondary caregivers in a child’s life and right now have the important responsibility of ensuring the socio-emotional wellbeing of their wards. 

At the moment though, government school teachers are unable to connect with their students even through an ordinary phone call, simply because they do not have access to their students’ database. Getting teachers, the contact information of their students will not only help them connect to make them feel safe but also increase their network to enrol them in WhatsApp or SMS groups. 

E-Vidya scheme ends when the school opens, but what happens next? With a shorter academic year and a longer gap in studies for children excluded through e-Vidya, it is time to think about how best to help students’ rapid learning recovery? 

There is a long time before India moves fully online, but even with technological augmentations in the learning landscape, it is important to train teachers and equip them with skills to deal with the new demands of the new normal.

Read more: [States Should Follow Karnataka in Land Reforms, Opposition is Unfounded](https://spontaneousorder.in/states-should-follow-karnataka-in-land-reforms-opposition-is-unfounded/)

* * *

**About Deepali Barapatre**

Deepali Barapatre is a programme officer at Udaan India Foundation. Udaan is an educational not-for-profit organisation that aims to provide equal opportunities to low-income children and youth from foundation to employability.

## States Should Follow Karnataka in Land Reforms, Opposition is Unfounded

Original: https://www.spontaneousorder.in/p/states-should-follow-karnataka-in-land-reforms-opposition-is-unfounded

Author: Spontaneous Order

Published: 2020-07-20T16:02:19.000Z

Topics: land-reforms, agricultural-policy, land-leasing, property-rights

> If there is one positive side effect of the otherwise devastating COVID-19, it has to be the pace of legislative reforms introduced to correct the agricultural crisis in India. Keeping up with this trend, on 13 July, Karnataka passed The Karnataka Land ..

**Summary:**

Karnataka's Karnataka Land Reforms (Amendment) Ordinance 2020 doubles individual land holding limits to 20 units and family limits to 40 units, while allowing institutions, societies, trusts, companies, associations, and those with non-agricultural income over Rs 25 lakhs to acquire land, marking a vital step in correcting India's agricultural crisis. Opposition claiming these reforms favor big firms and harm farmers is unfounded, as archaic land laws—restricting holdings, sales to non-agriculturists, non-agricultural use, and leasing—have stifled farmers' entrepreneurial potential and productivity. Land ceiling laws failed to redistribute effectively or boost output, with average holdings shrinking to 1.08 hectares in 2015-16 and research by Ghatak and Roy (2007) confirming no productivity gains. Tenancy bans drive informal leasing, affecting 10% of land officially but more informally, leaving landless tenants vulnerable without subsidies or credit. Restrictions depress land values and trap farmers in low-productivity activities. States must follow Karnataka's lead, alongside reforms like Uttarakhand's leasing relaxations and Maharashtra's amendments, to enable legal leasing, free land use, and achieve doubled farmers' incomes, as urged by NITI Aayog and Panagariya.

**Key points:**

- Karnataka's 2020 ordinance doubles land holding limits to 20 units for individuals and 40 for families, and permits non-agriculturists with high income or institutions to buy land.
- Land ceiling laws have miniaturized holdings to 1.08 ha average, failed to raise productivity, and reduced redistributed plot sizes over time.
- Tenancy restrictions hide 25-30% informal leasing, excluding vulnerable landless tenants from subsidies, credit, and insurance.
- States should repeal restrictions on land sales, uses, and leasing to unlock farmer entrepreneurship and prosperity, ignoring unfounded opposition.

**By Bhuvana Anand**

* * *

If there is one positive side effect of the otherwise devastating COVID-19, it has to be the pace of legislative reforms introduced to correct the agricultural crisis in India. Keeping up with this trend, on 13 July, Karnataka passed [The Karnataka Land Reforms (Amendment) Ordinance 2020](https://www.eqmagpro.com/wp-content/uploads/2020/07/KLRAmendmentOrdinance-2020_compressed.pdf). Amending 10 sections of the Karnataka Land Reforms Act, 1961, it effectively does two things:

1.  Doubles the amount of land an individual and family can hold to 20 and 40 units respectively.
    
2.  Institutions, societies, trusts, companies, associations and individuals/families with non-agricultural income higher than Rs 25 lakhs can acquire land.
    

In the last one month, several political and farmer groups have argued that such reforms will “break the back” of the farming community and favour “big firms”. Such criticism is unfounded. We need these and many more reforms, not only in Karnataka but in the entire country.

Archaic agricultural laws have locked in farmers from realising their potential as entrepreneurs and from making business decisions that can raise productivity and income. In no other sector do we have such absurd binding constraints on land use. The laws, still in force in many states, restrict the amount of land one can hold, the sale of land to a non-agriculturist, use of land for non-agricultural purposes, and the leasing of land.

While Karnataka has reformed laws relating to purchase of land, land lease laws continue to be excessively restrictive. For example, only a [soldier or a seaman](https://niti.gov.in/writereaddata/files/document_publication/Final_Report_Expert_Group_on_Land_Leasing.pdf) can lease land. Do only soldiers have the right to be away from their farmland?

Perhaps these restrictions were beneficial in the short run, these restrictions have certainly outlived their purpose and have had unintended negative consequences.

Land ceiling laws have rendered agricultural land unproductive. The objective of land ceiling laws was to redistribute land from the rich to the poor and to increase productivity. This has hardly been the case, with the average property distributed to the poor [decreasing](https://thewire.in/agriculture/land-reforms-fail-5-of-indias-farmers-control-32-land) over the years. Researchers Ghatak and Roy in [2007](https://www.researchgate.net/publication/5216389_Land_Reform_and_Agricultural_Productivity_in_India_A_Review_of_the_Evidence?enrichId=rgreq-6a40d23b409b22bf80fbc2c99615b1fd-XXX&enrichSource=Y292ZXJQYWdlOzUyMTYzODk7QVM6NDM5NTA0ODQ3ODA2NDY5QDE0ODE3OTc1Mjk2ODE%3D&el=1_x_3&_esc=publicationCoverPdf) found that the land ceiling laws have failed to increase productivity, and this finding continues to ring true a decade later.

In effect, holding-size restrictions have miniaturised land landholdings and reduced what can be eked out from these tiny farms. The income generated from these land holdings is insufficient to support farm families. In 2015-16, the average size of holding was [1.08 hectare](http://agcensus.nic.in/document/agcen1516/T1_ac_2015_16.pdf). Worse, the average landholding size has steadily reduced since the 1970s.

Tenancy laws have pushed vulnerable tenant farmers to the shadows. Conventional wisdom teaches us that bans only push activities under the rug. The National Sample Survey found that in 2015-16 only 10% of the land was under lease, whereas the erstwhile Planning Commission had reported the number to be as high as 25% in some micro studies. More than a third of the tenants are landless. It is these farmers, the most vulnerable, who are at the mercy of informal contracts. As most policies target landowners and tenancy remains illegal, they do not even benefit from government support programs like input subsidies, credit or insurance facilities.

Restrictions on use and sale of land work against farmer prosperity. State laws also limit who can buy land (Indian resident, individual or company, agriculturist, tribe members) and the accepted mode of transfer (gift vs sale). Consider the example of The Himachal Pradesh Tenancy and Land Reforms Act, 1972 that prohibits sale, gift, will, exchange, lease, mortgage, or tenancy “in favour of a person who is not an agriculturist.” If this is not enough, the Act defines an “agriculturist” as a *landowner* who cultivates land *personally*.

Restrictions on the purchase and use of land depress the land price and trap farmers in low-productivity activities. Property that cannot be sold or used freely is of lower value than the property that can be. In a modern open economy, such restrictions should be avoided unless absolutely necessary for environment protection.

Reluctant states will fail to “double farmers’ income” if they don’t reform land laws. While some states have shown interest, the overall pace of reform has been sluggish. In 2016, the NITI Aayog proposed a Model Land Leasing Act that will enable legalisation of leasing. So far, only Uttarakhand has [relaxed leasing norms](https://www.outlookindia.com/newsscroll/agriculture-land-will-be-give-on-lease-in-uttarakhand/1715277). Maharashtra, like Karnataka, has made legislative amendments to lift the restrictions on buying and selling of land. In 2015, Arvind Panagariya, in ‘Land Leasing: A Big Win-Win Reform for the States’, had urged states to consider such “simple but powerful changes to enhance productivity and welfare all around.” In 2020, once again, we remind states to follow Karnataka’s lead and release the agricultural land from its clutches undeterred by the opposition.

Read more: [Unboxing the e-Vidya Scheme for Learning](https://spontaneousorder.in/unboxing-the-e-vidya-scheme-for-learning/)

* * *

**About Bhuvana Anand**

Bhuvana Anand is Director, Research at Centre for Civil Society, one of India’s leading think tanks. Bhuvana’s subjects of interest are better regulation and governance, public finance management, and political economy. In India, she has worked extensively on reforms of welfare programmes, including reforms of the Public Distribution System and implementation of various Direct Benefits Transfers. At the Centre, she works on unpacking how government actually functions using administrative data, legislative analysis, field research, and machine learning. In addition, her team develops blueprints for programme design and policy implementation. Bhuvana has worked with various donors and civil society organisations in Sudan, Afghanistan, Sri Lanka, India and the United States, in policy advocacy, managing multi-pronged programs and research. She previously worked with the United Nations, the British Government's Department for International Development, and most recently at MIT’s Poverty Action Lab.

## SO Musings: War Between Opposing Ideologies

Original: https://www.spontaneousorder.in/p/so-musings-war-between-opposing-ideologies

Author: Spontaneous Order

Published: 2020-07-17T14:40:17.000Z

Topics: sino-indian-war, non-alignment, anti-communism, indian-liberals

> In wake of the 1962 Sino-Indian war, the lack of proactive support from the Afro-Asian block put a question mark on Nehru’s pet project of Non-Alignment for its failure to serve the national interest. The few voices of explicit support, however, include

**Summary:**

In the aftermath of the 1962 Sino-Indian war, Tunku Abdul Rahman, Malaysia's founding father and Prime Minister, offered explicit support to India, framing the conflict as a battle between communism and democracy, in contrast to the failure of Nehru's non-alignment policy which left India isolated despite its advocacy for China in the UN and tolerance of Tibet's occupation. Rahman, drawing from Malaya's 12-year communist emergency, recounted his personal meeting with communist leader Chin Peng, whom he spared and negotiated with before independence, only to learn that communism tolerates no rival ideologies like democracy, which guarantees complete freedom. He predicted either communism's triumph or democracy's, confident in the Malayan people's support for the latter. Rahman linked Malaysia's democratic survival to India's, warning that Chinese aggression aimed to humiliate India as a lesson to other Asian nations against resisting communist expansion. He initiated a wartime donation fund to aid India's effort. This radio speech, delivered on November 10, 1962, over Radio Malaya and republished in Freedom First magazine, underscores a classical-liberal recognition of ideological threats from communism, highlighting the perils of naive non-alignment and the need for resolute defense of democratic freedoms.

**Key points:**

- Tunku Abdul Rahman framed the 1962 Sino-Indian war as communist China's aggression to humiliate democracy in India and deter other Asian nations.
- Rahman's experience with Malayan communists, including negotiations with Chin Peng, convinced him that communism brooks no ideological rivals like democracy.
- He explicitly tied the survival of Malaysia's democracy to India's and established a donation fund to support India's war effort.
- Nehru's non-alignment failed India, as Afro-Asian support was lacking despite India's prior championing of China.

**By Spontaneous Order**

* * *

*In wake of the 1962 Sino-Indian war, the lack of proactive support from the Afro-Asian block put a question mark on Nehru’s pet project of Non-Alignment for its failure to serve the national interest. The few voices of explicit support, however, included that of the Malaysian Prime Minister, Tunku Abdul Rahman. The founding father of Malaysia, Mr Rahman saw the border war as a struggle between communism and democracy. According to him, Chinese aggression towards a large democracy like India was an exercise in humiliating India. The humiliation was meant to serve as a lesson for other Asian countries. Recognising the threat of communist advancement in Asia, Mr Rahman explicitly linked the fate of Malaysia’s democracy with that of India. He also took the initiative to set up a wartime donation fund to aid India in the war effort.*

*Produced below is the November 10, 1962, radio speech that Mr Rahman delivered over Radio Malaya and was republished in the Freedom First magazine.*

When I was in India, the border trouble blew up and it caught the Indian Government and the Indian people by surprise. They never thought that Communist China, whose cause they have been championing in the United Nations from time to time, and whose occupation of Tibet they have tolerated without a murmur of disapproval, should have turned against them without a word of warning and without rhyme or reason. To me, it came as no surprise. I told my Indian friends when I was there that Malaya had 12 years of emergency because of the acts of terrorism by the communists. After the first election, even before we were independent, I met the communist leader, Chin Peng, and pleaded with him to give up the struggle as we were approaching independence. He agreed to stop all hostilities as soon as Malaya gained independence from the British and as soon as my appointment as Chief Minister turned to Prime Minister. He tried to convince me that he was fighting not against the Malayan people but against the British to end colonialism and bring freedom to the Malayan people. I myself metaphorically speaking, saw him safely into the jungle, and gave a tacit order that in no circumstances should Chin Peng be hurt and if he were captured his life would be spared as I admired his honesty and sincerity. It was through him I learnt that communism will tolerate no other ideology or “ism”. I told him before we parted that his ideology and mine did not agree as I believe in a democracy which means complete freedom. Between us, there could be no pact, either he triumphed, and I was vanquished or more likely than not, he would be vanquished, and I would triumph as I was sure the Malayan people were with me.

*The original text can be accessed [here](http://www.freedomfirst.in/uploads/issues/pdf/127.pdf).*    

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [Road For LGBTQ+ Community In India Is Long And Uphill](https://spontaneousorder.in/road-for-lgbtq-community-in-india-is-long-and-uphill/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Road For LGBTQ+ Community In India Is Long And Uphill

Original: https://www.spontaneousorder.in/p/road-for-lgbtq-community-in-india-is-long-and-uphill

Author: Spontaneous Order

Published: 2020-07-16T15:10:02.000Z

Topics: lgbtq-rights, transgender-policy, public-choice-theory, self-determination

> The section of the population colloquially referred to as the LGBTQ+ community, an umbrella term used to refer to those including, but not limited to, lesbians, gay, bisexual, transgender and queer individuals, has historically been ostracised. It has ...

**Summary:**

The LGBTQ+ community in India, particularly transgender individuals numbering around 10 million with only 5% in gainful employment and 56% literacy per the 2011 census, faces ongoing marginalization despite decriminalization in 2018. Applying Public Choice Theory, the author argues that self-interest in policymaking disadvantages underrepresented minorities, leading to inadequate policies. While the Supreme Court's NALSA judgment affirmed self-identified gender under Article 19(a) and third-gender recognition, the Transgender Persons (Protection of Rights) Act, 2019 dilutes these by vesting gender certification in District Magistrates, enabling rent-seeking and abuse, while imposing a lighter rape penalty (up to two years versus seven years to life for cisgender women). The Surrogacy (Regulation) Bill, 2019 excludes LGBTQ+ from family-building, and adoption laws reinforce heterosexual norms. Lacking enforcement mechanisms and transgender representation (only 5 of 30 in a key committee), these laws fail constitutional values of justice, liberty, equality, and fraternity. COVID-19 exposed government apathy, as draft rules were notified amid lockdowns without community input. From a classical-liberal lens, the solution lies in self-determination, increased minority representation in policymaking, grassroots collaboration, and consistent, enforceable civil liberties laws to foster equal dignity and inventiveness.

**Key points:**

- Public Choice Theory explains how lack of LGBTQ+ representation leads to policies favoring majorities' self-interests over minorities' progress.
- Transgender Persons (Protection of Rights) Act, 2019 violates self-determination by requiring District Magistrate certification for gender identity, risking rent-seeking.
- Surrogacy Bill 2019 and adoption laws exclude LGBTQ+ couples, restricting family rights to heterosexual marriages.
- India needs enforceable anti-discrimination mechanisms, equal legal protections like rape penalties, and greater transgender inclusion in policy committees.
- Achieve equality through grassroots collaboration and consistent civil liberties laws upholding constitutional principles.

**By Anupriya Mohta**

* * *

The section of the population colloquially referred to as the LGBTQ+ community, an umbrella term used to refer to those including, but not limited to, lesbians, gay, bisexual, transgender and queer individuals, has historically been ostracised. 

It has shouldered the responsibility of crafting their own narratives to counter stereotypes that have been thrust upon them. 

The Public Choice Theory, although mostly used in an economic context, has as much relevance in the recognition and socio-economic progress of a minority community like the LGBTQ+ community to demonstrate that self-interest surmounts everything else. 

However, the key question to be asked here is this: should the minorities suffer for their lack of representation in the process of policymaking? While there are around 10 million transgender persons in India, only about 5% are in gainful employment, according to the CEO of Periferry, a social start-up working on jobs and training opportunities for transgender individuals.  

The first national census to record the population of the ‘third gender’ in 2011 revealed that only about 56% of the community were literate. 

Additionally, given the purchasing power of the LGBTQ+ community, there is a natural incentive for them to be included in the formal markets. However, given the abuse and bigotry that they are subjected to, there is the need for formal skill-building and developing incentives for businesses to promote LGBTQ+ inclusion, says Godrej India Culture Lab’s *A Manifesto for Trans Inclusion in The Indian Workplace.*  

In September 2018, when Justice Indu Malhotra, summarised her judicial opinion with the words “History owes an apology to this community,” the LGBTQ+ community breathed a sigh of collective relief – change had finally arrived. 

With the first phase of the battle won, i.e., successful decriminalisation, the second phase on the road to equality especially for those who are the most marginalised, would have meant positive entitlement such as the right to marry, adopt, have a family, among others, according to Jayna Kothari of the Centre for Law and Policy Research. 

The appropriate change in criminal law and reservation in employment and education are also areas that need urgent attention. 

However, the formalisation of some recent regulations seems to have further spurred the community and must be examined in the spirit of Indian Constitution – do they uphold the values of justice, liberty, equality and fraternity? 

The Surrogacy (Regulation) bill, 2019, passed in the Lok Sabha restricts the idea of family to that of heterosexual marriage. The bill excludes LGBTQ+ couples and single people from this method of conception. India’s adoption laws are also contingent on the idea of marriage, in the process, marginalising most of the LGBTQ+ community.  

The Transgender Persons (Protection of Rights) Act, 2019 (Trans Protection Act) ends up diluting the rights of the community and creates further inequity. It ignores the landmark decision of the Supreme Court in the National Legal Services Authority of India (NALSA) vs Union of India case, which recognised that one’s right to expression of his self-identified gender falls within the ambit of Article 19(a) of the Constitution of India.  

NALSA also provided legal recognition to the third gender, as opposed to the binary of male and female. 

The Trans Protection Act vests the District Magistrate with the power to issue a certificate of gender, not only violating the principles of self-determination but also opening avenues of rent-seeking and abuse. 

The Act, problematically, enables the medical and pharmaceutical community, alongside the government machinery to determine what trans persons should do with their bodies, reducing their identity to that of just the trans body.

Another cause for alarm is that the penalty for rape of transgender persons only amounts to up to two years versus between seven years to life for the rape of a cisgender woman, violating the spirit of rule of law, writes Vikramaditya Sahay in a blog entitled *The sexual is political: Consent and the Transgender Persons (Protection of Rights) Act, 2019.*   

Other areas of concern include the lack of trans-representation (five of 30 members) in a committee being formed to further the transgender cause under this bill and the absolute lack of any significant positive rights. 

The Trans Protection Act does allude to increased LGBTQ+ rights in some places such as the prohibition of discrimination. It, however, does not provide a mechanism to realise any of these provisions, according to Vani Sharma, writing in *Inclusive Public Policy.*

The Rights of Transgender Persons Bill proposed by Tiruchi Siva in 2014, was widely recognised as a step in the right direction and was backed by the wider community, but sadly, it never saw the light of day.  Keeping in mind the relatively small number of voters in the community, do the parliamentarians really lean towards safeguarding the best interests of the community? Very often, not. 

The small size and closeted existence of the transgender community make it difficult to register policy concerns in the public’s consciousness, notes Jami Kathleen Taylor of North Carolina State University in an essay titled *“Transgender Identities and Public Policy in the United States- The Relevance for Public Administration*”.

If we are to employ an institutional lens to this issue, we see an institution at odds with itself, with the judiciary often leading the charge on trans inclusion as the executive branch offers platitudes. 

This is further evidenced in the actions of the government in the current COVID – 19 crises. Stripped of their traditional sources of income and left without means to get identity proofs such as ration cards, the transgender community moved the Telangana High Court to secure food and ration.

The Ministry of Social Justice and Empowerment on April 18, 2020, amidst the COVID-19 lockdown, notified the Draft Transgender Persons (Protection of Rights) Rules, 2020, inviting comments thereon. 

Such action on part of the government, ignoring the inability of the community in this situation to scrutinise the Draft Rules, is an abhorrent act of apathy.

Keeping in mind the principles of self-determination, the community’s voice must be heard via increased representation in policy-making forums and grassroots collaboration. Laws around civil liberties need to be consistent, clear and enforceable. Equal dignity leads to equal inventiveness and it is clear to the LGBTQ+ community in India that the road to equality is still long and uphill. 

Read more: [Indian Liberals saw through the Chinese game plan in 1950](https://spontaneousorder.in/indian-liberals-saw-through-the-chinese-game-plan-in-1950/)

* * *

**About Anupriya Mohta**

Anupriya Mohta is an MSc in marketing from the University of Manchester and has some experience volunteering and working in the social development sector. She has a new-found interest in public policy. A passionate advocate for LGBTQ+ rights, she doubles up as a freelance brand consultant for NGOs and socially motivated organisations

## Indian Liberals saw through the Chinese game plan in 1950

Original: https://www.spontaneousorder.in/p/indian-liberals-saw-through-the-chinese-game-plan-in-1950

Author: Spontaneous Order

Published: 2020-07-13T18:30:08.000Z

Topics: swatantra-party, india-china-relations, tibet, non-alignment-policy

> On January 1, 1950, two days after India became the second country in the world to accord recognition to Communist China, Peking (now Beijing) dropped a bombshell. It announced that the liberation of Tibet was one of the basic goals of the Peoples’ Libe

**Summary:**

Indian classical liberals, particularly figures like Minoo Masani, NG Ranga, and Mariadas Ruthnaswamy of the Swatantra Party, presciently recognized China's aggressive intentions toward Tibet and India as early as 1950, when Beijing announced the PLA's goal of 'liberating' Tibet just after India's recognition of Communist China on January 1. They rejected Nehru's naive 'Hindi-Chini bhai-bhai' policy and non-alignment, warning in Parliament and party conventions that China's 1951 17-Point Agreement targeted Indian influence as 'imperialist forces,' and that Tibet's occupation threatened India's security. Despite India supplying 3,000 tonnes of rice to PLA troops via transit facilities, liberals like Masani highlighted Mao's message to Indian communists about 'liberating' India, destroying illusions of Asian comradeship. Swatantra, formed in 1959, advocated closer Western ties, Tibetan independence, support for Taiwan and Israel, and a regional security alliance. Ruthnaswamy declared in 1962 that Tibet's independence was vital for India's defense, proven by the Sino-Indian war months later. Post-1962, Masani critiqued India's UN isolation after the 1965 Pakistan war, urging a liberal foreign policy. The author concludes that Swatantra liberals' warnings, vindicated by history, contrast with decades of flawed non-alignment, suggesting different outcomes today if persisted.

**Key points:**

- Indian liberals like Masani warned in the early 1950s that China's Tibet invasion signaled aggression against India, referencing Mao's call to 'liberate' India.
- Swatantra Party opposed non-alignment, demanding Tibet's independence for India's defense and closer ties with the US and West.
- India supplied 3,000 tonnes of rice to PLA troops in Tibet, exemplifying Nehru's naivete amid 'bhai-bhai' slogans.
- Post-1962 war, Swatantra urged vigilance against Chinese appeasement and proposed alliances, support for Tibet/Taiwan/Israel.
- Masani's 1965 speech highlighted India's UN isolation, advocating diplomats promote a sellable liberal foreign policy.

**By Ranjit Bhushan**

* * *

On January 1, 1950, two days after India became the second country in the world to accord recognition to Communist China, Peking (now Beijing) dropped a bombshell. It announced that the liberation of Tibet was one of the basic goals of the Peoples’ Liberation Army (PLA). 

The timing could not have been more fortuitous. The Chinese statement issued from Beijing in detail made no mention of any Indian presence or role in Lhasa. Blinded by dark ideological lenses, the vision fogged by China’s *“bhai-bhai”* chimera, India and Jawaharlal Nehru refused to see the true nature of China’s intentions in Tibet. It didn’t even grasp that China was hitting out at India when it gave a call in the 17-Point Agreement, signed in May 1951, to “drive out imperialist aggressive forces from Tibet”. Who were these imperialist forces? From the benefit of hindsight, it would be safe to assume that it was India that the Chinese were referring to. 

This, when the *Economist* in 1949 was advocating Indian lead support for Tibetan Independence, followed by recognition by U.S.A and U.K., but admitting that “if India preferred to abandon Tibet to its fate, the Western Powers were in no position to object to a Chinese reconquest of Tibet.”

Under the circumstances, give it to India’s unsung libertarians. No soon after Tibet was overrun by China, Minoo Masani, then still years away from forming the Swatantra Party, brought up in Parliament Mao Zedong’s message to CPI leader B.T. Ranadive of “good wishes for the liberation of India and their hope that India will go the China way.’’ Noted then Dutch Ambassador to India, W.F. Van Eekelen in his seminal account *Indian Foreign Policy and Border Dispute With China*: In Masani’s view, China had thereby destroyed  “any illusion about friendship, any cordiality and about comradeship in Asia” and cut Asia into two parts – Communist and non-Communist Asia. It was a warning from Masani long before the 1962 Sino-Indian war, that the invasion of Tibet was the first sign of the Chinese aggression. It went totally unheeded. 

Contrast it with Nehru’s shocking naivete. In his book, *‘Will Tibet Ever Find Her Soul Again?’* French writer Claude Arpi reveals that Nehru’s India supplied rice for the invading PLA troops in Tibet when they were busy rampaging and decimating the Tibetan way of life and culture in the early 1950s. 

According to Arpi, to overcome the food crisis in Tibet, Mao looked towards India. S.K. Krishnatry, the Indian Trade Agent in Gyantse, mentioned that the Chinese government had requested India “for an agreement allowing facilities for the transport of food and other supplies through India”. The Chinese government wanted transit facilities for 10,000 tonnes of food grains through India, as a special case. Delhi first agreed after careful consideration to allow the transit of about 3,000 tonnes of rice to Tibet. “While pointing out the transport problems involved in the proposal, the Government of India expressed their (sic) willingness to consider it together with all outstanding issues regarding their position in Tibet,” wrote Krishnatry. Sadly, but not surprisingly, the Tibetan part of the story was soon forgotten.

In his 1955 book, *‘In Two Chinas’*, New Delhi’s first and long-standing envoy to Peking, K.M. Pannikar noted: “I knew, like everybody else, that with Communist China cordial and intimate relations were out of the question, but I was fairly optimistic about working out an area of cooperation by eliminating causes of misunderstanding, rivalry etc.” 

Despite the Indian Prime Minister’s grandiloquence on recognising China, the *Shanghai Observer* offered its own interpretation of why India had followed the course it did: “it is a matter of Nehru weighing his desire for US assistance against his need to assume the hypocritical role of a progressive to deceive the Indian people.’’

Later, when Nehru was riding high on Non-Alignment, Chairman Mao was not too impressed. “Mao’s dictum that neutrality was camouflage and that a third road did not exist was conducive to criticism of India in terms of Marxist dialectics,” noted Van Eekelen.

Even after the conquer of Tibet in the mid-1950s, when the country was awash with slogans of Hindi-Chini *bhai bhai,* celebrating the traditional friendship of two ancient civilisations like never before, Indian libertarians had their eyes wide open to possibilities of every kind – including a potential military invasion by an ambitious Communist power.  

Once the formation of the Swatantra Party was announced in Madras on June 6, 1959, by C Rajagopalachari and Minoo Masani, some of India’s brightest and most progressive minds joined the new party with views that embraced free enterprise and stressed on closer ties with the West.  

Two early members of the Swatantra Party, Mariadas Ruthnaswamy and NG Ranga, recognised trouble when they saw it; they were not in the mould of other Indian opposition parties, who opposed the Congress, but mouthed Socialist platitudes while doing so.  

NG Ranga criticised the repeated professions of friendship, not only to the Chinese people and government but also to Chinese claim of sovereignty over Tibet. 

To the Swatantra Party, the Non-Aligned Policy was moribund, and the need of the hour was closer ties with the US and West, which was anathema to the official Indian position.      

Ruthnaswamy, at the First National Convention of the Swatantra party in 1959, declared that the policy of Non-Alignment had become odious. Later, at a memorable speech on foreign affairs dated June 23, 1962, which turned out to be prescient, Ruthnaswamy said: “Now, the independence of Tibet is absolutely necessary for the defence of India. We should have protested against the occupation of Tibet by China…. we allowed Tibet to be gobbled up by China.” Barely a few months down the line came the Chinese invasion of India, with disastrous consequences. 

In the post-1962 period, when India’s territorial integrity had been violated and her soil occupied by a Communist power, Swatantra Party was convinced that the concept of Non-Alignment was meaningless. 

The Chinese border war had justified its argument. The Swatantra Party, at its Second National Convention, called upon the Indian people to maintain vigilance against the possibility of further appeasement and capitulation to the claims of Communist China.

On November 15, 1965, in the aftermath of the Pakistan war, Minoo Masani gave a speech in the Parliament outlining his vision of foreign policy for India. After diagnosing the failure of the government, Masani proposed a typically liberal and workable agenda. The measures suggested included formation of a regional security alliance, support to Tibet and Taiwan, diplomatic relations with Israel and acceptance of help from both the US and USSR.

Nonetheless, Masani, in the highest traditions of liberals, spoke some home truths – like India’s isolation at the UN, despite the successes against Pakistan in the 1965 war. “I am quoting from the *Hindustan Times* of 23rd October: According to the PTI, the spokesmen of 63 nations were neutral and did not go beyond appealing for peace, 19 were hostile to India and, of these 19, 11 were members of the Arab League. 3 made passing references but did not say anything. 25 ignored the issue. Out of 110, not one spoke up for us. This is something that cannot be side-tracked by recording satisfaction at our success in the Security Council,” he stated, rather clinically. The need of the hour, therefore, in Masani’s views was to give Indian diplomats “a product they could successfully sell in the councils of the world.”

It took roughly four decades for Indian foreign policy to make amends. Who knows, if India were to be as Non-Aligned today when the Chinese PLA is gnawing at its borders, as it was in 1962, the outcome could well have been entirely different.   

Read more: [SO Musings: Swatantra Liberals and Indian Foreign Policy](https://spontaneousorder.in/so-musings-swatantra-liberals-and-indian-foreign-policy/)

* * *

**About Ranjit Bhushan**

Ranjit Bhushan is an independent journalist and former Nehru Fellow at Jamia Millia University. In a career spanning more than three decades, he has worked with Outlook, The Times of India, The Indian Express, the Press Trust of India, Associated Press, Financial Chronicle, and DNA. He is also the author of a book \`Maoism in India and Nepal’, published by Routledge.

## SO Musings: Swatantra Liberals and Indian Foreign Policy

Original: https://www.spontaneousorder.in/p/so-musings-swatantra-liberals-and-indian-foreign-policy

Author: Spontaneous Order

Published: 2020-07-10T14:56:29.000Z

Topics: indian-foreign-policy, non-alignment, strategic-autonomy, regional-security

> In the everyday politics of the chaotic democracy that India is, foreign policy issues figure down the priority list except when it comes to matters of Pakistan-sponsored terrorism and the Kashmir dispute. The recent border impasse with China, however,...

**Summary:**

In the context of India's recent border tensions with China prompting debates on 'strategic autonomy'—a repackaged non-alignment—the post excerpts a 1965 parliamentary speech by Swatantra Party leader Minoo Masani advocating a radical revision of India's foreign policy. Masani diagnoses India's isolation during conflicts with Pakistan and China, exemplified by the 1965 UN General Assembly where out of 110 nations, none supported India, 19 were hostile (11 from Arab League), 63 neutral, and 25 ignored the issue. He attributes this not to diplomatic failures but to the unsellable 'product' of non-aligned dogma, urging realistic diplomacy in a democracy's crisis. Masani's Swatantra agenda includes building a regional collective security system from India to Japan and Australasia; supporting South Vietnam and Malaysia against aggression; liberating Tibet and recognizing the Dalai Lama; establishing ties with Republic of China (Taiwan) and Israel; plus accepting aid from both US and USSR while normalizing with Pakistan to focus on the main threat, China. This classical-liberal vision prioritizes alliances with democratic nations over isolationist autonomy, relevant to today's calls for US and Indo-Pacific partnerships against China.

**Key points:**

- India's non-alignment policy led to complete isolation in the 1965 UN debate on the Pakistan conflict, with no supporters among 110 nations.
- Masani demands discarding non-alignment dogma for realistic diplomacy, including regional security alliances from India to Japan and Australasia.
- Swatantra proposals include supporting Tibet's liberation, recognizing Dalai Lama, diplomatic ties with Taiwan and Israel, and defending Vietnam and Malaysia.
- India should accept aid from both US and USSR while normalizing relations with Pakistan to counter China.

**By Spontaneous Order**

* * *

*In the everyday politics of the chaotic democracy that India is, foreign policy issues figure down the priority list except when it comes to matters of Pakistan-sponsored terrorism and the Kashmir dispute.* 

*The recent border impasse with China, however, has brought foreign policy and strategic analysis to the forefront. It is likely that the current crisis would lead to a change in the direction of Indian foreign policy. The shibboleth of Indian foreign policymakers has been the mantra of ‘strategic autonomy’, which might as well be a repackaged version of Non-Alignment.* 

*As the balance of power is clearly skewed in favour of China, some analysts have argued for a closer alignment with the US to balance against China. The proposal also includes sustained cooperation with middle powers in the Indo-Pacific region like Japan, Australia, Indonesia, among others, which goes against the grain of strategic autonomy.*

*As the debate over contours of foreign policy continues, produced below is an excerpt advocating revision in the then well-known Indian external affairs strategy of Non-Alignment. On November 15, 1965, Minoo Masani gave a speech in the Parliament outlining his vision of foreign policy for India. After diagnosing the failure of the government on matters connected to India’s external relations, Masani came up with his own agenda. The measures proposed included the formation of a regional security alliance, support to Tibet and Taiwan, diplomatic relations with Israel, normal relations with Pakistan in order to focus on the biggest threat and acceptance of help from both the US and USSR.*

Mr. Speaker, Sir, I rise to support our (the Swatantra Party’s) alternative motion which says: “The House … is of opinion that, in the face of the combined hostility of Communist China and Pakistan, the country needs a radical revision in its foreign policy, the discarding of dogma and the adoption of realistic diplomacy involving, inter alia,

(a) measures for building a system of regional collective security for all countries between India, Japan and Australasia; 

(b) forthright support for the defence of South Vietnam and Malaysia against aggression;

(c) steps towards the liberation of Tibet and the recognition of the Dalai Lama as the head of a Free Tibetan Government; and 

(d) the establishment of diplomatic relations with the Republic of China and Israel.” 

Sir, on an occasion like this, we in this House speak from a sense of heightened responsibility, both because what we say may have implications for our national interests which we must bear in mind, and at the same time, because we are anxious that the advantage that this country possesses over its opponents in Pakistan and China, of being a Democracy in a crisis, where free discussion, free criticism and free opposition prevail, that advantage this country should not lightly throw away. As the Foreign Minister has said, this country has gone through a tremendous experience. We cannot do otherwise than to start with paying our tribute to the gallantry of our Armed Forces; we have had the unfortunate memories of 1962 thus wiped out, and the prestige and pride of our armed forces, which they had over centuries, have been re-established. Let us hope that there will be no tinkering or tampering with the morale of our forces, which has thus been re-established. The Foreign Minister was also right in paying a tribute to our people for rallying to the defence of the country, for the unity of purpose that they showed and for the communal harmony that was maintained throughout.

**Unwarranted Complacency** 

But I wish I could share the smug complacency with which he referred to the successes of our diplomacy and our foreign policy. These recent events have also some very hard lessons to teach us. The hardest of them was that, in the face of that crisis, India was isolated. I do not say that we did not have friends. But in our own corner, in our fight with Pakistan, except for Malaysia and Singapore, there was nobody. Let us not try to forget this fact of isolation; it is pretty bad. In the General Assembly of the UN, at the end of the debate, the Press Trust of India made an analysis of the trends in regard to our dispute with Pakistan. I am quoting from the Hindustan Times of 23rd October: According to the PTI, the spokesmen of 63 nations were neutral and did not go beyond appealing for peace, 19 were hostile to India and, of these 19, 11 were members of the Arab League. 3 made passing references but did not say anything. 25 ignored the issue. Out of 110, not one spoke up for us. This is something that cannot be side-tracked by recording satisfaction at our success in the Security Council. This has left our people bewildered; it has left some of our people rather angry. It is no good flying into a rage when nobody else can see our point of view. It reminds me of the story of the fond mother who went to see a military parade. At the end of the parade, her comment was, “Everybody was out of step except my Johnny”. That was her son! We cannot afford to be Johnny. We are living in a world community, where we must be in step with decent, democratic nations, whose friendship we regard. We cannot resign from the Human Race and turn our back on humanity. In a way, let us console ourselves that, since imitation is the sincerest form of flattery, other nations have copied us and remained non-aligned in our dispute. We have so many times taken the stand that we will not judge what is right or wrong over the last 15 years. We should take sportingly the fact that other countries are now giving back to us a little of our own medicine!

The important thing is: why did this happen and how do we prevent a recurrence of this isolation? That, surely, should be the purpose of this debate. Let us look at the facts in the face. Was it only bad public relations, as some of our colleagues allege? Was it the fault of our diplomats? Let me say, in all fairness to our diplomatic service and publicity, that it was not a failure of public relations or diplomacy. I have been a practitioner of public relations. You cannot sell a product if the product cannot be sold. The first thing in public relations is to have a good product which can be sold. Then only can you advertise it and sell it. It is no good blaming our diplomats and ambassadors. The fault lay deeper. It lay in our foreign policy. We did not give them a product they could successfully sell in the councils of the world.  
  
*The full text of the article can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=590973500.pdf)*.

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [Venkataraman Sundaram-Scholar, Economist and Civil Servant (1942-2014)](https://spontaneousorder.in/venkataraman-sundaram-scholar-economist-and-civil-servant-1942-2014/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Venkataraman Sundaram-Scholar, Economist and Civil Servant (1942-2014)

Original: https://www.spontaneousorder.in/p/venkataraman-sundaram-scholar-economist-and-civil-servant-1942-2014

Author: Spontaneous Order

Published: 2020-07-09T18:20:10.000Z

Topics: indian-liberals, free-markets, civil-service, economic-reform

> Seven decades after Independence, a nation, which is more a continent than a country, continues to be in evolution, struggling to ensure basics to its billion-plus people. It should not have taken this long in a functional democracy, only if its legisla..

**Summary:**

Venkataraman Sundaram (1942-2014), a scholar, economist, and Tamil Nadu IAS officer for 29 years, exemplified classical-liberal principles by advocating unfettered civil liberty, individual freedom, and political democracy as prerequisites for India's economic prosperity. Retiring voluntarily at 51 in 1994 'in disgust' over corruption and unlearned politicians, he criticized the pre-1991 'Licence-Permit-Quota Raj' and Nehruvian centralized planning, echoing C. Rajagopalachari and Milton Friedman, whose work he praised for proving government as the source of economic instability. As Collector and in roles like Chairman of Tuticorin Port Trust—elevating it regionally—and Managing Director developing Sunola oil and Tirupur's textile export complex, Sundaram advanced market-oriented projects and power sector privatization. A prolific author of books like *Growth with Equity* (1987) and *Rama Setu* (2007), post-retirement journalist, and founder of the Sir William Jones Institute and Sri Padma Sundaram Foundation for poor children's tech-learning, he warned against socialism's fetters on ordinary citizens, polluted history education, and resource plundering, urging judgment of public servants by vision, courage, integrity. His legacy underscores liberalism's role in countering India's institutional weaknesses.

**Key points:**

- Sundaram quit the IAS in 1994 at age 51 due to systemic corruption and politicians' refusal to learn from history.
- He championed free markets and civil liberties, criticizing Nehruvian planning and socialism as suppressors of individual destiny and prosperity.
- As civil servant, he developed Tuticorin Port, Sunola oil brand, and Tirupur textile complex, accelerating power privatization.
- Influenced by Friedman and Rajaji, he authored books on equity, administration, and history, founding institutions for Indology and poor education.

**By Chandrasekaran Balakrishnan**

* * *

Seven decades after Independence, a nation, which is more a continent than a country, continues to be in evolution, struggling to ensure basics to its billion-plus people.

It should not have taken this long in a functional democracy, only if its legislature and its executive were sensible enough to implement the constitutional provisions of equal freedom and opportunities to people.  

However, India’s face has changed significantly after embarking on the road to economic liberalisation three decades ago. It becomes important, therefore, to inquire why the Indian economy was stilted before 1991, even though the answers are now well known: the institutional framework premised to deliver the fruits of democracy were not only utterly weak, but often hand in gloves with reactionaries, masquerading as progressives.  

Yet, the landscape was not bereft of outstanding scholars, thinkers, economists and civil servants – like Venkataraman Sundaram – who warned against the pitfalls of dictatorship and narrow economic determinism.

In his career as a civil servant, Sundaram strove for improvements in government delivery systems. He wore many hats with equal proficiency – scholar, economist, writer, author and a fearless journalist. A multi-dimensional personality, his contribution to public policy, historical analysis, poetry and a collector of rare books, sets him apart from the crowd.

He strongly believed that without unfettered “civil liberty, individual freedom and political democracy” India cannot achieve economic prosperity. 

Sundaram served as civil servant in Tamil Nadu for 29 years. He was Principal Secretary to the Government of Tamil Nadu before he opted for voluntary retirement from the Indian Administrative Service (IAS) in 1994, aged 51.

He quit in disgust and said it in as many words.  “I quit in disgust… I got fed up with the corrupt system and politicians around me who fail to learn anything either from history or the present.” Both in the government and outside it, Sundaram was known for his independence and courage of conviction. 

In one of his more famous orations delivered in 1982 as Director of the Anna Institute of Management, Chennai, Sundaram noted that “When the public sits in judgment on any public servant, they are bound to ask four questions. Was he a man of judgment? Was he a man of vision? Was he a man of courage? Was he a man of integrity?” All questions remain highly relevant even today.  

Sundaram was a crusader against the denuding of Tamil Nadu’s natural resources and beach minerals. He believed that being neutral in public was tantamount to committing suicide. In the process, he deliberately veered towards Right Wing analysis, of course, well-backed and supported by data. 

Sundaram was born on August 28, 1942, at Trichy in Tamil Nadu, and did his schooling in Shimla and New Delhi. He completed his school education at the Madrasi Higher Secondary School, New Delhi in 1958 and studied Tamil from eminent writer and teacher Dr ‘Indira’ Parthasarathy. He graduated in Economics from St. Stephen’s College, Delhi, in 1961 and finished post-graduation in Economics with specialisation in Industrial Economics from Delhi University in 1963.

Between 1963-1965, he was lecturer in Economics at Delhi University’s Dyal Singh College. In 1965, aged 23, he cleared the Indian Administrative Service (IAS), moving to Madras (now Chennai) after being allotted the Tamil Nadu cadre. He served with distinction in several important positions in the state government from 1966 to 1994. 

Posted as Collector in the southern districts of Tamil Nadu, Sundaram was instrumental in developing the Tuticorin Port Trust as Chairman, putting it on the Maritime Map of South East Asia. He played a major role in bringing the branded sunflower oil *Sunola* as Managing Director of the Tamil Nadu Agro-Industries Corporation Ltd. In record time, he was instrumental in completing the development of Tirupur Industrial Complex for export of textiles and garments, in 1991-92.  

Sundaram excelled in many roles: Commissioner and Secretary to Government in the Department of Institutional Finance, Rural Development, Food and Consumer Protection, Public Works Department (PWD) and Personnel and Administrative Reforms. As Secretary PWD, he played a big part in the acceleration of privatisation of the power sector. 

Post-retirement, he held many responsible positions, both in the public and private sectors. He was Administrator of the World Bank-assisted National Highways projects. For two years, he was Secretary-General of the Hindustan Chamber of Commerce, Chennai. 

A prolific author, Sundaram wrote several books including *Growth with Equity (1987), Essays and Reviews (1993), District Administration (1993), Essays in Welfare Administration (1993), Rama Setu—Historical Facts and Political Fiction (2007), Tamil Scholars and Savants (2011), and Elegies on Padma (2012),* to mention only a few. 

After quitting the civil service, he was Associate Editor of *The News Today* (a daily in English) and *Malai Sudar* (a Tamil daily) from 2005-2010 and wrote innumerable scholarly articles in English in their columns. 

To judge him as a Hindutva apologist by reading a few of his articles will be misleading; only a thorough reading of his scholarly treatises would help appreciate his position on different subjects. 

Sundaram vehemently criticised India’s first Prime Minister for implementing policies through centralised planning. He stated: “…centralised planning process introduced by Jawaharlal Nehru in 1950, with experts like Mahalanobis determining the targets and allocation of resources cannot be an effective model today.”

He was scathing in his observations. “…The invasion of Nehruvian secularism which started on August 15, 1947, and is still continuing unabated and unchallenged, clothed in the aura of official authority, now institutionalised … It is because of this politically motivated and criminally perpetrated hiatus between a false nation and a truly blood-sucking State that there is a continuous proliferation of selfishness, corruption, and moral degradation in all walks of our national life today. The national society has been alienated from the State and the national will to face problems has all but vanished.”  

However, Sundaram agreed with Nehru’s frustrations following reservations to weaker sections of the society without ensuring equal opportunities to improve their living standards through high quality of education and healthcare services.  

In 2006, he wrote an obituary on the world’s leading free market economist, Milton Friedman, covering his life and major works. “Friedman effectively proved that government is the biggest source of instability in the economy. All this he proved in his most important single work on economics called *“A Monetary History of the United States 1867 – 1960”*. Adding, he went on: “Many champions of liberty have generally done well to achieve significant impact on a single area of public policy. But Friedman has had a significant impact on many public policies”

Like Friedman, Sundaram noted that “Wherever the private market was largely suppressed and the State undertook to control in detail the economic activity of its citizens, there the ordinary man was in political fetters, had a low standard of living, and was largely bereft of any conception of controlling his own destiny.” 

An indefatigable proponent of nationalism with free-market economics and against the ideas of communism and socialism, he noted, pithily: “Rajaji spoke against the ‘Licence-Permit-Control-Quota Raj’ in the 1950s and 1960s. If he had been in our midst today, he would have spoken against the ‘Licence-Permit-Control-Quota Raj’ created by our politicians in the field of professional, higher and university education.” 

This former civil servant was greatly influenced by the writings of the political scientists, Hans J Morgenthau (1904-1980), Winston Churchill, as well as writings of leading libertarian scholars and statesmen like V S Srinivasa Sastri and C Rajagoplachari. “History is like a flickering lamp while we stumble along the trail of the past trying to reconstruct its scenes. The past fills us with wonder. I get excited when I read about the renaissance period,” he noted. 

Sundaram was convinced that Indian history taught in schools are highly polluted, clouded by authors’ biased views. 

Sundaram was a distinguished institution-builder. He was Founder Chairman of Sir William Jones Institute of Indological Studies as well as the Sri Padma Sundaram Foundation, which works to improve technology-enabled learning for the poor. 

Sundaram passed away on November 7, 2014, aged 72 in Chennai. Till the end, he never compromised on his principles.

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [How inclusive is the Smart Cities Mission](https://spontaneousorder.in/how-inclusive-is-the-smart-cities-mission/)

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## How inclusive is the Smart Cities Mission

Original: https://www.spontaneousorder.in/p/how-inclusive-is-the-smart-cities-mission

Author: Spontaneous Order

Published: 2020-07-08T15:56:36.000Z

Topics: smart-cities-mission, urban-inclusion, decentralized-governance, rural-development

> There can be no argument that India needs cities that are sustainable, eco-friendly, self-sufficient and able to provide a better standard of living to its people. The parameters, though, need to be clearly defined to choose the initiatives, based on ju..

**Summary:**

The Smart Cities Mission (SCM) in India, lacking a universal definition of 'smartness,' embodies top-down governance ambiguity that undermines inclusive, sustainable urban development from a classical-liberal lens prioritizing justice, equality, and decentralized participation. Kushal Kumar Maurya argues that SCM's focus on infrastructure, beautification, and area-based development (ABD)—allocating 80% of funds to just 7% of city areas, often with 40% private investor hold and minimal municipal input—exacerbates inequalities by sidelining slum-dwellers (68 million in 2011, 13.7 million households, one in six urban residents) and rural-urban migrants (83% of long-distance migrants miss voting). Despite urban areas (31% population) contributing 63% GDP, SCM overlooks migration-driven growth and migrant crises like COVID-19 exoduses, with less than 2% funds utilized. The mission promises participatory planning and basic services but leaves inclusion undefined, re-centralizing power and fostering path dependencies. Maurya advocates holistic 'smartness' via smart villages, rural opportunities, and pragmatic shared technologies to avert over-dense cities, reduce inequalities, and align with India's realities over Western tech-centric models.

**Key points:**

- SCM's ambiguous definition and top-down approach exclude slum-dwellers and migrants, central beneficiaries, from participatory planning.
- 80% of SCM funds target 7% of city areas via ABD, promoting inequality and private investor dominance over municipal governance.
- India's urban growth relies on rural migration, yet SCM ignores rural investments needed for sustainable cities and to prevent crises like COVID-19 exoduses.
- Shift investments to smart villages and decentralized opportunities outside cities to foster inclusive growth and reduce urban over-density.

**By Kushal Kumar Maurya**

* * *

There can be no argument that India needs cities that are sustainable, eco-friendly, self-sufficient and able to provide a better standard of living to its people. The parameters, though, need to be clearly defined to choose the initiatives, based on justice and equality.

Clarity on the scope, level and degree of participation and a clearly defining inclusion would help the initiatives not to deviate from the Smart Cities Mission (SCM). 

The assumption that cities are the ‘engines of growth’ without counting the slum-dwellers and low-income population would not reflect the real image of contributors to growth and acknowledge the community.

The need of the hour is to create opportunities outside cities. A smart city with over-dense population would not sustain. Therefore, cities need smart villages to sustain themselves. Instead of copying the western perception of ‘smartness’, the mission must empathise with the situation in India and approve holistic smartness of both cities and villages.

Was it possible, for example, to avert migrant and hunger crisis in the cities if staggering investments would be made in the right direction to reduce inequalities? The proposals accepted by the SCM are largely focused on infrastructure and beautification with an area-based development approach. Yet, less than 2% of the fund has been utilised by the cities. The Mission is an ambitious dream, but ambiguous when juxtaposed against the prevailing realities.

The purpose and outcome of the Mission is explained in the SCM guidelines. It states: “there is no universally accepted definition of a Smart City. It means different things to different people. The conceptualisation of Smart City, therefore, varies…depending on the level of development, willingness to change and reform and aspirations of the city residents…there is no one way to defining a Smart City.”

A government-mandated mission is surrounded with wilful ambiguity around its definition, leaving no outcome-oriented planning and investment. It depicts a typical phenomenon of the top-down approach in governance. Though the Mission mandates participatory planning, it does not state its level, quantity, quality and approach.

While advocating for decentralised governance as its mandate, the Mission might end up re-centralising the process, aggravate inequality and increase path dependencies, which will negatively impact the lives of most people, yet keeping them in euphoric bliss of ‘the new Smart City’.

The Smart Cities Mission guideline states, “Nearly 31% of India’s current population lives in urban areas and contributes 63% of India’s GDP”. But the fact that a significant source of this growth comes from rural-to-urban migration has been overlooked. According to the Migration Policy Institute, for the first time, the urban population has grown faster than the rural population in India since the last Census.

In 2011, 68 million Indians lived in slums, comprising one-quarter of the population of India’s 19 cities with more than one million residents, say Rameez Abbas and Divya Varma of the Migration Policy Institute. 

The current COVID-19 crisis scenario demands a radical paradigm shift. During the period when a high number of the labour force is on the exodus from cities, it is time to rethink the sustainability of investing humongous funds on making cities look smart and attract dense population. The right move could be to invest in creating opportunities far from the cities.

Who is the Smart City for? In India, one in every six-city a resident lives in a slum. The *State of Slums in India,* a central government report, states that urban poor, including slum-dwellers, have a key role in the development of cities, yet they are bypassed in this process of growth.

The SCM does not define a universally accepted definition of ‘smartness’ of the city, yet the ambitions declare their perceived image as influenced by expensive technology and global ICT-based ideas of Smart Cities. 

Having said that, the 2011 Census of India’s *\`Housing Stock, Amenities and Assets in Slum’* found that 70% of the slum population has a television and smartphone users, almost equalling urban figures. Yet 64% of households were not yet connected to sewerage systems.

It put slum households in the country at 13.7 million. The Smart Cities Mission aims to ensure access to basic services for the people, including houses for the urban poor. But Housing and Land Rights Network, a New Delhi-based organisation, which works on research, education and advocacy related to housing and land rights, found questionable approaches to migrant labour and the homeless.

About 22% of seasonal migrant workers in India did not possess voter IDs or have their names on the voters’ list. A staggering 83% of long-distance migrants reported missing voting in elections at least once because they were away from home, seeking livelihood options, says a study entitled *Political Inclusion of Seasonal Migrant Workers in India,* published by Udaipur’s Aajeevika Bureau. 

The SCM strongly banks on the ambition to create inclusive cities. One approach for an inclusive city is participatory planning where citizens are involved in planning ideas. The idea of inclusion and participation in the guidelines is, however, left unexplained. 

A working paper of the Centre for Policy Research, states that the Mission is largely based on the assumption that ‘cities are the engines of growth’, which will invariably lead to the development for all. The Mission promises that it will reduce inequality in cities by providing economic opportunities to all citizens and uses participatory approaches to decision-making and hence deepens democratic structures, which will help improve the economic health of the city. But the idea of inclusion and participation in the guidelines is left unexplained. This outrightly excludes a major population group, who are supposed to be the central beneficiary of the Mission.    

Instead of being pragmatic and promoting shared technologies among cities, the Mission supports only the performing cities with more funds without analysing the genealogy and causes of failures of the programmes in low-performing cities. 

This increases inequalities and promotes unfair competition leaving the maladies of the sick governance unheard, unhealed, defeating the basic principle of an improved standard of living ‘for all’.

The Mission outlines three basic geographic modalities of development – area-based development (ABD), pan-city and Greenfields developments. It, however, largely focuses on ABD. With this, it ends up incentivising cities to inject bulk of their investments in a small area of the city. On an average, the area-based development covers nearly 7% of the area of the 99 cities while 80% of the funds are allocated for ABD projects of the budget, leaving only 20% of the budget for 90% of the city area, i.e. for pan-city and Greenfield development. Concentrating 80% of funds on a small area, which has 40% of holding by private investors and no say of local municipal institutions, makes the inequality more prominent. 

The project defines ecology restoration, land and water bodies as some of the key goals in the Smart Cities Mission. Beautification is often misunderstood by most cities as part of ecological restoration, which has led a few cities to budget for slum demolition under this project.

Read more: [Higher fuel taxes, fewer subsidies are good policy](https://spontaneousorder.in/higher-fuel-taxes-fewer-subsidies-are-good-policy/)

* * *

**About Kushal Kumar Maurya**

Kushal is a development professional, social entrepreneur and researcher with an MBA in rural development from Xavier Institute of Social Service, Ranchi, Jharkhand. Currently working as a research consultant in the social development area, researcher and editor at Think it Again and pro-bono the founding director at the Malviya Child Welfare Foundation.

## Higher fuel taxes, fewer subsidies are good policy

Original: https://www.spontaneousorder.in/p/higher-fuel-taxes-fewer-subsidies-are-good-policy

Author: Spontaneous Order

Published: 2020-07-06T13:29:09.000Z

Topics: fuel-subsidies, fuel-taxes, pollution-control, fiscal-reform

> “Never waste a crisis” is an old adage. The Covid crisis is a good time to enact painful reforms. Some reforms like the suspension of labour laws for three years by some states have caught the headlines, and been criticised, rightly, as half-baked. No

**Summary:**

Swaminathan SA Aiyar argues that the Covid crisis presents an opportunity for bold reforms like abolishing petroleum subsidies and imposing higher fuel taxes, which the Indian government has pursued courageously. The central government raised excise duties on diesel and petrol in March and May 2020, increased road cess to Rs 8/litre, with states following suit, potentially yielding 1% of GDP in revenue amid a 2-3% GDP revenue shortfall from recession. Though 70% of current petrol/diesel prices (Rs 80/litre) is tax—cheaper than Europe/Japan but pricier than the US—these hikes curb consumption, reduce pollution in heavily polluted India, and incentivize shifts to electric vehicles, with rickshaws already proliferating. Subsidies on diesel (historically 50% cheaper than petrol despite higher global prices), kerosene, and cooking gas—once politically untouchable—have been fully phased out, correcting distortions like diesel car proliferation that worsened PM 2.5 emissions and wasted capital. Diesel pumps are now mostly electric, eliminating farmer subsidy rationale; in Delhi, diesel now exceeds petrol prices. Gradual increases during crises defuse backlash, aligning prices with global trends while capturing windfalls, promoting a classical-liberal shift to unsubsidized, domestic clean energy like solar.

**Key points:**

- Abolish all petroleum subsidies to eliminate distortions and fiscal burdens, as diesel, kerosene, and cooking gas subsidies have been successfully phased out.
- Raise fuel taxes significantly—now 70% of pump prices—to generate 1% of GDP revenue, curb pollution, and incentivize electric vehicles.
- End diesel subsidies for farmers, outdated since electric pumps dominate, correcting the irrational shift to polluting diesel cars.
- Use crises like Covid for gradual price hikes to avoid backlash while aligning domestic prices with global trends and capturing windfalls.

**By Swaminathan SA Aiyer**

* * *

“Never waste a crisis” is an old adage. The Covid crisis is a good time to enact painful reforms. Some reforms like the suspension of labour laws for three years by some states have caught the headlines, and been criticised, rightly, as half-baked. No investor will come if the change is limited to three years.

More rational and politically courageous is the abolition of once-sacred subsidies plus higher taxation of petroleum products. The central government raised the excise duty on diesel and petrol in March and May and increased the road cess to Rs 8/litre. State governments have raised their taxes too. Higher taxes could yield up to 1% of GDP, a fiscal godsend since the Covid-induced recession looks like cutting government revenue by 2-3% of GDP.

Economist Ajit Ranade says 70% of today’s consumer price of petrol and diesel is taxation, representing a prematurely high carbon tax. I disagree. Indian petrol at Rs 80/litre is still far cheaper than in Europe or Japan, though more expensive than in low-taxed USA. India is far more polluted than all of them. For breathable air we should raise fuel taxes to curb consumption and incentivise a switch to electric two-wheelers, and eventually electric cars. That will take time and technological change, but electric rickshaws are already spreading fast.

Earlier, attempts at big price changes often created a public backlash and forced a rollback. But finance minister P Chidambaram in the last UPA government came up with a ploy of raising prices a few paise at a time for long periods, to defuse both impact and protest. The BJP has adopted the same ploy, first to eliminate subsidies on petrol and diesel and now increasing taxes on the same.

When world prices rise, the Indian consumer price is raised too. But when world prices fall, Indian consumer prices fall only a bit, and most of the windfall is mopped up by higher government taxes. In June, consumer prices rose daily for 21 continuous days, a record. Without doubt consumers are hard hit, and the Congress is trying to raise a major protest. But most people seem to accept that sacrifices are needed in the current crisis.

For decades, subsidies on diesel, kerosene and cooking gas were viewed as politically untouchable. Even petrol was subsidised when world prices skyrocketed in the 2000s. But today all subsidies have been phased out. Kudos to the government.

The case for zero subsidies and high taxation is that petroleum fuels are mostly imported and emit toxic pollutants and greenhouses gases. Taxes act as incentives to shift energy consumption — this will take time — to domestic, unpolluting energy sources like solar electricity.

Politicians have long subsidised diesel, saying farmers need it to run irrigation pumps. This made diesel up to 50% cheaper than petrol though the global price of diesel is higher. The subsidy encouraged an irrational shift from cheaper petrol cars to expensive diesel cars that emitted far more cancer-causing PM 2.5, wasting scarce capital while worsening health.

Today diesel pumps in almost all states have been replaced by electric pumps, ending the rationale for subsidising diesel. With the end of subsidies and rise in taxation, diesel in Delhi (though not in other states) is costlier than petrol, as in the US or Europe. Well done, Kejriwal.

*Read the rest of the article [here](http://swaminomics.org/higher-fuel-taxes-fewer-subsidies-are-good-policy/). This article was originally published on the Times of India website on 5th of July 2020.*

Read more: [How the Air Corporations Act, 1953, came to haunt Indian aviation](https://spontaneousorder.in/how-the-air-corporations-act-1953-came-to-haunt-indian-aviation/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## How the Air Corporations Act, 1953, came to haunt Indian aviation

Original: https://www.spontaneousorder.in/p/how-the-air-corporations-act-1953-came-to-haunt-indian-aviation

Author: Spontaneous Order

Published: 2020-07-03T17:17:14.000Z

Topics: aviation, nationalization, privatization, government-failure

> The 1950s – 1960s were considered the Golden Age of Flying. It would be fair to say, however, that despite this perception, airlines around the globe were on a slippery slope. Only the affluent could afford to fly. Statistically, the number of crashes a

**Summary:**

The Air Corporations Act, 1953 nationalized India's airline sector, merging private carriers into government monopolies Indian Airlines (domestic) and Air India International (international), banning private operations despite their superior ability to minimize costs, enforce contracts, and foster competition. This undermined classical-liberal principles of choice, freedom, and markets, prioritizing government intervention over private enterprise amid global aviation challenges. JRD Tata warned of bureaucratic inefficiencies, which materialized: post-1994 partial liberalization, Air India's domestic market share fell to 11.8% by September 2018 from 19.8% in 2014. Yet, government re-interference—2007 merger of Air India and Indian Airlines ballooned losses from ₹770 crore (2006-07) to ₹7,200 crore (2009), accumulating ₹42,570 crore debt and ₹22,000 crore losses by 2011, later exceeding ₹52,000 crore debt. Failed privatization bids, corruption charges, recruitment bans, and vigilance overreach exacerbated decline. The author argues government failure exceeds market failure; full privatization via competition (invisible hand) is essential, with regulations emphasizing outcomes, private board inclusion in Airport Authority of India, and general rules reducing entry barriers.

**Key points:**

- The 1953 Air Corporations Act created government monopolies in aviation, illegalizing private airlines and leading to inefficiencies from bureaucratic sloth.
- Post-2007 merger, Air India's losses surged from ₹770 crore to ₹7,200 crore within two years, with debt hitting ₹42,570 crore by 2011.
- 1994 repeal enabled private entry, slashing Air India's market share to 11.8% by 2018 amid competition.
- Full privatization is urged, as only private markets self-balance via the invisible hand, requiring regulatory frameworks focused on outcomes and private stakeholder inclusion.

**By Jayant Sharma**

* * *

The 1950s – 1960s were considered the Golden Age of Flying. It would be fair to say, however, that despite this perception, airlines around the globe were on a slippery slope. Only the affluent could afford to fly. Statistically, the number of crashes and flight accidents pointed to the need for enforcing stricter safety measures.    

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India was no exception to this rule. To rescue the country’s airline sector and for making air services available to all, the Planning Commission of India recommended the merger of all scheduled airlines. The result was the nationalisation of Air India through the passing of the Air Corporations Act, 1953. 

The legislation nationalised all air transport and provided for the establishment of air corporations to facilitate the acquisition of existing airline companies and to improve operations of air transport services.  

The two corporations set up were Indian Airlines and Air India International. The move was aimed at providing safe, efficient, adequate, economical and smoothly coordinated air transport services, both internal and international.

Of far-reaching import, the new legislation made the business of running airlines by private institutions, illegal. 

Clearly, the government had undermined the benefits of giving any role to private institutions, who minimise transaction costs, reduce uncertainty, create markets by protecting property rights, uphold the rule of law, enforce contracts, regulate/ substitute markets in the case of market failures and stabilise markets by promoting economic stability. Economic entrepreneurs seek profits and therefore seek to create value.

The new legislation also paid scant attention to the fact that the government is as vulnerable to problems that crop up during the running of companies, as private markets. There was the need to compare the likelihood and extent of government failure against the likelihood and extent of market failure – with the benefit of hindsight, it may not be incorrect to suggest that the dangers of government failure are often greater than market failure. 

Additionally, the new law was pitted against the basic tenet of sound public policy – that a programme should enhance choice, freedom and competition.

The Air Corporations Act, 1953, gave monopoly powers to Indian Airlines to operate on domestic scheduled services, keeping out any other operator. Similarly, Air India International became the lone Indian carrier to operate on international routes except for flights to some neighbouring countries, which were given to Indian Airlines.

The implementation of the Act was itself a testimony to the government’s lack of awareness, that its involvement in an industry about which it knew little, was going to make matter worse – perhaps even worse than imperfect markets.

Founded in 1932 by the doyen of the Tata Group, JRD Tata, Air India was the umbrella under which all other domestic air carriers sought their place. Despite his role as founder, JRD had no illusions that nationalisation would not help in setting up an efficient and self-supporting air transport system. 

All along, JRD Tata did not lose sight of the fact that the government’s inexperience of running an airline industry, coupled with nationalisation and its perils namely bureaucratic sloth and lethargy (pointing to the government’s limited knowledge and benevolence), could lead to a decline in employee morale and fall in passenger services.

And that is the way it panned out. Much later, in 1994, when the Air Corporations (Transfer of Undertaking & Repeals) Act was legislated, it brought private commercial airline carriers back into the aviation sector. 

The Act provided for the transfer and vesting of the undertakings of Indian Airlines and Air India and repealed the Air Corporations Act, 1953, allowing private airlines to operate services to other countries and renegotiate bilateral air service agreements. It also eased regulations for airport construction and modernisation by allowing public-private partnership in construction and operation.

The Act realised that economic development needed institutions that encourage enterprise and the rules set should encourage competition and reduce barriers to entry while being generally applicable.

With private players coming into the fray, Air India’s domestic passenger market share came down to an all-time low of 11.8% in September 2018, as compared to 19.8% in January 2014, and has been on a continuous decline ever since. 

In 2000–01, attempts were made to privatise Air India. The beginning of the tailspin, yet again, coincided with governmental interference. On 23 May 2001, the Ministry of Civil Aviation charged Michael Mascarenhas, the then-Managing Director of Air India, with corruption, proving that players in the market and the government were equal when it came to promoting self-interest.  

In 2007, Air India and Indian Airlines were merged under Air India Limited. The merger, finally, initiated its downhill slide. The combined losses for Air India and Indian Airlines in 2006–07 were over ₹770 crore (US $110 million), which after the merger, rocketed to ₹7,200 crore by March 2009. 

By March 2011, Air India had accumulated a debt of ₹42,570 crore and an accumulated loss of ₹22,000 crore and sought ₹42,920 crore from the government. 

A report by the Comptroller and Auditor General (CAG) put the blame on the decision to buy 111 new aircraft and the ill-timed merger with Indian Airlines, as reasons for the poor financial health of the airline. 

In 2017, the Narendra Modi government gave an in-principle approval to the disinvestment of Air India. NITI Aayog, the government’s think tank, suggested complete privatisation of the Air India, which had a staggering debt burden of over Rs. 52,000 crores. In March 2018, the government issued Expression of Interest *(EOI)* to sell stakes of Air India, Air India Express and of AISATS, a ground handling joint venture with Singapore Airport Terminal Services (SATS). 

But no private firm showed the least interest in buying a debt-laden airline. Having failed on previous occasions to sell the airline, the government decided to sell 100% shares.

On 27 January 2020, it released the *EOI* to invite bidders deciding to sell 100% shares of both Air India and Air India Express as well as 50% shares of *AISATS,* after it had already decreased nearly ₹30,000 crore (US$4.2 billion) of debts and liabilities in a Special Purpose Vehicle (SPV).

Experts attribute this precipitous decline to excessive government interference. Consider the following: 

\*\* The ban on recruitment ensured there were no fresh blood or new and innovative ideas. 

\*\* The stress on tendering procedures coupled with overindulgence of vigilance setups that rarely differentiate between mala fide and procedural mistakes.

\*\* Reluctance to address issues relating to leadership, human resource, processes, delegation and organisational culture. 

Given this tumultuous six-decade-old background, privatisation seems to be the only possible solution for the airlines to stay afloat, as only a healthy competition in a private market will balance itself in the longer run (the concept of Invisible Hand). 

While implementing a policy, the government needs to consider long-term consequences rather than short term effects. As a rule of thumb, it needs to focus on measurable outcomes and not just good intentions or inputs.

It is time for the government to impose stricter norms for itself and private stakeholders alike through a proper regulatory framework by laying down clear objectives, enumerated powers of the agents, extensive procedural details on the working of the agency and elaborate accountability mechanisms.

Look at it any way, there is urgent need to include more private players on the Board of the Airport Authority of India (AAI). Currently, the 11-member AAI Board includes mostly bureaucrats, who have little stake in making a private airline carrier part of an industrial decision-making process. 

Read more: [Walk The TikTok](https://spontaneousorder.in/walk-the-tiktok/)

* * *

**About Jayant Sharma**

After graduating in Statistics from Delhi University, Jayant had extremely versatile work experience. From working as a business development manager at a startup to the head of operations at a luxury boutique property, and a political consultant during the 2018-2019 elections, he now works as a digital marketer for leading global motivational speakers, writers and business coaches. With a knack for numbers and research and the newfound love for governance and policy, he aspires to work closely with the political machinery to bring social reforms.

## WALK THE TIKTOK

Original: https://www.spontaneousorder.in/p/walk-the-tiktok

Author: Spontaneous Order

Published: 2020-07-02T19:23:27.000Z

Topics: china-india-tensions, trade-sanctions, global-value-chains, wto-rules

> While opinions differ on why exactly China has intruded into Ladakh, India must stand up to Chinese aggression. Weakness will invite further incursions and pressure. There are right and wrong ways to go about this. Military bombing à la Balakot or ‘sur

**Summary:**

India must counter Chinese aggression in Ladakh through smart diplomatic and economic measures rather than risky military escalation or self-harming broad import bans, argues Swaminathan S.A. Aiyar from a classical-liberal viewpoint emphasizing free trade, WTO compliance, and integration into global value chains (GVCs). Banning 59 Chinese mobile apps—including TikTok, WeChat, UC Browser, and Club Factory—with over 500 million monthly users in May, justified on privacy and security grounds, is a precise, effective sanction that targets China's emerging strength in internet services and e-commerce without violating international rules or raising Indian production costs. In contrast, proposals to halt all Chinese imports would inflate costs, sever GVC links essential for Modi's export ambitions, and breach WTO non-discrimination principles, ultimately weakening India's competitiveness and suiting China's interests. Selective quality checks on Chinese power equipment and high duties (up to 40% on solar panels, 80% from China) risk higher input costs but could foster domestic scale if paired with sunset clauses phasing out in 5-6 years. True security lies in a low-cost, dynamic economy funding military power, not protectionism.

**Key points:**

- Ban 59 Chinese apps like TikTok, with 500 million users, as a targeted retaliation hitting China's service sector future without harming India's economy.
- Avoid blanket Chinese import bans to preserve GVC integration, low costs, and WTO compliance essential for a small trading power like India.
- Impose selective duties on solar panels and power equipment only with sunset clauses to build domestic capacity without permanently raising production costs.
- Prioritise relentless cost-cutting and export competitiveness, as economic strength underwrites military power against China.

**By Swaminathan SA Aiyer**

* * *

While opinions differ on why exactly China has intruded into Ladakh, India must stand up to Chinese aggression. Weakness will invite further incursions and pressure. There are right and wrong ways to go about this. Military bombing à la Balakot or ‘surgical strikes’ against China would be a foolish escalation. In a military conflict, China’s vastly superior forces will beat us hollow. Instead, India needs to act on the diplomatic front. And it should choose the right economic sanctions that will damage China without harming India itself.

After considering several wrong sanctions, it has found the right ones. India has banned 59 Chinese mobile apps on smartphones, including ByteDance’s TikTok, Tencent’s WeChat, Community and Video Call (of Xiaomi, the top smartphone seller), UC Browser and UC News (owned by Alibaba), and Club Factory, which claims to be India’s third-largest e-commerce firm. These apps put together had more than 500 million monthly users in May.

The ban has been justified on privacy and security considerations. This does not violate any international or treaty rules. But, clearly, the ban tells China that India can strike back in non-military ways. China can ban Indian e-commerce companies in retaliation, but these are so small in China as to hardly matter.

India needs to choose sanctions with a cool head, not in a burst of rage. The ban on Chinese apps is a cool, effective sanction. Earlier, rage on TV channels and social media sparked demands for stopping all imports from China. That would have hurt India itself. It would deny India some of the world’s cheapest, most efficient machinery, intermediate goods and components.

Besides, India wants to expand into global value chains (GVCs) that dominate world trade. China is a very big player in these chains. If India bans all Chinese imports, it will cut itself off from these GVCs. That will be ruinous and, indeed, contrary to Modi’s stated aims.

In sum, banning all or most Chinese goods will make India a high-cost producer cut off from GVCs. This will weaken India economically, which suits China fine. India needs relentless cost-cutting to become a globally competitive and fast-growing, for ultimately, the only true security is a powerful economy that can finance a powerful military.

India’s 1.3 billion people make it the largest potential foreign market for Chinese internet and e-commerce firms. China’s future lies not in cheap labour-intensive goods but services. Denying China access through apps to Indian consumers is a clever way of targeting its future strength. This non-military form of retaliation is entirely in accord with international trade rules. It will not raise Indian production costs or lower competitiveness.

Earlier wild proposals to ban all Chinese goods would have violated World Trade Organisation (WTO) rules. As a relatively small trading power with no superpower godfather, India must do all possible to keep international trade and treaty rules intact. It could lose a lot if the rules are junked (something threatened by Donald Trump), opening it to a zillion arbitrary trade threats. WTO rules provide that every member must offer every other member the same import duty rate, and not discriminate. India needs to observe this rule.

GoI wants to check all Chinese power equipment and other equipment to ensure quality. Surely, Indian industrialists would have checked the quality before buying machinery. Quality checks can be used cynically as a non-tariff barrier, but should be highly selective to minimise their impact on Indian costs of production.

New duties are being proposed on power equipment. Duties up to 40% are proposed on solar panels, 80% of which are imported from China. This is will help create Indian panel producers, but will also make Indian solar power much more expensive. The need of the hour is to reduce India’s input costs ruthlessly to make it a dynamic exporter again.

GoI hopes that massive production of solar panels behind high tariffs will create scale economies that ultimately make solar panels much cheaper, hopefully competitive with Chinese panels. This is a risky, but not impossible, strategy. To work, the import duties must have a sunset clause, phasing them out in five or six years. That will ensure that only serious investors with longterm export ambitions come in.

*Read the rest of the article [here](http://swaminomics.org/walk-the-tiktok/). This article was originally published on the Economic Times website on 1 July 2020.*

Read more: [Power sector could do with more autonomy](https://spontaneousorder.in/power-sector-could-do-with-more-autonomy/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Power sector could do with more autonomy

Original: https://www.spontaneousorder.in/p/power-sector-could-do-with-more-autonomy

Author: Spontaneous Order

Published: 2020-07-01T13:52:16.000Z

Topics: power-sector, renewable-energy, price-controls, electricity-subsidies

> It is indeed problematic that the electricity market, which is crucial for economic and social development, is highly regulated and prone to government intervention. This, in fact, holds good for India’s power sector, which has not been touched by the b

**Summary:**

India's power sector remains highly regulated and intervention-prone, missing out on economic reforms that benefited other sectors, leading to inefficiencies exemplified by recent renewable energy tariff ceilings. Intended to aid financially stressed discoms by capping tariffs, these controls instead caused shortages—renewable capacity addition fell from 11.3 GW in 2017 and 11.8 GW in 2018 to 8.6 GW in 2019—due to unviable bids amid rupee depreciation and debt costs over 11%. Under-subscription led to retendering and uncertainty, while low margins spurred inferior equipment use and resource concentration in high-wind states like Gujarat and Tamil Nadu, neglecting others. Discom woes persist from mismanagement, power theft, poor metering, high cross-subsidy surcharges taxing industry to subsidize farmers, and unpaid dues exceeding Rs 1,15,108 crore as of April 2020. Industrial users shift to cheaper renewables via captive plants or open access, hampered by charges. Rooftop solar faces size caps. The classical-liberal solution: grant the sector more autonomy by ending subsidies (which encourage water overuse), promoting open access and decentralized energy trading, and removing regulations to enable competition. The government lifted ceilings in March 2020, but draft Electricity Act amendments risk more central control rather than liberalization.

**Key points:**

- Tariff ceilings on renewable tenders caused capacity addition to drop from 11.8 GW in 2018 to 8.6 GW in 2019, leading to shortages and uncertainty.
- Discom financial distress stems from mismanagement, theft, and cross-subsidies rather than high renewable costs, with unpaid dues over Rs 1,15,108 crore.
- End electricity subsidies, promote open access, and encourage decentralized renewables to foster competition and efficiency.
- Draft Electricity Act amendments should prioritize reducing cross-subsidy surcharges and minimizing regulations over increasing central control.

**By Sarthak Takyar**

* * *

It is indeed problematic that the electricity market, which is crucial for economic and social development, is highly regulated and prone to government intervention.

This, in fact, holds good for India’s power sector, which has not been touched by the benefits of economic reform, as some of the other areas of the economy have. A big part of the problem lies in the role of the state, as this article demonstrates.

A recent example of price control for renewable energy tariffs has brought the harmful effect of government intervention, to the fore.

To avoid an increase of renewable energy duties, the government used to place a tariff ceiling in the tenders. This meant that developers had to bid lower than the duty cap. The government had intended to help distribution companies (discoms), which are currently in acute financial stress. 

However, the policy intervention did not achieve its ends and in fact, led to many unintended consequences. Interestingly – but not surprisingly – all the consequences were in consonance with the economic theory on price controls.

One, price ceilings lead to shortages. This can be noticed by the reduced capacity addition of renewables, which fell from 11.3 gigawatts (GW) and 11.8 GW in 2017 and 2018 respectively (when tariff ceilings were not there) to 8.6 GW in 2019 (when tariff ceilings were present). 

The developers refrained from bidding as tariff caps were unviable, which led to under subscription of many tenders. The depreciation of the rupee and a high cost of debt (at over 11 per cent) were other reasons for the slowdown in capacity additions. 

Under subscription meant retendering or postponement of the bidding dates with revised tariff caps. This created a lot of uncertainty in the renewable energy industry, according to the *Renewable Watch* magazine. 

Two, the tariff, especially for solar projects, was already low due to excessive bidding by developers, which in turn, impacted their quality. Some promoters and operations and maintenance companies had started to use inferior quality equipment to develop solar plants, hampering the project quality. Tariff ceilings aggravated this issue as the stakeholders continued to work on thin margins. 

Three, price ceilings lead to inefficient allocation of resources. Due to the low tariff caps, developers were restricting themselves to Gujarat and Tamil Nadu which have high wind speeds, leading to land and infrastructure constraints. The good returns that come with high wind speeds could have justified the low tariff that was not possible in states like Rajasthan, Karnataka or Madhya Pradesh where wind speeds are low, according to KV Sajay, president solar, wind and regulatory affairs, Hero Future Energies.     

All in all, government intervention by controlling the price of renewables not only led to adverse consequences but also did not improve the financial health of discoms, which continues to be in the doldrums. Ultimately, in March 2020, the government removed the ceiling tariffs for tenders to be floated in future.

The government decision was bound to fail if the tariff ceilings were set to help the discoms by purchasing cheaper renewable energy. This is because the fundamental challenges for discoms are entirely different.

According to Mercom Research Focus, discoms have suffered because of poor management and economic decisions. Technical and commercial loss primarily due to power theft, inadequate metering infrastructure and poor payment collection procedures are the other management related issues. 

High cross-subsidy surcharge (CSS) levied by the discoms remains another problem area. Put simply, the discom taxes the commercial and industrial users to subsidise farmers. Paradoxically, taxing the rich has not helped as they have started to lose their high electricity tariff-paying customers. 

These users are increasingly looking towards procuring cheaper renewable energy, either through captive power plants or through open access, even though their freedom to take this route is hampered by many state discoms that impose several open access charges. 

The residential rooftop solar segments too have taken the brunt of numerous regulations, which imposed caps on the size of rooftop solar plants, thereby disincentivising interested consumers to become prosumers, points out *Renewable Watch.* 

The discoms, which continue to be saddled with debt, are unable to pay the developers for the electricity purchased. The unpaid dues to developers were over Rs 1,15,108 crore as of April 2020, according to the Praapti portal. 

Going forward, the democratisation of the energy markets with decentralised renewable energy projects will be the new normal for the grid. This will require the government to make decisions involving the end consumers, be it blockchain for energy trading or management of electric vehicle charging of prosumers.

Moreover, open access needs to be encouraged further wherein large consumers get access to the transmission and distribution network and purchase electricity from suppliers, other than the local discom. This gives more freedom to the user and promotes competition.

To help discoms, electricity subsidies need to go away. All consumers should pay for the actual cost of electricity. Even for farmers, subsidised electricity leads to overuse of irrigation pumps, thereby reducing water tables. This may be politically difficult but is perhaps the only way to take the bull by the horns.

A positive development for the power sector is that the draft amendments to the Electricity Act, 2003, which were published by the Ministry of Power in April 2020, have called for mandatory reductions in CSS. It is now up to the central government to make the decisions to change the CCS, which were earlier taken by state governments. 

Experts believe there are other amendments as well, which will establish more central government control and regulations, which private players will have to conform with, suggest media reports. While power sector reforms are always on the agenda, this appears to be a failed chance to turn a crisis in an opportunity. 

* * *

**About Sarthak Takyar**

Sarthak Takyar is a postgraduate in Agribusiness Economics from the Gokhale Institute of Politics and Economics, and a graduate in economics from the University of Delhi. For the past two years, he is working as a researcher for Renewable Watch magazine and REGlobal. Though a clean energy enthusiast, he hopes that India's power sector becomes more robust to solve the menace of energy poverty.

## Dadabhai Naoroji: Social Reforms, Transnational Connections and Statistical Liberalism

Original: https://www.spontaneousorder.in/p/dadabhai-naoroji

Author: Spontaneous Order

Published: 2020-06-30T13:34:12.000Z

Topics: indian-liberalism, social-reform, drain-theory, statistical-liberalism

> The early phase of nationalist movement in India, dominated by the largely liberal-minded moderate faction of the Indian National Congress (INC), saw them envision a wholesome agenda for the regeneration of India. Prior to creating an Indian political ...

**Summary:**

Dadabhai Naoroji exemplifies the early liberal phase of Indian nationalism, pursuing social reforms, political rights, and economic regeneration through education, public sphere creation, and statistical liberalism amid colonial challenges. As a Young Bombay reformer, he founded institutions like the Students’ Literary and Scientific Society (1848), Dnyan Prasarak Mandli, six girls’ schools (1849), Rahnumae Mazdayasnan Sabha (1851), and Rast Goftar newspaper to promote mass literacy, female education, and rationalized Zoroastrian practices against orthodoxy. Transnationally, Naoroji advanced the 'drain of wealth' theory via statistical comparisons—e.g., Indian per capita income below prisoner subsistence levels—comparing India to the US, Australia, and Canada, influencing British socialists like Henry Hyndman, US anti-imperialists, feminists, and anti-racists. His methods included turning British officials' testimony and empirical critiques of official data. While effective against Raj legitimacy, Naoroji's protectionist agenda, suspicion of foreign capital, and state expansion shaped Gandhi's and Nehru's economic nationalism, contributing to India's pre-1991 stagnation—a classical-liberal critique of its enduring folly, seen in modern swadeshi echoes. Indian liberalism, foundational yet forgotten, merits revival, as in Dinyar Patel's biography.

**Key points:**

- Naoroji founded key institutions like SLSS, Dnyan Prasarak Mandli, and girls’ schools to advance mass and female education in 1840s Bombay.
- He popularized the drain theory through per capita income estimates and international comparisons, allying with British socialists, US progressives, feminists, and anti-racists.
- Statistical liberalism challenged colonial narratives but fostered protectionism that influenced Nehruvian socialism and delayed India's economic liberalization until 1991.

**By Sanjeet Kashyap**

* * *

The early phase of nationalist movement in India, dominated by the largely liberal-minded moderate faction of the Indian National Congress (INC), saw them envision a wholesome agenda for the regeneration of India. 

Prior to creating an Indian political subject, these liberal leaders were invested in the project of creating an Indian public sphere. The eventual culmination of the liberal political project lay in achieving self-rule- interpreted differently as political independence or dominion status- by constitutional means. The vision of modernisation wasn’t limited only to the political realm as Indian liberals also sought to reform the society deeply anchored in orthodoxy. 

The native Indian modernisation project under the colonial tutelage, though, had to contend with both the obstructive and accelerating tendencies of the imperial metropole. The career of Dadabhai Naoroji, the Grand Old Man of Indian nationalism and perhaps the most prominent liberal figure, captured the zeitgeist of this early phase of Indian nationalism. 

Even as liberals were first challenged by the ascendant Congress extremists and were later completely side-lined during the mass nationalism phase under Gandhi, their vision and ideas were co-opted by the later generation of Indian nationalist leaders, as shown by the late CA Bayly. In that sense, Indian liberalism remained foundational to the idea(s) of India even if in adopted fashion and as such merits scholarly attention. 

In pursuit of their agenda for social reform, political rights, and economic regeneration, Indian liberals, including Naoroji, employed a variety of measures. These included educational enterprise, creation of a reading public sphere, formation of political associations, petitions to the Raj administration, counter-preaching, historicism, turning of the defence witnesses, and both upward & downward hermeneutics. Naoroji’s career was emblematic of this liberal phase of Indian nationalism, in both his ideas and methods, which shall be explored below.

**Naoroji as Social Reformer**

Given the challenges of regressive social practices, religious orthodoxy, repressive colonialism as well as imperatives of the democratic polity, the need to create a civil society beyond the tyrannies of state was evident to Indian liberals. Gopal Krishna Gokhale’s Servants of India society, Mahadev Govind Ranade’s Deccan Sabha, and Poona Sarvajanik Sabha were some notable associations, which sprang up to represent Indian interests and demand rights from the state.  Mass illiteracy, however, posed a challenge to the broadening of civil society as well as the promulgation of rational discourse. Indian liberals thus turned to educational initiatives to foster mass literacy. The pedagogical element of the social reform agenda of liberals was concerned with both mass education and female literacy. 

Himself a beneficiary of benevolent scholarships, Naoroji was an ardent advocate of free education for masses. In his Bombay stint as an academic in the mid-1800s, he belonged to the Young Bombay clique of social reformers and educationists. As historian Dinyar Patel has argued convincingly, in contrast to Kolkata, the Bombay-based native Indian elites exercised considerable agency in the education sector as instructors and financiers. It was the alliance between progressive intellectuals and rich *shetias* (mercantile community) that fostered the social reform agenda of the Young Bombay. 

With its belief in the intrinsic value of the western liberal education, the Young Bombay group deployed education in service of social reforms and modernisation to create the liberal political subject in India. Naoroji was instrumental in shaping the educational reform agenda along with fellow western-educated, liberal-minded reformers- Navrozji Fardunji, Karsondas Mulji, Bhau Daji, Ardeshir Framji Moos and Behramji Malabari. The most enduring contribution of Naoroji came in the form of creating an enduring institutional base for liberal values in the domain of pedagogy. 

The initiatives undertaken included *Parsi Lehak Mandli* where he was the founding member and first editor; the *Parsi Natak Mandli* where he was a co-founder; and the *Framji Cowasji Institute* where he was instrumental in raising funds. At Elphinstone’s College where he was teaching, Naoroji founded the *Students’ Literary and Scientific Society* (SLSS) in 1848. Three months later, SLSS was followed by the *Dnyan Prasarak Mandli* (Society for the Diffusion of Knowledge) as a branch of the SLSS, which produced content in Gujarati and Marathi language. 

Part of the initiative also included the promotion of female education. Naoroji’s reformist zeal for gender equality spurred his endeavour. In October 1849, he would go on to open six schools for girls under the banner of the SLSS. Again, the progressive *shetias* came to provide the financial ballast. The donors included Jagannath Shankarsheth, Jamsetjee Jejeebhoy, Framji Cowasji Banaji, and Cowasji Jehangir Readymoney.   

The ambit of reforms went beyond social issues to rationalise religious practices deemed irrational. The initiative was partly an insider response to critical charges from Christian missionaries and partly a bid to create the liberal political subject through character building. Naoroji’s religious reforms were mostly focused on his own Parsi community. In this initiative, his partner was the haltingly English-speaking but reform-minded *shetia,* Kharshedji Nasarvanji Cama. Apart from widening the distribution of the Dnyan Prasarak Mandli’s publications, Cama was involved with Naoroji in two other reformist enterprises that riled the Parsi orthodoxy. 

In 1851, Naoroji and colleagues founded the *Rahnumae Mazdayasnan Sabha* (Society of the Guides of the Mazdayasnan Path) and *Rast Goftar*, a newspaper in Gujarati. According to Dinyar Patel, the Sabha went on ‘protestantising aspects of Zoroastrianism by removing supposedly foreign and inauthentic customs and practices.’ Reformist in its orientation, *Rast Goftar* took a slew of causes, including the discontinuance of child marriages, the inappropriateness of nautches, and the rights of women in adopting European clothing. 

However, as Dinyar Patel points out, Naoroji succumbed to oriental stereotypes in his bid to reform Parsi tradition. Naoroji’s excuse for certain ‘irrational’ Parsi practices lay in attributing it to corruption borrowed from Hindu and Muslim traditions. In later years, the involvement of Karsandas Mulji increased the scope of the *Rast*. Meanwhile, Naoroji would go on to broaden the scope of both issues that he espoused and places that he went in advancing India’s interests.  

**Advancing Indian Causes in the Transnational Public Sphere**

Naoroji’s concern with India’s regeneration was set in the context of the globalised production system and circulation of ideas. As a man of letters and public figure in both Britain and India, Naoroji was involved in crucial conversations on matters of anti-imperialism, political economy, race, gender rights and political economy. His long stay in Britain, including a parliamentary stint as an MP, meant he was a noteworthy participant in the transnational public sphere. The transmission of ideas happened in both directions, best captured in Bayly’s conception of upward and downward hermeneutics. Naoroji made references to international events in his writings, formed alliances with a variety of political actors abroad, and influenced public debates in Britain and other countries. 

For example, his formulation of the ‘drain of wealth’ theory deployed international statistical comparisons to hammer his point on India’s persistent impoverishment home. In “*The Wants and Means of India*”, he drew the balance of trade comparisons with the US, Australia, and Canada. By the mid-1870s, he turned to study the US economic experience and initiated correspondence with the US state officials in the Army Corps of Engineers and various state departments including those from Agriculture, Treasury, and the Interior. Dinyar Patel writes that Naoroji’s correspondence with the US officials concerned with statistics collection continued in the early 1900s. 

His work on the drain of wealth influenced public debates as far as Cyprus and the USA. In July 1902, Naoroji received the request for a copy of his recently published *Poverty and UnBritish Rule in India* from the Cyprus-based M Sevasly. Mr Sevasly wanted to analyse the impact of British rule on his country with reference to Naoroji’s work on India. In the USA, Naoroji’s arguments on the exploitative nature of imperialism were wielded by the anti-imperial Progressives. According to Dinyar Patel, it was George Freeman, a reporter for the *New York Sun*, who introduced Naoroji’s ideas to Edward Atkinson, the founder of the American Anti-Imperialist League and William Jennings Bryan, the leading progressive leader in the US. 

In Naoroji’s description of degrading poverty under imperial rule, Freeman found support for his warnings against the US expansionism in the Pacific and Latin America. Freeman popularised Naoroji’s ideas by distributing it to political leaders, universities, public libraries and newspapers. He also convinced Naoroji to send his writings to the elected leaders in the US Senate. Though, we aren’t aware of further correspondence between Naoroji and serving senators on this matter.

In his decades-long career in Britain, Naoroji laboured relentlessly to popularise the Indian cause. Given the uncooperative attitudes of colonial bureaucracy at home, Naoroji figured that the best way to serve Indian interests would be to influence decision-making in the British parliament. To this end, he fought multiple election campaigns in Britain, twice as a Liberal Party candidate and once as an independent Liberal candidate. The active political career in Britain entailed courting different constituencies in order to win elections as well as garner support for India. Naoroji’s wide-ranging connections as a politician had a distinctly progressive and anti-imperial character. 

Historian Dinyar Patel has uncovered Naoroji’s long friendship with and influence over Henry Hyndman. Among the leading members of British socialist movement, Hyndman drew heavily upon Naoroji’s drain theory in his article titled “*The Bankruptcy of India*”. Interestingly, as Dinyar Patel shows, Hyndman also told Karl Marx that “I want you very much to meet Mr Dadabhai Naoroji to whom I am much indebted for facts and ideas about India.” 

In August 1904, both Hyndman and Naoroji attended the International Socialist Congress in Amsterdam. In the initial stage of his electoral run, Naoroji also briefly considered courting a Tory candidacy, which he discussed with Scawen Blunt. To this end, George Birdwood offered to arrange meetings with British Conservative politicians. 

Dinyar Patel has argued that Naoroji mainly courted three constituencies during his stint in British politics- workers and trade unions, Irish nationalists, and the disenfranchised feminists. His alliance with feminist activists was reflected in his involvement with the feminist associations. Naoroji served as a vice president of the Women’s Progressive Society and the International Women’s Union. He was also a council member of the Women’s Franchise League.

Himself a target of vicious racist jibes from no one less than the Conservative prime minister Lord Salisbury in the infamous Black Man incident of 1888, Naoroji took an active interest in transnational initiatives against racism. He forged ties with Catherine Impey who was the founder of a journal called *Anti-Caste*. The journal campaigned against all forms of racial injustice and attacked both casteism in India and lynching of Blacks in the post-reconstruction American South. Remarkably, Impey also introduced Naoroji to the famous black civil rights activist, Ida B Wells. Later in 1907, WEB DuBois published excerpts from Naoroji’s radical presidential speech at the Calcutta session of the Indian National Congress (1906) in his magazine *Horizon*.

For all his progressive views and socialist leanings, Naoroji remained at core a member of the liberal establishment, both in India and Britain. In fact, it was his friends in Bombay, most notably AO Hume, who leveraged their connections to induct him in the British Liberal establishment of politicians, civil society associations and journalists. Not only did Naoroji fight the elections twice on the Liberal Party ticket, but he also engaged with the National Liberal Federation, London-based Liberal Central Association, Manchester-based National Reform Union, and the Holborn Liberal Association to name a few.

**Statistical Liberalism and Drain of Wealth**

Coined by CA Bayly, the term ‘statistical liberalism’ refers to the Indian political economy fashioned by liberals to challenge colonial appropriation and exploitation. According to Bayly, the “fundamental principle of Indian Statistical liberalism was that impoverishment and famine were not the natural outcomes of human improvidence and extravagance combined with overpopulation.” The most prominent practitioners of this version of political economy were RC Dutt, KT Telang, and Dadabhai Naoroji. Given his academic background in mathematics, Naoroji deployed statistics and empirical data to counter the official reports, which served the narrative of progress under the Raj’s ethnographic state and legitimised the colonisation project.

Naoroji was, by no means, the original proponent of the drain theory. Noted Indian liberal Raja Rammohan Roy and the little known Ramkrishna Vishwanath as well as British officials, including James Silk Buckingham, Montgomery Martin and others had broached the topic earlier in their own ways. But, Naoroji arguably was the most prominent proponent of the theory. 

His statistical liberalism consisted of calculating the extent of poverty in India,  identifying the causal mechanism behind the drain (council bills deployed in the salary and pension payments for British officials in the Indian civil service), vigorously promoting the solution (Indianisation of the bureaucracy as well as self-rule under the dominion status which Dinyar Patel calls the ‘political corollary’ to the drain).

Naoroji’s first public pronouncement on the matter came in 1867 with his delivery of “*England’s Duties to India*”. Dinyar Patel has identified two factors behind this political economy turn in Naoroji. The so-called Orissa famine of 1865-67 and the financial crisis in Bombay in the wake of the culmination of the American Civil War showed the precariousness of Indian lives and livelihoods. It was this degrading economic condition that might have drawn his attention to the matter.

In a detailed study, Dinyar Patel has identified several methods involved in Naoroji’s engagement with statistical liberalism. To begin with, Naoroji ‘made the first-ever estimates of the country’s gross income per capita (technically, gross production per capita).’ The result punctured the myth of bountiful progress under the British Raj. To further make his polemical case effective, he relied on statistical comparisons for the shock value they produced. Witness for instance his claim that the income of the average Indian peasant was less than the bare minimum living expenditure on an Indian prisoner or coolie emigrant. 

The third method involved deploying the testimony of British officials to argue his case. CA Bayly argued this kind of turning of the defence witnesses ‘not only undermined the authority of the Anglo-Indians but it also neatly deflected the charge of sedition.’ The final step was criticising the veracity of official statistics on empirical grounds. This involved pointing out the obscuration of differing local conditions in the official data and relying on sources on the ground for additional information.

Naoroji’s drain theory has come under criticism from later scholars of economic history and rightly so. Even historian Bipan Chandra, who otherwise sympathetically treated economic nationalism of Congress moderates- which is understandable given his Marxist leanings- found Naoroji’s fixation with the remittances absurd. More substantial criticism has come from other scholars though. 

KN Chaudhuri, for instance, calculated the drainage amounting to ‘less than 2 per cent of the value of India’s exports of commodities’ during the late nineteenth and early twentieth centuries. Others have pointed out the productive output generated in India from the so-called drain, which should be an investment. Vera Anstey argued if India had maintained its own army and navy, this arrangement might have cost more than the drain amount. 

Tirthankar Roy has argued that the services purchased abroad might have spurred the growth of businesses at home. Moreover, Indian nationalists were being cynical (Roy’s words, not mine!) in calling the cost of buying the technical knowledge drain. More recently, Dinyar Patel’s defence of Naoroji has come in the form of positioning drain theory as a political polemic rooted in data and empirical observations to further the anti-imperial cause, not a neutral, objective analysis. 

Of course, there is no denying the fact that the drain debate served the intended purpose of puncturing the legitimacy of the Raj. However, in so far as ideas tend to have an afterlife, the far-reaching impact of the drain formulation has been negative for the Indian economy. Naoroji and his fellow statistical liberals’ protectionist economic agenda, suspicion of foreign capital and trade, and envisioning of a larger role for the state went on to shape the economic agenda of Indian nationalists including Gandhi and resulted in the Nehruvian mixed economy. 

As the economic liberalisation of 1991 has made clear, for the folly of economic nationalism, part of the onus lies on Naoroji and his fellow travellers who institutionalised such ideas in the Indian nationalist movement. And, if anyone doubts the enduring impact of Naoroji’s ideas, one only has to look at the swadeshi ideology of the Rashtriya Swayamsevak Sangh (RSS) and politician Shashi Tharoor’s tirade against the British Raj, which extensively quotes Dadabhai Naoroji! 

**Conclusion**

In my opinion, the moniker that best captures the legacy and status of Indian liberal tradition is ‘forgotten’. Naoroji’s long public career in service of the nation has been no exception to this general trend. In this regard, a new biography of Dadabhai Naoroji, *Naoroji: The Pioneer of Indian Nationalism*, by historian Dinyar Patel might serve as a much-needed corrective though. 

*Author’s Note: This article draws heavily on the research of historian Dinyar Patel. The author gratefully acknowledges his contribution.*

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [S Ambirajan’s forgotten classic \`A Grammar of Indian Planning (1959)’](https://spontaneousorder.in/s-ambirajans-forgotten-classic-a-grammar-of-indian-planning-1959/)

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## S Ambirajan’s forgotten classic `A Grammar of Indian Planning (1959)’

Original: https://www.spontaneousorder.in/p/s-ambirajans-forgotten-classic-a-grammar-of-indian-planning-1959

Author: Spontaneous Order

Published: 2020-06-29T18:41:46.000Z

Topics: central-planning, indian-economic-history, economic-liberalism, austrian-economics

> Independent India was obsessed with the idea of centralised planning, sadly, minus scientific logic and reasoning and an avoidable penchant for blindly aping other countries. Truth be told, however, the idea of centralised planning was uppermost in the ..

**Summary:**

Chandrasekaran Balakrishnan revives S Ambirajan's 1959 book 'A Grammar of Indian Planning' as a forgotten liberal critique of India's centralized planning obsession, which began in the 1930s among leaders like Nehru and persisted despite the Constitution's liberal values of economic freedom and property rights. Ambirajan, influenced by Austrian economists like Mises, Hayek, and Bauer, argued that planning ignores the spontaneous organizing power of prices and the complexity of human choices, making mathematical modeling impossible. He critiqued pre- and post-1947 efforts, including the First Two Five-Year Plans (1951-56, 1956-61), Bombay Plan, and Gandhian Plan, as bureaucratic, red-tape ridden, and aping foreign models unsuitable for India's diverse regions. Profoundly, Ambirajan warned that democratic governments lack the stability for rigid Five-Year Plans, risking dictatorship, and highlighted Nehru's democratic facade masking administrative overreach. He stressed economic growth must follow a country's unique path, limited government role, private enterprise expansion, and realistic resource balancing over deficit financing. Balakrishnan deems Ambirajan's insights prophetic for India's first 40 years of malaise and relevant today, as centralized planning endures, stifling prosperity in a functional democracy.

**Key points:**

- India's centralized planning, adopted despite a liberal Constitution, became a tool for neo-colonial bureaucratic dominance, ignoring regional variations and spontaneous market order.
- Ambirajan's 1959 book meticulously critiques planning from British colonial times through Nehru's era, drawing on global examples like USSR, USA, and Austrian School thinkers.
- Rigid Five-Year Plans threaten democracy by requiring governmental stability that breeds dictatorship, making them incompatible with India's sovereign republic.
- Economic development requires limiting government, empowering private enterprise, and avoiding deficit financing without assessing resources.
- Planning must respect unpredictable human elements and country-specific paths rather than imposing foreign models.

**By Chandrasekaran Balakrishnan**

* * *

Independent India was obsessed with the idea of centralised planning, sadly, minus scientific logic and reasoning and an avoidable penchant for blindly aping other countries.

Truth be told, however, the idea of centralised planning was uppermost in the minds of mainstream political leaders, at least since the 1930s – particularly those who were determined to play a major role in independent India.

However, anyone with common sense, logic and sound reasoning powers would have seen that the quest for wealth creation would vary from country to country, and in the case of a vast country like India, from region to region.

Despite adopting a liberal Constitution, which enshrined the values of economic freedom, liberty and property rights in a free society, centralised planning became the byword for those in the new Indian administration, despite the resistance posed by few well-meaning leaders. 

In the absence of well thought out projects and with no institutional mechanisms in place, centralised economy became a plaything in the hand of neo-colonialists who came to rule and dominate independent India’s economic planning.

Alas, the shackles of centralised planning continue even seven decades since independence, which has been invariably turned out to be non-productive for a functional democracy like India. Centralised planning has sustained itself over the decades because elected representatives, who hold offices, have enjoyed the fruits of power without a care for implementing economic policies in a decentralised manner. For any elected government over the years, decentralised planning had become an anathema.

It was not always like this. The actual experience of India’s centralised planning both before and after 1947, and up to the First Two Five Year Plans -1951-56 and 1956-61 – was meticulously captured in a marvelous account called *A Grammar of Indian Planning* by Professor S Ambirajan, which was published in 1959 in the heyday of India’s centralised planned economy. A classic, this first book by this great liberal mind, captured the gigantic architecture of centralised planning in the Indian sub-continent with detailed and vast notes of appendix on China and Pakistan. 

In 1959, Prof Ambirajan was a young scholar, but *A Grammar of Indian Planning* included vast literary references, expostulating on the status of political economy, the planning process of British colonies and of major countries like the USA, USSR, Germany, Japan and Australia. He was well versed with the treatises of classical economics of the 19th century, the emerging theories of Fabian socialism and communist literature. Besides, his second book *Malthus and Classical Economics* was already in the press. 

With such deep intellectual insights and a thorough reading of economic literature post-World War II, Ambirajan was pained by the way the Jawaharlal Nehru government dealt with centralised planning for development and growth of the Indian economy. He was not just well aware of the emerging, if contentious, debates on centralised planning as proposed by C Rajagopalachari, M Ruthnaswamy, B R Shenoy and Prof P S Lokanathan, among others, but also well versed with the writings of the Austrian School of economists like Ludwig Von Mises, F A Hayek and Peter T Bauer. Traditionally, this school emphasises the spontaneous organising power of the price mechanism and holds that the complexity of subjective human choices makes mathematical modeling of the evolving market practically impossible, a template that Indian planners chose to ignore.   

Prof Ambirajan’s intention to write the book was two-fold – a deep inclination to understand the idea of planning in the Indian context, which meant compromising democracy inherent in the Indian Constitution, as well as to examine how it was used elsewhere in the world.

A part of the first chapter of the book first appeared as article in the *Swatantra* on October 1, 1955. Prof Ambirajan studied the documents of the Bombay Plan, the MN Roy Plan, Gandhian Plan and Gandhism Reconsidered, commenting acerbically: “With so much talk of planning filling the air, even the bureaucracy felt the infection and thought the time had come to act.” 

But he had little faith in the role of the bureaucracy of Independent India, which according to him, was the same as the British, albeit in different hands: “Fourteen years later, it should now be possible to take a more charitable view of the Government’s endeavours to plan our future. It was no doubt piecemeal planning, it was bureaucracy-bred and red-tape governed; but all the same, those Plans, and proposals were the first attempts at national planning at Government level…”

Ambirajan felt deep anguish over Nehru’s dilution of attention, ill-attempts to reconstruct the economy and instead of pushing it towards prosperity, indulging in mere rhetoric. He noted: “We cherish our hard-won freedom, and we do not wish to change the essential character of our sovereign democratic republic. But we wish also to achieve freedom from hunger, from squalor, from ignorance, and from idleness, for without these freedoms, mere political freedom can have no meaning for long.” Golden words. 

On centralised planning, he profoundly, demonstrated both the philosophical and the real impact of what it entailed. “There are unpredictable and imponderables in human life which are forever beyond the purview of the planners,*”* he said, adding, “It would, therefore, be foolish on the part of the administrator to impose one particular type of economic growth drawn from the experience of one country on the economy of another country. The movement of economic progress of a country must follow its own path, based on its history, aptitudes, and other determining circumstances.”

Prof Ambirajan raised some rather pertinent questions: “How can a democratic government launch a Five-Year-Plan—let alone a series of Five-Year-Plans—when its own life is rather precarious? For successful planning and execution, a government should enjoy both stability and longevity; but it is this very stability and longevity that breeds dictatorship, either of an individual or of a caucus ruling in the name of a party. It looks as though it is unthinkable that we can enjoy both the priceless freedom of a sovereign democratic republic and the material advantages of a rigidly formulated, fanatically advertised, and ruthlessly executed planned economy.”

His observations on Prime Minister Nehru, who became a hero of Independent India, where even Patel and Rajaji were ignored, are perceptive indeed. “In a sense, our, Prime Minister, Jawaharlal Nehru, is our greatest asset, for while he enjoys the prestige and wields the authority of a dictator, he has also the emotional nuances and ready adaptability of a true democrat. Even as he is conscious of the possibilities of planning, he is not unwilling at the same time to acknowledge the limitations of democratic planning. But the Prime Minister is not the whole of the administration, and there is always the danger that circumstances may turn the best asset into a dangerous liability. The Prime Minister should be an example, not a glittering facade for others to hide behind and pursue their respective ends.”

Therefore, the idea of Five-Year Plans, as envisaged by India’s Prime Minister, was nothing short of economic suicide. Prof Ambirajan said something that is relevant to contemporary India as well: “No doubt there is a tendency on the part of Government to increase its powers more and more and spread its tentacles over the whole life of the nation and invade every nook and corner of the citizen’s private and public life. This aspect of the problem is a problem for the political scientists, and it is the responsibility of the statesman to see that the nation and the people are not drowned in the waves of totalitarian omniscience and exercise of omnipotence. Successful economic growth should not end as mere successful suicide!”

According to him, “Economic development is but one of the many factors that determine a country’s or a community’s prosperity. Without social betterment and general cultural progress, mere economic development can have no meaning for us.” He added: “By and large, the three major determinants of the process of economic growth, besides the basic factor of natural resources, are the trend of the population, the state of technology and the level of capital accumulation. All these three tend to grow along with a country’s economic development, and act and react upon one another with results neither uniform nor clearly foreseeable.” 

Ambirajan was against deficit financing of government expenditures without a realistic assessment of the needs and resources available. He had warned: “One thing must be firmly borne in mind, however; the easy habit of borrowing and spending without any serious attempt to put forth our own best effort and make good would, in the long run, ruin ourselves and destroy our credit in the world.”

According to him*,* whether for a person or the entire community or country, “planning means analysing the needs and balancing them with the available resources.” 

Prof Ambirajan categorically stressed that without limiting the role of government and at the same time without offering a larger role for private enterprises, the goal of economic development and growth will not be possible to achieve at least in the Indian context. How prophetic he was to envision the maladies of the first 40 years of Indian economy! Today, not unnaturally, his words come to haunt.

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [S Ambirajan – the forgotten liberal political economist (1936-2001)](https://spontaneousorder.in/s-ambirajan-the-forgotten-liberal-political-economist-1936-2001/)

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## Rescue solvent companies but kill off zombies

Original: https://www.spontaneousorder.in/p/rescue-solvent-companies-but-kill-off-zombies

Author: Spontaneous Order

Published: 2020-06-29T15:01:55.000Z

Topics: zombie-companies, creative-destruction, fiscal-policy, india-economy

> Former Chief Economic Advisor Arvind Subramanian said India had moved from socialism with limited entry (for firms) to capitalism without exit. Alas, capitalism without exit is zombieland, full of companies neither dead nor alive. The problem has been i..

**Summary:**

India has transitioned from socialism with limited entry to capitalism without exit, fostering zombie companies that are neither dead nor alive, a problem exacerbated by Covid-19 rescues via loan moratoriums, guarantees, and debt evergreening. Economist Joseph Schumpeter's 'creative destruction'—where less productive firms fail, reallocating resources to more efficient ones—drives market prosperity, but government and RBI interventions save solvent firms while wrongly propping up zombies. The government's Rs 2 trillion package provides necessary relief amid lockdowns, but must be reversed next year to avoid fiscal traps seen post-2008 tax cuts, which ballooned deficits from 2.5% to 6.9% of GDP without reversal due to political freebies. Japan exemplifies stagnation: post-1990 crisis, low rates and evergreening created zombies, leading to 280% debt/GDP and central bank equity purchases without growth revival. Europe and the US have similarly printed money to sustain weak firms, doubling US zombies from 2013-2020. India's relatively miserly stimulus, focused on reversible RBI schemes rather than hard-to-reverse tax cuts, wisely controls long-term zombification if tough measures follow reversal. Rescue solvent companies, but kill off zombies to enable creative destruction.

**Key points:**

- Reverse Covid-era fiscal and monetary rescues next year to prevent zombification and enable creative destruction.
- India's Rs 2 trillion package aids solvent firms but must not prop up unproductive zombies like in Japan, where debt/GDP hit 280%.
- RBI's money-pumping schemes are preferable to irreversible tax cuts, as seen in post-2008 deficit spikes from 2.5% to 6.9% of GDP.
- US zombies doubled from 2013-2020 due to Fed interventions, underscoring risks of prolonged bailouts.

**By Swaminathan SA Aiyer**

* * *

Former Chief Economic Advisor Arvind Subramanian said India had moved from socialism with limited entry (for firms) to capitalism without exit. Alas, capitalism without exit is zombieland, full of companies neither dead nor alive.

The problem has been intensified by Covid-19 and lockdowns. These have mortally wounded lakhs of firms that have then been rescued by loan moratoriums, loan guarantees, and evergreening of debts. This provides immediate relief but creates ever-more zombies.

Economist Joseph Schumpeter showed that “creative destruction” explained the success of market systems. Less productive firms were killed by competition. Their liquidation and auction of assets shifted land, labour and capital into more productive firms, constantly improving national productivity and prosperity. It also opened up economic space to newcomers.

The rescues mounted by the government and RBI will, rightly, save fundamentally productive firms, but also, wrongly, create many zombies. The government’s Rs 2 trillion rescue package is far from excessive. I have repeatedly urged higher deficit financing to help those in need. But I am equally clear that this orgy of deficit financing and loan waivers must be reversed next year.

Experience shows it is easy to open the fiscal and monetary taps but difficult to shut them later. The big tax cuts of 2008-09 raised the Centre’s fiscal deficit from 2.5% of GDP to 6.9%. This was worthwhile in a Great Recession. But it proved politically difficult to raise the taxes again to cut deficits. Political competition in freebies and subsidies kept the fiscal deficit high for a decade. Government investment was squeezed instead of soaring. No wonder the economy was slowing for more than a year even before Covid.

The best example of zombification causing economic stagnation is Japan. A fast-growing powerhouse till the 1980s, Japan suffered a financial crisis and recession in 1990. Rather than let companies sink, the central bank kept interest rates very low for and helped evergreen dud loans to companies. This reduced bankruptcies but created a myriad zombies. The economy revived in the 2000s when a global boom lifted all boats. But stagnation returned in the following decade of the 2010s. In desperation, the government raised deficit financing to record heights, lifting its debt/GDP ratio to a world record of 280%. Its central bank has started buying not just corporate bonds but even corporate equity to stimulate growth. This policy will, if continued for many years, make the central bank the top shareholder of major companies, an unwitting nationalisation. Even so Japan’s growth remains stubbornly low because of zombification.

Europe has gone in a similar direction in the last decade. The European Central Bank has printed enormous sums to buy bonds of sinking companies and countries. This has helped debt-ridden Greece and Italy survive but slowed European growth. Just as growth seemed to be reviving, Covid has sunk all boats.

The US has been the most dynamic of developed countries, but it too slowed considerably in the 2010s. The Fed printed trillions of dollars to keep the economy going. The result was the proliferation of companies living on rising borrowings rather than profits. The Fed began tightening money in the last two years ago, but the pandemic has forced it to return to printing money on a record scale, and even buying junk bonds. This will increase zombification. Deutsche Bank Securities estimates zombie companies in the USA have doubled in number between 2013 and 2020, from almost zero in 1990 when the Fed was more conservative.

India’s rescue package has been among the most miserly, insufficient to relieve immediate distress but controlling longer-term fiscal deficits and debt. Wisely, the stimulus has come mainly not from tax cuts that are difficult to reverse, but from RBI money-pumping schemes that are easier to reverse. Along with reversal, tough measures will be needed next year to avoid zombification.

*Read the rest of the article [here](http://swaminomics.org/rescue-solvent-companies-but-kill-off-zombies/). This article was originally published on the Times of India website on 28th of June 2020.*

Read more: [S Ambirajan’s forgotten classic \`A Grammar of Indian Planning (1959)’](https://spontaneousorder.in/s-ambirajans-forgotten-classic-a-grammar-of-indian-planning-1959/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## SO Musings: The US-India Alignment in Cold War

Original: https://www.spontaneousorder.in/p/so-musings-in-name-of-freedom-the-us-india-alignment-in-cold-war

Author: Spontaneous Order

Published: 2020-06-26T15:59:40.000Z

Topics: non-alignment, india-china-war, us-india-relations, indian-liberals

> The Indian defeat in the 1962 border war with China not only resulted in loss of territory, but also raised questions about the foreign policy conduct of India’s first Prime Minister Jawaharlal Nehru.

**Summary:**

The post reflects on the 1962 India-China border war, which exposed flaws in Jawaharlal Nehru's Non-Alignment policy, interpreted by revisionist scholars as hedging and criticized by Indian liberals for enabling communist threats from China and Russia. Indian liberals, averse to communism and valuing shared democratic credentials with the US, advocated closer alignment with the US-led bloc, especially after Anglo-American military support contrasted with the Soviet Union's muted response and the Non-Aligned Movement's ineffectiveness. The featured editorial from the December 15, 1962, issue of Indian Libertarian magazine warns of Chinese expansionism through Himalayan passes, from Karakoram to Tawang and Walong in NEFA, portraying Tibet as a Chinese colony after expelling the Dalai Lama in 1960. It urges India to leverage China's Tibet problem, reject deceptive cease-fire proposals, and fully implement military agreements with the US and UK by unambiguously committing to democracy against totalitarianism and colonialism. This shift, the editorial argues, would secure Western aid to expel Chinese invaders, neutralize Pakistan's threats fueled by anti-India communalism, and position India as Southeast Asia's defender of freedom, as prophesied by Aurobindo Ghosh in 1950, ultimately resolving military and spiritual crises through classical-liberal realism.

**Key points:**

- Nehru's Non-Alignment policy left India vulnerable to Chinese invasion and isolated it from effective allies.
- Indian liberals pushed for US-India alignment based on anti-communism, shared democracy, and Cold War realities.
- The 1962 Indian Libertarian editorial demands exploiting China's Tibet occupation and rejecting cease-fire traps to consolidate defenses.
- India must publicly affirm faith in freedom and democracy to gain full US-UK military and economic support against China and Pakistan.
- Rethinking foreign policy would enable India to defend Southeast Asian freedom and resolve the Kashmir issue.

**By Spontaneous Order**

* * *

*The Indian defeat in the 1962 border war with China not only resulted in loss of territory, but also raised questions about the foreign policy conduct of India’s first Prime Minister Jawaharlal Nehru.* 

*Nehru’s formulation of Non-Alignment, which was couched in the language of third block neutrality, was interpreted as hedging by revisionist scholars, and came under intense criticism.* 

*Indian liberals, a minor but vocal force of public opinion, were highly sceptical of Nehru’s neutral posturing and instead, advocated closer alignment with the US-led block. For Indian liberals, such posturing made sense given their own deep aversion to both the Chinese and Russian communism, the shared democratic credentials of India and US and with the benefit of hindsight, the possibility of allying with the winning side in the Cold War.* 

*The muted Soviet response, hapless Non-Aligned Movement (NAM) posturing, and the Anglo-American promise and delivery of military support in the crucial moments of 1962, seemed to vindicate Indian liberals, even if temporarily.*

*Produced below is the editorial from the 15th December 1962, issue of the* Indian Libertarian *magazine, which warns of the dangers of Chinese expansionism, suggests Indian leveraging of China’s Tibet problem, and argues for closer US-India alignment based on clear headed political realism.*

1962 will go down in history as a memorable year which, for the first time, witnessed the invasion of India by foreign hordes through the Himalayan passes. The impregnability and inviolability of India’s Himalayan borders have now proved to be a myth. Beyond the Himalayas, stretches today not the sacred land of the Lamas, but the Tibetan colony of the Chinese Red bandits who drove The Dalai Lama and his patriotic followers out of their motherland in 1960 and are now busy rooting out the time-hallowed Tibetan culture and civilisation and implanting there in its stead their miserable and despicable communist faith and their crude values of terror, deceit and fraud. No longer does India enjoy the centuries old peaceful and happy neighbourly relations with Tibet. The Red enemy from China is now not only at India’s Northern gates but he has also forcibly broken them open and occupied a strategically important position within India’s own precincts. Having accomplished this feat in one grand stride, he is now using all his communist wiles to lull India into a false sense of security so that he might be enabled to consolidate his position there.

This, in short, is what the ‘Cease-Fire’ proposals of China amount to. China will never willingly relinquish unless forced to do so, her control of all the passes in the Himalayas right up from the Karakoram Pass near-about Ladakh in the North West, to Tawang and Walong in the NEFA region in the North East and the adjoining areas. She still reserves to herself by her cease-fire proposals, the right of a conqueror to re-occupy the proposed No Man’s Land (which, in fact, belongs to India) in case Nehru’s Government proves too intractable, pugnacious and defiant. She also wants some respite from her adventurist military operation in this region just to consolidate her ill-gotten gains and further tighten her grip of the Himalayan passes so as to be able to dominate and mould as suits her liking, India’s internal life, political, social and economic, by ever pointing out a loaded gun at her from these northern heights.

To isolate India from her neighbours, China is cleverly wooing Pakistan, which is reeking, from its very birth, with intense communal and religious hatred for India. Communist intransigence of China and communal fanaticism of Pakistan may well come together as they have done. For they have one thing in common. Both detest the secular democratic spirit of India. But Pakistan will do well to remember that the day is not far off when she will have to pay dearly for such ill-conceived romantic adventure with China as India has done at a heavy cost.

In this situation, India finds herself between the devil of China on the one hand and the deep sea of Pakistan on the other. Her leadership is at bay. It finds it hard to wriggle itself out of the ties and attachments for communist countries, fostered and strengthened over a number of years by its very ‘Non-Alignment’ policies. The leaders including Mr Nehru are now sincerely wanting to hurl back the Chinese invaders from our soil and for that purpose, have entered into military agreements with USA and Britain. But some mysterious forces seem to hold them back from going ahead with the full implementation of these agreements. The probable reason is that the ardent desire so long entertained by our leaders to carve out a distinctive kingdom of socialist pattern in India has drawn them irresistibly closer to the Communist bloc than to the Democratic bloc, despite India’s neutrality. It seems that they are not yet able to outlive this past even when the logic of Sino-Indian war has made them realise the stern reality of a world-wide titanic struggle proceeding between the forces of Red slavery and those of democratic freedom. They are now casting, however, a wishful look towards the Western nations for military aid and financial help in this hour of peril. The tragedy of the situation is that in the absence of a clear assurance forthcoming from India that she, as a genuinely non-aligned but democratic country, would always stand against totalitarianism and colonialism, wherever found, either in the old colonies of Western nations or the new colonies held by Russia and China, USA and UK willy-nilly have to carry on with a dubious ally like Pakistan in this region of South Asia. If only India should prove her bona-fides in regard to her faith in democratic freedom, all her difficulties with China and Pakistan would vanish into thin air. India would then be in a position not only to fight successfully the Chinese invaders but also to effectively counter and neutralise Pakistan’s capacity for mischief and trouble.

But all this would be impossible without a furious rethinking on the part of our leaders of India’s foreign policy. Mr Nehru would then be not justified in making a fine metaphysical distinction after the manner of a Vedantin, between the ‘Maya’ (illusion) of Chinese chauvinism and the ‘Parabrahma’ (the Supreme Reality) of Communist Vedantism, as he did the other day. He would then have to rally the whole nation behind him not only to throw out the Chinese from the Indian soil, but also to fulfil the positive and inspiring ideal of preserving India’s Free Way of Living now menaced by the twentieth century Red Napoleonism of China. 

He would have also to dispel from the minds of the Western nations, the fears and suspicions that India’s Non-Alignment is not a mere way of escape from shouldering the onerous responsibility devolving on her as a Democracy, to fight relentlessly for saving Freedom and Democracy from world communism. 

In that event, India would have to play the special role of the Defender of Freedom of all South-East Asia- a role assigned to India by the prophet of Indian nationalism, Shri Aurobindo Ghosh as far back as 1950, with rare prophetic vision and political insight.

Thus if our leadership should free itself from the political and ideological cobwebs that have polluted its mind and follow the straight – and may be even narrow- path to a fuller and richer democratic life, Western countries, which have proved themselves to be India’s real friends in the hour of her need, will do everything in their power to replenish her military strength and augment her economic resources and help her solve the knotty Kashmir problem. 

Thus, on a proper analysis of the relation of forces in the East and the West, it will be found that India finds herself in the present delicate situation as a result of her past misguided policies and ideological aberrations. It is, therefore, high time that India made a clear and unambiguous confession of her unflinching faith in Freedom and Democracy, which went into the very framing of the Indian constitution. The spiritual crisis she is passing through is no less great than her military crisis. In fact, the former has aggravated the latter. Let India make a wise and deliberate choice here and now and “Seek First the Kingdom of Freedom”. And it is certain as anything that within a short time ‘All Other Things Will be Added unto Her’ from within and from without and she will come triumphantly out of her present trials and travails.           

  
*The original text can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=300361867.pdf).*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## A Libertarian’s View of the Corona-19 Pandemic

Original: https://www.spontaneousorder.in/p/a-libertarians-view-of-the-corona-19-pandemic

Author: Spontaneous Order

Published: 2020-06-25T13:07:23.000Z

Topics: agricultural-reforms, remote-work, online-education, covid-19

> It has been almost three months since the first lockdown was announced in India. During this period, we have been made aware of the frailties of our world and how much further we need to invest in healthcare, social security and all matters related. Adm..

**Summary:**

From a libertarian perspective, the COVID-19 pandemic in India, despite its toll on lives and livelihoods, reveals silver linings through market-oriented reforms and adaptations. Key among them are amendments to the Agricultural Produce Market Committee (APMC) Act and Essential Commodities Act (ECA) 1955, freeing farmers from decades of license raj constraints to sell produce in chosen markets at preferred prices, empowering them and boosting agricultural business expansion. The lockdown has accelerated businesses' shift online, proving emails suffice for most meetings, slashing office space costs, and normalizing remote work, which expands hiring beyond geographic limits—e.g., Delhi talent for Bengaluru firms. While exposing India's digital divide—2017 data shows only 34% internet users (262 million urban, 109 million rural mobile), improving to 315 million urban and 35% rural growth by 2018—COVID harms primary education but transforms higher education positively. Elite universities face hesitancy over campus returns, prompting innovative online delivery and predicted tech-university partnerships like MIT@Google. Overall, libertarians urge focusing on these autonomy-enhancing changes amid uncertainty to counter pessimism.

**Key points:**

- Amendments to APMC Act and ECA 1955 liberate farmers from license raj, allowing market choice and price freedom.
- Lockdown forces businesses online, validating remote work and remote hiring to tap wider talent pools.
- Digital divide worsens primary education but drives higher education toward online innovations and elite tech partnerships.

**By Swati Singh**

* * *

It has been almost three months since the first lockdown was announced in India. During this period, we have been made aware of the frailties of our world and how much further we need to invest in healthcare, social security and all matters related. Admittedly, the impact of the pandemic in terms of loss of lives and livelihood has been great. 

However, a libertarian’s view of the world must necessarily be different. Despite the odds, there are a few silver linings that should gladden the hearts and go some way in removing the cobwebs of doubts and pessimism.    

**Farmers are a bit happier**

We witnessed two long-overdue policy reforms in India’s agricultural sector. The *Agricultural Produce Market Committee* (*APMC) Act* and the *Essential Commodities Act (ECA) 1955,* were amended recently to give more autonomy to the farmers to sell their produce in a market of their choice, at a price that they deemed fit. In the long run, this will have an extremely positive impact on the empowerment of farmers and on their capacity to expand businesses. They have finally been freed from the shackles of the *license raj* that has held the agricultural sector in its vice-like grip for several decades now. Big win!

**More Businesses can move online now**

The lockdown has, willy-nilly, forced businesses to move online. It has proved on ground that most meetings can, in fact, be conducted on emails. The IT sector and many other industries are either already going through or are in the process of doing so, since they’ve now realised – albeit belatedly – that they don’t need to waste precious money on office space. A consequent realisation has dawned, namely that a lot of jobs can be done from home, so firms will now be more willing to hire talent that is not necessarily in the proximity of physical office space. Result: opportunities will increase. It could well be possible that to work for, say, a Bengaluru-based company, being based in Bengaluru does not have to be a criteria. Sitting in Delhi and working from home would just be fine – in fact, it could well become an accepted norm.

**Higher Education Landscape is Going to Change for the Better**

COVID-19 has, inevitably, exposed the harsh realities of India’s digital divide. At the time when the pandemic broke out, the government casually asked schools to move online without addressing the real issue at stake.

According to 2017 figures, though India is the second-highest internet consumer in the world, the actual population using this facility is only 34%. For the rest, access to the internet still remains a luxury. About 262 million mobile internet users live in urban communities, and 109 million in rural areas. Even though it needs to be said that by 2018, the figures have changed substantially. While internet users grew by 7% in urban India, reaching 315 million users in 2018, digital adoption is now being propelled by rural India, registering a 35 per cent growth in internet users over the past year, according to market research agency, Kantar IMRB.  Thanks to this divide, many students in India have not heard a word from their schools since the lockdown began, according to the digital platform, The Print. In other words, while the conditions of lower or primary education in India have possibly taken a turn for the worse due to COVID-19, things are looking up for higher education. 

It has put prominent universities, who boast of their state-of-the-art infrastructure, in a bit of a quandary. Despite their modern infrastructure, it is quite likely that students will now be a little wary of going back to campus. With people hesitant to travel, merely classy infrastructure may not be enough of an attraction. Universities are now thinking of innovative ways to deliver education. Scott Galloway, Marketing Professor at NYU Stern School of Business, predicts that the post-pandemic world will entail partnerships between the largest tech companies and elite universities. So, don’t be too surprised if you see *MIT@Google*, *iStanford* or *HarvardXFacebook* in the future ([James D Walsh, NY Mag](https://nymag-com.cdn.ampproject.org/c/s/nymag.com/intelligencer/amp/2020/05/scott-galloway-future-of-college.html)). Moreover, students across the world will be able to reap the benefits of quality online higher education online.

In these times of uncertainty, it’s easy to feel pessimistic about the state of affairs. Professionals are constantly worried about losing their jobs, young graduates are anxious about finding them, while students are concerned about not getting their degrees on time. These are truly extraordinary times, where insecurities are, increasingly, making their presence felt. But there is little point in getting bogged down in tensions. Some positivity, despite the dark clouds, could go a long way in lifting our spirits, even if a tad bit!

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## S Ambirajan – the forgotten liberal political economist (1936-2001)

Original: https://www.spontaneousorder.in/p/s-ambirajan-the-forgotten-liberal-political-economist-1936-2001

Author: Spontaneous Order

Published: 2020-06-23T17:07:30.000Z

Topics: classical-liberalism, indian-economic-history, political-economy, decentralized-planning

> In the twentieth century, India produced many worthy scholars who mastered the art of political economics. Those who specialised in political economics, were well known both in the world of academia and policy-making – with a few caveats thrown in. Doma

**Summary:**

Professor S Ambirajan (1936-2001) exemplifies the overlooked classical-liberal economists in twentieth-century India, whose opposition to centralized planning and advocacy for individual freedom, private property rights, decentralized planning, and economic freedom for enterprises to create wealth and reduce poverty marginalized them amid the dominance of socialist and communist thinkers favored in academia and policy. A first-generation post-1947 economist, he earned BA Hons (1955), MA (1957), and PhD (1961) from Andhra University, followed by a PhD (1962) from the University of Manchester on 'Economic Ideas and Indian Economic Policies in the Nineteenth Century.' His debut book, 'A Grammar of Indian Planning' (1959), critiqued Jawaharlal Nehru's centralized planning, citing Austrian economists Ludwig von Mises and F.A. Hayek, and liberal V.S. Srinivasa Sastri. Ambirajan authored over two dozen books, including classics like 'Political Economy and Monetary Management: India, 1766-1914' (1984), and hundreds of articles in journals like Economic and Political Weekly, The Hindu, and The Economic Times. He taught at University of Queensland (1964-1966), University of New South Wales (1966-1981), IIT Madras (1981-1996, as Head), and Madras School of Economics. Despite international acclaim as the 'Compassionate Economist,' his works found greater appreciation abroad than in India, where sobriety, facts, and reason in public discourse were sidelined for emotion and ideology. His legacy endures through the annual Dr S Ambirajan Memorial Lecture since 2002.

**Key points:**

- Ambirajan vehemently opposed Nehru's centralized planning in his 1959 book 'A Grammar of Indian Planning,' drawing on Mises, Hayek, and Sastri to highlight its impracticalities in India.
- He championed individual freedom, private property rights, decentralized planning, and government focus on durable capital for long-term growth over short-term vested interests.
- His prolific output includes over two dozen books on Indian economic history and policy, such as 'Political Economy and Monetary Management: India, 1766-1914' (1984), praised as classics by liberal economists like P.R. Brahmananda.
- Ambirajan's scholarly works received more recognition internationally than in India, where classical-liberal views were politically incorrect amid socialist dominance.

**By Chandrasekaran Balakrishnan**

* * *

In the twentieth century, India produced many worthy scholars who mastered the art of political economics. Those who specialised in political economics, were well known both in the world of academia and policy-making – with a few caveats thrown in. Domain knowledge was not enough; they needed to be ideologically connected, either as a socialist or as a communist, who appreciated in entirety, centralized planning in independent India.  

There were outstanding academicians and scholars whose formidable achievements and persuasive thoughts were overlooked both in the academia and among policymakers because they were classical liberals and pragmatic thinkers – in other words, politically incorrect. Going against the grain, these liberals strongly opposed centralized planning and warned political parties against adventurism instead of adopting a pragmatic approach.

Professor Srinivasa Ambirajan was one such great scholar and economist, whose path-breaking work won him national fame and international accolades. A first-generation economist after 1947, he wrote hundreds of scholarly articles in internationally reputed journals, earning the sobriquet of \`Compassionate Economist’. 

Noted Prof P R Brahmananda, doyen of Indian economics: “Dr. Ambirajan’s published works were in the area of monetary history and in the history of policy-making, especially in India. His work on the political economy of monetary management during the British rule in India has become a classic.” That’s high praise coming from one of the foremost liberal economists of his time. 

S Ambirajan was born in 1936 and schooled at the Ramasesha Iyer School, Pattamadai, Tirunelveli district in Tamil Nadu. He studied at St Antony’s School, Visakhapatnam, Andhra Pradesh, completing his Intermediate in Arts at Mrs A V N College there. His father, Prof K R Srinivasa Iyengar, Vice-Chancellor of Andhra University in 1966, was a great scholar and a legendary figure in Indian English literature.  

In 1955, Ambirajan joined B.A. (Hons) in Economics, completing his Masters in the same discipline in 1957, followed by a Ph.D. in Economics (1961) from the Andhra University. That was followed by another Ph.D. at the University of Manchester, England, where he held the prestigious Bank of England Houblon-Norman Research Fellowship and the Hallsworth Research Fellowship with distinction. In 1962, he completed a highly rated degree on *“Economic Ideas and Indian Economic Policies in the Nineteenth Century.”* 

The economist was equally at ease in Tamil, Telugu, Kannada and Sanskrit languages, quoting fluently from any of them. For many decades, he championed individual freedom, private property rights, decentralized planning and economic freedom for free enterprises to create wealth and reduce poverty and hunger. He believed that government expenditure for building durable capital should be the focus of any welfare government to strive for long-term economic growth and thereby improve peoples’ standards of living rather than indulging in maneuvers over vested interests and short-term goals. According to him, “public discourse on policy should be defined by sobriety, facts and reason, and not by emotion and abuse”.

Prof Ambirajan was a prolific writer for over four decades and published more than two dozen scholarly books and monographs, among other works, which were appreciated among renowned scholars across the world. He wrote hundreds of articles and columns in *The Hindu* and *The Economic Times* for several years. Sad to say, but his scholarly works have found more takers abroad than in his own country or state, where his papers have not been accorded the respect they deserve. 

He began his teaching career at the Department of Economics, University of Queensland, Brisbane, Australia, where he instructed from 1964-1966. Then he moved to the Department of Economics, University of New South Wales, Sydney, where he taught for 15 years from 1966-1981. Later, he joined as Senior Lecturer and was Associate Professor in Economics by the time he left the University of New South Wales. 

Back home, Ambirajan was Professor of Economics at the Department of Humanities and Social Sciences at IIT Madras from 1981 to 1996, including a stint as Head of the Department. From 1996, he was a Visiting Professor of Economics at the Madras School of Economics, which he also helped to build.  

While pursuing his first Ph.D. in economics at the Andhra University, he wrote his first book *“A Grammar of Indian Planning”* in 1959 and vehemently criticized the centralized planning adopted by India’s first Prime Minister, Jawaharlal Nehru. Interestingly, he premised the arguments against centralized planning by quoting the works of Austrian economists, Ludwig Von Mises and F A Hayek. He also elaborated on the impracticalities of centralized planning in the context of India, as explained by liberal scholar V S Srinivasa Sastri.

Ambirajan’s scholarly range covered a broad canvas: economic history and policy in India, classical economists’ treatises and their theories, policies and its impacts on British administration in India, tools of economic analysis and its relevance, taxation in corporate businesses, issues of public policy and challenges faced by political class vis-à-vis professional economists and social scientists, etc. Many of his books were published as multi-editions over several decades because of his contextual prophecies, content and method of analysis with facts and sound reasoning minus ideological biases. 

His major books and chapters in internationally edited volumes are a handful: *Malthus and Classical Economics (1959),* *The Taxation of Corporate Income in India (1964),* *Economic Ideas and Indian Economic Policies in the Nineteenth Century (1964), Laissez Faire in Madras (1965), Economic Ideas and Economic Policy in British India (1967),* *Classical Economists on Economic Development and Its Impact on British-Indian Administration in the Nineteenth Century (1970), Classical Political Economy and British Policy in India (1978),* *The Engineer as Economist (1979), Political Economy and Monetary Management: India, 1766-1914 (1984), India and Indonesia from the 1920s to the 1950s: The Origins of Planning (1986), Economic Wisdom in Ancient Tamil Society (1989), The Delayed Emergence of Econometrics as a Separate Discipline (1989), Economic Wisdom in Ancient Tamil Society: The Acquisition and Use of Wealth in Ancient Tamil Literature (1990), The Professionalization of Economics in India (1996), The Post-1945 Internationalization of Economics: History of Political Economy Annual Supplement (1997), The Concepts of Happiness, Ethics, and Economic Values in Ancient Economic Thought (1997), Good People, Bad Times: Views from Periphery (1998)* and  *Economic Thinking of Dadabhai Naoroji (2001).* He also wrote hundreds of scholarly articles in the *Economic and Political Weekly Journal,* besides numerous book reviews. 

In 1999, Prof Ambirajan delivered the B R Ambedkar Memorial Lecture at the University of Madras, where he provided an in-depth analysis of “Ambedkar’s Contributions to Indian Economics” by revisiting the original economics writings of the Dalit leader. Which is no mean contribution considering that even today, only a handful of scholars can understand Ambedkar’s economic thought that are relevant to contemporary economic situations. He expressed his anguish that Ambedkar has been treated merely as a \`Dalit’ leader.  

Former RBI Governor Dr C Rangarajan had asked Prof Ambirajan to write the third volume of the History of the RBI for the period from 1966 to early 1981. Due to the great scholar’s sudden demise, this enterprise was finally edited and concluded by other scholars. He passed away on February 4, 2001, in Chennai at the not-too-old age of 65. 

Since 2002, the Institute for Economic Education and Public Expenditure Round Table, Chennai, organises the Dr S Ambirajan Memorial Lecture delivered by eminent scholars in different fields, but relevant to the great erudition and thoughts of Prof Ambirajan.

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [Boycotting Chinese goods: a lose-lose situation](https://spontaneousorder.in/boycotting-chinese-goods-a-lose-lose-situation/)

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## Boycotting Chinese goods: a lose-lose situation

Original: https://www.spontaneousorder.in/p/boycotting-chinese-goods-a-lose-lose-situation

Author: Spontaneous Order

Published: 2020-06-22T18:16:41.000Z

Topics: free-trade, india-china-trade, trade-deficit, supply-chains

> “Ever since Adam Smith,” noted Milton Friedman in the Hoover Digest in October 1997, “there has been virtual unanimity among economists, whatever their ideological position on other issues, that international free trade is in the best interests of t

**Summary:**

From a classical-liberal viewpoint echoing Milton Friedman and Adam Smith, boycotting Chinese goods amid Sino-India tensions is a lose-lose proposition that ignores the near-unanimity among economists favoring free trade. India, as a consumer economy, relies heavily on China as the world's manufacturing hub: China accounts for 11.8% of India's imports (vs. 3% exports), yielding a $3.3 billion monthly trade deficit in February 2020; Chinese investments exceed $26 billion, funding 18 of 30 Indian unicorns like Paytm and Byju's; Chinese firms dominate 66% of India's $8 billion smartphone market, with Xiaomi manufacturing 95% locally under 'Make in India'. Critical dependencies include 90% of solar equipment imports (valued at $3.41 billion in 2017-18), 80% of antibiotics, and key pharma acquisitions like Fosun's $1.1 billion stake in Gland Pharma. Severing ties would spike production costs, hurt consumers with pricier goods, disrupt supply chains, exacerbate unemployment, and violate WTO rules against full import bans. Instead, India must reduce its deficit by boosting domestic manufacturing competitiveness against China's subsidized, low-cost production, leveraging comparative advantages rather than protectionist retribution.

**Key points:**

- India's economy is deeply intertwined with China, importing 11.8% of goods while exporting only 3%, creating a $3.3 billion monthly trade deficit.
- Chinese investments over $26 billion fund 18 of 30 Indian unicorns and control 66% of the smartphone market, with local manufacturing creating jobs.
- Boycotting would disrupt vital imports like 80% of antibiotics, 90% of solar equipment, raising costs and harming sectors from health to renewables.
- Free trade principles require India to specialize in comparative advantages and strengthen manufacturing to compete, rather than impose impractical bans barred by WTO rules.

**By Ranjit Bhushan**

* * *

“Ever since Adam Smith,” noted Milton Friedman in the *Hoover Digest* in October 1997, “there has been virtual unanimity among economists, whatever their ideological position on other issues, that international free trade is in the best interests of trading countries and of the world.” 

These stirring, insightful lines hold good today, even when applied to the context of Sino-India economic relations, now under considerable strain. As a populist political statement, boycotting Chinese goods or snapping trade ties with China may sound like a vengeful theme, given the violent incidents on the night of June 15 at Galwan Valley, and the current ugly mood of the Indian public seeking retribution. The economic fallout of such an action, however, is altogether too drastic to envisage.   

Such a proposition is not just difficult to follow but is fraught with consequences that need to be thought out right till the end. India, a consumer and service-based economy, can ill-afford to severe ties with a manufacturing hub like China. 

In the last three decades, as China has sharpened its manufacturing prowess, becoming the ‘world’s factory’, it has simultaneously developed a complex mesh of internal supply chains and interoperability that makes relocation of industries out of that country very difficult. Global supply-chain management is defined as the distribution of goods and services throughout transnational companies’ global network to maximise profit and minimise waste. China’s grip on the system is so strong that any which way, it has become the origin and destination for all finished products! 

In a pithy observation, the *International Trade Law* in its third edition in 2016, observed that “Countries do better when they concentrate on producing those things that they are relatively better at making and trade for everything else.”

China is one of India’s largest trading partners. For the period between April 2019 and February this year, it accounted for 11.8% of India’s total imports. However, India’s total exports to that country was a mere 3%. This trade deficit with China, also a major contributor to India’s overall trade deficit, is one of the world’s biggest between the two nations. The deficit with China stood at $3.3 billion in February, a 13% rise from the year-ago period. This is even as India’s overall trade deficit remained flat from a year ago at $9.8 billion, as per the Ministry of Commerce’s data.

Despite the total value of India’s exports growing by nearly half between 2010 and 2019, the sum going to China shrank 14% over the period, deepening a trade deficit that’s fuelling India’s nationalistic turn. 

As per one Brookings India report, the total amount of current and planned Chinese investment in India has crossed $26 billion or around Rs 1,98,000 crore. China-based companies are also stepping up their investments in Indian companies, including start-ups, the report said. The numbers reveal India’s heavy reliance on Chinese imports and any disruption of trade ties between the two countries will substantially hurt Indian businesses.

This imbalance could be addressed if India opens its oil and energy sector to Chinese investment, but that is unlikely to happen anytime soon. 

The boycott call goes beyond mere low-cost artefacts of everyday use, such as they exist in popular imagination – toys, *bindis* and crackers. It has major ramifications for the Indian economy and is almost certain to impact the import of capital goods, machinery and electricals, chemicals, as well as intermediate and consumer goods. These imports are crucial for industries in India to manufacture goods, medicines as well as gadgets.

With raw material being exported to China, the neighbouring country can manufacture and export its goods at such low prices that prohibiting Chinese goods would mean fewer cheap goods for consumers in India. A reduction in the imports of inexpensive capital goods would also push up production costs, making merchandise costlier. 

Interestingly, while India has declined to be associated with China’s Belt and Road Initiative (BRI) for heavyweight projects, China has quietly created a significant place for itself in India in the last five years – in the technology domain. Unable to persuade India to sign on the BRI, China has entered the Indian market through venture investments in start-ups and penetrated the online ecosystem with its popular smartphones and their applications. 

Chinese funding to Indian tech start-ups is making an impact disproportionate to its value, given the deepening penetration of technology across sectors in India. TikTok, owned by ByteDance, is already one of the most popular apps in India, overtaking YouTube; Xiaomi handsets are bigger than Samsung smartphones and Huawei routers are widely used. (Gateway House’s ‘Chinese Investments in India’)

According to this report, these are investments made by nearly two dozen Chinese tech companies and funds, led by giants like Alibaba, ByteDance and Tencent, which have funded 92 Indian start-ups, including unicorns such as Paytm, Byju’s, Oyo and Ola.

The findings are remarkable: 18 of the 30 Indian unicorns have a Chinese investor. This means that China is nicely embedded in the Indian economy, and the technology ecosystem that influences it. Unlike a port or a railway line, these are invisible assets in small sizes – rarely over $100 million – and made by the private sector, which doesn’t cause immediate alarm.

With closely enmeshed businesses, separation from China is going to entail huge costs. Since India imports well above 60% of electronic products and components from China, a snapping of economic ties would impact the prices of electrical gadgets and smartphones. Chinese companies such as Xiaomi, Oppo, Vivo and OnePlus nearly control over 66% of India’s over $8 billion smartphone market, as of the first quarter of 2019. (Counterpoint: “India Smartphone Market Share: By Quarter”)

There is increased penetration of smartphones and apps, like TikTok, especially in the country’s Tier-II and Tier-III cities. The potential to influence Indian minds is massive. By 2024, India’s smartphone users are expected to double to 1.25 billion from 610 million in 2018-9.

According to International Data Cooperation, India’s emergence as the biggest overseas market for Chinese mobile phone companies is one of the most significant developments in China’s relations with India over the past five years. The India sales of those top Chinese smartphone brands totalled more than $16 billion in 2019.

The Chinese smartphone makers have already built factories and created jobs in India. Interestingly, these smartphone makers have embraced Prime Minister Narendra Modi’s “Make in India” programme with a zeal. Xiaomi, for instance, locally manufactures 95 per cent of the phones it sells in India. And hence, any adverse announcements forcing Chinese businesses to shut shop in India will add to the burgeoning unemployment rates in India. 

In the power sector, India is heavily dependent on China when it comes to achieving its renewable energy target. India’s import dependence for meeting its solar equipment demand was over 90% in the past three financial years, Power and New & Renewable Energy Minister, R K Singh, told the Lok Sabha last year. Most of these imports were from China. The value of solar cells/photovoltaic cells whether assembled in module/panel, imported from China jumped to $3.41 billion in 2017-18 from $596.73 million in 2013-14, he informed Parliament.  

Key sectors of the Indian economy, like health, are critically dependent upon China. In 2018-19, China supplied a whopping 80% of the antibiotics imported by India. In this time of a health epidemic, India can scarcely afford to let the supply of medicines take a hit. Not surprisingly, the single largest Chinese investment in India is the $1.1 billion [acquisition of Gland Pharma by Fosun](https://health.economictimes.indiatimes.com/news/pharma/fosun-pharma-acquires-74-stake-in-gland-pharma-for-1-09-billion/60948554) in 2018. This accounted for 17.7% of all Chinese FDI into India.

While China’s investment into the auto industry is not that strong at $575 million, it has been quick to spot another early opportunity in India – the potential shift to electric mobility, where China has expertise. India is the world’s fifth-largest auto market; the sector is the country’s most robust and globalised export and remains a bellwether for the economy. China’s BYD has been pushing its electric buses in India, with limited success. In traditional autos, which is 99% of the market, China is using distressed, global auto brands like Volvo and MG, which it acquired to enter the Indian market.  

To be able to boycott Chinese goods, India needs to reduce its trade deficit with China and strengthen its manufacturing sector to be able to produce goods back home, providing cheaper products to customers.

That, however, is easier said than done. The cost of production of Indian manufacturers is high due to expensive raw material, old worn-out techniques of production and higher fixed cost. As a result, Indian products cannot compete with Chinese products not just at the global level, but even in India.   

And not without reason. Notes the *Encyclopaedia Britannica* in its chapter on the Chinese economy: “The development of industry has been given considerable attention since the advent of the communist regime. Overall industrial output often has grown at an annual rate of more than 10%, and China’s industrial workforce probably exceeds the combined total for all other developing countries.” 

The low price of Chinese products is a big attraction for Indian buyers. The cost of production in China is competitive due to the availability of cheap labour force and because the all-powerful manufacturing sector in the country gets a subsidy from the government, which reduces the cost of production of goods. The result: India has turned into a hub for assembling, rather than manufacturing goods.   

Then there are wheels within wheels. Chinese funds and companies often route their investments in India through offices located in Singapore, Hong Kong, Mauritius and other safe havens. For example, Alibaba’s investment in Paytm was by Alibaba Singapore Holdings Pvt. Ltd. These don’t get recorded in India’s government data as Chinese investments. Thus, official FDI inflows from China to India do not present the full picture of Chinese investments in India. 

Can India prevent the supply of Chinese products in the Indian market? The answer is \`No’, because as per World Trade Organisation (WTO) rules, it is not possible to impose a full ban on imports from any country even if there are no diplomatic, regional and trade relations with that country.

But India has banned some Chinese products based on health and security issues. According to government data, India had prohibited Chinese mobiles that don’t have an IMEI number. China, in retaliation, had also prohibited Indian milk products, using health standards as the ruse for doing so. Under the circumstances, with businesses so enmeshed and economic stakes so high, to talk of a ban on Chinese goods is like putting the cart before the horse.

Read more: [Why Modi Must Not Repeat Nehru’s Mistakes on China](https://spontaneousorder.in/why-modi-must-not-repeat-nehrus-mistakes-on-china/)

* * *

**About Ranjit Bhushan**

Ranjit Bhushan is an independent journalist and former Nehru Fellow at Jamia Millia University. In a career spanning more than three decades, he has worked with Outlook, The Times of India, The Indian Express, the Press Trust of India, Associated Press, Financial Chronicle, and DNA. He is also the author of a book \`Maoism in India and Nepal’, published by Routledge.

## Why Modi Must Not Repeat Nehru’s Mistakes on China

Original: https://www.spontaneousorder.in/p/why-modi-must-not-repeat-nehrus-mistakes-on-china

Author: Spontaneous Order

Published: 2020-06-22T17:44:42.000Z

Topics: india-china-relations, free-trade, economic-liberalization, global-value-chains

> After 20 Indian soldiers were killed by the Chinese in a border clash, there are jingoistic screams in the media. Critics want to delink India economically from China and boycott Chinese goods. Others want to teach China a military lesson, as already ta..

**Summary:**

Swaminathan S.A. Aiyar argues that Prime Minister Modi must avoid repeating Jawaharlal Nehru's 1962 blunder of ordering the Indian Army to expel Chinese troops from disputed territory, which led to a humiliating defeat; today, China is ten times stronger economically and militarily. Jingoistic calls for military retaliation, economic delinking, or boycotting Chinese goods would be suicidal. Instead, Modi should pursue Atma-Nirbhar Bharat as self-reliance through deep integration into global value chains, not Nehru-style import substitution that stifled growth at 3.5% GDP from 1947-1980, doubling absolute poverty as population grew. Liberalization under Narasimha Rao and Vajpayee enabled 9%+ growth in the 2000s by attracting massive FDI from Samsung, Nokia, auto giants, and Fortune 500 firms in software and R&D. As a WTO member, India must apply uniform tariffs, using anti-dumping only exceptionally, to benefit from rule-based trade. Limit Chinese imports and FDI only in national security areas; otherwise, welcome them alongside others, mirroring ASEAN's strategy of alliances without boycotts amid South China Sea disputes. This classical-liberal path of openness builds a world-class economy, ending aid dependency.

**Key points:**

- Modi must reject military action against China, far stronger than in 1962 when Nehru's order led to disaster.
- Interpret Atma-Nirbhar as global value chain integration, not self-sufficiency via import substitution that caused 3.5% GDP growth and doubled poverty numbers from 1947-1980.
- Attract more FDI like Samsung and Nokia factories to replicate liberalization's 9%+ growth boom.
- Adhere to WTO rules for uniform tariffs on China, limiting restrictions to security essentials.
- Emulate ASEAN by building alliances without trade boycotts despite territorial disputes.

**By Swaminathan SA Aiyer**

* * *

After 20 Indian soldiers were killed by the Chinese in a border clash, there are jingoistic screams in the media. Critics want to delink India economically from China and boycott Chinese goods. Others want to teach China a military lesson, as already taught to Pakistan.

This would be economic and military suicide. Only morons can equate China and Pakistan militarily. Jawaharlal Nehru blundered by telling the Army to “throw out” Chinese troops in the disputed territory. The result was a military thrashing. Today China is ten times stronger in economic and military clout than in 1962. Modi will be ten times as stupid as Nehru to attempt military retaliation.

Modi’s economic policy of Atma-Nirbhar can be translated as self-sufficiency or self-reliance. This ambiguity may be deliberate. The word Atma-Nirbhar enables Modi to pacify affiliates like Swadeshi Jagran Manch (SJM) and Bharatiya Mazdoor Sangh (BMS) that love self-sufficiency. But Modi also equates Atma-Nirbhar with becoming a star in global value chains. At Davos, he lectured Trump on the need to keep world trade open. Hopefully, this dual interpretation of Atma-Nirbhar is a political manoeuvre, not confused economic thinking.

Self-sufficiency means import substitution and reducing global trade and investment. This was the policy of Nehru and Indira Gandhi and ended in economic disaster. From 1947 to 1980, GDP growth was a pathetic 3.5%. The poverty ratio did not fall while the population virtually doubled, and so the absolute number of poor virtually doubled. Narasimha Rao and Vajpayee went in the opposite direction of opening up to global trade and investment. This built the foundation for a fabulous economic boom in the 2000s, with GDP growth of over 9% for some years.

Unlike Nehru, Modi wants massive foreign investment. He has promised foreign investors benefits in taxation, cheap land and infrastructure in industrial and export-oriented corridors. Samsung and Nokia have already built major cellphone factories. All the world’s auto giants are already in India. Most Fortune 500 companies are here in offshored computer software, back-office operations and R&D. India has benefited enormously by this integration with the global economy and needs more of it.

More global value chains mean more inter-dependence in trade and investment. This is the very opposite of self-sufficiency. However, it can also be called Atma-Nirbhar in the sense of self-reliance, of creating a world-class economy that enables India to prosper and no longer seek aid and concessions as a poor developing country.

The SJM and BMS can organise a consumer movement to boycott Chinese goods. But as a WTO member, India has to offer China the same tariffs offered to all other members. In return, other WTO members cannot discriminate against India in tariffs. This rule-based trading system greatly benefits poorer countries like India. The WTO allows anti-dumping duties and phytosanitary barriers against errant Chinese companies, but these have to be exceptions, not the rule.

Increased FDI and global value chains mean more links with China, not less. China is now the biggest economy in GDP measured in purchasing power parity and the biggest exporter. It has the biggest surplus savings available for foreign investment. It is a world leader in technologies like telecom, solar energy, electric rickshaws and storage batteries. India can limit imports and FDI from China in a few areas essential for national security. In other sectors, Chinese goods and investment should be as welcome as from anywhere else.

China is now a superpower, using its might to claim more territory and influence in its neighbourhood. ASEAN countries, which together are comparable to India in size, are dismayed that China claims sovereignty over the South China Sea and Spratly and Paracel islands claimed by ASEAN countries too. ASEAN is responding by strengthening bridges with strong allies like the US and Japan, not by boycotting Chinese goods or threatening military reprisals.

*Read the rest of this article by clicking [here](http://swaminomics.org/why-modi-must-not-repeat-nehrus-mistakes-on-china/).*

*This article was originally on the Times of India website, on 21st of June, 2020.*

Read more: [SO Musings: A Democracy at War](https://spontaneousorder.in/so-musings-a-democracy-at-war/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## SO Basically- Episode 11 | Mandiyon ki Manmaani

Original: https://www.spontaneousorder.in/p/so-basically-episode-11-mandiyon-ki-manmaani

Author: Spontaneous Order

Published: 2020-06-22T17:21:47.000Z

Topics: indian-agriculture, farm-bureaucracy, liberal-reforms, pseudo-socialism

> Farmers are among the groups of people hardest hit by the lockdown. But the truth is that the rot in our agriculture sector has been plaguing the farmers long before coronavirus ever came into the picture. In this episode of #SOBasically, we dig deeper ..

**Summary:**

This promotional post for Episode 11 of SO Basically, titled 'Mandiyon ki Manmaani,' argues from a classical-liberal perspective that farmers' hardships, intensified by the lockdown, stem from longstanding rot in India's agriculture sector caused by laws that trap them in a highly bureaucratic system. It positions this as part of a broader critique of pseudo-socialism in post-Independence India, contrasting it with liberal ideas that could have transformed the country. The episode promises to delve into these restrictive laws, building on the series' exploration of historical liberal thought against bureaucratic overreach. No specific facts or numbers are provided in the post itself.

**Key points:**

- Farmers' woes predate the COVID-19 lockdown and originate from deliberate laws enforcing bureaucratic control.
- The episode examines regulations that keep Indian farmers under state clutches.
- Spontaneous Order critiques pseudo-socialism's dominance in India's political history from a classical-liberal viewpoint.

**By Spontaneous Order**

* * *

Farmers are among the groups of people hardest hit by the lockdown. But the truth is that the rot in our agriculture sector has been plaguing the farmers long before coronavirus ever came into the picture.

In this episode of [#SOBasically](https://www.youtube.com/results?search_query=%23SOBasically), we dig deeper into the laws that have deliberately kept farmers under the clutches of a highly bureaucratic system.

[Watch previous episode of SO Basically](https://spontaneousorder.in/so-basically-episode-10-angrezon-ke-zamane-ke-jailer/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Policy Talks: Dushyant Chautala on MSMEs, Jobs and Migrant Labour

Original: https://www.spontaneousorder.in/p/policy-talks-dushyant-chautala-on-msmes-jobs-and-migrant-labour

Author: Spontaneous Order

Published: 2020-06-19T18:18:54.000Z

Topics: agricultural-reforms, msme-support, migrant-labour, ease-of-doing-business

> Intro: Haryana’s dynamic Deputy Chief Minister, Dushyant Chautala, is a young man of action. He has set out to turn the Coronavirus pandemic into an opportunity by introducing some of the most far-reaching reforms in agriculture and industry. In an exha

**Summary:**

In an interview with CCS CEO Yatish Rajawat, Haryana Deputy CM Dushyant Chautala details market-oriented reforms leveraging the COVID-19 crisis to boost agriculture, MSMEs, jobs, and revenue. Haryana pioneered faster farmer payments via the 'Meri Fasal, Mera Byora' app, processing wheat worth ₹12,000 crore, transferring ₹9,000 crore to arthiyas and ₹6,200 crore directly to farmers within 10-15 days—targeting seven days—bypassing traditional delays and earning positive feedback as a step toward doubling farmers' incomes. Historic logistics saw 270+ trains evacuate 4 lakh MT wheat in 20 days. For MSMEs, district-level committees coordinate bank lending (with RBI mandating 25% to agri/MSMEs), 22 district clusters (e.g., medical in one), and an Enterprise Promotion Policy 2020-25 to attract investments like ₹7,500 crore from Amperex Technology Limited for lithium batteries and Italian food processing. Migrant labor shortages are addressed via e-passes (50,000 processed) and a forthcoming Rojgar portal for accurate unemployment data, dismissing official 43.2% April peak as unreliable. Revenue strategies include leasing HSIIDC/panchayat land, KMP railway corridor, and Hisar aviation hub, while cutting miscellaneous expenditure. Chautala emphasizes state self-reliance alongside Centre support, streamlining PDS biometrics, and Haryana's #2 Ease of Doing Business rank aiming for #1, showcasing classical-liberal reforms for enterprise and efficiency over socialism.

**Key points:**

- Haryana reformed wheat procurement payments via 'Meri Fasal, Mera Byora' app, paying farmers ₹6,200 crore within 10-15 days for the first time, targeting seven days.
- Created MSME support committees at state/district levels to boost bank lending and 22 district-specific clusters, alongside Enterprise Promotion Policy 2020-25 attracting ₹7,500 crore investments.
- Processed 50,000 e-passes for migrant workers' return and launching Rojgar portal for precise unemployment tracking, rejecting official 43.2% rate as inaccurate.
- Leasing non-cultivable land and planning infrastructure like KMP railway and Hisar aviation hub to generate 10,000 jobs per major industry and offset revenue losses from ₹22,350 crore budget.

**By Spontaneous Order**

* * *

**Intro:** Haryana’s dynamic Deputy Chief Minister, Dushyant Chautala, is a young man of action. He has set out to turn the Coronavirus pandemic into an opportunity by introducing some of the most far-reaching reforms in agriculture and industry. In an exhaustive interview with the Chief Executive Officer of the Centre for Civil Society (CSS), Yatish Rajawat, he outlines the steps taken by the state government to increase revenue, bailout MSMEs and pull the state back from the brink of a COVID-19 induced stupor.  

**Yatish Rajawat:** Wheat procurement is in full swing but the process of lifting from the *mandis* is very slow. Since the farmers are paid only when wheat reaches the godowns, their payments have been delayed by a month. What are you doing to speed up this process?

**Dushyant Chautala:** The question is very important because for the first time Haryana has changed its payment method. It was a one-way traffic with the *arthiyas* (commission agents) settling payments with the farmers. The system worked like this: *arthiyas* used to give the farmers small amounts whenever required, settling the whole payment due only after the procurement season, which lasted for one-and-a-half months or more. For the first time, a change was introduced to this system of payment by Haryana, which the central government had been pursuing for the last four years. In Haryana now, if the *arthiyas* have a settlement to conclude, the farmers can go ahead and conclude the transaction on their own. We had changed the system with the introduction of an application that provides for a processing period of two days for the *arthiyas* and another three days for them to settle the transactions and transfer money to the farmers. In the initial stages of this application, certain changes were requested by the *arthiyas* to make the process more seamless. Hence, it took us about 10 days to make the required changes to the software and the application.

But now we’re back on track at full throttle, having paid our farmers till the 13th of this month with a set target to pay the rest till the 20th. Now, if you go check the online application *“Meri Fasal, Mera Byora”* you’ll notice that till very recently, wheat worth more than about ₹12,000 crores was received. Out of which more than approximately ₹9,000 crores was transferred to the *arthiyas.* Of this amount*,* ₹6,200 crores was further transferred to the farmers. Farmers have informed me personally that their due amounts of ₹2 lakhs, ₹4 lakhs etc. are being received by them, which is a big deal for our state. For the first time in the state’s history, farmers are getting full amounts for their crop within a period of just 10 to 15 days, which will be soon brought down to seven days. This was our target and we have finally achieved it. 

Yes, there is a clause introduced by the Food Corporation of India (FCI), which states that if a farmer comes to the *mandi* to drop off wheat, the payment would not be made immediately. The farmer would first have to generate an i-form, which will permit the producer to be transferred from the *mandi* to the warehouse and once it’s been stacked up in the warehouse, the government will account for it as procured wheat. This delayed process came to our attention when we noted that four lakh metric tonnes (mt) of wheat was stored in warehouses. This is where I would like to thank the Government of India, as history was made when about 270-plus trains in a short span of 20 days, picked up the wheat product from our godowns and distributed it all across India. I believe this number would increase to about 315 trains in the next two days owing to the free distribution of foodgrain policy to the public distribution system (PDS) and non-PDS beneficiaries under the “Atma Nirbhar Bharat Abhiyan”. With this, Haryana has recorded a historic outflow of wheat by trains, i.e. approximately 19 trains sent in one day.

Usually, changes made to the system such as these are not welcomed by the people and are criticised. But, in the last 25 days, we have received positive feedback from the people, which makes me believe that this was the first step towards meeting the goal of doubling farmers’ income that the PM has been emphasizing for the past five years.

**YR:** Considering that the *arthiyas* act as middlemen between the government and the farmers that delays transactions, do you envisage a scenario in which a direct transfer of payment to the farmers is a possibility, somewhat similar to direct cash transfers that take place in schemes such as MNREGA ?

**DC:** You must understand that not all farmers are connected with the *arthiyas.* There are several cases in which the farmers prefer to deal with the agencies independently due to which I had to assign MNREGA workers to perform the tasks of lifting and stacking up wheat bags. It is easier for us to make a direct transfer of payment in cases of direct procurements. But in cases of farmers who deliver us procurements through the *arthiyas* channel, the interest of the agents, who receive a commission of 2 % for their efforts, also needs to be taken into consideration.   

**YR:** The only backward area of Haryana is Mewat district, where roughly 70,000 households are registered to be Below the Poverty Line (BPL), out of 1,92, 388 households. Mewat has also been declared a red zone. How do these families access PDS for their daily ration needs? Instead of distributing rations, has the government considered direct cash transfers?

**DC:** This decision would lie with the Central Government since it comes under the National Food Security Act, 2013 (NFSA). We don’t just provide for the BPL families, but also the Antodaya Anna Yojana (AAY) and Other Priority Household (OPH) families. Now, after the proposal made by Haryana, the Central Government has initiated the Distress Ration Token (DRT) to offer free rations to non-residents of Haryana who don’t own ration cards. To consider direct cash transfers instead of distributing rations, the NFSA itself would require an amendment, the process for which can’t be taken up by the state government. Instead, we have streamlined the distribution process using a biometric system and e-Public Distribution System (Ration Card Management System). These are major changes. Due to COVID-19 we had to shut down our contact-enabled biometric systems and we are looking to iris scanners in the future. Now, the major obstacle in our way is to bring the other states within the system’s loop. 

**YR:** There has been a mass exodus of migrant workers via Shramik trains and buses arranged by the government, as a result of which there is a severe shortage of labour especially in MSMEs, sowing and harvesting of crops and other industries that depend upon migrant workers. What steps will you take to bring these workers back?

**DC:** This is a pan India crisis. This mass movement of migrant workers has led to high unemployment rates in a number of states, leaving many of them with a labour deficit. It’s too early to talk about paddy sowing and yielding at the moment because every year after the wheat season, workers migrate back to their hometowns and then return to Haryana during the paddy season in July. So, we still have a month to determine whether they would be returning. MSME is one sector where we need to push for migrant workers to come back. We have requested other states to provide us with data of workers, who are likely to return. After the introduction of the national portal providing e-passes, the interstate movement of these workers has eased. That has brought a large number of people back to work in the construction and industrial sector, online trade and e-commerce. About 50,000 such applications have been processed by us. We have received a large number of applications to resume business, out of which 33,00,000 people have already been permitted. While permissions have been granted, it would be an impossible task for us to scrutinise the actual number of workers who are turning up for work in every factory. The one good thing that did come out of the pandemic is that we have collected sufficient data about government workers. We will be launching the Rojgar portal in the next few days, which will help the unemployed who did not get an opportunity to work with private firms.

**YR:** The lockdown has led to increased reduction in supply and demand of goods and thus the state income. What is the estimated state revenue? It was pegged at ₹22,350 crore at the beginning of the year. Considering that we have already lost out on a bulk of revenue in the first few months and with the economic crisis at hand, what is your anticipation of the state revenue and expenditure for the coming financial year?

**DC:** This again is a nation-wide crisis and yes, we are looking for alternatives to tackle this situation. We have introduced a new enterprise promotion policy, which we need to draft for the years 2020-25. It will enable bigger industries to invest in our market, who, in turn, can generate about 10,000 jobs per industry. Recently, the Italian ambassador requested a webinar to discuss the prospects of Italian food processing units investing in Haryana. We’re planning on leasing out large chunks of land under the HSIIDC instead of just selling them off to industries. We have also been talking to panchayats with more than 500 acres of non-cultivable land lying vacant that could be leased out for a period of 20 years to gain additional revenues and to generate more jobs. We have also recently signed an MOU with a Chinese company that produces lithium-ion batteries called Amperex Technology Limited (ATL). This company wants to invest ₹7,500 crore in the Sohna district. We are also planning an aviation hub in Hisar after receiving clearance from the Directorate General of Civil Aviation (DGCA). Haryana, with the help of the central government, is going to build a railway corridor along the Kundli-Manesar-Palwal (KMP) Expressway, which will, again, lead to an industrial boost in the Haryana districts surrounding Delhi. These are some of the inputs and alternatives that we will use to boost our state revenue.

**YR:** Talking about state expenditure, do you anticipate a different approach by the state government or will the central government step up its support to you? 

**DC:** I feel that the Centre does need to step in times such as these, but the states also need to individually make cuts in their respective budgets. We have decided to reduce most of our miscellaneous expenditure. We understand, however, that states need to earn their own revenues since we cannot bank wholly on the central government to fund everything.

**YC:** Many small industries facing the challenges of acquiring immediate liquidity, burdened by the inability to pay salaries and mounting labour deficit, would find it harder to get back on track as compared to the bigger industries. Is Haryana planning measures to alleviate hardships faced by MSMEs?

**DC:** Our state has created a four-member committee with two additional members at the state level and a special directorate for MSMEs. At the district level, we have asked all our deputy commissioners to create a committee with people from GM industry, HSIIDC, Labour Department, local MSME members and a lead member representing all the banks in the district. This way, there will be a push towards continuous coordination between the banks and the MSMEs. We have also extended support to the banks in the form of extra working capital as they usually tend to overlook the smaller industries and focus on larger sectors. In addition, there is a provision introduced by the central government and the Reserve Bank of India that at least 25% of all the loans need to be diverted towards the agriculture sector and MSMEs. I believe these are the few steps that can help MSMEs.

**YR:** One of the challenges faced by MSMEs is in the ease of doing business. The Union government has done a fair bit of work towards improving in that direction. Have you applied your government’s resources towards reforming the situation? 

**DC:** Yes, absolutely. I am happy to state that Haryana is in the second position in The Ease of Doing Business ranking in India and we aim to occupy the top spot this year by introducing the Enterprise Promotion Policy. For MSME sectors, we will create 22 clusters in 22 districts, which will provide the special thrust needed. For example, Ambala produces scientific equipment, Rewari manufactures copper utensils, Yamunanagar produces plywood, etc. Looking at the current COVID-19 scenario, we can appoint one district to focus on a medical cluster that will get the government’s support in the form of finance and equipment. The district could work towards production of medical equipment and utilities and safety kits such as PPES, among others. This is how we are planning to support small sector industries.

**YR:** Haryana’s unemployment rate has jumped to 18.1 percentage points, rising to 43.2% in April, which was greater than the national rate of 23.5%. Will the lockdown and pandemic affect the unemployment rate further? What are the strategies that the government is planning to prevent loss of jobs?

DC: I have never understood how such derivatives are calculated. According to our statistics, we have registered about 2,000,000 people in the industrial sector and have listed about 5,00,000 unemployed workers who had never been registered before. These are registrations made by the industrial, construction and e-commerce sectors to resume their activities and are not those enlisted with the employment exchange or Saksham Yuva. We have directed the Employment and Skill Development Department and other industries to jointly form a task force with the help of the Rojgar Portal. We are looking at making it mandatory for each Haryana resident to apply for an employee exchange number to keep track of all employees in different sectors that will help in securing accurate unemployment data. Thus, I disagree with the numbers until the aforementioned steps are taken. 

**YR:** Thank you for joining us today Dushyant *ji.* You have helped us understand how Haryana is coping with the pandemic and how it foresees the situation in the coming future. We wish all the very best in your endeavours. 

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: A Democracy at War

Original: https://www.spontaneousorder.in/p/so-musings-a-democracy-at-war

Author: Spontaneous Order

Published: 2020-06-19T15:37:13.000Z

Topics: swatantra-party, india-china-war, foreign-policy, national-security

> The recent wave of deadly clashes on the India-China border, the most violent escalation in decades, brings to mind the memory of the full-fledged war in 1962, which has left a humiliating mark on the Indian psyche. Historians have debated the factors a..

**Summary:**

The post recounts Minoo Masani's 1962 speech, as a Swatantra Party leader, critiquing Prime Minister Jawaharlal Nehru's foreign policy failures that precipitated India's humiliating defeat in the Sino-Indian War. Masani highlighted the government's misguided neutralism and appeasement of Chinese communism, including premature recognition of Mao's regime in 1949 despite Chiang Kai-shek's support for Indian independence, and instructing India's UN representative in 1950 to oppose intervention in Tibet's invasion, leading to its oppression. Opposition warnings in Parliament on December 5-6, 1950, that Tibet's fall presaged India's, were dismissed, even as Maoist propaganda boasted of planting the red flag over the Himalayas. Sarcastic about the failed Panchsheel policy—now just a Delhi road—Masani lambasted Nehru for misleading the public on border escalations. In a democracy, he argued, opposition must provide constructive criticism during crises to ensure accountability, countering Congress's labeling of critics as traitors. Swatantra advocated seizing initiative through global arms procurement, allied air support, UN peacekeeping against China, improved Pakistan ties to avoid a two-front war, and abandoning NAM neutralism, embodying a classical-liberal insistence on robust national security over naive pacifism.

**Key points:**

- Nehru's recognition of Mao in 1949 and opposition to UN intervention in Tibet's 1950 invasion exemplified appeasement that enabled Chinese aggression against India.
- Parliamentary warnings in December 1950 about Tibet as a prelude to Indian invasion were ignored by the Congress government.
- Masani stressed that democratic opposition must critique government failings in national security crises to hold leaders accountable.
- Swatantra Party proposed offensive measures including arms procurement, allied air forces, UN diplomacy, and realigning with Pakistan while ditching NAM.

**By Spontaneous Order**

* * *

*The recent wave of deadly clashes on the India-China border, the most violent escalation in decades, brings to mind the memory of the full-fledged war in 1962, which has left a humiliating mark on the Indian psyche. Historians have debated the factors at play leading to the origins of war and the weak Indian response. Even prior to the outbreak of the war in 1962, Chinese aggression along the border had a long history, which was perceptively seen as being alarming by some Indian politicians and public figures. In 1962, as the war progressed and the Indian response bungled, the voices of criticism only grew louder against the conduct of foreign policy and defence affairs, as handled by the then Prime Minister Jawaharlal Nehru and Defence Minister VK Krishna Menon. In a democratic polity, it is obvious that matters of national security in times of crisis would warrant public scrutiny of the government’s response. Among the prominent critiques highlighting the failings of the Indian government including the liberal politician and opposition leader of the Swatantra Party, Minoo Masani.*

*In a speech delivered to the Commerce Graduates’ Association, Bombay on 22nd November 1962, which was later published in the Freedom First magazine, Masani outlined failings of the Nehru government and the role of constructive criticism from the opposition even in times of national security crisis. He recounted the earlier warning signs of Chinese aggression pointed out by opposition leaders, only to be ignored by the Congress government in pursuit of NAM and Panchsheel, including the Indian state’s recognition of Mao’s government in 1949, acceptance of Chinese aggression in Tibet at the UN in 1950, and Mao’s brushing apart of Indian neutral posturing as tacit alliance with the ‘imperialist camps’. Sarcastically criticising the failed Panchsheel policy, which ‘now remains only the name of a road in Delhi’, Masani also blamed Nehru for keeping the Indian public in the dark on Chinese escalation in the northwest border region. As the AICC passed a sycophantic resolution that dubbed the critique of the PM as traitors, Masani stressed the need for critical opposition to hold the government accountable to the public and national security interests.* 

*The Swatantra response to Chinese aggression included offensive posturing to ‘snatch the initiative from the enemy’; procurement of weapons from around the globe; involvement of air forces of friendly allies to deter Chinese bombings; diplomatic manoeuvring at the UN leading to a peacekeeping intervention against the Chinese aggression; amending ties with Pakistan to avoid a two-front war in favour of focusing on the Chinese front and a shift away from the neutral posturing under the NAM.*

*Produced below is the relevant excerpt from the article.*

**Root Cause**

Now, what is our situation in India today? We are today faced with this great disaster that is overtaking our armies at the front as a result of ten years of misguided policies of neutralism and of appeasement of Chinese Communist expansionism. The root cause has been the failure to understand the nature of international communism.

In 1949, because of this, our Government rushed forward to embrace the bandit regime of Mao Tse-tung which is today attacking our country and to recognise it as the Government of China, turning its back on a loyal friend and ally, Marshal Chiang Kai-shek of the Chinese National Government, who was the only war leader to have advocated the independence of India repeatedly and publicly during the war when we were engaged in the Quit India struggle.

The second act of the drama came with the betrayal of Tibet in 1950, when the Chinese, in breach of faith with our Government, advanced their armies into Tibet. To our shame, our representative in the U.N. was instructed to tell the Security Council which was considering the appeal of the Dalai Lama for help, the kind of appeal we have been making in the last few days, that the government saw no cause for United Nations’ intervention in Tibet! The British Government readily agreed and, led by these two appeasers, the Security Council suspended discussion of the item which still remains on the order paper. The guilt of having handed over the Tibetan people to be dominated and brutally oppressed by the Chinese belongs to us and our Government.

**We Were Warned**

It was not as if there were no warnings. In Parliament on 5th and 6th December 1950, there was a big debate in Parliament and some ten speakers warned our Prime Minister and Government that, if they persisted in allowing Tibet to be overrun by the Chinese, our turn would come next; that the Chinese were in fact attacking Tibet as a first step to the attack on India. We were brushed aside as alarmists. In all seriousness, we were told that the Chinese occupation of Tibet had no relevance to the security of India!

But it was not our warnings alone that were ignored. It was also Mao Tse-tung, who had given warnings much more significant than ours. In my own speech in Parliament on that occasion, I had quoted the New China News Agency who, a few weeks earlier, had said that the day would come when “the Chinese People’s Liberation Army will hoist the Red Flag over the Himalayas.” They are very frank, these gentlemen- Hitler, Stalin, Khrushchev and Mao Tse-tung. They tell us what they are going to do, but we are so naïve that we will not believe them!  

*The full text of the article can be accessed [here](http://www.freedomfirst.in/uploads/issues/pdf/127.pdf).*

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [SV Chitti Babu, academician, educationist and reformer par excellence (1920-2020)](https://spontaneousorder.in/sv-chitti-babu-academician-educationist-and-reformer-par-excellence-1920-2020/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SV Chitti Babu, academician, educationist and reformer par excellence (1920-2020)

Original: https://www.spontaneousorder.in/p/sv-chitti-babu-academician-educationist-and-reformer-par-excellence-1920-2020

Author: Spontaneous Order

Published: 2020-06-18T12:27:29.000Z

Topics: education-reform, higher-education, school-regulation, distance-education

> India’s contemporary society is such that it scarcely pays attention to someone’s multi-decadal achievements, to one who is a doyen in many fields – unless he or she belongs to the ranks of popular politicians, cine actors, fiction writers, director

**Summary:**

SV Chitti Babu (1920-2020), a lifelong education reformer and classical-liberal policy advocate, dedicated over six decades to enhancing India's education system, particularly in Tamil Nadu, by championing equality of opportunities, functional autonomy for institutions, and talent development over rote socialization. As Vice-Chancellor of Madurai Kamaraj University (1975-1978) and Annamalai University (1980-1986), he pioneered distance learning, semester systems, and internal assessments—the first in Tamil Nadu for higher education. He headed key committees, including one in 1991 regulating unrecognised English-medium nursery schools amid their proliferation, and post-2004 Kumbakonam fire commission prescribing infrastructure, land area, and teacher salaries for private schools, leading to closure of 746 non-compliant schools affecting lakhs of students. Despite controversies and a 2009 state law on fee fixation, he opposed rigid controls per Supreme Court rulings, emphasizing institutional autonomy for quality and resource allocation. A prolific writer with over 100 articles, books like 'Higher Education in India: Issues and Imperatives' (2009), and advocacy for mother-tongue primary education to foster cognitive growth, Chitti Babu's pragmatic interventions addressed market failures while inspiring ongoing reforms.

**Key points:**

- Chitti Babu introduced distance learning, semester systems, and internal assessments as the first VC to do so in Tamil Nadu higher education.
- He led committees recommending regulations for private nursery schools in 1991 and post-2004 school fire safety and fee structures, resulting in 746 school closures.
- Advocated functional autonomy for educational institutions to ensure quality and productive resource allocation.
- Promoted mother-tongue instruction in primary schools to nurture children's cognitive development.
- Published over 100 scholarly articles and books urging leadership-focused higher education reforms.

**By Chandrasekaran Balakrishnan**

* * *

India’s contemporary society is such that it scarcely pays attention to someone’s multi-decadal achievements, to one who is a doyen in many fields – unless he or she belongs to the ranks of popular politicians, cine actors, fiction writers, directors of cinema or industrialists. 

It is even stranger that nonagenarians are recognized not just for their age, but also their lifelong contributions to chosen field of excellence that spans many decades. Late Professor S.V.Chitti Babu, a leading intellectual educationist of the country, was one such person. 

He was an educational reformer, who served for more than six decades in various capacities. A lifelong policy wonk, he worked for improving the quality of education in schools, colleges and universities in India and Tamil Nadu. 

Chitti Babu was an able administrator in several higher educational institutions and can be credited for introducing many reforms in Tamil Nadu. According to him, educational and training institutes needed to identify and inculcate students’ talents and improve their capacities to handle societal situations with skill, rather than mere socialization. For a lifelong, he strove for \`providing equality of opportunities to all its citizens’ in the field of education. 

The veteran’s achievements in the field of school reforms and the positions he adopted in the annals of India’s educational history, is a case study to learn and imbibe about meeting systemic transitions and challenges that are resolved over many decades. 

The eminent educationist passed away on March 29, 2020, at Chennai, celebrating his hundredth birthday on November 7, 2019. He had diabetes for close to six decades, but that never came in the way of his active engagement in public life, taking on a different role every time to bring policy changes in the education sector. 

Prof Chitti Babu stood tall in the field of education. For decades, many in the state turned to him to resolve the myriad issues and challenges faced in this crucial sector. His pragmatic views and suggestions were welcomed by one and all, as they provided succor to everyone who sought help. The nonagenarian headed many committees and commissions, coopting himself in the role of even a simple member in committees related to the education sector, both in Tamil Nadu and the national level. 

Chitti Babu had published widely, writing more than a 100 scholarly articles and lectures on the issues confronting the education sector, which are still relevant for his splendid articulation, context and content. 

The centenarian was born on November 7, 1920. He received his B.A. (Hons) in History from the Pachaiyappa College, Chennai. He concluded his M.A. degree in History from the University of Madras. In 1942, he joined as Assistant Professor of History at the Pachaiyappa College. 

Babu became Professor in 1947, teaching in many colleges, including the prestigious Madras President College. He was the first Principal of the Government Training College, Vellore, a Fulbright Scholar who trained in the USA and went on to become member of the State Planning Commission.

As Vice-Chancellor at the Madurai Kamaraj University from 1975 to 1978, he was the first in the country to spearhead and introduce Distance Learning in Tamil Nadu for higher education, apart from introducing semester and internal assessment systems. 

Chitti Babu served two terms as Vice-Chancellor of the Annamalai University from 1950-86, leaving his imprimatur there with many far-reaching reforms, including the introduction of Distance Education. He was honoured with the D.Litt. degree (Honoris Causa) for his yeoman services. 

He was also the first Vice-Chairman of Tamil Nadu State Council of Higher Education established in 1992, also serving as Member in the Executive Committee of Association of Commonwealth Universities. 

Chitti Babu travelled to several countries for keeping abreast with educational issues, enlarging his learning and broadening his horizon. In 1994, he founded the Tamil Nadu History Congress and was its President for a decade. 

He was the first Director of School Education and Higher Education Departments of the Government of Tamil Nadu. While serving there, he was told that without teachers’ training, he could not grow beyond a point; hence at the age of 32 in 1951-52, Chitti Babu took leave from work for a year and joined the Collegiate Teachers’ Certificate course at Teacher Training College, Saidapet in Chennai, which is also one of the oldest teacher training institutes in Asia. 

In 1991, he headed a committee constituted by the Government of Tamil Nadu to study the status of unrecognised English medium nursery schools run by private individuals. His brief was to recommend regulations for controlling and monitoring such schools. In 1993, the state government had notified various regulatory measures for control and monitoring proposed by him. 

It was during this period that mushrooming of private English-medium nursery schools proliferated across Tamil Nadu. Indeed, the failure to safeguard the interest of parents and children prompted the government to step in and regulate. 

After the tragic demise of 96 children in a school fire at Kumbakonam, Tamil Nadu, in 2004, Prof Chitti Babu headed a Commission constituted by the state government to study and prescribe the fee structure of such schools. It was also mandated to introduce minimum infrastructure facilities, including the land area for each school depending upon its location, and the salary structure of teachers of private matriculation schools and private matriculation Higher Secondary schools. Again, another market failure warranted a second government intervention. 

The Commission’s recommendations created a huge controversy in Tamil Nadu. Some private schools even went to court against the state government’s orders to close about 746 schools for non-fulfillment of requirements fixed by the Commission, a decision that would have affected a few lakh students. The committee headed by Prof Chittibabu did not recommend fee fixation of unaided private schools following a Supreme Court judgment.

In 2009, the Tamil Nadu government had enacted a law to fix the fee structure of unaided private schools, though not as rigidly as has been followed by some other state governments in India. Nonetheless, the state license raj continues.

Prof Chitti Babu always believed that functional autonomy to educational institutions is paramount to improve and maintain the quality and allocation of resources productively. He was member of the National Commission on Teachers-II, 1983-85. 

He wrote to former Prime Minister Rajiv Gandhi, calling upon him to bring in concrete reforms in the higher education sector through a memorandum, which was part of a report entitled “Towards New Educational Management”, submitted to the University Grants Commission (UGC) on January 24, 1990. 

In 2009, Chitti Babu published a book titled *“Higher Education in India: Issues and Imperatives”* which is a collection of his scholarly lectures, including convocation addresses at various institutions. The book stresses on shifting the focus fundamentally to build universities and higher educational institutions with foresight coupled with a deep commitment to leadership. He made a strong case for inculcating and imbibing a sense of togetherness for students, parents and the society. He also wrote books in Tamil including the well-known *Sinthanai Sikarankal* or Wings of Thinking.

For decades, Chitti Babu urged authorities to ensure that children study in primary schools only in their mother tongue, which would help them to learn and nurture their cognitive growth. He wrote a chapter on *Child Education for Joy and Learning* in a book published in 1997, which traced and emphasised philosophically the vital role of early childhood education. Sadly, he could not see the implementation of Early Childhood Care and Education, which was part of the National Policy on Education, 1986, and is now part of the Draft National New Education Policy, 2019. While the centenarian is gone, his ideas will continue to inspire generations of students all over the country.  

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [Cho Ramaswamy: India’s classical satirist and liberal, 1934-2016](https://spontaneousorder.in/cho-ramaswamy-indias-classical-satirist-and-liberal-1934-2016/)

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## #DalitLivesMatter: Why We Don’t Care About This Hashtag

Original: https://www.spontaneousorder.in/p/dalitlivesmatter-why-we-dont-care-about-this-hashtag

Author: Spontaneous Order

Published: 2020-06-15T14:50:29.000Z

Topics: caste-violence, dalit-rights, police-brutality, rule-of-law

> By Indian standards, the atrocity was hardly worth a raised eyebrow. In the US, George Floyd, a black man accused of using counterfeit currency, was killed when a white policeman knelt on his neck for nine minutes despite the victim crying out that he c..

**Summary:**

Swaminathan SA Aiyar argues that Indians largely ignore police brutality like the George Floyd killing because third-degree torture and 'encounter' killings by police are normalized as necessary for justice in a dysfunctional judicial system, with films glorifying encounter specialists becoming hits. Societal violence based on caste, religion, gender, and region is endemic, with perpetrators often shielded by politics and rising to leadership rather than facing jail, as police overlook mafia and vigilante groups. While some liberals push 'Muslim Lives Matter' amid riots and lynchings, Aiyar contends Muslims, historically rulers for a millennium, fare better than US blacks, who were slaves. The most egregious outrages target Dalits, historically oppressed for millennia: police often refuse cases against upper castes, crimes against Dalits rose from 33,655 in 2012 to 40,801 in 2016 per NCRB, and Dalits are killed for riding horses or eating at upper-caste tables, barely noticed by media. From a classical-liberal lens, Aiyar highlights how breakdown in rule of law and politicized violence perpetuates such injustices, urging focus on 'Dalit Lives Matter' for true protest against systemic atrocities.

**Key points:**

- Indians accept police third-degree methods and encounter killings as normal due to judicial failures, unlike the outrage over George Floyd's death.
- Caste, religious, and gender-based violence is routine and politically protected, with perpetrators becoming community leaders.
- Crimes against Dalits increased from 33,655 cases in 2012 to 40,801 in 2016, per National Crime Records Bureau.
- Dalits face extreme discrimination, including murders for violating upper-caste norms like riding horses or sharing wedding tables.
- The author advocates 'Dalit Lives Matter' as the rightful focus for protesting India's deepest historical and ongoing outrages over Muslim or other causes.

**By Swaminathan SA Aiyer**

* * *

By Indian standards, the atrocity was hardly worth a raised eyebrow. In the US, George Floyd, a black man accused of using counterfeit currency, was killed when a white policeman knelt on his neck for nine minutes despite the victim crying out that he couldn’t breathe. This outrage sparked demonstrations and riots not only in the US but across many countries. Indians too condemned it, but mostly with a barely suppressed yawn.

There are two reasons for this. First, most of the public no less than the police believe that third degree is a normal procedure to extract confessions and solve crimes. The judicial system seems so incapable of convicting criminals with money and contacts that “encounter specialists” — policemen who specialise in gunning down suspects in cold blood — are hailed as heroes rather than murderers. Ab Tak Chhappan, a film about a policeman boasting of 56 encounter killings, was such a hit that it spawned a sequel.

Second, violence based on caste, religion and gender is so ingrained in society and politics that police violence is viewed as not as an exceptional outrage but an extension of social and political feuding. Mayhem and killing routinely happen in clashes between people of different castes, religions, regions and ethnicities. The chief perpetrators become important political leaders of their communities rather than jailbirds. Every political party is associated with mafia gangs and vigilante groups that can threaten and beat up dissenters while the police turn a blind eye.

Even if no politics is involved, caste violence is endemic; ethnic and religious minorities are threatened and dispossessed; khap panchayats kill eloping couples; groups objecting to supposed insults to their communities are able to ban or block films and books, and rumours suffice for mobs to kill supposed child-lifters or witches. The list goes on and on.

‘Black Lives Matter’ has become a clarion call in the US. Floyd is the latest of many blacks killed by the police or vigilantes in recent years. In India, some liberal voices want to start a movement for ‘Muslim Lives Matter’. The vast majority of people killed in communal riots, such as the recent Delhi riots, are Muslims. Hindu lynch mobs have beaten up or killed Muslims suspected of eating beef or transporting cattle for slaughter. An eight-year-old girl of a Muslim nomadic group was gang-raped and murdered to cow down the nomads to stay away from a Hindu area in Jammu.

Despite this, Muslims in India are far better off than blacks in the USA. After all, Muslims were for nearly a thousand years the ruling class in India and never thought of themselves as a minority until democracy arrived. Many Muslims were emperors, feudal lords and millionaire businessmen. By contrast, blacks in the US were historically slaves.

If indeed Indians wish to protest against the most egregious of historical and current outrages, that should be ‘Dalit Lives Matter’. Dalits will tell you that the police often refuse to register cases against upper castes. For what it is worth — a gross undercount — the National Crime Records Bureau shows that crimes against Dalits rose from 33,655 in 2012 to 40,801 in 2016. One Dalit was killed in Gujarat for daring to ride a horse — supposedly an upper-caste monopoly. Another Dalit in Uttarakhand was killed for daring to eat at a wedding table for upper castes. The media hardly noticed.

*Read the rest of the article [here](http://swaminomics.org/dalitlivesmatter-why-we-dont-care-about-this-hashtag/). This post was originally published on the Times of India website on 14th of June, 2020.*

Read more: [Rajaji Was Prescient About Electoral Funding](https://spontaneousorder.in/so-musings-rajaji-was-prescient-about-electoral-funding/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Policy Talks: JP Dalal on Haryana’s Agriculture Policy

Original: https://www.spontaneousorder.in/p/policy-talks-jp-dalal-on-haryanas-agriculture-policy

Author: Spontaneous Order

Published: 2020-06-12T17:38:38.000Z

Topics: agricultural-reforms, apmc-dismantling, farmer-freedom, drip-irrigation, doubling-farmers-income

> Intro: Prime Minister Narendra Modi wants the nation to move towards ‘atmanirbharta’ or self-reliance and for that to happen, farmers need a good price for their produce. The Union government has announced far-reaching reforms, including investment in

**Summary:**

In an interview with Centre for Civil Society CEO K. Yatish Rajawat, Haryana Agriculture Minister JP Dalal hails the central government's dismantling of APMC as a revolutionary step creating a pan-India market from Kashmir to Kanyakumari, granting farmers freedom to sell anywhere at desired prices. He addresses wheat procurement challenges amid COVID, noting 68 LMT procured, 44 LMT warehoused, Rs 6,500 crore paid to farmers with Rs 6,000 crore due soon via daily transfers of Rs 1,000-1,500 crore, blaming initial delays on arthiyas and opposition politics. To combat water scarcity and labor shortages, Haryana offers 85% drip irrigation subsidy (effectively 100% after manufacturer price cuts), promotes mechanization via custom hiring centers, and incentivizes shifting from water-intensive rice to corn, cotton, or floriculture with MSP procurement and advance payments. Dalal pushes Direct Benefit Transfers through 'Meri Fasal Mera Byora' portal to bypass middlemen, amended Mandi Act allowing FPOs or groups of 10 to set up private mandis, and animal husbandry for quick income doubling—Haryana now second in per capita milk at 1,080g—with Rs 3 lakh credit cards at 4% interest and 2.75 lakh animals insured. He urges farmer collectives for bargaining power, state-level implementation of Rs 1 lakh crore package, and private entrepreneurship in fisheries and processing to achieve self-reliance and double incomes.

**Key points:**

- Central APMC reforms enable pan-India market, freeing Haryana farmers to sell produce anywhere at market prices.
- Haryana procured 68 LMT wheat, paid Rs 6,500 crore with remaining Rs 6,000 crore due soon, streamlining via online processes despite arthiya delays.
- Promote crop shift from rice to corn/cotton with MSP, 100% drip subsidy, and DBT to conserve water and ensure fair prices.
- Amend Mandi Act to allow FPOs and private groups to create mandis, fostering farmer collectives for better bargaining.
- Boost animal husbandry with low-interest credit, insurance for 2.75 lakh animals, and processing plants to double incomes quickly.

**By Spontaneous Order**

* * *

**Intro:** Prime Minister Narendra Modi wants the nation to move towards *‘atmanirbharta’* or self-reliance and for that to happen, farmers need a good price for their produce. The Union government has announced far-reaching reforms, including investment in agricultural infrastructure and dismantling of the Agricultural Produce Market Committee (APMC), leaving it to state governments to chart out the next course of action. Haryana Agriculture and Farmer Welfare Minister, J P Dalal, spoke to the CEO of the Centre for Civil Society, K. Yatish Rajawat, in a wide-ranging interview. Excerpts:

**Yatish Rajawat**: Welcome Mr. Dalal. I would like to congratulate your party on the agricultural reforms announced recently by the Union Finance Ministry. By dismantling APMC, the farmers have the freedom *(azadi)* to sell their produce anywhere within and beyond the state. How will these reforms impact Haryana’s farmers?

**JP Dalal**: Farmers were always concerned by the limitations that the APMC Act placed on them. Why shouldn’t the entire nation function as a single market for the farmers? Why should they be restricted only to a particular area? The announcements made by our Prime Minister and Finance Minister to amend this marketing act is a truly revolutionary step. This will create a pan-Indian market, from Kashmir to Kanyakumari. The farmers will be able to sell their produce wherever they wish to, at whatever price they want to sell it. 

**YR**: Do you think this will result in hoarding of farm produce?

**JPD**: The bottom line is that farmers should not be constrained to sell at a lower price. New Kisan Credit Cards (KCC) worth Rs 2 lakh crore and over 1.5 lakh farmers would benefit from this scheme. As far as I know – because I am a farmer myself – they want credit at low-interest rates. This scheme enables them to get credit at 4% interest. Farmers want manure, seeds and water at affordable rates, which the state government is providing. Haryana faces acute water shortage and budgetary allocations have been made to promote drip and micro-irrigation. Farmers can take advantage of an 85% subsidy on drip irrigation. Another important aspect is protecting farmers against risk, and this is ensured through the Fasal Bima Yojna.   

**YR**: What about wheat procurement in Haryana, which takes place through mandis? I have been to some of these places myself. Official statistics reveal that disbursements worth Rs 1,500 crore has been made till now, but total payments are close to Rs 12,000 crore. What explains this difference? How many farmers have actually received MSP for their sale?

**JPD**: We invited farmers to sell their produce, established over thrice as many procurement centres at school grounds and stadiums even when weather conditions were not favourable. So far, we have procured roughly 68 lakh metric tonnes (LMT) of wheat and of this, 44 LMT has already reached warehouses. Our procurement process was online and the process is considered complete when we get a receipt from the warehouse, be it FCI, HAFED or any other institution. So, there has been a delay of two to four days. Trucks have been lining up outside warehouses for loading and unloading produce. So, I do accept that there has been a delay of 2-5 days. For the 44 LMT wheat being sold, about Rs 8,000 crore is due to the farmers.

**THE ROLE OF ARTHIYAS**

**YR**: Do the dues total up to Rs 12,500 crore?

**JPD**: The produce, once it is granted the I form, H form, J form and after the *arthiyas* (commission agents) deliver it to us, goes through a weighing and cleaning process. It is then put in gunny bags and transferred to warehouses. We have brought 68 LMT wheat, but only 44 LMT has been transferred to warehouses. We are working on covering this backlog and as of yesterday, Rs 6,500 crore has been transferred to farmers’ accounts. Initially, we faced difficulties as the *arthiyas* took time to understand the process. We told the *arthiyas* that we will give them the money and they will have to subtract farmer credit from it, get the farmers to sign on the agreement letter, after which that money will be transferred to our pool account and then to the farmers. However, most problems have been resolved. 

**YR**: So, you are saying that roughly Rs 6,000 crore will be transferred in the coming one or two weeks.

**JPD:** Yes. The remaining Rs 6,000 crore will be transferred in the coming days. We transfer about Rs 1,000-Rs 1,500 crores every other day.

**YR**: About 8 lakh migrant labour registered with the government has left. Since sowing is nearly complete using tractors and other equipment, what is the government doing to get these labourers back for the harvest season?

**JPD**: Agriculture needs specialised labour. Skilled labour for rice and wheat harvests  are different. The labour force for mustard and wheat has left. If the labour required for other crops is not available, we will have to make do with mechanised equipment. In the last 2-4 years, we have moved towards mechanisation by establishing custom hiring centres. Farmers use tractors and harvesters for their work. 

**YR**: Some 15-20 villages in Haryana and about 30 in Punjab have gone completely dark. The underground water is now miles deep. The biggest reason why farmers produce a highly water consuming crop like rice is because the government buys it at MSP. What are the changes planned for rice procurement in Haryana?

**JPD**: We are a farmer-friendly government and will not impose anything that farmers do not want. But this time, looking at the conditions, the labour shortage and to save water, we have come up with a scheme. In the blocks where water is available, rice would be grown. Through panchayats and social organisations, we have requested the farmers not to grow rice this time. We have suggested that they let go of half the rice and instead grow corn, floriculture or cotton in its place and we will procure it at the MSP. Further, we have an 85% subsidy on drip irrigation for anyone who replaces rice to save water.

**YR**: But *bajra* and corn cannot grow on drip irrigation?

**JPD**: No, we can grow corn. Cotton harvesters can grow between 10-15 quintals without drip and about 15-20 with the drip. 

**DRIP IRRIGATION** 

**YR**: But in today’s scenario, getting a drip system installed, getting subsidy from the government etc., have all come to a halt. Drip companies are closed. They say that the farmers should pay up before they install the drip and that subsidy is not their responsibility.

**JPD**: We are not taking any short-term decisions. Today, Haryana has 85% drip subsidy. So, we held a meeting with drip manufacturers and suggested that they reduce their prices because the cost of petroleum products has come down and they bear the 15% cost that the farmers paid earlier. You would be happy to know that they agreed to this. So essentially there is a 100% subsidy on the drip and the farmer only has to pay 12% in GST. 

**YR**: Do these 40 blocks also include some in the backward districts?

**JPD**: PM Modi with his Jal Jeevan Yojna has focused on drip irrigation. On one side we don’t have water, on the other, we grow rice. Areas like Mewat, Loharu and Fatehabad are dry and water is available at a depth of 600-800 ft. So we are looking to expand the areas of work.  

**YR**: With regards to adding money in farmers’ accounts, Haryana has identified farmers and created a database for them. Does the government also have information regarding the kind of farmer and his location? 

**JPD**: We are trying to identify farmers directly via our portal, *‘Meri fasal mera byora’,* and we are trying to map them. Through this, we will know the size of the farmer, their agricultural practices, availability of water and the size of their families. We want everyone to get the right price through Direct Benefit Transfers (DBT) and remove middlemen. 

**YR**: How long will the government take to implement DBT, especially in wheat procurement. 

**JPD**: The process was initiated, but unfortunately politics has intervened. The opposition has convinced the *arthiyas* to rebel. One of their demands was to re-open mandis 10 days after the pandemic ends. Sadly, the opposition has backed these demands. Our objective is to buy farmers’ produce and transfer the money directly to them. 

**FARMERS’ MARKET**

**YR:** The BJP government manifesto has talked about the creation of a farmers’ market since 2014. What is the progress in Haryana?

**JPD**: We have amended the Mandi Act in the last session. It was based roughly on the model Act sent by the central government and Haryana is one of the few states that has passed this bill in the assembly. Today, any farmer producer organisation (FPO), warehouse and a group of 10 people can establish their own mandi, be it fruits, vegetables or grain. In Haryana, there are over 400 FPOs already registered. About 60 of them have 70-80% subsidy. We have freed the farmers from any encumbrances, but the farmer must also think of creating collectives and cooperatives via panchayats or FPOs like in Maharashtra or Gujarat. A small farmer with two acres of land does not have any bargaining power during the purchase or during sales. They must create groups to increase their collective landholding. 

**YR**: Do you believe farmers are actually shifting to corn?

JPD: We will open our portals today. Even without the portal, we have received inquiries from about 15,000-20,000 farmers.

**YR**: What will be the process for this scheme? If I am a rice farmer shifting to corn, how will I avail of the subsidy?

**JPD:** The process is that the farmer will sow the corn, once it has grown a bit, and an official will go and check it out. At this point, the farmer will receive half the money. Next, when the corn is ready to be harvested, we will transfer the remaining amount before the harvest. Once the process is complete, the benefits will be transferred directly, except in Fasal Bima cases that are routed through companies. We will also ensure that the entire production is bought at MSP by the government.

**YR**: In that case, what will be the MSP for corn?

**JPD:** The MSP is somewhere between Rs 1,600-Rs 1,700. Corn is harvested twice a year. We have tested the winter produce; the companies buy around 30 quintals at about Rs 50,000 per quintal. If we get around 20 quintals per acre, then the price comes to Rs 34,000. The production costs in labour are less, so it is on par with rice. 

**FARMERS’ FREEDOM**

**YR:** Mr Dalal you are a farmer as well as an eminent politician. What farmers really want is freedom – the freedom to sell and freedom from *arthiyas*, who bind them. At the end of the day, agriculture is a state subject. We need to achieve ease in farming, which is hindered by many complex laws. How can progressive states like Haryana reform agriculture?

**JPD**: There was a time when limitations were imposed on the farmer and we did not produce at capacity. We even imported pulses and wheat from America. Maybe these restrictions were needed then. But today, we have a problem of plenty. We can produce more than our national requirement for all crops. The Rs 1 lakh crore package given by our PM, if implemented correctly, could work wonders. If small farmers join and club about 20-50 acres and establish a plant, they would increase their bargaining power immensely. I believe that the work of the Union government is done. It is now up to the states to judiciously use this budget. The second issue is of landholding. The true value of bargaining power can only be realized when the farmers’ holding is big, say 200-500 acres. Even during this lockdown, all businesses – factories, aeroplanes, malls, cinemas, colleges and schools – are closed, but farming has continued uninterrupted. I believe that the wheels of the economy are turning today because of our farmers.  

**DOUBLING FARMERS’ INCOMES**

**YR**: What are your government’s policies on land pooling and land collective acts? 

**JPD**: It is not merely a thought; if there is a thought, there are two steps in that direction as well. People like you and me, intellectuals, scientists and industrialists, are all making efforts to improve the conditions of the farmers. We want to achieve the aim of doubling the farmers’ income. In Haryana, we are promoting fisheries because we have an abundance of saline water.

**YR**: Haryana ranks first or second in North India, as far as fisheries are concerned. The infrastructure for storage and sales in fish producing areas like Rohtak, Bhiwani and Nou is inadequate. Which makes Haryana a fish-producing state, but not a fish-marketing or selling one.  

**JPD**: Haryana does produce fish, but consumption is relatively little. Regions like Mewat are big producers. There are great possibilities for fish production and for selling it outside and earning foreign currency. You are absolutely correct that our processing and transportation chains are not up to the mark. But we will handhold producers, and hopefully, a private entrepreneur will take charge. 

**YR**: Fish seeds come from Kolkata and this time due to suspension of flights, that has not happened.

**JPD**: When I started, we had around 800 fish farms, but I wanted 2,000. Each farm will employ four to five people and overall, provide jobs to 7,000-8,000 people. We also offer small loans amounting to Rs 10 lakh. I also have the animal husbandry department, which supplements farm income. Our cows, the breeds indigenous to Haryana, give about 40 litres of milk in Brazil, but here they stop at only 4-5 litres! Cows suited to cold climates have been brought here. The policy is flawed.  

**YR**: As you correctly point out, there are four to five cow breeds in Haryana, but they are either too expensive or cannot be found. The farmers, too, have stopped breeding them because they only produce 4-5 litres or a maximum of 8 litres of milk. The price of milk in cities is about Rs 80-90 per litre, but in villages, it is sold at Rs 20-25 a litre. The Centre for Civil Society, as you may know, helps in the formulation of policies and works with central and state governments. Is there any new policy for smaller families that have four to five cows? Not everyone can have a 50-cow farm. 

**JPD**: About five years ago, Haryana produced 800g of milk per person. Now, I believe we are second in the country with 1,080g. In terms of increasing farmers’ income, animal husbandry is the easiest and the quickest way. Why? Because we can increase milk production of milch animals. The input costs will remain the same and the production will increase. We have insured 2.75  lakh animals in Haryana and our target is 5 lakh animals by next year. PM’s PashuDhan Credit Card scheme will benefit those farmers who have limited land, are landless, or those belonging to SC/ST/OBC category who are without savings. They will receive a credit of up to Rs three lakh at 4% interest. With this, they can breed 1-2 cows or buffaloes and can sustain their families. This will definitely increase milk production. We also plan to establish processing plants. We have allotted a budget for a tetra pack plant so that our product can compete in the international market, be it milk, curd or juices. We will put up a big plant like Vita and offer rewards to the best milch animals and encourage the unemployed to get into fisheries. Haryana has one of the densest webs on mandis. We are also planning a 500-acre mandi in Kannur to match international standards.  

**YR**: Will these *mandis* be created by the government or private businesses?

**JPD**: The government will provide basic infrastructure. After that private players can establish processing units or cold storage. The government will do most of the work and then we will rope in private businesses. Even if a private business wants to compete with us, they are welcome to.  

**YR**: Thank you very much Mr. Dalal for talking with us.  

**ABRIDGED INTERVIEW FOR NEWSPAPERS / Digital platform**

**Headline: Animal husbandry is the best way to double farmers’ income: Haryana Agriculture minister Dalal’**  

With the central government introducing much-needed agriculture reforms, there is a buzz in the air. With the global pandemic disrupting lives, Prime Minister Narendra Modi’s call for self-reliance or *\`atmanirbharta’* has acquired a new meaning. In a world struggling with death and economic displacement, it makes sense for a country to chart out its own road map. Haryana, one of the most developed states in the Indian Union knows all about self-reliance, which can be achieved only through sound agriculture. The state’s Agriculture and Farmer Welfare Minister, JP Dalal and the CEO of Centre for Civil Society, K Yatish Rajawat, brainstorm in a riveting exchange of ideas.

**Yatish Rajawat**: Welcome Mr. Dalal. I would like to congratulate you on the agricultural reforms, which were announced recently by the Union Finance Ministry. The primary goals of the reforms include dismantling the Agricultural Produce Market Committee or APMC and giving freedom *(azadi)* to farmers to sell their produce anywhere, within and beyond the state. Today, suitably, you are speaking on Azadi.me and in this context, how do you think these reforms will impact Haryana’s farmers?

**JP Dalal**: One principal concern bothering the farmers has always been the limitations that APMC placed on them. Why shouldn’t the entire nation function as a market for the farmers? Why should they be restricted only to a particular area? The announcement made by our Prime Minister and Union Finance Minister to amend this marketing act is a truly revolutionary step. This will enable the creation of a pan-Indian market, from Kashmir to Kanyakumari. 

**YR**: Do you believe that this will result in hoarding of farm produce?

**JPD**: I think farmers know the right price for their produce and the bottom line is that they should not be constrained to sell at a particular price. Why should they sell at a lower price, anyway? Obviously, because they require money for their immediate needs. PM Modi has also come up with a solution for this. We have made new Kisan Credit Cards (KCC) worth Rs 2 lakh crore and over 1.5 lakh farmers would benefit from this scheme. 

**YR**: What about wheat procurement in Haryana, which is happening through mandis?  Official statistics reveal that payment worth Rs 1,500 crore has been made till now, but total payments are close to Rs 12,000 crore. Why is there such a difference? 

**JPD**: As far as statistics go, these are challenging times. Our procurement process has been carried out keeping in mind social distancing norms. We invited the farmers to sell their produce, established over thrice as many procurement centres at school grounds and stadiums, even when weather conditions were not favourable. So far, we have procured roughly 68 lakh metric tonnes (LMT) of wheat and of this, 44 LMT has already reached warehouses. 

**THE ROLE OF** ***ARTHIYAS***

**YR**: Do the dues total upto Rs 12,500 crore?

**JPD**: The produce that we receive at the warehouses, once it is granted the I form, H form, J form and after the *arthiyas* (commission agents) deliver it to us, goes through a weighing and cleaning process. It is then put in gunny bags and transferred to warehouses. We only consider the process to be complete once the produce reaches the warehouse because we are buying for the Government of India. We have brought 68 LMT wheat, but only 44 LMT has been transferred to warehouses. We are slowly working on covering this backlog and as of today, Rs 6,500 crore has been transferred to farmers’ accounts. 

**YR**: So, you are saying that roughly Rs 6,000 crore will be transferred in the coming one or two weeks.

**JPD:** Yes. The remaining Rs 6,000 crore will be transferred in the coming days. We transfer about Rs 1,000-Rs 1,500 crores every other day.

**YR**: As you said, the labour is mostly migrant. There are about eight lakh migrant labourers registered with the government, which has already left. Since the sowing is almost complete using tractors and other equipment, what is the government doing to get the labourers back in time for the harvest season?

**JPD**: We have to understand that there is specialised labour for agriculture. This is skilled labour, different for rice and wheat harvest, etc. The labour for mustard and wheat has left. If the labour required for other crops is not available, we will have to make do with mechanised equipment.   

**DRIP IRRIGATION** 

**YR**: But in today’s scenario, getting a drip, attaching it to a pipe and getting subsidy from the government, have all come to a halt. The drip companies and their offices are closed. The companies say that the farmers should first pay up and then install the drip and that subsidy is not their responsibility.

**JPD**: We are not taking any short-term decisions. Today, Haryana has 85% drip subsidy. We held a meeting with drip manufacturers and suggested that they reduce their prices because the cost of petroleum products had come down, in addition to bearing the 15% cost that the farmers paid earlier. You would be happy to know that they agreed to this. 

**YR**: For adding money into their bank accounts, Haryana has identified farmers and created a database for them. Does the government also have information regarding the type of farmer and his location? 

**JPD**: We are trying to identify the farmers directly via our portal, *‘Meri fasal mera byora’,* and we are trying to map them. Through this, we will know the size of a farmer, whether he has 10 acres or 20 acres, their agricultural practices, how much water is available to them and the strength of their families. 

**YR**: How long will the government take to implement Direct Benefit Transfer (DBT), especially in wheat procurement. 

**JPD**: The process was initiated, but unfortunately opposition politics has come in the way. 

**FARMERS’ MARKET**

**YR:** The BJP government has included the creation of a farmers’ market in its manifesto since 2014. What is the progress?

**JPD**: We have amended the Mandi Act in the last session. It was based roughly on the model Act sent by the Government of India and Haryana is one of the few states that has passed this bill in the assembly. Today, any farmer producer organisation (FPO), warehouse or a group of 10 people can establish their own mandi, be it fruits, vegetables or grain.    

**FARMERS’ FREEDOM**

**YR:** When we talk to farmers, what they really want is freedom – freedom to sell and freedom from *arthiyas*, which bind them.  

**JPD**: There was a time when these limitations were imposed on a farmer as we did not produce at capacity. At that time, we imported pulses and even wheat from America. So, maybe these restrictions were needed then. Today, we have a problem of plenty. We can produce more than our national requirement for all crops. Today, the Rs 1 lakh crore package of PM Modi, if implemented correctly, could work wonders. 

**DOUBLING FARMERS’ INCOMES**

**YR**: What are your government’s policies about land pooling and land collective acts? 

**JPD**: It is not merely a thought; if there is a thought, there are two steps in that direction as well. People like you and me, intellectuals, scientists and industrialists are all making efforts to improve the conditions of the farmers. We want to achieve the aim of doubling farmer’s income. 

**YR**: Haryana ranks first or second in North India, as far as fisheries is concerned. But the infrastructure for storage and sales in fish-producing areas like Rohtak, Bhiwani and Nou are inadequate. 

**JPD**: Haryana does produce fish, but our consumption is relatively less. Regions like Mewat produce a lot of fish. There are great possibilities for fish production; in fact we can sell it outside as well and earn foreign currency. This is a new venture.  

**YR**: As you pointed out quite correctly, four to five breeds of cows are found in Haryana. But these are slowly disappearing and Haryana cows are now found in Brazil! In Haryana, they are either extremely expensive. The farmers too have stopped breeding them because they only produce 4-5 litres, or a maximum of 8 litres of milk. The price of milk in cities is about Rs 80-90 per litre, but in villages it is only sold at Rs 20-25 a litre. I am happy at your suggestion that the government cannot do everything and that entrepreneurs will have to come forward and suggest policies. The Centre for Civil Society, as you may know, helps in the formulation of policies and works with central and state governments. 

**JPD**: I wish to inform you that about five years ago, Haryana produced 800 grams of milk per person. Now, I think we are second in the country with 1080 grams. In terms of increasing farmers’ income, animal husbandry is the easiest and the quickest way to achieve the goals. Why? Because we can increase milk production of milch animals. The input costs will remain the same, and the production will increase.   

**YR**: Thank you very much Mr. Dalal for talking with us.  

——————————————–

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: Rajaji Was Prescient About Electoral Funding

Original: https://www.spontaneousorder.in/p/so-musings-rajaji-was-prescient-about-electoral-funding

Author: Spontaneous Order

Published: 2020-06-12T15:29:49.000Z

Topics: electoral-reform, political-funding, license-raj, rajagopalachari

> The post-1947 polity in India was characterised by the dominance of a single party or the ‘Congress System’, as the political scientist Rajni Kothari termed it. The single-party dominated democracy went together with the state-controlled planned econo

**Summary:**

In post-1947 India, the Congress System dominated politics alongside a state-controlled planned economy, where corporate houses funded the ruling party through donations in exchange for favors via the permit-license-raj, stifling competition in both electoral and economic spheres. This win-win for big business and Congress persisted until 1967 but risked totalitarianism, as warned by critics like C. Rajagopalachari (Rajaji). In his 1968 column, Rajaji presciently argued that expensive elections force candidates to depend on wealthy parties, entrenching the ruling party's nexus with business and eroding legislative independence, as Edmund Burke advocated. To foster good government, he insisted on immediate reforms to make elections 'dead cheap,' enabling poor but meritorious, public-spirited independents to contest without begging funds. Key proposals: Shift candidate expenses (like those the state should bear) to public funding under an autonomous election board independent of the executive, leveraging India's judiciary; discourage party dominance absent from the Constitution; form an expert panel of retired officials to devise measures, including preferential voting if needed. This classical-liberal vision prioritizes merit over party machinery, checking the 'permit-licence-raj' and promoting true democracy amid India's poverty.

**Key points:**

- Expensive elections in India created dependence on wealthy parties, perpetuating the Congress-ruling elite nexus via state controls like the permit-license-raj.
- Rajaji urged making elections inexpensive to enable independent, meritorious candidates regardless of wealth, reducing party dominance.
- State should bear candidate expenses through an autonomous board, safeguarding against ruling party blandishments.
- An expert panel of officials must immediately devise reforms, potentially including preferential voting, to prioritize national welfare over administrative ease.
- Political parties, unmentioned in the Constitution, hinder India's democracy; independents should be encouraged to prevent politics becoming a preserve of the rich.

**By Spontaneous Order**

* * *

*The post-1947 polity in India was characterised by the dominance of  a single party or the ‘Congress System’, as the political scientist Rajni Kothari termed it. The single-party dominated democracy went together with the state-controlled planned economy.* 

*Apparently, the stymied competition in both electoral and economic marketplace didn’t bode well for the progress of the fragile Republic. One obvious manifestation of the monopolised political economy lay in the domain of electoral funding mechanism. Since the Congress politicians in power could employ levers of the state (license, quota, permit, import substitution mechanism) to decide the fate of the corporate houses, the Big Business paid paeans to socialism and filled Congress coffers with donation money.* 

*These corporate donations oiled the Congress electoral machinery, which was formidable until the onset of the second phase of the party system in 1967.  The corporate houses also walked the talk on India’s mixed economy model which protected them from foreign competition and allowed them to make profits in an economy characterized by scarcity for consumers. It was a win-win for both, the big business and the political party in power.*

*The monopolising tendency in the system didn’t go unnoticed and unchallenged though. Politicians, public intellectuals, and columnists warned of the dangers of the system degenerating into totalitarianism. Most prominent of the lot undoubtedly was the freedom fighter C Rajagopalachari. Apart from the criticism of planned economy and single-party dominance, he also wrote on corporate funding of political parties, which was connected with both matters of polity and economy.* 

*Produced below is his column from 1968, in which he argued for making the elections inexpensive. Such a proposal, in his view, would lead to an influx of deserving and meritorious public-spirited leaders in legislatures and serve as an important check on the attempts by political parties to hijack the agenda for governance.*  

Serious and sufficient attention has not been given in responsible quarters to the problem of making elections to Parliament and to the State legislatures very much less expensive than they are now. I have for a long time been insisting on this as an essential reform. If we desire to have good Government in India this is an absolutely necessary step to be attended to at once. Whether we desire to rest the Government on the majority party basis, or on a coalition basis or a no-party basis, or on a proportional representation system, this reform is a condition precedent. We must make it possible for candidates to contest seats though not able themselves to bear much expense and not desire to depend on wealthy friends or wealthy parties.

The more expensive we make elections, the greater the dependence on political parties will be. The loss of that independence which Edmund Burke wanted for members of Parliament becomes a necessary consequence. The nexus that has developed between the ruling party and the permit-licence-raj which prevails will be a permanent feature of India’s economy if we do not take serious, effective steps to make elections very much less expensive. The party in the office can raise funds from its potential clientele; not other parties.

Every nation has its own peculiarities. Poverty is our peculiarity in India. Poor people should perhaps be content with a monarchic system of government. But we have been ambitious and plunged for democracy, based on elections. This ambition cannot be truly fulfilled unless our experienced administrators find a way to make elections dead cheap. I would go so far as to say that we ought to be willing to sacrifice many good features if we can succeed in making seat in the legislature available to a man or woman of merit, however poor he or she may be, without having to go and beg for money from others to enable him or her even to try.

We have had quite a few general elections, and some of our retired officials as well as some still in office, have acquired considerable knowledge of all the details of expenditure which a candidate has to go through. They can sit together and devise adequate measures to bring about the reforms I am insisting upon. The party now ruling in Delhi should realize that this is one of its most important and urgent responsibilities. It should give up the temptation to maintain its own life by perpetuating the expensiveness of elections for candidates willing to serve in Parliament or in the State legislatures.

As I have often pointed out, much of the expense is really what the State ought to bear on behalf of all the candidates. We should see to this transfer of the burden from candidates to the State, while at the same time safeguarding the voters against the blandishments of the party in power. 

The High Command of the election proceedings should be an autonomous Board totally independent of the ruling executive. This is not a difficult task to organize, as we have already a fairly independent judiciary throughout the country as well as at the top in the Supreme Court. Let us remember that there is not a single reference to political parties in the Constitution. The tendency has however been to make the party system more and more firmly planted. 

Instead of this, we ought to make it more and more easy and popular for independent candidates to enter the legislatures. It may be administratively easier to handle things if candidates come in only through recognized political parties. But what is easy is not always the best way to attain national welfare and efficiency. We have had enough of political parties. Wherever else this system may have done well, it is not doing well in India, and will not do better as time goes on but will get worse and worse. It is crude, undemocratic and immoral to make elections so expensive as to drive candidates to sell themselves to parties by shutting other avenues against them in order to reduce the number of candidates and make official work easy. A panel of experienced men should be immediately set up to deal with this matter of making elections less expensive for candidates desiring to be independent of the financial help of political parties or of wealthy bosses.

If the increase in the number of candidates is thought to be undesirable from any other point of view, a system of voting which will obtain the voters preferences and enable the unspent vote to be transferred to the next preference can be devised. All aspects of the problem should be thoroughly gone into by an expert committee, without losing sight of the main objective, viz., to make elections as inexpensive as possible for candidates. Politics should not become a preserve of wealthy parties or of wealthy men’s stooges.

*The original text of the article can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=785760897.pdf).*

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [De-Stalinisation Versus Communism](https://spontaneousorder.in/so-musings-de-stalinisation-versus-communism/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Cho Ramaswamy: India’s classical satirist and liberal, 1934-2016

Original: https://www.spontaneousorder.in/p/cho-ramaswamy-indias-classical-satirist-and-liberal-1934-2016

Author: Spontaneous Order

Published: 2020-06-08T18:18:18.000Z

Topics: classical-liberalism, political-satire, economic-freedom, free-speech

> During the nineteenth and the first half of the twentieth century, Madras, now Chennai, was the playground of conservative and liberal scholars, reformers and politicians. The Madras Liberal League moderates had played an active role in the freedom mov...

**Summary:**

The post laments the decline of Madras's liberal tradition post-1947, overshadowed by Fabian socialism, Communism, and Dravidian politics rooted in hate speeches rather than constitutional principles. Amid this, Cho Ramaswamy (1934-2016) emerged as a multifaceted classical liberal: lawyer, journalist, satirist, orator, and Rajya Sabha MP (1999-2005). Born in Madras, educated locally, he practiced law until 1978, then launched the satirical play Muhammad bin Tughlaq (1968) and magazine Thuglak (1970), using humor, evidence-based editorials, and reader interactions to critique Indira Gandhi's socialist dictatorship, Emergency authoritarianism, Soviet central planning, pseudo-secularism, and LTTE threats. Inspired by C. Rajagopalachari, Cho campaigned for Swatantra and Janata Parties, championed 1991 economic liberalization and 100% FDI in retail to employ the poor, and upheld individual liberty, private property, free enterprise, rule of law, and free speech. His quip, 'After Independence, we lost sight of our duties and remembered only our rights,' endures. Despite leftist critics, Cho's conservative liberalism defended national interest, religion, culture, and democratic discourse through wit and reason.

**Key points:**

- Cho Ramaswamy critiqued socialism and Dravidian politics via his 1968 play Muhammad bin Tughlaq and 1970 magazine Thuglak, blending satire with evidence-based analysis.
- He supported 1991 economic liberalization and 100% FDI in retail, arguing capitalism employs the poor profitably.
- Cho opposed Communism as against human nature, fought Emergency censorship, and warned against LTTE threats.
- As a Rajya Sabha MP and PUCL president, he defended free speech, rule of law, and constitutional liberalism.

**By Chandrasekaran Balakrishnan**

* * *

During the nineteenth and the first half of the twentieth century, Madras, now Chennai, was the playground of conservative and liberal scholars, reformers and politicians. 

The Madras Liberal League moderates had played an active role in the freedom movement and nation-building. They were all well-reasoned men and women, with sound knowledge of public affairs, believed in pragmatic reforms through constitutional methods, advocated principles of economic freedom, individual liberty, private property rights, free enterprises, rule of law, freedom, and universal peace.    

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Alas, after India’s independence in 1947, this diversity of thought gave way to one-sided discourse dominated by a few with muddled ideas of Fabian socialism and even murkier, Communism. 

The few leaders who favoured putting into place institutional mechanisms and backed the rule of law, were pushed into the background. Even earlier, during 1930-1947, leaders and scholars whose views were genuinely liberal, found themselves marginalized in the mainstream debate and discourses of public policy.   

Thus, the first 40 years of independence was democracy in motion, minus economic freedom. It was cynical to argue about individual liberty, private property rights, free enterprise and rule of law, all of which were part and parcel of the original Constitution adopted in 1950. 

Towards the end of the 1960s, Tamil Nadu witnessed a major shift in politics away from the Congress regime. This was celebrated as a victory of the Dravidian movements, which allegedly championed social justice and empowerment of backward communities. 

Interestingly, none of the Dravidian leaders were part of the freedom movement or believers in constitutional principles. Instead, they were all born out of hate speeches delivered against some or the other community, political parties and were basically, crude practioners of language politics, which pitched them against national integration and regional unity. Over the years, these anomalies were incorporated as film scripts by Dravidian parties, all in the name of social justice. 

Amid these dangerous developments, which began in the late 1960s and early 1970s, there were hardly a well-reasoned thinker, scholar and political leader in Tamil Nadu, who could highlight the principles of liberalism embedded in the Indian Constitution. 

Under such trying circumstances emerged a man of an entirely different persuasion, pitched against the dogmatic policies of the Communists, Socialists and the state control *raj* of the Congress and Dravidian parties in Tamil Nadu. 

Cho Ramaswamy was a multi-faceted personality, a scholar, thinker and above all, a man opposed to the tyranny of Dravidian politics. He was among the few political analysts who had a fine balance of reason and logic. He used them to impact public policy with the help of humour, sarcasm and biting satire. 

When India was at the peak of her socialist dictatorship under Indira Gandhi, Cho was drawn to the ideas of another liberal titan, C Rajagopalachari. Cho admired and met Rajaji in the 1970s. He also campaigned for the Swatantra Party and the Janata Party.  

Srinivasa Iyer Ramaswamy or Cho was born on October 5, 1934, in then Madras in a well-respected lawyer’s family. He was popularly called Cho by his family, inspired by the ancient South Indian king, Raja Raja Chola.

Cho completed his education in Chennai; school at Mylapore, intermediate from Loyola College, a B.Sc. Geography degree from Vivekananda College and a law degree from Madras Law College. 

From 1957 to 1963, he practiced as a lawyer in the Madras High Court and was legal adviser to the T.T.K. & Co. group of companies in Chennai till 1978. 

Cho wore many hats. He was a lawyer, an investigative journalist, writer, political analyst and commentator, editor of a popular Tamil weekly magazine, a powerful orator, author and parliamentarian. He combined these talents with being a cine actor, playwright, movie director and a socio-economic cum political analyst, who was appreciated by all, including his foes. 

Cho Ramaswamy was nominated as MP to the Rajya Sabha from November 16, 1999, to November 16, 2005, and made his presence felt there. In his quest for exploration, he also did a stint as president of the Peoples’ Union for Civil Liberties in 1981-82. 

According to senior journalist and publisher N Ram, Cho “was a lifelong conservative and never moved from being on the right of the political spectrum. He maintained his political conservatism all his life, choosing to judge governments at the Centre and in Tamil Nadu by their policy and performance on issues that mattered”. 

Cho’s classic 1968 satirical play, *Muhammad bin Tughlaq* was a roaring success. He later turned it into a movie, which revealed the anatomy of a government in a democracy. His political magazine, *Thuglak,* launched in 1970, named after his celebrated play, became a classic of modern literature for political satire, writings, editorials, essays and cartoons. His editorials on issues of national interest were all scholarly, martialed on evidence and facts. Over the years, political satire took different forms in *Thuglak.* His interactions with readers was a celebrated event in Tamil Nadu over the next five decades. Happily, it continues to cast a spell five decades after its inception. 

Cho was an unflinching critic of the Soviet Union and its model of central planning and socialism. He wrote scathing articles during the Indira Gandhi period on the murky world of socialism, pseudo-secularism and Communism.

Cho once famously said: “I am against Communism because it is against the nature of man. A talented man cannot be asked to be satisfied with what a man totally devoid of talent is able to obtain from life. Communism makes machines of men.”

He was a fearless journalist. Cho fought against the authoritarian dictatorship during the Emergency over the principles of freedom of expression in general and of freedom of the press. His famous quip, “After Independence, we lost sight of our duties and remembered only our rights,” is still recalled.   

Cho was one of the earliest backers of economic liberalization of 1991, with deep knowledge on how it would benefit the poorest of the poor. He also supported 100% foreign direct investment (FDI) in retail trade, even while many of his close friends disagreed. His logic was simple: “When capitalism thrives, the poor get to be employed usefully and profitably.”

Cho was not the one to shy away from challenging anything that went against national interest and the economy. He was a staunch critic of the LTTE, foresaw the danger and the security threat it posed, both in India and Sri Lanka, and issued warnings accordingly. But no one took him seriously, even after the Tamil extremists had assassinated Rajiv Gandhi!

AR Venkatachalapathy wrote a nasty obituary on Cho’s death in December 2016. It came as no surprise because the writer, a known Dravidian propagandist and historian, had been at the receiving end of Cho’s biting satire. Another Cho baiter, R Vijaya Sankar, trashed him in the Frontline magazine, revealing that the late maestro’s enemies had finally breathed a sigh of relief at the passing away of their bete noire.   

Apart from the political economy, Cho wrote copiously with great authority on religion and culture. According to N Ram, “Cho, a conservative, who was endlessly curious about other people’s ideas and beliefs, respected ideological and political differences, spoke the truth as he saw it, was steadfast in his defence of free speech and democratic discourse, and when things threatened to get out of hand, was able to lighten the atmosphere with his wit, spontaneity, and comic genius”. Truly, a man of many parts.

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## SO Musings: China’s Tiananmen Massacre

Original: https://www.spontaneousorder.in/p/so-musings-chinas-tiananmen-massacre

Author: Spontaneous Order

Published: 2020-06-05T14:10:50.000Z

Topics: tiananmen-massacre, chinese-authoritarianism, political-liberty, tibet-occupation

> Barry Posen, a scholar of International Politics, has recently argued about the peace dividend of the pandemic as nations would emerge out of the lockdown considerably weaker. However, China’s dealings in the South China Sea, Hong Kong, and with India a

**Summary:**

The post republishes a 1989 Freedom First editorial by SV Raju critiquing the Chinese government's Tiananmen Square massacre, where around 10,000 peaceful student protesters were killed in a brutal crackdown involving tanks, bayonets, and target practice on civilians. Despite Deng Xiaoping's economic reforms turning China capitalist in practice, the regime proved unwilling to grant political liberty or democracy, affirming that communists never relinquish power. Raju, echoing classical-liberal principles, insists that market economies cannot be divorced from political freedom where citizens dictate production and rulers—'Bread with Freedom,' not one without the other. The editorial condemns leftist support (including India's CPI(M) and Naxalites), Western hesitation driven by lucrative trade (especially Japan), and India's prime minister's equivocal response awaiting 'accurate' reports. It also highlights Tibet's plight: over 1.2 million Tibetans dead since 1959, 6,000 monasteries destroyed, and 7 million Chinese immigrants outnumbering 6 million Tibetans amid ongoing repression. The contemporary framing links this to China's current assertiveness in Hong Kong, South China Sea, India, and Australia, urging liberals today not to trade political liberty for economic gains.

**Key points:**

- Tiananmen Square massacre in 1989 killed approximately 10,000 non-violent protesters, demonstrating communist China's refusal to allow political freedom despite economic reforms.
- Classical liberals must demand both economic prosperity ('Bread') and political liberty ('Freedom'), rejecting any trade-off.
- China's demographic aggression in Tibet has resulted in over 1.2 million Tibetan deaths since 1959 and the destruction of 6,000 monasteries.
- Western powers, prioritizing trade, have pulled punches on condemning the massacre, while Indian leftists supported the regime.

**By Spontaneous Order**

* * *

*Barry Posen, a scholar of International Politics, has recently [argued](https://www.foreignaffairs.com/articles/china/2020-04-23/do-pandemics-promote-peace) about the peace dividend of the pandemic as nations would emerge out of the lockdown considerably weaker. However, China’s dealings in the [South China Sea](https://www.japantimes.co.jp/opinion/2020/06/02/commentary/world-commentary/china-steps-offensive-senkaku-islands/#.XtjxL-fhVPY), [Hong Kong](https://www.economist.com/china/2020/05/28/chinas-national-security-bill-for-hong-kong-is-an-attempt-to-terrify), and with [India](http://ajaishukla.blogspot.com/2020/06/rajnath-admits-sizeable-intrusion-by.html) and [Australia](https://www.theguardian.com/australia-news/2020/may/20/australia-vows-to-stand-up-to-china-amid-reports-wine-and-dairy-exports-could-be-targeted-next) show a revisionist power asserting its authority. China’s bullying behavior abroad mirrors its authoritarian conduct at home, seen in the suppression of democracy, human rights violations, and treatment of the minorities. Recently in Hong Kong, the pro-China regime has [disallowed](https://www.bbc.com/news/world-asia-china-52877411) the memorial gathering to commemorate the Tiananmen massacre, not to mention the imposition of national security law.* 

*The Tiananmen Square massacre was the Chinese government crackdown over the pro-democracy protests in 1989. The crackdown led to the estimated [death](https://www.independent.co.uk/news/world/asia/tiananmen-square-massacre-death-toll-secret-cable-british-ambassador-1989-alan-donald-a8126461.html) of around 10,000 peaceful, non-violent, and mostly young student protestors. The army ran tanks over the crowd to turn the bodies into ‘pie’, hosed the remains down the drain, bayoneted the wounded girls to death, and shot civilians for target practice.*

*Freedom First’s SV Raju wrote a critical editorial over the incident in the July-September, 1989 issue. Even today, Raju’s arguments have resonance for liberals. While Raju and other liberals cheered Deng Xiaoping for introducing economic reforms which turned China capitalist in all but name, he also made it clear that political liberty and democracy were non-negotiable. Raju also discussed the geopolitical dimension of the global response to the incident, denunciation of the massacre by radical leftists, support to the Chinese authoritarianism by the CPI (M), and the persistent colonization of Tibet. Today, in Raju’s affirmation of ‘Bread with Freedom’ lies the lesson for liberals in India and elsewhere not to trade political liberty for economic freedom.*

In Communist China, Mao’s heirs have, by their brutal suppression of a movement for more freedom and democracy, proved that power indeed grows from the barrel of a gun. The naive who are inclined to take the democratic professions of the commissar at face value, need to think again – Poland, Hungary or Gorbachev notwithstanding.

We posed a question in an earlier issue of Freedom First: “Is the Soviet ideology really changing?” China, at least, has answered in the negative and proved beyond all reasonable doubt that once communists gain control of a country they will never let go. lt is as simple as that. If it was not so, why would the demand for democracy incur the wrath and vengeance of the peoples’ democrats?

Freedom First holds firm its belief that while a market economy is the only sensible and pragmatic policy that can promote the prosperity of a people it cannot be divorced from the society where the citizen dictates not only what shall be produced but also who shall rule him. lt can never be Bread or Freedom. tt must always be Bread and Freedom.

The Marxist-Leninists (our very own Naxalites) are right when they denounce both Deng and his cohorts (who they describe as ‘Capitalist-Roaders’) on the one hand and ‘Western Capitalists’ on the other, for the suppression of the movement for democracy. For our Naxalites the students’ movement is a revolt against the new economic policy of the Chinese Communist gerontocracy while we view it as a genuine people’s movement that proves that four decades of totalitarian rule has not suppressed a people’s desire to breathe freely the air of freedom and liberty.

Western nations including the United States have been pulling their punches because trade is at stake. The Chinese market is so big, so inviting, so profitable! The villain of the piece is Japan which is actively campaigning, particularly with the United States, not to take harsh steps or act in anger. Truly have the Japanese taken over the British mantle of being ‘shopkeepers to the world’.

And so we agree, for different reasons with the Marxist-Leninists when they point out that while “Capitalist Roader” Deng was warmly applauded by the West for his opening up the market to them he is found wanting because of the suppression of the movement for democracy. Free trade and commerce are important but never at the cost of human dignity and individual liberty. Herein lies the contradiction and the dilemma for the West.

And while on this subject let us not forget that other fight for freedom in Lhasa where martial law was declared much before it was imposed in Beijing and where thousands have perished at the hands of Chinese imperialist bullets.

The Office of Information and International Relations at Dharamsala in Himachal Pradesh issued a press statement on May 20. The statement drew attention to a resolution adopted by the Tibetan National Assembly in May calling on the Chinese authorities to lift Martial Law in Lhasa.

The statement observes inter alia:

“The struggle of the Tibetan people is a struggle for our inalienable right to determine our own destiny in freedom. It is a struggle for democracy, human rights and peace. Most of all, it is a struggle for our survival as a people and a nation with a unique civilization.

“China’s sinister objective of reducing the Tibetan people into a minority in our own land is being implemented through an alarming demographic aggression. Today there are over seven million Chinese immigrants in Tibet – far outnumbering the six million and more Tibetans.

“Since 1959 over 1.2 million Tibetans have died as a direct result of Chinese domination over Tibet. Over 6000 monasteries, temples and chapels have been destroyed and desecrated.

“There are fresh reports of heavy military build-up and troop movements inside Tibet in recent months – somewhat like a preparation for war.

“Chinese prisons in and around Lhasa are becoming overcrowded. All prisons in Lhasa are filled with Tibetans who took part in the March 1989 anti-Chinese demonstrations. Due to shortage of space, a large number of prisoners are kept in the Sangyip military barracks. This has been revealed by a number of Tibetans who have recently arrived in Kathmandu.

Is it any surprising that the Chinese colonisers have now turned on their own people?

Not surprisingly our Swadeshi Stalinists (the comrades would consider this a compliment) have not surprisingly supported the massacre of the innocents at Tiananmen Square and praised the People’s Liberation Army for their ‘heroism’ in killing unarmed men and women.

And how has the Government of India reacted? Our Prime Minister says: “We have every indication that reports coming from China are not 100 per cent accurate. We would like to evaluate what the reality is before we say” (Indian Express, June 16). Presumably he is waiting for a Xinhua report channelled, no doubt, through the PIB, AIR and Doordarshan -all outstanding specimen of credibility!

How many more should die or be executed before “the reality” is “evaluated”?

*The original text can be accessed [here](http://www.freedomfirst.in/uploads/issues/pdf/402.pdf).*

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [Minoo Masani on the Raison D’être of Swatantra Party](https://spontaneousorder.in/minoo-masani-on-the-raison-detre-of-swatantra-party/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Minoo Masani on the Raison D’être of Swatantra Party

Original: https://www.spontaneousorder.in/p/minoo-masani-on-the-raison-detre-of-swatantra-party

Author: Spontaneous Order

Published: 2020-06-04T11:37:38.000Z

Topics: swatantra-party, nehru-socialism, nagpur-resolution, economic-freedom, peasant-proprietorship

> Founded in 1959, the Swatantra Party comprised of a diverse bunch of fellow travellers- Gandhian conservatives, zamindars, propertied peasants, businessmen, aristocrats, and classic liberals. The common rallying point was the increased threat of statis...

**Summary:**

Minoo Masani articulates the Swatantra Party's raison d’être as a classical-liberal bulwark against Prime Minister Nehru's Soviet-inspired economic planning and Fabian socialism, which dominated India's first decade of independence and stifled enterprise through heavy taxation, inflation, bureaucratic licenses, and regulations. He details growing discontent among middle classes, entrepreneurs, and peasants, exacerbated by the Congress Party's Nagpur Resolution—a three-pronged assault on rural life: land ceilings limiting income to around Rs.3,600 annually, coercive 'joint co-operative farming' akin to Soviet collectives, and state monopoly on foodgrains wholesale trade, threatening to dispossess farmers who comprise 52% of India's population. This sparked the 1959 formation of Swatantra as a broad anti-statist coalition of liberals, Gandhian conservatives, businessmen, and peasants, led by figures like Prof. N.G. Ranga. The party advocates peasant proprietorship with incentives like stable prices and inputs for food production, competitive private enterprise in industry supplemented by limited state heavy industries, opposition to state trade, and balanced development prioritizing consumer goods alongside capital goods. Masani contrasts this with failed collectivism elsewhere, drawing parallels to Japan's smallholder success and West Germany's social market economy, positioning Swatantra to liberate productive forces, prevent power concentration, and counter communism's drift.

**Key points:**

- Nehru's socialist planning prioritizes heavy industry over consumer goods, imposing bureaucratic hurdles that harass entrepreneurs and inflate costs for consumers.
- The Nagpur Resolution's land ceilings, collective farming, and foodgrains monopoly threaten peasant ownership, prompting Swatantra's formation.
- Swatantra champions self-employed peasant proprietors with production incentives and restricts state to essential heavy industries while favoring competitive private enterprise.
- The party seeks to avoid communism by promoting free enterprise, mirroring successes in Japan and West Germany.

**By Spontaneous Order**

* * *

*Founded in  1959, the Swatantra Party comprised of a diverse bunch of fellow travellers- Gandhian conservatives, zamindars, propertied peasants, businessmen, aristocrats, and classic liberals. The common rallying point was the increased threat of statism as the PM Pandit Nehru sought to mould the newly built Republic in his image. Dismayed at both the communist influence in the country and sway of Fabian socialism in policymaking, the public intellectual and politician Minoo Masani manoeuvred to build a broad-based coalition. The Swatantra Party emerged as an outcome as diverge interests converged on the rallying point of anti-statism. To commemorate the founding anniversary of the Party, produced below is an article written by Masani which explained the rationale of the Swatantra project.* 

For a decade now, Prime Minister Nehru, with his quaint blend of Soviet-style economic planning and British-model parliamentary democracy, has dominated the Indian intellectual scene. A faint challenge from an isolated pocket here and there is all he had to encounter. The fundamental thinking on which the Nehru government’s economic measures have been based is that, in an under-developed country such as India, a departure from the normal functioning of economic laws becomes necessary if the high expectations of material improvement raised in the minds of newly independent people are not to turn sour. So, the argument goes, the building up of heavy industry must, contrary to the normal sequence, precede consumer goods industries. The government has to play a particularly active role, both in establishing capital goods industries, such as steel and huge river-valley projects and in regulating the entire functioning of economic life, whether in industry or in agriculture. Like Russia and China, would not India, though not under political dictatorship, pull itself up by its bootstraps, performing in a short span of time what might otherwise take generations to accomplish? There can be no question that, during the first decade of independence, a large part of the Indian intelligentsia followed Mr Nehru in this line of thought.

Under the surface, however, second thoughts have been developing and discontent with the “socialist pattern” has been building up during the last few years. The middle classes have found themselves being ground down slowly by the inevitable consequences of excessively high taxation and of inflation slowly creeping over them. The consumer was made to pay more for the necessities of life through successive impositions of heavy excise duties. The investor was being taxed out of his inevitable surplus. The entrepreneur was being harried by bureaucratic regulation and interference. A businessman responding to the government’s call to undertake the manufacture of some scarce material for which there is an export market found that he had to trudge the dusty corridors of the New Delhi secretariat, moving from office to office in a never-ending attempt to obtain the various licences and permits. Those already in the field of manufacture have been known to spend several days every month, flying up to Delhi to answer queries or remove some roadblock in the way of obtaining the necessary facilities. New constraints on the people’s enterprise were being systematically imposed, and justified by reference to the socialist doctrine. Fear, hesitancy and uncertainty as to what the government would do next to have become a feature of economic life.

On the political plane, the evils of interference by political bosses in the administration of the country and the pressure brought to bear on officials have been causing demoralisation among civil servants and destroying public confidence in the government of the day. Interference on ideological grounds has been elevated into a principle. The cult of personality has smothered free discussion even within the ruling party itself. The bulk of the members of the Congress Party, who think along liberal or Gandhian lines, have been intimidated into silence by a few confused Marxists at the head of the party. In the absence of an alternative government, discontent has been funnelled increasing into Red channels, and the kind of polarization that took place in China in the ’40s between the Kuomintang and the Communist Party was becoming noticeable in the State of Kerala and was in danger of developing elsewhere. Even so, only the wildest optimist could have foreseen the emergence of a major political party which advocated rejecting the entire pattern of planning and economic development that has been followed during the past decade. Only a year ago, I myself tried unsuccessfully to weld together several of the local groups which have now come together under the umbrella of this new national party. How has this new party of freedom finally come about?

The “Nagpur Resolution” which the Congress Party adopted last January constitutes a three-pronged attack on the way of life in the Indian village. The first prong of the attack is the imposition of ceilings on land holdings, which in practice would deprive the farmer of all land that he might own in excess of what would bring in an income of around Rs.3,600 in the year. This measure would break the back of the middle classes in the villages and deprive them of the capacity to withstand the inroads of governmental authority.

The second prong is the proposal which is euphemistically called “joint co-operative farming”. Barring its name, it has nothing in common with the principles of genuine co-operation as practised in Denmark, England and other countries. It is, in reality, an attempt at introducing collective farming of the Soviet-Chinese pattern through the pooling of land, the uprooting of boundaries and the establishment of big cooperative farms. Even if this plan were brought about without coercion it must, in present-day conditions in India, inevitably mean management by officials of the government and the reduction of the farmer to the status of a landless labourer. Heedless of the lessons of the failure of collective farming in the Iron Curtain countries and ignoring the magnificent achievements of small-scale peasant farming in Japan, Prime Minister Nehru insists that this change would result in increased food production. It is also supposed to constitute a “higher way of life” than the age-old method of a man and his family cultivating land which is their own.

The third prong is the attempt to establish a State monopoly in the wholesale trade in foodgrains, thereby eliminating thousands of traders and leaving the farmer face to face with the monopoly, which can dictate to him the price at which he must sell his produce.

It was this ill-conceived Nagpur Resolution which acted as the spark-plug to the political revolt. The urban middle class and the business class, helpless against the hold of the Congress Party on rural areas, have found a new ally. The reaction of landed farmers, who with their families constitute at least 52 per cent of India’s population, has been instinctive. In a country where most peasants live in mud huts, own little more than a plough, and if they are lucky, a pair of bullocks, the piece of land that they have is all they can call their own. When Prime Minister Nehru brushes aside the plea for peasant proprietorship by pointing out that most of the peasants own small, fragmented farms and should therefore not object to the pooling of their lands, it sounds to the peasant-like asking a mother not to mind parting with her child because it is only a tiny infant. So it was not surprising that the All-India Agriculturists Federation convened the initiating meeting at Madras on June 4, where the decision to launch the Swatantra Party was taken. Professor N. G. Ranga, a leading spokesman of the Indian peasantry, resigned his post as Secretary of the Congress Party in Parliament to become Chairman of the new party.

Perhaps, the best parallel to the character of the Swatantra Party in Western countries is that provided by such as the Smallholders’ Party in Hungary. In the field of agriculture, the paramount need for increased food production is stressed, and it is felt that this is best attained through the self-employed peasant proprietor who is interested in obtaining the highest yields from his land. The peasant farmer should be given all psychological and material inducements for greater production without disturbing the harmony of rural life and without affecting ownership or management. Among such incentives would be a fair and stable price, the provision of credit and the supply of water, tools, seeds and fertilisers.

In the field of industry, the Swatantra Party believes in the incentives for higher production and expansion that are inherent in a competitive enterprise, with necessary safeguards against monopoly. The party would restrict State enterprise to the field of heavy industries, where essential, in order to supplement the notable achievements of such private enterprises as, for example, the giant Tata Iron & Steel Company in Jamshedpur, and such national services as the Railways. The party has declared itself to be in favour of a balanced development of capital goods industries, organised consumer goods industries and rural industries that afford supplementary employment to a large number of unemployed and underemployed people on the land. The party is opposed to the State entering the field of trade. It believes in free choice for the investor, the producer and the consumer.

Through such a positive policy, the Swatantra Party believes that agricultural production can be set on its feet in the way that has been so successfully achieved in Japan since World War II. Thus can be provided a sound foundation on which the industrial structure of the country can be reared. While deprecating the policy of asking the present generation to tighten its belt (which in India, it does not possess) for the sake of generations yet unborn, the Swatantra Party believes that the policies it suggests would liberate the productive forces from the restrictive effects of bureaucracy, so that a much quicker expansion of industry and a more rapid rise in the standard of life of the people can be brought about, just as was accomplished by the successful implementation of Dr. Erhard’s policy of social enterprise in West Germany. Such a policy would be in consonance with the established Indian principle that those who possess wealth should not run the government, while those who control the army and the police should not be in control of agriculture and industry. The party’s policy would prevent the concentration of political and economic power in a few hands. The way is thus opened for the building up of a broad-based coalition of the peasantry in the villages and the middle classes in the cities.

The whole world, including the peoples in the *Iron Curtain* countries, is moving away from the shibboleths of collectivism. The danger of India’s being committed to outmoded dogmas which the rest of the world is discarding must be combated. By rallying India against Communism and by educating public opinion about the moral gulf between Communism and the freeway of life, the new party will eliminate the danger of the current unconscious drift towards the precipice. The party’s Statement of Principles allows no co-existence between it and the ideology of Communism, and the leading spokesman of the party has a long record of struggle against Communist totalitarianism.

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [SO Musings: De-Stalinisation Versus Communism](https://spontaneousorder.in/so-musings-de-stalinisation-versus-communism/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Already in a Mega-Recession, India Needs a Venture Capitalist of Last Resort

Original: https://www.spontaneousorder.in/p/already-in-a-mega-recession-india-needs-a-venture-capitalist-of-last-resort

Author: Spontaneous Order

Published: 2020-06-03T12:30:05.000Z

Topics: financial-crisis, government-intervention, privatization, venture-capital

> The government is focused on saving companies from Covid-induced death. The Reserve Bank of India (RBI) has acted swiftly as lender of last resort. It has mandated loan moratoria, injected enormous liquidity into the financial system, and joined hands w..

**Summary:**

India faces a mega-recession with GDP potentially falling 5% or more, the worst since 1929, leading to massive bankruptcies that the Insolvency and Bankruptcy Code cannot handle efficiently. While the RBI has served as lender of last resort through loan moratoria, liquidity injections, and guarantees, this is insufficient for illiquid corporate giants. Harvard's Jeremy Stein proposes a 'venture capitalist of last resort': government injecting equity into too-big-to-fail firms, as the US did via TARP in 2008, nationalizing Citibank, Bank of America, GM, Chrysler, AIG, Fannie Mae, and Freddie Mac among 780 investments—yielding 637 profits, 138 losses, and a net $50 billion gain upon re-privatization. India should emulate this classical-liberal pragmatic approach: GoI buys equity cheaply in fallen giants, stabilizes them, and re-privatizes at profit, avoiding bank-killing loans. However, India's history of permanent nationalizations under Indira Gandhi, PSB mergers for failed banks like Yes Bank, and reluctance to sell SUUTI's UTI shares (up tenfold) poses risks—vested interests block re-privatization, potentially turning crisis aid into enduring state ownership.

**Key points:**

- RBI's lender-of-last-resort measures are inadequate for mega-recession bankruptcies; government must act as equity-injecting VC of last resort.
- US TARP nationalized major firms temporarily, achieving $50 billion net profit through re-privatization.
- India needs a TARP-like program to buy low, nurse giants back to health, and sell high, preventing bank collapses.
- India's political history risks converting temporary equity stakes into permanent nationalizations, as seen with SUUTI shares.

**By Swaminathan SA Aiyer**

* * *

The government is focused on saving companies from Covid-induced death. The Reserve Bank of India (RBI) has acted swiftly as lender of last resort. It has mandated loan moratoria, injected enormous liquidity into the financial system, and joined hands with the Centre to guarantee a wide range of loans.

Next, we must plan for a terrible year ahead in which GDP falls by 5% or more, the most calamitous collapse since 1929. Bankruptcies galore are inevitable, including very big ones. The Insolvency and Bankruptcy Code (IBC) has proved very tardy in old cases and cannot possibly cope with the coming flood of major bankruptcies.

**Veni, Vidi, VC**

Jeremy Stein of Harvard University recently proposed an appealing solution in a Princeton webinar. In most recessions, the central bank acts as lender of last resort, flooding the financial system with money to revive companies suffering from illiquidity, as distinct from insolvency. But in a megarecession, such as the 2008 Great Recession, a lender of last resort may not be enough. We may also need a venture capitalist (VC) of last resort, with enough patience and deep pockets to inject massive amounts of equity into corporate giants too big to be saved by ordinary VC firms.

The US government played this role in 2008. Under the Troubled Asset Relief Programme (Tarp), President Barack Obama, in effect, nationalised many of the biggest US companies through an injection of fresh equity and allotment of warrants at ultra-low prices. The companies taken over included the two biggest commercial banks, Citibank and Bank of America, two of three top auto companies, General Motors and Chrysler, and the biggest insurance company, AIG (American International Group). The two big mortgage underwriters, Fannie Mae and Freddie Mac, were also taken over and resold. In all, the US treasury made 780 equity investments, of which 637 ended in profit and 138 in losses, for a net profit exceeding $50 billion.

Hopefully, India will not suffer the collapse of so many corporate giants. But a mega-recession will surely sink some giants and thousands of smaller companies. Banks cannot be told to keep rescuing these companies with loans that cannot be repaid — that will kill the banks. The right route will be a Tarp-like programme, where GoI nationalises fallen giants at a low price, nurses them through the crisis and then re-privatises them at a profit. This will exemplify Jeremy Stein’s idea of the government as a VC of last resort.

In India, government takeovers are usually for keeps. Indira Gandhi nationalised solvent companies and also took over hundreds of sick private sector companies. These were rarely turned around or resold. In recent times, some private sector banks went bust and were merged with larger public sector banks (PSBs). Yes Bank has been kept alive through equity infusion by not just the State Bank of India (SBI) but also seven other PSBs, creating a unique shareholding pattern for a new, independent management.

**A Sliver of Silver**

The only thing remotely akin to takeover for resale in India related to the Unit Trust of India (UTI). This organisation sank in a crisis in the early 2000s, and the government created the Specified Undertaking of UTI (SUUTI) to take over UTI’s large corporate shareholdings, including blue chips like ITC and Axis Bank. The price of these shares has risen more than tenfold, yet GoI has been reluctant to sell the shares to curb its fiscal deficits. Only a small proportion of SUUTI shares has been sold so far. This reluctance to sell is a hard fact of Indian politics: once the government comes to own an asset, vested interests will do everything possible to thwart re-privatisation.

In the US, the government does not believe in taking over private sector giants, and hence there was never any doubt about re-privatisation. But, in India, if the government acts as VC of last resort to stem mass bankruptcies, how does one ensure that this does not become an excuse for permanent nationalisation?

*Read the rest of this article [here](http://swaminomics.org/of-patience-deep-pockets/)*. *This article was originally published on the Economic Times website on 3rd June 2020.*

Read more: [Modi has political capital to reform the power sector](https://spontaneousorder.in/modi-has-political-capital-to-reform-the-power-sector/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Modi has political capital to reform the power sector

Original: https://www.spontaneousorder.in/p/modi-has-political-capital-to-reform-the-power-sector

Author: Spontaneous Order

Published: 2020-06-01T16:12:20.000Z

Topics: power-sector-reforms, discom-privatization, electricity-subsidies, modi-package

> In Prime Minister Narendra Modi’s Rs 20-trillion package, power reforms are the most urgent. Electricity prices have long been political prices unrelated to costs, efficiency or morality. For decades, chief ministers took kickbacks on power contracts an

**Summary:**

Prime Minister Narendra Modi's Rs 20-trillion package provides a critical opportunity to reform India's chronically mismanaged power sector, where political pricing unrelated to costs has led to massive inefficiencies and losses. For decades, chief ministers subsidized electricity for farmers and urban voters off-budget, funded by high industrial tariffs that hurt export competitiveness, while taking kickbacks and ignoring theft. State electricity boards and discoms accumulated nearly Rs 1,00,000 crore in losses, with Aggregate Commercial and Transmission (ACT) losses peaking at 40% in the 2000s, now down to 18% but needing to fall below 10%. Past efforts like regulators and the 2015 Ujjwal Discom Assurance Yojana (UDAY) failed due to chief minister sabotage. The new package allows states extra borrowing of 2% of GDP conditional on power reforms: competitive tenders for transmission and generation to curb corruption, privatization of distribution, better billing/collection, and theft reduction. In Uttar Pradesh, innovations like outsourcing rural collections to franchisees, urban smart metering, and pre-paid cards with discounts show promise for incentive-compatible solutions. With BJP ruling most states including laggards like UP, Modi has the political capital to drive these classical-liberal reforms—emphasizing markets, competition, and privatization—to boost economic growth and jobs.

**Key points:**

- India's discoms face Rs 1,00,000 crore losses from political subsidies, theft, and ACT losses now at 18% but needing reduction below 10%.
- Modi's Rs 20-trillion package ties 2% GDP extra state borrowing to power reforms including competitive tenders, privatization, and improved collections.
- Past reforms like UDAY failed due to chief minister interference, but Modi's control over most states offers new impetus.
- Uttar Pradesh innovations—franchisee collections, smart metering, pre-paid cards—demonstrate practical, incentive-aligned steps to fix rural and urban issues.

**By Swaminathan SA Aiyer**

* * *

In Prime Minister Narendra Modi’s Rs 20-trillion package, power reforms are the most urgent. Electricity prices have long been political prices unrelated to costs, efficiency or morality. For decades, chief ministers took kickbacks on power contracts and forced state electricity boards (and, after the break-up of SEBs, the distribution companies or discoms) to sell electricity free or at highly subsidised rates, to farmers and urban dwellers. This aimed to win votes without providing the required subsidies from the budget, ruining power systems across India. High industrial tariffs were used to subsidise farmers, but the resultant costly electricity affected the competitiveness of Indian exports, a major problem today.

Older reforms created electricity regulators to set fair tariffs, but they typically did the bidding of chief ministers. Discoms today have enormous accumulated losses of nearly Rs 1,00,000 crore and have massive arrears of payment to suppliers like Coal India, the Railways and equipment manufacturers. Aggregate Commercial and Transmission (ACT) losses, no more than 6% in the best countries, exceeded 40% in India in the 2000s since chief ministers gave no priority to efficiency or checking rampant theft. The Ujjwal Discom Assurance Yojana of 2015 was supposed to induce the states to reform their power sectors, check power theft, slash transmission and commercial losses, minimise cross subsidies and restore the health of the discoms. Alas this did not happen.

Now, Modi’s Rs 20-trillion package allows the states additional borrowing of 2% of GDP, subject to reforms of various sectors including power. To qualify, states must select transmission and generation developers by competitive tender to cut corruption and cronyism; privatise power distribution; improve billing and collection; and check theft. ACT losses are down from a peak of 40% to 18% but must be slashed below 10%. Modi’s Sowbhagya scheme, providing electricity to every household, is socially laudable but has meant a huge expansion of the power network with little revenue, deepening commercial losses.

It remains to be seen whether the new reforms will have more success than earlier attempts, which were sabotaged by chief ministers. Modi badly needs reforms to accelerate the economy and create jobs. His party also rules most states, including the worst performers like Uttar Pradesh. He could give a new impetus to reforms.

My visit to Uttar Pradesh last January revealed imaginative political and bureaucratic efforts but huge hurdles too. Sowbhagya provided an additional 12 million connections at huge cost with little revenue. UP energy secretary Arvind Kumar sought to outsource the collection of rural dues. He appointed village level franchisees — ration shopkeepers, bank correspondents, self-help groups and co-operatives — to collect electricity dues for a fee, pass them on to aggregators, and thence to the discoms. These shopkeepers were online, making collection from them simple. This was a promising start.

Smart metering was unfeasible in rural areas for want of telecom. But smart metering had been initiated in urban areas, enabling remote reading of meters and billing, with electronic payments speeding collection. This also ended meter manipulation and enabled remote disconnections of defaulters. Earlier local mobs would thwart officials from disconnecting defaulters, and an acute police shortage meant thana help was unavailable. Pre-paid electricity cards carrying a 2% discount have been offered to consumers, avoiding the normal security deposit and possible harassment by collectors. Every step was incentive-compatible, a good practice.

*Read the rest of the article [here](http://swaminomics.org/modi-has-political-capital-to-reform-the-power-sector/). This post was originally published on the Times of India website on 31st of May 2020.*

Read more: Out Of This COVID-19 Disaster Comes Privatisation, And Other Reforms

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## SO Musings: De-Stalinisation Versus Communism

Original: https://www.spontaneousorder.in/p/so-musings-de-stalinisation-versus-communism

Author: Spontaneous Order

Published: 2020-05-29T16:17:06.000Z

Topics: de-stalinisation, communism, soviet-union, marxism-leninism

> Nikita Khrushchev’s denouncement of Stalin and his criminal rule at the 20th Congress of the Communist Party in 1956 remains an important milestone in the history of the now-discarded project. In moving away from the totalitarian rule of Stalin, some co

**Summary:**

In a 1961 Freedom First article, Adam Adil critiques Nikita Khrushchev's de-Stalinisation efforts following his 1956 speech at the 20th Congress of the Communist Party, arguing they represent superficial changes within an inherently totalitarian Marxist-Leninist system. Adil contends that Stalin's brutal rule was a logical extension of Marx's violent class struggle, implemented through Lenin's Bolshevik revolution and single-party dictatorship. Khrushchev's promotion of 'peaceful co-existence' with capitalism contrasted with Maoist China's adherence to inevitable conflict, fracturing the 'monolithic' communist world—Soviet Union backed by most East European states, China by Albania, and splitting non-communist parties. Superficial acts like removing Stalin's mummified body from Lenin's Mausoleum and renaming places fail to address leaders' complicity in three decades of terror, with no expressions of guilt. Adil dismisses Khrushchev's 22nd Congress claims of socialist resilience as wishful thinking amid exposed rivalries and stresses. From a classical-liberal lens, true reform demands confronting Marxism-Leninism's core tenets, a step not taken until Gorbachev decades later.

**Key points:**

- De-Stalinisation exposed fractures in the communist bloc, pitting Soviet 'co-existence' against China's inevitable war stance.
- Soviet leaders denouncing Stalin evade their own roles in perpetuating his reign of terror for nearly three decades.
- Stalinism logically follows from Marx's class struggle via Lenin's dictatorial methods, making partial reforms insufficient.
- Khrushchev's assertions of socialist strength at the 22nd Congress ignore the system's internal contradictions and rivalries.

**By Spontaneous Order**

* * *

*Nikita Khrushchev’s denouncement of Stalin and his criminal rule at the 20th Congress of the Communist Party in 1956 remains an important milestone in the history of the now-discarded project. In moving away from the totalitarian rule of Stalin, some contemporaries saw hope for a more democratic and tolerant USSR where the party would eschew the personality cult.*

*However, Adam Adil writing in the Freedom First in 1961, dismissed the destalinization project of Khrushchev. He questioned the complicity of the leaders who now denounced Stalin’s brutality in perpetuating the same system. Moreover, as Khrushchev promoted the policy of peaceful co-existence with the capitalist sphere, the more strident Maoist China took the Stalinist line of an inevitable conflict between capitalism and communism.* 

*For Adil, Stalin’s totalitarian state was a logical continuation of the Marxist prescription via Leninist methodology. Marx’s advocacy of violent class struggle translated into the Bolshevik revolution to the dictatorship of the single party in the name of the proletariat. Adil argued that Lenin himself had dictatorial tendencies and hence any bid to destalinize would need to confront the basic tenets of Marxism-Leninism. It would take a Mikhail Gorbachev to unravel the system but in 1961 that laid way ahead in the future.*

*Produced below is an excerpt from the article.*

In his speech on the opening day of the 22nd Congress of the Soviet Communist Party, Mr. Khrushchev spoke brave words: ‘As a mighty tree with deep roots does not fear any storm, so that new socialist world does not fear any adversary or shock.’ From what followed at the Congress itself and subsequently, one can safely conclude that Mr. Khrushchev’s assertion was more in the nature of wishful thinking than a statement of fact. For the first time in its history the communist world has begun to show up, more pointedly and more abjectly, its internal contradictions, its political and psychological stresses, clash of its personalities and their mutual rivalries and bickerings. It is obvious that the “socialist” world is no longer a mighty tree ( if ever it was ) with deep roots and it has to contend with its own problems as much as with the external ones.

The de-Stalinisation process which Mr. Khrushchev set in motion with his speech at the 20th Party Congress in 1956 and his world shocking admissions about the Stalin regime, (those were no revelations as they were known throughout the world for a number of years), has been apparently going on still; and this itself has divided the communist world into two, hostile camps: one represented by the Soviet Union, which decries Stalin and talks about “co-existence” and the other by China, which extols Stalin and speaks about the inevitability of war between capitalist and socialist nations with the ultimate destruction of capitalism. Russia enjoys the support of most East European Communist countries and China has the backing of Albania, the tiny Muslim country on the Mediterranean. The communist parties in the various non-communist countries are generally divided into factions, which owe their loyalties to one or the other camp within the communist world. All this indicates that what was claimed to be the ‘monolithic community’ of the communist world has received a shattering blow.

The removal of Stalin’s mummified body from Lenin’s Mausoleum in the Red Square and its burial at an obscure place, and the changing of the name of the cities, towns or streets which were, for over two decades called after Stalin, represents the dramatic finale of the efforts of the present Communist rulers of Russia to extricate themselves from their past and put on a new garb of legitimate successors of Lenin. Is it not a fact that each one of the present leaders of the Soviet Union was closely associated with Stalin’s regime and abetted and helped in the imposition of a reign of terror and death over the Russian people for nearly three decades? It is rather intriguing that none of these soviet leaders has given expression to a sense of guilt or repentance for his own role in the perpetuation of Stalinist tyranny and in the cold murder of thousands of their own innocent comrades.

*The full text of the article can be accessed [here](http://www.freedomfirst.in/uploads/issues/pdf/115.pdf).*  

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [Memories of SV Raju](https://spontaneousorder.in/memories-of-sv-raju/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Out Of This COVID-19 Disaster Comes Privatisation, And Other Reforms

Original: https://www.spontaneousorder.in/p/out-of-this-covid-19-disaster-comes-privatisation-and-other-reforms

Author: Spontaneous Order

Published: 2020-05-27T15:00:18.000Z

Topics: privatisation, psu-reform, economic-liberalisation, covid-response

> After Prime Minister Narendra Modi’s announcement of a₹20 trillion revival package, and finance minister Nirmala Sitharaman’s elucidation of the measures in five instalments, the response was dismal. Sensex crashed by 1,069 points on Monday. Goldman

**Summary:**

Prime Minister Narendra Modi's ₹20 trillion COVID-19 revival package, detailed by Finance Minister Nirmala Sitharaman, drew a dismal response—Sensex crashed 1,069 points, with Goldman Sachs forecasting GDP growth at -5% and former chief statistician Pronab Sen at -9%—acting as a sedative to ease pain rather than a true economic stimulus. Yet, from this crisis emerges a historic turning point in reform, as the government dramatically embraces privatization, not wasting the opportunity per the adage 'Never waste a crisis.' In strategic industries, it will notify a list limiting PSUs to a maximum of four alongside private competitors, implying consolidation of all public sector banks into four mega-banks. In non-strategic sectors, all PSUs will be privatized where feasible, with dud units possibly left unsold. This full-blooded liberalization overrides past opposition from BJP allies like the Bharatiya Mazdoor Sangh and Swadeshi Jagran Manch, who blocked moves like RCEP joining. The COVID-19 urgency ends Modi's cautious incrementalism, paving the way for drastic medium-term changes to accelerate growth post-crisis—a development classical liberals should applaud.

**Key points:**

- Modi's package mandates privatizing all PSUs in non-strategic sectors and limiting strategic sectors to a maximum of four PSUs.
- Public sector banks will be consolidated into four mega-banks to compete with private players.
- COVID-19 crisis overrides BJP internal opposition from BMS and SJM, enabling bold privatization.
- The ₹20 trillion package is a sedative, not a stimulus, but catalyzes liberalization for post-crisis growth.

**By Swaminathan SA Aiyer**

* * *

After Prime Minister Narendra Modi’s announcement of a₹20 trillion revival package, and finance minister Nirmala Sitharaman’s elucidation of the measures in five instalments, the response was dismal. Sensex crashed by 1,069 points on Monday. Goldman Sachs forecast that GDP growth this year would crash to –5%. Former chief statistician Pronab Sen felt it might be –9%. Alas, the package is a sedative to ease the pain, not a stimulus that will revive a crashing economy. Sedatives have their uses, but must not be mistaken for stimuli, let alone cures.

Yet, the package might just go down in history as a turning point in economic reform. ‘Never waste a crisis’ is an old saying, and Modi is not wasting this one. But he and Sitharaman have not spelt out details of many proposed reforms in land, labour and the legal system. But their dramatic embrace of privatisation is unambiguous and stunning.

**Home-Groan Logic**

The Bharatiya Mazdoor Sangh (BMS), BJP’s labour wing, has always opposed privatisation. The Swadeshi Jagran Manch (SJM) has never been enthusiastic either, worrying that public sector undertakings (PSUs) may be acquired by hated foreigners. Last year, these two organisations campaigned against India joining the Regional Comprehensive Economic Partnership (RCEP), a free trade area of 15 nations including China, and Modi surrendered to their viewpoint. Despite his great victory in the general election, he felt he lacked the political capital to overrule anti-reformers in his party. That seemed to confirm his image as a cautious incrementalist.

But the Covid-19 crisis has ended business-as-usual and created an urgent need for drastic medium-term changes that will accelerate growth once this crisis eases. GoI will notify a list of strategic industries in which a maximum of four PSUs will coexist with private-sector competitors. This implies all public sector banks (PSBs) will be consolidated into four mega-banks. In all non-strategic sectors, all PSUs will be privatised, as may be feasible (some dud PSUs will attract no bidders). This full-blooded liberalisation deserves applause.

*The rest of the article can be accessed [here](http://swaminomics.org/push-has-come-to-shove/). This post was originally published on the Economic Times website on 20th of May 2020*.

Read more: [Cleaner, And Now Cheaper: Solar Power Beats Coal](https://spontaneousorder.in/cleaner-and-now-cheaper-solar-power-beats-coal/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Cleaner, And Now Cheaper: Solar Power Beats Coal

Original: https://www.spontaneousorder.in/p/cleaner-and-now-cheaper-solar-power-beats-coal

Author: Spontaneous Order

Published: 2020-05-26T14:24:24.000Z

Topics: solar-power, renewable-energy, energy-finance, power-sector-reform

> The COVID crisis has diverted attention from a major breakthrough that should leave all smiling. The latest auction for 400 MW of solar power, including storage, has been won by ReNew Power with a levelised tariff of Rs 3.52/unit over 15 years. The equi..

**Summary:**

Swaminathan S.A. Aiyer highlights a breakthrough in India's energy sector: ReNew Power won a 400 MW solar-plus-storage auction at a levelised tariff of Rs 3.52/unit over 15 years, cheaper than equivalent thermal power at Rs 4.5/unit, even without coal taxes or subsidies. This enables bulk future generation from solar, with coal limited to backup and no new capacity needed, implying stagnant emissions without carbon taxes. Solar's falling panel prices and lithium-ion storage achieve 80% annual capacity utilization (70% minimum monthly), matching thermal efficiency but at lower cost. Thermal plants' forced back-down from 75% to 55-58% utilization requires new tariff formulas to cover fixed costs. High Indian interest rates (10-11%) hinder competitiveness versus Middle East's 4%; cheaper finance could drop tariffs to Rs 2/unit. Aiyer urges massive World Bank loans to public financiers for on-lending, guarantees to slash rates, and tapping BRICS/AIIB funds, emphasizing market-driven renewables over state intervention.

**Key points:**

- ReNew Power's Rs 3.52/unit solar-plus-storage tariff beats thermal power's Rs 4.5/unit, enabling subsidy-free solar dominance.
- No new coal capacity needed; old inefficient plants replaced, stabilizing emissions without carbon taxes.
- High 10-11% interest rates in India inflate costs; access to 4% Middle East-like rates could cut tariffs to Rs 2/unit.
- World Bank should provide billions in loans/guarantees via PFC/REC for solar on-lending, supplemented by BRICS/AIIB.

**By Swaminathan SA Aiyer**

* * *

The COVID crisis has diverted attention from a major breakthrough that should leave all smiling. The latest auction for 400 MW of solar power, including storage, has been won by ReNew Power with a levelised tariff of Rs 3.52/unit over 15 years. The equivalent thermal power tariff would have been closer to Rs 4.5/unit. Solar energy has beaten coal-based power hollow, and would do so even if taxes and cesses on coal were lifted. The bulk of future power generation can be solar without subsidies.

Coal-based thermal power will still be needed as a backup, but very little new capacity is required. Meanwhile, inefficient old thermal plants will be replaced by efficient new ones. That implies a virtual standstill in future emissions of carbon dioxide, sulphur, mercury, particulate matter and other pollutants. India does not need additional carbon taxes to induce a shift to renewables. The shift is already here.

Solar power has looked a bright prospect for years since the price of solar panels keeps falling. However, solar power is typically available only 30% of the time — it is not available at night or when clouds and pollution block the sun. However, thermal plants can work 80% of the time.

During the day, India now has excess power capacity. Solar generation is given priority, while thermal stations have to back down till sunset. Priority to solar power makes economic sense since it entails no running costs, whereas thermal power entails fuel costs. But thermal plants that once ran 75% of the time have been forced to back down to just 55-58% to accommodate rising solar production. This hidden cost of solar power cannot be borne fully by the thermal sector, which needs a new tariff formula to cover capital costs on generation and transmission when forcibly idled.

In the giant 1,200 MW Bhadla solar park in Rajasthan, the winning auction in 2018 was just Rs 2.44/unit. But it had no provision for storage, something experts estimated would add Rs 2/unit to the tariff. That meant solar power was not cheaper than thermal power and could not be switched on and off at will, as thermal plants could.

However, the new 400 MW deal won by ReNew Power includes enough storage to ensure 80% capacity utilisation over a year and not less than 70% in any month. This is not quite 24/7 power, but is as efficient as thermal power and much cheaper. That is why it is a breakthrough.

ReNew Power will be using lithium-ion storage batteries to store excess power during the day and releasing it later to achieve its capacity target. Elon Musk of Tesla plans to mass-produce lithium-ion batteries on a grand scale to greatly lower their prices. While designed primarily for electric cars, such batteries also make solar storage cheap.

The biggest problem Indian solar companies face is the high rate of interest. This matters a lot in an industry with high capital costs. RBI has lowered its lending rate, but banks are too risk-averse to lend to solar companies, which still pay 10-11% interest on the bulk of their borrowing from public sector entities like Power Finance Corporation and Rural Electrification Corporation. By contrast, solar plants in the Middle East can borrow at just 4% in their own currencies. If Indian companies could access money as cheaply, the cost of power plus storage could fall to just Rs 2/unit, transforming the competitiveness of Indian industry. India must aim for this.

The World Bank no longer lends for coal-based plants but is keen on renewables. It cannot lend directly to private sector companies. One solution is to negotiate massive loans from the World Bank to Power Finance Corporation and Rural Electrification Corporation, earmarked for on-lending to the solar companies with a small mark-up

World Bank loans to India can be repayable over 19 years with a 5-year moratorium and interest at LIBOR (now just 0.17% in dollars) plus 1.4%.  Small loans are also available from the Bank’s Clean Technology Fund and IFC, the Bank’s private-sector lending arm. But past Bank loans have been less than $100 million – peanuts for a solar industry that now needs billions. The Bank should step up solar lending hugely.

Problem: this could hit limits on Bank lending to any one country. So, it can be supplemented by Bank’s power to guarantee commercial loans to the private sector, a power grossly underutilised. That can slash the interest rate. New Institutions like the BRICS Bank and Asian Infrastructure Investment Bank can be tapped too. That is mostly Chinese money, but so what?

*This post was originally published on the Times of India website on 24th of May 2020, and can be accessed [here](https://timesofindia.indiatimes.com/blogs/Swaminomics/cleaner-and-now-cheaper-solar-power-beats-coal/).*

Read more: [So Musings: The Perils of State Support](https://spontaneousorder.in/so-musings-the-perils-of-state-support/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## So Musings: The Perils of State Support

Original: https://www.spontaneousorder.in/p/so-musings-the-perils-of-state-support

Author: Spontaneous Order

Published: 2020-05-22T17:51:49.000Z

Topics: state-patronage, intellectual-freedom, indian-liberals, liberal-thought

> Public intellectuals and institutions like think-tanks essentially dabble in ideas, both to explain the world and help change it. The mechanism of the entrenched power, if exclusionary, often poses an obstacle to widespread prosperity and human flouris...

**Summary:**

Public intellectuals, especially liberals wary of state power's monopoly on violence, should view the relationship between ideas and the state as fundamentally contradictory, argues Govind Talwalkar in his 1986 Freedom First article, as highlighted by Spontaneous Order. Talwalkar contends that political power requires lying—as Plato admitted rulers must deceive for the city's benefit—while intellectual pursuits demand truth and beauty, making state patronage dangerous. It breeds inefficiency, subservience, mediocrity, and nepotism, evident in India's ideologically captured public universities and government-funded research institutions controlled via funding and appointments. Historical examples like Nazi Germany, Fascist Italy, Communist states, poets Osip Mandelstam and Solzhenitsyn, and even democratic leaders illustrate the conflict, yet intellectuals must persist in speaking truth to power without arrogance or craving state recognition. Talwalkar's classical-liberal prescription: intellectual enterprises must distance themselves from state support to uncover oppression and foster human flourishing, rather than perpetuating a closed society.

**Key points:**

- Intellectual morality requires uncovering state oppression and speaking truth to power, in direct opposition to politicians' need to lie.
- State patronage of intellectuals and creative work leads to inefficiency, subservience, mediocrity, and nepotism, as seen in India's public universities.
- Liberals should reject manning state-funded institutions to avoid ideological capture enabled by government control of funding and appointments.
- Intellectuals must maintain independence from the state, resenting its insolence without tolerating their own arrogance or hypocrisy.

**By Spontaneous Order**

* * *

*Public intellectuals and institutions like think-tanks essentially dabble in ideas, both to explain the world and help change it. The mechanism of the entrenched power, if exclusionary,  often poses an obstacle to widespread prosperity and human flourishing. Intellectuals, in this regard, uncover the operation of power and end up speaking truth to power. Liberals, in particular, tend to be wary of power exercised by the state, given its legitimate monopoly over violence.*

*How should then the liberals see the relation between intellectuals and the state? In a 1986 article published in Freedom First, the prolific Marathi editor Govind Talwalkar provides an answer. For him, the pursuit of political power and intellectual endeavours are fundamentally contradictory undertakings. The former involves lying as business as explained by Plato while the latter is concerned with telling the truth and also beauty in case of literature. As such, intellectual morality ought to turn into a project of uncovering state oppression.* 

*Talwaklar further argues against the state patronage of intellectual and creative undertakings, for it breeds inefficiency and makes intellectuals subservient to the state. Additionally, Talwalkar warns against the tendency of intellectuals to man the state-funded institutions only to perpetuate mediocrity and nepotism. The public universities and government-funded research institutions in India are the prime examples of ideological capturing, enabled by state control of funding and appointments. The implication of Talwalkar’s writing couldn’t be more explicit: intellectual enterprises would do well to maintain distance from state patronage and to keep speaking truth to power.*

*Produced below is an extract from the article.*

The modern state is all pervasive and the world of letters cannot function completely independent of it. But the role of the state and that of letters is contradictory if not in conflict with each other. Ideological states pledge themselves to control all aspects of human activity. Fired by a certain philosophy, they want to build an utopia and, what is worse, they concentrate excessive power and build a closed society.

Plato the first philosopher-statesman had no compunction in accepting the fact that it was the business of the rulers to lie. In the Republic Plato wrote: “it is the business of the rulers of the city, if it is anybody’s business to tell lies, deceiving both its enemies and its own citizens for the benefit of the city.” He urges that these are useful only as medicine, but the ruler of the state must not behave like some of those ordinary doctors who have no courage to administer strong medicines. He must be a more courageous man, since he must be determined to administer a great many lies and deceptions – of course for the benefit of the ruled. In this sense all modern rulers and politicians are ‘Platonists.’

Literature as philosophy must seek truth as well as beauty and cannot reconcile itself with politics or the state. So, for centuries we have witnessed a conflict between the two and many writers, poets, and intellectuals have been condemned to poverty and prisons, even to sacrificing their lives.

Nazi Germany, Fascist Italy, many South American states and many Communist states offer examples. Osip Mandlestam’s life is a moving account of a poet’s struggle and Solzhenitsyn a living example of the undaunted spirit.

If it is the business of the ruler to lie, it is the business of the writers to tell the truth. lt is not only totalitarian states that strangulate truth; democratic governments too do the same. ln Truth and Power, Mr. Hans Morgenthau wrote: “The President of the United States, too can do almost anything. He can play with truth, deform it and discard it at his whim. But there is one thing he cannot do, he cannot still the voice of truth.” Therefore the intellectuals have to stick to their guns. “In the face of this misunderstanding and scorn for the function the intellectual can and must perform for the political sphere, the intellectuals of America can do one thing; live by the standard of truth – that is their peculiar responsibility as intellectuals and by which the man of Power will ultimately be judged as well,” Morgenthau averred.

However, it is not my contention that in a democratic society the world of letters should all the while be at loggerheads with the state. lt never is. Insolence of power must be resented but at the same time the arrogance of the intellect should not be tolerated. We have also to guard against hypocrisy and intellectual dishonesty. Everyone loves flattery, the difference is only one of degree. Writers and artists are easy victims. Even though writers and intellectuals are zealous about their freedom many of them crave for recognition from the powers that be.

*The full text can be accessed [here](http://www.freedomfirst.in/uploads/issues/pdf/391.pdf) (page 13).* 

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [Connected Histories of Rammohan Roy’s Liberalism](https://spontaneousorder.in/connected-histories-of-rammohan-roys-liberalism/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Connected Histories of Rammohan Roy’s Liberalism

Original: https://www.spontaneousorder.in/p/connected-histories-of-rammohan-roys-liberalism

Author: Spontaneous Order

Published: 2020-05-22T17:38:08.000Z

Topics: rammohan-roy, indian-liberalism, transnational-history, civil-society

> Raja Rammohan Roy’s image in the Indian public memory is fixed as the father of Indian modernity, the first liberal, and a social reformer. Steeped in the Vedanta, Islam, Unitarian Christian, and imperial liberal tradition, Rammohan fought against the S

**Summary:**

Raja Rammohan Roy, hailed as the first Indian liberal, operated within a transnational network of ideas, blending Vedanta, Islam, Unitarian Christianity, and imperial liberalism to fight Sati, found the Brahmo Samaj, advocate free press, and critique East India Company overreach. Historian C.A. Bayly portrays him as an architect of an Indian public sphere and civil society distinct from traditional authority and state power. Roy's Unitarian ties connected colonial Bengal to Britain and North America, where his writings circulated in journals like the Christian Register and North American Review, earning him celebrity status as a neutral umpire against Trinitarian orthodoxy, compared to Martin Luther. He celebrated liberal revolutions in Spain, Portugal, and Latin America, hosted public events in Calcutta Town Hall (1820-1823), and influenced British Whig reforms during his 1830s UK visit, supporting the 1832 Reform Act while criticizing the Irish Coercion Bill. Roy fashioned an Indian liberalism via historicism, tracing constitutionalism to Parasurama and ancient panchayats to counter racial superiority claims and assert self-governance. Against Sati, he deployed civil society activism over colonial legislation, echoing Hayekian spontaneous law. The piece theorizes these connections through network theory, with nodes like Roy, Unitarians, and Whigs linked by print and voyages.

**Key points:**

- Rammohan Roy's Unitarian engagements made him a transatlantic celebrity, with writings debated in American journals and direct correspondence with figures like William Channing.
- Roy actively participated in global constitutional liberalism, celebrating Iberian revolutions and addressing British workers to support the 1832 Reform Act.
- He developed a distinctly Indian liberalism using historicism from itihasa traditions to claim precedents for divided powers and jury representation via panchayats.
- Against Sati, Roy advocated civil society measures over state legislation, aligning with liberal economics of incentives and Hayekian views of emergent law.

**By Sanjeet Kashyap**

* * *

Raja Rammohan Roy’s image in the Indian public memory is fixed as the father of Indian modernity, the first liberal, and a social reformer. Steeped in the Vedanta, Islam, Unitarian Christian, and imperial liberal tradition, Rammohan fought against the Sati; founded the Brahmo Samaj; advocated for the free press; critiqued the executive overreach of the East India Company; and supported limited colonial settlements. Late historian [C A Bayly](https://www.cambridge.org/core/books/recovering-liberties/DFFAC6CCD37E1844C0425E6B8866E443) argued that Rammohan Roy and other liberals of his generation were the early architects of an Indian public sphere. They promoted the concept of India as a unified entity and fashioned a space for civil society distinct from the traditional authority and state power. For Bayly, Rammohan Roy was the first Indian liberal.

A variety of intellectual trends informed Rammohan Roy’s social reformism and liberalism, both indigenous and transnational. Due to the print revolution and improvements in long-distance transport, the modern colonial empire in the 19th century was also the enabler of globalisation. The circulation of people, ideas, and books, however, did not merely follow the metropolis to the colony route but was more complex. Along with a transnational network in which ideas circulated, the print-led public sphere also emerged in colonial Bengal by the early 19th century. Rammohan Roy operated in [this context](https://www.palgrave.com/gp/book/9780230616806) of the transnational network of ideas and a print-based Indian public sphere. 

In keeping with the recent turn towards connected, global or transnational histories, this piece would explore the transnational connections of Rammohan Roy and the way he impacted public debates outside of colonial India. Additionally, it would outline the distinct Indian contours of Roy’s liberalism. 

**Transatlantic Unitarians**

The Unitarians were the British Protestant variety of rationalist and dissenting religious grouping. Their shifting and heterodox nature, along with Unitarian values, defies a simple [definition](https://www.palgrave.com/gp/book/9780230616806). The denomination’s positive principles included freedom of conscience, rationalism, and spirit of tolerance. The negative elements in its defining principles included opposition to the divinity of Jesus, doctrines of atonement, and eternal punishment. Due to its pluralist and individualist nature, the Unitarians faced hostility and threats of persecution. This is what perhaps propelled them to civic activism and electoral politics.

The rational approach to religion informed the Unitarian humanitarianism, which was also reflected in their civic activism. Historian [Lynn Zastoupil](https://www.palgrave.com/gp/book/9780230616806) argues the Unitarians ‘took the lead in lead in founding libraries, literary, scientific, and philosophical societies, art institutions, statistical societies, and mechanics institutes and reading rooms.’ The civic capital generated by their activism soon translated into political capital. The Unitarians disproportionately came to influence British politics, particularly in the years after the Reform Acts of 1832 and 1835. In early 19th century British politics, there also was a Unitarian to Whig pipeline for the reasons explained below. 

In terms of ideology, the largely bourgeoisie and heterodox Unitarians emerged as the champion of classical liberal values. The causes included individual liberty, press freedom, free trade, and civil rights for the religious minorities. Rammohan Roy’s embrace of Unitarianism was part of the transnational spread of the sect in Britain, colonial Bengal, and North America. As much as he criticised the distortion in Hinduism brought by the priestly class, Rammohan Roy also engaged in the debate against the Trinitarians, who believed in the holy trinity and divinity of Jesus. The debates against both the Hindu and Christian orthodoxy brought him renown in the West. Rammohan Roy’s emphasis on the scriptural authority, deployment of print capitalism, and his railings against the orthodoxy led many Western observers to [compare](https://www.palgrave.com/gp/book/9780230616806) him to Martin Luther. 

Rammohan Roy’s English writings published in Calcutta were soon [circulated](https://www.palgrave.com/gp/book/9780230616806) in Britain, Germany, and North America. He himself [sent](https://archive.org/details/in.ernet.dli.2015.52034) his published works to North America. In North America, Roy’s writings were [published](https://archive.org/details/in.ernet.dli.2015.52034) and debated in the *New York Review*, *Analectic Magazine*, *Christian Register*, *Boston Observer*, *North American Review*. American Unitarians including Joseph Tuckerman, David Reed (editor of the *Christian Register*), Henry Ware, and William Channing corresponded directly with the Hindu reformer. 

Apart from this direct interface between the colonial Bengal and North America, Rammohan Roy’s ideas reached the American audience in recycled form as well, courtesy the tendency of American editors to republish content from British journals. Roy also figured in private correspondences between the British feminist writer Lucy Aikin and the American Unitarian William Channing. According to historian Lynn Zastoupil, he became a [celebrity](https://www.palgrave.com/gp/book/9780230616806) on three continents for his heterodox views of Christianity.  

In Britain, it was the Rammohan-Marshman debate that first led the Unitarians to rush to contact the former whom they saw as their own. Unitarians tended to stake claim over celebrity figures, with John Locke, John Milton, and Isaac Newton being the prominent examples. Now, the anti-Sati Hindu reformer provided them with similar opportunity by [founding](https://www.palgrave.com/gp/book/9780230616806) the Calcutta Unitarian Committee and resorting to Unitarian talking points in the debate with Marshman. Rammohan Roy’s interventions in the debate between Trinitarians and Unitarians mattered a great deal which explains his stardom. 

For the faithful adherents, he served as the [neutral umpire](https://www.palgrave.com/gp/book/9780230616806) from the Orient who had an unbiased view based on his reading of scriptures. The fact that this unbiased umpire took the side with the Unitarians made him a celebrity in their circles. Ralph Waldo Emerson saw him as the [one trophy](https://archive.org/details/in.ernet.dli.2015.52034) for Unitarians compared to the thousand trophies of the ‘zealous Trinitarians’. Rammohan Roy’s Unitarian connections would also induct him into the political and reform debates on his visit to Britain. The Unitarian debate is a fascinating demonstration of the circulatory network of exchanges in the 19th century, which was not necessarily limited only to the downward filtration from the metropolis to the periphery. Much the same could be said of [Roy’s constitutional liberalism](https://doi.org/10.1017/S1479244306001028), as shown by C A Bayly.

**Transnational Constitutional Liberalism**

Between 1820 and 1823, Rammohan Roy hosted [several public celebrations](https://doi.org/10.1017/S1479244306001028) in the Calcutta Town Hall for the success of the Spanish, Portuguese, and Latin American liberal revolutions. C A Bayly situated colonial Calcutta’s affair with liberal constitutionalism in the [context](https://doi.org/10.1017/S1479244306001028) of post-Napoleonic War years which saw the return of reactionary governments around the globe. The liberals in exile and colonies were spread across Europe, Asia, and the Americas, railing against the old despotism. The reverberations of [liberal revolutions](https://www.cambridge.org/core/books/recovering-liberties/DFFAC6CCD37E1844C0425E6B8866E443) and constitutionalism in Cadiz (1812) and Lisbon (1822) also reached the shores of colonial India, particularly in Calcutta, Bombay, and Madras. For instance, Rammohan Roy was a participant in the August 1822 celebration meeting in Calcutta for the second anniversary of the proclamation of constitutional government in Portugal. The meeting also made [references](https://doi.org/10.1017/S1479244306001028) to the ‘les liberales of France’ and the Greek nationalist Alexander Ypsilanti. 

Rammohan Roy’s involvement with the global liberal constitutional movement was reciprocated as well. Around 1820, the Spanish liberals reissued the original Cadiz constitution of 1812 which they [dedicated to Rammohan](https://www.cambridge.org/core/books/recovering-liberties/DFFAC6CCD37E1844C0425E6B8866E443) Roy. Apart from the mutual display of solidarity, there was another common strand in the Iberian liberal movement and Rammohan Roy’s constitutional liberalism. In both instances, liberals resorted to historicism to find prehistory of their liberal constitutional visions in the past. The Iberian liberals went back to classical figures like Cato and Brutus. Rammohan Roy’s historicism deriving from the *itihasa* tradition which gave agency to Indians would be discussed later.

During his stay in Britain, the liberal in Roy contributed to the Whig reformist agenda in a way that overturned the subordinated dynamic of the colonised. His visit to Britain coincided with the reform debates culminating in the Reform Act of 1832. In Manchester, writes historian [Lynn Zastoupil](https://www.palgrave.com/gp/book/9780230616806), he ‘addressed a crowd of factory workers and called on them to support the Whig ministry and reform’. Earlier in June 1830 while en route to Britain, he would come to know of the July Revolution in France. Excited by the liberal moment of the ‘Three Glorious Days’, Roy [visited](https://www.palgrave.com/gp/book/9780230616806) two French frigates anchored in Cape Town which flew revolutionary flags. Later in Britain, C A Bayly [mentioned](https://doi.org/10.1017/S1479244306001028) the way Rammohan Roy ‘watched the passage of the Reform Bill with trepidation, stating in 1832 that if it failed in Parliament, he would sever all ties with Britain’. 

After the success of the Reform Act in 1832, however, Rammohan Roy soon became disappointed with the Whig liberalism, particularly on the issue of the Irish Coercion Bill. He found a new beacon of liberty in the young republic across the Atlantic. Roy had plans to visit the United States which did not come to fruition though. He died in 1833 in Bristol. Nevertheless, Rammohan Roy’s image as a liberal reformer served as inspiration for the American abolitionists.

In an [anonymous pamphlet](https://archive.org/details/in.ernet.dli.2015.52034) delivered as the speech to the United States Congress against slavery, the author assumed the identity of Rammohan Roy and paid a moving tribute to the reformer Raja: ‘In closing this address, allow me to assume the name of one of the most enlightened and benevolent of the human race now living, though not a white man, Rammohun Roy.’ Historian [Nico Slate](https://www.hup.harvard.edu/catalog.php?isbn=9780674979727) argues that the pamphlet writer ‘used the examples of Indians to disprove arguments that legitimated slavery based on race.’ Roy’s connection with Iberian liberals, French revolutionaries, British Whigs, and American abolitionists was indicative of a transnational liberal public sphere that had space for a Bengali Brahmin hailing from colonised Bengal. Roy was an active participant in this global sphere in his later years.    

**Rammohan Roy as Indian Liberal and Patriot** 

In 2019, the long-deceased Roy was at the centre of a [Twitter controversy](https://www.dnaindia.com/india/photo-gallery-sati-was-not-regressive-ram-mohan-roy-was-british-chamcha-payal-rohatgi-s-statement-sparks-twitter-fury-2754543/) erupted by India’s right-wing ideologues. A section of the assertive Indian right-wing which has come to dominate Twitter saw Roy as the stooge of the Britishers for his opposition to Sati. Late historian C A Bayly would have disagreed though. For Bayly, Roy was a ‘[colonial patriot](https://doi.org/10.1017/S1479244306001028)‘ who saw India as a geographically and culturally united entity. As belonging to the first generation of Indian public men, he sought to create an Indian civil society large enough to be able to share power with the Raj. Also, Roy fashioned a uniquely Indian version of liberalism by borrowing from a variety of [intellectual traditions](https://kclpure.kcl.ac.uk/portal/files/61571107/2016_Dasgupta_Shomik_1141901_ethesis.pdf) and resorting to historicism which gave Indians the agency.

His vision of partnership with the empire reflected in the advocacy of limited colonisation was more a project of fashioning the rights-bearing liberal citizen. It is an altogether different issue that the partnership vision of men like Rammohan Roy and Dwarakanath Tagore did not come to fruition. For [Partha Chatterjee](https://doi.org/10.1017/S1479244311000412), the failure was caused because ‘their liberal European collaborators in the world of the colonial agricultural and financial enterprise were unwilling to accept racial equality—not even in the world of capital, let alone that of citizenship.’

In response to the race-laden theories which asserted European superiority, Roy fashioned an [Indian version of liberalism](https://www.cambridge.org/core/books/recovering-liberties/DFFAC6CCD37E1844C0425E6B8866E443). Historicism played a crucial role here. For example, he resorted to constructing a lineage of constitutionalism rooted in Indian mythology. In his version, Parasurama’s decimation of Kshatriya warriors led to a Montesquieuian division of powers between Brahmins (legislative authority) and the rulers (executive authority). Later, Brahmins’ collusion with rulers led to despotism. 

The implication of Roy’s historicism was clear: Hindus sinking into despotism was not an inevitable phenomenon but was based on contingent factors. Thus, contra James Mill, Indians were capable of self-governance. Similarly, in the debate over Jury reforms, both Roy and the Madras liberal Ram Raz evoked the [ancient institution](https://doi.org/10.1017/S1479244306001028) of Panchayats to argue for the Indian representation in the juries. 

Rammohan Roy’s battle against Sati saw him deploying the rhetoric of a reformer steeped in his religion. In this, he claimed the pedigree of the ninth century scholar Sankara. Historian [Jon Wilson](https://www.palgrave.com/gp/book/9780230574533) has argued that Roy’s ‘attack on Sati employed three tactics, none of which championed legislative action by the colonial state.’ In his discussion with the Governor-General Lord William Bentinck in 1928, Roy advised against colonial legislation to ban Sati and instead relied on civil society activism to fight the tradition. 

One of Roy’s arguments against Sati deployed the logic of incentives shaping human actions, so characteristic of the [liberal economics](https://www.adamsmith.org/blog/economics/people-respond-to-incentives) canon. Wilson further argues that Rammohan’s conception of the emergence of law in society was very much akin to the Hayekian characterisation of law as opposed to the legislation. According to Wilson, Roy and later Indian liberals, including Tagore fashioned their vision of the [Indian civil society](https://www.palgrave.com/gp/book/9780230574533) (*samaj*) to criticise the encroachments of the colonial state in the name of reform. However, specific to the Sati issue, the characterisation of Roy’s opposition to legislation and advocacy of civic measures as Indian liberal opposition to the intrusive colonial state would have to contend with Roy’s later defence of Bentick and anti-Sati law in Britain. Wilson doesn’t address the issue in his writings.

**Conclusion** 

I’ve so far attempted to provide a descriptive account of Roy’s engagement in the global liberal movement. How do we though theorise the variety of connections which characterised Rammohan’s public career across three continents? One obvious way would be to resort to the connected or transnational histories which are in fashion these days. Much of the arguments here derive from this genre only. However, I would argue some basic insights from network theory might also come handy in this enterprise. 

The *nodes* (a specific actor/location within a network) in the Rammohan saga would include Roy and Christian debaters in colonial Bengal, Unitarians and Whigs in Britain, and the North American Unitarians. The *ties* (the channel between nodes) might consist of the journal articles, private letters, reproduced articles, published books as well as the ship voyages. The *degree* of *nodes* (number of ties connecting a node to others), and here I am arguing tentatively, would be denser in Calcutta, London, or Boston compared to say Paris or Bristol. A fuller construction of the *topography* of this network, however, remains outside the purview of this article. The network theory approach differs from the connected or transnational history in the sense that it seeks to capture the quantitative dimension of the phenomenon.

Read more: [So Musings: The Perils of State Support](https://spontaneousorder.in/so-musings-the-perils-of-state-support/)

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## Memories of SV Raju

Original: https://www.spontaneousorder.in/p/memories-of-sv-raju

Author: Spontaneous Order

Published: 2020-05-19T14:35:27.000Z

Topics: swatantra-party, indian-liberalism, free-market-agriculture, liberal-organizations

> SV Raju was an Indian liberal public figure, Swatantra Party member, builder of liberal organisations, a close friend to Minoo Masani, and one of the lone dissenters of central planning. His lifelong commitment to liberal causes was striking in the cont..

**Summary:**

SV Raju, a steadfast Indian liberal, Swatantra Party member, and associate of Minoo Masani and BR Shenoy, preserved liberal ideas against India's statist dominance by editing Freedom First magazine and safeguarding Swatantra documents. In this 2015 tribute, Sharad Joshi recounts their collaboration starting January 1994, when Raju visited Ambethan with Swatantra literature to support Shetkari Sanghatana's free-market advocacy for farmers, opposing government price-fixing in favor of open markets. Impressed by the organization's mass mobilization of 5-6 lakhs, Raju facilitated publishing Joshi's articles via Project for Economic Education, organized the Swatantra Bharat Movement's founding meeting on May 28, 1994, at Bharatiya Vidya Bhavan with Masani present, and attended the November 1994 Nagpur convention where Swatantra Bharat Paksha (SBP) was formed to contest 1995 Maharashtra elections—handling office work and reusing Swatantra materials despite losses. Raju held roles like convener of Indian Liberal Group and aided international representation. He continued supporting Joshi's parliamentary efforts against socialism in the Constitution Preamble, women's reservation bill, and for economic reforms, exemplified by a 1995 Pune workshop with Manmohan Singh. Joshi highlights Raju's affection and role in bridging agrarian mass movements with broader liberalism.

**Key points:**

- SV Raju preserved Swatantra Party's legacy and planted its 'seed' with Shetkari Sanghatana in 1994 to advance free-market farmer policies.
- Raju organized key events including Swatantra Bharat Movement founding on May 28, 1994, and SBP's formal launch in November 1994, aiding 1995 election efforts.
- Through roles like editor of Freedom First and director of Project for Economic Education, Raju promoted liberal ideas and supported Joshi's anti-socialism campaigns as MP.

**By Spontaneous Order**

* * *

*SV Raju was an Indian liberal public figure, Swatantra Party member, builder of liberal organisations, a close friend to Minoo Masani, and one of the lone dissenters of central planning. His lifelong commitment to liberal causes was striking in the context of India’s public discourse dominated by statism of both the Left and Right variety. Raju closely collaborated with BR Shenoy and Minoo Masani in running small organisations promoting liberal ideas to the English-speaking audience. He single-handedly edited the Freedom First magazine; and preserved the crucial documents of Swatantra Party’s Central Office at Bombay. On his death in 2015, one of India’s foremost liberal farm leaders [Sharad Joshi](https://spontaneousorder.in/sharad-joshi/) published a tribute to Raju which is reproduced here.*

I strained my memory as much as I could but still, I have difficulty in remembering when I met Mr S. V. Raju in the first place. Later on, I have seen him at so many places in so many roles but I really don’t remember where I saw him first. But, if my memory is correct, I think, I saw him first when he came to Ambethan driving from Mumbai on his own with his lieutenant Mr L. R. Sampatand a bagful of documents and literature of the SwatantraParty and Mr Minoo Masani’s “Open letter to my younger friends” in January 1994.

In 1991 some of the members of our Shetkari Sanghatana contested the Maharashtra State Assembly Elections on the symbol of the Janata Dal; five of them won. Shetkari Sanghatana advocates the system of the free economy right from its beginning. In the period of association with the Janata Dal, our MLAs gradually realized that the Janata Dal does not support the system of a free economy. So, in 1993 the five MLAs separated from the Janata Dal and formed an independent group in the Assembly. To strengthen our fight for farmers’ freedom by political representation, we were in search of a party that is truly liberal and, side by side, were preparing to form one. In this process, I remembered Rajaji’s SwatantraParty that had challenged Jawaharlal Nehru’s socialism effectively in the 1960s. We searched whether the party was still in existence. One of our MLAs found that Mr S.V. Raju, under the blessings of Mr Minoo Masani, had kept the seed of Rajaji’s Swatantra Party alive to be planted in a suitable fertile field whenever it is found.

And that made Raju rush to Ambethan in January 1994. The Shetkari Sanghatana was doing quite well at that time. We had already worked out its basic philosophy. The one stumbling block was who was to fix the agricultural prices. We could not trust any government body to fix them. The only solution was the open market; in the open market, the equation that the average cost is equal to the average revenue provides the best estimate of the cost of production. It was in this rugged way we became freemarketists. 

The Swatantra Party had practically perished for various reasons. It was Raju’s privilege to preserve its seed and plant it wherever it is possible in various forms and organizations established and promoted.

I was fairly articulate in putting down all that I said when Raju and Sampat first came to Ambethan. I argued my case fairly strongly and, I think, Raju was quite impressed. One thing he appreciated about Shetkari Sanghatana was that, while Swatantra Party had seen stalwarts like Rajaji, Minoo Masani, N. G. Ranga, they were all loners while Shetkari Sanghatana had, on a number of occasions, gathered masses of five to six lakhs.

As a first step, Raju arranged to publish a collection of my articles titled Answering Before God through the Project for Economic Education (PEE) of which he was the Executive Director. At the same time, he helped us in organizing a meeting of Swatantra Bharat Movement, the founding gathering of Swatantra Bharat Paksha (SBP) on28th May 1994 at the Bharatiya Vidya Bhavan, in Mumbai where Minoo Masani was present, thanks to Raju. At that meeting, Advocate Ram Jethmalani could not agree with us on the exact meaning of the word socialism – the inclusion of which we tried to oppose in the Preamble of the Constitution. Jethmalani was of the opinion that socialism could be interpreted in a hundred and one ways and we should not insist on a strict rigid interpretation.

After this meeting, I visited Raju’s office in Sassoon Building in the Fort area. Before the Bharatiya Vidya Bhavan meeting, Raju assured himself of the mass support to the Shetkari Sanghatana by attending a farmers rally on the 8th May 1994 held at Akola (Vidarbha) by the Shetkari Sanghatana.

Raju was present at the Nagpur Convention of the Shetkari Sanghatana held in November 1994 where the Swatantra Bharat Party (SBP) was formally founded and the decision to contest Maharashtra State Assembly elections under SBP was taken.

Raju did not flee away by just planting the seed at Nagpur. He also helped us in contesting the Assembly elections in 1995 under SBP by doing all the office work that a secretary of a party is expected to do. Both Raju and Sampat guided our newborn party. We had issued an appeal to over 200 people requesting them to join the party. Unfortunately, many of them agreed initially but later on, for one reason or another, walked out. We had used the publicity material and the cartoons that Raju had prepared for the Swatantra Party, which were greatly useful for the purpose. We lost the election but were determined to keep the flag of free economy flying.

I have seen Raju in so many roles. He was convener, Indian Liberal Group, Executive Director, Project for Economic Education, Editor, Freedom First, and many others. It was on Raju’s insistence with the Friedrich Naumann Foundation that I represented the Indian Liberal Group at the meeting of the International Liberal Organization held in Germany.

Raju always had a deep sense of affection for me. He valued the quality I had of gathering masses. He tried to supplement this by exposing my views to non-agrarian sectors. He helped us in organizing a workshop on Economic Reforms and Agriculture at Pune in November 1995 where renowned economists including the then finance minister, Dr Manmohan Singh were present.

Later on, when I was MP in the Rajya Sabha, he continued to show a keen interest in what I was doing and writing and would specifically ask for my articles ranging from subjects like euthanasia to women’s reservation bill (where I was the only MP to vote against the bill a fact which Raju appreciated), as also my proposed amendment to the Constitution that the word socialism be removed from the Preamble of the Constitution. In fact, the SBPhad also faced difficulties in registering itself as a political party owing to this provision in the Preamble.

I do not know in what way I will be able to repay Raju’s affection and kindness for me.

*The original article can be accessed [here](http://www.freedomfirst.in/issue/articles.aspx?id=8440).* 

Read more: [Forgotten Speeches of GK Sundaram – Part II](https://spontaneousorder.in/forgotten-speeches-of-gk-sundaram-part-ii/)

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## The Speech Modi Has Not Made But Should

Original: https://www.spontaneousorder.in/p/the-speech-modi-has-not-made-but-should

Author: Spontaneous Order

Published: 2020-05-18T18:29:34.000Z

Topics: covid-19, lockdowns, fiscal-policy, economic-recovery

> Beloved brothers and sisters, We have been struck by the worst tragedy since Independence. We shall overcome, with courage and resilience. But we must also change course in light of experience. Colleagues and experts advised me to announce a Rs 20 lakh ..

**Summary:**

In a fictional speech for PM Modi, Swaminathan SA Aiyer urges rejecting advisors' timid Rs 20 lakh crore package—mere spin or expansions of existing schemes that won't prevent bank bad debts doubling—and instead boldly expanding the fiscal deficit by 5% of GDP, financed by RBI money printing, defying rating agencies amid peers' worse finances. Lockdowns, not COVID, ravage India: under 3,000 COVID deaths versus 80,000 in the USA, 450,000 annual TB deaths, and 10 million total yearly deaths, with India's low fatality possibly from crowded living, other diseases, heat, or pollution granting resistance. The cure exceeds the disease, imposing massive misery on enterprises and livelihoods while red zones expand from 130 to 180 districts covering two-thirds of GDP. Critics' claims of bigger stimuli elsewhere mislead as those economies crash regardless. True stimulus demands phasing out lockdowns for economic boom, shifting to massive testing, tracing, and isolation despite challenges in crowded conditions. Like HIV or influenza, COVID may require living with it sans perfect vaccine, prioritizing growth over panicky over-reaction from classical-liberal lens valuing resilience over state-imposed shutdowns.

**Key points:**

- Reject small fiscal packages and expand deficit by 5% of GDP via RBI printing to aid needy without fearing rating downgrades.
- End draconian lockdowns causing more economic and livelihood deaths than COVID's modest under 3,000 fatalities.
- Shift policy from flawed lockdowns to massive testing, tracing, and isolation for better-targeted containment.
- Reopen economy fully as the only sustainable stimulus, learning to live with COVID like TB or influenza.
- Ignore misleading comparisons of other countries' stimuli amid crashing GDPs; prioritize revival over prolonged shutdowns.

**By Swaminathan SA Aiyer**

* * *

Beloved brothers and sisters,

We have been struck by the worst tragedy since Independence. We shall overcome, with courage and resilience. But we must also change course in light of experience.

Colleagues and experts advised me to announce a Rs 20 lakh crore package spread over every possible vote bank. I was sceptical. For instance, providing Rs 3,500 crore for the relief of migrant workers sounded good, yet meant just Rs 250 each for 14 crore migrant workers, half the minimum daily wage in major cities. All the new financial measures will not prevent bank bad debts from doubling.

I was advised to finance the package through the RBI, banks, concessions and promises, not budgetary borrowing. Experts said our fiscal situation was perilous, and rating agencies might downgrade India to junk status if it announced a big fiscal rescue. Advisors also suggested gradual re-opening of the economy, keeping hot spots mostly shut.

After much thought, I have rejected this approach. Let us be strong and not dictated to by rating agencies, especially since other emerging markets are far worse off. The foreign direct investment we seek is not driven by credit ratings. So, I have decided to boldly expand the fiscal deficit by 5% of GDP to help needy people and enterprises. RBI will print the required sums.

Many measures suggested by my advisors are sensible. Others are just spin, reflect decisions already announced or expand ongoing schemes. That’s okay, good politics tries to raise morale at minimal fiscal cost.

The fundamental problem is that we are being ravaged not so much by COVID as our own lockdowns. The cure is proving worse than the disease. Lockdowns are killing enterprises, livelihoods and people on a massive scale. By contrast, COVID deaths are under 3,000, against 80,000 in the USA.

Alas, this is not because we are world leaders in prevention or containment. Millions of households sleep four or more people per room, making isolation and social distancing difficult. Our low fatality rate may reflect resistance got from dozens of other rampant diseases, from TB and flu to measles and pertussis. Maybe we get resistance from high temperatures, or from the most polluted air and water in the world.

Bottom line: fatality numbers today make COVID look only modest health risk. Yet to combat it, we have imposed terrible misery through draconian shutdowns. Ten million Indians die every year of various causes. TB alone claims 450,000. We do not respond by locking down the economy: we learn to live with the diseases.

COVID was initially feared to be as infectious as the Spanish flu of 2018 that killed millions. But today, India’s COVID fatality rate is peanuts. This may partly reflect incomplete data, partly the lockdown’s effect. But maybe we have also been guilty of panicky over-reaction to a not-so-deadly virus.

Every death is a tragedy, but a COVID death is not more tragic than a TB or influenza death. Since we live with those, why not with COVID too? Soumya Swaminathan of the World Health Organisation warns that we may have no choice: we may never have a fully effective vaccine for COVID, as is true of HIV and influenza. We may ultimately have to live with all these diseases.

Critics say that other developing countries have announced a bigger stimulus of up to 20% of GDP. This is misleading. Despite additional government spending, the GDP of these countries is crashing, so they are more sedated than stimulated. Lesson: the biggest and only sustainable stimulus is to get the economy to boom again, and that means phasing out lockdowns.

This will carry risks of COVID spreading. But in any case, it will eventually spread till we get ‘herd immunity’. Our policy of lockdowns in red zones is not working. The number of red zones seems to be expanding fast — from 130 to 180 districts that create two-thirds of GDP — and the answer cannot be to keep extending lockdowns. We must revive economic growth.

Let us shift focus from lockdowns that hurt a billion people to massive testing, tracing and isolating COVID-infected people. This will require a major change in mindset and administrative effort. In our crowded conditions, I fear we will meet only with partial success. But when no ideal solutions exist, let us shift from seriously flawed lockdowns to less flawed measures.

Beloved brothers and sisters, a great calamity has laid low all countries, even the mightiest. Let us not worsen that calamity through panicky over-reaction that is costlier than the disease. Changing course entails sacrifices. But deep in my heart, I do believe that we shall overcome someday.

*This article was originally published on the Times of India website on 17th of May 2020 and can be accessed [here](https://timesofindia.indiatimes.com/blogs/Swaminomics/the-speech-modi-has-not-made-but-should/).*

Read more: [Should Schools Waive Fees During Lockdown?](https://spontaneousorder.in/should-schools-waive-fees-during-lockdown/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Forgotten Speeches of GK Sundaram – Part II

Original: https://www.spontaneousorder.in/p/forgotten-speeches-of-gk-sundaram-part-ii

Author: Spontaneous Order

Published: 2020-05-18T17:55:54.000Z

Topics: swatantra-party, bank-nationalization, mrtp-bill, free-enterprise

> Editor’s Note: This is the second article in a two-part series highlighting the contributions of GK Sundaram as a Rajya Sabha member. Read the first part here. During India’s freedom movement, most leaders were united towards the goal of achieving pea

**Summary:**

GK Sundaram, a Swatantra Party Rajya Sabha member from 1966-1972 and entrepreneur harmed by statist policies, delivered prescient speeches critiquing India's socialist economic controls from a classical-liberal standpoint, advocating individual freedom, private property rights, and free enterprise to end scarcity, hunger, and poverty. He opposed bank nationalization, noting nationalized trade and insurance already showed inefficiency; private banks handled 86% of business, extended Rs. 130 crores to agriculture and Rs. 84 crores to small industries despite past restrictions, and earned modest Rs. 6.64 crores profit on Rs. 2,741 crores deposits. Sundaram warned nationalized banks lacked machinery for small borrowers, risking higher taxpayer recapitalizations—a reality today—and argued government-created banking monopolies since 1949 invalidated profiteering charges. He decried the rupee devaluation and gold controls as erroneous, equating India wrongly with developed nations. On the Cotton Textiles Bill, he highlighted import bans stifling renovation with indigenous capacity at under 15%. Sundaram slammed the MRTP Bill as premature and retrograde, hindering big economic installations while existing laws sufficed against monopolies; he urged emulating Japan et al. over Cuba, prioritizing incentives over impediments amid decontrols in cement and steel. His warnings of balance-of-payments crisis materialized in 1991, forcing reforms, underscoring ignored liberal critiques.

**Key points:**

- Sundaram opposed bank nationalization citing inefficiencies in prior nationalized sectors and private banks' Rs. 130 crores agriculture and Rs. 84 crores small industry lending.
- He criticized the MRTP Bill as hindering economic revival by blocking large-scale efficient production, urging incentives over bureaucratic impediments.
- Sundaram warned rupee devaluation and gold controls sent wrong international signals, unfit for India's production and savings deficits.
- He advocated protecting private property and free enterprise to boost productivity, prosperity, and address economic maladies like inflation and low output.
- Predictions of BoP crisis in 1991 and ongoing bank recapitalizations and MSME credit shortages proved accurate.

**By Chandrasekaran Balakrishnan**

* * *

*Editor’s Note: This is the second article in a two-part series highlighting the contributions of GK Sundaram as a Rajya Sabha member. Read the first part [here](https://spontaneousorder.in/forgotten-speeches-of-gk-sundaram-part-i/).*

During India’s freedom movement, most leaders were united towards the goal of achieving peaceful political freedom from the British rather than socio-economic freedoms. It was thought that the later suitable internal arrangements would be made for socio-economic freedoms. It was thought that the external control over the nation posed far more threats to India’s wealth and natural resources. Few leaders seemed sympathetic to with the ideas of communism, Fabian socialism, and statist control regime, along with the freedom struggles. They clearly explained that it would be devastating to experiment with those ideas in Indian society because it would not be compatible with the traditions of shared wealth creation pursued for hundreds of years. 

However, the entire discourse changed soon after the adoption of the Indian Constitution. Jawaharlal Nehru became supercilious and failed to listen to senior leaders like Sardar Vallabhai Patel, C Rajagopalachari, Ambedkar, CV Raman, Syama Prasad Mookerjee, among others on the matters of national security, science, social and economic policies. 

In 2003, GK Sundaram (1914-2009) had chaired the Minoo Masani Memorial Lecture organised in Chennai by the Indian Liberal Group. N Vittal, a retired bureaucrat delivered the lecture titled “*Corruption Mocking Liberalisation*“. In his presidential address, GK Sundaram interestingly mentioned scandals and corrupt practices by Motilal Nehru and Jawaharlal Nehru in both pre and post-Independent India with clear evidence. 

GK Sundaram emerged as a strong leader of the Swatantra Party from Coimbatore in Tamil Nadu. He was also a visionary entrepreneur and was professionally affected by the government policies which dictated the entire means of productions. Thus, he believed that government policies perpetuated the scarcity in India with hunger and poverty. According to him, the policies of the 60s and 70s did not address *“the maladies of the economy such as increasing agricultural and industrial production, maintaining price stability and curbing inflationary pressures in the economy.”* Sundaram had strongly warned the potential crisis of balance of payments which was mounting increasingly, and eventually, the crisis came in 1990, forcing the government to undertake significant economic reforms.

Sundaram was nominated to Rajya Sabha from Swatantra Party from 1966 to 1972. He gave persuasive, stimulating and constructive speeches with alternative ideas and suggestions on finance bills, banking reforms, centralised planning, nationalisation of banks and insurance companies, international trade, economic development, infrastructure, controls on gold, import-export of capital goods, devaluation of the rupee, manufacturing, price controls on medicine, and black money, among other issues. He believed that an efficient way to improve productivity would be to increase prosperity in the country by fostering individual freedom, liberty, and free enterprises through the protection of private property rights.

Sundaram opposed bank-nationalisation on the ground that there was *“already enough experience in the country about the nationalised trade and also the nationalised life insurance business. These two are enough examples to show the inefficiency and the manner in which it has been functioning in our country for the past several years.”* He raised several pertinent objections and argued that the provisions of the Banking Law (Amendment) Act 1969 were not followed when 14 banks were nationalised eight-months later. The government hastily took control and even failed to fully abide by the judgment of the Supreme Court of India. 

He further noted that *“at the end of 1969, twenty leading commercial banks accounted for 86 per cent of the banking business and they sanctioned additional credit limits to agriculture and other small-scale industries to the tune of Rs. 130 crores and Rs. 84 crores respectively. This is an indication of their earnestness in carrying out the directives of the Reserve Bank. We should also not forget that these commercial banks were forbidden from giving any loan to agriculturists all these years because it was considered to be risk lending.”* 

On the allegation of profiteering by banks, Sundaram argued that *“Unwarranted charges have been levelled against the banking industry like the concentration of money, monopoly and these things. We should not forget that immediately after independence in 1949, the Banking Regulation Act was introduced. Ever since that no new bank has been licensed so far. We have created a monopoly as early as 1949. Is it their fault if consciously we have allowed them to monopolise?”* 

He further highlighted that *“In the case of the fourteen banks that have now been nationalised, at the end of 1968, their total profits were only Rs. 6.64 crores. How did they make this profit? They had a total deposit of Rs. 2,741 crores on 31st December 1968, of which current deposits accounted for 25 per cent, savings bank 26 per cent and fixed deposits 49 per cent. They had only 9 per cent of the total advances in liquid cash. Whether the nationalised banks will do the work so economically and make the maximum use of the funds available with them and show such results is very doubtful.”* He was particularly prescient in this case. For many years now, the central government recapitalises nationalised banks with thousands of crores of taxpayers’ hard-earned money. 

Sundaram had warned that *“So far the finances followed development. Now the government wants finance to lead the development. They have to take a much greater risk”.* He also warned the potential negative impacts on the economy, “*If the nationalised bank is going to deal with the small trader, small agriculturist, small merchant, small industrialist, has it got sufficient machinery to go into this and find out exactly their profitability and their repaying capacity before it will advance money? I doubt very much.”* Again, his warnings came true. Today, the MSMEs sector faces a severe lack of credit from banks.

Sundaram had also opposed the devaluation of rupee and gold control policies of the central government, which not only undermined the Indian economy internationally but also gave the wrong signal to the world. He opined in the Parliament*, “…we are equating India for devaluation to the U.K., Japan, Italy, France, and Czechoslovakia. It is all erroneous; they are not identical. The conditions were different. The people are different. Their economic structure is different. Therefore, the remedies also will be different. It is absolutely erroneous to say that since these countries did it, we are doing it. Any country not producing enough, not cheaper enough, not saving; enough, borrowing more and spending more in relation to other countries, will meet with the same fate. Planning is not merely borrowing and spending. We are planning for more and more troubles only.”*

Speaking on Cotton Textiles Companies Bill, 1967, Sundaram argued that *“When Japan, France, Germany and Italy could supply us machines, you did not allow textile machines to be imported from them. There you had absolutely no control whatsoever. You could not have allowed any imports even if the industry wanted to renovate their machinery. What about the indigenous capacity? You have licensed it. There was not even 15 per cent”* of capacity utilisation.

Sundaram had criticised The Monopolies and Restrictive Trade Practices Bill, 1967 on the ground that *“The development of big installations and their economic production is very well known all over the country and even in our country in some of the public sector undertakings we are going in for bigger and bigger installations so as to be economic. All other countries the world over are going in for that whereas we are going in the other direction.”* He was prophetic in warning that while countries all over were promoting free enterprise to foster competition and efficiency, the Indian government was doing the opposite and binding the economy in bureaucratic shackles.

According to Sundaram, the MRTP Bill was “very premature and untimely as this is the time when the economy of the country needs more incentives and not any impediments. It is a retrograde step and under the present circumstances it will hinder even the very revival of the economy, which is most urgent and necessary.” He further stated that “The existing Company Law, the licensing procedure, the capital structure, and capital control, the Factories Act, all these measures are sufficient to prevent the growth of any monopoly in the country, leave an *alone concentration of it. Therefore, there is absolutely no need for such a Bill”*.

Moreover, instead of the MRTP Bill, Sundaram argued that what was needed was *“streamlining of the administration to free it from official corruption. That is also absolutely necessary and that is one of the prerequisites that the same Commission has recommended before taking any step like this. Therefore, the government takes only such of the recommendations which are very convenient for it and very conveniently omits all the rest of the recommendations.”* The central government had set up the Monopolies Inquiry Commission which recommended the government to deregulate and reduce bureaucratic corruption, but these suggestions were ignored.

The central government increasingly made policies which were against its own finance bills and sometimes contradicting each other. While discussing the MRTP Bill in the Parliament, Sundaram noted that *“The Commerce Ministry has taken several steps, either total or partial price decontrols, distribution decontrols in the matter of cement, sugar, iron and steel and coal. Why have they done it? They want to provide incentives in order to increase production. Therefore, if the expansion of industries is prevented, there won’t be any development”*. 

Furthermore, according to Sundaram, the MRTP Bill was *“against the very spirit of the Industrial Policy Resolution of the Government of India which was passed by both the Houses providing for mixed economy and co-existence of private and public sectors with clear demarcations of their fields of operation.”* He urged the government to study and follow the *“policies adopted by countries which have developed fast like Japan, Malaysia, Thailand, ‘Taiwan, and Iran. They have set examples! already. We should not follow the policies of Cuba, Egypt, Ghana, and Indonesia, but we are going!*” Alas, Sundaram’s warnings were ignored, and India is still paying a dear price for it. 

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [SO Musings: Sikkim – Through Other Eyes](https://spontaneousorder.in/so-musings-sikkim-through-other-eyes/)

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## Economic Challenges for Sarkaar Post Lockdown

Original: https://www.spontaneousorder.in/p/lockdown-economy-future

Author: Spontaneous Order

Published: 2020-05-15T18:22:56.000Z

Topics: covid-19-lockdown, economic-recovery, fiscal-crisis, unemployment

> There is considerable public debate around the future of the economy once the government-mandated lockdown is over. What will the “new normal” look like? Many commentators have predicted the future course of the economy and the same is a topic for dis

**Summary:**

Swati Singh speculates on India's post-lockdown economic challenges, emphasizing the government's multi-front battle for revival amid halted activity and revenue shortfalls. State governments face severe fiscal crunches, exemplified by Delhi's revenue drop from ₹3,500 crore in April 2019 to ₹300 crore in April 2020, prompting measures like reopening liquor shops, tax hikes on alcohol, and even home delivery in Chhattisgarh to fund salaries. Employment regeneration poses another hurdle, with millions unemployed atop pre-pandemic highs—the worst in over four decades—and limited scope for government-funded schemes due to fiscal strain. International trade faces elevated costs from heightened screening as global lockdowns persist. While unforeseen issues loom, Singh highlights innovation born of necessity, such as legalizing alcohol home delivery, and urges the government to pivot gradually, enact smart policies, and prioritize the common man's plight. This aligns with a classical-liberal critique of central planning's failures, as linked in related commentary, advocating adaptive, market-responsive measures over rigid state control.

**Key points:**

- Delhi government's April revenue fell from ₹3,500 crore in 2019 to ₹300 crore in 2020, forcing states to reopen liquor sales and innovate with home delivery to raise funds.
- Unemployment has surged post-lockdown on top of pre-pandemic peaks—the highest in over four decades—making robust job recovery unlikely without private sector dynamism.
- International trade costs will rise due to stricter screening processes as global lockdowns continue.
- Necessity drives policy innovation, like Chhattisgarh's alcohol home delivery, signaling potential for adaptive economic revival.
- Government must prioritize smart, informed policies that address the common man's lockdown burdens without underestimating the crisis.

**By Swati Singh**

* * *

There is considerable public debate around the future of the economy once the government-mandated lockdown is over. What will the “new normal” look like? Many commentators have predicted the future course of the economy and the same is a topic for discussion at almost every dinner table in the country. The truth is – no one knows, and since everyone is just speculating, I’ll do the same.

The government will have to fight the battle for economic revival on multiple fronts. Even as it is difficult to gauge the depth of the financial problems the country is facing right now, a few glaring issues come to mind when we think about the economy.

The economic burden caused by the lockdown is evident. Most of the economic activity has halted, and the state governments have lost thousands of crores in revenue. For example, the [Delhi government’s revenue fell](https://www.livemint.com/news/india/revenue-fell-to-rs-300-cr-in-april-how-will-delhi-govt-function-kejriwal-11588512754178.html) from ₹3,500 crore in April 2019 to ₹300 crore in April 2020. Some state governments have already started tackling the financial crunch they are facing. Recently, the decision to open liquor shops and the increase in taxes on alcohol by some states was guided by the urgent need to raise revenues. Some governments also claimed that if not allowed to sell alcohol, they would not be able to pay salaries. Some innovation was also observed as the Chhattisgarh government launched a website for home delivery of alcohol to avoid crowding at wine shops.

Another glaring problem after the lockdown would be employment regeneration. Apart from a few fortunate people, millions of others are facing unemployment due to the lockdown. With the government already facing a massive financial crunch, it is doubtful that it could fund any national employment schemes. The Indian job market had been bad even before the pandemic with unemployment reaching the highest point in over four decades. We can assume that a robust job-market is unlikely for years to come.

Since COVID-19 has affected each country differently, it is hard to predict when lockdowns worldwide would end. Even if India opens up its economy, it would be challenging for international trade to resume. As and when lockdowns do open, the “new normal” would ideally have a higher screening process for things entering and leaving the country. The cost of import-export will consequently go up.

There will be other unforeseen challenges, but as I mentioned, this is all speculation. There is no doubt that things are looking bad, but as the old proverb goes – “Necessity is the mother of invention”. As we continue to fight, we also continue to innovate. Going back to our liquor example, home delivery of alcohol was illegal in most states before the pandemic. Now, the government itself is creating the infrastructure for it.

It is expected that we will likely face extensions to the current lockdown. Things are not going back to normal for at least the next few months, in the best-case scenario. The real challenge facing our government is to pivot through the gradual revival of the economy, make smart and informed policy decisions, and above all not to underestimate the plight of the common man, who is bearing the brunt of the lockdown.

[Read More: Lockdown’s Lesson on Central Planning – It Doesn’t Work!](https://spontaneousorder.in/central-planning-doesnt-work/)

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## SO Musings: Sikkim – Through Other Eyes

Original: https://www.spontaneousorder.in/p/so-musings-sikkim-through-other-eyes

Author: Spontaneous Order

Published: 2020-05-15T13:11:30.000Z

Topics: sikkim-annexation, indian-imperialism, classical-liberals, self-determination

> The anti-colonial genesis of Indian nationalism allowed the postcolonial Indian state to position itself as the promoter of the anti-colonial, anti-racist Third World solidarity agenda on International platforms. The most influential and eloquent propon..

**Summary:**

The postcolonial Indian state promoted an anti-colonial, anti-racist Third World solidarity agenda internationally, led by figures like Nehru and Indira Gandhi, while invoking syncretic heritage and Gandhian non-violence. However, it pursued hegemonic policies in Kashmir, Goa, Nagaland, Sikkim, and Punjab, contradicting this idealism. Classical liberals like Jayaprakash Narayan (JP), C. Rajagopalachari, and Minoo Masani opposed these as imperialistic, advocating peaceful solutions and liberty for affected peoples. JP mediated Naga rebels and formed a Kashmir conciliation group; Masani supported the Naga ceasefire and protested Sikkim's 1975 annexation publicly in 1982. In Freedom First magazine, Masani responded to a reader's challenge over Sikkim—a tiny kingdom of 300,000 with a 340-year-old Chogyal dynasty—admitting disgust at the takeover, house arrest of the ruler, and India's double standards on imperialism. He praised JP as the true anti-imperialist and affirmed Freedom First's consistent stance against Indian overreach in Kashmir, Nagaland, and Sikkim, urging national accountability while upholding liberal principles of freedom for all.

**Key points:**

- Postcolonial India annexed Sikkim in 1975, abolishing its 340-year-old monarchy and sovereignty over 300,000 people, mirroring the imperialism it once fought.
- Classical liberals like Masani, JP Narayan, and Rajagopalachari criticized Indian actions in Sikkim, Kashmir, and Nagaland as imperialistic double standards.
- Masani publicly expressed disgust at Sikkim's takeover and supported JP's mediation for Naga ceasefire and Kashmir conciliation.
- Freedom First upheld a consistent anti-imperialist record, pleading guilty to charges of Indian hypocrisy while defending liberty for small nations and peoples.

**By Spontaneous Order**

* * *

*The anti-colonial genesis of Indian nationalism allowed the postcolonial Indian state to position itself as the promoter of the anti-colonial, anti-racist Third World solidarity agenda on International platforms. The most influential and eloquent proponents of this variant of Indian exceptionalism included Pandit Nehru, VK Krishna Menon, Indira Gandhi, KM Panikkar. Periodic paeans to India’s syncretic civilizational heritage and Gandhi’s principles of satyagraha and non-violence buttressed the Indian Foreign Policy rhetoric. However, the imperatives of survival often drove the postcolonial nation-state to pursue the hegemonic policy. Notable examples would include the tensions over Kashmir, Goa, Nagaland, Sikkim, and Punjab where the Indian state applied the prerogative of a sovereign in a manner that contradicted its claim to idealism.* 

*Whatever the underlying motives of the Indian state, the civil society didn’t unequivocally support these actions. Some saw in the Indian deployment of force over its own population or in the neighbourhood the signs of imperial conduct. The most prominent anti-imperialists, not incidentally, were the veteran nationalists, lifelong fighters of India’s anti-colonial movement. The camp boasted the likes of Jayprakash Narayan, C Rajagopalachari, and Minoo Masani.* 

*The triumvirate was unified in its advocacy for a peaceful solution to the Naga question and opposition to the detention of Sheikh Abdullah in Kashmir. JP offered to mediate between the Naga rebels and the Indian state. Rajaji led the delegation to President Kennedy advocating nuclear non-proliferation. Masani objected to the way Sikkim was made part of India and made his displeasure known in public in 1982.* 

*In responding to a reader in the Freedom First magazine, Masani questioned the double standards of his compatriots on the ‘Indian imperialism’, dubbed JP the ‘real anti-imperialist’, and upheld the liberty of people in cases of Nagas, Kashmir, and Sikkim.*

*Produced below is the article by Minoo Masani.*

The other day I received a letter from a regular reader of Freedom First, who happens to be living in another Asian country. That letter contained, along with praise for Freedom First, a challenge which was posed in the following words:

“l have now read twice the two lead articles in the January Freedom First, No, 348, Nissim Ezekiel’s brilliant editorial “Lies About Poland,” and “Betrayal of Poland” by Mr P. N. Irkbi. Both magnificent, forthright, dauntless, moving pieces of writing. I am glad-very glad indeed-that such ringing blows were struck for Poland, and my only wish, if I may be granted a wish, is that these valiant, intrepid warriors would bring their forces to bear in the cause of Sikkim, the tiny, defenceless kingdom that has vanished under the heel of imperialism, not Russian but Indian.”

How are we in Freedom First who have stood for the freedom of all countries without exception to respond to this challenge?

But first let me quote a few extracts from the letter I have received as they stem from deep conviction and anguish:

“In 1975, before I had ever had any thought of visiting Sikkim, I followed the events leading up to annexation by India very closely because I could see no justification for the takeover, the abolishment of the sovereignty of the tiny nation of 300,000 people, the rude levelling of their Chogyal, whose dynasty was 340 years old, to the rank of a commoner, and the subsequent house arrest to which he was confined. I saw no reason whatsoever for India to resort to the same brand of imperialism that Nehru and others spent years in prison trying to fight, in their struggle to wrest India’s independence from Britain. And now, more than ever after having visited Sikkim three times, I see absolutely no reason for India’s presence there.

“You have in this whole sordid story of political annexation of a sovereign state a perfect example of the double standard that has come to be popularly associated with India in the eyes of the world. Everyone from Mahatma Gandhi to Indira Gandhi loathes imperialism in any form, except of course where India herself can employ it with impunity on tiny neighbouring states.”

A pretty angry indictment which I for one do not feel like contradicting.

When Sikkim was taken over by India in the seventies, I felt quite disgusted. Not being in parliament then, I had no opportunity to voice my protest, but I was glad when Mr. Morarji Desai, Prime Minister of India some years later, admitted that he could not justify the taking over of Sikkim. Unfortunately, he did not feel strong enough to undo the mischief.

Long before the occupation of Sikkim, I had noticed the double standards observed by most of our compatriots on the issue of imperialism. Whether it was in regard to our persecution of Sheikh Mohammed Abdullah or our Government’s activities in Nagaland there was only one prominent Indian who acted like a real anti-imperialist and that was my good friend Jayprakash Narayan. In regard to Kashmir, he formed the India-Pakistan Conciliation Group which still exists in New Delhi with Mrs. Malati Singh as convener. I readily joined that group.

In so far as Nagaland is concerned, I supported JP’s efforts, which finally succeeded in bringing about a cease-fire between the Indian Army and the army of the Nagaland “Republic”. I was able, during my visit to Nagaland as a member of the Parliamentary delegation sent there by Prime Minister Lal Bahadur Shastri, to do my bit in helping Mr Shastri and his Government to bring about a better awareness in Parliament about the case of the Naga people.

But, alas! the names of Indian public men who have stood up against the imperialism of their own country are few and far between. Most of us who have declaimed against British imperialism, French imperialism in Algeria, American imperialism in Latin America and Russian imperialism in Eastern Europe and Afghanistan are unable to apply the same yardstick to our own country. We can see the mote in the other man’s eye, but not the beam in our own.

So we can say to our reader overseas: “You are right to be angry and we as a nation must, we feel, plead guilty to your charge, but all we can say is that we in Freedom First have never lowered our flag and that our record, whether on Kashmir or Nagaland, is one of which we have no reason to be ashamed. We thank you for having given us an opportunity to speak up for the people of Sikkim.”

*The original text can be accessed [here](http://www.freedomfirst.in/uploads/issues/pdf/352.pdf).* 

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [SO Musings: The Retreat from Socialism](https://spontaneousorder.in/the-retreat-from-socialism/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Lockdown’s Lesson on Central Planning – It Doesn’t Work!

Original: https://www.spontaneousorder.in/p/central-planning-doesnt-work

Author: Spontaneous Order

Published: 2020-05-14T15:19:11.000Z

Topics: central-planning, knowledge-problem, decentralization, covid-lockdown

> For all it’s good and bad, this lockdown has hopefully taught a lot of valuable lessons, some of which are simple, particularly the one about central planning. Let’s take this one for example; during the initial phase of lockdown, while the government

**Summary:**

The COVID-19 lockdown in India exemplifies the failure of central planning, as bureaucrats in Delhi overlooked essential ground realities in the supply chain. Initially, while inter-state transport of essential goods was permitted, truck drivers refused to operate because highway dhabas and rest houses were closed, stranding them without food or rest and prompting police bribes. It took weeks for officials to recognize this, leading to the belated inclusion of dhabas and vehicle repair shops in permitted businesses. This incident underscores the 'knowledge problem' articulated by F.A. Hayek: central planners lack the tacit, local knowledge dispersed among individuals at the ground level, which is constantly in flux. Policymakers, insulated from daily realities like driving trucks, make flawed assumptions without consulting those affected. The economy is a complex web of interdependent people, not an Excel sheet or chessboard for top-down manipulation. Comprehensive central planning inevitably fails, as by the time information reaches Delhi, policies are framed, and implemented, conditions have changed. Instead, solutions should emerge from those closest to the action—local administrations fostering grassroots responses—promoting humility and decentralization over bureaucratic overreach.

**Key points:**

- Lockdown halted essential goods transport because central planners ignored truckers' need for open dhabas and rest stops.
- Bureaucrats' failure to consult supply chain workers exemplifies Hayek's 'knowledge problem' in central planning.
- Local knowledge, being dynamic and dispersed, cannot be fully captured by distant experts in Delhi.
- Policies should be decentralized to local administrations closest to ground realities for effective implementation.

**By Sourya Banerjee**

* * *

For all it’s good and bad, this lockdown has hopefully taught a lot of valuable lessons, some of which are simple, particularly the one about central planning. Let’s take this one for example; during the initial phase of lockdown, while the government had closed almost everything, they had still allowed inter-state transportation for essential goods. It was only after a few weeks that government officials realised that despite being allowed, the truck drivers were [not running](https://www.business-standard.com/article/current-affairs/coronavirus-lockdown-with-no-food-or-hope-truckers-stranded-across-india-120032401729_1.html?fbclid=IwAR2xUX_GDhCK23q3V9s7tcxeFS_fTWDfejuTuXzYT_UEOga4QjEvnHhoudM).

After having paused inter-State transport for weeks, officials finally figured out why the truckers weren’t running. The reason turned out to be intuitive and straightforward to everyone in the supply chain. If local *dhabas* and rest houses were closed, how were drivers supposed to drive throughout the night and reach different parts of the country?

Not to mention the lockdown provided a great opportunity to local police to force truck drivers who are stuck to [pay bribes](https://www.indiatoday.in/india/story/coronavirus-lockdown-hundreds-stranded-truck-drivers-face-hunger-bribery-1661077-2020-03-29). Something so simple, and yet so essential to the supply chain, had skipped the notice of the officials who had made the policy. It was because the officials do not drive trucks. They did not speak to anyone who does before making the policy. They just assumed they knew and understood everything.

Thus, when recently, a new list of businesses that were allowed, *dhabas* and vehicle repair shops along the highways, both essential to the supply chain industry, [were added](https://www.hindustantimes.com/india-news/in-relief-to-truckers-govt-opens-highway-repair-shops-dhabas/story-XGuG3yuEbNWPZpIYziUIZM.html). Now, the government had learnt better after having paralysed the supply chain for weeks.

The important lesson here, which I hope *babus* sitting in Delhi would learn (but am not going to hold my breath), is one of humility. Those sitting on the top cannot even begin to understand what is or is not essential for those working at the bottom. The economy is an intricate system of people working together, depended on each other, not a series of numbers on an excel sheet policymakers can read and figure out. People are not pieces on a chessboard to be moved around at will and fancy of someone with no real stake in it.

And this is why comprehensive central planning schemes never seem to work, despite their best intentions and efforts. Central planners tend to forget that ground realities are always in flux, always responding to the need of time and place. Even if bureaucrat in Delhi manages to get the required information to make a policy about, say a village in Kerala or Assam, by the time the information is sent to Delhi, the policy framed, and implementation on the ground, the prevailing conditions would have changed. That is if the first, and most significant problem of central planning, the “Knowledge Problem” as the economist FA Hayek called it.

History has shown us time and again that no government structure can have all the knowledge all the time required to make a decision. No amount of technical expertise, degrees, and collection of subject matter experts can replace the unique nature and importance of local knowledge which is always in a flux. Therefore, it is better when people closest to the ground come up with a solution by themselves. If the state must interfere in the economic affairs of the people, at least the government closest to the people, the local administration should be the one to frame and implement policies.

[Read More: Local Government and Grassroots Democracy in India](https://spontaneousorder.in/local-government-grassroots-democracy-in-india/)

* * *

**About Sourya Banerjee**

Sourya is the Project Associate for CCS Academy in Hyderabad. A BBA-LLB (Hons.) degree holder, Sourya used to practice law in Hyderabad before joining CCS. Sourya has also worked with numerous non-profits social organizations including Red Elephant Foundation, and Red Dot Foundation and also written on law and policy for online platforms such as LiveLaw, The Logical Indian, Qrius etc. An ex- Students for Liberty Hyderabad Local Coordinator, in his free time, Sourya runs a citizen journalism platform called Arguendo.

## An Ode to the Krishi Mandis of India

Original: https://www.spontaneousorder.in/p/an-ode-to-the-krishi-mandis-of-india

Author: Spontaneous Order

Published: 2020-05-13T18:23:48.000Z

Topics: apmc-mandis, agricultural-reforms, farm-market-liberalization, agricultural-monopolies

> Millions of Indians, time and again, reminisce the good old days where the blood-sucking private enterprise was near-nonexistent, and the society relished an epitome of food security under the crown. As one of the real successors of the British, the APM..

**Summary:**

In a sharply satirical ode, Aarat Pandya lambasts India's APMC mandis as neo-regal monopolies that have reigned for over 70 years, forcing farmers' first sales exclusively through state-controlled physical markets and extracting fees from buyers, sellers, agents, and licensees. He mocks their role in perpetuating inefficiency, citing just over 7,000 mandis nationwide and a Pune receipt where a farmer received only ₹1 for 952 kg of onions, underscoring how little farmers actually earn amid 'stability' over market prices. Pandya derides pre-COVID farmer protests demanding more mandis as clinging to socialist security rather than economic freedom, contrasting it with the Hindu Growth Rate era. He hails the central government's COVID-era reforms challenging this 'anti-capitalist' system by allowing direct sales to private buyers or consumers, portraying it as a coup against cronyism and outdated infrastructure that stifles competition and village self-sufficiency dreams. From a classical-liberal lens, the piece celebrates dismantling these 'temples of anti-capitalism' to empower farmers with real market access and profits.

**Key points:**

- APMC mandis mandate exclusive first sales of farm produce through ~7,000 state-controlled markets, charging fees on all participants.
- Farmers often receive negligible payments, as evidenced by a ₹1 receipt for 952 kg of onions in Pune.
- Pre-COVID protests demanded more mandis for 'social security,' resisting direct sales to private buyers.
- Central government's reforms amid COVID enable farmers to bypass mandis and sell directly, challenging 70+ years of monopoly.
- The system entrenches inefficiency and cronyism, hindering agricultural liberalization and farmer prosperity.

**By Aarat Pandya**

* * *

Millions of Indians, time and again, reminisce the good old days where the blood-sucking private enterprise was near-nonexistent, and the society relished an epitome of food security under the crown. As one of the real successors of the British, the APMC *Mandis* and their neo-regal status is tossed to a coup d’état, because of the Coronavirus pandemic. The central government is now challenging their reign of over 70 years. Little did the government thought of the vital role of the *mandis* and their legacy, which will be in tatters once the money-minded scavengers get to the near-perfect supply chain and farmers sell directly to consumers, how tragic. 

The sale of agricultural commodities in India is heavily regulated, for all the right reasons; farmers in India are barely literate, what if a greedy grownup comes to them and offers these farmers a lucrative price they can’t say no to. Here the state governments take care in the form of the Agricultural Produce Marketing Committees (APMC) established by an Act in almost all states. These Acts mandate that the first sale of farm products happens exclusively through the physical markets or *mandis* operated and controlled by the state governments. Do you know what is even better than this? The fees! These *mandis* make sure that there is a fee on buyers and sellers, on commissioning agents, warehousing agents, loading agents, and of course licensing fee for everyone involved. The system ensures that the farmers are not vulnerable to the vagaries of the open market. Some cronies have tried to challenge the “fair price”, but in reality, it is “fair” to assume that our farmers need stability and not the prices which fluctuate like the pulse, pun intended. 

APMC *Mandis* are something innate to the socialist fabric of our great nation, without which the country must’ve had a tough time adhering to the *[Hindu Growth Rate](https://www.financialexpress.com/archive/redefining-the-hindu-rate-of-growth/104268/)*. And so what if these centres of excellence were set-up in the decade following the inception of modern India, these *mandis* re-glorified the past till date. The past where none of the capitalists was entertained, except a few thousand licensed traders, but they don’t count anyway; they are benevolent people who give back to India more than they take for themselves. These *mandis* have been so beautifully designed and managed that allowing private players to participate will destroy the rustic charm of their century-old infrastructure and destroy Gandhi’s dream of having self-sufficient villages. 

Before the COVID-19 pandemic, farmers were agitated and were demanding more *mandis* as India has just over 7,000 of these regulatory temples of anti-capitalism. These farmers are arguing for robust social security over economic independence. They are accustomed to their stroll to the nearest Mandi and handing over their produce to the state, little money is also involved but hail comradery! Since money is already brought in, it is noteworthy that most of these farmers leave these *mandis* with money like they actually get paid for their produce; and don’t you worry we have a proof for you! 

[

![](https://lh3.googleusercontent.com/yJrOyPKmieQT90FEWk6ddZiQJ6q2ylJoyN2tuijjDsBbvmjAOYtMy5VIwDxfruBDxjABEGPGbN6ye1b5y8WIDKS4U_8Wq0d5LEp1xrZBwsnyJNT6ui9IK7FxzUZ_D87ETDljy8qtzXK_1WdRUg)



](https://lh3.googleusercontent.com/yJrOyPKmieQT90FEWk6ddZiQJ6q2ylJoyN2tuijjDsBbvmjAOYtMy5VIwDxfruBDxjABEGPGbN6ye1b5y8WIDKS4U_8Wq0d5LEp1xrZBwsnyJNT6ui9IK7FxzUZ_D87ETDljy8qtzXK_1WdRUg)

*A receipt from an APMC Mandi in Pune, the farmer received ₹1 for 952 kgs of onion.*

It’s crippling to find logic in the central government’s justification of getting rid of these *mandis* to fight economic slowdown due to COVID-19. What economic downturn is to the west, it is economics to India. The same Indians who dutifully paid Lagaan, in the [Aamir Khan starrer film](https://www.imdb.com/title/tt0169102/), would shy away from APMC *Mandis*? Hell no! It was only when the Lagaan got tripled, Aamir Khan decided to break the status quo. Well now, experts are challenging farmers to sell goods directly to private enterprises or the unthinkable, directly to consumers. But probably the central government doesn’t know if in the film someone taught the game of cricket to the farmers, but here our farmers are caught off-guard. These (literally) poor fellows don’t understand the tides of profit. What if they don’t win?

[

![](https://lh4.googleusercontent.com/mmAWv_KW-_4Uc-FC-yO2jucvA-_snEhYy3xxnIzkAQeKB1h4BZZGKEWpoKvmCLaF3cr8dh6dAQVuAOQ0g0Ta_ds7tAXP1zUQCgA2aSFsl6mXI3-Df0pFRGQagyeazgoyYfrt_gwC_tWqliXOWw)



](https://lh4.googleusercontent.com/mmAWv_KW-_4Uc-FC-yO2jucvA-_snEhYy3xxnIzkAQeKB1h4BZZGKEWpoKvmCLaF3cr8dh6dAQVuAOQ0g0Ta_ds7tAXP1zUQCgA2aSFsl6mXI3-Df0pFRGQagyeazgoyYfrt_gwC_tWqliXOWw)

*a still from Lagaan (2001)*

The *mandis* are the defining factor of the Indian agricultural sector. They are the source of employment to hundreds of thousands of “licensed agents” who ensure directing some money to the farmers, to ensure their good lives further and give meaning to *Jai Jawan Jai Kisan.* Rightly so, farmers are not born in this great country to earn a livelihood; they are born to work hard, harvest and donate their produce to the society, and sacrifice their lives for us just like the soldiers. With the doomsday of *mandis*, all of this would come to an end, and Ashutosh Gowariker could have another saga to make a film on reminiscing this anti-profit marvel.  But I wouldn’t hold my breath.

Read more: [Let China Invest, it gets us Foreign Policy Leverage](https://spontaneousorder.in/let-china-invest-it-gets-us-foreign-policy-leverage/)

* * *

**About Aarat Pandya**

Aarat is a Senior Communications Associate at the Centre For Civil Society, where his duties involve outreach, content production & management and ensuring our message reaches beyond our strategic horizons. Prior to this, Aarat has worked with various forms of communications specialisations like with political parties, social enterprises, corporate organisations and the government. He is passionate about youth affairs, education and foreign policy in the Indian subcontinent.

## The Tyranny of Good Intentions

Original: https://www.spontaneousorder.in/p/the-tyranny-of-good-intentions

Author: Spontaneous Order

Published: 2020-05-12T17:42:54.000Z

Topics: labour-reforms, jobless-growth, informal-economy, economic-liberalisation

> Amidst the Corona fiasco, three State governments of Madhya Pradesh, Gujarat and Uttar Pradesh have relaxed their labour regulations to facilitate economic activity and to increase growth. As expected, the move was met with heavy criticisms accusing the..

**Summary:**

India's archaic labour regulations, rooted in the 1947 Industrial Disputes Act and amplified in the 1970s, impose excessive red tape with 47 Union and 157 overlapping State laws, stifling economic growth and formal employment. Despite GDP surging from $270 billion in 1991 to $2.8 trillion in 2018, labour force participation fell from 58.4% to 49.3%, with formal jobs dropping (e.g., 18.6 to 5.7 million from 2005-10) while informal jobs rose, pushing 94% of the workforce into precarious conditions without social security. Strict laws prevent small firms from scaling—India's largest garment units max at 1,000 workers versus 30,000 in China and 10,000 in Bangladesh—fostering jobless growth amid plummeting poverty (45.3% in 1991 to 21.9% in 2011). Unions, representing <10% of workers, oppose reforms despite evidence like Besley-Burgess study showing pro-worker amendments reduce employment, output, and productivity in formal manufacturing. Recent deregulations by Madhya Pradesh, Gujarat, and Uttar Pradesh amid COVID-19 counter 'inhumane' criticisms; true exploitation thrives in the informal sector due to rigid rules. From a classical-liberal view, these 'tyranny of good intentions' oppress employers, mechanize jobs, and block India's demographic dividend, 'Make in India', and global supply chain integration—reforms like simplified compliance are essential now.

**Key points:**

- Strict Indian labour laws cap firm growth, limiting formal jobs and keeping garment factories under 1,000 workers unlike competitors.
- 94% of workforce is informal due to regulatory burdens, taxes, and inspector raj, despite lower productivity (1/10th of formal sector).
- Pro-worker amendments correlate with reduced employment, output, and investment per Besley-Burgess study; pro-business states like Gujarat thrive.
- Labour reforms during crises enable formalization, higher wages, and competition with Vietnam/Bangladesh amid China risks.

**By Benolin Kannadasan**

* * *

Amidst the Corona fiasco, three State governments of Madhya Pradesh, Gujarat and Uttar Pradesh have relaxed their labour regulations to facilitate economic activity and to increase growth. As expected, the move was met with heavy criticisms accusing the deregulation of being ‘inhumane’, ‘predatory’ and bringing back’ slavery’. Even though there is lots of literature on labour reforms and why they are important, through this post, we will look at the primary arguments in favour of reforms and why such accusations and intentions are ill-informed. 

**Let’s see the data**

The current framework that governs employment regulations is the Industrial Disputes Act (IDA) of 1947. Although there have been more than a hundred amendments, the framework that exists was written during and for the British period. This archaic law was made furthermore restrictive to any kind of growth in the 1970s when India came very close to being a dictatorship. To paint a picture of the unnecessary red tape, there are 47 Union laws and 157 State laws which overlap making labour regulations convoluted. Labour, being in the Concurrent list has been pet by both Centre and States to satisfy the loudest proponents of ‘worker rights’ unions who represent, at most, less than ten per cent of the workforce in the country. 

**Jobless growth**

Since LPG (Liberalisation, Privatisation and Globalisation) reforms of the 1990s, India’s growth has increased manifold. GDP at current US$ in 1991 was ~270 billion; this has risen to ~2.8 trillion in 2018 and working towards 5 trillion in the near future. During the same period, the labour force participation rate reduced from 58.4 per cent in 1991 to 49.3 per cent in 2018. 

This fall in employment is due to the change in the composition and nature of jobs. For instance, research attests that from 2005-10, informal jobs have increased substantially from 8.6 to 21.9 million, whereas formal regular jobs have reduced from 18.6 to 5.7 million.  So, is liberalisation the villain of the poor as some would want you to believe? Far from it.

At the same time since 1991, poverty levels have plummeted in India. From 45.3 per cent in 1991 to 21.9 per cent in 2011; this must have reduced even further in 2020. So, what is the cause of this jobless growth? 

Strict labour laws don’t let small companies grow into larger firms. These regulations have restricted economic growth for the employers and thereby more jobs for employees. They have made it difficult and cumbersome for employers to recruit and fire workers even with just cause. The result of which is seen clearly when compared with China and Bangladesh. 

The largest garment manufacturing units in China houses 30,000 workers; the number for Bangladesh goes up to 10,000 workers while India is stuck with not more than 1000 workers in a single unit. Business is a dynamic entity whose requirements change seasonally, but the regulations have been static, thereby limiting the growth of large industries and foregoing formal employment opportunities for Indians. 

**Formal-informal**

Although formal employment opportunities have been made difficult, there is still work to be done. This encourages informal labour force – exploitative contracts, rented workers, bonded labourers and so on. In India, around 94 per cent of the workforce is informal without any social security and other benefits. In comparison, the unions who are opposed to any kind of labour reforms represent less than one-tenth of the total workforce. 

Apart from agriculture, informal non-agricultural workers had been rising from 75.3 per cent in 2010 to 80.28 per cent in 2018. Researches have concluded that the immediate reasons for a growing informal economy are increased taxes, social security contribution burdens, the intensity of regulations and low quality of public services. Employers take the short-cut and hire from the informal sector for their dynamic needs, thereby pushing demand up in the informal sector. 

The World Development Report, 2013 by the World Bank surveyed businesses from 102 countries. They found out that larger firms tend to be more productive, innovate more and compete in the export market often. They also pay better wages and provide a decent security net for the workers. It is evident that employers pay more only when they can afford to, and they will be able to afford only when they grow. But the nature of India’s labour regulations disincentivises businesses from expanding and moving to the formal sector. Researches also confirm that the value-added per worker in the informal manufacturing sector is one-tenth of that of the formal sector; even then employers’ favour informal workers due to the fear of labour laws along with the rent-seeking and inspector raj associated with them. 

**The hangover of good intentions**

“The road to hell is paved with good intentions.”

Everyone wants what is good for the people, but some fixate on the good intentions alone and turn blind to the outcome of such intentions. Those advocating for the existing labour laws seem to be hungover from 20th\-century socialism of good intentions. They fail to see the abysmal state of the manufacturing sector in India even with a massive population of unskilled and semi-skilled labour waiting to be useful. 

In 2004, researchers Besley and Burgess studied amendments to the IDA from 1958 to 1992. They classified the amendments as pro-worker, pro-business or neutral based on their respective nature. They found out that states which made more pro-worker amendments saw low employment, output, productivity and investment in formal manufacturing while informal sector boomed. Although the study was criticised on the basis that it only factored IDA leaving other regulations out; but further studies also point out similar results. States, including Gujarat and Andhra Pradesh, seems to have made pro-business amendments and established flexible labour markets which have helped them achieve positive results in employment and growth.

Strict labour laws were fashionable in the 20th century when mercantilist societies exploited their colonies for cheap labour, but such violation of fundamental rights do not exist in the modern world. It is in the informal sector that workers are poorly treated without any social security and insurance to fall back on. 

Formal businesses employ short-term informal contract labourers in an exploitative manner instead of going through the troublesome and over-demanding statutes of employing formal labourers. We should also note the financial inability of small businesses to comply with social security requirements and labour regulations as mandated by the statutes. This leads to increased unemployment or over-mechanisation or both because employers would invest in capital instead of labour. Therefore, the advocates of stricter labour laws are indirectly batting for pushing more workers into the informal sector, which resembles 20th\-century exploitative practices. In a nutshell, they are indirectly oppressing employers, thereby workers with the tyranny of good intentions.

The government should make it easier to comply with the regulations, thereby encouraging formal employment and growth instead of restricting opportunities. The recent move towards single window registration, insolvency and bankruptcy code, among others are positive steps, even with all their issues. 

**Why waste a crisis?**

Historically India has been able to make structural reforms only during crises, in that way crises are good. However, public-policy wonks opine that no one can stop an idea whose time has come. At the same time, no one can force an idea whose time hasn’t come. They also opine that reforms cannot be done without an intellectual consensus prevailing before the crisis. For example, even before the 1991 liberalisation, an intellectual force was batting for reforms which helped when the time came. 

Similar consensus on the incapacity of the labour regulations is present in the intellectual space among policy-makers. Many feel the need for a simple course correction to capitalise on the enormous demographic dividend and the resources India has. Maybe, the time has come for structural labour reforms in India to commence the formalisation of the majority of workers. This will energise the ‘Make in India’ initiative and integrate India with the global supply chain. Given the current global apprehensions about China; India stands to gain considerably, but we can’t expect to compete with Vietnam or even Bangladesh without reforming labour laws. Petty old moral arguments like accusing reforms as ‘slavery’ should and must be avoided because it again pushes back the intellectual conversation at least by a decade, worse it sympathises with the 20th\-century socialism – a failed ideology by all accounts.

Read more: [E-Waste: A Ticking Time-Bomb](https://spontaneousorder.in/%ef%bb%bfe-waste-a-ticking-time-bomb/)

* * *

**About Benolin Kannadasan**

Benolin is an engineering graduate from the SRM Institute of Science and Technology, Chennai. Inspired by Liberal thought, he is currently pursuing his Bachelor of Arts in Political Science from Tamil Nadu Open University. He has a passion for writing and free thought.

## Forgotten Speeches of GK Sundaram – Part I

Original: https://www.spontaneousorder.in/p/forgotten-speeches-of-gk-sundaram-part-i

Author: Spontaneous Order

Published: 2020-05-12T14:04:52.000Z

Topics: swatantra-party, license-raj, economic-freedom, indian-economic-history

> Editor’s Note: This is the first article in a two-part series highlighting the contributions of GK Sundaram as a Rajya Sabha member. Read the second part here. Soon after independence few dominant leaders were wary of the idea of individual freedom, lib

**Summary:**

The post highlights GK Sundaram's overlooked contributions as a Swatantra Party leader and Rajya Sabha member (1966-1972), who fiercely critiqued post-independence India's socialist policies from a classical-liberal standpoint. It laments how leaders like Nehru abandoned Constituent Assembly-agreed liberal principles of individual freedom, private property, and free enterprise for statist controls, license-permit-quota raj, centralized planning, nationalization, and cooperative farming, ruining the economy for decades. Sundaram, a close Rajaji associate and Indian Liberal Group founder, raised 590 questions and delivered speeches condemning Indira Gandhi's rupee devaluation, public sector waste, deficit financing, transport inefficiencies, and licensing that blocked entrepreneurship—contrasting with Japan's successful credit policies. In 1969, he urged eight pragmatic measures: payment by results across sectors, substantial tax cuts, earnest agricultural efforts, investment confidence, freedom from controls, rupee finance access, export incentives, and drastic expenditure reductions without deficit financing, insisting liberal policies, realistic planning, and efficient administration would strengthen production and currency. The author argues these liberal warnings against socialism's wealth-discouraging folly were ignored until the 1990s crisis, with license raj remnants persisting, calling to revive such forgotten classical-liberal voices.

**Key points:**

- Post-independence socialist policies under Nehru and Indira Gandhi, including license-permit-quota raj and devaluation, ruined India's economy by stifling free enterprise and private property.
- GK Sundaram raised 590 questions in Rajya Sabha and criticized centralized planning, public sector inefficiencies, and deficit financing as barriers to growth.
- Sundaram proposed eight measures for prosperity: payment by results, tax reductions, agricultural efforts, investment incentives, ending controls, finance access, export incentives, and expenditure cuts.
- Licensing policies denied entrepreneurs equal opportunities, unlike Japan's model, perpetuating scarcity and corruption until 1990s reforms.

**By Chandrasekaran Balakrishnan**

* * *

*Editor’s Note: This is the first article in a two-part series highlighting the contributions of GK Sundaram as a Rajya Sabha member. Read the second part [here.](https://spontaneousorder.in/forgotten-speeches-of-gk-sundaram-part-ii/)*

Soon after independence few dominant leaders were wary of the idea of individual freedom, liberty, private property rights, free enterprises, etc. leading to embark on economic freedom after achieving the political freedom from the British. Alas, leaders like Jawaharlal Nehru had expressed reluctance on the implementation of constitutional provisions of liberal principles which was agreed by all after due diligence of debate and discussions in the Constituent Assembly. This trend has continued for decades. Thus, the first fifty years of the Indian economy was ruined by the unwise experimentation of communism, socialism and statist control of means of production, including agriculture activities. 

The dictates of Nehru’s economic policies were not expected out of the fruits of political freedom achieved after fighting for a hundred years and losing thousands of lives. Further, the statist raj policies continued in a completely hollowed manner in the sector after sectors merely for vested interests, and often high hand in the glow of politicians and bureaucrats. Indeed, this is how the entire classical liberal movements of both pre and post-Independent India are utterly killed and forgotten in the contemporary public policy debates, including academia. 

Interestingly, few freedom fighters, thinkers and statesmen were united in shading the Congress’s single-party dominance and its dangerous path of mighty state intervention in the economy, centralised planning, nationalisation, the oppressed idea of cooperative farming, land ceiling in agriculture, among other things. Also, the quest was to reverse the national control raj of Nehru’s socialist and statist policies of license-permit quota raj; the Swatantra Party was formed in August 1959 by C Rajagopalachari or Rajaji, KM Munshi, Prof. NG Ranga, and Minoo Masani. The Swatantra Party premised that the government intervention should be less and more pragmatic level playing facilitator rather than involved in controlling the economy. The party believed that prosperity would be achieved only through fostering individual freedom, private property rights, and free enterprises. 

Tamil Nadu branch of Swatantra Party was very active in the mobilisation of peoples’ supports to its policies. There were several frontline party leaders all across Tamil Nadu including in Coimbatore city with GK Sundaram. Sundaram was a close associate of Rajaji since the 1930s and participated in the freedom struggle. After the formation of the Swatantra Party, Sundaram played a significant role in taking up the policies of the party to the people of Tamil Nadu, even among the poorest. He explained to the people the causes of lack of economic growth and the reasons for years of scarcity of basic necessities like food grains. 

Though, Sundaram lost as the Swatantra Party candidate for Coimbatore Lok Sabha constituency in the 1966 general election, he came second. However, six Swatantra Party members were elected to Lok Sabha from Tamil Nadu – C Muthuswamy, Gounder from Karur; MK Nanja, Gounder from Nilgiris; H Ajamal Khan from Periyakulam, SP Ramamoorthy from Sivakasi, Dr M Santosham from Tiruchendur, and S Xavier from Tirunelveli. 

Rajaji had a strong faith in Sundaram’s vast knowledge and skills and his grasp of the issues of the Indian economy. Sundaram was a founding Member of Indian Liberal Group in 1964. He was also President of the Swatantra Party in 1974 before it was merged with Janta Party which emerged as a national alternative to the Congress.

With support from other parties, Swatantra Party nominated Sundaram to the Upper House of (Rajya Sabha) the Indian Parliament for the period from 3 April 1966 to 2 April 1972. During the six years in Rajya Sabha, he had participated actively in almost all the major debates and discussions and contributed immensely. A look at his list of questions raised and speeches made gives us a unique insight into his wide-ranging knowledge on different subjects and his analytical thinking. He was a first-grade conservative economist in every sense of the term.

Sundaram raised about 590 questions on the current issues and made speeches on the crucial subjects calling upon the attention of the governments to effect the necessary changes in their policies and programmes. He did not spare condemning the governments for their lack of poor thinking on country’s economic policies with too narrow views, without listing to the subject experts, the emerging international order, eradication of hunger and poverty. He was always concerned about poor people’s food security, education, healthcare, and employment.  

In August 1969, Sundaram had fervently criticised Prime Minister Indira Gandhi – *“She is learning economics and this economics student devalued our currency a few years ago, a thing which we cannot forget. It has gone down the pages of history as virtually having ruined the economy of the nation. The same Prime Minister is now in full control of the economy of the nation.”*

About centralised planning for growth and development which was followed in India since independence, Sundaram observed that *“Planning has been such in our country now that it is impossible to carry on any industry without transporting raw materials and goods from one end of the country to the far end of the country.”* 

Further, he vividly noted that *“So much of capital has been invested”* without the decentralised planning in railways transportation in an integrated manner connecting the road transportation. Thus, Sundaram had suggested that *“a clear cut policy between the road transport and the Railways”* needed to increase the productivity of time and resources. While in Parliament he often stormed for the inefficiency of public sector enterprises on all-round and for wasting the scarce public resources.

Sundaram was against deficit financing; he argued – *“Devaluation, they say, will not change the value of the internal rupee. But devaluation and deficit financing have reduced the value both internally and externally. There is no doubt about it. Deficit financing has resulted in devaluation, and both of them have contributed to reducing the value both inside and outside the country.”* He always championed the principles of economic freedom, arguing that they will increase prosperity and freedom for all Indians. 

While speaking on the debate of devaluation of rupee Sundaram said *“that the failure of this Government’s past policies had been acknowledged and the official seal affixed to that failure. By doing so the Government has brought down the prestige of this country among the international countries…. The bluff of the progress has been called off. The people are demoralised today. The Government has lost complete grip and control over economy and administration. which we have been witnessing… They have failed miserably. Their Gold Control Order has failed to stop smuggling, they have failed to unearth the black money and they have failed to stop corruption. Production has stopped.”*  

In August 1969, Sundaram suggested the following eight measures to the government for framing pragmatic policies towards economic growth and inclusive development:

*“(1) First and foremost is payment by result in industrial, agricultural, private, public, Government and other fields. This alone can achieve the goal. You may verify that countries which have devalued have stabilised their economy by sheer work. By hard work only they have come up and not by just planning or by fooling the people.* 

*(2) A substantial reduction in taxation is absolutely necessary to rebuild the industrial development.* 

*(3) We do not want an Everest effort. An earnest effort is necessary in agricultural production which we never had all these 15 years.* 

*(4) We must create confidence and give opportunity for the people to invest in industry.* 

*(5) Then, industrial development should not be impeded by controls. We must be free from controls.* 

*(6) Industry must have adequate rupee finance. At least, if you cannot provide with your money, do not stop them from getting it.* 

*(7) Provide enough incentive for exports wherever it is found absolutely necessary.* 

*(8) And last of all, reduce your expenditure drastically, whether it is private or public sector, but never attempt deficit financing either openly or secretly.* 

*The strength of the currency ultimately depends upon the level and growth of production. Economic policies should be made liberal, planning realistic and administration efficient.”*

While speaking on the challenges of government policies on industrial planning and licensing system, Sundaram had highlighted the best practices of credit policies of Japan for industrialisation and wealth creation. According to him *“It is the policy of the licence permit raj that is to be blamed. It is the licensing that is defective”* and the licensing policies did not give *“an equal opportunity to show… talent, to work hard, given an opportunity to try, and they succeeded.”* Moreover, what furiously irritated the aspiring entrepreneurs was that *“raw materials are governed by quotas, permits and licences.”* 

While speaking on the Finance Bill in May 1966, Sundaram observed that *“Shri Lal Bahadur Shastri when he assumed the Chairmanship of the Planning Commission said that everything was not well with the economy of the nation and he did make a bold attempt to reverse the adverse trends in our economy. With his demise, the new Finance Minister was left without the dynamism and courage for a quick recovery of the country’s economy.”* 

After fifteen years of Nehru’s Soviet model of the mixed economy model, the entire country had new hope and high expectations from Shastri who admitted that all was not well with the Indian economy. Alas, he also passed away all of a sudden, leaving the huge vacuum for the already struggling Indian economy without any clues for the way forward.  

Leaders like Sundaram had perceptively warned the governments for the mindless obsession with the ideas of socialism and communism which discourage wealth creation. The folly of these ideas continued until the balance of payment crisis hit in the 1990s. Even now, the license, permit, quota raj continues for most entrepreneurs. 

Read more: [Mariadas Ruthnaswamy: Liberal Educationalist, Statesman and Writer](https://spontaneousorder.in/mariadas-ruthnaswamy-liberal-educationalist-statesman-and-writer/)

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## Alcohol in Times of Coronavirus: The “New Normal”

Original: https://www.spontaneousorder.in/p/alcohol-in-times-of-coronavirus-the-new-normal

Author: Spontaneous Order

Published: 2020-05-11T16:59:19.000Z

Topics: alcohol-policy, excise-taxes, covid-lockdown, economic-recovery

> Recently, several states including Karnataka, Maharashtra, Haryana, Rajasthan, Kerala, Tamil Nadu and Goa, have informally requested the central government to allow the opening of liquor stores amid the COVID-19 lockdown. The country has been in lockdow..

**Summary:**

Amid COVID-19 lockdowns exceeding 40 days, states like Karnataka, Maharashtra, Haryana, Rajasthan, Kerala, Tamil Nadu, and Goa requested reopening liquor stores to recover lost revenue, exemplified by Delhi's drop from ₹3,500 crores in April 2019 to ₹300 crores in 2020, as alcohol taxes are a major state income source. Shops reopened on May 4, but crowds flouted social distancing, prompting Delhi CM Arvind Kejriwal to impose a 70% 'special corona fee' tax, ostensibly to curb overcrowding while raising funds. The author argues this high tax is counterproductive, discouraging consumption and revenue: a hypothetical shows 70% tax on a ₹100 bottle sold to 100 buyers yields ₹7,000, versus 35% tax sold to 250 buyers yielding ₹8,750. From a classical-liberal viewpoint, governments should phase out lockdowns by steadily reopening industries, imposing reasonable taxes across sectors, rotating shop openings, and enabling home delivery—like Chhattisgarh's website—to avoid crowds and spur activity without unfair burdens. High taxes undermine economic revival urged by experts like Raghuram Rajan. In the 'new normal,' policies must adapt via innovation, such as legal alcohol home delivery, fostering sensible reforms over punitive measures.

**Key points:**

- High taxes like Delhi's 70% 'corona fee' on liquor reduce consumption and state revenue compared to moderate rates.
- Reopen liquor shops with measures like shop rotations and home delivery to maintain social distancing and boost economic activity.
- Phase out lockdowns gradually by reviving multiple industries with reasonable taxes to generate broader revenue without overburdening citizens.
- Embrace the 'new normal' through innovations like legal alcohol home delivery to adapt policies sensibly post-COVID.

**By Swati Singh**

* * *

Recently, several states including Karnataka, Maharashtra, Haryana, Rajasthan, Kerala, Tamil Nadu and Goa, have [informally requested](https://theprint.in/india/governance/modi-govt-could-revisit-order-banning-alcohol-sale-after-pressure-from-states/410622/) the central government to allow the opening of liquor stores amid the COVID-19 lockdown.

The country has been in lockdown for more than 40 days now, and the economic burden it has caused is evident. Since most economic activity is halted, state governments have lost millions in revenue. The [Delhi government’s revenue fell](https://www.livemint.com/news/india/revenue-fell-to-rs-300-cr-in-april-how-will-delhi-govt-function-kejriwal-11588512754178.html) from ₹3,500 crores in April 2019 to ₹300 crores in April 2020. The states’ request to allow liquor sales was due to this sudden financial crunch; mainly as taxes on alcohol is one of the largest sources of revenue for many states.

On 4th May, when lockdown 2.0 ended, and 3.0 started, standalone alcohol shops were allowed to open up. Soon afterwards, photographs of long queues of people waiting to purchase their beloved liquor after a hiatus of 40 days made rounds in the news cycle and social media. This was problematic as social distancing and safety norms were being openly flouted. In an apparent move to discourage overcrowding, and to raise revenue to combat COVID-19, Delhi CM Arvind Kejriwal issued a late-night order announcing [70 per cent extra tax on liquor](https://www.ndtv.com/india-news/delhi-to-charge-extra-70-tax-on-liquor-from-tomorrow-amid-coronavirus-crisis-2223273) from 5th May, calling it a “special corona fee”.

The second motive runs against the initial reason as to why these shops were allowed to open in the first place; to spur economic activity. Unreasonably high taxes on a product discourage its purchase and consumption. By deliberately ordering an unreasonably high tax on alcohol, the Delhi government is likely to lose revenue.

Let’s understand this with an example; suppose there is a 70 per cent tax on alcohol. In this case, a liquor bottle that costs Rs.100 will be sold for Rs. 170. Hypothetically, let’s assume that in this scenario, only well-off people will buy alcohol – let’s say, 100 people. The revenue, in this case, will be Rs. 100 X 70 = Rs. 7,000. Now, suppose the tax was a reasonable 35 per cent. In this case, a Rs.100 bottle will be sold for Rs.135. Since it is cheaper to buy, a considerably larger number of people will buy, let’s assume 250. In this case, the revenue will increase to Rs. 8750. 

Apart from a few fortunate people who still have their jobs, millions of people are bearing the brunt of this lockdown. Experts like [Raghuram Rajan have argued](https://economictimes.indiatimes.com/https:/economictimes.indiatimes.com/markets/stocks/news/raghuram-rajans-3-point-plan-to-get-india-out-of-covid-grip/articleshow/75378869.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst) that the lockdown needs to be *phased out* and economic activity needs to be revived, and rightly so. The step of allowing liquor sales is supposed to be one in that direction. But paired up with a 70 per cent tax hike, this move is counterproductive and would not benefit as much as it could.

It is indeed high time that we begin opening up the economy. *Phasing out* the lockdown means opening up different industries and markets steadily. There are multiple ways to carefully open up the economy, one of which could be a rotation of shops in markets to avoid overcrowding. Opening up multiple businesses will generate a flow of revenue, which means more opportunity for the government to charge a *reasonable* “corona fee” on different products; one that does not put an unfair burden on the people. 

The problem of overcrowding will automatically go away as more shops open along with effective options like home delivery. It is not at all surprising that people queued up outside liquor stores after 40 days of sobriety. A few governments have already started encouraging home delivery; the Chhattisgarh government itself [launched a website](https://www.news18.com/news/india/chhattisgarh-govt-launches-website-for-home-delivery-of-alcohol-to-stop-crowding-at-wine-shops-2607879.html) for this to avoid crowds at wine shops.

It would be wise to accept that things are not going to be “normal” for a long time to come. Social distancing will become the norm, and we will all enter the “post-lockdown world” armed with safety measures to protect ourselves. Policies and behaviours will adapt to the “new normal”, and we will probably see innovation like never before. It took a pandemic for us to start thinking about home delivery of alcohol as a legal option. Hopefully, in the new world, we will see more sensible reforms in behaviours and policies.

Read more: [Should Schools Waive Fees During Lockdown?](https://spontaneousorder.in/should-schools-waive-fees-during-lockdown/)

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## Lift Restrictions In All Zones By July, And Just Learn To Live With Corona

Original: https://www.spontaneousorder.in/p/lift-restrictions-in-all-zones-by-july-and-just-learn-to-live-with-corona

Author: Spontaneous Order

Published: 2020-05-11T16:06:35.000Z

Topics: covid-19, lockdowns, indian-economy, economic-policy

> India’s lockdown has been eased by dividing the country into red, orange and green zones, with high, medium and minimal infections so far, and correspondingly tough curbs on economic activity. This can at best be a very temporary measure. Beyond two or

**Summary:**

Swaminathan SA Aiyer argues that India's zoned lockdown—red, orange, green—is a temporary expedient at best, as prolonging it beyond July risks economic disaster without substantially curbing COVID deaths, given dense urban crowding and multi-person households that thwart control. Global evidence shows lockdowns elevate non-COVID deaths nearly as much as the virus via neglected healthcare, postponed surgeries, and hospital avoidance. Red and orange zones cover 88% of GDP, endangering 60 million small enterprises that sustain millions. April's PMI crashed to 27.5 for manufacturing (from 51.8) and a record-low 5.4 for services (from 49.3), with unemployment hitting 25%. Even if COVID peaks in June, IMF forecasts 1.9% GDP growth; persistence could mean zero or -3%, devastating already-weak banks worse than 2008's recession. Classical-liberal logic favors lifting all but minimal restrictions by July, learning to live with COVID as with TB, malaria, alcohol (5% of deaths), tobacco, and accidents—promoting masks, distancing, elderly isolation, plexiglass in offices/transport, and innovations over shutdowns. Zoning fails as red zones expand, disrupting supply chains even in green areas.

**Key points:**

- Lift all lockdown restrictions by July at latest to avert economic collapse and mass small-enterprise deaths.
- Lockdowns cause non-COVID deaths comparable to COVID via healthcare neglect, justifying minimal curbs instead.
- Red/orange zones encompass 88% of GDP, with April PMI at record lows of 27.5 (manufacturing) and 5.4 (services).
- Treat COVID like TB, malaria, alcohol/tobacco by promoting behaviors, isolation, and innovations rather than zoning.
- Prolonged shutdowns risk GDP contraction to -3%, crippling banks beyond 2008 levels.

**By Swaminathan SA Aiyer**

* * *

India’s lockdown has been eased by dividing the country into red, orange and green zones, with high, medium and minimal infections so far, and correspondingly tough curbs on economic activity. This can at best be a very temporary measure. Beyond two or three months, it will mean economic disaster without avoiding high deaths. Optimists hope the disease will peak and fall after June. If it continues — as is most likely — the best policy will be to ease curbs even in red and orange zones, along with precautions and behavioural changes.

Given India’s natural crowding in streets and markets, plus several people sleeping in one room, I greatly doubt the disease can be controlled quickly through lockdowns or zoning. Besides, as I wrote last week, global experience shows that lockdowns have caused non-Covid deaths to rise almost as fast as Covid deaths because of neglect of other diseases, postponement of cancer screening and elective surgeries, and fear of going to infected hospitals. So, lockdowns can kill almost as many as the virus.

I fear COVID-19 will continue into 2021. Even partial lockdowns for more than a few months in red and orange zones accounting for 88% of GDP can kill most of India’s 60 million small enterprises that sustain millions. After July, at the latest, we should lift all but minimal restrictions in all zones. That means learning to live with COVID, as we do with TB, malaria and other diseases while popularising social distancing and masks, isolating the aged, and using innovations like plexiglass partitions in offices and mass transport.

Global experience suggests that alcohol-related deaths are 5% of the total, far more than COVID is likely to cause. Yet India has relaxed liquor sales to get extra revenue, and the Supreme Court has even advocated home delivery of liquor! Beedis are mass killers yet taxed lightly to protect jobs. If we can live with deadly diseases like TB and malaria, with deaths from alcohol, tobacco, transport and workplace accidents, it may be no riskier to live with COVID, staving off economic disaster.

Optimists say India is handling COVID well with barely 60,000 infections and 2,000 deaths against 1.4 million and nearly 80,000 respectively in the US. This is because of a later start, very little testing and hence a huge underestimation of infections and deaths, and maybe some immunity through vaccinations. But as testing is rising, casualty figures are rising exponentially.

What if the virus persists beyond July? Please admit that the lockdown approach (including zoning) has failed, and so switch to minimal restrictions plus trying for improved social behaviour and innovations to reduce travel and workplace risks.

Data on industrial production and GDP for the lockdown month of April will come only after a lag. The quickest indicator is the purchasing managers index (PMI), estimating changes in orders of managers buying goods or services. A PMI over 50 signifies an increase in orders and below 50 a decrease.  A bad month typically has a PMI of 49 or 48.

But in April, thanks to the lockdown, India’s PMI for manufacturing crashed to 27.5, from 51.8 in March. The services PMI crashed from 49.3 to just 5.4, a world record low. CMIE data suggest unemployment soared to 25% even while labour participation fell. April was an utter disaster. People can make sacrifices and survive with handouts for a few months but not more. Economic activity must resume.

Some easing of the lockdown, possibly the strictest in the world, has begun within graded zones. But the red zones create 43% of GDP, and even with the new relaxations, will be 50% closed. The orange zones with another 38% of GDP will be 30% closed. Since companies even in orange and green zones require components from red zones, the economic disruption will remain massive. The virus is still spreading fast, so economist Neelkanth Mishra estimates that red zones will expand from 130 districts to 181. The answer can’t be to keep shutting down more and more districts.

Assuming COVID peaks in June, followed by a sharp economic revival, the IMF estimates India’s GDP growth at 1.9% in 2020. The IMF admits that if the disease persists, growth could be 3% lower. Moody’s estimates zero growth. Anantha Nageswaran of the PM’s economic advisory council says the worst case could be minus 3%.

  
By contrast, GDP rose 3.9% even in the recession of 2008. Yet the resulting bankruptcies hit our financial sector so hard that banks have not yet recovered. Imagine how badly minus 3% growth will wreck already-crippled banks. COVID panic must not blind us to the consequences of a prolonged shutdown.

*This article was originally published on the Times of India website on 10th of May 2020. It can be accessed [here](https://timesofindia.indiatimes.com/blogs/Swaminomics/lift-restrictions-in-all-zones-by-july-and-just-learn-to-live-with-corona/).*

Read more: [Corona Threat Could Spark a Mega Recession](https://spontaneousorder.in/corona-threat-could-spark-a-mega-recession/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## SO Musings: Trample the Wall

Original: https://www.spontaneousorder.in/p/so-musings-trample-the-wall

Author: Spontaneous Order

Published: 2020-05-08T12:45:40.000Z

Topics: berlin-wall, free-migration, classical-liberalism, anti-populism

> The recent rise of right-wing strongmen and left-wing populists around the globe threaten the liberal world order premised on free trade, rule of law, human rights, and individual liberty. In the US, both the left-wing Bernie Sanders and right-wing Dona..

**Summary:**

The post warns that the global rise of right-wing strongmen like Donald Trump and left-wing populists like Bernie Sanders threatens the classical-liberal world order of free trade, rule of law, human rights, and individual liberty, particularly through opposition to free movement of immigrants seeking dignified lives. Liberals must counter this by drawing lessons from history, exemplified by a 1962 excerpt from Freedom First magazine on the Berlin Wall. The Wall divided dynamic capitalist West Berlin from stagnant communist East Berlin, serving as a natural experiment proving capitalism's superiority. It recounts the brutal death of 18-year-old Peter Fechter, the 50th known East German killed escaping, shot and left to bleed out in view of helpless Western onlookers, sparking riots where West Berliners attacked guards and soldiers. The episode exposed Western flabbiness: U.S. troops at Checkpoint Charlie denied aid despite pleas, paralyzed by fear of Soviet retaliation, allowing piecemeal communist advances. From a classical-liberal view, such walls symbolize illiberal oppression; today's liberals should trample them to defend openness and freedom.

**Key points:**

- Populists like Trump and Sanders oppose immigrant free movement, endangering liberal values of liberty and free trade.
- Berlin Wall demonstrated capitalism's economic dynamism versus communism's misery through divided Berlin's natural experiment.
- Peter Fechter's 1962 death, as the 50th escapee killed, spotlighted communist brutality and sparked West Berlin riots.
- Western powers' fear prevented aid to Fechter, weakening their position against Soviet aggression.
- Liberals must push back against modern 'walls' using historical lessons to champion openness.

**By Spontaneous Order**

* * *

*The recent rise of right-wing strongmen and left-wing populists around the globe threaten the liberal world order premised on free trade, rule of law, human rights, and individual liberty. In the US, [both](http://bleedingheartlibertarians.com/2018/09/in-defense-of-openness-excerpt/) the left-wing Bernie Sanders and right-wing Donald Trump oppose the free movement of immigrants and by extension their bid for a dignified life.*

*As the liberal values of freedom come under attack with the erection of walls on borders and hostile public discourse, it is imperative for liberals to push back. And what better way to do that than offering a lesson from history? Produced below is an excerpt from the 1962 reportage on the Berlin Wall published in the Freedom First magazine.* 

*BK Desai recounts the life at the forefront of the Cold War in Berlin as the Berlin Wall had recently sprung up to divide the city between the capitalist and communist sphere of influence. The economic dynamism of the Western part in contrast to the staid Eastern Berlin offered a miniature natural experiment in history on the efficacy of Capitalism and Communism as an economic system. The reportage also captures the horrendous pain suffered by the Berliners as they sought to escape the misery of Communism even at the expense of putting their lives at risk.*

A week before our arrival in West Berlin, the city was convulsed by the sudden explosion of an orgy of riots in which, for four days, thousands of West Berliners hurled rocks at East Berlin border guards, stoned Russian soldiers and shouted insults at American troops. The cause of this sudden outburst of violence was the tragic death of an eighteen-year-old East Berliner, Peter Fechter, who, while trying to cross the Wall, was shot by East Berlin border guards. Wounded by the bullets, he fell down from the Wall and was allowed slowly to bleed to death in full view of the crowd gathered on the Western side of the Wall who could do nothing but hopelessly watch his slow untended death from his wounds. Fechter was the fiftieth East German known to have been killed while trying to escape across the Wall. But the horrifying manner of his death suddenly spotlighted, for the West Berliners, the inhuman misery in which their 16 million countrymen were living behind the Wall, and the utter hopelessness of their own situation in the face of the brute power that was determined to retain its stranglehold over their countrymen in the Eastern zone.

Fechter’s death also exposed the flabbiness of the Western position in Berlin. The American troops at the Checkpoint Charlie could have, if permitted, given medical aid to Fechter who was moaning helplessly for about half an hour before he succumbed to his injuries. But the fear of possible consequences of such an act rendered the American military authorities on the spot powerless. They refused, inspite of repeated requests from West Berliners, to extend the dying boy any medical assistance. This exaggerated fear of provoking the Soviet authorities into retaliatory measures has always paralysed the Western power at critical times and put them on the defensive. This has forced them to reduce their commitments in Berlin to the barest minimum and given the Soviets a free hand to accomplish their designs of piecemeal annexation of Berlin into the Soviet bloc.

*The full text can be accessed [here](http://www.freedomfirst.in/uploads/issues/pdf/125.pdf)*.

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [SO Musings: Replace the GDP](https://spontaneousorder.in/so-musing-replace-the-gdp/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## GA Natesan: Liberal Scholar and Publisher

Original: https://www.spontaneousorder.in/p/ga-natesan-liberal-scholar-and-publisher

Author: Spontaneous Order

Published: 2020-05-05T17:37:19.000Z

Topics: indian-liberals, classical-liberalism, constitutional-reforms, publishing-history

> For some pundits, it may not be so strange to take deep dive into history in distress to learn and understand the hue and cry of some of the current issues like the financial sector crisis in India or the Coronavirus pandemic. History is witness to grea..

**Summary:**

GA Natesan (1874-1949), a forgotten classical liberal scholar, publisher, journalist, politician, and educationist in British India, played a pivotal role in disseminating liberal ideas through affordable publications in English and Tamil, fostering national awakening via informed debate. Born in Thanjavur district, he founded GA Natesan & Co. in 1897, launching journals like 'The Indian Politics' (advocating constitutional reforms) and 'The Indian Review' (edited for five decades until 1949, featuring contributors like Gokhale, Gandhi, and Sastri, covering economy, agriculture, and freedom struggles). He introduced Gandhi to Tamil Nadu in 1915, hosting him and facilitating Rajagopalachari's first meeting, though he later diverged, quitting Congress post-Gandhi's passive resistance to become the first General Secretary of the National Liberal Federation (1918), promoting Gokhale-Ranade style constitutional paths. Natesan authored 'What India Wants: Autonomy Within the Empire' (1917) and edited symposia on Montagu-Chelmsford reforms, urging Indianisation of services (from 8% to 33% reservation), provincial autonomy, and local self-government. Serving in the Council of States (1923-1931), Madras Corporation for 25+ years, and University of Madras Senate, he drove accountability in public services and education. The post laments distorted histories overlooking such liberals' contributions to constitutional freedom over civil disobedience.

**Key points:**

- GA Natesan founded and edited 'The Indian Review' for five decades, publishing diverse liberal views on freedom, economy, and reforms from thinkers like Gandhi and Sastri.
- As first General Secretary of the National Liberal Federation (1918), he championed constitutional methods for self-government, diverging from Congress after Gandhi's passive resistance.
- He published early Gandhi biographies (1909) and hosted Gandhi's 1915 South India visit, yet advocated 'autonomy within the empire' via reforms like 33% Indianisation of services.
- Natesan reformed public services as Madras Corporation Councillor for over 25 years and improved education accountability at University of Madras.

**By Chandrasekaran Balakrishnan**

* * *

For some pundits, it may not be so strange to take deep dive into history in distress to learn and understand the hue and cry of some of the current issues like the financial sector crisis in India or the Coronavirus pandemic. History is witness to great thinkers and scholars’ magnificent works which invariably help us to understand the history towards building better humanity in years to come but not without uncertainty. Alas, the epidemics of distorted history and some of the forgotten history of Indian economic thoughts have been the phenomenon for several decades even after the country’s independence. One of the forgotten classical liberal scholars and noted publisher in British India was Ganapathi Agraharam Annadhurai Aiyer Natesan in Madras Presidency. 

He was called GA Natesan by many and had played an immense role in the first half of the twentieth century in a different capacity. He was noted classical liberal scholar, writer, journalist, publisher, politician, freedom-fighter, and educationist. He was publisher of nationalist books, pamphlets, monographs, journals, biographies, speeches, and writings of eminent leaders both in English and Tamil languages at much lower prices for more extensive circulation intended towards the national awakening through informed debate and discussion. 

GA Natesan was the one who introduced Gandhi to Tamil Nadu and South India when Gandhi first visited Madras (now Chennai) in 1915 after returning from South Africa. GA Natesan was in contact with Gandhi since 1896 while he was studying in College in Madras. Gandhi stayed at his house from 17 April 1915 to 8 May 1915. It must be noted that C Rajagopalachari or Rajaji met Gandhi for the first time at GA Natesan’s home. For more than half of the century, Natesan was very close to Gandhi personally even before Gandhi returned to India. Still, he seldom agreed with his ideas and thoughts on politics and freedom struggles for varied reasons. 

After Gandhi’s revolutionary passive resistance movements embarked against British Raj, GA Natesan left the Congress Party. He became the ***First General Secretary of National Liberal Federation of India, a Liberal Party founded in 1918*** by VS Srinivasa Sastri and other like-minded liberals who believed and fought freedom movements through constitutional methods as envisaged by MG Ranade and Gokhale. Natesan was Secretary of Madras Branch of Liberal Party from 1922 to 1947 and had played a significant role in promoting liberal ideas among the educated class. 

GA Natesan was born on 25 August 1874 in Ganapathi Agraharam village in Thanjavur district in Madras Presidency, now part of Tamil Nadu. He was schooled at Kumbakonam and went for his higher education at St. Joseph’s College in Tiruchirappalli. He completed his BA in 1897 from Presidency College, Madras. He lost his father when he was two years old and was brought up by his elder brother Vaidyaraman. The latter had a profound influence on him and sent him for higher studies to Glyn Barlow, an Irishman and well-known editor of ***Madras Times*** for an apprentice in journalism. 

After a short period, GA Natesan joined his elder brother Vaidyaraman in press and publishing activities and founded a company called GA Natesan and Co. in 1897 as proprietor. Soon, along with his brother, he started a monthly journal called the ***“The Indian Politics”,*** edited by him. The journal advocated the use of constitutional reforms to attain freedom.

In 1900, GA Natesan started another monthly journal called ***“The Indian Review”*** which was published and edited by him for about five decades till his death in 1949.  In a short period, the journal had become a voice of intellectuals on all significant public matters across India and England for its informative and instructive contents. The journal had literary reviews, illustrations, and sections on economy and agriculture among others. The journal had published materials on all major issue during the Indian Freedom struggle. It had a detailed analysis and included diverse opinions and commentary. Some of the early contributors to this journal were PS Sivasamy Aiyer, RC Dutt, Gokhale, CP Ramaswamy Aiyer, VS Srinivasa Sastri, V Krishnaswamy Aiyer, and Gandhi. 

***The Indian Review*** had a highly praised editorial note by GA Natesan. The note provided a comprehensive review of all aspects of national progress, reflecting Indian thinking and ups and downs of the freedom movement. The journal was published continuously even after Natesan’s death till 1962 by his family and then through different hands, finally ending publication in 1982. GA Natesan was the first person to publish a book on Gandhi in 1909 titled *MK Gandhi: A Sketch of His Life and Work* by HSL Polak. The publication house of GA Natesan and Co. published any content that could awaken the educated class in India to achieve freedom from the British through constitutional methods. GA Natesan had published most erudite and thought-provoking articles and books for several decades.

Apart from his publishing business, GA Natesan had a versatile personality, and he actively participated in the freedom movement and discussions with elected officials of local and national governments. GA Natesan was nominated as Non-Official Member to the Council of States in 1923. He also served another term up to 1931. During his tenure as a Member of the Council of State, he served as Member of the Indian Delegation to the Empire Parliamentary Association in Canada in 1928. He was also a member of the Indian Iron and Steel Tariff Board in 1933-34. 

GA Natesan served as Councillor in the Corporation of Madras for more than a quarter of century initiating the accountability through reforms and professional bureaucracy. He was continuously elected, sometimes unopposed, to the Madras Corporation and made remarkable progress in improving public services. He also served as Fellow, Member of the Senate, and Member of the Syndicate of the University of Madras for a quarter-century and opted out voluntarily. During this period, he brought several reforms to improve the quality of education and accountability of administrators. 

In 2015, Prof Prabha Ravi Shankar wrote a biography on *GA Natesan and National Awakening*. The work focused mostly on Natesan’s association with Gandhi rather than a comprehensive study of his distinctive contributions made in his life in struggles for reforms in education, public services, and constitutional provisions including safeguarding for the poor people both in India and South Africa. Similarly, Ramachandra Guha in his book on *Gandhi Before India* merely stated that GA Natesan was reformer without explaining in detail some of his vital contributions.

In 1917, Natesan wrote a book on ***“What India Wants: Autonomy Within the Empire”*** presenting the case for liberty, freedom, self-government through constitutional reform and urged for providing opportunities to educated Indians in all branches of the British government. Gandhi, PS Sivasamy Aiyer, and VS Srinivasa Sastri wrote forewords to the book which presented with historical views of various Indian and British intellectuals who voiced for advancing the complete freedom from British for various countries including India. In the preface, GA Natesan noted that – ***“I have also endeavoured to show that the constitutional reforms now urged by the Indian people through their leading political organisations are in the line of continuous growth of the Indian polity and involve no violent departure from the principles or methods hitherto recognised by authority”*****.** He believed that maintaining law and order, by all means, is a must for any government in society. Therefore he strongly opposed Gandhi for provoking the country towards civil disobedience movement. 

GA Natesan edited numerous books on Indian affairs of the British government, its policies, and constitutional reforms. It is interesting to note that Natesan had documented the contentions views of many top leaders of different political establishments marvellously through the edited books apart from the monthly journal of ***The Indian Review***.  In 1917, he edited and wrote the introduction for***“Indian Demands: A Symposium On The Memorandum Of The Nineteen And Speeches At The Congress & Moslem League On Their Scheme Of Self-Government For India”.*** Natesan noted that –

*“in any scheme of Imperial Federation, India should be given, through her chosen representatives, a place similar to that of the Self-Governing Dominions; that the Provincial Governments should be made autonomous; that a full measure of local self-government should be immediately granted; that the right to carry arms should be granted to Indians…; that Indians should be allowed to enlist as volunteers and units of a territorial army established in India and, lastly, that commissions in the army should be given to Indian youths…”* It must be noted that the apex leadership of Congress was divided on the provisions of the reform of the Montagu-Chelmsford Scheme. 

Another significant book he edited with an introduction is ***“India’s Goal – Constructive Criticisms by Leading Indians On the Montagu-Chelmsford Scheme”*** in 1918. It included chapters by Gandhi, Jinnah, and Srinivasa Sastri, among others. The primary constitutional reforms of 1918-19 opened debate about the nature and character of self-government, a responsible government, and self-governing institutions at the provincial and federal government levels. Also, the discussion stressed on eroding of the village panchayat system of governance across India and emphasis for revival. The critical reforms brought out by the Montagu-Chelmsford Report emphasised several historical changes such as Indianisation of administration and services with 33 per cent reservation which was only 8 per cent before the reforms. In 1918, Natesan also edited a book on measures to be taken after World War I for taking forward of the constitutional methods for reforms and freedom movement. 

GA Natesan was a pioneering publisher of invaluable multidisciplinary literature and played a major role in the freedom movement especially educating people on alternative ideas to the mainstream party of the Indian National Congress through the Liberal Party and other forums. He had varied interests and championed several causes both within the country and abroad. Natesan was active even days before his death on 29 April 1949 at the age of 76. He was one of few liberal leaders of freedom movements that got to observe Independent India briefly.

Read more: [PS Sivaswamy Aiyer: Forgotten Indian Liberal – Part I](https://spontaneousorder.in/ps-sivaswamy-aiyer/)

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## Shutdowns Kill People And Biz, Ease Them Fast

Original: https://www.spontaneousorder.in/p/covid-shutdowns-kill-people-and-biz-ease-them-fast

Author: Spontaneous Order

Published: 2020-05-04T17:37:07.000Z

Topics: covid-lockdowns, excess-mortality, economic-recovery, fiscal-stimulus

> The most startling lesson from global experience is that shutdowns may be killing almost as many people as the COVID-19. The supposed cure is almost as bad as the disease. The Financial Times, London, analysed excess mortality in March and April — the e

**Summary:**

Swaminathan S.A. Aiyar argues from a classical-liberal perspective that COVID-19 lockdowns, like India's strictest-in-the-world version, kill nearly as many people as the virus itself through excess mortality from neglected healthcare and economic devastation, making the cure as bad as the disease. Global data from the Financial Times shows 49% excess mortality in Europe during March-April 2020, with COVID causing only half; Belgium saw 60%, Netherlands 51%, but Sweden's no-lockdown approach with social distancing yielded just 12%. Urban areas like Jakarta (1,500%), New York (299%), and London (96%) suffered most from patients avoiding hospitals for heart disease, strokes, cancer—UK missed 2,000 weekly cancer referrals, postponing 2 million surgeries. India's 25 million TB cases (440,000 deaths/year) and 15 million malaria cases (20,000 deaths) face disruptions. Yale data: US excess deaths 15,400, only 53% COVID-attributed. Lockdowns destroy India's 65 million enterprises (mostly unregistered, employing masses), crashing GDP worse than the Great Depression. Aiyar urges India to analyze excess mortality, ease shutdowns rapidly to resume activity—the only true stimulus—while quintupling the paltry <1% GDP package to 5% via RBI money-printing, as Japan (20%) and US (16%) have done without inflation.

**Key points:**

- Lockdowns cause excess mortality nearly equal to COVID deaths by neglecting other diseases like TB, malaria, cancer, and heart conditions.
- Sweden's refusal of lockdowns resulted in only 12% excess mortality versus 60% in Belgium and 51% in Netherlands.
- India's 65 million enterprises, mostly unregistered, are dying en masse, demanding rapid easing of shutdowns to save livelihoods.
- Government must quintuple stimulus to 5% of GDP via RBI money-printing to rescue enterprises and lives, prioritizing economic resumption over fiscal caution.

**By Swaminathan SA Aiyer**

* * *

The most startling lesson from global experience is that shutdowns may be killing almost as many people as the COVID-19. The supposed cure is almost as bad as the disease.

The Financial Times, London, analysed excess mortality in March and April — the excess of deaths in these two months compared with the average for five preceding years — for several countries, mostly European. It found excess mortality was a whopping 49%, but Covid caused barely half the excess. Perhaps the non-COVID deaths included some undetected COVID deaths. But in the main, they were caused by the lockdown’s side effects. Lesson: India must take precautions and innovate on safety measures but also resume economic activity as fast as possible.

Excess mortality was 60% in Belgium, 51% in the Netherlands, but only 12% in Sweden. Now, Sweden was the only European country that refused a lockdown and kept going while advocating social distancing, frequent hand washing and constant sanitisation. This suggests that India’s lockdown, the strictest in the world, may have killed the economy without saving lives, because any reduction in COVID deaths may have been offset by excess mortality caused by the lockdown. India urgently needs analysis of its own excess mortality.

This is concentrated in cities — 1,500% in Jakarta, 299% in New York and 96% in London. Doctors say patients coming for other ailments including heart disease, strokes and cancer have fallen dramatically. People with symptoms avoid hospitals, fearful of catching COVID in the crowds there. The entire medical system has shifted focus so overwhelmingly to COVID that other diseases are being neglected. All “non-essential surgeries” have been halted, and most ICU beds are reserved for COVID. This attempt to check COVID has unwittingly increased deaths from other causes.

Cancer Research, UK, says the number of patients with suspected cancer being referred to hospital specialists has fallen dramatically, so perhaps 2,000 cancers are being missed every week. Of these, 400 are being missed because normal screening for breast and bowel cancer has been suspended. Two million scheduled surgeries in the UK alone have been postponed.

Indian private hospitals say that the lockdown has meant a collapse of surgeries and outpatient visits, leading to empty ICU beds and huge financial losses. They desperately need financial help from the government to pay salaries and stay open.

India has 25 million cases of TB with 440,000 deaths per year. WHO estimates that India has 15 million malaria cases causing 20,000 deaths per year. The lockdown has disrupted preventive anti-malaria programmes in most states. The thousand-odd deaths caused by COVID look trivial compared with the mass deaths caused by other diseases getting low priority.

The lockdown has substantially reduced deaths from traffic and workplace accidents. Murders have fallen as criminals stay locked down. So, non-COVID deaths should have fallen sharply the world over. Alas, the lockdown has caused the opposite.

A Yale University study finds that from early March to April 4, the US had 15,400 excess deaths. The share of COVID in excess deaths was only 53% for the US, ranging from 77% in Michigan to just 18% in Maryland.

Former chief statistician Pronab Sen says, rightly, that India must save not just lives but enterprises, which provide livelihoods. Half of India’s productive capacity has been locked down. India has 65 million enterprises, of which only 4 million are formally registered. The unregistered ones account for the bulk of employment and being killed en masse by the lockdown. If you cannot save these enterprises by restarting the economy, you will kill both enterprises and people. GDP has crashed in the US, Japan and China. India will follow. It is the worst downturn since the Great Depression.

Global experience shows India should be spending massively to save people and enterprises. Japan is spending an additional 20% of GDP, the first US package cost 10% of GDP and a second maybe 6%. India’s pathetic rescue package is under 1% of GDP, disgracefully low. It must be quintupled. Since fiscal space is limited and falling with the collapse in tax revenue, RBI must print massive sums to pump at least 5% of GDP to save enterprises and lives. Some economists fear this will cause inflation, but much bigger money-printing in other countries has not raised prices.

The biggest lesson is that stimulus packages have failed to prevent GDP from crashing in the US, Japan and Europe. The only stimulus that matters is a resumption of economic activity. Easing the shutdown is risky but necessary.

*This article was originally published on the Times of India website on the 3rd of May 2020 and can be accessed [here](https://timesofindia.indiatimes.com/blogs/Swaminomics/shutdowns-kill-people-and-biz-ease-them-fast/).*

Read more: [Trilemma of the Ecodemic](https://spontaneousorder.in/trilemma-of-the-ecodemic/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## The Experts’ Incentive

Original: https://www.spontaneousorder.in/p/the-experts-incentive

Author: Spontaneous Order

Published: 2020-05-04T14:32:58.000Z

Topics: bureaucracy, performance-incentives, public-choice, civil-service-reform

> While we may endeavour to solve minor and apparent problems in our everyday lives, there is a general consensus that the more complex and critical issues should be left to the experts. After all, experts have domain-specific knowledge and are best suite..

**Summary:**

The post critiques the assumption that Indian bureaucrats, selected through rigorous exams and training, should centrally control complex decisions like fund allocation due to their expertise, arguing that their incentives are misaligned with societal welfare unlike private sector experts. Private professionals like doctors or electricians are driven by reputation, competition, and profits to deliver optimal results, but government bureaucrats receive fixed salaries, with promotions based on seniority or connections rather than performance, leading to budget maximization for personal power and discretion. This public choice dynamic, where self-interest under weak constraints harms public outcomes, results in inefficient use of taxpayer funds and stifled progress amid minimal bureaucratic competition. The author advocates performance-based incentives, noting a 2017 International Growth Centre report documenting their success in various public sectors. Even allocating a small portion of India's large bureaucracy's wage bill to merit-based rewards, accurately measured, could yield significant improvements. Echoing Thomas Sowell, it warns against entrusting decisions to those facing no penalties for errors, urging incentive reforms for better governance from a classical-liberal viewpoint favoring aligned self-interest over expert centralization.

**Key points:**

- Bureaucrats possess domain expertise but prioritize budget expansion for power due to fixed salaries and seniority promotions, unlike profit-driven private experts.
- Misaligned incentives in government lead to suboptimal decisions on taxpayer funds and societal development.
- Performance-based incentives have improved public sector outcomes, as shown in the 2017 International Growth Centre report.
- India should introduce modest merit-based rewards from the bureaucratic wage bill to better align incentives with public welfare.

**By Swati Singh**

* * *

While we may endeavour to solve minor and apparent problems in our everyday lives, there is a general consensus that the more complex and critical issues should be left to the experts. After all, experts have domain-specific knowledge and are best suited, through training and research, to do a particular job. Experts statistically have a higher chance of doing a better job within their field. An electrician, for example, is a specialist at repairing and maintaining the electrical systems. So, when our wiring is faulty, we call upon this expert. The same is the case with doctors, managers, counsellors, consultants and the like.

This terminology is often used in another sphere of human society – governance and administration. During arguments advocating decentralisation of power, or giving communities more autonomy to make crucial decisions, the counter-argument is made that these decisions and their enforcement should be left to the experts – public officials, technocrats, and others.

Let us examine the basis of this assumption. In the Indian administrative system, bureaucrats are selected through a series of intensive examinations and interviews. They are required to demonstrate extensive knowledge in several disciplines. Once they clear the screening process, they are subjected to further specialised training. Compared to the average Indian, the bureaucrats and the technocrats have arguably more in-depth knowledge about specific fields or at least a more profound formal education in their field.

When it comes to important administrative decisions like fund allocation, building roads and so on, the bureaucrats could be more efficient in making these decisions. Of course, there could be exceptions but leaving that aside, and conceding for a moment that bureaucrats are equipped to make these decisions if we press forward, we notice another glaring problem. We take for granted that experts will use their expertise and produce socially optimal results. This is mostly true in the private sector since the incentives to perform are stronger. But what about the government?

In the private sector, experts are structurally driven to use their expertise. The business of doctors, electricians, counsellors etc. depends on their reputation, which increases or decreases based on the quality of service they provide. In short, if you provide excellent service by using your expertise, you will have a more extensive clientele, and your business will bloom. Competition and profits are major incentives for better performance. However, the same is not true in the bureaucratic environment. Government employees are paid fixed salaries regardless of their work. Even the incentive of promotions is not linked to results. In most cases, one is promoted due to seniority or connections. 

Public and private choice processes are different, not because the motivations of actors are different, but because of differences in the incentives and constraints that exist in the pursuit of self-interest in the two settings. 

Budget maximisation seems to be the primary goal of bureaucrats because more funding for their departments translates into broader administrative discretion, more opportunities for promotion; basically, more power. But the primary incentive here should not be to gain more power; it should be to use expertise for societal development.  It is not that bureaucrats do not have incentives, just that they are not well-aligned with the aspirations of the society. After all, who wants bigger budgets and more powers for government officials?

Bureaucrats have autonomy in making administrative decisions, but they do not have the right incentives to do a good job and outperform in fulfilment of their duties. This is very dangerous and needs to be critiqued because bureaucrats spend large sums of taxpayer money. They take decisions about your and my life, and if their incentives are misaligned, development cannot happen.

The concept of incentives becomes more critical in the government than in the private sector, since the government is supposed to exist for the welfare of the people. There is minimal competition among bureaucrats which reduces incentives to perform well. Such a structure kills initiatives, inhibits societal progress, and it needs to be checked. 

It’s well known that performance-based incentives motivate behaviours better than anything else. To limit political influence over salaries of bureaucrats or civil servants, they are typically based on rigid pay scales with very less room for using financial incentives to reward performance. Nonetheless, it is possible to develop creative schemes to motivate bureaucrats to perform better based on outcomes achieved. Multiple governments have done it. A 2017 [report](https://www.theigc.org/wp-content/uploads/2017/03/IGCJ5270_PublicSectorWorkersGrowthBrief_220317_WEB.pdf) by the International Growth Centre titled “*Rewarding bureaucrats: Can incentives improve public sector performance?”* mentions research findings in different spheres of the public sector, where well-designed incentives have worked.

India has a considerably large bureaucracy, so it might not be possible to conduct a largescale restructuring of government salary structures. However, leveraging even just a small portion of the wage bill toward merit-based incentives may yield surprising results, particularly when performance is accurately measured.

As Thomas Sowell rightly pointed out – “*It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong*.”

Read more: [Five Reform ideas for ‘Minimum Government, Maximum Governance’](https://spontaneousorder.in/five-reform-ideas-for-minimum-government-maximum-governance/)

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## SO Musings: Soviet Dissidents, Detente and Liberty

Original: https://www.spontaneousorder.in/p/soviet-dissidents-detente-and-liberty

Author: Spontaneous Order

Published: 2020-05-01T14:28:21.000Z

Topics: cold-war, soviet-dissidents, human-rights, indian-liberals

> The global Cold War has been variously interpreted as the conflict between two Great Powers for global hegemony (John Mearsheimer) or conflict between two strong versions of nationalism (Jawaharlal Nehru). But, the most prevalent explanation of the Cold..

**Summary:**

The post frames the Cold War as an ideological clash between Western liberalism—emphasizing individualism, democracy, freedom of expression, consumer prosperity, human rights, and free markets—and Soviet communism's planned economy and authoritarian 'dictatorship of the proletariat.' With direct confrontation averted by nuclear MAD, proxy ideological battles ensued globally, including in India. Indian liberals engaged actively; in 1975, A.G. Noorani's book review in Freedom First critiqued Soviet communism through Nobel laureates Andrei Sakharov and Aleksandr Solzhenitsyn's writings exposing human rights violations. Noorani urged Western powers to condition détente negotiations on USSR human rights acceptance, presciently influencing the 1975 Helsinki Accords, which historian Thomas Borstelmann credits with empowering Soviet dissidents and weakening the regime. The review highlighted Western intellectuals' 1973 statement demanding intellectual freedom in Europe talks and Sakharov's warning that détente without democratization risks Western capitulation to Soviet bureaucracy. Noorani portrayed the dissidents as vital liberty exemplars, underscoring the need to link security cooperation to curbing arbitrary state power from a classical-liberal viewpoint.

**Key points:**

- Cold War represented liberalism's promotion of individual rights and free markets against Soviet communism's authoritarianism.
- A.G. Noorani's 1975 Freedom First review praised Sakharov and Solzhenitsyn for exposing Soviet human rights abuses.
- Noorani advocated pressuring USSR to accept human rights norms in détente talks, contributing to the 1975 Helsinki Accords.
- Sakharov warned that détente without democratization would enable Soviet dominance by trading resources for Western concessions on liberty.

**By Spontaneous Order**

* * *

*The global Cold War has been variously interpreted as the conflict between two Great Powers for global hegemony (John Mearsheimer) or conflict between two strong versions of nationalism (Jawaharlal Nehru). But, the most prevalent explanation of the Cold War pits it as a fight between two opposing universalistic ideologies- liberalism and communism. The presence of nuclear weapons and the threat of Mutually Assured Destruction (MAD) prevented direct military confrontation between the two powers. However, the proxy war which was in full swing included the promotion of competing visions of the arrangement of society.* 

*The US and its Western allies saw themselves as the promoter of individualism, democracy, freedom of expression, consumerist prosperity, human rights, and free markets. Communist USSR saw itself as the defender of the oppressed against Western imperialism and capitalist exploitation by presenting an alternate model of planned economy and authoritarian polity, euphemistically called the dictatorship of the proletariat.*

*The global extent of the Cold War competition meant India wasn’t to be left untouched. Indian public space engaged with the events in the wider field of the Cold War around the globe. Indian liberals here were no exception. For instance, in 1975, A G Noorani published his critique of Soviet communism in the form of a book review in the liberal journal Freedom First. Noorani’s review article focused on edited volumes of the writings of Nobel prize winners Andrei Sakharov and Aleksandr Solzhenitsyn, two of the most remarkable dissidents against Soviet Communism in the 1970s.*

*Sakharov and Solzhenitsyn used their writings effectively to criticize the human rights violation by the USSR. Historian Thomas Borstelmann has argued that the revelation of the horrors of Soviet governance in the 1970s contributed significantly to the weakening of the Soviet empire.  Noorani’s review of the writings of the two courageous dissidents praised the good fight and made the case for the Western powers to put pressure on the USSR to accept human rights norms as part of the ongoing detente negotiations. The negotiations finally culminated in the Helsinki Accords of 1975. According to Thomas Borstelmann, the Accord provided a very powerful weapon to the dissidents within the Soviet regime and advanced the cause of human rights.*

*Noorani’s book review, in this sense, was prescient in agreeing with the Western intellectuals who demanded the USSR’s acceptance of human rights as part of the ongoing negotiations during the Conference on Security and Co-operation in Europe in 1973. The review further focused on the need for intellectual freedom to uncover the arbitrary uses of state power. Noorani portrayed the dissident duos as examples of lovers of liberty the world over would forget only at their peril.*

*Following the exhortation of Noorani, produced below is an excerpt from his book review.*

In October 1973, more than twenty West European intellectuals signed and published a statement declaring that vital principles of intellectual freedom were in danger of being neglected at the Conference on Security and Co-operation in Europe which Russians were trying to hustle through. They said “We hope for growing political detente, but so far attempts to achieve this have in fact been accompanied by a worsening in the cultural situation both within the countries of Eastern Europe and in their relations with the West . . . Intellectual co-operation and mutual understanding will remain empty slogans unless minimum conditions of cultural freedom are observed in all countries concerned.” (The Times, London October 12, 1973). Among the signatories were men like Raymond Aron, Denis de Rougement, Gunter Grass, and Leopold Labedz.

The hub of the matter is that while Russia accepted an agenda for the Geneva talks which includes references to human rights and “better conditions for increased cultural and educational exchanges, for broader dissemination of information, for contacts between people, and for the solution of humanitarian problems,” on the other hand it has insisted that co-operation should be “carried out on the basis of respect for the sovereignty, laws and customs of each country,” a euphemism for its totalitarian system.

Is the quest for detente, then, reconcilable with support for individual liberty in Russia? No more authoritative opinion on this subject can be expressed than the one Dr Andrei Sakharov, the distinguished nuclear physicist and spokesman for Russia’s Human Rights Movement did in an interview he gave to Western correspondents at his Moscow flat on August 2I, 1973, “Detente without democratization, a rapprochement when the West in fact accepts our rules of the game in this process of rapprochement, such a rapprochement would be very dangerous in that respect, and wouldn’t solve any of the world’s problems, and would mean simply a capitulation to our real or exaggerated strength. lt would mean an attempt to trade, to get from us gas and oil, neglecting all other aspects of the problems. I think it’s very dangerous.

“By liberating ourselves from problems we can’t solve ourselves, we could concentrate on accommodating strength, and as a result, the whole world would be disarmed and facing our uncontrollable bureaucratic apparatus. I think that detente without any qualifications, accepting our rules of the game, would be very bad.

*The full text of the review can be accessed [here](http://www.freedomfirst.in/uploads/issues/pdf/276.pdf).*  

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [SO Musings: Liberalism and Freedom](https://spontaneousorder.in/liberalism-and-freedom/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Let China Invest, it gets us Foreign Policy Leverage

Original: https://www.spontaneousorder.in/p/let-china-invest-it-gets-us-foreign-policy-leverage

Author: Spontaneous Order

Published: 2020-04-29T17:43:41.000Z

Topics: chinese-investment, foreign-direct-investment, economic-leverage, india-china-relations

> I have castigated the government for curbing Chinese investments in India. Critics accuse me of endangering national security by espousing unhindered entry of a superpower that is not-so-friendly, if not an outright foe. Chinese companies are not normal..

**Summary:**

Swaminathan S.A. Aiyar argues that India should welcome Chinese investments rather than restrict them, as this provides greater foreign policy leverage over China. Critics fear Chinese state-controlled firms will dominate strategic sectors amid low stock prices, but Aiyar counters that India holds the upper hand, able to impose arbitrary rule changes disadvantaging foreigners, as evidenced by past actions: Walmart's $16 billion Flipkart acquisition was undermined by e-commerce rules favoring Reliance Jio; Vodafone faced a $2 billion retrospective tax after Supreme Court victory; Nokia's factory closed over a Rs 10,000 crore tax demand (settled at Rs 1,600 crore in 2018); 2G telecom licenses were canceled without compensation; and 1970s nationalizations forced out Burmah Shell, Esso, Caltex, IBM, and Coca-Cola. With safeguards like prohibiting strategic takeovers and mandating data storage on Indian servers, more Chinese investment increases India's ability to threaten regulatory retaliation. Aiyar, from a classical-liberal viewpoint, sees India's reputation for 'bashing' investors as a strength, not a flaw, turning the risk onto China. Depressed markets make now ideal for inflows to boost prices and public sector auction proceeds exceeding a trillion rupees.

**Key points:**

- India gains foreign policy leverage by encouraging Chinese investments, enabling threats of regulatory changes to disadvantage them.
- Historical precedents like Walmart's $16 billion overpayment on Flipkart and Nokia's Rs 10,000 crore tax dispute demonstrate India's power over foreign investors.
- Safeguards such as strategic sector prohibitions and data localization mitigate risks while maximizing leverage.
- Depressed stock prices provide an opportunity for Chinese inflows to raise valuations and enhance public sector disinvestment auctions.

**By Swaminathan SA Aiyer**

* * *

I have castigated the government for curbing Chinese investments in India. Critics accuse me of endangering national security by espousing unhindered entry of a superpower that is not-so-friendly, if not an outright foe. Chinese companies are not normal foreign investors because the Chinese government has large stakes in or total control of its corporations, so all Chinese investment is ultimately political. The government fears China will take advantage of low stock market prices to take over strategic industries and otherwise misuse its ownership.

Sorry, but in terms of foreign policy leverage, the truth is exactly the opposite. India can certainly list and prohibit companies of strategic value from takeover by any foreigner. India should also ensure that it does not lose data control — it has already decreed (despite US opposition) that foreign companies will have to store data on Indian servers.

Subject to such safeguards, the more China invests in India, the greater will be India’s leverage over China since it can threaten changes in rules and laws on foreign investment to China’s disadvantage. Such leverage must not be used lightly but is of value.

Foreign investors say India is notorious for arbitrary changes in rules and laws to hurt outsiders. It has a long track record of letting foreign investors in and then bashing them. I and other critics have called this bad economic policy. But it certainly means foreign investors are more at risk than India.

Just ask Walmart, which paid a whopping $16 billion to acquire Flipkart. It seemed that Walmart and Amazon would now dominate e-commerce. But the government changed its e-commerce rules, limiting activities by foreign e-commerce firms while imposing no such limits on Reliance Jio, the only Indian company capable of combating the global giants. The move favouring Reliance was brazen, unapologetic nationalism. At a stroke, Walmart’s $16 billion was turned into a huge overpayment, and Indian strategic control of e-commerce was affirmed.

Earlier when Vodafone entered India through an acquisition, it had a $2 billion dispute over capital gains tax. The Supreme Court upheld Vodafone. But the government changed the law with retrospective effect to make Vodafone pay after all!

Nokia built a giant phone handset factory in Tamil Nadu. But the government raised an inflated tax demand which, with penalties and interest, went up to Rs 10,000 crore. Some news reports claimed Nokia had suffered for a refusal to pay bribes. Nokia shut down. Eventually after international arbitration in 2018, the matter was settled for a reduced tax payment of Rs 1,600 crore. Still, this highlighted the risks to foreign investors.

Several foreign companies bid for and got 2G telecom licences. But the Supreme Court struck down all licences because there was no auction and some Indian companies were allegedly favoured. Foreign companies protested that they were blameless and should not be penalised. But they were all thrown out despite having invested millions and were denied any compensation.

In the 1950s, Burmah Shell, Esso (now called Exxon) and Caltex were wooed to set up refineries and retail outlets in India. But in the 1970s, price controls were imposed to make them uneconomic, and they ultimately sold out to the government for a pittance. Changes of rules on foreign investment in 1977 obliged IBM and Coca Cola to exit India. India has downed many of the biggest multinational corporations.

In sum, the problem is not that India risks being taken over by foreign investors. Rather, even the biggest foreign investors risk being taken to the cleaners by India. So, what if Chinese investors are really the Chinese Communist Party? Next time India fixes a foreign investor, may it be the Chinese Communist Party.

Once, foreign oil companies in the Middle East virtually ran countries they invested in. When they were nationalised by Iran’s Mosaddeq in 1951, the UK and USA organised a coup to oust him. That colonial era is long gone. In 1974, all OPEC countries nationalised the biggest oil companies, and even the US was helpless to stop it. The supposed puppets triumphed over the supposed puppeteers.

Lesson: massive foreign investment is a bigger risk for the foreigner than the investee country. So, let us attract as much Chinese investment as possible since the main risk will be theirs, not ours. Yes, stock market prices are depressed today, but that is a good reason to encourage Chinese inflows that raise prices. The government wants to raise over a trillion rupees by auctioning public sector companies. We need aggressive Chinese bidders to maximise auction prices.

*This post was originally published on 26th April 2020 on the Times of India website. It can be accessed [here](https://timesofindia.indiatimes.com/blogs/Swaminomics/let-china-invest-it-gets-us-foreign-policy-leverage/).*

Read more: [Relief Package is Peanuts, India Needs to Triple it](https://spontaneousorder.in/relief-package-is-peanuts-india-needs-to-triple-it/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Supreme Court Warns Against Overzealous Reservations

Original: https://www.spontaneousorder.in/p/supreme-court-warns-against-overzealous-reservations

Author: Spontaneous Order

Published: 2020-04-28T15:55:03.000Z

Topics: reservations, affirmative-action, supreme-court, constitutional-rights

> A five-judge bench of the Hon’ble Supreme Court quashed the decision of the Andhra Pradesh government to provide 100 per cent reservation of teachers of the Scheduled Tribes on April 22. With the decision, the Court has reignited the debate on reservati

**Summary:**

The Supreme Court quashed the Andhra Pradesh government's 2000 order granting 100% reservation for Scheduled Tribes in teaching posts in tribal areas, deeming it unconstitutional as it violates the 50% reservation ceiling from the Mandal Commission case, discriminates against general category, SCs, OBCs, and even some STs, and breaches Articles 14, 15, and 16. The Court imposed a Rs. 5 lakh fine on Andhra Pradesh and Telangana governments. It criticized governments' lack of political will to update SC/ST/OBC lists despite 72 years of independence, noting reservations were envisaged to end social disparities in 10 years but have expanded without review, failing to reach the truly downtrodden. From a classical-liberal viewpoint, the author argues the reservation system must be investigated for effectiveness; benefits should target only those with actual social or economic backwardness, not the capable or progressed, to honor the Constitution's framers' intent. Governments repeatedly reprimanded by the Court show no signs of reform.

**Key points:**

- Supreme Court quashed 100% ST teacher reservation in AP tribal areas, upholding 50% ceiling and equality rights under Articles 14-16.
- Court fined AP and Telangana governments Rs. 5 lakh and urged updating outdated SC/ST/OBC lists due to lack of political will.
- Reservations, meant to end backwardness in 10 years, persist and expand without review, failing to benefit the truly downtrodden.
- Only individuals with genuine social or economic backwardness should receive reservations, excluding the capable and progressed.
- Governments must reform the system to align with constitutional intent, as repeated judicial reprimands go unheeded.

**By Sudhanshu Neema**

* * *

A five-judge bench of the Hon’ble Supreme Court [quashed](https://indiankanoon.org/doc/17693527/) the decision of the Andhra Pradesh government to provide 100 per cent reservation of teachers of the Scheduled Tribes on April 22. With the decision, the Court has reignited the debate on reservations in government jobs and higher educational institutions. The Court also restated its judgment in the famous [Mandal Commission case](https://thefactfactor.com/facts/law/constitutional_law/mandal-commission-case/1223/) wherein it had mandated a ceiling of 50 per cent on reservations.

Let us first understand the case. In January 2000, the Governor of Andhra Pradesh issued an order granting 100 per cent reservation members of the scheduled tribes in teaching positions in primary schools located in the tribal areas. The case came via an appeal from the High Court of Andhra Pradesh, which had deemed the order constitutional. While quashing the order, the Hon’ble Supreme Court noted that such 100 per cent reservation in particular jobs not only discriminates against the members of the general category but also the members of Scheduled Castes and Other Backward Classes. The Court stated;

*“By providing 100 per cent reservation to the Scheduled Tribes has deprived the Scheduled Castes and the Other Backward Classes (OBCs) also of their due representation. It also impinges upon the right of open category and scheduled tribes who have settled in the Scheduled Areas after January 26, 1950. The rights of the Scheduled Tribes who are not residents of the scheduled areas shall also be adversely affected if the impugned order is allowed to become operational.”*

The Court also stated that 100 per cent reservation is a clear violation of the right to equality before the law under Article 14, right against discrimination under Article 15, and the right to equal opportunity guaranteed under Article 16 of the Constitution. The judges determined that there was no reasonable explanation available to the state government to provide 100 per cent reservations for a particular office. The Court also levied a fine of Rs. 5 lakh on the Telangana and Andhra Pradesh governments.

While the judgment per se is not something new, the additional remarks made by the Hon’ble Court deserve due appreciation. The Court categorically stated that due to the lack of political will, governments refrain from doing anything on reservations. However, it is the responsibility of the state governments to change the list of scheduled castes, tribes and OBCs to keep up with the time. The bench also expressed regret over the current state of affairs by observing – *“It is apparent that despite more than 72 years of attaining independence, we are not able to provide benefits to the bottom line, i.e., down­trodden and oppressed classes. Benefits meant to such classes are not reaching them.”*

Further, the Court opined that;

*“It was envisaged that social disparities, economic and backwardness should be wiped out within a period of 10 years, but gradually, amendments have been made, and there is no review of the lists nor the provisions of the reservation have come to an end. Instead, there is a demand to increase them and to provide reservations within the reservation. It is very hard for any elected government to have the political will to meet with the challenges arising out of the aforesaid scenario. By grant of privileges and amenities, it was felt that the aspirations of socially and economically backward classes would be met, and inequalities would diminish.”*

Reservation is a complex issue in India. Those who have it, don’t want to give it up and those who don’t have it, want their caste added to the list of reserved categories. We must investigate whether the system we have established in the name of “social justice” is achieving its intended objectives? Those who are capable and have already progressed socially must not get the benefits of reservations. Only those who need reservations due to actual social or economic backwardness should get preferential treatment under the law. Only then we will be able to claim that we have respected the will of the framers of the Constitution. This is not the first time the Hon’ble Supreme Court has reprimanded the government on reservations, but are governments listening?

[Read More: Supreme Court of India Needs a Breather](https://spontaneousorder.in/supreme-court-needs-a-breather/)

* * *

**About Sudhanshu Neema**

Sudhanshu is a lawyer and economist working as Manager, Research at the Centre for Civil Society. He served as a Frederic Bastiat Fellow at the Mercatus Center at George Mason University in 2015-16.

## Mariadas Ruthnaswamy: Liberal Educationalist, Statesman and Writer

Original: https://www.spontaneousorder.in/p/mariadas-ruthnaswamy-liberal-educationalist-statesman-and-writer

Author: Spontaneous Order

Published: 2020-04-27T15:10:34.000Z

Topics: classical-liberalism, swatantra-party, economic-freedom, indian-education

> During the last century, Tamil Nadu has produced many political leaders, liberal scholars, constitutionalists, social reformers, and public policy thinkers of far excellence. But the quality of the last half of the century’s polity in Tamil Nadu had mer

**Summary:**

The post laments the neglect of classical liberal thinkers in Tamil Nadu since 1966 amid ideological indoctrination, hero-worship, and distortion of liberal ideas, even post-1991 economic reforms. It profiles Mariadas Ruthnaswamy (1885-1977), a distinguished liberal educationalist, statesman, and writer born in Madras, educated at Oxford and Cambridge (contemporary of Nehru), and qualified as a barrister in 1910. He served as first Indian Principal of Pachiyappas College (1921-1927), Madras Law College (1928-1930), and Vice-Chancellor of Annamalai University (1942-1948); politically, as Justice Party member, Madras Legislative Council President (1925-1926), and Swatantra Party founding Vice President and Rajya Sabha member for two terms (1962-1974), earning Padma Bhushan in 1968. Ruthnaswamy prioritized economic freedom for prosperity and equal opportunities, criticizing freedom movements for ignoring social reforms and economic liberty, Nehruvian socialism, and central planning. He advocated secure property, improved roads and communications, free trade, decentralized planning, and village panchayats. His books like 'The Political Philosophy of Mr. Gandhi' (1922), 'Agenda for India' (1971) assimilated liberal ideas against socialism and communism, yet were marginalized by propagandists and even his community.

**Key points:**

- Mariadas Ruthnaswamy argued economic freedom via secure property, free trade, and infrastructure precedes political and social progress.
- He criticized Nehruvian socialism and urged decentralized planning through village panchayats to foster growth.
- Ruthnaswamy warned that political power without liberal education fails social reform.
- As Swatantra Party leader, he served two Rajya Sabha terms (1962-1974) advocating classical liberal principles.
- His prolific writings critiqued Gandhi, socialism, and centralization but were neglected post-independence.

**By Chandrasekaran Balakrishnan**

* * *

During the last century, Tamil Nadu has produced many political leaders, liberal scholars, constitutionalists, social reformers, and public policy thinkers of far excellence. But the quality of the last half of the century’s polity in Tamil Nadu had merely served for advancing the one’s ego on others for gaining the vote motives. This has been the case at least since 1966, involving massive indoctrination of one particular ideology and distortion of classical liberal thinkers’ thoughts. 

Thoughts of some of the leading scholars on classical liberal principles were not only forgotten but perceptively neglected in all spheres of the mainstream practices. Furthermore, this era became an ideal hero-worship of political leaders without much thought about the indoctrination of the youth. The tragedy is that even after three decades of the first wave of economic reforms and free-market economic policies, the ignorance over the relevance of classical liberals’ thoughts continues. 

One of the great liberal scholars in recent times was Mariadas Ruthnaswamy. He was born in August 1885 at Royapuram in Madras (now Chennai) to MI Ruthnaswamy and MT Ruthnaswamy. Mariadas Ruthnaswamy was an authority on Indian history, political theory, and economics and often differed from others. Few have had such a varied and distinguished public service spanning a few decades. Ruthnaswamy was a leading educationist and professor of Indian history and politics, liberal thinker, constitutionalist, politician, parliamentarian, erudite orator, editor, administrator, and author. He was founding Vice President of Swatantra Party and represented the party form Madras State in the Upper House (Rajya Sabha) of the Parliament for two terms. 

Mariadas Ruthnaswamy received school education at St. Anne’s School at Secunderabad in Andhra Pradesh, and matriculated from the St. Joseph’s College at Cuddalore in Madras Presidency (now Tamil Nadu) in 1903. He also completed his undergraduate education at Nizam’s College, Hyderabad in 1907. Thereafter, he went to England to study at Jesus College, at Oxford University and University of Cambridge and completed his History Tripos degree in 1910. At Cambridge University, he was contemporary of Jawaharlal Nehru. Simultaneously, he was enrolled for law at Gray’s Inn, London, and became a barrister in 1910. In 1911, he returned to India and was determined not to practice law despite his father’s pressure.

In 1921, Mariadas Ruthnaswamy was appointed as the first Indian Principal of Pachiyappas College, Madras (now Chennai), which was one of the leading educational institutions in the Madras Presidency. He served as Principal and also Professor for English, History, and Politics till 1927. Later, he was appointed as the first Indian to hold the post of Principal of Madras Law College in 1928 and served up to 1930. Afterward, he became the Vice-Chancellor of Annamalai University at Chidambaram in Madras Presidency from 1942 to 1948. During the period from 1930 to 1942, Mariadas Ruthnaswamy served as Member of Madras Service Commission (now TNPSC) and also chaired the Commission for some time in later years. This Commission was one of the first to be established (1929) in the country among all the Presidencies.

Mariadas Ruthnaswamy’s political career spans more than half a century. He was associated with the Justice Party in Madras since 1919, but after it was dissolved in 1944, he remained independent until he joined the Swatantra Party in 1959, founded by C Rajagopalachari among others. Mariadas Ruthnaswamy was first elected as Councillor in the Corporation of Madras in 1921 and served till 1923. And then, at the age of 40, he became Member of Madras Legislative Council and also President of the Council and served from September 1925 to November 1926. In the Council debates, he was known for his wit and quick repartee. He was a practising liberal constitutionalist, and in 1927, he was nominated as Member of the Central Legislative Assembly. 

Swatantra Party nominated Mariadas Ruthnaswamy as a Member of the Rajya Sabha for two terms: first from 1962 to 1968 and second from 1968 to 1974. His speeches were eloquent and powerfully delivered in the Parliament covered a wide range of subjects lucidly and incisively. In 1968, the Government of India conferred Ruthnaswamy with the Padma Bhushan for his work in Literature and Education in Madras. This was one of the rare occasions when the leader of the opposition (Rajya Sabha) was conferred such an award. He was actively involved in activities of the Parliament and participated in all important discussions and debates as leader of the Swatantra Party.

Mariadas Ruthnaswamy was also a prolific writer, known for his erudition and knowledge of Indian history as well as many other subjects. He contributed articles regularly in the national newspapers like *Sunday Standard, Statesman*, and journals like *Swarajya, The Week,* and local newspapers like *Madras Mail* and *Daily Express,* Madras. He was editor of both English and Tamil journals publications such as *Standard* (1921–1923), the weekly edition of *The Democrat (*1950–1955), daily edition of *Tamil Nadu* (1951–1955) and fortnightly edition of *Thondan* (1972). He had published classical liberal economic ideas in *The Democrat* and journals like Swarajya. He was an extraordinary leader. Ruthnaswamy believed in the principles of constitutional methods and political education for achieving freedom from the British. He was against too much focus on political power and concentrated on economic freedom. 

Mariadas Ruthnaswamy wrote several scholarly books published both in India and England. All in his masterly works, he explained quite vividly his in-depth thinking on the power of ideas, institutional systems, and men of characteristics that shape the institutions’ life and structure in an economy and democracy. His major works include ***[The Political Philosophy of Mr. Gandhi (1922)](https://archive.org/details/in.ernet.dli.2015.47837/page/n9/mode/2up)**, The Political Theory of the Government of India (1928) – this was the first lecture under the liberal Scholar V. Srinivasa Sastri Foundation, at University of Madras, The Revision of the Constitution (1928), **The Making of the States (1932),** Some Influences that made the British Administrative System in India (1939), Essays in Constitution Making (1946), **India from the dawn: new aspects of an old story (1949),** Principles and Practice of Public Administration (1953), What Every Citizen Ought to Know (1957), Everyman’s Constitution of India (1958), Principles and Practice of Foreign Policy (1961), India after God Unknown Binding (1964), Agenda for India (1971), Legislation: Principles and Practice (1974), Violence: Cause and Cure (1969), etc.* Many of these books were written with profound thinking involving comprehensive research of literature and critical examination of emerging theories like socialism, communism, collective farming, and the emergence of the state. 

Even before independence, Ruthnaswamy firmly believed that economic freedom is the foremost lubricant to achieve political and social freedoms paving prosperity and equal opportunities for all. He criticised the freedom struggles movements which had focused mainly on political freedom without much thought about social reforms and economic freedom. In his article *“The Techniques of Social Reforms in India”* to Har Bilas Sarda’s Commemoration Volume published in 1937, Ruthnaswamy noted that *“Economy in the use of energy is the surest means of ensuring success in the political as in every other kind of human effort. To turn from the political fight to work for social reform is to allow oneself to be disturbed by the siren’s call. It is to dissipate one’s energy. It is playing the enemy’s game. Social reform, however excellent at other times, is just now a nuisance. It must, therefore, get out of the way.”*

And therefore, *“if the attainment of political power has not been preceded by education in the social application of the ideas of liberty and equality and progress and in the will and the desire to achieve them, the mere placing of political power in the hands of the people and their representatives in the legislature and the administration will not serve the cause of social reform.”* Clearly, he had warned the dominant leadership in India, which focused merely on political freedom by gimmicking the social reforms and economic freedom to centralise the power structure.

Mariadas Ruthnaswamy was against the ideas of socialism and communism, which enthralled the twentieth century. He criticized Nehruvian socialism, which led the government’s role in commanding heights of the economy. Ruthnaswamy was of the view that *“Measures must be taken to improve the production of the country. This can be done not by attempting to create industries through industrial Ministries and Departments- no free state can create industries- but by establishing circumstances and conditions favourable to the production of wealth. **Security of life and property, improve communications- the road systems of India is woefully defective and much of the money spent on the promotion of industry and agriculture by the state might more profitably be spent on the opening out of new roads and other communications where they are needed – the removal of all obstacles to the freedom of trade and industry within the country**– these things should be attended to by the government if it wants to serve the cause of economic progress.”*

Mariadas Ruthnaswamy believed in decentralised planning for the development and growth of India through devolving both political power and financial power. He was also of the view that the decentralised system of village panchayats of ancient India was destroyed by different regimes, including the British and strangling grip of India’s social customs, which also played a detrimental role. Moreover, he was a *“champion of backward classes and minorities”* in the broad meaning of individual liberty and equality of opportunities for all. 

Throughout his life, Mariadas Ruthnaswamy championed the pivotal role of the principles of liberty, equality, and economic freedom. He was an untiring reader and authored several books wherein the assimilation of his thinking and mastery over the issues of India covering several centuries is truly mesmerizing. He was profoundly active with reading and writing even at the age of 92, days before his death in June 1977. Alas, many of his great works were consciously marginalised by propagandists even after the fact that he was a scholar from the minority community. His own community itself had treated his works as untouchable because he was a distinguished scholar and thinker of classical liberal principles.

Read more: [GK Sundaram: Swatantra’s Forgotten Tamil Leader](https://spontaneousorder.in/gk-sundaram/)

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## SO Musings: Replace the GDP

Original: https://www.spontaneousorder.in/p/so-musing-replace-the-gdp

Author: Spontaneous Order

Published: 2020-04-24T17:41:00.000Z

Topics: gdp-critique, well-being-metrics, economic-measurement, classical-liberalism

> Originally conceived as a measure of national production around the Great Depression and WWII, Gross Domestic Product has turned into the magical single yardstick indicative of a nation’s progress. The discourse on prosperity and poverty across the glob

**Summary:**

Gross Domestic Product (GDP), conceived during the Great Depression and WWII for wartime manufacturing, has become the dominant yardstick for national progress, yet its relevance is questioned in a digitized economy facing ecological threats. Jonathan Rowe's 1996 article 'Replace the GDP,' republished in India's liberal journal Freedom First, critiques GDP for treating all production and sales as inherently good, tallying social ills like car wrecks, divorces, crime, and environmental breakdowns as economic growth since they generate spending. Echoing Adam Smith, Rowe argues that true economic measure is people's well-being, not mere consumption or investment, which GDP monetarily fixates on while ignoring the care economy and environmental quality. This creates a chasm: experts declare prosperity while people feel decline, as seen in contrasts with Nobel laureate Robert Lucas's optimism versus public sentiment, or Alan Greenspan's puzzlement at foreboding. From a classical-liberal view, policymakers' archaic assumptions perpetuate flawed policies; replacing GDP with metrics capturing actual human flourishing is essential to align economics with societal good.

**Key points:**

- GDP counts harmful events like crime, divorces, and disasters as economic gains because they involve spending.
- GDP ignores non-monetary aspects of well-being, such as the care economy and environmental quality.
- Policymakers assume more consumption equals prosperity without verifying impacts on people's lives.
- The classical-liberal tradition, per Adam Smith, prioritizes human well-being over aggregate production metrics.
- Replace GDP to bridge the gap between official statistics and lived experience.

**By Spontaneous Order**

* * *

*Originally conceived as a measure of national production around the Great Depression and WWII, Gross Domestic Product has turned into the magical single yardstick indicative of a nation’s progress. The discourse on prosperity and poverty across the globe in media, political slugfest, think-tanks, and academics revolves around the benchmark of GDP growth. However, as a statistical instrument originally meant to cater to the wartime manufacturing economy, the relevance of GDP has come under doubts in the increasingly digitised economy threatened by ecological collapse.*

*Back in 1996, Jonathan Rowe in his The Washington Monthly article titled “Replace the GDP” pointed to the deficiencies of GDP as a measure for the flourishing of society. GDP’s focus on production, Rowe argued, accounted for the activity as gain which actually caused hardship for people. He also questioned the monetary focus of GDP which ignored the care economy and environmental quality, an essential aspect of human well-being.  
*

*India’s leading liberal journal Freedom First republished Rowe’s article in its April 1996 issue. Produced below is an excerpt.*

Adam Smith said that the final measure of an economy is the well-being of the people. Yet this is the one question that the policy establishment never asks. The government studies the supposed means to that end in exacting detail. It can tell us how many televisions we buy, how much money the drug or record industry invests, practically down to the last penny.

But nobody bothers to ask whether such means actually bring about the desired end. Economists simply assume it, and this assumption is the implicit baseline of just about every policy debate in Washington. More consumption or investment will bring about more well-being, regardless of what that consumption and investment consist and the actual impact on people’s lives.

The result has been a growing chasm between the way the policy establishment measures the economy and the way Americans actually experience it. The experts keep saying the economy is up; Americans experience it as down. Economist Robert Lucas, the Nobel laureate, says the economy is in “excellent shape.” Ask your neighbours about that.

Like the former Soviet rulers, America’s policy establishment dismisses such skepticism of official economics as a sign of the psychological disorder. You are spending more money, folks, they say; what possibly could be troubling you? Alan Greenspan, the Federal Reserve Board chairman, has scratched his head publicly over the ” extraordinarily  deep-rooted foreboding about the (economic) outlook.” Yet just maybe the people are on to something. Until our politicians cast off their archaic assumptions about well-being and what it helps bring about, their efforts to make things better will continue to make them worse.

A good place to start would be the official gauge of economic progress, the Gross Domestic Product. The GDP is accepted as the main measure of economic policy and performance. Yet it is built upon several stunning fallacies.

The first is the assumption that everything produced and sold is a ” good” by definition; more production and buying automatically equal more economic well-being. The result is a Mad Hatter’s accounting system that adds but can’t subtract. Car wrecks, divorces, disease, crime – social and environmental breakdowns of all kinds- get tallied in Washington as economic growth, simply because they cost money.

*The full article could be accessed [here](http://www.freedomfirst.in/uploads/issues/pdf/429.pdf).*    

Read More: [SO Musing: The Tiger Caged – Part II](https://spontaneousorder.in/the-tiger-caged-concluding-installment-from-the-economists-survey-of-india/)

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures, and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century to the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explains the relevance of the writings in today’s context.*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Prescription for a Little Dose of Anarchism

Original: https://www.spontaneousorder.in/p/prescription-for-a-little-dose-of-anarchism

Author: Spontaneous Order

Published: 2020-04-23T15:41:32.000Z

Topics: anarchism, anti-statism, political-philosophy, authoritarianism

> Anarchism is a Casandra among political ideologies. Cassandra was a mortal woman in Greek mythology cursed by Apollo to utter true prophecies, but never to be believed. She foresaw that Helen’s arrival to Troy would bring the city’s destruction in the

**Summary:**

Anarchism, likened to the mythological Cassandra for its unheeded truths, is a noble ideology despising state coercion as unnecessary and evil, contrasting Thomas Paine's 'necessary evil' view. Pioneered by Pierre-Joseph Proudhon in 1840's *What Is Property?*, it posits humans as naturally virtuous and cooperative, fostering social harmony through spontaneous voluntary agreements rather than imposed laws. Influenced by Gandhi, Tolstoy, Thoreau, Bakunin, and Kropotkin, anarcho-pacifism rejects violence, emphasizing non-coercion and mutual aid in self-sufficient communes akin to Gandhian Gram Swaraj. Anarchists briefly controlled parts of Eastern Spain during the Spanish Civil War, establishing workers' and peasants' collectives via direct democracy. Rejecting state legitimacy as conquest-based and pro-rich, anarchism critiques law, government, church alliances, and war as state violence, while upholding individual autonomy and social solidarity. As antithesis to fascism and rising authoritarian populism, it inspired Occupy Wall Street through David Graeber's direct action principles. The author prescribes a 'little dose of anarchism' in discourse to awaken moral instincts of freedom and equality, countering authoritarian Leviathan and crony Mammon.

**Key points:**

- Anarchism rejects all state authority as coercive and evil, advocating spontaneous cooperation and voluntary agreements for social harmony.
- Anarcho-pacifism, drawing from Tolstoy and Gandhi, opposes violence as inconsistent with anti-coercion principles.
- Anarchists briefly governed Catalonia during the Spanish Civil War through workers' collectives and direct democracy.
- A dose of anarchist thought counters authoritarian populism by prioritizing individual autonomy over state hegemony.

**By Faisal CK**

* * *

Anarchism is a Casandra among political ideologies. Cassandra was a mortal woman in [Greek mythology](https://en.wikipedia.org/wiki/Greek_mythology) cursed by Apollo to utter true [prophecies](https://en.wikipedia.org/wiki/Prophecy), but never to be believed. She foresaw that Helen’s arrival to Troy would bring the city’s destruction in the Trojan War, but nobody trusted her. Like Cassandra, Anarchism is much despised despite many of its merits. Its arguments have, like Cassandra’s prophecies, never been given attention and appreciation it deserved. Gandhi was an anarchist, but that fact is often not acknowledged. In common parlance, anarchy implies chaos and disorder. But anarchism as a political ideology is most noble; even if it seems impractical. It was Pierre Joseph Proudhon and his classic *What Is Property?* In 1840 that presented anarchism as systematic political ideology.

Thomas Paine portrayed the state as a necessary evil. But in anarchist perspective, political authority in all its forms, especially state, is both unnecessary and evil. State coercion undermines freedom and equality. Man is naturally virtuous and cooperative, and personal autonomy is the core of human society. Social harmony is born out of spontaneous cooperation, not by state-imposed law.  It is utopian but far better than fascist dystopia where the state reigns supreme. 

Violence has always been controversial in anarchism. Anarcho-pacifism is a tendency within [anarchism](https://en.wikipedia.org/wiki/Anarchism) that rejects the use of force in the struggle for social change, abolition of [existing](https://en.wikipedia.org/wiki/Capitalism) systems and the [state](https://en.wikipedia.org/wiki/State_\(polity\)). While some anarchists embraced violent [propaganda](https://en.wikipedia.org/wiki/Propaganda_of_the_deed) during the nineteenth century, anarcho-pacifists oppose violence. Tolstoy argued that anarchism must be nonviolent since it is, by definition, opposition to coercion and force and that since the state is inherently based on the use of force, meaningful pacifism must be anarchistic. Early anarchist influencers were Henry David Thoreau and Tolstoy, and later Gandhian ideas became prominent. The principle of non-violence appealed to anarchists for two reasons. First, it reflects their respect for human beings as a moral and autonomous creature. Secondly, non-violence, as a political strategy, has been appealing and useful. 

Anarchists never came to power anywhere in the world. The only exception is being during the Spanish Civil War when they briefly controlled parts of Eastern Spain. They set up workers’ and peasants’ collective in Catalonia. They rejected party politics and emphasised spontaneity and popular thirst for freedom. In the anarchical scheme of things, free individuals manage their affairs by voluntary agreement, without compulsion or coercion. Anarchism negates the legitimacy one man or group has to exercise hegemony over others. Anarchism appeals to awake moral instincts of individual autonomy and freedom than to analysing the state oppression and explaining how it can be changed.  

Anarchism radically rejects state power. Pierre Joseph Proudhon underscored the anarchist critique of the state, law and government – *“To be governed is to be watched over, inspected, spied on, directed, legislated, regimented, closed in, indoctrinated, preached at, controlled, assessed, evaluated, censored, commanded; all by creatures that have neither right nor the wisdom nor the virtue.”* 

Anarchism rejects the liberal notion that the state is founded upon the consent of people. It holds that the state is created by conquest, and the law is enforced through coercion. Anarchists rightly expose the pro-rich and anti-poor stance of state. They see war as the culmination of state violence. They underscore the virtue of individual and corrupting nature of the state. 

Anarchism is anti-state; but not anti-social. Social institutions nurture respect, cooperation and spontaneous harmony. Collectivist anarchism emphasises on the human capacity for social solidarity and mutual aid. Humans are social animals, and their proper relationship is that of sympathy, harmony and affection. Russian revolutionary anarchist, Mikhail Bakunin observed that social solidarity is the first human law. Peter Kropotkin envisaged an anarchic society that would consist of a collection of mostly self-sufficient communes, each owing its wealth in common along the lines of medieval guilds, functioning as direct grassroots democracy. Centralisation always results in a depersonalised and bureaucratic social process. This concept is similar to the Gandhian concept of Gram Swaraj. 

On the social front, anarchism is anti-church. Mikhail Bakunin opined that the abolition of the Church and the state must be the first and indispensable condition of the true liberation of society. But it does not mean that anarchism is altogether anti-religious. It opposes religion as an accomplice of state. Modern Anarchists have been attracted to religions like Taoism and Zen Buddhism, which offer philosophical autonomy of individual and uphold the values of toleration, respect and natural harmony. 

Anarchism is the best anti-thesis to fascism. It upholds individual worth and autonomy over the hierarchical hegemony of the state. Authoritarian populism rising in many democracies is the contemporary incarnation of fascism. It is a sinister alter ego of democracy and the embodiment of its inherent risks. Populists gain power through democratic ways; after that, they gradually neutralise the spirit and values of democracy, finally leading to authoritarianism. So, a little dose of anarchism in our socio-political discourse would dilute the lethal density of authoritarian populism.

Occupy Wall Street, a protest [movement](https://en.wikipedia.org/wiki/Social_movement) that began on 17 September 2011, in [New York’](https://en.wikipedia.org/wiki/New_York_City) [Wall Street](https://en.wikipedia.org/wiki/Wall_Street) against [economic inequality](https://en.wikipedia.org/wiki/Economic_inequality), was inspired by anarchist thought. [David Graeber](https://en.wikipedia.org/wiki/David_Graeber), an early organiser of the movement, is a self-proclaimed anarchist. Graeber, writing for *[The Guardian](https://en.wikipedia.org/wiki/The_Guardian)*, has argued that anarchist principles of [direct action](https://en.wikipedia.org/wiki/Direct_action), [direct democracy](https://en.wikipedia.org/wiki/Direct_democracy) and rejection of existing political institutions are the foundations of the Occupy Wall Street [movement](https://en.wikipedia.org/wiki/Political_movement). 

Jawaharlal Nehru wrote in his famed *Glimpses of World History* about Enrico Malatesta, a prominent Italian anarchist – “There is a fine story about Malatesta which I must tell you. He was being prosecuted in a court of law in Italy. The government prosecutor argued that Malatesta’s influence among the workers of the area was great and that it had entirely changed their character. It was putting an end to criminality, and crimes were getting rare. If all crimes stopped, what would the courts do? So, Malatesta ought to be sent to gaol! And to gaol he was sent for six months’’. 

Anarchism maybe not strong enough to purify all those who subscribe to it as in the case of Malatesta. But as a moral appeal and intellectual trait, it would awake the virtues of autonomy, agency and love for freedom and equality among individuals. A little dose of anarchism would be a great solace to the contemporary world which is being haunted by Leviathan of authoritarian populism and Mammon of greedy global cronyism.

Read more: [Uniform Civil Code: From Status to Contract](https://spontaneousorder.in/ucc-status-contract/)

* * *

**About Faisal CK**

Faisal CK is an independent researcher, columnist, and quizzer. He is graduated in law and holds a masters in political science. He is interested in constitutional law, and political philosophy. His articles have been published in The Wire, The Scroll, Live Law and the National Herald besides various Malayalam newspapers and magazines. As quizzer, he received the first prize in the national and SAARC inter-university Youth festivals.

## Should Govt Punish Use and Possession of Cannabis?

Original: https://www.spontaneousorder.in/p/should-govt-punish-use-and-possession-of-cannabis

Author: Spontaneous Order

Published: 2020-04-22T16:43:30.000Z

Topics: cannabis-legalization, victimless-crimes, drug-policy, criminal-justice-reform

> The date on Monday was 4/20, with April 2020 being the month of 4/20; colloquially being referred to as the “Weed Day”/”Weed Month” as 420 is slang for cannabis. While possession and consumption of cannabis in small quantities are common among the

**Summary:**

The post argues from a classical-liberal perspective that governments should not criminalize the possession and use of cannabis, as it constitutes a victimless crime that harms no one but the consumer and is less addictive than alcohol or cigarettes. It highlights admissions of cannabis use by figures like Obama and Indian MP Tathagata Satpathy, noting that small quantities (20-50 grams) can lead to jail time despite minimal harm. During the COVID-19 pandemic, authorities worldwide released prisoners held for minor cannabis possession—often from poor and minority communities like African Americans and Latinos in the US—to decongest overcrowded jails, underscoring the policy's folly. The author compares cannabis to legal vices like sugar, which is highly addictive and harmful yet unregulated in personal use, and alcohol, which has a higher overdose fatality rate but is taxed and quality-controlled without jailing possessors. Quoting Lysander Spooner, it contends that criminalizing one person's 'craving' while allowing another's, when both harm only the self, enables state misuse against the disenfranchised, poor, and minorities. Post-normalcy, such acts should never have been criminalized.

**Key points:**

- Cannabis possession is a victimless crime far less addictive and harmful than alcohol or cigarettes, yet leads to jail for small quantities like 20-50 grams.
- COVID-19 jail decongestion efforts prioritize releasing minor cannabis offenders, who are disproportionately poor and minorities.
- Laws against victimless vices like cannabis enable state overreach against the disenfranchised, unlike tolerated substances such as sugar and alcohol.
- Criminalizing personal cravings that harm no one violates liberty, as per Lysander Spooner.

**By Sourya Banerjee**

* * *

The date on Monday was 4/20, with April 2020 being the month of 4/20; colloquially being referred to as the “Weed Day”/”Weed Month” as 420 is slang for cannabis. While possession and consumption of cannabis in small quantities are common among the youth in almost all countries, with people like former US President Obama, to Indian Member of Parliament Tathagata Satpathy [admitting](https://www.moneycontrol.com/news/trends/current-affairs-trends/tathagata-satpathy-mp-who-spoke-his-heart-on-cannabis-legalisation-decriminalising-section-377-quits-politics-3614371.html) to having smoked cannabis in their college days. 

The possession or consumption of cannabis is a criminal offence in most countries even as it is considered a ‘*victimless crime*‘. A ‘*victimless*‘ crime is a case where a crime is committed in the eyes of the law, but there is no victim. Despite there being no victim, mere possession of some 20-50 grams of weed can, in most jurisdictions, have you sent to jail. Although possession causes no real harm to anyone else (or to you), and statistically, cannabis is far less addictive than alcohol or cigarettes.

Fast forward to today, if we look around the world, as the coronavirus aggressively spreads, authorities all over the world panicking and trying their best to ensure currently over packed jail cells are made emptier to avoid the spread of the virus. And the first “criminals” authorities release are people who were arrested and detained for minor possession of weed and other such ‘*victimless crimes*‘. Such people, in different legal jurisdictions, are almost always heavily from the poor and minority communities (exp, African Americans and Latino in the US) who can’t afford to pay a hefty fine or for expert legal defence.

So the question that we should ponder over once things go back to normal is whether these people should be sent back to jail, or more importantly if such acts should ever have been criminalised and these people sent to jail in the first place?

Let us compare that with sugar, which is also extremely addictive and more harmful, and yet remains a component of our daily diet. Some of us love our sweets and having a sweet tooth, or more serious vices like smoking or drinking, are not crimes. The quality of alcohol is regulated and taxed. Still, you are not jailed for owning or consuming it, even though alcohol poisoning has a much [higher fatality](http://independent.co.uk/news/health/how-much-marijuana-take-to-kill-you-fatal-weed-a8043856.html) rate compared to cannabis overdose.

So in the words of American political philosopher and abolitionist, Lysander Spooner, why should the carving of one individual be a crime when the craving of the other is not when both of those carving harm no one but the consumer. When laws make victimless vices crimes, they are almost always disproportionately used and misused against the disenfranchised, poor, and minorities by the state.

Read more: [Banning Commercial Surrogacy & Lives of Surrogate Mothers](https://spontaneousorder.in/banning-commercial-surrogacy-and-lives-of-surrogate-mothers/)

* * *

**About Sourya Banerjee**

Sourya is the Project Associate for CCS Academy in Hyderabad. A BBA-LLB (Hons.) degree holder, Sourya used to practice law in Hyderabad before joining CCS. Sourya has also worked with numerous non-profits social organizations including Red Elephant Foundation, and Red Dot Foundation and also written on law and policy for online platforms such as LiveLaw, The Logical Indian, Qrius etc. An ex- Students for Liberty Hyderabad Local Coordinator, in his free time, Sourya runs a citizen journalism platform called Arguendo.

## Ease Shutdowns Or We May Get Worst Of Both Worlds

Original: https://www.spontaneousorder.in/p/ease-shutdowns-or-we-may-get-worst-of-both-worlds

Author: Spontaneous Order

Published: 2020-04-20T12:01:06.000Z

Topics: covid-lockdowns, india-economy, economic-recovery, public-health-policy

> Swaminathan S. Anklesaria Aiyar is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 199

**Summary:**

Swaminathan S.A. Aiyar argues that India must rapidly ease COVID-19 shutdowns to revive its economy, warning that prolonged restrictions will deliver the worst of both worlds: economic collapse without containing the virus. Citing Nobel laureate Angus Deaton, he notes poor countries like India lack the administrative and medical capacity for effective social distancing, testing, isolation, and treatment. India's testing is under 20,000 per day, with 0.7 hospital beds per 1,000 people, one doctor per 1,404 patients (below WHO's 1 per 1,000), and 1.7 nurses per 1,000 (below WHO's 3). Even Modi's allocation of 602 hospitals, 100,000 isolation beds, and 12,000 ICU beds is inadequate for 13 million infections if 1% of the population is hit. Social distancing is impossible in slums, migrant worker marches, and crowded markets, while agricultural losses mount. IMF forecasts GDP growth at 1.9% or deeply negative without revival. Aiyar contrasts Sweden's no-shutdown approach, which preserved its economy and achieved middling health outcomes, with global panic from Imperial College models. Past pandemics like 2017-18 flu killed without shutdowns. From a classical-liberal viewpoint, rapid easing averts greater misery than uncertain virus deaths, preferring economic freedom over gradual restrictions.

**Key points:**

- India's weak healthcare infrastructure—0.7 hospital beds/1,000 people, low testing—makes effective lockdowns impossible.
- Prolonged shutdowns risk IMF-predicted deeply negative GDP growth, exacerbating misery beyond virus deaths.
- Rapid easing of restrictions, like Sweden's model, prioritizes economic revival over uncertain prolongation of infections.

**By Swaminathan SA Aiyer**

* * *

*Swaminathan S. Anklesaria Aiyar is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor.*

*This article was originally published on the Times of India website, on 19th April 2020. It can be accessed [here](https://timesofindia.indiatimes.com/blogs/Swaminomics/ease-shutdown-or-we-may-get-worst-of-both-worlds/).*

Forget caution, India should rapidly ease the Covid shutdowns to revive the economy. Otherwise, it may suffer the worst of both worlds — economic collapse without checking the virus. At a Princeton University webinar last week, economics Nobel laureate Angus Deaton did not mention India by name, but he highlighted the danger of poor countries getting the worst of both worlds.

  
Deaton said countries with strong administrations and health systems could enforce social spacing, comprehensive testing, isolation and treatment. This could check the epidemic. But in poor countries with weak administrative and medical capacity, shutdowns would not check the disease. Social distancing was impossible in densely populated urban slums, crowded bazaars and huts where several people slept. Virus testing capacity was weak, so detection, isolation and treatment were highly incomplete, and the disease would spread despite shutdowns.

India is better than African countries, but its administrative capacity is below par. Despite efforts, the rate of testing is less than 20,000 per day, so we have no idea how many people are actually infected. India has 0.7 hospital beds per 1,000 people, one of the lowest ratios in Asia. It has one doctor per 1,404 patients, well below the WHO norm of one per 1,000. It has 1.7 nurses per 1,000 against the WHO norm of 3 per 1,000.

Prime Minister Modi says he has dedicated 602 hospitals, one lakh isolation beds and 12,000 ICU beds to meet the Covid challenge. Many corporations, NGOs, state governments and volunteers are helping out. But if just 1% of India’s population gets infected that means 13 million people. India’s facilities look pathetically inadequate for that.

Enforcing social distancing seems impossible. Massive crowds of migrant workers demand assistance. Community kitchens feed the needy but entail crowding. Bus and train services have been stopped to curb crowding, but millions of migrant workers are marching home in groups, ignoring social distancing. In crowded bazaars and slums, people cannot stay six feet apart for long.

Agricultural mandis are being re-activated for the rabi harvest, but social distancing in mandis is difficult. Farmers growing perishables have lost their entire crop because of curbs on transport.

The IMF predicts India’s GDP growth will drop to 1.9%, as bad as in 1991 when India went bust. If social distancing does not work and the economy fails to revive in the second half of 2020, the IMF says growth will be deeply negative, the worst performance in independent India. This economic disaster will create massive misery that will exacerbate illness and deaths. So, a prolonged shutdown may kill and make more people miserable than it saves.

  
Being hard-headed does not mean being hard-hearted. Some favour a very gradual easing of the shutdown to check the disease. I suspect that would cause more misery than a rapid revival of the economy. The world has experienced many pandemics (SARS, MERS, the 2018 flu epidemic) that died out without requiring economic shutdowns. The flu of 2017-18 caused 80,000 deaths in the US but no shutdown was ordered. In the case of Covid, the Imperial College, London, projected an explosive virus spread that would kill millions unless tackled on a war footing.

This caused panic and shutdowns the world over. Governments didn’t want to be accused of killing people. An exception was socialist Sweden, which encouraged social distancing but avoided any shutdown. Compared with European countries with shutdowns, Sweden’s infection and death rates are middling. It alone has saved its economy while avoiding a medical disaster, and medically outperformed many shutdown countries.

Countries have decreed shutdowns ranging from mild to very stringent (like India’s). These are causing the greatest economic collapse since the Great Depression. But many experts contest the accuracy or even validity of the Imperial College model. A shutdown “flattens the curve” of infections. But that does not guarantee fewer deaths — they may merely be spread over 18 months rather than four. Deaton says deaths attributed to pandemics are exaggerated by “harvesting”: many who die are infirm people who would have died anyway in the next two years. He says this is why mortality rates always plunge the year after a pandemic.

Data is too limited and suspect to prove or disprove the Imperial College model. Maybe the disease is less lethal and fast-spreading than the model predicts. Maybe it is less effective in tropical countries. Nobody really knows its medical outcomes. But we do know its economic outcome will be dreadful.

Risks exist whether we lift the shutdown gradually or fast. Rapid easing will check the economic disaster but may worsen deaths (though this is uncertain). I prefer this to gradual easing that may give India the worst of both worlds.

Read more: [Relief Package is Peanuts, India Needs to Triple it](https://spontaneousorder.in/relief-package-is-peanuts-india-needs-to-triple-it/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## SO Musings: On Civil Liberties and State Coercion

Original: https://www.spontaneousorder.in/p/on-civil-liberties-and-state-coercion

Author: Spontaneous Order

Published: 2020-04-17T17:04:36.000Z

Topics: civil-liberties, preventive-detention, state-coercion, indian-liberals

> The recent arrest of the Ambedkarite scholar and activist Anand Teltumbde has drawn criticism for the misuse of state power to target individuals critical of the ruling party at the Centre. Mr. Teltumbde has been charged under the Unlawful Activities (P..

**Summary:**

The post critiques the recent arrest of Ambedkarite scholar Anand Teltumbde under the Unlawful Activities (Prevention) Act (UAPA) for alleged involvement in the 2018 Bhima Koregaon violence, viewing it as misuse of state power against critics of the ruling party. It draws parallels to the Preventive Detention Act of 1950, introduced by Sardar Patel to detain communist activists threatening the nascent democracy, but preserved and expanded by subsequent governments. Highlighting a 1963 parliamentary speech by liberal Minoo Masani, the post argues the Act was a hasty emergency measure promised to be replaced by principled legislation, yet misused against patriotic democrats like Shyama Prasad Mookerjee, Sheikh Abdullah, Tara Singh, and Ram Manohar Lohia. Masani condemns it as devious, arbitrary, habit-forming, and divisive, endangering every citizen's liberties while failing to target subversion effectively. From a classical-liberal standpoint, such laws grant unaccountable state coercion; Masani urges letting the Act lapse and enacting targeted bans on parties posing a 'clear and present danger' to democracy, as in the US Supreme Court test or West Germany's constitutional outlawing of the Communist Party. The conclusion emphasizes preserving free discussion and exchange of ideas for truth to prevail, rejecting perpetual emergency powers.

**Key points:**

- The Preventive Detention Act of 1950, meant to counter communist threats, was misused to detain democratic leaders like Shyama Prasad Mookerjee and Ram Manohar Lohia.
- Minoo Masani opposed its 1963 extension, calling it a devious, arbitrary, and habit-forming measure that endangers individual liberties.
- Masani advocated replacing it with principled laws applying a 'clear and present danger' test to outlaw subversive parties, citing US and West German models.
- UAPA represents a modern equivalent, granting unaccountable government power and curtailing civil liberties under national security pretexts.

**By Spontaneous Order**

* * *

*The recent arrest of the Ambedkarite scholar and activist Anand Teltumbde has [drawn criticism](https://www.aljazeera.com/news/2020/04/india-arrests-activist-anand-teltumbde-2018-dalit-event-200414112452191.html) for the misuse of state power to target individuals critical of the ruling party at the Centre. Mr. Teltumbde has been charged under the Unlawful Activities (Prevention) Act for his alleged involvement in the Bhima Koregaon violence in 2018. Civil liberty activists see UAPA as a [detriment](https://caravanmagazine.in/law/the-uapa-amendment-treats-indians-as-subjects-of-a-colonial-sovereign) to the human rights of citizens, for it gives unaccountable power to the government. UAPA, however, is by no means the only legislation that curtails civil liberties in the name of national security and maintenance of order. The Preventive Detention Act, 1950 is yet another piece of legislation that allows the state to arrest people on grounds of suspicion. The law was introduced by Sardar Patel to prevent the communist activists from fomenting revolution in India at the expense of the nascent democratic setup.*

*The law has been subsequently preserved by the governments that came to power. In a 1963 speech, liberal lawyer and politician Minoo Masani opposed the law on grounds of political misuse and curtailment of personal liberties. While recognising the communist threat to democracy, he also pointed out the threat to liberty that emanates from the law. The examples were the arrest of politicians working well within the democratic framework, including Shyama Prasad Mukherjee, Sheikh Abdullah, Tara Singh, and Ram Manohar Lohia. Masani also deplored the tendency of the government to cling to the law, instead of allowing it to expire.*

*Produced below is his full speech on preventive detention.* 

Let me say this that in so far as the maintenance of the climate of free discussion in this country is concerned, I would like to say that the Government and the Prime Minister who leads it have also played their part in maintaining this climate, in permitting freedom of discussion, which Governments in neighbouring countries have denied to their people. I would like to pay this tribute to the Prime Minister and the Government of India for having participated in this healthy democratic process. Why do I say so? This is very important. I think it is terribly important that whatever mistakes may be made, however frivolous and wrong Government policies may be, so long as there is freedom of discussion, so long as views can be expressed which are in complete defiance of the views of the Government, there is hope for the country, because it is only through exchange of ideas, clash of ideas, that the truth can be arrived at. This was said by a great revolutionary, Paine, many many years ago, when he said: “When opinions are free, either in matters of government or religion, truth will finally prevail.”

There are exceptions; there are blots on this record. I could have mentioned the arrest of three young patriotic young men in Delhi. I could have mentioned the long detention of George Fernandes, which has come to an end, I am glad to say. I could refer to the arrest of Mr. Maurya only the other day. But these, taken in perspective, are small blots. By and large, I would say that the Rules under the Emergency have been fairly and reasonably implemented.   

It is particularly because I am proud of this record that I object to this Act, because this is one of the things about which we in India cannot be proud.

Let us consider the origins of this Act. Those origins were on Saturday, 25th February 1950. I remember the scene in this House, Sardar Vallabhbhai Patel, that great Deputy Prime Minister, whose absence all of us miss so much today, came and reported on that day that if this Bill was not passed by the same evening, 350 of the most dangerous communist detenus would be released by the Calcutta High Court on Monday morning. In a way, it was an outrageous demand to make of the House. But he gave a reason and that reason was that there was a clear and present danger to the security of the country. It was this that persuaded the House and many of us to vote for that measure.

I was then a back-bench Congress member and I voiced my concern and disquiet. I called the Bill a “hasty improvisation” which should be replaced at the earliest possible moment by “a more principled, well-conceived and well-thought outmeasure, which does not shirk the issue, which goes to the root of the mischief and which frankly takes its stand for the defence of democracy against totalitarian aggression from within or without.”

Sardar Patel’s reply was apologetic. He said he had passed two sleepless nights. He said in reply to my criticism – I am quoting him from the record –

“As has been pointed out by my friend, Shri Masani, the Bill has been brought in to meet an emergency. It requires to be closely examined, whether a better substitute of a more or less permanent nature based on scientific principles can be brought in or not.”

That pledge was given. We have been waiting for ten years for that promise to be carried out. Unfortunately, it has not been done, and this is becoming a permanent blot on our statute book. 

Sir, as we have just learnt from the Home Minister, the Bill is not being used for the purpose for which it was originally passed. It is being used to deal with patriotic Indians who have nothing to do with the Communist Party. Let me mention a few of the names of those who have been detained under this Act, distinguished citizens of our country -Dr. Shyama Prasad Mookerjee, Master Tara Singh, Sheikh Mohammed Abdullah, Shri Nath Pai, Shri Trivedi, my neighbour who is not here at the moment, and Dr. Ram Manohar Lohia. So, from one specific purpose for which this Bill was introduced, we have gone on to arresting normal, patriotic Indians under this measure, and the result is that the individual liberties of every Indian are now endangered by this measure.

Even the much hated and vilified Rowlatt Act of 1919 made Preventive detention contingent upon a declaration of emergency on the part of the Government. Let me read the Act:

“If the Governor-General is satisfied that, in the whole or any part of British India, anarchial or revolutionary movements are being promoted, and that scheduled offences in connection with such movements are prevalent to such an extent that it is expedient in the interests of public safety, he may by notification in the Gazette of India, make a declaration to that effect …”

Look at the conditions referred to in that Act and you find a measure of liberalism, as compared to the Preventive Detention Act which we are asked to extend.

Now, I will be asked by the Minister what I have to say to meet this problem. I would refer him back to the origins of this Bill and the reasons given by his honourable predecessor. This Bill was a Bill meant to meet and combat the subversion and disruption of the Communists. Either it should perform that function or it should not function at all. Let the Act lapse and let the Minister and the Government bring forward concrete proposals, if they so desire, to face or deal with the activities of the Communist Party of India, for which this Bill was originally intended. Now, as a liberal democrat, I believe that such a measure should be resorted to, the outlawing of a political party, or banning a political party, only when there is a clear and present danger; not otherwise. The reason for it is this, that while, on the one side, the enemies of democracy like the Fascists and Communists, should not be allowed to destroy democracy by utilising it with their tongues in their cheek, on the other hand, it should not be resorted to in a way which is arbitrary, which will result in the negation of democracy. We have to balance between the security of a free democracy from attacks from the Communists and Fascists on the one hand, and on the other, we have to see that this does not become a bad habit which can be extended to others. Therefore, I say that the test must be that of the clear and present danger, as laid down by the Supreme Court of the United States.

Other States and other democracies have resorted to this principled way for dealing with subversion. West Germany, one of the leading countries of the world, has by Article 22 0f the Constitution laid down -I would like the Hon. Minister to study this:-

“Parties which, by reason of their aims or the behaviour of their adherents, seek to impair or destroy the free democratic basic order or to endanger the existence of the Federal Republic of Germany are unconstitutional. The Federal Constitutional Court shall decide on the question of unconstitutionality.”

Under this Article of the Constitution, a Bill was passed in the German Parliament, by which the Communist Party of Germany was outlawed and the case went to the Supreme Court. The Communist Party was heard and, after hearing the Communist Party, the Supreme Court of West Germany held that the Communist Party was outlawed properly under the Constitution.

The fact remains that today this Preventive Detention Act suffers from three major defects – three major evils. The first is that it is devious and arbitrary. It is not a straight-forward measure to deal with a straight-forward threat. It endangers the liberty of every decent democratic Indian, because a few people have to be dealt with. That is wrong. The Bill should be made to apply to categories of people described properly by their ideas or by their activities. It is devious. Therefore, it can be arbitrarily used.

Secondly, it is a bad precedent. When a man falls ill, he resorts to a drug. Many times, we know, the man does not have the capacity to throw off the drug, and the drug becomes a habit-forming tranquilliser or sedative. They become habit-forming. Ultimately, the man becomes so paralysed in his will that he feels he cannot go on without the drug. Now, this Preventive Detention Act has become a habit-forming drug to our present Government. I am sure they do not need it. I am sure they can maintain India on an even keel without this wretched Act. But they become like a man on crutches who does not dare to stand on his own legs at his command. So, like a cripple, they hobble along on this arbitrary measure contrary to the spirit of the law. This is the second reason why I oppose this Bill and my Party opposes this Bill.

Thirdly, this unfortunate measure prevents democrats from working together on an issue like this and it drive them, as it does today, into the opposite camps. I am sure the Home Minister will not deny the fact that the Praja Socialist Party or my Party or the Jan Sangh are as democratic in their processes and mentality as his own Party and yet we find ourselves today, unfortunately, on opposite sides. It also gives an opportunity to those who do not believe in freedom to masquerade as enemies of this Act and to criticise it with impunity. This is the contribution that this Act has made to confusing the minds of the people and to confusing the debate. It could have been a straight debate between democrats on one side and the believers in totalitarianism, like the Communist Party, on the other.  

*The original text of the speech could be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=590973500.pdf)*.

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [SO Musing: India, the Tiger Caged](https://spontaneousorder.in/so-musing-india-the-tiger-caged/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Panchayat: Less Swaraj, More Raj

Original: https://www.spontaneousorder.in/p/panchayat-less-swaraj-more-raj

Author: Spontaneous Order

Published: 2020-04-16T13:35:34.000Z

Topics: local-governance, panchayats, welfare-schemes, population-control

> Set in the backdrop of Phulera, a nondescript village in Ballia, Uttar Pradesh, Panchayat is a sharp commentary on the functioning of local governance in India. The storyline follows the travails of Abhishek Mishra, a frustrated lower-middle-class Delhi..

**Summary:**

Through the lens of the TV show Panchayat, set in a Uttar Pradesh village where 30% live in poverty, Sanjeet Kashyap critiques India's local governance as inefficient, corrupt, and paternalistic, imposing democratic structures on traditional societies without accountability. The series depicts MGNREGA failures like dry ponds and misplaced solar lights from MPLADS funds, echoing a 2009 NCAER-PIF report on poor asset quality, leakages, and labor market distortions; Kashyap advocates direct cash transfers per Bhagwati and Panagariya to enable productive private activity and fiscal consolidation. Corruption thrives as panchayat leaders install public assets for private gain, underscoring the need for genuine power devolution alongside active civic participation beyond quinquennial elections. State paternalism in family planning, via shaming slogans, ignores evidence linking fertility decline to women's education, labor participation, and economic growth, favoring empowerment and job creation instead. Gendered power dynamics reveal proxy rule by 'Mukhiya Patis' despite women's reservations, while hierarchy and arrogance perpetuate a 'two-track democracy.' Though the show ends with a bureaucratic savior trope, Kashyap insists individual fixes cannot substitute for systemic classical-liberal reforms reducing state overreach.

**Key points:**

- Replace MGNREGA with direct cash transfers to curb leakages, improve labor markets, and enable private productivity.
- Promote genuine devolution of power to panchayats coupled with active civic participation to combat corruption beyond mere elections.
- Shift population control from shaming campaigns to policies boosting women's empowerment, education, and economic growth.
- Address proxy representation by husbands in women's reserved panchayat seats to realize true local self-governance.

**By Sanjeet Kashyap**

* * *

Set in the backdrop of Phulera, a nondescript village in Ballia, Uttar Pradesh, *Panchayat* is a sharp commentary on the functioning of local governance in India. The storyline follows the travails of Abhishek Mishra, a frustrated lower-middle-class Delhite who reluctantly joins the village as the Panchayat Secretary, while aspiring for landing admission in the MBA program. In contrast to the cliched Bollywood productions, *Panchayat* presents a fairly accurate portrait of a remote Hindi-belt village, with all its quirks and problems. Hailing from the neighboring state of Bihar, the author couldn’t help but note the attention to details that make the show authentic.

The authenticity of *Panchayat* is, in no way, limited to the location setup, dialogues, and mannerism of characters. *Panchayat*’s plot also captures the sociological dynamic and the functioning of the state apparatus at the village level. With around 30 percent of the population living in [poverty](http://documents.worldbank.org/curated/en/187721467995647501/Uttar-pradesh-Poverty-growth-and-inequality), the state of Uttar Pradesh presents a tough governance challenge for the policy-makers. With its low level of urbanization and modernization, traditional values and social arrangements prevail and regulate the village life. However, the imposition of a democratic polity over the traditional village setup has produced its own [peculiar arrangement](https://www.telegraphindia.com/opinion/book-review-in-and-out-of-time/cid/940032). The everyday interaction of citizens with the state at the ground level is one notable aspect of this dynamic. With its focus on local self-governance, *Panchayat* reveals the glaring shortcomings of the Indian state in tackling the challenges of destitution in all the *Phuleras* of the Hindi belt.

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In fact, the so commonplace inefficiency of welfare schemes is visible in the very first tour of the outsider Secretary to the village. The village pond, presumably dug up under the MGNREGA scheme, is supposed to meet the needs of villagers. However, in the searing heat so characteristic of the northern plain, the pond lies devoid of water. This, however, doesn’t stop the *de facto* village headman from an open declaration of his intention to leverage the pond for the next electoral campaign. In another characteristic display of hubris that characterizes the governance in India, the panchayat decides to install the solar light, bought from the MPLADS fund, *outside* the village premise. While the stated reason for the decision won’t be revealed to avoid spoilers, the political imperative of gathering votes by wasteful use of taxpayer-funded schemes is all too clear here as well. Sadly for us, the wastage of funds in terms of unviable asset creation is an endemic feature of schemes like MGNREGA. 

A 2009 NCAER-PIF [report](http://www.indiaenvironmentportal.org.in/files/NCAER-PIFStudyNREGA.pdf), for instance, outlines the poor quality of assets generated under the MGNREGA: 

“A lot of money was spent on digging ponds without conceptualizing factors like catchment area, sources of recharging, technical sanctions, and preparation of detailed estimates. Assets created in Karnataka were not according to specification and quantities executed were not as per the technical sanction.” 

Additionally, MGNREGA is also plagued by leakages and creates distortion in the labor market. The issue of addressing the twin goals of asset creation and poverty reduction, however, remains a pertinent challenge. In this regard, direct cash transfer to the poor has been suggested as an alternative mechanism. Economists Jagdish Bhagwati and Arvind Panagariya have [argued](https://harpercollins.co.in/product/indias-tryst-with-destiny/) that it would free the labor to engage in other private productive activity; curb usurpation of funds by bureaucrats and politicians; enable the proper functioning of the rural labor market; help consolidate the fiscal status.

In another instance of malfeasance in the Panchayat, the public representatives, the headmen and the ward members, consensually decide to install solar lights in front of their own houses. The use of public office for private gain, in simple terms, amounts to corruption. In a federal polity, the logic of devolving power to the local level is clear in terms of dispersed knowledge in society and efficiency gain contingent upon local participation. However, the challenge of ensuring accountability couldn’t be sufficiently addressed only by a periodic plebiscite every five years. Apart from the more genuine devolution of power from the state capitals to village panchayats, what is needed is also active civic participation in the decision-making process. Achieving such attitudinal change won’t be as challenging as it seems, given the long history of social movements and protest mobilizations in the Indian republic.

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It is not just the corruption in public office that turns the Indian state into the everyday villain for its people. The overstretched state, both inefficient and absent at the same time, also seeks to play the role of a moral reformer for the society. Perhaps, no single program illustrates the state paternalism better than the family planning scheme. The horrors of the coercive sterilization drive during the Emergency years showed the brutal state power in action. The brutality now has been replaced by a more nudge-like approach. Now, the scheme entails awareness programs in which funds are spent on deploying public buildings as the avenue to lecture the citizens on the virtue of having only *2 bachhe*. In *Panchayat*, the awareness campaign creates quite a stir, courtesy an inane slogan. A quintessential product of the fertile bureaucratic imagination, the slogan seeks to shame people into having fewer children. Instead, the Phulera residents take offense at the bureaucratic affront to their dignity and remind the headmen of their ability to unseat him from the power.          

In taking a planned top-down view, the politics of population control in India ignores the crucial insight from Development economics. [Researches](https://ourworldindata.org/fertility-rate#what-explains-the-change-in-the-number-of-children-women-have) have shown that the decline in fertility rate is associated with the level of economic development (women education, women labor force participation, economic growth, etc) in a country. Therefore, a better population control strategy would be the adoption of policies that empower women and create enough good jobs in the economy. Shaming people into producing fewer children doesn’t exactly amount to sound public policy. Rather, the provision of public goods and fostering of an entrepreneurial economy would automatically lead to people having fewer children along with improved living standards.

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The quirks of *Panchayat* aren’t just limited to public policy but also covers the hullabaloo of everyday politics as practiced in the cow belt. In a democratic setup, politicians are seen as representatives of the electorate and derive legitimacy from meeting their aspirations. But, in practice, the power that comes with the elected office often tends to breed arrogance and corruption. As a result, argues Princeton economist Atul Kohli, Indian polity has come to resemble a ‘[two-track democracy](https://www.hurstpublishers.com/book/the-malevolent-republic/)’ where common people are only needed at the time of elections while politicians run the show in collusion with special interest groups. In *Panchayat*, the arrogance bred by power mixes with a deep-seated sensibility of hierarchy, bolstered by the  discourse shaped by a small coterie colloquially known as the *chamchas*. The prop here is a seemingly harmless rolling chair which comes to reveal the steadfast adherence to hierarchy in government offices. As the Village Secretary brings to himself the comfort of a new rolling chair in the otherwise nondescript office, *Pradhan jee* takes it as an affront to his power in the office, manifested in the now inferior chair of his. The power balance over the chair gets restored by the end of the episode, but not without raising pressing questions on the absurdity of hierarchy in government offices. 

The perverted functioning of power also has a gendered dimension which has been captured by the show. In a bid to enable women’s representation in rural self- governance institutions, the Indian state has made the provision for [reservation of seats](https://pib.gov.in/newsite/PrintRelease.aspx?relid=74501) for women in panchayats. In a comical twist, it has led to the creation of a new post of so-called MPs at the village level. The *[Mukhiya Pati](https://indianexpress.com/article/india/india-others/end-sarpanch-pati-culture-in-panchayats-pm-narendra-modi/)* phenomenon is so entrenched in the cow belt that even a [World Bank report](http://documents.worldbank.org/curated/en/440041468050346800/text/SR510v10P132170inal0RWSS0LIS0april.txt) took note of it. In Phulera, Brij Bhushan is the *de facto* headmen while his wife, the elected headmen, limits herself to the boundaries of homemaking. Even though *Panchaya*t never comes out as a moral sermon on everything that is wrong with rural India, it attempts to redeem the village in a heroic attempt. Towards the climax of the series, the actual *Pradhan* Manju Devi steps out of the Bhushan household to honor her commitment as an elected representative. And, it is here that the show falters. Ironically for the show that reveals state failures in the cow belt hinterland, it ultimately succumbs to the bureaucratic savior complex. For the *untutored citizens* of Phulera, it takes a surprise visit from a strict District Magistrate to set things in order. While the heroic deeds of [individual bureaucrats](https://www.thebetterindia.com/208000/ias-hero-uttar-pradesh-best-of-2019-initiatives-india-scheme-changemaker/) indeed sometimes bring the change, it is no compensation for the systematic failure that the Indian state is. Ensconced in their privileged cocoon looking down upon and humiliating the disadvantaged, bureaucrats often tend to be part of the problem, not the solution.

  
A fine work of storytelling that *Panchayat* is, it also accurately captures the social dynamic of the surroundings that it is set in. Watch the show for its gripping storytelling and realistic depiction of rural India.

Read more: [Uncertain Lives: How Street Vendors Earn, Spend and Borrow- Part 1](https://spontaneousorder.in/uncertain-lives-how-street-vendors-earn-spend-and-borrow-part-1/)

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## Are Private Schools Enemies of Quality Education in Delhi?

Original: https://www.spontaneousorder.in/p/private-schools-enemies-of-quality-education-in-delhi

Author: Spontaneous Order

Published: 2020-04-14T18:31:00.000Z

Topics: education, private-schools, school-regulation, delhi-education

> One of the most significant contributions of the Government of National Capital Territory (GoNCT) to the national discourse has been pushing education as an electoral issue. It has achieved this feat by pitting government schools against private schools..

**Summary:**

The Government of National Capital Territory (GoNCT) has framed education as an electoral issue by pitting government schools against private schools, a baseless and dangerous narrative that undermines quality education for all, argues the author from a classical-liberal viewpoint. While 2017-2018 CBSE data shows Delhi government schools slightly outperforming private schools in Class XII pass percentage (90.64% vs. 89.38%), private schools led in Class X (89.45% vs. 68.9%); however, pass percentages poorly reflect learning outcomes. Critically, government per-child expenditure reached Rs 66,038 in 2018-2019, up 122.79% since 2013, double the median private school fee of Rs 31,625. Private schools deliver comparable results despite a hostile regulatory environment, including entry barriers like Essentiality Certificates requiring proof of 'real need' without affecting nearby schools, plus discretionary powers over fees, inspections, and even school takeovers under the Delhi School Education Act 1973. This uneven playing field persists as parents increasingly choose private schools. The author urges focusing on government's duty to regulate fairly rather than compete, rejecting the 'us vs. them' discourse since all children are ultimately 'private'—not government's.

**Key points:**

- Delhi government schools' per-child spending is double private school fees yet yields comparable outcomes.
- Private schools face high entry barriers like Essentiality Certificates and discretionary state powers over operations.
- Pass percentages mislead as performance indicators; true value lies in private schools' cost-efficiency despite regulations.
- Government must prioritize fair regulation over antagonistic rhetoric to enable quality education for all.

**By Tarini Sudhakar**

* * *

One of the most significant contributions of the Government of National Capital Territory (GoNCT) to the national discourse has been pushing education as an electoral issue. It has achieved this feat by pitting government schools against private schools. We argue that this positioning is not only baseless but also dangerous to the larger goal of providing quality education for all. 

To be clear, this article is not a critique of the AAP government or its policies. Instead, we try to understand what the data on education does and does not tell us and examine the overall regulatory framework for private schools in Delhi. 

In the run-up to the Delhi elections, there was much discussion around the performance of Delhi government schools vis-a-vis private schools. Delhi government schools apparently “[outperformed](https://www.hindustantimes.com/education/delhi-government-schools-outperform-private-schools-in-academics/story-yDcSrRyaKcg1IKycdZ8jON.html)” private schools. As per the data available on the website of the Directorate of Education in Delhi, CBSE pass percentage for class XII in Delhi government schools and private schools for 2017-2018 was 90.64 and 89.38 respectively. Moreover, CBSE pass percentage for class X in Delhi government schools and private schools for 2017-2018 was 68.9 and 89.45 respectively.

Pass percentages are a problematic indicator of superior performance because they do not reflect actual learning outcomes. But even if government schools did outperform private schools in this aspect, was it value for money? 

As per the Economic Survey of Delhi (2019), per-child expenditure for government schools increased by 122.79% from 2013 to 2019 and was Rs 66,038 for 2018-2019. For the same academic year, we estimated median fee levels for private schools in Delhi as Rs 31, 625 based on a 10% cap on fee hikes for private schools (using Kingdon’s NSSO analysis, 2017). Government’s per-child expenditure is double that of private school fees. Therefore, while outcomes for both types of schools might be on par, they are delivered at widely different costs. 

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Moreover, private schools in Delhi (and across India) operate in a regulatory environment riddled with obstacles. For instance, schools face substantial entry barriers in the form of restrictive ownership structures and input-centric norms for obtaining recognition. In Delhi, private schools have to obtain three certifications: Essentiality Certificate, approval for Scheme of Management and Certificate of Recognition (Centre for Civil Society [2019](https://ccs.in/sites/default/files/Anatomy-of-K-12-Governance-in-India.pdf)). 

What determines essentiality for a school is not clear. Instead, an order passed in 2000 requires district authorities to “specifically state whether or not the school serves a **real need of the locality** and also whether or not it is **likely to affect adversely the enrolment** in a nearby school which has already been recognized by the appropriate authority.” 

State Department functionaries also have the power to exercise discretion at other different regulatory touch-points such as fee regulation, inspections, and management of schools. Under Delhi School Education Act 1973,  an Administrator can take over the management of any school if they are satisfied that any school has “neglected to perform any of the duties imposed on it by or under this Act or any rule made thereunder and that it is expedient in the interests of school education.”

Such an uncertain regulatory environment is not conducive for private school operations, yet they continue to deliver results on par with those of government schools. This becomes a critical issue to resolve as parents are increasingly migrating to private schools in Delhi (Economic Survey 2019). But the GoNCT, since assuming reins, has created an “us” versus “them” discourse. The discussion is often around ‘sarkari bacche’ and ‘private bacche’. But in fact, as one of our friends said, *sarkar ke bacche to hote hi nahi hai, sabhi bacche private hote hain* (there are no children of the government, all children are private). 

What we should be discussing is the role of the government in education. While the primary responsibility of the government is to provide access to education for all children, we often neglect to check its responsibility to regulate education well. Private schools operate on an uneven playing field as the government regulates all schools and operates its own schools. We need to interpret private school performance with the knowledge that they function with one hand tied behind their backs.

Read more: [Should Schools Waive Fees During Lockdown?](https://spontaneousorder.in/should-schools-waive-fees-during-lockdown/)

* * *

**About Tarini Sudhakar**

Tarini studied History at Lady Shri Ram College for Women. She is a former Research Associate of the Centre for Civil Society.

## Should Schools Waive Fees During Lockdown?

Original: https://www.spontaneousorder.in/p/should-schools-waive-fees-during-lockdown

Author: Spontaneous Order

Published: 2020-04-14T18:15:29.000Z

Topics: education-policy, private-schools, school-vouchers, covid-lockdown

> Recently, the Noida administration ordered that no educational institution across the region can force parents of any student to pay the fee or stop any student from attending online classes during the ongoing nationwide lockdown. The Haryana government..

**Summary:**

Governments in Noida and Haryana have ordered schools to waive fees during the COVID-19 lockdown, preventing them from denying online classes to non-paying students, amid parental demands and political pressure. This threatens the survival of over five lakh budget private schools serving crores of poor and middle-class students, and the livelihoods of two crore teachers and staff, as most lack savings due to reinvesting surpluses under profit restrictions. Forcing schools to provide free services overlooks their operational needs, potentially leading to shutdowns. The Directorate of Education seeks balanced suggestions. From a classical-liberal viewpoint, the solution lies in Direct Benefit Transfers (DBT) via vouchers: governments provide limited fee amounts directly to parents for payment to schools, which redeem them for reimbursement. This empowers parental choice, sustains schools to pay salaries, and avoids coercive mandates. The National Independent Schools Alliance (NISA) has urged the Prime Minister, Finance Minister, and HRD Minister to avoid fee waiver orders for three months and release long-pending EWS reimbursements. Policy must consider all stakeholders to prevent unintended harm to education continuity.

**Key points:**

- Government fee waiver mandates in Noida and Haryana endanger two crore livelihoods in five lakh budget private schools lacking reserves.
- Direct Benefit Transfer vouchers to parents for school fees, redeemable by schools from government, balance parental relief with school sustainability.
- NISA demands no fee waiver orders for three months and immediate release of pending EWS reimbursements.
- Forcing free services on private schools is impractical; DBT empowers choice without coercion.

**By Swati Singh**

* * *

Recently, the [Noida administration](https://www.msn.com/en-in/news/newsindia/noida-district-magistrate-asks-schools-colleges-to-waive-off-fees-during-lockdown-warns-of-strict-action/ar-BB12bkqc?li=AAgges1) ordered that no educational institution across the region can force parents of any student to pay the fee or stop any student from attending online classes during the ongoing nationwide lockdown. The Haryana government has also [ordered](https://news.careers360.com/covid-lockdown-parents-worry-over-school-fee-authorities-yet-act) that all fee collection activities should be suspended by schools till the lockdown is over.

Schools are doing their best to maintain a ‘continuity of education’ via modern technologies while parents expect the state governments to waive fees. This raises a serious question about the livelihood of the two-crore people working in budget private schools. Parents are reaching out to the Directorate of Education, state governments and anyone who can help waive their financial obligations.

The Directorate of Education does not have a solution and is [currently seeking suggestions](https://timesofindia.indiatimes.com/home/education/news/covid-19-parents-want-fee-waiver-during-lockdown-schools-cite-concerns-over-payment-of-salaries/articleshow/75005682.cms) from anyone who has them: “The government has actively worked for parents as far as the matters about fees have been concerned but right now is a tricky situation. If anybody has concrete suggestions about a balanced way out of the situation, we request to share it with us”, a senior DoE official [told the Press Trust of India](https://www.edexlive.com/news/2020/apr/06/covid-19-parents-complain-about-demand-of-school-fees-admin-worried-about-paying-salaries-11130.html).

A severe economic crisis is having a tete-a-tete with budget private schools. There are more than five lakh budget private schools in the country providing quality education to crores of poor and middle-class students. With the [parents](https://timesofindia.indiatimes.com/home/education/news/covid-19-parents-want-fee-waiver-during-lockdown-schools-cite-concerns-over-payment-of-salaries/articleshow/75005682.cms) and certain social and [political groups](https://www.indiatoday.in/india/story/covid-19-lockdown-up-congress-demands-fee-waiver-for-all-school-students-in-state-1661130-2020-03-30) demanding fee waivers, budget private schools are in a pickle. They do not know how they will manage to pay salaries to their teaching and non-teaching staff. Apart from a few big private schools, most schools don’t have a big pot of savings to help them stay afloat for the next few months. Particularly as profit-making is barred in school education, so schools keep reinvesting their surplus and do not save for the rainy days. If the fee is waived, some of these schools might have to shut down entirely.

The government might come off as a knight in shining armour for the parents by mandating private schools do not ask for fees. However, the governments are overlooking the needs of the school administration and risking the livelihoods of teachers and school staff. No doubt, this is a tricky situation, but the solution cannot be forcing people to provide services for free.

Direct Benefit Transfers (DBT) have recently been brought into practice by the Indian government to transfer the benefits of the [Economic Relief Package](https://www.indiatoday.in/business/story/finance-minister-nirmala-sitharaman-live-updates-economic-relief-package-india-coronavirus-1659912-2020-03-26) to the beneficiaries. DBT means that instead of giving a subsidy, the government gives money directly to the people. This empowers the people to make an informed choice. In the case of education, instead of providing fee waivers and putting the schools in a difficult spot, the government could directly give a voucher for a limited amount of fee to the parents, who can then use it to pay the fees. The schools can bring these vouchers to the government and get reimbursement. This would enable the schools to pay their staff, and the parents won’t have to worry about their children’s future in this challenging situation.

The largest congregation of budget private schools, [the National Independent Schools Alliance](http://nisaindia.org/) (NISA), has recently written a letter to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman and Human Resource Development Minister Ramesh Pokhriyal Nishank and sought relief for budget private schools. In the letter, NISA has urged the government not to issue any orders on the school fee waiver for the next three months and has also requested an immediate release of the reimbursement amount of EWS (Economically Weaker Section) students pending for many years.

COVID-19 has taken the world by a storm and halted the global economy like never before. Policy decisions must be taken with a lot of thought and care. One wrong step could affect crores of people, and school fee waiver in such a situation is not a practical solution. It’s important to take all stakeholders into account while making such a significant policy decision. 

Read more: [Are private schools better?](https://spontaneousorder.in/are-private-schools-better/)

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## Trilemma of the Ecodemic

Original: https://www.spontaneousorder.in/p/trilemma-of-the-ecodemic

Author: Spontaneous Order

Published: 2020-04-13T13:06:40.000Z

Topics: covid-19, decentralization, free-markets, civil-society

> The war against the most severe health emergency in more than 100 years involves three parallel battles – the ones against the Covid-19 pandemic, the infodemic and what I call “ecodemic”. The third term represents the impact the first two have on th

**Summary:**

The Covid-19 crisis presents a trilemma of pandemic, infodemic, and 'ecodemic'—the economic fallout from the first two—dictated by epidemiologists in a lives-versus-livelihoods war favoring the former amid social media panic that slows policymakers, frightens businesses, and shakes society. These interdependent challenges demand simultaneous resolution through decentralizing control from central government to city levels for swift, quality responses, as seen in recent hotspot sealings in Uttar Pradesh, Delhi, and Madhya Pradesh, but districts are inadequate units given urban density. While containing outbreaks via quarantine (originating in 1377 Venice), governments must free domestic supply chains, enable safe worker transit via railways, and let markets determine essential sectors rather than command-and-control classifications, preventing bankruptcies cascading from small businesses. Post-Covid, markets will innovate safety protocols like temperature checks and sanitation units, accepting higher costs in an 18-month marathon, not a 40-day sprint. Civil society must collaborate actively, enabled by 100% tax deductions for non-profits. India's $24 billion relief pales against the US's $2 trillion package—mere bandaids—while lockdowns break contracts, risking massive NPAs globally; thus, restore liquidity, uphold contracts, and foster government-business-civil society-global cooperation from a classical-liberal lens prioritizing freedom and markets over diktats.

**Key points:**

- Delegate pandemic response authority to city-level administration for faster containment in urban hotspots.
- Free businesses to operate supply chains with safety protocols, letting markets decide essential sectors instead of government classifications.
- Involve civil society as active collaborators, implementing 100% tax deductions for non-profits to enable ground-level action.
- Avoid fiscal bandaids like India's $24bn package; prioritize restoring contracts and liquidity to prevent widespread bankruptcies and NPAs.

**By K Yatish Rajawat**

* * *

The war against the most severe health emergency in more than 100 years involves three parallel battles – the ones against the Covid-19 pandemic, the infodemic and what I call “*ecodemic*”. The third term represents the impact the first two have on the economy. The scenario and the actions of the government, business and society are being dictated by epidemiologists. In the war of attrition between lives and livelihood, the former seems to be winning, though the verdict may not come in a public proclamation. The war is being waged in the echo chambers of social media and the noise is rising to a crescendo. The verdict will not only affect policymaking but also the way in which the policies are communicated. The problem with the lives vs livelihood debate is that its noise creates panic among the general public and roils the markets, resulting in huge losses in notional and economic value. This results in a triple whammy – it slows down the policymaker, frightens the businessmen and shakes up the society.

It is impossible to solve the trilemma in tranches as all three are interdependent. All three need to be resolved together, using adequate resources, time and effort. The process should begin with the delegation of central control to step up the speed and quality of response. The pandemic is a phenomenon that can’t be addressed centrally. The government is cognizant of this and is acting on it. As a matter of fact, the delegation shows in the recent sealing of designated hotspots in several districts in Uttar Pradesh, Delhi and Madhya Pradesh. This decision has to be made by the frontline administration in each district. There is an administrative glitch here — we recognize the district as a unit of governance and not the city. The virus is most virulent in dense urban areas and the government needs to delegate both financial, police, health and administrative control at the city level. If it was important earlier, it has become urgent now with the risk of contagion rising steadily.

**Lockdown vs Freedom** **vis-a-vis** ***ecodemic***

The pandemic is about control, and hence the sealing and quarantine. The word quarantine derives from the Latin word for forty, and the method was first employed in Venice during the Great Bubonic Plague of 1377. The recent sealing of hotspots means that the government is moving to the next round of containment. Parallel to this, freedom should be given to the domestic supply chain to operate in an efficient manner. It is important to set the protocol for opening the factories, move workers through safe transit routes and use railways for rerouting the logistics chain. Give back the freedom to the businesses to rebuild themselves. Otherwise, bankruptcies will mount — it will start with small businesses and snowball into a crisis that will hit the largest. This *ecodemic* is happening because of the lockdown and its contagion needs to be stopped before it destroys the economy.

It is not possible for the government to decide which sector is essential and which is not. It is best to be left to the market to decide. The government can set the protocol and start giving freedom in a phased geographical manner, taking into account the hotspots.

After 9/11, a new industry of security came into being. It created a protocol for metal detectors, sniffer dogs and guards. A similar industry will rise post-Covid-19 to take on future virus outbreaks. Factories, workplaces and offices will have temperature check, make each person enter and exit through a sanitation unit. This will not happen through notification or orders as businesses need funds and liquidity. The market will create solutions, the answers to *ecodemic* questions, if we allow them to operate. The new cost of operation will be higher, but businesses will accept and adapt. The government needs to recognize that they do not address this problem at any stage — it’s not a 40-day challenge, but an 18-month marathon.

The government may classify pharmaceuticals as essential, but not its supply chain. The industry may take a hit if packaging and printing units are classified as non-essential. The government can go sector by sector and remove blockages, but it will take forever. This command-and-control decision making will not work for the economy. The lockdown has destroyed the supply chain and sucked out the liquidity in a matter of weeks. The panic due to the infomedic is reflected in the financial markets. This is a time for civil society, government and business to work together. The change in behavior whether social distancing, isolation, or lockdown cannot succeed with diktats. The system has to see civil society as an active collaborator on the ground. Its time that the 100 per cent tax deduction for non-profit is made a reality to enable a fund flow and action on the ground.

The equity market foretells the disaster ahead. Relief packages of $ 24 bn is inadequate to revive the economy. The US has announced a $2 trillion package, and that is more than twice the $700 billion allocated for the troubled asset relief programme in 2008. Throwing money solves the problem, it’s a band-aid to the *ecodemic* and will not stop the decline. The lockdown has broken the basic rules of contract and this is scaring the market. Borrowers are using the moratorium granted by the government to renege on dues, the judiciary is going with it, considering the extraordinary situation at hand. If the situation persists, the NPAs will mount — and this time it won’t just be a few large borrowers, but also will involve millions of small borrowers. It won’t be a few countries, it will be the global economy hence collaboration, cooperation needs to happen at the global level too.

This article was originally published on Linkedin, and can be accessed [here](https://www.linkedin.com/pulse/trilemma-triumvirate-k-yatish-rajawat/).

Read more: [Will Nationalisation of Hospitals help Tackle Corona?](https://spontaneousorder.in/will-nationalisation-of-hospitals-help-tackle-corona/)

* * *

**About K Yatish Rajawat**

K. Yatish Rajawat is CEO of the Center for Civil Society is an entrepreneurial leader who has started newspapers and digital media companies he has also headed editorial functions. He is an award-winning journalist who writes on policy, economics and technology. He is the former Editor in Chief of DNA newspaper. His views are sought for policymaking, from political and corporate leaders from Bengaluru, Mumbai to Delhi. He is interested in ideas that can help change things for the better. Recognized and trusted for his views by leaders across the spectrum of the society, he is a regular policy pundit on TV. He is a guide and adviser at Future Institute one of the largest Indian think tanks on urbanization. He is also a fellow at the Institute of Competitiveness, India, the Indian knot in the global network of the Institute for Strategy and Competitiveness at Harvard Business School.

## SO Musing: The Tiger Caged – Part II

Original: https://www.spontaneousorder.in/p/the-tiger-caged-concluding-installment-from-the-economists-survey-of-india

Author: Spontaneous Order

Published: 2020-04-09T18:16:44.000Z

Topics: licence-raj, 1991-reforms, import-controls, foreign-investment

> In continuation with last week’s musing, produced below is an extract from the second part of The Economist’s coverage of the political economy of India in wake of the 1991 economic crisis. The article was re-published in the October 1991 issue of Fre

**Summary:**

This extract from The Economist, republished in Freedom First in October 1991, dissects India's 'licence raj' as a cage stifling the 'Indian tiger' economy, urging classical liberals to support Dr. Manmohan Singh’s 1991 reforms against vested interests protecting their sinecures. India's domestic economy is among the world's most protected, with bureaucrats judging imports case-by-case, allowing them only when deemed necessary. Barriers include bans on import intermediaries ('actual user' rule), 'phased manufacturing programmes' forcing firms to reduce import content for expansion, 16 government 'canalising agencies' monopolizing imports like oil, steel, rubber, and newsprint, and the world's highest tariffs. Inward know-how and capital face tight controls: limits on fees for foreign technology (banned if import content too high), and the 1973 Foreign Exchange Regulation Act capping most foreign equity at 40%, with tighter regulation than for Indian firms. The piece argues for dissecting these past four decades of errors to prevent repetition, emphasizing full backing for reformists freeing the economy from state protectionism that harms ordinary Indians.

**Key points:**

- India's licence raj enforces case-by-case bureaucratic import approvals and bans intermediaries via the 'actual user' rule.
- Firms must follow 'phased manufacturing programmes' to expand while reducing import content, monitored separately.
- 16 canalising agencies hold import monopolies on essentials like oil, steel, rubber, and newsprint, atop the world's highest tariffs.
- Foreign Exchange Regulation Act of 1973 limits most foreign equity to 40% and restricts technology fees if import content is high.
- Classical liberals must support 1991 reforms and study past socialist mistakes to avoid caging the economy again.

**By Spontaneous Order**

* * *

*In continuation with last week’s [musing](https://spontaneousorder.in/so-musing-india-the-tiger-caged/), produced below is an extract from the second part of The Economist’s coverage of the political economy of India in wake of the 1991 economic crisis. The article was re-published in the October 1991 issue of Freedom First, a liberal magazine established by Minoo Masani.*

In the last issue of Freedom First, we had published extensive extracts from the Economic Survey of India (May 4, 1991). The comprehensive survey written in easy to understand English needs to be read by as many Indians as possible – particularly those being misguided by vested interests into opposing Dr Manmohan Singh’s reforms. The vested interests oppose the freeing of the economy for they will no longer have the protection of the state to keep their sinecures and continue making a fast buck at the expense of the people of India.

While the reformists need our full support, we are unable to appreciate their plea that no purpose will be served discussing the past four decades.

We must know what went wrong and why – to avoid such mistakes. Hence we at *Freedom First* decided we should share with you the rest of the ‘Survey of India’. The first post discussed the ‘cage’ in general. The second dissects the nature of the cage and what needs to be done to enable the Indian tiger spring the cage.

**Plain tales of the licence raj**

India has one of the most protected domestic economies in the world. The guiding principle has been to allow imports only when necessary. Bureaucrats make that judgment largely case-by-case.

To stem the flood of imports that this regime might otherwise allow, the system has been bolstered in several other ways. Imports can be brought in only by an “actual user”; in other words, intermediaries are banned. As part of the domestic capacity licensing scheme, firms can be obliged to sign up for a “phased manufacturing programme”: they are allowed to expand their factories, but only if they promise to reduce the import content of the goods they produce. An entirely separate set of procedures is used to monitor imports slated for a reduction under these programmes. Then there are 16 “canalising agencies”, government bodies that are granted a monopoly of certain imports: oil, steel, rubber, newsprint and so on. Finally, to be on the safe side, there are tariffs – which are the highest in the world.

To complete India’s isolation from the world economy, the government has discouraged inward flows of know-how and capital. Despite some recent liberalisation, there are limits on the fees that Indian producers can pay for the use or purchase of foreign technology; technology imports may be banned if the import content of the production process is deemed too high. The Foreign Exchange Regulation Act of 1973 keeps a tight control on inward investment. Most foreign companies have been obliged to reduce their equity holdings to a maximum of 40%. The others are more tightly regulated than equivalent Indian firms.

*The full text could be accessed [here](http://www.freedomfirst.in/issue/issue.aspx?issue=411).*

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [SO Musings](https://spontaneousorder.in/category/so-musings/).

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Will Nationalisation of Hospitals help Tackle Corona?

Original: https://www.spontaneousorder.in/p/will-nationalisation-of-hospitals-help-tackle-corona

Author: Spontaneous Order

Published: 2020-04-08T11:54:53.000Z

Topics: covid-19, hospital-nationalization, healthcare-regulation, public-private-partnership

> During the ongoing pandemic, a lot of well-meaning people from different quarters are suggesting that the government should take over all private hospitals. While this may sound amazing, I ask you to think of what this will lead too. And to understand w..

**Summary:**

Sourya Banerjee argues against nationalizing private hospitals during the COVID-19 pandemic, warning it would expose doctors and staff to risks seen in government facilities without accountability. He cites Telangana junior doctors' silent boycott over lack of protective gear, Hindu Rao Hospital staff's threatened resignations in Delhi amid PPE shortages, and West Bengal's threats under the Essential Services Act after a doctor's assault. Private hospitals, driven by lawsuit fears, better protect staff—unlike UP and Rajasthan government hospitals where over 100 children died yet operations continue. Banerjee notes private hospitals were initially barred from testing, and while tests needn't be free for all (e.g., Kanika Kapoor's five paid tests), authorizing them reduces public sector burden for the poor. With government lacking kits and PPE even for its hospitals, takeover invites mismanagement. Instead, emulate South Korea's public-private synergy to test widely and flatten the curve, resisting calls for state control over private resources amid proven inefficiencies.

**Key points:**

- Nationalizing private hospitals risks forcing doctors into unsafe conditions, as seen in government hospitals' PPE shortages leading to boycotts and threats in Telangana, Delhi, and West Bengal.
- Private hospitals incentivized by lawsuits protect staff better than unaccountable government ones, like those in UP and Rajasthan despite mass child deaths.
- Authorize private testing to ease public hospital loads, subsidizing only the poor rather than mandating free tests for all.
- Pursue public-private collaboration like South Korea's, avoiding government takeover of resources it mismanages.

**By Sourya Banerjee**

* * *

During the ongoing pandemic, a lot of well-meaning people from different quarters are suggesting that the government should take over all private hospitals. While this may sound amazing, I ask you to think of what this will lead too. And to understand what this may lead to, we need only to look at some recent incidents.

Let’s look at some things that have happened in government hospitals to doctors in the current pandemic and the recent past;

1.  Telangana Junior Doctors Association had to go on a [silent work boycott](https://www.deccanchronicle.com/nation/current-affairs/310320/telangana-docs-go-on-silent-boycott-after-child-tests-positive-at-nilo.html) as they were being forced to treat patients without any protective gear. It was only after the boycott, the management came forward to start providing personal protective equipment and masks. 
    
2.  Multiple doctors and medical staff of Hindu Rao Hospital, New Delhi tendered [their resignation](https://indianexpress.com/article/cities/delhi/outcry-over-lack-of-protective-gear-as-7-doctors-test-positive-6342907/) as they were being asked to work on COVID-19 cases without protective gear. Instead of accepting the resignation, they were threatened with disciplinary action.
    
3.  Last year in West Bengal, a doctor was assaulted by patients. When the Doctors went on strike, the state government threatened to invoke the Essential Services Act to mandate that doctors couldn’t strike and demanded that they get back to work or face disciplinary action.
    

There are multiple such cases, where the threat of disciplinary action used against doctors to shut down their legitimate demands across the country. If the government takes over all private hospitals, it will not hesitate to put the lives of all doctors, medical staff, medical students etc. to risk. Doctors are not gods; they are people, who spent a lot of time and effort to learn what they did and provide a service to other people. They should not, under any conditions, be forced to work in a hostile environment.

A private hospital will rarely put its doctors or other staff at risk cause death or lawsuit could close them down. We have at least two government hospitals, in UP and Rajasthan, that we know of where over 100 children died, but they both are still running. 

It is important to understand that in the current crisis, private hospitals had been initially declining to test people because they were not authorised by the government to conduct tests. It is also important to understand that COVID-19 tests need not be free for everyone, but only for those who can’t afford to pay for them. For example, Kanika Kapoor has been tested five times until now. It is ludicrous to suggest she couldn’t have paid for her tests at a private hospital. Allowing private hospitals to test does not mean that poor people will automatically be excluded and not get tested. Instead, it would reduce the load on the government hospitals and allow them to concentrate on reaching out and expanding the testing to the poor and marginalised.

Nationalising private hospitals by the State at this moment will not solve any problems, especially when the government doesn’t even have enough testing kits, protective equipment and masks to provide to its own hospitals. 

The argument is not that private hospitals have no role or importance to play or that they get a free pass. Both the government and the private sector need to work together in synergy to deal with the current pandemic. That’s precisely how South Korea (which has a higher population density than ours, managed to test people and flatten the curve extensively). However, when the government is unable to manage its existing resources efficiently, we should resist the urge to demand it to forcefully overtake more resources (in terms of human and infrastructure) from people. It can only lead to more mismanagement and intensify the crisis.

It’s important to understand that sometimes when a policy solution sounds too good to be true, it more often than not, is.

Read more: [Covid19: Test, test, test; But How?](https://spontaneousorder.in/covid19-test-test-test-but-how/)

* * *

**About Sourya Banerjee**

Sourya is the Project Associate for CCS Academy in Hyderabad. A BBA-LLB (Hons.) degree holder, Sourya used to practice law in Hyderabad before joining CCS. Sourya has also worked with numerous non-profits social organizations including Red Elephant Foundation, and Red Dot Foundation and also written on law and policy for online platforms such as LiveLaw, The Logical Indian, Qrius etc. An ex- Students for Liberty Hyderabad Local Coordinator, in his free time, Sourya runs a citizen journalism platform called Arguendo.

## GK Sundaram: Swatantra’s Forgotten Tamil Leader

Original: https://www.spontaneousorder.in/p/gk-sundaram

Author: Spontaneous Order

Published: 2020-04-07T13:14:08.000Z

Topics: swatantra-party, classical-liberalism, textile-industry, economic-freedom

> The world economy and the health care system are in havoc never seen before after the Second World War due to the speedy spread of COVID19 across the world. In India, few leaders argue with perceptive thinking on the rationale for a complete lockdown of..

**Summary:**

GK Sundaram, a forgotten Tamil leader of the Swatantra Party from Coimbatore, exemplified classical-liberal principles by advocating economic freedom, individual liberty, and minimal government interference amid India's post-independence socialist regime. Born in 1914, he joined his family's textile business after studying in the UK, leading Lakshmi Mills Ltd. as Chairman for seven decades and pioneering collaborations for world-class machinery, promotion of Suvin cotton (India's Extra Long Staple variety), and opposition to price controls for fair international cotton prices. A freedom fighter imprisoned young, he founded industry bodies like South India Cotton Association (president 1978-1998), Southern India Mills Association, and Coimbatore Management Association. Mentored by C. Rajagopalachari, Sundaram joined Swatantra in 1960, contested Coimbatore Lok Sabha in 1962, and served Rajya Sabha (1966-1972), critiquing Gold Control Act for fostering smuggling, bank nationalisation, MRTP Act for stifling production, industrial licensing, and deficit-financed inflation. Inspired by Nani Palkhivala, he warned that socialism benefited only politicians and bureaucrats, crushing liberties and perpetuating poverty. His fearless stance against License Raj, as noted in his biography foreword by Palkhivala, highlighted fruitful egalitarianism over sterile socialism. Sundaram died in 2009 at 95, leaving endowments like lecture series and awards.

**Key points:**

- GK Sundaram advocated 'freedom of enterprise' without government hindrance to protect individual liberty above all.
- As Swatantra Party Rajya Sabha member from 1966-1972, he opposed Gold Control Act, bank nationalisation, and MRTP Act for harming economy and security.
- He pioneered Suvin cotton development, overseas collaborations for textile machinery, and fair international cotton pricing against controls.
- Sundaram founded key bodies like South India Cotton Association and Coimbatore Management Association to train resources and challenge ill policies.
- Mentored by Rajaji, he tirelessly promoted Swatantra ideals, explaining to villagers how socialist elites failed to eradicate poverty.

**By Chandrasekaran Balakrishnan**

* * *

The world economy and the health care system are in havoc never seen before after the Second World War due to the speedy spread of COVID19 across the world. In India, few leaders argue with perceptive thinking on the rationale for a complete lockdown of the entire economy by a whip of the Union Government. Industrialist Rajiv Bajaj is one such leader and argues based on certain data analysis which is India centric and has some grain of truths. Bajaj’s open mind and incredible courage to think alternative ways are quite rare at this juncture of impaired moral fabric all across the world. History witnesses that only a few righteous persons could think or take the risk without fear or consequences. Decades ago, we had a few such rare thinkers.

GK Sundaram was one such great thinker and leader from Coimbatore, Tamil Nadu*. “He has led a historic life. He was a great visionary and a perfect and righteous person”.* He was multifaceted personality contributed immensely to the country’s freedom struggles even at the tender age of 16. He also served considerable time in prison and was a doyen of the Indian textiles industry, builder of many industry bodies for supporting the growth of the textiles sector. He was a tall political leader and a parliamentarian of Swatantra Party, an educationist a philanthropist, and above all, a liberal thinker with a firm belief of economic freedom, individual liberty and equality for all.

GK Sundaram had once unequivocally stated that *“Individuals should be allowed to pursue their vocations without let or hindrance – there should be no unnecessary governmental interference. We believe in freedom of enterprise because it is the only system that can uphold and protect individual liberty which is paramount and matters more than anything else”.* He was inspired by Nani Palkhivala’s annual post Union Budget speeches and delivered several such post Union Budget speeches in Coimbatore at the *“Verandah Club”* with humour and stressed on the ills of State control policies of the government.

GK Sundaram was born in 1914 in Coimbatore. He was affectionately called GKS. He completed a course in Textile Technology at Bolton in the UK and returned to join as Manager in his father’s family business in the textile sector in Coimbatore in 1938. His father, a Congressman, G Kuppuswamy Naidu had started business in the textile sector in 1910. For about seven decades, Sundaram was Chairman and Managing Director of Lakshmi Mills Ltd. He was also the Chairman of Lakshmi Automatic Loom Works Limited and the Lakshmi Card Clothing Manufacturing Company. Today, the Lakshmi group has diversified businesses leading in several areas. It also provides free healthcare services to the poor and serves free cooked food with the aim that no one should go hungry in the city of Coimbatore. 

Coimbatore is known as Manchester of South India, a long-standing tradition of a manufacturing hub for all kinds of goods and services from agriculture, to industry and the service sector. Much before the economic reforms, GK Sundaram was a pioneer in collaborating with many overseas businesses to produce world-class textile machinery in India and established a diversified and profitable business for his company.

During the freedom struggles and the following socialist command and control regime after independence, GK Sundaram led the growth and development of the Indian textiles sector by introducing new technology in processing and manufacturing. He was behind the promotion of Suvin cotton, an indigenous variety of cotton in the country. I*t was because of his support, the Extra Long Staple (ELS) variety of cotton was developed in India.* He was against price controls and had strongly advocated for a fair price for cotton in India, which was equal to the international market price.    

GKS founded and spearheaded several industry bodies to train human resources and also raise voice over ill policies and sensitise the governments. GK Sundaram was the founder and president of the South India Cotton Association from 1978 to 1998. He was the chairman of the Southern India Mills Association from 1967 to 1969 and of the South India Textile Research Association from 1982 to 1998. He was president of the Indian Chamber of Commerce and Industry, Coimbatore from 1962 to 1986; and founder and president of the Coimbatore Management Association from 1955 to 1971 and Wind Power Producers Organisation. He was also the chairman of the Indian Cotton Mills Federation, now known as the Confederation of Indian Textile Industry, from 1973 to 1975.

After involving for several decades of political activism during freedom movements and post-independent India, mostly on liberal principles, Rajaji founded the Swatantra Party in 1959 along with likeminded classical liberals. They had a vision for the country and ventured to effectively counter the socialistic and statist economic policies of Jawaharlal Nehru, who betrayed Gandhi’s vision and aspirations of millions who participated in the freedom struggle.

According to Rajesh Govindarajulu *“The Swatantra Party had a number of adherents in Tamil Nadu and in Coimbatore. Saw. Ganesan (Kambanadipodi), B Venkataswamy, Mariswamy, Venkat Rao, VP Kandaswamy, Kovai Subri – the freedom fighter, Kalki Sadasivam, and the freedom fighter industrialist GK Sundaram.”* Also, Kovai Khadar Ayyamuthu, R Krishnamurthy, Advocate Sundaram, Gobi Sami Gounder and NA Parasuraman were active leaders in the State. Sundaram was not only attracted to classical liberal principles but was closely mentored by C Rajagopalachari in his political career and thought process. On his 90th birthday, he had reprinted Rajaji’s Speeches rendered as the Governor-General after independence. GK Sundaram was associated with the Swatantra Party from the inception but joined effectively in 1960 and *worked tirelessly in order to develop the Party through its ideals.*

As a candidate of the Swatantra Party for Coimbatore, GK Sundaram had contested in 1962 parliamentary elections (Lok Sabha) and *“worked really hard, and he did not spare efforts in this regard. He was never tired of explaining to the poor and illiterate villagers in simple direct language about what was required to make India shine again. He told them how the ruling elite had failed to destroy poverty in spite of destroying the fortunes of the wealthy of the land. The poor were made to understand why the nation was on the brink.”* However, he lost to the Congress candidate of Prof PR Ramakrishnan. However, he did not get discouraged and continued to work for the Party. Rajesh Govindarajulu noted that *“Rajaji had felt that if the party had people like GK Sundaram in all the districts, it would have made a very big difference.”*

Rajaji had high regard for Sundaram’s leadership skills and abilities; thus, he was nominated as Swatantra Party Member to the Rajya Sabha and served from 3 April 1966 to 2 April 1972. As a member of Rajya Sabha, he actively participated in debates and contributed to the house from the perspectives of liberal principles. Sundaram’s speeches on deliberations on the Delhi Motor Vehicles Act, Gold Control Act, Nationalisation of Banks, Monopolies and Restrictive Trade Practices Act, The Essential Commodities Act, the Unlawful Activities Prevention Bill, etc. were noteworthy and made the government rethink its ill-conceived policies.

GK Sundaram argued that the Gold Control Act *“would increase smuggling”* and also eventually create *“harm to internal security”* which was witnessed later until the 1991 reforms. He also vehemently criticised the bank nationalisation. Regarding the MRTP Act, he said that the government aimed to merely to enforce the command and control without the view to provide economic freedom to produce more domestically. He had warned the Union Government that the MRTP Act *“could cause a lot of hassles in the long run”*, which indeed it did.

He was also concerned about the deficit finance of the Union Government and lamented for the increases in inflation. Further, he drew the attention of the Union Government on the disastrous policies of Industrial licensing, textiles policies, etc. He was of the firm view that *“few politicians and bureaucrats”* benefited from the socialist command and control economy and not the people of India. One of his maiden speeches said that Lal Bahadur Shastri had taken some bold steps to reverse the adverse trend of socialist control regime but was short-lived.

Nani Palkhivala wrote the foreword to **Sathyam Santham Sundaram – A biography of GK Sundaram”**(1989), written by A Anandeswaran. The author noted that *“When the permit – quota, license Raj laid steel claws on the nation’s economy, GK Sundaram campaigned fearlessly in support of freedom. During his fateful years in the Rajya Sabha as a Swatantra Party member and outside the house, he emphasised and re-emphasised the basic truth that socialism is to social justice what ritual is to religion and dogma is to the truth. He has consistently championed the cause of fruitful egalitarianism in the place of sterile socialism”.*   

It must be noted that Sundaram had gone out of the usual industrialist’s comfort zone and opposed the Union Government policies openly while pursuing his businesses. This is a rare quality and would not be possible to think without the conviction on certain classical liberal principles with which he strived for the nation-building. According to Rajesh Govindarajulu, during the entire period of six years in the Upper House of the Indian Parliament, Sundaram did not leave a stone untouched. “*Sundaram spoke about the issue of poverty and how the introduction of economic policies and new bills did nothing to help in the eradication of the same. He warned that if economic liberties and liberties of other kind get crushed under the garb of an ‘ISM’, the nation and people will suffer in a big manner.”*

The South India Cotton Association had instituted a GK Sundaram Endowment Lecture series in memory of Sundaram’s services to the nation. Eminent personalities and scholars deliver lectures on the challenges of the Indian economy. Also, the Indian Chamber of Commerce and Industry, Coimbatore had instituted three awards in the name of GK Sundaram for the services rendered by eminent persons in the field of industries, trade, and services. These awards are given every alternate year. GK Sundaram passed away in May 2009 at the age of 95 in Coimbatore. He had a keen interest in hockey and tennis as well. He was fond of horse riding and rifle shooting.

**References:**

1.  LegaCity – The Swatantra Years – From the eyes of GK Sundaram by Rajesh Govindarajulu, January 14, 2020, SimpliCity, Coimbatore [https://simplicity.in/articledetail.php?aid=1075](https://simplicity.in/articledetail.php?aid=1075)
    
2.  LegaCity: GK Sundaram – The Swatantra Party ideologue by Rajesh Govindarajulu, June 05, 2018, SimpliCity, Coimbatore [https://simpli-city.in/articledetail.php?aid=739](https://simpli-city.in/articledetail.php?aid=739)
    

[Read More on the Indian Liberal Tradition](https://spontaneousorder.in/category/liberal-archives/)

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## Relief Package is Peanuts, India Needs to Triple it

Original: https://www.spontaneousorder.in/p/relief-package-is-peanuts-india-needs-to-triple-it

Author: Spontaneous Order

Published: 2020-04-06T16:33:22.000Z

Topics: fiscal-stimulus, covid-19-relief, monetary-financing, cash-transfers

> Swaminathan S. Anklesaria Aiyar is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 199

**Summary:**

Swaminathan S.A. Aiyar criticizes India's Rs 1.7 trillion COVID-19 relief package (0.8% of GDP) as peanuts, noting much is ongoing welfare with new stimulus under 0.5% GDP, far below the US's $2 trillion (10% GDP) package under right-wing President Trump, which includes $1,200 direct cheques to low earners and more to come. India must triple its package immediately—at least matching the 3% GDP drop from government-imposed lockdowns—and potentially fivefold if the crisis lasts six to nine months, still only 5% GDP. This unorthodox mega-stimulus should be financed entirely by RBI money printing, not bank debt, as a one-off with sunset clause to avoid permanent expansion like PM-Kisan or UBI, allowing return to fiscal prudence amid India's high debt. Specifics include tripling Rs 500 monthly Jan Dhan transfers, $130 billion-style aid for hospitals (India's tests cost Rs 4,500), state support, near-free testing, and ID-free kitchens in schools and panchayats for migrants. Lockdowns in crowded India may fail, risking 7.5 million deaths for herd immunity, demanding bold action over fiscal orthodoxy in this government-induced recession.

**Key points:**

- India's Rs 1.7 trillion relief (0.8% GDP) is inadequate versus US $2 trillion (10% GDP); triple it to at least 2.4% GDP now and fivefold later if needed.
- Finance the mega-stimulus solely via RBI money printing as a temporary, sunset-claus-ed measure, not via banks or ongoing programs.
- Direct more cash to needy via Jan Dhan accounts, massively fund free/cheap testing (currently Rs 4,500), hospitals, states, and open ID-free kitchens for migrants.

**By Swaminathan SA Aiyer**

* * *

*Swaminathan S. Anklesaria Aiyar is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor.*

*This article was originally published on the Times of India website, on 29th March 2020. It can be accessed [here](https://timesofindia.indiatimes.com/blogs/Swaminomics/relief-package-is-peanuts-india-needs-to-triple-it/).*

Forgive my censorious language in castigating the inadequacy of the government’s Rs 1.7 trillion relief package (0.8% of GDP) for those hit by the 21-day lockdown decreed to control the coronavirus. The government’s measures are mostly in the right direction but hugely inadequate. Many listed reliefs were already part of ongoing welfare measures, so the additional fiscal stimulus may be barely Rs 1 trillion, under 0.5% of GDP.

By contrast, the US has just enacted a relief package of $2 trillion, almost 10% of its GDP, over and above ongoing welfare spending. Relative to GDP, the US additional stimulus is 20 times India’s. Two former White House economic advisors, Glenn Hubbard and Austen Goolsbee, say the $ 2 trillion packages is just a start for the needy, and this will definitely be followed by a second stimulus to lift the economy out of virus-induced recession. If that is another one trillion dollars, the total stimulus could be a whopping 15% of GDP.  
The US relief package has been devised not by a socialist like Bernie Sanders but a right-wing President granting massive tax breaks to corporations. Trump personally thinks the virus threat is highly exaggerated and does not warrant locking down economic activity to check the virus’ spread. Yet even he accepts the need for a stimulus twice as large as in the 2008 Great Recession.

The 2008 and 2009 relief packages in the US aimed to save tottering banks and businesses, along with modest increases in food stamps and unemployment relief. But not even in 2008 did the US government send cheques to the needy. This time, it will send $1,200 to all individuals earning under $75,000. Married couples earning up to $150,000 will get $2,400, plus $500 per child. The relief is reduced for those earning up $99,000 and eliminated for higher-income persons.

The lesson for India is clear. At least triple the relief package and put more money into the bank accounts of the needy. If the problem continues for six to nine months, increase the relief package fivefold. Even a fivefold increase implies an additional stimulus of barely 5% of GDP, tiny compared to the US stimulus.

This will be utterly unorthodox economics, and fiscal purists will faint in horror. But this is not a conventional fiscal crisis. A medical crisis has forced governments across the world to impose lockdowns on economic activity, deliberately causing the great misery of recessions to check the virus’ spread and save millions of lives. When the government itself creates a recession — albeit for good medical reasons — it may reduce GDP by 3%. Its relief package should be at least the same size. Forget orthodox fiscal policy. India, like the US, must bust all fiscal records.

This mega stimulus should be financed entirely by RBI, just printing the money needed. Banks must not be asked to fund the rising fiscal deficit. They must focus their resources on entities hit by the recession. This mega-stimulus must be one-off. It should have a sunset clause, ending when the medical crisis does. It must not be confused with other programmes like PM-Kisan or a universal basic income. India has a fundamental problem of excessive government debt and needs to return to prudence once the virus dies out. The finance minister has proposed a miserly Rs 500 a month for three months into all Jan Dhan Accounts. Why not triple that instantly? The new US law provides $130 billion for hospitals testing millions of patients. An additional $150 billion will assist state and local governments dealing with the virus at the grassroots.

This holds lessons for India. A virus test costs Rs 4,500, over Rs 20,000 for most families. How many can afford this? Which states have enough money or staff? The Centre must massively assist both, ensuring that testing is near-free and that states can get more staff, equipment and medical supplies. Open free kitchens in schools, *anganwadis* and *panchayat ghars* without ID requirements to feed unemployed migrant workers.

Social distancing and lockdowns in India will not be as effective as in organised countries like Singapore. Millions in India have four or more people per room. Sheer crowding makes social distancing impossible. Virus control may be very flawed. Epidemiologist J Mulyil estimates that to develop “herd immunity”, 55% of Indians — 750 million people — need to get infected. Just 1% mortality among these means 7.5 million dead. Hopefully, the outcomes will be better. But this moral, medical and economic mega-crisis requires a mega stimulus.

Read more: [Corona Threat Could Spark a Mega Recession](https://spontaneousorder.in/corona-threat-could-spark-a-mega-recession/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## SO Musings: India, the Tiger Caged

Original: https://www.spontaneousorder.in/p/so-musing-india-the-tiger-caged

Author: Spontaneous Order

Published: 2020-04-03T17:08:56.000Z

Topics: 1991-crisis, nehruvian-socialism, economic-reform, indian-liberals

> As India scrambles to respond to the novel COVID-19 disease, experts have also warned of the severe economic repercussions from the pandemic outbreak. Indian economy, of late, has already been in a bad shape and the virus-induced lockdown further adds t..

**Summary:**

Amid COVID-19 economic pressures on India's already struggling economy and emerging markets, the post revisits the 1991 balance of payments crisis through an excerpt from The Economist's May 4, 1991 'Survey of India,' reprinted in the liberal magazine Freedom First. The piece, introduced by Freedom First editors, blames 'Nehruvian socialism'—modeled on the bankrupt Soviet system—for 40 years of economic mismanagement that left India broke and seeking IMF loans, akin to an individual borrowing from a bank in crisis. It rejects the narrative of intractable problems, asserting India's economic failure as its greatest misery, despite abundant human resources: capable of hard work, thrifty despite poverty, entrepreneurial, and ambitious. Indians prosper abroad when unshackled by domestic policies that imprison hundreds of millions in despair. Classical liberals emphasize that rectifying the economy would make other challenges more surmountable, with India's unrealized potential exceeding even communist China or the Soviet Union. The post promotes IndianLiberals.in as preserving such liberal critiques.

**Key points:**

- India's 1991 crisis resulted from 40 years of Nehruvian socialism patterned on the Soviet model, leading to bankruptcy and IMF loan dependency.
- The Economist's 1991 survey praises Indians' human resources—hard-working, thrifty, entrepreneurial—but blames policies for trapping them in poverty at home while they succeed abroad.
- Freedom First republished the survey to educate on economic failures over sovereignty debates around IMF aid.
- Economic reform is essential for political stability and progress in India, closing the vast gap between potential and socialist-era reality.

**By Spontaneous Order**

* * *

*As India scrambles to respond to the novel COVID-19 disease, experts have also warned of the severe economic repercussions from the pandemic outbreak. Indian economy, of late, has already been in a bad shape and the virus-induced lockdown further adds to the worry. As the [emerging markets](https://foreignpolicy.com/2020/03/28/coronavirus-biggest-emerging-markets-crisis-ever/) brace to face the recessionary pressure, here is a detailed analysis of another monumental economic crisis which entailed a fundamental shift in the Indian political economy.*  

*In the wake of the balance of payment crisis in 1991, The Economist produced a story on economic mismanagement under socialism. The story generated considerable attention in the Indian press and was cited by the Indian liberal opinion-makers. Freedom First, a liberal magazine established by Minoo Masani, published the report in two parts in its own issues for a wider public reach.*  

*Produced below is an excerpt (with an introductory note by the editors) from the first part of the story from the July 1991 issue of the Freed0m First.*  

The Economist “Survey of India” (May 4, 1991) has attracted considerable attention in the Indian press. Yet, none of our newspapers have, to our knowledge, thought it useful to share with their readers its contents, The story of what went wrong and why India went bankrupt need to be understood. The public debate over the IMF loan has been turned into a question of India’s self-respect and sovereignty. The fact of the matter is we are broke – thanks to forty years of “Nehruvian socialism”. Like an individual who in state of a financial crisis goes to a bank for a loan, our country is compelled to go to the IMF for a loan. We patterned our development on the Soviet model. The Soviets are broke. So are we. They are going around asking for help. So are we.  

The Survey helps us understand what went wrong and suggests what needs to be done. We wish we could have reproduced the Survey in its entirety. We cannot afford to. Hence we have done the next best. Given you extract in this issue- and, hopefully, some more in the next.  

“…few of India’s troubles are as intractable as Indians, especially, suppose them to be. Of all its miseries, the greatest by far is the country’s economic failure, which is as broad and deep as the poverty that it sustains. If India could put its economy right, many of its other difficulties would immediately seem less overpowering; they would not vanish, by any means, but they would at least begin to seem to be beatable. Undeniably, political stability and human progress in India depend on greater economic success. That is exactly why so many Indians smile with resignation at the hopelessness of their case.  

They are wrong. Nowhere else, not even in communist China or the Soviet Union, is the gap between what might have been achieved and what has been achieved as great as in India. The country is rich in the resources that matter most for economic advance- not physical resource which it also has but human resources. Indian are capable of punishingly hard work; remarkably for people so poor, they are thrifty; they are entrepreneurial; they are ambitious and materialistic. When Indians have ignored the Hindu injunction never to cross the “black sea” and travel abroad, they have prospered within a generation. Only at home are so many imprisoned, in their hundreds of millions, in a sink of despair and degradation.  

*The full text is accessible [here](http://www.freedomfirst.in/issue/issue.aspx?issue=410)*. (page 17 onwards)

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

Read more: [SO Musings](https://spontaneousorder.in/category/so-musings/).  

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Migrant Labourers, Lockdown and Game Theory

Original: https://www.spontaneousorder.in/p/migrant-labourers-lockdown-and-game-theory

Author: Spontaneous Order

Published: 2020-04-02T18:20:21.000Z

Topics: covid-19, lockdown-policy, migrant-workers, game-theory

> Prime Minister Narendra Modi’s announced the nationwide lockdown for 21 days beginning on the 25th March after given the ongoing crisis emanating from the spread of COVID-19. However, the lockdown was ill-thought, let us use game theory to understand. I

**Summary:**

Prime Minister Narendra Modi's 21-day nationwide lockdown announced on March 25, 2020, amid COVID-19 was ill-thought-out, as analyzed through the lens of the Prisoner's Dilemma game theory. In this framework, the government and migrant workers are the two players with conflicting goals: the government seeks to enforce stay-in-place to curb virus spread, while jobless workers want to return home. Unconditional cooperation—workers sheltering in place despite unaffordable rent, lack of food access, and uncertainty—is naive, as each player acts strategically to advance their interests. Politicians, attuned to electorate demographics, should have foreseen the mass exodus but failed. The classical-liberal critique highlights the government's top-down approach ignoring workers' realities, leading to people walking over 200 km in hunger and thirst with no alternatives. Better options included: creating shelter homes for migrants to induce cooperation and prevent hinterland infections (though potentially infeasible), or allowing all transport open for 2-3 days post-announcement before full lockdown. Instead, the government pursued a complete lockdown without inter-state travel or sufficient support for the poorest, exacerbating the crisis.

**Key points:**

- Model the lockdown crisis as a Prisoner's Dilemma where government and migrant workers have misaligned goals and cannot expect unconditional cooperation.
- Politicians failed to strategically anticipate the mass exodus of migrant laborers despite knowing electorate demographics.
- Provide shelter homes to improve alternatives and induce workers to stay, preventing virus spread to rural areas.
- Allow 2-3 days of open transport after lockdown announcement to let workers return home before full restrictions.

**By Spontaneous Order**

* * *

Prime Minister Narendra Modi’s announced the nationwide lockdown for 21 days beginning on the 25th March after given the ongoing crisis emanating from the spread of COVID-19. However, the lockdown was ill-thought, let us use game theory to understand.

In [prisoner’s dilemma](https://www.econlib.org/library/Enc/PrisonersDilemma.html), no individual prisoner can determine the outcome of the game (i.e. the punishment received by each prisoner). The best-case is if both prisoners stay silent. But if one prisoner expects the other to remain silent, he has an incentive to defect. If both prisoners think this way, they both defect and get the worst outcome as shown in the matrix below. 

[

![](https://lh3.googleusercontent.com/nsUVD2nfS-qkt_67xGEMve9SkTreYEWok4yfsZgEGVyeOLXxwdbi_XKuF127uv1OYWplmAvoVsiRkOkldylmMTYW48JQAiT7gQAzIu03WV5a0cdlXv6wRiIAHd1GqticuWKneKjHgt0DybsUrw)



](https://lh3.googleusercontent.com/nsUVD2nfS-qkt_67xGEMve9SkTreYEWok4yfsZgEGVyeOLXxwdbi_XKuF127uv1OYWplmAvoVsiRkOkldylmMTYW48JQAiT7gQAzIu03WV5a0cdlXv6wRiIAHd1GqticuWKneKjHgt0DybsUrw)

Think of the two players as the government and the migrant workers. Here are some features of the game:

1.  The migrant labour and the government disagree on their goals. The government wants to ensure that people stay where they are, and the migrant labour (who have lost their jobs) want to go home. It doesn’t matter who is right and wrong. What matters is a disagreement about the goals.
    
2.  Just as in prisoner’s dilemma, one player cannot expect unconditional cooperation from the other player. Unconditional cooperation is a losing proposition. Players will play strategically, advancing their interests. 
    

In this game, unconditional cooperation would have been for the government to enforce a lockdown, and for the labourers to seek shelter in place.  Even if the labourers cannot afford to have shelter (rent is due next week), and have no means to eat at their usual, cheap spots, and do not know when this lockdown will be lifted. Expecting cooperation from them in this situation is naive.

If politicians think strategically (and I assume that being politicians, they would know the demographics of their electorate), they should have been able to see two steps ahead and foresee this mass exodus of migrant labourers. This is where Modi flunked.

Could the government have brought the lockdown in a better way? There are two things the could have been done; 

1.  Create shelter homes for the thousands of potential migrants that are expected to leave for home, and thereby induce cooperation. If the government improved the alternatives in front of the migrant workers, fewer would try to flee on foot for their homes. This would have prevented the infection from spreading into the hinterland, but it may have been infeasible.
    
2.  Acknowledge that people will leave for their homes and that the government cannot estimate their numbers, or provide for them. Therefore, allow all means of transport to remain open for 2-3 days after the lockdown is enforced. After 2-3 days, shut all means of transportation and go into full lockdown.
    

The government wanted to have it both ways – a complete lockdown without inter-state travel and insufficient support for the poorest citizens. No one wants to walk over 200 km on a hot and dusty highway; with hunger, thirst and poor shoes, but they left people with no other options.  

Read more: [A Letter to Policymakers](https://spontaneousorder.in/a-letter-to-policymakers/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## A Letter to Policymakers

Original: https://www.spontaneousorder.in/p/a-letter-to-policymakers

Author: Spontaneous Order

Published: 2020-04-01T17:51:42.000Z

Topics: covid-19, regulatory-reform, civil-liberties, limited-government

> The Cato Institute is a U.S.-based public policy research organization, dedicated to the principles of individual liberty, limited government, free markets, and peace. Its scholars and analysts conduct independent, nonpartisan research on a wide range o..

**Summary:**

The Cato Institute's letter, penned by President Peter Goettler amid the COVID-19 crisis, urges policymakers worldwide to confront the pandemic with calm and humility, prioritizing individual liberty, limited government, and free markets over panic-driven interventions. Acknowledging personal losses and healthcare heroism, it critiques policy-induced shortages, such as U.S. laws blocking diagnostic tests available abroad since January, which allowed unchecked spread for two months. Policymakers must discard such barriers, enact legislation affirming rights to purchase tests, and eliminate clinician licensing, 'certificate of need' laws, and telemedicine restrictions—applauding states that have acted and calling on Congress for interstate reforms. Containment should leverage private citizens' and businesses' voluntary measures, with government shutdowns based on solid epidemiology and lifted at prespecified targets, recognizing elites' blind spots from privilege. Financial aid must expand existing programs for the vulnerable, stimulate via regulatory removal rather than bailouts, and never justify suspending civil liberties or the rule of law. This classical-liberal blueprint minimizes harm to health, wealth, and freedom.

**Key points:**

- Discard laws causing diagnostic test shortages and affirm rights for labs, health systems, and consumers to purchase available tests.
- Eliminate clinician licensing, 'certificate of need' laws, and telemedicine restrictions to enable medical resources to reach patients.
- Base government containment on epidemiological data with prespecified lift targets, supplementing private protective actions.
- Provide targeted aid through existing programs and stimulate economy by removing regulatory barriers, avoiding deficit-financed bailouts.
- Never use the crisis to suspend civil liberties or the Constitution.

**By Spontaneous Order**

* * *

*The Cato Institute is a U.S.-based public policy research organization, dedicated to the principles of individual liberty, limited government, free markets, and peace. Its scholars and analysts conduct independent, nonpartisan research on a wide range of policy issues*. *Author of this piece is Peter Goettler, who joined the Cato Institute as President and CEO in April 2015*.

*Although written for the US policymaking landscape, This letter urges policymakers worldwide to maintain faith in individual and economic liberty while responding to the COVID-19 health crisis and offers critical guidelines to ensure minimal loss to health, wealth or individual freedom.*

The COVID-19 pandemic presents the United States and the world with a challenge it has not seen in generations. Advances in public health and medicine have given many in the developed world a sense that we are invulnerable. Of course, we are not.

We at the Cato Institute have friends and family who have tested positive for SARS‐​CoV2. We have loved ones among the most vulnerable. Our hearts go out to all patients and their families around the globe who are suffering pain and loss due to this disease. We appreciate the inspiring dedication of our health care professionals.

Policymakers must approach this pandemic head-on, with calm and humility. Calm, because a virus is not the only contagion we face. Panic is its own contagion, one that impairs judgment. Humility, because even when policymakers do not act out of panic, their best-laid plans often go awry. To cite one salient example, a law to protect consumers from low‐​quality diagnostic tests created a shortage of tests that allowed COVID-19 to spread unchecked across the United States for two months.

In that vein, policymakers must first discard laws that are preventing health professionals from responding to the COVID-19 pandemic.

Containing the pandemic first requires gathering information about its prevalence. Such efforts cannot occur under the current policy‐​induced shortage of tests. We urge Congress to enact legislation affirming the right of laboratories, health systems, and individual consumers to purchase diagnostic tests that have been available in other countries since January.

Policymakers must next remove obstacles that are preventing health professionals from caring for the sick. We urge state officials to enact legislation eliminating regulations such as clinician licensing rules, “certificate of need” laws, and restrictions on telemedicine that prevent medical resources from getting to the patients who need them. We applaud state officials who have already done so. We urge Congress to use its constitutional power to eliminate regulatory restrictions on interstate telemedicine.

Containment efforts present federal, state, and local officials with difficult tradeoffs. Government‐​imposed controls are not the only source of containment; they merely add to the impact of steps that individuals and private businesses have already taken to protect themselves, their employees, and their customers.

Humility counsels policymakers not to assume in every case that they can better assess the benefits and costs of shutdowns or lockdowns than private citizens, nor those federal policymakers can do so better than states or localities. On the contrary, policy elites with significant savings, who can do their jobs from home without fear of lost income, may suffer from blind spots that accompany such privilege. To ensure containment efforts are proportionate and do minimal damage to the American people, policymakers must base them on solid epidemiological information and commit to lifting them upon reaching prespecified targets.

Efforts to provide financial assistance to those who lose jobs or income should work within existing aid programs, rather than creating new ones, and should target assistance to the most vulnerable individuals. The economic stimulus should come in the form of removing regulatory barriers to economic activity, not deficit‐​financed bailouts.

Under no circumstances should policymakers use this challenge as an excuse to set aside the Constitution, to weaken the rule of law, or to suspend Americans’ civil liberties.

*The rest of the letter is [accessible here](https://www.cato.org/publications/commentary/letter-policymakers).*

Read more: [Covid19: Test, test, test; But How?](https://spontaneousorder.in/covid19-test-test-test-but-how/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Covid19: Test, test, test; But How?

Original: https://www.spontaneousorder.in/p/covid19-test-test-test-but-how

Author: Spontaneous Order

Published: 2020-03-31T15:25:06.000Z

Topics: covid-19-testing, public-private-partnerships, vouchers, health-policy

> Now that the country is locked down, many experts have voiced opinions on what the government should be doing in this period, besides clarifying on lockdown guidelines. I propose a Pradhan Mantri Janta Testing Yojana that uses public financing and priva..

**Summary:**

Bhuvana Anand proposes the Pradhan Mantri Janta Testing Yojana (PMJTY), a scheme leveraging public financing and private provisioning through a modified voucher system to rapidly expand SARS-CoV-2 testing capacity to 250,000 tests per day amid India's lockdown. This classical-liberal approach emphasizes harnessing private sector capabilities for test kit production, triage, administration, and follow-up care, as government labs alone—limited to 60-75 facilities—cannot suffice without risking crowding. Draconian distancing and price controls like the ₹4,500 per test ceiling are critiqued as unsustainable given lifestyle needs, state capacity constraints, and risks of disincentivizing private entry or innovation. Under PMJTY, symptomatic individuals visit private clinics for risk triage and receive government vouchers for free testing, with reimbursement via strategic purchasing agreements. Vouchers address affordability for high-risk groups (exposure, symptoms), enable data tracking for quarantine and follow-up, and integrate with public finance systems, drawing on experiences like PM Bima Suraksha Yojana. Anand stresses clear contracts to mitigate state execution risks, positioning this as optimal for surging supply while preserving market incentives over top-down controls.

**Key points:**

- Ramp up COVID-19 testing to 250,000 tests per day using public funding and private production via PMJTY vouchers.
- Issue vouchers at private clinics for risk-based triage and free testing, reimbursed by government through strategic purchasing agreements.
- Avoid price ceilings like ₹4,500 per test to prevent disincentivizing private sector entry and innovation.
- Vouchers enable out-of-pocket-free access, data tracking for follow-up, and high-frequency monitoring crucial for isolation and treatment.

**By Bhuvana Anand**

* * *

Now that the country is locked down, many experts have voiced opinions on what the government should be doing in this period, besides clarifying on lockdown guidelines. **I propose a Pradhan Mantri Janta Testing Yojana that uses public financing and private provisioning, to quickly expand ‘supply’ of [SARS-CoV-2](https://www.who.int/emergencies/diseases/novel-coronavirus-2019/technical-guidance/naming-the-coronavirus-disease-\(covid-2019\)-and-the-virus-that-causes-it) testing capacity in the country.** Designing such a scheme in the form of a modified voucher system can help optimise on the frontiers of private capability to deliver and user affordability.

One thing is clear; we need to increase the number of people being tested for SARS-CoV-2 drastically. Social distancing and expansive testing are not mutually exclusive: doing the first will not eliminate the need for the other. Draconian distancing rules or market controls are not sustainable given our lifestyle practices (buy fresh veggies/milk/provisions/proteins frequently), reliance on help in the house, heat/electricity/water/garbage management challenges, or our state capacity limitations. The last is going to become woefully apparent in the coming days. 

On the singular question of testing, so we can effectively isolate and treat, experts estimate that we need to ramp up to 2,50,000 tests per day. While this is admittedly a crude bottom-line number, how do we get here in the next month-six weeks? Suppose the government were to set such a target, what programmatic design should we consider? 

In a March 23rd column, CCS’ former Board member Ajay Shah writes: *In responding to the Covid-19 epidemic, there is a need to surge the quantities of testing and health care. Most of the capacity in testing and health care in India is in the private sector. Hence, thinking about health policy should envision how to utilise these capabilities. The right combination involves public funding and private production. This involves the complexity of addressing market failure through purchasing and the problem of low government capability in contracting.*

Government ability to test is limited: despite ramping up there is only so far this can go; besides, we should want as much dispersion across health facilities and test centres as possible to avoid the dangers from crowding. 60-75 labs conducting these tests will scarce suffice to reach the target. Harnessing private capability to develop and mass-produce test kits, conducting triages and administering tests, and provision of subsequent health care is both necessary and inevitable. Over the last few days, we hear hopeful news of government expediting approvals for private clinics and labs to test for SARS-CoV-2. There is also exciting news on the front of cheap home-testing coming from places like IIT-Delhi.  

The question on people’s mind is: can we afford these tests? Government has worked backwards on setting a price-ceiling on clinics and labs conducting such tests: they are not allowed to charge more than ₹4,500 per test. Irrespective of what the actual market cost of the test is, we want people to be able to get tested if (in order of priority) they are high-risk from immediate/confirmed exposure, high-risk from showing symptoms, high-risk from casual exposure. We want to progress along this frontier getting finally to those who are low-risk. We don’t want to disincentivise private players from entering the market, innovating on delivery or turning away patients because they don’t think the pricing works out. 

**What should the big picture design of PMJTY be?** 

In simple words, if I am feeling flu-y, I could go to a private clinic/lab. The lab triages me for risk, previous conditions enter my data into a database, and cuts me a voucher from the ‘book’ that I take to the lab. These vouchers are part of a strategic purchasing agreement that the Government of India and the private provider have entered into. I get my test, get sent home for self-quarantine, or in case I am high-risk, the hospital admits me into the quarantine area. We wait for the test, and the next steps follow. This is a non-scientific protocol, of course, to be tailored based on what the situation calls for. I pay nothing out of pocket for my testing. The lab gets reimbursed by the government on a prior-agreed payment schedule. Simple enough? 

Not quite. We are asking a state that barely works at the best of times to get its act together in the worst of times. Making this work seamlessly requires a thoughtful draft strategic purchasing agreement (contracting/procurement of services) where the terms of the service are clear, a payments schedule and system is defined, some backend facilities management, human resource management, data collection and management protocols, and mechanisms to check against cheating and rigging are in place. We have some experience in doing these things with the Pradhan Mantri Bima Suraksha Yojana, as well as cash in lieu of grains at ration shops. But by all accounts, this hasn’t been done well. 

Vouchers, if we can get them right, can solve multiple public finance and provisioning challenges: income support for an expensive purchase, so folks are incentivised to opt-in, no out of pocket transactions for the masses, facility to quickly use data since payments are recorded in the public finance management system, enhanced ability to track and follow up (crucial in our problem case) at high frequency.  

Read more: [Markets are Leading the Fight Against COVID-19](https://spontaneousorder.in/markets-are-leading-the-fight-against-covid-19/)

* * *

**About Bhuvana Anand**

Bhuvana Anand is Director, Research at Centre for Civil Society, one of India’s leading think tanks. Bhuvana’s subjects of interest are better regulation and governance, public finance management, and political economy. In India, she has worked extensively on reforms of welfare programmes, including reforms of the Public Distribution System and implementation of various Direct Benefits Transfers. At the Centre, she works on unpacking how government actually functions using administrative data, legislative analysis, field research, and machine learning. In addition, her team develops blueprints for programme design and policy implementation. Bhuvana has worked with various donors and civil society organisations in Sudan, Afghanistan, Sri Lanka, India and the United States, in policy advocacy, managing multi-pronged programs and research. She previously worked with the United Nations, the British Government's Department for International Development, and most recently at MIT’s Poverty Action Lab.

## Should Supreme Court Live-Stream its Proceedings? 

Original: https://www.spontaneousorder.in/p/should-the-supreme-court-live-stream-its-proceedings

Author: Spontaneous Order

Published: 2020-03-30T16:42:45.000Z

Topics: judicial-transparency, court-live-streaming, supreme-court, open-justice

> Recently, the Calcutta High Court allowed the live-streaming of a case on YouTube. It is the first time an Indian court has done that, although the battle for the same has been ongoing for a while. In 2018, the Supreme Court of India announced that live..

**Summary:**

Swati Singh argues that the Supreme Court of India should implement live-streaming of its proceedings to enhance transparency, accountability, and public access, aligning with classical-liberal principles of open justice and citizen oversight of constitutional custodians. She highlights the Calcutta High Court's pioneering YouTube live-stream as a first in India, contrasting it with the Supreme Court's 2018 announcement to live-stream cases of national importance and constitutional issues, which has seen no progress despite government commitments. International examples include Canada's Supreme Court and Australia's open court systems allowing cameras. Paralleling live broadcasts of Rajya Sabha and Lok Sabha, Singh contends citizens have a right to observe Supreme Court debates, countering the Indian legal system's opacity and jargon that concentrates knowledge among elites. While acknowledging challenges like defining 'national importance'—citing the 2012 Delhi gang rape case that spurred POSCO legislation and death penalty debates—she proposes court-formulated guidelines balancing public interest with privacy. Benefits include remote access beyond Delhi, educational value for young lawyers, improved lower court outcomes, and boosted public confidence in the judiciary.

**Key points:**

- Calcutta High Court achieved India's first court live-stream on YouTube, while Supreme Court's 2018 plan for national importance cases remains unimplemented.
- Live-streaming promotes transparency and accountability by making Supreme Court proceedings accessible to the public, akin to parliamentary broadcasts.
- Guidelines are needed to define 'national importance' cases and protect privacy, as in sensitive matters like the 2012 Delhi gang rape.
- Live-streaming enables remote public access, legal education for young lawyers, and greater citizen confidence in the judiciary.

**By Swati Singh**

* * *

Recently, the Calcutta High Court allowed the [live-streaming of a case on YouTube](https://theprint.in/judiciary/in-a-first-calcutta-hc-allows-live-streaming-of-hearing-on-youtube/364436/). It is the first time an Indian court has done that, although the battle for the same has been ongoing for a while. In 2018, the [Supreme Court of India announced](https://www.livemint.com/Politics/GrWwxGSHTseJAEfinR8AwI/Supreme-Court-allows-for-livestreaming-for-cases-of-constit.html) that live-streaming of court proceedings of matters of *national importance* and *constitutional issues*. It would serve as an instrument for greater accountability for the Court and will also keep the public informed. The Central government was expected to make arrangements for the live streaming of proceedings in phases. However, in the last two years, no progress is made. But how practical is it to incorporate such a system?  

Taking a quick look around the world, this system has already been brought into practice by other countries. The Canadian Supreme Court is on the frontlines of adapting itself to technology and permitting audio-visual broadcasting of its proceedings. Australia also follows an open court system wherein courts in all Australian jurisdictions allow television cameras into courtrooms.   

In India, the Rajya Sabha and Lok Sabha, both have TV channels dedicated to them wherein the proceedings are telecasted live, and rightfully so. We, as citizens, have the right to know the debates and discussions about policies and legislations. Similarly, in the interest of justice, the common man should be able to know what is going on inside the highest Court of the country, as the Supreme Court is the custodian of the constitution.   

The access to the discussions and debates happening in the Supreme Court must be available, even if the common man is not equipped to understand them completely. The major problems in the Indian legal system are lack of transparency and inaccessibility. The common man barely understands legal lingos and jargons, let alone the legal system. The knowledge of the law is concentrated only in the hands of lawyers and experts, making the common man susceptible. The Supreme Court’s verdict on live-streaming could be a significant step towards increasing transparency and accountability while making sure that the intricacies of the legal system are within the reach of a common man.   

One major question, though, is how to identify which issue is of *national importance*? One could argue that the [2012 Delhi gang rape](https://en.wikipedia.org/wiki/2012_Delhi_gang_rape) is a case of national importance since it led to the enactment of [POSCO](https://wcd.nic.in/sites/default/files/POCSO-ModelGuidelines.pdf) and also initiated a nationwide discussion on the death penalty. However, in such a case, the family of the victim might not be comfortable with the details of the case being live-streamed nationwide. Some guidelines are needed in this regard which the Court itself can formulate keeping in mind the importance of the issue to the general public and the privacy and individual rights of the parties involved.   

Live-streaming can help in making the court proceedings accessible to people who are not in Delhi or cannot get the pass to observe the procedures in person. Another benefit would be to the young lawyers, who will be able to learn from watching the process in the highest Court of the country. It could potentially lead to better outcomes in lower courts as well. With live-streaming of the proceedings, citizens would gain confidence in the courts by seeing judicial work in action and learning first-hand how the legal system works.   

Read more: [The Supreme Court of India Needs a Breather](https://spontaneousorder.in/supreme-court-needs-a-breather/)

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## SO Musing: India: Seeing the Future in its Past

Original: https://www.spontaneousorder.in/p/india-seeing-the-future-in-its-past

Author: Spontaneous Order

Published: 2020-03-27T11:29:23.000Z

Topics: economic-reforms, socialism-critique, federalism, free-enterprise

> Back in 2006, Dr Raghuram Rajan, a leading economist, professor, and bureaucrat, delivered a public lecture under the auspices of the Forum of Free Enterprise as part of its Golden Jubilee celebration series. In the speech, he outlined the broad traject..

**Summary:**

In his 2006 lecture, Raghuram Rajan critiques India's socialist-era policies as a jumble of regulations that stifled growth through 'constrained adaptation,' where entrepreneurial Indians navigated barriers like industrial licensing, public sector dominance in commanding heights, small-scale reservations, rigid labor laws, and anti-monopoly measures, resulting in inefficient capital use, few jobs, and the 'Hindu rate of growth.' These policies produced capital- and skill-intensive manufacturing atypical for India's labor abundance, while villages lacked electrification and safe water, benefiting vested interests cloaked in socialist rhetoric. A silver lining was India's diversified manufacturing and high-skilled workforce from Nehru's emphasis on science and IITs. Growth accelerated from around 1980 with pro-business reforms under Gandhi and Rajiv—liberalizing capital imports, technology, and licensing—followed by 1991 pro-competition measures dismantling trade barriers and opening services, alongside political decentralization empowering states. Achieving nearly 6% average growth over 25 years and sharp poverty reduction, India must continue reforms: liberalizing higher education, managing urban growth, rebuilding institutional faith, flexible labor laws, infrastructure, and incentives over coercion, honoring free enterprise pioneers like AD Shroff and Nani Palkhivala.

**Key points:**

- Socialist policies like licensing and labor laws created inefficiencies, preventing firms from scaling and underutilizing India's labor while favoring capital-intensive sectors.
- Reforms from 1980, including liberalization and 1991 crisis responses, unleashed 6% average growth over 25 years by reducing constraints and promoting competition.
- Political decentralization shifted economic autonomy to states, allowing prosperity based on local actions rather than central dictates.
- India's pre-existing strengths in skilled labor from IITs and diversified manufacturing enabled dynamism once constraints loosened.
- Future agenda emphasizes liberalizing higher education, flexible labor laws, infrastructure, and incentives to sustain growth.

**By Spontaneous Order**

* * *

*Back in 2006, Dr Raghuram Rajan, a leading economist, professor, and bureaucrat, delivered a public lecture under the auspices of the Forum of Free Enterprise as part of its Golden Jubilee celebration series. In the speech, he outlined the broad trajectory of economic mismanagement under socialism in India; the differing impact of economic reforms under decentralized federalism; and the high-skilled, capital-intensive nature of economic dynamism. He also laid out his reform agenda which included liberalization of higher education; management of urban growth; building faith in public institutions; flexible labour laws; infrastructure development; and a focus on incentives, not coercion.*  

*Produced below is an excerpt from the lecture. The lecture was published in the booklet form by the Forum of Free Enterprise.*        

AD Shroff, who started the Forum of Free Enterprise in the 1950s, was an unofficial delegate to the Bretton Woods Conference that set up the International Monetary Fund – an interesting connection between this forum and my organization. His aim was, in part, to combat the tendencies towards excessive regulation that permeated the Indian economy. Among the others associated with this organization was Nani Palkhivala. These were important but lonely voices against the socialism practised in India then, arguing as Palkhivala said, that it was a fraud – transferring wealth from the honest rich to the dishonest rich. Instead, people like Mr Shroff and Mr Palkhivala maintained a lonely but necessary vigil then, keeping alight the lamp of free enterprise. I am privileged to be speaking from the same forum as these stalwarts.   

Since I am an international bureaucrat, what I say reflects my own opinions, and not necessarily those of my organization. But the Fund clearly welcomes free enterprise and attempts to help create the conditions for it to flourish around the world. I therefore particularly welcome the opportunity to speak at this forum and thank the organizers for inviting me. What I want to focus on today is not just how far India has come from those lonely days, but also how far it has to go.   

Let me start by asking you to go back just 25 years. Unlike today when you can walk across to a shop to get a working state-of-the-art mobile phone, then one had to wait for years to be allotted a phone, and when that miracle happened, it took a further act of God and the benevolence of the P&T man for the phone to work after that. We had black and white TV then. Urban youth like us had to watch Krishi Darshan for entertainment on the monopoly Doordarshan network, where farmers responded to penetrating questions like “Kya aap khet ko pani dete hain?” Of course, most of the intended audience, villagers, did not have access to a TV even in the few cases they had the electricity to power it with.   

Starting around 1980, the Indian economy became a veritable dynamo, posting an average growth of nearly 6 per cent per year over the last twenty-five years. Despite the inevitable unfavourable comparisons with China, very few countries have grown so fast for such a prolonged period of time, or reduced poverty so sharply. We should indeed be proud of what India has achieved, and clearly, many of us are. There is a buzz today in India, a sense of limitless optimism. But is it justified?   

To answer this question, let us start by asking how we got here. The best description of India’s path is really “constrained adaptation”. “Constrained” because of the numerous policies and regulations inflicted on us by an untrusting government and “adaptation” because Indians are by nature entrepreneurial. As a result, the law of unintended consequences was at work big time – what the policies produced was very different from what was intended. Consider some. Barriers were erected against the foreign competition to protect domestic enterprise – the idea was this would give a respite to our infant industries, allowing them a nurturing environment while they would grow up and became competitive. But the nurturing environment proved so comfortable that our infants adapted by never growing up. The canonical example was the Ambassador car – a version of the Oxford Morris which remained virtually unchanged over 40 years of production. We waited with bated breath for every new model to see what the shape of the headlights would look like – for it seemed that was all that changed.   

A second objective was to use scarce capital resources in the most effective way possible. To do this, the so-called “commanding heights”, such as steel, petrochemicals, and heavy electricals, were commandeered by the public sector. In yet other sectors, private entrepreneurs were allowed in, but heavily constrained by regulations on how much, and what they could do, and where. But because much of the economy was in the hands of those who did not care about profits, and in the rest, the profitable could not grow, the outcome was that India used its scarce capital very inefficiently.   

Because employment was so important for India, encouragement was given to small-scale industries by reserving specific areas of production for them. But because firms could not grow to efficient scale, production was unprofitable, so few jobs were actually created. The government sought to protect unskilled labour in large firms – for example, through laws against firing. But this again meant that large firms stayed away from labour-intensive industries, so fewer jobs were created. Moreover, firms resorted to temporary workers or stayed small so that labour laws did not apply. In short, labour laws neither led to the creation of more jobs nor to the protection of most workers.   

I can go on but will stop with one last example. An overarching principle was to prevent the concentration of wealth in a few hands. This was another rationale for licensing, as also the Monopolies and Restrictive Trade Practices Act. But again, in an attempt to use government rules to eliminate privilege, we created the opposite – the industrialist who magically got all the licenses as well as the requisite financing. No wonder business was a dirty word.   

So what were the consequences of this jumble of policies for India’s pattern of development circa 1980? First and foremost, these policies held India’s growth to a low, but not disastrous, level, famously dubbed the Hindu rate of growth. Indian industry was inefficient, not innovative, and exported very little. Surprisingly, these policies did not mean that India produced less manufacturing goods as a whole for a country at its stage of development. It did mean, however, that the composition of its manufacturing activity was unusual: India produced more than its share of capital- and skill-intensive goods (think public sector petrochemical plant) while underutilizing what it had in plentiful supply-its abundant labour or even its innovative capacity.   

That many engineering graduates like me left engineering or even the country was partly because the economic environment in the country at that time simply did not need the creativity and the innovation that we brought to the table.   

To me, this message was forcefully reinforced when after doing a degree in management, I joined one of the country’s foremost business groups as a management trainee. A CEO of one of the group companies berated the engineers in the group of management trainees he was taking around, arguing that we had wasted the nation’s money by taking a precious engineering place and then departing to the ranks of management. While he was showing us around the factory, however, we noticed two elevators going up. We appeared to be waiting for the elevator on the left even though the elevator on the right was available. When asked why, he replied, “We are waiting for the management elevator, this one is for the engineers and workers”.   

It was not just the middle class that did not benefit, our villages were still not electrified and our poor still had no access to safe clean drinking water. So despite all the rhetoric about socialism, government policies were of the few, by the few, and for the few. I have argued that this may have been unintended, but perhaps I am being charitable. Perhaps indeed the consequences were fully intended but were cloaked in the rhetoric of social purpose, and the public confused with smoke and mirrors. Perhaps India’s greatest enemy was not the proverbial foreign hand but the vested interests inside.   

Be that as it may, there was a silver lining. The constraints caused India to be highly diversified in its manufacturing even back in 1980. And a portion of its labour force was highly skilled, a clear legacy of Pandit Nehru’s emphasis on science, higher education, and also leading-edge technologies for the public sector. How many countries, at India’s then stage of development, could boast of having a space program? How many advanced countries even now can boast of schools of the calibre of the IIT’s? Thus India had the capabilities provided the constraints were loosened and the right opportunities emerged. And that is indeed what happened.   

In 1980, government attitudes towards the economy, and the private sector, in particular, started to change. Under Mrs Gandhi and then Rajiv, pro-business reforms were set in motion, with liberalized access for domestic firms to capital imports (including, presciently, to computers), technology, and foreign exchange, and the gradual relaxation of industrial licensing. Later, in the aftermath of the foreign exchange crisis in 1990, broader reforms that were more genuinely pro-competition were introduced-barriers to foreign trade were dismantled, inward foreign investment was liberalized, and important services such as telecommunications and finance were opened up.  

Second, but no less important, India started becoming more decentralized politically. The decline of the Congress’ power and the rise of regional parties conferred greater political autonomy on the states, translating to autonomy even in the economic sphere. States increasingly prospered, or not, based on what they did rather than because of actions at the centre.  

*The full text of the lecture is accessible [here](http://www.forumindia.org/images/pdf/4lot/India-Seeing_the_future_in_its_Past.pdf)* (page no. 5).

To read more musings, [click here](https://spontaneousorder.in/?s=SO+Musings).

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Corona Threat Could Spark a Mega Recession

Original: https://www.spontaneousorder.in/p/corona-threat-could-spark-a-mega-recession

Author: Spontaneous Order

Published: 2020-03-25T16:34:58.000Z

Topics: covid-19, economic-recession, supply-chains, monetary-policy

> Swaminathan S. Anklesaria Aiyar is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 199

**Summary:**

Swaminathan S.A. Aiyar warns that the COVID-19 coronavirus represents history's greatest medical-economic crisis, already sparking a deep global recession atop pre-existing vulnerabilities like Europe's and Japan's near-recessions and India's halved GDP growth. Drawing parallels to the 1918 Spanish flu (200 million infected, 50 million dead), he posits a best-case scenario of one-quarter duration causing a serious but recoverable recession by end-2020, versus a worst-case year-long havoc with billions infected and 0.5 million deaths per experts, rivaling 2008's disruption. Initial shocks include China's Hubei lockdown severing global value chains in electronics and pharma, India's medicine export restrictions, and OPEC's collapse crashing oil prices, imperiling related industries. Escalating government measures—Italy's nationwide lockdowns, US bans on 26 European countries, India's visa halts—strangle airlines, tourism, events (Tokyo Olympics, IPL cancelled), and mass gatherings, with India's festivals and pilgrimages (Vaishno Devi, Tirupati) posing uncontrollable risks despite tropical hopes. A mere 5% consumption cut from fear could induce recession, slashing durables and triggering bankruptcies amid high post-2008 corporate debts and worker shortages. Near-zero interest rates blunt monetary tools like RBI's potential 2% cuts, while fiscal explosions offer limited relief against fear-driven slumps.

**Key points:**

- Coronavirus disruptions, including China's lockdowns and oil price crashes, have already triggered a global recession amid weak pre-existing growth.
- Government shutdowns of travel, events, and gatherings will devastate airlines, tourism, entertainment, and India's mass festivals, amplifying economic strangulation.
- A 5% consumer spending drop from fear suffices for worldwide recession, risking mass bankruptcies in debt-laden sectors like oil.
- Conventional monetary policy fails with rates near zero, and fiscal stimuli struggle against fear-induced slowdowns and worker shortages.

**By Swaminathan SA Aiyer**

* * *

*Swaminathan S. Anklesaria Aiyar is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor.*

*Here is a repost from one of his weekly opinion piece, pertaining to the pandemic COVID-19 and its effects on the international economy.*

We face the greatest medical-cum-economic crisis in history. Admit it or not, the coronavirus has already created a deep global recession. Even earlier, Europe and Japan verged on recession while Indian GDP growth had halved from its peak. This leaves little resilience to meet the coming hurricane.

Let’s hope the coronavirus will not be as bad as the Spanish flu that infected 200 million and killed 50 million in 1918-19 — more than all combat deaths in World War I. No vaccine or cure existed for Spanish flu, just as there is none for the coronavirus. It will keep spreading till it naturally dies out like other epidemics.

In the best-case scenario, the virus may last one quarter. Lakhs of individuals and businesses will die, but many economies could revive by end of 2020. In this best-case scenario, the world and India will suffer a short, serious but not a catastrophic recession.

In the worst-case scenario, the virus will spread havoc for a year. In that extreme case, billions may get infected and tens of millions may die. However, most experts predict just 0.5 million deaths. Still, the economic disruption will be enormous, possibly as bad as in 2008.

Most analysts have focused, rightly, on the human tragedy. But the economic consequences may be as bad. The first-round effects are already clear. When China locked down Hubei province, the source of the virus, this disrupted global value chains in industrial production, especially electronics and pharma. The world prepared for a trade shock. India restricted the export of some medicines to avert shortages. The OPEC agreement fell apart and the price of oil crashed, threatening the oil and associated industries including automobile, especially small players.

Then came massive strangulation of activity by governments to quell the virus. The movement was slashed or banned in entire countries starting with Italy. The US banned visitors from 26 European countries, and will surely expand the list. India stopped visas to tourists and automatic clearance for NRIs. Country after country is enforcing isolation.

Mass meetings of all sorts — the Tokyo Olympic Games, IPL in India, football World Cup, National Basketball in the USA and other sports spectaculars have been or will soon be cancelled. Entertainment and restaurants have been vivisected: New York has closed down Broadway shows. In many countries, the assembly of over 100 people is being limited or forbidden. This may look like panicky overkill, but no government wants to be accused of letting people die.

India teems with festivals and pilgrimage sites where lakhs participate. Vaishno Devi, Triveni, Tirupati and other sites get millions of pilgrims a year. Will the government close them all, or let them become hubs of killer infection? What about Durga Puja, Diwali, Ganesh Chaturthi and other mass festivals? Official bans will be politically difficult, and impossible to implement. Lesson: India is a major global risk centre. Hopes that high Indian temperatures will kill the virus look exaggerated — tropical Singapore and the Philippines are already victims.

Shutdowns and lockdowns will wreck industries galore — airlines, road and rail transport, films, music, sports, advertising, media (which depend on advertising), shopkeepers and hawkers, tourism, and many more. If consumers cut consumption by no more than 5% to avoid infection, that will suffice for a world recession.

Consumer durables are highly vulnerable since people can easily put off their purchases. For safety, people will go out less, shop less, and stay home watching TV and video. This crash, in activity, will affect every nook and corner of the economy. The recession that follows can cause thousands of bankruptcies (oil-related sectors look riskiest) that may make recent years look like a picnic. Corporate debts have stayed high after 2008, so the global and Indian financial systems are again in danger, even as they struggle to throw off the bad loans and mega-losses of the past.

Millions will avoid going to work because of fear, bad health or lack of transport. This worker shortage will hit the supply of services and goods.

Conventional recessions can be tackled by loose fiscal and monetary policy. These will not work when fear drives the slowdown. In many countries, interest rates are already close to zero, so central banks have lost their power to stimulate through big rate cuts. The RBI could cut interest rates by as much as 2%, but will that revive lending when recession and fear are killing businesses? The moribund financial system will blunt all fiscal and monetary initiatives.

Governments the world over will let fiscal deficits explode to stimulate spending. In a best-case scenario, we will fall hard but rise again by end of 2020. A worst-case scenario is too scary to even contemplate.

This post was originally published on the Times of India, on 15th March, 2020 and can be accessed [here](https://timesofindia.indiatimes.com/blogs/Swaminomics/corona-threat-could-spark-a-mega-recession/).

Read more: [Markets are Leading the Fight Against COVID-19](https://spontaneousorder.in/markets-are-leading-the-fight-against-covid-19/)

* * *

**About Swaminathan SA Aiyer**

Swaminathan S. Anklesaria Aiyar is a graduate of St. Stephen’s College, Delhi, and Magdalen College, Oxford. He is currently Consulting Editor of The Economics Times and a research scholar at The Cato Institute. He has been editor of two of India’s biggest economic dailies, Financial Express in 1988-90 and The Economic Times in 1992-94. For two decades, he was also the India Correspondent of The Economist, the British weekly. He has been a frequent consultant to the World Bank and the Asian Development Bank. He is best known for his popular weekly column in The Times of India, “Swaminomics”. Swami, as he is universally called, is also a social investor. He runs the Mukundan Charitable Trust. He has co-promoted three micro-finance institutions – Arohan in Calcutta, Sonata in Allahabad and Mimo Finance in Dehra Dun. He is on the Board of Directors of Artisans Micro Finance Ltd and hopes to convert artisans into share-owning millionaires. And he is building a fleet of medical ships on the Brahmaputra to serve islands that have never seen a doctor.

## Let People Choose What They Eat

Original: https://www.spontaneousorder.in/p/let-people-choose-which-food-they-eat

Author: Spontaneous Order

Published: 2020-03-25T12:22:32.000Z

Topics: food-security, pds-reform, cash-transfers, beneficiary-choice

> In the wake of the COVID-19 pandemic, the Central government has allowed states and Union Territories to take Public Distribution System food grains for three months on credit. But will the system be able to deliver results, particularly in this hour of..

**Summary:**

India's Targeted Public Distribution System (TPDS), covering nearly two-thirds of the population under the National Food Security Act 2013, suffers from inefficiencies like leakages at 5.27 lakh Fair Price Shops and incentives for shopkeepers to divert subsidised rice and wheat to open markets. It also distorts agriculture by favouring cereals over nutritious coarse grains like jowar, bajra, and ragi. The classical-liberal solution is to empower beneficiaries with choice: opt for in-kind grains or Direct Benefit Transfers (DBT) cash, leveraging over 95% Aadhaar coverage and financial inclusion to enable purchases of preferred foods. DBT pilots in Chandigarh, Puducherry, and Dadra Nagar Haveli from 2015 showed beneficiary preference rising from 35% to 65%, though one in five reported non-receipt due to state capacity limits. Allowing this dual option would make TPDS compete with local markets, reduce leakages by paying shopkeepers market rates, boost farmer incomes from low-input coarse grains, and enhance welfare through expanded choices without prescribing a single model.

**Key points:**

- TPDS inefficiencies stem from lack of beneficiary choice, forcing receipt of only government-specified rice and wheat.
- Introduce optional DBT cash transfers to let beneficiaries buy preferred grains, including nutritious local coarse grains like jowar and bajra.
- DBT reduces shopkeeper leakages by enabling market-rate sales and supports farmers via lower-water, lower-fertiliser crops.
- Pilots showed DBT preference growing from 35% to 65%, despite 20% non-receipt issues.
- Adopt a principles-based choice between in-kind and cash to improve TPDS competition and beneficiary welfare.

**By Tarini Sudhakar**

* * *

In the wake of the COVID-19 pandemic, the [Central government](https://www.news18.com/news/india/states-can-lift-pds-grains-for-three-months-on-credit-says-fm-nirmala-sitharaman-2548249.html) has allowed states and Union Territories to take Public Distribution System food grains for three months on credit. But will the system be able to deliver results, particularly in this hour of need? 

India has one of the most extensive food security programs in the world. The current Targeted Public Distribution System (TPDS) [extends to nearly two-thirds of its population](https://www.prsindia.org/administrator/uploads/general/1388728622~~TPDS%20Thematic%20Note.pdf). This TPDS, constituted under the National Food Security Act 2013, was envisioned to ensure “access to adequate quantity of quality food at affordable prices to people to live a life with dignity.” However, its [well-documented](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6747310/) inefficiencies leave much to be desired. One significant element that is absent in the present structure is the **choice for beneficiaries**. Beneficiaries should have the **option to decide whether they want to receive their entitlement in cash or in-kind under TPDS**. Currently, beneficiaries can only opt-in for the latter. That means they can only receive the grains which the government decides to provide – rice and wheat in most cases. How can we incorporate such flexibility into TPDS to improve the system?

Under the present TPDS, both Central and state governments play a role in ensuring access to food. The Central government is responsible for procuring food grains from farmers at minimum support prices, transporting and allocating them to each state. The state governments are responsible for identifying eligible households and distributing food grains to beneficiaries through Fair Price Shops. There are nearly [5.27 lakh Fair Price Shops](https://pib.gov.in/newsite/PrintRelease.aspx?relid=178067) operational across India where beneficiaries can purchase their monthly food grains entitlements at subsidised rates.

Despite being India’s flagship food security programme, TPDS suffers from significant flaws, especially in delivering the food grains. Stakeholders such as dealers of Fair Price Shops have an in-built incentive to “leak” food grains into the open market where they can sell the subsidised grains at higher rates. Moreover, research indicates that the current subsidy programme [incentivises farmers to produce cereals such as wheat and rice](https://www.epw.in/journal/2011/21/perspectives-cash-transfers-special-issues-specials/pds-forever.html) that the government procures for the PDS instead of other and often more nutritious coarse grains such as jowar, bajra, ragi, etc.  

Direct Benefits Transfers (DBTs) can ease this pressure on the system. By transferring money directly into the accounts of beneficiaries, the government could allow the beneficiaries to buy the food grains of their choice. Local grains such as jowar and bajra can then compete with rice and wheat on a level-playing field. These crops also have the potential to generate more income for farmers as they require less water and fertilisers, thereby reducing the production cost. Shopkeepers are also no longer incentivised to direct the grains into the open market as they get the market price from the beneficiaries. Moreover, with over 95 per cent population covered with Aadhaar and the increased financial inclusion in the past few years means that the government will be able to do DBT with ease and without leakages. 

While cash transfers improve accountability mechanisms for retailers, choice and quality of the produce, implementation of this mechanism can take time given our limited State capacity. In 2015, Government of India rolled out DBTs in three Union Territories—Chandigarh, Puducherry and Dadra Nagar Haveli—in place of in-kind TPDS benefits. A process monitoring study of these DBTs from 2016 to 2017 showed that even though the beneficiary preference for DBTs over in-kind benefits in these states grew from 35 per cent to 65 per cent, around [one in five beneficiaries reported not receiving the transfers](https://econweb.ucsd.edu/~kamurali/papers/Other%20Writing/20170905_UT_DBT_Report.pdf). 

Thus, instead of prescribing a single model for TPDS, we should allow beneficiaries to choose between in-kind benefits and cash transfers. Such a principles-based approach will improve the welfare of the beneficiaries by expanding their options. It will also strengthen the current TPDS as it will have to compete with the local grain market and other competitors for consumers. At the same time, we must be cautious in designing this system so that choice does not become woe for those who need it.

[Read More: Cash Transfers for Food](https://spontaneousorder.in/cash-transfers-for-food/)

* * *

**About Tarini Sudhakar**

Tarini studied History at Lady Shri Ram College for Women. She is a former Research Associate of the Centre for Civil Society.

## Markets are Leading the Fight Against COVID-19

Original: https://www.spontaneousorder.in/p/markets-are-leading-the-fight-against-covid-19

Author: Spontaneous Order

Published: 2020-03-24T18:05:24.000Z

Topics: free-markets, covid-19, private-innovation, markets-vs-government

> The number of people infected by COVID19 in India has crossed 500. Following the Janata Curfew on 22nd March, 75 cities in India are on total lockdown, allowing only provisioning of essential goods and services. People are hoping that the government wil..

**Summary:**

In India, with COVID-19 cases exceeding 500, the Janata Curfew on March 22, and 75 cities under total lockdown, markets are leading the fight against the pandemic by voluntarily supplying essentials like masks, gloves, sanitizers, food, and hospital equipment without government mandates. Grocery stores stock up on bread and eggs driven by profit incentives, responding to consumer demand effectively. Private firms acted swiftly: Ola and Uber suspended shared rides to promote social distancing; Hindustan Unilever, Godrej, and Patanjali reduced soap prices and increased production; Bengaluru biotechs MolBio and Xcyton offered cheaper testing kits; Cipla volunteered to manufacture three anti-viral compounds. These profit-motivated decisions enhance societal resilience through market coordination. The author contrasts this with inefficient government ration shops, where long queues and substandard goods prevail. Quoting Jeffrey A. Tucker, markets prove more reliable than government in crises, loving society 'more in the midst of a disease panic than ever before.' This demonstrates the classical-liberal case for markets' superior, voluntary response over state intervention.

**Key points:**

- Markets voluntarily supply COVID-19 essentials like masks, sanitizers, and food driven by profit incentives, without government orders.
- Private firms including Ola/Uber, HUL/Godrej/Patanjali, MolBio/Xcyton, and Cipla took proactive steps like suspending shared rides, cutting prices, offering cheap tests, and producing antivirals.
- Profit-guided market actions coordinate millions to build societal resilience more effectively than government mandates.
- Government ration shops would impose inefficiencies like long queues and poor-quality goods compared to dynamic markets.

**By Swati Singh**

* * *

The number of people infected by COVID19 in India has crossed 500. Following the [Janata Curfew](https://theprint.in/india/modi-announces-janata-curfew-on-22-march-urges-for-resolve-restraint-to-fight-coronavirus/384138/) on 22nd March, [75 cities in India are on total lockdown](https://www.livemint.com/news/india/coronavirus-update-75-cities-across-india-under-lockdown-full-list-across-states-11584931492672.html), allowing only provisioning of essential goods and services. People are hoping that the government will take enough steps to protect us all from this pandemic. However, markets are leading a significant part of the fight against COVID-19.   

Most of us are flooding the grocery stores trying to stock up on essential items. The masks, the latex gloves, sanitizers, food items and even the equipment being used to treat the ill in hospitals – all of these are provided by the markets without any decrees or orders from the government to do so. Our local grocery stores don’t get any order from the government to get more bread and eggs, but they do that because they know making these essential things available will make them more profit. The point here is that the markets provide what people want, both in times of crisis and during normal times.   

Just a few days after the coronavirus pandemic was declared, private institutions took measures to ease the fight against COVID19. [Ola, Uber](https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/ola-temporary-suspends-share-rides/articleshow/74735891.cms?fbclid=IwAR363zLfkb4H9UQal9Aj791R8CuuDpbpGl-6T_F7NTTcQXx9HgYE2Q7ZDww) suspended their shared rides temporarily in an attempt to encourage social distancing. Fast-moving consumer goods companies like Hindustan Unilever, Godrej, and Patanjali stated that they are helping fight the Covid-19 outbreak by [reducing soap prices](https://timesofindia.indiatimes.com/business/india-business/coronavirus-soap-makers-reduce-prices-increase-production/articleshow/74738106.cms?utm_source=facebook.com&utm_medium=social&utm_campaign=TOI&utm_content=om-bm&from=mdr&fbclid=IwAR2o7uzawNaLGlvpoUJlWgS4O_AO-TLkxun3-neKl9WWRr6txIY8SGNggEU) and ramping up production. Two Bengaluru-based biotech companies, MolBio and Xcyton, are offering to create testing kits for cheaper, which will benefit both the government and private labs. This will also expand the scope of diagnosis and ensure that India is ready to face the crisis with better technology and equipment. Indian Pharmaceutical giant Cipla [voluntarily came forward](https://www.thehindu.com/news/cities/Hyderabad/cipla-csir-iict-join-hands-for-covid-19-drugs/article31092286.ece?utm_campaign=socialflow&fbclid=IwAR28vbP8CwRCPtj6dexBC8WayhPB4OIIuWpyO4p96IkMSpZRzaKX-A6RlyE) to manufacture three promising chemical compounds with anti-viral properties to treat COVID-19.  

The interesting thing here is that none of these institutions was forced by the government to reduce prices, innovate for testing kits or suspend their services. They voluntarily made these decisions. Of course, for these firms, there are clear incentives and profit-making opportunities. However, all their efforts, even if guided in search of profits, make us more resilient as a society. This is the market at work, tirelessly coordinating the efforts of millions of people and providing us with what we need.   

Imagine if you were only allowed to buy goods from government-operated ration shops in this trying time. You would first have to find out how far this shop is from your house, when is it open, stand in long queues for hours and purchase only the standard, government-quality, goods. Would that be better?

The markets are more durable than ever, and there hasn’t been a better time to witness the same in action. As Jeffrey A. Tucker, the Editorial Director of the American Institute for Economic Research [puts it](https://www.aier.org/article/in-a-disease-panic-the-free-market-is-your-friend/) – “The truth is that the market loves you right now, more in the midst of a disease panic than ever before…When it’s the difference between health and sickness, life and death, the government is the last institution you want to trust.”

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## Why Ruling Party Loves Banning Auto-Ads?

Original: https://www.spontaneousorder.in/p/why-ruling-party-loves-banning-auto-ads

Author: Spontaneous Order

Published: 2020-03-23T18:55:19.000Z

Topics: free-speech, advertising-regulation, bureaucratic-overreach, political-hypocrisy

> Look at the ad below. Do you think it could be illegal to display this ad on an autorickshaw? In Delhi, the answer is yes. This story starts in June 2013 when the Shiela Dixit government in Delhi placed its latest guidelines for display of advertisement..

**Summary:**

The Delhi government's June 2013 guidelines, issued by the Sheila Dixit-led Congress administration ahead of the 2014 state elections, banned political, ethnic, religious, or sectarian advertisements on auto-rickshaws and taxis while mandating GPS/GPRS installation. These rules targeted Aam Aadmi Party's (AAP) innovative auto-rickshaw ad campaign, making auto drivers unintended victims of Congress-AAP rivalry. Auto unions challenged the content bans in the Delhi High Court, arguing that the Motor Vehicles Act 1988 only allows regulation of ad display, not content. AAP initially supported the drivers and criticized Dixit but hypocritically defended the guidelines during its tenure; in 2017, the High Court questioned the AAP government's pre-censorship of political ads in a democracy, leading AAP to merely lift the political ad ban. From a classical-liberal viewpoint, the guidelines lack logic—GPS tracking is unnecessary as number plates suffice—and impose arbitrary restrictions on Article 19(1)(a) free speech and expression. Existing Indian Penal Code provisions adequately address obscenity and hate speech, rendering further ad regulation unjustified. Seven years on, auto-walas remain trapped in bureaucratic discretion and party politics, losing livelihoods to protect ruling parties from competition.

**Key points:**

- Delhi's 2013 auto-ad guidelines banned political/religious ads and required GPS to suppress AAP's 2014 election campaign.
- Guidelines violate Article 19(1)(a) free speech; IPC already regulates obscenity and hate speech.
- AAP opposed the bans initially but defended them in power, removing only political ad prohibition after 2017 HC scrutiny.
- Auto-rickshaw drivers suffer economically as casualties of ruling party politics and arbitrary bureaucracy.

**By Swati Singh**

* * *

Look at the ad below. Do you think it could be illegal to display this ad on an autorickshaw? In Delhi, the answer is yes.

[

![](https://lh5.googleusercontent.com/NrV6flkARyZuxxebcBZkSolxHLA685psasqQ1YbLu1bug9vojfMawUNnoCXExI4n7NQiZBpmLaphb9G7WNVvk_fXP3XVAVWw-nkpoMM7zGgYX-I6SAr-aCnLJtBZdJmuiXHYQRlxXemG9Cc2kg)



](https://lh5.googleusercontent.com/NrV6flkARyZuxxebcBZkSolxHLA685psasqQ1YbLu1bug9vojfMawUNnoCXExI4n7NQiZBpmLaphb9G7WNVvk_fXP3XVAVWw-nkpoMM7zGgYX-I6SAr-aCnLJtBZdJmuiXHYQRlxXemG9Cc2kg)

This story starts in June 2013 when the Shiela Dixit government in Delhi placed its latest guidelines for display of advertisements on auto-rickshaws and taxis. These guidelines banned any ad with political, ethnic, religious or sectarian content. The most amusing requirement was a GPS/GPRS system installed in the auto-rickshaw.  

[

![](https://lh3.googleusercontent.com/CZ7qJsygrgBfi4a1qoXKnMSsenI-7pA2uMV04KccGzmi6PdMcj-w-AEgAkmRsN4iDEoNAuZWXgI5BKeFH9LHiZ8slPXKjmvpHXofTW_7I4nDSlWBKNsmKijX8_Ffsxd4reCDfEgo7MsMMCLpbw)



](https://lh3.googleusercontent.com/CZ7qJsygrgBfi4a1qoXKnMSsenI-7pA2uMV04KccGzmi6PdMcj-w-AEgAkmRsN4iDEoNAuZWXgI5BKeFH9LHiZ8slPXKjmvpHXofTW_7I4nDSlWBKNsmKijX8_Ffsxd4reCDfEgo7MsMMCLpbw)

One wonders about the need for such arbitrary guidelines but the motive of the government becomes clear when you understand the timeline of these decisions. The Sheila Dixit government formulated these guidelines during 2014 Delhi state elections when the Aam Aadmi Party did an autorickshaw advertising campaign. The *autowaalas* became unintended casualties in this party politics between Congress and AAP.

The [auto unions approached the HC](https://timesofindia.indiatimes.com/city/delhi/PIL-in-HC-against-ban-on-autorickshaw-ads/articleshow/40352066.cms) on the grounds that the Motor Vehicles Act 1988 allows the transport department to only regulate the display of ads, not the content.   

AAP publicly supported the demonstrations of the *autowaalas* of Delhi while [slamming Sheila Dixit for banning ads on autos](https://www.thehindu.com/news/cities/Delhi/kejriwal-slams-sheila-for-banning-ads-on-autos/article4801973.ece). But the blatant hypocrisy of Indian politics came to light when the Aam Aadmi Party too defended these guidelines during its tenure as the party in power. In fact, in 2017, the Delhi High Court posed a question to the AAP government about the need for [pre-censorship](https://www.collinsdictionary.com/dictionary/english/pre-censor) or prohibition of political advertisement in a Democracy. The AAP government later agreed to merely remove the ban on political advertisements.  

These guidelines fail to hold any water. First, there doesn’t seem to be a logical link between advertising and GPS. If tracking the vehicle is the motive, that can be done via number plates as well. This guideline seems to have been put in place only to discourage political competition.   

A blanket prohibition of all religious, sectarian and ethnic speech is an arbitrary restriction on the freedom of speech and expression guaranteed under Article 19(1)(a). Further, there are already sufficient provisions in the Indian Penal Code to regulate obscenity and hate-speech. There is no case for further regulation of advertisements.  

It’s been seven years since these guidelines were brought in place. Even the party that once stood with the *autowaalas* in protest of these guidelines is doing nothing now that they’re in power. Make no mistake, this isn’t a narrative about unreasonable guidelines. It’s about the ones at the bottom of the pyramid, the ones who have the most to lose in this battle and the casualties in this game of party politics; the *autowaalas*. This story highlights how the ones who lose this battle will always lose since they will always be at the discretion of the muddled bureaucracy of this country.  

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## SO Musing: Free Enterprise is Economic Democracy

Original: https://www.spontaneousorder.in/p/free-enterprise-is-economic-democracy

Author: Spontaneous Order

Published: 2020-03-20T14:50:19.000Z

Topics: free-enterprise, privatisation, fiscal-prudence, economic-reform

> On her visit to India in 1994, the apostle of free-market gospel Margaret Thatcher revealed her take on implications of economic freedom for prosperity. In a keynote speech delivered in Bombay, she stressed upon the necessity of economic freedom; the ne..

**Summary:**

Spontaneous Order shares Margaret Thatcher's 1994 keynote speech in Bombay, framing free enterprise as 'economic democracy' that empowers individuals, limits government power, and fosters prosperity through privatization and stock market sales of state companies. Thatcher argues capitalism is essential—not just for material gain but for unleashing human creativity and the business ethic to liberate people from poverty. The state's role must be limited yet strong in maintaining sound finances, currency, thrift, high savings, and strictly limited public spending, as politicians face temptations from interest groups. She criticizes state control for denying choice and responsibility, asserting it cannot be fixed by 'clever' bureaucrats. Highlighting Asia's economic miracles—driven by automation, instant technology transfer, high growth, investment, and trade despite global recession—Thatcher positions India advantageously with both established democracy and economic reforms, unlike Russia (democracy sans reform) or China (reform sans democracy). India's enterprising middle class and trading links ensure success if reforms persist, strengthening decisions through open debate.

**Key points:**

- Free enterprise functions as economic democracy by maximizing people's power and minimizing government's through privatization.
- The state must prioritize sound finances, currency stability, thrift, high savings, and limited public spending to counter interest group pressures.
- Privatization shrinks state control and enlarges individual choice and responsibility, rejecting bureaucratic claims to know best.
- India uniquely benefits from combining democracy and economic reform, bolstered by a capable middle class and global trade links.
- Asia's rapid growth, outpacing the world, results from technology transfer lifting millions from poverty.

**By Spontaneous Order**

* * *

*On her visit to India in 1994, the apostle of free-market gospel Margaret Thatcher revealed her take on implications of economic freedom for prosperity. In a keynote speech delivered in Bombay, she stressed upon the necessity of economic freedom; the need for fiscal prudence; the limited role of the state; and move towards privatisation. While extolling the Indian peculiarity of having both democracy and capitalism, she also pointed out the tension between the two and its implications for India’s economic trajectory ahead.*

*Below is the full keynote speech, published by the Forum of Free Enterprises in 1995 in the booklet form* –

Economic freedom is real freedom. Just as coercion exercised on economic grounds is no less real coercion. 

Free enterprise works because, like democracy, it gives real power to the people. Indeed it can be described as economic democracy. It limits the power of government, by maximizing the power of the people. It removes industry and management from the hands of the state by selling off companies and business to those who will buy them, mostly through the stock market. Free enterprise capitalism is a necessary – though not a sufficient – condition for political democracy itself. Perhaps we in business have been too slow to point out that capitalism is therefore not only about material things, it is about the human spirit and its creativity. In seeking to liberate people from poverty and servitude it is the business ethic in action which is the cutting edge of progress. 

**The Role of the State** 

The role of the State should be limited but strong to do those things which only governments can do. First government should be strong to keep the finances and the currency sound. 

We need to preach and practice the wisdom of thrift as a virtue in itself, and of high savings as necessary for high investment and that public spending must be strictly limited. This is common sense. Every businessman and housewife knows that they have to live within their income. The laws of arithmetic are not suspended merely because you are working in billions or because you are in government. But these things do not come naturally to all politicians. Interest groups are very strong and vociferous, particularly in the public sector, and there is a constant temptation to increase public spending to appease them or to postpone awkward decisions. 

**Privatising – Transforming Britain** 

A system like state control which is fundamentally bad because it denies people the power to choose and the opportunity to bear responsibility for their own actions, can’t be made good merely because it is run by ‘clever’ people who make the arrogant assertion that they ‘know best’ and that they are serving the ‘public interest’ – an interest which of course is determined by them. 

Privatisation shrinks the powers of the state and free enterprise enlarges the power of the people. 

**Asia – Great Expectations** 

The world has never seen such a rapid economic expansion as it is witnessing today. The age of automation has been even more radical than the age of mechanization. ‘Smart’ machines now transfer technology instantaneously from one country to another. Development which used to take years can be achieved in months. 

Hence the economic miracles in the countries of Asia, both large and small. A hurricane of change has swept across Asia, carrying millions out of poverty and bringing new hope. The people of the Asia Pacific are out-stripping much of the rest of the world in growth, investment, new technology and trade. 

Today the Asia Pacific region has the highest growth rates in the world in spite of the world recession. 

**India – Looking Ahead** 

What does all this mean for India, for her place in the wider world? 

Your influence and example are crucial to the future. While Russia has democracy but struggles for economic reform, China has economic reform but resists democracy. But India has the advantages of both economic reform and an established democracy. 

In some ways this may make reform even more difficult as every move is publicly debated and sometimes the arguments are distorted. Nevertheless, once the decisions are taken they are all the stronger because of the openness of parliamentary democracy. 

Also you have large, enterprising middle-class, with an enviable capacity to exploit the advance of science and to attract the requisite investment. Add to that your’ international trading links and it would seem from the outside looking in, that your success is assured. 

*The original booklet and the full text of the speech could be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=117599251.pdf).*

*[IndianLiberals.in](http://indianliberals.in/index) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

[Read more SO Musings](https://spontaneousorder.in/category/so-musings/)  

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Banning Commercial Surrogacy & Lives of Surrogate Mothers 

Original: https://www.spontaneousorder.in/p/banning-commercial-surrogacy-and-lives-of-surrogate-mothers

Author: Spontaneous Order

Published: 2020-03-18T19:52:29.000Z

Topics: surrogacy-regulation, bodily-autonomy, commercial-surrogacy, medical-tourism

> The proposed Surrogacy Bill has garnered a fair amount of discussion. Although surrogacy is an often-heard term, not many people understand its complexity in principle and practice. In the latest version of the draft, the government is proposing to remo..

**Summary:**

The Surrogacy (Regulation) Bill 2019 proposes banning commercial surrogacy in India, which has a $2 billion industry per a 2012 Confederation of Indian Industries study, allowing only altruistic surrogacy for infertile heterosexual couples. Author Aarat Pandya argues this distinction is morally incoherent: if surrogacy is permissible altruistically, it should be allowable commercially, as compensating for womb rental or embryo gestation is no different from paid egg donation for IVF. Banning commercial surrogacy will drive it underground, fostering black markets with middlemen who underpay surrogates and overcharge couples, leaving women without legal protections or recourse. Surrogates bear significant physical and psychological costs of pregnancy and birth without keeping the child, deserving fair remuneration as a voluntary choice over their bodies. Treating surrogacy like any medical service aligns with classical-liberal principles of individual autonomy and free exchange. The ban harms women by stripping legal safeguards, discourages medical tourism where India excels economically and medically, and presumes surrogates are purely philanthropic rather than rational actors seeking compensation.

**Key points:**

- Banning commercial surrogacy drives the practice underground, enabling middlemen to exploit surrogates without legal protections.
- Commercial surrogacy should be legalized as a compensated medical service akin to egg donation for IVF, recognizing surrogates' physical and psychological costs.
- The moral distinction between altruistic and commercial surrogacy is incoherent; if one is permissible, so is the other with payment.
- Legalizing commercial surrogacy upholds women's bodily autonomy and supports India's $2 billion surrogacy industry and medical tourism.

**By Aarat Pandya**

* * *

The proposed [Surrogacy Bill](https://www.prsindia.org/billtrack/surrogacy-regulation-bill-2019) has garnered a fair amount of discussion. Although surrogacy is an often-heard term, not many people understand its complexity in principle and practice. In the latest version of the draft, the government is proposing to remove several archaic provisions, including the five-year mandatory waiting period. However, the authorities are still justifying the removal of a considerable aspect of commercial surrogacy. India has a $2 billion surrogacy industry according to a [study conducted](https://www.livemint.com/Politics/iJaMugwI57XmKANE1juUnO/Cabinet-clears-bill-on-surrogate-motherhood.html) by Confederation of Indian Industries in 2012.   

Surrogacy is when a woman offers her womb either for sperm planting or placing a synthetic embryo. Generally, infertile heterosexual couples, queer couples, single or widowed persons, seek help from a surrogate to have a child. Currently, the Surrogacy (Regulation) Bill, 2019 “*permits when (surrogacy) is: (i) for intending couples who suffer from proven infertility; (ii) altruistic; (iii) not for commercial purposes; (iv) not for producing children for sale, prostitution or other forms of exploitation; and (v) for any condition or disease specified through regulations.*” The draft bill categorises surrogacy between commercial or altruistic, prohibiting one and allowing the other. This essentially means that a woman could use her womb for herself or charity only.  

What comes after a ban is black-market. Nevertheless, unlike murder, where any kind of murder is considered a crime; the vague distinction of morality between the altruistic and commercial surrogacy does not seem to make sense. Either both the actions are morally wrong or morally permissible. What can be done for free can also be done for money. Moreover, by allowing only the altruistic kind, it is presumable that most of the heterosexual couples would seek services from a surrogate mother disguised as altruistic. Since the surrogate need not be a close-aid (as recommended by the Rajya Sabha standing committee), there are higher chances of exchange of favours if not cash, also a dire possibility of a middleman. These middlemen are likely to increase the cost of surrogacy for needy couples and underpay surrogates. Since it would be illegal, surrogate mothers would not have any recourse or protection against the same.   

While the government has taken a step to draft a specific law for surrogacy, one must wonder why it is not treated like any other medical service. What is so different between surrogacy and donating eggs for in vitro fertilisation? Why is one permitted and another is not? Surely, surrogacy has much longer-term and involves much more participation from the surrogate but morally, they are the same act – helping people who cannot reproduce on their own.   

It is highly unlikely that most surrogate women are nothing but benevolent and philanthropic as our government thinks. It is fair for a woman to expect to be remunerated for the journey of motherhood if she is not keeping the child. Why would the government take that right away? There are great physical and psychological costs involved for a woman to give birth, why should we be against getting just compensation for it?

India is gaining prominence as an epicentre for medical tourism, and while some in India do not deem surrogacy a noble occupation, nothing is wrong with as long as a woman is doing it voluntarily. The ban on commercial surrogacy will discourage foreign visitors who see India as an economically viable and medically advanced option.   

The proposed law, while apparently helping women, will hurt them by taking all possible legal protection if they are involved in commercial surrogacy. It will take away their freedom of choice over their own bodies.   

* * *

**About Aarat Pandya**

Aarat is a Senior Communications Associate at the Centre For Civil Society, where his duties involve outreach, content production & management and ensuring our message reaches beyond our strategic horizons. Prior to this, Aarat has worked with various forms of communications specialisations like with political parties, social enterprises, corporate organisations and the government. He is passionate about youth affairs, education and foreign policy in the Indian subcontinent.

## Is Indian Justice Truly Blind?

Original: https://www.spontaneousorder.in/p/is-indian-justice-truly-blind

Author: Spontaneous Order

Published: 2020-03-18T19:25:14.000Z

Topics: equality-before-law, generality-principle, labour-discrimination, rule-of-law

> “Kanoon Andha Hota hai”, you must’ve heard this phrase more than once in movies or in dramatic representations of the legal system. Lady Justice is the generally used symbol of a just legal system. Represented by a blindfold, she is expected to be i

**Summary:**

The post argues that Indian justice is not truly blind, as laws often violate Article 14's guarantee of equality before the law by discriminating against specific groups. Lady Justice symbolizes impartiality, requiring laws to apply equally to all, from street vendors to celebrities. However, examples show otherwise: the Punjab Excise Act, 1914 bans men under 25 and women of any age from employment in places where liquor or intoxicating drugs are consumed, denying job opportunities to these groups despite allowing them to vote, join the army, or marry. In Maharashtra, a ban on dance performances in one- and two-star hotels and bars—sparing high-end venues like three-star hotels, gymkhanas, cinemas, and theatres—discriminated by income level, causing many women to lose livelihoods. The Supreme Court eventually lifted the ban, restoring jobs to 75,000 performers, but the damage to affected families was irreversible. From a classical-liberal viewpoint, such discriminatory laws undermine a just society. The solution lies in adopting the Generality Principle, ensuring laws apply equally to all groups without favoritism, essential for republican equality before the law.

**Key points:**

- Punjab Excise Act, 1914 discriminates by barring men under 25 and all women from working in liquor consumption venues, violating Article 14 equality.
- Maharashtra's dance bar ban targeted low-end hotels while exempting upscale venues, leading to job losses for lower-income women until Supreme Court intervention restored 75,000 jobs.
- Laws must embody the Generality Principle to apply equally to all, preventing discrimination and ensuring impartial justice.
- Article 14 mandates equal protection of laws for all persons in India, implying uniform application without special treatment.

**By Swati Singh**

* * *

“Kanoon Andha Hota hai”, you must’ve heard this phrase more than once in movies or in dramatic representations of the legal system. Lady Justice is the generally used symbol of a just legal system. Represented by a blindfold, she is expected to be impartial; not just in delivering justice, but also in the making of laws.  

One of the basic ideas behind what Lady Justice stands for is that the law should be equal for everyone. Article 14 of the Indian Constitution states that – *“The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India”.* Everyone in India, not just the citizens, is equal before the law and no one should have a special treatment. The Article also implies that any law that is being made must have an equal effect on all persons. For instance, if having a driving license is compulsory in order to be able to drive, then it will be compulsory for everyone ranging from a street vendor to a celebrity.  

But does this translate into practice in India? In reality, it seems like the blindfold is ineffective and the sword is rusted. There have been multiple instances when the lawmakers have not been entirely fair to all sections of the society while making laws.  

For example, the [Punjab Excise Act, 1914](https://haryanatax.gov.in/HEX/DownloadPDF?formName=%27/Acts/Excise/ThePunjabExciseAct_1914.pdf%27) says that men under 25 year of age and women of any age cannot be employed in places where liquor or intoxicating drugs are consumed by the public. So, men and women under 25 are allowed to vote, join the army, get married, but not work in a place where liquor is sold. By doing this, the lawmakers have completely eliminated an employment opportunity for a certain section of society. This is in clear violation of Article 14.  

In Maharashtra, a few years ago, a legislation was enacted that banned bar dancers in one and two-star hotels and bars. Due to this, a big number of women employed as dancers in these places lost their livelihood. Although, the interesting thing to note here is that the law banned any sort of dance performances, not just vulgar, in hotels having less than three stars but conveniently spared high-end rich hotels, gymkhanas, cinemas, drama theatres and auditoriums. So, if any sort of dance was happening in a high-end place, it was allowed, but if it happened in any other place, it was rendered illegal.   

This was clear discrimination based solely on income levels. After a drawn-out battle in the Supreme Court challenging this legislation, the [Supreme Court lifted the ban](https://www.hindustantimes.com/mumbai/dance-no-bar-in-mumbai-sc-restores-jobs-to-75-000-performers/story-gV0MiYBMoDpAmOG1W986cP.html) imposed on dance bars. But many women who were pushed to harsher lives to sustain themselves and their families might not have been able to return to the bars, let alone cope with the immediate crisis this ban put them in.  
Drawing from these examples, we can say that justice has not been blind in India for decades. While one wonders about a big picture solution to having laws applied equally to all, one thing that can help us is the [Generality Principle](https://ccs.in/generality-principle). The principle refers to the political belief that laws created by the state need to apply equally to all groups of people in order to avoid any form of discrimination. This is essential in any republic; to maintain equality before the law and establishing a just society.

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## SO Musing: Remembering Dr Ambedkar

Original: https://www.spontaneousorder.in/p/remembering-dr-ambedkar

Author: Spontaneous Order

Published: 2020-03-13T16:37:53.000Z

Topics: indian-liberalism, dr-ambedkar, constituent-assembly, uniform-civil-code

> Of late, Dr Ambedkar has emerged out of oblivion to reclaim a prominent space in India’s public life, and rightly so. As a political leader, social reformer, and author, Ambedkar interacted with a range of other leading figures of his times, all belongi

**Summary:**

Spontaneous Order republishes a 1992 reminiscence by liberal politician Minoo Masani on his interactions with Dr. B.R. Ambedkar, highlighting their shared classical-liberal pedigree that influenced India's founding. Masani first encountered Ambedkar's intellect as a student at Elphinstone College, reading his book 'The Problem of the Rupee,' which argued for pegging the rupee at 1 shilling 6 pence—contrary to the common Indian business view of 1 shilling 4 pence—a position Masani endorsed in his B.A. economics exam, earning high marks from Ambedkar as the examiner. They later collaborated in the 1947 Constituent Assembly, where Ambedkar played a pivotal role in drafting the Constitution. Alongside Mrs. Hansa Mehta, Masani and Ambedkar signed Minutes of Dissent advocating a Uniform Civil Code and making free compulsory primary education a fundamental right enforceable by law, rather than a mere Directive Principle, against the majority view. Masani proudly recalls their 'idealist' stance, as noted by Dr. K.M. Munshi. The piece underscores Ambedkar's resurgence in public life and the liberal tradition that shaped the nation, countering pseudo-socialism.

**Key points:**

- Minoo Masani endorsed Ambedkar's argument in 'The Problem of the Rupee' for pegging the rupee at 1 shilling 6 pence and received high exam marks from Ambedkar as examiner.
- In the Constituent Assembly, Masani and Ambedkar dissented with Mrs. Hansa Mehta for a Uniform Civil Code.
- Masani and Ambedkar also pushed to make free compulsory primary education a fundamental right, not just a Directive Principle.
- The reminiscence reflects the shared Indian liberal tradition that influenced the Constitution.

**By Spontaneous Order**

* * *

*Of late, Dr Ambedkar has emerged out of oblivion to reclaim a prominent space in India’s public life, and rightly so. As a political leader, social reformer, and author, Ambedkar interacted with a range of other leading figures of his times, all belonging to different ideology and political camps.*   

*Produced below is a short article by the liberal politician Minoo Masani reminiscing his interactions with the Doctor. Masani had the chance to read Ambedkar’s work on Indian finance in his college days and was also examined by him. Next, they worked together in the Constituent Assembly. On the issue of Uniform Civil Code, Masani and Ambedkar were on the same page though their efforts didn’t come to fruition. Masani’s admiration for Ambedkar’s intellect and service to the nation is clearly reflected in the piece. To us, Masani’s recollection piece is a reflection of the shared pedigree of Indian liberalism which went on to shape the nation.*     

Recently Dr. B.R. Ambedkar’s 35th death anniversary was celebrated in Bombay with great eclat.  

My path crossed Dr. Ambedkar’s at two stages of my life. One was when I was a student of economics at Elphinstone College and I read Dr. Ambedkar’s excellent book, “The Problem of the Rupee”. The book was both readable and sound. The Common Indian point of view based on the businessman’s interests was that the rupee should be pegged at 1 sh 4 d. I happened to agree with Dr. Ambedkar who took the other view espoused by the British Government that the rupee should be pegged at 1 sh 6 d.  

When I appeared for the B.A. examination, my economics paper contained a question on this issue. I naturally wrote in favour of Dr. Ambedkar’s view on the subject. I did not know then that he would be the examiner. The result of this accident was that my paper was very well marked by him!  

It was not till 1947 when I was a Member of the Constituent Assembly of India that I came across Dr. Ambedkar in person. He was a very active member of the Constituent Assembly and our Constitution owes a lot to his labours.  

He and I were both members of the Advisory Committee on Fundamental Rights. There were several issues of a progressive nature when Dr. Ambedkar and I did not have our way. In the company of Mrs. Hansa Mehta, we therefore signed Minutes of Dissent to the official line. As far as I can recall two of the issues were a Common Civil Code and making free and compulsory primary education a fundamental right enforceable by law and not merely a Directive Principle as was the majority view.  

Dr. K.M. Munshi refers to this in his book on the subject and describes us as the three idealists which I suppose we were. I am very proud that I was in the distinguished company of Mrs. Hansa Mehta and Dr. Ambedkar.  

*Published in the January-March, 1992 issue of the Freedom First magazine, the original text could be accessed [here](http://www.freedomfirst.in/uploads/issues/pdf/412.pdf). (page 23)*

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

To read more about Minoo Masani, click [here](https://spontaneousorder.in/minoo-masani-from-socialism-to-liberal-swatantra-party/).

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Homi Mody’s Liberalism: From Pro-Business to Pro-Market

Original: https://www.spontaneousorder.in/p/homi-mody

Author: Spontaneous Order

Published: 2020-03-12T12:26:42.000Z

Topics: swatantra-party, indian-liberals, pro-business, economic-nationalism

> On the ideological inclinations of Indian business houses in the colonial era, Political Scientist Stanley Kochanek makes an interesting generalisation. The Bombay-based business houses sought to cooperate with the British Raj while the Marwaris were mo..

**Summary:**

Homi Mody, a Parsi businessman and constitutionalist liberal, represented Bombay business interests during the colonial era, advocating protectionism, tariff protections, and economic nationalism against free-market arguments, as seen in the Mody-Lees Pact cartelizing textiles and his FICCI speeches dismissing consumer interests. Influenced by mentors like Pherozeshah Mehta, he prioritized constitutionalism over Gandhian mass politics, cooperating with the Raj while protesting select policies like the Simon Commission. Post-independence, amid rising state socialism via the 1948 Industrial Policy Resolution, Second Five-Year Plan, and license-permit Raj, Mody shifted critically, attacking excessive regulations, planning ambitions, and Nehru's foreign policy in 1953-1965 speeches. He joined the Swatantra Party in 1959 as treasurer, aligning with Rajaji and Masani to champion economic freedom, democratic principles, and pro-Western stances against Congress dominance. From the classical-liberal perspective, Mody's evolution from pro-business protectionism to pro-market opposition reflects pragmatic adaptation to statist threats, maintaining his core liberal instincts and wit amid risks to business ties.

**Key points:**

- Homi Mody championed protectionism and economic nationalism in colonial legislatures, criticizing free-trade consumer arguments as bogeys against national industries.
- Post-1947, Mody criticized the license-permit Raj, labor laws, and overambitious Five-Year Plans for stifling private enterprise.
- As Swatantra Party treasurer from 1959, Mody publicly opposed Congress planning failures, socialist tones, and non-aligned foreign policy.
- Mody's shift from pro-business to pro-market liberalism stemmed from practical responses to India's statist turn, guided by unchanging constitutionalist convictions.

**By Sanjeet Kashyap**

* * *

On the ideological inclinations of Indian business houses in the colonial era, Political Scientist Stanley Kochanek makes an interesting generalisation. The Bombay-based business houses sought to cooperate with the British Raj while the Marwaris were mostly aligned with the Gandhian, nationalist Congress. The businessman cum politician Homi Mody fell in the former faction. Temperamentally liberal and a constitutionalist, Homi Mody straddled the public life in both colonial and Independent India as a member of two outsized minority groupings, *i.e.* big business and Parsis. Mody’s relative obscurity in all the flavours of the “idea of India” warrants a novel approach towards engaging with India’s past.

A brief career sketch of Homi Mody would help make the point clear. In the political domain, he was the member of Indian Legislative Assembly (1929-43), Viceroy’s Executive Council (1941-43), the Constituent Assembly (1948-49); a participant in the First Roundtable Conference (1930) to represent the Indian commerce and industrial interests; a delegate to the ILO Conference (1937) in Geneva; an appointed governor of Bombay (1947); and the Governor of UP (1949-52). In the business domain, he was the president of the Bombay Mill Owners’ Association, the Indian Merchants Chamber, and the Employers’ Fund of India; the chairman of the Associated Cement Companies and the Central Bank of India; a founder of the Indian Banks’ Association; and a close aide to the House of Tatas.

Homi Mody’s politics during the colonial period was limited to the domain of the legislature and civic activism. He wasn’t associated with any political party and mainly served the interest of the Bombay business. The British policy of functional representation in the assembly ensured his membership in the legislative body. In this regard, he stood out from the Congress nationalists, Communists, the Muslim League, and Hindu Mahasabha politicians who indulged in the politics of masses. In fact, Mody often came at the receiving end of the brickbats of Congress politicians and the nationalist press for his close association with the Raj.

As the Indian nationalist triumph in 1947 has come to guide history-writing, political figures like Mody remain marginalised because their roles don’t fit in the grand narrative of the Congress nationalist struggle. However, the colonial period saw varied “Indian” actors, strategies, and interests at play that didn’t necessarily conform to Congress nationalism but deserve due recognition. Mody’s politics as such could be categorised as liberal, albeit with certain caveats.

Mody’s biographer called him a liberal by instinct in the mould of Pherozeshah Mehta. Mehta was also his political mentor, argues his biographer. Interestingly, both Mehta and Mody were Parsis who came to dominate the Bombay municipality. During his long stint with the Bombay municipality, Mody led the Progressive group against the Congress nationalists. His focus mostly lay on addressing the administrative issues plaguing the city. In the early 1920s, he was an active advocate of Home Rule. In 1928, he protested against the appointment of an all-white Simon Commission. Later in 1943, he would resign from the Executive Council as a protest against the Viceroy’s failure to release an ill Gandhi on fast. But, his belief in constitutionalism made him averse to the Gandhian methods and philosophy. In this sense, he was close to the liberals like Sapru and Sastri. But, he wouldn’t join the National Liberal Federation because they were too “spineless” and vacillating for him.

In contrast, Homi Mody’s interests compelled him to advocate for the business community with a decisive fervour, largely on account of his oratorical skills. His pithy speeches laced with witty quips would receive special mention in the press. Not to mention, they also landed him in unsavoury controversies.

It is in his advocacy of Indian industrial interests that Mody takes an illiberal turn. His constant prodding for tariff protection, calls for serving’ national interest’, criticism of ‘consumers’ interest’ arguments, cartelisation of the textile market based on the Bombay-Lancashire collusion in the Mody-Lees Pact, etc. perfectly fits in the framework of pro-business policy. In fact, on his retirement from the chairmanship of the Bombay Mill Owners’ Association, the Indian Textile Journal called him “an ardent protectionist” in its glowing tribute! In the wake of heated assembly debates, Mody would champion economic nationalism to counter the free-market policy. For instance, at the annual meeting of the FICCI in February 1930, he moved a resolution favouring the Coastal Reservation Bill and hit out at the opponents:

*“Somehow or other, whenever national industries of the country were going to be protected, this bogey of consumer’s interests was trotted out as if these people whose Business it was to throttle the economic progress of the country were all the time doing so because they felt for the dumb millions of the country and poor inarticulate and unfortunate consumers.”*

Today, Homi Mody’s attitude may come as a surprise to Indian liberals who see him as one of the founding members of the Swatantra Party, featured on the [Libertarianism](https://www.libertarianism.org/publications/essays/whither-indian-planning/) blog. But, the colonial-era liberals were the champions of economic nationalism. Gokhale argued for the infant industry protection; Dadabhai Naoroji propounded the drain of wealth theory; Justice Ranade criticised the conservative statesmen for sacrificing Indian interests in the name of free trade. Like the earlier group of liberals known as the Congress moderates, Mody sought to tread a fine line between the full-blown nationalism and cooperation with the Raj. Mody held the demand for dominion status desirable; supported the Hindu Child Marriage Bill; and approved of the federal scheme during the first Roundtable Conference. He was also an enthusiastic supporter of the 1918 Montagu-Chelmsford reforms and the 1935 Government of India Act. In these regards, he was no different from his liberal predecessors.

The making of the Indian Republic brought with it uncertainty as the state-business relation was open for negotiation and reshaping. The provision for the universal franchise came along with an end to the functional representation. In terms of economic policy, the state-led centralised planning was seemingly poised to play a significant role, as evident from the constitution of the [National Planning Committee](https://www.jstor.org/stable/pdf/312676.pdf/) in 1938.  The capitalist tycoons made a pact with planning-driven development. They came with their own version – the Bombay Plan of 1944. Mody was no exception. He “whole-heartedly welcomed the appointment of an Advisory Planning Board” by the interim government in 1946. Soon followed the December 1947 Tripartite Industrial Conference, with the state, industrialists, and labour being the parties. The outcome was the Industrial Policy Resolution of 1948. The resolution, writes Shankkar Aiyar, “paid obeisance to Gandhian thought, was socialist in tone and business-friendly in content.” The respite, however, was short-lived.

In February 1953, Homi Mody attacked the government policy towards the private sector for the first time. In his speech to the Employers’ Fund of India, he criticised “the flow of labour legislation, irksome control over profits, production and distribution.” In January 1956, he was part of the delegation of industrialists to the PM Nehru. In an off-the-record meeting, he pointed to the deviations already made from the 1948 IPR and drew attention to the difficulty of doing business in the license-permit Raj.

The arrival of the Second Five-Year Plan in 1956 entailed full-blown state domination of the economy as the Mahalanobis model sought to develop India in its image. Homi Mody criticised the Plan for being too ambitious in the wake of constrained resources. Mody’s discontent was shared by a bunch of public-spirited professionals and leaders. BR Shenoy was the part of the advisory committee of the economists to the Second Five Year Plan and had written a [note of dissent](http://indianliberals.in/~_admin/pdflanguage?id=2002251069.PDF) to the proposed measures. Rajaji’s [columns in the Swarajya](http://indianliberals.in/~_admin/pdflanguage?id=477576353.pdf) were increasingly turning critical of the centralisation in both economy and polity. Minoo Masani was [battling the communist](https://spontaneousorder.in/minoo-masani-from-socialism-to-liberal-swatantra-party/) propaganda in the public sphere with his Democratic Research Service, Indian Committee for Cultural Freedom, and Freedom First magazine. It probably was their close association with the Tatas that brought Mody [in contact](https://www.livemint.com/Opinion/AL1dGwrVLENYQm0YhuGXFI/Unaffiliated-the-case-of-1957.html/) with Masani.

The incorrigible Masani persuaded Homi Mody and a few other friends to fight the 1957 general election. The idea was to form a grouping of independent parliamentarians to challenge Congress domination. Mody lost to the local Congress candidate and only Masani managed to reach the Lower House. The defeat, however, didn’t dampen Mody’s attacks on government policies. For Homi Mody, excessive regulation and increased outlays on planning posed a threat to economic freedom inherent in a democracy. He would use the business organisations’ platform to voice his criticism.

The political consolidation of disparate oppositional voices was enabled by the [1959 Congress Resolution at Nagpur](https://www.epw.in/system/files/pdf/1959_11/4-5-6/the_nagpur_resolutionagrarian_organisation_pattern.pdf) proposing cooperative farming. The resolution came out in January, and in the next month, Homi Mody stressed the need for a new party. The enterprising Masani was on the task and managed to persuade Rajaji to come on the board. He had also approached JP though the venerable Gandhian declined on the ground of his retirement from party politics. With Rajaji in charge, the formation of the Party was announced publicly in a 4th July 1959 meeting. Masani wrote to Mody on 19th June offering a position in the organising committee. Mody accepted the offer and came on board as the treasurer.

Pundit Nehru and other detractors of the Party called it a party of frustrated old people championing the reactionary and business interests. A 1967 [analysis](https://books.google.co.in/books?id=0v0KFAAQCLkC&printsec=frontcover#v=onepage&q&f=false) of political donations, however, shows that the Congress received almost thrice as much from the business houses than the Swatantra. Political scientist Howard Erdman has also pointed out the difficulty for the Swatantra party in [attracting donations](https://archive.org/details/swatantrapartyin00erdm/mode/2up) from the business houses. No less than Rajaji [bemoaned](https://spontaneousorder.in/so-musing-pro-market-policies/) the unfair charge: “Calumny has had a start, and it keeps on maintaining the falsehood that the Swatantra Party is a rich men’s lobby. The rich men know where to go; they go to the Party in power.”

As a member of the “inner circle” of the Party, Homi Mody mostly addressed the public meetings criticising the economic and foreign policy of the government. For instance, in an article published in 1965 by the Forum of Free Enterprise, he criticised the continued infatuation with planning despite repeated failures:

*“Agricultural and industrial production is stagnant—there have even been signs of a recession—and there are shortages in practically every commodity and service. But that does not seem to dampen the enthusiasm of the Planners who, as soon as a plan is nearing its end, are ready with another.”*

Homi Mody enunciated the Swatantra principles in terms of democratic freedom, social justice, and efficient administration. In the domain of foreign policy, Mody and the Party both advocated a pro-western stance and were critical of the NAM posturing. In the wake of China’s India war in 1962, Homi Mody criticised Nehru’s conduct, “Our so-called neutrality has brought us very few friends, and it is time the Prime Minister stopped airing his concepts of international diplomacy which have landed us in so many difficulties.” In one of his public speeches, he also criticised the Defence Minister VK Menon’s decision of continuing the support to China for its UNSC membership. He demanded the withdrawal of the Indian ambassador to China; resignation of the Defence Minister; and constitution of a National Defence Council to enable effective decision-making for the war.  

For all his eloquent witticism, Homi Mody’s role in the Party seemingly was limited as he catered to the westernised, English-speaking, urban constituency of business interests. Nonetheless, it is no unremarkable feat for him to go against the grain when opening up against the government could do real damage to his personal business interests. It becomes more evident when putting in the context of his earlier moderate conduct in the Raj years, maintaining a delicate balance between the colonial administration and the Congress nationalists. What, however, explains the transition of the temperamentally liberal Mody from being a pro-business to a pro-market politician? Mody’s biographer suggests an answer. The political philosophy, in Homi Mody’s case, was guided by a sense of practicality that sought to gain concession without consternation. As the broader context of the political economy changed, Mody’s response invariably varied. What remained constant, though, was his liberal conviction and sense of humour.

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## What Should the Role of Government be in Education?

Original: https://www.spontaneousorder.in/p/what-should-the-role-of-government-be-in-education

Author: Spontaneous Order

Published: 2020-03-11T15:23:23.000Z

Topics: education, school-choice, government-regulation, rte-act

> Today the government is present at every stage of the Indian education sector. It is not just a mere regulator in the sector but also a prominent player as around 74% of total schools in India are government schools (UDISE). This statistic also poses a ..

**Summary:**

The Indian government dominates education as both provider and regulator, with 74% of schools being government-run (UDISE), raising concerns about self-regulation fairness. Despite a 97.2% primary gross enrolment ratio (ASER 2018) driven by the RTE Act mandating free education for ages 6-14, outcomes remain poor: government schools often flout infrastructure norms without repercussions—38% lack classrooms, 43% have no libraries or girls' toilets (CPR 2011)—while private schools face strict compliance for recognition. India ranked 72/74 in PISA 2009, prompting boycott amid no improvement efforts. Government focuses on inputs/outputs over outcomes, lacking accountability. From a classical-liberal view, education thrives via markets, not state omnipresence; affordability, not access, is the issue. Direct cash transfers or benefit transfers empower parental choice, fostering demand-supply balance, as proven in Chile, Ireland, Sweden. Government should exit as provider, restrict to fair regulation, ending biased rules that plague quality and accountability.

**Key points:**

- Government runs 74% of Indian schools yet evades its own RTE infrastructure norms, unlike penalized private schools.
- Shift from inputs/outputs to outcomes reveals poor performance, like PISA 2009's near-bottom rank.
- Implement direct cash transfers to parents for school choice, emulating successes in Chile, Ireland, Sweden.
- Restrict government to fair regulation, letting markets deliver affordable, accountable education.

**By Swati Singh**

* * *

Today the government is present at every stage of the Indian education sector. It is not just a mere regulator in the sector but also a prominent player as around 74% of total schools in India are government schools (UDISE). This statistic also poses a larger question: is it fair for a market player to regulate itself?

The Indian education system is one of the largest in the world. As per the Annual Status of Education Reports (ASER), in 2018 we stood at a 97.2% gross enrolment ratio (G.E.R.) for primary education. [The Right to Education](https://spontaneousorder.in/right-to-education-vs-right-to-educate/) (RTE) Act has a vital role to play in this, as it makes free and compulsory education a fundamental right for children (age 6-14). It is undoubtedly a lucrative statistic to quote. However, merely achieving full enrolment in primary educational institutes does not translate to a successful education system.

Under the RTE there are certain rules & regulations for a private school like conditions dictating the size of land, ground and boundary walls, etc. On paper, these norms also apply to public schools and it’s under the mandate of the state government to ensure that public schools follow them, but there are no repercussions to non-compliance, whereas, for private schools, their recognition depends on this compliance. The 2011 report by the Centre for Policy Research highlighted that 38% of government schools did not have the prescribed number of classrooms, 43% did not have libraries and 43% had no girls toilet. 

There have been no visible efforts on the government’s part to measure the outcomes of schools. They have only focused on outputs, and even in terms of outputs, the government schools haven’t been doing well. In 2009 India secured the third rank from the bottom (72 out of 74) in the Programme for International Student Assessment (PISA) test. The Indian government henceforth boycotted its participation in this survey on many namesake grounds but intrinsically the fear was of not rising up the ranks as no provisions were made to improve the outputs.

Government advocates the need for public institutions in education as they are affordable and provide access to all. However, the education system is rigged as there are no proper accountability mechanisms in place. Education isn’t something that can’t exist without the government in place. The market is fully capable of providing it and thus the contention isn’t over access; it’s over affordability. To solve this problem, the government can focus on Direct Benefit Transfers or Direct Cash Transfers to beneficiaries. Instead of reducing/eliminating the price of a commodity, if you give the people the power to purchase it, a healthy balance of demand and supply of education can be maintained. With this money, people can then choose which school they want to send their child to, instead of being forced to send their children to substandard government schools. This sort of system promotes choice and solves the problem of affordability. It has been advocated by many economists and has been a success in many countries like Chile, Ireland, Sweden, etc.

One of the best ways to improve the education scenario in India is to stop treating education as a public good and [let the market function](https://spontaneousorder.in/wheres-education-in-india-headed/) on its own. The government trying to be omnipresent is only plaguing the education sector with worse output, no accountability, poor quality education and above all- biased rules of the game. 

It would be a boon for everyone if the government restricted its role in this sector as a fair regulator and not a player.

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## SO Musing: Not a Rich People’s Lobby

Original: https://www.spontaneousorder.in/p/not-a-rich-peoples-lobby

Author: Spontaneous Order

Published: 2020-03-06T11:30:26.000Z

Topics: swatantra-party, c-rajagopalachari, pro-market-policies, crony-capitalism

> The detractors of the Swatantra Party, PM Nehru included, used to dismiss it as a reactionary party serving the business interest. The party’s advocacy of pro-market policy (competition, low entry barrier, less taxation, easy regulation, etc.) were dism

**Summary:**

In a 1968 article, C. Rajagopalachari (Rajaji) defends the Swatantra Party against accusations from detractors like PM Nehru that it serves as a 'rich people’s lobby' for Bombay business houses. Rajaji argues that Swatantra promotes pro-market policies—healthy competition, incentives for self-interest serving the nation, low entry barriers, reduced taxation, and lighter regulation—to foster economic progress for all, not cronyism. He criticizes government management as inefficient, run by uninterested officials or creating monopolies for favored licensees who prioritize profits over public good. Big businessmen are unreliable allies, often supporting tariffs, import bans, and competition restrictions for personal gain, acquiescing in controls out of timidity, contributing to capitalism's self-destruction. In India's parliamentary democracy, where the 'illiterate' govern the 'illiterate' not for their benefit, Swatantra seeks electoral strength to hasten truth's victory over socialist illusions. Its push for tax and public expenditure cuts boosts savings and productive investment for national welfare. The post highlights this classical-liberal distinction's relevance today in India's liberalized yet cronyist, stagnant economy.

**Key points:**

- Swatantra Party advocates market-driven competition and incentives to generate prosperity for the entire nation, countering claims it serves only the rich.
- Big businesses often support government restrictions like tariffs and controls for their own interests, betraying true market liberalism.
- Government management creates inefficient monopolies for favorites, while Swatantra pushes for reduced taxes and spending to spur savings and investment.
- Electoral success is needed to overcome 'illiterate' governance and implement pro-market principles for India's progress.

**By Spontaneous Order**

* * *

*The detractors of the Swatantra Party, PM Nehru included, used to dismiss it as a reactionary party serving the business interest. The party’s advocacy of pro-market policy (competition, low entry barrier, less taxation, easy regulation, etc.) were dismissed as masking the interests of the Bombay business houses. It fell upon C Rajagopalachari to lay out the difference between pro-business and pro-market policies in an article published on July 6, 1968. In the article, Rajaji laid out the need for a market-driven economy to generate prosperity for all; took dig at big businesses which had a vested interest in maintaining socialist controls; and decried the lack of nuance in the public discourse to make the distinction between freedom and cronyism.*

*Rajaji’s advocacy of market capitalism has bearing today for a relatively liberalized but still crony and stagnant Indian economy. Produced below is the full text of the article-*

There can be nothing more untrue than the notion that still persists among people who ought to be better informed but who do not care to enquire, that the Swatantra Party works for rich people. The Swatantra Party works to propagate truth, to educate people who have undertaken the difficult tasks of democracy in the truth that economic progress rests on healthy competition and on the incentives that make people work for their own advantage while also serving the nation. The party works to make people see that management by Government means management by inefficient and uninterested officials or the creation of monopolies for favoured licencees who are interested in making more for themselves than for their customers or for the general public. 

The Swatantra Party finds some help from some moneyed individuals because it has to find it somehow. But these people give help, not to win politicians to serve their personal or group interests but because they are convinced that the economic principles advocated by the Swatantra Party are correct principles and will contribute to the national good. But there is nothing harder than to get money from wealthy folk even for a good cause which they appreciate and accept as right in principle. The Swatantra Party has learnt, as libertarians have learnt in other countries, those big businessmen cannot be relied upon as good allies in the battle against government’s encroachments. Businessmen will often advocate tariffs, import prohibitions and restrictions on competition because they think rightly or wrongly that these interventions will be in their personal interest or in the interest of their companies, and are not concerned whether they may be at the expense of the general public. Many businessmen do not realize or reflect on what the actual consequences will be of the particular measures they propose or support. They do not perceive the cumulative debilitating effects of growing restrictions on human liberty. 

Most often businessmen acquiesce in controls out of sheer timidity. In the capitalistic system, there is a tendency towards self-destruction. Big businessmen facing direct attack display much cowardice. Truth must and will triumph at last. But this may take far too long a time for the national economy to wait. We want success in the elections and resulting strength in the State and Central legislatures in order to hasten the victory of reality over illusion. Parliamentary democracy has made this necessary, because it is a form of government in which the relatively ill-informed get power, and in India, this takes a very acute shape. In fact, without disrespect, I may say the Government in India is nearly as illiterate in the effective sense, as the electorate is in the ordinary sense. It is Government of the illiterate by the illiterate but unfortunately not for the illiterate. The national good can be served only by those who are truly educated and are motivated not by a party or personal interests but by an ardent desire to lift the nation up from poverty and bankruptcy to solvency. 

Calumny has had a start and it keeps on maintaining the falsehood that the Swatantra Party is a rich men’s lobby. The rich men know where to go; they go to the party in power. “Be thou as chaste as ice, as pure as snow, thou shalt not escape calumny.” I make bold to assert that the Swatantra Party has never once stood up for untruth or to help any single rich exploiter at the cost of justice or fair play. The Party has stood for reduction of taxes and for reduction of public expenditure. This is because such a reduction is good for the nation since it increases savings and productive investment of such savings. The Swatantra Party’s principles and the policies it commends are the only policies and principles that can help general welfare and national progress.

The original text could be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=804797230.pdf).

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.* 

To read more about C. Rajagopalachari, [click here](https://spontaneousorder.in/rajaji-relevance-to-todays-politics-of-the-right/).

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## For Farmers, is Suicide the Only Way Out?

Original: https://www.spontaneousorder.in/p/farmers-suicide

Author: Spontaneous Order

Published: 2020-03-05T17:29:58.000Z

Topics: farmers-suicides, agricultural-reform, land-markets, labor-mobility

> Even as farmers’ suicides have decreased over the last few years, the continued incidents highlight the distress in the agriculture sector and the rural economy. It is statistically true that the farmers as a whole commit fewer suicides than other socia

**Summary:**

Even as farmers’ suicides have declined, they highlight distress in Indian agriculture due to unprofitability and lack of exit options, exacerbated by regressive regulations—a classical-liberal critique of state intervention trapping farmers. Key causes include small landholdings limiting scale and technology adoption, resulting in yields half or less of China's for paddy, wheat, cereals, and pulses per hectare. NABARD data shows average monthly income for agricultural households at Rs. 8,931 in 2016-17, with only Rs. 3,140 from cultivation, despite subsidies, loan waivers, and support prices. A CSDS survey of 5,000 households found 76% willing to quit farming, as the sector employs half the population but contributes just one-sixth of GDP and can sustain only 14 crore livelihoods per government admission. Regulations prevent leasing or renting land, selling to non-farmers in most states, or converting to non-agricultural use, blocking mobility amid a dire job market. The author argues suicide becomes the only perceived exit unless regressive policies are liberalized to free land markets and enable livelihood shifts.

**Key points:**

- Indian farmers' average monthly income from cultivation is only Rs. 3,140 despite heavy government subsidies.
- 76% of surveyed farmers want to quit farming, as agriculture cannot sustain half the workforce.
- Land regulations prohibit leasing, selling to non-farmers, or changing agricultural land use, trapping farmers.
- Reforming regressive land policies is essential to allow farmers to exit unprofitable agriculture and access better opportunities.

**By Sudhanshu Neema**

* * *

Even as farmers’ suicides have decreased over the last few years, the continued incidents highlight the distress in the agriculture sector and the rural economy. It is statistically true that the farmers as a whole [commit fewer suicides](https://www.livemint.com/news/india/the-geography-of-farmer-suicides-11579108457012.html) than other social groups such as housewives, professionals or unemployed youth. However, that is no reason to ignore the issue.  

**Why do farmers commit suicide?** 

For urban youth, the causes of suicides are well understood. The trials and tribulations of modern urban life can lead to undue stress leading people to make the desperate decision to commit suicide. Unlike the urban population, overall indebtedness and the agrarian crisis are often cited as a reason for suicide among farmers and farm labourers. However, one of the key factors behind farmers’ suicide is the lack of an alternative livelihood. 

**Farming is not profitable**

In India, deriving basic sustenance from agriculture is increasingly difficult. Most Indian farmers have small plots of land for farming, on which it is hard to scale up the operations or utilise modern technology due to cost barriers. Farm yields in India are much lower compared to the rest of the world. Compared to China, India produces half or less of paddy, wheat, cereals, and pulses for each hectare of farmland. 

Further, farm incomes are remarkably low. The [NABARD All India Rural Financial Inclusion Survey](https://www.nabard.org/auth/writereaddata/tender/1608180417NABARD-Repo-16_Web_P.pdf) observed that the average monthly income for agricultural households was merely Rs. 8931 in 2016-17. Out of this, the income from cultivation is only Rs. 3140. And these figures are the average; given the economic disparities in India, it is likely that a handful of farmers are doing well while the rest are barely able to have two square meals per day. These figures are despite successive governments doling out subsidies, loan waivers, higher support prices, and other forms of government support. 

**Farmers want out**

Most farmers in India want to quit farming. In a survey of 5000 farm households conducted by the Centre for Study of Developing Societies, 76 per cent of respondents [expressed willingness to quit farming](https://www.downtoearth.org.in/news/indias-deepening-farm-crisis-76-farmers-want-to-give-up-farming-shows-study-43728). As agriculture employs about half of the population and contributes to only about one-sixth of India’s; farmers must move out of agriculture if they want to have higher incomes. The government itself has [admitted](http://nirdpr.org.in/NIRD_Docs/newsletters/oct2017.pdf) that the agriculture sector can support livelihood for only 14 crore people. 

**There is only one way out**

For anyone who wants to quit farming, suicide is the only way out. Farmers’ prime asset – land is tied up in numerous regulations and restrictions across India. They are unable to lease or rent the land and move towards better employment opportunities. When it comes to selling land, there are barely any buyers because only a farmer can buy farmland in most states in India. If they want to change the use of land from agriculture to some other industry, they are restricted from doing so because of the laws relating to the use of land.

Even if a farmer somehow manages to go through the regulatory labyrinth and manages to get out of farming, where are other employment opportunities? It is simply [a bad time to be a job seeker in India](https://qz.com/india/1805246/women-are-worst-hit-by-indias-unemployment-crisis/), and the situation is unlikely to change anytime soon. So what can farmers do if they want to leave farming? You guessed it right, there is only one way out of farming unless we let change our regressive regulatory policies.

[Read More: Farmers, Middlemen and the Way Out](https://spontaneousorder.in/farmers-middlemen-and-the-way-out/)

* * *

**About Sudhanshu Neema**

Sudhanshu is a lawyer and economist working as Manager, Research at the Centre for Civil Society. He served as a Frederic Bastiat Fellow at the Mercatus Center at George Mason University in 2015-16.

## SO Musings: Minoo Masani on Citizenship

Original: https://www.spontaneousorder.in/p/minoo-masani-on-citizenship

Author: Spontaneous Order

Published: 2020-02-28T13:02:32.000Z

Topics: indian-democracy, political-decay, civil-society, liberalism

> Below is an excerpt from the Minoo Masani piece on Citizenship, first published in 1969. In this piece, Masani deplored the inefficient state capacity, made case for a strong but limited government, and exhorted the youth to actively engage with democra..

**Summary:**

In a 1969 piece on citizenship, liberal thinker Minoo Masani diagnoses the decay in Indian public life through four major causes, advocating from a classical-liberal standpoint for principled politics over power grabs. First, politicians' reluctance to serve in opposition—claiming 90% in India seek office versus the democratic norm of 40% in opposition—led to rejecting Gandhi's post-Independence advice to transform Congress into a constructive organization and form two parties under Nehru and Patel. Second, parties have become ends in themselves, with loyalty to 'my party right or wrong' supplanting principles, turning power into an end rather than a means. Third, a cult of personality prioritizes figures like Kamaraj Nadar over policies, irrelevant to the common man's life. Fourth, an illiterate electorate hampers communication, as manifestos and letters fail to reach them amid government-controlled media. Despite this, Masani highlights Indian strengths like love of religion, family, land, patience, intelligence, and individualism. He calls for active civil society engagement to strengthen democracy, critiquing inefficient state capacity while implying a need for strong but limited government rooted in liberal values—arguments still relevant today.

**Key points:**

- Indian politicians overwhelmingly shun opposition roles, with 90% seeking office instead of the democratic norm of 40%, distorting parliamentary function.
- Parties prioritize power for its own sake over implementing principles, inverting their proper role as means to policy ends.
- A personality cult fixates on leaders like Kamaraj Nadar rather than substantive measures affecting ordinary lives.
- Illiteracy blocks effective political communication, exacerbated by state-controlled media channels.
- Youth should engage actively in civil society and democracy to counter political decay and build principled governance.

**By Spontaneous Order**

* * *

*Below is an excerpt from the Minoo Masani piece on Citizenship, first published in 1969. In this piece, Masani deplored the inefficient state capacity, made case for a strong but limited government, and exhorted the youth to actively engage with democracy in the domain of civil society. Many of his arguments are still relevant as prescriptions for strengthening Indian democracy.*

What are the causes of decay in our public life? I think I would analyse it under three or four major heads. One is the reluctance to be in opposition. Everyone wants to be in power or office today or tomorrow. Normally, parliamentary democracy functions in countries where 40 per cent of the country’s politicians are prepared to be in opposition at any given time. About 60 per cent are in office, about 40 per cent in Opposition. This is the law of democratic politics. But not in India. In India, 90 per cent of the politicians must be in the office at any given time! This, I suppose, was the basic reason why the Congress Party rejected Gandhiji’s advice on the achievement of Independence when he suggested that the Congress retire from political life, become a constructive organisation and that two parties be formed – a radical one under Jawaharlal Nehru, a conservative one under Vallabhbhai Patel. Both sides rejected the advice because both wanted to be in office at the same time.

A second basic factor is that the party, which is a means to an end, has become an end to itself. Not only “my country right or wrong”, but “my party right or wrong”. Politics is about power, but power is not an end in itself. Power is for the purpose of carrying out your principles and your policies. Now, it has become power for its own sake; office for its own sake. Nothing is more painful to me than to watch my friends in the office today – old friends of the Congress Party to which I once belonged.

A third reason for the decay of our politics is the cult of personality – the preoccupation with men rather than with measures, with personalities rather than with principles. “Will Mr Kamaraj Nadar get into the cabinet” is a question I am asked more often by my fellow intelligentsia than any other question concerning this country. But what does it matter whether Mr Kamaraj Nadar is in the Cabinet or not? Do you think it will make two *annas* worth of difference to the life of the common man in India?

Lastly, there is the fact of an illiterate electorate – not that illiterate people are stupid, but illiterate people are difficult to communicate with since they can’t read, your manifesto doesn’t touch them, you can’t write to them. You can meet only a few persons, you can attend a few public meetings. The radio is under government control, T.V. will be under government control. The channels of communication, the conveyor belt, is missing. This, of course, makes for the quality of the politician being what it is.

Now, we as a people have some very strong points. We have love of religion, love of the family, and the home, love of the land, patience, contentment, perhaps even resignation with our individual lot, a high degree of intelligence, strong individualism – these are very fine traits of the Indian character.

The full article could be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=590973500.pdf). (page 51)

To read more works by Minoo Masani, [click here](https://spontaneousorder.in/minoo-masani-from-socialism-to-liberal-swatantra-party/).

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*  

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## PS Sivaswamy Aiyer: Forgotten Indian Liberal – Part II

Original: https://www.spontaneousorder.in/p/ps-sivaswamy-aiyer-ii

Author: Spontaneous Order

Published: 2020-02-25T18:40:37.000Z

Topics: indian-liberalism, constitutionalism, gandhi-critique, army-indianization

> Editor’s Note: This is the second article in a two-part series paying homage to PS Sivaswamy Aiyer, the forgotten liberal intellectual of pre-independent India. Read the first part here. During the nineteenth century India, freedom movements produced ma

**Summary:**

PS Sivaswamy Aiyer exemplified Indian liberalism through constitutionalism and gradualism, influenced by Ranade, Gokhale, JS Mill, Herbert Spencer, and Alexander Bain, leading the Madras Liberal League and serving as president of the National Liberal Federation of India in 1919 and 1926. He vehemently opposed Gandhi's Non-Cooperation and Passive Resistance movements, criticizing them for fostering a law-breaking mentality, disrespect for elders and teachers, and impractical non-violence, warning that such attitudes endangered future governance. In his 1919 Calcutta address, Aiyer faulted Gandhi's 'dictator' role and haste for Swaraj. His 1928 'Indian Constitutional Problems' lectures advocated responsible government at center, state, and local levels, including decentralization for panchayats, representation for backward classes to avoid injustice, and coverage of legislature, executive, judiciary, defense, and minorities. Aiyer contributed to military Indianization, moving resolutions in 1922 for a nautical college and in response to the 1921 Esher Committee for 25% Sandhurst places for Indians. He critiqued Nehru's fascination with the Russian Revolution and revolutionary creed, refusing to join the Indian Civil Liberties Union, stressing reconciliation of liberty with peace and order. The author urges rewriting pre-independence history to honor liberals like Aiyer for their intellectual integrity and contributions to constitutional liberalism.

**Key points:**

- Aiyer opposed Gandhi's Non-Cooperation Movement for promoting law-breaking and eroding respect for authority, as stated in his 1919 presidential address.
- In 'Indian Constitutional Problems' (1928), Aiyer detailed responsible government structures, decentralization, and representation for backward classes.
- Aiyer advanced army Indianization via 1922 resolution for a nautical college and demands for 25% Sandhurst slots post-1921 Esher report.
- He rejected Nehru's revolutionary socialism, prioritizing liberty reconciled with peace and order over Bolshevik-style upheaval.

**By Chandrasekaran Balakrishnan**

* * *

*Editor’s Note: This is the second article in a two-part series paying homage to PS Sivaswamy Aiyer, the forgotten liberal intellectual of pre-independent India. Read the first part [here](https://spontaneousorder.in/ps-sivaswamy-aiyer/).*

During the nineteenth century India, freedom movements produced many thought leaders and thinkers who fought for the country’s independence on varied battlegrounds. The common thread that cuts through these movements was British imperialism vs freedom, liberty and nationhood. However, from the beginning of the twentieth century, there were sharp differences of opinion among apex leaders of Indian National Congress on the methods to be pursued for political movements and principles of constitutional reforms to further the goal of complete freedom. The leaders were divided among the Montagu–Chelmsford Reforms announced in 1918-1919 by the British government to introduce self-governing institutions gradually in India. 

The Liberals were known as *Moderates* who supported the Montagu-Chelmsford reforms opposed by extremists, direct actions and revolutionary. The liberalism was defined as *“constitutionalism and gradualism”* led by Mahadev Govinda Ranade and Gopala Krishna Gokhale. The “extremism, direct action and revolution” was led by Bal Gangadhar Tilak, Bipin Chandra Pal and Lala Lajpat Rai. Many are unaware that the grand champion of Independent India’s liberalism C Rajagopalachari or Rajaji was revolutionary during the freedom movements! Among others, VS Srinivasa Sastri and PS Sivaswamy Aiyer were real faces of Indian liberalism in pre-independence India.  

**PS Sivaswamy Aiyer on Indian Liberalism**

PS Sivaswamy Aiyer was a firm believer of liberalism and was influenced by the works of Ranade and Gokhale besides JS Mill, Herbert Spencer and Alexander Bain. According to K Chandrasekharan, *“he was never drawn to the allurement of the ultimate ideal by ignoring the practicality of the immediate.”* Aiyer was among top leaders of *Madras Liberal League* and spearheaded the liberalism of the early part of the twentieth century towards advancing the constitutional methods to attain freedom.

In 1965, the noted historian KA Nilakanta Sastri (1892-1975) edited a volume on *“A Great Liberal: Speeches and Writings of Sir PS Sivaswamy Aiyer”* by classifying the speeches and writings of Aiyer into broad themes such as political, economic, military, social, educational, legal fields, etc. In 1919, in his Convocation address at Banaras Hindu University Aiyer remarked that *“the spirit of rational investigation has always occupied a place in the history of Indian thought”*. One could see the application of this profound thinking in all of his writings and speeches.

Sivasamy Aiyer was president of National Liberal Federation of India (NLFI) or Liberal Party of India in 1919 and 1926. In his address at Calcutta in 1919, he openly criticised the Passive Resistance Movement called by Gandhi. Aiyer called Gandhi’s ***‘constructive programme’*** an impracticable and believed that an ***“unqualified doctrine of non-violence has never been carried out in practice.”*** From the very beginning of Gandhi’s Non-cooperation Movement, Aiyer had been opposed to it but never attacked him personally. Aiyer was very much concerned about how passive resistance movements perused against the British government and Aiyer feared that these mentalities of passive resistances might not spare any governments in future.

There were some outbreaks of violence after Gandhi’s passive resistance movements which led Sivasamy Aiyer to harp on his apprehensions quite strongly. Aiyer remarked delivering Presidential address: “*So long as he (Gandhiji) is the dictator of the non-cooperators and so long as he continues to be, if I may respectfully say so, intoxicated with the incense of adulation paid by his worshippers, and so long as he is anxious to maintain his reputation as a prophet by trying to hasten the event of Swaraj at lightning speed, so long as he maintains the attitude, the unyielding and uncompromising attitude which he does, I am afraid it will not be possible to come to any satisfactory results.”*

Further, Sivasamy Aiyer’s thoughts reminiscence to the current protests of students’ and few instigated groups which are breaking law and order in the name of the right to protests. Avowedly condemning the Gandhi’s Satyagraha movement Aiyer remarked *“But though few believe in the specific articles of his faith, the Gandhi spirit or the mentality which he created has permeated large sections of the masses. The young have lost their respect for their parents and elders; students have lost their respect for their teachers, resent discipline and claim the right to strike work, respect for the laws of the land has sensibly diminished; and the people have become familiarised with the idea that it is right and even laudable to break laws which do not commend themselves to sectional public opinion.”* The law-breaking mentality more than the civilised culture denouncement is more dangerous. Aiyer was someone who would educate the youth to fight with ethics and principles rather than encourage for street protests.

In 1927, Sivasamy Aiyer delivered eight lectures in the University of Madras in the memory of his late childhood friend V Krishnaswami Aiyer who died prematurely. His lectures titled *“Indian Constitutional Problems”* were published in 1928. Aiyer emphasises on the systems of responsible government on attaining the independence on all significant aspects of government systems both at centre and state as well as at local body levels. Through these lectures, he had unequivocally dealt with a range of subjects like the role and structure of legislature, executives at the centre and state level, judicial systems, the party systems, the defence, the minorities, etc. As far as the backward classes were concerned, Aiyer was acutely aware of the fact that *“the treatment of the backward classes has been in the past a slur upon the social system of India”*. In 1913, he remarked, “*that any form of Constitution in which the lowest classes are not represented must result in injustice and oppression.”* He strongly advocated the decentralised government systems for panchayat, town and village administration by comprehensively listing 11 important areas covering all major aspects. 

In 1934, Sivaswamy Aiyer also delivered a series of lectures in Memory of Kamala Devi at the University of Calcutta. The lectures dealt with the moral ideals of Hindus quite comprehensively. It was later published as a book in 1935 as *“Evolution of Hindu Moral Ideals”.* In 1944, at a public meeting convened in Allahabad to celebrate PS Sivaswamy Aiyer’s 80th birthday, liberal thinker Tej Bahadur Sapru remarked that *“there is scarcely a subject on which he has not addressed, on which he has not expressed considered and deliberate opinion. I can honestly say that there are very few books which have been written with so much ability, with so much impartiality as that book of Sivaswamy Aiyer.”*  Indeed, Aiyer’s analysis of Hindus Moral Ideals of ancient time vs other nations by critical evaluations are fascinating, with in-depth looking at subjects like liberty, freedom, private property rights, equality, etc. In 1940, Sivasamy Aiyer delivered the first Dr Annie Besant Memorial Lectures in two parts on the doctrines of *Ahimsa* and *Asangha* of Hinduism for critical assessment in a literary quest. Both lectures were published in the Journal of the Madras University in 1941 edited by KA Nilakanta Sastri.

During the First World War, Aiyer played a vital role in mobilising support for the Indian Volunteer Movement. In 1931, Sivasamy Aiyer was appointed as Member of Indian Military College Committee. According to KRA Narasiah, “*Not many remember that we would never have had a training ship but…In the first session of the reformed Central Legislative Assembly on January 12, 1922, Aiyer moved a resolution to constitute a Committee to investigate possibilities of promoting the formation of an Indian Mercantile Marine. The resolution which was adopted sought “the establishment of a nautical college in Indian waters for the purpose of training the executive officers and engineers of ships”.* Aiyer had moved about fifteen resolutions to bring Indianisation of the army on all aspects.

In his recent book in 2016, Srinath Raghavan noted that *“following the political reforms of 1919, Indians in the new Central Legislative Assembly (CLA) began to take a keen interest in the ‘Indianization’ of the army. In response to the Esher Committee report of 1921, a set of resolutions was tabled in the CLA by PS Sivaswamy Aiyer, a leading liberal from Madras. These included demands for setting aside 25 per cent of the places at Sandhurst for Indian cadets and for the provision of preparatory training in India.”* 

Sivaswamy Aiyer once remarked that Jawaharlal Nehru was one *“**fascinated by the glamour of the Russian Revolution.”*** In 1936, Jawaharlal Nehru invited Aiyer to join with the Indian Civil Liberties Union to protect the civil liberties of people but refused to join. In his reply, Aiyer referred to the secession of the liberals from the Congress in 1918, given the fundamental divergence of opinions on reforms and methods between the liberals and the Congress. And then Aiyer observed: “*The difference between the Liberal Party and the Congress as regards the methods by which our respective aims are to be achieved have become sharper and more radical since the recent Lucknow Congress. You have pronounced a revolutionary creed whose object is the uprooting of existing political, economic and social structure, and you consider yourself bound to work for and produce a revolutionary mentality in the people… You believe not merely in the subversion of the government, but of the whole fabric of society on the lines which have been followed in Bolshevik Russia…”* 

Further, Aiyer added that “*In the Soviet Union which you admire, all counter-revolutionary movements have been the subject of ruthless repression, and I have seen it stated that freedom of speech and the press has been curtailed by Soviet Russia as severely in peace-time as by other nations during war-time. The reconciliation of liberty with peace and order is the essential condition of national well-being and progress.”* 

PS Sivaswamy Aiyer had maintained an extraordinary independent thinking and intellectual integrity throughout his public life. He was profound thinker and contributor towards the building of constitutional liberalism conceived in liberal principles. Thus, there is enormous scope to rewrite the history of pre-independent India with recounting the monumental contribution of liberal thinkers like Sivasamy Aiyer who have contributed significantly to the Indian liberalism. 

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

**References**

1.  K Chandrasekharan (1969) P.S.Siwaswami Aiyer, Publication Division, Union Ministry of Information and Broadcasting, Government of India.
    
2.  KRA Narasiah (2017) Marine training: Sailing from a glorious past to grim present, December 21, Times of India
    
3.  How The British Raj’s Army Opened Its Doors for ‘Indian’ Officers, June 26, 2016. Swarjaya Magazine. [Book Excerpts](https://swarajyamag.com/author/17540) from “India’s War: The Making of Modern South Asia, 1939-1945” by Srinath Raghavan
    

[Read More on the Indian Liberal Tradition](https://spontaneousorder.in/category/liberal-archives/)

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## PS Sivaswamy Aiyer: Forgotten Indian Liberal – Part I

Original: https://www.spontaneousorder.in/p/ps-sivaswamy-aiyer

Author: Spontaneous Order

Published: 2020-02-17T16:33:20.000Z

Topics: indian-liberals, classical-liberalism, education-reform, constitutionalism

> Editor’s Note: This is the first article in a two-part series paying homage to PS Sivaswamy Aiyer, the forgotten liberal intellectual of pre-independent India. Read the second part here. In a fierce debate of contemporary public policies, the better int

**Summary:**

The post argues for revisiting India's forgotten classical-liberal history, exemplified by PS Sivaswamy Aiyer (1864-1946), a legal luminary, administrator, educationist, and statesman who championed constitutional reforms, individual liberty, and non-violent paths to freedom, amid critiques of distorted narratives ignoring such figures, especially in Tamil Nadu due to Dravidian movements. Born near Thanjavur, Aiyer excelled academically, practiced law from 1885, edited the Madras Law Journal (1883-1907), and founded a pioneering co-educational school in 1906 (now Sir PS Sivaswamy Aiyer Higher Secondary School) and supported girls' education at National Girls High School (1930). He served as the first Indian nominated to Madras University Senate (1898), Vice-Chancellor of Madras (1916-1918) and Banaras Hindu University (1918-1919), Advocate General (1907-1912), and Member of the Governor's Executive Council (1912-1917). Aiyer contributed to defence via Military Requirement Committee (1921) and Indian Military College Committee (1931), represented India at the League of Nations, and led the National Liberal Federation (1919, 1926), advocating 'National Liberals' over 'Moderates' and critiquing Gandhi's non-cooperation while respecting his patriotism. Influenced by Ranade and Gokhale, and mentor to VS Srinivasa Sastri, Aiyer's legacy underscores liberal constitutionalism against revolutionary violence.

**Key points:**

- PS Sivaswamy Aiyer advanced education by founding India's first co-educational school in 1906 and leading girls' education initiatives in 1930.
- Aiyer held key roles including Vice-Chancellor of Madras University (1916-1918), Advocate General (1907-1912), and President of National Liberal Federation (1919, 1926).
- He promoted constitutional methods for independence, critiquing Gandhi's non-cooperation while contributing to defence and League of Nations representation.
- Forgotten liberals like Aiyer deserve revival to counter distorted Indian histories, particularly in Tamil Nadu's Dravidian narrative.

**By Chandrasekaran Balakrishnan**

* * *

*Editor’s Note: This is the first article in a two-part series paying homage to PS Sivaswamy Aiyer, the forgotten liberal intellectual of pre-independent India. Read the second part [here](https://spontaneousorder.in/ps-sivaswamy-aiyer-ii/).*

In a fierce debate of contemporary public policies, the better intended few thinkers try to reconnect the relevance of the history of Indian economic thoughts. Alas, often they are underestimated and ignored, the larger meaning of engaging with history to understand better both in logic and sound reasoning are ignored decisively. Recently, Sanjeev Sanyal, who is a Principal Economic Adviser in the Union Ministry of Finance, [remarked](https://www.livemint.com/news/india/india-s-history-needs-to-be-revisited-rewritten-principal-economic-adviser-sanyal-11579788317638.html) while delivering the 14th Netaji Subhash Memorial Lecture that – *“India needs to begin to revisit its own history. And, what better place to start than by starting with the story of India’s freedom struggle.”*

However, the retired bureaucrat Anil Swarup who ignored the context and deceptively [criticised](https://www.outlookindia.com/newsscroll/focus-on-job-fin-min-adviser-snubbed-for-talking-history/1718418) Sanyal’s argument by stating that – *“The guy should focus on job at hand, reviving the economy and stop talking about what needs to be done to Indian history. How long will we hang on to the past? We should certainly learn from history but not get stuck in the past.”* Though, Sanyal’s lecture focused on the forgotten revolutionaries of freedom struggles during the British rule and not equally forgotten classical liberals who courageously worked with British Governments and brought out many constitutional reforms without losing the voices for freedom struggles. This is how Indian history has been treated in the last half-century among the well-read and educated class, even after the decades of distorted narratives produced by historians.

It is even sobering in south India – Tamil Nadu, the alleged Dravidian movements of last century against the dominance of the upper castes in social and political spheres which irreparably led to undermining the life and works of liberal thinkers who firmly stood for the welfare of all sections of the society through constitutional provisions of schemes. There were several liberal luminaries from Madras (now Chennai) whose works were ignored during the alleged movements of Justice Party and Dravidian polity which paid only lip service to masses in the name of upper castes through its dogmatic tactics. Indeed, these political movements did not produce any scientific, scholarly and civilised literature on the ideas and thoughts of both Tamil literature and Sanskrit.

One such liberal thinker was PS Sivaswamy Aiyer whose life and works are relevant to the contemporary public discourse but completely forgotten even in his native state! Sivawsamy Aiyer was a prominent legal luminary, administrator, educationist, scholar, liberal thinker and statesman. He was liberal constitutionalist with a firm belief in constitutional rights, individual liberty and freedom. Indeed, he single-handedly fought for many constitutional reforms through his long association with the British government. His contribution in fields like education, defence and Indianisation of Army was enormous. He was representative of the Indian government to the third session of League of Nations which later became the United Nations.

**Life and Education of Sivaswamy Aiyer**

Pazhamaneri Sundaram Sivaswami Aiyer was born on the 7th of February, 1864 in Pazhamaneri village on the south bank of Cauvery River near Thanjavur in Madras Presidency (now Tamil Nadu). His father was Sanskrit Scholar, School Teacher, and Court Pleader. He had three younger brothers and two sisters. He attended SPG Fort Branch High School at Manambuchavadi for schooling. He completed his matriculation in 1878 and secured first class in FA Examination at Government Arts College, Kumbakonam. After a year there, he joined the Presidency College, Madras (now Chennai) and completed his BA in 1882 with major history, philosophy and psychology. In 1883, he joined Madras Law College which was also operated in the same campus of Presidency College, Madras. In 1885, he started the law practice by joining with advocate R Balaji Rao in Madras. Besides law practice, he also worked as an Assistant Professor at Madras Law College to support his family as the eldest son after his father’s death in 1893 and served till 1899. 

Sivaswamy Aiyer had a keen interest in politics, economics, sociology, library science besides Sanskrit and English literature. He was a joint editor of Madras Law Journal from 1883 to 1907. He founded the Madras High Court Lawyers Association in 1889. He fervently advocated educating the youth towards constitutional methods to attain freedom from the British. The liberal thinker and better known as *Silver Tongue of India* VS Srinivasa Sastri (1869-1946) was a student of Sivaswamy Aiyer at Madras Law College. Aiyer wrote many articles in the *Servants of India,* a weekly magazine founded and edited by Srinivasa Sastri at Servant of India Society, Pune.

In 1906, Sivaswamy Aiyer founded a school near to his home town at Thirukkattupalli which is nearby Thanjavur for promotion of school education of children. It is now named as Sir PS Sivaswamy Aiyer Higher Secondary School, but he never allowed for using his name till his death. This school was the co-educational school which was first of its kind in the Madras Presidency at that time. In 1930, he became President of National Girls High School at Mylapore, Madras and adopted the school to promote girls’ education. It now functions with his wife’s name as Lady Sivaswami Aiyer Girl’s Higher Secondary School, Mylapore, Chennai. He made generous contributions to these two schools besides several other institutions and organisations across the country including Vivekananda College, Chennai and Madras Sanskrit College. After his wife’s death in 1939, he had sold the house in which he was living for a long time and donated the entire amount to the above schools and stayed in a rented house. He was President of Madras Sanskrit College for more than three decades till his death in 1946. He also served as President of All India Federation of Teachers Association’s fifth Session.

In 1898, Sivaswamy Aiyer was nominated to the Senate of University of Madras; he was the first Indian to be nominated to the University. He was also Fellow of the University of Madras in 1898. From 1916 to 1918, he was the Vice-Chancellor of the University of Madras. He also served as Vice-Chancellor of Banaras Hindu University in 1918-1919. In 1904, Sivaswamy Aiyer was nominated to the Madras Legislative Council and was also re-elected to the Council in 1906 as unopposed. In 1907 he was appointed as Advocate General of Government in Madras Presidency for five years up to 1912. Both CP Ramasamy Aiyer and Alldi Krishnasami Aiyer were served as Advocate General and praised highly of the services of Sivaswamy Aiyer. In 1912, he was appointed as Member of Executive Council of the Governor of Madras which he served up to 1917. Aiyer was a childhood friend, a classmate in school and contemporary of V Krishnasamy Aiyer (1863-1911).

Under the new Reforms introduced from 1921 to 1923, Sivaswamy Aiyer was elected to the Imperial Legislative Assembly from the Thanjure-Trichy Constituency and then continued for another term as a Nominated Member from 1924 to 1926. Though he was not inclined to stand for election for the second term, finding him a very valuable contributor to discussions on all important legislative matters, the Government of Madras Presidency requested him to serve as a nominated member. In 1921, he was appointed as Member of Military Requirement Committee. Also in 1931, he was chosen as Member of Indian Military College Committee for recognising his “unusual wealth of knowledge of Indian Defence problems”.

Sivaswamy Aiyer was attracted towards the ideas of liberalism profoundly preached by MG Ranade and GK Gokhale. He had a firm belief on the path of reason and persuasion and never of violence or direct actions. He wrote many articles in *“Indian Review”* and *“New India”* publications propagating the path to achieving freedom from British. In 1898, he wrote a long essay on *“Indian Politics”* and vehemently criticised the British government for bad drafting of laws. He also wrote for a quarterly magazine called *Triveni* which has been published since 1927.

From the inception, Sivaswamy Aiyer was closely associated with National Liberal Federation of India or Liberal Party founded in 1918 by VS Srinivasa Sastri along with fellow liberals thinkers to achieve freedom through constitutional methods. In the early part of the twentieth-century long before the Gandhi-Nehru-Bose era of freedom movements, the some of the leaders who premised their political activism based on the classical liberals principles were called moderate or centre group who opposed revolutionary, direction action, violence and non-cooperation but indulged to promote order with reasoning and logic for constitutional methods to fight British imperialism.

Sivaswamy Aiyer was President of National Liberal Federation of India in 1919 and 1926. In his Presidential address at Calcutta in 1919, Sivaswamy Aiyer had suggested the name ***“National Liberals”*** instead of ***“Moderates”*** and ***“Centre Group”*** which were often used as alternative political movements opposed to the Indian National Congress and Jinna camps. In his address, Sivaswamy Aiyer had sharply questioned the methods of the passive resistance movement and non-cooperation movements of MK Gandhi. However, Aiyer had high regards for Gandhi’s commitments towards patriotism and communal harmony in undivided India. Aiyer was also against the partition of India.

Sivaswamy Aiyer was a close associate of Madras Liberal League along with VS Srinivasa Sastri. In 1983, SR Venkataraman who was President of Servants of India Society, Pune edited a book *Sastriana* which is a compilation of letters of VS Srinivasa Sastri to PS Sivaswamy Aiyer and others. These letters are scholarly written at different times and provide great insights into the underpinning of political situations in British India. Sastri’s views on some of the leaders’ thoughts on the path to attain independence are highly resourceful. The views expressed at times by Sastri to Sivaswamy Aiyer influenced leaders like Gandhi, Rajagopalachari, Ambedkar, and Nehru, among others. Sivaswamy Aiyer passed away on the 5th of November, 1946 at the age of 82 in Madras, ten months before India attained independence from British rule.

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

[Read More: The Right Honorable Sir V S Srinivasa Sastri: Diplomat, Politician, Liberal](https://spontaneousorder.in/v-s-srinivasa-sastri/)

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## SO Musings: Caste System, Greatest Curse of India

Original: https://www.spontaneousorder.in/p/so-musings-caste-system-curse

Author: Spontaneous Order

Published: 2020-02-15T13:42:37.000Z

Topics: caste-system, social-reform, economic-mobility, free-society

> The following article, written by DM Kulkarni, first appeared in the March 1960 issue of The Indian Libertarian. Mr Kulkarni argues that if India wants to be on the path to a free and open society, the caste system must go. He calls for the educated peo..

**Summary:**

DM Kulkarni argues that the caste system, India's greatest curse, must be eradicated to achieve a free and open society, as it blocks social unity, economic progress, and political democracy. Evolving from flexible Vedic classes into a rigid, hereditary structure by the 11th century A.D.—with irrational taboos, untouchability, and sub-castes—it divided Hindus, enabling foreign invasions and permeating welfare schemes, elections, and administration despite anti-caste rhetoric. Sociologists like Max Muller and Swami Dayanand note its absence in original Vedas; Ambedkar calls it anti-social; Nehru deems it incompatible with equality. Economically, caste kills initiative by assigning hereditary professions, preventing labor mobility and division of labor essential for industry, wasting talents, fostering contempt for manual work, and degrading 60 million untouchables. Non-Brahmin movements trace to casteism. Kulkarni urges educated Indians to spark an intellectual and cultural revolution by vigorously propagating rational anti-caste ideas, exposing evils, and refusing all caste practices, coupled with democratic government pressures, to root it out completely rather than tinkering.

**Key points:**

- Caste system originated post-Vedic era, rigidifying into hereditary occupations and taboos that divided India and invited invasions.
- It obstructs economic progress by barring free labor mobility, choice of profession, and devaluing manual work, wasting talents of 60 million untouchables.
- Caste permeates politics, welfare, and social life, making unified national efforts impossible and fostering anti-social isolationism.
- Educated must lead intellectual revolution: propagate rational ideas against caste, reject its taboos, while government applies democratic pressures to eradicate it.

**By Spontaneous Order**

* * *

*The following article, written by DM Kulkarni, first appeared in the March 1960 issue of The Indian Libertarian. Mr Kulkarni argues that if India wants to be on the path to a free and open society, the caste system must go. He calls for the educated people to bring about an intellectual and cultural revolution in the country by propagating vigorously rational ideas about caste and exposing its evils on rational grounds, and at the same time by stoutly refusing to countenance casteism and its mythical taboos and restrictions in any shape and form.*

It is generally agreed among the thinking sections of the Indian population, that the caste system in the form in which it prevails among the Hindus today, is the greatest curse of India, and has proved to be a big stumbling block in the path of India’s all-round progress. It is within the common experience of the administrators and public workers, that all welfare schemes undertaken by the Government, or social organisations, flounder on the rock of casteism which permeates inevitably, though imperceptibly, the very machinery set up to implement them. It is, therefore, that an urgent duty is cast on all well-Wishers of our country to apply themselves seriously to the task of speedily eradicating caste, which is sapping all strength out of our national life, and has become, in the words of Prof Sir Fredrick Bartlett ‘one of the hard points of Hindu culture.’ (quoted in “Caste and Race in India” by Prof Ghurye).

**Evolution of Caste**

All Orientalists and sociologists agree that this caste system, at least in its original, form resembled in material particulars, the class, or better still the ‘estates’ system that prevailed in both Eastern and Western countries in ancient times. Regarding Indian Social Organisation during the early Vedic period, Prof Max Muller observes in “Chips from German Workshop”: – “There is no authority in the hymns of the Vedas for the present complicated caste system, at least in its original form claimed by the Brahmins and for the degraded position of the Shudras; there is no text to show that there was any bar to eating and drinking together, inter-dining and inter-caste marriage.” He then concludes that “a Hindu who believed only in the Vedas could be much nearer to Christianity than those who follow Puranas and Tantras.” Swami Dayanand Saraswati, the great founder of the Arya Samaj movement and Vedic scholar also supports this view that caste system as such, with its extreme rigidity and exclusiveness, did not exist among the Vedic Aryans. It is thus clear that the present framework of caste-based on birth and hereditary occupations was slowly evolved in all its ugly features of irrational taboos and restrictions on food, social contacts and marriages, culminating in the most monstrous institution of untouchability, during the Puranic period ending with the 11th century A.D., when India divided vertically and horizontally by innumerable caste and sub-castes, fell an easy prey to the foreign invasions of the Northern hordes.

**Major Operation Essential**

This institution of caste and unlimited number of sub-castes, each one imbued with the spirit of exclusiveness, superiority and inferiority complexes, with its exploded ideas of racial and ceremonial purity, ill-conceived and unfounded prejudices with respect to other castes, have brought about a complete disruption of Indian national life and has created unnecessary strifes, dissensions in our body politic. It had made it very difficult, if not impossible, for the Indian nation as a whole, to pursue any scheme of social, economic welfare with a united effort and will and with a singleness of purpose and devotion. The code of relative moral and social behaviours, the different sets of judicial principles, framed and applied by the Hindu law-givers like Manu and others, for different caste and strata of society have led to the formation of distinct ethical and social groups, widely differing from one another in patterns of social behaviour and moral values. All this differentiation, deliberately made by the law-givers, has tended to create isolationism, cliquism as between castes, in practically all walks of life. The non-Brahmin movements in Maharashtra and in South India can all be traced to this same evil of casteism, which, despite the legislative laws of the Government in this respect, is still stalking abroad in all its strength and fury. The high and the low, the King and the peasant, the Minister and the peon, the Indian National Congress and Village Panchayat have all to humble themselves before the Almighty power of caste. It is a patent fact, that caste considerations to a great extent determine the choice of even the Congress candidates in the General Election and also in the Elections of the local bodies. Ministers and Government Administrators, even while profusely mouthing high sounding phrases and slogans of strong denunciation of caste, have perforce to attend, guide, and preside over caste functions and thus directly encourage casteism, just to be in the good books of the caste-leaders at the time of the Elections. These castes and sub-castes, whenever they have to come together, out of daily life’s urgent needs and necessities do so, not out of a healthy spirit of camaraderie and social co-operation, but ”mechanically” as Dr Ambedkar has well put it. The same writer further says in his book ”What Gandhi and Congress have done for the untouchables” that the caste system is not only “non-social but also anti-social”. And as such, this institution calls for strenuous efforts on the part of all interested in the welfare of the country, to root it out completely and not merely be satisfied with make-shift arrangements which will not solve the problems.

**Economic Consequences of the Caste System**

Caste, besides being an obstacle to social and national unity has now proved to be a hindrance to our economic progress as well. The rigidity of caste with its professions and trades assigned to particular castes has killed the initiative and enterprise of the people. Free mobility of labour, free choice of profession and division of labour which is quite essential for stepping-up production under modern industrial conditions are totally absent under this institution. This has resulted in a colossal waste of human talents and potentialities. Besides, caste has fostered among the higher classes, a feeling of utter contempt for manual work which is inimical to the economic progress of the people. The specious argument that the caste alone preserves hereditary skills in handicrafts and arts, falls to the ground when we see such skills being handed down from father to son even in social groups and communities which do not observe caste. The degradation of sixty millions of untouchables to a position worse than that of slaves under the caste system has entailed on our country huge economic and social loss.

**On to a Free and Open Society**

Thus considered from any point of view, rational, economic, social, political, and even historical caste system is the greatest evil the country is suffering from today and has therefore got to go. Too long have we tolerated it in our midst. Any more tinkering with the problem is fraught with grave danger to our very national existence. The caste-ridden society is a “closed” society, perhaps suited to the conditions of a by-gone age. But in modern “open and democratic” society which it is our aim to build up, it has no place. In the words of our Prime Minister Nehru – “there can be no equality of status and opportunity within its framework, nor can there be political democracy and much less economic democracy. Between these two conceptions, conflict is inherent. Only one of them can survive” (J. Nehru, ‘Discovery of India’). It is, therefore, up to the educated people to bring about an intellectual and cultural revolution in the country by propagating vigorously rational ideas about caste and exposing its evils on rational grounds and at the same time by stoutly refusing to countenance casteism and its mythical taboos and restrictions in any shape and form. This revolutionary work among the people coupled with political pressures exerted by the Government in a democratic way, on this institution of caste, will surely hasten its death.

The original document can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=509918235.pdf).

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Population is Not a Threat to India

Original: https://www.spontaneousorder.in/p/population-not-a-threat

Author: Spontaneous Order

Published: 2020-02-15T13:41:18.000Z

Topics: population-policy, overpopulation-myth, economic-development, family-planning

> The Constitutional Amendment Bill, 2020, was introduced on the 7th of February in the Rajya Sabha, as a Private Members Bill, by Shiv Sena Member of Parliament, Anil Desai. The Bill introduces a single Article to the Constitution, which is to read as fo..

**Summary:**

The Constitutional Amendment Bill, 2020, introduced by Shiv Sena MP Anil Desai, seeks to insert Article 47A mandating the state to incentivize two-child families through taxes, employment, and education benefits while withdrawing concessions from others to control population growth. The bill's Statement of Objects and Reasons assumes a 'population explosion' overburdens resources and hinders development, but this is flawed. India's population density of 420 people per square kilometer is far lower than Singapore's 8,240, Hong Kong's 6,791, Monaco's 19,427, or Lebanon's 653, yet these nations thrive economically, proving no direct correlation between density and poor growth. State-level Indian data similarly shows no link between high population and low growth. India's fertility rate has declined from 5.061 in 1977 to 2.220 in 2019, slowing population growth naturally. From a classical-liberal view, politicians scapegoat population to deflect from inefficient policies and resource misallocation. Punitive measures would disproportionately harm poor families reliant on children for labor amid high child mortality, exacerbating inequality without addressing root economic issues.

**Key points:**

- India's population density (420/km²) is lower than richer nations like Singapore (8,240/km²) and Hong Kong (6,791/km²), debunking overpopulation as a growth barrier.
- Fertility rate fell from 5.061 (1977) to 2.220 (2019), indicating slowing growth without coercive policies.
- State-wise data shows no correlation between high population and poor economic performance.
- Two-child penalties would punish low-income families dependent on child labor, ignoring policy failures.
- Real threats to development stem from government inefficiency, not population size.

**By Sourya Banerjee**

* * *

The [Constitutional Amendment Bill, 2020](http://164.100.47.4/BillsTexts/RSBillTexts/asintroduced/47A-E-7%202%2020.pdf), was introduced on the 7th of February in the Rajya Sabha, as a Private Members Bill, by Shiv Sena Member of Parliament, Anil Desai.

The Bill introduces a single Article to the Constitution, which is to read as follows;

 *“2. After Article 47 of the Constitution, the following article shall be inserted, namely —*

*‘‘47A. The State shall promote small family norms by offering incentives in taxes, employment, education etc. to its people who keep their family limited to two children and shall withdraw every concession from and deprive such incentives to those not adhering to small family norm, to keep the growing population under control.’’*

While this Bill has spent social media spiralling into a debate, this Article challenges the underlying assumptions this Bill makes in its Statement of Objects and Reasons.

**Relationship between population and economic development**

As mentioned in its Statement of Objects and Reasons (“SOR”), the individuals behind this Bill believe the following;

“*Population explosion will cause many problems for our future generations. We have to be concerned about the population explosion. The Centre, as well as State Governments, should launch schemes to tackle it. Our natural resources are extremely overburdened. The rate of growth of any country is directly related to the size of its population. Natural resources like air, water, land, woods etc. are subjected to overexploitation because of overpopulation. Today, there is a greater need to keep a strong check on the increase of our population.”*

In its second paragraph of the SOR, the Bill claims that there is a vast ‘population explosion’ in India which is a threat to the future generation and our natural resources are overburdened. Ergo, the Bill seems to claim that a significant reason behind the lack of growth in our country, is it’s growing population. This couldn’t be further from the truth in reality.

To understand this, we need to compare India with countries in different parts of the world. And for this purpose, it makes no sense to compare populations of countries directly. When we argue that the population of a country is depleting its natural resources, we are not only looking at the population but at the population density, i.e. the number of Individuals in per unit geographic area, who depend on the resource of that area.

As such, if it was true that the population of India is so high that it is impossible for the amount of area/land we have to sustain enough resources to help so many people grow, any country with equal or higher population density as India should also have been suffering from the same problem. But that is not the case; on the contrary, many countries with a much higher population density are far better off in their growth rate and economic conditions when compared to India.

As of 2020, India has a population density of approximately 420 people per square kilometre. Whereas countries like Singapore (8,240 people per sq./km), Hong Kong (6,791 people per sq./km), Monaco (19,427 people per sq./km), Lebanon (653 per sq./km) have far higher population density and are far better off economically when compared to India.

As such, there is no direct correlation between a higher population strain on resources and the growth and development of a country. Even state-wise [data in India](https://www.nayidisha.com/india-poor-due-high-population/) proves there is no correlation between high population and economic growth. “High Population” is merely the ghost politicians choose to unearth and blame for their inefficient economic policies.

It is essential to consider a few more things. Primarily, the fertility rate, that is the number of live births in India over a period of time, has been [consistently falling](https://www.macrotrends.net/countries/IND/india/fertility-rate) over the last decade. The fertility rate had come down from 5.061 in 1977 to 2.220 in 2019. As such our population growth has been consistently slowly down. Calling it a major threat to the future population is merely diverting attention from inefficient Government allocation of resources and flawed policies.

Another vital aspect to consider that in the socio-economic conditions present in parts of India, children as consider as additional hands to help in farms and household and help in the economic growth of the family. Considering the high mortality rate for children in some of our states, low-income families are often incentivised to have more children to ensure at least some survive until their adulthood.

A policy which aims to punish families with more than two children would only end up punishing more impoverished families while solving no real problems concerning the economic conditions of the country. While the idea of incentivising individuals to behave in a certain way has merit, a policy based on a flawed understanding of the actual problem, i.e. growth and economic conditions of our country, has a lot of seen and unseen problems that it will create for its citizens.

[Read More: Is it overpopulation or overcrowding?](https://spontaneousorder.in/is-it-overpopulation-or-overcrowding/)

* * *

**About Sourya Banerjee**

Sourya is the Project Associate for CCS Academy in Hyderabad. A BBA-LLB (Hons.) degree holder, Sourya used to practice law in Hyderabad before joining CCS. Sourya has also worked with numerous non-profits social organizations including Red Elephant Foundation, and Red Dot Foundation and also written on law and policy for online platforms such as LiveLaw, The Logical Indian, Qrius etc. An ex- Students for Liberty Hyderabad Local Coordinator, in his free time, Sourya runs a citizen journalism platform called Arguendo.

## SO Musings: Agricultural Policy of Swatantra Party

Original: https://www.spontaneousorder.in/p/agricultural-policy-of-swatantra-party

Author: Spontaneous Order

Published: 2020-02-07T15:42:01.000Z

Topics: agricultural-policy, land-reforms, swatantra-party, free-markets

> The following article, written by “Democrat”, first appeared in February 1960 issue of the Indian Libertarian, an independent journal of economic and public affairs. The article highlights the position of the Swatantra Party on the so-called ‘reform

**Summary:**

The article, from the 1960 Indian Libertarian, critiques the Congress party's post-Nagpur agricultural policy of low land ceilings and cooperative farming, which prompted the formation of the Swatantra Party under C. Rajagopalachari. It argues these interventions undermine the self-employed peasant-proprietor, essential for initiative, production, and human dignity within family and democracy, reducing farmers to state-dependent wage laborers—a path toward communism via expropriation. Evidence from expert studies shows failures of such reforms in free and communist worlds. Swatantra opposes ceilings and joint farming, favoring service cooperatives, credit, marketing, implements, and technical aid to boost output without disrupting rural harmony of landowners, tenants, and laborers. Ceilings at 30 standard acres would yield only 2 lakhs acres, while Mysore offers 15 lakhs acres of government fallow land untaken by Harijans. The party urges clarifying its alternative: preserve individual holdings, assist tenants via loans to buy land, and reject 'land to the tiller' as robbery, drawing from libertarian warnings against entrenched state intervention, as seen in U.S. farm subsidies. Swatantra must detail this free-economy vision to counter Congress dogmatism.

**Key points:**

- Swatantra Party opposes Congress's land ceilings and cooperative farming, advocating individual peasant-proprietors aided by credit, marketing, and technical services to maximize production.
- Ceilings at 30 standard acres release only 2 lakhs acres, unnecessary given 15 lakhs acres of available government land in Mysore alone.
- Reject 'land to the tiller' as expropriation that erodes property rights and paves way for communism; support tenants purchasing land via loans instead.
- Preserve rural harmony by assisting all elements—landowners, tenants, laborers—without state-imposed disruptions like pooling holdings.

**By Spontaneous Order**

* * *

*The following article, written by “Democrat”, first appeared in February 1960 issue of the Indian Libertarian, an independent journal of economic and public affairs. The article highlights the position of the Swatantra Party on the so-called ‘reforms’ in the agriculture sector. The author forewarns us about the dangers of state intervention led by the Congress party after the Nagpur session, which has deprived farmers of their dignity and has made them dependent on the state for their livelihood.*

The declared agricultural policy of the Congress and Government after the Nagpur session last year has been the major and decisive provocation for the formation of the Swatantra Party under the aegis of Sri C. Rajagopalachari and the initiative of the All India Agriculturists’ Federation.

The case against official policy in its twin strands of ceilings on land holdings at low levels and of cooperative farming (with pooled joint holdings) has been presented by the leaders of the Federation and others like Mr MR Masani and Congress Ministers like Sri Charan Singh of the U.P. (who has had to resign office on account of his bold opposition in Nagpur). Leading newspapers like The Hindu and The Times of India arid journals of opinion like Swarajya, Mysindia and Indian Libertarian have published the results of expert studies on the subject tending to show the dismal failure of “hasty land reforms” with ceilings and cooperative farming both in the free world and in communist countries.

The President of the All India Agriculturalists’ Federation has been demanding but a free, unprejudiced examination of the whole subject by experts like experienced Directors of Agriculture and others with special qualifications on farming. He has been demanding a committee of experts to go into the subject de novo and assuring the Government that his federation would abide by the verdict of experts arrived at free from mental reservations and surrender to dogmatic isms like socialism and communism.

But the Government have systematically evaded this fair demand. The Congress under the lead of Mr Nehru has contented itself with the statement that the subject was decided long ago by Congress resolutions from the days of the Karachi session. At Nagpur, a report of the Committee of Ministers and other high-tips appointed at Hyderabad AICC meeting was accepted, which only endorsed the decision already arrived at without any re-study of the facts de novo. Moreover, it was a committee of Congress politicians and far removed from the kind of expert body demanded by the Federation. To use the popular phrase, its work was but an eye-wash to put up a facade of re-study without doing so in any acceptable sense.

The Swatantra Party has expressed its resolute up position to the twin aspects of farming policy now being pushed into effect by Congress and Government obstinately despite the warnings of men of experience and special knowledge. It has expressed its stand in its manifesto of principles as passed in August 1959 in its Bombay convention.

The present Bangalore session of the Congress is expected to reiterate the Nagpur stand despite doubts and anxieties expressed on all sides.

First of all, it is made clear beyond doubt and prevarication that in agriculture the paramount need is for increasing production. But the Party believes that it is best attained through the continuance of the self-employed peasant-proprietor who stands for initiative and freedom and is interested in obtaining the highest yields from the land.

This is a divergence in principle. The Government policy contemplates the eventual disappearance of the independent individual farmer working on his own and helped by the members of his family. Rajaji has given the slogan therefore-for Farm and Family. President Eisenhower too in his talk at the Agricultural Fair in Delhi spoke of food, freedom, family and friendship. This stand has more than economic significance. It has an overtone of democracy and human value setting the individual in his natural context of family and neighbourhood working on tasks within his reach and deriving the value of his own work directly without dependence on others in any demeaning way, as would be the case under dictatorship.

Increasing production only necessitates a more efficient supply of aid by way of credit, marketing facilities, implements and technical advice to the farmer. The programme of the Swatantra Party insists on more intensive attention by Governmental agencies and cooperative institutions to the provision of these aids to the farmer.

It holds that joint cooperative farms need not be insisted upon as the rule in agriculture. Individual holdings may continue-and ought to continue. The remedy is not abolition but assistance for progress.

Service cooperatives are different since they do not imply the disappearance of individual holdings and their pooling into joint farms operated by managers reducing farmers to the condition of wage labourers. This connotes a diminution of personal status to the farmer, which he will never accept. Nowhere in the world has he voluntarily accepted it.

The Swatantra Party goes further and expresses disapproval of the idea of abolition of the landowner class that gets its hard work on the land done through tenants. By accepting the slogan of “land to the tiller,” Congress accepts without adequate examination the policy of abolishing the class of owners who let out land and supervise its cultivation by tenant farmers. This is supposed to be exploitation and not partnership.

The first step in realising this goal of cultivation only by small owners and the abolition of mediators between them and the Government or public is taken in the Government proposals by the imposition of low ceilings and the transfer of surplus lands to tillers and tenants with insufficient holdings, i.e. below basic or family holdings.

This provision is a dear adoption of communist doctrine, for it involves liquidation of property rights, the robbery of Peter to pay Paul. Farcical compensation may be paid but that does not deprive the transaction of its expropriatory character. Such expropriation will inevitably raise the demand for similar robbery to benefit other classes in other kinds of property-houses, industrial units, transport units etc. Such execution of the practice cannot be resisted for long. So this will function as the thin end of the wedge for the rapid transformation of free society into a communist society and state.

The Swatantra Party, therefore, asks that the programmes for improvement of agriculture and enhancement of production standards should not disturb the harmony of rural life among the elements that compose it.

This phrase is purposely vague but the time has come when it should be clarified. The elements that compose rural life are landowners, tenants, labourers and cultivators’ families. The attempt to impose ceilings hits the landlord and creates a clash of interest between him and the tenant and the landless labourer and cultivator.

The Swatantra Party should now expand its policy statement into a dear and comprehensive picture of the agricultural system that it favours in the countryside.

It should take a definite stand against ceilings on principle. The Federation has brought to light a good deal of essential data for judgment. It has shown that ceilings on holdings are entirely uncalled for since adequate areas of uncultivated fallow land are available in different parts of the country. The Swatantra Party should restate this fact supported by reliable statistics covering every State in the country. The Revenue Minister in Mysore State Mr Kadidal Manjappa recently said that Government were prepared to offer 15 lakhs of acres of Government land to Harijans and others willing to cultivate them! One thousand acres had been offered to Harijans a few years ago but they had not been taken up at all! Moreover, the extent of land expected to be released by the imposition of ceilings at 30 standard acres is only 2 lakhs of acres. Why, if only two lakhs are to be got by liquidation of surplus land held by landowners when 15 lakhs are available with Government, the expropriatory policy should be insisted on is beyond comprehension.

The Swatantra Party stands for individual freedom and accepts limitations to it only in cases of proved anti-social behaviour. It has to review the case for and against landowners having their lands cultivated through tenants. In what way is it antisocial to supervise landed property and obtain a legitimate harvest through investment? It provides work for the landless tenants who are free to save money and purchase lands for themselves. The Government, land mortgage banks and cooperative credit societies may also help the tenant to purchase lands by giving him long term loans. The State may assist the credit institutions by means of low-interest loans as was done in West European countries like Denmark, Holland and Germany.

The intermediary landowner might not have taken interest in former times but today under the inspiration of national independence and progressive agricultural departments, he will certainly respond to the duties and possibilities of his vocation. He should be given a chance before adopting policies aiming at his removal from the social system of agriculture. To give help to agriculture, it is not necessary to remove the landowner! The State can deal with the tenant, leaving tenant and owner to settle relations between them themselves on a voluntary basis.

Intermediaries come into existence in response to human needs and circumstances. Owners may have to travel to cities and accept jobs far from their lands owing to insufficiency of income. But they could make arrangements for supervision and efficient cultivation. In England, owners are penalised only if they leave their lands uncultivated or inefficiently cultivated. They are not liquidated. Nor are ceilings imposed.

The Swatantra Party refers to joint cooperative farming by the term multiple ownership and points out that it is certain to sap the incentive of the farmer, to reduce farm output and end in a collective economy and bureaucratic management.

The leaders of the Swatantra Party had thought of confining their published manifesto only to general principles leaving details of policy to be forged after attaining power. But the general public does demand that they should offer an alternative policy in sufficient detail if they are to support it intelligently with their eyes open. It is necessary therefore for the Party to offer a constructive alternative to ceilings and joint farming, assuring greater production and freedom for the farmer and his family as citizens of a democratic society. The direction announced by the party is sound but the overall picture should be developed in sufficient detail as a part of free economy and free society. With regard to agriculture as with regard to industrial and other aspects of the economy, libertarian literature has a great contribution to make to the clarification of issues and the defence of liberty.

Even in America, there is a movement to resist the encroachments of State intervention in economic affairs, of which The Foundation for Economic Education is perhaps the leading example. In the journal that it publishes named The Freeman can be found plenty of material gathered by its numerous staff as well as summaries of positions taken by freedom-loving economists and statesmen, showing conclusively the evils of State intervention and the curtailment of free economy. America has now a special problem as to how to withdraw from the policy of State assistance to agriculture particularly in the production of Food Grains. During the war, the State gave special subsidies for the production of food grains. But the result was such an abundance that the State had to step in to protect the price level and to buy up the whole production at upset prices! The policy of State support to food grains has now become a huge white elephant and American farmers are paid fantastic sums to refrain from producing above a limit. American economy in agriculture can produce enough to supply the whole world with food! So we hear of wheat being fed to pigs in America.

Political pressure and fear of loss of votes prevents politicians of both parties, Republican and Democratic, from removing the price support laws, showing how difficult it is for the State to withdraw its intervention once it gets entrenched in any sphere of the economy!

This libertarian literature has its counter-part in India as well. This journal publishes an economic supplement from time to time as well as articles specially devoted to the value of free economy and the dangers of State intervention to the country, dangers both economic by way of inflation and the wage-price spiral and political by way of damaging the independence and self-reliance of the citizens so essential for democracy. If the citizen becomes helplessly dependent on the State for livelihood and conditions of economic well-being, his capacity to think and vole straight fearlessly will suffer.

The original document can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=872752496.pdf).

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## No-detention policy is harming students

Original: https://www.spontaneousorder.in/p/no-detention-policy

Author: Spontaneous Order

Published: 2020-02-07T10:56:05.000Z

Topics: no-detention-policy, right-to-education-act, education-reform, learning-outcomes

> The Tamil Nadu government has withdrawn its decision to conduct public examination for classes V and VIII. This decision comes in response to the severe criticism from several quarters – from academicians to students, claiming that Public exams and the

**Summary:**

The no-detention policy under India's Right to Education Act (RTE) of 2010, intended to boost enrollment by prohibiting failure up to class VIII, succeeded in slashing primary dropout rates from 30.3% in 2009-10 to 4.13% in 2014-15 and raising Gross Enrollment Ratio to 99%, but at the cost of catastrophic learning decline. Secondary dropout rates surged to 17.16% as unprepared students falter at class IX exams, while ASER reports show 58% of class III students in 2016 and 50.8% in 2019 unable to read class I text despite near-universal enrollment. From a classical-liberal lens, this exemplifies government intervention's unintended consequences: no incentives for teachers or students lead to stagnation, as public choice theory predicts, prioritizing inputs like enrollment over outcomes. The policy fosters a teacher-centric system resistant to performance metrics, driving parents to private schools amid regulatory strangulation via RTE. The author advocates structural reforms—reinstating simple, low-stakes exams focused on basic skills, measuring outcomes, and dismantling bureaucratic cobwebs—to harness India's demographic dividend through skill-based foundations, warning that no-detention grants access to schools, not genuine education.

**Key points:**

- No-detention policy under RTE increased primary enrollment but caused learning collapse, with over 50% of class III students unable to read class I text per ASER.
- Sudden exams at class IX trigger 17.16% secondary dropouts, merely delaying failure by three years.
- Reform by reinstating low-pressure exams for classes III, V, VIII, emphasizing outcomes over inputs to align incentives for teachers and students.
- Reduce government regulations on private schools to enable choice and competition, addressing public school desertion.

**By Benolin Kannadasan**

* * *

The Tamil Nadu government has withdrawn its decision to conduct public examination for classes V and VIII. This decision comes in response to the severe criticism from several quarters – from academicians to students, claiming that Public exams and the no-detention policy may act as a deterrent for children from attending school. Although this argument may seem convincing, like everything else, education in India is much more nuanced.

**Understanding no-detention**

The rationale for no-detention comes from various committee reports since the British period like the Hartog Commission (1929) to Kothari Commission (1964-66) and various Central Advisory Board of Education (CABE) committee reports among others. The committees deemed detention to be ‘[Wastage](https://mhrd.gov.in/sites/upload_files/mhrd/files/document-reports/AssmntCCE.pdf)’ of early years that pushed children out of schools. So, in the pursuit of inclusive education, the government passed the Right to Education Act ([RTE](http://righttoeducation.in/know-your-rte/about)) in 2010. The Act, among other things, banned schools from detaining children in the same class up until class eight, *i.e*, a school cannot fail any child for poor performance, taking it further, no exams up until ninth standard.

The basic argument stems from the fact that failure discourages and demotivates thereby pushing children out of school, especially in poor areas. This argument bore fruit when drop-out rates of primary schools plummeted from [30.3](https://mhrd.gov.in/sites/upload_files/mhrd/files/statistics/SSE1112.pdf) during 2009-10 to [4.13](https://mhrd.gov.in/sites/upload_files/mhrd/files/statistics-new/ESAG-2018.pdf) in 2014-15. More children became students, i.e, the Gross Enrollment Ratio (GER) increased up to [99%](https://mhrd.gov.in/sites/upload_files/mhrd/files/statistics/SSE1112.pdf) in 2014-15. All these improvements are in a way the direct result of RTE and the No-detention policy advocated by it. But as always in case of government intervention, there is a huge area of uncharted territory where the unintended consequences loom large.

**Perfect is the Enemy of Goo**d

As mentioned earlier, the primary drop-out rate for the year 2014-15 is 4.13 but the rate increased exponentially to [17.16](https://mhrd.gov.in/sites/upload_files/mhrd/files/statistics-new/ESAG-2018.pdf) for secondary school, *i.e.* when they reach class nine. Children find it difficult to cope up with sudden examination when they reach the ninth grade and thus drop out of school. Thus the *perfect* legislation for making education inclusive, in essence, has only pushed children from dropping out of school by three years. One might still consider the legislation a success because at least it provided elementary education for all. Well, no!

Elementary education is the basis of any developed economy but in India, it is in tatters.  The quality has been compromised so much so that in 2016, [58%](https://www.indiabudget.gov.in/budget2017-2018/es2016-17/echapter_vol2.pdf) of children in class III were unable to read class I level text. According to the Annual Status of Education Report [(ASER](http://img.asercentre.org/docs/ASER%202019/ASER2019%20report%20/aserreport2019earlyyearsfinal.pdf)), in 2019, 50.8% of children in class III were not able to read class I level text but almost 90% of children were enrolled in some kind of educational institution. This provides for a paradox where an increasing number of children are going to schools but they don’t seem to learn better.

As Madhav Chavan, the president of Pratham Educational Foundation which releases ASER writes: *Just when it seemed like the ASER results were getting repetitive, the Right to Education Act was passed (in 2009) and suddenly things began to change. In ASER 2010, we first noticed that the proportion of children in private schools was growing and learning levels had begun to decline. But the Ministry of Human Resource Development officially neither recognised ASER nor did it accept its findings as far as learning levels were concerned.*

In search of the perfect silver bullet to rid the entire education system of its flaws, the government clogged the system with more problems which can only be resolved by structural review of the system with hard facts and data.

**Inputs and Outcomes**

Governments are reluctant to reform, their cobweb bureaucracy and intense political rhetoric wouldn’t let them. So when they go back on their previous arrangement, it means things are really bad. These changes are to be really studied rather than just flying out the most basic argument against it. No-detention policy does not work, period! It creates an environment suitable for stagnation and irresponsibility, prerequisites for a dysfunctional bureaucracy. There is no incentive for teachers to teach and no incentives for students to learn because there are no consequences for poor performance. One thing we learn from public choice theory is that people won’t do anything until the incentives are right. Nobel Prize winner Abhijit Banerjee puts it perfectly: The public education \[system\] is a system for the teachers, by the teachers and in the interests of the teachers. This is a system which essentially does not want any metric of performance. Measuring outcomes rather than inputs. The existing system focuses only the inputs – enrollment ratio, money invested, syllabus completion, food provided among others. Let’s assume there is a *Paati* who makes *vadais*. She can invest and cook many *vadais* continuously but if she doesn’t taste it, she can’t know if it really tastes good and if people will like it. Now, the taste may depend on many factors – salt, pepper or the flour but the only way to find it is to taste the outcome, simple as that!

Outcomes of the education system can be effectively measured with exams thereby making them absolutely necessary. Vivek Kaul in his book *[India’sBig Government](https://www.amazon.in/Indias-Big-Government-Intrusive-Hurting/dp/B06XW87KBM)*, reports an interesting incident in Rajasthan. Parents met the then Chief Minister Vasundra Raje during her outreach programme and suggested that the ban on exams was not in the best interests of children. A September 2014 news report suggested that the state was considering exams in Standards III, V and VIII.

**Testing times**

Exams in India has become a societal problem due to the pressure applied to the students to score more marks. The reason for making examinations, especially public board examinations, pressurizing has many factors but the factors are beyond the scope of this article. But the problem of primary testing is rather easy to solve. If a government wants more people to pay taxes, it lowers the tax slabs and does not cancel taxation altogether; likewise for more people to get basic education, testing and exams have to be made simpler instead of cancelling the exam altogether. Primary results could be declared separately for each class, exams could focus more on basic skills, arrear based approach are some of the suggestion to make exams less intense for primary school goers.

Due to continuous mismanagement and ill-performance, government schools are being deserted in favour of private ones. ASER reports that parents are enrolling boys increasingly in private schools while girls are left back at public schools. The private schools too are being strangled by ‘*good* intentions’ through legislation like RTE making them comply with unnecessary regulations. People must stop making silly arguments like students of bureaucrats and politicians should be allowed only to public schools and start addressing the structural issue of education and the consequences of government intervention in India.

India houses the highest working-age population, something economists call the Demographic Dividend. To exploit this and propel India into higher growth, primary education is a prerequisite. As the future is moving towards skill-based rather than degree-based recruitment, it is necessary to develop a basic foundation without which India might also miss the fourth bus for growth. One must understand that these no-detention policies and cancellation of exams only give the right to schools and not education. Schools do not mean education the same way that growth does not mean development.

[Read More on the Right to Education Act](https://spontaneousorder.in/tag/right-to-education-act/)

This post [originally appeared](https://article19fos.blogspot.com/2020/02/mute-spectator-dealing-with-no-detention.html) at Article 19 Blog.

* * *

**About Benolin Kannadasan**

Benolin is an engineering graduate from the SRM Institute of Science and Technology, Chennai. Inspired by Liberal thought, he is currently pursuing his Bachelor of Arts in Political Science from Tamil Nadu Open University. He has a passion for writing and free thought.

## SO Musings: The Mission of Libertarianism

Original: https://www.spontaneousorder.in/p/so-musings-libertarian-mission

Author: Spontaneous Order

Published: 2020-02-01T10:03:59.000Z

Topics: libertarianism, collectivism-critique, limited-government, education-reform

> The following article, written by M A Venkata Rao first appeared in the October 1958 issue of The Indian Libertarian magazine. In Europe and America, a branch of the Enlightenment school of thought that prepared for and preceded the French Revolution de..

**Summary:**

The article traces the historical divergence from Enlightenment individualism and capitalism, which fueled liberal democracy and progress via free enterprise, to socialist and collectivist ideologies that arose from dissatisfaction with bourgeois exploitation post-French Revolution. Thinkers like Proudhon, Fourier, Saint-Simon, and especially Marx promoted equality and fraternity over liberty, leading to anarchism, Fabianism, and violent communism, culminating in the 1917 Russian Revolution's global dominance. This 'collectivist illusion of the epoch' eclipses figures like Adam Smith and J.S. Mill, expanding state power amid technological complexity and subordinating individual liberty. Libertarians, inspired by American individualists like Josiah Warren and Robert Owen's experiments, critique state overreach, monopolies, welfare distortions, inflation, and public debt that burden economies. They advocate returning to an individualist economy ensuring 'equal liberty' for free enterprise, regulated only against fraud and unearned profits; reforming land to bar parasitic holders; limiting state to police and justice; and revamping education to integrate work, culture, self-reliance, and cooperation, eradicating class antagonism. By cultivating an elite through discussion and group life, libertarians aim to dissolve collectivism for a free, cooperative humanity.

**Key points:**

- Libertarianism counters dominant collectivism by restoring individualist economy with equal liberty in free enterprise, checked only against fraud and monopolies.
- Reform land ownership to keep it with productive users, eliminating unearned income from parasitic holders.
- Limit state role to police and justice, ending welfare distortions, inflation, and public debt burdens.
- Transform education to foster self-reliance, cooperation, and integration of work and culture, dissolving class antagonisms.
- Build a gradually increasing elite via discussion, propaganda, and group life to usher in free, cooperative humanity beyond the collectivist illusion.

**By Spontaneous Order**

* * *

*The following article, written by M A Venkata Rao first appeared in the [October 1958 issue](http://indianliberals.in/~_admin/pdflanguage?id=877412702.pdf) of [The Indian Libertarian](http://indianliberals.in/periodicals-details?id=28) magazine.*

In Europe and America, a branch of the Enlightenment school of thought that prepared for and preceded the French Revolution developed a strand of socialism. While the central stream of inspiration released by the Revolution guided thought and reconstruction into channels of national democracy under the lead of the new commercial and industrial classes (whom Karl Marx called the bourgeoisie) side streams of what may be roughly called “socialist thought” sprung up seeking to mould social institutions including property and State on equality and fraternity rather than on liberty. The liberal democratic State evolved all over the continent and in North America on the basis of individualism which in the realm of economics assumed the shape of capitalism.

The leaders of the French Revolution and of the subsequent democratic evolution in England and other States evolved a philosophy of individualism stressing the key role of free economy or freedom of enterprise as the pivot of progress.

Socialist thinkers like Proudhon, Fourier and Saint Simon were not satisfied with the early decades of the working of capitalism in the Napoleonic era and the Restoration of the Bourbons. They saw clearly that the ideals of equality and fraternity that imparted such a glow to the revolutionaries as if they were the creators of a new dawn of perfection were jettisoned by the bourgeoisie. The new enterprise and wealth joined hands with empire and were concentrated in the hands of the new rich, a small section of the nation. The bulk of the masses remained poor and were exploited by the bourgeoisie almost as much as the aristocracy oppressed the peasants in their ancestral estates.

In England too discontent at the new exploitation of the bourgeoisie strengthened and expressed itself in a number of movements of which the Chartist struggle was the chief. Factory Acts and the First Reform Act of 1832 were the first symptoms of the new social conscience. The new world of commerce and industry of the Industrial Revolution came to be defended by liberal democratic thought of which Bentham, James Mill and his more famous son John Stuart Mill were the principal protagonists. Their work in economic, legal and political thought guided the development of democratic institutions and civil rights throughout the nineteenth century.

But towards the end of it, new streams of thought came to be felt making for socialism and collectivism. One was the idealism of T. H. Green and Bernard Bosanquet, which gave a new ethical basis to the State and coalesced in its effect with socialism. Fabianism assumed greater importance as the source of reform and welfare as the century turned the corner and the Labour Party adopted it as the sheet-anchor of their policy. Thus British thought sublimated the hate-filled class-war doctrine of violent revolution sponsored by Karl Marx into its own characteristic evolutionary, non-violent, parliamentary way of introducing socialism or collectivism. Today it has become the official philosophy of the Labour Party and the climate of thought generally among the intelligentsia of all parties.

On the continent, the early part of the century began with the dominance of the Positivism and Religion of Humanity of August Comte. His scientific humanitarianism coloured the intellectual landscape in France and was reinforced with the integral or communitarian forms of socialism sponsored by Proudhon, Saint Simon and Fourier. These thinkers tried to cure property of its individualism or selfishness by suggesting methods of sharing it in communes or phalansteries of various kinds. They opposed also the centralising bureaucratism of the expanding State.

A sideline of thought adopted forms of anarchism in trying to resist the crushing power of the Omni-competent State. Prince Kropotkin and Bakunin became the principal representatives of this anarcho-communist trend of thought.

But the most successful of these trends was that represented by Karl Marx, partly because he founded the International Working Men’s Movement which acquired influence from the middle of the century and ultimately became the dominant form of socialism. It has been the misfortune of humanity that it was the violent, class-war doctrines of Karl Marx that got crystallised as the authentic form of socialism and the sole scientific system and saviour of labour throughout the world. The adherence of Lenin and the Russian revolutionaries and that of the German social democrats under Lassalle contributed to enthrone Marxist communism in this dominant position. The Russian Revolution of 1917 and its triumphant career to its present position of World Power challenging the whole free world has added hypnotic power to this collectivist, conspiratorial, violent form of communism.

Communism has today become the climate of thought in most countries. Even where a small part of the intelligentsia is free from the prevailing views, they are influenced all the same to a more or less extent, so that the cause of freedom is put on its defence. It is not State aggrandisement that has to explain and justify itself but on the other hand the claim of human liberty and individuality!

The capitalist Robert Owen fell in with the French socialists and initiated worker’s communes or settlements in England, Scotland and even the United States in the early decades of the last century. An American thinker called Josiah Warren joined Owen’s socialistic settlement and was inspired to start his own village settlements on a more individualist basis. He developed a time and labour theory of value in his own way. In Karl Marx’s hands, the theory was distorted to become the surplus theory of value in order to support the thesis that all capital is robbery of the value created by labour. In Warren’s hands, it became the foundation of a new equalitarian individualism which asserted the right of each individual to the proceeds of his labour as measured by the time taken in producing the product of industry. Measurement of labour contributions became a subtle and vexatious calculation and source of trouble among members of settlements.

His example inspired a line of thinkers to reflect on the social aspects of individual liberty. Stephen Pearl Andrews developed the outlines of a science of society. Others developed the aspects of cooperation and mutual aid in banking and other forms of economic production and exchange. Others specialised in problems of currency and inflation. Others investigated the effects of State interference in banking, currency and economy generally. These thinkers of the libertarian school in America developed reflection both into the role of property, its meaning, function and limitations and into the role of the State in social affairs and individual life.

The general line of thought in regard to both aspects was to discover the degree of waste and frustration and complication involved in anti-social uses of property such as are indulged in by monopolies and cartels by the State outrunning its legitimate field of police and justice and by welfare policies of robbing Ram to pay Kishen. These excesses of the individual and the State lead to ever-rising costs of production, to excessive pressure of economic groups on the State to get something for nothing, to rising inflation and confusion of values all round and to the collapse of confidence in currency and economic production generally and to the emergence of unnecessary economic crises with over-or under-production and unemployment.

The remedy is to return to individualist economy regulated by provisions against monopolies to safeguard the equal liberty of all. This principle of the equal liberty of all for engaging in free enterprise within the law (to exclude fraud and the annexation of unearned profits) is sufficient, say the libertarians, to justify the imposition of checks on those who take undue advantage of the freedom granted.

If these principles are intelligently followed, it is urged, the State and society will be freed from the excessive burdens from which they are suffering at present under the influence of collective ideas. They will be free from much of the present load of public debt. The State will be compelled by individualist citizens to live within its means and not to create artificial money by issue of loans and not to burden the present generation by ever-rising loads of interest on public debt. Though the principal is supposed to be paid by future generations, as a matter of fact, it is the present generation that has to pay heavy interest. These interest payments to one class of citizens namely bond-holders will distort the economy by conferring on them more purchasing power than on the rest of the community. This distorts the economy in favour of unearned incomes annexing too much of the capital resources of the community towards the satisfaction of a few, leaving the demands of the vast majority starved and unfulfilled or under-fulfilled.

The central stream of thought in advanced democratic countries like the USA is that of liberal democracy formulated in the early and middle periods of the nineteenth century. Today technological industry, the growth of population and the advance of communication media-radio, newspapers, wireless, aeroplane for passenger and goods traffic etc. have all conspired to confer more and more powers on the State to regulate the myriads of new inter-relations among citizens. Organisation has tended to become ever more complex and interwoven. Hence the feeling of inevitability in regard to the growing tendency towards collectivism and the expansion of State power.

Collectivism has become the *illusion of the epoch* today in which the rights and duties of the individual citizen as a self-determining and self-realising person are lost to view. Individuals and small groups feel lost in the vast agglomerations of large nation-States. Even small States feel a prey to massive influences and pressures impinging into their life from outside.

The wheel has come full circle. The individualist philosophy of John Stuart Mill and his followers which guided liberal democracy is today eclipsed by the communist collectivism of Karl Marx, particularly in respect of economy. Adam Smith and Mill are both put into the shade. They have become “Gods that failed”.

But today doubts and misgivings are being felt in many quarters that we have embraced a remedy worse than the disease. After all, the only known reality in human life is the individual centre of experience, of thought, feeling, action and fellowship-individual men and women.

Sociologists are formulating theories of the right relationship between primary and secondary groups. The former like the home, neighbourhood and religious or educational fellowship are primary in moulding human life. They deal with individuals as full rounded persons and not as fragments-hands or members or customers or wage earners or employers or officers or rank and file anonymous common men. Secondary associations like occupations, amusements or casual groups as in hotels and railway carriages are necessary but if they crowd out much of the scene and activity of life, man is atomised and impoverished. Neuroses come to prevail. Suicides, mental aberrations, juvenile delinquents, divorce proceedings, prostitution, gambling, alcoholism, corruption in economic and political life-will all make themselves felt in disturbing degrees.

Libertarians call for a greater simplification of institutions, a reform in the use of property and a return to the limited role of the State in social life so that the submerged individual may be released for a new career of purposeful, healthy activity in which science and the other achievements of the modern spirit may be used more wholesomely to help men and women to fulfil themselves in pursuits within their reach and power of assimilation.

The libertarians call for a new relationship to land, so that unearned income may not accumulate in hands that do not contribute to production. Since land is limited unlike other forms of industrial or commercial property, it needs to be kept in the hands of people who actually use it for production, eliminating functionless or parasitic holders.

The libertarians are also interested in education. They are exploring the avenues whereby the individual may be led through self-directed thought and investigation to discover the right relations between individual and society. The new aim is to strengthen dispositions of cooperation and individual self-reliance during the process of learning. It is also necessary to destroy the roots of class antagonism by imparting the joys and skills of using tools so that the ancient class distinction of workers and lords may disappear in the minds of men and women. Work and culture should be integrated.

Freedom in economic and political life has to be supported by a new psychology of cooperative and creative living. fostered in creative education inspired by a vision of human unity and human progress in free and joyous fellowship.

If a gradually increasing *elite* imbued with these ideals could be developed through discussion, propaganda and group life, the collectivist *illusion of the epoch* could be made to melt and a better day of happy, free, cooperative humanity can be ushered in by and by. This is the aim of the Libertarian Social Institute.

*The original document can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=877412702.pdf).*

*[IndianLiberals.in](http://indianliberals.in/index) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Doubling farmers’ income the easy way

Original: https://www.spontaneousorder.in/p/doubling-farmers-income-the-easy-way

Author: Spontaneous Order

Published: 2020-01-29T21:23:06.000Z

Topics: agricultural-policy, farmers-income, market-restrictions, export-bans

> Over the last few years, Prime Minister Narendra Modi has often promised that his administration is working towards doubling farmers’ income by 2022. With that promise, the government has increased the minimum support prices and has taken multiple initi

**Summary:**

Prime Minister Modi's promise to double farmers' income by 2022 through measures like higher minimum support prices and PM Kisan Yojana's ₹6,000 annual support has fallen short because government restrictions prevent farmers from selling produce at market-chosen prices. Despite generous subsidies, loan waivers, free water, electricity, and tax breaks over seven decades, farmers remain poor due to Agriculture Produce Marketing Committee (APMC) laws mandating sales only in designated mandis, where prices can be 10-20 times below retail levels. Export bans and bureaucratic interventions exacerbate this; for instance, onion export bans halted profits when prices rose. An OECD 2018 study estimates these restrictions caused a 6.2% annual income loss from 2014-16, while India spends $30bn yearly on aid but deprives farmers of $40bn via price gaps. A 2001 Task Force found a negative subsidy of ₹3,00,000 crore from 1980-2000 due to market limits. From a classical-liberal view, politicians' 'generosity' masks suppression of farmers' freedoms, and true income doubling requires removing these barriers to let farmers sell freely domestically and internationally.

**Key points:**

- APMC laws force farmers to sell only in designated mandis at prices 10-20 times below retail.
- Export bans, like on onions during high prices, prevent farmers from profiting internationally.
- OECD 2018 study shows restrictions caused 6.2% annual income loss for farmers from 2014-16.
- India provides $30bn in agricultural aid yearly but deprives farmers of $40bn through price controls.
- Governments should eliminate market restrictions to allow farmers to sell in chosen markets on their terms.

**By Sudhanshu Neema**

* * *

Over the last few years, Prime Minister Narendra Modi has often promised that his administration is working towards [doubling farmers’ income by 2022](https://economictimes.indiatimes.com/news/economy/agriculture/govt-to-double-farmers-income-by-2022-by-focusing-on-7-sources-of-income-says-economic-survey/articleshow/70074052.cms?from=mdr). With that promise, the government has increased the minimum support prices and has taken multiple initiatives, including the [PM Kisan Yojana](https://www.pmkisan.gov.in/) under which the government provides ₹6,000 income support per year to farmers.

However, the government is missing out on a simple solution – letting the farmers sell their products at the best available prices in the market of their choice. The Indian government is probably one of the most generous governments in the world when it comes to farmers. For seven decades, the central and state governments have provided generous subsidies, loan waivers, minimum support prices, tax breaks, free water and electricity, along with numerous other benefits. Why then are the farmers still among the poorest in the country?

The answer is simple; farmers are poor because the government has taken away their right to sell their produce in the market of their choice. In the domestic market, this happens via laws on Agriculture Produce Marketing Committees, which force the farmers to sell their produce only in the designated *mandis*. This means that farmers cannot sell to the consumers or to an unauthorised agent on remunerative prices. The situation is so bad that sometimes farmers are paid 10 or 20 times less price at these *mandis* than the prevailing retail prices.

In the international market, the government of India outright bans selling many agricultural products and even when it allows, there are unpredictable and continuous interventions by bureaucrats. For example, take the selling of onions, as soon as some farmers started making profits due to the high prices of onions, the government banned its exports and hastily imported onions from neighbouring countries. If the government is keen on doubling farmers’ income, why did it not let them earn from higher onion prices?

An [OECD study](https://www.oecd.org/regional/agricultural-policies-in-india-9789264302334-en.htm) in 2018 found that the ban on exports of many commodities, combined with other restrictions led to an average annual loss of 6.2 per cent income from 2014-16. Imagine that, for all the support the government claims to provide farmers, it stole 6.2 per cent of their earnings. Over the years, this amount has added up to hundreds of billions of dollars in lost wealth for our farmers.

While the generosity towards the farmers is seen among politicians of all hues and colours regularly, the governments’ suppression of their income is not so commonly known, and our leaders conveniently ignore it. Although India spends around $30bn a year on direct aid to agriculture, [it also deprives farmers of $40bn of income](https://www.economist.com/asia/2018/07/12/indias-government-claims-to-subsidise-farmers-but-actually-hurts-them), given the difference between international and domestic prices of crops.

The situation has remained the same for decades. In 2001, a Task Force on Agriculture headed by Sharad Joshi [found that farmers were provided with a negative subsidy of ₹3,00,000 crore](https://swarajyamag.com/economy/we-need-a-marshall-plan-for-indian-agriculture) from 1980 to 2000 due to various government interventions and limits on access to international markets.

If the government sincerely about doubling farmers’ income, it should simply let them sell in the market of their choice on their own terms.

[Read More: Farmers, Middlemen and the Way Out](https://spontaneousorder.in/farmers-middlemen-and-the-way-out/)

* * *

**About Sudhanshu Neema**

Sudhanshu is a lawyer and economist working as Manager, Research at the Centre for Civil Society. He served as a Frederic Bastiat Fellow at the Mercatus Center at George Mason University in 2015-16.

## Local Government and Grassroots Democracy in India

Original: https://www.spontaneousorder.in/p/local-government-grassroots-democracy-in-india

Author: Spontaneous Order

Published: 2020-01-27T19:04:15.000Z

Topics: decentralisation, local-government, panchayats, self-governance

> After eight long years, the time has come for rural Tamil Nadu to elect its local government representatives. The area covered by 156 Panchayat Unions went to the polls to elect 260 ward members of district panchayats, 2,546 members of panchayat unions ..

**Summary:**

The post advocates for enhanced decentralisation and localisation of government in India, prompted by rural Tamil Nadu's recent elections across 156 Panchayat Unions, electing 260 district panchayat ward members, 2,546 panchayat union members, and 37,830 panchayat members. From a classical-liberal perspective, decentralisation embodies the practical end of self-governance, contrasting Gandhi's village-centric vision sidelined by Congress leaders' preference for progressive cities and socialist centralisation, which fueled riots, secessionism, and inter-state instability during Indira Gandhi's era. Biological evidence from Tony Joseph's Early Indians debunks Aryan-Dravidian divides, affirming free migration—enshrined constitutionally—as culturally enriching, exemplified by Marwaris boosting Tamil Nadu's economy. Bureaucratic power-lust persists, illustrated by the post-WWII retention of the Churchill Cigar Assistant department for absurd procurement. Localism efficiently solves local problems, reduces corruption via vigilant taxpayers, and builds social capital, as Zingales' study of medieval Italian self-governing cities shows higher non-profits, organ donation, and integrity today. Despite 73rd and 74th Amendments granting legal status, states resist devolution; the post urges reinvigorating local bodies against political heirs and voter apathy for genuine grassroots democracy.

**Key points:**

- Decentralisation empowers local solutions to local problems, fostering self-governance and efficiency over distant central elites.
- Historical centralisation under socialism bred instability, parochialism, and bureaucratic entrenchment that persists today.
- Free internal migration enhances cultures and economies, countering myths of indigenous purity.
- Local self-governance reduces corruption and apathy by making taxpayers vigilant and building social capital, as evidenced by Italian historical studies.
- Voters must prioritize local elections to reclaim power from thugs and heirs, realising the 73rd and 74th Amendments' potential.

**By Benolin Kannadasan**

* * *

After eight long years, the time has come for rural Tamil Nadu to elect its local government representatives. The area covered by 156 Panchayat Unions went to the polls to elect 260 ward members of district panchayats, 2,546 members of panchayat unions and 37,830 members of panchayats and it is incumbent upon us to talk and discuss more decentralisation and localisation of government. The importance is rooted on two grounds; namely, India claims it has a three-tier government, and more importantly, decentralisation is the practical end of self-governance.

**India and Local Government**

The story of local government in Free India started with Gandhi’s love for villages, but other congress leaders shunned the idea for *progressive* cities and industrial complexes. The love story thus had effectively no place in the otherwise bulky constitution.

Decentralisation, though idealised, was put in the backseat given the continuous riots and secession movements throughout the early years of the republic. The move towards socialist thinking further pushed the prospect of localising the government and felt the distribution of wealth more important than the distribution of *actual* power.

Further centralisation during the Indira years even made state governments prone to the whims of the centre brewing instability. As a poster example of how ‘*good’* government intention might lead to unintended adverse consequences, states grew more against each other which was further amplified by problems in sharing and co-existing thereby putting narrow parochial interests like identity above the nation and public well-being.

**Sons of Ideas**

Tony Joseph, in his recent book *[Early Indians](https://en.wikipedia.org/wiki/Early_Indians),* discusses the four waves of migration into the sub-continent since mutation gave way to the modern Homo sapiens in Africa. He goes on to explain how intermixing of the population was rampant so much so that there are no pure breeds in the sub-continent now; even the isolated tribes, for that matter, are not pure. These biological facts make the racial divide (Aryan and Dravidian) irrelevant and thereby rendering indigenous identity out of touch with the modern world.

Although safeguarding ‘indigenous’ cultures is important, it is equally important to realise that migration does not damage cultures but only enhances it. Movement of people from one state to another is one of the fundamental rights enshrined in the constitution, and it has only been advantageous to both the migrating community and the state which absorbs such migration. To take an example, the *Marwaris* of Tamil Nadu have a substantial role to play in the growth of the local economy as they provide credit and livelihoods to the ‘locals’.

**Power Corrupts, Absolute Power Corrupts Absolutely**

Indian red-tapism is the by-product of the license-raj whose effect still lingers and retards the country’s economy. The important aspect of the bureaucracy is its reluctance to let go of power; however small it might be. This lust for power is straight out of the socialist model, where proximity to the government is directly proportional to the growth of the person (company).

This reluctance in the shedding of unnecessary power is aptly illustrated with the following example. In the mid-1960s, a department under the government of Tamil Nadu named CAA demanded funds for the functioning of the department. To know what CAA is, we need to go back to the 1940s.

During the Second World War, trade between Britain and South America was curtailed. Winston Churchill, who was an ardent fan of the Cuban cigars, found it very difficult to let go off steam during those troubled times. To his delight, he had found an alternative in Tamil Nadu which he declared to be second best cigar in the world. So the British set up a department whose sole function was to procure and send cigars to Britain so that Churchill could smoke his cigar. It was named *Churchill Cigar Assistant* or CAA.

The war ended, Britain *exited* for the first time and India became a republic, but still, our bureaucrats could not let go of the funds and power of an essentially useless department. That is the extent of our bureaucracy’s lust for power.

**Rationale behind Localisation**

The rationale behind the localisation of government is obvious – Local problems can only be solved locally. It is desirable and efficient in every which way. To illustrate this, former RBI governor Raghuram Rajan in his book *The Third Pillar* cites an example from Italy.

*An interesting historical study by Luigi Zingales and others highlights the long-term benefits of localism. They find that Italian cities that achieved self-government in the Middle Ages have higher levels of social capital today—as measured by more non-profit organisations per capita, the presence of an organ bank (indicating a willingness to donate) and fewer children caught cheating on national exams. They conclude that self-governance instilled a culture that allowed citizens to be confident in their ability to do what was needed and to reach goals. Decentralising powers to communities may thus reduce apathy and force their members to assume responsibility for their destinies rather than blaming a distant elitist administration*.

Another important reason for decentralising political power is to reduce corruption. Although we have come a long way from the times of Rajiv Gandhi’s one-rupee statement, we still have a long way to go. It does not help to reduce corruption by creating another “new” *department* to control corruption done by other departments. The *Lokpal* and *Lokayuktas* might provide sellable short-time solutions, but as time goes on, they themselves become part of the rusting system giving in to their flawed bureaucratic setup which it was set up to reform. Decentralisation of funds and power makes the public taxpayers more vigil, and it is also easier to judge the efficiency of the government by what can be seen by the *local* voters in their *local* neighbourhood.

**Lost & to be Found**

Local bodies were the locus of the erstwhile self-government movements. From Annie Besant to Gandhi, all great leaders focused on the enhancement of autonomy for the local governments. The developed cities of British India were developed due to robust local governments. Mayors were the political heads of the cities; they were part of the executive. Great names like Rajaji, *Periyar* EVR were all part and leaders of local governments. There is a need today to reinvigorate our local bodies. The constitutional posts under the local government should not be the bastions of political heirs and thugs who held such posts to milk out money and throw the rule of law on its head.

We seem to forget that the most important part of a democracy is its people and nobody else. Even though the 73rd and 74th amendment to the constitution provided legal status to the local bodies, the implementation of the said amendments seems to not be in touch with reality. It is also interesting to see states which advocate fiercely for federalism and decentralisation in their dealings with the centre shy away from further devolution of power and the establishment of the local political marketplace.

It should also be said that there is still a prevalence of backward thinking in the minds of voters and apathy for local elections because there is not much drama like the general and state elections. But such apprehensions shall be removed once they start seeing *real* improvements. Voters, thus, must realise the true potential of the local bodies and take part in the most important of elections – local body elections, for furthering the cause of democracy.

[Read More: SO Musings: Do We Deserve Our Prime Ministers?](https://spontaneousorder.in/so-musings-do-we-deserve-our-prime-ministers/)

This article [originally appeared](https://article19fos.blogspot.com/2020/01/mute-spectator-grassroot-democracy.html) on 02 January 2020, at Article 19 blog.

* * *

**About Benolin Kannadasan**

Benolin is an engineering graduate from the SRM Institute of Science and Technology, Chennai. Inspired by Liberal thought, he is currently pursuing his Bachelor of Arts in Political Science from Tamil Nadu Open University. He has a passion for writing and free thought.

## SO Basically – Episode 10 | Angrezon ke Zamane ke Jailer

Original: https://www.spontaneousorder.in/p/so-basically-episode-10-angrezon-ke-zamane-ke-jailer

Author: Spontaneous Order

Published: 2020-01-27T14:49:24.000Z

Topics: police-brutality, caa-protests, jnu-violence, fundamental-rights

> Recently, the entire nation has been in a tense state due to the unrest following the Amendment to the Citizenship Act. People have taken to the streets to protest against the Amendment in many parts of the country, and the police have tried their best ..

**Summary:**

The post critiques the inconsistent police responses amid unrest over the Citizenship Amendment Act (CAA), where authorities used lethal force to suppress peaceful protests—a fundamental right under Article 19—across the country, while standing by as 50 goons invaded Jawaharlal Nehru University's (JNU) campus, beating students and vandalizing hostel property. This disparity raises questions about why dissent is quashed but mob violence ignored. In 'SO Basically – Episode 10 | Angrezon ke Zamane ke Jailer,' Spontaneous Order digs deeper into these issues from a classical-liberal perspective, emphasizing the protection of individual rights against state overreach. The Centre for Civil Society's initiative portrays modern Indian history through liberal thinkers challenging the 'banality of pseudo-socialism,' a false political order alien to the independence movement and native traditions, advocating for a freer political dynamic that could transform the nation.

**Key points:**

- Police lethally suppressed peaceful CAA protests despite their status as a fundamental right.
- Police remained passive during a mob of 50 goons' attack on JNU students and property.
- The episode investigates this enforcement hypocrisy.
- Spontaneous Order critiques pseudo-socialism via classical-liberal historical analysis.

**By Spontaneous Order**

* * *

Recently, the entire nation has been in a tense state due to the unrest following the Amendment to the Citizenship Act. People have taken to the streets to protest against the Amendment in many parts of the country, and the police have tried their best to suppress this dissent, that too with lethal use of force.

On the other hand, the police stood as a mute spectator as a mob of 50 goons entered the campus of a national university (JNU) & beat up students over and above vandalising hostel property.

If protesting peacefully is a [fundamental right](https://indiankanoon.org/doc/1218090/), why is the police being able to suppress dissent?

In this episode of SO Basically, we dig deeper to answer this question.

[Watch previous SO Basically episodes.](https://spontaneousorder.in/?s=SO+Basically)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Pradhan Mantri Ujjwala Yojana is Leaking

Original: https://www.spontaneousorder.in/p/pradhan-mantri-ujjwala-yojana-leaking-scam

Author: Spontaneous Order

Published: 2020-01-22T15:19:59.000Z

Topics: lpg-subsidy, tax-distortions, government-waste, cag-audit

> The Comptroller and Auditor General of India (CAG) on 11 December 2019 tabled a report on the Pradhan Mantri Ujjwala Yojana. The report had widely flown under the radar of almost all newspapers and most journalists, until Faye D’Souza, pointed it out on

**Summary:**

The Pradhan Mantri Ujjwala Yojana (PMUY), launched in 2016 to provide 50 million (later expanded to 80 million) free LPG connections to BPL women with an ₹800 billion allocation, suffers from glaring inefficiencies and likely scams as per the 2019 CAG report. Key issues include 1.88 lakh connections issued to males despite women-only eligibility; 2 lakh BPL consumers averaging over 12 cylinders annually and 13.96 lakh taking 3-41 refills monthly, suggesting black marketing; 3.44 lakh instances of multiple same-day refills; 60% of surveyed beneficiaries not fully shifted to clean fuels; unrecoverable stove loans; and absence of performance indicators. From a classical-liberal viewpoint, these stem from flawed policy: 18% GST on commercial LPG versus 5% on domestic creates arbitrage incentives for diverting subsidized cylinders, compounded by unverified Aadhaar linkages, state-owned firms' push for connections without usage monitoring, and involvement of distributors/middlemen. A conservative back-of-envelope calculation estimates over ₹2,120 crore in diverted transactions from 20.12 lakh high-refill instances, potentially tens of thousands of crores including subsidies—revealing government incapacity, corruption risks, and policy distortions without proper planning or metrics. The CAG urges full database scrutiny, yet the Ministry has not investigated.

**Key points:**

- CAG report uncovers PMUY irregularities like 1.88 lakh male connections, extreme refill patterns in 13.96 lakh BPL households indicating black marketing, and 3.44 lakh same-day multiple refills.
- Differential GST (18% commercial vs 5% domestic) incentivizes diversion of subsidized LPG cylinders to commercial use.
- Conservative scam estimate exceeds ₹2,120 crore from high-refill diversions, likely far higher with subsidies.
- 60% beneficiaries not shifted to clean fuels, loans unrecoverable, and no performance indicators highlight implementation failure.
- Full LPG database audit needed to quantify losses from inefficient policy and corruption.

**By Sourya Banerjee**

* * *

The Comptroller and Auditor General of India (CAG) on 11 December 2019 tabled a [report](https://cag.gov.in/content/report-no14-2019-performance-audit-pradhan-mantri-ujjwala-yojana-ministry-petroleum-and) on the Pradhan Mantri Ujjwala Yojana. The report had widely flown under the radar of almost all newspapers and most journalists, until Faye D’Souza, pointed it out on a [Facebook live](https://www.facebook.com/watch/?v=456748238335188) in early January. The report highlighted some glaring inefficiencies, a possible major scam, and the lack of state capacity to deal with major projects that the government undertakes without planning.

**What is the Pradhan Mantri Ujjwala Yojana?**

The Pradhan Mantri Ujjwala Yojana ([PMUY](https://pmuy.gov.in/)) was launched by the Government in May 2016 to distribute 50 million LPG connections to women belonging to Below Poverty Line (BPL) families. The government made a budgetary allocation of ₹800 billion (USS 11 billion) for the scheme. In 2018, its scope was widened to include an additional 80 million poor households.

Under the scheme, the government provides a subsidy of ₹1,600 to state-owned fuel retailers for every free LPG gas connection that they give to poor households. This subsidy intends to cover the security fee for the cylinder and the fitting charges. The beneficiaries have to buy the cooking stove, for which government extends loans. The scheme also allows beneficiaries to pay for the stove and the first refill in monthly instalments. However, the cost of all subsequent refills has to be borne by the beneficiary.

The CAG report notes glaring problems in the Ujjwala Yojana, including;

1.  Providing of over 1.88 lakh LPG connections to males by Indian Oil Corporation Limited despite the scheme being only for women. ([Chapter 3](https://cag.gov.in/sites/default/files/audit_report_files/Chapter_3_Distribution_of_LPG_connections_under_PMUY_of_Report_No_14_of_2019_Performance_Audit_of_Pradhan_Mantri_Ujjwala_Yojana_Ministry_of_Petroleum_and_Natural_Gas.pdf))
    
2.  About two lakh consumers had an average annual consumption of more than 12 cylinders. Given the BPL status of these consumers, this pattern of high consumption prima-facie suggests diversion of domestic cylinders for commercial use. ([Chapter 6](https://cag.gov.in/sites/default/files/audit_report_files/Chapter_6_Transition_of_BPL_households_to_LPG_of_Report_No_14_of_2019_Performance_Audit_of_Pradhan_Mantri_Ujjwala_Yojana_Ministry_of_Petroleum_and_Natural_Gas.pdf))
    
3.  13.96 lakh BPL family consumers had consumed 3 to 41 gas refills in a month since installation. The report notes that about a quarter of these consumers were doing it regularly, indicating a high probability of black marketing of cylinders. ([Chapter 6](https://cag.gov.in/sites/default/files/audit_report_files/Chapter_6_Transition_of_BPL_households_to_LPG_of_Report_No_14_of_2019_Performance_Audit_of_Pradhan_Mantri_Ujjwala_Yojana_Ministry_of_Petroleum_and_Natural_Gas.pdf))
    
4.  Indian Oil Corporation and Hindustan Petroleum lacked any validation checks or mechanism for restriction on booking/delivery of more than one refill on the same day through data validation. Distributors of these companies in 3.44 lakh instances have issued 2 to 20 refills in a day to a single beneficiary having a one-cylinder connection. ([Chapter 6](https://cag.gov.in/sites/default/files/audit_report_files/Chapter_6_Transition_of_BPL_households_to_LPG_of_Report_No_14_of_2019_Performance_Audit_of_Pradhan_Mantri_Ujjwala_Yojana_Ministry_of_Petroleum_and_Natural_Gas.pdf))
    
5.  Even after completion of more than two years, around 60 per cent beneficiaries surveyed have not yet completely shifted to clean fuels.
    
6.  Majority of the loans extended under the scheme, for women of BPL communities to buy stoves, are not recoverable.
    
7.  The overall benefit achieved from the scheme cannot be measured in the absence of any performance indicator.
    

**The Policy Problem**

Before looking into the issues highlighted by the CAG Report, it is important to understand that in India, a gas cylinder used for commercial purposes is taxed higher than a gas cylinder used for a domestic purpose. Commercial gas cylinder attracts 18 per cent GST while domestic attracts only 5 per cent GST. The price difference between commercial and domestic use makes absolutely no sense, especially as LPG is supposedly a “cleaner” alternative and higher GST dis-incentivises commercial adoption of the same. On the flip side, the higher GST also creates an incentive for diversion of cylinders from domestic to commercial sale.

Essentially what the CAG report highlights is a multifaceted problem. Primarily despite Aadhaar being introduced for specifically these kinds of schemes, in a majority of cases, the connections were granted without verification. It is also important to note that the Government companies are subsidised to provide the connection and first cylinder. Hence they have an incentive to push for more connections, whether or not they can be verifiable as women belonging to BPL families. Also, the companies had no further incentives to ensure that the beneficiaries continue the LPG usage.

Along with that, it would be ludicrous to suggest that BPL families, a lot of whom had to take a loan to buy gas stoves can buy and black-market the cylinders without the knowledge and help of government-owned distribution companies and other middlemen. This entire problem is *per se* created due to the differential GST slabs implemented by the government.

**Back of envelope calculation**

The price of a commercial cylinder in Delhi is ₹1,241 while domestic cylinders are sold at ₹714. That’s a difference of ₹527. We can assume that of the 20.12 lakh instances of 3-41 refills being taken in a month, as per the report, an average of 20 refills were diverted to the black market for commercial usage. Assuming that these cylinders were sold at the market price, the total amount of transactions would be well over ₹2,120 crore. This is a conservative estimate leaving aside the fact that the government subsidises the first 12 domestic LPG cylinders per year per connection. If we consider that LPG received under the Ujjwala Yojana at a subsidised price for domestic consumption is sold at commercial LPG rate in the open market, the ‘profit’ margin (the magnitude of the scam) would be far greater. 

This is an extremely conservative estimate of the minimum loss in this exercise, the actual amount can only be ascertained post a full audit and investigation by the CAG, but may well be in tens of thousands of crores. This would be beside the instances where LPG connections are given in the name of men and subsidy for the same collected by the government-run companies, despite that being against the policy.

**The Bigger Picture**

As per Chapter 2 of the CAG report, field audit only included the audit of Ujjwala Yojana transactions up to March 2018 and the review of the efficacy of the infrastructure of the three major companies at their offices along with an examination of documentation at selected distributors. Thus, the report only shows the tip of the problem and not the total amount of possible irregularities.

For Ujjwala Yojana, which has no measurable performance indicators, how much money have we lost here due to inefficient taxation policy, and possibly local and national level corruption, will only be found once there is a thorough investigation. The CAG has recommended that the entire LPG databases, as well as physical records, need to be scrutinised to uncover the entire picture. As of now, the Ministry of Petroleum and Natural Gas has not ordered any investigation into it despite accepting the report and all its conclusions.

[Read More: PMJAY: Yay or Nay?](https://spontaneousorder.in/pmjay-yay-or-nay/)

* * *

**About Sourya Banerjee**

Sourya is the Project Associate for CCS Academy in Hyderabad. A BBA-LLB (Hons.) degree holder, Sourya used to practice law in Hyderabad before joining CCS. Sourya has also worked with numerous non-profits social organizations including Red Elephant Foundation, and Red Dot Foundation and also written on law and policy for online platforms such as LiveLaw, The Logical Indian, Qrius etc. An ex- Students for Liberty Hyderabad Local Coordinator, in his free time, Sourya runs a citizen journalism platform called Arguendo.

## Centenary of Liberal Thinker Nani Palkhivala

Original: https://www.spontaneousorder.in/p/centenary-of-nani-palkhivala

Author: Spontaneous Order

Published: 2020-01-20T18:31:12.000Z

Topics: nani-palkhivala, indian-liberal-tradition, free-enterprise, constitutionalism

> In the sensational waves of contemporary debates on the economy, constitution, and facets of liberal democracy, the common threads invariably cut through these fields are rarely packed with thoughts of eminent liberal thinkers like Nani Palkhivala who w..

**Summary:**

This post celebrates the 100th birth anniversary of Nani Palkhivala (born January 16, 1920, in Bombay; died 2002), portraying him as a towering classical-liberal figure in India's economy, constitutionalism, and democracy. Overcoming a stammer, he earned degrees from St. Xavier's College (1942) and Government Law College (1943), becoming a renowned lawyer, orator, writer, and US Ambassador (1977-79). Palkhivala criticized India's socialist command economy since 1958, predicting its failure, and founded the Forum for Free Enterprises, delivering annual post-budget speeches that grew from a hotel room to over 100,000 attendees by 1994. His books, including 'We, the People' (1984), 'We, the Nation' (1994), and others like 'The Highest Taxed Nation' (1965), advocated free enterprise, individual liberties, private property, and constitutional morality rooted in dharma. He defended citizens' rights in landmark cases and outlined Five Doctrines emphasizing wealth creation via property rights, active truth-seeking against falsehood, dharma in governance, and national integration through inter-faith harmony. The author urges millennials to study his works to embody liberal principles, ethical governance, and prosperity for all.

**Key points:**

- Nani Palkhivala launched annual post-budget speeches in 1958 via Forum for Free Enterprises to critique socialist policies and promote free-market solutions, attracting up to a lakh attendees by 1994.
- He advocated retaining constitutional property rights as essential against India's 'economic fanaticism' to enable wealth creation and economic progress.
- Palkhivala's Five Doctrines stress distribution of wealth through individual enterprise, constitutional morality via dharma, and national integration rooted in inter-faith harmony.
- Declining Swatantra Party leadership in 1971, he prioritized intellectual independence to fight for civil liberties and responsible government.

**By Chandrasekaran Balakrishnan**

* * *

In the sensational waves of contemporary debates on the economy, constitution, and facets of liberal democracy, the common threads invariably cut through these fields are rarely packed with thoughts of eminent liberal thinkers like Nani Palkhivala who was one of the greatest sons of twentieth-century India. He was duly credited with many hats to his long and eventful public life with lasting immersions on the people and intellectuals of the country. His life and works have become one such rare embodiment which needs to be reminded for future generations. Alas, the regional media in India does not bother about the contributions of great thinkers like Nani. 

Nani Palkhivala’s contributions to the issues of the Indian economy, constitutionalism, and liberal democracy were immensely obliging to the advancement of the Indian subcontinent in the last seventy years. In the second half of the last century, his legacy was unparalleled to none in the above fields. Moreover, his adherence to the ethical values and liberal principles were more than just guiding forces behind his most illustrated public life. He was deeply rooted and a believer in dharma which encompasses as vast as humanity. Nani Palkhivala was a firm believer in individual liberties, free enterprise, responsible government, economic freedom, constitutional morality, and private property rights.

This year marks the 100th Birth Anniversary of Nani Ardeshir Palkhivala who was born on 16th January 1920 in Bombay (now Mumbai). He was called Nanabhoy by his parents and Nani Palkhivala or Nani by most others. His family was a humble working class. He completed his school and higher education in Bombay: School education was at Masters Tutorial High School, Masters Degree in English Literature was at St Xavier College in 1942 and a Law Degree in Government Law College was in 1943. He excelled in academic education despite suffering from a dreadful stammer. 

Nani Palkhivala became a household name in India for many reasons. He was a prolific writer and orator on many subjects’ especially economic policies, the constitution of India, civil liberties, and fundamental rights of citizens. He also became a Statesman and Ambassador of the USA during the period 1977-79. Many legal luminaries termed him as a rare personality, the living legend, a revered authority of Law and Practice for several decades. He has written numerous books on Tax systems which were sought after even globally. Liberal scholar and Statesman C Rajagopalachari or Rajaji hailed highly that Nani Palkhivala was a country’s gifted liberal legal pundit who saved the Indian democracy from the government’s tyranny of absolute power to amend the constitution’s basic structure. 

Nani Palkhivala’s areas of interest in professional public life varied from being a legal expert, academician, and practitioner of constitutional law, and economic policy, literature, poetry to a Statesman who fought for India’s historical cases, individual liberty, private property right, and civil liberties for the poorest of poor peoples’ interests. He is known for winning many legal battles in the interest of citizens’ fundamental rights and economic freedom for free enterprises. He was witness to the best and worst of the country’s odd events that happened soon after the independence and a Republic with the adoption of the Constitution of India.  

What made him become a more vocal critic of the government policies and of the ideas behind those policies was the dogmatic thought process which prevailed at that time and was neither rooted in Indian traditions nor convincing with facts and truths of sound logic and reasoning. Hence, much before the political discourse on the economic reforms of the 1990s, Nani Palkhivala had strongly advocated since 1958 that the Indian economy which was wedded to the idea of socialist, command and control model ought to fail sooner or later. 

Nani Palkhivala launched a forum to demystify the policies of the government to educate the citizens. He was termed as peoples’ Finance Minister without Portfolio in the Cabinet of India’s Republic! In 1958, he had initiated a public speech in a small hotel room in Bombay to demystify the jargon of Budget of Union Government to citizens in plain language with alternative sound policy solutions to the issues and challenges faced by the country. In the annual post-budget speech organised by Forum for Free Enterprises, Bombay, the audience rose from the tiny size in a hotel room to more than a lakh people in 1994 in open places in Bombay, Delhi, and Calcutta. His eloquent extempore post-budget speeches were much watch-out for the senses and nonsense of the budget announcements filled with humility and always delivered without a single piece of paper for a couple of hours.

Among his writings and speeches, two books are widely known for its relevance for decades. The *“We, the People”* book was published in 1984, with some of his most important speeches and writings over three decades including some of his post-Union Budget analysis. Another book he published in 1994 was *“We, the Nation”*, which is a companion volume to *“We, the People”* also has some of his best speeches and writings on different issues and challenges faced by the Indian economy and society at large.   

The following are some of his other works which are must-read for all those who wanted to understand the mainstream debate on the Republic of India and its economy and people in the decades prior to major economic reforms of 1990s: The Global Economy, a North-South Dialogue, 1984: Where the North Meets the South, Imperatives for Development in the Global Economy (1985), The People, the Only Keepers of Freedom (1979), The Constitution and the Common Man (1971), India’s Priceless Heritage (1980), Our Constitution Defaced and Defiled (1974), The Highest Taxed Nation (1965), Essential Unity of All Religions (1990) and his magnum opus, The Law and Practice of Income Tax (1950). 

In the interest of promoting free-market economic principles, Nani Palkhivala served on several forums and organizations to take the new ideas and sound policies to the people. During the period, 1968-2000, he was President of Forum for Free Enterprises, Bombay and delivered the famous post Union Budget speeches and published numerous essays on affairs of economics, liberal democracy, public finances, taxation, etc. 

Interestingly, recently, it was found that Rajaji wrote a letter (dated 27 June 1971) to Nani Palkhivala with a request to be the President of Swatantra Party which was founded in 1959 as the major opposition to Nehru’s Congress government. But Nani replied (on 9 July 1971) with “I find it very painful to say No to a man whom I hold in such high esteem” on the ground of “remaining an independent person outside politics”.

To advance the liberal democracy in India towards a more prosperous country for all citizens, we have to remember and foster the following ***Five Doctrines*** of Nani Palkhivala (From February 1971 Issue of Freedom First Magazine):

1.  *The Constitution believes in the distribution of wealth, and therefore it not only permits but encourages the creation of wealth by enterprising individuals who with their vision and expertise are prepared to take risks and develop their country. That is why our Constitution confers on all citizens the fundamental rights to acquire, hold and dispose of property and to carry on any trade, business, and profession.*
    
2.  *The right to property is often derided as the “least defensible” right in a socialist democracy. Yet a little reflection should show that this right is of the essence of a sound body politic and of a democracy which aims at marching forward economically….. Countries, where freedom has become a way of life, can do without the luxury of a constitutional right to property. But in India where economic fanaticism has become a way of political life, it is imperative to retain the right to property.*
    
3.  *There are times in a country’s history when inaction and silence can be a culpable wrong, and we are living in such times. It is not enough that we believe in our national motto that truth with ultimately prevail. We must take active steps to see to it that falsehood does not have a very long inning before the ultimate moment of truth arrives.*
    
4.  *The survival of our democracy and the unity and integrity of the nation depend upon the realisation that constitutional morality is no less essential than constitutional legality. Dharma (righteousness; a sense of public duty or virtue) lives in the hearts of public men; when it dies there, no constitution, no law, no amendment, can save it.*
    
5.  *National integration is born in the hearts of the citizens. When it dies there, no army, no government, no Constitution, can save it. States of mind precede States. Inter-faith harmony and consciousness of the essential unity of all religions are at the very heart of our national integration.*
    

In his entire public life, he always fought for improving the standard of living for poor people, bringing more effective and responsible governments. Nani Palkhivala died on 11 December 2002 in Mumbai at the age of 82. He had unquenchable confidence in the long-term future of India and its young people. Therefore, the current generation of millennials needs to learn about the works of this liberal scholar and statesman for becoming a truly responsible citizen and lead an exemplary life with works ethics in public. 

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

[Read more on the Indian Liberal Tradition](https://spontaneousorder.in/tag/indian-liberal-tradition/)

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## VS Srinivasa Sastri – Forgotten Liberal Intellectual – Part 2

Original: https://www.spontaneousorder.in/p/vs-srinivasa-sastri-forgotten-liberal-intellectual-2

Author: Spontaneous Order

Published: 2020-01-07T18:37:32.000Z

Topics: indian-liberalism, constitutionalism, historical-revisionism, freedom-struggle

> Editor’s Note: This is the second article in a two-part series paying homage to VS Srinivasa Sastri, the forgotten liberal intellectual of pre-independent India. Read the first part here. Sastri and Indian Liberalism Srinivasa Sastri was born ten days b

**Summary:**

VS Srinivasa Sastri, a poor-born liberal intellectual mentored by Gopala Krishna Gokhale, championed constitutional methods for India's self-governance, contrasting with Gandhi's strikes, fasts, and non-cooperation, which Sastri deemed counterproductive. In 1916, Sastri's pamphlet 'Self-Governance for India under the British Flag' advocated dominion status like Canada and Australia. He co-founded the Indian National Liberal Federation (Liberal Party) on November 1, 1918, with leaders like Tej Bahadur Sapru, supporting Montagu Reforms against extremists like Tilak. As party president in 1922, Sastri influenced the 1919 Reforms Act and served in legislative councils. Influenced by Ranade's vision to 'equalise, humanise, and spiritualise,' Sastri delivered 1926 Kamala Lectures listing 18 citizen rights—including liberty of person, property, expression, education till age 18, and work—many enshrined in India's Constitution. The author critiques historians like Ramachandra Guha for dismissing Sastri as 'Brahminical' and ignoring liberals' role in parliamentary evolution, as noted by AG Noorani and Zareer Masani, who credit liberals over Gandhi-Nehru for democracy's foundations. Indian liberalism from Ranade, Gokhale, and Sastri demands historical recognition against Marxist distortions.

**Key points:**

- Sastri co-founded the Indian National Liberal Federation in 1918 to promote constitutionalism and gradual self-governance against extremism.
- Sastri's 1926 lectures outlined 18 rights, such as liberty of person, property, expression, and education till age 18, later influencing India's Constitution.
- Liberals like Sastri contributed more to Indian parliamentary institutions in 1919 and 1937 than Gandhi or Nehru, per Noorani and Masani.
- Historians have ignored Sastri's intellectual legacy due to ideological biases favoring Gandhi-Nehru hegemony.
- Sastri warned against non-cooperation as a 'perilous sea' that endangers youth and future society.

**By Chandrasekaran Balakrishnan**

* * *

*Editor’s Note: This is the second article in a two-part series paying homage to VS Srinivasa Sastri, the forgotten liberal intellectual of pre-independent India. Read the first part [here](https://spontaneousorder.in/vs-srinivasa-sastri-forgotten-liberal-intellectual-1/).*

**Sastri and Indian Liberalism**

Srinivasa Sastri was born ten days before Mahatma Gandhi. But unlike Gandhi, Sastri was born to a very poor family and rose through his hard works to serve the country like his political guru Gopala Krishna Gokhale. In the early part of the twentieth century, both Gokhale and Sastri were the two greatest sons of India who strived for freedom with liberalism. Both were equally respected in British Governments for their foresighted ideas and reform policies. But at home, both faced furious criticisms on their proposed policies but none could critique their commitments to the patriotism of mother India. Sastri assisted Gokhale on his major works in reform policies including Gokhale’s Universal Elementary Education Bill in Indian Legislative Council in 1912.

According to P Kodanda Rao who worked with Sastri first as a private secretary for a decade and then a member of Servants of India Society note that “*Parallelism between Gokhale and Sastri is indeed very striking. Both were born poor; both were teachers turned statesmen; both played a conspicuous part in the evolution of the Indian Constitution and the legislatures of India, provincial and central; both made several political visits to England; both took a hand in the South African Indian question; both suffered from bitter and unfair attacks from a section of Indians and were sometimes discounted by the British Government; both stood for constitutional methods of political agitation….; both admired the Mahatma personally and differed from him politically.*”

However, historians have ignored Sastri’s works through the mirror of ideologies. For example, in the book on *Gandhi: The Years that Changed the World-1914-1948*, Ramachandra Guha notes that *“Sastri was Brahminical in both the good and bad senses of the term: deeply learned in the scriptures, but entirely dependent on the labour of others for his sustenance. As a constitutionalist, he abhorred Gandhi’s use- in South Africa-of strikes, fasts and boycotts to make his case. (Page VIII)”*.

In contrast, Sastri strived for education for all children including those belonging to weaker sections of the society. He has provided financial supports to several poor children and some were adopted by him to nourish in his house. Thus, it is shocking to note that Mr Guha concludes with a single incidence and he never bothered to read the intellectual contributions of the constitutional method of freedom struggles pursued by Sastri. And it was surprising that Zareer Masani who reviewed Guha’s book in the Open Magazine said, *“Indian democracy owes more to liberal politicians like Tej Bahadur Sapru and Srinivasa Sastri, who cooperated with the embryonic parliamentary institutions that the Raj introduced in 1919 and 1937.”*

Even the veteran left-leaning constitutional expert AG Noorani noted in 2012 that *“before 1947 neither Gandhi nor Nehru helped in forging a settlement on the minorities’ rights and safeguards or in promoting parliamentary democracy. The studied rewriting of history, which denies the liberals their stupendous contribution in India’s political evolution until the 1920s when the Gandhi-Nehru hegemony came to hold sway, is unworthy and demeaning…. The liberals are mentioned condescendingly. They were more clear-headed, realistic and practical than Gandhi or Nehru and not a whit inferior in political scruples to either.”*

Sastri was attracted to Ranade’s vision of *“To equalise, to humanise, and to spiritualise”* with which he strived his entire political career in British India*.* Ranade was Gokhale’s guru and influenced Sastri to join for freedom movements with liberal ideas. The veteran Telugu scholar, D.Anjaneyulu (1924-1998) vividly noted that Sastri *“A Liberal he was, no doubt, from the beginning of his political career (in 1907) to his last day (in 1946). But Sastri chose to spell his “liberalism” with a small “l”. Like most Indian Liberals of the time, he was bred on the 19th century British classics like Mill on “Liberty” and Morley on “Compromise.” In his case, however, liberalism was not a matter of political strategy or public stance but an article of personal faith.”*

During the period 1916-1918, Sastri played a vital role for declaration of self-governance in British India after decades of struggles by both Ranade and Gokhale. In 1916, Sastri wrote a Pamphlet titled *Self-Governance for India under the British Flag* which highlighted the constitutional movements for independence of countries like Canada, Australia, etc. and wondered why India’s case was lingering for long with the unjust rule of British imperialists. When the Montague reform Report was released in 1918 for the gradual introduction of self-governing systems in India, there was a strong difference of opinions among top leaders of the Indian National Congress for the first time since 1885. Eventually, the top leadership was split into two groups, one was supporting the Montagu Reforms and the other was opposing it vehemently.

**Sastri and the Indian Liberal Party**

The opposition was called *“extremist leaders”* which included Bipin Chandra Pal, Lala Lajpat Rai, Bal Gangadhar Tilak, Aurbindo Ghosh, etc. And those who supported the reforms was called *“moderate leaders with liberal ideas”* who have left the Congress and formed a separate political party called ***“Indian National Liberal Federation”*** **or The Liberal Party** on November 1, 1918, mainly led by VS Srinivasa Sastri, Dinshah Wacha, Surendranath Banarjee, Bhupendranath, and Ambica Charan Mazumdar. It also had other prominent liberal leaders like Tej Bahadur Sapru, Pherozeshah Mehta and M.R.Jayakar among others. These liberals have played a major role in bringing about constitutionalism and liberalism from Indian perspectives. Sastri was president of the liberal party in 1922.

According to P Kodanda Rao *“when he joined the Servants of Indian Society he renounced all ambitions of acquiring wealth and power and exercising patronage. By the sheer force of his personality, he rose to great eminence and influence in the affairs of India and the Commonwealth. He was one of the prime movers of the **National Liberal Federation of India**, which stood for liberalism and constitutionalism in Indian politics as against extremism and direct action. His was perhaps the single greatest contribution from the Indian side to the evolution of the Indian Reforms Act of 1919, promoted by the E.S. Montague, then-Secretary of State for India in British Cabinet. He was successively a member of the Madras Legislative Council, the Imperial Legislative Council and the Council of State. He sat with the Prime Ministers Britain and the British Dominions at the Imperial Conference in London in 1921″*.

The modern Indian liberalism, constitutionalism, and gradualism were pioneered by Mahadev Govind Ranade (1842-1901) who opposed extremism, direct action and revolutionary approaches of Tilak and others. Gokhale was a student of Ranade and influenced Sastri and others on the liberalism and moderation as a core belief to strive for natural growth with compromise and fairness to attain independence from the British Empire. However, it is strange that Independent India’s Marxist and socialist intellectuals often equate the thoughts of Dadabhai, Ranade, Gokhale, etc. with leaders like Tilak, Pal, Rai, etc. without distinguishing the core beliefs and principles of these leaders. Sastri had an abiding faith in the efficacy of the constitutional methods for pursuing freedom struggles.

It was Gokhale who influenced Gandhi to return from South Africa for embarking freedom movements in India but Gandhi did not agree on Gokhale’s core principles of fighting freedom struggles through constitutional methods. Like Gokhale, Sastri also did not agree with Gandhi’s approaches to freedom movements through strikes, fast, non-cooperation movements on the ground that it will be counterproductive in future society. Indeed, Sastri said *“I am afraid that young men are embarking on a perilous sea of what is called ‘non-cooperation’… we see nothing but dangers with dark clouds. As the poet says ‘the prospect is one vast inky blot’… it were possible to wean our youths from these dangerous enterprises. I wish someone with the prophet’s ire and eluence would dissuade them from having anything further to do with this non-cooperation”*.

In February 1926, Sastri delivered the second Kamala Memorial Lectures titled “*Rights and Duties of the Indian Citizens”* at Calcutta University (Now Kolkatta). He spoke on extempore for long with little notes and few quotations during the four lectures. The lecture titled *“Liberty of Person and Liberty of Movement”*. He observed that *“the State has no right to exalt itself to the point of neglecting or suppressing the individual, but conceded such superiority to the community.”* Sastri also believed that *“no right can be enjoyed by any citizen without restrictions. These are imposed the benefit of other citizens and of the whole community”*. Further, Sastri listed 18 rights for liberal society: *1. **Liberty of the Person,** 2.Liberty of movement and settlement (within the State), 3. Liberty of migration and the right to the protection of the State, 4. The inviolability of one’s house, 5. **The right of property,** 6. Freedom of belief and conscience, 7. Sanctity of private and correspondence through the post, telegraph or opinion, 8. Freedom of expression of opinion, 9. Equal eligibility for office, 10. Equality before the law, 11. Freedom of public meeting, 12. Freedom of association, 13. Freedom of contract, 14. Freedom of trade and industry, 15. Freedom of marriage, 16. The franchise, 17. **Education till the 18th year**, and 18. Work.* After Independence, all these 18 aspects become part of the Constitution in some or other forms including the right to property.

There is a lot to learn from the great liberals like Ranade, Gokhale, Sastri, Jayakar, Sapru, Pherozeshah Mehta, etc. At the same time, there is a need to rewrite the history of Indian liberalism and place properly the efforts of constitutionalism of the first half of the twentieth century which is so far either ignored or heavily misinterpreted on the ground of dubious communism and socialism ideologies.

**References**

1.  A.G.Noorani (2012). A neglected hero, The Frontline, Volume 29 – Issue 17: August 25-September 07. [https://frontline.thehindu.com/static/html/fl2917/stories/20120907291708700.htm](https://frontline.thehindu.com/static/html/fl2917/stories/20120907291708700.htm)
    
2.  B.R.Ambedkar (1943). Ranade, Gandhi and Jinnah, Address Delivered on The 101st Birthday Celebration of Mahadev Govind Ranade on 18th January.
    
3.  Dr D. Anjaneyulu (1984). V. S. Srinivasa Sastri: Hero as a Gentleman, TRIVENI, A Journal on Art, Literature, History and Culture (was founded in 1927 and was published till 2008). July-September.
    
4.  P.Kodanda Rao (1963). The Right Honourable V S Srinivasa Sastri- A Political Biography, Asia Publishing House.
    
5.  Ramachandra Guha (2019). Gandhi: The Years that Changed the World, 1914-1948, Penguin Random House Network.
    
6.  V. S. Srinivasa Sastri (1926). The Rights and Duties of The Indian Citizen, The 2nd Kamala Memorial Lectures, Calcutta University Press, February.
    
7.  Zareer Masani (2018). [The Man and the Mahatma](https://openthemagazine.com/essay/the-man-and-the-mahatma/), The Open Magazine, September 27.
    

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

[Read More: The Right Honorable Sir V S Srinivasa Sastri: Diplomat, Politician, Liberal](https://spontaneousorder.in/v-s-srinivasa-sastri/)

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## VS Srinivasa Sastri – Forgotten Liberal Intellectual – Part 1

Original: https://www.spontaneousorder.in/p/vs-srinivasa-sastri-forgotten-liberal-intellectual-1

Author: Spontaneous Order

Published: 2020-01-07T15:15:15.000Z

Topics: indian-liberalism, constitutionalism, servants-of-india-society, history-of-thought

> Editor’s Note: This is the first article in a two-part series paying homage to VS Srinivasa Sastri, the forgotten liberal intellectual of pre-independent India. Read the second part here. In India, the history of liberalism and constitutionalism of the

**Summary:**

The post laments the neglect of India's liberal and constitutionalist history in academia, dominated by Marxism and socialism since independence, which has obscured figures like VS Srinivasa Sastri, whose 150th birth anniversary falls this year. It traces the 1919 split in the Indian National Congress into liberals (constitutional moderates influenced by classical liberalism) versus extremists (Fabian socialists and communists), with the latter prevailing post-1947. Sastri, born in 1869 in Tamil Nadu to a poor Brahmin family, excelled academically—topping matriculation (1883), FA (1885), and BA (1888) with a gold medal—before a 17-year teaching career, including headmastering a model school and founding the Triplicane Urban Co-operative Society (1904). Attracted to Gokhale's principles, he joined the Servants of India Society (SIS) in 1907, succeeding as president (1915-1927) despite Gandhi's differing views. A silver-tongued orator rated among the twentieth century's best, influenced by Hume, Mill, and Spencer, Sastri founded the Madras Teachers Guild (1895), edited journals, and established the National Liberal Federation (1918). He championed constitutional methods for freedom, predicting independence by 1948 (achieved 1947), yet remains forgotten despite biographies praising his statesmanlike contributions to civil liberties across the British Empire.

**Key points:**

- Indian academia has ignored liberal economic thought and figures like VS Srinivasa Sastri due to post-independence socialist dominance.
- Sastri succeeded Gokhale as Servants of India Society president (1915-1927) and founded the National Liberal Federation in 1918 to advance constitutionalism.
- Sastri's constitutional approach predicted India's independence within 25 years from 1923, realized in 1947.
- From teaching excellence to oratory and journalism, Sastri embodied classical liberalism, editing Servant of India and promoting education reforms.

**By Chandrasekaran Balakrishnan**

* * *

*Editor’s Note: This is the first article in a two-part series paying homage to VS Srinivasa Sastri, the forgotten liberal intellectual of pre-independent India. Read the second part [here](https://spontaneousorder.in/vs-srinivasa-sastri-forgotten-liberal-intellectual-2/).*

In India, the history of liberalism and constitutionalism of the first half of the twentieth century is barely studied. There is hardly any notable liberal economic historian in India either teaching or carrying out academic research on the history of Indian economic thoughts which has been quite dramatically distorted by Marxism and socialism throughout the twentieth century. Alas, the subject of the history of economic thoughts has been long discarded in the Indian mainstream academia as irrelevant.

Many great liberal scholars who have contributed significantly to the freedom movements through constitutionalism for advancing the free and liberal society were ignored. It is absurd to observe, that the Indian economists, social and political scientists who persistently ignored the history of economic thoughts subject at a time when the western and other developed economies around the world have been continuously making efforts to revive their history of economic thoughts and building nexus in the contemporary public policy debates.

The much talked about two schools of thought namely the right-wing vis-à-vis left-wing narratives of the contemporary debate were first begun exactly hundred years ago in 1919 after the furious differences of opinions among the top leaders of the Indian National Congress on the Montagu reform policies. These two schools of thought as it was evolved called liberalism, constitutionalists and moderates as right-wing and extremism, direct action and revolutionary as left-wing. The former followed classic liberalism of indigenous and some western conservative ideas and the later stood for Fabian socialism and communism. There is a very thin line between socialism and communism. Thus, after independence, the only school of thought which predominately dominated in the Indian academia, political rule and public policy discourse was communism and socialism by ignoring the views of liberal scholars. 

Thus, the great liberals like VS Srinivasa Sastri who has contributed significantly to the freedom movements in British India during the first half of the twentieth century were completely ignored and forgotten in the second half of the twentieth century for no good reasons. **This year marks 150th birth anniversary of VS Srinivasa Sastri** who was contemporary of MG Ranade, GK Gokhale and Mahatma Gandhi among other makers of Modern India. Probably, Sastri was the only person who has traveled as a reputed Statesman and Ambassador for peacekeeping missions across the British Empires to embrace the pragmatic constitutional method for freedom movements and civil liberties.

Professor Mohana Ramanan in his book titled **“VS Srinivasa Sastri: A Study”** (2007) noted that Sastri “*made a mark in public life as a liberal, albeit with a conservative cast of mind….almost forgotten figure…Sastri does not come to mind in this context immediately and that is because he did his work largely in councils, legislatures, delegations, and conferences. This is unglamorous works but there has been grudging acceptance of Sastri’s preeminence in our national struggle.”* There is no record why his constitutional strives to attain freedom was ignored in the last seven decades.

P Kodanda Rao who worked with Sastri for a decade between 1922 to 1932 wrote: *“Sastri was an eminent scholar as well as a statesman, he was one of the elects among the great builders of India and the pillars of the Commonwealth.”* Rao has written an excellent elaborated political biography of Sastri in 1963 with enormous efforts to study the intellectual contributions spread over 76 years of tireless life of Sastri. Rao has done great justice by documenting the true patriotism of Sastri along with first-rank formidable thinkers of modern India with whom he was associated throughout his life.

Though, C Rajagopalachari wrote a *Foreword* for the book mentioning as Sastri was his friend “*but took different channels of political work”.* Ray T. Smith who reviewed Rao’s book in the Journal of Asian Studies in 1964 had observed that Rao made *“the first serious attempt to accord Sastri a proper place in the history of the Indian national movement.”* Sastri was British India’s Rajaji and both were devoted students of the *Ramayana* with the scholarly critique of it for the pursuit of thoughts and deliberations.

VS Srinivasa Sastri was an astute reader and writer who contributed immensely to the reform policies during the freedom movements of British India. He was an acclaimed intellectual who gave long extempore scholarly speeches, lectures and addresses across the British Empire. He was also a versatile and mesmerizing orator and his English skill was marvelously treated as *Silver Tongue* in British India. Sastri was rated as one of the five best orators in English in the twentieth century among other stalwarts.

In 1915, Sastri succeeded Gopala Krishna Gokhale as a liberal intellectual in the Servants of India Society (SIS) which was founded by Gokhale after his demise. SIS played a vital role in freedom movements and constitutionalism method of attaining self-governance in India. Indeed, it was Mahatma Gandhi who aspired to become President of SIS succeeding Gokhale but Gandhi did not agree with all of the core principles of SIS with which Gokhale envisioned to fight for freedom movements in an orderly manner.

Hence, Sastri was the natural choice to become President of SIS and remained for 12 years from 1915-1927. Despite their strong opposition in thoughts and political activism, Sastri and Gandhi were close friends throughout their life.

**VS** **Srinivasa Sastri’s Life and Education**

Valangaiman Sankaranarayana Srinivasa Sastri was born on 22nd September 1869 in a village called Valangaiman near Kumbakonam town, Tamil Nadu (then part of Madras Presidency). He was born as a fourth of seven children to his parents, three elder sisters and three younger brothers. His parents were traditional Brahmin family and barely managed to meet the basic living. Though, his father Vaidik Sankaranarayana Sastri was a Sanskrit Scholar but was poor.

Srinivasa Sastri passed the Matriculation examination in 1883 at Native High School in Kumbakonam. With the 13th position in the Matriculation examination in the entire Madras Presidency, Sastri received free education in the First Year Arts Course in College. He came first in the F.A examination in 1885 which helped to get free education for the Bachelor of Arts Degree. He completed a B.A degree in 1888 with First position in Sanskrit in the whole of Madras Presidency and First Class in English. Besides, he won *Gold Medal* for his English Proficiency with Prize money of Rs.350.

After obtaining B.A Degree from the Government Arts College, Kumbakonam, VS Srinivasa Sastri become a school teacher in Municipal High School at Mayavaram in today’s Mayiladuthurai for a monthly salary of Rs.50. By this time, Sastri was the sole breadwinner and managed the large family with his sisters and brothers with his income.

In 1891, Sastri joined Teacher Training College at Saidapet, Madras (now Chennai) where he was a brilliant student and corrected the English pronunciation of the English Principal who agitated pretending that his mother tongue is English and hence he knew better pronunciation but Sastri insisted that his pronunciation was wrong. The Principal asked the student to get a Standard English Dictionary from the library to verify and found that Sastri was right and Principal complimented for his precision.

In 1893, Sastri was appointed as First Assistant Teacher in a College in Salem and took a keen interest in public affairs of the country first time and also met the doyen of the town C Vijayaraghavachariar. After two years in Salem, he joined the Pachaiyappa’s High School in Madras as Assistant Teacher for English. In 1902, he becomes a Headmaster of Hindu High School, Triplicane, Madras (now Chennai) and served till 1906. It is recorded that Sastri made Hindu High School, Triplicane as Model School in the entire Madras Presidency. He also founded the Triplicane Urban Co-Operative Society in 1904 which is one of the oldest in the country. Sastri served as School Teacher and Headmaster for 17 years.

He was attracted to the principles of the great reformer and constitutionalist Gopala Krishna Gokhale. VS Srinivasa Sastri wrote to him for joining with him in 1906. In 1907, Sastri joined the Servants of India Society, Poona (now Pune) founded by Gokhale in 1905. When he joined with Gokhale, Sastri was just 37 years old. Since then he served for the country as a true liberal sense of the word more than the diplomatic intellectual with which he did quite an extraordinary service across the British Empire.  

Sastri founded *Madras Teachers Guild* in 1895. He also published *Educational Review* promoting education for all. He was the editor of *India Review* and founder editor of *Servant of India (SI)*, a weekly journal founded on the 3rd death anniversary of Gokhale in 1908.

Sastri was influenced by the writings of David Hume, TH Huxley, Tyndall, JS Mill, and Herbert Spencer. He passed away at the age of 76 on 17th April 1946 without seeing the joyous moment of Independence for which he fought for decades closely working with British governments on constitutional methods in orderly approach. But he did predict in 1923 that by adopting constitutional methods India would attain her independence within the next 25 years, i.e. by 1948 and we achieved in 1947. It was no wonder that his public life spread over more than 35 years was a remarkable success.

Sastri was a scholar and respected public intellectual in the modern Indian Renaissance. Sastri was a tall leader who often differed with Gandhi and other revolutionary leaders on the methods pursued to attain freedom from the British. He founded the National Liberal Federation of India or The Liberal Party on 1st November 1918, along with likeminded liberals who stood for certain principles rather than the gigantic game of polity.

**References**:

1.  Mohana Ramanan (2007). VS Srinivasa Sastri: A Study by, Sahitya Akademi.
    
2.  P Kodanda Rao (1963). The Right Honourable V S Srinivasa Sastri- A Political Biography, Asia Publishing House.
    
3.  Smith, R. (1964). The Right Honourable V. S. Srinivasa Sastri: A Political Biography. By P. Kodanda Rao. Bombay, London, and New York: Asia Publishing House, 1963. xix, 476. Rs. 28. The Journal of Asian Studies, 23(2), 325-326.
    

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

[Read More: The Right Honorable Sir V S Srinivasa Sastri: Diplomat, Politician, Liberal](https://spontaneousorder.in/v-s-srinivasa-sastri/)

* * *

**About Chandrasekaran Balakrishnan**

B. Chandrasekaran has been working in the area of public policy in the last fourteen years. He has written many articles and scholarly papers on the history of Indian economic thoughts. He has diverse experience working with central and state governments, corporate, NGOs and academia on various capacities in public policy. He has Masters in Economics from University of Madras and M.Phil in Social Sciences from Devi Ahilya University, Indore.

## SO Musings: We Wish You A Happy New Year!

Original: https://www.spontaneousorder.in/p/libertarian-happy-new-year

Author: Spontaneous Order

Published: 2019-12-31T12:14:53.000Z

Topics: libertarianism, limited-government, anti-socialism, indian-liberalism

> The following article, published in the January 1958 issue of the Indian Libertarian by Kusum R Lotwalla highlights the basic tenants of libertarianism and highlights the fact that the fight for freedom is not a lost cause. Her words hold as true today ..

**Summary:**

This 1958 New Year's article by Kusum R Lotwalla, reprinted by Spontaneous Order, asserts that libertarianism offers the antidote to global threats like nuclear annihilation, power bloc rivalries, and internal class conflicts fueled by exploitative institutions. Advocating replacement of centralized states with federations of free communities, labor councils, and cooperatives based on free agreement, competition, and cooperation, it defines libertarianism as upholding individual liberty of thought and action, opposing all authoritarianism from right or left, including socialism, communism, and planned economies. Government must be strictly limited to defense, justice, and rule of law, rejecting welfareism that breeds corruption, bureaucracy, and rising taxes stifling production. Liberty is not license but mutual non-encroachment, preserving individual choice in vocation, associations, and pursuits essential to human flourishing. Critiquing India's planned economy for mirroring destructive trends seen in Britain's socialist setbacks, Soviet de-Stalinization, Polish shifts, and Hungarian revolt, Lotwalla declares libertarianism a 'live cause' not lost. The Indian Libertarian pledges continued propaganda through its institute and branches in Bangalore, Baroda, Nagpur, Patna, and Madras to combat socio-political clichés thwarting progress and explore libertarian paths to happiness.

**Key points:**

- Replace exploitative centralized states with federations of free communities operating on free agreement, competition, and cooperation.
- Limit government to defense, justice, and rule of law, opposing welfare plans, socialism, and planned economies that lead to corruption and economic decline.
- Libertarianism ensures individual liberty without license, preventing encroachment on others' rights and countering totalitarianism's reduction of humans to robots.
- India's planned economy exemplifies destructive trends, but global shifts like Hungary's revolt prove libertarianism a viable cause worth propagating.

**By Spontaneous Order**

* * *

*The following article, published in the January 1958 issue of the Indian Libertarian by Kusum R Lotwalla highlights the basic tenants of libertarianism and highlights the fact that the fight for freedom is not a lost cause. Her words hold as true today as they were then. Around the world, and in India, people today are taking to the street to defend the freedoms our forefathers fought for. Just like Ms Lotwalla, we at Spontaneous Order also pledge to “fight against all the old and present-day socio-political clichés that thwart human progress, explore new roads to human happiness, along the libertarian paths, while examining anew old traditions and institutions, drawing from them all which human experience has proved valid and sound. That is our creed and our belief.”*

Time marches on and one more year–1957–has gone into the limbo of oblivion. We face the new year–1958–with hopes and aspirations for better times and a world free from the tensions of hot wars or cold wars. the rivalry between the rival Power blocs on the international plane, the end of internal tensions between “haves” and the “have-nots,” the exploited and the exploiters, the workers and the employers, between class and class and nation and nation.

To the eternal rivalry between the Power blocs is added the enormous destructive potential of the nuclear weapons and the atomic developments. Humanity is threatened with total annihilation. Underlying all these conflicts are institutions that breed exploitation, inequality and oppression. These old, archaic and anti-diluvian institutions have to be replaced by a society based on Libertarian principles, which proclaim “equal freedom for ALL in a Free Society.”

The libertarians have no cut and dried Plan or a blueprint. Without trying to put forth a so-called Code of Conduct to be strictly adhered to, we can indicate the general lines along which a solution for these problems could he found.

The exploitative societies of today be replaced by a new Libertarian world, free from oppression and exploitation. Freedom without equal opportunities leads to privilege and injustice. Freedom without political liberty leads to totalitarianism. The monopoly of power which is the State must be replaced by a federation of free communities, labour councils and cooperatives operating according to the principles of free agreement, healthy competition and co-operation.

Centralism, totalitarianism or Marxism means regimentation from the top down. This must be replaced by federalism which means cooperation from the bottom up.

**What is libertarianism**

In a word, the world must switch back once more to Libertarianism. Libertarianism, as described by Webster’s dictionary, means, “One who holds to the principle of free will; also one who upholds the principles of liberty, especially individual liberty of thought and action.”

Politically it means strong opposition to the authoritarianism of all kinds. whether of the Right or of the Left. It is opposed, therefore, to all forms of regimentation and totalitarianism which absorb the whole field of private relations and individual life into the sphere of Government action. It is opposed to all the so-called welfare plans. It stands for limited Government. Government, according to the philosophy we stand for should confine itself to Defence, Justice and the Rule of Law as against “welfarism” or regimentation.

The Libertarians oppose that the Government is above the law, whether in the name of Government, administration or the State. Thus, we run counter to the present-day fashionable slogans of socialism, communism, and even Planned Economy.

The Libertarians believe that the human collective has no being and consciousness of its own, to override the rights and happiness of the individual citizen. The State has evolved into being, in the course of human history, to defend society against external aggression and to enforce justice between man and man. Beyond it the State should not go and if it does that, it encroaches on the inalienable rights of the individual. In the limited government the right entrusted to the State to enforce justice between man and man, and to defend against aggression, through organised Army and the Police, is to be used strictly according to law and in conformity with the rights of the individual.

The libertarians are not concerned with the metaphysical discussion as to the ultimate nature of the human being, whether it is a soul, a spirit or only organic nature with an emergent consciousness. In any case, it is clear that the human being needs liberty of action to realize its full consciousness, and blossom forth to the full height of his stature. Liberty of action is part of his being, and without this liberty of action, he is reduced to a robot or a mere tool in the gigantic machinery of a totalitarian State. Freedom to choose his calling or trade, his hobbies and his pursuits, is an integral part of human nature. If these rights are denied to the individual, as it always happens under totalitarianism. such as earning a livelihood of his choice, associating with men of like mentality for the enjoyment of art, science and fellowship, the life of an individual is reduced to dead routine. without purpose and without any future.

**Libertarianism doesn’t mean licence**

Libertarianism does not mean licence or anarchy. Libertarianism, with its limited government, sets a limit, both on the actions of the individual as well as the State. Liberty of one must not encroach on the like liberty of his fellow-being. Citizens of a State under libertarianism have full right to do as they please so long as they do not infringe on the like rights of their fellow-beings. Under libertarianism, the State is not allowed to become the industrialist, the trader, the transporter, the educationist, the ethical preacher, the “do-gooder”. The practice of all “Welfare” States in taking upon themselves these duties invariably lead to corruption and an irresponsible and unremovable bureaucracy. As obligations of the State increase under totalitarianism, the taxes rise to ever-increasing spiral, until all incentive to production diminishes and production takes a downward trend. Added to these on the economic plane, the political trends of socialism and communism are ultimately destructive of democracy and democratic institutions. Since the Government of India embarked on their Planned economy all these evil trends are seen in the country. It is, therefore, all the more necessary for the intelligent section of the Indian public to clearly understand what is meant by “socialist pattern of society” and what is connoted by socialism or planned economy. It is here that the Libertarian philosophy shows the way out. It may appear to the superficially-minded person that we are championing a “lost cause”. It is not so, the more so when one knows how the British Socialist Party found itself against a dead wall in its crazy pursuit of socialism, and it had to be ousted. This has led to real re-thinking amongst the “brain-trust” of the British Socialist Party. The same thing is happening in the Iron Curtain countries, the hesitant policy of de-Stalinisation in Moscow, the Gomulka programme in Poland, and lastly the Hungarian revolt against communism and planned economy-all these events show that we, the Indian Libertarians, ARE CHAMPIONING A LIVE CAUSE. Man cannot be long deprived of his inherent right of Liberty and Freedom.

On this New Year Day, the Indian Libertarian pledges itself to go ahead with its propaganda and education, strong in the belief that in the ultimate end it is bound to succeed to the glory of India and of Humanity. The Libertarian Social Institute, Bombay, with its branches at Bangalore, Baroda, Nagpur, Patna and Madras is keeping aloft the torch of Libertarianism in the country. By our consistent propaganda and education, we shall fight against all the old and present-day socio-political clichés that thwart human progress, explore new roads to human happiness, along the libertarian paths, while examining anew old traditions and institutions, drawing from them all which human experience has proved valid and sound. That is our creed and our belief.

Here’s wishing all our readers a Happy and Prosperous New Year and the best of life’s good things.

*The original document can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=928760873.pdf).*

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

*[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## The Supreme Court of India Needs a Breather

Original: https://www.spontaneousorder.in/p/supreme-court-needs-a-breather

Author: Spontaneous Order

Published: 2019-12-31T12:12:35.000Z

Topics: judicial-reform, supreme-court, rule-of-law, regional-benches

> In September 2019, while launching a book, the Vice President and Chairman of the Rajya Sabha, M. Venkaiah Naidu, spoke about judicial reforms for the speedy resolution of pending cases. In his speech, Mr Naidu suggested bifurcating the Supreme Court in..

**Summary:**

The Supreme Court of India is overburdened by its expansive jurisdiction under Article 32 for fundamental rights enforcement, appellate role in civil and criminal cases, and advisory powers under Article 143, causing severe delays in justice delivery. The post advocates bifurcating the Court into a Constitutional Division for constitutional matters and a Legal Division for appeals, as recommended by the 10th Law Commission (1984, 95th Report), 11th (125th Report), and 18th (2009, suggesting four cassation benches). Vice President M. Venkaiah Naidu proposed four regional branches in 2019. Internationally, 55 nations like France, Germany, Colombia, and Russia operate separate constitutional courts alongside courts of last appeal. India's judge-to-population ratio stands at a mere 10.5 per million, far below the US (107), Canada (75), UK (51), and Australia (46). Regional benches would alleviate travel and cost burdens on litigants, especially the poor, aligning with Article 130's provision for alternative seats. From a classical-liberal perspective, this reform would decongest the apex court, enabling greater enforcement of the rule of law and timely access to justice for individuals.

**Key points:**

- Bifurcate the Supreme Court into Constitutional and Legal divisions to separate constitutional matters from appeals and reduce pendency.
- Establish four regional branches to minimize litigants' travel costs and time, particularly benefiting poorer parties.
- India's 10.5 judges per million people lags far behind peers like the US (107) and UK (51), necessitating structural reforms.
- Multiple Law Commissions (10th, 11th, 18th) and 55 global precedents support dedicated constitutional courts for efficient judicial functioning.

**By Spontaneous Order**

* * *

In September 2019, while launching a book, the Vice President and Chairman of the Rajya Sabha, M. Venkaiah Naidu, spoke about judicial reforms for the speedy resolution of pending cases. In his speech, Mr Naidu suggested bifurcating the Supreme Court in four divisions and establishment of regional branches. These reforms will definitely have a positive impact on judicial pendency.

The bifurcation of the Supreme Court and establishment of regional benches in India has been though out for many years. The main reason for the same being the excessive jurisdiction of the Hon’ble Supreme Court. The Court has the original jurisdiction for the enforcement of fundamental rights under Article 32. It is the highest court of appeal in civil and criminal cases and also has advisory jurisdiction under Article 143 of the Constitution. Such wide jurisdiction has led to overburdening of the Supreme Court.

Due to the high caseload of the Apex Court, timely justice has become impossible at the highest level. Thus, we need to separate the functions of the Supreme Court. About 55 nations in the world, including Columbia, Egypt, France, Germany, Iran, Italy, Myanmar, Fiji, Russia, South American, and several other European nations have a separate “Constitutional Court” for constitutional matters and a court of last appeal for other matters for smooth functioning of the judicial system.

In 1984, the tenth Law Commission in its 95th Report titled “Constitutional Division within the Supreme Court – A proposal for”, recommended that the Supreme Court of India should consist of two Divisions – Constitutional and Legal. The Commission suggested that all constitutional matters should go to one division and the rest to the legal division. The same recommendation was made by the 11th Law Commission in its 125th report. In 2009, the 18th Law Commission recommended four cassation benches of the Supreme Court.

Today, the number of judges per 10,00,000 people is mere 10.5 in India. In comparison, the US has 107, Canada has 75, the UK has 51 and Australia has 46 judges per million people. Apart from the lack of judges, one can imagine the plight of the litigants who travel across the country to seek justice in the Supreme Court. They have to spend a lot of time and money in travelling to Delhi. The expenses quickly multiply if there is an adjournment. If we have four regional branches of the Supreme Court, life will become easier for a lot of litigants. It will also allow poorer litigants to seek justice in the Apex Court.

The framers of the Indian Constitution also hoped for regional branches of the Supreme Court as per Article 130. As per the Article, the Chief Justice of India may decide the seat of the Supreme Court with the approval of the President. The bifurcation of the Supreme Court and establishment of regional branches will enable much greater enforcement of the rule of law.

*This is a guest post by Avtar Singh Panwar, 5th Year Student at the Government Law College, Indore. The article was originally [published](https://azadi.me/cassation-court-division-of-supreme-court-in-India) in Hindi at azadi.me.*

[Read More: Musings: Grievances in and of the Supreme Court](https://spontaneousorder.in/musings-grievances-in-and-of-the-supreme-court/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: The Secular State

Original: https://www.spontaneousorder.in/p/secular-state-rajaji

Author: Spontaneous Order

Published: 2019-12-27T14:29:03.000Z

Topics: secularism, indian-constitution, religion-and-state, american-secularism

> It has been repeatedly affirmed that when the Indian Constitution laid down that India shall be a secular State, it was not intended that the State should discourage or be hostile towards religion, but that what was intended was impartiality towards all..

**Summary:**

C. Rajagopalachari argues that the Indian Constitution's vision of a secular state entails impartiality towards all creeds and denominations, rejecting the notion that different religions form separate nations or that the state should favor one over others. This aligns closely with the American model, where 'secular' means non-sectarian rather than anti-religious: the U.S. Constitution prohibits establishing or prohibiting any religion but presupposes a religious society essential for citizenship and republican institutions, as Tocqueville observed. America's approach positively encourages all religious life to protect religion from state interference, unlike Europe's hostile view of religion as a threat to political unity and stability. India's framers did not intend to discourage religion but to foster tolerant appreciation of diverse beliefs and practices, recognizing religion's vital role in imposing behavioral restraints and safeguarding national stability against the risks of eroding faith. This path diverges from Pakistan's and Europe's, emphasizing religion's inestimable societal value from a classical-liberal perspective valuing individual moral foundations over statist indifference.

**Key points:**

- India's secularism means impartial encouragement of all religions, not hostility or indifference.
- American secularism positively supports religious life as indispensable for free institutions and citizenship.
- European secularism treats religion as a political nuisance threatening unity.
- Religion provides essential restraints on behavior, crucial for national stability.
- Indian Constitution places all creeds on equal footing, distinct from Pakistan's model.

**By Spontaneous Order**

* * *

It has been repeatedly affirmed that when the Indian Constitution laid down that India shall be a secular State, it was not intended that the State should discourage or be hostile towards religion, but that what was intended was impartiality towards all creeds and denominations. It was a refusal to accept the theory that different religions made different nations or that the State should belong to one religion more than another.

In a recent article in the *American Review of Politics*, an eminent writer has expounded (it great length how although the United States of America is a ‘secular’ State as far as any one denomination is concerned, it is at the same time a ‘religious commonwealth’. America, according, to this writer, believes in the necessity of a truly religious basis of citizenship. According to the American Constitution, Congress cannot make any law ‘establishing’ any religion or prohibiting the free exercise of any religion. But the American Constitution presupposes a religious society. ‘Secular’ in the American language means ‘non-sectarian’, and not a negation of or indifference to religion.

The basic relationship between religious life and politics in America is not founded on a negative policy of non-encouragement. It is a positive policy of impartial encouragement of all religions and of all religious life and activity in American society.

The European concept of the ‘secular’ State is very different. It is a concept hostile to religion starting out of a feeling that religion is a political nuisance and that religious belief is a threat to political unity and stable government. The American concept of the ‘secular’ State, on the other hand, is grounded on a firm belief in the incomparable value of the religious life. The separation of the State and Church in America arose out of the desire to protect religion and not out of hostility or dislike. The American people hold religion to be indispensable to the maintenance of republican institutions (Tocqueville). The framers of the American Constitution believed that the State can be free only it the people are basically a religious people. Although there has been some misunderstanding in some quarters about it, it may be stated that the Indian conception of a ‘secular’ State is nearer to the American concept than to the European. The Constitution did not intend to discourage or undervalue the place of religion in society. It placed all denominations and creeds on a religious basis without reference to the strength of their following. It marked out a different path from what was chosen by Pakistan.

It is true that national integration is rendered more difficult by differences in creed or denomination. But national stability would be fully endangered if all religious faith should gradually disappear. Whatever the forms and rituals of different creeds and denominations, religion and the restraints it imposes on human behaviour are of inestimable value to society, What the Indian Constitution-makers aimed at was not a general indifference to religion but a tolerant and broadminded appreciation of all creeds and denominations and a respect for one another’s religious beliefs and practices.

This article by C. Rajagopalachari (Rajaji) first appeared in the August 1957 issue of Swarajya Magazine. The original document can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=477576353.pdf).

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Do Liquor Bans Actually Work?

Original: https://www.spontaneousorder.in/p/do-liquor-bans-actually-work

Author: Spontaneous Order

Published: 2019-12-17T12:42:19.000Z

Topics: alcohol-prohibition, black-markets, government-failure, police-misallocation

> Gujarat Chief Minister Vijay Rupani recently informed the State legislative assembly that in the last two years, liquor worth ₹252 crores has been seized in the dry state. In Gujarat, manufacturing, selling and consumption of liquor is banned with a few

**Summary:**

Gujarat's liquor ban has failed to curb alcohol availability, with Chief Minister Vijay Rupani admitting to seizing ₹252 crores worth of liquor in the last two years—a figure likely understated, indicating rampant black market activity. From a classical-liberal viewpoint, prohibition does not reduce consumption but drives it underground, inflating prices and empowering criminal cartels and gangs. This leads to severe side effects: producers spike illicit liquor without fear of legal recourse, causing hundreds of deaths from alcohol poisoning in dry states like Gujarat and Bihar, where victims cannot complain without self-incriminating. States forgo massive revenue—alcohol taxes comprise roughly a quarter of state incomes, with Gujarat losing ₹10,000 crore annually. Purported benefits like reduced crime, fewer traffic accidents, and better health are unproven; instead, crime rises via bootlegging, police resources are diverted from serious offenses like rape and murder to chasing bootleggers, and courts are overwhelmed, as in Bihar with over 2 lakh ban-related cases clogging the Patna High Court. Liquor bans, often politically motivated to appease voters, achieve none of their objectives while imposing high costs on law and order, revenue, and public services.

**Key points:**

- Liquor bans fuel black markets and criminal enterprises by raising prices and profits for bootleggers.
- Prohibition leads to adulterated alcohol causing deaths, as victims in Gujarat and Bihar cannot seek legal redress.
- States lose substantial revenue, with Gujarat forfeiting ₹10,000 crore yearly and alcohol taxes forming ~25% of state incomes.
- Police and courts are overburdened with ban enforcement, diverting resources from rapists and murderers—Bihar has 2 lakh related cases.
- No evidence shows bans reduce crime, traffic accidents, or improve health outcomes.

**By Aashish Shrivastava**

* * *

Gujarat Chief Minister Vijay Rupani recently informed the State legislative assembly that in the last two years, liquor worth ₹252 crores has been seized in the dry state. In Gujarat, manufacturing, selling and consumption of liquor is banned with a few exceptions for high-end hotels and outsiders.

If the Chief Minister is openly admitting to seizing ₹252 crore worth of liquor, then the actual figure is likely to be much higher. After all, governments rarely reveal damaging data to the fullest extent. It is also possible that a lot of contraband liquor is available in the state which the government hasn’t been able to find or seize.

One wonders why does the government think that banning something is the only way to control the production or consumption of alcohol? Even after the ban, a significant quantity of liquor has been seized and we will probably never know the full extent of the availability of contraband liquor in the market. Banning of a product does not stop people from consuming it, it just opens the door for the black market as the price of the product rises and it becomes a profitable activity for criminal enterprises. Bans also lead to the formation of cartels and criminal gangs.

**Side-effects of liquor ban**

When liquor is banned, the producers can easily spike the liquor without having any fear of the consumer filing any complaint against them with the police or court. It is no wonder that most [cases of alcohol poisoning](https://frontline.thehindu.com/static/html/fl2616/stories/20090814261602400.htm) occur in states where governments have banned it. Hundreds of people have died in Gujarat and Bihar where people are not even able to file a complaint against the culprits as they were also breaking the law. Simply imposing a ban is not a solution.

In India, taxes from alcohol sales form [roughly a quarter](https://economictimes.indiatimes.com/news/politics-and-nation/heres-why-booze-bans-dont-work/articleshow/67224464.cms?from=mdr) of state revenues & Gujarat [loses ₹10,000 crore](https://www.business-standard.com/article/punditry/why-alcohol-ban-in-bihar-is-likely-to-fail-115122900192_1.html) annually due to the liquor ban. State governments impose the liquor ban to placate certain voter groups. Governments also cite other reasons such as reducing crime, preventing traffic accidents, improving health for banning liquor. However, these goals are rarely achieved.

Instead of a reduction in crime, criminal activity generally increases because enterprising elements start to indulge in bootlegging. Health outcomes remain the same. A ban doesn’t stop people from drinking. It just pushes them to drink illegally. The data on traffic accidents is murky; there is no statistical evidence to suggest that traffic accidents reduce when liquor is banned.

Further, bans come with their own cost to the law and order situation in the state. Instead of catching rapists and murderers, police ends up using their limited resources to run after bootleggers. The courts also bear the burden from the increased caseload. The Patna High Court recently chided the Bihar government for the liquor ban which has clogged courts with over 2 lakh cases related to the alcohol ban imposed in 2016.

In conclusion, liquor bans do not achieve any of their intended objectives and result in significant loss of revenue, poor policing, and high cost to the public due to forgone public services.

[Read More: Are Free Markets Moral?](https://spontaneousorder.in/are-free-markets-moral/)

* * *

**About Aashish Shrivastava**

Aashish K. Shrivastava is a student pursuing his Bachelor's in Media and Communication from Jindal School of Journalism and Communication. Hailing from the city of Patna, he has a keen interest in analyzing political scenario as well as public policies and is driven to make people aware of the politics which goes unseen and is related to the public policies which might affect them in the long run. When he's not busy analyzing the public policies and political activities, one can find him exploring the world of music and movies.

## SO Dialogue: Decoding India’s Onion Crisis

Original: https://www.spontaneousorder.in/p/so-dialogue-decoding-indias-onion-crisis

Author: Spontaneous Order

Published: 2019-12-16T15:00:54.000Z

Topics: onion-crisis, export-bans, agricultural-policy, state-interventionism

> India’s double-faced onion crisis poses a policy challenge with implications for the large segment of the population. With no good substitute, onion is an integral part of your average Indian thali. The rising onion prices thus hit the poor consumers th

**Summary:**

India’s onion crisis features soaring prices that disproportionately burden poor consumers, as onions are indispensable in the average thali with no adequate substitutes. The government's knee-jerk interventions, such as export bans, fail to resolve shortages and instead inflict losses on farmers, exemplifying how state interventionism harms both consumers and producers. From a classical-liberal perspective, this political economy reveals the pitfalls of heavy-handed regulation disrupting market signals in agriculture. Barun Mitra and Vivian Fernandez unpack these dynamics in a Spontaneous Order Dialogue, critiquing pseudo-socialist policies that deviate from India’s liberal heritage and native traditions, advocating for a freer political order to avert such recurring crises.

**Key points:**

- Rising onion prices hit poor Indian consumers hardest due to onions' essential role in daily meals.
- Government export bans intended to curb shortages cause financial losses for onion farmers.
- State interventionism in agriculture creates dual harms for consumers and producers alike.
- Classical-liberal analysis calls for reducing regulatory overreach to enable market-driven solutions.

**By Spontaneous Order**

* * *

India’s double-faced [onion crisis](https://spontaneousorder.in/onion-export-ban/) poses a policy challenge with implications for the large segment of the population. With no good substitute, onion is an integral part of your average Indian thali. The rising onion prices thus hit the poor consumers the hardest. Not only that, the knee-jerk reaction from the government to tackle the crisis, in turn, creates new problems for farmers. Indian state’s interventionism harms farmers who incur losses. Tune in to the [Spontaneous Order Dialogue](https://www.youtube.com/playlist?list=PLysF1qZYkiGHtkO2ycfweBuFfScohV_M2) where Barun Mitra and Vivian Fernandez unpack the political economy of India’s onion crisis.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: Speech by Shri C Rajagopalachari at the Swearing-in Ceremony

Original: https://www.spontaneousorder.in/p/rajagopalacharis-speech-swearing-in-governor-general-of-india

Author: Spontaneous Order

Published: 2019-12-15T14:44:58.000Z

Topics: rajagopalachari, communal-harmony, indian-unity, classical-liberalism

> The following is the speech made by the first native Governor-General of India Shri C Rajagopalachari. In these trying times when the Indian polity is divided on communal lines, it is important to remember the vision of India highlighted by its founding..

**Summary:**

In his 21 June 1948 swearing-in speech as India's first native Governor-General, C. Rajagopalachari expresses gratitude for the honor and pledges to serve with integrity, following his predecessor Lord Mountbatten's example of detachment and devotion. He underscores India's commitment to universal citizenship pride and joy irrespective of caste, creed, or race, ensuring no disabilities based on community. Rajagopalachari declares the end of dynastic rule and domination by force, urging all communities to abandon territorial, racial, or religious isolationism. Instead, the best talents from every group must serve the entire state through willing cooperation and intercommunication. He warns that current internecine discord is pure folly, especially given India's profound economic interdependence that cannot be severed by political partition. What has been shaped by age-long forces into beauty and joy risks becoming strife and misery. In these trying times of communal division, the speech revives the founding fathers' classical-liberal vision of unity, individual dignity, and mutual service over division and force, calling for wisdom to foster good thoughts amid temptations of evil.

**Key points:**

- India guarantees pride and joy in citizenship to all, irrespective of caste, creed, or race, with no community-based disabilities.
- Communities must reject isolationism, spread out, and have their best talents serve the whole state through cooperation.
- Internecine discord is folly due to India's unbreakable economic interdependence post-partition.
- Dynastic rule and domination by force are over; thriving requires willing intercommunication among all groups.

**By Spontaneous Order**

* * *

The following is the speech made by the first native Governor-General of India Shri C Rajagopalachari. In these trying times when the Indian polity is divided on communal lines, it is important to remember the vision of India highlighted by its founding fathers.

“I am very grateful to you all for your participation at this ceremony, your presence has lifted the occasion from the place of a mere ceremony to that of human fellowship and cooperation.

Speaking objectively, the occasion is undoubtedly historic, for this is the first time that one who belongs to the soil has, in accordance with the wishes of the Prime Minister of India and his Cabinet, been entrusted with the honour and the duties of the Head of the State in India. I owe a debt of gratitude, which I cannot hope to repay, for the signal honour implied in this my installation. I hope I shall act, on every occasion and in every matter, in a manner worthy of the trust reposed in me. The work of my predecessor during his memorable term of office was a marvellous instance of detachment, devotion and energy on the part of one who, though not belonging to India; worked as one belonging to her and did his work in the spirit that is laid down in our scriptures with regard to the task that falls to any one. I come after him but I hope I will be judged by standards suitable to one who is inexperienced either in arms or in diplomacy, unlike my illustrious predecessor.

Our problems have multiplied beyond all expectation and are such as may perturb even the most adventurous spirits among us. The only remaining interest in life which moves my colleagues who are entrusted with the charge of the affairs of India is the happiness of our people and the good name of our country. This is the passion that binds them together. They have experience and nobility of character. May God enable them to achieve the purpose so dear to their hearts.

I shall be proud to render then all such assistance as I can in this position.

India is unchangeably committed to the policy of making everyone within her borders find pride and joy in citizenship irrespective of caste, creed or race. No one will suffer any disability by reason of the community to which he or she belongs.

The days of dynastic rule or domination through force are gone in India. No territorial or racial or religious community can hope to thrive or maintain its happiness through force without the willing and full cooperation of other people and the utmost intercommunication, It is, therefore, necessary that all communal and territorial isolationism should be abandoned and the best talents in every community should seek to serve the whole state. Communities should spread themselves out rather than build walls around themselves.

Whatever be the technical phraseology which public law may use to describe it, what disturbs the peace of India now is internecine discord pure and simple and it is utter folly. Our economy has not yet had time to separate into two parts corresponding to the political division to which we have agreed. It is very doubtful if it ever can be so split. We are far too interdependent and whatever we might do, there will yet be vital links that can never be severed. It is folly to quarrel and make into a scene of strife and misery what has been shaped by the pressure of age-long forces into a field of beauty and joy. Let us pray for wisdom and let us do what will make good thoughts grow and save them from being swamped by folly and evil which wait to tempt man.

I have received blessings and good wishes from great and good men in all parts of the world. May these help me to steer clear of error and enable me to be of some service to our people in the great office conferred on me.”

Chakravarti Rajagopalachari (10 December 1878 – 25 December 1972), politician, independence activist, lawyer, writer, historian and statesman; speech made at the swearing-in ceremony of first India-born Governor-General. 21 June 1948

*The original document can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=614176776.pdf).*

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Are Free Markets Moral?

Original: https://www.spontaneousorder.in/p/are-free-markets-moral

Author: Spontaneous Order

Published: 2019-12-10T16:15:29.000Z

Topics: free-markets, labour-regulations, minimum-wage, maternity-leave

> The concept of morality concerns itself with principles that distinguish right from wrong. A free market, by definition, has a decentralised order of things where individuals are allowed to make independent economic decisions, without any government int..

**Summary:**

From a classical-liberal perspective, free markets are moral because they emerge from decentralized individual economic decisions without government intervention, making participants—not the market itself—responsible for morality, unlike regulated economies emphasizing collective obligations. In a pure free market, wages follow supply and demand without minimums; a government-set ₹200/hour wage excludes desperate workers willing to accept ₹150, harming them more than potential exploitation. The 2017 Maternity Benefits Act amendment, extending paid leave from 12 to 26 weeks, mandating creches for firms with over 50 employees, work-from-home, and bonuses, has deterred Indian companies from hiring young women, denying them jobs entirely—which is more immoral than lacking such benefits. Free markets allow employee protests or exits, with social pressures enforcing norms, as in the 2018 All India Bakchod sexual harassment scandal forcing a hiatus. Mandates curtail liberty; socialism and communism fare worse by suppressing individuals. Subsidies mask taxpayer costs. Conclusion: Free markets are fairer, as supply-demand ensures individuals bear their choices' costs without societal impositions.

**Key points:**

- Free markets derive morality from individual choices, not inherent obligations or government mandates.
- Minimum wage laws like ₹200/hour exclude workers willing to accept less, such as ₹150, reducing opportunities.
- 2017 Maternity Benefits Act's 26-week leave and creche mandates discourage hiring young women, harming employment more than no benefits.
- Social pressures and market competition in free markets enforce accountability better than coercive regulations.
- Individuals should bear personal choice costs via supply-demand, avoiding hidden taxpayer burdens from subsidies.

**By Swati Singh**

* * *

The concept of morality concerns itself with principles that distinguish right from wrong. A free market, by definition, has a decentralised order of things where individuals are allowed to make independent economic decisions, without any government intervention. This means that the market itself cannot be moral or immoral – instead, its morality is determined by the people who participate in it.

Since individuals are the most critical players in the free market, their bottom line is all that matters, as opposed to a regulated economy where the idea of collective responsibility takes precedent. Essentially, there are no moral obligations in a free market.

In the theoretical case of a completely free market, there would be no requirement for a minimum wage as wages would be determined by supply and demand. One could argue that employers would find it beneficial to exploit their workers by paying them less for longer hours. However, this would still be better than a minimum wage set by the government.

Here’s an example to put things in perspective. Assuming that the minimum wage is set at ₹200 per hour by the government, a desperate worker, who is willing to work for ₹150 per hour will not be able to work even for that.

Another example is that of the Maternity Benefits Act, which was amended in 2017 to increase maternity leave entitlement from 12 weeks to 26 weeks. The act also specified a mandatory creche facility in organisations with more than 50 employees, work-from-home options and maternity bonus.

While in principle, this amendment is meant to encourage more women to join the formal sector, the reality is that a lot of Indian companies have found these requirements to be too costly. As a result, they have been unwilling to hire young women.

Coming back to the question of morality, what would be more immoral in this case? The fact that women don’t get 26 weeks paid leave, a bonus and other facilities or the fact that they don’t get work opportunities at all.

One could argue that in a free market, companies might not give any maternity leave. If that were the case, employees would also have the option of protesting or simply leaving the company for another which provides them with a better offer. In 2018, for example,  *All India Bakchod*, a Mumbai based company made headlines when several women accused founders and administrators of sexual harassment. This news caused a massive media outcry, and the company was forced to go on a hiatus.

Today’s society doesn’t take things like gender discrimination lightly. Women make up half of the workforce, and no company would want to discount them. Neither is anybody saying that companies should not give maternity leaves at all. However, forcing companies to do so only in the manner in which the government endorses it, harms both the companies as well as women in the workforce. It is also immoral as it massively curtails individual liberty and freedom.

If a free market is immoral because there isn’t any control over what companies can do, then other kinds of markets ([socialism](https://plato.stanford.edu/entries/socialism/) and [communism](https://www.newworldencyclopedia.org/entry/communism)) are even worse because they curtail the freedom of the individual. In a free market, the onus of everything is on the individual and not on society. There isn’t any shared responsibility, which might make it sound less “humanitarian”, but doesn’t make it any less moral.

As humans, we’re genetically predisposed to avoid pain and seek pleasure. Therefore, it is desirable for us if something is provided for – especially when we don’t realise the actual cost of it. For instance, if someone is getting a subsidy, people argue that it’s great that the government is paying for it. However, the government does not have any money of its own. The subsidy comes out of the taxpayers, *i.e.* it comes out of the pockets of millions of citizens.

In conclusion, a free market functions according to demand & supply. It doesn’t put any extra cost on individuals in the name of “society”- making it a fairer world since each individual bears the cost of their choices.

[Read more: SO Musings: Morality of the Market](https://spontaneousorder.in/dhanteras-morality-of-markets/)

* * *

**About Swati Singh**

Swati Singh works as an Associate at Centre for Civil Society, a public policy think tank in New Delhi, India. Hailing from the city of Mumbai, she has a keen interest in public policy and works towards simplifying and taking policy conversations to the common man through tools of the new media.

## SO Musings: A Rule of Law Society!

Original: https://www.spontaneousorder.in/p/so-musings-a-rule-of-law-society

Author: Spontaneous Order

Published: 2019-12-06T16:53:06.000Z

Topics: rule-of-law, private-property, free-contracts, tort-law

> The law perverted! And the police powers of the state perverted along with it! The law, I say, is not only turned from its proper purpose but is made to follow a totally contrary purpose! The law is becoming the weapon of every kind of greed! Instead of..

**Summary:**

Sauvik Chakraverti argues that a rule of law society, like those in London or Amsterdam, emerges not from police or dictatorship but from good laws centered on three principles: private several property, enforcement of free contracts, and torts for restitution. Private property predates formal law, underpins markets, family, morality across faiths, and ensures resource abundance—evident in no global oil shortages due to private ownership versus water shortages from state control, as in Dehra Doon's water diverted free to Punjab rice farmers needing 21 waterings. India's socialist constitution, the world's longest yet lacking property guarantees, enables 'legal plunder' like bank nationalizations, land redistribution, and rent control, fostering crime, slumlords, and urban decay. Contracts must be enforced without state-dictated terms, rejecting minimum wages that harm weakest workers and rent controls that deter housing. Torts compensate negligence efficiently, as in US 'wet floor' signs, enabling safe high-rises and drug innovation without FDA via liability. Rejects patents for copyrights; proposes auctioning Ayodhya site, private courts like California's 'rent-a-judge,' and a Second Republic to replace immoral socialist jurisprudence for a rich, moral, free, and beautiful society.

**Key points:**

- India's socialist constitution enables legal plunder by omitting private property rights, allowing nationalizations and rent controls that promote crime and scarcity.
- Law must protect private several property in land, water, and resources to ensure abundance and resolve disputes like Narmada without politics.
- Enforce freely entered contracts without minimum wages or rent controls, which harm the poor they intend to help.
- Apply torts for restitution from negligence, superior to criminal law, to build safe cities and compensate victims without state regulation.
- Adopt liberal jurisprudence via a Second Republic, private courts, and auction disputed sites to achieve a rule of law society.

**By Spontaneous Order**

* * *

*The law perverted! And the police powers of the state perverted along with it! The law, I say, is not only turned from its proper purpose but is made to follow a totally contrary purpose! The law is becoming the weapon of every kind of greed! Instead of checking crime, the law itself is guilty of the very crimes it is supposed to punish! If this is true, it is a serious matter and moral duty requires of me to call the attention of my fellow citizens to it.* 

**FRÉDÉRIC BASTIAT** 

The Law As a former Deputy Commissioner of Police, let me begin by asserting that a ‘rule of law society’ is not very difficult to achieve. It certainly does not require, as many morons believe, a military dictatorship. London, Frankfurt, Amsterdam… there is order in these cities not because of the police, but because of the people. 

All that societal order requires is good law – which all the people understand, and which all the people respect and follow, knowing well that it is in their interest to do so. Of course, judges and lawyers should be extremely well versed in these principles, and uphold them in their judgements and arguments. What are these principles? 

**PRIVATE SEVERAL PROPERTY** 

We are born with faculties which we exercise on the resources of the Earth to produce Property. The first nomad who cleared the forest and settled down in agriculture created Property. The chef who produces a meal at a restaurant produces Property – and we cannot consume the meal legally without paying something in exchange: the price. Private several property is basic to the morality of the market – indeed, it is basic to all human morality. 

Property existed before formal law was made; indeed, formal law was made because there was property. When delivering the Ten Commandments, the Prophet Moses thundered “Thou shalt not steal”. Without an understanding and respect for what’s ‘mine’ and what’s ‘not mine’ no trade can take place. The market cannot work if it is legal or moral to steal. If too many thieves come to the bazaar, the shopkeepers have no option but to take their business elsewhere. 

The notion of private several property goes even deeper into human morality than market exchange: it goes into the very way we breed; it goes into the most important of human institutions – the family. A woman puts sindoor on her head to indicate to all that she belongs to someone, and is not ‘free’. A man wears a wedding band for the same reason. And all the people respect this: otherwise human society would break down. It is not breaking down not because some dictator is imposing the Law, but because everybody understands, respects and follows these basic rules of a rule of law society. The Prophet Moses also thundered “Thou shalt not covet another man’s wife.” In the Ramayana, the villain Ravana is reviled because he has violated this most sacred of principles: he has run off with another man’s wife. Hinduism, Islam, Christianity… indeed, all faiths, respect private several property. 

Socialists do not. The Constitution of India is the longest written Constitution in the world – which means we Indians must have desired justice. But this enormously long Constitution does not guarantee private property rights! Thus, Indira Gandhi could nationalise private banks, she could nationalise the coal mines, Air India… what have you. The law allowed it. The law did not say that the airline belonged to JRD Tata and the State has to protect Property, not take it away. 

Socialist law is ‘legal plunder’ – to use Bastiat’s immortal words. And it is not just nationalisation. There is legislation on issues such as ‘land redistribution’: which means that the Law will steal land from those who have it and give it to those who don’t. There are rent control laws by which tenants can take over the landlord’s property. These immoral laws promote crime. There are private armies in Bihar because the law is perverse. There are underground dons involved in tenancy disputes because of the law. Slumlords happen because the law does not approve of landlords and landladies. Indeed, priceless urban properties are destroyed because landlords can no longer afford their upkeep. 

Private several property is vital if the environment is to be looked after and natural resources managed such that there is always abundance. Chickens, goats, pigs and cattle survive because they are private several property: someone owns them. Endangered species would survive too if we could farm them. The wilderness can also be privatised and protected as the personal property of those who value wilderness. 

On the management of natural resources, consider the curious fact that there is no shortage of petrol or diesel in the world, although the Earth possesses very little oil. And there is a shortage of water despite the fact that the Earth is made seven parts of water! This is because the State owns all the water; while in the case of oil there is a market working and underground oil fields are private several property: you can own an underground oil field. When the state owns all the water, there are bound to be shortages. As Milton Friedman famously remarked, “If you give the Sahara Desert to the government, there will be a shortage of sand in 5 years!” 

Picture the town of Dehra Doon, which lies between the Ganga and the Yamuna – north India’s mightiest rivers. There is a water shortage in Dehra Doon. To find out why not visit Dakpathar, 40 km from Dehra Doon on the banks of the Yamuna. Here the state is damming river water and despatching it free to Punjab farmers who use it to grow rice (which requires 21 waterings). The town of Dakpathar is a ghost town amidst beautiful landscape because the irrigation department, which owns the town, is broke, and is making no profits from the water. In the case of the Narmada Dam, everyone says the tribals must be compensated for their land which was inundated; no one says they should be compensated for the river water, over which they must possess shared property rights because they have been living next to the river for millennia. 

If property rights were established over river water, the Narmada and the Cauvery issues could be settled without politics. And with justice. Now, the Law is being employed to force the issue, and this backfires as, for example, when the Karnataka chief minister refused to comply by the Supreme Court’s directives. With property rights applied uniformly as a principle, the law is easy to enforce. Everyone follows the law. And there is abundance of all resources. 

Some consider intellectual property rights like patents to be essential. I do not believe in temporary monopolies granted by the state. If without them, all innovation would cease, we wouldn’t be flooded with recipe books! Or with new fashions. Those who are asking for patents are simply saying: I have a great idea that can make money only if the State grants me a temporary monopoly. Why doesn’t every fashion designer or recipe book author say the same thing? What is required is copyright protection – not patents. And for drug companies: if we apply torts (see below) they would not need to go through expensive regulatory bottlenecks like the US Food and Drug Authority (FDA). Without the FDA, new drugs would be cheaper to deliver to the market and, in case there are errors and consumers are harmed, tort laws can yield suitable compensation. 

Even when enforcing copyright protection, judges should be careful to see whether there is mens rea and genuine fraud. For example, someone who sells a Rolex for 300 rupees is not trying to pass it off as a genuine article: he is selling it as a ‘duplicate’ that is cheap and not covered by any guarantee. The consumer should be free to buy this ‘duplicate’. And if Rolex watches can be copied for so little, the company better wake up and improve its product. Think: if we want to really enforce copyright protection blindly, we would probably have to bomb Ulhasnagar. I have never been there but am told that the entire town specialises in making duplicates. We would also have the police searching all our houses for music CDs we have ‘burned’ from our friends. 

We form collectives like the state for one reason only: to protect ourselves and our properties better. We do not have the power to take other’s properties away. So, when we get together to make the Law, this law too cannot have the power to take anyone’s property away. The basic purpose of Law is the protection of property. Since the socialist Constitution of India does not recognise property rights, Indians must press for a Second Republic, for this socialist constitution is an immoral document. 

Liberal jurisprudence, based on private several property, can also solve some pressing problems that the Hindutva brigade has thrust upon us. If they have their way, Parliament will soon pass a law banning cow slaughter – and I will be denied my steak. A liberal Supreme Court would tear up any such law on the grounds that cows are private property and the State cannot interfere. Everyone must be free to do what he wants with his own cow: free to either worship it or eat it. \*

Similarly, the ‘disputed site’ at Ayodhya. To ‘de-politicise’ matters, the issue was referred to the Supreme Court. What did this socialist court do? They asked the Archaeological Survey of India to dig up the disputed site and discover what lay underneath. Is this the application of our principle? If a temple to the Goddess Piripiri of the Bhotcharge tribe is discovered under my house, can a latter-day Bhotcharge lay claim to my property? Certainly not! If liberal jurisprudence is applied to Ayodhya the solution is clear and simple: there is no clear title to the site; there are various claimants, each possessed of little legitimacy; therefore the site must be auctioned. We could auction it off in little lots – one auction every year – and in this way keep religious fanatics out of politics, busy collecting money all their lives. 

Socialist jurisprudence is not justice. Socialists reject the natural law of property and believe that the purpose of the law (and the State) is to redistribute property. Theirs is a Robin Hood ideology – but it is time we stopped looking at their ‘legal plunder’ (what they call ‘redistributive justice’) as romantic.

**CONTRACTS** 

The second feature of Law is that it must enforce contracts that are freely entered into by the people. That is, all the people are free, and, as free people, they will naturally enter into contracts with each other – say, a labour contract, a rental contract, a contract to repay a loan or a contract to use a telephone or electricity service. The Law must enforce these contracts when anyone violates them. The Law cannot dictate the terms of the contract. 

But that is precisely what socialist law does. For example, I freely enter into a labour contract with a migrant worker – but the labour inspector will put me in jail and the labour laws will declare the contract invalid if I do not pay ‘minimum wages’. The socialist law will declare the contract voluntarily entered into by two free people null and void – because legislators want to dictate terms. They should not have this power. This is not the purpose of the Law. 

Consider the damage done by minimum wages: the minimum wage is bound to be higher than the market clearing wage – or what’s the point. Now, as any simple demand and supply diagram will tell you, if you set a price by force which is higher than the market clearing price, less of the good will be demanded. Thus, in this case, less labour will be demanded. Further, when laying off workers, firms will retain their best people, and lay off the weakest workers – like the trainee or the apprentice. Firms might also be able to use prejudice when laying off workers – firing the Blacks or the Muslims or the lower castes. Firms will also have the incentive to use more machines, as they will become relatively cheaper. The purpose of minimum wages is to benefit the weakest worker, he who cannot legitimately earn that wage; the effect of minimum wages is to hurt the weakest workers. The apprentice or the trainee gets thrown out, or employed illegally, without any employee protection whatsoever. This is a classic case of the Law of Unintended Consequences: Nothing Causes More Harm Than Good Intentions! 

Similarly with rent control law: free contracts between landlords and tenants are declared null and void if they are not on the side of the tenant. This takes away the incentive for landlords to build property and let them out to poor people who, of course, cannot afford to buy property. These poor people now have no choice but to go to the politically sponsored slumlord. The law was intended to benefit tenants; yet it hurts poor tenants most. 

A third example of the non-enforcement of contracts concerns bankruptcy law. As we saw in the case of Rembrandt’s house in Amsterdam, it was bankruptcy law – the enforcement of a contract between a creditor and a debtor – that allowed the housing finance market to flourish. In India, till recently they did not care if people defaulted on their loans. The legislators did not care because they were running the banks as public property and were willfully allowing their friends to loot these banks. Thus, in India, there is still not a vibrant market for mortgage finance. This cannot happen so long as the debtor 436 can walk off with the financier’s money. People will not lend for housing as long as the loan contract is not enforced by the Law. 

A fourth example of non-enforcement of contracts concerns the Indian rupee, on which the governor of the central bank ‘promises to pay the bearer a sum of X rupees’. When the governor cannot convert his note into money – be it gold, dollars or yen – it is the central banker who should be in prison: a debtor’s prison. The Foreign Exchange Regulation Act (FERA) is immoral legislation. 

**TORTS** 

If you go to McDonald’s at a time when the floor is being cleaned, you will always find a sign saying: Caution! Wet Floor. This is a standard practice in McDonald’s worldwide. However, if you go into any Indian restaurant when the floor is being cleaned, you will not find this sign. Why is this so? 

This is because there is tort law in America. If you slip and fall and break your leg in a McDonald’s in America (and the floor is wet), you will get very rich very soon if the sign had not been there. You will not even have to find a lawyer: the lawyer will find you and take up the case free so long as he gets a share in the spoils. 

Tort laws are a pillar of a rule of law society. It is always possible that people will be negligent. The right thing in such circumstances is to apply tort law and compensate the victim. In torts, the case is decided ‘on the preponderance of evidence’. In criminal law it is decided ‘beyond any reasonable doubt’. Thus, criminal cases are difficult to decide while tort cases are relatively simpler. This also makes sound economic sense, as David Friedman has pointed out: society faces a net loss when someone is imprisoned or executed, so these cases should be decided very carefully; society does not lose in tort cases as there is a simple transfer of resources, and so these cases should be decided fast. Torts are based on a higher jurisprudence: that of ‘restitution’: the negligent one restores the damage caused to the victim. 

Criminal law is based on the doctrine of ‘retribution’: that you suffer for your sins. The doctrine of retribution is an older and less sophisticated jurisprudence. Further, criminal law is more concerned with ‘crimes against the state’ – with ‘public prosecutors’ and ‘public police’ and ‘public jails’; on the other hand, tort law recognizes the fact that crimes are always against individuals, and these individuals must be compensated by those who have committed these crimes. 

Once, a colleague lost a lighter of mine, which he had borrowed. I offered him either retribution or restitution – either we cut off an arm or he restores to me a new lighter. He willingly chose restitution, and I now have a replacement lighter. 

The advantages of having tort laws are various. Consider, say, the Gujarat earthquake. Many badly constructed buildings fell down. The newspapers reported of corruption among builders and their collusion with the authorities in charge of passing buildings. The urban development minister proposed registration of builders in Delhi and stronger building bye-laws. Will these work? Of course not! 

Now think of what tort laws can do. If there were tort laws, then the builder of the building that falls down would have to pay up. He would anticipate this and look for insurance. Then, the private insurance company would check the building and insure it only if it was well constructed. 

In this way, Manhattan skylines could erupt in our cities. Today we do not have these Manhattan skylines not because our architects and builders are incompetent – but because the authorities do not allow tall buildings to be built. With freedom, governed by tort laws, they would be free to express themselves, and build. And the consumer would be safer too. 

Consider other cases too – like the dropsy case in which adulterated mustard oil was sold, or the Uphaar cinema fire case in which many lives were lost, or even the Bhopal gas tragedy. In all these cases criminal law was applied, the police called in – and nothing happened. \*\*

If tort laws were used, victims of negligence would get immediate compensation. Sellers, i.e, the retailers, of spurious medicines would have to pay up. 21 At the time of printing, some monetary compensation has been ordered in the Uphaar fire tragedy. Interestingly, the cinema owners as well as the civic authorities have to all pay up. But this was a criminal case.  

Someone asked me once: “Why don’t the socialists like torts? After all, unlike property rights, this has nothing to do with ideology.” There are two possible reasons. The first is that the state would get sued to the bone and wants to evade responsibility for the negligence of its minions. I take my girlfriend out for a drive. We hit an unmarked speed-breaker and she goes flying out of the window. I have lost a girlfriend. I should be compensated. But I will not be – because the state wants to evade responsibility. 

The second reason is more macabre: they prefer using criminal law because they can effect a squeeze on the negligent person. Once they drag the police in, the perpetrator of the tort will pay up – to the politicians and the police. The victims will get nothing. They think this is justice. It is not. It is corruption pure and simple. 

With these simple laws, and complete freedom, there will be a rule of law society. The police will only look after crimes like murder, theft and rape, and the people will be free to live their lives doing whatever they deem fit. Such a society will be rich and moral – and free. Justice will prevail. 

Such a society will also be beautiful. One thing strikes about our cities: they are ugly. Old buildings are not looked after because of rent control. New buildings are not built because of building restrictions. This ugliness is entirely the creature of socialist ‘urban planning’. Indian cities were 440 beautiful once. We were free to build freely, and landlords once had power over their properties. With socialism, and socialist construction (like DDA flats) ugliness has pervaded our lives. 

All Indians have a sense of beauty. All the people I know take special efforts to decorate their homes. My friend Nitin Donde has even made a film to show that street hawkers and vendors have a well-developed aesthetic sense: the manner in which they display their wares shows an understanding of colour! 

This planet is a beautiful place. Whatever we construct here must add to the beauty, not take away. 

These basic principles of a rule of law society do not need a very powerful ruler to enforce. In England, they evolved out of ‘common law’: basic simple law whose principles were applicable to all cases. The people respected the laws and the courts and the judges and followed the law. In India, our courts use force a bit too much: they forced CNG on the people of Delhi. They forced Haryana to close down mines. They did not consider either property rights or torts. They can use force like this because they have the all-powerful state to back them. 

Can justice be handled outside the state? I do believe it can. Law is an enterprise. But there are some problems when it comes to the final stage of enforcement. David Friedman and some others are inquiring into these issues.

I personally believe in private courts. In Gandhi’s memoirs as a lawyer in South Africa, he says that he always preferred arbitration outside the court, and when he did this, he felt he was performing social service. Most cases do not need to go to court. 

I also had the pleasure of briefly interacting with Professor Robert Cooter, author of the famous textbook on Law & Economics. He told me of California’s ‘Rent-a-judge’ companies. Two parties facing a legal dispute can go to one of these companies. These companies have many retired judges on their rolls. When any case comes up, the parties, with or without their lawyers, come before the private judge in a hired motel room. The private judge hears the arguments and delivers his judgement. He must make sure his judgement is acceptable to both parties or he would not get repeat business. He must also make such judgements because he cannot use force to push through his orders. 

State judges have no such incentives. They come from the breed of lawyers and so have the perverse incentive to prolong cases and see to it that they go to higher courts of appeal – so their lawyer friends can milk the client. They also can use force, so they do not need to be just to both parties. 

Of course, in India we have a brief history of private justice – in the courts of the East India Company cities. Judges like Sir Elijah Impey in Calcutta were far better than anything the socialist state with its ‘committed judiciary’ can put up. 

In a rule of law society everyone will instinctively follow the basic rules of the game. Law, like Economics, is about incentives. With the right law, people have the incentive to follow the rules. With the wrong laws, they willfully disobey, because the incentives are all wrong. This perverts society – and no amount of policing can cure it. 

All students of Economics abroad study the interaction between Law and Economics today – and vice versa. There are a few Law professors in every Economics department, and there are a few Economics professors in every Law department. In India now, the Delhi School of Economics has Professor TCA Anant, who takes a course on Law & Economics. I have not heard of any law college in India, which possesses an Economics faculty. Obviously, the first battle must be over how these two important subjects are taught.

\*A Rugby joke goes: A farmer was trying hard to bed his milkmaid, but she was always refusing his advances. So, to ‘turn her on’, he took her to watch his prize bull ‘servicing’ a cow. While the bull was busy, he turned to the girl and said, “I’d love be doing what that bull is doing.” “Then why don’t you? she replied, “it’s your cow!”

\*\*At the time of printing, some monetary compensation has been ordered in the Uphaar fire tragedy. Interestingly, the cinema owners as well as the civic authorities have to all pay up. But this was a criminal case.

Access the full document [here](http://indianliberals.in/~_admin/pdflanguage?id=2091167555.pdf).

*First Published in the book FROM THE HAIR OF SHIVA TO THE HAIR OF THE PROPHET … and other essays by Sauvik Chakraverti (1956-2014) an award winning columnist and author whose work lighted the path of modern Indian liberalism.* 

*Other works by the author can be accessed at [Indian Liberals](http://indianliberals.in/liberals-details?id=19), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Minoo Masani: From Socialism to Liberal Swatantra Party

Original: https://www.spontaneousorder.in/p/minoo-masani-from-socialism-to-liberal-swatantra-party

Author: Spontaneous Order

Published: 2019-12-04T13:02:05.000Z

Topics: indian-liberal-tradition, swatantra-party, anti-communism, economic-liberalism

> The forgotten politician Minoo Masani’s illustrious public career was an exercise in collaboration and confrontation with the other leading Indian nationalist figures. Himself one of the founding fathers of modern India, Minoo was both a nationalist and

**Summary:**

Minoo Masani's career exemplifies a pragmatic shift from democratic socialism to market liberalism, making him an ideal icon for Indian liberals. Initially influenced by LSE mentors like Harold Laski and 1927/1935 USSR visits, Masani advocated Soviet emulation, co-founded the Congress Socialist Party (CSP) in 1934 with JP Narayan and Nehru, clashing with Patel, Rajaji, and Gandhi. Disillusioned by Stalinist purges, CPI infiltration, and Gandhi's emphasis on means over ends, he resigned from CSP in 1940, critiquing Marxism's assumptions in 'Socialism Reconsidered' (1944) and proposing a 'mixed economy' in 1947 blending private enterprise, public sectors, and trusteeship—ideas Nehruvian socialism distorted into inefficiency. In the 1950s, Masani combated communism via Indian Committee for Cultural Freedom (1950) and Democratic Research Service, then co-founded Swatantra Party in 1959 with Rajaji against Congress's Nagpur Resolution on cooperative farming. Swatantra emerged as the largest opposition in 1967 elections but collapsed in 1971's Indira wave. Post-retirement, Masani built liberal institutions like the Leslie Sawhny Programme and Freedom First. The author argues Masani, the westernized Parsi liberal, surpasses self-identified conservative Rajaji as a model for fostering pro-liberty opinion in India.

**Key points:**

- Masani evolved from USSR admirer and CSP leader to Marxism critic, rejecting nationalization and dictatorship after witnessing Stalinist failures.
- He co-founded Swatantra Party in 1959 as a classical-liberal alternative to Nehruvian socialism, achieving largest opposition status in 1967 elections.
- Masani's anti-communist efforts included Democratic Research Service (1950) and cultural committees to counter CPI influence.
- Post-Swatantra, he nurtured liberal civil society via training programs and economic education initiatives.
- Indian liberals should emulate Masani's open-minded pragmatism over Rajaji's conservatism to build pro-market public opinion.

**By Sanjeet Kashyap**

* * *

The forgotten politician Minoo Masani’s illustrious public career was an exercise in collaboration and confrontation with the other leading Indian nationalist figures. Himself one of the founding fathers of modern India, Minoo was both a nationalist and an internationalist in his intellectual pursuits.

As a young admirer of the USSR experiment and an advocate of democratic socialism, Minoo worked with Jayaprakash Narayan and Nehru to turn Congress towards the left in the 1930s. His active leadership of Congress Socialist Party (CSP) turned both Sardar Patel and C Rajagopalachari against him.

Later in the 1950s though, Minoo Masani would collaborate with JP, Patel, and Rajaji to counter the spread of communism and Nehruvian socialist policies. Masani’s transition from an admirer of the Bolshevik Russia to the propagator of market liberalism in India reflects his pragmatism and open-mindedness, traits rarely found in most intellectuals and politicians.

### **Soviet Admiration and Communist Leanings –**

Minoo Masani’s tryst with politics began during his stint at the London School of Economics. There, he came in contact with Harold Laski and V Krishna Menon; dabbled in student politics as a Labour member; and visited the Soviet Union. Masani [admitted](https://books.google.co.in/books/about/Bliss_was_it_in_that_Dawn.html?id=ulyUnAEACAAJ&redir_esc=y) to learning more about politics in LSE than many Indian politicians would do in a lifetime.

While Moscow was a great improvement, Masani found Leningrad a shadow of its former self while visiting USSR in 1927. After his return, an impressed Masani wrote a series of articles for the Bombay Chronicles and advocated the USSR as a model for a free India to emulate. In his zeal, he even urged Pandit Nehru to visit the Soviet Union when the two met in London in 1927.

Minoo Masani’s second visit to USSR would come in 1935 as a member of the CSP to foster a deal with the Soviet Communists. *Soviet Sidelights*, his book on the Russian experience, paid a glowing tribute to the Soviet achievements. Later, in retrospect, he would call it naïve.

Back in India, Masani’s effort to start a socialist front had to wait for Gandhian manoeuvring. The failure of the first Roundtable talk led Gandhi to revive the civil disobedience movement. Masani also got involved this time and was imprisoned in Nashik in 1932. A group of socialists including JP, Achut Patwardhan, and Ashok Mehta were among the political prisoners in the Nashik jail. Minoo Masani’s discussions with JP paved the way for an anti-imperial socialist outfit within the Congress party. After their release, the Bombay branch of the CSP was formed in 1934.

The CSP positioned itself as a national socialist group within Congress to challenge the programs of both Mahatma Gandhi and the conservative faction. Masani, who was then the Joint Secretary, went on a mission to bring more leaders to the fold. Earlier, in December 1933, he met Nehru in Allahabad and requested him to join the group. Nehru welcomed the formation of the socialist group in Congress.

The radical socialists of Congress also had to face flak from outside and inside the party. CPI, following the Sixth Comintern Congress, labelled them as the social fascist. At the Lucknow Session of Congress in 1936, Rajendra Prasad took a jibe at Nehru and his socialist colleagues for deriving ideas from foreign books, inaccessible to Congress conservatives who came from a humble peasant background.

Sardar Patel also had an intense dislike for the reds. He denounced the Congress socialists as the “sappers and miners of the Communist Party”. The wittiest takedown, however, came from Gandhi himself. In response to Minoo Masani’s socialist agenda, he wrote, “the progressive nationalisation of all the instruments of production, distribution and exchange” was “too sweeping to be admissible. Rabindranath Tagore is an instrument of marvellous production. I do not know that he will submit to be nationalised.”

### **Socialism Reconsidered and Democratic Planning –**

Masani’s distancing from Soviet-style communism was seemingly precipitated by a series of events. In his later writings, he [attributed](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf) it to the failure of the USSR to deliver material prosperity and the influence of Gandhi.

The internationalist Masani was aware of the Stalinist purges and had criticised it in 1938 in the following words – “dictatorship of the proletariat has degenerated into a personal dictatorship”. He asked his fellow socialists to mobilise world socialist opinion to check further bloodshed. Characteristically, Indian communists, Nehru and JP criticised Minoo Masani for his scathing denouncement of totalitarian communism. By this time, Masani was also making a [distinction](https://books.google.co.in/books/about/Bliss_was_it_in_that_Dawn.html?id=ulyUnAEACAAJ&redir_esc=y) between his scientific socialism and the sentimental socialism: “The real choice today seems to me to be between scientific socialism and dogmatic or authoritarian socialism.”

Minoo’s criticism of the communist movement was further bolstered by the Communist Party of India’s bid to capture the CSP. Under the United Front strategy of the 7th Communist International, CPI was seeking to collaborate with the CSP, only to use it later for communist ends. Masani published in 1938 the secret communist circular which detailed the tactics for the capture. Ultimately, both JP’s insistence on the Left unity and the Congress vacillation over joining World War II led Masani to resign from CSP and retire from active politics.

In 1956, Masani [explained](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf) Gandhi’s role in turning him away from communism. Gandhi’s dictum that the end doesn’t justify the means translated into a repudiation of communist insurrections. Moreover, his characterisation of the state as the biggest threat to human liberty helped Masani fix his battles. However, as Minoo Masani’s biographer [S V Raju notes](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf), his departure from CSP didn’t turn him into an advocate of liberty. A series of essays on socialism published in the 1940s gives insight into the evolution of Masani as an intellectual shaped by the events around the globe.

*[Socialism Reconsidered](http://indianliberals.in/~_admin/pdflanguage?id=590973500.pdf)*, published in 1944, sought to question four core assumptions of Marxism. Masani, in a candid admission, stressed on the need for self-criticism after 25 years of Bolshevik revolution. The pamphlet though didn’t go down well with Pandit Nehru who was furious at Masani for [calling](https://books.google.co.in/books/about/Bliss_was_it_in_that_Dawn.html?id=ulyUnAEACAAJ&redir_esc=y) October Revolution “a false dawn”.

The four Marxist assumptions put under test included nationalisation leading to economic democracy; the dictatorship of the proletariat as a temporary transition phase; mobilisation of an international proletariat collective; and socialism as the only alternative to capitalism. On all these counts, the dogmatic doctrine floundered when applied to the real world. Minoo Masani’s desirable version of socialism would combine economic equality with individual liberty and political democracy. The influence of Gandhi was visible in Masani’s advocacy of trusteeship which for him served as a valuable transition technique. 

Masani’s conception of planning, as outlined in a [1945 article](http://indianliberals.in/~_admin/pdflanguage?id=590973500.pdf), sought to combine Big State machinery with individual freedom and private enterprise. His democratic planning was seemingly influenced by FDR’s Big Deal and the Scandinavian social democracy. Gandhi’s agenda of small cottage workshops in the countryside also found a place in the plan. Even though Masani recognised the need to balance planning with freedom, his policy prescriptions (licensing, wage and working condition regulations, price fixation) would have led to the curtailment of economic freedom. India’s socialist regime later implemented many of these ideas resulting in economic inefficiency.

With the publication of his next big idea on the mixed economy in 1947, Minoo Masani seems to have inched closer to liberalism. Delivered as a lecture at the Bombay University, *[A Plea for a Mixed Economy](http://indianliberals.in/~_admin/pdflanguage?id=590973500.pdf)* sought to combine free-market capitalism with a degree of state involvement. The importance of economic growth was recognised as he argued that the “economics of production must take precedence over the economics of distribution”.

He would now oppose the nationalisation of the economy, explain profit in terms of incentive to entrepreneurs, compare the free market in the USA with the communist USSR, and advocate foreign capital inflow to spur industrialisation. The peculiar feature of Minoo Masani’s mixed economy was the three-sector model – nationalised existing sectors barring the basic industry; new Public-Sector Enterprises covering areas left by the free enterprise; and the rest of the economy driven by free markets.

The PSEs were to be managed by a small board of professionals seeking to combine efficiency with welfare. The influential proposal was later adopted under the Nehruvian socialism which, according to [Masani](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf), *turned ‘mixed economy’ into a ‘mixed-up economy’*!

### **Liberal Dissent and Swatantra Years –**

Seemingly the failure of the mixed economy model propelled Masani into the liberal fold. He spent his earlier years on combating communist influence in India rather than a positive articulation of liberal ideas. In response to the communist infiltration of media and cultural outfits, Masani joined hands with JP, Ashok Mehta, and A D Gorwala to form the [Indian Committee for Cultural Freedom](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf) in 1950. The Committee was affiliated with the Paris based Congress for Cultural Freedom, an American anti-communist advocacy group.

Masani’s anti-communist avatar also made him amenable to Sardar Patel. With the help of Patel in the form of office space in Bombay, a telephone connection and funding, Masani founded Democratic Research Service in November 1950. The Service published pamphlets and Freedom First magazine, both disseminating anti-communist propaganda to the Indian public. In the *Communist Party of India: A Short History* (1954), Minoo Masani [called it](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf) a dagger pointed at the heart of Indian democracy.

The [1950s saw Minoo as a lonely liberal voice in parliament](https://www.livemint.com/Opinion/AL1dGwrVLENYQm0YhuGXFI/Unaffiliated-the-case-of-1957.html/) railing against the socialist policies of the Nehru government. Masani’s efforts at creating a liberal political front had to wait for the end of the decade. The opportunity came with the Nagpur Resolution of Congress in 1959.

The Congress Socialists’ advocacy of joint cooperative farming was widely interpreted as the state bid to collectivise peasants’ property in emulation of China and the USSR. Sensing an opportunity to create a broad-based coalition of big business, urban middle class, peasant proprietors and big landlords, Minoo Masani persuaded Rajaji to lead the new political party. Rajai, for quite some time, was very critical of state interventionism in his public pronouncements. As political scientist [Howard Erdman](https://archive.org/details/swatantrapartyin00erdm) has argued, the newly minted Swatantra Party had both Forum for Free Enterprise and All India Agriculturists’ Forum as its midwives.

The fact that Swatantra was a coalition of big business, feudal zamindars, princely interests as well as urban middle class and peasant-proprietors had opened it to criticism from the left. Pandit [Nehru dismissed the party](https://penguin.co.in/book/non-fiction/rajaji-a-life/) as belonging to ‘the middle ages of lords, castles and zamindars.’ Never mind the fact that the Party had difficulty in [attracting funds](https://penguin.co.in/book/non-fiction/rajaji-a-life/) from big business who were afraid of the repercussions from the Congress controlled state. In ideological terms as well, the party inherited a diverse lot. Rajaji and KM Munshi were Hindu conservatives; Homi Mody and Minoo Masani were westernised liberals; N G Ranga was the Gandhian peasant leader; the Raja of Ramgarh and Maharani Gayatri Devi represented princely interests.

The Swatantra Party’s electoral career was akin to a short-lived boom and bust cycle. The 1967 election saw it emerging as the single largest opposition party only to be swept aside in the Indira wave of 1971. Masani had skilfully steered party as a General Secretary and then the President. The devastating defeat made Minoo Masani resign from the party presidency and retire from politics altogether.

The sorry demise of Swatantra, however, didn’t put an end to Masani’s liberal activism. He would go on to build and nurture civil society organisations wedded to the liberal cause. DRS [winded up](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf) after the fall of communism, and the Freedom First shifted focus from anti-communism to positive advocacy of liberalism. The [Leslie Sawhny Programme of Training for Democracy](https://web.archive.org/web/20010809230349/http:/www.liberalsindia.com/indianliberals/profiles/minoomassani.php/) was Masani’s effort to train young people in democracy and build a liberal cadre. He also set up the Project for Economic Education in collaboration with the liberal economist B R Shenoy’s Economic Research Centre to disseminate liberal economic ideas in public domain. In Masani’s institution-building drive could be found lessons for Indian liberals of fostering a pro-liberty public opinion.

Zareer Masani, historian and Minoo’s son, has [argued](https://theprint.in/opinion/no-accident-india-forgot-swatantra-leader-my-father-minoo-masani-the-beef-eating-parsi/250483/) that the public discourse in India has recently seen a revival of Rajaji’s legacy while Minoo, the beef-eating, westernised, and atheist Parsi, remains forgotten. I would argue that in Masani, Indian liberals should find a more appropriate icon to emulate. Rajaji, after all, was a [self-identified conservative](https://penguin.co.in/book/non-fiction/rajaji-a-life/) rooted in his Hindu identity. Minoo Masani, in contrast, drew his ideas from the West to shape liberal India.

[Read more on the Indian Liberal Tradition](https://spontaneousorder.in/tag/indian-liberal-tradition/)

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## SO Musings: Liberalisation and Liberalism in India

Original: https://www.spontaneousorder.in/p/liberalisation-and-liberalism-in-india

Author: Spontaneous Order

Published: 2019-11-29T17:16:42.000Z

Topics: economic-liberalisation, liberal-philosophy, control-regime, personal-liberty

> In the following article on liberalism in India first appeared in the December 1995 issue of the Liberal Times, a quarterly journal published by Friedrich Naumann Foundation. There is a revolutionary change in the atmosphere, and it is entirely due to t..

**Summary:**

India's 1991 economic reforms have sparked revolutionary growth—potentially 11% GDP this year, 13% industrial growth, and a strong balance of payments after 1991's crisis—yet they remain uncelebrated and defensive due to the absence of liberty as the ultimate political goal. Inherited from WWII's Allied war economy, comprehensive controls like import rationing, food procurement, industrial licensing, capital flow restrictions via state banks, and discriminatory taxation persisted post-1947 to favor northern agricultural regions and the educated middle class over coastal industries and private owners, under socialist rhetoric masking regional and class conflicts. Periodic liberalisation episodes pragmatically relaxed licensing to avert crises but lacked liberal philosophy, reverting under entrenched interests. Western liberalism evolved from anti-monarchic individual freedom and rule of law to post-war social liberalism with welfare states, but in resource-poor India, social services like insurance and free education failed amid shortages. Personal libertarianism is weak, supplanted by state-enforced restraint for social order amid diversity, evident in publication bans. The classical-liberal author urges embracing consumer sovereignty, competition across enterprises (foreign, large, private), individual choice in services, and extremism in liberty to solidify economic liberalism.

**Key points:**

- India's control regime originated in WWII rationing and was retained post-1947 to favor northern regions and middle class over industry via licensing, capital controls, import restrictions, agriculture procurement, and discriminatory taxes.
- Liberalisation episodes since independence were pragmatic responses to crises without underlying liberal philosophy, allowing controls to reassert.
- Social liberalism's welfare ideals failed in India due to insufficient means, while personal liberty remains undervalued in favor of state restraint for social harmony.
- Post-1991 reforms achieved 11% potential GDP growth and 13% industrial expansion but face defensiveness and paranoia over foreign investment due to lack of liberty-centric worldview.
- To entrench reforms, cultivate extremism in liberty, affirming consumer sovereignty and free choice across diverse enterprises.

**By Spontaneous Order**

* * *

*In the following article on liberalism in India first appeared in the December 1995 issue of the Liberal Times, a quarterly journal published by Friedrich Naumann Foundation*.

There is a revolutionary change in the atmosphere, and it is entirely due to the economic reforms. And yet, no one boasts of the reforms; no one celebrates the reforms. This shyness, this awkwardness arises from the fact that liberty is not accepted in India as the ultimate goal of political systems. This is why, for instance, there is so much paranoia about foreign investments.

**Control Regime: Inheritance of the War Economy**

As part of the British empire, India took part in the Second World War on the side of the Allies; it thereby also became a part of the economic machine created by the Allies to fight the war. This economic machine embodied stringent controls. For instance, shortage of shipping and the risk of its loss on high seas led to the rationing of shipping space and hence of imports; to allocate the scarce imports, a Chief Controller of Imports and Exports was set up. The high war expenditure generated inflation and shortages; to protect the urban population from food shortages, a system of food-grain procurement and distribution was set up. Imported and local raw materials had to be rationed out amongst industrial firms; to govern this allocation, productive capacities of firms were monitored and controlled. In this way, a comprehensive framework of economic controls was built up during the war.

After the war, inflation and shortages continued, and they justified the continuance of wartime controls. So, when India became independent in 1947, it had a very comprehensive system of controls. Independence was followed by conflict in power-sharing between the industrialised provinces on the eastern, western and southern coasts and the northern agricultural hinterlands: in a democratic framework, the unindustrialised north won. Hence, the government retained the controls as a means of keeping the industry on a leash and bending it to the will of the north. Socialism was a mere slogan, in India as elsewhere: it was a means of regulating conflicts between regions and between classes. Over the ensuing forty years, the system of controls was used for favouring the development of the north to the retardation of the more advanced regions, and concurrently to favour the growing educated middle class against owners of industry. The major instruments of control employed were:

**Industrial licensing:**

This was used at various times for favouring state enterprises, small enterprises and co-operatives (which were mostly a form of state enterprises) against large and foreign enterprises.

**Control of capital flows:**

Through central ownership of the major banks as well as long-term investment Institutions, the government-controlled the flow of investible funds to the industry. This control further reinforced industrial licensing.

**Import controls:**

These were primarily used for favouring import substitution. But within import-substituting enterprises, the same priorities were followed as in industrial licensing. In particular, state enterprises were favoured against private enterprises.

**Agriculture procurement and distribution:**

These controls were initially employed for ensuring secure and cheap supplies of food-grains for the urban population. But as farmers acquired political power, the aim of agricultural controls also changed to raising farm incomes through high prices.

**Discriminatory taxation:**

This further reinforced the preferences embodied in the other controls. But as the taxes rose, pressure grew from various lobbies, and exemptions and rebates were induced which made the tax systems, both at the centre and in the states, very complex.

**Liberalisation Episodes without Liberal Philosophy**

This comprehensively controlled system was highly inefficient and ran into a crisis every few years.  But when this happened, some of the controls were relaxed to induce competition and to curb inefficiency. As the economy grew, the old-style, labour intensive controls also became impractical, so they were modified to accommodate the growth in the size and complexity of the system. But as soon as a crisis was over, the system tended to return to its old mode. This was because powerful interests grew up in politics, bureaucracy and industry which benefited from the controls.

The bouts of relaxation of controls were termed liberalisation episodes by Bhagwati and Srinivasan, and so they were in a sense. In every episode, certain controls – mainly industrial licensing and import licensing – were relaxed. But liberalisation had a practical aim, namely to reduce systemic inefficiency to sustainable levels. There was economic liberalisation, but there was no liberal philosophy behind it.

**Liberal Philosophy**

Liberal philosophy has two roots. There is the liberalism of Western Europe – the liberalism of the Whigs and the Liberals in Britain and the Liberal Party in Germany: comparable parties were to be found in most western Europe countries. This liberalism was an outgrowth of monarchic systems and developed in conflict with monarchic autocracy. It opposed absolutism and put forward individual freedom protected by the rule of law. As monarchic systems gave way to managed democracies, kings were replaced by conservative parties – parties of property owners which tried to use the state for the preservation of hierarchical systems. This change in the character of the ruling elite led to a change in the orientation of liberals. Besides individual freedom and the rule of law, liberals also came to espouse a caring state which assumed growing social responsibilities – responsibilities towards the poor but later towards entire populations. These responsibilities came to be taken even more seriously after the Second World War. The draconian systems of taxation that were built up during the war yielded large surpluses once the need for wartime expenditures was over. At the same time, the war left a great deal of devastation in some countries. Hence the surpluses were used in industrial countries to fund social services. In this way, very elaborate systems of social security were built up. In a sense, social liberalism triumphed over personal liberalism in the post-war era.

**Social Liberalism**

India belongs to that post-war era and was more influenced by social liberalism. The highly attractive ideals of social insurance, health insurance, free education etc. were readily received. But the means to finance those laudable social services were very limited. The result was that the services always ran in the midst of unmanageable shortages, their reach remained limited and fitful. The failure of social liberalism in India is a failure to match the means to the ends.

**Idea of Personal Liberty**

On the other hand, libertarianism has always been a weakly growth in India. The basis of libertarianism is the idea of human freedom and the related idea of tolerance for the freedom of others. Indians regard themselves as highly tolerant. But tolerance is relative. Because India is such a large and diverse country, diversity gives Indians the feeling that they tolerate it. But the same diversity leads them to put curbs on individual freedom designed to keep down social tensions. Thus, there have been occasions when the Indian government has banned publications. Yet, bans are not frequently imposed; and the grounds for the bans are very limited. The most common are religion and history; the object every time is to avoid offending some religious or parochial sentiment. Despite their limited scope, the bans reflect a widespread underlying consensus that personal freedom must be curbed for the sake of social order. Instead of an ideology of personal liberty, there is an underlying sense of personal duty; of restraint on behaviour, enforced if necessary, by the state.

**Economic reforms: On the Defensive**

This, in my view, is why the liberal economic reforms since 1991 have always been on the defensive. It is not for lack of success; starting from an abyss of collapsed growth and self-confidence, the economy is growing today at a very creditable rate which may well touch 11 per cent this year. The balance of payments, which was impossibly adverse only four years ago, is strong today. The industry is growing at 13 per cent. Apart from these cold statistics, there is for the first time a sense of excitement in the air, people feel that there are undefinable opportunities, unquantifiable hope. This is a revolutionary change in the atmosphere, and it is entirely due to the economic reforms. And yet, no one boasts of the reforms, least of all those who did the reforms. No one celebrates the reforms. A certain shamefaced modesty pervades the reforms. This is strange and inappropriate.

This shyness, this awkwardness arises from the fact that liberty is not accepted in India as the ultimate goal of political systems. This is why, for instance, there is so much paranoia about foreign investments. The foreign enterprise is seen as an intruder upon the economic space of the Indian enterprise, just as yesterday, the large enterprise was seen as an intruder on the space of the small enterprise, or the private enterprise as an intruder on the space of the government enterprise. The idea that the consumer is sovereign, that it is in the consumer’s interest that all enterprises, Indian and foreign, small and large, private and public, should compete in a level playing field, is still very foreign to India. The idea that choice is a part of individual freedom, that an individual should be able to choose from where he wants to buy his electricity or telephone services, is still very grudgingly accepted, and even then, many people would make all sorts of unnecessary reservations. The whole point of being the national of such a large and diverse country as India is to be free – free to believe what one likes, free to do what one likes, as long as it does not impinge on others’ freedom. Now that economic liberalism has arrived, almost by stealth, we must cultivate extremism in the service of liberty; only then will we provoke a fertile ground for the growth of economic liberalism.

*The original document can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=477849139.pdf).*

***[IndianLiberals.in](http://indianliberals.in/)** is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Basically – Episode 09 | Kya Hai Pollution Ka Solution?

Original: https://www.spontaneousorder.in/p/so-basically-episode-09-kya-hai-pollution-ka-solution

Author: Spontaneous Order

Published: 2019-11-29T13:46:47.000Z

Topics: air-pollution, delhi-pollution, environmental-policy

> “Seene mein jalan, aankhon mein toofan sa kyun hai? Is sheher mein har shaks pareshaan sa kyun hai?” To aakhir kya hai pollution ka solution? In this episode of SO Basically, we talk about the air pollution that has engulfed Delhi and its neighbouring

**Summary:**

This post is a short promotional teaser for Episode 09 of SO Basically, quoting a poem on Delhi's severe air pollution woes and questioning if government measures are sufficient or mere band-aids. It links to a Guardian article on Delhi's pollution crisis and urges viewers to watch the video for solutions, while promoting Spontaneous Order's 'Alternative 7-Point-Agenda to Combat Air Pollution'. No detailed arguments or conclusions are provided in the post itself.

**Key points:**

- Promotes a video episode critiquing government inaction on Delhi-NCR air pollution.

**By Spontaneous Order**

* * *

“Seene mein jalan, aankhon mein toofan sa kyun hai?  
Is sheher mein har shaks pareshaan sa kyun hai?”

To aakhir kya hai pollution ka solution? In this episode of SO Basically, we talk about the [air pollution that has engulfed Delhi](https://www.theguardian.com/world/2019/nov/04/delhi-residents-engulfed-in-pollution-blame-authorities-for-inaction) and its neighbouring states. Do you think the Government is doing enough to curb the deadly air pollution? Or are they just implementing band-aid solutions?

Watch this video to find out more.

[Read our Alternative 7-Point-Agenda to Combat Air Pollution](https://spontaneousorder.in/an-alternative-7-point-agenda-for-combating-delhi-air-pollution/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## The Radical Humanism of Jyotiba Phule

Original: https://www.spontaneousorder.in/p/jyotiba-phule

Author: Spontaneous Order

Published: 2019-11-28T17:42:08.000Z

Topics: jyotiba-phule, caste-reform, social-reform, indian-liberal-tradition

> Brought by the modernising force of British Raj, the cosmopolitan ferment of Pune in the late 18th century fostered a small Indian intelligentsia which had an immense influence on the shaping of modern India. Ramchandra Guha has pointed out that “betwee

**Summary:**

Jyotiba Phule, a radical humanist from Pune's 19th-century intelligentsia, prioritized lower-caste emancipation over nationalist unity, distinguishing him from figures like Gokhale and Tilak. Born to gardeners supplying Pune's elite, Phule's missionary education exposed the caste system's inequities, leading him to champion education for social mobility. With wife Savitribai, he opened India's first school for girls in 1848 amid orthodox resistance, promoted widow remarriage in the 1860s, founded an orphanage for illicit children in 1863, published Ghulamgiri in 1873, critiqued peasant exploitation, and established Satyashodhak Samaj in 1873 to unite Shudras and Atishudras. Phule innovatively inverted Brahmanical mythology, positing a pre-Aryan golden age of native rulers defeated by invaders, equating Aryans to European colonizers of American Indians. Drawing from Thomas Paine's 'Rights of Man' and dedicating Ghulamgiri to U.S. abolitionists, Phule embodied a global classical-liberal vision for justice. His legacy inspired Ambedkar, Periyar, and Maharashtra's movements for women, farmers, Dalits, and environmentalists, offering Indian liberals a reformist antecedent focused on individual emancipation over territorial nationalism.

**Key points:**

- Phule opened India's first school for girls in 1848 with Savitribai, facing expulsion from his family home due to orthodox backlash.
- He founded Satyashodhak Samaj in 1873 to unite lower castes and untouchables as Shudras-Atishudras against Brahmanical order.
- Phule inverted Aryan Invasion theory into a subaltern mythology, portraying pre-Aryan natives as just rulers defeated and degraded by invaders.
- Influenced by Thomas Paine, Phule dedicated Ghulamgiri (1873) to American abolitionists, urging Indians to emulate their fight against slavery-like caste oppression.

**By Sanjeet Kashyap**

* * *

Brought by the modernising force of British Raj, the cosmopolitan ferment of Pune in the late 18th century fostered a small Indian intelligentsia which had an immense influence on the shaping of modern India. Ramchandra Guha has [pointed out](https://newrepublic.com/article/104203/the-other-liberal-light) that “between 1875 and 1910, the city of Poona (now Pune) was in the vanguard of social reform.” The likes of Gokhale, Tilak, Chiplunkar, and Agarkar sought to reform and mobilise the native population to create a modern Indian society and polity. Jyotiba Phule, a fellow Punekar, stands out in the group though for his radicalism and advocacy of the lower castes.

Historian Gail Omvedt has [argued that Phule was an anti-nationalist](https://www.outlookindia.com/magazine/story/jyotirao-phule-1827-1890/296679/) in the sense that he would prioritise the emancipation of lower castes over the project of national unity which left unaddressed the question of social justice. His idea of patriotism wasn’t limited to mere territorial unity. Instead, an educated and enlightened society constituted his swadeshi ideals. Jyotiba Phule’s radical humanism made him distinct from other nationalist leaders and was emulated by both E V Ramaswamy and Bhimrao Ambedkar. His remarkable legacy could be attested by the fact that a set of [social movements](https://www.downtoearth.org.in/blog/the-fragmented-heritage-of-jotiba-phule-30457/) in Maharashtra involving women, farmers, Dalits, and environmentalists consider Phule as their forerunner.

Born in a family of gardeners that supplied flowers to the city’s elite, Jyotiba Phule had the opportunity to move between the upper caste elites and his *shudra* community. This, argues historian Sunil Khilnani, [introduced him to a social arrangement](https://www.outlookindia.com/magazine/story/jyotirao-phule-1827-1890/296679/) where opportunity was reserved for the few and privilege was preserved by the instrument of tradition. However, it was his missionary education that enabled him to challenge the oppressive caste system perpetuated by the Brahmanical order. With the introduction of western norms and administrative structure in the colonial enclaves, Phule sensed the importance of education in enabling social mobility for the lower castes and women.

With the support of his wife Savitribai Phule, he went on to open the first school for girls by an Indian in 1848. The initiative drew resistance from the orthodoxy, and his father made him leave the paternal home. Undeterred, Phule the social reformer would go on to champion the cause of widow remarriage (1860s), establish an orphanage for illicit children (1863), published the seminal text Ghulamgiri (1873), write on the exploitation of the peasantry, and establish the Satyashodhak Samaj (1873). His activism merged the plight of lower castes with the subordination of women.

In his struggle against the caste system, Jyotiba Phule’s innovation lay in overturning the ideological foundation of what he called Brahmanical order. He sought to transcend the caste-based division to unite the lower castes and untouchables in the category of Sudras-atisudras. To cement his construct of a united oppressed grouping, he inverted the Brahmanical mythology in a brilliant polemic and created a mythology for the subalterns. The then-prevalent notion of Aryan Invasion theory was employed by the Brahmins to talk of an Aryan Golden Age during the Vedic period. Phule’s golden age, in contrast, predated the arrival of Aryans when the original inhabitants ruled the roost. The aborigines offered stiff resistance to the Aryan invaders which is why they were hated and pushed into the lower fold in the Brahmanical social order. Phule equated the Aryan invasion to the western colonisation drive in their destruction of native population:

*“The cruelties which the European settlers practised on the American Indians on their first settlement in the new world, had certainly their parallel in India on the advent of the Aryans and their subjugations of the aborigines.”*

Like a deft sociologist, Jyotiba Phule traced the continued exercise of power by the Brahmins to the system of laws, mythology and caste system that they devised. The counter came in the form of alternate mythology in which the different incarnations of Vishnu represented different phases of Aryan assault. Bali was a just Kshatriya king and brought prosperity for his people. Kshatriyas were the native inhabitants of the land (kshetra) who resisted Aryan onslaught and hence were labelled Shudras after their defeat. Maratha ruler Shivaji was the shudra king in the tradition of Bali who defended the lower castes- Kunbis, Mali, Mahar, etc.

However, it was in the 1880s-90s that the Bahujan unity project of Phule geared towards an exclusive focus on the mobilisation of the Kunbi peasantry. This shift of focus, argues historian Shekhar Bandhopadhyay, led to an assertion of Maratha identity and their Kshatriya-hood. On the flip side, it meant less emphasis on the mobilisation of Dalits. It was, though, not only in the past that Phule sought emancipation. In his search for an emancipatory vision, Phule drew from West as well, and it is here that Indian liberals could stake a claim on him. In 1848, Phule came across Thomas Paine’s “Rights of Man” which was the most widely read pamphlet for reform in Britain in the 1790s. Paine’s ideas were influential in shaping Phule as well. Paine himself belonged to the classical liberal tradition and had provided intellectual support to the American Revolution.

Jyotiba Phule dedicated his pamphlet Ghulamgiri to “the good people of the United States as a token of admiration for their sublime disinterested and self-sacrificing devotion in the cause of Negro slavery”. He also expected his fellow Indians to follow the American abolitionists in their fight for a just and equal order. In Phule, thus, we have an intellectual and activist with a global vision seeking to reform his own society.

*Indian Liberals is an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

*Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

[Read more on the Indian Liberal Tradition](https://spontaneousorder.in/tag/indian-liberal-tradition/)

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## Should Jeff Bezos Just Pay Taxes?

Original: https://www.spontaneousorder.in/p/should-jeff-bezos-just-pay-taxes

Author: Spontaneous Order

Published: 2019-11-27T16:25:25.000Z

Topics: tax-avoidance, government-failure, private-charity, homelessness

> Amazon’s boss Jeff Bezos recently came up in the news for having made charitable donations worth 98.5 million to multiple different organizations, all of which work towards eliminating homelessness. Despite the charitable gesture, there has been widespr

**Summary:**

Jeff Bezos donated $98.5 million to organizations fighting homelessness, yet faced criticism from politicians like Jeremy Corbyn demanding he 'just pay your taxes' after Amazon paid $0 in federal taxes on over $11 billion in 2018 profits. The author counters that such taxes wouldn't solve problems, as US government revenue is projected at $3.6 trillion in 2020, yet homelessness rose from 549,928 in 2016 to 552,830 in 2018 despite over $2 billion annually allocated to the issue, increasing by $100 million yearly. Government incompetence and lack of incentives lead to wasteful spending on walls, tours, and elections rather than solutions. Private charity is more effective, as governments have historically failed with tax funds. Amazon's tax strategies are legal tax avoidance, not evasion, affirmed by Justice Learned Hand: individuals may arrange affairs to minimize taxes without patriotic duty to pay more. The classical-liberal view prioritizes directing resources to effective charities over entrusting them to inefficient government institutions.

**Key points:**

- Amazon legally paid $0 federal taxes on $11B+ 2018 profits through investments and donations, a practice all can and should use to minimize legal tax burdens.
- US homelessness increased despite $2B+ annual federal funding, proving government's incompetence even with trillions in revenue.
- Private charities outperform government spending, which wastes funds on non-solutions like statues and election freebies.
- Taxing billionaires more won't fix problems; better to donate directly to targeted organizations.

**By Sourya Banerjee**

* * *

Amazon’s boss Jeff Bezos recently came up in the news for having made charitable donations worth [98.5 million](https://www.forbes.com/sites/angelauyeung/2019/11/22/the-richest-person-in-the-world-just-gave-985-million-to-help-the-homeless/?utm_source=FACEBOOK&utm_medium=social&utm_term=Valerie%2F&fbclid=IwAR35ShFYkVogTzxpoGFCtqwtzcfSYXNvwkk1DcKMAS-7WoVDTlgdPcZgPV4) to multiple different organizations, all of which work towards eliminating homelessness.

Despite the charitable gesture, there has been widespread condemnation of this move by a lot of politicians, including U.K. Labour party leader Jeremy Corbyn, who has [demanded](https://www.cnbc.com/2019/11/25/uk-leader-corbyn-to-amazon-ceo-jeff-bezos-just-pay-your-taxes.html?fbclid=IwAR3XUTFoT8_5VBDVpjYvhncs4PgXD_5L3t9IyO4Zr-VmzJ2CZMCUT3_tzeU) that Jeff Bezos instead *“just pay your taxes,”* likely a reference to the fact that Amazon paid a total of $0 in federal taxes for 2018 despite reporting profits of more than $11 billion before taxes for that year.

While statements such as the one made by Mr Corbyn have gained a lot of popular support with people claiming how Amazon’s tax liability would be enough to wipe out homelessness in the US, they couldn’t be more wrong.

As per the US federal government, the [guesstimated revenue](https://www.usgovernmentrevenue.com/current_revenue?fbclid=IwAR23Ks5wcIiufKIFZAH2VjrAqv-kmAMFRgOEqW0B8YMV5YF_THpDK1RWiBc) generated in 2020 will be $3.6 trillion. Even if we consider that Amazon makes profits and does not structure its investments or donations and pays its expected tax burden, none of the US’s problems would be solved. That is because the problems present are not because billionaires don’t pay much tax or are structuring their investments in a manner to reduce their tax burden. The problems are present because the institution of Government itself is inherently incompetent and has no incentive to solve such problems.

Think about it, if a Government couldn’t solve some problems with approximately 3 trillion, you think they can do it with 3.1 trillion?  From 2016 to 2018, [as per data](https://endhomelessness.org/homelessness-in-america/homelessness-statistics/state-of-homelessness-report/), homelessness in the US has gone up from 549,928 to 552,830, despite the US Government having [approximately](https://endhomelessness.org/finally-fy-2018-budget-theres-good-news/) 2 billion USD allocated for tackling homelessness in the FY 2017. The allocated Federal budget for tackling homelessness has gone up by 100 million USD each year from FY 2016.

And why would Legislators use the tax money to solve problems when they can build walls, detention centres, and statues, buy legislators, go on World tours, and use the money to win elections again. It is easier for politicians to win elections by utilizing tax money to offer freebies than to actually solve structural problems.

I am not saying that private charity will always, independently, solve all problems, but private charities are always more effective than giving money to the Government and hoping they use it effectively. The Government has never used tax money effectively in history. Hoping they will suddenly do now is betting on the dead horse in the race.

At this juncture, it is also important to reiterate that what Amazon does in terms of tax is not illegal. It does not indulge in tax evasion, but only structures its investments in such a manner that coupled with its charitable donations; that its tax obligation is zero. This is something all of us do at a much smaller scale. In fact, in the words of United States Supreme Court Judge, Justice Learned Hand, *“anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”* (Gregory v. Helvering 69 F.2d 809 – 1935).

At the end of the day, we must decide, whether we really want people to give up their money to a Government which has historically failed to solve problems, or directly donate the money to organizations which work to solve those specific problems.

[Read More: Creating A Citizen-led Market for Welfare](https://spontaneousorder.in/creating-a-citizen-led-market-for-welfare/)

* * *

**About Sourya Banerjee**

Sourya is the Project Associate for CCS Academy in Hyderabad. A BBA-LLB (Hons.) degree holder, Sourya used to practice law in Hyderabad before joining CCS. Sourya has also worked with numerous non-profits social organizations including Red Elephant Foundation, and Red Dot Foundation and also written on law and policy for online platforms such as LiveLaw, The Logical Indian, Qrius etc. An ex- Students for Liberty Hyderabad Local Coordinator, in his free time, Sourya runs a citizen journalism platform called Arguendo.

## SO Musings: For Freedom, Farm and Family

Original: https://www.spontaneousorder.in/p/so-musings-freedom-farm-family-rajaji

Author: Spontaneous Order

Published: 2019-11-22T15:48:34.000Z

Topics: agriculture, land-reform, free-markets, limited-government

> Democracy and self-government mean considerable responsibility for every citizen. Unfortunately, we have come to feel that as long as Mr. Nehru is there, none of us need worry about anything. In the first place because he is a very good man; in the seco..

**Summary:**

The author urges Indians to reclaim independent thinking and responsibility, rejecting dependency on leaders like Nehru amid democratic self-government. He lambasts government megalomania in planning, predicting bankruptcy and beggary from grandiose visions ignoring ground realities. Focusing on the urgent food production deficit, he critiques the Nagpur resolution's push for 'joint' or cooperative farming—reframed as multiple ownership and management—which he argues will spoil production like 'too many cooks spoil the broth,' necessitate a new land-managing bureaucracy, subsidies, and lead to falling output when a rise is desperately needed. Compensation for land acquisition will fuel inflation via printed money or bonds, prioritizing dogmatic equalization over concrete food needs. Government interference destroys agricultural incentives amid uncertainty, while state trading in food grains exaggerates hoarding fears, stifles competition that protects consumers, and displaces frugal traders practicing unconscious socialism. Heavy taxation, like proposed Rs. 2,000 crores or Rs. 43,000 crores schemes, breeds retrenchment and unemployment. Warning of totalitarian attacks on family akin to China, he calls to protect farm and family, building public and parliamentary opposition to discipline government conceit without awaiting elections.

**Key points:**

- Reject Nagpur resolution's multiple ownership and management of land, as it will create bureaucracy, reduce food production, and inflate via compensation payments.
- Oppose state trading in food grains, relying instead on competition among traders to prevent hoarding and ensure consumer protection.
- Limit taxation beyond sustainable levels to avoid retrenchment, inefficiency, and unemployment.
- Build immediate public opposition to protect farms, families, and individual incentives from totalitarian state inroads.

**By Spontaneous Order**

* * *

Democracy and self-government mean considerable responsibility for every citizen. Unfortunately, we have come to feel that as long as Mr. Nehru is there, none of us need worry about anything. In the first place because he is a very good man; in the second place because we cannot do anything. We have lost the habit of thinking independently. Somehow or other and for some reason or other, we have become indolent in the matter of thinking, and that is the greatest difficulty in getting Government to do the right thing when we do not agree with what the Government is doing. But I shall not dwell on this because I do not want to encourage that habit but rather to discourage it. We must get out of this atrophy of thinking if we wish to achieve anything. We must think independently, rightly or wrongly – it does not matter. If everybody began to think freely – and that is the meaning of freedom, ultimately – we shall get something done. But if we get frightened of thinking itself or too lazy to think, handing over all responsibility to the men who brought us freedom, to carry on the administration of the country as they think fit, it is a dangerous situation. Now I wish to tell you something.

Megalomania – strong word – has vitiated our planning. If only our rulers had been more humble than they are, we would not have gone so badly, we would not have gone so wrong. It is the megalomaniac ambition that is at the root of all the inherent errors that are now showing themselves in heavy and distressing measure without giving us time even to wait. Pandit Nehru sees India “standing up on the top of golden hours and human nature is seeming born again.” That is how he sees things. But some of us, standing on the ground, with our feet on the ground, see differently. We see bankruptcy in the horizon. The sorry picture of our country as a chronic beggar before the Western nations. This is not pleasant and we feel distressed. Large dreams are no consolation for immediate calamity. But that is the thing that is keeping the Government of India in their present adventure. I shall not cover very wide ground after these general remarks. I wish to confine myself to the most urgent single problem of the day, viz., the deficit in food production. That is the basic necessity of our teeming millions, and deficit in food production is a very serious matter. Now what is the Government proposing to do about it? Compulsory transfer of land from the larger owners to cultivators who have to begin with debt. That is the main policy of what is called the Nagpur resolution – the switch-over from individual ownership to multiple ownership and multiple management. The word “Joint” is a misleading word. “Joint” has a sweet flavour about it. “Co-operation” has a very sweet flavour about it. We can easily be deceived by the phrases “Joint farming and “Co-operative farming’. It looks very odd that any one should oppose co-operation. Therefore, we should understand what it really is, and why we really object to it. In my phraseology I would call it multiple ownership and multiple management. Now do you think that multiple. ownership will produce good results? Do you think that multiple management will produce good results? It was long ago found that too many cooks spoilt the broth. This is vivid description of multiple management. It is bad enough to spoil a single meal, but it is worse to spoil all food production on that basis. Now that is what I understand to be the public policy now with regard to food production. Do away with individual management and introduce multiple management and multiple ownership. Now that leads necessarily to a new bureaucracy having to be created for the management of land. We have done with one kind of bureaucracy for the management of public offices. We shall hereafter have to deal with bureaucracy which manages the cultivation of land. Because the inherent weakness of multiple management is that they will look to Government to supply an efficient manager, and therefore we shall have a new bureaucracy, subsidies, interest-free loans, and at every crisis looking up to Government for assistance. Now do you think that this will lead to a rise in the production of food? It will, immediately-my telescope tells me – lead to a fall in food production and when we can ill-afford to bear such a fall in food production. In fact, what we want eagerly is a rise in food production, not 40%, not 5O%, – some little rise at least is what we want but instead the present policies, if everything is going to be given effect to, will lead to a considerable fall in food production. But my telescope may be wrong; I may be looking at it from the wrong end possibly. If the Prime Minister thinks that this kind of new management of land – taking over land from those who have it now and handing it over to multiple owners and multiple management through a bureaucracy – will ever lead to a rise in the food production, I think, he will soon be disappointed. The general plans, the plans produced by the Planning Committee-all these have already accentuated the rise in prices all round before starting to give any expected results from the plan. Now the policy of acquisition of land to satisfy the doctrine of multiple ownership will add to the inflation because, unless the intention – I would like you to follow me here with some attention – is to expropriate the present owners, discarding the principles of the Constitution, money will have to be issued by Government to meet the demands for compensation and wherefrom wilI they get that money? The new owners have no money to give. They are indeed selected on that basis. There are people here who know the secrets of money. Money is not you know what we all understand it to be. It is a piece of paper that is printed in Nasik. There will be plenty of money available to give as compensation to all those land owners from whom land is to be taken; or, if people do not like the look of the Nasik paper, they will be given Bonds, Government Bonds. In any case, it will add to the total amount of money in circulation; and the natural result of converting ownership in land into money is to add to the inflation that we already have. I may be wrong, but that is what I think, and if that inflation is to be accompanied by a fall also in food production, you can imagine the result. And what is all this for? The object being a dogma of equalisation of social happiness. Instead oi equalising social happiness we shall have a fall in food production.

Let us talk in concrete terms. Social happiness is a vague affair but food production is a very concrete thing, and when that is reduced you may easily go on thinking further as to whether we can have happiness. We may not have any happiness in a small measure, or in big measure or in equal measure or in unequal measure. The interference of the Government in other matters may be tolerated but if they begin to interfere in agriculture – it is a very sensitive and delicate thing- it will damage the plant at the root. And the industry, as it is even now, is maintained by long tradition and the pressure of poverty in the country. When that is interfered with by the Government for the sake of offering incense to some doctrine or dogma, the situation will be – it is an understatement to say – dangerous. The present owners of land, whether they are small or whether they are big, ask for no subsidy from Government. The good prices that food grains now fetch are acting-as an incentive to agriculture. But now the atmosphere of total uncertainty that the Government policies and the Government adumbrations of policies have created – the total uncertainty that has been created – has destroyed incentive in agriculture to a very great extent. People who are devoting and who are likely to devote much more attention if they are left alone have been rendered hopeless about it, uncertain about it, and they do not propose to take any further interest in agriculture. Is it a good thing? It is one of the most important problems before the country.

Again, take another thing. Can there be anything more foolish (I have already warned you that I will use harsh terms) than the idea that the State should take up trading – State Trading. Of course, the Gujarati proverb puts it very nicely and briefly. But some of you may not understand Gujarati. The proverb is that “when the State takes to trade, the people take to begging”. Now is there any justification for the exaggerated fears that are deliberately propagated about hoarding and cornering? Look at the situation. We have a large body of people, who are eager to compete and to share in the profits of trading in food grains. We have a very large body of people engaged and willing to be engaged in competing with one another in wholesale business and in retail business. Competition is the best security for the consumer. And if the State stops this competition and takes over the business, will there be any freedom for the consumer? Look at the nature of the commodity. The bulky nature of the commodity of food grains should be kept in mind before you talk about hoarding and cornering and things like that. The nature of the commodity is such that it will deteriorate, the rats and the mice will attack it, and the moths will attack it, if it is secreted and kept for a long time. Under these circumstances, if there is free competition among a large class of people who are not well off, who all want to make something out of it, and who are ready to compete with one another in the wholesale business and in the retail business, is there any likelihood of the consumer being cheated? I think the stories of cornering and hoarding have been greatly exaggerated when related to the food grains. In food grains the quality is such that we need not be afraid. Therefore, State Trading in food grains has no justification. Look at the other result. It will put gut of employment those who are now doing the work of distribution on the most frugal terns. Compare the position of any member of the bureaucracy-even the lower division clerk, if you like. How frugally the shop-keepers do their work, how simply they live, and how vigilant and just they are. We should have industries started to accommodate and give work for all these people before you deprive them of their occupation. When these people are dividing the profits of trade in a fair way, they are doing unconscious socialism which you want to introduce by legislation. The profits in the trade are divided among so many people. Why do you stop that division before you create industries to absorb those people. It is not a good thing to put the cart before the horse, and that is what is being done.

Every day we read about astronomical figures of money to be raised in order to relieve unemployment. The other day somebody said that we want only Rs. 43,000 crores in order to relieve unemployment. Now let us not look at Rs. 43,000 crores; let us take only the Rs. 2,000 crores that has been proposed for taxation. When you go beyond a certain measure in taxation it will lead to retrenchment in every business – either closing down or retrenchment. Heavier and heavier taxation will lead to heavier and heavier retrenchment. And what will retrenchment lead to? It will lead to unemployment. It is something like filling up small pits by digging big pits somewhere else. You dig big pits by way of taxation and you try to fill the smaller pits with it. If you have two cooks you will have only one cook thereafter. If you have two clerks you will try to get the work done by one clerk; and that clerk will try to do less work than he was formerly doing. And that is what will be going on-inefficiency and retrenchment side by side.

Taxation is a dangerous thing when it goes beyond a certain measure. It is dangerous because it will lead men to dislike all government and improve deceiving skills.

Dr. Chandrasekhar has contributed a very interesting article which I read in the Neu: York Times in a recent issue. He described how Mao, in China, is waging war against the family in China. The stories about China and other Communist countries did not find much interest for us because they mere different countries having different way of life. But, today, now that the Government of India is going on the same road, what is described to be happening in China will happen – and is bound to happen – here also. So, there will be an attack on the family by and by. That is why Dr. Chandrasekhar’s description frightens some of us. In China, we are told, they are regularly carrying on a campaign – a campaign not in speeches and meetings; you know, the Communist ‘campaign’ is a campaign of getting things done-and they are getting the families dislocated and extinguished by mixing up people for all matters. Now that is why we have to protect the farm and the family.

I conclude with this remark that the time has arrived when we should protect the farm and the family against the inroads of a Totalitarian State.

An opposition based on this policy of farm and family protection is essential now – not necessarily for changing the Government at once. We need not change the Government but opposition will help to keep the Government in proper order. Reference was made to the 1962 elections coming. Don’t wait till then; don’t think about it at all; that is what I would say. We want an opposition in the country – whether it is in the Parliament or whether it is not in the Parliament – we want an opposition first in the country. We want an opposition thereafter in Parliament; and that opposition, starting from the country and going into Parliament, will keep even the present Government in good order. Their confused thinking will begin to settle down into orderly thinking. Otherwise, conceit and arrogance will grow feeding on itself.

*This article first appeared in a booklet published by Forum of Free Enterprise in August 1959. The original document can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=262375897.pdf).*

*[IndianLiberals.in](http://indianliberals.in/) is an online library of all Indian liberal writings, lectures and other materials in English and other Indian regional languages. The material that has been collected so far contains liberal commentary dating from the early 19th century till the present. The portal helps preserve an often unknown but very rich Indian liberal tradition and explain the relevance of the writings in today’s context.*

**[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)**

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## India Must Learn to Uphold Contracts

Original: https://www.spontaneousorder.in/p/india-must-learn-to-uphold-contracts

Author: Spontaneous Order

Published: 2019-11-21T17:00:46.000Z

Topics: contract-enforcement, ease-of-doing-business, investor-trust, government-contracts

> In reviewing the agreements signed by the previous government, the government of Andhra Pradesh has severely undermined already abysmal reputation of upholding contracts. This should be a cause for concern for all of us. Against the warning of the centr..

**Summary:**

The Andhra Pradesh government under YS Jagan Mohan Reddy is renegotiating power purchase agreements (PPAs) signed by the previous administration, claiming they burden state electricity distribution companies, despite central government warnings. From a classical-liberal perspective, this move severely undermines India's already poor reputation for upholding contracts, prioritizing short-term finances over long-term trust. The core issue is investor confidence: no foreign or domestic investor can trust state or central government commitments if PPAs are reneged upon. India ranks 163 out of 190 countries in enforcing contracts per World Bank's Ease of Doing Business, with disputes taking 1445 days and costing over 30% of claim value. Economic fallout is evident—Lulu Group has snubbed further investment in Andhra Pradesh—and mirrors past failures like West Bengal's exit from the Tata Nano project. Such actions deter multinational investments controlling thousands of jobs and millions in dollars, especially amid recession in a developing economy. The author urges Andhra Pradesh to reconsider and honor commitments to safeguard India's investment climate, warning that repeated breaches could lead investors to avoid the country entirely.

**Key points:**

- Andhra Pradesh's renegotiation of prior PPAs erodes trust in government contracts, deterring foreign and domestic investors.
- India ranks 163/190 in contract enforcement, with cases taking 1445 days and over 30% of claim value in costs.
- Companies like Lulu Group have already withdrawn investments from Andhra Pradesh due to unreliability.
- Upholding contracts is essential for India as a developing nation in recession to attract jobs and capital.
- Andhra government should reconsider to prevent national-level damage to investor confidence.

**By Sudhanshu Neema**

* * *

*In reviewing the agreements signed by the previous government, the government of Andhra Pradesh has severely undermined already abysmal reputation of upholding contracts. This should be a cause for concern for all of us.*

Against the warning of the central government, the YS Jagan Mohan Reddy led government of Andhra Pradesh has decided to renegotiate the power purchase agreements signed over the last five years by the previous government. The Reddy administration is claiming that the agreements signed by the previous government burden the state electricity distribution companies with high payment obligations. Even if that allegation is true, it is not in the interest of the state and indeed the country for a government to renegade on its past promises.

The question here is of trust and not of finances of the state electricity distribution companies. The refusal of the Andhra government to uphold contracts will have far-reaching implications. From now on, no foreign investor would be able to trust the commitment of any state government or even the central government. The state government is likely to be questioned by domestic investors as well, who will not be able to trust the government to keep its end of the contract.

In any case, India has a dubious record for upholding contracts. Even in a minor dispute arising out of a simple contract, it takes 1445 days and over 30 per cent value of the claim in legal costs. [On this indicator, India ranks 163 out of 190 countries](https://www.doingbusiness.org/en/data/exploretopics/enforcing-contracts) measured in the Ease of Doing Business by the World Bank.

Apart from losing the reputation in the investor community, not upholding contracts also involves considerable economic costs for the state. Some companies have [already announced that they will not invest in Andhra Pradesh again](https://www.theweek.in/news/biz-tech/2019/11/20/lulu-group-snubs-jagan-govt-invest-andhra-pradesh-again.html). Likely, other domestic and international companies will also look to invest in other places. The future cost would be enormous, as one multi-national alone controls thousands of jobs and millions of dollars in investments.

It would be wise for the Andhra government to reconsider this decision and uphold its previous commitments. The decision of the government have the potential to affect the whole country. Soon, foreign investors might think – why not avoid India altogether? After all, Andhra is not the first state to back out of its contractual obligations; West Bengal also backed out of the Tata Nano project at the last moment causing substantial losses to the Tata group.

As a developing country facing a recession, we need to be seen reliable and investors must be able to trust that a contract signed by a government in India will be honoured.

[Read More: Limitations in our understanding of ease of doing business in India](https://spontaneousorder.in/limitations-in-our-understanding-of-ease-of-doing-business-in-india/)

* * *

**About Sudhanshu Neema**

Sudhanshu is a lawyer and economist working as Manager, Research at the Centre for Civil Society. He served as a Frederic Bastiat Fellow at the Mercatus Center at George Mason University in 2015-16.

## SO Musings: Has Private Enterprise Failed?

Original: https://www.spontaneousorder.in/p/has-private-enterprise-failed-a-d-shroff

Author: Spontaneous Order

Published: 2019-11-15T15:40:37.000Z

Topics: private-enterprise, industrial-development, economic-policy, nationalization

> For some time past, Private Enterprise in India has been continuously under fire. It has been suggested that Private Enterprise is incapable of undertaking large-scale and rapid economic development of the country. It is also suggested that Private Ente..

**Summary:**

The author robustly defends private enterprise in India against charges of failure by ministers like T.T. Krishnamachari, who claimed it lacked initiative, and the Prime Minister, who deemed it incompatible with democracy. Despite colonial-era handicaps like apathetic policies and discriminatory tariffs, private enterprise elevated India to the eighth industrial nation globally, pioneering cotton textiles (from Rs.60 crore imports to major exporter), Tata Steel (largest in British Commonwealth, among cheapest producers), hydroelectric power, and shipping. Post-1947, industrial production rose from 100 (1946 base) to 161.5 (1955), with private sector dominating: 90% of net output increase per World Bank, actual investments hitting Rs.233 crore vs. public sector's Rs.57 crore. New industries like rayon and steel tubes emerged. Yet, government actions—nationalizations (airlines, Imperial Bank, life insurance), licensing red tape under 1951 Industries Act (1142/1440 licenses granted), and nationalization threats—have bred uncertainty, shied capital, and stifled growth. World Bank's Eugene Black urged fewer restrictions on private enterprise. No monopoly or undue power concentration exists; joint-stock firms democratize ownership (e.g., 42,000 Tata Steel shareholders). Author concludes private enterprise thrives under fair regulation, is vital for development, and aligns with democracy—thwarting it endangers both.

**Key points:**

- Private enterprise drove India's pre-independence industrialization, achieving eighth global rank despite colonial obstacles.
- Post-1947 industrial output surged 61.5% by 1955, overwhelmingly from private sector investments exceeding public outlays.
- Government nationalizations and licensing restrictions have created uncertainty, deterring investment more than any private failings.
- World Bank affirms private sector's 90% contribution to output growth and calls for incentives over restrictions.
- Private enterprise is compatible with democracy and essential to sustain it, contrary to official claims.

**By Spontaneous Order**

* * *

For some time past, Private Enterprise in India has been continuously under fire. It has been suggested that Private Enterprise is incapable of undertaking large-scale and rapid economic development of the country. It is also suggested that Private Enterprise only results in the concentration of economic power in the hands of a few people. It is further said that-and it was said only a few days ago by no less a person than the Prime Minister of India in Calcutta-that Private Enterprise and Democracy are incompatible. But the main provocation for the choice of the subject is a speech made by Mr. T. T. Krishnamachari, who was then the Union Minister for Commerce and Industry, at Madurai on 4th of August. In the course of his speech, he observed that “Private Enterprise has failed me”, and that Private Enterprise was not showing either initiative or enterprise.

Before I proceed to examine the validity of the various contentions which have led some people to the conclusion that Private Enterprise has failed in this country, I should mention that of all Ministers of Industries since India attained independence, Mr. T. T. Krishnamachari must be acknowledged as an outstanding success. Some of us may differ from him on some of the views he holds and propagates. But I think there is not the slightest doubt that in the discharge of his very high responsibilities as the Minister for Industries, he has shown remarkable drive, energy and understanding of business problems, and above all a capacity for taking quick decisions. It is, therefore, all the more incomprehensible for me that a man of such fine understanding of business and industrial problems and a man who has first-hand opportunities of witnessing from day to day what was being done in the industrial sphere in the last few years, should have preferred to make this charge against Private Enterprise in this country. To quote a Shakespearean phrase, to me it has come as “the most unkindest cut of all”.

Before I examine the charge, it is very necessary that I should give you a brief historical review of Private Industry in this country, particularly before India attained Independence. If you look back to the history of Private Enterprise for 60 or 70 years before India attained independence, you must take into consideration the circumstances and the environment under which Private Industry had to struggle. For one thing, we were under a regime, which was quite indifferent and apathetic, if not in some cases definitely antagonistic, to any industrial development in the country. If you for instance study the Tariff Policy of those days, the Transport Policy, or the fixation of Railway freight, all these will show you the conditions under which Private Enterprise had to struggle. ‘Even in later years, when the Government came to adopt-and that too very grudgingly-a policy of discriminating protection, that policy was too halting and unsuited to bring about any rapid development of industries in the country. In spite of all these limitations and disabilities, Private Enterprise was subject to in those days, it was surely I through the enterprise and endeavour of Private Enterprise that India was put on the industrial map of the world and attained the eighth place among the industrial nations in the world.

To quote one or two instances; the Cotton Textile Industry (remember only about 40 years ago we used to import every year Rs. 60 crores worth of piece-goods from abroad) has now developed substantially in the last few years when we have become a very important exporter of cotton piece-goods to about 40 to 45 different markets in the world. The very fact that Indian piece-goods should effectively compete with shrewd and established exporters from Lancashire and Japan bears ample testimony to the efficiency with which Textile Industry has been built up in this country.

I would also like to remind you of the days when the late Mr. J. N. Tata first thought of starting the Steel Industry. I do not know if you are aware that a leading British businessman of Calcutta ridiculed the idea as a dream, and he even offered to consume every pound of steel made in India! Fortunately for him, he is not alive today; otherwise he would have suffered not a little from indigestion. But the fact of the matter is that a great pioneering effort succeeded in giving India the largest single individual steel-making unit in the British Commonwealth of Nations, and I believe India will be proud also of the fact that she is today one of the most economical and cheapest producers of steel in the world.

Take for instance also the development of hydroelectric power-entirely undertaken by Private Enterprise-a tremendous venture in those days, a venture not only in the sense of generating power but even of making Bombay millowners believe that power could be generated and supplied to Bombay mills. You know today what it stands for in the economic life of Bombay.

The above two or three instances might show what Private Enterprise, functioning under the limitations and disabilities to which it was subject in those days, could achieve. I may also mention Shipping. Shipping in India against the powerfully entrenched foreign shipping companies almost looked like a dream. It was due to the pioneering effort of the late Shri Narottam Morarji and Shri Walchand Hirachand that Indian Shipping has come to stay and offers today very fine promise of supplying a much-needed complementary transport service to sustain our economy.

Even before we attained Independence, in 1944 seven business men of India got together and put before the people a plan for the economic development of the country. The plan was sufficiently ambitious; it involved an estimated expenditure of Rs. 10,0001 crores over a period of 15 years and out of that it envisaged spending something like Rs. 4,4001 crores on development of Industries. I am mentioning this to show that Private Enterprise in India, even before Independence, was fully conscious of the needs of the country and also had faith in itself that it could undertake development on a very large and extensive scale. After 1947 the Government started taking more active interest in the economic development of the country. Private Enterprise also did not fail to assist in the process of development. The curve of industrial production during the last five years has been continuously rising. If you take 1946 as the base year, i.e., 100, industrial production went up to 117.2 in 1951, 128.9 in 1952, 135.3 in 1953, 146.6 in 1954, and in 1955 it stood at 161.5.

Let me make it clear that the overwhelming proportion of the increased production was contributed by Private Enterprise because the few State Enterprises which came into operation were mainly confined to the Sindri Fertilizer Factory, the Chittaranjan Locomotives, and the Indian Telephone Factory at Bangalore, etc. If you take the aggregate value of the production, contribution by the Public Sector represents a comparatively negligible percentage of the total. But the more interesting thing was this: if you break up the general index of industries and some of the new industries, taking 1946 as the base year representing 100, the increase has been for Old Industries:

[

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This remarkable increase in industrial production during the past five years in which both old and new industries have equally participated and to which the State Enterprise has contributed comparatively very little ought to give a lie direct to the very charge that Private Enterprise has Failed to do its duty in this country. The index figures I have just read do not convey the whole story; besides this, important new industries were started, for instance Rayon. It was started and is prospering well and perhaps in the course of the next 3 to 5 years India will be self-sufficient in regard to requirements of Rayon yarn. Take again the Steel Tubes industry. Though this project was mooted even before the last war, owing to the exigencies of the War it could not be brought into operation. It has since been started and is one of the important industries in the country. Similarly, reference may be made to automobiles and trucks.

These are facts which of course cannot particularly be unknown to the Ministry of Commerce and Industry. They are there to tell their own story. But I would not like to quote anything which comes from private enterprise itself. Here is a statement made by the Planning Commission in a publication which is entitled “Progress of Industrial Development 1956-1961”:

“New investment on industries in the public sector during the First Plan was expected to amount to about Rs. 94 crores. The actual outlay according to the latest estimates has only been about Rs. 57 crores. Investment by the Private Sector on new projects and expansion programmes was expected to about Rs. 233 crores and the latest estimates indicate that the actual investment has been of this order.”

There is a body called the Industrial Finance Corporation of India-one of the few financial institutions which have come into existence after India attained independence. It has just published its 8th Annual Report in which it is stated that the total amount of loans sanctioned has risen from Rs. 9.5 crores in 1951 to Rs. 43.20 crores in 1956, and the number of applications for loans received have doubled from 43 to 86 during the course of the last 2 years. Further, from the office of the Registrar of Jt. Stock Companies, you will find that the number of joint stock companies registered and in actual operation have risen from 22,675 in 1947-48 to 29,779 in 1954-55.

You must be aware that one of the important new pieces of legislation after independence is the Industries (Development and Regulation) Act of 1951. Under this Act, you cannot put up a factory without obtaining a licence. According to the latest figures available, for 3 years up to 1955, out of 1,440 applications made to the Government for licences, 1,142 were granted. Of these, there were 363 licences for new schemes, 657 for expansion schemes and 122 for organisational changes without additional capacity. I have referred to these few facts to confirm that private enterprise is not only alive, but is kicking all right.

Private Enterprise would have shown perhaps a much better and a more impressive record of achievement, if it had not to work under a certain set of circumstances of which you are all so painfully aware for the last few years. I was on a Committee, which was asked by the Reserve Bank to consider the circumstances under which Private Enterprise was functioning and to explore ways and means of helping Private Enterprise particularly in the financial sphere. We had a very good opportunity of studying the situation in different parts of the country, and the unanimity of opinion which was represented to the Committee was that Government’s economic policy in the last few years had created an atmosphere of uncertainty in which naturally incentives are likely to be at a low ebb and that capital had been rendered very shy.

Even if you refer to the First Industrial Policy Statement of April 1948, the threat of nationalisation which was uttered in respect of basic industries has served as a serious disincentive to further industrial effort in the country. Nationalisation of Airlines dealt a very serious blow to confidence and, as a matter of fact, it has created an atmosphere of crisis of confidence which still continues. I am very surprised that the charge of lack of incentive or enterprise should be laid at the door of Private Enterprise when it is too well known that it was only through Private Enterprise that a first-class international air service was built up within a comparatively short period. Nationalisation of Airlines gave a rude shock to confidence amongst the investing public and since then we have found it increasingly difficult in attracting the average investor to subscribe to any fresh industrial enterprise.

Nationalisation of the Imperial Bank and recently Nationalisation of life Insurance have dealt further blows to Private Enterprise and have made capital more and more shy. I have been trying to look up the new Industrial issues during the last 8-9 months, and I have not come across, perhaps with the exception of one or two, any public issues for new industrial enterprise which has been supported by the investing public. The Industrial Policy statement of this year has certainly created further apprehensions not only in the minds of business men but of the investing public in general. The tragedy of the situation is this-that with a few exceptions, Indian business men and Indian public in general have not shown any due apprec6ation of the implications of this policy. Even a man like Sir John Strachey, who visited India some months ago, in his report has pointed out, although he is a man who has a definite Leftist bias, he was really surprised that when the Industrial Policy Statement was issued some Indian business men definitely welcomed it, while, most of them in general showed apathy or indifference about it.

I will now come to the second criticism, viz., that “Private Enterprise results in concentration of economic power”. In this connection, I have particularly to ask members of the Commerce Graduates’ Association to read an article which recently appeared in the Tata Quarterly of April-July which deals in detail with some structural aspects of industry in India. The article in a very objective manner examines the problem whether in view of the fact that particularly in the last few years when demand has been outstripping the supply position generally in the country there has not been a trend towards the establishment of a sort of monopoly by Indian Industrialists. If you study that article, you will agree with the writer of the article that applying any test, which is usually applied to the scrutiny of the establishment of a monopoly in any branch of economic activity, you will come to the conclusion that no such thing has happened in India.

The establishment of a monopoly for one thing suggests that those who are interested in the manufacture of particular products or commodities get together and manipulate the prices of these products or arrange production in such a manner that prices can be whipped up to the detriment of the community in general. An examination of the working of a number of leading industrial units in India, relating the price trends to the growing demand for the products, will lead to the objective conclusion that there is no basis of even an attempt to establish monopoly in #any of these industries in India. But when critics talk of concentration of economic power, they do not so much mean the establishment of monopoly, but what they really mean is that there are only a few industrial firms which are interested in a large number of industries, and, therefore, exercise control over them. In the first place, I need hardly point out that this betrays a lack of understanding of the basis of Joint Stock Enterprise. The basis of Joint Stock Enterprise is this: however big, influential and wealthy a firm may be, the magnitude of modern industrial operations is of such a character that no single firm can get together all the monetary resources to make any such enterprise possible. For instance, in one of our leading companies, the Tata Iron and Steel Company, there are about as many as 42,000 shareholders. It is true that the creditworthiness of some of the firms in India, their past record of achievement, enabled them to mobilise the savings of hundreds and thousands of small investors which alone make industrial enterprise in the modern sense possible.

Legislation was recently undertaken in the shape of amendment to the Indian Companies’ Act which goes far enough to break any such concentration if it exists in the country. But conceding for a moment, the concentration of economic power in the hands of a few people, it is forgotten that in an underdeveloped country like India you cannot expect hundreds and thousands of people who could be promoters of industries. If one studies the economic history of a country like Japan, for instance, or even of Germany, it is the pooling of resources and the working together of two or three big firms which made possible the industrial progress achieved in these countries.

There is one other important reason which might explain why industrial development in the last few years could not be quicker than what it has been. We who work in the private sector are believers in planned development. Planned development does assume some sort of regulation. But such regulation should not become restrictive as it has been in India. Take for instance, the Industries Development and Control Act and the licensing scheme which it has put up. Even if you think of starting an industry on your own, unless you satisfy certain norms which have been established by the Planning Commission, you are not likely to get permission to go into that industry. There are also certain administrative procedures and my Committee was particularly shown definite instances of administrative procedures where so much of red tape was involved that a number of industrial proposals which were put up in Madras and Bangalore had to be abandoned since the promoters got simply tired of travelling from Bangalore and Madras to New Delhi and back. It is not out of place to point out to the Government that in the interest of the industrial development of the country, some of these administrative procedures will have to be considerably simplified.

Another subject of topical interest is the publication of a letter addressed by Mr. Eugene Black, Chairman of the World Bank, to our Finance Minister, Mr. T. T. Krishnamachari. The genesis of the letter is this: a few months ago, the World Bank sent out a mission-the World Bank has the practice of sending out missions to different countries getting loans from the Bank to make periodical surveys of economic conditions in those countries. The mission, after surveying the situation and after having very intimate talks with Government officials, Planning Commission and Ministers, submitted their report to the World Bank. In that Report, within the short space of about 18 paragraphs, the mission has highlighted the main elements of our economic situation. In one paragraph the mission writes thus:

“The importance of private enterprise in the continuing economic development of the country is another factor which we would like to stress. We appreciate that the Second Five Bear Plan offers an opportunity for the ‘co-existence’ and simultaneous expansion of both the public and private sector and we have noted with gratification that the Prime Minister and other responsible Ministers have emphasised the need for Private Enterprise. Nevertheless, we believe that the importance of private business has not yet been sufficiently recognised and publicized. The record bears out the fact that private enterprise has performed creditably during the last five years with respect to both investment and production. In the organised sector of manufacturing and mining private business has contributed 90% of the increase in net output during this period. Owing to the capital-intensive nature of much of the contemplated public investment in Industry and mining during the Second Plan, Government plants and mines are expected to contribute only 29% of the anticipated increase in net output of mining and manufacturing as compared with a 54% share in the total planned investment. On the other hand, private business in this sec- tor is expected to account for 71% of the rise in net output. Considering the probability that the villages and small-scale industries may fall considerably short of the targets set for them by the Plan, the importance of the organised private sector becomes even more evident. It is, therefore, vital that the private sector be given adequate incentives and resources to enable it to make its requisite contribution.”

On the basis of this report, Mr. Eugene Black addressed a letter to our Finance Minister, Mr. T. T. Krishnamachari. In the course of that letter Mr. Black has said:

“In making my own comments, I should like first to emphasise once again my conviction that India’s interests lie in giving private enterprise, both Indian and foreign, every encouragement to make its maximum contribution to the development of economy, particularly in the industrial field. While I recognise that the Government itself must play an important role in India’s economic development, I have the distinct impression that potentialities of private enterprise are commonly under-estimated in India and that its operations are subjected to unnecessary restrictions there.”

This letter has created a little flutter in certain dovecots. I do not know on how many occasions we have been told by the highest in the country that distinguished foreigners who are visiting India have been terribly impressed with the progress that this country is making. This is perhaps the first occasion when a friendly critic has dealt with a few things in a very outspoken fashion. I can personally vouch for one thing-that Mr. Eugene Black is a real and sincere friend of India. I have reasons to tell you that he earnestly desires that India should develop economically at a rapid pace. But Mr. Eugene Black also is a man who by his extensive knowledge of conditions in different parts of the world is convinced that there are certain well-proved and well-tried methods of economic development which have resulted in substantial progress in many countries of the world and there is no reason that one could see of a hasty departure from these proved and well-tried methods. It is after a very close study of conditions in India as reported to him by the mission, and also because of the great personal interest he takes in watching the progress that India is making, that he has expressed views and tendered some advice which one could expect will be taken in the same spirit in which it was offered. I must say that the reply given by the Finance Minister is a very courteous, dignified and understanding reply. On the other hand, the criticism that we hear from other quarters appears to be rather unwarranted. It appears to be based again on the same thing to which Mr. Black refers–doctrinaire and ideological approach to the problems. There are certain people highly placed in this country who simply refuse to come down to earth and face problems in a realistic manner. I would like to pay my personal tribute to Mr. Black for the service he has rendered to India particularly at this critical juncture when we want a little more realism in the formulation and implementation of our economic policy. I am not referring to other parts of Mr. Black’s letter or to other suggestions which have been made by the World Bank Mission.

I am glad that the views held by some of us are being fully confirmed by the conclusions given by the World Bank Mission in its report in a matter like the Textile Policy. The textile problem is a very simple problem provided it is approached in a realistic way. Money worth crores is being pumped into circulation. How many people, who had no employment before, or who had no adequate employment, have started earning! In a poor and underdeveloped country like India, the two essential things to be provided are – food and clothing. The demand for food and cloth is on the increase and if our economy is to be sustained on a largely independent basis, it will be the first and primary responsibility of Government to see that demand does not outstrip supply. It is a very simple problem, and instead of tackling the problem in a realistic way, ideological and doctrinaire approach is brought to bear on the solution of the problem, with the result that there is nothing else but tinkering with the problem. Merely putting additional excise duties or advertising what are considered as fair prices will not result in producing additional cloth which is being needed every day by the country.

There is, however, one very interesting statement made by Mr. T. T. Krishnamachari in his reply to Mr. Black’s letter. Mr. Black refers to State Enterprises and Private Enterprises, and Mr. T. T. Krishnamachari of course thinks differently on the relative importance of the two sectors. He makes a bold statement that although the experience of State Enterprise has not been very long, at least in some cases State Enterprise has been found to be more efficient than Private Enterprise.

In the course of my activities in the Forum of Free Enterprise, I have had to answer questions in different places. In Calcutta I was pointedly asked whether I had any opinion to express on the working of State Enterprises. In any case, it would be fair to State Enterprise to say that the experience has been so short that it is premature to express any definite opinion. However, since Mr. T. T. Krishnamachari has found it fit to make up his mind that State Enterprise had been in some cases more efficient than Private Enterprise, I can only suggest to him that he should ask for some impartial assessment of the problem. We, in Private Enterprise, are very willing to learn. The more we learn and the more we improve; it is better for us and the country. Therefore, if Mr. T. T. Krishnamachari would call for an impartial assessment of the working of State Enterprise, Private Enterprise will have a lot to learn.

Finally, I will examine if Private Enterprise and Democracy are incompatible. Coming as it does from the highest in the land, it does need very close consideration and examination. I would, however, like to state that there are a number of thinking people in India who not only do not agree with the view but on the contrary honestly believe that if Free Enterprise is not allowed to continue in this country, subject of course to our accepting planned development of the country and the necessary regulations involved, and if Free Enterprise is going to be thwarted and restricted in its operations, it can only result in a serious diminution of the democratic way of life if not its ultimate destruction. I for one have been thinking for some time past and trying to understand if this statement could be correct-that Private Enterprise and Democracy are incompatible. Either I do not understand the content of democracy or I cannot understand the meaning of the statement “Private Enterprise and Democracy are incompatible.” As a matter of fact, we, particularly in the Forum of Free Enterprise, find our view confirmed by thousands of people in the country that Democracy, which is a blessing we enjoy and the Democratic way of life which has been assured to us in our constitution, is likely to suffer very severely if Free Enterprise is not allowed to be practised in this country.

*Access the original document **[here](http://indianliberals.in/~_admin/pdflanguage?id=433650991.pdf)**.*

*First Published by the Forum of Free Enterprise in November 1956.*

*Other editions of the publication can be accessed at **[Indian Liberals](http://indianliberals.in/index)**, an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

**[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)**

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Piloo Mody: Swatantra’s Witty Parliamentarian

Original: https://www.spontaneousorder.in/p/piloo-mody

Author: Spontaneous Order

Published: 2019-11-14T16:29:32.000Z

Topics: swatantra-party, indian-liberals, emergency-1975, decentralization

> “I am a CIA Agent,” read the placard on a politician in the premises of the Indian Parliament on one fine day in the 1970s. The pronouncement was a jibe at Indira Gandhi’s cynical approach towards her opponents. She would dub politicians the agents

**Summary:**

Piloo Mody, a witty Swatantra Party parliamentarian and architect son of entrepreneur Homi Mody, used placard humor—like declaring himself a 'CIA Agent'—to counter Indira Gandhi's demagoguery labeling liberals as US imperialists obstructing her socialist agenda. A vocal opponent during her rule, Mody was among the first arrested under the Maintenance of Internal Security Act during the 1975 Emergency, rejecting multiple conditional release offers despite personal friendship with Gandhi, and later advocated repealing the draconian law. In his book *Democracy Means Bread and Freedom*, written in jail, Mody argued for a limited state role and decentralization to deepen Indian democracy, critiquing prevailing socialism. Swatantra's decline after Rajaji's death and 1971 election loss stemmed from poor organization under Minoo Masani, lack of cadre, and over-reliance on star leaders, prompting Mody to merge it with Charan Singh’s Bhartiya Kranti Dal in 1974. Joining Janata Party afterward, he planned Nav Nirman, a decentralized movement of citizen activists, but died before its launch. The post laments the scarcity of material on Mody's classical-liberal legacy amid socialist dominance.

**Key points:**

- Piloo Mody blunted Indira Gandhi's jingoism with humorous placards accusing Swatantra of CIA ties while advocating markets and liberalism.
- Mody rejected conditional release during 1975 Emergency imprisonment and pushed to repeal MISA.
- In *Democracy Means Bread and Freedom*, Mody championed limited government and decentralization for robust democracy.
- Swatantra declined due to organizational weaknesses and lack of cadre, leading Mody to merge it with Bhartiya Kranti Dal in 1974.
- Mody envisioned Nav Nirman as a grassroots activist movement but died before implementation.

**By Sanjeet Kashyap**

* * *

“[I am a CIA Agent](https://www.outlookindia.com/magazine/story/no-aliens-under-our-beds/238178/),” read the placard on a politician in the premises of the Indian Parliament on one fine day in the 1970s. The pronouncement was a jibe at Indira Gandhi’s cynical approach towards her opponents. She would dub politicians the agents of US imperialism who sought to curtail her pro-people agenda. At the receiving end of her populist demagoguery were often the members of the Swatantra Party. And understandably so, because their eloquent advocacy of markets and liberalism had created consternation for the failed socialist government. The witty politician in the act was Piloo Mody. With a recourse to placard humour, he blunted the jingoistic politics of Indira Gandhi.

An architect by training and the son of venerable Parsi entrepreneur Homi Mody, Piloo also had a long political career as a parliamentarian. However, there is a clear lack of published material on his ideas and legacy. Much of the press coverage reveals his good sense of humour which added joy to the parliamentary sessions. He was also a vocal oppositional voice during Indira Gandhi’s rule. After the imposition of [Emergency](https://timesofindia.indiatimes.com/city/mumbai/Politicians-wife-recalls-Emergency-times/articleshow/50701366.cms/) in 1975, he was one of the first politicians to be put behind bars under the provisions of the Maintenance of Internal Security Act. A close friend of Indira Gandhi though, Piloo Mody was offered conditional release which he rejected multiple times. Later in parliament, he vocally supported the bid to repeal the draconian act.

Author and parliamentarian [Swapan Dasgupta](https://www.dailypioneer.com/2015/columnists/revisiting-unsung-heroes-who-defied-emergency.html/) recalls that Piloo Mody would visit the prestigious St Stephen’s College to address the student community. His witty take against the prevailing socialist narrative would draw a standing crowd. For such an unusual politician by Indian standards, it is rather tragic that Mody didn’t dabble much in writing. During the jail stint, he worked on the book titled *Democracy Means Bread and Freedom*. Called a [liberal polemic](https://www.indiatoday.in/magazine/society-the-arts/books/story/19790831-book-review-democracy-means-bread-and-freedom-by-piloo-mody-822609-2014-02-27#ssologin=1#source=magazine/) by one reviewer, the book was his attempt to describe the meaning of democracy. Piloo Mody argued for a limited role of the state in the book to strengthen democracy. For him, decentralisation was the way for deepening of Indian democracy.

While he began his political career with Swatantra, the death of Rajaji and subsequent defeat of the party in 1971 led to an existential crisis. Minoo Masani put in his resignation papers accepting the responsibility for the defeat. In the last general meeting of the party in 1974, Piloo Mody decided to [merge](https://swarajyamag.com/politics/the-rise-and-fall-of-the-swatantra-party/) the party with Charan Singh’s Bhartiya Kranti Dal. The decision came under fire from the liberal intelligentsia for understandable reasons. However, as [S V Raju](https://swarajyamag.com/politics/the-rise-and-fall-of-the-swatantra-party/) admitted, the party was already in terminal decline. Raju traced the [decline of Swatantra](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf/) to Masani’s tenure as the president. He was a more efficient organiser-ideologue than the leader. The vacuum created at the organisational level and his lack of popular appeal probably caused damage to the party’s prospects in elections.

I would also argue that the lack of a strong cadre added to the decline as the star leaders either passed away or left the outfit. Swatantra was able to attract people based on leadership and agenda. It was unable to create a loyal vote base though because it lacked organisational setup. Mody later went on to join the Janata Party and served as a parliamentarian till death. In one of his last interviews, he described his plan to create a [new political party](https://www.indiatoday.in/magazine/indiascope/story/19830228-the-world-revolves-around-an-idea-piloo-mody-771282-2013-08-23#ssologin=1#source=magazine/). Nav Nirman was intended to be a political movement of honest and dedicated individuals who would take out hours from their schedule to serve the citizens at the booth level in a constituency. His utopian vision of decentralised political activism though didn’t come to fruition. The project was left midway due to his death.

[Read more on the Indian Liberal Tradition](https://spontaneousorder.in/tag/indian-liberal-tradition/)

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## SO Musings: Karl Marx, India and World Communism

Original: https://www.spontaneousorder.in/p/so-musings-karl-marx-india-and-world-communism

Author: Spontaneous Order

Published: 2019-11-08T12:26:47.000Z

Topics: karl-marx, anti-communism, totalitarianism, economic-freedom

> Even today there are too many good citizens in all lands who think of Communism in terms of a humanitarian ethical movement for propagating of social justice and for quickening social conscience. But they forget that the Communist Party is primarily a c..

**Summary:**

The post warns that Communism is not a humanitarian movement for social justice but a conspiracy to seize power as a one-party totalitarian dictatorship, extinguishing democratic rights, with primary allegiance to international Communism (Moscow or Peking) rather than the nation, rooted in Karl Marx's theory and practice. Many well-meaning citizens, including in Britain and India, naively view it as a democratic party advocating redistribution, ignoring its sinister aims. Marx was ambiguous on violence but endorsed it for revolution when necessary, as detailed by Karl Popper in 'The Open Society and Its Enemies'; he was amoral regarding force, influencing Lenin's and Stalin's terrors, including the liquidation of eight million peasants. Socialist Britain's 1945-1950 nationalizations of key industries led to inflation, low production, capital flight, and lagging growth behind Italy and Germany, contrasting West Germany's free-market success under Erhard. Marxism's economic determinism fosters relativism, denying objective truth, while its class-war internationalism drives world conquest ambitions, as in Khrushchev's statements. The Indian Libertarian and allies have long alerted India to the Communist Party of India's camouflaged role as an agent of Soviet powers, urging recognition of these threats to preserve free society, dispersed power, and national independence.

**Key points:**

- Communism prioritizes one-party dictatorship and international allegiance over national loyalty and democratic rights.
- Marx endorsed violence as necessary for revolution and sustaining socialism, enabling Stalin's atrocities like liquidating eight million peasants.
- Socialist policies in Britain caused economic failures including inflation and capital flight, unlike West Germany's free-market prosperity.
- Marxism's class-war internationalism fuels ambitions for global conquest through proletarian uprisings abroad.
- India must reject the Communist Party of India's patriotic camouflage as it serves Soviet Russia and China.

**By Spontaneous Order**

* * *

*Even today there are too many good citizens in all lands who think of Communism in terms of a humanitarian ethical movement for propagating of social justice and for quickening social conscience. But they forget that the Communist Party is primarily a conspiracy to win political power exclusively for itself as a one-party dictatorship extinguishing all democratic rights, the moment power is won and that it owes primary allegiance to international Communism rather than to its own nation and country. This attitude of the Communists is rooted in the theory and practice of Karl Marx himself.*

It is already rather late in the day to warn the country about the danger of communism to its independence and everything it values as a free nation. **The Indian Libertarian** and its supporting institutions like **The R. L. Foundation** and **The Libertarian Publishers** have each in its own way been warning the country of the danger of international communism not only as a propagandist organisation of unparalleled skill and equipment and funds but also as the medium of the foreign policy of Soviet Russia, Soviet China and other Soviet countries in the communist bloc. It is a Power Institution no less than an ideological machine.

But even today there are too many good citizens in all lands including Western countries like Britain who think of communism in terms of a **humanitarian** ethical movement for propagating notions of social justice and for quickening the social conscience. And in addition, they think of it on the analogy of democratic parties out to win power through honest propaganda for well-thought-out policies of redistributive justice and economic re-organisation with a view to obtain a better deal for the under-dog. Most fellow travellers are quite innocent of the sinister implications of joining in the communist movement. They are not aware that more than being a simple democratic party, it is primarily a **conspiracy** to win political power exclusively for itself as a one-party totalitarian dictatorship extinguishing democratic rights the moment power is won!

Also, many good people are not aware that the communist party in their midst owes its primary allegiance to international communism bypassing loyalty to their own nation and country. They are pledged to obey the dictates of Moscow rather than those of Delhi in India. The only hesitation in the minds of some Indian communists concerns the relative importance of Moscow and Peking in their Authority over them!

This attitude of communists is rooted in the theory and practice of Karl Marx himself.

It appears that there are some socialists (strange as it may seem to students of the subject acquainted with the fundamental texts of Marx, Lenin, Stalin and the Resolutions of the World Congresses of all Communist Parties led by the Russian Communist Party) who hold that Karl Marx is innocent of all responsibility for the doings of the Russian Revolutionists–Lenin and Stalin and the system they established and are carrying on-(today by Khrushchev.)

A letter appearing in The Indian Libertarian of 1st June 1963 over the signature of Mrs Goodman, secretary, Overseas Contacts, The Socialist Standard, London, asserts that the Socialist Party of Great Britain has taken up this position exonerating Marx of all taint of responsibility by doctrine and precept and example for the system established in Russia in 1917 and its operation ever since!

It must be conceded that England was led more by evolutionary communism or socialism than by the revolutionary variety which was more prominent in the thought and precept of Karl Marx. British socialists were primarily Fabian socialists who relieved in gradual, educative methods for introducing socialism through the ballot box. Marx himself admitted once that perhaps in Britain and the United States (as also in Holland), peaceful democratic methods of persuasion might succeed in realising socialism – namely, the liquidation of the capitalist class.

But he also held more likely than not, the bourgeoisie will sooner resort to arms to preserve their privileges than surrender them even to the ballot box verdict!

Marx was always ambiguous about violence but he made no bones about it. He was not squeamish about its use when necessary for the sake of the revolution.

Dr. Karl Popper in his substantial two-volume work **The Open Society and Its Enemies** has expounded the turns and twists of Marx’s teaching on all these points in great detail which leaves no excuse for any innocence or ignorance on the part of fellow travellers to remain blind to the dangers of the Marxist revolutionary ideas.

Now, even Mr. Attlee’s Government (socialist in character) proceeded to nationalise a good part of the economy-the commanding heights of the economy as they were called-i.e. road transport, railways, communications by air steel, the Bank of England and a number of other institutions. This policy curtailed personal freedoms to invest capital in accordance with one’s own judgment.

The result was a marked degree of inflation, high prices, a decrease in production, a flight of capital from the land to foreign parts, lack of investment in capital goods in sufficient degree and so on. The result is that today the rate of England’s production is lesser than Italy’s and Germany’s!

As a contrast, the experiment in free competition conducted boldly in West Germany by Dr Erhard has registered a remarkable success and has taken that country to the first place among European countries in resurgent economic development and prosperity.

Socialist Britain adopted Marxist economics to a significant extent and suffered markedly therefrom.

Socialist Russia adopted the same Marxist economy to a fuller extent but any success by way of higher rates of production there is vitiated by unprecedented repression and regimentation, force and intimidation. The difference is one of comparative freedom but the failure of economy stems from the same policy, namely, Marxist centralisation of economy and its identification with political power.

Marx was a-moral. with regard to violence both as a means to achieve revolution and to maintain socialism after it was achieved. Hence Lenin and Stalin were only carrying out the letter and spirit of the Master’s Word in applying force in day-to-day administration-the reign of terror.

The revelations of Khrushchev in 1956 in the Twentieth Congress of Communist Parties of the world in Moscow that shook the communist bloc and shocked the whole world concerned only the brutalities of Stalin with regard to his own official and party subordinates. They did not show any concern on the part of Khrushchev and his friends for the Russian citizen as such-the unknown man, the ordinary communist citizen and his dignity, his rights of person and property; what the free world is accustomed to think of as fundamental rights.

If Khrushchev is less terroristic than Stalin, it is only because he does not dare to! His power is not so secure and well-established as Stalin’s was!

Stalin’s violence in liquidating millions (for example eight million of peasants to make cooperative and state farming secure!) is thus only a matter of degree! It does not transcend Marx’s principles.

If British democracy behaves differently with greater regard to the sacredness of the human personality, it is more due to the 800 years of British history in which the Britisher and his race have fought his ruling groups to establish his rights as a free man. The British do not owe them to Marx or any socialist of them all.

The British socialist experiment during 1945-50 has already produced a reaction and second thoughts even among socialists. The New Fabian Socialist Essays edited by Crossman (a prominent British Labour Party ideologist M.P.) speaks of the new despotism, of the encroachments of the vast bureaucracy that had proliferated during Labour socialist rule. This is the thin end of the wedge which might make room for liberty to leak away in course of time! Socialism has a built-in tendency to damage democracy since it concentrates both political and economic power in the hands of Government-that is, the same party and ruling group! The dispersion of power among different semi-independent or totally independent groups, economic, legal, political, religious, educational, cultural etc. that is such a healthy feature of a free society will vanish in a society ruled by socialism which will become severely monolithic in power and affiliation.

Another angle of vision popularised by Marx which is also dangerous to independence of judgement and character is his economic determination of culture or class derivation of truth. In this view of the super-structure of culture as determined by the economic foundation which in turn is determined by the pattern of property ownership in production (relations of production), Marx abandons his rationalist spirit and method and becomes a relativist in his view of truth and science, philosophy and culture. So, truth will differ from class to class! That is to say, there is no such thing as objective, universal and necessary truth!

If so, there is nothing to choose between Fascism and Communism, Marx and Hitler! Why blame the bourgeoisie if they take to arms to crush the communist gangs? Marx himself gives up the quest for objective truth when he declares that the main thing is to change history–not understand it.

Another tenet of Marx was internationalism. He believed in the internationalism of the proletariat and repudiated nationalism.

But there can be different varieties of world communism. One variety will recognise the nation as a social unit entitled to run its social affairs under a government of its own democratically chosen and democratically conducted.

Such democratically-conducted national governments of particular national societies small or large can co-operate to establish a world federation with a minimum of Police Powers under a World Court interpreting a World Law confined to international relations. This would leave internal affairs to local autonomy.

The present United Nations Organisation would be mended in this direction or ended and a new One erected in its place. Meanwhile nations would proceed by collective security, all nations entering into a pact to rush to the defence of any one of their number who may be attacked by any one.

But Marx’s internationalism is erected on the abolition of existing national structures and the antagonising of all upper and middle classes not educated, leading classes in all countries. It is based on class war which is a totally unnecessary and false doctrine motived more by universal hatred engendered by racial memory of the oppression of the Jews by Gentiles (Marx coming of Jewish ancestry).

Being founded on class war, any State founded on Marxism is bound to set itself in opposition, bitter and all-out, against all other nations. This is what we find in Soviet Russia and the communist States adopting her ideology like China.

They cannot therefore feel safe until they conquer the whole world! The difference between different communist states is only about the pace and method and timing of war strategy against the rest of the world. Consider the statement by Khrushchev – “It would be impossible for us to declare war on capitalist countries–to defeat capitalist countries in such a way. Let the working class of capitalist countries rise against their oppressors. Our sympathies are on the side of the working class. We can help.

We have the means to do so. But we will never interfere in the internal affairs of other States. That means war and we are against war.”–Khrushchev in a recent declaration.

This is pure Marxism, world revolution through class war and assistance to the working class of other States by the revolutionary proletarian State tv overthrow their own upper class. This is the foreign policy of Soviet Russia and world Communism.

If British Socialists hold to Marx, as Mrs Goodman so believes they do, then they should tell Indians where they stand in this international class war! What is the brand of their internationalism?

The Communist Party of India is camouflaging its true position as an agent of world communism and of Soviet Powers, Russia and China. It is getting respectability by being recognised as a patriotic party and entrusted with negotiating with Communist States! **This is the limit.**

*Access the original document **[here](http://indianliberals.in/~_admin/pdflanguage?id=2010727437.pdf)**.*

*First Published by the Indian Libertarian in August 1963.*

*Other editions of the publication can be accessed at **[Indian Liberals](http://indianliberals.in/index)**, an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

**[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)**

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Modi’s Historic Blunder in Rejecting RCEP

Original: https://www.spontaneousorder.in/p/rcep-blunder

Author: Spontaneous Order

Published: 2019-11-08T11:10:45.000Z

Topics: free-trade, rcep, economic-liberalization, protectionism

> On November 4, at the ASEAN’s Summit in Bangkok, Prime Minister Narendra Modi announced that India is leaving the Regional Comprehensive Economic Partnership (RCEP) after years of negotiations. Of all the bad decisions of the government, this one will h

**Summary:**

Prime Minister Narendra Modi's announcement on November 4, 2019, at the ASEAN Summit in Bangkok, rejecting the Regional Comprehensive Economic Partnership (RCEP)—the world's largest trading bloc comprising 10 ASEAN nations, Japan, South Korea, China, Australia, and New Zealand—represents a historic blunder that will inflict long-term harm on India. From a classical-liberal perspective, this decision mirrors the unfounded protectionist fears preceding the 1991 liberalization, which unleashed prosperity despite initial industry losses, as evidenced by Bajaj's evolution from sheltered low-quality scooters to a major exporter. Exclusion from RCEP and the CPTPP leaves India sidelined from 21st-century trade dynamics, stalling ambitions to become a global manufacturing hub, depriving 1.3 billion consumers of cheaper goods, greater choices, and better technologies, and signaling to investors that India is closed for business in favor of competitors like Vietnam or Cambodia. While acknowledging the need for complementary reforms in land, labor, and business regulations, the author argues RCEP would have compelled incremental liberalization over two decades, countering pressure from selfish industrialists who benefit from sheltering, much like pre-1991 cronies. The government's distrust in Indian businesses' competitiveness perpetuates a new License Raj, forgoing vast trade gains for temporary protections.

**Key points:**

- India's rejection of RCEP excludes it from the world's largest trading bloc, halting manufacturing dreams and consumer benefits.
- Protectionist fears echo pre-1991 era, where liberalization proved fears unfounded and spurred growth like Bajaj's export success.
- RCEP would have forced incremental reforms in land, labor, and business amid political resistance.
- Government prioritizes industrialist cronies over 1.3 billion Indians' access to cheaper goods and technologies.
- Non-participation signals to global investors that India favors protectionism over open trade.

**By Sudhanshu Neema**

* * *

On November 4, at the ASEAN’s Summit in Bangkok, Prime Minister Narendra Modi announced that [India is leaving](https://www.livemint.com/news/india/india-rejects-mega-trade-pact-with-china-and-asean-members-11572889752474.html) the Regional Comprehensive Economic Partnership (RCEP) after years of negotiations. Of all the bad decisions of the government, this one will hurt India the most in the long-run. In joining the RCEP, India, along with 10 ASEAN nations and Japan, South Korea, China, Australia, and New Zealand would have been part of the biggest trading bloc in the world and would have witnessed unimagined prosperity.

India is out of both RCEP and the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership; the two agreements that will define the future of international trade in the 21st century. Ordinary Indians will suffer drastically from this blunder of the Modi Administration, just like we suffered under the License, Permit, Quota Raj pre-1990s. Not joining the RCEP will put India’s dreams of becoming a global manufacturing hub on hold. It will also harm the Indian consumers by limiting their choices.

The rejection of the RCEP came from the same unfounded fears we had before India liberalised in the early 1990s. Yes, some industrialists would suffer losses from foreign competition, some tradesmen will lose jobs, etc. However, as we all know, the gains from international trade are much higher than the temporary losses India will have to suffer. The same fears were raised before the reforms in 1991, and history has proved all the fears unfounded. Without trading with other nations, we would still have been stuck driving in Ambassador cars and riding Bajaj Chetak.

Our leaders must understand that trade benefits us all. Think of your day to day life, how bad it would be if we cannot trade? Imagine not being able to buy groceries without paying a tariff, or having a quota on how many clothes you can own. That is what India is choosing. We have told the world that India is not open for business, anyone wanting to open a new manufacturing facility should go to China or perhaps Vietnam or Cambodia.

The government claims that it wants the ease of doing business, but we are unable to trust that our businessmen are capable enough to face foreign competition. And in doing so, we are depriving 1.3 billion Indians of the benefits that could accrue from cheaper goods and access to better technologies. Without RCEP, we will have to forgo thousands of verities of goods or fly to Singapore or Thailand when we want high-quality merchandises.

I am not suggesting that RCEP in itself would solve all our problems. It will require a lot more reforms in land, labour, and business regulations. RCEP would have provided the push needed for carrying out these reforms, but Modi has clearly shown that he is not interested in standing up to the domestic pressure groups who are ready to deprive benefits to 1.3 billion Indians for their selfish gains.

The Indian industrialists will always be against opening up the economy because they know they will lose in competition. Even in 1991, Bajaj wanted the Indian economy to remain sheltered from foreign competition so it could keep selling us its low-quality scooters. Now, the same company exports so many rickshaws to Africa that they are called Bajaj. In the current political climate, reforms like that of 1991 are not possible. But India could have benefited from incremental reforms which RCEP would have compelled it to take over the next two decades. The 15 other members graciously allowed many concessions to India, unfortunately, the government still chose to lose a historic opportunity, and save its cronies from foreign competition.

[Read More: In India-China Battle, Trade Matters, Deficits Don’t](https://spontaneousorder.in/in-india-china-battle-trade-deficits-dont-matter/)

* * *

**About Sudhanshu Neema**

Sudhanshu is a lawyer and economist working as Manager, Research at the Centre for Civil Society. He served as a Frederic Bastiat Fellow at the Mercatus Center at George Mason University in 2015-16.

## N G Ranga: Swatantra’s Peasant Leader

Original: https://www.spontaneousorder.in/p/n-g-ranga

Author: Spontaneous Order

Published: 2019-11-08T07:50:05.000Z

Topics: swatantra-party, property-rights, peasant-leadership, indian-liberals

> Like most other politicians of his generation, N G Ranga’s long public life saw him leading multiple ventures, all in the service of the nation and its people. Educated at Oxford, he began his career as an economics professor only to enter the regional

**Summary:**

N G Ranga, an Oxford-educated economist, emerged as a paradoxical peasant leader in Andhra, building support through agricultural organizations and emulated later by Sharad Joshi. His ideology blended oriental romanticism, Gandhian self-sufficiency, Marxism—abandoned after Stalinist collectivization—and liberal values from John Stuart Mill, emphasizing individual freedom and property rights. Ranga promoted grassroots democracy by establishing peasant political schools like the 1934 Andhra Farmers’ School, modeled on British Labour Party methods, and supported anti-zamindari agitations, convincing Gandhi to back them. He co-founded the All India Kisan Sabha in 1936 but opposed its radicalism and Nehru’s socialist policies, including land ceilings, Five-Year Plans, and cooperative farming, mobilizing lakhs of peasants against the 1959 Nagpur Resolution. As Swatantra Party’s first president—chosen by Rajaji over Minoo Masani for his rural appeal—Ranga embodied its pro-market outlook, delivering a rousing 1964 parliamentary speech that defeated the 17th Amendment’s uncompensated land acquisition. Nehru acknowledged Ranga’s protective role for peasants. Despite this liberal legacy defending property rights against state overreach, Ranga’s 1971 electoral defeat led to his baffling defection to Indira Gandhi’s Congress and support for the Emergency, meriting further research.

**Key points:**

- Ranga founded peasant political schools in 1934 to foster grassroots participation and political consciousness among Andhra farmers.
- He opposed Nehru's socialist land reforms, Five-Year Plans, and cooperative farming, mobilizing massive peasant protests to defend property rights.
- As Swatantra Party's first president, Ranga's 1964 speech defeated the 17th Amendment enabling uncompensated land acquisition by states.
- Ranga's ideological shift from Marxism to liberalism highlighted his advocacy for farmers' dignity against colonial and post-independence socialist policies.

**By Sanjeet Kashyap**

* * *

Like most other politicians of his generation, N G Ranga’s long public life saw him leading multiple ventures, all in the service of the nation and its people. Educated at Oxford, he began his career as an economics professor only to enter the regional politics in Andhra. His position as a major provincial leader was cemented by his control over various agricultural organisations that he had established. Paradoxical as it may sound, the Oxford-trained economist Ranga’s core support base comprised of the Andhra peasantry. Later, liberal farm leader Sharad Joshi would come to emulate Ranga’s trajectory.

N G Ranga’s ideas were a curious mishmash of oriental romanticisation of an idyllic village past, Gandhian notion of self-sufficiency, Marxist dreams of progress, and liberal values of individual freedom and property rights. Influenced by the social reformer Kandukuri Veeresalingam in the early days, Ranga founded the Kamma Jana Mahasabha, a progressive organization working against untouchability and dowry-purdah tradition.

In Oxford, he came across the works of HG Wells, Sydney Webb, Bertrand Russell, and John Stuart Mill. Initially attracted to guild socialism in Europe, the progress of the USSR would turn him into a Marxist. Later in the 1930s, the Stalinist oppression of peasants and forced collectivization drove Ranga away from the Marxist fold.

It was in 1930 that the academic economist N G Ranga became part of the mainstream politics with his entry in the central assembly. He went on to oppose the Simon Commission report and participated in the first Round Table Conference. Ranga’s lasting contribution to Indian democracy, I would argue, lies in his effort to promote substantial grass-root participation. His methods? Based on a stint with the British Labour Party’s political school, he went on to establish similar schools in Andhra to turn peasants into politically-conscious citizens. Andhra Farmers’ School, first among the others, was opened in 1934.

N G Ranga’s pro-peasantry advocacy was visible in his support to the farmers’ agitation against the zamindari oppression at Venkatagiri. He successfully managed to convince Gandhi to lend support to the movement, despite opposition from other members of the Congress. Ranga was also a key player in the formation of All India Kisan Sabha in 1936. The radical zamindari abolition agenda of AIKS would soon bring it in conflict with the provincial Congress governments. Even Ranga’s academic publications were mostly concerned with the condition of peasants and labourers in the countryside. Known as the Rythu Ranga and Coolie Ranga, he fought against both the colonial and socialist Indian state to ensure dignity for farmers.

Ranga’s differences with Nehru were visible from the beginning. As part of the Kumarappa Committee on land reforms, he didn’t support land ceiling measures. Ranga was also opposed to the whole socialist apparatus of the Five-Year Plans and Planning Commission. He refused to join Nehru’s cabinet when offered the ministerial berth. In response to Nehru’s advocacy of cooperative farming, Ranga mobilized lakhs of peasants in Machilipatnam to oppose the abolition of property rights by the state. The 1959 Nagpur Resolution of INC came as the final straw. The socialists in Congress proposed cooperative farming in the emulation of Mao’s collectivization drive.

The threat to property rights in an increasingly socialist India galvanized a disparate set of anti-Congress leaders to come together and form the Swatantra Party. However, as political scientist [Howard Erdman](https://archive.org/stream/swatantrapartyin00erdm/swatantrapartyin00erdm_djvu.txt) has pointed out, Swatantra’s leadership had a clear ideological position stemming from a pro-market outlook. It was not a disparate coalition of opportunists under Rajaji, as charged by many of the detractors.

The predominantly urban character of Swatantra leadership led Rajaji to eschew Minoo Masani in favour of Ranga as the first Party president. [S V Raju](https://parthjshah.in/node/528), Swatantra leader and Masani’s biographer, noted that Masani was unhappy with the choice of N G Ranga as the president. Rajaji’s persuasion though [convinced Masani](https://archive.org/stream/swatantrapartyin00erdm/swatantrapartyin00erdm_djvu.txt) to lend support to Ranga in public – *“It is not an accident that the move for the establishment of the Swatantra Party should have taken place at a meeting convened … by the All India Agriculturalists’ Federation and that Professor Ranga should be nominated as its leader. This is as it should be. India is and will remain, for many generations to come, a peasant country.”*

As a Swatantrite parliamentarian, Ranga’s advocacy of liberty was most visible during the debates over the proposed 17th amendment in 1964. The amendment would empower state governments to acquire land of ordinary farmers without paying any compensation. Ranga’s rousing speech in Parliament against the bill led to its defeat.

N G Ranga’s concern for farmers’ welfare was recognized by none other than Pandit Nehru, “As long as Rangaji is in Parliament, the Indian peasants could sleep without any worry.” On the question of his opposition to Nehru, Ranga had clarified that – *“it was for the freedom of the peasants and in defence of dharma. I’ve visualized the resulting implications of his anti-farmer policies. Knowing fully well that opposing Pandit Nehru can be politically dangerous to me, I performed my duty in defence of my convictions.”*

N G Ranga later defected to Indira Gandhi’s INC after facing a massive defeat in 1971 elections. Not only that, but he also lent support to Ms. Gandhi’s draconian imposition of Emergency. The baffling switchover of a liberty advocate to the populist left faction demands explanation, meriting further research.

[Read more on the Indian Liberal Tradition](https://spontaneousorder.in/tag/indian-liberal-tradition/)

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## SO Musings: The Gold Problem in India

Original: https://www.spontaneousorder.in/p/gold-problem-india

Author: Spontaneous Order

Published: 2019-10-31T09:44:11.000Z

Topics: gold-problem, monetary-policy, economic-history, free-enterprise

> The gold problem in India, if there is such a problem at all, has been the subject of intensive public debate and discussion in recent days. The Forum of Free Enterprise, following its practice of stimulating public thinking on national economic problem..

**Summary:**

This post highlights a July 1963 booklet by the Forum of Free Enterprise titled on India's 'gold problem,' questioning its existence amid public debate and featuring essays by classical-liberal experts: Prof. B.R. Shenoy (gold authority), Mr. M.A. Sreenivasan (former Kolar Gold Mines chairman), Dr. Kersi Doodha (monetary economist), and Mr. Phiroze J. Shroff (economist and constitutional law expert). The booklet analyzes the issue under four heads from historic, economic, and constitutional viewpoints: defining the gold problem, its origins, government measures and their success, and alternative liberal approaches if those failed. It embodies the free enterprise tradition of stimulating public discourse on national economic challenges against pseudo-socialist policies.

**Key points:**

- Forum of Free Enterprise published a 1963 booklet with four essays critically examining India's gold problem.
- Essays cover the problem's definition, historical origins, past government interventions' effectiveness, and proposed alternatives.
- Authors include liberal authorities like Prof. B.R. Shenoy and industrialist M.A. Sreenivasan.

**By Spontaneous Order**

* * *

The gold problem in India, if there is such a problem at all, has been the subject of intensive public debate and discussion in recent days. The Forum of Free Enterprise, following its practice of stimulating public thinking on national economic problems published a booklet on the gold problem in July 1963. The booklet included four essays, examining the gold problem from the historic, economic and constitutional viewpoints.

The authors of the booklet are: Prof. B. R. Shenoy, Director of the School of Social Sciences, Gujarat University, an authority on the gold problem; Mr. M. A. Sreenivasan, eminent industrialist who was formerly the Chairman of the Kolar Gold Mines; Dr. Kersi Doodha, of the Department of Economics of the University of Bombay, who is author of books on monetary problems, and Mr. Phiroze J. Shroff, well-known economist and an authority on constitutional law.

The booklet examines the Gold Problem under four principal heads:

1.  What is the Gold Problem?
    
2.  How and when did it arise?
    
3.  What measures have we adopted to tackle it and with what success?
    
4.  If these measures have not been successful, what alternative measures could we adopt?
    

*Access the full document [here](http://indianliberals.in/~_admin/pdflanguage?id=1750398613.pdf).*

*First Published in the Forum of Free Enterprise in July 1963.*

*Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/index), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Somebody’s Watching You

Original: https://www.spontaneousorder.in/p/surveillance-in-india

Author: Spontaneous Order

Published: 2019-10-30T14:23:18.000Z

Topics: digital-surveillance, privacy-rights, aadhaar, state-overreach

> The modern methods of communication through digital technology come with their own challenges. Presently, they have become a means for the state to keep a surveillance on activities of the citizens. In the name of national security and countering intern..

**Summary:**

Modern digital communication enables extensive state surveillance in India, justified under national security but often abused, posing greater threats to privacy and freedom than censorship. The author argues for high thresholds and strict parameters for data decryption by law enforcement, citing examples like Uttar Pradesh checking 10,000 phone records over rotten potatoes thrown on VIP streets, Himachal Pradesh tapping 1371 numbers with only 2% authorized, and leakage of data from over 2.4 lakh NEET candidates. Despite the 2017 Puttaswamy judgment recognizing privacy as a fundamental right with proportionality standards, ordinary provisions allow broad interception of communications, and Aadhaar serves as both a governance tool and surveillance mechanism. India ranks third globally in lowest privacy protections with a 2.5/5 score, flipping democratic accountability by making citizens answerable to the state. From a classical-liberal viewpoint, surveillance risks political control over protection, endangering free speech and privacy; the state must unmask vague 'national interest' claims to balance public interest with individual rights.

**Key points:**

- State surveillance in India, enabled by digital tools like Aadhaar, often exceeds proportionality standards despite the 2017 Puttaswamy ruling on privacy as a fundamental right.
- Examples of abuse include UP's review of 10,000 phone records for a minor incident and Himachal's unauthorized tapping of 1371 numbers.
- India's low privacy score of 2.5/5 ranks it third globally among surveillance states, inverting democratic accountability.
- High thresholds and legal mechanisms are needed to restrict surveillance to last-resort measures, prioritizing individual privacy over expansive state powers.

**By Mahima Kataria**

* * *

The modern methods of communication through digital technology come with their own challenges. Presently, they have become a means for the state to keep a surveillance on activities of the citizens. In the name of national security and countering internal threats the government frequently gains access to private data. Earlier, with less developed technologies, methods like phone tapping were used. Now, traditional surveillance has been replaced by modern techniques.

While one may feel that the government should be able to accesses private lives of the citizens, it is important for us to make sure that it is done only as a matter of last resort. The last two years have witnessed rise to a new kind of crime, namely mob lynching, which has its own unique sources. The government has blamed social media, fake news and communal messaging as the primary causes for the same. These add to the larger concern for India’s security and sovereignty.

While some of these concerns are valid, the threshold for law enforcing agencies to decrypt data should be high and there must be some parameters to keep such access in check. There are several examples of excesses committed by the government. Be it the UP government which [checked 10,000 phone records](https://thewire.in/government/adityanath-phone-tapping-uttar-pradesh) to find out who had thrown rotten potatoes on the VIP streets of Lucknow, or the central government asking Blackberry to provide access to monitor their messenger, internet and enterprise service. In 2012, a change of government in Himachal Pradesh revealed that the previous [government had targeted 1371 telephone numbers for tapping and recording](https://www.indiatoday.in/india/north/story/himachal-pradesh-police-registers-first-fir-in-phone-tapping-scandal-168300-2013-06-28) but the state’s home secretary had granted permission for only 2% of these. Another concern is that of data leakage, the most recent example being the [leakage of data of over 2.4 lakh NEET candidates](https://www.medianama.com/2018/07/223-data-of-2-4-lakh-neet-candidates-leaked-and-available-for-sale-report/).

All these instances highlight that surveillance can be more dangerous than censorship and can cause a lot more harm to the people without them even realizing it. P Arun, points out the dilemma between the narrative of surveillance for the cause of protection and security versus the ambition to control and surveil populations for larger political gains. Data collection is important to design a campaign strategy. This critically endangers not only the right to freedom of speech but also the fundamental right to privacy.  

The judgment in Justice KS Puttawasmy’s case in 2017 declared privacy a fundamental right and laid proportionality standards to test the validity of restrictions on that right. But the government barely have constrained itself within the restrictions. *Other than “extraordinary provisions” to counterterrorism, there is an array of “ordinary provisions” for normal times.* These ordinary provisions enable the state to intercept telephonic and other electronic communication.

Incidents of phone tapping etc. reach a high point on the occurrence of major events such as during Emergency, Mumbai attacks or Gujarat riots. But there is a lack of realization on the state’s part that same conditions do not apply under normal circumstances. Aadhar is the biggest tool for state intervention. The Unique Identification number that was introduced for good governance provides real times access to information of all citizens, strengthening surveillance as a pillar of e-governance. *Aadhar is not only a right promoting mechanism but also a right denying tool.*

India today that boasts of being the largest democracy is also amongst the biggest surveillance states. With a score of 2.5 out 5 on the privacy index, [it ranks 3rd on lowest privacy protection norms](https://qz.com/india/1728927/indias-among-the-worlds-top-three-surveillance-states/).  Despite privacy gaining a constitutional status there is lack of legal mechanisms to protect it.

The basic pillar of democracy is the accountability of state towards its citizens but surveillance flips this very norm making citizens accountable to the state. There is a need to unmask the mystery of “national interest” and work towards building a more balanced relationship between the so called public interest and individual privacy.

[Read More: Aadhaar for Subsidies, Not Surveillance](https://spontaneousorder.in/aadhaar-for-subsidies-not-surveillance/)

* * *

**About Mahima Kataria**

Mahima Kataria is pursuing her Masters from Delhi University. She has previously completed the Young India Fellowship from Ashoka University. She is interested in policymaking and wishes to bring about significant contributions to the sector.

## SO Musings: Morality of the Market

Original: https://www.spontaneousorder.in/p/dhanteras-morality-of-markets

Author: Spontaneous Order

Published: 2019-10-25T14:02:32.000Z

Topics: market-morality, bourgeois-virtues, capitalism, economic-freedom

> This article, written by Parth Shah, President of the Centre for Civil Society, first appeared in The Economic Times on 14 November 2001. I am writing this column on Dhanteras, the beginning of the five-day festival of Deepavali. (Dhan: wealth and Teras..

**Summary:**

On Dhanteras, the festival celebrating wealth (dhan) through purchases and worship of Lakshmi, society honors the goddess and material wealth but ignores its creators—businessmen and women. Parth Shah argues that no national awards exist for wealth creators, unlike those for bravery, sports, arts, or literature, portraying wealth as a natural phenomenon rather than human achievement. Businessmen are viewed as a 'necessary evil'—useful post-communism but morally suspect—contrasted with corrupt politicians who receive societal excuses as reflections of popular will. Cultural depictions in literature, plays, and films cast businessmen as villains, demanding perfection while rationalizing political corruption. Shah defends bourgeois virtues—politeness, enterprise, trustworthiness—fostered by unfettered market competition, where voluntary transactions moralize greed via the Invisible Hand, elevating standards of living and behavior. Businessmen internalize guilt, prizing philanthropy over production, yet their enterprises sustainably alleviate poverty. From a classical-liberal view, laissez-faire capitalism civilizes; businessmen must reject unearned guilt, embrace mercantile virtues, and gain moral certitude. Shah urges adding 'Jai Vyapari' (hail the trader) to slogans like Jai Jawan, Jai Kisan, Jai Vijan on this 2001 Dhanteras.

**Key points:**

- Society worships wealth on Dhanteras but provides no national awards or honors for businessmen who create it.
- Businessmen face blanket moral condemnation as exploiters, unlike politicians excused as societal reflections.
- Unfettered market competition instills bourgeois virtues like honesty and innovation, moralizing wealth from voluntary exchanges.
- Businessmen should reject guilt over profits, recognizing their factories as superior poverty alleviators than charity.
- Add 'Jai Vyapari' to national slogans to acknowledge wealth creators.

**By Parth Shah**

* * *

*This article, written by Parth Shah, President of the Centre for Civil Society, first appeared in [The Economic Times](https://economictimes.indiatimes.com/) on 14 November 2001.*

I am writing this column on Dhanteras, the beginning of the five-day festival of Deepavali. (Dhan: wealth and Teras: the thirteenth day of the month of Ashwin). It’s the day when Lakshmi, the goddess of wealth is worshiped. Dhan is celebrated by purchasing new clothes, utensils, and ornaments, and in villages by decorating cattle, the main form of wealth.

What about the creators of dhan—businessmen and businesswomen? They are hardly celebrated, applauded, or even acknowledged. Society recognises contributions by giving national awards. There is a national award for bravery (in war and in civilian life), sports, arts, literature, film, but no distinct award for wealth creators.

Trade associations and business publications give awards, but society does not. We celebrate wealth at least for a day, but never wealth creators. It is as if wealth came into existence on its own, as an act of nature for which humans cannot take credit.

Actually it is hard to think of a society that has a National Award for Wealth Creator. Dhan, an inanimate object is worshiped, but creators of that dhan are hardly recognised, let alone revered.

In the post-communist world, no one suggests the abolition of private property or nationalisation of industry. Businessmen are regarded as useful, but not honourable—a necessary evil. They are needed for material life, but their moral status is always suspect. They are tolerated but never honoured.

Contrast this treatment of businessmen with that of politicians. Thoroughly corrupt politicians are relieved of moral condemnation by assertions like: “Politicians come from the same society that we have created.” “We ourselves elect them; they reflect popular will.” None of us can cast a stone on the politician. We are all equally guilty for political corruption.

It is said that corrupt politicians are a reflection of the falling values of the society. We should feel responsible that they exist in our midst. How about corrupt businessmen? Is their existence ever seen as a sign of moral degradation of the society? Are they a reflection of us? No one seems to hold society answerable for the existence of corrupt businessmen.

Actually, a distinction between corrupt and non-corrupt businessmen is hardly ever made. They are all treated alike. They exploit workers, cheat customers, and ruin the environment. That’s what businessmen are. It is hard to imagine that they could be from among us. They are judged to be a different species altogether.

While criticising corrupt politicians, one is reminded that there are good politicians too. It seems that one good politician can provide cover for all the corrupt ones. No one excuses bad businessmen by remembering good businessmen. One bad businessman undoes all the good ones. We are satisfied if a few politicians are honest, but dissatisfied unless all businessmen are perfect. We rationalise corrupt politicians but refuse to consider the possibility of an honest businessman.

Constant complaints about corruption in politics commonly bring a reply that one should join politics, and unless one is willing to do so, one has no moral right to pass a judgement. What’s the reply to complaints about corrupt businessmen? Surely not to join business! Even business management students take pride in declaring that they would like to work for a non-profit organisation.

Our literature, plays, and films reflect this moral indignation of businessmen. Businessmen are the most common villains. This is also true in so-called capitalist societies. Several classics can be immediately listed where businessmen are portrayed as bad characters. A long search would be required to find a work, let alone a classic, that shows a businessman as the hero.

It is assumed that success in business requires no higher virtues. Mechanics and management of success are studied but not mercantile virtues. More than two centuries after the Industrial Revolution, after unimaginable prosperity created by capitalism, our instincts favour aristocratic or peasant virtues and disdain bourgeois virtues.

We cherish virtues of the soldier, worker, and the artist, but not of the merchant. In reality, commerce has the most civilising influence. It gives us “polite, accommodating, energetic, enterprising, risk-taking, and trustworthy people.” Bourgeois virtues have made civilisation possible.

I do not argue that businessmen are inherently superior, morally or otherwise. It is the system under which they operate that over time makes them more honest, reliable, and innovative. Unfettered competition imbibes them with mercantile virtues. Wealth earned through voluntary transactions in a market place is moral, not when acquired by the use of force. Greed of one businessman helps turn the greed the other into an asset, a virtue. Laissez-faire capitalism evolves us into better beings—in the standard of living, in etiquette, and in moral behaviour. The Invisible Hand of capitalism also produces the Invisible Heart.

Today only charity brings any moral recognition to businessmen. They are commended not for the money they make, but for the money they give away. Unfortunately businessmen themselves have accepted this moral condemnation—the unearned guilt. They are more proud of their philanthropic activities than their productive work. They seem to be trying to wash away the sin of earning wealth by giving it away. They fund poverty alleviation programmes, forgetting that their factories and shops are the most effective and sustainable poverty alleviation programmes.

Businessmen must acquire moral certitude, understand the bourgeois virtues they represent. They should not succumb under the weight of unearned guilt and undermine the great commercial civilization they have helped create.

Jai Vigyan\* was recently added to the slogan Jai Jawan\*, Jai Kisan\*. On this 2058 Dhanteras, let us acknowledge the dhan creators as well. Add Jai Vyapari!\*

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Let’s Disconnect BSNL & MTNL

Original: https://www.spontaneousorder.in/p/bsnl-mtnl-robbing-taxpayers

Author: Spontaneous Order

Published: 2019-10-25T10:30:09.000Z

Topics: telecom, government-inefficiency, privatization, taxpayer-burden

> The government-owned telecom behemoths, BSNL & MTNL, are the epitome of inefficiency, bloated bureaucracy, and bad customer services. In addition, they cost the taxpayers thousands of crore rupees annually. If you don’t believe that, just look at the nu

**Summary:**

Government-owned BSNL and MTNL exemplify inefficiency, bloated bureaucracy, and poor customer service, draining thousands of crores from taxpayers annually while failing to deliver modern services. Airtel provides nationwide 4G, broadband, and landlines with under 15,000 employees, while BSNL—despite nearly a dozen times more staff—has yet to roll out 4G everywhere. In the last financial year, BSNL lost 8 lakh rupees per employee, MTNL lost nearly 12 lakh per employee, contrasting sharply with Reliance Jio's 20 lakh+ profit per employee. These state firms serve under 12 crore customers, versus over 70 crore for Jio and Airtel, who also offer superior speeds. Since 2007, repeated bailouts have siphoned public funds, with the latest 70,000 crore package costing over 12,000 rupees per direct taxpayer (5.65 crore total) or about 550 rupees per Indian. From a classical-liberal viewpoint, these 'sinking holes' for taxpayer money prove government enterprises cannot compete with private innovation and efficiency. The solution: permanently disconnect BSNL and MTNL, offering employees a one-time generous VRS package to end this periodic robbery.

**Key points:**

- BSNL and MTNL lose lakhs per employee annually while Jio and Airtel generate massive profits per employee with far fewer staff.
- State telecoms serve under 12 crore customers versus over 70 crore for private competitors, despite government bailouts totaling thousands of crores since 2007.
- Latest 70,000 crore bailout equates to 12,000 rupees per income taxpayer or 550 rupees per Indian.
- Permanently shut down BSNL and MTNL with a one-time VRS for employees to stop taxpayer drain.

**By Sudhanshu Neema**

* * *

The government-owned telecom behemoths, BSNL & MTNL, are the epitome of inefficiency, bloated bureaucracy, and bad customer services. In addition, they cost the taxpayers thousands of crore rupees annually.

If you don’t believe that, just look at the numbers. [Airtel](https://www.airtel.in/) provides 4G connectivity across India, broadband connections and landlines with less than 15,000 employees. In comparison, BSNL is [yet to provide 4G services to the whole nation](https://www.indiatoday.in/technology/news/story/bsnl-replacing-its-3g-service-with-4g-in-select-areas-4g-sim-cards-sold-for-almost-no-cost-1602618-2019-09-24) despite having almost a dozen times more employees than Airtel.

[

![](https://substackcdn.com/image/fetch/$s_!kz58!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fb0cebdf7-9476-4ea0-8cf3-77a5a098a35c_1024x614.jpeg)



](https://substackcdn.com/image/fetch/$s_!kz58!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fb0cebdf7-9476-4ea0-8cf3-77a5a098a35c_1024x614.jpeg)

Further, BSNL lost 8 lakh rupees per employee while Reliance Jio made 20 lakh plus for each employee in the last financial year. MTNL is an even bigger national shame, it lost almost 12 lakh rupees per employee in the last financial year. Even more shocking is the fact that with all their employees and government largesse, these two corporations serve less than 12 crore customers. [Reliance Jio](https://www.jio.com/) and Airtel, on the other hand, are able to cater to over 70 crore customers, with impressive internet speed too.

While doing these disservices to the nation, BSNL & MTNL have gobbled up thousands of crores of taxpayers’ money since 2007. The latest bailout of ~70,000 crore rupees is going to cost the [5.65 crore income-tax payers](https://economictimes.indiatimes.com/news/economy/finance/income-tax-dept-creates-world-record-with-filing-of-49-lakh-itrs-in-one-day/articleshow/70935414.cms) over 12,000 rupees each. That is for direct taxpayers. However, all of us pay GST and other indirect taxes. Cost calculated of this package per Indian is ~550 rupees. Can you believe everyone of us just paid BSNL & MTNL 550 rupees?

Time and again, these two companies have proved to be a sinking hole for the taxpayers. We should disconnect them permanently. I am not suggesting that we do not give what is due to the employees. Let us just give them all a nice VRS package for one time and end this periodical robbery once and for all.

[Read more: Why BSNL Needs to Hang Up](https://spontaneousorder.in/why-bsnl-needs-to-hang-up/)

* * *

**About Sudhanshu Neema**

Sudhanshu is a lawyer and economist working as Manager, Research at the Centre for Civil Society. He served as a Frederic Bastiat Fellow at the Mercatus Center at George Mason University in 2015-16.

## Kamaladevi Chattopadhyay – India’s Forgotten Feminist Icon

Original: https://www.spontaneousorder.in/p/kamaladevi-chattopadhyay

Author: Spontaneous Order

Published: 2019-10-22T11:03:30.000Z

Topics: feminism, handicrafts-revival, indian-freedom-struggle, indian-liberal-tradition

> Kamaladevi Chattopadhyay epitomized modern Indian women by championing their very cause. Kamala Devi was a pioneer in all senses – a freedom fighter, an entrepreneur, a reformer, a feminist. Her life was enveloped by tragedy. She was a victim of the wor

**Summary:**

Kamaladevi Chattopadhyay is presented as India's forgotten feminist icon and pioneer—freedom fighter, entrepreneur, reformer—who overcame early widowhood and family tragedies to champion women's causes amid the Indian National Movement. Influenced by Gokhale, Annie Besant, Ranade, and Gandhi, she leveraged theatre for social reform and co-founded enduring institutions like Sangeet Natak Akademi and India International Centre. In 1930, she persuaded Gandhi to include women in the Civil Disobedience Movement, marking her entry as a fearless political figure. From the 1950s, she revived endangered Indian crafts by establishing and heading the All India Handicrafts Board for 20 years, forming cooperatives for credit and marketing (early Self-Help Groups), instituting awards, and urging states to bypass middlemen for direct sourcing and emporia sales—ensuring crafts' national and international presence. Her classical-liberal-inflected feminism rejected women imitating or fighting men, instead instilling consciousness of their faculties, respecting men's roles, and recognizing women as social-economic factors; she lobbied for factory/farm conditions and paid maternity leave while critiquing undervaluation of home production. Losing the 1952 election by 55 votes, she refused post-1947 formal politics. The post mourns her historical overshadowing despite lasting societal imprints.

**Key points:**

- Kamaladevi convinced Gandhi to include women in the 1930 Civil Disobedience Movement.
- She established the All India Handicrafts Board, headed it for 20 years, and created cooperatives as early Self-Help Groups to revive Indian crafts.
- Her feminism emphasized women's consciousness of their own faculties, respect for men's roles, and recognition as social-economic factors without imitation or conflict.
- She advocated for better working conditions, paid maternity leave, and direct state engagement with craftsmen to cut middlemen.
- Despite losing the 1952 election by 55 votes, she rejected formal politics after independence.

**By Mahima Kataria**

* * *

Kamaladevi Chattopadhyay epitomized modern Indian women by championing their very cause. Kamala Devi was a pioneer in all senses – a freedom fighter, an entrepreneur, a reformer, a feminist.

Her life was enveloped by tragedy. She was a victim of the worst kind of traditional practices. Being widowed in her early years, the death of her father, the ill-treatment of her mother followed by the death of her sister. But none of these events stopped her from pursuing the larger cause.

Her formative years coincided with the development of the Indian National movement. Public figures such as Gokhale, Anne Beasant, Ranade were common in her everyday life and provided political inspiration. Art and theatre also played a major role in her life. She used theatre as a medium to promote social issues and as a catalyst for transformation leaving legendary marks in the field. Among other institutions that Kamaladevi helped create and nurture were the Sangeet Natak Akademi and the [India International Centre](http://www.iicdelhi.nic.in); which are successful institutions even today.

Dr Annie Besant and Mahatma Gandhi were significant influences in her life. It was Dr Besant’s oratorical style that she admired and absorbed and coupled with her theatrical talents. The 1930 Civil Disobedience Movement was her first encounter with Gandhi. She convinced Gandhi to not restrict the march only to men. This was the first public instance portraying her persuasion skills. It brought to light the fact that a strong and fearless woman had entered the Indian political scene.

She took the onus of protection of Indian craft industry on herself. Her involvement with the craft was deep, she travelled the length and breadth of the country safeguarding it. From the 1950s, Kamaladevi turned increasingly to the revival and promotion of India’s rich, varied and endangered craft traditions. She established the All India Handicrafts Board and headed it for twenty years. She formed cooperatives to market the products of craftsmen and to provide them credit and instituted awards to motivate them, this was one of the earliest examples of Self-Help Groups. She urged state governments to cut out middlemen and deal directly with craftsmen, source their products and sell them through their own emporia. That Indian crafts are still alive and, moreover, have a visible national and international presence, is owed more to Kamaladevi Chattopadhyay than to any other individual.

She worked for women and their development. Being a true feminist, hers was the most desirable notion of feminism which is contested even today. *According to her, the women’s movement did not seek to make women either fight men or imitate them. It rather seeks to instil in them a consciousness of their own faculties and functions and create a respect for those of the other sex.* Her ideologies were based on how women must be recognized as a social and economic factor. It is tragic how tradition puts a lower value on home production and services. This non-pecuniary and non-competitive character has lowered the prestige of women. She also became increasingly involved in the women’s movement, lobbying for better working conditions for women in factories and farms, and for their right to paid maternity leave.

Kamla Devi had brief direct political presence. She stood for the first general elections and lost the race only by 55 votes. However, after India became independent in 1947, she refused to enter formal politics.

Kamaladevi was also an original thinker, whose writings on politics and social reform continue to speak to us today. Kamaladevi Chattopadhyay died in 1988, leaving her imprints on the Indian society. It is however sad that a figure with such indispensable contribution remains lost in the shadows of history. The legacy of bravery, feminism, and co-working she has left continues to inspire the youth of today.

[Read more on the Indian Liberal Tradition](https://spontaneousorder.in/tag/indian-liberal-tradition/)

* * *

**About Mahima Kataria**

Mahima Kataria is pursuing her Masters from Delhi University. She has previously completed the Young India Fellowship from Ashoka University. She is interested in policymaking and wishes to bring about significant contributions to the sector.

## SO Musings: Agricultural Statesmanship

Original: https://www.spontaneousorder.in/p/agricultural-statesmanship-m-a-venkata-rao

Author: Spontaneous Order

Published: 2019-10-18T11:53:08.000Z

Topics: agricultural-policy, co-operative-farming, socialism-critique, farmer-rights

> This article on agricultural statesmanship by M A Venkata Rao first appeared in the Indian Libertarian, a magazine of public affairs, in April 1957. Rao’s observations about establishment of a socialist pattern of society in Indian agriculture are as va

**Summary:**

M A Venkata Rao warns that India's post-Avadi Congress resolutions commit the nation to a Soviet-style socialist 'co-operative commonwealth,' targeting agriculture by universalizing 'co-operative farms' modeled on Russia and China, which would liquidate independent peasant proprietors and reduce them to state-dependent laborers. This mirrors industrial policy squeezing out private enterprise via heavy industry bias and taxation. Government delegations praise Chinese reforms, and post-election pushes loom, despite democratic pretenses. Rao cites evidence debunking collectivization: Russian farm output stagnant since Czarist times; Polish private farms 30% more productive than cooperatives; Hungarian farmers dissolved them in 1956 revolt. Incentives vanish in collectives, unlike voluntary Danish cooperatives aiding small farmers' marketing and inputs while preserving management autonomy, or Japan's tiny holdings (95% under 5 acres) yielding 48.1 quintals paddy per hectare vs. India's 12.2. True agricultural statesmanship, per the 1948-49 Radhakrishnan Commission, prioritizes freedom, dignity, and production harmony over imitation, urging libertarians to educate publics against socialist perils via free debate before democracy erodes.

**Key points:**

- India's socialist policies aim to eliminate independent farmers through mandatory co-operative farms, stripping property rights and turning peasants into laborers like in Soviet Russia and China.
- Collectivized farming fails to boost production, with Russia showing no gains since Czarist era, Polish private farms outperforming by 30%, and violent peasant resistance worldwide.
- Japan achieves 48.1 quintals paddy per hectare on tiny holdings (95% under 5 acres) vs. India's 12.2, proving small independent farms excel.
- Denmark's voluntary cooperatives enhance small farmers' access to credit, inputs, and markets without pooling land, preserving freedom and yielding world-leading butter production.
- Libertarians must launch public education campaigns to expose dangers and advocate evidence-based policies prioritizing individual dignity over socialist ideology.

**By Spontaneous Order**

* * *

This article on agricultural statesmanship by **M A Venkata Rao** first appeared in the Indian Libertarian, a magazine of public affairs, in April 1957. Rao’s observations about establishment of a socialist pattern of society in Indian agriculture are as valid today as they were then, only the context has changed a little.

Both in industry and agriculture, Indian policy has received a decisive orientation towards Marxism of the Soviet Russian variety since the passing of the Avadi resolution which defined national reconstruction in terms of a socialistic pattern of society. The subsequent Amritsar Congress removed the ambiguity in the phrase and equated it definitely with “socialist structure” and socialism. And now the Indore session has sought to allay the misgivings of thoughtful people by retaining the words “co-operative commonwealth” while adding “‘socialist” to the Congress creed. So the final form today is “socialist co-operative commonwealth” as regards the goal of public policy to which the country is committed by the ruling Party.

The substance of socialism contemplated is of the Russian variety beyond the shadow of a doubt. Any doubt in this respect will be dispelled by a glance at the pattern of investment built into the Second Five Year Plan with its undue stress on heavy industries and over-ambitious targets of production beyond the scope of our normal resources. The idea is to squeeze out the private sector altogether as objectionable to the socialist ideal of a classless society. The commercial and industrial class will be destroyed (non-violently in the first stage) through excessive confiscatory taxation and through narrowing its sphere through the aggrandisement of the public sector and absorbing the entire savings of the country for it through public loans.

**Liquidating the Farmers**

Now there are clear indications that the powers that be are contemplating a similar drive in the countryside to remove the class of independent farmers. Just as the policy in industry and commerce is to remove the class of independent entrepreneurs and property-holders, so in agriculture the policy is definitely to eliminate the land-owning peasant proprietor through the universalisation of the so-called “agricultural cooperatives.” Two Government Delegations have studied Chinese “reforms’ in agriculture both in respect of the steps taken to increase production through Government encouragement and of the measures being taken to extend “‘agricultural co-operatives” on a colossal scale. Their reports so far as they are available in the shape of press summaries are couched in terms of extravagant praise and uncritical enthusiasm, with of course a face-saving proviso that in India we should achieve similar “progress” strictly· through democratic procedures without compulsion and intimidation. The Prime Minister recently expressed annoyance with State Ministers and Congress high-ups for not daring even to put the idea of co-operatives to peasants. It is clear that after the elections (which has brought the Congress party again to power) there will be a persistent attempt made to increase the number of agricultural co-operative farms on an unprecedented scale, on the Russian and Chinese models. The country is facing a crossroads situation in agriculture as well as in industry. The industrial class has begun to realise the need for organised resistance to the perilous situation in which they find themselves largely on account of their own default and defects of leadership and character. The large class of landowners has been demoralised by the spectacle of the easy way in which the zamindari system has been abolished by the new politicians. Laws in favour of tillers enabling them to acquire property in the land they till (on behalf of owners) have been passed in some states like Bombay with its Land Tenancy Act. The next step is to deprive the new owners of the land they have recently acquired (or will acquire shortly) by herding them into agricultural “co-operative farms.” The policy has been decisively declared in the Plans.

**After the Soviet Pattern**

Experiment concerns only the means and pace of the “reform.” The Plans define co-operative farming as a way of farming in which peasant owners pool their lands and work under common management. Where lands are pooled under single management, the status of the participants will no longer be that of independent peasant proprietors with full property rights-to operate, sell or lease their land in accordance with their own judgement and plan of life. The peasant will become a mere labourer working on the joint or co-operative farm for hire. If the farm is managed by a committee elected by the peasants, the individual ordinary member will have no sense of participation. The chances are that the management will slip into the hands of Government-nominated party or officials as in Russia and China. In this case, even the illusion of participation on a voluntary basis will disappear and the labourer will be reduced to the position of the urban factory labourer who owns nothing but his hands. The net result will be the utter dependence of the farmer for his food and all other means of existence on the public administration. What freedom or individual initiative and personal dignity will survive under such a system can be easily imagined. And this is the shape and essence of socialism in regard to agriculture. And this is the immediate goal set before our unfortunate country by its present rulers.

**Let Us Be Forewarned**

And since there is no immediate prospect of changing the ruling groups, it is crucial for the welfare of ti1e country that the dangers of the policies decided upon by them should be brought home to as wide a circle of people as possible through resolute and widespread campaigns of public education conducted by all who realise the perils of the accepted programmes. While democracy is still in being by way of free public debate and a free press, opportunity should be availed of to present the other side of the shield to the general public so that the pressure of public opinion may yet occasion a halt to the disastrous courses underway and save the country from ruin in the name of the most up-to-date “progress”.

These are not merely the misgivings of libertarians like ourselves. Recognised advisers of the regime like the Radhakrishnan Commission on University Education who considered agricultural education as part of public instruction as early as 1948-49 have sounded a similar note of warning regarding the dangers of “improvisation and imitation”‘. The words are theirs-”improvising or imitation is dangerous” (page 197. University Education Commission Report). They call for statesmanship in agriculture as in other spheres of national reconstruction.

What is the difference between statesmanship and party or power politics? Mr. Cordell Hull, Secretary of State· during the entire period of the three-term Presidency of F. D. Roosevelt, twitted Anthony Eden during the last war with being only a politician while claiming that he himself was a statesman.

Statesmanship connotes long term views of the permanent interests of the nation. It consists in a vision of the potentialities of development by way of security, happiness and progress of the people and a capacity to persuade leading groups and the people at large to accept policies making for such permanent welfare lasting for generations.

**Against Democratic Fundamentals**

Statesmanship in agriculture called for by the University Commission requires a number of principles to be kept in view in the formulation of agricultural policies. The first concerns the goal of such policies. What is our paramount aim in agriculture? It is not enough to say that it is increased production. Increased production is necessary but it should not be achieved at the cost of human dignity and happiness and freedom. Production is not an end in itself. Enhanced production should form part of an overall way of life productive of the essentials of democratic well-being. As the Commission put it –  

*“India has also other needs than food. The new India has committed herself to the upholding of human freedom, to the recognition of individual worth, to the nurture of human dignity and self-respect. The food problem of India must be solved by means which are in harmony with the fundamental principles of freedom, democracy, equality and fraternity, which are the foundation stones on which the structure of the new Indian society is being built.” (Page 196. Report of the Univ. Comm. 1950).*

Such ultimate views may seem to be universally accepted but there are influential groups in the country belonging to the Leftist schools of thought (of whom the Communists are the most extreme section) who are lukewarm about freedom and individuality. They are sold on socialism or collectivism with little or no place for individual freedom.

The second principle, therefore, concerns the means to be adopted to realise a free society. Leftists say that collectivism is the one and only sure path towards a. society free from exploitation and compact of human freedom-freedom from want. They say that there is no alternative to socialism or collectivism. They base themselves on the ground that laissez-faire has failed in the past and present. This assumption has to be combated through reason and analysis of examples and ideas by libertarians who have to picture an alternative system of social relations for progress and happiness on an individual basis, with such regulation as may be found to be absolutely necessary for safeguarding equality of opportunity and preventing the cancerous growth of monopoly.

**Co-operative–A Deceptive Name**

And in the field of agriculture, there is abundant testimony to prove the fact that co-operative farming of the variety now being proposed in barefaced imitation of the awful Russian and Chinese examples cannot lead us to the end proposed, namely; progressive production, through freedom. These co-operative farms are really a misnomer. They are truly collectives which pool the land and management of individual farmers and leave them no individual responsibility and freedom of operation. They are no more cooperatives in the true sense than “people’s democracies” are democracies in any genuine sense. Freedom is the first casualty in these “co-operative farms.”

The Report of the Indian Co-operative Union of New Delhi which has just been released (in mimeograph form) has performed a valuable service in bringing the relevant data bearing on the danger of so-called ‘cooperative farms’ to the attention of students and the administration.

Next to the question of freedom is the problem of increasing production. Why are these co-operatives advocated? Obviously on the unproven assumption that they spell scientific, planned operations on large scale units of land utilising the latest technology in tools and fertilisers resulting necessarily in enhanced rates of production. The Union’s Report brings evidence from the experience of many countries showing that cooperative farming has *not* resulted in any striking increment of production per unit of land and labour. Russia, China, the East European States within the Soviet orbit, Britain, the USA, Mexico are all referred to in their survey.

**Agricultural Statesmanship**

In the communist countries, the system of “cooperative farming has been introduced through orgies of violence and the extreme rigour of a totalitarian administration. The instinct of the peasant for ownership of the land he tills is so profound and so entwined with the heart-strings of his personality that he has resisted the deprivation of his ancestral right in an all-out manner. Stalin told Winston Churchill that the liquidation and subjugation of the peasants gave him more trouble and anxiety than the war against Nazi hordes. The intentions of our leaders seem to be to persuade the peasant’ through non-violent mean! to accept the role of a labourer in “co-operative farms”. How this is to be done passes comprehension unless under non-violent means are included the pressure of discrimination in other ways – e.g. food rations, credit facilities, seeds, prices for grain and other farm products of individualist farmers. This is being added to direct pressure and violence in China.

**Warning from Russia**

There is evidence that Russia has not increased her production levels in farm products since Czarist days in spite of all the development of collectives in the last thirty years.

In East European States, the same story is repeated. In the recent October Revolution of Hungary, the first thing that the farmers did was to dissolve many cooperatives and to democratise many others. Gomulka of Poland presented a devastating indictment of Russian-sponsored planning and showed that production on private farms was 30 percent greater than on cooperatives.

The assumption that collective farming will automatically increase production is thus fallacious. The increase of production that has resulted (to the extent that it has) is more due to the assistance given to the farmer and farms by way of credit, improved seeds and tools than to the formation of cooperatives. This is commented on by the Thapar report as well. The decisive factor is that of incentive but the membership of collectives offers no scope whatever for such incentive. On the contrary, it creates a sense of desolation in the peasant and takes the light out of his life.

Further, the unit of farming need not be very large for securing enhanced rates of production per unit of land and labour. The results of Japanese agriculture are impressive in this respect.

”On an average, a peasant family in Japan cultivates only 2.5 acres as compared with 3.43 acres in overcrowded Bihar. While in India 59 percent of the holdings are less than 5 acres in size, in Japan 95 per cent of the holdings are less than 5 acres and more than 40 per cent less than 1.25 acres in size. And yet the yield or paddy in Japan is 48.1 quintals per hectare as compared with 12.2 quintals in India, 28.3 quintals in the USA and 21.5 quintals in the USSR”. (A hectare is equivalent to ~2.5 acres)

**The Example of India**

In view of these indisputable facts and the gravity of the situation which threatens to destroy the foundations of peaceful progress in the countryside and disorganise the entire economy of the country it is essential to spread a knowledge of the crucial difference between the ethical co-operation of the Rochdale type with which the non-communist world is familiar and the collective type of farming that the communist countries favour. It is more a question of ideology than of policy based on facts and experiments.

The usual type of co-operative society is seen at its best in Denmark and the Scandinavian countries generally. Danish agriculture exhibits the highest type of progress possible consistent with the preservation of individual freedom and dignity for the peasant. The co-operatives in Denmark may be called cooperatives for betterment or specific service. They enable the individual small farmer to enjoy the benefits of large-scale operations in the matter of monetary credit, and the joint purchase and sale of his requirements and products. But in the matter of the management of his own affairs in dairy or tillage and harvesting etc. he is his own master. The co-operatives maintain standards offer scientific advice and market his products and obtain for him the latest equipment cheaply through wholesale societies. Helped in this way, the Danish farmer puts on the market more butter than the rest of the world and enjoys a standard of life as high as the workers of highly industrialised countries.

These Japanese and Danish examples are enough to show that the pooling of land and management is not necessary either for enhanced production rates or for producing a sense of well-being and freedom in the peasant.

If we are earnest with democracy and the fundamental rights, we should, as the University Commission recommended so long ago as 1949, institute a *free agency* for the formulation of agricultural policies based on the most reliable data obtained from all countries and tested by experiment in our own experimental farms. These policies should not be *deduced* by a priori logic from the accepted ideal of socialist society but should be elicited from experience and reason. They should not be adopted out of deference to the national idol–the Prime Minister who happens to have made up his mind through an uncritical absorption of Leftism in the thirties of the century under the false impression that such Leftism was the only road of progress in all sectors of life, society and State.

As the Commission puts it–”imitation is dangerous.”

*Access the original text **[here](http://indianliberals.in/~_admin/pdflanguage?id=247498547.pdf)**. (page 5)*

*First Published in the Indian Libertarian in April 1957.*

*Other editions of the publication can be accessed at **[Indian Liberals](http://indianliberals.in/)**, an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

[Read more on the Indian liberal tradition.](https://spontaneousorder.in/tag/indian-liberal-tradition/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## “We’re Closed” – Unease of Opening Restaurants

Original: https://www.spontaneousorder.in/p/unease-of-opening-restaurant

Author: Spontaneous Order

Published: 2019-10-14T11:02:34.000Z

Topics: license-raj, ease-of-doing-business, restaurant-industry, regulatory-barriers

> Have you ever thought of opening your own restaurant? Do you sometimes wonder “Wow! These eateries earn a lot” and then wished to start one of your own? Do you find yourself doing the math of the daily earnings of the restaurants? If the answer to any

**Summary:**

Despite exponential demand growth in India's restaurant industry—driven by urban nuclear families, changing eating habits, and platforms like Zomato and Swiggy—supply from new formal entrants remains stifled by a burdensome 'license raj'. Aspiring restaurateurs must secure at least seven mandatory licenses: Food Safety (FSSAI), Eating House, Health, Shops and Establishment, Environmental Clearance, Signage, and Fire Safety, often requiring up to 57 documents in Delhi alone, coordination across departments like water, electricity, and fire, and costs of 18,000 to 200,000 rupees excluding bribes. Even 'digital' processes like FSSAI demand physical submissions. This regulatory thicket pushes most into the unorganized sector: of 1.5 million eateries, only 3,000 were organized as of 2017. From a classical-liberal lens, the author lambasts government as a permit-giver deterring entrepreneurship, urging it to dismantle these trade barriers for a fair, efficient market while retaining essential health and fire checks without bureaucratic excess.

**Key points:**

- India's restaurant sector has 1.5 million eateries but only 3,000 organized due to licensing barriers (2017 data).
- At least seven licenses are mandatory, requiring up to 57 documents in Delhi and costs of 18,000-200,000 rupees excluding bribes.
- Bureaucratic processes persist despite digital initiatives, involving multiple government departments and physical submissions.
- Government must eliminate the license raj to enable ease of doing business and foster efficient markets, keeping only vital safety checks.

**By Aastha Narang**

* * *

Have you ever thought of opening your own restaurant? Do you sometimes wonder “Wow! These eateries earn a lot” and then wished to start one of your own? Do you find yourself doing the math of the daily earnings of the restaurants? If the answer to any one of these is yes, you are in the right place.

The old saying, “all that glitters is not gold” is aptly applicable to the restaurant business. The restaurant industry in the last decade has experienced exceptional growth. The demand for eating out or ordering in has risen exponentially with the change in eating and cooking patterns of the urban Indians and rise of the nuclear families. In addition, online delivery services like Zomato, Swiggy, Food Panda, etc. have further added to the demand. While there is an indefinite increase on the demand side, the supply of new restaurateurs still remains limited given the regulatory barriers put in place by the government.

A potential restauranteur ideally figures out the type of restaurant to open, its ambience, menu, location, investment sources, and the marketing plan. There is a long list of more such things an entrepreneur might want to plan for. However, none of these matter if first and foremost the restaurateur is not prepared to apply for dozens of licenses and permits that are needed.

One has to acquire licenses from the government to run a restaurant business in India. The rules are different in every locality. There is no specific limit on the number of documents that might be required and the time needed to get them. A minimum of seven licenses are definitely needed, they are:

1\. Food Safety License

A necessity for all restaurants, this is the primary and the most important license for setting up a restaurant. Going forward, this license provides every restaurant with a unique 14-digit registration number.

2\. Eating House License

3\. Health License

This is an assurance done by the health department to ensure no apprehensions regarding health concerns at the restaurant.

4\. Shops and Establishment License

This is a city-specific license that is needed to register your restaurant under the Shops and Establishment Act applicable in the locality.

5\. Certificate of Environmental Clearance

6\. Signage License

Even for marketing your restaurant you need to seek permission from the esteemed government through this license. This is a license asking for allowance to use posters and other publicity techniques to reach out to customers.

7\. Fire Safety License

Even though these seven licenses seem not a lot for getting permissions. The catch here is that for every license, you need to have pre-permits and documents ready. Delhi and Mumbai are known to be the easiest cities for opening businesses in terms of getting licenses. But, in Delhi itself, one needs around 57 documents. This also involves multiple coordination with different government departments, water dept, electricity dept, fire safety dept, etc.

Separately, there are Lift Clearance Licenses, Music License and Liquor License which are optional to get. The ‘ease’ of entering this industry isn’t so easy. And that is why more and more owners prefer starting an unorganized sector restaurant than to spend money, time and energy in getting these permits from multiple government offices. [As per 2017 statistics](https://www.smergers.com/industry-watch/indian-restaurant-industry/), the Indian restaurant Industry had more than 1.5 million eateries, out of which only 3000 were in the organized sector.

While most of the world is going digital and our government is also trying to create a ‘digital India’, it is nothing but funny that the restauranteurs have to roam in and out of the government offices for submission of documents and getting these licenses.

The Food License which is obtained by the FSSAI recently moved its operation online. However, it is only the signing up procedure that happens digitally. Later on, the filled online form has to go in hardcopy by the restauranteur to the State Authority. Similar procedures are followed for Eating House License, Shops and Establishment License, etc.

The trade barriers and license *raj* are a menace to the potential restauranteurs. What becomes the cherry on the cake is the cost that is involved. The cost of obtaining these licenses varies, depending on the size of the venture. It can be anywhere between 18,000 to two lakh rupees and that is without ‘baksheesh’.

If the government really wants to promote the ‘ease’ of doing business, it must do away with it acting as a deterrent and permit-giver. This doesn’t promote the presence of a fair and efficient market. Of course, checks on health and fire hazard are advisable, but making it a bureaucratic process is not!

[Read more: Food and Spontaneous Order: Daastan-E-Dilli](https://spontaneousorder.in/food-and-spontaneous-order/)

* * *

**About Aastha Narang**

Aastha Narang is a Young India Fellow and has completed her Post Graduation in Liberal Studies from Ashoka University. She has worked with Member of Parliaments, and, in grassroots of Odisha. She has a keen interest in public policy and resonates a lot with Bhagat Singh's works and writings of his that remain. Inspired by him, she also believes in ending all sorts of exploitation of men by men.

## SO Basically – Episode 08 | Challan Loge ya Jaan!

Original: https://www.spontaneousorder.in/p/so-basically-traffic-challan-loge-ya-jaan

Author: Spontaneous Order

Published: 2019-10-11T11:54:28.000Z

Topics: motor-vehicles-act, traffic-fines, local-governance

> In this episode of SO Basically we discuss the latest amendment to the Motor Vehicles Act. The law has provided for exorbitant fines for traffic offences, is it justifiable? Do you think traffic laws should be made differently? We propose having reasona..

**Summary:**

This short episode teaser from SO Basically critiques the latest amendment to the Motor Vehicles Act for introducing exorbitant fines on traffic offences, questioning their justifiability from a classical-liberal viewpoint that favors proportionate regulation. The authors propose an alternative of reasonable fines determined by local governments, coupled with proper enforcement, emphasizing decentralized decision-making over centralized overreach. It invites viewer comments on reforming traffic laws.

**Key points:**

- The Motor Vehicles Act amendment imposes exorbitant fines for traffic offences, which the episode deems unjustifiable.
- Propose reasonable fines set by local governments instead of national mandates.
- Advocate for proper enforcement of traffic laws to ensure effectiveness.

**By Spontaneous Order**

* * *

In this episode of SO Basically we discuss the [latest amendment to the Motor Vehicles Act](https://www.prsindia.org/billtrack/motor-vehicles-amendment-bill-2019). The law has provided for exorbitant fines for traffic offences, is it justifiable? Do you think traffic laws should be made differently? We propose having reasonable fines decided by the local government and properly enforced. Let us know your thoughts in the comments.

[Click here](https://spontaneousorder.in/tag/so-basically/) for more SO Basically episodes.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: The Limits of State Action

Original: https://www.spontaneousorder.in/p/so-musings-the-limits-of-state-action

Author: Spontaneous Order

Published: 2019-10-11T03:46:06.000Z

Topics: limited-government, economic-nationalization, socialism-critique, indian-liberalism

> The following is an article written by M A Venkata Rao in May 1959 issue of The Indian Libertarian, an independent journal of public affairs. In the article, Prof. Rao emphasises the need to limit state action from acting in the defence of vested intere..

**Summary:**

In this 1959 article, M A Venkata Rao critiques the Indian government's rapid expansion into economic and social spheres under Nehru's socialist policies, portraying it as totalitarian overreach eroding individual liberties. He highlights the 1948 industrial policy reserving key sectors like steel, shipping, railways, banking, insurance, and mines for the state, extended by the 1956 policy envisioning full socialist control with limited private enterprise under state planning. State incursions include trading in cement, manganese, shoes, food grains nationwide, nationalization of life insurance for Five-Year Plan profits, takeover of seven provincial banks, and threats of cooperative farming to control agriculture and reduce farmers to serfs. Further erosions involve state monopoly on education textbooks, compelled exports, forced savings, and hints of compulsory labor at 12 annas per day. Rao laments intellectual apathy and public conformity, equating socialism with moral tradition. He advocates limiting the state to core functions—law and order, dispute adjudication, vocational regulation, defense, and uniform services like posts and railways—rejecting omni-competence. True democracy requires a class-neutral state as reconciler of interests, urging libertarians to popularize these limits over socialism's false promises.

**Key points:**

- Indian government's 1948 and 1956 industrial policies reserved key industries for state control, paving the way for socialist dominance.
- State expansions into trade, banking nationalizations, and cooperative farming schemes deprive citizens of livelihoods and impose serfdom on farmers.
- Intellectuals must counter socialist trends by clarifying the state's limited role in law, order, defense, and uniform services.
- Libertarian doctrine demands freeing government from vested interests to uphold individual rights and democracy.

**By Spontaneous Order**

* * *

*The following is an article written by M A Venkata Rao in May 1959 issue of [The Indian Libertarian](http://indianliberals.in/periodicals-details?id=28), an independent journal of public affairs. In the article, Prof. Rao emphasises the need to limit state action from acting in the defence of vested interests.*

Today we are letting the elected government of the country have everything their own way and trespass beyond the limits of governmental action blithely, in sphere after sphere of citizens’ legitimate activity. The only effective theories – (of State action, of the objectives of government policy, of the modes of private enterprise to be permitted to citizens, of the interpretation of ·the Constitution and the Fundamental Rights. the degree of official discretion in the execution of the Criminal and Penal Code circumscribing citizens’ freedom etc. –) in actual practice are those enunciated by Ministers in justification of action already taken. The vast volume of experience and guidance available in the classics of democratic government crystallised out of Eur-American experience is largely ignored. The party in power is behaving as if the majority at the polls it has secured twice running in the name of Gandhi and under the glamour of having been instrumental in securing national independence (a doubtful claim) confers on it the right and power to do everything without let or hindrance. It has assumed the notion of Omni-competence for government which is but another name for totalitarianism. The vast body of intellectuals (so-called) in the professional vocations in journalism and in the teaching line are making no contribution worth the name to clarify the issues implicit in the relations between government and the citizen under modern conditions of extreme complexity of social organisation and under conditions natural to dependent nations for long under foreign rule, struggling to establish democratic usages institutions and precedents.

THE APATHY OF THE “INTELLECTUALS”

The trend all over the globe today is towards collectivism of which the chief ingredient is socialism (and communism). India under Nehru has definitely adopted this trend, as if it were the most natural thing in the world, and as if it were the most beneficent philosophy for the state and society to adopt. The general public, without the stimulating influence of rational criticism and discussion of the principles involved (in club and office, platform and newspaper at least to the extent necessary), are not aware of the danger implicit in spontaneous and facile conformity to official views and ways. The present writer was amused and disturbed the other day when an old friend–a very intelligent and experienced teacher of long standing–said, as if it were the most natural thing in the world that “after all, our traditional ethics in the *sastras* and epics also taught socialism in practical effect–exhorting us to observe *dharma* or to do good to society. He equated the welfare state and socialism with moral tradition and behests to do good! No wonder that the ordinary man takes it for granted that the government is *Ma and Bap in one and is entitled to enter every sphere of private life in the name of doing public good!*

It is worthwhile reminding ourselves how large a field has already been pre-empted for state activity in the last few years.

QUICK AND RAP1D INROADS

Even as early as 1948, the industrial policy statement clearly laid down that the State reserved to itself all key lines of economic production and management–steel and iron, shipping, transport, railways, air commumcat1ons, banking, insurance, mines etc. In accordance with this policy, extended in the policy statement of 1956, which adumbrates openly and challengingly a full socialist organisation of public affairs covering the whole of the economy, leave by mercy, a certain limited sphere for private enterprise, which is also to function within the limits of overall State planning.

Next came the entry of the State into Trade–foreign and domestic–under the plea of dealing with, totalitarian States. But today we find it spreading its tentacles in trade after trade such as cement and manganese and shoes and exhibiting the all too familiar phenomenon of overcharging, extravagance and waste. *The sin lies not so much in inefficiency of dealing as in depriving the public of their natural and traditional modes of earning their living.*

The socialist inspiration of the policy soon came to be a cover for the profit motive. Life insurance was annexed for the public sector with scarcely concealed motives of earning profit to feed the grandiose Five-Year Plans!

The sudden and unprepared direction given by the Prime Minister, at a meeting of the National Development Council, to Chief Ministers of States to put in hand immediately a scheme of State Trading in Food Grains, covering the whole country from the Himalayas to the four seas is a peak example of the totalitarian manner in which our new democracy has started to function.

THE LANGUAGE OF THE FUEHRER

Next we see the startling suddenness in which seven provincial Banks are being taken over to Central Union Ownership. They were being controlled, along with all other banks, by the Reserve Bank without ownership but it was not deemed sufficient, apparently. Power lust on the part of Government is progressing with seven league boots in our midst!

The remaining private banks will, no doubt, be annexed before long in the same abrupt manner regardless of the criticism that may be expressed by industrial and commercial circles.

The growing intolerance towards the private sector shows itself frequently in the utterances of the Prime Minister who hints at forthcoming moved towards socialism as soon as the public seem to have digested one set of invasions of public rights.

Mr. Lal Bahadur Sastry warned industrialists the other day *not to agitate* for their so-called rights of private enterprise. He reminded them of the hostility of the general public towards them as a class! This is intimidation and indicates the rapid change of attitude in ministerial ranks towards totalitarian power which socialism confers on them by right of Marxist theory and the model of Soviet Russia. The theory, under whose flag Soviet Russia has grown, so fast to the position of a world power rivalling the United States, cannot be wrong! This seems to be now the mood of the Congress chota bosses under their leader Pandit Jawaharlal Nehru.

The Prime Minister himself let out the thought that the co-operative method should be applied some day as part of socialism to big industry as well! The self-employing class investing capital of its own and affording employment to labour (of brawn and brain) is therefore to be jettisoned some day. It may come sooner than anticipated.

HOLDING THE CITIZENS TO RANS0ME

Matching these incursions in industry and commerce, we have the daring and calamitous policy of throwing the entire field of agriculture throughout the vast country *into the single mould of co-operative farming.*

The socialist secret to this move is to capture the harvest from the hands of individual farmers. This will enable the State to give agriculturists the bare minimum of share in the crops and to maximise the share of the government, which will go to feed planning. This will facilitate the purchase of machinery and know-how from foreigners without vexatious foreign exchange complications. The system of co-operative farms (called collective farms or production co-operatives in communist countries) *is meant to confer freedom of food and power on the government and not on the farmer. The motive is both economic and political.* With the people’s food in their hands, government will have the whip-hand on the lives and labour of the agricultural population. All independent farmers will have been reduced to the position of hired labourers–whose conditions of work and wages will be determined by the Government.

Socialism prides itself in liquidating feudalism. But it has the notorious distinction of putting in its place a new system of serfdom more onerous than the old one under the feudal barons!

The final goal of all these piecemeal moves in our country is becoming clear even to the densest intelligence, if only it is confronted with the facts. Moves are taking place simultaneously in so many fronts that the general public are not aware of the *extent* of the erosion of liberties that has already taken place.

REGIMENTING THE YOUTH

In the field of education. most States have introduced the entirely objectionable policy of monopolising text book trade in all its aspects–getting authors to write, printers to print and booksellers to sell. The State has become the chief publisher or the only textbook publisher. We cannot object to the Communist Government of Kerala adopting the practice when Congress Governments themselves have set the unwholesome example.

The range of compulsion is being extended insidiously. Mr. Lal Bahadur Sastry is threatening exporters that if they do not export enough to earn the foreign exchange required for the Plans, he will introduce compulsion! Government, that is to say, will decree that a certain percentage of industrial production should be sold abroad, irrespective of profit or convenience to the producer.

Another field in which government are threatening compulsion is that of small loans to Government. lf the middle-classes from whom this kind of loan is asked do not give enough *voluntarily*, it is said that Government will institute a system of *forced savings*!

We recall the announcement by Khrushchev last year (or the year before the last) that his government would not repay the loans deducted from the salaries of Soviet wage-earners for the last twenty years–neither principal nor interest! What guarantee is there, at the rate at which socialisation is being forced on the country, that before the term announced for repayment is reached, a similar repudiation will not be made by our Government as well? Socialism justifies such repudiation.

For the cold truth is that socialism claims full control over the labour of all citizens by right of Karl Marx’s doctrine under the plea that it will lead them to the earthly paradise in the next generations.

The Ginger-Group is also whispering that it is high time to make a beginning with *compulsory labour*! Mr. Nanda has said that he has accepted in principle the idea of forcing the idle people in villages (why not in towns and cities, beginning with able-bodied beggars?) to work on public works such as roads and tanks for a minimum wage of 12 annas per day! It is clear that the socialist terminology of referring to human beings as labour commodity is having its natural fruits.

“MARX-IN-KHADI” SPEAKS OUT

The spirit of all these restrictions and invasions of citizens’ rights came out in a flash in a recent speech by the Prime Minister when he let out the idea that “*regimentation of thought is necessary*“, in so many words. If the salt itself loseth its savour, wherewith will it be salted?–is the agonising cry with which thoughtful people heard of this unguarded sally of the Prime Minister–who is regarded fondly as the hope of democracy in all the East! It is clear to all except the wilfully blind that the Prime Minister has let his *socialism* overcome his *democracy*.

What then is the remedy? The remedy consists in a widespread realisation of the primary ideas of democracy as expressed in society and State. The first such idea refers to *the limits of State action*.

People should be taught the original function or the State–its differentia that separates it from other social institutions. The State should go back to its fundamental functions of maintaining law and order within society through the magistracy and the policy, of adjudging the quarrels and mutual invasion of rights by citizens, of keeping each vocation within its limits by preventing it from exploiting others, and of defence against foreign invaders.

The State may perform certain services requiring uniformity and monopoly such as posts and tele· graphs, railways and ordnance.

The socialist idea of making the State sole trader, sole manufacturing, sole transporter, sole healer, sole educator, sole preacher of public morality, etc. etc. should be rendered *unpopular* as destroying individual liberty and democracy in due course. The theory of the omni-competence of the State implied in socialism is accompanied by a number of other assumptions which are equally deleterious and false.

Marxism is committed to the idea of the State as but a system of force used by a class in support of its sole interests. It holds that the liberal democratic State is motived by its interests in the capitalist class.

It holds that therefore there is no use in argument and persuasion with the holders of power even in a democracy! Bourgeois democracy cannot, it is said, by socialists, yield to the working class any essential right but would, rather give up the pretence of democracy and fight as a fascist State!

This conclusion is wrong. It is psychologically possible for a people to uphold the idea of the State as the agent of the *common good of the whole of society*. The State can be regarded as reconciler and regulator of all the conflicting interests of different classes.

For this purpose, absolute impartiality as between the interests of different pressure groups is necessary that the State should be the fountain of justice first and foremost. For this purpose, it should *not identify* itself with any particular class, whether of the rich or of the poor or of the middle-class. The State should be *above party and class, creed and community.*

It is necessary in our country today to clarify the true function of the State which are limited in aim. The freeing of the governmental apparatus from immersion in the defence of vested interests–whether of labour or of capital–is essential for the functioning of democracy and the guarantee of individual rights. It is only libertarian doctrine that upholds such a view of the State and Government. There is great need for convinced lovers of liberty to expound the faith that is in them with reference to the rapidly encroaching tentacles of governmental action and initiate a healthier stream of tendency. This is true service more important than any other so-called constructive work such as *bhoodan*.

*Access the original text **[here](http://indianliberals.in/~_admin/pdflanguage?id=315569493.pdf)**. (page 6)*

*First Published in the Indian Libertarian in May 1959.*

*Other editions of the publication can be accessed at **[Indian Liberals](http://indianliberals.in/)**, an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

[Read more on the Indian liberal tradition.](https://spontaneousorder.in/tag/indian-liberal-tradition/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## In India-China Battle, Trade Matters, Deficits Don’t

Original: https://www.spontaneousorder.in/p/in-india-china-battle-trade-deficits-dont-matter

Author: Spontaneous Order

Published: 2019-10-10T12:49:06.000Z

Topics: free-trade, trade-deficits, india-china-trade, classical-economics

> India’s trade deficits with China have generated a lot of talks lately. Experts have claimed that India is losing its trade battle with China as over 80 percent of two-way trade last year comprised of imports. Pundits also recommend forcing Chinese firm

**Summary:**

India's trade deficit with China, where over 80% of two-way trade last year consisted of imports, is not a sign of losing a trade battle, as basic economics shows trade deficits are immaterial unless foreign reserves are insufficient to cover payments. Sudhanshu Neema argues that deficits mirror everyday win-win exchanges, like buying groceries without selling back to the store, or running surpluses with employers. Analogies to intra-India trade between cities like Indore and Mumbai illustrate that borders are imaginary lines, and deficits bring benefits: cheap Chinese goods save money for Indian consumers, funding domestic consumption or investments; they expand product variety; and facilitate technology and know-how exchange. From a classical-liberal viewpoint, obsessing over trade balances is mercantilist folly, as Adam Smith deemed the doctrine 'absurd' in The Wealth of Nations, and Henry Hazlitt noted emotional muddleheadedness on foreign trade. Policymakers should prioritize unemployment, inflation, and budget deficits over forcing 'Make in India' or export incentives, embracing voluntary trade's mutual gains.

**Key points:**

- Trade deficits matter only if foreign reserves can't cover payments; otherwise, they are harmless accounting units.
- Cheap imports from China save Indian consumers money, boosting domestic spending and investment while providing product variety and technology transfer.
- Mercantilist fixation on bilateral trade balances ignores win-win gains, as seen in everyday personal trades or inter-city exchanges within India.
- Prioritize real economic indicators like unemployment and inflation over reducing trade deficits through forced localization or export subsidies.

**By Sudhanshu Neema**

* * *

India’s trade deficits with China have generated a lot of talks lately. [Experts have claimed](https://theprint.in/opinion/india-losing-trade-battle-with-china-80-of-two-way-business-last-year-were-imports/198868/) that India is losing its trade battle with China as over 80 percent of two-way trade last year comprised of imports. Pundits also recommend forcing Chinese firms to “make in India” or having stronger incentives for exporting to reduce India’s trade deficit with China. However, basic economics tells us that trade deficits or surplus are mostly immaterial. They only matter when a country does not have enough foreign reserves to pay for foreign goods and services.

We run trade deficits and surplus all the time in our daily life without even thinking about them. I run a huge trade deficit with the local grocery store, I only buy from them and sell them nothing. It is not a lost battle for me. I get groceries in return. It is a win-win trade. Similarly, I run a trade surplus with my employers, they buy my services, and I buy nothing from them. Is it a loss to them? Not really. The only problem may arise when either I or my employers are unable to make the payments. So, the balance of ‘payments’ matter, but the balance of trade could be in either direction and still both sides will benefit.

Now, you may argue that trade between countries is different and cannot be compared to trade between people within borders. That is not true. Consider the trade between Indore and Mumbai. The city of Mumbai sells a lot of goods and services to Indore and runs a huge trade surplus while Indore runs large deficits. Are the people of Indore any worse off because of the huge trade deficit? No, because they get a lot of goods and services which are not available in Indore or are costly to produce locally. If the trade deficit between the two cities is beneficial to both cities, why should it be any different between two countries? After all, there is nothing but an imaginary line in between.

When we buy cheap Chinese goods, we save a lot of money. These savings are used for either buying local goods and services or just keeping the money in a bank or financial institution. Either way, they help the Indian economy by increasing domestic consumption or providing capital for new investments. International trade also provides variety for consumers. India’s trade with China has allowed us to have hundreds of more choices when it comes to buying goods. International trade also helps in the exchange of technologies and business know-how which is beneficial in the long-term.

Adam Smith, the father of modern economics, wrote in the Wealth of Nations – “Nothing … can be more absurd than this whole doctrine of the balance of trade.” Indeed, other economic indicators such as the unemployment rate, inflation, budget deficits, etc. matter much more than trade deficits. The negative balance of trade is nothing but a unit of accounting. Henry Hazlitt, author of Economics in One Lesson, skillfully explained that “… the same people who can be clearheaded and sensible when the subject is one of domestic trade can be incredibly emotional and muddleheaded when it becomes one of foreign trade.” Let us not be one of those people.

* * *

**About Sudhanshu Neema**

Sudhanshu is a lawyer and economist working as Manager, Research at the Centre for Civil Society. He served as a Frederic Bastiat Fellow at the Mercatus Center at George Mason University in 2015-16.

## Sharad Joshi on Women’s & Farmer’s Rights

Original: https://www.spontaneousorder.in/p/sharad-joshi-womens-rights

Author: Spontaneous Order

Published: 2019-10-07T12:25:56.000Z

Topics: women-property-rights, farmers-freedoms, schedule-ix, sharad-joshi

> In this monologue, activist Shailaja Laxmikant Deshpande talks about Sharad Joshi’s contribution in advancing women’s property rights. She further highlights his slogan for demanding four basic freedoms for farmers. He asked for “Sita sheti, mazgar

**Summary:**

In a monologue, activist Shailaja Laxmikant Deshpande highlights Sharad Joshi’s classical-liberal contributions to advancing women’s property rights and championing farmers’ freedoms against state overreach. Joshi coined the slogan 'Sita sheti, mazgar sheti, vyapari sheti and niryat sheti,' demanding farming led by women (Sita sheti), freedom for farmers to process agricultural produce (mazgar sheti), liberty to trade commodities (vyapari sheti), and the right to export (niryat sheti). She critiques unjust laws under Schedule IX of the Constitution, which shield them from judicial challenge, perpetuating farmers’ oppression. Inspired by Joshi, Deshpande, a long-time supporter who has fought for over 35 years across Maharashtra, calls for these freedoms to unlock national prosperity. The piece frames Joshi’s activism as a bulwark against pseudo-socialism, promoting individual liberties in agriculture and property to foster genuine economic progress in India.

**Key points:**

- Sharad Joshi advanced women’s property rights and demanded four freedoms for farmers: women-led farming, processing produce, trading commodities, and exporting.
- Schedule IX laws protect unjust agricultural restrictions from court challenges, harming farmers.
- Shailaja Deshpande has fought for farmers’ freedoms in Maharashtra for over 35 years, inspired by Joshi.
- Releasing farmers from state controls is essential for India’s prosperity.

**By Spontaneous Order**

* * *

In this monologue, activist Shailaja Laxmikant Deshpande talks about Sharad Joshi’s contribution in advancing women’s property rights. She further highlights his slogan for demanding four basic freedoms for farmers. He asked for “Sita sheti, mazgar sheti, vyapari sheti and niryat sheti”, meaning farming led by women, freedom for farmers to process agriculture produce, freedom to trade in commodities and the freedom to export. She also highlights the problems faced by farmers due to unjust laws under the Schedule IX of the Constitution which cannot be challenged in a court of law. Inspired by Mr Joshi, she demands freedom for farmers for the prosperity of the nation.

Shailaja Deshpande is one of the prominent and long-time supporters of Sharad Joshi, she has participated in many movements by led by the ex-Parliamentarian. For more than 35 years now, Ms Deshpande has continued the fight for farmers’ freedoms across Maharashtra. Listen to her experiences here and let us know your thoughts in comments.

For more details, please visit:

[http://sharadjoshi.in/](http://sharadjoshi.in/)

[http://indianliberals.in/](<http:// http://indianliberals.in/>)

[Read More: Why Remember Sharad Joshi?](https://spontaneousorder.in/sharad-joshi/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## The Unfinished Liberalisation: Political Economy of Shastri Years

Original: https://www.spontaneousorder.in/p/lal-bahadur-shastri

Author: Spontaneous Order

Published: 2019-10-03T11:45:29.000Z

Topics: economic-reform, green-revolution, political-economy, agriculture-policy

> The promising but short-lived career of significant political actors often makes for interesting what-if scenarios for historians. Certain specific cases would include the assassination of John F Kennedy, the death of Sardar Patel in 1950, the decline o..

**Summary:**

Lal Bahadur Shastri's brief tenure as Prime Minister (1964-1966) marked the start of India's unfinished liberalization, shifting from Nehruvian socialism toward market-oriented pragmatism amid economic crises like food shortages and Third Plan failure. Unlike ideologically rigid socialists, Shastri—shaped by personal poverty and lacking formal planning experience—was open to external expertise, resembling reformer P.V. Narasimha Rao. He curtailed the Planning Commission's centralized power with fixed terms and created the National Development Council for expert input. Prioritizing agriculture over heavy industry for the Fourth Plan, Shastri appointed C. Subramaniam, who drove the Green Revolution through high-yield seeds, price incentives, chemical fertilizers, private sector role, and focused inputs—yielding 5.5% annual wheat growth (1966-77) and food self-sufficiency. The Food Corporation of India initially competed in open markets, per L.K. Jha Committee and World Bank recommendations. Shastri planned currency devaluation and broader liberalization, but his 1966 death enabled Indira Gandhi's leftist reversal. From a classical-liberal view, Shastri proved crises force statist retreats, scripting liberalization's saga cut short.

**Key points:**

- Shastri diminished Planning Commission's dominance by introducing fixed contracts and bypassing it via individual stakeholder meetings and the National Development Council.
- He redirected Fourth Plan toward agriculture, empowering Subramaniam to implement market incentives, HYV seeds, and fertilizers for Green Revolution success.
- FCI was established to compete with private traders in open markets, rejecting price controls and coercion.
- Shastri pursued currency devaluation and liberalization strategy via L.K. Jha, halted only by his sudden death in 1966.
- Leftist critiques ignored technology's scale-neutral benefits to small farmers and risks of aid dependence without productivity gains.

**By Sanjeet Kashyap**

* * *

The promising but short-lived career of significant political actors often makes for interesting what-if scenarios for historians. Certain specific cases would include the assassination of John F Kennedy, the death of Sardar Patel in 1950, the decline of Swatantra Party after Rajaji, and short-lived Prime Ministerial tenure of Lal Bahadur Shastri. In Shastri’s case, he himself had accurately predicted the what-if scenario in a [conversation](https://www.amazon.in/Beyond-Lines-Autobiography-K-Nayar/dp/8174369104) with the journalist Kuldip Nayar. In response to Nayar’s “After Shastri Who?” question, Shastri had responded, “If I was to die within one or two years, your prime minister would be Indira Gandhi, but if I live three or four years, Y.B. Chavan will be the prime minister.” A further attempt at such counterfactuals has been made by the historian Ramachandra Guha. He has [argued](https://www.youtube.com/watch?v=zVQ_HbuO-_E/) that had Shastri continued as India’s Prime Minister, the economic history of India would have turned out differently. Shastri’s speeches in 1965 were signalling a shift from the Nehruvian socialist agenda.

Shastri was [no socialist](https://penguin.co.in/book/history/the-age-of-awakening/) despite his 1964 proclamation in Parliament that “socialism is our objective.” Himself a poor father who lost his girl child to an illness, his beliefs informing the policy approach stemmed from personal empathy with the poor. In this sense, he wasn’t ideologically wedded to socialism like Nehru. On the contrary, he was pragmatic like Nehru’s daughter, Indira Gandhi. Shastri’s pragmatism in economic matters meant a move away from socialism to market. Indira’s political pragmatism, in contrast, made her an ally of the left. Also, the lack of any formal economic training or prior experience of planning made Shastri more amenable to the outside opinion. In this and more, Shastri resembled the other reformer Prime Minister, P V Narasimha Rao.

Like Rao, Shastri was also no reformer by conviction. He was responding primarily to the worsened economic situation and as is the case of the Indian political economy, reforms accompanied every crisis of statist socialism. It is in this way that both Shastri and Rao scripted liberalization saga, the latter more successfully than the former. In line with his grounded upbringing, Shastri had a [Gandhian approach](https://penguin.co.in/book/history/the-age-of-awakening/) towards economics with a focus on small and quick projects with less expenditure. But like Rao, when confronted with the crisis, he turned a reformer. In Shastri’s political economy, food shortage would be tackled by shifting the investment to agriculture; the solution to black-market lay in incentives, not coercion; inefficiency of PSUs entailed shift to the private sector; and import substitute needed substitution by export promotion.

By the time Shastri took over as PM, the failure of the third Five-Year Plan was clear. Growth in national income barely kept pace with population growth, the prices rose substantially, and food grain became scarce. The very brief tenure of Shastri would see him tackling the food grain crisis and in the process, sowing the seeds of the Green Revolution. But before that came the dwarfing of the Planning Commission. Initially conceived as an advisory body, the imperative of Nehruvian statism had turned the Commission into a centralized institution. Earlier, Nehru’s Finance Minister John Mathai had [resigned in protest](https://penguin.co.in/book/history/the-age-of-awakening/) against the formation of the Commission. Mathai saw it as an extra-constitutional body turning into a parallel cabinet. Shastri changed the appointment scheme for the Commission based on indefinite tenure to fixed contracts. He also instituted a parallel body called National Development Council in 1964 to get policy insight from experts, economists and scientists included. Also, unlike Nehru who deliberated with stakeholders in the Planning Commission meetings, Shastri would meet them on an individual basis.

In response to economic stagnation, Shastri was clearly doing away with many of the Nehruvian-era practices. Nowhere was it clearer than the shift in priority for the fourth Five-Year Plan. Shastri wanted to promote agrarian growth in contrast to the earlier focus on heavy industries. After a surprising night [phone call](http://www.alephbookcompany.com/book/accidental-india/) from Shastri, the technocrat minister C Subramaniam was brought to the Food and Agriculture Ministry. Subramaniam would go on to promote the private sector, technological innovation, and foreign investment amidst a hostile leftist consensus. The food grain crisis soon saw the playing out of the ideological divide. The PM and cabinet blamed hoarding for the crisis and by extension, vouched for price control and state trading in food grains. Subramaniam proposed the market-oriented approach to increase production. He favoured the price incentive to private actors and the usage of chemical fertilizers as policy measures. Subsequently, the L K Jha Committee was established to look into the matter. It endorsed Subramaniam’s measures. Based on the committee recommendations, Subramaniam went on to set up the Food Corporation of India in 1964. FCI, at that time, wasn’t dependent on price control and compulsory procurement but competed with private traders in the open market.

The World Bank [report](http://documents.worldbank.org/curated/en/726021468050068737/Main-report) by Bernard Bell based on his September 1964 visit to India further provided the impetus for the reform agenda. After the 1965 India-Pakistan war, Subramaniam came up with a three-pronged plan to improve the agrarian economy. He advocated the use of High Yielding Variety seeds, price incentives to farmers and focused use of improved farming inputs into irrigated areas. Subramaniam’s capitalist blueprint and [maverick technocracy](http://www.alephbookcompany.com/book/accidental-india/) would lead to Green Revolution, making India self-sufficient in food grains.

This shift from social to technological reform in agriculture, however, didn’t go down well with the leftists and bureaucrats. Subramaniam was accused of pushing the agenda of market-liberal C Rajagopalachari presumably because he was part of the Rajaji’s Madras cabinet in 1952. The opposition to capitalism in agriculture was also based on the argument that technological innovation would only benefit big farmers. The leftist critique of capitalist farming, however, didn’t contend with the [scale-neutral effect](http://www.alephbookcompany.com/book/accidental-india/) of technology, benefitting both small and large farmers in proportion to their holdings. The usual charge of “sell-out to the US” was also hurled because of the involvement of both the Ford and Rockefeller foundation. The leftist critique of the Green Revolution ironically didn’t realize the continued dependence on humiliating foreign aid entailing in absence of productivity improvement due to technological innovation. The Green Revolution brought by modern seeds verities and technical innovations enabled the sustained annual growth rate of 5.5 percent in wheat production during 1966-77.

In line with the World Bank report, Shastri also contemplated devaluation of the currency to promote exports. His Finance Minister T T Krishnamachari was staunchly opposed to the move but had to resign due to corruption charges. According to B K Nehru, Subramaniam and other ministers had convinced Shastri to go for the devaluation move. Later in 1966, Indira Gandhi devalued the currency only to find that the promised non-project aid from IMF didn’t materialize. I G Patel called it ‘the great betrayal’. Shastri’s reformist credential further gets bolstered by the fact that he entrusted the principal secretary L K Jha to chart out a strategy for liberalization. Gurcharan Das has mentioned in [India Unbound](https://penguin.co.in/book/non-fiction/india-unbound/) the news coverage of the upcoming liberalization move in early December 1965. The veracity of the story was confirmed by L K Jha to Ashok Nehru. The liberalisation plan, however, didn’t come to fruition due to the sudden death of Shastri in Tashkent. The rest, as they say, is history which basically amounts to India waiting for the next reformer till 1991.

Author’s Note: I would like to acknowledge the contribution of Amit Kapoor and Chirag Yadav, author of the book *The Age of Awakening*.  Kapoor and Yadav have called Shastri “the first reformer”. This piece, in part, draws upon their analysis of Shastri years.

*Indian Liberals is an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

*Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th century.*

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## Hriday Nath Kunzru – The Liberal Institution Builder

Original: https://www.spontaneousorder.in/p/hriday-nath-kunzru

Author: Spontaneous Order

Published: 2019-10-01T13:30:29.000Z

Topics: indian-liberals, institution-building, civil-society, international-studies

> The trajectory of liberal nationalism in colonial India is characterized by an early prominence followed by a steady marginalization in the nationalist discourse. The moderate phase of the Indian National Congress reflects a strong liberal tradition whi..

**Summary:**

Hriday Nath Kunzru exemplifies the overlooked liberal contributors to post-1947 Indian nation-building, marginalized in historical narratives dominated by Gandhian, socialist, and now Hindu right figures amid rising social majoritarianism and economic statism. A protégé of Gokhale, Kunzru joined the Servants of India Society in 1909, studied at LSE under Marshall and Keynes, and split from Congress in 1918 to join the Indian National Liberal Federation. He served in legislative bodies from 1921 to 1964, including the Constituent Assembly and Rajya Sabha, bolstering democratic traditions through skilled interventions. Kunzru's core liberal legacy lies in institution-building: he founded the Indian Council of World Affairs (ICWA) in 1943, serving as president from 1949-1976 and fundraising privately for Sapru House; and established the Indian School of International Studies (ISIS) in 1955, later merged into JNU's School of International Studies. He insisted on civil society independence, rejecting state funding—'if the public cannot support the institution, I would prefer it to be closed down'—and upheld intellectual freedom, individual liberty, press freedom, private property, and minimal government. ICWA hosted the 1947 Asian Relations Conference, underscoring his impact, though his death in 1978 led to its decline, highlighting liberals' fragile institutional legacies.

**Key points:**

- Kunzru founded ICWA in 1943 and led it as president from 1949-1976, privately funding Sapru House without state aid.
- He established ISIS in 1955 to foster independent Indian scholarship in international affairs, which became JNU's School of International Studies.
- Kunzru rejected government funding for civil society, prioritizing public support and intellectual autonomy over state dependence.
- Served in Indian legislatures from 1921-1964, advocating constitutionalism, self-government within the Commonwealth, and indigenization of services.
- Embodied classical-liberal values like minimal state power, individual liberty, and private property in policy judgments.

**By Sanjeet Kashyap**

* * *

The trajectory of liberal nationalism in colonial India is characterized by an early prominence followed by a steady marginalization in the nationalist discourse. The moderate phase of the Indian National Congress reflects a strong liberal tradition which is also well-recognized.

However, the liberal contribution to the nation-building project after 1947 remains sketchily documented. The liberal “makers of modern India” seem to have been overshadowed by their equally-worthy Gandhian, socialist and democrat compatriots in the historical narrative. As even the icons of Hindu right are being revived, the liberal figures remain disowned in an increasingly illiberal India characterized by social majoritarianism and economic statism.

Hriday Nath Kunzru embodies this typical caricature of the “ignored Indian liberal”, dedicated to the task of nation-building in its early years. Kunzru’s public life though goes back to the anti-colonial movement. His illustrious career began with his request to join the Servants of India Society when Gopal Krishna Gokhale visited Allahabad in 1908. The dedicated and tough public servant that Gokhale was, he cross-questioned Kunzru in Calcutta and made him write an essay on Madras Congress. Not until 1909 did Kunzru was admitted into the society.

In 1911, Gokhale sent him to the London School of Economics on the behest of Gandhi’s friend Sheldon Pollack. At LSE, Kunzru was taught by the likes of Alfred Marshall and Sir John Maynard Keynes. Back in India, he worked for the Indian National Congress until came the liberal split of 1918.

He would go on to join the Indian National Liberal Federation along with Tej Bahadur Sapru, V S Srinivasa Sastri and C Y Chintamani. In upcoming decades, Kunzru emerged as one of the few major liberal voices in both the legislature and public domain as the nationalist movement swept aside the liberal agenda. Alike other fellow liberals, he advocated constitutional means and was against non-cooperation, he demanded self-government within the then Commonwealth and fought for the indigenization of military and bureaucracy.    

A major part of Kunzru’s public career was dedicated to legislative participation. He was a member successively of the Legislative Council of the United Provinces (1921-26), the Central Legislative Assembly (1926-30), the Council of State (1936), the Constituent Assembly (1946-50), the Provisional Parliament (1950-52), and finally the Rajya Sabha (1952-64). As a quintessential parliamentarian, he fostered the democratic decision-making tradition with his impeccable debating skills and intelligent interventions. The roots of Indian democracy in the Nehru years were, in no small measure, strengthened by the labour of the likes of Kunzru.

Kunzru’s more significant contribution to Indian democracy though lays elsewhere in his role as an institution builder. It is also here that his liberal conviction very clearly comes into play. On the state funding of civil society institutions, he was clear that “if the public cannot support the institution, I would prefer it to be closed down, rather than go to the government for help!” His wide-ranging associations with civil society organizations included his stint as the national commissioner of the Bharat Scouts and Guides; president of the Film Cultural Association of Delhi, president of Uttar Pradesh Harijan Sevak Sangh, executive committee member of the Bharatiya Adimjati Sevak Sangh, and connection with the Children’s Film Society of India. He also founded two pioneering Indian institutions in the domain of International Studies – the Indian Council of World Affairs (ICWA) and Indian School of International Studies (ISIS, which now is the School of International Studies at Jawaharlal Nehru University).

His adherence to liberal values was evident in the way he handled the functioning of these institutions. Former JNU professor and a close friend of Kunzru, Prof M S Rajan [wrote](https://www.jstor.org/stable/pdf/45070851.pdf?seq=1#page_scan_tab_contents) that he would never interfere in the intellectual freedom of the educational and research institutions he headed. Rajan also attested to the liberal political values embodied by Kunzru including individual liberty, freedom of the Press and association, the sanctity of private property, and a multi-party political system.

Kunzru argued that the best government was the one that governed the least. He advocated for the limitation of state power in favour of the freedom of citizens. As a liberal, he made the distinction between the good intention and outcome of state policy or action. His criterion for the judgment of an individual, policy, or action was very clearly rooted in liberal philosophy, writes M S Rajan.

Kunzru’s pioneering legacy is thriving today in the Sapru House and Jawaharlal Nehru University which house the institutions that he built from scratch. He helped found ICWA in 1943 and remained its President from 1949 to 1976. Kunzru travelled around the country to collect funds for the construction of Sapru House building. Prof B Vivekanandan [recounts](https://journals.sagepub.com/doi/abs/10.1177/002088171104700403) the event in his tribute to M S Rajan who was also part of the initiative. Prof Rajan brought skilled artisans from Makrana (Rajasthan) who were persuaded by Kunzru to design the building without charging wages. The publicly funded project thus came to fruition. ICWA would later go on to host the famous Asian Relations Conference in 1947. The decline of ICWA after the death of Kunzru in 1978 only underscores his role in fostering institutions with care.

His other initiative in the Indian study of international affairs came in the form of the Indian School of International Studies. Established in 1955 by ICWA and affiliated to Delhi University, the School was meant to create an Indian intellectual tradition in international affairs. The project also had the support of Pandit Nehru who sought foreign policy scholars to steer India in international affairs. In 1961, ISIS became an autonomous deemed university and pioneered area studies in India. Though, it also became involved in [controversy](https://journals.sagepub.com/doi/abs/10.1177/002088171104700403) in the 1960s over its refusal to accept Hindi imposition. With the formation of JNU in 1969, the government sought to merge ISIS with the newly formed university. Kunzru, though opposed to the move, allowed himself to be persuaded by the faculty and students. The institution came to be known as the School of International Studies (SIS). Kunzru’s association with the school continued as he would consult faculty members in preparation for his speeches and debates.

SIS annually conducts the prestigious [H N Kunzru Memorial Lecture](https://www.jnu.ac.in/content/sis-organising-pandit-hridya-nath-kunzru-memorial-lecture-series/) in tribute to its great liberal founding father. This is perhaps, unfortunately, what remains the only living memory of him.

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## Making Farmers Cry, Government Bans Onion Exports

Original: https://www.spontaneousorder.in/p/onion-export-ban

Author: Spontaneous Order

Published: 2019-10-01T10:12:39.000Z

Topics: agriculture, price-controls, export-bans, market-reform

> In an attempt to control the spiralling onion prices the government banned the export of all varieties of onions on September 29 with immediate effect. The government also imposed limits on the storage of onions. It will be a crime now to store more tha..

**Summary:**

The Indian government banned all onion exports on September 29 and imposed a 100kg storage limit for retail traders to curb rising domestic prices, following a minimum export price of $850 per tonne set weeks earlier. This intervention contradicts the promise to double farmers' incomes by 2022, as it prevents farmers from selling at higher market prices amid supply shortages from monsoon rains. Such knee-jerk measures form a recurring cycle: prices rise, exports are banned and storage regulated, prices stabilize with new supply, farmers seek aid, restrictions ease, and the pattern repeats. From the classical-liberal view, excessive government interference—from soil tilling to sales—undermines farmers at every step. The author argues for removing cumbersome regulations by the Warehousing Development and Regulatory Authority, including mandatory electronic negotiable warehouse receipts under 2017 rules, which raise costs and deter new storage facilities. Easing these would enable farmers to store excess onions during gluts and release them during shortages, stabilizing prices via market mechanisms and boosting incomes. Ultimately, to double farm incomes, governments must exit the cycle and let markets work for farmers.

**Key points:**

- Government banned onion exports on September 29 and limited retail storage to 100kg to control prices, harming farmers' earnings.
- Recurring cycle of export bans and storage controls when onion prices rise due to monsoon shortages, followed by easing and farmer aid.
- Cumbersome Warehousing Development and Regulatory Authority rules, including 2017 electronic receipt mandates, prevent farmers from building modern storage.
- Ease storage regulations to let farmers store excess onions and sell at higher prices, stabilizing supply and prices through markets.
- Excessive interventions throughout farming must end to allow markets to double farm incomes.

**By Sudhanshu Neema**

* * *

In an attempt to control the spiralling onion prices the government [banned the export of all varieties of onions](https://economictimes.indiatimes.com/news/politics-and-nation/government-bans-onion-exports-with-immediate-effect/articleshow/71359514.cms) on September 29 with immediate effect. The government also imposed limits on the storage of onions. It will be a crime now to store more than 100 kilograms of onions for any retail trader. A few weeks ago, the government also set the minimum export price of onion at $850 per tonne (about ₹60 per kilogram), to discourage foreign buyers of Indian onions.

The immediate policy measures were undertaken to control the price of onions by increasing the domestic supply. One wonders why instead of focusing on the economy, the government would put all its energy in commanding the price of the humble onion. Another important question to ponder upon is why would the government work against the farmers? Given that it has promised to [double agricultural income by 2022](https://pib.gov.in/Pressreleaseshare.aspx?PRID=1539485), one would think the government would allow farmers to sell their produce at the best prices.

This is not the first time the government has tried to control the price of the bulb. In fact, such knee-jerk reactions have become a cycle all too familiar to us. Onion prices go up towards the end of the monsoon season due to a supply shortage, often led by excessive rains in onion-growing parts. The price increases and the government bans exports and regulates the storage, transportation, and pricing to please voters. Over the next few weeks, prices stabilise. New supplies come to the market, and the prices fall again. Then farmers ask for government support and assistance. Afterward, the government eases restrictions and we wait for another season of the same cycle.

What is needed is for the government to get out of this cycle and remove restrictions on modern storage facilities, right now the process of opening a warehouse is too cumbersome. Numerous regulations by the Warehousing Development and Regulatory Authority increase the cost of opening a new warehouse. They also have to compulsorily issue electronic receipts that could be traded on the markets as per a [2017 regulation](https://wdra.gov.in/documents/32110/35829/%282.%29+Warehousing+Development+and+Regulatory+Authority+%28Electronic+Negotiable+Warehouse+Receipts%29+Regulations%2C+2017..pdf/750007e0-ec3a-8d60-4ef4-0d1fba0180bc). Obviously, farmers are unable to open and operate a storage facility in such a scenario.

If these restrictions are eased, farmers will be able to store onions when they are in excess supplies and then sell when prices are higher. This way, before the prices go through the roof, there will be a sufficient supply of the commodity to keep them in check.

The latest ban is another move by the government against the farmers. In any activity related to farming, the government intervenes excessively, making things worse. From tilling the soil to selling the produce, farmers have to go through dozens of interventions. And ultimately, when by sheer luck farmers get an opportunity to earn a little due to high prices of a commodity, the government puts all its energy to make sure that they cannot profit.

If we really want to double farm incomes, we must learn to let the markets work for farmers.

* * *

**About Sudhanshu Neema**

Sudhanshu is a lawyer and economist working as Manager, Research at the Centre for Civil Society. He served as a Frederic Bastiat Fellow at the Mercatus Center at George Mason University in 2015-16.

## SO Musings: Marx and Theory of Value

Original: https://www.spontaneousorder.in/p/so-musings-marx-and-theory-of-value

Author: Spontaneous Order

Published: 2019-09-27T12:00:05.000Z

Topics: marxism, labour-theory-of-value, capitalism-defence, indian-socialism

> The following is an article written by Prof. G N Lawande in November 1962 issue of The Indian Libertarian, an independent journal of public affairs. In the article, Prof. Lawande provides a critical analysis of Marx’s labour theory of value. At present

**Summary:**

Prof. G.N. Lawande's 1962 article delivers a classical-liberal critique of Karl Marx's labour theory of value, the cornerstone of his surplus-value theory portraying capitalism as class exploitation. Marx defines commodities' exchange value as deriving solely from abstract human labour, excluding natural gifts with exchange value and ignoring scarcity of non-labour factors like machinery. Lawande deems this arbitrary, noting real market prices are set by demand/supply and full production costs of scarce inputs, not labour alone. Marx inconsistently resorts to solvent social demand for 'socially necessary labour' under normal conditions, average skill, and machinery, undermining his theory. Critics like Böhm-Bawerk, Pareto, and Joan Robinson highlight fatal contradictions with actual prices. Lawande argues the theory is a biased 'rigmarole' unnecessary for anti-capitalist claims, falsified by capitalist prosperity. India's adoption of a 'socialist pattern of society' in Five-Year Plans, inspired by Marx, expanded the public sector at private sector's cost. He concludes economic progress requires reversing this policy to empower private enterprise, rejecting Marxian myths.

**Key points:**

- Marx's labour theory of value arbitrarily attributes exchange value solely to abstract human labour, ignoring scarcity and non-labour production factors.
- Actual market prices reflect demand/supply and full production costs, not labour quantities, revealing the theory's fallacy.
- Marx inconsistently invokes market demand for defining socially necessary labour, endangering his exploitation narrative.
- India's socialist policies, rooted in flawed Marxian analysis, hinder progress by favoring public over private sector.
- Reverse socialist expansion to unleash private sector for accelerated economic development.

**By Spontaneous Order**

* * *

The following is an article written by **Prof. G N Lawande** in November 1962 issue of The Indian Libertarian, an independent journal of public affairs. In the article, Prof. Lawande provides a critical analysis of Marx’s labour theory of value.

At present that there are many in our country who believe that capitalism has failed to deliver the goods and the only remedy to overcome the evils of capitalism is to adopt socialism. On the basis of this assumption, our government has adopted a socialist pattern of society as one of the objectives of our Five-Year Plans. Karl Marx was the first economist to give us a systematic analysis of socialism. There were other economists but they were called Utopian Socialists. Marx was the most powerful of all critics of capitalism. At present many have accepted Marxism as the gospel of truth and have embraced it as a religion, “which promises paradise on this side of the grave”. Marx’s critique of capitalism is based on the idea that there is no harmony of interests as believed by classical economists. Marx “conceives of economic life in terms of conflict of interests between owners of property who do not work and workers who own no property”. He wanted to show that the capitalist process was the process of exploitation of one class by the other and that the economic consequence of this exploitation will ultimately destroy capitalism. The economic theory which explains this process of exploitation is the theory of surplus-value which in tum is based upon the labour theory of value.

Marx begins his labour theory of value with the analysis of a commodity. In order to maximise his profit capitalist is spending money on labour, transforms labour into commodities and sells these commodities for a larger amount of money. This can be expressed as M—C—M’. The difference between M and M’ Is the surplus-value, the result of exploitation. According to Marx, this kind of exploitation is attributable to the variable capital i.e. the wages of labour because the constant capital i.e. machinery does not undergo any quantitative alteration of value.

Marx defines a commodity as an article which has utility and is the result of human labour and that it is produced for sale in the market. One can easily see that Marx excludes gifts of nature which have exchange value. Marx argues that because as use-values commodities are of different qualities the exchange value cannot contain ‘”an atom of use-value”. From this, he has drawn the uncalled-for conclusion “If then we leave out of consideration the use-value of commodities, they have only one common property left, that of being products of labour”. It must be pointed out here that there are certain other qualities which are common to commodities, namely that they are scarce and secondly that they are the products of the scarce factors of production and not mercenarily of labour alone. Marx bad Ignored the simple fact that commodities which were not the products of human labour but which have exchange value and this he did so because he wanted to support the labour theory of value of Ricardo in order to prove exploitation in capitalism. In the words of John Robinson, “Marx wanted to keep insistently before the mind of the reader a picture of the capitalist process as a system of piracy, preying upon the very life of the workers.” Marx did not realise the fact that the labour theory of value was unnecessary to support the conviction that capitalism is mainly a system of exploitation. It is in the words of Lerner “an unfounded dogma that, unless we go in for all this rigmarole about value, we cannot say that capitalists get part of the social product without working”. “Marx’s assertion that the exchange value of a commodity is determined by the only property common to all i.e. abstract human labour, is entirely arbitrary. Its fallacy is revealed by even the most superficial observation of how prices are actually determined on the real markets of the capitalist economy. Nowhere do commodities exchange according to the amount of abstract human labour contained in them. The exchange value of commodities is determined by conditions of demand and supply and, in equilibrium by production costs provided that the commodities in question are the result of production. Production costs do not consist of wages alone; they consist of anything which is needed, is scarce and commands a price. Labour itself is a factor supplied in an infinite variety of qualities reducible to abstract human labour only by market forces”. Though Marx Insisted upon the labour theory of value in order to prove the exploitation process in capitalism yet he returns to market conditions of demand and supply when his labour theory does not offer him any solution. He admits: ”that in order that a commodity may be sold at its market value, that is to say, in proportion to the necessary social labour contained in it, the total quantity of social labour devoted to that total mass of this kind of commodities must correspond to the quantity of the social demand for them meaning the solvent social demand.” From this, it is quite clear that Marx throws his labour theory to the wind when he does not derive any solution from it.

While elaborating his labour theory of value to determine the exchange value of commodities Marx points out that only socially necessary labour should be counted. To find out the socially necessary labour time the following points should be kept in mind, namely, the normal conditions must be given. Labour must be supported by machinery. Secondly, the product must be in demand. Labour cannot be called socially necessary labour unless the product is demanded by the people. Thirdly labour time includes the past as well as present labour. Lastly socially necessary labour time is the time spent by labour possessing the average skill and working with average intensity. Skilled labour should be reduced to average labour.

Marx admits that there must be social demand for the product in order to define socially necessary labour. If the supply of a commodity is greater than demand for it then it cannot be sold at a price which corresponds to the socially necessary labour time and the production must be contracted and on the other, if the exchange value of commodity exceeds the value of the labour contained in it must be expanded. Marx did not pursue this matter further because It endangers his labour theory of value. “The exchange value of labour must not be derived from the exchange value of its product if the labour theory of value and the theory of surplus-value are to be maintained. As soon as the relative scarcity of the product and of the factors of production are admitted as determining factors the whole labour theory of value becomes superfluous and is exposed as an excessively weak foundation of the theory of capitalist development. “Some critics have pointed out that the prices do not in capitalist economy correspond with Marxian values which Marx was mainly concerned to analyse. They find a contradiction in the analysis. To Bohm Baerk and Pareto this contradiction is fatal to the whole Marxian theory since it appears to them that Marx’s solution Is logically unsound. To Bernstein, the contradiction reduces the Marxian concept of value to nothing more than a reality but only as a theory of natural right or a mere standard of comparing one type of society to another. To Joan Robinson, the contradiction reduces the theory to mystification and metaphysics.

Though the labour theory of value as analysed by Marx does not explain existing price relations in capitalism yet Marx maintains that his theory can be applied to explain exchange values in planned economy when he says, “only when production will be under the conscious and prearranged control of society, will society establish a direct relation between the quantity of social labour-time employed in the production of definite articles and the quantity of demand for them. It may be for this cryptic remark that our government has adopted a socialist pattern of society as one of the objectives of our plans, which has resulted in the expansion of public sector at the cost of the private sector. Our economic progress cannot be accelerated unless we reverse this policy and give a proper role to the private sector in the economic development of our country. Our progress cannot be based on Marxian analysis which is a myth, and not a reality. Marx conceived his theory of surplus-value before he worked out his theory.” He knew the result he wished to obtain and must obtain, and so he twisted and manipulated his patent ideas and logical premises with admirable skill and subtlety until they actually yielded the desired result in seemingly respectable syllogistic form”. His theory of surplus-value is not the result of unbiased research. Marx knew what he wanted to prove. What he wanted was to unmask exploitation under capitalism but the economic development made by capitalistic countries has falsified the very basic structure of Marxism.

Access the original text **[here](http://indianliberals.in/~_admin/pdflanguage?id=2036209718.pdf)**. (page 9)

First Published in the Indian Libertarian in November 1962.

Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## An Alternative 7-Point-Agenda for Combating Delhi Air Pollution

Original: https://www.spontaneousorder.in/p/an-alternative-7-point-agenda-for-combating-delhi-air-pollution

Author: Spontaneous Order

Published: 2019-09-24T11:49:26.000Z

Topics: air-pollution, stubble-burning, urban-planning, agricultural-policy

> For curbing pollution in the capital, the Delhi government proposed a seven-point-agenda. The Chief Minister said that the capital has witnessed a 25 percent reduction in pollution without any evidence. The seven proposed measures include: Odd-Even Poll..

**Summary:**

The Delhi government's seven-point agenda to combat air pollution—odd-even car rationing, pollution masks, community Diwali laser shows, environment marshals, hotspot control, dust control, and tree challenges—is largely ineffective, as odd-even previously showed little impact and cars contribute only 3% of the 28% vehicle-related PM2.5 emissions. Dust control is welcome, but others like masks provide no reduction, marshals add vehicle pollution, and tree saplings delivered by vehicles offer negligible short-term benefits against winter parali stubble burning. From a classical-liberal viewpoint, the government should adopt an alternative agenda: (1) enforce National Green Tribunal bans on stubble burning, using political capital to pressure neighboring states where burning costs ₹2,000/acre vs. ₹6,000 (80% subsidized) mechanized disposal; (2) reform groundwater and MSP policies that delay rice harvests and encourage unsuitable cropping; (3) maintain roads to cut idling emissions; (4) raise Floor Space Index from 1.2-3 to enable denser housing like Singapore's FSI of 25, reducing commutes; (5) permit mixed land use as in Pune to minimize travel; (6) enforce parking rules to internalize car ownership costs and promote public transport; (7) build usable walkways and cycle tracks. These market-oriented measures prioritize enforcement, deregulation, and infrastructure for individual choice over coercive gimmicks.

**Key points:**

- Delhi's odd-even scheme impacts pollution by less than 1% since cars cause only 3% of vehicle emissions.
- Enforce stubble burning bans and reform agricultural subsidies/MSP to address parali pollution's root causes.
- Increase FSI to 25+ and allow mixed land use to reduce commuting and vehicle emissions like in Singapore and Pune.
- Maintain roads, enforce parking, and provide cycle tracks/walkways to internalize costs and enable non-car travel.

**By Aastha Narang**

* * *

For curbing pollution in the capital, the [Delhi government proposed a seven-point-agenda](https://www.indiatoday.in/india/story/pollution-down-delhi-cm-7-point-plan-air-quality-1598906-2019-09-13). The Chief Minister said that the capital has witnessed a 25 percent reduction in pollution without any evidence. The seven proposed measures include:

1.  Odd-Even
    
2.  Pollution Masks
    
3.  Community Diwali Laser Show
    
4.  Environment Marshals
    
5.  Hotspot Control
    
6.  Dust Control
    
7.  Tree Challenge
    

Apart from dust control, it is not clear if any of the proposed measures will contribute to the reduction of pollution in Delhi. This will be the third time the people of Delhi will experience the odd-even formula. However, previous experience has shown that the [policy has barely any impact](https://www.thehindubusinessline.com/news/science/odd-even-scheme-had-little-impact-on-air-pollution-study/article24706635.ece) on combating air pollution in Delhi.

A study by The Energy and Resources Institute found that vehicle pollution is responsible for 28 percent of PM 2.5 emissions in Delhi. Out of this, [only three percent is caused by cars](https://www.indiatoday.in/india/story/delhi-pollution-vehicles-not-stubble-burning-main-cause-says-teri-study-1380557-2018-11-01). Since the government will only ban private cars, the impact of Odd-Even policy is likely to reduce pollution by less than one percent. One must wonder whether it is justified to put the whole capital to discomfort for something which produces almost no impact.

Pollution masks, while providing protection against pollution, do nothing to combat it. The community Diwali laser show is unlikely to discourage people from celebrating their own Diwali. The environment marshals, who will roam around the city in Delhi government vehicles to stop people from burning dry leaves for warmth will cause more pollution than they will curb. The government is yet to reveal what it means by hotspot control and how it will help.

Dust control is a welcome measure and should have commenced years ago. The tree challenge is questionable. The government has announced that it will deliver a sapling to anyone who is willing to plant it. Obviously, this sapling will be delivered by a vehicle, so it defeats the purpose. It is also not possible to know if this sapling will be cared for. Even if it worked, it is a long-term solution and will do very little to combat the *parali* pollution in the coming winter.

So, what should the government do to combat air pollution? Here is our alternative seven-point-agenda that would actually help in curbing *parali* pollution in Delhi:

**1\. Punish stubble burning**

As commonly known, *parali* pollution is caused by burning of crop stubble by farmers in the nearby states. It causes a huge amount of pollutants and degrades soil quality. The [National Green Tribunal has already imposed a ban](https://www.thehindu.com/news/cities/Delhi/ngt-says-no-to-ageold-practice/article7843676.ece) on burning crop residue in 2015.

Farmers know this problem and still engage in the practice because of the short window available between the harvesting of paddy and growing winter crops. Reportedly, the cost of burning the crops is ₹2,000 per acre against ₹6,000 (with an 80% subsidy) for disposing it with machines. Every year, different state governments decide to put fines on farmers who engage in stubble farming, however, these are never fully enforced. The Delhi CM has a lot of political capital which can be used to force the neighbourhood states to enforce the law.

**2\. Rethinking agriculture policies**

The misguided policies of the state and central governments in conserving groundwater levels contribute to the stubble burning by farmers. According to a [study based on satellite data from NASA](https://www.business-standard.com/article/pti-stories/groundwater-policies-behind-added-air-pollution-in-northwest-india-study-119073100605_1.html), “*water-use policies require farmers to transplant rice later in the year, which in turn delays harvests and concentrates agricultural burnings of crop residues in November, a month when breezes stagnate, leading to increased air pollution.”*

The minimum support prices offered for crops also add to the problem. Naturally, the Northwestern part of India is not suitable for growing rice. However, since the government guarantees the purchase of rice, farmers grow more of it at the expense of Delhi residents. Rethinking the full impact of these policies is needed and should be emphasised by the Delhi CM.

**3\. Road maintenance**

One of the most important things the Delhi government can do to reduce pollution is to simply maintain roads and basic infrastructure in the city. A commuter spends much more time on a pothole-filled road. The longer times in vehicles lead to more pollution.

**4\. Fix Floor Space Index policies**

The government must look into the existing Floor Space Index (FSI) ratio of the city. FSI is the ratio of the built-up space on a plot to the area of the plot. An FSI of two simply means that a 200 sq. ft. of floor space can be built on a 100 sq. ft. plot of land. The permissible FSI in Delhi is between 1.2 and 3; consequently, people are forced to get housing away from the city and must commute. Increasing the FSI is an effective solution to reduce the movement of private vehicles on the road. For example, Singapore has an FSI of 25 and its air is way less polluted than Delhi.

**5\. Allowing mixed use of land**

Removing the usage restrictions would permit more non-residential activities on residential plots. This will reduce people’s to and fro movement from offices to home. Pune has adopted mix land-use policies and benefits greatly from it as people are able to find housing near their offices resulting in considerably less traffic.

**6\. Internalise cost of car ownership**

The people in Delhi can park their cars anywhere while blocking the interior lanes of the city at the expense of the rest of the citizens. Everywhere we go, we see multiple cars parked on the roads blocking the traffic. People are able to do it because the Delhi administration does not enforce parking regulations. If car owners are punished for blocking the arterial roads of the city, they will stop doing so, leading to efficient use of roads and less pollution. This will also result in faster commute times. It might also result in more people using public transport instead of owning a car.

**7\. Having walkways and usable cycle tracks**

A lot of people in Delhi would like to walk to work or take a bicycle to work. However, since there are either no cycle tracks and walkways or they are occupied by encroachers; commuters are forced to use a vehicle. Providing for usable tracks in the city can help in combating air pollution and have a positive long-term impact. It will also make the city healthier.

We hope that the Delhi government could rethink its strategy in combating air pollution and enact measures which will actually help.  

* * *

**About Aastha Narang**

Aastha Narang is a Young India Fellow and has completed her Post Graduation in Liberal Studies from Ashoka University. She has worked with Member of Parliaments, and, in grassroots of Odisha. She has a keen interest in public policy and resonates a lot with Bhagat Singh's works and writings of his that remain. Inspired by him, she also believes in ending all sorts of exploitation of men by men.

## The Right Honorable Sir V S Srinivasa Sastri: Diplomat, Politician, Liberal

Original: https://www.spontaneousorder.in/p/v-s-srinivasa-sastri

Author: Spontaneous Order

Published: 2019-09-23T08:03:39.000Z

Topics: indian-liberals, constitutionalism, rule-of-law, liberal-internationalism

> Mahatma Gandhi is among that rare category of politicians which defy the conventional ideological label of liberal, left, conservative, or anarchist. His long career of engagement with ideas drew inspiration from scores of writings. Yet, Indian liberals..

**Summary:**

V S Srinivasa Sastri, a Tamilian schoolteacher turned liberal politician under Gopal Krishna Gokhale's influence, exemplifies principled Indian liberalism. Joining Gokhale's Servants of India Society after reading its pamphlet, Sastri assisted in Congress leadership and became its president after Gokhale's 1915 death, leading until 1946. He co-architected the 1916 Lucknow Pact demanding equal rights and self-rule under the Raj, evolving from dominion status to self-determination by 1922. Facing racism abroad and advocating racial equality, democratization of princely states, and women's rights, Sastri opposed Gandhi's Civil Disobedience and Non-Cooperation, prioritizing rule of law to avoid setting precedents for lawlessness. Accused of Raj sympathy, he countered by appealing to British liberals constitutionally, paralleling satyagrahis' moral appeals. As colonial India's diplomat, Sastri championed Indian citizenship in British dominions at the 1921 Imperial Conference, outlined global citizenship and disarmament at the League of Nations' Geneva conference, and addressed the Washington Naval Treaty. Surviving a bombing in South Africa, he earned acclaim as India's de facto global ambassador. The author argues for recognizing Sastri's liberal constitutionalism as a valid, heterogeneous strand of Indian nationalism, predating Nehru in India's outsized international role through liberal internationalism.

**Key points:**

- Sastri joined and led Gokhale's Servants of India Society, emphasizing patriotic sacrifice and constitutional patriotism.
- He opposed non-cooperation movements to uphold rule of law, warning against precedents for future lawlessness.
- As diplomat, Sastri secured citizenship rights for Indians in dominions at the 1921 Imperial Conference and promoted global citizenship at Geneva.
- His moderate liberalism advanced self-rule demands via the 1916 Lucknow Pact and evolved toward self-determination.

**By Sanjeet Kashyap**

* * *

Mahatma Gandhi is among that rare category of politicians which defy the conventional ideological label of liberal, left, conservative, or anarchist. His long career of engagement with ideas drew inspiration from scores of writings. Yet, Indian liberals, in some measure, could claim pedigree over Gandhi. His political activism in India was preceded by a year-long tour of the country, undertaken on the advice of Gopal Krishna Gokhale, the Poona-based leading liberal patriot. As is widely known, Gandhi accepted Gokhale as his political guru.

The less known, however, is that another liberal politician whom Gandhi called his elder brother. V S Srinivasa Sastri, a Tamilian school teacher-turned-editor, who joined the liberal fold under the influence of a single pamphlet written by Gokhale. A confidential note on the preamble and rules of Gokhale’s Servants of India Society, the pamphlet made Sastri leave his job to join the society.

Around a decade later Gandhi would also seek to join the society only to withdraw the membership because of differences in thought. Sastri remained firmly in the liberal fold though, assisting Gokhale in his role as the Secretary of Indian National Congress and the member of Indian Legislative Council. He would highlight Gokhale’s patriotism in an article published in 1905 in the following words:

“*If we look for the noblest type of patriotism, that which impels to sacrifice of self and takes joy therein, what name can be placed beside his, save only that of Dadabhai \[Naoroji\]?*”

After Gokhale passed away in 1915, Sastri was made the President of the society which he would lead till his death in 1946.

Sastri’s liberalism was evident in both his role as a politician and diplomat. He was one of the architects of the Congress-League scheme of 1916. The Lucknow Pact of 1916 was an Indian bid to prove their fitness for devising a constitutional mechanism. Sastri asserted the demand for equal rights and partnership under the raj, not subordination: “*We want political power; let there be no mistake about it. We want the right to rule ourselves*”.

Initially, though he only pushed for dominion status in internal matters for India. It was only later in 1922 that he would come to advocate self-determination. His moderate approach of changing stance in light of prevailing condition was also visible in the shift from responsive to the responsible model of governance.

Not dissimilar to the [bitter experience](https://www.cambridge.org/core/books/recovering-liberties/DFFAC6CCD37E1844C0425E6B8866E443) of other Indian liberals, Sastri also experienced [ugly racism](https://medium.com/afro-asian-visions/a-diplomat-a-speech-and-a-bomb-907e67077e5e), both within India and outside it. He came to advocate racial equality and argued for British dominions to accept citizenship right of Indians residing in their territories. In the domestic politics, he advocated democratization of princely states, saw separate electorate for Muslims as fait accompli, moved a resolution against the draconian Rowlatt Act, and demanded equal rights for women in all domains.

Sastri’s opposition to Civil Disobedience and Non-cooperation sit uncomfortably with the mainstream nationalist movement and as such merits further explanation. In fact, Congress disapproval of the Montagu reforms and 1919 elections in favour of non-violent agitation led to the liberal break with the Congress.

Though an admirer of Gandhi, Sastri’s principled opposition to non-cooperation was based on his faith in the rule of law. He had presciently argued that in breaking laws, Indian nationalism was setting the wrong precedent for future citizens. The sorry state of disregard for law today could, in some measure, be ascribed to the legitimacy accorded to [extra-constitutional protests](http://acorn.nationalinterest.in/2011/08/14/faq-why-is-anna-hazare-wrong-and-lok-pal-a-bad-idea/) by the nationalist movement.

Sastri also had to face accusations of being a Raj sympathizer in his opposition to Congress. His response went that in appealing to the liberal faction of British law-makers, he was no different from the non-cooperation *satyagrahis* seeking to influence British opinion. Besides, Sastri’s principled liberal stance of constitutional advancement conditioned him to seek cooperation with the Raj to earn its goodwill. I would here argue for the need to recognize the validity of differing Indian bids for dignity and political freedom instead of pitting one against the other. Such an approach would accurately capture the heterogeneous nature of Indian nationalism.

Sastri’s illustrious career went beyond domestic politics to include his stint as a roving diplomat of colonial India. Vineet Thakur, historian and upcoming biographer of Sastri, sums up his approach to international relations in terms of [liberal internationalism](https://nias.knaw.nl/fellow/thakur-vineet/). Sastri the diplomat made a successful case for granting of citizenship rights to the Indians living in British dominions in the 1921 Imperial Conference. At the Geneva conference of the League of Nations, he outlined his vision for global citizenship and made case for disarmament. The Geneva stint was soon followed by a visit to Washington for the Naval Treaty Conference. Glowing coverage followed in the pages of the New York Times outlining his liberal credo:

“*He \[Sastri\] has spoken for India twice, and those who predicted that he would present a purely official view, still more a purely British official view, have been badly mistaken. That he wants Indian self-government he does not conceal, nor that he takes the Indian national culture and character and Hindu religion seriously. But when he talks as a sane man who knows that everything cannot be done in a day and that it is much easier to tear down something fairly good than to build something a little better.*“

His status as the “*de facto global ambassador of India*” would further be cemented by his visit to South Africa to make case for the Indian cause, egged on by both Gandhi and the Viceroy. His powerful rhetorical skill based on his mastery over English earned him accolades as well as helped further his cause. In the South African town of Klerksdorp, his public event was disrupted by [bombing](https://medium.com/afro-asian-visions/a-diplomat-a-speech-and-a-bomb-907e67077e5e) which fortunately didn’t cause much damage. Back at home, he would make case for Indian participation in international affairs by arguing that the arrangements made at the high seats of power had implications for India as well. It would thus serve India well to represent itself in the conferences and share responsibilities.

Historians like Bipan Chandra have argued that under the visionary statesmanship of Nehru, Indian Republic punched above its weight in international affairs in initial years. I would argue that in V S Srinivasa Sastri, India has prehistory of outsized involvement in international affairs, dating back to its colonial moment.

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## SO Musings: The Role of Ideas in Politics

Original: https://www.spontaneousorder.in/p/ideas-in-politics

Author: Spontaneous Order

Published: 2019-09-20T09:33:21.000Z

Topics: role-of-ideas, indian-liberalism, propaganda, pseudo-socialism

> The following is an excerpt from an article published in the Indian Libertarian Magazine by M A Venkata Rao in November 1960. “The pen is mightier than the sword. This adage is being illustrated in several spheres of life today in the world and particul

**Summary:**

This Spontaneous Order post shares an excerpt from M.A. Venkata Rao's November 1960 article in the Indian Libertarian Magazine, emphasizing that 'the pen is mightier than the sword' as ideas like popular sovereignty enact democracy in politics. From a classical-liberal viewpoint, it attributes current political troubles to imperfectly understood notions hastily garbled for partisan interests amid an age of propaganda. Half-truths endowed with authority from figures like Hitler, Nietzsche, Nehru, or Gandhi ride roughshod, creating havoc that seems uncontrollable. The post positions this as a liberal critique shredding the banality of pseudo-socialism in independent India, where false political values lacked roots in the independence movement or native soil. Spontaneous Order revives such voices to reveal a political order that could have transformed the country, linking to the full document on the Indian Liberals archive.

**Key points:**

- Ideas such as popular sovereignty demonstrate the pen's superiority over the sword by shaping democratic politics.
- Political troubles stem from hastily applying imperfectly understood notions to justify partisan interests.
- Half-truths propagated by authoritative figures like Hitler, Nietzsche, Nehru, and Gandhi cause widespread havoc.
- Spontaneous Order highlights liberal thinkers who challenged pseudo-socialism in post-independence India.

**By Spontaneous Order**

* * *

The following is an excerpt from an article published in the Indian Libertarian Magazine by M A Venkata Rao in November 1960.

*“The pen is mightier than the sword. This adage is being illustrated in several spheres of life today in the world and particularly in our country. The idea of the sovereignty of the people as the basis and justification of democracy, in particular, is being enacted in politics before our very eyes.*

*Many of the sources of trouble in current politics is due to the prevalence of notions only imperfectly understood and applied hastily in garbled forms to justify partisan interests. This is an age of propaganda. Half-truths with an aura of authority derived from some popular leader or author, Hitler or Nietzche. Nehru or Gandhi are riding rough-shod over our lives creating havoc and seem to be well-nigh uncontrollable. . .* “

Access the full document **[here](http://indianliberals.in/~_admin/pdflanguage?id=601783472.pdf)**. (page 4)

First Published in the Indian Libertarian in November 1960.

Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Who Should Impose Traffic Fines and How Much?

Original: https://www.spontaneousorder.in/p/who-should-impose-traffic-fines-and-how-much

Author: Spontaneous Order

Published: 2019-09-18T08:58:44.000Z

Topics: traffic-fines, proportional-punishment, local-governance, motor-vehicles-act

> The question of what and how much legal punishment should be prescribed for a crime has been a crucial subject of jurisprudential inquiries since antiquity. Thinkers have also postulated on whether the state could impose burdensome punishment on its sub..

**Summary:**

Sudhanshu Neema argues from a classical-liberal perspective that traffic fines under the amended Motor Vehicles Act are excessively high—up to twenty times previous levels, such as ₹5,000 for driving without a license (previously ₹500)—and disproportionate compared to fines for graver offenses under the Indian Penal Code, like ₹500 for obstructing a public servant (IPC Section 186). Drawing on principles from the US 8th Amendment and IPC Section 63 against excessive fines, he proposes using per capita income (₹10,534 monthly in FY 2018-19) as a yardstick: about one-tenth (₹1,053, or three days' labor) for minor infractions and half a month's income (₹5,250) for graver ones. He criticizes uniform national fines amid vast income disparities—e.g., NCT over $4,000 annually vs. poorer districts at one-fifth—advocating decentralization to local governments, which possess the necessary knowledge of local roads, driving habits, and conditions, rather than Delhi bureaucrats. States can adjust fines, but local bodies should decide to ensure proportionality and effectiveness.

**Key points:**

- Traffic fines should be proportional to local per capita income, e.g., one-tenth for minor offenses like driving without a license (around ₹1,053 based on FY19 figures).
- MV Act amendments impose fines exceeding those for some serious IPC offenses, such as ₹500 for obstructing public servants.
- Uniform national traffic fines ignore income variations across districts and should be localized.
- Local governments, responsible for roads, must set fines using their knowledge of local conditions, not centralized bureaucrats.

**By Sudhanshu Neema**

* * *

The question of what and how much legal punishment should be prescribed for a crime has been a crucial subject of jurisprudential inquiries since antiquity. Thinkers have also postulated on whether the state could impose burdensome punishment on its subjects in case of minor infractions? Different answers have been provided for these questions from different perspectives, with the central idea being that the punishment should not be excessive.

The 8th Amendment to the US Constitution reads – *“Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.”* The same principle has been incorporated under Section 63 of the Indian Penal Code in the following words:

*Amount of fine — Where no sum is expressed to which a fine may extend, the amount of fine to which the offender is liable is unlimited, but shall not be excessive.*

What is cruel, unusual, or excessive punishment is of course left to the discretion of the courts to decide on the facts and circumstances of each case. The courts have come to the conclusion that the fine should not be so excessive so as to constitute the *taking* of an individual’s property without the due process of law. What is excessive is, of course, a subjective question, similar to that of obscenity – one knows it on seeing it.

**Need for proportionality of fines**

That being said, let us consider the issue of fines under the recent amendment to the Motor Vehicles Act. The amendment has increased the quantum of fines up to twenty times in certain cases. Driving without a license may attract a fine of ₹5,000 as opposed to ₹500 earlier. Other fines have been proportionally increased. Whether you agree with the quantum of fine or not; you must agree that the quantum of fine should be proportional to the gravity of the offence.

What then, should be the yardstick by which we measure how much fine is sufficient for an offence. Since there is no fixed criterion to determine the same, I propose using per capita income of the people as a yardstick. India’s [per capita income has risen to](https://www.livemint.com/politics/policy/india-s-per-capita-income-rises-10-to-rs-10-534-a-month-in-fy19-1559318636062.html) ₹10,534 per month in the Financial Year 2018-19. Now perhaps a tenth of that number (equivalent to approximately three days of labour) seems like a reasonable fine for a minor infraction such as driving without a license. For graver traffic violation, perhaps we could use half-months’ worth of labour as fine (approximately ₹5,250).

My objection to the excessive fines under the Act is specifically limited to the fact that some of the graver offences under the Indian Penal Code, 1860 do not attract the similar quantum of fines. For example, Section 186 of the Code provides for a fine of up to ₹500 for obstructing public servant in discharge of public functions. There is a provision for imprisonment also, however, that is never generally awarded by courts. That means that stopping a police officer from catching a thief is ten times less of an offence than not carrying a driving license. Similarly, there are many graver offences than not carrying a piece of paper which attract much lesser punishment.

**Traffic laws must be local**

The localisation of traffic laws is also needed to account for the wide variation in the income of various districts in India. The National Capital Territory has per capita income over $4,000 per annum, whereas some districts in poorer states per capita incomes are less than a fifth of that level. In such a scenario, it is unreasonable to have the same levels of fines for traffic infractions across the country.

Further, any fine levied for traffic violations should be decided by the local government. A bureaucrat sitting in Delhi cannot judge and decide the quantum of punishment for various infractions because they are unlikely to have the knowledge needed to do so. The quality of roads, the driving habits of the people, obstructions to traffic, etc, vary widely across India. States have the authority to change the quantum of fine and regulations for traffic, and some of them have rightly done so. However, these decisions must be decided at a much smaller scale by the local government as they are the ones who are responsible for the management of local roads and have the appropriate knowledge to regulate the traffic.

* * *

**About Sudhanshu Neema**

Sudhanshu is a lawyer and economist working as Manager, Research at the Centre for Civil Society. He served as a Frederic Bastiat Fellow at the Mercatus Center at George Mason University in 2015-16.

## SO Basically – Episode 07 | Whims of Judges

Original: https://www.spontaneousorder.in/p/so-basically-episode-07-whims-of-judges

Author: Spontaneous Order

Published: 2019-09-18T06:14:57.000Z

Topics: judicial-overreach, separation-of-powers, judicial-accountability

> In this episode of SO Basically we talk about the slow and gradual encroachment by the judiciary on the legislative and executive organs of the state. This unconstitutional encroachment based on mere whims of judges must be stopped and instead we must s..

**Summary:**

This post promotes Episode 07 of SO Basically, highlighting the slow and gradual encroachment by the judiciary on the legislative and executive organs of the state. From a classical-liberal viewpoint, the authors decry this as an unconstitutional overreach driven by the mere whims of judges, which undermines the separation of powers. They argue that such judicial activism must be halted to restore proper constitutional balance. Instead, greater accountability should be demanded from elected leaders in the legislative and executive branches, aligning with liberal principles that prioritize democratic responsiveness over unelected judicial fiat. The episode builds on critiques like those in referenced analyses of increasing judicial interference. Spontaneous Order frames this within their broader mission to challenge pseudo-socialist legacies and revive true liberal political dynamics in India, emphasizing native and independence-era values sidelined by statism.

**Key points:**

- The judiciary is encroaching unconstitutionally on legislative and executive powers through judges' whims.
- This judicial overreach must be stopped to uphold separation of powers.
- Accountability should be sought from elected leaders rather than unelected judges.

**By Spontaneous Order**

* * *

In this episode of SO Basically we talk about the [slow and gradual encroachment by the judiciary](https://www.deccanherald.com/content/548269/increasing-encroachment-executive-powers-judiciary.html) on the legislative and executive organs of the state. This unconstitutional encroachment based on mere whims of judges must be stopped and instead we must seek more accountability from our elected leaders.

[Watch previous SO Basically Episodes](https://spontaneousorder.in/tag/so-basically/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: Taxation and Economic Growth

Original: https://www.spontaneousorder.in/p/taxation-economic-growth

Author: Spontaneous Order

Published: 2019-09-13T09:49:38.000Z

Topics: taxation-policy, public-expenditure, economic-growth, indian-liberalism

> The following is an excerpt from an article published in the Indian Libertarian Magazine by G N Lawande in July 1963. His arguments supporting the necessity of reducing public expenditure still remain relevant. “Since independence, our economy has been

**Summary:**

In a 1963 article from the Indian Libertarian Magazine, G N Lawande argues that India's post-independence socialist taxation policy, aimed at resource mobilization and equality, has hindered rapid economic growth by discouraging savings and productive investment, which are essential for raising per capita income. He emphasizes that economic progress depends on accumulating and productively investing savings, not just saving itself. Lawande criticizes the 'unrealistic taxation policy' as primarily responsible for slow economic progress and calls for a complete reexamination of the tax system to enable companies to expand resources for investment. Urgently, he advocates cutting public expenditure, countering fears of reduced income and employment by citing Prof. Shenoy: the foregone state spending 'does not disappear into thin air' but reappears as additional private investment or expenditure. Spontaneous Order presents this classical-liberal critique of pseudo-socialism as still relevant today, highlighting how reducing state intervention could foster genuine growth over statist patterns.

**Key points:**

- Unrealistic high taxation discourages savings and productive investment, slowing India's economic growth.
- Public expenditure must be cut to free resources for private investment, as foregone state spending shifts to people's additional investments.
- Reexamine the entire taxation system to enable companies to expand for productive purposes.
- Economic growth relies on productively investing accumulated savings to raise per capita income.

**By Spontaneous Order**

* * *

The following is an excerpt from an article published in the Indian Libertarian Magazine by G N Lawande in July 1963. His arguments supporting the necessity of reducing public expenditure still remain relevant.

“Since independence, our economy has been set to achieve rapid economic growth in order to raise the standard of living of the teeming millions and to achieve greater equality in income and wealth. To achieve these social objectives, to establish a socialist pattern of society taxation policy has to satisfy two conditions, namely, to mobilise the domestic resources for rapid economic growth and to create conditions for the implementation of social aims. It must be remembered here that the taxation policy of our Government has assumed great importance in recent years though it is one of the factors that lead to economic growth. Under the present conditions existing in our country, the primary need is to increase savings of the people because the economic growth of a country rests on the volume of savings that it is able to accumulate and invest productively. Saving alone does not lead to economic growth. It is the productive investment that leads to a rise in the per capita income of the people which increases the capacity of the people to save more and invest more. . .

. . . it is the unrealistic taxation policy that is mainly responsible for the slow progress of our economy. To achieve the take off stage it is necessary that the whole system of taxation should be reexamined with a view to enable the companies to expand their resources for productive investment. What is urgently necessary is the cut in the public expenditure. Some may say that a cut in the public expenditure will reduce the income and employment but this misconception has been aptly exposed by Prof. Shenoy. He observes that *“the foregone expenditure of the state does not disappear into thin air”.* He proceeds to say – *“In their place would now appear the additional investment or other expenditure by the people.”*

Access the full document [here](http://indianliberals.in/~_admin/pdflanguage?id=530861637.pdf). (page 9)

First Published in the Indian Libertarian in July 1963.

Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Inspecting Private School Inspections in Delhi

Original: https://www.spontaneousorder.in/p/inspecting-private-school-inspections-in-delhi

Author: Spontaneous Order

Published: 2019-09-11T10:28:26.000Z

Topics: private-schools, school-inspections, education-regulation, regulatory-burden

> We spent two months of Summer “inspecting” private school inspections as part of the Researching Reality Internship at the Centre for Civil Society; we came to learn that laws, much like beauty, are often skin deep. Our adventure took us all across th

**Summary:**

Private schools in Delhi, increasingly preferred by parents across economic classes, face inspections from a government that acts as both competitor—offering free education with a large budget—and regulator/enforcer, creating an uneven playing field. As part of a Researching Reality Internship at the Centre for Civil Society, the authors spent two months investigating this process through 11 visits to the Directorate of Education (obtaining 8 complete inspection reports), interviews with 15 of 30 officials and government school principals, six RTIs yielding 116 responses from 20 of 29 Delhi zones (offering little insight), and outreach to over 30 private schools (only 6 responded). Despite laws like the Delhi School Education Act, 1973 mandating annual inspections of all recognized schools, Delhi conducts only 60 per year; Haryana officials were unaware of similar requirements. The regulatory framework spans 2,000 pages of executive orders plus RTE 2009, making full compliance rare and inspections prone to harassment rather than improvement. Stakeholders from schools to officials were suspicious and evasive, revealing a disconnect between on-paper laws and ground realities, eroding ideals of government accountability. An upcoming paper details objectives and processes, underscoring the need to treat private schools as co-providers rather than afterthoughts.

**Key points:**

- Delhi inspects only 60 private schools annually despite the Delhi School Education Act's mandate for yearly inspections of all recognized schools.
- Private schools face a 2,000-page regulatory maze including executive orders and RTE 2009, rendering full compliance nearly impossible.
- RTIs to Delhi's 29 zones yielded 116 responses from 20 zones but provided minimal insights into inspection practices.
- Over 30 private schools contacted responded minimally (only 6), with officials and principals often suspicious of inquiries.
- Inspections serve as a tool for enforcement and potential harassment rather than genuine improvement of school outcomes.

**By Mahim Singla**

* * *

We spent two months of Summer “inspecting” private school inspections as part of the [Researching Reality Internship at the Centre for Civil Society](https://ccs.in/ccs-academy/courses-and-programs/internship); we came to learn that laws, much like beauty, are often skin deep. Our adventure took us all across the underbelly of Delhi including the open sewers of Mehrauli, the strangely elevated Jhandewalan and the ever so unwelcoming Shahdara. We went to seek answers from schools, principals, officials, clerks and at times even e-rickshaw drivers—all promptly shooed us away.

Our persistence, however, paid off. After 11 visits to the Directorate of Education, we obtained eight complete school inspection reports. Of the 30 officials and government school principals (who also conduct inspections), 15 agreed to talk to us.

So, why did we go through all this effort? Even though private schools are increasingly preferred by parents from all economic classes, the government continues to treat them as an afterthought rather than a co-service-provider. Moreover, operating a private school is no easy task—the government, with its large budget and free education, holds competitive stakes. Not only is the government a competitor, but it is also the rule-setter, an enforcer.

Why inspections? Inspections act as an interface, an instrument to enforce regulations, and [if properly done, to improve school outcomes](https://pdfs.semanticscholar.org/76ad/432cd5d52a5d312bd4a6a4379977ffcb40df.pdf). However, with unclear motivations, inspections can also be used as a way to further harass the administrators at private schools.

Against this backdrop, we set out to understand the objectives, assumptions and the process of inspections. We asked: why does the government inspect? What are its objectives? How does it do it? What happens if a school fails to comply? While our upcoming paper answers these questions, this article highlights the softer aspects of our research—how different stakeholders responded to our persistent queries on the what, why and how of inspections.

We started off with a plan. Read what the law says, understood what it means, and then asked everyone who would respond to us about what actually happens on the ground.

We filed six separate RTIs, three in Delhi and three in Haryana, with each application asking 4-5 questions. We received 116 responses from 20 of the 29 zones in Delhi but they barely gave us any insights into how inspections were conducted (Figure 1).

[

![](https://substackcdn.com/image/fetch/$s_!Btsi!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fb52e05d1-0829-4fed-ab68-1be717280d4b_565x391.png)



](https://substackcdn.com/image/fetch/$s_!Btsi!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fb52e05d1-0829-4fed-ab68-1be717280d4b_565x391.png)

*Figure 1: Responses from Directorate of Education in Delhi*

Finding and reading the law was relatively easy, but not particularly useful in helping us determine what the ground realities of inspections are. For instance, the Delhi School Education Act, 1973 and the Haryana School Education Act, 1995 both said that all recognised schools must be inspected once every financial year.

Through interviews with Government officials and school owners, we found Delhi only inspects 60 private schools each year while in Haryana, officials had not even heard about the clause mandating annual inspections, forget implementation. With all this “legal” knowledge in mind, we designed questionnaires in order to clarify aspects of the inspection proforma that we believed were difficult to enforce or check objectively.

We found, much to our surprise at the time, that government officials and school owners were quite suspicious of 20-year olds asking questions about their jobs. It would not come as a surprise if schools were so hard to get a hold of because they failed to meet one or another regulatory requirement and would rather not speak about it.

Even a thorough reading of the Delhi School Education Act and Rules 1973—a law made four and a half decades ago—would not give a school manager a clear idea about what the government expects. They would have to read 2,000 pages of executive orders, and of course, the Right of Children to Free and Compulsory Education, 2009. It would be rare to find a school that complied with all of the orders.

Over the course of six weeks, we contacted over 30 private schools in Delhi and only six wrote back. Even showing up at a school’s doorstep, begging for 5 minutes of the principal’s time worked only a couple of times. One of those attempts simply resulted in us being rejected by the principal rather than the receptionist or the guard sitting at the entrance gate.

We entered the corridors of government offices and school compounds expecting accountability, answerability, and transparency. We left disenchanted. These six weeks washed us off our romantic ideas of an ideal government and taught us how things actually work, leaving us wondering where the problem truly lies.

—

Researching Reality is an annual six-week internship program that offers intensive training in policy-relevant research to undergraduate and graduate students of various disciplines.

* * *

**About Mahim Singla**

Mahim is a budding economist from the Delhi Technological University.

## Food and Spontaneous Order: Daastan-E-Dilli

Original: https://www.spontaneousorder.in/p/food-and-spontaneous-order

Author: Spontaneous Order

Published: 2019-09-10T08:52:50.000Z

Topics: spontaneous-order, old-delhi, food-markets, economic-history

> In a 1990 paper, Murray Rothbard claimed that the great Taoist Chuang Tzu (369 BC – 286 BC) was the first person to explain the idea of ‘Spontaneous Order’. He said, “Good order results spontaneously when things are let alone.” The term was late

**Summary:**

Murray Rothbard attributed the concept of spontaneous order to Chuang Tzu, later developed by Proudhon and Hayek, where good order emerges when people are left free to act in self-interest. The author applies this to Indian cuisine's evolution, influenced by Harappan pulses and cereals, Vedic innovations, Aryan, Maurya, Gupta, and especially Mughal introductions like creamy dishes, fruits, sherbets, kulfi, breads, and meats. Focusing on Old Delhi (Purani Dilli), Shah Jahan founded Shahjahanabad in 1648 as a midpoint between Agra and Lahore, with Red Fort and Jama Masjid at its core. Private enterprise spontaneously created vibrant mohallas, katras, and food markets without central planning, as noted by Swapna Liddle: building was locally negotiated. In Dariba Kalan, jewelers spawned chaat and pakode joints to entertain customers (demand-supply). Matia Mahal, near a former Mughal palace site, hosts Karim’s (founded by Mughal cook Haji Karimuddin) and others serving Mughal, Afghani, Kashmiri fusion foods. This mirrors Adam Smith's invisible hand of brewer, butcher, baker. Contrasting pre-1991 rationing horrors (e.g., Swaminathan Aiyer's milk powder struggles), Purani Dilli thrives on free spontaneous order from diverse Jaat, Gujars, Baniyas, Muslims, traders—thanks to Shah Jahan's non-discriminatory platform.

**Key points:**

- Spontaneous order in Old Delhi's food markets emerged post-1648 Shahjahanabad founding through private initiative, without government dictation.
- Dariba Kalan's chaat joints arose when jewelers supplied quick finger foods to waiting customers, exemplifying demand-supply dynamics.
- Matia Mahal eateries like Karim’s, started by a Mughal cook, proliferated to meet demand for diverse cuisines including Afghani and Kashmiri fusions.
- Pre-1991 central planning rationed basics like milk powder, contrasting the success of free markets in Purani Dilli's food scene.
- Shah Jahan enabled this by providing an equal platform to diverse groups, fostering self-interested contributions to culture and cuisine.

**By Sadaf Hussain**

* * *

In a 1990 paper, Murray Rothbard claimed that the great Taoist Chuang Tzu (369 BC – 286 BC) was the first person to explain the idea of ‘Spontaneous Order’. He said, *“Good order results spontaneously when things are let alone.”* The term was later developed by Proudhon in the nineteenth century and Friedrich Hayek in the twentieth century.

The spontaneous order makes people stay free and do what they please. When people are free, they take risks, act in self-interest and challenged themselves in breaking the age-old traditions and trends. Spontaneous order is everywhere. In food markets, from farming to the creation of dishes, everything is about the free will and spontaneous order.

India has welcomed and embraced various religion, culture and habits over thousands of years. Hence, the idea of Indian food is fluid. Most things on our dining tables are influenced by the eating habits of the traders, rulers and travellers who visited or stayed in India.

The evidence from Harappa and Mohenjo-Daro civilisations tell us their food included a lot of pulses, cereals and lentils. These dishes perhaps were also in a very rustic or porridge form, mostly to fill the stomach. The idea of eating right and healthy didn’t exist then. In the Vedic period, Indian cuisine evolved with advancements in the art of cooking.

The ancient Indian civilization moved towards perfection in cooking gradually. During the Vedic period, better forms of cooking and innovative recipes. At that time, a regular diet consisted of vegetables, fruits, grains, meat, honey, dairy products, beverages and special kind of spices.

Over time the food changed its form again and with the arrival of Aryans from Central Asia with a number of cuisines. They further evolved under the Maurya and Gupta Empires. Later, in the Medieval period, food went through additional developments including the form and techniques of cooking. The cuisine of Mughals, especially the growth of creamy and rich cuisine permeated to the everyday meal across Central and North India.

With the arrival of Mughals, India also received varieties of fruits, sherbet, kulfi, snacks, various kinds of breads, and meat-based dishes. My book Daastan-e-Dastarkhan highlights the influence of Muslim cuisine on the North Indian food while exploring the food of different Indian states. However, here I would like to focus specifically on Old Delhi.

Walk down to the Chandni Chowk (because you can’t really take your car there); the beauty of this lane can only be captured by walking and visually touching every corner. Old Delhi (Purani Dilli) is now famous for many reasons including the people, culture, heritage buildings but it is most popular for its food and spice. Khari Bowli is famous for spices from India and abroad, while the lanes close to Jama Masjid are popular for lip-smacking flavours. They make you taste what perhaps the royals used to devour sitting in their palaces.

Different Mughal rulers have had different hobbies, however Shahab-ud-din Muhammad Khurram aka Shah Jahan, the fifth Mughal emperor was a patron and admirer of architecture. He not only commissioned the world-famous Taj Mahal but also Jama Masjid, Red Fort, Agra Fort, Moti Masjid (Now, in Pakistan) and a few other famous monuments. He was also the person responsible for commissioning Shahjahanabad which is now popularly called as Purani Dilli.

Shah Jahan wanted a meeting point between Agra (then capital of India) and Lahore, the nobles and the architects showed them the piece of land in Delhi which later became Shahjahanabad. The epicentre of this newly constructed city was Qila-e-Mubarak aka Red Fort and on April 19, 1648, the ruler first stepped into the Diwan-e-Khas of the Fort.

Following the establishment of the walled city, soon business, and houses started to rise in a spontaneous order. Swapna Liddle, convenor of INTACH and author of *Chandni Chowk: The Mughal City of Old Delhi*, writes “Private enterprise and individual initiative also became part of planning”. The architects and royal planners of that century left the design of houses, katras and mohallas to individual choice and discretion. Liddle further writes “In every mohalla or locality, building activity was locally negotiated with your neighbours. It was an informal situation”.

Lanes like Dariba Kalan, a mohalla of jewellers became not just popular for jewellery but also gave birth to *chatorebazi,* every time when people would visit the jeweller shop to get their jewellery fixed or made, the jewellers would ask them to sit back and relax while they work on their pieces and offer them chaat, pakode and chai. Even if you visit this lane today, you will see more of small food joints. They simply came about because of the basic economics, Demand-Supply. Jewellers demanded quick, easy finger food which will continue the conversation going with the customers and also ensure that they don’t get bored, and the supply came in the form of more and more food joints.

Matia Mahal (the lane in front of Jama Masjid) which is full of eateries like Karim’s and Al-Jawahar Restaurant or Rehmatullah Hotel which got its name because legend has it that there was a temporary mahal (palace) which housed Shahjahan while the Qila-e-Mubarak was being constructed. This mahal was also known as Azizabaadi Haveli, named later after Begum Azizabad, wife of a Mughal Prince. Later, the grandson of Bahadur Shah II inherited the palace. It is believed that it got demolished during the British reign. Today, Urdu Bazaar and Matia Mahal Bazaar have become the mecca of food lovers. 

Haji Karimuddin who established the famous restaurant Karim’s and popularly known as someone who used to cook for Mughals. Seeing a massive demand during the British time and even now, foodpreneurs opened food joints to serve to the hungry crowd. If you visit Purani Dilli today, you will not just get Mughal food but also Afghani, Kashmiri and fusion of all kinds. Ask for savoury or sweet and you will have it. All these markets and food joints arose spontaneously, without any government official dictating it.

I am reminded of Adam Smith who presented the case of the Invisible hand and his popular example of Brewer, Butcher and the Baker and their self-interest in providing food for others.  

In one of my many discussions with Swaminathan Aiyer, he talks about the horror before 1991 when the even basic products like milk powder were rationed and only the wealthy or the people with *connections* could get it. He had to exploit his source and connections to get milk powder for his son.

Purani Dilli then and now thrives as a centre of art and culture where poetry, music, artisanship and delicious food come together not because of a pre-planned order but a free and spontaneous order where people from different ethnicity, likeness and ideas came together. They built this city, the Jaat, Gujars, Baniyas, Muslims, traders and entrepreneurs. Shahjahan must be credited for creating a space and giving an equal platform to everyone. No discrimination, no reservation, just basic economics.

More about food and culture of Purani Dilli can be explored in my book **Daastan-E-Dastarkhan**, available [online](https://www.amazon.in/Daastan-Dastarkhan-Stories-Recipes-Kitchens/dp/938832241X/) and in major bookstores. 

* * *

**About Sadaf Hussain**

Sadaf Hussain writes everything between politics, economics to food and culture. He is the author of Daastan-E-Dastarkhan and a TEDx Speaker.

## SO Musings: Food Prices and Libertarian Solution

Original: https://www.spontaneousorder.in/p/agricultural-economy

Author: Spontaneous Order

Published: 2019-09-06T11:03:16.000Z

Topics: food-prices, agricultural-markets, farmer-credit, libertarian-economics

> The following is an excerpt from an article published in the Indian Libertarian Magazine by M A Venkata Rao in August 1957. His arguments for freedom for farmers remain as relevant today as they were then. “Leaving these two types of arrangement as extr

**Summary:**

In a 1957 excerpt from the Indian Libertarian Magazine, M A Venkata Rao advocates a libertarian approach to India's food price crisis, arguing that temporary government measures like the three-month amendment to the Essential Commodities Act—allowing requisition of hoarded stocks at reasonable rates—are useful to force hoarders into the market but insufficient as permanent solutions. He critiques partial monopolies by urban mandi merchants who exploit farmers' weak bargaining power and pressing consumption needs, buying surplus grain cheaply post-harvest and holding it for price rises during lean months, often financed by bank loans. Instead of price-fixing, Rao proposes removing obstacles to free enterprise by providing direct credit advances to growers against their harvested grains. This would enable farmers to hold stocks at leisure, capture timely profits themselves, and bypass middlemen profiteering. Government instructions to banks to restrict advances on grain have helped temporarily, alongside the requisition amendment, but the enduring remedy lies in empowering producers toward a free economy, unwinding socialist coils to let the 'natural man' thrive. These arguments remain relevant for easing food problems without statist interventions.

**Key points:**

- Approve the temporary three-month amendment to the Essential Commodities Act for requisitioning hoarded stocks to induce market release.
- Reject permanent price-fixing; instead, remove hindrances to free agricultural enterprise.
- Provide direct credit advances to growers on harvested grains to boost their bargaining power and prevent distress sales to middlemen.
- Restrict bank loans to merchants on grain stocks to curb hoarding and profiteering.

**By Spontaneous Order**

* * *

The following is an excerpt from an article published in the Indian Libertarian Magazine by M A Venkata Rao in August 1957. His arguments for freedom for farmers remain as relevant today as they were then.

*“Leaving these two types of arrangement as extremes or even as stages of future development inapplicable at the present stage of social affairs in India, we wish to suggest a third type of regulated economy which would set free the natural man and set him going on the road to free economy and help the present generation to unwind the coils in which it has bound itself under the glamour of communism (socialism) of the Marxist variety.*

*As solutions of great generality are pointless and unfruitful unless they are shown in illuminating application to current problems, we propose here to indicate the libertarian way for the easing of the food problem in India in the current crisis.*

*We shall begin by approving the present amendment to the Essential Commodities Act whereby the Government has taken power to requisition hoarded stocks at reasonable rates. The amendment has a duration of three months after which it will lapse. This js only a temporary administrative measure to induce hoarders to come into the market and not wait for further rises during the lean months before the harvest. But what after the next harvest? …*

*The right remedy is not to attempt any price-fixing at all but to remove the hindrances in the way of the smooth working of the agricultural economy and let free enterprise have a chance. What is obstructing fair prices is not free economy but partial monopoly on the part of hoarding merchants a few months before the harvest. They buy up stocks from the producers and hold them for rising prices above normal and fair levels. The actual growers have not the economic stamina to wait. Their consumption needs are too pressing and they sell their surplus for normal prices or for what they can get. Their bargaining power is low. Prices rise as soon as stocks move from the peasants’ haystacks to the mandi of wholesale merchants in the towns. Here is the bottleneck. If harvests are poor mandi merchants hold up sales and wait for higher prices. They borrow money against grain stocks and hold them for price rises. The Government has instructed the banks of the country through the Reserve bank not to be free with advances on grain. This together with the hoard acquisition amendment has been able to check profiteering. But this cannot be adopted as a permanent measure. The permanent remedy is to provide credit to the grower himself. If he can get advances on his harvested grains, he will not sell in a hurry and in distress to the middleman. He will sell at leisure and derive the profits of timeliness himself instead of surrendering it to the middleman.”*

Access the full document [here](http://indianliberals.in/~_admin/pdflanguage?id=1856980936.pdf). (page 6)

First Published in the Indian Libertarian in August 1957.

Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## What does it take to open a school in Delhi? Not an easy task to find out!

Original: https://www.spontaneousorder.in/p/open-school-delhi

Author: Spontaneous Order

Published: 2019-09-04T12:15:59.000Z

Topics: education-regulation, private-schools, bureaucratic-hurdles, school-approvals

> This summer, as part of Researching Reality internship at CCS, we set out to understand and document the procedure and time taken for opening a private school in Delhi. Our ‘model’ school was a private unaided non-minority middle school, operating in

**Summary:**

Sanjana Sood's investigation into opening a private unaided non-minority middle school in authorised areas of Delhi reveals a profoundly bureaucratic and opaque process that classical-liberals would decry as a barrier to educational entrepreneurship. Guided by the Delhi School Education Act 1973, RTE Act 2009, and Delhi RTE Rules 2011, the procedure demands three key approvals: Essentiality Certificate (EC, 30-point checklist, 68 steps), Scheme of Management (SOM, 16-point checklist, 19 steps), and Certificate of Recognition (90-point checklist, 68 steps). Interns spent two months navigating Directorate of Education (DOE) offices, facing dismissal as students and requiring persistent persuasion to access checklists and pending files. They found hardly any middle schools opened in Delhi over the last 5-10 years, with those contacted operating unauthorised. File tracing showed applications shuffling across DOE, district, and zonal offices, with one Certificate of Recognition taking 15 times the prescribed time. The experience underscores government inefficiency and reluctance to share information, turning a seemingly straightforward query into a herculean task and highlighting regulatory overreach stifling private school supply.

**Key points:**

- Opening a private middle school in Delhi requires navigating 30-, 16-, and 90-point checklists for EC, SOM, and Recognition, involving 68, 19, and 68 steps respectively across government offices.
- Researchers faced repeated denials and needed persistence to access DOE checklists and pending files, revealing opacity in the approval process.
- Few middle schools have opened in Delhi in the last 5-10 years, with accessible ones operating in unauthorised areas.
- One examined file took the DOE 15 times the prescribed time to grant a Certificate of Recognition, exemplifying delays.

**By Sanjana Sood**

* * *

This summer, as part of Researching Reality internship at CCS, we set out to understand and document the procedure and time taken for opening a private school in Delhi. Our ‘model’ school was a private unaided non-minority middle school, operating in an authorised area. Digging-up the procedure to open a school and its various intricacies sounded simple enough. We anticipated a clear-cut outline of all that needed to be done. However, through the first two weeks, we found out this was not the case.

The Delhi School Education Act and Rules, 1973, the Right of Children to Free and Compulsory Education (RTE) Act, 2009, Delhi RTE Rules, 2011 as well as literature that we referred to, gave us a basic outline of the procedure and various certificates and licences needed to open our model school. The rule-sets laid out three critical requirements: 1. Essentiality Certificate (EC), Scheme of Management (SOM) and the Certificate of Recognition. Our next step was to collate all the documents necessary for obtaining each of these certificates and record the actual time taken to acquire these.

To begin with, we tried to get in touch with school owners of newly opened schools in Delhi but faced two problems. First, hardly any middle schools opened in the last 5-10 years. Second, the schools that we could manage to access were operating in unauthorized areas.

We decided to change our approach and visit the Directorate of Education (DOE) to examine the files of schools that had applied for an EC, SOM approval or Certificate of Recognition. We hoped to get an idea of all requirements for opening up a new school through this route. But, there was no clarity on where we would find such files.

We visited the DOE to ask for the school applications, assuming that all files would come there at some point. This turned out to be no simple task because what we were demanding was not information on the general procedure but access to files that included all information about the schools and the manner in which the DOE dealt with them. More often than not, we were dismissed because we were students and it was unsafe to provide us with such information.

After a lot of persuasion and persistence at the Private School Branch (PSB) of the DOE, we got our hands on checklists that inspecting officers used while processing applications. To gain approval for an EC, a school application had to go through a 30-point checklist; for a SOM approval, a 16-point checklist; and for securing Certificate of Recognition, a 90-point checklist. While these checklists gave us a detailed picture of all the documents and other criteria required for acquiring all three certificates, we still needed to understand the time it took to process the school applications and their movement within the DOE. We could only get this information from actual application files.

We found out that most application files that had been granted an EC or Certificate of Recognition rested at their respective District office. So we covered almost all District offices in Delhi, but all in vain. All offices demanded a permission letter from the Director, which we had not been able to secure.

With just two weeks left in our program, we were desperate. We started going back to the DOE for information. After repeated visits, we found that although the files of approved ECs and Certificates of Recognition ended up at the District offices, there were a few files pending approval available at the PSB. By this time, the staff at the PSB main office were familiar with our haggard faces, and so finally (in the last week of our program) let us access certain in-process applications. At last, we were able to trace the movement of the files within various offices and between officers (Figure 1).

[

![Journey of a file](https://substackcdn.com/image/fetch/$s_!BTDy!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F95d33ca8-4bbf-41c0-b18e-00970c616154_4996x1054.png "Journey of a file")



](https://substackcdn.com/image/fetch/$s_!BTDy!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F95d33ca8-4bbf-41c0-b18e-00970c616154_4996x1054.png)

Figure 1: Movement of files for Essentiality Certificate, Scheme of Management approval and Certificate of Recognition

Within the DOE, District and Zonal offices, an application moved **68** steps to obtain an Essentiality Certificate and Certificate of Recognition. It also moved **19** steps in the Private School Branch to acquire approval for Scheme of Management. In one of the files we examined, it took the DOE almost **15 times the prescribed time** for granting Certificate of Recognition.

We embarked on our research expecting a straightforward process for opening private schools in Delhi but instead, spent two months scuttling from one government office to another. While we were astonished to find such a lengthy and inefficient system for opening schools, we were equally surprised to face the unwillingness of government officers to divulge information. Ease of opening schools had not been as easy a question to answer as we had thought it to be.

* * *

**About Sanjana Sood**

Sanjana is an undergraduate student majoring in Economics with a minor in English Literature. Her interests include economic and financial research, writing, poetry and music. She wishes to run her own magazine someday.

## An activist recalls her experiences with Sharad Joshi

Original: https://www.spontaneousorder.in/p/sharad-joshi-experiences

Author: Spontaneous Order

Published: 2019-09-03T13:26:02.000Z

Topics: farmers-rights, agriculture-policy, government-intervention, sharad-joshi

> Sharad Joshi began his fight for farmers’ rights in the late 1970s. It was his genius in articulating the real cause of the persistent distress facing farmers that inspired lakhs of farmers to take up the fight against government interventions in agricu

**Summary:**

Sharad Joshi launched his campaign for farmers' rights in the late 1970s, pinpointing government interventions in agriculture as the root cause of persistent farmer distress—a insight that mobilized lakhs of farmers to protest these policies. Shailaja Deshpande, a prominent activist, has championed farmers' freedoms across Maharashtra for over 35 years as a steadfast supporter of Joshi's andolans. The post highlights her firsthand experiences with Joshi, linking to audio content for listeners, and embodies the classical-liberal critique of state overreach stifling agricultural enterprise, contrasting it with the pseudo-socialist dominance in post-independence India.

**Key points:**

- Sharad Joshi articulated government interventions as the primary cause of farmers' distress, inspiring massive protests since the late 1970s.
- Shailaja Deshpande has advocated for farmers' freedoms in Maharashtra for more than 35 years.
- The post shares Deshpande's personal recollections of Joshi's movement to rally support against agricultural statism.

**By Spontaneous Order**

* * *

Sharad Joshi began his fight for farmers’ rights in the late 1970s. It was his genius in articulating the real cause of the persistent distress facing farmers that inspired lakhs of farmers to take up the fight against government interventions in agriculture.

One of the prominent and long-time supporter activist of these andolans is Shailaja Deshpande. For more than 35 years now, she has continued the fight for farmers’ freedoms across Maharashtra. Listen to her experiences here and let us know your thoughts in comments.

For more details, please visit:

[http://sharadjoshi.in/](http://www.sharadjoshi.in/)  
[http://indianliberals.in/](http://indianliberals.in/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Why remember Sharad Joshi?

Original: https://www.spontaneousorder.in/p/sharad-joshi

Author: Spontaneous Order

Published: 2019-09-03T07:33:36.000Z

Topics: individual-freedom, anti-statism, caste-politics, producer-rights

> On this day, 85 years ago, Sharad Joshi was born like an ordinary man, like all of us. Then why Sharad Joshi’s birth should be remembered and celebrated? When Sharad Joshi came to India in the 70s, there was a huge boom of tragedy leaders in our country

**Summary:**

On Sharad Joshi's 85th birth anniversary, Dinesh Sharma argues for remembering him as a champion of individual freedom and dignity against 'tragedy leaders' who exploited caste, farmer, and Dalit divisions in 1970s India to demand endless government concessions, perpetuating feudalism and blocking modernity from Western influences. These leaders offered cosmetic reforms that created an army of economically ignorant caste representatives, enemies of India's progress, preferring lifelong 'treatment' without cures. Joshi, conversely, viewed governments as a necessary evil, rejecting pedestaled demands that invite state brutality on citizens' freedoms. He pioneered producer freedom by demanding elimination of restrictive laws rather than harsher punishments, prioritizing dignity over entitlements. Meeting Joshi on 25 December 1994 transformed Sharma's view of leaders, shifting from idolizing Robin Hood figures and leftists to judging by societal impact. Joshi was a cosmopolitan polymath—reciting Sanskrit poetry yet embracing French—ridiculing caste identities as 'degeneration of birth' and valuing street vendors over degree-holding unemployed youth. The true tribute: reject demand lists, instead promote global ideas and innovations for productive, artistic, dignified lives, liberating humanity beyond birth-based limits.

**Key points:**

- Sharad Joshi rejected government demands in favor of individual freedom and dignity, viewing the state as a necessary evil.
- He advocated eliminating restrictive laws to liberate producers rather than imposing stricter punishments.
- Joshi critiqued caste-based leaders as anti-modernity exploiters who perpetuate suffering for prestige.
- Value productive street vendors over idle educated unemployed, as per Joshi's classical-liberal ethos.
- True tribute to Joshi: promote global human innovations for dignified lives, not government petitions.

**By Dinesh Sharma**

* * *

On this day, 85 years ago, Sharad Joshi was born like an ordinary man, like all of us. Then why Sharad Joshi’s birth should be remembered and celebrated?

When Sharad Joshi came to India in the 70s, there was a huge boom of tragedy leaders in our country. Based on the points of mutual disputes and differences that have been rooted in the society for centuries, the leaders, who run their shops of prestige on them, used to pretend social service by sitting on the chests of farmers, Dalits and the underprivileged. All these leaders had one thing in common, their mood was feudal and they were going to invalidate and unroot the contribution of modern western countries in our lives.

Their imagery of social service was like continuing the life-long treatment of the ailing patient but never treating. Their methods of the social reforms were cosmetic in nature, which on the face seemed very compassionate and giving, but internally could not be treated anywhere. As a result, the multiple so-called attempts to reform the society and the economy created an army of such reforming leaders in this country who had almost no knowledge and were not even remotely related to economics and modern science. By representing and leading their respective castes and religious crowds, these leaders had become the biggest enemies of India’s modernity and liberation. It almost seemed like that it was a well-strategized, well thought of formula to never demand freedom, instead, table a long list of demands before the government.

Sharad Joshi was one of the first leaders to acknowledge the importance of freedom and dignity, and, that, there is no greater value than leading a free and dignified life. He firmly believed that governments were a necessary evil and thus he simply sought independence from the government and nothing else. He advocated that governments should not be made a matter of virtuous faith by repeatedly placing long demand letters in front of them. This puts the government on a pedestrial and allows it to use its brutal power to infringe the dignity and freedom of a common man. Sharad Joshi had also initiated freedom of the producers by demanding relaxation and in fact complete elimination of the existing laws instead of seeking stringent laws. Laws which do not promote stronger punishments for the enemy, but promote values of freedom for them.

After meeting Sharad Joshi, my entire view and way of respecting politicians had changed. Because of him, I started understanding leaders, not from their words or speeches, but the impact their thoughts on society. Today, I do not respect the leaders that build their imagery and prestige on the suffering of the others. I see them as the problem itself and not the problem-solvers or solution. These people are selfish and egoistic, they want people to remain unhappy so that they can be immortal in their remembrance. 

Had I not met Sharad Joshi, I would have been idolizing the Robinhood type heroes in Indian films, the leftist writers and environment activists But meeting Sharad Joshi on 25 December 1994 created a parameter within me on developing a binary of like and dislike about the leaders, which never there before.

The real tribute to Sharad Joshi would not be to table a long list of demands to the government. It would rather be to make people’s lives more productive, dignified and artistic by posing in front of them, the ideas, thoughts and human innovations that have taken place in every corner of the world.

As much as he was interested in the art and culture of the past, he was equally fascinated by the knowledge of the West. While he could recite and explain a poem written in Sanskrit, he was equally interested in French. He was a cosmopolitan, pioneered global greats of the era, who was beyond the boundaries of religion, caste, language, and nation. And that’s why he used to pick a funny bone by minimizing these identities as “degeneration of birth” only. He hoped from the youth to not fall prey to any misunderstanding of their past and present. He hoped from the youth to travel to the skies at the risk of failing, to go beyond the horizon but always keep finding ways of liberating their nation and the whole of humanity. For him, a vendor selling food on the streets was a much more valuable element than an unemployed youth seeking employment by sitting on his degrees. If he would have, he would probably go to the food selling vendor’s shop and get a photo of him.

Sharad Joshi ridiculed and pointed out to the leaders who advanced the idea a casteless society, by sticking to their own caste identities. He wanted to inflict conceptualize and promote a world where nobody should ever require birth and caste certificates. At whatever age, whichever place one stand, one should get the right to the best expression. He aspired to reject every loop that binds human birth at any limit.

I consider myself lucky that I got a chance to meet and interact with him, I got the fortune to hear his golden words from his mouth. I offer my heartfelt tribute to the great soul on this memorial day today.

*(This piece has been sourced, translated and reproduced here with permission from the Facebook wall of Mr Dinesh Sharma.)*  

* * *

**About Dinesh Sharma**

Advocate Dinesh Sharma practices law at the district court and the Nagpur bench of Bombay High Court. Across Maharashtra, he is often called to speak on economics and related topics. He is a member of the Maharashtra committee of the Swatantra Bharat Party.

## SO Musings – Hindi Raj and Hindu Raj

Original: https://www.spontaneousorder.in/p/hindu-raj

Author: Spontaneous Order

Published: 2019-08-30T13:05:23.000Z

Topics: language-policy, government-coercion, hindu-nationalism, voluntary-choice

> This is an excerpt from an article written by P Kodanda Rao for the July 1962 issue of The Indian Libertarian Journal. “Normally, if people desire anything, for pleasure or profit, they seek it voluntarily and without official pressure. For instance, mo

**Summary:**

In this 1962 excerpt from The Indian Libertarian Journal (originally 1958), P Kodanda Rao argues from a classical-liberal standpoint against the Government of India's coercive push for Hindi as the national language. He asserts that true demand for any good or service, like rail travel, air transport, or education in science and technology over arts, arises voluntarily without official pressure due to intrinsic merits. English thrives despite government restrictions precisely because of its value, while Hindi's 'all-India value' must be proven through voluntary adoption, not ruthless coercion. Rao warns that 'Hindi Raj' serves as a sinister advance guard for 'Hindu Raj,' with the government's Hindi mania unwittingly aiding organizations like Jan Sangh and RSS. Patriotic Indians must act swiftly, applying maximum constitutional pressure through agitation for 'English Ever: Hindi Never' to avert this twin calamity and preserve liberty from state-imposed cultural uniformity.

**Key points:**

- Voluntary demand, not government coercion, drives adoption of languages and services like travel and technical education.
- English is sought despite official discouragements due to its intrinsic merits.
- Imposing Hindi advances 'Hindi Raj,' which paves the way for 'Hindu Raj' and benefits Jan Sangh and RSS.
- Citizens should agitate immediately for 'English Ever: Hindi Never' using constitutional pressure.

**By Spontaneous Order**

* * *

This is an excerpt from an article written by P Kodanda Rao for the July 1962 issue of The Indian Libertarian Journal.

“Normally, if people desire anything, for pleasure or profit, they seek it voluntarily and without official pressure. For instance, more and more people are travelling by rail, road, air and water, voluntarily and without official coercion. The voluntary demand for educational facilities has far exceeded the current supply, and more students are voluntarily seeking education in science and technology than in arts because of their superior usefulness. Similarly, if Hindi has any all-India value, it will be sought after without the unconscionable pull and push of the mighty Government of India armed with enormous persuasive and coercive powers and only too willing to use them ruthlessly. English, on the other hand, because of its intrinsic merits, is being sought voluntarily, in spite of discouragements and restrictions imposed by the Government…

… Hindi Raj is a sinister advance guard of Hindu Raj. The Government of India, with Its Hindi mania, is, consciously or unconsciously, playing into the hands of Jan Sangh and RSS. The patriotic and nationalist Indians, who would stave off the twin calamity, must bestir themselves before it is too late and bring into operation maximum constitutional pressure on Hindi Government and Hindu RSS by agitating immediately for *English Ever: Hindi Never*.”

*Access the full document [here.](http://indianliberals.in/~_admin/pdflanguage?id=654359818.pdf)*

*First Published in The Indian Libertarian – September 1958*

*Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/index), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Reflections on Researching Reality: The Wait and The Watch

Original: https://www.spontaneousorder.in/p/wait-and-watch

Author: Spontaneous Order

Published: 2019-08-25T12:45:27.000Z

Topics: education-administration, bureaucracy, field-research, government-inefficiency

> Over the summer, we set out to unpack the functioning of the education administration in Delhi and Haryana. To begin with, we studied legislation governing education and notifications of the state governments in Haryana and Delhi. We analysed the Right ..

**Summary:**

Bharat Sharma reflects on the challenges of researching education administration in Delhi and Haryana as a CCS intern, revealing bureaucratic opacity from a classical-liberal lens critical of government inefficiencies. Initial analysis of legislations—the Right of Children to Free and Compulsory Education (RTE) Act, 2009 and Rules; Delhi School Education Act and Rules, 1973; Haryana School Education Act, 1995 and Rules—yielded only sketchy outlines of officials' powers and responsibilities, with no clear demarcations or job descriptions, even in vacancy notices. To uncover actual functions, the team visited government offices for surveys and interviews but faced persistent hurdles: officials were absent, busy, or refused meetings despite official permission letters from Delhi's Directorate of Education. Extensive waiting outside offices in 40-degree heat—sometimes a full week for one senior official—allowed participant-observation of daily operations, including long queues of citizens with children seeking document signatures (e.g., school transfer certificates) or urgent complaint resolutions during limited 'public hearing' times (10-11 A.M. in Delhi). Guards' remarks like 'Aap phir aa gaye' marked growing persistence amid rejections. One cooperative officer finally provided survey data. The experience shattered assumptions of research simplicity, demonstrating that bureaucratic reality is far more complex and inefficient than laws suggest.

**Key points:**

- Legal frameworks like RTE Act 2009 and state education acts offer vague, incomplete descriptions of officials' roles and responsibilities.
- Field visits to Delhi and Haryana education offices involved repeated rejections, absences, and long waits, even with official permission.
- Observations during waits revealed citizens queuing for basic services like document approvals during short public hearing slots (10-11 A.M. in Delhi).
- Persistence eventually yielded some survey responses, breaking a streak of failures.
- Bureaucratic functioning proved far more complex than legislative documents indicate, beyond official notifications.

**By Bharat Sharma**

* * *

Over the summer, we set out to unpack the functioning of the education administration in Delhi and Haryana. To begin with, we studied legislation governing education and notifications of the state governments in Haryana and Delhi. We analysed the Right of Children to Free and Compulsory Education (RTE) Act, 2009 and Rules, Delhi School Education Act and Rules, 1973 and the Haryana School Education Act, 1995 and Rules. But the laws provided only a sketchy picture of the powers and responsibilities of government functionaries. There was no clear demarcation between the responsibilities of one functionary from another. Job descriptions were rare and scattered. Documents like vacancy notices, where we expected to find a brief idea about the responsibilities of functionaries, only mentioned a brief eligibility criterion. To fill these gaps and understand the nature of functions performed by each official, we decided to make the rounds of government offices talking to officers and using survey instruments.

Excited about the opportunity to do primary research, we all *marched* towards the battlefield (our battlefield being government offices). Halfway through the first week, our spirits began to sag. Officials refused to meet with us: either they were busy at that moment, or simply not in the office. More exasperating was to successfully find them in their designated rooms; sometimes we had to try our luck by visiting each room in the building. While we did fail at the task of finding certain officials, it gave us the opportunity to pay close attention to the general functioning of the department.

We wanted to *perceive* the administrators’ role in-and-around these offices as researchers qua observers. What does a government office look like? What are people seen doing? What is the administrator’s relationship with them? *Waiting* outside the offices gave us a chance to surveil, watch and note in detail, the daily functioning of departments and the various functionaries involved. As participant-observers, we saw people huddled outside almost any room in the department office of both Delhi and Haryana—some waited by themselves in the 40-degree heat, some waited with their children in tow, some passed their time playing Candy Crush; some nagged guards for their turn at *darshan*. Were they in the same boat as us? We asked them their reason for visiting the office: most of them answered that the concerned officer had to sign a few of their documents like the school transfer certificate or they had to get a major complaint resolved urgently. These citizens’ grievances were to be addressed during ‘public hearing time’ (usually 10-11 A.M. in Delhi).

The longest *wait* of our research was for a senior official in the Directorate of Education, Delhi. We visited and stood outside his office for about a week, later being informed by one of the guards that he was on leave for a few days. The day he did come, he was late for his designated public hearing time, with an ever-increasing queue outside his office. When we tried to approach him, we were asked yet again, to wait.

After a few of these failed attempts at talking to officials during the public hearing slot, we secured an official permission letter from the Directorate. Nevertheless, officials at other offices rejected our request without any consideration, even after showing them the permission letter. They were not ‘authorised’ for this task and it wasn’t a part of their ‘job description’. Having been shooed away by everyone over the course of the field visits, our toleration for rejection improved with each passing day. We took the guards’ greeting of *“Aap phir aa gaye”* as a pat on the back for the persistence. It was only after one officer enthusiastically agreed to interact with us, that our failure streak was broken, and we had survey responses to build our dataset.

When we began our research, we were struck by how simple the aim of the project was: who does what in the education administration, why they do it, and *how* they do it. However, as it turns out, our assumptions about the “simplicity” of the task were all wrong. Each day had a new experience for us, as we waited and watched. We observed things that official orders and notifications could never make us understand and found that the actual picture was far more complex than what legislation could present.

* * *

**About Bharat Sharma**

Bharat Sharma was a Researching Reality intern at CCS in 2019. He is studying Philosophy, Politics and Economics at Ashoka University.

## SO Musings: Conditions for Economic Growth

Original: https://www.spontaneousorder.in/p/so-musings-conditions-for-economic-growth

Author: Spontaneous Order

Published: 2019-08-23T10:43:20.000Z

Topics: economic-growth, india-economy, classical-liberalism, free-markets

> In this article, English classical economist Prof. William Harold Hutt answers how India can progress most rapidly from relatively very low average standards of living to standards comparable with those achieved in Western Europe and the United States. ..

**Summary:**

English classical economist Prof. William Harold Hutt, in a 1964 article, outlined ten conditions for India to rapidly advance from low living standards to those of Western Europe and the US, principles the post deems timeless amid an impending recession. From a classical-liberal viewpoint, rapid development hinges on: (1) taxation encouraging thrift without discriminating against the provident; (2) attracting foreign capital via assurances against nationalisation, confiscatory taxes, and acceptance of foreign control; (3) official recognition of profit as reward for responsible enterprise; (4) constitutional entrenchments voiding race, caste, or income-based discrimination; (5) resisting import tariffs or quotas; (6) accelerating agricultural mechanisation for large-scale efficiencies alongside industrialisation; (7) avoiding politically motivated grandiose public investments in favor of sequenced development; (8) prohibiting private coercion in setting prices, wages, or outputs; (9) renouncing inflationary policies to curb corruption; and (10) preventing unbridled population growth. The post laments that no Indian government has seriously pursued these, opting for ad-hoc policies that perpetuate economic slowdowns.

**Key points:**

- Encourage thrift through taxation that does not penalise the provident.
- Attract foreign capital by avoiding nationalisation, confiscatory taxes, and affirming foreign control.
- Foster enterprise by explicitly recognising profit as its reward.
- Renounce inflation, prohibit coercive wage/price setting, and resist import restraints to create a free-market climate.
- Mechanise agriculture rapidly and control population growth to support industrialisation.

**By Spontaneous Order**

* * *

In this article, English classical economist Prof. William Harold Hutt answers how India can progress most rapidly from relatively very low average standards of living to standards comparable with those achieved in Western Europe and the United States.

Given the inevitable onset of a recession in the Indian economy, his ideas, presented for the first time in 1964, remain as important today as they were then. While summing up the article, Prof. Hutt argues that India’s rapid development will depend upon the success with which:

1.  thrift can be encouraged by a taxation system which does not discriminate against the provident;
    
2.  the foreign capital needed can be attracted by the creation of faith that nationalisation or confiscatory taxation will be avoided and by official acknowledgement of the reasonableness of foreign control of foreign capital accepted;
    
3.  enterprise generally can be fostered by explicit official recognition of profit as the reward for wise and responsible direction of productive activity;
    
4.  a climate of economic justice can be created through constitutional entrenchments whereby legislation or private agreements which discriminate on grounds of race, caste or income will be unconstitutional and void;
    
5.  the temptation to distort the form of development by tariff or quota restraints on imports can be overcome;
    
6.  the mechanisation of agriculture can be hastened so that the economies of large- scale cultivation can be won side by side with industrialisation;
    
7.  the political incentive to invest public capital in spectacular, grandiose schemes can be resisted and an appropriate time sequence in development permitted;
    
8.  the determination of prices, wage-rates and outputs by private coercion (as through strikes or boycotts) can be forbidden;
    
9.  inflationary policy can be renounced, a major incentive to corruption (which accompanies the repressed form of inflation) being thereby eliminated; and
    
10.  unbridled population growth can be prevented.
     

Even after 55 years, one can clearly see that these prescriptions remain timeless and note that no Indian government has worked seriously on these long term solutions to instil rapid economic growth. Our misguided policies are largely ad-hoc and continue to lead us from one slowdown to another.

*Access the full document [here](http://indianliberals.in/~_admin/pdflanguage?id=1604060426.pdf).*

*First Published in the [Forum of Free Enterprise](http://www.forumindia.org/) in August 1964.*

*Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/index), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Genetically Modified Crops – Facts Vs Fiction

Original: https://www.spontaneousorder.in/p/genetically-modified-crops-facts-vs-fiction

Author: Spontaneous Order

Published: 2019-08-21T13:30:26.000Z

Topics: gm-crops, agricultural-productivity, farmer-choice, biotech-regulation

> India’s journey from a food deficient and famine-affected country towards self-sufficiency and further to become one of the top net producers and exporters in the world has been remarkable. However, the average yield per hectare is much less in India co

**Summary:**

India's agricultural progress from food deficiency to top exporter is notable, yet yields lag behind the US, Europe, and China, leaving farmers poor despite favorable conditions. GM crops like Bt cotton—now 90% of India's cotton—have boosted yields, farmer incomes, reduced pesticide use, and positioned India as a major exporter, demonstrating technology's potential. Fears of health risks (e.g., cancer, diabetes) lack evidence, as affirmed by Indian scientists in Current Science, long-term US/Canada use, livestock studies, and no issues from GM cotton-fed cows. Environmental concerns are ironic given agriculture's GHG role and unopposed subsidies like water; GEAC cleared Bt Brinjal and GM Mustard despite protests, ignoring 129 Nobel Laureates' support. Monopoly fears overlook farmers' informed demands. The classical-liberal solution rejects blanket moratoriums that stifle innovation and food security, advocating farmer independence to choose technologies, consumer labeling for informed choices, institutional freedom for regulated research/trials, and science-based debate via academies like US/Indian National Science Academies.

**Key points:**

- Bt cotton adoption has increased yields, cut pesticide costs, raised farmer incomes, and made India a top cotton exporter.
- Scientific consensus, including Indian and international studies, finds no health or environmental harms from GM crops after decades of use.
- GEAC approvals for Bt Brinjal and GM Mustard should override protest-based bans to enable productivity gains.
- Empower farmers' choice of GM tech, mandate labeling for consumers, and ensure regulated R&D to boost incomes and security.

**By Manasa Pidatala**

* * *

India’s journey from a food deficient and famine-affected country towards self-sufficiency and further to become one of the top net producers and exporters in the world has been remarkable. However, the average yield per hectare is much less in India compared to the US, Europe, and China, and has a great potential to improve on this front, considering the favourable conditions like tropical climate, varieties of soils, different geographical regions, etc. While our food production surged up, the average farmer in India remained poor. 

Among the many solutions that address both productivity and farmers’ incomes, Genetically Modified (GM) crops technology is a prominent one. GM crop technology comes with a multitude of benefits. For instance, Bt cotton, which is currently the only GM crop that is legal in India, has increased farmers’ income and has also improved the yields, making India one of the largest exporters of cotton in the world. It has also reduced the amount of pesticides used, thus reducing the input costs as well as making a positive impact on the environment.

However, GM crop technology is also mired in multiple controversies. The recent incidents of Kisan Satyagraha by Shetkari Sanghatana in Akola, Maharashtra and the uprooting of Bt Brinjal planted by a Haryana farmer bring out the need to understand if these concerns are based on scientific evidence or unfounded assumptions and fears. 

One of the foremost fears about GM crops is their impact on the health and well-being. Anti-GMO activists claim that GM crops cause diseases like diabetes, heart attack, cancer, etc. However, a group of Indian scientists came together in this [article](https://www.currentscience.ac.in/Volumes/117/03/0390.pdf) in Current Science Journal to present various perspectives of GM crop technology and they emphasize that there has been no conclusive evidence of any harmful effects on health. GM crops have been in use in countries like Canada and the US for many years now, and there has been no such evidence so far relating GM crops to any particular disease. In India, almost 90 percent of cotton is of GM variety, and these GM cotton seeds are also fed to the cows. Till date, there have been no incidents of negative impact of GM crops on cows or of such cow’s milk on humans. A recent [study](https://www.sciencedirect.com/science/article/pii/S0278691517304829) published in the Food and Chemical Toxicology Journal about the health effects of feeding GM crops to livestock corroborates the same.

Another reservation about GM crops comes from the fact that most of the GM crops are produced and sold by a few big multinational companies like Bayer-Monsanto, DowDuPont, etc. which currently have almost a monopoly on GM technology. Hence, the popular narrative associates GM technology to these companies instead of assessing the benefits of the technology independently. This is the reason for the wide belief that the farmers who demand access to the GM technology are considered being ‘misled’ or ‘cheated’, whereas the truth is that they are well aware of what they are asking for. 

The effects of GM crops on the environment is one more major concern. Agriculture itself is proven to be one of the chief sources of greenhouse gases and hence is one of the reasons for global warming. But the environmental activists are not suggesting that we should stop cultivating crops totally, are they? Neither are they arguing against water subsidy, which is one of the main reasons for reducing underground water levels. Ironically, Bt Brinjal and GM Mustard crops, in spite of being cleared by the Genetic Engineering Approval Committee (GEAC) for no harmful effects on the environment, are banned in the country based on their protests. Unfortunately, the [campaign](https://www.sciencedirect.com/science/article/pii/S2444569X18300064) to support GM crops by 129 Nobel Laureates could not be as persuasive as the fear psychosis led by the anti-GM activists. 

That said, the author is not suggesting that everyone should now welcome GM crops with open arms and ignore all their doubts. The concerns about uncertainties in future are understandable. But imposing blanket moratoriums based on protests take away a huge opportunity to solve the future food security problems on a global scale while hampering any further technological innovations. We need to arrive at plausible solutions like rigorous and transparent methods of testing the technology, labeling of GM products to ensure consumer awareness and a healthy debate based on reports published by institutions like the US National Academy of Sciences, African Academy of Sciences and Indian National Science Academy. 

What we need today is the independence of farmers to choose which technology serves them the best in improving their yields and income, independence of consumers to make an informed choice of an agricultural product and independence of institutions and agritech companies to carry out research and trials in a regulated manner.   

* * *

**About Manasa Pidatala**

Manasa is a Senior Associate at the Centre for Civil Society. She speaks on Agricultural Policy challenges in India at our epolicy program.

## SO Musings: Do We Deserve Our Prime Ministers?

Original: https://www.spontaneousorder.in/p/so-musings-do-we-deserve-our-prime-ministers

Author: Spontaneous Order

Published: 2019-08-17T08:02:49.000Z

Topics: indian-politics, liberal-history, swatantra-party, pseudo-socialism

> In 1991 Minoo Masani, three-time Member of Parliament, and one of the founders of the Swatantra party wondered if we deserve our Prime Ministers. His words, originally written against the policies of the former Prime Minister VP Singh, are as true today..

**Summary:**

This fragmentary post quotes Minoo Masani, a three-time MP and Swatantra Party founder, from a 1991 Freedom First article, where he questioned if Indians deserve their Prime Ministers—originally targeting VP Singh's policies but deemed equally true today. It links to the full document and the Indian Liberals archive, framing it within Spontaneous Order's mission to highlight liberal critiques of India's pseudo-socialist dominance post-Independence, contrasting it with a liberal political order that could have transformed the nation.

**Key points:**

- Minoo Masani's 1991 critique of Prime Ministers, aimed at VP Singh, remains relevant per the post's classical-liberal framing.

**By Spontaneous Order**

* * *

In 1991 Minoo Masani, three-time Member of Parliament, and one of the founders of the Swatantra party wondered if we deserve our Prime Ministers. His words, originally written against the policies of the former Prime Minister VP Singh, are as true today as they were then.

[

![](https://substackcdn.com/image/fetch/$s_!-ouS!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F37b0aeb0-4759-4146-81aa-4826fa248482_384x528.png)



](https://substackcdn.com/image/fetch/$s_!-ouS!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F37b0aeb0-4759-4146-81aa-4826fa248482_384x528.png)

*Access the full document [here](http://www.freedomfirst.in/uploads/issues/pdf/408.pdf)*.

*First Published in Freedom First – January 1991*

*Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/index), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

[Read more SO Musings](https://spontaneousorder.in/?s=SO+Musings)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Dealing with Babus – A Reality of Errors

Original: https://www.spontaneousorder.in/p/babus_fee_regulation

Author: Spontaneous Order

Published: 2019-08-13T13:25:35.000Z

Topics: bureaucracy, government-inefficiency, fee-regulation, transparency

> When we started the Researching Reality internship at the Centre for Civil Society, we had some sense of what we were signing up for—going to government offices and dealing with babus would be routine. However, we realised some weeks in that we had gros

**Summary:**

Adit Shankar recounts the frustrations of Researching Reality interns at CCS when dealing with Indian government bureaucrats (babus) during research on fee regulation. Government websites feature shoddy interfaces, broken links, and outdated contact lists—even one 'updated' list from an office included retired officials' numbers. Officials offered inconsistent guidance, dismissed queries by claiming data was not public or available online, and proved unresponsive even to RTIs, which mirrored the same evasive attitudes in formal language. A pivotal discovery was the sheer inefficiency: none of the 30 listed supervisors for a 2017 government committee on fee regulation had heard of it, forcing a complete rethink of the research approach due to ad hoc processes. Interviews with parents and schools—opposing parties in fee disputes—revealed shared disillusionment with the government's opacity, arrogance, arbitrariness, and lack of accountability, contradicting expectations of favoritism in this politicized issue. From a classical-liberal viewpoint, these experiences underscore the barriers to transparent, accountable governance, highlighting the long road to an efficient 'service delivery' model India aspires to.

**Key points:**

- Government websites and contact lists are outdated, dysfunctional, and include retired officials' details.
- Officials provide inconsistent information, refuse meetings, and evade RTIs with claims that data is not public.
- None of 30 listed supervisors knew of the 2017 fee regulation committee, exposing ad hoc processes.
- Parents and schools, despite opposing interests, universally decry government's opacity, arrogance, and lack of accountability.
- India needs a shift to efficient service delivery governance to overcome bureaucratic inefficiencies.

**By Adit Shankar**

* * *

When we started the Researching Reality internship at the Centre for Civil Society, we had some sense of what we were signing up for—going to government offices and dealing with *babus* would be routine. However, we realised some weeks in that we had grossly underestimated the frustration that these interactions would cause—to the point that we would want to pull our hair out.

It started with smaller things. Most government websites looked unremarkable, with a shoddy interface, links that did not work, and cumbersome filter tools. The contact lists were outdated, given the high frequency of transfers of bureaucrats. The one ‘updated’ list we received from the office itself contained numbers belonging to retired people, who were so resigned from their former positions that assisting us in any way was an utterly puzzling proposition.

It would be unfair, however, to generalise. As clueless students working on research projects, we did receive some help and guidance along the way. However, instead of solving problems, this only created more—everyone would provide different versions about the same processes. Moreover, there was not much to go on to verify things. Since we were working on fee regulation—a ‘sensitive’ financial topic—the common refrain was, *“Yeh sab public domain mein nahin hai* (All this is not in the public domain).”

Of course, the larger chunk was unwilling to meet us, and even getting an audience would not be particularly fruitful: *“Humse kyun poochh rahe ho? Website par sab hai* (Why are you asking us? Everything is on the website).” We thought RTIs might help us where these same officials could not shirk our queries with such convenient, ill-defined excuses. However, the replies we received betrayed the same attitude, only dressed in a language that is more formal. Even the law could not compel officials to be responsive.

Nevertheless, while these hurdles could be overcome, perhaps the most important insight for us was the sheer inefficiency and, at times, the cluelessness of government officials. We had started our project thinking we would analyse a particular committee set up by the government in 2017. It seemed like the one-stop-shop for all things fee-related if one were to go by circulars and the government’s proclamations. However, the reality was ridden with errors: not one, out of a list of 30 that were supposedly supervisors of the committee, had even heard of this committee. We had to rethink our entire approach since we realised that the processes at hand were *ad hoc* and improper.

One strategy we employed was to get in touch with outsiders who have been involved in the system—parents and schools, the accusers and the defendants in fee disputes. Understandably, both parties had interests opposed to each other, and we were able to gauge so much through our interviews. What they were united in, however, was their unequivocal disillusionment with the government—the opacity, arrogance, arbitrariness, and the complete lack of accountability. Their negative opinions of the government would come out, unprovoked.

In a heavily politicised issue where we see the government openly taking a firm stance against one of the parties involved, we expected that at least the other party would be content with the government’s work. However, the reality is far from that. There lies a long road ahead to an efficient, ’service delivery’ model of governance, that the country aspires to achieve.

* * *

**About Adit Shankar**

Adit Shankar was a Researching Reality intern with CCS in 2019. He is currently pursuing Economics (Hons.) from Ashoka University.

## Private schools closed due to RTE: Data missing

Original: https://www.spontaneousorder.in/p/schools_data_missing

Author: Spontaneous Order

Published: 2019-08-11T11:40:14.000Z

Topics: rte-act, private-schools, school-closures, education-regulation

> Much has been said about the Right of Children to Free and Compulsory Education (“RTE”) Act since its enactment in 2009. It was the first central legislation to mandate compulsory government recognition for all private schools’ basis minimum input s

**Summary:**

The Right to Education (RTE) Act of 2009 mandates compulsory government recognition for private schools based on rigid input standards—excluding outcomes—with penalties of one lakh rupees or ten thousand per day for non-compliance, yet official data on unrecognised schools, those under the radar, or closures remains negligible a decade later. In 2015, parliamentary data revealed 2173 private schools forced shut across three states and one union territory: 1170 in Punjab, 998 in Madhya Pradesh, four in Himachal Pradesh, and one in Puducherry—the last such disclosure. Centre for Civil Society's RTIs in 10 states reported just 15 closures, with seven states withholding information, while media scans from 2015-2018 uncovered 2469 closures in 15 states. Private schools enrol 8 crore children (32% of total) across over 300,000 institutions per 2016-17 UDISE data, yet states like Punjab and Madhya Pradesh claim no records. Closures lack due process, as Haryana's 2013 mass shutdowns drew court rebuke for 'stereotyped orders' without specific reasons. This data void—whether from reluctance or poor recording—leaves policymakers 'flying blind,' incapable of evidence-based reforms and dooming promises of quality education from classical-liberal perspectives favouring market-driven private provision over input-heavy regulation.

**Key points:**

- RTE Act's input-based recognition has shuttered thousands of private schools, with 2173 closures reported in 2015 across select states.
- RTIs reveal severe data gaps: only 15 closures in 10 states, seven unresponsive, contrasting media's 2469 closures from 2015-2018.
- Private schools serve 32% of India's 25 crore schoolchildren, yet governments track neither enrolments, fees, nor outcomes in unrecognised ones.
- Absence of due process in closures, as criticised by courts in Haryana case, exacerbates regulatory overreach without evidence.
- Without systematic data, evidence-based school policy is impossible, hindering classical-liberal goals of freeing private education.

**By Ritika Shah**

* * *

Much has been said about the Right of Children to Free and Compulsory Education (“RTE”) Act since its enactment in 2009. It was the first central legislation to mandate compulsory government recognition for all private schools’ basis minimum input standards for everything *except* outcomes. Failure to comply meant a penalty of one lakh or ten thousand *per* day for these schools. 10 years since its enactment, there is negligible information on how many schools are unrecognised, how many are under the radar and how many have been shut down.

In a 2015 parliamentary question on the number of schools closed, Smriti Irani, the former Minister of Human Resource Development, reported that 2173 schools in 3 states and 1 union territory had been forced shut. 1170 of these were shut in Punjab, 998 schools in Madhya Pradesh, 4 in Himachal Pradesh and 1 in Puducherry. This was the last time any such information was made available by the government.

The Centre for Civil Society set out to [track the extent of school closures](https://ccs.in/sites/default/files/research/school-closure-report.pdf). Ironically, while the parliamentary question pointed to 2173 school closures already until August 2015, RTIs filed in 10 states reported closure of only 15 schools. Of 10 states in which RTIs were filed, 7 states *did not provide information*.  A survey of media articles between 2015 and 2018, on the other hand, revealed closure of 2,469 closures from 15 states.

Consider this: Punjab and Madhya Pradesh reported the closure of 1,170 and 998 schools in August 2015 but both states rejected the RTE application due to lack of data on school closure. Where information was provided, for example in Delhi, the reason for closure is not coherently stated. One school was closed under RTE due to ‘Poor enrolment, poor connectivity, unable to pay the rent etc.’ These reasons, however, do not fall under ‘norms and standards’ a private school has to comply for, as under Section 19 of the RTE Act and could indicate a voluntary closure.

The lack of data on school closures can mean two things: either the states are reluctant to disclose the data or have not recorded the data systematically—both are a serious cause for concern. Actions on private schools affect a sizeable portion of the population. 8 crore children, accounting for 32% of the total enrolment, were enrolled in over 3,00,000 lakh private schools in 2016-17, according to the Unified District Information Management System for Education.

Besides the recording of data, there is no due process that the government is required to follow before it shuts a school down. In August 2013, the state of Haryana had issued show-cause notices to all unrecognised schools and gave them 15 days to provide evidence for why they should not be shut. Within a month, an order was passed to close the schools resulting in a court dispute (A.V. Public School and others v. the State of Haryana and others 2013). The court criticised the state for passing “stereotyped orders” to shut schools, without notifying the school of reasons for which it was asked to close shop.

The state of data collection and the absence of due process in shutting schools is worrying. How can there be an evidence-based policy for schools since there is no evidence, to begin with? The government does not know the number of unrecognised schools, the fee charged, enrolments in such schools, outcomes these schools offer, the actions that were taken post-implementation of RTE and its impact on children. What can we expect of policymakers are flying blind? Promising free education, as the latest Congress Manifesto does, is sexy but remember that unless data become dowdy, we cannot deliver quality education.

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* * *

**About Ritika Shah**

Ritika has a bachelors in economics (honors) from Delhi College of Arts and Commerce, Delhi University. Prior to joining CCS, she worked as a research analyst with Cians Analytics and Rocsearch, for over 2.5 years. She developed an inclination for the social sector during her college years, when she interned with various organizations including Teach for India, Becoming I and Centre for Equity Studies. She has a keen interest in reading, travelling and yoga. Her areas of focus include economics, philosophy and theology.

## SO Basically – Episode 06 | Paani Ki Problem Hai Kya?

Original: https://www.spontaneousorder.in/p/so-basically-paani-ki-problem-hai-kya-water-crisis

Author: Spontaneous Order

Published: 2019-08-09T09:44:17.000Z

Topics: water-management, india-water-crisis

> On one hand, NITI Aayog has announced that 21 Indian cities are facing acute water crisis and will run out of groundwater by the year 2020, on the other, multiple states and cities are currently facing dangerous floods. Clearly, India has a water manage..

**Summary:**

This promotional post for SO Basically Episode 06 highlights India's water management crisis, citing NITI Aayog's warning that 21 cities will exhaust groundwater by 2020 amid ongoing floods in states and cities. It teases a classical-liberal analysis and policy ideas for better water resource management in the video, without providing substantive details here.

**Key points:**

- NITI Aayog reports 21 Indian cities face groundwater depletion by 2020.

**By Spontaneous Order**

* * *

On one hand, NITI Aayog has announced that [21 Indian cities are facing acute water crisis and will run out of groundwater by the year 2020](https://www.ndtv.com/india-news/21-indian-cities-will-run-out-of-groundwater-by-2020-report-2056129), on the other, multiple states and cities are currently facing dangerous floods. Clearly, India has a water management problem.

In the latest episode of SO Basically, we try to analyse this water crisis and suggest policy ideas to manage our water resources better.

Do share this video, and let us know of your thoughts in the comments section below.

[Click here](https://spontaneousorder.in/tag/so-basically/) for more SO Basically episodes.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: Any Hope for Indian Liberals?

Original: https://www.spontaneousorder.in/p/hope_for_indian_liberals

Author: Spontaneous Order

Published: 2019-08-06T12:29:40.000Z

Topics: indian-liberalism, historical-liberalism, economic-reform, political-hope

> The ancient “Vedanta tradition was a cradle of liberal tenets. The liberalism of ancient India, however, got suppressed under successive foreign rulers. Even the forces that came along with the freedom movement were all statist in the sense that they al

**Summary:**

The post laments that ancient India's Vedanta tradition cradled liberal tenets, but these were suppressed by foreign rulers and a statist freedom movement, where even Gandhi's anarchism was mere rhetoric. Post-Nehruvian socialism's decline has not ushered in liberalism but populist measures and lumpen chauvinism, with liberalism dismissed as a foreign import favoring the affluent over the masses' welfare needs. A serious liberalization program demands restoring law and order, cleansing the judiciary, pruning economic regulations, dismantling bureaucracy, upholding constitutional fundamental rights, and crafting reasonable exit policies. Yet, from a classical-liberal viewpoint, history proves liberty blossoms in unexpected places and times; the world is dismantling fragmenting walls, and India cannot long remain a statist island. Indians inherently believe in minimal decencies and resist tyrants, as no Indian Hitler could endure, providing sufficient hope for liberty and equality seekers.

**Key points:**

- Ancient Vedanta embodied liberal tenets suppressed by foreign rule and statist independence forces.
- True liberalization requires restoring law and order, judicial reform, deregulation, bureaucratic dismantling, constitutional rights, and exit policies.
- Nehruvian socialism is yielding to chauvinistic populism, not liberal entrepreneurship.
- History shows liberty emerges unexpectedly; global trends and Indian resistance to tyranny offer hope.

**By Spontaneous Order**

* * *

*The ancient “Vedanta tradition was a cradle of liberal tenets. The liberalism of ancient India, however, got suppressed under successive foreign rulers. Even the forces that came along with the freedom movement were all statist in the sense that they all favoured a strong interventionist state and even Gandhi’s anarchism proved to be little more than a scoring point with them. Today, with the fall of the Nehruvian model, there still seems to be little hope for the liberal democrats. With the Government itself resorting to blatantly populist measures, a serious programme of liberalisation would require the restoration of law and order, clearance of the Aegean stables of the judiciary, further pruning the forest of economic regulations, dismantling the bureaucracy, restoration of fundamental rights under the constitution and the working out of reasonable exit policy.*

Liberalism is far from being the dominant or even the mainstream school in India. Worse still, most consider liberalism as an idea imported from abroad and as being derogatory to national pride. Within the country, the cry goes, that liberalism suits the convenience of the affluent and the strong minority and militates against the welfare security net that the weaker masses of the society need so badly. The defunct Nehruvian Socialism is being replaced not by the vibrant forces of liberal entrepreneurship but by lumpen chauvinistic and communal jingoism…

…**But history has ample evidence that liberty blossoms in most unexpected of places and at seemingly impossible times**. The world is moving towards demolishing walls that have fragmented and distorted the world. India could not remain for long an island of statism. Indian history shows that people believe in minimal decencies and are capable of fighting against tyrants if a Gandhi comes along. An Indian Hitler will have to be exceptionally lucky to survive for any length of time. This much hope ought to be enough for seekers of liberty and equality.

*Access the full document [here](http://indianliberals.in/~_admin/pdflanguage?id=477849139.pdf).*

*First Published in The Liberal Times – November 1995*

*Other editions of publication can accessed at [Indian Liberals](http://indianliberals.in/index), an open, multilingual digital archive committed to preserving liberal voices the Indian public sphere.*

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* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## The Moderate Liberalism of “Ferocious Mehta”

Original: https://www.spontaneousorder.in/p/pherozeshah-mehta

Author: Spontaneous Order

Published: 2019-08-04T16:01:47.000Z

Topics: classical-liberalism, indian-nationalism, local-self-governance, municipal-reform

> “The microscopic minority can far better and far more intuitively represent the needs and aspirations of their own countrymen than still more microscopic minority of the omniscient district officers.”

**Summary:**

Sanjeet Kashyap argues that Sir Pherozeshah Mehta, a Bombay-based moderate liberal, deserves greater recognition for embodying classical-liberal principles in Indian nationalism, particularly through his advocacy for local self-governance, which has been overshadowed by radical extremists like Tilak and Gandhi's mass subaltern politics. Born into a Parsi merchant family, Mehta studied law in London (1865-68), where he engaged with Dadabhai Naoroji's East India Association and Gladstonian liberalism, forging connections with figures like Badruddin Tyabji. As a founder of the Indian National Congress in 1885, Mehta championed native Indian interests in legislative councils, opposing the Arms Act, Vernacular Press Act, and Curzon's university controls while supporting the Ilbert Bill. Dubbed the 'Father of Municipal Government in Bombay,' he proposed a representative body leading to the 1872 Bombay Municipal Act, served as municipal commissioner (1873) and chairman (1884-85, 1905), and invoked John Stuart Mill and Herbert Spencer for decentralization and checks on local bodies. Defending INC against 'microscopic minority' charges, Mehta's 'plea-prayer-petition' constitutionalism represented a liberal space now heirless in India.

**Key points:**

- Sir Pherozeshah Mehta, influenced by London liberalism, co-founded the Indian National Congress in 1885 and defended it as better representing Indian aspirations than British officials.
- Mehta drove Bombay's municipal reforms, proposing a representative body enacted in the 1872 Bombay Municipal Act and serving as commissioner (1873) and chairman (1884-85, 1905).
- In legislative councils, Mehta opposed repressive laws like the Arms Act and Vernacular Press Act, supported the Ilbert Bill, and cited Mill and Spencer for decentralizing authority.
- Mehta's moderate liberal focus on local self-governance was eclipsed by Tilak's extremism and Gandhi's mass movements, leaving Indian liberalism without a strong constituency.

**By Sanjeet Kashyap**

* * *

The enduring role of the Bombay-based moderate liberals in demanding political freedom and self-governance from the British Raj has been overshadowed by the subsequent turns in the Indian nationalist storytelling. Both the radicalism of the extremists and revolutionaries as well as the mass subaltern politics of Mahatma Gandhi have found a viable political constituency in the Republic of India. However, the shrinking of the liberal space and a clear absence of substantial liberal constituency have left the moderate nationalists heirless, so to speak.

While Dadabhai Naoroji was the patron saint of the liberal nationalism, the Bombay-based, lawyer-dominated liberal intelligentsia comprised of a remarkable set of politicians. Sir Pherozeshah Mehta was part of this grouping which went on to found Indian National Congress later in 1885.

Born in a Parsi merchant family, the bid for upward mobility brought Mehta to London to pursue a degree in law. It was during this Britain stint (1865-68) that his liberalism was forged. In London, he actively engaged with the activities of the East India Association, an initiative of Dadabhai Naoroji to further Indian interests in Britain. Naoroji’s place in London was the hub of Indian liberal activists and it is here that Mehta made valuable connections.

His friendship with the likes of Badruddin Taiyabji and Wyomesh Chandra Banerjee would later go on to shape the history of Indian nationalism. Besides, he was also affected by the Gladstonian liberalism which was in vogue in Britain at that time. Mehta’s career as a politician would see him putting into practice his liberal conviction.

In the annals of Indian nationalism, Mehta is largely seen as one of the founders of Indian National Congress and a leader of the moderate faction. But I would argue that his involvement with the Bombay self-governance project merits further recognition. It is also here that his political liberalism appears more prominently.

Mehta has been dubbed as the “Father of the Municipal Government in Bombay”, both for his involvement in and advocacy for local self-governance. In response to the 1871 municipal reform agitation in Bombay, the Bombay Municipal Act of 1872 was passed which also incorporated Mehta’s proposal of a representative body. According to his biographer Homi Modi, Mehta’s proposals revealed “a political sagacity and breadth of outlook, which for a young man of twenty-six may well be considered astonishing…”. [Mehta’s involvement](http://www.ampltd.co.uk/digital_guides/indian_newspaper_reports_parts_1_to_4/Publishers-Note-Part-6.aspx) with the Bombay city administration would continue in his role as municipal commissioner (1873), and chairman (1884-85 and 1905).

In his role as a member of both Bombay and Imperial Legislative Council, he championed the interests of native Indians with a liberal stance on issues. He went on to oppose the Arms Act and Vernacular Press Act while lent support to Ilbert Bill. He also opposed Lord Curzon’s policy of bringing universities under the control of the government. In arguing for the introduction of elective principles in local bodies and decentralisation of authority, he resorted to John Stuart Mill and Herbert Spencer- *“We know that the highest authorities on the subject- Herbert Spencer and John Stuart Mill- have pointed out that you must have external or internal check on the working of these municipal bodies.”*

The [Ilbert Bill controversy](https://books.google.co.in/books?id=0oVra0ulQ3QC&lpg=PA213&vq=ilbert%20bill&pg=PA214#v=snippet&q=ilbert%20bill&f=false) (1883) turned out to be the last straw for Indian nationalists as they soon went on to form the Indian National Congress. One of the charges laid out by its detractors in early years was the limited reach of Congress, best captured in Lord Dufferin’s “microscopic minority” phrase. As one of the founding fathers of INC, it fell upon Mehta to defend the organization. In the 1890 Congress annual session, he argued that for all their differences and shortcomings, “the microscopic minority can far better and far more intuitively represent the needs and aspirations of their own countrymen than still more microscopic minority of the omniscient district officers.”

Mehta’s advocacy of local self-governance and moderation in politics though had to face challenges from the political extremism of Tilak which demanded “*poorna swaraj*”. And, then the descent of Gandhi on national scene swept aside the “*plea-prayer-petition*” mode of political liberalism in favour of a non-violent mass movement.

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## SO Musings: Milton Friedman on India

Original: https://www.spontaneousorder.in/p/milton-friedman-on-india

Author: Spontaneous Order

Published: 2019-07-31T11:38:45.000Z

Topics: milton-friedman, india-economy, small-enterprises, economic-liberalization

> Milton Friedman, American economist and Nobel Laureate was born on 31 July 1912. After achieving international fame after the publication of his work Capitalism and Freedom in 1962; Friedman became one of the most prominent advocates of classical libera..

**Summary:**

This post from Spontaneous Order highlights Milton Friedman's classical-liberal perspective on India's economic path, quoting his advocacy for unleashing small and medium enterprises over reliance on large conglomerates. Friedman, born 31 July 1912 and renowned for *Capitalism and Freedom* (1962), argued that India's true hope rests in 'hole-in-the-wall' firms and street-level workshops in places like Ludhiana, rather than giants like the Tatas in Jamshedpur. He contended that granting full rein to these millions of small entrepreneurs, free from governmental interference and control, would enable growth surpassing 'today’s fondest hopes.' In a 2000 preface to the Centre for Civil Society's handbook compiling his writings on India, Friedman reiterated his impression with India's 'enormous potential' contrasted against 'minimal progress' over the 45 years since his first visit (circa 1955). He noted encouraging signs of change in the latest decade, suggesting India might finally realize its potential, benefiting its people and the world.

**Key points:**

- India's economic promise lies in small and medium enterprises like Ludhiana's street workshops, not large firms like Jamshedpur's Tatas.
- Government interference hampers these small entrepreneurs and must be minimized to unlock rapid growth.
- Friedman, in 2000, lamented 45 years of minimal progress since his first India visit but saw hope in recent reforms.

**By Spontaneous Order**

* * *

Milton Friedman, American economist and Nobel Laureate was born on 31 July 1912. After achieving international fame after the publication of his work *Capitalism and Freedom* in 1962; Friedman became one of the most prominent advocates of classical liberal ideas in the 20th century.

Here is an excerpt from Friedman’s writings on India:

*The hope for India lies not in the exceptional Tatas or similar giants, but precisely in the hole-in-the-wall firm, in the small and medium-size enterprises, in Ludhiana, not Jamshedpur; in the millions of small entrepreneurs who line the streets of every city with their sometimes minuscule shops and workshops. If the tendencies so evident in Ludhiana could be given full rein, and not hampered and hindered in every direction by governmental interference and control, India could achieve a rate of growth that would exceed today’s fondest hopes.*

In 2000, the Centre for Civil Society compiled a handbook of Friedman’s work on India. As a preface to the book, Friedman wrote:

“I continue to be impressed by India’s enormous potential and depressed by the contrast between that potential and the minimal progress that has been achieved in the forty-five years since I was first in India. The latest decade shows more signs of change. India may finally be on the way to realizing its potential. If so, it will be a blessing for the people of India and for the world as a whole.”

The complete handbook can be accessed [here](https://ccs.in/sites/all/books/com_books/friedman-on-india.pdf).

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Stop Parents from Spending on Education

Original: https://www.spontaneousorder.in/p/nep_satire

Author: Spontaneous Order

Published: 2019-07-29T09:45:51.000Z

Topics: education-policy, for-profit-schools, school-choice, nep

> Nowadays, parents spend too much money on their children at private institutions. It is high time that someone stands up to them and says, “Enough, stop squandering your savings away on the menaces you created.” Luckily for us, the National Educationa

**Summary:**

Prashant Narang satirically critiques the National Educational Policy (NEP) draft's vehement opposition to for-profit private schools, portraying it as an absurd crusade to prevent parents from spending their savings on superior education options. He mocks the NEP's 484-page document for repeating its 'hatred' for for-profit schools at least 10 times without explaining why they are 'menaces,' while ignoring government schools' failures like absent teachers who send their own children to private institutions, poor infrastructure, and reliance on outdated textbooks based on local lores. Narang highlights private sector successes in hospitals (lower death rates), vaccines, and daycare over government alternatives like anganwadis, arguing that profit motives drive cost reductions and better learning outcomes. From a classical-liberal viewpoint, he condemns mandating government education as a barrier to progress, noting India's government has delayed universal education since 1949. Instead, he advocates allowing profit-seeking providers to thrive, urging support for parental choice and free enterprise to tie the purse strings on wasteful public spending rather than private savings.

**Key points:**

- NEP draft opposes for-profit schools 10 times in 484 pages without justification.
- Government schools suffer from teacher absenteeism, with staff educating politicians on pay delays instead of students.
- Private institutions outperform public ones in health, vaccines, and early education by focusing on costs and outcomes.
- India's government has postponed universal education deadlines since 1949, hindered by anti-profit policies.
- Support free enterprise in education to enable parental spending on effective private options over failing public freebies.

**By Prashant Narang**

* * *

Nowadays, parents spend too much money on their children at private institutions. It is high time that someone stands up to them and says, “*Enough*, stop squandering your savings away on the menaces you created.” Luckily for us, the National Educational Policy (NEP) draft has come just in time. 

It is shocking to see how parents run blindly towards ‘for-profit’ private institutions even after knowing about their achievements. Private hospitals can barely match the [death rate accomplished by government hospitals](http://censusindia.gov.in/vital_statistics/SRS_Report_2012/11_Chap_4_2012.pdf). So many women who have their delivery in private hospitals tend to return home *alive* with their baby. 

Parents get fooled by the vaccines manufactured by ‘for-profit’ companies. They stop listening to anti-vaxxers and their attempt at preserving immunity naturally. Worse still, they keep purchasing baby food from companies that are solely focused on churning out profits. 

Their lunacy does not end here. When babies begin to grow and show potential, parents are adamant on squashing their capabilities by sending them to private daycare. It almost seems as if they are deluded. What other explanation could there be when our government has adequate *anganwadis* right at the edge of the next village? 

Splurging on these luxuries is clearly a sign of madness. So, how do we pull parents away from this abyss? Most people are too afraid to speak up in case these parents throw their wallets at their faces in response. Even the newspapers are terrified: so much so that they do not even dare to tout ‘non-profit’. But now we have the NEP to lead us into battle. It is the *true local hero* that has had the guts to go out and protect our principles in this fight against savings. Understandably, it does not have the resources to concern itself with mundane issues of health, wealth, and happiness. In a 484-pages long document, it repeats its hatred for ‘for-profit’ schools at least 10 times. As it is such an arduous task, it is not surprising that it accidentally forgets to explain why ‘for-profit schools’ are menaces in the first place. But we forgive this for the greater good. 

The only way out is to mandate government education. Parents’ minds are too addled by the long lines outside private schools to realise the benefits of not spending money. With expenses being met by our taxes, public schools are the epitome of freebies. There is no danger of teachers imposing thought control as there are no teachers. Most are busy educating politicians about the latest delay in their pay hike. They also take one for the team and send their children to private schools to help government schools achieve a good pupil-to-teacher ratio. It is only the privileged who get to learn from Mother Nature and treat their desks as collateral damage. Breaking these privately-manufactured desks encourages hands-on learning and challenges the indoctrination of wasting money. 

Even if teachers do come, they don’t have to exert their brains; textbooks are revised on the basis of local lores that do not need explaining. This also does away with the cost of tuition. There is no need to spend extra money on lunches or worry about inculcating moral values. Half a banana while building the Statue of Unity in-between classes is satisfactory.  

The Government of India has been diligent in effort to increase access to education for children in India. In fact, it is such a perfectionist that it has been pushing its deadline for universal education since 1949. Allowing profit-seeking leeches to enter the education sector with their focus on lowering costs and improving learning outcomes will hinder all previous progress. We must put all our support behind the NEP and government education, and pray that they tie the purse strings of parents.

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* * *

**About Prashant Narang**

An advocate who believes in free enterprise. Having taught at some of the best law schools across India as a visiting faculty, he is currently pursuing Ph.D. from Center for the Study of Law and Governance at Jawaharlal Nehru University and running a YouTube channel on policy issues. Prashant is Associate Director - Research at the Centre for Civil Society.

## The Liberalism of Ishwar Chandra Vidyasagar

Original: https://www.spontaneousorder.in/p/vidyasagar

Author: Spontaneous Order

Published: 2019-07-29T05:45:48.000Z

Topics: indian-liberals, social-reform, widow-remarriage, education-reform, liberal-humanism

> Ishwar Chandra Vidyasagar’s many roles as an educationist, writer, social reformer, and feminist have rightly earned him the credential of being one of the early progenitors of Indian modernity. Underlying all these credentials of Vidyasagar, however, w

**Summary:**

Ishwar Chandra Vidyasagar exemplified practical liberal humanism, blending personal experiences of poverty and generosity with Western Enlightenment ideas of secularism, rationalism, and liberty, distinguishing him from the theocentric Raja Ram Mohan Roy. As a Bengali Brahmin Sanskrit scholar, he campaigned against child marriage, high-caste polygamy, and for Hindu widow remarriage, successfully passing the Widows’ Remarriage Act in 1856 after publishing persuasive 1855 pamphlets citing Parasara Samhita scriptures amid opposition from orthodoxy including a 30,000-signature counter-petition. In education, his 1854 memorandum advocated vernacular-medium mass education, influencing Wood’s Despatch's three-tier system, though efforts to open Sanskrit College to non-Brahmins partially failed. Post-1857 Mutiny, Victorian conservatism thwarted his anti-kulin polygamy campaign. The author argues Vidyasagar's reliance on scriptural authority was a pragmatic, context-specific strategy in a religious, Brahmanical society reinforced by Orientalist policies, differing from Western liberalism's secular roots but aligning with classical-liberal methods like rational pamphlets, public persuasion, and petitions—Mill-esque in feminist temperament, Burkean in gradualism. This 'oriental liberalism' adapted to India's milieu, making Vidyasagar a quintessential classical liberal reformer.

**Key points:**

- Vidyasagar's 1855 pamphlets using Parasara Samhita justified widow remarriage as the viable option after banning sati and the difficulties of asceticism, leading to the 1856 Widows’ Remarriage Act despite orthodox opposition.
- His 1854 memorandum pushed vernacular education for masses, incorporated into Wood’s Despatch for a three-tier system.
- Reformers like Vidyasagar strategically appealed to scriptural authority in religious India, unlike Western liberals such as Mill.
- Vidyasagar combined Mill-like advocacy for women's rights with Burkean gradualism via tradition, embodying contextual classical liberalism.

**By Sanjeet Kashyap**

* * *

Ishwar Chandra Vidyasagar’s many roles as an educationist, writer, social reformer, and feminist have rightly earned him the credential of being one of the early progenitors of Indian modernity. Underlying all these credentials of Vidyasagar, however, was his own brand of liberal humanism. While the modernising metropolitan West is considered to be the fertile ground for [liberal humanism](https://books.google.co.in/books?id=dWYyCwAAQBAJ&lpg=PA247&vq=liberal%20humanism&pg=PA247#v=snippet&q=liberal%20humanism&f=false) and indeed the colonizing mission brought these [newfound influences](https://www.cambridge.org/core/books/recovering-liberties/DFFAC6CCD37E1844C0425E6B8866E443) to the periphery of Indian society, Vidyasagar essentially embodied [practical humanism](https://books.google.co.in/books?id=QqtVC-IUu2QC&lpg=PT117&vq=practical%20humanism&pg=PT117#v=snippet&q=practical%20humanism&f=false).

The practical humanism of Vidyasagar was shaped by both his readings and lived experience. Born a poor Brahmin, his deprived childhood was made bearable by the generosity of kind strangers. Vidyasagar fondly recalls one particular widow Raimoni in [his memoirs](https://books.google.co.in/books?id=QqtVC-IUu2QC&lpg=PT119&dq=raimoni&pg=PT119#v=onepage&q=raimoni&f=false) who treated him as her own son. Besides, despite his training as a Sanskritist, he was also exposed to the western Enlightenment ideas of secularism, agnosticism, rationalism, and liberty. These two distinct experiences determined the career trajectory of Vidyasagar.

While it may be tempting to compare Vidyasagar with that great Bengali reformer Raja and the father of Modern India, Subrata Dasgupta has underlined the distinction between the two, in terms of their approach towards religion. The Raja’s worldview was always theocentric rooted in his propagation of Vedanta and close study of Christian monotheism; the Sanskritist, on the other hand, had a [manifestly secular outlook](https://books.google.co.in/books?id=QqtVC-IUu2QC&lpg=PT119&dq=raimoni&pg=PT117#v=onepage&q=manifestly%20secular%20worldview&f=false).

The remarkable reformism of Vidyasagar has been aptly captured in historian [Sarmila Bose](https://www.aljazeera.com/indepth/opinion/2012/02/201225115415732564.html)’s profile of the scholar:

*“He was a Bengali Brahmin Sanskrit scholar. His image is that of a quintessential pandit, traditionally dressed in dhuti-chador. This was no Anglicised “brown sahib”. Yet this Sanskrit scholar battled to end child marriage and high-caste polygamy, and to enable Hindu widows to re-marry.”*

Vidyasagar’s reformism was informed by the plight of women who were at the receiving end of discriminatory social practices. It also extended to the domain of education as he advocated the policy of mass education to modernise the Bengali society. In 1854, he wrote a memorandum to the Council of Education arguing for use of vernacular for teaching masses, in contrast to the Anglicist liberal reformers. In a sense, Vidyasagar, himself a product of the Orientalist Sanskrit College, was merely continuing the “[Anglicist v/s Orientalist](https://scroll.in/magazine/821605/thomas-macaulay-and-the-debate-over-english-education-in-india)” debate of the 1830s. The year 1854 was remarkable in this regard as Wood’s Despatch incorporated Vidyasagar’s agenda in its recommendation of three-tier education system with primary education for the masses in vernacular medium. His efforts at educational reform, however, didn’t always bear fruit as in case of opening up of [Sanskrit College](https://books.google.co.in/books?id=H3g9BAAAQBAJ&lpg=PA42&ots=hu5L4rCbGr&dq=vidyasagar%20opening%20of%20sanskrit%20college%20to%20shudras&pg=PA42#v=onepage&q=vidyasagar%20opening%20of%20sanskrit%20college%20to%20shudras&f=false) to non-Brahmin students where he succumbed to orthodoxy and only allowed to admit the Kayastha students.

His more successful reform measure though had an earlier pedigree reflected in [Raja Rajballav](https://www.aljazeera.com/indepth/opinion/2012/02/201225115415732564.html)’s 1757 bid to remarry his widowed daughter as well as in the campaign of [radical Derozians](https://books.google.co.in/books?id=QqtVC-IUu2QC&lpg=PT119&dq=raimoni&pg=PT127#v=onepage&q=the%20bengal%20spectator&f=false) in the 1840s. But Vidyasagar’s advocacy turned out to be more effective. His skillful employment of colloquial language, mass media, the authority of the scriptural text and perhaps credential as a Brahmin scholar of Sanskrit resonated with the Company administrators who were seeking to reform Indian society under the influence of the dominant ideology of reformist [utilitarian liberalism.](https://books.google.co.in/books?id=0oVra0ulQ3QC&lpg=PP1&dq=editions%3AKhM5P9aBwwIC&pg=PA72#v=onepage&q&f=false)

Vidyasagar’s approach towards widow remarriage was visible in two pamphlets that he published in 1855. The first pamphlet turned out to be an instant bestseller in which he used *Shastras* to advocate for widow remarriage, drawing sharp criticism from the Hindu orthodoxy. The relevant passages were found in the *Parasara Samhita* which laid out the ground for a woman to remarry in certain circumstances. For widowed women, it suggested three options: remarriage, asceticism, and sati. Vidyasagar reasoned that since sati was illegal now and asceticism was too difficult a path to follow, the only plausible option remained was widow remarriage.

His reformist campaign though had to face [opposition](https://books.google.co.in/books?id=QqtVC-IUu2QC&lpg=PT119&pg=PT128#v=onepage&q&f=false) from Hindu orthodoxy. The chief antagonist, of course, was the conservative Raja Radhakanta Deb who had also sparred with Ram Mohan Roy over Sati. Vidyasagar had to face opposition on the streets of Calcutta and amongst the Bengali *bhadralok*. The backlash also came in the form of a counter-petition with 30,000 signatories. However, the Widows’ Remarriage Act was passed successfully in 1856.

Vidyasagar though was not so lucky in his other endeavor to emancipate the fallen women of the Hindu society. His campaign against the *kulin* marriage tradition hit the wall in the post-mutiny Raj ruled by Queen Victoria. Victorian paternalism, argues [Shekhar Bandhopadhyay](https://books.google.co.in/books?id=0oVra0ulQ3QC&lpg=PP1&dq=editions%3AKhM5P9aBwwIC&pg=PA73#v=onepage&q&f=false), blamed the liberal reformism for the mutiny of 1857 and distanced itself from the earlier bid to liberalise the natives in Enlightenment mode. What followed was the limited sharing of power with the [conservative elite](http://thebookreviewindia.org/reappraising-an-intellectual-legacy/) and the ugly [racial authoritarianism](https://books.google.co.in/books?id=0oVra0ulQ3QC&printsec=frontcover&dq=editions:KhM5P9aBwwIC&hl=en&sa=X&ved=0ahUKEwiL6IPb4tnjAhWbXSsKHSlyA6wQ6AEIKjAA#v=onepage&q&f=false) rooted in the racial anthropology of Victorian England. In this context, it is unsurprising to find that a native reformer’s plea saw no taker. Dejected at the conservatism of the Bengali *Bhadralok* which was sprinting towards the mystic guru Ramakrishna and racially charged authoritarian colonial overlords, Vidyasagar spent his last years working with the tribal population.

Assessing the reformism of the ilk of Vidyasagar (Ram Mohan Roy included), historian [Ranjit Sen](https://www.jstor.org/stable/44142693) underlines two peculiar features- dependency on the Brahmins and the rich elites who determined the changing social parameters. For Sen, the oriental liberalism in this sense differed from the Western liberals. Mill, for instance, would never resort to appeal to priestly authority to make case for women’s rights. Indian reformers though had to resort to religious authority to successfully implement their liberal social agendas.

Sen’s charges, I would argue, merit further clarification. The 19th century liberalism in the core and periphery of the Empire were rooted in their particular milieu. The Indian aspect of liberal tradition has been captured deftly in C A Bayly’s *Recovering Liberties*. John Stuart Mill’s liberalism was rooted in a Britain which inherited the legacy of the 16th century Reformation contributing to [secularization](http://www.hup.harvard.edu/catalog.php?isbn=9780674045637); [Glorious Revolution](https://en.wikipedia.org/wiki/History_of_liberalism) of 17th century advancing constitutionalism and “consent of the governed”; and the Industrial Revolution in the late 18th century underpinned by a [laissez-faire market](http://jenni.uchicago.edu/WJP/papers/Harris_govt_and_econ.pdf) system. The cumulative effect of these historical developments shaped the ideas of classical liberal thinkers in Britain.

India, in contrast, was a highly religious society with bustling port-centric commerce and fragmented polity in the 18th century as the East India Company’s political project was taking shape. The [orientalist disposition](https://books.google.co.in/books?id=0oVra0ulQ3QC&lpg=PP1&dq=editions%3AKhM5P9aBwwIC&pg=PA67#v=onepage&q&f=false) of the Company, in fact, cemented the hold of Brahmanical authority over Hindu society. Thus, the reformers had to contend with the forces of Hindu orthodoxy on one hand and also convince the new rulers of the merits of enacting reformist legislation.

It is in this context that the resort of an otherwise [avowedly secular](https://books.google.co.in/books?id=QqtVC-IUu2QC&lpg=PT11&pg=PT130#v=onepage&q&f=false) Vidyasagar to the scriptural authority begins to make sense. [Dasgupta](https://books.google.co.in/books?id=QqtVC-IUu2QC&lpg=PT11&pg=PT127#v=onepage&q&f=false) further makes it clear in his discussion of widow remarriage that the rational and humanist arguments aren’t sufficient to bring change in a fundamentalist Hindu society and thus “the argument must be supported by scriptural sources to carry any weight.” Gandhi later adopted a similar strategy in his [battle against untouchability](https://india.oup.com/product/gandhi-against-caste-9780199474295?WT.mc_id=gac) where he proclaimed to be the most *sanatani* of all while simultaneously attacking the pernicious practice of untouchability.

How does one then assess the reformism of Ishwar Chandra Vidyasagar, the Bengali Brahmin Sanskritist who was “rooted in traditional brahmin literati culture” for all his modernist ideas, according to Marxist historian Sumit Sarkar? I would venture out to suggest that [Vidyasagar](https://harvardmagazine.com/2014/05/vita-ishvarchandra-vidyasagar) was a [Mill-esque liberal](https://www.economist.com/open-future/2018/10/05/the-scandalous-love-affair-that-fuelled-john-stuart-mills-feminism) in his temperament towards women as the personal lived experience of both shaped their advocacy of women’s rights. However, in his reform methods, Vidyasagar approximated a Burkean approach of gradual reform and appeal to traditional authority. In his resort to rational argumentation, use of pamphlets to persuade public opinion and submission of a petition to the government, Vidyasagar emerges as a quintessential classical liberal.

The poet-saint Rabindranath Tagore’s pithy tribute accurately captures the stature of Vidyasagar: “One wonders how God, in the process of producing forty million Bengalis, produced a man!”

*Indian Liberals is an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

*Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## SO Musings: Corruption of Thought

Original: https://www.spontaneousorder.in/p/mavenkatarao_corruptionofthought

Author: Spontaneous Order

Published: 2019-07-26T11:12:50.000Z

Topics: indian-liberalism, leftist-critique, cultural-assimilation, intellectual-freedom

> “But in addition to such academic functions performed by trained persons in existing institutions, there is a dire need for a group or groups of thinkers who will devote themselves to applying pure thought to the stream of ideas coursing through the pub

**Summary:**

The excerpt from a 1958 Indian Libertarian article laments the lack of dedicated Indian thinkers who rigorously apply 'pure thought' to public ideas, policies, and cultural currents, urging the formation of such groups to counter superficial influences. It critiques how India has uncritically imported Eur-American thought and values—shaping the modern world's 'climate of thought'—without assimilating them to indigenous traditions, experiences, and standards. This has led to hasty policies by the ruling group, especially post-Gandhi, where traditional life's values once predominated but have been overtaken by dominant 'Leftist thought'—directions already producing reactions and facing strong criticism in Europe and America. From a classical-liberal perspective, India is thus adopting the West's 'cast-off clothes,' risking misguided reconstruction; deeper, original Indian intellectual engagement is essential to relate new ideas authentically to local heritage and avoid such corruption of thought.

**Key points:**

- India urgently needs groups of thinkers to apply pure thought to public ideas and influence policies critically.
- Indian intellectuals have engaged social problems too superficially, failing to assimilate Western ideas with native traditions.
- Post-Gandhi policies are hasty and dominated by Leftist thought, which is already discredited in the West.
- Blind adoption of foreign ideologies equates to wearing the West's 'cast-off clothes,' corrupting India's reconstruction.

**By Spontaneous Order**

* * *

“But in addition to such academic functions performed by trained persons in existing institutions, there is a dire need for a group or groups of thinkers who will devote themselves to applying pure thought to the stream of ideas coursing through the public mind, influencing public policies and creating dominant centers and streams of tendency in ideas. The climate of thought and opinion, imagination and sense of values in which the modern world lives has been the creation of Eur-American experience and thought through the centuries. India has taken this body of ideas and values over into her social life and plans of reconstruction without proper assimilation. Indian thinkers have no doubt done a certain amount of thinking about social problems. But it is all too little and too superficial. It has not enabled Indians to relate the new ideas to their own experience today and their inherited traditions and standards of judgment and values.

Hence we find hasty policies being introduced by the ruling group. During the life of Gandhi, older ideas of life’s values were predominant though he stimulated much thought on all matters of current reconstruction. But today we find the current of *Leftist thought* dominating everything and forcing the pace in directions that have already produced a reaction in Eur-america and are under strong criticism. We are taking over the cast-off clothes of the West!…”

*Access the full document [here.](http://indianliberals.in/~_admin/pdflanguage?id=654359818.pdf)*

*First Published in The Indian Libertarian – September 1958*

*Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/index), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Karsandas Mulji – The Forgotten ‘Indian Luther’

Original: https://www.spontaneousorder.in/p/karsandas-mulji

Author: Spontaneous Order

Published: 2019-07-25T10:14:57.000Z

Topics: social-reform, indian-liberals, religious-reform, 19th-century-history

> Karsandas Mulji, a contemporary of Dadabhai Naoroji, was one of the pioneer Indian social reformers working for the cause of women emancipation. In 1850s-60s, Mulji was a prominent member of the “Bombay intelligentsia” in conflict with the “merchant

**Summary:**

Karsandas Mulji, a 19th-century Bombay reformer contemporary of Dadabhai Naoroji, challenged the merchant aristocracy and religious orthodoxy, earning the title 'Martin Luther of the Bania caste' for his role in the 1862 Maharaj libel case. Disowned by family, Mulji pursued varied careers including writer, editor, teacher, and administrator while educated at Elphinstone College alongside Naoroji and Ranade. His reformism emerged in 1853 essays advocating foreign travel and widow remarriage, leading to his ouster from college and family. Launching the Satya Prakash newspaper in 1855 with 500 subscribers, Mulji targeted Gujarati Hindu conservatives. His 1860 article 'The Original Religion of the Hindus and the Present Heterodox Opinions' accused a Vallabhacharya Maharaja of sexual misconduct with devotees, prompting the libel suit dubbed the 'greatest trial of modern times since Warren Hastings.' The court's dismissal vindicated Mulji, celebrated as a liberal victory exposing guru corruption. Historian J. Barton Scott reframes Mulji not as Protestantizing Hinduism but as part of transnational reformist networks producing liberal subjects, securing his place in the Indian liberal pantheon.

**Key points:**

- Mulji's 1860 article in Satya Prakash accused Vallabhacharya Maharajas of sexual misconduct, sparking the landmark 1862 libel case he won.
- The Maharaj trial was hailed as the greatest since Warren Hastings, marking a victory for reformist liberals against religious authority.
- Mulji advocated widow remarriage and foreign travel, positioning him as a pioneer in women's emancipation and social reform.
- J. Barton Scott argues Mulji's legacy lies in producing liberal subjects through reformist exchanges, not just challenging Hindu practices.

**By Sanjeet Kashyap**

* * *

[

![](https://substackcdn.com/image/fetch/$s_!Yvg3!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe434b505-12ac-4981-8220-4f2a2545ca70_247x350.jpeg)



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Image Source: Wikimedia Commons

Karsandas Mulji, a contemporary of Dadabhai Naoroji, was one of the pioneer Indian social reformers working for the cause of women emancipation. In 1850s-60s, Mulji was a prominent member of the “[Bombay intelligentsia](https://books.google.co.in/books?id=1V40DAAAQBAJ&lpg=PP1&pg=PA121#v=onepage&q=bombay%20intelligentsia&f=false)” in conflict with the “merchant aristocracy” over social issues. Mulji’s place in Indian history as a reformer is due to the Maharaj libel case in 1862 which earned him the [title](https://books.google.co.in/books?id=1V40DAAAQBAJ&lpg=PP1&pg=PA119#v=onepage&q=martin%20luther%20of%20banian%20caste&f=false) of “a Reformer, a Martin Luther of the Banian Cast”.

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Mulji’s early life was devoid of comfort as he was disowned by his family. He took to multiple professions – writer, editor, teacher, cloth merchant, and government administrator – to make ends meet. His reformist credentials, argues [J Barton Scott](https://books.google.co.in/books?id=1V40DAAAQBAJ&lpg=PP1&pg=PA122#v=onepage&q&f=false), put him at a disadvantage when it came to finding stable work.

Mulji’s ideas were shaped in the [Elphinstone](https://books.google.co.in/books?id=1V40DAAAQBAJ&lpg=PP1&pg=PA121#v=onepage&q&f=false) of the 1840s-50s where he shared space with the likes of Dadabhai Naoroji and Mahadev Govind Ranade. The Elphinstonians, well-versed in western texts and the language of the new elites, were favourably positioned in the British-led administration. Mulji was no different; he was [mocked](https://books.google.co.in/books?id=1V40DAAAQBAJ&lpg=PP1&pg=PA121#v=onepage&q&f=false) for wearing trousers which amounted to a classic instance of Macaulay man.

His reformism was first visible in public domain in 1853 with the publication of an essay advocating foreign travel, which was read in front of Buddhi Vardhak Hindu Sabha. The [essay](https://books.google.co.in/books?id=1V40DAAAQBAJ&lpg=PP1&pg=PA122#v=onepage&q=buddhi%20vardhak%20sabha'&f=false) made him a rising star of the reform world. However, another draft essay advocating widow remarriage had him thrown out of his widowed aunt’s home, leading to his withdrawal from the Elphinstone College. 

Afterwards, he took work as a newspaper editor and school administrator. Then came the *Satya Prakash* in 1855, a reformist paper targeting Gujarati Hindus. The paper had a meagre subscription of 500 yet its impact on the Bombay’s conservative Gujarati Hindu community can’t be overstated. In the 1850s, he went on to edit a series of newspapers.

However, it was an article *“The Original Religion of the Hindus and the Present Heterodox Opinions”* that has come to define the legacy of Mulji. Published in 1860, it was a reformist critique of the Vallabhacharyas and accused one of the Maharajas of sexual misconduct with the devotees. The Vallabha sampradaya is a Vaishnavite sect worshipping the child-god Krishna. The Maharajas are considered the priestly authority, acting as a mediator between the devotee and God.

In response to the attack by Mulji, the Maharaja filed a libel case against him. The case was [called](https://books.google.co.in/books?id=1V40DAAAQBAJ&lpg=PP1&pg=PA124#v=onepage&q=greatest%20trial%20of%20modern%20times&f=false) the *“greatest trial of modern times since the trial of Warren Hastings”*. After the heated debate and salacious newspaper coverage, the Court dismissed the claims of the Maharaja. The decision was hailed as a victory for reform-minded liberals.

For his contribution in exposing the corrupt practices of religious guru, Mulji was hailed as *“Indian Luther”* by his biographer B N Motiwala. However, historian [J Barton Scott](https://www.academia.edu/6412719/Luther_in_the_Tropics_Karsandas_Mulji_and_the_Colonial_Reformation_of_Hinduism_Journal_of_the_American_Academy_of_Religion_) has argued that representing Mulji as a reformer involved in *Protestantizing Hinduism* would be an inadequate assessment of his legacy. Rather a more sound approach would be “to situate him within a network of reformist exchanges” as part of horizontal linkages with fellow reformists in Britain.

In assessing his legacy, [Scott](https://www.academia.edu/6412719/Luther_in_the_Tropics_Karsandas_Mulji_and_the_Colonial_Reformation_of_Hinduism_Journal_of_the_American_Academy_of_Religion_) has further argued that Mulji’s reform agenda was “not simply about liberating liberal subjects but rather about producing them.” In that sense, Mulji deserves to occupy the place among the founding fathers in Indian liberal pantheon.

*Indian Liberals is an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

*Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## GG Agarkar- Modern Indian Liberal and Reformer

Original: https://www.spontaneousorder.in/p/gg-agarkar-indian-liberal-and-reformer

Author: Spontaneous Order

Published: 2019-07-14T04:00:06.000Z

Topics: indian-liberals, social-reform, rationalism, education-reform

> The modern liberal tradition in Maharashtra has seen many remarkable individuals furthering the cause of individual dignity and human freedom. The prominent figures include western-educated M G Ranade, P M Mehta, K T Telang; orientalist R G Bhandarkar; ..

**Summary:**

Gopal Ganesh Agarkar stands out among Maharashtra's modern liberal luminaries for his radical social reformism and commitment to rationality, inspired by Enlightenment thinkers like Mill, Spencer, Voltaire, and Rousseau. A proponent of scientific rationalism, he advocated women's liberation, opposition to superstitious rituals and caste discrimination, and education for both sexes. Collaborating with Bal Gangadhar Tilak, classmates at Deccan College, they founded the New English School in Pune (1880), Deccan Education Society (1884), and Fergusson College (1885), while editing Kesari to promote literacy, reform, and patriotism. Their public prominence came via the 1882 Kolhapur affair, critiquing British interference in the Raja's rule, earning public support despite legal charges. Diverging from Tilak's prioritization of political freedom and conservative social views, Agarkar launched Sudharak, insisting social reform precede independence. He backed the Age of Consent Bill and Pandita Ramabai’s Widows’ Home, distinguishing morality from religion. Historian Gordon Johnson deems him Maharashtra's most radical reformer. Though criticized for overlooking Jyotiba Phule, Agarkar's legacy shapes rationalist movements, influenced Hindutva figure Savarkar and even 1920s Marxism. Forgotten outside Maharashtra, he merits a place in India's liberal pantheon.

**Key points:**

- Agarkar co-founded New English School (1880), Deccan Education Society (1884), and Fergusson College (1885) with Tilak to advance education and reform.
- Prioritizing social reform over political freedom, Agarkar split from Tilak and launched Sudharak after losing control of Kesari.
- As a rationalist liberal, Agarkar supported women's education, anti-caste efforts, Age of Consent Bill, and Pandita Ramabai’s initiatives.
- Agarkar's Enlightenment-inspired views influenced Maharashtra's rationalists, Savarkar, and indirectly Marxism, earning him recognition as the state's most radical reformer.

**By Sanjeet Kashyap**

* * *

The modern liberal tradition in Maharashtra has seen many remarkable individuals furthering the cause of individual dignity and human freedom. The prominent figures include western-educated M G Ranade, P M Mehta, K T Telang; orientalist R G Bhandarkar; nationalist Bal Gangadhar Tilak; and moderate S N Banerjee, Dadabhai Naoroji and Gopal Krishna Gokhale. Among the modern liberal luminaries stands out Gopal Ganesh Agarkar, for his radical social reformism and emphasis on rationality.

Gopal Ganesh Agarkar was [inspired](https://books.google.co.in/books?id=6YxpAgAAQBAJ&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q=agarkar&f=false) from the Age of Enlightenment in Europe and the writings of Mill, Spencer, Voltaire and Rousseau which made him a proponent of scientific rationalism. His social reform agenda included women liberation, opposition to superstitious rituals, removal of caste discrimination, spread of scientific temperament and promotion of education for both men and women.

Recognised by historian Gordon Johnson as the [most radical](https://books.google.co.in/books?id=4kaZV5CdzsAC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=snippet&q=pandita%20ramabai&f=false) Maharashtrian social reformer, Agarkar is remembered best for his rivalry with Bal Gangadhar Tilak. He first met Tilak at the Deccan College where they were classmates. The Tilak-Agarkar duo went on to set up a series of educational institutions to promote literacy and social reform, and evoke patriotism among masses. 

The *New English School* was the first to be founded in Pune in January 1880. The collaboration further led to the formation of the Deccan Education Society (1884) and Fergusson College (1885). Meanwhile in 1881, Agarkar also took charge of the English journal *Keshari* as an editor where he promoted the cause of social reform, often in [conflict](https://books.google.co.in/books?id=4kaZV5CdzsAC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q=editorials&f=false) with other prominent nationalist leaders.

The public exposure of Tilak-Agarkar duo came in 1882 due to the infamous [Kolhapur affair](https://www.jstor.org/stable/44147990?seq=1#page_scan_tab_contents). The nationalist critique by *Kesari* of the British attempt to control the Kolhapur Raja Shivaji IV by declaring him mentally unstable led the regent Karbhari Barve to file a defamation case against the duo. While the court implicated Tilak-Agarkar in the case, the public opinion lent overwhelming support to them.

The differences between Tilak and Agarkar, however, laid in their priorities for the nation which has come to define the legacy of Agarkar. Tilak focused on the primacy of political freedom with a conservative approach towards social reform while for Agarkar, social reform came ahead of political freedom. The disagreement made Agarkar start his own journal *Sudharak* as Tilak captured control of *Kesari* to further his revivalist nationalism. 

As a modern liberal Agarkar was a strong proponent of rationalism and saw morality as distinct from religion. He lent support to Age of Consent Bill and Pandita Ramabai’s Widows’ Home in Puna. However, his [critics](https://books.google.co.in/books?id=6YxpAgAAQBAJ&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q=agarkar&f=false) accuse him of ignoring the writings and works of Puna-based contemporary caste crusader Jyotiba Phule.

In assessing Agarkar’s legacy in Maharashtra, [N H Kulkarnee](https://books.google.co.in/books?id=6YxpAgAAQBAJ&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q=kulkarnee&f=false) argues that he is adopted most prominently by the organized rationalist movement. However, his writings and activism also influenced Hindutva activist Vinayak Savarkar who sought to rationalise Hindu religion. Even the rise of Marxism in Maharashtra in 1920s was unconsciously influenced by Agarkar, an ardent devotee of John Stuart Mill!

Agarkar today remains a forgotten figure outside Maharashtra. The social reformer’s radical approach though merits him a place in the national pantheon of [Indian Liberals](http://indianliberals.in).

*Indian Liberals is an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

*Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

Similar articles : [https://spontaneousorder.in/?s=modern+liberal](https://spontaneousorder.in/?s=modern+liberal)

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## SO Musings: Decentralised Urban Governance

Original: https://www.spontaneousorder.in/p/so-musings-decentralised-urban-governance

Author: Spontaneous Order

Published: 2019-07-12T11:59:48.000Z

Topics: urban-governance, decentralization, municipalities, public-services

> Before independence, all local functions falling under the ambit of urban governance like roads, water supply, drainage, sanitation and street lighting were under the Municipality. Post-independence, there has been a diversion of Municipal functions to ..

**Summary:**

Before independence, urban governance functions such as roads, water supply, drainage, sanitation, and street lighting were managed locally by municipalities, ensuring alignment with community needs. Post-independence, these responsibilities were diverted to centralized bodies like the Delhi Development Authority, Delhi Jal Board, State Electricity Board, and Housing Development Board, resulting in top-down planning and administration of public services. This shift has produced decisions inconsistent with citizens' demands, making it extremely difficult for people to voice grievances or have suggestions accepted. These parastatal boards suffer from a lack of transparency and accountability, contributing significantly to Delhi's subpar public services that fail to meet citizen expectations. From a classical-liberal viewpoint, this centralization exemplifies inefficient governance, contrasting with the decentralized, responsive model of the pre-independence era, and underscores the need for restoring local municipal authority to enhance urban service delivery and democratic responsiveness.

**Key points:**

- Pre-independence urban functions like roads, water, and sanitation were handled by responsive municipalities.
- Post-independence diversion to bodies like DDA and DJB centralized control, leading to inconsistent decisions.
- Centralized boards lack transparency and accountability, hindering citizen grievances.
- Delhi's poor services stem from this fragmented, unaccountable structure.

**By Spontaneous Order**

* * *

Before independence, all local functions falling under the ambit of urban governance like roads, water supply, drainage, sanitation and street lighting were under the Municipality. Post-independence, there has been a diversion of Municipal functions to other bodies, like the Delhi Development Authority, Delhi Jal Board, State Electricity Board and the Housing Development Board.

This has led to centralized planning and administration of public services. Many decisions made by such bodies are inconsistent with the demands of the people. The citizens find it extremely hard to have their grievances heard and suggestions accepted. The boards lack transparency and accountability. This is one reason why the services in Delhi do not meet the citizen’s expectations.

Read more: [https://spontaneousorder.in/urban-land-management-a-prototype-of-bad-governance/](https://spontaneousorder.in/urban-land-management-a-prototype-of-bad-governance/)

*Access the full document [here](https://ccs.in/sites/all/books/com_books/ward-power.pdf).*

*Other publications by the Centre for Civil Society (CCS) can be accessed [here](https://ccs.in/publication/display).*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Patent Pending: Should GMO Technology be Exclusive?

Original: https://www.spontaneousorder.in/p/patent-pending-should-gmo-technology-be-exclusive

Author: Spontaneous Order

Published: 2019-07-08T06:25:51.000Z

Topics: gmo-crops, patent-reform, agricultural-innovation, farmers-rights

> Recently, the debate surrounding genetically modified (GM) foods was reopened when farmers in Akola, Maharashtra planted HTBt cotton seeds in an act of civil disobedience. Despite the continual outcry from farmers, our government prefers to ignore the s..

**Summary:**

The post argues that while genetic modification (GM) technology holds revolutionary potential for agriculture, patent laws create monopolies that stifle innovation and harm farmers, as seen in Monsanto's 'suicide seed' technology that prevents seed saving and led to lawsuits against inadvertent cross-pollination victims. Another example is Dr. Pamela Ronald's blight-resistant rice gene, patented by Pioneer Hi-Bred, which blocked commercialization due to low profit margins compared to Roundup Ready corn. Nearly 90% of food ingredients are already genetically modified, yet uncertainties persist without long-term studies. India's Section 3(j) of the Patents Act bars GMO patents, and the 2001 TRIPS-compliant Protection of Plant Varieties and Farmers’ Rights Act (PVFRA) offers limited protection, effectively denying farmers access to high-yield crops like HTBt cotton planted defiantly in Akola, Maharashtra. From a classical-liberal perspective, India's protectionist 'banning mentality' robs farmers of livelihoods; instead, policies should enable market-driven GM innovation while mitigating harms, rejecting outright bans that prevent both potential good and bad outcomes.

**Key points:**

- Patent monopolies on GMOs, like Monsanto's suicide seeds, make seed saving illegal and block independent research on fertility genes.
- Pioneer Hi-Bred's licensing of blight-resistant rice gene prevented competitors from commercializing it, despite its potential to combat Asian blight.
- India's Section 3(j) bars GMO patents, stalling approvals for beneficial crops and exacerbating farmers' struggles amid droughts and suicides.
- Governments should reform policies to allow GM markets with harm mitigation, rather than protectionist bans that deny agricultural innovation.

**By Utkarsh Khare**

* * *

Recently, the debate surrounding genetically modified (GM) foods was reopened when farmers in Akola, Maharashtra planted HTBt cotton seeds in an act of civil disobedience. Despite the continual outcry from farmers, our government prefers to ignore the subject, constantly shrouding it in veils of technicality and ‘no comments’. But the debate cannot be swept under the rug, as artificially modified food is here to stay. Almost 90% of the ingredients we use today are ‘modded’. What goes into our food, is as important as knowing what we put into our bodies.

The dominant narrative has been concerned with GM foods’ effects on human health, ecology and where humanity is headed as a whole. No long-term studies exist, and the answers to these questions remain uncertain.

What is certain however is that genetic modification has the potential to revolutionize our agriculture, markets and our scientific understanding. Every genetic modification is different – be it disease-resistant wheat, square tomatoes or purple weed – some GMs are healthy, and others are not. Serious harm, however, comes from the existing infrastructure of patent rights in genetically modified organisms (GMOs). 

Patent laws (in theory) promote innovation in a market, by rewarding a patent-holder with exclusive rights to use their invention. Through a simple law from 1930s America, patent laws ensured that an inventor had legal ownership of his intellectual property:

“*Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore”.*

What goes unseen are the effects of monopolisation, that stem from patent enforcement. Take the case of Monsanto’s patented ‘suicide seed’ technology – second-generation seeds from such plants are unusable. This makes it not only futile but illegal for farmers to gather seeds for another planting. Monsanto had infamously sued farmers who discovered GM corn or GM soy sprouting on their land after the wind carried their seeds over from neighbouring fields. Plant patents laws meant that these farmers were hit by a double whammy – they effectively violated Monsanto’s patent, while inadvertently cross-pollinating their own ‘non-suicide’ crop with sterile genes. 

More importantly, no corporation or scientist can ever work on the fertility gene for corn, without Monsanto’s permission. This access is usually obtained through a patent licence, which imposes restrictive terms and comes at a prohibitive cost. In effect, no individual can do the opposite and rework GM corn, except Monsanto, which now has no incentive to do so.

Patent laws create an overwhelmingly negative effect on genetic modification and on the potential benefits it holds.

A snapshot of patent misuse can be found in the discovery of disease-resistant GM rice. A gene sequence was discovered by one Dr. Pamela Ronald at UC-Davis, which meant that rice could potentially be resistant to all forms of Asian blight disease. Days after their patent filing, multinational food corporation Pioneer offered to license the gene. However, no work ever began on commercialisation of blight-resistant rice. Disease resistance, it turned out, does not possess the same attractions for multinational food producers, perhaps because the profit margins could never compare to Roundup Ready corn. By licensing the patent, Pioneer, instead of commencing production, ensured no competitor could market and launch a workable version of GM rice. 

Dr. Ronald affected her own form of patent protests by making the science behind blight-resistance freely available. Disease-resistant rice, however, is still off the shelves, as few developing nations possess the equipment and expertise to sponsor its commercial development. Many scientists agree that patent laws stand in the way of their research, as innovations become the intellectual property of the company that owns the lab where the research took place. The right to own a product of your intellect sounds like a great thing – unless it is vicariously owned by someone whose intellect had no role to play. It’s akin to a teacher getting a scholarship because you aced your exams.

The US troubles of GM monopolisation are yet to visit Indian shores, by virtue of Section 3(j) of the Indian Patents Act which exclusively bars patenting of GMOs. Indian patent laws are rightly criticized for not being market-friendly. Nonetheless, with the signing of the TRIPS Agreement in 2001, the Indian Parliament enacted the Protection of Plant Varieties and Farmers’ Rights Act (PVFRA), which in effect extends some protection to GM (‘transgenic’) plant varieties. Currently shrouded in technicality and regulatory mechanisms, India has veritably denied BigAg a market share, by refusing to let the market operate. Concern over patent abuse was part of the reason that led governments to stall GM use altogether. But do the ends justify the means? 

This move has denied our already reeling agricultural sector the numerous benefits that can be brought by GM innovation. Drought-affected farmers continue to agitate against approvals for high-yielding, low-cost BT crops. Meanwhile, by sitting on approvals our government robs the Indian farmer of his livelihood. 

India’s paranoia of genetic modification is apparent and is reflective of the ‘banning’ mentality classic to protectionist governance. Rather than aiming to mitigate the possible harm of an activity, we choose to ban it so it can never possibly do any good either. It’s a small miracle that we haven’t banned agricultural practice altogether, given the number of suicides it leads to. The objectives of our laws and policies need to allow us to utilize the potential in a particular technology while mitigating its possible harms.

Read more about GM Crops: [https://spontaneousorder.in/farmers-not-activists-prove-the-case-for-genetically-modified-brinjal/](https://spontaneousorder.in/farmers-not-activists-prove-the-case-for-genetically-modified-brinjal/)  

* * *

**About Utkarsh Khare**

Utkarsh is a law graduate from RML NLU Lucknow. He has previously worked with Members of Parliament on Private Members Bills, from judicial and police reform to drug legalisation, and strongly believes in the power of well-drafted legislation for good governance. He enjoys challenging work spaces that encourage creative and critical thinking, and is passionate about making a positive impact on social institutions. He is a voracious reader, an avid photographer, and enjoys listening to music from the 60s and 70s.

## From the archives of Indian Liberals: Four Budget Ideas for the Finance Minister

Original: https://www.spontaneousorder.in/p/archives-of-indian-liberals-four-budget-measures-for-the-finance-minister

Author: Spontaneous Order

Published: 2019-07-04T12:59:57.000Z

Topics: wealth-tax, fiscal-stimulus, tax-reform, indian-liberals

> As the new Finance Minister, Ms Nirmala Sitharaman, sets out to present her first budget, here’s a list of policy measures from the dusty archives of Indian Liberalism that are relevant as ever: 1. Wealth Tax The idea of bringing back the wealth tax is

**Summary:**

Sanjeet Kashyap draws from the archives of Indian liberalism to offer four budget ideas for Finance Minister Nirmala Sitharaman, emphasizing critiques by thinkers like A.D. Shroff and Nani Palkhivala against statist interventions. First, he opposes reviving the wealth tax, introduced in the 1957 Budget on assets over Rs 2 lakhs, which proved ineffective and was lambasted by Shroff as a 'desperate proposal' inviting 'Police Raj'. Second, he warns against fiscal stimulus via populist spending, citing Mint analysis showing it fuels inflation over growth, echoing Shroff's 1959 prediction of 'runaway inflation' from high plan outlays. Third, he advocates simplifying the direct tax code to expand the base and ease business, as Shroff argued in 1965 that good laws must be 'simple to understand and easy to administer'—a point liberals repeat amid ongoing complexity. Fourth, invoking the Ibn Khaldun curve of optimal taxation, he references Palkhivala's 1963 analysis praising Japan's growth via tax cuts and mocking India's superprofit tax as 'Economic Harakiri Act'. The post concludes that Indian liberals' historical writings remain vital for prudent economic policy, urging a revisit to neglected liberal thought.

**Key points:**

- Reject wealth tax revival as it historically yielded low revenue and risks 'Police Raj', per A.D. Shroff's 1957 critique.
- Avoid excessive fiscal stimulus, which leads to inflation rather than growth, as evidenced by macroeconomic data and Shroff's 1959 warning.
- Simplify the direct tax code to make it easy to understand and administer, advancing liberal economists' longstanding reform agenda.
- Lower taxes to spur growth, following Palkhivala's endorsement of Japan's tax cuts and critique of India's punitive superprofit tax.

**By Sanjeet Kashyap**

* * *

As the new Finance Minister, Ms Nirmala Sitharaman, sets out to present her first budget, here’s a list of policy measures from the dusty archives of Indian Liberalism that are relevant as ever:

**1\. Wealth Tax**

The idea of bringing back the wealth tax is being widely [talked about](https://www.moneycontrol.com/news/business/budget/wealth-tax-buzz-is-back-is-it-high-time-to-tax-the-super-rich-4155491.html), as the Modi regime gears to meet the challenge of reviving growth. The history of wealth tax in India dates back to the 1957 Budget and was imposed on individuals with more than Rs 2 lakhs in wealth. However, the measure turned out to be ineffective, yielding significantly less revenue. The liberal banker-industrialist A D Shroff, in his speech on the 1957 budget, criticized the move dubbing it as the *“desperate proposal”*. For him, any such move would (essentially) entail a *“Police Raj”*.

You can read AD Shroff’s Budget Analysis [here](http://indianliberals.in/~_admin/pdflanguage?id=290872158.pdf).

**2\. Fiscal Stimulus**

The challenge of reviving [economic growth](https://www.livemint.com/news/india/five-policy-reforms-to-jump-start-growth-1560790067687.html) might tempt the Minister to put fiscal prudence aside and favor a [populist spending drive](https://www.deccanherald.com/opinion/the-budget-s-onus-to-signal-new-beginnings-742629.html) in the Budget. A [Mint analysis](https://www.livemint.com/budget/news/bar-chart-race-budget-deficit-growth-and-inflation-over-time-1562050505647.html) of Indian macroeconomic scene however shows that excessive Govt spending has often led to inflation rather than economic growth. Interestingly, similar argument was also posited by A D Shroff in 1959 who pointed out that the pressure of higher plan outlays *“might develop into a sort of runaway inflation.”*

A D Shroff’s “An Inflationary Budget” can be accessed [here](http://indianliberals.in/~_admin/pdflanguage?id=1784830707.pdf).

**3\. Tax code reforms**

As the India Ratings and Research [report](https://www.indiaratings.co.in/PressRelease?pressReleaseID=37447&title=FY20-Budget%3A-Navigating-Fiscal-Constraints-to-Accelerate-GDP-Growth---Key-Challenge) on FY 20 Budget makes it clear, it is necessary to bring a simplified direct tax code to expand the tax base and enable accelerated growth. Extremely complex and often contradictory laws have made it difficult to do business in India and has topped the [reform agenda](http://www.esocialsciences.org/Download/Download.aspx?qs=Uqn/rN48N8UOPcbSXUd2VB+JD8bwNp2xCs+VctQjwPdEWn9iSVyGa7or0n+awqDcPckzYY3LRBK4KXM+wDS9jSDMq+1XplD6G8tLEt/+2OZbxUbsXxAolpyK2KLSLF7o7qPXN6pFyVUBJLTLtrL6uXDsloLaU7Ozx120vrI06rI=) of liberal economists. The case for simplification of laws could be found in the 1965 Budget analysis of A D Shroff. 

Shroff had argued that a good law *“must be simple to understand and easy to administer.”* Five decades later, Indian liberals are making the similar case, a telling verdict on the apathy of the Indian state.

Read the 1965 Union budget analysis by A D Shroff [here](http://indianliberals.in/~_admin/pdflanguage?id=324681725.pdf)

**4\. The Ibn Khaldun Curve of Optimal Taxation**

A [Business Standard](https://www.business-standard.com/article/companies/budget-2019-start-ups-investors-seek-tax-sops-easier-compliance-regime-119070301205_1.html) news report expects the Union Budget to provide tax relief to ‘recognized’ start-ups. During the socialist years, it was Nani Palkhivala who vocally advocated less taxation to induce growth. In the 1963 budget analysis, Palkhivala gave the example of Japan which saw economic growth *“by effecting sizable reduction in personal and corporate taxation.”* He also sarcastically called the superprofit tax the *“Economic Harakiri Act, 1963”.*

Read Nani Palkhivala’s budget analysis : [https://spontaneousorder.in/budget-palkhivala/](https://spontaneousorder.in/budget-palkhivala/)   

It could be argued that the historical writings of Indian Liberals are still relevant for current matters of economic policy. Therefore, there is a clear need to revisit the erstwhile neglected pages of Indian history.

To read more about eminent Indian Liberal thinkers and to access their writings, visit [indianliberals.in.](http://indianliberals.in/)  

* * *

**About Sanjeet Kashyap**

A classic liberal by persuasion, Sanjeet has a BA in History from Hansraj College, University of Delhi and is currently pursuing his MA in Politics and International Studies from Jawaharlal Nehru University. At Centre for Civil Society, he is the inaugural Indian Liberal Fellow working on the Indian Liberals project of the think-tank. His research interests include but are not limited to political economy, geopolitics, and global history.

## SO Basically – Episode 05 | Kya Private Schools Chor Hai?

Original: https://www.spontaneousorder.in/p/so-basically-episode-05-kya-private-schools-chor-hai

Author: Spontaneous Order

Published: 2019-07-04T06:08:53.000Z

Topics: fee-regulation, private-schools, education

> To know more about fee regulation click here.

**Summary:**

This post is a fragmentary announcement for Episode 05 of 'SO Basically' titled 'Kya Private Schools Chor Hai?' (Are Private Schools Thieves?), including a link to a Spontaneous Order article on fee regulation and a standard 'About' blurb on liberal history in India, but lacking any substantive argument, facts, or conclusion.

**Key points:**

- Short teaser for a podcast episode questioning if private schools are 'thieves', likely in context of fee regulation.

**By Spontaneous Order**

* * *

To know more about fee regulation click [here](https://spontaneousorder.in/fee-regulation-and-the-parent/).

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Rise of the Big 4 in Agriculture: Big Trouble?

Original: https://www.spontaneousorder.in/p/rise-of-the-big-4-in-agriculture-big-trouble

Author: Spontaneous Order

Published: 2019-07-01T10:15:48.000Z

Topics: agriculture, gm-seeds, market-consolidation, intellectual-property

> Referred to as the Big 4 – DowDuPont, Bayer-Monsanto, ChemChina-Syngenta and BASF – are four giant firms running the show in the agriculture industry. Their consolidated market share is causing worries among farmers and policymakers who fear sky-high

**Summary:**

The consolidation of the Big 4 firms—DowDuPont, Bayer-Monsanto, ChemChina-Syngenta, and BASF—in the agriculture seed market raises fears of higher prices, reduced farmer choices, high entry barriers, and stifled innovation, but these concerns are overstated from a classical-liberal viewpoint. An OECD report analyzing 87 seed markets finds no evidence of higher seed prices linked to concentration; instead, public plant breeders and farm-saved seeds lower prices, while substitutes like non-GE hybrids constrain pricing power. Farmers access seeds from public breeding, private sectors, and farm-saving, ensuring ample choices despite fewer GE varieties. High R&D costs, stringent regulations, and patents create barriers: GE seeds can be developed in six months versus decades for crossbreeding, yet approvals lag, as seen in India's stalled GM mustard despite safety studies. Patents grant temporary monopolies that disincentivize competition and innovation, while conditional contracts limiting seed reuse are market norms addressable by rivals in free markets. To combat climate change via resilient GE seeds, the author advocates lowering entry barriers through clear safety standards and abolishing patents, spurring more firms to compete, innovate rapidly, and deliver affordable, high-quality options to farmers.

**Key points:**

- OECD analysis of 87 seed markets shows no link between concentration and higher seed prices; public breeders and farm-saved seeds reduce costs.
- High R&D investments, excessive regulations, and patents deter new entrants and slow GE seed innovation needed for climate resilience.
- Patents protect inventions but disincentivize ongoing competition, delaying better farmer contracts and research access until expiry.
- Eliminate patents and streamline safety regulations to enable more firms, fostering rapid innovation and diverse GE seed choices for farmers.

**By Afifah Siddiqui**

* * *

Referred to as the Big 4 – DowDuPont, Bayer-Monsanto, ChemChina-Syngenta and BASF – are four giant firms running the show in the agriculture industry. Their consolidated market share is causing worries among farmers and policymakers who fear sky-high prices, lack of choice to farmers, high barriers to entry and threat to innovation. In this article, I evaluate the basis for such concerns to find if they stand their ground or remain shaky. 

The argument for price rise is edging on cliché: Few competitors realize the benefits from cartelizing and increase their profits by charging a higher price. While this sounds plausible, there are various explanations for why this is unlikely to happen. Most goods have substitutes. So, while the Big 4 may want to fetch higher prices for their Genetically Engineered (GE) seeds, the demand for these seeds will be competing against other non-GE hybrids, in case the former becomes unviable. Therefore, to sell more seeds these corporations will have to price their products wisely, or farmers will resort to buying non-GE alternatives. In fact, a report titled *[Concentration in Seed Markets: Potential Effects and Policy Responses](https://read.oecd-ilibrary.org/agriculture-and-food/concentration-in-seed-markets_9789264308367-en#page1)* published by the Organization for Economic Cooperation and Development (OECD) confirms the same:

*‘Using data from 87 seed markets, and correcting for crop-specific and country-specific effects and several other factors, the analysis did not find evidence of higher seed prices in markets with higher levels of market concentration. However, the analysis does suggest that a greater market share for public plant breeders, and a greater share of farm-saved seed, reduce average prices.’*

The second worry is that consolidation in the seeds market will reduce the choices available to farmers, leaving them dependent on the Big 4. This apprehension makes sense in a world where there are no seeds available to farmers from any other source. This is far from being true. As cited in the OECD report, farmers acquire seeds from three sources: farm-saved seed purchased seed derived from public plant breeding or purchased seed from the private sector. While GE varieties maybe few, choice across seeds is plenty. 

Yet, to encourage choice in GE seeds, especially since climate change is making conditions of agriculture unpredictable every year, we need faster innovation. These seeds can be engineered to meet the changing needs of every season – they can be made drought resistant, safe from chemicals etc. – in as little time as six months. This is nothing when compared with decades taken to create new varieties through crossbreeding. More choice is a by-product of increasing competition between firms and is less likely to happen with few firms in the industry.

Why then do we have such few players in the agriculture industry? One factor is the high investments required for research and development (R&D) in GE and non-GE seeds. Investments in technology, getting the right talent onboard and having the capital to conduct R&D for years till the outcome is perfect, is a costly affair. High regulatory demands add to the cost, both in terms of time and money. Regulation, though necessary for guaranteeing safety, is sometimes taken too far when regulatory bodies don’t approve innovations, based on their whims. An [article posted by](https://www.smartindianagriculture.com/devang-mehta-a-young-zurich-based-scientist-writes-why-he-quit-gm-research/) *[Smart Indian Agriculture](https://www.smartindianagriculture.com/devang-mehta-a-young-zurich-based-scientist-writes-why-he-quit-gm-research/)* in March 2018 accurately explains the frustration of researchers in the domain:

*‘Nearly two decades after he began work on GM* (Genetically Modified) *mustard, Deepak Pental and his team of scientists at Delhi University have not been able to obtain approval from the government for its cultivation, despite a recommendation from the regulator. Environment Minister Harsh Vardhan is procrastinating. He is buying time by telling the regulator to review objections that it has already considered and rejected. Anti-GM activists have attacked Pental personally and portrayed GM mustard as dangerous, even though studies have shown that it is safe.’*

While high entry barriers act as deterrents, governments offer patent rights as an incentive for individuals to undertake R&D and come up with innovations. Patents give inventors the right to prevent others from commercially exploiting their invention for a given number of years. These rights, however often end up doing the opposite. Innovations secured via patents, slow down competition from external players, thereby disincentivizing a constant need to innovate in order to remain competitive. 

Some argue that companies which sign conditional contracts with farmers – disallowing them to re-sow seeds or resell them to scientists – not only commit grave injustice but also slow down innovation by closing doors for further research. Offering consumers a partial right to use products is not unique to agriculture but happens all the time. Purchasing a car on lease or living in a rented house are all examples of possessing partial rights. 

Both conditional contracts and inaccessibility to seeds for research can be better understood by comparing two scenarios. In a free market, competitors can use this contractual situation as an opportunity to increase their market share by offering unconditional contracts – both, allowing farmers complete rights to do as they please and scientists to acquire seeds for research. However, when the government protects innovations through patents, it disincentivizes *all* companies to make such offers, at least until the patents expire. The cost of this is innovation slowing down by as many years. 

A thriving market for GE seeds is crucial in a world battling climate change. If we are serious about making a variety of good quality and affordable GE seeds available to farmers, lowering entry barriers by defining safety standards and doing away with patents would be an effective start. More firms hungry for profits face stronger incentives to perform and give farmers not only more choices, but better quality goods to choose from, leaving us all in good stead.

Read more: [https://spontaneousorder.in/genetically-modified-crops-facts-vs-fiction/](https://spontaneousorder.in/genetically-modified-crops-facts-vs-fiction/)

* * *

**About Afifah Siddiqui**

Afifah is a graduate in Sociology from Miranda House, University of Delhi and holds a Post Graduate Diploma in Liberal Studies offered at Ashoka University via the Young India Fellowship. She believes that ideas can make all the difference in the world and this is what brings her to Centre for Civil Society, where she is currently working as a Junior Associate at their training and outreach department,CCS Academy.

## SO Musings: Wastage in Public Sector Enterprises

Original: https://www.spontaneousorder.in/p/so-musings-wastage-in-public-sector-enterprises

Author: Spontaneous Order

Published: 2019-06-28T12:10:41.000Z

Topics: public-sector-enterprises, government-inefficiency, economic-wastage, indian-liberalism

> Way back in 1971, Dr B R Shenoy in his very perceptive article titled “Public Sector Wastage” [published in Bombay Pradesh Congress Souvenir: January 1971] unveiled the “picture of waste” of public sector enterprises, which are perfectly valid eve

**Summary:**

In a 1971 article 'Public Sector Wastage,' Dr. B.R. Shenoy exposed chronic inefficiencies in India's public sector enterprises (PSEs), a critique that remains acutely relevant today from a classical-liberal standpoint critiquing state-led economic mismanagement. Shenoy detailed seven key manifestations: (a) idle production capacities; (b) unconscionable wastage of materials and accessories; (c) incredible over-staffing; (d) lack of cost consciousness; (e) gross neglect of maintenance of plant and equipment; (f) high cost and low quality; and (g) pressures by politicians and interference by Ministries. These issues persist in Central Public Sector Enterprises, underscoring the enduring failures of government-controlled industries amid pseudo-socialist policies that liberals have long opposed. The post, originally from Forum for Free Enterprise (March 2014), highlights how such wastage hampers India's economic potential, advocating implicitly for market-oriented reforms over state dominance.

**Key points:**

- Dr. B.R. Shenoy's 1971 article identified seven specific forms of wastage in India's public sector enterprises, including idle capacities and over-staffing.
- These inefficiencies, such as lack of cost consciousness and political interference, remain valid for Central Public Sector Enterprises today.
- Classical-liberal thinkers like Shenoy critiqued pseudo-socialism's banality, revealing persistent PSE mismanagement.

**By Spontaneous Order**

* * *

Way back in 1971, Dr B R Shenoy in his very perceptive article titled “Public Sector Wastage” \[published in Bombay Pradesh Congress Souvenir: January 1971\] unveiled the “picture of waste” of public sector enterprises, which are perfectly valid even today. What were the manifestations of public sector wastage? To quote some of the meaningful descriptions of such wastage from his observations then: (a) idle production capacities; (b) unconscionable wastage of materials and accessories; (c) incredible over-staffing; (d) lack of cost consciousness; (e) gross neglect of maintenance of plant and equipment; (f) high cost and low quality; and (g) pressures by politicians and interference by the Ministries. All these features of inadequacies in Central Public Sector Enterprises’ management in India seem to be of eternal relevance!

*Access the full document [here](http://indianliberals.in/~_admin/pdflanguage?id=867426276.pdf).*

*First Published in Forum for Free Enterprise- March 2014*

Read more: [https://spontaneousorder.in/why-bsnl-needs-to-hang-up/](https://spontaneousorder.in/why-bsnl-needs-to-hang-up/)

*Other editions of the publication can be accessed at [Indian Liberals](http://indianliberals.in/), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Why BSNL needs to Hang up

Original: https://www.spontaneousorder.in/p/why-bsnl-needs-to-hang-up

Author: Spontaneous Order

Published: 2019-06-26T13:03:55.000Z

Topics: psu-reform, telecom-sector, government-bailouts, privatization

> Bharat Sanchar Nigam Limited (BSNL), the Indian public sector undertaking in the field of telecommunication, has been unable to pay the Rs 850 crores in salaries to its 1.74 lakh employees for the month of June 2019 and has approached the government see..

**Summary:**

Bharat Sanchar Nigam Limited (BSNL), a public sector telecom undertaking, faces chronic insolvency, unable to pay Rs 850 crores in salaries to its 1.74 lakh employees in June 2019 and seeking government bailouts amid Rs 14,000 crores in debt and Rs 82,000 crores in accumulated losses since its last profit in 2008-09. Employee costs consume 66% of operating revenues in 2018-19, up from 21% in 2006-07, rendering it uncompetitive in a market-driven sector. Despite holding assets worth Rs 1.32 lakh crores (2017-18), BSNL refuses to liquidate them and instead requests Rs 2,500 crores in loans from taxpayers to sustain operations for mere six months. Its market share has plummeted to 9.7% in January 2019 from 19% in March 2009, serving just 11.62 crores customers out of 120 crores total subscribers. From a classical-liberal viewpoint, telecom is not a public good warranting government ownership; perpetuating bailouts for inefficient PSUs subsidizes high employee bonuses at the expense of over 90% of non-customers, undermining competition and fiscal prudence. The government must reconsider BSNL's fate, allowing market forces to prevail over endless taxpayer-funded rescues.

**Key points:**

- BSNL's debt stands at Rs 14,000 crores with Rs 82,000 crores in accumulated losses, last profitable in 2008-09.
- Employee costs comprise 66% of revenues in 2018-19, making BSNL uncompetitive amid private sector cost-cutting.
- BSNL holds Rs 1.32 lakh crores in assets but seeks Rs 2,500 crores bailout instead of liquidation.
- Market share fell to 9.7% by Jan 2019; government should end taxpayer subsidies for this failing PSU.
- Telecom is not a public good, so privatize or shut down BSNL to foster competition.

**By Sunaina Mathur**

* * *

Bharat Sanchar Nigam Limited (BSNL), the Indian public sector undertaking in the field of telecommunication, has been unable to pay the [Rs 850 crores in salaries](https://timesofindia.indiatimes.com/business/india-business/nearly-impossible-to-run-operations-bsnl/articleshow/69920159.cms) to its [1.74 lakh employees](http://tender.bsnl.co.in/bsnltenders/pdf/AR%202017-18%20ENGLISH.pdf) for the month of June 2019 and has approached the government seeking immediate assistance. Under massive debt for many years, BSNL is not a stranger to such situations. Here are four things you should know about BSNL (for you have been paying for it all along):

1.  **Mounting debts and losses**: Established in the year 2000, BSNL – once a Navratna PSU – has been in debt since 2010-11. Last time it made profits was in the year 2008-09, after which it has been consistently reporting losses, so much so that its total debt at the end of 2018-19 stands at [Rs 14,000 crores](https://timesofindia.indiatimes.com/business/india-business/nearly-impossible-to-run-operations-bsnl/articleshow/69920159.cms). The telco is said to have accumulated operating losses to the tune of [Rs 82,000 crores](https://www.businesstoday.in/current/corporate/bsnl-bharat-sanchar-nigam-ltd-telecom-sector-loss-kotak-equities-telecom-firm-bsnls-total-loss-crossed-rs-90000-by-december-end-kotak-equities/story/327996.html) over the years. 
    
2.  **High employee costs**: Employee costs made up about 66 per cent of BSNL’s operating revenues in the financial year 2018-19 as against 21 per cent in the financial year 2006-07.
    
3.  **Sitting on a mountain of cash, yet borrowing**: While BSNL has pegged its fixed assets at Rs 42,507 crores as of 2016, its own balance sheet from 2017-18 estimates its assets at Rs 1.32 lakh crores. Instead of liquidating a few assets pay off the debts, BSNL is seeking more money from the government to stay operational.
    
4.  **Deserting customers**: As per data from the Telecom Regulatory Authority of India (TRAI), BSNL’s market share has come down to 9.7 per cent in January 2019 from 19 per cent in March 2009. Yet again the government is contemplating using taxpayers’ money to bailout BSNL, which has a customer base of 11.62 crores out of the telecom subscriber base of over [120 crores](https://main.trai.gov.in/sites/default/files/PR_No.22of2019.pdf).
    

The government is seeking immediate loans of Rs 2,500 crores to keep the Public Sector Undertaking afloat. This amount will sustain operations only for about 6 months and this is a big deterrent for the lenders. This is an unsustainable model and the fate of BSNL needs to be reconsidered. Telecom is not a public good and it does not make sense for the government to hold onto a failing Public Sector Undertaking. 

The high employee costs of BSNL are unfit for today’s competitive markets when enterprises across the spectrum are economising and cutting down costs to survive and remain competitive. The government cannot continue the practice of bailing out perpetually sick Public Sector Undertakings using taxpayers’ money, over 90% of whom aren’t even choosing to opt for that service yet end up subsidising high bonuses of government employees. 

Read more: [https://spontaneousorder.in/why-bsnl-needs-to-hang-up/](https://spontaneousorder.in/why-bsnl-needs-to-hang-up/)

* * *

**About Sunaina Mathur**

Sunaina holds a Bachelor of Arts in Economics from Fergusson College, Pune. She has previously interned with the National Human Rights Commission(NHRC), the Government of Andhra Pradesh and has represented India at the UN for the Merit360 programme. Her love for languages and poetry drove her to learn French and Russian Languages, and she hopes to read her favourite book ‘War and Peace’ in Russian someday.

## Multipronged Approach to Education

Original: https://www.spontaneousorder.in/p/multipronged-approach-to-education

Author: Spontaneous Order

Published: 2019-06-21T11:49:54.000Z

Topics: education-reform, school-choice, rte-act, new-education-policy

> Education in India today has been entangled in the web of input norms and regulations, driven by the idea of uniformity and standardisation. While policies to this effect have been successful in achieving near perfect enrollment rates, the learning outc..

**Summary:**

India's education system is hampered by uniform input norms and the RTE Act 2009, which prioritize standardization over innovation, achieving near-perfect enrollment but dismal learning outcomes as per ASER 2018. This has marginalized student-centric models like gurukuls and madrasas, replacing them with factory-like schools and leaving little room for exploration. Alternative education providers struggle for recognition under rigid affiliation norms. The draft New Education Policy (NEP) 2019 offers a classical-liberal shift by enabling multiple learning pathways, diverse school models, and minimal input norms for recognition, fostering innovation in curriculum and pedagogy. It supports parental choice for homeschooling, gurukuls, and other options suited to geographical and cultural diversity, while proposing a review of RTE to liberalize norms. Additionally, NEP promotes technology and distance learning via expanded National Institute of Open Schooling (NIOS) programs and State Institutes of Open Schooling (SIOS) for vocational education up to grade 12, enhancing accessibility and employability. This child-centric approach empowers parents to select education matching their child's aptitudes, reevaluating RTE to prioritize outcomes over uniformity.

**Key points:**

- RTE Act 2009 imposes rigid input norms that stifle alternative education models like gurukuls and homeschooling.
- Draft NEP 2019 enables multiple school models and liberalizes recognition norms to promote innovation and parental choice.
- NEP supports technology-driven distance learning through NIOS and proposed SIOS for accessible education up to grade 12.
- Reevaluate RTE Act to shift from uniformity to child-centric policies improving learning outcomes.

**By Sunaina Mathur**

* * *

Education in India today has been entangled in the web of input norms and regulations, driven by the idea of uniformity and standardisation. While policies to this effect have been successful in achieving near perfect enrollment rates, the [learning outcomes remain dismal](http://passthrough.fw-notify.net/download/518441/http://img.asercentre.org/docs/ASER%202018/Release%20Material/aserreport2018.pdf). There is little space for children to explore and experiment. Student-centric and student-led models of learning such as our age-old indigenous gurukuls or madrasas have been replaced by the factory-like school models. There exists a wide gap between what students get and what they need. This gap is filled by alternative methods of education that employ different pedagogy, alternative learning environments and experimentative methods to ensure more holistic development of individuals. But in India, such institutions are struggling for their existence.

With the introduction of the Right of Children to Free and Compulsory Education (RTE) Act 2009, institutions of alternative education have been grappling for recognition. The streamlining of ‘compulsory’ education through schools that meet the affiliation and recognition norms under the Act and those of the Boards of Assessment (BOA), has made the existence of alternative models difficult.

While the RTE robbed the education system of diversification and diversity, the draft New Education Policy (NEP) 2019 brings a glimmer of hope for innovators in learning models, curriculum and pedagogy. The draft recommends ‘Enabling multiple pathways to learning’ and ‘Allowing multiple models for schools’, acknowledging the importance of variation and innovation in education. By allowing different models of schools and limiting input norms for recognition to a bare minimum, draft NEP has encouraged greater freedom for academicians and parents. If accepted, what benefits would this have?

Indian education’s one-size-fits-all model does not take into account geographical and cultural diversity, neglecting the needs of the students who become detached from the very start of the learning process. If implemented, draft New Education Policy will allow parents to reject conventional schools and can opt for options like homeschooling, gurukuls, etc. The draft NEP proposes to bring these changes through a relook and review of the RTE Act to ensure quality education at scale by making recognition and affiliation norms more liberal.

To increase the accessibility of education, the draft New Education Policy makes another pragmatic suggestion. It espouses the use of technology and distance learning to bring education to those who cannot go to schools. These recommendations include an impetus to Open and Distance Learning (ODL) programmes offered by the National Institute of Open Schooling (NIOS) for vocational education to adults and youth to make them more employable. A proposal has also been made for all State governments to open State Institutes of Open Schooling (SIOS) to ensure minimum education till grade 12 for all.

With the draft NEP, the government seems to finally acknowledge that there can exist various forms of teaching and learning. Many innovative platforms exist that use technology, stories, experiment and practise to guide the process of learning. And the uncertain existence of these schools given the input-centric and capital-heavy norms in addition to a lack of recognition may no longer be a problem.

Every parent must have the right to choose an education they feel is compatible with their child’s aptitude and inclinations. Our education policies should revolve around the child, which is why it is pertinent to reevaluate the RTE Act to ensure better learning outcomes.  

Read more: [https://spontaneousorder.in/nep-paradigm/](https://spontaneousorder.in/nep-paradigm/)

* * *

**About Sunaina Mathur**

Sunaina holds a Bachelor of Arts in Economics from Fergusson College, Pune. She has previously interned with the National Human Rights Commission(NHRC), the Government of Andhra Pradesh and has represented India at the UN for the Merit360 programme. Her love for languages and poetry drove her to learn French and Russian Languages, and she hopes to read her favourite book ‘War and Peace’ in Russian someday.

## SO Musings: Economic Freedom for Farmers

Original: https://www.spontaneousorder.in/p/so-musings-economic-freedom-for-farmers

Author: Spontaneous Order

Published: 2019-06-20T08:18:55.000Z

Topics: agriculture, economic-freedom, farm-reforms, regulatory-relief

> Despite all claims of economic reforms since 1991, agriculture the largest private sector in India has remained shackled. The agriculture distress covers all aspects of farming, from land to seeds, from various inputs to outputs, are controlled by a maz..

**Summary:**

Despite economic reforms since 1991, India's agriculture—the largest private sector—remains shackled by a maze of laws and regulations controlling land, seeds, inputs, outputs, credit, infrastructure, markets, and technologies. This regulatory stranglehold causes comprehensive distress, preventing farmers from operating freely or profitably. Farmers cannot easily exit agriculture due to poor education, health services, and lack of non-farm opportunities, leaving them trapped in poverty not from incapacity but from barriers to unlocking their assets and unleashing their entrepreneurial spirit. The post frames Indian agriculture as synonymous with poverty due to state interventions stifling independence and enterprise, rather than inherent farmer shortcomings. It highlights the 'Farmers’ manifesto for freedom' as a consolidation of farmers' demands for deregulation to enable profitable operations, endorsed by farmers, academicians, intellectuals, and civil society leaders nationwide. From a classical-liberal viewpoint, true farmer welfare requires liberating them from these controls to foster prosperity through free markets and individual initiative.

**Key points:**

- Post-1991 economic reforms have bypassed agriculture, leaving it heavily regulated across inputs, outputs, and markets.
- Farmers are trapped in agriculture due to poor non-farm alternatives like education and health services.
- Poverty in farming stems from regulations blocking asset unlocking and entrepreneurial freedom, not farmer incapability.
- The Farmers’ Manifesto demands freedom for profitable operations, endorsed by diverse leaders.

**By Spontaneous Order**

* * *

Despite all claims of economic reforms since 1991, agriculture the largest private sector in India has remained shackled.

The agriculture distress covers all aspects of farming, from land to seeds, from various inputs to outputs, are controlled by a maze of laws and regulations. Likewise, farmers’ access to credit, infrastructure, markets and technologies are all limited, restricted or even prohibited.

Farmers can neither quit agriculture, nor can they find alternative means of livelihood, given the poor quality of education and health services, and lack of economic opportunities in the non-farm sectors. Farmers have nowhere else to go, most are not just distressed, they are gasping for survival and desperately looking for any opportunity to turn the tide and prosper.

Indian agriculture has become synonymous with poverty, not because the farmers are incapable, but because they are being prevented from unlocking the wealth of their assets and unleashing their spirit of independence and enterprise.

*Farmers’ voice is lost in the pandemonium surrounding their welfare. The farmers’ manifesto for freedom is a consolidation of their needs and demands to operate freely and profitably. View the manifesto [here](https://www.farmersmanifesto.info/).*

*The manifesto has been endorsed by farmers, academicians, intellectuals and civil society leaders across the country. You can view the list of endorsers [here](https://www.farmersmanifesto.info/endorsement/).*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: Free Trade for developing countries

Original: https://www.spontaneousorder.in/p/so-musings-free-trade-for-the-poorer-countries

Author: Spontaneous Order

Published: 2019-06-18T13:19:46.000Z

Topics: free-trade, protectionism, developing-economies, trade-liberalization

> The problem with protectionism is not merely a problem with Western protectionism. An even bigger problem is poor country protectionism. Countries generally need more trade, that means not only exports but also imports. Imports are needed for the consum..

**Summary:**

Protectionism in poor countries poses a greater obstacle to growth than Western protectionism, as developing nations require expanded trade in both exports and imports to foster consumer benefits, competition, specialization, and monopoly-fighting dynamics. Low import tariffs are essential not only for consumers but also to enable exports, given that approximately 40 percent of exports from developing countries are directed to other developing countries. High tariffs among poor nations prevent their producers from accessing neighboring markets, granting domestic monopolies at the expense of broader specialization, which drives economic growth. Notably, developing countries impose tariffs on each other that are more than two and a half times higher than those levied by industrialized countries on developing-country goods. Consequently, over 70 percent of customs duties paid by developing countries are collected by fellow poor nations. From a classical-liberal viewpoint, poor-country trade liberalization would yield greater benefits for these economies than liberalization by rich countries. This argument underscores the self-defeating nature of intra-developing-world protectionism.

**Key points:**

- Poor-country protectionism harms consumers, exporters, and specialization more than rich-country protectionism.
- Imports are vital for competition, fighting monopolies, and enabling exports in developing economies.
- 40% of developing countries' exports target other developing countries, making intra-poor tariffs particularly damaging.
- Developing countries' tariffs against each other exceed industrialized countries' tariffs against them by over 2.5 times.
- Over 70% of customs dues paid by poor countries are levied by other poor countries, so they should prioritize mutual trade liberalization.

**By Spontaneous Order**

* * *

The problem with protectionism is not merely a problem with Western protectionism. An even bigger problem is poor country protectionism. Countries generally need more trade, that means not only exports but also imports. Imports are needed for the consumers and for competition and specialisation in the economy, and to fight monopolies. And low import tariffs are needed for exports as well. Something like 40 per cent of exports from developing countries go to other developing countries. If, then, poor consumers are forced to pay heavy prices for products from companies in their own country, they are prevented from buying from companies in the neighbouring countries, in which case the producers will also lose by this policy. They may get a monopoly of their own market, but on the other hand, they are stopped to sell to other markets. This destroys specialisation, which is an engine for growth. Developing countries’ tariffs against other developing countries today are more than two and a half times higher than the industrialised countries’ tariffs against developing countries. Thus more than 70 per cent of the customs dues which developing countries are forced to pay are levied by other developing countries. Poor countries would benefit more from poor country liberalisation, than from rich country liberalisation.

*This is an excerpt from ‘Globalisation and the Poor’.* *Find the full document [here](http://indianliberals.in/~_admin/pdflanguage?id=320454942.pdf).*

Read more: [https://spontaneousorder.in/bastiat-on-the-balance-of-trade/](https://spontaneousorder.in/bastiat-on-the-balance-of-trade/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Five Reform ideas for ‘Minimum Government, Maximum Governance’

Original: https://www.spontaneousorder.in/p/five-reform-ideas-for-minimum-government-maximum-governance

Author: Spontaneous Order

Published: 2019-06-14T11:03:52.000Z

Topics: ease-of-doing-business, school-vouchers, agricultural-liberalisation, decentralisation, institutional-autonomy

> Prime Minister Narendra Modi endorsed the idea of ‘Minimum Government, Maximum Governance’ as a guiding principle for his government back in 2014, yet few structural reforms have been undertaken over the past five years to make it a reality. As the BJ

**Summary:**

Prime Minister Narendra Modi's 2014 vision of ‘Minimum Government, Maximum Governance’ remains unrealized after five years, but the BJP's second term with the largest parliamentary majority in over three decades offers a prime opportunity for structural reforms. The post proposes five classical-liberal ideas: First, ease regulatory barriers for marginal entrepreneurs like street vendors and informal recyclers, micro/small enterprises, and tech innovators; privatize public companies except those vital for national security like uranium mining. Second, enact a Right to Education Act 2.0 using school vouchers to finance education for 250 million students, separating government from auditing and execution, and recognizing schools based on learning outcomes rather than inputs like classroom sizes or swimming pools. Third, liberalize agriculture by repealing the cartel-like APMC, Essential Commodities Act, GM seed bans, land ceilings, and contract farming restrictions, mirroring 1991 industrial reforms to enable farmer prosperity through markets. Fourth, fully implement the 73rd and 74th Constitutional Amendments by mandating fund devolution, strengthening mayors, and boosting local transparency for efficient citizen-focused governance. Fifth, ensure institutional autonomy through fixed internal processes, minority government representation on boards, and time-bound vacancies. These reforms would shrink government's role, empower markets and choice, and deliver maximum governance via efficient institutions.

**Key points:**

- Privatize non-security public enterprises and deregulate for marginal entrepreneurs and tech firms to enable a fair free market.
- Introduce school vouchers and outcome-based school recognition in a reformed RTE Act to promote education choice and market competition for 250 million students.
- Repeal APMC, Essential Commodities Act, GM bans, land ceilings, and contract farming restrictions to liberalize agriculture and boost farmer prosperity like 1991 reforms.
- Mandate implementation of 73rd/74th Amendments with fund devolution and stronger mayors to decentralize governance and improve local efficiency.
- Insulate independent institutions from political interference via autonomous boards and processes to support effective governance.

**By Gopikrishnan Nair**

* * *

Prime Minister Narendra Modi endorsed the idea of ‘Minimum Government, Maximum Governance’ [as a guiding principle](https://www.narendramodi.in/minimum-government-maximum-governance-3162) for his government back in 2014, yet few structural reforms have been undertaken over the past five years to make it a reality. As the BJP government starts its second tenure, with the largest parliamentary majority in over three decades, the Prime Minister is presented with a unique opportunity to realise this vision.  

Here are some key ideas to make ‘Minimum Government, Maximum Governance’ a reality:

**1\. Ease of Doing Business for ALL**

Marginal entrepreneurs (street vendors, informal recyclers, etc.) along with micro and small enterprises form the backbone of India’s economy. Placing an institutional emphasis on reducing regulatory barriers for this segment is key to ensuring sustainable development at scale (or ‘Sabka Vikas’). On the other end of the spectrum, disruptive tech enterprises in India desperately need a respite from archaic regulations that fail to understand their technology and innovations.  

Additionally, one can’t have a fair and efficient free market when the government is being both the facilitator and an active player in the market. Publicly owned companies need to be privatised and the government should restrict its presence in only those enterprises that are required for ensuring National Security (e.g., uranium mining, ordnance factories, etc.).  

**2\. Creating a Right to Education Act 2.0  
**

The government’s one-size-fits-all education model fails to capture the diverse needs and aspirations of over 250 million school students. Thus, the first step towards reforming the education sector is to separate the government’s role as the financier, auditor, and executor of education. The government should instead just focus on financing education through school vouchers, leaving the job of audit and execution to independent institutions and edupreneurs respectively.  

Also, recognition should be given to schools on the basis of learning outcomes and not structural requirements, i.e., schools should be gauged on the basis of the quality of education they impart, not the size of their classrooms and [number of swimming pools](https://www.indiatoday.in/mail-today/story/cm-arvind-kejriwal-opens-swimming-pools-for-govt-school-kids-trainers-to-impart-free-coaching-1207249-2018-04-08). A reworked Right to Education Act incorporating these elements can thus enable an education of choice for all while promoting quality using the power of market competition.

**3\. Liberalising Agriculture  
**

Welfare-centric schemes to uplift our farmers have in reality prevented them from benefiting from market opportunities and kept them dependent on welfare for survival. A classic example is the Agricultural Produce Market Committee (APMC), a highly regulated market for buying farm produce which has turned into a cartel that keeps the farmer from realising the market value of her produce. The Essential Commodities Act, with the intention of preventing hoarding of goods by the middlemen, effectively prevents price stability across seasons. Technology ban on GM seeds, land ceilings and restrictive policies for contract farming further prevent farmers from realising their full potential.  

For the farming community to truly achieve prosperity, all these regressive regulations need to go. Just as the liberalisation reforms of 1991 benefited industries, liberalising agriculture would benefit the farming sector, and in the process, make our farmers truly prosperous.  

**4\. Decentralising Governance  
**

While the 73rd and 74th Amendments to the Constitution enabled devolution of powers and finance to local authorities, lack of political will has stalled the implementation of these provisions across the country. Since there is no mandated demarcation of funds for local governments, the state authorities often lack political incentive to willingly devolve tax revenue to local authorities. Hence, efforts towards implementation of these amendments is the stepping stone towards empowering local governments.  

Also, the position of the city mayor needs to be strengthened beyond its current titular role and measures need to be taken to increase transparency. A strong local government can do wonders to improve the everyday life of our citizens and ensure that the electoral focus remains on efficient usage of their taxes.

**5\. Ensuring Autonomy for Institutions  
**

Independent institutions enable different branches of the state to perform their duties in an efficient manner and are invaluable in ensuring effective governance despite political uncertainties. As such, their functioning should be based on set processes of internal decision making and insulated against arbitrary political interventions. Boards and committees of these institutions should have minority representation by government officials and vacancies should be filled in a time-bound manner.  

Creating policy frameworks that ensure the autonomy of institutions is, in the long term, beneficial to both the government and the people. After all, ‘Minimum Government’s will need efficient institutions to impart ‘Maximum Governance’.  

Read more: [https://spontaneousorder.in/transparency-of-rights-act-good-governance-and-civil-society/](https://spontaneousorder.in/transparency-of-rights-act-good-governance-and-civil-society/)

* * *

**About Gopikrishnan Nair**

Gopikrishnan Nair has a Master’s degree in Political Communication and Strategy, and has experience working in a variety of PR/Marketing oriented roles that include working at the United Nations office in Brussels, supervising the Sales/Marketing department of a Digital Marketing agency, managing/co-founding a Socio-Environmental NGO and working as the Online Campaign Manager for a prominent politician during the 2014 Indian General Elections. Moreover, he has also helped organise various inter-collegiate, social and TEDx events. He likes recycling, chai and Old Monk.

## SO Musings: Accountability in Public Service

Original: https://www.spontaneousorder.in/p/so-musings-accountability-in-public-service

Author: Spontaneous Order

Published: 2019-06-11T05:23:17.000Z

Topics: accountability, public-service, governance, bureaucracy

> Accountability, as mentioned earlier, constitutes the soul of effectiveness and quality of public service. It means responsibility. In the ultimate analysis, it should and can be fixed and focused only on individual human beings. Fixing responsibility o..

**Summary:**

Accountability forms the soul of effective and high-quality public service, embodying personal responsibility that must ultimately be fixed on individual human beings rather than organizations. Organizations, being artificial and impersonal entities, cannot truly bear accountability in a meaningful way; attributing it to them is merely figurative. In public service analysis, emphasizing the individual human element is essential to enforce accountability and rectify systemic failures. The excerpt argues that the pervasive poor quality of governance and services in India stems primarily from a lack of individual accountability. From a classical-liberal viewpoint, as presented by Spontaneous Order drawing from the Forum for Free Enterprise, this individual-focused approach is key to improving public administration, countering the inefficiencies of bureaucratic impersonality that have plagued post-independence India under pseudo-socialist influences.

**Key points:**

- Accountability in public service must be fixed on individual human beings, not organizations.
- Organizations are artificial entities incapable of genuine responsibility.
- Focusing on individuals enables true accountability and system rectification.
- Lack of individual accountability is the main cause of poor governance quality in India.

**By Spontaneous Order**

* * *

Accountability, as mentioned earlier, constitutes the soul of effectiveness and quality of public service. It means responsibility. In the ultimate analysis, it should and can be fixed and focused only on individual human beings. Fixing responsibility on organisations can be a manner of speaking. An organisation is, after all, an artificial person and an impersonal entity. Fixing it on organisations does not really make the practice of accountability meaningful. In any analysis in public service, we must never forget the fact that accountability is on the individuals. It is when we focus on the individual human element that we will be able to fix accountability and in case of failure rectify the system. In fact, if there is a single element that is responsible for the prevailing poor quality of governance in our country or the quality of services in any sector, we find invariably, it is the lack of sense of accountability.

*This is an excerpt from the February 2011 issue of the ‘Forum for Free Enterprise’. Read the full document [here](http://indianliberals.in/~_admin/pdflanguage?id=761492374.pdf).*

Read more such articles: [https://spontaneousorder.in/bureaucracy-accountability/](https://spontaneousorder.in/bureaucracy-accountability/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Farmers — not activists — prove the case for genetically modified brinjal

Original: https://www.spontaneousorder.in/p/farmers-not-activists-prove-the-case-for-genetically-modified-brinjal

Author: Spontaneous Order

Published: 2019-06-07T13:30:22.000Z

Topics: gm-crops, farmer-autonomy, biotech-regulation, agricultural-innovation

> Haryana has cracked down on genetically modified (GM) brinjal (eggplant). This variety passed field trials back in 2009, but was stalled by alarmist activists, who bludgeoned a timid government into a moratorium. Meanwhile, GM brinjal passed field trial..

**Summary:**

Haryana's crackdown on smuggled GM brinjal seeds ignores farmers' enthusiastic adoption, as they buy saplings at seven times the normal price for higher yields and drastically reduced pesticide use against pests like shoot-borers. This mirrors Bangladesh, where GM brinjal passed field trials in 2009, was certified in 2013, and thrived commercially. The author argues that farmers, not activists or timid governments, prove GM crops' value, citing India's stalled 2009 approval due to alarmist activism. Parallels with GM cotton—initially illegal but widely grown in the 2000s, doubling yields while cutting pesticides, boosting acreage, production, and exports—show mass defiance forced legalization. Cottonseed from GM varieties has entered India's food chain via oil, vanaspati, and animal feed without harm. Similar public rebellion against illegal TV dishes in the 1990s revolutionized media and created jobs. Anti-GM ideologues, from leftists to RSS nationalists, echo past cultural protectionism. With over one trillion safe GM meals consumed in the US and endorsements from Norman Borlaug and Indian farmer leaders, the classical-liberal case is clear: farmers should defy prohibitive laws, grow GM brinjal, and compel government rescission to unleash agricultural freedom and productivity.

**Key points:**

- Farmers in Haryana bought 1,200 GM brinjal saplings each at seven times the normal price, demonstrating confidence in superior pest resistance and yields.
- GM cotton's illegal adoption in the 2000s doubled yields, reduced pesticide use, and forced government legalization after activists' claims proved false.
- Public defiance of TV dish bans in the 1990s led to media liberalization, creating millions of jobs and improving consumer choice.
- India should approve GM brinjal like Bangladesh did in 2013, as farmers' market signals override activist and regulatory opposition.
- GM cottonseed has safely entered India's food chain for over a decade, contradicting claims of danger for food crops.

**By Spontaneous Order**

* * *

Haryana has cracked down on genetically modified (GM) brinjal (eggplant). This variety passed field trials back in 2009, but was stalled by alarmist activists, who bludgeoned a timid government into a moratorium.

Meanwhile, GM brinjal passed field trials in Bangladesh, was certified for production in 2013, and thrived there. Seeds of GM brinjal are being smuggled into India, and grabbed by farmers for yielding more with much less pesticide use.

GoI hates being portrayed as cracking down on farmers. So, it claims, along with activists, to be cracking down on unscrupulous dealers foisting dangerous seeds on poor innocent farmers. This is plain rubbish. Farmers know infinitely more than activists or scientists about what works and what doesn’t.

**Planter’s Punch  
**The government launched the Green Revolution in rice in the 1960s with varieties like Taichung Native 1 (TN-1) and Tainan-3. Farmers rejected these. Then came a better variety, IR-8, which won limited acceptance. Only with the introduction of IR-20 did farmers switch wholesale to high-yielding varieties.

Lesson: if farmers are rushing into Genetically modified brinjal today, it is because they know that it is good for them, regardless of what activists say.

The news item on the Haryana crackdown on GM brinjal spoke indignantly of laws violated and farmers duped. Yet, it revealed that dealers of GM brinjal saplings were charging seven times as much as for ordinary brinjal, which was susceptible to pests like shoot-borers.

Two farmers in Haryana had bought 1,200 saplings each at seven times the normal price, so confident were they of the outcome. I cannot think of better evidence that India urgently needs GM brinjal. Forget outrageous claims of activists that a variety declared in Bangladesh is unsafe in India.

Farmers of India, unite! Defy stupid laws prohibiting Genetically modified crops and grow them wherever pirated or smuggled seeds are available. That is what you did in the case of GM cotton in the 2000s. It ultimately forced the government, shamefacedly, to regularise what was till then illegal.

Sundry activists had published papers claiming to show that GM cotton was disastrous. Farmers rightly ignored these supposed research findings as ideological rubbish. In practice, cotton yields doubled even as pesticide use declined. Cotton acreage, production and exports shot up.

The same ideologues — ranging from leftists opposing Western seed companies, to RSS ideologues swearing by desi varieties — that once opposed GM cotton are currently thwarting GM brinjal. If farmers grow it nevertheless, GoI will be forced, as before, to rescind its stupid regulations.

GM cotton was the second time that mass public defiance forced the government to abandon stupid laws curbing freedom for producers and consumers. TV was for decades a government monopoly, used as a political propaganda tool. Technology allowing TV programmes to be broadcast across the world was condemned by leftist intellectuals as invasion of Indian airwaves.

Then came the dish revolution and CNN’s aim to go global. During the 1991 Gulf war, Indians installed dishes in droves to hear CNN. The dishes were illegal. So was the distribution of dish signals to consumers.

But public demand was so great that hundreds of small companies strung wires across residential colonies to illegally supply international TV. Later, Indian companies led by Zee began broadcasting to India from abroad.

**Food Feud  
**After trying for years to stop this, GoI finally gave in. It legalised private entry to TV supply and transmission. This, in turn, created millions of highquality jobs, improved consumer satisfaction enormously, and revolutionised entertainment and sports.

The arguments against private TV were eerily similar in some respects to those raised against GM crops. Leftists, as well as RSS, screamed that Indian culture would be crushed by foreign influences (which some called ‘Coca-Colonialism’). Indian TV viewers were portrayed as innocent simpletons being exploited by filthy foreigners and sleazy Indian dealers.

There was much talk of sovereign rights, but none of the rights of Indian producers and consumers. There was much talk of foreign TV being dangerous for Indian health, the same argument now advanced against Genetically modified crops.

For decades, Nobel laureate Norman Borlaug, father of the Green Revolution, condemned anti-GM activists as charlatans ignorant of science. So did science writer Matt Ridley, author of Genome. Chengal Reddy, president, Federation of Indian Farmers Associations, says GM is a must for farmers.

GoI formally accepts that Genetically modidfed varieties for industrial crops like cotton are safe, but not for crops for human consumption. Sorry, but cottonseed from GM cotton has, for over a decade, been consumed in India, directly and in the form of vanaspati. Cottonseed oilcakes have been fed to cattle, poultry and fish, so the Bt genes are entrenched in India’s food chain, including dairy products and meat. No danger has ever been proved.

GM foods are common in the US. Over one trillion GM meals have been eaten in the US without damage. If GM foods are perfectly safe for millions of non-resident Indians and tourists visiting the US, can they really be dangerous for Indians in India? This is farce, but tragedy too.

*This article was originally published in the [Economic Times](https://economictimes.indiatimes.com/blogs/Swaminomics/farmers-not-activists-prove-the-case-for-genetically-modified-brinjal/).*

Read more: [https://spontaneousorder.in/patent-pending-should-gmo-technology-be-exclusive/](https://spontaneousorder.in/patent-pending-should-gmo-technology-be-exclusive/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: Forests to Forest Dwellers

Original: https://www.spontaneousorder.in/p/so-musings-forests-to-forest-dwellers

Author: Spontaneous Order

Published: 2019-06-06T07:16:28.000Z

Topics: forest-management, community-ownership, property-rights, forest-dwellers

> The history of state forestry, from the British to our government, has been of replacing the diverse species of a natural forest with mono species. Both the scientific and sustainable forestry management has led to the same results. Communities are more..

**Summary:**

State forestry, from British colonial times to independent India, has consistently replaced diverse natural forests with mono-species plantations, undermining both ecological sustainability and community benefits. Scientific and sustainable forestry management have yielded the same flawed results, as local communities derive greater economic and social value from the forests' inherent diversity, creating a natural alignment between community needs and forest offerings. Beyond utilitarian efficiency, forest dwellers hold a moral prior claim on these resources, rooted in generations of use—a principle foundational to civilized societies' resource allocation. Denying these rights constitutes gross injustice. Community ownership and management address dual challenges: safeguarding forests while enabling dignified livelihoods for India's poorest, leveraging natural assets for their future. The most efficient and morally just solution is to wrest control from state foresters and entrust it to forest dwellers, embodying a classical-liberal emphasis on property rights and decentralized stewardship over centralized bureaucratic control.

**Key points:**

- State forestry has replaced diverse natural forests with mono-species plantations, harming ecology and communities.
- Local communities have a moral prior claim on forests based on generations of prior use.
- Diverse forest resources better match diverse community needs than state-managed mono-cultures.
- Community ownership protects forests while providing dignified livelihoods to the poorest.
- Transfer forest management from foresters to forest dwellers for efficiency and justice.

**By Spontaneous Order**

* * *

The history of state forestry, from the British to our government, has been of replacing the diverse species of a natural forest with mono species. Both the scientific and sustainable forestry management has led to the same results. Communities are more likely to find economic and social benefits from the existing diversity of resources that the forests offer. There is higher probability of a natural fit between diverse needs of communities and diverse offerings of forests.

In addition to all the utilitarian or efficiency arguments, it must be remembered that local communities have a prior claim—a moral claim—on the forests. They have been living there and using the resource for generations. It is on the premise of prior use that all resources have been settled in any civilised society. It is gross injustice not to recognise the rights of forest dwellers.

Community ownership and management solve two problems simultaneously: the protection of forests and of dignified livelihood to the poorest communities in the country. They build their future from the natural asset of forests. The most efficient as well as moral resolution is to take our forests from the foresters and put them in the hands of forest dwellers.

*This is an excerpt by Trupti Parekh and Dr Parth J Shah from the book ‘[The Terracotta Reader: A Market Approach to the Environment](https://ccs.in/sites/all/books/com_books/terra-forest-dwellers-versus-foresters.pdf)‘.*

Read more: [https://spontaneousorder.in/forests-communitisation-or-privatisation/](https://spontaneousorder.in/forests-communitisation-or-privatisation/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Basically – Episode 04 | Is Sedition ‘Deshdroh’?

Original: https://www.spontaneousorder.in/p/so-basically-episode-04-is-sedition-deshdroh

Author: Spontaneous Order

Published: 2019-06-06T06:46:26.000Z

Topics: sedition, free-speech, indian-liberalism

> Know More

**Summary:**

This post is a fragmentary teaser for 'SO Basically – Episode 04 | Is Sedition ‘Deshdroh’?'. It provides no substantive argument or content, only a 'Know More' link and a description of Spontaneous Order as a series by liberal minds critiquing pseudo-socialism in Indian history to highlight a missed classical-liberal political order. Meaningful summary impossible due to lack of body text.

**Key points:**

- Teaser post promotes Episode 04 questioning if sedition equates to 'Deshdroh' (treason) from a classical-liberal lens.

**By Spontaneous Order**

* * *

[Know More](https://spontaneousorder.in/sedition-pro-government-or-pro-nation/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: Rajaji- Man with a Mission

Original: https://www.spontaneousorder.in/p/so-musings-rajaji-man-with-a-mission

Author: Spontaneous Order

Published: 2019-05-31T06:09:11.000Z

Topics: rajaji, swatantra-party, indian-liberal-tradition, opposition-in-democracy

> Rajaji frequently interacted with his visitors from different walks of life and news appearing in the press had kept him informed of political developments both at national and international levels. He had also realized that Congress had become the larg..

**Summary:**

Rajaji, informed by press and interactions, recognized Congress's transformation into a monolithic party under Nehru's unquestioned leadership, where criticism was resented and silenced. He consistently emphasized the vital role of an effective opposition in democracy, famously stating that a democracy 'without a strong opposition is a motor car without a brake and is liable to get involved in an accident at any time.' His most significant contribution to Indian political life was founding the Swatantra Party in 1959, demonstrating that a viable alternative to Congress was possible. This laid the groundwork for fairly stable non-Congress governments at the Centre and in states, introducing classical-liberal dissent against the dominant socialist command economy. The excerpt from Profiles in Courage highlights Rajaji among other liberal voices like Minoo Masani and B.R. Shenoy who challenged pseudo-socialism in post-independence India, advocating for economic freedom and political pluralism over one-party dominance.

**Key points:**

- Rajaji warned that democracy without strong opposition risks catastrophic accidents, like a car without brakes.
- Congress under Nehru silenced critics, lacking internal checks.
- Founding the Swatantra Party in 1959 proved a non-Congress alternative was viable.
- Swatantra Party sowed seeds for stable non-Congress governments at Centre and states.
- Rajaji's efforts represented liberal dissent against India's socialist era.

**By Spontaneous Order**

* * *

Rajaji frequently interacted with his visitors from different walks of life and news appearing in the press had kept him informed of political developments both at national and international levels. He had also realized that Congress had become the largest monolithic party and Nehru its unquestioned leader. There was no one in Congress to criticize him. Even if there was criticism, Nehru resented and silenced the critics.

Rajaji had always been emphasising the importance and the need for an effective opposition in a democracy. To use his own phrase, a democracy “without a strong opposition is a motor car without a break and is liable to get involved in an accident at any time.”

Probably the most significant contribution which he had made- and which none else could have- to the Indian political life was the founding of the Swatantra Party and thus proving that an alternative to Congress was possible. If there is a fairly stable non-Congress Government functioning in Centre and States, its seeds were sown by Rajaji in 1959.

*This is an excerpt from the book Profiles in Courage: Dissent in Indian Socialism, a compilation on the lone voices of liberalism and economic freedom, including those of Rajaji, Minoo Masani* *, N G Ranga, B R Shenoy, Piloo Mody, Khasa Subba Rau and A D Shroff during the era of socialist command. You can access this book for free on [our website](https://ccs.in/sites/all/books/com_books/profiles_in_courage.pdf).*

[Read more on Indian Liberal Tradition](https://spontaneousorder.in/tag/indian-liberal-tradition/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Crime and Politics: The Goonda’s Holy Grail

Original: https://www.spontaneousorder.in/p/crime-and-politics-the-goondas-holy-grail

Author: Spontaneous Order

Published: 2019-05-30T10:36:02.000Z

Topics: crime-politics-nexus, electoral-reform, electoral-finance, public-service-failure

> One in every three legislators in India has a criminal case pending against them. According to a 2018 report by the Association for Democratic Reforms, 34 percent of 543 members of parliament (MPs) elected in 2014 have been charged with a violent crime...

**Summary:**

The criminalization of Indian politics is rampant, with one in three legislators facing criminal cases (now 40%), 34% of 2014 MPs charged with violent crimes (up from 24% in 2004), and 21% with heinous crimes like rape or murder—far exceeding the US Congress's 2.2% indictment rate since 1996. Indian law bars convicts but not those charged, allowing parties to field criminals for their muscle and money, as criminals seek political legitimacy to control law enforcement and boost wealth (222% average increase per a 2013 study). Historical factors include rising regional competition and Indira Gandhi's 1969 corporate funding ban, pushing parties toward cash-rich criminals. Voters prefer them, being three times more likely to elect criminal candidates, due to abysmal public services like a 1:663 police-population ratio (vs. ideal 1:450), favoring 'get-things-done' politicians over rule-bound ones. From a classical-liberal lens, this nexus thrives on inefficient state machinery, perpetual elections, and lack of transparency. Proposals like state-funded elections and RTI for parties face resistance, as parties profit from self-financing criminals; without transparent electoral finance, the goonda's grip persists.

**Key points:**

- 43% of MPs elected in 2014 faced criminal charges, with 21% for heinous crimes like murder or rape.
- Criminal candidates win elections three times more often than clean ones, as voters prioritize access to scarce state services.
- Parties field criminals for campaign finance and voter mobilization, exacerbated by the 1969 ban on corporate funding.
- Inefficient public services, like a 1:663 police ratio, sustain the crime-politics nexus by making muscle valuable.
- Transparent electoral finance and RTI for parties are needed but unlikely without party incentives to reform.

**By Utkarsh Khare**

* * *

One in every three legislators in India has a criminal case pending against them[1](https://spontaneousorder.in/crime-and-politics-the-goondas-holy-grail/#easy-footnote-bottom-1-8352 "  According to the latest reports, this has now become two in every five (40 percent) "). According to a 2018 report by the Association for Democratic Reforms, 34 percent of 543 members of parliament (MPs) elected in 2014 have been charged with a violent crime. This number increased from 30 percent in 2009, and 24 percent in 2004. In comparison, as per the Citizens for Responsibility and Ethics in Washington only 2.2 percent of the members of US Congress have been indicted since 1996 [2](https://spontaneousorder.in/crime-and-politics-the-goondas-holy-grail/#easy-footnote-bottom-2-8352 "  The American expression for being charged with a serious crime "). Even more troubling, 21 percent of sitting Indian MPs have been charged with a heinous crime which include rape, murder or armed robbery.

In spite of the rhetoric of parties fielding ‘worthy’ candidates, nothing prevents them from nominating candidates with criminal backgrounds. Indian law bars convicts from contesting elections [3](https://spontaneousorder.in/crime-and-politics-the-goondas-holy-grail/#easy-footnote-bottom-3-8352 "  Section 8 of the Representation of Peoples Act, 1951  ") . No laws bar individuals with a charge sheet. This move is intentional, in order to prevent state machinery from being utilized to exercise a political vendetta. Despite good intentions, this presents an opportunity that can be exploited.

Criminals crave legitimacy and the validation of political power is unmatched. It helps control law enforcement, which is useful in expanding existing political clout. It’s also financially lucrative. A 2013 study showed that on average the wealth of a sitting legislator increased by a surprising 222 percent.

Criminalisation of Indian politics is a grim reality, and a government comprising of upstanding representatives has become a fantasy. But why do political parties associate with these unsavoury characters?

In his book ‘*When Crime Pays: Money and Muscle in Indian Politics’,* Milan Vaishnav explains how *Goondas* and mafias have been a part of electoral politics since the birth of Indian democracy. Booth capture and suppression or mobilisation of voters in favour of political parties that paid them were the main sources of income for criminals between 40s and the 70s. Two major factors led to the criminalisation of politics.

First, as regional parties gained importance across the country, political competition increased. This decreased the certainty of an electoral outcome. For the mafia this increased uncertainty as to who they could support in order to keep law enforcement in check. It became advantageous to enter politics to secure your fate in your own hands. Second, Indira Gandhi’s ban on corporate funding for elections in 1969 pushed a significant source of campaign finance underground. Candidates who could secure large sums of cash and finance their campaigns were preferred by parties, and criminals gained a foothold.

The *aam admi* also prefers to vote for these crooks. In fact, we see that a candidate with a criminal background is three times more likely to win a seat than a clean one. But why are voters deliberately making these choices? India has abysmally low numbers of public service officials as against its population. Our police-population ratio, for example, is at 1 policeman for every 663 citizens (BPR&D Report, 2017). In comparison the accepted minimal ratio is 1 for every 450.

Access to basic services such as law enforcement, healthcare and welfare schemes is a matter of privilege in our country. Mindful of this, voters prefer candidates “who can get things done”, instead of one restrained by a web of rules, delay and scarcity. Candidates exploit their advantage, projecting themselves as saviours of a caste, religion or other social identities. They promise voters access to justice, health-care, ration shops etc. The procession of cars and distribution of freebies during elections are merely a demonstration of their money and muscle. Given that elections in India are a year-round affair, a politician is rarely ever an administrator. There is simply no incentive to address the efficiency of state machinery. It is far more useful to sustain your political clout.

This nexus of crime and politics is actively supported by inefficient state services and poor access to justice. Our Prime Minister has repeatedly proposed state-funding of elections to clean up campaign financing. The idea is that state-funding might provide transparency to the electoral process. However, creating an accountable system is the challenge. While there are greater incentives for parties to continue fielding self-financing criminals, state-funded election campaigns are unlikely to come to fruition. Among other measures, there are demands to include political parties under the ambit of the RTI Act. It is hoped that this could lend transparency to electoral financing and keep parties in check.

Without a transparent electoral finance system in place, parties will continue to charge their entry fee as a gateway to politics and criminals will continue to thrive. Meanwhile, the Supreme Court and Election Commission have made several attempts to bring transparency to our electoral processes. Most of these orders lack enforcement, as parties prefer to implement them only on paper. Worse, bylaws passed by Parliament tend to twist rules and exploit loopholes. It seems that change can only come from within. But while no party walks the talk, looks like we will continue preaching to the choir in the near future.

* * *

**About Utkarsh Khare**

Utkarsh is a law graduate from RML NLU Lucknow. He has previously worked with Members of Parliament on Private Members Bills, from judicial and police reform to drug legalisation, and strongly believes in the power of well-drafted legislation for good governance. He enjoys challenging work spaces that encourage creative and critical thinking, and is passionate about making a positive impact on social institutions. He is a voracious reader, an avid photographer, and enjoys listening to music from the 60s and 70s.

## The chaiwallah of the street also deserves to be heard

Original: https://www.spontaneousorder.in/p/the-chaiwallah-of-the-street-also-deserves-to-be-heard

Author: Spontaneous Order

Published: 2019-05-27T08:47:18.000Z

Topics: street-vendors, town-vending-committee, urban-governance, municipal-reform

> In 2014, Prime Minister Narendra Modi emphasized on his humble beginnings through his “Chai Pe Charcha” campaign. Modi, famous as the son of a tea vendor, sat at a roadside tea stall and connected electronically with over 1,000 tea stalls in 300 citie

**Summary:**

Despite the Street Vendors Act 2014, which legalized vending and mandated town vending committees (TVCs) with at least 12 vendor members out of 30 to demarcate zones and protect rights under Article 19(1)(g), street vendors face ongoing evictions by authorities. A Centre for Civil Society study of Gurugram's TVC reveals severe flaws: only four vendor members, some listed without knowledge, and appointments based on personal ties rather than representation, affecting 18,000 vendors. This led to biased decisions, like the Sector 14 eviction based on resident complaints without vendor input, and vendors paying nearly ₹1 lakh for carts after authorities rejected private advertising funding. The municipal commissioner, as TVC chairperson and state appointee, lacks incentives for accountability in top-down governance, sidelining the elected mayor. From a classical-liberal view, effective participatory institutions are essential to negotiate state-civil society interests and secure occupational freedoms, but current structures treat vendors as encroachers. Solutions include empowering directly elected mayors, as in Bhopal's model, to foster bottom-up accountability and recognize vendors as citizens.

**Key points:**

- Street Vendors Act 2014 requires TVCs with 40% vendor representation, but Gurugram's has only four authentic members out of 30.
- Inadequate TVC representation results in arbitrary evictions, like Gurugram's Sector 14 order favoring residents over vendors.
- Vendors bear high costs, such as ₹1 lakh carts, due to authorities rejecting private funding for recognition and tenure security.
- Top-down municipal commissioners lack local accountability; states should empower elected mayors for bottom-up governance reforms.

**By Vidushi Sabharwal**

* * *

In 2014, Prime Minister Narendra Modi emphasized on his humble beginnings through his “Chai Pe Charcha” campaign. Modi, famous as the son of a tea vendor, sat at a roadside tea stall and connected electronically with over 1,000 tea stalls in 300 cities. In the same year, the Street Vendors Act, 2014, legalized street vending and established a regulatory framework to protect vendors’ rights. Moreover, Article 19 (1)(g) of the Constitution of India safeguards the right of street vendors to engage in their choice of occupation.

Sixty-nine years of the Constitution of India, five years under the leadership of the son of a chaiwallah, and an explicit legislative promise of protection, yet, street vendors still face abuse and unlawful evictions by civic authorities and the police.

The Act asks states to create a participatory body to balance the rights of vendors against competing claims by other stakeholders on public spaces. This participatory body, also known as the town vending committee (TVC), is responsible for identifying vendors and developing plans to demarcate vending zones. The town vending committee is the centrepiece of the Act. Unless these committees are up and running effectively, established vendor rights will remain a remote dream.

Our team at the Centre for Civil Society studied the constitution and functioning of one of these participatory bodies in “millennium city” Gurugram.

The Act says there should be at least 12 vendor members of a 30-member committee. In Gurugram, the committee has only four. The vendors who were listed as “committee members” in official documents denied being part of the panel. Besides, a civil society representative went so far as to say that he was only a part of the committee as he was “friends with the city project officer (CPO)”. These details are non-trivial. The committee, its constitution and how it functions have direct implications on the 18,000 identified vendors of the city.

Inadequate and arbitrary representation of vendors can have far-reaching consequences on the protection of their rights. Consider this: The same committee in Gurugram issued an order to shift vendors from Sector 14 based on complaints from resident welfare associations (RWAs) and market associations. Who was a part of this meeting? Were vendors included? We don’t know. Later, when the vendors challenged this decision, a committee of the district town planner and the city project officer (both are members of the local authority) inspected the respective vending sites and recommended that vendors be shifted. Challenged again in court by the vendors, the committee was asked to reconvene and take a “fair decision” after hearing the arguments of all concerned stakeholders. Of the 17 members, including municipal officials, the CPO’s friend and the local resident association representative, only three opposed the proposal. Not surprisingly, all three were vendor association representatives.

Another consequence of vendors’ underrepresentation is the price vendors in Gurugram are paying for their right to vend. In a June 2016 meeting of the town vending committee, the Municipal Corporation of Gurugram refused to grant advertising rights to private enterprises that were otherwise willing to bear these costs. Today, vendors have to cough up nearly ₹1 lakh for vending carts. Vendors who attended the meeting did not challenge the decision as they were willing to invest in anything that would assure them some recognition and security of tenure.

The examples show that the suppression or protection of vendors depends on the quality of regulations proposed by the local authority. Formed by the same local authority, the committee is supposed to serve as a mechanism for negotiation between the state and civil society through its representation of different stakeholders. However, the municipal commissioner is the chairperson of the town vending committee under the Act. So, if the municipal authority, under the commissioner, excludes them from meetings, decisions and streets, where do vendors go? Is there any accountability mechanism in place to check the authority of the municipal commissioner?

At the city level, the top-down hierarchy starts at the state government, which, through its chief minister, appoints the municipal commissioner. Under these circumstances, the commissioner lacks incentives to execute policies that benefit the local electorate. However, Indian cities are governed by two independent heads—the administrative head being the municipal commissioner and the legislative head being the mayor. The latter, being a ceremonial head, has limited or no powers over city planning despite being a representative of citizens. States can change this; the Bhopal Municipal Corporation, for instance, did not shy away from amending its Municipal Corporation Act, and has had a mayor-in-council system with a directly elected mayor. This idea is one of many that can be explored by other cities to plug implementation gaps from the bottom up.

For a city to be able to effectively plan for its citizens, it needs to be made accountable to them. But the question that over 100 million vendors are asking, now that the world’s largest electorate has voted, is the following: Are street vendors citizens of the city they vend in, or are they still encroachers?

*This article was originally published in [Live Mint](https://www.livemint.com/opinion/online-views/opinion-the-chaiwallah-of-the-street-also-deserves-to-be-heard-1558544419840.html).*

Read more : [https://spontaneousorder.in/street-entrepreneurs-victims-of-executional-paralysis/](https://spontaneousorder.in/street-entrepreneurs-victims-of-executional-paralysis/)

* * *

**About Vidushi Sabharwal**

An Economics Graduate from Delhi University with a touch of books, mountains and people, research is her felicity. Vidushi has previously interned with us, and with the Central Square Foundation. As a Teach for India fellow and Math Content Advisor, she mentored over 150 young girls and led a city project called Mathathon to debunk math phobia. She is also the co-founder of Bass Ek Raah, a charitable society guiding people through counselling and consultancy.

## SO Musings: Competition can Eliminate Cronies

Original: https://www.spontaneousorder.in/p/so-musings-competition-can-eliminate-cronies

Author: Spontaneous Order

Published: 2019-05-24T07:18:01.000Z

Topics: crony-capitalism, aviation-industry, market-liberalization, competition

> “New no-frills airlines like IndiGo, SpiceJet and GoAir had entered the business and cut prices. In a price-sensitive market like India, full-service airlines like Kingfisher and Jet found it difficult to compete. Kingfisher finally went bust after repe

**Summary:**

In a classical-liberal view, competition in liberalized markets effectively combats cronyism by eliminating politically favored businesses unable to compete. New no-frills airlines like IndiGo, SpiceJet, and GoAir slashed prices in price-sensitive India, driving full-service carriers Kingfisher and Jet—backed by political connections of Vijay Mallya and Naresh Goyal—out of business despite policy changes and repeated public sector bank rescues. The pre-1991 licence-permit raj epitomized pure crony capitalism, where every industrial licence, import licence, foreign exchange allocation, and foreign collaboration permit was a politician's favor exchanged for business favors; Rahul Gandhi's family significantly contributed to this system. While cronyism persists, India's liberalization has downsized it: unlike other countries where cronies secure permanent monopolies, Indian cronies receive only temporary favors, allowing market competition to ultimately kill even the biggest ones. This shift represents substantial progress toward a freer market order.

**Key points:**

- No-frills airlines like IndiGo, SpiceJet, and GoAir outcompeted politically connected full-service carriers Kingfisher and Jet by cutting prices in India's liberalized aviation market.
- The licence-permit raj was pure crony capitalism, doling out licenses as political favors.
- India's liberalization prevents permanent monopolies, enabling competition to eliminate cronies despite temporary policy perks.
- Rahul Gandhi's cronyism complaints overlook his family's role in the pre-1991 system.

**By Spontaneous Order**

* * *

*“New no-frills airlines like IndiGo, SpiceJet and GoAir had entered the business and cut prices. In a price-sensitive market like India, full-service airlines like Kingfisher and Jet found it difficult to compete. Kingfisher finally went bust after repeated rescues by public sector banks. Jet is now following suit. The political connections of Mallya and Goyal won them policy changes and bank loans galore, but ultimately competition in a liberalised market killed them.*

*The [licence-permit raj](http://indiabefore91.in/license-raj) was almost 100% crony capitalism. Free competition did not exist. Every industrial licence, import licence, foreign exchange allocation and foreign collaboration permit was a favour from politicians to businessmen, in return for financial and other favours. This was crony capitalism with a capital C. When Rahul Gandhi complains about crony capitalism today, somebody should remind him of his family’s contribution to it.*

*Cronyism has by no means ended. But it has been downsized. In many other countries, cronyism means getting a monopoly to exploit forever. In India, it means temporary favours but no permanent monopolies, and so competition can ultimately kill the biggest cronies. That is progress.”*

Swaminathan Aiyar has written an insightful piece about how cronyism can be fought with competition in a free market. People often equate capitalism to cronyism, never understanding how the first flourishes in the presence of a free market while the latter in its absence. Taking the examples of Jet Airways, he highlights how one of the most successful airlines of the country went under, unable to keep up with the increasing competition.

[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Elections 2019: Will your Vote Matter?

Original: https://www.spontaneousorder.in/p/elections-2019-will-your-vote-matter

Author: Spontaneous Order

Published: 2019-05-20T07:33:17.000Z

Topics: voting-rationality, public-choice-theory, elections, political-ignorance

> For your vote to matter in an election, the election would have to be an equal split between two candidates, where you walk into the polling booth and decide the outcome. The likelihood of that happening is infinitesimal. Add to that the widespread igno..

**Summary:**

Afifah Siddiqui challenges the notion that voting is irrational under Rational Choice Theory, where a single vote amid widespread voter ignorance and non-close elections yields negligible impact. She recounts her own costly effort to vote in Noida during Elections 2019, despite arguments to abstain for personal gain. Critiquing theories like Richard Tuck's conditional rationality, Brennan and Lomasky's Expressive Theory (dismissing it as inferior to public expression like rallies), and altruistic or contributory models (e.g., Gerry Mackie's margin-of-victory analogy), Siddiqui argues that homo economicus does not fully explain voting. Instead, she draws a classical-liberal parallel via public choice theory: voters, like consumers, conduct just enough research to feel informed without exhaustive analysis, correcting poor choices in future elections just as in markets. Political ignorance is real but mirrors market behavior, where limited due diligence is deemed rational. Public choice demands consistent standards for private and public actions by the same individuals. Thus, if market decisions are rational despite flaws, voting must be too—affirming its instrumental value in democratic feedback loops from a liberal perspective.

**Key points:**

- Voting is rational like market choices, where individuals perform sufficient but not exhaustive research and correct errors in subsequent decisions.
- Public choice theory requires applying the same rationality standards to voting behavior as to private market actions.
- Expressive theories of voting fail because more effective public ways exist to signal preferences than anonymous ballots.
- Voter ignorance does not render voting irrational any more than consumer ignorance invalidates market rationality.
- People vote to contribute to collective outcomes, such as maximizing victory margins for preferred policies or candidates.

**By Afifah Siddiqui**

* * *

For your vote to matter in an election, the election would have to be an equal split between two candidates, where you walk into the polling booth and decide the outcome. The likelihood of that happening is infinitesimal. Add to that the widespread ignorance among voters about party manifestos, the standing representatives and the workings of the political system. Even if you spend time every day informing yourself about politics, it’s your informed vote lost in a sea of ignorance. Why bother?

Each election season, there are vociferous debates between intellectuals trying to prove voting behaviour irrational and those attempting to bring out the rationality in it. My interest in this peaked when I ended up leaving an office offsite conducted in Himachal Pradesh midway, boarded an overnight train, just to cast my ballot in Noida. Everyone in the know about my plan tried to reason with me by saying: ‘Why would you spend so much money and effort trying to contribute to a cause whose outcome won’t be affected by your actions, in the least? In fact, you wouldn’t be affected by the result either! So, why don’t you rather attend the offsite and reap some tangible benefits through the training?’ Their reasoning had merit, and it wasn’t the first time I heard this chain of arguments. Rational Choice Theory is all about the irrationality of voting as a means of bringing about an outcome desired by an individual voter, and the rationality of not voting.

What astounds me is that, despite this, why do so many individuals bear the cost of casting their ballot each election? Many theorists have tried to explain this. Richard Tuck, in Free Riding, makes a case for the ability of a vote to affect the outcome in certain scenarios and therefore argues that voting is in such cases a rational act. I won’t get into the details of Tuck’s arguments as he doesn’t prove the rationality of all votes, so we still cannot convincingly say that voters vote because it is rational to do so. Geoffrey Brennan and Loren E. Lomasky explained this phenomenon through their Expressive Theory of Voting which argues that people vote to ‘express a desire’. It could be a desire to vote as a civic duty, for a policy, a party or a candidate of their preference. They don’t care about the instrumentality of their vote as much as expressing their preferences via their ballot. The analogy they use is of a fan cheering for their favourite football team. It’s inconsequential, but it makes the fan feel like they are doing their bit.

This theory, however, doesn’t resonate well with me. If I had to express a desire for something, wouldn’t I rather run a social media campaign, initiate a rally, roam around wearing a slogan t-shirt, or participate in discussions about the same, instead of waiting in a queue on a hot day only to express my desire behind a booth, with no one to acknowledge it? To use an example given by Gerry Mackie, from University of California San Diego, if I wished to express this desire only to myself, I would have written it on my bathroom mirror and read it every day while brushing my teeth.

If people do not vote for expressive reasons, why do they vote? A possible explanation can be that the argument of homo economicus does not hold true for voting behaviour – i.e. people do not vote out of self-interest but rather do so in the interest of many. This interest could be voting for the needs of their immediate community or for the value systems they identify with. Despite the individual benefit derived from the act being little, the larger collective benefit can push people to bear the cost of participating in the democratic apparatus.

While this explains why people would bear the cost of voting, it’s still unclear why they would vote cognisant that it won’t affect the outcome at all. Mackie in his paper ‘An Examination of the Expressive Theory of Voting’ argues for a contributory theory of voting, using the analogy of a basketball team playing to win the match with the greatest margin of scores or losing by the least margin. Voting is just the same. We vote because we want the policies, parties or candidates favoured by us to win by the greatest margin of votes or to lose by the least margin, and this is what confirms our vote’s instrumentality.

Some opine that the cost of finding out about all the candidates – their personal and party manifestos, their track record and other crucial information which would be pivotal in making an informed choice, is so high that people would rather vote with ignorance or not vote at all. While political ignorance is an unfortunate reality we need to remedy, we still cannot call voting irrational. At least not till we stop calling individuals’ market decisions rational.

Individuals don’t carry out intense market research before buying any product or making investments. They conduct just enough research to be convinced that they know what they are doing. For a market choice, people argue that a bad choice can be corrected by not making the same exchange in the future. I am surprised they can’t see that ballot choice works similarly. When individuals vote, they feel they know enough to take a decision, and if the decision doesn’t turn out favourably, in the next elections they change their allegiance. Public choice theorists rightly argue that we must observe the same standards while analyzing private and public action, after all, it is the same human being functioning in both. I suggest we extend the same principle to market and voting behaviour – if market behaviour is considered rational, despite its apparent flaws, then voting behaviour should be too.  

Read more: [https://spontaneousorder.in/is-compulsory-voting-democratic/](https://spontaneousorder.in/is-compulsory-voting-democratic/)

* * *

**About Afifah Siddiqui**

Afifah is a graduate in Sociology from Miranda House, University of Delhi and holds a Post Graduate Diploma in Liberal Studies offered at Ashoka University via the Young India Fellowship. She believes that ideas can make all the difference in the world and this is what brings her to Centre for Civil Society, where she is currently working as a Junior Associate at their training and outreach department,CCS Academy.

## Fee Regulation and the Parent

Original: https://www.spontaneousorder.in/p/fee-regulation-and-the-parent

Author: Spontaneous Order

Published: 2019-05-17T06:15:40.000Z

Topics: fee-regulation, private-schools, education-policy, school-choice

> The woes of parents who are striving to give their children quality education seem to have no end. Of late many cities across India have seen parents protest arbitrary and “unfair” fee hikes by private schools. For instance, in Delhi and Mumbai, the f

**Summary:**

Fee regulation acts in Indian states like Tamil Nadu, Uttar Pradesh, Uttarakhand, and Assam, which cap annual hikes at under 10% and require committee approval, fail to address parents' protests against 10-40% fee increases in cities like Delhi and Mumbai, as they ignore the root cause: insufficient supply of private schools amid high demand. India has 350,000 private unaided schools (24% of total) enrolling 75 million students (38% of all), with enrollment shifting—government schools lost 11.17 million students from 2011-2015 while private gained 16 million—due to better outcomes, accessibility, and aspirations. Regulations under RTE create entry barriers, stifling new 'edupreneurs' and exacerbating costs from taxes, salaries (7th Pay Commission), and compliance. Notably, 80% of private schools are low-fee per ASER 2016, serving disadvantaged families, while complaints target elite urban ones. From a classical-liberal view, over-regulation burdens schools without grants, diverting funds from quality. The solution: relax regulations and taxes to boost supply, foster competition, lower fees, and enhance quality; government should improve its own schools rather than coercing private ones. Parents should demand deregulation for affordable, high-quality education.

**Key points:**

- Fee regulation acts cap hikes at under 10% but fail to solve arbitrary increases due to supply shortages in private schools.
- Private unaided schools enroll 38% of students, with demand outpacing supply amid rising costs from RTE compliance and 7th Pay Commission salaries.
- 80% of private schools charge low fees compared to government per-pupil spending, serving the disadvantaged.
- Relax regulations and taxes on private schools to increase entry, competition, and innovation, lowering fees and raising quality.
- Government should focus on improving public schools instead of burdening private ones with welfare mandates.

**By Sumbul Mashhadi**

* * *

The woes of parents who are striving to give their children quality education seem to have no end. Of late many cities across India have seen parents protest arbitrary and “unfair” fee hikes by private schools. For instance, in Delhi and Mumbai, the fee hike in private, unaided schools in [2017](https://ccs.in/govt-child-rights-body-recommend-10-cap-fee-hike-private-schools) varied between 10 % to 40 %. April 2019 alone witnessed protests against fee hikes across various states including Telangana, Maharashtra, Delhi, Uttar Pradesh, Haryana, Rajasthan and Madhya Pradesh, where parents demanded better implementation of the Fee Regulation Acts in their respective states. Trusting these laws to regulate and control the fees, parents welcome such government interventions since lower costs could be instrumental in increasing accessibility to private schools, where [learning outcomes](https://assets.kpmg/content/dam/kpmg/in/pdf/2018/07/Learning-Outcomes-school-education-July-2018.pdf) are evidently higher. States like Tamil Nadu, Uttar Pradesh, Uttarakhand and Assam already have their own laws for regulating the fee structure in private schools.  

The underlying principle behind such legislation across all states is that before increasing fees, schools have to consult a regulatory committee comprising representatives from the district administration, the education department, parents, and school management. Additionally, the annual fee hike must be less than 10 per cent and the schools must display the fee structure on their websites in advance. The Act also has provisions for imposing fines on schools that do not follow its directives. But will these regulatory committees act as an antidote to the problems of arbitrary fee hikes, which subjects parents to a constant struggle to afford even basic education?  

These policies seem to have evolved as a knee jerk reaction to the demands and demonstrations by parents agitating against exorbitant fees of private schools, without deliberations on the practical needs and constraints of the education sector in India. Private school associations have been in opposition to these Acts throughout the process of their implementation. They have sought help from the judiciary, individually and as groups, to remedy this situation. The underlying assumption in such policies is very clear- these are the only types of private schools that exist. But this is not the reality.  

There is merit in inspecting the root cause of the frequent and allegedly arbitrary fee hikes. A major reason behind the exponential rise in private schools’ fee is that the supply of these schools does not meet the high demand. There are about 3,50,000 private, unaided schools in India — 24% of all schools — where 75 million children, or 38% of all students, study. The preference for private schools can be attributed to a variety of reasons- better learning outcomes, greater accessibility, social aspirations attached to an English medium private education, and provision for extracurricular activities among others. With no grants or assistance from the government, these schools generate their own revenue through school fees to operate. There has been a [steady increase](https://www.hindustantimes.com/education/in-5-years-private-schools-gain-17-million-students-government-schools-lose-13-million/story-6FV1ic7RLttmWc0ZkhBQBM.html) in the fraction of parents abandoning free government schools in favour of fee-charging private schools.  

A 2017 research paper [The Private Schooling Phenomenon in India: A Review](http://ftp.iza.org/dp10612.pdf) by Geeta Kingdon Gandhi, analysed raw District Education System on Education (DISE) data on 20 states of India, over the four-year period between 2011 to 2015. Her study shows that despite an adequate increase in the number of government schools, the total enrolment in these schools decreased by 11.17 million students, while the enrollment in private (aided and unaided) schools increased by 16 million students. This shows that the aggregate enrolment in private schools is increasing at a higher rate every year than the increase in the total number of private schools. This could be a result of the increased administrative responsibilities under the Right To Education Act and revision of teacher salaries (7th Pay Commission) which have resulted in the increase of the overall costs of operation of private schools. Contextually speaking, parents want the fees to be lowered because of the low availability of quality schools, which charge a higher fee due to high demand and higher operational costs, making it unaffordable for many. Simply put, the supply does not match the demand.  

Add to this the fee regulations and other mandates under RTE which end up creating entry barriers for aspiring ‘edupreneurs’, who wouldn’t be willing to start schools since there is a lack of monetary incentive, all this leading to a stagnation in supply against the ever-rising demand. Producers who see no chance of making profits have no incentive to set up an enterprise. Even if they choose to operate at minimal or no profits, the pressure of improving quality would drive them to increase the number of pupils per teacher adversely affecting the learning outcomes.  

Despite private schools being at the heart of the problem, the solution too lies with private schools. But not the ones you think. According to the Annual Status of Education Report (ASER) 2016 data, up to 80% of private schools in India are ‘low’ fee schools when benchmarked against government schools’ per pupil expenditure. This implies that the majority of the private schools charge low fees and function for disadvantaged members of the society while bearing the weight of additional compliance costs under the RTE. Hence, the complaints against unreasonably high fees charged by private schools are relevant for only a small section of elite private schools in urban centres of the country.  

It is indisputable that private schools’ fees have been growing considerably and to keep private school education affordable and accessible, the government should take into cognisance the policies which might be stimulating this rise and fix the policies. Private unaided schools are already burdened with innumerable expenditures – commercial tax for electricity/water, property tax, permit for school buses, infrastructure compliance cost, reservation, lease, salaries as per 7th Pay Commission etc. Additionally, over-regulation and mandates from various departments and institutions such as the education department, CBSE/ICSE/other affiliated boards, child protection commission and Non-Government Organisations, Income Tax department, fee commissions, the courts etc. have already put tremendous pressure on private unaided schools.  

The way forward is to relax the regulations and taxes imposed on private schools to ease the opening of new schools and to increase competition and innovation in the private school sector. Availability of choices would eventually bring down the fee and also up the quality of education since each school would want to outperform the other to attract more students and parents. The government should shift its focus on improving the standards of infrastructure, teaching and learning outcomes of government schools instead of bullying private entities to carry out the welfare function on behalf of the state, which is failing miserably. Regulatory bottlenecks could push private schools towards performing poorly given the high costs of compliance which would take funds away from quality improvement efforts. In conclusion, ideally, parents should be demanding ease in regulatory barriers put in place for private schools by the government in order to get the best quality of education at affordable costs.

Read more: [https://spontaneousorder.in/school-fee-regulation-in-india/](https://spontaneousorder.in/school-fee-regulation-in-india/)  

* * *

**About Sumbul Mashhadi**

Sumbul holds a Master of Arts in Communication for Development (C4D) and a Bachelor of Arts in Social Work from from Jamia Millia Islamia. She is one of the core founding members of Pinjratod, a pathbreaking and highly documented student-led initiative that challenges and breaks regressive and gender-discriminatory practices in educational institutes and hostels across India.

## SO Musings: Liberalism and Freedom

Original: https://www.spontaneousorder.in/p/liberalism-and-freedom

Author: Spontaneous Order

Published: 2019-05-14T05:33:24.000Z

Topics: liberalism, individual-freedom, rule-of-law, free-markets

> At the core of the concept of Liberalism lies the principle of freedom. Therefore, ‘ democracy, rule of law, market economy, free trade and pluralism are integral parts of Liberalism. This further implies ‘that values like tolerance, self-reliance, fr

**Summary:**

At the core of liberalism lies the principle of freedom, making democracy, rule of law, market economy, free trade, and pluralism integral components from a classical-liberal viewpoint. This framework inherently includes values such as tolerance, self-reliance, freedom of expression, and attitudes like critical assessment, openness, dialogic engagement, dissent, truthfulness, and fairness. The essence of liberal belief was articulated in the 1776 Virginia Declaration of Rights, which served as a model for the Bill of Rights added to the U.S. Constitution 15 years later. It proclaimed that 'all men are by nature equally free and independent and have certain inherent rights' that cannot be surrendered, specifically 'the enjoyment of life and Liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety.' This historical foundation underscores the classical-liberal emphasis on individual rights as foundational to political and economic order, positioning liberalism against pseudo-socialist dominance in post-independence India.

**Key points:**

- Liberalism fundamentally centers on the principle of freedom, encompassing democracy, rule of law, market economy, free trade, and pluralism.
- Liberal values include tolerance, self-reliance, freedom of expression, critical assessment, openness, dialogic attitudes, dissent, truthfulness, and fairness.
- The 1776 Virginia Declaration of Rights defined inherent rights to life, liberty, property, pursuit of happiness, and safety, influencing the U.S. Bill of Rights in 1791.

**By Spontaneous Order**

* * *

At the core of the concept of Liberalism lies the principle of freedom. Therefore, ‘ democracy, rule of law, market economy, free trade and pluralism are integral parts of Liberalism. This further implies ‘that values like tolerance, self-reliance, freedom of expression and attitudes like critical assessment, openness, dialogic and dissent, truthfulness and fairness also inherent in this concept.

The essence of liberal belief was in fact defined in 1776 in the Virginia Declaration of Rights which formed a model for the Bill of Rights added to the U. S. Constitution 15 years later. It declared that “all men are by nature equally free and independent and have certain inherent rights” of which they cannot deprive themselves or their posterity. These were “the enjoyment of life and Liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety.”

*Access the full document [here](http://indianliberals.in/~_admin/pdflanguage?id=477849139.pdf).*

*This article is from the Liberal Times, Volume III- Number 4, published in 1995.*

[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Sedition Law: Pro-government or Pro-nation?

Original: https://www.spontaneousorder.in/p/sedition-pro-government-or-pro-nation

Author: Spontaneous Order

Published: 2019-05-10T12:39:52.000Z

Topics: free-speech, sedition-law, civil-liberties, colonial-laws

> “I have studied some of the cases tried under it (section 124A) and I know that some of the most loved of India’s patriots have been convicted under it. I consider it a privilege, therefore, to be charged under that section,” read Mahatma Gandhi’s

**Summary:**

From a classical-liberal perspective, India's sedition law under Section 124A of the IPC is pro-government rather than pro-nation, suppressing natural rights to free speech and expression that governments are elected to protect, not grant. Introduced by the British in 1870 to quash dissent and repealed by them in 2009, it persists in India with parties like BJP vowing to strengthen it, ostensibly for national security but explicitly safeguarding the ruling government. Misuse is rampant: Ministry of Home Affairs data shows only 2 convictions out of 179 arrests from 2014-2016, often for trivial acts like liking a Facebook post, cheering Pakistan's cricket team, or drawing cartoons. The Supreme Court's 1962 Kedar Nath Singh judgment restricts it to incitement of violence, deeming government criticism non-seditious, while the 2018 Law Commission report urges repeal, noting laws like UAPA already address security threats. As a cognizable, non-bailable offense, it harasses innocents via protracted trials, criminalizing dissent and warranting immediate repeal for a robust democracy.

**Key points:**

- Sedition law under Section 124A protects government loyalty, not the nation, and should be repealed immediately.
- Only 2 of 179 sedition arrests from 2014-2016 resulted in convictions, highlighting rampant misuse against free speech.
- Supreme Court in Kedar Nath Singh (1962) limited sedition to violence incitement, excluding government criticism.
- Law Commission 2018 report recommends repeal, as existing laws like UAPA suffice for security.
- The law's cognizable, non-bailable nature punishes innocents through judicial harassment.

**By Sunaina Mathur**

* * *

“I have studied some of the cases tried under it (section 124A) and I know that some of the most loved of India’s patriots have been convicted under it. I consider it a privilege, therefore, to be charged under that section,” read Mahatma Gandhi’s statement following his conviction on sedition charges in 1922, for inciting disaffection towards the British rulers through his writings in the magazine *Young India.* Almost a hundred years hence, freedom of speech and expression still remains a distant dream for the nation. Of course, we’ve moved forward with the time and trends, so now, we arrest people for [liking a Facebook post](http://timesofindia.indiatimes.com/city/kochi/Facebook-like-case-No-evidence-of-sedition-govt-tells-HC/articleshow/18254753.cms).  

Freedom of speech and expression are not privileges that the government provides to its citizens, they are our natural rights as individuals. It is to defend these basics that we elect governments. Every individual has a unique way of living and thinking, a way that you expect the state to safeguard so that you can pursue your goals without fear. But what happens when the government uses this power, bestowed upon them by you, and uses it to instil fear in you? What happens when the government instead of ‘protecting’ your dues as a human being and as a citizen, starts thinking it’s ‘granting’ these rights to you?  

Left unchecked, even representative governments tend to represent the government more than the people, through the unreasonable exercise of power.  A striking example of this is India’s law on sedition under Section 124 (A) of the Indian Penal Code, punishable either by imprisonment for life or for three years with or without a fine. More often than not it has been used to bully the government’s outspoken critics. Sedition by definition is an act “inciting people to rebel against the authority of a state or monarch”. This authoritarian law was introduced by the British way back in 1870 to maintain the supremacy of the crown and to fracture dissent. But while the British themselves got rid of this archaic law in 2009, political parties in India stubbornly refuse to let go of it, some even [vowing](https://www.indiatoday.in/elections/lok-sabha-2019/story/sedition-laws-will-be-strengthened-when-bjp-comes-back-to-power-rajnath-singh-1502712-2019-04-15) to make it more stringent. Many argue that despite the opposition the colonial-era law has been preserved to pacify the insecurities of the many governments that have ‘ruled’ the nation since independence.  

The government, in its defence of the sedition law, has often cited the nation’s security as the major reason why sedition law cannot be foregone.  But it would do us good to remember that the sedition law overtly protects the ‘government’ and does not mention the word ‘nation’ at all. Which necessarily means that the law mandates, not loyalty to your nation but loyalty to the government that’s ruling the nation at that point of time. As such, perhaps it’s not an exaggeration to say that the law exists primarily to ensure the security of the government, and by extension the political party running the government, rather than the security of the nation.  

Even more astonishing than its oppressive nature, is its widespread and frequent misuse. As per the [data](https://www.indiatoday.in/india/story/exclusive-mha-data-shows-only-2-convicted-under-sedition-law-in-3-years-1289231-2018-07-18) by the Ministry of Home Affairs, only 2 of 179 people arrested on the charges of sedition were convicted between 2014 to 2016. What’s more absurd is the nature of cases under which the police has apprehended people under the charges of sedition which includes things as banal as [liking a Facebook post](http://timesofindia.indiatimes.com/city/kochi/Facebook-like-case-No-evidence-of-sedition-govt-tells-HC/articleshow/18254753.cms), [cheering a different sports team](http://www.ndtv.com/meerut-news/sedition-charges-for-students-who-cheered-pakistan-unacceptably-harsh-omar-abdullah-553012), or [drawing cartoons](http://www.bbc.co.uk/news/world-asia-india-19540565). Is this sedition or a blatant attack on an individual’s freedom of speech and expression, promised under article 19(1)(a) of the Indian Constitution?  

The Supreme Court of India in the 1962 *Kedar Nath Singh vs the State of Bihar* judgement expressed its interpretation of sedition as the acts or words that stimulate violence and public disorder and that “someone’s statement criticising the government does not invoke an offence of sedition or defamation.” Many lawyers and activists have later pointed out that criminal laws in the IPC are sufficient to deal with acts of violence and terrorism, making the existence of sedition law moot. The Law Commission’s 2018 consultation [report](http://www.lawcommissionofindia.nic.in/reports/CP-on-Sedition.pdf) on sedition too called for a rethink or repeal of the sedition law stating that “dissent and criticism are essential ingredients of a robust public debate on policy issues as part of vibrant democracy” and laws such as Unlawful Activities Prevention Act, 1967, Criminal Law Amendment Act, of 1961 and National Honours Act among others already safeguard the security challenges often attributed to sedition.  If our fears of security as citizens of a country are taken care of, what good could a law like sedition do?  

Despite the judicial inference of the law being expressed on numerous occasions, in most cases, this interpretation has been overlooked by the government and charges have been levied notwithstanding, citing national security or public disorder. This law being ‘cognizable (no warrant required for an arrest), non-compoundable (no compromise between the accused and the victim permitted), and non-bailable offence’, puts innocent people in the harsh, cumbersome and unabating processes of the Indian judiciary, which is punishment enough for the innocent.  

We’re stuck in a rut of obedience, which makes criticism impossible, dissent difficult and disagreement criminal. For a democratic society, a rule so illiberal, so disdainful of free speech and statist in its persuasion, warrants an immediate repeal.  

Learn more: [https://spontaneousorder.in/so-basically-episode-04-is-sedition-deshdroh/](https://spontaneousorder.in/so-basically-episode-04-is-sedition-deshdroh/)

* * *

**About Sunaina Mathur**

Sunaina holds a Bachelor of Arts in Economics from Fergusson College, Pune. She has previously interned with the National Human Rights Commission(NHRC), the Government of Andhra Pradesh and has represented India at the UN for the Merit360 programme. Her love for languages and poetry drove her to learn French and Russian Languages, and she hopes to read her favourite book ‘War and Peace’ in Russian someday.

## Spontaneous Dialogue on “Street Vendors Act – Enabling Street Entrepreneurship”

Original: https://www.spontaneousorder.in/p/spontaneous-dialogue-on-street-vendors-act-enabling-street-entrepreneurship

Author: Spontaneous Order

Published: 2019-05-06T08:51:51.000Z

Topics: street-vendors, street-entrepreneurship, street-vendors-act

> Read more : https://spontaneousorder.in/street-entrepreneurs-victims-of-executional-paralysis/

**Summary:**

This post is a fragmentary teaser from Spontaneous Order, linking to a full article titled 'Street Entrepreneurs: Victims of Executional Paralysis' on the Street Vendors Act and enabling street entrepreneurship. It lacks substantive content for a full summary, presenting only the title, a read-more link, and a description of Spontaneous Order as a platform by liberal minds critiquing pseudo-socialism in India to highlight a classical-liberal political order.

**Key points:**

- Post teases discussion on Street Vendors Act from a classical-liberal viewpoint on street entrepreneurship.

**By Spontaneous Order**

* * *

Read more : [https://spontaneousorder.in/street-entrepreneurs-victims-of-executional-paralysis/](https://spontaneousorder.in/street-entrepreneurs-victims-of-executional-paralysis/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: Making a Living on the Street

Original: https://www.spontaneousorder.in/p/so-musings-making-a-living-on-the-street

Author: Spontaneous Order

Published: 2019-05-06T06:25:13.000Z

Topics: economic-freedom, licence-raj, street-vendors, poverty-alleviation

> Contrary to the general perception that the rich, empowered by exploitative pro-liberalisation policies, squeeze the poor, the findings in the book adduce the fact that the poor remain poor because there has been no LPG in the areas that affect their li..

**Summary:**

Contrary to the perception that pro-liberalisation policies empower the rich at the expense of the poor, Parth Shah argues in this excerpt that the poor remain trapped in poverty because liberalisation, privatisation, and globalisation (LPG) reforms have not extended to the sectors affecting their livelihoods, which continue to be dominated by the licence-permit-quota (LPQ) raj—characterized by extortion, arbitrariness, and uncertainty. The abolition of LPQ opened opportunities for the richer sections, but the poor, operating at the bottom of the economic ladder, deserve the same freedoms. Economic freedom, defined as the absence of government regulations and controls, is most valuable for the poor, such as unlicensed street hawkers who cannot evade restrictions unlike the wealthy. Empowering the poor requires granting them this economic freedom to escape the regulatory abyss stifling their livelihoods. This perspective from the book ‘Law, Liberty and Livelihood: Making A Living On The Street’ underscores how classical-liberal reforms are essential for the most vulnerable.

**Key points:**

- The poor remain poor due to persistent licence-permit-quota restrictions on their livelihoods, unlike the rich who benefited from LPQ abolition.
- Economic freedom from government regulations is most valuable for the poor, such as unlicensed hawkers who cannot bypass controls.
- Empower the poor by extending LPG-style reforms to street-level economic activities to eliminate extortion and uncertainty.

**By Parth Shah**

* * *

Contrary to the general perception that the rich, empowered by exploitative pro-liberalisation policies, squeeze the poor, the findings in the book adduce the fact that the poor remain poor because there has been no LPG in the areas that affect their livelihood. Their world is still dominated by the forces of extortion, arbitrariness and uncertainty brought about by restrictions on their economic life—the ubiquitous licence-permit-quota raj. It is the abolition of LPQ (Licences, Permits and Quotas) that has opened up the world for the richer sections of the country. The poor deserve no less.

Economic freedom is more valuable for those at the bottom rung of the economic ladder. Nobody appreciates free enterprise—the absence of government regulations and controls—more than the poor unlicensed hawker. The rich can always find a way around government controls, the poor have no way out. Empower the poor with economic freedom.

*This is an excerpt from the book ‘Law, Liberty and Livelihood: Making A Living On The Street’, that highlights the regulatory abyss that the bottom of the pyramid livelihoods operate under.*

*Access the full book [here](https://ccs.in/sites/all/books/com_books/L3%20Introduction.PDF).*

Read more : [https://spontaneousorder.in/so-musings-economic-freedom-for-farmers/](https://spontaneousorder.in/so-musings-economic-freedom-for-farmers/)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Farm Loan Waivers – A Misguided Policy

Original: https://www.spontaneousorder.in/p/farm-loan-waivers-a-misguided-policy

Author: Spontaneous Order

Published: 2019-05-02T11:02:14.000Z

Topics: farm-loan-waivers, agricultural-policy, agrarian-distress, fiscal-policy

> I recently stumbled upon a state government advertisement on its proposed loan waiver extended to over 40 lakh farmers. While this isn’t something new or special, what caught my attention was the hashtag used in the advertisement – ‘#TowardsDevelopm

**Summary:**

Farm loan waivers, often promoted with hashtags like '#TowardsDevelopment', are a misguided policy that fails to address agrarian distress and instead exacerbate economic problems from a classical-liberal viewpoint. Announced around elections—eight states promised Rs. 1.9 trillion in 2018—they burden state exchequers (up to 60.9% of Uttar Pradesh's 2017-18 gross fiscal deficit) and taxpayers, while surging bank NPAs reduce lending capacity, as per RBI studies. Waivers benefit only formal-sector borrowers (excluding two-thirds of small farmers), disincentivize timely repayments, and fund non-agricultural loans (8.5% per 2008 CAG report), pushing defaulters toward costlier informal credit. They stifle rural credit institutions and divert funds from infrastructure like irrigation. Politically populist, waivers yield no agricultural productivity gains (World Bank study on 2008 scheme) or suicide reductions (4,500 in Maharashtra post-2017 waiver). True solutions lie in tackling root causes: unprofitable agriculture due to poor insurance, financial inclusion, and market reforms. Policymakers should reframe agriculture as an entrepreneurial economic activity, enabling farmers through ease-of-doing-agriculture measures rather than bailouts.

**Key points:**

- Loan waivers transfer debt burdens to taxpayers and banks, increasing NPAs and reducing future agricultural lending.
- They primarily benefit formal borrowers, excluding most small farmers and rewarding defaulters while funding non-agri loans.
- Waivers fail to boost productivity or reduce suicides, diverting attention from reforms like better insurance and market access.
- Shift agricultural policy from 'saving' farmers to enabling them as entrepreneurs to organically resolve distress.

**By Manasa Pidatala**

* * *

I recently stumbled upon a state government advertisement on its proposed loan waiver extended to over 40 lakh farmers. While this isn’t something new or special, what caught my attention was the hashtag used in the advertisement – ‘#TowardsDevelopment’. It got me thinking, how does writing off loans from the bank books or payment of the outstanding amounts of farmers’ loans by the state correlates to development? If you too are confused like me let us delve deeper into the issue of farm loan waivers to better understand this.

Farmer suicides and agrarian distress have been major economic and political issues, arising from the indebtedness of farmers, among other things. Loan waivers intend to give the poor farmers mired in debt a second chance, a fighting chance, which seems fair. After all, governments worldwide grant waivers to certain industries, so why not grant them to the impoverished farmers too? However, it is neither as simple nor as generous as it seems.

More often than not, the announcements of loan waivers coincide with the state or central elections, forming a significant part of poll promises. Since these waivers establish a farmer-friendly image for a political party or the government, these promises have been instrumental in earning farmers’ votes in the past elections. Hence, the common notion- though loan waivers are bad economics, they are still good politics. Let us explore the two facets of loan waivers- why and how the loan waivers are bad economics and then understand why it is good Politics, or if at all.

The RBI in its [annual report](https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/3CHAPTERC1F22FCD83C5484293753726B2CD4F6E.PDF) on state finances mentions that the total debt waiver granted during 2017-18 amounted to 0.32% of GDP (Gross Domestic Product). The total debt waivers are budgeted at 0.2% of the GDP during 2018-19 but the actual figures might be very different considering that it is election season. More than eight states promised loan waivers amounting to a staggering [Rs. 1.9 trillion](https://www.livemint.com/Politics/zL8mErALC6vw96u5wcKlaP/8-states-19-trillion-Its-raining-farm-loan-waivers.html), which would refute RBI’s predictions. The report also highlights that the impact of loan waivers on states’ exchequers varied between 4.6% of Gross Fiscal Deficit in Tamil Nadu to 60.9% of Gross Fiscal Deficit in Uttar Pradesh during 2017-18, and it would amount from 2% to 29.8% of their budgeted Gross Fiscal Deficit in 2018-19.

It is important to understand that loan waivers merely transfer the burden of a loan from farmers to the State, and the State eventually passes on the burden to the taxpayer or tries to make up for it by reducing the expenditure needed elsewhere.  Once the loan waivers are announced, the farmers stop repayments, and the states take a considerably long time to repay the loan to the banks. Because of this, there is a surge in the Non-Performing Assets (NPAs) of the banks, adversely affecting the banks’ future lending capacity.

An [RBI study](https://rbi.org.in/Scripts/bs_viewcontent.aspx?Id=3617) on agricultural loan waivers in Tamil Nadu states that the loan waivers stifle the lending capacities of rural credit institutions consequently reducing the availability of loans for beneficiaries of loan waivers in the following quarter since they are considered defaulters till the banks get the repayments from the states or till the farmers are given waiver certificates. Eventually, farmers resort to loans from informal lenders, thus falling into the trap of more expensive loans, as confirmed by [multiple studies](https://rbi.org.in/Scripts/bs_viewcontent.aspx?Id=3617). Providing better credit to agriculture is cited as one of the primary reasons for the nationalization of banks, but loan waivers are performing the exact opposite of that, ironic isn’t it?  

Moreover, loan waivers benefit only those who avail credit from the formal sector, leaving out almost two-thirds of the small and marginal farmers who do not have access to institutional credit. Even the honest farmer availing formal credit is disincentivized to repay the loan on time. As per the [CAG report](https://cag.gov.in/sites/default/files/audit_report_files/Union_Performance_Civil_Sector_3_2013.pdf) on the implementation of the debt waiver scheme of 2008, 8.5% of these waivers were given to the loans for non-agricultural purposes.  Besides this, the reduction in available capital for investment in agricultural infrastructure is another adverse impact of such schemes. Hence the farmer is not only falling into the vicious cycle of debt but also is denied the benefits of potential public investment in transport, irrigation works, etc., in rural areas.    

Now, coming to loan waivers as good politics, well, it is surely a populist measure which can bring a lot of goodwill to politicians. However, they are not sustainable in the long term. A [World bank study](http://documents.worldbank.org/curated/en/589181468044056902/pdf/wps6258.pdf) by Martin Kanz, one among the many reports drawing a similar conclusion, on the debt waiver scheme of the central government in 2008, highlighted the disconnect between loan waivers and productivity of agriculture sector, thus falsifying the claims of various governments citing loan waivers as a stimulus for development.

Also, though the National Crime Records Bureau suggests that debts are one of the major reasons for farmer suicides, so far there is no concrete data on the correlation between loan waivers and reduction of the number of farmer suicides. In fact, as per the response of Maharashtra government to an [RTI application](https://www.thehindubusinessline.com/economy/agri-business/maharashtra-saw-4500-farmer-suicides-despite-2017-loan-waiver/article26536877.ece), more than 4500 farmers committed suicide after the state government announced loan waiver in June 2017.

Looking at the bigger picture, it is clear that loan waivers do not provide a solution to the agrarian distress, they simply divert the public’s attention away from the real and deeper issue, i.e., lack of profitability of agriculture. Every time loan waivers are announced, it points to the inefficiency of the government in improving agricultural finance through deeper crop insurance penetration and financial inclusion and in reforming the agricultural markets to double the farmers’ incomes. Hence the measures to prevent the farmer from getting into debt and poverty traps in the first place remain unaddressed. It is about time that we undertake a detailed study and conduct honest dialogue on the efficacy of loan waivers.

The popular narrative, in the country, makes us think of agriculture as a charitable activity and romanticize the farmers as the benevolent food providers whereas in reality, agriculture is an economic activity, and every farmer is an entrepreneur working towards the production of food grains in a profitable manner. Hence, we need to change the approach of agricultural policies from ‘saving’ the farmers to ‘enabling’ the farmers and improving the ease of doing agriculture, which would organically reduce the need for farm loan waivers, while providing better economic and political solutions to address the agrarian distress.  

Read more : [https://spontaneousorder.in/the-farmers-yoke-financing-indias-peasantry/](https://spontaneousorder.in/the-farmers-yoke-financing-indias-peasantry/)

* * *

**About Manasa Pidatala**

Manasa is a Senior Associate at the Centre for Civil Society. She speaks on Agricultural Policy challenges in India at our epolicy program.

## From Floor To Sky: A Street Vendor In India Finds His Voice

Original: https://www.spontaneousorder.in/p/from-floor-to-sky-a-street-vendor-in-india-finds-his-voice

Author: Spontaneous Order

Published: 2019-04-29T04:52:04.000Z

Topics: street-vendors, vendor-rights, policy-reform, civil-society

> Street vendors are an integral part of life in India. Vegetables, fruits, milk, clothing—everything people need for day-to-day living is available from sellers who trade in the open-air. Dinesh Kumar Dixit is one of those street vendors— known locally

**Summary:**

Street vendors like Dinesh Kumar Dixit, a Delhi bangle seller of 41 years, embody India's informal economy, numbering 10 million nationwide and 450,000 in Delhi alone. Starting by sleeping on footpaths and loaning his wife's jewelry for 28,000 rupees (USD 400), Dinesh endured decades of police evictions, confiscations, and bribe demands, documenting every fine. The Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, advanced by Centre for Civil Society—an Atlas Network partner—fundamentally shifted this dynamic by securing vendors' rights against harassment and establishing Town Vending Committees (TVCs) with elected vendor representatives to designate zones and address grievances. Now a TVC member in Sarojini Nagar, Dinesh challenges unresponsive authorities, runs a successful family business from his own home, and aspires to become a legislative assembly member, rhetorically asking why a 'chudiwala' (bangle seller) cannot follow the 'chaiwala' (tea seller) Prime Minister. His rise from 'farsh se arsh' (floor to sky) illustrates how classical-liberal reforms empower street entrepreneurs against arbitrary state power, granting them voice and dignity.

**Key points:**

- India's 10 million street vendors faced routine police harassment and bribes until the Street Vendors Act protected their livelihoods.
- Centre for Civil Society advocated for the Act, which mandates Town Vending Committees with elected vendor representatives to regulate zones and resolve issues.
- Dinesh Dixit transitioned from footpath sleeping and fines to TVC membership, now advocating for fellow vendors against authorities.
- Dinesh's empowerment enables family prosperity and political ambition, mirroring India's chaiwala-to-PM trajectory.

**By Spontaneous Order**

* * *

Street vendors are an integral part of life in India. Vegetables, fruits, milk, clothing—everything people need for day-to-day living is available from sellers who trade in the open-air.

Dinesh Kumar Dixit is one of those street vendors— known locally as a “rehri-parti walla”—and he’s spent the last 40 years standing on a Delhi street, selling the sort of glass bangles that are a speciality of Firozabad, his hometown in Uttar Pradesh. According to India’s Ministry of Housing and Urban Poverty Alleviation, there are 10 million street vendors like Dinesh in India—450,000 just in Delhi.

When Dinesh moved to Delhi, his knowledge of bangles was the only way he knew how to make a living. Money was scarce, so he slept on footpaths and loaned out his wife’s jewellery for 28,000 rupees (USD 400) so that he’d have enough money to start a small street vending business as a bangle seller.

But for decades Dinesh was at the mercy of the police, local authorities, and the municipality of Delhi, who would either evict vendors or harass them by forcing them to pay bribes.

“I have maintained a record of every single fine/ challan (ticket) that I have paid for the last 41 years,” recalls Dinesh. “The police would come take my stuff and fine me. I’d refuse to pay bribes and they’d confiscate my stuff. I felt helpless and had no voice to fight the system but I continued my struggle.”

Dinesh and other millions of street vendors in India—who answer to regional names such as hawker, pheriwala, rehri-patri walla, footpath dukandars, sidewalk traders—were all at the mercy of the police before the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act was passed. Centre for Civil Society, an Atlas Network partner in India, was instrumental in advancing this groundbreaking legislation, which helps street vendors like Dinesh have a voice in the system.

The Street Vendors Act secures the rights of street vendors to have a livelihood and fosters a congenial environment for urban vendors to ply their trade without harassment or eviction from the local authorities. The legislation also provides for the establishment of Town Vending Committees (TVCs) that look into matters affecting street vendors. Representatives are elected to the committee to address issues such as new locations for vending zones and identifying vendors.

Today, Dinesh is an elected member of one such Town Vending Committee in New Delhi. He attributes his success to his source of inspiration—his wife—who passed away three years ago.

From living on a footpath to being able to build his own house, Dinesh considers himself a very fortunate man. His family has been his most important source of support and comfort. Today, he shares his home with his son, daughter-in-law, nephews, and three grandkids. Every morning the entire family comes together to pray and enjoy a hearty meal together before Dinesh heads out for work.

Despite becoming a respected member of the community, he hasn’t forgotten his roots. He still opens his shop daily in the same market of Sarojini Nagar in Delhi, where he’s sold bangles for the last 41 years. He goes to the warehouse to pick merchandise, and he and his son run their successful business together. As a TVC member, Dinesh devotes his time to improving the lives of other street vendors. The same local authorities who wouldn’t listen to him now sit across the table as Dinesh challenges them if they fail to listen to the issues of street vendors. “I feel empowered and now with the support of other vendors, I too have a voice in the system,” he says with pride.

Dinesh often spends time with his old friends in the market—other vendors who have celebrated with him as he’s built his business and raised a family. They often refer to his success as “Farsh se Arsh tak”—from sitting on the floor and selling bangles, to now having a seat at the table with local authorities. He represents the changing face of India’s street vendors, who have been empowered through the local support of think tanks.

At 63, Dinesh is planning to run for office as a member of the legislative assembly (MLA) in India. “If the chaiwala \[tea seller\] can be the Prime Minister of India, why can’t a chudiwala \[bangle seller\] be an MLA?” asks Dinesh proudly. Indeed, why not?

*This article was originally published in Atlas Network’s quarterly publication Freedom’s Champion, Spring 2019 edition. You can view the entire report [here](https://www.atlasnetwork.org/freedoms-champion/issue/spring-2019).*

Read more: [https://spontaneousorder.in/street-entrepreneurs-victims-of-executional-paralysis/](https://spontaneousorder.in/street-entrepreneurs-victims-of-executional-paralysis/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: Rule of Law

Original: https://www.spontaneousorder.in/p/so-musings-rule-of-law

Author: Spontaneous Order

Published: 2019-04-25T07:19:32.000Z

Topics: rule-of-law, governance, institutions, economic-development

> Governance is enhanced to the extent that there exists a functioning and effective rule of law. The rule of law refers not only to the actual content of regulations but, more importantly, to the -institutional process by which rules are made, amended, i..

**Summary:**

Spontaneous Order's musing asserts that governance improves with a functioning rule of law, defined primarily by the institutional processes for making, amending, interpreting, and enforcing rules rather than their content alone. From a classical-liberal perspective, this framework bolsters democracy and rational-legal legitimacy while driving development by enabling private firms and NGOs to reliably assess legal risks, thereby spurring innovation and activity. Stability is essential for effectiveness, but in a dynamic environment, it arises from an open and predictable process for rule changes rather than rigid unchanging rules. The post links this to broader themes in the 'New Public Governance' handbook, underscoring how such institutional predictability counters the instability that hampers market-oriented progress in India.

**Key points:**

- Effective rule of law prioritizes institutional processes over rule content to enhance governance and legitimacy.
- It allows private firms and NGOs to assess legal risks accurately, maximizing innovation and activity.
- Stability in rule of law requires an open, predictable process for amending rules in dynamic settings.

**By Spontaneous Order**

* * *

Governance is enhanced to the extent that there exists a functioning and effective rule of law. The rule of law refers not only to the actual content of regulations but, more importantly, to the -institutional process by which rules are made, amended, interpreted, and enforced. An effective rule of law is conducive both to democracy and to rational-legal or constitutional legitimacy. Its role in development is to maximize the ease with which private firms and NGOs can assess the legal risks associated with their plans of action, thus maximizing the likelihood that firms and NGOs will be innovative and active. Stability is key to an effective rule of law. But since no system of rules can be literally stable and unchanging in a dynamic environment, the stability must come from an open and predictable process for changing the rules.

*Access the full document [here](https://ccs.in/sites/all/books/com_books/new-public-governance.pdf).*

*This article is available in the Handbook on ‘New Public Governance’, a collection of choicest of articles that capture the essence of good governance.*

Read more: [https://spontaneousorder.in/beef-rule-law/](https://spontaneousorder.in/beef-rule-law/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Street Entrepreneurs: Victims of Executional Paralysis

Original: https://www.spontaneousorder.in/p/street-entrepreneurs-victims-of-executional-paralysis

Author: Spontaneous Order

Published: 2019-04-18T13:09:40.000Z

Topics: street-vendors, street-vendors-act, implementation-failures, licence-raj

> The roadside chaiwala, the panwala or the golgappewala are quintessential parts of India’s streets, yet these street entrepreneurs have for long operated their small enterprises without any institutional support or legal safeguards. In 2014 an attempt w

**Summary:**

The Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act 2014 promised to legitimize India's roadside entrepreneurs like chaiwalas and golgappewalas by establishing vending zones, issuing certificates, and forming Town Vending Committees (TVCs) with vendor representation to protect livelihoods while organizing public spaces. However, Centre for Civil Society's February 2019 Progress Report reveals 'executional paralysis' nearly five years later: four states have not notified rules, six with schemes lack vendor representation in TVCs, and many TVCs bypass required vendor elections via nominations. States like Tamil Nadu and Rajasthan perform better, but Bengal and Nagaland lag with only five TVCs across 250 towns. Gurugram's TVC, despite a mandated 40% vendor quota, has just 14% representation, resulting in 2018 evictions on one week's notice and vendor lawsuits. Lack of penalties fosters state complacency, perpetuating harassment and extortion for an estimated 1 crore vendors, trapping them in a persistent License Raj while big corporations are free. A positive example is TVC member Mr. Dinesh Dixit, who now negotiates with authorities after 40 years of evasion. Proper implementation could empower these classical-liberal icons of spontaneous order, granting voice and security.

**Key points:**

- CCS's 2019 report documents sluggish Street Vendors Act implementation, with 4 states failing to notify rules and 6 lacking vendor representation in TVCs.
- Many TVCs violate the Act by nominating vendors instead of holding elections, rendering representation meaningless.
- Bengal and Nagaland perform worst, forming only 5 TVCs across 250 towns due to no penalties for non-compliance.
- Gurugram's TVC has 14% vendor representation versus the mandated 40%, leading to abrupt 2018 evictions and lawsuits.
- Effective TVCs enable vendor empowerment, as TVC member Dinesh Dixit now discusses welfare with NDMC Commissioner after decades of harassment.

**By Sunaina Mathur**

* * *

The roadside chaiwala, the panwala or the golgappewala are quintessential parts of India’s streets, yet these street entrepreneurs have for long operated their small enterprises without any institutional support or legal safeguards. In 2014 an attempt was made to legitimise them through the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, which vouched to safeguard the livelihood interests of street vendors while ensuring the utility of public spaces. The bill tries to protect the livelihoods of the street vendors by creating ‘vending zones’, issuing certificates and imposing certain restrictions on street vending, to make it more systematic and organized.  

One of the important aspects of this act is the creation of a Town Vending Committee(TVC) which has members like the municipal commissioner, representatives of street vendors, local authorities, planning authority, resident welfare association and other traders associations. In order to undertake street vending, one must register with the TVC in their town/zone, after which he/she may apply for a vending certificate.  

It has been almost five years since the Act laid out norms to give street vendors their much-needed voice. So street vendors now have the right to participate in decision making and the freedom to carry out their trade without harassment, right? Centre for Civil Society’s newest research publication would prove otherwise. In February 2019 Centre for Civil Society (CCS) published its annual [Progress Report on Implementing the Street Vendors Act 2014](http://mlist.ccs.in//lt.php?id=eE0FAwgKRVcCWVVFBwULBl8). The Report found the implementation of the said act to be ‘sluggish’. With 4 states yet to even notify the rules for its implementation- the very first step in the implementation of the Act- and six states which have already notified a scheme have no vendor representation in its TVCs. While the lack of vendor representation makes the existence of a representative body meaningless, many of the TVCs with vendor representations have been formed without vendor elections and instead have been nominated or chosen, in direct violation of the provisions of the act.    

Furthermore, the executional paralysis of this Act, almost 5 years after it came into force has cost the vendors dearly. While states like Tamil Nadu, Mizoram, Chandigarh and Rajasthan have fared well in the 11 step implementation process of the Act, states like  Bengal and Nagaland are the worst performers with only 5 TVCs across 250 towns. The lack of penalties for non-compliance has encouraged complacency among the State Governments who have failed to deliver on the directives of the Act even after almost five years of its passing.  

While there are many states which are yet to initiate efforts of implementation, even the ones that have initiated the implementation are not faring any better, given the misguided nature of implementation. A case study within the same report on the city of Gurugram in Haryana, which has formed one TVC, is evidence of the grim picture that haphazard implementation has created in the Millenium City. Despite a mandated 40% representation of Street Vendors, it has only a 14% representation of street vendors. This lack of representation explains the erratic decisions such as the one taken in 2018 which forced street vendors to displace their trade on a one week notice. This was followed lawsuits filed by vendors, who had no power in the TVC created for them.  

The delay in the effective implementation and the leniency shown towards this delay shows how most states and Municipal authorities tend to disparage this, as it concerns a section of our society that has little political prominence. Executional incompetence has left the policies ineffective and given local authorities a go-ahead to take advantage of the lack of a stricter and more organized framework.  

The Act, if implemented well has the potential to free street vendors from the harassment and extortion from authorities that they have faced for years. During an interaction with an elected member of a TVC, Mr Dinesh Dixit from the Sarojini Nagar Market under the North Delhi Municipal Corporation (NDMC) we saw the good that this Act could do. “I have been vending for over 40 years, and earlier I too would run whenever the municipal authorities came to evict us. But today, as a TVC member, I sit on the same table as the NDMC Commissioner to discuss the way forward to ensure the welfare of the vendors”, said Mr Dixit with a proud smile. This displays the active participation that vendors can afford in decision making through a TVC.  

Yet, implementation delays ensure that majority these hawkers are sentenced to a lifetime of poverty and misery from the very beginning. The License Raj may have ended for the bigger Corporations in India, but it sure does exist for the poor street vendors even today. Despite street vending being the source of livelihood for an estimated 1 crore people; everyday harassment, evictions and lack of representation in decision making remain the truth of the matter.  

Read more : [https://spontaneousorder.in/the-chaiwallah-of-the-street-also-deserves-to-be-heard/](https://spontaneousorder.in/the-chaiwallah-of-the-street-also-deserves-to-be-heard/)

* * *

**About Sunaina Mathur**

Sunaina holds a Bachelor of Arts in Economics from Fergusson College, Pune. She has previously interned with the National Human Rights Commission(NHRC), the Government of Andhra Pradesh and has represented India at the UN for the Merit360 programme. Her love for languages and poetry drove her to learn French and Russian Languages, and she hopes to read her favourite book ‘War and Peace’ in Russian someday.

## SO Basically Episode 3: Who funds your neta?

Original: https://www.spontaneousorder.in/p/so-basically-episode-3-who-funds-your-neta

Author: Spontaneous Order

Published: 2019-04-18T05:46:32.000Z

Topics: political-funding, india-politics

> Watch other episodes: https://spontaneousorder.in/so-basically-episode-02-kisan-garib-kyu-hai-the-way-out/

**Summary:**

Post is fragmentary and lacks substantive content; it includes only the title 'SO Basically Episode 3: Who funds your neta?', a link to Episode 2 on agricultural issues, and a brief 'About Spontaneous Order' description framing the series as a classical-liberal critique of pseudo-socialism in Indian history and politics. No central argument, facts, or conclusion provided.

**Key points:**

- Episode 3 of SO Basically series titled 'Who funds your neta?', inquiring into political funding.

**By Spontaneous Order**

* * *

Watch other episodes: [https://spontaneousorder.in/so-basically-episode-02-kisan-garib-kyu-hai-the-way-out/](https://spontaneousorder.in/so-basically-episode-02-kisan-garib-kyu-hai-the-way-out/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: The Perils of a Welfare State

Original: https://www.spontaneousorder.in/p/8242-2

Author: Spontaneous Order

Published: 2019-04-16T13:19:42.000Z

Topics: welfare-state, socialist-economy, economic-licensing, public-expenditure

> What has the socialist State done in India? It has prevented freedom of choice and opportunity. It has created a shortage economy. It is a myth that licensing ended in 1991. 1991 brought an end to licenses for manufacturing. Licensing and controls conti..

**Summary:**

The post, an excerpt from 'After the Welfare State,' lambasts India's socialist state from a classical-liberal perspective for stifling freedom of choice and opportunity, engendering a chronic shortage economy. It debunks the myth that licensing ended in 1991, noting that while manufacturing licenses were dismantled, controls persist in services and agriculture, blocking competition, harming consumers, and breeding producer inefficiency. In pursuit of poverty alleviation and equality, the state deploys public expenditure of questionable efficacy and efficiency. Critics defending such spending by citing welfare states in developed countries remain ignorant of their real-world operations and the immense opportunity costs—future generations' burden from profligate outlays. The argument champions market freedoms over state intervention, highlighting how socialism's legacy perpetuates economic distortions and fiscal irresponsibility in India.

**Key points:**

- India's socialist state created a shortage economy by preventing freedom of choice, opportunity, and competition.
- Licensing ended only for manufacturing in 1991; controls continue in services and agriculture, making producers inefficient.
- Public welfare spending in India is of doubtful efficacy, with defenses ignoring opportunity costs paid by future generations.

**By Spontaneous Order**

* * *

What has the socialist State done in India? It has prevented freedom of choice and opportunity. It has created a shortage economy. It is a myth that licensing ended in 1991. 1991 brought an end to licenses for manufacturing.

Licensing and controls continue for assorted services and agriculture. The socialist State prevented competition. This deprived consumers and also made producers inefficient. And in the name of reducing poverty and inequality, the socialist State introduced public expenditure of doubtful efficacy and efficiency. Though the expression “welfare State” is not used all that often in India, when the public expenditure is criticized, there is often a defence in terms of the welfare states in developed countries. People who advance such justifications are rarely aware of what such so-called welfare States do in practice and of the opportunity costs of those expended resources, in terms of what future generations have to pay for that profligate public expenditure.

*Access the full document [here](https://ccs.in/sites/all/books/com_books/book-after-the-welfare-state.pdf).*

*This is an excerpt from the book ‘After Welfare State’*

*Read* more: [https://spontaneousorder.in/so-musings-the-limits-of-state-action/](https://spontaneousorder.in/so-musings-the-limits-of-state-action/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Revamping India’s Education System: It’s time for Education Vouchers

Original: https://www.spontaneousorder.in/p/revamping-indias-education-system-its-time-for-education-vouchers

Author: Spontaneous Order

Published: 2019-04-08T06:42:12.000Z

Topics: education-vouchers, school-choice, education-reform, human-capital

> There is a growing consensus that long term economic growth requires investment in human capital to augment labour productivity, which naturally directs one to education, as the greatest enabler. There has been a definite increase in enrolment rates acr..

**Summary:**

India's public education system, despite rising enrollment rates, delivers poor quality due to its monopolistic structure serving the poor, leading to teacher absenteeism, absent facilities, and wasted resources even with adequate funding. The author, from a classical-liberal perspective, advocates separating the government's role as financier from service provider, proposing Milton Friedman's (1955) education voucher system where funds follow students to any school of their choice, public or private. This introduces competition, empowers poor families with choice, incentivizes private low-cost schools, and forces public schools to improve or lose students. Vouchers as consumption subsidies could include bonuses for >80% attendance, higher values for disabled students, and progressive stipends to boost retention. Government sets minimum standards and uses randomized tests to monitor outcomes. Evidence includes Chile's 1987 reforms, which increased private enrollment, extended education duration, and reduced youth illiteracy (West, 1996). In India, CCS's Delhi Voucher Project gave vouchers to 408 underprivileged students; 63.1% switched to private schools, and over 90% of parents were satisfied with progress, teachers, and discipline (CMS & CCS, 2009). The author concludes India should shift from production subsidies to vouchers for efficient, quality primary and secondary education expansion.

**Key points:**

- India's public education monopoly causes poor quality despite funding; vouchers enable choice and competition by letting funds follow students.
- Vouchers incentivize private low-cost schools for the poor while allowing government financing without direct provision.
- Delhi Voucher Project: 63.1% of 408 beneficiaries switched to private schools, with >90% parental satisfaction on progress and discipline.
- Chile's voucher system post-1987 boosted private enrollment, education duration, and reduced youth illiteracy.
- Adopt targeted vouchers with attendance bonuses, higher values for disabled, and outcome-based monitoring to improve retention and quality.

**By Karan Bhasin**

* * *

There is a growing consensus that long term economic growth requires investment in human capital to augment labour productivity, which naturally directs one to education, as the greatest enabler. There has been a definite increase in enrolment rates across the country and for all practical purposes we’ve viewed enrolment rates as our evaluation criteria and have completely ignored if the quality of education has improved over time or not. While some authors argue that a potential solution to this problem is greater outlay on primary education, they ignore the fact that even where adequate funding is provided for primary education, the quality remains poor. With teachers absent, lack of labs, lack of sports and recreational facilities our public education system has become a dumping ground of public resources.  

A major reason behind this is the fact that India’s education system that caters to the needs of the poor in monopolistic- that is, since the poor have little ability to pay for education, only the public sector caters to their needs. A direct consequence of this is that the poor lack any choice in terms of deciding the service provider for their education needs. This lack of choice or lack of competition results in complacency with the monopolist (or the government) in terms of providing or improving the quality of education service.  

It is equally important to find an innovative way to address the critical challenges that India’s public schooling system faces. An alternative approach towards public education system comes from a clear separation between the provider and the financier of the service; that is, while the government may continue to finance the education system, it need not run its own schools to provide education. This is possible in a system where the funds follow the students rather than school. [Friedman](https://digitalcommons.usu.edu/cgi/viewcontent.cgi?article=1378&context=gradreports) (1955) proposed moving to a voucher system for primary and secondary education in the United States of America.  

Under such a system, the government would provide the students with education vouchers of a fixed amount and the student can use it towards paying their fee at any school of their choice. By providing this direct voucher in India, the Indian government can actually expand the market of primary and secondary education for the poor and low-income groups as these vouchers would act as an incentive for private entrepreneurs to set up good quality low-cost schools. Thus, while financing of education will be done by the government, production of the service under such a system can be done by either the public sector or the private sector. Over time, this move would enable healthy competition between public and private sector which should increase the efficiency of the public education system. With the funds following the students, it would be a must for public schools to provide quality education or else the students could now easily move to an alternative school.  

Additionally, a voucher system must be viewed as a consumption subsidy which would be in contrast with the current system which is a production subsidy, that is, under this system, the student gets the subsidy if he/she enrolls in an education system rather than the state government providing heavily subsidised education. This also throws up interesting opportunities in designing an education voucher program for India that may be critical towards improving education outcomes. For instance, the voucher value can have an added bonus that can be provided to students who have an attendance greater than 80 per cent. Another important aspect of designing the scheme could be towards the disabled who require special assistance and thus, they must be provided with a higher voucher value than other students. Progressive nature of vouchers, combined with annual stipends will also help in improving retention rates in schools.  

The government can set up a minimum standard for schools and establish a comprehensive randomized system for standardised tests to assess the performance of the schools based on education outcomes. This will help in mapping districts that may require additional financial help to improve outcomes.  

The education vouchers system is currently in place in several countries in different forms. In the case of Chile, [West](http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.458.7067&rep=rep1&type=pdf) (1996) observes that post introduction of the Voucher System in 1987, there was a considerable increase in the number of students attending private schools, given its superior quality. The reforms had also, in fact, led to an increase in the overall duration of education received by the Chilean population and it led to a substantial drop in the illiteracy rates amongst the youth.  

In India, the Delhi Voucher Project was undertaken by the Centre for Civil Society (CCS). Under the project, they awarded school education vouchers to 408 underprivileged students in Delhi for a minimum of 3 years. These vouchers were made directly available to the schools to meet the student’s expenditure towards fees, books, uniforms etc.  They reviewed the experiment and presented the key findings in their [Delhi Voucher Project First Assessment Report](http://schoolchoice.in/events/dvpfirstassessmentreport.pdf) (CMS & CCS, 2009). The report found that 63.1% of the voucher beneficiaries exercised freedom of choice and thus switched to private schools and more than 90% of parents of the students who switched to private schools (due to vouchers) were happy with the progress their children made, their teachers and standards of discipline in these schools.  

Therefore, there is ample evidence that the voucher system performs better than the conventional production subsidy. India could learn from the global experience and consider moving towards a voucher system as a policy tool towards expansion and improvement of the quality of India’s public primary and secondary education system.  

Read more about Education Vouchers: [https://spontaneousorder.in/equity-in-education/](https://spontaneousorder.in/equity-in-education/)

*The article is from a detailed paper that investigates the possibility of a targeted education voucher program for India. The paper can be accessed by clicking [here](https://www.researchgate.net/publication/327572787_Targeted_Education_Voucher_Scheme_for_the_Poor_in_India)*.  

* * *

**About Karan Bhasin**

A political economist by academic training, Karan Bhasin holds a bachelor’s in economics from The University of London and a master’s in economics from TERI School of Advanced Studies. A regular commentator on contemporary issues and a regular participant in TV debates, he has diversified research interests in the areas of New Institutional Economics, Political Economy, Macroeconomics and Welfare Economics. He tweets @karanbhasin95

## SO Musings: Absolute Freedom of Speech

Original: https://www.spontaneousorder.in/p/so-musings-absolute-freedom-of-speech

Author: Spontaneous Order

Published: 2019-04-05T12:54:10.000Z

Topics: free-speech, absolute-freedom, liberalism, indian-history

> To say that freedom of speech and expression should be curtailed lest it offend or hurt the sentiments of people or some people implicitly accepts a ludicrous postulate: that all facts and truths that mankind ought to know have been known, and any new e..

**Summary:**

In this SO Musing from Spontaneous Order, Ravi Shanker Kapoor advances a classical-liberal defense of absolute freedom of speech and expression, rejecting any curtailment to avoid offending or hurting sentiments. He contends that such restrictions rest on a ludicrous postulate: that all facts and truths mankind ought to know have already been discovered, rendering new expositions mere distortions. This assumption, he argues, reeks of hubris and complacency, requiring no philosophical expertise to refute. The piece embodies the Centre for Civil Society's commitment to liberal ideas against pseudo-socialism in Indian history, highlighting voices that challenge dominant false political values untethered from the independence movement or native traditions. By prioritizing unbridled expression, it posits a pathway to genuine knowledge and progress, contrasting with the banality of imposed orthodoxies.

**Key points:**

- Curtailing speech to prevent offense assumes all truths are already known, a claim deemed ludicrous and hubristic.
- Absolute freedom of speech is essential because new ideas may reveal unknown facts and truths.
- No philosophical sophistication is needed to reject the complacency inherent in speech restrictions.
- This musing preserves liberal critiques of pseudo-socialism in India's political history.

**By Spontaneous Order**

* * *

To say that freedom of speech and expression should be curtailed lest it offend or hurt the sentiments of people or some people implicitly accepts a ludicrous postulate: that all facts and truths that mankind ought to know have been known, and any new expositions would merely distort truths. One need not be a philosopher to say that the postulate is not only ludicrous but also smacks of hubris and complacency.

*Access the full document [here](http://indianliberals.in/admin/pdflanguage?id=813222236.pdf).*

*To read other writings by Ravi Shanker Kapoor on freedom of speech and other issues, visit [Indian Liberals](http://indianliberals.in/), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

**[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)**

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Another Misguided Attack on School Choice

Original: https://www.spontaneousorder.in/p/another-misguided-attack-on-school-choice

Author: Spontaneous Order

Published: 2019-04-01T09:28:40.000Z

Topics: school-choice, low-fee-private-schools, teacher-quality, education-reform

> Anurag Behar’s article on ‘the OEPS Phenomenon’ is yet another tirade against low-fee private schools, and disdain for the school choices of poor parents. Invoking an Azim Premji University (APU) report on school choice in low-information environmen

**Summary:**

Tarini Sudhakar critiques Anurag Behar’s article and an Azim Premji University (APU) report that portray low-fee private schools and poor parents' choices as irrational, driven by 'educationally irrelevant factors' like teacher characteristics, English medium, and marketing in low-information environments. The report, surveying ten districts in four states, claims a mismatch between parental perceptions and private school realities, but Sudhakar identifies three key errors: it oversimplifies choice by focusing on minor factors (teacher characteristics at 8%) while ignoring teaching-learning (33%) monitoring; it judges teacher quality solely by qualifications and experience, overlooking government teachers' 25% absenteeism and 55% non-involvement versus private teachers' greater activity, homework, and remedial classes; and it deems marketing of visible aspirations like English offensive, despite alignment with parental goals and no evidence of false advertising. APU ignores six of seven studies (2000-2017) showing low-fee privates outperforming or matching government schools on learning. Parents pay twice—taxes plus fees—for better options, prompting governments like Assam (14 English-medium model schools with 600+ students) to emulate privates. Sudhakar advocates bridging information gaps via report cards (e.g., Pakistan's model), ratings systems, and long-term reforms: easing school entry and funding children, not institutions, to enhance choice.

**Key points:**

- APU report errs by ignoring parental monitoring of teaching-learning (33% priority) and teacher presence, fixating on qualifications amid government absenteeism (25%) and non-involvement (55%).
- Private school marketing aligns with parents' aspirations for English and visible features, with no evidence of deception.
- Six of seven studies (2000-2017) show low-fee private schools match or exceed government schools on learning outcomes.
- Promote school choice via information tools like report cards and ratings, plus easing entry for providers and child-based funding.

**By Tarini Sudhakar**

* * *

Anurag Behar’s article on [‘the OEPS Phenomenon’](https://www.livemint.com/Opinion/Y03kToC1ji3kdvHeamnCcK/Opinion--The-OEPS-phenomenon-is-undermining-education.html) is yet another tirade against low-fee private schools, and disdain for the school choices of poor parents. Invoking an Azim Premji University (APU) report on *school choice in low-information environments* for his assertions, Mr Behar argues that parents choose schools on the basis of ‘educationally irrelevant factors and sociocultural aspirations’. We examined the report in great detail: its findings, at best, are insufficient to support his claims; at worst, incorrect. In spite of spending almost 70 crores rupees annually, APU—a stalwart in the education sphere—does not conduct its research with a genuine spirit of enquiry. Instead, it feeds an existing bias.  

The report, based on a survey of ten districts across Chhattisgarh, Karnataka, Rajasthan and Uttarakhand, compares parental perceptions of private schools with their reality. It argues that parents make irrational choices in a low-information environment. It also proposes that advertising by private schools reinforces the cultural aspirations of parents and vice versa, and dilutes the importance of actual educational outcomes in school choice.  

However, APU’s report rests on a weak foundation. We highlight the top-three errors in its findings.  

First, exercising school choice is a complex process. Despite acknowledging this, APU bases its arguments on only three aspects—teacher characteristics, medium of instruction, and marketing—and ignores the rest. Its data says that teaching-learning (33%) is pivotal for parents. APU should have ideally analysed how parents monitor teaching-learning in schools. Instead, it focuses on elements such as ‘teacher characteristics’ which is relevant for only 8% of the parents. Somehow, a Jewish parable about a drunk man comes to mind. Instead of hunting in the dark bushes, this man looks for his keys under the streetlight because he can see better there.  

Second, parents assess the quality of teaching through multiple lenses, but APU relies on an incomplete metric. The report evaluates academic qualifications and work-experience of both government and private school teachers. Its appraisal shows that the former has more degrees and experience. Based on this, it argues that parents who prefer ‘teacher characteristics’ (a factor the report does not define clearly), but choose ‘schools that have lesser qualified teachers than other schools’ make sub-optimal choices.  

While qualifications and work-experience may give an insight into the quality of teaching, they are not sufficient if examined stand-alone. Teachers’ presence and involvement in the classroom should be equally pertinent. Even though government school teachers tend to be more qualified, everyone—including parents—is aware of their high rate of absenteeism (25%) and non-involvement (55%). [Muralidharan and Sundararaman](https://academic.oup.com/qje/article/130/3/1011/1931887) show that private school teachers are more active and involved with their students. The report itself points out that private school teachers give more homework and remedial classes for students who are unable to cope up in English.  

Third, what is ‘quality education’ is not a settled matter. Yet, the report argues that marketing undertaken by private schools targets the more-visible aspects of schooling such as the use of English for everyday conversation. These ‘non-educational parameters’ tend to align with the aspirations of parents to gain cultural capital, and divert focus from the features of quality education.  

It is difficult to fathom why advertising these parameters is offensive. If parents aspire for their children to harness ‘easily visible parameters’ and private schools can provide them, then there is no mismatch between perception and reality. It would be a different issue if private schools were falsely advertising such aspects, but the report does not shed any light on this matter.  

The study is patchy when it comes to other aspects as well. Despite 33% parents citing ‘teaching-learning’ as the reason for preferring a specific school, it does not explain what that entails clearly. It also attempts to attack private schools by cherry-picking citations. Centre for Civil Society systematically reviewed research conducted on the impact of low-fee private schools in India between 2000 and 2017. Six out of seven studies on learning outcomes found that these schools performed better than or on par with government schools: yet, APU overlooks them.  

People forget that government schools are not actually free. Nearly all citizens pay for them through taxes. When parents switch to private schools, they choose to incur the cost of education *twice* to get what they deem best for their children. Interestingly, an increasing number of government schools are trying to emulate private schools. In Assam, the state government has opened 14 model English-medium schools which are a ‘hit’, as each school has more than 600 students. Similarly, Brihanmumbai Municipal Corporation and Karnataka government schools are moving towards English-medium instruction. They are also trying to provide technical facilities such as access to tablets, that were hitherto only found in private schools. These amenities are strikingly similar to the ones APU says parents desire and private schools advertise.  

School choice is a difficult exercise for all households and parents. Instead of chastising parents for making misinformed choices, we need to bridge the gap between their perceptions and reality. If low-information exists in the schooling environment, we can address it using tools like report cards as demonstrated by Andrabi, Das and Khwaja in Pakistan. Mechanisms such as the Dubai school ratings system and NITI Aayog’s School Education Quality Index can also be effective. However, in the longer run, we should increase the number and quality of schools by easing entry for new players and bolster parental choice by funding children instead of schools.  

Read more: [https://spontaneousorder.in/amartya-sen-from-english-to-school-choice/](https://spontaneousorder.in/amartya-sen-from-english-to-school-choice/)

* * *

**About Tarini Sudhakar**

Tarini studied History at Lady Shri Ram College for Women. She is a former Research Associate of the Centre for Civil Society.

## SO Basically – Episode 02 | “Kisan Garib Kyu Hai?” – The Way Out

Original: https://www.spontaneousorder.in/p/so-basically-episode-02-kisan-garib-kyu-hai-the-way-out

Author: Spontaneous Order

Published: 2019-03-28T06:25:47.000Z

Topics: indian-agriculture, farmers-poverty, pseudo-socialism, economic-liberalism

> Watch other episodes: https://spontaneousorder.in/so-basically-episode-01-kisan-garib-kyu-hai/

**Summary:**

This post is fragmentary, primarily announcing Episode 02 of the 'SO Basically' video series titled 'Kisan Garib Kyu Hai? – The Way Out' (Why Are Farmers Poor? – The Way Out), linking to Episode 01, without providing substantive content. It frames Spontaneous Order as a project by classical-liberal thinkers examining modern Indian history to critique and dismantle the 'banality of pseudo-socialism' imposed post-independence, contrasting it with values absent from the independence movement or native traditions.

**Key points:**

- Announces Episode 02 exploring why Indian farmers remain poor and proposing a classical-liberal way out.

**By Spontaneous Order**

* * *

Watch other episodes: [https://spontaneousorder.in/so-basically-episode-01-kisan-garib-kyu-hai/](https://spontaneousorder.in/so-basically-episode-01-kisan-garib-kyu-hai/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: The Retreat from Socialism

Original: https://www.spontaneousorder.in/p/the-retreat-from-socialism

Author: Spontaneous Order

Published: 2019-03-27T10:49:28.000Z

Topics: socialism, economic-freedom, market-economy, agricultural-failure

> The reason for the retreat from socialism is that societies that tried to base their economies on ownership by the State, economic equality and the replacement of the market by the command of the bureaucracy, simply did not work. Such societies produced..

**Summary:**

The retreat from socialism occurred because state-owned economies, premised on economic equality and bureaucratic command over markets, empirically failed to deliver promised benefits. From a classical-liberal perspective, socialist societies provided markedly less individual freedom than capitalist ones, with communist regimes in Eastern Europe and China offering none despite theoretical claims. Workers and peasants did not work harder for state or collective enterprises, motivated instead by the same carrot-and-stick incentives as under capitalism, resulting in greater slackness, pilfering among workers, and corruption among managers. On the material front, initial production spurts gave way to slower economic growth rates compared to market-reliant societies. Agriculture exemplified this failure: the Soviet Union, controlling one-sixth of the world's land surface, could not feed itself 70 years after its revolution. These realities underscore the superiority of market mechanisms in fostering both freedom and prosperity over socialist central planning.

**Key points:**

- Socialist economies delivered less individual freedom than capitalist ones, with zero freedom in communist states like Eastern Europe and China.
- Workers under socialism showed no greater effort, exhibiting more slackness, pilfering, and managerial corruption than in capitalist systems.
- Socialist growth rates lagged behind market economies after initial spurts.
- Soviet agriculture failed catastrophically, unable to feed the nation despite vast land resources 70 years post-revolution.

**By Spontaneous Order**

* * *

The reason for the retreat from socialism is that societies that tried to base their economies on ownership by the State, economic equality and the replacement of the market by the command of the bureaucracy, simply did not work. Such societies produced neither the non-material nor the material benefits which were supposed to follow from this kind of economic organisation. Believers in socialism were convinced that socialism would guarantee individual freedom; the facts showed that the [freedom of citizens of socialist States](http://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=6224&context=penn_law_review) was in reality markedly less than in the capitalist States. In the communist societies of Eastern Europe and China, no individual freedom existed at all no matter what theoretical claims were made about it. The expectation that the worker and the peasant would work harder and more willingly for enterprises owned by the State or by a collectivity because he would feel that he was working for himself rather than for a capitalist, simply did not happen; people worked more or less as they work under capitalism, being driven by the twin forces of the carrot and the stick. In fact, there was more slackness and more pilfering on the part of the workers and probably more corruption on the part of the management than in capitalist societies. On the material side, it became obvious after the first spurt in production that the rate of growth of the economy of the genuinely socialist societies was markedly lower than that of the societies relying on the market to regulate their economies. One of the most striking failures of State or collective ownership has been in agriculture where a super-power like the Soviet Union, possessing one-sixth of the land surface of the globe, finds 70 years after the revolution that it cannot feed itself.

**[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)**

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Election funding: Who pays for our political parties?

Original: https://www.spontaneousorder.in/p/election-funding-who-pays-for-our-political-parties

Author: Spontaneous Order

Published: 2019-03-25T13:13:33.000Z

Topics: election-funding, electoral-bonds, political-transparency, rti-reform

> India’s 2014 Lok Sabha elections, the biggest democratic activity in terms of scale, also unsurprisingly has the distinction of being one of the most, second most to be more precise, expensive affair of its kind in the world. Indian ministerial candidat

**Summary:**

India's elections are extraordinarily expensive, with the 2014 Lok Sabha polls costing candidates an estimated $5 billion (Rs 35,000 crores) to reach 900 million voters, including Rs 12,000 crores on social media ads in 2019 alone. From a classical-liberal perspective, this competitive political market demands spending to promote ideas, but opacity in funding undermines accountability and informed voter choices. Key institutional loopholes include the 2018 Finance Bill amendment to the FCRA retrospectively exempting parties from foreign funding scrutiny; unlimited anonymous cash donations up to Rs 2,000 per instance (down from Rs 20,000 but easily circumvented); and electoral bonds, introduced in 2018 as anti-black money measures but allowing anonymous high-value donations (Rs 1,000 to Rs 1 crore denominations), criticized as a threat to democracy by former CEC OP Rawat. Reforms advocated: bring political parties under the RTI Act, overriding the Election Commission's 2018 contradiction of the CIC's 2013 directive; and impose strict limits on anonymous donations, as parties report 100% as such. While indirect favors like rally logistics evade easy accounting, monetary transparency is crucial to restore 'one vote one person one value' and enable genuine electoral competition.

**Key points:**

- India's 2014 elections cost $5B amid 900M voters, with funding opacity enabled by FCRA exemptions, unlimited Rs 2,000 cash donations, and anonymous electoral bonds.
- 2018 Finance Bill amendment retrospectively legalized foreign funds to parties, evading prior scrutiny.
- Bring political parties under RTI Act to enforce funding disclosure, countering EC's 2018 stance against CIC's 2013 directive.
- Limit or ban anonymous donations to prevent policy influence via undisclosed large sums.
- Monetary transparency is essential for informed voting, though indirect favors remain challenging to track.

**By Sunaina Mathur**

* * *

India’s 2014 Lok Sabha elections, the biggest democratic activity in terms of scale, also unsurprisingly has the distinction of being one of the most, [second most](http://time.com/33062/india-elections-expenditure/) to be more precise, expensive affair of its kind in the world. Indian ministerial candidates collectively spent an estimated 5 Billion $ or almost Rs 35,000 crores in their election campaigns, making 2014 the most expensive election in the nation’s history. While this figure may seem outrageous at first, it makes sense that parties spend so much considering that we have a voters’ base of about 900 million. How do you ‘con’vince 900 million people to vote for your political party?  

With expanding media platforms, the avenues for political parties to influence the masses moves beyond the traditional rallies. Digitisation of India is best seen in India’s election spending. Social media ad spending alone may amount to [Rs 12,000 crores](https://economictimes.indiatimes.com/news/politics-and-nation/social-media-alone-to-corner-rs-12000-crore-in-political-ad-spends/articleshow/67649833.cms?from=mdr) in 2019. In the competitive political market of India, political parties have to spend money, not just to be visible but also to push their ideas and thoughts on any given issue. Where is this money coming from?  

That is difficult to say. Political funding in India largely remains ‘under the table’ despite the many ‘reforms’ introduced by the government. But what is it that’s making our political funding so opaque? Have the government policies really been an effort to make the process more transparent or are we moving towards making the political parties immune to all kinds of scrutiny?  

Let’s look at some of the institutional loopholes that allow electoral funding to remain non-transparent and go unaccounted for:  

1.  Amendment through the Finance Bill of 2018: Being the last full budget before the general elections, the Finance Bill 2018 saw obvious backlash and pandemonium. But the one amendment that was passed without any debate was the one proposed to the Foreign Contribution (Regulation) Act, 2010. This amendment retrospectively exempt political parties from scrutiny for receiving foreign funds, which had been a matter of legal contention for major political parties.
    
2.  Cash Payments: Political parties are permitted to receive anonymous cash payments not above Rs 2000. While this limit is lower than the earlier Rs 20,000, it is not effective in that it doesn’t put restrictions on the number of times these donations can be made by a single person. The only difference this has over the earlier limit is that now you’ll need to show big donations as smaller amounts. Hence, it is a mere sham in the name of reducing black money in political funding as long as no cap is set on the anonymous donations that a single party can receive.
    
3.  Electoral bonds- Introduced in January 2018, the electoral bonds were seen as a massive step towards controlling black money within election funding. But over time it has started to be seen as an instrument used by the government to make election funding even more opaque. These bonds are available in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore. Unusually for an instrument of such high-value, electoral bonds can be anonymous. Independent entities can donate large sums to a party without having their identities disclosed to the Indian voter. OP Rawat, former Chief Election Officer of India, said that Electoral Bonds are a ‘[Threat to Democracy](https://www.thequint.com/news/india/electoral-bonds-threat-to-democracy-former-cec-op-rawat#gs.pxBSzElQ)’.
    

With better understanding of where the major flaws lie, let’s now look at what can be done to bring transparency and accountability in the political system:

1.  Bringing political parties under the ambit of the Right to Information (RTI) Act:
    

In 2013, a directive of the Central Information Commission brought 6 national political parties under the ambit of RTI. In 2018 however, the Election Commission issued an order contradicting the CIC and stating that political parties do not come under the ambit of RTI. All this amidst the outright refusal of political parties to disclose their funding sources. The matter has also been escalated by many activists to the Supreme Court citing the CIC’s directive. Many argue that EC has no jurisdiction in the matter and the decision of the CIC is uncontestable. The lack of political will across the board has introduced a lot of corruption in the process and this still remains a far fetched reality in India.

2\. Limit anonymous donations:

Making anonymous donations to political parties is very convenient. In many cases, this anonymity exists only for the voters and the parties accept anonymous donations from entities who influence policies in their favour in return for donations. The bigger the sum of your donation the more influence you’d be able to get greater political favours. This is an obvious and immediate step which should be taken given that political parties have gone to the extent of declaring [100% of their donations](https://economictimes.indiatimes.com/news/politics-and-nation/election-commission-to-suggest-cap-on-parties-poll-expenditure/articleshow/66021690.cms) as anonymous.

While these are methods to make monetary donations to political parties more transparent, what can be done about abstract donations extended to political parties in the form of favours? If someone volunteers to bear the logistical costs of a rally, how will we account for donations made in this indirect manner? Asymmetry of this kind is very difficult to correct, or even discover.  

This implies that even after making monetary donations to political parties transparent, the problem may still persist. Having said that, introducing monetary transparency would be a step towards correcting the lack of accountability of political parties. If anonymous donations are not controlled, the concept of one vote one person one value is meaningless. Informed choices do not come from uninformed masses.

Read more: [https://spontaneousorder.in/crime-and-politics-the-goondas-holy-grail/](https://spontaneousorder.in/crime-and-politics-the-goondas-holy-grail/)  

* * *

**About Sunaina Mathur**

Sunaina holds a Bachelor of Arts in Economics from Fergusson College, Pune. She has previously interned with the National Human Rights Commission(NHRC), the Government of Andhra Pradesh and has represented India at the UN for the Merit360 programme. Her love for languages and poetry drove her to learn French and Russian Languages, and she hopes to read her favourite book ‘War and Peace’ in Russian someday.

## It’s not 1950: India needs an urgent policy overhaul in agriculture- Part 2

Original: https://www.spontaneousorder.in/p/its-not-1950-india-needs-an-urgent-policy-overhaul-in-agriculture-part-2

Author: Spontaneous Order

Published: 2019-03-25T10:32:30.000Z

Topics: agriculture-reform, free-markets, agricultural-subsidies, pilot-programs

> Read the first part on the challenges and solutions of agriculture policy in India here. How would the execution of a free-market structure in agriculture sector work? I propose the following: The pilot The plan requires a change in laws governing agric..

**Summary:**

Nishchint Satam proposes implementing a free-market structure in Indian agriculture through a pilot in a willing state's district, requiring tweaks to state agriculture/land laws and concurrent labor laws. Start with mass awareness to enlist farmer cooperatives and entrepreneur proposals, focusing on high-potential areas like urban organic farming where input costs are below revenues. Monitor pilots over 2-3 crop cycles, then phase adoption across districts with regular reviews, supported by tribunals, consulting, and investor engagement. Long-term: phase out agriculture subsidies for targeted direct transfers to boost budgets and reduce fiscal deficits; federal EXIM reforms toward zero-minimal tariffs for competitiveness. Impacts include efficient demand-driven resource allocation, steady farmer incomes from leased farming, ancillary GDP-boosting businesses, and safety nets for failures. Criticisms acknowledged: securing state buy-in, sustainable profitability regionally, and potential income disparities despite direct transfers. This classical-liberal approach shifts from supply-driven subsidies to lucrative, market-led agriculture.

**Key points:**

- Launch pilots in districts of experimental states by tweaking agriculture, land, and labor laws to form farmer cooperatives and attract entrepreneur proposals.
- Run pilots for 2-3 crop cycles, publish critical reviews, and scale phased adoption with monitoring for profitability and quality-of-life improvements.
- Phase out agriculture subsidies, replacing them with targeted direct transfers, and liberalize EXIM policies to zero-minimal tariffs.
- Anticipate demand-driven efficiency, steady rural incomes, GDP growth from food processing, with direct transfers safeguarding marginal farmers in failures.

**By Nishchint Satam**

* * *

*Read the first part on the challenges and solutions of agriculture policy in India [here](https://spontaneousorder.in/its-not-1950-india-needs-an-urgent-policy-overhaul-in-agriculture/).*

How would the execution of a free-market structure in agriculture sector work? I propose the following:

**The pilot**

The plan requires a change in laws governing agriculture, land and labor. Agriculture and land are on the state list while labor is on the concurrent list. The pilot could be started in a district in a state willing to tweak its current agriculture and land laws.

The plan is likely to succeed when the cost of inputs are lower than potential revenues. Organic farming around urban centers for example are likely to be the first ones to succeed though the idea need not restrict other potentially lucrative businesses. A mass awareness drive in the selected region could be conducted informing the farmers about potential benefits of the scheme and enlist their support. A similar campaign could be conducted to attract entrepreneurs to submit their proposals for setting up businesses. Once a local cooperative is in place, potential entrepreneurs could be asked to present their proposals to the cooperative to finalize a proposition which gets them the most benefit.

The business would then be monitored for success on various parameters including its profitability, improvement in the quality of life for the populace in the region in general and the farmers in particular.

**Phased adoption**

A critical review of the pilot which should be run for at least 2-3 crop cycles would be published highlighting what went right and what did not. Depending on the success, the scheme could be implemented in phases, each time implementing the plan in a few districts. A regular review of this would also be necessary.

**Checks and Balances**

Setting up of the tribunal for resolving legal matters, legal and commercial consulting setup for cooperatives, mass awareness drives, active engagement of entrepreneurs and investors, critical assessment of pilots are all critical elements to ensure that the plan succeeds.

**Long term changes**

1.  Agriculture subsidies would need to be phased out and they would have to be replaced with targeted direct transfer schemes. This would greatly boost our budget and narrow the fiscal deficits.
    
2.  For agricultural businesses to flourish, the federal government will have to make changes to its EXIM (export-import) policies. A more transparent and competitive regime of zero to minimal tariffs in the long term on export and import would be healthy for the business.
    

**Potential impacts:**

There are likely to be the following positive impacts of this proposal:

1.  Efficient allocation of resources is in principle and in practice (when implemented correctly) the biggest benefit of free market. Agriculture would evolve from its current supply driven and government subsidized model to a demand driven system feeding into towns and urban centers making the business truly lucrative.
    
2.  The leased farming system would create a steady income source for the farmers and boost spending across the rural areas. Ancillary food processing businesses would flourish in the surrounding areas boosting the overall GDP of the region.
    
3.  Places where the proposed plan would fail due to any number of reasons like high cost of input (labor, water etc.), reluctance on the part of farmers/ entrepreneurs etc. the direct transfer scheme would ensure that the marginal farmers are taken care of.
    

**Criticism for the proposal:**

1.  One of the most difficult parts for the proposal is getting a state government to agree to tweak their labor and agriculture laws. The plan simply would kick start without it. Choosing a state with partial commercialization and readiness to experiment would be crucial to the proposal’s success.
    
2.  Attracting entrepreneurs and farmers to the scheme sustainably would depend on profitability of the business which would be different across different regions.
    
3.  The plan is likely to create pockets of highly successful businesses also resulting in relatively poorer pockets where the free market fails. Though direct transfer scheme would ensure subsistence for the poorer pockets, income disparity would be high.
    

Read more: [https://spontaneousorder.in/farm-loan-waivers-a-misguided-policy/](https://spontaneousorder.in/farm-loan-waivers-a-misguided-policy/)

* * *

**About Nishchint Satam**

Nishchint Satam is an MBA graduate from the Indian School Of Business, Hyderabad and currently works as a management consultant out of Mumbai. He recently completed a fellowship in Public Policy from YLAC. He is passionate about agriculture and attributes it to his annual visits to the family’s country side farms where he worked on the fields with his entire family.

## School Rating For Parents

Original: https://www.spontaneousorder.in/p/school-rating-for-parents

Author: Spontaneous Order

Published: 2019-03-22T09:48:58.000Z

Topics: school-choice, budget-private-schools, school-rating, education-reform

> With the rapid increase in the number of private schools, school choice is becoming difficult for parents. There are no valid and reliable methods available to make them informed about the performance of different schools. School rating is one tool thro..

**Summary:**

With the rapid growth of private schools in India, particularly budget private schools serving economically weaker sections, parents face difficulties in school choice due to the absence of valid and reliable rating methods. Poor parents rely on informal, often inaccurate information from friends, relatives, and neighbors, or basic fee details from schools, yet crave trustworthy data for this critical decision. No tools exist to assess budget private schools, leading to frequent child switches and high donation fees for admissions. A proper rating mechanism is essential to enable informed choices and foster competition, thereby improving school standards and performance. Research reveals parents prioritize low fees with flexible payments (due to irregular incomes), strong exam scores, communication and computation skills, teacher qualifications, student-teacher ratios, regular feedback, good infrastructure, and facilities like computer-aided learning. Intangible factors include discipline, self-initiation, values, friendly teachers, personal attention, and management sensitivity to economic backgrounds. This informs a comprehensive school rating model covering academic achievements, fees structure, teachers, management, learning environment, facilities, discipline and values, extracurriculars, feedback, and parent opinions, empowering parents to secure quality education through market-driven choice.

**Key points:**

- Parents of children in budget private schools lack reliable performance data and depend on inaccurate informal sources.
- A school rating model is needed to facilitate informed choices, prevent costly school switches, and spur competition to elevate education quality.
- Parents value tangible factors like low flexible fees, exam scores, teacher qualifications, infrastructure, and feedback, alongside intangibles such as discipline, values, and management sensitivity.
- The proposed rating model assesses schools across 10 categories including academics, fees, teachers, facilities, and parent opinions.

**By Spontaneous Order**

* * *

With the rapid increase in the number of private schools, school choice is becoming difficult for parents. There are no valid and reliable methods available to make them informed about the performance of different schools. School rating is one tool through which different stakeholders can make informed decisions about schools.  Even though school rating is conducted abroad and for elite schools in India a large proportion of children studying in budget private schools mostly from economically weaker sections do not have access to such data.  

Before choosing schools such poor parents largely depend upon informal sources of information. Parents enquire about schools from friends, relatives and neighbours. This information is often inaccurate. Some information on fee structure, amount of fee and fee concessions are enquired from school authorities. Despite this, parents feel the need for accessible information they can trust to help them make this important decision.     

There are no valid methods and tools developed till date to assess budget private schools. It is essential to develop a proper rating mechanism to aid school choice as without it parents may choose wrong schools due to lack of information. Without such data parents frequently shift their children and have to pay high donation (admission fees) to gain admission. Moreover such a model could improve the standards and performance of schools by instituting competition in the delivery of education services.  

The question of what makes parents choose a particular school over another is central to the design of a school rating model. Through research we found that parents are interested in schools with lesser fees and more flexibility in fee payment. As many parents do not have regular income they prefer schools with “loose” fees payment deadlines.   Besides fees, parents want their children to score good marks in examinations especially in common board examinations. They want their children to learn good communication skills, presentation skills, improve their IQ and also learn basic computation. The parents also consider and therefore would like information on teacher qualifications and student‐teacher ratio. They would like regular and proper feedback about their child’s performance in studies and other activities, good infrastructure, conducive learning environment and other facilities like computer aided learning. All the above mentioned factors can be gauged and rated as they are tangible in nature.  

Some expectations of parents constitute intangible parameters in school rating. These are that students should be well disciplined, self initiation to do homework; learning and values must be inculcated in them. Teachers should be friendly in dealing with students and parents and provide personal attention to their children’s activities and performance. Moreover, the management should be sensitive to their economic background and respond accordingly.  

These tangible and intangible requirements have helped us create a model to assess any school. This model includes the categories of academic achievements, fees structure and flexibilities, teachers, management, learning environment, facilities, discipline and values, extracurricular activities, feedback and evaluation about student’s performance and parents opinion about the school.  We hope that this model can help parents in their quest for providing good education for their children.

*View the research paper [here](https://ccs.in/internship_papers/2010/raksh-reddy_school-rating-model.pdf).*

Read more: [https://spontaneousorder.in/another-misguided-attack-on-school-choice/](https://spontaneousorder.in/another-misguided-attack-on-school-choice/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## It’s not 1950: India needs an urgent policy overhaul in agriculture- Part 1

Original: https://www.spontaneousorder.in/p/its-not-1950-india-needs-an-urgent-policy-overhaul-in-agriculture

Author: Spontaneous Order

Published: 2019-03-20T08:48:39.000Z

Topics: agriculture, agricultural-subsidies, land-reform, economic-freedom

> Its 1950. India, a newly independent country of 360mn1 is experimenting with democracy. Armed with a benevolent constitution, the nation’s leaders deliberate over ways of improving the lives of its citizens. They stumble upon Agriculture by no coinciden

**Summary:**

India's agriculture policies, designed in 1950 when the sector contributed ~50% to GDP and employed over 80% of a 360 million population, are outdated amid today's realities of <20% GDP share and ~40% employment, rendering subsidies like INR 2,400 billion in 2018 inefficient for uplifting the majority. While food self-sufficiency remains vital, especially for marginal farmers and landless laborers in subsistence farming—who produce just for survival, rely on monsoons, and shun modern methods—policies must decouple broad agricultural subsidies from farmer welfare. Commercial farming by large landowners, corporates, and cooperatives drives market yields but leaves subsistence farmers trapped due to lack of alternatives, as seen in rural-urban migration. From a classical-liberal viewpoint, India should welcome entrepreneurs into agriculture by slashing red tape, reforming land ownership and labor laws, and easing credit access. Marginal farmers would benefit via local cooperatives renting land to entrepreneurs, securing market-driven rental income while stipulating local labor use to aid landless workers; tribunals would resolve disputes swiftly. Direct cash transfers offer better-targeted aid than indirect subsidies, fostering economic freedom and productivity without exploitation.

**Key points:**

- Agriculture's diminished role (<20% GDP, ~40% employment) makes broad subsidies inefficient compared to 1950 levels (50% GDP, 80% employment).
- Subsistence farming traps poor marginal farmers who need direct aid like cash transfers, while commercial farming by entrepreneurs boosts yields.
- Reform by enabling entrepreneurs through land/labor law changes, easier credit, and cooperatives for secure land leasing to provide rental income and jobs.
- Local cooperatives empower farmers to set labor conditions and utilize idle lands, with tribunals for quick dispute resolution.

**By Nishchint Satam**

* * *

**Its 1950**.

India, a newly independent country of [360mn](https://tradingeconomics.com/india/population)1 is experimenting with democracy. Armed with a benevolent constitution, the nation’s leaders deliberate over ways of improving the lives of its citizens. They stumble upon Agriculture by no coincidence.  Agriculture in India is the whole and soul of the country, contributing ~[50% to the Gross Domestic Product (GDP)](http://planningcommission.nic.in/data/datatable/data_2312/comp_data2312.pdf) and employing more than [80% of the population](https://academic.oup.com/ajae/article/92/4/1256/75236).

Naturally, policies oriented towards uplifting farmers are a good way to uplift the nation from poverty. It is, as they say in business lingo, the low hanging fruit as far as improving the lives of the majority goes. In the decades that follow, government after government ideates, deliberates and executes policies for farmer welfare. Lowly but, steadily, India rises from being a country struck by famine regularly to a country self-sufficient in food.

**Fast forward to 2019**.

Agriculture contributes <[20% of GDP](http://planningcommission.nic.in/data/datatable/data_2312/comp_data2312.pdf)2 and employs [~40% of the population](https://www.financialexpress.com/budget/india-economic-survey-2018-for-farmers-agriculture-gdp-msp/1034266/)4. That raises the question, is agriculture any less important now?

Yes and No.

Yes because, in number terms, a sizeable chunk of the population doesn’t directly rely on the farmlands anymore. Thus, subsidies on food grains and fertilizers ([INR 2,400 billion in 2018](https://www.thehindu.com/business/budget/union-budget-2018-subsidy-bill-on-food-fertilisers-oil-up-15-at-26-lakh-crore/article22623247.ece))5 are no longer as efficient or ‘low hanging’ as they used to be.

No, because, at the end of the day, a nation needs to grow its own food and the conditions of marginal farmers and landless laborers need improvement.

**So what must change?**

Acknowledging the above, a change of perspective towards agriculture policies is pertinent. Incremental changes in policies, as have been going on for the past few decades, are no longer enough or efficient. There is a need for developing a new outlook which isolates welfare of majority from agricultural subsidies.

**How is it today?**

There are, broadly speaking, 2 types of agricultural activities that take place in India:

1.  **Subsistence farming:**
    

Farming today is rarely seen as a lucrative profession by the average Indian youth. Most marginal farmers carry out subsistence farming i.e. produce just enough for their family’s survival and rarely for trading. They are least likely to employ modern methods of farming and most likely to be heavily dependent on monsoon. The land under cultivation is also likely to be not well-irrigated or arable.

**2\. Commercial farming:**

Commercial farming is typically done by farmers owning large lands, corporates/ cooperatives leasing lands from a group of farmers on a contract and corporates farming on lands leased out by state governments (the last one is prevalent only in some states of India). It contributes to the bulk volumes of yields sold in the markets that impact Indian economy. There is a high usage of fertilizers, pesticides and insecticides to improve yields. Wheat, rice and other major crops are grown in this fashion. One may also consider plantation farming in this category which includes fruits, rubber, coffee, sugarcane etc.

The following observations and deductions can be made from this:

-   Subsistence farming is likely an occupation for an individual without better alternatives for a sustained income.
    
    1.  This implies that in the event of a better alternative being available, the farmer is less likely to continue doing it. This implication may be observed in the mass migration from rural areas to urban areas.
        
    2.  It also implies that the farmers who are continuing to farm for subsistence are likely to be poor and in most need of help from the government.
        

-   While government subsidies on farming inputs like seeds, fertilizers, MSPs, government procurement machinery, crop insurance do help marginal farmers out to some extent, it is a very indirect way of doing so. The direct transfer scheme recently announced by the government may prove to be more fruitful as it grants regular cash flow to the most vulnerable section. However, the implementation and its likely impact on our nation’s fiscals remain to be seen.
    

**So, what needs to be done?**

India needs to welcome its entrepreneurs into agriculture. It needs to set up a market place and regulatory mechanism to allow anyone willing to start an agricultural business (food grain/ commercial crops) to do so easily. This means cutting the red tape, reforming land ownership and labor laws and allowing easier credit.

Drastic? What about the marginal farmers, landless laborers, non-agribusinesses dependent directly or indirectly on farming? This is surely a recipe for tremendous injustice and exploitation of the farmer, isn’t it?

Well, no. The devil is in the details or rather in this case, the virtues of this scheme are in the details.

The idea would be to rent farms or any other lands (rather than selling them) from landowners through a local cooperative society which would be paid rental income by the entrepreneurs using the lands again at the discretion of the farm owners. The government/ NGOs could help the cooperative with the legal and commercial setup.  A separate tribunal to resolve legal conflicts could be setup to fast track any disputes. A cooperative thus formed with local representation would give better leverage to the farmers as against individually renting out land and lay out their own conditions regarding usage of local labor thus benefiting the landless laborers. Also productive farm lands kept unused could be brought under utilization providing the farmers and laborers with market driven rental income and wages respectively.

The local cooperatives could rent out the rights to doing non-farming businesses like animal husbandry on non-farmlands (grasslands) in a similar fashion to a willing corporate or entrepreneur.

But this is easier said than done. How could this proposal be executed?

*Stay tuned to understand the implementation road-map and the possible challenges to the proposition.*  

Read more: [https://spontaneousorder.in/so-musings-economic-freedom-for-farmers/](https://spontaneousorder.in/so-musings-economic-freedom-for-farmers/)

* * *

**About Nishchint Satam**

Nishchint Satam is an MBA graduate from the Indian School Of Business, Hyderabad and currently works as a management consultant out of Mumbai. He recently completed a fellowship in Public Policy from YLAC. He is passionate about agriculture and attributes it to his annual visits to the family’s country side farms where he worked on the fields with his entire family.

## SO Musings: A.D. Shroff on State Monopoly

Original: https://www.spontaneousorder.in/p/so-musings-a-d-shroff-on-state-monopoly

Author: Spontaneous Order

Published: 2019-03-19T11:07:55.000Z

Topics: state-monopoly, free-enterprise, totalitarianism, economic-freedom

> Once the State begins to intrude in the field of private or free enterprise, it will soon develop into a monopolist wielding power of an enormous character. Every industry in the private sector must play a subservient role, every business activity must ..

**Summary:**

A.D. Shroff warns that once the state intrudes into private enterprise, it inevitably becomes a monopolist exerting enormous power, forcing every private industry into subservience and dictating all business activities. In such a system, as noted by the Group of Socialist Thinkers in '20th Century Socialism,' there is no freedom to experiment with unapproved ideas; risk-takers are marginalized, and eliminating private capital paves the way to totalitarianism. Shroff highlights that state ownership, intended to curb abuses, proves equally vulnerable to corruption. He invokes Thomas Jefferson's insight that concentrating all powers in one body destroys individual liberty and rights, a pattern seen in every historical government. From a classical-liberal viewpoint, this underscores the perils of state dominance over free enterprise, advocating preservation of private initiative to safeguard freedom and innovation against the encroaching threats of monopoly, control, and authoritarianism.

**Key points:**

- State intrusion into private enterprise evolves into monopoly, subordinating all private industries to government dictates.
- Absence of state approval stifles experimentation and innovation, rendering risk-takers misfits in a socialist system.
- State ownership fails to prevent corruption and opens the path to totalitarianism by eliminating private capital.
- Thomas Jefferson observed that centralizing power in the state destroys individual liberty across all historical governments.

**By Spontaneous Order**

* * *

Once the State begins to intrude in the field of private or free enterprise, it will soon develop into a monopolist wielding power of an enormous character. Every industry in the private sector must play a subservient role, every business activity must be carried on in the mode and manner in which the State dictates. As observed by the Group of Socialist Thinkers, in the “20th Century Socialism,” in such a system: “There is no freedom to experiment with ideas which have not won State approval. The man who wishes to risk or dare is a misfit – or worse. To eliminate all private capital is to open the road to totalitarianism.” Experience has demonstrated that State ownership can as well be dangerous. It has not been immune from abuses and corruption, which it seeks to check. The danger to the individual and his freedom and liberty in such a system was realised by Thomas Jefferson years before, when he expressed his conviction that “the generalising and concentrating all cares and powers into one body has destroyed the liberty and the rights of men in every Government which has ever existed under the sun”.

*Access the full the full document [here](http://indianliberals.in/admin/pdflanguage?id=1023796040.pdf).*

*To read other writings by A D Shroff, visit [Indian Liberals](http://indianliberals.in/), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

**[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)**

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## SO Musings: Why do we need division of labour?

Original: https://www.spontaneousorder.in/p/so-musings-why-do-we-need-division-of-labour

Author: Spontaneous Order

Published: 2019-03-15T10:27:21.000Z

Topics: division-of-labour, self-sufficiency, market-economy, economic-liberalism

> Human beings, being “economic”, should never be advised to be “self-sufficient”. Imagine your plight if you decided to opt-out of the exchange of goods and services and had to do everything yourself. Imagine what would happen if your family became

**Summary:**

The post vehemently opposes self-sufficiency as an economic fallacy, arguing from a classical-liberal perspective that humans, being inherently 'economic,' thrive through specialization and exchange rather than isolation. It illustrates the absurdity of self-sufficiency at every scale: an individual would need to grow food, build houses, and perform surgery, squandering talents in unskilled areas; the same holds for families, villages, towns, and nations like India, where pursuing it amounts to 'economic suicide.' The author challenges the logic by noting that kindergarten children aspire to specific roles like actor or policeman, not self-sufficiency, underscoring its intuitive rejection. Instead, participation in the market economy enables the division of labour, where individuals specialize in their competencies, boosting productivity and prosperity. This critique implicitly targets statist policies favoring autarky, advocating free exchange as the path to human flourishing.

**Key points:**

- Self-sufficiency at any level—from individual to nation—diverts productive energies from strengths to unskilled areas, harming prosperity.
- Pursuing national self-sufficiency, as in India, constitutes economic suicide by rejecting specialization and trade.
- Children naturally aspire to specialized roles, not self-sufficiency, revealing its illogic.
- Market economies foster the division of labour through specialization, enhancing overall efficiency.

**By Spontaneous Order**

* * *

Human beings, being “economic”, should never be advised to be “self-sufficient”. Imagine your plight if you decided to opt-out of the exchange of goods and services and had to do everything yourself. Imagine what would happen if your family became “self-sufficient”, and then your village, or your town. This would mean that not only would you be compelled to grow your own food and wash your own clothes, it would also mean that you would have to learn to build your own house and learn surgery. At no level does self-sufficiency improve the lives of those who practice it. All it does is to divert your productive energies from those areas which you are most competent to those where you are relatively unskilled. If it is bad for a person, a family, a village or a town to practice self-sufficiency, surely a great nation like India cannot gain by pursuing such a path. *Self-sufficiency is economic suicide.*

A little experiment can be attempted: Go to a kindergarten class and ask the little children what they want to be when they grow up. They will answer: actor, dancer, policeman, and so on. I’ll bet that not a single little child will say: I want to grow up and be self-sufficient. If it goes against the logic of little children, how could it be logical for the entire nation to practice self-sufficiency?

When we specialise in the market economy, a phenomenon occurs which economists call the ***Division of Labour***.

*Access the full the full document [here](http://indianliberals.in/admin/pdflanguage?id=1771275223.PDF).*

*To read other writings by Sauvik Chakraverti, visit [Indian Liberals](http://indianliberals.in/), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

[Read More SO Musings](https://spontaneousorder.in/?s=SO+Musings)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Uncertain Lives: How Street Vendors Earn, Spend and Borrow- Part 3

Original: https://www.spontaneousorder.in/p/uncertain-lives-how-street-vendors-earn-spend-and-borrow-part-3

Author: Spontaneous Order

Published: 2019-03-14T13:43:32.000Z

Topics: street-vendors, informal-economy, family-enterprise, urban-livelihoods

> Subziwallahs: Pandey Brothers The Pandey brothers – Mahesh (33) and Ajay (27) – run a vegetable and fruit stall in Delhi. The earnings from their business support their joint family of twelve members that includes their respective wives and five child

**Summary:**

The Pandey brothers, Mahesh (33) and Ajay (27), exemplify resilient street vendor entrepreneurship in Delhi, supporting a joint family of twelve—including wives, five children, elderly parents, and a nephew—with daily profits of ₹3000 from a 12x7-foot rent-free roadside vegetable and fruit stall. Starting from humble beginnings as laborers in Sahibabad Mandi, they bootstrapped their business fourteen years ago, graduating from pushcarts to a fixed stall. Their grueling routine begins at 4am: buying 200kg of produce for ≤₹10,000 cash (no auctions or credit for small vendors), loading via rented tempo, meticulously arranging displays, and selling 80% of inventory during peak hours (9am-12pm, 5-8pm). Winters boost profits due to higher supply, lower spoilage, increased demand, and reduced competition. Despite following rules—no plastic bags, licensed, clean pavement—they endure extreme weather, police/MCD harassment, and worsening customer callousness fueled by online platforms like Bigbasket and Amazon. Customers snap produce, demand unpayable credit, haggle endlessly, and treat them as dispensable, eroding their dignity. With ₹70,000 in savings, a home, and car loan, they question if their sincere efforts to deliver fresh, desi produce at low prices are worth it, feeling trapped without alternatives in India's informal economy.

**Key points:**

- Pandey brothers earn ₹3000 daily profit supporting 12 family members by buying 200kg vegetables/fruits for ≤₹10,000 cash from mandi and selling 80% from their stall.
- They meticulously style displays and maintain quality despite no access to auctions, discounts, or credit available to larger traders.
- Customer behaviors—snapping produce, demanding credit, endless haggling—hurt more than weather or official harassment, amid competition from online platforms.
- Despite licensing, cleanliness, and no plastic use, authorities and some patrons view them as tricksters, undervaluing their hard work and enterprise.

**By Ananya Patel**

* * *

Subziwallahs: Pandey Brothers

The Pandey brothers – Mahesh (33) and Ajay (27) – run a vegetable and fruit stall in Delhi. The earnings from their business support their joint family of twelve members that includes their respective wives and five children, elderly parents, and a nephew.

Mahesh left home in Moradabad, Uttar Pradesh at age 16 to work for his uncle in Sahibabad Mandi,a busy wholesale vegetable market in Ghaziabad. His uncle ran a small business renting out *tempos* (mini trucks) to vegetable vendors to carry their daily bulk purchases from the *mandi* to neighbouring areas. Mahesh was his uncle’s driver, mechanic, loader, negotiator, and money-collector.

Inspired by Mahesh’s financial independence, a few years later Ajay left their hometown to work alongside his brother. The *mandi* became their home and work place. They slept, ate, and worked amidst hundreds of labourers in the sheds, where lacs of rupees were exchanged for farm produce from across the country. Not content with earning a fixed monthly salary, the two decided to start their own business – buying fresh fruits and vegetables from the *mandi* and selling it on a four-wheel pushcart in residential lanes and by-lanes of a neighbourhood in Delhi. They would work 10-hour days, walking the streets, calling out to housewives to buy their “*taazisubzi*” (fresh vegetables). That was fourteen years ago. Since then, the brothers have married, had children, bought a three-room apartment and settled down in East Delhi with their parents. They continue to buy fruits and vegetables from Sahibabad Mandi, except instead of selling on mobile carts, they have a rent-free, twelve feet by seven feet roadside stall,fitted with a beachside umbrella,in the same residential neighbourhood where they pushed their cart.

The day begins at 4 am for Ajay, and his 22 year-old nephew, Sushant. They reach the wholesale market at 5 am on their motorcycle. Based on previous day sales, they decide what and how much they need to buy. Walking around, they look for the best quality and price. On a typical morning, they buy 200 kg of fruits and vegetables spending not more than ₹10,000.

Unlike big traders with large purchase orders, the Pandeys cannot participate in auctions, get discounts, credit or access to ‘first’ quality goods. They pay cash and buy at fixed prices decided by commission agents at the *mandi*.

After their shopping is done, they sort, pack, and load their stock onto a rented *tempo*. It is 7 am when Ajay and Sushant finally leave the *mandi*.Mahesh, being the older brother, gets the privilege to sleep in late and arrive directly at the stall at 7 am in his *Maruti 800*(a small car) with the unsold inventory of the previous day. While waiting for the day’s supplies, he sweeps and dusts the space, setsup tables with the wooden planks and plastic crates that are stored overnight in a nearby garage, and puts a plastic sheet as a table cover. He sorts through the ‘old’ stock, culling what cannot be sold.

The loaded *tempo* reaches the stall a little after 8 am. Sacks and boxes are unloaded and the contents neatly arranged in a specific order. The team understands that customers will not pay well for produce that looks tired, unappealing,or off-colour. Over the years, they have developed a keen sense of styling. Greens, in their multiple shades, are stacked on one side. Spherical lemons and tomatoes are heaped in tilted round trays with edges that prevent them from rolling over. Cabbage heads are posed atop each other in a pyramid while carrots and radish are arranged in a neat spiral pattern. Hardier vegetables are kept in front, onions in a gunny bag on the ground, and potatoes, the bestselling item, have a separate table for display. It takes the three men an hour to create this visual treat.

Most importantly, the Pandeys follow a long-held family superstition: never place measurement gear on an empty table. Thus, the weights and weighing balance are brought out last. Their busiest time is from 9 am to 12 pm and then from 5pm to 8 pm. This is when their customers –the *memsahibs*(upper-class ladies), their cooks, and helpers come looking for freshest fruits and vegetables. On an average day, they sell 80% of the inventory and make a profit of ₹3000, all in cash. Their earnings change with seasons. Mahesh, the accountant of the family,explains the reasons for higher profits in winters than during summers and monsoons. He says, “*Mandi* prices fall in winter as supply increases and spoilage decreases. Also, people eat and buy more in winters boosting our sales. Moreover, many street vendors leave the city because of a steep dip in temperature. This reduces competition. All this means higher sales and profits for us in the cold months.”

Irrespective of seasons, their daily routine never eases up. The stall is open for business seven days a week, including holidays. The city’s extreme weather makes it worse. All day in the outdoors they are exposed to the hot and dry winds in the summer, oppressive heat and heavy downpour in the monsoonand the cold waves in the winter. Oddly, it is not the weather, but the callousness of the customers in recent years that they find most challenging and disheartening.

Maheshpartly blames online shopping for change in customer attitudes and behavior. “Because of Bigbasket and Amazon, several customers make us feel that we are dispensable and they are doing a favour by shopping with us. Would Bigbasket allow a shopperto bend and snap each ladyfinger’s tip to check for its crunchiness and return those that fail her test?” he asks me testily. “It is easier to accept predictable harassment from policemen, MCD workers, and local thugs than the thoughtless behaviour of some of our patrons.” He continues, “Our responsibility is to get from the *mandi* and bring it to your doorsteps. Quality of our produce is a pact between nature and the farmer. So when a *memsahib* complains thatthe apples are too red, and yet not sweet, it’s not our doing.”

Then there are customers who take advantage of the fact that they are ‘regulars.’ They pick vegetables when they are passing-by without paying for it. They make excuses like, “I am not carrying my wallet. I will pay later, add it my *hisaab* (account).” The ‘later’ is never specified, and the account is kept ongoing. “We get no credit from our suppliers and yet to maintain goodwill we are forced to offer it to our customers,” complains Sushant.

Sushant finds the customers who argue endlessly over prices even more tiresome. “It’s easy to tell their type. They come in fancy cars and demand petty discounts. For everything, they moan that the price is too high. We have smartened up. We quote them a higher initial price and then allow a discount to make them feel good about their negotiating skills.” Selling perishable items creates a further disadvantage. “It’s not that we can refuse to sell. At the end of the day, unsold inventory is a loss for us. There is only so much that we can carry forward the next day or consume ourselves,” says Sushant with a sense of helplessness.

However, more than the monetary loss, it is the lack of acknowledgment of their sincere efforts that pains them. Rajesh, the quietest of the three, puts things in perspective, “We sell good quality, *desi*(homegrown) produce at low prices. We follow all rules – no plastic bags, keep the pavement clean, have a license, do not beg or steal; yet the authorities and some customers view us as tricksters.”

Through the day, their keen eyes scan their display, removing wilting pieces, spraying water on green leafy vegetables, covering delicate ones with a damp gunny cloth; taking care, so that customers eat healthy.

At times they wonder if it’s worth it. Sadly, in their case, they feel they have no alternative.

[

![](https://substackcdn.com/image/fetch/$s_!DqFt!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F90f9f6bc-5f07-481a-a45f-98ae99d0c2a3_783x513.jpeg)



](https://substackcdn.com/image/fetch/$s_!DqFt!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F90f9f6bc-5f07-481a-a45f-98ae99d0c2a3_783x513.jpeg)

1Sushant is their sister’s son. He lives with his uncles and helps run their business. He receives a stipend of ₹9,000, in addition to free boarding.

2Their wives are given an allowance of ₹600 a day to run the kitchen. Vegetables and fruits are used from unsold inventory. The family consumes 4 litres of milk and 1.5 kg of rice daily. Mahesh carries lunch for his team when he leaves home at 7 am. Often, the family has house guests from the village who stay with the Pandeys for an extended period of time.

3Both parents are elderly and have multiple health issues. Their monthly medicines and doctor’s visits average ₹3,000. There are five children in the joint family. The elders buy new clothes for the children on their birthdays, Diwali, weddings, etc. from an annual budget of ₹3,000 per child. The Pandeys have three married sisters.

4Children attend free government school. The school provides books, uniform, and shoes. The older three children go to private coaching classes after school.

5The family took a loan for home improvement and purchase of a pre-owned car in 2016. They plan to repay the outstanding loan by December 2020.

6Mahesh handles all financial matters. Savings are deposited with UCO Bank. The family has approximately ₹70,000 in a fixed deposit scheme earning 6%p.a.

7 Based on profit of ₹3000 per day.

**\*Some names and identifying details have been changed to protect the privacy of individuals.**

Part 2 : [https://spontaneousorder.in/uncertain-lives-how-street-vendors-earn-spend-and-borrow-part-1-2/](https://spontaneousorder.in/uncertain-lives-how-street-vendors-earn-spend-and-borrow-part-1-2/)

* * *

**About Ananya Patel**

Ananya Patel is a pre-university student at Mallya Aditi International School, Bangalore. Her independent research explores why, despite responsible behaviour, hard work and enterprise, many households in India continue to experience scarcity in resources and opportunities. She is unafraid to ask strangers personal questions about their family, finances, and fears. She is a cooking enthusiast and her prized possession is a curated collection of tough-to-find spices and baking ingredients. She retails her homemade six-layer dip at a local eatery.

## Right to Education vs Right to Educate

Original: https://www.spontaneousorder.in/p/right-to-education-vs-right-to-educate

Author: Spontaneous Order

Published: 2019-03-07T09:15:20.000Z

Topics: right-to-education, private-schools, education-regulation, school-norms

> The Right to Education Act provides for universal elementary education but ironically limits private education providers who can make this possible. Section 19 states that schools established before the commencement of the Act need to meet norms and sta..

**Summary:**

The Right to Education Act (RTE) promises universal elementary education but paradoxically burdens small private schools—especially ~2000 unrecognized ones in Delhi serving ~400,000 poor children—with unattainable norms like 800 square yards of land, Rs 23,000 entry-level teacher salaries matching government scales, and mandatory playgrounds, risking their shutdown. Field visits to five recognized schools in Shahadara found none fully compliant: they paid bribes (e.g., Rs 80,000 for prior recognition), charged Rs 250/month fees from impoverished families, underpaid teachers via accounting fictions, and lacked playgrounds. Nine unrecognized schools averaged 100 square yards, built vertically to serve 15-20 students per class. From a classical-liberal viewpoint, these regulations stifle affordable private education alternatives to failing government schools. Reforms urged include relaxing land norms to ventilated rooms/open space scaled per child, tying teacher pay to school fees rather than government rates, replacing playground mandates with nearby parks and required physical education, and anti-bribe monitoring for recognition. Such changes would empower budget private schools to partner in achieving universal education.

**Key points:**

- RTE norms require 800 sq yards land, Rs 23,000 teacher salaries, and playgrounds, which ~2000 unrecognized Delhi schools cannot meet and even recognized ones evade via bribes/underpayment.
- Recognized schools charge Rs 250/month from poor families yet fake compliance; unrecognized average 100 sq yards with vertical builds for small classes.
- Relax land to adequate rooms/ventilation per child enrollment, base salaries on fees, mandate nearby parks/PE instead of playgrounds.
- Streamline recognition with monitoring to eliminate bribes, enabling private schools for universal education.

**By Sonjuhi Singh**

* * *

The Right to Education Act provides for universal elementary education but ironically limits private education providers who can make this possible. Section 19 states that schools established before the commencement of the Act need to meet norms and standards specified in the RTE schedule within three years or will otherwise shut down. As per the Act while the schools already recognised only have to meet the norms in the RTE schedule, the unrecognised schools additionally have to meet State norms too.  

Most of the unrecognised schools are located in unplanned colonies and teach till primary level. These schools are a cheap alternative for parents who cannot afford recognised schools and do not want to send their children to a government school. A conservative estimate of unrecognised schools in Delhi is about 2000 with 200 children each. According to the present Delhi state norms, the schools need to have 800 square yards of space and pay teachers’ salary at par with the government salary which is Rs 23,000 at the entry level post the Sixth Pay Commission. Additionally, the Right to Education Act specifies that every school should have a playground. These space and teacher salary requirements are hard for unrecognized schools to meet.  

Five recognised schools and nine unrecognised schools were visited in Shahadara to check these criteria. Out of the five recognised schools none met the present land criteria and could not afford to pay the stipulated teacher salary. The manager of one recognised school got recognition as his school met the earlier land norm of 200 square yards but still had to pay a bribe of Rs 80,000 at that time. While he charges a fee of Rs 250 per month per child, it is accounted for as Rs 500, so that he can account for teacher’s salary to be much more than what he actually pays them. The manager says “The people in this area are very poor and cannot afford to pay more, then how can I pay teachers the salary that the government wants me to?” According to an MCD official, most schools in Delhi are unable to pay the required teacher’s salary. Also, none of the recognised schools have a playground and said it was impossible to have one.     

The nine unrecognised schools visited varied in sizes ranging from 25 square yards to 300 square yards while the average was about 100 square yards. Since these schools lack horizontal space, they have been built vertically, sometimes extending to four floors. None of the unrecognised schools are able to meet the land criteria. There is a need for relaxing land norms at least in unplanned colonies. One option could be to give recognition if the school has adequate number of rooms with ventilation and some open space. But then again MCD requires the rooms to be 150 square feet calculated keeping in mind a maximum of 40 students per class as specified by previous state norms. Many of the unrecognised schools have 15‐20 students per class and it would make more sense to calculate the room size according to the space needed per child. Also, even if the government does not want teachers’ salary to be completely market driven, it should be decided on the basis of the fee the schools rather than unrealistic government salaries. Thirdly instead of asking schools to have a playground, the government should make sure that there is a park near every school and make it mandatory for the schools to provide physical education to their students. At the same time, there needs to be some monitoring mechanism so that those schools that qualify for recognition are able to get it without paying a heavy bribe. If only these concessions are given would the smaller budget private schools be able to work with the government in attaining universal elementary education.  

Read more: [https://spontaneousorder.in/right-to-education-promises-](https://spontaneousorder.in/right-to-education-promises-)

* * *

**About Sonjuhi Singh**

## SO Basically – Episode 01 | “Kisan Garib Kyu Hai?”

Original: https://www.spontaneousorder.in/p/so-basically-episode-01-kisan-garib-kyu-hai

Author: Spontaneous Order

Published: 2019-03-04T07:50:55.000Z

Topics: agriculture, farmers-poverty, pseudo-socialism, indian-liberalism

> Watch more: https://spontaneousorder.in/so-basically-episode-02-kisan-garib-kyu-hai-the-way-out/

**Summary:**

This post is a fragmentary promotional header for Episode 01 of the 'SO Basically' video/podcast series titled 'Kisan Garib Kyu Hai?' (Why are farmers poor?), featuring content from Spontaneous Order, which critiques pseudo-socialism in India's history from a classical-liberal perspective. It includes a link to Episode 02 and a brief 'About' description emphasizing liberal thinkers challenging false political values not rooted in India's independence movement.

**Key points:**

- Promotes Episode 01 exploring why Indian farmers remain poor from a classical-liberal viewpoint.

**By Spontaneous Order**

* * *

Watch more: [https://spontaneousorder.in/so-basically-episode-02-kisan-garib-kyu-hai-the-way-out/](https://spontaneousorder.in/so-basically-episode-02-kisan-garib-kyu-hai-the-way-out/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Uncertain Lives: How Street Vendors Earn, Spend and Borrow- Part 2

Original: https://www.spontaneousorder.in/p/uncertain-lives-how-street-vendors-earn-spend-and-borrow-part-1-2

Author: Spontaneous Order

Published: 2019-03-01T11:46:26.000Z

Topics: street-vendors, informal-economy, household-finances, urban-entrepreneurship

> Press-wallah: Mahavir and Sita The husband-wife team of Mahavir and Sita who are street vendors work in an ‘istri’ (ironing) stall in an upper-middle-class neighbourhood, East Delhi. They migrated from a village in Basti district in Uttar Pradesh. Sit

**Summary:**

Mahavir and Sita, a husband-wife team of street ironing vendors in East Delhi, exemplify resilient entrepreneurship in India's informal economy after migrating from rural Uttar Pradesh and leaving family garment work for self-employment 25 years ago. Operating from a prime pavement spot near Green View Apartments, they serve assigned buildings under an informal agreement among 18 vendors, preventing poaching and stabilizing rates—now ₹5 per garment (₹15 sarees, ₹10 bedsheets), up from 50 paise-₹2. They process 70-100 garments daily, seasonally varying with clothing needs, earning ₹15,000 monthly from ironing, supplemented by daughter Sandhya's ₹8,000 salary, ₹2,500 rent, and ₹1,100 FD interest, totaling ₹26,600 to match expenses like ₹2,250 coal, food, education (son's school ₹2,800, mobile course ₹1,250), and savings ₹12,400. Self-reliant, they bought equipment cheaply, financed a ₹4.5 lakh slum flat with savings and interest-free loans (repaid), store gold dowry safely, and resisted police 'hafta' bribes collectively. Despite educating college-grad daughters and high school son, Mahavir laments dowry demands (₹10 lakhs) and physical toll, vowing no son in the trade and shunning moneylenders. Their story underscores classical-liberal virtues of hard work, community self-governance, and prudent finances amid urban precarity.

**Key points:**

- Mahavir and Sita earn ₹15,000 monthly from ironing 70-100 garments daily at standardized rates through vendor self-regulation across 18 stalls serving 30 buildings.
- They balance a ₹26,600 monthly budget with family incomes including rent and FD interest, allocating for education, coal, food, and ₹12,400 savings while avoiding debt.
- Collectively, vendors resisted police bribes and divided territories informally, securing operations without RWA poaching.
- Despite daughters' college education and jobs, dowry pressures persist; parents save gold yearly but question the investment given marriage costs.
- Mahavir plans to prevent son from becoming a press-wallah due to the trade's physical demands and uncertain future.

**By Ananya Patel**

* * *

**Press-wallah: Mahavir and Sita**

The husband-wife team of Mahavir and Sita who are street vendors work in an ‘*istri*’ (ironing) stall in an upper-middle-class neighbourhood, East Delhi. They migrated from a village in Basti district in Uttar Pradesh. Sita attended primary school and did not recall the reason why she stopped going to school one day. All she remembers about school is combing her hair in braids, tying them up in a single loop with red ribbons every morning and wearing a crumpled uniform. Mahavir attended school until ninth grade and dropped out after being bullied for being too thin and physically weak.“The boys would taunt and call me ‘*agarbatti pehelwaan*’ (scrawny wrestler). Only if they could see how strong I am at 48,” he said patting his right arm.

Mahavir’s father and uncles had inherited a small sugarcane farm in the village. Selling their land to a wealthy, local farmer, his uncles and cousins moved to Delhi seeking better prospects. After marriage, Mahavir and Sita moved to Delhi to work in his cousins’ garment business in the city’s busy Sadar Bazaar. Mahavir’s day was spent unloading, unpacking, and sorting garments. Sita spent her day assisting the sales team. The couple felt they were not getting their dues, despite putting in long, exhausting hours. They soon left the cocoon of the extended family to set up an ‘*istri*’ stand in an emerging suburb of multi-storey residential complexes. All they needed was two tables with sturdy legs, two charcoal irons, and a perfect location. They bought the tables and the irons from a ‘*kabadi*’ shop (scrap and junk dealer) in Old Delhi. As one of the first *press-wallahs* to arrive, they had the advantage to pick a prime location in the neighbourhood. They found a perfect space on the pavement, against the boundary wall of ‘Green View Apartments’ protected by the shade of large trees with spread canopies. The nascent Residents Welfare Association (RWA) gave them a quick nod of approval. It has been their spot for the past 25 years.

Life has not changed much for them since then. Their day starts with sweeping the area, padding the two wooden tables with a few folded, thick cotton sheets to get a two-inch insulation. While Mahavirprepares the iron, cautiously feeding charcoal to a few already red pieces and blowing air to make sure the heat spreads evenly; Sita does her morning rounds collecting clothes from her regulars. She waits patiently at their doorstep while they bundle the clothes in old cloth. Most residents count the clothes; a few do not. As far as Sita can remember, she has not misplaced or lost a single garment. The client’s old cloth not only secures the clothes, making it easy for her to carry, but also works as a name tag. She knows that the clothes tied in the faded yellow saree with a green border belong to apartment 65, those in the old blue and grey bedsheet are from apartment 37. On most mornings, she does a minimum of eight pickups. More bundles trickle in during the day. Then there are those few, urgent requests, “*Jaldi, pehle mera karo*(Quickly, iron my clothes first)!” Sita, as if on cue, puts aside other clothes and shifts her attention to the all-important garment that the *memsahib* (upper-class lady) must wear in the next 10 minutes.

For hours on their feet, the duo work alongside in silence with matched precision and speed – their shoulders hunched over the soon-to-be tamed garment on their table. As the left hand flattens the wrinkles, the right takes control of the 5 kg hot iron, moving it up and down the fabric to remove every unwanted crease until it is all smooth. Periodically, they sprinkle water on the garment, which provokes the angry iron to hiss as it vanquishes the last of the stubborn wrinkles. A garment can take anywhere between 4and10 minutes. They are open all seven days a week from 10 am to late evening, with an hour’s break for lunch and a short nap. At 2 p.m., the tables double up as Sita’s bed while Mahavirgets a shuteye close by on the pavement.

Over the years, more buildings have come up in the neighbourhood. With more residents, both competition and earnings have increased. Mahavir estimates that the two ‘*istri*\-stands’ in the early days have increased to 18. Collectively, they provide services to 30 residential buildings. To ensure that competition stays fair and more ‘*press-wallahs*’ do not enter their territory, the 18 have agreed to cater to residents only in the buildings assigned to them through an informal agreement. That means Sita can collect clothes only from ‘Greenview Apartments’ and the left wing of ‘Shobhana Building’. Moreover, talks with the RWAs have paid off. Now, outside‘*press-wallahs*’ cannot enter the premises. This arrangement has secured both: Sita’s turf and the buildings from entry and exit of multiple vendors. With a low chance of poaching, rates for ironing clothes are similar across the18 vendors. However, as with everything else, these have increased over time. Twenty-five years ago, Mahavir recollects that they charged 50 paise for children’s and ladies’ clothes, 75 paise for men’s clothes and ₹2 for sarees. Now the rates are higher and less discriminatory: ₹5 for all garments except ₹15 for saree and ₹10 for bedsheets.

Mahavir estimates they do an average of 90 pieces a day in the summer, 100 during monsoons, and 70 in the winter season. He plainly explained how seasons and his business are intertwined, “In summer, people wear cotton clothes that need to be washed and ironed daily. In winter, people wear woolen clothes that do not need ironing. During monsoons, my iron works better on damp clothes than the lightweight ones used in homes. So, more families send their clothes to us.”However, the rains bring their own set of problems. “During monsoons, the coal sold in the shop is damp, and it’s tough to detect this by just touching it. The moisture increases its weight but reduces the warmth when it is burnt. Consequently, we have to spend more on coal during the rains.” Sita chimes in, “The traders are crooked. In winter, as coal prices increase, they intentionally add water to the coal. For the mere five kg that I buy every alternate day; I cannot argue much.”

I ask them whether local authorities harass them or not. “Policemen used to come more often earlier asking for ‘*hafta*’ (a weekly bribe). A few residents intervened to protect us. Also, collectively the ‘*press-wallahs*’ figured that if we pay bribe once, it will become a regular habit. So, we have stopped, and they have got the message.”

Mahavir and Sita have three children. Sandhya, 23 and Usha, 21 are unmarried, college-educated girls and Anil, their son is 16 and in high school. Sandhya is a librarian in a private school while Usha stays at home to cook and clean for the family. Occasionally, Usha does rebel and questions why she has to be the family’s housekeeper.

Mahavir educated his daughters despite his limited resources. He had hoped that a good education would help the girls find good husbands with stable jobs. “The problem is that a ‘good husband’ and his parents want a dowry of ₹10 lacs. Where will I get that kind of money for two marriages?” he laments. The parents acknowledge that their financial situation has improved since Sandhya started earning; yet sometimes, Mahavir still wonders whether delaying his daughters’ marriage and sending them to college was a wise decision. Despite these doubts, he is sure of two things- one, he will never borrow from money lenders or banks to pay for his daughters’ marriage. According to him, interest burden lasts longer than life itself and second, his son will not be a ‘*press-wallah*.’ “It is a tough life. Somedays the body hurts, yet, we cannot pause. There is little to show, despite spending my best years working in the sweltering sun and cold winters.”

I remind him that the residents endearingly refer to them as *Sita-Ram* (Hindu Gods). Isn’t that a reflection of their respect for their reliable ‘*press-wallah’*? He smiled shyly and said, “I am a ‘*chhota aadmi’*(an insignificant person). It is the resident’s affection and ‘*kripa*’ (generosity) that sustains my family.”Watching him, I wondered if the reverence earned was because of his calm demeanour or was Sita’s insight more accurate, “*Sabke liye* convenient *naam haina!* (It is a convenient name for all!)”

**Mahavirand Sita’smonthly income-expenditure account:**

**Expenditure** **Amount (₹)** **Income** **Amount (₹)** Coal (75kg@₹30/kg)1 2,250 Revenue from Ironing@₹500 per day 15,000 Food, gas 4,500 Sandhya’s salary5 8,000 Electricity, water, cable TV 500 Rent received6 2,500 Miscellaneous (clothes, toiletries, medicines, etc.) 2,500 Interest on fixed deposit at BoB4@6.6% 1,100 Anil’s school-related expenses2 (fees, books, uniform) 2,800     Fee for Anil’s mobile repair course2 1,250     Mobile phone bill (four prepaid plans)3 400     Savings4 12,400     **Total** **26,600**   **26,600**

1In the summer, Mahavir and Sita buy a bag of 5 kg of coal for ₹150 that lasts two days. The amount bought in monsoon and winter varies depending on the ‘dryness’ of coal. In winter, the price of coal can vary from ₹150 to ₹175 for a 5 kg bag.

2Anil attends an English medium private school. He has enrolled in an evening certificate course in mobile repair. On a monthly basis, the course fee is ₹1,250.

3The family has four prepaid plans. Mahavir and Sita share a phone as they are “always together”; the adult-children have their own phone.

4Savings are deposited with Bank of Baroda. They have ₹2 lacs in fixed deposits. In 2016, they invested in gold for the first time and bought jewelry worth ₹25,000, and in 2017, they bought gold worth ₹18,000. The jewelry is kept with a trusted resident of the building for safekeeping. They plan to continue buying gold each year and give as dowry to their daughters.

5It is Sandhya’s first job since graduating from college. She has been working for two years. She takes the metro(public rail transport) to work. Her monthly pass is paid for by the employer. Mahavir and Sita walk to work. Anil rides a bicycle to school.

6In 2007, the couple bought a two-room flat in a redeveloped slum for ₹4.5 lacs. Their family of five share a room and the other room has been rented out to a family of four members. They financed the purchase with personal savings of ₹2.5 lacs, interest-free loans of ₹1.5 lacs from a cousin and ₹50,000 from residents of the buildings, Greenview and Shobhana. Both loans have been paid back.

**\*Some names and identifying details have been changed to protect the privacy of individuals.**

[Read the first part here.](https://spontaneousorder.in/uncertain-lives-how-street-vendors-earn-spend-and-borrow-part-1/)

* * *

**About Ananya Patel**

Ananya Patel is a pre-university student at Mallya Aditi International School, Bangalore. Her independent research explores why, despite responsible behaviour, hard work and enterprise, many households in India continue to experience scarcity in resources and opportunities. She is unafraid to ask strangers personal questions about their family, finances, and fears. She is a cooking enthusiast and her prized possession is a curated collection of tough-to-find spices and baking ingredients. She retails her homemade six-layer dip at a local eatery.

## SO Musings: Rajaji on inter-community interaction

Original: https://www.spontaneousorder.in/p/so-musings-rajaji-on-inter-community-interaction

Author: Spontaneous Order

Published: 2019-02-27T09:17:10.000Z

Topics: indian-liberalism, inter-community-relations, caste-equality, citizenship

> India is unchangeably committed to the policy of making everyone within her borders find pride and joy in citizenship irrespective of caste, creed or race. No, one will suffer any disability by reason of the community to which he or she belongs. The day..

**Summary:**

In this excerpt from C. Rajagopalachari (Rajaji), a key Indian classical liberal, he asserts India's unwavering commitment to fostering pride and joy in citizenship for all, irrespective of caste, creed, or race, ensuring no one suffers disabilities due to their community. He declares the end of dynastic rule and domination by force, emphasizing that no territorial, racial, or religious community can thrive without the willing cooperation and full intercommunication of others. Rajaji urges the abandonment of communal and territorial isolationism, calling for the best talents in every community to serve the entire state rather than building walls around themselves. Communities must spread out to promote utmost intercommunication, aligning with a classical-liberal vision of voluntary cooperation, individual merit serving the common good, and rejection of group-based separatism in favor of a unified national polity. This perspective counters fragmentation, promoting a spontaneous order through open interaction and shared citizenship.

**Key points:**

- India must ensure equal citizenship pride and no disabilities based on caste, creed, or race.
- Dynastic rule and force-based domination are obsolete; communities thrive only through willing cooperation and intercommunication.
- Abandon communal and territorial isolationism to allow the best talents to serve the whole state.
- Communities should spread themselves out rather than build walls around themselves.

**By Spontaneous Order**

* * *

India is unchangeably committed to the policy of making everyone within her borders find pride and joy in citizenship irrespective of caste, creed or race. No, one will suffer any disability by reason of the community to which he or she belongs.

The days of dynastic rule or domination through force are gone in India. No territorial or racial or religious community can hope to thrive or maintain its happiness through force without the willing and full cooperation of other people and the utmost intercommunication. It is, therefore, necessary that all communal and territorial isolationism should be abandoned and the best talents in every community should seek to serve the whole state. Communities should spread themselves out rather than build walls around themselves.

*Access the full speech [here](http://indianliberals.in/admin/pdflanguage?id=614176776.pdf).*

*To read other writings by Rajaji, visit [Indian Liberals](http://indianliberals.in/), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

[Read more of SO Musings](https://spontaneousorder.in/jyotiba-phule/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Increase in MSP – How well does it address farmers’ distress?

Original: https://www.spontaneousorder.in/p/increase-in-msp-how-well-does-it-address-farmers-distress

Author: Spontaneous Order

Published: 2019-02-25T14:16:21.000Z

Topics: agriculture, minimum-support-price, cropping-distortions, income-support

> A proposal to increase Minimum Support Price (MSP) is generally perceived as a farmer-friendly measure. This sounds like a reasonable proposition to alleviate farmers’ distress, given that it sets a floor price to ensure that the returns on the farm pro

**Summary:**

Increasing Minimum Support Price (MSP) is popularly seen as a farmer-friendly safety net against price fluctuations, but it fails to address farmers' distress due to systemic flaws. Announced for 24 crops since the 1960s, MSP procurement operates effectively only for 2-3 major crops in states like Punjab and Haryana, leaving most farmers—especially in Bihar, West Bengal, and North-Eastern states—without benefits. This limited scope distorts cropping patterns, incentivizing surpluses in procured crops at the expense of pulses, oilseeds, fruits, and vegetables, leading to shortages, imports, and India's 103/119 ranking in the 2018 Global Hunger Index. Uniform national MSP ignores regional input cost variations, promoting water-intensive crops in Punjab over efficient producers like Bihar and West Bengal. Poor storage causes produce to rot, low farmer awareness (NITI Aayog: 81% aware, only 10% pre-sowing) limits uptake, and raising MSP above market prices crowds out private trade, risking market failure. From a classical-liberal view, MSP is a politically expedient distortion; reports like Ashok Dalwai Committee advocate robust procurement with private participation. Instead, direct income support like Telangana's Rythu Bandhu—crop-neutral per-acre subsidies letting markets guide production—better ensures incomes without distortions, proving politically viable too.

**Key points:**

- MSP procurement covers only 2-3 crops in select states like Punjab and Haryana, rendering it ineffective for most Indian farmers.
- Higher MSP for certain crops distorts production, causing shortages in pulses and horticulture, necessitating imports and harming nutritional diversity.
- Uniform national MSP ignores regional cost differences, leading to inefficient resource use like excessive groundwater depletion in Punjab.
- Low farmer awareness (only 10% know MSP before sowing) and poor storage undermine the policy's intent.
- Shift to direct income support schemes like Rythu Bandhu allows market-driven cropping while providing reliable farmer incomes.

**By Manasa Pidatala**

* * *

A proposal to increase Minimum Support Price (MSP) is generally perceived as a farmer-friendly measure. This sounds like a reasonable proposition to alleviate farmers’ distress, given that it sets a floor price to ensure that the returns on the farm produce do not fall below a certain level. It acts as a ‘support’ since it gives an assured minimum price that the government promises to pay for the produce if no one else in the market offers to purchase above this price. Thus, it not only provides an assured market for the farmer, but it also protects the farmer from the price fluctuations and acts as a safety net.

Let’s move beyond its face value and analyse- is this the solution to farmers’ woes? The origin of the policy on MSP dates back to 1960s in the wake of the green revolution to guarantee price realization for the farmers. The Government of India announced the MSP on the recommendation of Commission for Agricultural Cost and Prices for cereals, pulses, oilseeds, cotton, jute, and tobacco. The idea was to complement MSP with procurement and public distribution system, and that is where the divergence between proposition and reality begins.

MSP is announced by the Government of India (GoI) for 24 crops every year. However, the procurement mechanism is functional only for 2-3 major crops, making this pricing policy effectively non-existent for other crops in the first place. Even for these crops, which have an established procurement mechanism in place, the infrastructure exists only in some states like Punjab and Haryana and is either absent or inefficient in states like Bihar, West Bengal, and the North Eastern states. Thus the benefits of MSP are out of reach for a majority of farmers and it does not exercise a lot of influence on the actual market price.

Poor infrastructure and lack of pricing policy for the majority of the crops cause a distortion in cropping patterns. Offering a higher MSP for some crops incentivizes the farmer to produce surplus quantities of those crops. Since the resources are limited in this zero-sum game of agriculture, there would be insufficient production of some other crops. The government’s general response to this irregularity is to set higher MSP for another set of crops and this rebound effect keeps occurring. For example, in the recent pulses’ crisis, in spite of the demand for pulses in the market, there was inadequate production and consequent supply due to the preference of farmers towards higher MSP crops like cereals. Ultimately, the government had to resort to imports to meet these demands. Consequently, MSPs were increased for pulses, following which market prices crashed below MSPs.

Since MSPs are not offered for fruits and vegetables, the focus shifts from horticulture production due to a lack of incentives. The trend of tilting towards some crops alone impacts genetic diversity in the long run. India ranking 103 out of 119 countries in the [Global Hunger Index 2018](https://www.globalhungerindex.org/results/) is a clear indicator of nutritional deficiency and the need for diversification of crops.

Another flaw in the MSP model is that the GoI determines MSP as a single price for the crops across the nation. In a country like India with diverse agro-climatic zones, this is determined as an average of prices across the states and does not address the regional variations of input costs of crop production. Hence it is not equally profitable to all the regions.

Ashok Gulati and Gayathri Mohan in their paper ‘[Towards sustainable, productive and profitable agriculture:Case of Rice and Sugarcane](http://icrier.org/pdf/Working_Paper_358.pdf)’, point out that in spite of the farms in West Bengal and Bihar consuming 2-3 times less water than the farms in Punjab to produce the same quantity of rice, Punjab continues to grow paddy just because of government being an assured buyer and has good procurement operations. Similar is the case for sugarcane in Maharashtra with Fair and Remunerative Price. Therefore the policy hurts effective utilization of water resources, especially groundwater, eventually leading to unsustainable cropping patterns.

Despite its procurement commitments under MSP to protect the farmers and to maintain the buffer stocks, the government has failed to create a robust storage infrastructure. A case for better storage infrastructure is a whole other debate but look at it this way – the resources employed in producing the food grains rotting in government godowns could have been employed in a different crop grown as per demand in the market. Demand responsive supply could have fetched farmers remunerative prices or an imbalance thereof could have acted as a pointer to the farmer about lack of demand for that crop in the market, encouraging them to employ their resources on another crop in the next season.

Another noteworthy point about MSP is the lack of awareness among the farmers about its announcement. [NITI Aayog’s Evaluation Report](http://niti.gov.in/content/evaluation-report-efficacy-minimum-support-prices-msp-farmers) on Efficacy of MSPs points out that 81% of cultivators were aware of MSPs and out of them, only 10% knew about MSP before the sowing season. In states like Uttar Pradesh and Karnataka, none of the farmers knew about MSP before sowing season.

In the absence of all the above linkages in procurement, storage, and information dissemination, if we keep raising the MSPs above market prices, eventually private trade will recede since the government players like Cotton Corporation of India or NaFed lack the institutional capacity to meet the demands. Such artificial tinkering finally leads to market failure. The MSPs, which act as a trade-distorting measure, have been a major point of discord between India and other countries like the US and UK. [Ashok Dalwai Committee Report on Doubling the Farmers Income](http://farmer.gov.in/imagedefault/DFI/DFI%20Volume%204.pdf) suggests that the farmers would eventually gain better from a more robust system of procurement rather than an increase in MSPs. It also supports private participation in the procurement process.

Despite many such reports highlighting the inability of MSP in addressing agrarian distress and increasing the farmer’s income, the reason it keeps rising is that it is a powerful political tool. The perception that MSP benefits the farmers goes well with vote bank politics. In this context, it is noteworthy to mention the income support scheme for farmers- Rythu Bandhu by Telangana government. Under this scheme the farmers get a fixed per-acre subsidy irrespective of the crop, and the markets decide which crop is to be grown. Direct income support works more efficiently than MSP in ensuring good prices while not hampering the markets, and also works as an effective political tool as is evident in the results of Telangana elections. Maybe the time has come to shift to income support as evidence shows that this could be one of the rare policy solutions that make both economic and political sense.  

Read more: [https://spontaneousorder.in/its-not-1950-india-needs-an-urgent-policy-overhaul-in-agriculture/](https://spontaneousorder.in/its-not-1950-india-needs-an-urgent-policy-overhaul-in-agriculture/)

* * *

**About Manasa Pidatala**

Manasa is a Senior Associate at the Centre for Civil Society. She speaks on Agricultural Policy challenges in India at our epolicy program.

## Uncertain Lives: How Street Vendors Earn, Spend and Borrow- Part 1

Original: https://www.spontaneousorder.in/p/uncertain-lives-how-street-vendors-earn-spend-and-borrow-part-1

Author: Spontaneous Order

Published: 2019-02-22T10:16:17.000Z

Topics: street-vendors, informal-economy, moneylending, urban-migration

> Mochi: Kishore Kainth Kishore Kainth, 28-years-old, is a third-generation cobbler. He studied until 8th grade in a government school in Harla village in Nawadah district of Bihar. Kishore took to the profession at age sixteen to support his widowed moth..

**Summary:**

Kishore Kainth, a 28-year-old third-generation cobbler from Bihar, migrated to Delhi in 2013 after usurious moneylending at 2% monthly simple interest trapped him in debt following his wife's illness; he alleges receiving only ₹20,000 of a ₹35,000 loan and paying over ₹50,000 in interest without principal repayment. Earning an average ₹200 daily from shoe repairs (₹8 for slippers, ₹15 for shoes, ₹25 for soles) over 10-hour shifts seven days a week on a free street spot he claimed after another vendor left, Kishore meticulously arranges his tools—aidan, tota, pincers, and more—under a makeshift plastic roof, though authorities forced removal of religious pictures. Living frugally in a shared ₹600/month slum room, he sweeps his spot daily, eats cheaply (eight chappatis with ₹6 channa-aloo plates, ₹4 tea), avoids new clothes, sends irregular cash home via travelers for his family's needs and ₹700 monthly loan interest, and maintains two prepaid phones. Despite no further borrowing since 2012 and considering himself 'blessed,' Kishore despairs over his sons' future, willing to do anything to escape the cobbler cycle but lacking guidance. This portrait from Ananya Patel's research underscores how diligent street vendors' enterprise yields meager stability amid harassment, debt, and scarcity.

**Key points:**

- Kishore migrated to Delhi for better earnings (₹8+ per repair vs. ₹2-4 in village) after moneylender exploitation left him paying ₹50,000+ interest on ₹35,000 loan.
- He earns ₹200 average daily from repairs and polishing, boosted by school uniform demands, but much time is spent waiting for customers.
- Monthly expenses are tightly controlled: ₹600 shared rent, cheap food, remittances home covering family and ₹700 loan interest, with no personal clothes or shoes bought in two years.
- Kishore hopes to secure better opportunities for his two sons, preventing them from learning the cobbler trade, but sees no path forward.

**By Ananya Patel**

* * *

**Mochi: Kishore Kainth**  

Kishore Kainth, 28-years-old, is a third-generation cobbler. He studied until 8th grade in a government school in Harla village in Nawadah district of Bihar. Kishore took to the profession at age sixteen to support his widowed mother after they were driven out of their home by his older step-brothers. He worked as a daily wage landless labourer on farms before returning to his family profession. Through his childhood, he assisted other men in his family as they prepared the leather, stitched new shoes, and repaired old ones to give them a new lease on life. Therefore, being a cobbler came easily to him. He made anywhere between ₹20 and ₹50 a day. However, after his marriage and the birth of two children, the daily earnings were not enough to support his family. In 2012, his wife fell seriously ill after the birth of their second son. He had no health insurance and needed money. Kishore took a ₹35,000 loan from a local moneylender at 2% simple interest per month. After signing the documents, he alleges that he was given only ₹20,000. He tried to reason with the lender, but the conversations turned ugly. The regular violent threats by goons demanding the monthly interest of ₹700 were too much for him to bear. He found support from folks in his community who had migrated to the cities and made annual visits home. Their warning resonated with him. “You will work like a donkey here and become a donkey.” And the simple math made sense. “In Harla, I got ₹2 to mend a sandal and ₹4 for a shoe. In a city, I could get ₹8 or more.” In late 2013, leaving behind his wife and two young children in the village, he took a train to Delhi with few clothes and his wooden shoe-toolbox. He lives with five men from his village, all cobblers. They share a tiny single room in a slum, and his part of the current rent is ₹600. This has been his home since then.  

In the initial days, he would start his day at 9 am, carrying his tools in the wooden box, all weighing nearly 8 kg, in search of customers. He would station himself outside a local school, at a bus stand, near a tea stall, or outside a popular restaurant waiting for customers until he was shooed away. Eventually, he found a permanent spot on a busy main street of a ‘commercialized’ residential neighbourhood. A cobbler who usually sat there had gone home to his village and never returned. Kishore took the spot that was “meant to be” his. This has been his “post” for the past three years. He pays no rent for the space on which he makes a seat of two mats for himself; over time, his small wooden toolbox was replaced by a larger metal chest. He has created a roof from remnants of a plastic sheet supported by wires and tree branches. It protects him from the sun and rain during his 10-hour shift all seven days a week.  

He described to me his typical day as follows. Every morning he starts by sweeping the area and sprinkling water to settle the dust. He unlocks the metal box, and creatively arranges the ‘*aidan’* (cast iron shoe anvil), ‘*tota’* (pliers), ‘*pakkad’* (pincers), ‘*kenchi’* (scissors), ‘*hathodi’* (hammer), ‘*sooaa’* (awl), ‘*sui’* (needles), ‘*gond’* (glue), ‘*kattar’* (shears to cut leather), ‘*keel’* (small nails), ‘*chamda’* (leather pieces), brushes, polishes, and some rags on his workstation. Shoelaces, ‘*dora’* (strong, waxed thread), and rubber soles are hung on the back wall for easy access. Then he lights an incense stick and says his prayers in silence. With sad resignation in his voice, he told me that the wall was once far more decorative and cheerful. “I had pictures of my Gods on the wall. I would offer flowers and water every morning. Then ‘they’ came and told me to take the frames down. Apparently, God and shoes don’t go together.” I asked him who ‘they’ were. He simply shrugged his shoulders.  

Spending time at his ‘shop’, I realized most of his day passed waiting for customers. On an average day, he made ₹200, charging ₹8 for repairing slippers, ₹15 for mending shoes, ₹25 for changing soles, ₹30 or more for fixing canvas bags, and ₹75 for patching a leather bag. The rates were higher for fancy footwear as “they need more care.” Kishore’s bonanza came on weekends when he polished at least 10 pairs of black leather school shoes for ₹15 each. He opined, “Times have changed. Schools are strict about proper uniform and expect students to wear polished shoes. That’s good for my business. But at the same time, people do not want to bother getting shoes repaired. They do not mind throwing away a bruised pair and buying a new one.”  

Despite the harsh circumstances, Kishore considered himself blessed. Strangely, he found solace in the fact that since 2012 he had never felt the need to borrow again from a moneylender. Kishore did not foresee the possibility of paying back the loan of ₹35,000. He estimated that he had paid more than ₹50,000 as interest on the principal. However, his main worries were centered on the future of his two sons. His parting remarks to me were despondent with a tinge of suppressed hope. He said, “Things will probably never change. My children will not see a better life than mine. Luckily, they will not be cobblers, as they are not with me to watch and learn the craft. I am willing to do whatever it takes to improve their life. If only, somebody would show me the way.”  

**Kishore Kainth’s monthly income-expenditure account:**

[

![](https://substackcdn.com/image/fetch/$s_!rC3K!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa062a546-0f33-4e3a-a3c0-ead99939683a_653x291.png)



](https://substackcdn.com/image/fetch/$s_!rC3K!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa062a546-0f33-4e3a-a3c0-ead99939683a_653x291.png)

1MCD is Municipal Corporation of Delhi. It is responsible for maintaining clean streets and providing civic amenities in Delhi.  

2Kishore makes eight chappatis in the morning. He eats two in the morning with tomato-onion ‘churi’ and eats three chappatis with ‘channa-aloo’ gravy (bought from a roadside stand) for lunch and dinner. A plate of channa-aloo gravy costs him ₹6.00 each. Kishore drinks tea in the morning and late afternoon. Each is sold in a small paper cup for ₹4.  

3He has not bought clothes or shoes for himself in the past two years.  

4He sends cash home to his wife every couple months with any known, reliable acquaintance traveling from Delhi to Nawadah district, Bihar. His wife uses the money to run the house, provide for their two sons aged 8 and 6 years and pay interest of ₹700 on the outstanding loan. She lives rent-free with her parents. The boys attend a government school where tuition, books, and uniform are free.  

5He has two pre-paid mobile phone plans, one for his wife and the other for himself.  

6Each year, he spends 30 to 45 days in his village. His savings are drawn down during this period. To ‘fund his vacation’ he does odd jobs in the village. Occasionally, Kishore borrows from and lends to his roommates on interest-free, short-term basis.  

**\*Name and identifying details have been changed to protect the privacy of the individual.**

Read more: [https://spontaneousorder.in/uncertain-lives-how-street-vendors-earn-spend-and-borrow-part-3/](https://spontaneousorder.in/uncertain-lives-how-street-vendors-earn-spend-and-borrow-part-3/)  

* * *

**About Ananya Patel**

Ananya Patel is a pre-university student at Mallya Aditi International School, Bangalore. Her independent research explores why, despite responsible behaviour, hard work and enterprise, many households in India continue to experience scarcity in resources and opportunities. She is unafraid to ask strangers personal questions about their family, finances, and fears. She is a cooking enthusiast and her prized possession is a curated collection of tough-to-find spices and baking ingredients. She retails her homemade six-layer dip at a local eatery.

## Chai ki charcha

Original: https://www.spontaneousorder.in/p/chai-pe-charcha

Author: Spontaneous Order

Published: 2019-02-21T10:42:10.000Z

Topics: tea-industry, economic-regulation, government-intervention, market-reform

> Ever wondered the path that your beloved chai charts before reaching your kitchens or you roadside chaiwallah? Are you thinking about beautiful and lush green mountains with people plucking tea leaves? Makes for quite a scenic and happy start to a refre..

**Summary:**

The Tea Act of 1953 and the Tea Board established in 1954 have failed to adapt to modern market realities, stifling India's tea industry despite its scale: 1250.49 million kg produced in 2016-17, second globally, 78% domestic consumption, and employing 3.5 million as the second-largest employer. Ageing bushes, WTO-driven price stagnation at Rs 125-132/kg, and rising costs have eroded competitiveness. Section 16E grants the Centre unchecked power to seize tea gardens without investigation, creating legal uncertainties over assets and liabilities. The Board's government-appointed composition excludes industry associations and laborers, leading to non-transparent audits and ineffective subsidies, as per CAG's 2011 report. Small growers, contributing 35% of production, lack fair pricing protections. The 2014 Law Commission report urges amendments: remove outdated export controls post-1956 International Tea Agreement, reform Board for stakeholder representation and expertise, and prioritize small growers. From a classical-liberal view, the Act's flaws—unaccountable powers and government interference—demand reconsideration to foster market-driven competitiveness and reduce central overreach.

**Key points:**

- India's Tea Act 1953 enables unchecked government seizure of tea gardens under Section 16E, causing legal hassles and uncertainty.
- The Tea Board's government-nominated composition lacks industry and labor representation, resulting in ineffective subsidies and poor research per CAG 2011 audit.
- WTO agreements and ageing bushes have stagnated tea prices at Rs 125-132/kg, undermining global competitiveness.
- Law Commission 2014 recommends amending the Act to eliminate export controls, diversify Board membership, and protect small growers (35% of production).
- Reform the Tea Act to curb Board powers, enhance accountability, and align with market demands for a competitive industry.

**By Sunaina Mathur**

* * *

Ever wondered the path that your beloved chai charts before reaching your kitchens or you roadside chaiwallah? Are you thinking about beautiful and lush green mountains with people plucking tea leaves? Makes for quite a scenic and happy start to a refreshing beverage, doesn’t it? Let me introduce you to the cobwebbed files and dusty court case files.

The central legislation regulating the tea industry in India is the Tea Act of 1953, which came into effect from 1st April 1954. In 2016-17 alone India produced a record [1250.49 Million Kilograms](http://pib.nic.in/newsite/PrintRelease.aspx?relid=163355) of Tea making it a valuable source of foreign exchange revenues. According to the Food and Agriculture Organisation (FAO), India was the second largest producer of tea in the world, about 78% of which is consumed domestically. Another factor that makes this industry indispensable to the country is that the industry employs over 3.5 million people, making it the second largest employer in India.  

The Tea Act was formulated to regulate the Indian tea industry in accordance with relevant international agreements and to help develop the industry, increase production and marketing of the commodity. The Tea Board was established in 1954 as per the provisions of the Act in 1953 to govern the overall development of the industry in India. Its functions, as defined under Section 10 of the Tea Act include i) increasing production and productivity of tea plantations; ii) improving quality of tea, and promoting co-operative efforts among others.  

In recent years, Indian tea industry has become less competitive globally due to ageing tea bushes, which result in a decline in quality and productivity, increasing the cost of production of tea in India. In addition to this, the free trade agreement of the World Trade Organisation (WTO), has led to the price downturn of India’s tea in the world market. The tea market is no longer lucrative for producers as it once was as prices have stagnated in the Rs 125-132/kg range over the past five years.  

A major loophole exists in the Section 16E of the Act which states that the centre can authorise any entity to take over control of the tea gardens without investigation, resulting in various legal hassles for the Tea  Board. Besides giving a lot of power to the Board, the section is also unclear as to what happens to assets and liabilities of the tea gardens. There is little feasibility of the said section, with respect to taking charge of the management of tea gardens.

Another critique of the Act is the composition of the Board, which is chosen by the government and has no representatives of industry associations or labourers.  The Comptroller and Auditor General’s (CAG) performance audit in 2011 highlighted the weak and ‘non-transparent’ internal audits and inspections of the Board. The report also talked about the ineffectiveness of subsidy schemes and poor research which didn’t bear any fruits.

Some of these concerns have been addressed in the 159th Report of the Law Commission released in 2014, which has recommended amendment of the Tea Act, 1953. Some of the recommendations include i) Export management has been taken out of the Board’s given the expiration of the International Tea Agreement in 1956, rendering export quotas useless. ii) Changes in the composition of the board to ensure expertise, stakeholder representation and transparency. iii) Taking into cognisance the interests of small scale growers, who contribute around 35% of tea production, and ensuring a just price for their produce.  

There remain various concerns regarding the unchecked powers of the Tea Board and a lack of accountability provisions. Moreover, since the Board is constituted by the Central Government, there is unrestricted interference in the tea industry. Given these flaws, the Act is in desperate need of reconsideration in line with the changing demands of the market and to make India’s tea more competitive globally.  

* * *

**About Sunaina Mathur**

Sunaina holds a Bachelor of Arts in Economics from Fergusson College, Pune. She has previously interned with the National Human Rights Commission(NHRC), the Government of Andhra Pradesh and has represented India at the UN for the Merit360 programme. Her love for languages and poetry drove her to learn French and Russian Languages, and she hopes to read her favourite book ‘War and Peace’ in Russian someday.

## SO Musings: The Struggling Sectors

Original: https://www.spontaneousorder.in/p/so-musings-the-struggling-sectors

Author: Spontaneous Order

Published: 2019-02-20T09:20:58.000Z

Topics: economic-planning, private-enterprise, public-sector, indian-liberalism

> “ECONOMIC Planning,” wrote Barbara Wooten “does not mean the death warrant of all private enterprise nor does it mean the passport to political dictatorship.” The plight of the private sector today is well known. Public sector and private sector a

**Summary:**

This post presents a fragmentary 1959 excerpt from The Indian Libertarian, quoting Barbara Wootten that economic planning neither destroys private enterprise nor leads to dictatorship, yet laments the private sector's plight in India amid public sector favoritism. The private sector faces 'many-sided oppressions' and lacks scope for individual initiative, while the public sector receives indulgent support. As a classical-liberal critique, it underscores barriers to private enterprise expansion under prevailing policies. Full document linked; post promotes Indian Liberals archive preserving such voices against pseudo-socialism.

**Key points:**

- Private sector in 1950s India suffered oppressions limiting individual initiative and enterprise.
- Public sector enjoyed preferential 'motherly care' contrasting with private sector struggles.
- Economic planning critiqued for failing to enable full private enterprise scope.

**By Spontaneous Order**

* * *

“ECONOMIC Planning,” wrote Barbara Wooten “does not mean the death warrant of all private enterprise nor does it mean the passport to political dictatorship.” The plight of the private sector today is well known. Public sector and private sector are compared and contrasted in regard to their performances though the former is spoon fed and luxuriously brought up with motherly care and attention, and the latter laid at the mercy of many-sided oppressions. Individual initiative and private enterprise is not given the fullest scope to expand and enlarge.

*Access the full document [here](http://indianliberals.in/admin/pdflanguage?id=705993691.pdf).*

*First Published in The Indian Libertarian, August 1959, p.8–24*

*Other editions of the Indian Libertarian can be accessed at [Indian Liberals](http://indianliberals.in), an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Explained: What is Universal Basic Income?

Original: https://www.spontaneousorder.in/p/explained-what-is-universal-basic-income

Author: Spontaneous Order

Published: 2019-02-15T10:36:40.000Z

Topics: universal-basic-income, poverty-alleviation, welfare-reform, economic-policy

> In the 2016-2017 Economic Survey of India, the then Chief Economic Advisor, Arvind Subramanian had floated the idea of a possible Universal Basic Income (UBI) in the near future. In fact, the survey had an entire chapter dedicated to it titled “Universa

**Summary:**

The post explains Universal Basic Income (UBI) as a classical-liberal inspired alternative to India's inefficient, leaky welfare schemes like PDS (40% beneficiaries miss out) and MGNREGS (65% non-receipt), proposing universal, unconditional direct cash transfers to combat poverty affecting 22% of the population (second largest globally after Nigeria). Drawing from the 2016-2017 Economic Survey, it highlights UBI's potential to meet basic needs, empower the poor by enabling job choices away from hazardous work, act as insurance against shocks (50% rural households affected), and address future automation displacing 15-30% of workforce. Experiments in Kenya, Canada, India (tribal villages: 73% debt reduction, women empowerment), and others show improved food security, health, education, cognitive function, and no labor supply drop or rise in 'temptation goods'. Affordability is key: 1.6% GDP to halve poverty to 9%, funded by reallocating 5% GDP from targeted schemes that poorly serve the poorest districts. Countering moral hazard fears, evidence from Switzerland referendum critiques and global studies supports feasibility. Rahul Gandhi's 2019 minimum income promise warrants scrutiny on targeting and delivery. The way forward: more Indian pilots to tailor UBI amid socio-economic inequalities, prioritizing efficiency over paternalism.

**Key points:**

- UBI reduces poverty by providing direct cash to all, bypassing inefficient schemes where 40% of PDS and 65% of MGNREGS benefits fail to reach targets.
- Experiments in Kenya, Canada, and Indian villages demonstrate UBI boosts health, education, empowerment, and farm investments without cutting labor supply.
- UBI costs 1.6% of GDP to cut India's poverty from 22% to 9%, fundable by reallocating from 5% GDP welfare and middle-class subsidies.
- Myths of increased vices or laziness are debunked by meta-analyses and Economic Survey data showing opposite effects.

**By Spontaneous Order**

* * *

In the 2016-2017 Economic Survey of India, the then Chief Economic Advisor, Arvind Subramanian had floated the idea of a possible Universal Basic Income (UBI) in the near future. In fact, the survey had an entire chapter dedicated to it titled “Universal Basic Income: A Conversation With and Within the Mahatma”. In fact, even as recently as January 2019, the Centre had been mulling [some variant of UBI](https://www.cnbctv18.com/agriculture/centre-may-implement-universal-basic-income-to-address-farmers-woes-1856831.htm) in lieu of the heavily contested farm loan waivers. On January 29, 2019, Rahul Gandhi [promised](https://www.timesnownews.com/india/article/rahul-gandhi-what-is-universal-basic-income-and-which-countries-have-implemented-it/355743) a minimum income guarantee for all poor families should Congress come to power in 2019.

The clamour for and discussions around UBI are not limited to India. It is being actively considered in, and even piloted in [other countries](https://basicincome.org/news/2018/07/current-ubi-experiments-an-update-for-july-2018/) including USA, Finland, Canada, Switzerland and Kenya. UBI, despite general populace’s limited knowledge of it, is an immensely important topic that has the potential of touching all political, economic and technological discussions prevalent in the world today.

#### **What is UBI?**

At the heart of it, UBI is a programme in which every citizen of a country, state or region is given a fixed monthly income free of cost, that is, without the expectation of repayment or enrolment from the beneficiary. The amount disbursed is deemed enough to cover a person’s basic expenses.

UBI is not a new concept. In fact, it was first implemented as a wage-supplement system called the Speenhamland system in 1795 in Speemhamland, England. Since then, it has found advocates in many philosophers, economists and influential personalities such as [Thomas Paine](https://basicincome.org/news/2017/07/history-ubi-hunter-gatherers-21st-century/), Martin Luther King, Richard Nixon, [Bill Gates](https://www.industryleadersmagazine.com/billionaire-entrepreneurs-who-support-universal-basic-income/), Richard Nixon, Elon Musk, Mark Zuckerberg, and among many others.

#### **What does UBI aim to do?**

As an economic and social scheme, UBI aims to reduce poverty, and improve working conditions of the economically weaker sections of the society.

Theoretically, for UBI to be successful in its implementation, it needs to be universal, unconditional, and should involve direct transfers from the government to the recipient citizen. Universal means that UBI should ideally not cover a small section of society, because identifying and targeting a subset is [inefficient and ineffective](https://www.epw.in/journal/2003/45/discussion/identification-bpl-households-poverty-alleviation-programmes.html) as an anti-poverty measure. Unconditional implies that every citizen, regardless of their employment status or [their economic means](http://oxfordre.com/politics/view/10.1093/acrefore/9780190228637.001.0001/acrefore-9780190228637-e-116#), gender or occupation would get the benefits of UBI without having to pay tax on it. Finally, direct transfers are crucial to ensure that the delivery chain remains fool proof and does not develop leaks due to operational or bureaucratic reasons.

#### **How does UBI help?**

Poverty is the root cause of many problems in India — from rampant illiteracy to appalling healthcare to economic and social exploitation in an inequitable world. Most theories of justice propound that a society that is unable to provide basic necessities to all its citizens fails the test of justice. Currently, about [22% of India’s population](https://www.financialexpress.com/economy/tendulkar-poverty-line-gets-niti-aayog-panels-support/230686/) lives in poverty, and the country houses about 5% of the world’s extreme poor. After Nigeria, India is [home](https://www.washingtonpost.com/news/worldviews/wp/2018/07/10/india-is-no-longer-home-to-the-largest-number-of-poor-people-in-the-world-nigeria-is/?noredirect=on&utm_term=.b12af5a84a19) to the largest population of poverty-stricken people in the world.

-   **Meets basic living needs of everybody**
    

A Universal Basic Income will serve to reduce poverty in India. Proponents of UBI argue that as UBI ensures that everybody’s basic needs are met, it improves the standard of living across different parameters.  For the poor and unemployed, a Universal Basic Income would serve as the only means of income. This guaranteed minimum income would help the beneficiaries cater to their basic needs of food, clothing and shelter.

It also promotes liberty and empowerment within the currently impoverished masses, and provides more choices in terms of employment. The importance of this freedom of choice cannot be overstated for the desperate person stuck in a job with high moral or health hazards. A guaranteed monthly income can help them look for better, safer and more fulfilling jobs.

-   **Positive domino effect on other aspects of life**
    

Elimination of poverty eliminates the daily fight for survival, and this opens up resources for other important aspects of life such as education and healthcare. This leads to better psychological well-being as is evidenced from [an experiment](https://academic.oup.com/qje/article/131/4/1973/2468874#84614767) in Kenya. Between 20111 and 2013, an NGO in Kenya gave out Unconditional Cash Transfers (UCTs) to random groups of households in Kenya. The experiment resulted in a significantly higher food security index, investment in durables such as furniture and metal roofs, increase in psychological well-being, and an increase in female empowerment with largely beneficial tangential effects. Almost all major aspects of the participants’ lives such as food security, health, education, and women empowerment improved because of a guaranteed income.

A Guaranteed Annual Income [experiment](https://www.utpjournals.press/doi/full/10.3138/cpp.37.3.283) conducted in the small town of Dauphin, Canada, reported significant reduction in healthcare costs with marked reduction in hospitalisations for accidents and injuries, and in mental health diagnoses. A [short experiment](https://www.vox.com/2014/7/23/5925041/guaranteed-income-basic-poverty-gobry-labor-supply) run by the American government in New Jersey reported an increase in the odds of a child completing high school.

Another[important study](https://scholar.harvard.edu/files/sendhil/files/976.full_.pdf) has proven that poverty impedes cognitive function. As an example, sugarcane farmers in Tamil Nadu were reported to have had lower cognitive IQ scores before harvest in a debt-ridden, cash-strapped environment, as compared to a post-harvest environment with little loans and more cash flow.

-   **Acts as an insurance for the underprivileged**
    

UBI will also serve as an insurance against shocks in income due to inclement weather or other natural disasters. According to the[2016-2017 Economic Survey of India](https://www.indiabudget.gov.in/es2016-17/echap09.pdf), more than 50% of Indian rural households face at least one form of shock such as crop loss, water borne diseases, loss of property, cyclones, drought, etc. 60% of these households compensate for these losses from their personal savings, with little to no help from the government or institutional insurance.

-   **Eliminates economic dependence on hazardous jobs**
    

Poverty can cause desperation amongst the poor for money, thereby causing them to take up daily wage jobs that are harmful to their health and lives. [An experiment in tribal villages in north India](http://socialprotection-humanrights.org/wp-content/uploads/2016/04/Indias-Basic-Income-Experiment-PP21.pdf) reported that UBI enabled daily wage labourers to shift to agricultural and allied activities. In fact, the surplus income was used to scale up operations and capital investments in farming. The report also found that as a result of UBI, 60% of women had more influence in household matters, and there was a 73% reduction in debts.

-   **Basic income in a possibly automated future**
    

Although this reason does not align with the social equity school of thought that we have discussed so far, a possible future in which most jobs are automated is a major reason to consider UBI. A recent[McKinsey study](https://www.mckinsey.com/~/media/mckinsey/featured%20insights/Future%20of%20Organizations/What%20the%20future%20of%20work%20will%20mean%20for%20jobs%20skills%20and%20wages/MGI-Jobs-Lost-Jobs-Gained-Report-December-6-2017.ashx)estimated that 50% of the current work activities can be automated, and that 6 out of every 10 occupations can be automated to at least 30%. This will result in 15% to 30% of the workforce getting displaced and being deemed redundant.

#### **Is UBI** ***that*** **smooth sailing?**

In short, no. If it were, it would have been implemented everywhere already. An economic initiativeas big and as disruptive as the UBI, is bound to involve trade-offs.

-   **The moral hazard of a reduction in the labour force**
    

The fear of UBI is rooted in the age-old belief that only those who work hard should be rewarded while the lazy should be punished. It is assumed that a guaranteed fixed income will incentivise the labour force to quit their current jobs and stop working for their living.

In 2016, in a referendum held in Switzerland, [78% voters voted against](https://www.theguardian.com/world/2016/jun/05/swiss-vote-give-basic-income-every-adult-child-marxist-dream) a proposed basic income scheme. The scheme was called a “Marxist dream”. An economics professor, in his criticism of the proposal, said, “If you pay people to do nothing, they will do nothing”.

Although this might sound true in theory, some noted experiments and studies have proven otherwise. A [study](https://economics.mit.edu/files/12488) in Honduras, Morocco, Mexico, Philippines, Indonesia and Nicaragua showed insignificant drop in the labour supply, and a [recent experiment in Alaska](https://qz.com/1205591/a-universal-basic-income-experiment-in-alaska-shows-employment-didnt-drop/) reinforced this result. Although these experiments can’t be considered representative of every country and region in the world, it gives us enough confidence to conduct similar experiments on a larger scale and seriously consider implementing UBI as a policy in the future.

-   **Additional income will be spent on alcohol and other vices**
    

Another common perception is that when the poor get more money, they splurge it on alcohol and tobacco. Economists call this category of products “temptation goods”. In fact, a [meta analysis](https://mirror.explodie.org/10.1086@689575.pdf) of around 30 different research studies has shown this perception to be false. Across the world, an increase in per capita income has resulted in a fall of consumption of temptation goods. This result is even supported in [Section IX of the 2016-17 Economic Survey](https://www.indiabudget.gov.in/es2016-17/echap09.pdf) of India. Again, even though the sample set cannot be considered representative of the entire world, there is enough evidence in these studies to suggest that a presumed natural inclination towards vices cannot be correlated with an increase in income.

-   **UBI will prove to be too expensive**
    

When we speak of the implementation of any economic policy, one of the most important criteria is always the cost. The [2016-2017 Economic Survey](https://www.indiabudget.gov.in/es2016-17/echap09.pdf)proposed that this cost can be covered by redistributing resources spent on existing inefficient social schemes.

Currently 22% people in India live in poverty. To bring it down to 9% through UBI, it is estimated that the cost would amount to about 1.6% of the GDP. In another approach, if the UBI were to initially only target women, the cost would fall to 0.85%. As of now, India allocates about 5% of its GDP to its litany of welfare schemes targeted at different socio-economic classes and occupations.

The survey talks about how inefficient each of these schemes is currently, and that the poorest districts in the country receive the least amount of benefit. This inefficiency can be attributed to bureaucracy, and the absence of a direct transfer system. A couple of striking examples of inefficient schemes are the Public Distribution System (PDS) and the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). About 40% of the targeted PDS beneficiaries and 65% of MGNREGS’ do not receive the remuneration due to them. Furthermore, about 1% of the GDP is devoted to subsidies for middle class schemes and welfare which do not directly benefit the extreme poor. In this scenario, it appears but logical that adequate funds from these existing schemes should be reallocated for direct transfers under UBI.

[

![Graph showing the intersection between percentage of population, percentage of GDP and UBI in INR per capita per year.](https://qrius.com/wp-content/uploads/2019/01/Screenshot-2019-01-31-at-3.02.51-PM.png "Graph showing the intersection between percentage of population, percentage of GDP and UBI in INR per capita per year.")



](https://qrius.com/wp-content/uploads/2019/01/Screenshot-2019-01-31-at-3.02.51-PM.png)

**Implications of the UBI and its effect on poverty**. The more we invest in UBI, the greater impact it would have on alleviating poverty. Reduction to 9% poverty through UBI costs 1.6% of GDP. Credit: [2016-2017 Economic Survey of India](https://www.indiabudget.gov.in/es2016-17/echap09.pdf)

#### **What does Rahul Gandhi’s promise of minimum guaranteed income mean?**

To categorise this proposed scheme as UBI would be premature without knowing details about the target audience, distribution channels, and financing sources. If the Congress is voted to power in 2019 and they implement a form of UBI, it would be crucial to understand how they identify the poor, how they ensure adequate money gets distributed to the rightful beneficiaries, whether the employment status of beneficiaries would be considered, and how they would  this scheme.

As of now, we can only speculate about these details. It is evident that even if we do not implement a scheme right away, we must invest the time and effort to conduct more pilot projects and figure out the best variant of UBI for India that can be implemented in the future.

#### **The way forward**

UBI is by no means an easy concept to understand. It is even more difficult to get a majority of the concerned stakeholders on board with its implementation. At a philosophical level, it goes against the seminal tenet we have been taught since childhood — hard work equals reward, and laziness equals stagnation and death. However, that lesson does not take into account existing socio-economic inequalities that are compounded with every successive generation.

UBI is a radically new concept that seems to be the need of the hour. Depending on how it is implemented, we will either see a meteoric rise in world happiness, or a horrible crash of a dream that dared to soar too high.

* * *

*Aditya Mani is a writing analyst at Qrius.*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Story of Delhi’s illegal butter chicken

Original: https://www.spontaneousorder.in/p/story-of-delhis-illegal-butter-chicken

Author: Spontaneous Order

Published: 2019-02-14T13:33:06.000Z

Topics: ease-of-doing-business, delhi-regulations, regulatory-reforms

> Read our report of the (un)ease of doing business in Delhi in our latest publication- Doing Business in Delhi: A Study of Initiated and Uninitiated Regulatory Reforms at https://ccs.in/…/default/files/…/doing_business_in_delhi.pdf

**Summary:**

This post is a fragmentary promotional snippet titled 'Story of Delhi’s illegal butter chicken,' which provides no substantive content or narrative but links to the Centre for Civil Society's report 'Doing Business in Delhi: A Study of Initiated and Uninitiated Regulatory Reforms.' It includes a brief 'About Spontaneous Order' description emphasizing classical-liberal critiques of India's pseudo-socialist policies.

**Key points:**

- Promotes CCS report on regulatory reforms hindering business in Delhi.

**By Spontaneous Order**

* * *

Read our report of the (un)ease of doing business in Delhi in our latest publication- Doing Business in Delhi: A Study of Initiated and Uninitiated Regulatory Reforms at https://ccs.in/…/default/files/…/doing\_business\_in\_delhi.pdf

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Why do some societies prosper, while others remain stagnant and poor?

Original: https://www.spontaneousorder.in/p/why-do-some-societies-prosper-while-others-remain-stagnant-and-poor

Author: Spontaneous Order

Published: 2019-02-14T11:13:42.000Z

Topics: property-rights, economic-prosperity, india-economy, wealth-creation

> Traditionally, three resources of production–land, labour and capital–are utilized to create finished goods and services. The effective utilisation of these resources creates wealth (finished goods and services), and makes a society prosperous; if ine

**Summary:**

Societies prosper when they effectively utilize land, labor, and capital through well-defined and secure property rights, which incentivize owners to care for resources, work harder, innovate, trade freely, and enforce claims. Secure rights—encompassing consumption, transfer, and enforcement without coercion—drive individuals to exert effort, expand output, and create wealth, as owners retain fruits of labor without fear of theft or expropriation. In contrast, unclear or insecure rights lead to neglect, over-exploitation, and stagnation. The author argues these rights are both necessary and sufficient, implying low taxes, minimal restrictions, free trade, and reliable justice, enabling specialization, division of labor, and innovation. Indian examples illustrate failures: street vendors face evictions and confiscations, stifling expansion; cycle rickshaw owners cannot lease to pullers, underutilizing assets; land disputes clog 66% of courts, deterring leasing, pooling, and urban migration. Beyond material wealth, secure rights quell conflicts and foster peace, as Hernando de Soto's Peru work shows, where titling cocoa lands deprived guerrillas of havens. Thus, property rights create, extend, and preserve prosperity from classical-liberal incentives.

**Key points:**

- Well-defined and secure property rights incentivize efficient resource use, hard work, and wealth creation by allowing retention, consumption, transfer, and enforcement without coercion.
- In India, insecure rights—evicting street vendors, banning rickshaw leasing, and overwhelming courts with 66% land disputes—prevent business growth, specialization, and land pooling.
- Secure property rights necessitate low taxes, free trade, and access to justice, fostering innovation, division of labor, and higher productivity.
- Property rights extend prosperity to peace by resolving conflicts, as titling lands in Peru undermined guerrilla safe havens.

**By Alston DSouza**

* * *

Traditionally, three resources of production–land, labour and capital–are utilized to create finished goods and services. The effective utilisation of these resources creates wealth (finished goods and services), and makes a society prosperous; if ineffectively used, societies remain stagnant and poor. Therefore, the next natural question that arises is: What makes some societies effectively use these resources to create wealth?  
The short answer: well-defined and secure property rights over these resources and finished products.

When a society decides and demarcates who owns what and how much of the scarce economic resource, property rights are defined. When individuals can consume their demarcated resource, earn income from it, transfer it to others and enforce their right over it (also called bundle of rights), without any threat or coercion, their property rights are said to be secure. Together, both these conditions incentivise the property-owners to care for the scarce resource, and utilise it in the best possible manner to generate wealth and prosperity.

Conversely, when it is unclear who owns what resource, there is no incentive for anyone to care for it. The result is neglect and over-exploitation of the scarce resource. Similarly, when the rights are insecure, the resource is not utilized efficiently. The result? Wasted opportunities to create wealth and spawn prosperity.  

*How do [secure property rights](https://spontaneousorder.in/nepal-property/) help people to work hard and create wealth?*

Individuals have a natural tendency to expend effort to acquire resources and fulfil their wants; and a system of secure property rights incentivises them to work towards that end. If individuals know that they can fearlessly retain property for their personal use, they will exert the effort, which they otherwise would not. Driven by the amount of property acquired from their previous efforts, some will work longer and harder. This raises the overall output from a society and makes it prosperous.

Compare this to a system where individuals have little right over their property. Such individuals have little incentive to produce beyond what is needed for survival—lest their property gets stolen or expropriated. As a consequence, wealth is not created; they stagnate and remain poor.

*Secure property rights are a necessary condition for creating wealth, but are they sufficient?*

Yes. Secure property rights also mean low taxes and restrictions, free trade, and access to justice.

Property rights include the right to keep and consume one’s property. Therefore, securing them means lowering taxes to allow individuals to keep more, and lowering restrictions to allow use without permissions. This gives rise to innovation, and transforms surplus resources into new goods and products. From selling the transformed-surplus-resource at a higher price, the individual can acquire even more. This quest for ‘acquiring more’ without the fear of losing it, cascades into longer work-hours, larger wealth and greater prosperity.

The street vendors in India are effectively deprived of the right to consume their property. Despite a law to protect them, the authorities often evict and confiscate their property in the pretense of public nuisance. As a result, the street vendors do not expand their businesses—lest they be slowed down while grabbing their goods and escaping the authorities during raids. The constant uncertainty of losing their property disincentives them from  
investing in their shops and ‘acquiring more’, and hence, from growing.

Property rights also includes the freedom to transfer one’s property. Therefore, securing them means allowing individuals to freely trade their property in exchange for what they desire. It spontaneously gives rise to an economic order, where individuals produce based on relative ability-comparative advantage—and exchange based on desire. A society where a butcher and baker can voluntarily exchange their beef and bread will create wealth for both participants, which makes them better off than before. Additionally, the exchange of labour (also an individual’s property) allows division of labour and specialization, which further raises productivity and reduces waste in society.

Both the owners and pullers of cycle rickshaws in India are barred from transferring their property. Owners are prevented from leasing their rickshaws to pullers (non-owners), which prevents their effective utilisation; the owners cannot lease their additional rickshaws, and the pullers who are typically too poor to own a rickshaw are deprived from trading their labour for wages.

Property rights also includes the right to enforce their right. An institutional structure that helps rightful-owners regain/compensate for stolen or expropriated property, creates an insurance system. This allows individuals to not fear unlikely events of theft, and preserves the incentives for wealth creation in a society.

Land in India, is an example on which property rights cannot be easily enforced. About 66% of all court cases in India are related to either land or property. Because of this slow enforcement mechanism, people are afraid to leave their land unattended—lest they have to run from pillar to post to reclaim it. Despite large scale urban migration, there is a tendency for someone to stay back and hold their land. Even large scale pooling of land resources is absent in India. Although it can facilitate greater productivity and induce prosperity, people are simply not confident in leasing their land.  

*Meaning of prosperity may extend beyond accumulation of material wealth; do property rights play a role in such cases?*  

Although the literal definition of prosperity is material/financial success, defining and securing property rights has also shown to quell conflicts and usher peace. As Professor Hernando de Soto’s work in Peru shows, when cocoa-farmers were given small land-holdings, they deprived the leaders of the guerilla movement of their safe havens, which forced them to cities to be ultimately arrested.

Therefore, well-defined and secure property rights not only create the initial incentives for wealth and peace creation, but it also helps their extension and preservation.

*The author is grateful to Barun Mitra and Bhuvana Anand for the valuable discussions.*

Read more: [https://spontaneousorder.in/why-the-property-rights-solution-finds-no-mention/](https://spontaneousorder.in/why-the-property-rights-solution-finds-no-mention/)

* * *

**About Alston DSouza**

Alston completed his bachelors degree in engineering from National Institute of Technology Karnataka. He worked at the grassroots with Prayog in Bihar, as a part of the India Fellow Social Leadership program. Always keen to understand the world within theoretical constructs, he is inclined towards research at CCS. He likes to read non-fiction and research on the ideas of atheism and Humanism.

## SO Musings: Nature of the Constitution

Original: https://www.spontaneousorder.in/p/so-musings-nature-of-the-constitution

Author: Spontaneous Order

Published: 2019-02-12T14:00:19.000Z

Topics: indian-constitution, rule-of-law, democracy, classical-liberalism

> We cannot remind ourselves often enough that the constitution is intended not merely to provide for the exigencies of the moment but to endure through a long lapse of years; and that it was meant to impart such a momentum to the living spirit of the rul..

**Summary:**

In this 'SO Musings' post, Spontaneous Order shares a 1976 reflection by classical-liberal icon Nani Palkhivala on the enduring nature of the Indian Constitution. Palkhivala stresses that it must transcend momentary exigencies to last through generations, imparting irreversible momentum to the 'living spirit of the rule of law' so that democracy and freedom thrive in India long after the framers' era. He underscores India's pivotal global role, representing one-sixth of humanity, where the choice between divergent constitutional paths will profoundly shape democracy worldwide. Presented amid Spontaneous Order's mission to revive liberal voices that dismantled pseudo-socialism's dominance in post-Independence India—a false ideology alien to the freedom struggle and native traditions—this excerpt from the Illustrated Weekly of India preserves Palkhivala's advocacy for a constitutional order safeguarding liberty against statist overreach, accessible via the Indian Liberals digital archive.

**Key points:**

- The Indian Constitution must endure for generations, embedding the rule of law to sustain democracy and freedom beyond the framers' lifetimes.
- India's constitutional trajectory, as one-sixth of the world's population, will immeasurably influence global democracy.
- Spontaneous Order highlights Palkhivala's classical-liberal critique to counter pseudo-socialism's hold on Indian politics.

**By Spontaneous Order**

* * *

We cannot remind ourselves often enough that the constitution is intended not merely to provide for the exigencies of the moment but to endure through a long lapse of years; and that it was meant to impart such a momentum to the living spirit of the rule of law that democracy and freedom may survive in India beyond our own times and in the days when our place will know us no more.

Further, constitutional developments in India are not a matter of concern to our people alone. We constitute one-sixth of the human race and our choice between the two roads that diverge into the wood will have an imponderable impact on the cause of democracy throughout the world.

*Access the full document [here](http://indianliberals.in/admin/pdflanguage?id=1344595249.pdf).*

*First Published in Illustrated Weekly of India, Jan 1976, p.4–10*

*More essays and speeches by Nani Palkhivala can be accessed at Indian Liberals, an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

Read more: [https://spontaneousorder.in/5623-2/](https://spontaneousorder.in/5623-2/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Laws With Flaws

Original: https://www.spontaneousorder.in/p/laws-with-flaws

Author: Spontaneous Order

Published: 2019-02-07T11:20:23.000Z

Topics: rule-of-law, law-reform, obsolete-laws, civil-liberties

> A quote from Publius Tacitus, famously said, “Corruptissima re publica plurimae leges”, which could be vaguely translated as “The more corrupt a State, the more numerous the laws”. India with its verbose and cumbersome law books epitomises the quo

**Summary:**

India's verbose law books, epitomizing Tacitus' maxim that corrupt states breed numerous laws, undermine the Rule of Law by enabling arbitrary power despite formal adherence. Law-making must be dynamic, yet Indian legislators have accumulated obsolete, redundant statutes, as highlighted in a Centre for Civil Society study of Assam. Repealing such laws would enhance governance and public interaction. Examples include the Assam Students and Juvenile Smoking Act, 1923, with its paltry 50-rupee fine for selling tobacco to minors, now subsumed by the central Juvenile Justice Act 2015 imposing 1 lakh rupees and up to 7 years' imprisonment, creating jurisdictional confusion and loopholes. The colonial-era Assam Disturbed Areas Act, 1955, empowers even low-ranking officers to shoot for public order without legal repercussions, clashing with democratic human rights. The Assam Prevention of Begging Act, 1964, vaguely criminalizes begging, enables warrantless arrests, and shifts blame from state failures in ensuring dignity to individuals, curtailing social and economic freedoms. From a classical-liberal viewpoint, regularly weeding out such laws is essential to make the Rule of Law substantive, curbing corruption, harassment, and fragility in the legal system.

**Key points:**

- Repeal the Assam Students and Juvenile Smoking Act, 1923, as it is subsumed by the central Juvenile Justice Act 2015 and creates administrative inefficiencies with its outdated 50-rupee fine.
- Eliminate the Assam Disturbed Areas Act, 1955, a draconian colonial law allowing low-ranking officers to shoot without accountability, threatening human rights.
- Reconsider the Assam Prevention of Begging Act, 1964, which vaguely defines begging as a crime, enables arbitrary arrests, and ignores state responsibility for poverty.
- Regularly clean up obsolete and redundant laws to ensure Rule of Law functions in spirit, reducing misuse by officials and protecting citizen freedoms.

**By Devansh Mahajan**

* * *

A quote from Publius Tacitus, famously said,  “Corruptissima re publica plurimae leges”, which could be vaguely translated as “The more corrupt a State, the more numerous the laws”. India with its verbose and cumbersome law books epitomises the quotation. Rule of law forms the foundation for any modern democratic setup; it commands that no power be used arbitrarily. *[It requires as its prerequisite, that the law books be precise in enshrining the intrinsic attributes of the democracy it serves and ensure that this is done in the simplest manner possible](https://ccs.in/sites/default/files/research/repeal-law-compendium2018-assam.pdf)*. India’s penchant for legislations led to the Rule of Law often being followed in letter but not in spirit.  

Law-making should be a dynamic process, taking into account the transitions of political, economic and societal landscapes in a country. Indian lawmakers over the years have failed to deliver on this front. The overzealous law-making has led to “several statutes that with the advent of time have become obsolete, redundant or repetitive”. A [study of Assam](https://ccs.in/sites/default/files/research/repeal-law-compendium2018-assam.pdf), done by the Centre for Civil Society (CCS), reveals quite a few blemishes in its statute books. Let us look at some laws for Assam which if repealed would improve the quality of governance, and government-public interaction at large.  

Various state laws are subsumed by central legislation or newer laws. This leads to crippling administrative inefficiencies like confusion over jurisdiction, creation of legal discrepancies and so on. *The Assam Students and Juvenile Smoking Act, 1923* for example, prevents smoking by students and any person apparently under the age of sixteen. The fine imposed under the act on persons selling tobacco, cigarettes etc to any person under the age of 16 and a student under the age of 17, is ridiculously low, i.e., not exceeding 50 rupees. Moreover, there exists a central legislation – Juvenile Justice (Care and Protection of Children) Act 2015; which imposes a penalty of 1 lakh and a maximum imprisonment of 7 years for the same offence.The state act has thus been subsumed by the central act and doesn’t serve any purpose except for creating a legal and administrative mess, and providing the offenders with a legal loophole to escape the requisite punishment.  

Our colonial heritage is also sometimes reflected in our laws. There often exists statutes which are downright draconian, and have no place in a democracy. For instance, The Assam Disturbed Areas Act, 1955 was enacted for suppression of disorder and maintenance of public order in disturbed areas of Assam. The act gives power to any Magistrate or Police officer (not below the rank of Hawaldar) or any officer of Assam Rifles (not below the rank of Hawaldar) to shoot any person for maintenance of public order. The act also protects the officers from legal proceedings for their actions done under section 4 and 5 of the act. This is a colonial era law and is redundant in today’s time where the government is of the people, by the people and for the people. It challenges the human rights of the citizens and has high potential of misuse by the state personnel, with extreme repercussions.  

A third category of laws eligible for repeal or at least a rethink are the ones which curtail the social and economic freedom of the citizens. The Assam Prevention of Begging Act, 1964 provides for the prevention of begging, and for the custody, trial and punishment of beggar offenders in the state. The act of begging is defined in a vague manner and could be misused by government officials to harass ordinary citizens. The law also gives police officers or any other person authorized by the state, extensive powers to arrest without warrant, any person who is found begging. This can act as a tool for intimidation and extortion due to its discretionary and arbitrary nature. But more importantly, the law treats beggars as criminals, thus overlooking the factors responsible for his acute poverty; blatant shifting of the responsibility from the failure of the state to ensure a basic level of human dignity for all, posing concerns for the right to life and liberty of not just the beggar, but also his/her dependents.  

The burden of obsolete, redundant or unconstitutional laws makes our legal system fragile and open to misuse. It invites unscrupulous officials to engage in corruption, and harass law – abiding citizens.  It adversely affects the overall ecosystem in which citizens reside and function in a society. Therefore, it is imperative that our law books are regularly cleaned up and such statutes weeded out. Only then can we ensure the principle of Rule of Law exists not only on paper, but also on the ground.  

* * *

**About Devansh Mahajan**

Devansh has completed his Master's in Economics from Ambedkar University Delhi. An avid sports enthusiast, he hopes to work in the government someday, bringing far-reaching changes with one stroke of his pen.

## Farmers, Middlemen and the Way Out

Original: https://www.spontaneousorder.in/p/farmers-middlemen-and-the-way-out

Author: Spontaneous Order

Published: 2019-02-05T08:03:00.000Z

Topics: apmc-act, agricultural-reform, middlemen-cartels, market-liberalization

> Until recently, I would chuckle seeing my mother bargain with the vegetable vendors for a mere Rs. 2-3, but of late, I often find myself doing the same – only to chuckle again, but this time at the irony of it all. What changed? Ordinarily, a vegetable

**Summary:**

The post critiques India's APMC Act of 1963, originally aimed at protecting farmers from middlemen by mandating sales through regulated 'mandis,' but which has instead entrenched middlemen cartels, stagnant farmer incomes (Economic Survey 2018), and high suicide rates (45 daily; 15,964 in 2010 per NCRB). Tomatoes exemplify disparities, fetching Rs2-4/kg for producers versus Rs45-50/kg at Delhi's Azadpur mandi. State monopolies impose entry barriers, high fees (license, rent, cess, VAT), and limit farmers to elite agents, preventing open-market sales and private investment. The elongated supply chain—farmers to kaccha/pakka traders, agents, wholesalers, retailers—disconnects producers from consumers, enabling cartels to inflate bids. The 2003 Model APMC legislation worsens conflicts as operators self-regulate. In contrast, dairy's AgGDP share rose from 17% to 29% (1970-2014) due to greater autonomy. From a classical-liberal view, the solution lies in reducing government intervention: enable private mandis for direct sales, shorten supply chains, improve storage to empower farmers against hoarding regs, foster entrepreneurship and marketing skills to address information asymmetry, and allow market-driven pricing for mutual farmer and consumer benefit.

**Key points:**

- APMC Act fosters middlemen cartels by restricting farmers to regulated mandis, leading to low farmgate prices and high consumer costs.
- Farmer distress is evident in stagnant incomes, 45 daily suicides, and price gaps like tomatoes at Rs2-4/kg for producers vs Rs45-50/kg retail.
- Dismantle APMC barriers to allow private mandis, direct farmer-consumer links, and competition.
- Enhance private sector roles in storage, post-harvest tech, and farmer training to boost productivity and market access.
- Limited government intervention, as in dairy's success (AgGDP share 17% to 29%), exemplifies the path to empowering farmers.

**By Sumbul Mashhadi**

* * *

Until recently, I would chuckle seeing my mother bargain with the vegetable vendors for a mere Rs. 2-3, but of late, I often find myself doing the same – only to chuckle again, but this time at the irony of it all. What changed? Ordinarily, a vegetable vendor refusing to reduce the price would be frustrating, making me question my competence as an adult. That is if I didn’t know any better. Fortunately (or unfortunately), now I do.  

According to the Economic Survey of India 2018, the incomes of farmers in India have been stagnant since last three years bringing some kind of a morbid sense into the statistic of [45 farmers committing suicides every day](https://www.downtoearth.org.in/news/45-farmers-commit-suicide-each-day-in-india--34387) in the country. Tomatoes, costing Rs 45-50 per kilogram at Delhi’s Azadpur mandi, could fetch their producers from neighbouring areas only Rs. 2-4 per kilogram. The Accidental Deaths & Suicides in India – 2010 Report by the National Crime Records Bureau, projects 15,964 farmer suicides in 2010 alone.  

The Government of India introduced the Agricultural Produce Market Committee (APMC) Act in 1963- with a linchpin focus on eliminating the exploitation of farmers by middlemen. The Act guarantees establishment of regulated markets or ‘*mandis’*, wherein farmers could sell their produce at a reasonable price and in a transparent manner. Since agriculture is a state subject, the act empowered state governments to prescribe the quantities and producers of commodities as they deem fit, and designate markets and market areas where this regulated trade takes place.  

However, the very purpose of the act has been made redundant, and arguably even counter-productive, over time.  Illiterate or semi-literate farmers, who are not market savvy and cannot comprehend the multiplicity of taxes in place, are at the disposal of a cartel of middlemen and agents in these markets who have a license to operate. A state monopoly has been established over these markets since farmers are not allowed to sell their goods in the open market. These entry and operational barriers prevent competent outsiders from accessing these markets, enabling middlemen to entrench themselves further. As a result, an alternative market system does not exist and no encouragement is given to private entrepreneurs to invest in these markets.  

**How does the supply chain of agriculture work?**  

Farmers→ Small Traders (Kaccha)→Larger Trader (Pakka)→Commission agent→Wholesaler→  Retailer→Consumer  

In the absence of a direct link with the consumers, the farmers are at the mercy of the middlemen who occupy the entire space between the production and the ultimate sale of the produce. This makes middlemen very powerful and the farmers often find themselves at a disadvantage despite being the producers. Monopoly is hazardous whether it is established by a public or a private entity. Since there are only limited agents in an APMC, it’s profitable for them to form a cartel and deliberately increasing the bids, pushing prices higher. Thus delinking the producers and consumers, deprives both- the farmers of better returns on their produce and the common people of fair pricing on their vegetables.  

Over and above the license fee, rent of shops at these markets is quite high which prevents healthy and necessary competition which is a prerequisite to maintain quality and reasonable prices. At most places, only a group of village/urban elite operate in APMC. These high costs are usually passed down to the farmers, who end up benefiting very little and having to separately pay commission, marketing fee, APMC cess, and at times even VAT.  

The [Model legislation which came into being in 2003](https://dmi.gov.in/Documents/Marketing.pdf) to make APMCs more transparent has actually given rise to a conflict of interest, as the APMC, which is the operator, is also the regulatory authority. There is reluctance on part of state governments to reform the APMC legislation, as it generates huge revenues. Some states have created additional entry barriers by prescribing either high license fees for setting up such markets or minimum distance between private markets and APMC markets.  

The APMC Act has primarily prevented the creation of competitive conditions in the distribution of commodities and of a national market for agricultural commodities. The kind of restrictive practices that are carried out in regulated markets is mostly not in favour of the farmers. There is an absence of adequate marketing facilities to the farmers both in public and private sector and literally no room for alternative marketing system.  

One noticeable example of the benefits of limited government intervention is the success of dairy farming. Between 1970 and 2014, the share of livestock sector in the agricultural gross domestic product (AgGDP) increased from about 17% to approximately 29%, with livestock rearing playing an important role in ensuring food and income security of rural household (Birthal et al 2014). One of the major factors in the growth of the dairy sector in India is that this sector was granted much more autonomy compared to the agricultural sector. In the name of government support, the farmers are subjected to unreasonable restrictions.  

Farmers need a conducive environment which allows them to have a say in the pricing of their produce in accordance with the demands of the consumers by interacting and trading directly in the market.Presently, the supply chain should be shortened to bring the producers as close to consumers as possible. Too many intermediaries can be a deterrent to a farmer, leaving them with an unfairly small return on their produce.  

Additionally, better storage facilities would help build a farmer’s ability to store their produce as per the demand. In situations where a farmer knows that a few days or weeks down the line s/he is going to get a better price for her/his produce but is yet unable to store his/her grains in part due to the lack of adequate storage facilities in addition to the many restrictions which prevent such activities. These regulations, mostly aimed at the prevention of hoarding by middlemen who operate in cartels, in reality, is detrimental to the farmer.  These middlemen will thrive whether you have APMC or not.  

In order to combat the exploitation of farmers, we need to take active policy action to increase farm productivity, post-harvest technology, and better storage facilities. If we want the consumer to pay less and the farmer to gain more the role of private sector role has to be enhanced by setting up private mandis where farmers can come and sell their crops directly. Concurrently to ensure that farmers can fully utilise the benefits of this, entrepreneurship development should be encouraged along with better marketing skills to right the information asymmetry. You cannot be forcing a farmer to only sell in the government regulated markets.  

All regulations put in place under the guise of ‘gareebi hatao’ (remove poverty) have only shackled to gareebi. Perhaps its time to try a different approach, one that empowers farmers by giving her or him better ownership of the fruits of their labour.

* * *

**About Sumbul Mashhadi**

Sumbul holds a Master of Arts in Communication for Development (C4D) and a Bachelor of Arts in Social Work from from Jamia Millia Islamia. She is one of the core founding members of Pinjratod, a pathbreaking and highly documented student-led initiative that challenges and breaks regressive and gender-discriminatory practices in educational institutes and hostels across India.

## How heavy is the issue of heavy school bags? – a parent’s perspective 

Original: https://www.spontaneousorder.in/p/how-heavy-is-the-issue-of-heavy-school-bags-a-parents-perspective

Author: Spontaneous Order

Published: 2019-01-31T08:27:02.000Z

Topics: education, school-bags, child-health, parental-involvement

> I am a parent and an important stakeholder in my child’s education and education at large. My voice was not heard. Recently, social and print media was flooded with a purported circular- all the state governments and union territories were asked to regu

**Summary:**

Charu Mathur, a parent and lawyer, argues that heavy school bags are crushing children's childhoods and musculoskeletal health, as vividly captured in a Hindi poem she quotes, yet government interventions like a purported MHRD circular mandating bag weights (1.5kg for Grades I-II, up to 5kg for Grade 10) and restricted subjects are unverifiable, impractical, and ignore parental voices—absent from official websites and contradicted by India's lack of 'One Nation, One Board.' Despite the 1993 Yashpal Committee's 'Learning without Burden' report, bags have only grown heavier. From a classical-liberal lens emphasizing stakeholder empowerment over top-down regulation, Mathur critiques decimal-precision rules (e.g., what if a bag is 1.6kg?) and no-homework mandates for early grades, proposing market-friendly, practical solutions: digital smartboards for books, student 'book pools' for sharing, school lockers, worksheets over notebooks, ergonomic backpacks with waist belts, subject-specific school days to minimize daily loads, and parental training on packing technique. She urges parents, teachers, schools, and society to collaboratively combat this 'beast of bags' to prevent crooked backs and weak muscles in children.

**Key points:**

- Heavy school bags burden children's spines and limit playtime, persisting despite 1993 Yashpal report and unverified government circulars on weights and subjects.
- Proposed solutions include digital smartboards, book-sharing pools, school lockers, worksheets, ergonomic bags, and subject-specific days to reduce loads.
- Parents should teach children proper bag-packing with heaviest books at the back, and all stakeholders must act to protect kids' health.

**By Charu Mathur**

* * *

*I am a parent and an important stakeholder in my child’s education and education at large. My voice was not heard.*

Recently, social and print media was flooded with a purported circular- all the state governments and union territories were asked to regulate the teaching of subjects and weight of school bags as prescribed by the Government of India. However, I could not locate the same on the official website of MHRD or on the Delhi Government’s website of Directorate of Education.

Based on the said circular, the Delhi High Court has issued a notice to Delhi Government’s DoE where the PIL refers to textbooks and not the weight of school bags.

The weighty issue of heavy bags has been captured by Dr Swati Gupta beautifully in the following lines:  

**“बस्ते** का **बोझ”**

“माँ मेरे बस्ते के बोझ में मेरा बचपन दब रहा है।  
सुबह सबेरे जल्दी उठकर मैं स्कूल जाता हूँ।  
देर शाम को थका हुआ स्कूल से वापस आता हूँ।  
होमवर्क है इतना सारा मुश्किल से पूरा कर पाता हूँ।  
माँ मेरे बस्ते के बोझ में मेरा बचपन दब रहा है।  
विज्ञान गणित के प्रश्न हैं ऐसे चैन न पाने देते हैं।  
इतिहास भूगोल में उलझा ऐसा नींद न आने देते हैं।  
सामान्य ज्ञान के चक्कर में दिमाग का दही बन रहा है।  
माँ मेरे बस्ते के बोझ में मेरा बचपन दब रहा है।  
कॉम्पटीशन की होड़ लगी है मै पीछे न रह जाऊँ।  
अपनी इस व्यथा को मै किसी और को कैसे समझाऊँ।  
यही सोच सोच कर मन ही मन घबराता हूँ ।  
माँ मेरे बस्ते के बोझ में मेरा बचपन दब रहा है।  
क्या भूलूँ क्या याद करुँ कुछ समझ न आता है।  
खेलकूद के लिए भी मुझे समय नहीं मिल पाता है।  
मेरी पीड़ा माँ सिर्फ तू ही समझे इसलिए तुझे बताता हूँ।  
माँ मेरे बस्ते के बोझ में मेरा बचपन दब रहा है।”  
  

The weight limit for school bags for various grades is as under:

Grade I & II:- 1.5kg

Grade III to V: – 2-3 kg

Grade 6-7:- 4kg

Grade 8-9: – 4.5kg

Grade 10:- 5kg

At the first instance, it is amusing to see how the measures are in decimals! What will be the consequence of my child in grade 1 carrying a bag weighing 1.6 kg or in grade 9 with a bag weighing 4.8 kg!

Per the purported circular,– no homework for grade 1 and 2 students. Only language and Math should be taught. Will it be vernacular language or Hindi or English? For Grade 3-5, students will learn only languages, math and environmental science as prescribed by the NCERT. This is again an anomaly. India does not follow ‘One Nation, One Board’ policy.

In 1993, the Prof Yashpal Committee had come out with “Learning without burden” report. Despite that, the bags are getting heavier. As a parent, I am aware of the fact that heavy bags are a burden on my child’s spine, hands, wrist- his entire musculoskeletal system. We have to deploy technology to assist in the issue.

To overcome this, here are my few suggestions:

-   Smartboards should be used to display books in a digital format relieving students from the heavyweights
    
-   Just like carpools, teachers can create book pools whereby two students share a book. One child can bring half the subject -books and another child can bring another set and they share it.
    
-   Schools can provide students with lockers. This will allow students to keep books/notebooks in schools itself.
    
-   Replacing notebooks with worksheets and light folders for exercises and homework can reduce the pressure on children.
    
-   Bags should be designed ergonomically. Schools should prescribe backpacks as against shoulder bags. It should be sufficiently padded and should have waist belt for better posture.
    
-   Classes should be conducted per the subject of the day. For example, Monday’s should be concentrated on Mathematics with other activities. The books can be split into volumes. So, your child carries only those books that are to be taught on that day.
    
-   As a parent, you must teach your child how to pack his school bag. He must be told to put heaviest books at the rear of the bag, near back, so there’s less burden on a child’s spine.
    

We, as parents, teachers, schools and society as a whole, have to combat this menace of heavy bags. We don’t want to leave them with crooked backs and weak muscles. Let’s together fend off this beast of bags from our kids’ back!  

* * *

**About Charu Mathur**

Charu Mathur is a lawyer by profession. She is also a member of the Parents Forum for School Education.

## Limitations in our understanding of ease of doing business in India

Original: https://www.spontaneousorder.in/p/limitations-in-our-understanding-of-ease-of-doing-business-in-india

Author: Spontaneous Order

Published: 2019-01-29T08:47:37.000Z

Topics: ease-of-doing-business, business-reforms, regulatory-reform, small-enterprises

> A few days ago the World Bank released its annual ready reckoner on ease of doing business in India and the world. India jumped 23 spots on the rankings, from 100 in 2017 to 77 this year. No doubt this is a positive sign, but it is far from the last wor..

**Summary:**

India's jump from 100th to 77th in the World Bank's Ease of Doing Business rankings signals progress but offers a superficial view of the business environment, ignoring vast state-level variations in machinery, processes, and rules. The author argues that broad national assessments, including DIPP's state reforms plan and other surveys, fail to capture substantive qualitative changes or implementation gaps, where paper reforms do not translate to ground reality—such as undedicated commercial courts under the 2015 Act or opaque risk-based inspections for environmental and labor laws. Better-performing states like Andhra Pradesh, Telangana, Gujarat, Maharashtra, and Tamil Nadu provide some details, but most, including Delhi, rely on checkbox ticks. Critically, reports neglect regulatory burdens on micro, small, and medium enterprises, especially informal urban retail like restaurants facing arbitrary sealing and meat traders under shifting rules without due process. A Centre for Civil Society study on Delhi reveals reforms as window-dressing, with persistent license-permit-inspector raj and no strides in contract enforcement or principles-based regulation. The 2015 Business Reforms Action Plan lacks background papers or cost-benefit analysis. For a freer enterprise environment, systematic granular oversight of reforms across central, state, and municipal levels is essential, particularly for unmeasured areas like waste management.

**Key points:**

- World Bank's rankings and DIPP assessments provide limited insights due to unexamined implementation gaps at state levels, where paper reforms often fail on the ground.
- Specialized commercial courts and inspection regularizations exist on paper but lack dedicated resources or transparency in practice.
- Regulatory challenges for small retail enterprises, like restaurant sealings and meat trade uncertainties, remain unaddressed in major reports.
- CCS's Delhi study shows reforms as superficial, perpetuating the license-permit-inspector raj without principled deregulation.
- Future reforms require systematic evaluation, background papers, and oversight across government levels to advance economic freedom.

**By Bhuvana Anand**

* * *

A few days ago the World Bank released its annual ready reckoner on ease of doing business in India and the world. India jumped 23 spots on the rankings, from 100 in 2017 to 77 this year. No doubt this is a positive sign, but it is far from the last word on our economic health or the state of our business environment. To think otherwise is a mistake. The Indian government is a complex beast. Variations across states in machinery, process and rules abound. Painting the country in broad strokes gives us a limited if useful picture of the efforts and success in creating an enabling environment for enterprise.

Prior to the release of the Bank’s report, the Department of Industrial Policy and Promotion (DIPP) released its annual assessment of state-level progress on the business reforms action plan. In addition to these two progress measures, a few research institutions also attempted to triangulate the World Bank’s previous appraisal of India’s business environment.

Despite different surveys and reports, there is no deep understanding of the substantive and qualitative changes to the regulatory framework governing enterprises across different states. Better performing states such as Andhra Pradesh, Telangana, Gujarat, Maharashtra and Tamil Nadu have provided details about individual reform claims. But in the case of most states including Delhi we have little to go on except ticks on checkboxes.

The World Bank itself [admits](https://drive.google.com/open?id=1jWibamS6WakPfv3AM9Zm0jUpVX15Y8H3) that implementation gaps may exist as sometimes reforms “on paper do not translate into reforms on the ground” or “reforms in one area are contradicted by actions in other areas” or “regulatory service delivery is good for some but not for others”. Unless the implementation status of reforms is thoroughly investigated at the state level, we will not be able to fix the red flags on performance that the Bank’s report or enterprise surveys raise.

An example of this is the setting up of commercial courts or benches at the district and high court levels across the country following the Commercial Courts Act 2015. The truth of the matter is these hardly qualify as specialised courts, since there is neither a dedicated roster of judges to hear commercial cases nor is there dedicated courtroom time for commercial disputes.

Other examples are efforts to conscribe inspections authorities under norms of transparency and due process. On paper many state governments have claimed to regularise the inspections processes to enforce environmental regulations and labour laws. Reform claims include incorporating risk-based inspections and application of standard operating procedures. Yet, in the case of most states, the formula for selecting enterprises for inspections or calculating risk, or the extent to which violations are brought to book are unclear.

Separately, the regulatory challenges faced by ubiquitous urban services provided by micro, small and medium enterprises remain unaccounted for. Government of India and state governments have initiated business environment reforms with the goal of drawing in large-scale investments in industrial enterprises for the Make in India initiative. Reports and surveys on the ease of doing business in India are studying only certain types of businesses: larger (number of employees or income), likely to have access to expert help for registration and compliance, or engaged in manufacturing activities. But the extent to which operating environment has improved for traditional retail service enterprises has not featured on any one’s agenda.

For example, in the last few years, restaurants in densely populated market areas have been sealed repeatedly for flouting shape-shifting rules. Restaurateurs stepping up to meet the demand for alcohol service face challenges on account of cultural policing masquerading as policy. News of legal stand-offs between restaurateurs and inspectors, excise officers, and police is commonplace. Similarly, since 2014, the country has been locked in a tough conversation about the production, trade and sale of meat, particularly cattle meat. With oft-changing rules, unclear objectives and absent due process, meat entrepreneurs supplying for their livelihood are under existential threat.

The Bank’s Ease of Doing Business report does not highlight issues that affect small-scale retail enterprises, particularly those yet to be registered or formalised. These issues represent essential and non-trivial corrections that affect a bulk of self-employed entrepreneurs and corner shops.

Finally, a clear understanding of the next granular steps in the reform process is missing. THis is particularly true for reforms in rules and enforcement at the intersection between central, state and municipal level powers and authority. The government has not made any higher level recommendations on emerging industries.

For example, waste management in India is largely run through informal enterprises. But registration rules, procedures and costs to set up e-waste enterprises make it expensive and challenging to move away from informality. Given the nexus between municipal authorities and informal enterprises in the sector, broad strokes study of ease of doing business will likely not alert us to reform needs in areas like this.

This year my colleagues and I at the Centre for Civil Society undertook a deep dive into the realities of *[Doing Business in Delhi](https://ccs.in/sites/default/files/research/doing_business_in_delhi.pdf)* to address some of these blind spots. It turns out, that in Delhi most of the claims on reforms are window-dressing. The corner shop small entrepreneur is still choking under the weight of the license-permit-inspector raj and no substantial strides have been made on contract enforcement. In Delhi, the state government is still in an ‘offering concessions’ mode. Instead of engaging in a higher order discussion on principles-based regulation, the state government continues to extensively prescribe specifications for enterprises, and proscribe behaviour based on anachronistic cultural norms.

In 2015, DIPP and NITI together set out the Business Reforms Action Plan process, a praise worthy effort to encourage pan-state movement towards the true north of economic freedom. The effort has no doubt borne fruit as India’s dramatic rise on the Doing Business rankings show.

But to put things in perspective, none of the recommendations in the reforms plan is supported by a publicly available background paper, nor has there been any systematic discussion of whether the measures proposed are sensible principled applications. There is also no discussion of the costs of not implementing the action items or the relative merits of the approaches taken by different states on their reform paths.

For the future, there needs to be a systematic discussion about and watch over the reforms process at each level of government. Besides indices such as a the Bank’s Doing Business rankings, we need to understand each reform action item, particularly those remain unmeasured, in our quest for a freer business environment.  

Read more: [https://spontaneousorder.in/unease-of-opening-restaurant/](https://spontaneousorder.in/unease-of-opening-restaurant/)

* * *

**About Bhuvana Anand**

Bhuvana Anand is Director, Research at Centre for Civil Society, one of India’s leading think tanks. Bhuvana’s subjects of interest are better regulation and governance, public finance management, and political economy. In India, she has worked extensively on reforms of welfare programmes, including reforms of the Public Distribution System and implementation of various Direct Benefits Transfers. At the Centre, she works on unpacking how government actually functions using administrative data, legislative analysis, field research, and machine learning. In addition, her team develops blueprints for programme design and policy implementation. Bhuvana has worked with various donors and civil society organisations in Sudan, Afghanistan, Sri Lanka, India and the United States, in policy advocacy, managing multi-pronged programs and research. She previously worked with the United Nations, the British Government's Department for International Development, and most recently at MIT’s Poverty Action Lab.

## A National Education Policy for India

Original: https://www.spontaneousorder.in/p/a-national-education-policy-for-india

Author: Spontaneous Order

Published: 2019-01-25T14:03:54.000Z

Topics: k-12-education, education-reform, school-choice, deregulation, parental-rights

> The Human Resource Development (HRD) ministry in October 2015, then under Smriti Irani, constituted the T.S.R. Subramanian Committee to suggest recommendations for the National Education Policy. The committee submitted its report in May 2016 and the min..

**Summary:**

The post critiques delays in India's National Education Policy, noting the Subramanian Committee's 2016 report was rejected by Minister Javadekar in 2017 in favor of the Kasturirangan Committee, which has faced extensions likely until after elections; the current policy is over 30 years old. From a classical-liberal perspective, K-12 education is a rivalrous, excludable merit good justifying public funding but not state provisioning, as it produces positive externalities without being a true public good like national defense. Policymakers must identify root causes of issues like low enrollment and poor outcomes—often due to regulatory barriers stifling competition—rather than symptoms. The policy should prioritize the child and parental choice over state or teacher interests, eliminating licensing for a registration system, focusing on outputs not inputs, using vouchers for funding, avoiding conflicts in state roles, presuming market forces absent evidence, and decentralizing to local levels. Political hurdles include rent-seeking by teacher unions, who enjoy high salaries with low accountability and electoral influence. Reforms demand junking old thinking to foster competition, innovation, and parental autonomy.

**Key points:**

- Classify K-12 education as a rivalrous, excludable merit good warranting public funding via vouchers, not state-run schools.
- Deregulate by replacing licensing with registration, enabling private ratings like Zomato, and prioritizing learning outcomes over inputs.
- Empower parents with choice, including medium of instruction, and decentralize control to local bodies like panchayats.
- Address root causes like regulatory barriers before symptomatic fixes, presuming market forces over state intervention without evidence.

**By Prashant Narang**

* * *

The Human Resource Development (HRD) ministry in October 2015, then under Smriti Irani, constituted the T.S.R. Subramanian Committee to suggest recommendations for the National Education Policy. The committee submitted its report in May 2016 and the ministry held several consultations with various stakeholders on the report’s contents.

In 2017, Prakash Javadekar took over as the HRD minister. He rejected the Subramanian panel’s report, disbanded the committee and constituted another committee under the former Indian Space Research Organisation (ISRO) chief K. Kasturirangan. The committee started working on it in July 2017. The Kasturirangan panel was to initially submit its report in December 2017. Since then, there have been innumerable extensions. It seems that the Government will probably not release the report before elections.

The current education policy is more than 30 years old, which is why the government promised to review it and bring in reforms. The challenge is to junk the old school thinking and embrace reforms. However, it will not be easy to undo how education has been perceived and provided in India for a long time. Here is a quick look at what a policy overhaul could consider.

**What kind of a good/ service is K-12 Education?**

Education is NOT a public good. Education is a rivalrous good – a student’s admission in a school may diminish the chance for others; too many students in a class may imply low-quality engagement. Similarly, education is not inexcludable –  it is possible to exclude students from availing education. Education is not like national defence or air – one person’s consumption does not exclude others. Hence, it is not a public good.

Some people call it public good because it produces immense positive externalities to others. What they imply is education is a “merit good” – it should be universally available irrespective of affordability. That makes a case for public funding of education at best – not necessarily for public provisioning of education.

**What should the policy address?**

The government may have data for identification of problems in K-12 education. The data may indicate the contemporary issues in K-12 education such as low enrolment, dropouts or poor quality. Before rolling out the measures to address such problems, the policymakers must first identify the root causes of these symptomatic problems. Are these problems the consequences of market and government failure or something else?

For example, poor learning outcome may be a case of accountability deficit, lack of motivation for teachers or some other phenomenon. Another example is low enrolment – no faith in the education being provided, the value of child labour over education et al.

Unless the root cause is correctly identified, no policy measure can be correctly prescribed.

India does not have freely operating markets in K-12 education. There are a number of entry barriers, operational barriers as well as restrictions on earning profits. Such a regulatory framework chokes the market and produces sub-optimal results. On the one hand, it discourages low-fee education providers and on the other hand, it would lead to an oligopoly of big quality schools who would then demand quite a high fee.

The solution would be to not have further controls – rather the policy should foster more and more competition and innovation.

**Whom should the policy address?**

The policy should be designed for the child, the learner. She should be respected as she is – with all her talents and weaknesses.

A government school with zero students and five teachers on payroll cannot be justified on grounds of teacher employment. A school exists primarily for imparting learning to students, not for guaranteeing employment to teachers.

Secondly, what the child needs, the parent knows the best. Parent’s right over the child supersedes all other interests – societal, state and community. The state can, at best, make all the information available to the parents.

For example, a state government may be tempted to impose the official language of the state as the compulsory medium of instruction. But parents may prefer English as the medium of instruction. In this context, expert advice, even if it sides with the state government and favours mother tongue, is irrelevant. The parental choice must be respected.

**What tools should the policy adopt for attaining objectives?**

First, the policy must do away with all licensing and permit raj for education providers. Instead, it should have a registration system. If a parent finds the education services deficient, she should hold the school legally liable for the deficiency. At best, the state can facilitate a certification system for the schools based on pre-announced parameters. Such ratings can be done and maintained privately or like Zomato, Google and Practo currently practice in their respective sectors.

Secondly, the policy must focus on outputs or learning outcomes and not inputs. It means that the size of the school building is not as relevant as school results.

Third, not only there is any compelling reason for the State not to establish and run schools,  doing so would create a conflict of interest between its regulatory and provisioning role. Public funding can be done through direct benefit transfers or vouchers.

Fourth, there must be no policy intervention if not supported by evidence. In absence of any evidence, the presumption should be in favour of market forces and parental autonomy rather than state control.

Fifth, as far as possible, the lowest tier of governance/regulator should make the decision if it must. For example, instead of the central government, it should be the state government, District or Block Education Officer, Gram Sabha/Panchayat or Resident Welfare Associations. Government schools could be handed over to the local community with the power to hire & fire the staff and handle finances independently. 

**Why is it a political challenge?**

The current policy creates rent-seeking opportunities for several stakeholders, particularly government school teachers. Teacher unions strongly lobby for safeguarding their interests. Teachers, especially in government schools, earn a high salary without much accountability.

It is unlikely that any government would like to upset its electoral support system right before parliamentary elections, peculiarly when they are well aware that government school teachers are involved in election duties at the polling booths.

Read more: [https://spontaneousorder.in/nep-paradigm/](https://spontaneousorder.in/nep-paradigm/)

* * *

**About Prashant Narang**

An advocate who believes in free enterprise. Having taught at some of the best law schools across India as a visiting faculty, he is currently pursuing Ph.D. from Center for the Study of Law and Governance at Jawaharlal Nehru University and running a YouTube channel on policy issues. Prashant is Associate Director - Research at the Centre for Civil Society.

## Is religion superior to economic rationale?

Original: https://www.spontaneousorder.in/p/is-religion-superior-to-economic-rationale

Author: Spontaneous Order

Published: 2019-01-23T10:35:26.000Z

Topics: religion-economics, indian-religiosity, economic-exclusion, caste-system

> Is religion superior to economic rationale? How expensive is religion? Does the question bother you? It shouldn’t, considering the amount of money we spend on religion every day. Sick-healthy, lucky-unlucky, happy-sad: everyone is eligible for holy favo

**Summary:**

Religion operates as a lucrative market resilient to recessions and disasters, with the US faith economy valued at $1.2 trillion and India's incense sticks market alone at over Rs 2500 crores; the poorest 20% in rural India spend 7% of monthly expenses on religious services. Yet, despite religions' pro-wealth elements like Hinduism's Lakshmi or Protestant work ethic, rising religiosity in India—over 90% per World Values Survey 2010-2014, up 10 points since 2004—contrasts global declines and correlates negatively with per capita income and prosperity. In India, this inhibits the demographic dividend through economic exclusion via religio-cultural norms: religious attitudes limit women's workforce participation, potentially costing $770 billion in GDP; caste rooted in religion influences voting and politics, leading to economic losses; and intolerance targets industries like the $16 billion leather sector amid cattle slaughter bans. Religious pluralism aids prosperity in nations like Norway, but India's religio-centrism fosters animosity and fundamentalism, harming growth. The post calls for quantifying the religion industry's scale and the losses from religious intolerance to prioritize economic rationale over religious obstruction.

**Key points:**

- Rising Indian religiosity above 90% inhibits economic growth and demographic dividend by enforcing exclusion on religion, caste, and gender grounds.
- Religious norms restrict women's participation, with potential $770 billion GDP loss from better treatment.
- Caste and religious affiliations drive voting, causing economic losses via favoritist policies.
- Religious intolerance stifles industries like the $16 billion leather sector through cattle slaughter crackdowns.
- Quantify religion market gains versus losses from fundamentalism to assess net economic impact.

**By Sunaina Mathur**

* * *

**Is religion superior to economic rationale?**

How expensive is religion? Does the question bother you? It shouldn’t, considering the amount of money we spend on religion every day. Sick-healthy, lucky-unlucky, happy-sad: everyone is eligible for holy favours as long as they are ready to pay competitive prices for it. Religions’ relative immunity to [recessions](https://economictimes.indiatimes.com/news/politics-and-nation/religion-remains-untouched-by-recession/articleshow/9930328.cms) or [natural calamities](https://www.livemint.com/Politics/rHLzYRbkgdFrfvl30PSqtL/Religiosity-increases-during-times-of-natural-disasters-fin.html) makes religion a rather lucrative business. The USA alone has a faith economy more valuable than Amazon or Google, estimated to be around [1.2 trillion dollars](https://www.theguardian.com/world/2016/sep/15/us-religion-worth-1-trillion-study-economy-apple-google).  

From ‘puja thali’ at the roadside hawker to church candles on Amazon, entrepreneurs recognise the demand and the willingness with which people from all sections of the society would loosen their pockets. It is one of the few markets in which rich and poor alike let go of a considerable part of their disposable incomes, the poor more so than the rich. The poorest 20% in rural India [spent 7%](https://indianexpress.com/article/explained/indians-travel-4-times-more-for-religious-reasons-than-on-business-indicates-data-from-nsso-4828897/) of their monthly expenses on miscellaneous consumer services surrounding religious activities. While India’s religion market has never been extensively studied and estimated, one can imagine the robustness given that India’s incense sticks’ market alone is worth over [Rs 2500](http://www.businessworld.in/article/Incense-Stick-Exports-Cross-Rs-400-Crore-Mark/07-09-2017-125606/) crores.

Max Weber, a German sociologist and economist, in his book The Protestant Ethic and the Spirit of Capitalism famously linked the rise of capitalism in Northern Europe with the Protestant work ethic which espouses work as a means to actively contribute to the community. Hinduism, on the other hand, worships wealth as ‘Lakshmi’, who is also worshipped as the goddess of good fortune. If religion has given rise to such a lucrative industry for both the entrepreneurs and labour, in addition to the liberal views that many religions take on wealth, why is religion often seen as an obstruction to economic growth?

[Religious pluralism](https://dash.harvard.edu/handle/1/3708464) is linked to higher prosperity observed in developed countries like Norway or Switzerland, which experience greater economic stability and growth. As data shows, religiosity is often at odds with economic prosperity. Studies show that the per capita income of a nation has a negative correlation to the national levels of religiosity, meaning that nations in which people identify as being more religious are less wealthier nations. Let’s try to understand this, within the Indian context.

The [world values survey (WVS) 2010- 2014](http://www.worldvaluessurvey.org/WVSDocumentationWV6.jsp),  a compilation of data on trends in religion shows that India has seen an increase of about 10 percentage points since 2004, with over 90% respondents identifying religion as an important aspect of their lives. India’s growing religiosity, in contrast with the reducing trends of religiosity globally, is inhibiting its growth and the potential of India’s much talked about demographic dividend.

Economic exclusion on the grounds of religion, caste and gender is an unfortunate consequence of this adherence to religio-cultural norms. The general attitude held by many religious elements of women’s participation in the workforce is one example of how long-held notions and customs can [harm the economy at large](https://www.weforum.org/agenda/2018/07/india-could-boost-its-gdp-by-770-billion-by-just-treating-women-better). These customs, dictated and practised by many religious fundamentalists, manifest themselves even in violent ways prohibiting women from entering [temples](https://www.nationalgeographic.com/culture/2019/01/sabarimala-temple-india-kerala-protests/), [schools](http://www.pewforum.org/2016/12/13/how-religion-may-affect-educational-attainment-scholarly-theories-and-historical-background/) and [work spaces](https://www.ndtv.com/india-news/oxfam-says-unpaid-work-by-women-worth-43-times-apples-annual-turnover-1980618). Religion is even used as a medium to imbibe fear into the society, discouraging active participation of marginalised segments of the society.

Castes in India, which find their roots in religion, play a decisive role in economic growth of the nation as a whole. Political candidates’ [religious and caste affiliation](https://www.business-standard.com/article/politics/how-caste-and-religion-influence-selection-of-political-leaders-in-india-118071800122_1.html) is a major factor in Indian voting.  People are open to suffering considerable economic losses, directly or indirectly, at the hands of a government that promises significant favour for the religion or caste of their affiliation. People may be subsuming individual preference over tribal/societal preference which is often dictated by religious inclinations.

Rampant religious animosity, despite the secular label that India proudly wears, is on the rise due to increasing religio-centrism among the populace. The resulting intolerance amongst the populace has posed many challenges to the economy by targeting industries that do not align with one’s own religious beliefs. The leather industry for example, which is worth an [estimated $16 billion](https://www.livemint.com/Politics/3duNgW1a0MFb29Hl412UJL/Cattle-slaughter-ban-ripples-through-Indias-leather-industr.html), is being stifled in the midst of the religion instigated crackdown on cattle slaughter.

While there is a need to quantify the expansiveness of the Indian religion industry, there is an even greater need to estimate the losses that we suffer due to actions of the so-called religious affiliates. While the religion’s market might be doing the society economic favours, what harm is the world paying for religious intolerance and fundamentalism?

Read more : [https://spontaneousorder.in/the-generality-principle/](https://spontaneousorder.in/the-generality-principle/)

* * *

**About Sunaina Mathur**

Sunaina holds a Bachelor of Arts in Economics from Fergusson College, Pune. She has previously interned with the National Human Rights Commission(NHRC), the Government of Andhra Pradesh and has represented India at the UN for the Merit360 programme. Her love for languages and poetry drove her to learn French and Russian Languages, and she hopes to read her favourite book ‘War and Peace’ in Russian someday.

## Hauling Down the Angels

Original: https://www.spontaneousorder.in/p/hauling-down-the-angels

Author: Spontaneous Order

Published: 2019-01-22T10:25:49.000Z

Topics: angel-tax, startups, entrepreneurship, tax-policy

> In 2016, the newly formed government launched the startup India initiative to nurture innovation and promote startups in the country. This initiative, inter alia, set up a corpus of 10,000 crores for the purpose of funding startups and gave tax exemptio..

**Summary:**

The Indian government's 'Angel Tax' under Section 56(2) of the Income Tax Act, introduced in 2012 to curb money laundering by taxing share premiums exceeding fair market value at 30.9%, is harassing startups and investors, treating investments as taxable income. This has caused a 40% reduction in angel investment and seed funding, with over 2000 startups receiving notices demanding 40-50% of raised funds since 2013, prompting high-profile criticism from figures like Mohandas Pai and Kiran Mazumdar Shaw. Valuing early-stage startups is inherently difficult using methods like cost-to-duplicate or discounted cash flow, which fail to capture intangibles and future potential, making the tax an ill-conceived barrier to entrepreneurship vital for India's young population and job creation. Despite Startup India's 10,000 crore corpus and tax exemptions, bureaucratic scrutiny under Section 68 exacerbates the issue. Recent government easing—raising exemptions to Rs. 50 lakh, simplifying DIPP-CBDT recognition without merchant banker certificates—offers partial relief, but from a classical-liberal view, policymakers must revisit valuation methodologies to foster genuine innovation without cynically distrusting honest investors, lest they drive capital overseas and stifle the youth-driven growth story.

**Key points:**

- Angel Tax deems share premiums over fair market value as taxable income at 30.9%, leading to notices taxing 40-50% of funds raised by over 2000 startups.
- Startup valuations are unreliable using standard methods like cost-to-duplicate or discounted cash flow, which undervalue intangibles and future potential.
- The tax has caused a 40% drop in angel investment and seed funding, risking capital flight and harming job creation for India's youth.
- Government recently eased exemptions to Rs. 50 lakh via DIPP-CBDT process but must reform policy to support entrepreneurship without anti-evasion overreach.

**By Hinan Ali**

* * *

In 2016, the newly formed government launched the startup India initiative to nurture innovation and promote startups in the country. This initiative, inter alia, set up a corpus of 10,000 crores for the purpose of funding startups and gave tax exemption on capital gains invested in fund of funds (FOF).  
  
But not all is well in the Indian entrepreneurial story. The central government is facing flak from start-ups for issuing them notices every now and then about something called “Angel Tax”. This tax was introduced in the Union Budget of 2012 by then Finance Minister, Pranab Mukherjee. It refers to income tax payable under section 56 (2) of the Income Tax Act, 1961 payable on capital raised by unlisted companies through the issue of shares where the price of the shares sold is considered exceeding the fair market value of those shares. The difference amount is reckoned as “income from other sources” and taxed at the rate of 30.9%. So a startup receiving equity in excess of its fair value will be taxed. Consider for example Company A whose shares are valued at Rs. 1000 each sells them to an angel investor for Rs. 1500, the difference of Rs. 500 would be treated as income and not as investment.  

India being one of the youngest nations in the world, skill development, entrepreneurship and commensurate job creation are vital for harnessing the potential of our youth. With many early stage startups being harrassed on account of raising money, the concerns of budding entrepreneurs and investors (under Section 68 of Income Tax Act, 1961) have resurfaced. This has resulted in 40% reduction in angel investment and seed funding, much to the disappointment of young startups in the country.  

Several high profile investors have been vocal about expressing their displeasure with the government over this. In December 2017, former Infosys board member Mohandas Pai tweeted to finance minister Arun Jaitley:  
  

*[@arunjaitley](https://twitter.com/arunjaitley) Sir Start ups are getting harassed by IT for raising Capital,threatening to consider it as income!very bad scene and very many are angry and upset,may shift overseas.Appeal process broken, takes 15 years. Pl intervene, [@PMOIndia](https://twitter.com/PMOIndia) [@narendramodi](https://twitter.com/narendramodi) [@amitabhk87](https://twitter.com/amitabhk87) [@rsprasad](https://twitter.com/rsprasad)*  

Tweeting in support of abolishing angel tax, billionaire entrepreneur Kiran Mazumdar Shaw tweeted:

*Why is the Modi Govt blundering on the Start-up economy by recklessly introducing a tax on angel investments?  This will only drive away investments overseas n starve Indian start ups. [@NITIAayog](https://twitter.com/NITIAayog) n MoF r failing young entrepreneurs n even killing jobs. [@PMOIndia](https://twitter.com/PMOIndia) [@TVMohandasPai](https://twitter.com/TVMohandasPai)*  

**So why was this tax brought in?**  
  
Touted as an anti-abuse measure, angel tax was introduced in 2012 to curb money laundering. The rationale was that grafts and black money could be disguised as angel investment so as to evade taxes.  

Although the issue of angel tax has been stewing over among startup founders and angel investors for quite some time, recent trouble erupted in November 2018 when the Ministry of Consumer Affairs (MCA) sent notices to over 2000 startups that had raised money since 2013. In some cases, startups received notices levying taxes amounting to almost 40-50% of the total income raised. After startups, investors started receiving notices, asking them to explain the valuation of the company they had invested in.  

**Was it an ill-conceived move?**  
  
The intention may have been good, but the government was not mindful of the problems that could arise out of it. How does a taxman value a startup? Don’t valuations change quickly with time? Is there a credible formula that can be used to ascertain the fair value of a startup? For startups with little or no revenue and dicey futures, the task of valuation is very tricky and cumbersome. The cost to duplicate method which is often the starting point of valuing startups is not error-free. It uses objective variables, but does not capture intangible assets and therefore does not accurately reflect a startup’s future potential (profits, sales, returns, brand value, etc.)  

Another method used is the Discount to Cash Flow method. It involves forecasting the cash flows which the company will generate in future. The trouble here is that it depends overmuch on the analyst’s ability to forecast the future market landscape and make assumptions about how a company will perform in the long run.  

Thus, it is extremely difficult to estimate the future value of a company when it is still in its infancy. Well established methods for valuing mature companies do not work in case of startups.

**Way forward**  

Sources of funding may be unscrupulous in certain cases, but being cynical and disbelieving of the valuations submitted by startups is not conducive to businesses. While speaking at the third edition of the National Entrepreneurship Awards this year, Minister of commerce and industry and civil aviation, Suresh Prabhu stated that the government is completely supportive of entrepreneurs and all possible efforts are being made to solve the regulatory and financing issues for enterprises.  

Investors and entrepreneurs are hoping for an instrumental change in the current policies so that the startup ecosystem in the country is promoted for the benefit of all and sundry. There is an impending fear of investors backing out of funding new startups for fear of being caught up in litigations. In an economy that is hardly producing jobs, having a tight bureaucratic structure may not bode well for those wanting to set up their own enterprises. An anti-evasion provision that should punish people who use startups as a way to launder money and turn black money into white is becoming a problem for genuine, honest investors.  

After much backlash, the government last week eased the process of startups seeking tax exemption on investments made by angel investors. It notified changes to section 56 of the IT Act for easing startups gain recognition. Startups need to send an application to DIPP which will then be scrutinized by the Central Board of Direct Taxes (CBDT). However, in order to be eligible for exemption, the startups need to fulfil certain criteria. They will be required to furnish bank account details and return of income for the last three years. The exemption limit has been raised to Rs. 50 lakh from the earlier Rs. 25 lakh for financial year preceding the year of investment. Also, the earlier requirement of a startup having to submit a fair value certificate from a merchant banker specifying the fair market value of shares has been done away with.  

New and young establishments will shape the growth story of this country. Government initiatives for such as Startup India, Standup India and Skill India will not yield results with rigorous tax laws discourage youngsters from setting up new businesses. The government should revisit the valuation methodology and come up with a balanced policy that does not harass a promising community of startups in this country. With millions of young people joining the labour force every month, stifling entrepreneurship and innovation will be disastrous for one and all.

.  
  
  
  
  
  
  
  

* * *

**About Hinan Ali**

Hinan is a graduate from National Institute of Technology (NIT), Srinagar and is currently working at Centre for Civil Society. His subjects of interest include politics, psychology and philosophy. He enjoys reading Camus, Dostoyevsky, Rand, and Mises. Other than that, he takes French language classes in his free time and actively engages with people to gain newer perspectives.

## India Urgently Needs A ‘National Repeal Laws Day’

Original: https://www.spontaneousorder.in/p/india-urgently-needs-a-national-repeal-laws-day

Author: Spontaneous Order

Published: 2019-01-15T11:13:34.000Z

Topics: law-repeal, regulatory-reform, civil-liberties, economic-freedom

> The recent months have been momentous for the Indian Judiciary, with the Supreme Court finally scrapping two illiberal colonial era laws after decades of litigation and public pressure. Section 377 and 497 of the Indian Penal Code are perhaps prime exam..

**Summary:**

India urgently needs systematic repeal of archaic, obsolete, and counterproductive laws inherited from colonial times or created post-independence, which threaten citizens' everyday liberties and burden the legal system. Recent Supreme Court decisions scrapping Section 377 and 497 of the Indian Penal Code highlight progress, as these illiberal laws lingered after Britain repealed them. Examples include the Indian Aircraft Act (1934) requiring permits for kites and balloons; the East Punjab Agricultural Pests Act (1949) mandating able-bodied men over 14 to fight locusts or face 10 days' imprisonment; and the Indian Prisons Act (1894) allowing up to 30 whips for male prisoners. Counterproductive laws like the Naik Girls Protection Act (1929), which increased trafficking, and the Salt Cess (1956), where collection costs by 2014 equaled half its revenue (7.5% of department costs), show noble intentions yielding harm. Over 1,200 central laws have been repealed in the past four years from lists by law commissions and civil society, including CCS's Repeal 100 Laws. To sustain momentum, institutionalize a 'National Repeal Laws Day' on Constitution Day (November 26), where legislatures focus solely on repeals; adopt desuetude for unused laws; and mandate sunset clauses in new legislation for periodic review. This classical-liberal approach ensures a 'living' legal framework protects social and economic freedoms.

**Key points:**

- Supreme Court recently repealed colonial-era Section 377 and 497, but thousands of similar archaic laws remain, risking citizens' liberties.
- Over 1,200 central laws scrapped in past four years from curated lists, yet repeal must be institutionalized to avoid political whims.
- Propose annual 'National Repeal Laws Day' on November 26 for legislatures to exclusively repeal obsolete laws.
- Encourage desuetude to automatically repeal unused laws and sunset clauses in new legislation for mandatory reviews.

**By Parth Shah**

* * *

The recent months have been momentous for the Indian Judiciary, with the Supreme Court finally scrapping two illiberal colonial era laws after decades of litigation and public pressure. Section 377 and 497 of the Indian Penal Code are perhaps prime examples of archaic laws that we inherited from the British Raj, and held onto even after our colonial masters scrapped these from their own law books. While the repeal of these two bad laws was greatly celebrated by people across the country, we should also extend the same momentum to purging our law books of the thousands of similar laws that range from the archaic to the disastrous. Not only do these bad laws plague our legal system, but also put everyday liberties of our citizens at risk.

Take the Indian Aircraft Act (1934) for instance, which classifies all maneuverable flying devices as aircrafts and hence, requiring a permit. This would technically mean that flying kites and even balloons would require a permit, and in effect make most of us, including the Prime Minister,  law-breakers! Or take the East Punjab Agricultural Pests, Diseases and Noxious Weeds Act of 1949, which demands all able-bodied men over the age of 14 to make themselves available to fight off locusts upon being summoned by drumbeats, or face 10 days imprisonment. The legacy of these archaic laws does not just stop at the doors of the prison, since there are provisions in the Indian Prisons Act of 1894 that allow male prisoners to be whipped up to 30 times!

Many of these laws are outwardly ridiculous. There are many more laws that may seem alright on paper, but turn inefficient or counterproductive upon its implementation. The Naik Girls Protection Act of 1929 is a classic case of laws made with noble intentions having disastrous consequences. A law intending to stop the institutionalised trafficking of girls from the Naik community, it eventually resulted in several Naik girls being wrongly branded as prostitutes and inadvertently led to increased trafficking of girls from non-Naik communities. The Salt Cess (1956) was conceived by the Indian government to cover the costs of running the Salt Department, but by 2014 the cost of simply collecting this cess amounted to half of the revenue and constituted barely 7.5% of the total operating cost of the Department.

It also worthwhile, at this juncture, to ask the larger question as to why we maintain a dedicated salt department (manned by officials of the ‘Indian Salt Service’) to tax and regulate the production of salt, in a country where the very act of *swaraj* was highlighted through a rebellion against the taxation and regulation of salt, is something that the policy makers as well as the public need to introspect.

While law commissions have published lists of bad laws several times in the past, it is only during the past few years that we’ve seen at least sporadic bursts of political effort towards the repealment of these laws. Riding on this wave, over 1200 central laws, curated from reports published by the law commission and civil society organisations (including CCS’ own [Repeal 100 Laws](https://ccs.in/research/repeal-100-laws) and [Repeal of State Laws compendiums](https://ccs.in/research/repeal-laws-compendium)), have been scrapped over the past 4 years. But to ensure that the process of repealment is not a perfunctory exercise driven purely by the mood of the party in power, it is necessary to institutionalise the idea of repealment both as an annual exercise and as an apparatus embedded in every new legislation.

An annual “National Repeal Laws Day” could be institutionalised, preferably on the same day as that of the Constitution Day, November 26th. The parliament or state assembly would do only one task on this day–repeal laws. Much like the Swachh Bharat day, the National Repeal Law day would act as an annual event wherein all the numerous departments and ministries work together to clean up our law books.

The practice of desuetude could also be encouraged and adopted, wherein certain laws that have not been in use for a set amount of time are automatically repealed. Adding a ‘sunset’ clause to all new legislations would ensure that each new regulation would be put under review after a pre-decided amount of time, and be ratified again only if it is still relevant. Such a sunset clause would ensure a periodic checks on legislations, and embed the need for review and repeal at the time of drafting the legislation itself. It is due to the lack of such a sunset clause that we continue to have these British era laws, long after the sun having set on the British empire.

The constitution of India has been long heralded as a ‘living’ document. With over a hundred amendments, it is not just the longest constitution in the world but also among the most frequently updated. Yet, to ensure that our ‘living’ constitution and the nation it breathes life into stays in the prime of its health, it is necessary not just to add new legislations but also to routinely discard the bad ones. It is only by giving due focus to the repealment of obsolete, redundant and freedom-threatening laws that we ensure the well-being of our nation, as well as the social and economic liberties of our citizens.

Read more: [https://spontaneousorder.in/laws-with-flaws/](https://spontaneousorder.in/laws-with-flaws/)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

##  E-Waste: A Ticking Time-Bomb

Original: https://www.spontaneousorder.in/p/e-waste-a-ticking-time-bomb

Author: Spontaneous Order

Published: 2019-01-15T10:30:30.000Z

Topics: e-waste, environmental-regulation, extended-producer-responsibility, informal-economy

> We have truly entered the digital age. Technology has permeated into every aspect of human life. Cars, smartphones and now, virtual assistants- our existence is defined by technological intervention. Their ubiquity, though, is marked by a short shelf l...

**Summary:**

India, the world's 5th largest e-waste producer, generates 2 million tonnes annually, but only 5% is formally recycled, with 90% processed informally amid soil contamination from heavy metals like mercury, lead, and chromium. The informal sector, employing over a million, dominates due to operational efficiencies from bypassing costly regulations—such as State Pollution Control Board consents, e-waste licenses, and labor rules—that inflate formal recyclers' costs into lakhs, enabling informals to offer twice the price for scrap. Formal firms in areas like Faridabad operate at just 39.9% capacity, further limited by prohibitions on reselling refurbished goods without producer approval. E-Waste Management Rules 2011 introduced Extended Producer Responsibility (EPR) to shift waste to regulated formal channels, but producers implemented only cheap aspects. Amendments in 2016/2018 added collection targets, penalties, Deposit Refund Schemes, Producer Responsibility Organisations, and eased collection centres, yet objectives remain unmet. From a classical-liberal lens, regulatory burdens stifle formal competition; the author urges stringent enforcement, awareness campaigns by government, civil society, and citizens to curb irreversible environmental damage.

**Key points:**

- India generates 2 million tonnes of e-waste yearly, with only 5% formally recycled and 90% informal, causing heavy metal contamination.
- Informal recyclers employ over 1 million and pay twice the scrap price by evading licenses and regulations costing formal firms lakhs.
- Formal recyclers operate at 39.9% capacity due to compliance burdens and resale restrictions.
- EPR rules since 2011, with 2016/2018 amendments, have failed to divert e-waste to formal sector despite new targets and initiatives.
- Stringent rule enforcement and mass awareness campaigns are essential to manage e-waste.

**By Devansh Mahajan**

* * *

We have truly entered the digital age. Technology has permeated into every aspect of human life. Cars, smartphones and now, virtual assistants- our existence is defined by technological intervention. Their ubiquity, though, is marked by a  short shelf life owing to rapidly advancing technology bringing in a new wave of upgraded products, leaving the earlier ones, outdated, and hence redundant. This is especially true in the case of smartphones. This implies that the kind of waste that humans generate has also undergone a significant change. Not only has its quantity exponentially increased over the years, but it has also become highly non-biodegradable and hazardous, due to the presence of toxic metals like mercury, lead, and chromium. It is thus, essential to ensure proper recycling/disposal of this Electronic waste ( E-Waste).  

India is among the 5th largest producer of E-Waste in the world, generating 2 million tonnes of E-Waste annually. Of this, only 5% is recycled, with 90% of the recycling  occuring in the informal sector. Further, [studies](https://bit.ly/2xvi4Ja) show that the soil in areas of informal recycling activities is contaminated with heavy metals due to the open dumping of non-recycled hazardous components along riversides or on the ground, without proper treatment. Why has such a scenario emerged?  

Employing [over a million people](https://ccs.in/sites/default/files/research/doing_business_in_delhi.pdf), the informal recycling industry has a wider market reach and understands the lay of the land, enabling them to perform better on various parameters like producer-supplier relations, market dynamics, and access to vital business information which may not be available to a nascent firm. The informal sector enjoys operational efficiency since it bypasses various government licenses and safety regulations, while a formal recycling unit would have to obtain consent licenses from State Pollution Control Board (SPCB), an E-Waste license, a  proof of installed capacity among many others – [the costs of obtaining which runs into lakhs](https://ccs.in/sites/default/files/research/doing_business_in_delhi.pdf). Additionally, they have to undergo auditing and inspections and abide by labour regulations, all of which further inflate the operation costs. As a result, the informal recyclers end up offering at least twice for the same digital scrap as their formal counterparts.  

A [survey](https://ccs.in/sites/default/files/research/doing_business_in_delhi.pdf) carried out  by Centre for Civil Society found that six recycling firms in Faridabad, Rohtak, Manesar and Hapur were operating at 39.9% of their total capacity to recycle e-waste. Access to India’s huge secondary markets for refurbished goods is another avenue through which informal recycling establishments make profits, since resale is always more profitable than recycling a metal. Authorised Recyclers on the other hand, have to obtain permission from the producer companies to sell refurbished goods, which is more than often denied due to a fear of creating a parallel market.  

In 2010, an informal recycler [died after exposure to Cobalt 60](https://www.thehindu.com/news/national/Man-exposed-to-radiation-dies-another-critical/article16372825.ece) while attempting to dismantle radioactive pipes in Delhi. This invited significant media backlash, taking cognizance of which India introduced E-Waste Management (EWM) Rules in 2011.The major purpose behind enacting the EWM Rules was to divert the supply of E-Waste from the informal to the formal sector which could be regulated and organised in order to ensure minimum safety measures. The concept of Extended Producer Responsibility (EPR) was introduced in the same, which made the manufacturer/seller responsible for ensuring the E-Waste generated by their products reach the authorised seller. Clearly the intended objective has not been achieved as the producers only implemented a few inexpensive aspects of EPR.

To plug the deficiencies, EWM Rules, 2016 (and subsequently EWM Amendment Rules 2018), were enforced, which provided a mechanism for holding the producers accountable for fulfilling their obligations under EPR by introducing mandatory collection targets, and financial penalties in case of non compliance. Introduction of initiatives such as Deposit Refund Scheme (DRS), which incentivises consumers to return used products to producers for a refund; Producer Responsibility Organisations (PROs), which aid producers in setting up and running collection centres and spreading awareness about e-waste to consumers; and easing the authorisation for establishing Collection Centres (CCs) aim to incentivise producers to manage e-waste better.  

It is to be seen whether these measures can change the existing E-Waste management scenario. A stringent enforcement of the rules and regulations, along with  massive awareness campaigns are the need of the hour. The government, the civil society and the people in general will need to become more conscious and responsible in order to contain the irreversible damage that E-waste is causing to our environment.  

Read more: [https://spontaneousorder.in/lets-talk-trash/](https://spontaneousorder.in/lets-talk-trash/)

* * *

**About Devansh Mahajan**

Devansh has completed his Master's in Economics from Ambedkar University Delhi. An avid sports enthusiast, he hopes to work in the government someday, bringing far-reaching changes with one stroke of his pen.

## Duty to Inform Women About Abortion Services Violates Free Speech: US Supreme Court

Original: https://www.spontaneousorder.in/p/duty-to-inform-women-about-abortion-services-violates-free-speech-us-supreme-court

Author: Spontaneous Order

Published: 2018-12-05T13:07:50.000Z

Topics: free-speech, first-amendment, abortion-disclosures, reproductive-rights, us-supreme-court

> US Supreme Court has recently declared that state cannot make it mandatory for medical clinics to disclose information on abortion facilities or the fact whether they are licensed or not. In National Institute of Family and Life Advocates v. Becerra, th..

**Summary:**

In National Institute of Family and Life Advocates v. Becerra, the US Supreme Court struck down California's FACT Act, which required licensed crisis pregnancy centers to inform women of free/low-cost state abortion services and unlicensed ones to disclose their status, ruling it a content-based regulation violating the First Amendment by compelling speech contrary to pro-life clinics' beliefs. The Court rejected the Zauderer test for factual disclosures, deeming abortion 'controversial,' and distinguished it from routine health disclosures without providing a clear test. Author Karan Tripathi criticizes this as a restrictive First Amendment interpretation that underplays disclosures' role in medicine, contradicting precedents like Planned Parenthood v. Casey (disclosures aid informed choice) and Zauderer (factual additions to commercial speech permissible). He argues abortion involves women's health, bodily autonomy, and legal rights, not just morality; state aid existence is factual, preventing information asymmetry without viewpoint discrimination, as pro-life centers withhold such info unlike state-run ones. The ruling invites subjective judicial challenges to regulations, undermines women's right to know about abortion services, and weakens future abortion laws from a classical-liberal emphasis on informed individual choice over absolute speech protections in professional contexts.

**Key points:**

- US Supreme Court invalidated California's FACT Act as a First Amendment violation for compelling crisis pregnancy centers to disclose state abortion services.
- Disclosures in medicine, including abortion info, are reasonable to enable informed patient choice and prevent information asymmetry, per precedents like Casey and Zauderer.
- Abortion is a health, legal, and reproductive rights issue, making state aid facts enforceable without endorsing viewpoints.
- Ruling lacks a test for 'health-related' disclosures, enabling subjective challenges to regulations.
- Pro-life centers' withholding of abortion info justifies targeted mandates, countering viewpoint discrimination claims.

**By Karan Tripathi**

* * *

US Supreme Court has recently declared that state cannot make it mandatory for medical clinics to disclose information on abortion facilities or the fact whether they are licensed or not. In National Institute of Family and Life Advocates v. Becerra, the apex court has opined that such regulatory declarations violate the First Amendment of the medical clinics which protects their freedom of speech. This judgment not only restrictively interprets the First Amendment jurisprudence, but also opens floodgates of possible multiple litigations challenging any state regulation requiring compliance.

The case was an appeal seeking an injunction on The [California Reproductive Freedom, Accountability, Comprehensive Care, and Transparency Act](https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB775) (FACT Act) which sought to regulate crisis pregnancy centers — ‘pro-life centers’ that offer pregnancy-related services. It mandated two requirements:  
a. Clinics that are licensed must notify women that California provides free or low-cost services, including abortions, and give them a phone number to call.  
b. Unlicensed clinics must notify women that California has not licensed the clinics to provide medical services

The court ruled the FACT ACT to be violative of the First Amendment as it created a ‘content-based’ regulation, which restricted the content of the commercial speech accrued to the medical clinics. Content- based regulations compel a person to add substance to her speech which she may not be willing to add or which is contrary to her beliefs. Since the disclosure regulation required certain ‘speech’ to be made by the clinics, the court ruled it to be an unduly burdensome and unnecessary as it tends to control the harm which is purely ‘hypothetical’ and not potentially real. It also refused to consider the Zauderer test which protects regulation on professional speech from being declared unconstitutional if the subject matter is uncontroversial or is a purely factual information by calling abortion, ‘anything but uncontroversial’.

The ruling is disturbing as its restrictive understanding of the First Amendment underplays the significance of disclosures, especially in the profession of medicine. In Planned Parenthood of Southeastern Pa. v. Casey, the Supreme Court held that statutory disclosure requirements in medicine does not violate First Amendment as they amount to ‘reasonable’ measures to help patient make an informed choice. In the present case, the court did recognise health disclosures to be an exception to the rule of content-based regulation but refused to recognise abortion related information to qualify as one. While doing so, no reasoning is provided for such exclusion and no general test has been laid down for recognising an information as ‘health-related’. This enables any government regulation to be challenged on the ground of First Amendment and leaves the adjudication on the subjective choice of the judges, who will not base their decisions on reasoned principle. What also goes unrecognised, is the fact that such disclosures, instead of curbing, enables the exercise of free speech as it prevents information asymmetry and promotes informed choice.

In Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, the apex court had held that disclosure requirement on commercial speech does not violate First Amendment if the subject matter of disclosure is a factual information or is uncontroversial. It differentiated disclosures from outright prohibition on speech by saying that in the former, the service provider is not prohibited to say whatever she desires; she just have to add the disclosures to her speech. In the present case, the court refused to apply Zauderer by calling abortion a ‘controversial’ topic. The court gets its reasoning wrong on two grounds:  
a. Abortion is not just a religious or moral issue but it directly affects the health of the pregnant woman. Moreover, a person’s control over her body and its reproduction as a right also makes abortion a legal issue. Court simply can’t deny information on abortion services because some pro-life centres consider it to be against their religious beliefs. This would lead to a large number of women risking their lives by unknowingly/unwillingly continuing with their pregnancy.  
b. Even if abortion is a controversial issue, existence of state assistance for abortion services is a fact and not a debatable truth. A clinic might not provide an abortion service for religious purposes but disclosing to the patient about existence of state sponsored programmes is a disclosure of a mere factual information which the state can enforce as a requirement. By doing so, the state is merely informing the women about existence of certain assistance programmes and is not promoting one viewpoint over the other

Another ground upon which the court has based its judgment is ‘viewpoint discrimination’. The FACT Act does not extend cover to state-run medical programs that provide abortions. The court held that it is discriminatory towards private ‘pro-life’ centres as it puts an undue burden on them and it discriminates against their viewpoint. In this reasoning, the court did not pay attention to the possibility that these pro- life clinics are more likely to not to inform their patients about abortion services as compared to the state- run centres; hence, the statutory requirement becomes imperative.

This judgment is problematic as it takes a restrictive understanding of the First Amendment and it fails to appreciate properly the earlier cases of the same court on disclosure requirements being not a burden on commercial speech. What is even more problematic, is its regressive understanding of abortion as it fails to see it as imperative to women’s reproductive health and rights. A woman must have a right to know about abortion services even if her clinic doesn’t support abortion due to religious or moral reasons. However, this judgment not only undermines that right but also puts any future regulatory requirement or law on abortion on a very vulnerable position.

* * *

**About Karan Tripathi**

Karan Tripathi is an undergraduate student at Symbiosis Law School, Pune and takes up additional courses at Symbiosis School for Liberal Arts. He holds diplomas in European Union Legal Studies and IPR-Competition Laws and certification in International Environment Law and Policy. Apart from law, Karan is a devoted patron of jazz, ancient languages, cinema, and dreams to act alongside Isabelle Huppert one day.

## Service Aggregators: Is the Policy Atmosphere Conducive?

Original: https://www.spontaneousorder.in/p/service-aggregators

Author: Spontaneous Order

Published: 2018-11-20T10:08:12.000Z

Topics: service-aggregators, sharing-economy, regulatory-reform, consumer-protection

> We live in interesting times. The owner of the biggest taxi business in the world doesn’t own a single taxi, and the fastest growing player in the hospitality sector doesn’t own a single hotel. All this has been made possible thanks to technological a

**Summary:**

Service aggregators like Uber and Airbnb, powered by technological advancements in data analytics, have revolutionized the services sector by enabling a sharing economy and peer-to-peer interactions that reduce information asymmetries through ratings, reviews, license verification, and robust dispute resolution like 24/7 helplines and insurance. These mechanisms provide superior consumer protection compared to traditional regulations, which are overly prescriptive—taxi rules require government judgment of driver character, road knowledge, and minimum fleet sizes; B&B rules mandate room sizes, irons, internet, wardrobes with at least four hangers, and prohibit separate kitchens despite CCS research showing kitchens as a key requirement for most Airbnb customers. Such rigid, uniform specifications restrict new entrants, cause efficiency losses, and mismatch consumer preferences, with limited state enforcement capacity. Aggregators' disclosure-based checklists and reputation systems dynamically weed out bad actors via notifications, warnings, and removals. The post urges policymakers to reform the regulatory framework to enable innovation and creativity suited to the dynamic services sector, rather than treating aggregators at par with legacy entities in a status-quoist manner.

**Key points:**

- Service aggregators outperform traditional regulations via tech-driven trust mechanisms like ratings, reviews, and dispute resolution for better consumer protection.
- Existing taxi and B&B rules are prescriptive, e.g., minimum fleet sizes and mandatory amenities like four clothes hangers, restricting market entry and efficiency.
- CCS research identifies key consumer preferences like kitchens, ignored by rigid B&B regulations that prohibit them.
- Policymakers should modify regulations to foster sharing economy innovation instead of imposing parity with legacy businesses.

**By Devansh Mahajan**

* * *

We live in interesting times. The owner of the biggest taxi business in the world doesn’t own a single taxi, and the fastest growing player in the hospitality sector doesn’t own a single hotel. All this has been made possible thanks to technological advancements, particularly in the services sector, and rapid developments and innovations in the field of data analytics. This revolution has obviously created ripples in the traditional markets, leaving several old players as well as policies redundant.

Consumer protection forms the premise of any government regulation concerning businesses. It ensures that the consumers are not cheated on account of the information asymmetry that exists between the two parties, and the businesses follow the law of the land. The emergence of these [technological mediators](https://ppverbeek.org/mediation-theory/) or service aggregators has brought with it new technology enabled trust mechanisms, which have proved much more effective than the existing rules and regulations in providing high-quality services. These have increased information exchange between consumers and enabled a collective governance framework on the platform.

The aggregator business is based on sharing economy and Peer to Peer interaction model. The Internet has enabled people to realise gains they were unaware of; either by renting their assets or by getting services like cabs, rooms etc. at nominal costs and more importantly, without any inconvenience. This model realises user expectations by reducing the information asymmetries through crowd-sourcing and making information on past transactions inexpensive and transparent. This is being majorly done by collecting customer feedback through ratings and reviews. For establishing the credibility of the suppliers, the aggregators have taken steps like setting a minimum threshold of ratings, verification of licenses and providing access of their personal profiles to the consumer. Effective and efficient consumer – supplier interactions are built on the bedrock of a robust dispute redressal mechanism. Thus, the aggregators have made sure that services like 24×7 helplines, chat support system etc are at the easy disposal of the consumer. For the supplier, the aggregators have made the working environment more secure by introducing insurance schemes to safeguard their property and life. These new innovative mechanisms have come as a breath of fresh air for the dilapidated industries.

The services sector, in general, has always suffered on account of excessive and overbearing regulations. For example, the rules concerning taxis require the government to judge the character of the taxi driver before allowing him to ply on the road, or to ascertain whether he has adequate knowledge of the roads. There is also a restriction on the minimum number of fleet of cars that a taxi business needs to have. Similarly, a Bed and Breakfast (B&B) establishment has to complete a long list of checks before it can operate, including a mandatory minimum size of the room. These operations are regulated by periodic inspections. Such normative judgements should ideally have no place in policymaking.

Rigid rules and uniform service specifications across the industry restrict entry of new enterprises, and hence the industry suffers from efficiency losses. Consumer protection is ensured by allowing the consumers to “make a written complaint to the prescribed authority.” As opposed to this, Airbnb employs specific requirement system in case of room amenities, leaving it to the consumer to navigate the wide range provided. The reputation system employed by Airbnb continuously identifies and punishes underhandedness and weeds out troublesome people from the platform. Any inefficiency or misconduct leads to a negative change in ratings. As soon as the minimum threshold is reached, Airbnb first notifies the user, warns them and finally removes the user (host or guest) from the platform in case of continued non-compliance.

The regulations tend to be overly prescriptive or entirely prescriptive, while the state capacity for enforcement is limited. The differences between traditional suppliers and aggregators make it impractical to co-opt existing regulations. Moreover, the new hi-tech tools brought to the market by the service aggregators have made existing poor regulations, redundant too. A cursory reading of the current regulatory framework depicts the mismatch between the rules in place and the demands of the new-age consumers. For instance, the acts governing B&Bs tend to make sweeping assumptions about consumer preferences, making mandatory, to include facilities like an iron and iron board, internet connection, and wardrobe with at least 4 clothes hangers. Also, the guests are prohibited from running a separate kitchen in the household.

An analysis done by the research team at the Centre for Civil Society (CCS) found that kitchen was a key requirement for a majority of customers of Airbnb. Contrastingly, Airbnb has a checklist with the list of amenities that a host is free to select from, following a policy focused on disclosure instead of the specifics. It specifies that “None of these things are required, but sometimes they add a nice touch to help guests feel welcome.” While a customer is booking an establishment, Airbnb lists out the facilities available and not available, to facilitate informed decision-making.

Similarly, when a cab can be booked, its location tracked, and the approximate final fare shown by a smartphone, the need of a neon signage on top of taxi signalling its availability, or a meter in the cab becomes redundant; all of which are mandatory under the current rules.

Uber and Airbnb have given us a glimpse of the future that awaits us. The world is turning more interactive and sharing economy is going to be the norm. Seldom do such opportunities arise for the policymakers, where they get a chance to curate policies for hitherto unexplored arenas. There are two broad approaches available now; to either treat these service aggregators at par with the existing entities, creating a prohibitive, status-quoist environment or modifying the existing regulatory structure in such a way that it enables innovation and creativity which is more suited to handle the highly dynamic services sector.

*References:  
1) http://www.delhi.gov.in/DoIT/DoIT\_Transport/trrs31.pdf&sa=D&ust=1541073018621000&usg=AFQjCNFQ3hE -1ZycJw9yLOP6qCN5A0zwZQ  
2) http://delhi.gov.in/wps/wcm/connect/db6f198043b8a7448991990fa6aaa61e/Bed%2Band%2BBreakfast%2B% 2BActs.pdf?MOD%3DAJPERES&sa=D&ust=1541073018624000&usg=AFQjCNGqoyq0jWRa1ar7bI-s0YJ2GfO2UQ  
3) https://www.google.com/url?q=https://www.airbnb.co.in/help/article/2159/how-does-my-experience-s-ratin g-or-reviews-affect-my-ability-to-host?q%3Dnegative%2520reviews&sa=D&ust=1541073018626000&usg=AFQ jCNH2dctwTQQu4kJbL9WhGn2-t5rwwA  
4) https://www.google.com/url?q=https://www.airbnb.co.in/hospitality&sa=D&ust=1541073018627000&usg=AF QjCNGWJsTp\_4jEQB27Y84QdnYjszgJjw*

[Read more.](https://spontaneousorder.in/%ef%bb%bfe-waste-a-ticking-time-bomb/)

* * *

**About Devansh Mahajan**

Devansh has completed his Master's in Economics from Ambedkar University Delhi. An avid sports enthusiast, he hopes to work in the government someday, bringing far-reaching changes with one stroke of his pen.

## The Power of a Gentle Nudge!

Original: https://www.spontaneousorder.in/p/the-power-of-a-gentle-nudge

Author: Spontaneous Order

Published: 2018-10-31T12:57:38.000Z

Topics: nudge-theory, behavioral-economics, public-policy, choice-architecture

> RINGG. RINNGGG. RINNNGGGG. Snooze. Repeat. Most of us are unfortunately too familiar with this scenario: we set the alarm for early morning with the intention of getting some extra work/study done, squeezing in a run before getting to work or hitting th..

**Summary:**

Richard Thaler's Nobel-winning Nudge Theory reveals that humans prioritize convenience over rational long-term choices, creating conflict between the 'far-sighted Planner' favoring welfare and the 'myopic Doer' succumbing to temptation. Subtle nudges can align these by making wise options easier, as in exchanging gym passes with a buddy to ensure 6 AM attendance, serving short-term social incentives and long-term health. In public policy, this classical-liberal approach—subtle changes preserving choice—has succeeded: UK's 2012 auto-enrollment mandate tripled private-sector pension scheme membership in four years by defaulting workers in unless they opt out. Spain leads organ donation via similar opt-out registration. Nudges must adhere to Thaler's principles: transparency, easy opt-out, and genuine welfare improvement. The post, from a classical-liberal perspective critiquing pseudo-socialism, urges exploring such 'gentle nudges' for Nepal's socio-economic challenges without infringing freedom.

**Key points:**

- Humans act on convenience rather than pure rationale, requiring nudges to bridge short-term temptations and long-term welfare.
- UK's auto-enrollment in pensions tripled participation post-2012 by making saving the default with opt-out.
- Spain excels in organ donation through opt-out registration, demonstrating nudge efficacy.
- Effective nudges demand transparency, easy reversal, and welfare focus to preserve choice.

**By Spontaneous Order**

* * *

RINGG. RINNGGG. RINNNGGGG. Snooze. Repeat.  
Most of us are unfortunately too familiar with this scenario: we set the alarm for early morning with the intention of getting some extra work/study done, squeezing in a run before getting to work or hitting the gym. However, we end up either hitting snooze till eternity or turning off the alarm altogether.

Being the rational people we are set out to be, shouldn’t we be making the most efficient choices? In this case, getting up bright and early to tackle our tasks head-on!

Richard H. Thaler’s Nobel Prize-winning [Nudge Theory](https://qrius.com/do-not-bank-on-poverty-alleviation-for-environmental-salvation/) explains with refreshing clarity that we as human beings are wired to act on convenience rather than rationale. Simply put, we opt to do what’s easier than what’s wiser. It comes as no surprise then that the “far-sighted Planner” in us – who roots for our long-term welfare – is generally at odds with our “myopic Doer”, battle-stricken in a tightrope act of temptation vs. self-control.

Take heart though, because with the right incentives often in the form of nudges, aligning interests for short and long-term welfare is indeed possible. For example, planning to meet a gym buddy at 6 AM, better yet exchanging gym passes with that person would be a strong incentive. Not showing up would mean your friend wouldn’t get access to the gym. So getting to the gym would serve both: the short term interest of not offending your friend and the long-term interest of getting healthier.

The nudge theory has broad applications in the public policy arena as well. The idea being: creating subtle policy changes that make it easier for people to make the best choices for themselves and their families. This approach has been widely successful. In UK, active membership of pension schemes in the private sector nearly tripled in the four years following 2012, when an auto-enrollment scheme was mandated. This scheme encouraged savings (which was what the people wanted but did not get around to doing) by automatically enrolling them in a firm’s pension scheme unless formally asked to be removed. Similarly, Spain is a leader in organ donation since all its citizens are registered as organ donors unless they opt out. Following suit, many economies have started exploring with “nudge units”.

It is however imperative that people retain the freedom of choice during this process. In fact, according to Thaler, proper nudging should be led by three guiding principles: transparency, ease of opting out and improving the person’s welfare.

FOOD FOR THOUGHT: We in Nepal are wrestling with our own array of socio-economic problems. In light of the demonstrated success of nudge theory, it can be interesting to explore where and how these subtle nudges can be capitalized in our policy context. What do you think?

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## PMJAY: Yay or Nay?

Original: https://www.spontaneousorder.in/p/pmjay-yay-or-nay

Author: Spontaneous Order

Published: 2018-10-31T12:19:28.000Z

Topics: healthcare-policy, health-insurance, government-schemes, private-sector-incentives

> The Prime Minister’s 2018 Independence Day speech marked the launch of Ayushman Bharat: a ‘pathbreaking’, ‘game-changing’ initiative being viewed as the beacon for transforming healthcare for the underprivileged in India. The Ayushman Bharat-Nat

**Summary:**

PM-JAY, launched in 2018 as part of Ayushman Bharat, promises health insurance coverage up to Rs 5 lakhs per year for 10 crore poor families (50 crore people), identified via SECC, to prevent poverty from out-of-pocket hospitalization costs that pushed 55 million Indians into poverty annually per PHFI study. Despite noble aims of universal health coverage, the scheme faces severe flaws from a classical-liberal lens prioritizing market incentives and efficient policy. Budget allocation of Rs 2,000 crore falls drastically short of estimates (Rs 6,000-12,000 crore by CEO Indu Bhushan and NITI Aayog), equating to just Rs 200 premium per family versus needed Rs 1,000-1,200. Low government-set reimbursement rates deter private hospital empanelment, as criticized by the Indian Medical Association, risking quality compromise and corruption—echoing failures of predecessor RSBY, including service denials, delayed payments, top-up pricing, monopolistic exploitation in tier-II/III cities, and unnecessary procedures due to absent regulation. Without addressing these implementation gaps, PM-JAY repackages RSBY's broken model, unlikely to deliver on promises amid pre-election hype.

**Key points:**

- PM-JAY's Rs 2,000 crore budget is insufficient against Rs 6,000-12,000 crore estimates, underfunding coverage for 50 crore beneficiaries.
- Low reimbursement rates discourage private hospital participation, repeating RSBY's issues of denials, top-ups, and corruption.
- Lack of regulation enables monopolies, unnecessary procedures, and exploitation, especially in tier-II/III cities.
- Scheme fails to learn from RSBY's flaws, prioritizing narrative over effective design changes.

**By Shivangi Sharan**

* * *

The Prime Minister’s 2018 Independence Day speech marked the launch of Ayushman Bharat: a ‘pathbreaking’, ‘game-changing’ initiative being viewed as the beacon for transforming healthcare for the underprivileged in India. The Ayushman Bharat-National Health Protection Mission has two components: first, the creation of 1.5 lakh Health and Wellness Centres to cater to primary health care. The second component is Pradhan Mantri Jan Arogya Abhiyan (PM-JAY), which aims to provide health insurance for over 10 crore economically disadvantaged families (approximately 50 crore citizens), with coverage of upto 5 lakhs per family per year for secondary and tertiary care hospitalisation. Beneficiaries have been identified as per the latest SECC (Socio-Economic Caste Census), covering both rural and urban areas. The scheme would enable these beneficiaries to avail services in both public and private empanelled hospitals.

PM-JAY aims to prevent underprivileged families from slipping into poverty due to out-of-pocket spending on hospitalisation. As per a study conducted by the Public Health Foundation of India, such expenditure pushed 55 million Indians into poverty in a single year, out of which 38 million fell below the poverty line. Citing PM-JAY as the solution, Arun Jaitley in March announced Rs 2,000 crore in the 2018 budget for the program. Prime Minister Narendra Modi in his Independence Day speech touted it as the world’s largest state-sponsored health insurance scheme. While the stated intent of PM-JAY is noble, intentions alone do not translate to good policy results. The policy’s provisions warrant scrutiny for the extent to which they match up to the needs on-ground, or if they match up at all.

Firstly, despite the budget being set at Rs 2,000 crore, the government itself is unclear on how much the scheme will actually cost. In August, Dr Indu Bhushan, the CEO of Ayushman Bharat, estimated the requirement to be between Rs 6,000 and 8,000 crores. Niti Aayog estimated the costs to be between Rs 10,000 and 12,000 crore, implying a premium of Rs 1,000-1,200 per family per year. The current budgetary allocation of Rs 2,000 crore translates to a premium of Rs 200 per family per year. Therefore, the only point of clarity regarding the cost is that it is far, far away from being adequately met.

Secondly, the payment for procedures is to be done as per reimbursement rates set by the government. These rates have been criticised for being too low, which is a major disincentive for private hospitals to enroll for empanelment. The Indian Medical Association rejected the package rates set by the Government in June, calling them ‘unacceptable’, stating that such low rates will translate to a compromise on the quality of services being provided, and foster a breeding ground for corruption. Low pricing proved to be a major hurdle for Rashtriya Swasthya Bima Yojana (RSBY), the predecessor which has been subsumed under Ayushman Bharat. RSBY’s failures don’t seem to have been instructive for Ayushman Bharat, whose policy design does not cover the gaps that were left wanting under RSBY.

Beneficiaries of RSBY faced challenges including the denial of services by private facilities, which was reported in some cases due to delayed reimbursement to private hospitals. The second major flaw was that of top-up pricing: hospitals may increase the price of the service, forcing patients to pay out of their own pockets. This is intrinsically linked to another key factor: accessibility of health facilities in a given area. If a hospital has a monopoly in an area, there is no check on the pricing exposing patients and their families to exploitation. This was true especially of tier-II and tier-III cities in the case of RSBY, and will also likely be the case for Ayushman Bharat. The government itself has stated that its initial hopes to attract the private sector for building multiple hospitals in these cities has not been met.

Even in a scenario where there exist multiple private hospitals in areas to check irrationally high prices, it would do us good to remember that these charges aren’t supposed to be paid by the beneficiaries in the first place, but by the government under the ambit of Ayushman Bharat. In some cases, patients have also been made to undergo unnecessary procedures, while their actual needs have been ignored. This is an outcome of the lack of any regulation mechanism for private facilities. PM-JAY has made no such provisions for such scenarios.

As mentioned earlier, PM-JAY is a policy laiden with good intentions: it aims to realise Universal Health Coverage, to harness India’s demographic dividend and generate economic returns to scale. However, paying attention to narrative is key here. These are promises we’ve heard before, to be delivered through agents that have failed us before. Many a critic have pointed to the hasty announcement of ‘Modicare’ in a pre-election year. PM-JAY marks a significant upgrade in the scope of health coverage from previous insurance schemes like the RSBY to raise goodwill. However, without making corresponding changes in implementation mechanisms, the world’s largest state-sponsored health insurance scheme may end up becoming a shinier repackaging of the same broken box.

***References***

*Bhaskaran, D., (2018, September 25), Ayushman Bharat: An IV drip for healthcare in India, retrieved from  
https://www.livemint.com/Politics/Glb6iL7ZGPgGgsi0IrPDYO/Ayushman-Bharat-An-IV-drip-for-healthcare-in-India.html*

Bhaskaran, D., (2018, September 25), Confident of getting more funds for Ayushman Bharat: CEO Indu Bhushan, retrieved from  
https://www.livemint.com/Politics/kYhU6jUzQHcz4gexCpVUQP/Confident-of-getting-more-funds-for-Ayushman-Bharat-CEO-Ind.html

Das, J., Aiyar, Y., Hammer, J., (2018, September 21), Will Ayushman Bharat Work? Retrieved from http://www.cprindia.org/news/7239  
India.gov.in, National Portal of India., retrieved from  
https://www.india.gov.in/spotlight/ayushman-bharat-national-health-protection-mission

Kohli, N., (2018, June 25), Indian Medical Association rejects package rates under Modicare, retrieved from  
https://www.theweek.in/news/biz-tech/2018/06/25/Indian-Medical-Association-rejects-package-rates-under-modicare.html

National Health Agency, Ministry of Health & Family Welfare, Government of India., (2018, July 6)., Ayushman Bharat, retrieved from https://www.abnhpm.gov.in

Rana, K., (2018, October 13), Ayushman Bharat’s Declared Measures Seem Neither Adequate Nor Practical, retrieved from  
https://thewire.in/health/ayushman-bharats-declared-measures-seem-neither-adequate-nor-practical

* * *

**About Shivangi Sharan**

Shivangi Sharan is an intern with the Centre for Civil Society's Advocacy team/department. A fresh graduate of Political Science from Lady Shri Ram College for Women, she aims to enter the public policy space after pursuing a Master's in the same.

## Why the emerging markets phobia needs to end

Original: https://www.spontaneousorder.in/p/why-the-emerging-markets-phobia-needs-to-end

Author: Spontaneous Order

Published: 2018-10-31T12:01:11.000Z

Topics: emerging-markets, currency-crises, economic-unions, regional-integration

> Living in a time where irrational generalisations often hinder financial decision-making – the art of cold, calculated precision and collusion is necessary for nations to shield themselves against the onslaught of any doubt. The presentOne very relevant

**Summary:**

Investor phobia towards emerging markets (EMs) leads to irrational generalizations, causing currency depreciation even in high-growth economies like India, which saw a YTD 11.69% fall despite being among the least affected, triggered by steeper declines in Argentina and Turkey (>45%). This mirrors the 1997 Asian Financial Crisis, where Thailand's defense of its US Dollar peg exhausted reserves amid large current account deficits and real estate speculation, crippling debt and spilling over to unaffected neighbors like Hong Kong via panicked capital flight. From a classical-liberal viewpoint, such contagion underscores the need for EMs to counter short-term greed and competitive devaluations through coordinated action, rejecting failed supranational models like the EU due to growth disparities. Proposed solutions include forming geographic-political economic unions for collective monetary policy discussions, reciprocal investment mandates akin to Japanese keiretsu, and banking clearing house systems allowing overdrafts with low-interest absorption by partners during crises—e.g., Argentina covering Colombia's $100 million deficit to Romania. This builds trust via binding alliances and domestic trade ecosystems, enabling gradual globalization over rushed, bully-prone international trade.

**Key points:**

- Investor generalizations from crises in countries like Argentina and Turkey cause unnecessary 11.69% YTD currency depreciation in strong EMs like India.
- The 1997 Thai Baht crisis, fueled by current account deficits and real estate oversupply, exhausted reserves and triggered regional contagion despite unaffected economies.
- EMs should form economic unions for coordinated monetary policy and reciprocal investments like keiretsu to prevent competitive devaluations.
- Implement clearing house mechanisms for mutual overdraft absorption with low-interest charges to manage deficits and avert panic-driven debt haircuts.
- Prioritize trusted regional ecosystems before global integration to foster stability and investor confidence.

**By Spontaneous Order**

* * *

Living in a time where irrational generalisations often hinder financial decision-making – the art of cold, calculated precision and collusion is necessary for nations to shield themselves against the onslaught of any doubt.

**The present**  
One very relevant instance of such a generalisation can be seen today with the phobia of emerging markets as foreign investors camp themselves in developed markets and cause currency depreciation. The process continues to devalue currency further as an initial fall in the value of a currency causes investors to pull out even more money from an economy. However, due to the globalised state of the world, this problem does not persist and impact one nation, but several others of a perceived similar stability and economic prowess.  

[

![](https://substackcdn.com/image/fetch/$s_!-STu!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5b095864-e1b3-4f3c-adf1-6bf435742823_300x50.png)



](https://substackcdn.com/image/fetch/$s_!-STu!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5b095864-e1b3-4f3c-adf1-6bf435742823_300x50.png)

  
​​[The data](https://www.xe.com/) above helps indicate this very clearly, where countries like India, that have some of the fastest rates of growth, still witnessed a YTD 11.69% fall due to a major fallout in the currencies of Argentina and Turkey (greater than 45%). While India is still one of the least affected emerging markets in terms of currency devaluations, the fact that the country experiences such downfalls at all despite being one of the most rapidly growing emerging markets does raise eyebrows.

**The past**  
This sentiment, however, is definitely not one that is specific to the modern day. The emerging markets have faced this prejudice for decades, one of the purest examples being the Asian crisis of 1997. [Running large current account deficits](https://qrius.com/why-the-emerging-markets-phobia-needs-to-end/paul%20krugman%20the%20return%20of%20depression%20economics%20pdf), the Thai Baht was being converted rapidly into currencies of foreign exporters. This massive downward pressure on the currency had to be countered by the government to maintain the peg to the US Dollar, which involved selling massive reserves of foreign currency.

Unfortunately, unlike in the case where a currency is devalued – where one can just print money and sell one’s domestic currency – if one wants to elevate the currency value, finite currency reserves are exhausted. This limits the amount of intervention a nation can undertake.

With large amounts of debt circling the nation to fuel its massive infrastructural and economic boom, as soon as the peg was removed (due to the government’s inability to fund it) this debt became insanely expensive, crippling producers and the government.

Furthermore, as most of the speculative boom was attributed to [real estate growth](http://www.columbia.edu/cu/thai/html/financial97_98.html), one of the most illiquid assets of all, as soon as the speculative boom stopped, supply continued to grow rampantly. This can be linked to the fact that real estate projects take years to develop and therefore respond to changes in market forces very late. This contributed to lower real estate prices, causing further damage.

While this was the story in Thailand, most other Asian nations were not directly a part of this narrative. However, the aforementioned emerging markets generalisation became critical in hurting others, as foreign investors refused to put their money in this growing corner of East Asia. In fact, bbooming economies like Hong Kong in slumps, as the likes of Japan, Philippines and China were also affected.

The moral of this lesson seems to be that even if your neighbours commit mistakes, it is on you. Yet, instead of being overwhelmed by the bitter grimness of the truth, the solution would be to support one’s neighbours to support oneself. An interconnected network of dependent economies is in the best interest of everyone.

In the case of developing economies (susceptible to foreign influences in confidence and investment) showing signs of consolidated growth helps bring greater investor confidence and stability. While most may argue about the failure of collusions, with the EU on the tip of everyone’s tongue, the prime issue there is the hegemony in the level of growth and economic prowess between nations.

**What is the solution?**  
Perhaps a solution is to form economic unions of developed economies responsible for collective discussions on the use of monetary policy, to prevent competitive predatoriness within nations formed on the basis of geographic positioning and political alliances.

Such nations could also discuss foreign aid through investment instruments, with a form of reciprocal investment plan like Japanese keiretsu, that mandates nations to invest substantial portions of money in fundamental parts of each others economies ([the way Japan did to firms](https://www.investopedia.com/articles/economics/09/japanese-keiretsu.asp)). While ASEAN does exist, its mandate is very vague and certainly does not emphasise crisis management and collective intervention.

The lack of an incentive to collude in existing supranational alliances deem them redundant, and a choice that nations can choose to avoid to gain from self-benefit that leads to chaos. As is in the case of any oligopoly, it is always in the short-term interest for firms to stop colluding and reap the benefits of their greed, yet reciprocal shareholding prevents such liberties, that are capable of making the proposed alliances mere choices.

Additionally, another system of mutual consolidation that has been a domestic success is that of banking clearing houses. Instead of having frequent payments due to trade, with crushing current trading account deficits, such unions could function on a tightly-consolidated economy that allowed larger overdrafts for nations in dire economic situations. Facilitation of cheaper debt could be done by paying off these overdrafts on an interest.

For instance, if Colombia is currently in a period of instability and has an account deficit of $100 million to Romania, Argentina could pay it off charging a low interest. While this is an example that involves trade with nations outside of the union, if this money was owed to Argentina, they could absorb this, charging interest temporarily until money is paid back. This is far better than panic aggravating the crisis, forcing the nation into eventual haircuts of debt that lead to a loss of trust and poor repayment of credit. Reciprocative trade in the long run could act as payment for this, reducing the net amount paid to the firm to whom debt is owed, where Columbia could sell over-stocked corn to Argentina as compensation.

Trust, therefore, becomes fundamental in maintaining stability, and pronouncing this through formal alliances, binding decisions and forming domestic eco-systems of trade is ideal.

In the face of failed global governments, rushed globalisation gives leeway for malpractice as nations still attempt to maximise their own gains. Thus, a gradual means of introducing globalisation by first establishing trusted domestic eco-political ecosystems, before moving onto cater to the world can become the missing piece in cracking the puzzle of international trade, riddled with bullies trying to punch down its neighbours.

*Rishit Jain is a writing analyst at Qrius.*

[Read more at](https://spontaneousorder.in/gold-problem-india/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Let’s talk trash!

Original: https://www.spontaneousorder.in/p/lets-talk-trash

Author: Spontaneous Order

Published: 2018-10-30T05:39:11.000Z

Topics: waste-management, swachh-bharat, environmental-innovation, market-incentives

> Recently, I happened to pass by the infamous Ghazipur landfill. Unaware and hence nescient, I assumed it to be a hillock with trucks travelling along organised pathways on the ‘hillock’. Imagine my surprise on finding out that the said ‘hillock’ w

**Summary:**

Swachh Bharat Abhiyan has focused narrowly on toilet construction and visible cleanliness, neglecting waste processing despite India generating 62 million tonnes of solid waste annually, with only 60% collected and 15% processed in urban areas. This results in massive opportunity costs, including underutilized compost production capacity of 54 lakh tonnes (only 15 lakh utilised) and power generation potential of 600 MW (only 92 MW generated). The author argues for a narrative shift to view waste as a valuable resource rather than something to hide, emphasizing its profit potential as waste generation is projected to reach 165 million tonnes by 2030. Drawing on classical-liberal principles, the post advocates incentivizing entrepreneurs through reduced stigma, R&D integration, private partnerships with informal kabadiwallahs to formalize the waste market, and promoting innovations like recycling paper (as in Zhang Yin's Nine Dragons) or turning trash into materials (Miniwiz's Trash Lab). Systemic changes beyond targets are needed to create a profitable marketplace for waste processing, yielding monetary benefits for innovators and environmental gains for society.

**Key points:**

- India's Swachh Bharat has prioritized toilet targets over waste processing, leaving 85% of urban waste unprocessed amid 62 million tonnes annual generation.
- Existing infrastructure underperforms: only 28% of compost capacity and 15% of waste-to-power capacity is utilized.
- Shift narrative to treat waste as raw material, incentivize entrepreneurs via R&D and reduced stigma.
- Formalize waste market through private partnerships with kabadiwallahs to organize collection and processing.
- Promote innovations to turn waste into value, preventing environmental harm and generating wealth.

**By Sunaina Mathur**

* * *

Recently, I happened to pass by the infamous Ghazipur landfill. Unaware and hence nescient, I assumed it to be a hillock with trucks travelling along organised pathways on the ‘hillock’. Imagine my surprise on finding out that the said ‘hillock’ was actually a well established dump and the trucks scaled its length frequently to add more dump to the dump! The structure gracing the Delhi skyline along with the likes of Qutub Minar is symbolic of our general attitude towards waste- Waste out of sight is waste out of mind. The vision of a Swachh Bharat has grappled the entire nation, from our currency to our day to day conversations, Swachh Bharat is everywhere. The idea of Swachh Bharat prompts us to keep our surroundings clean. But is it enough to get rid of the garbage from your vicinity?

What has the Swachh Bharat narrative been about and what are its results?  
Swachh Bharat has long had a very singular narrative. The campaign is heavily target driven and limited its scope, by placing its focus on achieving toilet construction targets, and lower stress on the cultural and social obstructions to its use, while paying little or no stress on other important methods of waste management. Even as citizens, many of us associate Swachh Bharat abhiyan with clean surroundings and toilets, and not with how the waste is treated or managed.

India generates [62 million](http://pib.nic.in/newsite/PrintRelease.aspx?relid=138591) tonnes of solid waste annually, of which only 60% of the household waste is collected, out of which only [15%](https://www.epw.in/engage/article/institutional-framework-implementing-solid-waste-management-india-macro-analysis) of urban India’s waste is processed. The opportunity cost of this waste is humongous. While the collection statistics themselves are disappointing, the post-collection figures pose an even more disparaging. There has never been an authentic and extensive study on the opportunity costs of India’s waste, thus it is difficult to estimate how much money India is bleeding by wasting its waste. According to a business research organisation Novonous, Mumbai alone will have a waste market of [13.62 billion $ by 2025](https://www.forbes.com/sites/suparnadutt/2016/08/24/mumbais-13b-waste-management-market-and-the-startup-thats-tapping-into-it/#62be57916438).

Missed Opportunities  
The Total capacity of production of compost from municipal waste in India is 54 lakh tonnes, but so far only 15 lakh tonnes out of it is being utilised. Similarly, the power generation capacity from solid waste is about 600 MW, out of which only 92 MW is being generated. While other power generation plants and composting units are under-construction, the under-utilisation of the existing infrastructure underscores the flaws in implementation and the poor planning.

Waste management is not diversified, due to the low stress on waste processing and the lack of incentives attached to waste processing. Waste generation in India is expected to grow to a massive 165 million tonnes per annum by 2030, and India cannot handle so much trash. Not unless the likes of Ghazipur landfill start mushrooming. While remedying the problems of open defecation is pertinent, waste processing poses an equally important, and fatal issue which cannot be avoided anymore

Why its narrative needs to change  
As long as people see waste as waste their effort will be to try to hide it. But where will this waste go? Even if it goes out of sight (and mind), it is still harmful. Why are beautification and aesthetic pleasure the only benefits we tend to associate with the Swachh Bharat Abhiyan? The narrative fails to establish the importance of waste, and how it can be profitably and optimally used to create value while also preventing the potential harm it could cause to the environment. Putting forth a different narrative does not require mollifying the existing one, instead it promotes a parallel narrative which would complement the existing one and go a step further.

There have been innovators and entrepreneurs who saw value in waste and exploited this value to generate wealth. The benefits of innovation in waste are two fold- the monetary benefits for the innovator/ entrepreneur, in addition to the society at large which reaps the environmental and aesthetic benefits of the innovation.

Zhang Yin, the Chairwoman and Founder of Nine Dragons was China’s, and possibly even the world’s, [richest self-made woman during 2006-2007.](https://www.nytimes.com/2007/01/15/business/worldbusiness/15iht-trash.4211783.html) The Queen of Trash’ amassed her fortune by recycling waste paper. Another inspiring waste story is that of a Taipei based firm Miniwiz housing a Trash Lab which has turned waste into fabrics, construction materials and most ambitious of all- the wings of a [two-seater aeroplane](https://www.bbc.com/news/business-45573141).

Finding value in waste is not a novel idea in India which has various door-to-door collectors of recyclable wastes. India’s kabadiwalaahs find value in waste. But their operations remain highly unorganised and hence not very profitable. A proactive Swachh Bharat Abhiyan could proactively organise the waste market in India by collecting trash as the raw material through private partnerships with our friendly neighbourhood kabadiwallahs, who have an admirably good permeability in all parts of the country.

What needs to change  
Swachh Bharat campaign should be an endeavour to end the stigma associated with processing and reusing waste. As part of the Swachh Bharat Abhiyan, waste needs to be incentivised better in order to encourage entrepreneurs to enter the ‘trash market’. Keeping this in mind, Research and Development need to be ingrained in the very framework of Swachh Bharat Abhiyan.The likes of Trash Lab need to become the norm and not the exception.

Waste can be profitable and Swachh Bharat has to move beyond meeting targets and bring about systemic changes which not only welcome innovation, but promote it. The most sustainable solution to waste management is waste processing by creating a formal marketplace for waste. It’s time to take trash seriously, and to start talking trash!

* * *

**About Sunaina Mathur**

Sunaina holds a Bachelor of Arts in Economics from Fergusson College, Pune. She has previously interned with the National Human Rights Commission(NHRC), the Government of Andhra Pradesh and has represented India at the UN for the Merit360 programme. Her love for languages and poetry drove her to learn French and Russian Languages, and she hopes to read her favourite book ‘War and Peace’ in Russian someday.

## India’s Human Capital

Original: https://www.spontaneousorder.in/p/indias-human-capital

Author: Spontaneous Order

Published: 2018-10-24T10:07:24.000Z

Topics: human-capital, education-quality, demographic-dividend, government-accountability

> In early October, the World Bank released its first Human Capital Index (HCI). India didn’t quite measure up. By the benchmarks of the index, we performed below where our per capita GDP would suggest. Most galling for our government was the fact that Ba

**Summary:**

India's Human Capital Index (HCI) score of 44% reveals that a child born today will achieve only 44% of their potential productivity by age 18 due to deficiencies in health, nutrition, and especially education, performing below per capita GDP expectations and trailing Bangladesh. This undermines the 'demographic dividend' narrative, as India's young population will lack skills despite favorable age demographics. While primary enrollment nears universality, education quality is dismal: 10.2 years of schooling equates to just 5.8 years of learning. ASER reports show fewer than half of Class 5 students read Class 2 texts, and only 43% of Class 8 students perform simple division. India's 2009 PISA results were disastrously poor, prompting non-participation. The government's rejection of HCI—claiming irrelevance to the digital age despite unchanged rural school conditions—exemplifies denialism. From a classical-liberal viewpoint, such refusal to accept measurement sabotages improvement, as quantifying problems is essential for policy progress and equipping children for productive futures amid global competition.

**Key points:**

- India's HCI score of 44% indicates children reach only 44% potential due to poor health, nutrition, and education quality.
- Despite 10.2 years of schooling, effective learning equals 5.8 years, confirmed by ASER data showing Class 5 students unable to read Class 2 texts.
- Government rejection of HCI measurements prevents accountability and progress in addressing education crisis.
- Recognizing poor education outcomes is crucial to realizing demographic dividend through skilled workforce.

**By Mohit Satyanand**

* * *

In early October, the World Bank released its first Human Capital Index (HCI). India didn’t quite measure up. By the benchmarks of the index, we performed below where our per capita GDP would suggest. Most galling for our government was the fact that Bangladesh was ahead of us on this ranking.

The HCI\* “measures the amount of human capital that a child born today can expect to attain by age 18. It conveys the productivity of the next generation of workers compared to a benchmark of complete education and full health.” By the [World Bank’s](https://www.worldbank.org/) measure, the average Indian child of today will perform to only 44% of his or her capacity as an adult, due to deficiencies in health, nutrition and education.

This summary conclusion calls into question the whole notion of our ‘demographic dividend’ – the idea that India will have an unusually high percentage of people in their productive years while the rest of the world ages. While the age profile will be true, and we will have one of the youngest populations in the world, productivity will be increasingly dependent on the skills acquired during the growing years.

India performs particularly poorly on education, despite the fact primary school enrolment is now close to universal. The problem is with the quality of education. The HCI asserts that even though the average Indian child will have 10.2 years of formal education, the quality of that teaching is equivalent to only 5.8 years of standard learning.

Though this number is startling when put so bluntly, we already know that the quality of our schooling is sub-standard. Since 2006, the Annual Status of Education Report (ASER)\*\* has tracked the educational outcomes of our schools. We know, for example, that less than half of Class 5 students can read a Class 2 text; or that only 43% of Class 8 students can divide a 3 digit number by a single digit.

In 2009, India participated in the PISA test\*\*\*, conducted by the OECD (Organisation for Economic Cooperation and Development). Our results, as Lance Pritchett wrote at the time, were “unspeakably bad”. Our officials muttered something about the test not being designed for developing countries, and decided not to participate again.  
I don’t know whether the World Bank will agree to omit India from the next HCI, but our government has ‘rejected’ the findings of the HCI. One of the strange comments – from the Secretary for Economic Affairs – was that the index does not recognise India’s preparedness for the digital age. I completely fail to understand what he means. Visit a government school in a Rajasthan village – as I did last month, and you could well be in the 1970s – children sitting in an open verandah, one teacher supervising children across 5 age groups, a cracked blackboard, and leaky pens. There is nothing in our curriculum or teaching that uniquely prepares us for a digital age.

Further, nothing about the digital age suggests, as yet, that the workers of tomorrow will not need to be able to understand the written word, or understand the building blocks of arithmetic.

Our government’s is the attitude of a bad loser, who blames the referee. Unfortunately, the attitude has deep repercussions, with a lasting impact on the next generation of children. Both scientists and managers know that the first step to improvement of any parameter is measurement. When you reject the ruler, you are left without any basis for measuring progress.

Our government needs to recognise what our educationists and policymakers know – that our primary education is in deep distress. And quite apart from the competitive ignominy of being left behind by Bangladesh is the human disaster of not preparing our children for a meaningful, productive future.

\*http://databank.worldbank.org/data/download/hci/HCI\_2pager\_IND.pdf  
\*\*https://www.livemint.com/Education/WgtUkpjlzUPGhMMTgepGQM/One-in-two-Indian-students-cant-read-books-meant-for-two-cl.html  
\*\*\*https://blog.theleapjournal.org/2012/01/first-pisa-results-for-india-end-of.html

[Read more](https://spontaneousorder.in/so-musings-karl-marx-india-and-world-communism/) 

* * *

**About Mohit Satyanand**

Mohit Satyanand is an entrepreneur, consultant, investor and policy wonk. After an M.A. from Delhi School of Economics, he joined Hindustan Lever as a management trainee, moving 4 years later to Delhi Flour Mills, where he established India’s first successful snack food brand, Crax. He still provides strategic direction to that business, as well as several other small- and mid-sized manufacturing firms. In 1989, he co-founded Teamwork Films, which now produces several of India’s most prestigious arts festivals, including the Jaipur Literary Festival, and annual festivals in Singapore, South Africa, Europe and North America. In 2002, he co-promoted a chain of English language teaching centers in Delhi under the Swiss brand name, inlingua. Chairman of the Board of Trustees of Liberty Institute, a policy think-tank, he has a special interest in the policy thrust of education and macro-economics. Mohit is also consulting editor, Outlook Money, where he oversees the magazine’s coverage of the equity sector. Mountain-lover and life-long trekker, he has recently taken to running half marathons.

## Making Markets work for the Poor: How regulations act as entry barriers

Original: https://www.spontaneousorder.in/p/making-markets-work-for-the-poor-how-regulations-act-as-entry-barriers

Author: Spontaneous Order

Published: 2018-10-17T11:23:26.000Z

Topics: entry-barriers, street-vendors, budget-private-schools, market-reforms

> The world is thriving in the midst of innovations and growth the likes of which have never been experienced before. Yet the discourse of global economy is marked by recurrent concerns over the growing divide between the rich and the poor. Capitalism in ..

**Summary:**

Capitalism promises equal opportunities but fails due to restrictive regulations that act as entry barriers, particularly for poor entrepreneurs, exacerbating inequality despite India's shift toward market-liberal policies. Input-heavy norms paralyze small-scale enterprises like street vendors—who number 450,000 in Delhi alone—and budget private schools (BPS), which serve 80% of private-school children at fees below government per-pupil costs yet deliver better outcomes. Street vendors lack property rights and legal protections, confining them to survival-level operations without scaling potential. BPS face the same infrastructure and teacher-ratio mandates as elite schools, forcing closures and pushing poor students back to low-quality public schools. The classical-liberal solution: grant vending zones property rights to enable expansion, relax input norms for edupreneurs to spur competition, lower costs, and improve quality. Policies must shift from mossback, evidence-lacking input regulations to protean, outcome-focused reforms that foster accessible markets, profitability, and innovation for the bottom-of-the-pyramid livelihoods.

**Key points:**

- Input-heavy regulations create entry barriers that favor large businesses over MSMEs and poor entrepreneurs like street vendors.
- Delhi's 450,000 street vendors lack property rights, preventing business scaling despite high employment potential.
- Budget private schools, chosen by 80% of private students for better outcomes at lower fees, face elite-level infrastructure norms leading to shutdowns.
- Relax regulations on inputs like infrastructure and ratios to boost competition, quality, and affordability in education and vending.
- Policies should prioritize outcome-based reforms over restrictive input norms to enable market dynamism and reduce inequality.

**By Sunaina Mathur**

* * *

The world is thriving in the midst of innovations and growth the likes of which have never been experienced before. Yet the discourse of global economy is marked by recurrent concerns over the growing divide between the rich and the poor. [Capitalism](https://www.investopedia.com/terms/c/capitalism.asp) in principle gives equal opportunities to all businesses and people, but capitalism today is failing its participants. Many people call these irregularities the vices of capitalism, but evidence shows that these flaws exist due to restrictive rules and regulations which have paralyzed the markets. Competition is a fuel for markets and if the market is accessible only to a select few, there is bound to be lopsidedness. One of the major reasons behind these flaws are the input-heavy norms which act as entry barriers for new entrepreneurs.

The society’s inveterate aversion to endeavours established with a motive of personal gain reflect in our policies which tend to dissuade people from entering markets. Few understand that the very essence of entrepreneurship lies in understanding the society and its members: What is it that people need? How can their needs be met? Now that their needs are satisfied, how can their experience be optimized?

Lately, in countries like India this understanding has gained prominence and policy changes are underway to enable the entrepreneur to innovate freely. Yet the gap between rich and poor, is higher than ever as the upper echelons of the business world continue to enjoy an unfair advantage. Why so?

Despite a conscious effort to move towards market liberal policies in India, the medium and small scale enterprises (MSMEs) have not been taken into cognizance. Competition is a necessary precondition of capitalism to meet demands of the consumers at reasonable prices, while safeguarding the interests of the entrepreneurs. But a stringent policy environment makes the existence of smaller enterprises tough.

A good example of this are the street vendors of India. While the ‘License Raj’ may have ended for the bigger corporations in India, it sure does exist for the poor street vendors even today. Many of these street vendors spend their entire lives running a business limited to the stretch of their arms. Regulatory barriers on bottom-of-the-pyramid livelihoods force the small businessmen to grovel for their very existence, which is why it is nearly impossible for them to scale and expand their businesses. The street vendors are vulnerable due to the lack of property rights and legal protections. Government’s development plans do little to accommodate the employment needs of these smaller enterprises since they are not very profitable. The sheer number of people who fall under this umbrella should be reason enough for the government to pay heed to their problems and challenges, with the capital city of Delhi alone accounting an estimated 450,000 street vendors.

Another example are the Edupreneurs of India. Education in India, or globally for that matter, is a heavily contested subject, which widely falls under the purview of the government since it is a ‘public good’. Many people argue that if education falls under the purview of the private sector, Edupreneurs would charge exorbitant fees depriving shunning the needs of the lower rungs of the society. The budget private schools(BPS) are breaking this myth. With fees lower than the per pupil costs of government schools BPS, have gained preference amongst the lower wage earners as 80% of the private-school-going children attend BPS due to better learning outcomes. The fact that many poor parents choose paid BPS over free education in public schools, speaks volumes about the poor quality of public schools. Yet the BPS are burdened by the input heavy norms relating to infrastructure, student-teacher ratios etc., the same as private schools that are charging fees much higher than BPS. This regulatory impasse often forces BPS to shut down as a result of which, poor students are forced to go to low quality public schools.

Taking a cue from the examples cited above, if the basic requirements of the street vendors are met by granting them property rights in the vending zones prescribed in urban areas, then the street vendors can establish their business without fear and even expand their business to bigger areas/shops once they accumulate enough capital. Similarly, Edupreneurs who run schools should not be forced to abide by input heavy norms the likes of which can only be met by pumping in huge capital and hence are by default in favor of expensive private schools or rich Edupreneurs. If entry barriers in this sector are relaxed, more number of schools will be established, thus increasing competition and improving quality and outputs of these schools at reasonable costs.

Getting rid of input-heavy entry regulations would help scull our markets towards profitability and quality. Regulatory interventions should endeavour to build a conducive environment for enterprises, not to obstruct their existence. The general policy landscape in India continues to be evidently reluctant towards market-liberal reforms, thus placing great importance on mossback input-based regulations which are not evidence based. Existing restrictive policies can enervate even the most determined and driven entrepreneurs, which is why it is necessary to formulate protean policies which can keep up with the dynamism of our demands.

[Read more.](https://spontaneousorder.in/street-entrepreneurs-victims-of-executional-paralysis/)

* * *

**About Sunaina Mathur**

Sunaina holds a Bachelor of Arts in Economics from Fergusson College, Pune. She has previously interned with the National Human Rights Commission(NHRC), the Government of Andhra Pradesh and has represented India at the UN for the Merit360 programme. Her love for languages and poetry drove her to learn French and Russian Languages, and she hopes to read her favourite book ‘War and Peace’ in Russian someday.

## Looking beyond the Binaries of Aadhaar and Right to Privacy

Original: https://www.spontaneousorder.in/p/looking-beyond-the-binaries-of-aadhaar-and-privacy

Author: Spontaneous Order

Published: 2018-10-09T05:28:00.000Z

Topics: aadhaar, right-to-privacy, data-protection, welfare-efficiency

> In today’s age of omnipresent data threats and rising bridges of disparity, a proactive step towards the casting of a pre- emptive safety net should be seen separately from the incidental authoritarian rhetoric that it comes wrapped in. Reducing the con

**Summary:**

Akshita Mathur argues that Aadhaar should not be dismissed through binaries of authoritarianism versus privacy, as its core purpose is to combat corruption and resource leakages in state machinery like the PDS, provide a standard national ID for linking services, and enable direct benefit transfers for efficient welfare delivery. From a classical-liberal lens, Aadhaar promises futuristic benefits such as individual accountability amid online misinformation, equal access to services for the poor, and bureaucratic efficiency by minimizing paperwork—mirroring private sector innovations by Google and Amazon that personalize services through data collection, which are praised rather than criticized. While acknowledging data as 'the new oil' per The Economist and the urgent need for privacy protections, Mathur contends the real issue is inadequate data safeguards, not Aadhaar itself. She urges clarifying the right to privacy case-by-case rather than declaring it a blanket fundamental right immediately, to avoid legal loopholes harming public and private interests, such as in contract law. Progress includes a Supreme Court nine-judge bench on privacy as fundamental and a panel on Aadhaar data protection; judicial maturity should guide nuanced handling to balance innovation and safeguards.

**Key points:**

- Aadhaar was designed to reduce corruption in welfare schemes like PDS through direct benefit transfers and unified identity services.
- Private companies like Google and Amazon are lauded for data-driven efficiencies that Aadhaar similarly enables for public services.
- Right to privacy must be clarified case-by-case to prevent legal loopholes, rather than hastily deeming it a fundamental right.
- Strengthen data protection frameworks via judicial backing, as seen in the ongoing Supreme Court privacy hearings and Aadhaar data panel.

**By Akshita Mathur**

* * *

In today’s age of omnipresent data threats and rising bridges of disparity, a proactive step towards the casting of a pre- emptive safety net should be seen separately from the incidental authoritarian rhetoric that it comes wrapped in. Reducing the concept of Aadhar to any belligerent ideology (and thus, rhetoric) and falling prey to sensationalized arguments, is to render a rather myopic view of the issue.

The ideation of the scheme never had, as its motive, to distribute parts of big brother’s all- seeing eye to the masses. Instead, the movement was to be a solution to a host of problems, including the corruption and resource leakages that the State’s machinery (such as the PDS) had been diagnosed with. Addressing the need for a standard national identity card, a unifying and convenient means of linking financial services and government documents onto a central portal for easy procurement, as well as an instrument of “direct benefit transfers” and other welfare services, the Aadhar card was to form a sophisticated identification and welfare dissemination system.

Over time, however, other concerns have also propped up. At a time when the “Internet of Things” seems like a not- too- far- off reality, as well as the striking rates of digitization being seen around the globe, the Aadhar could potentially solve an added list of futuristic problems, as well. These would include upholding accountability of each individual (a crucial aspect given the trajectory of online trolling and spread of fake news propaganda), extending a standard toolkit of services and protection to all the citizens of the country, allowing the poorer section of the country targeted access to the same kind of resources that a relatively well- off citizen with basic internet connection has, and also increasing efficiency by way of decreasing paperwork to a bare minimum (thus, speeding up the bureaucratic processes that we so often complain about). The last point here is to be underscored given that analogous steps are already taken by private institutions to increase respective efficiencies (for example, Google and Amazon increase customer satisfaction by tailoring services via continuous collection and storage of user data and recognition of human behaviour patterns). Hence, if private organizations can be lauded for their efficient servicing, it would be hypocritical to pelt the State with proverbial stones on its attempts to do the same.

Although accumulation of data provides a more effective distribution of services to its customers, it also brings into question the current inadequate framework for protecting this data. To succinctly address this phenomena and also cement its urgency, it would be apt to quote The Economist which eloquently wrote of “human data being the new oil”. The foundation of this concern lies in the right to privacy.

Its at this crossroad that India stands. The overarching issue of right to privacy is what requires clarification. The outcry for Aadhar is not so much related to the flaws in the service it provides or the idea it espouses, but an intrinsic fear of the abuse of accumulated data. Hence, the problem lies not in right to privacy, but in the violation of a particular kind of right to privacy, that has been hitherto undiscussed in the public sphere. Push coming to shove, the legal battle that commenced in 2012 has reached a sense of urgency in 2017, because this right to privacy has begun to feel more vulnerable due to the explicit venturing of the State into a system, that till now was built upon soft adoption coming from the private space rather than binding directives from the Government.

It is this data use and protection mechanism that must be pursued with the help of a strong judicial backing. Some semblance of progress can be seen in the recent formation of a panel looking exclusively into data protection in context to Aadhar. And the other is the current 9 judge bench of the Supreme Court hearing arguments on the fundamental right to privacy. In order to successfully achieve this end, the variation in nuances must be identified, acknowledged and then tackled accordingly.

A close off- shoot of the same issue is the debate on whether right to privacy is a fundamental right or not. Taking cognizance of its importance, it would be key to point out that although right to privacy is essential to personal liberty and must be upheld without question, awarding the whole ambit of this undefined entity the title of fundamental right, off the bat, would also be equivalent to stitching legal loopholes that would adversely affect the public and private interest at least under present conditions (the existence of contract law being susceptible to such a step, being a foremost example),. Hence, it would be safer to proceed on a case- by- case basis, with every context easing the crumples of this complex, un-navigated and extremely delicate term. As this legal maturity is attained, fully formulating the specifics of such a fundamental right can be undertaken, and it would be this experience that would ensure that the correct implication of this fundamental right is laid down, rather than a hasty judgement under a pressurized and highly politicised atmosphere.

Read more: [https://spontaneousorder.in/what-aadhaar-needs-right-to-notice-right-to-object-right-to-be-forgotten/](https://spontaneousorder.in/what-aadhaar-needs-right-to-notice-right-to-object-right-to-be-forgotten/)

* * *

**About Akshita Mathur**

Akshita Mathur has completed her undergraduate degree in Economics from Symbiosis School of Economics, Pune, and is currently working at Centre for Civil Society. A writer by passion, she aspires to make a career in Investigative Journalism. Her interests lie in International Relations and Politics. Outside the workplace, she indulges herself in lots of hot cups of chai and good food.

## Self Help Groups: A Market Based Solution For The Failing Microfinance Industry

Original: https://www.spontaneousorder.in/p/self-help-groups-a-market-based-solution-for-the-failing-microfinance-industry

Author: Spontaneous Order

Published: 2018-10-08T12:07:10.000Z

Topics: rural-credit, self-help-groups, microfinance, womens-empowerment

> Rural credit has been one of the most pertinent issues in India. Despite the existence of formal credit institutions like Banks, Microfinance Institutions, and Credit Cooperatives, sufficient credit is still not effectively penetrating rural areas, star..

**Summary:**

Rural credit in India remains inadequate despite formal institutions like banks and microfinance organizations, which fail due to requirements for collateral, high interest rates, procedural hurdles, and supply-demand mismatches exacerbated by borrowers' lack of education and documentation. Self Help Groups (SHGs) emerge as a market-based solution, enabling rural poor—especially women and lower castes discriminated against by formal lenders—to pool small weekly or monthly savings and recycle them into accessible credit with flexible repayments. Launched via NABARD's SHG-Bank Linkage Programme (SBLP) in 1992, this model synthesizes formal banking with informal systems, becoming the world's largest community-based microfinance initiative recognized by RBI as priority sector lending. Two linkage models exist: direct bank-SHG and via NGOs. Author's fieldwork with 40-45 women in Karjat revealed one-third had escaped microfinance debt traps, using SHGs to sustain cottage industries in clothing and food. Navjyoti India Foundation's 112 SHGs since 2001 have empowered women, enhancing self-esteem, enabling independent decision-making, and leading community roles like 'water police' and tree plantations. SHGs thus foster entrepreneurship, skill development, and women's empowerment, addressing formal credit failures through decentralized, community-driven markets.

**Key points:**

- Formal credit institutions fail rural poor due to collateral demands, high interest, and procedural barriers, creating a persistent supply-demand gap.
- SHGs pool members' small savings to provide internal credit with flexible repayments, enabling small-scale industries and escaping debt traps.
- NABARD's 1992 SBLP links SHGs to banks, forming the world's largest community-based microfinance program with Type-I (direct bank) and Type-II (via NGOs) models.
- Field interactions show SHGs empower women, with one-third of 40-45 interviewees overcoming microfinance crises and gaining social leadership roles.
- SHGs enhance women's self-esteem and independence, transforming family dynamics and community participation.

**By Shivam Gujral**

* * *

Rural credit has been one of the most pertinent issues in India. Despite the existence of formal credit institutions like Banks, Microfinance Institutions, and Credit Cooperatives, sufficient credit is still not effectively penetrating rural areas, starving the ones who need it the most. What is the reason behind this gap? Concurrently, what is the solution? A potential solution is the establishment of Self Help Groups (SHGs), which have emerged as a market-based model to fill the gaps left by formal credit institutions. As a market-based solution, SHGs offer greater economic opportunities to women and lower castes that may be traditionally discriminated against by financial institutions.

# Background: Microfinance in India

The motive of establishing a robust credit disbursement organisation is the upliftment of the rural poor, who have traditionally been unable to access banking services because of low income and the lack of proper documentation. Loans from the formal credit institutions also require collateral, which poor people cannot offer. Also, the high interest rates and other procedural formalities act as a deterrent to poor people in need of credit, thus stripping them of various benefits. However, there are challenges not only in the supply side of rural credit, but also in their demand, primarily due to lack of education. The low-income groups demand credit facilities without following any procedures or filing documents. As a result of this mismatch, the formal sector fails to fulfil the credit needs of the rural poor.

# Emergence of Self-Help Groups

Financial subsidiaries like SHGs provide its members with credit facilities, which help them meet their livelihood requirements, in contrast to the formal institutions which are unable to meet the rural demands effectively. And by empowering members with readily available credit, SHGs have empowered rural individuals to set up their own small-scale industries, leading to skill development and increased self-esteem.  
SHGs have been able to drum up small savings either on a weekly or monthly basis from community members who were not expected to have any savings. In order to meet the credit needs of members of the group, they collectively recycle the resources available to them. This has provided them with monthly credit facilities, and eased the burden on credit seekers by allowing repayments in small instalments.

# Growth of Self Help Groups

The SHG-Bank Linkage Programme (SBLP) launched by NABARD in 1992 envisaged a synthesis of the formal financial system and informal sector. With this, the formal financial institutions in India have ventured into microfinance in a massive way. This initiative is considered to be the largest community-based microfinance programme in terms of outreach in the world and many other countries are keen on replicating this model. This is also recognized as a part of priority sector lending and normal banking business by the Reserve Bank of India (RBI).

In India, two types of SBLP models have emerged over a period of time:  
Type–I: Bank-SHG-Members: The bank itself acts as a self-help group promoting institution (SHPI).  
Type-II: Bank-NGO-SHG-Members: Facilitating agencies like NGOs, government agencies, or other community-based organizations form groups.

# Self Help Groups’ Benefits for Fledgling Entrepreneurs

During fieldwork with the Institute for Rural Credit and Entrepreneurship Development, I had the opportunity to interact with five self-help groups, which consisted of a total of 40 – 45 women, in the village of Karjat, Mumbai. During a series of interviews, I found that approximately fifteen or one-third of them had already been victims of debt traps, and two of them were under crisis due to non-repayment. SHGs, on the other hand, had helped them establish and sustain their own cottage industries, which work in clothing, food items, etc., and help them earn a better livelihood.

# Self Help Groups for Women’s Empowerment

In addition to benefiting entrepreneurs, self-help groups also provide a powerful tool for women’s empowerment. According to Dr Uma Narang “When she(woman) becomes a member of SHG, her sense of public participation, enlarged horizon of social activities, high self-esteem, self-respect and fulfilment in life expands and enhances the quality of status of women as participants, decision-makers and beneficiaries in the democratic, economic social and cultural spheres of life.”1  
My learning was further supported by my primary research work with Navjyoti India Foundation. Established in 2001, Navjyoti Foundation has 112 SHGs till date and has transformed the lives of thousands of women in their region.  
By joining SHGs, female members can now play a positive role in their society by donning roles including being a part of the ‘water police’- ensuring that no water is wasted in the society – or leading tree plantation drives in their district. Another SHG member I interacted with said, “Our husbands would abuse us and drag us home from the SHG meetings when it initially started because they thought that meetings were more of a manly task. However, now we are respected by our family members and are able to do our work independently.”

# Works Cited

Narang, Uma. (July 2012)“Self Help Group: An Effective Approach to Women Empowerment in India”. International Journal of Social Science & Interdisciplinary Research, 1;8. Accessed at http://www.indianresearchjournals.com/pdf/IJSSIR/2012/August/2.pdf  
Fernandez, A. (July 2007) “History and Spread of the Self-Help Affinity Group Movement in India: The Role Played by IFAD”. Working Paper, International Fund for Agricultural Development. Accessed at https://www.microfinancegateway.org/library/history-and-spread-self-help-affinity-group-movement-india-role-played-ifad  
Jacoby, Hanan G.; Mansuri, Ghazala. (2007) “Watta Satta: Bride Exchange and Women’s Welfare in Rural Pakistan.” Policy Research Working Paper; No. 4126. World Bank, Washington, DC.  
Jose Tojo.(April 5, 2017) “What is Self-Help Group Bank Linkage Program?” Accessed at http://www.indianeconomy.net/splclassroom/358/what-is-self-help-group-shg-bank-linkage-programme/.  
Mansuri, Ghazala. (November 2007)“Credit Layering in Informal Financial Markets”. Journal of Development Economics, 84:2, 715 – 730.  
Misra, Neha. (2016) “Self Help Group of India: Meaning, Need and Objectives”. Accessed at http://www.yourarticlelibrary.com/india-2/self-help-group/self-help-group-shg-of-india-meaning-need-and-objectives/66718/  
PriceWaterhouseCoopers. (November 2016) “Shifting Trends in the Microfinance Ecosystem”. Accessed at https://www.pwc.in/assets/pdfs/publications/2016/shifting-trends-in-the-microfinance-ecosystem.pdf  
Venkateswaran S, “socio-economic impact of SHG’s on their members-an empirical study in the Madurai district”

Read more articles on Credit: [https://spontaneousorder.in/public-credit-registry-is-transparency-enough-for-credit-ailments/](https://spontaneousorder.in/public-credit-registry-is-transparency-enough-for-credit-ailments/)

* * *

**About Shivam Gujral**

Shivam is a grade 12 student from Modern School, New Delhi. Shivam has a special interest in development economics and strategies that enable smart management of corporations towards achieving holistic development targets. He also runs a facebook page called ‘Ecoviews’ where he posts interviews with leading economists and runs discussions on upcoming policies. Shivam aspires to be one among the top economists in the world.

## Liberty in South Asia: One Universal Idea, Different Narratives

Original: https://www.spontaneousorder.in/p/liberty-in-south-asia-one-universal-idea-different-narratives

Author: Spontaneous Order

Published: 2018-10-08T07:42:09.000Z

Topics: south-asia-liberty, regional-narratives, property-rights, post-colonialism

> I remember the morning of one of the Sundays in August 2018 when I was travelling from my hometown to Mumbai in a train, I sat with my copy of Tom Palmer’s ‘Why Liberty?’ reading and indulging in the idea of liberty. There was a gentleman sitting be

**Summary:**

The author recounts a train encounter with a semi-literate rural Indian who intuitively grasped market innovations and distrusted government overreach, revealing how ordinary South Asians value liberty when framed through familiar village life and incentives rather than Western economic theories. He argues that classical liberals must adapt universal liberty principles to regional narratives rooted in local psyches and priorities, avoiding elite-focused appeals like ease of doing business that evoke cronyism. Post-colonialism, the Left gained leverage by conflating capitalism with colonial oppression, a missed opportunity for liberals who now remain cosmopolitan and disconnected from rural realities. In South Asia, where agriculture dominates, advocacy should emphasize property rights for landless farmers over industrialist perks. The author urges Western libertarians to accept that advancing liberty requires diverse regional wrappings of core principles, not uniform Western approaches, to counter Leftist dominance and build a free society attuned to the subcontinent's history and values.

**Key points:**

- Frame liberty advocacy for South Asians using local village experiences and values, avoiding heavy Western economic theories.
- Classical liberals must prioritize regional issues like property rights for rural farmers to connect with the masses, rather than elite ease-of-doing-business reforms.
- Post-colonial Leftists succeeded by linking capitalism to colonialism, a strategic error liberals should correct with culturally resonant narratives.
- Western libertarians need to embrace regional narratives wrapping universal liberty principles to advance the movement in South Asia.

**By Mohammad Anas Khan**

* * *

I remember the morning of one of the Sundays in August 2018 when I was travelling from my hometown to Mumbai in a train, I sat with my copy of Tom Palmer’s [‘Why Liberty?’](https://www.atlasnetwork.org/book/why-liberty) reading and indulging in the idea of liberty. There was a gentleman sitting beside me whose question caught my attention. This gentleman appeared as if he came from the countryside and when he saw the OTG adaptors being sold by a vendor in the train (quite the usual sight in Indian trains), he patted me and asked about those OTG adapters. OTG adapters are one of the many tech-savvy inventions which help you connect a USB pen-drive directly to your smartphone. Quite casually I told him (we were talking in colloquial hindi) the use of those adapters and how he could use it in his smartphone. He looked quite amused and was happy that people are creating such innovative things. On seeing his interest, I decided to strike a conversation and continued to engage him in discussing the simple role of markets in creating these things. I could not use heavy worded analogies or economic theories or any Western ideas that he may be unaware of. I had to relate it to his life, to his village and to everything that he was acquainted to in his daily life. This was a semi-literate (appeared from his difficulty in reading) man who believed in liberty. The reason I say that is because while talking about his life in the village, he mentioned many instances where he seemed to be averse to strict social diktats. He did not use the same term, he believed in incentives and also believed that the Governments throughout time have failed. All he needed was someone to tell him about alternatives, about how they can work in his village and the civil society as a way of efficient organisation.

The above experience clearly portrays how the Indian psyche or the Sub-continental psyche works. I am referring to the way people in this part of the World look at things through the prism of values. While making the case for advancing liverty in South Asia with academic arguments works well, discussing Friedman and Hayek creates all sorts of Magic but deep within there is a narrative that must be considered. We cannot and must not form the same reference points to advocate free society as we do in the West. Most of the times when I make this argument, It isn’t taken up well with our Western audience. One must take note that advocating liberty with regional narratives is not at all another version of patronising post-colonial detachment. It is strengthening the case for liberty by relating it to things that people in this part of the world prioritise and value.

The Subcontinent and the larger South Asia is a region with a similar history. Western-libertarians loathe the presence of the Left in this part of the World while conveniently blaming the culture, the people or the ‘morbid sensibilities of the region’. Rarely does someone look at this region, an area colonised for centuries and ask the most important question, Why does the Left enjoy so much leverage with people? There is no straight answer but what is evident from my experiences and travels is that soon after colonialism, the Left tapped into the Indian people’s psyche. This was exactly the time when the West was full with pride on its ‘benevolent despotism’ and all sorts of economic analysis of Colonialism. The Leftists quite conveniently conflated Colonialism with Capitalism and made their case as the ‘saviours of the poor.’ That was a missed opportunity for classical liberals in India and wider liberty in South Asia.

I do not wish to dig much history to make a case but the solution to the problem lies in the acceptance of a history which we choose to ignore. The libertarian movement is still a cosmopolitan confined (with few exceptions) culture in South Asia. We approach the stage with our arguments on ease of doing business which in turn reflect on the poor citizen as more inequality and cronyism. This can be an issue of semantics as well. Our positioning has been such. We need to derive our narrative of liberty from within our own psyches and develop it while making sure that the essential principles are not compromised. I believe with a firm conviction that liberty is about principles and those Universal principles must not be wrapped in a certain time and space in history. And that must not be cemented as a yardstick to use everywhere. There must be a paradigm shift to approach a region whose population still lives in rural centres. For example, agriculture is a prevalent business in India and cronyism in a way has led to landless farmers, our priority must be to advocate property rights for them and to not conflate ease of doing business with only the elite Industrialist. For advancing liberty in South Asia, our positioning in the region must be based on issues that our people prioritise and not the ones that the West wants us to. It is here that I seek the West to acknowledge that Universal Liberty will be wrapped in regional narratives and no one has a claim greater to it. Acceptance and only acceptance of difference in approaching the principles will help us in taking forward the libertarian movement we so dearly love.

[Read More: Centenary of Liberal Thinker Nani Palkhivala](https://spontaneousorder.in/centenary-of-nani-palkhivala/)

* * *

**About Mohammad Anas Khan**

Mohammad Anas Khan is a law graduate and is currently working as a Senior Associate with Centre for Civil Society. Anas is an academic enthusiast and has a keen interest in legal theory, public policy and the terracotta approach to environmentalism.

## Fulfilling the Mahatma’s quest: Abolish the office of Salt Commissioner and deregulate salt production

Original: https://www.spontaneousorder.in/p/fulfilling-the-mahatmas-quest-abolish-the-office-of-salt-commissioner-and-deregulate-salt-production

Author: Spontaneous Order

Published: 2018-10-03T07:43:51.000Z

Topics: bureaucratic-reform, deregulation, salt-regulation, economic-freedom

> The 2nd of October, a time to remember, and celebrate, the man that was Mahatma Gandhi, his monumental shaping of the nationalist movement, by trying to uphold in our own lives all that Bapu stood for, all that he fought for. While Daan Utsav and uphold..

**Summary:**

The post invokes Mahatma Gandhi's Dandi March against the British salt monopoly to critique India's post-independence retention of the Salt Commissioner’s office, arguing it perpetuates regulatory overreach under the guise of swaraj. Salt, a unique Central subject (item 58 in the Union List), is overseen by the Jaipur-based Salt Department with over 800 staff, which regulates production, leases 60,000 acres of land (45,000 to private manufacturers who produce 94% of salt), manages welfare for 2 lakh workers, and handles iodine quality control—functions duplicating those of Health, Labour, and state revenue ministries. The department generated only Rs 2.5 crore from the now-repealed 1953 Salt Cess Act, insufficient to cover salaries, amid corruption allegations like frivolous evictions. Despite India's self-sufficiency (291 lakh tonnes produced in 2016-17) and a 2016 notification for phased closure, only the cess abolition occurred, with annual reports continuing. From a classical-liberal view, this inefficient bureaucracy diverts resources from vital sectors, betraying Gandhi's quest for economic freedom; the author urges full abolition, transferring assets to appropriate bodies to eliminate unnecessary regulation.

**Key points:**

- Abolish the Salt Commissioner’s office, as recommended in 2016, to end regulatory duplication with Health, Labour, and state governments.
- Transfer 60,000 acres of salt pan lands to state revenue departments and quality labs to the Health Ministry.
- Shift welfare for 2 lakh salt workers to the Ministry of Labour and Employment, which already handles labour protections.
- India's private sector produces 94% of salt, rendering public oversight minimal and inefficient amid self-sufficiency of 291 lakh tonnes annually.
- The Salt Department's persistence symbolizes unfulfilled swaraj, mirroring British monopoly controls Gandhi protested.

**By Shivangi Sharan**

* * *

The 2nd of October, a time to remember, and celebrate, the man that was Mahatma Gandhi, his monumental shaping of the nationalist movement, by trying to uphold in our own lives all that Bapu stood for, all that he fought for. While Daan Utsav and upholding Swachta hi Seva are the causes one is most likely to think of upon reading this, here I wish to talk about an aspect that is far more basic to our well-being: salt. Gandhiji organised one of his most symbolic acts of civil disobedience, the Dandi march, against the imposed salt monopoly of the British. The 1882 Salt Act gave the British a monopoly on the collection and manufacture of salt, limiting its handling to government salt depots and levying a salt tax.

71 years after having gained formal swaraj, what if the case is such that salt production was freed from the clutches of one set of hands only to be transferred to the restrictions and regulations of another? I present to you, the Curious Case of India’s Salt Commissioner Organisation.

“Salt” is a Central subject in the Indian Constitution, listed as item no 58 in the Union list of the 7th schedule. The only item of its kind in the list, it is special enough to warrant the existence of a dedicated office of the Salt Commissioner. Based in Jaipur, the Salt Commissioner has three regional offices with deputy and assistant commissioners. Along with support staff of over 800 workers, they constitute the Salt Department, under the Ministry of Commerce and Industry’s Department of Industrial Policy and Promotion (DIPP). The stated functions of the salt department include regulation and control of the manufacture, supply and distribution of salt by other agencies, leasing of central government land for salt manufacture and collection of ground rent, assignment fee etc, welfare schemes for salt workers, and maintenance of standards and improvement in quality of salt. The Salt Department is also the nodal agency for implementing the National Iodine Deficiency Disorders Control Program (NIDDCP), a program of the Ministry of Health and Family Welfare.

Until 2016, a major function of the department was to collect tax on salt under the Salt Cess Act, 1953. The levy of cess on salt manufacture yielded a revenue of only Rs 2.5 crore, an amount which reportedly did not cover even the salary bill of the organisation. The Act was quietly repealed following a recommendation made by the Exports Reforms Commission. These recommendations drew from the long overdue recognition that the Salt Department functions as an unnecessary layer of bureacracy, with no justification to carry out functions for which relevant nodal bodies already exist. For instance, the NIDDCP involves the running of 26 Quality Control laboratories. The report finds no justification for continuing this activity in the Salt Commissioner’s office, since the promotion of iodide salt is with the Department of Women and Child Welfare, and the technical and nutritional aspects of salt are under the Ministry of Family Health and Welfare’s public health division. Accordingly, one recommendation was to transfer the quality control labs along with the support staff to this division.

Another contentious point is the Salt Department’s ownership of almost 60,000 acres of salt pan lands, of which it leases 45,000 acres to manufacturers for production. According to a Times of India article, department officials have been accused of corruption and constant litigation for filing multiple “frivolous” cases against salt pan owners. These complaints state that officials allegedly misused the Public Premises Eviction Act against private owners who have been in possession of salt lands for decades. Private manufacturers account for 94 per cent of salt produced in the country, which means the public sector has minimal influence on its price and production. It was suggested that these lands be transferred to the concerned state governments, with relevant revenue department officials in the area handling administration without needing any additional staff for this purpose.

The revenue collected from the lease finances the Department’s function of providing welfare for over 2 lakh labourers engaged in the salt industry. Placing this welfare function under the Salt Commissioner is again unnecessary, since no labour law is enforced by the department, and especially since there already exists a relevant nodal body whose very purpose is to protect and safeguard the interests of workers in general and provide to them social security: the Ministry of Labour and Employment.

Recommendations were thus made to gradually restructure and trim down the Salt Department’s regulatory functions. The Centre, taking stock of the same, issued an official notification in October 2016, ordering that the Salt Department be closed in a phased manner. So far, however, only one phase of this order has been realised, that of abolishing the Salt Cess Act. The Salt Department has even published its annual report the year after this notification was issued.

India is self-sufficient in salt production, with over 291 lakh tonnes produced in 2016-17.  
The very existence of the Salt Department, with its seemingly tiny but multiple layers of regulatory barriers, is symptomatic of an inefficient bureaucracy. Yes, state capacity is vital to the functioning of the nation, however, this is effectively achieved only when resources are directed to the right, needful sectors. Salt isn’t one of them.

The attempt to free salt production from the regulatory chokehold of our colonial masters is remembered as one of the most symbolic acts of dissent against the Raj, and a clarion call for ‘swatantra’; 88 years hence, isn’t it appalling that we still enable regulation of the same product, and retain the very institution that was used to oppress our economic freedom?

* * *

**About Shivangi Sharan**

Shivangi Sharan is an intern with the Centre for Civil Society's Advocacy team/department. A fresh graduate of Political Science from Lady Shri Ram College for Women, she aims to enter the public policy space after pursuing a Master's in the same.

## Mirror, Mirror on the Wall, When is Capitalism in the West to Fall?

Original: https://www.spontaneousorder.in/p/mirror-mirror-on-the-wall-when-is-capitalism-in-the-west-to-fall

Author: Spontaneous Order

Published: 2018-09-04T14:04:20.000Z

Topics: fiat-money, central-banking, indian-economy, libertarianism

> (This article was originally posted on 15 March 2017) Over the past ten years in Europe and in the United States, fiscal reforms have been a topic of great discussion although no action has backed it up. For countries to spend less money than what is ge..

**Summary:**

The article critiques Europe's and America's abandonment of sound money, free trade, balanced budgets, and laissez-faire economics, replaced by irresponsible deficit spending enabled by fiat money and central bank interventions. Politicians outsource problems to central banks like the ECB, which maintain near-zero interest rates and print money to prop up asset bubbles, distorting markets and preventing necessary recessions from correcting misallocations. This politically designed, elastic monetary system—unprecedented as the world runs solely on paper money—worsens structural issues like high debts, lacking reforms, and declining competitiveness, setting the stage for a crisis larger than 2008. In contrast, Asia, especially India with its 1.2 billion people, has embraced capitalism, fostering technology-driven connections, entrepreneurship, and cultural optimism where parents expect children to prosper. Capitalism, as sophisticated machinery sorting efficient from inefficient, thrives when allowed to operate freely. The author warns India against repeating the West's errors of expanding government and protectionism, which erode prosperity. Voters must focus on solutions beyond the status quo, unleashing enterprise from big government. Conclusion: Indian libertarians should emerge as political entrepreneurs to sustain India's path.

**Key points:**

- Western central banks' fiat money printing and low rates create asset bubbles and postpone recessions, exacerbating misallocations and threatening a crisis worse than 2008.
- Fiat money, unlike sound money tied to commodities, is politically elastic, enabling deficit spending without market discipline.
- India succeeds by unleashing capitalism, connecting 1.2 billion people via technology and cultivating entrepreneurship amid cultural optimism.
- India must reject Western big-government pitfalls like protectionism to avoid decline and raise societal prosperity.
- Libertarian political entrepreneurs in India should step up to champion sustainable, apolitical money systems and free markets.

**By Mathias B. Pontoppidan**

* * *

(This article was originally posted on 15 March 2017)

Over the past ten years in Europe and in the United States, fiscal reforms have been a topic of great discussion although no action has backed it up. For countries to spend less money than what is generated in its economy, in other words, to pursue a responsible, disciplined fiscal policy, is in today’s Europe regarded as ‘financial austerity’ and labelled as an immoral path. This is the result of irresponsible governments where career building has weighed above intellectual honesty toward its populations.

Long gone is the era of sound money, free trade, balanced budgets, and laissez-faire in economics. Back then, politicians could spend only the funds that parliament was willing to take from the citizens openly through taxation. Persistent deficit spending was impossible. Today, political leaders have found creative, indirect means and when disaster hits next, the blame will be targeted at the politically convenient scapegoat.

The political responsibility of Europe’s declining competitive advantages, high costs for businesses and individuals imposed by governments, lacking structural reforms, enormous levels of private and public debt, etc. has largely been ignored and the worries have been ‘outsourced’ to central banks and the ECB which for a long time has been under political pressure in order to maintain the economies’ short-term activity levels and asset prices.  
By now, central bankers have painted themselves into a corner where they are forced to keep interest rates at practically zero and repeatedly print fiat money (fiat here means “by decree of state”) to sustain prices of select asset bubbles with the purpose of creating a minimal appearance of stability.

For the first time in world history, the world is running solely on [paper money](https://www.investopedia.com/terms/p/paper_money.asp). Nowhere is the production of money any longer restricted by a firm, institutional link to a commodity, which has a massive consequence to our financial system and money has become completely elastic. Our current monetary system is not a result of market forces but of political design. More money in our system does not equate into greater economic activity and more economic activity does need require more money into circulation.

When central bankers create artificially low credit, it is impossible to predict the channelization of the investment capital through the respective financial institutions hence forecasting wherein the next bubble will be pumped up. The bubble can be built in everything from the European stock market to the real estate market in China – all depending on contemporary trends, bias and unique events.

It is with considerable chances that this gigantic experiment from the central banks will turn out to be the very trigger to a much larger economic crisis than the one we witnessed in 2008 and that the very same crisis merely was a symptom for this monetary crisis, which in turn was held back temporarily because of the interventions and capital stimulations from central banks – a strategy which did not solve one single of Europe’s or America’s fundamental problems but rather made them even worse. Rising state intervention with the purpose of sustaining what is ultimately unsustainable, will have a negative effect on market mechanisms, weaken capitalism and thereby destroy the very root of each state’s income source.

There was a time when recessions were not prevented from cleansing the economy from capital misallocations and bring the economy back in balance. Today, central bankers are attempting to completely avoid or procrastinate unavoidable recessions which naturally leads to previous misallocations not being addressed but instead transferred to the next cycle of capital allocation and thereby growing into an even bigger bubble.

In addition, it is Europe’s diverse economies, various levels of private and public debt, and unique events, which have created an impractical and inflexible currency system like the Euro, which often leaves governments in power with limited tools to manage their respective crisis. Something which nation-states increasingly are questioning, maybe except from Germany who for good reasons love the Euro. The pressure on the Euro zone and the debt-burdened United States is increasing since their political leaders cannot comprehend that no country can simply shut competition off.

The libertarian response to a sustainable money system is – in contrast to its existing form – international, apolitical and inelastic.

Gazing through the crystal ball of mainstream economists or central bankers should not be a comforting source of wisdom for your economic projections since these historically (almost) always are wrong. A qualified reason for this could be that a large percentage of economists are working in sectors that earned their stripes and owe their size and significance – if not their very existence – to the fiat money system and its wider bureaucracies, like the various central banks, the International Monetary Fund, the Bank for International Settlement, the World Bank, and its extensive financial industry. They hold little incentive to question the system itself, and they will rarely think outside of it. It is at the precisely their unique insights of the extended financial bureaucracy which makes them interesting for their private sector employers.

[

![Liberty](https://substackcdn.com/image/fetch/$s_!6J94!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa5d7ff26-6434-4f65-94ce-8fa34b325b93_300x187.png "Liberty")



](https://substackcdn.com/image/fetch/$s_!6J94!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa5d7ff26-6434-4f65-94ce-8fa34b325b93_300x187.png)

On a brighter note, Asia has woken up after a long sleep and increasingly embraced the unleashing of capitalism. Technology in India is not just connecting all of its 1.2 billion people, but it has also activated millions of unused brains.

Has capitalism done well for India? Yes, resoundingly. However, it is critical to understand that capitalism is not an ideology. It is very sophisticated machinery that can only do one thing; sort the efficient from the inefficient. The question is how much you allow the machinery to work. But it is no solution to protect inefficiency, and the attempt to do so leads to a waste not only of human resources but also of physical capital.

There has also been an explosion of cultural confidence in Asia and particularly in India. If you want to meet the most optimistic young people in the world, whatever you do, do not go to Europe. If you ask parents in Europe ‘will my kids be better off than me’ the answer is predominantly ‘no’, and in Asia the vast majority will say ‘yes’. And believe me, cultural confidence is a big thing. Because if you want to succeed, you first have to believe that you can succeed. That is a big competitive advantage. Enter any Starbucks in India and you will spot five start-ups. Entrepreneurship is increasingly being admired broadly in the society and what is honoured in a country will also be cultivated there.

An economy which is not developing is in decline. The societal loss of confidence towards the future will severely effect the innovative thinking and societal progress and such trends often trigger countries to look inwards, adopt protectionism, undergo economic declines, which in turn creates social unrest, frustrations, desperate actions without reason applied, and being haunted by a short-term thinking plague.

If India – and her voters – will not learn from the mistakes made in Europe, in which the very capitalistic principles which created prosperity in the first place got abandoned due to ever-increasing governments, India will not succeed in continuing its evolutionary path to raise all boats of society.

Growth and comfort never co-existed; likewise new and better ones will replace certain old industries of India. In the same way, old political parties as well as wrongly incentivized politicians, will neither have the answers to India’s modern challenges.

India’s voters must spend more time with the solution rather than with the problem and look beyond the current political status quo.

As a result, I hereby call for political entrepreneurs of the libertarian world in India to take stage.

[Read more.](https://spontaneousorder.in/ek-hi-thali-ke-chatte-batte-do-indian-voters-really-have-a-choice/)

* * *

**About Mathias B. Pontoppidan**

Mathias B. Pontoppidan' fascination for India started at the age of 16 after-which he pursued an intense career in the country; ranging from hedge fund trading from Chennai, India-entry Management Consulting from Delhi and investment banking (M&A and private equity) from Mumbai. His dream is to see India realise its fullest potential by unleashing the deep spirit of enterprise from big government.

## If Hogwarts wasn’t autonomous

Original: https://www.spontaneousorder.in/p/if-hogwarts-wasnt-autonomous

Author: Spontaneous Order

Published: 2018-08-29T13:47:41.000Z

Topics: school-autonomy, private-schools, education-regulation, budget-private-schools

> The following article was originally published in the The Daily Prophet. On 1st August, the Hogwarts School of Witchcraft and Wizardry received a notice of closure following multiple instances of defaulting the guidelines set by the newly formed body- W..

**Summary:**

In this satirical piece analogizing Indian education policy, Hogwarts faces closure under Wizardry Training Foundation (W.T.F.) regulations imposed by Minister Dolores Umbridge, mirroring burdensome government norms on private schools. These mandate 9 of 11 governing board members be government-appointed, curriculum revisions glorifying Lord Voldemort while removing Muggle relations subjects, and 42 litigations including 18 infrastructural norms like specific broom-flying chambers—applicable only to private schools, exempting Ministry-run ones. Headmistress Minerva McGonagall decries the loss of autonomy, stifling of innovation, and capital-intensive demands on Budget Private Schools (BPS) charging lower fees than Magic Public Schools (MPS) per pupil. Hogwarts, a BPS outperforming peers historically, must hike fees amid protests, risking accessibility and existence. McGonagall's viral appeal highlights disproportionate costs and calls for withdrawing input-heavy norms to preserve quality education at low costs, embodying a classical-liberal critique of bureaucratic overreach that favors public schools while undermining private innovation and choice.

**Key points:**

- Government mandates 9/11 governing board seats for private schools, eroding institutional autonomy.
- W.T.F. norms impose 42 litigations, including 18 infrastructural requirements, solely on private schools while exempting public ones.
- Curriculum changes glorify Voldemort and remove Muggle relations, prioritizing political ideology over practical skills.
- Budget Private Schools like Hogwarts charge less per pupil than public schools but face capital-intensive rules forcing fee hikes.
- Private schools' autonomy is essential for innovation and affordable quality education, against bureaucratic interference.

**By Sunaina Mathur**

* * *

The following article was originally published in the The Daily Prophet.

On 1st August, the [Hogwarts School of Witchcraft and Wizardry](https://harrypotter.fandom.com/wiki/Hogwarts_School_of_Witchcraft_and_Wizardry) received a notice of closure following multiple instances of defaulting the guidelines set by the newly formed body- Wizardry Training Foundation (W.T.F). Hogwarts, over a thousand years old, is grappling to stay relevant in the midst of the multiple notices it has been served since it came under the purview of the W.T.F circulars and notifications, to be followed by all private schools in the UK. The past few months have been tough on many reputed schools which have adamantly stood by their anti-W.T.F. stand, especially opposing the norms regarding administration and infrastructure.

Minerva McGonagall, the Headmistress of Hogwarts, has had a rather rancorous relationship with the new Minister of Magic, Hon’ble Ms Dolores Umbridge. In an interview with the Daily Prophet in November 2017, Ms McGonagall said, “I generally prefer not to indulge outsiders in school matters, but the recent efforts by external factors to vilify Hogwarts’ reputation warrant a response. That the Minister is by no standards capable of ushering in educational reforms is obvious from her previous attempt at the same as the Headmistress of Hogwarts, which was a disaster of unimaginable proportions. Her current reforms seem to showcase the same lack of understanding of how academia works. The responsibility of educating young witches and wizards should be left to those in the continuous pursuit of academic excellence, and not bureaucrats who revel in curtailing dissent and stifling innovation. Our institution refuses to stand by such a woman, who has been convicted of heinous crimes, and released from Azkaban under murky circumstances.”.

Despite the many protests by the institution, Ms Umbridge holds the position of the Minister. The W.T.F. norms which came into effect starting January 2018 mandate the Governing Boards of all private schools to have 9 out of its 11 members to be appointed by the Department of Education on the recommendation of the Minister of Education, while the Headmistress/Headmaster along with a staff member will complete the Board. Hogwarts, along with a few other private schools vehemently opposed this rule citing interference from the government and loss of autonomy of the institution. The Hogwarts’ Board of Governors has exposed the outright refusal of the institution to cooperate.

The addition of a chapter on Tom Riddle alias Lord Voldemort to the book ‘Great Magicians’ by Bathilda Bagshot, the most commonly used resource for the ‘History of Magic’ subject at all grade levels, and his concurrent removal from the chapters on the ‘Dark Age of Magic’ from all the History books has alarmed the schools. The Ministry officials stated that political differences with the reigning Ministry should not be a reason to taint the reputation of a great wizard like Tom Riddle who made significant advances in the fields of Dark Arts and Post-Mortalisticmagic, and as such, subjective opinions based out of fake facts need to be discarded.

That is not all that has been changed in the syllabus. The Ordinary Wizarding Level (O.W.L.), has been updated to G.R.O.W.L. (General Range of Wizarding Level) with major curriculum changes like removal of ‘Muggle Relations’ and ‘Wizarding in the age of Muggle Technology’, citing them as redundant. This was criticized by many academicians and educationalists, who feel this is a necessary skill for millennial wizards and witches who will inhabit the same society, amongst the muggles. The Ministry referring to wizards’ innate superiority to muggles has refused to acknowledge any value in these subjects.

Hogwarts, with its unique curriculum, tailored to meet the individual needs of its students, has had a history of outperforming its contemporaries. But the institution seems to be losing its edge. Its inability to meet the new infrastructural norms, like the indoor chambers for broom flying classes of Ministry stipulated dimensions, soccer fields, and only 40 other such norms, is being met with criticism. Headmistress McGonagall says that the school, while happy to make changes that will further the students’ intellectual and magical growth, does not see merit in the changes mandated by W.T.F. “We need to take our requirements, time and land resources, and budget into account before beginning work on any of these mandates. Moreover, it is outrageous that these laws apply only to private schools. Is it not pertinent that Ministry-run schools to focus on all-round development as well?” says Headmistress McGonagall.

While Headmistress McGonagall has agreed to fulfil these requirements under pressure, it is unclear how the school will be generating the capital to meet this demands, especially in view of the widespread protests against the proposed fee hike to fulfill the mandates. Hogwarts’ inability to control the fee accompanied with its frequent tiffs with the government are putting the very existence of the institution in question.

A public appeal by Headmistress McGonagall on WizWitchbook has gone viral. It reads as follows:

“For over ten centuries, we at Hogwarts have endeavoured to build an environment conducive for Wizards and Witches, who aim not just of achieving great success but also dream of becoming the wand of change. In virtue of these principles, I feel it is pertinent to speak up now.

I am resorting to WizWitchbook, a platform I joined this very morning, to openly discuss our fee hike decision since there is no other place where I can share my thoughts without the Ministry’s filters. We have been silenced and bullied into following rules which hold little or no merit in terms of the intellectual and magical development of our students.

Now, under the WTF norms, we are required to meet a total of 42 litigations, 18 out of which are infrastructural norms which would require us to restructure, renovate and rebuild a major part of the Hogwarts’ castles. While this may be a piece of paper for the Ministry, for us, it is a major capital-intensive hurdle which our current revenues cannot fulfil.

Hogwarts has always tried to enable good education at minimum costs. Administrative costs, tuition costs, infrastructural maintenance, lodging costs, and other ancillary costs consume all the revenues we generate. Hogwarts, a Budget Private School(BPS) charges fees lower than the Magic Public Schools’(MPS’) per pupil costs and is expected to satisfy input-heavy norms which are very capital intensive.

Many of my fellow wizards and witches are unaware that MPS’ are not required to abide by the WTF norms. This implies that a MPS with more capital at its disposal is expected to spend less than a BPS with lower revenues, while being exempted from the existing capital-intensive rules. Our costs are disproportionately higher than our revenues. How does the Ministry of Magical Education expect us to meet the outrageous requirements with no revenue at our disposal?

Even in the past, Hogwarts has worked in synergy with the Ministry of Magic on various occasions and we hope to continue the same for the benefit of both, the school and the Ministry of Magic. I, the Headmistress of Hogwarts, do not stand by this fee hike as I want Hogwarts to be accessible to one and all. I entreat the government to withdraw its input-heavy norms to support our effort of granting quality education at low costs.”

This appeal was soon taken down from WizWitchbook for its anti-Wizardry nature and a notice has been sent to the Hogwarts’ Board regarding its closure. Only time will tell if Hogwarts and its huge alumni network are able to prevent the closure. But Hogwarts sure is in some muddy waters and a precarious choice for young wizards and witches who are currently studying at Hogwarts.

[Read more.](https://spontaneousorder.in/are-private-schools-better/)

* * *

**About Sunaina Mathur**

Sunaina holds a Bachelor of Arts in Economics from Fergusson College, Pune. She has previously interned with the National Human Rights Commission(NHRC), the Government of Andhra Pradesh and has represented India at the UN for the Merit360 programme. Her love for languages and poetry drove her to learn French and Russian Languages, and she hopes to read her favourite book ‘War and Peace’ in Russian someday.

## Is Privatisation a Dirty Word?

Original: https://www.spontaneousorder.in/p/is-privatisation-a-dirty-word

Author: Spontaneous Order

Published: 2018-08-06T11:33:01.000Z

Topics: privatisation, public-sector-undertakings, economic-liberalism, swatantra-party

> A seminar was held in Agra recently to discuss ‘Public Sector Undertakings and Privatisation’. Participants who made it to Agra included Economists: Prof. Gangadhar Gadgil, Prof. P. Brahmananda and D. R. Pendse; Industrialists L Viren Shah, D. N. Pato

**Summary:**

A seminar in Agra discussed Public Sector Undertakings (PSUs) and privatisation, featuring economists like Prof. Gangadhar Gadgil, industrialists, consumer activists, journalist Swaminathan Anklesaria Aiyar, and parliamentarians Jaswant Singh and Minoo Masani. Gadgil argued that while socio-political factors initially justified PSUs, they had become an obsession causing harmful consequences, a view broadly accepted. Consensus held that PSUs created vested interests, lacked accountability, competition, used outdated technology, showed financial indiscipline, and overstaffed, with unnecessary state entry into areas like baking bread and hotels. A minority, aligned with the classical-liberal view, insisted the state had no business in industry. D.R. Pendse broadened privatisation to include divestiture, private sector involvement, franchising, closures, management transfers, and expanding private/voluntary roles. The author prefers a strict definition—state selling enterprises to the public, as Margaret Thatcher did—and laments economists diluting it. Most saddening was the push for a 'better word' than 'privatisation' fearing unpopularity or misunderstanding as shifting from socialism to capitalism. Recalling Swatantra Party's rejection of 'Gandhian Socialism' for honesty, the author asserts 'private' carries no stigma—paan walas, farmers, and ordinary people proudly claim private possessions. People grasp 'private' without guilt and, experiencing government inefficiencies, now see privatisation positively, moving from ideology to reality.

**Key points:**

- Public sector undertakings have universally underperformed, fostering vested interests, inefficiency, and overstaffing.
- Privatisation strictly means the state selling its enterprises to the public, though some dilute it to broader private sector involvement.
- Reject euphemisms for 'privatisation' to avoid misleading the public, as Swatantra Party leaders did against 'Gandhian Socialism'.
- Ordinary Indians proudly embrace 'private' ownership in daily life, making the term unstigmatized.
- Citizens, frustrated with government agencies, increasingly view privatisation favorably over ideological labels.

**By Spontaneous Order**

* * *

A seminar was held in Agra recently to discuss ‘Public Sector Undertakings and Privatisation’. Participants who made it to Agra included Economists: [Prof. Gangadhar Gadgil](https://en.wikipedia.org/wiki/Gangadhar_Gopal_Gadgil), Prof. P. Brahmananda and D. R. Pendse; Industrialists L Viren Shah, D. N. Patodia and P Gupta; Consumer activists: H. D. Shourie and M. R. Pai; Journalist: Swaminathan Anklesaria Aiyar and Parliamentarians: Jaswant Singh and Minoo Masani.

Prof. Gangadhar Gadgil in his paper \[presentation\] maintained ‘that it was not only the commitment of the political leadership to socialism but the economic climate and socio-political considerations that had led to the development of the public sector and its dominant role in our economy. Yet, what was accepted as inevitable and socio-economically necessary, had now become an obsession and a dogmatic belief resulting in harmful economic consequences.’ There was little, if any, quarrel with Prof. Gadgil’s assessment. In fact the consensus view was that public sector undertakings had performed poorly, ‘created vested interests, and led to lack of accountability, lack of competition, outdated technology, financial indiscipline, and overstaffing.’ There was also a general acceptance of the fact that it was quite unnecessary for the State to have entered a whole lot of areas ranging from the baking of bread to hoteliering.

But here the consensus seemed to end because there was a fairly strong minority view that the State had no business, in the first place, to enter the world of business, industry and trade. Turning to the question of privatisation, Mr. D. R. Pendse took the view that privatisation did not merely mean divestiture and de-nationalisation but had a much wider concept which included: a) Divestiture and De-nationalisation; b) Any measure of economic policy which reduces the role of the State sector and permits involvement of the private sector; c) Franchise financing, cooperation of the private sector to take up contracts for building infrastructure facilities; d) The closure or liquidation of sick state sector units; e) Transfer of management and control of state-owned enterprises to more efficient private agencies; f) Widening progressively, areas of operation for private and voluntary sectors and their replacement of government departments. One could argue over what, in my opinion, is the watering down of a clear concept: to me privatisation means the State selling off all or part of an enterprise it owns to the public. This is what the British Prime Minister, Margaret Thatcher had done and is doing. But then it is the prerogative of economists to make the simple sound difficult. But even this diluted description is acceptable for starters. However what really saddened me was a discussion on the need to find a better word than ‘privatisation’. Why? Because the word would not be ‘popular’; because people are liable to misunderstanding it (as a move away from socialism to capitalism).

Way back in 1959, when the Swatantra Party was formed and its Statement of Policy was being discussed, I recall the concern in the face of some ex-Congressmen, who had joined the new party, when the policy statement categorically repudiated socialism. ‘Oh no you can’t do that!’ they said. ‘We’ll never be popular!’ ‘Why not instead state that the Swatantra Party believes in Gandhian Socialism?’, they pleaded. To the eternal credit of the then leadership, Rajaji and Masani among them, this plea to hoodwink the public by pinning a misleading label was turned down.

Those thoughts came rushing to my mind when the advisability of the label ‘privatisation’ was being discussed. In our personal lives, we use the word ‘private’ without any sense of guilt. Ask any small paan wala and he will with pride proclaim it to be his private business. Ask any small farmer and he will say it is his private farm or land. Most of us jealously guard our private possessions, be it a woman’s jewellery or a young man’s cycle. The people understand perfectly what the word ‘private’ means. There is no stigma of any kind attached to it. Then why the dry debate? I could only conclude that many of us are still prisoners of words. We have been successfully sold not only what words like socialism, capitalism, profit and private ought to mean but have come to accept unthinkingly value concepts attached to such loaded meanings. The debate also reflected (what should be the prerogative of politicians) that the label is the thing irrespective of content — an implication that by and large, people are fools and all one has to do is package the thought or sugarcoat the pill. The pity is that while people the world over (including our own) are moving away from ideology to reality, we are still clinging to outdated notions of what is or is not acceptable to people. Ask anyone who has to deal with a government department or agency or undertaking (and that means most of us) and he will say privatisation is not a dirty word — not anymore anyway.

[Read more.](https://spontaneousorder.in/do-liquor-bans-actually-work/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Why ‘Profit’ Is Not A Bad Word

Original: https://www.spontaneousorder.in/p/why-profit-is-not-a-bad-word

Author: Spontaneous Order

Published: 2018-08-06T11:15:03.000Z

Topics: higher-education, profit-motive, foreign-universities, economic-history

> There are few areas where the difference between what Indians want for themselves and what the government of India wants for them is more alarming than in higher education. Six to eight hundred thousand Indians leave for foreign universities every year...

**Summary:**

India's higher education suffers from poor quality despite high per-student costs of ₹2-3 lakh per year, with only IIT and Delhi University ranking in Asia's top 100, while 600-800 thousand students emigrate annually for better options abroad. Foreign universities are barred from operating in India or repatriating profits, reflecting a flawed aversion to the profit motive. In contrast, India's for-profit car industry produces quality exports through competition. The profit motive incentivizes producers to improve products and lower prices to serve consumers, explaining why ancient Rome and China—despite advanced technologies like steam engines and gunpowder—never experienced an industrial revolution, as for-profit activity was disdained. Meanwhile, 18th-century Britain and Holland, as for-profit economies, saw rising incomes for ordinary people. In India, government-dominated sectors like education exacerbate inequality, while competition reduces prices and benefits the poor. Nehru and figures like Manish Sisodia viewed 'profit' as sinful, but economic history shows for-profit competition is essential for quality education and equity.

**Key points:**

- Allow foreign universities to operate and repatriate profits to improve higher education quality through competition.
- Profit motive drives innovation and affordability, as seen in India's car industry versus stagnant education.
- Historical evidence from Rome, China, Britain, and Holland proves for-profit economies advance living standards.
- Government aversion to profits in education widens inequality and fails the poor.

**By Spontaneous Order**

* * *

There are few areas where the difference between what Indians want for themselves and what the government of India wants for them is more alarming than in higher education. Six to eight hundred thousand Indians leave for foreign universities every year. Yet foreign universities are not allowed to set shop in India. In September 2013 the government announced that it may soon open doors to foreign varsities. However, foreign universities will not be allowed to repatriate profits. Behind this policy lies a deeply flawed view of the consequences of profitmotive.

There is a reason why Indian students flock abroad. Aspiring Minds, a quality assessment agency, measured the performance of 40,000 odd technical degree students on job-related skills like communication in English and basic problem solving. About 60% to 96% did not meet hiring benchmarks of various industries.

Why is the quality of education so low? Is it because too little is spent on education? Hardly so. A year of education in India costs about as much as an entrylevel car. The per-student-peryear cost in many Indian varsities is around R2 lakh to R3 lakh. Yet while India is Asia’s second largest exporter of passenger cars, out of its 600 odd universities, only the Indian Institute of Technology and University of Delhi figure in Quacquarelli Symonds list of Asia’s top 100 universities. Why is it that India manages to produce quality cars but not quality education?

The answer is fairly straightforward. In the market for cars for-profit producers compete to satisfy consumer demands. The market for education works very differently. Foreign producers are kept out and the profit motive is barred.

When profits are legal, individuals engage in producing better products at lower prices because there is money to be made by serving consumers. When profits are illegal, producers have little incentive to improve the lot of consumers. This simple idea explains not just the state of higher education in India but also why the industrial revolution did not happen in ancient Rome or China. According to William Baumol, professor of economics at New York University, by first century BC the city of Alexandria “knew of virtually every form of machine gearing that is used today, including a working steam engine”.

China, before the conquest by the Yuan dynasty, in 1280 knew how to make paper, gun powder and waterwheels. Yet neither place saw dramatic improvements in the quality of lives of the ordinary people. because in both ancient Rome and China for-profit activity was looked down upon.

But what about equity? Would not for-profit education leave the poor behind? Here too economic history has much to say. Unlike ancient Rome and China, 18th century Britain and Holland saw unprecedented rise in the incomes of ordinary people. Both Britain and Holland were largely for-profit economies.

In India, it is precisely in those areas where government involvement is the greatest that the rich-poor divide is most colossal, ie, justice, health and education. Competition between for-profit firms lowers prices and brings products within the reach of ordinary people.

Nehru thought “profit” to be a dirty word”. The former education minister of Delhi, Masish Sisodia said that it is a sin to make profit in education. Economic history tells us quite the opposite. Nothing works like competition between for-profit firms; education is no exception.

The original article can be accessed [here](http://ccs.in/why-profit-not-bad-word).

*Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.*

Akshaya Vijayalakshmi is a PhD Candidate at Iowa State University, Iowa.

*Manasi Bose is part of Centre for Civil Society (CCS), a public policy think tank advancing personal, social, economic and political freedoms.  
*

[Read more.](https://spontaneousorder.in/wheres-education-in-india-headed/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## The Co-Relation of Rising Expenditure, Currency and Interest Rates on the Market

Original: https://www.spontaneousorder.in/p/the-co-relation-of-rising-expenditure-currency-and-interest-rates-on-the-market

Author: Spontaneous Order

Published: 2018-08-06T11:10:09.000Z

Topics: monetary-policy, interest-rates, government-spending, foreign-investment

> The Nepal government budget in the financial year 2017/18 allocated the highest expense of the government to the recurring expenditure on administrative functions. A stalwart figure of NPR 499.15 billion which made for 39% of the total budget was spent ..

**Summary:**

Nepal's government faces ballooning recurrent expenditure, with NPR 499.15 billion (39% of the 2017/18 budget) allocated to general public services, set to rise further due to 7 state and 753 local governments under federalism. Revenue growth lags, with IMF projecting modest 3.2% GDP growth for 2022, leading to reliance on foreign loans and investments amid declining remittances. Pegged to the Indian Rupee, Nepal's currency benefits from India's projected 8.2% GDP growth, potentially appreciating against the dollar. Rising government spending boosts aggregate demand, risking inflation. The central bank must choose: tighten policy by hiking interest rates to curb inflation, attracting foreign capital via higher returns and expected currency strength but crowding out private investment; or maintain low rates to preserve private sector borrowing, at the cost of inflation eroding real returns and prompting capital outflows. From a classical-liberal lens, the trade-offs highlight government spending's distortive effects on markets, with optimal policy hinging on private investment's sensitivity to rates and foreign capital's responsiveness to rates and inflation. Outcomes remain uncertain, heavily dependent on India's economic performance and myriad unaccounted variables—no definitive prescription is offered.

**Key points:**

- Nepal's 2017/18 budget devoted 39% (NPR 499.15 billion) to administrative public services, expected to surge with federalism.
- Central bank rate hikes could attract FDI via higher returns and currency strength but risk crowding out private investment.
- Low rates preserve private investment but invite inflation-driven capital flight eroding real returns.
- Policy choice requires assessing private investment's interest rate elasticity versus foreign capital's sensitivity to rates and inflation.
- Strong Indian growth (IMF 8.2% GDP projection) bolsters Nepal's pegged rupee, but results are not guaranteed.

**By Jay Venaik**

* * *

The [Nepal government budget in the financial year 2017/18](https://www.nbsm.com.np/detail/121/nepal-budget-207475-201718-tax-perspective) allocated the highest expense of the government to the recurring expenditure on administrative functions. A stalwart figure of NPR 499.15 billion which made for 39% of the total budget was spent on general public services. Without a doubt, with the formulation of 7 state governments and 753 local governments, this figure would enormously increase in size. However, sources of revenue do not seem to be expanding in tandem with the gigantic increase in expenses required to meet the requirements of the new federal system of governance. The International Monetary Fund projections for Nepal capped at about 3.2% (GDP growth, 2022) do not seem promising and thus coffers are expected to be covered up mostly with the help of foreign loans (since remittances have also been declining in the past few months). One other way in which a percentage could be met with is foreign investments.

But what would make foreign investments flow in the country? The answer could potentially be found in Nepal’s unique approach of managing its macro economy. For starters, the value of currency depends on the position of its neighbour, India, with which it is pegged. The same projection by IMF predicts India to be speedy accelerating economy of projections of about 8.2% (GDP growth, 2022). This in turn is likely to keep the dollar value of Indian Rupee at a steady rate, if not appreciating in value which in turn keeps the Nepali rupee stronger in the international currency market. So, how do we capitalise the situation? The answer to some extent lies in Central Bank’s interest rates game. If the currency is kept at a slowly appreciating value in the international market, the central bank could either increase or decrease rates with the following consequences.

One of the prime responsibilities of the central bank is to maintain price stability. As we can foresee rising government expenditure will lead to a significant rise in aggregate demand in the economy, inflation then would seem inevitable. In order to control high inflation, central bank will have to tighten its monetary policy, and thus increase the interest rate. However, with higher interest rate, the cost of borrowing increases which in turn would reduce private sector investment in the economy. The reduction in private investment could adversely affect the economic growth of the county, which is a negative consequence of the rise in interest rate.

But, apart from maintaining price stability, there is another positive side which is a consequence of the interest rate hike. With the rise in interest rate, return on capital will increase which would induce more capital inflow into the country. Furthermore, given the rising strength of the Indian economy and Nepal’s fixed exchange rate regime with India, we can assume the expectation of the foreign investors regarding the future value of the Nepalese currency to be on a positive trend. This would complement the higher interest rate in bringing more capital in the country.

However, in order for the above phenomenon to materialize, it could take a considerable amount of time. Additionally, there are chances that things might not move as explained above as numerous other variables come into play which have not been accounted for. Therefore, hiking the interest rate might turn risky as private investments are crowded out and economy may move towards the downward direction. Considering this fact, the central bank could instead opt for an expansionary monetary policy and, keep the interest rate from increasing further. This would leave the private sector investment unaffected and would save the economy from plunging. But again, with this policy, we can expect significant rise in inflation rate. Given, the constant rate of interest (unchanged rate of return on capital) and higher expected rate of inflation, the owner of the foreign capital inside the country can easily anticipate a reduction in the real value of their capital. This would induce them to take the capital out of the country reducing the level of foreign investment in the country.

Both of these options have positive and negative aspects. Before implementing any of these policies, it is necessary to look into the responsiveness of private investment with respect to interest rate and, the behaviour of the foreign capital with respect to interest rate and inflation. For instance, if private investment is highly responsive to the change in interest rate and foreign capital inflow is relatively less responsive to the change in interest rate, extremely tight monetary policy is not desirable. In this case, high increase in the interest rate will crowd out private investment but will not cause an increase in the inflow of foreign capital, thus hampering the economic growth.

However, this comes with a cautionary note. For a first, this is not to indicate cent percent likelihood of the situation as described above. Multiple factors influence the likelihood of either or neither of these situations taking form. And secondly, a considerable amount depends on the Indian economy being strong, even though projections and policies favour a booming Indian economy, yet they are projections and should be taken with a cautionary approach. Thus, while the above could be taken into consideration through economic conjecture, a blanket promise of the same is not advocated through the above article.

[Read more at.](https://spontaneousorder.in/uncertain-lives-how-street-vendors-earn-spend-and-borrow-part-1/)

* * *

**About Jay Venaik**

Jai is a Researcher at the Samriddhi Foundation, Nepal, where he works chiefly on projects regarding Constitutional and Legislative Studies. He comes from a liberal arts background majoring in Economics, Political Science and International Relations from the Symbiosis International University and the London School.

## RTE: Field Experiences From Gujarat

Original: https://www.spontaneousorder.in/p/rte-field-experiences-from-gujarat

Author: Spontaneous Order

Published: 2018-08-06T11:06:48.000Z

Topics: rte-12-1-c, education-reservation, implementation-challenges, gujarat-education

> Section 12(1)(c ) of the Right to Education Act that mandates private (unaided and non-minority) schools to reserve at least 25% seats at the entry-level for the socially and economically disadvantaged, is an acknowledgement of the growth of private sch..

**Summary:**

Section 12(1)(c) of India's Right to Education Act mandates private unaided schools to reserve 25% entry-level seats for disadvantaged children, acknowledging private school growth amid segregated systems, with potential to impact over 20 million children. Only 11 states and one Union Territory have implemented it since 2009, facing private school resistance. In Gujarat, piloted in 2013 with low initial awareness, the 2017-18 shift to an online application portal—requiring form submission at receiving centers—imposed high transaction costs on poor households lacking digital literacy and devices, forcing reliance on overcharging cyber cafes amid crashing servers and dysfunctional help centers. GPS location mismatches further restricted school options, while persistent issues like Gujarati/English-only forms excluding Hindi/Marathi/Urdu speakers, absent helplines, and weak grievance mechanisms continued. Though online systems promise transparency and tracking, they currently exacerbate exclusion of the most disadvantaged. The state showed improved responsiveness, but failure to address old and new flaws undermines the policy. Correct implementation could bridge social distances and boost prosocial behavior in diverse classrooms, as per research. From a classical-liberal lens, effective execution is crucial for this intervention to deliver on integrating the poor without undue burdens.

**Key points:**

- Gujarat's 2017-18 online RTE admission system raised costs for disadvantaged applicants due to digital illiteracy, cyber cafe dependencies, and server crashes.
- GPS inaccuracies and non-functional receiving centers limited school access for eligible households.
- Language barriers in Gujarati/English and lack of multilingual support excluded Hindi, Marathi, and Urdu speakers.
- Absence of a dedicated helpline and grievance mechanism persists, hindering applicant support.
- Improved government responsiveness is noted, but systemic fixes are needed to realize the policy's potential for social integration.

**By Nisha Vernekar**

* * *

Section 12(1)(c ) of the Right to Education Act that mandates private (unaided and non-minority) schools to reserve at least 25% seats at the entry-level for the socially and economically disadvantaged, is an acknowledgement of the growth of private schools in the country, as well as the segregated school system in India (Majumdar and Mooij, 2011).

Such a policy, since its enactment in 2009, has only seen gradual implementation across states and continues to face resistance from private schools in implementing the mandate. Till now, only 11 states and one Union Territory have implemented the mandate. A policy that has the potential to impact over 20 million childreni, it has received very little attention. Barring a few papers and reports by a few organisations (including CCS), and media coverage during the annual admission process in a few states, not much has been written about it.

The recent State of the Nation report outlines the procedural design of admission and allotment process across some of the implementing states, documents the challenges faced by multiple stakeholders, discusses legal developments and issues around expenditures related to the provision. This article discusses a part of the report that documents the challenges faced by the authors, along with others, while assisting applicants and providing information to eligible households during the 2017–18 admission cycle.

The Right to Education Resource Centre (RTERC) at Indian Institute of Management Ahmedabad, which was set up as an action research centre in 2013, has provided information and assistance to applicants about the eligibility process, documents required to avail the provision and has forwarded complaints to the respective authorities (such as the District or State education department). Our involvement with respect to the admission process began in October 2016 when calls started pouring in about the upcoming admission cycle. Many of our insights are based on hundreds of calls from potential beneficiaries, who mistook our office number for a helpline.

The state of Gujarat started implementing this policy in 2013 (initially on a pilot basis) when knowledge about the policy was fairly low, indicated by the low take-up of the policy in the initial years. Apart from the mandatory advertisement released usually one or two days before the start of the process, limited efforts were made by the government to increase awareness. This prompted many NGOs and civil society organisations to spread information through targeted information campaigns, by utilizing various stakeholders such as Anganwadi workers, politicians, and volunteers, among others.

Till last year (2016–17), Gujarat followed an offline process that was conducted at the district level- completely manual and paper-based. A physical application form was required to be submitted by eligibleii households and schools were chosen based on a distance criterion. In 2017–18, Gujarat implemented the policy through a new online system, where applicants had to fill application forms through an online portal. After filling the form, applicants had to go to nearby receiving centres to submit the printed form along with their eligibility documents. Such a shift came with a number of challenges for the applicants.

A policy that targets economically disadvantaged households must factor in transaction costs that it might impose on its beneficiaries. Apart from the costs of obtaining information, seeking help, photocopying essential documents to be submitted as proof, the online system imposed additional financial burdens. Owing to the lack of digital literacy or owning devices (such as computers or laptops) that were required to fill an online form, many applicants rushed to cyber cafes. Costs of filling and submitting forms increased substantially due to this. Cyber cafes overcharging for printouts and accessing internet, and the need of multiple visits due to crashing servers, made matters worse. The receiving centres that were to double-up as ‘offline’ help centres to aid digitally illiterate applicants to fill forms were largely not functional, owing to lack of support provided to those handling these centres.

GPS used to determine applicant’s and preferred schools’ location created additional problems. Mismatch of GPS locations to address proofs submitted at the receiving centres and restriction of availability of schools due to incorrect pin locations, were some of the common problems faced by the applicants.

Apart from these issues that were unique to the online process, many other problems experienced in previous years continued to persist. Even though there are many households that do not speak the local language Gujarati, or English, the advertisement, forms and now the website continues to only appear in these languages. Many applicants who are Hindi, Marathi, and Urdu speakers (some of the bigger language minorities in the state) miss out. The lack of a proper grievance redressal mechanism and any proper helpline to assist applicants, and solve their queries, continues to remain an issue. If not round the year, but having an active helpline for 3–4 months before the admission process begins would be extremely beneficial.

There is a lot that an online system can offer and fix, but the targeted population is yet to reap its benefits. An online system reduces administrative burden, increases overall transparency, and can help track progress of children that can aid in understanding progress and make better policy. However, for an applicant, it has only introduced new problems and additional constraints. It is important to acknowledge that the state government department has been more responsive to queries and complaints during this year’s process but that alone is not enough. The persistence of previous mistakes made and not equipping itself to handle new problems should not be taken lightly, as these lead to the exclusion of the most disadvantaged households.

While our experiences pertain to Gujarat, some of these issues correspond to larger systemic problems observed in other implementing states as well. Regardless of how contentious the policy may be, it has been established as a ‘right’ and must be given its due importance. Further, having students from disadvantaged communities in ‘elite’ classrooms can increase prosocial behavior (Rao 2013), and hence 12(1)© is a potential instrument to bridge such social distances if implemented correctly.

Many points/suggestions in this article appear in other blogs, articles and reports given below for further reading.

End Notes

i. Dongre and Sarin (2016)

ii. While it is a nationally mandated policy, each state sets admission procedures and eligibility criteria. For the state of Gujarat eligibility criteria are set based on age of the child, income of households, and additional allowances are made based on caste groups. BPL card-holders, or non-BPL households having incomes falling under Rs. 68,000 for forward caste categories, Rs. 1 lakh for other backward classes (OBC), and Rs. 2 lakh for scheduled castes and schedules tribes (SC/ ST). Children must be between 5 and not more than 7 years of age at the time of application.

References

-   Dongre, A. & Sarin, A. (2016), ‘Reservation under RTE: Status of Implementation and way forward’. Ideas for India
    
-   Dongre, A., Gupta, I., Sarin, A., Singhal, K., & Vernekar, N. ‘School applications under RTE: Gujarat goes online’. Ideas for India
    
-   Majumdar, M., & Mooij, J. E. (2011). Education and inequality in India: A classroom view (Vol. 46). Routledge.
    
-   Rao, G (2013), ‘Familiarity Does Not Breed Contempt: Diversity, Discrimination and Generosity in Delhi Schools’, Working Paper, Harvard University
    
-   Sarin, A., Dongre, A., & Wad, S. (2017). ‘State of the Nation: RTE Section 12(1)©’. Ahmedabad: IIM Ahmedabad.
    
-   Singhal K. & Vernekar N. (2017). ‘Mistaken For a Government Helpline: Insights from an RTE Research Centre in Gujarat’. The Wire. Retrieved December 7, 2017.
    

Views expressed are the personal opinions of the author (s), and not a reflection of the organisation’s. Centre for Civil Society does not assume any responsibility/ liability for the facts and opinions expressed in the same.

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*Nisha Vernekar works as a Research Associate at Indian Institute of Management Ahmedabad, studying issues surrounding implementation of education technology in government schools in Ahmedabad. She is an incoming M.Sc. in Development Economics student at School of Oriental and African Studies (SOAS). She co-founded Pune Collab, which is a platform aiming to facilitate successful partnerships among NGOs and individuals in Pune. Previously, she worked in rural Rajasthan, trying to build a business with women from local self-help groups (SHGs). She completed her undergraduate degree in economics from Symbiosis International University.*

[

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*Karan Singhal is currently working as a researcher at Indian Institute of Management Ahmedabad studying the impact of the 25% mandate under the Right to Education Act. He co-founded Pune Collab which is a platform aiming to facilitate successful partnerships among NGOs and individuals in Pune. Previously, he has worked on issues related to education, inequality, budgetary expenditure, and gender as a researcher and volunteered with organisations such as Kerala State Planning Board, Centre for Economics and Social Studies, Corporation of Trivandrum, United Nations Development Programme (UNDP) and Asian Development Bank (ADB) Youth for Asia. He completed his Master’s in applied economics from Centre for Development Studies, Trivandrum.*

Read more about RTE: [https://spontaneousorder.in/right-to-education-vs-right-to-educate/](https://spontaneousorder.in/right-to-education-vs-right-to-educate/)

* * *

**About Nisha Vernekar**

Nisha Vernekar works as a Research Associate at Indian Institute of Management Ahmedabad, studying issues surrounding implementation of education technology in government schools in Ahmedabad. She is an incoming M.Sc. in Development Economics student at School of Oriental and African Studies (SOAS). She co-founded Pune Collab, which is a platform aiming to facilitate successful partnerships among NGOs and individuals in Pune. Previously, she worked in rural Rajasthan, trying to build a business with women from local self-help groups (SHGs). She completed her undergraduate degree in economics from Symbiosis International University.

## The Farmer’s Yoke: Financing India’s Peasantry

Original: https://www.spontaneousorder.in/p/the-farmers-yoke-financing-indias-peasantry

Author: Spontaneous Order

Published: 2018-08-06T11:00:00.000Z

Topics: financial-inclusion, agricultural-credit, farmer-suicides, rural-banking

> Over 12000 farmers have committed suicide in India each year since 2013, with 60% of them driven by high debt or bankruptcy. Since independence, persistent endeavours by the Government of India have aimed to uplift the poor by providing a level playing ..

**Summary:**

India's peasantry faces a crisis with over 12,000 farmer suicides annually since 2013, 60% due to debt or bankruptcy, despite government financial inclusion efforts covering 30.84 crore beneficiaries and generating INR 72,000 crore in deposits. These initiatives falter due to high interest rates, poor infrastructure, and low financial literacy, with formal farm credit growth at a tepid 4.9% even as SBI allocates only 10% of its INR 13.4 lakh crore loan book to rural areas. High risks from lacking warehouses, credit bureaus, irrigation, and vulnerability to weather and price volatility justify risk premiums, while 86% of farmers hold one hectare or less, relying on informal credit (41% of total) amid land title issues and politicized loan waivers that erode bank lending. From a classical-liberal viewpoint, post-independence interventions like abolishing zamindari have failed to break rural hierarchies, and priority sector lending's 50% agricultural credit-to-GDP ratio falls short of the 70% needed for depth. Solutions include a single regulator for MFIs, risk-reducing infrastructure, biometric ATMs and mobile wallets to eliminate middlemen, financial literacy, insurance innovation, and leveraging India Post's 1.4 lakh rural branches. Only addressing these policy and implementation gaps will deepen credit markets, lower rates, and achieve goals like doubling farm incomes.

**Key points:**

- Over 12,000 farmers suicide yearly since 2013, with 60% from debt, highlighting financial inclusion failures.
- 86% of farmers have ≤1 hectare land, driving 41% informal credit reliance and tepid formal growth at 4.9%.
- Build infrastructure like warehouses and credit bureaus to cut agricultural lending risks and interest rates.
- Deploy biometric ATMs and mobile wallets to bypass middlemen in benefit delivery.
- Revamp priority sector lending to reach 70% credit-to-GDP ratio and enable insurance product innovation.

**By Spontaneous Order**

* * *

Over 12000 farmers have committed suicide in India each year since 2013, with 60% of them driven by high debt or bankruptcy. Since independence, persistent endeavours by the Government of India have aimed to uplift the poor by providing a level playing field. The journey has been tumultuous and rife with challenges, ranging from difficulty in data collection to the navigating the complex delivery system of benefits to the under-privileged. One of the tools for improving the economic conditions of the poor has been financial inclusion i.e. extending financial services and credit to weaker sections of society. Even though the initiative has succeeded in covering 30.84 crore beneficiaries generating over INR 72000 crore worth of deposits in their accounts, the success of financial inclusion hasn’t proved to be a buoyant force for poverty reduction due to high interest rates, lack of infrastructure, and low financial literacy.

One of the principal concerns of policy-makers has been low credit creation at the bottom of the pyramid in the rural areas. Despite being the bank with the largest network in the country, SBI, with a loan book of over 13.4 lakh crores reported a measly 10% of credit dedicated to rural India. Even with the help of NABARD and rural co-operative banks, formal farm credit growth remains tepid at 4.9%. The mandate imposed by RBI on banks to operate 25% branches in rural segment, and presence of Micro-Financial Institutions (MFIs) don’t seem to be bringing the rate of interest down for agriculture even though schemes to do the same remain a striking feature. The lack of transparency in and information on the functioning and financing of MFIs itself has been the subject of much scrutiny. To further infuse accountability, Sudha P. Rao and M.R. Anand have put forth an interesting proposal. They suggest the creation of a single point regulator with a mechanism for monitoring activities by lending entities, and the interest in the creation of new organisational forms offers valuable insights into the future policy developments in the sector.

A possible explanation for high interest rates on loans to agricultural sector lies in risk premiums. Lack of warehouses, credit bureaus, weather houses, commodity markets, awareness on cultivation, and irrigation combined with frequent floods and droughts provide enough reasons for banks to be reluctant to lend capital. Earnings in rural India remain at the mercy of natural factors, and dependent on the total production of crops which acts like a double-edged sword. A good crop pulls down the prices, thereby depressing total income and a bad one pulls up the price without increasing the total income. With low risk in agriculture, the rates of interest in the sector will deflate — and with consistent earnings, financial inclusion will meet its objectives. This will deepen the credit system of the country and further bring down overall rates of interest.

Historically, the Indian peasantry has been largely dependent on the patriarchal Zamindars for support. Despite targeted policy-efforts- including the abolishing of Zamindari system, re-allocation of land, catalysing penetration of banks — the post-independence peasantry is still caught in the rural social hierarchy. The government and RBI need to address the issue of non-availability of formal credit to 86% of farmers, who have one hectare or less of land, due to dependence of credit lending on titles of land holdings. Today, around 41% of total credit is informal due to this reason, and certainly the reason why agriculture is a smaller part in GDP, as it is more prone to supply side shocks and inflationary pressures. With the constant politicisation of loan waiving as a tool for voter appeasement, the already jeopardised financial credibility of farmers further drops — turning a bad situation worse. Absence of bonds to restructure lending of farm loans, as opposed to the UDAY scheme for power sector, makes banks reluctant to restart lending to farmers after events like farm loan waivers which eventually hits the total credit supply to agro-sector and breaks the future cycle of lending. Priority sector lending (PSL) also needs to be revamped, as the credit-to-GDP ratio of 50% in agricultural doesn’t meet the rough estimates of 70% to achieve financial depth.

Changes in the government’s policy approach needs to be supplemented with modified methods of implementation. To ensure a seamless delivery system of benefits to the underprivileged, it is important for them to know their rights, and processes of delivery so that frauds and scams can be reported and thereby nipped in the bud or totally prevented. Many a case of middlemen, often the village Sarpanch, has come to light where they take a “cut” from direct bank transfers to illiterate beneficiaries for operating their accounts. Such instances keep discrimination and abuse alive. Biometric ATMs have proved to be beneficial in African nations. So have mobile wallets. These help do away with middlemen, and barriers of usage. DCB bank, in its pilot project, proved the utility of such devices to improve access of ATMs to rural areas.

In addition to this, the government has to work towards spreading awareness about saving and insurance products in rural India. The lower strata have lived under constant financial duress due to absence of savings. Insurance products need to be given room for innovation, since the direct and narrow directives inhibit their proliferation and application. The decision to give India Post a payments bank license is a welcome step, as it can leverage its 1.4 lakh rural branch network to disseminate banking services. However, the government’s work on financial inclusion is far from done. Unless these gaps in policy and implementation are addressed, the government’s initiative, to positively impact the agricultural sector and double farm income by 2022, will not be realised in totality.

Read more: [https://spontaneousorder.in/farmers-middlemen-and-the-way-out/](https://spontaneousorder.in/farmers-middlemen-and-the-way-out/)

**REFERENCES**

**1\. PRS Legislative Research, 2016–17, State of Agriculture in India**  
**2\. IIM Bangalore Review, 2015–16, Thakrom and Kamath, Financial inclusion: Policies and Practice**  
**3\. RBI 2016–17 Report on financial stability**  
**4\. CGAP, 2016 , India’s push for financial inclusion**  
**5\. International Finance Corporation, 2016–17, Report on Financial Inclusion**  
**6\. RBI, Mor Committee on Comprehensive Financial Services, 2013**

by Aashish Kalra  

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*Aashish is working towards his CFA charter. His interests lie in understanding the system, and markets. He has worked with boutique investment management firms, and banks in investment divisions. He likes to read, cycle and write poetry.*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Freedom of Movement

Original: https://www.spontaneousorder.in/p/freedom-of-movement

Author: Spontaneous Order

Published: 2018-08-06T10:54:19.000Z

Topics: free-movement, migration-economics, india-nepal-treaty, labor-mobility

> In today’s dynamic era of nation building, the European project has been hailed as a new step towards creating a free world. The same is echoed by the ‘four freedoms’ that serve as the foundations of amalgamating societies across lines of culture, t

**Summary:**

Jay Venaik defends freedom of movement as a classical-liberal achievement, highlighting India-Nepal (1950) and India-Bhutan (1949) friendship treaties as pioneering open borders among developing nations, predating the EU's Treaty of Rome (1957). These enable free movement of persons, property, trade, and residence, fostering cross-border lives despite recent nationalist calls for walls. Economically, free movement addresses labor shortages in skilled sectors like UK's NHS (10% non-British staff), accelerates filling vacancies in teaching and nursing, counters ageing populations with demographic dividends, prevents wage inflation, generates remittances (Nepal: 31% GDP per Pew Research), boosts host-country consumption and GDP, and saves border enforcement costs. Acknowledging downsides like housing strain, congestion, and potential low-skill wage dips or brain drain (e.g., Nepal's post-2015 earthquake reconstruction), Venaik cites UK studies by Manacorda, Dustmann, Nickell, and Saleheen showing 'little overall adverse effects' on native wages and employment. Lacking extensive India-Nepal studies, he warns nationalist rhetoric undermines this early liberal feat.

**Key points:**

- India-Nepal (1950) and India-Bhutan (1949) treaties pioneered free movement among developing nations, enabling cross-border residence, property, trade, and labor.
- Free movement fills labor shortages (e.g., 10% UK NHS staff non-British), stabilizes wages, generates remittances (Nepal 31% GDP), and boosts GDP while saving border costs.
- Empirical UK studies find minimal adverse effects of immigration on native wages and employment, even for less-skilled workers.
- Nationalist pressures threaten the economic benefits of India-Nepal open borders despite limited local studies.

**By Jay Venaik**

* * *

In today’s dynamic era of nation building, the European project has been hailed as a new step towards creating a free world. The same is echoed by the ‘four freedoms’ that serve as the foundations of amalgamating societies across lines of culture, traditions, history and geography. With Brexit in 2016 and the following negotiations thereafter, one of the four freedoms has come under heated debate, the free movement of persons. While the British Prime Minister has been vehemently opposing this freedom, the EU Leaders have been stressing their strong support to this freedom. While the negotiations continue, its interesting to see how the world fares on the free movement of persons.

From the start of 1900s till date, an approximate of ten such agreements exist all over the world with the first being Britain and Ireland in 1923 with the enactment of the Common Travel Agreement. Apart from the EU (Schengen Agreement), Russia and Belarus have a similar arrangement under the name of Union State (1996), the Nordic countries signed a passport union (1954) while the Andrean Community, CARICOM, Gulf Cooperation and the East African Community are a product of the 21st century. While every single arrangement is varied in text and composition, two other such relationships exist, ones not only based on economic rights but also on the ideals of friendship. The Friendship Treaty that exists between India-Nepal (1950) and India-Bhutan (1949) are one of their kinds and certainly one of the first amongst developing nations. That is a feat in itself that even the EU cannot claim as the pioneer having begun the process via the Treaty of Rome signed in 1957 and enacted in 1958.

The friendship treaty between India and Nepal does not limit to free movement of persons but also in matters of property, trade and commerce and residence. The result of which is that Indians and Nepalis have made their homes on either side of the border, people transcend the abstract notion of borders whereby the great Nepali Sherpa hero, Tenzing Norgay took his last breath on Indian land while the ex-crown prince found his princess in India. However, in recent times the relations between the two nations have come under heavy criticism. Flared up by nationalistic notions on both sides of the border, petitions have also called for a wall and stricter border controls. I do not wish to comment on the political face of the issue, rather, I would take a look on the economic advantages and disadvantages that the open border brings.

Countries are prone to experience labour shortages, especially when the case of specific skilled positions are required in the rapidly advancing age of technological progress. The National Health Service of the UK is a fine example to be quoted here, about 10% of the staff at NHS are not British. Similarly, in an economy, there may appear shortages in certain professions such as teaching and nursing. These vacancies can take a long time to fill because of the time taken to undertake training. If there is free movement of labour, qualified workers will be attracted to fill these vacancies making the economy more flexible and overcome shortages quicker. Countries which suffer from lack of workers due to a rapidly increasing ageing population also see benefits from countries rich in demographic dividends.

Moreover, if an economy experiences labour shortages, it will put strong upward pressure on wages; higher wages can easily lead to inflationary pressures. Free movement of labour means rising wages will attract more labour into a country and this will prevent excess wage inflation. Remittances according to Pew Research Centre’s latest report indicates the survival of many countries depend on this very income coming from migrant workers abroad and help the home country. Nepal is known to be a very big beneficiary of about 31% of the GDP. Apart from these, migration is also know to create additional demand in the host country boosting consumption and hence the GDP. Additionally, it saves huge costs of maintaining force for verifications at borders and from creating them in the first place.

However, freedom of movement of persons does create certain lags in economic terms. Large net flows of people cause infrastructure problems especially for housing. Further more, due to increase in immigrants, a high population density may create problems of congestion leading to a decrease in quality of life. Furthermore, the labour market theoretically might see a dip in wages due to over supply of labour. However, the same has seen contrary results by academicians such as Manacorda, Dustmann and, Nickell and Saleheen as they note, “Empirical research on the labour market effects of immigration to the UK finds little overall adverse effects of immigration on wages and employment for the UK-born…The less skilled are closer substitutes for immigrants than the more highly skilled. So any pressures from increased competition for jobs is more likely to be found among less skilled workers. But these effects are small.” There is also the case for shortage of workers and brain drain cases in under developed economies. A fine example of the same could be seen in Dhadhing in Nepal which did not have workers for the reconstruction work post the 2015 earthquake.

While no extensive study is available on the case of economic implications of the India-Nepal free movement of people, nationalistic rhetoric has caused injury to a feat that India-Nepal achieved at the very beginning of their respective contemporary histories.

* * *

**About Jay Venaik**

Jai is a Researcher at the Samriddhi Foundation, Nepal, where he works chiefly on projects regarding Constitutional and Legislative Studies. He comes from a liberal arts background majoring in Economics, Political Science and International Relations from the Symbiosis International University and the London School.

## Loans Go Bad

Original: https://www.spontaneousorder.in/p/loans-go-bad

Author: Spontaneous Order

Published: 2018-08-06T10:47:46.000Z

Topics: npas, public-sector-banks, bank-privatisation, government-incentives

> Loans go bad. For all banks, private and government-owned. Loans go bad, because business is inherently risky. Banks know this, and they plan their affairs around risk management. They do this, firstly, by charging different interest rates to different ..

**Summary:**

Loans inevitably go bad due to business risks, but Indian public sector banks suffer abnormally high NPAs at 14% compared to 4% for private banks and global figures like 1.3% in the USA, 0.9% in the UK, and 2.6% in Sri Lanka, exacerbated by scams like Nirav Modi's at PNB, which saw three CEOs during the fraud. This stems from government ownership, where 'everybody owns it, hence nobody,' severing the alignment of interests between owners and managers—unlike private firms where promoters like Mukesh Ambani stake their wealth on long-term success. Public bank executives, rotating frequently and reporting to short-term politicians, prioritize patronage loans over sound risk assessment, enabled by bypassed audits and collusion, as seen in Vijay Mallya's Kingfisher equity conversion at a 60% market premium benefiting both sides. Finance ministry bosses pressure sub-optimal lending, then recapitalize losses with taxpayer money, perpetuating the cycle. Governments resist privatizing 70% of banking assets to retain patronage control, underscoring classical-liberal critiques of state-run enterprises' incentive failures versus private ownership's discipline.

**Key points:**

- Public sector banks' 14% NPA ratio dwarfs private banks' 4% due to misaligned incentives from diffuse government ownership.
- No one has skin in the game in state banks, unlike private promoters whose wealth ties to firm success, leading to poor risk assessment and fraud tolerance.
- Politicians direct patronage loans, enable evergreening, and fund recapitalizations with taxes, as in Nirav Modi and Vijay Mallya cases.
- Privatization of public sector banks is stalled to preserve government control over 70% of banking assets.

**By Mohit Satyanand**

* * *

Loans go bad. For all banks, private and government-owned.

Loans go bad, because business is inherently risky. Banks know this, and they plan their affairs around risk management. They do this, firstly, by charging different interest rates to different customers — long-standing customers with sound balance sheets get lower rates; newer and riskier businesses pay higher rates.

The underlying principle is that higher risk should be compensated by higher reward.

This assessment of risk is at the heart of banking, and successful banks are those which are able to assess risk well. When loan officers make errors of judgement, and borrowers don’t pay interest on loans, those loans no longer perform their task of earning money for the bank. Hence they get called Non Performing Assets, or NPAs.

As a result of the Nirav Modi scam, we are hearing a great deal about NPAs in the Indian banking system, and are told that the current ratio of NPAs to total loans is above 10%. This is an abnormally high ratio. To put it into a global perspective, the current NPA figure in the USA is 1.3%, in the UK 0.9%, and in our southern neighbour, Sri Lanka, banks have an NPA of 2.6%.

If you divide Indian banking into two parts — government banks and private banks, the NPA chasm is wide — about 14% for the public sector, and 4% for the private. These numbers, especially for the former, will probably go up once the Nirav Modi scam gets accounted for. Without getting into too much detail, it is very clear that the size of the Indian bad loan problem is much, much bigger for government banks.

Why are government banks doing such a good job of making bad loans?

Ownership. And incentives.

These two words tell you why Air India has the worst on-time departure rate of all Indian commercial airlines, and the largest losses. It also tells you why most of us use private telecom companies for our cell phones, rather than MTNL or BSNL. Or why 40% of Indian parents would rather pay to send their children to school, than get them a free education at a government school.

Our government doesn’t do a particularly good job of anything, whether of dispensing justice, or of making sure that those who have driving licences know how to drive safely.

But when you compare government owned businesses with those that are privately run, the difference is particularly stark, and I believe it comes down to the relationship between the business and its owners.

When I set up a business, my economic fortunes are closely linked to the success of the business. If it thrives, I can upgrade from a Maruti Alto to a Mercedes. If it doesn’t do well, I have difficulty putting petrol in my car. The interests of the business and the owner are aligned.

Now imagine this business grows, goes public, and I own only 33% of its shares. I still run it, but for every rupee the business earns, only 33 paisa belong to me; other shareholders are the rightful owners of twice as much of the company’s earnings as I. If I am greedy, I have an incentive to take money out of the company. For every such rupee I take out, only ⅓ rd actually belongs to me . The government tries to protect the interests of the other shareholders by an elaborate regulatory structure of Independent Directors, auditors, Registrar of Companies, SEBI, etc. I’m sure they help, but I think the most important reason that small shareholders don’t get cheated more often has to do with incentives.

Even if the original owner, the so-called promoter, owns only 33% of a company, he still has a deep interest in the success of the company — he derives a salary and perquisites from it; his reputation as a captain of industry comes from the continued success of the business; most importantly, if the company does well, and develops a reputation as a well-run business, its shares do well. The value of this shareholding is the biggest source of wealth of business-owners. When you hear that Mukesh Ambani, or Jeff Bezos, is worth so many billion dollars, that number is largely made up of the value of their share-holding in their firms. In other words, the promoter has a deep interest in making sure that, even if he cheats the company, it is only to the extent that he does not do it great harm.

So who has the same long-term sense of ownership in the healthy survival of a government-owned bank? Who owns it?

Everybody, and hence nobody.

Since the majority share is owned by the Government of India, we are all ultimately shareholders of these banks. But that share is so tiny, that unlike a Mukesh Ambani heading Reliance Industries, we have no say in running the bank. The bank, instead, is run by managers, headed by a Managing Director. This Chief Executive changes every couple of years — during the time the Nirav Modi scam was running, PNB had 3 chief executives. This CEO reports to a board of directors — some RBI and finance ministry officers, some independent directors — none of whom have a long-term interest in the bank. Instead of this alignment of interest and ownership, we have every form of regulation and audit. To quote Debashis Basu in the Business Standard on March 5th, “concurrent audit, internal audit, statutory audit, RBI audit, risk-based internal audit, revenue audit, information systems audit, snap audit, segment audit…”

Who loses when these audit systems don’t work, as they haven’t? Every citizen of India, and hence nobody. The Managing Directors move on, the govt officials continue up the bureaucratic ladder, independent directors serve on other boards, and the auditors audit other companies.

The public exchequer loses money, but a few billion dollars, spread across a billion people disappears into the mess of public accounting. Yawn, and move on.

Who gains? Obviously, Nirav Modi gained. But systems were over-ridden to allow the fraud; then, other systems were bypassed so the fraud was not detected. For years on end. This required wide-spread collusion. Bankers, and their bosses in the Ministry of Finance, know the value of money, and they would not have done allowed Nirav Modi to make 11,000 crore without a decent share.

When Vijay Mallya’s Kingfisher Airlines got into trouble, his bank loans from a consortium of government banks were converted into equity. Happens often, but the price at which the conversion happened was 60% higher than the price of the shares in the market. That means that instead of selling, say, 10 crore shares in the market to pay the banks, Mr. Mallya got off by transferring 6 cr. shares to the banks. Everyone in the deal knew how to add, subtract and multiply. So the deal only adds up if both parties profited from the over-pricing of Kingfisher shares.

The real bosses of public sector banks are those who run the finance ministry. They are supposed to represent us, the ultimate share-holders. They are the ones who can pressure bank directors to make sub-optimal loans, and then to roll them over. They come and go with elections, and have no long-term interest in the health of the banks. When NPAs mushroom, they order recapitalisation, meaning that our taxes get used to compensate for Modi and Mallya frauds, and make sure the balance sheets have enough capital for the next round of bad loans. When things go really bad, they point fingers at the previous government. Depending on the flag we wave, we believe them, or don’t.

But the patronage machine rolls on. And it is because of this love of patronage that there is no hurry to privatise public sector banks. Which government wants to give up its control over 70% of the banking assets of the country?

Read more about banking problems: [https://spontaneousorder.in/bank-privatisation-is-not-necessarily-the-solution/](https://spontaneousorder.in/bank-privatisation-is-not-necessarily-the-solution/)

* * *

**About Mohit Satyanand**

Mohit Satyanand is an entrepreneur, consultant, investor and policy wonk. After an M.A. from Delhi School of Economics, he joined Hindustan Lever as a management trainee, moving 4 years later to Delhi Flour Mills, where he established India’s first successful snack food brand, Crax. He still provides strategic direction to that business, as well as several other small- and mid-sized manufacturing firms. In 1989, he co-founded Teamwork Films, which now produces several of India’s most prestigious arts festivals, including the Jaipur Literary Festival, and annual festivals in Singapore, South Africa, Europe and North America. In 2002, he co-promoted a chain of English language teaching centers in Delhi under the Swiss brand name, inlingua. Chairman of the Board of Trustees of Liberty Institute, a policy think-tank, he has a special interest in the policy thrust of education and macro-economics. Mohit is also consulting editor, Outlook Money, where he oversees the magazine’s coverage of the equity sector. Mountain-lover and life-long trekker, he has recently taken to running half marathons.

## The Controversy of Death

Original: https://www.spontaneousorder.in/p/the-controversy-of-death

Author: Spontaneous Order

Published: 2018-08-06T10:42:33.000Z

Topics: death-penalty, criminal-justice, state-violence, civil-liberties

> In an era where we can inconceivably see different political opinions distill from each other, and mutual consensus building, become ever reclusive, it is important that we reassess our structure of the state machinery. Much to Hamilton’s dismay, in a p

**Summary:**

Akshat Singh argues from a classical-liberal perspective against India's death penalty, critiquing the state's monopoly on violence as enabling it to 'play god' by treating crimes as violations against itself rather than individuals, thus undermining citizens' liberties and the social contract. Philosophically, he contrasts Lockean equal shareholders with Hobbesian subjects, warning that retributive justice fosters an 'each man for himself' environment, ignoring societal roots of crime and favoring restoration over proportionate harm. Practically, the system's elusiveness is evident in no records since 1947, conflicting estimates (official 52 executions since independence vs. 1,422 from 1953-1963), and judicial hush despite 14 IPC sections; only 5 executions occurred since 1995, versus 1,012 in the US. US federal data reveals states with death penalties have higher violent crime rates, suggesting correlation. India opposed UN moratoriums in 2007 and 2012, aligning with 57 'retentionist' nations like China and Saudi Arabia per Amnesty International. Citing Foucault and Sarat, Singh contends capital punishment erodes state legitimacy by blurring legal and extralegal violence. He advocates abolition, noting life sentences allow repentance and countries like Russia manage security without it, urging a shift to restorative justice under Article 21's right to life.

**Key points:**

- India's death penalty system lacks transparency, with no records since 1947 and estimates ranging from 52 to 1,422 executions post-independence.
- States in the US with death penalties exhibit higher violent crime rates, indicating a problematic correlation.
- Capital punishment treats crimes as state violations, promoting retributive over restorative justice and glorifying state power.
- Abolishing the death penalty aligns India with liberty-upholding nations, enhances legitimacy, and allows prisoner repentance via life sentences.

**By Akshat Singh**

* * *

In an era where we can inconceivably see different political opinions distill from each other, and mutual consensus building, become ever reclusive, it is important that we reassess our structure of the state machinery. Much to Hamilton’s dismay, in a parliamentary democracy, it is highly convenient to look at the most observable political developments while completely ignoring the functioning of the unelected officials. This problem becomes more severe when the underlying issue is continuously creating a contravention and yet going severely unnoticed. One such issue is that of death penalty in India.

Many might fiercely argue that the practice of awarding death penalties in India has been (by custom) placed at a rarest of rare pedestal and does not necessarily qualify as an emergency. The fact that only 5 people have been executed in the country since 1995 seems like sufficient proof of this, considering that our star spangled friends across the Atlantic have conducted 1,012 executions in the same period of time.

However, a philosophical problem arises when we consider the fallacy in looking at the problem of death penalty in an excessively empirical way, somehow implying that a problem’s intensity is always dependent on its magnitude.

Before I try establishing a liberal case against the practice of death penalty, it is imperative that we look at the excessively problematic structure of the state. To begin with, I do not seek to challenge the well-established notion of a mutual and binding social contract between the citizens and the state, and the capacity of punishment and coercion provided to the state in case of a violation. The Weberian definition of the state as an organisation with a monopoly on the use of force, perhaps embraces the term in the most representative manner.

The problem arises when we try understanding the nature of the citizens’ with respect to a particular state. Are citizens equal shareholders in a mutually binding contract as proposed by Locke, or are they savages meant to uphold a pious order for meager survival as per Hobbes? In reality, they seem like they are neither and yet, both.

While on one hand citizens can be looked at as subjects of the regressive 21st century democratic order, which is skeptical of inclusivity and yet on the other, we have not arrived at the stage where we can shed the individual liberties of most citizens and club them with the state. This becomes a theoretical point of contention, especially with reference to death penalties as we see that, ever increasingly, the violation leading to death penalties is seen as a violation of the state and not a given individual. This is severely problematic as it doesn’t only glorify the state to the extent of ensuring that it can play god, when its sanctity is violated, it also undermines the individual liberties of citizens, who on being wronged might not get the privilege of the same punishment being meted out.

What is more troublesome for death penalties in India is the multitude of practical problems related to it. The most worrying one is the excessive elusiveness, accorded to it by successive governments and the ‘all sacramental’ Supreme Court of India. The denial of maintenance of any records in 1947, however ludicrous it may sound, serves as one of the illustrious examples. The fact that an official estimate of 52 executions since independence has been countered by an estimate of 1422 executions from 1953 to 1963 is enough to raise eyebrows. Adding to this cacophony is the prolonged hush-hush of the judiciary. If a practice is mandated by fourteen different sections of the Indian Penal Code, why is it vilified? Is the practice an overt taboo, making all participants involved (in essence, only the giver of capital punishment, since the opinions of receiver will become redundant) embarrassed? If, this is so then why as a society must we oppose the existence of UN sanctioned moratoriums on the capital punishment as we did in 2007 and 2012.

An elaborate narrative of lurking lawlessness and complete chaos taking over is often sung whenever a liberal notion of the capital punishment is put forth. “Next thing we know, you shall say that an individual should have the freedom to kill their neighbour as well,” is one of the several ridiculous statements that are levied against any such notion. For those who do not see, the obvious logical fallacies, let us just say that putting forth the aforementioned statement is like saying socialists do not know economics. Unsubstantiated with empirical evidence, the rhetoric borderlines on lunacy.

If we rely on the data from the United States of America, which in its guise of a federal order gives each state to adopt their own laws, we can get a comparative understanding of a largely homogenous order. We come to the realisation that the states with death penalty have a higher rate of violent crimes. Since, we cannot possibly establish a causative flow between either of the variables, it must be taken seriously, that a co-relation exists, nonetheless.

We earlier also spoke about the conception of justice with pretense to the state. The problem with the status quo is that by looking at the crime being committed against the state, it necessarily takes on the robes of a system of retributive justice. It focuses on levying a proportionate amount of harm to the delinquent rather than restoring and preventing a future incident. Considering, that this conception inevitably creates an ‘each man for himself’ environment, the fact that the society which necessitated delinquent behaviour in the first place, is left untouched. A paradox arises- on one hand the state assumes the role of the entire society to punish the perpetrator, and on the other, the role of society is blatantly disregarded in restoring a just order.

At this point, the ‘Right to Life and Personal Liberty’ as assured by Article 21 of the Constitution becomes ‘Right to not necessarily being condemned to death, if lucky’. Michel Foucault in ‘The History of Sexuality’ offers a similar idea when he says that the defining privilege of the European absolutist monarchies before 17th century was pronouncing life and death. Thus, “the sovereign exercised his right of life, only by exercising his right to kill or by refraining from it” (Foucault, 1984). This notion becomes problematic in a 21st century democratic order, since it is neither absolutist nor headed by a sovereign. Far from it, the state tries maintaining an order which is inherently based on the collective will of the citizens to continue living together and is upheld by the guarantee of certain privileges being meted out, regardless of the individual’s socio-political status.

Renowned political theorist, Austin Sarat offers yet another anomaly. Capital punishment, Sarat argues, undermines the distinction between extralegal and legal violence, which in turn jeopardises the law’s claim to legitimacy. He says, “Legitimacy is … one way of charting the boundaries of state violence. It is also the minimal answer to skeptical questions about the ways that state violence differs from the turmoil and disorder the state is allegedly brought into being to conquer” (Sarat, 2001), thus pointing to the philosophical contention of the creation of a modern day liberal state on one hand and keeping the bastion of populist values, intricate in our system.

No wonder, in the present day scenario only 57 countries have been categorised as ‘retentionist’ by the Amnesty International. We are forced to beckon the question that how can we proclaim the status as upholders of peace and liberty while condemning political extremists to death and sharing a common space with overtly tyrannical states like China and Saudi Arabia?

Moreover, how is it that most other countries manage their internal and external security with perhaps better efficiency even without the provision of a capital punishment? Are criminals, just somehow worse in India? One might argue that it is unfair to compare the law and order in India situation to that of developed Western European countries which have enjoyed independence and all the developmental perks that come along, but what about Russia which has practically abolished death penalty. Here, we hit a roadblock.

However dehumanising, it may sound, I must mention that the price of death is a lot higher than we think. Kept in maximum security prisons, for multiple years while all their clemency pleas carry the verdict of life to and forth, the prisoners may just have a chance at repentance if they are given a life sentence. This, along with the obvious moral dilemma that capital punishment poses, it is uncanny why we have learnt to embrace our dead silence.

*References*

*1\. Right of Death and Power of Life.” The History of Sexuality, by Michel Foucault, vol. 1, Crane Library at the University of British Columbia, 2009, p. 135  
2\. Sarat, A. (2002). When the state kills: Capital punishment and the American condition. Princeton, NJ: Princeton Univ. Press.*

* * *

**About Akshat Singh**

Akshat Singh is currently a Research Associate at the Society for Policy Studies, New Delhi. He holds a degree in Politics & Government from Sciences Po, Paris and is presently enrolled at Columbia University, New York where he pursues Economics. He is keenly interested in the intersection of public policy and neuroeconomics.

## Opinion | Reforms to save government schools in Karnataka

Original: https://www.spontaneousorder.in/p/opinion-reforms-to-save-government-schools-in-karnataka

Author: Spontaneous Order

Published: 2018-08-06T10:18:36.000Z

Topics: government-schools, education-reform, school-inspection, parental-choice

> Basavaraj Horatti, the former minister for primary and secondary education in Karnataka, is anguished by the declining enrolments in state government schools. He demanded that parents should be allowed to admit their children in private schools only aft..

**Summary:**

Declining enrollments in Karnataka's government schools, part of a national trend where government enrollment fell by 11.2 million from 2011–15 while private rose by 16 million, reflect parental preference for English-medium schools amid low learning outcomes. Rather than restricting choice as urged by former minister Basavaraj Horatti, the classical-liberal perspective advocates addressing concerns through systemic reforms during planned department mergers. Karnataka's biometric attendance failed due to weak inspection: officers oversee 300 schools, spend only 40% of time on supervision (under 10% on academics), and face conflicts like self-inspecting their own construction work. Merging primary/secondary/higher education departments and separating delivery schemes (SSA, RMSA, RUSA) into a new body under a dedicated secretary would focus it on quality (infrastructure, teachers, etc.), with departmental inspectors ensuring accountability. Rajasthan's SSA-RMSA merger yielded 27% cost savings by cutting duplication. This reform eliminates perverse incentives, boosts efficiency, and could make Karnataka a pioneer in accountable education governance, respecting parental choice.

**Key points:**

- Declining government school enrollments require improving quality and inspection rather than banning private school admissions.
- Merge education departments and separate SSA, RMSA, RUSA into a new delivery body accountable to inspectors to fix conflicts and priorities.
- Karnataka inspectors handle 300 schools with under 10% time on academic supervision, necessitating structural reform.
- Rajasthan's scheme merger saved 27% costs, offering a model for Karnataka beyond savings—to enhance learning outcomes.

**By Ritika Shah**

* * *

Basavaraj Horatti, the former minister for primary and secondary education in Karnataka, is anguished by the declining enrolments in state government schools. He demanded that parents should be allowed to admit their children in private schools only after all the seats in government and private-aided schools are exhausted. The enrolment decline is not limited to Karnataka, but is happening across the country. In 2011–15, the total enrolment in government schools fell by 11.2 million, whereas in private, it rose by 16 million.

This shift in enrolment from free to fee-paying schools is a result of low-learning outcomes and parental preference for English-medium schools. If one wants to retain parents in government schools, one must address their concerns rather than restrict their choice.

The government of Karnataka is, in fact, addressing concerns to resolve the challenges. For instance, in June, it proposed to pilot English-medium classes in 1,000 government schools. For learning outcomes, some interventions by state governments (like monitoring teachers with cameras) had shown significant progress during their pilots. Despite this, they could not be sustained. Karnataka, therefore, must look for alternatives in systemic reforms, and the mergers that are being considered in the state provide a perfect opportunity.

Horatti proposed the merger of the department of primary and secondary education with the department of higher education to ensure “continuity of policies”. Similar experience from Rajasthan, where the Sarva Shiksha Abhiyan (SSA) and Rashtriya Madhyamik Shiksha Abhiyan (RMSA) were merged recently, is positive. It streamlined resources by eliminating duplication of staff, buildings, vehicles and efforts, which resulted in 27% cost savings. The merger is relevant to Karnataka, not so much for cost saving, but because it creates a golden opportunity to systemically fix the inspection process and, consequently, learning outcomes. Karnataka must, therefore, capitalize on the opportunity.

Inspection, key to improving outcomes, needs to be more robust. Karnataka had recently introduced a biometric attendance system to tackle teacher absenteeism. However, the inspecting officers who were required to take action against the errant teachers failed to initiate it, rendering the installation of biometrics moot. Without a strong inspection system, all the other policies intended to improve quality will also suffer a similar fate. The inspecting officers are occupied with many trivial and conflicting responsibilities. According to a dated review, the inspecting officers are engaged in multiple non-core activities such as “collecting donation, in cash or kind, for the benefit of education” and “handling pension cases”. Of their work time, only about 40% is spent on supervision and inspection (31% on inspection of construction activities and 8.7% on supervision of academics). One inspector in Karnataka is in charge of about 300 schools. Given that less than 10% of his time is spent on academic supervision, even at the rate of one visit per school in a year, an inspector has to visit about 13 schools per day in the 231-annual school days.

Inspection not only has low priority, but also suffers from missing accountability. On one hand, an inspector is responsible for constructing classrooms and, on the other, to inspect the construction and ensure that he did the job properly. An inspector is required to perform, and also self-ascertain the quality of his performance. This absence of accountability results in a lack of independent inspection of schools and creates perverse incentives to suppress faults from public view. Therefore, through a modification during the mergers, Karnataka should fix the inspection structure.

When merging the three levels of departments and two levels of schemes (SSA and RMSA), the merged schemes should be separated from the departments into a new body. The new separated body will entail “delivery” of education and include functions related to management, such as infrastructure, teachers, books, uniforms, meals and scholarships. An officer of the rank of a secretary can solely oversee this new body and dedicate his energy to improving the quality of delivery. The existing personnel of the SSA, from the state to village level, will report to the new secretary (they currently report to the department) and continue managing daily activities. The inspecting officers from the department will hold the delivery wing accountable for violations.

To ensure similar accountability at all three levels (primary, secondary and higher education), the scheme which currently entails college education — Rashtriya Uchchatar Shiksha Abhiyan (RUSA) — can also be brought under the new body. The new body (of merged schemes) will ensure delivery of education (from primary to college), and the officers of the merged departments will ensure that the violators are held accountable. This reform would usher in much-needed efficiency and accountability, and eliminate conflicting interests and perverse incentives from the system.

Karnataka’s problem of low education quality isn’t unique but ubiquitous. As the right steps are being undertaken, a golden opportunity for systemic reform is being created. If Karnataka capitalizes on it, it can be the first state in the country to be hailed for its excellent education governance. The state can set a precedent of a robust education governance system for the other states to replicate.

Alston D’Souza and Ritika Shah are with the Centre for Civil Society (CCS). Comments are welcome at theirview@livemint.com.

* * *

**About Ritika Shah**

Ritika has a bachelors in economics (honors) from Delhi College of Arts and Commerce, Delhi University. Prior to joining CCS, she worked as a research analyst with Cians Analytics and Rocsearch, for over 2.5 years. She developed an inclination for the social sector during her college years, when she interned with various organizations including Teach for India, Becoming I and Centre for Equity Studies. She has a keen interest in reading, travelling and yoga. Her areas of focus include economics, philosophy and theology.

## Has India forgotten about the art of democratic debate?

Original: https://www.spontaneousorder.in/p/has-india-forgotten-about-the-art-of-democratic-debate

Author: Spontaneous Order

Published: 2018-08-06T10:08:43.000Z

Topics: political-debate, free-speech, media-bias, anti-defection-law

> Despite the increase in the number of news channels and the inflow of gallons of information due to social media and the internet, there has been a decline in the quality of political debates in the country. Perhaps the most ideal way of debating can be..

**Summary:**

India's political debates have deteriorated into mudslinging despite proliferating news channels and social media, diverging from Aristotle's ideal of reason-based arguments grounded in morality and ideology that persuade opponents and foster democratic innovation, growth, and rejection of extremism. Political parties, despite labels, converge ideologically on issues like economy and reservations—e.g., BJP affirming pro-reservation stance after RSS chief's review call—leading to contests over execution via insults like 'maut ka saudaagar' or labels like 'libtard' and 'bhakt.' Debates devolve into whataboutism (e.g., cow lynchings vs. 1984 riots) and ad hominem attacks, as on Arun Shourie. Parliament is unproductive: PRS Legislative study shows Lok Sabha spent 1% of time on legislation, Rajya Sabha 6% in 2018 budget session, worsened by 1985 Anti-Defection Law forcing MPs to echo party lines. Media sensationalizes trivia (e.g., CM's eating habits), spreads fake news (Republic TV on Jama Masjid), and chases corporate agendas per Cobrapost exposé of 25 outlets. Citizens contribute via intolerance under Sedition Act and Article 19 curbs, trolling, echo chambers, and preferring rhetoric over substance. With 2019 elections nearing, India must revive Aristotelian debate for substantive discourse.

**Key points:**

- Ideological convergence among parties reduces debates to mudslinging over policy execution rather than principles.
- Anti-Defection Law of 1985 compels MPs to align strictly with party whips, stifling independent parliamentary debate.
- Media outlets prioritize sensationalism and fake news over factual reporting, as exposed by Cobrapost involving 25 major organizations.
- Citizens' echo chambers, trolling, and whataboutism, fueled by speech curbs, undermine reasoned public discourse.

**By Spontaneous Order**

* * *

Despite the increase in the number of news channels and the inflow of gallons of information due to social media and the internet, there has been a decline in the quality of political debates in the country. Perhaps the most ideal way of debating can be explained by the ideas of the Greek philosopher, Aristotle, who said debates should entail arguments with strong moral groundings and ideological backing.

They are designed to highlight why pursuing certain objectives will lead to the most worthy outcomes and debaters attempt to persuade their opponents to see their line of reasoning by the force of reason. Needless to say, debates and deliberations are indispensable in a democracy. When a society allows a free flow of opinions, there is innovation and growth while ensuring all sections have a voice in this development. More importantly, it is only through such debate that we negate exclusivist and extremist policies and opinions. Unfortunately, in India today, a certain depravity marks debates among politicians, in the media and in the society at large.

Are debates today merely mudslinging contests?  
Majority of political parties nowadays have a similar stand when it comes to controversial issues and as a result of this, they are vying for similar constituencies as vote banks. In other words, while we might still label parties as centrist, rightist or leftist, ideologically there is not much difference in the decisions parties take on matters as diverse as the economy, foreign affairs, electoral laws and several others. Thus, for instance, after RSS Chief Mohan Bhagwat called for a review of the reservation policy in an interview, the Bharatiya Janata Party (BJP) unequivocally stated that it was pro-reservations since it didn’t want to be perceived as being “anti-Dalit”.

Hence in such a political scenario what deems to be the point of contention is who can perform better on similar policies, due to which, political debates inevitably get reduced to mudslinging contests where insults like ‘maut kasaudagar’ and ‘Rome Raj’ do rounds. In addition to this, generalisation such as ‘libtard‘, ‘sickular’ and ‘bhakt’ are relentlessly thrown around, shutting down the scope of debate and also muddying people’s understanding of such terms.

Due to the same, concerns about the current cow lynchings are shunned by asking the concerned individuals where they were when the [anti-Sikh riots transpired in 1984](https://economictimes.indiatimes.com/news/politics-and-nation/mha-reopens-1984-anti-sikh-riot-cases-against-kamal-nath/articleshow/71057848.cms). Denouncement of the ban on Wendy Doniger’s book is silenced by questioning the public on their stance when Salman Rushdie’s Satanic Verseswas taken off the shelves. While these may be legitimate concerns, decimating debates to merely such points devoids any value from discussions about issues currently plaguing our society.

Even when cogent issues are raised by experts, a common response is to engage in character assassination and cast aspersions on their motives, also known as Ad Hominem. The most recent example being of Arun Shourie, a right-wing intellectual, whose critique of Narendra Modi’s government was met with the jibe that he was just bitter about not having a post in the government.

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Image Source : Wikimedia Commons

In a similar manner, as we have often seen parliamentary debates often get reduced to dharnas and are glorified shouting matches with members of parliament hurling chairs at one another. According to a study conducted by PRS legislative, the Lok Sabha spent just 1% of its allotted time on legislative business while the Rajya Sabha spent 6% in the recently concluded budget session in April 2018, making it the least productive budget session since 2000.

Perhaps, another reason for a decline in the quality of debates in the Parliament is the Anti-Defection Law of 1985. According to this law, if any Member of Legislative Assembly (MLA) switches parties post elections, voluntarily gives up his party membership, or takes a stand contrary to the one issued by the party whip, he/she is liable to be disqualified. As a result of the same, party members tread cautiously when it comes to voicing their opinions in Parliament. They constantly check in to make sure their views are in sync with the party, making them mere mouthpieces in the administration.

News channels: another corrupt pillar  
Turn on any news channel and you will be quick to conclude that the Indian media today often focusses on frivolous issues, such CM Yogi Adityanath’s eating habits just to deflect attention from matters which actually hold significance.

Furthermore, another problem is the incessant focus on being the first to crack breaking news rather than checking in facts and investigations to ensure everything presented to the public is correct and in fact what happened. Many news channels often over sensationalise certain news just to spin propaganda besides producing fake news. For instance, Republic TV recently reported the fake news that Jama Masjid was in the dark due to non-payment of electricity bills of Rs 4 crores.

Sadly, a huge part of Indian media has transpired into corporate entities merely hunting for breaking news to get big money. This was further solidified by the recent Cobrapost expose, whereby, 25 leading media organisations, including the Times group, India Today, Zee Media, ABP News, Dainik Jagran, Network 18, Hindustan Times, OPEN Magazine and DNA, amongst others, complied with running pro-Hindutva advertisements.

Citizens as conspirators?  
While politicians and media personnel are to blame for a huge portion of the degradation of political debate in the country, we the citizens do not go scot free. With the Sedition Act and constitutional curbs on free speech, as stipulated under Article 19(1)(a), we see the rise of the intolerant Indian. This breed for citizens takes offence on anything that could make them feel mildly at unease and is responsible for the unwarranted controversies created over the movie Padmavat, tv show Quantico and the AIB roast.

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Image Source: The Independent

Due to the prominence of social media people often exploit the benefit of anonymity it grants and engage in trolling. Oftentimes when such individuals come across opinions they disagree with, they shower the author of those comments with abuses, mockery, rape threats (mainly for women) and even death threats.

Another problem which plagues the scope of developing of stimulating debate in our country is the desire to engage only with individuals who hold the same opinions. While being in such echo chambers can be psychologically gratifying, it can prove to be intellectually stunting. More importantly, we yearn for verbal duels, rhetoric and demagoguery in our political debates. Thus, we would rather have our Prime Minister Narendra Modi take on ‘Naamdaar’ Rahul Gandhi than listen to Manmohan Singh breaking down the nitty gritty of the Indian economy.

Unfortunately, this pandemonium will start yet again as the 2019 general elections loom over India unless we go back to understanding the virtues of debating as propounded by Aristotle and focus on what truly matters.

[Read more at.](https://spontaneousorder.in/ek-hi-thali-ke-chatte-batte-do-indian-voters-really-have-a-choice/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## The rise and rise of Uber

Original: https://www.spontaneousorder.in/p/the-rise-and-rise-of-uber

Author: Spontaneous Order

Published: 2018-08-06T09:56:27.000Z

Topics: ride-hailing, sharing-economy, market-regulation, india

> Launched in 2009, Uber soon outgrew its home in San Francisco, USA. Within a span of 9 years, Uber spread to over 600 cities all over the globe, becoming a rage due to its affordability and convenience. The ultimate proof of its ubiquity: ‘calling an ub

**Summary:**

Uber, launched in 2009, expanded to over 600 cities in 30 countries within nine years, revolutionizing ride-hailing with affordability and convenience, despite regulatory bans in Hungary, Bulgaria, Denmark, and a temporary one in London. Its disruptive model classifies it as an internet company with freelance driver contractors, minimizing capital costs by not owning cars or employing drivers, yet it has burned over $10.7 billion in investor money prioritizing growth over profitability, akin to Amazon's strategy. Under new CEO Dara Khosrowshahi, Q1 2018 saw losses narrow 49% and revenue rise 55%. In India, Uber's largest non-US market, the peer-to-peer sharing model deviates as drivers buy new cars on loans for full-time work, requiring commercial licenses under the Motor Vehicles Act 1988 costing Rs. 4,000-24,000 amid low four-wheeler ownership (30 million out of 210 million vehicles in 2015). Cutting driver incentives has sparked nationwide agitations, as earnings fall short of promised Rs. 1-1.5 lakh monthly, burdening debt-laden drivers. Uber counters with India-specific innovations like Uber Lite and cash payments while investing in self-driving tech and UberEats. To sustain its two-sided market, it should emulate Lyft's income guarantees and rewards to retain drivers and compete with Ola, ensuring long-term dominance.

**Key points:**

- Uber expanded to 600 cities in 9 years despite $10.7 billion losses, prioritizing growth like Amazon.
- In India, drivers buy cars on loans for full-time Uber work, requiring commercial licenses costing Rs. 4,000-24,000.
- Reducing driver incentives has triggered protests amid unmet earnings promises of Rs. 1-1.5 lakh monthly.
- Uber should adopt Lyft-style weekly income guarantees and rewards to balance driver-rider pressures.
- India-specific features like Uber Lite and cash payments aim to unlock market potential.

**By Sunaina Mathur**

* * *

Launched in 2009, Uber soon outgrew its home in San Francisco, USA. Within a span of 9 years, Uber spread to over 600 cities all over the globe, becoming a rage due to its affordability and convenience. The ultimate proof of its ubiquity: ‘calling an uber’ is the new ‘hailing a cab’. Despite its burgeoning popularity and consumer base, it can’t seem to catch a break with regulations, triggering strong responses from governments across the world.

Countries like Hungary, Bulgaria and Denmark have imposed a full ban on Uber, while London had imposed a temporary ban which was lifted recently. This backlash arises out of its disruptive business model which is way ahead of existing vehicular regulations in any part of the world. For instance, it claims to be an internet company and not a transport provider and considers its drivers as freelance contractors and not employees. Due to this model though, it’s own capital costs on the surface are minimal since it doesn’t own the cars that operate on its platform, neither does it employ the people who drive those cars. Yet Uber is bleeding billions of dollars. Uber, being a private company, is not obliged to disclose its financial results, hence it is difficult to estimate its losses. But if reports are to be believed, it has burned over $10.7 billion of investors’ money in 9 years. How then has Uber managed to become one of the biggest venture-backed technology companies in the world today? The answer lies in its size and growth.

In less than a decade Uber has spread to over 30 countries and it shows no signs of stopping. Under the leadership of its new CEO, Dara Khosrowshahi, Uber’s position is improving as the tech giant narrowed its losses by 49% and increased its revenue by 55% in the first financial quarter of 2018. But these shrinking margins come at what cost?

Uber, which is a two-sided market for its drivers and riders, is facing pressure from both ends of the spectrum. Earlier, Uber provided great incentives to its drivers while also heavily subsidising rides for its users thanks to its generous investors. Uber was prepared, and very willing, to bear such losses to ensure mushrooming of its services globally. But lately, in an attempt to curb losses, Uber has cut back immensely on the incentives provided to its drivers and also increased its percentage share on all rides from the driver’s share of the money. It has faced tremendous backlash from the drivers for the same, especially in India.

Why are Uber’s problems in India unique?

Uber was conceptualized on a peer-to-peer(P2P) sharing economy model wherein individuals can borrow or rent assets owned by someone else, while asset owners can monetize their underutilized assets. Thus, Uber drivers were envisioned to work part-time, driving their private cars.

Uber in India functions differently than Uber abroad as many drivers buy new cars on loans to join Uber as full-time service providers. Moreover, in India, private vehicles can not operate on Uber’s online platform unless they secure a commercial license, costing anywhere between Rs. 4,000 to Rs. 24,000, governed by the [Motor Vehicles Act 1988](https://indiacode.nic.in/handle/123456789/1798?sam_handle=123456789/1362) at the centre in addition to state specific requirements and permissions. Since many of drivers buy cars on loan or lease cars with the goal of operating it on the Uber platform, the concept of sharing economy gets blurred in the Indian market as car-ownership patterns are very different in India, where vehicle population as of 2015 was only 210 million, out of which only about 30 million owned 4-wheelers. This makes Uber in India a capital-intensive affair, since a major chunk of a driver’s monthly earnings go into installments on their loaned or leased cars.

Keeping this in mind, reducing incentives and payments for drivers puts tremendous burden on these drivers since most of them bought new cars in order to drive with Uber, with an assurance of making anywhere between Rs. 1 lac to 1.5 lac per month. This has resulted in agitations by Uber drivers all over the country who are burdened with debt. For these drivers quitting Uber is not as simple as merely logging out of the app. From the other end of its two-sided market, Uber faces pressure of keeping the prices of its services competitive to stay at par with its competitors like Ola in India and Lyft in USA.

Despite heavy losses, Uber is unwilling to compromise on its investments in India, which is one of its largest markets outside of the USA, and feels that there is still tremendous potential to be unlocked in the country. To counter some of these concerns and tap into the untapped market Uber has introduced additional features, many of which are uniquely designed for India, such as the new Uber Lite app or the Cash payment feature, which was eventually extended to other countries.

Uber aims for long-term expansion to establish dominance in the ride-hailing industry globally, following an expansion model like the one Amazon followed in the retail business. During Amazon’s nascent phases the company shouldered heavy losses and hit profitability only after a company’s Initial Public Offering(IPO), that is, its stock market launch. Even today, a very small margin of Amazons profits come from its retail unit, and a major chunk of it comes from its cloud computing business, Amazon Web Services(AWS). On similar lines, Uber has been investing in many parallel industries like self-driving cars and UberEats in order to expand its reach and revenue.

What can Uber change in its existing operations?

Being a market for both drivers and riders, Uber needs to pay heed to its ‘driver partners’.A dearth of drivers may increase costs for riders, who may switch to a competing ride-hailing service. Taking a cue from its rival in US, Lyft, Uber too can work towards building stronger relations with its drivers.

Lyft offers a weekly and hourly income guarantee to its drivers in some cities as long as they satisfy necessary requirements. Lyft’s Accelerate rewards programme gives added rewards to its drivers based on the number of rides completed in a month, providing cell phone discounts at the program’s Silver level, and offering free roadside assistance at the Platinum level.

Whether Uber can pull an Amazon or not, only time will tell, but Uber most definitely is a force to be reckoned with. Uber has a unique model, and a risky one at that, way ahead of existing global regulations. Yet it seems to have its priorities in place in terms of giving growth and expansion more weightage than profitability; it is this careful balancing act which will determine its future.

[Read more at.](https://spontaneousorder.in/farmers-middlemen-and-the-way-out/)

* * *

**About Sunaina Mathur**

Sunaina holds a Bachelor of Arts in Economics from Fergusson College, Pune. She has previously interned with the National Human Rights Commission(NHRC), the Government of Andhra Pradesh and has represented India at the UN for the Merit360 programme. Her love for languages and poetry drove her to learn French and Russian Languages, and she hopes to read her favourite book ‘War and Peace’ in Russian someday.

## Where’s education in India headed?

Original: https://www.spontaneousorder.in/p/wheres-education-in-india-headed

Author: Spontaneous Order

Published: 2018-08-06T09:52:28.000Z

Topics: indian-education, edtech, personalized-learning, education-franchising

> Research shows that the Indian education sector, in terms of revenue, stood at $97.8 billion in 2016. FDI in education sector in India: $1.4 billion (April 2000-Dec 2016). India has one of the world’s largest higher education systems with enrollments of

**Summary:**

The Indian education sector, valued at $97.8 billion in revenue in 2016 with $1.4 billion in FDI from April 2000 to December 2016, hosts one of the world's largest higher education systems, enrolling 33.3 million students across over 50,000 institutes and 750 universities. Amid a massive school-going population aged 6-17—the world's largest—the market is projected to nearly double to $180 billion by 2020, driven by digital learning expansion despite challenges like poor infrastructure and teacher shortages. Traditional teaching methods are obsolete; educators must adopt emerging trends to capitalize on this opportunity from a classical-liberal perspective emphasizing innovation and private initiative. Key shifts include personalized learning to match individual interests and styles, integrated curricula blending subjects (e.g., maths and business via Charlie and the Chocolate Factory), interactive two-way teaching to foster positive idea-building, and tech advancements like virtual reality for immersive history or chemistry experiences, gamification to replace rote learning and boost engagement, remote proctored assessments for global access, and franchising by private players to scale quality education nationwide and beyond. These market-friendly approaches promise to enhance literacy and talent development.

**Key points:**

- Indian education market stood at $97.8 billion in 2016 and is expected to reach $180 billion by 2020 amid the world's largest 6-17 age group population.
- Schools must shift to personalized learning tailored to each child's unique interests and styles.
- Integrate subjects and make education interactive to improve retention and reduce stress.
- Adopt technologies like VR, gamification, and remote assessments to modernize teaching.
- Franchise quality education models through private players to expand access and literacy.

**By Spontaneous Order**

* * *

Research shows that the Indian education sector, in terms of revenue, stood at $97.8 billion in 2016. FDI in education sector in India: $1.4 billion (April 2000-Dec 2016). India has one of the world’s largest higher education systems with enrollments of 33.3 million students in colleges, institutions, across 50,000+ higher education institutes and 750+ universities.

The School-going population in India provides a huge opportunity.  
An increasing number of students are enrolling into schools today to get a formal education; this number is only going to grow exponentially over the years \[refer infographic\].

The Indian education market is expected to almost double to $180 billion by 2020, buoyed by the rapid expansion of the digital learning market and the world’s largest population in the age bracket of 6 to 17 years in spite of this section being plagued by poor infrastructure and a shortage of trained teachers.

With this data we can establish that there is huge opportunity in the education, however we have to be mindful that traditional methods of teaching will no longer work. As educators we need to keep track of the emerging trends and technological advancements in the education sector, here are some of the major trends to watch out for.

Personalised learning is key.  
Each child is unique and they have different interests and learning styles and focusing on them will help hone their talent and make them strong individuals. Hence schools should start shifting their focus towards personalising education for each child.

Integrated learning helps paint the big picture.  
Subjects cannot be taught in isolation any more. Schools need to move the focus to integrating subjects. For E.g. While teaching Charlie and the Chocolate Factory in English language children can be taught maths, business etc. Teachers need to get innovative with their teaching methods.

Education should be a two-way street: make it interactive  
Teaching young brains is an art, children retain more when learning is fun and stress free. A crucial element in learning is that children should not be told that their way of thinking is wrong, instead encourage them to build on insights in a positive way.

New tech advancements will shape education in the coming years  
Virtual Reality immerses the user in a virtual or imaginary environment. Immersive educational environments are already being used to provide learners with a life-like experience in subjects as diverse as history and chemistry. Thus enhancing the virtual learning experience, right from learning Shakespeare or the French revolution in what our classrooms need.

Playing games can be educative  
Gamification in Learning is another technological advancement to look out for. Children learn various concepts with the help of games. Instead of traditional rote learning, using video games and incorporating other game elements in education can motivate students to understand better and do well in their exams. As opposed to the traditional classroom learning set up, gamification cuts down boredom and increases their attention span.

Remote proctored assessments are coming.  
With the advancements in technology, today remote classrooms and assessments is another space to explore. Students can sit in India and attend a class in a university or school in United States.

Franchising in the education sector can help ensure quality.  
Quality education is the need of the hour. We need to take schools far and wide in the country or across borders to increase our literacy levels and Franchising is one alternative to achieve that. Private players are now stepping into this space to multiply opportunities for growth.

Lina Ashar is the founder of Kangaroo Kids Education Ltd.

Read more on education: [https://spontaneousorder.in/multipronged-approach-to-education/](https://spontaneousorder.in/multipronged-approach-to-education/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Musings: Piyush vs Piyush -‘Beautiful Policies are Not Enough’

Original: https://www.spontaneousorder.in/p/musings-piyush-vs-piyush-beautiful-policies-are-not-enough

Author: Spontaneous Order

Published: 2018-08-06T09:48:37.000Z

Topics: infrastructure-finance, policy-implementation, private-investment, rule-of-law

> Policy stability is more than just drafting ‘beautiful’ policies; if there are hurdles to implement them, it is not easy to do business. These are the words of the President of the Asian Infrastructure Investment Bank (AIIB), Jin Liquin, as he played

**Summary:**

In a frank debate at the AIIB AGM in Mumbai, India's Finance Minister Piyush Goyal defended the country's infrastructure financing environment, citing regulatory improvements that have transformed lives, process integrity with no subsequent license cancellations, enhanced monitoring and accountability, rule of law supported by media and public scrutiny, zero defaults in international infrastructure financing, and strategies like community involvement to ease land acquisition. DBS Bank CEO Piyush Gupta countered that funding remains elusive due to pre-operation risks like land acquisition, policy uncertainty from regime changes (e.g., Malaysia), insufficient long-term debt markets, banks' capital constraints for long-tenor loans, and high project risks despite no sovereign risk, urging government anchoring of key projects. AIIB President Jin Liquin noted money flows to paths of least resistance, so governments must tackle practical developer and financier hurdles beyond policies. The author, emphasizing India's open society that enables such debates, argues beautiful policies alone insufficient; central initiatives in power, roads, and railways have drawn investment, but state-level operational challenges and implementation gaps negate gains, requiring resolution of day-to-day hassles for robust private sector participation.

**Key points:**

- India has never defaulted on international infrastructure financing.
- Beautiful policies must address day-to-day implementation hurdles like land acquisition and state-level operations to boost private investment.
- Government anchoring of key infrastructure projects could mitigate high project risks deterring financiers.
- Central policies have spurred investment interest in power, roads, and railways, but state challenges undermine them.

**By Luis Miranda**

* * *

Policy stability is more than just drafting ‘beautiful’ policies; if there are hurdles to implement them, it is not easy to do business. These are the words of the President of the Asian Infrastructure Investment Bank (AIIB), Jin Liquin, as he played referee at the battle of the two Piyush’s recently at the AIIB AGM in Mumbai. They were on a panel to discuss mobilising finance for infrastructure in Asia. Most panels are boring because everyone is polite and agrees with the other panellists. This one was different because two panellists had very different views — Piyush Goyal, India’s Finance Minister, and Piyush Gupta, CEO of DBS Bank Singapore. The fact that we could have such a frank exchange of views is a tribute to the open society that we have in India. So, here are the highlights of the Piyush vs Piyush debate.

Piyush Goyal kicked off with a very lucid summary of the regulatory environment in India. He talked about how infrastructure improvements have transformed lives in India. And how the integrity of processes and individuals are attracting funding to infrastructure. He quoted examples — licenses cannot be subsequently cancelled and he talked about the change in mindset with more focus on monitoring and accountability. If projects are designed properly there will be enough finance. India has rule of law and frameworks like the media and public response. India has never had a default in international infrastructure financing. Politics will continue to play a role in any democracy, and that should be factored in when looking at the large opportunity in the country. He also talked about how land acquisition challenges are being reduced by involving communities in the upside of infra projects.

Piyush Gupta, the CEO of DBS Bank of Singapore, countered by saying that money is not that easy to come by for projects in India. There is an urgent need for long term debt markets. Pre-operation risks like land acquisition have deterred investors and regime changes across the region have led to policy uncertainty (as is being currently seen in Malaysia). Banks need more capital for longer tenor loans and higher perceived political risks. He concluded that in India there is indeed no sovereign risk, but there is significant project risk. If the government anchored key infra projects, the risk could be significantly reduced.

Jin Liquin moved in to say that money is like water — it follows the path of least resistance. Therefore, governments should not just focus on policies. They should also help reduce the practical difficulties faced by infra developers and financiers in their daily work.

And therein lies a lesson for policy makers — drafting good policies is not enough. Day-to-day hassles faced by infra developers have also to be also addressed to see significant increase in private sector participation in infrastructure. The key central ministries in India — power, roads and railways — have seen huge investment interest thanks to the policies of the central government. But operational challenges at the State level and challenges with the implementation of these policies can negate the benefits of ‘beautiful’ policies.

* * *

**About Luis Miranda**

Luis Miranda connects dots. He started investing in India’s infrastructure a long, long time ago. He started IDFC Private Equity and was earlier a part of the start-up team of HDFC Bank. Luis has invested in and has been on the boards of companies like GMR Infrastructure, L&T Infrastructure, Delhi International Airport, Gujarat Pipavav Port, Gujarat State Petronet, and Manipal Global Education. Luis today spends most of his time, together with his wife, on non-profits. He is Chairman of CORO and Centre for Civil Society and Managing Trustee for Nadathur Trust. Other organisations include 17000 Ft Foundation, SNEHA, Muktangan, Sunbird Trust and Samhita Social Ventures. Luis graduated with an MBA from Chicago Booth and is a Chartered Accountant.

## Public Credit Registry: Is Transparency Enough for Credit Ailments?

Original: https://www.spontaneousorder.in/p/public-credit-registry-is-transparency-enough-for-credit-ailments

Author: Spontaneous Order

Published: 2018-08-06T09:45:33.000Z

Topics: public-credit-registry, banking-transparency, npas, loan-securitization

> Reserve Bank of India has decided to establish a Public Credit Registry to bring about more transparency in the financial markets. The decision has been taken on the recommendation of YM Deosthalee Committee which was focused on tackling poor credit ass..

**Summary:**

The Reserve Bank of India's Public Credit Registry (PCR), recommended by the YM Deosthalee Committee, mandates financial institutions to report comprehensive credit performance and liabilities of individual and corporate borrowers, making it publicly accessible to all stakeholders—unlike limited Credit Bureaus under the 2005 CIC Act or CRILC for loans over INR 50 million, which shares data only among reporting banks. From a classical-liberal viewpoint, PCR addresses banking ailments like rising Non-Performing Assets (NPAs), Twin Balance Sheet problems, and sluggish recovery by combating information asymmetry and 'pecuniary externalities' (per Dr. Viral Acharya), enabling objective credit decisions, a level playing field for borrowers, and credit discipline that favors good borrowers while penalizing defaulters. However, transparency alone cannot resolve these issues; PCR must pair with robust secondary credit markets for securitizing bad loans into priced assets for Qualified Institutional Buyers, as successfully implemented by Sweden's government-owned asset reconstruction companies. Strict regulations on banks' loan holdings, standardized mark-to-market valuation, risk diversification, independent accountable credit rating agencies, and Big Data risk assessment (as suggested by India's MeitY) are essential to replace moral hazard and information monopolies with market-driven transparency and liquidity, mirroring high-coverage successes in Portugal and Belgium.

**Key points:**

- PCR mandates public reporting of all borrowers' credit histories by lenders and borrowers, differing from opaque Credit Bureaus and restricted CRILC.
- PCR reduces NPAs and information asymmetry by enabling confident, personalized credit decisions and a level playing field for borrowers.
- PCR is insufficient without secondary markets for loan securitization, as in Sweden, to address liquidity and Twin Balance Sheet problems.
- Develop independent credit rating agencies and Big Data tools using PCR data to ensure accurate loan valuations and curb moral hazard.

**By Karan Tripathi**

* * *

Reserve Bank of India has decided to establish a Public Credit Registry to bring about more transparency in the financial markets. The decision has been taken on the recommendation of YM Deosthalee Committee which was focused on tackling poor credit assessments by the banks. In this background, it becomes important to understand as to why we need such a body in the first place and what purpose is it intended to serve. Moreover, would establishing such a body be enough to efficiently address the issue of rising Balance Sheet problems of the banks?

Public Credit Registry (PCR) would be a central record-keeping body which would make it mandatory for financial institutions to maintain the record of credit performance and other external liabilities of all its individual as well as corporate borrowers. It also mandates reporting on loans by both the lender and the borrower and the entire registry will be open for inspection to all the stakeholders — borrowers, banks, investors, etc. This body differs from the Credit Bureaus that are regulated by RBI under the Credit Information Companies (Regulation) Act, 2005, as Credit Bureaus only capture limited information about the borrower and are not adequately transparent. Similarly, PCR also differs from Central Repository of Information on Large Credits (CRILC) which was created by RBI in 2014 for enabling Scheduled Commercial Banks to report borrower information for loans exceeding INR 50 million. Unlike PCR, CRILC information is shared only with the reporting banks and not with the diverse set of stakeholders and the same is also not available for public inspection.

Therefore, PRC is a step forward for harnessing greater transparency in the banking system. However, why is transparency so important in the banking sector? The answer lies with the practice which is followed by banks in disbursing and securitizing loans and the perils in which they find themselves today. Rising number of Non-Performing Assets, Twin Balance Sheet Problems, and sluggish recovery and securitization mechanism, all reflect upon the shortsightedness and information asymmetry plaguing the credit activities. Due to the lack of reliable and adequate information, subjectivities prevail in the credit negotiations that lead to both the borrower and the lender relying on information that is limited to their transactions. According to Dr. Viral Acharya, lack of credit registry makes the market opaque, which leads to ‘pecuniary externality’ wherein outcomes of one loan contract spillover to the terms of other loan contracts and the good borrowers get affected by the monopoly of information held by the lender.

The central repository such as PCR would help addressing the credit ailments in multiple ways. First, and the most important, it would provide an objective data to banks to take their credit decisions more confidently and in an enhanced strategically informed manner. Banks will be asked to update the entire credit history and allied business performance of the borrowers on the PCR database. This would help in reducing the credit risk and the risk of new loans turning into NPAs.

Second, it would create a level playing field in the financial markets. Borrowers can now approach lenders with a reliable credit information and reputation and would no longer be the victims of information monopoly resulting from market opacity. Such level playing field will make it near impossible for banks to discriminate between different sizes of borrowers.

Third, it will work towards credit discipline and credit rationality. Banks can personalise credit decisions and negotiations to favour the good borrowers and be strict towards defaulters. Instead of generalised industry information, specific information on collateral valuation of the borrower will help banks in rationalising the credit and security decisions.

Despite PCR being a move in the right direction, it is not enough for curing the complex ailments plaguing the credit scenario today. It’s not enough for banks to rationalise credit decisions to solve the Twin Balance Sheet problems that are looming large. Therefore, measures such as credit transparency shall be assisted with a development of robust secondary credit markets where these bad loans can be converted into priced assets for further investment by Qualified Institutional Buyers. In Sweden, such securitisation process is conducted by government owned asset reconstruction companies and the results have been quite positive.

Development of secondary markets solves the liquidity issue of the banks and helps them in sharing the burden of rising NPAs. Taponeel Mukherjee argues that the strict regulations on how much of an originated loan a bank can hold on its balance sheet will help in raising the credit standards. If we will create a secondary market for investing in bank loans in a standardised format, it will help in risk diversification and induction of greater liquidity. Bank loans can be classified and priced according to mark-to-market valuation and then be put to secondary market for investment in such assets.

The development of Public Credit Registry should happen along with the development of efficient secondary market for loan securitisation. Countries like Portugal and Belgium have near complete adult coverage of public credit registry which has led to substantial growth in public lending. In India, Ministry of Electronics and Information Technology has also voiced for using Big Data to conduct risk assessment. All these measures link accuracy and availability of data with efficient credit practices.

Such connection has to be propelled by independent, transparent, and accountable credit rating agencies that use the data in central repository to give a holistic and most accurate qualitative valuation to the loan assets. The practices of ‘moral hazard’ (giving credit on standards lower than the ideal) and ‘information monopoly’ have to be replaced by transparency, data availability, and information sharing.

* * *

**About Karan Tripathi**

Karan Tripathi is an undergraduate student at Symbiosis Law School, Pune and takes up additional courses at Symbiosis School for Liberal Arts. He holds diplomas in European Union Legal Studies and IPR-Competition Laws and certification in International Environment Law and Policy. Apart from law, Karan is a devoted patron of jazz, ancient languages, cinema, and dreams to act alongside Isabelle Huppert one day.

## General Data Protection Regulation (GDPR) Explained

Original: https://www.spontaneousorder.in/p/general-data-protection-regulation-gdpr-explained

Author: Spontaneous Order

Published: 2018-08-06T09:40:06.000Z

Topics: gdpr, data-privacy, personal-data-rights, privacy-regulation

> In the midst of a global uproar against injudicious use of personal data by businesses and public organizations, the European Parliament adopted the General Data Protection Regulation(GDPR) in April 2016, which was enforced on 25 May 2018 after a 2 year..

**Summary:**

The General Data Protection Regulation (GDPR), adopted by the European Parliament in April 2016 and enforced from May 25, 2018, replaces the 1995 Data Protection Directive and applies to any enterprise processing data of EU citizens, regardless of location. Motivated by scandals like Cambridge Analytica's unauthorized harvesting of 87 million Facebook users' data to influence the 2016 US elections and the projected growth of the digital universe to 44 zettabytes by 2020, GDPR emphasizes individual consent and control over personal data to prevent abuse. Key provisions include clear, jargon-free consent that's easy to withdraw; 72-hour breach notifications; rights to access, portability, and erasure ('right to be forgotten'); privacy by design with high default privacy settings and minimal data collection; and mandatory data protection officers for large-scale processors. Non-compliance risks fines up to €20 million or 4% of global annual turnover, enforced by national Supervisory Authorities coordinated by a European board. While compliance costs average $550,000—burdening startups more than giants like Google—GDPR affects global businesses given the EU's 24% share of world GDP. From a classical-liberal viewpoint valuing individual rights, it sets a vital precedent ensuring people control their data amid Big Data's revolutionary potential, designing processing to serve mankind rather than unchecked corporate profiteering.

**Key points:**

- GDPR requires enterprises to obtain clear, revocable consent for processing EU citizens' personal data and implement rights like access, portability, and erasure.
- Data breaches must be notified to authorities and affected individuals within 72 hours, with privacy embedded by design and default high-privacy settings.
- Non-compliant firms face fines up to €20 million or 4% of global annual turnover, whichever is higher.
- Compliance costs around $550,000 disproportionately challenge smaller businesses despite the EU's 24% global GDP share.

**By Sunaina Mathur**

* * *

In the midst of a global uproar against injudicious use of personal data by businesses and public organizations, the European Parliament adopted the General Data Protection Regulation(GDPR) in April 2016, which was enforced on 25 May 2018 after a 2 year transition period, post which non-complying institutions can face heavy fines. Any enterprise, operating in or out of Europe, which possesses or processes data of EU citizens is obligated to abide by GDPR norms, which have replaced the Data Protection Directive 95/46/EC. GDPR lays down guidelines to be followed by institutions supplying good or services to EU citizens, in order to restrict the possession and use of an individual’s personal data, by necessitating consent.

**Why?**

Various enterprises all over the globe possess sensitive user data that can be abused and stolen for immoral and illegal endeavours without user consent or knowledge, putting information and identity of individuals at risk. Many companies obtain personal information in order to study customer behaviour without the knowledge of the individual whose data is being shared and studied. Sensitivity of the data protection issue became amply clear in the [Facebook-Cambridge Analytica controversy](https://www.theguardian.com/technology/2019/mar/17/the-cambridge-analytica-scandal-changed-the-world-but-it-didnt-change-facebook), as Cambridge Analytica harvested data of an estimated 87 million people without their consent and used this data to influence the USA Presidential elections.

GDRP is an initiative to ensure privacy of internet users in the EU, and to ensure consent, by clearly specifying how customer data can be used and protected by enterprises. With the digital universe expanding at a rate of 40% per year, data created and copied will reach 44 zettabytes (44 trillion gigabytes) by 2020. GDPR is a calculated move to prepare for this rapid data expansion.

**What does** GDRP **contain?**

The major requirements of GDPR are below:

Consent: While engaging users, enterprises are required to use easily understandable terms and conditions devoid of legal jargon or legalese. Additionally, it must be as easy to withdraw consent as it is to grant it.  
Breach Notification– Should the data subjects, individuals whose data is being held, collected or processed, become victims of a data breach, the company should notify the controllers and customers within 72 hours.  
Right to Access– Data subjects have the right to obtain/ access data on them by demanding a portable copy of their personal data held by data controllers.  
Right to be Forgotten– When a data subjects personal data has fulfilled its original purpose, the subjects can demand the controllers to erase their personal data from their records and cease its dissemination.  
Data Portability– This enables individuals to obtain and transfer their personal data to another data controller. As part of this, controllers are required to maintain the data in an interoperable, machine-readable format so as to enable machine portability.  
Privacy by design– Any institution in possession of personal data has to ensure data protection from the very beginning, starting from the designing of the system to taking necessary technical and infrastructural measures. Default settings of institution should be high on privacy. Additionally, only data relevant to the enterprise should be collected and processed by the them.  
Data Protection Officers– Professionally qualified officers must be appointed in institutions, both public and private, that engage in large-scale(>250 employees) systematic monitoring or processing of personal data.

**What are the consequences of non-compliance?**

GDPR is one of the strictest set of regulations in place to safeguard personal data with a single set of laws applying to all EU member states, each of which is required to establish an independent Supervisory Authority(SA) to investigate complaints. A European Data Protection Board will coordinate all the SAs throughout the union. Punishments for non-compliance can go from a warning in writing(for unintentional non-compliance) to €20 Million or 4% of the company’s annual worldwide turnover, whichever is higher.

**What does this mean for businesses?**

Businesses globally will be affected by GDPR, even though it is only applicable in to EU citizens, since EU contributes 24% of the world’s GDP which makes it an indispensable and crucial part of businesses worldwide. The very implementation of GDPR, poses many challenges as the costs of compliance, that is the infrastructural and technical changes required under GDPR to ensure data protection, are humongous to the tune of 550,000 US$. Additionally, such cost implications would prove to be a disadvantage for startups and smaller firms since the costs may hamper compliance, while the bigger firms like Facebook and Google, which possess more personal data, would find it easier to comply. Barriers put in place on the commercial use of personal data further restricts profiteering opportunities.

The growth of data is indomitable, which is why the need for privacy and security is unavoidable. GDPR, despite its compliance issues and difficulties, sets a good precedent for the world which is increasingly becoming more vulnerable to data threats. It is the right of every individual to be in-charge of their data and to prevent its dissemination and use by ghost enterprises to ensure privacy. Big Data can revolutionise the world, which is why it is necessary to ensure that “the processing of personal data should be designed to serve mankind.”

[Read more.](https://spontaneousorder.in/brexit-good/)

* * *

**About Sunaina Mathur**

Sunaina holds a Bachelor of Arts in Economics from Fergusson College, Pune. She has previously interned with the National Human Rights Commission(NHRC), the Government of Andhra Pradesh and has represented India at the UN for the Merit360 programme. Her love for languages and poetry drove her to learn French and Russian Languages, and she hopes to read her favourite book ‘War and Peace’ in Russian someday.

## The case against Maternity Benefit Act 2017

Original: https://www.spontaneousorder.in/p/the-case-against-maternity-benefit-act-2017

Author: Spontaneous Order

Published: 2018-08-06T09:37:11.000Z

Topics: maternity-leave, labor-regulation, women-employment, unintended-consequences

> The Maternity Benefit (Amendment) Act that came into effect in April last year, had been hailed as “a step forward” when it had been tabled before the Parliament, and had been praised for “making India proud around the world” and “bringing women

**Summary:**

The Maternity Benefit (Amendment) Act 2017, extending paid maternity leave to 26 weeks and mandating crèche facilities for firms with 50+ employees, has backfired by deterring SMEs and startups from hiring women, as revealed by two surveys. TeamLease's poll of 350 firms found 26% prefer male hires, 40% factor in costs (totaling 66% impacted), 35% see negative effects on costs/profitability, and only 22% unaffected. LocalCircles' survey of 2987 respondents showed 11% hired only males and 43% mostly males post-Act, fostering anti-female bias. From a classical-liberal viewpoint, this exemplifies Frédéric Bastiat's 'unseen effects': mandates ignore business incentives, imposing uniform costs that rob firms and women of choice in maternity policies. Without the law, markets would evolve optimal policies via competition for talent. Alternatives include state-funded leave (58% of countries per 2014 ILO report), mixed employer-state models (16%), partial salary payments (e.g., Canada's 55% for 15 weeks), tax incentives, or exemptions for small firms—trends showing employer-only liability (25% globally) declining. India's policy exacerbates the 50% gender workforce gap amid other barriers.

**Key points:**

- TeamLease survey: 66% of 350 SMEs/startups admit maternity leave costs bias hiring against women, with 35% reporting negative profitability impact.
- LocalCircles survey: 54% of 2987 SMEs/startups hired mostly or only males since the Act's implementation.
- Mandates like 26 weeks paid leave create unintended consequences by overriding market-driven maternity policies that balance costs and worker preferences.
- ILO data shows 74% of countries fund maternity leave via social security or mixed models, not pure employer liability as in India.
- Policy alternatives: Public funding, partial wage replacement, tax incentives, or small-firm exemptions to boost female hiring without mandates.

**By Vineet Bhalla**

* * *

The Maternity Benefit (Amendment) Act that came into effect in April last year, had been hailed as “a step forward” when it had been tabled before the Parliament, and had been praised for “making India proud around the world” and “bringing women in workforce closer to workplace equality”. This is because the Act, among other things, extended the paid maternity leave available to female workers from the then-existing 12 weeks to 26 weeks, as well as made it mandatory for every establishment with at least 50 employees to provide a crèche facility for working mothers among its employees.

While these provisions seem progressive and female-friendly, two recent independent surveys conducted on their impact on SMEs and start-ups that were published last month bring to light how the Act harms the prospects of female workers rather than help them.

In this essay, we will explore the implications of the policy for female workers.

What the polls say

According to a survey conducted with 350 start-ups and SMEs by an employment services company­ — TeamLease Services — 26% of all respondents expressly admitted to prefer hiring male candidates as employees, while approximately 40% of the rest of the respondents claimed that they will consider the additional cost of the paid maternity leave while hiring female employees. This means that 66%, that is, two-thirds of all respondents disclose that the maternity benefit law adversely impacts their hiring against female candidates in some way. Only 22% of the respondents declared that the new maternity leave provisions won’t impact their hiring decisions at all. Additionally, a whopping 35% of all respondents also revealed that they see the impact of the Act as negative on both costs and profitability.

[

![](https://substackcdn.com/image/fetch/$s_!440S!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fd2401a6a-09ef-4417-8fe2-6b39c84cb1df_300x265.jpeg)



](https://substackcdn.com/image/fetch/$s_!440S!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fd2401a6a-09ef-4417-8fe2-6b39c84cb1df_300x265.jpeg)

TeamLease Services Survey Results \[Source: Economic Times\]

  
The survey by citizen engagement platform LocalCircles gives similar results. From among the 2987 respondents belonging to the SME and start-up sector, 11% admitted to having hired only male employees over the last one year since the Act came into place, and a further 43% admitted to having hired mostly male and a few female employees in the same period. This means that a clear anti-female bias crept into the actual hiring practice of well over half of all respondents ever since the Act came into place.

[

![](https://substackcdn.com/image/fetch/$s_!UEXC!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5c709624-d6ef-4598-8b6a-09e32f584f87_300x240.jpeg)



](https://substackcdn.com/image/fetch/$s_!UEXC!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5c709624-d6ef-4598-8b6a-09e32f584f87_300x240.jpeg)

Local Circles Survey Result \[Source: Local Circles\]

How ironic, that an Act which was meant to benefit female workers has ended up reducing their likelihood of being employed in the first place!

**Why the Act is detrimental to the cause of women?**

The Act, as well-intentioned as it may be, is a classic case of the law of unintended consequences. Ill-thought out government regulation often imposes perverse and unforeseen consequences that far outshoot any potential benefits. This was perhaps first (and best) explained by the liberal French economist Frédéric Bastiat in his essay What is Seen and What is Not Seen thus:

There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

By increasing the period of paid maternity leave for female workers and squarely putting the entire burden of financing the paid leave on private businesses, the Parliament failed to take into account that businesses will shirk from hiring female workers because of the associated costs. By merely proclaiming an order for private businesses and expecting them to meekly follow suit as per their wishes, the Parliamentarians failed to account for effects that must be foreseen and betrayed themselves as bad economists.

**Are businesses anti-women?**

It would be an easy, albeit lazy conclusion to make, from these survey results that SMEs and start-ups do not care about married female employees and their well-being. What they, and any private business, for that matter, would care about, is their revenue, costs and profits. There might be a number of businesses that care enough about their female employees who are also mothers to choose to provide them paid maternity leave for 26 weeks (or even longer). The operative word here, though, is ‘choose’. Such businesses would not need a law to mandate them to do something that they would have done of their own accord anyway. As for businesses that could have chosen to provide paid maternity leave for, say, 10 weeks, or 15 weeks, or 20 weeks, or any period lower than 26 weeks, or even no paid maternity leave at all, they would choose not to hire married women at all because of their inability/unwillingness to provide paid maternity leave for the period of 26 weeks, due to which married female workers would be denied the choice to work at these places.

What would happen in the absence of a paid maternity leave law? Female workers that view the period of paid maternity leave as an important consideration while choosing their workplace would apply for work only at workplaces that provide generous paid maternity leave. Consequently, businesses that do not have reasonable paid maternity leave policies would lose out on talented candidates from among such female workers. In response to the same, some of them may enhance their maternity leave policies. Ultimately, over the long run, businesses would organically develop maternity leave policies that are reasonable for them, that is, which account for the costs they are willing to bear to attract female candidates to whom maternity leave matters.

By imposing a uniform mandate on all businesses, what this Act does is rob both businesses and female workers of choice: businesses, of their choice of maternity leave policies that are reasonable to them; and by extension, women, of their choice to work with workplaces that provide paid maternity leave for less than 26 weeks.

**Alternative regulatory models**

Providing 26 weeks of paid maternity leave to female workers is certainly a socially desirable goal. Is there a way to do that without burdening businesses with the entire costs?

The best way to do that could be to fund the costs either partially or fully through public funds, rather than impose the entire liability on employers. According to a 2014 ILO report on maternity laws and practice around the world, 58% of all countries provide paid maternity leave funded through social security (including fellow BRICS nations Brazil, Russia and South Africa), and a further 16% countries fund the same through a mixed model where costs are shared jointly by the individual employer and the State. Only 25%, that is, a quarter of all countries impose the funding liability only on the employer. Additionally, in the period between 1994 and 2013, the percentage of countries funding maternity leave through the social security and mixed models has risen by a combined 11%, while the same for countries funding it through employer liability has reduced by 7%. Clearly, the trend of the State bearing some, if not all, cost of paid maternity leave has been catching on internationally.

Another popular regulatory model in this regard followed by many countries is to provide a proportion of the full salary of the employee during maternity leave, and/or paying salary for a certain portion of the maternity leave period. The 2014 ILO report details, for instance that Canada gives paid leave at 55% of previous earnings for 15 out of the 16–17 weeks of total maternity leave, while countries like Albania, Thailand, and the UK pay different percentages of the wages for different chunks of the maternity leave period.

Other ideas worth exploring while thinking about alternative maternity leave regulations are the provision of economic or tax incentives to businesses that provide generous paid maternity leaves, and exempting enterprises with moderate turnovers from providing paid maternity leave or publicly funding it for them.

Either ways, in the absence of support or incentives, our current maternity leave policy with their employer liability model will continue to push a lot of enterprises from hiring women. In a country with a 50% gender gap in its workforce where women face entry barriers such as discrimination, fear of sexual violence and lack of skills, the last thing we need is a misguided law that deters businesses from hiring women.

* * *

**About Vineet Bhalla**

Vineet Bhalla holds a B.A., LL.B. (Hons.) degree from the W.B. National University of Juridical Sciences, Kolkata. He has been a Fellow with Make A Difference from 2012–15, and was one of the inaugural Pratiti Fellows with People for Parity in 2015. His previous work experience includes a 13 month stint with IDIA (Increasing Diversity by Increasing Access to Legal Education) as Assistant Director, and a one year stint as an inaugural Chief Minister’s Good Governance Associate in Haryana. At CCS, Vineet handles legal research and advocacy work.

## Free Market Capitalism vs. Crony Capitalism

Original: https://www.spontaneousorder.in/p/free-market-capitalism-vs-crony-capitalism

Author: Spontaneous Order

Published: 2018-08-06T09:31:12.000Z

Topics: free-market-capitalism, crony-capitalism, rent-seeking, rule-of-law

> In order to avoid the confusion caused by equivocal use of the term “capitalism” by socialist intellectuals, “free-market capitalism” should be clearly distinguished from “crony capitalism,” from the system that has mired so many nations in co

**Summary:**

The post argues for clearly distinguishing 'free-market capitalism' from 'crony capitalism' to counter socialist equivocation that tars genuine markets with corruption's brush. Crony capitalism, prevalent in many nations and increasingly the US, generates wealth through state-granted privileges rather than production: rich individuals are often political cronies benefiting from taxpayer-funded bailouts of failed firms, a Washington hive of rent-seeking lobbyists, bureaucrats, politicians, consultants, and hacks, and Treasury/Fed officials favoring select firms. In contrast, free-market capitalism rests on rule of law, equality of rights, freedom to choose, trade, innovate, the discipline of profits and losses, and secure enjoyment of one's labors, savings, and investments without political confiscation. From a classical-liberal view, this system disrupts entrenched elites who resent uppity minorities, lower classes rising above their place, women asserting worth, undermined status hierarchies, and choice-based relationships over birth or status. The conclusion urges rejecting cronyism's backwardness in favor of free-market dynamism.

**Key points:**

- Distinguish free-market capitalism from crony capitalism, which relies on state privileges like bailouts and rent-seeking rather than production.
- In the US, cronyism manifests in taxpayer-funded rescues of failed firms, a lobbyist-infested capital, and Fed/Treasury favoritism toward select businesses.
- Free-market capitalism upholds rule of law, equal rights, freedoms to trade and innovate, profit/loss discipline, and protection from political expropriation.
- Free markets challenge elites by enabling social mobility, female empowerment, and consensual relationships over status-based ones.

**By Spontaneous Order**

* * *

In order to avoid the confusion caused by equivocal use of the term “capitalism” by socialist intellectuals, “free-market capitalism” should be clearly distinguished from “crony capitalism,” from the system that has mired so many nations in corruption and backwardness.

In many countries, if someone is rich, there is a very good chance that he (rarely she) holds political power or is a close relative, friend, or supporter — in a word, a “crony” — of those who do hold power, and that that person’s wealth came, not from being a producer of valued goods, but from enjoying the privileges that the state can confer on some at the expense of others. Sadly, “crony capitalism” is a term that can, with increasing accuracy, also be applied to the economy of the United States, a country in which failed fi rms are routinely “bailed out” with money taken from taxpayers, in which the national capital is little more than a gigantic pulsating hive of “rent-seeking” lobbyists, bureaucrats, politicians, consultants, and hacks, and in which appointed officials of the Treasury Department and the central bank (the Federal Reserve System) take it on themselves to reward some firms and harm others.

Such corrupt cronyism shouldn’t be confused with “free-market capitalism,” which refers to a system of production and exchange that is based on the rule of law, on equality of rights for all, on the freedom to choose, on the freedom to trade, on the freedom to innovate, on the guiding discipline of profits and losses, and on the right to enjoy the fruits of one’s labors, of one’s savings, of one’s investments, without fearing confiscation or restriction from those who have invested, not in production of wealth, but in political power.

The waves of change that free-market capitalism creates are often resented by entrenched elites. As they see the world, minorities become uppity and the lower classes no longer know their place. More shocking, from their perspective, is that under free-market capitalism women assert their own worth. Status is undermined. People create relationships based on choice and consent, rather than birth or status.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## India Has The Highest Number Of Internet Shutdowns In The World

Original: https://www.spontaneousorder.in/p/india-has-the-highest-number-of-internet-shutdowns-in-the-world

Author: Spontaneous Order

Published: 2018-08-06T09:26:00.000Z

Topics: internet-shutdowns, civil-liberties, digital-economy, government-overreach

> What is an internet shutdown? An Internet shutdown occurs when the State orders telecom companies to shut down mobile Internet services. Suspending the Internet has almost become an obligatory extension of Section 144 of the CrPC, with services being su..

**Summary:**

India has the world's highest number of internet shutdowns, with services suspended in 26 districts across 5 states in the first 24 days of April, often tied to protests like Kathua and Bharat Bandh. New 2017 rules under the Indian Telegraph Act centralize authority with Union or State Home Secretaries and mandate review by committees within 5 days, marking a transparency gain over prior local discretion under Section 144 CrPC. However, from a classical-liberal perspective, escalating shutdowns disrespect citizens' right to internet access and fail riot control: misinformation spreads via phones, citizens can't contact family amid dangers, and police struggle to issue clarifications. Examples like France's 2016 post-attack safety app and Facebook's 'safe' button show internet's value in crises. Economically, 22 shutdowns from July 2015-June 2016 cost $968 million per Brookings, with losses amplified by digital payments growth toward $1 trillion by 2023. Blanket bans harm economy, rights, and peace more than they help; alternatives include surgical shutdowns, official messaging channels, and bolstered police tech. Governments must hesitate, as Supreme Court's Arup Bhuyan adoption of Brandenburg Test protects non-inciting speech.

**Key points:**

- India saw internet shutdowns in 26 districts across 5 states in April's first 24 days.
- 22 shutdowns from July 2015-June 2016 cost $968 million, per Brookings Institution.
- New Telegraph Act rules centralize shutdown decisions but frequency keeps rising.
- Governments should adopt alternatives like surgical shutdowns and official apps over blanket bans.
- Shutdowns undermine citizens' right to internet access and fail to curb misinformation effectively.

**By Spontaneous Order**

* * *

**What is an internet shutdown?**

An Internet shutdown occurs when the State orders telecom companies to shut down mobile Internet services. Suspending the Internet has almost become an obligatory extension of Section 144 of the CrPC, with services being suspended in 26 different districts across 5 states, all within the first 24 days of April. This is clearly indicative of how shutdowns have become the preferred tactic to deal with demonstrations such as the Kathua protests and the Bharat Bandh.

Rules passed by the Ministry of Communications in August 2017 as a notification on the Indian Telegraph Act have statutorily legitimized the temporary suspension of telecom data services in the interest of public safety. The new law is a step towards due process and transparency. Earlier, the decision to suspend Internet services would be taken under the discretion of district collectors and magistrates via Section 144 of the CrPC.

This step moves power away from local actors thereby, allowing only the Union Home Secretary or the State Home Secretary to suspend the Internet. Additionally, the new law also stipulates the decision to shut down Internet services must be reviewed by a Central or State Review Committee within 5 working days of the issue of directions.

Although this may be a step in the right direction, it is troubling that the frequency of shutdowns has been increasing, and it is important to question whether or not internet shutdowns actually help in riot control.

**Are shutdowns effective?**  
The classical justification for shutdowns is that they prevent the spread of material that may incite violence. However, it is important to take note of the fact that misinformation and rumours about riots or any violent activity can continue to spread through phones, messages despite the internet being shut down. In fact, suspending internet services hampers the ability of citizens to contact friends and family during hazardous and possibly life-threatening situations. It also becomes difficult for law enforcement authorities to release clarifications and reports that can dispel rumours as well as transmit warnings and information that can assure citizens of safety.

Governments in other countries have realized that the Internet can be a useful tool in times of turmoil. Post the terrorist attacks in France in 2016, the French Government considered shutting down the internet but realized that the gains were outweighed by the costs. Instead, they developed an application with an alert button, which would alert the police and inform them about areas of danger. Facebook followed suit and developed a button with which people could mark themselves safe in case of a catastrophic event and this feature has seen widespread use.

Additionally, the economic cost associated with internet shutdowns is also very high. In October 2016, the Brookings Institute calculated the financial losses that India had sustained due to the 22 temporary Internet shutdowns between July 2015 and June 2016 and arrived at a figure of $968 million. This figure factors in the percentage of the GDP “derived from the Internet economy”, online ad services, as well as digital payments.

These staggering numbers are derived from a pre-demonetization economy, and since then the digital payments market has grown astronomically and is expected to cross the $1 trillion mark by 2023. The rise in the number of shutdowns over the last few years coupled with the increase in the use of Debit/Credit cards, mobile payment systems and the unified payment interface could have catastrophic effects on the economy.

**What can be done?**  
The main inference from the government’s actions over the last two years is that they refuse to respect citizens’ right to access the Internet. Often times a shutdown can be used to quell legitimate acts of peaceful protest. In the case of Arup Bhuyan v State of Assam, the Supreme Court of India adopted the Brandenburg Test from American jurisprudence, which states that merely publishing or circulating material that justifies the commission of violent acts is not illegal. It is only illegal the moment it incites imminent lawless action.

Given the substantial collateral impact the decision has on the common citizen, the Government should be more hesitant to impose an Internet shutdown. Possible alternatives for a blanket Internet shutdown could be implementing a limited or surgical shutdown of a particular area, the use of Internet messaging apps to establish official channels of communication during times of riots, and increasing the infrastructure available to police technology teams to track down nefarious individuals spreading inciting messages.

Clearly, the increasing use of blanket internet bans is a worrisome trend and acts as a negative stimulus on society, the economy and family life. Although it may seem intuitive that Internet bans are a necessary precaution in a volatile nation such as India, but the apparent benefits are outweighed by the underlying detrimental effects on the local economy, citizens’ peace of mind and individual rights.

*  
The article has been written by Avinash Mathews and Aditya Kunatharaju of Jindal Global Law School; it was originally published on Qrius (formerly, The Indian Economist)*

*Opinions expressed in this article are not necessarily representative of those held by Centre for Civil Society.*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Why Have The Poor Not Done As Well As The Rich In New India?

Original: https://www.spontaneousorder.in/p/why-have-the-poor-not-done-as-well-as-the-rich-in-new-india

Author: Spontaneous Order

Published: 2018-08-06T09:21:16.000Z

Topics: economic-freedom, license-raj, street-vendors, agricultural-reforms

> ‘[The] Rich are getting richer and poor are becoming poorer!’ is now a common refrain used in India in any discussion on economic reforms. Since 1991, India has undergone a great deal of liberalisation internally and externally. Many feel that the gai

**Summary:**

Despite India's economic liberalization since 1991, which improved the country's Fraser Institute economic freedom rank from 80th in 1990 to 53rd in 2004 and reduced poverty from 35% to 26% of the population, the poor have not benefited as much as the rich because reforms have disproportionately targeted sectors employing the middle and upper classes, like factories and call centers, while leaving the poor's livelihoods—street vending, rickshaws, and agriculture—burdened by the license-permit-quota raj. In Delhi, 500,000 cycle-rickshaws operate but only 99,000 are licensed, leading to Rs 200 monthly bribes per rickshaw totaling Rs 10 million monthly, plus Rs 12 million from 600,000 unlicensed street vendors; raids impound equipment, stifling expansion. Well-intentioned laws, like banning rickshaw rentals, raise costs for migrants and limit poor entrepreneurs' capital utilization. Agriculture remains unreformed, with restrictions on inter-district transport, crop choices, and sales. From a classical-liberal view, the poor remain trapped in economic unfreedom, paying bribes and facing harassment, preventing growth. The solution is the 'Livelihood Freedom Test': review, revise, or remove rules restricting low-capital, low-skill livelihoods to enable balanced growth and genuine employment for all.

**Key points:**

- Economic liberalization since 1991 has boosted sectors for the rich but left poor-dominated areas like street vending and agriculture under heavy regulation.
- Delhi's 500,000 cycle-rickshaws and 600,000 street vendors pay Rs 22 million monthly in bribes due to licensing limits and raids.
- Laws like banning rickshaw rentals harm poor migrants by inflating costs and idling capital during illness or off-seasons.
- Agriculture lacks a national market, with state restrictions on crop sales and changes perpetuating rural poverty.
- Apply the 'Livelihood Freedom Test' to remove rules hindering low-skill livelihoods, promoting inclusive economic freedom.

**By Parth Shah**

* * *

‘\[The\] Rich are getting richer and poor are becoming poorer!’ is now a common refrain used in India in any discussion on economic reforms. Since 1991, India has undergone a great deal of liberalisation internally and externally. Many feel that the gains of this liberalisation and globalisation have not accrued to the poor.

[Unequal Distribution of Economic Freedom](https://www.forbes.com/sites/alejandrochafuen/2014/01/22/unequal-distribution-of-economic-freedom-the-role-of-the-think-tank/)

One can dispute this charge by pointing out that the proportion of population below the poverty line (1) has declined from 35 to 26 percent since 1990. Nonetheless, I agree that the poor have not gained as much as they could have in the new India. But it is not because the rich have taken from the poor, as commonly implied. The reason is simple: the areas in which the middle and upper classes make their living have seen the highest degree of liberalisation, while the areas in which the poor earn their livelihood have seen the fewest reforms.

Economic freedom for the rich has increased but not for the poor. In the Fraser Institute’s Economic Freedom of the World Report 2006, India’s rank has improved from 80 in 1990 to 53 in 2004. This overall increase in economic freedom has not been the same across all classes.

The poor still live under the draconian license-permit-quota raj, as the system of extensive government intervention in India is known. Today setting up a factory or a call center requires no government license. But anyone wanting to run a tea-stall or to become a street hawker or a cycle rickshaw puller or to work as a railway porter requires a license. For entry-level professions that need low skills and little capital, licenses are still mandatory.

The industrial entrepreneurs now have economic freedom but the street entrepreneurs do not. A vast majority of street entrepreneurs operate without a license — illegally, informally. They are open to constant harassment and extortion by the police and municipal officers.

The License Raj on Street Entrepreneurs

Consider cycle-rickshaw pullers and street vendors in the cities and towns of India. Delhi has approximately 500,000 cycle-rickshaws providing an affordable and accessible transportation service to the poor. The Municipal Corporation of Delhi has mandated that rickshaws have to be licensed and only 99,000 licenses shall be given out. More than 80% of the cycle-rickshaws are illegal. Studies suggest that on average a bribe of Rs 200 per month per cycle rickshaw is paid. Even the licensed rickshaws have to pay up. The government functionaries extort Rs 10 million a month from the cycle-rickshaw pullers! Similarly, Delhi’s about 600,000 street vendors operate without the necessary license and pay up about Rs 12 million per month in bribes. This is the burden of the license-permit raj — of economic unfreedom — on the poorest of the poor in Delhi.

During municipal raids, which occur regularly on a weekly or monthly basis, all the goods, hand cart, weighing balance and other equipment, as well as rickshaws are impounded. Once the rickshaw is seized, it takes 5–15 days and more bribes to get it released. During these days, the puller loses his means of livelihood. Because of the constant threat of raids, the street hawkers are unable to expand their business. If the hawkers spread out further by acquiring more goods to sell, they won’t be able to grab them quickly and run when the police van beacons. The hawker can expand his business only upto the reach of his arms. No wonder that India’s urban poor are still earning a subsistence living. This is because of the lack of liberalisation in the areas in which they earn their living.

Well-intentioned Laws and the Poor

In addition to the stifling licensing system, myriad rules and regulations create further hurdles. Many of these rules are well-intentioned but the outcomes are perverse, just as the Law of Unintended Consequences predicts. Delhi has a law that the owner and the driver of a cycle rickshaw must be the same person. Renting of rickshaws is illegal. The law intends to promote ownership and to limit exploitation of rickshaw pullers by the renters. But how about a migrant who does not have enough money to buy a rickshaw and does not have any other skills? Many of the migrants are seasonal; they come to the city during the non-agricultural season, earn some cash and go back to work on the farm. Obviously there is demand for rental rickshaws, and the suppliers are easy to find. The rental charge however includes a premium for the risk of running an illegal business. Supply of rental rickshaws is limited since honest people do not enter this business. Not surprisingly then a five-moth’s rent equals the price a new rickshaw. Is this artificially higher rent good for the rickshaw puller?

Equally importantly, when a poor migrant somehow buys a rickshaw, what happens when he has to go back to the village for a few months? He cannot rent out his rickshaw. A person can ply a rickshaw for 10–12 hours a day. He cannot rent it out for the rest of the day. A rich man’s capital — a call center — can work for 24 hours, but a poor man’s capital — his rickshaw — can not. If he falls sick, his rickshaw must lie idle. The only business he knows, he cannot grow in it. His earnings are forever limited to what he can earn from one rickshaw. And people wonder, why he is poor!

The Rural Poor with no Agricultural Reforms

The rural poor who earn their living in agriculture fare no better. The agriculture has been the area of least reforms. Much agriculture produce cannot be transported across a district line, let alone across the state or the country. India does not even have a common market in agricultural produce. A law in the state of Maharashtra requires farmers to sell their sugarcane to a specified sugar mill in the district. In Kerala, the law mandates that once the farm is registered as producing one crop, it cannot be changed without government permission! Recently, farmers who had planted sugarcane instead of rice saw their crop being uprooted by union workers. Rice and sugarcane farm workers belong to different unions. The Essential Commodities Act considers agricultural produce so essential that it has condemned its producers to perpetual poverty through a multitude of inane restrictions.

The urban and rural poor of India are unenthusiastic about liberalisation, not because it is making them poorer as some claim, but because they have not seen much liberalisation in their means of livelihoods. We must do for them, what we have done for the rich: Give them their livelihood freedom.

Lifting the Poor: The Livelihood Freedom Test

The government must first remove all such hurdles by applying the Livelihood Freedom Test. Test all existing rules and regulations for their impact on the freedom to earn an honest living. Does any law restrict opportunities for any person to earn a living, particularly in a profession that requires little capital or skills? If so, then Review, Revise, or Remove. With the removal of these restrictions, economic growth would not only increase genuine employment but also be more balanced in offering opportunities to all classes of the society.

Note  
(1) In India, poverty is determined according to whether or not a person gets 2,400 calories per day (see National Sample Survey Organization).

References

1\. Government of India. National Sample Survey Organisation. Digital documents available through http://mospi.nic.in/mospi\_nsso\_rept\_pubn.htm  
2\. Shah, Parth J. (2004). Introduction to the Indian edition. Economic Freedom of the World: 2004 Annual Report by James Gwartney and Robert Lawson. Reprinted by the Centre for Civil Society, New Delhi  
3\. Shah, Parth J. and Naveen Mandava, eds. (2005). Law, Liberty and Livelihood: Making a Living on the Street. New Delhi: Centre for Civil Society

[Read more.](https://spontaneousorder.in/making-markets-work-for-the-poor-how-regulations-act-as-entry-barriers/)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## The Effect of Regulation on the Global Social Casinos Economy

Original: https://www.spontaneousorder.in/p/the-effect-of-regulation-on-the-global-social-casinos-economy

Author: Spontaneous Order

Published: 2018-08-06T08:45:18.000Z

Topics: social-casinos, gambling-regulation, india-digital-economy, market-regulation

> As the world of digital entertainment keeps expanding and transforming into innovative services, there are some specific markets that are gaining a great positioning among users and creating space not only in industry leaderships but also in local regul..

**Summary:**

The global social casino industry, distinct from real-money online gambling, is experiencing robust growth, with revenues projected to rise from $4.1 billion in 2016 to $5.1 billion in 2020—a 24% increase—driven largely by mobile usage, which accounted for 75% of 2018 revenues. India emerges as a prime target market with 300 million smartphone users and 22.4% penetration, second only to China's 717 million, signaling substantial untapped potential amid rising mobile adoption in emerging economies. However, regulatory pressures threaten this trajectory. In the US, lawyers contend that transferable virtual coins create a secondary real-money market, potentially classifying social casinos as online gambling subject to stringent laws, prompting major platforms to ban such transfers globally. This reflects a broader trend of governments worldwide crafting new regulations to license digital gambling for tax revenue and user protection, as seen in US states debating online sports betting. From a classical-liberal viewpoint, such interventions risk restraining innovation and market expansion, particularly burdening smaller social casino firms with compliance costs and access restrictions, and dimming prospects in high-growth markets like India where overregulation could forestall economic opportunities in digital entertainment.

**Key points:**

- Global social casino revenues grew from $4.1B in 2016 to a projected $5.1B in 2020, fueled by 75% mobile revenue share in 2018.
- India's 300 million smartphone users and 22.4% penetration position it as a key growth market for social casinos.
- US regulatory debate classifies transferable virtual coins as enabling real-money gambling, leading platforms to ban peer-to-peer transfers.
- Emerging gambling regulations worldwide could impose compliance burdens, especially harming small firms and restricting access in markets like India.

**By Spontaneous Order**

* * *

As the world of digital entertainment keeps expanding and transforming into innovative services, there are some specific markets that are gaining a great positioning among users and creating space not only in industry leaderships but also in local regulations. In this piece, we will analyse the market of social casinos and their new encounter with online gambling laws.

Firstly, it is important to highlight that social casinos as well as the world of online casinos, is a very lucrative industry. This market, that initially started as a trend, presents potential for remarkable growth in value. Statista estimates that the revenue of the global social casino industry will increase in value from 4.1 billion US dollars on 2016 to 5.1 billion US dollars for 2020. It isn’t every day that we see markets expecting to grow their revenue by 24% in less than 5 years, and that’s why several companies are now investing in these entertainment platforms.

An important growth factor for social casinos is their relationship with mobile usage, according to experts. In 2018, 75% of the revenue of social casinos came from mobile devices. Worldwide, increase of mobile devices and data subscribers is one of the main trends that drives the growth of several digital entertainment industries, especially in emerging markets.

Now days, the focus of social casinos is not only the number of smartphone users in each market. Another statistic ruling market development is the smartphone penetration, as it shows the total potential of each country. Following this, the eyes of the industry are now on India, not only because it is the second country with most number of smartphone users (i.e. 300 million users), only surpassed by China (717 million users), this market also shows a smartphone penetration of 22.4% announcing an extensive development of the market in further years- thus, making it a target for social casinos market.

With several external factors beneficiating the positioning of social casinos, there is one important trend that might hold back this industry development; local regulation. Until now, social casinos weren’t concerned about online gambling regulation as they weren’t considered real money online casinos. In fact, this is one of the reasons why they became so popular, these platforms could cover a large market of casino games fans without intervening in legal aspects of real money gambling platforms.

The controversial regulation of online gambling in the United States will have an impact on the global social casinos market too. At social casinos; users play for winning virtual coins or tokens which can’t be converted in real money, so these platforms can’t be considered online casinos and online gambling regulation shouldn’t apply. However, recently United States presented a new perspective and according to several lawyers the fact that users can transfer virtual coins between them opens up the opportunity for a second market of these tokens where users could buy them from other users for real money. According to them, this factor is enough for converting social casinos in online gambling platforms and forcing them to follow the pertinent regulation. It isn’t clear how this discussion will end and how far it will influence international gambling regulations however big social casino companies have begun to react to this by forbidding the virtual coin transfers between users on their platforms, a measure that might sound simple and easy to execute to avoid legal issues but that also is showing the new pressure that social casinos must face and the changes they have to do globally for regulations and policies established locally.

The global trend towards digital gambling is the creation of new laws and regulations to allow this activity, each day we see more local initiatives for regulating online gambling platforms to allow its growth while protecting users and of course increasing local tax revenue, even in the United States we can see more pressure from different states to accept and regulate different online gambling markets, we can see it clearly with the new debate of online sport betting platforms. The fact that the industry of casinos is moving towards new local regulations implies that online casinos must be in permanent vigilance of new laws all over the world, and now with the discussion of social casinos being a type of online gambling providers will urge them to do the same.

The consequences of local modifications will have an impact in the industry, especially for small social casino companies for whom restricting access to users according to local laws represents a big setback. We also need to consider the possible modifications on the restrictions that social media platforms may have to put in place for social casinos according to local laws. In conclusion, the bright future expected for social casinos, especially in markets with high potential like India, might have a restraint if the pressure of online gambling regulators establishes that these gaming services should comply their laws.

This article was originally published on Qrius(formerly, the Indian Economist).

Opinions expressed in this article are not necessarily representative of those held by Centre for Civil Society.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## So You Think Money Is The Root of All Evil?

Original: https://www.spontaneousorder.in/p/so-you-think-money-is-the-root-of-all-evil

Author: Spontaneous Order

Published: 2018-08-06T08:39:44.000Z

Topics: free-markets, ayn-rand, anti-socialism, property-rights

> “Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowin

**Summary:**

The post challenges the notion that 'money is the root of all evil' by quoting Ayn Rand's Francisco d'Anconia from Atlas Shrugged, presenting money as 'the barometer of a society’s virtue.' In a classical-liberal framing, Rand argues that a healthy society thrives on voluntary trading by consent and production, where money flows to those who create value through work. Corruption arises when trading becomes compulsion, production requires permission from non-producers, and wealth accrues via graft, favors, and pull rather than honest labor—laws then protect the corrupt against the productive, rewarding dishonesty and dooming society. Money, as a noble medium, rejects brutality and half-property, half-loot systems. The post urges recognizing 'money is the root of all good' to avoid destruction, as its absence reduces men to tools of other men, leaving only 'blood, whips and guns—or dollars.' This aligns with Spontaneous Order's mission to critique India's pseudo-socialism, highlighting a liberal political order rooted in free exchange over false socialist values alien to India's independence movement.

**Key points:**

- Money measures a society's virtue through voluntary consent-based trade versus compulsion and corruption.
- Corruption dooms society when laws protect grafters against honest producers.
- Money is the root of all good, enabling free exchange; without it, brute force prevails.

**By Spontaneous Order**

* * *

“Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed. Money is so noble a medium that is does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.

“Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns–or dollars. Take your choice–there is no other–and your time is running out.”

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## State Governors: Why Do We Need Them?

Original: https://www.spontaneousorder.in/p/state-governors-why-do-we-need-them

Author: Spontaneous Order

Published: 2018-08-06T08:36:40.000Z

Topics: federalism, state-governors, constitutional-reform, electoral-integrity

> The state governors of India, a product of a time long-past, have been under the scrutiny of the public eye for a long time now. Yet, despite their notorious reputations, little seems to have been done. The colonial origins of the Governor’s position li

**Summary:**

State governors in India, originating from the colonial Government of India Act 1935, were designed to retain British control over provincial governments despite Indian leadership, a mechanism Congress initially opposed but later endorsed upon gaining central power. Today, these unelected officials serve the ruling party's interests at the Centre, prone to arbitrary dismissal—as in the UPA government's 2013 sacking of four governors—and wield discretionary powers without checks or accountability to state legislatures. In opposition-ruled states, governors can dismantle governments citing 'constitutional breakdown,' exemplified by AAP's conflicts with Delhi's Lieutenant Governor. In aligned states, they neglect duties during crises. Key powers, like deciding post-election government formation and majority proofs, invite bias, horse-trading, and election distortion, exacerbated by governorships as post-retirement rewards for loyalists. From a classical-liberal viewpoint emphasizing federalism and democratic accountability, this unrepresentative, redundant position—with ceremonial duties and unchecked authority—undermines India's constitutional federal bedrock, warranting scrutiny on its necessity in a modern democracy.

**Key points:**

- State governors stem from the 1935 Government of India Act, enabling central control over provinces, now abused by the ruling party as seen in UPA's 2013 dismissal of four governors.
- Unelected governors hold discretionary powers to decide government formation and majority proofs post-elections, lacking checks and vulnerable to partisan bias and horse-trading.
- Governors undermine federalism by overriding state governments in opposition-ruled states or neglecting duties in aligned ones, as in AAP-Delhi LG clashes.
- The position serves as a political reward for loyalists, offering no incentive for neutral duty fulfillment in a democracy valuing accountability.

**By Akshita Mathur**

* * *

The state governors of India, a product of a time long-past, have been under the scrutiny of the public eye for a long time now. Yet, despite their notorious reputations, little seems to have been done.

The colonial origins of the Governor’s position lie in the Government of India Act 1935, which although gave over the provincial governments to Indians, allowed retention of British control via nomination of the Governor who was to be the titular head of these provincial governments. Although the move was met with indignance by the Congress, the opposition soon turned into active endorsement when the latter replaced our colonial masters at the Centre. The unelected Governor, who once preserved the interests of their colonial friends, now preserves the interests of the ruling party. Prone to dismissal and replacement without explanation, the highly decorated post of the Governor holds little independent power and in reality exists to do the Federal Govt’s bidding. An example on this being the UPA government’s arbitrary dismissal of 4 governors back in 2013.

And so, the public debate on the symbolism of the Governor’s position is not unwarranted. Some could say it was doomed from the very beginning, afterall, a colonial legacy such as that accompanying the Governorship is hard to ignore, and even harder to mend.

Modern times have only underscored the complicated relationship between the Governor and various political parties. The governor’s unrepresentative presence, wherein there is no accountability to the state legislature she or he presides over, renders the position vulnerable to abuse by the party in power at the centre. Conversely, the precariousness of the position allows state governments to needlessly attack the ruling party and argue against any step taken by the governor- even when they’re justified.

In states where the leadership is not the same as the one at the centre, the whole government is at the mercy of an unelected official who can, at any time, disband the state government citing “constitutional breakdown”. Case in point: AAP government in Delhi and its constant run ins with the Lieutenant Governor of Delhi (who served under the Atal Bihari Vajpayee government). In states where the leadership is the same as the ruling party, there is no incentive for the Governor to carry out its duties in the event that there is an actual “constitutional breakdown”. Either ways, parties can override, or abuse the office of the Governor with impunity.

Additionally, the discretionary powers awarded to the Governor lack any system of checks and balances. They have often come under fire for being undemocratic- not only by virtue of the unelected official wielding them but also for the lack of inputs by the state government. For example, among the two main discretionary powers given to the Governor, one gives him/her the power to decide which party forms the government and/or proves their majority in case there is no clear majority post-elections. This also, by extension, gives the official powers to decide what is the process to be observed. This arbitrary power, devoid of any codified precedence, if used with party bias (which it often is) or malicious intent could distort and compromise the results of the elections themselves.

For example, the duration allowed to any party to prove their majority demands absolute delicacy considering that bribing and poaching other party members is not too far a reality. In this case, each minute counts! To then put the matter of upholding the integrity of the elections in the Governor’s unaccounted- for hands, and demand they view their political affiliations with objectivity, is to risk the very fabric of democracy.

The most essential bias in this case is a concept that the Indian bureaucracy is only too well-versed in. Plush government offices, dangled as post-retirement carrots to award loyalty in crucial times is a much practised tradition in our political space. Nomination for the Governorship is one such sought after seat. In light of this carrot and stick issue that has dominated the administrative services, to assume that the Governor would have incentive to carry out the office’s duty (which is barely any) with neutrality would be to ask too much.

The Governor’s position then, merely a political reward for geriatric party affiliates, masquerading as a highly ranked Government office is very demonstrative and reflective of the redundancy of the position.

The question that then demands asking is, what still remains the value addition of an unelected official who has unchecked powers and purely ceremonious duties in a democracy such as ours, when its mere presence violates the basic tenets of federalism that form the bedrock of India’s constitution?

* * *

**About Akshita Mathur**

Akshita Mathur has completed her undergraduate degree in Economics from Symbiosis School of Economics, Pune, and is currently working at Centre for Civil Society. A writer by passion, she aspires to make a career in Investigative Journalism. Her interests lie in International Relations and Politics. Outside the workplace, she indulges herself in lots of hot cups of chai and good food.

## Equity in Education

Original: https://www.spontaneousorder.in/p/equity-in-education

Author: Spontaneous Order

Published: 2018-08-06T08:33:15.000Z

Topics: education, school-vouchers, school-choice, indian-education

> All our efforts have not yet guaranteed easy access and good quality elementary education for all children of India. It is time to think outside the box and the Education Voucher is the most innovative approach for universal guarantee of high-quality ed..

**Summary:**

Parth Shah argues from a classical-liberal perspective that India's elementary education failures stem from inefficient government funding of schools, proposing Education Vouchers as the innovative solution for universal high-quality access. Vouchers, issued by government, cover education costs at any school of the student's choice; schools redeem them for funds. In Delhi, government spends Rs 800–1,500 per student monthly on poor-performing schools, while effective private ones charge Rs 400–800. Redirecting funds via vouchers empowers poor students with choice, shifting accountability from government to parents/students, who can switch schools. This sparks competition, enhancing learning quality, infrastructure, and voluntary services like mid-day meals, transport, or after-school care tailored to local needs. Vouchers merge private sector efficiency, innovation, and customization with public equity and supervision, equalizing opportunities like those rich families enjoy. Proven globally in Sweden, Chile, Colombia, Netherlands, US, UK ('pupil passport'), New Zealand, Bangladesh (dramatically increased girls' middle-school enrollment), Czech Republic, and Côte d’Ivoire. Analogized to ancient gurudakshina, it guarantees quality education for all.

**Key points:**

- Redirect government education funds to vouchers given directly to students, enabling choice of better-value private schools over costly government ones.
- Shift school accountability from government to parents/students, allowing easy switching to foster competition and quality improvements.
- Competition incentivizes schools to offer customized services like meals or transport without mandates, suiting diverse student needs.
- Voucher systems have succeeded in diverse countries including Bangladesh, where girls' middle-school enrollment surged beyond expectations.

**By Parth Shah**

* * *

All our efforts have not yet guaranteed easy access and good quality elementary education for all children of India. It is time to think outside the box and the Education Voucher is the most innovative approach for universal guarantee of high-quality education .

The Education Voucher is a coupon offered by the government and covers the cost of education at the school of the student’s choice. The schools collect vouchers from students and present them to the government for the amount of money specified on the voucher.

The Delhi government spends Rs 800–1,500 a student every month while some of the best — not the high-end — private schools charge a student Rs 400 to 800 a month. Since the difference in results is known, imagine the quality of education if the government funds were given to the poor through education vouchers and not through government schools.

At present, the government gives funds to schools, which then provide free education to students. The voucher system will provide funding to the student who will then approach any of the schools for education. While in the present system, the schools are accountable to the government, the voucher system will make schools accountable directly to students since they pay for the education through vouchers.

So if the student does not like the school, she can take her voucher to another one. The Education Voucher also equalises the opportunity for the poor by giving them the purchasing power they lack. This enhanced choice of the poor will increase competition in the education sector.

The resultant competition among schools improves the quality of learning, infrastructure, extra-curricular activities.To attract and retain students, schools offer variety of services — mid-day meals, transportation, flexible school hours, after-school care and so on.

They provide these extra services not because they are mandated, but to keep their student customers. More importantly, instead of a single mandated service like mid-day meals, each school would have the incentive to figure out the service that is most valuable to its students. In some cases, it could be mid-day meals, in other cases it could be free transportation, or after-school care.

The Education Voucher combines core competencies of the private and public sectors: efficiency, innovation, customisation and accountability of the private sector, with the equity and independent supervision of the public sector. It gives the same choice to poor students that the rich enjoy. Voucher programmes have been implemented in countries as diverse as Sweden, Chile, Columbia, Holland, the US, the UK, New Zealand, Bangladesh, Czech Republic and Cote d’ Ivoire.

In the UK, it’s called “pupil passport”. Each country has designed the voucher programme to suit its need. Bangladesh, for instance, gives vouchers to only girl students in the fifth standard to continue into the sixth in any school of their choice. Enrolment of girl students in middle school has since increased far beyond expectations. In ancient times, the pupil offered a gurudakshina directly to the teacher as a fee for the education provided.

Those who were poor and could not afford gurudakshina had to rely on the generosity of the guru. Under the voucher system the government provides this gurudakshina on the poor student’s behalf. The Education Voucher system may well be called the Gurudakshina Grant Scheme.

The article can be accessed [here](http://ccs.in/equity-education).

Read more about school vouchers: [https://spontaneousorder.in/revamping-indias-education-system-its-time-for-education-vouchers/](https://spontaneousorder.in/revamping-indias-education-system-its-time-for-education-vouchers/)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## No Outside Food Allowed!

Original: https://www.spontaneousorder.in/p/no-outside-food-allowed

Author: Spontaneous Order

Published: 2018-08-06T08:29:11.000Z

Topics: private-property-rights, fundamental-rights, judicial-overreach, business-regulation

> In December of last year, a public interest litigation (PIL) petition was filed before the High Court of Bombay challenging multiplex cinema halls’ right to bar customers from bringing outside food into the cinema premises. Last month, the counsel for t

**Summary:**

A PIL filed in December before the Bombay High Court challenges multiplex cinema halls' bans on outside food, arguing it violates Rule 121 of the Maharashtra Cinemas (Regulation) Rules, 1966, and the right to life under Article 21 for vulnerable persons. The Maharashtra government must form a policy within six weeks. The author argues the state should maintain the status quo to protect multiplex owners' Article 19(1)(g) right to conduct business freely on private property. Rule 121 only prohibits hawking inside auditoriums, not sales from external stalls. Customers dissatisfied with the policy can choose alternatives like single-screen cinemas or streaming services. Fundamental rights like Article 21 are not horizontally enforceable against private businesses screening films, which is not a public function or monopoly. Even if applicable, a temporary food ban during a movie does not impair human dignity, basic necessities, or self-expression, as per the Supreme Court's 1981 Francis Coralie Mullin judgment. Forcing changes via court sets a dangerous precedent of judicial overreach into private affairs, akin to demanding restaurants allow outside food. The petition is frivolous, and the state should affirm private property rights by rejecting it.

**Key points:**

- Maharashtra government should maintain status quo allowing multiplexes to ban outside food to uphold Article 19(1)(g) business freedoms.
- Rule 121 of 1966 Maharashtra rules only bars hawking inside auditoriums, not multiplex food stalls outside them.
- Fundamental rights under Articles 21 and others do not apply horizontally to private cinema operators, as film screening is not a public function.
- Banning outside food for a few hours does not violate the right to life or dignity, per Supreme Court precedents; customers can opt for alternatives.

**By Vineet Bhalla**

* * *

In December of last year, a public interest litigation (PIL) petition was filed before the High Court of Bombay challenging multiplex cinema halls’ right to bar customers from bringing outside food into the cinema premises. Last month, the counsel for the Government of State of Maharashtra deposed before the court that the state is in the process of forming a policy on this matter, and that said policy will be presented in six weeks.

Through this post, we will argue that the State’s policy should maintain the status quo; any concession to the petitioner’s demand will set a dangerous precedent for judicial intervention in private affairs, and incorrect horizontal application of fundamental rights.

What is the PIL about

The PIL makes the following two main arguments to buttress its challenge: 1. that cinema halls cannot, on one hand, restrict customers from bringing their own food inside the cinema premises while at the same time permit food to be sold by vendors in the cinema premises, as the latter is disallowed by Rule 121 of the Maharashtra Cinemas (Regulation) Rules, 1966; and 2. that the ban on outside food violates the fundamental right to life of medically vulnerable persons and senior citizens.

As will be demonstrated in the next part, both these arguments are bad in law, and in violation of multiplex owners’ constitutional rights.

Can the judiciary dictate how must private businesses run their affairs

At the very outset, it is important to outline that the running of a multiplex cinema hall is a private business. As private business owners, multiplex owners are free to run their trade operations as they see fit. This is guaranteed to them by Article 19(1)(g) of the Constitution.

Multiplex owners are in the business of screening films for paying customers. That is self-evident. Barring these paying customers from getting food from outside into their premises, and allowing certain vendors designated by them to sell food within their premises at particular prices, is part of their business operations. If a customer is not in agreement with such a business practice, she has the choice not to avail of the services of the business and spend her money, which is her private property, elsewhere. Owners of multiplex cinemas, too, have the choice to regulate what one can and cannot do once one is let into and is using their private property.

The Maharashtra Cinemas (Regulation) Rules, 1966, do not apply to this situation. A perusal of Rule 121 makes it clear that it only bars hawking “in the auditorium”. This rule will not apply to vendors who sell food and drinks inside multiplex cinema premises as the selling is done from stalls outside the auditorium and not inside it. Hence, the petitioner’s reliance on this rule betrays an incorrect understanding of the Rule itself.

Does ban on outside food violate right to life

Fundamental rights are ordinarily enforceable only against the State. The Supreme Court itself has held that courts’ writ jurisdiction to enforce fundamental rights is extendable to private parties only when they perform an activity akin to public duties or state functions. Such public function has been defined as certain tasks that, because of their very nature, a government ought to perform, and that should not be left to the market, such as provisions of social or individual goods that we think every person is entitled to in a modern democracy.

It goes without saying that the task of screening films in multiplex cinemas does not qualify as a public function that can only be performed by the State. Neither do multiplex cinema owners exercise a monopoly over control and management of the entire market of screening films (there are not only single screen cinemas that do the same, but alternatives to cinema itself are now available in the form of online movie streaming services).

Hence, it is abundantly clear that multiplex film owners are not subject to courts’ writ jurisdiction.

In arguendo even if we assume that multiplex cinema owners are subject to writ jurisdiction, the question we must then ask is whether the ban on outside food violates the right to life of senior citizens and medically vulnerable persons, as argued by the petitioner?

What constitutes the right to life

The right to life is guaranteed to every person through Article 21 of the Constitution. Article 21 has a vast body of jurisprudence associated with it, probably more expansive than that for any other fundamental right, because of the creative and interventionist interpretation it has been given by the Supreme Court over the years. The apex court has elaborated on different aspects of the right, but has perhaps best articulated it thus in its judgment in Francis Coralie Mullin vs The Administrator, Union Territory of Delhi and Ors. in 1981:

“\[T\]he right to live includes the right to live with human dignity and all that goes along with it, namely, the bare necessities of life such as adequate nutrition, clothing and shelter over the head and facilities for reading writing and expressing oneself in diverse forms, freely moving about and mixing and mingling with fellow human beings … \[and must include\] the right to basic necessities of life and also the right to carry on functions and activities as constitute the bare minimum expression of human self. … Every act which offends against or impairs human dignity would constitute deprivation protanto of this right to live …”

One must ask oneself now whether the denial of outside food to voluntarily paying customers for a couple of hours within the premises of one’s private property as part of one’s business, in any way, offends the paying customers’ human dignity, their bare necessities of life, or their expression of human self? Will a person choose to pay for a service that abrogates her dignity? Leave aside notions of dignity; even if a person is otherwise offended by a service condition, what is the best and easiest course of action: to not avail of that service and look for an alternative, or force the business to run itself in a way one deems fit through litigation? Believing in the latter would be akin to going to a restaurant and arguing that the restaurant, by not allowing one to get outside food to eat into its premises, is violating one’s fundamental right to life!

This litigation is a classic example of a frivolous petition filed in the name of public interest, based on an incorrect understanding of law and contempt for private property right, as a result of which it stretches the concept of horizontal application of fundamental rights beyond recognition. The High Court of Bombay should have ideally refused to admit it altogether. Be that as it may, the ball is in the State Government’s court now. The State Government must resist the temptation to give in to statist sentiment, and signal its affirmation of private property rights by maintaining status quo.

* * *

**About Vineet Bhalla**

Vineet Bhalla holds a B.A., LL.B. (Hons.) degree from the W.B. National University of Juridical Sciences, Kolkata. He has been a Fellow with Make A Difference from 2012–15, and was one of the inaugural Pratiti Fellows with People for Parity in 2015. His previous work experience includes a 13 month stint with IDIA (Increasing Diversity by Increasing Access to Legal Education) as Assistant Director, and a one year stint as an inaugural Chief Minister’s Good Governance Associate in Haryana. At CCS, Vineet handles legal research and advocacy work.

## Meaning Over Money

Original: https://www.spontaneousorder.in/p/meaning-over-money

Author: Spontaneous Order

Published: 2018-08-06T08:22:44.000Z

Topics: behavioral-economics, ikea-effect, motivation, labor-markets

> For almost half of my adult life, I was running a not-for-profit venture with a team of unpaid volunteers in the suburbs of Mumbai. Yes, the social enterprise was successful in transforming few lives and won a few accolades, but running around in Mumbai..

**Summary:**

Archit Puri reflects on his years running a nonprofit in Mumbai without pay, framing it not as irrational but as driven by meaning, per Dan Ariely's 'Payoff: The Hidden Logic That Shapes Our Motivations.' Ariely argues that people pursue complex, hard activities for lasting impact beyond financial gains. Key evidence is the IKEA effect: in an experiment, 'builders' who made origami valued them five times higher than 'buyers'; those without instructions, exerting more effort, valued them even more, as effort enhances self-identity and satisfaction. Ariely extends this to parenting, where parental investment amplifies love for children sharing their features. Puri critiques Adam Smith's view of labor as mere paycheck-for-drudgery exchange, noting its endurance but irrelevance today—tech giants like Amazon, Google, and Zappos foster motivation via meaningful environments, fun perks, and world-changing narratives. Applications extend to Indian politics: BJP and Congress use membership drives and victory signaling to make voters feel integral to success, not wasted votes. While not groundbreaking for behavioral economics veterans like Kahneman readers, the book offers accessible insights for motivators in any role.

**Key points:**

- The IKEA effect leads people to overvalue their partial creations, with builders pricing origami five times higher than non-builders.
- Greater effort, as in unstructured origami tasks, proportionally increases satisfaction and perceived value.
- Modern companies like Google and Zappos motivate employees through meaningful work and perks, rejecting Smith's dismal labor view.
- Political parties engage voters by framing participation as contributory to victory, leveraging the IKEA effect.

**By Archit Puri**

* * *

For almost half of my adult life, I was running a not-for-profit venture with a team of unpaid volunteers in the suburbs of Mumbai. Yes, the social enterprise was successful in transforming few lives and won a few accolades, but running around in Mumbai’s heat to help a few strangers without any monetary gain would surely be tagged as ‘irrational’ behaviour by any economist.

A fool’s errand, was it then? Perhaps not, is what Dan Ariely would claim. The central hypothesis of ‘Payoff: The Hidden Logic That Shapes Our Motivations’ is that to have a life of meaning and to create an impact which lasts beyond our own lifespans, we undertake activities that are complex and hard, even if they are not positively correlated with financial gains.

As is the case in most social science books (psychology in particular), the author, a behavioural economist from Duke University tries to illustrate his theory through a mix of research work and personal anecdotes.

In a fascinating experiment, Ariely and his colleagues divided participants into two groups. Members of the first group — the builders, had to create origami figures and put a monetary value on them, and members of the other group — the buyers, only had the task of attaching value to the same origami figures, without contributing to the making process. The researchers found out that the builders valued the origami figures five times more than the buyers! This is what the author calls the IKEA effect, a cognitive bias in which people place a disproportionately high value on products that they partially create. To drive the point home even further, those participants in the builder group who were not given instructions to create the origami figures valued them at even a higher price point than those who followed the instructions, as ones without the instructions spent more time and effort to figure out how to build their origami creations. The effort put into the making the product was directly proportional to the satisfaction derived by the maker; each of subsequent units of work put in kept enhancing the idea of ‘self’ in the makers. In the most profound part of the book, Ariely mentions how the love for our kids is a result of the IKEA effect, the labours of parenting as challenging they may be are taken up by parents due to their physical, monetary and emotional investment in the children. The fact that the kids tend to share aesthetic features with the parents also enhances the powers of this effect.

Ariely also scoffs at the Adam’s Smith view of Industrial labour, “From this industrial-era point of view, capitalism and labour were based on a simple equation: individuals needed and wanted stuff; companies made and shipped the stuff people wanted; labourers worked at dismal jobs for long hours so they could buy stuff. Workers were assumed to view work as unpleasant, but the reward was assumed to be so important (a paycheck) that it was worth suffering through to achieve it and then exchange it for stuff.” According to him, the idea has endured the test of time, but I beg to differ. As an illustration, the Amazons and the Googles of this world do not follow this simplistic view of labour. Most of these technology goliaths provide comfortable seating, a quirky-fun work environment, food which would fulfils more needs than just sustenance and use catchphrases like ‘we’re going to change the world’ to signal to their employees that the work they’re doing is not only meaningful but the value it delivers would perhaps exceed their tenure at the organisation or even the duration of their lifetimes. Ariely mentions this himself when he talks about Zappos, the American e-retailer.

The ideas mentioned in the book can also provide some useful fodder to discuss the workings of political organisations. Political parties in India including the BJP and Congress, through strategies like nation-wide membership drives and campaign communications which showcase that they are likely to be the winning party (even before the actual elections) indicate to the voter that his or her vote would mean something, it would not go wasted and that instead of simply being a mere contributor to the eventual electoral success, he/she would very much be part of the victory.

This book does not offer any new insights for those of us who have already dived into the world of behavioural economics through Ariely’s previous books or even explored the work of Daniel Kahneman in his must-read magnum opus, ‘Thinking, Fast and Slow’. ’Payoff: The Hidden Logic That Shapes Our Motivations’ offers a relatively short and leisurely read for anyone who is interested in positively engaging another person to complete a task, but then as Ariely quips in the book “whatever our official job descriptions, we are all part-time motivators.”

* * *

**About Archit Puri**

Archit Puri is a public policy researcher, freelance writer, former social entrepreneur, psychology enthusiast and tired of labels. He slogs as a Senior Associate at CCS to fund his daily bread. He tweets @bantofu

## Creating A Citizen-led Market for Welfare

Original: https://www.spontaneousorder.in/p/creating-a-citizen-led-market-for-welfare

Author: Spontaneous Order

Published: 2018-08-06T08:06:47.000Z

Topics: welfare-reform, tax-donation, cso-funding, citizen-choice

> Let citizens, not the state, decide the allocation of public money to civil society organisations. What is the best way to help others? Basically there are three options: Help myself — directly help others with my time, energy and money Help a charity

**Summary:**

Parth Shah argues that citizens overwhelmingly prefer direct self-help or charitable giving (options 1 and 2) over state-run welfare (option 3), as private approaches are more effective, personalized, and holistic, providing not just material aid but also moral and behavioral support that bureaucratic states cannot match. However, civil society organizations (CSOs) lack the state's taxing power, making their funding unpredictable and preventing reliance on them despite their superiority. To align principle with practice, Shah proposes a citizen-led market for welfare: allow every citizen to allocate x% of their direct tax dues directly to CSOs of their choice, sending (1-x)% to the government. This provides CSOs with stable public funding without state control, avoiding corruption and dependency. A public-private entity like India Swavalamban Sangathan (ISS) would rate and verify CSOs, enabling informed choices amid competing aggregators. Government schemes continue from remaining revenue for comparison. Over time, this scales CSOs into a vibrant, innovative ecosystem mirroring the economic market, supplemented by private philanthropy, shifting welfare toward citizen-driven options.

**Key points:**

- Citizens prefer self-help and charities over government welfare due to their customization and holistic support.
- CSOs lack reliable funding without taxation, hindering their potential dominance in welfare delivery.
- Allow citizens to allocate x% of direct taxes directly to chosen CSOs, creating public funding without state control.
- Establish rating agencies like ISS to verify and inform citizen choices among competing CSOs.
- This fosters a competitive 'welfare market' of scaled, innovative CSOs, rivaling the economic market.

**By Parth Shah**

* * *

Let citizens, not the state, decide the allocation of public money to civil society organisations.  
What is the best way to help others? Basically there are three options:

Help myself — directly help others with my time, energy and money  
Help a charity — give my time and/or money to a charity  
Help the State — give my money as taxes for the government to provide help  
When I ask which of the three ways is better for helping others, the overwhelming majority selects the options 1 and 2.

Hardly anyone chooses the third option of government-run welfare. Between the first two options, usually a younger audience prefers the first one and a more mature one, the second option.

In principle, private welfare is better than state welfare but hardly anyone wants to rely on it in practice.

Could the sensible in principle be made feasible in practice? Is it possible to re-imagine the welfare system where there is assurance of support to all who need it but which also depends more on options 1 and 2? Could we design a system that aligns the practice with the principle?

To guarantee support to all who need it, we cannot rely fully on individual efforts (option 1), we need organised effort (option 2). Instead of relying on the State, we would rely on civil society organisations (CSOs). We need to harness the diversity and depth of CSOs to ensure help for all.

Even the best-run welfare state would be bureaucratic, impersonal and most likely to employ a one-size-fits-all approach. It would lack customisation or personalisation and it would be unable to provide emotional, moral, socio-psychological or behavioural support. The CSOs could customise support to individual needs and provide not just material but also moral support that an individual requires to get back on his feet. This is the reason CSOs are preferred over welfare bureaucracy.

However, CSOs lack the one critical power that the State has: the power to tax.

Even though CSOs are superior in self-help delivery, we cannot rely on them since their funding is unpredictable. We cannot be certain that they will be able to raise all the necessary funding from philanthropy.

How do we ensure sufficient funding to CSOs? Certainly the funding would have to come from tax revenue. But the direct state funding of CSOs would create myriad problems — corruption, change in focus from the people to the funders, declining independence and effectiveness.

How could we increase public funding of CSOs without state control? Let citizens, not the State, decide the allocation of public money to CSOs. The CSOs receive “public funding”, not “state funding”.

We set a rule that every citizen could allocate x% of her annual tax dues to CSOs. Citizens pay direct and indirect taxes. Theoretically, it is possible to calculate the total of direct and indirect taxes that a citizen pays, so each and every citizen would have some money to allocate to CSOs. For the simplicity of exposition, let us just focus on direct taxes. So at the end of the year, I fill out my tax return and I send a cheque of (1-x)% to the government and “donate” x% of my taxes to CSOs of my choice.

The CSOs would have to compete for these “tax donations” by providing information about their work and effectiveness. A public-private entity, let us call it India Swavalamban Sangathan (ISS), could collect, verify and rate CSOs so that citizens can make informed choices.

One can visualise a variety of aggregators and rating agencies performing the information and guidance role over a period of time. No one agency would have a monopoly on information and rating, and ISS analysis will always be available to citizens.

The government can continue to provide welfare through various transfer and subsidy schemes as it does currently from the remaining tax revenue. Over time, we would be able to compare the effectiveness of state schemes with that of CSOs. As citizens become more involved in understanding the work of CSOs and their impact, many of them may begin to give their own funds to supplement the tax money they allocate, a very important indirect benefit.

The public funding would help CSOs to build scale, specialisation, and innovative solutions. Just as companies come in various shapes and sizes, the CSOs would also vary depending on the multitude of local and national factors. Some CSOs would be of the size of a large corporate and some of a start-up. What matters the most is the emergence of an ecosystem of CSOs that is as vibrant, innovative and effective as the ecosystem of enterprises. We would have a “welfare market” to match the “economic market”.

As CSOs get more funding from “tax donations”, they would become the dominant suppliers of welfare. The welfare system or rather the self-help system would rely more and more on the first two of the three options to help others — creating a citizen-taxpayer-led market for welfare.

The original article can be published [here](https://www.livemint.com/Opinion/uAmA7OmAt2empVaNsdOadJ/Creating-a-citizenled-market-for-welfare.html).

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## The Cursed Wonders of India

Original: https://www.spontaneousorder.in/p/the-cursed-wonders-of-india

Author: Spontaneous Order

Published: 2018-08-06T08:03:03.000Z

Topics: cultural-heritage, asi-reform, privatization, bureaucratic-failure

> Located near the Indo-Pak border of the Thar desert are the forgotten Kiradu temples of the Chalukya dynasty. Built in the 11th century, the temples, constructed in the Solanki style, are believed to be cursed. Legend has it that a Sage left a disciple ..

**Summary:**

India's ancient heritage sites, like the 11th-century Kiradu temples in Rajasthan—where only 5 of an estimated 108 remain despite a 2001 allocation of 110 lakh INR state funds and 50 lakh INR centrally sponsored—and Delhi's Mehrauli Archaeological Park, are crumbling under the Archaeological Survey of India (ASI)'s stewardship, which manages 3,650 monuments amid chronic bureaucracy, staff shortages, and red tape. The author highlights ASI's inefficiencies, contrasting them with successes like K.K. Muhammed's restoration of 200 Gurjara-Pratihara temples through unconventional partnerships, including with dacoits. Drawing from the UK's 2015 reform of English Heritage into an autonomous charitable trust with 80 million pounds government investment to achieve self-sustainability, the post argues from a classical-liberal viewpoint that the state should relinquish direct control. Instead, grant autonomy to bodies like ASI and INTACH to 'privatize conservation'—enabling them to raise philanthropic funds, leverage technologies, hire talent, and foster local partnerships, as seen in private museums and Udaipur's City Palace restoration. The unimplemented 1989 Mirdha Committee recommendation underscores the failure of government monopolies burdened by competing priorities, urging structural reform to preserve history as a trusteeship for future generations rather than condemning it to neglect.

**Key points:**

- Kiradu temples received 160 lakh INR in planned funding in 2001 but remain unrestored after 18 years under ASI care.
- ASI, established in 1861 and overseeing 3,650 monuments, is hampered by bureaucracy despite individual successes like K.K. Muhammed's temple restorations via local partnerships.
- UK's English Heritage was reformed in 2015 into an autonomous charitable trust with 80 million pounds to become self-sustaining through commercial and philanthropic funds.
- Grant ASI and INTACH autonomy to privatize conservation, raising private funds and partnering with communities, as recommended but ignored by the 1989 Mirdha Committee.
- Current state model is unsustainable; motivated private and autonomous players must be empowered to prevent heritage loss.

**By Rishika Yadav**

* * *

Located near the Indo-Pak border of the Thar desert are the forgotten Kiradu temples of the Chalukya dynasty. Built in the 11th century, the temples, constructed in the Solanki style, are believed to be cursed. Legend has it that a Sage left a disciple in the care of the village of Kiradu but his wishes were not fulfilled. Enraged he cursed the people, and the lands have been deserted since. The nearest town, Barmer, is but 35 kms. Once part of a thriving trade route from Kandhar to Kutch, Barmer seems a shell of its former glory. Looks are often deceptive though. In 2009, crude oil fields were excavated in the district, attracting several Big Oil businesses from Cairn to ONGC with ambitious projects and no dearth of resources. Today wealth flows like a river across this barren-scape. In fact, Barmer is also the site of the largest oil heist in India!

Naturally, the economic boost has also incentivised the local populace to explore professions beyond herding and farming. Barmer’s surviving nobility of the Sodha dynasty has chosen to expand into hospitality with a vision to build on the area’s natural diversity of sand-dunes, salt lakes and migratory birds, and on its cultural legacy of Mangniyaar and handmade block-print fabrics. While the temple complex features prominently in their itinerary, its dismal condition is a woeful tale for all. The structures are officially charged under the care of the Archaeological Survey of India (ASI) and, more recently, the Indian National Trust for Art and Cultural Heritage (INTACH). On paper, funds have been allocated over the years for their restoration. In 2001, the 20 Year Perspective Plan for Sustainable Tourism in Rajasthan Report released by the Ministry of Tourism noted, as part of catalysing tourism in Rajasthan, an allocation of 110.00 lakh INR under the State Plan, and an additional allocation of 50.00 lakh INR by Centrally Sponsored Schemes for the development and refurbishment of the Kiradu Temple Complex. The responsibility of this refurbishment was bestowed on ASI. And yet, 18 years on, of the estimated 108 temples, only 5 remain. The last time repair work was carried out here was in 12th century, under the patronage of the Chalukya ruler Bhima II.

[

![](https://substackcdn.com/image/fetch/$s_!KyJe!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fcaec62f5-8067-467b-a8ec-899d6487a240_300x169.jpeg)



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Ruins of the Kiradu Temple Complex, Rajasthan, 2017 | Source: Rishika Yadav

Why the complex remains ruinous despite the plentiful funding is a question for an RTI or PIL. Should it catch the attention of one of our many vigilant authorities, maybe a Committee will be appointed to investigate the matter. Although, as bureaucratic entanglements go, I suspect the curse of the raging Sage is responsible for this neglect.

Responsibility aside, Kiradu’s unfortunate fate is not unique. It is part of a larger narrative of crumbling histories spotting the country. Take the Capital for instance. The Mehrauli Archaeological Park is home to nearly a hundred monuments of the Sultanates of Delhi. The area, for the most part, is enclosed and has been allocated funds as part of ‘re-development’ projects by the Delhi Development Authority (DDA). Over the past two decades, these projects have, sometimes, solely been lead by DDA, sometimes by INTACH, and even a public-private partnership of both. The result? A rose garden, patches of maintained lawns with trails, and iron fencings around the more ‘significant buildings’. But the walls of the said buildings are badly damaged with engraved initials of lovers. Rajon ki Baoli which was once a source of water is now a stinky swamp, and the artistically tiled domes are now blackened. The Park itself is hard to find considering there is no sign board to welcome tourists. Only seasoned history walk-leaders can take you through the trail.

[

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Rajon ki Baoli, Mehrauli Archaeological Park, Delhi, 2018 | Source: Sanchit Khanna, HT PHOTO

The sardonic twist in this particular narrative is that several of these monuments fall under the care of ASI — the very same ASI that is also responsible for the Qutub Complex, a UNESCO World Heritage, with which the Mehrauli Archaeological Park shares a lengthy boundary wall. Even the dead can’t escape the misfortunes of State control.

But then again, why should one care about dead kings and rotten buildings? Never mind the lakhs of crores of taxpayer money being ‘invested’ in their conservation, why should one care? Never mind the capacity of these monuments to boost tourism and diversify the economic spectrum of local populations, why should one care? Never mind the all-engulfing rage over ‘ownership’ of history every time Sanjay Leela Bhansali directs a movie, why should one care? Never mind that Italy, a country smaller than the state of Rajasthan, has the highest number of World Heritage Sites, why should one care?

Dead men tell no tales, why care indeed.

“\[…\] It has been most truly said at our meetings that these old buildings do not belong to us only; that they have belonged to our forefathers, and they will belong to our descendants unless we play them false. They are not in any sense our property, to do as we like with. We are only trustees for those that come after us. So I say nothing but absolute necessity can excuse the destruction of these buildings; and I say, further, that such a necessity has never yet existed in our time.” — William Morris, Address at the Twelfth Annual Meeting, Society for the Protection of Ancient Buildings, 1889.

A few years ago, United Kingdom found itself in a similar fix. Through the decades, UK had seen the formulation of several bodies to conserve the ‘assets’ of the country. The jumble of responsibilities between the various departments was all too real. In 1983, these numerous bodies were dissolved and re-constituted under a single commission, the English Heritage. Over the years, the office became responsible for built, material, and archival heritage, and even acquired responsibility for submerged ‘historic wrecks’ 12 miles off the English coast.

By 2010 however, the body was sustaining an annual deficit and the global recession was prompting budget cuts. As a country proud of its history and with a non-negotiable attitude on its preservation, the government found itself crumbling under this weight. To ease the burden, in 2015, the English Heritage was converted into a charitable trust of the same name and alloted a government investment of 80 million pounds. While the properties and heritage collections remain under Public ownership, the trust now has control over its finances and considerable autonomy in raising commercial and philanthropic funds. In exchange for the generous investment, the trust has proposed an ambitious eight year program to convert itself into a self-sustaining institution that acts as an advisory body to the Historic Buildings and Monuments Commission for England.

As Ed Vaizey, the then Minister of Culture expounded, “The consultation outlines how Historic England will look to get the heritage protection system to work better for owners, developers and infrastructure providers, reduce unnecessary bureaucracy and red-tape and support growth without reducing protection for heritage.” Although India is ridden with her own peculiar problems, there is value in the English lesson.

ASI has a history that pre-dates the Republic of India. Established in 1861, ASI is currently responsible for over 3,650 monuments of ‘national importance’, carries out excavations throughout the country, maintains a total of 44 museums and 7 publications and the National Archives of India — additionally, it routinely suffers budget cuts. ASI is also well-known for being plagued with a paucity of technical staff, manpower, resources, ill-advised transfers, and the usual red-tapism. Despite the limitations, to say that ASI is failing in entirety or has a lack of talent is bit of a stretch.

K. K. Muhammed, former Regional Director (North) of ASI, has several excavations to his credit. Of these, perhaps the most exciting project of all was a set of 200 temples, constructed between 9th to 11th CE by the Gurjara-Pratihara dynasty, that lay waste and was home to the Gadariya dacoits of the Chambal ravines. With no police protection and no guarantee of safety, the ASI team proceeded with the project. To ensure its success, Muhammed managed to get an audience with Nirbhay Singh Gujjar, the most wanted dacoit of the time who had 205 criminal cases to his name and ran a parallel government in 40 villages. He convinced the bandit of his responsibility to protect the temples by telling him of his ‘long lineage’ stemming from the Pratihara dynasty. With Gujjar’s death in 2005, Muhammed now had to deal with the mining mafia encroaching the region and he still had little police protection. In fact a Superintendent was shot dead at the Complex and another narrowly escaped with his life. On several occasions his team was ‘roughened up’ by the mafiosos. Unable to get the concerned authorities to intervene, as a final resort Muhammed wrote to the then RSS Chief K. Sudershan — and it took but 24 hours to get the wheels turning. In January of 2017, the restoration of all 200 temples was successfully completed, all thanks to an unrelenting man and his commitment to history. Indiana who?

The zeal is real, be it in ASI or INTACH or UNESCO or local communities. People do care but the mounting bureaucratic paperwork and the subjugation of initiative within this paperwork is a serious hindrance. Autonomy is the need of the hour.

Let me be clear though — what is being proposed here is not contracting the monuments. To contract a property, one must first have ownership of it. And as Morris aptly put it ‘they are not in any senses our property’. The idea is to privatise conservation, to give organisations like ASI and INTACH autonomy to harness the best possible technologies, to hire the right people, to raise philanthropic funds, to foster partnerships with local communities such as the noble house of Sodha and the dacoits of the Chambal valley — all to preserve our many histories, and to do so expeditiously.

This proposition itself is not a novel concept for India. Variations of it exist throughout. The past decade has witnessed the rise of private museums, such as the Kiran Nadar Museum of Art, constructed under the patronage of India’s business elite. In 2007 the Maharana Mewar Charitable Trust led the restoration of the Udaipur City Palace with funding from The Getty Foundation, USA and the Ministry of Culture, GOI. The Palace now houses a museum, a library, and a research institute.

In fact, granting independence to ASI is also not a new suggestion. The Mirdha Committee recommended that ASI be made autonomous and accorded the status of a scientific and technical institution — a suggestion that was accepted by the Government of India in 1989 but, 29 years later, this has still not been implemented! Rules yeah?

The model we currently have is neither sustainable nor effective. It is failing us, our ancestors, and our children. And why should it not? Consequent governments of free India have been consistently burdened with social responsibilities of healthcare, education, defence, financial self-sufficiency, and more. It is not surprising then that heritage is not too high on priority.

With this structural paradox in mind, it is time for the State to clean house and give motivated players a chance to ameliorate the cursed wonders of India.

Or must we be condemned to a suburban dystopia?

\*\*\*

*REFERENCES*

1\. Ferguson, A.F. & Co. (2001). 20 Year Perspective Plan for Sustainable 20 Year Perspective Plan for Sustainable Tourism in Rajasthan. Department of Tourism. Ministry of Tourism, Art and Culture. Government of India.  
2\. Brightman, M. (2012), Is the Conservation of the United Kingdom’s Built Heritage Sustainable?, Reinvention: A Journal of Undergraduate Research, British Conference of Undergraduate Research 2012 Special Issue, Retrieved April 7, 2018: www.warwick.ac.uk/go/reinventionjournal/issues/bcur2012specialissue/brightman.  
3\. Department for Culture, M. a. (December 2013). English Heritage New Model: Consultation .  
4\. Morris, W. (1989, July 3). Address at the Twelfth Annual Meeting — SPAB. Retrieved April 2018, from https://www.marxists.org/archive/morris/works/1889/spab16.htm  
5\. Rozario, J. (1217, April 12). Keeping Heritage Alive. Retrieved April 7, 2018, from Press Reader: https://www.pressreader.com/india/marwar/20170412/282213715670883  
6\. Srivathsan, A. (2007, July 21). Heritage at stake, strengthen the ASI . Retrieved April 7, 2018, from The Hindu: http://www.thehindu.com/todays-paper/tp-opinion/Heritage-at-stake-strengthen-the-ASI/article14800626.ece  
7\. Tripathi, S. (2012, June 01). Man of Monuments . Retrieved from The Hindu: http://www.thehindu.com/features/metroplus/man-of-monuments/article3480525.ece

* * *

**About Rishika Yadav**

Rishika is a jack of all trades and a Master in history. She has completed her post-graduation in International History from the London School of Economics and Political Science (LSE). An avid writer by passion, she enjoys composing poetry and has self-published novels.

## Separation of Powers: Why the government’s role as the regulator must be separated from the provider of education

Original: https://www.spontaneousorder.in/p/separation-of-powers-why-the-governments-role-as-the-regulator-must-be-separated-from-the-provider-of-education

Author: Spontaneous Order

Published: 2018-08-06T07:51:49.000Z

Topics: separation-of-powers, education-regulation, government-schools, rte-act

> If you have given your board examinations of class 12 in India, then you are certainly aware that your answer paper was not evaluated by your teachers. After the examination, the answer papers were bundled-up and distributed randomly amongst evaluators ..

**Summary:**

In India's education system, government officials like the Education Secretary, DEOs, and BEOs simultaneously perform the conflicting roles of 'provider' (administering government schools) and 'regulator' (enforcing policies on all schools), mirroring the bias prevented in board exam evaluations where teachers do not grade their own students. This conflict disincentivizes self-regulation: officers remedy violations in government schools as providers and hide discrepancies rather than report them, leading to only 6.4% of government schools adhering to RTE infrastructure norms with zero shutdowns. In contrast, private schools face strict enforcement, including numerous shutdowns or threats for similar violations. The author, from a classical-liberal viewpoint, argues for separating these roles to shield regulatory duties from provider interests, enabling objective oversight akin to random paper assignment, ultimately improving accountability and education quality without government self-protection undermining standards.

**Key points:**

- Government education officers cannot effectively regulate their own schools due to role conflicts, resulting in hidden violations instead of enforcement.
- Only 6.4% of government schools comply with RTE infrastructure norms, with no reported shutdowns, unlike private schools facing frequent closures.
- Separate provider and regulator roles in education governance to prevent bias, similar to random assignment of board exam papers to evaluators.
- This separation would incentivize officers to objectively enforce policies across all schools, enhancing overall accountability.

**By Alston DSouza**

* * *

If you have given your board examinations of class 12 in India, then you are certainly aware that your answer paper was not evaluated by your teachers. After the examination, the answer papers were bundled-up and distributed randomly amongst evaluators (perhaps, even in far off towns!) to reduce the likelihood of your own teacher evaluating your answers. The rationale behind this process was two fold. First — it reduced your ability to favourably influence the evaluator of your papers (because you did not have access to them), and second — it prevented your teacher’s bias towards/against you from influencing your score.

Although it is the teachers who are ultimately the ‘evaluators’, their interests as a teacher (say: “my student must score well in the board examinations!”) must be prevented from influencing the execution of their duty (objectively evaluate papers) as an ‘evaluator’. Random assignment of papers creates this possibility by not giving teachers the power to evaluate their own students’ paper. It not only relieves them of the ‘obligation’ to evaluate favourably, but also prevents any possibility of being under duress to increase scores. While the teacher is evaluating the papers, he performs the role of an ‘evaluator’, whose performance is distinctly separated and isolated from their innate interests of being a teacher. This is the concept of separation of roles, where the performance of one role (evaluator) is shielded from being influenced by the interests the person holds from other roles (such as that of the teacher).

Similarly, in the governance structure of the education system of India, same person is required to simultaneously perform the roles of ‘provider’ and ‘regulator’, without any provision to shield the interests of one role from influencing the other. Take the example of the Education Secretary, District Education Officers (DEO) and Block Education Officers (BEO).

The provision and regulation of education at the state level is under the Ministry of Education as it oversees all education related activities. The Ministry performs its duties through the executive wing, which is headed by the Secretary of Education. The Secretary is the administrative head of the Ministry, and is answerable to the Minister of Education. The Secretary has to formulate the policy for all educational activities at the state level, and thereby, is required to play the role of a ‘policy-maker’. He is also responsible for the administration of education sponsored by the state government, and thereby, plays the role of a ‘provider’. He also has to ensure that, all the providers of education (government and private) follow the policy as laid down by him, and thereby, plays the role of a ‘regulator’.

The roles of the Secretary as a ‘regulator’ and ‘provider’ are executed through the actions performed by Director of Education (DoE) and the subordinate officers. The DEOs and BEOs are the subordinate officers, and foot-soldiers of the DoE, who oversee the administration of government schools, and thereby, execute the ‘provider’ role of the Education Secretary. They are also required to ensure that the policy is adhered to by all providers (government and private), and thereby, execute the ‘regulator’ role of the Secretary.

In the execution of the role of a ‘provider’, the officers are expected to conduct the administration of government schools as per policy, by providing infrastructure, textbooks, staff, finances etc, and ensure the consistent presence of teachers in schools, and their engagement in teaching. In their execution of the role of a ‘regulator’, the officers have to inspect schools to ascertain all the provisions are met and enforce disciplinary action against the administrators of the school for the violation of policy.

Consider the situation of a policy violation by the government schools, which require the intervention by the regulators of education. The ‘regulators’ (the officers) are expected to intervene, and take necessary action against the administrators (who are also the officers!) for the policy violation by their school. Basically, the officers are required to take action against themselves! This is untenable because the details of the action taken against themselves are to be relayed to the DoE and the Secretary by the same officers.

It is worth wondering why without independent oversight, someone first take action against themselves, and then, shoot themselves in the foot by relaying to their bosses their bad job at providing education? With so much power, it would be wiser for the officers to intervene in the role of a ‘provider’ to remedy the violation, and hide the discrepancies from his bosses.

The dynamics in case of policy violations by private schools are different. The ‘regulators’ (the officers) are expected to take action against the administrators (the individual school owners). In this case, the officers, when playing the role of a ‘regulator’, are not conflicted and can take appropriate action against the school owners. This situation does not dis-incentivise the officers from reporting the violation and taking necessary action.

The same incentive structure is applicable to the Education Secretary as well. As he is responsible for the government-provided education, in order to remedy policy violations by the government schools, he would inevitably intervene in the role of a ‘provider’ and not as a ‘regulator’. It would be in his best interest to intervene and stealthily resolve the violations, rather attracting attention and causing embarrassment to his department.

The incentive structure manifests itself in the fact that only 6.4% of government schools have adhered to RTE infrastructure norms, and there is not even a single reported shutdown of a government school down for their violation. For the same violations by private schools, we see numerous reports of schools being shut down or being threatened to shut down. The education officers perform an excellent job when they are not required to take action against themselves. Therefore, like the teachers are relieved of their interests when performing the roles of an evaluator, we need to relieve the officers of the conflicting interests that arise while simultaneously executing of the roles of a provider and regulator.

* * *

**About Alston DSouza**

Alston completed his bachelors degree in engineering from National Institute of Technology Karnataka. He worked at the grassroots with Prayog in Bihar, as a part of the India Fellow Social Leadership program. Always keen to understand the world within theoretical constructs, he is inclined towards research at CCS. He likes to read non-fiction and research on the ideas of atheism and Humanism.

## Bank Privatisation is Not Necessarily the Solution

Original: https://www.spontaneousorder.in/p/bank-privatisation-is-not-necessarily-the-solution

Author: Spontaneous Order

Published: 2018-08-06T07:42:31.000Z

Topics: bank-privatization, public-sector-banks, banking-governance, economic-reform

> A lot has been written on this topic after the PNB/Nirav Modi scandal. I believe strongly in the private sector and I was a part of the HDFC Bank story (which is the best example of what a private sector bank should be). But I am wary of screaming for t..

**Summary:**

Luis Miranda supports privatizing India's public sector banks (PSBs) but cautions against doing so solely due to recent scams like PNB/Nirav Modi, as private banks like ICICI, Global Trust Bank, Barings, Citibank, Bear Stearns, Lehman, and Bernie Madoff have also faced scandals and failures. He argues from a classical-liberal viewpoint that PSBs should be reduced from their dominant 67% market share—far above the global average of 33%—because private failures burden shareholders, while PSB failures impose costs on all citizens, as seen in Air India's bailouts. Scholarly research shows private banks deliver higher productivity and growth. However, deliberate neglect of PSBs erodes their value at public expense, akin to backdoor privatization in aviation. Miranda urges fixing governance first: freeing bank managements from politicians and bureaucrats, improving pay and promotions, holding Finance Ministry officials accountable like private owners, and ending witch hunts against borrowers and efficient PSB executives. Blind privatization or jailing managers ignores the core governance flaws, risking economic growth; focus reforms there to enable proper privatization.

**Key points:**

- Private sector banks are not scam-free, citing examples like ICICI-Videocon, Global Trust Bank, and global failures such as Lehman Brothers.
- PSBs' 67% market share (vs. global 33%) burdens citizens with failures, unlike private banks where shareholders bear losses.
- Scholarly research confirms private banks achieve higher productivity and growth than PSBs.
- Fix PSB governance by insulating management from political interference, improving pay/promotions, and holding politicians accountable before privatizing.
- Avoid witch hunts against PSB borrowers and managers, as many executives are efficient and the problem is governance, not personnel.

**By Luis Miranda**

* * *

A lot has been written on this topic after the PNB/Nirav Modi scandal. I believe strongly in the private sector and I was a part of the HDFC Bank story (which is the best example of what a private sector bank should be). But I am wary of screaming for the privatisation of public sector banks (PSBs) purely because of the recent lending scams. Yes, I support bank privatisation, but the reasons have to be right; to assume that private sector banks are scam-free is not correct.

The private sector is definitely not scandal free. ICICI Bank is currently under investigation for alleged related party transactions related to Videocon. Many years back Global Trust Bank had to be merged into Oriental Bank of Commerce after a host of scandals. And during my banking days I saw how leading global private sector institutions like Barings and Citibank were hit by fraud or bad loans. More recently we saw global private sector giants like Bear Sterns and Lehman collapse and saw how Bernie Madoff perpetuated a fraud for over 15 years. All examples of private sector failures.

Of course there are many reasons why banks should be privatised. Parth Shah, President of the Centre for Civil Society, makes a valid point — when private institutions fail, the shareholders lose their money; but when public institutions fail the loss is borne by all of us citizens. Look at how much the Air India bailout has cost us. Secondly, public sector banks account for about 67% of the banking sector in India. Ruchir Sharma, Morgan Stanley’s Head of Emerging Markets and Chief Global Strategist, states that across the world this share is about 33%. Hence the share of the PSBs in India has to be brought down. Currently it is being done through deliberate neglect of the PSBs; this neglect (a form of backdoor privatisation of the banking sector, like what we saw in the civil aviation sector) erodes their value, which again is a hit that the citizens of India have to bear. Finally, Arvind Panagariya, former Vice Chairman of NITI Aayog, recently wrote that scholarly research has shown that private sector banks have delivered higher productivity and growth than PSBs.

But by saying that privatisation alone is not the solution doesn’t mean that PSBs should be allowed to carry on the way they do. Changes have to be made and everyone knows what has to be done. The previous RBI Governor, Raghuram Rajan, once told me that politicians know what has to be done. The problem is that that if they did what they know has to be done, they fear that they may not get reelected.

Bank managements have to be freed from the clutches of the bureaucrats and politicians, who know nothing about banking. Tamal Bandyopadhyay, Consulting Editor at Mint, recently wrote about the problem with transfers and promotions at PSBs and also about the poor pay of PSB management. Many years back I was at a meeting to see if we would buy a 10% stake in Air India. I declined and was questioned about it by a senior Secretary. My response was that a 10% stake would not give us any meaningful say in blocking the interference in management by the government and the value of our investment would erode very soon. Seeing what has happened to Air India over the past 15 years has vindicated that stand.

We have seen how owners of institutions hit by scams or frauds have either been jailed or have had to flee the country. Why can’t we do the same for the owners of scam-tainted PSBs also? Shouldn’t some of the officers in the Finance Ministry go to jail for mismanagement of PSBs like PNB? Unfortunately, there is no level-playing for governance and accountability between the private and public sectors in India.

What is most worrying is that instead of fixing the governance problem in PSBs, there is a witch hunt against the borrowers and the management teams in PSBs. This has led to a shutdown at the PSBs (another example of deliberate neglect of the PSBs, to the advantage of private sector banks) and a fear that economic growth will be further impacted. There are some very efficient executives in PSBs (foreign and private sector banks have recruited from the PSBs for decades). To assume that all PSB employees are crooked or inefficient is an insult to so many great and passionate PSB bankers, like the ones at State Bank of India.

The problem lies with the governance of these PSBs, and not with crooked borrowers or bad bank managers. Let’s focus on that, instead of only throwing a clutch of people into jail or blindly privatising a few PSBs.

* * *

**About Luis Miranda**

Luis Miranda connects dots. He started investing in India’s infrastructure a long, long time ago. He started IDFC Private Equity and was earlier a part of the start-up team of HDFC Bank. Luis has invested in and has been on the boards of companies like GMR Infrastructure, L&T Infrastructure, Delhi International Airport, Gujarat Pipavav Port, Gujarat State Petronet, and Manipal Global Education. Luis today spends most of his time, together with his wife, on non-profits. He is Chairman of CORO and Centre for Civil Society and Managing Trustee for Nadathur Trust. Other organisations include 17000 Ft Foundation, SNEHA, Muktangan, Sunbird Trust and Samhita Social Ventures. Luis graduated with an MBA from Chicago Booth and is a Chartered Accountant.

## Rules of Inheritance: Supreme Court Chamber Allotment

Original: https://www.spontaneousorder.in/p/rules-of-inheritance-supreme-court-chamber-allotment

Author: Spontaneous Order

Published: 2018-08-06T07:18:26.000Z

Topics: supreme-court-chambers, article-14, inheritance-rules, classical-liberalism

> What is Rule 7B of the Supreme Court Chamber Allocation Rules? As per the SC Chamber Rules, last amended in 2007, “[i]n case of death of allottee of a [Supreme Court Lawyers’] chamber, his son/daughter/spouse, if an advocate, may be allotted the said

**Summary:**

Rule 7B of the Supreme Court Chamber Allocation Rules, amended in 2007, allows the son, daughter, or spouse of a deceased allottee— if an advocate practicing in the Supreme Court—to inherit the chamber, bypassing standard criteria like minimum appearances and seniority outlined in a 2017 notice. These chambers, numbering only a few hundred in prime locations near the Supreme Court, confer significant professional credibility amid thousands of advocates. A petition by Vishnu Shankar Jain challenges Rule 7B as unconstitutional under Articles 14 and 19(1)(g), alleging discrimination and violation of level playing field. Constitutionally, under Article 14's reasonable classification doctrine, the rule fails: while distinguishing heirs from others is intelligible, it lacks rational nexus to the rules' objective of merit-based allocation via seniority and appearances. From a classical-liberal perspective, chambers are public property owned by the Supreme Court; allottees receive only a revocable license to use, not ownership, subject to fees, usage restrictions, and termination conditions. Inheriting such a license contravenes fair equality of opportunity and exacerbates undeserved inequality, as liberals permit inheritance of personal wealth but not rights in public goods. Thus, Rule 7B violates both constitutional equality and classical-liberal principles.

**Key points:**

- Rule 7B permits heirs (son/daughter/spouse who are SC advocates) to inherit chambers upon allottee's death, overriding merit criteria like appearances and seniority.
- The rule fails Article 14's reasonable classification test due to no rational nexus between heir status and allocation objectives.
- Supreme Court chambers are public property granting only a temporary license, not inheritable ownership.
- Inheriting public good licenses undermines classical-liberal goals of fair opportunity and reducing undeserved inequality.

**By Vineet Bhalla**

* * *

What is Rule 7B of the Supreme Court Chamber Allocation Rules?

As per the [SC Chamber Rules](http://sci.gov.in/ChamberAllotment/application/instructions/allotmentoflawyerschambersrules.pdf), last amended in 2007, “\[i\]n case of death of allottee of a \[Supreme Court Lawyers’\] chamber, his son/daughter/spouse, if an advocate, may be allotted the said portion of the chamber if the Allotment Committee is satisfied that such person is practising in the Supreme Court.”

Ordinarily, lawyers’ chambers in the Supreme Court are allocated on the basis of certain eligibility criteria [prescribed by a notice from the apex court dated 31 October, 2017](http://sci.gov.in/ChamberAllotment/application/instructions/notice.pdf). These include minimum number of appearances as well as relative seniority of the applicants.

What is the value of Supreme Court chambers?

Supreme Court chambers are an extremely valued and limited resource among the thousands of advocates that ply their trade within this hallowed institution. These few hundred chambers, located in prime spots within and in the vicinity of the Supreme Court complex offer a professional boost to the advocates who occupy them by lending instant credibility to these advocates in the eyes of their clientele, by virtue of practising in such premium proximity of the Supreme Court. This makes them a prized possession for the thousands of advocates who practice in the Supreme Court, and which is what necessitated the SC Chamber Rules laying down clear criteria for the allocation of these chambers among advocates.

The impugned petition does not challenge the reasonability of these criteria, but merely Rule 7B, which acts as an exception to these criteria. The challenge is made on grounds of unconstitutionality of the Rule, as it is alleged that the Rule “is patently discriminatory and violative of Article 14 of the Constitution of India as it is violative of the rule of seniority and minimum number of appearances that is prescribed for other advocates”, and is also violative of “the principle of level playing field for professional advocates who otherwise satisfy the relevant criteria, thereby violating their rights under Article 14 and Article 19 (1)(g) of the Constitution of India”. \[Quotes are from the prayer of the petition, which the petitioner Mr Vishnu Shankar Jain was kind enough to share with us\]

This post shall first examine the constitutionality of the Rule from the vantage point of Article 14. We will then attempt to determine where this Rule stands vis-à-vis classic liberal principles.

Constitutional analysis

Article 14 of the Indian Constitution simply states that “\[t\]he State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India”. The meaning of this terse proclamation has been clarified by the Supreme Court in various contexts over the years.

One such significant clarification about the meaning of this provision is the doctrine of reasonable classification. This doctrine simply means that it is legally permissible to classify persons or things for the application of law, as long as the law in question is reasonable and not arbitrary. This is because ‘equality is antithetical to arbitrariness’.

How does one determine whether a classification is reasonable or not? According to the Supreme Court, it must fulfil the following two tests: (1) that the classification is founded on an intelligible differentia and, (2) that differentia has a rational relation to the object sought to be achieved by the impugned legislative or executive action.

Looking at Rule 7B through this two-pronged test, it is evident that the rule makes a classification between advocates practising in the Supreme Court whose spouse/parent has been allotted a Supreme Court lawyer’s chamber, and other advocates practising in the Supreme Court, for preferential allotment of the chamber. The differentia is intelligible and clear enough. Does this differentia have a rational nexus with the objective of the Rules?

The Objective of the Rules is to lay out unambiguous criteria for the allocation of the scarce resource of Supreme Court lawyers’ chambers among advocates practising in the Supreme Court, and establish conditions for the operation of the allotment. The allocation criteria, as we have noted earlier, are based on factors such as seniority and number of appearances. Whether one’s spouse or parent is an allottee of a chamber is not among these factors. Hence, Rule 7B fails the rational nexus test, and does not seem to provide a reasonable classification.

Thus, it seems that the primary contention in the petition is correct, and Rule 7B is indeed unconstitutional by being in violation of Article 14 of the Constitution.

Classic liberal analysis

To begin an examination from a classic liberal lens, it is vital to note at the outset that the property in question, that is, the Supreme Court Lawyers’ Chambers, is owned by the Supreme Court of India. To that extent, it is public property. When specific chambers are allocated by the Court to specific advocates, it is not the ownership of the chamber that is passed on to the advocate, but merely a license to use it. This license to use is limited by the SC Chamber Rules (through, for instance, prescription of security deposit before allotment and license fee along with service and maintenance charges for continuation of allotment, prescription of usage of chambers only as Lawyers’ Offices, prohibition of transfer, alignment or sub-letting the chamber to any other person, prohibition of unauthorized construction within the chamber premises, prescription of chamber usage timing, and conditions under which allotment shall be terminated).

The question that, then, arises is: whether the license to use a public good is inheritable from one’s parent/spouse?

Most classic liberals [agree on the principle](http://fs2.american.edu/dfagel/www/Class%20Readings/EqualityIssues/LIBERAL%20EQUALITY%20AND%20Inherited%20Wealth.pdf) that one should be able to pass on one’s personal wealth, power and access to leisure to one’s kin. However, in this case, it is not the permanent ownership of the property in question that is bestowed upon the allottee-advocates, but only a temporary license to use it. This license is not vested for perpetuity either. Since the property is not owned by the allottee, the question of passing it on does not arise altogether. Rendering a personal inheritable right in a public good will be in violation of the liberal pursuit of fair equality of opportunity, as well as to [lessen inequality of undeserved wealth](https://poseidon01.ssrn.com/delivery.php?ID=689110098112005011031018067000074075039006014007064066093069078069026019112003080081038035000043106003046070031115084085084118027053082084022067070118094116102065120084047038089079118001079025086124025023117093104065102113069114075067080073066091019112&EXT=pdf).

Hence, Rule 7B is in contravention of classical liberal principles as well.

* * *

**About Vineet Bhalla**

Vineet Bhalla holds a B.A., LL.B. (Hons.) degree from the W.B. National University of Juridical Sciences, Kolkata. He has been a Fellow with Make A Difference from 2012–15, and was one of the inaugural Pratiti Fellows with People for Parity in 2015. His previous work experience includes a 13 month stint with IDIA (Increasing Diversity by Increasing Access to Legal Education) as Assistant Director, and a one year stint as an inaugural Chief Minister’s Good Governance Associate in Haryana. At CCS, Vineet handles legal research and advocacy work.

## Do We Really Need Board Exams?

Original: https://www.spontaneousorder.in/p/do-we-really-need-board-exams

Author: Spontaneous Order

Published: 2018-08-06T07:11:43.000Z

Topics: board-exams, exam-leaks, education-reform, student-assessment

> Karnataka’s state board couldn’t stop the chemistry exam paper from walking out on 21 March. The exam was rescheduled to 31 March and the paper was leaked again! Now it’s scheduled for 12 April. What do you think would happen on the 12th? These pape

**Summary:**

Karnataka's state board chemistry exam paper leaked on 21 March, was rescheduled to 31 March and leaked again, now set for 12 April, with authorities absurdly banning WhatsApp instead of punishing officials. State boards suffer routine leaks due to heavy political and bureaucratic control, unlike infrequent CBSE leaks and rare ones in autonomous private boards like ICSE and IB. From a classical-liberal view, the solution lies in institutional reform: granting state examination boards full independence and autonomy, with a senior officer personally accountable for paper security. Technology offers further protection, such as CBSE's banking vans for secure transport, on-site printing, or Kindle-like devices transmitting papers digitally upon student entry—potentially a profitable venture given India's vast exam volume. Board exams impose unbearable pressure, fueling coaching rackets, leaks, and student suicides, while merely testing rote memory amid inconsistent evaluation. They serve little purpose since colleges rely on entrance tests anyway; better alternatives include SAT-style aptitude tests combined with school internals or portfolio assessments incorporating projects and extracurriculars. Immediately, colleges should set minimum qualifying board marks and select from qualifiers, easing trauma in this high-stakes system.

**Key points:**

- Grant state examination boards full independence and autonomy with a senior officer accountable for paper security to curb routine leaks.
- Deploy technology like secure banking vans, on-site printing, or digital Kindle devices to deliver exam papers directly in halls.
- Replace board exams, which test rote memory, with SAT-style aptitude tests, internal assessments, or portfolios including projects and extracurriculars.
- Colleges should declare minimum qualifying board marks and select qualified students via entrance tests to reduce pressure and suicides.

**By Parth Shah**

* * *

Karnataka’s state board couldn’t stop the chemistry exam paper from walking out on 21 March. The exam was rescheduled to 31 March and the paper was leaked again! Now it’s scheduled for 12 April. What do you think would happen on the 12th? These paper leaks are routine at state boards and cause serious distress to millions of students in the state.

Let’s take a look at the solution provided by the Department of Pre-University Education. They have banned the use of WhatsApp to stop the paper from being leaked on 12 April. A cruel joke on students and parents as no one in the department would get punished for the leak if it were leaked again.

Apart from the state boards, CBSE, ICSE, IB (International Baccalaureate) are the other secondary education boards. State boards leak routinely, CBSE infrequently and ICSE and IB rarely ever.

So, what’s the reason for this disparity? The same reason that explains the difference in the leakage in bathrooms of the government, PSUs, and the Barista. The degree of the control by politicians and bureaucrats, in other words, the degree of autonomy and independence makes the difference.

CBSE is an autonomous and independent body but comes under the ambit of the Ministry of Human Resource Development (MHRD). ICSE and IB are private boards. So, to minimise these paper leaks, the first step is institutional reform. Make state examination boards independent and autonomous. And make a senior officer responsible for the security of exam papers; we should know whose job is on the line if a paper is leaked.

Using Technology  
Instead of banning WhatsApp, modern technology could be a powerful tool to protect exam papers. CBSE uses the banking system to securely transport their exam papers, may be the same vans that carry cash to ATMs. One can imagine the exam paper delivered to a printer in the exam hall after the students have taken their seats. Or as each student enters the exam hall, a simple Kindle-type of reading device is given on which the paper is transmitted via the net.

Given the number of exams that India conducts for school boards, entrance tests for management and engineering colleges, special exams for college admissions in Honours Courses, exams for various government services, supplying Kindle-type simple readers could be a profitable business. Here is an idea for our politicians and bureaucrats to earn a little honest money!

The paper leak is a huge money maker precisely because the future of millions of students is riding on how well they do in these exams. Along with private tuitions and coaching classes, they are willing to pay thousands or lakhs to do well in the exams. If a single exam is going to determine your life, what would you be willing to pay to succeed? The unbearable pressure to succeed is also the reason for increasing student suicides.

Holistic Assessment of Students  
Are there better ways to assess the capabilities of students? Very few countries in the world hang the lives of their young ones on a single exam pole. SAT type of aptitude tests combined with internal school exam results could provide a basis for college admissions. The portfolio method — that includes internal marks, projects, extra-curricular activities — could be a better method to assess students.

Why do we need board exams? The argument is that we need a uniform scale to assess millions of students. It was meant to make the college admissions committee’s job easier. Just one look at a number told you whether the student would be given admission or not. But that was before entrance tests became a standard. Colleges don’t seem to or want to trust the board results. If colleges are going to design their own assessments, why torture students with board exams?  
We must also ask what board exams really measure. It is generally agreed that these exams are just memory tests and don’t test students on their grasp of the subject. Add to this the disinterest and consistency of the overworked and poorly paid teacher-evaluators. What is the real difference between a student who scored a 90 someone with 98? Just the dance of lady luck!

The immediate solution could be for a college to declare the minimum qualifying marks and then select from all those who meet that criterion. That would be fairer and less traumatic with far fewer suicides. Our children could expect at least that much from the mai-baap sarkar.

The article can be accessed [here](https://www.thequint.com/voices/opinion/chemistry-paper-leak-in-karnataka-do-we-really-need-board-exams).

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## End of Time?

Original: https://www.spontaneousorder.in/p/end-of-time

Author: Spontaneous Order

Published: 2018-08-06T07:06:08.000Z

Topics: free-speech, offence-principle, philosophy, censorship

> To say that freedom of expression should be curtailed lest it offend or hurt the sentiments of people, or some people, implicitly accepts a ludicrous postulate: that all facts and truths that mankind ought to know have been known, and any new exposition..

**Summary:**

The post critiques the Offence Principle, which seeks to curtail freedom of expression to avoid offending sentiments, as it rests on the absurd assumption that all facts and truths humanity needs to know are already discovered, rendering any new ideas mere distortions. This view embodies hubris and complacency, stifling intellectual progress. From a classical-liberal standpoint, such restrictions would banish philosophy and serious contemplation altogether. The author invokes Bertrand Russell's 'The Problems of Philosophy' to underscore philosophy's value: it is studied not for definite answers, which are rarely certain, but for the questions themselves, which expand conceptions of possibility, enrich intellectual imagination, diminish dogmatic assurance, and foster a grander mind capable of union with the universe. Implicitly, the argument champions unrestricted free speech as essential for ongoing discovery and human flourishing, rejecting sentimental censorship in favor of open inquiry.

**Key points:**

- Curtailing speech to avoid offence assumes all truths are already known, a claim of hubris and complacency.
- The Offence Principle would eliminate philosophy and serious intellectual pursuits.
- Philosophy enlarges intellectual imagination and diminishes dogmatism, as per Bertrand Russell.
- Free expression must not be limited by sentiments to allow new truths and speculations.

**By Spontaneous Order**

* * *

To say that freedom of expression should be curtailed lest it offend or hurt the sentiments of people, or some people, implicitly accepts a ludicrous postulate: that all facts and truths that mankind ought to know have been known, and any new expositions would merely distort truths. One need not be a philosopher to say that that postulate is not only ludicrous but also smacks of hubris and complacency.

At any rate, the Offence Principle would end up banishing philosophy and any serious contemplation. As Bertrand Russell wrote in The Problems of Philosophy, “Philosophy is to be studied, not for the sake of any definite answers to its questions since no definite answers can, as a rule, be known to be true, but rather for the sake of the questions themselves; because these questions enlarge our conception of what is possible, enrich our intellectual imagination and diminish the dogmatic assurance which closes to mind against speculation; but above all because, through the greatness of the universe which philosophy contemplates, the mind also is rendered great, and becomes capable of that union with the universe which constitutes its highest good.”

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## I Am Not A Parent, But Mine Ensured That I’m Not A Miscast!

Original: https://www.spontaneousorder.in/p/i-am-not-a-parent-but-mine-ensured-that-im-not-a-miscast

Author: Spontaneous Order

Published: 2018-08-06T07:02:09.000Z

Topics: education, school-choice, parental-choice, government-waste

> I’m not a parent, Not in the present, neither have I been one in the past! This is a plea, or a hope! Probably not the last… But I have been a kid, rather a carefree one, knowing nothing of being harassed! Didn’t know what actually went in the backg

**Summary:**

Nitesh Anand, from a family of educators in a 'development-backward' Indian state and lower-middle-class background, reflects on his parents' sacrifices to provide quality education despite financial constraints, including debts at the local kirana shop. He notes the median per-child schooling expenditure in India is INR 12,768 (Accountability Initiative report), a significant burden parents willingly bear for better outcomes than government schools, which he dismisses as wasteful and unsatisfactory. Anand emphasizes that even illiterate, poor parents make informed, wise choices prioritizing their children's education and happiness—citing HSBC's report where 49% of Indian parents see happiness as the ultimate goal. His own path to nonprofit work in remote areas reflects this parental investment in self-awareness and liberty. From a classical-liberal viewpoint, he argues for returning parents' money from inefficient government systems and restoring their choice in education, trusting their 'brilliant decision-making prowess' to ensure optimal utilization and results without disappointing their children.

**Key points:**

- Parents from economically constrained backgrounds prioritize and fund quality private education for children, with median costs at INR 12,768 per child.
- Indian parents wisely choose education options that foster happiness and liberty, as 49% view happiness as the ultimate goal per HSBC report.
- Government education systems waste public money on ineffective services, failing user satisfaction.
- Empower parents by returning their funds and choice in schooling to leverage their proven decision-making for better outcomes.

**By Nitesh Anand**

* * *

I’m not a parent,

Not in the present,

neither have I been one in the past!

This is a plea, or a hope!

Probably not the last…

But I have been a kid, rather a carefree one,

knowing nothing of being harassed!

Didn’t know what actually went in the background,

to make me the person I am.

Looking back I can sense all my creators had to bear,

Just to ensure I’m not a miscast!

But I’m not a parent, not yet!

I, Nitesh, come from a family of educators. Both my grandfathers worked as Principals in different government schools, while my maternal grandmother was a teacher in a neighbourhood school. This was still a time when the teachers’ salaries used to be inversely proportional to the amount of respect they used to get and the dedicated efforts they used to put in. My childhood has been filled with memories of people; both young and adults, visiting my grandparents to show their gratitude for being good teachers to them. I grew up with lots of books, conversations and many years of schooling, quite similar to all of you. I never actually gave any serious thought about how difficult it could have been for my parents to ensure good and quality education for me.

Coming from an economically lower-middle class family background, from one of the most “development-backward” (or beemaru as some people refer to it) states of the country, my own nonprofit sector would have loved to refer to us as “potential beneficiaries” back then. If I were a school student now, approximately 13,000 would have been needed for my schooling only (as per the report by Accountability initiative, the median per child expenditure in India is INR 12,768/-). This amount gets even bigger, when we talk about the cost investment in higher education. So despite the fact that our neighbouring kiryana shopkeeper always used to have our name in his debt book while we used to get our shining books and shoes in time, getting education from a good school was always a priority. Despite financial constraints, all the parents like mine are bound to spend much more. But when you would explore the motivation behind this expense, you would suddenly realize that you are talking to people who know what they are paying for. They might be illiterate, poor or debt-ridden, but trust me they are wise people. And they know what’s best when it comes to choices. And that’s why opting for the best available education for child isn’t something extraordinary, but an informed decision, which all the parents are true masters of.

I won’t even discuss the government system simply because if the users are not satisfied by any service then it becomes a classic case of wasted money and missed opportunities. Besides it has already been long discussed everywhere and you all are aware about the creative-yet-useless ways our own money get wasted everyday by the Education department.

But I certainly will mention one important observation about Indian parents. HSBC’s Global report titled “The value of Education: Higher & Higher” mentions that 49% Indian parents think happiness in life is the ultimate goal for their children. My parents’ wanted happiness for me, even though they invested a lot of money in my education and yet let me live the life of my choice working with nonprofits, sometimes in villages or in remote Himalayas. They knew the real value for money will come from my happiness and self-awareness, a quality I received from my parents and my education.

I am sure all of the parents want the life of choice and liberty for their children. We the children are certainly getting a lot closer to exercise our choice, but the parents- the debate towards their choice still stays at the same level, even though huge money is wasted in their name! We have to give back the parent’s their own money, and the choice to exercise their brilliant decision making prowess, and trust me, they won’t disappoint, in the same way they never disappoint their child. They know the value of both the education and money, and they certainly can easily ensure the best utilization and results.

* * *

**About Nitesh Anand**

Senior Fellow-Policy Impact & Outreach, Centre for Civil Society Nitesh is a Friedrich-Naumann-Stiftung Scholar and an India Fellow with over thirteen years of experience. He holds a Master's in Politics and Technology from Technical University Munich, Germany. Nitesh is a Policy Advisor to the Department of Policy, Ministry of Education, Youth & Sports (MoEYS), Cambodia.

## Chai, Pani aur Globalisation

Original: https://www.spontaneousorder.in/p/chai-pani-aur-globalisation

Author: Spontaneous Order

Published: 2018-08-06T06:52:27.000Z

Topics: creative-destruction, globalisation, free-trade, economic-growth

> To a wise man, the whole earth is open; for the native land of a good soul is the whole earth. ~ Democritus of Abdera Circa 420 BC It was not long ago that the British set up and began commercial production of tea in India in 1840 through the Assam Tea ..

**Summary:**

The post argues that Joseph Schumpeter's 'creative destruction'—driven by trade and globalization—has profoundly improved Indian daily life, countering negative perceptions focused on 'destruction' by highlighting benefits like innovation, affordability, and job creation. Using tea as an example, it notes British introduction in 1840 transformed consumption from kada or water to a staple, with per capita intake at 0.8 kg and a ₹15,000–20,000 crore market. Cable TV evolved from Doordarshan monopoly—challenged legally in the 1990s—to over 1,000 channels plus streaming, generating new employment despite initial job losses. Ice cubes shifted from costly Mughal-era transport from Srinagar or 19th-century imports (e.g., Frederic Tudor's ice house in 1842) to Rs 15/kg availability via machines and fridges. Fans replaced punkhas with modern ceiling and AC fans. Post-globalization, India achieved 7% average GDP growth versus 4% pre-independence era, reducing poverty, boosting tourism, and ranking 7th in global GDP contribution. The classical-liberal conclusion urges embracing globalization's 'industrial mutation' for economic and social progress, as stagnation leads to decline.

**Key points:**

- Globalization via creative destruction made tea, cable TV, ice cubes, and fans accessible and affordable, replacing outdated methods and luxuries for the masses.
- India's post-globalization economy grew at 7% annually on average, compared to 4% earlier, leading to poverty reduction and new job opportunities from MNCs like in Gurgaon.
- Negative focus on job losses from creative destruction ignores net gains in technology, employment, and consumer choice, as seen in TV channels expanding from Doordarshan to over 1,000.
- Embrace trade and openness to accelerate innovation and avoid economic stagnation, as evidenced by global GDP growth forecasts and benefits to developing countries.

**By Sadaf Hussain**

* * *

To a wise man, the whole earth is open; for the native land of a good soul is the whole earth.  
~ Democritus of Abdera Circa 420 BC

It was not long ago that the British set up and began commercial production of tea in India in 1840 through the Assam Tea Company. But if it was only in the mid-1800s that they set up tea production, then what were we drinking before? Not many know that ‘tea’ was an alien concept for Indians, we were happy with our kada or just water. According to an article “…British in India used to consume Chinese tea in massive quantities but eventually they started tea cultivation and production in India”. For the longest time tea used to be a drink for the rich but mass and local production made it possible for lesser able Indians as well to enjoy this caffeinated drink. In her book, “Curry”, historian Lizzie Collingham says that the taste for tea was cultivated in India through a dedicated push on part of the producers of tea (the British) and initially, free samples of tea were offered to houses. And now, ek kadak garam chai ki cup is what starts the day in many households in India, we no longer subsist on kada. According to The Hindu, the all-India per capita tea consumption is 0.8 kg and the value of the domestic tea market is estimated at ₹15,000–20,000 crore.

Joseph Schumpeter (1883–1950) would describe this phenomenon as “creative destruction” which refers to the incessant production and process innovation mechanism by which new production units replace outdated ones. He also considered this an “the essential fact about capitalism’’.

In India, we have seen a lot of “creative destruction”. Trade and commerce has helped in this process to facilitate our technological advance and establish us in the global market. The two — trade and globalisation — are also interrelated. Trade leads to creative destruction, globalisation accelerates the process of trade and also opens the market, so as globalisation occurs and we get access to new technology, our process of creative destruction also accelerates.

The problem however, is that every time people talk of globalisation and creative destruction, it is a negative perception that arises in people’s minds. We focus more on the aspect of “destruction”, and not on the benefits that are accrued out of it. Let’s try and explore the effects of creative destruction through three simple and daily used products.

1\. Cable TV

Summer vacations as a child meant binge watching popular TV shows like Shaktiman, Motu Patlu, Captain Vyom and a few others on Doordarshan, but then came a phase when Doordarshan 2 (DD Metro) came into our lives. Suddenly, we had choices and options. And soon after, we saw a revolution in the broadcasting industry. People now spent their lazy days watching channels like Zee TV and Star TV. But change is never so easy, it comes with challenges — more options basically meant more competition and in return lower TRP for Doordarshan. This certainly put the management in an uncomfortable position. They therefore filed a case against the Star TV network based in Hong Kong. According to “Sphere of Influence: Writings on Cricket and its Discontents” by Gideon Haigh, Doordarshan’s then-Director General, Rathikant Basu, barged into Calcutta’s Supreme Court brandishing the 109-year-old Telegraph Act in order to make his case against Star TV. Basu with the backing of the information and broadcasting minister, K P Singh Deo, argued that the “uplink of a video signal to a foreign organisation jeopardised national security”. The Supreme Court however eventually ruled the case out by saying airwaves were public property, and could be owned or rented by private parties under the watchful eyes of a regulatory authority.

With the globalised economy and creative destruction, now we have more than 1,000 TV channels with a few more online channels including YouTube and Netflix. Surely, the employees lost their jobs at their cable network, but did this not generate new avenues of employment? And did we as consumers not receive better channels and a lot entertainment?

2\. Ice Cubes

Frozen water was an alien concept to us Indians. Ice cubes or basic ice was missing from our lives. I always wonder how we cooled water during summers in India because just earthen pots were not sufficient to quench the thirst caused by scorching heat.

Those who came in to settle here however, didn’t even have the respite that clay pots offer. They were not used to the heat. According to Ain-I-Akbari, in order to beat the heat the emperor Akbar used special boats to constantly bring ice from Srinagar in Garwha. Ice was loaded in ’12 seer’ bundles firstly wrapped in very clean cotton muslin, over which jute cloth was covered twice over, and then it was placed in a wooden box with wood shavings to fill in the gaps. This ice was then transported via elephant and horseback from Srinagar to Delhi — a journey that took two days to cover. This was a very costly affair and only the rich could afford ice and also to build ice-houses to store ice.

In fact, in the mid-19th century, there was a bustling ice trade. According to an article in Huffpost, ice was being traded in huge quantities in Europe at this time. Businessmen used to take labourers to cold places/frozen lakes or pond and start cutting the frozen water into smaller blocks. These pieces would then be loaded on a train and in some cases then transferred to ships. In fact the first ice during British era came as traded goods to Kolkata (Calcutta), from Boston.

Vivekanandar Illam was built in 1842 to be used as an ice house by an American entrepreneur called Frederic Tudor, who came to be called the “Ice King” because of his idea of transferring ice blocks from cold countries to hotter parts of the world. In India, the British were quite impressed by him since they were otherwise struggling in the heat of Calcutta and Bombay. Further research and development helped develop ice machines in India which further went on to become freezers and fridges.

People did lose their jobs during the process, the runners during Mughal era or the ship drivers or the labourers during British era but this led to a lot of technological advancement. As a result, we now have ice cubes readily available in the summers. Once a luxury, ice is now available, for as cheap as Rs 15 per kg. And the labour, effort and resources that went into this long-drawn-out activity have been redirected to much more fruitful pursuits.

3\. Fans

India has always been a hot country. Our summers used to scare the British so much so, that they often said “the deadly heat of Calcutta was more dangerous to British life than any uprising by the natives.” The British started building their houses with compounds of shady trees and high ceilings while other rich officials followed the Mughal practice of building tehkhanas in their residences.

But be it British or Mughals, they always used hand fans or punkha. According to Sahibs’ India: Vignettes from the Raj by Pran Nevile “…It is a French seaman — Captain de Grandpre’ — who first describes the Calcutta punkha in 1790. In many houses, there was a large fan, hanging from the ceiling over the eating table, of a square form and balanced on an axle fitted to the upper part of it. A servant standing at one end of it, puts it in motion by means of a cord which is fastened to it in the same manner as he would ring a bell”.

Later on these big fans underwent modification to give better air to the Sahibs. The size of the fan also depended on how big the room was. In fact, fans became a reason to advertise public libraries and social events to attract masses.

Today, the kinds of fans and air conditioners that we have now have been nowhere even in the dictionary of Indians when they first discovered the benefits of punkhas.

Let’s question ourselves again; has globalisation changed our day to day life for good or bad? Schumpeter described this as a ‘process of industrial mutation that incessantly revolutionises the economic structure from within, incessantly destroying the old one, incessantly creating a new one.’ If the economy and technology is not evolving, it will stagnate and eventually die down. Morgan Stanley recently forecasted that Global GDP appears on pace to grow in 2018, an estimated 3.8% which is its strongest showing since 2011.

According to Jagdish Bhagwati, globalization has helped poor and developing countries to grow well. Globalisation has given people more disposable income, and life expectancy has almost doubled in the developing countries. Countries like India have largely benefited from this globalised economy — and a large part of this benefit has come from the technology and goods and creative destruction.

Post globalisation, India grew by 7% (on an average) as compared to mere 4% post-independence and which did lead to a remarkable reduction in poverty. Globalisation helped us create more jobs with the entry numerous new and young entrepreneurs. Gurgaon became the first city in the entire country to host MNCs on its land. Technology improved and flying to India became simpler which helped in growing tourism and made India the 7th in the world in terms of its total contribution to the global GDP.

The rapid expansion of globalisation and capitalism proclaims that it is the creative destruction and openness which has brought the change in the generation, economically and socially. Let’s embrace the change and not close our doors to it.

* * *

**About Sadaf Hussain**

Sadaf Hussain writes everything between politics, economics to food and culture. He is the author of Daastan-E-Dastarkhan and a TEDx Speaker.

## Why We Need A Swatantra Party in Present Day India

Original: https://www.spontaneousorder.in/p/why-we-need-a-swatantra-party-in-present-day-india

Author: Spontaneous Order

Published: 2018-08-06T06:49:03.000Z

Topics: swatantra-party, limited-government, individual-liberty, political-opposition

> Rajaji founded the Swatantra Party in 1959 with idea of limited government and protection of the individual liberty against the increasing trespasses of the State. Prior to establishing his party, he was sworn in as Governor of India on 21st June 1948, ..

**Summary:**

Sadaf Hussain argues that India urgently needs a revival of the Swatantra Party, founded by C. Rajagopalachari in 1959, to counter the absence of a strong classical-liberal opposition advocating limited government and individual liberty against state overreach. Rajaji, frustrated by Nehru's unchallenged dominance post-Sardar Patel's death, formed the party at age 81 with leaders like Minoo Masani and N.G. Ranga; it became the largest opposition in the fourth Lok Sabha and state assemblies in Bihar, Gujarat, Rajasthan, and Orissa. The party championed minimal government intervention, freedom of trade, opposition to bank nationalization, rule of law, and internal dissent without party whips, emphasizing policies based on faith in people rather than compulsion. Today, Hussain laments the lack of such voices amid curtailed freedoms in the name of nationalism, citing the 2017 Freedom of Thought Report scoring India 4/5 on expression and humanist values (alongside Israel and Lebanon), and a 30% rise in inter-communal violence in early 2015 (330 attacks, 51 fatal vs. 252, 33 fatal in 2014). Urban youth show openness to liberal ideas, but civil society dissent is insufficient without a legislative alternative offering choice, accountability, and reduced state monopoly.

**Key points:**

- Revive a Swatantra Party-like entity to provide legislative opposition against state overreach and socialism.
- Swatantra Party succeeded as largest opposition by promoting limited government, individual initiative, and internal dissent.
- Current India faces declining freedoms, with poor scores on expression and rising communal violence, demanding a liberal alternative.
- Urban youth's interest in policy debates offers hope for building a new classical-liberal political force.

**By Sadaf Hussain**

* * *

Rajaji founded the Swatantra Party in 1959 with idea of limited government and protection of the individual liberty against the increasing trespasses of the State. Prior to establishing his party, he was sworn in as Governor of India on 21st June 1948, and served in this position till 26th January 1950. He was very clear about the kind of Governor and governance he was going to bring to the nation. He said “no territorial or racial or religious community can hope to thrive or maintain its happiness through force without the willing and full cooperation of other people and the utmost intercommunication…It is therefore necessary that all communal and territorial isolationisms should be abandoned and the best talents in every community should seek to serve the whole state”.

But what prompted Rajaji to start the party? After Sardar Patel’s death, Rajaji realised that there was no one to question Nehru, and that dissent was discouraged and silenced within the Congress party. Frustrated with this state of affairs, at the age of 81, he went against the party politics and forged the Swatantra Party along with leaders like Minoo Masani, N G Ranga and others. The party went on to become the single largest opposition party against the then-largest party, Congress, in the fourth Lok Sabha, and in legislative assemblies of many states like Bihar, Gujarat, Rajasthan and Orissa. The voice of this party was different, it was unique. They dared to question the socialist regime and the kind of democratic order that they witnessed.

Swatantra Party’s agenda was very clear- they wanted to create policies based on the faith of voters and not out of state compulsion. The role of the government should be minimal and, “the business of government should be government”. They insisted that the government should not become big at the expense of the freedom of common citizens.

Leaders like Rajaji are missing in present India. There is barely any voice being heard, let alone liberal ideas and voices. However, there is hope to be found in today’s urban middle-class youth — they are interested in knowing and learning about alternate options, keen to explore new ideas and to look beyond the rhetoric of socialism. They are ready to engage in policy debates. Perhaps the Anna Hazare Movement and rise of the Aam Aadmi Party can be credited for this — they made policy debates sound interesting and “cool”, and their appearance as an alternative to the status quo was a refreshing change, re-enthusing the engagement of youth with policy. Young leaders like Kanhaiya Kumar, Jignesh Mewani and few others are taking charge of politics and trying to establish a strong opposition based on individual freedom and consent which is missing in the current regime. Today, the youth isnt necessarily socialist or liberal, they are open to debates and ideas, and keen on finding a middle ground.

In my opinion, this resurgence of youth is critical. What we are missing today in India is a strong opposition voice. The onus is on civil society members to take cognizance of the censoring of all those who question policy and demand freedom. We are seeing that freedom is being curtailed in the name of “nationalism” and citizens are being questioned for what and who they are, most times simply for having a dissenting voice. The most recent example i.e. the four judges coming out in the public to raise their concerns about the independence of the judiciary is a clear reflection of the malaise — of what is not right in India. According to The Freedom of Thought Report 2017, India stands 4 out 5 on freedom of expression and humanist values, sharing the score along with extremist countries like Israel and Lebanon. This is not a very comfortable position to be in. Statistics on inter-communal violence show a 30% increase in the first half of 2015 with a total of 330 attacks, of which 51 were fatal, compared with 252 attacks, 33 of which were fatal in the same period of 2014.

This is why, while the civil society’s dissent is crucial, it is not enough. There must be a strong, official, legislative opposition — this is not a role that can be substituted for by people’s movements, effective as they may be. It is this role that the Swatantra Party served in between June 4, 1959, and August 4, 1974. They gave people an option to vote for people within the party and dissent was invited at every step. The Swatantra Party offered choice to Indian voters. They offered an alternative of less state intervention in the lives of citizens and a much larger role for these same citizens in the country’s governance.

Importantly, the party also invited dissent from within the party. Rajaji believed that every member of the party should be completely free to hold his own views and opinion to express and should not be restricted by the party’s whip. The Swatantra Party was perhaps the only party which stood for individual initiative and enterprise in its truest sense. It allowed people to think for themselves and come up with their own entrepreneurial ideas. They believe in social justice and not socialism. Party was very clear with respect to how much and when they should intervene. Rajaji once mentioned in one of his speeches that “…compulsion kills initiative and regulation kills interest and responsibility. We want all policies to be based on the faith in people as the moral foundation of government, discarding compulsion”. The Swatantra Party stood for freedom of trade and employment. It was opposed to nationalisation of banks. They stood for the maintenance of the rule of law and restoration of fundamental rights to the people in the true sense. In fact, at the inauguration of the Swatantra Party, in his speech, Rajaji said “…the State is becoming a giant entity by itself menacingly poised against the citizen, interfering with his life at all points, mistrusting the people, imposing restrictions, introducing a series of controls and regulations, stepping into the fields of agriculture, industry and trade, creating an army of officials, tremendously increasing the cost of administration and therefore the taxes paid by the nation, hypnotizing the people with slogans that are mistaken for thought and wisdom, a scheme of Government in which it is taken for granted that the citizen is ignorant of what is his own interest”. Although he said this in 1959, it is true in the current political system as well.

Today, as we see the role of the opposition pawned off to the citizens rather than our elected representatives, we realise the criticality of having a legislative opposition. Secondly, we see that while the parties differ in mandate, the policies they legislate look very alike one another. So we not only need a strong opposition, we need an alternative in what is fast becoming a monopolised centre. A liberal alternative that will stand up for individual freedom, for increased choice and accountability, for limited government and maximum governance. Of the people, by the people and for the people.

* * *

**About Sadaf Hussain**

Sadaf Hussain writes everything between politics, economics to food and culture. He is the author of Daastan-E-Dastarkhan and a TEDx Speaker.

## Enabling a Right to Education of Choice: Homeschooling in India

Original: https://www.spontaneousorder.in/p/enabling-a-right-to-education-of-choice-homeschooling-in-india

Author: Spontaneous Order

Published: 2018-08-06T06:45:13.000Z

Topics: homeschooling, rte-act, educational-choice, nios-obe

> Why home-schooling? Home-schooling, simply put, is the education of school-aged children at their homes rather than at a school. Proponents of home-schooling argue that children who are home-schooled are able to learn more, and turn out be more cultural..

**Summary:**

The Right to Education (RTE) Act, 2009, functions as a 'Right to Free and Compulsory Schooling' by defining elementary education only through recognized schools, excluding homeschooling and creating barriers for parents exercising educational choice. Proponents argue homeschooling enables broader learning, cultural sophistication, and excellence in natural abilities, supported by international studies showing superior performance in verbal fluency and independence, and exemplified by Sahal Kaushik, the youngest IIT-JEE rank 33 at age 14 in 2010, who was homeschooled. The National Institute of Open Schooling's (NIOS) Open Basic Education (OBE) programme, equivalent to formal schooling for higher education, was set to discontinue for 6-14 year olds post-2013 due to RTE, though extended periodically to March 2020 with unclear 'mainstreaming' conditions. In Shreya Sahai vs. Union of India (2011), the Delhi High Court dismissed a PIL challenging RTE's restrictions, despite MHRD's affidavit affirming homeschooling's legality. From a classical-liberal view, RTE invisibilises parental choice; the author urges permanent OBE extension for 6-14 year olds and explicit inclusion of homeschooling in RTE to provide certainty and facilitate customized learning beyond formal systems.

**Key points:**

- RTE Act's Sections 2(n), 4, and 8(a) mandate compulsory elementary education only in recognized schools, excluding homeschooling.
- NIOS OBE programme for 6-14 year olds was discontinued post-2013 due to RTE but extended incrementally to 2020 with vague mainstreaming requirements.
- Shreya Sahai PIL (2011) sought RTE amendments for homeschooling; MHRD affirmed its legality, but court dismissed in 2013, deferring to legislature.
- Homeschooled Sahal Kaushik topped Delhi IIT-JEE at rank 33 nationally at age 14 in 2010.
- Permanently extend NIOS OBE to 6-14 year olds and include homeschooling in RTE to respect parental educational choice.

**By Vineet Bhalla**

* * *

Why home-schooling?

Home-schooling, simply put, is the education of school-aged children at their homes rather than at a school. Proponents of home-schooling argue that children who are home-schooled are able to learn more, and turn out be more culturally sophisticated and are able to excel in their natural abilities as their learning is more broad, and not just confined to a school environment.

While there has been no study conducted on how home-schooled children in India go on to do in their lives, studies conducted on home-schooled children abroad have yielded that such children perform substantially better than their conventionally educated counterparts in areas of development such as verbal fluency, independence and like skills. It is also noteworthy that the youngest person to ever clear the highly competitive Indian Institute of Technology Joint Entrance Examination, Sahal Kaushik, who cleared the examination in 2010, getting rank 33 in the country and standing first in Delhi at the tender age of 14, was home-schooled.

Barriers to home-schooling created by the RTE Act

Proponents of home-schooling are opposed to sending their wards to formal schools. However, the RTE Act does not recognize a child’s right to education at a site other than a school fulfilling the recognition norms set by the statute\*. In that sense, the Act is more like a ‘Right to Free and Compulsory Schooling’, since it is making schooling compulsory for all children in the age group of 6–14 years. In the Act’s imagination, elementary education that is to be compulsorily provided to children of the target age-group can only be imparted by recognized schools. Not only is there no space for home-schooling in such a conception of elementary education, but the type of schooling made compulsory is restrictive, and threatens the existence of certain kinds of schools.

Another problem created by the RTE Act is over the external certification of elementary education through home-schooling. Proponents of home-schooling usually avail of the National Institute of Open Schooling’s (NIOS) Open Basic Education (OBE) programme. The OBE programme’s value lies in the fact that it is recognised by the Government of India as equivalent education to formal primary and upper primary schooling for purposes of higher education and employment. However, due to the restrictive notion of elementary education germinated by the RTE Act, the NIOS announced in 2011 that in light of the RTE Act, the OBE programme will discontinue catering to children of 6–14 years of age after 2013.

Shreya Sahai vs. Union of India

That same year, public interest litigation was filed before the High Court of Delhi by 14-year old Shreya Sahai contending that the RTE Act does not recognise any other mode of imparting education except the one through formal schooling, which is in violation of the fundamental rights of children. The petition demanded that home-schooling and alternate education schools be included within the definition of schools, and that NIOS be allowed to continue imparting education to children below 14 years of age. In the course of the hearings in this matter, the Union MHRD Ministry filed an affidavit stating that there is nothing illegal about home-schooling, and that the RTE Act doesn’t come in the way of home-schooling. However, it also disclosed that the OBE Programme of the NIOS would not cater to children in the age group of 6–14 years beyond March 2015. The petition was ultimately dismissed by the High Court in 2013 on the grounds that it would not be justified for the Court to direct the Government to amend the RTE Act “as it is the right of the Government and legislature to amend any Act or any provision of the Act” (which is unfortunate since High Courts are empowered through their power of judicial review to strike down or modify the reading of statutory provisions if they are found to be unconstitutional).

Since then, the OBE programme has been incrementally extended for 6–14 year old children periodically, first till March 2017, and most recently, till March 2020 “subject to the NIOS showing regular progress on mainstreaming children as per Section 4 of the \[RTE Act\]”. What is meant by mainstreaming children as per Section 4 of the RTE Act, however, is unclear, and not clarified anywhere by the Union HRD Ministry.

Needed: Certainty about the status of home-schooling

The Union HRD Ministry’s affidavit in the Shreya Sahai matter affirming the legality of home-schooling brought some consolation to the budding home-schooling community in India. The affidavit acknowledges, albeit indirectly, children’s right to education of choice. However, for home-schoolers who would need external certification of the kind provided by the NIOS’s OBE programme, such lip service is not enough. While the OBE programme has been available to them for elementary education, they have faced tremendous uncertainty about the same since the enactment of the RTE Act. Though their worries have been placated through periodic incremental extensions of the programme, it is imperative that the Union HRD Ministry looks beyond such piece-meal measures, and arrives at a more permanent and sustainable solution. One way to do that would be to perpetually and permanently extend the OBE programme to 6–14 year old children, so that temporary extensions are done away with altogether. Another solid step would be to include home-schooling within the ambit of the RTE Act.

The decision to home-school is the gallant exercise of choice made by parents for their wards to shape their horizons and customize their learning beyond the confines of the formal schooling system. A statute that seeks to provide for compulsory elementary education for all children in the country must recognize and facilitate such a choice, not invisibilise it.

\*Note: This is clear from a reading of Section 2(n) of the Act, which defines the term ‘school’ as “any recognized school imparting elementary education”, Section 4 of the Act, as per which “\[w\]here a child above six years of age has not been admitted in any school .. then, he or she shall be admitted in a class appropriate to his or her age”, and Section 8(a), as per which the government is obligated to “ensure compulsory admission, attendance and completion of elementary education by every child of the age of six to fourteen years”

\[This post is an updated version of a part of an essay by the same author, published in 2015 in the Samvaad Handbook, 2015, ISBN: 978–81–931647–8–5\]

*References:*

*1\. The New Indian Express, Indian education: Creating zombies focussed on passing exams  
2\. The Indian Express (hereinafter ‘IE’), We don’t need no education  
3\. Peter J Brosnan, Child competencies and family processes in homeschool families, Melbourne Graduate School of Education — Theses \[1212\] (1991)  
4\. Dr. Seto Mulyadi, Effect of the Psychological Security and Psychological Freedom on Verbal Creativity of Indonesia Homeschooling Students, 1(2) Intl. J. Of Bus. & Soc. Sc. (Nov 2010)  
5\. The Times of India, Delhi IIT-JEE topper is just 14 & homeschooled  
6\. Vineet Bhalla, Right of Children to Free and Compulsory Education Act, 2009: Restricting the Right to Educational Choice of Parents/Guardians for their Children by Promoting Compulsory Schooling of a Certain Type?, 10–19, Samvaad Handbook, (2015, ISBN: 978–81–931647–8–5)  
7\. National Institute of Open Schooling \[hereinafter ‘NIOS’\], Guidelines and Standard Operating Procedure for Implementation of Open Basic Education Programme, 2015 (Revised)  
8\. NIOS, Annual Report 2010–11  
9\. Shreya Sahai & Ors. vs. Union of India & Ors., W.P. ( C ) 8870/2011 before the High Court of Delhi  
10\. IE, RTE not against home schooling and alternate education: MHRD  
11\. Indian Association of Homeschoolers, Government of India states that there is nothing illegal about homeschooling  
12\. Dept of School Ed and Literacy, Ministry of HRD, Govt of India, F. №1–3/2012-EE-4*

* * *

**About Vineet Bhalla**

Vineet Bhalla holds a B.A., LL.B. (Hons.) degree from the W.B. National University of Juridical Sciences, Kolkata. He has been a Fellow with Make A Difference from 2012–15, and was one of the inaugural Pratiti Fellows with People for Parity in 2015. His previous work experience includes a 13 month stint with IDIA (Increasing Diversity by Increasing Access to Legal Education) as Assistant Director, and a one year stint as an inaugural Chief Minister’s Good Governance Associate in Haryana. At CCS, Vineet handles legal research and advocacy work.

## The Generality Principle

Original: https://www.spontaneousorder.in/p/the-generality-principle

Author: Spontaneous Order

Published: 2018-08-03T13:13:59.000Z

Topics: generality-principle, uniform-civil-code, personal-laws, libertarian-constitution

> What would be the Uniform Civil Code or personal law under gram swarajya or in the village republics that Mahatma Gandhi championed? It would probably resemble the one that prevails in Anna Hazare’s Ralegan Siddhi. If you violate the code, say by consum

**Summary:**

Parth Shah argues that civilizational progress requires separating personal and political domains through a constitution guided by the 'generality principle,' as articulated by thinkers like Adam Smith, John Rawls, F.A. Hayek, and James Buchanan, ensuring laws apply equally without group differentiations seen in village republics like Ralegan Siddhi or khap panchayats. He critiques the Indian Constitution for embedding group-based rights by religion, caste, tribe, and geography, fueling the uniform civil code (UCC) debate. Shah distinguishes 'personal codes'—community-enforced norms among consenting adults—from state 'laws,' urging the former's exclusion from constitutional purview to allow organic evolution. Libertarian principles demand equality before general laws and no state intervention in voluntary adult exchanges (victimless acts). Enforcement of community norms must not violate constitutional protections of life, liberty, and property; norms themselves need not comply. This demarcates citizen rights (protected by state) from voluntary community membership obligations, prioritizing individual choice and state accountability over specific personal laws.

**Key points:**

- Adopt the generality principle in constitutions to craft laws applying equally to all, avoiding group differentiations by caste, religion, or geography.
- Treat religious practices as community codes enforced voluntarily by communities, not state laws.
- State intervenes in community enforcement only if it violates general laws protecting life, liberty, and property.
- No laws should govern consensual acts among adults, distinguishing citizen rights from community obligations.

**By Parth Shah**

* * *

What would be the Uniform Civil Code or personal law under gram swarajya or in the village republics that Mahatma Gandhi championed? It would probably resemble the one that prevails in Anna Hazare’s Ralegan Siddhi. If you violate the code, say by consuming liquor, you would be ostracised or even beaten up in public.

The khap panchayats of Haryana are another example. Their personal code is very specific and differentiates among groups, families and individuals on the basis of gotra, gender, vocation, before puberty and after puberty, personal status like unmarried, married or widow. It is as if the code defines and highlights minute differences among people and prescribes exact rules or norms that each “differentiated individual” must follow. It is organically evolved by and for a specific community that happens to live in one geographical area.

In a village republic or khap panchayat, “we are all our brothers’ keepers”. The “organic evolution” or “community specificity” could often mean that the code of one village would make little sense to another village a hundred kilometres away.

Civilisational progress, however, is made by separating the personal and the political, by circumscribing a large personal domain, and by allowing only the necessary minimal powers to the political or collective domain. We invented the idea of a Constitution to protect the personal domain and to define as precisely as possible the powers of the community. We also invented a mental technique to decide what should or should not be written in the Constitution. This technique has been used by philosophers and political economists to debate the proper contents of a Constitution.

Adam Smith called it the “impartial spectator”. Imagine that you are an impartial spectator and then think about what is proper behaviour and what laws or rules you would want to impose on yourself and others. John Rawls used “behind the veil of ignorance”. To decide the right behaviour or laws, put yourself behind the veil of ignorance where you do not know your status in the real world—whether you are a man or a woman, rich or poor, lower caste or upper caste. And then you think about the rules for a political and economic system. The public choice theorist James Buchanan made a variation on Rawls and coined the term “behind the veil of uncertainty”. Nobel laureate F.A. Hayek relied on the “generality principle” to arrive at the “constitution of liberty”. These are different mental techniques to decipher the right rules.

To understand the significance of this technique, and more importantly, the underlying principle of generality in constitution drafting, let’s take the famous phrase from the United States Constitution: “All men are created equal.” In 1776, most people understood that it meant only white men. Imagine if Thomas Jefferson, who prepared the first draft, wanted to be precise and not general, he would have written: “All white men are created equal.” How would American history have unfolded then? After the women’s suffrage movement of the early 20th century, the Constitution would have been amended: “All white men and women are created equal.” After the civil rights movement, it would have to say, “All white and black (or coloured since yellow and brown were also present by then) men and women are created equal.” Then comes the transgender movement…you get the picture.

The American Constitution uses the “generality principle” far more extensively than the Indian Constitution. The governing principle of the Indian Constitution seems to be the group-differentiated rights and privileges based on religion, caste, tribe or backward status and even geography (Jammu & Kashmir and the north-eastern states are treated differently). Herein lies the root of the battle between the personal laws and a uniform civil code.

Before I further elaborate on the libertarian perspective on the uniform civil code debate, let me highlight the significance of the choice of terms and phrases. Imagine if the established practices and norms of different religious communities were referred to as community or personal code, as opposed to personal law—Muslim Personal Law or Hindu Personal Law. The use of the term “law” has really diverted the attention from what these practices and norms actually are. It should have been Muslim Personal Code or Hindu Personal Code.

The term “law” instead of “code” elevates the status of the practice. More importantly, it implies that the enforcement would be done by the state instead of the community. Who should be responsible for enforcing a personal or community code? The community that made and is practising the code. But when it is called a law, the implication is that the state would be responsible for enforcing it and not the community. The code may be based on “divine law”, or the laws in the Quran or the Vedas, the interpretation and practice of the code are by the community, and therefore open to evolutionary or revolutionary change over time.

If it was commonly understood and accepted that religious practices are a community code and open to change by the community, they would probably have never been mentioned in the Constitution (even as Directive Principles of State Policy). And independent India would not have attempted to give legal status to any personal code. We would then have adhered to the “generality principle” in the drafting of the Constitution and the laws.

It is ironic that the uniform civil code is called a code and not a law, while in reality it would be a law that would be passed by the Parliament. It should be called uniform civil law!

The imprecise use of the term “law” has created further confusion between the rights and responsibilities of the citizen of a polity made of diverse communities and the rights and responsibilities of the member of any of these communities. We all have multiple identities and a community around an identity would have its own distinct norms and practices. These norms and practices are enforced by the community and not by the state.

Two liberal or libertarian principles are most relevant to the uniform civil code debate. One, equality before the law—all are equal in the application of the law. This is the “generality principle”. This liberal principle is now widely accepted, even by non-liberals or anti-liberals.

The second principle, which I think is uniquely libertarian, is that there should be no laws about capitalist acts among consenting adults. The state shall not intervene in any voluntary exchange between adults. It can also be understood in terms of “victimless crimes”. No party involved in the “crime” sees himself as a victim but the law ascribes victimhood to one of the parties; actually the “crime” exists only because of the law. The libertarian principle is that if there is no victim or no one claims to be a victim, there is no crime! And so there should be no law about it. Think of the sex or drug trade. Both parties in the trade engage voluntarily and none thinks of himself or herself as a victim.

The religious norms and practices of Islam or Hinduism or Sikhism are among consenting adults. As long as both parties or all parties voluntarily follow the norms, no one should have any objection. The community would have evolved ways and means of enforcing its norms, from social ostracism or expulsion.

As long as the enforcement mechanisms do not violate general laws about life, liberty and property, no one should have any objection. The enforcement mechanisms should comply with the constitutional principles of liberty, justice and equality.

It is important to note that the norms themselves do not have to comply with constitutional principles, but the enforcement of the norms must comply. I could start a new cult of “Parthism” that requires that all women must work outside and all men must read a book a week and take care of the family and the home. As long as people join Parthism voluntarily and live by the norms, no one should have any objection. No secular or women’s rights or men’s rights group should be able to challenge the Parthism norms. However, I should not be able to use any illegal means to keep any member from leaving the cult. If I do, then the rights of the member as a citizen of India come into play and her obligations as a member of Parthism come to an end.

This is the crucial distinction between rights and responsibilities as a citizen of the polity and those as a voluntary member of a community or a cult. This is where the significance of the “generality principle” comes into play—in helping to draw the boundaries between individual as a citizen and as a member of a group. It does not matter which identity of the individual gives rise to the group—religion, gender, caste, class or cycling, belly dancing or wine tasting.

I may choose to live in Ralegan Siddhi or even in a village ruled by a khap panchayat or I may be born there (and therefore have no choice.) As long as the boundaries between a citizen and a community member are clear and as long as the state protects my rights as a citizen, the contents of the personal “laws” or codes or norms do not matter. Libertarianism is about clear demarcation of the boundaries between the personal and the political. It is about individual choice and state accountability.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Movement Towards Swatantra: The Life and Times of Chakravarti Rajagopalachari

Original: https://www.spontaneousorder.in/p/movement-towards-swatantra-the-life-and-times-of-chakravarti-rajagopalachari

Author: Spontaneous Order

Published: 2018-08-03T13:09:55.000Z

Topics: rajagopalachari, swatantra-party, license-raj, central-planning

> As the nation awoke to its ‘tryst with destiny’, Rajaji found himself at odds with the top-brass of Congress’ Working Committee. Despite his dissent, on the eve of Partition, the Congress leadership requested him to take over the Governorship of Ben

**Summary:**

Chakravarti Rajagopalachari (Rajaji), a classical-liberal statesman, clashed ideologically with Nehru's Congress post-independence, serving as Bengal's Governor amid Partition chaos, India's first Governor-General after Mountbatten, and later as Home Minister before resigning due to disenchantment. He critiqued Nehru's majoritarian democracy—marked by Congress's numerical dominance, Lower House supremacy, ordinances bypassing judicial review, and Prime Ministerial tyranny—for lacking three of four essential 'feet': vigilant citizenry, prudent statesmen, wilful parliament, and independent judiciary. Rajaji lambasted the Planning Commission as a 'holy cult' imposing monolithic centralized planning that smothered individual freedom, enterprise, and creativity via proliferating bureaucracy, inefficient state capitalism, depreciating Rupee value, and foreign borrowings, while dodging parliamentary accountability. He coined 'Quota License-Permit Raj' for the bribe-ridden bureaucratic gluttony ruining private enterprise under welfare state pretexts, insisting public welfare demands individual freedom to live, work, think, and aspire. As Madras Chief Minister in 1952 via nomination in a hung assembly, he uniquely sought a confidence vote. Founding Swatantra Party as India's sole liberal force, Rajaji aimed to restrain over-government and totalitarianism, promoting a conservative check on ruling excesses. At 83, he toured the West for nuclear disarmament, impressing JFK. His faith in individual liberty endures as a reckoning for India's liberty path amid populism.

**Key points:**

- Rajaji defined healthy democracy by four feet—vigilant citizenry, prudent statesmen, wilful parliament, independent judiciary—claiming Nehru fostered only the last.
- Centralized Planning Commission smothered individual enterprise through bureaucracy and unaccountable control, prioritizing distribution over production.
- 'License Raj' described bureaucratic paperwork, duties, and bribes that ruined private enterprise under welfare pretenses.
- Swatantra Party was founded as a liberal movement to restrain Congress's majoritarian over-government and totalitarianism.
- Rajaji, as Madras CM in 1952 without election, sought and secured a confidence vote, upholding democratic principles.

**By Rishika Yadav**

* * *

As the nation awoke to its ‘tryst with destiny’, Rajaji found himself at odds with the top-brass of Congress’ Working Committee. Despite his dissent, on the eve of Partition, the Congress leadership requested him to take over the Governorship of Bengal- only a skilled Statesman could impose order in the foreseeable chaos. The Governorship ended with Rajaji taking over from Lord Mountbatten as the first Governor-General of independent India. With Dr Rajendra Prasad’s swearing-in as the first President, Rajaji looked forward to retiring from Delhi and returning to the southern sun. Alas, Delhi was not ready for his retirement. Post-independence he served in various capacities — as Chair of the Economic Committee, member of the Foreign Affairs Committee, and after Sardar Patel’s tragic demise, he served as the Minister of Home Affairs. During this period, the distance between the Minister and the Prime Minister grew exponentially. Rajaji’s disenchantment with Pandit Nehru was not personal but ideological. He was critical of the democracy that the Prime Minister represented. And although he chose a seat in the Opposition wing of the Parliament, his views remained widely respected.

According to Rajaji, a truly liberal and healthy democracy has four feet: (i) a vigilant citizenry, (ii) prudent statesmen, (iii) a wilful parliament, (iv) an independent judiciary. Of these, the Prime Minister’s administration fostered but one.

Rajaji viewed the ruling party’s majoritarianism as two-fold. First was its sheer numerical majority that overshadowed any and all opposition. Second was the dominance of the Lower House over the Upper House. This dominance formed the backdrop for a steady stream of Ordinances, circumvention of judicial reviews, and amendments to the Constitution. Additionally, ‘tyranny’ within the majoritarian party stemmed from a powerful centre that was the Prime Minister. This mutated into a shift in priorities as elected legislators concerned themselves more with the Central Leader’s perception of ‘public good’ as opposed to their own insights on it. Rajaji sums the cure for this oligarchy as,

‘…If we desire Freedom, Swatantra, and not tyranny, if we desire human personality not to be strangled by over-government, if we desire the general welfare of the poor to be uplifted and looked after, we must have a conservative party whose function will be to restrain and guide the ruling party, if not to replace it…’

Along with the jinx of majoritarianism, Rajaji viewed the ‘holy cult’ of the Planning Commission as an added tool for undermining the Indian democracy. He quizzed how a committee of a select few individuals could map the fate of an entire populace,

‘…The major fault of centralized, comprehensive planning is that it imposes a monolithic burden on a people composed of diverse elements at all levels and in all occupations. The achievements that it might show in a few selected areas are bought at the cost of the freedom and enterprise of the individual. The individual and his creative ability are smothered by a proliferating bureaucracy and innumerable rules and regulations…’

The problem with State Capitalism, as Rajaji broadened, was its bureaucratic nature. The government, presumably functioning for the ‘welfare state’, had no real incentive to create, innovate, or ensure effective functioning of the many industries it had enveloped. Further, the central planning had resulted in large spendings on projects that did not necessarily yield an equitable return of investment, depreciating the value of Rupee. The vicious cycle came full circle with climbing foreign borrowings. The overarching Planning Commission turned into a brake-fail for the government’s PR as it redirected every uncomfortable economic query to the Commission, except the Commission did not entertain the press and were accountable only to the government. Not only did the Commission come to guide all policies under the economic sun, but the subject was removed from the floor of the Houses altogether. Thus, it effectively turned accountable to the Prime Minister only. Rajaji condemned this absolute control over the nation’s economy by a few men in power. The resultant policies ‘secured popularity’ by ‘offering distribution before production.’

Added to this was the grievance of the few private enterprises in the country that had to face more gluttony in the bureaucracy each time they walked through a government door. The stack of paperwork, the list of duties, the mounting sum of bribes — all ruinous to any semblance of ease of doing business in India. Rajaji coined this disservice as the ‘Quota License-Permit Raj’ or simply, the License Raj.

The most preposterous feature of the entire scheme, according to Rajaji, was its implementation under the pretext of a ‘welfare state’. ‘Public welfare is the only test by which economic policy should be justified and public welfare cannot be achieved except through the individual’s freedom to live, to work, to think and to aspire.’

Rajaji’s final term in public office commenced in 1952. He served as the Chief Minister of the Madras Presidency although he hadn’t contested elections. A hung legislature motivated the Governor to nominate Rajaji to the Legislative Council. For an ardent advocate of the democratic institution, this non-election to power hangs as an albatross around his neck. However, an often skipped fact is that he was the first Chief Minister to seek a vote of confidence in the Assembly he was meant to lead. ‘A party is put in office by reason of confidence in the leaders of that party. These should be guided not merely by a desire to keep the party contented and strong, but by the requirements of society for changes which stability itself calls for in changing times.’

Rajaji’s scathing critique of the ruling party and his staunch opposition to their economic schemes in part motivated him to seek an alternative. However, his belief in the principles embodied in the Constitution are what steered the morality of the ‘new party’. Labelled as a club of the ‘conservatives’ by its opponents, and a constitutional reckoning by its proponents, Swatantra was and is the first and the only liberal party of India with principles extending beyond the role of a constructive opposition.

\[…\] the Swatantra Party is a national movement rather than a party. If there is strength and grit in the nation to resist the totalitarianism that is in the offing, all fear and hesitancy will dissolve and disappear and we shall move on under God’s care, whoever is there or not there. It is really a movement of emancipation and the youth of the country \[…\] Youth and intelligence have been boycotted or misled by the totalitarians. We detest the slogans of class and caste hatred that come too easily to hand in political rivalries. We wish to release youth from the spell cast over them…’

At the age of 83, Rajaji accepted the Government’s offer to tour the West and promulgate nuclear disarmament. For this mission he was joined by R.R. Diwakar and B. Shiva Rao. On American soil he met representatives of the United States and the Soviet Union, he held meetings with Henry Kissinger and Robert Oppenheimer, he delivered lectures to young minds on college campuses, he was invited to speak at the Council for Foreign Relations in New York, and finally, he met the President himself. President John F. Kennedy had allocated Rajaji twenty-five minutes to present his case. And while that was sufficient time for Rajaji’s adroitness, the meeting went on for over an hour as the President kept dismissing his secretaries as they unsuccessfully reminded him of his delayed appointments. He would later explain to a colleague, ‘…seldom have I heard a case presented with such precision, clarity and elegance of language.’

45 years after his demise, as India explores her destiny, Rajaji’s views transcend history and remain a powerful reckoning. He was an unconventional thinker, rooting his designs in the reality of his times. His thoughts would bloom-in-full as he debated the feasibility, or the lack thereof, of economic schemes, forms of government, the Constitution and the plots for its amendment. However, at the core of his being was faith in individual liberty which, he believed, was the heart and soul of a democratic society. As our nation progresses into unchartered waters of global identities and the regression of populism, Rajaji’s counsel serves as a looking glass, one that will guide us on the involuted path of liberty.

*REFERENCES*

*1\. Srinivasan, Vasanthi (2012) Gandhi’s Conscience Keeper: C. Rajagopalachari and Indian Politics; Permanent Black  
2\. Guha, Ramachandra (2010) Makers of Modern India; Penguin India  
3\. Shah, Parth, ed. (2001) Profiles in Courage: Dissent on Indian Socialism; Centre for Civil Society*

* * *

**About Rishika Yadav**

Rishika is a jack of all trades and a Master in history. She has completed her post-graduation in International History from the London School of Economics and Political Science (LSE). An avid writer by passion, she enjoys composing poetry and has self-published novels.

## Chutney on a Leaf: The Life and Times of Chakravarti Rajagopalachari (I)

Original: https://www.spontaneousorder.in/p/chutney-on-a-leaf-the-life-and-times-of-chakravarti-rajagopalachari-i

Author: Spontaneous Order

Published: 2018-08-03T13:06:09.000Z

Topics: rajagopalachari, indian-independence, administrative-reform, gandhian-politics

> Chakravarti Rajagopalachari, born on 10 Dec 1878, to Chakravarti Venkataryan and Chakravarti Singaramma, in the village of Thorapalli in Madras, was the youngest of three brothers. Early on Rajaji displayed two traits that would soon become unique to hi..

**Summary:**

Chakravarti Rajagopalachari (Rajaji), born 10 December 1878 in Thorapalli, Madras, embodied an independent-minded rationalism within Gandhian satyagraha, forsaking a lucrative Salem legal practice in 1900 to champion Gandhi early by reprinting 'Jail Experiences' and hosting the planning of the Rowlatt Satyagraha. Titled 'Gandhi’s Southern Commander' and 'conscience-keeper,' he led the 1930 Tanjore Salt March, founded a Salem ashram modeled on Sabarmati, and pursued constructive programs like prohibition and employment for the oppressed. Under the 1935 Government of India Act, Rajaji pragmatically participated in elections, securing 5326 of 5968 votes to become Madras Premier, negotiating safeguards against viceregal overreach. His administration showcased classical-liberal meritocracy: appointing a European Presidency Magistrate, gifting khadi to his Chief Secretary, removing a colonial statue, enforcing political neutrality in the bureaucracy against Nehru's wishes, legalizing Harijan temple entry, and implementing selective prohibition by raising alcohol prices. Diverging from Congress orthodoxy amid WWII, he opposed Quit India—citing Japanese invasion risks, Muslim League radicalism, and British vulnerability—advocating defence cooperation and the 'C.R. Formula' with plebiscites in Muslim-majority districts to avert or mitigate Partition, prioritizing reason over ahimsa dogma.

**Key points:**

- Rajaji championed Gandhi's cause early, led the 1930 Tanjore Salt March, and founded a Salem ashram while devising programs for Harijan emancipation.
- As Madras Premier under the 1935 Act, he won election with 5326/5968 votes and governed with merit-based appointments, bureaucracy neutrality, and reforms like temple access for Harijans and selective prohibition.
- He opposed Quit India in 1942, arguing for pragmatic defence cooperation given Japanese threats and Muslim League demands, and proposed the C.R. Formula featuring plebiscites in Muslim-majority districts.

**By Rishika Yadav**

* * *

Chakravarti Rajagopalachari, born on 10 Dec 1878, to Chakravarti Venkataryan and Chakravarti Singaramma, in the village of Thorapalli in Madras, was the youngest of three brothers. Early on Rajaji displayed two traits that would soon become unique to him, an independent mind and a poor eyesight. At the age of 11 he was admitted to the Central College in Bangalore, and post-matriculation, he pursued higher studies at the Madras University with a specialisation in Criminal Law. In 1900 Rajaji set up a successful practice at Salem, served as a Chairman of the Salem Municipality from 1917–19, and founded the Salem lodge of the Freemasons. Entering the political area in 1916, Rajaji joined the Home Rule League movement. He rallied the cause from his stronghold, explicitly supporting Tilak’s stance of ‘conditional support’ to the War effort- as opposed to Gandhi’s stance of unconditionally backing the Empire.

Despite his opposition, Rajaji was a Gandhian at heart. He was one of the first to believe in the dissenting barrister from South Africa even before his return to India. On his own expense, he re-printed Gandhi’s ‘Jail Experiences’, and would raise and wire funds for his cause across the Indian Ocean. It was at Rajaji’s abode that the Mahatma envisioned his first nationwide Satyagrah against the Rowlatt Act. Undoubtedly, Rajaji was the first to champion the cause, forsaking a lucrative career in the Courts. Only once more did he adorn his coats, that too to defend a Harijan convicted of entering a temple. Rajaji’s charisma, leadership, and his devotion to the principles of Satyagrah earned him the title of ‘Gandhi’s Southern Commander’ as well as his ‘conscience-keeper’. In 1925 he founded an Ashram near Salem, engineered on the lines of the Sabarmati Ashram. His commitment to society’s damned extended beyond social service, instead he devised constructive programs on prohibition and generation of employment to emancipate the oppressed classes. In 1930, Rajaji lead the Salt March at the Tanjore coast-line and courted arrest. Of Rajaji’s allegiance, Gandhiji mused, ‘I have boundless faith in his wisdom, his uprightness, and his unsurpassed ability as a Parliamentarian \[…\] We have in our ranks no abler fighter in Satyagrah.’ But Rajaji’s loyalty was neither blind nor without sense. He was a man of reason, unafraid to air his views.

Under the 1935 Government of India Act, the Empire granted her prized colony limited self-rule. This allowed a selected electorate the right to vote representatives to provincial legislatures- an unfavourable proposition for the mass of political agitators, Rajaji included. Even so, unlike most of his counterparts, Rajaji could see the silver lining, and despite its limited capacities, he viewed the 1935 Act as a real opportunity for social reform. It was his belief that only a ‘moral’ society could create an ethical leadership as it is the ‘…level of character among people generally, which has a continuous effect for good or evil on the character of the members of the administrative staff and the ministers.’ Thus, between partaking in elections and boycotting them, participation was the ‘lesser evil’. To this end, Rajaji contested elections from the Madras Presidency with one press statement that requested his audience to excuse the inexpensiveness of his campaign and to bless him with the opportunity to carry-forth progressive change. Of 5968 votes cast, Rajaji secured a comfortable 5326. Prior to accepting the Premiership of his won province, he negotiated terms with the Viceroy of Madras, obtaining his verbal agreement to not arbitrarily abuse his authority over the newborn legislature. Thus began Rajaji’s second term in public office, from Salem to Madras, only this time the cards he was dealt was a hand like no other. Rajaji found himself leading a bureaucracy of Englishmen to better his home.

The listicle of Rajaji’s greatest achievements as a Statesman is a long one to say the least. But it was in the colonial offices of his Ministries, running the daily show, that Rajaji’s true genius was on display. The Premier chose ability over race, and appointed a European as the Presidency Magistrate. To his Chief Secretary, Charles Brachenbury, he gifted a handsome Khadi suit. In the dead of the night he had the statue of General Neil, a suppressor of the 1857 rebellion, removed from the town centre and shifted it to a museum. He disallowed political affiliation of any government employee to any political party including Congress, much to Nehru’s displeasure. He kept his meetings short, his questions curt, and his spectacled gaze pierced beyond the apparent. Years later, of his conduct as Head, Sardar Patel would recount, ‘It was he who laid the foundations of India’s Parliamentary life in Madras. Those were the days when doubts were expressed about the capacity of our people to carry on the work of administration efficiently, when there were others to watch us…,’ His skilled hand at administration was accompanied with a firm one at reformism. Most notably, Rajaji legalised entry of Harijans into temples, selectively introduced prohibition (opting to make alcohol an expensive affair instead of an illegal one), disallowed the recruitment of anyone but a Harijan for vacancies reserved for them no matter how long the search lasted.

If Rajaji’s Premiership was any indicator, it was that his kind of politics was far more adherent to reality than that of his counterparts, including Gandhi. With a new World War afoot, the sour wounds of broken promises parted once more. The Empire, ignoring the historical irony, once more promised to ‘quit India’ if she allied with them in the War. However, this time the top-brass of Congress had no intention of even endorsing the Empire’s agenda of ‘freedom and liberty’. They demanded independence, and they demanded it at once. Here Rajaji differed.

It was Rajaji’s belief that considering the British predicament, the radicalisation of the Muslim League’s demands, and the possibility of a Japanese invasion, it was in the nation’s best interest to negotiate a deal for self-rule with the Empire- an unpopular and an unwelcome opinion. In 1941 Rajaji came out publicly against Gandhi arguing, ‘We keep our face steadily in the direction of ahimsa but cannot make the mistake of killing the principle itself by opposing it to common sense or reality. The defence of India is a case to be treated as an exception.’ Rajaji was one of the first to forsee the inevitability of Pakistan and devised the innovative ‘C. R. Formula’ to tackle with the question of Pakistan, addressing both- tactics to avoid the split, and measures to control the loss of life and property in case of it. A primary feature of the formula was to conduct plebiscites in muslim-majority districts. The Muslim League rejected it. Rajaji distanced himself from ‘Quit India’, arguing it did not account for India’s volatile reality. This was yet another opinion that was unanimously unwelcome, but Rajaji had always been one to stick to his guns.

And so there were two.

*REFERENCES*

*1\. Srinivasan, Vasanthi (2012) Gandhi’s Conscience Keeper: C. Rajagopalachari and Indian Politics; Permanent Black  
2\. Guha, Ramachandra (2010) Makers of Modern India; Penguin India  
3\. Shah, Parth, ed. (2001) Profiles in Courage: Dissent on Indian Socialism; Centre for Civil Society*

* * *

**About Rishika Yadav**

Rishika is a jack of all trades and a Master in history. She has completed her post-graduation in International History from the London School of Economics and Political Science (LSE). An avid writer by passion, she enjoys composing poetry and has self-published novels.

## Musings: Voltaire On Trade

Original: https://www.spontaneousorder.in/p/musings-voltaire-on-trade

Author: Spontaneous Order

Published: 2018-08-03T12:57:42.000Z

Topics: free-trade, merchant-value, anti-aristocracy, classical-liberalism

> In France the Title of Marquis is given gratis to any one who will accept of it; and whosoever arrives at Paris from the midst of the most remote Provinces with Money in his Purse, and a Name terminating in ac or ille, may strut about, and cry, Such a M..

**Summary:**

Voltaire critiques the French aristocracy, noting that the title of Marquis is bestowed gratis to anyone willing to accept it, allowing provincials with money and names ending in 'ac' or 'ille' to arrive in Paris and lord over traders with contempt. Traders, in turn, internalize this disdain and blush at their profession. Yet Voltaire argues that the merchant is far more useful to the nation than the powdered lord who obsesses over royal schedules and grovels in ministerial antechambers. The merchant, from his counting-house, enriches his country by dispatching orders to distant Surat and Grand Cairo, contributing to global felicity. This classical-liberal musing elevates productive commerce over idle nobility, implicitly endorsing trade as the engine of national prosperity and human happiness over hereditary privilege and courtly flattery. Spontaneous Order shares this to highlight liberal values against pseudo-socialist banalities in Indian history.

**Key points:**

- French aristocrats like Marquis gain titles gratis and disdain traders, who blush at their profession.
- Powdered lords focus on court trivia and servility, offering no value to the nation.
- Merchants enrich countries through global trade to places like Surat and Grand Cairo.
- True national utility and world felicity come from commerce, not nobility.

**By Spontaneous Order**

* * *

In France the Title of Marquis is given gratis to any one who will accept of it; and whosoever arrives at Paris from the midst of the most remote Provinces with Money in his Purse, and a Name terminating in ac or ille, may strut about, and cry, Such a Man as I! A Man of my Rank and Figure! And may look down upon a Trader with sovereign Contempt, whilst the Trader on the other Side, by thus often hearing his Profession treated so disdainfully, is Fool enough to blush at it. However, I cannot say which is most useful to a Nation; a Lord, powder’d in the tip of the Mode who knows exactly at what Clock a King rises and goes to bed; and who gives himself Airs of Grandeur and State, at the same Time that he is acting the Slave in the Anti-chamber of a prime Minister; or a Merchant, who enriches his Country, dispatches Orders from his Compting-House to Surat and Grand Cairo, and contributes to the felicity of the world.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## The Right to Die with Dignity

Original: https://www.spontaneousorder.in/p/the-right-to-die-with-dignity

Author: Spontaneous Order

Published: 2018-08-03T12:54:24.000Z

Topics: euthanasia, right-to-die, voluntary-choice, public-opinion

> Our society was founded in May 1981. It was the first of its kind in India, and as soon as we were established, we applied for affiliation to the World Federation. We are happy to join this society of enlightened, decent people. About six months before ..

**Summary:**

Minoo Masani, advocating from a classical-liberal perspective, recounts the founding of India's first Society for the Right to Die with Dignity in Bombay in May 1981, which promptly affiliated with the World Federation. He highlights the case of Gopal Mandalik, an esteemed 80-year-old social worker from Pune who, not terminally ill but feeling his life's mission complete, wrote to Prime Ministers Morarji Desai and Indira Gandhi in 1979 requesting decriminalization of suicide under India's Penal Code. Receiving no reply after two years, Mandalik ended his life in 1981, leaving a poignant declaration regretting the unusability of his donated eyes and kidneys due to poisoning. Masani notes strong support from Indian doctors for legalizing voluntary euthanasia to act openly, and dismisses religious opposition: Hinduism's sanyas tradition supports retirement from life after fulfilling duties, while the Catholic Church permits withdrawing treatment. He counters innate conservatism invoking abstract sanctity of life or karma by emphasizing voluntariness and individual sovereignty, quoting 'Whose Life Is It Anyway?': society should neither force life nor death against one's choice, at least in terminal illness and beyond. Masani concludes public opinion is volatile and often more amenable than perceived, citing unanimous parliamentary support for the 1971 Medical Termination of Pregnancy Bill after initial fears of backlash.

**Key points:**

- India's first Society for the Right to Die with Dignity was founded in Bombay in May 1981 amid calls to decriminalize suicide.
- Gopal Mandalik, aged over 80 and not terminally ill, suicided in 1981 after unanswered pleas to two Prime Ministers to legalize his choice.
- Indian doctors largely support legal voluntary euthanasia to practice humanely without fear.
- Hindu sanyas tradition aligns with retiring from life after duties, countering perceived religious opposition.
- Public opinion shifted rapidly on abortion legalization in 1971, suggesting similar potential for euthanasia.

**By Spontaneous Order**

* * *

Our society was founded in May 1981. It was the first of its kind in India, and as soon as we were established, we applied for affiliation to the World Federation. We are happy to join this society of enlightened, decent people.

About six months before we formed the Society, a very fine social worker in Pune, which is near our city of bombay, called Gopal Mandalik exceeded the age of eighty. He was not terminally ill, but he had done a great deal for society, was a highly esteemed citizen. He felt that while he was in good shape, it was time to go. It was not a case of terminal illness at all. It was just a wish of a man who thought his life’s mission had come to an end. He was a law abiding citizen and, as i told you, under the law in India an attempt at suicide is a crime. So he wrote to two successive Prime Ministers, one of whom was Mr. Morarji Desai and the other was Ms. Indira Gandhi, requesting them to change the law and remove this obnoxious provision from the Penal Code so he could kill himself in a legal way. He did not have the courtesy of a reply from either of our Prime Ministers who were too busy politicking. After two years, he lost his patience and he did what he intended to do. He said “I’ve waited long enough” and he left a dying declaration which was published at the time. It was a very touching document. He said “I’ve served my country and my people for 80 years and more. I thought it was time to go. I wrote to two Prime Ministers. I thought the courtesy of a reply was due to me, but I got nothing. So, after two years, I have decided to act in accordance with my conscience and I am therefore going now to put an end to my life. My only regret is that my eyes and my kidneys that I had donated for constructive purposes will be poisoned and no longer be of any use.” He left this rather touching document which was fairly widely published.

Our doctors by and large are friendly. I have been to several hospitals to speak to doctors and students, and by and large the medical professionals would like us to make legal and respectable what is humane but illegal in India today, so that they could act without fear and in an open manner.

There is a great deal of innate conservatism which is not religious opposition. The catholic Church has already moved a little. I often quote in India the latest declaration of the Catholic Bishop’s Conference which is quite reasonable and allows a doctor to withdraw treatment if he feels like, even if the patient dies. The Catholic Opposition is not very important, it is a small Catholic community, and the Hindu tradition fortunately is not unfavourable. Contrary to general belief the Hindu tradition is in favour because the classical Hindi tradition is that, when a man has served his purpose, performed his functions in life, brought up a family and has no direct obligations, it is time for him to retire. He need not die but he should retire from life. It is called sanyas and it takes the form of going to jungle, or going up the peaks of the Himalayas, getting lost and never being heard of again.

So there is no religious opposition in India but there is a great deal of conservatism, people talking of life being sacred in the abstract, talking about Karma. For instance, at a public meeting an old Indian gentleman got up and said, “I agree with what you were saying Mr. Masni but I believe in Karma, and if my soul does not suffer now it will suffer later. So I rather suffer now if you do not mind.” I said: “I do not mind at all. We believe in Voluntary Euthanasia. You sir can go on suffering but do you mind if I do not believe in Karma? So we both agreed. There is no attempt at uniformity or legislating. It is a voluntary thing, and those who like me have seen the play “Whose Life is It Anyway” remember that Ken say, “If I choose to live, it would be appalling if society killed me. If I choose to die it is equally appalling if society keeps me alive”. This is the philosophy on which we act- the right to choose between life and death, certainly in limited conditions like terminal illness, but also in all conditions.

My parting thought would be that public opinion sometimes is misleading. It may look hostile but may be very volatile. As has been said, “Public opinion is a fickle jade.” I have had very practical experience of this. I was on a Select Committee of Parliament to discuss the Medical Termination of Pregnancy Bill which was passed in India in 1970 after which abortion became legal. I was a supported of the Bill and was very glad to see that not a single member of the Select Committee of Parliament objected in principle to legalising abortion. Now I mention this because five years earlier, at an airport, I had met a very venerable leader of our Birth Control movement, Lady Rama Rao, of whom some of you probably know, and I said: “Lady Rama Rao, would you like me to move a Private Member’s Bill to legalise abortion?” She said, “My dear fellow, I am all for it, but do not do it. I said “Why”. She said, “No no, public opinion will be so hostile there will be backlash and contraception will be hit. That is all you will succeed in doing, to get us attacked.” I said. “All right if it is counterproductive I won’t do it” and I didn’t. Five years later the Government of India brought in a Bill and nobody said no and I thought to myself, “We are sometimes unfair to public opinion because we do not really test it.”

*Author: Minoo Masani*

*Excerpt is from the publication “Freedom First: A Quarterly of Liberal Ideas”, November 20, 1995*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Trade ‘Trumps’ Rule: The Great American Nightmare

Original: https://www.spontaneousorder.in/p/trade-trumps-rule-the-great-american-nightmare

Author: Spontaneous Order

Published: 2018-08-03T12:39:52.000Z

Topics: trade-policy, protectionism, wto-disputes, us-tariffs

> ‘America First’, a rhetoric that resonates so dearly to President Trump, acquired a new tone at the latest edition of the World Economic Forum. This rhetoric is no longer rhetorical. The past few months have marked the commencement of a trade strategy

**Summary:**

Trump's 'America First' trade policy uses domestic tools like Section 201 of the US Trade Act to impose tariffs and quotas on imports—such as washing machines from South Korea and solar panels from China—to protect US manufacturing from Asian competition, but this strategy flagrantly violates WTO rules under GATT Article XIX, neglecting mandatory 'unforeseen developments' and differing on 'causal connection' interpretations. The USITC processes petitions without ensuring WTO compliance, amid US non-implementation of DSB rulings, including India's concerns over countervailing duties on hot-rolled steel and Mexico's $472.3 million retaliation authorization for tuna disputes; a 2016 Third World Network report notes most US non-compliance favors developing countries. DSB has consistently ruled against US Section 201 invocations, like in Lamb (1999) and Steel (2001) cases. Presidents have implemented only 19 of 40 affirmative investigations, per Peterson Institute, due to higher consumer prices (e.g., solar panels retarding clean energy), retaliation risks, and signaling broader protectionism. Short-term tariffs fail to shift production bases sustainably—Samsung's California plant notwithstanding—and cause trade diversion. This burdens US consumers and 85% of 260,000 solar jobs in non-manufacturing, eroding WTO relevance; the classical-liberal imperative is to challenge it multilaterally for rule-based free trade.

**Key points:**

- Trump's Section 201 tariffs violate GATT Article XIX by omitting 'unforeseen developments' and misapplying causal links, as ruled in multiple DSB cases.
- US non-compliance with DSB rulings, like India's steel duties dispute and Mexico's $472.3M tuna retaliation, undermines WTO credibility.
- Protectionist measures raise US consumer prices, risk retaliation, and fail to relocate foreign production long-term, per Peterson Institute analysis.
- Policy invites floodgates of domestic petitions, signaling eagerness for discretionary trade barriers and trade diversion from targeted nations.

**By Karan Tripathi**

* * *

‘America First’, a rhetoric that resonates so dearly to President Trump, acquired a new tone at the latest edition of the World Economic Forum. This rhetoric is no longer rhetorical. The past few months have marked the commencement of a trade strategy that creates artificial imbalances in the movement of free trade with the help of domestic legislations in an attempt to induce global production chains to ‘migrate’ to America. This strategy is simultaneously accompanied by a selective projection of trade concerns, where the focus is only limited to areas wherein trade in American exports is distorted by other countries — for instance, violation of Intellectual Property Rights and subsidies. Therefore, it becomes extremely significant to not only pierce through this motivated international campaign but also to critically analyze the structural possibilities of this ‘Great American Dream’.

The idea of ‘America First’ in U.S. Trade Policy reflects heavily upon the development in the manufacturing industry. The idea is to check competition by using tariff barriers such as Anti-Dumping Duties as well as to increase the existing tariff by invoking ‘safeguard’ clauses as mandated by Section 201 of the U.S. Trade Act, 1974. This tariff manipulation is envisaged to incentivise domestic producers, while hoping that no major negative impact will be seen in terms of consumer inflation and employment in service sector. One can see the United States International Trade Commission (USITC) being flooded with petitions asking for relief from the ‘damage’ caused by the import of certain consumer goods from Asian countries such as China, South Korea and India. However, what is hidden is the rationale applied by the USITC in conducting fair investigations and making sure that the petitions as well as its own reports comply with the obligations under WTO.

This ‘uncontested’ procedure is a matter of grave concern when it comes to implementing a rule-based international trade regime. Since the establishment of the WTO, none of the cases wherein invocation of safeguard measure clause was the matter of contention has been adjudicated in the favour of the United States. In addition to this, US has been constantly reminded by other members of its non-implementation of the Dispute Settlement Board’s (DSB) rulings. For instance, India highlighted its “significant concerns” about the steps taken so far by the US for implementing the DSB recommendations in the dispute concerning the countervailing duties on the Indian hot-rolled carbon steel products while Mexico sought authorisation for slapping trade retaliatory measures to the tune of US$472.3 million on American goods because of Washington’s repeated failures to comply with the DSB’s recommendation in the long-drawn dispute over import and sale of tuna and tuna products from Mexico. A Third World Network Report of March 2016 shows that most of the non-compliance by the US relates to the rulings given in the favour of the developing countries.

In the background of its bad reputation in implementing the WTO dispute resolution rulings, the Trump regime goes on to impose further import tariffs on washing machines from South Korea and solar panels from China. The use of heightened tariff barrier is not only against the commitments made by the US during the Uruguay Round negotiations, but the provisions applied from the domestic law are also not in compliance with the nation’s obligations under WTO. Section 201 of the U.S. Trade Act (1974), which permits the President to impose import tariffs or quotas for the ‘positive adjustment’ of competition if the domestic industry has been severely injured by the rising quantity of imports, has always been called out for its lack of compliance with Art XIX of GATT which lays down safeguard provisions. In all the cases where the measure taken under section 201 has been challenged before the DSB, the ruling has always struck down the measure.

One of the major reasons being, as mentioned in both the US Lamb (1999) and US Steel (2001) cases, is the absence of ‘unforeseen development’ in the conclusion of the investigation report. While Art XIX of GATT makes the presence of ‘unforeseen development’ mandatory for the invocation of the safeguard measure, the same is neglected in the drafting of Section 201.

Another bone of contention between WTO and Trade Act is the ‘causal connection’ requirement. To serve as a basis for a safeguard action, U.S. law requires the ITC to find that the increase in imports is a substantial cause of serious injury or threat thereof. Article 4.2(b) of the Agreement on Safeguards also requires the aggrieved party to demonstrate “the existence of the causal link between increased imports of the product concerned and serious injury or threat thereof.” However, the ITC and the WTO have interpreted this requirement quite differently. While the ITC requires that there be a causal link between imports and injury and that other sources of injury not be attributed to the imports at issue, the WTO has effectively established a requirement that the ITC must distinguish and weigh all of the possible alternative causes of injury other than the imports at issue.

It is the very nature of Section 201 that has made most of the American Presidents skeptical of its invocation for positive adjustment of trade. Out of the 40 investigations that voted affirmative for invocation of Section 201, the past Presidents have implemented the trade barriers only 19 times, that too the last one coming way back in 2001. A report by Peterson Institute for International Economic gives three reasons for such reticent behavior:

Import restrictions would increase the price of solar panels and washing machines to US consumers. In the case of solar, this would retard development of clean energy and negatively impact downstream employment prospects in solar panel distribution and installation.  
Second, adversely affected trading partners may seek compensation for new US import restrictions that curtail their exports. This could arise via a formal WTO dispute, if not through alternative means of retaliation that hurts other US companies and workers.  
It sends the signal to other American industries that the president is eager to grant discretionary trade protection. This could result in a flood of such requests. These will further increase business uncertainty, impose even more costs on the US economy, and increase the scope of trading partner retaliation.  
One of the reasons for imposing such tariff can be the hope of Trump administration to force foreign companies to shift production base in the US mainland. In order to avoid the increased tariff, companies can shift their production base to the US, giving a fillip to the rate of employment in the manufacturing sector. For instance, Samsung is already planning to open up a production base in California. However, the short duration of these tariffs (mostly 3–4 years) does not provide enough incentive to the foreign companies to make such a shift as the costs incurred in the process of shifting production might be much larger than the reduction in profit due to increased tariff. Therefore, South Korea is planning to approach WTO for a dispute settlement as the companies producing large washers are not willing to shift their production base to the US. American Trade expert Chad P. Brown argues that this move by the Trump administration will lead to trade diversion where the volume of trade does not change much but the supplier moves from one country to another.

Economic theory also suggests that Trump’s new import restrictions would result in higher consumer prices and fewer purchases, thus imposing costs on the US economy. Other parts of the US renewable energy industry are likely to get severely affected from trade action against solar panel imports. The Solar Foundation finds that 85 percent of the 260,000 US industry jobs are outside of manufacturing. Employment in distribution and installation of panels would be put at risk if the price of solar energy increases and consumers such as utilities switch to different forms of electricity, such as wind, coal, or natural gas.

The manifestation of ‘America First’ rhetoric in the trade policy has a possibility of opening floodgates of complaints by American domestic producers under Section 201 of the Trade Act, severely affecting the anti-protectionism commitment of the US. Apart from Section 201, US has also been manipulating the anti-dumping provisions in order to impose further trade restrictions on imports. For instance, the Department of Commerce recently initiated anti-dumping investigations against Chinese aluminum foil sue moto, subverting the section VI of GATT which makes it mandatory for the complaint to be filed by the domestic producers in order to commence the investigation. Therefore, it can be safely said that the trade policy of Trump is anything but rule-based, and the same needs to be addressed at appropriate forums in order to maintain the relevance of the multilateral trade bodies such as WTO.

* * *

**About Karan Tripathi**

Karan Tripathi is an undergraduate student at Symbiosis Law School, Pune and takes up additional courses at Symbiosis School for Liberal Arts. He holds diplomas in European Union Legal Studies and IPR-Competition Laws and certification in International Environment Law and Policy. Apart from law, Karan is a devoted patron of jazz, ancient languages, cinema, and dreams to act alongside Isabelle Huppert one day.

## Brilliant Democracy, Lousy Economics: Let’s Talk Cash

Original: https://www.spontaneousorder.in/p/brilliant-democracy-lousy-economics-lets-talk-cash

Author: Spontaneous Order

Published: 2018-08-03T12:34:37.000Z

Topics: free-markets, command-economy, economic-reform, public-sector-failure

> Command politics has been dumped and it’s time to dump command economy too. India, in all its diversity, is too complex to have one size fit its entire top-down planned economy. “State knows best”, “bureaucrats are honest brokers”, “politician

**Summary:**

India must abandon its command economy just as it dumped command politics, as the nation's diversity defies top-down planning and outdated beliefs in state omniscience. Free markets embody economic democracy, empowering consumers to 'vote' with rupees among competing options, unlike socialism that hands control to bureaucrats and politicians who exploit opportunities. Over 52 years, state control has failed spectacularly: public sector investments average a mere 1% return, below the 5% from bank savings, turning national savings into a 'dumpster' and blocking wealth creation essential to free half the population from poverty. Echoing Hayek's warning that socialism leads to serfdom, the author urges India to follow Germany and Japan's post-war recoveries and China's reforms 20 years ago. Indians, smart and creative for the information economy, were wasted in state-mandated import substitution; free enterprise is the proven path to rapid wealth generation.

**Key points:**

- India should dump its command economy after successfully rejecting command politics.
- Free markets put consumers in the driver's seat via spending choices, unlike statism that empowers bureaucrats.
- Public sector investments yield only 1% return, worse than 5% bank interest, wasting national savings.
- Embrace free enterprise like Germany, Japan, and China to create wealth and eliminate poverty for half the population.

**By Kanwal Rekhi**

* * *

Command politics has been dumped and it’s time to dump command economy too.

India, in all its diversity, is too complex to have one size fit its entire top-down planned economy. “State knows best”, “bureaucrats are honest brokers”, “politicians are well meaning” — nobody’s buying that anymore. The last 52 years should be proof enough.

Free markets, on the other hand, are nothing more than an economic democracy. The public, as a consumer, votes with its rupees every time it chooses between the competing products and services in the market place. That puts the consumers in the driver’s seat. Socialism and statism, however, disenfranchises the public and puts bureaucrats and politicians in the driver’s seat, and they lap up every lucrative moment.

Free markets and free enterprise have been proven to be the best way to create wealth in nations. India needs to create wealth as fast as possible, if it is hopes to eliminate the poverty stranglehold that roughly half its population chokes on. The state’s command of the economy — from planning to ownership — has been tried long enough, and has failed outright. That’s no surprise. As Fredrick Hayak quite dramatically stated, socialism is a straight road to serfdom. The massive investments in state-run industry have been funneled into a national dumpster — a waste of national savings. India’s return on public sector investments has averaged about one percent. So, forget about it producing any surplus — it doesn’t even cover the cost of capital. Literally, India would have been better off putting this money in a savings account. At least that’s an interest rate of five percent from the bank!

Germany and Japan hunkered down and put their economies together the old fashioned way. China got down to business and started restoring its economic vigor some 20 years ago. It is time India got its act together. Indians are smart, creative, and specially blessed in this New World of information and intellectual property-based economies. And yet, not too long ago, smart Indians were relegated to doing second rate research and development in the state mandated import substitution regime. What a waste!

Note: The full article can be accessed [here](http://ccs.in/brilliant-democracy-lousy-economics).

* * *

**About Kanwal Rekhi**

Kanwal Rekhi, former Chairman of Centre for Civil Society, is also the past Chairman and trustee of TiE, The Indus Entrepreneurs, a nonprofit support network to provide advice, contacts, and funding to Indian Americans hoping to start businesses. He is also the board member of Pan IIT USA, Inc, the alumni organisation of the Indian Institutes of Technology

## Transparency of Rights Act: Good Governance and Civil Society

Original: https://www.spontaneousorder.in/p/transparency-of-rights-act-good-governance-and-civil-society

Author: Spontaneous Order

Published: 2018-08-03T12:29:44.000Z

Topics: transparency, governance-reform, civil-society, rti-act

> Presently, to engage with any public department, the Common Man must scavenge through stacks of notifications in an attempt to discern the requirements of the said department. Despite all this research there is still no guarantee that he won’t have to h

**Summary:**

The Transparency of Rights Act (TORA) promises to fix Indian administrative inefficiency by mandating departments to publish citizen-facing rules, regulations, and forms on websites in a unified, time-stamped, Wikipedia-like interface. However, from a classical-liberal viewpoint, TORA is no innovation but a redundant mutation of existing frameworks: the Constitution-directed Gazette of India already publishes Acts digitally, and the RTI Act requires public authorities to provide access to rules, regulations, and manuals. The real gap is execution, as RTI faces chronic issues like unappointed Public Information Officers, lack of public education, untrained staff, and cumbersome filing—problems TORA would replicate by creating a new apex oversight body, more bureaucrats, and penalties, exacerbating bureaucratic bloat. The Economic Survey rightly shifts accountability from citizens to departments, but without fixing RTI loopholes via the Central Information Commission (CIC), TORA remains utopian. True governance accountability demands pre-emptive civil society involvement—NGOs, research institutes, activists—with expertise and incentives to enforce transparency, rather than post-hoc judicial fixes that enable 'creative law-bending.' Law-makers must integrate civil society as stakeholders, as past movements like the 2011 Jan Lokpal agitation highlight government reluctance.

**Key points:**

- TORA duplicates transparency mandates already in the Gazette of India and RTI Act by requiring online, wiki-like publication of rules.
- RTI implementation fails due to missing PIOs, lack of education, and poor infrastructure, vulnerabilities TORA would inherit through added bureaucracy.
- Empower the CIC to enforce streamlined, time-stamped digital interfaces under existing RTI provisions instead of new laws.
- Civil society—NGOs, activists, and movements—must be embraced as governance stakeholders to achieve real accountability beyond ballot-box participation.

**By Rishika Yadav**

* * *

Presently, to engage with any public department, the Common Man must scavenge through stacks of notifications in an attempt to discern the requirements of the said department. Despite all this research there is still no guarantee that he won’t have to hop from counter to counter, from civil servant to civil servant. Inefficiency is perhaps the hallmark of the Indian Administration’s citizen-interface. The end game of this cat-and-dog chase is, and perhaps always will be, the stealthy saviour — the Peon.

The Transparency of Rights Act (TORA) is meant to amend this headache by requiring each department to adhere to the following three rules: (i) place every ‘citizen-facing rule, regulation, form’ on its website, (ii) that these regulations and procedures be updated and unified at all times in a Wikipedia-like interface, (iii) that the notifications and updates be thoroughly time-stamped. On the outset, the Act seems like an all-encompassing solution for the digital literati. But consider this, having lived in a world that has been privileged to the joys of the internet for over two decades (and Wikipedia since 2001) — why didn’t anybody think of this before? Perhaps the slow-moving governance machinery is to be blamed (again). Or perhaps, TORA is not an innovation, but a mutation.

In unembellished terms, TORA suggests digitisation of regulations in an operational framework to catalyse transparency for citizens– both of these principles are already embedded in existing regulations. On the one hand the Gazette of India, as directed by the Constitution, debuts each Act and Amendment — in print and in its digital editions. The RTI Act, on the other hand, states that all public authorities shall facilitate access to ‘the rules, regulations, instructions, manuals and records, held by it or under its control or used by its employees for discharging its functions’. Thus, in principle, the ethics of transparency have already been underlined in existing Acts.

What separates TORA from the RTI and the Gazette is the instillation of executive capacities. The Economic Survey suggests that (if the notification or circular has not been updated on the website) the crux of accountability must rest with the Department and not the Citizen. What this translates into is the creation of an apex body that oversees the compliance of this accountability, the appointment of another set of bureaucrats to follow through the execution of this compliance, and finally, a new set of regulations that governs the nuances of TORA including penalties on infringing it. This presents a more ‘real-world’ challenge. RTI, on paper, was a leap forward in the age-old debate of citizen participation in real-time governance. However, despite being a decade old, it still suffers from infrastructural challenges, including non-compliance of its most rudimentary decree — the appointment of Public Information Officers. Other limitations, as listed on RTI Online, include the lack of government initiative to educate the masses about RTI, lack of enabling infrastructure, appointment of untrained PIOs, cumbersome process for filing, lack of assistance in filing RTIs especially for the uneducated or illiterate citizens, non-availability of user guidelines, and more. The utopian TORA will be vulnerable to similar failings. What is needed is not another inheritable Act, but an active initiative to fix the loopholes in the ones we already have. Guidelines to streamline the regulations and creation of a time-stamped Wiki-like interface can be issued and overseen by the CIC (Central Information Commission) just as well. The mandate for it already exists in the RTI, it just needs to be administered. Unless the loopholes in the execution of these principles are plugged — Acts like TORA and RTI will remain handicapped by the very institution that supposedly enables them.

Transparency in governance comes under the larger purview of accountability in governing institutions. The makers of our Constitution had gone at length to create a rigorous system of checks and balances that ensures accountability in our democracy. As our democracy matures, the sheer volume of its functioning has weighed down on its governance. Increasing the capacity of the judiciary, creation of separate quasi-judicial bodies, separating courts for separate industries to streamline the legal process are some of the solutions that have been proposed repeatedly. The problem with all such systems is that they are post-hoc. There needs to be reasonable cause for the judiciary to step in. The underlying assumption is that the fear of conviction will deter inefficiency and corruption in public institutions. What it really does is foster creative law-bending .

At present, neither the government nor the judiciary or any other quasi-judicial or independent body has the potential to take on the elephant in the room. Such a capacity cannot be built either. The only institution that has the ability, the resources, and the numerical strength to permanently and effectively take on this colossal responsibility (given the right tools) is the civil society. Non-governmental organisations, independent research institutes, people’s movements, lone-standing social activists are all members of an active democracy who have the expertise and the incentive to effectuate answerability in the establishment. However herein lies the inherent flaw in the whole system, the reluctance to involve civil society beyond the ballot. This is evidenced by previous campaigns against kleptocracy and abuse of power that yielded less than positive results. Most recently, the 2011 agitations, a people’s movement, and its demand for Jan Lokpal at the Centre remains ‘pending’ before the Parliament. RTI and the proposed TORA are underlined by the same drawbacks — despite seeming reformist, the intent to ensure transparent governance is absent as are the tools to effectively enforce it. This exercise of routinely passing ‘progressive’ Acts to foster transparency without built-in mechanisms for accountability is redundant. To create truly transparent and accountable institutions, the law-makers must be willing to embrace civil society as stakeholders in governance.

* * *

**About Rishika Yadav**

Rishika is a jack of all trades and a Master in history. She has completed her post-graduation in International History from the London School of Economics and Political Science (LSE). An avid writer by passion, she enjoys composing poetry and has self-published novels.

## What Aadhaar Needs: Right to Notice, Right to Object, Right to be Forgotten

Original: https://www.spontaneousorder.in/p/what-aadhaar-needs-right-to-notice-right-to-object-right-to-be-forgotten

Author: Spontaneous Order

Published: 2018-08-03T12:23:57.000Z

Topics: aadhaar, data-privacy, privacy-rights, right-to-be-forgotten

> Having envisaged a platform which enables the achievement of an “efficient, transparent and targeted delivery of subsidies, benefits and services”, the Aadhaar Act hopes for a machinery that allows the State to optimise its welfare delivery mechanism

**Summary:**

Aadhaar, designed for efficient, transparent subsidy delivery, faces criticism for enabling surveillance due to privacy risks, data ambiguity, and weak grievance mechanisms. The core issue is individuals' lack of control over how state and non-state actors process their personal data, a problem extending beyond Aadhaar to all data-collecting services. From a classical-liberal viewpoint, the solution lies in empowering individuals as the best judges of their data's use, via a comprehensive privacy framework. This requires an independent quasi-judicial body with diverse stakeholders to enforce accountability, plus mandates for entities to appoint data protection officers akin to RTI. Key are three rights: Right to Notice, ensuring real-time alerts and access to authentication logs for Aadhaar; Right to Object, enforcing informed consent as bedrock for data transactions with penalties for violations; and Right to be Forgotten, allowing data deletion post-service use or for abuse victims, as affirmed in Puttaswamy judgment. Incorporating 'Privacy by Design' defaults to maximum privacy. This setup balances individual autonomy, state efficiency, and justice without imposing uniform privacy definitions.

**Key points:**

- Establish an independent quasi-judicial body with stakeholders to oversee data protection and enforce accountability across all personal data handlers.
- Mandate a Right to Notice, providing individuals real-time notifications and logs of Aadhaar authentication requests.
- Implement a Right to Object, requiring informed consent for data use with penalties for non-judicial intrusions.
- Enforce a Right to be Forgotten, enabling data removal from databases post-service or for victims of abuse via the body or courts.
- Adopt 'Privacy by Design' to default services toward maximum privacy and consent.

**By Gopikrishnan Nair**

* * *

Having envisaged a platform which enables the achievement of an “efficient, transparent and targeted delivery of subsidies, benefits and services”, the Aadhaar Act hopes for a machinery that allows the State to optimise its welfare delivery mechanism in a manner that not only comes as monetary relief but also mitigates the significant human cost attached to leakages. Unfortunately, the benefits of such a system seem to be overshadowed by legitimate concerns pertaining to privacy and data protection. This further gets cemented given the ambiguity in collection and utilisation of sensitive personal data, the Orwellian dangers brought about by its sheer scale, and the inadequacy of current legal mechanisms to address grievances appropriately. Aadhaar, it seems to many, has transformed from being an instrument for subsidies to one of surveillance.

Now Aadhaar, by itself, is simply a means of identification, and the information that UIDAI stores is more or less restricted to the data it has obtained from the individual while registering. The distress emanates from the ways in which this identification system could be used, or rather misused, by state and non-state actors. Keeping aside the argument that such procurement of sensitive data is itself questionable on several grounds, the inability of the individual to control the ways in which their personal data is processed by different entities is the core problem. The unfortunate truth, in this day of technology, is that this ambiguity is not just restricted to Aadhaar, but any and all services that collect personal data. So even though much of the recent debate on Privacy emerges from and is centred around the Aadhaar Scheme, perhaps these concerns can be solved more wholesomely if the focus is on creating legal capacity that not just curtails the misuse of Aadhaar data, but of all personal data obtained by state and non-state actors.

For this, the constitution of an independent quasi-judicial body is essential. Such a body should include stakeholders from all concerned sectors if it is to have the bandwidth for enforcing the framework with accountability and effectiveness. Furthermore, all entities that deal with sensitive personal data should be mandated, on similar lines of the the RTI mechanism, to appoint a high ranking individual to be the point person for all data protection related queries. The primary aim of such a system (and the legislation it constitutes), would be to empower the individual with adequate rights over the usage of all personal data, to ensure more accountability from entities using this data, and for deterrence, impose significant penalties on any violation. Delving deeper into the terms of the legislation in itself, it is necessary that such a framework empowers each citizen with three important rights-Right to Notice, Right to Object and Right to be Forgotten.

To prevent misuse of personal data, it is essential to keep the individual informed of its use, as well as the nature of its use. To realise this, a ‘Right to Notice’ clause would be required to ensure an individual is notified the moment a request for the data is raised. In the specific case of Aadhaar, the individual should be able to access a time stamped list of authentication requests and be notified when different entities interact using said individual’s Aadhaar number. Taking this one step further, the concept of ‘Privacy by Design’ should be implemented where the default setting for all services that deal with personal data is set towards enabling maximum privacy and consent. Such privacy themed design structures would also ensure that the process of notifying the individual doesn’t remain a legally mandated afterthought, but develops into a core function that is facilitated by the system’s form.

While notifications play an important part in keeping the individual informed, the ‘Right to Object’ clause would empower the person to translate this information into action.The ability to refuse or object is a fundamental principle that is implicit across inter-personal transactions in free societies, and should certainly be made an essential component of all digitally enabled transactions as well. Informed consent should form the bedrock of all transactions pertaining to personal data, and all intrusions to this rule, unless judicially mandated, should be adequately penalised. Furthermore, this function should be realised by the independent body that oversees data protection and it should create adequate mechanisms for all individuals to exercise this right.

Finally, the clause pertaining to ‘Right to be Forgotten’ should enable citizens to get their information removed from the database of any entity. This clause, which has already been recognised in multiple judgements over the last few years including the landmark Justice Puttaswamy Vs GOI judgement, would enable citizens to opt-out of any service and ensure that their data is not being further used by the same entity. Considering that an individual’s data is akin to personal property, all transactions wherein the individual provided her or his personal data in exchange for better service should be time bound to the individual’s usage of said service. Additionally, such a clause should also enable victims of abuse, whose details have been publicised online, an opportunity to reinvent their lives. According to the nature of the situation, and subject to legal implications, this Right to be Forgotten can be availed either through the data protection body or through the courts themselves.

It is only through the efficient enactment and enforcement of these three rights under a larger privacy framework, backed by an independent quasi- judicial body, that the concerns regarding data protection can be addressed successfully. At the end of the day, the individual is the best judge on all transactions pertaining to personal data, and the function of regulations should be to ensure that the person is informed of its use and is given adequate avenues to exercise their rights in case of misuse. Maybe by not forcing others to follow our own narrow definitions of what privacy entails, and by merely empowering each individual to choose based on utility, we could enable a system that provides privacy for the individual, enables efficiency for the State and ensures justice for all.

* * *

**About Gopikrishnan Nair**

Gopikrishnan Nair has a Master’s degree in Political Communication and Strategy, and has experience working in a variety of PR/Marketing oriented roles that include working at the United Nations office in Brussels, supervising the Sales/Marketing department of a Digital Marketing agency, managing/co-founding a Socio-Environmental NGO and working as the Online Campaign Manager for a prominent politician during the 2014 Indian General Elections. Moreover, he has also helped organise various inter-collegiate, social and TEDx events. He likes recycling, chai and Old Monk.

## Musings: Grievances in and of the Supreme Court

Original: https://www.spontaneousorder.in/p/musings-grievances-in-and-of-the-supreme-court

Author: Spontaneous Order

Published: 2018-08-03T12:18:33.000Z

Topics: judiciary, judicial-reform, transparency, accountability

> On 12 January, four of the senior-most puisne judges of the Supreme Court of India invited a press conference to express their dissatisfaction with the Chief Justice of India (CJI). Speaking up against the arbitrariness in case allocation, a power exclu..

**Summary:**

On 12 January, four senior-most puisne judges of the Supreme Court of India held an unprecedented press conference to voice dissatisfaction with Chief Justice Dipak Misra over arbitrary case allocation, a power exclusive to the CJI as master of the roster, signaling a breakdown of trust. This exposes the absence of institutional mechanisms to address judges' grievances, symptomatic of broader judicial malaise including resistance to Right to Information Act application and opacity in appointments and promotions until October last year. The crisis indicts the institution as much as the individual, as the CJI can ignore it without ramifications, perpetuating a 'closed Big Boys Club.' From a classical-liberal viewpoint, the Supreme Court's credibility hinges on internal reforms to enforce accountability and transparency, insulated by judicial autonomy from external interference. Unwritten conventions govern administrative matters; experts suggest codifying them into a written document as a first step to guide judges and the public. Structural reforms are essential to prevent reliance on individual conscience, preserving public trust amid the CJI's silence.

**Key points:**

- Four senior Supreme Court judges held an unprecedented press conference on 12 January against CJI Dipak Misra's arbitrary case allocation, revealing a trust breakdown.
- Indian judiciary lacks institutional mechanisms for judges' grievances, marked by RTI resistance and opacity in appointments until recently.
- Codify unwritten judicial conventions on administrative matters like rosters and appointments into a written document to enhance transparency.
- Supreme Court must pursue internal structural reforms to maintain credibility without compromising judicial autonomy.

**By Vineet Bhalla**

* * *

On 12 January, four of the senior-most puisne judges of the Supreme Court of India invited a [press conference](http://indianexpress.com/article/india/supreme-court-crisis-4-retired-judges-write-open-letter-to-cji-dipak-misra-5024257/) to express their dissatisfaction with the Chief Justice of India (CJI).

Speaking up against the arbitrariness in case allocation, a power exclusive to CJI as master of the roster, in a manner unprecedented in the history of independent India, they left no doubt that there has been a complete breakdown of trust and communication between the CJI and the four judges.

A key takeaway from this fiasco is that there is no institutional mechanism in the judicial system to address the judges’ grievances. This is symptomatic of the larger malaise of lack of accountability within the Indian judiciary, indicated by, among other things, the Supreme Court’s [resistance](https://thewire.in/124766/judiciary-accountability-transparency-rti/) to the application of the Right to Information Act, and being completely [opaque](http://www.thehindu.com/opinion/editorial/towards-transparency/article19829914.ece) about judicial appointments and promotions till October of last year.

It is vital for us to keep in mind that this crisis is as much an indictment of institutional failure within the Supreme Court as it is of the individual occupying the CJI office. That Justice Misra can choose to completely ignore this matter without any ramifications is deeply troubling. Unless the judiciary makes some concerted efforts to whittle down the walls of its closed Big Boys Club (and the reforms need to come from within, since the principles of judicial autonomy effectively insulate it from any outside interference), it could risk losing the exalted status it occupies in the minds of the Indian public.

Currently, the unwritten rules of judicial convention dictate administrative matters in the court, from judicial appointments to setting of the case roster. The first step should be, [as suggested by several experts](http://indianexpress.com/article/opinion/columns/supreme-court-crisis-constitution-judiciary-cji-unconventional-wisdom-5026083/), to put these rules out in the form of a written document to act as an express guide to the Hon’ble Judges of the Supreme Court as well as the public on these matters.

The Supreme Court is far too important an institution to leave its credibility on the conscience of individuals. As doubts arise over the [silence of the CJI](https://scroll.in/article/865686/one-week-of-top-judges-dissent-to-ride-out-the-crisis-on-silence-is-a-disservice-to-the-people) over the matter, we must all keep this conversation going. What are the different ways in which structural reform can be brought into the workings of the apex court, without imperilling judicial autonomy?

*Views expressed are of the author’s, and should not be taken as the stance/opinion of Spontaneous Order or Centre for Civil Society.*

* * *

**About Vineet Bhalla**

Vineet Bhalla holds a B.A., LL.B. (Hons.) degree from the W.B. National University of Juridical Sciences, Kolkata. He has been a Fellow with Make A Difference from 2012–15, and was one of the inaugural Pratiti Fellows with People for Parity in 2015. His previous work experience includes a 13 month stint with IDIA (Increasing Diversity by Increasing Access to Legal Education) as Assistant Director, and a one year stint as an inaugural Chief Minister’s Good Governance Associate in Haryana. At CCS, Vineet handles legal research and advocacy work.

## Being Sanskari and Surviving 2018

Original: https://www.spontaneousorder.in/p/being-sanskari-and-surviving-2018

Author: Spontaneous Order

Published: 2018-08-03T12:08:26.000Z

Topics: government-overreach, cultural-censorship, personal-liberty, cultural-satire

> Human beings are a complicated species, with behaviour that is harder to comprehend than the existence of “P” in “pneumonia” and “pneumatic”. What is worse is that it is precisely this complicated behaviour that gets us into all kinds of troub

**Summary:**

Sadaf Hussain's satirical piece mocks the Indian tendency to rely on government paternalism to safeguard 'Bhartiya Sabhyata' (Indian culture) amid 'kalyug,' portraying individual preferences as threats requiring state intervention. Drawing parallels to historical figures like Socrates and Bhagat Singh who died for defying authority, he advocates a 'survival instinct' of conformity over rebellion. In a list of 'Dos and Don'ts' for 2018, he ridicules proposals like requiring government certification for books to combat 'overly educated natkhats' (pretentious intellectuals); mandating men wear dhotis in akharas for exercise while women do household chores; creating an All India Festival Commission for a uniform calendar, ditching the Roman one; enforcing a national permitted foods list under 'Kumbhkarana Khadya Yojna'; and banning EDM, jazz, or salsa via an All India Entertainment Department, restricting to bhajans and classical dances. An All India Ethos and Culture Body would oversee compliance, with punishments like forced eating of tinda and shalgam or watching bad Bollywood films. From a classical-liberal lens, the piece exposes the absurdity of state-enforced cultural uniformity, compromising liberty for contrived harmony.

**Key points:**

- Conform to government-certified books and avoid uncensored intellectual pursuits to preserve cultural narratives.
- Abandon modern gyms for traditional akharas, dhoti-clad wrestling, yoga, or household chores to align with sanskar.
- Establish an All India Festival Commission to impose a uniform calendar and guidelines, eliminating regional and Western influences.
- Adopt a national list of permitted dishes via Kumbhkarana Khadya Yojna to end food disputes and simplify choices.
- Ban Western music, dance, and art through an All India Entertainment Department, enforcing only traditional bhajans, kirtan, and classical forms.

**By Sadaf Hussain**

* * *

Human beings are a complicated species, with behaviour that is harder to comprehend than the existence of “P” in “pneumonia” and “pneumatic”. What is worse is that it is precisely this complicated behaviour that gets us into all kinds of trouble.

But we here in India, famous for having a ‘jugaad’ for everything, have devised an appropriate counter for this as well- the government. We are the proud citizenry for a government that is not hesitant to tell us what is good for us and what is not. Why would we? It is, after all, imperative that our great culture is safeguarded in the midst of the ‘kalyug’ that looms large.

With preferences and arguments being a messy business, argument can only come at the behest of compromise. And sometimes, a compromise comes at the cost of life. We should perhaps revisit history and remember that it is precisely this stubborn, revolutionary and rebellious attitude that got Socrates, Galileo, Bhagat Singh or even Chandrashekhar Azad killed. Maybe the life for our freedom fighters would have been easier if they had just waited for world events like the Second World War to precipitate the exit of the British.

It is this practice of the “survival instinct” that one must cultivate to live a carefree life in the real world. Have you ever been to a gym? I go regularly, and when I go, I never argue or come in the way of someone who is bulkier and way more in shape than me, because I know I stand no chance and might get knocked down. Hence, I usually change my workout schedule. Let them do their thing; why go around pissing anyone off?

I assume you’ve now got the basic premise of this article, so find below the ‘Dos’ and ‘Donts’ for surviving the coming year. After all, if you belong to the minority, it’s possible some of your actions are against the Bhartiya Sabhyata and that just won’t do.

Books: Being the home and subject of many self-proclaimed intellectuals, India has seen several historians spin narratives of its culture and origins. If you’d like to celebrate the next new year, however, I suggest you don’t try to be one of these overly educated natkhats. You must understand that your individualistic spirit poses a great threat to the Bhartiya Sabhyata. And just in case you still want to go with it, first do get a certificate from the Government. And by certificate we mean bowing down to our extravagant censorship demands and submitting to our bans.

Exercise: If it’s your New Year Resolution to go to a gym, we suggest you rethink the prospect. Although getting fit is a noble ambition, but working out using the new age westernised equipment under a well carpeted roof and with air conditioning in branded gym attire is against our sanskar, something our शास्त्रार्थ (Shastrartha) doesn’t allow us. Men must stick to wearing dhoti or langot and enrolling themselves in an akhada for some good old wrestling. If you think wrestling isn’t for you, the only other choice we can really give you is Yoga! For women to keep healthy and occupied, there’s always the exceptionally entertaining daily rut of household chores.

Festivals: Yes yes, I know this one has borne the brunt of conflict time and again- not just between Hindu and non-Hindu communities but also within the Hindu community. For example, the Hindu, Tamil, Bengali, and Gujarat New Years are enough to make you want to throw your hands in despair and wonder when the year truly starts. As if there isn’t enough confusion already, the first step should be to then get rid of the Roman calendar which has been exported from the West (grecian or roman debauchery is clear NO NO). I also propose अखिल भारतीय महोत्सव आयोग (All India Festival Commission) which will get paid for removing this utter chaos from our society and will come up with a uniform festival list (State and Church really cant be separate in this day and age) and celebration guidelines.

Food: It hurts me when people fight over food, it really does. Food must unite people, not divide. I am glad that the minorities have really followed what the different political and not-so political parties have dictated, including the beef ban. But let’s make this even easier, and have a list of dishes that restaurants and households are permitted to cook and serve. Imagine how much relief this will bring! My mother interrogates me everyday about what I want for lunch, as I eat breakfast, and then at lunch we begin our discussion on dinner. This list will give relief to all families. Kumbhkarana Khadya Yojna will be run by equal participation of different sects of the society which will be finalised by the Hindu majority.

Song, Art and Dance: What I hate the most in this Kalyug is the annoying EDM or metal rock music — definitely an encroachment on our sabhyata. This kind of music has to go, we must ban it. Gone are the golden days of bhajan, kirtan on harmonium or tabla. We miss our local lumbini and other kinds of local painting. l know that Bharat has different dance forms like Bharatanatyam, Kathak, and Mohiniyattam and this is a rich enough culture for our Bhartiya Sanskar and Parampara. Let’s agree that dance forms like jazz, salsa, and popping and locking won’t make a cut and will get rejected by अखिल भारतीय मनोरंजन और प्रदर्शन विभाग (All India Entertainment and Performance Department). All we need is calming music, dance and arts that allign with the integrity of the selective sanksar we have built over the years.

The recommendations given by all the committees will be strictly followed up by अखिल भारतीय संस्कृति और संस्कार मंडल (All India Ethos and Culture Body).

Non-compliance will result in forced feeding of Tinday and Shalgam, and defaulters will be forced to watch movies like Karzzzz, Ram Gopal Varma Ki Aag, Cash and other such movies because mob lynching is to sudden and easy a punishment.

*Views expressed are of the author’s, and should not be taken as the stance/opinion of Spontaneous Order or Centre for Civil Society*

* * *

**About Sadaf Hussain**

Sadaf Hussain writes everything between politics, economics to food and culture. He is the author of Daastan-E-Dastarkhan and a TEDx Speaker.

## Economics of India’s Dal Diplomacy

Original: https://www.spontaneousorder.in/p/economics-of-indias-dal-diplomacy

Author: Spontaneous Order

Published: 2018-08-03T11:39:26.000Z

Topics: import-tariffs, agricultural-trade, farmer-distress, structural-reforms

> Close contest or not, early tremors of the Gujarat electoral verdict raised serious concerns for the Central government. In Saurashtra where Congress gained 15 seats and BJP lost 10, the mouthpiece of rural agrarian population was read out loud and clea..

**Summary:**

India's fluctuating import tariffs on pulses like chickpeas and lentils, exemplified by the recent 30% duty imposed under the Customs Act amid Gujarat election losses (Congress gained 15 seats, BJP lost 10 in Saurashtra), reflect short-sighted policymaking swayed by domestic inflation and agrarian pressures rather than long-term strategy. Historical see-saws, such as the 2016 Mozambique tur dal import deal followed by 10% duty on tur and 50% on yellow peas, have confused markets and farmers. While WTO-compliant (below India's 46% bound rate), these measures strain ties with major exporters—US, Canada, Australia—amid global protectionism, complicating India's dal diplomacy. In states like Maharashtra and Gujarat, overproduction floods markets, making imports cheaper than government MSP, yet tariffs fail to address root issues like procurement gaps, intermediaries, water scarcity, and lack of incentives. From a classical-liberal viewpoint, such protectionism stifles competition without resolving farmer distress, as seen in Latur farmers shifting back to sugarcane. The author urges structural reforms: enhance predictability, improve irrigation and technology access, democratize modern techniques, tackle intermediaries, and boost domestic quality/costs to increase demand without harming global trade, ensuring cohesive policy for farmers and international relations.

**Key points:**

- India's ad-hoc tariffs on pulses imports, like the 30% on chickpeas and lentils, respond to electoral pressures but confuse markets and fail to aid farmers long-term.
- Overproduction in Maharashtra and Gujarat makes imports cheaper than MSP, yet tariffs risk future gluts without addressing procurement and intermediaries.
- Structural reforms—better irrigation, technology democratization, and intermediary reduction—offer predictable solutions benefiting farmers and trade partners over protectionism.
- Fluctuating policies strain diplomacy with key exporters US, Canada, and Australia, permissible under WTO but diplomatically costly.

**By Karan Tripathi**

* * *

Close contest or not, early tremors of the Gujarat electoral verdict raised serious concerns for the Central government. In Saurashtra where Congress gained 15 seats and BJP lost 10, the mouthpiece of rural agrarian population was read out loud and clear in the BJP headquarters. It is due to this concern that Central government, under powers conferred upon it by section 25(1) of the Customs Act (1962), imposed a 30% tariff on the imports of chickpea and red lentil (masoor).

Indian foreign trade policy on the imports of lentils and peas has been largely swayed by the inflation of the same in the domestic market. In July 2016, when the government faced criticism for rising prices of tur dal, a staple source of protein for the majority of Indians, the Cabinet approved an agreement with Mozambique to double the import of tur dal to curb inflation. However, in next few months when the production of pulses boomed in Maharashtra and Gujarat, India imposed a 10% duty on tur and 50% duty on yellow peas. This see-saw tariff trends coupled with the recent tariff in Gujarat has propelled a sense of confusion both in the market and in the minds of the farmers. Moreover, it reflects heavily on the short-sightedness of government’s understanding of stakeholder analysis in the policymaking on agrarian trade.

India imports pulses and peas from around 40 countries out of which major exporters are close allies US, Canada and Australia. With growing protectionism of Trump and ambivalent stance of Turnbull on China, any aggravated disturbance in the bilateral relationship with either of these might affect India’s diplomatic interests in the region. In addition to this, the decision to end exemption on SPS measure on the import of peas from Canada has also attracted some bitter responses. When it comes to India’s obligations under WTO, this decision is very much permissible as the tariff rate (30%) is below the bound rate committed to by India (46%).

The dynamics of India’s dal diplomacy has been evidently complicated. Without any doubt, the new tariff will not go down well with the exporters. Also, there is an absence of a clear strategy that might empirically indicate that such a measure might solve the farmer distress in a long run. In Maharashtra, the over production of lentil has made it very difficult for the government to control sharp decline in prices. Due to lack of supply in the market, and the water scarcity caused by production of sugarcane, farmers in Maharashtra were encouraged to grow lentils. However, due to such a major shift to the production of lentils, markets are now flooded and the purchase agreement of Central government is too meager to provide substantial relief. Many farmers in Latur, an area which often gets affected by drought, are now planning to move back producing sugarcane due to lack of incentives.

In Gujarat, the local production of lentil is also high but traders still prefer imported pulses as they are even cheaper than the Minimum Support Price provided by the government. Therefore, the government thought of imposing an import tariff as an immediate curative response. However, the production of pulses will only rise in the coming Rabi season and there are chances that farmers in Gujarat might face the same plight of meager returns as faced by farmers in Latur.

It’s true that the situation is like a tightrope walk for the government; balancing domestic and international interests on both sides. The good way of walking through it seamlessly would be to focus on issues that are common to both and that is– structural reforms. Some experts argue that for both investors and farmers the desired ecosystem is one with predictability and long term solutions. The clouds of ambivalence around India’s agrarian trade policy needs to be cleared by a reformed domestic agriculture policy that focuses on long term structural arrangement that is cohesive to both farmers and international trade. Instead of eliminating competition, government shall focus on tackling the issue related to procurement and intermediaries in agricultural trade. The demand for domestic production shall be increased not by stifling competition but by improving the quality and reducing the cost of production through better irrigation facilities and democratizing the use of updated agricultural techniques and technology.

The income of farmers needs to be improved and the same can be done without upsetting the global trade relationships. India’s dal diplomacy has to resonate with the best policy standards and greater commitment to bring much needed structural reforms.

* * *

**About Karan Tripathi**

Karan Tripathi is an undergraduate student at Symbiosis Law School, Pune and takes up additional courses at Symbiosis School for Liberal Arts. He holds diplomas in European Union Legal Studies and IPR-Competition Laws and certification in International Environment Law and Policy. Apart from law, Karan is a devoted patron of jazz, ancient languages, cinema, and dreams to act alongside Isabelle Huppert one day.

## Spontaneous Musings: Kanwal Rekhi on Liberalisation for the Sake of the Poor

Original: https://www.spontaneousorder.in/p/spontaneous-musings-kanwal-rekhi-on-liberalisation-for-the-sake-of-the-poor

Author: Spontaneous Order

Published: 2018-08-03T11:31:59.000Z

Topics: economic-liberalisation, labor-reform, job-creation, informal-economy

> Economic Liberalisation in India, since 1991, has been by and large liberalisation of the elite, by the elite and for the elite. Taking good care of them, India has liberalised every sector to the limit that affects its elite- may it be the financial se..

**Summary:**

India's economic liberalisation since 1991 has been 'by the elite, for the elite', freeing sectors like finance, automobiles, aviation, foreign exchange, and overseas investments that benefit the wealthy, while sectors directly aiding the poor remain heavily restricted under the ironic banner of 'protecting the poor'. Liberalising labour laws, the world's most stringent, would uplift the poor by enabling labour-intensive industries to absorb workers from the unorganised sector, where only 10% of the workforce is in the organised sector, 90% employment is in agriculture, and 70% of non-agricultural jobs are unorganised. These rigid laws prioritise job preservation over creation, choking employment opportunities and pushing the economy towards high-end service jobs unsuitable for India's unskilled and semi-skilled masses. Instead of low-end manufacturing, India needs policies laser-focused on job creation: labour policy, tax policy, land policy, and FDI policy should serve one goal—generating jobs—and everything else will follow from a thriving labour market.

**Key points:**

- India's post-1991 liberalisation has elite-focused, neglecting poor-impacting sectors like labour laws.
- Stringent labour laws limit organised sector to 10% of workforce, with 90% in agriculture and 70% non-agricultural jobs unorganised.
- Shift from job preservation to creation via liberalisation to build labour-intensive industries for unskilled workers.
- Align all policies—labour, tax, land, FDI—solely on maximising job creation in India.

**By Kanwal Rekhi**

* * *

Economic Liberalisation in India, since 1991, has been by and large liberalisation of the elite, by the elite and for the elite. Taking good care of them, India has liberalised every sector to the limit that affects its elite- may it be the financial sector, the automobile sector, aviation, foreign exchange, or even overseas investments — the list goes on. However, the sectors that help the poor have yet to be liberalised in the same manner and efficiency.

This barring of liberalising anything that directly affects the poor is ironically done under the banner of “protecting the poor”. Liberalisation of India’s labor laws, for example, would directly uplift the poor as it would enable labor intensive industries to absorb those employed in the unorganised sector.

At present, only 10% of the indian workforce resides in the organised sector (with 90% employment in agriculture and 70% in non- agricultural economy falling under the unorganised sector) — a statistic that instinctively bears grim consequences for the country’s poor. India’s labor laws (most stringent in the world) have thus, choked off employment opportunities- by focusing more on preservation of jobs rather than its creation!

India should be creating low-end labor intensive industries for its multitude of unskilled and semi-skilled population. Instead, it is creating a plethora of high-end service jobs. The way forward is to have a single item economic policy, with the sole focus of creating jobs. Labor policy, Tax policy, Land policy, FDI policy should only have one goal- does it create jobs in India?  
Everything else will take care of itself.

*1) http://www.thehansindia.com/posts/index/Young-Hans/2017-07-14/An-analysis-on-the-role-of-Indias-informal-economy/312388*

* * *

**About Kanwal Rekhi**

Kanwal Rekhi, former Chairman of Centre for Civil Society, is also the past Chairman and trustee of TiE, The Indus Entrepreneurs, a nonprofit support network to provide advice, contacts, and funding to Indian Americans hoping to start businesses. He is also the board member of Pan IIT USA, Inc, the alumni organisation of the Indian Institutes of Technology

## Aadhaar for Subsidies, Not Surveillance

Original: https://www.spontaneousorder.in/p/aadhaar-for-subsidies-not-surveillance

Author: Spontaneous Order

Published: 2018-08-02T10:49:25.000Z

Topics: aadhaar, subsidies, privacy-rights, government-overreach

> The purpose of Aadhaar is written in the title of the Aadhaar Act 2016 itself, as if to ensure that there is no confusion about it — The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016. It further states thi

**Summary:**

The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 explicitly limits Aadhaar's purpose to efficient, transparent delivery of Union government subsidies, benefits, and services funded from the Consolidated Fund of India, aligning with public support for rationalizing subsidies. From a classical-liberal perspective, the government's push to mandate Aadhaar linkage for non-subsidy items like mobile numbers, bank accounts, passports, PAN cards, Demat accounts, and large purchases is illegal, reflecting a 'public servile mentality' that violates its own legislation. The Act exempts private goods/services funded by households/companies and those from state/local governments. The author urges the Supreme Court in ongoing 'Aadhaar Case' hearings to enforce this legal scope. Before expansion, the government must master implementation challenges in pilots, which seriously impact vulnerable populations' lives and livelihoods. UIDAI's responses to criticisms raise doubts about state capacity for transparency and accountability. Focusing on core uses would demonstrate sincerity and achieve a historic governance win, prioritizing targeted public service over surveillance.

**Key points:**

- Aadhaar Act 2016 legally restricts Aadhaar to Union government subsidies from the Consolidated Fund of India.
- Mandating Aadhaar for mobiles, PAN, passports, and non-subsidy bank accounts is illegal and betrays the Act's purpose.
- Private entities, state, and local government services are exempt from Aadhaar requirements.
- Government must fix implementation challenges affecting vulnerable people before any expansion.
- Supreme Court should enforce the Act's precise scope in current hearings.

**By Parth Shah**

* * *

The purpose of Aadhaar is written in the title of the Aadhaar Act 2016 itself, as if to ensure that there is no confusion about it — The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016. It further states this is “An Act to provide for, as a good governance, efficient, transparent, and targeted delivery of subsidies, benefits and services, the expenditure for which is incurred from the Consolidated Fund of India, to individuals residing in India through assigning of unique identity numbers to such individuals…” This is in line with the fact that a vast majority of the people who support Aadhaar do so for its use in rationalising, and the targeted delivery of government subsidies and services.

The current demand of the government to link Aadhaar to mobile numbers, bank accounts which are not receiving any subsidies and don’t anticipate receiving them in any conceivable future, to passports, PAN cards, Demat accounts, large purchases, and so on, is simply illegal. It betrays not just public service, but public servile mentality. Maybe the government that passed the Aadhaar Act should not be so cavalier about the sanctity of its own legislation. Maybe it should leave that to the future governments.

The second critical part of the purpose statement that needs to be remembered is that Aadhaar will be used for “subsidies, benefits and services, the expenditure for which is incurred from the Consolidated Funds of India…” This clearly exempts all private goods and services, the expenditure for which is incurred by households and companies. It should exempt services provided by state and local governments as well.

Taking the purpose of the Act in its totality, it is evident that the use of Aadhaar is allowed for the subsidies, benefits and services provided only by the Union government. Those provided by private entities, and state and local governments are exempted. One hopes that the Supreme Court in its current hearings on the ‘Aadhaar Case’ would first consider the scope of Aadhaar as per the law that was passed by the Parliament and published in the Gazette of India.

Once the accurate delineation of the scope of Aadhaar is achieved, let’s first get the primary use of Aadhaar working well. Let’s implement it and test it for public services and subsidies. Even after several years of pilots, large and small, there are serious challenges on the ground. One does not have to be anti-Aadhaar to recognise these challenges and acknowledge their serious impact on the lives and livelihoods of those who are especially vulnerable to its effects.

For its own credibility, the government needs to demonstrate its capacity to master these challenges. Given how UIDAI and the government have responded to questions and criticisms, even the supporters of the idea of Aadhaar would have grave doubts regarding the state capacity to address existing and emerging challenges fully with transparency and accountability.

The Aadhaar Act is unambiguous about the legal and legitimate use of Aadhaar. The government needs to focus on that and demonstrate its capacity, sincerity and integrity to deliver on it. That itself will be a historic achievement.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Spontaneous Musings: Parth Shah on Education and Choice

Original: https://www.spontaneousorder.in/p/spontaneous-musings-parth-shah-on-education-and-choice

Author: Spontaneous Order

Published: 2018-08-02T10:42:52.000Z

Topics: education, school-choice, education-quality, choice-in-education

> In any country, there are three key issues that plague education- access, quality and equity. All three hold equally true in the case of India as well. In terms of the first issue, there is pretty good consensus now that we have been able to provide acc..

**Summary:**

Parth Shah identifies three key issues plaguing education in India—access, quality, and equity—arguing from a classical-liberal perspective that access has largely been addressed through Sarva Shiksha Abhiyan (SSA) and government reforms, leaving quality and equity as primary challenges. He contends that quality is inherently subjective, 'in the eye of the beholder,' with no absolute standard achievable through top-down imposition, as consensus on parameters is elusive. Instead, quality emerges from consumer choices: parents and students can only articulate and pursue good education when free to select among diverse options. Thus, choice is the prerequisite—creating an ecosystem offering freedom in schools, pedagogy, curriculum, and examination systems enables a bottom-up, organic consensus on quality. Without this foundational choice, addressing equity or disseminating quality remains impossible. Shah advocates shifting from centralized definitions to market-driven diversity, aligning with his work promoting choice and competition in education.

**Key points:**

- India's education access has improved via SSA, but quality and equity persist as core challenges.
- Quality education lacks an absolute standard and is subjective, defined by parents and students through exploration of options.
- Choice in schools, pedagogy, curriculum, and exams is prerequisite for organically defining and achieving quality.
- A bottom-up ecosystem of educational choice must precede top-down quality mandates to address equity effectively.

**By Parth Shah**

* * *

In any country, there are three key issues that plague education- access, quality and equity.

All three hold equally true in the case of India as well. In terms of the first issue, there is pretty good consensus now that we have been able to provide access to education to most children in India through SSA and other government reforms. The key challenge remains of quality and equity.

Equity cannot be addressed without first gaining clarity on what we mean when we say ‘quality of education’. So we looked into the relevant literature, and what we realised is that quality is ultimately in the eye of the beholder. There is no absolute standard of quality. Of course we can agree on many parameters of quality, there’s no doubt. But to say definitively that this is quality and get everybody to agree to it is next to impossible.

So we worked backwards and looked at the consumers of education.

Parents and students can only articulate what good education or quality education is, if they are able to explore different options by having the freedom to choose. What follows then is that choice is a prerequisite for defining quality education.

As long as we create an ecosystem of education, where every parent has a choice of school, choice of pedagogy, choice of curriculum, of examination system etc., then the consensus on the definition of quality education can be reached more organically. There has to be a bottom-up approach to defining quality rather than something that comes top-down.

But without the first step of ‘choice’, the progression to what quality education is and how it should be disseminated is moot.

Note: The full version of the trancript can be found [here](http://prayatna.typepad.com/files/2014_06_09_parth_shah_education_in_india_podcast_transcript.html).

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Economic Survey’s Proposal For A New Kind of Transparency

Original: https://www.spontaneousorder.in/p/economic-surveys-proposal-for-a-new-kind-of-transparency

Author: Spontaneous Order

Published: 2018-08-02T10:36:44.000Z

Topics: transparency, rti-act, economic-survey, government-reform

> cTransparency in the functioning of government is the hallmark of a democracy — be it in the manner elections are held, resources managed, recruitments conducted, money spent, or information exchanged. The second volume of the Economic Survey 2016–17

**Summary:**

The Economic Survey 2016–17 proposes 'The Transparency of Rules Act (TORA)' to address information asymmetry between citizens and government by requiring departments to publish all citizen-facing rules on websites in a unified, comprehensible format, with timestamps for changes; any unlisted rule is deemed inapplicable. This classical-liberal reform tackles the opaque 'mesh of rules' causing inefficiency, delays, corruption, and litigation—even officials struggle with fragmented legal jargon in gazettes and sites. Unlike the 2005 RTI Act, which allows varied formats without mandating simplicity, TORA ensures Wikipedia-like accessibility, complementing voluntary Citizen Charters. While praising TORA's potential to empower citizens via knowledge-power nexus (echoing Foucault), the author notes gaps: no enforcement for time-bound services, as the 2011 'Right of Citizens for Time-bound Delivery' bill lapsed without penalties up to Rs. 50,000. Instead of a new Act, amend RTI to require simple formats; implement incrementally, one department at a time. This reduces corruption, touts, and info divides, fostering aware citizens who influence policy in a freer society.

**Key points:**

- Economic Survey 2016–17's TORA mandates departments to post unified, comprehensible rules on websites with change timestamps, deeming unlisted rules inapplicable.
- TORA surpasses RTI by requiring simple formats, unlike RTI's allowance for fragmented info.
- Amend RTI rather than enact new TORA to enforce Wikipedia-style rule presentation.
- Implement incrementally, starting with one department, to achieve transparency without overhaul.

**By Hinan Ali**

* * *

cTransparency in the functioning of government is the hallmark of a democracy — be it in the manner elections are held, resources managed, recruitments conducted, money spent, or information exchanged.

The second volume of the Economic Survey 2016–17 has proposed a new Act to bring about transparency in the arena of information dissemination to the public about any existing/new laws. Named “The Transparency of Rules Act (TORA)”, it aims to arrest the asymmetry of information regarding rules and regulations existing between the citizen and the government.

Abound with data in different mediums, manouvering through existing laws as well as new rules makes navigating government departments an especially hard task. Often, even government officials themselves are unaware of the new laws being added to the law books. Despite notifications through government gazettes and websites, the language used is technical and fragmented. This ‘legal jargon’ further inhibits the easy comprehension of information for the ordinary citizen — much like reading a doctor’s prescription slip containing seemingly scrambled and unorganized words and sentences. The Economic Survey points out to the worrisome effects of such a trend-

“The opaque mesh of rules is so complicated that even government officials struggle to keep up with the latest version. This is the cause of a lot of inefficiency, and delay. Arguably it is also an important source of corruption and endless litigation. This is why India would benefit enormously if the average citizen could easily access the latest rules and regulations in a comprehensible format.”

Disseminating information about rules and regulations in a manner proposed by this new Act will reduce corruption, touts, and wrongdoings. The Act proposes –

Departments to place all citizen-facing rules on their website. Any rule that is not explicitly on the website of a TORA-compliant department would be deemed not applicable.  
All laws, rules and regulations need to be presented as an updated, unified whole.  
Websites should clearly state the date and time of each change made.  
Knowledge forms a vital cornerstone of democracy. The French post-modernist, Michael Foucault talks about the triangle of knowledge, power, and rights wherein power derives from knowledge and in-turn creates more knowledge, with rights being sovereign. In a society where knowledge is poorly distributed, people often remain unaware of their due rights and privileges, severely affecting the public service delivery system. Transparency of Rules Act can be an effective tool for empowering the citizen-state relationship. But the question to ask is — How is it different from RTI Act which was enacted in 2005? Has the RTI failed in addressing citizen grievances?

While TORA mandates a government body to present information as a unified whole in a simple and comprehensible language, RTI does not make it mandatory to put out information in a particular format. So what we get with RTI are differently-shaped boxes containing compartments of different sizes filled with information. You will have one law presented as a PDF and another for which the website will ask you to visit the government department.

The Citizen Charter, a political initiative of John Mayor included a system of granting “Charter Marks” to public bodies meeting specific standards. Many countries adopted this system, including India. Principally an adaptation of UK model, India’s Citizen Charter has a constituent of “expectation from clients”. TORA, with its mandatory provisions will be a sound overture in ensuring that Citizen’s Charter is able to achieve its aims and objectives. Presently there is lack of awareness in addition to a dearth of information (Citizen Charter being a voluntary initiative), and unsound publicity often mars the successful implementation of a programme/rule. The impediments towards realizing the objective of an “open government” are many. We may not change the system overnight, but minor and superficial interventions from time to time serve no purpose either.

However, there are problems with the newly proposed Act. Even if a website of, say, the health department is TORA-compliant and you submit all documents for availing a particular service, despite approaching the grievance redressal authorities as mentioned in the department’s Citizen’s Charter, there is no remedy within RTI or TORA.

A significant piece of legislation that could help guarantee time-bound delivery of services to a citizen was introduced in Lok Sabha in 2011. This bill, named “The Right of Citizens for Time-bound Delivery of Goods and Services and Redressal of their Grievances Bill, 2011 lapsed with the term of the house ending. In addition to putting out a charter, the bill required all public authorities to ensure timely delivery of goods and services by penalizing concerned officials up to Rs. 50,000 in case of failure to render services.

The Transparency of Rules Act can be seen as a subset of RTI. So, instead of enacting a separate Act, it would make more sense to amend the existing RTI to require public authorities to present information in a simple and easily-alterable format (much like the “Wikipedia” format talked about in the proposed Act).

Technological requirements for implementing it as a new law or embedding it into RTI would be trivial. And it need not be done at the same time throughout the country. One department at a time — it is that simple.

In our pursuit for fully-digitized and cleaner social institutions, the Transparency of Rules Act will be much needed. It will reduce the gap between those who have unlimited access to information and those who stand at the edge of the informational society. Empowering citizens by way of increasing access to information in a simplified form will go a long way in creating a class of citizens who are not only aware of their rights but can also influence the course of policy making in India.

*References*

http://indiabudget.nic.in/e\_survey2.asp

http://www.thehindu.com/news/national/push-for-law-to-ensure-transparency-rules/article19476452.ece

http://www.business-standard.com/article/opinion/why-we-need-a-transparency-of-rules-act-113042700527\_1.html

http://www.prsindia.org/billtrack/the-right-of-citizens-for-time-bound-delivery-of-goods-and-services-and-redressal-of-their-grievances-bill-2011-2125/

*https://thewire.in/166706/government-secrecy-rti-transparency/  
*

* * *

**About Hinan Ali**

Hinan is a graduate from National Institute of Technology (NIT), Srinagar and is currently working at Centre for Civil Society. His subjects of interest include politics, psychology and philosophy. He enjoys reading Camus, Dostoyevsky, Rand, and Mises. Other than that, he takes French language classes in his free time and actively engages with people to gain newer perspectives.

## Should We Alter Our Constitution?

Original: https://www.spontaneousorder.in/p/should-we-alter-our-constitution

Author: Spontaneous Order

Published: 2018-08-02T10:31:01.000Z

Topics: indian-constitution, judicial-independence, basic-structure-doctrine, rule-of-law

> Lord Macnaghten, one of the wisest and most learned of judges, observed towards the end of his life that he had given all his days to the study of the law and was satisfied that there was nothing in it. You may or may not agree with the Irishman who sai..

**Summary:**

No perfect law exists due to the infinite variety of human situations, and India needs respite from the endless flood of new laws, rules, and amendments that rulers mistake for progress. The author, Nani Palkhivala, staunchly defends preserving the Supreme Court and High Courts' powers under Articles 32 and 226 to interpret the Constitution and protect citizens from executive excesses, citing British jurisprudence and cases like Eshugbayi Eleko. He highlights executive overreaches, such as Bombay's assembly ban struck down in 1975 and absurd detention arguments during the Emergency. Courts resolve disputes over dissent and press freedom, maintaining rule of law where force prevails elsewhere. The Kesavananda Bharati case (1973) established that Parliament cannot amend the Constitution's basic structure, including supremacy of the Constitution, sovereignty, integrity, republican democracy, secularism, independent judiciary, federalism, and separation of powers—right to property is not part of it, allowing economic reforms. Palkhivala successfully challenged the 42nd Amendment's clause undermining judicial review of amendments. The judiciary emerges as the honored guardian of constitutional integrity and free democracy.

**Key points:**

- No new laws should be passed for a stated period to provide respite from legislative overreach.
- Supreme Court and High Courts must retain powers under Articles 32 and 226 to check executive actions against liberty.
- Kesavananda Bharati (1973) limits amendments to preserve the Constitution's basic structure, excluding right to property.
- Independent judiciary protects dissent, press freedom, and rule of law against Emergency-era excesses like the 42nd Amendment.

**By Spontaneous Order**

* * *

Lord Macnaghten, one of the wisest and most learned of judges, observed towards the end of his life that he had given all his days to the study of the law and was satisfied that there was nothing in it.

You may or may not agree with the Irishman who said, “There is no such thing as a large whisky,” but there can be no two opinions on the point that there is no such thing as a perfect law. Doubtless the law is imperfect, and it would be imperfect even if it were made by a committee of archangels.

The reason is that such is the infinite variety of situations in which justice is required to be done between citizen and citizen, or between citizen and the state, that situations are bound to arise in which justice begins only where the law ends. To expect a perfect system of justice based on rules of law is no more rational than to hope to balance soap bubbles on hat-pins.

However acute the recession, there is one activity which thrives and is in a state of perpetual boom: the law-making industry. What the nation needs more than anything else by way of legal reform is assurance of some respite from the Niagara of Rules and Notifications, Ordinances and Acts. No amendment of the law will boost the morale of the people so markedly as an assurance that no new laws would be passed for a stated period. Rulers and Bureaucrats perpetually mistake change for progress and amendment for improvement.

Whatever alterations we may or may not make in our legal system, we should never deprive the Supreme Court and the High Courts of their power to interpret the Constitution and other laws, and to give relief to the citizen under Article 32 or 226 of the Constitution against the executive. Lord Atkin, delivering the judgment of the Privy Council in Eshugbayi Eleko’s case (1931 A.C. 662, 670), observed:

“In accordance with British jurisprudence no member of the executive can interfere with the liberty or property of a British subject except on the condition that he can support the legality of his action before a Court of justice. And it is the tradition of British justice that Judges should not shrink from deciding such issues in the face of the executive.”

Our Supreme Court has repeatedly quoted this passage with approval and pointed out that the same jurisprudence has been adopted in this country on the basis of which our courts exercise jurisdiction.

Even in the days of foreign rule the courts enforced the principle that any action by the executive against the citizen would have to be supported by law and that a court of law could go into the cases of detention and other interference with personal liberty, e.g. the right of free speech and free press. We should continue this elementary principle of a free democracy when we are governing ourselves. The Court’s scrutiny is necessary, however limited, under the present laws which provide in effect that anyone can be put in jail without a trial, that no citizen can plead a right to liberty based on common law, natural law or rules of natural justice, that a Government official may not be permitted to disclose even to a court of law the grounds for detention, and that anyone who has been released by a court may be re-arrested and re-imprisoned without a trial for undisclosed reasons which may be the same reasons for which he was first detained before his release by the court.

The Government is entitled to enforce the law that public order should be maintained and internal security should be preserved. But the question is whether a citizen should have the right to dissent, and the press should have its freedom, both to be exercised in such a way that public law and order and internal security are not in the least prejudiced. If there is a dispute on this point between the citizen and the state, surely the court of law alone can decide the issue.

The importance of having an independent judiciary to whom citizens can go for redress against the excesses of the executive may be illustrated by two seasonable examples. Maharashtra is a comparatively well-regulated State and has an able, cultured and reasonable man as its Chief Minister. Yet there is an Order of the Police Commissioner in Greater Bombay which prevents any assembly of five or more persons without the Police Commissioner’s permission, irrespective of the question whether the meeting is public or private, irrespective of the place where it is intended to be held, and irrespective of the purpose of the meeting. The net result is that tea or dinner parties, social gatherings, funeral assemblies, college lectures, board meetings and countless other meetings of five or more persons inevitably constitute millions of breaches of the Order since its inception. On December 18, 1975, the Bombay High Court struck down the Order as invalid and ultra vires. Next, the unreasonableness of the executive mind is well exemplified by the argument urged on its behalf before the Bombay High Court in Bhanudas Krishna Gaude’s case (77 Bom. L.R. 500, 602–3):

“In fact, (counsel) went so far as to suggest that if the Conditions of Detention Order contained a clause that detenus are not to be allowed to eat any food, it could not be challenged and the petitioner would have no remedy by way of a petition under Art. 226 as long as the Presidential Order suspending the enforcement of the fundamental right under Art. 21, of which the right to eat is a part, is in force. Emboldened by this proposition of (counsel), which we cannot help observing is a startling proposition, the learned Government Pleader interposed and said that even if the Conditions of Detention Order were to authorise that the detenu should be shot, such a clause could not be challenged during the subsistence of the Presidential Order.’’

MPs and MLAs represent their constituencies, but the High Court of a State stands for the whole State and the Supreme Court for the whole country. These Courts decide the fierce controversies which in some other countries are determined deplorably by the arbitrament of force; they maintain the most fundamental equilibriums of our society; they are the agency of a sovereign people to expound the Constitution and to ensure that its mandates are respected.

Since the Courts are the trustees of the law and charged with the duty of securing obedience to it, they have to stand high above the storms. They must necessarily judge the validity of other men’s actions and act as a brake on their conduct. Wise men who are so judged and restrained yield with a grace to the judicial process which is the only way devised by the wit of man to maintain the rule of law. Every time a judge vindicates the rights of the citizen against repressive authority, he really protects the integrity of the Constitution.

When the history of our times comes to be written, the one institution which will be found to have covered itself with honour and earned the nation’s lasting gratitude will be the judiciary.

In April 1973 the Supreme Court decided in Kesavananda Bharati’s case that Parliament, in exercise of its power to amend the Constitution, cannot alter or destroy the basic structure or framework of the Constitution. A recent attempt to get the Supreme Court to overrule that decision and hold that Parliament has unlimited power of amending the Constitution, has happily failed.

Every thinking citizen should know the effect of Kesavananda’s case, because our unfolding future depends crucially on constitutional amendments. In Kesavananda’s case it has been expressly held that the right to property is not a part of the basic structure of the Constitution and, therefore, any amendment can be made to the Constitution in total disregard of the right to property. Thus, Parliament is at full liberty to make constitutional amendments or pass other laws for benefiting the poor or otherwise effectuating economic justice. It was further held in that case that Parliament can amend any part of the Constitution subject only to one restriction, viz. that the power cannot be used to alter or destroy the basic structure or framework of the Constitution.

There can be little doubt that the following are among the essential features which go to make up the basic structure of the Constitution:

The supremacy of the Constitution. Ours is a “controlled constitution’’ par excellence. All institutions, including Parliament, are merely creatures of the Constitution and none of them is its master.  
The sovereignty of India. This country cannot be made a satellite, colony or dependency of any foreign country.  
The integrity of the country. The unity of the nation, transcending all the regional, linguistic, religious and other diversities, is the bedrock on which the constitutional fabric has been raised.  
The republican form of government. India cannot be transformed into a monarchy.  
The democratic way of life as distinct from mere adult franchise. There is a guarantee of fundamental rights to ensure justice-social, economic and political; liberty of thought, expression, belief, faith and worship; and equality of status and opportunity.  
A state in which there is no state religion. All religions are equal and none is favoured.  
A free and independent judiciary. Without it, all rights would be writ in water.  
The dual structure of the Union and the States. It permits centralisation and decentralisation to co-exist.  
The balance between the legislature, the executive and the judiciary. None of the three organs can use its power to destroy the powers of the other two, nor can any of them abdicate its power in favour of another.  
In short, Kesavananda’s case ensures that India shall continue to remain a truly free democracy and a sovereign republic unifying separate States.

The 42nd amendment to the Constitution, passed hastily by the then government during the Emergency, was in direct violation of the Kesavananda Bharati v. State of Kerala ruling. Palkhivala led the decisive charge against the government in the Supreme Court and in 1980 he succeeded in advocating for the axing of clause (4) of Article 368 that quashed the Court’s power to place Constitutional amendments under judicial review.

*Access the full document [here](http://indianliberals.in).*

First Published in Illustrated Weekly of India, Jan 1976, p.4–10

*More essays and speeches by Nani Palkhivala can be accessed at Indian Liberals, an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.*

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Did You Know That Flying A Kite Could Land You In Jail?

Original: https://www.spontaneousorder.in/p/did-you-know-that-flying-a-kite-could-land-you-in-jail

Author: Spontaneous Order

Published: 2018-08-02T10:25:37.000Z

Topics: aircraft-act, overregulation, colonial-laws, regulatory-reform

> Makar Sakranti, a joy-filled festival marking the end of winter solstice, also marks the start of the renowned International Kite Festival (Uttarayan) hosted annually in Gujarat. Welcoming participants from all over the world, the festival is one of the..

**Summary:**

The Aircraft Act of 1934 absurdly classifies kites and balloons as 'aircraft', requiring licenses for their manufacture, use, and maintenance, with violations under Section 11 punishable by up to 2 years in prison or a fine of 10 lakh rupees for causing 'danger'. This colonial-era law equates harmless festive items—like those flown during Gujarat's International Kite Festival (Uttarayan), Makar Sankranti, or Independence Day—with serious machines such as airships and gliders, imposing unreasonable overregulation on commonplace activities. The Act's vague definition of 'danger' enables arbitrary state harassment, potentially targeting children with balloons or kite competitions. Despite India's recent aggressive repeal of obsolete laws, this 84-year-old statute persists, exemplifying regulatory excess out of step with modern realities. From a classical-liberal perspective, the post stresses the need for amendment to curb state overreach and restore sensible freedoms in everyday joys like kite-flying.

**Key points:**

- Aircraft Act 1934 defines kites and balloons as 'aircraft' requiring licenses for use.
- Section 11 punishes flying that causes 'danger' with up to 2 years jail or 10 lakh rupees fine.
- Vague 'danger' definition allows state manipulation against harmless activities like kite festivals.
- Law equates kites with airships, demanding identical regulation despite vast differences.
- Urges amendment of this obsolete colonial law amid broader repeal efforts.

**By Akshita Mathur**

* * *

Makar Sakranti, a joy-filled festival marking the end of winter solstice, also marks the start of the renowned International Kite Festival (Uttarayan) hosted annually in Gujarat. Welcoming participants from all over the world, the festival is one of the major attractions for tourism in the state. This enthusiasm for kite flying, however, is not restricted to Gujarat. Clear blue skies filled with kites of all shapes and sizes on Independence Day, is a warm memory shared by all. However, it perhaps is a matter of great irony that this experience which forms one of the most characteristic aspects of our independence day celebrations, still falls under the shadow of regressive colonial-era laws.

As per an existing law i.e. the Aircraft Act (1934), a kite (defined as an ‘aircraft’) cannot be flown without a license authorising its use, manufacture and maintenance. Any person found to be violating this law is liable for both- a hefty fine as well as significant time in prison. The absurdity of the Act is further emphasised in Section 11 wherein any person found guilty of flying an aircraft so as to cause “danger” can be jailed for a term of 2 years or fined up to ten lakh rupees or both. The same remains the case for balloons as well.

This is problematic on two levels: i) the clubbing of relatively harmless objects such as kites and balloons with more serious machines like airships, gliders and flying machines under the tag of ‘aircraft’ is akin to comparing hand catapults to assault rifles, ii) the demand for same extent of regulation and intervention in the use of kites and balloons as that in the use of an aeroplane is unreasonable given the commonality of the former.

Additionally, for a piece of legal literature that has been overly generous in its definition of ‘aircraft’, the Act is eerily silent on what constitutes “danger” in Section 11. This lack of clarity, although seemingly hilarious in its obscurity, wields the power for the State to manipulate and harass the general public as and when it deems fit. This gaping leeway for interpretation could have as its prey an innocent child flying a balloon at India Gate on Children’s Day or even the several kite-flying competitions held in the country on Independence Day. What is more bewildering is that a law such as this has not topped the list for repeal despite the aggressive pursuit of repealing obsolete laws in the past few years.

Reflecting on the antediluvian demands of the Act, the need to beseech an amendment in the rule of law cannot be stressed enough. Enacted in 1934, the Aircraft Act aimed to provide for a better “control of the manufacture, possession, use, operation, sale, import and export of aircraft”. However, 84 years hence, the Act is a classic example of a law out of step with the times.

* * *

**About Akshita Mathur**

Akshita Mathur has completed her undergraduate degree in Economics from Symbiosis School of Economics, Pune, and is currently working at Centre for Civil Society. A writer by passion, she aspires to make a career in Investigative Journalism. Her interests lie in International Relations and Politics. Outside the workplace, she indulges herself in lots of hot cups of chai and good food.

## The Movement of Freedom: C. Rajagopalachari

Original: https://www.spontaneousorder.in/p/the-movement-of-freedom-c-rajagopalachari

Author: Spontaneous Order

Published: 2018-08-02T09:58:58.000Z

Topics: swatantra-party, individual-liberty, state-overreach, congress-criticism

> Before I begin I, along with you all, must tender our grateful appreciation of the splendid work done by Mr. Masani and his colleagues for making this eventful gathering possible in this inclement season of the year in Bombay. I have been asked to inaug..

**Summary:**

C. Rajagopalachari inaugurates the Swatantra Party not as a mere political entity but as a 'movement of freedom' akin to the independence struggle against British rule, now targeted at the Indian National Congress's socialist policies that he sees as forging a 'Leviathan' state suppressing individual liberty. He criticizes the Congress for expanding state power into agriculture, industry, and trade through controls, regulations, and an army of officials, inflating administrative costs and taxes while eroding citizen initiative under the guise of wisdom. Specific deceptions include unfulfilled land ceiling promises to distribute land to the landless, shifting from bhoodan voluntary surrenders to coerced cooperative farming masked as voluntary, subsidized to buy support. Rajagopalachari attributes policy failures to a false conception of governance assuming citizen ignorance, leading to power corruption: megalomania at the top attempting societal revolutions like changing personal laws and banning religion, and interference at lower levels undermining justice. He calls for replacing Congress with Swatantra, which champions individual enterprise, initiative, and faith in people over state compulsion and regulation.

**Key points:**

- Congress socialist policies expand the state into a menacing Leviathan, interfering in all aspects of life and suppressing individual liberty.
- Land ceiling promises deceive rural voters by failing to deliver land to the landless, pivoting instead to subsidized 'voluntary' cooperative farming.
- Power corrupts Congress leaders, fostering top-level megalomania in restructuring society and lower-level interference in administration.
- Swatantra Party must replace Congress to restore individual initiative, enterprise, and governance based on faith in people rather than compulsion.

**By Spontaneous Order**

* * *

Before I begin I, along with you all, must tender our grateful appreciation of the splendid work done by Mr. Masani and his colleagues for making this eventful gathering possible in this inclement season of the year in Bombay. I have been asked to inaugurate this convention of the Swatantra Party. I do it with great pleasure as well as with a due sense of responsibility. I am not inaugurating merely a party. I think we are inaugurating a movement of freedom. Forty years ago, when I was forty years old, after twenty years’ practice at the Bar, and twelve years of political life in connection with the Congress and the Nationalist Party of that time and the Home Rule Movement, I joined the Non Cooperation Movement in close collaboration with and under the leadership of Mahatma Gandhi. Now when I am twice that age, I am leading a revolt against what I have come to believe to be a fatally wrong direction taken by the Indian National Congress in the governance of this great country. I have come to the conclusion that a movement for freedom, as important and as serious as the movement for independence against British rule, has now to be inaugurated against this misconceived progress of the Congress towards what will finally end in the suppression of individual liberty and the development of the State into a true Leviathan.

The State is becoming a giant entity by itself menacingly poised against the citizen, interfering with his life at all points, mistrusting the people, imposing restrictions, introducing a series of controls and regulations, stepping into the fields of agriculture, industry and trade, creating an army of officials, tremendously increasing the cost of administration and therefore the taxes paid by the nation, hypnotizing the people with slogans that are mistaken for thought and wisdom, a scheme of Government in which it is taken for granted that the citizen is ignorant of what is his own interest.

My criticism of the Congress policies and tendencies and their inevitable consequences is strong but not exaggerated. My criticism of the ruling party’s present policy is this: You begin with a false conception and make promises on that basis which are necessarily incapable of performance; then your sympathetic critics want you to hr more efficient than you are and to do the impossible and you are led to make more promises in place of the old promises. The whole business which is faulty at the base and in the superstructure leads to the people being made victims of one deception after another. For example, you promise to put ceilings on land holdings in the hope of making by compulsion when bhoodan is trying to make by willing surrender. You give up the idea of making gifts and in view of the criticism of agricultural experts you propose to substitute co-operative farming for individual cultivation. That you meet objections to compulsory collectivization by announcing that it will all be voluntary and will not be enforced collectivization. In order to overcome popular objections you plan subsidies and other inducements at the cost of the nation in order to build up a case for successful co-operative farming. I have illustrated what I said first in strong and general terms.

There is no morality in creating an impression that the landless will get land as a result of the policy of land ceilings and yet that deception is the basis of whatever hold the Congress has now in the rural area. The Attorney General’s recent speech at Bombay is a scathing indictment clothed in the language of a trained lawyer and gentleman, addressed to an enlightened audience in an atmosphere charged with gentleness. He has exposed the fatal weakness in the present regime and has made out an unanswerable case for an opposition party such as ours to come into being. He has not expressly welcomed the emergence of this party but what he has said amounts to it. He finds fault with the public and the professions for their apathy and silence. He could have gone deeper down and explained the reasons for this silence and absence of opposition. The secret lies in the octopus-hold which the ruling party has seared on men and their lives and occupations in the name of Socialism and a march towards the socialistic goal. He said that the officials are not doing their duties properly. Why? For the same cause. We should remove the cause and not hope to achieve anything by treating the symptoms.

We all know how power corrupts. It is a cliché but it is true. There are two types of this corrupting power in action. At the top the ruling party and its chiefs have secured position and power to make or attempt to make basic changes in the structure of society, imagining that they can achieve revolution without revolution. Illusion and megalomania are the consequences of this corruption produced by power at the top. They attempt to change the personal laws as to succession making fundamental changes which must totally dislocate the structure of life at the very base. This is a capital example of exhibitionism and thoughtlessness. They desire to banish religion and God from Indian life. They seek to regulate life in fields where regulation was unknown. They seek to disturb the fundamental agricultural economy of our country. The party system and the totalitarian position of the ruling party deprive the Government of all effective checks in the implementation of these un-wise programmes. I attribute the unwisdom to the corrupting influence of power and want of faith in the people, the assumption that people are ignorant and are not likely to do the right thing unless compelled.

The second type of corruption by reason of power is at the lower levels of the party, where bosses and important elements in the political machine interfere with justice in the executive administration. Officials have lost their old courage in standing up to political pressure. I need not expatiate on this. It is one of the most widely felt evils and if there is one reason more than another which has brought the Congress into disfavor, it is this.

The ruling party must be replaced by a party that will respect the freedom of the individual. The Swatantra Party stands for this freedom. It stands for individual initiative and enterprise. State initiative, except where it is conceded to be necessary, amounts to compulsion. Compulsion kills initiative, and regulation kills interest and responsibility. We want all policies to be based on the faith in people as the moral foundation of government, discarding compulsion.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Social Justice Vs. Socialism: C. Rajagopalachari

Original: https://www.spontaneousorder.in/p/social-justice-vs-socialism-c-rajagopalachari

Author: Spontaneous Order

Published: 2018-08-02T09:55:33.000Z

Topics: social-justice, anti-socialism, swatantra-party, indian-constitution

> The Swatantra Party stands for social justice as such as it firmly opposes statism. Social justice is a great and proper aim for all good governments to work for and it is included in the aims of the 1950 Constitution of India. But socialism is a wrongl..

**Summary:**

C. Rajagopalachari argues that the Swatantra Party supports social justice, enshrined in India's 1950 Constitution, but firmly opposes socialism as a misguided, statist means that curtails national production essential for true social justice. Socialism's policies—expropriation, wealth ceilings, and heavy taxation—act as disincentives to work, investment, and greater production, leading to diminishing returns and making social justice measures impossible. He invokes Gandhian ethics against immoral, envy-driven tactics like pulling down capitalists, emphasizing simple arithmetic over ideological biases. Rejecting a suggested name change for the Swatantra Party to counter lies portraying it as a tool for the rich, Rajagopalachari insists on persistently explaining its anti-statist stance through speeches and writings. He warns of state governments' bills treating the Constitution as scrap paper, risking the wrecking of democracy, imposition of serfdom akin to communist countries, total state control, and vulnerability to Communist China's imperialism amid the current drift.

**Key points:**

- Swatantra Party endorses social justice but rejects socialism for curbing production via expropriation, ceilings, and heavy taxes.
- Increased production is essential for social justice, which socialist disincentives undermine through diminishing returns.
- Gandhian ethics prohibit socialism's hateful, violent means to good ends.
- Party name change won't dispel lies; must explain truth to warn against constitutional subversion and dictatorship.

**By Spontaneous Order**

* * *

The Swatantra Party stands for social justice as such as it firmly opposes statism. Social justice is a great and proper aim for all good governments to work for and it is included in the aims of the 1950 Constitution of India. But socialism is a wrongly conceived means to attain social justice. Socialism is the name given to a complex of policies and measures which curb the growth of national production, without helping the cause of social justice. Socialism is statism which accelerates the acquisition by the State of total control over citizens and extinguishes the free way of life. Socialism is the word for policies and measures which lead to dictatorship and do not, in the least help social justice. In fact, what is called socialism postpones social justice for which increased production is the first essential. Expropriation, ‘ceilings’ on wealth, heavy taxes, etc. — are all of them disincentives for work and greater production, without which social justice measures become impossible? Gandhian ethics forbade immoral or violent means even to achieve good ends. And socialism, which consists of pulling down capitalists, and other measures born out of sheer hatred and envy, is a wholly erroneous way to attain or help social justice. Measures and policies that curb investment and greater production are enemies of social justice. Disincentives for investment and increased production are not the road to achieve social justice. The worse of the errors is heavy taxation which makes increased production not worthwhile for the persons concerned. No Gandhian ethical doctrine is involved here. Just simple arithmetic and practice in the application of it to life and realities, unaffected by likes and dislikes are what are required. When the limit of prudence in taxation is crossed, we have to face diminishing returns and great reduction of incentives to work and produce.

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When I met Sri Dandekar in Madras, last Monday (March 27), he suggested a change in the name of the Swatantra Party, as a step to cope with the lie propagated about the part that it was founded and kept up for the advantage of capitalists and princes and other rich people. I was inclined in favour of his suggestion and wrote about it in last week’s Swarajya, but on further reflection, I realised that a change in name will not help. Those who were interested in spreading the lie about the Swatantra Party did not depend for their distortion of the aims and objects of the Swatantra Party on its name. A change in the name of the Party will be of no use to meet their interested campaign. They will call it a trick to deceive people and ridicule the attempt.

We must, therefore, depend on our efforts to explain the truth and tell the people what the Party stands for, as clearly as we can in our speeches and writings. We should persist in doing our duty, to warn the people against allowing or resisting the Prime Minister and her Party to wreck the Constitution, to extinguish democracy and the free way of life, and put the people of India under the total power of the State and suffer serfdom as the people do in communist countries.

Every day now, we hear about Bills and measures initiated by the State Governments, which are all founded on the plan to treat the 1950 Constitution as a mere scrap of paper, which is no longer to be respected.

The danger is great of India falling, a victim of Communist China’s imperialism. The present drift leads to this culmination and even the Indo-Soviet treaty will then not save us.

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Federal Structure and States’ Rights

Original: https://www.spontaneousorder.in/p/federal-structure-and-states-rights

Author: Spontaneous Order

Published: 2018-08-02T09:50:01.000Z

Topics: indian-federalism, states-rights, economic-planning, centralization

> The subject of the Federal Structure and States’ Rights is one in which my interest dates back to my membership of the Constituent Assembly and its Committees. As it happens, I was a member of the Committee appointed on 24th January, 1947, on a motion b

**Summary:**

Minoo Masani, drawing from his experience in the 1947 Union Powers Committee, critiques the erosion of India's federal structure through central overreach. He opposed Jawaharlal Nehru's push to place 'Economic and Social Planning' in the Union or Concurrent List—ultimately Concurrent—favoring a decentralized, Gandhian economy over Soviet-style planning. Parliament's 1951 Industries (Development and Regulation) Act exploited Union List provisions to control industries originally in the States List, with the Centre now dominating 93% of undertakings with fixed capital over Rs. 2.5 million by output value, including trivial items like razor blades and soaps. Central ministries for state subjects like education, agriculture, and industry have reduced states to 'glorified Municipalities.' All India Radio's departmental control exemplifies media centralization; Masani supports the Chanda Committee's call for autonomous corporations akin to the BBC. He advocates reforming the Planning Commission into an independent advisory statutory body coordinating state-initiated plans. India's diversity demands genuine federalism—tighter than in the US or Australia but undermined by Delhi's power concentration, risking authoritarianism and alienations in states like Kashmir and Tamil Nadu. No constitutional amendments needed; adhere to conventions via consultation and non-partisan Centre-State relations.

**Key points:**

- Central overreach via the 1951 Industries Act shifted industry control from States to Union List, dominating 93% of large industries by output.
- Place planning in States List or reform Planning Commission as advisory body with state-led multi-tier planning.
- Autonomize radio and TV under statutory corporations like BBC to escape Centre's dominance.
- Strengthen federalism through constitutional conventions, continuous state consultation, and Centre avoiding partisanship, without amendments.

**By Spontaneous Order**

* * *

The subject of the Federal Structure and States’ Rights is one in which my interest dates back to my membership of the Constituent Assembly and its Committees. As it happens, I was a member of the Committee appointed on 24th January, 1947, on a motion by Rajaji to examine the scope and content of the subjects that should be allotted to the Centre, which came to be known as the Union Powers Committee. There were twelve members, with Jawaharlal Nehru as Chairman, and Mr. Sarat Chandra Bose, Dr. Pattabhi Sitaramayya, Pandit Govind Ballabh Pant, Sir N Gopalaswamy Iyengar, and Dr. K. M. Munshi among my fellow members.

It was in this committee that perhaps for the very first time an issue which was later to develop into one of the major dividing lines in Indian politics came up in a small way. I recall a significant passage at arms that took place between Pandit Nehru, our Chairman and myself, when Jawaharlal Nehru asked for the expression of members’ views as to which list planning should be placed in. I promptly answered that it should be in the States’ List. Nehru glared at me and said he entirely disagreed and that it should be placed in the Union List. This was to be the firist of many debates he and I were to have about the nature of Planning since he believed in Soviet style comprehensive planning and I stood for the Gandhian concept of a decentralized economy. Naturally, Jawaharlal won and the subject of “Economic and Social Planning “ was placed in the Concurrent List covering matters in regard to which both the Union and the States could legislate. The Report of our Committee observed: “ We have included planning in the above list for the reason that although authority may rest in respect of different subjects with the units, it is obviously in their interest to have a co-ordinating machinery to assist them “.

The States’ List includes three important entries, namely Industry, Trade and Commerce, and the production, supply and distribution of goods. On the other hand, the Union List included “industries declared by Parliament by law to be necessary ‘for the purpose of defense or for the prosecution of war” and “industries the control of which by the Union if declared by Parliament by law to be expedient in the public interest.” The way in which this allocation of subjects has worked has unfortunately upset the balance of\` the Federal Constitution. Not only did Parliament enact the Industries (Development and Regulation) Act in 1951 specifying the list of industries which should be controlled by the Centre but in the course of time more and more industries were added to the list and, for all practical purposes, the subject of Industries has been virtually shifted from the States List to the Union List. The Annual Survey of Industries shows that, in so far as under takings with a fixed capital of Rs. 2.5 million and over are concerned, the Centre has now asserted its control over as many as ninety-three per cent of these industries as computed by the value of their output. It has been sarcastically pointed out that Parliament has used its power to hold that the public interest demands that it should control the production of articles of such vital and strategic importance as razor blades, gum, shoes, cosmetics, soaps and other toilet requisites!

Can there be any doubt that a fraud has been perpetrated on the Constitution? The existence in Delhi of full-fledged Ministries For Education, Agriculture, Industry, Labour and Home Affairs despite these subjects being in the States List, has over the years contributed to the erosion of the autonomy of the States and made them little more than glorified Municipalities or Local District Boards. Yet another example of this trend is the manner in which the Centre has monopolized the media of mass communication. All India Radio, which should really be a public service at the disposal of the Union Government, State Governments, voluntary associations and the public at large, is run departmentally by a Ministry of the Union Government. The only way in which the rights of the States could be asserted and these important means of communication freed from the dominance of the Centre would be to give effect to the recommendation of the Chanda Committee that the Radio and Television Services should be placed in charge of autonomous statutory Corporations like the B. B- C. and I. T. A. in the United Kingdom.

In so far as the Planning Commission is concerned, a Seminar which met in Agra from la/Iarch 24 to 26, 1972, under the auspices of the Leslie Sawhney Programme of Training for Democracy, at which I happened to be present, had an interesting proposal to make: “ In the course of discussion on the economic aspect of federalism, the role of the Planning Commission came up. It was agreed that the Planning Commission should be an expert independent statutory body, acting in an advisory capacity, and should consist of experienced men from public life, industry and trade unions and administration. Apart from preparing a national plan in certain specified areas, its role and scope should also include the indication of priorities and the co-ordination and integration of the State plans into a national plan. Initiation and formulation of detailed planning should, however, be on a multi-tier system at the State, metropolitan and district levels. The discussion on the development of backward regions led to the conclusion that, where possible, there should be regional planning for backward regions in a State.

The Constitution when it was framed established what might be described as a tight Federation with less autonomy for the States than in most federal constitutions of the world such as those of the U.S.A., Australia and Switzerland. If there is any one country that needs a federal structure more than others, it is India with its size, population and wide diversities of race, religion, and caste and ways of life. Even the maintenance of a free and plural society cannot be assured in such conditions except on the basis of genuine federalism

Already the concentration of power in a few hands in Delhi has contributed towards the erosion of our democracy and democratic institutions and threatens to end up, as in Bangladesh in a one-party authoritarian rule.

On the other hand, one has to take note of a growing sense of alienation from the Centre which is stronger in some States like Kashmir, Nagaland and Tamil Nod than in others. This alienation has historical and economic aspects. Regional aspirations as also linguistic and other tensions are real. They cannot be wished away. They need to be handled with sympathy, understanding and imagination. I am convinced no amendment of the present Constitution is called for since it is not the Constitution that is defective. On this point I find myself in agreement with the Administrative Reforms Commission. All that is required is an acceptance of appropriate conventions and a respect for the spirit and the letter of the Constitution. There is ample scope within the Constitution for sound federalism provided there is a continuing process of consultation with States; the Centre scrupulously avoids any suspicion of partisanship and political motivation in dealing with a particular State and a continuous search is made for procedures and modes of associating the States with the decision-making processes of the Union.

*Further writings of Minoo Masani can be accessed at the [Indian Liberals](http://indianliberals.in/) open, digital archive.*

Read about impacts of GST on Indian Federalism: [https://spontaneousorder.in/gst-federalism/](https://spontaneousorder.in/gst-federalism/)

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Is Slashing Stent Prices The Solution?

Original: https://www.spontaneousorder.in/p/is-slashing-stent-prices-the-solution

Author: Spontaneous Order

Published: 2018-08-02T09:23:26.000Z

Topics: price-controls, healthcare-markets, medical-devices, market-competition

> In July 2016, the government notified the inclusion of stents in the National List of Essential Medicines (NLEM), citing irrational and exorbitant prices. In the notification, dated 13th February 2017, the National Pharmaceutical Pricing Authority (NPPA..

**Summary:**

The Indian government's 2017 price cap on coronary stents, justified by 'unethical profiteering' amid 30 million heart patients and 2 lakh annual surgeries, fails as a solution to high prices driven by supply chain markups—where imported drug-eluting stents land at Rs.17,000 and bare-metal at Rs.5,000-7,000, yet sell for 3-4 times more due to MNC, distributor, and hospital profits, plus doctor-distributor nexuses. From a classical-liberal viewpoint, price controls reflect government failure to foster competition and innovation, ignoring a $400 million stent market in 2012 projected to triple by 2021, potentially rivaling US and Europe if barriers like permits and credit access are eased. Instead of caps that subsidize the rich, drive out premium products like Abbots' bio-absorbable stents, harm medical tourism, and halt R&D, the government should streamline supply chains, improve logistics, penalize hospital monopolies, mandate price transparency, boost domestic manufacturing, and empower patients with stent knowledge to curb unnecessary procedures. Bans on kickbacks, like Maharashtra's 2017 bill, are insufficient without market reforms, echoing Milton Friedman's warning on permanent government programs.

**Key points:**

- Price caps on stents ignore supply chain profiteering and fail to address barriers to domestic competition in a market valued at $400 million in 2012.
- Promote fluid supply chains, ease trade restrictions, improve logistics, and increase credit access for local stent manufacturers.
- Mandate public disclosure of stent prices and types in hospitals to enable informed patient choices.
- Penalize hospitals forcing purchases from in-house stores and doctor-distributor kickbacks to reduce unnecessary stenting.
- Price controls subsidize affluent patients while withdrawing innovative stents, harming medical tourism and R&D.

**By Hinan Ali**

* * *

In July 2016, the government notified the inclusion of stents in the National List of Essential Medicines (NLEM), citing irrational and exorbitant prices. In the notification, dated 13th February 2017, the National Pharmaceutical Pricing Authority (NPPA) observed:

“As whereas the Government is under constitutional obligation to provide fair, reasonable and affordable price for Coronary Stents and therefore its immediate intervention is imperative to check unethical profiteering and exploitative pricing; and whereas Paragraph 19 of the DPCO, 2013 inter-alia authorizes the government, in extraordinary circumstances, if it considers necessary to do in a public interest, to fix the ceiling price or retail price of any drug for such period, as it deems fit.”

Choice, innovation and a market driven by competition is the bête noire of a government determined to create hurdles instead of helping new firms manufacture better and affordable products by easing the process of obtaining permits to set up a business.

A coronary stent is a tiny wire mesh tube that is placed inside an artery in order to remove any blockages and widen it so that blood flow is uninterrupted. It is also used to support weak arteries which have difficulty in maintaining blood flow. Stents that are not coated with drugs are called bare metal stents. There is another category of stents which elute an anti-proliferative drug to prevent cell proliferation — known as “medicated stents” or drug eluting stents (DES). Both are widely used.

The government’s defense of a cap on stent prices is that charging patients in an “unethical” manner is wrong and hence, keeping in view the essentiality of stents in a country where there are approximately 30 million heart patients and 2 lakh heart surgeries taking every year, it is the binding responsibility of the government to serve the common people. According to WHO statistics, ischemic heart disease was the leading cause of death in India, killing over 1.2 million people in 2012. This number has increased since then — 53% increase from 2005 to 2016 according to the Global Burden of Disease (GBD) data published in the Lancet this year.

A price control is not a permanent solution to the problem of high prices. It reflects a government’s failure to address the long-term market issues — factors which impede the growth of businesses and markets. If promoted in an effective manner, the stent market in India has the potential to outperform the largest stent makers of US and Europe. “Indian Coronary Stent and Angioplasty Market through 2020”, a market report published by ABMRG (Ace Business and Market Research Group) in 2015 states that the stent market in India was valued above $400 million in 2012. The report further says that this market would triple by 2021.

The problem is not that the costs of stents outside India are skyrocketing. Price disparity remains abysmally high. The estimated average landed cost of an imported drug eluting stent (DES) is only Rs.17,000 while that of a bare metal stent (BMS) is between Rs.5000–7000.

So, why are we paying so high?

It has more to do with the supply chain — firstly the MNCs which import stents make a profit, secondly the distributors make their own profit, and finally hospitals also push in their profits. Sometimes this profit margin is three to four times the landed cost of the stent. This kind of middleman money-making is the reason for us paying such exorbitant prices for life-saving stents. It is the same for food items whose costs swell as they go through one middleman to the next. Cutting down on the intermediaries will reduce costs significantly. Other reasons for the high cost of stents include maintaining an inventory of stents in hospitals even when a few stents are used per day and a doctor-distributor nexus wherein distributors pay doctors for recommending stents to patients who don’t really need them.

How to address this issue?

Make the supply chain fluid, ease restrictions on trade, facilitate logistics by improving infrastructure, penalize private hospitals forcing patients to purchase stents from their own stores at high prices, promote competition in domestic stent-making market by increasing access to credit, and make it mandatory for hospitals to make information about stent availability/cost public.

Also, information dissemination about stent types and usage can help patients make informed decisions. Many of us who enter hospitals or clinics do not even have the faintest idea about the type of medication the doctor recommends. As we make a transition towards a post-industrial society, the fact that we remain so unaware about important things around us is the biggest problem besetting our lives today. In a service-based society, knowledge is a valuable tool. The decision about who needs a stent and who doesn’t must be based on specific guidelines — the knowledge of which should be easily available.

Recently the government of Maharashtra drafted a bill (Prevention of Cut Practice in Healthcare Services Act, 2017) to stop the practice of kickbacks in medical networks — commissions, cuts and gifts received by doctors, pharma companies, labs, maternity homes, clinics, and dispensaries in exchange for referrals. The decision of whether a patient needs a stent or not — and what kind of stent is good enough to do the job should be rationally justified. A ban on commissions or a cap on prices will not yield results. Doctors will find alternate ways of receiving their cuts and distributors will dig up other routes to sell stents at their own prices. It is only through obtaining prior knowledge and making informed choices can things be driven in the right direction.

Capping the price of stents subsidizes the rich who can afford expensive stents.

A supposedly all-inclusive measure as this will indirectly subsidize the rich who could otherwise afford to buy stents at high prices anyway. There are patients who fly in and out of India for angioplasty and stenting. They are willing to pay high prices for high-quality stents. Because of this cap, high quality stents may lose disappear from our market altogether. It will badly impact our medical tourism and companies will cut down on further research and innovation.

Abbots Healthcare announced the withdrawal of two of its latest generation coronary stents from India, including a bio-absorbable stent it had introduced four years ago, citing commercial unviability. It got the permission to withdraw its premium metallic stent, Xience Alpine in September this year.

The worse is yet to come. In the words of Milton Friedman,

“Nothing is so permanent as a temporary government program.”

Instead of price control, the government should have addressed the barriers to competition in the coronary stent market.

* * *

**About Hinan Ali**

Hinan is a graduate from National Institute of Technology (NIT), Srinagar and is currently working at Centre for Civil Society. His subjects of interest include politics, psychology and philosophy. He enjoys reading Camus, Dostoyevsky, Rand, and Mises. Other than that, he takes French language classes in his free time and actively engages with people to gain newer perspectives.

## Key to Reforming Indian Education: Rescuing Government Policy-making and Regulatory Functions from Service Delivery

Original: https://www.spontaneousorder.in/p/key-to-reforming-indian-education-rescuing-government-policy-making-and-regulatory-functions-from-service-delivery

Author: Spontaneous Order

Published: 2018-07-17T09:35:53.000Z

Topics: indian-education, regulatory-reform, private-schools, government-separation

> Currently, the governmental roles of policy making, regulation and service delivery are combined within a single entity in the Indian Education Sector. There is a need, however, for these to be separated into 3 different entities with an “arms- length

**Summary:**

In Indian school education, government departments combine policy-making, regulation, and service delivery, consuming nearly all bandwidth on running massive government school systems—like 14,000 schools in Haryana—leaving no time for thoughtful reforms, especially for the private sector that serves 44% of students (11 crore children). This setup fosters competitive bias, with officials prioritizing government school metrics (e.g., pass rates, IIT admissions) and viewing private schools negatively, resulting in knee-jerk policies like Gujarat's fee regulation that worsen problems. Despite government desires for high-quality, affordable private education and abundant reform ideas from private stakeholders—such as easing recognition/non-profit rules, joint committees, and PPP models—the 'market' for ideas fails to clear due to inaccessible bureaucrats. The author, drawing from stakeholder interactions, advocates separating these functions into three arms-length entities (as in finance, telecom, electricity), owned by government but independent, to enable focused policy-making, reduce bias, and promote healthy sector development from a classical-liberal lens emphasizing private sector innovation and reduced government operational overload. Key hurdles: awareness and political will.

**Key points:**

- Separate government education functions into distinct policy-making, regulatory, and service-delivery entities with arms-length relationships to free bandwidth for reforms.
- Private sector serves 44% of students (11 crore children), yet faces biased regulation due to officials' focus on government school performance.
- Reform ideas like easing entry barriers, joint committees, and PPPs exist but are ignored amid operational overload.
- Model separation on successful precedents in finance (RBI, PSU banks), telecom, and electricity sectors.
- Achieve change through raising awareness and building political will at state level.

**By Vikas Jhunjhunwala**

* * *

Currently, the governmental roles of policy making, regulation and service delivery are combined within a single entity in the Indian Education Sector. There is a need, however, for these to be separated into 3 different entities with an “arms- length” relationship between them (similar to sectors such as finance, telecom and electricity). Doing so would free up valuable bandwidth for policy making and regulation which is currently being impeded by service delivery. In turn, this would enable an in- depth understanding of the issues faced by private sector entities, leading to the healthy development of the sector as a whole.

After many years of experience talking to stakeholders across the spectrum in Indian school education, I have realized that most education experts and government bureaucrats, while declaring the primacy of the Indian state in providing education services, are accepting that the private sector has a role to play and is here to stay (government data indicates that the private sector serves 11 crore children representing a 44% market share). In addition, government ministers and bureaucrats also express desire to have a private sector which provides high quality services at reasonable prices and are distressed that, currently, this is not the case.

On the other side, I have also come across many researchers, policy think tanks, and school associations from the private sector with tremendous ideas to help the government achieve the above vision. Some of these ideas include reforming recognition requirements and the non-profit rule to lower barriers to entry, having joint committees between government and school associations for on-going dialogue and quick resolution of issues, and PPP models where the private sector can take over various aspects of the running of a government schools to bring innovation and accountability in the system.

Despite the “demand” for ways to bring reforms in Indian school education, and the “supply” of great ideas for the same, it seems the “market” is not clearing. My own experience and the experience of others shows that it is extremely difficult, if not impossible, to get time to even be heard by government ministers and bureaucrats. Clearly, without any change in this, one cannot expect any concrete, considered reform. In fact, the only policy changes that happen seem to be “knee jerk” political responses such as the fee regulation bill in Gujarat that try to address the symptoms and not the root cause of problems. These kind of ill-considered changes often make the situation worse.

My submission is that the paramount reason for the above situation is the sheer lack of time among government ministers and bureaucrats as the service provision function (of running the huge government school apparatus) takes up 99% of management time and energy leaving almost nothing for policy making and regulation. As someone who runs a school, I know the amount of management bandwidth is takes to run one school. Everyday operational challenges and emergencies eat up huge amounts of time and energy. In a small state such as Haryana, the state government’s education department runs more than 14,000 schools! It is hardly surprising that running this huge apparatus leaves almost no time to think broadly about policy making and regulation for the private sector and the sector as a whole.

Another related reason for the step-motherly treatment of the private sector is that, given the entire education department is spending almost all its time and energy in running the government school system, their key success metric is the performance (in terms of pass percentage, number of government school students getting into IITs, etc) of the government schools. Comparison of their performance with private school students is inevitable and is even tom-tommed by the ministers in the media. Consequently, there is a sense of competition with the private sector which naturally shapes unduly negative perceptions about the private sector. These negative perceptions of the private sector inevitably come through in whatever policy making and regulation does occur. Think about how Airtel feels about Jio and what would happen if Jio were in charge of setting telecom policy!

An analogy to understand the current situation is to imagine if the finance ministry of the central government were also in-charge of day to day running of the PSU banks. And by the way, there is no RBI for regulatory oversight either! It is not difficult to realize that private sector banks and financial entities would be in much worse shape and the healthy development of the financial sector would be considerably hindered.

For a moment, let us set aside the impact of lack of time due to running government schools on private sector policy and regulation. I would imagine that this lack of time for policy making would also impact the government system — one would be too terribly lost in the trees to even understand whether one is in the right forest.

The answer to the above conundrum is technically simple — separate out the policy making, regulatory and service delivery functions of the government into different entities with an arms length relationship between the three. Similar to PSU banks, government schools should be housed in a separate “service delivery” entity or entities under the ownership of the government. Clearly, as education is a state subject, this would need to happen at the state level. But India has experience doing this in many sectors at the central (finance, telecom, airlines) and state (electricity) levels and can leverage these experiences. So, clearly it can be done. The key constraints are a) awareness of this issue; and b) political will to make change happen.

References:

DISE report 2014–15. DISE refers to ‘District Information System for Education’. It is school level data collected annually from all districts in India by the government through National Institute of Educational Planning and Administration (NIEPA), New Delhi. DISE data can be accessed from [http://schoolreportcards.in/SRC-New/BasicSearch/BasicSearch.aspx](http://schoolreportcards.in/SRC-New/BasicSearch/BasicSearch.aspx)  
DISE report 2014–15  
“Why Delhi govt schools again beat private institutions in CBSE 12th board results”, Hindustan Times, May 30, 2017

* * *

**About Vikas Jhunjhunwala**

Founder & CEO of Sunshine Schools, New Delhi, Vikas Jhunjhunwala has experience across sectors of education, financial inclusion, consulting and has worked extensively in the Not-for-Profit Industry. He has played diverse strategic and operational roles including Practice Head, Industry Expert, Consultant, Project Manager, as well as Relationship Manager.

## The Red Remembrance 2.0: Comrades Who Went Liberal (well….sort of)

Original: https://www.spontaneousorder.in/p/the-red-remembrance-2-0-comrades-who-went-liberal-well-sort-of

Author: Spontaneous Order

Published: 2018-07-17T08:33:47.000Z

Topics: russian-revolution, war-communism, new-economic-policy, central-planning

> PART 2 OF THE RED REMEMBRANCE: 100 YEARS OF THE RUSSIAN REVOLUTION In our last venture, we had left the Russians on the brink of a new beginning. Lenin and his Bolsheviks had ‘stormed’ the Winter Palace and had freed the Proletariat from the crony ‘

**Summary:**

Following the Bolshevik seizure of power, Russia faced civil war against White, Green, and Black armies amid Brest-Litovsk peace talks stalled by Trotsky's 'No War, No Peace' policy, prompting War Communism: nationalization of land and industries, banned strikes, grain requisitions, and militarized railways. This centralized control, justified by Bukharin and Preobrazhensky as ending capitalist anarchy and class war, instead caused economic collapse—industrial workers fell from 3.6 million in 1917 to 1.5 million by 1920, rouble collapsed, railways broke down, leading to famines, peasant revolts (Tambov, Ukraine), and Kronstadt sailor rebellion by the proletariat itself. Civil War (1918-23) casualties were immense, alongside executions (1918-22). Facing demobilized armed soldiers turning bandit and 1921-22 famine killing millions, Bolsheviks retreated to New Economic Policy (NEP) in 1921: ended forced requisitions for fixed tax-in-kind, denationalized small industries (10,000 by 1922), restored wages and trade, allowed private agriculture and 'trusts,' while retaining 'commanding heights' (banking, foreign trade, heavy industry). Lenin urged communists to 'learn to trade' and accept foreign concessions. NEP stabilized currency by 1924, weathered 1923 'scissors crisis' via market forces and interventions, achieving 'High NEP' recovery by 1925—vindicating partial markets over pure communism, though paving way for Stalin's centralization.

**Key points:**

- War Communism's over-centralization caused industrial workforce to halve from 3.6 million to 1.5 million, rouble collapse, and food shortages fueling rebellions like Kronstadt.
- Bolsheviks launched NEP in 1921, replacing grain requisitions with fixed taxes, denationalizing 10,000 enterprises by 1922, and allowing private trade to revive economy.
- NEP stabilized currency by 1924, resolved scissors crisis through rising industrial output and state trade interventions, marking economic recovery under mixed markets.

**By Rishika Yadav**

* * *

PART 2 OF THE RED REMEMBRANCE: 100 YEARS OF THE RUSSIAN REVOLUTION

In our last venture, we had left the Russians on the brink of a new beginning. Lenin and his Bolsheviks had ‘stormed’ the Winter Palace and had freed the Proletariat from the crony ‘government of the banker’. Lenin even had a movie produced in 1918 called the ‘Storming of the Winter Palace’ (available on Youtube). All that was left now was to make good on their promises by ending Russian participation in the First World War, removing abject poverty, rehabilitating soldiers, arranging for sufficient provisions in the towns and countryside, while also ensuring that the ‘Workers of the World Unite!’. After all, if Russia was the only socialist country in the world, it was setting itself up for an isolated existence.

The first order of business remained the end of WW1 for Russia. However, a state without an army is usually considered unfit for peace and ripe for foreign occupation. With the Tsarist troops disbanded, the Russian army now comprised of the voluntary Red Guards and the Cheka (the secret police). They were now known as the Red Army. A ceasefire was ordered for the same and wires sent out to negotiate terms with the German state. Trotsky was Lenin’s representative at the Brest-Litovsk negotiations with Germany. Russia could no longer expect aid from its allies and if it continued fighting then anarchy was inevitable. Peace, therefore, was non-negotiable. German demands were harsh, as harsh as the Treaty of Versailles would be if not more. The war repatriations, cessions kept mounting and Russia could concede to only so much. But Trotsky was an adamant man. He adopted a policy of ‘No War, No Peace’ i.e. even if peace wasn’t brokered, Russia will not resume war. The stalemate stays. Trotsky’s actions were broadly guided by three factors: public fervour, Lenin’s temper, and a series of unfortunate events that had ultimately culminated into a Civil War in the gloomy days of December.

Petrograd had been pretty compliant when it came to the Bolsheviks. The rest of Russia was not. Exiled capitalists, Cadets (the Liberal party members), the ex-Tsars’ regiments, far-right Generals, and anybody else Lenin had offended — banded together and formed the unlikely ‘White Army’. The anti-Lenin Socialists, although less in number, refused to compromise on their ideology and didn’t join the crony capitalist army. Instead they formed the ‘Green Army’. There was also a ‘Black Army’ of the Ukrainians. Ukraine was one of the territories Russia agreed to cede to the Germans. It was to be divided into smaller principalities for the many Prussian Princes. Or so they thought. The Ukrainians have a saying, ‘If every fool wore a crown, we should all be Kings’. It is easy to see why they weren’t too happy about the arrangement.

To put it simply, if we view the Austro-Hungarian-Prussian-Ottoman alliance as one army, then Russia was now fighting four armies. A 300% increase. Not a good deliverable for the promised peace.

Lenin’s response to the debilitating situation was Communism. Not just any communism — War Communism. With Petrograd in control and a relatively compliant (albeit impassioned) population, the Bolsheviks chose to tighten state control on everything under the Soviet sun. Land was nationalised, as were industries. Strikes were banned (the revolution was over, so no need for that now). A systematic requisition of agricultural surplus was set up along with public distribution shops for rationing of commodities. Railways went from centralisation to militarisation. The Bolsheviks were not holding back.

Centralisation is the natural response of any state that faces external aggression, communist or not. However, this does not render them unaccountable for their actions. The Bolsheviks had relied on their discourse with the common man that supported them into power. Once in power, the battle to stay in power began. This time, the discourse revolved around the failures of the capitalist/imperialist state, the natural evolution to a rule of the Proletariat, and the need to move towards a harmonious Communist state. As Nikolai Bukharin and Yevgeni Preobrazhensky explained in the ‘ABC of Communism’ (published in 1920),

‘The first reason \[…\] for the disharmony of capitalist society is the anarchy of production which leads to crises, internecine competition, and wars. The second reason \[…\] capitalist society is not one society but two societies; it consists of capitalists, on the one hand, and of workers and poor peasants, on the other. Between these two classes there is continuous and irreconcilable enmity; this is what we speak of as the class war. \[…\] the communist method of production must present the following characteristics: In the first place it must be an organized society; it must be free from anarchy of production, from competition between individual entrepreneurs, from wars and crises. In the second place it must be a classless society, \[…\] society of comrades, a communist society based upon labour \[…\] the organization shall be a cooperative organization of all the members of society \[…\] it puts an end to exploitation’

In other words, state control was vital to prevent the exploitation of the Russian people. Bukharin and Preobrazhensky also noted the weaknesses of the system in Russia. While the Proletariat had triumphed in the October days, the reality was that most of Russia was made up of farmers and not workers. A communist consciousness had to be indoctrinated among the masses.

In November 1918, Germany surrendered to the Allied Forces. The Red Army only had to deal with the fragmented Civil War now. The fighting went on for three years with smaller skirmishes seeping into 1923. Ultimately however, the Bolsheviks triumphed once more. Peace, finally. And the cost?

FIRST WORLD WAR CASUALTIES (1914–1918)

Image Source: World War I- People, Politics, and Power, Britannica Educational Publishing (2010)  
CIVIL WAR CASUALTIES (1918–23)

[

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Image Source: S. A. Smith, The Russian Revolution: A Very Short Introduction

EXECUTIONS (1918–22)

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Image Source: S. A. Smith, The Russian Revolution: A Very Short Introduction

With thy kingdom secured, the Bolsheviks now only had to concentrate on removing abject poverty, rehabilitating soldiers, arranging for sufficient provisions in the towns and countryside, while also ensuring that the ‘Workers of the World Unite!’. The post-War era had its own challenges. The excessive focus on the war meant industrialization had suffered immensely since all industries had been re-directed to cater to the crises at hand. Similarly, agricultural requisitioning had created a shortage of food supply as the peasants had no incentive for increasing production. Once more the towns were going hungry. In the Bolshevik dictionary of things ‘proletariat’ consisted of the workers, soldiers, sailors, and the poor peasants and all four sections were severely suffering under the new Communist Regime.

With the war over, the need for a massive standing Red Army had drastically lessened. The Cheka was vigilant and efficient in its purges so the threat of uprisings was low. The government chose to demobilize the army as a first step to cap its expenditure. Consequently, demobilization meant there were large sections of men who were unemployed, tired, hungry and worst of all, armed. Added to this was the turmoil of transportation. The Russian Railways, it seems, had exhausted its capacity and suffered a breakdown. So the frustrated and armed ex-soldiers were now stranded frustrated and armed ex-soldiers. ‘With over two million demobilized by the early months of 1921, the Bolsheviks had discovered that the fighters of the revolution could be transformed overnight into bandits,’ Sheila Fitzpatrick.

If that wasn’t bad enough — try stranded, frustrated, armed and starved. The problem of food shortage was severe. Fear of the Government was even greater. As the centre pushed for more supplies, the police and the state officials became ruthless in their confiscation of surplus. The peasantry was resentful of the forceful acquisition of food grains. Without incentive, the productivity of farmers, the sowings dropped. In turn, the industrial workers residing in the towns suffered from hunger and began to migrate back to the villages. By 1920, the number of industrial workers reduced to 1.5 million from 3.6 million in 1917. This further handicapped the industries.

Added to labour shortage, there was also a shortage of fuel, spare parts and raw materials. ‘With the fuel crisis causing the closure of many state-operated factories, 1921 was a nightmare year for people and government alike,’ says Alec Nove. Under the buckling pressure of the economy, Rouble, Russia’s currency, collapsed. This meant no foreign exchange which in turn meant trade collapsed. Since everything was under the central control, the government could neither purchase nor import spares nor fuel. They couldn’t import anything for that matter. Furthermore, the lack of fuel meant locomotives could not be used, half of which had already been termed as ‘sick’ and couldn’t be repaired because there was no manpower or spare parts.

Could it get any worse?

‘Over-centralization’ is real.

The excessive focus on the centre created a detachment of the central government from the local government and its people in far-flung areas. There was a lot of administrative chaos, misunderstanding and misinterpretation between the various local units and the government. Resource allocation in itself became a challenge. With such a sudden and large-scale nationalization, the government found itself burdened with the managements of several industries, also known as bad management. Furthermore, since the Rouble had collapsed, there were no wages. Payments were now being made in kind. Rations and services were free of cost. ‘The result was a monstrous growth of bureaucratic tangle, an unworkable degree of centralization (‘glavkism’), waste and inefficiency,’ (Nove, 1993).

Between all of this (yes, even chaos has a centre) the main problem, however, was that although Russia was professing socialism, one main sector remained capitalistic in nature. Agriculture. Despite nationalization of land, the peasants were still producing as individuals. The lack of consumer goods in markets, forceful requisition, bad yields, mismanagement etc pushed the peasants into rebellions. In Ukraine, a peasant army headed by Nestor Makhnov fought against the Bolsheviks. In Tambov, a peasant revolt was crushed by the Bolsheviks with the use of 50,000 Red Army troops. However, the worst blow to the New Regime came from a class of sailors. In March 1921, sailors at the Naval Base of Kronstadt rose up in rebellion. The revolt occurred during the tenth party congress and several delegates had to leave in order to join the Cheka and the Red forces to crush the rebellion.

The Soviet regime was now fighting the revolutionary proletariat.

Clearly, Lenin and his Comrades had a few too many issues that needed dealing. And their response to the utter madness was no less maddening.

The Communists decided to free the markets, sort of.

Parallel to the Kronstadt revolt, in the spring of 1921, the forced requisitioning was ended and instead a fixed tax in kind was put in place. This was the first step in the beginning of the New Economic Policy (NEP). But if only. Such baby steps were shadowed by the Mother Nature’s fury. A famine in 1921–22 wrecked the country. Unaccounted millions died. An emergency relief committee was set up by the government with prominent non-communists as well as anti-communist members. Taxes were waived off in the affected provinces, mainly the Volga valley, North Caucasus and southern Ukraine. However, the government’s relief was too small to provide any ineffective help. Aid from the American Relief Administration was accepted which was feeding over ten million starved souls by 1922. Thus, the Russian economy took another blow as its major export had been food grains.

And onwards we go.

In February 1921, the ‘Gosplan’ had been implemented which was responsible for making general economic plans for the Soviet Union. Later this came to be known as the State Planning Commission. It helped in the creation of a budget and concerned itself with questions of currency, credit, banking and standardization of weights and measures and, issues such as those of prices, location of industries etc. On 17 May, 1921, the decree for nationalizing all small-scale industries was officially revoked. By early 1922, 10,000 enterprises had been denationalized and by October 1923, the number of enterprises leased for a period of 4–5years had increased by 5600. Economic centralisation was also relaxed. By August 1921, most branches of the state-controlled industries were allowed to dispose one half of their output. However, the state retained the other half. In return for this proportion, the state provided fuel and raw materials. Between July-August 1921, wages were restored and, services were one more charged. In November 1921, rationing was abolished. However, the state retained control of what has been referred to as the ‘commanding heights’ of the economy which included the banking sector, foreign trade and large-scale industries such as the railways. NEP was a form of mixed economy with private agriculture, legalized trade, and small-scale private manufacturing along with state control over the commanding heights.

Constructive reforms are always a great idea. But the Bolshevik reforms were ideologically horrible ideas. Communists inducing free markets in the first Socialist State ever? How do you explain that?

The advent of War Communism had been seen as a great leap towards Socialism and the policy had been celebrated by several party members. However, as Maurice Dobb says, ‘Lenin had no intention at first to launch into the extremes of war communism that he was driven by emergencies of war, hunger and chaos into an attempt to control everything from the centre.’ It was only natural for the NEP to be seen as a step farther away from the very essence of what the party stood for. The policy of NEP faced a similar peril as that of War Communism. Neither had been purely launched for an ideological purpose but they were going stand the Marxist test anyways. From a Communist stand-point, however, NEP was a retreat and a partial admission of failure. Milikov spoke of NEP as the beginning of the end. Prokopovitch declared that there was little hope for the establishment of a Russian national and state economy. But, as Alec Nove puts it, ‘Events, rather than the central committee, provided a potent means of persuasion.’ i.e. no money, no honey.

The government was in dire need of credit as it still needed to rebuild its railways and, most importantly, it needed fuel. And for credit, a stable currency was needed. To induce this, industries were divided into autonomous units as opposed to being part of one great ‘firm’. These units were called ‘trusts’ and each trust contained several factories of one kind. Birds of a feather flock together. These trusts were allowed to operate commercially although initially, there were limits to their operations. By early 1922, the trusts were allowed to fend for themselves. They no longer had to give preference to the State and were to make profits and manage expenditures.

As Lenin said, Communists had to learn to trade.

Lenin also fought hard for allowing concessions to foreign enterprises. He argued that by allowing foreign capitalists to exploit resources such as oilfields and timber forests, Russia stood to obtain materials it desperately needed. Foreign companies were eventually allowed but only 42 concessions were made of which 31 remained. Unlike their attempt to induce foreign capitalists, foreign trade was much more favourable and it began to steadily rise. In 1922, the Soviet Union signed a treaty with Great Britain. Through this, the centre was able to import machinery, spares, automobiles etc and in return, they had to export fuel and food surpluses. Some consumer goods were also imported to give incentives to workers. In April 1922, the Treaty of Rapallo was signed between Germany and Soviet Union that renounced war claims. By 1924, several leading European powers followed the German example. U.S.-S.U. relations remained strictly economical and trade between both countries was favourable. By 1930, the United States was Soviet Russia’s leading exporter in goods.

However, the major problem of the currency still remained. The Rouble had depreciated drastically. Bazarov had once jokingly quipped that , ‘the time is not far distant when the sum of those nominal roubles will exceed the number of all atoms or electrons of which our planet is composed.’ In October 1921, the State Bank had been created and along with the People’s Commissariat o Finance (Narkomfin) under the finance minister Sokol’nikov, reforms were carried out. By 1924, the currency had finally stabilized and the ‘tax in kind’ had been replaced by a monetary tax. In 1922, several more banks were created in order to raise credit.

1923 saw a whole new crisis (again) in the Soviet economy, one which can be seen as a consequence of NEP. 1923 was a good year for agriculture. Food production had surpassed the 1913 levels and there was demand as well as supply of agricultural produce. However, industries did not improve like the agrarian sector. There was still a shortage of spare parts, skilled labours, raw materials, transportation and, a lack of fuel. Demands for consumer products had risen but their supply had not kept pace. The initial chaotic conditions that had been created by decentralization and denationalization had created a ‘glut’ as several industrial units were in dire need of credit and had unloaded all their goods and materials in the market. This had lead to an over-crowding of the market with an excessive supply of everything. This drastically reduced the prices of Industrial goods. But, with government intervention, VSNKh (the superior state institution for management of the economy) allowed syndicates to reduce this glut.

By 1923, credit was available. In a notorious policy, to protect themselves, the Industrial units joined forces for the purpose of joint-selling. This placed them in a strong position to demand higher prices. The state industries were not producing to their capacity and, therefore, could not compete to control the market price. Thus with good yields and competition in the market, the peasants made good profits. And they lost their profits to inflation race as the price of industrial goods steadily rose while, in comparison, the price of agricultural goods was less. By October 1923, the Industrial goods were three times more than the agricultural prices. This was not only bad for the economy but ideologically, ‘Smychka’, the alliance between the proletariat and the poor peasantry was now threatened.

The Scissors crisis was self-correcting as industrial production was steadily rising. This meant that the quantity of industrial products in the market was only bound to increase and thus reduce the prices. Although, the government did take several concrete steps to control the crisis. They tried to bring down the cost of production by reducing the excessive staff that was employed. There was more stress on optimal utilization of the efficiency of machines and the staff. Conscious efforts were made to bring down the inflation. A People’s Commissariat for Trade was set-up which attempted to (with success) widen the state trade and sell commodities in rural areas at prices that were lower than those offered by Nepmen. Thus, by 1924 the crisis was averted and the blades had closed. ‘So, the NEP system of mixed economy weathered the storm, and with the establishment of a stable currency and balanced budgets, entered into calmer waters by 1924,’ says Alec Nove. In fact, the period between 1924 and 1925 is seen as a period of ‘High NEP’ as the economic situation was at its best.

Perhaps Lenin’s promises were finally being realized. If only he had lived to see them. In 1924, after a prolonged illness, the father of the Revolution passed away.

By 1925, the recovery of the economy was complete. For further economic development, the centre needed to build new infrastructure as well as repair and renovate the existing infrastructure. For this reconstruction, the government needed capital and resources, and the government was not willing to share. The stage for hard-core Communism was finally set.

And this time, it was Stalin at the helm.

REFERENCES

Nove, Alec (1990) An Economic History of the USSR, Penguin Books

Moss, Walter G. (2004), A History of Russia \[Vol II Since 1855\], Anthem Press

Fitzpatrick, Sheila (1994), The Russian Revolution, Oxford University Press

Kenez, Peter (2006), A History of the Soviet Union from the Beginning to the End 2nd Edition, Cambridge University Press

Moss, Walter G. (1997), A History of Russia Vol 2, New York, McGraw Hill

Keep, John L. H. (1976), The Russian Revolution, New York, W. W. Norton &Company

* * *

**About Rishika Yadav**

Rishika is a jack of all trades and a Master in history. She has completed her post-graduation in International History from the London School of Economics and Political Science (LSE). An avid writer by passion, she enjoys composing poetry and has self-published novels.

## The Red Remembrance: 100 Years Of The Russian Revolution

Original: https://www.spontaneousorder.in/p/the-red-remembrance-100-years-of-the-russian-revolution

Author: Spontaneous Order

Published: 2018-07-17T08:22:11.000Z

Topics: russian-revolution, february-revolution, october-revolution, bolshevik-strategy

> Note: The Soviet calendar has been used for all dates. “[…] did the military situation generate the domestic crisis which brought about the disintegration of the Tsarist regime; or were the pressures and contradictions within the social and political

**Summary:**

The post recounts the 1917 Russian Revolution, emphasizing the spontaneous February uprising driven by war-induced food shortages and hardships that toppled the Tsarist regime without leadership from any party—purely the will of the people amid WWI failures like equipment shortages, retreats, and 1916 harvest drops of 20-40%. Pre-war 1913 saw >5% economic growth and rising capitalism, but underlying labor unrest (e.g., strikes involving 1.4 million in 1914) persisted. The Provisional Government (Duma liberals) shared dual power with the Petrograd Soviet but failed to end the war or address demands, splitting moderate socialists (Mensheviks, SRs). Lenin, returning in April, rejected compromise via his April Theses, rallying Bolsheviks to 'All power to the Soviets!' Their membership surged from 24,000 in February to 350,000 by October. Exploiting government missteps like the July offensive and failed Kornilov coup, Bolsheviks formed Red Guards and seized power in a nearly bloodless October coup, promising peace to soldiers, land to peasants, bread to workers, and self-determination to minorities. From a classical-liberal lens, this highlights spontaneous popular overthrow contrasting Bolsheviks' calculated mastery of mass sentiment over liberal or moderate socialist failures.

**Key points:**

- February 1917 Revolution was spontaneous, people-led overthrow of Tsar due to food shortages, with no party involvement.
- Provisional Government failed by continuing WWI and compromising with Soviets, alienating masses.
- Lenin's April Theses shifted Bolsheviks to reject bourgeois government, demand proletarian dictatorship and peace.
- Bolsheviks grew from 24,000 to 350,000 members by promising concrete gains: peace, land, bread.
- October coup succeeded bloodlessly as Bolsheviks aligned perfectly with popular aspirations, outmaneuvering rivals.

**By Rishika Yadav**

* * *

*Note: The Soviet calendar has been used for all dates.*

“\[…\] did the military situation generate the domestic crisis which brought about the disintegration of the Tsarist regime; or were the pressures and contradictions within the social and political system already of such a refractory nature to make revolution in any case inevitable?”

~ Alan Wood, ‘The Origins of the Russian Revolution’

October 1917, the year that marks the triumph of Communism in an economically staggering, war-drained, poverty-stricken, and an ideologically conflicted society — the Tsar’s Russia. On an eerily quiet morning, members of the Bolshevik party marched into the Parliament, better known as the Duma, and overtook the interim government of disagreeable politicians sitting in the Winter Palace, residence of the former Tsar. As with any coup, all major lines of communication were captured, roads blocked, and everyone who was anyone was detained. It is a common assumption that a *coup d’etat* usually provokes reactionary forces in society, or at least in the threatened leadership. In Russia, however, not one finger rose in protest. This was perhaps modern political history’s least violent power-grab. For the Russians, it was just another morning of unseemly politics that they had grown accustomed to. That is not to say that they were an uncaring or docile lot! In fact, they were the exact opposite. In February of the same year, the average Russian had taken to the streets and had managed to achieve the impossible — they overthrew the Tsar, once and for all. No Communists, or Liberals, or Fascists, or military, or foreign intervention needed — just the good old will of the people. Since then, it had been a game of musical chairs between the parties, the leaders, and the unions. The Bolsheviks were but one of the many players. The only difference — they managed to change the game.

To unfold the events of October 1917, it is imperative to first understand the seven months of political turmoil preceding it. The Romanov dynasty’s rule over Russia lasted for nearly three centuries. It is only natural that their overthrow in the revolution of February 1917 with little bloodshed (and an on-going World War) is a contentious part of history. Some historians argue that the First World War had sounded the knell on the Revolutionary movement, while others argue that the revolution had been a long time coming (since 1905 to be precise) despite the Great War. There are also scholars who have debated the role of the war — that in fact the international fiasco had delayed the Revolution which was on-track pre-1914. Others view the war as a much-needed wake-up call for a Revolution that had already cooled off. Whatever the reason, there is consensus among historians over the complex nature of the February Revolution. It was not a linear process, it was most definitely not planned, and it was neither led by a single person nor a party.

Economically, 1913 was a good year for the Tsar’s Russia. There was growing capitalism. Heavy industries of oil, coal, mining and metallurgy were rapidly developing. Foreign investment was on the rise. Railways were spreading and light-industries like textile and food-processing were also establishing themselves. The rate of growth exceeded 5 percent per year. America and Russia were now being viewed as the emerging powers of the future. Politically, the agitations of 1905 seemed to have died down and the Tsardom appeared stable. The army had been reorganized as well. As Marc Ferro points, ‘Not everyone agreed that the situation had really improved, but the memory of 1905 was rapidly fading.’

However, even in this seemingly stable environment, the undercurrents of distaste were evident. The labour class faced bad living and working conditions clubbed with poor wages. The Duma existed only in principle and the Tsar’s autocratic power remained unchallenged. The Intelligentsia constantly voiced its discontent with the Tsar’s rule, and the rate of strikes and protests was frequent. The number of strikes recorded in 1910 was 46,643 strikes while pre-war 1914 saw as many as 1,449,234 strikes. It is around these numbers that historians argue the inevitability of the revolutionary course, had the war not redirected everyone’s attention. ‘Patriotism is usually stronger than class hatred, and always stronger than Internationalism,’ George Orwell, *Nineteen Eighty-Four*.

Russia entered the war with a lot of patriotic fervour, mass mobilization for a vast army, a weak arms industry, poor communications, lack of engineering capacities, and ill-equipped to bear the costs of supplying for a standing army. The initial fervour did deflect protests against the Tsar, but mass recruitment soon translated into a shortage of labour elsewhere. As farmhands emptied the fields and industrial workers traded their shifts for combat drills, the stage was set for the failure of the war machinery. Within the first six months, Russia was severely short on military equipment. In the spring of 1915, Germany launched a full-scale attack on Russia and forced it into a prolonged retreat. As the Russians pushed back their frontlines, the Germans captured the resources and industries they left behind. Soon a blockade ensued, cutting off Russia from her western allies and their immediate help. The land routes in the west were closed and the harbours facing the Pacific were treacherous.

As the war progressed, the relationship between the towns and the countryside worsened. All resources and transportation had been re-directed to support the frontlines. This led to a shortage of food in the towns. An unfortunate game of suspicion commenced. On the one hand the industrial workers starved, accusing the farmers of hoarding food. The farmers, on the other hand, blamed the towns for shortage of consumer commodities such as agricultural equipment, footwear, textile, kerosene, nails, needles etc. The turmoil of war-time administration and the material hardships and on both sides inflamed hostility. In the countryside, this promoted a behaviour of ‘what we have we hold’ among the peasants, further worsening the conditions. In 1916, the harvest was down by twenty percent in the south and by forty percent in the north. Consequently, in the winter of 1916–17, there was a severe shortage of bread, fats, sugar and other staple foodstuffs in the urban centres. Despite being given top priority, ration for the army began to dry up.

The urban population, particularly the urban poor, were the worst hit. ‘Civilians in town and country found themselves caught up in a desperate struggle to meet the insatiable demands of a conflict in which prospects of victory seemed ever more remote,’ observes John Keep. The number of strikes once more mounted and only a fraction had political motivation. The lack of coordination and direction made these strikes unpredictable to both the Reactionaries and the Tsar’s government.

Petrograd (St. Petersburg) was particularly hard-hit from wartime shortages. Around the middle of February 1917, only a ten day supply of flour remained. On February 18, a few hundred men began to protest for higher wages. By February 22, the few hundred had transformed into a few thousand. On February 23, women workers in the textile industry went on strike — the occasion was International Women’s Day and the demand was for ‘Bread and Peace’. The protestors sent out delegates to the mine factories and soon a larger crowd gathered. The strike was not led by anyone. In fact, as Trotsky later recalled, there had been a collective effort by the most moderate and the most radical groups to *not strike*. The leaders feared that the regiments stationed in Petrograd would open fire on the protestors should a mass strike occur. ‘Not a single organisation called for strikes on that day. What is more, even a Bolshevik organisation, and a most militant one — the Vyborg borough committee, all workers — was opposing strikes.’

Soon large crowds flocked the city centre. On February 26, the stationed troops open fired on the protestors under the Tsar’s order. By the same evening, the brutality of the suppression pushed the troops into mutiny and they joined the rioting crowds. To summarise ‘…It was in fact shortage of food in St. Petersburg which finally broke the back of the Russian Empire. The troops refused to fire on the rioting crowd, and Tsardom collapsed,’ Alec Nove.

The February revolution was spontaneous and the revolutionary parties played no direct role in its making or success. If anything, the parties almost didn’t expect it and were to an extent baffled by its emergence and success. In the aftermath of the collapse, the power vacuum was filled by two political structures — the Provisional Government (better known as the *Duma*), and the Petrograd Soviet which was the most powerful workers’ union in the capital.

Although the nature of the February Revolution was decidedly popular, it is often considered a triumph of the bourgeoisie as the main consequence of it was the rise of the urban elite to the seats of the Duma. The Provisional Government was mainly manned by the Liberal Parties (Cadets, as they were known). However, the Duma did not hold absolute power. The Petrograd Soviets were a non-party worker’s organization. The representatives elected by factory workers mostly consisted of Social-Revolutionaries, the Mensheviks and the Bolsheviks. What this meant was that while the Liberals were the de-jure legislators, it was the workers who held the de-facto power.

Growing support of the Petrograd Soviet forced the Provisional Government to recognize its claim of authority. Kerensky of the Social-Revolutionaries was appointed as the Minister of Justice in the government and served as an instrument of communication between the government and the Soviet parties. Lenin saw this attitude of the Soviets as a ‘voluntary surrender of state power to the bourgeoisie and its government.’ At the time though, this was anything but erroneous. In the Marxist trajectory of history, the collapse of monarchy is supposed to be followed by a triumph of capitalism (which will eventually be followed by a triumph of the workers on the wicked capitalists under the Socialist revolution). Therefore, the prevailing mood of the Soviets was not in favour of seizing state power or governmental authority. In fact, most leaders believed that Russia was ripe for a bourgeois and not a Socialist rule. To them, the Bourgeoisie Revolution was not yet over and without its completion a Socialist Revolution should not be launched.

The three major Marxist parties of the Mensheviks, Bolsheviks and Socialist Revolutionaries agreed on this view. At the time, with most of its senior leaders in exile or hiding, the reigns of the Bolsheviks rested in the inexperienced hands of Shylapnikov, Zalusky and Molotov. As E. H. Carr points, ‘The position was embarrassing.’ The Party Journal, *Pravada* was once more resumed with its first issue of March 5, 1917. On the very same day, Molotov attended the Petrograd Committee Session and proposed that the Provisional Government be seen as counter-revolutionary (even in the Bourgeoisie sense) and be over-thrown to bring about a truly democratic revolution. This is one of the few instances in history when a staunchly Communist party has advocated for the good fight of liberty and democracy. However, the Committee was in favour of not opposing the Government so long as it worked for the Proletariat.

For the Bolsheviks, things further entangled as Stalin, Kamenev and Muranov returned from exile on March 13. In the succeeding editions of the *Pravada*, one can see the agreement of the senior leaders with the Petrograd Committee. They were in favour of the Provisional Government — under certain conditions of course. The ‘Bolshevik formula’ (led by Stalin) was to take the lead and rally the Proletariat under the Soviet banner so as to put pressure on the Duma to work for the people and to ultimately move the ‘Russian Revolution’ forward. The ‘Menshevik Formula’ was to direct the Government from behind i.e. to support it by providing a strong opposition in their ‘constitutional partnership’ with the Duma.

Such was the Socialist politics of the day when Lenin returned from exile on April 3 — and he had a lot to say.

Immediately on his return, Lenin published a set of ten directives for his comrades. This was known as the *Aprelskiye Tezis,* or the April theses. Much to everyone’s surprise and contradictory to the prevailing popular opinion of the Socialists, Lenin denounced the Provisional ‘Bourgeois’ Government and spoke of a dictatorship of the Proletariat along with an end to the war. According to Lenin, the Bourgeoisie Revolution (meant to overthrow feudal autocracy) was over as the Provisional ‘Bourgeois’ Government existed in *dual authority with* the Soviets. ‘To this extent,’ he said, ‘the bourgeois democratic revolution is finished,’ because, ‘the revolutionary-democratic dictatorship of the Proletariat and the peasantry has been realised.’ Needless to say, Lenin’s theses was criticised from the outside as well as the inside. Kamenev remained at cross with Lenin over his ideas right up till the coup. The battle between Lenin and his sceptics was long and vile. As Sheila Fitzpatrick points, ‘It remained an open question whether Lenin’s strategy was that of a master politician or simply that of a cranky extremist.’

Lenin was many things — a visionary, an orator, a politician — but he was not one to let up. Soon he was able to convince his comrades of the fault in their stars. At the All-Russian Party Conference or the ‘April Conference’, Lenin’s resolutions to condemn the Provisional Government for continuing to participate in the Imperialist War (the Socialist tag for WW1), and the Duma’s ‘open collaboration’ with, ‘…\[the\] bourgeoisie and land owners’ counter-revolution,’ was passed with little resistance.

‘All power to the Soviets!’ — Lenin declared.

The Bolsheviks began to isolate themselves from the parties, policies and propagandas of their fellow-Soviets. Simultaneously, the popularity of the Bolsheviks was also on the rise. By the end of April the part had 100,000 members and by October a total of 350,000 as compared to the 24,000 members during the February Revolution. However, in the June Conference of the Soviets, when Lenin openly declared the Bolshevik’s ability to take on all responsibilities of the power alone, his declaration was seen more as bravado than a threat. ‘It was a serious challenge, however, because the Bolsheviks were gaining popular support and the coalition socialists losing it,’ says Fitzpatrick.

Early in May, the cabinet of ministers was re-shuffled with a shift in the power balance within the Duma. This time, six soviet ministers received appointments, — two from the Socialist Revolutionaries, two from the Mensheviks, and two independent. Instead of increasing the power and prestige of the Mensheviks and SRs, the result was quite opposite. Both parties saw splits between those who supported the ministers and those who didn’t. The Bolsheviks, for their part, completely rejected the idea of participating in any petty Provisional Government. They offered a non-negotiable policy of ‘peace at any price’ — a peace that the Russian people were desperate for.

Turmoil in the following months only grew worse. In July, despite the persistent demands of peace, the Russian War Office launched an offensive at Galicia against the Austro-Hungarian forces. This provoked a spontaneous uprising in Petrograd for which the Bolsheviks were held responsible as they were the only party openly and staunchly opposing the war. A systematic crackdown was ordered on the party. Leaders were arrested. Zinoviev and Lenin went into hiding and the *Pravada* was banned. In the following days Stalin lead the charge against the ‘counter-revolutionary’ Bourgeoisie Duma.

August witnessed a failed coup led by Commander-in-chief General Larv Kerlinov. This attempt to seize power by the right sent all the left parties in frenzy. With its leadership released and out of hiding, Bolsheviks now experienced the vigorous support of the masses. As Fitzpatrick points ‘The Bolsheviks strength was that they were the only party uncompromised by association with the bourgeoisie and the February regime, and the party most firmly identified with the ideas of workers’ power and armed uprising,’

Another important consequence of the failed coup was the ‘Red Guards’. The Red Guards were militia units formed by the workers. Their parent body, the Petrograd Soviet’s Military Revolutionary Committee, was dominated by Bolsheviks. Fearing the German advance towards Petrograd, the Government chose to take no action against this militia.

Backed by an armed body, Lenin now advocated for the need for armed action to take-over of the Government. In September he wrote a short article titled ‘The Crisis is Ripe’ where he declared a world-wide Proletariat Revolution. ‘We cannot hope for more favourable conditions,’ he wrote, ‘The hour of action is at hand. The crisis is ripe. The whole future of the international workers’ revolution for socialism is at stake. The crisis is ripe.’ In his meetings with party members he also made it clear that he no longer wanted to hide under the Soviet banner and that the insurrection must be the Bolshevik’s work. Lenin over-rode all objections from leading party members (mainly Kamenev and Zinoviev). It was time for the Bolsheviks to take power.

The uprising was launched on 27 October (7 November Georgian calendar) and went on for two days. Backed by the Red Guards, the Bolsheviks seized several vantage points. The two stationed regiments in Petrograd declared their loyalty to the Revolution, as did the sailors docked in Petrograd’s harbour. The delay in entering the palace was because the rebelling forces did not have enough artillery. But they faced no resistance.

Louise Bryant, an American journalist, was present for the whole course of the events. She was attending a meeting of the Council of the Republic at the Mariinsky Palace on the day of the coup. The Council had been set up to diffuse the growing tensions in the masses. As she recalls, ‘Word flew round that they were arresting the Council of the Republic. As a matter of fact no one thought the Council of the Republic was important enough to arrest. What really happened was tragically funny. A big Cronstadt sailor marched into the great elaborate red and gold assembly chamber and announced in a loud voice “No more Council! Go along home!” And the Council went.’

Following the sacking of the Council, Bryant followed the pulse to the Winter Palace to learn about the fate of Kerensky, head of the Provisional Government and a man she respected. Bryant and her fellow journalists were allowed entry into the Palace while the ‘battle’ was on-going. ‘…we went directly to Kerensky’s office. In the ante-room we found one of his smart-looking aides who greeted us \[…\] he told us, \[…\] Kerensky had also fled after an embarrassing experience which might have caused his capture. At the last moment he found that he did not have enough gasoline for his automobile, and couriers had to be sent into the Bolshevik lines….,’

The Duma was disbanded, the Ministers arrested, and orders were passed to maintain peace. It seems Russia had seen enough violence for the past four years. And so the Revolution was over.

The ultimate Bolshevik triumph can be credited to several factors. The duality of policies between the left parties, the lack of adequate steps by the Provisional Government to end the war, the Kornilov insurrection, the splits in the SRS and Mensheviks, peasant land hunger, shortage of basic necessities like food. All major parties could be associated and blamed for several of these factors except the Bolsheviks. These are some of the external reasons.

However the main reason for Bolshevik victory, as most scholars agree, was their non-negotiable policies in favour of the people. To the defeated soldiers, they promised peace, to the poor peasants they promised land, and to the workers they promised bread. Furthermore, their appeal went beyond the class boundaries and beyond the power centres of Petrograd and Moscow. They appealed to the Nationalist aspirations of the Jews, the Poles, Finns, Balts, Georgians and several other minorities. To them they promised their right to secede. As Alan Wood points out, ‘The Bolsheviks were simply much more in tune with popular feeling than either the constitutionally-minded liberal politicians or the moderate socialists.’

This argument can be concluded in Christopher Hill’s words, ‘In Russia in 1917 it was the Bolshevik mastery of the *fact* that was decisive. The party knew exactly what it wanted, what concrete concessions to make to different social groups at any given stage, how to convince the masses of the population by actions, its own and their own \[…\] It was this which won the confidence of a following sufficient to enable the Bolsheviks to seize and retain power.’

On October 26, in the Decree of Peace, Lenin proclaimed, ‘we have overthrown the government of the banker.’ It wasn’t the end though. The battle had only just begun.

**REFERENCES**

1.  1.  Fitzpatrick, Sheila (1982), *The Russian Revolution,* Oxford, Oxford University Press
        

1.  1.  Carr, E.H. (1985), *The Bolshevik Revolution, 1917–1923, Vol. 1 (History of Soviet Russia)*, W. W. Norton & Company
        

1.  1.  Nove, Alec (1969), An *Economic History of the U.S.S.R.* Penguin Books
        

1.  1.  Hill, Christopher (1947), *Lenin and the Russian Revolution*, Penguin Books
        

1.  1.  Ferro, Marc (1972), *The Russian Revolution of February 1917* trans J. R. Richards, London, Routledge and Kegan Paul
        

1.  1.  Wood, Alan (2003) *The Origins of the Russian Revolution (1816–1917) Third Edition,* Routledge
        

1.  1.  Schapiro, Leonard (1984), *The Russian Revolution and the Origin of Present Day Communism*, Hounslow, Basic Books
        

1.  1.  Moss, Walter G. (1997), *A History of Russia Vol 2*, New York, McGraw Hill
        

1.  1.  Keep, John L. H. (1976), *The Russian Revolution,* New York, W. W. Norton &Company
        

1.  1.  Trotsky, L.(1932), *The History of the Russian Revolution Volume 1*
        

1.  Bryant, L. (1918) *Six Red Months in Russia*
    

* * *

**About Rishika Yadav**

Rishika is a jack of all trades and a Master in history. She has completed her post-graduation in International History from the London School of Economics and Political Science (LSE). An avid writer by passion, she enjoys composing poetry and has self-published novels.

## India and Myanmar: Caught Between the Devil and the Deep Blue Sea

Original: https://www.spontaneousorder.in/p/india-and-myanmar-caught-between-the-devil-and-the-deep-blue-sea

Author: Spontaneous Order

Published: 2018-07-17T08:10:42.000Z

Topics: refugee-policy, rule-of-law, india-myanmar-relations, national-security

> The recent back and forth between the Centre and the Supreme Court regarding the former’s decision to deport the Rohingya immigrants due to security risks has gained momentum- shedding light on the institutional lack of accountability the Centre and its

**Summary:**

The post critiques the Indian Centre's arbitrary power to deport Rohingya immigrants amid Supreme Court challenges, highlighting the absence of a domestic refugee law and India's non-signatory status to the UN Refugee Convention and Protocol, which exempts it from non-refoulement obligations. This vacuum allows executive discretion without checks, varying by ruling party and risking ideological bias, especially when refugee beliefs differ from the host electorate. From a classical-liberal viewpoint, codifying a refugee law is essential to impose standardized, neutral protocols, fostering accountability, protecting rights, and insulating decisions from transient politics. However, the author urges balancing this rule-of-law liberalism with realpolitik realism: granting asylum to Rohingya would implicitly criticize Myanmar's Aung San Suu Kyi, undermining her legitimacy, destabilizing Myanmar's democracy, and harming India's 'Look East Policy' investments and security along the 1,600 km shared border, potentially polarizing the region toward China with severe economic and human costs. India thus navigates a dilemma between humanitarian virtues and Hobbesian state obligations.

**Key points:**

- India's lack of refugee law grants the Centre unchecked, arbitrary power over asylum decisions without judicial or legislative checks.
- A codified refugee law would enforce neutral protocols, enhance accountability, and prevent ideological biases in processing claims.
- Granting Rohingya asylum risks geopolitical fallout by weakening Myanmar's democracy and India's strategic interests, including the Look East Policy and border security.
- Balancing rule-of-law liberalism with realpolitik flexibility is crucial for handling contextual crises like the Rohingya influx.

**By Akshita Mathur**

* * *

The recent back and forth between the Centre and the Supreme Court regarding the former’s decision to deport the Rohingya immigrants due to security risks has gained momentum- shedding light on the institutional lack of accountability the Centre and its decisions have in this matter. Although the constitutional framework remains intact in giving the Centre the power to do as it deems fit, the transpiring of these events questions whether such an extreme tradeoff between issues of national interests and humanitarian obligations is befitting of the largest democracy in the world.

The petitioners have countered the Centre’s circular directing States to deport the Rohingya “illegal migrants”, invoking the concept of non- refoulement wherein a host country is not allowed to send a refugee back to their home country if they face the risk of persecution on discriminatory grounds. However, the problem with such an appeal persists in the simple fact that India is neither a signatory to the UN Convention Relating to the Status of Refugees nor to the Protocol, and has hence not subscribed to the internationally prescribed legally binding definition of “refugees”. As a consequence, India is under no obligation to recognise the concept of “non- refoulement” or look at these “illegal migrants” as refugees fleeing due to fear of loss of life. The problem gets exacerbated by the fact that India does not have any domestic Refugee Law governing the processing/ recognition of refugees. The onus of drafting any law pertaining to this subject falls exclusively with the Parliament, however, it has not yet agreed upon any of the asylum drafts that have been tabled.

It is also this lack of a Refugee Law (or adherence to the UN convention on the same) that translates into a non-uniform and arbitrary manner of acknowledging and processing these persons, thus handing over complete autonomy of granting asylum to seekers solely to the Centre (which would vary with the changing heads of state) with no concept of checks and balances in place.

Such a refugee law would not only protect the rights of such a community within the host country but also ensure a standard protocol to be followed by the Centre whenever faced with an influx such as the most recent one of the Rohingya refugees (who have not been granted asylum by India), without falling prey to the ideological inclinations of the presiding party. This would become especially crucial if the beliefs of the refugee population vary significantly from the electorate of the host country. Therefore, codifying a set legal process for the elected government to follow not only helps in inculcating accountability but also helps ensure the process is appropriately neutralised.

That said, taking a cue from the forever changing international political climate, it is best to assume the role of an adaptable green reed rather than the stubborn silver oak.

[

![](https://substackcdn.com/image/fetch/$s_!jCrw!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F1443ea52-9bdb-4d51-8099-6544dcea4e52_300x134.jpeg)



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Image Source: https://scroll.in/latest/819438/

Although a codified legal process helps in setting a framework to ensure that Nations act in a manner that is both accountable to the domestic community and appropriate in terms of upholding the virtues of Humanity, it would be apt to nudge the mind into acknowledging the fact that there needs to be an optimum balance between liberalism and realism (or at least an attempt to reach the same).

Granted that rules lay down processes that help systems function and uphold certain values without having to continuously rely on the individuals that constitute it; simultaneously though, it is equally essential that a degree of malleability is allowed, taking into consideration the contextual nuances of the situation at hand. This holds particularly true for the Rohingya crisis, wherein decision making has to balance between legal obligations of a democratic nation- state to attend to humanitarian emergencies on one hand and geopolitical consequences on the other.

To grant the refugees asylum would mean an implicit agreement to the assertion that the stateless community is being persecuted by the Myanmarese State or at best, that its de facto Head of State (Aung San Suu Kyi) is unable to contain the military junta’s persecution of Rohingya Muslims. Both of these would seriously undermine the Myanmarese democracy as well as the formally instituted Head’s control over her political instruments- a proposition that goes against what India has spent its diplomatic prowess nurturing through the subtle and relatively recent backing of Suu Kyi.

This, further robbing Suu Kyi of the little legitimacy she has left, would destroy even the semblance of democracy in Myanmar- further sending the country spiralling into the same abyss it spent years trying to crawl out of. For India, this would have both- significant economic repercussions (as India has invested heavily into Myanmar, making it the focal point of its “Look East Policy”) as well as political ramifications (in terms of polarisation towards China), rendering the already delicate 1,600 km stretch shared between Myanmar and India even more vulnerable to belligerent elements- thus potentially incurring an unimaginable human cost.

Caught between a righteous democratic rule of law and the realistic (sometimes unethical) Hobbesian obligations of a State grounded in realpolitik, India is faced with a rather peculiar predicament that is dominated by an utterly conflicting mix of factors- to the point that this theatre of politics would have been amusing to see unfold if it wasn’t for the colossal human collateral that has had the misfortune of being caught in the balance.

* * *

**About Akshita Mathur**

Akshita Mathur has completed her undergraduate degree in Economics from Symbiosis School of Economics, Pune, and is currently working at Centre for Civil Society. A writer by passion, she aspires to make a career in Investigative Journalism. Her interests lie in International Relations and Politics. Outside the workplace, she indulges herself in lots of hot cups of chai and good food.

## The Fault in our Firecracker Bans: Examining the Court Order through a Classical Liberal perspective

Original: https://www.spontaneousorder.in/p/the-fault-in-our-firecracker-bans-examining-the-court-order-through-a-classical-liberal-perspective

Author: Spontaneous Order

Published: 2018-07-17T07:52:01.000Z

Topics: firecracker-ban, air-pollution, classical-liberalism, judicial-overreach

> As we welcome Diwali today, several people in Delhi and NCR are not in the usual festive mood. That is because of the recent Supreme Court order banning the sale of firecrackers in Delhi and NCR till November 1, 2017. As a result, there will be no firec..

**Summary:**

From a classical liberal perspective grounded in John Stuart Mill’s harm principle, the Supreme Court’s temporary ban on firecracker sales in Delhi-NCR until November 1, 2017, is justified despite infringing on individual liberties to buy, sell, and use firecrackers during Diwali, as it tests their impact on air pollution to protect a significant number of people from harm. Delhi’s severe pollution, exemplified by the 'Great Smog' post-Diwali 2016 with hazardous particulate matter spikes, necessitates this one-time experiment comparing pollution levels to prior years, enabling informed future regulations. A liberal case requires protecting many, minimizing collateral damage, and lacking better alternatives—here met by providing definitive data amid inconclusive correlations. However, the Court’s flip-flopping (full ban November 2016, 50% licenses September 2017, re-ban October 2017), disregard for firecracker sellers’ losses leading to black-market sales, failure to note declining firecracker production amid rising pollution, and leniency toward CPCB’s non-compliance with prior reporting orders undermine the process. This test resolves annual debates and litigation, benefiting all affected by polluted air.

**Key points:**

- Supreme Court’s temporary firecracker ban till November 1, 2017, justified under harm principle to empirically test Diwali firecrackers’ pollution impact.
- Delhi’s post-Diwali 2016 smog with extreme particulate spikes correlates with firecrackers, demanding a firecracker-free Diwali for comparison.
- Court’s inconsistent orders—full ban 2016, partial lift 2017, re-ban—ignore sellers’ economic harm and CPCB’s reporting failures.
- Declining firecracker sales despite rising pollution highlights need for data over assumptions.

**By Vineet Bhalla**

* * *

As we welcome Diwali today, several people in Delhi and NCR are not in the usual festive mood. That is because of the recent Supreme Court order banning the sale of firecrackers in Delhi and NCR till November 1, 2017. As a result, there will be no firecrackers sold on the eve of Diwali. This has expectedly led to some consternation among Delhiites, since they consider the setting off of firecrackers as an essential part of the Diwali experience. The order has even been derided as being anti-Hindu from some quarters.

Before making any comments or forming an opinion on the efficacy of the judgment, it is useful to first be informed about the context as well as content of the judgment itself. The judgment is in response to a petition filed in 2015 “seeking wide ranging reliefs against the use of fireworks (including fire crackers), prevention of harmful crop burning, dumping of malba and other further steps towards environmental purity.” In response to this petition, the Supreme Court had, through an order dated November 11, 2016, issued interim directions to the Central Government to suspend all licenses for sale of fireworks within NCR, effectively banning the sale of firecrackers within NCR, till further orders from the Court. The Central Pollution Control Board (CPCB) was also directed by the apex court to, within three months, study and prepare a report on the harmful effects of the materials used in the manufacture of fireworks.

However, the CPCB failed to prepare the report under the pretext that firecrackers do not come within its jurisdiction. In its order dated September 12, 2017 in the matter, the apex court held that a continuing the complete ban was too radical a step, and instead opted for a ‘graded and balanced approach’ as per which the ban was lifted, and the Delhi Police was only directed to reduce the grant of temporary licenses for the sale of firecrackers within NCR to 50% of the licenses granted in 2016. Via this order, the Court also directed studies into appropriate standards for ambient air quality in relation to the bursting of fireworks and the release of their constituents in the air, and into the impact of bursting fireworks during Dussehra and Diwali on the health of the people (to be completed by December 31, 2017).

The Supreme Court again flip-flopped on its order merely four weeks later. In an order dated October 9, 2017, it re-imposed the blanket ban on sale of fireworks within Delhi and NCR, and also directed that its directions from its September 12 order will be effective only from November 1, 2017. The rationale behind this temporary ban on sale during the Diwali season was to test for at least one Diwali the impact of no sale of firecrackers during Diwali on the level of air pollution in Delhi.

The question we shall attempt to answer is: from a classical liberal perspective, is the ban justified?

Classic liberalism, of course, places great value on the sanctity of individual liberty over. According to liberals, any fetters on individual liberties are justified only if these liberties could be used to harm others in some way. This is based on John Stuart Mill’s ‘harm principle’, as per which “\[t\]he only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others”.

A liberal justification for the ban must, therefore, demonstrate three things: that a significant number of people are protected by the ban; that the collateral damage from the ban is much less than the benefits from it; and that a ban the only instrument through which these benefits can be achieved.

Before going into an analysis of these questions, it is important to reiterate that that the purpose of the ban is not to put a permanent moratorium on the burning of firecrackers in Delhi and NCR, but to test the impact of firecrackers on air pollution levels during Diwali season, in order to make an informed decision about the regulation of the use and sale of firecrackers during Diwali in the years to come.

Now, it is common knowledge that Delhi is one of the most polluted cities in the world, and has dangerously high levels of toxic pollutants in its air. On top of that, anyone who was in Delhi during and immediately after the Diwali period last year will remember what came to be known as the Great Smog of Delhi. In the first 10 days of November 2016, which coincidentally was right after the Diwali celebration on October 30, Delhi resembled a gas chamber, as visibility was reduced to a couple of hundred metres, and it was difficult to walk outside without coughing or having one’s eyes watering. The situation was so bad that the Delhi government had to undertake a slew of emergency measures, including shutting down schools and stopping construction work for a few days. There are a host of studies which have shown that the concentration of harmful particulate matter in the Delhi air shot up during the first few days of November 2016, right after Diwali, as well as the hazardous levels of particulate matter emitted by different common types of firecrackers burnt during Diwali. The correlation between the two is fairly simple to make out. However, for the sake of convincing the sceptics and the deniers, the ones who still are not convinced about the Diwali firecrackers being the root of the surge in air pollution levels, there is no other comprehendible way out except to test out a Diwali without firecrackers.

Hence, prohibiting the sale of firecrackers within Delhi and NCR during Diwali does violate the liberty of individuals to buy and sell, and consequently use firecrackers during Diwali. However, a study of the air pollution levels after a theoretically firecracker-bereft Diwali, and its comparative analysis with analogous data from previous years will answer the question of the impact of Diwali firecrackers on the air pollution level in Delhi once and for all. It will also save both those for and against a permanent ban on firecrackers the effort to articulate themselves around the Diwali season each year, along with the trouble of championing their stance in prolonged litigation. Hazardously polluted air, after all, is something that doesn’t discriminate, and adversely affects everyone: those who advocate for the ban as well as those who argue against it.

Even so, a proviso needs to be added: the way the Supreme Court has gone about imposing the ban leaves a lot to be desired. For one, imposing the ban to removing it to reinstalling it again, all in the span of twelve months, is not the kind of fickle-mindedness one would expect from the highest court of the land. Secondly, the judgment does completely ignore the very legitimate grievances of firecracker sellers who had stocked themselves with supplies in anticipation of Diwali only to be given the rude shock of the ban a mere 10 days before Diwali. By account of anecdotal evidence, most of these sellers are selling away their stocks in the black market, thereby undermining the intent of the ban altogether. Thirdly, it is strange that the Court didn’t consider, in the course of its decision, the fact that while air pollution levels around Diwali have been increasing over the last few years, there has been a parallel decrease in the manufacture and sale of firecrackers (although, to be fair to the apex court, we are not sure whether this fact was presented to the court in the course of the pleadings in the case). Finally, it is also curious that the Court didn’t pull up or penalize the CPCB for blatantly disregarding its order from November 2016 about preparing a report on the adverse effects of materials used to make firecrackers, and has, moreover, again entrusted the CPCB to chair another study which is to be finished by the end of this year.

The author would like to acknowledge Satya S. Sahu for his research assistance with the subject matter. Satya is a final year undergraduate student of law at the National Law School of India University, Bengaluru. He is currently interning with the Research Department at CCS.

* * *

**About Vineet Bhalla**

Vineet Bhalla holds a B.A., LL.B. (Hons.) degree from the W.B. National University of Juridical Sciences, Kolkata. He has been a Fellow with Make A Difference from 2012–15, and was one of the inaugural Pratiti Fellows with People for Parity in 2015. His previous work experience includes a 13 month stint with IDIA (Increasing Diversity by Increasing Access to Legal Education) as Assistant Director, and a one year stint as an inaugural Chief Minister’s Good Governance Associate in Haryana. At CCS, Vineet handles legal research and advocacy work.

## The Economics of Scarcity

Original: https://www.spontaneousorder.in/p/the-economics-of-scarcity

Author: Spontaneous Order

Published: 2018-07-16T13:04:39.000Z

Topics: scarcity, behavioral-economics, infrastructure, market-liberalization

> Recently 23 people were killed when they got crushed in a stampede on a railway bridge in Mumbai. Students sweat for months in tuition classes to prepare for entrance examinations for engineering courses. We used to pay a small fortune in the 80s to get..

**Summary:**

Luis Miranda argues that India's persistent scarcity, artificially created by government controls on supply, distorts behavior and leads to tragedies like the Mumbai railway bridge stampede killing 23 people, students cramming for engineering exams, and commuters risking lives by rushing into overcrowded trains. Drawing from behavioral economists Sendhil Mullainathan and Eldar Shafir's book 'Scarcity,' he explains how scarcity—financial, time, or space-related—impairs cognition, as evidenced by Indian sugarcane farmers making poorer decisions pre-harvest when strapped for cash compared to post-harvest. This scarcity mindset persists due to bureaucrats stuck in supply-control habits, resulting in inadequate infrastructure like few station access points and curbs on teacher training colleges in Maharashtra. Miranda highlights classical-liberal successes: scrapping Indian Airlines' monopoly boosted aviation, while ending MTNL, BSNL, and VSNL monopolies slashed telecom tariffs and eased access. He advocates building over-capacity in trains (longer, more frequent services), metros, and alternatives to reduce scarcity's cognitive toll, noting initial excesses (like over-drinking on flights post-liberalization) normalize over time. Ultimately, increasing supply via reduced controls will curb risky behaviors and improve lives.

**Key points:**

- Government controls create artificial scarcity, causing distorted behaviors like deadly stampedes and risky train rushes.
- Scarcity impairs decision-making, as shown by sugarcane farmers' better choices post-harvest versus pre-harvest lean times.
- Liberalizing aviation and telecom monopolies increased supply, cut tariffs, and alleviated scarcity.
- Expand train capacity with longer, more frequent services and add metro options to reduce commuting risks.

**By Luis Miranda**

* * *

Recently 23 people were killed when they got crushed in a stampede on a railway bridge in Mumbai. Students sweat for months in tuition classes to prepare for entrance examinations for engineering courses. We used to pay a small fortune in the 80s to get an allocation for Bajaj scooter or a gas connection or a telephone line. What do all of these have in common?

Scarcity. By controlling the supply of a resource or a product, the demand for it spirals (because of hoarding also), resulting in distorted behaviour patterns. We have become accustomed to living in a resource starved country and that has resulted in people leaping into trains to get a seat when the train approaches Churchgate station during the evening rush hour or rushing to get into a train even when the path in front of them is packed and it is raining. Our bureaucrats and politicians are still stuck in this mindset of controlling supply, which results in artificial shortages or inadequate infrastructure. We, therefore, have inadequate access points at stations and curbs on setting up teacher training colleges in Maharashtra.

Given that Chicago Booth’s Richard Thaler just won a Nobel Prize in Economics, I flipped through his book ‘Misbehaving’ to see what behavioural economists had to say about such behaviour, and I came across a book titled ‘Scarcity’ written by Sendhil Mullainathan (of Harvard) and Eldar Shafir (of Princeton). They looked at the psychology of scarcity, mainly related to economic poverty, and conclude that scarcity impacts behaviour. For example, they looked at sugar cane farmers in India and studied that these farmers made better decisions after the harvest (when they had been paid) than when compared to decisions made in the pre-harvest period when they are financially more strapped. The poor have higher opportunity costs and therefore are always looking at trade-offs. These trade-offs do not only apply to financial scarcity; they apply to all forms of scarcity, including time scarcity. For example, “If I do this now, what do I not do today?” Basic activities can turn into luxuries when we do not have time. As Shafir says,” What’s most striking is that these findings make a very strong case for the idea that people who look very bad in conditions of scarcity, are just as capable as the rest of us when scarcity does not impose itself on their minds.”

Which gets us back to why people rush into trains — they work long hours and have a long commute in a cramped train compartment. Hence, they will try to maximize scarce time and scarce space and rush into the train even before it reaches the station. If we had longer, more frequent trains the need to rush into them will go down. But we are not used to building over-capacity and invariably run out of capacity even before the service has started. Planners have failed to recognize the impact of scarcity on people’s lives. Of course, when supply is initially increased there will be excesses. Like when drinks were allowed on domestic flights; people initially drank too much because they were used to being in a scarce economy and over time the excess drinking eased off (there will be exceptions, of course!)

Look at the impact on the aviation industry when the monopoly of Indian Airlines was scrapped. Or at the impact on the communication industry when the monopolies of MTNL, BSNL and VSNL were scrapped. The increased supply of communication devices reduced tariffs and made communication so much easier for all of us.

So, one way to stop people risking their lives every day when commuting is to reduce scarcity by increasing the capacity of our train system and creating alternative travel options (like the metro). We have a lot to learn from how scarcity distorts the way people behave and how deprivation wreaks havoc on cognition and decision making.

* * *

**About Luis Miranda**

Luis Miranda connects dots. He started investing in India’s infrastructure a long, long time ago. He started IDFC Private Equity and was earlier a part of the start-up team of HDFC Bank. Luis has invested in and has been on the boards of companies like GMR Infrastructure, L&T Infrastructure, Delhi International Airport, Gujarat Pipavav Port, Gujarat State Petronet, and Manipal Global Education. Luis today spends most of his time, together with his wife, on non-profits. He is Chairman of CORO and Centre for Civil Society and Managing Trustee for Nadathur Trust. Other organisations include 17000 Ft Foundation, SNEHA, Muktangan, Sunbird Trust and Samhita Social Ventures. Luis graduated with an MBA from Chicago Booth and is a Chartered Accountant.

## Economics Through a Song of Ice and Fire: Chaos is a Ladder

Original: https://www.spontaneousorder.in/p/economics-through-a-song-of-ice-and-fire-chaos-is-a-ladder

Author: Spontaneous Order

Published: 2018-07-16T11:12:26.000Z

Topics: spontaneous-order, entrepreneurship, indian-startups, economic-deregulation

> Lord Baelish aka Littlefinger said this famous line in Season 3 of Game of Thrones (GoT), a popular fantasy TV series. GoT fans are well aware of the cunning and shrewd intelligence of Littlefinger, but if we were to dissect this statement further and a..

**Summary:**

Drawing from Game of Thrones' 'Chaos is a ladder,' the post argues that economic chaos from high demand and inadequate supply creates opportunities for ambitious entrepreneurs to innovate and establish spontaneous order, superior to any centrally designed system due to the impossibility of capturing all relevant information. Entrepreneurs thrive by filling market gaps with unforeseen products like computers, mobile phones, food delivery apps, and taxi aggregators, emerging in places like Silicon Valley or Bangalore under conducive conditions with strong rule of law. India's startup boom exemplifies this: projected 11,500 tech firms by 2020 (up from 3,100 in 2014), 9% women entrepreneurs, average age 28, and SMEs creating 60% of jobs. However, excessive regulations, high taxes (annual payments three times more frequent than in China or USA), and dismal global market rankings stifle this potential despite initiatives like Startup India. The classical-liberal conclusion urges authorities to relax regulations, lower taxes, and trust citizens to climb the chaotic ladder, fostering innovation, job creation, poverty reduction, and elevated living standards through trial-and-error entrepreneurship.

**Key points:**

- Economic chaos from unmet demand serves as a ladder for entrepreneurs to innovate and create spontaneous order superior to planned economies.
- India's startup ecosystem grew from 3,100 firms in 2014 to a projected 11,500 by 2020, with SMEs driving 60% of job creation and featuring 9% women founders averaging age 28.
- Excessive regulations and taxes, including annual payments three times more frequent than in China or USA, hinder India's business environment and global rankings.
- Governments should deregulate, reduce taxes, and provide a conducive environment to enable entrepreneurs to experiment, fail, and succeed in raising societal living standards.

**By Sadaf Hussain**

* * *

Lord Baelish aka Littlefinger said this famous line in Season 3 of Game of Thrones (GoT), a popular fantasy TV series. GoT fans are well aware of the cunning and shrewd intelligence of Littlefinger, but if we were to dissect this statement further and analyse it, we would realise that it also provides some insight into economic theory. Let’s forget Littlefinger-the-character, and focus on this line.

High demand for various needs faced with an inadequate supply of solutions creates chaos in the economy. However, this chaos is short-lived, because it then creates an opportunity (or, ladder) for entrepreneurs to climb and fill this lacuna in the market. Chaos is, of course, a pit for those who lack initiative, those who doesn’t want to take any risk, but chaos is a ladder of benefit to those who are ambitious, determined and opportunistic.

Chaos quite often creates spontaneous order in a society, given the right incentives and a strong rule of law. For individuals who like solving puzzles, this spontaneous order is superior to any order a human mind can design, since for designed order, the specific information required is simply too huge.

Entrepreneurs, by definition, thrive on chaos and try to bring some order. They explore the demands of different products, and fill the gaps by introducing products which common people perhaps have never imagined. The introduction of computers, mobile phones, emails, food delivery applications, taxi aggregator applications… the list is endless…all relied on the opportunistic behaviour of an entrepreneur climbing the ladder out of chaos (like Petyr Baelish). These products are not the result of planned order or the settled economy, but chaos.

These original ideas emerge in unanticipated ways and in unexpected places. The emergence of Silicon Valley or Bangalore as IT hub, for example, happened spontaneously. The unique ideas came from the entrepreneurs which were allowed to manifest in a relatively simpler and conducive environment, provided by the authorities, for these idea to manifest

In recent years, India has seen a start-up boom. The sheer number of start- ups, itself, speaks volumes — it is projected that by 2020 there will be 11,500 tech firms (as compared to 3,100 startups counted in 2014). This is big news for the emerging Indian economy and this will change the way the world looks at us. The emergence could be due to any factor, such as availability and interest of spending in India, evolving technology, creation of bottom-up demand, increased purchasing power, or because of schemes like Start Up India.

The impact of start-ups is not just on the economy but also on social and demographic factors — such as the inclusion of 9% of women entrepreneurs. It is also reported that average age of the entrepreneurs is 28 and approximately 60% of job creation has been by SMEs only.

The problem with doing business in India is very simple — too many regulations coupled with high taxes. Despite noble intent, India’s ranking on several market indicators, has been dismal at best, with no change over the past 2 years.

[

![](https://substackcdn.com/image/fetch/$s_!SSl9!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F1f29b73a-7cee-49b7-b9e3-423ebab63399_300x200.jpeg)



](https://substackcdn.com/image/fetch/$s_!SSl9!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F1f29b73a-7cee-49b7-b9e3-423ebab63399_300x200.jpeg)

  
Image Source: http://www.livemint.com/Industry/

Other than this, Indian businesses are also obliged to make annual tax payments that are approximately three times higher than the frequency in China and USA. It doesn’t matter how much Prime Minister Modi says “I see start-ups, technology and innovation as exciting and effective instruments for India’s transformation, and for creating jobs for our youth”. If we really want to help reduce poverty and create more jobs and be the number one in the world, then authorities need to relax a lot of regulations and trust the citizens more.

We need to follow Littlefinger’s suggestion and work towards allowing people the environment to come up with ideas, to try and climb the chaotic ladder, to let them fall and climb up again, and in this process find the best solution to earn profit and help society raise their living standards. Because, “..the ladder is real. The climb is all there is”.

* * *

**About Sadaf Hussain**

Sadaf Hussain writes everything between politics, economics to food and culture. He is the author of Daastan-E-Dastarkhan and a TEDx Speaker.

## Economics Through a Song of Ice and Fire: Tyrion’s Specialisation

Original: https://www.spontaneousorder.in/p/economics-through-a-song-of-ice-and-fire-tyrions-specialisation

Author: Spontaneous Order

Published: 2018-07-12T13:07:09.000Z

Topics: specialization, division-of-labour, comparative-advantage, free-markets

> Game of Thrones (GoT) is not just a fascinating fantasy fiction about the iron throne and the politics around it, but it is also a great insight into different theories of human nature, social psychology, international relations, diplomacy as well as th..

**Summary:**

The post uses Tyrion Lannister from Game of Thrones as an exemplar of economic specialization, leveraging his intellect in strategy and knowledge—'I drink and I know things'—as a comparative advantage in a world unsuited to his physical limitations, earning him influence across factions. This mirrors Adam Smith's 1776 analysis in 'Wealth of Nations,' where specialization and division of labor in a pin factory enable 10 workers to produce 48,000 pins daily versus just 20 if each does every task, boosting productivity through skill, machinery, and time savings. Specialization drives market expansion via exports, signaling demand for inputs like steel and fostering further division of labor. Real-world examples include Dr. A. G. K. Gokhale's pioneering heart and lung transplants in Andhra Pradesh, attracting global patients, and India's regional comparative advantages: Punjab and Madhya Pradesh specializing in grains due to climate, while Bangalore, Gurgaon, Noida, and Mumbai focus on industry and trade. Free and open markets enable this merit-based cooperation, transcending biases like Tyrion's family ties, creating wealth, peace, prosperity, and multicultural harmony superior to government programs—the morality of the market from a classical-liberal viewpoint.

**Key points:**

- Tyrion Lannister thrives by specializing in strategy and knowledge, turning personal limitations into comparative advantage and gaining trust across rival factions.
- Adam Smith's pin factory illustrates division of labor: 10 specialized workers produce 48,000 pins daily versus 20 if unspecialized.
- Specialization expands markets through exports, signals input demands, and spurs further economic specialization.
- Free markets enable merit-based regional specialization in India, like Punjab's grains and cities' industries, fostering national prosperity over government interventions.

**By Sadaf Hussain**

* * *

Game of Thrones (GoT) is not just a fascinating fantasy fiction about the iron throne and the politics around it, but it is also a great insight into different theories of human nature, social psychology, international relations, diplomacy as well as the various theories and concepts of economics.

Every episode and every character tells us something about the real world, and there is a lesson to be learned from the wise words of all the characters. One such character, not to mention the most beloved ones, is Tyrion Lannister. I doubt there is any GoT fan who doesn’t like the sharp-tongued dwarf. He is man of substance, honour, and morality, and most importantly, understands the concept of specialisation.

Tyrion is not built for battle. He’s neither nimble with his feet nor quick with a sword. But what he is good at, and I quote, “That’s what I do: I drink and I know things”.

He specialises in strategy and warfare. He reads, learns new things, is well-versed in the history of different dynasties and rulers, as well as the past and the present of rulers (and of course, an expert at how to charm the ladies).

Of course, he wasn’t born with all these capacities and capabilities. He trained himself to be this person. He knew that being a dwarf has no real meaning in this barbaric world, and so he must find a skill that qualifies as his comparative advantage, that sets him apart and makes him useful. He has freed himself from so many difficult situations, from almost being killed, to becoming the King’s (and now the Queen’s) hand. His intelligence also earned him the friendship and trust of people in not just his own country but in the farthest north, and the land of the free folk, as well. In this regard we can say that his greatest wealth is his mind and not the gold or the army.

The Extent of Specialisation and Division of Labour

The father of Economics, Adam Smith realises the value of specialisation and explains the same in 1776 book “An Inquiry into the Nature and Causes of the Wealth of Nations”.

Smith begins by noting: “The greatest improvement in the productive powers of labour . . . seem\[s\] to be the effects of the division of labour.” He discusses the importance and value of specialisation, and/or the division of labour, by considering the advantage of having each worker in a pin factory concentrate on a particular step in production rather than producing a pin from beginning to end. Through specialisation, workers can become more skillful, use machinery that increases their productive powers, and avoid any loss of time.

According to Smith, ten pin-makers, by specialising in different tasks, can produce about forty eight thousand pins a day. Whereas if each one tries to perform every task in pin production, they could produce maybe twenty pins a day. The productivity gained and value generated by division of labour is immense.

Market Expansion

Once labour starts to specialise in a particular skill, the industry then expand their market. If we continue with the same pin example we will realise that now the industry as a whole can produce forty eight thousand pins a day, which basically means there’s lot more for people to consume in one geographic area. What happens when people in that area no longer need pins (or in other words, if the market is saturated)? They will start exporting pins. What would that do in return? It will build the brands of pin industry and increase the market valuation. Also, this provides signals to the market about the increase in demand of steel, and other related products, and in return market will react with the necessary steps by providing more and more goods and services, and further more specialisation of other industries.

The Power of Specialisation

The theory of comparative advantage states that people/industry should focus on what is unique to them respectively or if they could provide the solution to problems that the economy is facing and hence they must specialise in producing those goods and ensuring that they have a lower opportunity cost.

Let’s take an example of doctors to understand the degree of specialisation. Dr. A. G. K. Gokhale is an Indian Cardiac Surgeon at Yashoda Hospitals, Secunderabad. He is known for being the first to perform a successful human-to-human heart transplant and first successful lung transplant in the state of Andhra Pradesh. There are always patients waiting for him, to the extent, that he also has patients from around the world. This, of course, was made possible because he specialised in Heart Surgery which, in turn, made him the most valued in the health sector.

It is because of the same specialisation and comparative advantage that Punjab and Madhya Pradesh supply grains and food items to the entire nation, also export across borders. They realised that their climatic condition is better than any other states and hence, why not focus on farming instead of something else. On the other hand Bangalore, Gurgaon, Noida or Mumbai aren’t suitable for farming and hence they specialise in industries and trading.

But of course, all this is possible with free and open markets which also helps in better network and connectivity between two states/countries. Tyrion understands this. He’s been able to build peace with Lannisters, Starks, Tyrells and Targaryens — by offering them his services. His family history and background become irrelevant because the service he provides in terms of his wisdom and strategising is far greater than the opportunity cost of discriminating against him for having the Lannister’s trademark golden hair.

A free and fair market brings about a merit-based system which creates more multicultural and global harmony than any government program or ministry. It is the cooperation and specialisation that enables the creation of wealth, the creation of peace and prosperity and this is the morality of market.

* * *

**About Sadaf Hussain**

Sadaf Hussain writes everything between politics, economics to food and culture. He is the author of Daastan-E-Dastarkhan and a TEDx Speaker.

## School fee regulation in india

Original: https://www.spontaneousorder.in/p/school-fee-regulation-in-india

Author: Spontaneous Order

Published: 2018-04-27T10:09:30.000Z

Topics: school-fee-regulation, education, indian-liberalism

**Summary:**

This post is fragmentary, consisting only of a title 'School fee regulation in india' and an 'About Spontaneous Order' section describing the Substack as insights from liberal minds critiquing pseudo-socialism in post-Independence India, without substantive content on the topic.

**Key points:**

- Post lacks main content on school fee regulation.

**By Spontaneous Order**

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* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Looking beyond the binaries of aadhaar

Original: https://www.spontaneousorder.in/p/looking-beyond-the-binaries-of-aadhaar

Author: Spontaneous Order

Published: 2018-02-20T10:07:55.000Z

Topics: aadhaar

**Summary:**

This post is too fragmentary to summarize meaningfully, consisting only of the title 'Looking beyond the binaries of aadhaar', a byline from Spontaneous Order, and a brief 'About' description of the publication as a source of liberal perspectives on Indian history critiquing pseudo-socialism. No substantive argument, facts, or content is present.

**Key points:**

- Post lacks substantive content for summarization.

**By Spontaneous Order**

* * *

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Chakravarty Rajagopalachari: Gandhi’s Conscience Keeper (10 December 1878 – 25 December 1972)

Original: https://www.spontaneousorder.in/p/chakravarty-rajagopalachari-gandhis-conscience-keeper-10-december-1878-25-december-1972

Author: Spontaneous Order

Published: 2018-01-23T10:55:31.000Z

Topics: rajagopalachari, indian-history, classical-liberalism

**Summary:**

This post is a fragmentary introduction titled 'Chakravarty Rajagopalachari: Gandhi’s Conscience Keeper (10 December 1878 – 25 December 1972)', lacking substantive content on the subject. It includes only a self-description of Spontaneous Order as offering 'a peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India.' From a classical-liberal viewpoint, it positions the series as highlighting a political order rooted in native soil and the independence movement, contrasting it with 'false political values' that dominated post-independence India and could have been transformative if adopted.

**Key points:**

- Spontaneous Order explores modern Indian history through liberal thinkers critiquing pseudo-socialism.

**By Spontaneous Order**

* * *

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Swatantra Party

Original: https://www.spontaneousorder.in/p/opposition-to-any-legislation-that-propagates-compulsion-hatred-conflict-expropriation-or-conferment-of-powers-to-officials-at-the-expense-of-the-freedom-of-citizens

Author: Spontaneous Order

Published: 2018-01-16T10:56:27.000Z

Topics: swatantra-party, indian-liberalism, pseudo-socialism

**Summary:**

This post is a fragmentary introduction or teaser for Spontaneous Order's series on the Swatantra Party, framing it as an exploration of 'finest liberal minds' who challenged the 'banality of pseudo-socialism' in post-independence India. It portrays dominant political values as false imports alien to the independence movement and native soil, positioning the Swatantra Party's dynamics as a missed opportunity for transformative classical-liberal political order. No specific facts, arguments, or details about the party are provided.

**Key points:**

- Spontaneous Order highlights liberal efforts to counter pseudo-socialism in Indian history.

**By Spontaneous Order**

* * *

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## What india can learn from the american political landscape

Original: https://www.spontaneousorder.in/p/what-india-can-learn-from-the-american-political-landscape

Author: Spontaneous Order

Published: 2017-12-15T10:10:51.000Z

Topics: indian-history, classical-liberalism, pseudo-socialism

**Summary:**

This post is fragmentary and lacks substantive content on its title topic of lessons India can learn from the American political landscape. It consists solely of a self-description of Spontaneous Order as a platform offering insights into modern Indian history by liberal thinkers challenging 'pseudo-socialism'—portrayed as alien to India's independence movement and native traditions—and highlighting a missed political order that could have transformed the country.

**Key points:**

- Spontaneous Order positions itself as critiquing pseudo-socialism in India's history through liberal perspectives.

**By Spontaneous Order**

* * *

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Drain of Wealth: Should Tax-Payer money be used to ‘re-capitalize’ public banks?

Original: https://www.spontaneousorder.in/p/till-when-will-such-bail-outs-compensate-for-the-inadequacy-of-institutions

Author: Spontaneous Order

Published: 2017-11-04T10:57:08.000Z

Topics: public-banks, taxpayer-funds, fiscal-policy

**Summary:**

Post is too short and fragmentary to summarise meaningfully; consists only of a title questioning whether taxpayer money should recapitalize public banks ('Drain of Wealth') and an 'About' blurb describing Spontaneous Order as offering liberal critiques of pseudo-socialism in Indian history by fine liberal minds.

**Key points:**

- Questions the propriety of using taxpayer funds to recapitalize public banks, framed as a 'drain of wealth' from a classical-liberal perspective.

**By Spontaneous Order**

* * *

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## The Controversial Rajasthan Ordinance: What is it?

Original: https://www.spontaneousorder.in/p/the-ordinance-will-stay-in-force-for-six-weeks-from-the-day-it-has-been-tabledi-e-23-october

Author: Spontaneous Order

Published: 2017-10-27T10:57:51.000Z

Topics: rajasthan-ordinance, indian-liberalism

**Summary:**

The post is fragmentary and lacks substantive content, featuring only the title 'The Controversial Rajasthan Ordinance: What is it?' and an 'About Spontaneous Order' blurb describing the publication as offering insights from liberal minds critiquing pseudo-socialism in post-Independence India and exploring an alternative political order rooted in native traditions.

**Key points:**

- Post provides no details or analysis on the Rajasthan Ordinance despite the title.

**By Spontaneous Order**

* * *

* * *

**About Spontaneous Order**

A peep into modern Indian history by some of the finest liberal minds, who sought to shred the banality of pseudo-socialism in Independent India. In a country dominated by false political values, which had, in fact, no basis of existence neither in the independence movement or the native soil, SO brings out the dynamics of a political order that could have changed the country forever.

## Rajaji – Relevance to today’s politics of the right

Original: https://www.spontaneousorder.in/p/rajaji-relevance-to-todays-politics-of-the-right

Author: Spontaneous Order

Published: 2016-12-10T10:13:00.000Z

Topics: rajaji, swatantra-party, indian-right, social-conservatism, vocational-education

> Vikramjit Banerjee | 10 December, 2016 Today Rajaji has become an icon for those who believe in a free market. The “ believers” have retrospectively invested in Rajaji viewpoints which he did not espouse when he was alive. Increasingly Rajaji has been

**Summary:**

Vikramjit Banerjee argues that modern libertarians misread C. Rajagopalachari (Rajaji) as a pure economic libertarian akin to Hayek, ignoring his social conservatism rooted in Hindu philosophy and books like 'Hinduism: Doctrine and Way of Life.' This incomplete view explains the failure of libertarianism in India, as real-world politics separates social and economic libertarianism: the right pairs economic individualism with social collectivism, drawing on majority cultural symbols and traditions. Rajaji's Swatantra Party represented the economic right, one strand consolidated by the BJP, which absorbed traditionalist (Ram Rajya Parishad) and nationalist (Jan Sangh) elements through movements like Ram Janmabhoomi and NDA-1 reforms. Amid fracturing centre-left coalitions and rising radicalism, centre-right politics must embrace traditional values against globalized individualism, ensure free-market benefits reach the masses via skill enhancement—like Rajaji's pre-'Skill India' vocational education push—and avoid elite-focused libertarianism. A holistic reading of Rajaji's prescription—free markets, traditional values, and individual empowerment—is essential for India's political economy.

**Key points:**

- Libertarians err by focusing solely on Rajaji's economic views, neglecting his social conservatism essential for right-wing viability.
- Swatantra Party's economic liberalism would align with BJP, which consolidated India's fragmented right-wing spectrum.
- Centre-right must promote people's free markets through vocational skills to distribute knowledge economy benefits widely, echoing Rajaji's education ideas.
- Pairing economic individualism with social traditionalism is key to countering radicalism and elite disillusionment.

**By Guest Author**

* * *

**Vikramjit Banerjee** | 10 December, 2016

* * *

Today Rajaji has become an icon for those who believe in a free market. The “ believers” have retrospectively invested in Rajaji viewpoints which he did not espouse when he was alive. Increasingly Rajaji has been identified with the Swatantra experiment only. There is an increasing attempt in some sections to make out Rajaji as a libertarian in the Friedrich Hayek mould. In fact in any libertarian conference there is an open nostalgia for the Swatantra Party and a lot of questions about how viable would have been the libertarian movement if Rajaji was alive.

The question today which those who have read Rajaji and those who admired him for his principled opposition to some of the collectivist and leftist schemes of the then prevailing government, have to face is, where you would the Swatantra Party and Rajaji have stood today in Indian politics ?

The fact is that if we look at the answers which suggest to us it would be apparent that the answers are staring at our face if we are interested in looking at the right places. We choose not to because of the tendency of our libertarian elites to believe that social and economic libertarianism go hand-in-hand. This flies in the face of the experience of real politics from the world.

It has been the experience in politics throughout the world that social libertarianism and economic libertarianism have always been championed by different and indeed opposed groups. While the left has usually championed social libertarianism along with economic command and control policies, the right has preferred social conservativism and economic free-market policies. Though apparently it would seem contradictory but politically it makes perfect sense. A democracy works on the principle of a numerically counted majority. There are many ways to construct the majority. However broadly the contours of the same have either to be based on economic parameters or on social parameters. What is called broadly left of centre politics concentrates on economic collectivity and social individualism . Right on the other hand has concentrated on economic individualism and social collectivity. Any calls to vote based on social collectivity in any society must in order to be credible include the symbols , traditions , culture and mores of the majority of that society. This automatically makes any right of centre politics socially conservative. There is no doubt that Rajaji was a centre-right politician. Concentrating on his economic philosophy without considering his social philosophy is an incomplete reading. Only reading “*Why Swatantra?*” while disregarding his numerous books on Hindu religion and Indian philosophy, including his “*Hinduism : Doctrine and Way of Life*” is symptomatic of the reason why the libertarian movement has failed to take off in the country as a viable political entity.

As all of us who are interested in centre-right politics are aware that the ideology of Swatantra Party was articulated differently by different groups within the party. However even if we are inclined towards the nonreligious group within the party it would be apparent that the rhetoric relied very strongly on cultural and religious symbols. It needs to be remembered that Nani Palkivala, who spoke so eloquently on free markets also wrote quite extensively on Dharma even though he himself was not a Hindu.

Anyone interested in politics would acknowledge that the rise of the Bharatiya Janata Party (BJP) in Indian politics in effect consoildated the entire right wing politics in India. The right politics in India from the time of Independence and thereafter had always been split into three broad groups, a traditionalist right exemplified by the Ram Rajya Parishad , a nationalist right exemplified by the Bharatiya Jan Sangh and an economic right exemplified by the Swatantra Party. Through a process starting from the early 1970s with the agitation against Smt. Indira Gandhi and ending with the completion of the tenure of first NDA government in 2004, the BJP ideologically managed to subsume the entire spectrum of right-wing politics in India. One can either surmise that it was done deliberately through small compromises or one can say that it was a historical process of consolidation of what was then a deliberately marginalised force, but today the fact stands that the ideology of the BJP spans the entire gamut of all strains of right ideology in India.

If the Ram Janmabhoomi movement ensured effectively the extinction of the traditionalist right as a political force in the country, the high-voltage reforms of NDA 1 effectively ensured that those who would in future align with economic liberalism would look to the BJP as their natural party. The BJP standing in the centre as a very organised nationalist party managed to absorb all the rainbow right shades on the twin grounds of modernism and nationalism.

However the consolidation of the forces of the right in Indian politics has also coincided with the broad fracturing of the centre-left coalition which had been existent in Indian politics from the 1920s and which had reached heydays in the 1970s. The experiments with centre-left politics of UPA 1 and UPA 2 was an attempt to create a new centre-left coalition, which tried to inject a new combination of identity politics of groups outside the traditionalist spectrum with economic redistributionism. This was in keeping with the globalised trend of creating such a coalition of disparate forces for a viable political end, in keeping with left of centre politics. However as we all know, that experiment failed in India and it seems increasingly that the said attempted consensus is fracturing all over the world.

There seems to be a legitimate fear that this disillusionment may be picked up by elements outside the political mainstream for promoting radical and even violent ideas. The question which therefore arises is how to deal with such a situation. The first option is for the centre-right and the centre-left to align together against the new rising radical forces. However it has been seen wherever that strange coalition has been attempted to be created, it allows the radical outsider to paint both the centre-right and the centre-left as insiders and thereby gather an even larger coalition of disaffected against what is perceived to be the “establishment and the elites” . The other solution is for centre-right parties to acknowledge that there is an increasing clamour for traditional social values as a riposte to the perceived imposition of globalised social values. This is very problematic for the social liberatarians because it would seem that the global social discourse from the beginning of the 1990s has been based on the twin pillars of individual rights and minority group identities. The conflict of individual rights and traditional values are at the heart of the post globalisation reordering of politics which we see happening before us.

There is also need to ensure that the benefits of free-market reach the last person on the line. To that end policies have to be adopted and advocated which promote a peoples free-market approach in line with the cultural values of the society in which such market exists. No doubt that people do not want to revert back to socialism and the state controlling their lives but it is also a fact which needs to be acknowledged that it is increasingly the demand of the people that the benefits of free-market should reach every individual in society and not be limited to a very few. The increasing anti globalisation rhetoric and the targeting of the “elites” in every major democratic country shows not a disaffection with markets per se but a disillusionment with the methodology of distribution of it’s benefits. The challenge ahead is to formulate policies which would effectively address the problem of distribution of the benefits of the knowledge economy through market mechanism. It would mean enhancement of individual skill sets of large sections of the population of the country so that they could be generators of income rather than being recipients of government benefit .Such a formulation would be perfectly in line with the thinking of Rajaji. Remember many years before “Skill India” , Rajaji was talking about enhancement of vocational skills in his famous or the then infamous “Modified System of Elementary Education”.

In fact the medicine for the disease that our political economy faces today lies in the prescription of Rajaji . However it is important for us to read the complete prescription including the need to empower the last individual and to promote traditional values, along with the belief in free markets. Reading it in half measures, relying on dosages convenient to us would be injurious to both the economy and the politics of the country.

*Vikramjit Banerjee serves as Advocate at the Supreme Court of India, and is an avid reader of Indian liberal thought.*

* * *

**About Guest Author**

## Modi Goes To Daulatabad

Original: https://www.spontaneousorder.in/p/modi-goes-to-daulatabad

Author: Spontaneous Order

Published: 2016-11-14T13:58:10.000Z

Topics: demonetisation, black-money, limited-government, fatal-conceit

> We live in an age of grand delusions, so it is appropriate to invoke the name of Muhammad bin Tughlaq. When Narendra Modi recently announced the demonetisation of 500 and 1000 rupee notes, I instantly thought of Tughlaq, as did many others, if Twitter m..

**Summary:**

Amit Varma compares Narendra Modi's 2016 demonetisation of 500 and 1000 rupee notes to Muhammad bin Tughlaq's ill-fated shift of the capital to Daulatabad, praising Modi's courage in risking backlash from BJP's small trader base and unpredictable consequences, but deeming it unwise. He argues it fails to curb black money or corruption: it merely reboots the system with new 500 and 2000 rupee notes, spawning black markets for exchanges, while the wealthy hold assets in real estate, gold, foreign accounts, and benami investments. The poor suffer most, as much of India's bottom economy is cash-based; small traders, workers, and the unbanked face ID barriers, transaction costs, and time losses. From a classical-liberal view, corruption arises from excessive state power—government is bloated beyond protecting rights, enabling rent-seeking. Black money thrives because people evade a parasitic state; the cash economy is productive unlike government. Modi betrays his 'Minimum Government, Maximum Governance' rhetoric by expanding state size and taxes, revealing a top-down 'fatal conceit' akin to Nehru and Indira Gandhi, ignoring Hayek's lessons on knowledge limits and unintended consequences that may alienate voters by 2019.

**Key points:**

- Demonetisation provides only a temporary reboot for black money, as new higher-denomination notes enable quick resumption and black markets profit exchangers.
- The poor in India's cash-dependent economy bear the brunt, facing ID requirements, transaction costs, and time losses to convert notes.
- Corruption and black money stem from oversized government power; classical liberals advocate slashing state size to legitimate functions like rights protection.
- Modi's top-down approach embodies Hayek's 'fatal conceit,' overestimating central knowledge despite his anti-statist campaign rhetoric.

**By Amit Varma**

* * *

We live in an age of grand delusions, so it is appropriate to invoke the name of [Muhammad bin Tughlaq](https://en.wikipedia.org/wiki/Muhammad_bin_Tughluq "Muhammad bin Tughlaq"). When Narendra Modi recently announced the demonetisation of 500 and 1000 rupee notes, I instantly thought of Tughlaq, as did many others, if Twitter memes were anything to go by. Tughlaq was a 14th century sultan of Delhi who overestimated the extent of his knowledge and power, and committed a number of legendary blunders, most famously shifting the capital of his kingdom from Delhi to Daulatabad. Modi’s recent edict also involves *daulat*, and, indeed, a shifting of capital.

To begin with, one must give credit where it is due. Modi is a brave man. Firstly, prime ministers, once in power, are tempted to not do anything which can carry unpredictable adverse consequences. Just play it safe and be a gradualist, one step at a time. A move like this, with all its unintended consequences, requires courage. Secondly, this specific move harms the small traders who operate in a cash economy and have been the BJPs backbone for decades. Modi has taken the risk of alienating them.

That said, courage does not always go hand in hand with wisdom, and this move is a mistake at multiple levels. It is also an illustration of a mistaken mindset on multiple levels. Here are four things I’d like you to consider.

One, think about the stated intent of the move: to eliminate black money and reduce corruption. While it is true that it will bring much existing black money into the white economy, it is merely a reboot. New 500 rupee notes will soon be introduced, as will 2000 rupee notes, and after a month or two of adjustment, life will go back to normal. Also, a vibrant black market has already sprung up offering to exchange old notes for new notes at a fee. Guess where the profits will go.

The larger point, though, is that most truly rich people don’t keep their wealth in the form of cash, but in the form of real estate, gold, deposits in foreign bank accounts and other *benaami* investments. They will be largely unhurt. This brings me to my next point.

Two, it is the poor who will be hurt the most by this. A large chunk of India’s economy, especially at the bottom of the ladder, is a cash economy. Small traders and businessmen deal in cash for convenience and pay their workers that way. I pay my domestic help in cash, and her savings are entirely in 500 and 1000 rupee notes. Yes, she can go to a bank and convert them, but that requires an ID, and not all poor people have IDs. Also, there is the significant transaction cost of doing so, as well as the opportunity cost of the time spent. (In case you wonder what kind of poor people have plenty of cash but no ID, google your way to [an excellent tweet storm](https://twitter.com/AmbaAzaad/status/796044496634904576 "AmbaAzaad on Twitter") by Twitter user @AmbaAzaad that outlines the kinds of poor folk who are likely to be hurt by these.)

Three, let’s go back to the larger issue of corruption and black money. What is the root cause of corruption? As Lord Acton famously said, power corrupts. The more power you give one set of individuals over another, the more corruption you will have. In my classical liberal worldview, the only legitimate function of the state is to protect the rights of its people. However, our government is orders of magnitude larger than it ought to be. The people who run the country, ostensibly and comically called public servants, are like rulers, and we, their subjects to be brutally exploited. To end corruption, you need to vastly reduce the power that government gives one set of people over another people.

And what is black money? When a government is a thousand times larger than it should be, a rent-seeking parasitic beast that sucks the lifeblood of the people without creating any value, it is natural to be disdainful. The so-called cash economy at the bottom of the pyramid is incredibly productive, for people can only create value for themselves by creating value for others. Unlike government. Of course, much of this cash isn’t even black money per se, and even when it is, it is surely better off being put to productive use than being sucked away as *hafta* by the one legal mafia that rules us, and their cronies.

I am not saying that we should not pay taxes: it is the duty of every citizen to do so. But consider that if the government took only the taxes it needed to serve us, instead of to rule and exploit us, this mindset of evasion would not exist. And here’s the irony: Modi knows this! One of his campaign slogans in 2014 was ‘Minimum Government, Maximum Governance’, and he unleashed much rhetoric, correctly so, about how Jawaharlal Nehru and Indira Gandhi’s statist policies had impoverished our country. And yet, under his prime ministership, the government has only grown, and we pay higher taxes than we did before. This is because, at its heart, his political philosophy is the same as Nehru’s and Indira’s, which brings me to my next point.

Four, [Modi, like Nehru and Indira, is a top-down thinker](http://indiauncut.com/iublog/article/the-fatal-conceit-of-the-indian-politician/ "The Fatal Conceit of the Indian Politician -- Amit Varma") who believes that an economy and a country can be run from above, as if the government is a proxy for god. This is, in the words of the great Austrian economist Friedrich Hayek, a [fatal conceit](http://www.amazon.in/Fatal-Conceit-Collected-Works-Hayek/dp/0226320669/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=1445001000&sr=8-1 "The Fatal Conceit -- Amazon"). Hayek also wrote at length about the limits of knowledge, which should be a lesson in humility for all politicians. The unintended consequences of Modi’s edict involve many unknown unknowns, and I feel that he has not been respectful enough of the poor people potentially at the receiving end. Will they be respectful of him in 2019?

* * *

**About Amit Varma**

## Tax Cuts: Stimulus for the Economy?

Original: https://www.spontaneousorder.in/p/tax-cuts-stimulus-for-the-economy

Author: Spontaneous Order

Published: 2016-11-01T13:02:08.000Z

Topics: tax-reform, tax-cuts, flat-tax, economic-stimulus

> Taxing the people of a sovereign in the name of protection and development has always been a practice, in almost every recorded governance system. As famously stated by Kalidas “It was only for the good of his subjects that he [the King] collected taxes

**Summary:**

Sadaf Hussain argues from a classical-liberal viewpoint that India's escalating direct and indirect taxes, exemplified by a restaurant bill rising from Rs. 3,000 to Rs. 3,948 due to multiple cesses and VAT, burden households and echo historical follies like Dhana Nanda's extortionate taxation leading to his downfall. Drawing on ancient texts like Manu's guidelines (1/5th profits for traders, 1/6th-1/10th produce for farmers), he critiques modern hikes such as the 2016 Krishi Kalyan Cess. He proposes radical reform: abolish most taxes for a flat 20% universal rate, with citizens allocating funds via a 'menu card' based on annual sector performance report cards (e.g., 3% education, 5% health as non-negotiable). This fosters competition among departments, leaves more disposable income, and leverages altruism if funds are used transparently. Tax cuts stimulate economies by boosting consumption, per Friedman's Permanent Income Hypothesis and Keynesian models (MPC 0.6), potentially increasing revenues via lower rates, as Kennedy's 1964 cut from 90% to 70% raised US revenues 62% (from $94B to $153B). Similar successes in Bush era and Ireland support this; Modi should implement permanent cuts and citizen-directed taxation for growth.

**Key points:**

- India's high taxes, like turning a Rs. 3,000 restaurant bill into Rs. 3,948, burden citizens and risk historical pitfalls seen in Dhana Nanda's regime.
- Implement a flat 20% tax rate with a 'menu card' allowing citizens to allocate based on government sector performance report cards to enhance efficiency and transparency.
- Tax cuts stimulate economies by increasing consumption and revenues, as evidenced by Kennedy's reduction from 90% to 70% boosting US tax revenues 62%.
- Permanent tax cuts, per Friedman's hypothesis, encourage spending over saving, outperforming temporary measures.

**By Sadaf Hussain**

* * *

Taxing the people of a sovereign in the name of protection and development has always been a practice, in almost every recorded governance system. As famously stated by Kalidas “*It was only for the good of his subjects that he \[the King\] collected taxes from them, just as the Sun draws moisture from the Earth to give it back a thousand fold.*”

Taxes were more like protection money—a price you paid in return for protection from internal and external troubles, be it war or famine. One of the greatest sages of ancient India, Manu, suggested that the king could levy taxes, according to *Shastras*. He advised that taxes should be reasonable, and their collection should not pinch the taxpayers. However, he maintained that both exorbitant taxes and complete absence of taxes were unadvisable, as that was harmful both for the citizens and the economy. He also laid down basic guidelines on tax collection: traders and artisans should pay 1/5th of their profits as tax, while agriculturists were to pay 1/6th, 1/8th or1/10th of their produce depending upon their circumstances. Taxes were also levied on various classes of people such as actors, dancers, singers and even dancing girls.

However different dynasties, rulers and democracies have imposed their own version of a tax system. Amongst different dynasties and empires in Indian history, Dhana Nanda (329 BC – c. 321 BC) was one king who wasn’t liked and admired much by the people or the neighboring states. He was the last king of the Nanda dynasty, and was very unpopular because of his financial extortion. He levied numerous kinds of taxes on the people which included various day-to-day items and even on skins, gums, trees and stones. Among many reasons for the downfall of his kingdom, the exorbitant tax system was one for sure.

It seems that we have not read our history properly and are increasing taxes ( both direct and indirect) almost every month.  We’re moving in the direction of a higher, more exorbitant system of taxation. June 1, 2016 marked another such day for India, where the Government imposed a 0.5% Krishi Kalyan Cess and increased the service tax levied on citizens, resulting in a misbalance of a general household budget.

Let us understand this through a simple example: you order a meal in a nice, fancy, air-conditioned restaurant. If your total bill at the restaurant comes to Rs.3000, you may end up paying close to Rs. 4,000! Here’s how:

a Food 2000 b Alcohol 1000 c **Sub total** **3000**  d Service Charge (10% of Sub-Total) 300  e Service Tax ( 5.6% of c+d) 184.8  f Swachh Bharat Cess (0.2% of c+d) 6.6  g Krishi Kalyan Cess (0.2% of c+d) 6.6  h VAT (12.5% on a) 250  i VAT (20% on b) 200  j **Total Bill** **3948**

This is one such example but you can apply different break ups of taxes on different products and you’ll realize the difference between the actual and the total amount of the bill.

**Rethinking Tax Reforms**

In 2014, before the Modi government came into power, one report talked about the several taxes reform proposals before the BJP Parliamentary Board. *Arthkranti*: Bank Transaction Tax (BTT) recommended abolition of the more than 30 local, state and central level taxes levied, and to only retain the import duties. The idea behind BTT was simple: savings in amount of taxes paid, simplification in the payment of taxes and transparency in the economy.

In my opinion, people are largely altruistic. If you show them poverty or any other sectoral issues and challenges where the country needs their help, they will happily provide financial or in kind support, but on the condition that their resources are being utilized properly.

In order to reduce taxes let us place ourselves in a hypothetical situation. What if the government removed all taxes (direct or indirect) and gave us a menu card with a flat tax rate (allowing for some sectors where paying tax was non-negotiable). Let us further assume that the flat taxes are set at 20%, which every household is supposed to pay, so whether they earn Rs 1000 or Rs 100000 or more. This is the guiding factor behind the religious taxes—1/10th of your income in Hinduism, 1/6th in Islam, etc. They pay money according to the performance of one institute over another. At the end of every fiscal year, you see a report card listing the performance of each sector. Follow the below chart to understand this better:

  **Expenditure Percentage Non Negotiable Expenses** **Result/Outcome** **Annual Income  
100000**Total taxable amount  
20000 (20%) Education 3% Health 5% Defense 5% Poverty reduction program 5%  Fixed Infrastructure 1% Misc 1% Fixed

**Menu Card Tax Structure**

In the above chart, we are assuming that the government needs to spend money on poverty reduction programs, and another 1% of total national income is kept aside for reserve or contingency, and hence those are non-negotiable taxes. The rest one can decide on, depending on the result of the performance of the state in each sector. This will bring multiple benefits—lower, universal flat tax will leave more disposable income in the hands of citizens, state departments will compete and perform better to attract people’s attention and get their funds.

Though tax cuts are a huge strain on public finances because they reduce tax revenue; governments choose to either cut taxes or increase fiscal spending to uplift an economy that is in recession. If the government does not reduce its expenditure, there can be one of these two consequences: consumers anticipate the future tax rise, they end up saving the extra income and this will not help the economy at all. However, in a typical Keynesian econometric model, the ‘marginal propensity to consume’ (the fraction of an additional dollar of income spent on consumption) is taken as 0.6. Hence 60% of the tax cut is spent on consumption and is not saved. On the other hand, the second consequence is that consumers do not anticipate the future tax rise. They increase their consumption (as hypothesized by Lucas), which is the motive behind the tax cut. Hence consumers will have to be convinced that the tax cut is permanent and not temporary.

This is in accordance with Milton Friedman’s “Permanent Income Hypothesis”. According to him, people will save most of any income change they see as merely transitory. This can be observed in how people with different income levels respond differently to the tax cut.

**The Benefits of Tax Cuts**

While it is widely believed that tax cuts reduce tax revenue, they may actually increase tax revenue depending on the tax rate. When tax rates are exorbitant, people refuse to pay taxes.

John F. Kennedy once said, “It is a paradoxical truth that tax rates are too high today and tax revenues are too low ,and the soundest way to raise revenues in the long run is to cut the tax rates”. This statement holds true in today’s scenario too. The truth that the society considers itself too burdened by the taxes being imposed is no lie.

In 1968,when President Kennedy slashed tax rates from 90% to 70%, tax revenues climbed from $94 billion in 1961 to $153 billion—an increase of 62 percent (33 percent after adjusting for inflation).Other examples include President George W. Bush’s move to cut the taxes to move the economy out of recession, when the US Congress in 1964 enacted tax cuts of 18% in personal taxes to spur growth, and Ireland’s recent tax cuts, which are believed to have improved living standards significantly.

‘Tax cuts, when used properly, have stimulated the economy’.

Mr Prime Minster in 2014 said “The present taxation system is a burden on common man. There is a need to reform it and introduce a new system.” So why not try this experiment? Give people tax cuts. Allow them to direct the use of their taxes. Present them with report cards on the performance of government departments, and see what that does for the economy!

* * *

**About Sadaf Hussain**

Sadaf Hussain writes everything between politics, economics to food and culture. He is the author of Daastan-E-Dastarkhan and a TEDx Speaker.

## GST threatens to undermine fiscal federalism and tax competition

Original: https://www.spontaneousorder.in/p/gst-federalism

Author: Spontaneous Order

Published: 2016-08-21T20:03:10.000Z

Topics: gst, tax-competition, fiscal-federalism, economic-freedom

> There is a compelling idea that has come to be taken very seriously—that uniformity is a definite good that must be pursued: uniformity in laws, in institutions, in cultural values and even tax rates. One can see the reasoning behind such a view: a whol

**Summary:**

Ujwal Batra argues from a classical-liberal perspective that India's GST bill, while simplifying taxes, threatens fiscal federalism and tax competition by imposing uniform tax rates and centralizing decision-making in the GST council, undermining states' sovereignty over sales taxes that constitute about 80% of their revenue. State-level commodity and service taxes as a percentage of GDP vary widely—from 13% in Karnataka and 15% in Tamil Nadu to 33% in West Bengal—reflecting differing economic freedoms partly driven by tax regimes. Tax competition directs capital and enterprise to low-tax jurisdictions, as seen in U.S. states or international tax havens like Switzerland, fostering liberty and efficient outcomes rather than a pre-determined capital allocation. Uniformity, though intuitive for predictability, concentrates power and stifles this beneficial rivalry. Even proponents acknowledge needs for tax harmonization to prevent capital flight, but Batra counters that alternatives exist: allow states to set their own SGST rates alongside CGST, leveraging IT infrastructure like the EU's VAT system or improved U.S.-style coordination to achieve a common market without sacrificing federalism. Consensus among political parties warrants skepticism, and Tamil Nadu's resistance highlights potential conflicts. Simplicity is valuable, but not at the cost of uniformity over competition.

**Key points:**

- Uniform GST rates undermine tax competition, preventing capital from flowing to low-tax states and centralizing power in the GST council.
- Sales taxes account for 80% of state revenues, with rates varying significantly (e.g., 13% of GDP in Karnataka vs. 33% in West Bengal), influencing state economic freedom.
- A common market can be achieved without uniform rates by allowing state-specific SGSTs integrated via IT, as in the EU's VAT system.
- Tax competition among jurisdictions promotes liberty and better outcomes, superior to imposed uniformity despite its promised predictability.

**By Ujwal Batra**

* * *

There is a compelling idea that has come to be taken very seriously—that uniformity is a definite good that must be pursued: uniformity in laws, in institutions, in cultural values and even tax rates. One can see the reasoning behind such a view: a whole host of virtues supposedly accompany uniformity—predictability, fairness and stability.

Diversity or plurality, on the other hand, is laden with problems. Diversity makes matters messy, unpredictable and unstable.

But even if diversity or a plurality of laws or institutions presents its drawbacks, uniformity is not always the natural solution, even if it is the most intuitive one. Uniformity might not always be the good it is proclaimed to be. It is a competition between jurisdictions, institutions and systems of law that often leads to liberty and fair outcomes. I explored this idea in relation to personal laws and the Uniform Civil Code in [a previous post.](https://spontaneousorder.in/ucc-status-contract/)

A similar argument can be made for the GST bill.

**GST and Tax Competition**

**A uniformity of tax rates will undermine tax competition.** To undermine that competition has consequences—even if one acknowledges the benefits of GST, the resultant institutional arrangement will alter the rules of the game and would result in a greater centralisation of power. By centralisation of power I don’t merely mean that greater power will vest in the central government, but that *decision-making itself* will be concentrated in ***one*** place (the GST council) instead of being spread across 29 jurisdictions in the country.

Even all the major political parties are now on board, having only tiny quibbles. When nearly everyone finds themselves in agreement on an issue, even our otherwise bitterly-divided and vile political class, it ought to inspire at least some measure of scepticism.

Other things being equal, capital, labour, goods and services will flow to places where the environment is more conducive to business and enterprise—a prominent determinant of which is the tax regime under which businesses are supposed to operate. Low-tax jurisdictions attract capital. We observe this across countries internationally; capital flows to tax havens with low tax rates like Switzerland. We observe this too in states within countries The United States, for instance has a federal structure where states are considerably more sovereign that they are India, and it is observable that [the states with lower taxes attract more capital.](http://www.wsj.com/articles/SB124260067214828295)

This is recognised even by some of the proponents of GST. Some commentators have suggested that GST will have to be accompanied by tax harmonisation between the states to ‘prevent’ capital  and economic activity from escaping to low-tax jurisdictions. Observe what such a view implies—that there is a pre-determined or an ‘ideal’ allocation of capital across states *apart* from the regulatory regime. But the allocation of capital is determined by*,* among other things*, to a large degree precisely by the regulatory and the tax regime.*

Just as water flows from uphill to downhill, so does capital flow from less hospitable to more hospitable regulatory regimes. Capital likes to be where it is treated well. That is why it flows to resource-scant Hong Kong instead of oil-rich Venezuela. In the absence of tax competition, other determinants will naturally play a larger role in the allocation of capital. But this by itself is no argument to do away with tax competition, which is a definite good and entails many benefits.

**Undermining Fiscal Federalism**

The Constitution gave the states the control over sales tax, which accounts for, on average, for 80% of their revenue. **\[1\]***State level taxes on commodities and services as a percentage of State GDP* vary from 13% in Karnataka and 15% in Tamil Nadu, to 33% in West Bengal. The varying rates of taxes across states is one of the factors which decides how economically free a state is.**\[2\]** 

Even if GST promises to simplify the tax regime and the workings of the economy, it could potentially lead to greater conflicts between states, and between the states and the centre. Furthermore, while the voting mechanism of the GST council gives a greater weightage to states in the voting process, it has been so fashioned that the Centre can effectively veto the decisions of the states.

While states do still enjoy considerable voting powers in the council, *a particular state that still dissents with the view of the council will still have to go with its decision*. Even if one acknowledges that GST council is a representative body that has strived to give the states their due—it still undermines their fiscal sovereignty, to the extent that states will no longer be able to unilaterally decide their own tax policies. With different states having different needs, and regional parties with different political ideologies being the force that they are in India, we could see far greater friction in the future. The diversity in India might just mean that the institutional arrangement and the decision-making process purported by the Bill will be untenable. It times to come, consensus-building and dispute-resolution between states may well prove to be a formidable task.

At least some of that friction is at display presently, as AIADMK remains steadfast in its resistance to the GST Bill. Being a manufacturer state, Tamil Nadu stand to lose greater from the GST bill than other states. While the economic gains of GST might be foreseeable and quantifiable, we can’t quite foresee the long-term political ramifications of the measure.

**One Nation, One Tax?**

Much has been said about the GST ushering in a ‘common’ or a ‘uniform’ market in India.

A common market entails a free-flow of goods and capital. Our present tax regime, and the time and effort exerted in complying with it, does indeed frustrate the free-flow of goods and capital. But is bringing in a uniform GST the only way to secure a uniform market?

Even the European Union, which had its origins in an ambitious enterprise to create a common market across different sovereign states, has differential tax-rates among its member states. Similarly, the United States too does not have a GST, but inter-state commerce and paying taxes is far easier there than it is in India. There must be ways by which we can simplify the tax regime and administration, along with reducing compliance costs, without bringing in standardised tax rates throughout the country.

We have already adopted for dual GST with Central GST (CGST) and State GST (SGST). One way to protect fiscal federalism and encourage tax competition might be to allow each state to fix its own SGST rate, instead of leaving this to the GST council. As Harsh Gupta remarks in [this piece](http://www.livemint.com/Opinion/QlE8YWbvLBsuTPHTeFcrMK/Dual-differentiated-GST.html), “an integrated market—with no border delays and octroi—can be fully achieved with better use of information technology and better state-Centre coordination, and does not require a uniform tax rate in all the states.” The European Union is a case in point, which “achieved a single, efficient market while still having different value-added tax (VAT) rates for its member states using the VAT Information Exchange System.” India is already investing in the [technological infrastructure](http://www.livemint.com/Companies/RZRas6WPQ1jevNg8C0YWdK/Infosys-wins-Rs1320-crore-contract-to-build-GST-technology.html) that be required for the implementation of GST. It is quite conceivable that different SGSTs can easily be incorporated in this system.

Our tax regime is indeed complicated and in need of a major overhaul, but we needn’t settle for absolute uniformity to simplify the system. For while simplicity is a definite virtue, uniformity might not be.

***References and further reading***

*\[1\] [GST: Good for business, snag for federalism?](http://www.thehindu.com/opinion/op-ed/gst-good-for-business-snag-for-federalism/article7279180.ece)*

*\[2\] [Economic Freedom of the States of India](http://object.cato.org/sites/cato.org/files/economic-freedom-india-2013/economic-freedom-states-of-india-2013.pdf) (Data from Appendix IV)*

*\[3\] [A Single Market is not a Free Market](http://www.livemint.com/Opinion/1rHnPFvXmSUOQbqPJfPdcO/A-single-market-is-not-a-free-market.html)*

*\[4\] [GST: Scrap the Bad Idea](http://www.livemint.com/Opinion/55fSKkk6zloMFBSByBfzXI/GST-scrap-the-bad-idea.html)*

*\[5\] [Dual, differentiated GST](http://www.livemint.com/Opinion/QlE8YWbvLBsuTPHTeFcrMK/Dual-differentiated-GST.html)*

* * *

**About Ujwal Batra**

## Uniform Civil Code: From Status to Contract

Original: https://www.spontaneousorder.in/p/ucc-status-contract

Author: Spontaneous Order

Published: 2016-07-27T18:57:40.000Z

Topics: uniform-civil-code, personal-laws, legal-pluralism, contract-freedom

> “If the law is considered as ‘the enterprise of subjecting human conduct to the governance of rules,’ then this enterprise is being conducted, not on two or three fronts, but on thousands.” –Tom W Bell Recently, the government asked the Law Comm

**Summary:**

The post critiques the push for a Uniform Civil Code (UCC) in India, arguing from a classical-liberal perspective that it imposes rigid state-driven uniformity on personal matters like marriage, succession, and adoption, disregarding diverse religious and cultural customs. While acknowledging problematic elements in existing personal laws, such as discrimination against women, the author contends that UCC is not inherently just, as uniformity does not guarantee better outcomes and could eliminate options like the Special Marriage Act, 1954, which allows opting out of religious laws. India's history, from colonial respect for personal laws to the Constitution's non-justiciable Directive Principle on UCC, reflects caution against standardization. Codification—uniform or plural—risks entrenching norms that outlast social evolution, as diverse viewpoints defy perfect codification. True justice and secularism, per the liberal view, arise from accommodating people's wishes rather than state intervention. The solution lies in Henry Maine's progression 'from status to contract': enforce minimum standards for personal law contracts while allowing individuals to negotiate their own rules, enabling voluntary agreements over status-based dictates.

**Key points:**

- Reject Uniform Civil Code as it risks rigid codification that ignores cultural diversity and people's wishes, unlike the flexible Special Marriage Act, 1954.
- Codification of personal laws, whether uniform or plural, can stall social progress by giving permanence to evolving norms.
- Shift personal laws from status-based systems determined by birth and religion to contractual arrangements with minimum enforceable standards.
- Legal pluralism better serves liberal rule of law by deriving law from people's will rather than state plans.
- Secularism in India should mean equal treatment via accommodation of customs, not Western-style separation imposing indifference.

**By Ujwal Batra**

* * *

*“If the law is considered as ‘the enterprise of subjecting human conduct to the governance of rules,’ then this enterprise is being conducted, not on two or three fronts, but on thousands.”*

**–Tom W Bell**

Recently, the government asked the Law Commission to examine the implications of bringing in a Uniform Civil Code (UCC). The government informed the Rajya Sabha too that it had a ‘duty’ to bring in the UCC.

There are few issues in India as contentious, as complicated and as capable of stirring up passions as the UCC . Should all Indians be subject to one set of laws relating to personal matters like marriage, succession and adoption, or should the law be cognizant and accommodating of the differences between different religious and cultural traditions?

It is a particularly interesting question for liberals. On the one hand, liberals call for the institution of the rule of law in all matters—one that imposes the same rules and standards on everyone. On the other hand, it is not the most liberal proposition to have a standard, rigid set of personal laws that are indiscriminately applied to the utter disregard of the wishes, customs, practises and conventions of the people. The liberal point of view recognises the law coming not primarily from the will and plans of the state; but to a great degree, from the will of the people.

India has had a rich history of personal laws, particularly till the early 20th century, with different communities and religions evolving their own conventions. Even our erstwhile colonial rulers respected the personal laws of various communities—while people were to be subjected to the same criminal code, religious laws and customs were to remain outside the purview of standardisation and codification. As we attained independence and drafted our constitution, the same sense of caution led us to *not institute* UCC, but instead merely put it as a non-justiciable Directive Principle.

**Justice and Secularism**

If justice is the ultimate consideration, as it must be, then how are the ends of justice served? By bringing in a UCC or by recognising the diversity in personal laws?

And if we are a secular nation, as I am told we are, then how the ends of secularism served? Does secularism ask us to fashion laws in a manner that it is indifferent to the customs of the people? Or does secularism ask for a system of law that is accommodating of the varied customs and traditions across communities? It might well be that the debate around personal laws is inextricably tied to the brand of secularism that  India has come to follow—one that calls not for the western ideal of  separation of state and religion, but ‘equal treatment’  of all religions. And equal treatment entails state intervention, for better or for worse.

Regardless, we cannot bring in legislation that is absolutely divorced from the wishes and the sentiments of the people. Even if it is morally desirable, it is not always politically feasible. Given all this, what approach and what set of laws best serve the interests of justice, of secularism and, lest we forget, (as we often do) of the people?

**Uniformity Vs Pluralism?**

It is one thing to recognise the problem—that there are elements in our personal laws that are problematic and discriminatory toward women. But it is another thing to find the correct remedy.  A Uniform Civil Code may not be the solution it is purported to be. There is *nothing inherent* about legal uniformity that guarantees just outcomes, just as there is nothing inherently wrong or unjust with legal pluralism and diversity. You can have corruption seep in in a universal code about as easily as in a legally pluralistic system. Our present system of personal laws at least gives the option of opting out from particular personal laws that one might find restrictive to opt for *Special Marriages Act, 1954*. Will that kind of an alternative be available if we have a UCC? One can’t say, we don’t really know what a Uniform Civil Code will look like.

One must be sceptical of all codification, be it a uniform code or *a plural code with a variety of personal laws* (as we presently have). Codification lends a certain element of permanence to social norms—the code might endure while the norm changes. This may potentially stall progress. Indeed, it is assumed that our system of personal laws has led to legal pluralism and an accommodation of all possible norms relating to personal law. In truth, [as this piece notes](http://indianexpress.com/article/opinion/columns/the-trap-of-personal-laws-uniform-civil-code-aimplb-supreme-court-2775249/), there is such a diverse variety of viewpoints on matters relation to personal law *that no set of personal laws (let alone one law) can do justice to it.* The problem is not that we haven’t evolved the perfect law or set of laws that caters to all diversity, but that the very exercise of codification to tackle this is futile, or lacking at best.

But if codification is not the answer, or is at best an answer fraught with difficulties, then where does the answer lie?

**From Status to Contract**

The answer might lie in an approach that eschews codification for contract—an approach that does not seek to come up with the perfect code, but allows the people to work out the law amongst themselves. There could be acceptable minimum standards that all contracts relating to personal laws must adhere to, but beyond that, people should be able to work out the details. Tom Bell makes a persuasive point about the meaning of law, and it is relevant in this debate—“If the law is considered as ‘the enterprise of subjecting human conduct to the governance of rules,’ then this enterprise is being conducted, not on two or three fronts, but on thousands.”

The Jurist and historian Henry Sumner Maine, who incidentally also brought in the legislation that later became the Special Marriage Act, 1954 , made a very interesting distinction.  He characterised the movement from more primitive to more advanced systems of law as a movement ‘from status to contract.’ The more ancient and primitive systems of law organised societies on the basis of status, where your lot in life, and your rights and obligations were determined by the social status you were born in. But as societies and systems of law progressed, people moved away from rigid social structures, and could go out and make voluntary, contractual agreements. A similar progression is required, perhaps, in our personal law regime. One that allows people to leave the confines of their status, religion and the dictates of particular personal laws, to move to contractual arrangements where they can create the law amongst themselves.

\*\*\*

References

1.  [Uniform Civil Code: A Heedless Quest? (EPW)](http://www.epw.in/journal/2016/25/law-and-society/uniform-civil-code.html)
    
2.  [The Trap of Personal Laws (Indian Express)](http://indianexpress.com/article/opinion/columns/the-trap-of-personal-laws-uniform-civil-code-aimplb-supreme-court-2775249/)
    
3.  [We need uniform civil law, not uniform civil code](http://www.sabhlokcity.com/2011/03/we-need-uniform-civil-law-not-uniform-civil-code/)
    

[Read More: The Generality Principle](https://spontaneousorder.in/the-generality-principle/)

* * *

**About Ujwal Batra**

## How do we plan our cities?

Original: https://www.spontaneousorder.in/p/cities-plan

Author: Spontaneous Order

Published: 2016-07-25T19:55:45.000Z

Topics: urban-planning, zoning-reforms, smart-cities, market-urbanism

> Last week, Mint carried a wonderful article (Liberalizing India’s urban thinking) by Sanjeev Sanyal on the need to shed the old attitude of central planning when it comes to managing our cities. While socialist-era thinking has quietly been in retreat w

**Summary:**

Shreyas Bharadwaj endorses Sanjeev Sanyal's call to abandon socialist-era central planning in Indian urban development, arguing that while economic and foreign policies have liberalized, urban thinking remains rigidly planned, yielding sterile outcomes like Chandigarh rather than dynamic successes like Gurgaon evolving toward Singapore or Hong Kong. From a market-urbanist perspective, 'managing Gurgaon better' requires government to deregulate extensively: reform building bye-laws to minimize enforcement, reduce zoning to eliminate violation monitoring, relax land use norms around commercial centers, and adopt the Model Shops and Establishments Act. Government should instead build capacity to manage infrastructure expansion, allocate prime public land efficiently, leverage financial markets for funding, and enhance intra-city mobility. Bharadwaj laments the scarcity of urban planners versed in urban economics, noting most graduates and professors reject phased FSI/FAR relaxations and zoning reforms as unsustainable or destructive, clinging to master plans. Capacity-building efforts like NITI Aayog's program with Singapore's TEMASEK and SCE are insufficient for India's vast urban scale. He doubts the Smart Cities scheme's efficacy despite thousands of crores invested, predicting it will devolve into costly tech upgrades and added bureaucracy due to rigid plans. Smaller reforms via Housing for All (tenancy and zoning) and AMRUT (utility upgrades) offer promising steps to erode planners' grip.

**Key points:**

- Governments should deregulate building bye-laws, zoning, and land use norms to foster organic urban growth like Gurgaon.
- Focus government capacity on infrastructure ramp-up, resource management, financial market funding, and mobility rather than over-planning.
- Indian urban planners lack urban economics knowledge and resist FSI/FAR relaxations in favor of master plans.
- Smart Cities Mission risks becoming bureaucratic tech spending; prioritize reforms like Housing for All and AMRUT.

**By Shreyas Bharadwaj**

* * *

Last week, Mint carried a wonderful article *[(Liberalizing India’s urban thinking)](<http://Liberalizing India’s urban thinking>)* by Sanjeev Sanyal on the need to shed the old attitude of central planning when it comes to managing our cities. While socialist-era thinking has quietly been in retreat when it comes to our economy and foreign policy, Sanyal contends, and rightly so, that it ‘remains firmly embedded in how Indian cities are planned.’ The last lines capture the essence of the article quite well-

> ‘Even if we did our very best on Chandigarh, the best we can hope for is Canberra or Brasilia. On the other hand, if we managed Gurgaon better, we could get Singapore or Hong Kong.’

As a passionate urbanist, I wholeheartedly concur. After reading scores of columns on this subject in Indian newspapers and feeling saddened by the poor quality of the ideas presented there, it was refreshing to see a market urbanist article in one of India’s best papers.  Here, I wish to add a few more points to what the article said.

‘Managing Gurgaon better’ would paradoxically mean the government managing fewer aspects of the city. It would involve the government reforming building bye-laws so that there are fewer rules to enforce, reducing zoning regulations so that there is no need to create a special wing to monitor zoning violations, relaxing land use norms for vast stretches of land in and around the commercial centre of the city and adopting the Model Shops and Establishment Act recently approved by the Union Cabinet (I wouldn’t mind if better versions of the act is adopted). It would also involve increasing the capacity of government to **manage** the infrastructural ramp up that would be necessitated by the above, **manage** available resources (prime government owned land) and using financial markets to fund the increased expenditure on infrastructure and **manage** the challenge of increasing intra city mobility.

Sadly, we are under equipped with professionals who can manage such a change. I write that knowing completely well the need for reforms zoning, land use and construction norms to increase the productivity and wealth of our cities. Most Indian urban planning graduates and professors I have had a chance to interact with are still stuck in the ‘planning mode’. When I remarked to a bunch of them that we need phased yet massive relaxations in FSI/ FAR(Floor Area Restrictions) norms as well as immediate relaxation in zoning reforms, most called my proposal unsustainable, ecologically destructive and unnecessary. To most of them, anything other than a master plan is sacrilege. In short, there is a shortage of urban planners who understand urban economics.

Since the JNNURM\[1\] days, we have been seeing programmes aimed at capacity enhancement. Currently, Niti Ayog has embarked on an Urban Management Programme in collaboration with Singapore’s TEMASEK Foundation and Singapore Cooperation Enterprise (SCE). But given how big and how many cities we have, this may not be enough. Therefore, don’t expect much change anytime soon.

Now coming to Smart Cities. I doubt if the scheme will be of any use despite thousands of crores invested because of the way it is structured. What could have been a scheme to incentivize states to reform their urban areas will probably end up as a costly tech upgradation. Nothing much will change in the way our cities are governed. In fact, I fear this scheme might just end up creating another layer of bureaucracy. The rigidity of many of the plans which have been approved is quite astounding.

The same isn’t the case with the tenancy and small zoning reforms pushed by ‘Housing For ALL’ as well as the utility upgrades pushed by *AMRUT Mission*. These will be a small but important steps towards reducing the costly and debilitating hold of planners and their master plans over our cities.

\*\*\*

*(Shreyas Bharadwaj is a student at BML Munjal University, pursuing his studies in Business and Commerce.)*

\[1\] Jawaharlal Nehru National Urban Renewal Mission

* * *

**About Shreyas Bharadwaj**

## Minoo Masani | ‘All Isms have become Wasms’ (1944)

Original: https://www.spontaneousorder.in/p/isms-wasms

Author: Spontaneous Order

Published: 2016-07-14T19:12:34.000Z

Topics: socialism-transition, gandhian-trusteeship, marxism-critique, economic-liberty

> This is the final part of a 4-part series, each post containing an excerpt of Minoo Masani’s 1944 essay ‘Socialism Reconsidered.’ Here are the links to the earlier posts in the series– Minoo Masani | Socialism Reconsidered (1944) Minoo Masani | Th

**Summary:**

In the final excerpt from Minoo Masani's 1944 essay 'Socialism Reconsidered,' Masani examines the transition to socialism via non-violent mass action emphasizing small-scale production units, diverging from orthodox theory by prioritizing control over ownership of production instruments. He contrasts Marxist expropriation with Gandhi's 'trusteeship,' where property owners act as community trustees limited to a maximum income twelve times the minimum, enforced by moral persuasion and state pressure. Initially skeptical, Masani now endorses it under strict checks, rejecting laissez-faire, and advocates a mix of ownership forms—state, municipal, cooperatives, guilds, and private—with American-style checks and balances to preserve liberty. Trusteeship's value lies in its elasticity as a transition tool, reducing resistance by reforming antisocial property use without liquidation. Masani warns against dogmatic Marxism, noting Marx's own rejection of 'Marxists' and technological revolutions undreamt by him, urging socialists to transcend rigid 'isms'—including Marxism and Gandhianism—for a flexible path to a free, democratic, classless society guided by 'from each according to capacity, to each according to needs.' All isms risk becoming 'wasms' without constant re-examination.

**Key points:**

- Gandhi's trusteeship limits owner income to 12x the minimum via moral persuasion and state pressure, prioritizing control over ownership to achieve socialism without full expropriation.
- Transition to socialism should mix state ownership, cooperatives, guilds, and private trusteeship with checks and balances to safeguard liberty.
- Reject Marxist dogmatism, as Marx himself disavowed 'Marxists,' and embrace experimental improvisations amid technological changes.
- Socialists must re-examine assumptions beyond rigid ideologies to avoid all 'isms' becoming 'wasms' en route to a classless society.

**By Ujwal Batra**

* * *

*This is the final part of a 4-part series, each post containing an excerpt of Minoo Masani’s 1944 essay ‘Socialism Reconsidered.’ Here are the links to the earlier posts in the series–*

1.  [Minoo Masani | Socialism Reconsidered (1944)](https://spontaneousorder.in/socialism-reconsidered-1/)
    
2.  [Minoo Masani | The Assumptions of Marxism (1944)](https://spontaneousorder.in/assumptions-marxism/)
    
3.  [Minoo Masani | Who Owns the State? (1944)](https://spontaneousorder.in/masani-state/)
    

\*\*\*\*

**The Transition**

How is the transition from the present position to a socialist society to be achieved? The nature of the changes brought about by non-violent mass action aiming at the establishment of an economic system an appreciable part of which is made up of small-scale units of production must of necessity be different from those which are envisaged by orthodox socialist theory. One of these points of difference is in the attitude towards the ownership of property, which is the social relationship in that relationship. We have seen earlier that what matters most today is not ownership so much as control of the instruments of production and that one can have, as in Russia, a totally nationalised economy without achieving a classless society. The formula that Gandhiji has put before us, as against the expropriation of all private property, is what is known as the conception of ‘trusteeship’ of the owners of property in the interest of the community, to be brought about by moral persuasion plus State pressure. The maximum income permitted to such ‘trustees’ would not exceed twelve times the prevailing minimum.

A lot of scorn has been poured on this optimism which can envisage a change of heart on the part of the propertied class. I confess I have not been innocent in the past of adding my little share to it. After the awful mess that world capitalism has made, the idea of thinking of the capitalist as a ‘trustee’ does rather jar on one. Nor would there be any ground for hope if the capitalist were left a free agent under a system of laissez faire, with unfettered discretion and power to do as he pleased. But that is precisely what the capitalist ‘trustee’ of Gandhiji’s would *not* be free to do.

That is not to say that there is any reason to discard the method of nationalisation and to plump for that of ‘trusteeship’. All that follows from the new knowledge of the priorities as between control and ownership of property is that in the transition to a socialist society various forms of the relationship of men to things will have a part to play in different sectors of economic life – State ownership, municipal ownership, industrial and agricultural producers’ co-operatives or guilds or syndicates, and private ownership.

And the more checks and balances the better. We may usefully apply in the economic sphere the wisdom the Fathers of the American Constitution showed in devising a system of political checks and balances for the preservation of liberty. The value of the concept of ‘trusteeship’ is not in its finality but rather in its elasticity as a transition technique. It stresses the technical and social value of attempting to undo the wrong of the antisocial use of property before destroying or ‘liquidating’ the wrong-doer. If it does nothing else it atleast weakens resistance to social changes. It shows that new improvisations may not only be found necessary as we go along the path that leads to our goal but even desirable, and that dogmatism in respect of the institutional bases of society should give place to a willingness to experiment.

Karl Marx has made a great contribution to the development of political and economic thought. All schools of Socialist opinion have drunk deep at the rich fountain of his learning and it is only to be expected that he should leave a deep impress on history. But that is no reason for making of his contribution a dogma, as a churchdoes of the teaching of a religious prophet. That is the surest way to bury the spirit of a great man. “Technology has undergone a revolution undreamt of by Marx.” To make of Marx’s teaching a dogma is to set up a new religion as hide-bound as that Lenin denounced as “the opium of the people”. That Marx himself was not unaware of the dangers of such dogmatism is shown by the remark which he made towards the end of his life: “Thank God I am not a Marxist”!

Much less is it necessary or desirable for us today to be Marxists or, for that matter, Gandhians. Is it not enough that we are socialists, that our objective is still that of a free, democratic classless and international society, where the ruling principle will be: “From each according to his capacity, to each according to his needs”! If in the course of our striving to help in achieving that goal we find that Mahatma Gandhi or some other thinker has something to contribute which is as pertinent today as what Marx gave us was a century back, we should gladly pay tribute to him by incorporating it in our conception of socialism and of the means to achieve it.

A wag has said that nowadays “all isms have become wasms.” There is certainly a danger of this happening to socialism if those who are socialists do not constantly re-examine their assumptions and re-dedicate themselves to their ideal on the basis of newer and sounder foundations.

*(You can access the original piece [here](http://indianliberals.in/uploads/books/PDF_111_yv3wikMinoo%20Masani%2090). Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.)*

* * *

**About Ujwal Batra**

## The important thing is not to stop questioning

Original: https://www.spontaneousorder.in/p/curiosity-virtue

Author: Spontaneous Order

Published: 2016-07-09T20:13:55.000Z

Topics: indian-education, curiosity, education-reform, rote-learning

> “The important thing is to not stop questioning. Curiosity has its own reason for existence. One cannot help but be in awe when he contemplates the mysteries of eternity, of life, of the marvellous structure of reality. It is enough if one tries merely

**Summary:**

The post argues that curiosity is essential for effective learning but is stifled in Indian schools, where rote memorization and exam scores prioritize compliance over inquiry, as illustrated by the author's childhood experience questioning the relevance of historical events like Akbar's abolition of the Jizya Tax. Drawing on Einstein's quote and UC Davis research by Dr. Matthias Gruber, it explains that curiosity primes the brain to retain both intriguing and unrelated information, enhancing memory like a 'vortex'—suggesting teachers personalize lessons, e.g., math problems tied to student interests. Innate from infancy, curiosity creates a 'rich get richer' effect per Daniel Willingham, amplified in self-directed settings like Sugata Mitra's 1999 Hole in the Wall experiment, where slum children in New Delhi self-taught computers, even recording music within hours. To unleash potential, classrooms must foster curiosity via student-driven questioning (rewarding valuable questions over answers), tinkering with ideas/materials, and skepticism—challenging the 'chalk and talk' mindset that hampers creativity and critical thinking. Parents, teachers, and policymakers must promote these to counter entrenched rote learning.

**Key points:**

- Curiosity chemically primes the brain to better learn and remember both related and unrelated information, as shown in UC Davis experiments.
- Indian schools suppress curiosity by prioritizing exam marks, turning questioning into an inconvenience rather than a virtue.
- Foster curiosity in classrooms by rewarding student questions, encouraging tinkering, and promoting skepticism over rote memorization.
- Self-directed curiosity enables rapid learning, as in Sugata Mitra's Hole in the Wall experiments where children mastered computers independently.

**By Archit Puri**

* * *

“The important thing is to not stop questioning. Curiosity has its own reason for existence. One cannot help but be in awe when he contemplates the mysteries of eternity, of life, of the marvellous structure of reality. It is enough if one tries merely to comprehend a little of this mystery each day.”

**–Albert Einstein**

A little incident back when I was in 6th grade is clearly etched in my memory. Learning about Akbar’s political brilliance in abolishing the Jizya Tax, the 12-year old me asked my teacher why we needed to study a 400 year old event.  Of what relevance was it?

“To get marks, son”, she replied dryly.

I imagine that this is typical of the average Indian’s experience in school.  Instead of being rewarded and encouraged, curiosity is looked down upon. It is seen as an inconvenience, and little more. After all, curiosity is of little consequence in passing examinations or scoring well.

But curiosity is fundamental to the learning process, and it makes learning enjoyable. Curious students not only ask questions, but also actively seek out the answers. Without curiosity, Sir Isaac Newton would have never formulated the laws of physics, Alexander Fleming probably wouldn’t have discovered penicillin, and Marie Curie’s pioneering research on radioactivity may not exist.

Recently, researchers from the University of California, Davis conducted a series of experiments to discover what exactly goes on in the brain when our curiosity is aroused.

While it might be not seem like a surprise that we’re more likely to remember what we’ve learned when the subject matter intrigues us, it turns out that curiosity also helps us learn information we don’t consider all that interesting or important.

The researchers found that once the subjects’ curiosity had been piqued by the right question, they were better at learning and remembering completely unrelated information. One of the study’s co-authors, Dr. Matthias Gruber, explains that this is because curiosity puts the brain in a state that allows it to learn and retain any kind of information, like a vortex that sucks in what you are motivated to learn, and also everything around it. So if a teacher is able to arouse students’ curiosity about something they’re naturally motivated to learn, they’ll be better prepared to learn things that they would normally consider boring or difficult. For instance, if a student struggles with math, personalizing math problems to match their specific interests rather than using generic textbook questions could help them better remember how to go about solving similar math problems in the future.

Curiosity starts with the itch to explore. A 1964 study found that babies as young as two months old when presented with different patterns will show a marked preference for the unfamiliar ones. The instinct to explore grows into an instinct for inquiry. Sometime after their first birthday, children start to point at things, looking up at their parent as they do so. One of the main reasons babies point is to signal interest, to say, “I want to know about that – what is it?” Before they are able to speak, they are asking a question with their finger.

By the time children from curious households go to school, they have a head start on their peers. Having absorbed more information from their parents and care-givers, they know more, which means they find it easier to learn more. As the educational psychologist Daniel Willingham says, when it comes to learning, there’s a powerful “rich get richer” effect; the curious kids get more return from the same effort than kids with a lower base of knowledge. That makes learning more satisfying for them, which in turn feeds their curiosity.

In 1999, Professor Sugata Mitra embedded a computer in a wall in a slum in New Delhi, connected it to high speed internet and left it there. Kids in the area, mesmerized by this technology, learn to use computers by themselves.

Over time his work has become famously referred to as the [“Hole in the Wall Experiment.”](http://www.ted.com/talks/sugata_mitra_shows_how_kids_teach_themselves?language=en) He repeated this experiment in other parts of India and discovered how kids learn what they want to do.

His online videos of kids interacting with these computers have become the source of considerable discussion with one showing children recording music and playing it back for others only four hours after seeing the computer for the first time.

This little anecdote beautifully gives us an idea about the power of curiosity and the potential it has in Indian education.

**Curiosity in the Classroom**

But how can decades of a deeply entrenched system be unbound, and the potential of the people at its centre unleashed through curiosity?

Curiosity can be cultivated by particular kinds of classroom environments.  Classrooms should be places where “curiosity flourishes” and in which dialogue and questioning is allowed to move in any direction, driven by students’ questioning. Instead of always being graded on their answers, students should be rewarded for asking questions that add value to the topic being studied.  
Students should also be encouraged to tinker i.e. to constructively play with feelings, concepts, ideas, and materials. Tinkering can stimulate curiosity and lead to innovative outcomes like creating a new widget, essay, blog article, poem, science experiment, service, or product.

Scepticism as a virtue should be promoted in school students. The term sceptic literally means “to inquire” or “to look around.” A sceptic requires additional evidence before accepting someone’s claims as true. He or she is willing to challenge the status quo with open-minded, deep questioning. Galileo was a sceptic. So was Steve Jobs.

Our “chalk and talk” educational mindset, based on rote memorization, has stifled creativity and critical thinking; and the need for such initiatives has to be understood by parents, teachers, policy makers and other stakeholders in the education system of our country.

\*\*\*

*(Archit Puri is a business student by qualification but a plethora of other things by admission. He has diversified interests like behavioural economics, game theory, culinary arts, beer, startups, game of thrones and others omitted due to lack of space.)*

* * *

**About Archit Puri**

Archit Puri is a public policy researcher, freelance writer, former social entrepreneur, psychology enthusiast and tired of labels. He slogs as a Senior Associate at CCS to fund his daily bread. He tweets @bantofu

## Minoo Masani | Who Owns the State? (1944)

Original: https://www.spontaneousorder.in/p/masani-state

Author: Spontaneous Order

Published: 2016-07-07T13:30:06.000Z

Topics: socialism-critique, gandhian-nonviolence, economic-decentralization, individual-liberty

> This is the third part of a 4-part series. You can read the earlier posts in the series here– Minoo Masani | Socialism Reconsidered (1944) Minoo Masani | The Assumptions of Marxism (1944) **** Who Owns the State? That is the question of questions. Willi

**Summary:**

Minoo Masani argues that the paramount question is 'Who owns the State?'—whether people own it or it owns them—warning that a collectivized economy under socialism endangers individual liberty and political democracy, which must be central to any true socialist vision. He insists socialism requires 'clean means' rejecting communist tactics like deceit, murder, class hatred, coups, and Stalinist liquidations, emphasizing intellectual integrity and truth. In undemocratic contexts like India, lacking even 'glimmerings of democracy,' Masani advocates Gandhi's contributions: mass civil resistance as a dynamic, non-violent method that preserves a democratic climate and habits, avoiding the degeneration of failed violent insurrections, as seen in Russia. Gandhi's approach shows real democracy and socialism demand a non-violent society. Additionally, Masani endorses Gandhi's economic decentralization—not as anti-machine or 'back to villages,' but a protest against machinery concentrating power and riches, quoting Gandhi's support for nationalizing key industries, village electricity, and the spinning wheel as machinery, while criticizing capitalist machine use. This aligns with socialist goals by countering undemocratic industrial centralization.

**Key points:**

- Socialism must prioritize individual liberty and political democracy as core elements, or risk state ownership of people.
- Repudiate violent communist means; pursue socialism only through clean, non-violent methods like Gandhi's mass civil resistance in undemocratic settings.
- Gandhi's civil resistance maintains democratic habits even against undemocratic forces, preventing the violence trap seen in Russia.
- Adopt Gandhi's economic decentralization to prevent machinery from concentrating power and riches, supporting key industry nationalization and village electrification.

**By Ujwal Batra**

* * *

*This is the third part of a 4-part series. You can read the earlier posts in the series here–*

1.  [Minoo Masani | Socialism Reconsidered (1944)](https://spontaneousorder.in/socialism-reconsidered-1/)
    
2.  [Minoo Masani | The Assumptions of Marxism (1944)](https://spontaneousorder.in/assumptions-marxism/)
    

\*\*\*\*

**Who Owns the State?**

That is the question of questions. William H. Chamberlin has, after a decade of personal examination of Soviet life, written:

> “A question that far transcends in importance the precise point at which a line may be drawn between public and private enterprise in economic life is whether the people are to own the State or the Sate is to own the people.”(A False Utopia).

Precisely because collectivised economy endangers individual liberty and political democracy, these have to be placed right in the centre of the picture of socialism in the years to come. These are the danger points of socialism. Respect for the human personality is likely to be the field on which the battles of the second half of the twentieth century will rage thickest, and no one has a right to be called a socialist who does not rally to the defence of the Rights of Man.

**Ends and Means**

If individual liberty and political democracy are as essential a part of socialism as economic equality, it is necessary that the methods of achieving socialism should fit the end. This calls for a repudiation of the Communist slogan that “the end justifies the means”, which more specifically means that in practice everything – lying, deceit, murder – is justified so long as it helps the Communists Party. It also calls for a repudiation of the methods of ruthless class hatred and of the military coup d’etat, and even more of the methods of the ‘liquidation’ of opposition and of the falsification of history resorted to by Stalin. Socialism can only be achieved by clean means and with clean hands. Justice has been well defined as ‘Truth in action”. Without intellectual integrity and adherence to truth, we shall get lost in the woods.

Does this mean that we must fall back into the ranks of the Social Democrats and limit ourselves to legal and constitutional methods alone? If we were in a genuinely democratic country like the Scandinavian States, I would probably answer ‘Yes.’ In so doing, I would only be following Karl Marx, who conceded the possibility of democratic countries like England and America and perhaps Holland achieving a socialist society through purely constitutional changes. But the world by and large is not democratic, and we in this country have not even the glimmerings of democracy and little individual liberty.

**New Weapons**

The problem for peoples placed like us therefore appears to be one of devising a method of social change which is dynamic and which yet eschews the violence of a coup d’etat and of the dictatorship which must inevitably follow. It is here, I believe, that Mahatma Gandhi has made certain contributions to the development of political thought which every socialist, who wishes to enrich his armory and to devise ever more efficient weapons with which to bring about the social changes which he desires, must carefully study.

Gandhiji’s teachings do not constitute a well-knit system of economic thought, nor need we accept them indiscriminately, but it is pertinent to note that Gandhiji has always stressed the importance of economic equality. “The whole of this (constructive) programme,” he has said, “will be a structure on sand if it is not built on the solid foundation of economic equality.”

There are certain points on which Gandhiji has, I believe, something significant to contribute in so far as the means to achieve our end are concerned. The first of these contributions is the forging of the weapon of mass civil resistance. That form of mass action is limited, not by legalistic formulas or constitutional niceties but by insistence on clean and non-violent methods. The main virtue of this method is not so much that it does not involve a physical extermination of the opponents of change, though that too is in itself valuable, but that it makes it possible to maintain a democratic climate even when contending with undemocratic forces. It shows an understanding of the great truth that democracy is not only a system, but also a habit. Civil resistance is a method which, even when it fails on a particular occasion, avoids, as we know of our own experience, the degeneration and demoralisation that sets in when a violent insurrection is suppressed. If it is once agreed that the violent seizure of power is likely to lead to violence becoming a habit, with the result that the very object for which the revolution is made may get lost on the way, as in Russia, then it is difficult to resist the conclusion that the Gandhian way is on this point better suited to the needs of a country where the ballot box is not available and where bullets must be eschewed. The socialist has long argued that real democracy is impossible without socialism. Now Gandhiji points out that neither democracy nor socialism is possible in any but a non-violent society.

**Decentralised Economy**

There is another important point to which Gandhiji has called attention. That is the stress laid by him on the decentralisation of economy. This part of his teaching has often been labelled “Back to the Villages,” and has been subjected to a great deal of sharp criticism.

What attitude should Socialists adopt towards Gandhiji’s attitude on this question? Should we regard him as an outmoded crank, fiercely opposed to all machinery and attempting to take us back to a dreary past? If this were really so, then how can we explain Gandhiji’s support to the nationalisation of key industries? “What, I object to is the craze of machinery, not machinery as such,” Gandhji said. “The spinning wheel is itself an exquisite piece of machinery.” So again, writing in the *Harijan* of 22nd June, 1935, he has said: “If we could have electricity in every village home, I shall not mind villagers plying their implements and tools with electricity.”

“I consider it a sin and injustice to use machinery for the purpose of concentrating power and riches in the hands of the few. Today the machine is used in this way,” Gandhiji wrote in *NavaJivan* on 20th September, 1925. What socialist can disagree with a word of this?

It would therefore be more to the point to regard Gandhiji’s lack of sympathy with large-scale mechanisation and industrialisation as partly a protest against the capitalist use of the machine and partly a corrective to a tendency which even Western sociologists are now coming to realise is anti-social and undemocratic in its results.

*(You can access the original piece [here](http://indianliberals.in/uploads/books/PDF_111_yv3wikMinoo%20Masani%2090). Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.)*

* * *

**About Ujwal Batra**

## Minoo Masani | The Assumptions of Marxism (1944)

Original: https://www.spontaneousorder.in/p/assumptions-marxism

Author: Spontaneous Order

Published: 2016-06-30T17:30:57.000Z

Topics: marxism-critique, socialism, liberty, totalitarianism

> (This is the second part of a series of posts, from Minoo Masani’s classic 1944 essay ‘Socialism Reconsidered.’ The first part of the series can be read here: Minoo Masani | Socialism Reconsidered (1944)) Via Dictatorship? The second Marxist assumpt

**Summary:**

Minoo Masani critiques three key Marxist assumptions in his 1944 essay. First, the Dictatorship of the Proletariat, meant to wither away into a classless society, has instead entrenched absolute power in Russia, as evidenced by the Soviet government's unyielding control and liquidation of opponents in the lakhs over six to seven years, defying Lord Acton's warning that 'power tends to corrupt and absolute power corrupts absolutely.' Second, appealing to workers' collective selfishness and class hatred fosters exploitation, as seen in British Labour's complicity in imperialism. Third, socialism is not the inevitable successor to capitalism; instead, a 'managerial revolution' leading to totalitarianism—Fascism, Hitlerism, or Stalinism—is more likely, given humanity's unreadiness to manage complex industrial states without tyranny. Masani rejects socialism as the sole alternative, echoing Hayek's 'Road to Serfdom,' and advocates a redefined socialism combining liberty and planned economy. Nationalisation is inevitable but secondary to control; the focus must shift to preventing a totalitarian polity from accompanying collectivised economy, insisting on both freedom and planning as true socialism.

**Key points:**

- Marxist dictatorship does not wither away, as proven by Soviet Russia's ongoing repression and purges.
- Appeals to class selfishness perpetuate injustice, like British workers supporting imperialism via Labour.
- Capitalism's decline likely leads to totalitarianism, not socialism, per Burnham's managerial revolution.
- True socialism requires liberty alongside planned economy, redefining means beyond nationalisation to avert serfdom.

**By Ujwal Batra**

* * *

*(This is the second part of a series of posts, from Minoo Masani’s classic 1944 essay ‘Socialism Reconsidered.’ The first part of the series can be read here: [Minoo Masani | Socialism Reconsidered (1944)](https://spontaneousorder.in/socialism-reconsidered-1/))*

**Via Dictatorship?**

The second Marxist assumption that needs reviewing is that the Dictatorship of the Proletariat (that is, of the Party on behalf of the Proletariat) is a possible and indeed a necessary transition state to Socialism. The theory was that having served its purpose the dictatorship would evaporate, and indeed, as Lenin following Engels put it: “The State will then wither away.”

What was overlooked was the fact established through history that, in the words of Lord Acton: “Power tends to corrupt and absolute power corrupts absolutely.” In Russia, where it is claimed by the Soviet Government that a classless society has already been achieved, that Government shows not the slightest tendency to relax its complete strangle-hold on individual liberty of every kind, much less to ‘wither away’! Nor is there any indication that in the years to come any democratisation or liberalisation is likely to come.

Marxists often refer to socialist thought before Marx as Utopian. One wonders whether anything can be more Utopian that the touching faith of communists that a dictatorship like that in Russia, which has not hesitated to ‘liquidate’ its political opponents in the Party ranks in lakhs for the past six or seven years in a bloody struggle for power, is going one fine day to awaken to the fact that it has served its historical purpose and must now liquidate the G.P.U. and all the coercive apparatus of the State which must then ‘wither away’! This makes Max Eastman indulge in the quip: “Marx described as Utopian the conception that good men can bring about socialism. Stalinists actually believe that bad men can be relied upon to do so.”

A third Marxist assumption that appears to be unable to stand a review of the past two decades is that socialism can be achieved by appealing to the collective selfishness of the working class and its collective hatred for the property-owning classes. The fact of the clash of interest between different classes in society is, of course obvious. But unfortunately the appeal to the collective selfishness of the workers leads quite as often to their becoming a party to exploitation and injustice. We have already seen how the British working class, being given a minor share in the profits of the Empire, becomes through the Labour Party a party to the perpetuation of imperialism, which is the very antithesis of a world socialist order.

Besides, can one ever get to a superior society based on co-operation and love by appealing to selfishness and hatred? The whole complex of ends and means is here involved. Trotsky, one of the outstanding Marxists of his times, called the class struggle “the law of all laws.” But science tells us that there is no law of all laws.

**The Only Alternative**

Yet another belief – and one held till now by all socialists – is that socialism is the only alternative to capitalism. I must confess I held this view myself till round about 1937 or 1938. You had somehow to destroy capitalism and then, as day follows night, socialism must dawn. But must it? That old type capitalism is played out is obvious. But will socialism inevitably follow or is there not a third ‘something’ that is likely to emerge? That is a question now being asked by a growing school of thinkers. It is best posed and answered in Burnham’s Managerial Revolution. “Marxists,” says he, “assert, in fact, the following syllogism: since capitalism is not going to last (which we have granted) and since socialism is the only alternative to capitalism, therefore socialism is going to come. The syllogism is perfectly valid but the conclusion is not necessarily true, unless the second premise is true and that is just the problem in dispute.”

Is it not likely then that the breakdown of capitalism will be followed, not by socialism, but by what may be called – to quote Molotov, according to our ‘taste’ – Totalitarian or Fascism or Hitlerism or Stalinism? What makes this probable is that the mass of humanity is not yet equipped intellectually to control a highly organised industrial state machine. From this it does not follow that there is any truth in that old reactionary slogan: You can’t change human nature”! That is nonsense. Marx hits the nail on the head when he says that “all history is nothing but a progressive transformation of human nature. “Human nature has been and is changing all the time.”

Is there no answer then to Professor Hayek’s challenging thesis that the way of total planning is the Road to Serfdom? Must one abandon hope and compromise with reality either by accepting one or other kind of totalitarianism or by reconciling oneself to a maintenance of the muddle and anarchy and waste of old type capitalism? Is that really the choice before each of us? To me it seems that to accept this choice would be for the human spirit to accept defeat. It would be to jettison a noble ideal because it transpires that it does appear to be just round the corner. It is to resort to the disastrous logic of a choice of “the lesser evil.” It is not by an acceptance of such a choice that human beings have led their fellows throughout history to heights not till then achieved. To struggle for larger social aims, whether they are achievable in our own life time or not, is part of an evolved conception of living – of what the ancient Greeks called “the good life.” As against the logic of those who would surrender liberty for the sake of planned economy, I would prefer that of the man who remarked: “The difficult I shall attempt immediately; the impossible a little later.”

In the context of today, only he is a socialist who insists on having both liberty and planned economy. *For all such it has become necessary to reconsider the assumptions on which orthodox socialism has so far been based and redefine the means by which one may hope to achieve the end.*

The questioning of the four assumptions of Marxism that we have found necessary amounts perhaps to nothing more than a shifting of the emphasis which the socialist must lay in the remaining period of the twentieth century. Looked at in this light, the nationalisation or State ownership of property needs definitely to be put in its proper place. Now that it is seen that what matters is not ownership so much as control of property, nationalisation is no longer the kernel of the matter. Besides, it is coming whether we want it or not. Economic necessities are driving inexorably towards it. The thing is to be ready to face its implications in the political and social sphere, to make sure that collectivised economy will not entail a totalitarian polity.

*(You can access the original piece [here](http://indianliberals.in/uploads/books/PDF_111_yv3wikMinoo%20Masani%2090). Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.)*

* * *

**About Ujwal Batra**

## Lack of paradigm shift undermines New Education Policy

Original: https://www.spontaneousorder.in/p/nep-paradigm

Author: Spontaneous Order

Published: 2016-06-29T12:12:11.000Z

Topics: education-policy, rte-act, private-schools, school-choice

> The TSR Subramaniam Committee’s report on National Policy on Education, 2016 was leaked to the media last week. The 230-page report is a detailed account of the various aspects of education in India and recommendations to make them more effective and be

**Summary:**

The TSR Subramaniam Committee’s 230-page leaked report on the National Education Policy 2016 disappoints by failing to deliver a paradigm shift in India's education sector, despite high expectations since the 1986 policy. While it commendably emphasizes integrating technology into pedagogy, promoting MOOCs and ODL for adult learners, teacher training, a special tribunal for accountability, and shifting to learning outcomes over mere school proliferation—criticizing under-enrolled schools with 20 or fewer students—the report neglects immediate crises. It minimally addresses Section 12(1)(c) of the RTE Act, dismissing reimbursement delays to private schools as 'work in progress' without mandating direct benefit transfers or state directives. The document exhibits government bias, deriding private institutions as 'teaching shops,' ignores their growing role, omits public-private partnerships, and proposes expanding centralization via an Indian Education Service, even as other sectors liberalize. From a classical-liberal viewpoint, this entrenches government as provider rather than enabler, stifling innovation and choice in a competitive market. The report critiques past failures like corruption and rote learning but bases its deficient approach on reluctance to empower parental choice over state monopoly.

**Key points:**

- The report prioritizes long-term tech integration and accountability measures like tribunals and learning outcomes but ignores immediate RTE reimbursement issues for private schools.
- It dismisses private education's role, labeling institutions 'teaching shops,' and proposes more centralization through an Indian Education Service.
- No recommendations for direct benefit transfers, public-private partnerships, or reducing government monopoly to foster market competition and innovation.
- Successive governments' failures in corruption and quality are noted, yet no paradigm shift to treat education as a competitive service rather than state provision.

**By Divya Agarwal**

* * *

The TSR Subramaniam Committee’s report on National Policy on Education, 2016 was leaked to the media last week. The 230-page report is a detailed account of the various aspects of education in India and recommendations to make them more effective and beneficial to students. The policy had long been awaited with bated breath by educationalists, the teaching fraternity, policy advocates and others involved in the education sector as a possible instrument of positive change. The last National Policy on Education was released in 1986 and, needless to say, the education sector has come a long way since then. Major advances in technology and a shift in the objectives of education have brought in crucial developments that need to be assimilated into our nation-wide policies. Unfortunately, the National Policy on Education, 2016, has failed to achieve these rather obvious objectives.

In its defence, the Committee did lay immense emphasis on the need to integrate technology into pedagogy as well as data management in the sector. It has even spoken of instituting Open & Distance Learning (ODL) and Massive Open Online Courses (MOOCs) to reach adult learners or students who may be engaged in jobs and do not have the time to attend a full-time university course. In addition, capacity building in the form of training teachers in the use of technology and improving the teaching courses available so as to attract better personnel all seem steps in the right direction. The committee has also taken a grave view of the lack of accountability in the current system. An outstanding suggestion is the setting up of a special tribunal to deal with service and administrative matters. This effectively speeds up the process of resolving disputes and ensures that schools and more importantly, students, are not left hanging in limbo. Another welcome recommendation is the shift to learning outcomes as an indicator of development in education. The report has rightly berated the fact that governmental efforts up until this point have been concentrated on establishing more and more schools when there are a multitude of schools running with 20 students or less. It has been recommended that learning outcomes become a factor in recognition of schools, and teacher and principal promotions.

What is important to note here is that all these goals that the committee has set out can only be accomplished some way into the future. The report glaringly lacks solutions to the immediate problems of the education sector. The matter of Section 12(1)(c) of the RTE Act, for example, has been given minimal weightage with the report only making a general recommendation to continue with the law set down in the clause. The widespread problem of low or no reimbursements to private schools for admissions under this section has been passed off as a ‘work in progress’. Directions to state governments to rectify this have not even made it to the recommendations! The model of direct beneficiary transfers, so favoured by the central government in various schemes, has managed to escape the thoughts of the Committee. Furthermore, the report has focused exclusively on the development and improvement of the government schooling system without any reforms touching upon the growing private sector in education. In fact, the government bias against private educational institutions clearly comes across as they are disparagingly referred to as ‘teaching shops’. The committee, instead of limiting the role of the government, has sought to make it even greater by the introduction of the Indian Education Service. Centralization of power has already caused government schools to lag miles behind private institutions. In times when the government is opening up various sectors and markets up to even foreign entities, it is a pity that education is being held so close to its chest as to stifle progress and innovation. Public private partnerships, which some states have already begun considering, barely received a mention by the esteemed Committee.

The Committee has made a brave attempt to call out the successive governments in failing to fix the systemic errors in the education sector such as corruption, a lack of accountability, the undue importance of rote learning, the insignificance of quality of education etc. Despite this, it has wholly ignored the need for a paradigm shift in the field of education from being a government-provided social service to a competitive market fostering innovation. The very fact that the prominence of the burgeoning private school sector has been virtually ignored in the report makes it a deficient approach, based not in reality or research, but the government’s unwillingness to let the people have an education of their choice.

* * *

**About Divya Agarwal**

## Brexit: Life is Nasty, British and Short

Original: https://www.spontaneousorder.in/p/brexit-good

Author: Spontaneous Order

Published: 2016-06-28T14:21:52.000Z

Topics: brexit, sovereignty, decentralization, free-trade

> Life, as it turns out, is too nasty, British and short to stay in the European Union.[1] On Thursday, 23 June, 2016 Britain decided, through a referendum, to leave the EU. This likely marks the beginning of the end of the European Union—the political an

**Summary:**

Britain's Brexit referendum on June 23, 2016, marks the beginning of the European Union's decline, an inevitable trend starting with Britain's 1992 opt-out from the Euro and its falling share of exports to EU countries, now dwarfed by non-EU trade. The EU has become a 'pointless middleman' for policies set by international bodies. From a classical-liberal view, sovereignty is a core virtue, as power is better decentralized than centralized in a distant bureaucracy of 55,000 faceless officials dictating to diverse communities. The Leave campaign rightly emphasized autonomy, granting moral legitimacy to democratic decisions absent in EU rule. While the Stay camp assumes Britons incapable of self-governance, sovereignty ensures fairer processes and fosters economic independence; smaller states, resource-poor, are incentivized toward liberal free-trade frameworks. The EU's initial free-trade benefits have waned: it blocks bilateral deals like a UK-India FTA due to collective negotiation, yet Britain can access the single market like three non-EU countries. Post-Brexit migration arrangements are feasible given historic ties. Long-term, Brexit votes for fairer institutions, freedom against centralization, promising prosperity—echoing Hayek's faith in freedom's net good.

**Key points:**

- Brexit restores British sovereignty, enabling autonomous policy decisions free from EU bureaucracy.
- EU centralization undermines democratic legitimacy, while decentralization ensures fairer governance.
- Smaller sovereign states have stronger incentives for free trade and liberal economic policies.
- Britain can access the EU single market without membership and negotiate independent FTAs, such as with India.
- Brexit prioritizes long-term freedom and prosperity over short-term uncertainties.

**By Ujwal Batra**

* * *

Life, as it turns out, is too nasty, British and short to stay in the European Union.\[1\]

On Thursday, 23 June, 2016 Britain decided, through a referendum, to leave the EU. This likely marks the beginning of the end of the European Union—the political and economic landscape in Europe will change significantly in the years to come and in our lifetimes.

The development is, in one sense, inevitable. The European Union’s influence has been in steady but definite decline in the last many decades—Britain’s exit from the EU likely began when Britain opted out of the Euro for its own currency in 1992. Britain’s share in exports to the countries in EU has been steadily declining–and continues to sink–with its share of exports to non-EU countries making the bulk of the share now. Even in deciding the policy issues among the EU states, the EU has become a ‘pointless middleman’, and the policies, norms and standards are effectively decided by a plethora of international organisations and procedures. \[2\]

With the European Union steadily losing its sway, there is a lot of merit in the leave camp’s insistence on sovereignty—leaving the EU will allow Britain to enjoy a degree of autonomy and sovereignty in deciding its affairs, as any reasonable nation-state should possess.

Sovereignty is a virtue—a definite, unmistakable virtue. Power is better exercised when it is decentralised instead of resting in one centralised authority.  And that moral fact alone lends tremendous force and credence to what transpired last Thursday. Sovereignty grants a certain moral legitimacy to the decisions that are made in a democracy, something that is missing when a significant chunk of the nation’s policies are decided by a bureaucracy far removed from the country and its people. And that is what the European Union essentially is—a massive bureaucracy, in Matt Kibbe’s words, run by “55,000 grey-suited faceless grey-suited bureaucrats, constantly putting out dictates, rules and regulations governing how vastly different communities across Europe have to live their lives.”

The assumption from the stay camp seems to be that the British people are incapable of deciding their own affairs. While sovereignty does not by itself guarantee optimal outcomes at all times and in all instances, *it does guarantee a fairer decision making process.* Indeed, as Dan Sanchez points out [here](https://fee.org/articles/brexit-wins-why-that-s-great-news-for-europe-too/), “political independence fosters economic independence.” Smaller states, which often lack significantly in resources, cannot afford to be economically isolated and possess a far greater incentive in having a liberal policy framework—one that encourages free trade and enterprise.

And it is not that the European Union has always produced the most optimal policies. In the initial few decades EU likely made sense, encouraging free trade and movement across its members. But it doesn’t make as much sense anymore. Consider, for instance, that the EU negotiates on the behalf of the entire Union—it Britain wants to have a free trade pact with India, it cannot do so unless all the other members are on board. Indeed, a free-trade agreement between Britain and India has precisely not worked out in the last 9 years because of this reason. Much has been said of the benefits of having access to a ‘single-market’ as part of being in the Union. It is worth noting that Britain can still secure access to the single market—3 countries are a part of the single market despite not being a part of the EU.

There is also the point about migration and immigration—many fear that free movement within EU will be significantly hampered. It is unclear at this point what precisely the impact on immigration would be. It might well be the case that Britain works out an arrangement with the EU to allow for free migration within the EU, and opts for a policy that will be to open to migration outside the EU states. Given that Britain has been has had extensive ties with the European Union in its many decades of association, it is very likely that they will be able to make some arrangements to allow for free movement and other benefits.  As Ronald Smith has remarked, “Given Britain’s historic, open and global outlook, it is likely that a majority of the British would opt for a policy not far from where we are now.”

We can debate endlessly about the immediate economic and social consequences of Brexit with compelling arguments from both sides. But what matters more fundamentally are not the immediate consequences, but the long-term impact of the referendum. In my estimate, Britain has voted for a fairer and more inclusive set of institutions that will chart the course of the country toward a more prosperous future. Britain has voted for freedom and against centralisation of power, and that should give liberals cause for cheer.

I will end with a quote by F A Hayek, which captures the essence of it—

“Our faith in freedom does not rest on the foreseeable results in particular circumstances, but on the belief that it will, on balance, release more forces for the good than for the bad … Freedom granted only when it is known beforehand that its effects will be beneficial is not freedom.”

\*\*\*

For a counter-view published on this blog, click here: [Brexit: Brace Yourself, Winter is Coming by Archit Puri](https://spontaneousorder.in/brexit-geopolitics/)

 \[1\] A play on Thomas Hobbes’ famous expression, ‘nasty, brutish and short’ describing the original state of mankind. Here is the entire quote: “No arts, no letters, no society; and which is worst of all, continual fear and danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short.”

\[2\] [The Liberal Case for ‘Leave’ by Ronald Smith](http://www.adamsmith.org/the-liberal-case-for-leave/)

\[3\] [Brexit Wins: Why That’s Great News for Europe, Too](Brexit%20Wins:%20Why%20That’s%20Great%20News%20for%20Europe,%20Too)

\[4\] [Today, I will Leave the EU (and enter the World)](https://fee.org/articles/today-i-will-vote-to-leave-the-eu-and-enter-the-world/)

*(The author, Ujwal Batra, works in CCS Academy and is the editor of the blog [Spontaneous Order.](https://spontaneousorder.in/) He loves ancient Greek philosophers, tea, reading, writing and poetry. You can reach him at ujwal@ccs.in)*

Similar articles : [https://spontaneousorder.in/freedom-of-movement/](https://spontaneousorder.in/freedom-of-movement/)

* * *

**About Ujwal Batra**

## Minoo Masani | Socialism Reconsidered (1944)

Original: https://www.spontaneousorder.in/p/socialism-reconsidered-1

Author: Spontaneous Order

Published: 2016-06-23T18:25:12.000Z

Topics: socialism-critique, nationalization, political-democracy, liberalism

> Editor’s Note: Over the course of the next few weeks, we will be publishing Minoo Masani’s classic essay ‘Socialism Reconsidered.’ This is the first part of a series of posts. Minoo Masani was a liberal, politician and a member of the Constituent

**Summary:**

Minoo Masani, reflecting on 25 years since World War I and the Russian Revolution, critiques his former socialist beliefs that blamed capitalism for all societal ills—poverty, women's subjugation, prostitution, illiteracy, and wars—and promised utopia through abolishing private property and nationalizing production. All socialist schools agreed socialism would create a classless society via 'From each according to his capacity, to each according to his needs,' with social democrats favoring ballot-box change and communists revolution followed by proletarian dictatorship. However, experience shows nationalization without political democracy fails to deliver economic democracy, instead birthing a bureaucratic elite that controls state property, socializes production but not distribution, and enforces obedience under threat of starvation, as Trotsky observed in Soviet Russia. Masani notes plutocracy yields to bureaucracy, not socialism, and cites India's state-run railways as non-socialist. He praises Scandinavian countries like Sweden, Norway, Denmark, and Finland for extending democracy economically without full nationalization, positioning them farthest toward socialism by 1939. From a classical-liberal viewpoint, political control over property matters more than legal ownership, challenging Marxism's core assumptions.

**Key points:**

- Socialist assumptions held that abolishing capitalism via nationalization would end all ills and create a classless society, but 25 years of experience disproves this.
- Nationalization unaccompanied by political democracy leads to a new bureaucratic class exploiting workers more completely than capitalists.
- In Soviet Russia, state ownership enabled total control, replacing 'who does not work shall not eat' with 'who does not obey shall not eat.'
- Scandinavian countries advanced economic democracy without full nationalization, contrasting Marxist failures.
- Political control of property, not mere legal ownership, determines true socialism or exploitation.

**By Ujwal Batra**

* * *

***Editor’s Note:** Over the course of the next few weeks, we will be publishing Minoo Masani’s classic essay ‘Socialism Reconsidered.’ **This is the first part of a series of posts.** Minoo Masani was a liberal, politician and a member of the Constituent Assembly that drafted the Constitution. Masani started his intellectual journey as a socialist but after Stalin’s purges and takeover of Eastern Europe, he moved away from Socialism and became a supporter of free market economics and liberalism. This post is representative of his thinking at the time, when he was ‘reconsidering’ and moving away from Socialism.*

Oscar Wilde has defined experience as the name everyone gives to their mistakes. Any effort by a socialist to review Socialism in the light of, say, the past twenty-five years’ experience must therefore to a certain extent involve self-criticism.

But why twenty-five years? Well, twenty-five years seems to me to be an appropriate period in the light of which to review one’s approach to, and belief in, socialism, because it is twenty-five years since the end of the last war, when people everywhere swore “Never Again”; it is also twenty-five since the Russian Revolution.

Looking back across the last two decades, one recalls some fundamental assumptions on which one based one’s faith in Socialism as the solvent of almost all the world’s ills. Those assumptions were that Man was essentially good, but that the System (with a capital S) was bad, Capitalism, with its anarchy, its creed of “Each for himself, and the devil take the hindmost,” its insistence on the profit motive, its free competition between the plutocrat on the one hand and helpless propertyless men, women and children on the other, appeared to be the enemy – the one obstacle between Man and a Happy Universe. It was Capitalism (with the accent on the second syllable) that kept the mass of toilers poor, it was Capitalism that kept women in a position of economic dependence and social inferiority, it was Capitalism that was responsible for prostitution and other social evils, it was Capitalism that kept children uneducated and ignorant, above all it was Capitalism that made repeated wars inevitable. You had but to abolish Capitalism and replace it with Socialism, and all the ills of the human race would evaporate.

All you had to do to overthrow the capitalist system and to extend democracy to the economic sphere was to abolish private property and to nationalise the instruments of production, distribution and exchange. The basis of the classless society was to be the slogan: “From each according to his capacity, to each according to his needs.” Then the whole community would be like a single family and live happily ever after! Lenin described a socialist society as a society of “the free and the equal,” where a man’s personality would have the fullest liberty to flower. These, let me stress, were the assumptions held by all schools of socialist thought. The Social Democrat insisted that in advanced, democratic countries like England and France, this transformation could be worked, not by bullets, but through the ballot box. The Communist argued that such a change could only be worked by an armed insurrection, as in Russia, by a coup d’etat and a seizure of power by the revolutionary party (namely, his own) on behalf of the Proletariat. After a short period of the Dictatorship of the Proletariat, the classless society would be established, the State would wither away and you would find yourself in the Socialist Society. It was common ground to all schools of thought that the only thing that could replace Capitalism was Socialism. It was also common ground that Socialism was an international creed and would result in world union and universal brotherhood.

There is a refreshing contrast to this rather depressing record when one turns to the record of the Socialists in certain small countries – particularly the Scandinavian group consisting of Sweden, Norway, Denmark and Finland. There has in these countries been a steady extension of democracy to the economic and social spheres which has not secured the notice and appreciation it deserves. If I were asked which countries were the farthest along the road to a Socialist Society when the war broke out in 1939, I would point to these countries.

**Nationlisation – A Sovereign Cure**

There are at least four major assumptions of Marxism, – there may be more – which, I believe, need to be reconsidered. The first of these is that the abolition of private property and its nationalisation will automatically bring in economic democracy and a classless society. It has not been shown in Russia that it need do nothing of the sort. What was not adequately appreciated by socialist thinkers of earlier times was that, while nationalised industry may belong to the State, the State itself may not belong to the people; that in the process of achieving collectivised economy, political democracy may get lost on the way.

It is now seen that it is possible with nationalised economy for a new class to arise which monopolises the control, and even a share in the ownership, of national property. Instead of owning individual factories and workshops and mines, as members of the capitalist class do, this class of bureaucrats and managers owns shares in all the factories and mines, as members of the capitalists class do, this class of bureaucrats and managers owns shares in all the factories and mines belonging to the State. The workers get their wages as before, but in place of private capitalists the dividends are now drawn in the form of interest on State bonds by the new privileged class. Production is socialised, but not distribution. Plutocracy is replaced, not by socialism, but by bureaucracy. The oppression of the masses is even more complete because, as Trotsky was to live to see, “in a country where the sole employer is the State, opposition means death by slow starvation. The old principle : “Who does not work shall not eat”, has been replaced by a new one: “who does not obey shall not eat.”

Nationalisation of industry *unaccompanied* by *political democracy* leads therefore to a different form of exploitation. It is not more and more realised that what matters most is not so much legal ownership of property as political control over it. If this were not so, the existing State ownership and management of railways in India would have to be accepted as socialist!

*(You can access the original piece [here](http://indianliberals.in/uploads/books/PDF_111_yv3wikMinoo%20Masani%2090). Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.)*

* * *

**About Ujwal Batra**

## Beer in India: Getting high on taxes

Original: https://www.spontaneousorder.in/p/free-beer

Author: Spontaneous Order

Published: 2016-06-18T16:21:01.000Z

Topics: alcohol-taxation, beer-industry, public-health, economic-liberalization

> Beer is likely one of the most socially acceptable and culturally cherished alcoholic beverages. It is also the oldest and the third most consumed (after water and tea) beverage in the world. The state governments in India though would rather have you ...

**Summary:**

India's state governments impose disproportionately high taxes on beer—60% more than on stronger spirits despite beer's lower 5-8% alcohol content compared to 42.5% in hard liquor—making beer one of the world's most expensive beverages and treating it as a luxury for the upper middle class. For a Rs 100 beer bottle, Rs 60 goes to government, Rs 20 to retailer, with the rest for production; consumers pay over twice as much per ml of alcohol for beer (Rs 100 buys 650ml beer) versus whiskey (180ml at Rs 1.3/ml). This, plus 26 taxes, licenses up to Rs 26 lakhs, and inter-state import/export fees, caps beer industry growth at a flat 12% annually, per capita consumption at 1.6 liters (vs 37 in China, 31 in Thailand), and incentivizes hard liquor production, exacerbating public health issues like higher hospitalizations, crimes, and accidents. Kerala's policy shift to beer/wine via 380 licenses cut such problems. Beer also boosts barley as a cash crop, as in Rajasthan with SAB Miller. From a classical-liberal view, delinking beer taxation from hard liquor, rationalizing laws, ending the licensing raj, and adopting central taxation would unleash foreign investment, local entrepreneurship, skilled jobs, and align with 'Make in India' by freeing the market.

**Key points:**

- India taxes beer 60% more than hard liquor despite lower alcohol content, making it over twice as costly per ml of alcohol.
- Excessive taxes and 26 regulations stifle beer consumption at 1.6 liters per capita and industry growth at 12%, favoring harmful spirits.
- Kerala's shift to beer/wine licensing reduced alcohol-related crimes, accidents, and hospitalizations.
- Liberalizing beer market via delinking taxes, ending licenses, and central policy would boost barley farming, jobs, and 'Make in India'.

**By Archit Puri**

* * *

Beer is likely one of the most socially acceptable and culturally cherished alcoholic beverages. It is also  the oldest and the third most consumed (after water and tea) beverage in the world. The state governments in India though would rather have you drink something stronger though.  
The alcohol content in beer is 5 to 8%, which is lower than wine at 12% and hard liquor (Whiskey, Vodka, Rum) which is at 42.5%. Now globally alcohol is taxed according to its alcohol content, so a tippler in France is likely to pay 5 times more taxes for hard liquor than he is to pay for beer. On the other hand an Indian pays 60% more tax on beer than he does on stronger spirits.

In most states if one buys a 100 rupee bottle of beer, 60 rupees go the government, 20 to the retailer and rest of it is spent of production and manufacturing, making India one of the most expensive countries in the world to enjoy chilled glass of beer.\[1\]“In 2012, India’s 1.2 billion population consumed 20 million hectoliters of beer in 2012—but that’s just 1.6 liters per person compared with 37 liters in China, 31 liters in Thailand, and 30 liters in Vietnam”, according to a report,Beeronomics 2013\[2\], by UBS Global, a financial services and corporate advisory firm. This is due to the fact that beer is seen as luxury product in India, consumed primarily by the upper middle class.

There are around 26 different taxes paid on beer in India, but that’s not where the impediments stop. Licenses to set up a commercial brewery can cost up to Rs. 26 lakhs in few states. And as alcohol is a state subject, there is an import fee imposed on beer that is brought into a state and an export fee on beer that goes out of a state.

According to the All India Brewer’s association, the beer industry has been growing at a flat rate of 12% annually, which is not likely to increase with the current system of regulation. Due to these restrictions alcohol makers are incentivized to produce more hard liquor. For instance with Rs 100, a consumer can buy 180ml of local whiskey, which works out to about Rs 1.3 per ml of alcohol, the same amount will buy a 650ml bottle of strong beer, but because of the lower alcohol levels, consumers pay over twice as much per ml. This indiscriminate taxation deters the consumer from seeing value in beer forcing him to opt for hard liquor.

Higher consumption of hard liquor is known to cause public health and social issues. A case in point being Kerala – the state government with its new liquor policy had shut down around 700 bars across the state, mostly serving hard spirits. To avoid a major loss of jobs in this sector 380 licenses were given to establishments selling wine and beer. This state imposed shift from hard spirits to beer and wine has drastically brought down alcohol related hospitalization, crimes, road accidents and domestic violence in the state according to government officials.

Beer, an agricultural product also promotes barley production. Barley, traditionally used as fodder in India can be transformed into a cash crop, which has been the case in Rajasthan after global beer giant SAB Miller set up a brewery there. Barley can also grow with limited irrigation thus benefiting states with acute shortage of water.

Freeing up the beer market by delinking beer from hard liquor along with rationalizing of laws, ending the licensing raj and a central taxation policy will promote foreign investment as well local entrepreneurship in the beer industry, boosting skilled employment and giving impetus to the Prime Minister’s ‘Make in India’ call.

\[1\] http://www.newindianexpress.com/states/telangana/Consumption-of-Beer-Highest-in-Telangana-Andhra/2015/06/04/article2847997.ece

\[2\][http://www.beeronomics.org/](http://www.beeronomics.org/)

*(Archit Puri is a business student by qualification but a plethora of other things by admission. He has diversified interests like behavioral economics, game theory, culinary arts, beer, startups, game of thrones and others omitted due to lack of space.)*

* * *

**About Archit Puri**

Archit Puri is a public policy researcher, freelance writer, former social entrepreneur, psychology enthusiast and tired of labels. He slogs as a Senior Associate at CCS to fund his daily bread. He tweets @bantofu

## Captain America: Avenger of Choice

Original: https://www.spontaneousorder.in/p/captain-america

Author: Spontaneous Order

Published: 2016-05-16T19:43:57.000Z

Topics: libertarianism, free-markets, government-overreach, market-competition

> The recent movie Captain America: Civil War gives some interesting insights about the real world. (If you haven’t yet seen it, proceed with caution. There will be spoilers). The film is set about one year after the events of Avengers: Age of Ultron, and

**Summary:**

In Captain America: Civil War, the Avengers' division over the UN's Sokovia Accords mirrors a libertarian critique of government overreach: Captain America opposes regulation, insisting 'the safest hands are still our own,' while Iron Man supports oversight to prevent future impositions. The author argues private entities like the Avengers outperform governments because market incentives reward good actions and punish failures—e.g., Iron Man discontinued weapons after their misuse—unlike monopolistic governments prone to corruption, cronyism, and infiltration, as seen with SHIELD's HYDRA compromise. Classical liberals advocate competition, not anarchy, providing natural checks on power; absolute government control erodes freedom. Real-world parallels include Delhi's ban on Ola and Uber surge pricing, which reversed market-driven cab fare drops from Rs 25/km to cheaper options, ignoring private innovation in cellphones, laptops, and vehicles. Quoting Milton Friedman, governments create shortages even in abundance, like sand in the Sahara. The conclusion: leave key services to competitive markets for optimal solutions, resisting gradual government encroachment on choice.

**Key points:**

- Private entities self-regulate via market incentives, succeeding or failing based on outcomes, unlike unaccountable governments.
- Government monopolies foster corruption and infiltration, while competition enforces checks and balances.
- Delhi's Ola/Uber ban exemplifies regulatory harm, undoing price drops from Rs 25/km to market rates.
- Captain America's stance against Sokovia Accords highlights the dangers of centralized power over autonomous action.

**By Sadaf Hussain**

* * *

The recent movie Captain America: Civil War gives some interesting insights about the real world. (If you haven’t yet seen it, proceed with caution. There will be spoilers).

The film is set about one year after the events of Avengers: Age of Ultron, and opens with a division of the Avengers – Captain America, The Falcon, Black Widow, and Wanda Maximoff – on a mission in Africa to stop a group of terrorists. But it doesn’t end well – or rather, it doesn’t end as The Avengers expected.

The Avengers are becoming a private entity to save the people in a much better way than the existing Government. Yet, their activities are also causing a lot of chaos in society. The UN therefore steps in to put regulations on their functioning and set up Government control and the name of “Sokovia Accords” (a throwback to the climactic Battle of Sokovia with Ultron, events from which are still haunting Iron Man). This entire debate divides The Avengers into two groups – one siding with Captain America and the other with Iron Man – the former standing against the UN decision, while the latter supports it. The demands being made by various governments and the United Nations is that The Avengers stop being a privately run paramilitary organization and answer to the Government.

As we all know, anything that comes under government control is as good as doomed. The clip below elucidates the discussion between both the teams, and Captain America makes the case for why he cannot, and the rest of them should not, give up their autonomy:

Captain America: “We may not be perfect, but the safest hands are still our own.”

Iron Man: “If we don’t do this now \[submit to the accords\], it will be done to us later.”

I don’t want to spoil the entire movie for my readers and hence I’d request you to go, watch and enjoy this movie but keep in mind about the libertarian angle that this movie has taken.

As Captain America said in the above clip, private entities are responsible for their own actions. If they do good they get incentivized, and bad actions result in bad outcomes. Even Iron Man shut his weaponry after learning the destruction that they caused. It is simple – private entities, unlike government, have to lure and tempt people to buy the products. If the goodwill goes down in the market, the company goes down as well.

> When liberals ask for less government, this doesn’t imply that they stand for no regulation. They believe and advocate for strict law and order.

Captain America has always fought against centralized power, be it when he was fighting in WWII or against SHIELD (in the last Avengers movie, his main issue with SHIELD was that there was no transparency of information).  Power corrupts and absolute power corrupts absolutely. If there is competition to government services, there are automatic checks and balances on their use of power. The minute they have monopoly over power, we can bid freedom and choice goodbye.

True that in the above instance, SHIELD was infiltrated by HYDRA, but who’s to say that the UN, or an all-powerful government would never be compromised? Monopoly creates opportunity for infiltration, for cronyism and for collaboration between two powerful parties. Competition controls for all of the above. It is always about who watches the watchmen.

If you follow daily news and politics you’ll see the corruption and the number of government bodies involved in underhanded activities which affect all of us, be it money laundering, issues related to international relations, or day-to-day work of the economy.

If we come out of this movie and apply the same case in the real world, we can easily see government taking control over the lives of people slowly and gradually. We all know how private entities have come forward to make the world a better place: cellphones, laptops, cosmetics, vehicles or anything else. The most recent example from Delhi is banning Ola and Uber cabs and surge pricing.  If we look 5-6 years back we will see expensive cab services (around Rs 25/Km) but then came a parallel system to challenge the age old cabs and result was in front of us. Did the Government in the past try to give the same luxury how private players provided to the customer?

There are always few things which should be left for the market and let them analyze as to how to figure out the best solution for the people. As Milton Friedman has said, “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.” I am not saying Government cannot come up with solutions, but one has to understand what the cost of allowing them to be the only ones tackling these issues.

*(The author, Sadaf Hussain works in the development sector, is interested in politics, economics and human behaviour, and supports logic and the free market. Good at cooking, taking pictures and sarcasm. You can follow him at [@hussainsadaf1](https://twitter.com/hussainsadaf1))*

* * *

**About Sadaf Hussain**

## There is a Case for Tax Havens

Original: https://www.spontaneousorder.in/p/tax-havens

Author: Spontaneous Order

Published: 2016-05-11T13:53:40.000Z

Topics: tax-havens, tax-competition, black-economy, money-laundering

> (Tax havens are back in the news. On Monday, 355 economists signed a letter co-ordinated by Oxfam arguing that tax havens serve “no useful purpose.” This article was originally published at Livemint.com, and has been republished here with their permis

**Summary:**

Tax havens serve a legitimate purpose as a response to restrictive regulatory frameworks and high taxes that drive wealth offshore, with Gabriel Zucman's study showing 8% of global financial wealth parked there—varying from 4% in the US and Asia, 10% in Europe, to 50-57% in Russia and Gulf countries where regulations are harsher. The black economy, exemplified by the Panama Papers' 11.5 million documents and 2.6 terabytes of data, arises from compliance costs exceeding benefits in formal economies, affecting not just the rich but ordinary people, as seen in India's real estate where black money dwarfs offshore holdings. Tax havens enable tax competition, allowing jurisdictions to exercise sovereignty by attracting capital, and empirical evidence indicates they do not divert economic activity but often route capital back as FDI. Concerns over money laundering and lack of transparency are overstated, as low-tax havens fare better than high-tax ones per Basel Institute reports, and bank secrecy does not hinder crime investigations. The classical-liberal solution is to lower domestic taxes, reduce regulations like RBI's restrictions on foreign companies, and foster incentives for formal participation rather than coercing havens.

**Key points:**

- Restrictive regulations drive wealth to tax havens by making formal economy compliance too costly.
- Tax havens promote beneficial tax competition and often recycle capital back as FDI without diverting activity.
- Money laundering risks are higher in high-tax and weak-institution countries than in tax havens.
- To reduce black money, lower taxes and ease regulations like RBI's foreign company restrictions instead of targeting havens.

**By Ujwal Batra**

* * *

*(Tax havens are back in the news. On Monday, 355 economists signed a letter co-ordinated by Oxfam arguing that tax havens serve “no useful purpose.”  This article was originally published at Livemint.com, and has been republished here with their permission.)*

In a work aptly titled *The Hidden Wealth of Nations*, Gabriel Zucman studied the extent of wealth parked in offshore accounts. According to his findings, 8% of the world’s financial wealth is parked offshore (for reasons legitimate and legal, and illegal). But here is the interesting bit: the extent of wealth parked internationally varies dramatically—from 4% in the US and Asia, to 10% in Europe to close to 50-57% in Russian and the Gulf countries. Clearly, in countries with better and, quite literally, less taxing regulatory frameworks, the extent of wealth parked offshore is smaller.

What explains these differences?

To understand the black economy—why it exists and why it is as extensive as it is—it is imperative to look at the regulatory framework that leads to it. A restrictive and bad regulatory framework would increase the cost of compliance of staying in the formal economy. At some point, the cost of compliance becomes so large that it is profitable and rational to move out of the formal economy into the black economy. The same reason that makes people move to economically freer economies to work is what makes them park their funds in tax havens—incentives matter. And you can’t legislate away incentives.

The recent Panama Papers leaks, touted to be the biggest since Wikileaks, brought black money and the shadow economy back into the public eye. It included 11.5 million documents and 2.6 terabytes of data. Politicians, heads of states, celebrities and big businessmen indicted throughout the world—it was a damning revelation unparalleled in scale. The way the matter plays out in public discourse and popular imagination makes one believe that dodgy dealings outside the formal economy is the exclusive domain of the rich and powerful, and the recent revelations just affirm that impression.

The black economy is not, in fact, the monopoly of the rich and corrupt; the common man partakes in it too. The shadow economy flowers where bad regulation takes root, and there is no dearth of bad regulation in this country. Consider real estate—the amount of wealth parked in real estate is estimated to be many times of what is parked abroad, and our common man—you and I—is a part of that. Where is the moral outrage there?

And it is not that everything that occurs in the black market is bad. Black markets, being a consequence of bad regulations, are, as Milton Friedman observed, “a way of getting around government controls.” Indeed, tax havens even have positive economic consequences, and much of the money that leaves India finds its way back here, [with empirical data suggesting that tax havens do not divert economic activity](http://www.bus.umich.edu/otpr/WP2005-2.pdf) . Capital that leaves high-tax jurisdictions is re-routed back to the same jurisdictions, disguised as foreign direct investment while escaping the domestic country’s restrictive regulatory regime.

Insofar as tax havens are an expression of tax competition, there is nothing wrong with them. Jurisdictions that lower their taxes to attract capital are simply exercising their sovereignty, and the states that create a regulatory framework to restrict people from parking their money offshore and force tax havens to divulge private information are, in fact, using coercion to clamp down on a practice that is, in theory, perfectly reasonable and legitimate.

There is, however, one major concern about tax havens—the lack of transparency and the problem of money laundering. But contrary to conventional wisdom,[money laundering is a problem in high-tax and low-tax jurisdictions](http://archive.freedomandprosperity.org/Papers/blacklist/blacklist.shtml) (with low-tax jurisdictions, or tax havens actually faring better that their high-tax counterparts), and “[bank secrecy laws do not prevent governments from obtaining information when investigating crime](http://www.heritage.org/Research/Reports/2001/10/BG1492es-Money-Laundering-Bill-Should-Target-Criminals-Not-Low-Taxes) .” In an [annual report](https://index.baselgovernance.org/sites/index/documents/Basel_AML_Index_Report_2015.pdf) on money laundering prepared by the Basel Institute on Governance, many of the high-risk countries for money laundering are not, in fact, tax havens, and low-income countries with weak institutions take the top ranks in being the most vulnerable to money laundering. The concern about money laundering in low-tax jurisdictions, while legitimate, is overstated and does not, by itself, constitute a case to crack down on tax havens.

Here is the takeaway from the present episode. In our domestic economy, formal institutions ought to extend a degree of protection and create a framework that inspires confidence—a framework in which the benefits of being a part of the formal economy outweighs the costs (the costs, of course, being taxes). One of the reasons that prompted people to set up offshore companies through Mossack Fonseca was the fact that the Reserve Bank of India (RBI) did not allow individuals to set up companies abroad. But why should there be that restriction to begin with? If we are to seriously tackle corruption, we need to see what regulations we have, and the incentives we are creating. The easiest way to ensure tax compliance is not to crack down on tax havens but to lower taxes and to participate in legitimate tax competition.

\*\*\*\*

*Further reading–*

1.  *[Oxfam’s 355 economists are completely wrong: Tax havens do serve a useful purpose](http://www.cityam.com/240692/oxfams-355-economists-are-completely-wrong-tax-havens-do-serve-a-useful-purpose)*
    
2.  *[Why the world would be poorer without “tax havens”](http://www.cityam.com/238380/in-defence-of-tax-havens-why-the-world-would-be-much-poorer-without-offshore-finance))*
    

*(The author, Ujwal Batra, works in CCS Academy and is the editor of the blog [Spontaneous Order.](https://spontaneousorder.in/) This article was originally published at [Livemint.Com](http://www.livemint.com/Opinion/BMYr8e01aKA6PeEPOacv5O/There-is-a-case-for-tax-havens.html).)*

* * *

**About Ujwal Batra**

## F A Hayek: The Man, and his Humble Case for Liberty

Original: https://www.spontaneousorder.in/p/hayek-birthday

Author: Spontaneous Order

Published: 2016-05-08T19:25:00.000Z

Topics: f-a-hayek, knowledge-problem, austrian-economics, epistemic-humility

> “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” — F A Hayek, The Fatal Conceit Happy Birthday Friedrich August von Hayek! There is something remarkable about Hayek, a qual

**Summary:**

F.A. Hayek's philosophy centers on epistemic humility: humans possess limited knowledge, particularly the dispersed 'knowledge of the particular circumstances of time and place' held by individuals, which cannot be centralized. This insight challenges Economics 101's focus on scarcity as the core problem; instead, economics fundamentally concerns utilizing this decentralized knowledge effectively through institutions and laws that enable its deployment, rather than top-down planning. Hayek critiques the 'pretence of knowledge' in orthodox economics, which treats society like inert physical matter amenable to expert control, as illustrated in his essay 'The Use of Knowledge in Society.' In his 1974 Nobel lecture, he warns against shaping social orders like a craftsman but urges cultivating growth like a gardener by providing the right environment. Societies require methods suited to their complexity, as developed in the Austrian tradition. The post calls for adopting Hayek's humility in social sciences and personal pursuits, especially amid today's overconfident interventions, as a birthday tribute.

**Key points:**

- Hayek's central economic insight is the challenge of utilizing dispersed individual knowledge of time and place, beyond mere scarcity.
- Institutions must enable decentralized knowledge use rather than central planning by experts.
- Social sciences should reject the pretence of knowledge, treating society as a complex organic system needing environmental cultivation, not dictation.
- Adopt epistemic humility in policy and social sciences to avoid harm from overreach.

**By Ujwal Batra**

* * *

“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

— F A Hayek, *The Fatal Conceit* 

**Happy Birthday Friedrich August von Hayek!**

There is something remarkable about Hayek, a quality in his writings that I haven’t quite encountered in other writers and libertarian philosophers. There is a certain quality of care in his work. Each idea is carefully fleshed out, and every reservation a reader might have is is duly anticipated and tackled. There is no pretence of certainty, which is to be expected from a man whose worldview hinged on being wary of certainty and the pretence of knowledge.

The fact that man knows very little, and is capable of knowing little has profound implications for a variety of our pursuits. Every law, every institution and every pursuit in the political and social sphere has to be cognizant of man’s limited capacity to know. This was Hayek’s great insight.

Consider economics. The same theme of humility forms the core of Hayek’s economic worldview. The fundamental concern in economics, according to Hayek, *is not scarcity*, as we’re taught in Economics 101. It is, more fundamentally and more precisely—the use of knowledge that is widely dispersed among millions of individuals. Each individual knows little, but is in possession of relevant knowledge—“the knowledge of the particular circumstances of time and place.” And this scattered knowledge cannot be deposited with a single centralised authority. Our institutions and laws, then, need to be fashioned in a manner that best allows for the utilisation of this decentralised knowledge.

If the central problem of economics was merely, or exclusively, the problem of scarcity then the solution to this fundamental question could be conceived in technical terms.  And were the solution of this problem merely a technical matter, the economic affairs of all of society could be subject to the ‘perfect’ plans of a central authority or a dictator. What plagued the economic orthodoxy of his time, and arguably plagues the economic orthodoxy of today, was the belief that we could study society as we studied physical matter—as if society (and its most fundamental constituent, the individual) were inert matter that would willingly bend to an authority’s plan without protest. This quote by Hayek illustrates this point—

> “It may be admitted that, so far as scientific knowledge is concerned, a body of suitably chosen experts may be in the best position to command all the best knowledge available… \[Yet\] scientific knowledge is not the sum of all knowledge… \[A\] little reflection will show that there is … the knowledge of the particular circumstances of time and place. It is with respect to this that practically every individual has some advantage over all others in that he possesses unique information of which beneficial use might be made, but of which use can be made only if the decisions depending on it are left to him or are made with his active cooperation.”

Societies, according to Hayek, were *not to be studied* as we studied physical matter or phenomenon, but that did not mean that we could not know or investigate anything at all about social matters. We had to create suitable tools and methods for the social sciences, and it is here where Hayek made significant contributions, along with other economists and philosophers in the Austrian tradition.

It was the same theme of humility that echoed in Hayek’s speech when he won the noble prize in 1974. He concluded the speech with this note of caution—

> “If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants.“

We can thus create only the environment that can allow people to prosper, but we cannot dictate or chart the course of prosperity itself.

If there is one thing that plagues the social sciences today—it is the lack of humility. It would be good for the social sciences, and for each of us personally as individuals, to adopt the quality of humility that was so central to Hayek and his work. That would be a fitting tribute to the man on his birthday.

(Here are the links to some of the essays that illustrate Hayek’s basic philosophy–

-   [The Pretence of Knowledge](http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1974/hayek-lecture.html)
    
-   [The Use of Knowledge in Society](http://www.econlib.org/library/Essays/hykKnw1.html))
    

*(The author, Ujwal Batra, works in CCS Academy and is the editor of the blog [Spontaneous Order.](https://spontaneousorder.in/))*

* * *

**About Ujwal Batra**

## When people are angry, they vote for change

Original: https://www.spontaneousorder.in/p/vote-change

Author: Spontaneous Order

Published: 2016-05-03T20:25:22.000Z

Topics: democracy, political-polarization, populism, economic-growth

> A lot has been said about the level of intolerance in India. We are not alone and we see the same in the other great pillar of democracy on this planet – the US. What does this imply for the future of democracy and why have differences of views become s

**Summary:**

Polarization in democracies like India and the US stems from two harmful responses to conflict: avoiding sensitive topics for political correctness or demonizing opponents, both undermining discourse essential for problem-solving. Referencing Franklin & Marshall College's 'Democracy and Disagreement' course by Stephen Medvic, the author advocates fostering appreciation of differing views amid shouting matches in US primaries, Indian Parliament disruptions, and street violence. In the US, Donald Trump's appeal exploits widespread humiliation from 9/11, lost wars in Afghanistan and Iraq, wage stagnation, 2008 crash, and social shifts. Similarly, in India, public frustration with corruption and decelerating growth elected Narendra Modi in 2014 as an anti-establishment outsider promising national greatness, mirroring Trump's rhetoric. From a classical-liberal perspective, anger drives votes for change—which need not be negative—but fuels intolerance and agitation. The solution lies in tackling root causes: creating jobs and controlling inflation to restore fairness perceptions, reduce rage, and secure re-election in 2019, prioritizing economic realities over media-amplified outrage.

**Key points:**

- Avoidance and demonization of opponents both erode democratic discourse by preventing appreciation of conflicting ideas.
- Trump's rise taps into American humiliation from events like 9/11, failed wars, wage stagnation, and 2008 crisis.
- Modi's 2014 victory stemmed from Indian anger over corruption and economic slowdown, positioning him as an outsider promising greatness.
- Address public anger by creating jobs and controlling inflation to mitigate frustration and ensure political longevity.

**By Luis Miranda**

* * *

[

![Luis Miranda Chairman, CCS](https://substackcdn.com/image/fetch/$s_!Lwe0!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F1e48588e-1210-4683-8b14-bdf5d6ac278e_100x100.jpeg "Luis Miranda Chairman, CCS")



](https://substackcdn.com/image/fetch/$s_!Lwe0!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F1e48588e-1210-4683-8b14-bdf5d6ac278e_100x100.jpeg)

Luis Miranda Chairman, CCS

A lot has been said about the level of intolerance in India. We are not alone and we see the same in the other great pillar of democracy on this planet – the US. What does this imply for the future of democracy and why have differences of views become so polarised?

Our daughter is currently studying at Franklin and Marshall College. The president of F&M, Daniel Porterfield, recently wrote an article in Forbes where he referred to one of the courses taught there – ‘Democracy and Disagreement’ by Stephen Medvic. The course pushes ‘students to grasp the value of conflicting ideas in a democratic society’. There are two typical responses to conflict – avoidance and demonising opponents. In the past, we avoided debating sensitive topics in order to be politically correct; they were simply swept under the carpet. Today, we have swung to the other side of the pendulum where opponents are demonised – we see a lot of that in the US Presidential Primary debates with the likes of Donald Trump. In India, we see the same in the debates in Parliament where our beloved members of parliament have perfected the art of preventing Parliament from working efficiently. Nearly every issue gets blown out of proportion thanks to social media, prime time TV, etc. Both these extreme responses – avoidance and demonising opponents – hurt democracy. Professor Medvic talks about why we need to foster discourse so that each one appreciates the other’s point of view. We live in a dangerous world where no one wants to listen to the other side and it is becoming very difficult to solve problems. Debate is reduced to shouting matches and violence on television, in Parliament and on the streets. As a result, whoever shouts the loudest or has the police on their side wins the argument, at least in the short term.

Marvin Zonis, my professor at Chicago Booth, and Mike Kaufman recently co-authored an article, ‘Donald Trump and The Great Escape from Humiliation’. They argue that Trump appeals to Americans who, over the past 15 years, feel humiliated. This humiliation has diverse sources – the terrorist attack on the World Trade Centre, the loss of the wars in Afghanistan and Iraq, the stagnation of wages, the election of a black president, the economic collapse of 2008, the rise of the LGBT movement, etc. A large part of America feels humiliated in this new world and the consequence of this humiliation is rage. Trump panders to this rage.

In India also, despite our economic growth, there is still a sense of frustration. One of the reasons why Modi got elected was that people were angry with the way corruption had grown and economic growth had slowed down. Modi was the outsider in Delhi, just like Trump is in America. Modi promised to make India great, just like Trump promises to make America great.  When people are angry, they vote for change. And change need not be bad.

When people get angry they also demonise opponents. They become belligerent and intolerant. They agitate. To address this anger we need to focus on the real issues behind it – a growing feeling that the future looks tougher and less fair.  Create jobs and control inflation – that’s all that is required to reduce this anger and get reelected in 2019.

*(Luis Miranda is the Chairman of Centre for Civil Society (CCS). This post was originally published on [Luis’ blog at ForbesIndia.com](http://forbesindia.com/blog/accidental-investor/when-people-are-angry-they-vote-for-change/))*

* * *

**About Luis Miranda**

Luis Miranda connects dots. He started investing in India’s infrastructure a long, long time ago. He started IDFC Private Equity and was earlier a part of the start-up team of HDFC Bank. Luis has invested in and has been on the boards of companies like GMR Infrastructure, L&T Infrastructure, Delhi International Airport, Gujarat Pipavav Port, Gujarat State Petronet, and Manipal Global Education. Luis today spends most of his time, together with his wife, on non-profits. He is Chairman of CORO and Centre for Civil Society and Managing Trustee for Nadathur Trust. Other organisations include 17000 Ft Foundation, SNEHA, Muktangan, Sunbird Trust and Samhita Social Ventures. Luis graduated with an MBA from Chicago Booth and is a Chartered Accountant.

## Some Reflections from a Trip to Bharat

Original: https://www.spontaneousorder.in/p/reflections-bharat

Author: Spontaneous Order

Published: 2016-04-29T20:08:38.000Z

Topics: rural-poverty, government-schemes, education, free-markets

> Two Indias co-exist in our nation today. One that a lot of us reading this blog live in, and call India. The other, one which we know of but have often not heard or seen, which I will now refer to as Bharat. A recent trip I took gave me the chance to ex..

**Summary:**

The post contrasts affluent urban 'India' with impoverished rural 'Bharat,' where government schemes like free education have failed to uplift despite good intentions and annual budgets. Author argues these top-down programs create dependency rather than demand, unlike private markets that penetrated even the poorest with cell phones and TVs. In a tribal village near Harda, Madhya Pradesh, 18 of 25 women had paid DTH TVs (Rs 250-300/month) but couldn't afford Rs 80/month for a quality private school 3km away, citing opportunity costs for daily needs; government schools lack quality and accountability, private ones face input regulations. Hypothesis: State provisioning in education fosters reliance, while markets succeed by meeting perceived needs. Poverty endures because schemes by bureaucrats ignore the poor's involvement; true eradication requires empowering Bharat through earning opportunities like small businesses or e-rickshaws, rule of law, safety from crime, and institutional reforms favoring free markets over expansive state dependence.

**Key points:**

- Government education schemes fail to create demand in rural Bharat, unlike private markets for TVs and phones.
- Rural poor prioritize Rs 250-300 monthly DTH over Rs 80 school fees due to opportunity costs and state dependency.
- Poverty alleviation demands involving the poor in growth via market opportunities, not top-down bureaucratic programs.
- Sustainable empowerment requires rule of law, safety, and institutional changes to enable businesses in Bharat.

**By Sadaf Hussain**

* * *

Two Indias co-exist in our nation today.

One that a lot of us reading this blog live in, and call India. The other, one which we know of but have often not heard or seen, which I will now refer to as Bharat.

A recent trip I took gave me the chance to explore this Bharat; unheard, untouched and unexplored by most. People in ‘India’ are largely unaware of the problems faced by Bharat. This is possibly because Bharat is less accessible – like a distant cousin, we know of him but have never met him.

Bharat is poor, or at least not as well off as its richer cousin, India. The government has launched endless programs for its upliftment. This year’s budget was also focused on the development of Bharat. This is not exactly new; every year there is a new scheme – free education, subsidies, skills training, and numerous others. But where have these schemes gotten us? What is the status of Bharat now?

Let’s look at the idea of free education. The government wants everyone to be educated. This is definitely a good idea and no one would disagree. In my discussion with the people in Bharat, they said they did want to send their kids to study, but faced two key problems. First, If they send their kids to study, they will not have enough money in hand to spend on their food and daily necessities. Second, there is no good school in the neighbourhood for them to send their children to – private schools are shackled by government regulation focused on input norms, and government schools lack accountability and quality checks.

Has the government (with all its good intentions), been able to create the *need* for education in rural India, like Nokia or Samsung have created the *need* for cell phones? Cell phone companies have managed to get into the pockets of the poorest of the poor, while the Government is still struggling to achieve an educated nation.

While interviewing a group of tribal woman in a village close to Harda in Madhya Pradesh, I learned that there was a private school three kilometres away that charged a fee of Rs 80 per month. I asked whether it was a good school, and they said that it was, but that they could not send children there. Why not? Because they couldn’t spare that much of their income for education.

And yet, 18 of those 25 women acknowledged that they had a TV with a paid DTH connection.

My question is simple: If the poor have a TV and they spend Rs 250-300 per month on keeping their connection live, why is it that they cannot spend Rs 80 per month on educating their children?

Though I didn’t get an answer from them on this issue, here is my hypothesis: The government has not made Bharat dependent on them for TV and entertainment. However, they *have* made them dependent on government provision of education. Of course, this is mere supposition on my part and I could be wrong, but I do think that it is a compelling way to think about the matter. With an ever-expanding state, we see that dependence not merely in education, but in a host of other facets in our lives. A lot of dependence on the state and big promises, but little accountability to go with it.

Travelling through Bharat, I saw an extent of poverty I don’t typically encounter back at home and in India’s big cities. Year after year, we hear about poverty reduction programs and schemes but what comes out of it? NGOs and individuals have come out to help the country and government – some have done well, but unfortunately, others haven’t had much impact. Eradicating poverty and providing education to all is such an emotional thing that everyone wants to contribute, but hardly anyone has taken the time to work out the details. Our good intentions will almost always have bad outcomes if long-term consequences are not considered.

I think the reason that most of these anti-poverty measures have not been successful is because these measures have been designed by bureaucrats and politicians–the poor have not been an integral part of it. If one really wants to empower people, they must give them opportunity to earn, help the community to fight against the poverty together. Poverty can effectively be eradicated only when the poor start contributing to the growth by their active involvement in the growth process.  All the people of Bharat need is a sustainable model to work or to start their own business – be it a small store or a big one, be it E-Rickshaws or cab services. People earn money when they feel safe from goons and criminals, when they trust in the Rule of Law and good governance.

All of this, of course, requires not merely fundamental institutional changes, but also a fundamental change in approach. But are we listening?

*(A version of this article previously appeared in [the Quint](http://www.thequint.com/blogs/2016/04/23/the-road-to-hell-how-governments-accidentally-entrench-poverty). The author, Sadaf Hussain works in the development sector, is interested in politics, economics and human behaviour, and supports logic and the free market. Good at cooking, taking pictures and sarcasm. You can follow him at [@hussainsadaf1](https://twitter.com/hussainsadaf1)*

* * *

**About Sadaf Hussain**

Sadaf Hussain writes everything between politics, economics to food and culture. He is the author of Daastan-E-Dastarkhan and a TEDx Speaker.

## A Surge of Woes

Original: https://www.spontaneousorder.in/p/a-surge-of-woes

Author: Spontaneous Order

Published: 2016-04-21T18:49:11.000Z

Topics: price-controls, ride-sharing, transport-regulation, state-intervention

> I guess John Kay nails it (although this is in a slightly different context). ”Regulation should seek to work with market forces, not to replace them. Not because free markets lead to the best of all possible worlds—in financial services, as in many o

**Summary:**

Drawing on John Kay's principle that regulation should channel market forces rather than replace them—'competition where possible, regulation where necessary, and supervision not at all'—the post critiques Delhi's transport policies under Arvind Kejriwal as knee-jerk interventions that exacerbate woes. Delhi's traffic stems from elite car ownership beyond social optimum, absent bus lanes, and roads unfit for modern multimodal transport, though the Metro provides relief. Past blame on rickshaws led to CNG mandates and permit caps so restrictive that black market prices exceeded new rickshaw costs, spawning a mafia, slashing supply, and spurring diesel car purchases that worsened SO2 pollution. Today's odd-even car rationing and surge pricing ban on Ola/Uber mimic historical price controls like Sher Shah Suri's, which cut grain supply; they undermine noncoercive ridesharing by discouraging entrants and supply during peaks, favoring cartelized 'kaali-peeli' taxis with cheaper vehicles. Better alternatives include enforcing booked prices for transparency. In middling state-capacity contexts like Delhi—where state intervention correlates positively with wealth overall but risks abuse—such ad-hoc democratic policies, even from honourable leaders like Kejriwal constrained by the Centre, harm markets and consumers.

**Key points:**

- Regulation must work with market incentives, preferring structural measures over behavioral controls.
- Delhi's rickshaw permit caps created a black market where prices exceeded new rickshaw costs, reducing supply and boosting diesel car use.
- Banning surge pricing cuts rideshare supply, deters entrants, and bolsters cartelized traditional taxis.
- Enforce price transparency at booking time instead of outright price caps on Ola/Uber.
- Ad-hoc interventions in middling state-capacity governments like Delhi's worsen market failures.

**By Aniket Baksy**

* * *

I guess John Kay nails it (although this is in a slightly different context). ”Regulation should seek to work with market forces, not to replace them. Not because free markets lead to the best of all possible worlds—in financial services, as in many other activities, they plainly do not. But it is much easier to channel a flow of water into appropriate downhill channels than to push it uphill. That is why structural regulation, which emphasizes the incentives given by regulatory measures, is often preferable to regulation which seeks to control behaviour. Competition where possible, regulation where necessary, and supervision not at all, should be the underlying principle.”

When is it legitimate for a Government to intervene in a Private Market? While a rather large number say never, it’s clear that that’s wrong – if government was really so bad, state capacity and wealth would be inversely related, whereas [almost exactly the opposite is true](http://onlinelibrary.wiley.com/doi/10.1111/ecoj.12161/abstract). However, it’s in the states with middling state capacity that we should be most wary of the state. Case in point: Arvind Kejriwal and the Government of Delhi.

Delhi’s transport system is probably the ultimate example of a combination of private market and public failure – an elite enriched through extraction of wealth from the rest of the country through political means owns far more cars than can possibly be socially optimal. Bus lanes do not exist, and a vast array of different modes of transport compete for roads designed in an age of horse-driven carriages. The Delhi Metro serves a massive number of people, acting both as a pressure valve and a social leveller.

At different stages, different culprits have been sought for the Capital’s traffic woes. The rickshaws, for instance, were thought to be at the root of pollution – so the state mandated that they all run on CNG and restricted the number of permits to a number so low that the black market price of a permit [often exceeded the price of a new rickshaw itself](https://kafila.org/2011/11/20/a-few-questions-about-a-few-thousand-new-auto-rickshaws-in-delhi-simon-harding/). A Rickshaw mafia emerged, and a larger number of people were encouraged to purchase new cars due to the sudden fall in rickshaw supply – and most of these were diesel vehicles, raising the capitol’s SO2 levels if nothing else (Indian diesel is notoriously high in sulphur content).

Today’s blame, of course, falls on the car owner, that blasted consumer who must be forced to drive only on the odd (or even) day. Given this, the Delhi Government’s further reaction to banning surge pricing is even odder. What Kejriwal’s government has done is rather akin to what Sher Shah Suri once did: facing agrarian crises in North India, he set maximum prices on grain traders in Agra, who promptly cut supply. On the one hand, Kejriwal wants people to drive less; on the other, he’s essentially shutting down another mode of transport. Ola and Uber are purely noncoercive entities: if surge pricing is unaffordable, *no one is preventing anyone from using a standard cab*. If the concern with surge pricing is that one party is completely surprised by it, then the optimal response is regulation requiring cab operators to adhere to the price at which the cab is booked, not the price prevailing when the customer reaches the destination. There’s an entire array of proposals that’re smart, equitable and won’t chop off the supply of ridesharing cabs in Delhi.

There are those who respond with the usual market failure story, that Uber/Ola have built up a cabal of taxi owners who alone benefit from surge pricing. This is naïve and characteristic of a hatred for the corporate that’s holding all of us back. In the absence of surge pricing, these cartels (if they exist) won’t fall apart. On the other hand, potential entrants will be discouraged if the returns to investment in an Ola is same as the return to investment in a Kaali-Peeli – in fact, placing a cap on all taxi services drives all taxi prices to the same level, making kaali-peelis better investments, just because the cars are so much cheaper than the average Ola Owner’s vehicle. Of course, Kaali Peelis are probably a far more cartelised industry, so the taxi industry’s extortion of the masses can continue unabated.

I don’t think Arvind Kejriwal is a malicious power-hungry concentrator who wants to build monuments to his glory, like Odd-Even will become. I just think he works in the same knee-jerk, ad-hoc fashion that characterises democratic governments with finite and short terms, and that this is worsened by his frustration: despite an incredible majority in the Delhi Assembly, he sees his power limited by the overarching hand of the Centre. That being said, unlike a good many other leaders, Kejriwal is probably an honourable man. However, Shakespeare was pretty clear that honourable men and rationality aren’t necessarily the best of companions in a policymaker.

*(Aniket Baksy is a graduate of the Researching Reality internship, and is currently studying Economics at the London School of Economics. This post has been republished from his blog [Irrationally Exuberant](https://irrationallyexuberantanikbak.wordpress.com/).)*

* * *

**About Aniket Baksy**

## Ideology Masquerading as Research

Original: https://www.spontaneousorder.in/p/ideology-masquerading-as-research

Author: Spontaneous Order

Published: 2016-04-16T19:33:28.000Z

Topics: school-choice, private-education, public-education, rte-act

> Rohit Dhankar’s article ‘A lesson in hidden agendas’ in the Hindu is a case study in ideology masquerading as research. He starts by saying: “Public Education System (PES) and the Right to Education (RTE) do have problems, and they need to be fixe

**Summary:**

Parth Shah critiques Rohit Dhankar’s article as ideology masquerading as research, where Dhankar admits problems in India's Public Education System (PES) and Right to Education (RTE) but pivots to attacking private schools instead of proposing fixes. Despite over 60 years of reforms, government schools have worsened, with people—even the poor—abandoning them for private options, yet defenders like Dhankar denigrate these choices made with hard-earned money. Shah highlights Dhankar's logical leaps, such as citing a study showing private schools have fewer low-caste students to claim better learning outcomes are 'unfounded,' ignoring that the study addresses inclusion, not learning. An India Human Development Survey reveals more corporal punishment ('beating') in government than private schools, with a negative correlation to income levels in government schools. Dhankar trivializes fixes by suggesting mere RTE clauses for learning standards and deems low-end private schools inherently flawed due to their profit motive, contrasting with evidence like Azim Premji's philanthropy funded by profits. From a classical-liberal view, Shah argues for giving private schools the same time and resources as government ones, prioritizing people's choices, competition, and accountability over ideological attacks on profit-driven education.

**Key points:**

- Dhankar admits PES and RTE flaws but attacks private schools instead of offering credible improvement paths.
- Private schools' lower low-caste enrollment does not disprove their superior learning outcomes, as studies cited focus on inclusion, not learning.
- India Human Development Survey shows more corporal punishment in government than private schools.
- Over 60 years of reforms have worsened government schools, prompting mass exodus to private alternatives.
- Private schools' profit motive is not a fatal flaw; they deserve the same improvement opportunities as government schools.

**By Parth Shah**

* * *

Rohit Dhankar’s article ‘A lesson in hidden agendas’ in the [Hindu](http://www.thehindu.com/opinion/lead/a-lesson-in-hidden-agendas/article8397088.ece) is a case study in ideology masquerading as research.  He starts by saying: “Public Education System (PES) and the Right to Education (RTE) do have problems, and they need to be fixed; we need to find a way to make the system deliver in terms of better learning outcomes.” One would expect that the rest of the article would show the way to improve PES.

However, Mr Dhankar uses the classic debating tactic of shifting the ground and spends all his energy in attacking private schools.  He seems to have low respect for the readers who are expected to believe that attack on private education is same as improving state education. His approach achieves the opposite: Even after spending a lifetime in education, no credible path to improve state education can be offered; more than 60 years of reforms has made government schools even more pathetic performers.

The people, even the poor, are leaving state schools in droves. The only avenue for the defenders of state education is to attack the peoples’ choice. It is rather ironic that champions of people are compelled to denigrate the choices that people are making with their own hard-earned money. This irony is completely lost on Mr Dhankar in the glare of his ideology.  After all said and done, ideology trumps people.

The one idea he does offer to improve state education actually trivalises the problem itself. He says: “The issue of quality of education can be easily fixed in the RTE…perhaps there is a case to introduce some clauses on ensuring learning standards.” Is it just a matter of adding a few clauses in the law? How out of touch Mr Dhankar is with the reality of Indian government and the education system! Ideology also trumps reality!

Let’s look at research evidence in the article. Citing a study, Mr Dhankar says: “students in private schools are less likely to belong to low caste groups…which means that they are less inclusive.” So far so good. The next sentence says: “Therefore, the repeated claims of better learning in private schools are unfounded.” How does that follow?! The study is about inclusion not learning outcomes!

A study based on India Human Development Survey shows that students are more likely to be ‘beaten’ in government than private schools. It also points to a negative correlation between income level and the probability of punishment in government schools.  Would Mr Dhankar conclude from the study that government schools can never be improved and be closed down or would he suggests ways to deal with corporal punishment? Should we find ways to make private schools more inclusive or just condemn them to closure?

If government schools should be given time and resources to do better, why private schools not be given the same opportunity. Here’s a gem of a claim that Mr Dhankar thinks is based on research and not ideology, you be the judge: “But PES conceptually can be better if managed well; while the private system has it in its DNA as it has to make profit on fees. For low-end private schools to do better on this count is impossible even in theory.” There you have it: Private schools must be condemned to hell since they want to make a profit. May be Mr Dhankar should tell that to Mr Azim Premji whose for-profit business pays for his ideological battles.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Speaking to the Poor (C Rajagopalachari, 1965)

Original: https://www.spontaneousorder.in/p/5801-2

Author: Spontaneous Order

Published: 2016-04-14T17:44:37.000Z

Topics: free-markets, statism, swatantra-party, poverty-alleviation

> The following piece was written by C Rajagopalachari in 1965, and was published in the Swatantra Party Souvenir. The Congress Party’s daily assertion is that it is deeply concerned about the welfare of the poorer section of India’s people. And that th

**Summary:**

C. Rajagopalachari argues that the Congress Party's statist socialism, formalized in 1954 and persisted for eleven years by 1965, has failed to uplift India's poor despite claims of concern for their welfare. Policies like the licence-permit-quota regime, nationalization, and indirect taxation have caused soaring prices, public debt, mismanagement, corruption, and reduced incentives for production, leaving the poor in unrelieved distress while enriching the powerful. Swatantra Party, from a classical-liberal perspective, advocates reversing these controls for normal competition, less taxation, and incentives to boost industrial and agricultural production, employment, wages, and savings. Only free economy can deliver widespread opportunities for honest labor to millions, unlike limited government enterprises. Congress clings to power through administrative machinery and deception, perpetuating tyranny rather than democracy. Rajagopalachari urges the electorate, especially the poor, to reject Congress by voting for Swatantra or similar free-economy advocates, as the poor are worse off than ten years prior, and no policy deserves endless trial amid evident failure.

**Key points:**

- Congress's 1954 socialist policies, after 11 years, have failed to improve the poor's lot, causing inflation, debt, and corruption instead.
- Increased production via incentives, not controls or taxation, is essential to raise employment, wages, and poor's welfare.
- Swatantra Party demands ending licence-permit-quota raj to restore free competition and minimum state intervention.
- Voters should reject Congress, which uses power to perpetuate rule, and support free-economy parties to remove statism.

**By Ujwal Batra**

* * *

*The following piece was written by C Rajagopalachari in* 1965, *and was published in the Swatantra Party Souvenir.*

The Congress Party’s daily assertion is that it is deeply concerned about the welfare of the poorer section of India’s people. And that the Swatantra Party’s leaders are concerned with an opposite interest. This is a great propagandist lie. We are all concerned about the uplift of the poor and their welfare. It is one thing to be concerned, another thing to know how to realise the welfare of the poor-which we desire to achieve. The licence-permit-quota regime and the monopolies which it has created, the nationalisation of big concerns and the mismanagement and losses that it leads to, the indirect taxation which inevitably accompanies State trading, all these and other features of the Statist socialism which the present Government of India is practising do not contribute to the uplift of the happiness of the poorer sections of our people.

Taxation and the public debt, and large administrative expenditure, have caused prices to soar, making the poor man’s life a life of unrelieved distress. The Swatantra Party wants a reversal of these Statist policies. It stands for the restoration of normal competition among producers and distributors. The poor are being deceived by the Congress Party, because the power resulting from the licence-permit-raj and the day to day enjoyment of it by that party are too sweet to be given up. The Swatantra Party insists that it should be given up. No Government, whatever be the party in office, should be allowed to enjoy the power that the Congress Party now enjoys on account of the licence-permit-quota raj going by the name of ‘socialism’. It is not democracy. It is not freedom. It is tyranny and a machine for perpetuation of power in a single party. In 1954, the Congress Party formally adopted a policy of increasing the State’s power over the people’s economic life, in the hope, thereby, of improving the lot of the poorer sections of the population. Eleven years have passed and the party has not succeeded in demonstrating the wisdom of that policy. It has steadily increased the control of the State over the national economy, but it has utterly failed to improve the lot of the poor. No Government can reasonably ask for longer than eleven years’ trial for any policy which it adopts in variation of established usage. The Congress Party still refuses to admit its error.

The lot of the poor can be improved only by increased production, industrial as well as agricultural. Such increased production must necessarily issue out of better incentives for those engaged in production, and not by more and more controls or harassments by officials, or by more and more taxation which reduces the incentive for work and production.

The Swatantra Party wants less taxation, and more incentives for production which will, in turn, increase employment, increase wages and improve the lot of the poor. The natural incentive for saving is the opportunity of re-investment and thereby the prospect of increased income.

In vainly persisting in its wrong policy, the Congress Party has led the nation into a degree of indebtedness to foreign nations, which will sit on succeeding generations of the poor as a monstrous and irredeemable burden making life miserable and devoid of all hope for them.

In spite of patent failure, the Congress Party holds on to power without abandoning its erroneous policies. The Congress Party has learnt to utilize the administration to perpetuate its rule, but the electorate has unfortunately not learnt yet to use the ballot-paper to dismiss the party from power. The electorate is largely uneducated. It is deceived to think that the goal of socialism, viz., the improvement of the poor man’s lot will be attained in some miraculous way by the Congress-an old, hallowed national institution which cannot be speaking falsehood! The poor man’s lot cannot be bettered by trade and industry being managed by officials-and this, in reality, is socialism. The Congress Party has deteriorated in all ways and its desire to be in office has disabled it from thinking aright.

The poor need opportunities for giving their honest labour and earning reasonable wages to run their families. These opportunities will increase with the increase of private industries and private trade spread all over the country, not through a few big Government plants or State-trading concerns which can only engage a limited number of people. Free economy alone can bring employment to the doors of the poor millions, and this is the policy of the Swatantra Party. This obvious truth is sought to be hidden away from the poor by sheer calumny and abuse. Those who utter calumny against private trade and private enterprise have been given more than ten years’ trial to improve the lot of the poor through the policy of giving all power to ministers and officials. The results of that long trial are well-known-corruption, the rich getting richer, and the life of the poor remaining just as miserable as it was in 1954.

It is not a battle between two broadly different policies, between State management and free economy, but between a group that has seized the administrative machinery, and all government and quasi-government influence, enabling it to win elections, and a group that offers free economy to the people but which has no power to bribe the voters with anything immediately attractive to the voters, because it is not in office nor in possession of the public exchequer. The voters should not allow themselves to be thus bamboozled but should cast their votes so as to remove this Congress incubus out of office and give a chance to those who oppose Statism and are prepared to take charge of the affairs of the nation on the basis of free economy and minimum State-intervention.

The poor should ask themselves the simple question: Are we better off today than ten years ago? If the answer is in the negative, they should put the stamp on the Swatantra Party candidate or anyone else that like the Swatantra Party, opposes the blighting State controls and believes in free economy. The electorate should refuse any longer to support the Congress Party. Let the Congress Party sit in Opposition and plead for State controls wherever such controls would be for the good of the poor. The reins of government should no longer be in their hands. And this the electorate has the power to decide.

*You can access the original piece [here.](http://indianliberals.in/uploads/periodicals/PDF_269_qohdkgSixth%20National%20Convention%20Rajaji%20Nagar%20-%20Swatantra%20party.pdf) Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Ujwal Batra**

## A Massive Bureaucracy with No Accountability

Original: https://www.spontaneousorder.in/p/bureaucracy-accountability

Author: Spontaneous Order

Published: 2016-04-05T17:42:27.000Z

Topics: bureaucratic-accountability, personal-liability, government-waste, judicial-reform

> “The reason for non-utilization is shocking and scandalous. The entire state does not possess a single rifle which can fire this ammunition. The ammunition is used in medium machineguns (generally used by the military), it is not used by any police forc

**Summary:**

Siddhant Kohli exposes a scandalous waste in Maharashtra where the state government spent Rs. 100 crore in 2011 on ammunition incompatible with any police rifles in India, now rotting unused while security forces face shortages. This exemplifies the absence of personal accountability in India's bureaucracy, where officers face no liability for gross errors or corruption, stifling innovation, merit, and initiative amid promotions driven by extraneous factors like nepotism and politics. Kohli argues from a classical-liberal standpoint that introducing personal liability for failures, alongside rewards for exemplary performance and pioneering ideas, would curb waste, align planning with implementation, reduce costs, enhance economic activity, and counter bureaucratic inertia. Extending this to the judiciary—addressing judges shirking work before promotions, ignoring corruption to avoid contempt charges, and biased decisions for post-retirement postings—would restore public trust. Ultimately, without accountability across executive and judicial branches, Indian democracy remains more myth than reality, undermining the constitutional separation of powers.

**Key points:**

- Maharashtra wasted Rs. 100 crore on unusable ammunition for police guns in 2011 due to lack of accountability.
- Personal liability for public officers would punish errors and corruption while rewarding merit to foster innovation and efficiency.
- Bureaucratic accountability would bridge planning-implementation gaps, reduce nepotism, and enable timely projects for economic growth.
- Judicial reforms must enforce accountability to stop end-of-tenure shirking, ignored corruption, and biased decisions for post-retirement perks.
- Accountability is essential to make Indian democracy substantive rather than mythical.

**By Siddhant Kohli**

* * *

“The reason for non-utilization is shocking and scandalous. The entire state does not possess a single rifle which can fire this ammunition. The ammunition is used in medium machineguns (generally used by the military), it is not used by any police force in any state in this country,”[\[1\]](#_ftn1)

In 2011, the Maharashtra State Government procured ammunition for guns that are not owned by any police force in the country. The cost incurred on the same is Rs. 100 crore, and the bullets are now rotting in a godown. In stark contrast to the same, our army, Border security, paramilitary and police are suffering from a crippling shortage of arms and ammunition.

It raises the question–who was the person who ordered this ammunition, and with what authority? Perhaps more importantly, who pays for this lapse other than the taxpayer? Worryingly, does anybody even care?

Personal accountability of public officers is not a concept in India. Exemplary performance and shocking lapses are scarcely recognized and poorly rewarded or vilified, while extraneous considerations form the basis of transfers and promotions across the board. The system, while reducing the bureaucracy to mere paper pushers, has also effectively shunned innovation, merit and pioneering thinking. Without personal incentive and recognition, why would anybody want to push the envelope? Conversely, in absence of any personal liability, what stops them from making errors inadvertently or deliberately, knowing that promotions are due when they are due, irrespective of contribution?

The case of the wrong bullets could just be a gross error, or it could be a case of sleaze and corruption between a manufacturer, an agent, and a bureaucrat who enabled the deal. While everybody gets their cut, nobody gets cut. Win-Win.

In this day and age as the bureaucracy swells, our systems and internal checks need to be vigorously strengthened to ensure that our funds are directed correctly, and errors are punished with directed personal liability of the offending officer. It also begs to bring in rewards for jobs well done, and most importantly, growth for implementation of pioneering ideas in a system infamous for its inertia and inefficiency.

It could be argued that this personal liability would also go a long way in removing the disconnect between planning and implementation, between legislative action and executive action, and between expectation and reality. If a job is directed to a particular office or officer, the onus of getting the job done has to rest with the same office, or officer. Timely implementation leads to lower cost of production, greater public utility and consumption, and necessarily greater economic activity in the area. Implementation as planned also results in infrastructure lasting for at least its planned lifespan, and matching the infrastructural master plan of the district to permit planned development in the future.

This personal liability of the bureaucracy would also push for a strong bureaucracy, with professional growth linked to better work instead of blatant and all infecting nepotism. The current system has also created legions of officers who are scared of working simply due to pressure from political overlords not willing certain projects to be implemented due to vested interests. More importantly, on first principles, the measure would be instrumental in giving back the executive its rightful place in the three-tiered concept our Constitution originally envisioned.

Moving to public officers in the judiciary, it is a well-known phenomenon of judicial officers not working in the last few weeks of their tenure, just before they are due for promotion or retirement. It is also known that even mere suggestions of corruption against judicial officers can lead to charges of contempt, often leading to charges of blatant corruption not being brought up in the courtroom. The reason for the former is simple-one does not want to take any discussions that are politically controversial at the cusp of a managed promotion. The reason for the second-even mere charge of judicial impropriety devolves people’s faith in the justice system, so even laying allegations is discouraged.

Post retirement postings is another issue which begs discussion. It is settled that several officers of the court make biased decisions towards the end of their tenure to get bigger post retirement postings, which keeps them within the governmental system but comfortably out of regular public scrutiny.

In all three points, public accountability is killed. By not taking decisions, or by not calling out corruption for what it is, or by accepting this systemic bias which exists in the system, the Indian Public system is heading towards a looming collapse.

The personal accountability of public officers needs to be brought to the forefront of change that this nation is vying for. If the system is not accountable to the people, one could convincingly argue that Indian democracy is more myth than reality.

***(Siddhant** **Kohli** is currently a third year student of law looking to further a career in International litigation. He is interested in travelling, reading, and golf. )*

\*\*\*

[\[1\]](#_ftnref1) http://www.mumbaimirror.com/mumbai/others/Rs-100-crore-shot-to-smithereens-as-bullets-do-not-fit-the-barrels/articleshow/51368000.cms

* * *

**About Siddhant Kohli**

## India Before 1991: Stories of Life Under the License Raj

Original: https://www.spontaneousorder.in/p/india-before-91

Author: Spontaneous Order

Published: 2016-03-30T15:48:20.000Z

Topics: license-raj, 1991-reforms, economic-liberalization, india-economic-history

> On 15 August 1947, when India achieved independence, the country was grappling with problems of widespread poverty and crises in agriculture as well as industries. The First Five Year Plan was launched in 1951 which mainly focused on the development of ..

**Summary:**

The post recounts India's economic history under the License Raj, initiated post-independence with the First Five Year Plan in 1951 focusing on primary sectors and the 1956 Mahalanobis Model emphasizing government-led industrialization, as Nehru advocated public sector dominance. This regime, intensified by 1969 bank nationalizations and the 1970 MRTP Act, imposed strict controls on production, expansion, pricing, and imports under 'swadeshi,' fostering a scarcity economy where licenses became tradable commodities, business competed for permits rather than markets, and consumer choices were minimal—e.g., only 2-3 car/scooter brands in one color. A Balance of Payments crisis culminated in 1991 with foreign reserves at USD 1.2 billion in January, halving to cover just three weeks of imports by June, averting default via IMF bailout-conditioned reforms. Finance Minister Manmohan Singh's July 1991 budget launched liberalization, ending License Raj; by March 1994, reserves reached USD 15.7 billion amid surging FDI and FII. From classical-liberal lens, these reforms dismantled state overreach, unleashing growth to make India the fastest-growing major economy. With 52% of Indians born post-1991, the Centre for Civil Society crowdsources pre-91 stories via 'India Before 1991' to educate youth on policy impacts and reform necessity.

**Key points:**

- License Raj created scarcity by government dictating production, prices, and licenses, turning permits into a black market commodity.
- 1991 Balance of Payments crisis, with reserves at USD 1.2 billion (three weeks' imports), forced IMF bailout and liberalization via Manmohan Singh's budget.
- Post-reform, reserves rose to USD 15.7 billion by 1994, FDI/FII inflows surged, propelling India's economic rise.
- Crowdsource stories of License Raj life to educate post-1991 generations (52% of population) on reforms' transformative effects.

**By Neeraj Agarwal**

* * *

On 15 August 1947, when India achieved independence, the country was grappling with problems of widespread poverty and crises in agriculture as well as industries. The First Five Year Plan was launched in 1951 which mainly focused on the development of the primary sector.

Five years later, on 14 May 1956, the Second Five Year Plan, famously known as the Mahalanobis Model, was announced. The emphasis of this plan was on government-led industrialization. Mr. Nehru outlined the central role of government when he said, “The public sector must grow not only absolutely but also relatively to the private sector.”

Thus started the License-Permit-Quota Raj in India, wherein government control was so strong that it not only decided which company would produce what, but also the amount of production, as well as the price of commodities. With the nationalization of banks in 1969 and the Monopolies and Restrictive Trade Practices (MRTP) Act of 1970, the License Raj was further strengthened.

Life under license raj was characterized by scarcity of resources. The choices people had available to them in their day-to-day life were very limited. For example, cars were available in one colour, and only two to three brands of cars or scooters existed in the market to choose from. The specialty of License Raj was that licenses were themselves made a commodity, and a scarce one, at that. Hence, if a company wanted to expand production, it needed a license to do so, which was not easily available. A ‘market’ for licenses developed; licenses had a price. Business competition under the License Raj meant getting licenses before your competitors. Often businesses acquired licenses, not to produce, but to stop the other from expanding. As Dhirubhai Ambani said, the art of managing government relationships was most critical to business success.

The License Raj created a ‘scarcity economy’, and this scarcity also applied to foreign reserves since we practiced *‘swadeshi’*. The Balance of Payment crisis arose in the 1970s and worsened towards the end of 1980s. The balance of payments situation came to the verge of collapse in 1991, mainly because the current account deficits were financed by borrowings from abroad. The economic situation of India was critical; the government was close to default. With India’s foreign exchange reserves at USD 1.2 billion in January 1991 and depleted by half by June, an amount barely enough to cover roughly three weeks of essential imports, India was only weeks way from defaulting on its external balance of payment obligations.

India was in the need of an International Monetary Fund (IMF) bailout. The price of the bailout was the License Raj.

5:30 PM, 24 July 1991: The finance minister of India, Dr. Manmohan Singh presented the budget. He ended his speech with the historic lines: *“But as Victor Hugo once said, ‘no power on earth can stop an idea whose time has come.’ I suggest… that the emergence of India as a major economic power in the world happens to be one such idea. Let the whole world hear it loud and clear. India is now wide awake. We shall prevail. We shall overcome.”*

The Indian economy started on a path of economic liberalization, which has eventually impacted each and every sector of the country, and the life of every Indian citizen. The Balance of Payment (BoP) crisis was over by the end of March 1994 and foreign exchange reserves rose to USD 15.7 billion. Inflows of both Foreign Direct Investment (FDI) and Foreign Institutional Investment (FII) into India increased massively.

Fast forward 25 years to the present, we are an emerging super power and the fastest growing economy in the entire world. There are multiple factors that led us to these achievements, but no one can dispute the fact that economic reforms, which started in 1991, are one of the most important factors in the present success.

But why are these economic reforms so important? What were the changes that occurred due to them? More importantly, has the Indian economy reformed, or are we still struggling as a nation to achieve these reforms? These are questions which need to be answered. Given that 52% of present India was born after 1991, these questions become all the more important. Educating the younger generation, who will be the leaders of tomorrow, regarding the impact of public policy on their lives, is crucial. And the 25th anniversary of 1991 reforms provides us with the perfect opportunity to debate and discuss the history of life before and after reforms.

Centre for Civil Society (CCS) has launched the project [](http://indiabefore91.in/)**[“India Before 1991”](http://indiabefore91.in/)** with this objective. We are crowd-sourcing and documenting stories of life under the license raj from people across the country. Through these stories, we aim to educate the people of the country, especially the youth, about the state of the economy during that era and how life has changed because of the reforms.

(The website of the ‘India before 1991’ project can be accessed here: [India Before 1991](http://indiabefore91.in/))

* * *

**About Neeraj Agarwal**

## Have we Lost the Will to be Free? (C Rajagopalachari, 1965)

Original: https://www.spontaneousorder.in/p/rajaji-freedom-2

Author: Spontaneous Order

Published: 2016-03-17T18:26:21.000Z

Topics: economic-freedom, anti-socialism, swatantra-party, will-to-liberty

> Written in 1965, the present piece contains Rajaji’s reflections on liberty, and whether we had come to take our freedom for granted after securing independence in 1947. This piece has been taken from the Swatantra Souvenir: a collection of Rajaji’s s

**Summary:**

In this 1965 reflection, C. Rajagopalachari (Rajaji) argues that while India gained political independence in 1947, its citizens have lost the will to be free, allowing a socialist government to usurp longstanding economic freedoms without resistance. Drawing on Benjamin Franklin's post-Philadelphia Convention remark—'a republic, if you can keep it'—Rajaji contends that freedom rests not on constitutions but on an inner 'burning and alive' will to liberty, echoing an American judge's view that no law can save it otherwise. He puzzles over Congress Party victories in by-elections despite evident public dissatisfaction at large meetings, attributing this to a 'slave mentality' Gandhi fought, which manifested as mere anti-British sentiment rather than positive love of freedom. Socialist controls on production and prices ultimately control persons, disrespecting human personality and fostering governmental hunger for slaves, leading to acceptance of unhappiness and dependence. Rajaji warns that India risks a sub-human state of preferring bondage to freedom's responsibilities but holds hope: the Swatantra Party, like Gandhi's 1920 Swaraj movement sparked atop the Khilafat agitation, can lead liberation from the 'permit-licence-raj' through a few dedicated individuals.

**Key points:**

- India's post-1947 socialist government eroded economic freedoms, met with little resistance due to weakened will to liberty after centuries of foreign rule.
- Congress wins by-elections despite public disapproval because voters lack the will to be free, exhibiting a 'slave mentality' Gandhi identified.
- Economic controls under socialism dictate personal actions, robbing individuals of freedom and developing state authoritarianism.
- Reviving the inner will to freedom is essential to escape state-socialist entanglements, more vital than recognizing socialism's economic irrationality.
- Swatantra Party can liberate India from permit-licence-raj, akin to Gandhi's unexpected 1920 Swaraj success.

**By Ujwal Batra**

* * *

*Written in 1965, the present piece contains Rajaji’s reflections on liberty, and whether we had come to take our freedom for granted after securing independence in 1947. This piece has been taken from the  Swatantra Souvenir: a collection of Rajaji’s speeches and writings.* 

Shortly after the Philadelphia Convention, the story goes that Benjamin Franklin was asked by a lady about the nature of the Constitution hatched at the convention, to which he replied “we have given you a republic, madam, if you can keep it”.

In 1947 we were emancipated from British sovereignty. We were made free. But in course of time the Government into whose hands we placed ourselves has, in the name of socialism, taken away all the economic freedom that the citizens enjoyed for thousands of years, and the people have shown little inclination to resist this usurpation, the will to be free not being exercised.

Two elements are relevant in this connection. One is the basic human desire to be free or its obverse, the dislike to be ruled by any external authority. The other element is the economic rationality of socialism, apart from the question of the citizen’s liberty. Even when the second point is thoroughly discussed and accepted, viz., the irrationality of disregarding natural laws and seeking to increase production and furthering prosperity through bureaucratic management, replacing private ownership and private management, the economic conviction does not take shape in action, where the will to be free is not strong enough but has been weakened by long sufferance of foreign rule. People appear to be quite willing to suffer bondage as they did before 1947.

Freedom rests not on constitutions but on the will to be free. Freedom endures only in the measure, and only so long as this will last. Liberty lies in the hearts of men and women. When it is not there burning and alive, no constitution, no law, no court can save it, as an American judge put it.

Often have I felt surprised when at by-elections the Congress Party won inspite of widespread dissatisfaction with Congress rule and disapproval of Congress policies shown beyond doubt at vastly attended public meetings. I have asked myself the question, why do these people get into the Congress lorries and buses and jeeps and go and vote for shackles? Is it to be attributed to bribery? Or terror of pains and penalties likely to issue from disobedience? Surely, I have said to myself, this cannot be. The puzzle can be resolved by this absence of the will to be free. Gandhiji used to call it slave mentality. He fought hard to eliminate it. But the reaction was just anti-Britishism, not, as we now regretfully realize, the positive love of freedom and a readiness to sacrifice for retaining that precious possession against anyone interfering with it. ‘Our’ own Government can be as great an enemy of freedom as any foreign usurper.

The problem is, therefore, how to revive this will to be free and to recover it from the terrible entanglements of the State-socialist economy. It was not so entangled when the British Parliament governed us.

Controlled production, controlled prices and other similar controls mean in the ultimate analysis controlling of persons. Under a controlled economy, it is persons, not things, who are told by some persons who are collectively called government what they must or must not do. It is this that goes contrary to respect for human personality, gradually robs the victims of the will to be free, and develops in the government a hunger for owning slaves. Happiness, even mere physical happiness, requires not only food, clothing and shelter; but also a sense of freedom. A shortage or total deprivation of any of these essentials makes men and women unhappy. Whether the rope that strangles human beings is made in England or elsewhere, or is of indigenous make, makes no difference.

Men and women can by continued force be got to accept unhappiness as a normal condition either by society or governments. And this can be carried up to a point when protests and resistance disappear, and a state of dependence is even preferred by them to the responsibility which goes with freedom. One may wonder whether the electorate in India has come to that stage; or whether we can save ourselves from that sub-human condition. The Swatantra Party hopes that this is possible. It has been truly said that every significant movement in history has been led by one or just a few individuals with a small group of energetic supporters. We saw it, not so long ago, in Gandhi’s Swaraj movement in 1920, which came like an accident on top of the Khilafat movement. Liberation from the present permit-licence-raj will come, too, in that way.

July 10, 1965

*You can access the original piece [here.](http://indianliberals.in/uploads/periodicals/PDF_269_qohdkgSixth%20National%20Convention%20Rajaji%20Nagar%20-%20Swatantra%20party.pdf) Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Ujwal Batra**

## Black Money may be good for us!

Original: https://www.spontaneousorder.in/p/second-economy

Author: Spontaneous Order

Published: 2016-03-15T17:49:43.000Z

Topics: black-money, shadow-economy, tax-evasion, bureaucratic-corruption

> “Kaushik Basu, the chief economist of the World Bank and former chief economic adviser to the Indian government, says the nation’s tradition of petty corruption helped India avoid the worst of the banking crisis that has crippled most other large econ

**Summary:**

Siddhant Kohli argues from a classical-liberal viewpoint that India's shadow economy, including black money and petty corruption, has been beneficial, providing economic robustness and a safety net during global crises like the banking meltdown, as noted by Kaushik Basu, former Chief Economic Adviser. He highlights that substantial household savings in cash rather than securities insulated India. Recent government measures to curb cash—such as PAN requirements for transactions, ₹50,000 cash deposit limits, and a 1% excise tax on jewellery—have led to sluggish consumer spending, real estate slump, and overall economic slowdown, despite official 7% growth claims adjusted by base year changes. Kohli contends corruption 'makes this country function' by incentivizing risk-averse bureaucrats in an inefficient system of archaic laws. Tax evasion is rationalized as a response to government's poor delivery of services like electricity, water, and security, despite charges, rendering direct taxes unjust. He proposes tolerating the shadow economy alongside the formal one, abolishing or reducing direct taxation, and shifting to progressive taxation on goods and services for balance.

**Key points:**

- India's shadow economy and petty corruption helped avoid the worst of the global banking crisis, per Kaushik Basu.
- Government cash curbs like ₹50,000 deposit limits and 1% jewellery tax have caused real estate slumps and reduced consumer spending.
- Corruption incentivizes bureaucrats to act in an inefficient administrative system.
- Tax evasion is justified by the government's failure to deliver basic services despite tax charges.
- Solution: Reduce direct taxes and adopt progressive goods/services taxation to allow shadow economy coexistence.

**By Siddhant Kohli**

* * *

**“Kaushik Basu, the chief economist of the World Bank and former chief economic adviser to the Indian government, says the nation’s tradition of petty corruption helped India avoid the worst of the banking crisis that has crippled most other large economies in the last few years.”(1)**

Several eminent economists have over the years argued that the robustness of the Indian economy exists substantially due to a lot of [money](http://www.bbc.com/news/world-asia-india-35610332) *[not being a part of the system.](http://www.bbc.com/news/world-asia-india-35610332)* [](http://www.bbc.com/news/world-asia-india-35610332)This also is attributable to the fact that a substantial portion of savings in Indian households exists in saving accounts and cash, and not as investments in securities or bonds.

The government has over the last two years brought in several measures to reduce the flow of physical money in our economy, trying instead to make it cashless with increasing reliance on credit and debit cards, and other forms of electronic transfers.  The limit on cash transactions without PAN, the 50,000/- cash deposit limit in accounts, and the like. The 2016 budget also brought in a 1% excise tax on jewellery, aimed at bringing in more transparency to a sector widely considered to be a hotbed of large scale cash transactions, second only to real estate.

The effect of the measures listed above is sluggishness in consumer spending in b2c markets, a slump in real estate, a drastic reduction in consumer spending on jewellery (even before the 1% excise tax), and a slowdown in the economy in real terms (the FM and the government have been talking about the 7% growth rate-the figure is potentially misleading due to a change in the base year of calculation).

The question is–if this shadow economy, so to speak, actually buoys consumer spending, provides a safety net in times of global crises, and even is the reason behind rise in real estate and demand in commodities, why all the effort to stop it?

The two fold argument to answer that question is one, corruption is the sum and substance of this ‘black money’, and second it is either the cause or consequence of substantial tax evasion.

To begin with, corruption makes this country function. In the labyrinth of an infamously inefficient bureaucracy, archaic laws, and inefficient legislature, the personal interest of officers is what makes progress. The officers of the Indian government only have an incentive to take additional risk to move files when they are duly compensated for it. It may be their job in the first place, but why would a regular John want to stick his neck out for anything other than self gratification?

Secondly, most small scale tax evaders argue that they don’t like to pay tax since they feel that the money paid will in any case be misappropriated by the government to a very large extent. Moreover, the government charges for electricity but every house needs an inverter/generator; the government charges for water but every house needs a boring/storage tank; the government charges for gas and utilities but a substantial portion of the cylinders bought are in the black market; the government charges for law and order but most businesses and community accommodation have their own security provisions; the government charges for public transportation but its hard to commute without your own vehicle. Even the social schemes launched only have a trickle down effect on the target base. In light of this sordid state of affairs, with what authority can the government force us to pay taxes, and moreover what argument can it present to those unwilling to do so? In fact, doesn’t levying taxes also reduce the level of happiness among the populace?

Perhaps the solution lies in allowing this shadow economy to exist and run concurrently with the white economy. What if an abolition or reduction in direct taxation and a progressive taxation on goods and services is the way forward to meet a balance?

\*\*\*\*

[(1) How ‘black money’ saved the Indian economy (BBC India)](http://www.bbc.com/news/world-asia-india-35610332)

***Siddhant** **Kohli** is currently a third year student of law looking to further a career in International litigation. He is interested in travelling, reading, and golf.* 

* * *

**About Siddhant Kohli**

## Aadhaar – A transparent tool for all

Original: https://www.spontaneousorder.in/p/aadhaar-tool

Author: Spontaneous Order

Published: 2016-03-08T13:40:33.000Z

Topics: aadhaar, direct-benefit-transfer, privacy, government-efficiency

> Luis Miranda is the Chairman of Centre for Civil Society. This post was originally published on Luis’ blog at ForbesIndia.com Let’s hope that Parliament actually works this session and that petty politics does not derail the efficient operation of our

**Summary:**

Luis Miranda praises the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016, as a bipartisan innovation originally from the UPA government under Nandan Nilekani, now championed by PM Modi after initial BJP criticism. By February 2016, the world's largest national ID project had issued 980 million unique 12-digit numbers with biometric and demographic data. From a classical-liberal perspective, it promises dramatic efficiency in public delivery, reducing corruption and black money via Direct Benefit Transfers (DBT) and applications like PDS, NREGA, Sarva Shiksha Abhiyaan, passports, land titles, e-KYC, voting, and biometric attendance. The Bill clarifies Aadhaar is not proof of citizenship, mandates strong privacy protections—limiting use to consented purposes, barring race/caste/religion data, enabling user access/rectification, and imposing imprisonment for breaches. DBT savings alone will cover costs, as per Nilekani and Viral Shah's 'Rebooting India'. Miranda calls for parliamentary support against opponents profiting from inefficiencies, automation fears, and opacity.

**Key points:**

- Aadhaar issued 980 million unique IDs by February 2016, enabling efficient subsidy delivery via DBT with savings covering project costs.
- The Bill ensures privacy by restricting data use to consented purposes, prohibiting caste/religion details, and penalizing breaches with imprisonment.
- Aadhaar supports services like PDS, NREGA, e-KYC, voting, and biometric attendance without serving as proof of citizenship.
- Support the Bill to counter those profiting from systemic inefficiencies and fearing transparency.

**By Luis Miranda**

* * *

[

![Luis Miranda Chairman, CCS](https://substackcdn.com/image/fetch/$s_!yw3Q!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F7f090f65-aca3-4452-b544-b572aca04164_100x100.jpeg "Luis Miranda Chairman, CCS")



](https://substackcdn.com/image/fetch/$s_!yw3Q!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F7f090f65-aca3-4452-b544-b572aca04164_100x100.jpeg)

Luis Miranda Chairman, CCS

*Luis Miranda is the Chairman of Centre for Civil Society. This post was originally published on [Luis’ blog at ForbesIndia.com](http://forbesindia.com/blog/accidental-investor/aadhaar-a-transparent-tool-for-all/)*

Let’s hope that Parliament actually works this session and that petty politics does not derail the efficient operation of our democracy yet again. One of the important pieces of legislation that cuts across party lines was tabled a few days back – the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016.

Aadhaar was the historic innovation brought in by the previous UPA government and steered by Nandan Nilekani, the chairman of the Unique Identification Authority of India (UIDAI) and a co-founder of Infosys. The BJP initially criticised it and there were fears that Narendra Modi would scrap it after becoming prime minister. But in a remarkable turnaround, after a meeting in July 2014 with Nilekani, Modi became a big champion of Aadhaar and is making it a key pillar of his reforms agenda. The introduction of this bill is a big step towards catapulting India forward in the digital era, dramatically improving the efficiency of public delivery systems and reducing corruption and black money. The Aadhaar project is the world’s largest national identification project and the way it has been rolled out is something that all Indians should be proud of. At the end of February 2016, 980 million numbers had been issued – something that most people said would be impossible in a little over five years.

There have been a few concerns about Aadhaar, mainly related to privacy and citizenship. The Aadhaar Bill does not make Aadhaar a proof of citizenship or domicile. It is only a unique 12-digit number that each resident in India can use, which contains biometric and demographic data stored in a centralised database.

And the bill is strong on privacy. It limits the use of information to the purpose for which the user has given consent. Users can access their own information and rectify it. No demographic or identity information can be displayed publicly. The system cannot collect data beyond essential details like name, address, date of birth, sex, email address and phone number. It cannot collect details on race, caste or religion. There are stringent restrictions on how the information can be accessed and used for national security reasons. Finally, there are stringent penalties, including imprisonment, for breach of privacy.

The Aadhaar number helps in delivering a host of services and products in a seamless manner, starting off with Direct Benefit Transfers. The savings from this itself will more than cover the cost of the project. As Nilekani and Viral Shah outlined in their book, ‘*Rebooting India*’, the multiple uses of Aadhaar include social security schemes (like public distribution systems, NREGA and Sarva Shiksha Abhiyaan), subsidy delivery, government services (like passport and land titles), e-KYC (to open bank accounts), voting and biometric attendance systems. This bill gives a statutory framework to make all of this happen.

Who doesn’t want Aadhaar? Those who fear automation. Those who profit from the inefficiencies in the current system. Those who have something to hide. Those who fear losing power. Those who fear change. These people will fight hard against the higher level of transparency and efficiency that Aadhaar will bring in.

It is important that we support this bill and ensure that it becomes law.

* * *

**About Luis Miranda**

Luis Miranda connects dots. He started investing in India’s infrastructure a long, long time ago. He started IDFC Private Equity and was earlier a part of the start-up team of HDFC Bank. Luis has invested in and has been on the boards of companies like GMR Infrastructure, L&T Infrastructure, Delhi International Airport, Gujarat Pipavav Port, Gujarat State Petronet, and Manipal Global Education. Luis today spends most of his time, together with his wife, on non-profits. He is Chairman of CORO and Centre for Civil Society and Managing Trustee for Nadathur Trust. Other organisations include 17000 Ft Foundation, SNEHA, Muktangan, Sunbird Trust and Samhita Social Ventures. Luis graduated with an MBA from Chicago Booth and is a Chartered Accountant.

## Budget: Politically Clever and Economically Unsound (Nani Palkhivala, 1971)

Original: https://www.spontaneousorder.in/p/budget-palkhivala

Author: Spontaneous Order

Published: 2016-03-03T15:36:29.000Z

Topics: indian-budget, high-taxation, brain-drain, economic-stagnation

> The eminent liberal, lawyer, and economist Nani Palkhivala (1920-2002) was known for his analysis of and speech on the annual budget. Here we post excerpts of his speech on the 1970-71 Union Budget, later published in a monograph by the Forum of Free En..

**Summary:**

Nani Palkhivala critiques the 1970-71 Union Budget as politically clever but economically unsound, employing a 'pre-Budget technique' of hyping extreme tax threats in February to make the actual 93.5% maximum marginal income tax and 12% wealth tax appear mild and even cheerful. This dramatic framing elicits favorable public response without quantitative analysis of its burdens. Presented against grim realities—mounting unemployment, stagnant per capita income, tardy gross national product growth, poor exports, and low public/private savings—the Budget fails to equip India for economic challenges. Instead, it assaults the three vital human attributes of integrity, industry, and intellect, driving top talents in medicine, science, technology, and business to emigrate due to oppressive restrictions and confiscatory taxation. Palkhivala argues that such policies, prioritizing political survival and gimmicks over sound economics, will accelerate the brain drain of India's finest young minds. From a classical-liberal lens, the Budget exemplifies fiscal oppression undermining individual incentives and national prosperity.

**Key points:**

- The pre-Budget technique conditions public acceptance of 93.5% income tax and 12% wealth tax by exaggerating worse threats beforehand.
- The Budget ignores key economic woes including rising unemployment, stagnant per capita income, slow GNP growth, weak exports, and low savings.
- High taxes and restrictions attack integrity, industry, and intellect, accelerating brain drain among top Indian youth in science, medicine, and business.

**By Ujwal Batra**

* * *

*The eminent liberal, lawyer, and economist **Nani Palkhivala** (1920-2002) was known for his analysis of and speech on the annual budget. Here we post excerpts of his speech on the 1970-71 Union Budget, later published in a monograph by the Forum of Free Enterprise. The entire speech can be found [here.](http://indianliberals.in/uploads/periodicals/PDF_324_5dbmebThe%20Union%20Budget%201970-71.pdf)* 

Ancient India made a signal contribution to the growth of human civilization–it gave a new direction to philosophy and gave imperishable expression to “thoughts that wander through eternity “. Emerson regarded the Upanishads as the feast of reason and the flow of soul par excellence. Modern India has made three contributions to civilization–the Bandh, the Gherao, and the pre-Budget technique. The first is political oppression, the second is industrial oppression, and the third is well calculated to condition the public mind for fiscal oppression.

The pre-Budget technique consists in making it widely known throughout the month of February that such levels of taxation would be inflicted on the people as to make them hate the very sight of money and hardly leave a shirt on their backs, so that when actually the Budget is introduced with 93.5 per cent income tax and 12 per cent wealth tax as the maximum marginal rates, the Budget evokes a favourable, and in fact a cheerful response.

The Union Budget for 1970-71 has been called an “imaginative” Budget. It is only so in the sense that it imagines certain consequences to ensue from the Budget which are contrary to all known motivations of human nature and all rules of sound economics.

It was Justice Holmes who once remarked that most men judge things dramatically and not quantitatively. This explains the dramatically favourable general response to the Budget, without quantitative analysis of the burdens it imposes and the effects it can be expected to produce on the national economy. If one were to sum up the effect of the Budget in one sentence, one would say that it is politically clever and economically unsound.

After all, a Budget is not intended to be merely an exercise in political survival or an essay on political gimmicks. It is intended to equip the country to face the grim realities of the economic situation. A fair evaluation of the Budget can be made only against the background of the following calamitous realities:

1.   Mounting figures of unemployment.
    
2.  The stagnancy of the per capita income.
    
3.  The tardy rise in the gross national product.
    
4.  The poor performance on the export front.
    
5.  The paucity of public and private savings.
    

\*\*\*\*

The human attributes in citizens which are most precious to a nation are integrity, industry and Intellect — the three ‘I’s.’ The Budget makes a frontal attack on all these three priceless attributes. Our governmental policies are mainly responsible for the fact that among the youth of India some of the finest brains in medicine and science, technology and business management, have chosen to emigrate and settle in other countries where they can work without irritating official restrictions and interference, and can also keep a substantial part of the fruits of their own labour. With this year’s Budget, the exodus sf some of our best young brains is bound to increase.

*You can read the original, unabridged speech [here.](http://indianliberals.in/uploads/periodicals/PDF_324_5dbmebThe%20Union%20Budget%201970-71.pdf) Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.* 

* * *

**About Ujwal Batra**

## Budget 2016: Enhanced focus on Higher and Skills Education Welcome!

Original: https://www.spontaneousorder.in/p/budget-2016-enhanced-focus-on-higher-and-skills-education-welcome

Author: Spontaneous Order

Published: 2016-03-02T13:04:32.000Z

Topics: higher-education, skill-development, school-education-quality, indian-budget

> Union Budget 2016-17 has clearly come out with greater focus on quality of higher education in the country. Handful of new schemes, both for Higher Education and Skill Development, testify government’s commitment towards leveraging the demographic divid

**Summary:**

Union Budget 2016-17 demonstrates a stronger emphasis on higher education and skill development to leverage India's demographic dividend, with new schemes signaling government commitment, while school education sees a modest 1368 crore increase and a welcome shift toward quality under Sarva Shiksha Abhiyan (SSA), moving beyond mere infrastructure. However, the absence of provisions for assessments—despite prior 50 crore allocations remaining underutilized—is alarming, as 'what cannot be measured cannot be improved,' essential for addressing high dropout rates. The SSA budget rises by 500 crores, but persists with institutional grants rather than student-focused funding, perpetuating inefficiencies like 80% spending on teacher salaries and underuse of Prarambhik Shiksha Kosh. Positives include 62 new Navodaya Vidyalayas as quality exemplars, 300 career support centers for pre-skilling counseling, a National Board for Skill Development Certification, and entrepreneurship training. Concerns arise over 1500 multi-skilling centers potentially replicating Industrial Training Institutes' (ITIs) employability failures. From a classical-liberal lens, the budget advances quality and skills but requires assessments, outcome-based funding, and scaling school-skills integration like Nai Manzil to all schools for true reform.

**Key points:**

- Budget 2016-17 allocates 1368 crore more to school education with SSA shifting to quality focus, but omits assessments despite past underutilization of 50 crore.
- SSA funding increases by 500 crore yet sticks to institutional grants over student-centric models, with 80% spent on salaries amid high dropouts.
- Establish 62 new Navodaya Vidyalayas and 300 career support centers to boost quality secondary education and pre-skilling counseling.
- 1500 multi-skilling centers risk repeating ITI failures; scale schemes like Nai Manzil for skills integration across all schools.

**By R J**

* * *

Union Budget 2016-17 has clearly come out with greater focus on quality of higher education in the country. Handful of new schemes, both for Higher Education and Skill Development, testify government’s commitment towards leveraging the demographic dividend of this country. With a meager increase of 1368 crores in school education budget, one may conclude that school education has received lesser attention in terms of new budgetary provisions or schemes in Budget 2016-17. However, Hon Finance Minister’s acknowledgement that the quality of school education matters, followed by the announcement that *Sarva Shiksha Abhiyan* will focus more on quality of education must be welcomed. This is a significant change from previous budget discussions which concentrated largely on building new schools or creating school infrastructure with little to no focus on actual quality of education. One key component in enhancing quality of education is assessments, which do not seem to appear in this year’s budget discussion. This is alarming particularly when MHRD, in previous two budgets, even after allocating a small amount (Allocated budget of INR 50 Crore in 2015-16) for assessments has not managed to fully utilize the allotted funds. As the saying goes, what cannot be measured, cannot be improved. It is important to evaluate quality through large scale assessments before resolving to improve it in the months to come through SSA or any of the other institutions.

While it is tempting to call out Hon Finance Minister on his silence on school education through his budget speech, it is important to note that gross budget allocation for education sector has shown marginal increase (INR 1368 crore) from the previous year’s revised estimates. This is assuring when seen together with Minister’s comment on quality of school education. We hope that the revised focused on quality will also help overcome the challenge of access as reflected by alarming drop-out rates at both elementary and secondary education stages. The challenge in this year’s budget is primarily in terms of approach to funds allocation for school education. Looking at the budget allocation for SSA which has increased by approximately 500 crores from the previous year’s revised budget estimates, it is clear that the government has continued with its traditional approach of allocating grants for institutions and not for students. This is alarming when underutilization of *Prarambhik Shiksha Kosh* followed by inefficient use of the budget (near 80% of the budget spent on teacher salaries) itself have plagued the education system for years.

Over the years Navodaya Vidyalayas have emerged as bright spots in government education system and the announcement this year to create 62 new Navodaya Vidyalayas can be seen as a small token of acknowledgement of the good work that these schools have been doing in delivering quality secondary education.

On skill education front two announcements stand out this year. First which must be commended is of establishing 300 career support centers. Providing counselling support to students before enrolling them in myriad of skilling programs is a step in the right direction. Second announcement of establishing 1500 multi skilling centers however raises a serious concern. Would these centers be any different from ITIs, which have essentially been the main reason for poor state of employability skills in India?

Overall the establishment of National Board for Skill Development Certification and, the provision of Entrepreneurship Education and Training are welcome moves. In terms of integration of skill education with school education, schemes such as *Nai Manzil* which focus on providing skill education to children studying in Madarasas need to be scaled up to all schools. While this year’s budget has remained silent on this issue, its certainly something to desire for either in one of the future budgets or in the much awaited New Education Policy.

* * *

**About R J**

## Why India needs a Robust Bankruptcy Code

Original: https://www.spontaneousorder.in/p/bankruptcy-code

Author: Spontaneous Order

Published: 2016-03-01T15:41:04.000Z

Topics: bankruptcy-law, insolvency, ease-of-doing-business, creditor-rights

> Let’s imagine a scenario where the government doesn’t let dead people be immediately cremated or buried. It lets them rot for years with vultures picking away the body while the family runs helter-skelter just to get the death certificate and the inhe

**Summary:**

India's handling of business 'deaths' is abysmal, taking an average of 10 years to close a business compared to 1.7 years in China, with only 12% debt recovery versus 36% in China, as per a Raghuram Rajan-led committee. Just as efficient birth and death registration for people allows focus on the living, businesses require streamlined insolvency processes to transfer assets effectively and foster entrepreneurship. The new Insolvency and Bankruptcy Code (IBC), influenced by the US Bankruptcy Code, introduces time-bound resolution and a single jurisdiction, aiming to improve India's ease of doing business ranking, clarify insolvent firms for investors, develop credit markets, and encourage entrepreneurship by amending 12 laws including the Companies Act 2013. However, gaps persist: unclear creditor priority lists allow last-minute contract modifications favoring secured creditors, potentially letting well-positioned ones profit unscathed at the expense of national interest. The code must address international comity in bankruptcy to attract global investment, balancing local courts' nationalistic tendencies with transparency and global rules for a robust framework.

**Key points:**

- India takes 10 years on average to close a business and recovers only 12% of debts, far worse than China's 1.7 years and 36% recovery.
- The Insolvency and Bankruptcy Code introduces time-bound resolution and single jurisdiction to streamline insolvency.
- IBC supports credit markets and entrepreneurship by providing investor clarity on sick firms.
- Unresolved issues include creditor priorities, last-minute modifications, and need for international comity to balance national interests.

**By Smriti Agrawal**

* * *

Let’s imagine a scenario where the government doesn’t let dead people be immediately cremated or buried. It lets them rot for years with vultures picking away the body while the family runs helter-skelter just to get the death certificate and the inherited property. Would you live in such a nation?

Just like people, business ventures are born and die every day. Just like people, we need effective ways to register their births and handle their deaths so that we can focus on the living rather than the terminal points. Just like people, business ventures often die with some assets and it is necessary to effectively transfer this to the one with the rights.

While India manages people’s births and deaths somewhat effectively, in case of businesses it is abysmal. Here is what a Raghuram Rajan led committee reports regarding India’s bankruptcy law:

> *“Closing a business also takes a long time in India – on average 10 years in India compared to 1.7 years in China. Among BRICs, India recovers the least value at the end of the bankruptcy process – 12 percent of debts – while China recovers 36 percent of debts*.”

The present Code draws influence from the US Bankruptcy Code, and tries aligning the inconsistencies: presenting time bound resolution and single jurisdiction. Nevertheless, the Code will help improve India’s ease of doing business ranking, (mentioned in the objects and reasons of the bill) as it will point out sick or insolvent firms and provide a clear picture to the investors. Economically speaking, it answers the questions for foreign investors as whether such companies are suitable to enter into transactions with. Thus, with the help of this Code, investors will be able to take decisions in the right directions. Since, this bill aims at preparing an effective legal framework for timely resolution on insolvency and bankruptcy, it would support the development of credit markets and encourage entrepreneurship.

The Insolvency and Bankruptcy Code, introduced in the Parliament seeks to fight the anomalies that exist in the Indian system. It seeks to amend as many as 12 existing legislations including Companies Act 2013, Income Tax Act and Payment and Settlement Systems Act 2007, and other piecemeal legislations. The Code indeed is a bold move towards filling up many gaps – but what regulates the priority list of creditors? It is not uncommon for individual contracts between the liquidating party and the secured creditor to be modified at the last minute, perhaps days before the bankruptcy proceedings. It remains to be seen how this would be resolved, and a clearer legal command would be needed to tackle this.

Well-positioned creditors will have greater leverage and better bargaining power under the new set of rules, and would thus profit from restructuring under the new bankruptcy code and walk away unscathed – where would that leave national interest?

India Inc. in order to attract business interest has to align Bankruptcy laws to achieve comity. The insolvency disputes would continue to arise and closed insolvency laws would restrict transparency in proceedings. The courts in India have traditionally been prone to local favouritism and have been protective of national interests. For some it might look premature to talk about international comity in bankruptcy laws. But from an investment point of view, it makes sense to deal with the situation of balancing national interest with global rules. But how far does the bankruptcy code go in this regard?

*Smriti Agarwal is a Graduate student at Harvard Law School, primarily focusing on Banking and Finance. She recently worked with the Reserve Bank of India as a Regulator. Prior to that, she worked with Clifford Chance, New York in the area of Private Equity and Banking and Finance.* 

* * *

**About Smriti Agrawal**

## Is a Dead Constitution better than a Living One?

Original: https://www.spontaneousorder.in/p/constitution-scalia

Author: Spontaneous Order

Published: 2016-02-29T14:51:28.000Z

Topics: originalism, living-constitution, basic-structure-doctrine, indian-constitution

> (Siddhant Kohli wrote a response to the piece published below, which can be accessed here: ‘Judicial Activism and India’s Living Constitution.’) “It is a principle of Constitutional spirit that the process of amending the Constitution shall not be

**Summary:**

Ujwal Batra contrasts Justice Antonin Scalia's originalist view of the US Constitution as a 'dead' document—fixed in meaning at enactment to prevent judges from imposing evolving interpretations—with India's Constitution, explicitly designed as a 'living' one by B.R. Ambedkar for easy amendment. The US has seen 27 amendments in 227 years, while India has nearly 100 in 66 years, complicating originalist readings due to its length and complexity. The Kesavananda Bharati case established the 'basic structure' doctrine, deeming certain features unamendable by Parliament, though undefined and decided case-by-case, providing a precedent for preserving freedoms. A reader, R. Nanjappa, warns that India's Constitution endures only due to past guardians like Palkhivala and Rajaji, but judicial divisions and Emergency-era lapses, plus US trends toward living interpretations, threaten the basic structure's survival. Batra concludes that whether 'living' or 'dead,' the Constitution's protection of liberties hinges on the vigilance of the Indian people as its true keepers, echoing classical-liberal emphasis on fixed rule of law over judicial activism.

**Key points:**

- Scalia's originalism insists the Constitution's meaning is fixed at enactment to avoid unelected judges creating new rights.
- India's Constitution, unlike the US's 27 amendments in 227 years, has nearly 100 in 66 years, reflecting its deliberate 'living' design.
- The basic structure doctrine from Kesavananda Bharati limits amendments to protect core features, but lacks explicit definition, leaving it to judicial discretion.
- India's constitutional stability relies on public and judicial vigilance, as past leaders like Palkhivala prevented abuses, but trends risk erosion.

**By Ujwal Batra**

* * *

*(**Siddhant Kohli** wrote a response to the piece published below, which can be accessed here: [‘Judicial Activism and India’s Living Constitution.’](https://spontaneousorder.in/living-constitution/))*

**“It is a principle of Constitutional spirit that the process of amending the Constitution shall not be used to break the constitution- but this is not written in the Constitution itself.”**

Justice Antonin Scalia, an influential American Supreme Court lawyer passed away earlier this month. He leaves behind a rich legacy, albeit a controversial one. He belonged to the conservative wing of the Supreme Court, and differed significantly from many of his contemporaries in his strict interpretation of the Constitution.

Antonin Scalia was an originalist—a school of constitutional interpretation that holds the *‘meaning of the constitution as fixed at the time of enactment.’* The constitution, in his view, was **not a living document**—it didn’t need to be interpreted differently with the course of time and with each successive generation. The constitution was *‘dead, dead, dead’*; and in its deadness lay its glory. Quoting Scalia:

*“The only good Constitution is a dead Constitution. The problem with a living Constitution in a word is that somebody has to decide how it grows and when it is that new rights are – you know — come forth. And that’s an enormous responsibility in a democracy to place upon nine lawyers, or even 30 lawyers.”* 

Scalia’s intent was to preserve a document and interpret is as clearly as was humanly possible. The constitution was not to be tampered with, and this was not born out of an unthinking dogma, but from a belief that the original intent and moral convictions of the constitution would be lost if we progressively kept diluting them to keep up with the fad at the time. In interpreting the constitution, he echoed Madison: “If it, (the Constitution), is to mean whatever we want it to mean, then we should hasten the parchment to the fire.”

It is a different question whether Scalia did justice to the constitution whose essence and intent he swore to uphold. As rigid as his interpretation sounds, it is one that has much merit, even if one does not completely agree with it.

Contrast the American Constitution with the Indian one.

While there are schools of thought that interpret the American constitution as being either ‘living or dead’, the Indian constitution *was conceived as a ‘living document.’*  The founders made it far easier for it to be amended. The architect of the Constitution, B R Ambedkar, noted in his concluding speech that he had little doubt that it would be amended with time. He pointed out that compared to the American or the British constitution, the process of amending our constitution had been made far simpler. \[1\] The American constitution has had 27 amendments in its 227 year history; the Indian constitution, on the other hand, has had nearly a 100 in the 66 years of its existence.

Scalia probably would not have liked defending such a document, and would have had a harder time in deciphering its original intent. Our constitution probably does not lend itself too easily to an originalist interpretation, simply because it is *too darn long*. It would, in its complexity allow for a greater variety of interpretations, even if we try to determine its original intent.

Indeed, the question of what is central to the constitution is one that our democracy has grappled with. That was the question in *Keshanvananda Bharti* where the court came up with the famous ‘basic structure’ doctrine: the principle that the constitution has *certain basic features which cannot be amended by the constitution.* Now the curious fact is that it has not been conclusively established what is *basic to the constitution.* Not being explicitly defined, the court is to decide case by case on what is basic and what is not. So while there might be disagreement on what is central and unalterable in the constitution, we have in principle recognised that some matters need to be beyond the amending powers of the parliament. That is an important precedent if we are to preserve freedom in this country, and one our democracy has come to recognise.

A reader, Mr R Nanjappa, had shared some comments [on a previous post](https://spontaneousorder.in/constitution-india-sin/), and they are very pertinent in this discussion:

***“Our Constitution has worked so far, only because we had people who were soaked in the spirit of the rule of law, and had good sense, above all.** And we had eminent Judges and great leaders of Constitutional law like **Palkhivala,** and guardians like **Rajaji** exercising eternal vigilance, who would raise their voice when needed. But we saw how our Judges acquiesced in the demands of committed judiciary during the Emergency and how thin is the consensus on the basic framework or basic structure of the Constitution. Even our eminent lawyers today are not agreed on the issue. If the Judiciary itself is divided on the concept of basic structure, what is the remedy?*

***It is a principle of Constitutional spirit that the process of amending the Constitution shall not be used to break the constitution- but this is not written in the Constitution itself. Having observed our judiciary and general constitutional matters for the last 50 years, I do not have the confidence that the basic structure of the Constitution will remain for the next 50 years- either in law or in judicial interpretation..** This idea or feeling is strengthened by the fact even in the US, leftist (calling themselves liberal) groups and judges are interpreting the Constitution in ways not in accordance with the spirit of the framers of the Constitution. After all, the US served as a model for us too, and today, they are setting global standards in everything.. So how long will it be here before we too follow such trends!”*

It may be that our democracy comes closer to a consensus in the coming generations, and that the constitution comes to be interpreted in a manner that affords greater protection to our liberties. Or it may be, as Mr Nanjappa pointed out, that the basic structure doctrine would be diminished, in ‘law and in judicidal interpretation.’ That is a choice not merely before our judges and politicians, but with the people of India. For whether the constitution should be a living or a dead document, is it of little consequence if it does not live in the hearts of the people, who are its only keepers.

*(Siddhant Kohli wrote a response to the present piece, which can be accessed here: [‘Judicial Activism and India’s Living Constitution.’](https://spontaneousorder.in/living-constitution/))*

\*\*\*\*

[(1) India’s Living Constitution, Times of India](http://timesofindia.indiatimes.com/india/Indias-Living-Constitution/articleshow/5490343.cms)

* * *

**About Ujwal Batra**

## Make in India: but at what cost?

Original: https://www.spontaneousorder.in/p/make-india-cost

Author: Spontaneous Order

Published: 2016-02-24T17:17:18.000Z

Topics: make-in-india, protectionism, pharmaceuticals, free-trade

> In a recent move, the government removed the import duty exemptions on 74 lifesaving drugs, in order to give impetus to its ‘Make in India’ campaign. Let that sink in. Drugs that are used in the treatment of Cancer, Parkinson’s and a host of other v

**Summary:**

The Indian government's removal of import duty exemptions on 74 lifesaving drugs, including treatments for cancer, Parkinson’s, and Haemophilia, to boost the 'Make in India' campaign exemplifies misguided protectionism akin to pre-1991 socialism. This policy raises drug prices for patients, particularly those with Haemophilia where superior foreign concentrates have no adequate Indian generic alternatives, prioritizing domestic industry over consumer welfare. The author argues that shielding industries from competition fosters complacency rather than innovation, contradicting classical-liberal principles where consumer-driven demand should allocate resources optimally. Policymakers' claims of domestic capability ignore market signals; better alternatives include awareness campaigns for generics or addressing production barriers. Economic activity's ultimate aim is consumption, not employment or industry promotion—foreign competitive advantages benefit Indian buyers through lower prices. While 'Make in India' could advance by easing FDI caps and regulations across sectors like services and agriculture, alongside infrastructure, judicial, and property rights reforms, protectionist measures like this signal state capitalism's pitfalls, risking discretionary anti-market resource allocation.

**Key points:**

- Removing import duty exemptions on 74 lifesaving drugs raises costs for cancer, Parkinson’s, and Haemophilia patients to favor domestic producers under 'Make in India'.
- Protectionism stifles innovation by shielding industries from competition, echoing failed socialist policies.
- Consumers, not policymakers, should direct resource allocation through free markets to maximize welfare.
- Prioritize broad reforms in infrastructure, courts, property rights, and regulations over sector-specific interventions.

**By Ujwal Batra**

* * *

In a recent move, the government removed the import duty exemptions on 74 lifesaving drugs, in order to give impetus to its ‘Make in India’ campaign.

Let that sink in. Drugs that are used in the treatment of Cancer, Parkinson’s and a host of other very, very serious diseases will get more expensive, because the government wants to make sure its pet project is a success and is rolled out as desired. The protectionist urge, and the reasoning underlying it, is not very different to what was at work under the Socialist era pre-1991: that restricting competition would apparently spur innovation and industry, ultimately benefitting consumers. So what if drugs today get more expensive? The promise of jam tomorrow is better than bread and butter today.

The reasoning proffered is that “domestic industry is very much capable of supplying all of those drugs at very good prices.” But it shouldn’t be necessary to shield an industry from competition to prove its competitiveness. It may be that patients are not aware that there are indigenously produced generic versions of the drugs. In that case, it might still have made sense for the government to have launched an initiative to make the patients aware of the generic versions or to make them more accessible. Or to have examined the domestic sector to figure out what is preventing indigenous industries from producing or marketing these drugs. Making imported drugs more expensive makes no sense.

For some drugs, Indian generic drugs simply aren’t available or aren’t nearly as good as the foreign drugs. Particularly affected would be patients of Haemophilia—a genetic disorder in which patients tend to bleed excessively. The Indian drugs do not deliver concentrates of a particular protein, offering patients no alternatives to the foreign drugs.  With the new move, these patients would have to cough up a lot more money.

The project also sheds light on the confusion evident in our policymakers. Who benefits from making medicines more expensive? It would certainly benefit the domestic pharmaceutical companies—putting tariffs on imports eases the competitive environment and gives them an unfair advantage. But it certainly does not benefit consumers.  As has been stated numerous times by sensible economic theorists, the ultimate purpose of economic activity is consumption—it is not to ‘spur domestic industry’, nor is it to ‘generate employment.’ All other economic aims we hold valuable follow naturally from letting consumers reign and decide how resources are to be channelled.

The ultimate aim of economic activity being consumption, it is consumers who should drive the economy—not policymakers who seek to promote schemes or policies to benefit particular sectors at the expense of others. If a foreign company has a competitive advantage in producing certain drugs—they benefit by selling it here and Indian consumers benefit by paying less than they otherwise would have. The state does not need to put artificial constraints to benefit domestic industry—it is precisely the relentless rigour of competition that makes industry innovate. Restricting competition is only a recipe for complacency.

We needn’t make in India just for the sake of making in India. In so far as the ‘Make in India’ campaign calls for removing caps on foreign investment and creating a regulatory regime that is more conducive for doing business, it is probably a step in the right direction. But we need to ease that regulatory regime and make systematic reforms not merely in manufacturing, but throughout the economy in all sectors—service, manufacturing and agriculture. India needs to get many things right—its physical infrastructure, an overwhelmed court system, and put in place a robust property rights regime, along with many systemic reforms.  If it gets its fundamentals rights, resources would automatically get channelled in its most optimum outlets. As noted [here,](http://www.livemint.com/Opinion/JP6MMbSYOsOX2gqUW7GPNJ/The-pitfalls-of-Make-in-India-campaign.html) “Virtually every new government in New Delhi feels that it can get the allocation game right without understanding that in the end any resource allocation activity ends in being discretionary and anti-market.”

If ‘Make in India’ entails state capitalism and allocation of resources and misguided policies, as is evident in the present case of waiving custom duty exemptions on life-saving drugs, we probably need to be a lot more cautious of what will come out of it.

* * *

**About Ujwal Batra**

## “You did not even attempt to rattle your chains, let alone try to break them”

Original: https://www.spontaneousorder.in/p/5674-2

Author: Spontaneous Order

Published: 2016-02-18T16:51:38.000Z

Topics: press-freedom, free-speech, indian-emergency, human-rights

> The following piece contains excerpts from a monograph published by Forum of Free Enterprise titled ‘Press Freedoms and Human Rights (1977)’. The author is C R Irani (1931-2005) who was a prominent Indian journalist and the Editor-in-Chief of The Stat

**Summary:**

C R Irani argues that free people lose liberty by refusing to pay its price, as exemplified by the Indian press's failure to resist government encroachments starting in 1969, culminating in the 1975 Emergency censorship. He details the carrot-and-stick tactics: carrots like government advertising patronage, sticks including attempts to separate editors from newspapers, attacks on 'press barons,' and a 1971 scheme—foiled partly by The Statesman—to elect editors annually by staff, undermining editorial independence. By mid-1975, controls over advertising rates and newsprint monopoly left the press begging in Delhi, unable to fight, meriting the Information Minister's taunt: 'You did not even attempt to rattle your chains, let alone try to break them.' From a classical-liberal standpoint, Irani insists press freedom, enshrined in Article 19 of the Universal Declaration of Human Rights, enables informed opinion and dissent without fear. He rejects condescension that young nations like India cannot afford full human rights, affirming no trade-off between freedom and economic progress—as validated by post-Emergency elections and history showing bread and liberty go together. The press must boldly reaffirm its role: report objectively, analyze logically, criticize fearlessly, heed dissent, and ignore government sensitivities.

**Key points:**

- Indian government eroded press freedom from 1969 via advertising controls, newsprint monopoly, and attacks on editors and owners.
- A 1971 scheme to elect newspaper editors annually by staff would have destroyed editorial authority but was abandoned after exposure by The Statesman.
- The press's compliance justified the minister's rebuke for crawling rather than merely bending to controls.
- Press freedom is a universal human right under Article 19, independent of economic development, with history proving freedom and prosperity align.
- Journalists must prioritize objective reporting, logical analysis, fearless criticism, and dissent over government pressures.

**By Guest Author**

* * *

[

![C R Irani (1931-2005)](https://substackcdn.com/image/fetch/$s_!NDDM!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F04326727-3361-4aa6-9b7d-48c8381fa14d_351x433.jpeg "C R Irani (1931-2005)")



](https://substackcdn.com/image/fetch/$s_!NDDM!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F04326727-3361-4aa6-9b7d-48c8381fa14d_351x433.jpeg)

C R Irani (1931-2005)

*The following piece contains excerpts from a monograph published by **Forum of Free Enterprise** titled **‘[Press Freedoms and Human Rights (1977)’](http://indianliberals.in/uploads/periodicals/PDF_258_kt1tfyPress%20Freedoms%20and%20Human%20Rights.pdf)**[.](http://indianliberals.in/uploads/periodicals/PDF_258_kt1tfyPress%20Freedoms%20and%20Human%20Rights.pdf) The author is **C R Irani (1931-2005)** who was a prominent Indian journalist and the Editor-in-Chief of The Statesman.  Mr Irani was widely admired for his criticism and staunch opposition against Indira Gandhi’s policy of press censorship during the state of emergency proclaimed in 1975.*

**“You did not even attempt to rattle your chains, let alone try to break them.”**

Freedom of speech and of the Press is specifically embodied in Article 19 of the *Universal Declaration of Human Rights.* The concept is in two parts – one, the right or freedom to form and hold opinions without interference, and its corollary, the right to dissent without fear of consequence; and, two, the right to a free and uninterrupted flow of information, to seek, receive and impart information without let or hindrance because only then can a fully informed opinion be formed by the citizen and by citizens in their collective society.

Now, I come to a basic question of our times. It was Solzhenitsyn, the well-known Soviet dissenter, who posed this question as to why it was that free people everywhere – in his language, those who “soar unhampered over the peaks of freedom” – lose the taste of freedom, lose the will to defend it, and hopelessly confused and lost almost and began to crave slavery. This is a large question and men of good will everywhere must give a lot of thought to it. One conclusion can safely be drawn from the available evidence – free people find themselves in this situation because they are not prepared to pay a continuing price for their liberty. It is only this unwillingness to pay a proper price for liberty that seduces people to slavery.

In the context of what happened to the Press in India, the first point to notice is that the Press was not suddenly inflicted with controls and restrictions in the middle of 1975. To be fair, the story goes back much farther. The attack on the Indian Press started in the middle of 1969 when the then Government decided that a free Press was inconvenient.

The carrot-and-stick policy was adopted at about that time. The carrots are very obvious and journalist friends will understand what they are.

As far as the sticks are concerned, first an attempt was made to separate prestigious editors from their newspapers. Then, an attack was mounted on “press barons” and the “jute press”, “monopolists” and all the other choice expressions of an era which I hope is past. By the middle of 1971, it was thought that the process of pulverization and intimidation had been advanced sufficiently for the Government to come forward with a measure to put the entire Indian Press into a strait-jacket. Briefly, if this plan had succeeded – and this was brought about with the direct participation of two Cabinet Ministers – it would have denied managements the right to manage, denied owners the fruits of ownership, and, most important, denied editors the right to edit. To illustrate: editors would not have been able to edit because one of the provisions of this scheme was that the editor of a newspaper would be elected every year by the working journalists in that organisation. In other words, the editor would be in a perpetual popularity contest with his staff and any sort of discipline, let alone teamwork, would be impossible. Mercifully, this scheme was abandoned under pressure and largely from “The Statesman”, because we were the first to expose this nefarious scheme.

Thereafter, various other devices were adopted. Control of advertising rates by the Government and the exploitation of Government advertising as a form of patronage; a monopoly of newsprint, brought into being so that every newspaper in the country would have to make pilgrimages to Delhi to beg and borrow newsprint on which to print their newspapers. For all these reasons, I am driven to the conclusion that by the middle of 1975, the Press was in no position to stand up and fight. And the Press did deserve the taunt’s that our new Minister for Information hurled at them when he said that *“when you were only asked to bend, you chose to crawl.”* He was right. This did happen. He also said that, *“You did not even attempt to rattle your chains, let alone try to break them.”* 

\*\*\*\*

I would like to say that wherever freedom is threatened and liberty infringed, it is the duty as well as the privilege of all men of goodwill to stand up and be counted, and to make as big a noise about it as they can, because this tends to intimidate the oppressors.

It is important to realise that basic Human Rights are basic to all men. This is a worldwide acceptance or there should be a worldwide acceptance of this. I have referred to the *London Times* with approval. I must also criticise very severely what they said in 1971 in an editorial entitled *‘Freedom of the Press in Asia’*–“No one can expect true press freedoms to be enjoyed in countries still so young in their independence.” The horrible condescension apart, I do not think it is possible to urge that when basic Human Rights are involved, some are less basic than others. Consequently, there is no relationship between economic advancement and Human Rights, although it has been the objective of tyrants and despots of all hues and persuasions to attempt to make the former dependent on the absence of the latter. In other words, the suggestion is that economic advancement is not possible unless there are borne curbs on liberty. No one has shown to our satisfaction that there is any such relationship. In fact, the verdict of the Indian people has been categorical in the opposite direction. “The Economist” said it very well when, in examining the Indian scene after the Lok Sabha elections, it came to the conclusion that “no one will ever be able to claim again that there is a choice between freedom and bread”. This is so true. I suggest a proper reading of history shows that bread and freedom go together and the pursuit of liberty must continue.

There is a need in our time to reaffirm the role of the Press in this country. It is necessary throughout the free world for the Press to re-assess its role and assert very boldly, not apologetically, what a free Press is all about. It is no part of the duty of the Press’ to pay any heed to the sensitivities of governments. Our duty is to our own high code of ethics (not the bogus one that the previous government chose to impose upon us) )–to report objectively, to analyse logically and to criticise fearlessly but always with an ear to the voice ,of dissent, which is the one unfailing test of respect for Human Rights. As the great scientist, G. H. Hardy, once said, *“It is never worth a first class man’s while to express a majority opinion; by definition there are plenty of others to do that.”* 

*To access the complete, unabridged piece, click [here.](http://indianliberals.in/uploads/periodicals/PDF_258_kt1tfyPress%20Freedoms%20and%20Human%20Rights.pdf) Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Guest Author**

## 25 years of liberalisation and what life was like in 1991

Original: https://www.spontaneousorder.in/p/luis-1991

Author: Spontaneous Order

Published: 2016-02-15T17:53:39.000Z

Topics: economic-liberalisation, 1991-reforms, license-raj, political-leadership

> I was a young FX dealer in 1991 when PV Narasimha Rao took over as prime minister and, together with Manmohan Singh, opened up the Indian economy. I had returned to India a couple of years prior to that, much against the advice of every Indian I knew. M..

**Summary:**

Luis Miranda reflects on India's 1991 economic liberalization under PV Narasimha Rao and Manmohan Singh, marking a shift from socialist 'Licence Raj' to greater economic freedom. He contrasts pre-1991 life—limited choices like Bajaj scooters, HMT watches, Ambassador cars, long waits for phones and gas—with today's consumer options, entrepreneurial wealth creation, poverty reduction, and India's superpower status. Most Indians today, especially the young, forget these gains amid media focus on inequality and corruption. To remind them, CCS launched IndiaBefore91.in for crowdsourced stories. From a 2016 panel with Jairam Ramesh, Arvind Virmani, Didar Singh, and Praveen Chakravarty, key takeaways include: big bang reforms need crises (1991 default risk, only two Congress MPs backed the budget); political leadership like Rao's was crucial despite opposition; 1980s preparation enabled quick action; and singular focus succeeded. Lessons for 2016: without crisis, expect incremental reforms, but Modi can deliver bold changes in accountability, corruption, entrepreneurship, and infrastructure. Despite global investor interest, labor and land reforms lag. Miranda urges seizing this opportunity for prosperity via less state control, echoing Manmohan Singh's 1972 warning against outdated controls, hoping Modi's legacy mirrors 1991's transformation.

**Key points:**

- Big bang economic reforms in India require a crisis, as seen in 1991's default risk that overcame opposition from within Congress, bureaucracy, and vested interests like the Bombay Club.
- Political leadership like Narasimha Rao's was essential to push liberalization through Parliament and stakeholders despite minimal support.
- Preparation in the 1980s, including analysis for reforms, enabled the 1991 measures, while focus on one issue avoided distractions.
- India should pursue bold liberalizing reforms under Modi, especially in labor and land, to capitalize on investor interest and reduce state controls for prosperity.

**By Guest Author**

* * *

[

![Luis Miranda Chariman, CCS](https://substackcdn.com/image/fetch/$s_!YZhL!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F1786d166-7ccc-45d1-93e0-59f3513af0a6_100x100.jpeg "Luis Miranda Chariman, CCS")



](https://substackcdn.com/image/fetch/$s_!YZhL!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F1786d166-7ccc-45d1-93e0-59f3513af0a6_100x100.jpeg)

Luis Miranda Chairman, CCS

I was a young FX dealer in 1991 when PV Narasimha Rao took over as prime minister and, together with Manmohan Singh, opened up the Indian economy. I had returned to India a couple of years prior to that, much against the advice of every Indian I knew. Many years later, after the economy opened up, people told me that I had timed my return perfectly and I had showed great foresight. The honest truth is that it was a ‘Forrest Gump’ moment – I was being interviewed by Jaidev Iyer in New York for a job with Citibank Asia Pacific and he sold me the dream of returning to India, marketing FX products and getting paid peanuts! It sounded very tempting and here I was. No great foresight on my part at all that we were on the cusp of a major transformation in India.

Fast forward to 2016, the 25th anniversary of the big bang opening up of the Indian economy in 1991. Most Indians today do not remember what life was like under a socialistic regime – half the country was not even born by then! Some of them are disillusioned with the semi-capitalistic society we live in today … a world where we have more economic freedom, where consumers have choice (do you remember the Bajaj scooter, HMT watch, Ambassador and Fiat cars, Indian Airlines and the waiting period to get a telephone or gas connection?), where entrepreneurs and employees have legally made wealth way beyond their dreams, where most of the poor are better off and where India is globally treated as a super power. Instead, the media focuses on inequality and corruption, and we forget how far we have travelled since 1991. In order to remind us about those dark days, the Centre for Civil Society has launched a portal – IndiaBefore91.in – to crowd-source stories about what life was like 25 years ago and before.

At the launch of the portal recently in Delhi, we had an interesting panel discussion with Jairam Ramesh (former minister, whose latest book is To the Brink and Back – India’s 1991 Story), Arvind Virmani (economist and former bureaucrat), Didar Singh (secretary general, FICCI) and Praveen Chakravarty (Visiting Fellow, IDFC Institute). My four key takeaways from that engaging conversation are:

1.  Without a crisis, big bang reform is unlikely in India. The changes in 1991 would not have taken place if there was no risk of a default and a bailout was needed. Yes, Virmani did talk about how GDP tripled in the 80s because of incremental changes that took place under Rajiv Gandhi. But that was nothing compared to the historic changes that took place in mid-1991. There was no political support for the 1991 budget – only two Congress MPs backed it at the Congress Parliamentary Party meeting, while 58 ranted against it. The finance secretary and the chief economic advisor were against these changes and so were the minister for industry and his minister of state. Many vested interests protested loudly, starting with the Bombay Club. Raghuram Rajan, the RBI governor, wrote in his first book, Saving Capitalism from the Capitalists – the biggest opponents to capitalism are the entrenched capitalists. Ramesh has an interesting quote in his book on what Manmohan Singh wrote way back in 1972, “It would be tragic if we were to become prisoners of instruments, which howsoever suitable at one stage of development, turn out to be fetters on future development.”
    
2.  Political leadership is key. While the technical architecture of the opening up of the economy could be attributed to Manmohan Singh, it was Narasimha Rao who pushed it through Parliament, labour leaders and the bureaucracy. Ramesh said that Manmohan backed the reforms because of conviction, whereas Narasimha Rao backed the reforms because of compulsions. There was a lot of opposition to the ‘bullying’ by the IMF and 35 left-leaning economists protested, saying India should default – the comparison to recent events in Greece is  interesting.  Between 1991 and 1994, very few people praised the government’s economic policies in public. The decision to hike up prices, especially urea prices, looked to be political suicide by a minority government.  But Narasimha Rao backed these measures and pushed them through.
    
3.   Preparation is needed. As I learnt from Ramesh’s book, a lot of the analysis and work needed to put through these reforms was already done in the 80s. But there was limited political will and no crisis in the 80s to push all these changes through. If all that hard work had not been done in the 80s, it is doubtful whether the government would have been ready in July 1991 to push through such momentous trade and economic liberalisation measures.
    
4.   Focus is needed. Narasimha Rao’s government focussed mainly on one issue at that time – the opening up of the economy and avoiding a debt default. There was no plethora of initiatives that distracted his government’s attention and they focussed on pushing through the liberalisation measures in Parliament amidst huge opposition from within and outside the party, and despite being in a minority.
    

So what are the lessons for us in 2016, from 25 years ago? Unless we have a crisis, we won’t see big bang reforms. We will have a lot of incremental reforms that are politically palatable. Policy change involves a lot of back room influencing, where mere rationality is not necessarily relevant. At the same time, Prime Minister Narendra Modi is focusing on fixing some of the architecture that is required for long-term positive change – making government accountable, clamping down on corruption, stimulating entrepreneurship and, hopefully, building out the much-needed infrastructure. A lot of preparation has already been done in recent times on what needs to be done. Over the past few years, innumerable committees have made recommendations on various fronts. So the government knows what to do. Didar Singh, interestingly, commented that even after 25 years of liberalization, we still haven’t significantly reformed labour and land regulations. Today, thanks to the deplorable condition of most other large economies, many global investors rank India as the hottest destination to invest in. Instead of basking in the glory of this favourable climate and saying that there is therefore no need to change, it is indeed an incredible opportunity for India to make bold reforms that bring in huge capital flows, build infrastructure, create jobs, reduce poverty and create prosperity for all.  There is a fear that we will see more control by the state and a larger role for the public sector. Again, to go back to what Manmohan Singh wrote in 1972, “There is certainly a need to recognise that the knowledge available to civil servants is not necessarily superior to that of entrepreneurs and that the fact that some direct controls are good does not mean that more controls are better that less controls.”

Modi’s legacy could be that, despite no immediate crisis, he pushed through big bang reforms that propelled India forward for the next 25 years.

If you want to learn more about what life was like before 1991 during the licence raj, please log onto [IndiaBefore91.in](http://indiabefore91.in/). CCS looks forward to adding your stories to this website.

*Luis Miranda is the Chairman of Centre for Civil Society (CCS). This post was originally published on [Luis’ blog at ForbesIndia.com](http://forbesindia.com/blog/accidental-investor/25-years-of-liberalisation-and-what-life-was-in-1991/)*

Read more : [https://spontaneousorder.in/india-before-91/](https://spontaneousorder.in/india-before-91/)

* * *

**About Guest Author**

## The Curious Task of Falling in Love

Original: https://www.spontaneousorder.in/p/valentinesday

Author: Spontaneous Order

Published: 2016-02-12T19:26:42.000Z

Topics: economics, liberty, spontaneous-order, free-choice

> Valentine’s Day is on its way and love is in the air. This article will deal with some basic economic principles and freedom; and show that love, economics and liberty have a very close and cozy relationship. You can’t have one without the other. Hope

**Summary:**

This Valentine's-themed post analogizes classical-liberal principles to falling in love, arguing that love, economics, and liberty are inseparable, requiring freedom of choice and free will. In a free society, individuals select partners through persuasion—charm, looks, or talk—rather than force, upholding the Non-Aggression Principle, which prohibits physical violence or threats and rejects coerced matches by governments or religions. Spontaneous order emerges as love arises naturally from interpersonal chaos without central planning, dismissing notions like 'matches made in heaven.' Adam Smith's invisible hand illustrates how self-interested pursuits of love yield unintended benefits like emotional balance and social stability. Opportunity cost demands careful partner selection and unwavering commitment to avoid losing alternatives. Gift-giving on Valentine's Day, boosted by greater economic freedom and disposable incomes, signals deep knowledge of preferences, outperforming cash in conveying emotion despite economists' efficiency arguments. Drawing on Mises, the piece frames economics as human action—motives, choices, and incentives—pervading love and affirming liberty's role in personal relationships.

**Key points:**

- Embrace the non-aggression principle in romance by persuading through charm rather than using force.
- Recognize spontaneous order as love emerges naturally from individual interactions without planning.
- Leverage the invisible hand by pursuing self-interested love, which creates social and emotional benefits.
- Account for opportunity cost by choosing partners carefully and committing fully to the relationship.
- Signal affection through thoughtful gifts that demonstrate knowledge of your partner's preferences over mere cash.

**By Sadaf Hussain**

* * *

Valentine’s Day is on its way and love is in the air. This article will deal with some basic economic principles and freedom; and show that love, economics and liberty have a very close and cozy relationship. You can’t have one without the other. Hopefully if you follow these principles, you might just get lucky this Valentine’s!

A free society is based on freedom of choice and free will. We choose one person over another because we can exercise our power to choose. We get persuaded by people around us—by the way they talk, their charm, or their looks, or whatever else makes them lovely in our eyes.

Finding love in this huge world with billions of people is not impossible, but it is based on the following principles (which, as you would have it, are also the principles of a good society!):

**Non-Aggression Principle** holds that use of force or aggression is against the law and is not justified. Here, aggression is defined narrowly in terms of the use or threat of physical violence. We are neither a character in a movie, nor from a mythical story, where making people fall in love through force may be justified. Persuasion is the key word. If you are able to convince your crush that they should buy love from you and not from anyone else, you’ve got yourself a date. No government or religious group has distributed a scroll summoning subjects to fall in love with each other and find a perfect match. Luckily we do have that much choice left in our society.

**Spontaneous Order** is the spontaneous emergence of order out of seeming chaos. It is a chaos of people, and you find order with one special person, and spend a few special moments with them. Recognise that you can’t force yourself to fall in love, it just happens. There is no one who plans all this (never mind the adage that says that ‘matches are made in heaven‘).

**Invisible Hand** is a metaphor used by [Adam Smith](https://en.wikipedia.org/wiki/Adam_Smith) to describe unintended social benefits resulting from individual actions. People do not simply fall in love with each other out of benevolence, but for themselves. It gives them some kind of social stability and emotional balance.

And the most important principle of love (if you want to stay in the same relationship forever) is: **Opportunity cost.** It is the loss of other alternatives when one alternative is chosen. Make this choice carefully, and once you have a date, stick with her. Ensuring that your partner gets your love is the most important aspect or else you’re doomed, quite literally.

With greater economic freedom and increasing disposable incomes, a lot more people now celebrate the festival to express their affection for their significant other.  As Valentine’s Day became popular and (as sceptics would point out), commericliased, gift giving has become as integral part of the festival.

**The Logic of Gift Giving and Signaling**

I remember my father buying cauliflowers for my mother. He was of course being smart, saving himself the cost of flowers and buying food. But there are those who read their other halves enough to know what they like and what they don’t. Celebrating this day involves a lot of observation, and noting preferences of your significant other. Economists often agree that cash is the most efficient gift, as it can be used to purchase whatever the giftee desires and values the most. However, most people would agree that money does not carry enough emotion to prove love and affection. It doesn’t reveal any information about how much you know about the other person. Buying a gift reveals emotions, love, and information that they paid attention to all the signals.

Economics, as it turns out—is not merely about goods and services, or money and exchange. It is, fundamentally, as Ludwig Von Mises pointed out, about *Human Action*—it is about what motivates us, how we choose and how incentives shape our behavior. Since we all choose and act, economics pervades every aspect of our lives. Love is no exception.

* * *

**About Sadaf Hussain**

Sadaf Hussain writes everything between politics, economics to food and culture. He is the author of Daastan-E-Dastarkhan and a TEDx Speaker.

## #ThrowbackThursday: M R Masani — The True Liberal (1973)

Original: https://www.spontaneousorder.in/p/5631-2

Author: Spontaneous Order

Published: 2016-02-11T12:25:08.000Z

Topics: classical-liberalism, limited-government, swatantra-party, political-language

> The following piece was published in the April 1973 issue of Freedom First. The author, M R Masani was one of India’s most prominent liberals—he was a part of the Constituent Assembly that drafted the constitution and was closely associated with the S

**Summary:**

M R Masani, a prominent Indian liberal and Swatantra Party associate, laments the perversion of 'liberalism' in a 1973 Freedom First piece. At the 1959 Liberal International conference in Italy, European leaders hailed Swatantra as 'the milk of pure Liberalism,' yet in India, scribes and intelligentsia branded it conservative or reactionary, mirroring a global confusion originating in the US. There, socialists and communist fellow travelers have co-opted 'liberal' for anti-liberal policies, as seen in The New York Times, Prof. Galbraith, and Senator McGovern, while genuine liberals like Prof. Milton Friedman and Prof. Sidney Hook are labeled conservatives. Prof. P.T. Bauer warned in a February 5, 1973, Daily Telegraph letter that 'liberal' now means its opposite—advocates of extensive state control—corrupting language and destroying civilized society. Supported by Liberal International's Vernon Dawson and a Telegraph editorial, true liberalism is defined as prioritizing individual freedom, rule of law, and limited government, distinct from conservatism (social order) and socialism (equality). Masani asserts this vindicates Indian liberals, like the Indian Liberal Group, against Delhi's crypto-communists practicing Orwellian doublethink.

**Key points:**

- Swatantra Party embodies pure liberalism as recognized by Liberal International in 1959, despite being mislabeled conservative in India.
- US socialists have hijacked 'liberal' to describe state control advocates, relegating true liberals like Friedman to 'conservative' status.
- Prof. P.T. Bauer's 1973 letter exposes 'liberal' as denoting socialism, urging resistance to linguistic corruption that hinders discourse.
- True liberalism centers on individual freedom, rule of law, and limited government, per the Daily Telegraph editorial.
- This semantic vindication strengthens faith in India's authentic liberal tradition against crypto-communist doubletalk.

**By Guest Author**

* * *

[

![Minoo Masani (1905-1998)](https://substackcdn.com/image/fetch/$s_!ORdo!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F0ab06cb4-1922-49bb-b3cd-3eed69033ce3_196x257.jpeg "Minoo Masani (1905-1998)")



](https://substackcdn.com/image/fetch/$s_!ORdo!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F0ab06cb4-1922-49bb-b3cd-3eed69033ce3_196x257.jpeg)

Minoo Masani (1905-1998)

*The following piece was published in the April 1973 issue of Freedom First.* The author, *M R Masani was one of India’s most prominent liberals—he was a part of the Constituent Assembly that drafted the constitution and was closely associated with the Swatantra Party. In this piece, Masani talks about what liberalism means, and how the word had come to lose its true significance and meaning over time.* 

When I attended the Conference of the Liberal International in Italy at the end of 1959, the Liberal leaders who were present from various countries of Europe told me that they found the principles of the newly established Swatantra Party to be ‘the milk of pure Liberalism.’ In India, however, most scribes and a great part of the so-called intelligentsia have throughout the last decade looked upon the Swatantra Party as conservative, if not reactionary. What is the source of their confusion?

This phenomenon and the confusion are not unique to India. The fashion comes, as most of our fashions do, from the United States of America where socialists and communist fellow travellers have pre-empted the word ‘Liberal’ to refer to policies and operations which are anti-liberal in the extreme.

The New York Times, Prof. Galbraith and Senator McGovern are well known examples of this bogus “liberalism” which has resulted in genuine liberals like Prof. Milton Friedman and Prof. Sidney Hook being known as conservatives.

It would appear that this semantic confusion is now threatening to cross the Atlantic, or so it would seem from the letter written by Prof. P. T. Bauer of London University to the *Daily Telegraph* on 5th February, 1973.

Seeking to draw attention to the perversion of the term “Liberal” which had now spread to the pages of the Daily Telegraph, Prof. Bauer wrote:

“The term is used to describe advocates of freedom, a condition which according to the Oxford Dictionary denotes being free and having the right or power to do as one pleases, which of course has always been circumscribed by the obligation not to infringe on other people’s liberty. In recent years and decades the term liberal has gradually come to mean its exact opposite.

“‘For some time now in America liberal has come to refer to Socialists or even Communists, that is advocates of close and extensive State control of social and economic life.

“I have heard an American woman describe an uncompromising supporter of Stalin’s regime as an extreme liberal. I have heard people talk of Marxist liberals–rather like talking of boiling ice-cream.”

Prof. Bauer concluded his letter by saying:

“Such corruption of the language makes reasonable discussion impossible. It is ultimately destructive of civilised society.”

A few days later, Prof. Bauer was supported in his plea by Mr. Vernon Dawson, Secretary-General of the Liberal International.

The Daily Telegraph made amends in the form of an editorial article entitled *Who Are Liberals?,* in the course of which it wrote:

“Liberalism, as Prof. Bauer reminded us on this page, is about liberty. Historically, it was the doctrine of those who, for moral as well as economic reasons, were against the sterile autocracies of l8th-century Europe. It was, and is, not a simple matter. Both Continental rationalism and English empiricism have contributed to it. But what genuine liberals, in all societies have always had in common is a concern for the freedom of the individual, the rule of law, and the limitation of government, both in its power and in its scope. As such liberalism must be regarded as a political doctrine quite different in character from conservatism, which is about social order, and socialism, which is about social equality. How is it, then, that this old and honourable word is now commonly used to denote those whose political views are the exact opposite of traditional liberalism? How is it that those who favour State intervention in the economy are called ‘liberal’, and those who have a genuinely liberal dislike of such things are called ‘conservative’ or ‘right-wing?'”

“Is this question of anything more than academic interest? Not if we think words do not matter. But if we think that political debate loses much of its point if words are used in a slipshod and inaccurate fashion the misuse of the ‘liberal’ is a tendency that we ought to resist.”

All this will, of course, leave the crypto-communists in Delhi and their apologists in the press unmoved. They can be counted on to go on with their practise of ‘double think’ and ‘double talk’ *à la* George Orwell, describing progress as reaction and autocracy as progress.

The controversy in the Daily Telegraph serves, however, to strengthen and vindicate the faith of genuine liberals in India, such as members of the Indian Liberal Group affiliated to the Liberal International, and others, that theirs is the true Liberalism based on the authentic Liberal Tradition.

*To access the complete piece, click [here.](http://freedomfirst.in/uploads/issues/pdf/251.pdf) Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Guest Author**

## Indian Constitution: A Product of Learned Labour, Not of Native Wisdom

Original: https://www.spontaneousorder.in/p/5623-2

Author: Spontaneous Order

Published: 2016-02-08T12:17:51.000Z

Topics: indian-constitution, fundamental-rights, natural-rights, constitutional-amendments

> The following comments were made by a reader, Mr. R Nanjappa on a speech by C Rajagopalachari (The Keystone of the Constitution, 1971) from the Indian Liberal archives, which we had republished some time back. The Indian Constitution is a product of le...

**Summary:**

The Indian Constitution is a product of 'learned labour' rather than native wisdom or inspiration, with its authors borrowing provisions from various sources without proper reconciliation, such as the ambiguous powers between the President and Prime Minister, reducing the former to a rubber stamp. Unlike the US Constitution, grounded in the moral authority of the Declaration of Independence's self-evident truths about equality and unalienable rights—which inspired Lincoln and King—it lacks a similar noble foundation, relying instead on Fundamental Rights as its 'keystone,' as Rajagopalachari termed them. These rights are fundamental not by constitutional fiat but as pre-existing natural rights rooted in custom, tradition, and dharma, which governments exist to protect. The author critiques leaders like Nehru for the 17th Amendment in 1964 shielding land acquisitions, Indira Gandhi for disregarding democratic ideals, and Modi for interest in land grabs, noting no political party today defends the Constitution as the Swatantra Party once did. Historical ironies abound: Ambedkar opposed British exit yet chaired the drafting; Dravidian parties ruling Madras despite anti-independence stance; and the 'Socialist Republic' label persists post-market reforms. With figures like Palkhivala gone and judiciary divided, India lacks eminent defenders of this spirit.

**Key points:**

- Indian Constitution borrowed foreign elements without reconciling them, leading to imbalances like the President's rubber-stamp role.
- Fundamental Rights are pre-existing natural rights from dharma, not granted by the Constitution, serving as its true keystone.
- Nehru's 17th Amendment, Indira's authoritarianism, and Modi's land acquisition push exemplify erosion of constitutional spirit.
- No Indian political party currently defends the Constitution, unlike Rajagopalachari's Swatantra Party.

**By Guest Author**

* * *

*The following comments were made by a reader, **Mr. R Nanjappa** on a speech by **C Rajagopalachari**  ([The Keystone of the Constitution, 1971](https://spontaneousorder.in/rajaji-constitution/)) from the Indian Liberal archives, which we had republished some time back.*

The Indian Constitution is a product of learned labour, and not inspiration and native wisdom. Its authors borrowed from everywhere, but did not digest properly and so failed to reconcile things- eg. as between the powers of the President and the Prime Minister, so that almost from the beginning, the President has been reduced to a rubber stamp.

The Indian Constitution does not stand on or recognise any moral authority, such as the US Constitution does. The Declaration of Independence clearly sets the moral standards and tone of the constitution there, but the Indian has nothing similar. When Abraham Lincoln spoke “fourscore years and seven” later, he recalled this in his [Gettysburg address.](http://www.abrahamlincolnonline.org/lincoln/speeches/gettysburg.htm) And a “five score” years further on, Martin Luther King recalled it, standing under the shadow of Lincoln’s statue. And what were they both referring to? It were these words:

> “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

Writers like Marianne Williamson have written about the “spiritual” quality of the US Constitution! Now, we don’t have such a noble sentiment to guide us. In the circumstances, “Fundamental Rights” are what we have- the keystone, as Rajaji called it.

They are fundamental, NOT because the Constitution says so; the Constitution says so because they are fundamental! The constitution merely recognised what had long existed by custom and tradition – by God given law or dharma in this land.These are natural “unalienable” rights of people in any civilised society, to defend which govts. are needed!

As constitutional writers and thinkers like A.V.Dicey, K.C.Wheare, Harold Laski, etc have pointed out, a Constitution but reflects the spirit or the conditions of the times. Nehru was part of that spirit and time, but did not keet it- the 17th Amendment (1) was passed in his time.. Indira was a stranger to democratic conventions and ideals, and had no respect for freedom. Her successors have been worse.

Even most educated Indians do not understand the difference between the Constitution and other legislation.The Constitution is not one more law. There are provisions for amending both, but the underlying spirit is not the same. It is not a matter of having the required majority.Those who understood, and therefore tried to defend the keystone of the Constitution have been few in this land. Now, after Palkhivala, we do not have any one eminent person to defend the Constitution. Even our Judiciary is divided on this.

Rajaji said in his day that Swatantra Party had to defend the Constitution alone. Today, there is no party in India to do that. See the interest evinced by Modi for Land Acquisition ( ie big land grab by the govt.) in a big way!

This is the beauty of the enigma of India and its Constitution! DR. Ambedkar did not want the British to leave India and joined the Viceroy’s Council precisely when Gandhi, Nehru and Co were languishing in jail after Quit India. But he was the secretary of the Constituent Assembly. The Dravidian parties in the then Madras did not want the British to go; but they have been ruling the state for more than 45 years continuously, while the Congress which fought for freedom had a mere 15 years! And our Constitution still speaks of India being Socialist Republic, long after we are supposed to have adopted pro-market policies!

\*\*\*\*

*(1) The 17th Amendment to the Indian Constitution was brought in in 1964 to secure the constitutional validity of acquisition of estates and place land acquisition laws in Schedule 9 of the Constitution*

* * *

**About Guest Author**

## The Indian Constitution and ‘The Right to Sin’

Original: https://www.spontaneousorder.in/p/right-to-sin

Author: Spontaneous Order

Published: 2016-01-31T18:55:08.000Z

Topics: indian-constitution, limited-government, individual-rights, rule-of-law

> “The Constitution has been reared for immortality, if the work of man may justly aspire to such a title. It may, nevertheless, perish in an hour by the folly, or corruption, or negligence of its only keepers, the people.” –Joseph Story, American Jur

**Summary:**

The Indian Constitution embodies classical-liberal principles of limited government, rule of law, and individual rights, defining the state's powers and protecting citizens' freedoms against arbitrary power, as echoed by thinkers like Joseph Story, Lord Acton, and Nani Palkhivala. However, it grants fundamental rights with 'reasonable restrictions' whose vagueness allows those in power to undermine liberties, posing a danger to a free society. Reflecting on Gandhi's 1931 statement in Young India advocating a constitution that releases India from 'thraldom and patronage' and grants 'the right to sin,' the author interprets this as the essential freedom to make peaceful life choices and dissent, even if deemed immoral by others, without violating others' rights. While flawed, the Constitution has endured and protected freedoms, such as the judiciary blocking parliamentary dilution of property rights before the 44th Amendment and striking down Section 66A of the IT Act to affirm free expression. Ultimately, its strength depends on the people's moral commitment to its Preamble's vision of justice, equality, and liberty; Indians must affirm the freedom to be and err to realize Gandhi's ideal.

**Key points:**

- The Constitution establishes limited government and rule of law to prevent corruption from absolute power.
- Gandhi's 'right to sin' signifies the freedom for peaceful self-expression and choices, essential for equal rights.
- Fundamental rights are weakened by vague 'reasonable restrictions' determined by those in power.
- The judiciary has invoked the Constitution to protect freedoms, including striking down Section 66A of the IT Act.
- Citizens must uphold the Constitution's spirit of liberty for it to endure as a guardian of individual rights.

**By Ujwal Batra**

* * *

*“The Constitution has been reared for immortality, if the work of man may justly aspire to such a title. It may, nevertheless, perish in an hour by the folly, or corruption, or negligence of its only keepers, the people.”*

**–Joseph Story, American Jurist**

Of all the devices and institutions that societies have fashioned in organising and governing their affairs, the constitution is perhaps the most fascinating, and one that no nation state can do without.

But why is it so? Why is the constitution, as Joseph Story had remarked, *‘reared for immorality?’* What is so sacred about a legal document? Why is it constantly invoked in discussions of social and economic matters? Why do our political leaders and representatives take an oath to pledge their allegiance to it?

The constitution gives substance to one of the core principles of liberty—limited government. It decides the relationship between the state and the individual. It decides what powers the government has and how it may exercise its powers; and what powers (or rights) people have and how free they are in the enjoyment of their rights. In articulating the principles that would be fundamental in framing laws, and the bounds of those laws—it seeks to create a ‘rule of law, not of men.’ The principle of constitutionalism recognises, as the 19th Century  liberal Lord Acton had recognised a long time ago, that *‘Power tends to corrupt and absolute power corrupts absolutely.’*

Nani Palkhivala, the eminent Indian jurist and one of the staunchest defenders of the constitution captured it best– *“The Constitution was meant to impart such a momentum to the living spirit of the rule of law that democracy and civil liberty may survive in India beyond our own times and in the days when our place will know us no more.”*

Rule of Law. Limited Government. Individual Rights. These are the principles that constitutions are made of, and these are the principles constitutions are enacted to protect. But has our constitution been ‘reared for immortality?’ Does our constitution do justice to its people? Does it impart freedom and put effective restraints on the state?

As I pondered over this question, I was reminded of a curious quote by Gandhi; and It is worth reflecting over. In a September 1931 issue of *Young India,* Gandhi had said: *“I shall strive for a constitution, which will release India from all thralldom and patronage, and give her, if need be, the right to sin.”*

At first glance, such a sentiment seems odd coming from Gandhi. How could a man who was steadfast in his commitment to non-violence and peace ask for India’s people to have the ‘right to sin?’ How could Gandhi, who believed that moral principles had to be central in political and economic affairs say such a thing?

Gandhi certainly wasn’t advocating for looting, plundering or killing people when he said this, or of depriving others of their rights or freedoms. But the right to sin may well be understood to be a natural corollary of the right to be—the right to express and dissent freely and boldly against prevalent narratives; and to be free in making one’s life choices. The expression of one’s rights may well be sinful in another’s eyes. But so long as such expression is peaceful and does not violate another’s freedoms, it is valid—indeed, necessary—and needs to be protected. We need to be equal in our rights and freedoms, even in our right to sin. Rights are rendered meaningless, or are at least undermined to the degree to which individuals are prevented in their peaceful expression.

The Constitution does grant us fundamental rights, but it does so with caution and restraint, and without the moral conviction that should accompany matters of such far-reaching consequences. Each of our rights can be subject to ‘reasonable restrictions’, the ‘reasonableness’ of these restrictions being decided by those in power. That is a dangerous precedent in a free society.

But while the constitution has its flaws, it is a document that has endured. If India is a successful democracy, it can be traced to a fair degree to our constitution and the wisdom and foresight of the men and women who drafted it.  The constitution has time and again come to the service of the people–it was the judiciary upholding the constitution that came in the way of parliament amending and diluting property rights (before they were ultimately done away with in the 44th Amendment), and more recently, it was the constitution that led the Supreme Court to strike down Section 66A of the IT Act last year to affirm our freedom of expression. The history of independent India gives many instances where the constitution played a vital role in safeguarding our freedoms. And it also gives instances when these restraints were either inadequate or unsuccessful in restraining the state and in protecting our liberties.

But as important as it is to question whether the Constitution has done justice to its people, it is important to ask too whether we have done justice to the constitution–to the vision of justice, equality and liberty that it cherishes in its preamble. The constitution is, ultimately, a piece of legal fiction; and it is no stronger that the moral consensus that it articulates. When that moral consensus and the spirit of the law fails, the letter of the law does not matter. We need to affirm our freedom to be and to err; and to strive for a constitution that Gandhi [desired](https://www.mkgandhi.org/momgandhi/chap64.htm), one that would free India from all ‘*thralldom and patronage, and give her, if need be, the right to sin.’*

[Read More: Do Liquor Bans Actually Work?](https://spontaneousorder.in/do-liquor-bans-actually-work/)

* * *

**About Ujwal Batra**

## #ThrowbackThursday: C Rajagopalachari— Defending the Constitution (1972)

Original: https://www.spontaneousorder.in/p/rajaji-india-constitution

Author: Spontaneous Order

Published: 2016-01-28T15:44:05.000Z

Topics: indian-constitution, property-rights, judicial-independence, liberal-democracy

> As India celebrated its 66th Republic day earlier this week, we decided to post C Rajagopalachari’s views on the Indian Constitution. The post contains excerpts from speeches delivered in 1972. A Motor Car with no Brake I have been constantly reiterat..

**Summary:**

C. Rajagopalachari, in 1972 speeches, urges defending the Indian Constitution as essential to prevent dictatorship and serfdom, highlighting its guarantees: protection of minority religions and equal secular rights; secure enjoyment of legally acquired property with just compensation subject to judicial review if acquired by the state; and independence of the judiciary, particularly the Supreme Court. He argues that a dedicated party, like the Swatantra Party founded on these principles, is vital as a 'brake' on government—like a motor car without brakes otherwise—more important than mere alternative governments or stability. Politics must transcend power grabs to safeguard these core democratic axioms against sabotage. Good government prioritizes social justice via moral economic reforms, led by characterful leaders, over 'stable' authoritarianism that erodes fundamental rights. Rajagopalachari equates assisting constitutional erosion with treason akin to aiding foreign aggressors, insisting the Constitution's foresight against power's corruption demands vigilant defense for true freedom.

**Key points:**

- Defend the Constitution's guarantees of minority rights, property protection with judicially reviewed compensation, and judicial independence to avert dictatorship.
- A party dedicated to these constitutional principles, like the Swatantra Party, is essential as a democratic 'brake' beyond just forming governments.
- Prioritize good government achieving social justice through moral economic policies over mere 'stable' authoritarian regimes that oppress citizens.
- Sabotaging the Constitution equals treason, comparable to aiding foreign invasion, as it enables totalitarian rule despite external defenses.

**By Guest Author**

* * *

*As India celebrated its 66th Republic day earlier this week, we decided to post C Rajagopalachari’s views on the Indian Constitution. The post contains excerpts from speeches delivered in 1972.* 

**A Motor Car with no Brake** 

I have been constantly reiterating the importance of defending the Constitution. This is because the Constitution guarantees the following: first, the complete protection of minority communities in the practice of their religions and their equality with the majority community in all secular rights and privileges; secondly, the complete protection of citizens in the enjoyment of their properties inherited or otherwise acquired legally and a guarantee that if the State desires to acquire any part of them, the State should give just and adequate compensation to make up for the loss; thirdly, the need for any acquisition and the adequacy of the compensation should be subject to judicial examination and the award of the courts should be fully respected. It is these guarantees inscribed in the Constitution that save the citizens from dictatorship and serfdom.

If therefore, the Constitution should be saved from being sabotaged in these respects, a party pledged to these guarantees and to resist totalitarian rule is absolutely necessary. The people may elect anyone they choose to rule over the affairs of the country subject to the guarantees briefly mentioned above. A party dedicated to defend these guarantees is as necessary as it is necessary to have a parliament and leaders dedicated to good government. The independence of the judiciary and the authority of the Supreme Court should not be interfered with directly or indirectly. These axioms of good government and democracy should be explained clearly to the people and they should be warned against being misled into agreeing to a sabotage of the Constitution.

The economic policies of the Government should be so framed as to lead to social justice which is not impossible, if party politics is not allowed to interfere with genuine economic reform and steps are taken to maintain and improve respect for moral values. This is the fundamental basis for any good government. Leaders should be men and women of the highest character and competence. They should lead and not be led by those whose votes may, by numbers, give power and authority over the citizens without considering what is good for the nation in the long run. A solid group of people, who guard the Constitution and the rights of the people, the rights of the majority as well as of the minorities, is as important as a Prime Minister and President are necessary. Without such a party it would be like a beautiful motor car without a brake.

The notion that the justification for the existence of a party is only that it can be an alternative government if it secures a sufficient number of votes and that otherwise it may be dissolved and extinguish itself is wholly erroneous. A party of those who are dedicated to defend the core of good democracy is even more important than those who run governments according to the requirements of change in times. Politics is not merely a competition between groups for ths acquisition of power. The fundamental articles with which the Swatantra Party was founded must be read over and over again by good men and women in the country and must be explained to the less informed section of the community. The defence of the Constitution is . not less important than the defence of the country against foreign aggression.

*(May 13, 1972)*

\*\*\*\*

What the people of India require is good government and not merely a ‘stable’ government. The stress ought to be on good government which does not seek to make serfs of citizens. The stress should not be on stability. A regime bent on doing away with the fundamental rights of citizens is not good government. Authoritarian dictatorship can perpetuate itself without other assistance. What should be done is not to make it stable, but to bring it to public condemnation. A free way of life is not possible under majority oppression and intimidation. The illusion that ‘stability’ by itself is good must be dispelled. This reiteration of mine is not a redundant reiteration.

*(August 19, 1972)*

\*\*\*\*

It is treason for one to assist a foreign aggressor. It amounts no less to treason to assist the replacement of democracy by dictatorship. Freedom is a husk without grain if we get our military forces to defend the country against the invasion of a foreign Power but we permit a dictator of our own to establish totalitarian rule, depriving the citizens of any way of resistance to those who have seized authority over the people. This is the reason why certain fundamental rights are inscribed in the Constitution framed by the fathers of our freedom. They had foresight enough to see that power corrupts people and in particular, absolute power absolutely corrupts.

*(1972)*

*(We have previously posted a few pieces from the Indian Liberal Archives on the Indian Constitution. These can be accessed here —*

***C Rajagopalachari:** [‘The Keystone of the Constitution’](https://spontaneousorder.in/rajaji-constitution/)* 

***Nani Palkhivala:** [‘Constitution and the Common Man’](https://spontaneousorder.in/throwbackthursday-nani-palkhivala-constitution-and-the-common-man-1971/)* 

*To access the original piece, click [here.](http://indianliberals.in/uploads/periodicals/PDF_269_qohdkgSixth%20National%20Convention%20Rajaji%20Nagar%20-%20Swatantra%20party.pdf) Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.)*

* * *

**About Guest Author**

## Who ‘Creates’ History?

Original: https://www.spontaneousorder.in/p/5554-2

Author: Spontaneous Order

Published: 2016-01-20T15:37:59.000Z

Topics: history-education, textbook-censorship, government-intervention, academic-freedom

> A nation is shaped by a certain narrative—how it came to be what it is today, what values and beliefs its people hold and cherish, and how it is portrayed. Education has a vital role in shaping this narrative and in moulding people’s attitudes, and th

**Summary:**

Governments seek to shape national narratives by controlling history textbooks in schools, as exemplified by South Korea's Park Geun-hye administration's plan to commission a single mandatory history textbook for middle and high school students, overriding schools' freedom to choose from approved options. This sparked protests over omitting stories like that of Yu Gwan-sun, a girl who protested Japanese occupation and died allegedly from torture, amid fears of dictating history and curtailing human rights. The author draws parallels to India, citing the 2000s NCERT textbook controversy where A.K. Ramanujan's essay 'Three Hundred Ramayanas' was removed for challenging popular myths, hurting sentiments. From a classical-liberal viewpoint, such state interventions target schools to subtly influence future generations' worldviews—fostering hatred, doubt, or distorted facts on events like independence or emergencies—without drawing international scrutiny, unlike overt propaganda. This primes youth to be ignorant of alternative perspectives. The post argues for history education to reasonably represent all sides and perspectives to preserve gallant tales, political lessons, and prevent distortion, echoing a Korean protest banner: 'A good president makes history, a bad president changes history books.'

**Key points:**

- South Korea's Park Geun-hye administration proposes a single state-commissioned history textbook, limiting schools' choice and sparking protests over historical omissions like Yu Gwan-sun's story.
- India's NCERT faced similar backlash a decade ago when A.K. Ramanujan's essay on multiple Ramayanas was removed from syllabi due to sentimental objections.
- State control of textbooks enables subtle indoctrination by influencing young minds on modern history without immediate international notice.
- History curricula must include diverse perspectives to avoid priming youth with one-sided narratives and to teach objective lessons from the past.

**By Anam Naqvi**

* * *

A nation is shaped by a certain narrative—how it came to be what it is today, what values and beliefs its people hold and cherish, and how it is portrayed.

Education has a vital role in shaping this narrative and in moulding people’s attitudes, and the state and its governing bodies play a substantial role in deciding what is taught. Right from learning the alphabet to getting a doctorate certificate and beyond, watchdogs hold magnifying lenses to see what is being taught. The most controversial subject would probably be history. The saying goes “catch them young” and that is perhaps what South Korea is trying to do with its view of commissioning a single history textbook for its middle and high school students.

Like most countries, South Korea also has its historians who are sought after by publishers to write textbooks. Although these are then submitted to an official panel for approval, secondary schools are free to choose from a pool of books to use any of them as a part of their syllabus. But with what the Park Geun-hye administration has in mind, schools may have to part with some of this freedom.

The main bone of contention is the story of a young girl in the early 20th century who protested the Japanese occupation in her country and inspired her fellow Koreans.  Her death, from being allegedly tortured, made for a heroic history lesson. On inspection, however, it was found that not many text books carried the tale of Yu Gwan-sun, sparking a debate on how and what should be taught as part of Korea’s history.

Civic bodies and citizens are protesting against what they believe is an attempt to dictate history and produce like-minded individuals. The government, it is feared, wants to be the first and last word on how history is taught and interpreted. Koreans also fear that this ‘small’ suppression of thought may lead to further curtailment of human rights, as has happened earlier in their history.

All of this sounds a little too familiar, does it not?

Park Geun-hye’s stance is certainly not the first of a government trying to make its presence felt in education. Back home in India, we had a massive row just a decade back on what should go into NCERT textbooks. A K Ramanujan’s essay–a different take on The Ramayana (*Three Hundred Ramayanas)* also had to face flak for ‘attempting to change’ what the popular myth tells us. Sentiments are hurt and before one can even attempt to interpret what a piece of text wants to say, it is taken off the reading shelf and shoved into oblivion.

**Why target schools?**

Why would the government be interested in deciding what is taught in our schools and colleges? Probably because it gives them a chance to influence the way the next generation will see the world. It gives them a chance to swerve the way people think—whether it be developing hatred for a neighboring country, creating doubts about a national leader, or distorting facts about a country’s history, say, on what transpired during independence or internal emergency situations. Stealthily, the impressions one develops settle and form a membrane that is hard to permeate as one reaches adulthood.

While the press in a state could play the role of propaganda, like it does in a few countries currently, this could be risky as international agencies and media could take notice. Having one’s agenda make its way to school textbooks, however, does not invite as much attention. At least not until the ‘enlightened’ section of society take notice and protest. Introducing religiously-charged lessons in history or language subjects, or wiping off parts of texts where a certain government failed, or accentuating parts where one felt it was effective, should be understood as a priming tool to create a youth that might be ignorant about other perspectives, or at least not as well-informed.

The most contentious of topics is modern history. Today’s current events will form history in another 30 years. Tomorrow when the coming generations are learning about the past we went through, would they adhere to their parents’ accounts of what they observed, or what an institutionally-mandated manuscript details? Would tomorrow’s history books in the classroom reasonably, objectively and accurately represent what we are going through? Or will they distort it?

There are gallant tales of men and women that need to be told–of wars that were fought, of lessons in politics, and the many other lessons that history teaches us; lest we forget them. We have to learn history and teach it too, and it is important that all sides and perspectives be reasonably represented.

“A good president makes history, a bad president changes history books,” said a banner at one of the protests in South Korea. But, is the world listening?

*Anam Naqvi is currently working at the Economist Intelligence Unit as an editor and has been in the news and research business for over five years. She recently graduated from iPolicy, conducted by CCS Academy.* 

* * *

**About Anam Naqvi**

## Silence Please, The ‘Intellectuals’ Are Listening

Original: https://www.spontaneousorder.in/p/silence-please-the-intellectuals-are-listening

Author: Spontaneous Order

Published: 2016-01-17T14:26:13.000Z

Topics: free-speech, censorship, indian-constitution, right-to-offend

> A few self-proclaimed intellectuals met a long time back and set rules and regulations about what is offensive and what is not. Their intentions were right, we must respect each other, and must not offend anyone. Over time, the face of these ‘intellectu

**Summary:**

Sadaf Hussain satirically critiques how self-proclaimed 'intellectuals' undermine India's constitutional right to freedom of expression under Article 19(1)(a) through vague IPC Sections 153A and 295A, which punish speech deemed offensive on grounds of religion, race, caste, or community. These laws, he argues from a classical-liberal standpoint, mark the 'beginning of the end' of free speech by empowering anyone to seek punishment for perceived disrespect, stifling open discourse despite the lack of any universal 'reality' or truth—evidenced by diverse philosophies from Hindu schools to libertarians. Examples abound: Gaurav Jain questioned by police for eating beef, Taslima Nasreen and Salman Rushdie persecuted for writings, actors like Sunny Deol and Akshay Kumar targeted for films, comedian Kiku Sharda for mimicking a guru, and historical figure Galileo. Hussain mocks the solution as absurd 'commandments' like respecting the intellectuals' committee, never joking about anyone, preemptively apologizing, avoiding original opinions, and reserving offense for politicians only. This highlights the classical-liberal call for absolute freedom, including the right to offend, to foster genuine societal harmony without coerced silence.

**Key points:**

- IPC Sections 153A and 295A criminalize speech offending religious, communal, or other sentiments, eroding Article 19's freedom of expression.
- No universal truth exists across philosophies, justifying unrestricted speech rather than subjective offense-based censorship.
- Everyday actions like eating beef or comedy can lead to police harassment, as in Gaurav Jain's case.
- Satirical commandments expose the folly of preemptive apologies and self-censorship to avoid offending anyone.

**By Sadaf Hussain**

* * *

A few self-proclaimed intellectuals met a long time back and set rules and regulations about what is offensive and what is not. Their intentions were right, we must respect each other, and must not offend anyone.

Over time, the face of these ‘intellectuals’ changed but their frequent meetings have not. They meet in secret, away from the prying eyes of the public, and review “good” and “bad” things. Good is what is good according to them, and bad is what they have decided is bad. The best part is, these self-proclaimed intellectuals claim to represent the masses, and say that they do what they do for the betterment of society (it doesn’t matter whether you have asked for this betterment or not).

Our constitution guarantees us the Right to Freedom of Expression in Article 19 as one of the six key freedoms (with “reasonable” restrictions, which are wide-ranging and vague enough to encompass anything you might think of saying). And this freedom led to people speaking their mind, and other people taking offence. So these ‘intellectuals’ decided to enact Section 153(A) and 295(A) of the Indian Penal Code (IPC). This basically allows a citizen to seek the punishment of anyone who shows them disrespect towards them “on grounds of religion, race, place of birth, residence, language, caste or community or any other ground whatsoever”. And thus marked the beginning of the end of freedom of expression in India.

One problem is that we are all naïve. We see the phrase “Right to Freedom of Expression” and take it at face value, forgetting to look at the nuances (the devil, as they say, is in the details). There are caveats from other clauses of the article and sections of the IPC that cut down this freedom. And this is indeed a problem, because when people are acting as per their own will, they are not aware that their every action has the potential to offend someone somewhere in the community, society, country, or the world.

One of my friends, Gaurav Jain, tried a few days back, to eat beef. As a consequence ended up in the police station and was questioned for almost the entire day, not because he didn’t know how to cook, or because he cooked bad meat, but because he was hurting the sentiments of non-beef eaters, vegetarians and certain religious groups.

[

!['](https://substackcdn.com/image/fetch/$s_!2FtR!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fd42cc03d-a48c-462e-bd51-80c61c338e3d_400x242.jpeg "'")



](https://substackcdn.com/image/fetch/$s_!2FtR!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fd42cc03d-a48c-462e-bd51-80c61c338e3d_400x242.jpeg)

‘

There are many more in the list. Taslima Nasreen, Salman Rushdie and few others have been persecuted for writing books which were “offensive”, Shah Rukh and Gauri Khan for approving one of the “offensive” songs in the movie *Student of the Year,* Sunny Deol (Mohalla Assi) and Akshay Kumar (Oh My God) for “thinking out of box” and acting on what the writers/directors wanted them to act on, bloggers who were trying to be funny but unknowingly hurt the sentiments and emotions of women, or minority groups and so on.

The latest on this list of offenders is Kiku Sharda. His crime was to portray himself as one of the religious gurus, and entertain people. The list of naïve people also includes the very famous Galileo. He decided to prove something which was not acceptable, and paid for it with his life.

As one of the articles in [Swarajya](http://swarajyamag.com/culture/freedom-of-expression-meaningless-without-right-to-offend/) narrates:

> “the fear \[that absolute freedom of expression can be harmful\] has its roots in the belief that there is a reality (or Reality) which can be misrepresented or distorted if the freedom of expression is absolute. This presupposes a universally accepted definition of the reality. But the fact is that no such definition exists; there are as many definitions of reality as there are philosophers and philosophies. There are Christian theologians interpreting the faith in numerous ways; there are six orthodox Hindu schools of philosophy, with several sub-schools; there are Marxists again following countless lines; there are Western conservatives (all of them ardently anti-state, Burkeans in harmony with tradition); there are libertarians (followers of Ayn Rand and others); there are postmodern thinkers who actually do not believe in any reality. It is a long list. What then is the reality or ultimate reality? “

Since, there is no one truth, and no set definition of anything, what can we do? What can we do to live a happy harmonious life where nobody offends anybody else? Fear no more, I am here with my commandments of living a life peacefully:

-   **Thou shall respect the committee**
    

Reiterating the fact again, there is a committee of ‘intellectuals’ working for your betterment, you don’t go against them. And you don’t make fun of them. It is in fact a sin and you may have to pay a hefty price.

-   **Thou shall not make fun of anyone**
    

This includes the entire nation. You never know, your jokes or narrations might be hurting a particular segment or community. May be religious groups, minorities, atheists, cobblers, drivers and many others.

-   **Thou shall always be apologetic**
    

Because there is always someone you might offend. It is best to apologise to everyone in advance. If you need help, check out the disclaimers before a movie—they’re a good example of an exhaustive list of apologies we must make before being creative.

-   **Thou shall not think out of the box, or have your own opinion**
    

We must follow what has been approved by the intellectuals. They are in that committee for a reason. Stop being rebellious and stupid. If you want to make jokes, consult the pre-approved joke book which sets the parameters and guidelines for what is allowed.

-   **Only the politicians and people in power holds the rights to offend and hurt people’s sentiments.**
    

Realise who you are, if you do not fall under any of the categories mentioned above then do not even dare to speak your mind.

-   **Thou shall not associate with, or show any support for, anyone who has broken any of the above commandments**
    

…Or thou shall be prosecuted as an accomplice.

The commandments have been pre-approved by the intellectuals, who will ensure nobody is ever offended.

**\*Disclaimer\***

If this article has offended any community, sex, caste, creed, trees, animals, cars or any other sentient or non-sentient being whatsoever, my apologies in advance. Or in the words of Mangesh Padgaonkar:

*Salaam,To everyone, salaam*

*To the hand that holds, And brandishes the rod, salaam,*

*With my left hand on my rear,*

*For fear of the boot,* *A right-handed salaam,*

*To the one who watches me closely, salaam,*

*To the one who doesn’t watch and doesn’t care, salaam,*

*To the one who’d like to buy me out, salaam,*

*To his unseen boss, who orders him to buy me out, salaam,*

*Salaam, dear friends, to everyone, salaam.*

*The article was originally published in [Swarajya](http://swarajyamag.com/)*

* * *

**About Sadaf Hussain**

## #ThrowbackThursday: B R Shenoy— Why Are Prices Rising? (1962)

Original: https://www.spontaneousorder.in/p/shenoy-inflation

Author: Spontaneous Order

Published: 2016-01-14T13:38:27.000Z

Topics: inflation, deficit-financing, over-investment, foreign-aid, price-stability

> The following report was based on an interview with B R Shenoy and was was published in the September 18, 1962 issue of Economic Times. The interview was subsequently published in a publication by Forum of Free Enterprise titled ‘ Why are Prices Rising?

**Summary:**

B.R. Shenoy attributes India's rising prices since May 1955 to over-investment beyond available resources, financed through government budget deficits and money printing, which spreads to private sector lending and outpaces national output growth. From 1954-55 to 1961-62, money supply expanded by 60% while national product rose only 27%, driving prices up 34%. A 3.4% price dip in 1961-62 occurred because Rs. 344 crores in general-purpose foreign aid absorbed inflationary funds via foreign exchange sales to the Reserve Bank, limiting money expansion to Rs. 170 crores amid 3% output growth. However, since April 1962, reduced general-purpose aid has left inflationary money in circulation, spiking prices 7.2% in four months to 131.7 (1952-53=100), an annualized 19% record. Shenoy dismisses notions that inflation aids development, citing price-stable growth in EEC, Japan, Hong Kong, and Israel. He warns government controls worsen confusion and links share market slumps to aid dependency curtailing industrial activity. The classical-liberal solution: halt over-investment and deficit budgeting—the 'fire' under rising prices—rather than temporary foreign aid 'cold water,' as stability is essential for orderly growth.

**Key points:**

- Rising prices result from over-investment financed by budget deficits and money printing, expanding money supply faster than output.
- General-purpose foreign aid temporarily curbs inflation by absorbing excess money through foreign exchange sales, unlike tied project aid.
- Price stability, not inflation, is a precondition for sustainable economic growth, as demonstrated by EEC countries, Japan, Hong Kong, and Israel.
- To end inflation, governments must stop deficit budgeting and over-investment rather than impose controls or rely on foreign aid.

**By Guest Author**

* * *

*The following report was based on an interview with B R Shenoy and was was published in the September 18, 1962 issue of Economic Times. The interview was subsequently published in a publication by Forum of Free Enterprise titled ‘ Why are Prices Rising?’ In the interview, B R Shenoy links inflation to over-investment and deficit financing by the state.* 

Professor. B. R. Shenoy, an eminent economist and Director of the Gujarat University School of Social Sciences, has attributed the spiral of rising prices to what he calls *over-investment* and warned that the steps contemplated by the Government of India to check the price-rise were apt to render the existing confusion worse confounded.

Analysing the Price situation and the country-wide debate on the measures to check the rising prices, Prof. Shenoy told *“The Economic Times”* that it was a sad commentary on the economic and monetary enlightenment of the Indian people that vested interests should be able to sell the queer notion that a “rise in prices is the very condition of economic development” and that legislative and administrative measures could restrain rising prices.

More dangerous and misleading economic untruths were not spoken, he said, and added that logic and experience had repeatedly demonstrated that price stability was an essential pre-condition of stable economic growth even as the growth of an infant into manhood was not a disease to cause an inflationary upset. Economic development at near-record rates in the EEC countries, in Japan, Hong Kong, Israel and other countries had materialised under price stability and there was no device of controlling inflation other than putting a stop to it.

In reply to a question as to why the prices were rising after a decline of 3.4 per cent in 1961-62, Prof. Shenoy said the current phase of the price-rise, which began in May 1955, and the spurt in prices within this phase since April 1962 should be distinguished.

Prof. Shenoy said the current phase of the price-rise was the direct outcome of our desire to “invest” resources which we did not possess. The link between such investment and the price-rise could be easily seen, he said. “In- vestment beyond the available resources takes the form of budget deficits. The deficits are covered by printing money, part of which goes to commercial banks from the contractors or others who receive them, and the banks add to the finance they provide-through loans, advances, discounts and overdrafts for investments in the Private Sector. Over-investment thus spreads from the Public Sector to the Private Sector.

“Meanwhile, as over-investment cannot add to the available physical resources, it cannot add to the flow of the national product either. The expansion of money ensuing from over-investment will, therefore, outpace the output and a price-rise will emerge inevitably. This explains the expansion of money by 60 per cent from 1954-55 to 1961-62, while the national product rose during the period only by 27 per cent. As a result prices rose by 34 per cent during the interval,” he said.

Replying to a series of questions, Prof. Shenoy explained the 3.4 per cent fall in prices in 1961-62 by saying that the expansion of money during the year, resulting from over-investment on the Plan did not all remain in circulation. Most of the inflationary funds flowed back into the Reserve Bank in payment for the foreign exchange being drawn from the general purpose foreign aid. The amount of the utilised foreign aid during the year was Rs. 344 crores and the largest bulk of it was general purpose foreign aid. As a result, the expansion of money during the year was held down to Rs. 170 crores, which apparently fell short of the needs of the economy, the national product rising during the year by over 3 per cent.

Explaining the point further, Prof. Shenoy said foreign exchange from the general purpose aid could be sold to any party, so it could withdraw inflationary funds in circulation. Aid tied to projects concerned could not be used to withdraw from circulation inflationary funds. This also explained our eagerness for general purpose foreign aid, he said.

Analysing the spurt in prices since last April, he referred to the meetings of the Aid-India Club and said quantum of the general purpose aid was still in doubt and the country, due to pressure for foreign exchange resulting from over-investment persisting, was drawing on currency reserves to the utmost possible extent. The result was that the inflationary moneys issued out through over-investment remained in circulation and drove prices up. During the 4 months ending August 18, 1962, the price index had risen by 7.2 per cent to 131.7 (1952-53 as 100). This amounted to an annual rate of increase of 19 per cent, which was an all-time record, the previous high being 11.2 per cent in 1955-56.

Analysing the slump in the share market in the background of inflation, Prof. Shenoy said that the country’s Plan depended on foreign aid to a dangerous extent. The scarcity of utilisable foreign aid had lowered industrial activity, through the short supply of raw materials and accessories. The adverse effects of this on production, in the context of rising production costs. were apt to reduce profits and dividends. A slump in share prices was a natural result. He linked the sharp fall in January 1962 of the “Economic Times” index of ordinary share prices to the second adjournment of the Aid-India Club meeting, and said that the factor had been reinforced by the Chinese border incidents.

Agreeing to a suggestion that the shifting of the projects aid to general purpose aid might provide a temporary relief both from the price-rise and the share-market slump, he said that the root cause, which was the futile and self-damaging effort to invest non-existent resources, should be removed.

“If we must have orderly and stable development. we must first put a stop to this strange pursuit. The corrective to boiling water–rising prices–is to remove from underneath the fire of deficit budgeting: to pour cold water–foreign aid–can lower the temperature only temporarily. If aid -fell short of inflation, prices will resume their uptrend,” he said.

*To access the complete piece, click [here](http://indianliberals.in/uploads/periodicals/PDF_339_l2s7n0Why%20are%20Prices%20Rising.pdf). Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Guest Author**

## #ThrowbackThursday: A D Shroff— Businessmen Must Pick Up Courage (1962)

Original: https://www.spontaneousorder.in/p/shroff-courage

Author: Spontaneous Order

Published: 2016-01-07T14:05:59.000Z

Topics: free-enterprise, business-politics, state-intervention, indian-liberalism

> In 1962, around the time of the time of the General Elections–there was considerable public interest regarding the place of private enterprise in politics. The Forum of Free Enterprise arranged a symposium to discuss these matters. The following speech

**Summary:**

In his 1962 speech at a Forum of Free Enterprise symposium amid general elections, A D Shroff urges Indian businessmen to overcome moral cowardice and actively engage in politics to safeguard private enterprise against excessive government interference. He contrasts pre-independence complaints of governmental neglect with the current overreach, where politics permeates business through pervasive laws like the Company Law and rapidly expanding labor legislation, frustrating economic growth. Shroff recalls businessmen's past participation in the independence struggle, including his own role in the Indian Merchants’ Chamber sponsoring a boycott of British goods, and praises a recent businessman's call for organized opposition against the ruling party's dominance, decrying the fascist-like notion that 'everything for the State, nothing outside the State.' He credits the Forum of Free Enterprise, which he founded in 1956, for instilling courage in some businessmen. Ultimately, Shroff warns that without bold, independent action to assess and eliminate unnecessary laws, private enterprise—and thus democracy—will perish, as the two are inextricably linked.

**Key points:**

- Businessmen must shed moral cowardice and engage independently in politics to defend private enterprise from state overreach.
- Pervasive legislation like Company Law and labor laws hampers industry, requiring realistic assessment and removal of unnecessary rules.
- Free enterprise and democracy are interlinked and cannot survive without each other.
- The Forum of Free Enterprise, founded in 1956, has begun instilling courage in businessmen to voice opinions against ruling party dominance.

**By Ujwal Batra**

* * *

*In 1962, around the time of the time of the General Elections–there was considerable public interest regarding the place of private enterprise in politics. The Forum of Free Enterprise arranged a symposium to discuss these matters. The following speech was given by A D Shroff (1899-1965), President of Forum of Free Enterprise and a prominent economist, industrialist and liberal. Talks given in the symposium were later compiled in a publication–[‘Private Enterprise and Politics’](http://indianliberals.in/uploads/periodicals/PDF_260_muxgrhPrivate%20Enterprise%20and%20Politics.pdf)*

There is an old story about the oldest profession in the world. The story goes that there was once an interesting discussion between a scientist, a lawyer and a politician. The scientist argued that his was the oldest profession because if the scientist had not been there, the secrets of nature would not have been found and life would have been very different indeed. The lawyer argued that his profession was older, as unless the lawyer had made laws and brought order to the world, there would have been chaos. And the politician argued that his profession must be the oldest as he was the one who creates chaos! As a matter of fact, this specialisation in creating chaos persists in politics so much, even today, that nobody else can claim that his profession is older than that of the politician. But, today, with the vast increase in the power of the state and the governments, everyone is concerned with politicians whatever the latter’s undesirable activity may be.

In the pre-Independence days, business men used to complain that the Government took very little interest in them. But today, their complaint is that, unfortunately, the Government takes too much interest in them. The necessity, therefore, arises for private industry or business in general, to have a look across to see if they could take some interest in politics too.

In the pre-Independence days, business men used to complain that the Government took very little interest in them. But today, their complaint is that, unfortunately, the Government takes too much interest in them. The necessity, therefore, arises for private industry or business in general, to have a look across to see if they could take some interest in politics too.

In the days of India’s great political struggle, the business men of India were coming forward and taking part in the political movement of the country. When I was the Vice-president of the Indian Merchants’ Chamber in Bombay, we used to be sent for and asked by the High Command of the Congress Party in those days to take a more active interest in politics, including taking out traders’ and merchants’ processions in the city of Bombay. As a young enthusiast, I took the risk in the Indian Merchants’ Chamber of sponsoring a resolution to boycott foreign goods. We were approached by the Commissioner of Police, for searching the records of the Indian Merchants’ Chamber for our antecedents in sponsoring a resolution for boycott of British goods.

Today, fortunately, things have changed. It is most heartening that on the eve of the recent general elections, a business man had the courage to express his opinion that there is need for bringing about an organised opposition in the country and, therefore, he would not only support the ruling party but also a new opposition party. It is said by some that the ruling party has confidence of the people and, therefore, the ruling party is the State. The State stands for everything and therefore, anybody who cares for the country should do nothing against the ruling party, it is further argued. This trend of thinking, of everything for the State, nothing outside the State and nothing against the State, constitutes a very serious and formidable risk to our democratic way of life. It was an idea propounded by Fascist Mussolini, and it is sad to see that it is being repeated in our country.

I know what moral cowardice the business men of India suffered from at the time I sponsored the Forum of Free Enterprise in 1956. This organisation has instilled courage into a few of the business men of India who today are emboldened to stand up and express their opinions. As a matter of fact, politics has raided business to such an extent that whether business men like it or not, they are dragged into politics. There is hardly a business problem where politics does not enter. For instance, if you are running a joint-stock company, before taking every action you have to think of the Company Law. This is but one of the severaI laws which concern business and industry. Legislation in this country has become so comprehensive and all-pervading that it entirely governs business. For instance, labour legislation is extremely desirable in its own way, but it has progressed at such a terrific pace that it has become difficult to carry on industries in a normal manner. The time has come for a realistic assessment of all I legislation affecting commerce and industry, and doing away with unnecessary laws. Otherwise, the economic growth of the country would be seriously affected, as most of the energies of the people in private enterprise are frustrated in seeking to meet the requirements of the laws.

Unless the business community in India is prepared to shed its moral cowardice and muster sufficient courage to exert itself freely and independently, it is not merely that private industry has very little chance of survival in the coming generation or two, but it will also allow by default the democratic way of life to perish. Free enterprise and democracy are so closely interlinked that free enterprise cannot be detached from democracy just as democracy cannot survive without free enterprise. Free Enterprise was born with man and will continue to survive as long as man lives.

*To access the complete piece, click [here](http://indianliberals.in/uploads/periodicals/PDF_260_muxgrhPrivate%20Enterprise%20and%20Politics.pdf). Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Ujwal Batra**

## Uberocracy: How the Sharing Economy is Changing Everything

Original: https://www.spontaneousorder.in/p/sharing-economy

Author: Spontaneous Order

Published: 2016-01-05T12:26:26.000Z

Topics: sharing-economy, spontaneous-order, ride-hailing, regulation

> By Ankur Gautam When I moved to Chennai in 2013, one of the most challenging experiences for me (and most others who did not know the language) was negotiating fare with the auto rickshaw drivers. It was very difficult to find an auto that would go by t..

**Summary:**

Ankur Gautam recounts the chaos of negotiating fares with auto-rickshaw drivers in Chennai in 2013, resolved by Uber and Ola's entry by late 2014, offering affordable air-conditioned rides via smartphone apps, marking the dawn of India's sharing economy. He defines the sharing economy as spontaneous order—a socio-economic ecosystem for sharing resources through shared creation, production, distribution, trade, and consumption. Uber exemplifies this by acting as a tech marketplace connecting independent car owners (who handle driving and maintenance) with commuters, splitting fares without owning fleets. Technology slashes transaction costs, enabling platforms like BlaBlaCar for inter-city rides and Airbnb for rooms, bolstered by social networks for trust and online payments. This fosters competitive enterprise at spontaneous order's core. Yet, concerns arise: a 2014 Uber rape in Delhi prompted temporary nationwide bans, lifted amid consensus that prohibition isn't the fix. Taxi unions lobbied for regulation in Maharashtra, and authorities struggle with taxation. Gautam advocates eternal vigilance for consumer safety over detrimental regulation to preserve progress. The sharing economy, powered by the internet's spontaneous order, disrupts traditions and is here to stay, demanding we 'care about sharing.'

**Key points:**

- Uber and Ola disrupted Chennai's chaotic auto-rickshaw market by 2014 with metered, app-based AC cabs at comparable or lower fares.
- Sharing economy platforms like Uber match independent asset owners with consumers via technology, reducing transaction costs and enabling trust through reviews and payments.
- A 2014 Delhi Uber rape incident led to temporary bans, but authorities recognized regulation over prohibition as key amid union lobbying and tax uncertainties.
- Eternal consumer vigilance improves safety without heavy regulation that would hinder spontaneous order's enterprise-driven progress.

**By Guest Author**

* * *

**By Ankur Gautam**

When I moved to Chennai in 2013, one of the most challenging experiences for me (and most others who did not know the language) was negotiating fare with the auto rickshaw drivers. It was very difficult to find an auto that would go by the meter fixed on the vehicle, a problem faced by locals and outsiders alike. There was chaos and disruption in the market for local conveyance and entrepreneurship came to the rescue. By the end of 2014, Uber and Ola cabs had started plying on the roads of Chennai, with fares low enough to compete with auto rickshaws. An air-conditioned cab for the fare of an auto (sometimes even lower!) was just a touch away on your smart phone. This was the dawn of sharing economy in India.

What is sharing economy? Sharing economy is perhaps the best example of spontaneous order there is in today’s world. It is a socio-economic ecosystem built around the sharing of human and physical resources. It includes shared creation, production, distribution, trade and consumption of goods and services by different people and organisations. Consider Uber. Uber saw an opportunity in the chaos described above. Uber does not own its own fleet of cars. The owners of the car can register themselves with Uber and they are responsible for driving and maintenance themselves. What Uber does is to act as a marketplace that connects cabs to consumers through smartphone technology. Commuters pay for rides which are shared by the driver and Uber. Simple as that!

Uber is just one part of it. Technology is rapidly transforming how we produce and consume goods and services. By cutting down transaction costs, it has made sharing assets cheaper and easier than ever. You can share a car ride from one city to another on mobile-based apps like Blabla Car, choose rooms provided by private individuals on Airbnb and pay for everything online. Online social networks have been helpful in addressing security concerns by providing a way to check up on people and build trust, while online payment systems have gained trust of the masses over time. Sharing economy provides new opportunities for enterprise, and competitive enterprise is at the heart of spontaneous order!

While all this sounds good and ideal with this sharing economy concept, there are wider issues pertaining to protection of consumers that still attract my concern. The unfortunate event of a lady being raped in one of the Uber cabs in Delhi saw authorities waking up to the issues and banning the service temporarily. Following the incident, Uber was banned in a few other cities as well. But it was widely accepted that banning was not a solution to the problem and the ban was lifted. What is the solution then? There certainly is regulatory uncertainty on this. Traditional taxi unions lobbied for regulation of private cab-hailing services in Maharashtra. Authorities are still grappling with how and whether to tax services provided under this newly emerged shared economy. I believe that eternal vigilance is the price of liberty and that regulating the space will be detrimental to its progress but as a consumer of these services, I am very much interested in seeing how our vigilance mechanisms can improve to factor in our protection and safety concerns.

All said and done, sharing economy has arrived and is here to stay. The internet itself is an example of spontaneous order and it has now enabled the sharing economy which presents immense potential. It is the internet’s new value proposition to consumers and it has been disruptive enough for traditional business and regulators to have woken up to it. With so much happening in a short span of about two years, we sure live in interesting times. Let us start caring about sharing.

*(Ankur Gautam works as a Research Associate with [IFMR LEAD.](https://ifmrlead.org/) He graduated from iPolicy in 2012)*

[Read More: The marvel of spontaneous order](https://spontaneousorder.in/the-marvel-of-spontaneous-order/)

* * *

**About Guest Author**

## Delhi’s Odd-Even Rule: An Appropriate New Year’s Present?

Original: https://www.spontaneousorder.in/p/odd-even-rule-appropriate-new-years-present

Author: Spontaneous Order

Published: 2015-12-30T19:19:50.000Z

Topics: air-pollution, odd-even-scheme, public-transport, regulatory-reform

> By Ayurshi Dutt Delhi’s air quality has shifted from ‘very poor’ to ‘hazardous’ due to ultra-fine particulate matter or PM 2.5 emissions. According to an announcement made by the Delhi government, vehicles with odd and even number plates will pl

**Summary:**

Delhi's odd-even vehicle rationing scheme, starting January 1, 2016, aims to combat hazardous PM2.5 pollution amid claims it kills one person hourly, but evidence from similar policies is mixed and its success hinges on robust public transport. Beijing's 2008 pilot saw a 40% emissions drop, leading to permanent restrictions on a fifth of vehicles, while Mexico City's 1989 program initially cut pollution 11% but spurred second-car purchases, resulting in a 13% long-term rise in carbon monoxide and no public transit ridership increase. The author argues Delhi's 15-day trial is flawed, as school closures remove buses, potentially inflating success, and pollution reductions may be minimal per some analyses. A classical-liberal critique highlights regulatory barriers like auto-rickshaw permit caps creating artificial scarcity, high fares, and supply shortages; dismantling this 'license-permit raj' alongside metro expansions, higher frequencies, and last-mile connectivity is essential. While commending government intent, the piece stresses good policies over good intentions, urging mindset shifts to avoid future gas-chamber living.

**Key points:**

- Odd-even schemes show mixed results: Beijing achieved 40% emissions drop but ongoing restrictions; Mexico City saw initial 11% pollution cut but 13% CO rise long-term due to second cars.
- Delhi's policy requires robust public transport, including increased metro frequency and last-mile solutions, to succeed.
- Regulatory caps on auto-rickshaws create scarcity and high fares; dismantling license-permit raj is needed for better supply.
- 15-day trial is inadequate and skewed by school closures removing buses.

**By Guest Author**

* * *

**By Ayurshi Dutt**

Delhi’s air quality has shifted from ‘very poor’ to ‘hazardous’ due to ultra-fine particulate matter or PM 2.5 emissions. According to an announcement made by the Delhi government, vehicles with odd and even number plates will ply on alternate days in the city from January 1, 2016. This method, most commonly known as road space rationing, is followed in various forms across the world.  According to Anumita Roychowdhury, head of the air pollution control unit at Centre for Science and Environment, “Pollution is so severe that it kills one person every hour.” The present situation certainly warrants some drastic measures.

The question is, will the policy work?

Delhi has followed suit after cities like Beijing, Mexico City, Sao Paulo, London and Bogota implemented road spacing policies. In Beijing, road spacing initiative was first launched as a temporary measure in July 2008, just ahead of the Beijing Olympics. Before actually implementing the road spacing policy, they conducted a pilot test in 2007, restricting about one-third of Beijing’s fleet of cars for four days. Restrictions were imposed on private vehicles by allowing even and odd license plates to drive on alternate days with the violators having to cough up 200 yuan for breaking the rules. **The new policy saw a 40% decline in daily emissions,** prompting the authorities to implement the move on a permanent basis in October 2008. While driving restrictions are in place, the policy today is slightly different. As of today, the city bans nearly a fifth of private vehicles from operating in the city.

Mexico City launched a similar programme in 1989, which restricted the plying of vehicles according to the day of the week and the last digit on the vehicle’s license plate.  When imposed, the restrictions applied to 460,000 vehicles, or nearly a fifth of all vehicles, per day. There measures led to a 11% reduction in pollution levels. **But immediately after, residents began buying second cars to work around the ban. The long-term impact of the scheme on carbon monoxide levels has been a 13% rise. Nor did the measures lead people to switch to public transportation, as was expected. “**The data from Mexico City subways and bus systems found no evidence of an increase in ridership”, a study concluded.

The evidence then, is mixed. One thing, however, is clear. This program will work only when accompanied by a robust and convenient public transportation sector. The metro has been a blessing, taking many vehicles off the road. But would the metro be able to handle the additional load of passengers once this policy is implemented, given how cramped it is at peak hours? The frequency of metros needs to increase. And if the nearest metro station is a few kilometers away, one may not think of it as the first transport option—the problem of last mile connectivity is another matter that needs to be tackled.

The other part of the public transportation system is the auto-rickshaws; and that has its own challenges. As many of us must have experienced, it is often quite a task to find an auto. A major reason for this is the regulatory framework in place which creates an artificial scarcity–not allowing the supply for autos to naturally meet demand. The number of autos that can ply are capped, leading to high fares. Dismantling the license-permit raj along with creating a sensible regulatory framework in the sector would be a good first step in creating a robust public transportation system.Other concerns persist–for one, do we have adequate police force to implement the rule?

The policy is being tried for 15 days, but that seems to be too short a period to judge its success. Given the schools are being shut for the 15-day period, many school buses will be off the road. It may well be that the program appears to be successful during the 15 days, but we need to question whether this is an ideal way to measure the efficiency and future implementation of this policy. And at least some have expressed that the policy would lead to only a [minimal reduction in pollution](http://www.financialexpress.com/article/economy/odd-even-formula-cars-not-to-blame-for-delhi-pollution/183759/), and other, more pressing problems need to be tackled to address the issue comprehensively.

What is certainly commendable is that the government has shown the will to address the issue. But good intentions, as we’ve seen so often, do not always translate to good policies. But along with proper policies and measures to address the complexities of the issue, what we need too is a change in mindset and a measure of willingness among the people. After all, we don’t want future generations to live with breathing masks. Life in a metro would be better than life in a gas chamber.

*(Ayurshi is a student of Mass Communication from Delhi University. She is currently interning with CCS Academy)*

* * *

**About Guest Author**

## Section 377: A Long Way To Go

Original: https://www.spontaneousorder.in/p/377-bill

Author: Spontaneous Order

Published: 2015-12-23T16:06:30.000Z

Topics: section-377, lgbtq-rights, judicial-review, constitutionalism

> In a gallant effort, Congress MP Shashi Tharoor brought in a bill to decriminalise homosexuality last week. It is rare to see the sort of promptness that was evident, for a change, in our representatives—the bill was promptly rejected, without any discu

**Summary:**

Congress MP Shashi Tharoor's private bill to decriminalize homosexuality under Section 377 was rejected by Parliament without discussion, exemplifying legislators' disregard for debating personal rights while claiming authority to vote on all matters. The author invokes Robert Nozick's principle that individuals have rights no one may violate, emphasizing constitutionalism and judicial checks on legislative power. The 2009 Delhi High Court ruling commendably struck down Section 377 as violating rights to life, liberty, privacy, and dignity, prioritizing constitutional over public morality. In contrast, the 2013 Supreme Court upheld it, dismissing concerns by noting a 'miniscule fraction' affected and only 200 convictions in 150 years, a flawed approach treating justice as numbers-based. Legislators' derision of Tharoor's bill underscores the need for judiciary to enforce liberty as the principle enabling diverse cultural expressions, blind to prejudices. Amid cultural resistance, the author applauds liberal voices in Congress and BJP, including proposals for clarificatory amendments, on this long journey toward rights protection.

**Key points:**

- Parliament's rejection of Tharoor's Section 377 decriminalization bill without debate undermines democratic discourse on individual rights.
- The 2009 Delhi High Court correctly invalidated Section 377 for violating constitutional rights, distinguishing it from public morality.
- The 2013 Supreme Court erred by upholding Section 377 based on low prosecutions (200 in 150 years) and small affected population, ignoring principle-based justice.
- Liberty must supersede cultural prejudices, with judiciary checking legislative excesses.
- Applaud and support liberal voices advocating Section 377 reform amid legal and cultural challenges.

**By Ujwal Batra**

* * *

In a gallant effort, Congress MP Shashi Tharoor brought in a bill to decriminalise homosexuality last week. It is rare to see the sort of promptness that was evident, for a change, in our representatives—the bill was promptly rejected, without any discussion.

In a democracy, all matters should be up for debate, but not all matters should be up for vote. Our legislators, of course, seem to hold the precise opposite view—certain matters aren’t even worthy of debate and *all matters* are up for vote—even matters that concern the most personal of rights and liberties of a significant part of our population. The truth in certain matters, it appears, is so eminently evident that it shouldn’t even be up for discussion in the largest democracy in the world.

The principles that bind governments, preventing them from doing what they will, and set limits on what legislators can decide, are the principles of constitutionalism and individual rights. These principles were best articulated by the libertarian theorist Robert Nozick :

> “Individuals have rights, and there are things no person or group may do to them (without violating their rights).”

The legislature *should not* have an unfettered power to deny rights—that is why there are procedural constraints that ensure that all matters go through a due process; and institutional constraints that check the abuse of power by the legislature (or, for that matter, by the other branches of the government).

The primary institutional constraint over the legislative branch is our judicial system. On many occasions in the past, the judiciary has asserted its authority and has emerged as a defender of the constitution and individual rights. Judges are motivated by a very different set of considerations than the legislature (not by vote banks or elections, for one), and it is this is what allows them, often times, to give a greater consideration to justice and check the excesses of the legislature.

It was this dispassionate consideration for justice that allowed the High Court to arrive at its monumental ruling in 2008—a decision that was commendable not merely for its boldness, but that it was firmly grounded in constitutional morality and principles. Section 377, the court had held, violated the right to Life, Liberty, Privacy and Dignity. It drew a distinction between public and constitutional morality. As A P Shah, who had headed the 2009 HC Bench later remarked, “Why should someone’s fundamental life choices be shaped by archaic notions of public morality?”

That is the fundamental task of the judiciary in such matters—to examine the validity of laws through the framework of the constitution. Its primary commitment is not to public opinion or public morality, but to constitutional principles.

Justice requires that we be blind to religious and cultural prejudices. This is not to say that culture and religion do not matter; but that these are not the only, or even the prime considerations in matters of justice.  Justice, before anything else, is a matter of principle, and our primary commitment needs to be to the principle of liberty—the one value that allows for the peaceful expression of all others.

A variety of cultural values can find expression through liberty. But a culture that restricts liberty would necessarily tread along a certain path–favouring a particular set of values while restricting the peaceful expression of others. Justice lies not in maintaining a historical narrative or upholding certain cultural values; it lies in treating everyone justly—in extending the same rights and protection of law to everyone.

The 2013 Supreme Court Judgement, in stark contrast to the High Court Judgement, saw nothing constitutionally untenable in a law that criminalises sexual acts among consenting adults; a section that in effect discriminates against a significant chunk of the population and has been used as a tool for harassment. The court noted that ‘only a miniscule fraction’ of people constituted LGBTQ (which of course, is a blatantly wrong assessment, but that is beside the point), and that there had only been ’200 convictions in the law’s 150 year old history.’ Should such matters, even if they are true, have any bearings on considerations of justice? Is justice a matter of numbers? Is a law any less unjust merely because it hasn’t been fully exploited in exploiting people?

While noting no constitutional infirmities in the matter, the judiciary left it to our representatives to amend the law. And how our representatives dealt with the matter was evident with what transpired last week. It is true that Private member bills are rarely passed into law, or even taken up for consideration; but the manner in which Tharoor’s bill was met with derision, sneers and even sexual innuendos by the members of our esteemed parliament is disquieting to say the least.

The way forward seems uncertain—Tharoor was optimistic and willing to ‘try again’ in an interview he gave recently. A group of lawyers has submitted a proposal to the Delhi government  to tackle the issue by issuing a clarificatory amendment ‘saying consenting same-sex intercourse between adults does not constitute carnal intercourse against the order of nature.’

The road ahead is fraught with legal challenges, let alone cultural ones. In this climate, what is certainly heartening is that there are liberal voices that have supported amending 377—the Congress has come out in support and even certain voices in the BJP have expressed that the matter needs to be reconsidered. These voices need to be applauded each step of the way, on what now appears to be a very long journey.

* * *

**About Ujwal Batra**

## #ThrowbackThursday: C Rajagopalachari — Liberty, Public Good, and State Coercion (1965)

Original: https://www.spontaneousorder.in/p/rajaji-liberty

Author: Spontaneous Order

Published: 2015-12-17T19:29:01.000Z

Topics: classical-liberalism, swatantra-party, minimal-government, state-coercion

> The following article was published in the Swatantra Souvenir published in 1973; and was originally written by C Rajagopalachari in 1965. In the piece, Rajaji talks about the meaning of liberalism, and of Swatantra Party’s commitment to liberty. Politi.

**Summary:**

C. Rajagopalachari defines political liberalism as minimizing state encroachment on individual freedom, limiting government to maintaining order while promoting free enterprise, free trade, competition, and liberties of thought, conscience, press, and research—embodied in the Swatantra Party's commitment to 'Swatantra' (freedom). He distinguishes this from corrupted 'neo-liberalism' in the US, which supports greater state coercion for the 'public good,' and critiques India's Congress Party for adopting coercive socialism via the 'Permit-Licence-Quota-raj,' leading to high taxation, bureaucratic tyranny, and official oligarchy as predicted by Herbert Spencer. Spencer warned that socialism justifies extreme measures, resulting in unchecked coercion by officials prioritizing their interests, vindicated in India's scene of inefficient state management defended by politicians. Elections do not enhance character or prevent despotic bureaucracy; liberty is measured by minimal restraints on individuals, not governmental form. Rajaji rejects Congress's internal maneuvers to maintain power and proposes limiting all governments' powers to subtract from individual freedom, upholding the 1950 Constitution's Fundamental Rights for minimum government and maximum citizen freedom—the Swatantra Party's and global liberals' stance against ideological corruption.

**Key points:**

- Political liberalism requires minimal state intervention to preserve individual freedoms and voluntary cooperation, opposing coercive socialism like India's Permit-Licence-Quota-raj.
- Herbert Spencer's warnings of socialism breeding tyrannical bureaucracy through unchecked coercion are evident in India's high taxation and inefficient state control.
- True liberty depends on few restraints imposed by government, regardless of elections or representative machinery.
- Governments must be restricted from subtracting individual freedoms, aligning with India's Fundamental Rights and the Swatantra Party's platform for minimum government.

**By Ujwal Batra**

* * *

*The following article was published in the Swatantra Souvenir published in 1973; and was originally written by C Rajagopalachari in 1965. In the piece, Rajaji talks about the meaning of liberalism, and of Swatantra Party’s commitment to liberty.* 

Political Liberalism holds that the State should encroach as little as possible on the freedom of the individual, its function being to afford and keep order. The corresponding economic attitude is freedom of private enterprise in industry and commerce, free trade, and free competition. Ethically liberalism stands for liberty of thought, liberty of conscience, liberty of the Press, unhampered intellectual research and creation. *Swatantra* is the Sanskrit word for all this freedom.

The meaning of words suffers change in the course of events and people’s attitudes take different shapes in different countries. A liberal in US politics is very different from liberals in Germany or Britain. The original liberalism of the United States was the same as it was and continues to be in Germany or Britain. viz., the shaping of governance so as to diminish compulsion in social life and increase voluntary co-operation. Today a US ‘liberal’ politician stands for greater governmental authority over the citizen’s life; he stands for control and diminution of the citizen’s individual choices in his affairs; he supports State coercion where it is considered that such coercion is necessary for the public good, the decision resting with the Government; he supports Federal authority reducing State autonomy. We can thus see how much confusion can be caused in India by mixing up what is said about ‘liberals’ and ‘liberalism’ in current American literature. German and international liberalism in their general approach are identical with the Swatantra attitude. Not so American neo-liberalism.

Everyone agrees that governments should help the handicapped sections of the people out of public funds. Apart from this, the public good can be achieved in two ways, one: by leaving citizens free to judge for themselves and work for their own good and by State intervention only when individual action tends to hurt others; or two: by governments deciding what should be done by citizens and dictating by law what they should do and who should do. In India the latter way has been adopted by the Congress Party Government and it has taken the shape of the notorious Permit-Licence-Quota-raj.

Herbert Spencer ( 1820-1903), the great British philosopher of Evolution wrote:

*“The fanatical adherents of a social theory are capable of taking any measures, no matter how extreme, for carrying out their views; holding, like the merciless priesthoods of past times, that the end justifies the means. And when a general socialistic organization has been established, the vast, ramified, and consolidated body of those who direct its activities, will use without check whatever coercion seems to them needful in the interests of the system, which will practically become their own interests. They will have no hesitation in imposing their rigorous rule over the entire lives of the actual producers, traders and other workers; until, eventually, there is developed an official oligarchy, with its various grades, exercising a tyranny more gigantic and more terrible than any which the world has seen.”*

One can see in this a true picture of the present Indian scene. Taxation goes up in order to meet the cost of State intervention and transfer of management from the hands of the individuals who were interested in its being efficiently done to those of officials who enjoy power without factual responsibility. When any defects or failures are brought to light, the tendency of those in political authority is to defend the officials lest the philosophy of State intervention may be discredited by these oft-recurring lapses. For defraying the cost of carrying out the ever-multiplying regulations, each of which requires an additional staff of officers and for meeting and outlay for new State institutions, new taxes have to be levied and they are planned to be levied, always giving the benefit of doubt in regard to quantum to the Government.

“Hitherto you have been free to spend a portion of your earnings in any way which pleased you; hereafter you shall not be free so to spend it, but we will spend it for the general benefit”. This is how Herbert Spencer in anticipation put in simple language the socialist scheme of intrusion of the State for the public good. The coercion of older days was felt by political reformers to be evil, even if it was mitigated by many beneficent acts for the public good. The coercion exercised by present-day governments is ought to be justified by the argument that the governing body of a nation, which is in position as a result of free elections, is entitled to practise such coercion.

Herbert Spencer asks :

*“If men use their liberty in such a way as to surrender their liberty, are they thereafter any the less slaves? If people by a plebiscite elect a man to be a despot over them, do they remain free because the despotism was of their own making? Are coercive edicts issued by him to be regarded as legitimate because they are the ultimate outcome of their own votes? The liberty which a citizen enjoys is to be measured, not by the nature of the governmental machinery he lives under, whether representative or other, but by the relative paucity of the restraints it imposes on him. Whether this machinery is or is not one he shared in making, its actions are not of the kind proper to liberalism if they increase such restraints beyond those which are needful for preventing him from directly or indirectly aggressing on his fellows.”*

Elections do not improve men’s talents or character. The working of institutions *is determined* by men’s character. “There is no adequate endowment of character such as is required to prevent the growth of despotic bureaucracy”. These words of warning uttered by Herbert Spencer have been completely vindicated by what we have seen and are seeing in India today. Political parties in power inevitably become flourishing mutual benefit associations, as the Congress Party in India has become.

We have news that the Congress Party has put off the elections that are now due to constitute its important committees. It is not stated that this is because of the Chinese expansionist moves or to Pakistan’s aggression. The patent absurdity of such a claim seems now to have been realised. The postponement is just to cover up discord, to camouflage disunity so that no  difficulties may be created in the way of continuing the present bosses in position.

**The question will be asked, what is your constructive proposal to remedy the inevitable evils of party governments which you point out?** The answer is that governments, whatever their composition, should not be allowed to have these powers of subtracting from the freedom of the individual. This was Herbert Spencer’s firm view. It was also the considered view of the fathers of the Indian Constitution as passed in 1950, which was embodied in the Fundamental Rights. Whatever party the government may be formed out of let there be minimum government and maximum freedom to the citizen: this is the answer to the question and this is what the Swatantra Party of India and Liberals all over the world stand for.

The new liberalism of the United States of America is an illegitimate product of what may be called the infection of the opposition. It has transformed itself into the opposite of what it originally was. Tolerance opposes intolerance but in order to gather and conserve strength for this purpose, it itself develops intolerance. All virtues and ideologies tend thus to be transformed and corrupted by a process analogous to electro-magnetic induction. Liberalism in order to meet the growing demands of an unenlightened crowd which refuses to be enlightened and impatiently presses for welfare through State coercion itself adopts its opponent’s coercive principles of governance. The cause of Freedom calls for true and sturdy defenders, who will not thus compound with evil, but work for freedom and enlightenment however hard or long the task may be. Otherwise in the long run while the party in office may gain power, freedom’s battle will be lost.

*To access the complete piece, click [here.](http://indianliberals.in/uploads/periodicals/PDF_269_qohdkgSixth%20National%20Convention%20Rajaji%20Nagar%20-%20Swatantra%20party.pdf) Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Ujwal Batra**

## Sharad Joshi: A Liberal Giant Passes Away

Original: https://www.spontaneousorder.in/p/sharad-joshi-a-liberal-giant-passes-away

Author: Spontaneous Order

Published: 2015-12-12T21:50:30.000Z

Topics: agriculture-policy, farmers-rights, indian-liberalism, economic-freedom

> Earlier this morning, Sharad Anantrao Joshi (3 September 1935 – 12 December 2015), the founder of Shetkari Sanghatana, passed away at his home in Pune. He was 81 years old. His early life was that of a professor and a bureaucrat, but what he came to be

**Summary:**

Sharad Joshi, a rare Indian liberal and founder of Shetkari Sanghatana, passed away at 81 in 2015 after a career as professor, bureaucrat, and farmer-activist. Quitting his government job post-Switzerland, Joshi experienced farming's unprofitability firsthand and pinpointed socialist policies—keeping agricultural raw materials and grain cheap for industry and labor—as the root cause of farmers' poverty and debt since independence. He argued that governments ensure farmers 'sow different items but reap the same produce: debt,' famously stating in a 1994 Economic Times piece: 'There is no problem with agriculture... Get [the government] off our backs and farmers will be fine.' Launching Shetkari Sanghatana in 1978, Joshi mobilized farmers to demand fair market prices and educated them that their plight stemmed from bad policies, not fate or karma. Acknowledging his Swatantra Bharat Paksh as successor to Rajaji's Swatantra Party, he persisted with 'politically impossible' liberal ideas until they became 'economically inevitable.' His influence questions policy intents versus outcomes; 4000 pages of writings are being digitized. The author notes India's 25-year lag in adopting Joshi's push for farmers' economic freedom.

**Key points:**

- Socialist government policies since independence artificially suppress agricultural prices to cheapen raw materials and food for industry and labor, impoverishing farmers.
- Sharad Joshi founded Shetkari Sanghatana in 1978 to mobilize farmers for fair market prices and awareness of policy-induced poverty.
- Removing government interference from agriculture would resolve farmers' problems, as Joshi advocated.
- Joshi's Swatantra Bharat Paksh upholds the Swatantra Party legacy, preaching politically impossible liberal reforms until economically inevitable.
- 4000 pages of Joshi's Marathi and English writings are being digitized for online access.

**By Kumar Anand**

* * *

Earlier this morning, Sharad Anantrao Joshi (3 September 1935 – 12 December 2015), the founder of Shetkari Sanghatana, passed away at his home in Pune. He was 81 years old.

His early life was that of a professor and a bureaucrat, but what he came to be most famous and respected for was his popular movement for the rights of farmers. Mr. Sharad Joshi was a rare Indian liberal, who worked on the ground rather than from the comfort of an air-conditioned room.

Upon returning from Switzerland and quitting his job with the Government of India, he became a farmer. But Mr. Joshi soon noticed that it was a loss making enterprise. The question that he strived to answer before starting out as a farmer’s leader was, *“Why is it that the farmers are not able to meet even the cost of their produce and forced to live a life of poverty and indebtedness?”* His background as an economics professor and first-hand experience as a farmer came in handy to help him find the answer.

He concluded: *“This is because of socialism. In Socialism, where the government run and operate business and factories for profits, they want the raw materials coming out of agriculture to be cheap and the grain for labourers to be cheap too. This has been the policy of every government since independence.”*

This policy of government to forcibly keep the price of agriculture produce low keeps the farmer poor and indebted. He used to say that the government’s agriculture policies makes sure that while farmers all over the country sow different items, they all reap the same produce, debt.

Sharad Joshi’s answer to the travails of Indian farmers is best captured in these lines from a June 1994 piece in The Economic Times, *“There is no problem with agriculture. As I have always said, the government solves no problem. It is the problem. Get it off our backs and farmers will be fine.”*

But what could he have done to help resolve the problem?

He started Shetkari Sanghatana in 1978 as a way to mobilise farmers to demand fair market price for their produce. But his biggest contribution was to make the farmers aware that the reason of their poverty is not of their own doing or that of bad *karma* or fate, but that of the bad government policies.

Suresh Chandra Mhatre, who according to Mr Sharad Joshi is the central pillar of Shetkari Sanghatana today, says, “What Mr Joshi speaks, the country does about 25 years later.” I believe in the case of economic freedom for farmers, this long wait is not over yet. Mr Sharad Joshi’s liberal writing and thinking influenced lakhs of Indian common men and women who raised questions on government policies and questioned the difference between intent and outcome of these policies.

Mr Joshi always used to acknowledge his party Swatantra Bharat Paksh, as a successor to Rajaji’s Swatantra Party. Speaking at an even commemorating the 50th year of Swatantra Party at an event in Mumbai in 2009, Mr Joshi said, *“A sentence which was often used in the context of the old Swatantra Party and which I use quite often is what we preach is politically impossible, but will keep the flag flying till what is politically impossible becomes economically inevitable – that has been our kind of approach.”*

Rest in Peace, Mr Joshi.

* * *

PS: My first and only meeting with Mr Joshi was when I visited him in his Pune home earlier this year. He wasn’t keeping well at the time, but even then kindly agreed to meet me. He had a doctor’s appointment later in the day. Mr Joshi also agreed to do a full video interview for our [Indian Liberals](http://www.indianliberals.in) project as soon as his health improved. Sadly, that wasn’t to be.

However, Mr Joshi and Mr Mhatre were generous to share a lot of Mr Joshi’s writings though. About 4000 pages of Mr Joshi’s works in Marathi and in English are in process of being digitised and put online.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Is the Bihar Liquor Ban a Good Idea?

Original: https://www.spontaneousorder.in/p/is-the-bihar-liquor-ban-a-good-idea

Author: Spontaneous Order

Published: 2015-12-08T18:14:40.000Z

Topics: alcohol-prohibition, black-markets, government-overreach, austrian-economics

> By Madhusudan Raj After a thumping victory against Narendra Modi and his nationalist BJP party, the new CM of Bihar, Nitish Kumar, has announced to fulfil one of his many election campaign promises of banning liquor sell and consumption in Bihar beginni..

**Summary:**

Nitish Kumar's Bihar government plans to ban liquor sales and consumption from April 1, 2016, fulfilling a campaign promise to address women's complaints about male drinking causing family nuisance and harming children's education. From a classical-liberal perspective, drawing on Austrian economics like Mark Thornton's 'The Economics of Prohibition,' the author argues this ban will fail due to immutable human nature—evidenced by ancient drug use like Soma in India—and lack of moral right for government to prohibit voluntary, victimless consumption. Economically, reduced supply will raise prices, attracting mafias and bootleggers, fostering violence and crime; addicts will commit thefts to afford costlier liquor (e.g., 100 rupees doubling to 200), leaving even less for education—achieving the opposite of stated goals. Liquor quality will worsen, producing deadly hooch, as seen in Gujarat's 1960s ban and 2009 poisonings. Police will prioritize enforcement over real crimes, exacerbating insecurity. Overall, the ban transforms a health issue into a criminal one, exemplifying politicians' (BJP, JDU, Congress) uniform overreach; true choice lies in minimizing state rule.

**Key points:**

- Liquor bans fail to curb consumption due to human nature and economics, as prohibition raises prices and invites black markets.
- Higher black-market prices will force addicts to commit more crimes like theft, reducing family funds for children's education worse than before.
- Prohibition leads to deadlier hooch, causing deaths as in Gujarat's repeated incidents.
- Enforcement diverts police from real crimes, increasing overall criminality.
- Government lacks moral authority to ban voluntary, victimless acts like drinking.

**By Guest Author**

* * *

**By Madhusudan Raj**

After a thumping victory against Narendra Modi and his nationalist BJP party, the new CM of Bihar, Nitish Kumar, has announced to fulfil one of his many election campaign promises of [banning liquor sell and consumption](http://economictimes.indiatimes.com/news/politics-and-nation/bihar-chief-minister-nitish-kumar-announces-liquor-ban-from-april-1/articleshow/49933650.cms) in Bihar beginning from 1st April next year. After this imposition of ban, Bihar will be one among few of states in India, including Gujarat, my home state, were liquor is totally banned since 1960s, where liquor will be banned by the state government. In this short write-up I will analyze the economics of this liquor ban. People must know what will be the consequences of this ban. Will it become successful in achieving its stated goals?

So why Nitish wants to ban the sell and consumption of liquor in Bihar. Let’s hear the stated goals of this policy from his own mouth:

> My government is committed to fulfilling promises made to women during the election campaign. There was a surge of complaints from women about male members of the family resorting to drinking and creating nuisance, which also affected the education of their children. ([source](http://indianexpress.com/article/india/india-news-india/nitish-kumar-announces-liquor-ban-in-bihar-from-april-1/))

Will the ban achieve this end? If we see theory and history of alcohol ban around the world and in India then the answer is, a definite *No* (for those who want to know the detailed reasoning for this “no” can refer to Mark Thornton’s wonderful book, [The Economics of Prohibition](https://mises.org/system/tdf/Economics%20of%20Prohibition_2.pdf?file=1&type=document)).

Let me give a brief analysis of why this prohibition of alcohol sell and consumption in Bihar will fail in achieving its stated goals. First of all, let us remind ourselves that since the beginning the modern man (Homo Sapiens) has resorted to some kind of use of addictive drugs/drinks for religious or spiritual experiences or for simple recreational purposes (for evidence see [here](http://www.ancient-origins.net/news-history-archaeology/archaeological-study-explores-drug-taking-prehistory-020210)). In India itself the ancient Rishi-Munis and other people were known to consume Soma Ras, which was kind of hallucinating drink (see [here](https://en.wikipedia.org/wiki/Soma)). This history tells us that consuming such drinks is very natural for human beings, and something that is natural to humans is impossible to remove by such governmental bans. The ancient habits are not going to die quickly or die at all. Government trying to impose its will – or other peoples’ will – on others will always fail because of basic human nature. Such bans have never worked in history, and will not work in future too. Actually the issue here is of moral character. Government – or other people who are hiring the government agents to impose their will on others – have no moral right of stopping people from voluntarily consuming whatever they want to. It is none of government’s business to interfere in peoples’ lives as long as they are not physically harming others.

Apart from this problem of the ban going against basic human nature, other consequences will follow this ban. A basic knowledge of the laws and demand supply will make this point clear.

First, in the aftermath of this ban, the supply of liquor will become less which will increase its price at a given demand. This higher price will make the liquor industry more profitable, which will now attract illegal sellers i.e., bootleggers, liquor barons, mafias etc., into this market because selling prohibited liquor illegally is a very risky business and a crime which can only be carried out by such criminal people. Entry of such mafias will make this once peaceful market into a violent one! Crime will increase. More people will go to jail for a victimless criminal act of consuming liquor. People who are addicted to liquor, which includes everyone who is consuming it in present and many future addicts, will have to now find new sources of income to buy high price costly liquor now, and for that they will resort to petty crimes like theft, robbery etc. If males where creating nuisance in home before this ban, they will create more nuisance after the ban to get more money for consuming liquor. If they were spending 100 rupees on liquor before the ban, now they will have to spend 200 for the same! This means less money will be now left over for their children’s education compared to before the ban scenario!!! Not surprisingly, the government policy will, once again, achieve the exact opposite goal compared to its stated goal.

Second, the quality of liquor will also deteriorate once the ban will be imposed. Alcohol prohibition will make the liquor more potent. Because liquor is banned, those who will sell liquor in the underground market will produce low quality liquor e.g., hooch. Many people will die consuming this hooch like we have witnessed time and again in Gujarat where liquor is banned since 1960s (for example see [here](https://en.wikipedia.org/wiki/2009_Gujarat_alcohol_poisonings)).

Third, police force will now be busy in imposing this ban leaving aside the important work of apprehending real criminals. This means, those real criminals will have a free play now, which in turn will increase other types of serious crimes in Bihar.

All these means, what is mainly a health issue right now will become a criminal and bigger social issue because of this ban. The Bihar government, instead of making lives better of its people, will make their lives even worse. What more can you expect from the government?

By the way, this proposed ban is just yet another addition in so many bans that Modi’s BJP government has already imposed on innocent people of this country (see the growing list [here](http://www.dailyo.in/politics/bjp-indias-daughter-nirbhaya-rape-beef-ban-uber-greenpeace-fifty-shades-of-grey/story/1/2419.html)). This new inclusion in this list is coming from Nitish Kumar, whom many are seeing as a new PM of India! This only shows that all these politicians are one and the same. BJP or JDU or Congress, it just doesn’t make any difference to the lives of people of India. As I am saying since long, all these political parties don’t represent true choice in front of people. True choice is between having a state ruling over us or not! As long as people are trapped in the false choice of voting for the lesser evil, situation is not going to change for better.

*Madhusudan Raj is an Assistant Professor of Economics, and teaches Austrian Economics at the Department of Human Resource Development, Veer Narmad South Gujarat University, Surat, India. He is an alumnus of the Mises University, Ludwig von Mises Institute, Auburn, Alabama, U.S.A., and holds a bachelor’s, master’s, M.Phil., and Ph.D. degree in Economics from the South Gujarat University. This piece has been republished from [his personal blog.](http://mypraxeology.blogspot.in/)*

* * *

**About Guest Author**

## #ThrowbackThursday: Philip Spratt — Should a Political Party have an Ideology? (1952)

Original: https://www.spontaneousorder.in/p/spratt-ideology

Author: Spontaneous Order

Published: 2015-12-03T15:41:37.000Z

Topics: political-ideology, liberalism, indian-politics, gandhism

> Philip Spratt (1902-1971) was an intellectual and writer. In 1926, he arrived in India from Britain at the age of 24 to spread Communism and was one of the architects and founding-members of the Communist Party of India. Subsequently, he renounced comm...

**Summary:**

Philip Spratt argues that political parties must have ideologies, defined as an aim and method to achieve it, comprising ethical ideals, appeals to self-interest (often disguised in theory), and outdated economic/political theories. He critiques Liberalism's valid ethical vision of free, equal individuals enabling ordered freedom via democracy, but notes its economic dogma (property rights, free trade) as a self-interested appeal that led to its decline. Marxism shares a similar ideal of equality and cooperation free from poverty and narrowness, but its class struggle theory, appealing to workers and intellectuals' self-interest, is outdated post-WWI. Gandhism's ideal emphasizes equality, decentralization, rural self-sufficiency, and non-violence, but collapsed after independence due to its tie to national freedom and idiosyncratic elements. For India, newly independent and drawn to high ideals, parties should prioritize abstract ethical aims over theory, promising progress through hard work, honest administration, and truth, rather than 'practical politics' angling for group interests, which risks disaster. This approach is morally and intellectually superior, though its electoral appeal requires testing.

**Key points:**

- Political ideologies consist of valid ethical ideals, disguised self-interest appeals in theories that become outdated, and methods like democracy or non-violence.
- Liberalism's ethical core endures, but its economic theory doomed parties; Marxism's theory similarly failed while its ideal persists.
- Gandhism declined post-independence due to its nationalistic tie and quirks, not lack of self-interest appeal.
- Indian parties should emphasize worthy ideals and honesty over theory or opportunistic politics to elevate discourse.
- Prioritizing ideals over theory is logically sounder and morally higher, testable via practice.

**By Ujwal Batra**

* * *

*Philip Spratt (1902-1971) was an intellectual and writer.  In 1926, he arrived in India from Britain at the age of 24 to spread Communism and was one of the architects and founding-members of the Communist Party of India. Subsequently, he renounced communism and moved towards liberalism, and was one of the lone voices against the leftist tendencies that became prevalent after independence. A frequent contributor to ‘Freedom First’, he was associated with C Rajagopalachari and served as an editor for Swarajya. In this piece published in the December 1952 issue of Freedom First, Spratt talks of what he perceives to be the merits and failings of major political ideologies–Liberalism, Marxism and Gandhism. The piece is representative of his thinking at that time, before he had fully embraced Liberalism.*

[

![Philip Spratt (1902-1971)](https://substackcdn.com/image/fetch/$s_!lK80!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fda94082d-9cd6-4381-b2a9-309ff45b05b1_220x300.jpeg "Philip Spratt (1902-1971)")



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Philip Spratt (1902-1971)

Should a political party have an ideology? Of course. What sort of ideology should it be? That is the question.

Political bodies can be arranged in a series according to the significance of their ideology. At one end stand the parties in the fullest sense, the organised expressions of great historical movements; at the other merely *ad hoc* associations, coalitions or blocs. The most temporary bloc has at least one point of common policy, but unless its constituent parties agree on more than the immediate purpose, people are apt to denounce it as “unholy”-unprincipled-and its working is apt to be uneasy. Any more permanent organisation is inevitably more united than such a bloc, and to that extent it has an ideology.

A party which aspires to rule a country must have something which can be called an aim in view, even if it is only to keep things as they are; and it must have some idea how it hopes to get there, or stay there. An ideology is nothing else but an aim and a method of getting to it; the rest is frills, quite likely unnecessary, and often dangerous.

Consider some well-known ideologies. The Liberal theory proclaimed a vision-of men, free and equal, going about unrestrained by States, sufficiently rational to see that the interest of all in the maintenance of ordered freedom is the interest of each individually, and sufficiently self-controlled and benevolent to behave accordingly. The aim is abstract enough to be called ethical rather than political. The liberal political method, democracy, change by agreement, etc. follow from these generalities.

Liberalism also had a specifically economic element: that concerning the rights of property, free trade, and so forth. The liberal economic policy purported to follow logically from a universally valid theory, and this theory was the most interesting intellectual and “ideological” part of liberalism; but we all know now that it was hardly more than a disguised appeal to self-interest. In the early days both the ethical and the economic, the altruistic and the selfish, elements were needed to inspire a movement with real drive. But the economic policy proved inappropriate, soon in some countries, eventually in all. Their obstinacy in clinging to their economic dogma doomed the liberal parties to extinction, but the ethical vision of liberalism retains its validity

Consider Marxism. It also proclaims an ideal vision, of men equal, freed from economic subservience, from poverty and from national narrowness and religious obscurantism, freely cooperating in economic and cultural construction. It also has an economic political or sociological theory, all about the concentration of capital, crises, class struggle, etc., so delightful to the ideologist that he entirely forgets the ideal. Marxism frankly avowed that the attraction of the ideal was not enough to inspire a strong party, and appealed to the self-interest of labour, but we now know that no less important was the disguised appeal to the self-interest of the intellectuals contained in that fascinating theory.

Of Marxism it is also true that its ideal or ethical element largely retains its validity, and indeed is not so very different from the liberal ideal; while the sociological element has become out of date. Communists would deny this, but it is quite clear to the outsider that their movement is not now guided by Lenin’s classical formulation of revolutionary Marxism. Social-Democrats would also deny it, but at least it was strongly borne in upon me when I read Sternberg’s *Capitalism and Socialism on Trial* recently that the Social-Democratic version of Marxism has failed to grapple theoretically with events since about the first world war.

Gandhism similarly puts forward an ideal, in which the main features are equality, free cooperation, local self-sufficiency, decentralisation, a rural, anti-industrial bias, demand limited by self-restraint, and a strong religious inspiration. Its political element, the method of truth and non-violence, is less theoretical than in Marxism, and is related to the ideal in the same sort of way as political democracy is related to the ideal of liberalism. Where liberalism and Marxism appealed to self-interest, Gandhism appealed to the sentiment in favour of national freedom, and proved to be so closely bound up with this, that on its attainment the Gandhian movement quickly declined almost to insignificance. But again the ideal element in both object and method retains its appeal.

In these instances of great movements the principle is perhaps unusually clear, but probably the ideas of any party can be analysed in the same way into ideals, including ideally valid methods; appeals, open or disguised, to self-interest; and economic, political or sociological theory, which guides political practice, but is controversial and gets out of date, and contains hidden appeals to sectional interests.

From the party point of view the most important function of theory in ideology is this function-of disguising appeals to self-interest, and thus maintaining the appearance of consistency in what the party says. In liberalism this is perfectly clear, though of course the pure theory of capital has independent interest. In Marxism the open appeal to the self-interest of the workers was always felt to be a blot, and many Marxists apologised for it, inconsistently, by referring to the liberal principle of majority rule and postulating that the workers were a majority. The accusation that the Marxian theory is a disguised appeal to the self-interest of the intellectuals (first advanced 50 years ago by Machajski) has always been felt to be an intolerable insult and if true a final refutation.  
There is another popular method of acquiring appeal. That is to go in for what is called practical politics: to forget or neglect theory, and to angle for the support not of one big group but of many small groups one after another. In countries where democratic politics is a familiar institution and people are bored with it, this works very well, though it is apt to produce disasters like Coolidge and Neville Chamberlain.The Congress party is tending towards a policy of this kind, but the Indian public are not yet sufficiently bored, and one wonders uneasily what sort of disaster it will lead to here.

National temperaments differ considerably. All Englishmen, Gladstone said, hate two things: the Pope and a general proposition. Most Continentals have what Englishmen regard as an inordinate respect for general propositions. Aside from temperament, countries which have long enjoyed stability will tend to take abstract principles for granted.

India, newly starting a free political existence, needs to make her abstract principles explicit. If I can judge her people’s temperament, I should say that her educated class are more interested in theory than Englishmen, but less intoxicated by it than Germans or Russians, while the uneducated are of course indifferent to it. All, however, educated and uneducated, are strongly attracted by high ideals, and still more by men who live up to them. (But it is not unfair to say that they are not much worried by a political practice which departs widely from the ideal )

It follows, if this is true, that an Indian political party which wants to get anywhere must stress the abstract, ethical or utopian element in its ideology. (and if it can get an authentic saint for a leader, its fortune is made ). It should give second place to theory, political, economic or sociological, but it should take care that any theory it does profess is not too difficult to reconcile with its professed ideals. Will it not then fail of popular appeal Has not Gandhism collapsed for lack of open or covert appeal to self-interest?

It is not certain. It may be that Gandhism has collapsed since Independence rather because its ideal is not wholly acceptable. The way for an Indian party may be to proclaim an ideal which is worthy, and yet is free from elements which are merely idiosyncratic and out of date, and for the rest to stand not on theory but on truth: the truth that progress towards any ideal must be slow, and must involve hard work, hard thinking, and honest administration; and to promise that effort and honesty ( relying upon the Indian public’s merciful indulgence towards normal lapses from the ideal) would be rewarded.

The stress on theory in political ideologies is dubious both morally and intellectually. Priority for the ideal aim is logically sounder, and would raise Indian politics to a higher moral level. Whether it could appeal to the electorate can only be found out by trying it.

*To access the complete piece, click [here.](http://freedomfirst.in/uploads/issues/pdf/7.pdf) Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Ujwal Batra**

## #ThrowbackThursday: C Rajagopalachari — The Keystone of the Constitution (1971)

Original: https://www.spontaneousorder.in/p/rajaji-constitution

Author: Spontaneous Order

Published: 2015-11-26T17:07:02.000Z

Topics: indian-constitution, fundamental-rights, property-rights, swatantra-party

> Today is Constitution Day– the Indian Constitution was adopted by the Constituent Assembly 66 years back on this day in 1949; which later came into force on January 26, 1950. We thought it befitting to post an article by C Rajagopalachari on the Constit

**Summary:**

C. Rajagopalachari declares Part III's Fundamental Rights the 'keystone' of India's Constitution, adopted on November 26, 1949, which embodies the Preamble's commitments to justice, liberty, equality, and individual dignity. He condemns the Indira Gandhi-led Congress's 24th and 25th amendments as an 'outrage' that dismantles this keystone by subordinating rights—especially property acquisition, holding, and disposal under Articles 19(1)(f) and (g)—to non-justiciable Directive Principles in Part IV. These changes permit state acquisition without just compensation, amounting to 'sheer robbery' and reducing citizens to 'serfs,' contrary to classical-liberal freedoms of speech, profession, trade, and business. Rajaji notes the Swatantra Party alone defends the Constitution, unlike the splintered Congress (O) or Indira Congress, despite electoral losses to a gullible electorate. He cites N.A. Palkhivala's October 16, 1971, Madras speech and V.P. Santhanam's August 7 Swarajya article as authoritative critiques. Invoking Psalm 118:22, Rajaji portrays Swatantra as the biblical 'rejected stone' now the 'headstone of the corner,' essential to preventing constitutional collapse.

**Key points:**

- Part III Fundamental Rights form the indispensable keystone holding the Constitution together.
- The 24th and 25th amendments enable property acquisition without just compensation, violating Articles 19(1)(f) and (g).
- Part IV Directive Principles are non-justiciable and cannot override Fundamental Rights.
- Swatantra Party uniquely upholds constitutional principles of individual liberty and property against socialist amendments.
- Upholding property rights prevents citizens from becoming serfs dependent on state mercy.

**By Ujwal Batra**

* * *

*Today is Constitution Day– the Indian Constitution was adopted by the Constituent Assembly 66 years back on this day in 1949; which later came into force on January 26, 1950. We thought it befitting to post an article by C Rajagopalachari on the Constitution, written in 1971.*

[

![Rajaji](https://substackcdn.com/image/fetch/$s_!ilr5!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F0d77ff7b-d94b-4563-882f-2e7329e533e3_275x183.jpeg "Rajaji")



](https://spontaneousorder.in/wp-content/uploads/2015/11/Rajaji.jpg)

On the 26th Day of November 1949, “the people of India, having solemnly resolved to constitute India into a Sovereign Democratic Republic and to secure to all its citizens, social, economic and political justice, liberty of thought, expression, belief, faith and worship, equality of status and of opportunity, and to promote among them all fraternity, securing the dignity of the individual and the unity of the nation adopted, enacted and gave to themselves the Constitution of India.”

This great preamble to our Constitution is a shining monument of the wisdom, courage, foresight and sense of justice of the founders of our freedom. It should be read over and over again with concentration of mind and precision of understanding, when anyone is asked or intends himself to do anything to the Constitution. Every word in the preamble is important.

The keystone of this great Constitution, which the people of India through the Constituent Assembly gave to themselves is Part III thereof which guarantees the rights of citizens and to which the Constitution itself has given the name and title of Fundamental Rights. This Part of the Constitution locks the whole together as the keystone as the summit of an arch holds the arch together.

The Indira Congress has secured the support of Parliament for amendments which will destroy what I have called the keystone of the constitutional arch. The Congress (0), which refuses to accept Smt. Indira Gandhi’s leadership, has, however, resolved to join in the game of destruction initiated by Smt. Indira Gandhi. It is a strange development that out of all the political parties in India, the Swatantra Party has to bear the burden of defending the Constitution of India, all alone.

Mr. Palkhivala gave a magnificent address in Madras on 16th October to a record audience assembled in Bertram Hall of Loyola College under the auspices of the Servants of India Society. The audience overflowed into the verandahs and grounds of the college. Mr. Palkhivala fully dealt with what he called the outrage on the Constitution planned under the 24th and 25th amendments. Mr. Santhanam has dealt with the subject in an exhaustive manner in his article in Swarajya of August 7. The founders of the Constitution intended the fundamental rights inscribed in Part III to be the heart of the Constitution. The physician or surgeon may do some repairs to the heart. But he may not remove the heart and hope to keep the man alive. Part IV of the Constitution lays down objectives which the Constitution of India wants the Central and the State Governments to endeavour to achieve. Any violation of Part 111 is justiciable. But non-endeavour in the directions laid down in Part IV of the Constitution is not justiciable. Neither can the citizen seek to obtain an order from the judiciary to compel the Government to take action as directed in Part IV, nor does Part IV authorize the abrogation by the State of the rights inscribed in Part III.

The Swatantra Party does not, like other parties including the Congress (0) and the Indira Congress, promise to give to the people castles which they see in the clouds. The Swatantra Party sticks to the principles stated in the preamble of the Constitution which I have quoted and in particular to the principle of maintaining the dignity of the individual along with unity of the nation. The Swatantra Party maintains unalterable loyalty to the assurance given in the Constitution not only to freedom of speech and expression but to the right of the citizens, to acquire, hold and dispose of property, and to practise any profession or to carry any occupation, trade, or business, as clearly stated in Article 19(f) and (g).

With an electorate more than half of whom are illinformed and consequently very gullible, the Swatantra Party failed to secure in the recent elections any significant number of seats either in State legdatures or in Parliament. The Swatantra Party was thus in the position of the stone which was rejected by the builders in the *Psalmist’s Hymn (Ps. 118-22).* Today, however, this stone that was rejected has become the ‘headstone of the corner.’ The Psalmist sang and Jesus quoted the hymn in the temple of Jerusalem *(Mark 12, 10 and 11):* *“Have you not heard this scripture, the stone which the builders rejected is become the head of the comer; this was the Lord’s doing and it is marvellous in our eyes?”* Let us hope and pray that this stone which has become the head-stone of the corner will keep the temple of our Constitution from going to pieces.

If the property of any individual is wanted for public purposes, the Constitution as it stands gives the state the right to acquire such property after justifying such acquisition, but recognizing that the whole nation should bear the cost of such acquisition, lays down that just compensation should be paid by the State to the person who is deprived of the property. It would be totally unjust and contrary to the preamble of the Constitution and amount to sheer robbery to deprive an individual of what he has acquired or inherited without making the nation pay just compensation to him. A free way of life would be an impossibility if this fundamental right to acquire, hold and dispose of property, as clearly laid down in Article 19 (f) and (g), be nullified. Citizens would then be only serfs dependent on the mercy of those in authority.

*To access the complete piece, click [here.](http://indianliberals.in/uploads/periodicals/PDF_269_qohdkgSixth%20National%20Convention%20Rajaji%20Nagar%20-%20Swatantra%20party.pdf) Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

October 30, 1971

* * *

**About Ujwal Batra**

## We’re Halfway There

Original: https://www.spontaneousorder.in/p/halfway-there

Author: Spontaneous Order

Published: 2015-11-16T12:23:24.000Z

Topics: human-freedom-index, economic-freedom, personal-freedoms, institutions

> Cato Institute recently published the Human Freedom Index; which measures the extent of freedom in different countries and ranks them. 152 countries form a part of the index; and we rank in at 75—nearly halfway through. The index measures the extent of

**Summary:**

The Cato Institute's Human Freedom Index ranks India 75th out of 152 countries, placing it nearly halfway in overall freedom, based on 2012 data across 76 factors grouped into categories like Rule of Law, Security and Safety, Movement, Religion, Association and Civil Society, Expression, Relationships, Size of Government, Legal System and Property Rights, Access to Sound Money, Freedom to Trade Internationally, and Regulation of Credit, Labor, and Business. This comprehensive index uniquely combines economic freedoms (e.g., sound money, regulations) with personal liberties (e.g., expression, movement), unlike narrower measures from Heritage or Fraser Institute. Hong Kong ranks first despite not being a democracy, while others include Germany (12th), USA (20th), Singapore (43rd), South Africa (70th), Russia (111th), China (132nd), Pakistan (140th), Venezuela (144th), and Iran (152nd). The index reveals a strong positive link between human freedom and income, with freer countries boasting significantly higher average incomes. From a classical-liberal viewpoint, institutions are crucial as they define rights, incentives, and the 'rules of the game' for securing both freedom and prosperity. The author highlights needs to bolster economic freedoms and protect religious and personal liberties amid growing concerns.

**Key points:**

- India ranks 75th out of 152 countries in the Cato Institute's Human Freedom Index using 2012 data across 76 factors spanning economic and personal freedoms.
- Freer countries exhibit substantially higher average incomes, underscoring freedom's role in prosperity.
- Institutions underpin freedom by setting incentives, rights, and rules essential for economic and personal liberties.
- Economic freedoms require significant improvement in India, alongside protections for religious and personal freedoms.

**By Ujwal Batra**

* * *

Cato Institute recently published the Human Freedom Index; which measures the extent of freedom in different countries and ranks them. 152 countries form a part of the index; and we rank in at 75—nearly halfway through.

The index measures the extent of freedom on the basis of a number of institutions. Some of these factors are purely economic (sound money, extent of regulations etc); while others concern personal liberties. (freedom to move, freedom of expression, civil society etc.) Indeed, many factors would have a bearing on our economic and personal freedoms; such as rule of law, size of government and legal systems and property rights.

There are a number of indices ([Heritage’s ‘Index of Economic Freedom](http://www.heritage.org/index/)’, Fraser Institute’s [’Economic Freedom of the world’](http://www.freetheworld.com/)) that measure economic freedom and compellingly demonstrate its importance in securing prosperity. This particular index goes beyond mere economic factors; taking into consideration social factors as well—producing a comprehensive index of freedom. I know of no other index or measure which does a similar analysis.

The study, though published this year; uses data from 2012–the most recent year for which sufficient data is available. The data takes into consideration 76 factors; grouped in the following broad categories—

-   Rule of Law
    
-   Security and Safety
    
-   Movement
    
-   Religion
    
-   Association, Assembly, and Civil Society
    
-   Expression
    
-   Relationships
    
-   Size of Government
    
-   Legal System and Property Rights
    
-   Access to Sound Money
    
-   Freedom to Trade Internationally
    
-   Regulation of Credit, Labor, and Business
    

Hong Kong ranks number one. While the index shows a relationship between human freedom and democracy; Hong Kong is an exception and an outlier. Curiously, while it enjoys a high degree of both economic and personal freedom; it is not a democracy.

Other major countries rank as follows; USA (20), Germany (12), Singapore (43), South Africa (70), India (75), Russia (111), China (132) Venezuela (144), Pakistan (140) and Iran (152).

Not surprisingly; there is a direct link between the degree of freedom and income. The average person’s income in a free country is significantly higher than the countries that are less free; as is evident in this figure.

[

![GDP Freedom](https://spontaneousorder.in/wp-content/uploads/2015/11/GDP-Freedom-450x370.png "GDP Freedom")



](https://spontaneousorder.in/wp-content/uploads/2015/11/GDP-Freedom.png)

It is clear from this study that institutions play a vital role in securing freedom and prosperity. Indeed there is no way to understand freedom and prosperity without examining the institutions that underlie it—institutions that determine incentives, define rights and determine (to borrow a phrase from Douglas North); the ‘rules of the game.’

The complete study can be accessed [here.](http://www.cato.org/human-freedom-index)

In what areas do you think we lack freedom? While there is clearly a lot of work to be done in securing economic freedom; there are increasing concerns that our religious and personal freedoms are being undermined.

What do you think? Where do we lack in freedom? How can be strengthen the institutions that secure freedom?

* * *

**About Ujwal Batra**

## We Need Strict Rule Of Law, Not A Diet Plan

Original: https://www.spontaneousorder.in/p/beef-rule-law

Author: Spontaneous Order

Published: 2015-11-06T18:27:17.000Z

Topics: beef-ban, secularism, rule-of-law, personal-freedom

> My morning started with a number of events, topping the list being comments on the beef ban from Baba Ramdev, Haryana Chief Minister Manohar Lal Khattar and Minority Affairs Minister MA Naqvi. Before I put forth my points and before I am sent to Pakista..

**Summary:**

Sadaf Hussain criticizes statements by Baba Ramdev, Haryana CM Manohar Lal Khattar, and Minority Affairs Minister MA Naqvi urging Muslims to forgo beef to spare Hindu sentiments, advocating instead for personal choice in diet regardless of religion or vegetarianism. He questions selective protection of religious emotions—why not ban pork for Muslims, alcohol for some, or meat for Jains and animal lovers?—and argues true secularism, as per India's Constitution, means neutrality with no preferential treatment for any group, including minorities or majorities. Hussain highlights market self-regulation, like restaurants altering menus during Navratri or Ramadan without government mandates such as Maharashtra's meat ban, as more effective than state intervention. He notes opposition to beef bans from Hindus like Swaminathan Aiyar, Karnataka CM K Siddaramaiah, and Justice Markandey Katju, emphasizing cultural evolution (e.g., abolition of sati) over regressive impositions. Ultimately, Hussain calls for strict rule of law and tolerance for individuals irrespective of identity, enabling security, innovation, peaceful association, and focus on poverty over communal fights, rather than identity politics.

**Key points:**

- Governments should not impose beef bans to protect religious sentiments, as markets and personal compassion already adjust offerings during festivals like Navratri and Ramadan.
- True secularism requires no preferential treatment for any religious group, upholding India's constitutional neutrality.
- Strict rule of law fosters individual security, innovation, and national progress by prioritizing tolerance over identity-based divisions.
- Personal dietary choices must be respected without coercion, allowing cultural evolution beyond outdated practices.

**By Sadaf Hussain**

* * *

My morning started with a number of events, topping the list being comments on the beef ban from Baba Ramdev, Haryana Chief Minister Manohar Lal Khattar and Minority Affairs Minister MA Naqvi.

Before I put forth my points and before I am sent to Pakistan for being a beef-eating Muslim, I must clarify that I am in no way supporting eating either animals or vegetables. I believe in personal choice, and whatever decision you make is the best for you. I am concerned only with the perspective being taken on these issues.

[Baba Ramdev](https://www.youtube.com/watch?v=feNC9-v-PQA), [Mr Khattar](http://indianexpress.com/article/india/india-news-india/muslims-can-live-in-this-country-but-they-will-have-to-give-up-eating-beef-says-haryana-cm-manohar-lal-khattar/) and [MA Naqvi](https://www.youtube.com/watch?v=1VeKFLxOBio) have said variations of the same thing: “Muslims” should give up eating beef because it hurts the emotion of Hindus or they should go to countries where there is no such cultural taboo.

Here I want to ask not just them, but everyone who believes it hurts “Hindu” emotions, what about non-Hindus? Should we all give up doing everything that might unintentionally hurt the emotions of others? What about the clothes we wear, or the cars we drive or the music we listen to? I am sure some of these things must be “hurting” people’s feelings in some way, yet we are not up in arms about them. As Opposition leader Omar Abdullah, who recently led a walkout following the thrashing of as MLA for holding a beef party, [asked afterwards:](http://www.timesnow.tv/BJP-legislators-thrash-MLA-Rashid-who-hosted-beef-party/articleshow/4481539.cms) “Do I assault everyone who eats pork or alcohol?”

As per the Constitution of India, we are declared a secular country — a country that is neutral to all religious groups. But we must ask ourselves: are we really secular? Is giving privileges to one community over another secularism? I am not talking about preferential treatment to Hindus, but also minority privileges.

Recently, at a policy workshop I conducted, someone said being secular doesn’t mean giving preferential treatment to all religions, it means giving no preferential treatment to anyone. There is nothing secular about things such as banning alcohol because it might hurt the sentiments of Muslims, or beef because it hurts Hindu sentiments, or non-vegetarian food because of a Jain festival, or converting non-Hindus (ghar wapsi). Also, why are we only concerned with religious sentiments? If we have to ban beef to protect Hindu sentiments, then why not ban eating meat, because it hurts the sentiments of vegetarians and animal lovers who might be atheist, but are offended by the slaughter?

Besides, do we need the government to step in to protect religious sentiments? A lot of restaurants change their menus during festive seasons, especially the Navratras. They offer special thalis for customers that are suited to the festive menu and discontinue items for which there is less demand. Just this week, I tried to buy a chicken puff from a tiny bakery in R K Puram Market, but the shopkeeper said they did not have any since it was Navratri time. When I was in Ranchi last year during Ramadan, I saw a similar situation, where a small restaurant owner had put a curtain covering on the entrance so that Muslims who were fasting weren’t tantalized by the food. The demand or lack of demand for a particular kind of food already regulates what is being served — the market, and people’s own compassion, is catering to these subtleties. There is no need for the government to mandate that certain food items not be sold [as they did in Maharashtra.](http://indianexpress.com/article/india/india-others/sunday-story-meat-ban-2/)

I have heard leaders talk about how Hindus worship the cow, and it is a part of their religious practices. So are we then saying people like [Swaminathan Aiyar](http://blogs.timesofindia.indiatimes.com/Swaminomics/a-beef-eating-hindu-demands-his-rights/), Karnataka CM [K Siddaramaiah](http://www.firstpost.com/india/karnataka-cm-k-siddaramaiah-protests-beef-ban-invokes-dadri-kerala-house-2489086.html) or (retd) Justice [Markandey Katju](http://timesofindia.indiatimes.com/india/I-eat-beef-and-dont-consider-cow-as-mother-Justice-Markandey-Katju-says/articleshow/49207645.cms) who are against the beef ban are less Hindu than the self-proclaimed “devoted” Hindus? I believe in sentiments about cows because it is mentioned in the holy books, including the *Vedas*, but then why we must stop there? What about animals such as the mouse, snake, horse, lion, tiger, elephant and many others associated with gods? Why are they not considered holy? Culture evolves, people evolve. Things which were legal a long time ago are illegal now. Sati is not practiced anymore. Should we keep pushing ourselves back to the past or go ahead in the future?

Our PM used to call the ex-Prime Minister “[Maun Mohan Singh](http://www.ndtv.com/india-news/narendra-modi-mocks-pm-with-maunmohan-singh-503033)“, yet he now remains silent on these issues. The [most substantial thing he has said is,](http://www.firstpost.com/politics/pm-modi-breaks-silence-on-dadri-lynching-says-hindus-and-muslims-should-fight-poverty-together-2461040.html) “We should decide if Hindus want to fight Muslims or poverty. Muslims must decide if they want to fight Hindus or poverty. Hindus and Muslims must unite to fight poverty and defeat it.” This makes sense. But it is not a magic wand that will correct everything. Unless and until you have a strict rule of law and tolerance and patience for every individual (irrespective of their religion, or any other identity), no matter how many steps you take toward development, you will always find yourself taking twice the number of steps back.

Strict rule of law helps people function in a framework where they feel secure and are sure of their rights and entitlements, allowing them to focus on secondary needs and be innovative and at their fullest potential. They are free to engage in a peaceful association with their fellow countrymen, without the looming shadow of differences in religion, caste, or gender. Let us then focus our attention to developing this framework, move away from trying to please every minority group and focus on helping the individual. Let the rest take care of itself.

*The article was originally published in [Huffington Post](http://www.huffingtonpost.in/sadaf-hussain/from-chai-pe-charcha-to-g_1_b_8429308.html)*

* * *

**About Sadaf Hussain**

## #ThrowbackThursday: M R Masani — In a Free Economy, the Consumer is King (1965)

Original: https://www.spontaneousorder.in/p/masani-consumer

Author: Spontaneous Order

Published: 2015-10-22T17:59:26.000Z

Topics: free-economy, state-monopoly, consumer-sovereignty, economic-freedom

> The following text is an excerpt from a speech delivered by M R Masani in 1965. M R Masani was one of the most prominent Indian liberals–he was a part of the Constituent Assembly that drafted the constitution; and was closely associated with the Swatant

**Summary:**

M R Masani, a prominent Indian liberal and Swatantra Party associate, critiques the assumption that India can maintain democratic government alongside state monopoly over industry, trade, and agriculture. He examines its impacts on key groups: workers would lose rights to choose jobs, withhold labor, bargain collectively, or strike, as the state as sole employer would not tolerate disruptions to the national plan. Peasants in collective or co-operative farms could not withdraw and reclaim their land. Small investors would be restricted to 'voluntary' state bonds, illustrated by a grim Czechoslovakian anecdote. Consumers, deemed 'king' in a free economy, would face a single state seller dictating goods, quality, and prices with no alternatives, forcing purchase or perish. In contrast, the free market's supply-demand law and balance-sheet discipline empower consumers to vote via purchases, directing entrepreneurs on what to produce. Masani argues this market mechanism preserves individual freedoms essential to democracy, warning that state monopoly erodes them across society.

**Key points:**

- State monopoly eliminates workers' rights to job choice, strikes, and collective bargaining as the sole employer enforces compliance.
- Peasants in collective farms cannot exit and reclaim their original land plots.
- Investors face forced subscriptions to state bonds with no real choice.
- Consumers lose sovereignty under state monopoly, facing fixed goods and prices without alternatives, unlike free markets where purchases guide production.

**By Guest Author**

* * *

*The following text is an excerpt [from a speech](http://indianliberals.in/uploads/periodicals/PDF_209_i57cq3Economics%20of%20Freedom.pdf) delivered by M R Masani in 1965. M R Masani was one of the most prominent Indian liberals–he was a part of the Constituent Assembly that drafted the constitution; and was closely associated with the Swatantra Party.* 

Let us now examine the widespread assumption that we in this country can sustain democratic government alongside of a State monopoly of economic ownership of industry, trade and agriculture.

First let us consider the effects of such a situation on the lives of the worker, the peasant, the investor and the consumer and the man in charge of industrial production. Today, the worker has a right to choose and change his job within the limits of his training and capacity. He can withhold or deny his labour, participate in collective bargaining and, if need be, strike work together with his comrades. If he should lose his job or the strike should fail; he finds other enterprises ready to employ him. In society where the State is the only employer and every citizen willy-nilly a State employee, to what extent will these precious rights be preserved? Is there any reason to believe that, when there is only one employing authority in the country, it will permit an employee throw up his job in an economic activity where he is performing a necessary function and allow him to shift at will to some other occupation? Is it likely that a State, exercising a monopoly of production and distribution, will permit its employees to go on strike and thus upset the National Plan?

Or let us take the peasant. Once he is a member of a collective farm or, for the matter of that, of a co-operative farm–the terminology will not make very much difference–is it to be expected that when he finds that the co-operative farm does not suit him and he wishes to withdraw from it, the original plot of land which he was persuaded to surrender will be restored to him and he will be allowed to go his own way?

As for the small investor who survives, his freedom of choice will, be restricted to one of two or more issues of a so-called ‘voluntary’ State Bond to which he will be forced to subscribe. His plight may best be imagined from the report that has just come out from Czechoslovakia, about the finding of’ an unidentified corpse. The police report said: “Aside from two Government Bonds, no other signs of violence were discovered on the body.”

In a free economy, it has rightly been said, the consumer is king. The consumer who today is, within the limits of his income, able to exercise a wide freedom of choice about how much he shall spend, on what he shall spend, and how much he shall save will then be faced with one universal seller from whom he must obtain all his wants. The range of goods offered to him will be decided and the price fixed by the State trading monopoly. If the quality or the price do not appeal to him, there will be no other brand of goods to turn to. To meet his basic needs, he must purchase or perish.

Today, thanks to the law of the market–the law of supply and demand–and the discipline of the balance-sheet, it is the consumer who decides for the entrepreneur ‘whether’ to produce and ‘what’ to produce. When a man buys something on the free market, he is casting his vote as a citizen of the national economy. He exercises a free choice which, by affecting the price, influences a decision as to how the economy shall be directed.

*To access the complete piece, click [here.](http://indianliberals.in/uploads/periodicals/PDF_209_i57cq3Economics%20of%20Freedom.pdf)  Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Guest Author**

## What Ails Our Higher Education?

Original: https://www.spontaneousorder.in/p/ails-high-edu

Author: Spontaneous Order

Published: 2015-10-19T12:35:33.000Z

Topics: higher-education, education-reform, regulatory-reform, online-learning

> I recently completed my graduation from a state funded engineering college. In the past couple months since I’ve started working; I’ve come to get some sense of how inadequate my training in college really was. (a sentiment, I am sure, shared by many

**Summary:**

Ayush Agarwal, a recent engineering graduate, critiques India's higher education system for failing to equip students with relevant skills, citing personal experiences of outdated curricula, rote learning, and demotivated students in state-funded colleges—a common issue among many undergraduates. A professor acknowledged the problems but blamed bureaucratic hurdles involving deans, directors, and councils, while noting student apathy. Agarwal attributes these maladies to excessive government regulations in academic, administrative, and financial areas, which multiply stakeholders at the expense of students, restrict foreign universities, and hinder domestic private competition. This creates a knowledge gap between graduates and industry needs. In a classical-liberal vein, he advocates transforming universities into hubs of knowledge generation through freedom for originality, creativity, and intellectual pursuits, free from traditional authority. Proposed reforms include credit-based systems over rigid years, professor flexibility in tailoring courses, transparent assessments, regular academic audits, and greater integration of MOOCs like NPTEL from IITs and IISc, which offer flexible, high-quality learning from top global universities. Ultimately, decentralizing authority, opening the sector to competition, and empowering teachers and students as true stakeholders will foster innovation and shift India from outsourcing to a hub of original thinking.

**Key points:**

- Government regulations create excessive stakeholders and barriers to foreign and private entry, stifling higher education progress.
- Outdated curricula and rote evaluation in engineering colleges leave graduates unprepared for industry, demotivating students.
- Reforms should emphasize flexible credits, professor autonomy in courses, transparent assessments, and academic audits to build skilled talent.
- Expand MOOCs like NPTEL across fields for student-chosen, paced learning aligned with global advances.
- Decentralize authority to empower teachers and students, promoting free thinking and innovation in universities.

**By Ayush Agarwal**

* * *

I recently completed my graduation from a state funded engineering college. In the past couple months since I’ve started working; I’ve come to get some sense of how inadequate my training in college really was. (a sentiment, I am sure, shared by many engineering students—unfortunately a sizeable chunk of India’s undergraduates)

I am reminded of one little instance back in college. We had to work on a group project for an assignment. We were assigned a guide, who also happened to be the Head of Department for our course. In one of our meetings, one of the group members asked the guide why we were taught things that were not relevant in the present technical environment. And more importantly, why did our evaluation system still promote rote learning?

The professor was somewhat sympathetic to what my friend had said. But he quickly pointed out that many people (Deans, Director, the Council etc, etc.) had to be involved to bring about change, which is the current scenario remains impossible. Besides, he remarked, students aren’t really concerned about these things—“they only study the night before the exam and like to blame the system.”

I’ve seen quite a few students who were consistent and sincere in their school days, but their enthusiasm waned as they started college. It might be worth pondering why students lack motivation; and how we can address this and improve their engagement with the academia. And it’s not just engineering colleges—students in many other higher education institutes face a similar plight.

The professor in my college couldn’t adopt changes, even if he personally felt that some changes were necessary. Maybe he wasn’t ever encouraged to participate in this way; or maybe the environment was just too stifling.  Now, after working with a reputed company, I have realized that an urgent change is needed in the way the academic curriculum is taught and evaluated in our higher education institutes. The analytical techniques used in the industry and the corresponding skill sets required have really advanced, while our institutes of learning have lagged behind. This has resulted in a huge knowledge gap between a fresh college graduate and industry needs.

What explains these maladies in higher education?

For one, the government through restrictive policies in academic, administrative and financial spheres has played its part in hindering the progress of higher education institutes. It has created too many stakeholders in the form of committees and regulations that the real stakeholders–the students, are suffering. Further, It has placed restrictions on the entry of foreign institutes through various regulations and thwarted competition in the domestic sphere by creating various hindrances for private players. This has affected a large number of students who are the future of this country.

In the emerging era of the 21st century, higher education is the most important tool of development and the universities have to become real hubs of knowledge generation. Originality, creativity and intellectual pursuits should be encouraged on the campuses of universities and colleges. These, however, necessitate the freedom to differ from traditional authority and be able to bring to change without the fear of systems.

Just to throw some ideas, we can have measures that put emphasis on credits rather than year, give professors the flexibility to tailor courses as they see fit, bring in transparency in assessments, do a regular academic audit etc. All of this can help build the pool of highly skilled people which can contribute to this country.

There are also Massive Online Open Courses (MOOCs) that are changing the way we study and learn. They offer us both the flexibility to choose courses and the time when we want to have them. These are offered by some of the best universities around the world and are consistent with advances in different fields. There are independent assessments and quizzes after each module which test your fundamental knowledge about the subject. Though offering them at such a big scale at Indian universities may be a challenge; the flexibility to choose your subjects and time within which a course needs to be completed can give a lot of liberty to students in terms of individual learning speed and utilization of time–helping them learn better. NPTEL (e-learning portal by IIT’s and IISc), for instance, has helped many engineering students across different institutions get access to quality technical education. Imagine if this quality can be replicated in all fields at the university level–India can move from merely being an out-source destination to one in which innovation thrives.

The process of learning should move from a pressurized environment to a flexible one. Further growth of these existing institutions will come from opening up the sector and decentralisation of authority which will ultimately promote free thinking. It is high time to make the real stakeholders i.e. the teachers and students more independent.

*A mechanical engineer and an iPolicy graduate, Ayush Agarwal is an avid reader and follower of political developments. He can also be found on [Twitter](https://twitter.com/ayush_deceptive).*

* * *

**About Ayush Agarwal**

## #ThrowbackThursday: A D Shroff — Is Free Enterprise in Conflict with Democracy? (1956)

Original: https://www.spontaneousorder.in/p/shroff-enterprise

Author: Spontaneous Order

Published: 2015-10-15T17:01:39.000Z

Topics: free-enterprise, democracy, state-bureaucracy, economic-planning

> The following post is an excerpt from a monograph published in 1956. The author is A D Shroff, a prominent Indian Liberal and c0-founder of the ‘Forum for Free Enterprise.’ With the announcement of the Socialist pattern of Society as our goal, the rai

**Summary:**

In his 1956 monograph, A.D. Shroff, co-founder of the Forum for Free Enterprise, challenges Prime Minister Nehru's assertion that democracy and unrestricted private enterprise are incompatible amid India's shift to a socialist pattern of society and intensified planning. Shroff argues from a classical-liberal perspective that democracy has historically grown and flourished alongside free enterprise, viewing the trend toward state capitalism—under the guise of a welfare state—as a grave threat to freedom through concentration of economic power in state hands and bureaucratic despotism. Planning itself is not inherently socialist, per Tawney, but its socialist implementation via common ownership fails to guarantee equitable outcomes and instead curtails democracy. Shroff emphasizes socialism's true value as a moral protest against injustice, not ideological dogma, and warns of state intrusion evolving into monopolistic control that subordinates private industry, stifles experimentation, and risks totalitarianism. Citing Crossman on the greater danger of centralized bureaucracy over industrial oligopoly, and Gandhi's fear that state power destroys individuality more than private ownership, Shroff concludes that free enterprise is democracy's essential concomitant, preserving progress through trusteeship and individual initiative rather than state violence.

**Key points:**

- Democracy flourishes historically with free enterprise, and its erosion via state socialism hastens democracy's end.
- State ownership and planning concentrate economic power in bureaucracy, creating despotism that curtails freedoms.
- Gandhi warned that state power destroys individuality at progress's root more harmfully than private ownership's violence.
- State intrusion into enterprise breeds monopolies that stifle innovation and open roads to totalitarianism.

**By Guest Author**

* * *

*The following post is an excerpt from a [monograph](http://indianliberals.in/uploads/periodicals/PDF_221_1pa80mFree%20Enterprise%20and%20Democracy.pdf) published in 1956. The author is A D Shroff, a prominent Indian Liberal and c0-founder of the ‘Forum for Free Enterprise.’* 

With the announcement of the Socialist pattern of Society as our goal, the raising of the tempo of planning and the inevitable concentration of economic power in the hands of the State, the question of the relation between Free Enterprise and Democracy has assumed great significance. Some time back, the Prime Minister at a press conference in Calcutta expressed the view that the idea of equating democracy with private enterprise was not justified. He is further reported to have observed that in the last analysis democracy and unrestricted private enterprise were incompatible. As against this view, there is a large section of opinion in the country, which believes that the present trend towards State Capitalism, under the ostensible plea of a Welfare State, threatens as much to enslave man to the State as a totalitarian State. It is maintained by them that democracy is a political concomitant of Free Enterprise, and with every step towards a diminution of Free Enterprise, democracy is hastening towards its end. It is not a mere accident or coincidence of history that democracy has grown and flourished along with the system of free enterprise. Issues are unfortunately confused by the dogma of Marxism, identifying ends with means. The heresy of yesterday has become the orthodoxy of today. It is, therefore, essential to examine the question of Free Enterprise and Democracy afresh in their proper perspective.

All planners – Socialist, Fascist or Communist talk in terms of the objectives of rapid industrialisation, of raising the standard of living and an equitable distribution of wealth, with an expanding employment potential. There is nothing inherently socialistic in Planning. In the words of Tawney -“The results of Planning depend on the purposes it is designed to serve, the methods which it employs in order to realise them, and the spirit which determines the choice of both.” The best method of achieving this, according to democratic socialists or the revolutionary left-wing socialists, wedded to Marxian dogma, has been replacement of the private ownership of all property and means of production by some form of common ownership.

A mere change of ownership is no guarantee for ensuring that an industry would be run on Socialist lines. On the contrary, it has created problems arising out of undue concentration of economic power in the political hands and the growing bureaucratic despotism, both of which have in practice meant a serious curtailment of democracy.

It is forgotten that the real dynamic value of socialism lies, not in an ideological adherence to any economic theory identifying socialism exclusively with common ownership, but in its being a moral protest against social injustice and inequality. As pointed out by Crossman, if there is a danger of oligopoly developing in the sphere of industry, “there has developed another menace far more serious, and that is the growth of a vast centralised State bureaucracy.” Our country is faced with a similar danger. It is in the context of certain growing trends in the direction of indiscriminate nationalisation and even State Trading, leading towards State, capitalism, that it is feared that our bureaucracy may fast develop into a great octopus with vast accretions of power, which may someday threaten the very foundations of our freedom. Gandhiji was rightly apprehensive of the growing power of the State, when he stated: “I Iook upon an increase in the power of the State with the greatest fear, because while apparently doing good for the people by minimising exploitation, it does the greatest harm to mankind by destroying individuality which lies at the root of progress. . . . What I would personally prefer would be not a centralisation of power in the hands of the State, but an extension of the sense of trusteeship as, in my opinion, the violence of private ownership is less injurious than the violence of the State”.

Once the State begins to intrude in the field of private or free enterprise, it will soon develop into a monopolist wielding power of an enormous character. Every industry in the private sector must play a subservient role, every business activity must be carried on in the mode and manner in which the State dictates. As observed by the Group of Socialist Thinkers, in the “20th Century Socialism,” in such a system: “There is no freedom to experiment with ideas which have not won State approval. The man who wishes to risk or dare is a misfit – or worse. To eliminate all private capital is to open the road to totalitarianism.”

*To access the original, unabridged piece, click [here.](http://indianliberals.in/uploads/periodicals/PDF_221_1pa80mFree%20Enterprise%20and%20Democracy.pdf) Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Guest Author**

## Economic Inequality is Not Evil

Original: https://www.spontaneousorder.in/p/luis-inequality

Author: Spontaneous Order

Published: 2015-10-12T17:15:41.000Z

Topics: economic-inequality, poverty-alleviation, economic-freedom, capitalism

> By Luis Miranda I was visiting my daughter last weekend and I picked up a book at the F&M College Bookstore – On Inequality by Harry Frankfurt, professor emeritus of philosophy at Princeton University. It is a short book that I finished quickly enough .

**Summary:**

Luis Miranda, drawing from Harry Frankfurt's 'On Inequality,' argues that economic inequality is not morally evil; the true challenge is absolute poverty, not relative wealth disparities. Influenced by his University of Chicago background and Centre for Civil Society affiliation, Miranda critiques the rising anti-capitalist sentiment post-2008 crisis, Piketty's bestseller, and figures like Obama who frame inequality as society's defining issue. In India, he laments challenges to 1990s liberalization amid resurgent socialism. Frankfurt posits that focusing on inequality distracts from poverty traps, as seen in homeless stories from London and the US, and historical failures like communism and India's pre-1990s policies that perpetuated poverty while others advanced. Inequality may enable undue influence, but this can be addressed through institutions rather than redistribution. Morally, everyone must have 'enough' for sufficiency and future security, not equality. Miranda echoes Amartya Sen-Jagdish Bhagwati debates: grow the pie via economic freedom, not re-slice it. CCS's 'Why is India Poor?' emphasizes institutions enabling economic freedom to escape poverty. Conclusion: Prioritize poverty eradication and respect through pro-freedom policies over inequality rhetoric.

**Key points:**

- Economic inequality is not morally objectionable; absolute poverty and ensuring everyone has 'enough' are the real priorities.
- India's pre-1990s socialist policies entrenched poverty, while liberalization spurred growth—focus on expanding economic freedom to lift the poor.
- Undue influence from wealth can be managed via institutions, not by disincentivizing wealth creation which risks stunting entrepreneurship and growth.
- Institutions and policies enabling economic freedom are key to economic success and poverty alleviation, as per CCS's 'Why is India Poor?'.

**By Luis Miranda**

* * *

**By Luis Miranda** 

I was visiting my daughter last weekend and I picked up a book at the F&M College Bookstore – *On Inequality* by Harry Frankfurt, professor emeritus of philosophy at Princeton University. It is a short book that I finished quickly enough to write this blog on my flight back from America. Frankfurt is also the author of the bestseller *On Bullshit*.

In his preface, Frankfurt refers to the impact that last year’s bestseller by French economist Thomas Piketty (*Capital in the Twenty-First Century*) has on the discussion concerning the growth of economic inequality in our society. Capitalism has been under increasing threat after the 2008 global financial crisis and socialistic ideas are gaining more ground across the world. Obama recently said income inequality is “the defining challenge of our time”. In India, also, the benefits of the ’90s liberalism are being challenged by academics, politicians and some sections of civil society. Having studied at the University of Chicago and being associated with the Centre for Civil Society (CCS), I find this wave of ‘socialism’, or anti-capitalism, distressing. Which is why I found Frankfurt’s book to be a very interesting read: He argues that poverty, and not economic inequality, is the biggest challenge of our time

He starts off with an imaginary conversation:

First man: “How are your children?”

Second Man: “Compared to what?”

This conversation reminded me of a Calvin and Hobbes cartoon that I use a lot when talking about happiness. In the first frame of that cartoon strip, Calvin, another great philosopher, is smiling because he is happy and content. But then he realises that he is not euphoric, and becomes no longer content. His day is ruined because he is no longer happy. And in the final frame, he says, “I need to stop thinking while I’m ahead.” The same with the second man in that conversation. Maybe his children are doing well. Maybe they are not doing well. But when he starts comparing them to other children, there is a higher likelihood that he won’t be happy with the way his kids are doing. And the same with economic inequality. Instead of focusing on relative wealth or poverty, we should focus on the shameful levels of absolute poverty that we see around us. (A side note – I am only referring to economic poverty in this blog and not emotional or spiritual poverty).

The biggest challenge today, with all our affluence, is that there is a lot of poverty around, and this is not just in India. In recent months, I have seen so many homeless people sleeping on the streets of London and the US. I have taken doggy bags on my recent trip to give to beggars that I see on the streets in the US. That is the challenge. Why are some people so poor that they cannot get out of the poverty trap? It is not because they are all lazy. Someone from Leaders Quest (LQ), an organisation I am involved with, recently told me about their interaction with a homeless lady in London. She was a reasonably successful person who had fallen on hard times and took to begging. What hurt the most, she told the LQ group, was the look of people who passed her by – they felt that the fault was hers, not society’s. Her challenge was that, despite trying, she just couldn’t get back onto the ladder and no one wanted to help her get back.

But back to Frankfurt… he argues that economic inequality is not morally objectionable. What is undesirable is that economic inequalities sometimes lead to inequalities of other kinds which undermine our commitment to democracy; an example could be undue social and political influence by the wealthy. But these undesirable influences can be managed by proper legislative, judicial, regulatory and executive monitoring. Of course this is tougher to do and hence it is politically easier to talk about reducing economic inequality. Referring to Obama’s comment, Frankfurt says the issue is not about income inequality but that there are too many Americans who are poor. Reducing inequality will not necessarily help the poor get out of poverty. It comes back to the famous argument last year between Amartya Sen and Jagdish Bhagwati on whether we re-split the same pie or make a bigger pie. Communism did not reduce poverty in the communist countries on a sustained basis and in India, decades of socialist policies helped keep a large part of India in poverty, while other countries leapfrogged past us.

Two of the reasons why there is renewed focus on economic inequality today are the excessive consumption by the rich and fears that the future will continue to be tough. Frankfurt agrees that gluttony is ugly and morally offensive when there is so much poverty around. I am reminded of Marie Antoinette’s alleged quote (it is unlikely that she actually said it) when she was told that the peasants were starving because they did not have bread to eat, “Then let them eat cake.” She ended up losing her head during the French Revolution. This should be a reminder for those who indulge in over-conspicuous consumption – their heads could get cut off!

Frankfurt goes on to say that it is not morally important that everyone should have the same. What is morally important is that everyone should have enough. But the theory of equality is easier to articulate than the theory of having enough – how much is enough? I recall the furore after Montek Singh Ahluwalia, vice chairman of the Planning Commission, came out with new definitions of poverty. What does it mean for a person to have enough?  Frankfurt refers to a doctrine of sufficiency where having enough to get by is not enough since people who are always living on the brink are not content. Hence, having enough means that you should have some comfort that you will be provided for in the future also. A first step for a place like India is of course to make sure that people should have enough for today at least. This is more important than worrying about economic inequality in India. Of course, the rich should be encouraged to share their wealth, but by setting up disincentives for people to seek economic wealth, we run the risk that entrepreneurship will move offshore, tax evasion will increase and we will revert to the low rates of growth that we saw before the 1990s.

Frankfurt goes on to say that evil lies, not in that some others have better lives, but that bad lives are really bad. Experiences of being ignored (like that lady in London) may be profoundly disturbing. Demand for equality is different from demand for respect.

CCS and Friedrich Naumann-Stiftung für die Freiheit (FNF) published a very interesting booklet titled *Why is India Poor?*. This is also the theme of the popular *Freedom Caravan* series that we have run over the last two years across campuses in India. In it we argue that institutions and policies determine economic success. The most important institutions and policies that help the poor get out of poverty are those that enable economic freedom.  You can download a free copy from our website – *[http://ccs.in/sites/default/files/publications/lss\_series\_1\_why-is-india-poor.pdf](http://ccs.in/sites/default/files/publications/lss_series_1_why-is-india-poor.pdf).*

So let us stop talking about economic inequality and focus instead on policies that remove poverty and ensure that everyone is treated with respect. Let us focus on setting up institutions and policies that enable economic freedom.

* * *

**About Luis Miranda**

Luis Miranda connects dots. He started investing in India’s infrastructure a long, long time ago. He started IDFC Private Equity and was earlier a part of the start-up team of HDFC Bank. Luis has invested in and has been on the boards of companies like GMR Infrastructure, L&T Infrastructure, Delhi International Airport, Gujarat Pipavav Port, Gujarat State Petronet, and Manipal Global Education. Luis today spends most of his time, together with his wife, on non-profits. He is Chairman of CORO and Centre for Civil Society and Managing Trustee for Nadathur Trust. Other organisations include 17000 Ft Foundation, SNEHA, Muktangan, Sunbird Trust and Samhita Social Ventures. Luis graduated with an MBA from Chicago Booth and is a Chartered Accountant.

## Yet Another Constitution, or the Vision for A New Nepal?

Original: https://www.spontaneousorder.in/p/yet-another-constitution-or-the-vision-for-a-new-nepal

Author: Spontaneous Order

Published: 2015-10-09T17:59:29.000Z

Topics: nepal-constitution, federalism, property-rights, economic-freedom

> By Sarita Sapkota Nepal was declared a Federal Democratic Republic in the Interim Constitution of Nepal, 2007. This was right after the decade long Maoist uprising (1996-2006) which led to the fall of a long-standing monarchy. The country achieved anoth..

**Summary:**

Nepal's 2015 constitution, promulgated after the end of monarchy and Maoist uprising, aimed to establish a federal democratic republic with seven provisional states but has sparked violent protests in the Terai region claiming at least 40 lives amid disputes over boundaries and powers. The economy suffers severely, with 1047 general shutdowns (bandhs) in five years, thousands of industries closed along the Nepal-India border in the last 50 days, and blocked customs crippling revenue. From a classical-liberal viewpoint, the constitution excels in process but fails in content: it declares a 'socialism-oriented democracy' reflecting dominant socialist parties, expands unaffordable welfare rights, leaves property rights vulnerable to state expropriation, and inadequately decentralizes power. Post the 2015 earthquake killing nearly 9,000 and causing billions in losses, Nepal urgently needs reforms prioritizing entrepreneurship, local governance, and economic freedom. The author urges immediate discourse on federal structures that devolve power, secure property, allocate resources efficiently, and foster enterprise to enhance livelihoods, rather than political manifestos.

**Key points:**

- Nepal's 2015 constitution promises federalism but delivers socialist-oriented policies that undermine property rights and true decentralization.
- Over 1,047 bandhs in five years and shutdowns of 2,000 factories highlight economic devastation from political unrest over the constitution.
- Post-earthquake recovery demands local governance and entrepreneurship-enabling reforms over expansive welfare promises.
- Federalism discourse must prioritize economic freedom, resource allocation, and tax provisions to improve livelihoods.

**By Guest Author**

* * *

**By Sarita Sapkota**

Nepal was declared a Federal Democratic Republic in the Interim Constitution of Nepal, 2007. This was right after the decade long Maoist uprising (1996-2006) which led to the fall of a long-standing monarchy. The country achieved another milestone towards becoming a Federal nation with the historic promulgation of the new constitution on September 20, 2015, which has drawn up provisional boundaries for seven states. However, disagreements and dissatisfaction over the new constitution and its provisions regarding federalism have resulted in violent protests in the Terai (plains) region bordering India, [claiming at least forty lives](http://www.bbc.com/news/world-asia-34280015). Most of current debate on federalism is taking place regarding state boundary and power demarcations among other important considerations.

However, Nepal’s economy has been suffering greatly in this political quagmire. [A recent news report](http://myrepublica.com/feature-article/story/26633/847-bandas-in-5-yrs-as-wide-criticism-falls-on-deaf-ears.html) revealed that in there have been 1047 general shutdowns (popularly known as *bandhs*) in Nepal. In a row over the constitution, the southern Terai belt bordering India has come a complete standstill. [Thousands of industries have shut down](http://www.myrepublica.com/economy/story/29197/around-2-000-factories-along-birgunj-pathalaiya-corridor-stop-production.html) with the ongoing political strikes in the last 50 days. Protesters have blocked the customs points across the Nepal-India border and revenue collection has taken a massive hit.

The constitution was expected to usher in a new era of democracy which would not only have decentralized and devolved power and administration; but also expanded economic opportunities. Unfortunately, while the constitution has come out as a hodgepodge of political manifestos of different parties; it fails to address many important issues crucial in ensuring a more secure economic future for Nepalese. Stating that we are a ‘*socialism oriented democracy’* in the preamble was not really shocking; given that roughly ninety percent of the political parties adhere to socialism on principle; if not outright naming their parties Marxist, Leninist, or Maoist.

Few experts give a succinct review on the constitution by saying that the new constitution is excellent in terms of process but poor in terms of content and delivery. Expanding welfare rights beyond the nation’s capacity to deliver, not fully protecting property rights by creating a [huge room for state expropriation](http://econitynepal.com/private-property-right-you-have-it-but-you-dont/), not truly decentralizing and devolving power to the new states, etc. are some of the key issues that stand out in the constitution. In the aftermath of the devastating 7.8 magnitude earthquake that struck Nepal in April 2015 –that took away nearly 9000 lives and caused losses amounting to billions – it is even more important to propose reforms that will pave way for entrepreneurship and speed up the recovery process. Given the country’s tumultuous recent political history, one of the key challenges during the relief response was lack of democratic structures at the sub-national level. Thus, establishing the foundations for local governance should be a top priority.

As far as economic concerns go, larger economic issues such as natural resource allocation, tax provisions, etc. are being discussed in light of the new constitution. However, as Nepal embarks on the process of becoming a Federal nation, adequate preparation is required to ensure that the structures put in place will truly decentralise administration, devolve power and secure economic freedom for the people. A discourse on crucial considerations such as what will actually enable local states to facilitate enterprises and provide citizens a renewed chance to earn a living easily in a Federated Nepal has not gained adequate momentum yet. The discussion on making the new political structures and systems more effective in creating tangible difference in people’s livelihood and quality of life by expanding economic opportunities needs to take place at the very onset of this process.

*Sarita is the Coordinator of Communication and Development at Samriddhi Foundation and was previously engaged with the Foundation as a Research Associate for more than three years. She is a graduate of political science and also contributes articles for Nepali newspapers. She is also a graduate of one of our policy courses conducted by CCS Academy.* 

* * *

**About Guest Author**

## NEP on Wheels: Day Five and some Reflections

Original: https://www.spontaneousorder.in/p/nep-five

Author: Spontaneous Order

Published: 2015-10-08T12:17:35.000Z

Topics: education-reform, learning-crisis, life-skills, teacher-motivation, public-private-partnerships

> I started on the last day of my journey on the 5th of October. I left Kanpur at around 6 in the morning to be able to reach Lucknow by 12:30 where I had to attend a conference on Education organized by STIR. On reaching Lucknow, I met Samina Bano, found..

**Summary:**

On the final day of his 'NEP on Wheels' journey, the author traveled from Kanpur to Lucknow for a STIR conference on education, meeting Samina Bano of Bharat Abhyudaya Foundation, which focuses on improving government school quality in Uttar Pradesh. Bano emphasized the need for life-skills education to build children's confidence and interpersonal abilities. Teachers at the conference highlighted India's learning crisis, advocating herculean efforts and collaboration between private and government schools. Reflecting on the trip, the author notes widespread eagerness among diverse groups—priests, students, police, truck drivers—to discuss education, despite lacking direct stakes. He questions education quality, citing a class 11-educated tourist guide earning more and finding greater satisfaction than a college-educated engineer who regrets his investment, arguing this reveals systemic failures in equipping students for aspirations and earnings. Common calls included holistic, relevant education with life skills. Teacher dissatisfaction from pay disparities between contract and full-time staff was recurrent. The author critiques rigid views—professors' pessimism, journalists' cynicism, mutual superiority claims between school types—and urges dropping judgments for collective action toward a robust system, from a classical-liberal lens valuing practical skills, motivation, and partnerships.

**Key points:**

- India faces a severe learning crisis requiring massive efforts and public-private school collaboration to improve education quality.
- Education must become holistic, imparting life skills for confidence, interpersonal abilities, and relevant career preparation.
- Poor education quality is evident as skills-based workers like a class 11 tourist guide outperform and out-earn dissatisfied engineers.
- Address teacher dissatisfaction from pay disparities between contract and full-time staff to maintain motivation.
- Stakeholders must abandon rigid judgments to unite in building a robust education system.

**By Guest Author**

* * *

I started on the last day of my journey on the 5th of October. I left Kanpur at around 6 in the morning to be able to reach Lucknow by 12:30 where I had to attend a conference on Education organized by STIR.

On reaching Lucknow, I met Samina Bano, founder of Bharat Abhyudaya Foundation (BAF). Over the last few years BAF is working in Uttar Pradesh on school education, focusing largely on quality of education government schools.  Talking about education, Samina remarked that we needed an education that imparted life-skills, something that she felt is clearly lacking today, that would give children a sense of confidence and help them deal with people as they grow-up.

I met many teachers at the conference. All the teachers echoed that we need herculean efforts to address the learning crisis facing the education system of India. Remarkably, teachers felt that both private and government sectors have a vital role to play in improving quality of education. They also expressed the need for private and government schools working together towards realizing this goal.

My interactions on the last day of my trip were limited—I had to pack my bike and catch a flight in the evening back to Delhi. Once I got back I had some time to think about my journey. Here are a few of the things I have been thinking about since—

Throughout my journey, what made me really happy was that people were eager and willing to talk about education. I interacted with people from all walks of life–priests, school children, police officers, teachers, truck drivers, many of whom I had no direct stake in school education yet the question of education touched all of them.

Some of my interactions, particularly those with people who had left education to take up various skills-driven jobs, made me wonder about quality of education we are imparting. Consider a tourist guide, who has studied up to standard 11, earns more than an engineer who has spent 4 years in college.  Moreover the tourist guide is happy with his profession whereas the engineer regrets the time and money he spent on his education. What does this say about the quality of education, and why should children aspire to be engineers when our education system equips them poorly, and consequently, limits their ability to earn nor gives them a joy of doing what they aspire to do?

A sentiment that was expressed by many people was the need to make education more relevant and holistic, of ‘imparting life skills.’ How do we do this?

Talking to the teachers, disparity in pay, between contract teachers and full-time teachers was one point that came up in a number of interactions. This is leading to a lot of dissatisfaction among teachers–how do we address this? How do we keep our teachers motivated?

[

![DCIM711GOPRO](https://spontaneousorder.in/wp-content/uploads/2015/10/G0029949-450x338.jpg "DCIM711GOPRO")



](https://spontaneousorder.in/wp-content/uploads/2015/10/G0029949.jpg)

It seemed to me, at times, that people were a little too rigid in their outlook. The professor I met in Engineering college firmly believed that nothing can be changed, the journalists were certain that no real change in education was possible, private schools were convinced that they were better than government schools (and vice versa) and so on. It seemed to me that people need to give up these judgements and firm notions and come together to work toward creating a robust education system.

Overall, charting through India’s educational landscape has given me much to think about. Talking to people has given me some sense of what they aspire and wish to see happen for themselves and their children. It has been a very rewarding experience, and one that I will cherish forever. I cant wait to be on road again, this time in Southern India!

——————————————————————————————————————————-

With this post we conclude first part of NEP on Wheels series. We will be running another series of blogs in December when Prashant joins the Tour of Nilgiris. I hope that you have enjoyed the blogs. We would love to hear your thoughts and reflections and of course, words of encouragement for Prashant and others who are emerging as bright spots in India’s education system. Please do share your thoughts here or email to us on [rohan@ccs.in](mailto:rohan@ccs.in)

Also, Prashant needs to self-fund his next tour. Please do consider contributing to his tour [here.](https://www.ketto.org/prashant-education)

*(Previous posts on this series can be found here: [Day 1](https://spontaneousorder.in/nep-wheels-one/), [Day 2](https://spontaneousorder.in/nep-agra/), [Day 3](https://spontaneousorder.in/nep-firozpur/) and [Day 4](https://spontaneousorder.in/nep-day-four/))*

* * *

**About Guest Author**

## Introducing NEP on Wheels: Day One-Mathura!

Original: https://www.spontaneousorder.in/p/nep-wheels-one

Author: Spontaneous Order

Published: 2015-10-02T17:00:24.000Z

Topics: new-education-policy, education-reform, teacher-accountability, grassroots-consultations

> New Education Policy is being formed after 23 long years. India revised its education policy back in 1992. Now the not-so-new government has taken up Education Policy on their agenda and have started consultations across the country, both offline and on..

**Summary:**

The post launches 'NEP on Wheels,' a weeklong bicycle journey by young engineer Prashant from Delhi to Lucknow, stopping at five towns—Mathura, Agra, Firozabad, Kanpur, Etawah—to gather grassroots views on India's New Education Policy (NEP), under nationwide consultations after 23 years since 1992. While praising official stakeholder involvement, it argues for broader outreach to uncover diverse perspectives often missed. On Day 1, Prashant cycled 180 km to Mathura. At a Palwal police station, officers unaware of NEP decried widespread exam cheating and called for recruiting qualified teachers while slashing pay for underperformers to ensure delivery. Government school teachers and shy students in Palwal, also unaware, expressed passion for education and noted urban-rural intelligence gaps narrowing via internet access. Private school students in Kosi were outspoken, complaining about irrelevant subjects like physics for aspiring doctors and no timetable space for football amid doubts on sports careers in India. A Mathura ISKCON priest, uniquely aware, urged accountability, quality, moral values, and Bhagwad Gita in curricula. From a classical-liberal viewpoint, the travelogue series highlights unawareness among stakeholders and pushes performance-based reforms, relevance, and values to shape effective policy.

**Key points:**

- Police officers unaware of NEP consultations demand curbs on exam cheating and performance-tied teacher salaries.
- Government school participants unaware of consultations note urban-rural resource gaps partly bridged by internet.
- Private school students criticize rigid curricula forcing irrelevant subjects and limiting extracurricular pursuits like football.
- ISKCON priest advocates NEP-driven accountability, quality education, and value infusion via Bhagwad Gita.

**By Guest Author**

* * *

New Education Policy is being formed after 23 long years. India revised its education policy back in 1992. Now the not-so-new government has taken up Education Policy on their agenda and have started consultations across the country, both offline and online, to involve different stakeholders in policy formation process. While the consultation process is certainly laudable, in a country like India there is always some scope to reach out to more stakeholders, understand more viewpoints and see the policy from an entirely different point of view.

In this series of blogs we are presenting travelogue of a young engineer from Delhi who has set off on a weeklong journey on his bicycle from Delhi to Lucknow. Over the next five days he will stop at 5 different towns, reach out to citizens from different walks of life and talk to them about education. To put it in his own words: “*Through all my journey, I try to spread awareness about importance of education and healthy living. As I travel to various cities and meet lot of villagers. I get to meet different people to whom education still doesn’t hold much importance. I took it as an opportunity to make a positive change to the lives of at least a few people “*

Interestingly, Prashant will be talking to people about New Education Policy too and find out what people expect from country’s education system over the next few years. We will be presenting a blog a day capturing Prashant’s discussions in the form of a travelogue. Hope to hear your thoughts and words of motivation for Prashant, everyday!

**Bon voyage to NEP on Wheels!**

**October 1, 2015: Day # 1 Delhi to Mathura**

Yesterday, I embarked on the first day of cycling journey from Delhi to Lucknow. I will be covering over 18 cities through this trip, but will be stopping at 5 major points:  Mathura, Agra, Firozabad, Kanpur, Etawah, and finally, Lucknow. I managed to cover 180 Kms yesterday, and what a day it has been!

[

![Police Image](https://spontaneousorder.in/wp-content/uploads/2015/10/Police-Image-450x338.jpeg "Police Image")



](https://spontaneousorder.in/wp-content/uploads/2015/10/Police-Image.jpeg)

My first stop was at a police station in Palwal (Haryana). I stepped with some hesitation but within no time got the police officers talking about what seemed like a topic they had a lot to say about. Well, none of the police officers were aware of consultations on NEP arranged by the state government nor of New Education Policy being formed to begin with. Interestingly, the first thing that they talked about was the way board examinations are conducted. Cheating is widespread in these examinations, and they talked about the urgent need to address this. They also felt that we need to make sure more qualified teachers are recruited in the system. Presently we pay way too much to the teachers who are not performing their job well. One of the officers remarked that teacher salaries should be brought down to make sure that they get paid for what they deliver.

[

![School Image](https://spontaneousorder.in/wp-content/uploads/2015/10/School-Image-450x338.jpeg "School Image")



](https://spontaneousorder.in/wp-content/uploads/2015/10/School-Image.jpeg)

Next I visited a government school in Palwal, where I interacted with teachers and students. They were very excited when I told them about my trip, and were keen to know more. The children seemed a little shy, and from what appeared to me, they weren’t completely free in expressing their views (though they had a lot to say!) The teachers seemed very passionate while talking about education. They weren’t aware of the NEP consultations, but said that they would have loved to participate had they been aware of it. One of the students remarked that it makes a huge difference to be in a city like Delhi than being in a smaller town–“Students from Delhi appear to be far more intelligent than us because of their access to information and resources in general”. However, some students felt that the internet has changed that equation quite a bit–many of them use the internet and have access to resources on various subjects.

[

![13164c07aa68de217b47de8f6a3358ec (1)](https://spontaneousorder.in/wp-content/uploads/2015/10/13164c07aa68de217b47de8f6a3358ec-1-450x336.jpg "13164c07aa68de217b47de8f6a3358ec (1)")



](https://spontaneousorder.in/wp-content/uploads/2015/10/13164c07aa68de217b47de8f6a3358ec-1.jpg)

A few kilometers further from Palwal was my next stop at a private school in Kosi (Uttar Pradesh). I noticed a marked difference in the children as they talked–children in this school seemed to be far more forthcoming in expressing themselves. I visited a class of 9th standard One of the students said that he wanted to become a doctor, and did not understand why he was made to study physics—a subject that does not interest him at all. Another wanted to become a football player, but felt that there was no scope in the class timetable for him to spend more time playing football, and then wondered–“Does our country require any football players at all?”

I then finally reached Mathura. My final pitstop for day 1. Before calling it a day, I visited the ISKON temple to meet a resident priest who had previously served in the Indian Navy for 20 long years. He was the first person I met on day 1 of my journey who was aware about NEP and the consultation process that was happening around the country. He talked about what he felt was lacking in our education system, and the need for more accountability and quality in schools. He talked too, of the need of imparting a right value-system; and of introducing the Bhagwad Gita in our curriculum to fill this value-gap.

Tomorrow is day 2 of my journey. I will be heading toward Agra, some 70 Kms from here; and will try to catch hold of people there to get their views on education.

A day into my trip, 180 km down; and a few hundred kms left to go! Lucknow is still a far way off. I’ll be blogging about my experiences every day. Stay tuned to follow me in my adventures!

**A brief bio of Prashant:**

His recent mission is to spread awareness on the value of education. This is a part of [StiR Education](http://www.stireducation.org/)‘s initiative [‘ChalkWalk’](http://www.stireducation.org/#chalk-walk-2015), where teacher changemakers across 12 states in India will be taking the pledge to to reclaim their classrooms and exhibit their shared commitment to improve learning in students).  For this he is going to cycle from Delhi to Lucknow from 1st to 5th October while meeting lot of people and understanding their opinion on education. In December, he is participating in a Tour of the Nilgiris i.e. He is going to cover 900 kms in 7 days on cycle in South India. He will start cycling from Bangalore, then go to Tamil Nadu and end his journey in Kerala passing through various villages including wildlife sanctuaries of Bandipur of Karnataka, Waynad in Kerala and Mudumalai in Tamil Nadu. He is starting this journey on 16th Decmber 2015 and ends it on 23rd December 2015.

He is an engineer by profession and quite passionate about education and has been working in education sector from the last four and a half years (He worked as a teacher with TFI for two years and has been associated with STiR Education as an education leader for the past two years). He is also an alumni of ipolicy for Young Leaders organized by Centre for Civil Society. He has been invited by IIT-Madras, Estonia (a country near Russia), and Stanford University to present his ideas).

Do you like what Prashant is doing? You could actually do your bit to cheer him on!

1.  Invite Prashant for a small discussion on education, to share his stories and understand yours while he is in your city.
    
2.  Join him with your friends for a small or entire part of his cycle tour.
    
3.  Help him raise some funds for this further journey, you can make your contribution at https://www.ketto.org/prashant-education
    
4.  If you have any other idea, just shoot us an email at [rohan@ccs.in](mailto:rohan@ccs.in) and we will make sure your ideas reach Prashant!
    

* * *

**About Guest Author**

## Peace, Liberty, and Gandhi

Original: https://www.spontaneousorder.in/p/peace-liberty-and-gandhi

Author: Spontaneous Order

Published: 2015-10-02T10:28:05.000Z

Topics: gandhi, classical-liberalism, individual-liberty, anti-statism

> As we celebrate Gandhi Jayanti, it is worth our while to revisit the man and his ideas. Gandhi exemplified certain virtues that lie at the heart of liberalism–virtues of peace, toleration, freedom and liberty, and skepticism of state power. Below are so

**Summary:**

On Gandhi Jayanti, the post celebrates Mahatma Gandhi as exemplifying core liberal virtues: peace, toleration, freedom, liberty, and skepticism of state power. It features Gandhi's quotes portraying the state as a 'soulless machine' embodying organized violence that destroys individuality and progress by concentrating power. Gandhi insisted that individual liberty is foundational—no society can exist without it, as it enables talents and interdependence. He described political power as a mere means, ideally leading to 'enlightened anarchy' where self-ruling individuals pose no hindrance to neighbors, quoting Thoreau that the best government governs least. Freedom, per Gandhi, must include the right to err and sin, rejecting any constitution that deprives this. The post references articles affirming Gandhi's liberal and libertarian credentials, concluding his legacy is a fight for a freer world and India that secures liberty and dignity for all, aligning him with classical-liberal ideals against statism.

**Key points:**

- Gandhi viewed the state as inherently violent and destructive to individual progress.
- Individual liberty and interdependence are both essential for society, with liberty as its foundation.
- The ideal state is 'enlightened anarchy' featuring self-rule without political power or hindrance to others.
- True freedom encompasses the right to err and sin, as even God grants it to creatures.

**By Guest Author**

* * *

As we celebrate Gandhi Jayanti, it is worth our while to revisit the man and his ideas.

Gandhi exemplified certain virtues that lie at the heart of liberalism–virtues of peace, toleration, freedom and liberty, and skepticism of state power. Below are some of his quotes that allude to these principles.

**On the State:**

> “The State represents violence in a concentrated and organised form. The individual has a soul, but as the State is a soulless machine, it can never be weaned from violence to which it owes its very existence”
> 
> “I look upon an increase of the power of the State with the greatest fear, because although while apparently doing good by minimizing exploitation, it does the greatest harm to mankind by destroying individuality, which lies at the root of all progress.”

**On Individual Liberty:**

> “*“*If individual liberty goes, then surely all is lost, for if the individual ceases to count, what is left of society? ….No society can possibly be built on a denial of individual freedom. It is contrary to the very nature of man”.
> 
> *“*Every individual must have the fullest liberty to use his talents…Individual liberty and inter-dependence are both essential for life in society.*”*

**On Political Power:**

> “To me political power is not an end but one of the means of enabling people to better their condition in every department of life. Political power means capacity to regulate national life through national representatives. If national life becomes so perfect as to become self-regulated, no representation become necessary. There is then a state of enlightened anarchy. In such a state everyone is his own ruler. He rules himself in such a manner that he is never a hindrance to his neighbour.  
> In the ideal State, therefore, there is no political power because there is no State. But the ideal is never fully realized in life. Hence the classical statement of Thoreau that Government is best which governs the least.”

**On the Meaning of Freedom:**

> “Freedom is not worth having if it does not connote freedom to err and even to sin. If God Almighty has given the humblest of His creatures the freedom to err, it passes my comprehension how human beings, be they ever so experienced and able, can delight in depriving other human Beings of that precious right.”
> 
> “I shall strive for a constitution, which will release India from all thralldom and patronage, and give her, if need be, the right to sin.*“*

There are a few posts that examine Gandhi’s liberal views; and make for a compelling read.

-   [Gandhi, the Liberal](http://pragati.nationalinterest.in/2011/07/gandhi-the-liberal/) by B Chandrasekaran; and
    
-   [Does Gandhi deserve a place in the libertarian tradition?](https://mises.org/library/does-gandhi-deserve-place-libertarian-tradition)
    

Few men in history have had as tremendous an impact as Gandhi. As we look back upon his legacy today, let us remember that he fought, principally, for a freer world and a freer India; one that would have secured liberty and dignity for all its people.

* * *

**About Guest Author**

## Private Property Rights – You have it, but you don’t

Original: https://www.spontaneousorder.in/p/nepal-property

Author: Spontaneous Order

Published: 2015-09-28T12:40:34.000Z

Topics: private-property, eminent-domain, nepal-constitution, economic-freedom

> By Akash Shrestha The following post talks about the Right to Property in Nepal, and its status in the new constitution that came into force this month. The freedom of an individual to keep ownership of the fruits of his/her labor is the fundamental p...

**Summary:**

Nepal's new constitution nominally guarantees private property rights under Article 25, allowing citizens to acquire, own, sell, and transact property, but subsequent explanations severely undermine this by permitting state acquisition for 'public interest' without mandatory constitutional compensation or due process. Compensation is left to ordinary laws, which can be amended to eliminate it, as seen in the government's denial of compensation to Kathmandu landowners during road expansion. Explanations further allow land reform, agricultural modernization, environmental measures, housing, and urbanization without restriction, and permit repurposing acquired property for other public uses. This contrasts sharply with stronger protections elsewhere: India's Article 31 mandates compensation at no less than market value, and the US Fifth Amendment requires 'just compensation' for takings. From a classical-liberal viewpoint, such weak protections fail to secure the fruits of one's labor—a fundamental human right and pillar of economic freedom and prosperity, as echoed in Ayn Rand's assertion that without property rights, no other rights are possible. Thus, Nepali citizens have property rights in name only.

**Key points:**

- Nepal's Article 25 promises property rights but explanations (3-5) allow state expropriation for broad 'public interest' without guaranteed compensation or due process.
- Compensation depends on amendable laws, enabling scenarios like the Kathmandu road expansion where owners received nothing.
- India's Article 31 requires acquisition laws to provide market-value compensation; US Fifth Amendment mandates 'just compensation' for public takings.
- Weak property protections undermine economic freedom, as private ownership of labor's fruits is essential for prosperity.

**By Guest Author**

* * *

By **Akash Shrestha**

*The following post talks about the Right to Property in Nepal, and its status in the new constitution that came into force this month.*

The freedom of an individual to keep ownership of the fruits of his/her labor is the fundamental principle of private property rights. This right manifests in the form of lending the owner of a property, the freedom to use, dispose of, and transfer the ownership of that particular property to any other individual/group through voluntary transaction. It is one of the [fundamental pillars of economic freedom](http://www.freetheworld.com/) – the harbinger of prosperity. The UN has also ratified it as a [Human Right.](http://www.un.org/en/documents/udhr/) Countries today guarantee this right to their people as their fundamental right through their constitution – the supreme law. So does Nepal. Or does it?

Mere addressing property right as a fundamental right does not necessarily guarantee it. Particularly so when the article instating the property right is quickly followed by the lawmakers’ favorite little word – explanation. This is usually where the lawmakers tweak the preceding texts in such a way that they promise something, but they don’t really have to keep the promise. The Constitution of the Federal Democratic Republic of Nepal lends us an example:

**Article 25: Right to Property**

> *“Every citizen shall, subject to laws in force, have the right to acquire, own, sell, profit from, or engage in other transactions relating to, property.”*

And then (you guessed it right): Explanation!

> *“(3) … when the state acquires private land for purposes relating to public interest, the basis and process of compensation will be as per the law.*
> 
> *“(4) Nothing … shall be deemed to prevent the State in enforcing land reform, management and regulation for the purpose of increasing production and productivity of land, modernization and commercialization of agriculture, environment preservation, organized housing and planned urbanization.*
> 
> *“(5) As per the sub-article 3, when the state acquires any individual’s private property for public interest purpose, nothing shall prevent the state from using the property in any other public interest purpose than the one cited at the time of acquisition.”*

(Note: The above text is an unofficial translation by the author.)

Since the constitution stipulates that the compensation be determined by law, the compensation against the expropriation of private property per se is no more guaranteed by the constitution. It would depend on the Acts relating to the purpose that it is actually being expropriated for. And it is again possible (although not necessarily so) to amend the Acts to rid the state of the burden of compensation altogether. One recent example would be the [government denying land-owners a compensation](http://archives.myrepublica.com/portal/?action=news_details&news_id=41934) for the acquisition of their land by the state during the road expansion drive in Kathmandu. The constitution does not make it mandatory that expropriation only be allowed after complying with a due process, including a just, fair and reasonable compensation. Instead, it states that nothing shall prevent the state from expropriating private property for ‘public interest’ purpose.

Here are a few examples of how other countries protect private property, and make compulsory provisions for compensation if there ever need be to expropriate somebody’s private property:

**Article 31, [The Constitution of India](http://lawmin.nic.in/coi/coiason29july08.pdf)** 

> *“… it shall not be lawful for the State to acquire any portion of such land … unless the law relating to the acquisition of such land, building or structure, provides for payment of compensation at a rate which shall not be less than the market value thereof.”*

**[The Constitution of the United States](http://www.usconstitution.net/const.pdf), Amendment 5 – Trial and Punishment, Compensation for Takings. Ratified 12/15/1791:** 

> *“ … nor shall private property be taken for public use, without just compensation”*

Compare these constitutional provisions with those of Nepal and it becomes clear that you and I, the citizens of Nepal have our property right, and yet not.

> *“The right to life is the source of all rights—and the right to property is their only implementation. Without property rights, no other rights are possible. Since man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means to sustain his life.”*
> 
> – [Man’s Rights](http://genius.com/Ayn-rand-mans-rights-annotated), Ayn Rand

*This post has been taken from [Econitynepal.com](http://econitynepal.com/private-property-right-you-have-it-but-you-dont/). [Akash Shrestha](http://econitynepal.com/author/akash/) is a Senior Research Officer at ‘Samriddhi, The Prosperity Foundation.’*

* * *

**About Guest Author**

## #ThrowbackThursday: B R Shenoy — What Should be the Objective of Planning? (1961)

Original: https://www.spontaneousorder.in/p/shenoy-planning

Author: Spontaneous Order

Published: 2015-09-24T17:48:00.000Z

Topics: indian-planning, economic-liberalism, state-intervention, economic-development

> The following piece was published in a publication by Forum of Free Enterprise, which contains three essays by the author on Indian Planning. The author is B R Shenoy, who was one of India’s most prominent liberal economists and critic of state planning

**Summary:**

B R Shenoy critiques Prime Minister Nehru's claims of success from India's first two Five-Year Plans, arguing that cited statistics—such as a 42% rise in national income, per capita income from Rs. 284 to Rs. 330 (disputed as Rs. 248 to Rs. 284 by official data), life expectancy from 24 to 47.5 years, agriculture output up 41%, industry 94%, power 148%, and students from 17 million to 46 million—are misleading. True economic development must be measured by the consumer goods available to the masses for a 'good life,' not aggregate national product inflated by capital goods, intermediate products, luxuries, idle capacities (40-50% in 40 industries, 35% in irrigation), and inventory buildups. Shenoy rejects the 'accepted strategy' of prioritizing capital goods, asserting that underdeveloped economies like India's require maximizing current output and employment through resource utilization. A study of 31 countries shows high growth correlates with economic liberalism, not statist intervention that impedes human capital. The state's role should be limited to rule of law, defense, monetary/fiscal stability, public health, education, basic communications, and agricultural extension, avoiding forced growth that risks impeding progress and liberties.

**Key points:**

- Nehru's planning achievements are overstated; per capita income rose only from Rs. 248 to Rs. 284, and stats ignore idle capacities and non-consumer outputs.
- Measure development by consumer goods for the masses, deflating national product for capital goods, luxuries, idle plants (40-50% underutilization), and inventories.
- Prioritizing capital goods delays relief from poverty and unemployment; maximize current output and jobs instead.
- Economic growth thrives under liberalism, as shown in 31-country study; statist planning impedes it.
- State should focus on core functions like law, defense, stability, health, education, and infrastructure, not direct economic intervention.

**By Guest Author**

* * *

*The following piece was published in a [publication](http://indianliberals.in/uploads/periodicals/PDF_343_qczo2pIndian%20Planning%20and%20the%20Common%20Man.pdf) by [Forum of Free Enterprise](http://indianliberals.in/periodicals-details/?id=2), which contains three essays by the author on Indian Planning. The author is [B R Shenoy](http://indianliberals.in/liberals-detail/?id=2), who was one of India’s most prominent liberal economists and critic of state planning. What is posted below are excerpts from his original essay, which can be accessed [her](http://indianliberals.in/uploads/periodicals/PDF_343_qczo2pIndian%20Planning%20and%20the%20Common%20Man.pdf)e*

The Prime Minister initiated the Third Plan debate in the Lok Sabha last month, spoke with pride of the “exciting pilgrimage” of the nation, along the path of statist planning, towards the twin objectives of economic progress and social justice. He cited statistics to show that the achievements of ten years of planning were already remarkable. Indian national income had gone up during the period by 42 per cent. This indicated that the first two Plans had taken the economy out of “its old stagnant ruts”. Though population had gone up by 77 million, per capita national income had risen from Rs. 284 to Rs. 330.

A generation ago, the average expectation of life of the Indian people was 24 years. It “rose to 42 years during the Second Plan period and now it was 47.5”. This “remarkable increase” represented many factors- better health, better food and better living conditions. Specific sectors of production had recorded great strides forward, output in agriculture going up by 41 per cent, in industries by 94 per cent and in power by 148 per cent. The number of students attending schools and colleges had risen by 29 million to 46 million and the number of engineering colleges from 134 to 380.

Though impressive at first sight, this is a rather misleading bunch of statistics. The per capita national income figures given by the Prime Minister vary from the statistics issued by the Central Statistical Organisation, New Delhi. According to the latter, per capita income rose during the past decade from Rs. 248 to Rs. 284. The minor case of a bad slip in the data of per capita income apart, the objection to unprocessed national income figures being cited in the prevailing Indian context as evidence of economic development is a fundamental one.

A distinction must be made between the expansion in the physical volume of the national product and the increase in the living standards of the people. The test of economic development is in the latter. The measure of it, therefore, is the consumer goods content, not the aggregate volume, of the national product. An expansion of the national product is meaningless if it does not provide “the masses of the Indian people” with “a good life”, the avowed objective of planning as stated in Chapter I of the Third Plan, reported to have been written by the Prime Minister.

For a correct measure of economic development of the opportunities for “good life” open to the masses of the people-the increase of 42 per cent in the Indian national product must be modified for the excessive output of capital goods and intermediate products, which can neither fill empty stomachs nor cover naked shoulders, and of luxury and semi-luxury goods, which do not enter into mass consumption. It must be modified, too, by two other deflators, the piling up of idle production capacities and the additions to inventories.

While both activities inflate the volume of the national product, they detract from the current well-being of the community. Idle production capacities are estimated at an order of 40-50 per cent in 40 industries and 35 per cent in the major and minor irrigation works. The additions to inventories are unascertainable for the economy as a whole. But it is a commonly observed phenomenon and is inevitable under inflation and controls.

It is sometimes argued that the creation of capital goods is part of the “accepted strategy” of economic growth, that in the gestation period of such growth a slower rate of increase in consumer goods is natural and that once the installed machinery goes into production, abundant consumer goods will become available. This is a treacherous fallacy. The problems before under-developed economies are poverty and unemployment.

To overcome them, the available resources of production must be utilised, firstly, to obtain the highest output and, secondly, to provide employment to the largest members at current wage rates.

A study of investment and production in 31 countries has shown that economic development does not result from a piling up of investments in the public sector; that when statist intervention in economic activity impedes the full use of human capital, economic development gets impeded, too, and that high rates of economic growth generally go hand-in-hand with policies of economic liberalism. Freedom is the life-breath of progress.

The policy objective of the state should be to stimulate industry and enterprise by demolishing economic barriers and restrictions. The state makes the maximum contribution to economic development when it devotes its resources and energies to its more natural functions and activities – the maintenance or provision of the rule of law, of defence from external aggression, of monetary and fiscal stability, of public health and education, of basic communications and of agricultural extension services. To quote from Colin Clark’s *Growthmanship,* beyond this the state “should avoid attempting to force accelerated growth, since to do so is to risk impeding it and destroying individual liberties in the process.”

*To access the original, unabridged piece, click [here.](http://indianliberals.in/uploads/periodicals/PDF_343_qczo2pIndian%20Planning%20and%20the%20Common%20Man.pdf) Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Guest Author**

## The Right to be Left Alone

Original: https://www.spontaneousorder.in/p/man-free

Author: Spontaneous Order

Published: 2015-09-16T16:59:33.000Z

Topics: right-to-privacy, individual-liberty, property-rights, government-overreach

> As Prime Minister Narendra Modi was delivering a speech in his recent visit to UAE, he remarked to a packed audience–“Now we have a government in India which is visible everywhere and every minute.” He might have been on to something. The developmen

**Summary:**

Ujwal Batra argues that Indians lack a practical right to privacy, evidenced by government actions like the temporary pornographic website ban and Mumbai police charging couples in private hotel rooms for 'public indecency,' despite Modi's boast of an omnipresent government. While the state denies privacy due to its absence in the Constitution or precedents, Batra advocates deriving it from first principles as a moral right essential to individual liberty, akin to property rights which establish a sovereign private sphere free from state or societal interference. He invokes the US Ninth Amendment, affirming unenumerated rights retained by the people, and notes Indian courts' expansions like Right to Information from free expression and Right to Education from right to life. Privacy, he contends, is implicit in the right to life, enabling autonomy in speech, association, and property use. Quoting Ayn Rand, Batra frames privacy as the foundation of civilization and rule of law, urging courts, legislatures, and society to protect it against moral impositions.

**Key points:**

- Recent government interventions, such as the revoked porn site ban and police raids on private hotel rooms, demonstrate the absence of privacy protections in India.
- Privacy is a moral right derived from first principles, independent of constitutional text or precedents, and integral to property rights and individual sovereignty.
- Indian courts should recognize privacy as implicit in the right to life, following precedents like RTI from free expression and RTE from right to life.
- The US Ninth Amendment exemplifies that unenumerated rights exist, supporting infinite expressions of fundamental liberties like life, liberty, and property.

**By Ujwal Batra**

* * *

As Prime Minister Narendra Modi was delivering a speech in his recent visit to UAE, he remarked to a packed audience–“Now we have a government in India which is visible everywhere and every minute.”

He might have been on to something. The developments in recent times certainly suggest so. In the first instance, the government banned pornographic websites (as on now, the ban stands revoked) In the second, more troubling incident, cops in Bombay charged couples in a hotel room for public indecency. So apparently, what people do in their private lives, in a private place they have paid for, amounts to public indecency. Very well then.

As the state goes about imposing its morality by shaming and throwing out couples from hotel rooms, there is a debate going on in the Supreme Court on whether Indians have a right to privacy.  The instances in recent times seem to suggest, quite compellingly, that we don’t. It might serve us well to give up any pretence of priding ourselves on being a democracy, or in believing that there is any sense or semblance of freedom left in this country, while really any freedom can be denied at the whim and fancies of the government.

Do we then have a right to privacy?

The state seems to contend that since our constitution does not explicitly grant a right to privacy, and that no significant judgement by the court sets a precedent that grants such a right, it does not exist. If this is to be believed, can the citizen have no reasonable expectations of being secure in his affairs and be free from interference?

It is one thing to derive a particular right from past precedents, from the wordings of the constitution, from legal history and any other such considerations. But it is an inquiry of a different kind, and an inquiry worth pursuing, to consider what rights people do have independent of such facts and considerations—an inquiry that starts from first principles. In other words, it might be entirely possible that a dispassionate look at the facts leads one to believe that we do not, indeed have a legal right to privacy. But in no way does that undermine the moral case for privacy.

As we’re debating privacy in India, I am reminded of a particular amendment to the US constitution (the Ninth Amendment).  Curiously, the debate on privacy is in full swing in the US as well in the wake of the NSA collecting information and spying on their citizens. This very provision in the US constitution has been invoked by some to make the case for right to privacy. The Ninth Amendment states—

> “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.”

This is an important distinction and principle. In suggests, for one, that rights are flexible. Or, to put it more precisely—while certain rights may be fundamental (the right to life, liberty and property); they can have a variety of expressions; and it might not be possible to encode each of these in the constitution.  As times change, so do circumstances that warrant a revision in the manner rights are protected and find expression in society. And it is for our courts, our legislatures and our society to keep up with this.  Invoking the Ninth Amendment, a senator from the US observed, giving a speech to the US people that, [“Your Rights are many and infinite.”](http://www.huffingtonpost.com/evan-bernick/our-rights-are-many-and-i_b_7454676.html?ir=India&adsSiteOverride=in) They indeed are.

Indeed, it is not uncommon for our judiciary to recognise certain rights as being implicitly guaranteed in others. The Right to Information was recognised as being contained under, and a natural corollary of the Freedom of Expression by our highest court; as was the Right to Education seen as an extension of the Right to Life.. Whether or not these are reasonable interpretations of the right to life and expression, and whether these rights have been properly implemented or not is a separate question. Our courts will see, I hope, that the right to life naturally contains the right to privacy.

Legal questions aside, what does privacy mean; and why ought such a right be recognised and protected?

There is little distinction in my mind between the right to property and the right to privacy. Each naturally implies and contains the other.  The right to property recognises that there is a sphere for each person; that *this sphere is private*, and within this sphere, she is sovereign and autonomous. Property rights recognise that there are certain matters on which only the individual might exercise his discretion, simply because these considerations fall within her private sphere. These matters include, but are not limited to, what a person may or may not say, who one may associate with and the manner in which one dispossess off or employs one’s property and possessions. If the individual is to be subject to the judgements and considerations of others—of other persons or the state, then such rights are rendered meaningless, or at least undermined to the extent to which they are violated.

The right to privacy is exactly that—it means that in carrying out one’s affairs, one ought to be free from interference from the state and other people. Such an understanding is the very basis of rule of law and individual rights and liberty. Ayn Rand expressed it best when she said, “Civilization is the progress toward a society of privacy. Civilization is the process of setting man free from men.”

* * *

**About Ujwal Batra**

## #ThrowbackThursday: M R Masani — Bread or Freedom (1977)

Original: https://www.spontaneousorder.in/p/tbt-masani-bread

Author: Spontaneous Order

Published: 2015-09-10T13:49:02.000Z

Topics: democracy, economic-freedom, indian-constitution, political-liberty

> The following piece was written by Minoo Masani, and was originally published in the January 1977 issue of Freedom First. “Is it better to have elections now or a stable economy?” we are asked these days. When some of us joined Jawaharlal Nehru, Valla

**Summary:**

M R Masani rejects the false choice between elections and economic stability, arguing that India's Constitution, drafted with Nehru, Patel, and Ambedkar, secured both for 25 years from 1950. Stability alone can mean prosperity or poverty, freedom or slavery, echoing false dichotomies posed by Stalin, Hitler, Mao, Lenin, and Trotsky, who promised utopia after temporary dictatorship but delivered enduring shortages, as seen in 55 years of Soviet queues and privation. Masani asserts no clash exists: consumer goods abound in democracies like the US, Canada, Australia, Switzerland, Sweden, West Germany, Japan, and Israel, with free press and elections, while communist states like the USSR and China suffer poverty and shortages. Logically, only governments changeable by voters prioritize citizens' needs; slaves or prisoners do not, as history shows in pyramids and Stalin's canals. Involved in India's 1948-1950 Constitution drafting, Masani warned in 1968 of threats to parliamentary democracy amid political disgust, fears realized by 1977. He concludes: demand both bread and freedom, with prosperity achieved in and through freedom.

**Key points:**

- Reject the false antithesis between bread (economic prosperity) and freedom (elections and democracy), as they reinforce each other.
- Democratic nations like the US, Japan, and West Germany provide abundant consumer goods, while dictatorships like the USSR and China impose shortages and poverty.
- Governments accountable to voters via elections must meet citizens' needs to avoid replacement, unlike unaccountable regimes that neglect the people.
- India's Constitution intended both stability and elections, but threats to democracy undermine economic progress.
- Achieve bread in and through freedom, not by sacrificing liberty for promised stability.

**By Ujwal Batra**

* * *

*The following piece was written by [Minoo Masani](http://indianliberals.in/liberals-detail/?id=1), and was originally published in the January 1977 issue of Freedom First.* 

“Is it better to have elections now or a stable economy?” we are asked these days.

When some of us joined Jawaharlal Nehru, Vallabhbhai Patel and B. R. Ambedkar in framing the Constitution of the Republic, we thought we had answered that question by enacting a Constitution which assured both elections and economic stability. In fact, we enjoyed both for twenty-five years from 26th January 1950 when our Republic was established.

Now, stability is not necessarily a good thing. Stability can be good or bad–it can be at a high level of freedom or a low level of slavery. It can be the stability of prosperity or the stability of poverty. So what is obviously wanted is economic progress and prosperity along with stability.

It is not a new question that is being put to us. The Communists and Fascists have posed this question for a long time to justify their dictatorship. ‘Do you want bread or freedom?’ is the way Stalin, then Hitler and then Mao posed this question.

Lenin and Trotsky said to the Russian people: “Just endure our dictatorship for ten years, put up with all the hardships, tighten your belts, and then what will happen? The millennium will arise. The State will wither away; the land will flow with milk and honey.” That was the dream of Lenin and Trotsky: Today we are fifty-five years away from the time when Lenin and Trotsky asked for a few years’ sacrifice so that a beautiful future would emerge. But the Russian people do not find the State withering away. Today in Moscow people are still without homes; today they are getting by without enough clothes; the bread queues in Moscow in recent years have often been longer than they have been any time since the Revolution.

Ask a man: ‘Do you want a bed to sleep on or a table to eat on?’ Being simple enough not to see the antithesis between bed and table, he will say ‘both’. Ask a woman whether she wants a choli or a sari, and she too will say: “Why, of course, both”. Ask a man whether he wants a home or an office or shop and once again the answer will be: ‘But why must I choose? Naturally, I want both a place to live in and a place to work in.” Of course, our common man or woman would be right.

This choice that is offered between bread and freedom is an altogether false antithesis. There is no clash between bread and freedom or between elections and economic prosperity. On the contrary, by and large, they go together. If by bread is understood consumer goods in general, ask yourself which are the countries where ‘the consumer is king’, where his numerous daily wants and needs are met best, and the answer will be the United States of America, Canada, Australia, New Zealand, Switzerland, Sweden, West Germany, and, in our own continent, Japan and Israel. These are obviously the countries with functioning democracies, a free press, considerable dissent and periodic elections.

And which are the countries where there is the greatest poverty and privation for the man in the street, the greatest shortages and the worst quality of consumer goods? They are the Soviet Union and Communist China which do not have elections or the rule of law or a free press. So the record shows that countries that have elections have economic prosperity while countries that do not have elections have, by and large, people starving for the needs of life.

Now, need this be a matter for surprise? Is it not obvious that it is only men who can change their government from time to time whose needs have to be attended to, because if they are not met they will change their government? On the other hand, is there any earthly reason why a slave should be well fed or looked after? Prison and concentration camps are not places celebrated for the quality of their food or the style of their clothes or amenities in housing. This is obvious again, for the wretched slave who cannot change his government does not have to be looked after. He or she has no alternative–short of revolution–but to put up with starvation, lack of clothing and shelter and the needs of life. Those who built the Egyptian pyramids by slave labour died by the thousand in the process. Those who built Stalin’s forced labour canals died by the thousands on the job.

I had a hand in the drafting, from 1948 to 1950 of the Constitution of the Republic and I still think it is the best one the Indian people could give themselves. I was, however, early to see the dangers by which the Constitution was threatened. Speaking at a Seminar in Coonoor from October 20 to 27, 1968, I had observed: “Mrs. Indira Gandhi is reported to have said that Parliamentary Democracy in India is there for keeps and there is no danger of any kind of upset or military dictatorship. I hope she is right. As a democrat, I would like that to be true, but I can’t share her optimism. Neither on economic grounds nor non-economic grounds can we say that parliamentary democracy is secure in India. The prevailing disgust with the politician, good and bad alike, is a very real thing.” Those fears have, alas, now become grim facts.

My reply to the question which we started therefore is: “It is best to have both elections and economic progress. We want both Bread and Freedom. We want Bread *in* and *through* Freedom.

*To access the original piece, click [here.](http://freedomfirst.in/uploads/issues/pdf/290.pdf) Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century. The Freedom First archives can be accessed [here.](http://freedomfirst.in/archives/archives.aspx)* 

Read more: [https://spontaneousorder.in/masani-state/](https://spontaneousorder.in/masani-state/)

* * *

**About Ujwal Batra**

## From a Government that Rules to a Government that Serves

Original: https://www.spontaneousorder.in/p/from-a-government-that-rules-to-a-government-that-serves

Author: Spontaneous Order

Published: 2015-09-02T14:32:49.000Z

Topics: indian-constitution, limited-government, corruption, constitutional-reform

> By Baldev Raj Dawar Want the Indian society corruption-free? Curtail the powers of the Indian State. Change the function of the government – from ruling the people to serving the people. People are not born corrupt. Indians are no scoundrels by nature..

**Summary:**

The Indian Constitution fosters corruption by granting the State excessive, draconian powers without defining its obligations to serve citizens, transforming government from a servant to a ruler. Article 245 empowers Parliament and legislatures on ~210 matters in the 7th Schedule, while clauses 2 and 4 of Article 246 and Union List item 97 allow legislation on any matter anywhere in India; Article 245(2) even permits extraterritorial operation, making parliamentary jurisdiction coterminous with the universe. Fundamental Rights in Part III are conditional, with Parliament empowered to restrict them, and unenumerated 'residual rights' receive no protection—unlike the US Constitution, where enumerated rights are unconditional and residuals belong to the people. Over 105 amendments in 60+ years, such as the 42nd diluting property rights and adding non-justiciable duties, have expanded State power, contrasting with the US's 27 amendments in 240 years that extend freedoms and limit government (e.g., 2nd Amendment arms right, 22nd term limits). Historical comparisons—US vs. Soviet Union, West vs. East Germany, Mao vs. Deng China, Nehru vs. Manmohan India—show less governance yields prosperity. Solution: Amend the Constitution to curtail powers, define services, and free people for a corruption-free society.

**Key points:**

- Indian Constitution's Articles 245, 246 grant Parliament unlimited legislative powers, even extraterritorial, leaving no space for people's residual rights.
- Over 105 amendments have increased State powers and imposed citizen duties, unlike US's 27 freedom-extending amendments.
- Corruption arises from excessive State power; historical cases like US vs. USSR prove minimal governance drives prosperity.
- Amend the Constitution to limit State powers and mandate services, shifting from ruling to serving government.

**By Guest Author**

* * *

**By** **Baldev Raj Dawar**

Want the Indian society corruption-free?

Curtail the powers of the Indian State. Change the function of the government – from ruling the people to serving the people.

People are not born corrupt. Indians are no scoundrels by nature. It is the governmental system that breeds corruption. In fact, the Indian Constitution bestows on the State too many draconian powers, without spelling out the services the State should be rendering to the people. The very tone and tenure of the Constitution is authoritarian: “There shall be a President of India.” and “It shall be the duty of every citizen of India” and so on.

The Constitution elaborately describes the powers of the State and its various organs and officers. It is silent about State’s obligations and duties in providing essential services to people.

*Art.245* empowers the Parliament and the State Legislatures to make laws on all sorts of matters enumerated in the 7th Schedule. Starting with ‘Defence of India’ about 210 matters have been enumerated in three lists. You may say that there can be countless other matters which are not specifically listed in the 7th Schedule and think that they must be outside the power of the all-powerful Indian State to legislate on them.

You would be wrong.

*Clauses 2 and 4 of Art. 246* and *item No.97* of the Union List proclaim that Parliament has powers to make laws with respect to any matter for any part of the territory of India even if it is not enumerated in any of the lists. In other words, sky is the limit to the Parliament’s power to legislate.

You may further ask, what if a matter falls outside the territory of India, for example: monsoon, moonshine, tidal waves, trade winds, spectrum of cosmic radiation. Does the Indian State’s power extend to these uncharted territories?

The answer is in *clause 2 of article 245* which reads: “No law made by Parliament shall be deemed to be invalid on the ground that it would have extra-territorial operation.” In other words, the jurisdiction of the Indian Parliament’s power to legislate is co-terminus with the Universe.

Where is the space and the scope left for the exercise of people’s rights and their control over their destinies?  You may say a number of Fundamental Rights have been enshrined in Part III of the Constitution.  A reading of that Part will sadly reveal that none of the enumerated Rights are unconditional. In fact the entire Part, like rest of the Constitution, elaborately describes only the powers of the Parliament to impose restrictions on the enumerated rights. Again, there do exist countless rights of the people which are not listed, for example, to shave or not to shave one’s head. These unmentioned rights are called ‘residual rights’.

What is the status of these residual rights in the Indian Constitution?

None.

You cannot claim any human, individual, social, ethical or aesthetic right if it is not enumerated in the Constitution. Contrast this with the Constitution of the United States, wherein all the enumerated rights are unconditional and the residual rights belong to the people and not to the State.

Most of the 105 and odd amendments made to the Constitution in the last 60 years had the effect of increasing the powers of the State and tightening its stranglehold over the people. The 42nd Amendment, for instance, diluted property rights and had the effect of extending the parliament’s powers in amending the constitution; along with introducing a set of non-justiciable Fundamental Duties that almost ask the citizen to worship the state.

Contrast this with the 27 amendments in the US constitution in the last 240 years. Just to take a couple, the 2nd Amendment guarantees the right of individuals to possess weapons, and the 22nd limits a president to two terms in office. The amendments to the US constitution define and extend freedom to the people, along with curtailing the powers of the government.

The unlimited powers bestowed on the Indian State by our Constitution and the stringent duties imposed on the hapless people breed corruption. It is the power that corrupts. Take away these powers, loosen the controls and free the people and the Indian society will be corruption free and people will prosper.

It is admittedly very difficult to define corruption, much more to assign any numerical values to the index of corruption in a given society. We can, however, easily gauge the levels of economic growth, freedom, well-being and prosperity in certain given societies.

1.  The least governed state, the United States of America, vs. the most governed state, the Soviet Union, in the 20th Century;
    
2.  West Germany vs. East Germany in fifties, sixties and seventies;
    
3.  30 years of Mao ruled China vs. 30 years of Deng’s liberalized China; and
    
4.  40 years of Nehruian centrally planned socialistic economy and 20 years of Manmohanian liberalized economy.
    

The results in terms of economic development, prosperity and well being are well known. We must, therefore, take lessons from the results of these historical cases. We must amend the Constitution and change the character of the State. We must replace the government that rules by a government that serves.

*Baldev Raj Dawar is a retired Indian Diplomat. He worked in the Foreign Service till 1989 and is now a freelance journalist and author.*

* * *

**About Guest Author**

## As CCS turns 18, Gurcharan Das shares his views on India

Original: https://www.spontaneousorder.in/p/ccs-das

Author: Spontaneous Order

Published: 2015-08-18T15:21:44.000Z

Topics: economic-freedom, public-policy, free-trade, liberal-reforms

> Centre for Civil Society was founded on 15 August 1997, on the 50th anniversary of India’s political independence to signify the necessity of personal, economic and social freedom from the omnipresent Indian state. We advance social change through publi

**Summary:**

Centre for Civil Society (CCS), founded on 15 August 1997 coinciding with India's 50th independence anniversary, exists to promote personal, economic, and social freedom from the omnipresent Indian state, advancing social change through public policy to enable individual choice and institutional accountability. CCS focuses on policy change to drive liberal reforms by engaging policymakers and opinion makers, and mindset change to foster active citizenry among future leaders. Parth Shah reflects on 18 years of hard work, frustrations, and triumphs, crediting a passionate board and talented team, and links to major wins. On this occasion of CCS's foundation aligning with India's independence, Trustee Gurcharan Das shares a message emphasizing the rise of India through free society and free trade as keys to lasting peace, prosperity, and national success, underscoring the classical-liberal vision of liberty as foundational to progress.

**Key points:**

- CCS was founded in 1997 to champion personal, economic, and social freedoms against state overreach.
- CCS pursues policy change for liberal reforms and mindset change for active citizenship.
- Over 18 years, CCS achieved notable wins amid challenges, driven by a dedicated board and team.
- Gurcharan Das asserts that free society and free trade are essential for India's peace, prosperity, and success.

**By Parth Shah**

* * *

Centre for Civil Society was founded on 15 August 1997, on the 50th anniversary of India’s political independence to signify the necessity of personal, economic and social freedom from the omnipresent Indian state. We advance social change through public policy to enable each individual to lead a life of CHOICE and to make every institution ACCOUNTABLE.

Our focus is on Policy Change to bring liberal reforms by engaging with current policy and opinion makers and on Mindset Change to create active citizenry by engaging future leaders and change agents. I capture [some of our major WINS here](http://ccs.in/aboutus/success-stories) as I look back to eighteen-years of hard work, long periods of frustrations and moments of triumphs. However I would do it all over again. It has been a deeply satisfying journey.

I’ve had the pleasure of being mentored by a passionate and resourceful Board and have worked with some of the brightest minds in India—my former and current team members are all integral to and responsible for these achievements of CCS.

On this special occasion of CCS foundation and India’s independence, Gurcharan Das, Trustee of CCS, shares a message on the rise of India and how the free society and free trade are the keys to lasting peace, prosperity and national success.

In liberty,

Parth J Shah  

[

![](https://substackcdn.com/image/fetch/$s_!zFU-!,w_1456,c_limit,f_auto,q_auto:good,fl_lossy/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F1b01c7fc-96dc-4fbf-8f3c-de5da48681b4_1x1.gif)



](https://substackcdn.com/image/fetch/$s_!zFU-!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F1b01c7fc-96dc-4fbf-8f3c-de5da48681b4_1x1.gif)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## #ThrowbackThursday: C Rajagopalachari—Need of a New Party NOW (1958)

Original: https://www.spontaneousorder.in/p/tbt-rajaji-party

Author: Spontaneous Order

Published: 2015-08-13T16:28:50.000Z

Topics: rajagopalachari, swatantra-party, socialism-critique, political-opposition

> The following piece is an excerpt from an article published in the June 1958 issue of ‘The Indian Libertarian.’ C Rajagopalachari was the founder of the Swatantra Party–the only political party in India that espoused Classical Liberal principles. In

**Summary:**

In this 1958 excerpt from 'The Indian Libertarian,' C. Rajagopalachari critiques the Indian National Congress's unchallenged rule ten years after Independence, when the British transferred power to it. He argues that Congress leaders sense problems but deny seriousness, while citizens increasingly parrot socialist slogans like 'Welfare State,' 'Socialistic pattern,' and 'Socialist State' without discussion or independent thought, eroding democratic responsibility. Rajaji highlights the lack of debate on socialism's merits versus Gandhi's trusteeship doctrine, which favored voluntary property obligations over state interference and egalitarianism. Socialism concentrates economic power in rulers, undermining stewardship incentives compared to private interest. He calls for a classical-liberal opposition party of thinking citizens pursuing general welfare through reason, not populist bids for 'have-nots' votes. This opposition would balance Congress's power, preventing absolute corruption, and foster faith that voters will embrace truth for permanent welfare over short-term gains. Forming it now, under Congress rule, is essential; waiting for Congress's disintegration risks chaos and force-based parties. Rajaji's plea preceded founding the Swatantra Party in 1959, India's sole classical-liberal party.

**Key points:**

- Congress has ruled India unchallenged for ten years post-Independence, adopting socialism without public debate or critical thought.
- Citizens parrot socialist phrases, forsaking independent judgment essential for democracy, ignoring Gandhi's trusteeship over state-controlled egalitarianism.
- A new opposition must appeal to reason for general welfare, not outbid on populist promises to the 'have-nots.'
- Form this classical-liberal opposition now under Congress rule to balance power and avert absolute corruption, rather than wait for chaos.
- Voters will accept sound policies for permanent welfare if presented with faith in democratic reason.

**By Ujwal Batra**

* * *

*The following piece is an excerpt from an article published in the June 1958 issue of ‘The Indian Libertarian.’ C Rajagopalachari was the founder of the Swatantra Party–the only political party in India that espoused Classical Liberal principles. In the piece, written 10 years after Independence, Rajaji (as he was fondly called) talks of the need for a political alternative that challenged socialism. This piece was written shortly after he parted ways with the Congress, and shortly before he founded the Swatantra Party in 1959.* 

MK Gandhi and C Rajagopalachari (Image Source: http://www.mkgandhi.org/)

The political organisation that successfully fought the British power in India was at the close of that struggle put in power by the latter. The British Parliament not only acknowledged the independence of India but transferred the reins of executive authority to the Congress Party to start with. This Party continues to govern the affairs of the country after ten years of that event.

It is well known or, to use the safer journalistic phrase, it cannot be denied that there is considerable searching of heart at the present moment among the leaders of the Indian National Congress. All is not well, it is felt, but no remedy has been found that meets the situation, and consequently the customary attitude in similar situations in the case of individual sickness is adopted, to say that there is nothing very serious to worry about.

No theory of civil life, no ‘ism’ will work satisfactorily unless the citizens in the democracy are willing to undertake the responsibility of thinking and judging for themselves. This willingness, and by desuetude the capacity also, are rapidly decreasing. Instead of independent thinking and free judgement, the manners of parrots have been growing among men, even among those rightly credited with intellectual capacity of a high order. They repeat the words uttered by the established guardians without paying thought to the meaning and the implications. I am not objecting to any particular opinion but to the parrot culture that has seized the country.

**No Discussion of Socialism**

For instance, there is more than one road to national welfare. The Welfare State was the first formula adopted by the leaders; it was soon followed by the *‘Socialistic pattern’*, and then came the Socialist State.

Did people who successively re-uttered these phrases follow the various meanings of the various phrases? Has there been any known public or even private discussion of the merits of the various ideals connoted by these terms?

Do men and women who repeat the word ‘Socialism’, as a name for what is claimed to be the straight way leading to welfare, remember what Gandhiji said about it–Gandhiji whom they profess not only to admire but also to follow in all things? Do people who now accept National Socialism do so after having considered and rejected the doctrine of trusteeship which Gandhiji told his disciples was his way and was preferable to the egalitarianism of the Socialists and the interference by law with ownership of property and its traditional incidents and obligations which Socialism meant?

**Have we Thought?**

Have men thought about the matter and all its consequences, including the concentration of all economic power and influence in those who for the time being wield authority? Have they even thought about whether the management of things by men is likely to be carried out better when they have a proportionate interest in their good stewardship and in its results or when they do it on salaries and on behalf of the State? Or has Socialism been adopted only as parrots learn to speak?

**An Opposition**

We need an opposition that thinks differently and does not just want more of the same; a group of vigorously thinking citizens which aims at the general welfare, and not one that in order to get more votes from the so-called have-nots, offers more to them than the party in power has given, an opposition that appeals to reason and acts on the firm faith that India can be governed well as a democratic republic, and that the have-nots will not reject sound reason.

It is not the quality of true faith in democracy to fear that truth will not succeed with the electors. What will lead to permanent welfare the voters will accept, if not at once, at least in course of time. We must have the faith that they will see through the corrupt offers of immediate gains at the cost of injury to the general welfare. On such faith an opposition should come into being that will set a proper balance to the authority of the party in power and put our free commonwealth on its two feet.

Such an opposition, even if it should not succeed in ousting a powerful majority from its seat, may at least see that its power is not absolute power, which corrupts absolutely, but something controlled, so that the evils that flow from power may be kept within limits.

Some people, frightened by the hopeless prospect of bidding against a Socialist Government for the favour of the have-nots, believe that the only course open is to wait for the fading away of the Congress by reason of it its own weaknesses and diseases, and then to form a new political party on right lines.

This cannot be done. No party can issue out of chaos except one backed by physical force and terrorism.

If we desire a parliamentary party to come into being for steadying the machinery of government, it must be accomplished when the government is running under Congress rule. It would be fatal to wait for its disintegration, which will result only in rule by force.

*To access the original, unabridged piece, click [here.](http://indianliberals.in/uploads/periodicals/PDF_33_oaaiy819580615.pdf) Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Ujwal Batra**

## #ThrowbackThursday: Nissim Ezekiel —The Moral Imperative (1980)

Original: https://www.spontaneousorder.in/p/throwbackthursday-nissim-ezekiel-the-moral-imperative-1980

Author: Spontaneous Order

Published: 2015-08-06T18:57:06.000Z

Topics: personal-responsibility, civil-society, moral-imperative, indian-politics

> The following piece was published in the September 1980 issue of Freedom First. The author of the piece, Nissim Ezekiel, was a noted poet, critic and editor, and also served as the editor of Freedom First. Liberty cannot endure without responsibility, a..

**Summary:**

Nissim Ezekiel argues that India's malaise stems from bad government and ineffective opposition, but mere criticism is insufficient; citizens must engage in self-criticism and constructive personal actions for public welfare. With no clear solutions or leaders in sight, every aware individual bears a moral imperative to take responsibility within their circumstances, demonstrating initiative in small, day-to-day matters to foster a sense of belonging and inspire emulation. This approach yields better immediate results than protests alone, emphasizing embodying values in one's life and projecting personal quality in rapport with others, rather than relying on publicity, propaganda, or charisma-driven leadership. Ezekiel contrasts admirable commentators—who know and teach but do not act—with the needed leaders who encourage others' emergence without fearing talent as a threat or surrounding themselves with yes-men. Individuals can remake themselves publicly and privately, spreading a 'contagion' of improved morale and productivity, countering the frustrations of non-democratic practices in newspapers and educational institutions where hypocrisy prevails. Ultimately, a new spirit of cooperative thought and action is essential for human and material progress, aligning with classical-liberal emphasis on personal responsibility sustaining liberty.

**Key points:**

- Citizens must prioritize self-criticism and small-scale constructive actions over criticizing government and opposition.
- Aware individuals should take personal responsibility for public welfare through day-to-day initiatives that embody values and inspire others.
- True leaders encourage emerging talent rather than consolidating power with yes-men or charisma.
- Personal remaking in public and private life spreads a contagion of morale and productivity, improving conditions for millions.
- Hypocrisy in democratic institutions underscores the need for individual efforts toward genuine cooperation.

**By Guest Author**

* * *

*The following piece was published in the September 1980 issue of Freedom First. The author of the piece, Nissim Ezekiel, was a noted poet, critic and editor, and also served as the editor of Freedom First. Liberty cannot endure without responsibility, and Ezekiel talks about the moral imperative to adopt this responsibility towards our fellow human beings.* 

The combination of bad government and non-government which we have in India today is easy to criticize. It is also easy to criticize the various opposition parties for their dissensions and failures. What is needed urgently is self-criticism and constructive action by the general body of citizens, in their own interest and in the interest of the masses who are the worst sufferers as the system deteriorates.

Let us accept the fact that there are no solutions in sight for our malaise, no leaders who will show us the way out of it. The responsibility then falls on every individual who has some awareness of the country’s real difficulties and dilemmas. To take on that responsibility seriously, to find what he can do in his personal circumstances for the welfare of the public, to which he belongs (emphasizing his sense of belonging), and to demonstrate initiative in small, day-to-day matters is to make a specific contribution to the needs of our society.

This moral imperative brings better immediate results than merely swelling the voices of protest, though that too is necessary. I am not recommending the replacement of the present modes of political and social action by debates and discussions, even of fundamental issues. Nor am I suggesting introspection and self-scrutiny–as an escape from the noise of national and international events. It is the morale-rising example I have in mind, a way of functioning in public life, on however small a scale, which inspires emulation among those who hear of it.

Publicity and public relations, propaganda and organisational activity, partisan agitation and support to various causes, all these may be unavoidable in political participation. But the question of embodying values in one’s way of life, and of projecting personal quality in rapport with the people, remains to be tackled. He who succeeds in doing that today will do more for the nation than the leader with followers and the guru with disciples.

If it were otherwise, the ablest editorial commentators and wisest seminar paper-readers would lead us to the promised land. But they can’t: they are to be admired and respected for the critical function they perform. They know what they know, and they can teach us what to do, but they don’t do it. They leave it to others to do it, who pass on the message to others, who agree or disagree. There the matter rests.

The kind of leader I have in mind would be more interested in encouraging the emergence of other leaders than in consolidating his own. He would not see talent and intelligence in the ranks of his followers as a threat to his dominant position. He would not surround himself with yes-men who expect to share the fruits of power–the main motive of collective effort. And he would not depend on his ‘charisma’ to get away with dealings that would land a common man in jail or at the very least destroy his reputation.

It is possible for every man in varying degrees, to make and remake himself in his private as well as public life so that the norms I have briefly indicated became visible to others. As the contagion, so to speak, spreads, however slowly, life will improve for millions in human terms. This, in turn, is bound to affect the material conditions of existence, as people begin to give more of themselves to their work, no longer frustrated by the impersonal cruelties they patiently endure today. That kind of patience is never very productive.

What does it feel like to work in newspapers championing the democratic cause where not even the semblance of democratic consultation exists? What does it feel like to work in an educational institution where the leading lights shine for democracy everywhere except within their very own private property?

We all know what it feels like: it is the experience of millions who are not consulted and do not, in their turn, consult others where decisions are taken that are in reality the common concern for all. The consequence is that the democratic struggle in the true sense of the term is no more than every individual’s personal effort towards upward mobility. At such stage of his climb he does unto those below him as those above him did unto him when he was below them. This is as true of socialists as it is of others with a variety of ideological complexions.

A new spirit of cooperative thought and action is waiting to be born.

*To access the original piece, click [here.](http://freedomfirst.in/uploads/issues/pdf/333.pdf) Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Guest Author**

## Can Public Goods be Provided without the State?

Original: https://www.spontaneousorder.in/p/can-public-goods-be-provided-without-the-state

Author: Spontaneous Order

Published: 2015-07-28T14:55:38.000Z

Topics: public-goods, infrastructure, crowdfunding, rural-development

> “If I had money, I would build roads; if I had more money, I would build more roads; if I had even more money, I would build even more roads” –Sauvik Chakraverti Some time back, people from 11 villages came together and managed to gather over Rs. 1

**Summary:**

Ujwal Batra challenges the conventional economic argument that public goods like roads and bridges cannot be provided by markets or voluntary means due to non-excludability and free-rider problems. He cites a real-world example where residents of 11 Haryana villages crowdfunded over Rs. 1 crore to build a bridge connecting them to nearby towns, reducing travel distance by 30 km for farm produce markets—achieved in one year after three decades of futile government wrangling. Contributors included laborers giving Rs. 500 and widows donating Rs. 1,000, prioritizing community over politicians. Batra argues that if the state ceased providing such infrastructure, society would innovate alternatives, driven by the enormous economic gains from transportation vital for trade, commerce, and bridging rural-urban divides in isolated rural India. While not advocating state withdrawal, he emphasizes the feasibility of private, voluntary provision and calls for replicating such crowdfunding for roads, bridges, and utilities, drawing parallels to ambitious campaigns like one for Greece's bailout.

**Key points:**

- Villagers from 11 Haryana villages raised Rs. 1 crore via crowdfunding to build a bridge in one year, after 30 years of government inaction.
- Public goods like infrastructure can be provided through voluntary community efforts despite theoretical market failures.
- Society would develop mechanisms to supply vital transportation if the state stopped, due to massive economic benefits for trade and rural connectivity.
- Replicate crowdfunding models for roads, bridges, and public utilities to empower communities over bureaucratic delays.

**By Ujwal Batra**

* * *

> “If I had money, I would build roads; if I had more money, I would build more roads; if I had even more money, I would build even more roads”
> 
> –Sauvik Chakraverti

Some time back, people from 11 villages came together and managed to gather over Rs. 1 crore to build a bridge over a river that would connect their villages to the main towns nearby. The bridge would cut the distance between their villages to the nearest town by 30 km, and would make their commute to the markets for their farm produce easier. They’re not inviting politicians to the bridge’s inauguration. “For us, a labourer who contributed Rs. 500 and a widow who contributed her pension of Rs 1,000 are more important than those who fooled us for more than three decades.” (Read [here](http://timesofindia.indiatimes.com/city/chandigarh/Ignored-by-govts-Haryana-villagers-crowdfund-Rs-1cr-bridge/articleshow/47888671.cms))

It took 3 decades of wrangling with politicians and bureaucrats and nothing happened. It took a year for the bridge to be constructed once they gathered the funds amongst themselves.

It is a remarkable instance of people coming together to provide a good that is typically assumed to be provided by the government. It is thought the market and voluntary means cannot provide public goods like roads. The argument put forward is that there is no way by which you can price these goods and exclude anyone from availing these facilities. The characteristics peculiar to these goods, the argument goes, makes it impossible for the market to provide them.

There may well be much merit to this argument. But consider that if the state tomorrow decides to not provide roads, bridges and the basic infrastructure that it is required to provide, will society not devise other mechanisms to provide these goods?

It seems unlikely to me. People would be driven to create ways to provide these goods amongst themselves. After all, a proper transportation system, and the infrastructure that allows it, is vital for the functioning of the economy. The gains from proper infrastructure and transportation are enormous—they connect places and are absolutely vital for trade and commerce. Enormous enough, I am inclined to think, to drive people to provide these utilities. One of the main problems of rural India is that it is isolated—isolated from the main cities and towns that could provide a boost to their economy. A proper road network would go a long way in bridging the gap between rural and urban India.

The point here, of course, is not that the state should not provide public goods, but that it is possible of conceive of public utilities being provided through private, voluntary means. It would be awesome if such an exercise can be replicated elsewhere, and people indulge in similar crowdfunding exercises to build bridges, roads, and other facilities. (Hey, if someone can start a [crowdfunding exercise to raise €1.6 billion to bail-out Greece](http://www.independent.co.uk/news/business/news/greece-crisis-crowdfunding-campaign-crashes-indiegogo-raises-half-a-million-in-three-days-10357000.html), one certainly can to provide basic public services)

* * *

**About Ujwal Batra**

## #ThrowbackThursday: M R Masani —Will Liberalism Survive Socialism? (1966)

Original: https://www.spontaneousorder.in/p/throwbackthursday-m-r-masani-will-liberalism-survive-socialism-1966

Author: Spontaneous Order

Published: 2015-07-23T18:04:28.000Z

Topics: classical-liberalism, socialism-critique, gandhian-liberalism, indian-economy

> This piece was first published in a publication titled ‘Is Socialism Outdated?’ published by the ‘Forum of Free Enterprise.’ What is posted here is a small excerpt from the essay that was first published in 1966. There is an idea afoot that libera

**Summary:**

M.R. Masani argues in this 1966 excerpt that liberalism will outlast socialism, challenging the notion that liberalism must fade before socialism by examining long-term viability. He recounts renouncing socialism at 41, aligning with a Conservative's quip that youthful socialism shows heart but persistence lacks head, and embraces liberal and Gandhian faith. Invoking Gandhi, Masani stresses that ends and means are interlinked—dubious methods like Soviet liquidations vitiate fraternal goals—and that the state poses the greatest threat to freedom through oppressive violence. Gandhi's talisman tests systems by their benefit to the poorest, restoring control over their lives. In India's semi-socialist economy over 15 years post-1947, living standards stagnate: real income of agricultural laborers has declined, industrial workers' is stagnant via dearness allowances, and the middle class—clerks, schoolmasters, shopkeepers—is being ground out of existence. A corrupt 'New Class' of politicians, officials, and businessmen benefits via licenses and protected markets, replacing old exploiters. Masani concludes liberals should 'go forward,' echoing Carlos Romulo.

**Key points:**

- Socialism fails Gandhi's test as India's post-1947 semi-socialist policies have stagnated living standards, reduced agricultural laborers' real income, and squeezed the middle class.
- A small 'New Class' of corrupt politicians, officials, and businessmen profits from controlled economy licenses and patronage.
- Gandhi teaches that clean means are essential for good ends and that state violence is the foulest threat to freedom.
- Liberals should evolve positions dynamically and prioritize systems benefiting the poorest, favoring liberalism over socialism.

**By Ujwal Batra**

* * *

*This piece was first published in a publication titled ‘Is Socialism Outdated?’ published by the ‘Forum of Free Enterprise.’  What is posted here is a small excerpt from the essay that was first published in 1966.*

There is an idea afoot that liberalism came before socialism and therefore must fade out before socialism. I would like to examine that assumption and suggest looking fifty or a hundred years ahead to consider which is the more likely to survive, and which is getting outdated today.

When I went to London as a student, I met a Conservative Member of Parliament, who happened to be a friend of my father’s. He was very nice to me and entertained me to a meal. He casually asked me: ‘Young man, what are your politics?’ I said: ‘Sir, I am an ardent socialist.’ The old Tory patted me on the back and said: ‘Very good, my boy. That is exactly what you should be at your age. You see, if at 21 you are not a socialist, you have no heart. But if at 41 you are still a socialist, it means you have no head!’ It is interesting that by the time I was 41, I wrote a book called Socialism Reconsidered, in which I renounced socialism and declared my liberal and Gandhian faith. I remembered the old Englishman, who had by then died. How right he was!

Now, our great leader, Mahatma Gandhi, used to say that consistency in political affairs is “the virtue of an ass”. He was himself a very inconsistent person, who moved from position to position as he developed and the world developed. The point I am making is that it would be very stupid for anyone to hold on to a point of view or a dogma, disregarding what is happening around him*.*

Now, Gandhi taught us two things, basically. One was that ends and means are interlinked, that you cannot produce a better society by methods that are not clean and decent, that the end does not justify the means. By the time your means, which are dubious, are practised, your end gets vitiated. In other words, to cite the Soviet Union, by liquidations and butchery, by distortion and lying, yon cannot produce a more fraternal society. You have only to look at the kind of men who have ruled the Soviet Union to realize that this is not a more fraternal society: Stalin. Molotov, Vishinsky, Khrushchov. These are not the embodiments of a more brotherly, free and equal society.

The other thing Gandhiji taught us was that the State in the 20th century is no longer a great friend of freedom and progress,  that perhaps the biggest threat to human freedom comes from the State. This Gandhi repeated a hundred times in different ways, by saying that there is no violence as evil as the violence of the Government. All other violence can be forgiven, understood or controlled, but when the Government becomes violent and dominates and oppresses the people, that is the most foul kind of violence.

Gandhi phrased his test of any system in this way. He said: “I will give you a talisman. Whenever you are in doubt, or whenever the self becomes too much with you, apply the following test. Recall the face of the poorest and the weakest man whom you have seen, and ask yourself if the step you contemplate is going to be of any use to him. Will he get anything by it? Will it restore him to a control over his own life and destiny?” In other words, Gandhi being a lover of the poor man, to him any “ism” or any system was to be tested on this touchstone: what does it do for the lowest, the poorest, the least privileged? This I think, is a very good test for all liberals to accept.

Now, let us consider what has been happening in a semi-socialist society like India. We have been practising, or trying to practise, socialist methods for the last 15 years. What is our plight today? We do not have to go to Russia to find out what are the first fruits of socialism. Is there more prosperity? Are we better off than we were in 1947? The, answer is “No”. Living standards have been stagnant since the British left in 1947. Some classes have benefited, some are worse off.

The Government admits that the real income of the agricultural labourer, the landless labourer in the village, has gone down in the last fifteen years. He does not take home as much as he could in the old days under the British. The real income of the industrial labourer is more or less stagnant, thanks to dearness allowances. Anyone who knows anything about the middle class knows that its standards have gone down shockingly in the last fifteen years. In fact, the middle class is being ground out of existence today in India. The biggest victim of socialism is the lower middle class, the educated man with a small income, the clerk, the schoolmaster, the shopkeeper.

Then, who has benefited? If the middle class, the working class and the landless labourer are all worse off, who has benefited? The answer is a small number of people have benefited. Because we have a mixed economy, we have a mixed ‘New Class.’ They are not all commissars. Some of them are commissars and some are businessmen. What they do is that by means of a controlled so-called socialist economy, where more or less sheltered conditions are created, they share the profit. If I am in power and I give a licence to somebody to produce something with a protected market, he gives me back 10 per cent or 20 per cent of what he makes. So political patronage, operated by dishonest politicians, officials and businessmen, creates a new ring of exploiters which replaces the old system.

There is a great Liberal in the Philippines, He is Carlos Romulo, who represented his country with great distinction in the UN for many years. Two or three years ago he was nominated President of the University of the Philippines in Manila. A group of “Leftist” or communist students went to him and and put to him a question, asking for his declaration of policy. He was asked: “Mr. President, are you going left or right?” Carlos Romulo, a good Liberal, answered: “I am going forward.”

*This piece is a small excerpt from the essay. To read the entire, unabridged essay, click [here.](http://indianliberals.in/uploads/periodicals/PDF_242_5wdv6eIs%20Socialism%20Outdated.pdf)* *Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.* 

* * *

**About Ujwal Batra**

## #ThrowbackThursday: Nationalisation of Education (1972)

Original: https://www.spontaneousorder.in/p/throwbackthursday-nationalisation-of-education-1972

Author: Spontaneous Order

Published: 2015-07-16T13:25:16.000Z

Topics: education-nationalization, private-education, minority-rights, indian-socialism

> This piece was published in the August 1972 issue of ‘The Indian Libertarian.’ Today, there is much talk about over-regulation and the state stifling private initiative in education. Little seems to have changed, as similar concerns were being voiced

**Summary:**

In this 1972 article, Ujwal Batra critiques the Congress government's push for nationalization across industries and now education, exemplified by Kerala's scheme for fee unification, teacher salary control, and student reservations in private colleges, which he argues will drive out private managements without compensation. He notes fierce opposition from Christian and Nair communities, fearing loss of institutions serving their cultural needs, amid demands from youth groups for full nationalization. Batra recalls the 1960s Nambudripad government's fall over similar issues but warns that entrenched socialist ideas among youth and politicians, backed by central figures, make resistance harder. From a classical-liberal viewpoint, he urges opposition to firmly defend private agencies' rights to run colleges for ethnic, social, and religious groups, invoking constitutional minority protections rather than communal rhetoric. He advocates decentralization, cultural autonomy, and minimal regulation via universities and laws to curb corruption, without full government control. Batra laments liberalism's decline amid rising regimentation, calling on voters to support liberty-respecting parties to prevent socialist enslavement of minds through state-dominated education.

**Key points:**

- Kerala's government proposals for fee controls, teacher salary payments, and reservations threaten to eliminate private colleges without compensation.
- Private educational institutions serve special cultural needs of minorities and offer superior education, protected by constitutional rights.
- Opposition must prioritize liberal arguments for private enterprise over communal framing to succeed against socialism.
- Regulation of corruption in private colleges can occur via universities, grants, and laws without nationalization.
- Voters bear responsibility for electing socialist politicians; supporting liberty-oriented parties is essential to restore sanity.

**By Ujwal Batra**

* * *

*This piece was published in the August 1972 issue of [‘The Indian Libertarian.’](http://indianliberals.in/periodicals-details/?id=1) Today, there is much talk about over-regulation and the state stifling private initiative in education. Little seems to have changed, as similar concerns were being voiced back even in 1972.*

Nationalisation is the watch-word of the Congress Governments in India today. Nationalisation of steel industries, of sick mills and factories, of sugar Industry, cotton Industry is much talked about. The Government is taking determined steps in this direction as if nationalization were the panacea for all the ills that the country is suffering from.

Now comes the news of a fierce conflict raging in Kerala Government to control the administration of Colleges through their scheme of fee unification, control over appointment of teachers, direct payment of salaries to the teachers. The Managements are stoutly opposed to these proposals in as much as reduction of fees to the levels of those charged in Government Colleges without adequate compensation being paid to the Managements for the loss incurred thereby and control over payments made to teachers and admission of students with reservation for certain communities, would together drive private agencies out of educational field.

The Kerala Government and the Managements seem to have made these questions prestige issues. Christians have gone one step further and have raised the cry of ‘Religion in danger’ and have even described Antony, the minister as ‘Judas of 1972.’ They perhaps fear that these steps will culminate in nationalization of these institutions which cater to the special cultural needs of Christians. This fear is to a certain extent justified by the demands of certain Youth Organisations for nationalization of education in the state.

The Nambudripad Government in the early sixties foundered on this rock of nationalization of education. At the time also, the Nairs and Christians joined hands in revolting against the government, the Christians on pragmatic and religious grounds and the Nairs on communal and business grounds. The Government was eventually thrown out of power.

But times have changed since then. Socialist ideas which urge nationalisation and regimentation of all departments of life have taken deep roots in the minds of the youth and politicians. It is reported that there are powerful personalities at the centre like the Law minister who sponsor the move for nationalization, since it is perfectly consistent with their State Socialism. With the Socialist Congress party firm in the saddle of power in most of the States and at the Centre, it is doubtful whether this time the revolt of the Nairs and Christians would succeed, particularly when a religion’s colouring is sought to be given to the controversy.

The Opposition had rather better take its firm stand on the rights of private agencies to run such colleges to meet the special needs of particular ethnical, social and religious groups and to afford a better type of education to those who prefer it to that given in Government Colleges. The Opposition could have invoked the minority rights protected under the Constitution, which are being trodden under foot by the juggernaut of Government’s Amendments of Constitution in respect of such Fundamental Rights.

But the communal and religious turn and twist given to this agitation is bound to weaken the ease of these private agencies in favour of their having a free hand to on their educational work without interference of the Government.

The present Government in Kerala is as power-lusty as any other in the country and wants naturally to control both the bodies and minds of men who are under their rule. That is being done by all Socialist Governments in the world and Kerala Government is no exception to this Socialist practise.

Those who stand for decentralisation of power, cultural autonomy for different social and religious groups will always uphold the rights of private agencies to manage their own educational institutions, provided that nothing is done in and through them, which would be dubbed as anti-national and anti-patriotic. There is little scope for such activities being carried on since these institutions are affiliated to Government-controlled Universities which supervise their working and which could therefore withhold grants from them if they should indulge in anti-national activities. Corrupt practises in the payment of salaries of the teachers and admissions of students could be firmly dealt with by the government and the University with the help of ordinary law and grant-in-aid rules and regulations and by instituting public enquiries into such malpractices.

But the spirit of the times seems to be running against private enterprise either in industry or in education. Liberalism is on the downgrade and it is being replaced by regimentation. Industrialists and Educationalists have either to fall in line with the Socialist politicians or go under. It is of no use for Catholics and Nairs to lament over spilt milk now especially after their having case their votes in favour of candidates belonging to political parties which care least for the rights and liberties of the people. Let the ‘masters’ of these politicians first educate themselves and learn to discharge their duties and responsibilities as voters. Then only will sanity dawn on power-mad politicians who want to enslave the bodies and minds of the youth by nationalising all schools and colleges and thus the entire educational system.

*Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Ujwal Batra**

## #ThrowbackThursday: M R Masani —Monopolies: State or Private? (1970)

Original: https://www.spontaneousorder.in/p/tbt-monopoly-masani

Author: Spontaneous Order

Published: 2015-07-09T17:58:30.000Z

Topics: monopolies, competition-policy, state-enterprises, economic-freedom

> This piece is based on a speech given in the Parliament by M R Masani, who was an MP at the time. It was published in the February 1970 issue of ‘Freedom First.’ In the piece, Masani talks about the problems with with the MRTP bill that had been intro

**Summary:**

M R Masani, speaking from a classical liberal perspective that champions competition as a cure for exploitation and malpractices, vehemently opposes the 1970 Monopolies and Restrictive Trade Practices (MRTP) Bill. He argues it is not a genuine anti-monopoly measure, as it ignores India's only true monopolies—100% state-controlled enterprises like the Life Insurance Corporation (LIC), Indian Airlines, Air India, Railways, Telegraphs, Telephones, All India Radio, and partial ones like STC, MMTC, and FCI—which are explicitly excluded. These government monopolies are the worst, being irresponsible without countervailing private checks, leaving consumers and workers without appeal, embodying 'industrial feudalism.' The bill confuses size with monopoly (e.g., small firms can monopolize, giant US auto firms compete fiercely), downgrades the commission to advisory status while empowering the minister, restricts private competition via licenses, and protects a 'New Class' of political, official, and business interests exploiting the economy. Masani concludes the bill is a fraud that pretends to fight monopoly while fostering state dominance and stifling market freedoms.

**Key points:**

- The MRTP Bill fails as an anti-monopoly law by excluding all real state monopolies like LIC, Indian Airlines, Railways, and others.
- Government monopolies are uniquely dangerous due to their unchecked power, lacking private sector countervailing forces.
- The bill confuses company size with monopoly and restricts competition between private firms via permit-license controls.
- It empowers the minister over a mere advisory commission, undermining genuine anti-monopoly efforts.
- Masani identifies a corrupt 'New Class' of politicians, officials, and businessmen as the true concentrators of economic power.

**By Ujwal Batra**

* * *

*This piece is based on a speech given in the Parliament by M R Masani, who was an MP at the time. It was published in the February 1970 issue of ‘Freedom First.’ In the piece, Masani talks about the problems with with the MRTP bill that had been introduced in the parliament–and how the real threat of concentration of economic power came not from private businesses, but from the state.* 

I speak for a party which believes in competition. That is the classical Liberal school of economics. We believe that any restriction on competition is *prima facie* undesirable, though in rare cases it can be connived at by the State for social purposes. We believe that competition is a therapeutic element which cures a lot of things including exploitation of the consumer and many other malpractices. Therefore, we are vigorously opposed to all restrictive trade practices and to monopolies of any kind.

We are also opposed to concentration of power in the same hands, whether it is concentration of economic power or a combination of economic and political power. This Liberal point of view is not really different from an intelligent Democratic Socialist point of view.

We believe in the ballot of the market place, where the consumer decides the pattern of production. We are prepared to support any anti-monopoly legislation which is honest and genuine. It is against this very friendly background that we judge the Monopolies and Restrictive Trade Practices Bill.

We find the Bill terribly disappointing because it is not an anti-monopolies Bill at all. It was bad enough when it was introduced in Parliament. Even then it was not on the lines of the draft Bill attached to the Das Gupta Commission’s Report. It was a Bill entirely different from what the earlier Monopolies Commission had recommended. After coming back from the Joint Committee, I regret to say that the Bill has got much worse, and it is a great pity that it should be so.

Let me turn to some features of the Bill and show why I say it is a bad Bill. The first is that the Bill does nothing to stop monopoly. Monopoly is a hundred per cent domination or control or possession of production of a particular article or commodity. Judged by that test, there is not a single monopoly outside Government enterprises. I will mention three. The Life Insurance Corporation is a hundred per cent monopoly because when anyone tries to compete with LIC he can be punished and sent to jail. The Indian Airlines Corporation is another monopoly, and Air India International is a third one. Then, the Indian Railways are a monopoly. Telegraphs are a hundred per cent monopoly, telephones are a hundred per cent monopoly,  All India Radio is a hundred per cent monopoly. There are partial monopolies also. There is the STC MMTC, FCI, and so on.

Now, the sad thing is that all these State monopolies, which are the only monopolies in India, are specifically excluded from the purview of the Bill.

Therefore, the first aspect of the Bill is that it does not deal with the only monopolies that exist; it pretends to deal with non-existent monopolies that do not exist.

The Government monopolies are the worst monopolies, because they are irresponsible. Private monopolies have the police power of the Government to check them. There is the doctrine of countervailing power between the corporation and the Government. But where the government becomes a factory-owner or the factory-owner is the same as the policeman, there is no appeal. So the poor consumer who has to buy from the Government enterprises is completely at the mercy of the Government monopolies. The worker in the establishment also has no right to appeal to any third-party. That is why I would call the doctrine embodied in this Bill industrial feudalism of the most reactionary kind. The Bill is a fraud on the people of India because it pretends to fight monopoly while it does nothing of the kind.

A second aspect of the Bill is the way in which the Commission that is sought to be appointed is downgraded into a mere advisory body while all real power is to be exercised by the Minister. That is the second aspect of the Bill which we cannot accept as being honestly anti-monopoly.

A third aspect of the Bill which does not commend itself to us is that it tries to restrict competition. It does not foster competition as an anti-monopoly Bill should. It restricts competition in two ways. First of all, it restricts competition between private enterprises and State enterprises by giving the latter a complete monopoly. Secondly, as between private enterprises, it gives the power to stop free competition by inhibiting real competition between rival private enterprises by using their permit-licence powers and their anti-monopoly powers.

The entire Bill is based on a confusion between size and monopoly. Size and monopoly have nothing to do with each other. You can have a small concern completely dominating the market in a particular product and it would be monopolistic, even if it is small. You can have giant companies like the American automobile companies, fighting a struggle to the death in competition; yet, none of them would be a monopoly. This elementary distinction between size and monopoly has been completely ignored by this Bill.

That brings me to ask the question: Why did they introduce this Bill? I can only say that, as in Russian and Yugoslavia about which Mr Milovan Djilas, the well-known Yugoslav Communist, has written in his book, The New Class, there is a New Class in India also. It is this class which exploits its political power to get its hands on the economy and to extort what Karl Max would have called ‘surplus value’ out of the peasants and workers and the middle class of this country.

Ours is a mixed economy. So it is a mixed class. This class has three heads–the political head, the official head and the business head outside–who conspire to loot this country and squeeze out the hard-earned earnings of the common people. If there is one vested interest in India today, it is the one symbolised by this government today, corrupt officials–such of them as are corrupt–and corrupt businessmen outside who join hands to loot the people.

*You can access the original article* [here](http://freedomfirst.in/uploads/issues/pdf/212.pdf).*Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.*

* * *

**About Ujwal Batra**

## Nani Palkhivala —Constitution and the Common Man (1971)

Original: https://www.spontaneousorder.in/p/throwbackthursday-nani-palkhivala-constitution-and-the-common-man-1971

Author: Spontaneous Order

Published: 2015-06-25T18:18:45.000Z

Topics: indian-constitution, fundamental-rights, right-to-property, rule-of-law

> This article was published in the February 1971 issue of Freedom First and is an excerpt from a lecture delivered in Bombay. At the time, the right to property was still a fundamental right but was constantly being undermined by our legislators. An emin..

**Summary:**

Nani Palkhivala argues that India's nascent 23-year-old democracy, unprecedented in its history, faces extinction without zealous guarding of fundamental rights, the 'soul' and 'conscience' of the Constitution, which prioritize individual freedom and dignity over state power and transient politicians. The Constitution, shaped for the common man, encourages wealth creation through fundamental rights to property, trade, business, and profession, rejecting levelling-down ideologies. Amid rising fanaticism—regional, linguistic, communal, economic—amending the Constitution to empower Parliament to abridge these rights would betray freedoms. The right to property, derided in socialist rhetoric, is essential for a sound democracy and economic progress, aligning with human nature and enshrined globally, even in communist states for personal labor fruits. In India, it is already heavily attenuated: 64 parliamentary and state acts infringing it are constitutionally valid, compensation adequacy unchallengable, and it excludes zamindari abolition and agrarian reforms. Retaining it is imperative as it underpins other rights like speech and association. Palkhivala debunks the myth that the Constitution hinders progress, blaming disastrous government economic policies for 17 million unemployed and widespread poverty below subsistence. Thinking citizens, the silent majority, must actively defend these rights against demagoguery.

**Key points:**

- India's freedom is one election from extinction without safeguarding fundamental rights against legislative undermining.
- The right to property is vital for economic progress, already restricted by 64 valid acts, and essential to other freedoms.
- Government economic policies, not the Constitution, cause mass unemployment and poverty.
- Citizens must actively oppose amendments abridging fundamental rights amid rising fanaticism.

**By spontaneousadmin**

* * *

*This article was published in the February 1971 issue of Freedom First and is an excerpt from a lecture delivered in Bombay. At the time, the right to property was still a fundamental right but was constantly being undermined by our legislators. An eminent jurist and economist, Palkhivala was one of the most fierce defenders of liberty and the rule of law.* 

India has never known true democratic freedom in its entire history except during the last 23 years. If Plato’s dictum regarding political evolution is correct, our newly won freedom will have to be zealously guarded if it is not to be supplanted by dictatorship. In a nascent republic where freedom is not bred in the bones of the people, the danger of dictatorship is always vastly greater than in democracies which are centuries old.

In India freedom is not more than one election away from extinction. When an attempt to uphold the rule of law is called a manifestation of ‘vested interests’; and when the preservation of the sanctity of the constitution is called the handiwork of ‘reactionary forces’, it should be clear to any thinking mind that freedom is in peril.

Political freedom and civil liberty are the keystones of the Indian Constitution. Our constitution is primarily shaped and moulded for the common man. The only persons who would be disappointed with the constitution are those who believe in outdated ideologies which can only result in levelling down and not levelling up. The constitution believes in the distribution of wealth, and therefore it not only permits but encourages the creation of wealth by enterprising individuals who with their vision and expertise are prepared to take risks and develop their country. That is why our Constitution confers on all citizens the fundamental rights to acquire, hold and dispose of property and to carry on any trade, business and profession.

The great makers of our Constitution clearly intended that the integrity of the Constitution should be preserved against any hasty or ill-considered changes, ‘the fruits of passions or ignorance’. The essential purpose of our Constitution is to ensure freedom of the individual and the dignity of man, and to put basic human rights above the reach of the State and of transient politicians in power whose naked juvenile chatter is covered by the fig-leaf of demagogic claptrap.

With the growing powers of government all over the world, it is eminently desirable for any democracy to have fundamental rights which cannot be curtailed or abrogated. In the words of Mr. Justice Frankfurter, man being what he is cannot safely be trusted with complete power in depriving others of their rights. The protection of the citizen against all kinds of men in public affairs, none of whom can be trusted with unlimited power over others, lies not in their forbearance but in limitations on their power. At least such is the conviction underlying our Constitution.

With our varying and widely divergent creeds and ideologies, and a wide variety of religions and languages, our country is pre-eminently a country where inalienable fundamental rights are an absolute necessity. These rights have been called, not without justification, the ‘conscience of the Constitution’ or the ‘soul of the Constitution’. In material terms, they constitute the anchor of the Constitution and provide it with the dimension of permanence.

No time in India’s history would be more inopportune than the present for amending the Constitution and empowering Parliament to abridge or take away the Fundamental Rights. With the growing sense of insecurity in different States, when fanaticism of all sorts–regional, linguistic, communal and economic–is gathering momentum, it would be not merely a mistake but a betrayal of the fundamental freedoms to enable Parliament to trifle and tinker with them.

The right to property is often derided as the ‘least defensible’ right in a socialist democracy. Yet a little reflection should show that this right is of the essence of a sound body politic and of a democracy which aims at marching forward economically.

Any attempt to abrogate the Fundamental Right to property would be erroneous, because it would run counter to the eternal laws of human nature. Men will sooner, Machiavelli said, forgive the deaths of their relatives that the confiscation of their property. It is a sad reflection on human nature that, generally speaking, a man will work for himself and his family as he will work for no one else. However, until this law of human nature is changed, the abolition of the right to property can meet with nothing but disaster.

There is no democracy anywhere in the world where as a matter of law and of constitutional practise the right to property is not respected. The right to property is enshrined in the Constitution of the States where the rule of law prevails, as for example in the Magna Carta, in the American Declaration of independence, in the French declaration of the Rights of Man and in the German Constitution. Even in Communist countries like the USSR, the right to private property in the fruits of personal labour and the right to inherit such property are recognized.

Under our Constitution the right to property is elastic and flexible–the Legislatures and the Executive are entitled to subject it to all such reasonable restrictions as are in the public interest. The right to property cannot be invoked at all against laws relating to Zamindari and other estates in lands or against other laws relating to agrarian reforms. Sixty-four Acts passed by Parliament and the State Legislatures are constitutionally declared to be valid although they may directly infringe on the right to property. The adequacy of compensation cannot be challenged in our Courts of Law. Far from there being any need to abridge the Fundamental Right to property further, the truth is that perhaps in no free democracy of the world does the right to proper exist in such an abridged and attenuated form as it does in India.

Countries where freedom has become a way of life can do without the luxury of a constitutional right to property. But in India where economic fanaticism has become a way of political life, it is imperative to retain the right to property.

It would not be too much to say that the right property is, in a sense, the handmaid to the other fundamental rights. Of what avail is the fundamental right to the freedom of speech and expression to a newspaper if its property can be taken away without reasonable compensation; or the fundamental right to form associations or to religious minority is to be held on the sufferance of the party in power?

The myth has been sedulously propagated by wily politicians that it is the Constitution which stands in the way of the nation’s economic progress and the uplift of the masses. This is the greatest fraud ever perpetrated on the people. The truth of the matter is that it is the wooden-headed and disastrous economic policies of the Governments at the Centre and in several States which are truly responsible for the miseries of the seventeen million unemployed and the many more millions who, though employed, are still living below the minimum subsistence level due to the erosion in the value of the rupee. There is not a single sound economic policy or scheme for social development of the masses which is in the slightest degree hampered or hindered by any of the provisions of the Constitution.

There is no doubt that the overwhelming majority of thinking men strongly believe in the Fundamental Rights and are deeply concious of the outstanding role played by the Courts in preserving our cherished values. But unfortunately they constitute the silent majoirty. There are times in a country’s history when inaction and silence can be a culpable wrong, and we are living in such times. It is not enough that we believe in our national motto that truth with ultimately prevail. We must take active steps to see to it that falsehood does not have a very long innings before the ultimate moment of truth arrives.

*You can read the original, unabridged version [here](http://freedomfirst.in/uploads/issues/pdf/225.pdf). Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.* 

* * *

**About spontaneousadmin**

## #Throwback Thursday: B P Adarkar—Our Mixed Economy—Blessing or Curse? (1972)

Original: https://www.spontaneousorder.in/p/throwback-thursday-b-p-adarkar-our-mixed-economy-blessing-or-curse-1972

Author: Spontaneous Order

Published: 2015-06-18T18:22:46.000Z

Topics: mixed-economy, industrial-licensing, private-sector, bureaucratic-delays

> In this week’s selection for #ThrowbackThursday, we have a piece by Prof. B P Adarkar. The following is an excerpt from an essay he wrote titled ‘Our Mixed Economy–Blessing or Curse’, originally published in 1972 by the ‘Forum of Free Enterprise

**Summary:**

In his 1972 essay 'Our Mixed Economy—Blessing or Curse?', B.P. Adarkar argues from a classical-liberal standpoint that India's mixed economy is a curse due to the suppression of the private sector by an incompetent public sector and suffocating government regulations. The private sector, likened to 'Cinderella,' is circumscribed while the public sector fails to meet material needs yet blocks private initiative, leading to national economic underperformance. Private enterprises, run by stakeholders with incentives for efficiency, outperform the corrupt and mismanaged public ones. Adarkar lambasts the 'socialistic pattern' for imposing red tape, arbitrary procedures, and licensing controls that spawn corruption, delays, and a parasitic class of touts. 'Red Books' for imports/exports clog trade, while industrial licensing favors big business—capable of navigating corruption and delays—resulting in monopolies, as admitted by the government. Specific evidence includes Minister Moinul Haque Choudhury's revelation of 334 license applications from 1966 still pending in 1971, amid inter-ministerial foot-dragging. West Bengal's failed incentives highlight bureaucratic inertia, idle capacity, and unfulfilled promises. Adarkar concludes that removing impediments to free private sector operation, rather than tinkering with symptoms, is essential for progress, invoking Parkinson's 'Law of Delay' as the deadliest denial.

**Key points:**

- The public sector's mismanagement and suppression of the private sector are the root causes of India's economic ills, not private enterprise flaws.
- Industrial licensing procedures create corruption, delays, and monopolies by favoring big business over small entrepreneurs and newcomers.
- In 1971, 334 industrial license applications from 1966 remained pending due to bureaucratic inertia across ministries.
- Government must eliminate red tape and licensing controls to unleash private sector efficiency and achieve faster investment and production.

**By Ujwal Batra**

* * *

*In this week’s selection for #ThrowbackThursday, we have a piece by Prof. B P Adarkar. The following is an excerpt from an essay he wrote titled [‘Our Mixed Economy–Blessing or Curse’](http://indianliberals.in/uploads/periodicals/PDF_251_ei4egjOur%20Mixed%20Economy%20-%20Blessing%20or%20Curse.pdf), originally published in 1972 by the ‘Forum of Free Enterprise.’* 

The Private Sector is, indeed, the ‘Cinderella of the show’ – suppressed and circumscribed on all sides. While the Public Sector is unable to meet the nation’s material requirements, it functions like the dog in the manger and it will not let the Private Sector do the job either. In other words, ‘neither you shall have it, nor shall I have it-let the dog have it!’ The fault, therefore is not of the Private Sector that the Mixed Economy has given rise to various evils, but simply that the Private Sector has not been even allowed to function freely and properly. In fact, the boot is on the other leg: it is the mismanagement and incompetence of the Public Sector that is responsible for the poor performance of the nation’s economy as a whole. Also, the Private Sector industries are being run mainly by experienced people, who have a stake in the success of their business, and are, therefore, naturally more efficient and (by definition) less corrupt than those who operate the public sector industries. I do not mean to say that there are no ‘black sheep’ in the Private Sector but they are few and far between.

Unfortunately, in the name of the socialistic pattern of society and planning control, all kinds of impediments are being constantly placed in the way of the private sector industries. The Government has tied itself and everyone else into knots with red-tape and dilatory (even arbitrary) procedures which are contrary to all tenets of business management and to the basic interests of economic progress. Only Big Business seems somehow to survive all this and, in some cases, actually even to thrive on it! On the other hand, the small business man and the newcomer are neatly thrown overboard!

The wild growth of rules and regulations can be seen, for example, in the “Red Books” for Imports and Exports–not Mao’s ‘red books’, but of the Chief Controller of Imports and Exports! These are clogging the avenues of trade-like the water hyacinth overwhelming and destroying vegetation. The corridors of Secretariats and of their subordinate offices have become like *dharamshalas* for mendicant business men loitering for beggarly bits of licence worth a few thousand rupees, while a new class of touts and agents has arisen living like parasites on the blood of applicants for licences! Here is indeed a paradise for the little bureaucrats who simply thrive on the Red Books and their endless addenda and corrigenda, with corruption, delays, increasing costs of industry, and inefficiency, frustration and bad blood all round.

Concentration of economic power and the growth of monopolies are the direct results of these licensing procedures and policies-and this has been admitted by the Government itself–because only Big Business has the staying power and the resources to cope with the exorbitant demands of procedure and corruption. However, instead of removing the root causes of concentration and monopoly, the Government has been tinkering with measures to control what are basically the results of its own policies!

As regards industrial licensing, the Minister for Industrial Development, Mr. Moinul Haque Choudhury, at a meeting of the Central Advisory Council in November 1971, said that after taking charge of his portfolio, he had cleared many old cases of industrial licence, but that he was helpless, ‘when the administrative machinery concerned’ (i.e., not only of his own Ministry but of other Ministries also) ‘sat on the fence.’ He disclosed that no less than 334 licence applications made in 1966 were still pending.

He did not mention what the position was regarding applications made in 1967, 1968, 1969, 1970 and 1971. The figures for these years must be even more revealing! Still, Ms. Choudhury has the sang froid to ask, why in spite of his efforts, ‘a faster rate of investment and production,’ has not taken place!

With stringent monopoly legislation, procedural delays, exorbitant demands of corruption, heavy income and wealth taxation, and ceilings on property, who can have the energy and the heart to work and earn in the Private Sector now?

Take the case of West Bengal, where an energetic Governor, Mr. A. L. Dias, has been trying to rejuvenate its economy with a ‘package of incentives’ to be given by both the State Government and by New Delhi. It was stated in the Press, however, that the Writers’ Building had lost its credibility with the investors on various counts. Firstly, the slow-moving bureaucratic machinery, it is pointed out, takes months, at times years, to even forward applications of investors to New Delhi, where further delay also awaits them. Secondly, in the small-scale sector, even raw materials promised were not received in time, but got immobilised somewhere in the State administration. Thirdly, a large amount of installed capacity remains idle in most of the engineering concerns, about which little or nothing is being done by the State. All this points to the urgent need for the State and Central Governments to set their own machinery in order, in the first instance.

That reminds me of Professor Parkinson’s new ‘Law of Delay’, in which he defines delay as the ‘deadliest form of denial’ -a speciality of P.P. (the prohibitive procrastinator), who instead of saying “No” says: “IDC” (i.e. in due course), hoping to bury a scheme with sheer exhaustion and continuous frustration! I am sure Professor Parkinson will find in India a vast scope for his Ingenuity in producing new ‘laws’, if he spares some time to spend here.

*You can read the entire essay [here.](http://indianliberals.in/uploads/periodicals/PDF_251_ei4egjOur%20Mixed%20Economy%20-%20Blessing%20or%20Curse.pdf)  Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.* 

* * *

**About Ujwal Batra**

## #Throwback Thursday: M A Venkata Rao—The Lengthening Shadow of Government (1960)

Original: https://www.spontaneousorder.in/p/throwback-thursday-m-a-venkata-rao-the-lengthening-shadow-of-government-1960

Author: Spontaneous Order

Published: 2015-06-11T18:08:58.000Z

Topics: limited-government, economic-liberty, state-overreach, indian-libertarianism

> This piece was first published in the December 15, 1960 issue of ‘The Indian Libertarian’. In this piece, Venkata Rao examines the leftist tendencies that had come to dominate the political discourse in many countries—significantly impinging on indi

**Summary:**

M A Venkata Rao argues that post-1917 leftist dominance fosters an unquestioning faith in government's omnicompetence across all life spheres—education, economy, culture—inevitably leading to communism by empowering bureaucracy to usurp individual sovereignty. He cites global examples: USSR's dictation of science (Lysenko) and arts; USA's creeping statism, where 1947 federal funding covered half of university budgets (90% including lower levels), governments annex a third of incomes, employ a tenth of workers, and sustain agricultural price floors excluding competition since Roosevelt's New Deal. In India, Nehru-influenced policies feature state monopolies, over-regulation hamstringing private sectors like textiles and steel, nationalizations (Imperial Bank, life insurance, eyeing more), and bureaucracy explosion from Rs.35 crores secretariat spend in 1947 to Rs.250 crores. Price controls enable ruling party corruption, as a one-anna sugar export hike yielded Rs.21 crores windfall. Rao contrasts pre-independence Mysore's wise policy of returning successful state enterprises to private hands for efficiency and civic education. He warns concentrated state economic-political power exceeds private tycoons' threats, extending violence against free human energy. Classical-liberal solution: confine government to law, order, defense; popularize limited government via libertarian literature.

**Key points:**

- Leftist belief in government's omnicompetence across all spheres naturally progresses to communism by bureaucratic aggrandizement.
- India's state controls and regulations have proliferated bureaucracy (Rs.35cr to Rs.250cr secretariat spend) and enable ruling party corruption via price-fixing windfalls like Rs.21cr from sugar export hikes.
- Return successful public enterprises to private sector, as in pre-independence Mysore, to free funds for innovation and foster economic responsibility.
- Limit government strictly to law, order, and defense to prevent violence against individual free expression and preserve liberty.

**By Ujwal Batra**

* * *

*This piece was first published in the December 15, 1960 issue of [‘The Indian Libertarian’.](http://indianliberals.in/periodicals-details/?id=1) In this piece, Venkata Rao examines the leftist tendencies that had come to dominate the political discourse in many countries—significantly impinging on individual freedom. India, of course, significantly constrained the economic liberty of the people, with the state having a monopoly over many industries and over-regulating the ones it left to private initiative. In this piece, he remarks of the dangers of state excesses in the economic life of people, and what he believed was the proper role of the state in society. The present piece is a slightly abridged and edited version of the article as it first appeared in 1960.*

The present era, especially since the 1917 October Revolution in the USSR, has come to be dominated by Leftist ideas. The central characteristic of Leftism of all varieties today is an unquestioning belief in the omnicompetence of Government. Socialists hold that Government is the general agency of society for doing good in every sphere of social life–education, religion (by regulation or disparagement), economic life, constitutional matters, philosophical ideas, moral notions, sports and what not.

This is a trend that naturally and inevitably results in communism in society and state. When Senator MacCarthy was harassing officials in the USA with his charges and suspicions of pro-communist activities, Mr Chodorov, a leading libertarian thinker told him that there was no need to make charges against particular officials. All of officialdom anywhere, given their head, will bring about communism unwittingly by making government power omnicompetent and all-pervasive, leaving no field of life, neither art nor culture, neither religion nor morality! It is the nature of bureaucracy to aggrandize itself to the limit and usurp the sovereignty of the people and destroy democracy as such.

The influence of Leftism in the world is so over-mastering that even educated people are unable to think of an alternative to socialist theories and programmes. They seem so natural and normal that any suggestion going contrary to them are rejected out of hand as reactionary and pro-capitalist. Motives are attributed to critics as being influenced by capitalist bribery! All thinking, according to Marxism on social matters, (even on scientific matters), is motivated directly or indirectly by the economic motive of class interest. There is no possibility of objective thinking according to orthodox Marxism, thinking inspired by reality as it is and verifiable by independent persons anywhere. That is why we find that Soviet Russia controls even the substance of scientific thinking, the ultimate ideas supposed to the discovery of scientists. Lisenko is an example who tried to sustain official doctrine (in despite of scientific evidence) in obedience to official dictat. Even novelists and poets are subjected to dictation as to how they should deal with their subject matter! The aim in Partism in every intellectual activity–including even history which is re-written to suit the changing ideology of the men in power!

This way lie the stagnation and death of culture and civilization.

Even in the United States which retains such a large measure of free world ideals, thoughtful observers are noting the ever lengthening shadow of Government.

The Rev. Ermund A Opitz, a writer in the Foundation for Economic Education of Irvington-on-Hudson, New York, has dealt with this topic in a leaflet of that name. He points out that the government of the United States has been steadily encroaching on private life for years now. He instances the fact that in 1947 the federal government contributed as much as half the entire budget of all university expenses. And if lower levels of education were included, the percentage of government expenses would extend to 90%!

Mr. Chodorov and Mr. Read and others have shown how nearly a third of the income of the people is annexed by governments at various levels and how a tenth of all employees in the nation belong to government service.

Under the name of welfare, federal expenditures are constantly increasing, even Republican Party presidents like Eisenhower having to spend federal money on welfare like old age pensions and to retain the vast price floors to support agriculture and enrich farmers at the expense of the country! The sums involved are astronomical and free competition has been excluded effectively since before the war in this field ever since the Agricultural Adjustment Administrative Act of the New Deal President Roosevelt. And democracy, anxious to cater to voters has failed to return to private enterprise and risk-taking in farming, in spite of the national philosophy of free, private enterprise to which all classes of Americans except communists pay tribute in conversation and writing.

How far the trend has gone in coloring the thought of educated persons in our country as well, thanks largely to the example of Prime Minister Nehru, was brought vividly home to me in a recent conversation with two persons–one a high railway official and the other a professor from Patna, just returned from a doctorate training in the USA in economics and labour welfare. Both repudiated the wisdom of returning public enterprises started by government (on account of the unpreparedness of private industrialists to start certain lines of industry on their own) I point out that the pre-independence administration of Mysore under able Dewans like Dr. M. V. Visweswaria and Shri Mirza Ismail had inaugurated the practice of returning successful government concerns to private shareholders and joint stock companies. This policy releases public funds for re-investment in new concerns of a pioneering nature. It also educates citizens in economic responsibility, integrity and the management skills needed for success in industry. Such educative influence is part of the idea of statesmanship in the old days before Leftism overwhelmed all public policy and private thinking.

The two gentleman referred to above reacted strongly and refused to concede the wisdom of the policy proposed. They thought that it was necessary for government to retain economic power to prevent concentration of power in the hands of tycoons! They forgot that their view involved a concentration of both economic and political or police power in the hands of the same governing groups! This is worse in every way!

**The Lengthening Shadow of Government**

Birlas and Tatas cannot imprison citizens and harm to the extreme extent that government can! Those who offend the governing groups will have to pay dearly for their temerity and independence of mind in one way or other.

It is to be hoped that statistics will study and show to what extend government power has penetrated beyond healthy limits in India. What is the percentage of national income annexed by government by way of taxes? What is the extent of the proliferation of the bureaucracy? It is said that from an expenditure of Rs.35 crores on the Secretariat in 1947, we have today the astronomical figure of Rs. 250 crores on Central Government staff!

Committees and delegations are becoming innumerable and incessant. Every day we hear of new bodies of the bureaucracy being formed at the public expense.

The control of Government even over spheres not taken directly under official auspices and management is also extending. Indeed Government intervention in private industry and commerce is so all-pervasive that even the government has been constrained to appoint a committee to estimate how much of all this is necessary and how much supererogatory! The number of forms to be filled up and the number of offices to be negotiated with by businessmen has grown to fantastic proportion. A World Bank official was constrained to advise the Government of India that this ubiquitous and vexatious control of enterprise and management should be decreased in order to give the much-needed elbow-room to them in the interests of efficiency. Economic freedom seems to be a term absent altogether in the vocabulary of officialdom!

After the nationalization of the Imperial Bank and Life Insurance, Government are reported to be anxious to annex fire and general insurance as well. They are reported–as they are advised by fellow travelling ‘economists’–to be preparing to nationalize all banking!

Though they have left private sector in other fields like textiles, sugar, cement and steel theoretically free, these are controlled to such an extent that they are hamstrung and for all practical purposes they are as bad as government-owned industries. Their prices are controlled and their every activity is under the regulation of the government.

There is a great danger in such omnivorous state control of industries. It gives room for corrupt practices by the ruling party. It appears (it is learnt from a sugar cane expert and retired director of agriculture) that by raising the export price of sugar by one anna per maund, the sale proceeds rose to 21 crores of rupees! It is anybody’s guess as to how much of this windfall was contributed to party funds! The ruling party can thus use the price-fixing machinery and power to enhance its funds.

To prevent this, earnest democrats have been urging the party and government to rescind the legal permission given to companies to contribute to party funds. Such a practice does not exist anywhere and is explicitly prohibited in the United States of America.

A strong and insuperable objection to such unlimited exercise of power by the Government, particularly in economic affairs, is that the practice extends the sphere of violence operating on the citizen in society.

Violence impinging on human beings is inherently evil. As Mr. (Leonard) Read demonstrates elaborately in his *Government–An Ideal Concept*, every individual is endowed by nature with a certain quantum of energy which flows spontaneously only at the impulse of his own personal will and desire. Any threat or application of force thwarting him from doing what he wishes is something that prevent the free self-expression of his energy motivated by his own aims. It is only self-determined activities that bring joy and fulfilment to human selves.

Deprecating such misuse of State power even by democrats, libertarians advise that the State should be relegated to its proper and specific function of maintaining law and order and securing the defense of the country from invasion. It should have functions and powers strictly limited to such securing of justice. The rest of the individual’s life should be completely free to be led as he thinks best. Even welfare should not be made an excuse for State interference. This doctrine of Limited Government needs to be studied and popularized in India at the present grace juncture. The task needs much penetrating thinking from many points of view. Libertarian literature, American and Indian and British, will be of much benefit to thinkers and party leaders in opposition.

*You can read the original, unabridged piece [here](http://indianliberals.in/uploads/periodicals/PDF_93_fwn95h19601201.pdf).* *Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.* 

* * *

**About Ujwal Batra**

## #ThrowbackThursday: B R Shenoy–East and West Berlin: A Study in Free vs Controlled Economy (1960)

Original: https://www.spontaneousorder.in/p/tbt-shenoy-berlin

Author: Spontaneous Order

Published: 2015-05-28T18:56:00.000Z

Topics: free-markets, central-planning, economic-freedom, german-economic-miracle

> In this article, B R Shenoy—one of India’s most prominent free-market economists; talks about the differences in the economic models followed by East and West Germany. Professor Ludwig Erhard—considered to be the architect of the German ‘Economic

**Summary:**

B R Shenoy, a prominent Indian free-market economist, contrasts the prosperity of West Berlin under Ludwig Erhard's free-market policies with the drabness of East Berlin under communist central planning, urging economists, administrators, and Indian policymakers to witness this as proof of freedom's superiority over controls and five-year plans. Post-WWII destruction was equal, but West Berlin features complete rebuilding, booming shops stocked with goods, heavy automobile traffic including worker-owned cars, and vibrant residential areas, while East Berlin shows rubble, shabby buildings, bus-dominated streets, sparse old cars, and inferior, pricier goods. East Berliners cross freely to shop in the West, paying with West marks at a free-market rate of 1:4.25 despite official parity, and ongoing emigration—especially of 18-45-year-olds, technicians, and intellectuals—depletes East Germany's population. West Germany's success isn't due to foreign aid (only 6.7% of 1948-1954 investment vs. India's 23% in early Second Plan) but spontaneous efforts; GNP grew 17% annually over the decade, wages rose 90%, exports ranked second globally, and shares rose 28% yearly amid stability. Shenoy concludes that economic freedom, not planning, drives sustained progress, as seen in West Germany outpacing East since Erhard's 1948 deregulation.

**Key points:**

- West Berlin's rapid rebuilding, consumer abundance, and worker car ownership starkly contrast East Berlin's rubble, shortages, and neglect under central planning.
- Ongoing emigration from East to West Berlin, mainly young professionals, proves workers prefer freedom despite leaving assets behind.
- West Germany's prosperity stems from free markets, not foreign aid (6.7% of investment), with GNP up 17% annually and wages up 90%.
- Indian policymakers should reject five-year plans, as Berlin demonstrates freedom's superiority over controls for economic growth.

**By Ujwal Batra**

* * *

*In this article, B R Shenoy—one of India’s most prominent free-market economists; talks about the differences in the economic models followed by East and West Germany. Professor Ludwig Erhard—considered to be the architect of the German ‘Economic Miracle’, steered West Germany to a path of economic recovery after World War II guided by a remarkably free-market economy; while East Germany followed the path of communism. The differences between the economic fate and the standard of living of people between these countries were stark and telling. In this article, Shenoy again demonstrates the futility of planning and centrally controlled economies; and remarks that the German experience serves as a reminder to India and its policy-makers of the necessity of economic freedom.*

*This article was published in the August 15, 1960 issue of [‘The Indian Libertarian’.](http://indianliberals.in/periodicals-details/?id=1)*

[

![B R Shenoy pic](https://spontaneousorder.in/wp-content/uploads/2015/05/B-R-Shenoy-pic-450x380.jpg "B R Shenoy pic")



](https://spontaneousorder.in/wp-content/uploads/2015/05/B-R-Shenoy-pic.jpg)

A visit to East and West Berlin is, as I now find it, a pilgrimage. I would recommend it to economists who are still wavering on the relative potentialities of freedom and state regulation, to administrators who think that controls are indispensable for accelerated economic growth and to ministers, legislators and politicians who believe that India’s economic salvation is not possible without centrally directed five-year plans.

The contrast between the two Berlins cannot miss the attention of a school child. West Berlin, though an island within East Germany, is an integral part of West German economy and shares the latter’s prosperity. Destruction through bombing was impartial to the two parts of the city. Rebuilding is virtually complete in West Berlin. Vacant plots are often used to raise crops. Buildings still in damaged condition are rare. The residential areas including flats for workers–of varying floor space, they are not shawls–and the shopping centers radiate boom conditions. In East Berlin a good part of the destruction still remains; twisted iron, broken walls and heaped up rubble are common enough sights. The new structures, especially the pre-fabricated workers’ tenements, look drab.

The main thoroughfares of West Berlin are near jammed with prosperous’ looking automobile traffic, the German make of cars, big and small, being much in evidence. Buses and trams dominate the thoroughfares in East Berlin; other automobiles, generally old and small cars, are in much smaller numbers than in West Berlin. One notices cars parked in front of workers’ quarters in West Berlin. The new phenomenon of workers owning cars, which West Berlin shares with U.S.A and many parts of Europe, is unknown in East Berlin. In contrast with what one sees in West Berlin, the buildings here are generally grey from neglect, the furnishings lack in brightness and quality, and the roads and pavements are shabby somewhat as in our cities.

The contrast applies, too, to shop windows. The departmental stores in West Berlin are cramming with wearing apparel, other personal effects and a multiplicity of household equipment, temptingly displayed. Nothing at all comparable is visible in East Berlin. East Berliners visit West Berlin to take back un-noticed whatever goods they can buy. The food shops in East Berlin exhibit cheap articles in indifferent wrappers or containers and the prices for comparable items, despite the poor quality, are noticeably higher than in West Berlin. Walking into a restaurant in East Berlin, one finds the same contrast. The stranger’s doubt whether payments will be received in West marks is soon dispelled. They are accepted with a twinkle in the eye. Coffee and ice-cream cost 3.10 marks; to economise on foreign exchange. Coffee is heavily mixed with synthetics: genuine stuff alone is served in West Berlin and it may be had for half the price.

The frontier between East and West Berlin is nominal. There are no passport formalities as a normal practice. Foreigners in particular, may move across the frontier quite freely. Generally, there are police guards only on the Eastern side. On the underground railway, movement between East and West is virtually free; the change in the uninformed station staff indicates the passion of the frontier. The generally shabby clothes of the people coming in is another evidence of the entry into East Berlin.

Visiting East Berlin gives the impression of visiting a prison camp. The people do not seem to feel free. In striking contrast with the cordiality of West Berliners, they show an unwillingness to talk to strangers, generally taking shelter behind the plea that they do not understand English. At frequent intervals one comes across on the pavements uniformed police and military strutting along. Apart from the white armed traffic police and the police in the routine patrol cars, uniformed men are rarely seen on West Berlin roads.

But Communist party men are eloquent. They have a ready explanation for the contrast between East and West Berlin. West Berlin is part of the dollar empire! For propaganda effect, American capitalists are pouring money into West Berlin: once this blood transfusion ceases, West German economy will collapse. East German prosperity, on the other hand, rests on solid foundation–hard and devoted work of East German workers. Though progress may be slow, it will endure.

This is a grossly misleading explanation. It is not true that West German prosperity rests on foreign capital; nor is it superficial and temporary. Though foreign aid played an important part in speeding up reconstruction in the initial phase, even so, aid between April 1948 and the end of 1954 was of the order of 6.7 per cent of the gross investment of the period. Foreign aid has played a much more vital role in the progress of planning in India; it accounted for 23 per cent of the investment in the public and the corporate private sector in the first three years on the Second Plan. It is much more true to facts to say that, as in the case of Canada, continued German prosperity attracted foreign capital rather than that this prosperity rested on foreign capital. In recent years, there has been a new outflow of German capital, which amounted to DM 1.64 billion (Rs. 185 crores) in 1959, and yet German prosperity continues on the up-trend. Share values in Germany since 1951, keeping pace with the national product, have risen at an annual rate of 28 per cent, in a back-ground of comparative price stability. This would not happen if the economy lacked in soundness and stability.

For an explanation of the contrast of the two Berlins, we must look deeper: the main explanation lies in the divergent political systems. The people being the same, there is no difference in talent, technological skill and aspirations of the residents of the two parts of the city. In West Berlin efforts are spontaneous and self-directed by free men, under the urge to go ahead. In East Berlin effort is centrally directed by Communist planners, who do not lack in determination for speedy progress; the urge to progress is particularly strong, if only to demonstrate the potentialities of communism to foreign visitors of the two Berlins. The contrast in prosperity is convincing proof of the superiority of the forces of freedom over centralised planning. It is difficult to resist the inference that workers in East Berlin, deprived of the incentives of full property rights over the fruits of one’s efforts, are loath to put in their best.

This is reflected in the unabated emigration from East to West Berlin. The emigrants have to leave behind all their assets, save the clothing they wear and such valuables as they may carry unobtrusively. The route they take is usually the underground railway. Once in West Berlin, the emigrants are assured of hospitality at the reception centre at Marienfelds. Depending on choice, job availability and background, they then leave to the several parts of West Germany. The largest bulk of the emigrants is within the age groups of 18 and 45; the urge to leave is great among technicians, professional men and intellectuals. While the population of West Germany is growing, that of East Germany is declining. Communists can never give a satisfactory explanation to this strange phenomenon of workers by self choice, abandoning their paradise, leaving behind kith, kin and possessions to start life all anew is a decaying community dominated by capitalist exploiters.

The flow of traffic, human and financial, is pre-dominantly one way, from East to West Berlin. This is reflected in the glut of supply of East makes and in the exchange rate in the free market. One West mark buys 4 2∕4 East Marks, the official rate being one to one. Conversion at the free rate may be effected at banks or money changes at important railway stations in West Berlin. This explains the twinkle in the eye when East Berliners receive payments in West Marks at the official rate.

Theaters, news-stands and book-shops in East Berlin exhibit home products and propaganda material on the achievements of communism. For a breath of fresh air and for news, literature and amusements of the free world East Berliners visit West Berlin. Out of sympathy for them, Bonn and West Berlin subsidize cinema houses to permit their accepting payments at par in East Marks, the amount of subsidy being in the order of 10 million marks a year.

The contrast in achievements, which has widened with time, is a heavy strain on communist nerves, and, doubtless, is a factor in the ‘Berlin Problem.’ To begin with East Berlin was better fed and clothed than West Berlin. With the coming of Professor Erhard’s free market policies in 1948–when he threw “into the waste paper basket, in one swoop, hundreds of decrees promulgating controls and prices:–West German economy began to boom and soon overtook East Germany.

Statistics of West German progress testify eloquently the superiority of the forces of freedom. The gross national product of West Germany expanded at an annual rate of 17 per cent during the last decade–a world record for a sustained rise at this high rate–and West German wages rose, during the same interval, by about 90 per cent. The international payments of the country were chronically in deficit, calling for doles, when ‘planning’ prevailed; since the restoration of freedom to the producer and the consumer, the payments position has shown rising surpluses. German exports forging ahead from the fifth to the second place in the world.

That an innate conflict exists between freedom and progress is a delusion which is clouding the vision of policy makers in many countries, including our own. Policies ensuring economic freedom, in every case, have rescued economies from semi-stagnation to which controls and statism had condemned them. The examples of West Germany, Belgium, Switzerland, Italy, Japan, Hong-Kong and, more recently, France demonstrate this. West Germany has achieved, in less than ten years, more economic well-being for the citizen after 40 years of ruthless regimentation. Communism makes for sectoral, not general progress, significantly in areas where freedom is allowed full play as in the sciences.

*You can access the original article [here.](http://indianliberals.in/uploads/periodicals/PDF_86_r3t3z919600815.pdf) Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.* 

* * *

**About Ujwal Batra**

## S V Raju: The Man who held Freedom First

Original: https://www.spontaneousorder.in/p/s-v-raju-the-man-who-held-freedom-first

Author: Spontaneous Order

Published: 2015-05-19T17:19:32.000Z

Topics: indian-liberalism, swatantra-party, freedom-first, ccs

> I first came to know about S V Raju as an editor of Freedom First, the magazine that I have been subscribing for more than 20 years. He was the person who kept the flame of liberalism and the Swatantra Party alive in India. As a young liberal, the flame..

**Summary:**

Parth Shah pays tribute to S V Raju, editor of Freedom First magazine, whom he first knew as the steadfast guardian of liberalism and the Swatantra Party's legacy in India, earning deep respect from young liberals like himself after over 20 years of subscription. Despite debates where Raju viewed the Centre for Civil Society (CCS) as more libertarian than classically liberal, he generously invited Shah to Indian Liberal Group meetings and engaged in extended discussions on crafting an Indian version of liberalism amid contemporary challenges, sharing stories of liberalism's recent history. Their final conversation enthusiastically endorsed CCS's new digital archive project at www.indianliberals.in and planned a lengthy video interview for Raju to narrate his experiences with Indian liberalism and the Swatantra Party. Shah hopes that Freedom First, the Forum of Free Enterprise, and the Project on Economic Freedom will ardently carry forward Raju's flame-keeping mission, underscoring the classical-liberal commitment to preserving intellectual traditions against state dominance.

**Key points:**

- S V Raju preserved the flame of Indian liberalism and Swatantra Party legacy as editor of Freedom First.
- Raju debated CCS's libertarian leanings but invited Parth Shah to Indian Liberal Group meetings for discussions on modern Indian liberalism.
- Raju endorsed CCS's digital archive of Indian liberals (indianliberals.in) and planned a video interview on his experiences.
- Shah urges Freedom First, Forum of Free Enterprise, and Project on Economic Freedom to continue Raju's work.

**By Parth Shah**

* * *

I first came to know about S V Raju as an editor of *Freedom First*, the magazine that I have been subscribing for more than 20 years. He was the person who kept the flame of liberalism and the Swatantra Party alive in India. As a young liberal, the flame-keeper commanded deep respect and awe.

As CCS got established, Mr Raju felt that we were more libertarian than liberal. We often discussed and debated what could be an Indian version of liberalism in current times. Despite these debates, he generously invited me to participate in the Indian Liberal Group meetings. He always found time to engage in long discussions, regale stories about his experiences and encounters and help me understand the recent history of liberalism in India.

Our last discussion was about the new CCS project—creating a digital archive of Indian liberals (www.indianliberals.in), which he very enthusiastically endorsed. We talked about doing a longish video interview where he could freely narrate his story of Indian liberalism and Swatantra Party. As he kept the flame alive, I hope that the people at *Freedom First*, the Forum of Free Enterprise and the Project on Economic Freedom would ardently continue.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## State’s Clampdown on Civil Society Organizations is Unjustified

Original: https://www.spontaneousorder.in/p/civil-clampdown-unjustified

Author: Spontaneous Order

Published: 2015-05-13T17:32:59.000Z

Topics: civil-society, freedom-of-association, foreign-funding, ngo-regulation

> by Amit Chandra This article originally appeared in the Hindi daily ‘Rajasthan Patrika’ and can be accessed here. The government’s recent clampdown on Civil Society organizations (Greenpeace, Ford and thousands of other NGOs) in the last few weeks t

**Summary:**

The Indian government's clampdown on civil society organizations like Greenpeace and Ford Foundation is unjustified and threatens fundamental freedoms, argues Amit Chandra from a classical-liberal perspective. The state has no business regulating voluntary associations, as the Constitution guarantees freedom of association and expression, which must be protected and expanded in a globalized world. Citizens can express discontent, even if funded abroad, and a democratic society requires diverse viewpoints; the state's machinery should counter dissent through persuasion, not silencing. Labeling CSOs 'anti-development' is specious, especially when farmer protests against land acquisition for inadequate compensation are branded as such. Suspecting foreign contributions as hidden agendas is outdated, inconsistent with the government's promotion of foreign investment via 'Make in India'. Corporates and international bodies like World Bank also lobby policy, yet face no such scrutiny. India needs evidence-based policymaking where CSOs play a vital role; unfair practices should be punished fairly under clear rules, not via arbitrary clampdowns on all foreign aid and NGOs.

**Key points:**

- The Constitution's guarantees of freedom of association and expression preclude state regulation of voluntary citizen groups, even with foreign funding.
- Branding CSO protests as 'anti-development' masks state failures, such as unfair land acquisitions from farmers.
- Foreign contributions to CSOs should not be suspected when the government actively courts FDI through 'Make in India'.
- Policymaking must shift to evidence-based approaches with CSO input, punishing specific violations fairly rather than imposing blanket restrictions on NGOs.

**By Ujwal Batra**

* * *

**by Amit Chandra**

*This article originally appeared in the Hindi daily ‘Rajasthan Patrika’ and can be accessed [here](http://epaper.patrika.com/497179/Rajasthan-Patrika-Jaipur/11-05-2015#page/8/2).*

The government’s recent clampdown on Civil Society organizations (Greenpeace, Ford and thousands of other NGOs) in the last few weeks threatens to do real damage and is a grave cause for concern; and needs to be criticized in the strongest possible terms. Indeed, the state’s reservations against civil society organizations and its argument for monitoring their affairs are without substance and merit.

It is not the state’s business to regulate voluntary associations. Here are my reasons–

**1\. Freedom of Association and Expression**

Our constitution guarantees a very fundamental freedom to each citizen—the freedom to associate, or not, with any individual, group or organization. In today’s globalized world, the citizens’ right to association needs to be protected and expanded instead of being curtailed.

Along with this our constitution guarantees the freedom of expression. Any citizen, with reasons and cause to be discontented has the freedom to express that discontent. The ideas, research and money may well come from abroad, so long as the people raising the concerns and expressing their discontent are citizens of the nation.

A democratic society needs to accommodate all points of views. The government has accused these organizations of being manipulative and misrepresentative of its affairs and of propagating false information; whereas such an accusation sheds light on the state’s own corruption and inabilities. The state has its own elaborate machinery to spread and propagate its views–why should it then try to silence any voice of dissent that challenges it? Should the state not instead focus to take its message to the masses and connecting with them to be a part of the growth story

**2\. Are Civil Society Organizations ‘Anti-Development?’’**

To lend credence to its actions, the state has started branding the actions of civil society organizations as ‘anti-development’. Now, it is pertinent for citizens to ask what the government means by development; and who is benefiting from this ‘development’—especially at a time when the state brands the acquisition of farmers’ land as development, and any protests seeking fair compensation as ‘anti-development.

**3\. Foreign Contribution**

Are we still living in an era where we are to suspect any foreign contribution as part of a ‘hidden agenda’ of foreign players? If so, we should look at all foreign contributions, businesses and entities with the same suspicion!  This at a time when our government itself is promoting foreign investment—with our Prime Minister travelling abroad everywhere building a campaign and trying to sell his ‘Make in India’ vision.

**4\. Lobby for Policy Making**

If a civil society organization can resort to unfair means to influence state laws and policy (as is feared), so can corporates and big businesses. Employing that line of reasoning, even assistance from World Bank, IMF, UNDP and other such ‘big sharks’ in international politics should be stopped immediately, lest they have a bearing on our laws and policies.

The nation needs to move from intention-based policy making to evidence-based policy making, and individuals and civil society organizations are a vital part of this process. If indeed an individual or organization is found guilty of unfair practices, they must be punished. But the grounds for this must be laid out in advance and be fair, and not be based on the whims and fancies of the people in power. It would however, be wrong to clampdown on all foreign assistance and NGOs.

* * *

**About Ujwal Batra**

## #ThrowbackThursday: A G Mulgaokar — Is Right to Property not Fundamental? (1969)

Original: https://www.spontaneousorder.in/p/tbt-mulgaokar-property-rights

Author: Spontaneous Order

Published: 2015-04-23T17:15:18.000Z

Topics: property-rights, fundamental-rights, indian-constitution, constitutional-amendments

> This article appeared in a publication of ‘Forum of Free Enterprise.’ Originally written in 1969, it was authored by A G Mulgaokar—an advocate and authority on constitutional law. At the time, the Right to Property was a Fundamental Right in the con

**Summary:**

A.G. Mulgaokar's 1969 article, republished by Spontaneous Order, argues from a classical-liberal standpoint that the Right to Property, enshrined as a Fundamental Right in India's Constitution, is being unconstitutionally undermined by parliamentary amendments, rendering all fundamental rights precarious. He contends that true fundamental rights must be inherent and unalterable, not subject to ordinary legislative whims, as they encompass personal freedom, speech, profession, and property acquisition. Morally, property rights align with the human instinct for self-preservation, evident even in children clinging to toys or adults saving for dependents; violating this leads to evasion, as seen in prohibition's failures, and even the USSR Constitution recognizes it. Economically, individual savings via property bolster national wealth; eroding these rights risks dislocation akin to historical calamities like the Delhi-to-Daulatabad forced migration. Legally, a recent Supreme Court decision holds that Parliament lacks power under Articles 368, 245, and 13(2) to amend the Constitution in ways abridging fundamental rights, as amendments are 'law' subject to invalidation. Mulgaokar invokes British precedent—Asquith's 1910 elections on constitutional changes—to insist President Giri withhold assent without a fresh electoral mandate, affirming property rights' enduring relevance amid today's land acquisition debates focused narrowly on compensation rather than rights affirmation.

**Key points:**

- Fundamental rights like property cannot be abridged by ordinary legislation or amendments without undermining their inherent nature.
- Eroding property rights contradicts human self-preservation instincts, leading to legal evasions and economic dislocation.
- Supreme Court ruled that constitutional amendments abridging fundamental rights are invalid under Article 13(2).
- Major constitutional changes require explicit electoral mandates, as per British parliamentary democracy precedents.
- Strengthening property rights is essential for individual savings, national wealth, and social stability.

**By Ujwal Batra**

* * *

*This article appeared in a publication of ‘Forum of Free Enterprise.’ Originally written in 1969, it was authored by A G Mulgaokar—an advocate and authority on constitutional law. At the time, the Right to Property was a Fundamental Right in the constitution; but was constantly being undermined by successive amendments. In our present discourse on Land Acquisition, the matter of debate has come to revolve around the adequacy of compensation and how acquisition can be made fair—with no real debate on strengthening and affirming property rights. In this piece, Mulgaokar talked about the importance of property rights and how our politicians and legislators were undermining these. What he said then remains relevant even today*.

The Indian Constitution in embodying in a separate chapter certain rights including those to personal freedom and to private property and designating this as the Chapter of Fundamental Rights recognised certain cardinal principles, some explicitly and others by implication. What is fundamental if it is not inherent and unalterable; and how much fundamental is a right if it can be restricted or taken away by just an ordinary legislative process as the fancy takes some legislators?

The issue involves not only legal or constitutional but moral as well as social and economic considerations. If all these considerations are fully and dispassionately weighed it will be seen that the move is an altogether retrograde step. The fundamental rights guaranteed to the Indian citizen in the Constitution are broadly his life and freedom, certain liberties like free speech and right to practice any profession or trade, and lastly acquire and hold property. It should be remembered that the term property covers a very wide field, but it is not necessary to go into all its details for the purposes of our discussion. What is attempted by the contemplated move is for the present to remove the right to acquire and hold property from those guaranteed to the citizen in the Constitution. How long, then, before the others are attacked? Perhaps one by one, as the whim or fancy takes the necessary number of legislators. Take the right to move to any place in the union territory given to every citizen. Is it difficult to imagine that it will be one of the next ones to be attacked? At this rate no right can be considered fundamental. If anyone can be taken away, so can all. Now the Indian Constitution in guaranteeing these various rights and freedom to the Indian citizen has not placed them in a totally rigid and inviolate form. They are subject to abridgement and even suspension provided this is reasonable and in public interest. So if the public interest necessitates it and it is reasonably done, a fundamental right can be by legislation restricted. If in spite of all this the move is to be persisted in, then who can believe in the fundamentalness of these fundamental rights? This, then, is the moral issue.

There is also another aspect to this moral issue which no sensible legislator can afford to omit from his consideration. Nature has planted in Man the instinct of self-preservation. We see evidence of it even in a child when it refuses to part with a battered toy and in an adult when he saves for his own future or for his dependants. The result of his savings is his property and he is entitled to do what he likes with it subject to what is known as social control. (Even the paper Constitution of the U.S.S.R. recognises this right.) This world-wide, not excluding communist countries, recognition is as much due to the natural instinct planted in man as also because thereby the national economy is strengthened. As the individual citizen saves he adds to national wealth. Therefore, if you take away the individual’s rights over his property, two results can be expected to follow. We have already seen what disastrous results have followed from prohibition. This is what naturally happens when an attempt is made to fly in the face of public opinion or a natural human instinct. This is exactly what will happen, there will be widespread evasions and breaches of the law. In the second place there will be, if this step even partially achieves its desired results, so much dislocation in the country’s economic structure as to prove a national calamity. Indian history tells of a Delhi King transferring his seat from Delhi to Daulatabad and forcing the whole population to follow suit. The disastrous results that followed have to be read to be believed.

Having considered the moral and economic aspects of the question, it only remains briefly to consider the legal or constitutional aspect of the matter. By a recent decision of the Supreme Court it has been held that Parliament has no power to amend the Constitution so as to take away or abridge the fundamental rights. The Court has however expressly saved from the application of this ruling all the earlier amendments to the Constitution on the doctrine of prospective overruling. It held that under Art. 368 the Parliament has the power to amend the Constitution. But under 13(2) no law which takes away or abridges fundamental  rights is valid. It answers the question whether an amendment is law affirmatively. Five of the six judges who expressed the majority view hold that amendment is made in exercise of residuary power under Art. 245 and Art. 368 prescribes the procedure to be followed. One judge, however, held that the power to amend was explicitly given in Art. 368. But as we see, in any case, as the result of an amendment to a law is also a law and therefore, if it abridges a fundamental right, it must attract the application of Art., 13(2) which prohibits the making of any law which takes away a fundamental right. The only alternative therefore would be the summoning of another Constituent Assembly charged with the specific task of either amending the Constitution or writing up another.

Here, again, another very important constitutional consideration arises. It cannot be said that the last general election was fought by any party on the issue of amendment of the Constitution. It is a cardinal principle of parliamentary democracy that no bill causing major constitutional change should be allowed to be brought in the life of a parliament unless this was placed before the electorate at the election time by the party concerned. Those who know their Constitutional Law will remember that Asquith fought a general election in January 1910 (in Edward VII’s lifetime) and came to power. The issue had been the revolutionary Budget of Lloyd George which the House of Lords was blocking. When Asquith approached George V (Edward VII had died in May 1916) to promise to create enough number of peers to ensure the successful passage of the Budget through the Lords, the King, though only a few weeks on the throne, insisted that Asquith face another general election on the specific issues of Budget and amendment of the powers of the Rouse of Lords. So that, although a general election had only taken place in January 1910, the ruling Liberal Party under Asquith had to fight another general election within a few months (in October 1910) and the country had to face all the inevitable dislocation and expense. That Asquith won the election and the two measures, the Budget and the Parliament Act, were duly passed is a matter of history. My object in recounting this important event in the constitutional history of British democracy is to point out the great lesson it holds for this country but in a great sense for President Giri. It is his bounden duty to warn the Prime Minister that whatever the Supreme Court does or does not do, he will be unable to accord his assent to an Act amending the Constitution in such a major way unless the people have had a chance of declaring their wishes in the matter in a general election.

*You can access the original article [here](http://indianliberals.in/uploads/periodicals/PDF_241_01lw6iIs%20Right%20to%20property%20not%20Fundamental.pdf). Visit [indianliberals.in](http://indianliberals.in/) for more works by Indian Liberals dating back to the 19th Century.* 

* * *

**About Ujwal Batra**

## Ban this Article!

Original: https://www.spontaneousorder.in/p/ban-this-article

Author: Spontaneous Order

Published: 2015-04-10T18:34:10.000Z

Topics: censorship, beef-ban, free-markets, personal-freedom

> Picture this: You are sharing your room with someone who is probably your best friend by the day, but by the night s/he is the most evil person…because your friend snores a lot at night. Here is the solution: BAN. I wear colourful and funky socks which

**Summary:**

Sadaf Hussain satirically critiques India's pervasive culture of bans, from snoring roommates and colorful socks to sugar and loud talking, arguing that such impositions absurdly override personal choice. He examines real bans on beef consumption, noting they disregard consumers' sentiments and preferences in a secular nation, while economically undermining farmers by eliminating resale value for non-milking cattle, as per Harish Damodaran's analysis—leading to abandonment rather than sustenance. On censorship, Hussain decries government dictates on movies (e.g., censored words in Fear Factor and Fast & Furious 7), roasts (AIB), documentaries (India's Daughter), and books (The Satanic Verses, Madhorubhagan), which fail to curb awareness, foster hypocrisy among elites, spur piracy, and limit public information—reflecting ostrich-like denial of societal realities. Bans presuppose predictable human behavior, ignoring individual agency; instead, the author champions free markets, spontaneous order, and voluntary exchange under simple rules, quoting Hayek against hubristic social engineering and contrasting Hitler's gradual freedom erosion. The classical-liberal call: reject bans to preserve liberty and enable self-directed choices.

**Key points:**

- Bans like beef prohibitions ignore consumers' rights in a secular India and economically disincentivize farmers from maintaining cattle post-milking.
- Censorship of media and books restricts information access, promotes hypocrisy, and drives piracy without altering societal awareness.
- Human behavior defies top-down control; free markets and voluntary exchange foster better outcomes than iterative government interventions.
- Choose Hayek's humility over Hitler's incremental tyranny to avoid irreversible loss of freedoms.

**By Sadaf Hussain**

* * *

Picture this: You are sharing your room with someone who is probably your best friend by the day, but by the night s/he is the most evil person…because your friend snores a lot at night. Here is the solution: **BAN.** I wear colourful and funky socks which might have some chances of affecting someone’s vision.The solution is to **BAN** colourful socks**.** One of my colleagues talks very loudly, it is harmful for my eardrums. The solution is: **BAN** talking loudly. Having a lot of sugar products can cause diabetes. The solution: **BAN** sugar**.**

You can say “but that is absurd, if you have a problem don’t eat sugar, or get a medical check up of your friend who snores!”. But wait a second, we are living in a country where if you have power and if you think that banning is the solution then probably you can!

In the recent era we have been told (or rather, instructed) what to say and what not to say, whom to have sex with and whom not to, whom to marry, what to eat, when to drink and smoke and chew, what kind of movies to watch, what to read, how to dress and when to go out. Let us explore few of these BANS one by one.

**What to Eat:** As a disclaimer, I don’t eat red meat. Does that mean I should impose my views on others? A lot of people have talked about sentiments related with the eating of beef—in so far as it hurts the sentiments of those whose religion forbids it. Then what about the sentiments and preference of those who actually consume it? Another argument could be (probably from the extremist), India is a Hindu nation but the last time I checked our constitution, it clearly said we are a secular nation and that, in my opinion, means a nation without an official religion.

Economically speaking, we have an abundance of something because there is some value in sustaining it. Chicken could be a good example. We consume a lot of chicken meat or eggs and hence it is valuable to have farm and grow this as business, whereas, as a recent [article](http://indianexpress.com/article/opinion/columns/a-reality-check-for-gau-rakshaks/1/) by Harish Damodaran shows, in majority of India, farmers own a lot of cattle, they usually milk the cow till they stop producing more and they become useless after a point. Even if the farmer may not slaughter or eat buffalo meat himself, so long as others do, it at least guarantees a resale value for the animal. If there is no value in sustaining it, (as the beef ban has done), the farmer has no incentive to keep the cow healthy and thriving, but simply to abandon it once it is no longer useful.

**Censorship: What to watch/read:** I was recently watching Fear Factor (Indian version) and Fast & Furious 7 which purposefully censored “THE WORDS” (I’ll avoid using them here in case I’m asked to censor this blog). I was curious as to what purpose censoring serves anyway. It doesn’t stop me being aware of abusive language. The hypocrisy is that censorship is only for the common people and not for people in authority because as we see they are able to speak uninhibited. Telling us what books we should read, what movies we should we watch isn’t the government’s job. And why should it be anway, what is the purpose? Banning AIB Roast, India’s Daughter, Fifty Shades of Grey or books like The Satanic Verses or Madhorubhagan hasn’t stopped people watching the movies or reading the books (Piracy, zindabad!). Movies or books derive their content from society, they depict a certain kind of society and banning them showcases one’s ostrich behaviour. Also, it restricts how much information we as a public have access to—why should the government decide what we get to know?

The main problem with bans and regulation is that it presupposes predictability in human behaviour. Human beings aren’t pawns on a chess board, they have got their own minds and capacity to think for themselves, their own dreams and desires. [Free markets](http://en.wikipedia.org/wiki/Free_market), [spontaneous order](http://en.wikipedia.org/wiki/Spontaneous_order) and [voluntary exchange](http://en.wikipedia.org/wiki/Voluntary_exchange) lead to a society where they are able to exercise their minds and make their own choices. What we need are simple rules and equations and not interventions after interventions.

A long time back a great hero of the world, Adolf Hitler said “The best way to take control over a people and control them utterly is to take a little of their freedom at a time, to erode rights by a thousand tiny and almost imperceptible reductions. In this way, the people will not see those rights and freedoms being removed until past the point at which these changes cannot be reversed.”

We can follow him, or we can follow F A Hayek “To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm.”

The choice is yours… or should I tell you whom to follow?

For fun, here’s a [video](https://www.youtube.com/watch?v=qjq4_3AQcZo) on India’s slew of bans.

* * *

**About Sadaf Hussain**

## Government must regulate Gyms, they are not WORKING OUT properly

Original: https://www.spontaneousorder.in/p/government-must-regulate-gyms-they-are-not-working-out-properly

Author: Spontaneous Order

Published: 2015-03-04T13:29:38.000Z

Topics: government-overreach, health-regulation, satire, personal-freedom

> The other day, while I was walking down to the gym to get my membership renewed, I noticed many different kinds of people—when I say different kinds I mean with respect to shapes and sizes. This got me thinking—India has a population of near 1.25 bill

**Summary:**

In a satirical piece, Sadaf Hussain mocks excessive government intervention by proposing the 'Gym Education and Regulation Authority of India' (GEAR India) to enforce nationwide fitness standards amid India's 1.25 billion population and Delhi's 16 million residents lacking optimal fitness, which he claims hampers productivity. GEAR would declare gym workouts (not home ones) an essential commodity under the 1955 Act, mandate one gym per kilometer, cap memberships at affordable levels (currently Rs 500-5000/month), ensure 'equitable distribution' of fit people for motivation, provide free 'Mid-Day Shakes Seva' protein shakes, and impose 25% reservations for the 'Unfit Section' (UFS), with non-compliance risking gym shutdowns. Funding via 2% gym tax plus 5% on the rich would subsidize access. Dismissing freedom concerns, the piece parodies interventionist logic, citing a satirical source to argue that curbing independence serves the 'greater good' of healthy human capital. From a classical-liberal lens, it exposes the absurdities of price controls, quotas, and mandates in personal health markets, akin to existing Indian policies.

**Key points:**

- Create GEAR India to define fitness norms and regulate gyms pan-India.
- Declare gym workouts essential commodities, mandate one per km, and cap prices for accessibility.
- Implement incentives like free protein shakes, equitable fit-person distribution, and 25% reservations for the unfit.
- Fund via gym taxes (2% general, 5% on rich) while rejecting freedom arguments for societal productivity.

**By Sadaf Hussain**

* * *

The other day, while I was walking down to the gym to get my membership renewed, I noticed many different kinds of people—when I say different kinds I mean with respect to shapes and sizes. This got me thinking—India has a population of near 1.25 billion and Delhi alone has close to 16 million. Yet the majority of our population are not at the optimum “fitness level” often falling above, or below it. In order to increase nation’s productivity, it is necessary to have Healthy Human Capital.

Now, the problem isn’t that we don’t have gyms. It is a manifold problem. Gyms are few, they are too expensive to afford, there is too high a population and very little incentive to hit the gym.

Two years of practicing gym have made me an authority on the subject, and I am going to propose a few solutions. I propose the creation of a new government organization **‘Gym Education and Regulation Authority of India’** (for simplicity, let’s call it **‘GEAR India’**) for a healthy life**.** GEAR India will mandate the norms to define healthy and unhealthy, fit and unfit, marginally fit and marginally unfit people.

Based on this, let us define their other roles briefly and then we all will lobby. Since I am based in Delhi, my evidence will be Delhi-based. Implementation, however, will be pan-India, since this is how all our policies are formed anyway.

**Role 1: Declare Work Outs an Essential Commodity**

GEAR India should declare work outs (and not ‘Home Work Out’), but Gym Work Outs as an essential commodity. Who doesn’t want a nice and well-toned, fit and attractive body? It is biologically proven that if you’re healthy you live long and you will live a happy life. Gym should come under Essential Commodities Act, 1955. *“The Act provides for the regulation and control of production, distribution and pricing of commodities which are declared as essential for maintaining or increasing supplies or for securing their equitable distribution and availability at fair prices”.*

**Role 2: Set a Neighborhood Criteria**  

There must be one gym at every 1 km distance, so that it is within the reach of every common man and easily accessible.   

**Role 3: Regulate Pricing**

It is simply unfair that different places in Delhi have different prices. On an average the price of gym membership varies from Rs 500-5000 per month. I can’t afford expensive gyms, so I pay Rs 2000/month, though I also have aspirations to join the higher-end Fitness First like gyms. Currently, the solution is that I go and ask my boss for more money, which I may or may not get. It would be better if GEAR India helped me by regulating the price and capping it at a level that is more accessible. This will make the gym affordable and *Aam Aadmi* (common-man)-centric. Once we announce this commodity as an ‘essential’, we don’t need to worry at all. This is not a new practice for the Government of India.

**Role 4: Follow an Incentive-Based Approach**

Incentives are that all we need, be it for education or for going to the gym. Though inside a gym you have a very different kinds of incentive/motivation. Aside from a well maintained gym, we also need well maintained individuals in the gym. GEAR India will ensure there are enough fit people in every gym at any point of time. This will ensure equitable distribution. It is not just unfair but immoral and unethical that some gym have healthier, better-looking people and while others have none. This organization will come up with some system such that every gym will have the same amount of ‘Motivation’ and that is how we all will grow together—an inclusive growth gym system. Whatever kind of body you’re aspiring to have you need protein shakes and hence GEAR India will provide you free shakes under the scheme ‘Mid-Day Shakes Seva’.

**Role 5: Implement a Strong Reservation Policy**

As I stated earlier, there are people who fall above and below optimum levels of fitness. Yet they cannot afford gym because they spend money only on food (or something else). GEAR India will ensure that there is 25% reservation for people who belongs to UFS (Unfit Section), failure to do this might result in shutting down of your gym.

By now, you might have figured that government will be subsidizing the pricing so that it becomes affordable. The way to do this is to add 2% gym tax. We must also tax the rich more because they can afford it, so they will pay 5%.

If we follow these suggested steps, I am sure that we will reach closer to eradicating unhealthy human capital in India.

**What about freedom?**

Some naïve people will complain that this new GEAR India will curtail our freedom. But we have to consider the greater good. What kind of social animal are we, if we cannot take care of our unhealthy population?

As Julian Adorney said in an [article for The Freeman](http://fee.org/freeman/detail/regulate-the-dating-market), freedom is tolerable when exercised in ways that serve society, but its excesses must be curbed to prevent its exercise in antisocial ways. The noble people need attractive and healthy bodies. If that means a little less independence for everyone, then be it.

* * *

**About Sadaf Hussain**

## Lower Interest Rates And Its Impact On Savings

Original: https://www.spontaneousorder.in/p/lower-interest-rates-and-its-impact-on-savings

Author: Spontaneous Order

Published: 2014-12-19T15:17:00.000Z

Topics: interest-rates, savings, austrian-economics, monetary-policy

> In my previous article, I discussed some basic concepts related to Interest Rates. Now, I thought it’s a good idea to look at what impact does artificial lowering of Interest Rates has on savings in general and why it is relevant to understand this. To

**Summary:**

Artificially low interest rates discourage savings, defined as deferred consumption, which is crucial for societal progress beyond primitive hand-to-mouth existence. The author, drawing from Austrian economics, explains that savings store economic energy via money, enabling future spending or investment based on perceived higher future value. Higher interest rates signal greater future value of money, incentivizing savings; lower rates do the opposite, promoting present consumption over saving. This leads to increased discretionary spending, debt accumulation—borrowing future prosperity—and misallocation of capital. Savers chase yields in riskier assets as safe instruments like fixed deposits yield low real returns (nominal rates minus inflation). Prolonged low rates erode societal savings, heightening vulnerability to emergencies, health issues, and retirement, impoverishing people in real terms. The article contrasts this with a Keynesian view (implied in the figure), advocating higher real interest rates that reflect genuine time preferences to foster a virtuous cycle of saving, investment, and growth from a classical-liberal perspective.

**Key points:**

- Savings, as deferred consumption, is essential for human progress beyond subsistence living, enabled by money as a store of economic value.
- Lower interest rates reduce the future value of saved money, discouraging savings and encouraging overconsumption and debt.
- Low rates force savers into riskier investments to chase yields, leading to capital misallocation.
- Societies with prolonged low rates save less, becoming poorer and more vulnerable to future shocks.
- Higher real interest rates aligned with time preferences promote saving, investment, and sustainable growth.

**By Vishwanath Gurlhosur**

* * *

In my [previous article](https://spontaneousorder.in/government-and-industry-asking-rate-cuts-from-rbi-again-but-does-the-aam-admi-really-benefit-from-lower-rates/), I discussed some basic concepts related to Interest Rates. Now, I thought it’s a good idea to look at what impact does artificial lowering of Interest Rates has on savings in general and why it is relevant to understand this.

To begin with, let’s try and define what savings are in the first place? One of the best definitions I have come across is; savings is deferred consumption – in other words, if one earns 100 Units of money in a given period of time and spends/consumes let’s say 60 Units towards living & other expense for that period, it means he/she saves the remaining 40 units (assuming no taxes for simplicity of discussion). So these saved 40 Units have latent economic energy stored in them – which can be unleashed at anytime as preferred by the saver. Put another way, saving allows the saver to spend or consume today’s earning out in the future at a time of his/her liking.

In fact, in the absence of savings no society or race can make any significant progress. Let me explain – if we consider primitive years of human race, it was like any other animal that lives today, i.e., the only function of humans was to survive one day at a time and make sure that the race continues to grow via reproduction with as many mates as possible (marriage as an institution was yet to be born then). Similar to what Tom Hanks experienced in Cast Away (minus the reproduction part of course :-)).

In such a society where everyone spends all their time, effort, skill and resource just to find food and live another day, i.e., they all live hand to mouth, have no means / ability to learn or specialize in anything else , they can never make any significant progress and will hence remain poor. And even if someone wanted to or has the ability to save something, it was very hard to do so, because at the time there was only barter system (i.e., one exchanges what he/she produces to what someone else produces and since most of the production happened to be consumables such as agricultural produce, dairy products, they could not be stored for long as they would perish soon) and money as a concept was yet to evolve. It was in fact the advent of the concept of money that lead to the birth of the concept called savings as we know it. (What lead to the advent of money is a separate topic of discussion in itself, best left for another day.)

In this context, it suffices to understand that money is a medium of exchange and an instrument which helps store economic energy for longer periods thus giving the owner of that money the opportunity to spend/invest at a later time. To summarise the discussion so far, money plays a vital role in saving – and saving is nothing but deferred consumption or deferred investment of choice.

People save for different reasons, but in general it is safe to consider that they save because they perceive a higher value for their money in the future relative to spending it in the present. The future event could be anything like personal emergency (umbrella for a rainy day), buying a car, house, children’s education, health, retirement, etc. However, all of this assumes that the money saved today will have higher value in the future than in the present; otherwise there is no motivation to save in the first place.

**Figure: Savings – in an Austrian and a Keynesian world** 

[

![Keynes-vs-Mises-2-565x289](https://substackcdn.com/image/fetch/$s_!vs3B!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffbc2214b-a6cd-46d8-b1bb-1a68ac9c241d_565x289.png "Keynes-vs-Mises-2-565x289")



](https://spontaneousorder.in/wp-content/uploads/2014/12/Keynes-vs-Mises-2-565x289.png)

*Image courtesy: againstcronycapitalism.org*

Coming to interest rates, it is clear from the [aforementioned article](https://spontaneousorder.in/government-and-industry-asking-rate-cuts-from-rbi-again-but-does-the-aam-admi-really-benefit-from-lower-rates/) that “Interest rate is the time value of money”, i.e., at an aggregated level, higher interest rate would imply a higher value for the money in future for the money saved now, and vice versa – lower interest rate would imply a lesser value for the money in future for the money saved now. Logic dictates that a higher interest rate environment would encourage more saving and lesser rates would discourage saving.

Put another way, discouraged savers as a result of lower rates now find it more rewarding to spend their money in the present than in the future. This is also observed to accompany higher levels of discretionary spending on things like having multiple vehicles, buying homes without sufficient saving, taking expensive vacations, to name a few. In general, one tends to consume more than needed leading to less saving and investing (also known as misallocation of capital resources by some Austrian Economists). When such an environment prolongs for longer periods of time, one tends to maintain such a lifestyle as it gives the illusion of prosperity by taking on debt (since the earnings can no longer support a lifestyle where one consumes more than one produces), and debt for most part acts like a claim on your future produce aka future income – since the debt has to be paid back from one’s future earnings. What this means is, by taking on debt one is borrowing prosperity from future and spending it in the present.

Also, those intending to save and invest as supposed to consume more regardless of the Interest rates, are now forced to get into more and more risky investments and asset classes to chase higher yields – since the regular saving instruments like saving accounts, fixed deposits, govt bonds give lesser and lesser real returns (Real returns = Nominal Interest Rates – Inflation). Thus making the normal saving and investing for the future all the more difficult and challenging.

Consequently, society as a whole saves lesser and lesser, thus becoming more vulnerable to future events like personal emergency, health, retirement to name a few, essentially making such a populace poorer in real terms. Hence, there is a strong case for higher real interest rates leading to higher levels of “saving – investment – growth”, as long as it reflects people’s time preferences.

– *Vishwanath Gurlhosur is a Bangalore based entrepreneur who runs two companies – one is a tech products start-up (WizEngage) and the other a consulting and training firm. He is also a public speaker and conducts workshops on business skills across India. He holds key interest in the teachings – principles of the Austrian School of Economics and likes to call himself a “Hobby Economist!*

* * *

**About Vishwanath Gurlhosur**

## Judging Jawaharlal Nehru on his 125th Birth Anniversary

Original: https://www.spontaneousorder.in/p/judging-jawaharlal-nehru-on-his-125th-birth-anniversary

Author: Spontaneous Order

Published: 2014-11-14T17:50:42.000Z

Topics: economic-planning, nehru-legacy, free-markets, public-sector

> Early in my schooldays I was taught that 14 November is ‘Children’s Day’ – the birthday of India’s first and the longest serving Prime Minister Jawaharlal Nehru, who was known for his passion for the welfare, education and development of childre

**Summary:**

On Jawaharlal Nehru's 125th birth anniversary, Kumar Anand critiques the first Prime Minister's 17-year tenure for imposing socialist policies that caused immense misery and anemic growth in living standards, despite Nehru's professed love for children. Anand refutes apologists: Nehru ignored post-WWII successes in West Germany and Japan versus failures in statist Europe; centralized planning was unnecessary as efficient resource allocation didn't require government control, as advised by Milton Friedman's 1955 memorandum, B.R. Shenoy, Lord Peter Bauer, and A.D. Shroff—all dismissed. Such planning demanded totalitarian tools like favoritism to firms, license restrictions, and deficit financing, undermining democracy and individual freedom. Nehru's distrust of capitalism and profits replaced market profit-loss signals with inefficient public sector enterprises, exemplified by his preference for 'second-rate' local products over superior imports. Anand blames Nehru unreservedly for the poverty endured by his grandfather and father, urging recognition of these policy failures from a classical-liberal lens favoring flexible, market-driven systems over dogmatic interventionism.

**Key points:**

- Nehru's 17 years of socialist policies stifled India's growth, contrasting with rapid recoveries in West Germany and Japan post-WWII.
- Government ignored 1955 advice from Friedman, Shenoy, Bauer, and Shroff advocating flexible, private-led investment over rigid planning.
- Central planning necessitated totalitarian measures like license raj and favoritism, eroding democracy and freedoms.
- Nehru's anti-profit stance led to resource-misallocating public enterprises, prioritizing inferior domestic production over imports.

**By Kumar Anand**

* * *

Early in my schooldays I was taught that 14 November is ‘Children’s Day’ – the birthday of India’s first and the longest serving Prime Minister Jawaharlal Nehru, who was known for his passion for the welfare, education and development of children and young people.

There used to be biographical sketches in textbooks and essay writing in exams on the life of Nehru, especially on his connection with children. Maybe he loved children, and maybe he had their best interest at heart but his policies practiced over an extended period of time (remember, he was the Prime Minister for 17 years) bore little fruit, and more importantly, caused immense misery, as evidenced in the anemic rate of rise in standard of living of India’s masses.

**Figure: Jawaharlal Nehru – Opening Doors to Nowhere**

[

![16TH\_NEHRU\_1553301g](https://substackcdn.com/image/fetch/$s_!7RRb!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F37bc70a7-09d6-410a-bf73-497b66aff88f_569x430.jpeg "16TH_NEHRU_1553301g")



](https://spontaneousorder.in/wp-content/uploads/2014/11/16TH_NEHRU_1553301g.jpg)

*Image Courtesy: The Hindu*

Many are quick to discount Nehru’s mistakes. It is as if, even otherwise smart and articulate people find it hard to bring themselves to point fingers at our beloved *Chacha*, the title thrust upon us by our public schools*.* They cite several reasons for it.  

**Apologists say – But he was the first Prime Minister, he had no blue print. We have the benefit of hindsight.** 

**To them I say –** True. But he did have instances of various countries experimenting with varied models at the time. Many European countries in post-World War II period went for greater role of government in economic affairs and fared poorly. These could easily have been contrasted with the examples of West Germany and Japan which witnessed fast growth. Maybe Nehru was an ostrich who had buried his face in the sand. All he needed was to see what was happening in the world around him – what experiments were successful and what weren’t – and choose the one that was producing results. Instead, he was dogmatic in his approach and continued repeating his mistakes in the hope that somehow the same policies would start producing different (better) results.

**Apologists say – Nehru’s policies of centralised economic planning were necessary for the state of development India was in. It required state mobilisation of the few resources that India had at the time so as to channel them into areas which required immediate attention (investment).**

**To them I say –** Yes, India had few resources at the time. But their efficient use did not require their allocation and management by the government. Economist Milton Friedman writes in his Memorandum to the Government of India in 1955, “It is impossible to predict in advance the lines of investment that will turn out to be the most productive, as the failure of so many private enterprises amply demonstrate. There is therefore great need for a system that is flexible and can change easily.” Similar thoughts and sentiments were also presented to and impressed upon the Government by economists B R Shenoy and Lord Peter Bauer, industrialist A D Shroff, and many others. Sadly, all these voices were summarily ignored.

**Apologists say – But Nehru contributed immensely to the establishment and strengthening of India’s democracy. So what if he messed up a little with the economy.**

**To them I say –** You are sadly mistaken. The planners failed to realise that the kind of planning they were hoping to put in place required employing of totalitarian devices, which in turn severely undermines their own God – Democracy. Granting special favours to particular firms in the forms of advantageous loans, guaranteed markets, refusal of licenses to competitors, enforcing or permitting private price-fixing, deficit financing, are but a few measures through which the government restricted individual freedom and weakened democratic institutions.

> *“I believe, as a practical proposition, that it is better to have a second rate thing made in our country, than a first rate thing that one has to import.” –* Jawaharlal Nehru (From a speech in the 1950s)

Yes, Nehru wanted efficient use of resources!

Nehru’s stated hatred and distrust for capitalism and profits caused businessmen and market’s profit-loss mechanism to be replaced by bureaucrat run public sector enterprises, which were a huge misallocation of scarce resources, whose efficient allocation Nehru set out to achieve.

Today when many celebrate Nehru’s 125th birthday with deep reverence, I can’t keep myself from blaming him for decades of poverty that my grandfather and father had to live through. I don’t have mixed feelings about it either.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## A Libertarian Rock Star That India Never Had: Sauvik Chakraverti, R.I.P.

Original: https://www.spontaneousorder.in/p/a-libertarian-rock-star-that-india-never-had-sauvik-chakraverti-rip

Author: Spontaneous Order

Published: 2014-10-27T17:39:49.000Z

Topics: libertarianism, free-markets, rule-of-law, austrian-economics

> It is with a very heavy heart that we share with you the sad news of passing away of Sauvik Chakraverti, our good friend and ex-colleague. Sauvik was one of the most unabashed champions of individual freedom and free markets, and the fiercest critic of ..

**Summary:**

Sauvik Chakraverti, an unabashed champion of individual freedom and free markets, and fierce critic of state intervention, passed away on 23rd October in Goa, which he called the 'land of freedom and happiness.' Described as a libertarian rock star India never had, he won the inaugural Bastiat Prize for Journalism in 2002 for promoting free society institutions. Chakraverti held that government has only two roles: maintaining Bastiat-esque rule of law—which Indian governments inadequately provide—and building roads, funded not by taxes but by immediately selling all public sector enterprises without exception. A maverick who wore many hats—including rock band member, policeman, Economic Times editor, Mint columnist, teacher, author, and speaker—he authored books like 'Antidote: Essays against the Socialist Indian State' (2000), 'Antidote 2: For Liberal Governance' (2003), and 'Free Your Mind: A Beginner’s Guide to Political Economy.' He championed Austrian economics, Frederic Bastiat, Peter Bauer, Ludwig von Mises, and Ron Paul, critiquing India's moralistic society and soft prohibitionism. The tribute laments his principled refusal to court favors, celebrates his vibrant personality loving rock music, beer, smokes, guns, and Goa, and mourns the loss of a friend, teacher, and voice for libertarian first principles in India.

**Key points:**

- Sauvik Chakraverti died on 23rd October in Goa after championing libertarian ideals against socialist state intervention.
- Government should limit itself to Bastiat-style rule of law and road-building funded by privatizing all public sector enterprises.
- He won the inaugural 2002 Bastiat Prize for Journalism and authored key libertarian works like 'Antidote' series and 'Free Your Mind.'
- Chakraverti criticized India's societal morality and prohibitionism, advocating personal freedoms including guns over reliance on police.'

**By Kumar Anand**

* * *

It is with a very heavy heart that we share with you the sad news of passing away of Sauvik Chakraverti, our good friend and ex-colleague.

Sauvik was one of the most unabashed champions of individual freedom and free markets, and the fiercest critic of state intervention that I have ever met. Sauvik passed away last week on 23rd October in Goa, the place he used to describe as the ‘land of freedom and happiness’. I hope he was free and happy in his last days.

**Figure: Sauvik at his home in New Delhi in a Bob Marley t-shirt singing “[I shot the sheriff](https://www.youtube.com/watch?v=tRgcwT9X2J8)“. The wall picture to his right is Sauvik with Lady Thatcher in London when he received the inaugural Bastiat Prize for Journalism in 2002.**

[

![chairman bhola company](https://spontaneousorder.in/wp-content/uploads/2014/10/chairman-bhola-company-450x337.jpg "chairman bhola company")



](https://spontaneousorder.in/wp-content/uploads/2014/10/chairman-bhola-company.jpg)

Sauvik would never say something that he didn’t believe in, and, for the things he believed in, he would make his voice heard loud and clear. He never courted anyone to secure a favour—probably one of the reasons that he professionally could not rise to the top—but then Sauvik never cared about that anyway.

Being the maverick that he was, he donned various hats at different points of time during his short life. He started a rock band with some of his college friends, he was a policeman, an editor with the Economic Times, a columnist at Mint, a teacher, [author of critically acclaimed books](http://indiatoday.intoday.in/story/book-review-of-sauvik-chakraverti-antidote/1/243452.html), speaker at institutions of higher learning across India on subjects as varied as law, public administration, economics, public policy—and the list goes on. He was also the winner of the inaugural Bastiat Prize for Journalism in 2002—an annual prize given to people whose published works promote the institutions of a free society.

Sauvik was a libertarian who stressed on first principles. To Sauvik, the government had only two jobs: maintain ‘rule of law’—as practiced in a Bastiat-esque world, something that we often take for granted and hardly ever hold our governments accountable for, in its inadequate provision; and ‘building roads’. A libertarian may disagree with the latter, but Sauvik used to say that you do not tax citizens to build roads, just sell-off all the public sector enterprises immediately without exception and use the proceeds to build roads, roads and more roads.

While I will always regret not keeping in touch with Sauvik over the last couple of years, I will always cherish every discussion that we had over a cup of coffee, a smoke (me smoking passively) or a mug of beer. Sauvik used to say that “India is a land of cold women and hot beer”. This he said not in a derogatory sense towards anybody, but to emphasise our society’s messed up sense of morality and state’s soft prohibition-ism, not just for markets for alcohol but for almost everything.

Sauvik loved Johnny Cash, [Tom Petty & the Heartbreakers](https://www.youtube.com/watch?v=pMNqfxKtP3M), Bob Marley, Eric Clapton, chilled beer, a good smoke, guns, Frederic Bastiat, Peter Bauer, Ludwig von Mises, Austrian economics, Ron Paul and Goa. He used to say, “a gun in hand is always better than a policeman on the phone”.

There never was a dull moment when Sauvik was around. He was a libertarian rock star that India never had. For me, he was a friend and a teacher.

Sauvik, you will always be missed! Rest in Peace, my friend.

And as Sauvik would sign-off — “Boom Shankar!”

**Sauvik’s select writings/works:**

Antidote: Essays against the Socialist Indian State (MacMillan, 2000)

Antidote 2: For Liberal Governance (MacMillan, 2003)

[Free Your Mind: A Beginner’s Guide to Political Economy](http://ccs.in/sites/all/books/com_books/free_your_mind_1-40_Part1.PDF)

[Udarwad: Raj, Samaj aur Bazar ka Naya Paath](http://ccs.in/sites/all/books/com_books/book-udarwad.pdf) (Hindi book based on ‘Free Your Mind’)

CCS Viewpoint 2: [Population Causes Prosperity](http://ccs.in/sites/default/files/publications/viewpoint2.pdf).

CCS Viewpoint 4: [Peter Bauer: A True Friend of the World’s Poor](http://ccs.in/sites/default/files/publications/viewpoint4.pdf).

Sauvik’s monthly column [over at Mint](http://www.livemint.com/Search/Link/Keyword/sauvik%20chakraverti) between 2008 and 2010.

Sauvik [over at lewrockwell.com](http://archive.lewrockwell.com/orig10/chakraverti1.1.1.html) on his dream of ‘an institute of catallactics in India’.

Four Wheels for All: The Case for Rapid Automobilisation of India ([published by Liberty Institute](http://indefenceofliberty.org/story/1914/1705/Sept-5-2008-Celebrating-Automobility---Four-wheels-for-alls)).

The Essential Frédéric Bastist, Edited by Sauvik Chakraverti (in collaboration with Frederic Naumann Stiftung – FÜR DIE FREIHEIT, published by Liberty Institute).

Self Help: with illustrations of conduct and perseverance, by Samuel Smiles, Abridged and edited by Sauvik Chakraverti (published by Liberty Institute).

[An interview of Sauvik by Sunil Aggarwal](http://agarsunil.blogspot.in/2009/01/interview-series-on-theory-money-and_09.html).

**NOTE: We invite you to share your experiences with and memories of Sauvik in the comment section below.**

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## PPP: Balancing Equity and Efficiency

Original: https://www.spontaneousorder.in/p/ppp-balancing-equity-and-efficiency

Author: Spontaneous Order

Published: 2014-10-22T15:37:25.000Z

Topics: public-private-partnerships, infrastructure-development, government-efficiency, health-insurance

> We have had a long track record of bad experiences when it comes to the government’s ability to deliver basic services to citizen. While it is important for governments to ensure ‘Equity’, which means it cannot shirk its responsibility of delivering

**Summary:**

Government inefficiency and bureaucracy hinder equitable service delivery, necessitating Public Private Partnerships (PPP) to balance equity—government's non-discriminatory provisioning—with private sector efficiency in provision. India has a strong PPP track record predating its popularity, including private aided schools, infrastructure like national highways, airports, ports, metro rails (758 projects worth INR 833 billion or 10% GDP as of July 2011, 53% in roads), Rashtriya Swasthya Bima Yojna (RSBY) offering up to INR 30,000 health coverage to the poor via private insurers, and telecom spectrum auctions. During the 11th Five Year Plan, private investment was 36% (INR 7.4 trillion) of INR 20.5 trillion infrastructure spend; the 12th plan targets 50% (INR 20.5 trillion). PPP extends to Aadhaar, passports, utilities, and e-governance. Challenges include cronyism, poor contracts, weak enforcement; solutions demand transparent bidding, official capacity building, impartial enforcement, incentive-aligned checks like separate build-maintain contracts, drawing on Jean Tirole's Nobel-winning insights. PPP is vital for infrastructure, economic growth, smart cities, professional benchmarks, accountability, enabling 'Minimum Government, Maximum Governance'.

**Key points:**

- PPP allows government to provision services equitably while outsourcing provision to efficient private providers, as seen in RSBY covering INR 30,000 health costs for the poor and infrastructure projects comprising 10% of GDP.
- India's 758 PPP projects as of 2011, mostly roads, demonstrate success, with plans scaling private infrastructure investment to 50% in the 12th Five Year Plan.
- Address PPP challenges through transparent bidding, foolproof contracts, impartial enforcement, and split incentives like separate build-and-maintain contracts to prevent cronyism.
- PPP introduces professional timelines and quality to replace bureaucratic secrecy, essential for goals like 100 smart cities and rapid growth.

**By Amit Chandra**

* * *

We have had a long track record of bad experiences when it comes to the government’s ability to deliver basic services to citizen. While it is important for governments to ensure ‘Equity’, which means it cannot shirk its responsibility of delivering services to citizens without discrimination; it is equally important for government to improve ‘Efficiency’, so that services reach every individual. We live in an era of big talk by ministers, yet no respite to common man. While several checks and measures were imposed on the administration, these have not worked, largely because the inefficiency in the government institutions is topped by the heavy hand of bureaucracy. Public Private Partnerships came up as one of the ways to increase efficiency in government functioning with respect to service delivery. Under the PPP model, the government is still largely responsible for delivery of services but uses the efficiency of private sector to do so.

India has unique and interesting experience of working on PPP model even before it became the buzz word in the last decade or so. One of the oldest examples of PPP in our country is private aided schools, where the school is managed privately but assisted by the government in more ways than just financial support. Most of India’s major infrastructure development projects today are being executed through private companies. National highways, airports, ports, metro rails, flyovers and Special Economic Zones are some successful examples where the government has been able to provide world class facilities through the PPP model.

Another successful example of PPP is in the health sector—the *[Rashtriya Swasthya Bima Yojna](http://www.rsby.gov.in/)*, a national health insurance scheme for people below poverty line. Under the scheme, the government pays for health insurance of poor to private health insurance companies. This has enabled poor people to go to a hospital of their choice, whether government or private, and get medical care costing up to INR 30,000. The model is so successful that countries like Germany have shown interest in replicating it. The revolution in our telecommunication sector can also be attributed to PPP—where government sells spectrum and private companies run the show. Today almost every service of government that has started reaching out to people has some component of PPP or the other; whether it is passports, the Unique Identity *Aadhaar* card, water, electricity, or grievance redressal regarding these services through E-Governance. In all the above cases the government has continued the role of ‘provisioning’ the services but has outsourced the role of ‘provider’. Now there is need to move further up on the ladder. A huge amount of government work includes day-to-day administrative work and they can benefit by tapping into the efficiency of private sector, by contracting out non-core functions.

According to the PPP database as on 31 July 2011, 758 projects were underway in India costing INR 833 billion, which is around 10% of our GDP. Of the total projects, 53% are in roads, comprising 78% of the total cost. Tourism, education and health care are the other potential sectors which attract almost negligible PPP investment. During the 11th Five Year Plan (2007-12), total spending on infrastructure was INR 20.5 trillion wherein private investment was only around 36%, costing INR 7.4 trillion. Under the 12th Five Year Plan (2012-17), the government has planned to get 50% spending of total planned expenditure on infrastructure from the private sector, which is estimated to be INR 20.5 trillion.

Despite the fact that there is a good stock of successful examples, there are valid challenges with the functioning of the PPP model. These can be addressed as follows:

First, there has to be an open and transparent mechanism to build the partnerships so that it doesn’t become a practice to outsource work to favoured companies which will lead to politicisation, incorporating cronyism. Second, capacity building of officials must be done, to write foolproof contracts that don’t provide scope for manipulation. Third, enforcement of contracts by officials on companies must be done without any fear or favour. Fourth, it is necessary to build institutional mechanism of checks and balances by aligning incentives. This can also be done by outsourcing the work to two different companies: one for building and another one for maintaining. In this way, the greed of one businessman would work as best protection from greed of another businessman. In this regard, [Jean Tirole’s work is very relevant](http://www.business-standard.com/article/opinion/four-nobel-winning-insights-that-matter-for-the-indian-economy-114101301188_1.html) for which he has recently been awarded with the Nobel Prize in economics for 2014.

The PPP model is crucial for building infrastructure for fast economic growth which is required in today’s competitive and globalised world. Many can argue against the increased expenditure by government on PPP projects, but it remains that this is a very small yet productive expenditure on capital investment. It would be almost impossible for a government to build 100 smart cities in five years without engaging the private sector. PPP has opened up government projects to incorporate a professional approach to work, with clear quality benchmark and timelines, as compared to the secretive attitude of bureaucrats and the usual *bhagwan bharose* timeline. This would bring better services to citizen and make institutions accountable. By doing so the government can live up to its election winning mantra of ‘Minimum Government, and Maximum Governance!’.

* * *

**About Amit Chandra**

## Who Listens to Mumbaikars?

Original: https://www.spontaneousorder.in/p/who-listens-to-mumbaikars

Author: Spontaneous Order

Published: 2014-10-17T12:11:11.000Z

Topics: urban-governance, democratic-accountability, local-government, mumbai-politics

> Maharashtra state elections are just over but something was immensely disturbing about them. Let me start by posing a question. Would it not be a flawed system if the Chief Minister of Maharashtra is elected by voters in Madhya Pradesh? Yes, it undoubte..

**Summary:**

Mumbai's governance suffers from a profound lack of democratic accountability because ministers overseeing critical local issues—such as roads and flyovers under the Mumbai Metropolitan Region Development Authority (MMRDA) headed by the Urban Development Minister, policing under the Home Ministry, other roads via the Public Works Department (PWD), and dilapidated structures and slums via MHADA—are elected from constituencies far outside the city, like Karad (Satara), Tasgaon (Sangli), and Yeola (Nashik). None of these ministers, including the Chief Minister who held Urban Development, contested from Mumbai in recent or 2009 elections. Mumbaikars thus cannot vote to reward or punish their performance on city-specific challenges like poor roads, housing shortages, and policing, while voters from Nashik, Sangli, or Satara decide these ministers' fates despite decisions worth thousands of crores affecting Mumbai. This system incentivizes neglect or corruption, as politicians prioritize distant home bases over Mumbai's needs. The author argues for ministers handling local Mumbai issues to be elected from the city itself, enhancing accountability. This flaw extends to other Indian cities, where state governments refuse to devolve power, rendering elected mayors figureheads under unaccountable state control.

**Key points:**

- Ministers controlling Mumbai's roads, flyovers, policing, housing, and slums are elected from non-Mumbai constituencies like Karad (Satara), Tasgaon (Sangli), and Yeola (Nashik), denying Mumbaikars electoral accountability.
- The current system creates perverse incentives for politicians to neglect Mumbai governance while securing re-election elsewhere.
- Democratic accountability demands that ministers for local city issues be elected from within the city.
- Indian state governments withhold power from municipalities, making mayors ceremonial while state ministers wield real control over cities.

**By Makarand Bakore**

* * *

Maharashtra state elections are just over but something was immensely disturbing about them. Let me start by posing a question. Would it not be a flawed system if the Chief Minister of Maharashtra is elected by voters in Madhya Pradesh? Yes, it undoubtedly would be as it would lead to a lack of democratic accountability towards people in Maharashtra**.** If that is so, how do we accept a system wherein a city is run by persons who are not elected from that city? Take Mumbai, for example. Mumbai is grappling with various challenges such as delays in construction of flyovers, bad quality of roads, policing issues, dilapidated structures and paucity of housing (leading to slums), amongst many others. By and large these issues are local to Mumbai.

Let us see who is empowered to deal with these issues under the present system. The responsibility of constructing key roads and flyovers lies with the Mumbai Metropolitan Region Development Authority (MMRDA), which is headed by the Urban Development Minister of the State. The matter of housing scarcity also comes under the Ministry of Urban Development. The Mumbai police come under the purview of the Home Ministry. Some of the other roads are looked after by the Public Works Department (PWD) of the State Government. The onus of dealing with dilapidated structures and slum rehabilitation lies on Maharashtra Housing and Area Development Authority (MHADA), which is headed by the Minister for Urban Development.

It is pertinent to note the constituencies from which the Ministers, heading these Ministries, contested the state elections this time and those held in 2009. The Chief Minister, who held the Urban Development portfolio, had become a MLA in 2010 through the State Legislative Council (Upper House) and this time stood for elections from Karad, Satara (the previous Chief Minister had got elected from Bhokar, Nanded in 2009, till he was removed from office on corruption charges). The Home Minister had won elections from Tasgaon, Sangli in 2009 and contested elections from the same constituency this time. The PWD Minister contested elections this time from Yeola, Nashik, the same constituency as that in the 2009 state elections.

This means that none of the aforesaid Ministers who governed Mumbai for the past five years contested the polls this time from any constituency in Mumbai. Similar examples of many other Ministers can be cited. There is no way a Mumbaikar can express her satisfaction or anguish with their past performance through her vote with regard to the issues local to Mumbai. She can only vote or not vote for the candidate fighting elections from her constituency but she cannot vote for or against the Minister who was ultimately responsible for Mumbai’s governance.

If democratic accountability means that the elected representatives are accountable to the people who elect them, it appears that Mumbai is not all that democratic. The electoral destiny of the Ministers, who made decisions worth thousands of crores for Mumbai, will be decided by voters from Nashik, Sangli, Satara and other places, and not by voters from Mumbai.

This is not to say that the State Ministers have no role to play in Mumbai. Matters concerning the entire state, such as intra-state transport, ports, tourism, earthquake rehabilitation, social justice, law and judiciary, agriculture, rural development, state excise and non-conventional energy, tribal development, higher and technical education, industries and labour, and minorities development, will have to be dealt with at the state level and Mumbaikars also will be affected by these decisions.

But the issues such as policing in the city, slums, roads, flyovers and dilapidated structures are, by and large, local to Mumbai. It is not clear how legitimate it is for elected representatives from places like Nashik, Sangli and Satara to deal with these local issues, when no Mumbaikar had a chance to vote for them. The problem with such a system is that it creates perverse incentives for some politicians to get elected from outside Mumbai, disregard good governance of Mumbai for private financial gain, go back to their far-off constituencies to get re-elected and return to govern Mumbai again. The disenchantment and frustration of Mumbaikars need not matter to these politicians as long as they keep their home constituency happy. May be that explains some of the grave challenges Mumbai faces today.

This is also not to say that only Mumbaikars should be Ministers in the government. But democratic accountability requires that those Ministers handling the issues local to Mumbai should be elected from Mumbai. This will give Mumbaikars a chance to assess their performance through their vote at the time of elections.

The lack of democratic accountability is not unique to Mumbai. Many other Indian cities suffer from it. Most state governments are unwilling to devolve power to the city governments such as the Municipalities. The Mayor, who is the elected head of a Municipality, is a figurehead in most Indian cities, while the unaccountable state government Ministers hold the reins of power over the cities.

Of course I voted in the elections held on 15th October, but I went to the polling booth with an uneasy feeling knowing that the voters from places such as Nashik, Kolhapur, Solapur, Sangli and Satara might have more say in shaping Mumbai’s future for the next five years than voters from Mumbai.

*– Makarand Bakore is a practicing advocate in the Bombay High Court.*

* * *

**About Makarand Bakore**

## Irony of taxing salt in Gandhi’s country

Original: https://www.spontaneousorder.in/p/irony-of-taxing-salt-in-gandhis-country

Author: Spontaneous Order

Published: 2014-10-06T16:56:41.000Z

Topics: salt-cess, government-inefficiency, tax-reform, public-finance

> Author: Beena Aiyar One of the most evocative moments of our independence struggle is Mahatma Gandhi’s Salt Satyagraha of 1930. Whether in Dandi, Dharasana or Vedaranyam—the simple act of walking to the shore and breaking British Salt laws shook up th

**Summary:**

In a classical-liberal critique, Beena Aiyar highlights the irony of taxing salt in post-independence India, echoing Gandhi's 1930 Salt Satyagraha against British salt laws, yet imposing a cess since 1947 to fund the Salt Commissioner's Organisation (SCO). Despite 92% private salt production post-1996 de-licensing, the Salt Cess Act 1953 funds regulation, land leasing (62,000 acres), quality control, iodisation campaigns, and labour welfare. In 2013-14, cess collections were Rs 3.3 crores, with 50% collection costs and Rs 24 crores of Rs 27 crores SCO expenses on salaries for 800 officers (far exceeding 50 sanctioned posts). Activities like eye camps and scholarships are minimal. Aiyar argues this inefficient machinery—costing more to run than it raises—should be abolished, with expenses met from general revenues, quality control integrated under Food Safety and Standards Act 2006, welfare via schemes like MGNREGS, and land management reformed to curb discretion. Echoing Economic Survey, 13th Finance Commission, and experts like NK Singh, she calls for eliminating all cesses to streamline taxes, reduce distortions, and shrink government.

**Key points:**

- Abolish the Salt Cess Act 1953 as collections (Rs 3.3 crores in 2013-14) are dwarfed by 50% collection costs and Rs 24 crores in salaries for 800 SCO officers.
- Integrate salt quality control into the Food Safety and Standards Act 2006 and shift worker welfare to broader schemes like MGNREGS.
- Reform leasing of 62,000 acres under SCO to reduce bureaucratic discretion without a vigilance officer.
- Fund SCO via general revenues post-cess abolition to cut costs and boost efficiency, aligning with calls to eliminate distortionary cesses.

**By Beena Aiyar**

* * *

**Author: Beena Aiyar**

One of the most evocative moments of our independence struggle is Mahatma Gandhi’s Salt Satyagraha of 1930. Whether in Dandi, Dharasana or Vedaranyam—the simple act of walking to the shore and breaking British Salt laws shook up the Empire. Gandhiji’s powerful speech the night before his 250 km march to the shores of Dandi urged satyagrahis specifically protest the salt act by “carrying away the natural salt deposits on the seashore”. Yet, 67 years after Independence (and 84 years after the Mahatma’s urging) today carrying away salt from the shore is only permitted upon payment of a cess.

While salt duty was abolished with effect from 1 April 1947, we persisted in the taxing of salt. As the Salt Commissioner’s Office notes in the proud telling of its history: “*After abolition of duty on salt, a question arose how to meet expenses for maintaining salt department. To meet these expenses, Government of India imposed a cess on salt in the nature of excise duty with effect from 1.4.1947.”* The Salt Cess Act of 1953 was passed a few years later, levied for the development of the salt industry and labour welfare schemes. A salt development fund was established in 1958, under the Act, to be operated by the Central Salt Board. In 1996 the government began de-licencing the salt industry.

## Indian Salt Management Machinery

The Salt Cess Act, 1953: “An Act to provide for the levy and collection of a cess on salt for the purpose of raising funds to meet the expenses incurred on the salt organisation maintained by Government and on measures in connection with the manufacture, supply and distribution of salt. “

The cess is meant to meet the expenditure incurred by the Central Government relating to the regulation and control of manufacture, supply and distribution of salt, establishment and maintenance of research stations and model salt farms, establishment, maintenance and expansion of salt factories; fixing the grades of salt, promoting and encouraging co-operative effort among manufacturers of salt; and promoting the welfare of labour employed in the salt industry. Section 4 of the Act provides for utilising it (after meeting administrative expenses for the department) for development of salt industry and Labour Welfare Works.

Since liberalisation, the role of the government in manufacturing and controlling goods has reduced quite significantly. 92% of the salt is produced by the private sector. What remains now is its role in leasing of vast tracts of government land, carrying out meagre development and labour welfare schemes, quality control, and facilitating salt related nutrition programmes.

The Salt Commissioner’s Organisation, attached to the Ministry of Commerce & Industry, is responsible for controlling all aspects of the Salt Industry. The Salt Commissioner who heads the department is based in Jaipur HQ. Under him, there are five Regional Offices headed by Deputy and Assistant Salt Commissioners. The SCO is staffed through the **Indian Salt Service**, one of the smallest central services under government of India with a mere 11 sanctioned posts. Ironically enough, the same servicemen were designated as Salt Controllers under British Rule (and until 1952). At last count this entire machinery had about 800 officers in various roles (while the Plan sanction is for 50 odd posts)

## What happens to the Cess?

For 2013-14, total cess collected was Rs. 3.3 crores, the cost of collecting which came to 1.5 crores, nearly 50% (this is the average pattern for 2010-2014). Total expenses for the year incurred by the SCO amounted to Rs. 27 crores, of which roughly Rs. 24 crores goes into paying for the salaries of 800 officers who work in various capacities for the salt department. Demand for Grants for the DIPP in 2011-12 (since then the demands seem to have become less detailed, and granular) for the salt commissioner’s office was a mere Rs 30 crores.[\[1\]](#_ftn1) The budget for the department provides for establishment charges of the organisation and for development/ welfare works.

In addition to running 32 mobile and stationary laboratories that monitor the quality of salt and leading the iodisation campaign of government of India, the SCO in 2013-14:

-   carried out a study on retention of iodine in poly packed iodised salt with passage of time
    
-   successfully organized meetings with stakeholders in procurement and distribution of adequate iodised salt in different states
    
-   made some concerted efforts to popularize consumption of iodised salt
    
-   organized Salt India Conclave 2014
    
-   conducted 27 eye care camps and organized 9 sports meet for the benefit of the Salt workers, gave out 3,500 scholarships to meritorious children, and conducted 1 training programme in Vedaranyam. (Vedaranyam incidentally is the site from where Gandhiji’s southern commander, C Rajagopalachari undertook the Salt Satyagraha.)
    

Even though the cess is earmarked, the amounts in play are so insignificant that it would be smarter and more efficient to do away with the cess, and bear the expenses of the salt administration through general revenues. Should the cess be done away with, the cost of running the department will come down even further.

When your cost of collection is 50% of your total cess, it points to an inefficient and ineffective system. The largest portion of the collections under the salt commissioner’s office is from rents on leased land, not even the cess. The combination of these provides a sixth of the annual running costs of the department.

## Salt Cess, like other cesses, must go

Many experts have reiterated time and again that cesses are bad public finance. The recent Economic Survey has argued that “taxes clarified as ‘bad’ in public finance theory like cesses, surcharges, transaction taxes, and taxes imposed for ease of collection such as the dividend distribution tax, need to eventually go. Reducing tax related distortions can increase efficiency and fuel GDP growth”.

The High Level Committee on Salt in 1978 recommended that the cess be abolished on account of the flimsy collections and high costs—back then the Committee observed the “total annual collection is so small, the cost of administration so heavy, and the controversies in this so many that the committee considers the quantum of cess collected is not commensurate with the costs and total effort in its collection and therefore recommends that it should be removed altogether”. Advocates of smaller government like NK Singh and Arun Shourie have argued for the abolition of cesses such as the salt cess for a long time.

The 13th Finance Commission’s report identifies challenges in implementing GST.: Among these is collapsing all existing indirect taxes, surcharges and cesses to ensure a national common market and a unified streamlined tax code that have a ‘common conceptual core’.

Besides the question of how inconsequential the cess amounts are, there are several other issues around the salt machinery that need a serious hard look:

1.  62,000 acres are under the control of the salt commissioner, and are leased to private players and cooperatives for the production of salt. The SCO’s key role in recent years is the management of the leasing and rent renewals for these lands. This places an awful lot of discretionary powers at the hands of the machinery, which does not even have a vigilance officer attached to it.
    
2.  GoI already has a Food Safety and Standards Act, 2006. While quality control labs are great service, shouldn’t we have an integrated approach for all food items together?
    
3.  The health and nutrition programmes such as reducing iodine deficiency could easily be part of a public health department.
    
4.  The imposition of cess requires that private manufacturers in addition to all the rules and regulations, maintain another 3 forms (F, G and H under the Act). Is the burden of compliance worth the amounts collected?
    
5.  While the intent may have subsequently become the welfare of marginalised salt workers (known as Agariyas in Gujarat), at the time of founding, it was simply to keep the organisation going. Keeping in mind that groups such as Agariyas are severely deprived, how should the government ensure their development and welfare? Why can’t large centrally sponsored schemes such as MGNREGS, RSBY, and the other host of social security schemes be used instead to support the salt workers? Proceeds from the salt cess have been used to provide drinking water facilities, basic health care and recreation to salt workers—aren’t the former two the most basic of local government responsibilities? After all, salt is only produced in 52 districts in the country—reaching this group shouldn’t require yet another layer of bureaucracy.
    

[\[1\]](#_ftnref1) Budget 2011-12, [http://indiabudget.nic.in/ub2011-12/eb/sbe12.pdf](http://indiabudget.nic.in/ub2011-12/eb/sbe12.pdf)

* * *

**About Beena Aiyar**

## Should Government Have A Role In Sports?

Original: https://www.spontaneousorder.in/p/should-government-have-a-role-in-sports

Author: Spontaneous Order

Published: 2014-08-14T15:37:05.000Z

Topics: government-sports-funding, private-sports-leagues, taxpayer-burden, limited-government

> Now that I (as many of you) have enjoyed the World Cup 2014, allow me to register my protest on behalf of Brazilian taxpayers against this wanton public expenditure. What a colossal waste! Governments around the world organise and host national and inte..

**Summary:**

Kumar Anand argues from a classical-liberal perspective that governments should have no role in sports, as they are not public goods like roads or courts but private activities where social costs are imposed on taxpayers for individual or national pride. He cites the 2014 World Cup in Brazil, costing USD 14 billion—the most expensive ever—funded by taxpayers without consent, leaving a lasting debt hangover despite infrastructure claims that private markets could provide more efficiently. Privately organized events like UEFA Champions League, Premier League, IPL cricket, NBA, MLB, ATP tennis, PGA golf, and even India's Pro Kabaddi thrive without state support, monetizing successfully and fostering competition. National teams and events like Olympics or Commonwealth Games are unnecessary; sports instill values better through parents and teachers, not government. Anand rejects justifications like national integration, emphasizing that personal pride in Indian achievements, such as Olympic medals or Fields Medals, does not justify coerced funding. Governments should focus on rule of law, not medals, questioning how much others are willing to pay for such privileges.

**Key points:**

- Governments impose unjust costs on taxpayers for sports events like the USD 14 billion 2014 World Cup in Brazil without consent.
- Privately organized sports such as UEFA Champions League, IPL, Pro Kabaddi, NBA, and MLB succeed and monetize without state intervention.
- Sports are not public goods, lacking a market failure justification for government involvement in training athletes or hosting events.
- National pride and values like discipline should not force universal taxpayer funding; prioritize rule of law over Olympic medals.

**By Kumar Anand**

* * *

Now that I (as many of you) have enjoyed the World Cup 2014, allow me to register my protest on behalf of Brazilian taxpayers against this wanton public expenditure. What a colossal waste!

Governments around the world organise and host national and international sports events. Governments also support sportspersons representing their respective jurisdictions, by paying for their training, expenses, salaries, etc. We take pride in our fellow countrymen’s performance in these events and root for their success. We celebrate their victories and mourn their losses, almost as much as athletes themselves. Also, these emotions are not restricted to events that have national character to it, but are also found in privately organised and managed events such as Formula1 car race, club football, premier league cricket, professional tennis, etc.

While recently concluded world cup football and commonwealth games were distinctly national in character, premier league football in England that kicks off in a couple of days has no one particular national identity.

**Figure: The Chelsea Football Club squad for 2014-15 English Premier League season – Among the nationalities represented in the team are English, German, Spanish, Brazilian, Belgian, Czech, Serbian, French, Nigerian, Dutch, Australian, Egyptian, Danish and Ivorian**

[

![chelsea team](https://spontaneousorder.in/wp-content/uploads/2014/08/chelsea-team-450x277.jpg "chelsea team")



](https://spontaneousorder.in/wp-content/uploads/2014/08/chelsea-team-e1408012220350.jpg)

*Image courtesy: ChelseaFC*

Given all this, I would like to ask a question that I have been thinking about lately, “Do we need government patronage of sports?”

The justification for any government intervention arises from ‘market failure’ in provision of goods and services, such as in provision of public goods like roads, police, courts, etc. In case of public goods – goods which are non-rival and non-excludable – there may be a case for government’s role. However, I fail to see a similar role for government in training athletes and organising sports events, a case of private gains borne out of social costs.

At [USD 14 billion](http://www.espnfc.com/story/1830732), the recently concluded World Cup was the most expensive in tournament’s history. This money was spent on renovating old stadiums and building new ones, improving infrastructure, and on security measures, among other things. While a lot of us got to enjoy this once-in-four-year extravaganza for a period of few weeks, the cost is borne by a select few who had little or no say in the matter (in this case, the Brazilian taxpayers).

It is as if Brazilian taxpayer’s (of course, without their knowledge and consent) took a huge debt for a one night party they organised for all their friends, families and even for strangers. Now that the party is over, they are left with a hangover which is going to last for years. And they didn’t even win the cup, which could have otherwise softened the blow. (Maybe Germany, on account of winning the cup and beating Brazil to pulp on their road to victory, should extend soft loans to Brazil.)

It could be claimed that it is not all bad. A lot of these expenditure can be claimed to have helped improved infrastructure, but there is nothing to suggest that these infrastructural developments is what was most urgently needed, or that they wouldn’t have come about independent of government’s direct investment.

It is not as if government’s role is indispensable for organising such large events. [UEFA Champions League](http://en.wikipedia.org/wiki/UEFA_Champions_League), one of the biggest football event, has been privately organised every year.

Today the ecosystem within which most of the athletes have to compete on national or international platforms are the ones where representation is by state. The argument goes that without state support, many of these sports will die. Evidence does not support this argument.

Individual sports such as [tennis](http://www.atpworldtour.com/), [golf](http://www.pgatour.com/) and boxing, and team sports like [baseball](http://mlb.mlb.com/home), [basketball](http://www.nba.com/), [football](http://www.premierleague.com/en-gb.html), [cricket](http://www.iplt20.com/), and now even [kabaddi](http://prokabaddi.com/) in their privately organised versions have thrived and prospered. Left on their own, these sports will have to find a way to monetise themselves, [something what kabaddi has successfully managed to achieve](http://articles.economictimes.indiatimes.com/2014-08-11/news/52687461_1_future-group-shakti-pumps-rural-push).

State-organised festival of sports like the World Cup tournaments and Olympics have been going on for a long time. People give a variety of reason to support the need for a national team and a national event. Some say that it promotes national integration, while others say that it helps instil essential human values like honesty, discipline and respect among players and spectators alike.

It is not the job of the government to instil desired values in our children and youths, it is the job of our parents and teachers. Besides, privately organised events will have incentives to minimise cost which is absent from a government organised event.

Tomorrow is Independence Day. I too, like most of you, identify myself as an Indian and feel proud when an Indian wins a medal in Olympics and commonwealth games or [even when he gets a Fields medal](http://www.livemint.com/Politics/76RVvYHNx7neqcW1gEmCNN/Indianorigin-mathematician-Manjul-Bhargava-awarded-Fields-M.html). I, however, do not agree with forcing everyone to pay for my pleasure and pride, as it happens in the case of state funded and state represented sports events.

I would rather have government focus on providing essential services like ensuring rule of law than making sure we win Olympic medals.

If you feel otherwise, allow me to ask you, “How much are you willing to pay for this privilege?”

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Market-based Solutions to Public Policy: Tom G Palmer at CCS Chintan

Original: https://www.spontaneousorder.in/p/market-based-solutions-to-public-policy-palmer

Author: Spontaneous Order

Published: 2014-08-02T15:45:51.000Z

Topics: market-economy, property-rights, lex-mercatoria, state-critique

> Tom Palmer was at CCS on 22 July to discuss market-based solutions to public policy. He began his talk with an interesting distinction between the ‘government’ and the ‘state’ and went on to discuss the need for a market economy. State: In his tal

**Summary:**

Tom G. Palmer's talk at CCS Chintan on 22 July distinguished the predatory 'state' from the institutional 'government,' advocating market-based solutions to public policy from a classical-liberal viewpoint. He critiqued anthropologists for mistaking modern tribal communities—composed of refugees fleeing state conquest, taxation, conscription, enslavement, and rape—as prehistoric relics; these groups exhibit layered ethnicities and unrelated languages, as in Georgia. States maximize State Accessible Product (SAP)—easily taxable output—over GDP, reshaping economies for extraction, per James Scott. In contrast, government provides behavioral rules without monopolizing enforcement. Historical civil societies in cities birthed institutions like merchant 'companies' (from 'eating together'), producing Lex Mercatoria—privately generated commercial law foundational to modern corporate bylaws and international trade law. Mises defined the market economy as a system of division of labor and private ownership where actors serve others' needs to meet their own via 'non-tuism'—self-interested mutual benefit enabled by monetary calculation. Essential rules cover property rights (definable, defendable, divestible), contracts, and liability; while states can supply them, they often violate these as the biggest criminals, underscoring the need for decentralized, market-driven governance.

**Key points:**

- States prioritize maximizing State Accessible Product (SAP) for taxation over overall GDP growth.
- Government functions as a rule-making institution separable from enforcement, unlike the monopolistic state.
- Merchant companies historically produced Lex Mercatoria, the basis of modern commercial law, without state involvement.
- Market economies require property rights that are definable, defendable, and divestible to enable voluntary cooperation via 'non-tuism'.
- States can provide necessary market rules but frequently violate them as major rule-breakers.

**By Manasi Bose**

* * *

Tom Palmer was at CCS on 22 July to discuss market-based solutions to public policy. He began his talk with an interesting distinction between the ‘government’ and the ‘state’ and went on to discuss the need for a market economy.

**State:**

In his talk, Tom highlighted the common mistake that anthropologists make, in studying mountain or tribal communities to better understand how pre-historic men used to live. This, he said, was fundamentally wrong, because people in these communities do not live anything like people did 25,000 years ago. These people are refugees from conquest – refugees who escaped from modern states – taxation, military conscription, enslavement and rape. This is why we often find layers of ethnicity in these communities as different groups who escape conquest push the older groups further up, while conquerors take over the valleys. Often, multiple languages are spoken in these communities, which are linguistically unrelated to one another. Georgia is an example of such a state.

Tom said that James Scott pinpoints another mistake made by anthropologists – that of assuming that the state is attempting to maximise Gross Domestic Product (GDP). In fact, what states are doing is capturing the SAP – the State Accessible Product. A ruler maximises the SAP, if necessary at the expense of the overall wealth of the realm and its subjects. They want a product that is easy to tax and there are examples from across the world of governments systematically shaping the economy not just to increase total wealth, but to increase their ability to tax it.

**Government:**

The government as an institution must be distinguished from the entity that is the state. The two are often considered synonymous, however the government is an institution in that it provides rules for behaviour. Enforcement of these rules need not be a function of the government – the functions of creating the rules and enforcing them do not need to be unified in a monopoly.

If we compare feudal society to civil society, like those found in cities, we see that cities gave rise to many ‘institutions’ as people come together to produce a variety of public goods. One example is the ‘Company’, which, literally translated means ‘eating together’ and was the name given to groups of merchants who met and had dinner together; and organised themselves and set rules of behaviour which gave us our current corporate by-laws.

Law was produced **not** by the rulers or the states, but by business people, who set out these rules to make it easy to carry out transactions and address disputes. These companies also gave us ‘law’ as we know it today – the *Lex Mercatoria*. Today, all international commercial law originates in the *Lex Mercatoria*.

**Market Economy:**

Mises defined a market economy as the ‘social system of division of labour and private ownership of the means of production. Everybody acts on their own behalf, but their actions aim at the satisfaction of the needs of others as well as their own.’

In a market, a person sets out to satisfy their own needs, but in order to do so, they must satisfy someone else’s needs as well. Therefore, a market is characterised by ‘non-tuism’, which means we are not interested in the interests of those with whom we interact, but are not selfish. We are simply trying to get the best deal possible.

The basis for a market economy is monetary economic calculation that allows us to compare different kinds of things. This economy needs rules to function – rules related to property rights, contracts and liability. Property creates the foundation for the voluntary cooperation necessary for the market economy, and property rights must be:

-   Definable
    
-   Defendable
    
-   Divestible
    

States *can* provide the rules necessary (but it need not enforce these rules). The problem, however, is that states can also be the biggest criminals or violators of these rules.

You can find the podcast of Tom Palmer’s talk [here](https://soundcloud.com/centre-for-civil-society/market-based-solutions-policy). His presentation is available [here](http://www.slideshare.net/ccsindia/marketbased-solutions-to-public-policy-presentation-by-tom-g-palmer-at-ccs-chintan).

* * *

**About Manasi Bose**

## What Should Be The Price of A Train Ticket?

Original: https://www.spontaneousorder.in/p/what-should-be-the-price-of-a-train-ticket

Author: Spontaneous Order

Published: 2014-06-26T13:06:21.000Z

Topics: indian-railways, rail-fares, privatization, government-monopoly

> From my experience of Indian railways I suggest that they find someone who has bought a ticket, and give him a prize. – James Cameron in The Guardian, 21 June 1983 Image courtesy: Blogateur It was announced last week that Indian Railways (IR) is going t

**Summary:**

The post critiques the recent 14.2% passenger fare and 6.5% freight charge hikes by Indian Railways (IR), arguing that true market prices for train tickets cannot emerge because IR operates as a government monopoly without competition. Prices in free markets arise through a discovery process coordinating dispersed knowledge, but IR sets arbitrary 'fees' driven by political motives like re-election rather than profit maximization or cost minimization. Examples include coach factories built in Rae Bareily (Sonia Gandhi's constituency) and Madhepura (Lalu Yadav's) for populist reasons, and the rollback of Mumbai local fare hikes due to Shiv Sena and BJP MPs' pressure. Citing Tirthankar Roy's economic history, railways evolved from private enterprise (1849-69), to state involvement, back to private management with state ownership (1881-1924), and full state control post-1924. The author advocates privatizing rail transport, as in successful telecom and aviation sectors, envisioning competition from Tata, Reliance, or Mahindra trains offering superior comfort, safety, speed, and competitive rates.

**Key points:**

- Indian Railways sets politically motivated fees, not market prices, due to its government monopoly lacking competitive incentives.
- Political decisions like coach factories in Rae Bareily and Madhepura prioritize votes over cost efficiency.
- Recent fare hikes were partially rolled back for Mumbai locals under MP pressure, exemplifying populist interference.
- Privatize railways to enable competition, mirroring telecom and aviation liberalization successes.
- Revert to private enterprise as in historical phases (1849-69, 1881-1924) for better service and pricing.

**By Kumar Anand**

* * *

> *From my experience of Indian railways I suggest that they find someone who has bought a ticket, and give him a prize. –* James Cameron in The Guardian, 21 June 1983

[

![indian-railways-1](https://substackcdn.com/image/fetch/$s_!xAOG!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbcc3cde4-a964-4eed-aa8f-332ade0d98e0_400x223.jpeg "indian-railways-1")



](https://spontaneousorder.in/wp-content/uploads/2014/06/indian-railways-1.jpg)

*Image courtesy: Blogateur*

It was [announced](http://articles.economictimes.indiatimes.com/2014-06-21/news/50756431_1_passenger-fares-railway-budget-interim-budget) last week that Indian Railways (IR) is going to increase passenger fare by 14.2 percent and freight charges by 6.5 percent. People have responded to the news in mixed ways. While some have celebrated the move as they believe a fare hike was long overdue and necessary for improving railways finances and facilities, others have lamented the rate hike saying it was totally unwarranted given that there has been no corresponding improvement in rail safety, train speed and passenger amenities and comfort over the years.

This begs the question, what should be the price of a train ticket? Should it be based on the cost incurred? Should it be determined arbitrarily, as it is done today? Or should the price be indexed to one of the price indices to do away with the need for occasional rate hikes and the following protestations?

Whether IR should have hiked the fares or not, can only be answered if we understand how prices are determined in the marketplace. Prices, as they are determined in markets, comes about through a discovery procedure, where they act to coordinate separate acts of different people among whom the knowledge of relevant facts are dispersed. There can be no price outside of the market. And since IR is a government monopoly, we cannot know the *market* *price* of a train ticket. Whatever sum a train traveller is asked to pay for a ticket, is a *fee* and not the *price*.

It is evident that price of a rail ticket is not motivated by the fact that IR needs to maximise profits. Their CEO (Minister of Railways) – a politician and not a businessman – is motivated first by getting re-elected, and whatever else motivates him comes a distant second. It could very well be that if IR were facing competition from other providers of rail transport, the prices may have been dropping despite the rise in some of the input costs. IR, when operating as a government monopoly, simply don’t have the incentives to minimise costs and maximise profits by satisfactorily serving the maximum number of customers possible.

Almost all of railways decisions are based on populist measures. Take for example, the case of building coach factories at Rae Bareily in Uttar Pradesh and Madhepura in Bihar. It is clear that the plan was initially mooted by the then Railways Minister Lalu Yadav during UPA I, to appease his parliamentary constituency of Madhepura and that of UPA Chairperson Sonia Gandhi’s constituency of Rae Bareily. Clearly, it was not a business decision based on building the coaches at the cheapest possible cost.

If there ever was any doubt that rail fares are not determined only by political exigency, Shiv Sena and BJP parliamentarians from Mumbai [got the Minister of Railways to roll back the hike in fares](http://indianexpress.com/article/india/politics/hike-in-fares-will-not-apply-to-suburban-trains-for-travel-up-to-80km-railways/) of Mumbai local trains.

Tirthankar Roy in his book, [The Economic History of India (1857-1947)](http://www.amazon.in/Economic-History-India-1857-1947-Tirthankar/dp/0198074174), notes that the principle of railway construction went through four stages: 1849-69 saw only private enterprise, 1870-80 saw the accent shifting towards state enterprise, from 1881-1924 recourse was again handed to private enterprise in management with state ownership, and from 1924 onward the state assumed ownership as well as control. We see no reason why the rail transport can’t once again be privately run. We have already seen the enormous benefits of opening up in telecommunications and air travel.

Imagine a situation where a Tata, a Reliance and a Mahindra train, are all bidding for you to buy a seat in their train with the promise of a more comfortable, safer and quicker journey, at competitive rates, without going through the pain of an IRCTC booking window. Sigh!

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Top Priority of Modi Government should be RULE OF LAW

Original: https://www.spontaneousorder.in/p/top-priority-of-modi-government-should-be-rule-of-law

Author: Spontaneous Order

Published: 2014-06-02T15:37:09.000Z

Topics: rule-of-law, criminal-justice-system, judicial-reform, property-rights

> In his answer to the question, “What is Law?”, French economist, statesman and author Frederic Bastiat (1801-1850) in his pamphlet The Law (1850) wrote, “The law is the organisation of the natural right of lawful defense. It is the substitution of a

**Summary:**

The Modi government's top priority should be establishing rule of law, defined per Frédéric Bastiat as organizing the natural right of lawful defense to protect persons, liberties, and properties without caste/religion bias or business interference, as this first-order public good is essential for a just and prosperous society. India's criminal justice system fails disastrously: NCRB's 2012 Crime in India report shows IPC cases disposed by courts fell from 30.9% in 1972 to 13.4%, with convictions dropping from 62.7% to 38.5%, amid ever-increasing backlogs. India has only 137 policemen per 100,000 inhabitants (vs. global median 300) and 1.4 judges per 100,000 (vs. 10). Understaffing and poor resources are issues, but structural reforms are crucial: clear property titles to cut land dispute pendency; simplified personal laws with minimal state interference (e.g., divorce); narrowing Article 12's 'State' definition to end litigation from inefficient PSUs like banks and oil firms. Governments neglect this monopoly function, prioritizing roads/electricity better handled privately, despite public outrage on fiscal deficits or onion prices. Classical liberals urge demanding accountability for swift criminal justice delivery.

**Key points:**

- India's IPC case disposal rate declined to 13.4% and conviction rate to 38.5% by 2012, with massive backlogs lowering crime costs for criminals.
- India underperforms globally with 137 policemen and 1.4 judges per 100,000 population versus medians of 300 and 10.
- Reform structurally by ensuring clear property titles, simplifying personal laws, and limiting Article 12 to reduce PSU-driven litigation.
- Elevate rule of law as top priority, demanding accountability like for fiscal deficits, while privatizing non-monopoly functions.

**By Kumar Anand**

* * *

In his answer to the question, “What is Law?”, French economist, statesman and author [Frederic Bastiat](http://en.wikipedia.org/wiki/Fr%C3%A9d%C3%A9ric_Bastiat) (1801-1850) in his pamphlet The Law (1850) wrote,

> *“The law is the organisation of the natural right of lawful defense. It is the substitution of a common force for individual forces. And this common force is to do only what the individual forces have a natural and lawful right to do: to protect persons, liberties and properties; to maintain the right of each, and to cause justice to reign over us all.”*

The Law that limits itself (role of government) to securing person, property and liberty of each individual, that does not see individuals through the lenses of caste/religion an individual belongs to, that does not intervene into the affairs of businesses; is what we should strive for. Maintaining law and order is also what some economists have called first order public good, and effective provision of this should form the top priority of any government, as it is also a prerequisite for a just and prosperous society.

How has our government performed in its primary role of implementing rule of law from which it draws its legitimacy?

According to the latest Crime in India report published by the National Crime Records Bureau (NCRB), the performance of our criminal justice system paints a grim picture, as seen in Figure 1 below.

**Figure 1: Disposal of IPC crime cases by courts – Decreasing trend**

[

![1](https://substackcdn.com/image/fetch/$s_!FVB3!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F40aafd96-7781-4c59-8e23-899a10e99e2f_607x349.jpeg "1")



](https://spontaneousorder.in/wp-content/uploads/2014/06/1.jpg)

*Source: Crime in India, 2012, National Crime Records Bureau, Ministry of Home Affairs*

The percentage of cases tried to total cases for trial and percentage of cases convicted to total cases tried showed a declining trend. These percentages were 30.9% and 62.7% respectively in the year 1972 which went down in 2012 to 13.4% and 38.5% respectively.

A similar picture is painted when we look at the absolute number of Indian Penal Code (IPC) cases brought for trial and cases in which trial was completed (Figure 2).

**Figure 2: IPC Cases for trial and their disposal by courts – Ever increasing backlog**

[

![2](https://substackcdn.com/image/fetch/$s_!vtRc!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fd4bf54d8-b6a3-47fe-b586-689e20c55866_607x342.jpeg "2")



](https://spontaneousorder.in/wp-content/uploads/2014/06/2.jpg)

*Source: Crime in India, 2012, National Crime Records Bureau, Ministry of Home Affairs*

Thus, we see that our criminal justice system fares very poorly when it comes to delivering effective outcomes. Such high pendency rates and low conviction rates decrease the cost of crime for criminals, since he/she knows that the probability of getting caught and convicted is very low.

In 2012, there were 137 policemen per 100,000 inhabitants in India. In contrast to this, according to a [United Nations report published in 2010](http://www.unodc.org/documents/crime-congress/12th-Crime-Congress/Documents/A_CONF.213_3/V1050608e.pdf), there were a median of approximately 300 policemen per hundred thousand inhabitants worldwide in 2006.

India performs even worse on the number of judges per 100,000 population. Against the world median of 10 judges per 100,000 inhabitants, India has an average of [1.4 judges per 100,000](http://pib.nic.in/newsite/erelease.aspx?relid=38105) inhabitants.

Under-staffed, starved for funds, poorly trained, poorly equipped, and possibly under-paid police and judiciary is only part of the problem. Even when these infrastructural issues gets taken care of by better funding, there are other structural issues that need immediate attention before any improvement in our criminal justice system can be considered sustainable.

1.  **Clear Property Titles:** Majority of cases pending in lower courts relate to matters of land disputes, which in turn arise because property titles are not clear. A clearly defined and absolute clarity of ownership of property will go a long way in tackling the huge pendency rates.
    
2.  **Complicated Personal Laws:** A simplification of personal laws with minimal state interference shall too go a long way in reducing the burden of our criminal justice system, for example, divorce law.
    
3.  **Article 12 of Constitution:** The definition of “the State” extends not only to central, state and local bodies, but also to authorities under the control of Government of India, such as all government-owned corporations. Not only is it a fact that owning these corporations – e.g., PSU banks, oil, coal, steel companies, etc. – makes no business sense (private corporations do a much better job), they are also a source of many legal cases that get filed as writs in higher courts.
    

When the fiscal deficit – set by none other than the Ministry of Finance itself – crosses its limit, sovereign credit rating companies get outraged and threaten to downgrade India, which in turn forces the government to course correction. When the price of onion rises suddenly, all of us get outraged and point fingers towards the government which in turn cracks down on hoarders and bans exports of specific items. More importantly, directly or indirectly, these issues form part of election campaigns and are promised to be taken care of.

However, deteriorating “rule of law” and criminal justice system hardly ever gets similar attention, even though it has been in perpetual decline. Except for lip-service provided when [incidents breach all moral conceptions of “rule of law”](http://www.livemint.com/Politics/vc7EJwTQee74aLrqnng1uO/Budaun-gangrape-All-the-five-main-accused-arrested.html), not much is seen by way of action in this regard. While roads, electricity, employment, price rise, etc., all figure very prominently in the list of things that our government focuses on – all of which can largely be provided by private corporations more efficiently and cheaply – one thing that state has a clear monopoly on, “rule of law”, gets neglected.

We simply do not demand enough accountability from our governments when it comes to the effective and quick delivery of criminal justice.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## How do we look at education data in India? Varsha Joshi at CCS

Original: https://www.spontaneousorder.in/p/how-do-we-look-at-education-data-in-india-varsha-joshi-at-ccs

Author: Spontaneous Order

Published: 2014-05-27T13:28:44.000Z

Topics: education-data, unrecognized-schools, learning-assessments, india-education-policy

> Varsha Joshi, Director with the office of the Registrar General and Census Commissioner of India was at CCS on 23 May 2014 to discuss how to look at education data in India. Having conducted the Census of India 2011 for Delhi, and with a particular inte..

**Summary:**

Varsha Joshi, with experience from the Census of India 2011 for Delhi, discussed education data sources at CCS on 23 May 2014, emphasizing their limitations and policy implications from a classical-liberal viewpoint. DISE provides incomplete pictures as unrecognized schools avoid reporting to evade regulatory pressures for recognition or shutdowns, a problem Amit Kaushik attributed to policy barriers making recognition difficult, resulting in enrollment figures that are 'just the tip of the iceberg.' Private schools often omit SC/ST data, further skewing insights. NAS, now pan-India after starting with 42 districts in 7 states and initially only government schools, assesses higher competencies in recognized schools on test day, evaluating schools rather than individual low-stakes child performance. In contrast, ASER offers a 'dipstick' on Class V basic skills for average children. Joshi advocated government embrace independent surveys like ASER, rather than viewing them as embarrassing, to prioritize actual learning over infrastructure and grade-appropriate tests. As data collection evolves to include private and emerging unrecognized school data, all sources must inform policy and practice for better education outcomes.

**Key points:**

- DISE data underreports due to unrecognized schools avoiding submission to dodge recognition mandates driven by restrictive policy.
- NAS evaluates school-level higher competencies in recognized government and private schools, evolving from limited pilots to pan-India coverage.
- ASER provides essential low-stakes assessment of basic Class V learning outcomes, which government should support instead of resisting.
- Integrate all education data sources to guide evolving policy toward real child learning rather than just infrastructure.

**By Manasi Bose**

* * *

Varsha Joshi, Director with the office of the Registrar General and Census Commissioner of India was at CCS on 23 May 2014 to discuss how to look at education data in India. Having conducted the Census of India 2011 for Delhi, and with a particular interest in data for education, gender and development, Varsha has extensive experience working with big data and how to mine and analyse data in the education space in India.

The *Chintan* was an extremely useful session for those conducting research in education as Varsha walked them through the various data portals available to them and the pros and cons of different assessments as they currently stand.

Starting with [District Information System for Education](http://www.dise.in/) (DISE) she stated that one of the biggest limitations with DISE data is the fact that unless one physically visits an area, they cannot get the full picture of the status of education. For unrecognised schools, it is left to their discretion whether or not they choose to share information with the officials, and there is no real incentive for these schools to enter into the DISE assessment, since it is more likely that once they submit this data, local education authorities will push them to get recognition, or shut them down. Amit Kaushik, Practice Head, Education & Skills Development with IPE Global, pointed out that this is more a problem with education policy than with the data collection – the reason we have so many unrecognised schools is because the law makes it difficult for them to get recognition. This then causes a problem with the enrolment figures DISE provides, which are simply the tip of the iceberg.

Another limitation to data collection, Varsha pointed out, was that a number of private schools no longer ask for information regarding SC/ST certification, though some still record OBC status. Data collectors then lose out on the picture of SC/ST enrolment.

Moving on to the [National Achievement Survey](http://mhrd.gov.in/nas1) (NAS) conducted by the NCERT, Varsha explained that it examines higher competencies of students in schools, and is essentially an evaluation of the school and not the child, for whom NAS is a low-stake test. For a child’s performance, and a focus on lower competencies, one should look at the [Annual Status of Education Report](http://img.asercentre.org/docs/Publications/ASER%20Reports/ASER_2013/4-pagers/nationalfindings-aser2013.pdf) (ASER) by Pratham.

The two tests serve different purposes – while the NAS looks at grade-appropriate requirements, the ASER is a dipstick survey to assess how well Class V students are able to manage, academically. Varsha pointed out that the government should embrace and support surveys like ASER, rather than see them as ‘coming in the way’ or ‘giving the government a bad name’. The government needs to know how the average child in a school is faring, and it says a lot about the philosophy behind our education policy, whether we focus solely on the performance of the school in terms of higher competencies and infrastructure, or also examine how much a kid in school has actually learned.

Varsha also pointed out that NAS is a representative data set, due to its pan-India presence – however it only represents those students in government or private recognised schools who show up on the day of testing. However, it was also conceded that data collection is an evolving process – when NAS began, it was a test of 42 districts in 7 states, and is now a pan-India test. Initially, it only looked at government recognised schools, where now it covers both government and private recognised schools and is beginning to talk about unrecognised schools as well.

Education data collection, analysis and usage is evolving, just as education policy itself is evolving. What we need is to put all of the available data to better use, to use it to feed into current policy and practice in education.

You can find the complete audio of her talk [here](https://soundcloud.com/centre-for-civil-society/how-to-look-at-education-data-in-india).

* * *

**About Manasi Bose**

## Is Market Riding High on Black Money Spent in Election?

Original: https://www.spontaneousorder.in/p/is-market-riding-high-on-black-money-spent-in-election

Author: Spontaneous Order

Published: 2014-05-12T10:14:58.000Z

Topics: black-money, election-spending, stock-market, indian-elections

> India’s stock market is at an all time high level. The Bombay Stock Exchange crossed 23,000 points yesterday gaining 650 points in a single day. In March itself it gained around 1300 points. Finance Minister P. Chidambaram claims the recent surge in mar

**Summary:**

India's stock market reached an all-time high, with the BSE Sensex crossing 23,000 points after gaining 650 in a day and 1,300 in March 2014, amid the world's largest electoral exercise from April 7 to May 12. Finance Minister P. Chidambaram attributes this to government efforts narrowing the current account deficit to USD 4.2 billion (0.9% of GDP) from USD 31.9 billion (6.5%) a year prior. Opposition and others credit hopes of a BJP victory under business-friendly Narendra Modi. The author dismisses these, alongside seasonal farm product factors, as insufficient for the surge. Instead, he suspects black money repatriation fueling election spending: candidate limits are INR 7 million urban/5.4 million rural, but actual spending is ~10x; exchequer costs INR 35 billion, parties ~INR 305 billion (world's second-highest after US 2012's USD 7 billion); CMS estimates INR 15,000 billion across Indian elections in past five years. Accusations fly of BJP spending INR 1 trillion. Indicators include INR 150-500 billion black money inflows via stocks, gold (seizures up to INR 2.5 billion from 172 million in 2011), hawala; P-Notes at three-year high of INR 2.07 trillion. From a classical-liberal lens wary of India's black economy and lax P-Note oversight, the author flags these as red signals warranting probe—perhaps the market is riding high on election black money.

**Key points:**

- India's BSE Sensex surged to over 23,000 points in early 2014 amid elections, but official and political explanations like CAD improvement or Modi hopes are insufficient per the author.
- Election spending vastly exceeds limits, with parties projected at INR 305 billion and total past five years at INR 15,000 billion, likely fueled by black money.
- Black money indicators include INR 150-500 billion inflows via stocks, gold smuggling (seizures at INR 2.5 billion), hawala, and P-Notes peaking at INR 2.07 trillion.
- The author urges probing whether the market high stems from black money spent on elections.

**By Amit Chandra**

* * *

India’s stock market is at an all time high level. The Bombay Stock Exchange crossed 23,000 points yesterday gaining 650 points in a single day. In March itself it gained around [1300 points](http://finance.yahoo.com/q/hp?s=%5EBSESN+Historical+Prices). Finance Minister P. Chidambaram claims the recent surge in market is due to government’s constant efforts to fix the economy by improving the [Current Account Deficit](http://businesstoday.intoday.in/story/chidambaram-says-current-account-deficit-to-be-less-than-$40-bn/1/204064.html). The CAD narrowed sharply to USD 4.2 billion (0.9 per cent of GDP) in Q3 of last financial year from USD 31.9 billion (6.5 per cent of GDP) a year ago. The opposition believes the market is riding on the hope of the change in government which has killed the business environment in the country. [Many others](http://businesstoday.intoday.in/story/bse-sensex-nse-nifty-trading-on-may-9-2014/1/206024.html) too believe that Bharatiya Janta Party (BJP) might come in power and its prime ministerial candidate, Narendra Modi who is seen as business friendly leader, will restore confidence of investors in market. Many also believe that this quarter has a natural upward tendency because of fresh farm product in the market. However, I am afraid that above mentioned factors might not be sufficient reason to give such a boost to market.

India is going through world’s largest electoral exercise, the longest election in the country’s history, from 7 April to 12 May 2014, to constitute the 16th Lok Sabha. There is limit of INR 7 million for urban and INR 5.4 million for rural election expenditure by a candidate but there is no limit on expenditure by political parties. The actual spending is expected to have been approximately 10 times the limit.

Election Commission of India estimates that the election will [cost the exchequer INR 35 billion](http://en.wikipedia.org/wiki/Indian_general_election,_2014) (USD 577 million approx.), excluding the expenses incurred for security and political parties. According to the [Centre for Media Studies](http://en.wikipedia.org/wiki/Indian_general_election,_2014), parties are expected to spend INR 305 billion (USD 5 billion approx.) in the election. This is the world’s second highest after the USD 7 billion spent on the 2012 US presidential election. According to the CMS study, more than INR 15,000 billion has been spent across various elections held in India over the past five years. Anand Sharma, Union Commerce Minister has [accused BJP](http://www.thehindu.com/news/cities/mumbai/bjp-spent-rs-10000-cr-black-money-on-poll-campaigns-anand-sharma/article5928901.ece) for spending more than INR 1 trillion in the ongoing election campaign.

India is known for its black economy with largest deposit in Swiss banks. With huge public demand to bring back black money in last few years, there is speculation that the new government might take stringent action. That might be a reason for bringing back the money secretly by those who had it outside the country, and isn’t the election right time to do this? If [stock brokers and central agencies tracking](http://indiatoday.intoday.in/story/black-money-foreign-banks-stock-brokers-gold-smuggling-hawala-lok-sabha-elections/1/352192.html) the flow of black money are to be believed, INR 150 to 500 billion has returned to India in the last few months via the stock market, gold smuggling and hawala transactions and is being spent on election campaign.

The value of [seized gold in 2014](http://indiatoday.intoday.in/story/black-money-foreign-banks-stock-brokers-gold-smuggling-hawala-lok-sabha-elections/1/352192.html) has risen to INR 2.5 billion as against INR 172.2 million in 2011. It is important to note that Participatory Notes investment surged to the highest level of three years at INR 2.07 trillion (over USD 34 billion) in March this year. [Participatory Notes](http://en.wikipedia.org/wiki/Participatory_note) commonly known as P-Notes are instruments issued by registered foreign institutional investors (FII) to overseas investors, who wish to invest in the Indian stock markets without registering themselves with the market regulator, Securities and Exchange Board of India. Investing through P-Notes is very simple and hence very popular amongst foreign institutional investors. Government of India has already identified P-Notes as one of the routes through which black money transferred outside India comes back.

It is open to believe or not since the source of information and data regarding black economy has always been a grey area. However, the above indicators do flag a red signal to further probe. So, is the market riding high on black money spent in election? May be, yes.

* * *

**About Amit Chandra**

## The Inequality Debate: Thoughts on Piketty

Original: https://www.spontaneousorder.in/p/the-inequality-debate-thoughts-on-piketty

Author: Spontaneous Order

Published: 2014-05-07T16:41:14.000Z

Topics: inequality, crony-capitalism, free-markets, monetary-policy

> The hottest thing in the market of ideas right now is the new book by French economist Thomas Piketty, “Capitalism in the Twenty-First Century“. Everyone is talking about it. Amazon has run out of stock. It is also the number one best seller on Amazon

**Summary:**

Kumar Anand critiques the hype surrounding Thomas Piketty's 'Capital in the Twenty-First Century,' which argues that returns on capital (r) exceed economic growth (g), leading to rising inequality, while questioning Piketty's academic neutrality due to his political involvement with French socialists and departure from MIT for being 'too mainstream.' Anand highlights Niranjan Rajadhyaksha's observation that while inequality within countries grows, global inequality decreases due to rapid income growth in China and India, lifting hundreds of millions toward the global average. From a classical-liberal perspective, Anand urges distinguishing between free-market capitalists and crony-capitalists, suggesting high capital returns may stem from government barriers to entry in protected sectors like oil, aviation, and defense versus competitive ones like FMCG and automobiles. He criticizes inflationary monetary policies for inflating asset prices and hurting the poor on fixed incomes, notes capitalism's dynamic nature where today's capitalists differ due to creative destruction (e.g., Facebook, WhatsApp founders), condemns 2007-08 bailouts as state distortions creating moral hazards, and contrasts market-driven value creation with wasteful state programs like UPA's employment guarantee. Ultimately, Anand argues the inequality debate should assess whether the poor are absolutely better off and if wealth arises from serving consumers or state patronage.

**Key points:**

- Distinguish crony-capitalism (government-protected sectors like oil and railways) from free-market capitalism (competitive sectors like FMCG and automobiles) when analyzing high returns on capital.
- Inflationary monetary policies by central banks elevate asset prices, harming the poor on fixed incomes while benefiting asset owners.
- Free-market capitalism dynamically rewards value creators like Facebook and WhatsApp founders while weeding out inefficient producers.
- Bailouts during the 2007-08 crisis represent state intervention, not market outcomes, by socializing losses and privatizing profits.
- Focus inequality concerns on absolute improvements for the poor and whether wealth comes from production or politics.

**By Kumar Anand**

* * *

The hottest thing in the market of ideas right now is the new book by French economist Thomas Piketty, “[Capitalism in the Twenty-First Century](http://www.hup.harvard.edu/catalog.php?isbn=9780674430006)“. Everyone is talking about it. Amazon has [run out of stock](http://www.amazon.com/Capital-Twenty-First-Century-Thomas-Piketty/dp/067443000X/ref=sr_1_1?ie=UTF8&qid=1398840283&sr=8-1&keywords=thomas+piketty). It is also the [number one best seller](http://www.amazon.com/best-sellers-books-Amazon/zgbs/books) on Amazon. The book features in the [top 20 of the New York Times best sellers list](http://www.nytimes.com/best-sellers-books/combined-print-and-e-book-nonfiction/list.html) in the non-fiction category. All this means that a lot of people are reading it and talking about it.

However, Indian readers will have to wait a bit before they can get their hands on the book. Amazon says that the book will be released in India [sometime in mid-May](http://www.amazon.in/Capital-Twenty-First-Century-Thomas-Piketty/dp/067443000X).

I have certain doubts about the academic nature of the book. My economist friend, who is also a French national, tells me that “Piketty is heavily involved politically”, and admittedly so (apparently Piketty notes in the introduction of his book that he left MIT because it was “too mainstream”). It is another matter that he uses the same techniques to make his claims in the book. Tyler Cowen and Veronique de Rugy [claim that](http://www.nytimes.com/2014/04/30/upshot/why-pikettys-book-is-a-bigger-deal-in-america-than-in-france.html?_r=0) Piketty has been “the darling of the French Socialist party and intellectuals”. While a judgement on Piketty’s book should be reserved for until we have read the book ourselves, for now, we shall limit ourselves to secondary sources of information such as book reviews, op-eds, commentaries, etc.

Niranjan Rajadhyaksha had a brilliant [piece in Mint](http://www.livemint.com/Opinion/3EtYVV1inIFRGTmDEcFCfM/Robots-offshoring-Whatsappand-inequality-question.html) providing historical, present and global context to the debate on ‘inequality’. Answering the question, “Is inequality growing?”, Niranjan observes,

> *“Inequality within countries is definitely growing. But inequality in the world as a whole is perhaps reducing because of the rapid income growth in the two most populous countries in the world: China and India. Hundreds of millions of people in these two countries have moved closer to the global average. However, the growing inequality within nations attracts more attention because politics is national.”* 

Piketty shows through his extensive study of data that while inequality has been increasing in recent decades, share of income going to capital is also going up.

Garett Jones [over at Reason](http://reason.com/archives/2014/04/26/living-with-inequality/print) does not quite agree with Piketty’s thesis, that in the long run return on capital (*r*) will be higher than the rate of growth (*g*), or, *r>g*. He uses first principles of economics to show that it is highly unlikely that in the long run return on capital will be higher than the rate of growth. For Jones, a high rate of interest means that businesses look for alternative to capital (such as labour) resulting in a decrease in demand for capital and thereby its price (rate of interest).

Few concerns comes to mind immediately when considering “rising inequality”. It becomes imperative that we understand and consider them before we pronounce judgement in the favour of or against markets, businesses, or capitalists.

-   It is most important to [distinguish](https://spontaneousorder.in/free-market-capitalism-vs-crony-capitalism/) between ‘capitalists’ and ‘crony-capitalists’. My contention would be that the much higher rate of return on capital could also be due to protection granted by the government/state to one or a few select producers. In other words, barriers-to-entry. But we need solid evidence to test this hypothesis. One way could be to see and compare the rate of return on capital in otherwise competitive industries such as FMCG, automobiles, etc., and in industries that are otherwise protected such as, oil and gas, aviation, railways, defence, etc.
    
-   While the distinction between capitalists and crony capitalists may become obvious upon a little reflection, one point that often gets lost is the relationship between crony capitalism and monetary policy. Economic theory tells us that the inflationary monetary policy followed by the Central Bankers around the world hurts poor the most. While inflationary policies keep the asset prices at an elevated level, people living on fixed income (e.g., pensioners) are hurt the most due to rising prices.
    
-   Also, under free market capitalism, the group of individuals who at any two points of time are called ‘capitalists’ are almost never the same. The system has an inherent tendency to weed out producers who are not able to serve consumers best while people who are able to create value are rewarded (e.g., founders of Facebook and Whatsapp were able to create a lot of value as demonstrated by their huge market capitalisation despite humble origins).
    
-   The bail-outs granted during the global financial crisis of 2007-08 was not within the framework of capitalism or a market economy. That was a distortionary state intervention into the markets to protect few special interests. The possibility of a golden parachutes for executives and bail-outs for companies being available for businesses, in case their enterprise fail creates several moral hazards, while socialising losses and privatising profits.
    
-   In the real world, value gets created by producing something that is demanded by people. Producing something for which there is no demand is a wasteful exercise. Majority of the tasks performed under the employment guarantee program of the UPA government is one such example. If not a complete waste, it wasn’t the most economic use of scarce resources which a market economy rewards and fosters.
    

It is easy to succumb to the notion that “the rich are getting richer while the poor are getting poorer”. Attention needs to be paid to whether the lot of poor are improving or worsening; and whether rich get richer by serving the need of others (the only way one could in a free market economy), or by availing some patronage/favour of the state (as through monopoly rights awarded by the government or by inflationary monetary policy of the central bank).

**Further readings:**

Prashanth Perumal in his Mint column presents [an Austrian critique of Piketty’s ‘Capital in the Twenty-First Century’](http://blog.livemint.com/Opinion/N73gk1TncXWrLWlmMxG78M/An-Austrian-view-on-Piketty.html).

Richard Ebeling has a [piece addressing the issue](http://epictimes.com/article/328067/the-inequality-trap-distracts-from-the-real-issue-of-freedom) and rephrasing the ‘inequality’ question as ‘whether the wealth accrues from production or from politics’.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Ek Hi Thali Ke Chatte Batte - Do Indian Voters Really Have A Choice?

Original: https://www.spontaneousorder.in/p/ek-hi-thali-ke-chatte-batte-do-indian-voters-really-have-a-choice

Author: Spontaneous Order

Published: 2014-04-09T18:23:50.000Z

Topics: indian-politics, swatantra-party, liberal-party, political-accountability

> One political party believes that it is alright to allow Foreign Direct Investment (FDI) everywhere, but in multi-brand retail. Another thinks that doling out more entitlements is the only way to ensure social justice and equality of opportunity. Even a..

**Summary:**

Indian voters lack real choice as all major political parties favor ever-greater state intervention, with one allowing FDI everywhere except multi-brand retail, another pushing entitlements for social justice, and others adding bureaucratic layers to fight corruption. Manifestos are incoherent hodgepodges tailored to caste/religious constituencies, lacking principled coherence. Parties face no accountability for unkept promises, unlike economic markets with consumer protections, as Alan Reynolds noted: 'The political market unlike economic markets, suffers from total absence of consumer protection.' No party upholds fixed principles without compromise. The author contrasts this with the 1960s Swatantra Party, which clearly outlined 21 principles for 'maximum freedom for the individual and minimum interference by the state' at its 1959 Bombay convention and practiced them. Without such principled options, voters cannot hold parties accountable. The solution is a new Liberal Party for India to provide coherent classical-liberal choice, restoring principled politics.

**Key points:**

- All Indian political parties promote state intervention and produce incoherent manifestos based on caste/religious vote banks.
- Voters cannot hold parties accountable to promises, lacking the consumer protections present in economic markets.
- The Swatantra Party exemplified principled politics with its 21 clearly stated principles for individual freedom and minimal state interference.
- India needs a new Liberal Party committed to fixed principles to offer voters a genuine choice.

**By Kumar Anand**

* * *

One political party believes that it is alright to allow Foreign Direct Investment (FDI) everywhere, but in multi-brand retail. Another thinks that doling out more entitlements is the only way to ensure *social justice* and *equality of opportunity*. Even another party believes that the best way to control corruption amongst bureaucrats and politicians is by instituting another layer of bureaucracy. And, they all believe in ever greater role for state intervention.

Amongst all this, do Indian voters really have a choice?

I fail to see a real choice available for voters. It looks as if various political parties have identified some of their core constituencies based on religious/caste lines (support base) and what issue is most important to them. They have then gone on to put it all together in one document that they call their “Party Manifesto”. A closer look at this document of all parties show that there is an absence of coherence in their thinking.

Moreover, it is not as if political parties in India are held accountable to promises made by them. And since they are not held accountable to their promises, why bother with what is promised?

When we go buy goods in the market, there is a certain implicit promise made by the seller to the buyer that he/she should expect a minimum level of utility in its quality and use. If the seller defrauds the buyer, there exists a recourse that addresses the harm caused. Such a thing is totally absent when voters choose their representatives by voting based on promises made.

The quote below by Alan Reynolds published in the National Review (1992) makes a pertinent point that is often remiss on many of us –

***“The political market unlike economic markets, suffers from total absence of consumer protection.”***

There is no political party in India today that does not compromise on its principles, that is, if they have any in the first place. A party that stands by what it says, no matter what. A party that does not swing in the direction that the current wind is blowing.

So, what is the solution?

**Needed — A Liberal Party for India**

In what may now seems like a very long time ago, India once had a real choice in Swatantra Party. The party stood for the principles of “maximum freedom for the individual and minimum interference by the state”. One may not agree with all their principles (there were [21 of them as adopted at their preparatory convention](http://www.freedomfirst.in/uploads/Swatantra/Pdf/statement-of-principles-of-the-swatantra-party-3.pdf) held in Bombay in August 1959), but at least they had outlined it clearly and to the best of my knowledge, practiced it.

In the absence of clear principles, manifestos today have become a hodgepodge of random ideas thrown in together. This makes it difficult to pre-empt their stand on any issue that may come up tomorrow which their voters can hold them accountable to.

Contrast today’s political parties with Swatantra Party of 1960s. In its clearly laid-out principles, the party demonstrated a clear vision. There was coherence in its thoughts and actions.

It is a shame that we do not have such a choice in India today. I hope we get that option soon.

Read more: [SO Musings: Liberalisation and Liberalism in India](https://spontaneousorder.in/liberalisation-and-liberalism-in-india/)

\================================================================

PS: OPEN magazine in its 7 April issue has carried a [story on Swatantra Party and Mr S V Raju](http://www.openthemagazine.com/article/nation/last-man-standing) (party’s Executive Secretary since its inception in 1959), aptly titled *“Last Man Standing”*. Mr Raju has been the editor of *[Freedom First](http://www.freedomfirst.in/)* since 1985, the magazine started by Minoo Masani.

\* *Ek Hi Thali Ke Chatte Batte* is a Hindi phrase which loosely translated could mean *Two Sides of the Same Coin.*

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Should We Remove the Cap on Campaign Expenditure Incurred by Candidates?

Original: https://www.spontaneousorder.in/p/should-we-remove-the-cap-on-campaign-expenditure-incurred-by-candidates

Author: Spontaneous Order

Published: 2014-03-24T16:52:04.000Z

Topics: campaign-finance, electoral-reform, black-money, electoral-transparency

> Consider some of the following numbers. Number of voters in country for 2014 Lok Sabha elections: 814.5 million (approx.) Number of Lok Sabha constituencies: 543 Approximate number of voters in each constituency: 1.5 million (approx.) Maximum allowed ex..

**Summary:**

The current cap on campaign expenditure for Lok Sabha candidates—Rs 7 million per candidate, equating to just Rs 4.5 per voter in a typical constituency of 1.5 million voters from 814.5 million total—is woefully inadequate, as a couple of SMSs exhausts the budget. Candidates routinely exceed this limit using black money, exemplified by Maharashtra BJP leader Gopinath Munde's admission of spending Rs 80 million (32 times the Rs 2.5 million limit) in 2009, while ADR-NEW analysis showed MPs averaging only 59% of limits, masking unreported spending. Caps fail to level the playing field, as money is not decisive—AAP's Delhi success with modest resources proves innovative campaigning matters more—and wealthy candidates like Nandan Nilekani remain constrained despite vast assets. From a classical-liberal view, expenditure caps drive black money proliferation, especially since parties face no limits, rendering candidate caps ineffective. The author recommends removing all caps on candidate and party spending, replacing them with full, transparent disclosure of donations received, expenditures incurred, and citizen contributions to enable free donations and curb illicit funding.

**Key points:**

- Current Rs 7 million cap allows only Rs 4.5 per voter in a 1.5 million-voter constituency, making legal campaigning impossible.
- Candidates exceed limits with black money, as Gopinath Munde admitted spending Rs 80 million against Rs 2.5 million limit in 2009.
- Caps fail to level the field since money is not decisive, per AAP's low-budget Delhi win.
- Remove all expenditure caps on candidates and parties, mandating full disclosure of donations and spending to reduce black money.

**By Kumar Anand**

* * *

Consider some of the following numbers.

-   *Number of voters in country for 2014 Lok Sabha elections: **[814.5 million (approx.)](http://www.newindianexpress.com/nation/India-Now-Has-814-Million-Voters/2014/02/23/article2073492.ece)***
    
-   *Number of Lok Sabha constituencies: **543***
    
-   *Approximate number of voters in each constituency: **1.5 million (approx.)***
    
-   *Maximum allowed expenditure by each candidate: **[Rupees 7 million](http://timesofindia.indiatimes.com/india/Govt-clears-Election-Commission-proposal-candidates-can-spend-more-on-campaign/articleshow/31161333.cms)***
    
-   *Maximum allowed expenditure by each candidate on each voter in his/her constituency: **Rupees 4.5***
    

Thus, a candidate can legally spend only four rupees and fifty paise to get his/her message across to a typical voter in his/her constituency. A couple of SMSs and you are out of money. It should be obvious that this sum is far too inadequate. Then the question arises, what is an adequate number?

Framed differently, “what should be the cap on campaign expenditure incurred by candidates?” Three options comes immediately to mind:

1.  We continue with the Election Commission’s way of prescribing the ceilings that sees occasional revisions.
    
2.  We instead have some sort of an inflation-indexed formula that takes care of increase in campaign costs at regular intervals.
    
3.  Have no ceiling on campaign expenditure whatsoever.
    

I recommend the third option, that is, removal of caps on campaign expenditure incurred by the candidate.

Currently different states have different limits on what a candidate can spend. The upper [limit was recently raised](http://timesofindia.indiatimes.com/india/Govt-clears-Election-Commission-proposal-candidates-can-spend-more-on-campaign/articleshow/31161333.cms) from Rs 4 million to Rs 7 million.

It is almost impossible to believe that any serious candidate manages within the prescribed limit. It was [recently reported](http://www.moneylife.in/article/does-the-election-expenses-limit-have-any-meaning/36621.html) that an analysis by Association of Democratic Reforms (ADR) and National Election Watch (NEW) shows that out of 437 MPs who submitted their election expenditure statements, on an average, MPs spent Rs 1.5 million or about 59 percent of the average expense limit in 2009. Does that mean the prescribed limit was too high and didn’t required an upward revision?

I would contend that the reality is much closer to what Maharashtra BJP leader Gopinath Munde [publically admitted last year](http://www.thehindu.com/news/national/other-states/munde-admits-spending-rs-8-crore-in-2009-polls/article4857676.ece). A lot was made of the issue when Mr Munde admitted that he had spent Rs 80 million in his 2009 election campaign for Lok Sabha, 32 times the then-official limit of Rs 2.5 million. Mr Munde was only stating the obvious – that it costs several fold the official limit to run a credible election campaign. Since the rewards on winning an election are perceived to be very high, the ‘investments’ (campaign expenditure) which candidates are willing to make, increase accordingly. Given that the prescribed limit is very low, the rest of the expenditure has to be incurred in black money and therefore collected in black money.

**Why put a cap on campaign expenditure at all?**

I believe the idea behind putting a cap on campaign expenditure is to create a level playing field so that every candidate has an equal opportunity of success, or, in other words, money-power is discounted.

*The Economic Times* [cover story reported last week](http://economictimes.indiatimes.com/news/politics-and-nation/nandan-nilekani-wife-rohini-declare-assets-worth-rs-7700-crore/articleshow/32371679.cms) that Nandan Nilekani, ex-Infosys and ex-UIDAI Chairman, who is set to contest Lok Sabha elections on Congress ticket from South Bangalore constituency, and his wife, have declared assets worth Rs 77 billion. However, the maximum he can spend on his campaign is Rs 7 million. One could argue that with resources like this, Mr Nilekani is better placed than most other candidates in his constituency. Some would say that with a cap on expenditure, as mentioned above, a level playing field is created. But is it really?

Is money the deciding factor in a candidate winning or losing an election? I would disagree. It is an important factor, but not the deciding factor. What better evidence than the recent performance of Aam Aadmi Party in the Delhi Assembly Elections, where some of the most innovative methods of campaigning in recent times were tested and a party with modest resources was able to successfully challenge the established national parties.

**Removal of cap on campaign expenditure to tackle black money**

Any [ban/cap](https://spontaneousorder.in/the-fault-in-our-firecracker-bans-examining-the-court-order-through-a-classical-liberal-perspective/) imposed by the government hardly ever leads to desired outcomes. Similarly, statutory limits on expenditure has only lead to black money having a significant role in elections.

Given that expenses by political parties do not have any specific ceiling, any ceiling on candidate’s expenditure is rendered non-consequential. ADR in its rather impressive [list of recommendations for electoral reforms](http://adrindia.org/research-and-reports/recommendations/new-and-adrs-recommendations-electoral-political-reforms-summary) suggests, *“to make the current laws on electoral expenses more effective, ceiling should be imposed on expenses during elections made by political parties as well”*. We contend that fiddling with caps on expenditure is not the answer.

[Read more: Election Funding: Who pays for our political parties?](https://spontaneousorder.in/election-funding-who-pays-for-our-political-parties/)

Instead, a more transparent system where people are free to donate to any political party/candidate of their choice (already encouraged by political parties themselves) should be preferred. Full disclosure (without limit) of donations received and expenditure incurred by political parties/candidates and donations made by citizens looks like a better alternative to me.

What do you think?

…………………………………….

Note: The number for Lok Sabha constituencies where election takes place was updated from 545 to 543 (since two members representing the Anglo-Indian community are nominated by the President of India). Hat Tip: Chandrasekaran Balakrishnan

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Swaminathan Aiyar on Economic Freedom

Original: https://www.spontaneousorder.in/p/excerpts-swaminathan-aiyar-on-economic-freedom

Author: Spontaneous Order

Published: 2014-03-21T18:50:02.000Z

Topics: economic-freedom, invisible-hand, profit-motive, free-markets

> Swaminathan Aiyar was at CCS on 14 March 2014 to discuss the importance of Economic Freedom. Check out what he had to say about the ‘invisible hand’. ….On the ‘Invisible Hand’ “I grew up at the time of Indira Gandhi and the gareebi hatao movem

**Summary:**

Swaminathan Aiyar, speaking at the Centre for Civil Society on 14 March 2014, recounted his intellectual journey from youthful socialism during Indira Gandhi's 'gareebi hatao' era—cheering bank nationalizations and believing state corporations would boost stagnant exports—to embracing economic freedom and Adam Smith's 'invisible hand.' Initially viewing private enterprise as selfishly profit-driven and detrimental to society, Aiyar, upon becoming an editor, planned a charitable trust to uplift the poor by providing three-wheeler scooters as capital. He soon grappled with regulatory hurdles like scooter licenses, the need for training, and competition against established businesses. A revelation struck: industrialists like Mr. Birla were already training millions in textile mills at massive scale, compelled by profit motives and market competition to deliver what Aiyar's non-profit efforts could not. This demonstrated how private, pro-profit processes outperform visible-hand interventions, achieving social goods like employment and skill-building unintentionally. Aiyar quoted Adam Smith: 'most good is done by people who have no intentions of doing good,' underscoring the classical-liberal case that economic freedom harnesses self-interest for societal benefit far beyond state or NGO capabilities.

**Key points:**

- Aiyar's early support for Indira Gandhi's socialism evolved into recognition that private profit motives drive large-scale training and employment.
- Regulatory barriers like scooter licenses highlight government failures in enabling entrepreneurship.
- Market competition forces businesses like Birla's mills to train millions effectively, outscaling NGO attempts.
- Adam Smith's invisible hand shows self-interested actions produce unintended social goods superior to planned interventions.

**By Manasi Bose**

* * *

Swaminathan Aiyar was at CCS on 14 March 2014 to discuss the importance of Economic Freedom. Check out what he had to say about the ‘invisible hand’.

….On the ‘Invisible Hand’

“I grew up at the time of Indira Gandhi and the *gareebi hatao* movement. I cheered the nationalisation of all the banks. I was naïve enough to believe that the reason exports were stagnant was because they were being left to the private sector, and if only they channelised it through the state corporations, exports would boom. The theology at the time was about how the entire private sector enterprise was supposedly for personal profit and could not therefore benefit society.

I became an editor and thought, with all the extra money I am going to make, I’m going to set up a trust for the betterment of people around me…I thought lots of people are doing charity but charity does not promote development. Charity means a person has enough for the day, but he’s dependent on you. There’s no way he can take off. He needs to be given some capital. My idea was to give them three-wheeler scooters, before I discovered how difficult it was to get the license for those scooters.

Then the question arose, if you’re going to give somebody some capital, what is the use of giving it to him if he doesn’t know how to operate them? You give them capital, but if they don’t have the expertise to operate them, they will surely fail.

The next question was, how do I provide the expertise to these people? I thought I could set up some training camps but then realised, these people will be competing with businessmen who have the biggest industries and the highest trained people. How will I compete with them?

It suddenly struck me then, like a flash of lightning – that Mr Birla who trains all those millions of people in his textile mills, he is doing exactly what I’m trying to do! So I did not discover the invisible hand. I was looking for the visible hand and suddenly discovered that the same business class which I looked down upon, they were doing exactly what I was attempting to do through a private process. My private process was supposed to be non-profit and theirs was pro-profit business, but the whole point was, *because* of the profit motive, Mr Birla had the scale and ability to do it all. He wasn’t trying necessarily to promote their lives, but the requirement of competing obliged him to do what I, with great difficulty, was hoping would be the outcome of my efforts as an NGO.

This is where I saw the demonstration of how Adam Smith once said *most good is done by people who have no intentions of doing good”.*

To hear his talk, click [here](https://soundcloud.com/centre-for-civil-society/excerpts-swaminathan-aiyar-on).

* * *

**About Manasi Bose**

## Interim Budget 2014-15: Same Old Same Old

Original: https://www.spontaneousorder.in/p/interim-budget-2014-15-old-old

Author: Spontaneous Order

Published: 2014-02-17T22:33:54.000Z

Topics: fiscal-deficit, government-spending, free-markets, budget-critique

> Finance Minister P Chidambaram presented the (interim) Union Budget for the financial year 2014-15 in the Parliament today. A regular budget will be presented by the new government later in the year (post elections expected in May this year). While all ..

**Summary:**

The interim Union Budget 2014-15 presented by Finance Minister P Chidambaram exemplifies ongoing classical-liberal critiques of Indian fiscal policy, prioritizing government intervention over market mechanisms. The author opposes politically driven targets like the agricultural credit goal of ₹800,000 crore for 2014-15, arguing they lead to inefficient resource allocation compared to market processes. Rights-based entitlements (e.g., right to employment, food, education) are rejected in favor of removing state privileges, dismantling trade barriers, and enabling citizen choice. Fiscal prudence claims ring hollow: the 4.6% GDP deficit for 2013-14 was met via creative accounting, RBI debt monetisation, and arm-twisting PSUs for higher dividends despite using 95% of the budgeted deficit by December. This 'socialises the costs of government spending' through inflation, harming the poor. Citing Robert Higgs' ratchet effect, the post notes rising general government expenditure as a percentage of GDP (per IMF data), unlikely to reverse. Big government creates self-fulfilling problems—e.g., inflationary policies undermining price stability, credit targets distorting markets, archaic labor laws stifling youth opportunities, and barriers hindering business—exacerbating issues it claims to solve. True progress requires recognizing government is not the solution, diminishing budget hype.

**Key points:**

- Government's 4.6% GDP fiscal deficit target for 2013-14 was achieved through creative accounting, RBI debt monetisation, and pressuring PSUs for higher dividends despite 95% usage by December.
- Oppose setting agricultural credit targets like ₹800,000 crore for 2014-15, as political allocation trumps market efficiency.
- Rights-based policies should be replaced by removing state privileges, trade barriers, and trusting citizen choices for opportunities.
- Rising government expenditure as % of GDP illustrates the ratchet effect, perpetuating big government's self-fulfilling problems.
- Break interventionist cycles by understanding government exacerbates the issues it seeks to solve.

**By Kumar Anand**

* * *

Finance Minister P Chidambaram [presented the (interim) Union Budget](http://www.livemint.com/Politics/3EV4D93YTR17RkKHIgif9K/Interim-budget-Chidambaram-says-FY14-GDP-growth-to-be-49.html) for the financial year 2014-15 in the Parliament today. A regular budget will be presented by the new government later in the year (post elections expected in May this year).

While all news channels and newspapers will analyse the budget in great detail, even when it is not a regular budget, in this post we have tried to stay away from dealing in large numbers and talk about a few things that may not find prominent mention in various other analysis.

**Figure 1: P Chidambaram on his way to the Parliament to present the (interim) budget – A quarter and a billion fate in a suitcase**  

[

![M\_Id\_461070\_Budget\_2014](https://substackcdn.com/image/fetch/$s_!ZoO9!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe6b98c12-8a14-4d7e-994e-b245494dee28_415x252.jpeg "M_Id_461070_Budget_2014")



](https://spontaneousorder.in/wp-content/uploads/2014/02/M_Id_461070_Budget_2014.jpg)

  
*Image credit: Financial Express*

### **Some issues with FM’s budget speech**

> *“As I said last year, we are not unaffected by what happens in the rest of the world. Since September 2008, the state of the world economy has been the most decisive factor impacting the fortunes of every developing country.”*

It is indeed true that India’s fate today is very much intertwined with the fate of the world economy. However, policies of UPA I and UPA II hasn’t helped India in reducing this foreign dependence.

> *“The target of 700,000 crore of Agricultural Credit is likely to be exceeded by the Banks. The target for 2014-15 is 800,000 crore.”*

We are fundamentally against such target-setting by the government. Allocation of scarce resources by the government guided by political exigency often leads to inefficient use as against an allocation done by the market.

> *“Madam Speaker, Jean Drèze and Amartya Sen have pointed out that “India was the first non-Western country – and also the first poor country in the world – to commit itself to a resolutely democratic way of governance.”*

What the Finance Minister appears to be referring to is his government’s commitment to rights-based approach to policy making (e.g., right to employment, right to food, right to education, etc.). Democratic way of governance need not necessarily mean handing out various entitlements. A truly democratic way of governance should instead focus on providing opportunity by removing various state-granted privileges, encouraging competition by dismantling barriers to trade, and encouraging choice by trusting the citizenry with independence of making their own choices.

### **Fiscal prudence or just accounting gimmickry**

Patting himself on the back, Mr Chidambaram said in his budget speech,

> *“Let me begin with the good news. The fiscal deficit for 2013-14 will be contained at 4.6 percent of GDP, well below the red line that I had drawn last year.”*

What the Finance Minister chose not to talk about was ‘how’ this was achieved. Prashant Perumal over at Mint has quite meticulously [deconstructed the accounting illusion](http://www.livemint.com/Home-Page/fQ3nPkavdIrloxMp9haGAO/Does-achieving-the-fiscal-deficit-target-mean-anything.html) built by Mr Chidambaram. According to Prashant, three ways in which the Finance Minister has achieved his not-so-modest fiscal deficit target are with help from – creative accounting of North Block (office of the Ministry of Finance), debt monetisation of the Reserve Bank of India (RBI), and the generous public sector undertakings (PSUs) which declared higher dividends than expected by the government.

While the RBI supported the government in its spending-binge by monetising the debt, PSUs were [arm-twisted](http://www.thehindu.com/business/finance-minister-seeks-higher-dividend-from-psus/article5248561.ece) into paying [higher dividends](http://www.firstpost.com/india/govt-earnings-from-psu-dividend-profit-jump-to-rs-88k-cr-1394617.html). No wonder that even when government had already used up [95 percent of the budgeted fiscal deficit](http://articles.economictimes.indiatimes.com/2014-02-10/news/47200963_1_higher-dividends-budget-estimate-psus) for FY2013-14 (April-December), it still managed to remain within the limit set by itself.

What bothers us most is the tactic of debt monetisation that has helped government meet its target by *“socialising the costs of government spending”*. Inflation thus caused hurts poor the most, the very people government claims to help.

### **Increasing size of the government**

Economist Robert Higgs’ *“[ratchet effect theory](<http://en.wikipedia.org/wiki/Robert_Higgs#The_Ratchet_effect >)“*, as explained in his book *Crisis and Leviathan* seems to apply not only in times of crisis (such as during times of war or economic depression) but also in ordinary times. No wonder the general government total expenditure (as percent of GDP) in India has shown a regular increase as seen in the figure below, and is also expected to follow the trend in the near future.

**Figure 2: General government total expenditure (as percent of GDP) – Rising trend**  

[

![chart - government expenditure](https://substackcdn.com/image/fetch/$s_!oXIz!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa7b6225c-c40c-4a70-8729-fc384b9b6b47_607x368.jpeg "chart - government expenditure")



](https://spontaneousorder.in/wp-content/uploads/2014/02/chart-government-expenditure.jpg)

  
*Source: IMF World Economic Outlook*

It is unlikely that the trend of increasing size of the government will be reversed anytime soon.

### **Big government – A problem, not a solution**

It becomes a self-fulfilling prophecy when the government assumes the responsibility of solving the problems that they themselves have created. They say they aim to achieve price stability but they continue with inflationary policies (government continues to live outside the means leading to monetisation of debt, etc.). They say they wish to revive the growth cycle but they continue to dictate the ways in which the resources will be allocated thus distorting the markets (government setting agriculture credit targets and increasing food, fuel and fertiliser subsidy, etc.). They say they wish to empower the youth and create opportunities for them, but instead of getting rid of our archaic labour laws they treat them as sacred. They say they wish to enhance investments and encourage exports, but they do not make it any easier for Indian entrepreneurs to do business and compete in the world market (India continues to lag its peers in *Global Competitiveness Report, Doing Business Report or on Economic Freedom of the World Report*).

Only way to break this cycle of self-fulfilling prophecy is by a popular understanding that the government is not the solution to all our problems. (Un)intended consequences of interventionist policies often exacerbate the problems they seek to eliminate.

I dream of a day when the process of budget making is not paid attention to as against the celebrated status it has today and the job of a Finance Minister becomes one of the most boring jobs as against THE most sought after job. And the suitcase containing the budget speech that is so famously shown before every budget (as shown in Figure 1 above) does not contain the fate of a quarter and a billion people.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## ASER 2013: Enough of Outlays, Get Started on Outcomes NOW

Original: https://www.spontaneousorder.in/p/aser-2013-enough-outlays-get-started-outcomes-now

Author: Spontaneous Order

Published: 2014-01-26T17:47:31.000Z

Topics: education, school-choice, learning-outcomes, government-spending

> The ninth Annual Survey of Education Report (ASER) was published last week. ASER is an annual household survey to assess children’s schooling (both public and private) status and basic learning levels in reading and arithmetic, among other things. With

**Summary:**

The ASER 2013 report reveals high school enrollment at 96.7% for ages 6-14, with private school share rising to 29% from 18.7% in 2006, improving facilities like usable toilets in government schools at 62.6%, but declining attendance and, critically, falling learning outcomes. In government schools, the percentage of Std III children reading Std I text dropped steadily, as did Std V children's ability to read Std II text and perform basic arithmetic like subtraction and division; private schools held steadier but also declined slightly. Despite rising government education spending—absolute amounts, as % of GDP, and per-student from Rs 9,367 to 11,509—outcomes worsen due to centralized planning and budgeting disconnected from school needs, as per PAISA reports. From a classical-liberal viewpoint, inputs like outlays fail without outcomes focus; the solution lies in decentralizing via school choice, granting parents autonomy to select schools, and removing regulatory roadblocks to private school expansion to spur competition and innovation. A major rethink is urged: let parents decide to meet children's needs effectively.

**Key points:**

- ASER 2013 shows enrollment over 96% but 78% of Std III and 50% of Std V children cannot read at grade-appropriate levels, with declines steeper in government schools.
- Government education spending has risen in absolute terms, as % of GDP, and per-student, yet learning outcomes continue to fall due to centralized systems.
- PAISA findings highlight mismatches in planning and budgeting, remote from parental or school influence.
- Shift to outcomes requires school-level autonomy via parental school choice and deregulation of private schools to foster innovation and competition.

**By Kumar Anand**

* * *

The [ninth Annual Survey of Education Report](http://www.asercentre.org/Keywords/p/205.html) (ASER) was published last week. ASER is an annual household survey to assess children’s schooling (both public and private) status and basic learning levels in reading and arithmetic, among other things. With the number of children surveyed at 569,664 from 15,941 villages of 550 districts, the sample size of ASER is larger than that of the NSS survey rounds.

Some of the [important findings](http://img.asercentre.org/docs/Publications/ASER%20Reports/ASER_2013/4-pagers/nationalfindings-aser2013.pdf) of ASER 2013 are:

1.  **School Enrollment:** Enrollment figures for children (age group 6-14) have been 96% or more since 2009, touching 96.7% in 2013. Private school enrollment stood at 29% in 2013. The number has been rising consistently from 18.7% in 2006.
    
2.  **School Attendance:** School attendance of children varies across the country. Overall, children’s attendance in government school has gone from 74.3% in 2009 to 70.7% in 2013 in primary schools and from 77% in 2009 to 71.8% in 2013 in upper primary schools.
    
3.  **School Facilities:** Facilities (available and usable) like drinking water, toilets, kitchen shed, library, etc. have been steadily improving over the years. While only 47.2% of government schools had useable toilets in 2010, in 2013 that number stood at 62.6%.
    

These are encouraging numbers. All these are inputs to achieve one thing and one thing only – providing quality education to children. But this is where the good news ends. The signs of success/failure of whether these efforts have been translating in providing quality education or not can also be found in ASER – in their surveys on learning outcomes.

The most worrying aspect of ASER 2013 continues to be the falling learning outcomes. As the report notes, “For a variety of reasons, close to 78% of children in Std. III and about 50% of children in Std. V cannot read Std. II text as yet. Without immediate and urgent help, these children cannot make progress in the education system. Grade level teaching of the syllabus cannot be done effectively unless the basic skill of reading with understanding is in place. Without this fundamental skill, the child cannot progress in other subjects either.”

The figures below shows the level of reading competency over the last five years for government and private schools separately.

**Figure 1: % Children in Std. III who can read at least Std. I level text**

[

![1](https://substackcdn.com/image/fetch/$s_!eiX8!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fd11e939b-bf1e-41ab-9eeb-e2407b47faca_481x323.jpeg "1")



](https://spontaneousorder.in/wp-content/uploads/2014/01/1.jpg)

  
*Source: ASER 2013, India Findings*

**Figure 2: % Children in Std. V who can read at least Std. II level text**  

[

![2](https://substackcdn.com/image/fetch/$s_!eo74!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fda0f86c5-77fe-4ef5-bcf7-810a0562432c_485x323.jpeg "2")



](https://spontaneousorder.in/wp-content/uploads/2014/01/2.jpg)

  
*Source: ASER 2013, India Findings*

As is evident from the figures above, the learning levels have consistently been falling in government schools while it is holding steady in private schools. The condition is equally grim when it comes to competency in basic arithmetic, as seen in the figures below.

**Figure 3: % Children in Std. III who can at least do subtraction**  

[

![3](https://substackcdn.com/image/fetch/$s_!ytEW!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F10cadecb-c163-4593-ba03-2af383f3f126_485x293.jpeg "3")



](https://spontaneousorder.in/wp-content/uploads/2014/01/3.jpg)

  
*Source: ASER 2013, India Findings*

**Figure 4: % of Children in Std. V who can do division**

[

![4](https://substackcdn.com/image/fetch/$s_!-mmm!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fb64fc49f-bbfc-46e6-a5ea-8cd918541752_485x293.jpeg "4")



](https://spontaneousorder.in/wp-content/uploads/2014/01/4.jpg)

*Source: ASER 2013, India Findings*

As seen in figures 3 and 4 above, performance of both government and private schools have declined – more so for government schools than for private schools.

Learning outcomes have been accorded due importance in various policy documents and government initiatives of recent times like the 12th Five Year Plan document’s chapter on education, Sarva Shiksha Abhiyan (SSA) guidelines for 2014-15, Economic Survey 2012-13 chapter on Human Development, etc., but there is no PLAN that takes on the issue of learning outcomes head-on and on a war-footing.

Is it the lack of resources that is causing these falling competencies? The evidence says otherwise. Not only has the total general government expenditure (Central and State governments combined) been rising, their share as a percentage of GDP and as a percentage of total expenditure has been rising as well.

**Figure 5: General Government (Central and State Governments combined) expenditure on education (in Rupees billion)**  

[

![5](https://substackcdn.com/image/fetch/$s_!0BT9!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff034b932-c8e9-4200-b301-8e01bcbc4d9f_485x293.jpeg "5")



](https://spontaneousorder.in/wp-content/uploads/2014/01/5.jpg)

  
*Source: Economic Survey 2012-13*

**Figure 6: General Government (Central and State Governments combined) expenditure on education (as percentage of GDP)**  

[

![6](https://substackcdn.com/image/fetch/$s_!oCJP!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff4fa5f70-7099-4717-9a0e-8b5e790c10c6_485x293.jpeg "6")



](https://spontaneousorder.in/wp-content/uploads/2014/01/6.jpg)

  
*Source: Economic Survey 2012-13*

Also, [PAISA Report of 2012](http://www.accountabilityindia.in/article/state-report-cards/2631-do-schools-get-their-money-paisa-report-2012) finds that per student allocation have also increased from Rs 9367 in 2010-11 to Rs 11509 in 2012-13.  
Thus we see that there has been no lack of commitment to excellence in education on the part of governments as far as resource allocation is concerned. However, steady fall in learning outcomes as seen in figures above begs the question – What are we doing wrong?

Yamini Aiyar over at the [Accountability Initiative](http://www.accountabilityindia.in/) notes some [important learning](http://img.asercentre.org/docs/Publications/ASER%20Reports/ASER_2013/ASER2013_report%20sections/yaminiaiyararticle.pdf) from their flagship PAISA survey over the years. They found that planning, budgeting and decision making are not related to learning outcomes. They also found that the entire elementary education planning and budgeting system is extremely centralized resulting in a mismatch between school level needs (even of the most basic things like inputs) and actual expenditure. Outputs and outcomes are far removed from any influence of parents or schools.

The dichotomy that exists between the centralised system of service delivery and the increasing focus on learning outcomes makes it almost impossible to get the desired results. Some pertinent questions raised by ASER and PAISA reports points in the direction that simply increasing outlays every year is not the answer. They have been highlighting that an outcomes based system requires autonomy and innovation at the school level.

What better way to have the autonomy with parents and students than by granting them the independence of going to a [school of their choice](http://schoolchoice.in/)? And what better way to encourage innovation and competition than to let many schools (private) bloom by [removing the roadblocks](http://righttoeducation.in/) in their setting up and functioning?

A major rethink of our outmoded ways of imparting education is necessary. Why not let parents and students decide who can best meet their needs?

For a quick summary of the ASER 2013, read [this](http://img.asercentre.org/docs/Publications/ASER%20Reports/ASER_2013/4-pagers/nationalfindings-aser2013.pdf) or see [this](https://www.youtube.com/watch?v=sGTqox9Kwl0).

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Free Market Fairness in Education, Tomasi Style

Original: https://www.spontaneousorder.in/p/free-market-fairness-education-tomasi-style

Author: Spontaneous Order

Published: 2014-01-07T13:38:43.000Z

Topics: education, school-choice, market-democracy, vouchers

> John Tomasi in his book Free Market Fairness makes a case for ‘market democratic’ interpretation of social justice, which he sees as a morally superior account of social justice due to its commitment to both economic liberty and a fair distribution of

**Summary:**

John Tomasi's 'Free Market Fairness' advocates a 'market democratic' interpretation of social justice, superior to 'social democratic' models because it constitutionally protects capitalist economic freedoms, limiting legislative creation of monopolies or quasi-monopolies in pursuit of social goods. This classical-liberal framework promotes market-based social construction, emphasizing decentralized decision-making, choice, competition, and innovation, particularly in education. Market democratic regimes prioritize private over public education, empowering families to choose schools and spend on education as they see fit, with government limited to licensing and broad achievement standards. This fosters polycentric competition among providers and responsible citizen attitudes, steadily improving schooling quality for all. The post highlights school choice models, like educational vouchers allowing families to select schools, as a practical path to achieving these twin objectives of choice and competition. Delaying transition to such a market democratic society hinders progress toward fairer, more innovative education systems.

**Key points:**

- Market democratic regimes constitutionally safeguard capitalist economic liberties, curbing government monopolies unlike social democratic ones.
- They leverage market mechanisms in education to maximize decision points, choice, and local information use for innovation and quality improvement.
- Prefer private education forms, empowering families to select schools while government handles minimal oversight.
- School choice via vouchers enables family choice and provider competition to realize market democratic ideals.

**By Kumar Anand**

* * *

[John Tomasi](http://www.brown.edu/Departments/Political_Science/Tomasi/index.html) in his book *[Free Market Fairness](http://www.brown.edu/Departments/Political_Science/Tomasi/books.html)* makes a case for ‘market democratic’ interpretation of *social justice*, which he sees as a morally superior account of social justice due to its commitment to both economic liberty and a fair distribution of goods and opportunities, as against the familiar ‘social democratic’ interpretations of social justice. Tomasi differentiates between the two regimes in his book as follows,        

> *Social democratic regime types do not protect capitalist economic freedoms as basic constitutional rights. As a result, they empower legislative bodies to create and administer monopolies (or heavily regulated quasi-monopolies) in pursuit of socially desirable goods. The constitutional design of market democratic regime types, by contrast, encourages market-based forms of social construction. The market democratic emphasis on capitalistic economic liberties effectively limits the reach of legislative and administrative bureaucracies with respect to distributive issues.*

[

![FreeMarketFairnessBook](https://substackcdn.com/image/fetch/$s_!tUyE!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffdb38c2a-900d-4c6e-9189-46c7fc2b76ef_275x350.jpeg "Free Market Fairness")



](https://spontaneousorder.in/wp-content/uploads/2014/01/FreeMarketFairnessBook.jpg)

Tomasi also elucidates the importance of decentralised decision making, choice, competition and innovation as seen in a market democratic regime; and its impact on education.

> *Market democratic regimes thus emphasize market mechanisms in pursuit of a superior system of education and health care for all. Instead of collectivizing decisions, the market democratic strategy is to create systems with the maximum number of decision points. By increasing choice and empowering people to make use of local information available only to them, such regimes aim to encourage innovation and improve performance on the part of the providers. By emphasizing individual choice making, such regimes encourage attitudes of personal awareness and responsibility on the part of ordinary citizens. By unleashing these forces, market democratic regimes hope to create a system that steadily drives up the quality of schooling and healthcare available to all.*
> 
> *Speaking generally, market democratic regimes prefer private over public forms of education, a preference that becomes ever stronger at higher levels of education. Such regime types seek to empower families to decide individually how much to spend on education and which type of school each of their children will attend (if they attend a school at all). By empowering families, market democratic regimes create an environment that encourages educational entrepreneurs to create novel and diverse forms of schooling. The government might play some oversight role in licensing schools and requiring that broad-gauged achievement standards be met.*

In Tomasi’s market democratic world, choice for families/students and competition among service providers reign supreme.  

> *The thrust of schooling within market democratic societies is toward a system of polycentric competition among providers and empowered decision making families.*

[School choice model](http://schoolchoice.in/aboutus/index.php) of education, through provision of educational voucher to families who in turn spend vouchers at a school of their choice, is one such way of achieving the twin objectives of choice and competition. We delay our progress towards a market democratic society at our own peril.

——————————————————

PS: John Tomasi will be speaking tomorrow at the [Asia Liberty Forum](http://acenetwork.asia/alf2014/program) in New Delhi. His talk will be followed by book signing. For registration and other details, please contact: Srijan: ACE@ccs.in | +91-9953672130

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## An Open Letter to Aam Aadmi Party

Original: https://www.spontaneousorder.in/p/open-letter-aam-aadmi-party

Author: Spontaneous Order

Published: 2013-12-21T16:47:03.000Z

Topics: minimal-government, labour-regulation, school-vouchers, education-reform, fdi-retail

> Dear Mr. Kejriwal Please accept my heartiest congratulations on your party’s historic win in the Delhi Assembly Elections against all odds. It is clear to everyone now that Aam Aadmi Party (AAP) is a force to reckon with and has a mandate that will see

**Summary:**

Kumar Anand congratulates Arvind Kejriwal and the Aam Aadmi Party (AAP) on their Delhi Assembly election victory, recognizing their anti-corruption mandate and shift to lawmaking. However, from a classical-liberal economics perspective, he critiques AAP's manifesto for policies that, despite good intentions, will produce unintended consequences like higher unemployment and inefficiency. Filling all vacant government posts ignores Delhi's advantages in infrastructure and private business potential, advocating instead for minimal government to foster private employment. Banning contractual jobs for year-round work, enforcing minimum wages, and regulating domestic workers' hours will deter hiring, push capital-intensive production, and squander India's cheap labor advantage; better to enforce contracts and improve legal systems. Improving government schools and hospitals to private standards requires introducing choice and competition via vouchers, as in Nordic countries, rather than direct provision. Regulating private school fees addresses symptoms, not the supply shortage caused by onerous infrastructure rules under Delhi RTE—ease entry barriers to boost low-fee private schools. Opposing FDI in retail and targeting hoarders prevents efficient pricing; promote competition and remove trade barriers. Anand urges AAP to prioritize markets, incentives, and minimal intervention for the common man's benefit, appreciating their elevated political discourse.

**Key points:**

- Filling vacant government posts will expand bureaucracy rather than create sustainable private employment—focus on minimal government and business-friendly conditions.
- Banning contractual jobs and regulating wages will increase unemployment by discouraging labor hiring and favoring capital—enforce contracts instead.
- Introduce school and health vouchers to leverage competition and incentives, emulating Nordic successes, over subsidizing government facilities.
- Ease Delhi RTE infrastructure norms to increase private school supply and curb high fees, avoiding price controls.
- Support FDI in retail and remove trade barriers to ensure efficient pricing and affordability, rejecting government price dictation.

**By Kumar Anand**

* * *

Dear Mr. Kejriwal

Please accept my heartiest congratulations on your party’s historic win in the Delhi Assembly Elections against all odds.

It is clear to everyone now that Aam Aadmi Party (AAP) is a force to reckon with and has a mandate that will see them as either a part of next government or as the principal opposition party in the Delhi legislative assembly. Basically, you have graduated from being an anti-corruption activist to being a LAWMAKER. Congratulations once again.

Many of my friends and relatives are big supporters of your party. I must confess, until recently I have only known AAP as a crusader against corruption. It was only last week that I happened to go through the [summary version of your election manifesto](http://www.aamaadmiparty.org/Manifesto-for-Delhi) on your website to understand your agenda on various issues. There are many path-breaking initiatives that are praiseworthy. Some of them make me very hopeful – your plan to curb corruption in public offices, initiatives to increase security measures, devolution of power to local bodies like *gram sabhas*, etc.  

However, I must admit that there are some pertinent questions being raised in my mind – questions on aspects of your proposed initiatives that contradicts many of the fundamental lessons I have learnt in my study of economics.

Let us assume that all the members of AAP are honest and hard-working people. We also assume that they succeed in implementing their manifesto. The unintended consequence of such policies will be:

***“For increasing employment AAP shall fill all vacant government posts.”***

As you have correctly identified, unemployment is indeed on the rise. However, I am not sure that filling up all vacant government posts is appropriate response. Your party should endeavour to make conditions conducive for private businesses to set up in Delhi. There are already many advantages this city enjoys – home to the best airport in the country, possibly the best public transport (Delhi Metro) and the best infrastructure in the country (you must not forget to thank all the taxpayers of the country who have paid for all these great facilities that Delhites have come to enjoy), and other benefits that comes automatically from being the political capital of the country.

You must endeavour to keep the size of the government at bare minimum to run a tight and efficient administration. Please remember, as [Ronald Reagan](http://en.wikipedia.org/wiki/Ronald_Reagan) has said, *“You can’t be for big government, big taxes, and big bureaucracy and still be for the little guy.”*

***“No contractual jobs for work that is required 365 days a year; ensuring implementation of minimum wages. …** **regulating wages and working hours of domestics workers”***

You seem like a smart, educated, sincere and considerate guy, unlike most of our politicians. And therefore I believe you will be willing to consider ideas that may prove your stand on a particular issue wrong, but which are correct and beneficial for people of Delhi, your constituents.

I am afraid that your plans to dictate terms of contract between two parties involved in voluntary exchange – as your plan to ban contractual job that requires work round the year and regulating wages does – will backfire. I am sure this plan is founded on good intentions (presumably, providing safeguards to migrant-labourers  and others working on daily wages who are routinely exploited), but the likely effect and an unintended consequence of your proposed plan is *higher unemployment.* When laws are so written that it becomes difficult to hire and fire people based on mutual agreement, and wages are determined by the government, the natural response of entrepreneurs will be to replace labour with capital. Delhi, as India has a natural advantage in terms of availability of cheap labour. What we lack is capital. Your plan is going to make businesses adopt capital-intensive techniques of production, disregarding our natural advantage which only hurts the *common man* you seek to protect and benefit.

Your party should focus on enforcing contracts and in sprucing up legal system such that no one is defrauded and timely resolution of conflicts take place.

***“Government schools to be made as good as private schools. …Government health care facilities would be improved (and made as good as private hospitals) so that all citizens of Delhi – rich or poor – have access to high quality health care.”***  

It is heartening to see that you have noticed that private schools and hospitals provide superior service than their government counterparts. It is also commendable that you would like to improve government schools and hospitals.

However, I am disappointed to see that you have stopped short of asking a more fundamental question as to how private schools and hospitals are able to provide better service at lower cost. It is due to the “role of incentives”. The only meaningful way through which you could hope to accomplish your goals is by bringing in *choice* and *competition* in the operation of schools and hospitals. Provision of education and health services through *vouchers* may just be the answer you are looking for – an idea that many of the Nordic countries have used to great effect. *Voucher* is an idea that gives choice to customers (students and patients in this case) by giving them the option of choosing service provider (schools and hospitals) of their choice, private or public.

***“A law would be introduced to regulate high fees and donations in private schools and colleges.”***

Yes, you have rightly identified the problem of sky-rocketing fees charged by private schools. But you must also ask why things have come to such a pass.

First principles of economics tells us that it is because of the mismatch in demand and supply. Regulating high fees charged in a voluntary exchange (in this case between school management and parents) will not solve the problem of *limited supply* of seats in private schools. But you can certainly help with easing up the norms of opening a private school. You can begin by amending the Delhi RTE rules and relaxing the onerous requirement of infrastructure that have imposed prohibitive entry barriers for opening a private school. This will increase the influx of low-fee private schools that exists only because they are patronised by students and parents.

***“Opposing FDI in retail Industry … strict action against hoarders.”***

There is no one *best price* that the government can and should try to find and dictate. Creating conditions for ensuring market prices can be the only best response of the government that will help ensure the most efficient allocation of resources.

You cannot stand for making things affordable for the *common man* while at the same time oppose FDI in retail. Competition among various kinds of retailers will help ensure that. Also, strict action against hoarders will not help curb occasional jump in prices of certain commodities. Removing trade barriers will. Howsoever we may like to, we cannot legislate away scarcity.   

As a *common man* trying to make a living in Delhi, these are some of my areas of concern which I hope you will take note of and find ways to address.

At the very least, you have certainly raised the level of debate in this country and brought some serious competition amongst a field dominated by age-old political parties. For once, no one wants to identify with a politician with a criminal background. You have certainly raised the bar of expectations that we as the *common man* have from public offices. We very much appreciate your efforts to that end.

Yours sincerely,

Ek Aam Aadmi

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Happy Birthday Minoo Masani!

Original: https://www.spontaneousorder.in/p/happy-birthday-minoo-masani

Author: Spontaneous Order

Published: 2013-11-20T11:36:48.000Z

Topics: swatantra-party, indian-liberals, classical-liberalism, liberal-history

> Today marks the 108th birth anniversary of Minocher Rustom Masani (1905-1998), popularly known as Minoo Masani. Masani was a three-time Member of Parliament and a leader of the Swatantra Party in India. In the inaugural essay for Profiles in Courage apt..

**Summary:**

Today marks the 108th birth anniversary of Minoo Masani (1905-1998), a three-time Member of Parliament and leader of India's Swatantra Party, celebrated as one of the few who kept the spirit of liberalism alive after independence. In S V Raju's inaugural essay for Profiles in Courage, titled 'Minoo Masani: The Making of a Liberal,' Masani's intellectual journey is traced: from admirer of the Soviet Union and 1930s socialist, to freedom fighter disillusioned with Soviet communism, thoughtful reconsiderer of socialism in the 1940s, anti-communist crusader in the early 1950s, and finally a full-fledged liberal with the Swatantra Party's formation in 1959. Initially influenced by Harold Laski at the London School of Economics—like Nehru and Krishna Menon—Masani astutely recognized contradictions in socialist thought and broke away. Alongside figures like B R Shenoy and R B Lotvala, Masani stood out for his independent thinking, prioritizing reason and evidence over dogma, even amid fierce opposition. The post hails this as a courageous story of self-discovery, urging contemporary liberals—as free markets and classical liberalism gain ground—to match Masani's standards by questioning assumptions and adapting to what works.

**Key points:**

- Minoo Masani evolved from Soviet admirer and socialist to classical liberal leader via the Swatantra Party founded in 1959.
- Masani rejected Harold Laski's socialism after spotting its contradictions, unlike contemporaries like Nehru.
- He exemplified independent thinking by prioritizing reason and evidence over ideological stubbornness amid opposition.
- Modern liberals should emulate Masani's courage in questioning failing ideas as free markets gain acceptance.

**By Kumar Anand**

* * *

Today marks the 108th birth anniversary of [Minocher Rustom Masani](http://en.wikipedia.org/wiki/Minocher_Rustom_Masani) (1905-1998), popularly known as Minoo Masani. Masani was a three-time Member of Parliament and a leader of the [Swatantra Party](http://en.wikipedia.org/wiki/Swatantra_Party) in India.

[

![Masani](https://substackcdn.com/image/fetch/$s_!P1-v!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fcdad4e61-26f8-4387-b61d-bb0a16fdd002_267x351.jpeg "Masani")



](https://spontaneousorder.in/wp-content/uploads/2013/11/Masani.jpg)

In the inaugural essay for *[Profiles in Courage](http://ccs.in/ccsindia/pdf/profiles_in_courage.pdf)* aptly titled *“Minoo Masani: The Making of a Liberal”*, his long time associate S V Raju has described him as a man among those very few who kept alive the spirit of liberalism in India after independence.

Masani’s development as a thinker-philosopher and politician can best be described by the titles of different sections in S V Raju’s brilliant ode to the man and his life. To a layperson, his evolving beliefs through the years may resemble that of a flip-flopper, but upon closer examination one will find that they were of a hero. From being an admirer of the Soviet Union to being a freedom fighter, from being a socialist in 1930s to become disillusioned with Soviet Communism, from a thoughtful reconsideration of Socialism in 1940s to becoming an anti-communist crusader in early 50s, Masani never took things lying down. With the formation of Swatantra Party in 1959, his spontaneous journey to liberalism was complete.

[Harold Laski](http://en.wikipedia.org/wiki/Harold_Laski), Britain’s most influential intellectual spokesman for Socialism in the interwar years and a professor at the London School of Economics where Masani also studied, was a revered figure to Indian students in England at the time such as Jawaharlal Nehru and V K Krishna Menon. S V Raju writes that while Masani too came under his spell, he was fortunate and smart enough to soon see the contradictions in Laski’s thinking and move away.

The most inspiring thing about Masani (and others like him such as B R Shenoy and R B Lotvala) is that he was independent in his thinking and listened only to reason and evidence, even in the face of extreme opposition and adversity. When he saw that something is not working, instead of being stubbornly and blindly tied to a particular philosophy and method, he questioned the assumptions and kept his eyes and ears open to find something that did. Today when the ideas of free market and classical liberalism are more acceptable and gaining currency, we would do well to meet the standards set by Masani and other liberals of planning era.

Indeed, his is a courageous profile and an awesome story of self-discovery.

Happy Birthday Minoo Masani!

Read more about Minno Masani : [https://spontaneousorder.in/masani-state/](https://spontaneousorder.in/masani-state/)

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Remember, remember, the fifth of November

Original: https://www.spontaneousorder.in/p/remember-remember-fifth-november

Author: Spontaneous Order

Published: 2013-11-05T12:35:11.000Z

Topics: guy-fawkes-day, government-overreach, limited-government

> Remember, remember, the fifth of November, The Gunpowder Treason and plot. I know of no reason why the Gunpowder Treason Should ever be forgot. Today is Guy Fawkes day. You may recall him from the guy whose story Evey Hammond (Natalie Portman) tells at ..

**Summary:**

This brief post commemorates Guy Fawkes Day on November 5th, recalling the failed 1605 Gunpowder Plot to blow up the House of Lords and its popularization via the film V for Vendetta. It frames Guy Fawkes as a symbol against growing government encroachment on daily life, quoting V: 'People should not be afraid of their governments. Governments should be afraid of their people.' From a classical-liberal viewpoint, it urges remembrance of this event amid expanding state power.

**Key points:**

- Guy Fawkes symbolizes resistance to government overreach, as highlighted in the context of the 1605 Gunpowder Plot.
- The post invokes V for Vendetta to argue that governments should fear the people, not vice versa.

**By Kumar Anand**

* * *

*Remember, remember, the fifth of November,*

*The Gunpowder Treason and plot.*

*I know of no reason why the Gunpowder Treason*

*Should ever be forgot.*

Today is Guy Fawkes day. You may recall him from the guy whose story Evey Hammond (Natalie Portman) tells at the beginning of the movie “*[V for Vendetta](http://en.wikipedia.org/wiki/V_for_Vendetta_\(film\))*“. Guy Fawkes is famous for the being the guy who planned the failed Gunpowder Plot of 1605. The plot was to blow-up the House of Lords on 5 November 1605. Today when more and more affairs of our daily life are being encroached upon by the government, it is more so important to remember the man and his idea.

[

![guy-fawkes-mask-black-white-freedom-photos-pictures-200117](https://substackcdn.com/image/fetch/$s_!snc0!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F7da9b6f9-bc3d-4ffb-912a-5ac2d4c1324c_1920x1200.jpeg "guy-fawkes-mask-black-white-freedom-photos-pictures-200117")



](https://spontaneousorder.in/wp-content/uploads/2013/11/guy-fawkes-mask-black-white-freedom-photos-pictures-200117.jpg)

In the spirit of the words of  V, [the protagonist](http://www.youtube.com/watch?v=LF1951pENdk) in the movie *V for Vendetta*, “People should not be afraid of their governments. Governments should be afraid of their people.”

Here is all that you wanted to know about the [Gunpowder treason plot](http://en.wikipedia.org/wiki/Gunpowder_Plot_in_popular_culture).

Happy Fifth of November!

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## US Government Shutdown: For Better or for Worse?

Original: https://www.spontaneousorder.in/p/us-government-shutdown-better-worse

Author: Spontaneous Order

Published: 2013-10-14T13:44:00.000Z

Topics: government-spending, fiscal-responsibility, law-vs-legislation, hayek

> The United States federal government shut down on 1 October 2013 as Republican-led House of Representatives (commonly known as “the Congress”) failed to pass a budget or a continuing resolution for the fiscal year beginning October 1. At the heart of

**Summary:**

The 2013 US government shutdown, triggered by Republican efforts to defund Obamacare and cut spending amid debt ceiling debates, is portrayed positively as it enforces separation of powers and sparks necessary debate on bloated government. President Obama's letter praises essential services like national security and parks but omits burdensome activities such as regulations, taxes, and clearances that hinder daily life, glossing over them with 'and much more.' Federal spending ballooned from $114 billion in 1960 to $3,923 billion in 2012—a 3,600% increase at 7.27% annually—raising questions about necessity. Drawing on Hayek's distinction in *Law, Legislation and Liberty*, the author differentiates spontaneous, judge-found common law from top-down legislation by parliaments, arguing much modern government activity is illegitimate overreach. Not all legislation is lawful; many laws could be scrapped for societal benefit. The US shutdown mechanism is beneficial, akin to India's underused Fiscal Responsibility and Budget Management Act of 2003, which should have binding limits to curb expanding government and enforce discipline.

**Key points:**

- US federal spending surged 3,600% from $114 billion in 1960 to $3,923 billion in 2012, averaging 7.27% annual growth.
- Hayek distinguishes spontaneous common law, evolved from social expectations, from top-down legislation that often exceeds legitimate government bounds.
- Government shutdowns like the 2013 US event usefully force debate on spending cuts and overreach via separation of powers.
- India's FRBM Act 2003 should impose binding fiscal limits to prevent redundant flirting with expenditure ceilings.

**By Kumar Anand**

* * *

The United States federal government shut down on 1 October 2013 as Republican-led House of Representatives (commonly known as “the Congress”) failed to pass a budget or a [continuing resolution](http://en.wikipedia.org/wiki/Continuing_resolution) for the fiscal year beginning October 1. At the heart of contention is the Congress’ desire to delay or defund the Patient Protection and Affordable Care Act (commonly known as “Obamacare”) and Democrat-led Senate and the President insistence on including Obamacare in the Appropriations Bill. The US constitution vests the budget making powers with the Congress while the President reserves the power to veto.

The Republican-controlled Congress is seeking spending cuts in exchange for an increase in debt ceiling. The White House on the other hand is [unwilling to negotiate](http://www.foxnews.com/politics/2013/10/08/obama-digs-in-over-fiscal-impasse-calls-boehner-to-say-wont-negotiate/) on a government funding bill or debt limit increase, thus requiring the furlough of non-emergency personnel and curtailment of agency activities and services.

In a [letter](http://upload.wikimedia.org/wikipedia/commons/6/6d/POTUS-letter.pdf) written to the employees of the United States Government, President Barack Obama said,

> *Today, I wanted to take a moment to tell you what you mean to me – and to our country. That begins by saying thank you for the work you do every day – work that is vitally important to our national security and to American families’ economic security. You defend our country overseas and ensure that our troops receive the benefits they deserve when they come home. You guard our borders and protect our civil rights. You help small businesses expand and gain new footholds in overseas markets. You guide hundreds of thousands of people each day through the glory of America’s national parks and monuments, from Yosemite to the Statue of Liberty. And much more.*  

Notice how the things mentioned by Obama may look harmless on the face of it and a majority of people would have no qualms in agreeing that they are legitimate and necessary roles of the government.

The speechwriter for Obama was careful in mentioning the few presumably essential public services provided by the government while obfuscating all the others that make life difficult for the common man under the umbrella title of *“and much more”.* There are a number of other services provided by the government that create hindrances for the people in their daily business with each other. The part of government bureaucracy that requires issuing clearances, collecting taxes, regulating businesses, fighting wars at home and abroad, etc. do not find explicit mention.

The chart below shows how the federal government expenditure has been increasing over the years *–* from a figure of US$ 114 billion in 1960 to US$ 3923 billion in 2012. This is an increase of about 3600 percent over a period of 52 years (clocking an average annual increase of 7.27 percent over the same period).

[

![Untitled](https://substackcdn.com/image/fetch/$s_!hV7r!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3fbf6530-80f3-4059-b4a0-5a073e6cdb16_1163x696.jpeg "Untitled")



](https://spontaneousorder.in/wp-content/uploads/2013/10/Untitled.jpg)

How much of this increase in the size of government was necessary? Members of Congress in the US much like our parliamentarians in India are also called *law-makers*. This could be a misleading term. There is a clear distinction between *law* and *legislation* as understood and explained by Friedrich Hayek which is often lost on many of us. A lot of what the government has come to do today is not what they need be doing in the first place, efficiently or not. Suppose tomorrow a bill is passed in the parliament making a separate department of the government responsible for bringing bread, milk and eggs to the doorstep of each household, and forcing every person in the country to have the exact same meal for breakfast. And in another bill passed it is suggested that it is acceptable for people to kill each other. That killing people has become legal does not make it right or lawful. It thus becomes important that we are always conscious of the difference between law and legislation. Not all legislation passed by the law-making body of the land is lawful.

There is a distinction between laws that are made by kings and elected- parliamentarians and laws that are found through an exploratory process. Hayek greatly admired the Common Law *–* the law that came out of British courts starting in the middle ages *–* as it was not a judge-*made* law but a judge-*found* law. The law is found based on the prevailing social expectations. The Common Law is law that evolves from individual behaviour in a spontaneous manner without being directed by an individual (King) or a group of individuals (Congressmen and Parliamentarians). More on this can be found in the first volume of Hayek’s *Law, Legislation and Liberty.*

A closer look at the laws governing any democratic country today would suggest that we can do away with a majority of what the government does to great benefit for all of us.

The separation of power laws that makes the US government shutdown a possibility in the event of non-passage of budget or a continuing resolution is helpful as it generates debate on cost-benefit of issues of dispute. In [Fiscal Responsibility and Budget Management Act of 2003](http://en.wikipedia.org/wiki/Fiscal_Responsibility_and_Budget_Management_Act,_2003), we too have a law institutionalising fiscal discipline. However, time and again we have flirted with the limits imposed on the Central Government expenditure almost making the act redundant. It is high time we made the limits of FRBM Act binding and restrict the ever expanding government.

**Other interesting reads on the subject:**

Economist Manika Premsingh over at [India Spend](http://www.indiaspend.com/) has some [crude estimates](http://www.indiaspend.com/cover-story/a-30-day-shutdown-in-india-31-reduction-in-fiscal-deficit-85492) of what it would cost Indian economy if the Government of India were to shut down. She estimates that a 30-day shutdown of the central government will lead to a 31 percent reduction in the estimated fiscal deficit for 2013-14.

Here is a [brief take](http://reason.com/blog/2013/10/13/plenty-of-waste-big-and-small-nick-gille) on the hypocrisy of the US Government shutdown by [Reason magazine’s](http://reason.com/) Nick Gillespie that we completely indentify with.

Max Borders and Jeffrey Tucker over at [FEE](http://www.fee.org/) have a [fascinating piece](http://www.fee.org/the_freeman/detail/fifty-ways-to-leave-leviathan) detailing 50 ways people are working to overcome obstacles imposed by the government. A must read for all.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Easier to Marry, Difficult to Separate

Original: https://www.spontaneousorder.in/p/easier-to-marry-difficult-to-separate

Author: Spontaneous Order

Published: 2013-09-17T12:14:44.000Z

Topics: divorce-reform, marriage-laws, individual-liberty, hindu-marriage-act

> – with inputs from Deeksha Gehlot Marriage is a private affair; a Hindu couple does not need to go to any court to get married. However, when these two individuals decide mutually to part, they need court’s approval. “We have filed for divorce by mu

**Summary:**

Marriage for Hindu couples is a private affair requiring no court approval, but mutual consent divorce demands court intervention, a one-year separation period, joint first motion, and a six-month cooling-off period before a second joint petition—processes that cause delays, financial strain, and harassment, particularly harming women due to their shorter reproductive window and weaker bargaining power. The pending Marriage Laws (Amendment) Bill, 2013, passed by Rajya Sabha on 26 August 2013, seeks to waive the six-month wait at court discretion and allow waiver of the second motion if one party absents for three years. From a classical-liberal view, state-imposed delays protect a moral notion of marriage as an institution, infringing individual liberty; judicial intervention fails to protect women and worsens their position; and fears of deception are addressed by Indian Contract Act provisions for fraud, with safeguards like registration. The author advocates divorce by simple deed, minimal regulation for this private contract, arguing the state has no role in separations just as it lacks one in marriages.

**Key points:**

- Hindu mutual consent divorce requires one-year separation and six-month cooling period, causing delays and harming women more than men.
- The 2013 Marriage Laws (Amendment) Bill, pending in Lok Sabha, allows courts to waive the six-month wait and second motion after three years' absence.
- State moral protection of marriage violates individual liberty; divorce should be a private deed enforceable under contract law with registration safeguards.
- Judicial delays exacerbate women's bargaining disadvantage rather than protect it.

**By Prashant Narang**

* * *

– **with inputs from Deeksha Gehlot**

Marriage is a private affair; a Hindu couple does not need to go to any court to get married. However, when these two individuals decide mutually to part, they need court’s approval.

*“We have filed for divorce by mutual consent but it’s taking too long. We were asked to find a way to work out differences by the court, which hasn’t worked. Given how expensive rents are in Mumbai, I am constrained to live in the same flat”,* says a husband seeking a legal opinion online.

On 26 August 2013, Rajya Sabha passed the [Marriage Laws (Amendment) Bill, 2013](http://www.prsindia.org/uploads/media/Marriage%20Laws/Marriage%20Laws%20Bill%20as%20passed%20by%20RS.pdf) to do away with the waiting period of six months for moving a joint petition of second motion after the first one for grant of divorce by mutual consent. The bill is still pending in the Lok Sabha. Currently, divorce by mutual consent requires three conditions: (a) living apart for one year; (b) the first motion for divorce should be in the form of a joint petition, and; (c) after the lapse of a six month cooling period, there should be a second motion in the form of a joint petition.

The one year separation requirement causes many complications. The couple must either plan their separation a year in advance or be stuck in an unwanted marriage for a year. Adjournment culture adds further to the unwanted delay so much so that at times it is used by one party to harass the other in order to prohibit the other from being able to remarry. This mostly affects women adversely as due to biological differences, women have a shorter reproductive age as compared to men which leaves women with a lesser bargaining power. Also a full year gets wasted in which both parties (wife and husband) have to forego opportunities with other possible partners.

The Marriage Laws (Amendment) Bill, 2010 was seeking doing away with the long waiting period before divorce by mutual consent by amending section 13B of Hindu Marriage Act. However, the Standing Committee has always favoured a longer duration for divorce. The objectives as stated or implied by the committee are: (a) marriage as an institution must be protected and divorces must be discouraged; (b) a divorce must involve judicial intervention to protect the interest of women as women have less bargaining power, and; (c) divorce by a mere deed escalates the probability of deception among the parties.

The first reason that marriage as an institution must be protected is a moral opinion. The State should refrain from making such moral assumptions as different individuals have different moral opinions. To make a law based on a moral opinion takes away  our individual liberty of practicing one’s morality. Since marriage is a private affair, there should be as little regulation as possible.

With respect to the second reason, judicial intervention has been justified on the ground of women’s protection as women have  lesser bargaining power. However, as explained above, a woman is often worse off due to delay in getting a divorce. Clearly, women would be better off if they could get divorce by just signing a divorce deed instead of going through the long legal procedures.

The third reason reveals the skepticism to deception in case of a divorce by deed. The Indian Contract Act has provisions to deal with fraud, deception etc., where one of the parties has allegedly expressed consent under duress or undue influence. Similarly, there could be skepticism to unconscionable terms of divorce, however, this skepticism is not unique to marriage; it exists in all forms of contracts where one of the parties is weaker than the other. There can be a safeguard in the form of registration or signing before a legal authority to ensure that the parties are aware of what they are doing. Family and friends too can provide support to individuals while negotiating.

The Marriage Laws (Amendment) Bill, 2013 has provided some relief by adding the following two provisions to section 13B of the Hindu Marriage Act:

1.  The court has the discretion of reducing or completely waiving off the period of six months for another joint petition
    
2.  If one of the parties does not appear in the court within three years of the first joint petition then court may waive the requirement of moving a (second) motion by both the parties
    

The state does not choose who you will marry. The state does not choose a ceiling age for you to get married by. The state does not choose why you have to get married. So then why should you be at the mercy of the state when choosing to separate?

* * *

**About Prashant Narang**

## Impact of National Cyber Security Policy on Education in India

Original: https://www.spontaneousorder.in/p/impact-of-national-cyber-security-policy-on-education-in-india

Author: Spontaneous Order

Published: 2013-09-11T19:23:33.000Z

Topics: cyber-security-policy, education-technology, entrepreneurship-barriers, rural-development

> The government released the first draft of the National Policy on Cyber-security in July 2013. The policy aims at building a secure and resilient cyberspace for citizens, businesses and Government. The full document can be accessed here at: National Cyb..

**Summary:**

The National Cyber Security Policy 2013 draft is superficial and vague, failing to distinguish between national cyber security threats and cyber crimes, which risks excessive government interference in private sector activities. From a classical-liberal viewpoint, this vagueness could impose undue entry barriers on new cyber-dependent entrepreneurs, particularly in India's burgeoning e-education sector. The policy's broad mandate might ensnare low-risk firms, evaluated via cyber exposure (proportion of operations online), national security exposure (criticality to security), and global exposure (cross-border operations)—e.g., rural e-lesson providers score high on cyber but low on others. This threatens startups like Educom, Pearson, and Pratham, scaling via the National Optical Fiber Network connecting 2.5 lakh Gram Panchayats to enable rural education, financial inclusion, and e-medicine. Post-liberalization, light cyber regulations fueled e-commerce booms by bypassing real estate and credit hurdles; now, with a tens-of-billions USD education market and demographic dividend, overregulation could stifle IT-savvy youth entrepreneurs serving the poor. The policy is a right step but its discretionary powers risk bureaucratic overreach, quelling online education innovations unless vigilantly refined into law.

**Key points:**

- The policy's failure to differentiate national security threats from cyber crimes invites overreach into private firms' cyber operations.
- New e-education startups in rural India, reliant on optical fiber networks for 2.5 lakh Gram Panchayats, face heightened entry costs from vague compliance requirements.
- Light past cyber regulations enabled entrepreneurial booms in e-commerce; similar vagueness now threatens edtech scaling.
- Vigilance is needed to prevent the policy's evolution into law from imposing unnecessary barriers on low-risk education innovators.

**By Arvind Ilamaran**

* * *

The government released the first draft of the National Policy on Cyber-security in July 2013. The policy aims at building a secure and resilient cyberspace for citizens, businesses and Government. The full document can be accessed here at: National Cyber Security Policy 2013.  
As TRAK.IN article says, the policy is very superficial and lacking-in-details, especially for a document which the government has been trying to draft for more than a year now. Given the inherent vagueness of the policy and while awaiting any further clarification from the government, one can presume that the effect of this policy will be felt by organizations in sectors whose relevance to cyber-security would be mildly appreciable. This concern is punctuated by the fact that the policy simply terms all concerns as ‘cyber threat’ instead of distinguishing clearly between ‘national cyber security threat’ and ‘cyber crimes’. The former needs a much graver concern than the latter. And by failing to appreciate the difference in the policy itself, there is a high potentiality of the government interference in cyber-security concerns of private sector to an extent more than what is required. For the sake of analysis, one can evaluate the overall exposure of a firm to the policy along 3 dimensions, cyber exposure, national security exposure and global exposure. The ultimate measure of impact would be the weighted sum of all these three factors.  
Cyber exposure, is the proportion of total operations that happens on the cyber space. National security exposure, measure of how critical the operations of an organization to the national security. Global exposure, measure of the geographical spread of the operations of the firm. Global exposure is especially contentious given the cross-border laws and regulations involved. For example, IT firm working on defense project of a foreign country would score high on all factors whereas an education-services firm providing e-lessons to kids in rural India would score high on the first indicator but low on the other two etc.  
The gravest concern in any national policy or any regulation for that matter is the entry barrier it poses to the new entrants. The world today is being increasingly ‘cyberized’. An ever increasing amount of economic activity has shifted to the cyber-space, e-commerce and e-banking, being highly recognized developments. But in a way these developments and the larger proliferation of e-firms in India was facilitated by the lack of strait-jacket regulations in the sector. Such a situation whose credibility could be questioned still served as the jumping board for a large section of self-styled entrepreneurs who couldn’t circumvent the regulations choking the conventional entrepreneurial environment in the nation. I wouldn’t be surprised if difficulty in procuring affordable real estate at the appropriate time was stated as the primary and availability of credit as secondary of the greatest challenges to healthy entrepreneurial activity in the country. In the last few years, we have seen the rise of numerous multi-retail online stores, e-outlets for major brands, online bazaars for wholesale sell/buy etc. By integrating the operational space and logistical platform into one portal, the firms were able to cut down on a lot of administrative and operation costs. Such a cut-back helped numerous firms to compete at miniscule differences in profit-margins.  
The National Optical Fiber Network being built by the Bharat Broadband Network Limited working in coordination with other PSUs, aims to provide pan-India internet connectivity. This is will provide all of the existing 2.5 lakh (approx.) Gram Panchayats with internet connectivity. This opens a whole new dimension to the rural economic sphere. Financial inclusion, Spot futures for farmers, e-medicine etc. are just some of the many boons to follow. But over and above the rest, it is education and medicine whose exposure to internet in rural India, I value the most, given their potential impact on the overall development of the nation.  
In the post-liberalization era, given the demographic dividend of the nation, education has been a great attraction for both the profit and non-profit sector. In the for-profit sector, the attraction is by virtue of the potential market size in all the sections of primary, secondary and higher education sector. In the non-profit sector, entrenched poverty, large-scale illiteracy etc. brought the world’s attention to the development needs of the nation. Education was seen as a solution to all the problems with the presumption that it will lead to increased employability. The boom of the IT sector indeed made this wish true till the end of the first decade of the millennium. But as job prospects fall in tandem with the employability of India’s educated youth, the focus on education has intensified like never before. There are hundreds of NGOs and tens of Foundations working in the country towards making education more accessible to the poor as well addressing issues like gender discrimination, social inclusion of physically/mentally challenged children and class based discrimination. But given, the amount of money and effort that has gone into the sector, most of the veterans in the field agree that the expected impact hasn’t been yet achieved. The inefficacy of philanthropic interventions has brought about a certain pessimism in the minds of development sector professionals. But the gloom is parallel witnessing the rise of technology based education solutions for children in India. Educom, Pearson, Pratham etc. are just some of the organizations that are in this e(du)-sphere.  
Many of these organizations and many other start-ups in the pipeline are greatly relying on this optical fiber network to scale-up their ventures and reach the remote areas where access to quality education has always been marred by lack of competent teachers and other supportive resources. These firms in the process of scaling up will inevitably fall under the purview of the National Cyber Security Policy given the wide mandate the policy has provided for itself. Also due to lack of distinction between critical levels of cyber-activities with respect to national security, for the purpose of compliance with the policy, the policy stands in the position of possibly imposing a higher entry cost for firms and organizations. Even with conservative estimates, the education market in India is worth tens of billions in US dollars. The demography to be served is also widely distributed providing a fertile ground for a new wave of entrepreneurs in the sector. This is a great opportunity for Indian youth to build upon the IT expertise we have developed, thanks to the IT revolution in the country. As things stand, there is a great demand and great possibility for quality supply especially given that the beneficiaries are going to be lower sections of the economic hierarchy in the country, we should be all the more supportive of the momentum. In the light of the above, the fear is that, the Cyber Security Policy could be interpreted much widely than essential for securing national security. This will be a great obstacle to the blossoming online entrepreneurs/development professionals in delivering the targeted products/interventions to the target population. As of now, there is no idea about the compliance cost for this policy. But one can envisage the difficulties that might arise given the bureaucratic history of the Indian state.  
The National Cyber Security Policy 2013, is a step in the right direction but its inherent vagueness combined with the discretionary powers of the State bureaucrats could quell the upcoming online entrepreneurs by increasing their entry cost. This is especially bad for the education sector given the rising number of tech-based solutions for mitigating the education problems of the nation. We will have to be vigilant about the evolution of this policy into a full-fledged bill and strive to correct any deviation of this policy into areas where it could be a bane rather than a boon.

* * *

**About Arvind Ilamaran**

## Raghuram Rajan: From Rajpath to Mint Road, Challenges Galore

Original: https://www.spontaneousorder.in/p/raghuram-rajan-from-rajpath-to-mint-road-challenges-galore

Author: Spontaneous Order

Published: 2013-08-08T18:27:00.000Z

Topics: rbi-governor, monetary-policy, central-bank-independence, indian-economy

> At a time when the Indian economy is in serious trouble, the Government has done well to appoint Dr Raghuram Rajan as the 23rd Governor of the Reserve Bank of India (RBI). Dr Rajan is a very accomplished and experienced man with his earlier stints as th..

**Summary:**

The appointment of Raghuram Rajan as the 23rd RBI Governor is timely amid India's economic woes, including a rupee at historic lows of 61.30 against the dollar, a looming sovereign credit rating downgrade, and the lowest growth rates entering an election year. Rajan, with credentials as IMF Chief Economist, current Chief Economic Advisor, University of Chicago professor, and author of the 2007 'A Hundred Small Steps' financial reforms report, is well-suited to tackle these challenges without a 'magic wand.' The author urges Rajan to resist pressures from the Finance Ministry and PMO, emphasizing RBI's historical lack of independence. RBI faces conflicting goals, such as ensuring macroeconomic stability while managing government debt cheaply, which undermines price stability by keeping interest rates too low. Data problems exacerbate issues: WPI ignores consumer prices, and volatile IIP is unreliable, leading market participants to proxies like HSBC PMI. The author recommends prioritizing money and credit aggregates over headline price indices for better real inflation gauging. From a classical-liberal viewpoint, Rajan's intellectual rigor and reformist background position him to minimize damage and push for clearer central bank objectives, though systemic changes may take time.

**Key points:**

- Raghuram Rajan's appointment as RBI Governor is opportune given India's economic crises like rupee depreciation to 61.30 and potential credit downgrade.
- RBI's conflicting mandates, including cheap government debt management, undermine macroeconomic and price stability goals.
- Poor data quality, such as unreliable WPI and IIP, hampers monetary policy; focus on money and credit aggregates instead.
- Rajan must maintain independence from Finance Ministry and PMO pressures to effectively steward policy.

**By Kumar Anand**

* * *

At a time when the Indian economy is in serious trouble, the Government has done well to appoint Dr Raghuram Rajan as the 23rd Governor of the Reserve Bank of India (RBI).

Dr Rajan is a very accomplished and experienced man with his earlier stints as the Chief Economist at the International Monetary Fund, as his current position of Chief Economic Advisor to the Government of India, and as a professor at the University of Chicago’s Booth School of Business, to name a few. He was also the chairman of the high level committee in financial sector reforms set up by the Planning Commission in 2007. The report of the committee, *[‘A Hundred Small Steps’](http://planningcommission.nic.in/reports/genrep/rep_fr/cfsr_all.pdf)* is well worth the read.

His appointment to the office of the Governor of RBI comes at a very opportune time. Opportune not because it is a good time to occupy the office, but because we needed a competent man to ride us through these troubled times. In Dr Rajan, we may have the right man.

The challenges facing Indian economy today are numerous and onerous. India is on the verge of a sovereign credit rating [downgrade](http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/standard-poors-sceptical-of-recovery-raises-spectre-of-downgrade/articleshow/21694575.cms). Indian rupee is trading at its [historic lows](http://economictimes.indiatimes.com/markets/forex/rupee-closes-at-fresh-low-of-61-30-down-53-paise-against-dollar/articleshow/21681466.cms) and the worst may not be over yet. All this when India enters into an election year with the lowest growth rate seen in recent times. As has rightly been pointed out by Dr Rajan himself, there is [no magic wand](http://www.firstpost.com/economy/no-magic-wand-to-fix-economic-challenges-says-raghuram-rajan-1015619.html) to fix economic challenges. All this poses a great challenge to anyone in-charge of the country’s monetary policy. However, under the circumstances, I cannot think of anyone more suited to do the job.

We hope that Dr Rajan disconnects himself from any and all demands from the North Block (Ministry of Finance) and the South Block (Prime Minister’s Office). Historically this has not been the case. It is no secret that Finance Ministry wields considerable influence over the RBI. Dr Rajan’s [views on economy and polity](http://www.livemint.com/Politics/Z2HKxWKmkg2BXX6M43NNGL/Raghuram-Rajan-on-central-bankingin-his-own-words.html) as suggested through his numerous publications, suggests that he may have a difficult time if he plans to stick to his guns. For economy’s sake, we hope he does.

In what follows, we have tried to look at some of the features of the institution that Dr Rajan will soon be heading.

**RBI’s Conflicting Goals**

India’s central bank has historically been marred due to conflicting goals which are themselves not very clearly defined. For example, on the one hand RBI has to ensure the overall macroeconomic stability while it is also in-charge of managing government debt (public debt management). The task of managing government debt at a low cost causes RBI to engage in activities such as keeping the interest rate too low, which poses problems for other objectives of monetary policy like price stability.

What is the role of a central bank? What are its primary objectives? What should be the policy instruments at its disposal to achieve those objectives? These are not straight-forward questions to answer. In RBI’s case, things may be more muddled than some of the other central banks around the world. Changes required are systemic and may need more time than we can afford right now. Therefore, for now it becomes even more imperative to minimise the damage.

**The Problems with the Data**

Present RBI governor D Subbarao has on numerous occasions suggested that the quality of macro data available in India is very poor. For example, wholesale price index (WPI) and the index of industrial production (IIP), two of the indices that RBI looks at while formulating changes in its monetary policy. As is evident from the name itself, WPI is not a good proxy to observe changes in average prices faced by the common man since it looks at wholesale prices. The volatility in IIP data is such that a majority of market participants have stopped following the trend in IIP and have instead started following other proxy measures (such as HSBC PMI score, car and van sales number, etc.) to make a sense of the real economic activity.

Given that the inputs (WPI and IIP) are either not the right measure or are unreliable at best, it is only logical that the output (changes in monetary policy) is questionable. It is hard to imagine a sailor to be headed in the right direction with a broken compass. Any substantial improvement in the quality of data would require changes in established institutions and processes. The enormous body of economic research that Dr Rajan has done should come very handy in deciding what indicators to look at and what to ignore.

Putting our two cents worth in, we suggest that Dr Rajan and his team gives greater focus to trends in money and credit aggregate numbers (real inflation) rather than worry about fluctuations in headline numbers of price indices, whether it is wholesale prices or consumer prices.

**Concluding Remarks**

Raghuram Rajan is 50 now. This is a very young age for a man with academic and intellectual pursuits. Governorship at the RBI is just one more addition to an already glittering list of accomplishments of Dr Rajan. We wish him all the best as the new custodian of India’s monetary policy.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Uttarakhand Floods – The Role of State in Rescue, Relief and Rehabilitation

Original: https://www.spontaneousorder.in/p/uttarakhand-floods-the-role-of-state-in-rescue-relief-and-rehabilitation

Author: Spontaneous Order

Published: 2013-07-08T13:41:30.000Z

Topics: disaster-relief, decentralization, knowledge-problem, government-failure

> (Image courtesy: ibnlive.in.com) Rescue, relief and rehabilitation of those affected by the Uttarakhand flash floods is still in progress. While the efforts of state government have been criticised, efforts of armed forces have been lauded by various ob..

**Summary:**

In the Uttarakhand flash floods, armed forces have been praised for mobilizing hundreds of helicopters and tens of thousands of trained professionals for rescue and relief, while state government efforts faced criticism. The author argues that centralized government agencies like India's National Disaster Management Authority (NDMA) are ill-suited for effective disaster response due to three key problems identified by Russell Sobel and Peter Leeson in their Cato Institute analysis: bureaucracy causing delays, coordination failures from top-down decision-making, and adverse incentives. Drawing on Friedrich Hayek's 'The Use of Knowledge in Society,' the post emphasizes the knowledge problem—dispersed local knowledge cannot be centrally aggregated, necessitating decentralization where ground-level actors have authority to deploy resources. While governments possess vast resources, they should empower local implementers rather than direct from above. The author highlights voluntary private efforts, such as ragpickers donating Rs 20,000 and community feeding initiatives, and urges governments not to obstruct them. Conclusion: Decentralized approaches, informed by Hayekian insights, are preferable for rescue, relief, and rehabilitation, with further exploration of market and non-profit roles needed.

**Key points:**

- Centralized disaster agencies suffer from bureaucratic delays, coordination failures due to top-down decisions, and adverse incentives, as per Sobel and Leeson's Cato analysis.
- Hayek's knowledge problem requires decentralizing authority to local actors who possess dispersed information on relief needs and resources.
- Armed forces excelled in Uttarakhand by rapidly deploying massive resources, but more ground-level decision-making is needed.
- Governments should avoid hindering private voluntary and community-based relief efforts, as seen in donations and grassroots support during the floods.

**By Kumar Anand**

* * *

[

![Uttarakhand rescue](https://substackcdn.com/image/fetch/$s_!Hpis!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe886b062-126a-4b06-9740-c90fc6c7a4a4_630x420.jpeg "Uttarakhand rescue")



](https://spontaneousorder.in/wp-content/uploads/2013/07/Uttarakhand-rescue.jpg)

(*Image courtesy: ibnlive.in.com*)

Rescue, relief and rehabilitation of those affected by the Uttarakhand flash floods is still in progress. While the efforts of state government have been criticised, efforts of armed forces have been lauded by various observers of the developments in Uttarakhand.

There could be two approaches in response to any disaster. First, how best to address the problem at hand of providing swift relief and rescue to those affected, and second, how can such an unfortunate event be avoided through policy actions if the cause is anthropogenic in nature. For the purpose of this post, we are limiting to addressing the first issue. That is, once the calamity is upon us, how best to address it.

Who is best suited to provide relief and rescue? It would occur to most that the government with enormous resources at its disposal is best placed to address such a calamity. There is merit in such belief. After all, it is hard to imagine private voluntary organisations mobilising hundreds of choppers and tens of thousands of trained professional on a short notice like the armed forces did in Uttarakhand flash floods last month. However, it is also important to tread carefully when looking up to a central government agency for solutions.

An interesting work that highlight the inherent deficiencies of a central disaster management agency has been done by Russell Sobel and Peter Leeson. In a [policy analysis](http://www.cato.org/publications/policy-analysis/flirting-disaster-inherent-problems-fema) done for the [Cato Institute](http://www.cato.org/), authors argue that federal government usually neither has the incentive nor the information needed to effectively coordinate relief management.

The authors have identified three problems in the delivery of disaster relief when conducted by a central government organisation: *the problem of bureaucracy, the problem of coordination and the problem of adverse incentives.*

As Sobel and Leeson demonstrate, result of the multiple layers of bureaucracy inherent to centralised decision-making is usually slow and delayed action. We do not have many accounts from Indian experience that critiques or lauds bureaucratic efficiency in times of emergency. However, it is quite likely that the bureaucratic processes that have been practiced for decades are not abandoned over-night. In such a scenario, it is again logical that more often than not decisions and orders flow from the top (minister or the top bureaucrat) to the bottom (those on the ground implementing those decisions made for them). This brings us to the next problem, the *problem of coordination.*

Drawing insights from the 1945 article *‘[The Use of Knowledge in Society](http://www.econlib.org/library/Essays/hykKnw1.html)‘* by Nobel prize winning economist Frederich Hayek, the specific knowledge of circumstances which must be made use of (more so in times of emergency) never exists in concentrated or integrated form to be used by anyone in its totality. In fact, the dispersed bits of incomplete and frequently contradictory knowledge is possessed separately by different individuals. In his attempt to solve this problem, Hayek suggests that this problem must be solved by some form of decentralisation. Individuals with local knowledge and the ability to act on it must have a greater say in the decisions of rescue, relief and rehabilitation.

The knowledge of what relief supplies are needed, who needs them and who has the best means to meet those needs is necessarily dispersed. The issue then becomes, how best to utilise such dispersed knowledge. A case can be made that only the government has the resources to swiftly address a situation like the one being faced by Uttarakhand today. In such a scenario, maybe more authority and power to demand and deploy specific resources should be left to people on the ground implementing rescue and relief activities rather than directed from above.

(We are leaving *‘the problem of adverse incentives’* and the role of market (private profit-making organisations)and non-profit making charitable and community based solutions to be addressed in a separate post.)

India has a central organisation in [National Disaster Management Authority](http://ndma.gov.in/ndma/index.html) (NDMA). It is not quite clear what role NDMA is performing in ongoing rescue and relief work in Uttarakhand. While the armed forces have come to take the lead in rescue and relief work, there are independent stories of people voluntarily providing the support to those in need (as documented [here](http://ibnlive.in.com/news/uttarakhand-ragpickers-from-delhi-donate-rs-20000-for-relief-fund/402107-3-243.html), [here](http://www.indianexpress.com/news/others-to-the-rescue-grocery-store-keeper-friends-feed-over-800-a-day/1133925/) and [here](http://www.indianexpress.com/news/in-flood-of-grief-hope-miracles-heroism-float/1132549/0)).

Who should provide the rescue and relief work? How should it be done? Can such an activity be incentivised? Is it immoral to charge disaster victims (exorbitant or not) for rescue and relief?  Is government the only one equipped to tackle such a situation? These are not easy questions to answer. However, Hayekian insights of *knowledge problem,* as developed and applied by Sobel and Leeson suggests that decentralisation of disaster relief and management is the preferred option. Also, the least the government can do is not get in the way of private voluntary efforts for relief, rescue and rehabilitation.

I invite you to share stories, articles, experiences and thoughts that can help illuminate the subject under discussion here.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Maharashtra Self-financed Schools Act: Harming the Poor in the Name of Public Good

Original: https://www.spontaneousorder.in/p/maharashtra-self-financed-schools-act-harming-the-poor-in-the-name-of-public-good

Author: Spontaneous Order

Published: 2013-06-19T13:34:30.000Z

Topics: education-regulation, private-schools, entry-barriers, school-choice

> The essence of regulation is the idea that regulations are required to safeguard constituencies a free-market fails to care for. The idea that market or private players when left to themselves will be unable to serve the needs of the people or public in..

**Summary:**

The Maharashtra Self-financed Schools (Establishment and Regulation) Act, 2012, exemplifies how government regulations create entry barriers that reduce the supply of affordable private schools serving the poor and lower middle class, contradicting the rationale for intervention to protect public interest. These low-cost private schools, charging less than Rs. 300 per student per month, deliver similar or better education than government schools at lower expense, yet the Act mandates depositing funds in nationalized banks as an 'endowment fund' and requires at least 0.5 acres (2000 sq.m) of land in Mumbai or suburbs, costing crores—feasible only for government or wealthy players. This restricts competition, raises fees, and lowers quality, harming the poor most. Data from SES 2010-2011 reveals shortages: transition from Class VIII (1,805,165 students) to IX (1,610,138) needs 3,000 more schools at 65 students per upper primary school and PTR of 32; Class X (1,465,538) to XI (1,213,314) needs 2,305 more at PTR 40, with 85.7-89% schools private (29-19.4% unaided). Amid teacher shortages, such barriers exacerbate dropouts and poor education, as private unaided schools fill gaps government cannot.

**Key points:**

- Maharashtra's Act imposes land (0.5 acres in Mumbai costing crores) and endowment fund requirements that block low-cost private schools charging under Rs. 300/month.
- Entry barriers reduce competition, forcing poor families into unaffordable private options or low-quality government schools.
- SES 2010-11 data shows need for 3,000 more secondary schools (Class VIII-IX transition) and 2,305 higher secondary (X-XI), mostly reliant on private unaided schools.
- Regulations ignore ground realities like teacher shortages, hurting students' futures in the name of public good.

**By Arvind Ilamaran**

* * *

The essence of regulation is the idea that regulations are required to safeguard constituencies a free-market fails to care for. The idea that market or private players when left to themselves will be unable to serve the needs of the people or public interest has been the long standing Brahmasthra for justifying government intervention in the education sector. But what if the government does the very thing it wasn’t supposed to do? What if the government instead of adding to the supply of private schools, reduces the supply of private schools? What if these private schools spend much less money than the government schools and provide similar or better education than the latter? What if these private schools cater to the needs of not the upper middle class and the rich but the lower middle class and the poor? What if government made regulations that stop the entry of such schools into the market and force parents to choose either costlier private schools which they cannot afford or the government schools whose lack of quality impelled them to chose the low-budget private schools in the first place?  
Well, the government of Maharashtra is doing precisely that. But before turning to how it is doing this in detail, we need to understand what they are doing it in principle.

Economists have a useful term called ‘entry barrier’. This term is used to denote the obstacles faced by a new person wanting to enter a certain field of business. Delivering education is a service and like any other object in the market it has a cost—somebody has to pay for it. If you don’t pay for it directly, someone else must as in the case of government schools which are funded through taxes. At the end of the day money has to be spent by someone to buy things and hire people to run the school. Artificial entry barriers add additional costs and restrict competition. And less competition allows existing businesses to dictate higher prices (‘school fees’) and deliver lower quality. Even though there are a lot of possible entry barriers to a new entrant, government policies remain one of the strongest deterrent to new business in the sector. Given that the time, money and effort involved in dealing with red tape is so huge, a lot of potential businessmen turn away. When people turn away, opportunities for better quality education at lesser cost are lost. In such a scenario, it is poor people who suffer the most—in the name of the public interest.  
The Maharashtra Self-financed Schools (Established and Regulation) Act, 2012, is an excellent specimen of “innovative” regulation to improve education which creates such harmful barriers.

The Act calls for self-financing schools of local authorities and private sector to deposit a certain amount of money in the nationalized banks (only) in the form of National Security Certificates or Fixed deposits under the name of ‘endowment fund’. This is just one aspect of the act but it is difficult to imagine the utility of such funds except as a means to increase the liquidity of banks. Some of the area requirements fail to convey the rationale behind their formulation. Secondly, paragraph 12 of Schedule A of the act mandates that the school should have at least 0.5 acre of land area (2000 sq.mtr approx.) in Mumbai or in suburban-Mumbai. In today’s prices, the cost of such a piece of land in the city of Mumbai runs into couple of crores. To expect low-budget unaided private schools which charge mostly less than Rs. 300 per student per month, pay in crores of rupees in land and related costs imposes a significant obstacle for new schools to come up in the private sector. Ultimately only the government which has significant amount of tax payer money or very rich private individuals who have large money at their disposal would be able to start new schools or upgrade the existing ones. This, instead of making education more accessible will make it less accessible by increasing the cost of education for the student.

Thirdly, let us take examples of two transitions, the movement from class VIII to class IX (upper primary to secondary school) and class X to class XI (secondary to higher secondary). According to the SES data from the website of Ministry of Human Resource Development for the year 2010-2011, the number of students in class IX was 1,610,138 and that of class VIII was 1,805,165. The average number of class VIII kids per upper primary school is 65, this is including the various single teacher schools. For the PTR (Pupil-teacher-ratio) to remain at least 32 we will need at least 3000 more schools (1805165-1610138/65). This is in the secondary school division where nearly 85.7% schools are private out of which 29% are private unaided schools. The issue becomes much more pronounced in the case of transition from secondary to senior secondary. Following the lines of previous case, the number of students in class X is 1,465,538 and in class XI is 1,213,314. Given that the numbers of senior secondary schools are 5019, the average number of Class XI students per school is 241. But their PTR is approximately 40. If the same number of students have to be at the RTE mandated PTR, 303,329 students from class XI will have to be removed, hence adding this number to the difference between class X and XI, the new number of students entering class XI would be, 555,553. This number will require 2305 more schools. And even in the case of senior secondary schools nearly 89% of them are private out which nearly 19.4% are private unaided-schools. As observed above, with such a large deficiency in terms of government’s capability to provide access to education, increasing the entry barriers to private players will only end up hurting the students and their future.

We haven’t even accounted for the severe teacher shortages across the country which plagues the situation further. Are those making these regulations aware of the ground scenario in the education sector? Given the above data, it is hard to fathom the reason behind Maharashtra government’s regulation to increase the cost of entering the education market to new players. As shown above, the largest and worst impact will be on students who will have to drop out due to increased costs or won’t get quality education due to the excessive difficulty of the system to absorb the excess strength. The tragedy is that many people judge these regulations by government’s fair intentions but fail to recognize the cost to a huge portion of the future of a generation of children.

* * *

**About Arvind Ilamaran**

## Dissolving Caste with Capitalism

Original: https://www.spontaneousorder.in/p/dissolving-caste-with-capitalism

Author: Spontaneous Order

Published: 2013-06-11T19:15:18.000Z

Topics: capitalism, caste, dalits, free-markets

> If you haven’t read it yet, you should read the Indian Express’ great interview with Milind Kamble and Chandra Bhan Prasad on how ‘Capitalism is changing caste much faster than any human being [and why] Dalits should look at capitalism as a crusader

**Summary:**

The post argues from a classical-liberal perspective that capitalism dissolves caste by transitioning society from status-based associations determined by birth to voluntary contract-based relationships, as famously described by Henry Maine. Drawing on an Indian Express interview with Dalit entrepreneurs Milind Kamble and Chandra Bhan Prasad, it highlights how markets prioritize ability over birth, enabling anonymity and cooperation among strangers, making prejudice costly. Ayn Rand's definition underscores capitalism's basis in individual rights and voluntary interactions via reason and contract. Even Marx and Engels acknowledged in the Communist Manifesto how the bourgeoisie pitilessly tore asunder feudal ties, replacing them with cash payments and constant revolutionizing of production that melts rigid social structures. The author critiques decades of Nehruvian socialist planning for shackling India in stagnation under the guise of solidarity, trapping Dalits in status-based hierarchies. In contrast, 20 years of relatively freer markets have begun transforming Dalit lives toward contractual freedom. Prasad's insight that 'markets have become bigger than caste' exemplifies this shift, urging liberals to promote capitalism as the true crusader against caste for further progress.

**Key points:**

- Capitalism shifts human associations from status (birth-determined) to contract (voluntary choice), undermining caste as per Maine and Rand.
- Markets respect ability over birth, fostering anonymity and making prejudice economically costly, as noted by Chandra Bhan Prasad.
- Marx observed the bourgeoisie dissolving feudal ties through self-interest and production revolutions, a process capitalism accelerates.
- Nehruvian planning guaranteed Dalit stagnation, but 20 years of freer markets have started transforming their lives via open commerce.

**By Andrew Humphries**

* * *

If you haven’t read it yet, you should read the Indian Express’ great interview with Milind Kamble and Chandra Bhan Prasad on how [‘Capitalism](http://www.indianexpress.com/news/capitalism-is-changing-caste-much-faster-than-any-human-being.-dalits-should-look-at-capitalism-as-a-crusader-against-caste/1127570/0) *[is changing caste much faster than any human being \[and why\] Dalits should look at capitalism as a crusader against caste’](http://www.indianexpress.com/news/capitalism-is-changing-caste-much-faster-than-any-human-being.-dalits-should-look-at-capitalism-as-a-crusader-against-caste/1127570/0).*

Henry James Sumner Maine famously wrote that the progress of civilization has been a progression from association based on “status” to association based on “contract,” from relationships and duties determined at birth to ones entered into by consent.

This progress is intimately intertwined with the development of capitalism. “Capitalism,” according to [Rand](http://aynrandlexicon.com/lexicon/capitalism.html), “is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.”

> “In a capitalist society, all human relationships are voluntary. Men are free to cooperate or not, to deal with one another or not, as their own individual judgements, convictions, and interests dictate. They can deal with one another only in terms of and by means of reason, i.e., by means of discussion, persuasion, and contractual agreement, by voluntary choice to mutual benefit.”

Liberals generally welcome the way individual choice and commerce have undermined feudalism, caste, sexism, nationalism, and chauvinism of various kinds.  Markets allow for cooperation among strangers, which allows for more anonymity.  Acting on prejudice is costly when what you’re looking for in the market is a competitive service, not a personal relationship.  Ability to serve, therefore—not birth—is what’s relevant.  As Chandra Bhan Prasad says in the interview, “markets have become bigger than caste…because in this marketplace, only your ability is respected.”

Marx and Engles described this graphically in the *[Communist Manifesto](http://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch01.htm),* though they didn’t totally approve of it:

> The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his “natural superiors”, and has left remaining no other nexus between man and man than naked self-interest, than callous “cash payment”. It has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade.

Marx saw that the fluidity and voluntary nature of the market order promoted individualism and undermined rigid social structures.

> The bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form, was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air…

It’s a pity Marx’s negative view of a fluid and impersonal market prevailed and that India was shackled under decades of Nehruvian planning. Instead of the dynamic potential of lifting oneself up in an open market, Indians were stuck with the static plans of bureaucrats.  In the name of brotherhood and solidarity, Dalits were guaranteed stagnation. But thankfully 20 years of relatively freer markets have done wonders in starting the transformation of Dalit lives from relationships based on status to ones based on contract. Prasad and others get it.  If they keep spreading the good word, what could happen in the next 20 years?

* * *

**About Andrew Humphries**

## KEEP IT UP UPA

Original: https://www.spontaneousorder.in/p/keep-it-up-upa

Author: Spontaneous Order

Published: 2013-06-06T19:38:38.000Z

Topics: land-titling, property-rights, land-reforms, economic-liberalization

> Mint reports today that cabinet has approved changes in titling law that will make ownership of land more transparent by introducing amendments to the Registration Act of 1908. The act governs the registration of documents and sales transactions for mo...

**Summary:**

The Indian cabinet's approval of amendments to the Registration Act of 1908 aims to make land ownership more transparent through clear titling and universal digitization, with profound implications for land markets from a classical-liberal viewpoint. This reform promises to clarify titles, drastically reducing the 70-80 percent of pending court cases involving title disputes, facilitating easier land acquisition for industrial projects and enabling landowners to access institutional credit. Drawing on Hernando de Soto's 'The Mystery of Capital,' the author argues that India's poor lack formal representations of property—houses without titles, crops without deeds—preventing assets from becoming productive capital essential for domestic capitalism. Rural Development Minister Jairam Ramesh highlighted India's archaic presumptive land records, where ownership is assumed unless disproved, fueling disputes unlike conclusive systems elsewhere. While praising the diagnosis and the government's push toward conclusive titles, the author notes the 24-year delay since the 1988-89 Computerisation of Land Records scheme began, urging aggressive implementation to unlock dead capital and transform India's economy.

**Key points:**

- Cabinet approves changes to the Registration Act of 1908 to introduce transparent land titling and digitization.
- 70-80% of pending land cases in courts involve title issues, which clear titling will dramatically reduce.
- Clear titles will ease industrial land acquisition and enable landowners' access to institutional credit.
- India's presumptive land records, unlike conclusive ones abroad, cause disputes; reforms aim to fix this per De Soto's framework.
- Government must aggressively implement digitization, delayed since the 1988-89 CLR scheme, to realize benefits.

**By Kumar Anand**

* * *

Mint [reports today](http://www.livemint.com/Politics/nq80BbvWPcZyEY2F7fnaTK/Cabinet-approves-changes-in-title-laws-to-make-land-ownershi.html) that cabinet has approved changes in titling law that will make ownership of land more transparent by introducing amendments to the Registration Act of 1908.  The act governs the registration of documents and sales transactions for movable and immovable property within the country. This move has far reaching positive implications, maybe more than the lawmakers themselves realise at the moment.

If well conceived and successfully implemented, these reform measures will go a long way in changing the way land markets operate in India. It would make it easier for companies to acquire land for industrial projects as the land ownership will be clear and undisputed. It is estimated that 70-80 percent of land cases pending in courts are on “title issues”. Clear titling with universal digitisation will reduce these numbers dramatically. It will also make it easier for land owners to gain access to credit from institutional sources.

While talking about the dead capital in the third world and former communist nation, economist Hernando de Soto in the inaugural chapter of his book *“The Mystery of Capital”* says

> *The poor inhabitants of these nations – five-sixths of humanity – do have things, but they lack the process to represent their property and create capital. They have houses but not titles; crops but not deeds; businesses but not statues of incorporation. It is the unavailability of these essential representations that explains why people who have adapted every other Western invention, from the paper clip to the nuclear reactor, have not been able to produce sufficient capital to make their domestic capitalism work.*

It is the absence of this process that prevents transformation of assets into capital that can then be put to best possible use. The proposed changes to the law could change that.

De Soto’s ideas have become more widely known and accepted.  But we already know that our titling system is dysfunctional. In a statement to Parliament last year, rural development minister [Jairam Ramesh pointed out](http://www.naredco.in/news-updates-details.asp?id=5039&prYear=2012&st=1&links=nw2) that the land survey records in different parts of the country are still archaic.

He also said:

> *India is one of the few countries in the world where the record of rights on land is presumptive it is not conclusive unlike many other countries. We are presumed to be owners of land unless proved otherwise. That is why we have lots of disputes and lots of problems in land acquisition.*

It is great the minister has diagnosed the problem correctly and has said that the government is aggressively moving towards conclusive titles. However, [website](http://dolr.nic.in/comp_land_records.htm) of the Department of Land Resources under Ministry of Rural Development says that the basic scheme of Computerisation of Land Records (CLR) was started in 1988-89! It has been 24 years since then. While complimenting the government for moving ahead in the right direction, I do hope that the aggressiveness talked about by the minister translates into action as well. I hope that the government persist with this great initiative and see it through to its conclusion at the earliest.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Happy Birthday Adam Smith!

Original: https://www.spontaneousorder.in/p/happy-birthday-adam-smith

Author: Spontaneous Order

Published: 2013-06-05T16:55:10.000Z

Topics: adam-smith, natural-liberty, youth-liberalism, classical-liberalism

> According to the Economist this week, there is a Strange Rebirth of Liberal England among Britain’s youth. This news complements the youth-lead Ron Paul revolution in America of recent years and the spread of Students for Liberty activities across the .

**Summary:**

The post celebrates Adam Smith's 290th birthday by citing The Economist's report on a 'Strange Rebirth of Liberal England' among Britain's youth, who are more liberal both socially and economically than their elders or any prior generation. This trend echoes the youth-led Ron Paul revolution in America and the global expansion of Students for Liberty, including 15 charter teams in India. From a classical-liberal perspective, young people are intuitively grasping Smith's 'system of natural liberty,' which eliminates government privileges—such as restrictions on professions or international trade—that unjustly favor some at others' expense and stifle prosperity by impeding creative human energies. Quoting The Wealth of Nations, it advocates leaving individuals free to pursue their interests without violating justice, allowing competition to flourish naturally. Though Smith pessimistically doubted its emergence amid conservatism and vested interests, 19th-century popular consent propelled Britain's success as the 'workshop of the world,' fostering global integration, unprecedented wealth, and Europe's longest peace. The author calls for reading Smith, Bastiat, Mises, Friedman, Rand, and Hayek to convert intuitive sympathies into principled understanding for liberty's future.

**Key points:**

- Britain's youth are more socially and economically liberal than ever, per The Economist.
- Global youth movements like Ron Paul and Students for Liberty (15 teams in India) signal a revival of Smith's natural liberty.
- Government privileges impede prosperity; removing them unleashes human energies into efficient patterns.
- 19th-century adoption of Smith's ideas drove historic wealth creation and peace despite his pessimism.
- Read classical liberals like Smith, Bastiat, Mises, Friedman, Rand, and Hayek to solidify liberal instincts.

**By Andrew Humphries**

* * *

According to the *Economist* this week, there is a *[Strange Rebirth of Liberal England](http://www.economist.com/news/leaders/21578660-young-britons-have-turned-liberal-both-socially-and-economically-politicians-need-get)* among [Britain’s youth](http://www.economist.com/news/britain/21578666-britains-youth-are-not-just-more-liberal-their-elders-they-are-also-more-liberal-any).  This news complements the youth-lead [Ron Paul revolution](http://reason.com/blog/2012/05/09/brian-doherty-on-why-young-people-love-r) in America of recent years and the spread of [Students for Liberty](http://studentsforliberty.org/) activities across the globe (including 15 [SFL Charter Team](http://studentsforliberty.org/charterteams/) members in India).

What better gift to offer Adam Smith today for his 290th birthday than a generation of young people interested in achieving his vision for the “system of natural liberty”? If the *Economist* is right, young people are intuitively [groking](http://en.wikipedia.org/wiki/Grok) Smith’s ideas more now than they have at any time since the 1800’s.

Adam Smith demonstrated how government privileges to some at the expense of others—such as restrictions on entering a profession or to trading internationally—are not only unjust, but also cause less prosperity all around because they impede the natural flow of human energies into more creative and efficient patterns.

As Smith wrote in the *[Wealth of Nations](http://www.econlib.org/library/Smith/smWN19.html)*:

> All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men.

Smith was pessimistic about the future of his vision. He believed that conservatism and vested interests would never let it emerge. But contrary to his fears, popular consent to this idea in the 19th Century led to the most dynamic and progressive era in history.  Imitation of Britain’s success as the “workshop of the world” led to global integration, unprecedented wealth creation, and the longest period of peace Europe had ever known.

The *Economist’s* report that there is a new sympathy towards these ideas among Britain’s youth is great news. What we need now is for more people to *understand* the principles of liberty to sure up their liberal predilections.  More young people need to read Smith, Bastiat, Mises, Friedman, Rand, and Hayek.

Give Adam Smith a gift today.  Pick up a book or article of one of the these authors, discuss it with a friend, and contribute to the future of liberty.

Read more : [https://spontaneousorder.in/capitalism-under-attack-adam-smith-and-free-banking/](https://spontaneousorder.in/capitalism-under-attack-adam-smith-and-free-banking/)

* * *

**About Andrew Humphries**

## What Should We Learn from Venezuela Running Out of Toilet Paper?

Original: https://www.spontaneousorder.in/p/what-can-we-learn-from-venezuela-running-out-of-toilet-paper

Author: Spontaneous Order

Published: 2013-06-04T12:54:04.000Z

Topics: price-controls, inflation, government-intervention, economic-shortages

> There appears to be a rule: if you want something to be poorly supplied declare it “essential” and put government in charge of its provision. Venezuela was recently in the news for running out of toilet paper. Unlike other countries where governments

**Summary:**

Andrew Humphries argues that declaring goods 'essential' and placing them under government control leads to shortages, as seen in Venezuela's toilet paper crisis. The government must import 50 million rolls due to chronic shortages, a predictable outcome of expansionary monetary policy fueling inflation, combined with price ceilings that force suppliers to sell at a loss. This classical-liberal critique highlights how preventing prices from rising distorts markets, eliminating incentives for production and import. Humphries draws a parallel to India's pre-1991 foreign exchange crises: government deficit spending expanded the money supply, devaluing the rupee, but fixed exchange rates created artificial shortages. In both cases, intervention exacerbates the problem it aims to solve. The lesson is clear—price controls are a cure worse than the disease of inflation, as empty shelves in Venezuela remind us that free prices are essential for supply.

**Key points:**

- Venezuela's toilet paper shortage results from price ceilings mandating sales at a loss amid inflation from expansionary monetary policy.
- India faced repeated foreign exchange crises pre-1991 due to fixed exchange rates despite money supply expansion devaluing the rupee.
- Governments declaring goods 'essential' and controlling their provision predictably leads to shortages.
- Price controls prevent prices from rising to signal demand, removing production incentives.

**By Andrew Humphries**

* * *

There appears to be a rule: if you want something to be poorly supplied declare it “essential” and put government in charge of its provision.

Venezuela was recently in the [news](http://www.guardian.co.uk/world/2013/may/16/venezuela-toilet-paper-shortage-50m) for running out of toilet paper.  Unlike other countries where governments don’t have to put a thought to whether people will have toilet paper or not, the Venezuelan government has had to make conscious efforts to import 50 million rolls.

The economically ignorant will be bemused and wonder why this is so. But with a little economic education, this becomes a predictable phenomenon: Venezuela’s expansionary monetary policy causes inflation, but instead of allowing prices to rise, the government has mandated price ceilings on commodities ***so that they can only be supplied at a loss**…*Thus no toilet paper.

To take another example closer to home, the same thing happened in India with foreign exchange several times before ’91.  The Indian government inflated the money supply to pay for its deficit spending, causing the value of the rupee to fall in terms of goods and foreign currencies. But the Indian government fixed the price of foreign currencies in terms of rupees, not allowing their prices to rise.  Thus, again, there were chronic shortages, i.e., “foreign exchange crises.”

So when we see Venezuelans rushing to the shelves to get the last roll of toilet paper they might see for months, we should remember that price controls are a cure that is worse than the disease.

* * *

**About Andrew Humphries**

## Can Legalised Gambling Reduce Match-Fixing?

Original: https://www.spontaneousorder.in/p/can-legalised-gambling-reduce-match-fixing

Author: Spontaneous Order

Published: 2013-05-21T12:37:47.000Z

Topics: gambling-legalization, match-fixing, sports-betting, spontaneous-order

> Recent revelations that the three players of Rajasthan Royals, a franchisee of the IPL, colluded with bookies for spot-fixing in return for huge sums of money, has caused some to advocate for a separate law to make match-fixing a criminal offence. I am ..

**Summary:**

The recent spot-fixing scandal involving Rajasthan Royals IPL players highlights how underground gambling incentivizes match-fixing, as players weigh illicit gains against risks. Rather than criminalizing match-fixing, the author argues it should be treated as a contract breach warranting damages, not criminal probes. India's gambling ban drives a huge-demand activity underground, enriching underworld networks like D-Company through extralegal enforcement involving threats and violence, akin to U.S. Prohibition, the war on drugs, and past gold smuggling. Legalizing gambling would formalize contracts, enabling police and courts to enforce them. Internationally, legal gambling doesn't cause rampant fixing; instead, sports bodies like ATP, ICC, and UEFA partner with betting exchanges to detect irregularities. In 2007, Betfair spotted unusual betting patterns in the Nikolay Davydenko vs. Martin Vassallo Arguello tennis match, alerted ATP, and suspended payouts. In India, legalized markets would foster spontaneous order: betting exchanges monitoring trends (e.g., heavy bets on runs in a cricket over) and informing authorities, aligning incentives for organizers to ensure fair play over time.

**Key points:**

- Treat match-fixing as a contract breach requiring damages, not a criminal offense.
- Legalize gambling to shift it from underworld control—profiting groups like D-Company—to formal court enforcement.
- Betting exchanges and sports bodies, as in Betfair's 2007 ATP alert on suspicious tennis betting, can collaboratively detect irregularities.
- Legal gambling markets create incentives for organizers to combat fixing, producing spontaneous fair-play order.

**By Kumar Anand**

* * *

Recent revelations that the three players of Rajasthan Royals, a franchisee of the IPL, colluded with bookies for spot-fixing in return for huge sums of money, has caused [some to advocate](http://www.espncricinfo.com/india/content/story/636886.html) for a separate law to make match-fixing a criminal offence. I am not an expert on law and am not completely sure what the right course should be. But it is clear that the players are in a breach of contract with the team they represent, and should pay damages to whomever was harmed by their breach of contract. I don’t see why this would warrant a criminal investigation.

However, this event raises another issue to examine first principles: the status of gambling itself as an illegal activity.

Cricket players, like all other human beings, respond to incentives. For many, the cost of cheating—losing their sense of integrity and tarnishing their honor—will always outweigh the monetary benefits of cheating. However, the lure of easy money will always be there for the weak or immoral. When faced with an opportunity, these players will evaluate their chances of getting away with the deed and the money, and thereby make a decision. Unless we are living in *[Minority Report](http://en.wikipedia.org/wiki/Minority_Report_\(film\))* world of Steven Spielberg, it is impossible to pre-empt and stop such activities.

But the umbrella ban on gambling makes things worse.

**Ban on gambling perpetuates and profits the underworld**

Prohibiting something that may be considered a vice in the eyes of many and for which there is huge and stable demand, does not necessarily stop the activity. The activity is only driven underground with their own methods of operations. This was true of [prohibition in the United States](http://en.wikipedia.org/wiki/Prohibition_in_the_United_States) (1920-1933), and is true of the ongoing [war on drugs](http://en.wikipedia.org/wiki/War_on_Drugs).

When gold imports were banned in India, these organisations profited from smuggling gold into India. No wonder our action heroes of 1970’s and 80’s ([Amitabh Bachchan](http://en.wikipedia.org/wiki/Zanjeer), [Vinod Khanna](http://en.wikipedia.org/wiki/Amar_Akbar_Anthony), [Shashi Kapoor](http://en.wikipedia.org/wiki/Deewaar_\(1975_film\)), etc.) spent a lot of time fighting these smugglers in Bollowood movies of the time.

Bollywood movies of the last couple of decades have moved on from gold-smuggling based themes, that is from the time importing gold has become easier. Harmless activities, activities that do not cause physical harm to body or property, like import and export of commodities, gambling, etc. can be legalised to great positive effect.

Today when gambling is illegal in India, evidence suggests that underground gambling activities profits underground bookies and their patrons underworld dons who provide the enabling network. Organisations like [D-company](http://en.wikipedia.org/wiki/D-Company) profit from the provision of a good or service that is decreed illegal.

Legalised gambling will cause various contract enforcement to be formalised and not be at the mercy of informal underworld methods, such as kidnapping, threat of physical harm, etc. Police and courts can do the job of enforcing various gambling related contracts as they do for any other contractual activity. The bookies, under-writers and their customers will not have to depend on extralegal sources of contract enforcement.

The question may arise, if we legalise gambling, will there be an increase in match-fixing?

Gambling is already legal in many countries around the world, but this does not cause match, race or any other activity that people bet on to be fixed all the time. One can see that it is in the interest of the organisers of such events and the organizers of legal gambling exchanges to keep the fixers away, for continued patronage of their customers. This is not just theoretical. There are interesting examples of this happening where gambling is legal as we will see shortly.

**Sports bodies and betting exchanges working together**

In a world with legalised gambling, various sports bodies like International Cricket Council (ICC) for Cricket, Association of Tennis Professionals (ATP) for Men’s Tennis, Union of European Football Associations (UEFA) for Football in Europe would enter into contract with betting exchange organisations to keep a close watch on irregularities in the result of the game. Betting exchange organisations through their experience and knowledge of betting history and trend are best placed to keep a tab on irregularities in the event of a match-fixing.

In 2007, noticing an unusual betting trend in a tennis match between Nikolay Davydenko and Martin Vassallo Arguello, online betting exchange Betfair as part of their understanding with the tennis governing body, [alerted ATP](http://news.bbc.co.uk/sport2/hi/tennis/6928635.stm) and suspended payouts on the match. Mark Davies, the communications director of Betfair [had this to say](http://select.nytimes.com/2007/08/07/sports/tennis/07araton.html), *“the price movement on this was just not what you would expect of a free market where observers were making judgements on the basis of what was happening in front of their eyes.”*

Similarly, we can imagine that in a world of legalised gambling, sports bodies and betting exchanges sharing information in India. In the event when huge and unusual bets are placed on certain players giving away a certain number of runs in a particular over of a cricket match, the news of irregular activity on exchange could be passed on to the authority concerned and an investigation undertaken.

This would be the spontaneous order of market forces coming together to produce a fair game. This is not to say that it will be a foolproof system and I am not sure what a foolproof system would be. But I know this, when people are left alone to conduct their business to mutual advantage, more often than not, peaceful solutions do emerge.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Where Is The Power?

Original: https://www.spontaneousorder.in/p/where-is-the-power

Author: Spontaneous Order

Published: 2013-05-17T17:54:45.000Z

Topics: power-sector, central-planning, free-markets, swaraj

> It has been hard writing this post and working on my other assignments today. Not because I have suddenly been struck by writer’s block. It’s because of the power cuts that we are experiencing today in office, that have come to be more frequent as the

**Summary:**

Frequent power cuts in an affluent South Delhi neighborhood amid soaring summer temperatures exemplify the failures of India's monopolistic power sector, where state-controlled entities fail to anticipate predictable demand spikes from air conditioners and appliances. The author links this to Ramdhari Singh Dinkar's post-independence poem 'Samar Shesh Hai,' which questions Delhi's betrayal of 'swaraj'—self-governance—by centralizing control and holding prosperity hostage, a critique as relevant today as in 1947. From a classical-liberal viewpoint, these outages stem from post-independence central planning's monopolistic mindset, disbelief in individuals' judgment, and rejection of markets' spontaneous order. New Delhi wields the wrong kind of power: granting favors, arbitrarily allocating resources, and meddling where it shouldn't. While some sectors have been liberalized, persistent government dominance in power and others breeds slow growth and reforms, driven by fear of relinquishing control. True swaraj demands freeing markets to deliver reliable power and prosperity.

**Key points:**

- Power cuts in Delhi reveal monopolies' inability to meet predictable summer demand due to centralized control.
- Post-independence central planning hijacked 'swaraj' by concentrating power and rejecting market spontaneous order.
- Government's arbitrary resource allocation and fear of decentralization cause slow reforms and persistent shortages.
- Liberalizing remaining sectors like power is essential for growth and reliable services.

**By Kumar Anand**

* * *

It has been hard writing this post and working on my other assignments today. Not because I have suddenly been struck by writer’s block. It’s because of the power cuts that we are experiencing today in office, that have come to be more frequent as the mercury has soared over the last few weeks. This is the story of an affluent neighbourhood in South Delhi. I shudder to imagine what would be the state of affairs in less fortunate parts of the country.

To be fair to the monopolies that produce power, how could they have guessed that demand would go up during summer? It isn’t like summer is hot every year and people come to demand more power through increased use of fans, coolers, air conditioners, refrigerators, etc.

Below is an excerpt from the poem *‘Samar Shesh Hai’* by [Ramdhari Singh Dinkar](http://en.wikipedia.org/wiki/Ramdhari_Singh_Dinkar) written few years after India’s independence in 1947.

*Atka kahan swaraj? Bol dilli! Tu kya kehti hai?*

*Tu rani ban gayi vedna janata kyon sahti hai?*

*Sabke bhagya daba rakhe hain kisne apne kar mein?*

*Utari thi jo vibha, hui bandini, bata kis ghar mein?*

Loosely translated, it reads –

Where is ‘swaraj’ being held up? Speak Dilli! What do you have to say?

While you have become the queen, why do the masses continue to suffer?

Who is controlling the fate of everyone in their hands?

In whose house is the ‘prosperity’ that came down being held hostage?

The poem may have been penned some more than 50 years ago, and Dinkar may have something entirely else in mind when penning it. But to me, the poem is as apt today as it could ever have been. Here Ramdhari Singh Dinkar is asking Delhi, the capital city, the seat of power, where the idea of ‘*[swaraj](http://en.wikipedia.org/wiki/Swaraj)*‘ or self-governance is lost. Even when Delhi has gone on to become the queen, the common man continues to suffer. He asks why the fate of everyone is being controlled by one person and not be people themselves. For Dinkar, the hope and promise of prosperity and a bright future that was carried in the idea of independence has been hijacked.

So what does this poem have to do with frequent power cuts and load shedding in Delhi? Everything. It is the same control of power in one hand, the same monopolistic attitude, the same disbelief in the common man’s judgement and capability in deciding what is good for him and the same unawareness (or intentional overlooking) of the spontaneous order of markets, that led central planning as India’s preferred path to development after independence.

New Delhi is rightly considered as the power centre of the country. However, it is the wrong kind of power – the power to grant special favours, the power of arbitrarily allocating resources to the few that is taken away from the many, the power of doing things it has no business doing.

While we have freed many sectors from the shackles of centralised planning, many continue to remain in the control of only the government and its special invitees. It is the fear of the unknown when letting go of power that is causing this slow rate of growth, slow pace of reforms, and subsequently, these power-cuts.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Is food security needed to feed 814 million Indians?

Original: https://www.spontaneousorder.in/p/is-food-security-needed-to-feed-814-million-indians

Author: Spontaneous Order

Published: 2013-05-14T14:37:51.000Z

Topics: food-security, national-food-security-bill, hunger-statistics, government-spending

> The Government introduced National Food Security Bill in the Lok Sabha on 22 December 2011 to address food security in a comprehensive manner. The recently concluded session of parliament was supposed to pass the bill. However, the unproductive session ..

**Summary:**

The National Food Security Bill, introduced in 2011, proposes entitlements for subsidized food grains under the Targeted Public Distribution System to 75% of rural and 50% of urban populations, covering 67% of India's total population or about 814 million people per the 2011 census (68.8% rural, 31.2% urban). This assumes widespread inability to afford basic food at market prices. However, NSSO surveys reveal sharp declines in reported hunger: from 18.9% rural and 6.7% urban in 1983, to 5.5% and 1.9% in 1993-94, and 2.6% and 0.6% by 2004-05, with further drops expected amid economic growth. Drawing on works like Bhagwati and Panagariya's 'India’s Tryst with Destiny', Aiyar's Economic Times article, and Virmani’s 2006 paper, the author argues India is poor but not predominantly starving. The bill represents forced philanthropy at taxpayers' expense, costing USD 17-23 billion annually. From a classical-liberal viewpoint, resources should instead bolster primary public goods like the inefficient law and order system, urging a rethink before parliamentary passage.

**Key points:**

- National Food Security Bill entitles 814 million Indians (67% of population) to subsidized grains, presuming mass food insecurity.
- NSSO data shows hunger reports plummeted: 18.9% rural in 1983 to 2.6% in 2004-05, indicating India is not starving.
- Bill's annual cost of USD 17-23 billion constitutes forced philanthropy, diverting funds from essential public goods like law and order.
- Economic growth will further reduce hunger without such entitlements.

**By Kumar Anand**

* * *

The Government introduced National Food Security Bill in the Lok Sabha on 22 December 2011 to address food security in a comprehensive manner. The recently concluded session of parliament was supposed to pass the bill. However, the unproductive session of the parliament failed to pass the bill. This presents us with an opportunity to re-think the need and full implications of the bill.

The food-grain entitlement under the proposed bill covers up to 75 percent of the rural population and up to 50 percent of the urban population for subsidised food-grains under the Targeted Public Distribution System (TPDS), besides provision for nutritional support to women and children. Who could be against an idea so noble? Without getting ahead of ourselves let’s see what this entitlement translates into.

According to the [2011 census](http://www.censusindia.gov.in/2011census/hlo/PCA_Highlights/pca_highlights_file/India/5Figures_at_glance.pdf), 68.8 percent of India’s population is rural while 31.2 percent is urban. Thus, according to the 2011 census, the entitlement would extend to 67 percent of India’s total population, about 814 million people. Thus, it is safe to say that the bill assumes that 814 million Indians are poor and cannot afford basic food-grains at current market prices. Is that so?

Periodic surveys conducted by National Sample Survey Organisation (NSSO) show that, over the years, increasing proportions of people have come to respond in negative to the question, *“Have you been hungry in some or all months of the year?”* In 1983 survey, some 18.9 percent of the rural respondents and 6.7 percent of urban respondents answered that they went hungry in some months of the year. It fell in 1993-94 to 5.5 percent in rural and 1.9 percent in urban areas. By 2004-05, these percentages had fallen to 2.6 and 0.6 percent respectively. If India continues to grow at a healthy rate, we can safely assume that the 2011-12 survey will throw an even smaller percent of respondents answering in the affirmative.

This fact has been covered in detail in 2012 book *[India’s Tryst with Destiny](http://www.flipkart.com/india-s-tryst-destiny/p/itmdef3ukk4tbdq8?pid=9789350295854&ref=ccef6033-4922-4afe-ac1a-714153a10fb1&srno=s_1&otracker=from-search&query=indias%20tryst%20with%20destiny)* by Jagdish Bhagwati and Arvind Panagariya. This was also the central theme of a [recent article](http://articles.economictimes.indiatimes.com/2013-04-10/news/38434483_1_food-security-bill-food-inflation-food-insecurity) in Economic Times by Swaminathan Aiyar and Arvind Virmani’s [2006 working paper](http://planningcommission.gov.in/reports/wrkpapers/wk_pov106.pdf) for the Planning Commission titled *Poverty And Hunger In India: What Is Needed To Eliminate Them.*

This establishes that India may be a poor country, but it is not a predominantly starving country.

The policymakers may have had the best of interest of poor people in heart while conceiving the idea for provision of food security. However, the facts say that this is an act of forced philanthropy at taxpayer’s cost, declaring people hungry even when people themselves respond otherwise. The total cost of the bill could range from [USD 17 billion](http://eac.gov.in/reports/rep_NFSB.pdf) to [USD 23 billion](http://www.moneycontrol.com/news/economy/food-security-bill-to-prove-costly-for-government_866653.html) per year based on various estimates. This is no small sum. Why not use some of this money to strengthen first order public goods like our inefficient law and order system.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Private Minting in Bhopal and 19th Century Britain

Original: https://www.spontaneousorder.in/p/private-minting-in-bhopal-and-19th-century-britain

Author: Spontaneous Order

Published: 2013-05-10T14:14:22.000Z

Topics: private-minting, free-banking, currency-monopoly, economic-history

> There is a very cool article in HT this week about a shop in Bhopal that is producing Rs. 5 coins due to a shortage in that denomination. A liquor shop acts as a bank that produces, issues, and redeems several of the coins for larger rupee denomination...

**Summary:**

A liquor shop in Bhopal is privately producing Rs. 5 coins due to a shortage of that denomination, acting as a bank by issuing and redeeming them for larger rupees, with these coins circulating as local currency. This instance of private enterprise filling a monetary gap challenges the notion that only governments can mint coinage. It parallels events in 1780s Britain described in George Selgin's 'Good Money,' where the Royal Mint's failure to supply small-denomination coins amid the Industrial Revolution prompted manufacturers, like Birmingham button makers, to mint 'tradesman’s tokens.' These private coins gained wide acceptance for wages and retail until the Crown outlawed them in 1821. The author, from a classical-liberal viewpoint, celebrates this as evidence that private initiative drives economic progress, undermines government currency monopolies, and reveals universal economic principles with striking parallels across time and space, from Bhopal to Birmingham.

**Key points:**

- A Bhopal liquor shop mints Rs. 5 coins and redeems them, creating local currency amid official shortages.
- In 1780s Britain, private manufacturers produced tradesman’s tokens to pay workers when the Royal Mint failed, fueling the Industrial Revolution until banned in 1821.
- Private coinage demonstrates that economic initiative thrives without government monopoly, applicable to modern alternatives like digital monies.

**By Andrew Humphries**

* * *

There is a very cool [article in HT](http://www.hindustantimes.com/India-news/Bhopal/Bhopal-market-has-a-currency-of-its-own/Article1-1056043.aspx) this week about a shop in Bhopal that is producing Rs. 5 coins due to a shortage in that denomination.  A liquor shop acts as a bank that produces, issues, and redeems several of the coins for larger rupee denominations.  From what I read in the article, these coins have become currency in that vicinity.

[

![](http://www.hindustantimes.com/images/2013/5/b14c2a37-75e9-45a7-a559-5ab11e6c30cehires.jpg)



](http://www.hindustantimes.com/images/2013/5/b14c2a37-75e9-45a7-a559-5ab11e6c30cehires.jpg)

Image from Hindustan Times “Bhopal market has a ‘currency’ of its own” Ashutosh Shukla May 07, 2013

This is a nice example of private enterprise producing coin, which is often thought to be something that only government can or must do.

This occurrence in Bhopal reminds me of a book I’m eager to read by free banking scholar George Selgin, *[Good Money: Birmingham Button Makers, the Royal Mint, and the Beginnings of Modern Coinage, 1775-1821](http://www.independent.org/store/book.asp?id=75).*  The book outlines how private initiative in minting small denomination coins played a vital role in facilitating the Industrial Revolution in Britain.

The Independent Institute blurb on the book says the following:

> In *Good Money*, George Selgin tells the fascinating story of the important yet almost unknown episode in the history of money—British manufacturers’ challenge to the Crown’s monopoly on coinage.
> 
> In the 1780s, when the Industrial Revolution was gathering momentum, the Royal Mint failed to produce enough small-denomination coinage for factory owners to pay their workers. As the currency shortage threatened to derail industrial progress, manufacturers began to mint custom-made coins, called “tradesman’s tokens.” Rapidly gaining wide acceptance, these tokens served as the nation’s most popular currency for wages and retail sales until 1821, when the Crown outlawed all moneys except its own.
> 
> *Good Money* not only examines the crucial role of private coinage in fuelling Great Britain’s Industrial Revolution, but it also challenges beliefs upon which all modern government-currency monopolies rest. It thereby sheds light on contemporary private-sector alternatives to government-issued money, such as digital monies, cash cards, electronic funds transfer, and (outside of the United States) spontaneous “dollarization.”

It turns out people are people are people everywhere and that, not only are the principles of economic theory true everywhere, but economic events show such beautiful parallels over time and space.

* * *

**About Andrew Humphries**

## Who Should Pay for Mukesh Ambani’s “Z category security”?

Original: https://www.spontaneousorder.in/p/who-should-pay-for-mukesh-ambani-z-category-security

Author: Spontaneous Order

Published: 2013-05-03T15:38:51.000Z

Topics: personal-security, self-defense-laws, government-protection, taxpayer-services

> Much has already been written about the Ministry of Home Affairs agreeing to provide round-the-clock “Z category security” to Mukesh Ambani. Even the Supreme Court frowned upon and raised questions over the issue. Let’s consider the facts. A terror

**Summary:**

The Indian government should bear the cost of Mukesh Ambani's Z-category security, argues Kumar Anand from a classical-liberal viewpoint, as it prohibits private citizens from hiring armed guards with high-calibre weapons, heavily taxes Reliance Industries (US$5.5 billion paid, 5.5% of total indirect tax revenue), and holds a primary duty to protect citizens' lives and property. A credible terror threat prompted the Ministry of Home Affairs' assessment and provision of round-the-clock security costing INR 15 lakh monthly, after which Ambani offered to pay amid public outcry. Anand contends this is fair given scarce resources and unequal security access—Lutyens' Delhi residents are safer than those near the Line of Control—and varying threat levels: harming Ambani risks global headlines, deterring investment and business exodus. While not claiming one life outweighs another, he emphasizes economic ripple effects. The solution lies in allowing self-defense or reimbursing protection from taxes paid, rather than forcing the ultra-wealthy (Ambani worth US$21.5 billion) to fund what the state monopolizes and mandates.

**Key points:**

- Government prohibits private high-calibre armed security, obligating it to provide protection to threatened citizens like Ambani.
- Reliance Industries contributed US$5.5 billion in taxes (5.5% of India's indirect tax revenue), justifying use of a fraction for Ambani's credible-threat security.
- Security is already unequally distributed by geography and status; protecting high-profile targets like Ambani prevents investment flight and economic harm.
- Classical-liberal policy should prioritize allowing self-defense rights amid government's poor security delivery.

**By Kumar Anand**

* * *

Much has already been written about the Ministry of Home Affairs agreeing to provide round-the-clock “Z category security” to Mukesh Ambani. Even the Supreme Court frowned upon and [raised questions](http://www.indianexpress.com/news/sc-raps-govt-for-security-cover-to-mukesh-ambani/1110432/) over the issue.

Let’s consider the facts. A terror outfit threatened Mukesh Ambani’s life. In response, the government made a threat perception assessment and found the threat to be credible. After following due process, the government decided to provide “Z category security” to Ambani. Following protests on Twitter and Facebook, Mukesh Ambani agreed to pay for the security cover provided to him amounting to about INR 15 lakh per month.

Should the government be offering “Z category security” privilege to Ambani? If he is offered, should Ambani be made to pay for this service?

Mukesh Ambani is  [worth US$ 21.5 billion](http://www.forbes.com/profile/mukesh-ambani/) (about INR 115,000 crores) making him India’s richest person. He lives in a billion dollar house. He owns Indian Premier League’s most glamorous franchise in Mumbai Indians. So why can’t he hire commandos and arrange for his own security. Well, he can’t because Indian laws don’t allow private security guards to carry high-calibre weapons that security forces use.

On the other hand, Reliance Industries Ltd. paid [US$5.5 billion to the national exchequer](http://www.ril.com/downloads/pdf/ril_sr2011_12.pdf) in the form of various taxes and duties, contributing 5.5% to the Government of India’s total indirect tax revenue. This is not to say that this entitles Ambani and Reliance Industries to US$5.5 billion worth of public goods and services. But shouldn’t he be free to arrange for his safety the way he deem fit?

Furthermore, one of the first things we need our government to do, is to keep us safe from any internal or external aggressors against our body and property.

So, if a) government has forbidden Ambani to arrange for his own protection, b) government has taxed him a hell-lot of money, and c) government’s primary duty/promise is to provide protection to its citizens (taxpayers), well, you can figure out for yourself who I think should be paying for Ambani’s protection.

But is it unfair that he receive more security resources than others? One might question: how can the limited resources of the state be diverted for the protection of an individual, while the rising cases of crime clearly demonstrate the inability of the government to provide adequate security to the general public? (Prof. Ajay Shah  has a great discussion on the issue as an attempt to find a public policy solution on his blog [here](http://ajayshahblog.blogspot.in/2012/12/law-and-order-how-to-go-from-outrage-to.html) and [here](http://ajayshahblog.blogspot.in/2013/04/competence-in-policing.html)).

One issue is whether we all have an equal need for protection and whether we are already equally well provided with security.

Security is unequally available to all of us. Someone living in [Lutyen’s Delhi](http://en.wikipedia.org/wiki/Lutyens'_Delhi) is safer than someone who lives close to the ‘[line of control](http://en.wikipedia.org/wiki/Line_of_Control)‘ in Jammu and Kashmir. Similarly, someone living in a cantonment area or closer to a police station or living across the road from Manmohan Singh (like my uncle used to) is less likely to be robbed of their belongings than someone who lives in say, Vasant Kunj, an affluent residential colony in south-west Delhi, where personal stories recount that theirs is a theft-prone neighbourhood.

Similarly, threat to life is not equal to everyone. A terrorist organisation that wants to make global headlines will fail to do so if they successfully attempt to kill someone known only to his friends and family (like me). However, any attempt to harm a person like Ambani is sure to make global headlines, create doubts in the mind of other businessmen, businesses will shift out of this country, investments will dry up. This is not to say that one life is more important than another, just that the level of threat to life is different for different people.

Resources are scarce, including resources for security like police personnel, armed forces, border security force, jails, courts, etc. Some people have a greater access to these services than others.  First this is an argument for letting people defend themselves when they can, letting them lawfully obtain means of self-defence.  But especially if this is not allowed, and as long as the government demands huge taxes in the name of providing security (among other things) and does a poor job of it, it is only fair that a small fraction of the tax money paid by Mukesh Ambani goes on to pay for his security in the case of a credible threat issued against his life by a terrorist organisation.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## How China Became Capitalist

Original: https://www.spontaneousorder.in/p/how-china-became-capitalist

Author: Spontaneous Order

Published: 2013-05-02T12:42:49.000Z

Topics: china-economy, capitalism, economic-reform, state-intervention

> One of the most surprising and dangerous myths I encounter when meeting participants at our courses in public policy and liberal philosophy is that China is growing and becoming prosperous because it is “communist,” i.e., because (they believe) the st

**Summary:**

The post challenges the myth that China's economic growth and prosperity result from communism and state-directed planning, a view held by some public policy course participants. Instead, from Deng Xiaoping's succession to Mao in 1978, China has progressively become more capitalist, which explains its rapid growth and poverty reduction. Pre-1978 central planning failed disastrously, culminating in Mao's Great Leap Forward—one of history's greatest mass starvations. Ronald Coase and Ning Wang's book 'How China Became Capitalist,' recently reviewed by the Wall Street Journal, describes reforms guided by pragmatism, experimentation, and the Confucian principle 'to seek truth from facts.' However, the authors emphasize that success stems from the government's gradual withdrawal from the economy, not political leadership's strength. A large sector of state-owned enterprises and interventions in money, banking, and exchange rates persist, foreshadowing troubles, but China has developed despite these interventions, not because of them. This classical-liberal framing underscores market liberalization over state control as the driver of China's transformation.

**Key points:**

- China's growth since 1978 results from increasing capitalism under Deng Xiaoping, not communist planning.
- Mao's pre-1978 central planning caused the Great Leap Forward's mass starvation.
- Coase and Wang attribute China's success to government withdrawal from the economy, guided by pragmatism and experimentation.
- Persistent state-owned enterprises and financial interventions risk future economic troubles, hindering rather than helping growth.

**By Andrew Humphries**

* * *

One of the most surprising and dangerous myths I encounter when meeting participants at our courses in public policy and liberal philosophy is that China is growing and becoming prosperous because it is “communist,” i.e., because (they believe) the state plans and directs economic activity.  This is a tragic farce. What they misunderstand is that since Deng Xiaoping succeeded Mao in 1978, China has been becoming more and more capitalist and it is this transformation that is the primary reason for its growth and poverty reduction.  Before 1978, the push to control, direct, and plan the economy had not succeeded in creating such growth or poverty reduction and in fact had lead to one of the greatest mass starvations in history (Mao’s “Great Leap Forward”).

In their new book *How China Became Capitalist*, which the Wall Street Journal just [reviewed](http://online.wsj.com/article/SB10001424127887323335404578444792065046344.html), Ronald Coase and Ning Wang argue that the principles guiding Chinese reform have been “pragmatism, experimentation and the Confucian injunction ‘to seek truth from facts.'”  However, it has been “the gradual withdrawal of government from the economy, rather than the strength or omnipresence of the political leadership . . . explains the success.”

It is true that there is still a huge sector of publicly owned enterprises and extensive interventionism in money, banking, and exchange rates, which is paving the road for some significant troubles ahead. Yet it should be understood that China has been developing despite these, not primarily because of them.

Know more about China : [https://spontaneousorder.in/the-word-freedom-does-not-exist-in-china/](https://spontaneousorder.in/the-word-freedom-does-not-exist-in-china/)

* * *

**About Andrew Humphries**

## Just Labor Day? or Labor n’ Capital Day?

Original: https://www.spontaneousorder.in/p/just-labor-day-or-labor-n-capital-day

Author: Spontaneous Order

Published: 2013-05-01T18:02:08.000Z

Topics: labor-theory-of-value, class-conflict, free-markets, capital-and-labor

> As people celebrate “Labor Day” today, it’s important not to get caught up in Marxist fallacies about the labor theory of value and think there is some kind of inherent conflict between “Labor” and “Capital.” In reality, a market economy is

**Summary:**

The post challenges Marxist interpretations of Labor Day, dismissing the labor theory of value and claims of inherent conflict between labor and capital. Instead, it portrays market economies as ecosystems where voluntary exchange harmonizes interests. Marx's view—that capitalists expropriate surplus value from laborers, paying only subsistence wages—failed historically; in relatively free markets with protected property rights, real incomes of laborers have consistently risen. Wages are determined by consumer valuation of goods produced by labor, with entrepreneurs bearing the risk of losses if products fail. Capitalists advance funds, delay consumption, and invest savings in capital goods—like tools from hands to tractors—that amplify labor productivity, enabling higher wages. Labor and capital are interdependent and often embodied in the same individuals via savings. The classical-liberal conclusion: no zero-sum conflict exists; freedom to exchange fosters cooperation, innovation, and rising prosperity for all.

**Key points:**

- Market economies harmonize labor and capital interests through voluntary exchange, refuting Marxist class conflict.
- Wages reflect consumer valuation of labor's output, not capitalist expropriation, with entrepreneurs bearing production risks.
- Capital investments in tools and machinery boost labor productivity and real wages, as seen in free-market histories.
- Laborers and capitalists often overlap, trading subjective values to mutual benefit.
- Freedom to exchange, not state compulsion, is essential for rising real incomes and prosperity.

**By Andrew Humphries**

* * *

As people celebrate “Labor Day” today, it’s important not to get caught up in Marxist fallacies about the labor theory of value and think there is some kind of inherent conflict between “Labor” and “Capital.”  In reality, a market economy is an ecosystem of interests which tend to harmonize because of the nature of voluntary exchange.

According to Marx, capitalists gain “profits” by “expropriating” a part of the value created by the laborers and only pay them the fraction of what they actually produce to ensure enough laborers survive to guarantee a sufficient supply of labor.

Based on this horrific picture, labor unions and Marxist revolutionaries argued that there was and is an inherent conflict of interest between laborers and the owners of capital and that the only way laborers could improve their lot would be to gain the power of the state to compel capitalists to treat them well.

Thankfully, Marx’s predictions failed to materialize anywhere.  History shows that wherever relatively free markets have been tried for a sufficient period of time (and where the property rights of laborers, no matter how meager, were respected and protected), the real incomes of laboring classes have grown and grown and grown.

The reason Marx’s predictions failed was that they were based on a faulty Labor Theory of Value. The truth is, on the contrary  that wages for labor services are determined by the value consumers place on the goods those units of labor can produce.  (More precisely, wages are determined by entrepreneurs’ beliefs and expectations about what consumers will value. But entrepreneurs can’t lastingly pay much above or below this amount because if they do consumer behavior will cause them to suffer losses, or competing capitalists will attract underpaid laborers to their businesses.)

One interesting result of this is that capitalist-entrepreneurs actually forward money to laborers and bare the risk of the undertaking.  If consumers don’t like the product, the capitalists, not the laborers, suffer the loss. Thanks capitalists!

So what we see is that entrepreneurs, capitalists and factor-owners, such as laborers, trade with one another to satisfy each others subjective values, to create things that are valuable for one another.

The reason real wages have risen in relatively capitalist countries is that  investments in capital goods enabled by capitalist’ savings have increased what laborers can produce.  (Imagine digging a ditch with ones hands, vs. using a trowel, vs. using a spade, vs. using big earth-moving tractors.) So labor without capital is not as valuable and cannot have as high wages as it can with capital, and capital cannot produce value without labor.  Laborers are paid for the labor value they contribute. Capitalist-entrepreneurs are paid for delaying their consumption, for baring the risk productive undertakings, and for noticing value-creating arrangements of labor and capital.

(note: It is important to realize that laborers and capitalists can be the same people.  Laborers who have interest-baring accounts or insurance policies become “Capital” in one sphere of life and “Labor” in another.)

So there really is no inherent conflict.  What is crucial is the freedom to exchange to cooperate with one another to produce goods and services that enrich us and that increase our real wages.

* * *

**About Andrew Humphries**

## Does India means business?

Original: https://www.spontaneousorder.in/p/does-india-means-business

Author: Spontaneous Order

Published: 2013-04-12T21:43:00.000Z

Topics: ease-of-doing-business, economic-freedom, global-competitiveness, india-economy

> How easy is it to start and conduct business in India? How does India fare in terms of economic freedom when compared to other economies? How competitive is India? How prosperous are Indians when compared to citizens of other countries? These and severa..

**Summary:**

Kumar Anand examines India's performance in global indices on ease of doing business, economic freedom, competitiveness, and prosperity, arguing from a classical-liberal viewpoint that the country is slipping backwards, hindering growth and welfare. In the 2013 Ease of Doing Business report, India ranked 173rd out of 185 countries, down from 169th in 2012, and dead last but one (184th) in enforcing contracts. The Fraser Institute's 2012 Economic Freedom of the World report placed India 111th out of 144, with its score declining from a 2005 peak of 6.60 to 6.26 in 2010—evidence of reduced freedom correlating with slowed growth. The World Economic Forum's 2012-13 Global Competitiveness Report ranked India 59th, down three spots and now trailing China by 30 positions, Brazil and South Africa by about 10. The Legatum Prosperity Index ranked India 101st out of 142. Anand contends these thorough reports, even if imperfect, consistently show India heading in the wrong direction—not easing business, not gaining economic freedom, losing competitiveness, and lagging in prosperity compared to peers—urging classical-liberal reforms with a call for ideas to reverse course.

**Key points:**

- India ranked 173rd out of 185 countries in the 2013 Ease of Doing Business report, worst at 184th for enforcing contracts.
- Economic freedom score fell from 6.60 in 2005 to 6.26 in 2010, ranking India 111th out of 144 in the 2012 Fraser Institute report.
- Global Competitiveness ranking slipped to 59th in 2012-13, behind China by 30 spots and Brazil/South Africa by 10.
- Legatum Prosperity Index placed India 101st out of 142 countries in 2012.
- Multiple indices confirm India is not improving business ease or economic freedom as fast as peers, demanding reform ideas.

**By Kumar Anand**

* * *

How easy is it to start and conduct business in India? How does India fare in terms of economic freedom when compared to other economies? How competitive is India? How prosperous are Indians when compared to citizens of other countries? These and several other questions can be answered by looking at various indices and reports including the Ease of Doing Business report released every year by a number of organisations around the globe. A close study of their methodology also shows that these studies are thorough and detailed. So, let’s see how does India fare on some of these rankings.

A cursory look at the latest reports shows that over the last few years India has slipped on almost all of these rankings.

Of 185 countries covered in the 2013 Ease of Doing Business Report, [India was ranked](http://www.doingbusiness.org/data/exploreeconomies/india/) 173 in 2013, four places down from its ranking of 169 in 2012. The table below takes a closer look at various indicators covered in the report.

[

![doing\_business\_table](https://substackcdn.com/image/fetch/$s_!sGQw!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F98e99477-b5e0-45fd-925b-0defd69fd26d_906x401.png "doing_business_table")



](https://spontaneousorder.in/wp-content/uploads/2013/04/doing_business_table.png)

Of the 185 countries covered in the report, India ranked 184 on the indicator of enforcing contracts. Timor-Leste beat us to the honour of rank 185. While it’s difficult to believe such a bad state of affairs do exist, and the veracity of the report can itself be questioned, and even if we are too far off the mark set by the report, we can agree that there is a lot of scope for improvement. While the table above provides a snippet of what doing business in India means, it is worth going through them in [greater detail](http://www.doingbusiness.org/Custom-Query/india).

Economic Freedom of the World Report published every year by the Canada based Fraser Institute ranked India at 111 amongst a total of 144 countries ranked in its [2012 report](http://www.freetheworld.com/release.html). What is worrying is that not only has India’s freedom ranking slipped among its peers, the level of economic freedom (measured on a scale of 10) has also come down. After peaking in 2005 with a score of 6.60, India has continuously slipped and scored 6.26 in 2010, the latest year for which the data is available (2012 report). The figure below shows how India has fared on the index since 1970.

[

![doing\_business\_chart](https://substackcdn.com/image/fetch/$s_!QDtT!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F65a4c28f-b35c-419a-89cf-40b4110b3b78_809x487.jpeg "doing_business_chart")



](https://spontaneousorder.in/wp-content/uploads/2013/04/doing_business_chart.jpg)

The figure shows that we are headed in the wrong direction. It is not just a coincidence that India’s growth rate in 2012-13 has also been the lowest in recent times.

The [Global Competitiveness Report](http://reports.weforum.org/global-competitiveness-report-2012-2013/) for 2012-13 published by the World Economic Forum ranks India at 59, three places down from last year. Once ranked ahead of Brazil and South Africa, India now trails them by some 10 places and lags behind China by a margin of 30 positions.

Another interesting index is [Legatum Prosperity Index](http://www.prosperity.com/) published by the Legatum Institute which measures wealth and well-being of a country based on some 91 odd indicators categorised into eight sub-indices – economy, entrepreneurship and opportunity, governance, education, health, safety and security, personal freedom and social capital. India stood at 101 amongst a total of 142 countries ranked in 2012.

While the findings of these reports may not be accurate, we can safely assume that all these reports and several others successfully shows that we are headed in the wrong direction, or at least we are not improving as fast as other countries. Doing business in India is not getting easier, we are not getting economically freer, our competitiveness is slipping, and all this is making us less prosperous when compared to our peers.

Looks like we have our task cut-out for us. Let’s get to it. Any and all ideas are welcome.

Read more about the recent Ease of Doing Business Report: [https://spontaneousorder.in/limitations-in-our-understanding-of-ease-of-doing-business-in-india/](https://spontaneousorder.in/limitations-in-our-understanding-of-ease-of-doing-business-in-india/)

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Shut Down TRAI and Let Free People TRY Instead

Original: https://www.spontaneousorder.in/p/shut-down-trai-and-let-free-people-try-instead

Author: Spontaneous Order

Published: 2013-04-05T14:39:25.000Z

Topics: telecom-regulation, advertising-caps, free-market-broadcasting, public-goods

> Telecom Regulatory Authority of India (TRAI) wants to compel broadcasters to limit the amount of advertising to 12 minutes per hour, as compared to the current 21 minutes. Firstly, this is an assault on the basic freedom of association and disassociatio..

**Summary:**

Andrew Humphries argues that TRAI's proposal to cap broadcaster advertising at 12 minutes per hour (down from 21) assaults freedom of association in the voluntary TV market, treating producers as slaves to viewers rather than free actors serving mutual benefit. Economically, ads fund programming; restricting them will deter providers whose rewards fall below opportunity costs, harming consumers with less or lower-quality content. Markets self-correct: 1990s email spam was solved by competing providers offering filters before regulation, and options like Netflix already enable ad-free viewing via fees. Humphries debunks the 'public goods' theory applied to broadcast TV, noting markets overcome non-excludability through advertising without force, unlike Britain's coercive TV tax. Regulators like TRAI appear benevolent by ignoring these costs to freedom and innovation. The classical-liberal solution: shut down TRAI and trust free people to discover better terms through competition.

**Key points:**

- TRAI's advertising cap violates voluntary exchange by forcing broadcasters to accept unfavorable terms, reducing programming supply.
- Advertising revenue persuades producers to create content; mandates capping it at 12 minutes/hour will lead to less TV for consumers.
- Markets innovate solutions like ad-free Netflix without regulation, as seen in 1990s spam resolution by email providers.
- Broadcast TV demonstrates markets provide 'public goods' via advertising, refuting government compulsion needs.
- Shut down TRAI to let free people experiment and deliver mutual benefits.

**By Andrew Humphries**

* * *

Telecom Regulatory Authority of India (TRAI) [wants](http://articles.timesofindia.indiatimes.com/2013-03-29/india/38125010_1_trai-telecom-regulatory-authority-manish-tewari) to compel broadcasters to limit the amount of advertising to 12 minutes per hour, as compared to the current 21 minutes.

Firstly, this is an assault on the basic freedom of association and disassociation. No one is forced to buy a TV or to watch it. No one is forced to produce programming and “serve” the viewers.  The production and distribution of programming is a voluntary transaction. Why should consumers be free to compel people to “provide them” with programming at whatever terms they dictate?  Are the people in the broadcast industry the slaves of the viewers? Is their life purpose to provide programming for you and me? Or is their life their own?  In a free market, they serve us because it is in their interest.  It is only in a free market that arrangements are voluntary and mutually beneficial.

But irrespective of the moral issue, this restriction—like all other restrictions intended to tip the balance in favour of one party at the other’s expense—*will ultimately harm the party* *it is supposed to benefit*.  The volume of goods and services in the market is intimately connected to the terms of exchange that bring the most number of buyers and sellers into the market.  If government sets the terms in “favour” of one party, the terms necessarily become less favourable for the other.  Not gaining the terms he or she wants, the other part is free to refrain from producing goods for the market. Not only is this not good for him or her, consumers will be less well provided than they would like and be willing to pay for.

In this case, what people don’t understand is that the *advertising is paying for the programming they enjoy*.  They only see the nuisance of advertising interrupting their enjoyment. But if there is no (or less) advertising, they won’t have the programming at all (or it will be provided at a lower quality).  If the advertising is capped by mandate, potential providers will be less willing to provide programming and TV services for the market because the reward will not be higher than their opportunity cost.  They will do something else instead.  Advertising is one of the prices we pay for persuading people in the broadcast industry to work for us.

(A close friend assures me that he watches TV for the advertising, not the programs.)

This does not mean that we will always have to bear the same costs for goods.  Competing entrepreneurs are constantly trying to discover how to offer better terms to consumers.   I remember clearly in the 90’s, for example, that people were incensed by the level of unwanted spam they were receiving in their email inboxes. There was a hue and cry of calls for government regulation to fix this “market failure,” but before these regulations could take root, competition solved the problem.  Email service-providers heard the demand for spam-free email and competed with one another to provide it to consumers.   In an open market, broadcasters do the same.  They try to discover the level of advertising, fees, technology, and the quality and quantity of programming that will bring the most viewers to their product.   If enough consumers want to pay for advertising-free content, entrepreneurs will provide it.   Satellite and cable boxes and online TV sources like Netflix already allow people to pay in fees rather than watch advertising.

Since I became interested in economic and libertarian ideas, I have always admired the ingenious ways people solve problems without resorting to force.

According to many academic economists, the market is unable to provide what economists call “public goods,” i.e., goods which are “non-excludable.” Once such goods exist, you can’t restrict who has access to them. The argument goes, therefore, that, since entrepreneurs cannot restrict a public good only to those who pay for it, no one would have an incentive to pay, and thus entrepreneurs don’t have an incentive to provide the good.  The “non-excludability” is a barrier to what would otherwise be mutually advantageous gain.  Some of these economists conclude that government must, therefore, compel people to pay for public goods.  Broadcast television is a classic example of a public good. Once it is broadcast, it is impossible to stop anyone with a TV from watching.  How would you get them to pay?  Operating on this premise, the British government, for example, charges a tax to everyone who owns a TV and hires hordes of snooping inspectors to spy on the British public like a petty KGB with costly monitoring equipment to “catch” people who have not paid the tax.

Such economists, however, should look around and see how many public goods are actually provided in the market without force.  Advertising is a wonderful example of how peaceful people can discover ways of overcoming barriers to mutual benefit.   Government authorities like TRAI can make themselves *look* good because the public is ignorant of the costs that such regulation imposes on them.

We need to start trusting free people to provide us with ever increasing benefits if we only leave them free to do so. And we will only gain this trust if we understand [how markets work](http://www.iea.org.uk/sites/default/files/publications/files/upldbook104pdf.pdf).

* * *

**About Andrew Humphries**

## Lopsided Justice- Fate of low budget private schools under RTE

Original: https://www.spontaneousorder.in/p/lopsided-justice-fate-of-low-budget-private-schools-under-rte

Author: Spontaneous Order

Published: 2013-03-22T15:33:28.000Z

Topics: rte-act, private-schools, education-policy, school-infrastructure

> By Arvind Ilamaran The Right of Children to Free and Compulsory Education Act, 2009 lays out a set of conditions that need to be satisfied by every school other than those established, run or controlled by Central government, appropriate government or t..

**Summary:**

The Right of Children to Free and Compulsory Education Act, 2009 (RTE) imposes stringent infrastructure, teacher, and other norms exclusively on non-government schools, mandating compliance by 2013 or face shutdown; in Delhi alone, this endangers 1250 low-budget private schools serving over 200,000 poor students, with no state provisions for reallocation. Government schools are exempt from these requirements, despite the PAISA report (2010-2011) exposing massive failures: 38% lack adequate classrooms, 43% have no girls' toilets, 34% no boys' toilets, 8% inadequate drinking water, 43% no ramps for disabled students, 50% no boundary walls, and 43% deficient libraries. This lopsided enforcement reflects a flawed classical-liberal critique of the 'more-inputs-more-learning' ideology dominating Indian public education discourse, which has driven a sixfold per-student spending increase alongside declining knowledge levels, without evidence linking current inputs to better outcomes. Low-cost private schools, delivering effective education affordably to the poor, face unjust closure, highlighting the need to recognize private sector efficiency over input-heavy public monopolies.

**Key points:**

- RTE Act mandates non-government schools meet strict norms by 2013 or shut down, threatening 1250 Delhi schools and 200,000 students.
- Public schools evade RTE norms yet fail them badly: 38% lack classrooms, 43% no girls' toilets, 50% no boundary walls per PAISA report.
- Public education's 'more-inputs-more-learning' paradigm raised per-student spending sixfold but worsened learning outcomes.
- Closing affordable private schools serving the poor perpetuates injustice by ignoring their cost-effective results.

**By akanksha**

* * *

By Arvind Ilamaran

The Right of Children to Free and Compulsory Education Act, 2009 lays out a set of conditions that need to be satisfied by every school other than those established, run or controlled by Central government, appropriate government or the local authority. Non-governmental schools which do not conform to these requirements by 3013 will be shut down. In Delhi alone, this would put of operations close to 1250 schools and more than 200,000 students studying in these schools will be left without a school to study in, given that the State hasn’t made arrangements to reallocate students from such schools to other operational public/private schools.  
Of the many issues to be contended with, the most important is why the criteria for meeting norms and standards applies to only private schools and not to public schools? What is the rationale behind leaving the public schools from scrutiny? While one could claim that the existing conditions for construction of public schools would, by default, cover the RTE requirements, the recent PAISA report by the Accountability Initiative of the Center for Policy Research, India has destroyed such illusions. The report states that as of 2010-2011, of all public schools surveyed:  
• 38% did not have adequate number of class rooms  
• 43% did not have girls toilet  
• 34% did not have boys toilet  
• 8% did not adequate drinking water  
• 43% did not have ramp for physically challenged students  
• 50% did not have boundary walls  
• 43% did not have library at all or not more than 10 books per student in them  
While there is an overall improvement compared to 2005-2006, there is an inherent dissonance in accepting lower standards in public schools as acceptable while in private it is not. The underlying incoherence arises from the ideology that with increase in inputs such as better infrastructure, teachers etc. there will be an increase in quality of education. This conclusion has clearly been arrived at without a comparative cost-benefit analysis between public and private schools.  
The entire discourse of education and especially public education in India revolves around the ‘more-input-more-learning’ paradigm, which has led to nearly a six fold increase in expenditure per student but decline in knowledge level in the same period, while there has been no conclusive study that proves that inputs in the current form improve learning outcomes. This has also led to the injustice of closing down poor but effective private schools.

* * *

**About akanksha**

## Are We Whitewashing Decentralization in the Education Sphere? Lessons from PAISA

Original: https://www.spontaneousorder.in/p/are-we-whitewashing-decentralization-in-the-education-sphere-lessons-from-paisa

Author: Spontaneous Order

Published: 2013-03-22T15:32:56.000Z

Topics: education, decentralization, school-management, capacity-building

> By Abir Joshi Reading between the lines of the 2012 PAISA Report published by Accountability Initiative, it becomes clear that the ideals of decentralized autonomy envisioned by the 73rd and 74th amendments to the Constitution are nowhere close to being..

**Summary:**

The 2012 PAISA Report reveals that India's education system fails to realize the decentralized autonomy promised by the 73rd and 74th constitutional amendments, with only 2% of expenditure reaching School Management Committees while major decisions remain at district or state levels. Despite education spending doubling from Rs. 68,853 crores in 2007-08 to Rs. 147,059 crores in 2012-13, learning outcomes stagnate or decline under the top-down RTE Act framework, stifling school-level innovation. Schools receive meager Rs. 10,000 annually for development and Rs. 500 per teacher for materials, often exhausted on essentials and whitewashing (67% of schools), due to inadequate funds and informal bureaucratic directives for visible projects like painting before official visits. Anecdotal evidence shows decisions are not truly autonomous, with officials imposing uniform purchases ignoring school needs. Community participation alone fails without capacity building, as seen in studies where 25% of Village Education Committee members were unaware of their roles. International examples from Indonesia and Kenya highlight that training communities to monitor and act—such as hiring para-teachers—improves outcomes. The post argues from a classical-liberal viewpoint that India's socialist centralized education policymaking wastes resources; true decentralization empowering schools and trained local communities is essential for meaningful learning and global competitiveness.

**Key points:**

- Only 2% of education expenditure reaches School Management Committees, with key decisions controlled at higher levels.
- Meager school grants of Rs. 10,000/year are mostly spent on whitewashing due to bureaucratic pressures and fund constraints.
- Community participation requires capacity building to work, as untrained Village Education Committees show widespread unawareness of roles.
- Training school committees in Kenya improved learning by enabling monitoring, hiring para-teachers, and grant oversight.
- Centralized education fails to build human capital; devolve real power to schools and communities for innovation and efficiency.

**By akanksha**

* * *

By Abir Joshi

Reading between the lines of the 2012 PAISA Report published by Accountability Initiative, it becomes clear that the ideals of decentralized autonomy envisioned by the 73rd and 74th amendments to the Constitution are nowhere close to being realized. A measly 2% of all education related expenditure is provided to School Management Committees, with all major decisions regarding finances, infrastructure, teachers taken at the district or state level.  
While total expenditure on education has doubled from Rs. 68,853 crores in 2007-08 to Rs. 147, 059 in 2012-13, learning outcomes have remained flat or are falling. In this context, PAISA rightly raises the question, can our top-down delivery system enable the transition from schooling to learning? Moreover, with the context of the Right to Education Act, an all-encompassing standardized idea of education delivery being imposed on students; can we expect the innovation and leadership required at the school level to increase learning levels in our broken public sector?

First and perhaps most important, the amount of money given to schools directly is simply not substantial enough to affect any change in the last mile of education service delivery. The total sum of grants given to primary schools for school development and maintenance is only around Rs. 10,000 per year. Each teacher receives and additional Rs. 500 per year for learning materials such as charts, reference books, posters and other teaching aids. Such funds are simply not adequate to transform schools into the ecosystems of leanings that will enable any meaningful transformation in education quality. PAISA finds that most of the money “seems to get absorbed in just purchasing essential supplies, leaving little for other activities.” Moreover, 67% of schools spent the majority of money on whitewashing their buildings. While whitewashing may be important, it is doubtful that every school in India needs to repaint its building every year. Keeping in mind the appalling state of learning in public schools, could this money be better spent?

Opponents of decentralization tend to obsess such figures and argue against devolving more power to states and for more centralization (if that is even possible), an argument that is largely counterintuitive. PAISA suggests that schools do the best that they can with the limited means available to them. Whitewashing may not be at the top of the list of schools priorities and most often, they want to invest in infrastructural repairs, fixing drinking water facilities, adding toilets or investing in learning material, however such options are simply not financially viable.  
“Whitewashing is an easy, tangible activity to undertake if funds have to be spent quickly and this is perhaps the reason that schools use the money left over from supply purchase for whitewashing.”

Anecdotal evidence also suggests that although the use of this money may be officially autonomous spent by schools, informal power structures in rural India render decision to not be autonomous at all. District, block and state level education bureaucrats often informally instruct schools to whitewash their walls. Buildings are painted for the visit of an important Minister. Officials in closed rooms in state capitals and district headquarters issue straightjacket orders to purchase furniture and cupboards without any regard to the individual’s need of each school. Complains to Panchayat Presidents mostly go unheeded as the District Educational Officer is not legally accountable to Gram Panchayats.

It is impossible to expect local communities to counteract these formal and informal power structures, especially in rural India, without formal capacity training. Across the world increased participation of local communities has only found to improve public service delivery significantly when they have been empowered to take action. A study on Village Education Committees (VECs), a pre-RTE body within local government institutions mandated to monitor education, found that almost 25% of VEC members were not aware that they were on any committee. Additionally, 26% were not aware of their responsibilities and powers. Therefore, community participation alone may not be all-encompassing solution to address implementation challenges.

In Indonesia, increased participation of local residents in community meetings was not found to lead to any improvement in the implementation of road projects in that area. Similarly, in Kenya encouraging school committees to monitor teachers was not found to have any impact on increasing learning outcomes. There was a marked difference however, when the same school committees in Kenya were taught how to effectively monitor schools. By making them aware of their responsibilities and powers to hire para-teachers and monitor grants, learning indicators in local schools improved.

Community action accompanied by appropriate capacity building is the only effective path forward to decentralize our socialist education policymaking process. The PAISA report makes it clear that our centralized system of education is incapable of developing the kind of human capital that is necessary for India to successfully compete in the global knowledge economy. Effective decentralization that empowers school leaders and the local community to make real decisions regarding the finances, development plans, teachers and quality of education delivery in schools is the need of the hour and imperative, if we are to stem the wastage in developing our human resources and enable schooling to become meaningful learning.

* * *

**About akanksha**

## Listening to winds of change in Chhattisgarh

Original: https://www.spontaneousorder.in/p/listening-to-winds-of-change-in-chhattisgarh-2

Author: Spontaneous Order

Published: 2013-03-22T12:13:09.000Z

Topics: scheduled-tribes, inclusive-development, chhattisgarh, urban-growth

> I was recently in Chhattisgarh as a member of Joint Review Mission of Centrally Sponsored Scheme of teacher education. This initiative of the Government of India’s MHRD, is a nationwide program for restructuring of teacher education, largely in response

**Summary:**

Rashmi Sinha, during a visit to Chhattisgarh as part of a Joint Review Mission on teacher education restructuring under India's Right to Education Act, observes rapid urban development in Raipur and Ambikapur since the state's 2001 creation from Madhya Pradesh. Modern infrastructure, new cars, skyrocketing real estate prices due to national and international companies, and immigrant-owned hotels signal market-driven growth benefiting outsiders like cab driver Punjab Singh, whose land value multiplied. However, Scheduled Tribes, comprising 31.8% of the population (6,616,596 people), remain strikingly underrepresented in cities, often relegated to low-end jobs like serving tea or retreating to forests. Anecdotes highlight this disconnect: a tribal office worker too busy to chat, and a professional's defeatist view that tribes 'rush back to jungles.' A young bureaucrat notes gradual inclusion, but Sinha critiques attitudes that dismiss tribal unwillingness without reflection. She advocates for developmentally rooted, inclusive models responsive to natives' aspirations, leveraging the state's mineral wealth without further isolating or marginalizing tribes, aligning with classical-liberal emphasis on spontaneous, bottom-up order over top-down imposition.

**Key points:**

- Chhattisgarh's urban centers like Raipur and Ambikapur show rapid market-led growth with rising real estate and company influx since 2001.
- Scheduled Tribes (31.8% of population, 6.616 million) are largely absent from urban development, working menial jobs or staying in forests.
- Dismissive official attitudes fail to address tribal disconnection, treating their forest preference as inevitable.
- Inclusive development models must respond to tribal aspirations to prevent marginalization amid resource-rich state's commercial boom.

**By Rashmi Sinha**

* * *

*I was recently in Chhattisgarh as a member of Joint Review Mission of Centrally Sponsored Scheme of teacher education. This initiative of the Government of India’s MHRD, is a nationwide program for restructuring of teacher education, largely in response to Children’s Right to Free and Compulsory education. I will post my reflections on this experience over the next three days.  This first post gives a picture of the considerably slow inclusion of scheduled tribes in the development of the state. And the need for more Inclusive Development Model.The next two: “Restructuring Teacher Education in Chhattisgarh,” and “Schools Remain a Casualty in Dantewada” will outline the challenges the state is facing in restructuring teacher education and provide a snapshot of the education scenario in  strife-torn Dantewada respectively.*

As I stepped into the provincial capital city of Raipur and then into the district town  of Ambikapur, I sensed the global winds of change. Both these towns,  in the heart of India, are fast growing urban centers with modern infrastructure. The present state of Chhattisgarh was carved out of undivided Madhya Pradesh in November 2001 and since then it is well on its way to restructuring its new identity. New generation cars sped up and down the roads of these two cities.

I was told by our cab driver, Punjab Singh, a young Maharashtrian fellow, that the prices of real estate had flown meteorically high here due to the entry of many national and international companies. He has benefited from it too, as the value of his recently bought land has become manifold. I checked into Hotel Punjab Palace in Raipur, and later stayed in another hotel in Ambikapur, both owned by immigrants from neighbouring states. Both hotels had internet connectivity, though intermittent and slow.

[

![pic1](https://spontaneousorder.in/wp-content/uploads/2013/03/pic1-300x224.jpg "pic1")



](https://spontaneousorder.in/wp-content/uploads/2013/03/pic1.jpg)

*\[Scheduled Tribe population of Chhattisgarh State*

*is. 6.616,596 constituting 31.8 percent of the total population of the State*\]

Yet, something seemed amiss. In the midst of my official tours and chats with everyone I met in office spaces and bazaars, I wondered about the lack of visibility of Scheduled Tribes. Their presence did not match their share of 31.8 per cent in the total population. Jugnu, a young man at the office, was always so busy in serving tea and following everyone’s orders that he never had enough time for a chat with me. He was from the tribal community.  It appeared that the native population remains disconnected from the overall development and either works as servants and peons in cities or prefers thickly forested areas of the state.

I shared my concerns with a professional at Ambikapur, who came here after the state was carved out from Madhya Pradesh. In a pitying and defeatist tone, she admitted, ‘’Oh! However hard we try to bring them out from forests but they rush back to Jungles at the slightest opening.” Disturbed by her dismissal and the absence of reflection on the apparent unwillingness of the tribal community to participate, I posed my anxiety to a young bureaucrat whom I met at the airport on my way back to Delhi. She had completed her tenure as CDO Ambikapur. In our brief conversation, she said the process of inclusion is always gradual, which provided some reassurance. However, the situation stirred me to listen more carefully to the wind of changes, and reflect on  developmentally more rooted and inclusive models that do not drive natives back to forests or are designed to keep them at the bottom of the pyramid.

With the treasure of precious minerals and natural wealth, it remains a dream state for all rewarding commercial activity. The development model then has to respond to aspirations of its residents and not cause their further isolation and marginalization.

* * *

**About Rashmi Sinha**

## Sweet Liberty Has Been Served to New Yorkers in a Big Fat Cup

Original: https://www.spontaneousorder.in/p/sweet-liberty-has-been-served-to-new-yorkers-in-a-big-fat-cup

Author: Spontaneous Order

Published: 2013-03-13T15:00:47.000Z

Topics: nanny-state, self-ownership, welfare-state, personal-liberty

> The New York Supreme Court has struck down Mayor Bloomberg’s attempted ban on large sodas. The judgement is a ray of light peeking through the dark clouds of the growing nanny state. Why is it important to protect the freedom to drink large sugary drink

**Summary:**

The New York Supreme Court struck down Mayor Bloomberg’s ban on large sodas, celebrated as a classical-liberal triumph piercing the gloom of the expanding nanny state. Andrew Humphries argues that conceding state authority over what individuals put in their bodies undermines self-ownership, opening the door to total state control over every aspect of life. Responding to claims that soda consumption burdens public healthcare costs, he counters that the welfare state—not personal choices—fosters conflict by supplanting self-ownership, personal responsibility, and mutual liberty with 'mutual plunder,' where everyone lives at others' expense. The state cannot fairly manage this plunder, and welfare systems shield people from choice consequences, leading to economic incoherence and crises, as illustrated in Tom Palmer’s 'After the Welfare State.' Ultimately, liberty means individuals bear their own behavioral costs—like drinking large sodas—while keeping their money and leaving others alone.

**Key points:**

- New York Supreme Court invalidated Mayor Bloomberg’s large soda ban, defeating nanny-state overreach.
- State control over personal consumption erodes self-ownership, enabling full life control by authorities.
- Welfare state creates healthcare cost conflicts through mutual plunder, not individual behaviors like soda drinking.
- True liberty requires bearing personal choice costs without state intervention or imposing on others.

**By Andrew Humphries**

* * *

The New York Supreme Court has [struck down](http://dailycaller.com/2013/03/11/soda-ban-ruling-a-devastating-defeat-for-mayor-bloomberg/) Mayor Bloomberg’s attempted ban on large sodas. The judgement is a ray of light peeking through the dark clouds of the growing nanny state.

Why is it important to protect the freedom to drink large sugary drinks? Because if the principle is conceded that the state has a right to tell you what you can and cannot put in your body, then in principle your life is the property of the state—every element of your life can be controlled by whoever happens to hold the reins of the state.

Some might argue that if the state is responsible for providing healthcare to its citizens, then it has a right to control their behavior so they don’t “impose costs” on others.  But it is not drinking soda that imposes costs on others, it is the welfare state.  The welfare state brings people into conflict by replacing self-ownership, personal responsibility, and mutual liberty with mutual plunder, in which everyone lives at the expense of everyone else.  The state is incapable of navigating this mutual plunder in a way that is “fair” to everyone.

(The welfare state also shields people from the costs of their choices and makes the sum of economic decisions incoherent and unsustainable. Tom Palmer’s *[After the Welfare State](http://studentsforliberty.org/wp-content/uploads/2012/04/After-the-Welfare-State-PDF.pdf)*, illustrates how the mutual plunder, irresponsibility, and economic miscoordination inherent to the welfare state have wrought the financial and debt crisis the world is facing today.)

Put simply, this is liberty: I get to drink my big soda but I have to carry the costs of that behavior, you get to keep your own money but you have to leave me alone.

* * *

**About Andrew Humphries**

## Regulating Hair Cuts for the “Greater Good”

Original: https://www.spontaneousorder.in/p/regulating-hair-cuts-for-the-greater-good

Author: Spontaneous Order

Published: 2013-03-05T15:24:06.000Z

Topics: totalitarianism, central-planning, individual-freedom, hayek

> TOI reports today that “North Korea lists 28 hairstyles to keep capitalism at bay.” The Nazi’s outlawed Jazz music and the Soviets outlawed blue jeans. Such things may become the avenues for individuality, self-expression, dissent, and free thinking

**Summary:**

North Korea has mandated 28 approved hairstyles to prevent capitalist influences, echoing historical totalitarian bans like the Nazis' outlawing of jazz music and the Soviets' prohibition of blue jeans, which served as symbols of individuality, self-expression, dissent, and free thinking. Totalitarian regimes, driven by control-freak tendencies, cannot tolerate any freedom because, as F.A. Hayek argued in *The Road to Serfdom*, it introduces spontaneity—unplanned and unforeseen outcomes—that disrupts central planning. Only absolute domination over compliant subjects suffices for planners, as freedom generates embarrassing unintended consequences for government interventions. The endgame of propaganda and cultural engineering is a populace that internalizes collectivist values, yet petty restrictions inevitably clash with human individuality, as depicted in Ayn Rand's *Anthem*. From a classical-liberal viewpoint, such overreach highlights the regime's fragility and may spark resistance, with hopes that a North Korean youth desiring a spiky haircut will recognize the injustice and join dissenters.

**Key points:**

- Totalitarian regimes regulate trivial matters like hairstyles to suppress spontaneity arising from individual freedom, per Hayek's *Road to Serfdom*.
- Bans on cultural symbols such as jazz by Nazis and blue jeans by Soviets aimed to eliminate avenues for self-expression and dissent.
- Petty restrictions provoke the inherent individuality of people, potentially fueling resistance against collectivism.

**By Andrew Humphries**

* * *

TOI reports today that “[North Korea lists 28 hairstyles to keep capitalism at bay](http://timesofindia.indiatimes.com/world/china/North-Korea-lists-28-hairstyles-to-keep-capitalism-at-bay/articleshow/18805524.cms).”   The Nazi’s outlawed Jazz music and the Soviets outlawed blue jeans.  Such things may become the avenues for individuality, self-expression, dissent, and free thinking.

Totalitarians cannot stomach any amount of freedom.  This is not only because they are control-freaks by nature, but because, as Hayek pointed out in the *Road to Serfdom*, any sphere of freedom is the source of spontaneity—that which is unplanned and unforeseen. Such spontaneity threatens to upset the rest of “the plan.” Only total domination over passive, compliant androids will do for the central planner. Freedom always creates embarrassing “unintended consequences” of government plans and interventions.

The ultimate end of propaganda and cultural engineering is to make a populace that complacently believes in collectivist values.  But the more extensive and petty the restrictions, the more the inherent individuality of people will butt up against the regime.  (Ayn Rand’s *[Anthem](http://www.gutenberg.org/files/1250/1250-h/1250-h.htm)* depicts this tension in a compelling literary form.)

….Hopefully some spunky North Korean kid who wanted a spiky haircut feels the injustice of the system and joins the ranks of those who will resist.

* * *

**About Andrew Humphries**

## Pakistan passes RTE Bill –does a piecemeal job copy-pasting bad legislation from its neighbour

Original: https://www.spontaneousorder.in/p/pakistan-passes-rte-bill-does-a-piecemeal-job-copy-pasting-bad-legislation-from-its-neighbour

Author: Spontaneous Order

Published: 2013-01-08T17:36:14.000Z

Topics: rte-act, education-policy, private-schools, teacher-incentives

> Comparison of Indian RTE Act and Pakistan RTE Bill [Image Courtesy: Top News: topnews.in] On Nov 12, 2012, Pakistan’s National Assembly passed the historic Right to Free and Compulsory Education Bill, 2012 paving the way to give effect to Article 25A ..

**Summary:**

Pakistan's National Assembly passed the Right to Free and Compulsory Education Bill 2012 on November 12, implementing Article 25A for children aged 5-16 in Islamabad Capital Territory, largely copy-pasting flaws from India's RTE Act while devolving education to provinces post-18th Amendment. Both ignore early childhood education (ages 3-6), deemed a critical period for brain development. Pakistan mandates 10% reservation for disadvantaged groups in private schools without reimbursement, mirroring India's 25% Section 12 but learning nothing from its implementation failures. Financing assumes concurrent Centre-State responsibility, risking disputes like India's 65-35 split that prompted state leaders like Nitish Kumar to demand full central funding. Positively, Pakistan recognizes private initiative with incentives for school setup and grants-in-aid, contrasting India's input-based norms (e.g., infrastructure, teachers) estimated to close 1-2 lakh low-cost private schools by April 2013. Pakistan also introduces teacher awards, absent in India but present in developing nations like Chile and Uganda. Both impose parent duties for neighbourhood school admission—Pakistan adds fines up to Rs. 5,000 or 3 months imprisonment—while overlooking quality outcomes; India mandates inputs without accountability, Pakistan delegates norms hopefully including outputs. The classical-liberal critique highlights how both prioritize facilities over education, stifling private supply and ignoring DISE data on rising private enrolments.

**Key points:**

- Pakistan's RTE Bill copies India's 25% private school reservation at 10% without reimbursement, extending to ages 5-16 only in Islamabad.
- Pakistan incentivizes private schools via grants and setup aid, and introduces teacher awards, unlike India's closure-threatening input norms for 1-2 lakh schools.
- Both laws neglect early childhood education and outcome-based standards, focusing on inputs and facilities.
- Parent duties include neighbourhood school admission, with Pakistan penalizing non-compliance via fines or jail.

**By Abhishek Bhattacharya**

* * *

## [Comparison](http://schoolchoice.in/research/comparison-india-rte-and-pak-rte.pdf) of Indian RTE Act and Pakistan RTE Bill

[

![](http://topnews.in/law/files/india-pakistan-flag_0.jpg)



](http://topnews.in/law/files/india-pakistan-flag_0.jpg)

\[Image Courtesy: Top News: topnews.in\]

On Nov 12, 2012, [Pakistan’s National Assembly passed the historic Right to Free and Compulsory Education Bill, 2012](http://tribune.com.pk/story/464989/na-passes-right-to-free-and-compulsory-education-bill/) paving the way to give effect to Article 25A of the Constitution of Pakistan which states, ”The State shall provide free and compulsory education to all children of the age of five to sixteen years in such manner as may be determined by law.” The bill was introduced in the Senate by [Yasmeen Rehman](http://www.google.com.np/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&ved=0CDUQFjAB&url=http%3A%2F%2Fwww.na.gov.pk%2Fen%2Fprofile.php%3Fuid%3D241&ei=arR0UaWpBonzrQe3n4HoCQ&usg=AFQjCNEycV64FUB8qzR3ZBsJLLSsn4eZQg&bvm=bv.45512109,d.bmk) as a private member’s bill.

In comparison to India where Education is under the Concurrent List indicating concurrent responsibility and powers to enact legislations, Pakistan has totally devolved Education to the Provinces. Therefore, each province has to promulgate such a legislation to give effect to the 18th amendment. Consequently, the [RTE Act in India](http://righttoeducation.in/rte-act-in-parliament) extends to the whole of India except J&K which has a special status where education comes under the State List. However, the slated education law in Pakistan extends to only Islamabad Capital Territory (one of the two territories controlled by the Federal Govt.) and would be applicable to all schools run by the Federal and Local Govt.

The fundamental right in the Pakistani bill has been extended to children of ages 5-16 years in contrast with India where the law is applicable to only children of ages 6-14 years. The importance of [early childhood education](https://spontaneousorder.in/more-than-60-million-pre-primary-children-waiting-for-the-system-to-respond/) seems to have been completely ignored by both. While Pakistan has neither fully included nor excluded pre-school education (roughly 3-6 years), India lacks a Central law altogether in this space. They seem oblivious to the research labelling this period as the ‘critical period’ for the complete development of a child’s brain.  The formation of attitudes and values as well as the desire to learn are also influenced at this stage. Therefore, inadequate support or neglect at this stage can lead to negative consequences, which are sometimes irreversible in nature. If media reports are to be believed, a draft policy on “Early Childhood Education and Care” is in the making in India.

The Right to Education legislation in India was heralded as an inclusive legislation providing an opportunity to the marginalised sections to obtain private education at no cost. This inclusion was effected by the [impugned Section 12](http://www.prsindia.org/theprsblog/tag/article-21a/) which mandated 25% reservation for economically weaker and disadvantaged groups in unaided private schools. The hangover of socialistic agenda has persisted in the subcontinent resulting in blind copy-pasting by Pakistan which has provided reservation to the disadvantaged group to the tune of 10%. Oddly, instead of learning from the poor experience of its neighbour in implementing the flawed reservation model, Pakistan has kept the reimbursement mechanism out of the bill.

Finance becomes paramount in a legislation of such scale. In both countries, concurrent financial responsibility has been assumed by both the Federal and State Governments. The ratio of Centre-State split, spelt out in India as 65-35 (90-10 for North East), led to bitter fallouts between the Centre and States. [Nitsh Kumar was famously quoted](http://www.thehindu.com/news/centre-should-fund-states-for-implementation-of-rte-act-nitish/article390453.ece) saying the Centre should meet cent per cent expenditure without specifying state’s share. His neighbouring CM[, Mayawati had gone a step ahead](http://righttoeducation.in/sites/default/files/ccs_rte-rules_uttar-pradesh.pdf) and framed rules which state, “The Act shall remain in force subject to the condition that adequate funds will continually made available by the Central Government.” Therefore, it remains to be seen if Pakistan can deftly handle the contentious issue of financing the universal education programme.

One area where Pakistan has applied its brains is recognising the fact that private initiative complements the government in providing education. It has mentioned providing incentives to organisations/enterprises for setting up of schools. Going further, the law also mandates the establishment of a system of grants-in-aid to improve the attendance of poor students.

In comparison, India has blissfully ignored the results of its own DISE survey, reflecting [considerable increase in absolute as well as proportion of enrolment in private schools over the years](http://articles.economictimes.indiatimes.com/2013-01-03/news/36130452_1_nsso-consumption-expenditure-national-sample-survey-office/2). And, it has decreed the stifling of private education by mandating them to obtain recognition, fulfilling a list of input-based norms and standards like PRT, infrastructure- drinking water, playground, rooms, library etc, before April 2013 or face closure. As a result, it is [estimated that 1-2 lakh schools will close down](https://spontaneousorder.in/is-rte-really-a-pro-poor-act/) as fulfilling the norms and standards would entail huge cost escalations rendering them unviable to function.

Another area where Pakistan has quipped India is Teacher’s incentives. It is marked by its conspicuous absence in any Central or State legislation in India. Fortunately, it has found its place in the Pakistani Bill which provides that the government may distribute awards to teachers/administrators/researchers and organisations who meet the minimum criteria. The reader should baulk in disgust for even the developing countries in Latin America, Africa and Asia like Chile, Brazil, Mexico, Bolivia, Uganda and Mozambique have established teacher incentive structures. The modalities have been aptly left to be prescribed in the hope that sanity would come with experience leading to sensible rules.

Duty of parent has been recognised as admitting their children to the neighbourhood school in both nations. Pakistan has put the cart before the horse by sermonising that the parents failing to follow their duty or directions of the SMC shall be rebuked with a fine of Rs. 5,000 or imprisonment upto 3 months or both. The preachy government however falls short of putting any obligation on its own machinery failing to guarantee the fundamental right- a clear case of outsourced accountability.

Lastly, the quality outcomes have been unfortunately overlooked by both the legislatures. Both legislations require registration/recognition of schools. The Indian RTE Act specifies a list of norms and standards, all input-based, to be followed and the focus on outcome is totally absent with the government assuming neither responsibility nor accountability for outcome based learning. On the other hand, Pakistan delegates the modalities of norms and standards to be prescribed leaving room for including outcome based criteria under the norms. We can only hope that Pakistan doesn’t repeat the same mistakes we have made in guaranteeing not the right to education but educational facilities in the historic RTE Act.

[Click here](http://schoolchoice.in/research/comparison-india-rte-and-pak-rte.pdf) for a tabular comparison.

* * *

**About Abhishek Bhattacharya**

## Path-breaking review report on Delhi School Education Act 1973

Original: https://www.spontaneousorder.in/p/path-breaking-review-report-on-delhi-school-education-act-1973

Author: Spontaneous Order

Published: 2012-11-09T18:12:12.000Z

Topics: education-reform, private-schools, school-regulation, teacher-salaries

> Indian education policy space might not have seen a report as progressive as “The Report of the Review Committee on the Delhi school Education Act and Rules, 1973”, thanks to former Chief Secretary of Delhi, Shailaja Chandra, IAS (retd.), the chairper

**Summary:**

Shantanu Gupta hails the Report of the Review Committee on the Delhi School Education Act and Rules, 1973, chaired by former Chief Secretary Shailaja Chandra, as a path-breaking, progressive document in Indian education policy from a classical-liberal viewpoint. Drawing on consultations with over 100 stakeholders, legal cases, national committees, empirical data, and ASER learning outcomes, the report advocates market-oriented reforms applicable nationwide. Key proposals include allowing companies to enter education to curb family-run 'conglomerates,' foster competition, and reduce employee exploitation (p.77, Vol.I). It urges recognition for over 4,000 unrecognized budget private schools—1,593 per MCD survey—meeting RTE basics, noting Pratham's findings of superior outcomes in disadvantaged areas like Nandnagri compared to MCD and government schools; only 16% qualify under strict 800 sq.m. land norms, but 61% under older 200 sq.m. (pp.76-77, Vol.I). The report attributes aided schools' decline to lost autonomy and teacher tenure (p.35, Vol.I), recommends deleting the Essentiality Certificate (Rule 44) to let markets determine school supply amid land scarcity (p.78, Vol.I), and proposes realistic teacher salaries tied to fees (50% benchmark) with 40% on contract except core subjects (p.98, Vol.I). These changes promote private initiative over rigid government controls.

**Key points:**

- Allow companies to operate schools to promote competition, reduce family control, and bridge supply-demand gaps.
- Recognize budget private schools meeting RTE norms, as they outperform government schools per Pratham data.
- Eliminate Essentiality Certificate to enable market-driven school supply.
- Link teacher salaries to school fees (50% benchmark) and permit contracts for non-core subjects to introduce realism.

**By Shantanu Gupta**

* * *

Indian education policy space might not have seen a report as progressive as “[The Report of the Review Committee on the Delhi school Education Act and Rules, 1973](http://issuu.com/knowledgeforall/docs/final_volume_1?mode=window&pageNumber=1)”, thanks to **former Chief Secretary of Delhi, Shailaja Chandra, IAS (retd.),** the chairperson of the drafting committee of this three volume report.

The review committee has consulted more than 100 people from education directorate, non-governmental organizations*, MCD, DDA, NIC, legal fraternity, parent’s association, SCERT, various principals and teachers of private and government schools, private school associations, and various eminent educationists* to compile the report. Though this report reviews Delhi School Education Act, 1973, its commentary on legal cases related to education, references from various national committees on education, use of empirical data on different types of schools and learning outcome data from ASER (*Pratham*) makes this report very robust and applicable to all the states in India.

I will quote some excerpts from the report to highlight some of the salient feature of the report:

**Companies should be allowed to venture into the education sector (page 77, volume I)**

“……The Committee feels that prima-facie it would be a good idea to promote an alternative which precludes commercialization but brings in private resources….”

“…Presently many private schools are being run as family conglomerates. Almost all the key posts in the Management are held by family members and a large part of the income from the school goes back to the concerned family. If Companies are allowed to venture into the education sector, the possibility of exploiting employees would be reduced because a company does not serve the interests of a single person/ family………..It would reduce the gap between demand and supply and promote competition…….”

**Recognition for unrecognized budget performing schools (Page 76, Volume-I)**

The report is one of the very few reports which delve on the importance of unrecognized schools in the city, which are also known as budget private schools or affordable private schools. The review report quotes that as per the Association of Unrecognized Schools there are more than **4000** schools in the primary sector which are running without recognition and as per the MCD survey report there are **1593** unrecognized schools in Delhi. It further states that, if Delhi master plan 2021 (effective from 07.02.2007) stipulates 800 sq. meters land for a primary school are applied than a mere 16% would qualify for recognition. However, if MCD applies old land norms of 200 sq. meters then 61% of unrecognized schools would qualify for recognition.

“…..The Review Committee is of the opinion that as long as the basic requirements spelt out by RTE ‘09 are met and the norms for teacher’s qualifications are fulfilled maximum number of schools should be considered for recognition. A study done by PRATHAM an NGO in the Education sector has revealed that the educational outcomes of **private schools running in one of the most disadvantaged wards of the city Nandnagri were superior to that of the MCD schools and even the Delhi Government schools….”**

This is probably one of the only reports in the government domain, which acknowledges that budget private schools are performing better than the government and municipal run schools.

**Lack of autonomy lead to the decline of Aided schools? (page 35, volume I)**

“……..The Delhi School Education Act and Rules 1973 made a distinction between Government Schools and Government-Aided Schools and Unaided Private Schools. As a result of this, the Managing Committees of aided schools lost the autonomy they once enjoyed. This reduced their control over the staff because of a newly-granted “security of service” which devolved on the teachers. …….. This reduced the chances of recruiting specially identified Principals and teachers who could maintain the high standards for which the schools had once received acclaim…….”

**Remove Essentiality Certificate (page 78, volume I)**

The Review Committee examined the provisions of Rule 44 of the DSEAR ‘73. This provision was made initially to enable the Directorate to assess the requirement of schools in a particular zone before opening of the new school as the land was allotted to the societies to run a school through DDA. ……… There is already scarcity of *nazul* land in Delhi. By restricting the supply of schools in an area, the **Directorate restricts the role of the market in assessing the demand for school education.** ………. There is no such provision under the RTE ‘09; it stipulates that no school shall run without recognition. Therefore, in the opinion of the Review Committee the provision of Essentiality Certificate contained in Rule 44 may be deleted and it should be left open to the market to decide the requirement of schools in a particular area.

**Salary of teachers for low fee schools (page 98, volume I)**

 “……**The expectation that all schools can uniformly pay government scales to the teachers is being unrealistic**. The Review committee recommends that the teachers’ salaries should have some relationship to the school fees in the case of smaller schools. A bench mark could be that 50% of the fee collection would have to go towards teachers’ salaries. 40% teachers may be allowed to be taken on contract basis except for core subjects. Both these measures may bring some realism into what has become a game of charades……”

* * *

**About Shantanu Gupta**

## Government Still Uses Forced Labor in Uzbekistan

Original: https://www.spontaneousorder.in/p/government-still-uses-forced-labor-in-uzbekistan

Author: Spontaneous Order

Published: 2012-10-16T12:31:51.000Z

Topics: forced-labor, economic-freedom, central-planning, hayek

> Wow! I just learned that Uzbekistan government uses forced labor to pick its cotton. Crazy! The BBC article “Doctors and nurses forced to pick cotton” explains that H&M, Marks and Spencer and Tesco have refused to take cotton from Uzbekistan because o

**Summary:**

The Uzbekistan government continues to enforce forced labor in cotton harvesting, compelling doctors, nurses, and others to pick cotton regardless of their skills, opportunity costs, or preferences, as detailed in a BBC article. While child labor has reportedly ceased due to boycotts by companies like H&M, Marks & Spencer, and Tesco, adult forced labor persists. From a classical-liberal viewpoint, this coercion is both inefficient and unjust compared to a system where comparative advantage and market prices voluntarily allocate labor. The post highlights how such government intervention disrupts efficient resource use and undermines personal freedoms, echoing F.A. Hayek's argument in The Road to Serfdom that economic freedom is inextricably linked to individual liberty. By overriding voluntary choices, forced labor exemplifies the serfdom-like path of central planning, prioritizing state quotas over human agency and market signals.

**Key points:**

- Uzbekistan forces professionals like doctors and nurses into cotton picking, ignoring their comparative advantages.
- Boycotts by H&M, Marks & Spencer, and Tesco ended child labor but not adult forced labor.
- Forced labor is less efficient than price-induced voluntary work based on comparative advantage.
- Economic freedom and personal liberty are interconnected, as per Hayek's Road to Serfdom.

**By Andrew Humphries**

* * *

Wow!  I just learned that Uzbekistan government uses forced labor to pick its cotton. Crazy!

The BBC article “[Doctors and nurses forced to pick cotton](http://www.bbc.co.uk/news/magazine-19931639)” explains that H&M, Marks and Spencer and Tesco have refused to take cotton from Uzbekistan because of use of child labor, which has reportedly stopped, but forced labor continues. As the title suggests, doctors and nurses among others are forced to go into the field and pick, irrespective of their abilities, opportunity costs, and preferences.

The article suggests several ways in which such forced labor is less efficient and less just than allowing comparative advantage and prices to induce people to work.  It also shows, as Hayek explained in the *[Road to Serfdom](http://www.iea.org.uk/sites/default/files/publications/files/upldbook351pdf.pdf)*, how economic freedom and personal freedom are tied to one another.

[

![](https://substackcdn.com/image/fetch/$s_!n94l!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F72572882-17c4-415f-b8d0-dee11622a9f8_391x635.jpeg "Forced labor")



](https://spontaneousorder.in/government-still-uses-forced-labor-in-uzbekistan/forced-labor/)

* * *

**About Andrew Humphries**

## Exposing Sheila’s Sophisms

Original: https://www.spontaneousorder.in/p/exposing-sheilas-sophisms

Author: Spontaneous Order

Published: 2012-09-26T09:25:58.000Z

Topics: subsidies, energy-policy, public-choice, market-distortions

> (Image courtesy: Jagran Post) The Delhi government recently launched a program to distribute free LPG cylinders and stoves to 350,000 families to stop the use of kerosene as cooking fuel in Delhi. Cost to taxpayers is expected to be Rs 100 crores (appro..

**Summary:**

The Delhi government's program to distribute free LPG cylinders and stoves to 350,000 low-income families at a taxpayer cost of Rs 100 crores (USD 18.5 million) aims to shift them from kerosene to cleaner fuel, but from a classical-liberal viewpoint, it exemplifies wasteful intervention driven by electoral motives. Even setting aside the unseen costs to taxpayers who forgo equivalent goods and services, the scheme fails because poor households prioritize cheap kerosene over LPG; Planning Commission data shows only 2.9% of households use kerosene overall (0.7% rural, 7.5% urban), while 49% rely on firewood (62.5% rural, 20.1% urban). Subsidized cylinders will likely be resold by recipients to middle- and high-income households facing UPA II's cap on subsidized LPG quotas, enabling arbitrage where poor continue using kerosene until relative prices change. This distorts market signals, promotes inefficiency, and wastes resources; true behavioral change and resource allocation require undistorted market prices, not government subsidies that take from some to give to others.

**Key points:**

- Delhi's Rs 100 crore free LPG scheme for 350,000 families ignores taxpayer opportunity costs and electoral timing.
- Poor households prefer cheap kerosene, using it minimally per data (2.9% overall), so free LPG will be resold to quota-constrained richer households.
- Subsidies create arbitrage opportunities, perpetuating kerosene use among the poor.
- Market prices alone efficiently signal behavior and manage scarce resources; distortions via subsidies cause waste.

**By Kumar Anand**

* * *

[

![](https://substackcdn.com/image/fetch/$s_!M7te!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F6534b338-a150-47d0-a5be-954c0214a53f_260x190.jpeg)



](https://spontaneousorder.in/exposing-sheilas-sophisms/lpg/)

(*Image courtesy: Jagran Post*)

The Delhi government recently launched [a program to distribute free LPG cylinders and stoves](http://www.indianexpress.com/news/to-make-delhi-kerosenefree-3.5-lakh-families-to-get-free-lpg-cylinders-stoves/991362/) to 350,000 families to stop the use of kerosene as cooking fuel in Delhi. Cost to taxpayers is expected to be Rs 100 crores (approx. USD 18.5 million). The intention of the scheme is to help Delhiites prepare food in an environment-friendly way.

Let’s discount the fact that this sudden generosity on the part of the Delhi government stems from the upcoming assembly elections scheduled for 2013 and suppose we are deeply convinced and touched by Ms Sheila Dikshit’s concern for the health and well-being of Delhiites. One hundred crore rupees spent to earn goodwill of 350,000 families will certainly benefit the families that receive the goodies (assuming that the transaction cost for families to acquire the LPG connection do not exceed the cost for connection itself). What is not seen, on the other side of the ledge, are the crores of taxpayers who have to foot the bill, and in turn forego their acquisition of goods and services of an equal amount. But for the sake of argument, let’s also forget about the cost imposed on this unseen and under-represented group.  How will the actual results of this scheme measure up to its good intentions? Will the free distribution of LPG cylinders cause low income households to shift from using kerosene to LPG?

Households with lower income tend to use kerosene as primary cooking fuel, primarily because it is cheap; using a cleaner fuel like LPG figures very low in poor households’ list of preferences. According to the [Planning Commission data](http://planningcommission.nic.in/data/datatable/0904/comp_data0904.pdf) published in April 2012, 49% of all Indian households continue to use firewood as fuel for cooking. What is more interesting is that 62.5% of all rural households and 20.1% of all urban households continue of use firewood for cooking. The corresponding number for kerosene is 0.7% of all rural households and 7.5% of all urban households (2.9% overall).

The announced scheme will give cylinders to poor families at below market rates. At the same time, UPA II has announced it will cap the number of subsidised LPG cylinders for households. What I think will happen (and I may be wrong here) is that the low income households who receive free LPG connections and stoves will sell them to middle and high income families whose demand exceeds their allotted quota of subsidised LPG cylinders. Low income households will continue to use kerosene until the cost of doing so is higher than that of using LPG. Entrepreneurs face a classic opportunity for arbitrage: buy the cylinders where they are cheap (because of government subsidy) and sell them where they are dear.

Trying to change the spending behaviour in the name of protecting environment and helping poor will soon become a fruitless exercise at a huge cost to taxpayers. What government gives to someone, it must take from somebody else. “Do Gooders” of the world should realise that “market prices” are all the signal that is needed to drive behaviour of people and manage scarce resources. Distorting prices by subsidising or taxing only causes inefficient use and wastage of resources.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Show Me One Example of a National School Voucher Program that Works!…Okay: Sweden.

Original: https://www.spontaneousorder.in/p/just-show-me-one-example-of-a-national-school-voucher-program-that-works-okay-sweden

Author: Spontaneous Order

Published: 2012-08-28T12:46:20.000Z

Topics: school-choice, school-vouchers, education-reform, sweden-education

> We know markets lead to innovation, increased quality, and falling costs. Freedom is the sin qua non of innovation in every sector. If someone thinks she can do a better job, she should be free to try. The market will sort those that really do do bett...

**Summary:**

Markets drive innovation, quality improvements, and falling costs across sectors by allowing fallible humans to experiment and compete, a logic equally applicable to education as to cell phones or computers. Sweden's universal school voucher program since 1992 provides compelling evidence: tax funds follow students to any public or private school chosen by families, freeing entrepreneurs to compete and innovate. Before the reform, Swedish schools had declined in quality and attainment since the 1970s due to a monolithic state system lacking choice—only the rich could access private options amid high taxes. Thomas Idergard of Timbro, a Stockholm free-market think tank, describes how the system merges social justice (equal opportunity for all families) with market principles: client choices direct funding, providers compete for satisfaction and results. Echoing F.A. Hayek, competition acts as a discovery procedure selecting better pedagogical and managerial practices. The post concludes that Sweden demonstrates national voucher programs succeed, refuting doubts about applying market freedom to schooling.

**Key points:**

- Sweden launched a universal school voucher system in 1992, funding all students via taxes while allowing family choice between public and private providers.
- Pre-1992, Swedish schools declined since the 1970s from lack of choice, stifling innovation in pedagogy adapted to diverse student needs.
- The voucher model combines equality (universal access) with competition, where funding follows parental choices and schools vie for results.
- Competition in Sweden's system fosters entrepreneurship and a discovery process that improves educational outcomes, per Hayek's insights.

**By Andrew Humphries**

* * *

[

![](https://substackcdn.com/image/fetch/$s_!E4iC!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F74825c4d-daf0-4e2c-a830-b54ab00e233b_220x229.jpeg "logic of school choice")



](https://spontaneousorder.in/just-show-me-one-example-of-a-national-school-voucher-program-that-works-okay-sweden/logic-of-school-choice/)

We know markets lead to innovation, increased quality, and falling costs.  Freedom is the *sin qua non* of innovation in every sector. If someone thinks she can do a better job, she should be free to try.  The market will sort those that really do do better from those that don’t and channel resources to the more successful enterprises.

Some complain that you can’t compare cell phones with schooling. Yes, of course, cell phones and computers are different from education.  Yet there is something essentially the same about them: they are provided by fallible human beings.  Does anyone doubt that there are ways in which education can be improved?  Does anyone doubt that some individuals have more knowledge and better insight into pedagogical methods and managerial practices than others? Competition is not just the pressure to do better than others to keep your customers.  It is also the process of trial and error and selection of variations that offer improvement.  A free market means the freedom to provide alternatives in competition with established  players and the freedom for consumers to choose among available options.  As the Noble Prize winner F. A. Hayek argued, the primary value of competition is the role it plays as a [discovery procedure](https://itunesu.mises.org/journals/qjae/pdf/qjae5_3_3.pdf).

However, despite the clear rationale and ample experience in different sectors, people doubt the power of freedom and competition to deliver the goods. Thankfully, there is a case study that gives powerful evidence that the same logic that leads to improvement and falling costs in every other sector also applies to education. Sweden has employed a universal voucher system since 1992.  Although the state funds every student’s education with tax funds, entrepreneurs are free to compete for those funds and families are free to choose where they send their children to school.

In an interview about Sweden’s experience with universal school choice system ([here](http://www.heritage.org/research/reports/2010/03/school-choice-in-sweden-an-interview-with-thomas-idergard-of-timbro)) Thomas Idergard, Program Director of Welfare and Reform Strategy Studies at Timbro, a free-market think tank based in Stockholm comments:

> “Since the 1970s, the Swedish school system had declined regarding quality and student attainment. One reason for this was the lack of choice. Only the very rich, who could afford private schools with private tuition fees on top of our very high taxes, had a right to choose. For all the rest, the school was one monolithic organization in which all students were considered to have the same needs and to learn the same way. The lack of choice created a lack of innovation regarding pedagogical concept and ways of learning adapted to different students’ needs. Public schools, run by politicians in the local branch of government (cities and municipalities), were all there was for 99 percent of all students.
> 
> “The school voucher program was designed to create a market—with competition, entrepreneurship, and innovation—based on the Swedish and Scandinavian tradition of social justice and equality: All families should be able to choose between public and private schools regardless of their economic status or wealth. This equal opportunity philosophy, taken into its full potential, created an education market!…
> 
> “Through our universal school choice model, we combine the social dimension (taxpayer money should fund education for all) with the principles of the free market: The clients’ choices decide how the funding should be distributed and providers compete for clients’ satisfaction, which is ultimately materialized in concrete educational results, in order to get their revenues.”

Read the whole interview [here](http://www.heritage.org/research/reports/2010/03/school-choice-in-sweden-an-interview-with-thomas-idergard-of-timbro).

* * *

**About Andrew Humphries**

## Government Requires IITs to Place More Weight on Board Exams

Original: https://www.spontaneousorder.in/p/government-requires-iits-to-place-more-weight-on-board-exams

Author: Spontaneous Order

Published: 2012-08-23T16:34:53.000Z

Topics: iit-admissions, board-exams, coaching-centres, education-reform

> (This post is written by Sudershan Singh, Research Associate in CCS’ School Choice Campaign) The HRD ministry has decided to launch a new system of entrance test for admission to government funded technical institutes of India, notably, the IITs, NITs a

**Summary:**

The Indian HRD ministry has imposed a new two-tier entrance system (JEE-Main and JEE-Advanced) for IITs, NITs, and similar institutes starting 2013, with board exam marks weighted at 40%, JEE-Main at 30%, and JEE-Advanced at 30%; applicants must now rank in the top 20% (80th percentile) of their board, up from a prior 60% cutoff. This arbitrary threshold ignores past IIT admissions of lower board scorers and boards' inconsistencies, necessitating score normalization. The government claims it levels the playing field, reduces coaching pressure, bridges board-IIT syllabus gaps, and aids rural and female students disadvantaged by distant coaching hubs. However, from a classical-liberal view, coaching centres flourish due to schools' rote-memorization focus failing to build IIT-required aptitude and understanding; they meet real market demand unmet by government schooling. The new system won't eliminate coaching—instead, centres will adapt to boards and the exam—while disadvantaging high-achievers who benefit from them. Rather than market interventions that hurt merit, the solution is comprehensive school reform to deliver quality education accessible to all.

**Key points:**

- Government's new IIT system mandates 80th percentile board ranking and 40% board weightage, arbitrarily excluding past admits.
- Boards emphasize rote learning unfit for IIT aptitude tests, fueling coaching demand due to school failures.
- Coaching centres respond to market gaps; new rules will prompt adaptation, not elimination.
- Suppressing coaching disadvantages merit-based students; improve schooling system instead.

**By Andrew Humphries**

* * *

(This post is written by Sudershan Singh, Research Associate in CCS’ School Choice Campaign)

[

![](https://spontaneousorder.in/wp-content/uploads/2012/08/adieu-IIT2-300x136.png "adieu-IIT2")



](https://spontaneousorder.in/government-requires-iits-to-place-more-weight-on-board-exams/adieu-iit2/)

The HRD ministry has decided to launch a new system of entrance test for admission to government funded technical institutes of India, notably, the IITs, NITs and NIITs, etc. The tests are in the name and style of ISEET and will be implemented starting in 2013. The government effectively imposed this admission system on all IITs after a long row over the issue. Finally, the IITs capitulated and agreed to a two tier, complicated examination system for getting into IITs.

In the new system, students seeking admission to an IIT must go through JEE-main and JEE-advanced, to be conducted on the same day. The board examination marks will receive 40% weightage and each the JEE examination has 30% weightage.

Earlier, students could apply to IIT Joint Entrance Exam (IIT-JEE) if they scored 60% or higher on the board exams.  Now government has required that students must be in the 80th percentile or higher in their board examination—only the top 20% candidates from each board can choose to apply to IITs. This decision is arbitrary and unreasonable. In the past, students who have not scored as high on the board exams have been accepted to IITs.  This means that the boards may not be the best way to sort for students.  Secondly, the marks graded by different boards are hard to equate.  The new system will have to develop a process of “normalisation” to make the scores comparable.

With this system, government aims to provide a “level ground” for everyone to compete, thereby reducing the pressure on students. The government assumes that this system will eliminate the huge gap between the syllabus for board examinations and the IIT entrance tests, causing students to pay more attention to board examinations and less to commercial coaching centres for cracking the IIT-JEE. Since the facilities for IIT coaching are available only in a few places, students with rural backgrounds and female students are put at a disadvantage because they cannot afford to go to such coaching centres so far away from their residence. The government hopes that their new system will help these groups.  But it is necessary to understand the root cause for the unabated mushrooming of the coaching centres.

The coaching centres have been started and continue to flourish because of a huge gap between school teaching and the expectations from students aspiring to pursue professional courses in elite institutions. The bulk of school teaching and the board examination system encourage students to memorize the syllabus and regurgitate it in examinations even if they do not fully grasp the application of such theory. The IIT entrance examinations, however, demand better content coverage, understanding and aptitude of a student from given course material.

The government assumes that its new system will reduce the demand for coaching centres.  But because schools are not doing a very good job, and since coaching centres are driven by customer demand, coaching centres may design a new product that coaches to Boards as well as the Single Entrance Exam.

The government’s concerns that some people cannot take advantage of coaching centres are valid.  But the solution is not to disadvantage other people by trying to shut them down.  If not everyone is able to consume a product, the government reasons, it should be eliminated from the market. But this does not help the people who could not get the product before; it only hurts the other group.  The solution must be to improve the schooling system overall.

* * *

**About Andrew Humphries**

## Should Governments or Markets Provide Cell Phones?

Original: https://www.spontaneousorder.in/p/should-governments-or-markets-provide-cell-phones

Author: Spontaneous Order

Published: 2012-08-08T16:44:31.000Z

Topics: free-markets, government-intervention, telecommunications, welfare-policy

> Recently I have been using the example of cheap and available cell phones in India to explain the power of markets and competition versus government to increase availability and decrease prices of goods. Should we give government power to distribute ce...

**Summary:**

Andrew Humphries uses India's cell phone market as a prime example of how markets and competition outperform government intervention in making goods widely available and affordable. He notes that about 70% of India's population now has cell phones, with availability and price reductions advancing rapidly, proving that empowering markets works far better than government distribution, which he deems ridiculous. Despite this success, the UPA government is promising to provide cell phones to all Below Poverty Line (BPL) households, a move Humphries finds deeply depressing and indicative of India heading in the wrong direction. From a classical-liberal perspective, this handout undermines market dynamics that have driven telecom success and signals resistance to broader economic liberalization. Instead, Humphries urges making more of India's economy resemble the competitive cell phone sector to accelerate prosperity and access for the remaining population without state paternalism.

**Key points:**

- Markets and competition have delivered cell phones to 70% of India's population at rapidly falling prices.
- Government distribution of cell phones to BPL households would be counterproductive and ridiculous.
- The UPA government's promise of free cell phones is a depressing setback for India's market-oriented progress.
- India should expand market-like competition across more economic sectors to boost availability and affordability.

**By Andrew Humphries**

* * *

Recently I have been using the example of cheap and available cell phones in India to explain the power of markets and competition versus government to increase availability and decrease prices of goods.  Should we give government power to distribute cellphones?  No. That would be ridiculous.  Okay, not everyone has one yet, but about 70% of India’s population has them and the availability and price reductions keep advancing at a very rapid rate. Therefore, we should be trying to make more of the economy like the cell phone market.

Well, guess what: the UPA government is [promising](http://www.indianexpress.com/news/upas-poll-signal-on-iday-cellphones-for-all-bpl-families/985182/) to give everyone BPL household a cell phone.  No joke.

I must say this news is quite depressing and not a good sign for India’s prospects of moving in the right direction.

* * *

**About Andrew Humphries**

## How to Think About Sweat Shops

Original: https://www.spontaneousorder.in/p/how-to-think-about-sweat-shops

Author: Spontaneous Order

Published: 2012-07-23T12:30:17.000Z

Topics: sweatshops, labor-freedom, free-markets, cronyism

> After my post about my reservations about outlawing child labor, several comments I received made me realize that most people don’t understand the simple concept that outlawing a situation because it’s bad doesn’t mean that you’re helping someone.

**Summary:**

Andrew Humphries argues from a classical-liberal perspective that prohibiting sweatshops, like outlawing child labor, fails to help workers because it removes their best available option without improving alternatives. Drawing from comments on his prior post critiquing child labor bans, he emphasizes that individuals should remain free to choose sweatshop employment, as restricting such choices irrefutably harms those with few prospects. He recommends two videos that illustrate why sweatshop work is preferable to worse local options and why laws and boycotts against them are misguided interventions. Beyond defending freedom to select among existing opportunities, Humphries advocates combating barriers to progress: pushing for more open markets, rule of law, investment, and an end to cronyism, which stifle economic options for the poor. This approach prioritizes voluntary choice and market liberalization over coercive prohibitions, aligning with the view that true advancement comes from expanding opportunities rather than paternalistic restrictions.

**Key points:**

- Outlawing sweatshops removes workers' best available employment option without providing better alternatives.
- Individuals should be free to choose sweatshop jobs over inferior local prospects.
- Laws and boycotts targeting sweatshops are misguided and harmful.
- Advocate for open markets, rule of law, investment, and ending cronyism to expand economic options.

**By Andrew Humphries**

* * *

After my [post](https://spontaneousorder.in/prohibition-of-child-labour-out-of-the-frying-pan-into-the-fire/) about my reservations about outlawing child labor, several comments I received made me realize that most people don’t understand the simple concept that outlawing a situation because it’s bad doesn’t mean that you’re helping someone. That people should always be free to accept their best option seems irrefutable to me.  Here are two videos on sweat shops that explain the logic of why people should be free to choose sweatshop employment and why laws and boycotts against sweatshops are misguided.

Of course, in addition to advocating for people to be free to choose among existing options, we should be fighting for more open markets, rule of law, and investment and a general end to cronyism that retards the progress of these people and impedes their options.

* * *

**About Andrew Humphries**

## CCS in Forbes India

Original: https://www.spontaneousorder.in/p/ccs-in-forbes-india

Author: Spontaneous Order

Published: 2012-07-18T15:43:27.000Z

Topics: poverty-alleviation, free-markets, government-failure, economic-freedom

> An article in Forbes India by Vipin P. Veetil and Bill Glod cite information gathered at CCS among other sources. Echoing arguments I made in an earlier post, they argue against Abhijit Banerjee and Esther Duflo of Poor Economics, who “argue that govern

**Summary:**

Andrew Humphries highlights a Forbes India article by Vipin P. Veetil and Bill Glod, drawing on CCS data, that counters Abhijit Banerjee and Esther Duflo's claims in Poor Economics. Banerjee and Duflo argue government interventions limiting choices benefit the poor and dismiss small businesses as a path to mass poverty exit. The authors rebut that cognitive limitations do not cause market failure but enable markets to function by reducing self-reliance needs, allowing specialization that spares individuals from exhaustive decision-making and fosters expertise. They liken claiming markets fail due to cognition to saying aircraft crash because of gravity. Empirical evidence from Economic Freedom of the World data shows Western Europe's and North America's prosperity stems from institutions facilitating markets in production and exchange, while others lag due to obstructive institutions. Using Delhi's water supply as an example, the piece demonstrates government failure, not market failure, impedes poor people's progress. From a classical-liberal viewpoint, markets, not interventions, enable mass exit from poverty by harnessing human limitations through voluntary exchange and specialization.

**Key points:**

- Cognitive limitations enable markets by allowing specialization and reducing decision burdens, rather than causing failure.
- Institutions that obstruct markets, not markets themselves, perpetuate poverty, as shown by prosperity in economically free nations.
- Government failure in Delhi's water supply exemplifies how interventions hinder poor people's progress over market solutions.
- Small businesses and free exchange pave the way for mass poverty exit, contra Banerjee and Duflo.

**By Andrew Humphries**

* * *

An [article](http://forbesindia.com/article/special/mass-exit-from-poverty/33350/1) in Forbes India by Vipin P. Veetil and Bill Glod cite information gathered at CCS among other sources.

Echoing arguments I made in an [earlier post](https://spontaneousorder.in/is-freedom-just-another-word/), they argue against Abhijit Banerjee and Esther Duflo of Poor Economics, who “argue that government intervention circumscribing choices can be beneficial and that ‘we are kidding ourselves if we think that these \[small\] businesses can pave the way for a mass exit from poverty.’ ”

On the contrary, “cognitive limitation is not a cause of market failure. It is the very condition by which markets work….\[M\]arkets reduce the need for complete self-reliance in light of our limitations” and “allow specialisation that relieves a given actor of the need to make a plethora of decisions taxing her willpower and develop expertise in a particular area of decision making.” “Saying markets fail because of human cognitive limitations is akin to saying aircraft crash because of gravity.”

Somehow people in Western Europe and North America became prosperous while other countries lagged behind.  [Overall experience](http://www.freetheworld.com/) confirms economic theory in showing that it is not markets that make people poor, but institutions that get in the way of or fail to facilitate markets in production and exchange.   Taking the example of water, the authors show that government failure, not market failure, is retarding the progress of poor people in Delhi.

Read the whole of their article [here](http://forbesindia.com/article/special/mass-exit-from-poverty/33350/1).

* * *

**About Andrew Humphries**

## Should Minority Schools be Exempted from the Right to Education (RTE) Act Norms?

Original: https://www.spontaneousorder.in/p/should-minority-schools-be-exempted-from-the-right-to-education-rte-act-norms

Author: Spontaneous Order

Published: 2012-07-06T14:38:39.000Z

Topics: rte-act, minority-rights, education-policy, constitutional-law

> The Supreme Court has, in a recent verdict, by a majority of 2:1, upheld the validity of the Right to Education (RTE) Act, most significantly the clause mandating 25% reservation for economically weaker children, but exempted unaided minority institutio..

**Summary:**

The author critiques the Supreme Court's 2:1 verdict upholding the Right to Education (RTE) Act's 25% reservation for economically weaker children (EWS) while exempting unaided minority institutions—linguistic or religious, at the state level—under Article 30. He argues this exemption lacks justification, as Article 30(1), paired with Article 29(1) for cultural preservation, does not conflict with the quota: minority schools can still teach their language/religion, maintain community quotas, and add the 25% EWS seats, akin to St. Stephen’s College's quotas. Non-minority schools' Article 19(1)(g) rights are validly restricted for Article 21A's education guarantee, so exempting minorities discriminates in their favor. The ruling invites a floodgate of minority status claims, serves political appeasement, and undermines RTE—the world's largest initiative extending private school quality to the poor via government reimbursement. From a classical-liberal view favoring merit over caste/income quotas at college level (but allowing minority quotas tied to cultural education), the judgment is a miscarriage of justice, prioritizing minority privileges over national equity.

**Key points:**

- Supreme Court's exemption of unaided minority schools from RTE's 25% EWS quota unjustly privileges them over non-minorities whose Article 19(1)(g) rights are restricted.
- Article 30 does not bar the quota, as minorities can preserve culture via teaching language/religion alongside community quotas and EWS seats.
- RTE enables transformative access to quality private education for the poor with government funding, and renowned minority schools should participate.
- The verdict risks a floodgate of minority status claims and prioritizes political appeasement over constitutional equity.

**By karmanye**

* * *

The Supreme Court has, in a recent verdict, by a majority of 2:1, upheld the validity of the Right to Education (RTE) Act, most significantly the clause mandating 25% reservation for economically weaker children, but exempted unaided minority institutions (the term ‘minority’ has been used in both the linguistic and religious contexts and it applies in the context of respective states) from the same. The judgment has been widely criticized on this account by several scholars of the law such as Prof. Krishnaswamy and this is indeed an interesting issue of constitutional law wherein three categories of fundamental rights (not other constitutional rights) are juxtaposed with each other.

In this blog, I argue that the critique of the judgment is well founded and there is no convincing justification to exempt minority schools from the 25% reservation regulation.

The exemption granted to minority institutions is on the basis of Article 30 of the Indian constitution, which is stated hereunder –

“Right of minorities to establish and administer educational institutions.—(1) All minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice.

(1A) In making any law providing for the compulsory acquisition of any property of an educational institution established and administered by a minority, referred to in clause (1), the State shall ensure that the amount fixed by or determined under such law for the acquisition of such property is such as would not restrict or abrogate the right guaranteed under that clause.

(2) The State shall not, in granting aid to educational institutions, discriminate against any educational institution on the ground that it is under the management of a minority, whether based on religion or language.”

Now, none of the clauses have anything to do with the matter at hand i.e. exemption from RTE, except that as regards clause 2, it may be argued that not only does the exemption not discriminate against minority schools, but on the other hand, it discriminates in their favour. This is so, because the right of non-minority private entities “to practise any profession, or to carry on any occupation, trade or business” under Article 19(1)(g) of the constitution has been held in this very judgment to be reasonably restricted in the light of Article 21A of the constitution inserted by way of the 86th Amendment, upholding the right to education for all in the age group of six to fourteen years. Then why should minorities get the privilege? Their right to “establish and administer educational institutions” under Article 30(1), one may argue, is basically no different from that of other private individuals who wish to take up establishing and administering educational institutions as the occupation of their choice under Article 19(1)(g); so, where is the difference? To my mind, the difference can arise only if Article 30(1) is read with Article 29(1) (both Articles 29 and 30 of the constitution fall under the head of Cultural and Educational Rights), which states –

“Any section of the citizens residing in the territory of India or any part thereof having a distinct language, script or culture of its own shall have the right to conserve the same.”

The title of Article 29 is ‘Protection of interests of minorities’ and so, the right of minority communities, linguistic or religious, to establish and administer educational institutions under Article 30(1) is in the light of allowing them to take steps to help them preserve their language and/or culture. But, does the imposition of the 25% quota take away their right to do so (considering the assumption, right or wrong, that the RTE Act is not to be treated as violative of other non-minority school managements’ right to run their institutions)? Not in any way I can think of, for they are still free to teach their language and/or religion. If minority colleges like St. Stephen’s College can have a Christian quota as also quotas for SCs, STs and OBCs (though I am dead against caste-based reservations or even income-based reservations at the college level, since I believe that compromising on merit isn’t a good idea, though I am fine with minority colleges granting a quota to students of their community so long as the students availing of their quota are mandatorily taught their language and/or religion in that college once they join), then minority schools (P12 institutions) can also have a fixed quota for students of their particular community and a separate 25% quota for the poor.

The obvious implication of this judgment was bound to be the opening of a floodgate for claims to minority status, which is indeed happening.

In my opinion, the judgment amounts to a miscarriage of justice and has dangerous implications with respect to interpreting constitutional law in the future. It may be in conformity with the vested interests of certain political parties to appease religious minorities (or even the majority Hindu community in other contexts), but our judiciary should be above this and should not read too much into constitutional safeguards for the minorities so as to divest them from statutory responsibilities for the larger national cause, in which the economically deprived of their communities have as much to gain. 25% reservation for economically weaker children practically makes for the largest venture in the world wherein quality education of private schools can be extended to the poor as well, with the Government bearing the financial burden, and as I see it, there’s no reason why unaided minority schools, such as unaided convent schools, many of which are highly renowned, should not be a part of this huge social phenomenon that can help transform the face of this country.

* * *

**About karmanye**

## Achieving Education for All in a ‘Hot, Flat and Crowded’ India

Original: https://www.spontaneousorder.in/p/achieving-education-all-hot-flat-crowded-india

Author: Spontaneous Order

Published: 2012-06-29T11:58:06.000Z

Topics: education, energy-poverty, climate-adaptation, rural-development

> Recent reading of two seemingly disparate issues made me question if they might be connected after all? The first was in Thomas L. Friedman’s 2008 book – Hot, Flat and Crowded: Why the World Needs a Green Revolution and How We Can Renew Our Global Fut

**Summary:**

In a 'hot, flat, and crowded' India facing global warming, globalization, and population explosion, achieving universal education requires addressing energy poverty alongside it, as argued by Uttara Balakrishnan. Health impacts from biomass cooking—causing 500,000 deaths annually per WHO, mostly women and children—and lack of clean water deter school attendance, especially for girls. The RTE Act secures primary education but neglects post-grade 8 access, exacerbating demand-supply gaps in higher education amid competitive globalization. Cities are overburdened, so investing in rural infrastructure with clean, sustainable energy would spur private school proliferation where demand exists, empowering the poor with real choices. Climate extremes like droughts disproportionately hit the poor, causing dropouts and poor learning outcomes; IPCC projections warn of 9% GDP decline. Classical-liberal solutions emphasize simultaneous green energy innovations, clean water/sanitation in schools, affordable secondary/higher education for the poor, IT connectivity via green power, and rural development to unlock potential without waiting for uncertain climate outcomes.

**Key points:**

- Ensure clean alternatives to biomass cooking, school sanitation, and sustainable energy to make education accessible amid health and energy stresses.
- Develop novel, affordable secondary and higher education options for the poor, paired with green-powered IT connectivity, to boost skills in a globalized world.
- Invest in rural infrastructure and clean energy to enable private school growth, meeting existing demand and providing choice to the economically disadvantaged.
- Address climate vulnerabilities affecting the poor to reduce dropouts and improve learning outcomes, preparing for potential 9% GDP loss from warming.

**By Uttara Balakrishnan**

* * *

Recent reading of two seemingly disparate issues made me question if they might be connected after all?  The first was in Thomas L. Friedman’s 2008 book – *Hot, Flat and Crowded: Why the World Needs a Green Revolution and How We Can Renew Our Global Future.* In his book, Friedman says that the earth is heading towards a new era. We’re no longer in a ‘post’ world – post-colonial, post war, post-Cold War. We’re at a turning point – where the problems of energy demand and supply, climate change, biodiversity loss and energy poverty are no longer those we can return to – at a later date in time. We have to address these *now*, for there to be a *later.* The second reading was a news piece which uncovered that in Sasaram in Bihar, children study under the dim lights of the railway station at night. Power in this district of Bihar is erratic and unreliable. A majority of the homes here do not have power for more than ten hours a day and the evenings are the worst.

When I look at these two observations *together*, it becomes more and more obvious to me that while achieving universal education *is* India’s goal; what *should* be our priority is achieving this in an India where the pressures of **global warming, globalization and population explosion** – are upon us. As I see it there are four important issues that need to be considered.

One, the health impacts that increasing energy stress are causing are reducing the *ability* of many people to access education. There are two aspects to this. First, indoor air pollution is one of the biggest health hazards in rural India. Biomass cooking, according to the World Health Organization causes around 5 lakh deaths in India, mostly women and children. Second, without access to clean water, parents are increasingly reluctant to send their children to school. This affects young girls disproportionately *more.* This means that for education to be a *choice* in the first place, we need to *simultaneously* (a) ensure clean and safe alternatives to biomass cooking (b) guarantee availability of clean water and sanitary conditions in schools across the country and, (c) provide sustainable, long term alternatives of energy consumption.

Two, in a world that is more globalized and competitive than ever before, being highly skilled is more of a necessity than an option. The RTE Act leaves the education of children post-grade 8 a question mark. [This](http://www.hindustantimes.com/Punjab/Bathinda/Poverty-interupts-education-of-15-bright-girls/SP-Article1-879436.aspx) Hindustan Times article makes the point starkly.  For many Indians, education after Class 12 is still inaccessible and unaffordable. There is a massive demand-supply gap in higher education. This makes their ability to contribute and collaborate limited. In such a scenario innovations don’t happen and productivity doesn’t accelerate. Focusing on (a) novel and affordable solutions in secondary and higher education *for the poor* and, (b) *enabling* them to access information technology and better wireless connectivity (by providing green sources of electricity) to make the most of these opportunities, must be of our main concern.

Three, to achieve inclusive education and ensure that the *real* beneficiaries of any policy actually benefit from it means that we need to invest in and develop our villages. Our cities are stretched beyond capacity. Population pressures are leading to crumbling infrastructure and decreasing quality of life. Developing villages by investing in infrastructure and assuring provision of clean, sustainable and long term energy sources will, by creating the necessary supply conditions, encourage the increased proliferation of private schools in these areas. Demand for such schools already exists. This means that everyone, including the economically disadvantaged, will have the *ability* as well as the *choice* to empower themselves.

Lastly, the poor – the ones who have contributed the least towards the present unstable climate, are the *worst* prepared for and *most* affected by extreme events such as droughts, famines and floods. This constant struggle to battle climactic forces reduces their ability to participate in education. For those who do attend schools, drop outs are common and this is one of the many reasons for poor learning outcomes for India’s school going children. Research has indicated that if the predictions of the IPCC’s (Intergovernmental Panel on Climate Change) predictions on global warming were to come true, India’s GDP could decline by as much as 9%. The effects of this on the education sector would be catastrophic.

Thus, while achieving education for all needs to be one of the most important policy focuses, we need to be cognizant of the inter-dependence between energy and education. We are unlikely to truly achieve equitable quality education at all levels without also focusing our attention on green solutions to the energy problems facing us. The question is not whether global warming projections will come true or not. The point is, if they do, we will have the capacity to meet them and if they don’t we will have moved on to a more efficient and sustainable way of living. ‘Energy poverty’ as Friedman terms it, is going to make it much harder for those at the bottom of the pyramid to access educational opportunity and unlock their potential. While we cannot undo the damage that has been done, what we can do – by acknowledging the existence of and acting on this multi-faceted challenge – is ensure a brighter, more certain and more able future for those who need it the most, while innovating along the way. After all, isn’t that what great revolutions are made of?

* * *

**About Uttara Balakrishnan**

## The Economic History of the Last 2,000 Years in Graphs

Original: https://www.spontaneousorder.in/p/the-economic-history-last-2000-years-graphs

Author: Spontaneous Order

Published: 2012-06-26T10:39:40.000Z

Topics: economic-history, gdp-growth

> The Atlantic has published some really cool graphs illustrating 2000 years of the economic history of different nations. The charts are very informative, illuminating, and fun to look at. (HT: Daphne Vallado) The Economic History of the Last 2,000 Year...

**Summary:**

This short post shares links to The Atlantic articles featuring graphs on 2000 years of economic history across nations, describing them as 'really cool,' 'informative,' 'illuminating,' and 'fun.' It embeds an image of a graph titled '2000 years of per cent GDP' and directs readers to Parts I, II, and III (no original analysis or classical-liberal framing provided).

**Key points:**

- Post links to The Atlantic's graphs visualizing 2000 years of economic history in nations.

**By Andrew Humphries**

* * *

*The* *Atlantic* has published some really cool graphs illustrating 2000 years of the economic history of different nations.  The charts are very informative, illuminating, and fun to look at. (HT: Daphne Vallado)

-   [The Economic History of the Last 2,000 Years in 1 Little Graph](http://www.theatlantic.com/business/archive/2012/06/the-economic-history-of-the-last-2-000-years-in-1-little-graph/258676/)
    

Be sure to check out [Parts II](http://www.theatlantic.com/business/archive/2012/06/the-economic-history-of-the-world-after-jesus-in-4-slides/258762/) and [III](http://www.theatlantic.com/business/archive/2012/06/the-economic-history-of-the-last-2000-years-part-iii/258877/) as well.

[

![](https://substackcdn.com/image/fetch/$s_!Kfod!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F424a6679-7e53-410a-a2fd-8139c265d56f_615x284.png "2000 years of per cent GDP")



](https://spontaneousorder.in/the-economic-history-last-2000-years-graphs/2000-years-of-per-cent-gdp/)

* * *

**About Andrew Humphries**

## Anna Schwartz, the Mother of Monetarism, Dies at 96

Original: https://www.spontaneousorder.in/p/anna-schwartz-mother-monetarism-dies-96

Author: Spontaneous Order

Published: 2012-06-25T18:26:53.000Z

Topics: monetarism, great-depression, federal-reserve, milton-friedman

> (This post was written by Deeksha Supyaal Bisht, volunteer at CCS.) Anna Schwartz, a well-known American monetary economist, known as “high priestess of Monetarism,” died at the age of 96, this Thursday. Schwartz, along with Milton Friedman, was seen

**Summary:**

Anna Schwartz, dubbed the 'high priestess of Monetarism' and co-author with Milton Friedman of the seminal *A Monetary History of the United States, 1867-1960*, died at 96. Their book argued that the Federal Reserve's contraction of the money supply and allowance of bank failures transformed a normal recession into the Great Depression, challenging prior views attributing it solely to the 1929 Wall Street Crash. Ben Bernanke praised it as the 'leading and most persuasive explanation' of America's worst economic disaster. Schwartz criticized Bernanke for misapplying monetarist ideas through zero interest rates and expanding Fed assets to $2 trillion by July 2009—more than double early 2008 levels—arguing it was an overdose of liquidity that wouldn't help, and opposed his reappointment in a New York Times op-ed. Born November 11, 1915, in New York City, she graduated Barnard College at 18, earned a master's from Columbia at 19, joined the National Bureau of Economic Research in 1941, and received her PhD at 48. Her work spanned business cycles, international inflation transmission, interest rates, deflation, monetary standards, and bank output measurement. Friedman credited her: 'Anna did all of the work, and I got most of the recognition.' She lamented Friedman not witnessing the current U.S. economy.

**Key points:**

- Schwartz and Friedman's *Monetary History* blamed the Federal Reserve's money supply tightening for causing the Great Depression.
- Schwartz opposed Ben Bernanke's zero interest rates and $2 trillion Fed asset expansion as a misinterpretation of monetarism.
- She graduated Barnard at 18, master's from Columbia at 19, and PhD at 48, joining NBER in 1941 for business cycle research.

**By Andrew Humphries**

* * *

(This post was written by Deeksha Supyaal Bisht, volunteer at CCS.)

Anna Schwartz, a well-known American monetary economist, known as “high priestess of Monetarism,” died at the age of 96, this Thursday.

[

![](https://spontaneousorder.in/wp-content/uploads/2012/06/Anna-Schwartz’s-obituary1.jpg "Anna Schwartz’s obituary")



](https://spontaneousorder.in/anna-schwartz-mother-monetarism-dies-96/anna-schwartzs-obituary-2/)

Schwartz, along with Milton Friedman, was seen as one of the leading lights of Monetarism, a school of thought that believes that the money supply has a crucial influence on economic activity and inflation. She is best known for the book she wrote in collaboration with Milton Friedman, *The Monetary History of United States 1867-1960*, which became a classic of economic literature.  The [thesis](mailto:http://en.wikipedia.org/wiki/A_Monetary_History_of_the_United_States) of the book was that the Federal Reserve, by tightening the money supply and allowing commercial banks to fail, caused an otherwise normal recession to turn into the Great Depression. Earlier, economists believed that the Great Depression was a result of the loss of investor and consumer confidence following the Wall Street Crash of 1929.

According to Ben Bernanke, the current chairman of the Federal Reserve, her book gave “the leading and most persuasive explanation of the worst economic disaster in American history”.

Anna, however, criticized her diehard follower for mis-interpreting the idea of monetarism and her analysis of money and banking. “Mr. Bernanke seems to know only two amounts: zero and trillions,” [she said](mailto:http://www.sfgate.com/business/bloomberg/article/Anna-Schwartz-Economist-Milton-Friedman-s-3652991.php%23page-2), alluding to  his zero  interest rate policy  and plan of expanding Fed’s assets to $2 trillion in July 2009, more than double the level of early 2008.  [In her view](mailto:http://www.nytimes.com/2012/06/22/business/anna-schwartz-economist-who-worked-with-friedman-dies-at-96.html?pagewanted=1&src=recg), Bernanke had given the economy an overdose of liquidity which she believed was unable to make a difference. She strongly opposed his re-appointment as the Fed’s Chairman in her Op-Ed article in The New York Times.

She regretted that Milton Friedman was not able to witness the present state of the American Economy.

Schwartz was born on 11th November 1915 in New York City , graduated at the age of 18 from Barnard College, New York and did her masters in Economics from Columbia University aged 19. In 1941, she joined the National Bureau of Economic Research, where she engaged in the study of business cycles. She earned a PhD from Columbia University at the age of 48.

Schwartz also worked in the area of international transmission of inflation and business cycles, the behaviour of interest rates and their effect on deflation, on monetary standards and measuring the output of banks.

She was known as the standard bearer of Milton Friedman after he died.  Friedman once said, “Anna did all of the work, and I got most of the recognition.”

* * *

**About Andrew Humphries**

## Good government data: Is it a myth or does it really exist?

Original: https://www.spontaneousorder.in/p/good-government-data-is-myth-really-exist

Author: Spontaneous Order

Published: 2012-06-22T18:32:21.000Z

Topics: public-finance-data, government-transparency, education-spending

> Validity, Clarity and Reliability[1]– These were the three ‘ity’s’ of good quality data that Akanksha’s (our research coordinator) presentation to the 2012 batch of CCS’ summer interns focused on. This got me thinking about the public finance

**Summary:**

Sana Kazi, working on a project to calculate government spending on education via Detailed Demands for Grants, highlights severe shortcomings in India's public finance data that undermine its validity, clarity, and reliability. Education, a concurrent subject, receives funding not just from the Ministry of HRD but from 14-30 other ministries and departments at central and state levels, including Social Welfare, Tribal Welfare, Rural Development, and others, requiring aggregation across numerous documents. Accessing these is arduous: most are unavailable online, links are broken, historical data absent, forcing manual library searches at NIPFP. Even obtained documents suffer a minimum 2-year time lag, with the latest expenditures from 2009-10. Accounting lacks uniformity—states use pre-1987 codes, reporting units vary (thousands, lakhs, crores), and classifications mix functional (e.g., major heads for government functions) with geographical ones like Major Head 2552 for North Eastern Areas. Reliability is questioned by CAG's mix-up of crores and lakhs, and manual calculations in MS Word until recently. From a classical-liberal viewpoint valuing transparent data for accountability, tools like RTI improve access but fall short; a new accounting structure offers hope for better quality data, one 'ity' at a time.

**Key points:**

- Education spending spans 14-30 ministries beyond MHRD at center and state levels, complicating comprehensive tracking.
- Detailed Demands for Grants face 2-year publication lags, broken online links, and scarcity of historical data.
- Inconsistent accounting codes, varying units (thousands/lakhs/crores), and mixed classifications reduce data clarity and validity.
- Manual calculations in Word until recently and CAG errors highlight poor reliability of public finance numbers.

**By Sana Kazi**

* * *

*Validity, Clarity and Reliability[\[1\]](#_ftn1)*– These were the three ‘*ity’s*’ of good quality data that Akanksha’s (our research coordinator) presentation to the 2012 batch of CCS’ [summer interns](http://ccsindia.org/researching_internship_program.asp) focused on. This got me thinking about the public finance data I work with everyday. To give you a little background, I’ve spent the last 10 months working on a project that requires me to explore, understand and analyze the Detailed Demand for Grants -a document that compiles all requests for funding by a government department in a given fiscal year; to specifically calculate how much the government spends on education. Sounds like a simple enough task right?

However, my problems started early on.  Since education is a concurrent subject- not only does the MHRD sponsor some central schemes, but each state government also sponsors their own set of local schemes. Moreover, the Department of Education is not the only department that funds education. As it turns out between 14 to 30 other Ministries and Departments (depending on the state) sponsor various Educational Schemes both nationally and at the state-level.  Some of the larger spenders include the department of Social Welfare and Justice, the Department of Planning and Public Works, the Department of Tribal Welfare, the Ministry of social justice and empowerment, the Ministry of labour and employment, the Ministry of Rural Development, and the Ministry of Youth Affairs and Sports.   Thus, to get a complete picture of the expenditure on education, one needs to collect the Detailed Demand for Grants for all these 30 Ministries at both the Centre and State level.

My first challenge was finding these documents –most of these documents weren’t available online. If they were, more often than not the links were broken. If I got lucky and did find them online *and* the links worked, it would only be the most recent document that was available and not the past years’ Demands.  My next stop was the NIPFP library where I spent several afternoons manually going through volumes of budgets to find what I was looking for.

The next step was analyzing these demands and actually understanding the government’s accounting system. This brought with it a new set of challenges:

I assumed that since I had managed to get my hands on the most recent Demands for Grants publically available I would have the *latest* data on government spending. Turns out that there is a minimum of a 2 year *time lag* between when these amounts are spent and when these documents are published. Thus, the most recent actual expenditures I had were for the fiscal year 2009-10.

My next challenge was the lack of uniformity in the accounting systems between the Centre and states. The Detailed Demand for Grants uses the standard coding structure as prescribed by the Comptroller and Auditor General (CAG) of India.  However, there is little or *no uniformity* beyond minor head level of classification as some States continue to follow the old series of coding structure (as was in use prior to 1st April, 1987). This leaves a lot open to the interpretation of the user and reduces the overall clarity of the document. Additionally, even the *unit of reporting* i.e rupees thousands, rupees lakhs and rupees crores differs across states which makes standardizing and comparing this data twice as hard.

The Detailed Demand for Grants is a head-wise classification of public expenditure- the Major heads are intended to represent the major functions of the government, the sub-major heads are intended to represent the sub-functions of the government and so on. However, it also includes Major Head 2552: Lump sum provision for North Eastern Areas and Sikkim which in my mind is a geographical classification as opposed to being a functional classification. So how well does the Demand for Grants really measure what it was really intended to measure i.e what is the validity of the data?

Despite all these set-backs, I was excited about finally getting to the bottom of these documents when [this](http://www.indianexpress.com/news/eavesdropper/943674/) made news- the CAG got its crores and lakhs mixed up ! Agreed, the mix up was not in the Demand for Grants. But, this forced me to think- what was the reliability of the numbers in the Demand for Grants? Moreover on a recent visit to the MHRD, I was informed that these Demands used to be typed on MS Word until about 2 years back (which was when they moved to MS Excel) and all calculations were done manually on a calculator and then entered into the Word document! – Which greatly increases the scope for human error.

While tools like the RTI have helped make public finance data more accessible, the concern that it meets Akanksha’s three ‘ity’s’ of good data remains.  Hopefully the new account structure that the Government intends to implement over the next couple of years will be a step in the right direction to good quality data….one *ity* at a time.

* * *

[\[1\]](#_ftnref) **Validity**: The degree to which a measure reflects the concept it is intended to measure

  **Clarity**: Is the data sufficiently well defined that all users will interpret it similarly

  **Reliability** : The degree to which measurement method would collect the same data each time in repeated observations

* * *

**About Sana Kazi**

## How Can We Best Help the Poor?…By Selling Them Stuff!

Original: https://www.spontaneousorder.in/p/should-we-encourage-people-get-rich-selling-poor-absolutely

Author: Spontaneous Order

Published: 2012-06-20T18:21:53.000Z

Topics: patient-capital, social-enterprise, philanthropy-reform, poverty-alleviation

> (This blog was co-written by Andrew Humphries, Associate, Programs, and Rishav Kumar Thakur, Researching Reality Intern at CCS) Ankur Shah delivered a compelling presentation to the CCS Interns yesterday about “patient capital” (philanthropic investme

**Summary:**

Ankur Shah presented on Acumen Fund's 'patient capital' model, which invests philanthropic grants in scalable businesses serving the poor, aiming to break even rather than generate net monetary returns—using profits from successful ventures to offset losses elsewhere. This hybrid approach treats beneficiaries as customers, not recipients, fostering accountability: businesses must meet real needs or lose sales. It incentivizes efficient resource use to cut costs and prices over time, while customer revenues enable scaling to reach more people and create value-adding jobs, maximizing long-term social returns. From a classical-liberal viewpoint, this market-mimicking philanthropy outperforms traditional aid by aligning incentives with consumer demand. However, the authors question the model's sustainability, as breaking even nominally implies negative real returns and ongoing donor dependence, echoing critiques of conventional philanthropy. They cite Paul Polak's case for profit-seeking enterprises serving the poor and probe the social impact vs. profit trade-off: how to measure incommensurable benefits against forgone opportunities, especially when zero returns are hard to achieve.

**Key points:**

- Acumen Fund's patient capital invests in businesses for the poor to break even, prioritizing social returns through customer accountability, efficiency, and scalability.
- Treating beneficiaries as customers ensures providers meet real needs, unlike traditional aid recipients.
- Businesses reinvest revenues to expand reach and create jobs, outperforming short-term philanthropic inputs.
- The model remains donor-dependent due to negative real returns; authors advocate considering profit-oriented approaches like Paul Polak's.
- Measuring social impact against financial losses poses challenges, questioning the trade-off's justification.

**By Andrew Humphries**

* * *

(This blog was co-written by Andrew Humphries, Associate, Programs, and Rishav Kumar Thakur, Researching Reality Intern at CCS)

Ankur Shah delivered a compelling presentation to the CCS [Interns](http://ccsinternship.wordpress.com/2012-2/interns-2012/) yesterday about “patient capital” (philanthropic investments) conducted by [Acumen Fund](http://www.acumenfund.org/ten/).

He argued that Acumen is engaged in something “between” pure for-profit and pure not-for-profit enterprise. Unlike a for-profit venture, the fund’s aim is not to make a net monetary return, but to break even.  The fund acquires grants from donors who receive no return; Acumen invests in such a way that the positive returns from some of its ventures compensates for losses in other parts of portfolio. Unlike a normal not-for-profit venture, on the other hand, donors don’t give their money away for projects that purchase inputs that may be rapidly consumed, delivering minimal or only short-term impact to beneficiaries. Rather, Acumen attempts to *invest* in sustainable, scale-able *businesses* that it thinks can increase the welfare of poor and ill-served through the goods and services they provide.  The overall goal is to maximize the long-term “social return” on the funds donated.

Firstly, Mr. Shah argued, businesses seeking a return on their resources must conform more closely to the needs of the intended beneficiaries.  The ultimate beneficiaries are seen as customers—not patients or recipients.  Mr. Shah argued that this tends to increase accountability among the service providers to the intended beneficiaries.  If they don’t like the product, they don’t have to pay for it.

Secondly, businesses have the incentive to use the resources efficiently, to reduce costs and decrease prices paid by the consumers over time.

Finally, revenues collected from customers can be used to scale-up the business, thereby, reaching more customers and employing more people in value-creating jobs.

After the presentation, we were left with some unanswered questions:

***1) How sustainable or scale-able is the Acumen model itself?***

By focusing on breaking even on a nominal basis (leading to a negative real return over time) the fund must continue to rely on donations.  While the fund seems to be a smarter way of engaging in philanthropy, it still has some of the “problems” of other philanthropic giving.  Why not try to have the portfolio generate a net positive return? Paul Polak, Founder, [iDE](http://fightpoverty.visibli.com/a87fba24826ec081/?web=0d054d&dst=http%3A//www.ideorg.org/), and Author, [Out of Poverty](http://fightpoverty.visibli.com/a87fba24826ec081/?web=0d054d&dst=http%3A//blog.paulpolak.com/) makes a compelling  [case](http://www.businessfightspoverty.org/profiles/blogs/is-it-immoral-to-earn-attractive-profits-from-poor-customers) for this.

In answer, Mr. Shah argued that there is usually a trade-off between “social impact” and monetary return, which raises a second question.

***2) How does one measure social impact and weigh it against monetary profits?***

Mr. Shah argued that because of the nature of the ventures they support, it is often difficult enough to get a zero return let alone aspire for a positive return.  But given the reasons he offered above about accountability and efficient use of funds, why aim at investing in a portfolio of businesses that may not have a positive return? Does Acumen hope that social benefits generated by the successful businesses will outweigh the opportunities forgone because of financial losses? If yes, then how do they measure or estimate these seemingly in-commensurable costs and benefits?

* * *

**About Andrew Humphries**

## Subsidized Higher Education Comes at a High Cost

Original: https://www.spontaneousorder.in/p/subsidized-higher-education-comes-at-a-high-cost

Author: Spontaneous Order

Published: 2012-06-19T09:46:06.000Z

Topics: higher-education-subsidies, brain-drain, middle-class-welfare

> (This post was written by Namrata Narayan, Associate, Communications at CCS) We the People had an interesting conversation regarding government funded colleges that heavily subsidise student fees, even for the families that can afford to pay full fees. ..

**Summary:**

The post critiques heavily subsidized government-funded higher education in India, where fees are subsidized even for affluent families, costing taxpayers 96 lakhs per student. Drawing from a We the People discussion, it highlights the 'brain drain' problem: students educated on public money often emigrate for better opportunities abroad, providing no measurable return to Indian taxpayers. The government has responded by mandating that some students work in India for a period before leaving or proposing an 'exit tax,' encapsulated in the classical-liberal quip: 'Government shackles always follow government shekels.' Referencing Milton Friedman, the argument frames higher education subsidies as middle-class welfare, redistributing wealth from lower-income taxpayers to higher-income beneficiaries. This perspective underscores the inefficiency and inequity of such interventions, advocating against them in favor of market-driven alternatives that avoid coercive redistribution and unintended consequences like talent flight.

**Key points:**

- Government higher education subsidies cost 96 lakhs per student from tax revenues, even benefiting affluent families.
- Subsidized students frequently emigrate abroad, yielding no return on taxpayer investment.
- India's government now requires some beneficiaries to work domestically first or pay an 'exit tax' to leave.
- Milton Friedman describes higher education subsidies as middle-class welfare, transferring wealth from poor to rich.

**By Andrew Humphries**

* * *

(This post was written by Namrata Narayan, Associate, Communications at CCS)

We the People had an interesting conversation regarding government funded colleges that heavily subsidise student fees, even for the families that can afford to pay full fees. (See the episode [here](http://social.ndtv.com/wethepeople), BRIAN DRAIN: ‘BOND’-ED TO INDIA)

The issue that ended up taking the talk by storm was whether or not students who use tax paying money to complete their education (which comes up to 96 lakhs per student) should go oversees to work – meaning, none of that tax paying money benefits the tax payers in any measurable way. The government has now passed a judgement saying that some of these students have to work in India for a certain period of time before leaving to work abroad. Some argue that there should be a ‘tax’ if they want to leave.  (Government shackles always follow government shekels!)

Milton Friedman among others pointed out long ago that higher education is a middle class welfare program that redistributes wealth from lower to higher income individuals.  See this 8 minute video:  [Milton Friedman – Middle Class Welfare](http://youtu.be/uwG-5xCTGyI)

* * *

**About Andrew Humphries**

## Govt plays vote bank politics under guise of RTE reservations, say schools

Original: https://www.spontaneousorder.in/p/govt-plays-vote-bank-politics-under-guise-of-rte-reservations-say-schools

Author: Spontaneous Order

Published: 2012-06-15T13:47:50.000Z

Topics: rte-act, private-schools, education-regulation, budget-schools

> New Delhi, Jun 14, 2012, DHNS Several small-budget schools in Delhi and 11 other states alleged that the government is trying to create a vote bank by encouraging reservation within reservation for EWS and disadvantaged categories at the National Indepe..

**Summary:**

Low-budget private schools, represented by over 5,000 institutions from 12 states at the Centre for Civil Society's National Independent Schools Alliance (NISA) conference in Delhi, accused the government of vote-bank politics through the Right to Education (RTE) Act's 25% reservation for EWS and disadvantaged groups, including SC/ST/OBC. This replaced prior SC/ST quotas up to 23.5% in government-funded schools, leading to absurdities like 1.5% allocation for OBC/EWS, as highlighted by Haryana private schools head Kulbushan Sharma. Schools collected over 10,000 signatures demanding non-interference in management, to be presented to leaders like Sonia Gandhi and Kapil Sibal. RTE's infrastructure norms—requiring expanded classrooms and playgrounds—threaten closures without government-provided land, per Bihar's Dr. D K Singh. Representatives decried their poor public image as profit-driven operators amid a lobby by government and elite schools, despite serving the poor; Parth J Shah cited Kerala's 60% private school penetration aiding high literacy. With Delhi adding 5 lakh people yearly, NISA coordinator R C Jain warned that shutting budget schools while closing public ones harms education for lower strata, urging recognition and autonomy for these vital providers.

**Key points:**

- Government's RTE 25% reservation for EWS/disadvantaged creates vote banks and illogical sub-quotas like 1.5% for OBC/EWS.
- Low-budget schools demand government non-interference in management, backed by 10,000 signatures to be presented to key leaders.
- RTE infrastructure norms threaten closures of budget schools without land provision from government.
- Budget schools serving the poor face misrepresentation as profit-driven, contrasting with successes like Kerala's 60% private penetration boosting literacy.
- Closing budget schools amid rapid population growth like Delhi's 5 lakh annual additions will deny education to lower strata.

**By Shantanu Gupta**

* * *

New Delhi, Jun 14, 2012, DHNS

Several small-budget schools in Delhi and 11 other states alleged that the government is trying to create a vote bank by encouraging reservation within reservation for EWS and disadvantaged categories at the National Independent Schools Alliance conference held in Delhi on Thursday.

This conference organised by the Centre for Civil Society brought together representatives of over 5,000 low-fee and budget schools from across 12 states. NISA is the only platform that brings together low budget schools to work on areas which need improvement.

“The government has removed the previous provision of SC/ST quota of up to 23.5 per cent in government funded schools. Now, the Supreme Court has directed to reserve 25 per cent seats for all children, including SC/ST/OBC/EWS under the Right to Education.

Does it mean that 1.5 per cent will be allocated for OBC/EWS? So do we take one and a half children under the OBC category?” said Kulbushan Sharma, who heads the Haryana association of private schools.

Sharma has received over 10,000 signatures from budget schools demanding non-interference of the government in school’s management matters.

They are going to present the demands to UPA chief Sonia Gandhi, human resource department minister Kapil Sibal, Haryana chief minister Bhupinder Singh Hooda and others for immediate action.

Budget schools also alleged that they face threat of closure as they do not meet infrastructure norms under the RTE Act.

“The main issue here is that the government has happily said schools should get recognition and even expand classrooms and provide playground facilities or shut shops. If the government does not give us land to meet these requirements, how can we provide all this?” asked Dr D K Singh, chairman, Bihar private school association.

A bad public image was another issue raised by association representatives who had come from 12 states for the conference.

“Budget school owners are often misunderstood as fly-by-night operators with no concern for education but quick money. This makes it difficult for these schools to get recognition and survive in this lobby created by the government and giant schools,” said Parth J Shah, CCS.

Shah also gave an example of how in 1999, Kerala had 60 per cent penetration of private schools which has helped in attaining good literacy rates.

Concerns over quality education were also raised.

R C Jain, national co-ordinator of NISA pointed out with government’s drive to close down its own schools and not giving recognition to low budget schools is adversely affecting the education system.

“With five lakh people adding in Delhi every year, how does the government plan to fulfill the education requirements? And if they close down the budget schools where will children from lower strata of the society study?,” he said.  
http://www.deccanherald.com/content/257095/govt-plays-vote-bank-politics.html

* * *

**About Shantanu Gupta**

## Elinor Ostrom, First Women to Win the Nobel Prize in Economics, Dies at 78

Original: https://www.spontaneousorder.in/p/elinor-ostrom-first-women-to-win-the-nobel-prize-in-economics-dies-at-78

Author: Spontaneous Order

Published: 2012-06-14T15:44:58.000Z

Topics: elinor-ostrom, common-pool-resources, polycentric-governance, public-choice

> The American political economist, Elinor Ostrom, the first woman to win the Nobel Prize in economics in 2009, died of pancreatic cancer at the age of 78 at Bloomington, Indiana on Tuesday. She was working at the Indiana University since 1965, predominan..

**Summary:**

Elinor Ostrom, the first woman to win the Nobel Prize in Economics in 2009—shared with Oliver Williamson—died at 78 from pancreatic cancer in Bloomington, Indiana, after a career at Indiana University since 1965 focused on public economics and public choice theory. Her research demonstrated how local communities successfully manage common-pool resources like fisheries, grazing fields, and water sources by overcoming selfish interests, rather than relying on government intervention. With her husband, she founded Indiana University’s Workshop in Political Theory and Policy Analysis in 1973 and stayed active despite her late-2011 cancer diagnosis. Born in Los Angeles, Ostrom earned master’s and PhD degrees in political science from UCLA, overcoming discouragement to pursue economics. Upon winning the Nobel, she critiqued top-down governance: “What we have ignored is what citizens can do and the importance of real involvement of the people involved — versus just having somebody in Washington … make a rule.” Colleague Prof. McGinnis praised her for revealing the creativity of local communities beyond state or market experts. Indiana University President Michael McRobbie called her an irreplaceable treasure, a loss felt beyond the university, underscoring her classical-liberal emphasis on polycentric, community-led resource management.

**Key points:**

- Elinor Ostrom won the 2009 Nobel Prize in Economics for proving communities can manage common resources like fisheries and pastures more effectively than governments.
- She co-founded Indiana University’s Workshop in Political Theory and Policy Analysis in 1973, promoting research into self-governing institutions.
- Ostrom advocated citizen involvement over centralized rules, stating that local people outperform distant authorities in resource stewardship.
- Her work challenged reliance on state or expert systems by highlighting community creativity in commons management.

**By Sudhanshu Neema**

* * *

The American political economist, [Elinor Ostrom](https://www.nobelprize.org/prizes/economic-sciences/2009/ostrom/facts/), the first woman to win the Nobel Prize in economics in 2009, died of pancreatic cancer at the age of 78 at Bloomington, Indiana on Tuesday. She was working at the Indiana University since 1965, predominantly in the field of public economics and public choice theory.

**Elinor Ostrom was honored with the Nobel Prize in Economics in 2009 for her research into how people overcome selfish interests to successfully manage natural resources; she shared the prize with Oliver Williamson.**

[

![Elinor Ostrom](https://substackcdn.com/image/fetch/$s_!PnVB!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F45225370-0ae6-492e-8421-df13e5209623_615x496.jpeg "ostrom")



](https://spontaneousorder.in/2541/ostrom/)

Elinor Ostrom, celebrating her Nobel Price at the University of Indiana, 12th Oct 2009 (Photo by John Summers, Reuters)

Along with her husband, Ostrom founded Indiana University’s Workshop in Political Theory and Policy Analysis in 1973, and remained active in the field even after learning that she had cancer late last year.

Ostrom was born and raised in Los Angeles, California. She solemnly dedicated her career examining the relationship between people and natural resources. She successfully demonstrated through her research how common resources, e.g. fisheries, grazing fields, and water sources, can be managed efficiently by people who use them rather than by governments.

“What we have ignored is what citizens can do and the importance of real involvement of the people involved — versus just having somebody in Washington … make a rule,” she quoted on the day she was declared to be the Nobel Prize winner.

“What she did was to convince us, those of us who studied the other system — the experts, the state and the markets — to learn to appreciate the creativity of the local communities,” says Prof. McGinnis, her colleague for 25 years.

Ostrom received her master’s and doctoral degrees in political science from University of California, Los Angeles. She said that many people discouraged her from pursuing her doctorate but she overcame every hurdle because she loved studying economics.

The President of the Indiana University Michael McRobbie stated that with her passing the university “has lost an irreplaceable and magnificent treasure,” and indeed it is not just the University.

* * *

**About Sudhanshu Neema**

Sudhanshu is a lawyer and economist working as Manager, Research at the Centre for Civil Society. He served as a Frederic Bastiat Fellow at the Mercatus Center at George Mason University in 2015-16.

## Innovative voucher model from Pakistan

Original: https://www.spontaneousorder.in/p/innovative-voucher-model-from-pakistan

Author: Spontaneous Order

Published: 2012-06-07T10:23:50.000Z

Topics: education-vouchers, school-choice, private-schools, out-of-school-children

> In 2006, Punjab Education Foundation (PEF) launched its Education Voucher Scheme (EVS) with an aim to bring education to children belonging to less affluent and underprivileged families, who would otherwise have been deprived from the benefits of school..

**Summary:**

The Punjab Education Foundation's (PEF) Education Voucher Scheme (EVS), launched in 2006, exemplifies a classical-liberal approach to expanding education access for Pakistan's poorest children—out-of-school dropouts, orphans, children of widows, and single parents—without undermining government schools by excluding already-enrolled public school students. Private low-cost schools participate voluntarily after quality inspections assessing learning outcomes and infrastructure, ensuring standards and choice-driven improvements. At just PKR 350 per student quarterly (a third of government costs) plus a PKR 1000 annual stipend for supplies, the model is affordable and scalable. Schools must achieve measurable outcomes, like 50% of students scoring at least 40% on Quality Assurance Tests (QATs), with repeated failures leading to exclusion; additional targets include higher retention, female enrollment, and teacher employment. Incentives such as 12-month voucher payments for 10 months of schooling, professional development thrice yearly, and summer camps boost school quality and revenue. Government support from Punjab's ruling PMLN has fostered positive discourse on vouchers, silencing critics amid demonstrated infrastructure gains. EVS addresses out-of-school children effectively, with explorations of Indian models like Gyanshala for sustainability.

**Key points:**

- EVS targets only out-of-school children such as dropouts and orphans, avoiding enrolled government school students to gain official support.
- Private schools join voluntarily after quality checks on learning and infrastructure, with mandatory 50% students achieving 40% on QATs or face exclusion.
- Vouchers cost PKR 350 per student quarterly plus PKR 1000 annually, one-third of government spending, enabling scalability.
- Incentives include extra revenue from 12-month payments, thrice-yearly training, and summer camps, improving school quality per participants.
- The scheme has built positive voucher discourse by demonstrating access gains and silencing anti-private sector fears.

**By Shantanu Gupta**

* * *

In 2006, Punjab Education Foundation (PEF) launched its Education Voucher Scheme (EVS) with an aim to bring education to children belonging to less affluent and underprivileged families, who would otherwise have been deprived from the benefits of schooling. The scheme has been lauded for thoughtful targeting of beneficiaries, appropriate design of incentives for participating schools and built-in learning-based targets that have addressed an important issue of out of school children.

The main features of this scheme that have addressed concerns with regards to the involvement of the private sector in education are the following:

*Appropriate targeting of beneficiary*

Under EVS, only the most deserving children are identified and registered. Specifically, out of school children (drop outs or those that never went to school), orphans, children of widows and children of single parents were targets for this scheme. Notably, EVS did not target any children already enrolled in government schools, thereby allaying fears that the scheme was an attempt to undermine the value of government schools.

*Voluntary participant selection*

The EVS schools were selected by inviting expressions of interest from institutions within selected areas through advertisements. Quality inspections of the shortlisted schools from those that applied to be a part of the program, were conducted to assess standards. Student learning assessments and infrastructure checks were used to make a final selection of schools that would participate, and agreements were signed with the approved schools. This invitation process ensured that only interested schools were involved and that standards were maintained such that choice would lead to increased learning outcomes.

*Low cost and affordable design*

The average cost for the PEF voucher program was PKR 350 per student, which is much lower than traditional programs (approximately a third compared to government expenditure). Vouchers were distributed every 4 months and an additional one-time payment of PKR 1000 for books, stationary, uniforms, bags, belts and shoes was made annually. The affordability of the model makes it affordable, sustainable and scalable.

*Measurable and relevant outcomes*

Schools empanelled with the EVS were required to positive learning outcomes for the QATs (50% students obtaining at least a 40% mark). Failing this twice successively would automatically lead to the school being excluded from the program for a minimum of two years. In addition, the PEF-EVS has set internal targets for several indicators. Decreasing the number of out of school children, increasing primary school completion rates and increased retention, improved quality of education and learning outcomes, increase in female enrolment, employment opportunities linked with skill development programs, increase in employment opportunities for female teachers were some of the listed indicators. Thus, clearly delineated and measurable outcomes defined the goals of the program.

*Incentives*

PEF designed strong incentives for schools to participate in the voucher program. The incentives assured a regular revenue for the schools and vouchers were given for 12 months although children attend only 10 months of school. The extra revenue could then be used for school improvement work. EVS is clearly focused on learning outcomes instead of inputs such as teacher qualification or infrastructure norms unlike most other schemes. Additionally PEF conducted professional development programs for the participating schools three times a year in addition to preparing and disseminating lessons plans in schools. On an average there were 50 students’ receiving vouchers in EVS schools where summer camps were conducted to bring these students at par with their peers. Overall, participating schools stated that the program helped improve school quality.

*Taking government along*

Since EVS targeted only out of school children, the government has been very supportive of this project. PMNL , the ruling party in Punjab has strongly supported this program, particularly the fact that a large number of children been empowered to access schools. Education vouchers is a term that is used without apprehension and anti-voucher agents have been silenced because schools have demonstrated infrastructure improvements .

Thus, with thoughtful targeting of the beneficiaries, designing appropriate incentives for the low cost private schools to participate in the program, built-in learning outcome based targets, EVS has demonstrated a method to solve the problem of out of school children in addition to generate a  positive discourse around vouchers as an effective instrument for access to education.

Currently the program is subsidized by DFID and long term sustainability alternatives are being explored. Pankaj Jain’s Gyanshaala and a model of mobile libraries from Bangalore are models they are exploring from India .

*This blog is based on the account given my CCS’ Sujatha Muthayya’s after her recent visit to Pakistan. She met Ambreen Raza – Head of PEF, Maliha – Director of EVS, Shafiq – Asst Director EVS, Mr Khalid – School owner and Saif Hameed – Education Adviser to Chief Minister Punjab and also visited one of the PEF-EVS empanelled school*[\[](/Users/CCS/Downloads/Innovative%20Voucher%20model%20from%20Pakistan.docx#_msocom_5)

* * *

**About Shantanu Gupta**

## Can Social Technology Replace Capitalism with “Talentism”?

Original: https://www.spontaneousorder.in/p/can-social-technology-replace-capitalism-with-talentism

Author: Spontaneous Order

Published: 2012-05-28T11:23:58.000Z

Topics: capitalism, talentism, social-technology, capital-accumulation

> Klaus Schwab is quoted in Forbes as saying that “capital is being superseded by creativity and the ability to innovate….If talent is becoming the decisive competitive factor, we can be confident in stating that capitalism is being replaced by ‘talen

**Summary:**

The post challenges Klaus Schwab's assertion, quoted in Forbes, that capitalism is being supplanted by 'talentism,' where creativity and innovation supersede capital as the decisive factor. While recognizing the insights of economists over the past 20 years on how institutions—rules, norms, and values—shape human interactions and the potential of 'social technologies' to unleash human potential (as in Paul Romer's TED talk on charter cities), the author argues against dismissing capital accumulation and capitalists. Talent and ideas require complementary capital goods to yield innovations; even Steve Jobs and Pixar talent on a desert island would produce nothing without them. The existing capital structure—computers, internet, factories, roads—enables creativity far beyond historical levels, and capitalism uniquely generates 'careers open to talent' compared to feudal, mercantilist, or socialist systems. Capitalists and markets efficiently channel resources to life-improving projects, making capitalism integral to human progress rather than obsolete.

**Key points:**

- Capital accumulation provides essential tools for talent and ideas to generate real-world innovations.
- Social technologies enhance human potential but cannot replace the capital structure built by capitalism.
- Capitalism outperforms other systems by creating more careers open to talent.
- Capital markets direct resources to projects that solve human problems.

**By Andrew Humphries**

* * *

Klaus Schwab is quoted in [Forbes](http://www.forbes.com/sites/dovseidman/2012/05/18/the-need-to-reinvent-business/2/) as saying that “capital is being superseded by creativity and the ability to innovate….If talent is becoming the decisive competitive factor, we can be confident in stating that capitalism is being replaced by ‘talentism.'”

Economists have learned a lot in the past 20 years about the role that institutions—rules, norms, and values—play in shaping human interaction both inside organizations and in society at large. The culture we live in and create with others shapes what we can do and become together. Understanding “social technologies” is thus essential in unleashing the potential of human beings. (Paul Romer’s [TED talk](http://www.youtube.com/watch?v=mSHBma0Ithk) on Charter Cities proposes one way to create competition in social technologies.)  But we should not be quick to dismiss the necessity of capital accumulation and capitalists as part of this social technology fabric.

It doesn’t matter how talented you are or how good an idea you have, you need complementary capital goods to produce your innovation. Just imagine Steve Jobs and the Pixar team on a desert island: lots of talent, no capital. What can they produce? Zip.

Capital accumulation and investment are necessary for new ideas to make a difference. Yes, things don’t just happen in economies because of stuff, people have to creatively respond to their surroundings, and, therefore, social technology has immense potential for improving human well-being. But the importance of entrepreneurship doesn’t imply the insignificance of mundane factors such as the tools and food we need to go about the business of creativity. It’s precisely the capital structure we now possess—including computers, the internet, phone lines, factories, roads—that enables individual creativity to a much greater degree than ever before.  And it is capitalism that has created more “careers open to talent” than any other system (feudal, mercantilist, or state socialist).

Capitalists and capital markets tend to channel capital to individuals whose projects will improve our lives. The merit of capitalism as an economic system is precisely that it tends to generate and mobilize capital needed for human beings to creativity solve our problems.

* * *

**About Andrew Humphries**

## Should Government Have a Role in Land Acquisition?

Original: https://www.spontaneousorder.in/p/should-government-have-a-role-in-land-acquisition

Author: Spontaneous Order

Published: 2012-05-23T12:38:42.000Z

Topics: land-acquisition, eminent-domain, property-rights, free-markets

> According to Mint, a Parliamentary Standing Committee on Rural Development ‘recommends that private companies and public-private partnerships have to buy land in the open market’ rather than having the privilege of government compelling people to give

**Summary:**

Andrew Humphries applauds a Parliamentary Standing Committee on Rural Development recommendation that private companies and public-private partnerships buy land in the open market, rather than relying on government compulsion. He highlights the committee's observation that in developed countries like the US, Japan, Germany, and Canada, enterprises purchase land directly, and quotes Congress leader Mani Shankar Aiyar: 'Since there is no question of the state acquisition of labour or capital, there is no logic at all for government to acquire land.' The panel proposes narrowing the definition of public purpose, removing exemptions for projects like nuclear power plants, mines, and highways, and shifting 95% of land acquisition to the market. Humphries argues this aligns with free market liberalism, where entrepreneurs offer prices exceeding farmers' and tribals' opportunity costs, ensuring voluntary, mutually beneficial sales driven by consumer demand and local knowledge. He critiques eminent domain proponents like Rural Development Minister Jairam Ramesh, who claim it's essential due to antiquated land records, and warns that government interventions distort incentives, foster cronyism, and fail to deliver sustainable development. Instead, governments should protect property rights, enforce contracts, and remove red tape to enable organic, decentralized growth.

**Key points:**

- Parliamentary Standing Committee recommends private entities buy land in open market, narrowing public purpose and shifting 95% of acquisitions away from government compulsion.
- In developed countries like US, Japan, Germany, and Canada, enterprises purchase land directly without state acquisition.
- Markets ensure development through voluntary sales when prices exceed owners' opportunity costs, benefiting all parties.
- Government should protect property rights, enforce contracts, and eliminate red tape rather than using eminent domain.
- Eminent domain enables cronyism and distorts incentives, failing to create sustainable development.

**By Andrew Humphries**

* * *

According to [Mint](http://www.livemint.com/2012/05/18000306/No-role-for-govt-in-land-acqui.html), a Parliamentary Standing Committee on Rural Development ‘recommends that private companies and public-private partnerships have to buy land in the open market’ rather than having the privilege of government compelling people to give it over.  Frankly, this is marvelous.

The standing committee adroitly noted that “in developed countries such as the US, Japan, Germany or Canada, land is purchased by enterprises.” And, “Mani Shankar Aiyar, a senior Congress leader and a member of the panel, said, ‘The three principal factors of production are land, labour and capital. Since there is no question of the state acquisition of labour or capital, there is no logic at all for (the) government to acquire land.’”

The panel seeks to make the definition of public purpose much narrower, remove suggested exemptions for projects such as nuclear power plants, mines, highways, etc., and move 95% of land acquisition into the market.

People may be afraid that this will lead to a halt in “development.” But this seems unlikely to me.  Private property and markets make other people’s demand an opportunity cost to land owners (just as with any other resource).  If entrepreneurs (due to consumer demand) can afford to pay farmers and tribals a price that exceeds their opportunity cost, these farmers and tribals will sell.  But they will only do so if it is also in their interest, if they are offered a better alternative.  Let people decide what is best for themselves.  That’s the principle of free market liberalism.

Many, on the other hand, argue that eminent domain is essential for “development.”  Rural development minister [Jairam Ramesh](http://www.livemint.com/2012/05/18231825/Govt-should-have-role-in-acqui.html) for instance argued that in India “where land records were maintained under antiquated systems. ‘We must recognise that we are not in a stage of development where government role in land acquisition can be completely eliminated and abandoned.’”

Governments have been trying to redistribute resources, tilt the playing field in favor of one group or another. For years people have been trying to keep India an agricultural paradise, and now some want to make it an industrial one.  When has government succeeded in creating coordinated, sustainable development? Intervention piles on intervention until the playing field is a warped web of mis-aligned and unproductive incentives, barriers, and uncertainty.

A narrow definition of public purpose would reduce crony capitalist deals and allow market prices to emerge that recognize people’s local knowledge and interests.  Development could happen organically, locally, based on entrepreneurial initiative, individual values, and voluntary negotiation.  Any development that would take place would be mutually beneficial to all of the transacting parties.

Of course, insofar as there are government failures that undermine market transactions, governments should look upon themselves to see what kind of reforms will facilitate *voluntary* trade and association.  Government should focus on clarifying and protecting customary and explicit property rights, enforcing of contracts, and removing red tape and governmental impediments to decentralized development.  This is much more likely to lead to coordinated, sustainable development than relying on yet more central planning and blunt force to organize economic activity.

* * *

**About Andrew Humphries**

## Disinfecting Viruses from India’s Political DNA

Original: https://www.spontaneousorder.in/p/disinfecting-viruses-from-indias-political-dna

Author: Spontaneous Order

Published: 2012-05-21T09:39:31.000Z

Topics: free-markets, nehruvian-socialism, colonialism, indian-politics

> Acceptance of an expansive role for government in the daily lives of citizens is deeply-embedded in the psyche of India’s political leaders, babus & intellectuals. One possible explanation for this might come from a mischaracterization of colonialism as

**Summary:**

India's political leaders, bureaucrats, and intellectuals deeply accept expansive government roles due to a mischaracterization of colonialism as allied with capitalism, fostering anti-capitalist opposition. Freedom fighters like Subhas Chandra Bose blended socialism with nationalism, while Gandhi's swaraj rejected extensive markets and global trade. Most critically, Nehruvian socialism at independence infected India's 'political DNA' with a viral belief that state interference best organizes diverse communities. The author counters that free market capitalism sharply opposes colonialism, viewing the latter as state control akin to socialist intervention. Capitalism enables free flows of trade, capital, and labor across borders; open competition without privileges based on origin, gender, or other traits; moral outcomes from voluntary exchanges rewarding merit; social cooperation and harmony by valuing what others willingly pay for; innovation driving productivity, wage growth, and better goods; and individual learning from mistakes borne personally, without cost-shifting. This classical-liberal framing urges rejecting statism for capitalism's superior coordination and prosperity.

**Key points:**

- Mischaracterizing colonialism as capitalism led Indian freedom fighters and post-independence leaders to embrace socialism over markets.
- Nehruvian socialism embedded a 'virus' in India's political DNA, promoting state interference as optimal for diverse societies.
- Free market capitalism contrasts with colonialism by enabling open trade, competition, voluntary exchange, innovation, and personal responsibility.

**By Christopher Lingle**

* * *

Acceptance of an expansive role for government in the daily lives of citizens is deeply-embedded in the psyche of India’s political leaders, babus & intellectuals. One possible explanation for this might come from a mischaracterization of colonialism as a hand-maiden to capitalism. In turn, opposition to colonialism meant that one must logically be opposed to capitalism.

As it is, freedom fighters like Subhas Chandra Bose freely mixed socialism with their nationalism & Gandhi’s self-reliance principle (*swaraj*) rejected involvement with extensive markets or  globalized trade. Perhaps the most important cause is that being birthed under Nehruvian socialism at Independence infected India’s political DNA with a “virus” that led to a mistaken belief state interference is the best way to organize diversified communities.

But **free market capitalism** is at sharp odds with colonialism, which is merely another form of state control over an economy such that imperial domination should be seen as a variant of socialist intervention.

In contrast to colonialism:  
Free market capitalism–involves free & open flow of trade, capital and labor across international borders.  
Free market capitalism–is based on open competition & the absence of privileges to any producer, regardless of origin or gender or any other characteristic.  
Free market capitalism–leads to moral & “just” outcomes in, as much as, it is an expression of voluntary exchange with rewards being based on merit.  
Free market capitalism–encourages social cooperation & communal harmony since success comes from offering things that others value & willingly pay for them.  
Free market capitalism–encourages & rewards innovation. Living standards tend to rise when technological change is combined with capital so that labor productivity increases thereby causing wages to rise & more, better goods & services being offered.  
Free market capitalism–allows individuals to learn from their own mistakes in having to bear the direct consequence of making errors if such costs are not shifted to others.

* * *

**About Christopher Lingle**

## FCI purchases of food grains & another case of “Lingle’s Law”

Original: https://www.spontaneousorder.in/p/fci-purchases-of-food-grains-another-case-of-lingles-law

Author: Spontaneous Order

Published: 2012-05-17T10:41:37.000Z

Topics: market-distortions, government-intervention, agriculture-policy, food-procurement

> Attempts by the Food Corporation of India (FCI) to mop up some of the bumper harvest of food grains that rose from 232 mt last year to 253 mt this year have caused distortions in the private market for jute bags. While the FCI scrambles to buy jute bags..

**Summary:**

Christopher Lingle critiques the Food Corporation of India's (FCI) aggressive procurement of food grains amid a bumper harvest increase from 232 million tonnes last year to 253 million tonnes this year, which has distorted private markets. Typically purchasing 25-30% of production, FCI is now buying nearly 50%, reducing private grain buyers and leaving private jute bag dealers with unsold stock as FCI scrambles for bags to store its grains. Lingle invokes 'Lingle’s Law' to highlight how public-sector officials disregard knock-on effects of their policies. He questions FCI's insistence on costlier jute bags over cheaper plastic alternatives for storage. For exported grains, FCI officials fret over the 'correct' price rather than relying on market mechanisms, which Lingle portrays as a novel and underutilized solution in India despite frequent rhetorical nods to markets. From a classical-liberal viewpoint, such interventions exemplify government inefficiency and market suppression, advocating for market-driven approaches to avoid distortions.

**Key points:**

- FCI's procurement jumping to nearly 50% of food grain production has sidelined private buyers, distorting the jute bags market.
- Public officials ignore secondary effects like excess jute bags for private dealers due to FCI's storage demands.
- FCI should switch to cheaper plastic bags instead of jute for grain storage to cut costs.
- Export grain prices should be set by markets rather than bureaucratic deliberation.

**By Christopher Lingle**

* * *

Attempts by the Food Corporation of India (FCI) to mop up some of the bumper harvest of food grains that rose from 232 mt last year to 253 mt this year have caused distortions in the private market for jute bags. While the FCI scrambles to buy jute bags to store grain, private dealers of jute bags are, well, being left holding the bag, literally.

Typically, FCI buys 25-30% of food grain production from farmers, but is now buying nearly 50%. With fewer private buyers of grains, there are fewer sales by private sellers of jute bags.

Much of the problem here is that public-sector officials tend to disregard knock-on effects of their policies

Another question arises over costs by limiting storage of FCI purchases om jute bags rather than using cheaper plastic bags.

Meanwhile, FCI officials anguish over the “correct” price for exported food grains. This mind-numbing exercise is most often solved elsewhere by relying on the novel mechanism of “markets”, something that is spoken about in India, but seldom seen.

* * *

**About Christopher Lingle**

## On Government

Original: https://www.spontaneousorder.in/p/on-government

Author: Spontaneous Order

Published: 2012-05-16T10:19:53.000Z

Topics: government, classical-liberalism, philosophy

> Government! Three fourths parasitic & the other fourth stupid fumbling — oh, he conceded that man, a social animal, could not avoid having government, any more than an individual man could escape his lifelong bondage to his bowels. But Harshaw did not h

**Summary:**

This fragmentary post by Christopher Lingle features two quotes critiquing government from a classical-liberal viewpoint: Robert A. Heinlein's portrayal in *Stranger in a Strange Land* (1961) of government as 'three fourths parasitic & the other fourth stupid fumbling'—unavoidable like bodily functions but not good—and John Locke's analogy in *The Second Treatise of Civil Government* (1690) equating unjust conquest by rulers to robbery by a dagger-wielding thief, denying any legitimate title from force. No original analysis or policy arguments are provided.

**Key points:**

- Heinlein depicts government as mostly parasitic and inept, something to wish away despite its necessity.

**By Christopher Lingle**

* * *

*Government!*

*Three fourths parasitic & the other fourth stupid fumbling — oh, he conceded that man, a social animal, could not avoid having government, any more than an individual man could escape his lifelong bondage to his bowels. But Harshaw did not have to like it.*

*Simply because an evil was inescapable was no reason to term it a “good.” He wished that government would wander off and get lost!*

\[Robert A. Heinlen, *Stranger in a Strange Land* (1961)\]

*Should a robber break into my house, and, with a dagger at my throat, make me seal deeds to convey my estate to him, would this give him any title? Just such a title by his sword has an unjust conqueror who forces me into submission.*

*The injury and the crime is equal, whether committed by the wearer of a crown or some petty villain.*

\[John Locke, *The Second Treatise of Civil Government* (1690)\]

* * *

**About Christopher Lingle**

## INDIA PRODUCES ENOUGH FOOD TO FEED ITS CITIZENS: WHY DO SO MANY STARVE?

Original: https://www.spontaneousorder.in/p/india-produces-enough-food-to-feed-its-citizens-why-do-so-many-starve

Author: Spontaneous Order

Published: 2012-05-14T10:56:35.000Z

Topics: food-policy, government-intervention, agricultural-markets, market-liberalization

> According to the International Food Policy Research Institute’s 2011 Global Hunger Index, India ranked 67th out of 81 countries & had 200 million “food-insecure” people, the most of any country. A convincing case can be made that policy intervention

**Summary:**

India produces enough food to feed its citizens yet ranks 67th out of 81 on the 2011 Global Hunger Index with 200 million food-insecure people, due to policy interventions as per Christopher Lingle's classical-liberal critique. He coins 'Lingle’s Law,' where government interventions create distortions requiring further interventions, trapping economies in cycles that undermine growth. The Public Distribution System (PDS) exemplifies this, with nearly 50% of wheat and rice lost to corruption or waste by politically connected parties. To fix PDS failures, the Food Guarantee Scheme introduced ration cards, standardized packaging, and GPS-tracked transport, compounding inefficiencies. Record 2012 foodgrain production swelled government stocks to 75 million tonnes against 50 million tonnes storage capacity, causing rot while farmers suffer and people starve; the Food Corporation of India responds by building more godowns rather than addressing root causes. Lingle advocates eliminating market-interfering policies: lift export bans, end state taxes/levies beyond minimum support prices, remove inter-state trade barriers, and shift to competitive private 'mandis' for handling and distribution to curb waste, corruption, and subsidies.

**Key points:**

- Government policies like PDS cause nearly 50% loss of foodgrains to corruption and waste.
- Excess food stocks of 75 million tonnes exceed 50 million tonnes storage capacity, leading to rot amid hunger.
- Lingle’s Law describes how interventions create distortions necessitating more interventions in a vicious cycle.
- Solutions include lifting export bans, ending state taxes and trade barriers, and enabling private competitive mandis.

**By Christopher Lingle**

* * *

According to the International Food Policy Research Institute’s 2011 Global Hunger Index, India ranked 67th out of 81 countries & had 200 million “food-insecure” people, the most of any country. A convincing case can be made that policy interventions are the underlying cause for India’s problem with hunger & starvation.

To help my students remember an important element of the failures of public policy, I coined the term “Lingle’s Law”. In brief, it suggests that policy interventions lead to distortions/imbalances that affect groups that demand a new intervention to remedy harm done by the first. This leads to an endless loop of government interventions that undermine economic growth and perpetuate imbalances.

As it is, government domination of markets with administered pricing always leads to imbalances in demand and supply that are almost always blamed on markets rather than policy.

A textbook case of “Lingle’s Law” can be seen in India’s foodgrain market where failures of government policy led to establishing a “right to food” so that public-sector initiatives in food entitlements were introduced to fix problems caused by earlier initiatives.

There are many policy culprits in this sad tale, but let’s start with the Public Distribution System (PDS) and the blatant losses and diversion of foodgrains to black markets by politically-connected or politically-protected parties. (Nearly 50% of foodgrain (wheat & rice) distributed under existing framework is lost to corruption or waste.)

At this point, set aside the high costs of market distortions and observe that public officials sought to correct a (predictable) problem of their own making by introducing the Food Guarantee Scheme (FGS).

To “improve” on a bad scheme & stop diversion of foodgrain destined for fair price shops, a complicated scheme of ration cards, standardized 50-kg packaging & installation of GPS devices on vehicles used to transported foodgrain from godowns to fair price shops.

But the problem with getting foodgrains to consumers can only be improved upon by eliminating most, if not all, public policies that interfere with market forces. The end result will not be perfect, but it can only improve on the destructive maze of opportunities for corruption & wanton wastage.

For example, record foodgrain production over fiscal 2012 led to the total food stock held by government agencies to be about 75 million tonnes by end of current procurement season. Since storage capacity under suitable conditions is only about 50 million tonnes, massive losses in foodgrains will recur.

The solution? Instead of rethinking the fundamental cause of the problems, the call is for the Food Corporation of India (FCI) to build or rent more godowns! (For its part, FCI procurements often rot since they are stored in the open or covered with plastic sheeting while people starve & while farmers face penury.)

Other, better, solutions include lifting export bans so farmers can export more foodgrains. Similarly, States could stop imposing taxes and levies over & above the minimum support price while ending trade barriers across State lines. Such policies punish producers that must forego higher earnings from sales above “minimum support prices”.

Allowing handling and distribution of foodgrains within a competitive, private framework of “mandis” would reduce or eliminate imbalances & inefficiencies as well as reduce the financial cost of food subsidies.

[

![](https://substackcdn.com/image/fetch/$s_!nM6K!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F4b276f61-cb58-45f4-b073-8a198db4df80_187x270.jpeg)



](https://spontaneousorder.in/india-produces-enough-food-to-feed-its-citizens-why-do-so-many-starve/india-food/)

(Hmm, the above cartoon opens an issue for another blog entry….)

* * *

**About Christopher Lingle**

## To Educate Children, We Have To Teach Their Parents

Original: https://www.spontaneousorder.in/p/to-educate-children-we-have-to-teach-their-parents

Author: Spontaneous Order

Published: 2012-05-12T08:14:56.000Z

Topics: education, school-retention, conditional-cash-transfers, returns-to-education

> Several government interventions like the Sarva Shiksha Abhiyan, Mid Day Meal, and the District Primary Education Program have resulted in increasing the net enrolment rate into primary school. Despite a high primary net enrolment rate of 91% (WDI, 2008..

**Summary:**

Despite government interventions like Sarva Shiksha Abhiyan, Mid Day Meal, and District Primary Education Program boosting primary net enrollment to 91% (WDI 2008), India still has over 5.5 million children out of school, with only 66% of primary enrollees surviving to grade 5 (UIS 2007), highlighting retention as the core challenge. Peter Orazem's Copenhagen Consensus study evaluates three high-impact, cost-beneficial strategies: nutrition supplements, information campaigns on returns to schooling, and conditional cash transfers (CCTs) for attendance. India already implements nutrition via mid-day meals (at least in theory) and CCT pilots like Delhi's Laadli Scheme and Bihar's Bicycle scheme, which have shown success. Yet, large-scale provision of accurate information to parents and children on schooling returns remains unexplored despite being simple and inexpensive. From a classical-liberal viewpoint, this intervention empowers families with market-like signals on education's economic value, fostering voluntary retention over coercive measures and aligning individual incentives with societal benefits.

**Key points:**

- Primary enrollment reached 91% but retention fails with only 66% reaching grade 5 and 5.5 million children out of school.
- Orazem's study shows nutrition supplements, info on schooling returns, and CCTs yield benefits exceeding costs.
- India provides mid-day meals and CCT pilots like Laadli and Bihar Bicycle but lacks scaled info campaigns on education returns.
- Scale up inexpensive information provision to parents on schooling returns to boost retention.

**By Sana Kazi**

* * *

Several government interventions like the Sarva Shiksha Abhiyan, Mid Day Meal, and the District Primary Education Program have resulted in increasing the net enrolment rate into primary school. Despite a high primary net enrolment rate of 91% (WDI, 2008), more than 5.5 million children are still out of school in India and of those enrolled in primary school only 66% survive to grade 5 (UIS, 2007). Thus, retention still remains a severe issue.

In a recent study (the paper can be found [here](http://www.copenhagenconsensus.com/Default.aspx?ID=1632) and the summary [here](http://www.slate.com/articles/technology/copenhagen_consensus_2012/2012/05/copenhagen_consensus_three_strategies_for_fixing_education_in_the_developing_world_.html)), Peter Orazem considers three strategies that seem to offer the best evidence of success to date: nutrition supplements, offering information on returns to schooling, and conditional cash transfers (CCTs)  for school attendance.  All have been shown to succeed with benefits that exceed the costs.

In India, while nutrition supplements are being provided (in theory atleast) in the form of mid-day-meals and pilot interventions of CCTs for school attendance have been implemented in various states (variations of CCTs have been tried out successfully in India, notably the Delhi Government’s Laadli Scheme and the Bihar Bicycle scheme) the provision of accurate information to children and their parents on the returns of education schooling is one relatively obvious, simple and inexpensive intervention that could perhaps be explored on a large scale.

* * *

**About Sana Kazi**

## Policy Mis-steps & Global Trends are Brewing a Perfect Storm against India’s Economic Growth Prospects

Original: https://www.spontaneousorder.in/p/policy-mis-steps-global-trends-are-brewing-a-perfect-storm-against-indias-economic-growth-prospects

Author: Spontaneous Order

Published: 2012-05-11T15:32:52.000Z

Topics: tax-policy, fdi, fiscal-deficit, economic-growth

> Moves by Finance Minister Pranab Mukherjee are bemusing, to say the least. Indeed. it is not uncharitable to wonder if the Ministry is lacking individuals with a grasp on basic economics. As it is, no one seemed to consider the impact on recent policies..

**Summary:**

Christopher Lingle criticizes Finance Minister Pranab Mukherjee's policies for lacking basic economic understanding, undermining tax revenues needed to address India's large fiscal deficit and deterring foreign direct investment (FDI) essential to offset the current account deficit. Retroactive amendments to tax laws and the General Anti-Avoidance Rules (GAAR)—which presume tax avoidance unless proven otherwise, inverting the principle of innocence until guilt is proven—signaled to investors to avoid India. These moves contributed to a collapsing rupee, capital flight, and stock market correction. While the government backpedaled by delaying GAAR for one year, halving capital gains tax on private equity investments, and withdrawing the import levy on gold jewellery (though retaining a 4% hike on gold imports), Lingle argues such initial folly amid receding global risk appetite foreshadows a 'perfect storm' against India's growth prospects. He portrays policymakers as bemusedly oblivious to the damage from their interventions, highlighting a classical-liberal disdain for presumptive, anti-investor regulations.

**Key points:**

- Retroactive tax amendments and GAAR presume tax avoidance, deterring FDI needed for India's current account deficit.
- GAAR inverts justice by deeming taxpayers guilty until proven innocent.
- Government responded to rupee collapse, capital flight, and stock correction by delaying GAAR one year, halving private equity capital gains tax, and withdrawing gold jewellery import levy.
- Policy missteps amid global risk aversion threaten India's economic growth.

**By Christopher Lingle**

* * *

Moves by Finance Minister Pranab Mukherjee are bemusing, to say the least. Indeed. it is not uncharitable to wonder if the Ministry is lacking individuals with a grasp on basic economics. As it is, no one seemed to consider the impact on recent policies announcement on tax revenues needed to offset the large fiscal deficit or on the inflow of FDI.

With India requiring substantial foreign fund inflows to offset its current account deficit, you would think policy moves would aim to attract foreign investment. But both retroactive amendments to Indian tax law & the General Anti-Avoidance Rules (GAAR) sent notice to investors to look elsewhere.

Consider GAAR; a dunderheaded policy that reverses the conventional sense of justice that one is deemed innocent until proven guilty. But GAAR presumes that inappropriate tax avoidance is the case unless shown otherwise.

It is a good sign that the Government is capable of back-pedaling with it hears bad news. But it took a collapsing rupee, dramatic capital flight & a serious correction in the local stock market before they yielded.

It is encouraging that GAAR was delayed by one year, that the rate of capital gains tax on private equity investments was halved and the levy on imports of gold jewellery was withdrawn (albeit the hike in the import tax on gold remained at 4%). But that such foolish policy moves were contemplated does not bode well for India given that the global appetite for risk is receding.

Meanwhile, back at the Ministry of Finance, one imagines politicians and babus throwing up their hands in innocent wonderment at the damage that they have wrought.

* * *

**About Christopher Lingle**

## THE CURIOUS CASE OF INDIA

Original: https://www.spontaneousorder.in/p/the-curious-case-of-india

Author: Spontaneous Order

Published: 2012-05-11T15:05:30.000Z

Topics: government-failure, economic-paradoxes, rural-employment, public-sanitation

> Centre for Civil Society’s very own Bhuvana Anand has published a piece in the New York Times International Weekly summarizing the big issues and contradictions in current Indian policy and political philosophy. “After the release of the latest round

**Summary:**

This short post from Spontaneous Order promotes Bhuvana Anand's New York Times International Weekly article 'The Curious Case of India,' quoting her on paradoxes in Indian development: over 50% of the population has mobile phone access from the 2011 census, yet the same share lacks latrines, exemplifying how market-driven growth trickles down while government-promised basic services leave Indians to fend for themselves. It includes an image of road construction under India's rural jobs guarantee program, noted as rife with abuse. From a classical-liberal perspective, the piece surfaces contradictions in statist policy versus spontaneous market success, urging readers to access the full article and comment.

**Key points:**

- India's 2011 census shows over 50% mobile phone access but equivalent lack of latrines.
- Economic growth via markets trickles down effectively.
- Government basic services fail, forcing citizen self-reliance.
- Rural jobs guarantee program suffers from widespread abuse.

**By Andrew Humphries**

* * *

Centre for Civil Society’s very own Bhuvana Anand has published a piece in the [New York Times International Weekly](http://nytweekly.com/columns/intelarchives/05-11-12/) summarizing the big issues and contradictions in current Indian policy and political philosophy.

> “After the release of the latest round of data from India’s 2011 census report, I was asked why India had so many cellphones and not enough toilets. While over 50 percent of the population had access to mobile phones, the same percentage did not have access to latrines. In the extraordinary story of my country, such paradoxes abound. Growth is trickling down, but for basic services the government has promised to provide, Indians are still left to fend for themselves.”

Read her article [there](http://nytweekly.com/columns/intelarchives/05-11-12/) and tell us what you think in the comments below.

[

![India guarantees jobs to rural workers, but the program is rife with abuse. Road construction in Andhra Pradesh. (KUNI TAKAHASHI FOR THE NEW<br /><br /> YORK TIMES)](http://nytweekly.com/wp-content/uploads/2012/05/Picture-19-300x163.png "India guarantees jobs to rural workers, but the program is rife with abuse. Road construction in Andhra Pradesh. (KUNI TAKAHASHI FOR THE NEW<br /><br /> YORK TIMES)")



](http://nytweekly.com/wp-content/uploads/2012/05/Picture-19-300x163.png)

\[Image from New York Times International Weekly, [http://nytweekly.com/columns/intelarchives/05-11-12/](http://nytweekly.com/columns/intelarchives/05-11-12/))

* * *

**About Andrew Humphries**

## Is Freedom Just Another Word?

Original: https://www.spontaneousorder.in/p/is-freedom-just-another-word

Author: Spontaneous Order

Published: 2012-05-10T14:58:59.000Z

Topics: free-markets, economic-freedom, poverty-reduction, entrepreneurship

> According to the Harvard Gazette, “Esther Duflo, a development economist at Massachusetts Institute of Technology (MIT), said during the year’s first Tanner Lecture on Wednesday that the world’s rich prosper in part because they have less freedom to

**Summary:**

Andrew Humphries critiques Esther Duflo's claim that prosperity in rich countries stems from less freedom to choose basic comforts, calling it 'flimflam.' He argues, drawing on F.A. Hayek, that wealth arises from division of labor using others' knowledge, but freedom—not government force—enables developed countries to solve decision costs through competition, freer markets, mobility, and accountable local government. Entrepreneurs respond to preferences for reduced learning and choice burdens by offering packages like flight price aggregators (e.g., MakeMyTrip.com), trusted brands, quality alerts, and meal plans. Poor people in developing countries suffer not from too many options but too few, as markets and entrepreneurs are hampered by restrictions. Duflo's boiling water example highlights real costs, but government failure to provide clean water creates demand met by private bottled water markets in India, cheaper than boiling. Humphries concludes that the poor need freer markets, migration freedom, privatization of public goods where possible, and more accountable government elsewhere to spark innovation providing better, lower-cost options including decision aids.

**Key points:**

- Freedom and competitive markets in developed countries reduce decision and knowledge costs via entrepreneurship and innovation.
- Poverty in developing countries stems from too few options due to restricted markets, not excess choices.
- Private bottled water markets in India already provide clean water more affordably than boiling government-supplied alternatives.
- Poor people require freer markets, migration freedom, privatization of public goods, and accountable government to foster wealth-creating innovation.

**By Andrew Humphries**

* * *

According to the [Harvard Gazette](http://news.harvard.edu/gazette/story/2012/05/freedoms-just-another-word/), “Esther Duflo, a development economist at Massachusetts Institute of Technology (MIT), said during the year’s first Tanner Lecture on Wednesday that the world’s rich prosper in part because they have less freedom to choose how to attain basic comforts.”

This is flimflam.

Part of what Duflo is pointing to is certainly true: making decisions is costly.  The Nobel Prize winning economist and social philosopher F. A. Hayek’s explained that one of the fundamental reasons we are wealthier in a division of labor is that it allows us to “make use of knowledge we do not possess.”  Others do things for us in the division of labor that we don’t know how to do for ourselves, at least not at a low enough cost.  To be prosperous, we absolutely need systems that relieve us of having to know and make choices about everything.  What Duflo seems to be missing, however, is that it is freedom, not governmental force, that has enabled people in developed countries to solve this kind of problem and thus become wealthy.

People in developed countries have much more access to systems based on competition and choice than those in developing ones.  Freer markets, greater ability to move from one administrative district to another, and mechanisms that make local government relatively more accountable to people enables people in developed countries to select alternatives that serve their needs better.  Such competition also creates incentives and feedback to others to provide better and better alternatives.Prices and profit signals give entrepreneurs the incentive to provide alternatives that reduce our costs, including the costs of acquiring knowledge and in making decisions.Entrepreneurs offer us “packages” of goods and ways of acting that we prefer *on net*.  For instance, it has become too costly for most to shop for flight prices among so many different airlines.  Entrepreneurs have developed products that do it for us such as MakeMyTrip.com.  Entrepreneurs create brands and reputations to entice me to trust them, websites and associations that alert me to quality, advertise to let me know about the options.  The point is, if we prefer reducing our costs of learning and decision making, entrepreneurs find out how to satisfy that need.  “Tired of having to decide what to buy, cook, and eat every night?  Buy our 365, No Worries Meals package and you will never have to worry about choosing what to eat again!”

Poor people in developing countries are not poor because they have too many options, but because they have too few.  Entrepreneurs and markets that could serve them, reduce their costs, and help solve their problems are hampered, burdened, restricted.  The example of the cost of boiling water vs. having clean water Duflo offers are legitimate examples of costs people have to face.  It takes time and energy to think about this and to do it.  But what the poor need is not for governments to supply them with one shoddy service and restrict competition.  For one, many people have to boil the water because the government is not capable or willing to provide safe, clean drinking water.  There is already a growing market in bottled water and bottled water delivery in India.  Many people owe freer markets, not “development-conscious governments,” for being able to have clean water at a lower cost than having to boil what they drink.

What poor people need most is freer markets, freedom of migration, privatization of public goods where possible, and more accountable government where not, to kick-start a process of innovation that will provide them with better and better options, including ones that reduce the costs of good decision making.

* * *

**About Andrew Humphries**

## 25% Reservation: A perception study on its implementation and impact

Original: https://www.spontaneousorder.in/p/25-reservation-a-perception-study-on-its-implementation-and-impact

Author: Spontaneous Order

Published: 2012-05-04T11:37:44.000Z

Topics: rte-act, ews-reservation, private-education, school-choice

> With the enactment of the Right to Education Act (specifically Clause 12 i.e. the reservation of 25% of the entry-level seats in all private unaided schools for government-sponsored Economically Weaker Section (EWS) students and students from disadvanta..

**Summary:**

The Right to Education Act's Clause 12, mandating 25% reservation of entry-level seats in private unaided schools for Economically Weaker Section (EWS) and disadvantaged students with government sponsorship, represents a classical-liberal acknowledgment of the private sector's vital role in delivering quality education, as evidenced by poor families' preferences: 14.8% of 5-10 year olds below poverty line, 13.8% of 11-14 year olds, and 7% of 15-17 year olds attend private schools, with parents spending 6-11% of income on them. Despite positive reactions to this recognition, opposition persists from those viewing it as the government shirking its constitutional duty. A Centre for Civil Society perception study in four Delhi districts, via interviews and focus groups, reveals implementation hurdles: over 56% of 162 eligible EWS parents did not apply due to low awareness despite nearby schools; fee-paying and EWS parents worried about child integration, though no exclusion occurred; higher-fee schools (Rs. 1000+/month) found reimbursements too low, low-fee ones (under Rs. 500) fretted delays; officials noted needs for streamlined targeting, publicity to fill seats. While a step toward school choice for marginalized children, the clause requires clearer reimbursement guidelines, timelines, awareness campaigns, and streamlined processes to overcome opposition from schools and parents and achieve social justice through quality access.

**Key points:**

- Poor Indian families overwhelmingly prefer private schools, with 14.8% of below-poverty-line 5-10 year olds enrolled and parents spending 6-11% of income on fees.
- 56% of eligible EWS parents in Delhi districts failed to apply under Clause 12 due to unawareness or ignorance of procedures.
- Private schools face reimbursement uncertainties, with higher-fee schools deeming amounts insufficient and low-fee ones anxious about delays.
- Fee-paying parents perceive integration challenges for EWS students, but no actual exclusion issues were reported in the study.
- Clause 12 can enable school choice for disadvantaged children if government improves awareness, targeting, and reimbursement clarity.

**By Sana Kazi**

* * *

With the enactment of the Right to Education Act (specifically Clause 12 i.e. the reservation of 25% of the entry-level seats in all private unaided schools for government-sponsored Economically Weaker Section (EWS) students and students from disadvantaged communities) the Indian Government has finally acknowledged the role of the private sector in providing Education for All.  Though the Act itself has been severely criticized on its lack of clarity and design; this clause in particular has brought about severe reactions from Indian society at large, especially from an ideological context.

At one end of the spectrum there are several people who have *reacted positively to the idea behind this clause* and are supportive of the fact that through the Act, the government has finally recognized and acknowledged the private sector’s role in the provision of quality education. What is most telling of this is the fact that the poorest in India choose these private schools over free government schools and are willing to spend substantial money on educating their children in these schools. Of all the enrolled children living below the poverty line, 14.8% of 5-10 year olds, 13.8% of 11-14 year olds and 7% of 15-17 year olds attended private school (Gandhi, G.  2007) and their parents spend between 6-11% of their income on education in these private schools (ASER, 2010). These numbers are a powerful testament to those policy makers who continue to believe that the private sector has no role in education.

However several segments of society *strongly oppose the idea behind this clause*, as they believe that by including a provision for government sponsored school places in private schools the government is shirking its constitutional obligation towards providing education and is instead transferring its responsibility to the private sector.

To understand the grievances and difficulties faced by the various stakeholders and; the social, economic and educational impact of the clause, the Centre for Civil Society conducted a perception study to understand its implementation and impact in four districts of Delhi. The study used in-depth interviews with parents, schools and government officials and focus group discussions with community groups to understand whether the clause is in fact achieving its objective of social justice.

The study reveals that in all of the 4 districts, awareness levels among EWS parents were generally low. Of the 162 EWS parents that were eligible to apply under Clause 12, over 56% did not apply as they were either unaware of this provision or were aware but did not know what the application procedure involved despite the presence of a number of private schools within a 2-5 km radius. However, those that were unaware but eligible were keen to learn more about the RTE and the admission process so that they could enroll their children in private schools. Of the parents that were aware, both fee-paying parents and EWS parents were fairly concerned about integration issues between their children. The perception of fee-paying parents was that the government-sponsored children would feel out of place and that they would not be able to cope with the studies. However, no child reported exclusion issues during the course of this study.

The biggest concern for schools was the lack of clarity about the reimbursement amount and schedule. While slightly higher budget schools (minimum monthly fee is Rs. 1000) were concerned that the reimbursement amount was too low, low budget schools (minimum monthly fee is less than Rs. 500) were satisfied with the reimbursement amount but were more anxious about the regularity of the reimbursement.

Most government officials were fairly satisfied with the implementation of this clause since it was the first year of implementation. However; they did feel that the targeting and sourcing of beneficiaries needed to be more streamlined. Moreover they felt that some amount of publicity was needed so that the beneficiaries were aware of the scheme and that none of the seats reserved under this provision remained vacant.

While the Act is a step in the right direction; there is an absence of clear policy guidelines and support structure from the government. However in its current form, this clause is facing opposition from schools because of the lack of clarity about the reimbursement procedure and from fee-paying parents because of the perceived integration issues. Several changes need to be made in terms of increasing awareness levels, streamlining the selection and admission process and clearly defining reimbursement amounts, calculation methods and timelines**.** If implemented correctly, Clause 12 of the RTE Act can help create access to quality education and more importantly, provide marginalized children with the ability to choose their own schools.

* * *

**About Sana Kazi**

## Improving upon RTE

Original: https://www.spontaneousorder.in/p/improving-upon-rte

Author: Spontaneous Order

Published: 2012-05-02T14:37:08.000Z

Topics: rte-act, education-reform, budget-schools, school-choice

> Rajeev Mantri and Harsh Gupta in Mint dissect the motivations and impact of RTE and suggest that “dramatically more educational spending by Delhi is not fiscally possible, and repealing RTE is not politically feasible. Therefore, we must now push for as

**Summary:**

Parth Shah responds to a Mint article by Rajeev Mantri and Harsh Gupta, who argue that dramatically increasing educational spending in Delhi is fiscally impossible and repealing the Right to Education (RTE) Act is politically unfeasible. They advocate pushing for exemptions within RTE and recognizing budget private schools (BPS) for reimbursements. Shah concurs that repeal is impossible but posits that amending RTE could gain political traction. From a classical-liberal standpoint emphasizing choice and competition in education, he urges focusing on desirable amendments, building consensus, and advocating for political acceptance. Key priorities include saving performing BPS and securing their reimbursement recognition, alongside ensuring nationwide effective implementation of the 25% reservation for disadvantaged children in private schools. Poor implementation riddled with loopholes, extortion, and bribery would undermine benefits to BPS, highlighting the need for robust execution to foster accountability and genuine access.

**Key points:**

- Repealing RTE is politically impossible, but targeted amendments can become politically appealing.
- Prioritize saving budget performing schools (BPS) by getting them recognized for reimbursements.
- Ensure 25% reservation for disadvantaged children is implemented nationwide without loopholes, extortion, or bribery.
- Build consensus around specific RTE amendments to gain political acceptance.

**By Parth Shah**

* * *

[Rajeev Mantri and Harsh Gupta in Mint](http://www.livemint.com/articles/2012/05/02124248/Views--Making-lemonade-from-l.html) dissect the motivations and impact of RTE and suggest that “dramatically more educational spending by Delhi is not fiscally possible, and repealing RTE is not politically feasible. Therefore, we must now push for as many exemptions as possible within the RTE, while getting more budget schools recognized for reimbursements.”

Repealing RTE is politically impossible but amending it could become politically appealing. We should focus on the type of amendments that we would want to see in the RTE, build a consensus and push for political acceptance.

Along with saving budget performing schools (BPS) and getting them recognised for reimbursement, we should work to get 25% implemented well across the country. If this implementation is full of loopholes, extortion and bribery, the BPS would not benefit much.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## More than 60 million pre-primary children waiting for the system to respond

Original: https://www.spontaneousorder.in/p/more-than-60-million-pre-primary-children-waiting-for-the-system-to-respond

Author: Spontaneous Order

Published: 2012-05-01T17:44:08.000Z

Topics: early-childhood-education, indian-education-policy, public-private-partnerships, government-failure

> The first chapter in NCERT’s grade one Hindi textbooks expects children to write small words and names. It assumes that children already have alphabet knowledge. Similarly for mathematics, the curriculum assumes that children have number knowledge, when

**Summary:**

India's elementary education system faces a profound learning crisis due to the absence of effective pre-primary schooling for over 60 million children aged 3-6, as evidenced by Pratham's ASER surveys showing 50% of grade 5 students unable to read grade 2 text. NCERT's grade 1 curriculum assumes prior alphabet and number knowledge that most children lack without preschooling. Research underscores ages 3-6 as a critical brain development period, yet government efforts via ICDS anganwadis—serving 30 million children—are undermined by overload on underpaid (Rs 1,500-3,000/month), untrained workers handling six services beyond education, maintaining 25+ registers for 40-50 children daily. Constitutional provisions split ECE into non-enforceable Article 45, with fragmented responsibility between Ministries of Women and Child Welfare and Human Resource Development, leading to step-motherly treatment and minimalistic public sector approaches. Private sector demand signals a $1 billion market by 2012. The author, from a classical-liberal viewpoint, critiques regulatory overreach and inefficiency, advocating the draft National ECCE Policy to integrate 3-6 year olds into RTE rights, minimum ECE standards by NCERT et al., infrastructure investment, teacher capacity building, and public-private partnerships leveraging private expertise for holistic child development over formalized primary extensions.

**Key points:**

- Over 60 million Indian children aged 3-6 lack effective pre-primary education, causing persistent learning gaps reflected in ASER data where 50% of grade 5 students cannot read grade 2 text.
- Anganwadi workers, handling six services for 40-50 children while maintaining 25+ registers, receive inadequate pay (Rs 1,500-3,000/month) and training, rendering preschooling ineffective.
- ECE responsibility is fragmented between two ministries with weak constitutional enforcement, leading to suboptimal public provisioning and ignored private sector potential.
- The draft National ECCE Policy offers hope by potentially including 3-6 year olds under RTE, alongside needs for minimum standards, infrastructure, teacher training, and PPPs to harness private expertise.

**By Shantanu Gupta**

* * *

The first chapter in NCERT’s grade one *Hindi* textbooks expects children to write small words and names. It assumes that children already have alphabet knowledge. Similarly for mathematics, the curriculum assumes that children have number knowledge, when they enter grade one. But most children enter grade one with almost no pre-schooling and here lies the learning gap, which is reflected every year in *Pratham’s* ASER survey. Around 50% of grade 5 children, can’t even read 2nd grade text. Government is trying to pump in resources and frame regulations though RTE to build strong elementary education in India but an almost nonexistent pre-schooling in the Indian schooling system is responsible for a very weak foundation for its elementary education.

**Is early childhood education important for child?**

Research shows that the period between 3 and 6 years of age,  is the ‘critical period’ for complete development of a child’s brain.  The formation of later attitudes and values as well as the desire to learn are also influenced at this stage. Therefore, lack of adequate support or neglect at this stage can lead to negative consequences, which are sometimes irreversible in nature.  Early Childhood Education (ECE) requires that young children be provided opportunities and experiences that lead to their all-round development — physical, mental, social, emotional and school readiness.  Alongside health and nutrition, learning is equally important.  Learning at early stage must be directed by the child’s interests and priorities, and should be contextualized by her experiences rather than being structured formally.

Even the charter of Integrated Child Development Services (ICDS) describes the pre schooling education (PSE) as a significant input for providing sound foundation for a child’s development but also as a contributing role in the universalization of primary education, by providing to a child the necessary preparation for primary schooling. Furthermore, it offers substitute care to the younger siblings, thus freeing the older ones – especially girls to attend school. And a projected 1billion USD market inIndiafor pre schooling market by 2012 underpins the demand and importance of early children education.

**Current Constitutional provision for early childhood education**

There are several provisions in the Constitution of India either under the Fundamental Rights or the Directive Principles of State Policy that have been invoked to promote quality ECE services in the country.  Initially, the Indian Constitution committed to the provision of ‘free and compulsory education for children up to fourteen years of age’. In the absence of lower age limit, early childhood education services were considered as part of the Constitutional commitment. However, the subsequent Eighty – Sixth Amendment to the Constitution in 2001 divided the span of 0-14 years into two clear categories to cover their interests under separate Articles in the Constitution. Article 21A has been introduced, which makes elementary education for 6-14 years old children a Fundamental Right. With a great deal of effort from several professional organizations and civil society, ECCE has been included as a Constitutional provision but not as an enforceable Right of every child through Article 45, which reads “The State shall endeavor to provide ECCE for all children until they complete the age of six years”.

**ECE: A tussle between two ministries**

In spite of a weak Constitutional framework for ECE, some efforts are being made towards the same. The fifth FYP saw a major breakthrough in the concept of child development with a shift in the approach from welfare to development and the declaration of National Policy for children in 1974, in pursuance of which, Integrated Child Development Services (ICDS) program came into existence under the **Ministry of Women and Child Welfare (MWCW)**, in which pre-schooling is one of the six services provided in the *anganwadis*.

**Ministry of Human Resource (MHRD)** also took cognizance of the importance of ECE as an important factor in promoting retention of children in primary schooling and it was subsequently included in the design of the externally funded District Primary Education Program (DPEP). The approach under DPEP was one of convergence. It was provided for strengthening of existing provisions for ECE through the ICDS by strengthening their linkage with primary schools. Under SSA, which is one of the eight identified flagship program of the Government of India (GOI) for universalizing elementary education and which has succeeded the DPEP, provisions have been made not only for greater convergence of pre school education initiatives, specially of ICDS, with that of primary schooling but also of setting up *Balwadis* as pre school education (PSE) centers in uncovered areas, training inputs for stakeholders, organizing awareness and advocacy campaigns to create awareness about the importance of PSE. Further, in order to introduce any innovative approach to strengthen ECE, a financial provision of Rs 15 lakh per annum in a district has been made available.

So the ball of ECE fell into the courts of two ministries – Ministry of Human Resource (MHRD) and Ministry of Women and Child Welfare (MWCW) and thus started the step-motherly treatment of ECE. None of them owned it and none left it. MWCW’s Rajiv Gandhi National Crèche Scheme for working mothers which is running 5303 crèches through Indian Council for Child Welfare (ICCW) further fragments the purpose, efforts and fund allocations towards early childhood care and education.

**How effective are anganwadis ?**

So from last 37 years more than 30 million children between the ages of 3 to 6 are attending the pre-schooling in *anganwadis* in India. Pre-schooling is just one of the six components handled by the *anganwadis* worker (AWW) along with other services like health and nutrition of the children. On an average one AWW maintains more than 25 registers, for enrolling children, maintaining their immunization records, records of hot cooked food, weight progress charts, details of distribution of nutritional supplement, referral records for acute malnourished cases. While doing all the above, an AWW needs to engage around 40-50 children in her *anganwadi* for 2-3 hours daily for pre-schooling education to prepare them for class 1 in primary school. Needless to say that she needs to maintain some more registers for the same and the aforementioned services hardly leave any time for this very important component. And for all these she gets a salary of Rs 1,500 per month ($35/month). Our kind-hearted government made it Rs 3,000 per month ($70/month) in the last budget, but even that is not realized in most of the states. After all this, even if she somehow motivates her to take the uphill task of pre schooling outsourced to her by the government, she lacks training and teaching and learning resources.

Though appropriate curriculum guidelines are available in the country for ECE; the reality is that there is a huge gap between what is prescribed or suggested and what is practiced. In the absence of any minimum specifications concerning ECE centers, the currently the public sector ECE seems to be following a minimalist approach, which is not likely to pay dividends. Even in the private sector pre schooling, the overriding emphasis is placed on pedagogical concerns of formalized cognitive domains by way of down ward extension of primary schooling and thus marginalizing a dozen of other affective and psychomotor domains. In fact, the early childhood education centers have to offer such activities in which cognitive development may occupy an important place but is not an overriding focus of attention.

Given this situation, NCERT, NUEPA and NIPCCD may be required to evolve minimum specifications incorporating different pedagogical, infrastructure, administrative, staffing and training parameters of ECE centers, which can later be applied to all categories of centers, using different instrumentalities appropriate to each sector.

**Do we have a hope?**

In the current gloomy scenario for ECE, the recent draft National Early Childhood Care and Education (ECCE) Policy put in the public domain by Ministry of Women and Child Welfare comes as a silver lining. Once the policy is screened, reviewed and approved, children between the ages of 3 and 6 can be brought under the ambit of the Right of children to free and compulsory education. Kerala state RTE rules give significant emphasis on ECE. We need to invest significantly on ECE infrastructure and capacity building of teachers for the same. Infrastructure and expertise of various private players, which have shown prominence in the last decade, can be used through public private partnerships (PPPs).

According to the 2011 Census, around 158.7 million children inIndiaare in the 0-6 year age group, of which an estimated 60 million are in the age group of 3-6 years. Currently 48 per cent are reported to be covered under the ICDS scheme. Broad estimations also indicate that a significant number is also covered by the private sector, besides some limited coverage by the NGO sector, for which there is no data available. But in absence of any clear direction, policy, curriculum and budgetary provisions millions of children are deprived of a meaningful childhood engagement.

* * *

**About Shantanu Gupta**

## How to fulfil the RTE promise

Original: https://www.spontaneousorder.in/p/how-to-fulfil-the-rte-promise

Author: Spontaneous Order

Published: 2012-04-26T04:03:06.000Z

Topics: rte-act, school-choice, education-vouchers, private-schools

> Centre must fund the states, but let them identify the students who need help After the Supreme Court judgment on the constitutionality of the Right to Education Act (RTE), the onus is now on the government to design a transparent, fair and accountable ..

**Summary:**

Parth Shah argues for a classical-liberal implementation of the RTE Act's 25% reservation in private schools—reframed as 'opportunity seats'—to benefit 2.5-7 million poor students in the first year, doubling annually for eight years. The Centre must directly fund these seats based on state-determined per-student costs in government schools, avoiding reliance on variable SSA reimbursements, and adopt a uniform national rule for annual adjustments like inflation or biennial recalculations. An independent India Inclusive Education Fund, as a special purpose vehicle, would manage reimbursements, raise supplementary funds from corporations, foundations, and individuals to bridge gaps between government costs and private fees, and offer inclusion awards to incentivize schools. The Centre guarantees timely payments by budgeting and depositing funds on April 1 and September 1. States should flexibly identify eligible students via student cards, vouchers, or biometrics, with experimentation encouraged, while NCPCR verifies processes and penalizes failing states by requiring contributions to the fund. This decentralized, accountable structure with private sector involvement fulfills RTE's inclusive education promise without mandating quotas.

**Key points:**

- Central government must directly reimburse 25% opportunity seats in private schools based on state government school costs, with uniform national adjustment rules.
- Create India Inclusive Education Fund as an independent SPV to manage payments, raise private funds, bridge cost gaps, and award high-performing schools.
- Let states experiment with identifying eligible poor students using cards, vouchers, or biometrics, verified by NCPCR with penalties for errors.
- Centre ensures timely full reimbursements by depositing budgeted amounts on April 1 and September 1 annually.

**By Parth Shah**

* * *

***Centre must fund the states, but let them identify the students who need help***

After the Supreme Court judgment on the constitutionality of the Right to Education Act (RTE), the onus is now on the government to design a transparent, fair and accountable method to implement the 25 per cent reservation in private schools for economically and socially disadvantaged communities. Instead of reservation, perhaps the initiative can be called 25 per cent inclusion seats or 25 per cent opportunity or state-sponsored seats. A general estimate is that anywhere between 2.5 to 7 million poor students would benefit in the first year of full implementation. And this number will double every year thereafter for eight years. A large number of poor children’s future is thus at stake in the proper implementation of the 25 per cent opportunity seats.

From the multitude of consultations and discussions that have taken place over the last two years on this provision, there are certain ideas that should help fulfill this promise of inclusive education.

First, the central government must directly pay for the 25 per cent opportunity seats instead of relying on state governments to reimburse schools on a state-by-state basis. State governments have already been pointing out that Sarva Shiksha Abhiyan (SSA) funding they receive from the Centre does not include the cost of the 25 per cent seats in private schools. Instead of including this cost in the SSA budget, which would vary widely from state to state, it is far more convenient and straightforward for the Centre to take this responsibility directly. The amount to be paid should be decided by state governments as per the costs incurred in providing education in state schools, and this would be different from state to state. The payment should be from the central government.

The central government should adopt a uniform criterion for adjusting the reimbursement amount from year to year. The current state RTE rules differ widely in re-calculating the amount for future years. Some states offer to revisit state expenditures every two years and re-calculate the reimbursement amount, while others suggest adjusting the first year amount by the rate of inflation for all future years. It is better to have a uniform national rule about re-calculating the reimbursement amount.

Second, the Centre should create an independent special purpose vehicle to manage the reimbursement, which could be called the India Inclusive Education Fund. The central government would commit to make contributions but more importantly, it would raise extra money from corporations, foundations and individuals. These non-government funds could be used to bridge the gap between the reimbursement amount calculated on the basis of the actual per-student cost in government schools, and the fees of private schools. Private schools would be free to raise their own funds to bridge the gap through donations, charity events like music concerts, cultural fairs and other annual events, but they would also get support from the fund. The fund could also offer inclusion awards for schools that do well in social integration and holistic learning of the 25 per cent opportunity students. These awards could help cover a part of the gap for private schools as well as incentivize them to take the challenge of inclusion more seriously.

To assure schools that they would be reimbursed on time and in full as per the process outlined by the fund, the Centre should include its contribution in the annual central education budget and transfer that amount to the fund on April 1. The Centre should calculate its liability as equal to the amount paid out by the fund in the previous year and deposit that amount on April 1 in the fund’s account. The cost adjustments for the current year as per the national uniform rule should be made by August, and the Centre should then deposit the corresponding amount on September 1 to meet its full obligations for the academic year.

Third, the definition and identification of qualified candidates under the 25 per cent should be left to state governments. Some states have suggested that they would issue student cards to those who qualify and that this student card would then be used by schools to determine eligibility. Some states may issue smart coupons or vouchers or biometric cards. There is certainly a need for experimentation to decipher better methods of identification. After some years of experience, we may evolve a commonly accepted method across the states.

The verification of qualified candidates should be done by the National Commission for the Protection of Child Rights (NCPCR), its state branches and affiliated NGOs. The NCPCR should have the powers to take action against states that have significantly high rates of identification errors of omission and commission in order to keep the pressure on the states to improve their identification processes and technologies. The NCPCR may require that the failing states contribute to the fund in proportion to the degree of their failure.

Many more details and processes need to be worked out for the effective implementation of the education opportunity seats, but the above forms the foundation of a structure that will help fulfil the RTE’s historic promise.

*The writer is president of the Centre for Civil Society, Delhi*

[Indian Express, 23 April 2012](http://www.indianexpress.com/news/how-to-fulfil-the-rte-promise/940096/0)

Read more : [https://spontaneousorder.in/schools\_data\_missing/](https://spontaneousorder.in/schools_data_missing/)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Path-breaking rules under the Right to Education Act, in Gujarat

Original: https://www.spontaneousorder.in/p/path-breaking-rules-under-the-right-to-education-act-in-gujarat

Author: Spontaneous Order

Published: 2012-04-26T00:26:51.000Z

Topics: rte-act, education-reform, learning-outcomes, private-schools

> One major initiative of the Indian government, in the field of education, was the Right to Education Act of 2009. This act has major problems, as has been argued by numerous observers and experts in the field. This Act focuses on the interests of incumb..

**Summary:**

The Right to Education Act of 2009 prioritizes inputs for public sector education providers over learning outcomes for children and parents, penalizing private schools despite their superior results. Gujarat's RTE Rules, notified recently and drafted under former Chief Secretary Sudhir Mankad, innovate by basing school recognition on a weighted average: 30% student learning outcomes (absolute levels via independent standardized tests), 40% improvement over past performance (to counter selection bias), 15% inputs like facilities and teacher qualifications, and 15% non-academic outcomes plus parent feedback from a random sample of 20 parents. This outcome-focused approach marks a classical-liberal shift toward children and parents rather than producers. The rules adopt flexible norms, such as classroom size of 300 sq ft or adjusted teacher-student ratio via (area-60)/8 formula, recognizing budget private schools' role in high-cost areas. If norms fail, state takeover or third-party management ensures school continuity for students, unlike forced closures. This contrasts sharply with other states' rigid input-based rules, many of which government schools themselves fail.

**Key points:**

- Gujarat RTE Rules weight school recognition 70% on student learning outcomes (30% absolute, 40% improvement).
- Flexible infrastructure norms allow smaller classrooms with adjusted teacher-student ratios using (area-60)/8 formula.
- Non-compliance leads to state takeover or management transfer to protect student continuity, not forced closure.
- Approach prioritizes private schools' contributions and outcomes over rigid inputs, unlike other states.

**By Parth Shah**

* * *

One major initiative of the Indian government, in the field of education, was the Right to Education Act of 2009. This act has major problems, as has been argued by numerous observers and experts in the field. This Act focuses on the interests of incumbent public sector education providers, instead of focusing on the interests of children and parents. It is focused on inputs into the educational process, regardless of the outcomes which are coming out. It penalises private schools that have weaknesses on *inputs*, regardless of the fact that these schools often induce better learning *outcomes* when compared with public schools.

At the same time, the translation of the Act into benign or malign outcomes critically hinges on the Rules under the Act, which are notified by State governments. Thus, now that Parliament has chosen to enact the RTE Act, the critical frontier that matters is how state governments choose.

In recent weeks, Gujarat notified its [Rules for the implementation of the Right to Education Act (RTE) 2009](http://gujarat-education.gov.in/education/Portal/News/159_1_MODEL%20RULES%2029.2.12.PDF). It has introduced some of the most innovative ideas for recognition of existing private unaided schools. The Committee in charge of drafting the Rules in Gujarat, that was headed by the former Chief Secretary Mr.Sudhir Mankad, has broken new ground in understanding the policy issues faced in education in India today.

Instead of focusing only on input requirements specified in the Act like classroom size, playground, and teacher-student ratio, the Gujarat RTE Rules put greater emphasis on learning outcomes of students in the recognition norms. Appendix 1 of the Gujarat Rules is the one which has a path breaking formulation for recognition of a school: this will be a weighted average of four measures:

Student learning outcomes (absolute levels): weight 30%

Using standardised tests, student learning levels focussing on learning (not just rote) will be measured through an independent assessment.

Student learning outcomes (improvement compared to the school’s past performance): weight 40%

This component is introduced to ensure that schools do not show a better result in (1) simply by not admitting weak students. The effect of school performance looking good simply because of students coming from well-to-do backgrounds is also automatically addressed by this measure. Only in the first year, this measure will not be available and the weightage should be distributed among the other parameters.

Inputs (including facilities, teacher qualifications): weight 15%

Student non-academic outcomes (co-curricular and sports, personality and values) and parent feedback: weight 15%

Student outcomes in non-academic areas as well as feedback from a random sample of parents should be used to determine this parameter. Standardised survey tools giving weightage to cultural activities, sports, art should be developed. The parent feedback should cover a random sample of at least 20 parents across classes and be compiled.

This is one of the first times in India’s history that public policy has focused on children and parents, instead of focusing on the public sector producers of education services.

Furthermore, the Gujarat RTE Rules have taken a more nuanced and flexible approach in other areas too. For instance, both class size and teacher-student ratio have not been defined in absolute terms, but in relative terms. The required classroom size is 300 sq feet but in case classrooms are smaller, then instead of re-building them, the Rules allow for a way to accommodate that with a different teacher-student ratio. The formula is: Teacher Student ratio = (Area of the classroom in sq feet-60)/8. This approach not only allows smaller classrooms to exist but also gives schools a more efficient way to manage physical infrastructure.

If a private school is unable to meet recognition norms, then the RTE Act de-recognises the school and forces it to close down. This sudden forced closure would create serious problems for the students and parents who would have to find a new school in the neighbourhood. The Gujarat Rules allow for the State to takeover the school, or transfer management to a third party, and create a genuine possibility for the school to continue and meet the norms. This, once again, shows the focus of the Gujarat Rules upon the interests of students and parents.

This approach is significantly better to that of the other states where recognition norms are based solely on input requirements and that are also rigid (like playground, classroom size and teacher-student ratio). The Gujarat approach recognises the substantial contribution made by budget private schools in urban and semi-urban areas where land and buildings are very expensive. Actually many government schools themselves would not be able to meet the rigid input norms that RTE has mandated.

First posted on [Ajay Shah’ blog](<http://ajayshahblog.blogspot.in/2012/04/path-breaking-rules-under-right-to.html >).

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Bastiat on the Balance of Trade

Original: https://www.spontaneousorder.in/p/bastiat-on-the-balance-of-trade

Author: Spontaneous Order

Published: 2012-04-20T11:25:07.000Z

Topics: free-trade, balance-of-trade, mercantilism, protectionism

> The Mercantilist fallacies exposed as long ago as Adam Smith still hold sway in popular thinking in part because of language of Mercantilism has not been abandoned. Many people, including those responsible for making policy, still believe that having ...

**Summary:**

Frédéric Bastiat dismantles the mercantilist 'balance of trade' fallacy, which posits that a nation profits when exports exceed imports and loses otherwise, a view still justifying protectionism despite Adam Smith's refutation that true wealth lies in goods and services, not gold. Bastiat critiques politician M. Mauguin's claim that France lost two billion francs over eleven years, including 1847 figures showing a 'gain' of 450 million on manufactured goods (exports 605m, imports 152m) but a 'loss' of 690 million on raw materials (imports 804m, exports 114m). Through thought experiments, Bastiat illustrates: exporting a 50-franc cask of wine from Bordeaux, sold for 70 francs in Liverpool and converted to 90 francs of coal imported back yields a 40-franc net import but personal profit via arbitrage. Conversely, exporting 100 francs of truffles lost at sea creates a net export but total loss. Protectionists like Mauguin would ban profitable trades with net imports and subsidize losing ones with net exports, harming the nation. Bastiat champions laissez-faire and free trade, noting even England rejects balance-of-trade nonsense, urging France to embrace liberty where individuals bear risks and learn from errors rather than suffering legislated folly.

**Key points:**

- Mercantilist balance-of-trade doctrine wrongly equates net exports with national profit and net imports with loss, ignoring that wealth comes from satisfying needs via goods and services.
- Bastiat's wine-coal example shows a 40-franc net import representing profit from buying low abroad and selling high domestically.
- Lost truffles shipment demonstrates net export as loss when goods fail to yield returns.
- Protectionism based on this fallacy suppresses profitable arbitrage trades and subsidizes unprofitable ones, distorting markets.
- True policy should embrace laissez-faire free trade, letting individuals manage risks instead of imposing state errors on all.

**By Andrew Humphries**

* * *

The Mercantilist fallacies exposed as long ago as Adam Smith still hold sway in popular thinking in part because of language of Mercantilism has not been abandoned.   Many people, including those responsible for making policy, still believe that having a net of exports over imports is in some way “favourable” to a nation, while net imports over exports is “unfavourable.”  This misunderstanding is constantly used as a justification of trade protectionism.

The Mercantilists held this belief because of their interest in maximizing the quantity of gold and silver in country.  A net of exports meant an inflow of precious metals.  A net of imports meant an outflow of them.   But as Adam Smith pointed out, it is not money or gold that constitutes wealth, but goods and serves that satisfy our needs and wants.  Money is valuable only insofar as it enables us to purchase goods and services.  In the division of labour, individuals “export” what they produce themselves to others for money in order to “import” goods from others.  How much better would it be if we could send out paper money and receive goods and services from people in other countries forever?

Changes in trade flows can, of course, be beneficial or harmful to specific groups of individuals for periods of time.  But a “favourable balance of trade” is not favourable to a country as a whole.

In the passage below, *[The Balance of Trade](http://www.econlib.org/library/Bastiat/basEss13.html)*, Frederic Bastiat uses a clever thought experiment to demonstrate the foolishness of trying to create a surplus of exports over imports.

> ***“The Balance of Trade***
> 
> The balance of trade is an article of faith.
> 
> We know what it consists in: if a country imports more than it exports, it loses the difference. Conversely, if its exports exceed its imports, the excess is to its profit. This is held to be an axiom, and laws are passed in accordance with it.
> 
> On this hypothesis, M. Mauguin[\*136](http://www.econlib.org/library/Bastiat/basEss13.html#n136) warned us the day before yesterday, citing statistics, that France carries on a foreign trade in which it has managed to lose, out of good will, without being required to do so, two hundred million francs a year.
> 
> “You have lost by your trade, in eleven years, two billion francs. Do you understand what that means?”
> 
> Then, applying his infallible rule to the facts, he told us: “In 1847 you sold 605 million francs’ worth of manufactured products, and you bought only 152 millions’ worth. Hence, you *gained* 450 million.
> 
> “You bought 804 millions’ worth of raw materials, and you sold only 114 million; hence, you *lost* 690 million.”
> 
> This is an example of the dauntless naïveté of following an absurd premise to its logical conclusion. M. Mauguin has discovered the secret of making even Messrs. Darblay[\*137](http://www.econlib.org/library/Bastiat/basEss13.html#n137) and Lebeuf[\*138](http://www.econlib.org/library/Bastiat/basEss13.html#n138) laugh at the expense of the balance of trade. It is a great achievement, of which I cannot help being jealous.
> 
> Allow me to assess the validity of the rule according to which M. Mauguin and all the protectionists calculate profits and losses. I shall do so by recounting two business transactions which I have had the occasion to engage in.
> 
> I was at Bordeaux. I had a cask of wine which was worth 50 francs; I sent it to Liverpool, and the customhouse noted on its records an *export* of 50 francs.
> 
> At Liverpool the wine was sold for 70 francs. My representative converted the 70 francs into coal, which was found to be worth 90 francs on the market at Bordeaux. The customhouse hastened to record an *import* of 90 francs.
> 
> Balance of trade, or the excess of imports over exports: 40 francs.
> 
> These 40 francs, I have always believed, putting my trust in my books, I had gained. But M. Mauguin tells me that I have lost them, and that France has lost them in my person.
> 
> And why does M. Mauguin see a loss here? Because he supposes that any excess of imports over exports necessarily implies a balance that must be paid in cash. But where is there in the transaction that I speak of, which follows the pattern of all profitable commercial transactions, any balance to pay? Is it, then, so difficult to understand that a merchant compares the prices current in different markets and decides to trade only when he has the certainty, or at least the probability, of seeing the exported value return to him increased? Hence, what M. Mauguin calls *loss* should be called *profit.*
> 
> A few days after my transaction I had the simplicity to experience regret; I was sorry I had not waited. In fact, the price of wine fell at Bordeaux and rose at Liverpool; so that if I had not been so hasty, I could have bought at 40 francs and sold at 100 francs. I truly believed that on such a basis my *profit* would have been greater. But I learn from M. Mauguin that it is the *loss* that would have been more ruinous.
> 
> My second transaction had a very different result.
> 
> I had had some truffles shipped from Périgord which cost me 100 francs; they were destined for two distinguished English cabinet ministers for a very high price, which I proposed to turn into pounds sterling. Alas, I would have done better to eat them myself (I mean the truffles, not the English pounds or the Tories). All would not have been lost, as they were, for the ship that carried them off sank on its departure. The customs officer, who had noted on this occasion an export of 100 francs, never had any re-import to enter in this case.
> 
> Hence, M. Mauguin would say, France gained 100 francs; for it was, in fact, by this sum that the export, thanks to the shipwreck, exceeded the import. If the affair had turned out otherwise, if I had received 200 or 300 francs’ worth of English pounds, then the balance of trade would have been unfavorable, and France would have been the loser.
> 
> From the point of view of science, it is sad to think that all the commercial transactions which end in loss according to the businessmen concerned show a profit according to that class of theorists who are always declaiming against theory.
> 
> But from the point of view of practical affairs, it is even sadder, for what is the result?
> 
> Suppose that M. Mauguin had the power (and to a certain extent he has, by his votes) to substitute his calculations and desires for the calculations and desires of businessmen and to give, in his words, “a good commercial and industrial organization to the country, a good impetus to domestic industry.” What would he do?
> 
> M. Mauguin would suppress by law all transactions that consist in buying at a low domestic price in order to sell at a high price abroad and in converting the proceeds into commodities eagerly sought after at home; for it is precisely in these transactions that the imported value exceeds the exported value.
> 
> Conversely, he would tolerate, and, indeed, he would encourage, if necessary by subsidies (from taxes on the public), all enterprises based on the idea of buying dearly in France in order to sell cheaply abroad; in other words, exporting what is useful to us in order to import what is useless. Thus, he would leave us perfectly free, for example, to send off cheeses from Paris to Amsterdam, in order to bring back the latest fashions from Amsterdam to Paris; for in this traffic the balance of trade would always be in our favor.
> 
> Yet, it is sad and, I dare add, degrading that the legislator will not let the interested parties decide and act for themselves in these matters, at their peril and risk. At least then everyone bears the responsibility for his own acts; he who makes a mistake is punished and is set right. But when the legislator imposes and prohibits, should he make a monstrous error in judgment, that error must become the rule of conduct for the whole of a great nation. In France we love freedom very much, but we hardly understand it. Oh, let us try to understand it better! We shall not love it any the less.
> 
> M. Mauguin has stated with imperturbable aplomb that there is not a statesman in England who does not accept the doctrine of the balance of trade. After having calculated the loss which, according to him, results from the excess of our imports, he cried out: “If a similar picture were to be presented to the English, they would shudder, and there is not a member in the House of Commons who would not feel that his seat was threatened.”
> 
> For my part, I affirm that if someone were to say to the House of Commons: “The total value of what is exported from the country exceeds the total value of what is imported,” it is then that they would feel threatened; and I doubt that a single speaker could be found who would dare to add: “The difference represents a profit.”
> 
> In England they are convinced that it is important for the nation to receive more than it gives. Moreover, they have observed that this is the attitude of all businessmen; and that is why they have taken the side of*laissez faire* and are committed to restoring free trade.”

* * *

**About Andrew Humphries**

## Crisis of Interventionism (Continued): Price Controls

Original: https://www.spontaneousorder.in/p/crisis-of-interventionism-continued-price-controls

Author: Spontaneous Order

Published: 2012-04-18T11:58:23.000Z

Topics: price-controls, interventionism, austrian-economics, historical-examples

> Continuing our post from yesterday, in which Ludwig von Mises explained why government interventionism based on redistribution of wealth (including deficit spending) cannot lastingly increase the welfare of the masses, today we will look at intervention..

**Summary:**

Ludwig von Mises defines interventionism as government interference beyond maintaining order, specifically meddling with prices, wages, and production to override consumer sovereignty in the market economy. Focusing on price controls, often imposed amid inflation from money supply expansion, Mises cites historical failures: Roman Emperor Diocletian's brutal enforcement after currency debasement led to the Roman Empire's disintegration; the French Revolution's maximum prices, backed by the guillotine amid printing-press inflation, collapsed with Robespierre's fall. Mechanically, capping milk prices below market levels boosts demand while driving out marginal producers suffering losses, slashing supply and creating shortages and queues. Governments then ration arbitrarily, then control fodder prices—repeating the cycle—and extend to all producers' goods, wages, labor, and even luxuries to prevent resource shifts, inevitably culminating in socialism where all prices are government-determined. This mirrors World War I experiences in Germany and England. From a classical-liberal view, such interventions restrict consumer power, worsen shortages beyond pre-control conditions, and cannot sustainably improve welfare.

**Key points:**

- Price controls below market levels increase demand for goods like milk while causing high-cost producers to exit, leading to shortages and rationing.
- Governments extend controls from consumer goods to inputs like fodder, wages, and luxuries, escalating intervention across the economy.
- Brutal enforcement failed historically under Diocletian and the French Revolution, resulting in societal collapse rather than stability.
- Isolated price controls inevitably lead to full socialism by supplanting market pricing entirely.

**By Andrew Humphries**

* * *

Continuing our [post](https://spontaneousorder.in/?p=2300) from yesterday, in which Ludwig von Mises explained why government interventionism based on redistribution of wealth (including deficit spending) cannot lastingly increase the welfare of the masses, today we will look at interventionism in terms of interference with prices and production.

Via *[Economic Policy: Thoughts for Today and Tomorrow, Lecture Three: Interventionism](http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle=2395&chapter=226215&layout=html&Itemid=27)*

> ### **“What Is Interventionism?**
> 
> What is interventionism? Interventionism means that the government does not restrict its activity to the preservation of order, or—as people used to say a hundred years ago—to “the production of security.” Interventionism means that the government wants to do more. It wants to interfere with market phenomena.
> 
> What we have in mind when we talk about interventionism is the government’s desire to do *more* than prevent assaults and fraud. Interventionism means that the government not only fails to protect the smooth functioning of the market economy, but that it interferes with the various market phenomena; it interferes with prices, with wage rates, interest rates, and profits….
> 
> The government wants to interfere in order to force businessmen to conduct their affairs in a different way than they would have chosen if they had obeyed only the consumers. Thus, all the measures of interventionism by the government are directed toward restricting the supremacy of consumers. The government wants to arrogate to itself the power, or at least a part of the power, which, in the free market economy, is in the hands of the consumers.
> 
> Let us consider one example of interventionism, very popular in many countries and tried again and again by many governments, especially in times of inflation. I refer to price control.
> 
> Governments usually resort to price control when they have inflated the money supply and people have begun to complain about the resulting rise in prices. There are many famous historical examples of price control methods that failed, but I shall refer to only two of them because, in both these cases, the governments were really very energetic in enforcing or trying to enforce their price controls.
> 
> The first famous example is the case of the Roman emperor Diocletian, very well-known as the last of those Roman emperors who persecuted the Christians. The Roman emperor in the second part of the third century had only one financial method, and this was currency debasement. In those primitive ages, before the invention of the printing press, even inflation was, let us say, primitive. It involved debasement of the coinage, especially the silver. The government mixed more and more copper into the silver until the color of the silver coins was changed and the weight was reduced considerably. The result of this coinage debasement and the associated increase in the quantity of money was an increase in prices, followed by an edict to control prices. And Roman emperors were not very mild when they enforced a law; they did not consider death too mild a punishment for a man who had asked for a higher price. They enforced price control, but they failed to maintain the society. The result was the disintegration of the Roman Empire and the system of the division of labor.
> 
> Then, fifteen hundred years later, the same currency debasement took place during the French Revolution. But this time a different method was used. The technology for producing money was considerably improved. It was no longer necessary for the French to resort to debasement of the coinage: they had the printing press. And the printing press was very efficient. Again, the result was an unprecedented rise in prices. But in the French Revolution maximum prices were not enforced by the same method of capital punishment which the emperor Diocletian had used. There had also been an improvement in the technique of killing citizens. You all remember the famous Doctor J. I. Guillotin (1738-1814), who advocated the use of the guillotine. Despite the guillotine the French also failed with their laws of maximum prices. When Robespierre himself was carted off to the guillotine the people shouted, “There goes the dirty Maximum.”
> 
> I wanted to mention this, because people often say: “What is needed in order to make price control effective and efficient is merely more brutality and more energy.” Now certainly, Diocletian was very brutal, and so was the French Revolution. Nevertheless, price control measures in both ages failed entirely.
> 
> ### **Why Price Controls Fail**
> 
> Now let us analyze the reasons for this failure. The government hears people complain that the price of milk has gone up. And milk is certainly very important, especially for the rising generation, for children. Consequently, the government declares a maximum price for milk, a maximum price that is lower than the potential market price would be. Now the government says: “Certainly we have done everything needed in order to make it possible for poor parents to buy as much milk as they need to feed their children.”
> 
> But what happens? On the one hand, the lower price of milk increases the demand for milk; people who could not afford to buy milk at a higher price are now able to buy it at the lower price which the government has decreed. And on the other hand some of the producers, those producers of milk who are producing at the highest cost—that is, the marginal producers—are now suffering losses, because the price which the government has decreed is lower than their costs. This is the important point in the market economy. The private entrepreneur, the private producer, cannot take losses in the long run. And as he cannot take losses in milk, he restricts the production of milk for the market. He may sell some of his cows for the slaughterhouse, or instead of milk he may sell some products made out of milk, for instance sour cream, butter, or cheese.
> 
> Thus the government’s interference with the price of milk will result in less milk than there was before, and at the same time there will be a greater demand. Some people who are prepared to pay the government-decreed price cannot buy it. Another result will be that anxious people will hurry to be first at the shops. They have to wait outside. The long lines of people waiting at shops always appear as a familiar phenomenon in a city in which the government has decreed maximum prices for commodities that the government considers as important. This has happened everywhere when the price of milk was controlled. This was always prognosticated by economists. Of course, only by sound economists, and their number is not very great.
> 
> But what is the result of the government’s price control? The government is disappointed. It wanted to increase the satisfaction of the milk drinkers. But actually it has dissatisfied them. Before the government interfered, milk was expensive, but people could buy it. Now there is only an insufficient quantity of milk available. Therefore, the total consumption of milk drops. The children are getting less milk, not more. The next measure to which the government now resorts is rationing. But rationing only means that certain people are privileged and are getting milk while other people are *not* getting any at all. Who gets milk and who does not, of course, is always very arbitrarily determined. One order may determine, for example, that children under four years old should get milk, and that children over four years, or between the age of four and six should get only half the ration which children under four years receive.
> 
> Whatever the government does, the fact remains, there is only a smaller amount of milk available. Thus people are still more dissatisfied than they were before. Now the government asks the milk producers (because the government does not have enough imagination to find out for itself): “Why do you not produce the same amount of milk you produced before?” The government gets the answer: “We cannot do it, since the costs of production are higher than the maximum price which the government has established.” Now the government studies the costs of the various items of production, and it discovers one of the items is fodder.
> 
> “Oh,” says the government, “the same control we applied to milk we will now apply to fodder. We will determine a maximum price for fodder, and then you will be able to feed your cows at a lower price, at a lower expenditure. Then everything will be all right; you will be able to produce more milk and you will sell more milk.”
> 
> But what happens now? The same story repeats itself with fodder, and as you can understand, for the same reasons. The production of fodder drops and the government is again faced with a dilemma. So the government arranges new hearings, to find out what is wrong with fodder production. And it gets an explanation from the producers of fodder precisely like the one it got from the milk producers. So the government must go a step farther, since it does not want to abandon the principle of price control. It determines maximum prices for producers’ goods which are necessary for the production of fodder. And the same story happens again.
> 
> The government at the same time starts controlling not only milk, but also eggs, meat, and other necessities. And every time the government gets the same result, everywhere the consequence is the same. Once the government fixes a maximum price for consumer goods, it has to go farther back to producers’ goods, and limit the prices of the producers’ goods required for the production of the price-controlled consumer goods. And so the government, having started with only a few price controls, goes farther and farther back in the process of production, fixing maximum prices for all kinds of producers’ goods, including of course the price of labor, because without wage control, the government’s “cost control” would be meaningless.
> 
> Moreover, the government cannot limit its interference into the market to only those things which it views as vital necessities, like milk, butter, eggs, and meat. It must necessarily include luxury goods, because if it did not limit *their* prices, capital and labor would abandon the production of vital necessities and would turn to producing those things which the government considers unnecessary luxury goods. Thus, the isolated interference with one or a few prices of consumer goods always brings about effects—and this is important to realize—which are even *less* satisfactory than the conditions that prevailed before.
> 
> Before the government interfered, milk and eggs were expensive; after the government interfered they began to disappear from the market. The government considered those items to be so important that it interfered; it wanted to increase the quantity and improve the supply. The result was the opposite: the isolated interference brought about a condition which—from the point of view of the government—is even *more* undesirable than the previous state of affairs which the government wanted to alter. And as the government goes farther and farther, it will finally arrive at a point where all prices, all wage rates, all interest rates, in short everything in the whole economic system, is determined by the government. And this, clearly, is *socialism.*
> 
> What I have told you here, this schematic and theoretical explanation, is precisely what happened in those countries which tried to enforce a maximum price control, where governments were stubborn enough to go step by step until they came to the end. This happened in the First World War in Germany and England.”

* * *

**About Andrew Humphries**

## Crisis of Interventionism: The Exhaustion of the Reserve Fund

Original: https://www.spontaneousorder.in/p/crisis-of-interventionism-the-exhaustion-of-the-reserve-fund

Author: Spontaneous Order

Published: 2012-04-17T11:27:58.000Z

Topics: interventionism, progressive-taxation, government-spending, austrian-economics

> It’s crucial to emphasize that what many people see as a “crisis of Capitalism” is really an inevitable crisis of Interventionism (where governments try to restrict and direct economic activity and redistribute its product). Steve Baker, Conservativ

**Summary:**

Andrew Humphries argues that the perceived 'crisis of Capitalism' is actually an inevitable crisis of Interventionism, where governments restrict economic activity and redistribute wealth, as illustrated by Ludwig von Mises in Human Action chapter XXXVI. Mises contends that interventionist policies assume an inexhaustible 'reserve fund' from the affluent can fund redistribution via progressive income and estate taxes, higher wages, shorter hours, and deficits in nationalized enterprises without burdening the masses. Public utilities' losses are covered by taxing the wealthy rather than privatization or price hikes, deemed 'antisocial' by interventionists. However, this fund is finite: it has exhausted in most European countries, with the US approaching the same due to high tax rates yielding negligible extra revenue. Interventionists ignore budgetary trade-offs, treating public spending as unlimited. Once depleted, additional spending must come from the masses, wage hikes raise prices affecting consumers, and strikes burden everyone. The classical-liberal critique holds that interventionism's 'Santa Claus principle' self-liquidates, forcing governments to confront fiscal realities and choose between free markets or full socialism.

**Key points:**

- Interventionism treats the wealth of the rich as an inexhaustible fund for redistribution, but this reserve exhausts after heavy taxation.
- Deficits in nationalized enterprises are financed by taxing the affluent rather than raising prices or privatizing, until funds run out.
- High progressive tax rates in the US produce only modest revenue gains, shifting burdens to the masses as in Europe.
- Wage increases and 'social gains' for workers ultimately raise consumer prices once entrepreneurial buffers are depleted by interventions.
- The interventionist system collapses when its core assumption of unlimited funds fails, refuting lavish spending without revenue limits.

**By Andrew Humphries**

* * *

It’s crucial to emphasize that what many people see as a “crisis of Capitalism” is really an inevitable crisis of Interventionism (where governments try to restrict and direct economic activity and redistribute its product).

[Steve Baker](http://www.stevebaker.info/), Conservative MP for Wycombe in England, and co-founder of the [Cobden Centre](http://www.cobdencentre.org/), recently posted this excellent section from *[Human Action](mises.org/books/humanaction.pdf)* (reproduced below) in which Ludwig von Mises argues that government interventions based on increased wealth redistribution cannot last.   Tomorrow, I’ll post another passage of Mises showing why interventions aimed at directing wages and prices must necessarily tend to state socialism or be abandoned in favor of the free market economy.

Via Human Action chapter XXXVI: The Exhaustion of the Reserve Fund:

> “The idea underlying all interventionist policies is that the higher income and wealth of the more affluent part of the population is a fund which can be freely used for the improvement of the conditions of the less prosperous. The essence of the interventionist policy is to take from one group to give to another. It is confiscation and distribution. Every measure is ultimately justified by declaring that it is fair to curb the rich for the benefit of the poor.
> 
> In the field of public finance progressive taxation of incomes and estates is the most characteristic manifestation of this doctrine. Tax the rich and spend the revenue for the improvement of the condition of the poor, is the principle of contemporary budgets. In the field of industrial relations shortening the hours of work, raising wages, and a thousand other measures are recommended under the assumption that they favor the employee and burden the employer. Every issue of government and community affairs is dealt with exclusively from the point of view of this principle.
> 
> An illustrative example is provided by the methods applied in the operation of nationalized and municipalized enterprises. These enterprises very often result in financial failure; their accounts regularly show losses burdening the state or the city treasury. It is of no use to investigate whether the deficits are due to the notorious inefficiency of the public conduct of business enterprises or, at least partly, to the inadequacy of the prices at which the commodities or services are sold to the customers. What matters is the fact that the taxpayers must cover these deficits. The interventionists fully approve of this arrangement. They passionately reject the two other possible solutions: selling the enterprises to private entrepreneurs or raising the prices charged to the customers to such a height that no further deficit remains. The first of these proposals is in their eyes manifestly reactionary because they believe that the inevitable trend of history is toward more and more socialization. The second is deemed “antisocial” because it places a heavier load upon the consuming masses. It is fairer to make the taxpayers, i.e., the wealthy citizens, bear the burden. Their ability to pay is greater than that of the average people riding the nationalized railroads and the municipalized subways, trolleys, and busses. To ask that such public utilities should be self-supporting, is, say the interventionists, a relic of the old-fashioned ideas of orthodox finance. One might as well aim at making the roads and the public schools self-supporting.
> 
> It is not necessary to argue with the advocates of this deficit policy. It is obvious that recourse to this ability-to-pay principle depends on the existence of such incomes and fortunes as can still be taxed away. It can no longer be resorted to once these extra funds have been exhausted by taxes and other interventionist measures.
> 
> This is precisely the present state of affairs in most of the European countries. The United States has not yet gone so far; but if the actual trend of its economic policies is not radically altered very soon, it will be in the same condition in a few years.
> 
> For the sake of argument we may disregard all the other consequences which the full triumph of the ability-to-pay principle must bring about and concentrate upon its financial aspects.
> 
> The interventionist in advocating additional public expenditure is not aware of the fact that the funds available are limited. He does not realize that increasing expenditure in one department enjoins restricting it in other departments. In his opinion there is plenty of money available. The income and wealth of the rich can be freely tapped. In recommending a greater allowance for the schools he simply stresses the point that it would be a good thing to spend more for education. He does not venture to prove that to raise the budgetary allowance for schools is more expedient than to raise that of another department, e.g., that of health. It never occurs to him that grave arguments could be advanced in favor of restricting public spending and lowering the burden of taxation. The champions of cuts in the budget are in his eyes merely the defenders of the manifestly unfair class interests of the rich.
> 
> With the present height of income and inheritance tax rates, this reserve fund out of which the interventionists seek to comer all public expenditure is rapidly shrinking. It has practically disappeared altogether in most European countries. In the United States the recent advances in tax rates produced only negligible revenue results beyond what would be produced by a progression which stopped at much lower rates. High surtax rates for the rich are very popular with interventionist dilettantes and demagogues, but they secure only modest additions to the revenue. From day to day it becomes more obvious that large-scale additions to the amount of public expenditure cannot be financed by “soaking the rich,” but that the burden must be carried by the masses. The traditional tax policy of the age of interventionism, its glorified devices of progressive taxation and lavish spending have been carried to a point at which their absurdity can no longer be concealed. The notorious principle that, whereas private expenditures depend on the size of income available, public revenues must be regulated according to expenditures, refutes itself. Henceforth, governments will have to realize that one dollar cannot be spent twice, and that the various items of government expenditure are in conflict with one another. Every penny of additional government spending will have to be collected from precisely those people who hitherto have been intent upon shifting the main burden to other groups. Those anxious to get subsidies will themselves have to foot the bill. The deficits of publicly owned and operated enterprises will be charged to the bulk of the population.
> 
> The situation in the employer-employee nexus will be analogous. The popular doctrine contends that wage earners are reaping “social gains” at the expense of the unearned income of the exploiting classes. The strikers, it is said, do not strike against the consumers but against “management.” There is no reason to raise the prices of products when labor costs are increased; the difference must be borne by employers. But when more and more of the share of the entrepreneurs and capitalists is absorbed by taxes, higher wage rates, and other “social gains” of employees, and by price ceilings, nothing remains for such a buffer function. Then it becomes evident that every wage raise, with its whole momentum, must affect the prices of the products and that the social gains of each group fully correspond to the social losses of the other groups. Every strike becomes, even in the short run and not only in the long run, a strike against the rest of the people.
> 
> An essential point in the social philosophy of interventionism is the existence of an inexhaustible fund which can be squeezed forever. The whole system of interventionism collapses when this fountain is drained off: The Santa Claus principle liquidates itself.”

* * *

**About Andrew Humphries**

## India’s vs. China’s Responses to Inequality and Growth

Original: https://www.spontaneousorder.in/p/indias-vs-chinas-responses-to-inequality-and-growth

Author: Spontaneous Order

Published: 2012-04-12T11:35:00.000Z

Topics: india-china-comparison, economic-growth, creative-destruction, economic-freedom

> Three interesting articles have appeared this week comparing the Indian and Chinese governments responses to inequality and economic growth: Give us growth and we’ll handle the inequality by Manas Chakravarty ADB acknowledges that rapid growth in Asia h

**Summary:**

Andrew Humphries curates three articles contrasting India’s and China’s government responses to inequality and economic growth from a classical-liberal lens. Manas Chakravarty cites the ADB acknowledging that rapid Asian growth has lifted millions from poverty, suggesting growth-first approaches handle inequality. Niranjan Rajadhyaksha observes that India-China growth rates converge decennially, but China then accelerates ahead. Swaminathan S. A. Aiyar argues India will surpass China because extractive autocratic institutions stifle creative destruction essential for sustained prosperity, benefiting only elites temporarily. Humphries probes whether democratic regimes inherently enable more creative destruction than autocracies, cautioning that democracies can foster extraction by majorities from minorities, tribalism, or conservative resistance to change—threatening liberty. He posits economic freedom as potentially more vital for long-term prosperity than voting rights or a free press, aligning with classical-liberal emphasis on markets over political forms.

**Key points:**

- Rapid Asian growth has lifted millions from poverty, per ADB, supporting growth-prioritizing policies.
- China repeatedly outpaces India in growth after periodic convergences.
- Extractive autocracies like China's hinder creative destruction needed for broad prosperity, unlike India's democracy argues Aiyar.
- Democracies risk extractive politics via majority rule or fear of change, undermining creative destruction.
- Economic freedom may outweigh voting rights and free press for sustained freedom and prosperity.

**By Andrew Humphries**

* * *

Three interesting articles have appeared this week comparing the Indian and Chinese governments responses to inequality and economic growth:

1.  [Give us growth and we’ll handle the inequality](http://www.livemint.com/2012/04/11134745/Give-us-growth-and-we8217ll.html) by Manas Chakravarty  
    ADB acknowledges that rapid growth in Asia has lifted millions out of poverty
    
2.  [Chinese lessons for India](http://www.livemint.com/2012/04/10194708/Chinese-lessons-for-India.html) by Niranjan Rajadhyaksha  
    The data shows that the difference between growth rates in the two countries converge towards the end of every decade, but then something happens that allows China to accelerate relative to India all over again
    
3.  [Why India will beat China](http://economictimes.indiatimes.com/opinion/columnists/swaminathan-s-a-aiyar/why-india-will-beat-china/articleshow/12615796.cms) by Swaminathan S. Anklesaria Aiyar  
    Extractive political institutions (autocracy and empire) lead to extractive economies benefiting elites, and cannot create general prosperity save for limited periods.
    

Given these three articles, do you think democratic regimes tend to allow more creative destruction than autocratic ones?

Aiyar argues that “creative destruction, which is essential for sustained prosperity but threatens extractive regimes” and therefore the extractive parties (for him autocrats) won’t allow it in the long-run. But what if politics in a democracy is not based on a desire for individual and economic liberty but for the greatest numbers to extract from minorities, or for some tribes to extract from others, or at the very least on a conservative fear of change?What do you think is more important in creating long-term freedom and prosperity: economic freedom or voting rights and a free press?

* * *

**About Andrew Humphries**

## The Day I Grew into a Libertarian Feminist

Original: https://www.spontaneousorder.in/p/the-day-i-grew-into-a-libertarian-feminist

Author: Spontaneous Order

Published: 2012-04-05T18:39:46.000Z

Topics: libertarian-feminism, feminine-virtues, personal-transformation, montessori-education

> “…mere legislation cannot emancipate women. This needs a radical change in our mental makeup and our social structure. For this, we shall have to foster a social emancipating spirit in our everyday life. The conservative male chauvinistic attitude sha

**Summary:**

Andrew Humphries, a libertarian Montessori teacher, recounts his transformation at an American Montessori Association conference in New Orleans. Initially irritated by women speakers praising feminine virtues and critiquing patriarchal prejudices, he dismissed feminism as unnecessary in a legally equal America, prioritizing individual rights over group oppressions. However, he confronted his own subtle chauvinism: a desire to dominate students rather than nurture them respectfully, and disdain for flexibility and gentility. Influenced by Maria Montessori's works, 'Seven Life Lessons of Chaos,' and Deirdre McCloskey's 'Bourgeois Virtues'—noting McCloskey's transition from man to woman—he recognized nurturing, non-dominating love as quintessential liberal virtues aligning with libertarian commitments to mutual respect and freedom over force. Admiring libertarian women like Isabel Paterson, Ayn Rand, Montessori, McCloskey, and Mary Baker Eddy, he underwent a profound emotional shift, embracing 'positive liberalism' that demands not just legal equality but active cultural and personal respect, addressing prejudices. This led to honoring femininity alongside masculinity, improving his relationships, teaching, and overall harmony, urging liberals to integrate feminist insights for fuller realization of principles.

**Key points:**

- Libertarians must address personal chauvinistic prejudices to fully embody liberal virtues of respect and non-domination.
- Feminine traits like nurturing love without control are essential to positive liberalism beyond mere legal equality.
- Embracing both masculine and feminine virtues fosters deeper personal transformation and harmonious relationships.
- Cultural admiration for women thinkers like Montessori and McCloskey reinforces the need to honor womanhood in liberalism.

**By Andrew Humphries**

* * *

> “…mere legislation cannot emancipate [women](http://www.merinews.com/topic/women-news.shtml). This needs a radical change in our mental makeup and our social structure. For this, we shall have to foster a social emancipating spirit in our everyday life. The conservative male chauvinistic attitude shall have to give way to liberalism. It can be said with a sense of pride and confidence that the future of [women](http://www.merinews.com/topic/women-news.shtml) in India is quite bright and prosperity will be safe in their hands.” **[Fairy Tales and Feminism: Refashioning Mother India](http://mowingthelaw.blogspot.in/2012/04/fairy-tales-and-feminism-refashioning.html)**

Must liberals be feminists?

A few years ago, I attended a weekend conference of the American Montessori Association in New Orleans, Louisiana. I was a Montessori high school teacher and was having lots of difficult experiences being in conflict with my students. Most of the speakers at the conference were women; many of them talked about the virtues of women in the classroom and in society at large.  They talked about the need to overcome patriarchal prejudices and the things “men” could learn from femininity.

Frankly, this ticked me off!

I had already been a libertarian for years, believing in the fundamental dignity of individual life and the need for equality of all individuals before the law. But I was not a feminist. Because libertarians recognize that rights belong to individuals, not groups, I pooh-pooed the notion of giving special attention to particular forms of group oppression, especially of a cultural kind. “There’s no need to think about feminism in particular,” I thought. “When everyone is equal before the law, all minorities will be protected from force and coercion. End of story. How can these women keep going on and on about this anachronistic issue? There’s no oppression of women in America anymore!”

However, the base of my impatience was something else. These women were suggesting not only that women should be left alone, but that aspects of womanhood should be admired and emulated by all. I couldn’t ignore the implications of what they were saying and I didn’t like it. The truth was, I actually held chauvinistic feelings within myself—slight, but significant—and I started to realize it. Of course, I had always spoken against blatant chauvinism and in support of women’s rights and equality, but now I started to see that I did not hold women and feminine virtues in equal regard as I did men and masculine virtues.

Some of the virtues many women hold are love and a nurturing attitude without a desire to dominate and control. These are quintessential liberal virtues. I realized, though, that I had a desire for domination, I wanted to succeed at my job by dominating my students, by exerting myself and by overpower them. I was not loving and respecting their personhood as these women were advocating. Though I valued peace among nations, I was belligerent in my character. I disdained flexibility and gentility in women because I wanted to exalt my thick-headedness.

So at first, I didn’t respond to this revelation with gratitude. I felt angry that these women were challenging my feeling of self-satisfaction and superiority. More than that, I felt angry that they were making me aware of these feelings and were causing me to challenge them within myself.

Yet, deep down I knew that these presenters were right, that the character traits they were honouring deserved to be honoured.

One of the reasons this conflict surfaced was that I had recently read several books highlighting the foolishness of the notion that all problems could be solved by exerting force (a manly virtue and vice), especially when it comes to life, human life, and social relations. Among these books were the works of Maria Montessori, *[Seven Life Lessons of Chaos](http://www.amazon.com/Seven-Life-Lessons-Chaos-Spiritual/dp/006093073X)*, and *[Bourgeois Virtues](http://www.amazon.com/The-Bourgeois-Virtues-Ethics-Commerce/dp/0226556638)* by [Deidre McCloskey](http://en.wikipedia.org/wiki/Deirdre_McCloskey). And get this*, the author, now a woman, had once been a man!* (Maybe she knew a thing or two I didn’t.)

Battling against my prejudice were my conscious commitments to liberal principles and the belief in the fundamental, spiritual equality and dignity of all individuals. I knew that human relations based on mutual respect and freedom were better than those imposed by authoritarian dictate and control. I also admired certain women, among whom were Isabel Paterson, Ayn Rand, Maria Montessori, Deirdra McCloskey and Mary Baker Eddy. These were great individuals, extraordinary thinkers and doers.  How could I admire these women and not admire them as women?

I remember walking the streets of New Orleans, struggling on a deep, emotional level with these internal contradictions. It was like a chemical process working itself out. This process churned and churned and effected a deep personal transformation in me that weekend. Ultimately I developed a new sense of self, a new perspective that honoured women and femininity, a new unity of mind and heart, of principle and love, a new sense of liberalism. The new sense of liberalism I developed was positive, not negative. It was not only about ignoring people with equal indifference, but it was about honouring all individuals with sincere respect.  I realized that this positive liberalism required more than a verbal commitment to equality in terms of law; it demanded that people actually be treated with respect and freedom and that cultural and personal prejudices contrary to this respect and freedom must be addressed if this kind of liberalism is to be realized.

With this new perspective, I started to develop a new humanity and a new kind of relationship with others (including my students) based on respect. This new attitude brought about much more happiness and harmony in my life.  I now honour femininity and strive to embody feminine virtues along with the masculine.  I’m grateful to those women and men who helped me grow in this respect.

* * *

**About Andrew Humphries**

## Lawsuit Threatens Cato’s Independence

Original: https://www.spontaneousorder.in/p/lawsuit-threatens-catos-independence

Author: Spontaneous Order

Published: 2012-03-06T16:47:41.000Z

Topics: cato-institute, koch-brothers, think-tank-independence, libertarian-movement

> Those interested in the wider global progress of the liberty movement will be sick to their stomachs to learn that The Cato Institute, the world’s most productive, influential, and respected, libertarian think tank, is being threatened by a hostile take

**Summary:**

The Koch brothers' lawsuit against the Cato Institute threatens a hostile takeover that would destroy its independence as the world's leading libertarian think tank, founded in 1977 by Charles Koch, David Koch, Ed Crane, and William Niskanen. The dispute centers on Niskanen's shares after his 2011 death: Kochs claim a right to buy them per the 1977 shareholder agreement, while Cato insists they pass to his widow Kathryn Washburn. This unusual shareholder structure for a non-profit has drawn scrutiny. Cato President Ed Crane denounces it as an effort to transform the nonpartisan research organization into a partisan tool for Koch's agenda, contradicting Charles Koch's claim of preserving principles of individual liberty, free markets, and peace. Evidence includes Koch-nominated board members like John Hinderaker, a neocon supporting the Patriot Act and Iraq War, and Tony Woodlief, president of Koch nonprofits and critic of libertarianism as a 'flawed religion.' Kochs now influence 7 of 16 board seats. Even a legal win would permanently brand Cato as Koch-controlled, repelling talent, inviting attacks, and undermining its bipartisan critique of government overreach—killing its influence for short-term political gains from a classical-liberal viewpoint.

**Key points:**

- Koch brothers' lawsuit claims right to buy deceased shareholder William Niskanen's Cato shares, disputed by institute leadership.
- Koch-nominated board candidates like neocon John Hinderaker and libertarian critic Tony Woodlief oppose Cato's core principles of civil liberties, anti-militarism, and non-partisanship.
- Koch influence over 7 of 16 board seats risks turning independent Cato into a partisan Republican arm.
- Successful takeover would irreparably damage Cato's reputation, leading to staff quits and diminished liberty movement impact.

**By Andrew Humphries**

* * *

Those interested in the wider global progress of the liberty movement will be sick to their stomachs to learn that [The Cato Institute](http://www.cato.org/), the world’s most productive, influential, and respected, libertarian think tank, is being threatened by a hostile takeover.  Charles and David Koch, two prominent libertarian billionaires, responsible for funding much of America’s libertarian political and intellectual movement, have initiated a lawsuit for a controlling influence over Cato.

The basis of the suit, according to the [Washington Post’s ‘ThinkTanked’ blog](http://www.washingtonpost.com/blogs/think-tanked/post/koch-brothers-sue-cato-institute-president/2012/03/01/gIQAUoHMkR_blog.html?hpid=z4), is that,

> “Cato was divided between four shareholders: the two Koch brothers, Cato president Ed Crane, and former Cato chairman William Niskanen….At the heart of the dispute is the fate of the shares owned by Niskanen, who died in October at age 78 of [complications from a stroke](http://www.washingtonpost.com/local/obituaries/william-a-niskanen-jr-economist-and-cato-institute-chairman-dies/2011/10/31/gIQAuM1RaM_story.html). The Koch brothers believe that they have the option to buy Niskanen’s shares, while Cato officials believe that the shares belong to Niskanen’s widow, Kathryn Washburn, according [to the complaint](http://www.washingtonpost.com/r/2010-2019/WashingtonPost/2012/03/01/National-Politics/Graphics/Cato.pdf).”

According to [Alison Frankel at Thomson Reuters News & Insights,](http://newsandinsight.thomsonreuters.com/Legal/News/ViewNews.aspx?id=41104&terms=%40ReutersTopicCodes+CONTAINS+%27ANV)

> “The suit is primarily based on Section 3 of the Cato shareholder agreement, which was signed in 1977 (and is attached to the complaint). The relevant section provides that “\[n\]o stockholder of the corporation shall have the right or power to pledge, hypothecate, sell, or otherwise dispose of, directly or indirectly, all of any part of his shares of stock without first offering to sell such shares … to the corporation.” That’s pretty clear about how shares are to be handled if a direct owner wants out — but it doesn’t specifically address what happens when a shareholder dies.”

The dispute has raised an [interest at the unusual structure of a non-profit to have shareholders](http://www.washingtonpost.com/politics/koch-brothers-sue-for-control-of-cato-institute/2012/03/02/gIQAHQ9XpR_story.html).

The Koch takeover attempt has raised fears that Cato’ s reputation as an independent, nonpartisan organization will be permanently damaged.

An [excellent overview of the story](http://www.slate.com/articles/news_and_politics/politics/2012/03/the_kochs_brothers_are_trying_to_seize_control_of_the_libertarian_think_tank_cato_.single.html) can be found at Slate.com. The *New Yorker* provides a useful [back-story](http://www.newyorker.com/online/blogs/newsdesk/2012/03/the-kochs-vs-cato.html).

**The Background of the Kochs**

The Koch brothers (pronounced “coke,” like the beverage) have been responsible for funding a significant portion of libertarian and conservative projects in America. The organizations that receive funding from the Kochs have been collectively dubbed the “[Koch-topus](http://wikibin.org/articles/kochtopus.html) ” to imply that Koch funding and influence are spread like tentacles through the liberty movement. Last year, a popular article appeared in the New Yorker illustrating public perceptions of the Kochs ([“Covert Operations: The billionaire brothers who are waging a war against Obama”](http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer?currentPage=all)) by Jane Mayer.

Libertarians have defended the Kochs against popular attacks, which are mostly based on anti-rich prejudices and false notions that libertarianism is merely mouthpiece for corporate interests. Cato, a recipient of Koch donations, has had to dodge accusation of being their pawn. [This suit, however, demonstrates that Cato has long remained independent of Koch control.](http://ordinary-gentlemen.com/blog/2012/03/04/koch-v-cato-some-further-thoughts/)  But a court ruling in the Kochs’ favour would award them a majority share making Cato another arm of the Koch organizational complex.

**The Destruction of Cato’s Reputation**

A successful takeover by the Kochs would deliver a fatal blow to Cato’s reputation as an independent research and advocacy organization.  Many commentators think that the recent uptick in support for libertarian ideas in American politics has lead the Kochs to want to redirect Cato in order to influence the upcoming elections more directly, and thus to use Cato as a partisan (Republican) organization.

Ed Crane, long-time president of Cato, released a [statement](http://www.newyorker.com/online/blogs/newsdesk/2012/03/the-kochs-vs-cato.html) to this effect:

> “Charles G. Koch has filed a lawsuit as part of an effort to gain control of the Cato Institute, which he co-founded with me in 1977. While Mr. Koch and entities controlled by him have supported the Cato Institute financially since that time, Mr. Koch and his affiliates have exercised no significant influence over the direction or management of the Cato Institute, or the work done here.
> 
> “Mr. Koch’s actions in Kansas court yesterday represent an effort by him to transform Cato from an independent, nonpartisan research organization into a political entity that might better support his partisan agenda. We view Mr. Koch’s actions as an attempt at a hostile takeover, and intend to fight it vehemently in order to continue as an independent research organization, advocating for Individual liberty, limited government, free markets and peace.”

Charles Koch claims that “this is not a hostile action” and that he wants to be sure “Cato stays true to its fundamental principles of individual liberty, free markets, and peace into the future, and that it not be subject to the personal preferences of individual officers or directors.” Yet this statement is clearly false on all accounts.

**It is a Hostile Take Over**

The most striking rebuttal of Charles Koch’s statement are the [actions he has taken to change the composition of the board toward those with partisan designs and strong ties to the Kochs](http://volokh.com/2012/03/03/koch-v-cato-a-view-from-cato/). Most of these additions are even hostile to the “fundamental principles” Koch is claiming to support with his actions, supporting attacks on civil liberties, gays, and advocating for aggressive, militaristic interventions overseas.

For example, according to [Jerry Taylor](http://volokh.com/2012/03/03/koch-v-cato-a-view-from-cato/), a senior fellow at the Cato Institute, “just before the last shareholders meeting, the Koch brothers also nominated,” among others, John Hinderaker and Tony Woodlief:

> -   “Hinderaker has written, ‘It must be very strange to be President Bush. A man of extraordinary vision and brilliance approaching to genius, he can’t get anyone to notice. He is like a great painter or musician who is ahead of his time, and who unveils one masterpiece after another to a reception that, when not bored, is hostile.’ Hinderaker supports the Patriot Act and the Iraq War and calls himself a neocon.
>     
> -   “Tony Woodlief, who has been president of two Koch-created nonprofits and vice president of the Charles Koch Foundation. Woodlief has blogged about ‘the rotten heart of libertarianism,’ calling it ‘a flawed and failed religion posing as a philosophy of governance’ while complaining about libertarians ‘toking up’ at political meetings.
>     
> 
> “Now, who’s more likely to “ensure that Cato stays true to its fundamental principles of individual liberty, free markets, and peace into the future” – these Republican operatives and bloggers or the ousted board members who are among the most independent, principled, and energetic libertarians you’ll ever find?”

Anyone familiar with the Cato Institute will understand how fundamentally these position opposed its values.

The Kochs now have significant influence over seven of the 16 board members.  (See this [diagram](http://www.forbes.com/sites/lauriebennett/2012/03/02/who-knew-that-cato-had-shareholders/3/).)

Even if the Kochs intentions aligned honestly with Charles Koch’s statement, [Jonathan H. Adler](http://volokh.com/2012/03/02/koch-v-cato/) at The Volokh Conspiracy hits the nail on the head:

> Whatever the merits of the Kochs’ claim, I cannot understand how their actions can, in any way, advance the cause of individual liberty to which they’ve devoted substantial sums and personal efforts over the years. Even assuming their legal claim has merit, a legal victory will permanently injure the Cato Institute’s reputation.
> 
> Many libertarian-leaning organizations receive money from the Kochs and their foundations and are attacked on this basis. Such attacks can be deflected, as financial support is not the same thing as control. But if the Koch brothers themselves represent the controlling majority of an organization’s board, that organization is, by definition, a Koch-run enterprise. Progressive activists and journalists will have a field day with this. They will forevermore characterize the Cato Institute as “Koch-controlled” — and, as a legal matter, they will be correct. No efforts to re-establish the Institute’s credibility or independence will overcome this fact.
> 
> The Koch brothers may well have legitimate concerns about how the Cato Institute is managed. I don’t know…. Even if one assumes that the Kochs have better ideas for how Cato should direct its resources, know more about how to advance individual liberty, and are correct that the Institute is too “ subject to the personal preferences of individual officers or directors,” any benefit from whatever changes they could make will be outweighed to the permanent damage to Cato’s reputation caused by turning it into a de facto Koch subsidiary. In short, they will have destroyed the Cato Institute to save it.

Moreover, if the Kochs win, many Cato employees will probably [quit](http://www.juliansanchez.com/2012/03/05/cato-and-the-kochs-a-presignation-letter/) further reducing its respectability.

The Kochs suit is unwise, short-sighted, and greedy because it will destroy Cato’s long-term influence for the sake of a short-term political agenda.  Cato’s influence relies on the respect it has gained from its independent research and advocacy, often criticizing the policies of both Republicans and Democrats.  A Koch-controlled Cato will be seen as (and will probably become) a puppet of Koch and Republican interests.  Every indicator appears to me to show that a Koch win will kill the goose that lays the golden eggs. **What could they possibly have to gain?**

* * *

**About Andrew Humphries**

## The Dimensions of Indian Politics

Original: https://www.spontaneousorder.in/p/the-dimensions-of-indian-politics

Author: Spontaneous Order

Published: 2012-03-05T11:45:01.000Z

Topics: political-spectrum, nolan-chart, indian-politics, nationalism

> This is a very interesting chart showing the dimensions of politics in India. (HT: The Acorn: On the Indian National Interest). What do you both think of the horizontal axis? Is that the most relevant other dimension in Indian politics next to liber...

**Summary:**

Andrew Humphries shares the 'Nitimandala' chart depicting the Indian political spectrum, featuring a horizontal axis of nationalism versus regionalism alongside a presumed liberty-authoritarian dimension, arguing it aids in grasping the realities of Indian politics from a classical-liberal viewpoint. He praises this extra dimension for categorizing the motivations behind liberal or authoritarian stances but contends it addresses the *why* rather than the *whether* of government roles in economic and social freedoms. Humphries favors the Nolan Chart's two-dimensional framework of economic and personal liberty as more logically sound for evaluating government intervention. He proposes an advanced three-dimensional model—a cube integrating the Nolan Chart on one face with nationalism-regionalism as a third axis—now feasible with modern computing for better visualization of political positions. This reflects a classical-liberal emphasis on liberty metrics while acknowledging cultural dimensions like nationalism in India's context, and he invites readers to take the Centre for Civil Society's 'World’s Smallest Political Quiz for India' to assess their own stance.

**Key points:**

- The Nitimandala chart adds a nationalism-regionalism axis to map Indian politics, helping explain motivations for liberal or authoritarian views.
- The Nolan Chart superiorly measures economic and social freedoms to determine the extent of government role.
- Nationalism-regionalism categorizes the 'why' of positions, not the 'whether' of liberty versus authority.
- A 3D cube combining Nolan Chart and nationalism-regionalism axes would enhance political spectrum analysis.

**By Andrew Humphries**

* * *

This is a very interesting chart showing the dimensions of politics in India.  (HT: [The Acorn: On the Indian National Interest](http://acorn.nationalinterest.in/2012/03/03/nitimandala-the-indian-political-spectrum/)).

[

![Nitimandala - The Indian Political Spectrum](http://acorn.nationalinterest.in/wp-content/uploads/2012/03/acorn-nitimandala.jpg "Nitimandala - The Indian Political Spectrum")



](http://acorn.nationalinterest.in/wp-content/uploads/2012/03/acorn-nitimandala.jpg)

What do you both think of the horizontal axis?  Is that the most relevant other dimension in Indian politics next to liberty?

I like having this extra dimension. Frankly, it does help me understand something about the reality of Indian political spectrum.  On the other hand, and please correct me if you think I’m wrong, the [Nolan Chart of economic and social freedom](http://en.wikipedia.org/wiki/Nolan_Chart) is more logically sound if we are thinking about how people think of the role of government.  The nationalism and regionalism dimension on the Indian Political Spectrum chart are interesting to categorize people in the *why* they are liberal or authoritarian in certain issues, but not *whether* they are liberal or authoritarian. Frankly, I would like to see the three dimensional image (cube) that has the Nolan chart on one face and the internationalist vs. regionalism dimension on a third axis.  Now we have computers, it’s just a matter of programming.  What do you think?

FYI, if you’re interested to see where you stand, fill out our prototype [World’s Smallest Political Quiz for India](http://ccs.in/fc2012/wspq.asp).

* * *

**About Andrew Humphries**

## Harmful Regulations Hit Close to Home

Original: https://www.spontaneousorder.in/p/harmful-regulations-hit-close-to-home

Author: Spontaneous Order

Published: 2012-03-01T17:22:05.000Z

Topics: housing-regulations, rule-of-law, construction-permits, property-rights

> I returned home last night to a disturbing scene. Someone was moving his things into one of the vacant flats downstairs. “Are you moving in?” I asked. “No. MCD guys were here. They kicked us out of our flat and demolished it.” I quickly went up to

**Summary:**

Andrew Humphries recounts a personal incident where the Municipal Corporation of Delhi (MCD) demolished a tenant's flat and threatened two others in his building due to an unauthorized extra floor, destroying valuable housing resources like concrete slabs and furnishings amid Delhi's housing shortage. From a classical-liberal perspective, this exemplifies economic tragedy: perfectly good apartments are obliterated, reducing supply when abundance is needed for the homeless. India ranks 181 out of 183 in the World Bank's Doing Business Index for ease of dealing with construction permits, with Delhi fourth-worst domestically, making legal compliance costly and rare. This fosters unauthorized builds but arbitrary enforcement—lacking rule of law—turns regulations into tools for extortion (rumored Rs. 25 Lac bribe). The result is resource waste, tenant displacement costs, investment uncertainty, and stifled housing supply from tenancy laws, rent controls, and unclear rules. Higher prices displace the poor into cramped conditions. Humphries argues for secure property rights, consistent rules, and deregulation like the Delhi Development Authority's 2021 proposal to remove height limits, noting the poorest suffer most from informal sector harassment blocking wealth-building.

**Key points:**

- MCD's demolition of unauthorized floors destroys valuable housing resources, exacerbating Delhi's shortage amid homelessness.
- India's 181/183 ranking in construction permit ease drives unauthorized builds and compliance failures.
- Arbitrary enforcement without rule of law enables extortion and deters housing investments, raising prices and harming the poor.
- Burdensome regulations like height limits and rent controls restrict supply; removing them could boost abundance and affordability.

**By Andrew Humphries**

* * *

I returned home last night to a disturbing scene. Someone was moving his things into one of the vacant flats downstairs. “Are you moving in?” I asked. “No. MCD guys were here. They kicked us out of our flat and demolished it.” I quickly went up to see. Their place looked like it had been hit by a bomb. Half of their ceiling—a giant concrete slab, one foot thick and 11 feet long—hung ominously in the centre of the room; above it, a gaping hole opening to the sky. Chunks of rubble and dust covered the floor and furniture that remained in the room. “What happened?” I  said, thinking that it looked like a war zone. “We heard a knock and opened the door to see who was there. MCD guys said, ‘move your stuff into other rooms!’ and then broke down the roof.”

Next I learned that my friends, families who live in the other two flats upstairs from me, must also vacate as soon as they can to avoid a similar fate.  Fortunately, none of them had been there when MCD (Municipal Corporation of Delhi) came.  If they had been, they would have been made immediately homeless without sufficient warning to make alternate arrangements.

What struck me so palpably is that these three perfectly good apartments, a whole bundle of valuable goods, were to be obliterated from existence. The action seemed completely tragic from an economic point of view. It pierces the heart when we understand that wealth comes not from creating scarcity of goods but by their abundance. There are many homeless people in the city and many many others who live in make-shift shacks. Yet, perfectly good apartments are being destroyed reducing the supply of housing.

Why has this happened? Apparently, the building has been deemed to have one more floor than was [authorized](http://www.hindu.com/2008/01/09/stories/2008010954350100.htm). The landlord had not acquired sufficient licenses for what he had built. It is clear that some form of regulation (either market or governmental) is needed [to be sure that some peoples’ actions do not bring harm to others](<http://www.indianexpress.com/news/mcd-to-cut-buildings-flouting-height-limit-d/715773/ >).  This is certainly relevant in Delhi, where there is a moderate risk that earthquakes could cause problems to structurally unprepared, tall buildings.

But rather than blaming the landlord outright, it is important to understand how hard and costly it is to stay on the right side of the law in this matter. The World Bank *[Doing Business Index](< http://www.doingbusiness.org/data/exploreeconomies/india/sub/new-delhi/topic/dealing-with-construction-permits>)* ranks India 181 out of 183 in ease of dealing with construction permits. (Delhi is ranked joined-fourth within India.) People generally have little expectation that such formalities have been followed.

Think about the waste and loss of resources being cause by this mis-coordination: all the concrete, steel, labour effort, copper wire, ceiling fans, etc., that had gone into the construction, not to mention the resources being used to demolish this wealth and to retrofit the remaining floors that could otherwise have gone to more productive purposes. Wealth and value is being turned to dust—literally. Moreover, the tenants must also pay the expense of finding new places to live, time searching, money spent paying brokers, effort to move all of their goods. This excludes the stress and anguish they must feel.

(The interest of the MCD officers seems not to be the height of the building, *per se*, which constitutes the danger to others, but instead with destroying the economic viability of the flats. It remains to be seen what will have to happen with the top floor.)

It might be different if this were a one-off occasion, the consequence of breaking a hard and fast law. But this is not the case. The biggest problem, it appears to me, is the absence of the rule of law, a clear set of rules consistently applied to all.

There is little security of property rights or a low-cost way of coordinating productive activity with the rights of others. Without this rule of law, it is difficult for everyone involved to know what the rules are and what will be enforced. The landlord was unclear, the tenants were unclear. (Tenants of the building had all received official police verification that they were living on these premises.) What remains is not the rule of law but the arbitrary rule of men. This lack of clarity makes the “Warrant to Demolish Fourth Floor” issued by the court a warrant for the authorities to intimidate and extort. (Rumour has it that the bribe for leaving the three flats on the top floor was an absurd Rs. 25 Lac!)

In addition to the sheer loss of resources due to past error and mis-coordination is the increased uncertainty investors face when making decisions for the future. This principle applies from the smallest to the largest scale. The people whose flat was destroyed had recently invested in carpet for their apartment, which is now ruined. My friends invested in a new key, which is now useless. These are trivial examples, but the principle is significant when generalized. Why make numerous minor improvements when it all might come to nought? (Having lived in the US and UK extensively, the striking thing about the quality of life in Delhi is not that anything is absolutely absent, but how the quality of almost every material thing and service seems to be lower quality.  It is these little things, like straws on a camel’s back, that lead to a rougher overall quality of existence for the average person here.)

The same principle applies to the supply of housing. Increased voluntary investment would lead to higher availability and quality of housing and to lower prices. But heavy construction licence requirements, tenancy laws, rent controls, and unclear rules and arbitrary enforcement makes people choose to restrict their investments in construction (especially in non-“luxury” housing). The landlord in my building, instead of investing in more such buildings, may choose not to take up as many opportunities to produce more housing. Others surely have had or have seen similar experiences leading them to restrict their investments, too. These all reduce the supply.

Reducing the supply or restricting its growth, of course, means that the demand causes a higher price than there would otherwise have been. My friends must now move elsewhere, increasing the demand for other apartments, pushing up their prices, ultimately displacing those of lower income and connections. People must live in more cramped, low-quality conditions, or be homeless.

Thankfully, the Delhi Development Authority has [proposed](http://www.accommodationtimes.com/indian-city/delhi/no-vertical-limit-for-delhi/) that height restrictions on buildings, *per se*, should be removed in 2021 because of growing demand and the costs of growing horizontally.

While contemplating the lunacy and injustice of these events, I recall that these problems are faced to a much greater extent by the very poorest who operate far more in the “informal,” unlicensed sector. They cannot afford to make themselves formal and benefit as fully from cooperation in the formal market. They are more open to harassment. It is even harder for them to invest and build wealth with the resources they have. Burdensome and arbitrary regulations like these cause wealth destruction, stagnation, and remove the bottom rungs of the ladder of economic self-advancement.

* * *

**About Andrew Humphries**

## Capitalism Under Attack: Adam Smith and Free Banking

Original: https://www.spontaneousorder.in/p/capitalism-under-attack-adam-smith-and-free-banking

Author: Spontaneous Order

Published: 2012-01-11T01:59:11.000Z

Topics: free-banking, adam-smith, capitalism, central-banking

> Capitalism is under attack from many directions today. In this context, Financial Times just published a fictional “Letter to Capitalists from Adam Smith,” praising what capitalism has achieved over the past 200 years. Despite its imperfections, the l

**Summary:**

Capitalism faces attacks amid financial sector failures, but a fictional Financial Times 'Letter to Capitalists from Adam Smith' praises its triumph over communism and socialism, crediting it with unprecedented wealth creation that has elevated billions to the middle class, enabling education, luxuries, leisure, and secure retirement. The author argues that modern banking, one of the most regulated sectors, deviates from free market ideals and fueled recent crises, not representative of true capitalism. Adam Smith, in The Wealth of Nations, advocated free banking: banks free to issue circulating notes, diversify, and compete, but legally obligated to redeem them immediately and unconditionally in promised assets, ensuring public safety through accountability and competition. This system implies support for competing currencies and potentially breaking up the Euro's monetary union. Scholarship, including from Lawrence White, shows free banking in historical contexts like Scotland and Canada outperformed central banking, offering a classical-liberal alternative to recessions, bailouts, and threats like US debt or Euro collapse that undermine capitalism.

**Key points:**

- Capitalism's productive strength has triumphed globally, creating vast middle-class opportunities despite imperfections.
- Modern banking failures stem from heavy central regulation, not free markets.
- Adam Smith proposed free banking where banks freely issue redeemable notes, regulated by competition and accountability.
- Free banking scholarship indicates it prevents crises better than central banking systems.

**By Andrew Humphries**

* * *

Capitalism is under attack from many directions today.  In this context,  Financial Times just published a fictional [“Letter to Capitalists from Adam Smith,”](http://www.ft.com/intl/cms/s/0/a3e50fa6-3ab7-11e1-a756-00144feabdc0.html#axzz1j1dz0PTp "A Letter to Capitalists from Adam Smith") praising what capitalism has achieved over the past 200 years.

Despite its imperfections, the letter argues, it is much better than the alternatives.  The fictional voice of Smith writes,

> “I am pleased to see that capitalism has triumphed over communism and socialism in virtually every part of the world…This triumph has occurred because capitalism’s greatest strength – productive economic activity – has succeeded in creating more opportunities for more people than anyone – including me – ever imagined. And with more wealth, billions of people now in the middle class can secure education for their progeny, purchase necessities and luxuries at once-unimagined levels, pursue leisure activities for a greater part of their lives and retire with higher levels of economic security.”

The letter goes on to suggest what Smith might have advised today, among other things, about saving the Euro from self-destruction and reducing the US government’s ominous debt.

The question of money and banking is especially important today, since so many of the attacks on capitalism are based on the recent failures of the financial sector.  The irony is, however, that banking is one of the most centrally controlled and regulated sectors of modern economies and in no way represents a free market ideal.  Adam Smith himself advocated a system very different from the one we have currently.

In *The Wealth of Nations* he argued for the core of what today is called Free Banking.  He writes:

> “If bankers are restrained from issuing any circulating bank notes, or notes payable to the bearer, for less than a certain sum, and if they are subjected to the obligation of an immediate and unconditional payment of such bank notes as soon as presented, their trade may, with safety to the public, be rendered in all other respects perfectly free.”

In other words, according to Smith, banks should be free to operate, issue bank notes, diversify, compete, so long as they are legally bound to redeem their banknotes in whichever asset or base-currency they have promised to pay to the bearer of those notes.  Under these conditions, accountability and competition among banks would regulate the issue of currency.  We can infer from this that Smith actually might have advocated for a break up of the Euro (not the common market) and for competition in currencies issued by independent banks.

This may sound crazy to some, but there is much scholarship to suggest that this form of free banking would outperform our current system of central banking.  Consequently, Free Banking may offer the alternative to the recessions and bailouts that have called capitalism itself into question.

For those interested in the theory and history of Free Banking, Lawrence White, a Professor of Economics at George Mason University and leading scholar in the field, will be giving a talk at Centre for Civil Society this Thursday, January 12th at 3:30pm.  The title of the talk is “Free Banking in Scotland and Canada: Lessons for Today.”  Everyone is welcome to attend.  The venue will be at the CCS office, A-69 Hauz Khas, New Delhi, 110016.  Check out the announcement here: [http://ccs.in/ccsindia/lhwhite-talk.html](http://ccs.in/ccsindia/lhwhite-talk.html)

* * *

**About Andrew Humphries**

## Poverty Wager with Jeff Sachs

Original: https://www.spontaneousorder.in/p/poverty-wager-with-jeff-sachs

Author: Spontaneous Order

Published: 2012-01-02T14:33:00.000Z

Topics: economic-freedom, foreign-aid, poverty-alleviation

> Jeff Sachs believes that the best way to alleviate global poverty is through massive doses of foreign aid (The End of Poverty). Michael Strong in his book Be the Solution offers a wager to compare two sets of countries after 20 years (p 190): Sachs–The

**Summary:**

Parth Shah highlights a 'Poverty Wager' proposed by Michael Strong in *Be the Solution* to challenge Jeff Sachs' advocacy for massive government-to-government foreign aid as the path to ending poverty, as outlined in Sachs' *The End of Poverty*. Strong suggests comparing two sets of 20 countries after 20 years: those receiving the most foreign aid as a percentage of per capita GDP versus those with the greatest increases in economic freedom per the Fraser Economic Freedom Index. The wager aims to settle whether aid or economic freedom better alleviates poverty. Shah questions the need to wait 20 years, urging an immediate examination of data from 1990-2010 to reveal which approach has historically driven poverty reduction. This classical-liberal framing posits economic freedom—enabling choice, markets, and private initiative—as superior to top-down aid, which often fails to foster sustainable growth. By invoking existing data, Shah implies that evidence already favors freedom over aid in lifting nations out of poverty.

**Key points:**

- Jeff Sachs promotes massive foreign aid to eradicate global poverty.
- Michael Strong wagers that countries gaining most in economic freedom (Fraser Index) will outperform top aid recipients in poverty alleviation over 20 years.
- Parth Shah proposes analyzing 1990-2010 data immediately to compare the two approaches instead of waiting.

**By Parth Shah**

* * *

Jeff Sachs believes that the best way to alleviate global poverty is through massive doses of foreign aid *[(The End of Poverty](http://www.earth.columbia.edu/pages/endofpoverty/index)*). Michael Strong in his book *[Be the Solution](http://www.flowidealism.org/index-project.html)* offers a wager to compare two sets of countries after 20 years (p 190): Sachs–The 20 nations that have received the most government-to-government foreign aid as percentage of per capita GDP; Strong–The 20 nations that have experienced the greatest increases in economic freedom as measured by the Fraser Economic Freedom Index.

Compare these two sets of 20 nations 20 years from now and settle the debate whether foreign aid or economic freedom helps alleviate poverty.

Do we really have to wait for 20 years or could we just see the data from the last 20 years, 1990-2010?

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## University of Chicago to have the Vivekananda Chair, but what does Bengal get out of it?

Original: https://www.spontaneousorder.in/p/university-of-chicago-to-have-the-vivekananda-chair-but-what-does-bengal-get-out-of-it

Author: Spontaneous Order

Published: 2011-12-15T12:10:29.000Z

Topics: government-spending, higher-education, public-infrastructure, west-bengal

> Sisters and brothers of India, the centre government has set aside $1.5 million as an endowment grant for creating a chair at University of Chicago to mark the 150th birth anniversary celebrations of Swami Vivekananda. I have great admiration for the p...

**Summary:**

The Indian central government has allocated $1.5 million in taxpayer funds to endow a Vivekananda Chair at the University of Chicago to commemorate Swami Vivekananda's 150th birth anniversary, a decision the author admires for the monk's promotion of tolerance but questions amid West Bengal's dire needs. While acknowledging Vivekananda's historic 1893 speech in Chicago and the Ramakrishna Mission's commendable work from Belur Math, the author argues this foreign grant overlooks pressing local priorities: renovating crumbling universities in Bengal, which suffer political interference from communist-leaning faculty and lag on the National Knowledge Commission's call for 1,500 new universities by 2015 with curriculum reforms like credit systems. Even more urgently, the pothole-riddled roads from Howrah station to Belur Math—among the world's worst—impede pilgrims, students, pregnant women, and workers in Asia's largest scrap market at Liluah, exacerbating unemployment legacies from union conflicts under communist rule. From a classical-liberal lens, the author urges redirecting such funds to higher education reforms, road fixes, and traffic master plans to boost tourism, commuter welfare, and a 'Beautiful Bengal' akin to Bihar's transformations, rather than subsidizing foreign institutions.

**Key points:**

- Central government should prioritize $1.5 million taxpayer endowment for West Bengal's university renovations and infrastructure over a Vivekananda Chair at University of Chicago.
- Bengal universities face political interference, poor infrastructure, and failure to implement NKC's 1,500-university goal and credit systems.
- Howrah's dilapidated roads to Belur Math hinder pilgrims, students, and workers, stifling tourism and local economy.
- Redirect funds to road repairs and education reforms to enable 'Beautiful Bengal' growth like Bihar's model.

**By Manoj Mathew**

* * *

Sisters and brothers of India, the centre government has set aside $1.5 million as an endowment grant for [creating a chair at University of Chicago](http://www.hindustantimes.com/India-news/NewDelhi/Chicago-univ-to-have-Vivekananda-chair/Article1-782012.aspx) to mark the 150th birth anniversary celebrations of Swami Vivekananda.  I have great admiration for the philosopher monk who promoted universal tolerance and religious harmony, and I think the Manmohan Singh government has good reasons to establish the faculty post in an American university.  Many of us are aware of the order of the Ramakrishna Mission monks with their headquarters located in Belur Math in West Bengal and their incredible work through social service schemes is commendable.

I do also understand the significant link between the city of Chicago and Vivekananda, for his great speech at the World Parliament of Religions in 1893 was given there.  However, I wonder how governments decide on the ways to celebrate birth anniversaries of public personalities in India?

Many of my good Bengali friends and neighbours at Belur Math will have mixed reactions about the decision to make a large grant to a foreign university.  The primary grounds for contesting this grant will be the urgent need for renovation and rejuvenation of at least couple of universities in West Bengal.  In particular, most vice chancellors are aware of the National Knowledge Commission’s (NKC) ambitious recommendation to create 1,500 universities by 2015 and implement changes in the curriculum in various subjects including the introduction of the credit system.

The initiatives in innovation are alien to the thoughts of most universities in Bengal with poor infrastructure for teaching and research. My imagination goes to the reluctance of the centre government to develop a chair in a state university in Bengal as most of them continue to have political interference, especially through professors and lecturers who are imbued with the spirit of communism.

Sisters and brothers of India, the second reason for the indigestion of the news about the University of Chicago chair comes when I think about the pathetic roads from Howrah railway station leading to Ramakrishna temple, a place of international pilgrimage and architectural features overlooking the banks of the river Ganges.  The roads in Howrah, a 500 year old city adjoining to Kolkata, are among the world’s worst broken urban roads with an enormous number of potholes.  It is worse during the rains, causing water to accumulate on the roads and slowing traffic for daily commuters.  The most affected are the thousands of students who travel to school and the poor migrant workers who toil in the open yards of the iron and steel markets in Liluah, which happens to be the largest scrap market in Asia.

Howrah once had many metal and jute industries, but very few survived, with the workers union & employee conflict under the communist raj causing wide scale un-employment in the region. Once again my mind goes to imagining the plight of pregnant women and those with back aches and spinal injuries travelling on those roads.

I wish the endowment grant from the tax payers’ money to celebrate the noble man’s anniversary were to be used in higher education reforms or in fixing roads and developing a master plan for traffic improvement in Howrah.  Good roads would increase the flow of visitors from India and abroad visiting the beautiful, privately managed Ramakrishna Temple in Belur Math in comfort, which in turn will favour the state tourism industries who are currently gearing up to change the face of Bengal. Let us dream about changes toward a ‘Beautiful Bengal’ like the changes we hear about in Nitesh Kumar’s Bihar.

\-Manoj Mathew

* * *

**About Manoj Mathew**

## Bribery in Rajasthan

Original: https://www.spontaneousorder.in/p/bribery-in-rajasthan

Author: Spontaneous Order

Published: 2011-12-06T13:32:14.000Z

Topics: population-policy, government-coercion, reproductive-freedom, india

> Today I saw an absolutely appalling, but sadly all too familiar, story about sterilization in Rajasthan. The government there is bribing women with the chance to win prizes in drawings – from food processors to cars – if they undergo sterilization. Th

**Summary:**

Julie Gilstrap condemns the Rajasthan government's practice of bribing women with lottery prizes—from food processors to cars—for undergoing sterilization, describing it as an appalling and horrific intrusion into one of the most personal areas of people's lives. She argues this reflects flawed thinking about population, portraying people merely as consumers of resources rather than producers, and insists that India's population is its greatest asset. From a classical-liberal perspective, such coercive government policies undermine individual autonomy and fail to recognize the economic value of human capital. Gilstrap references her earlier, more detailed post on the topic and urges the Rajasthan government to urgently rethink its approach, emphasizing that India desperately needs the resource that is its people to thrive.

**Key points:**

- Rajasthan government offers women prizes like food processors and cars via lottery for undergoing sterilization.
- This policy represents a horrific government intrusion into personal reproductive decisions.
- People are producers of wealth, not just resource consumers, making India's large population its greatest asset.
- The government of Rajasthan should immediately reconsider and abandon this coercive sterilization incentive program.

**By Julie Gilstrap**

* * *

Today I saw an absolutely appalling, but sadly all too familiar, story about [sterilization in Rajasthan](http://www.aljazeera.com/news/asia/2011/12/20111264741922824.html).  The government there is bribing women with the chance to win prizes in drawings – from food processors to cars – if they undergo sterilization.  This is a horrific intrusion by the government into one of the most personal areas of people’s lives.

It also reveals flawed thinking about population.  People are producers, not just consumers of resources.  India’s population is it’s greatest asset.  I wrote about all of this in more depth some weeks ago.  For a more complete argument, see [that post](https://spontaneousorder.in/?p=1825).

I hope the government of Rajasthan will rethink its policy and do so soon.  India desperately needs the great resource that is its people.

* * *

**About Julie Gilstrap**

## Shoppers Over Middle Men

Original: https://www.spontaneousorder.in/p/shoppers-over-middle-men

Author: Spontaneous Order

Published: 2011-12-05T14:24:48.000Z

Topics: fdi-retail, consumer-welfare, economic-liberalization

> The Economist this week has a great piece on the current FDI debate. It’s worth a read, particularly because of how it explains that this legislation prioritses the needs of shoppers over those of middle men and shop keepers. That shouldn’t be forgott

**Summary:**

Julie Gilstrap praises a recent Economist article on India's FDI debate in retail, emphasizing that the proposed legislation rightly prioritizes the needs of shoppers over those of middlemen and shopkeepers—a key classical-liberal point often overlooked. Amidst the political furore, the post argues that critics fail to recognize the substantial benefits FDI could deliver to millions of Indian consumers, particularly the poorest, through greater access to goods, lower prices, and improved supply chains. This aligns with a market-oriented perspective that champions consumer welfare against entrenched interests of intermediaries, urging policymakers to focus on these gains rather than protectionist concerns. The Economist's coverage is highlighted as a valuable reminder of these consumer-centric advantages in the ongoing debate.

**Key points:**

- India's FDI retail legislation prioritizes shoppers' needs over middlemen and shopkeepers.
- FDI promises major benefits to millions of Indian consumers, especially the poorest.
- The current debate overlooks consumer gains amid political furore.
- The Economist effectively spotlights the pro-shopper rationale for FDI.

**By Julie Gilstrap**

* * *

The Economist this week has a [great piece](http://www.economist.com/node/21541024?story_id=21541024&fsrc=sky|ISeb) on the current FDI debate.  It’s worth a read, particularly because of how it explains that this legislation prioritses the needs of shoppers over those of middle men and shop keepers.  That shouldn’t be forgotten.  Amidst the furore, no one seems to be considering the great benefit to millions of Indian consumers, particularly the poorest, that FDI could bring.  Good to see The Economist highlighting the issue.

* * *

**About Julie Gilstrap**

## Cash Transfers for Food

Original: https://www.spontaneousorder.in/p/cash-transfers-for-food

Author: Spontaneous Order

Published: 2011-11-24T13:43:53.000Z

Topics: cash-transfers, food-security, public-distribution-system, welfare-reform

> The Draft Food Security Bill is up for a vote and there is an interesting debate raging about certain provisions, particularly those related to cash transfers. Should the government directly provide food to the poor through the public distribution syst...

**Summary:**

The author advocates for the cash transfer provisions in India's Draft Food Security Bill, arguing they represent a superior alternative to the inefficient Public Distribution System (PDS). The PDS is criticized as multi-layered, bureaucratic, corrupt, and wasteful, with food often disappearing, spoiling en route due to weak incentives, or failing to match recipients' preferences. Cash transfers streamline the process: farmers sell through existing market channels, bypassing government intermediaries, while aid goes directly to the poor for market purchases. Key advantages include reduced bureaucracy, as cash avoids complex logistics; no spoilage risk, leveraging private sector efficiencies in transport and storage that ensure fresh food reaches consumers; and empowerment of recipients, who gain choice over food types, quantities, and prices, fostering personal agency akin to market shopping. Though imperfect, cash transfers benefit recipients, farmers, and taxpayers by cutting costs and waste, marking a classical-liberal step toward market-oriented welfare that prioritizes efficiency, choice, and minimal government interference. The bill's success on this front is worth supporting.

**Key points:**

- Replace the corrupt and wasteful PDS with cash transfers to simplify distribution and let farmers use market channels.
- Cash transfers eliminate spoilage and infrastructure costs, relying on private incentives for efficient food handling.
- Empower welfare recipients with cash to choose their preferred foods and shop for better prices.
- Support the Draft Food Security Bill's cash transfer shift as a net gain for poor people, farmers, and taxpayers.

**By Julie Gilstrap**

* * *

The Draft Food Security Bill is up for a vote and there is an [interesting debate](http://www.thehindu.com/news/national/article2654082.ece) raging about certain provisions, particularly those related to cash transfers.  Should the government directly provide food to the poor through the public distribution system?  Or should they provide cash which the poor can then use to buy food themselves in the market?

The current system operates in the first way, with people given a particular ration allocation.  The government buys food from farmers and redistributes it to poor, hungry people.  The Draft Food Security Bill would change that, shifting toward cash transfers, which could be used by the poor to buy whatever mix of food they want at local markets.  Is this a good change?  What are the implications?

The public distribution system is a mess.  It is multi-layered and bureaucratic, going from the farmer through multiple intermediaries before finally making its way to individuals and households.  There is corruption.  Sometimes food doesn’t get to the right people, mysteriously disappearing along the way.  Sometimes it spoils en route; after all, it’s been paid for already, so who has a very strong incentive to get it to people before it goes bad?  I have no idea whether the food that people get is the food they really want.  They certainly have little choice in the matter.  Overall, the system sort-of works, but poorly, and leaves much to be desired.

So would cash transfers help?  Yes, they would.  Of course, like any system, they’re not perfect, but they have some real advantages over the current system and should therefore be encouraged.

1.  Cash transfers are less bureaucratic.  In a cash transfer system, rather than moving food from the farmer, through multiple layers of government, to distribution houses, and then finally to people, farmers sell through the same channels that they are already using to get their goods to market.  Cash transfers (or coupons) go directly to people in need of assistance and they can then use them to buy food in the market, just like everyone else.  It’s simpler for farmers and for the government.
    
2.  Cash doesn’t spoil.  Food distribution systems, like the PDS, require lots of infrastructure.  Food has to be collected, transported, stored, and distributed.  In the case of the PDS, the government has to find a way to do all that.  Systems of transport and storage, particularly for items that need to be kept cool, are complicated and expensive.  When the systems don’t work, food goes bad before it ever gets to poor people.  In this way, there is tremendous waste.  But move to cash, and the government no longer has to worry about any of that.  The government deals only in cash, which doesn’t spoil, and farmers and food distributors are left to take care of preventing spoilage.  They have lots of incentive to do that, because customers won’t buy rotten food, so they’re likely to be much more efficient in developing and operating those systems.  That’s why all of us who buy milk every day know it will get to us without going bad.  And since the government doesn’t have to worry about trucks and trains and refrigerators, a cash transfer system is cheaper for the government to operate, too.
    
3.  Cash empowers the recipients.  Rather than giving the government control over how much and what kind of food people receive, cash allows them to make choices for themselves.  You want rice instead of flour?  OK.  You’d rather have eggplant than cauliflower?  Fine.  You prefer curd to milk?  No problem.  Cash allows people to make choices.  They can shop around to find better prices, just like you and I do.  They can buy the food they want.  They can take advantage of a great price on apples.  Cash gives people more control over their own lives, down to the details of what food they eat.
    

The Draft Food Security Bill isn’t perfect, but cash transfers are a significant step forward – for recipients, for farmers, and for taxpayers.  For this reason alone, it is worth hoping that the bill is a success.

* * *

**About Julie Gilstrap**

## Draft Food Security Bill

Original: https://www.spontaneousorder.in/p/draft-food-security-bill

Author: Spontaneous Order

Published: 2011-11-22T16:15:03.000Z

Topics: food-security, poverty-alleviation, economic-liberalization, license-raj

> The current issue of Outlook Business has a good piece by PT Sebastian on the Draft Food Security Bill. The piece highlights several of the major problems with the legislation and rightly assesses the draft bill’s weaknesses. However, it is too cautio..

**Summary:**

The Draft Food Security Bill, while aiming to identify the poor and distribute food efficiently, fails to address the root cause of hunger—poverty itself—according to Julie Gilstrap. Instead of temporary measures like computerizing the public distribution system, increasing transparency, or shifting to cash transfers, the bill should prioritize wealth creation to eliminate poverty long-term. Gilstrap critiques the bill's issues, such as poor identification of beneficiaries, corruption risks, inefficient multi-layered distribution, and illogical poverty definitions, echoing concerns from PT Sebastian's Outlook Business article but rejecting its cautious endorsement as a 'big leap' toward feeding India's growing population. From a classical-liberal viewpoint, true solutions lie in dismantling the license raj, removing government barriers to micro-businesses, legalizing and enabling growth for street vendors and cycle rickshaw pullers, and reforming regulations to allow businesses to expand and employ more. Government programs like this one, with noble intent, typically yield chequered results without structural changes fostering economic freedom and livelihoods. The bill's reforms are mere band-aids; lasting hunger relief demands promoting prosperity so the poor can support themselves.

**Key points:**

- The Draft Food Security Bill treats poverty's symptoms through food distribution rather than curing it via wealth creation.
- Dismantle the license raj and regulatory barriers to enable micro-businesses, street vendors, and rickshaw pullers to grow and employ others.
- Cash transfers and computerization in the bill offer some improvements but remain temporary fixes with risks of corruption and inefficiency.
- Government programs consistently deliver chequered results unless paired with structural reforms for economic freedom.

**By Julie Gilstrap**

* * *

The current issue of Outlook Business has a good [piece by PT Sebastian on the Draft Food Security Bill](http://business.outlookindia.com/article.aspx?278896).  The piece highlights several of the major problems with the legislation and rightly assesses the draft bill’s weaknesses.  However, it is too cautious in its proposed solutions.

The article lists several fundamental problems with the legislation – identification of the poor, opportunity for corruption, multi-layered and inefficient distribution systems, and illogical definitions of poverty – but still calls the draft bill a “big leap toward providing succour to the country’s poor.”  It calls for an improved bill with greater responsibility on the part of the Centre so that India’s growing population is well fed.  I have a different proposal.

The Draft Food Security Bill is all about identifying the poor, and presumably hungry, and efficiently distributing food to them.  The aim there is clearly good.  Who doesn’t want hungry people to have food?  But what about the more fundamental question of why so many are so poor in the first place?  Why do millions depend on the government to meet even their basic food needs?  Feeding poor people is fine, but it doesn’t keep them from being hungry again tomorrow.  Addressing the root causes can help us eliminate hunger altogether, rather than simply putting it off for a day.

The problem is poverty, and the opposite of poverty is wealth, so what we ought to be considering is how to promote wealth creation.  How do we make it easier for poor people to earn a livelihood and support their families?  How do we remove government barriers and dismantle the license raj so that more people can start micro-businesses?  How do we make it easier for street vendors to trade legally and grow their businesses?  How do we change the current system that prevents cycle rickshaw pullers from ever growing beyond a single cycle rickshaw?  How do we change the regulatory environment so that bigger businesses can expand and employ more people?  How do we ensure that the poor aren’t condemned to stay that way?

The Draft Food Security Bill proposes some good things, as the Outlook Business piece makes clear.  It seeks to increase transparency and accountability, tries to make the public distribution system less susceptible to corruption by computerizing it, and proposes cash transfers rather than food entitlements so that the poor are given more control over what they receive.  All of these are good as far as they go.  But they won’t help us to get rid of hunger and poverty.  They should be seen as the temporary band-aids that they are, not as a real solution..

It seems to me that the problems of the Draft Food Security Bill are all problems common to government programmes.  The article speaks of “noble intent ending with chequered results” and that is precisely what I anticipate for this programme.  Unless the government addresses the fundamental causes of poverty and takes steps to bring about the long-term structural changes that will allow for greater wealth creation, then there will be little change in the prospects for India’s poorest.

* * *

**About Julie Gilstrap**

## Purna Swaraj

Original: https://www.spontaneousorder.in/p/purna-swaraj

Author: Spontaneous Order

Published: 2011-11-16T15:55:45.000Z

Topics: purna-swaraj, economic-freedom, license-raj, government-overreach

> I recently read, for the first time, the Declaration of Purna Swaraj. I was impressed, but I was also surprised. The ideals expressed in Lahore in 1929 seem a world away from the reality of India today. The Declaration of Puma Swaraj is a strong, clea...

**Summary:**

Julie Gilstrap praises the 1929 Declaration of Purna Swaraj from Lahore for its bold assertion of Indians' inalienable rights to freedom, the fruits of their toil, and opportunities for growth, while condemning British exploitation through unfair taxation, destruction of village industries, currency manipulation, trade barriers, poor education, and disempowerment. She highlights its confident tone, emphasizing self-reliance through toil rather than entitlements, and its plan for peaceful civil disobedience to achieve complete independence. Contrasting this with 2011 India, Gilstrap notes that while British rule ended, similar grievances persist due to a corrupt domestic 'license raj' that hinders livelihoods. From a classical-liberal viewpoint, she argues India already has democratic mechanisms for change, but the government must recommit to Purna Swaraj's principles by prioritizing freedom for all—from businessmen to street vendors—and removing interference in citizens' lives to enable work and enjoyment of labor's rewards.

**Key points:**

- The Declaration of Purna Swaraj asserts Indians' rights to freedom, fruits of toil, and growth opportunities, justifying severance from exploitative British rule.
- British policies ruined India's economy, villages, trade, education, and spirit; today's license raj replicates these domestic harms.
- India needs no new struggle but government action to minimize interference and maximize individual freedom in earning livelihoods.

**By Julie Gilstrap**

* * *

I recently read, for the first time, the Declaration of Purna Swaraj.  I was impressed, but I was also surprised.  The ideals expressed in Lahore in 1929 seem a world away from the reality of India today.

The Declaration of Puma Swaraj is a strong, clear document.  It boldly articulates the grievances of the Indian people against the British, as well as a different way forward for an independent India.  It outlines abuses and prioritises freedom.  When I read it, I feel inspired.  Several sections particularly jump out at me.  The opening paragraph reads:

We believe that it is the inalienable right of the Indian people, as of any other people, to have freedom and to enjoy the fruits of their toil and have the necessities of life, so that they may have full opportunities of growth. We believe also that if any government deprives a people of these rights and oppresses them, the people have a further right to alter it or to abolish it. The British government in India has not only deprived the Indian people of their freedom but has based itself on the exploitation of the masses, and has ruined India economically, politically, culturally, and spiritually. We believe, therefore, that India must sever the British connection and attain Purna Swaraj, or complete independence.

It goes on to highlight unfair taxation, the death of village industry, currency manipulation and trade barriers, diminished international reputation, problems in education, and general disempowerment of the people as reasons that all ties with Britian must be severed.  It lays out a determined plan of peaceful civil obedience to bring about that end.

There are lots of things I like about this document, but here is the biggest thing.  Rather than complaining pathetically about how mean the British are, this document sounds confident and determined.  I hear in its words a people who are sure of who they are and the rights that they therefore hold.  They assert rights to the fruits of their toil, implying that there will indeed be toil.  They talk about opportunities of growth, not entitlements to wealth.  They hold strongly to the ideal of freedom and its importance for all people.  Their central complaints against the British are that they have been denied freedom and the right to earn a livelihood.

Eighty years later, in the India of 2011, the British are long gone, but people still fight for the right to earn a livelihood.  It is not a colonial power, but a horrendously corrupt system and license raj that makes it difficult for people to toil and enjoy the fruits of that toil.  Many of the problems outlined in the Declaration of Purna Swaraj are still around in one form or another, though now they are caused by the actions of a domestic, rather than a foreign, power.

We do not need another declaration or another freedom struggle.  India has a democratic system in place that allows for the changes that are necessary.  But the government would do well to remember the principles of Purna Swaraj.  India should be a free country full of free people.  Everyone, from wildly successful businessmen to street vendors and rickshaw pullers, should be free to work and enjoy the fruits of his labour.  The government should make freedom its central goal and do all it can to remove itself from interference in the lives of its citizens.

* * *

**About Julie Gilstrap**

## Children’s Day

Original: https://www.spontaneousorder.in/p/childrens-day

Author: Spontaneous Order

Published: 2011-11-15T15:43:22.000Z

Topics: education, school-choice, right-to-education, parental-empowerment

> Yesterday was Children’s Day and, to mark the occasion, one group in Delhi organized a protest demanding better implementation of the Right to Education (RTE) Act. They came with a list of demands – clean drinking water, cleaner toilets, tables and ch

**Summary:**

On Children’s Day, a Delhi group protested for better implementation of the Right to Education (RTE) Act, demanding clean drinking water, cleaner toilets, tables and chairs, more teachers, and activation of School Management Committees (SMCs) to give parents greater say in education. The author highlights that private schools—both expensive and budget—already empower parents, who demand similar improvements and express satisfaction without protesting, unlike government school parents. Government schools hold accountability to bureaucrats and politicians rather than parents and students, the primary stakeholders, forcing protests as their only voice. RTE’s SMCs are a positive but partial reform, involving some parents while retaining government control. Full school choice surpasses this by engaging all parents, making schools responsive to each child’s needs, and placing control with families. From a classical-liberal viewpoint, empowering parents through choice is essential for the educational improvements protesters and the nation seek.

**Key points:**

- Private schools satisfy parents more than government schools, resulting in no protests from their users.
- Government schools prioritize bureaucratic and political accountability over parents and students.
- RTE’s School Management Committees are a good but limited step toward parental involvement.
- School choice fully empowers all parents, enhances responsiveness to individual children, and shifts control from government to families.

**By Julie Gilstrap**

* * *

Yesterday was Children’s Day and, to mark the occasion, one group in Delhi organized a [protest](http://www.thehindu.com/todays-paper/tp-national/tp-newdelhi/article2628532.ece) demanding better implementation of the Right to Education (RTE) Act.  They came with a list of demands – clean drinking water, cleaner toilets, tables and chairs, more teachers – and asked the government to set up the School Management Committees prescribed by the act to ensure parents had greater say in their kids’ education.

As I read about the protest, I found myself thinking about private schools.  In private schools, whether expensive or budget, parents DO have a greater say in their kids’ educations.  Often they demand those things that the protesters wanted, though sometimes they prioritise others.  But the big thing is that neither children in private schools, nor their parents, tend to protest, and that is because they’re far happier with the educations being provided by their private schools than are the parents of government school pupils with the educations being provided to them.

Government schools are answerable for their performance to bureaucrats and politicians, but not really to parents and students.  This leaves protest as the only avenue for those parents and pupils – the most important stakeholders in the equation – to make their voices heard.  They’re shunted off to the sidelines rather than being right in the middle of everything.  This can’t possibly be the right way round!

Of course, it’s not.  Even the RTE acknowledges that.  That’s why the Act calls for School Management Committees (SMCs) that involve parents in management of schools.  And this is a good step.  Establishing avenues for parents to have their voices heard and making those central is a positive thing.  However, it is still only a partial answer.

SMCs will never be able to accomplish what choice can.  SMCs involve some parents, but choice involves all of them.  SMCs help to ensure that schools better meet the needs of more children, but parental choice makes schools more responsive to each individual child.  SMCs bring parents in, but still leave most of the control in the hands of governments.  School choice puts most of the control in the hands of parents.

So, as I think about Children’s Day, and think about what is best for the children I hear playing outside my window and their counterparts across the country, I am convinced that only through increasing school choice and empowering parents will we ever really see the kinds of improvements in education that yesterday’s protesters, and indeed all of us, so desperately desire.

* * *

**About Julie Gilstrap**

## National Education Day

Original: https://www.spontaneousorder.in/p/national-education-day

Author: Spontaneous Order

Published: 2011-11-11T15:53:32.000Z

Topics: rte-act, school-vouchers, parental-choice, education-outcomes

> Today is National Education Day, and it seems only fitting to think a bit about the Right to Education (RTE) Act, its promises, and areas for improvement. The Right To Education is supposed to be about education and access. According to the Act, all 6-...

**Summary:**

The Right to Education (RTE) Act aims to provide all 6-14 year olds with government-funded quality education meeting uniform standards on inputs like class sizes, infrastructure, teacher qualifications, curriculum, and 25% reservation in private schools for the poorest children. However, from a classical-liberal view, this input-focused approach misses the mark since education is about outcomes—children mastering math, reading, writing, English, science, history, and life skills for employment or further education. Children vary in learning styles, abilities, and needs, so uniform inputs produce uneven results. Instead, RTE should prioritize outcomes and empower parents to select suitable inputs. India's vibrant private sector offers diverse options—day, boarding, international, religious, budget, Montessori, Waldorf-Steiner schools in multiple languages—accessible to the wealthy but not the poor. School vouchers would remedy this: government issues per-child vouchers redeemable at any school, funding staying public while enabling choice. The existing 25% reservation could shift to vouchers, giving poor parents control while ensuring equity. Celebrating National Education Day, vouchers promise better outcomes by leveraging parental choice and competition.

**Key points:**

- RTE Act prioritizes uniform inputs like infrastructure and teacher qualifications over measurable learning outcomes.
- Children's diverse learning needs make input standardization ineffective for achieving uniform high outcomes.
- School vouchers enable poor parents to choose from India's diverse private schools using government funding.
- Implement RTE's 25% private school reservation via vouchers to empower parental decision-making.
- Focus on outcomes and parental choice will raise education standards for all Indian children.

**By Julie Gilstrap**

* * *

Today is National Education Day, and it seems only fitting to think a bit about the Right to Education (RTE) Act, its promises, and areas for improvement.

The Right To Education is supposed to be about education and access.  According to the Act, all 6-14 year olds should have access to a quality education, paid for by the government, that meets certain government-mandated standards.  The Act focuses on ensuring that what is offered to all children is equal in terms of maximum class sizes and minimum infrastructure requirements, the qualifications and training of teachers, curriculum guidelines and places in private schools reserved for the poorest children.  Since all kids deserve quality education, the Act tries to ensure that all kids receive the same standard package of inputs.

But stop and think about this for a minute.  We are talking about education, which is really all about outcomes.  It’s no good if a teacher just tells her students that 2+2=4 (that’s an input); the child needs to actually know that fact, understand what it means, and be able to apply the same principle to 3+4 or 7+1.  Children need to leave school able to do math, read and write, speak English, understand basic science, and have some sense of history.  And ultimately, they need the tools to get on in life – whether through finding employment, getting into college, or raising their own children.  All of these are outcomes.

The RTE is well intentioned, but its focus is in the wrong place.  It should look more at outcomes and leave the question of how those are achieved to schools and parents.  Teachers have lots of different ways of teaching.  Different methods will work better for some kids than for others.  Some students will speed through reading but need a lot of help with maths.  Some kids will pick up maths without any effort at all, but will struggle to learn history.  Any parent of more than one child will understand what I am talking about.  Kids are all different.  They require different types of discipline, they have different natural abilities, and they learn in different ways.

Why the focus on inputs, then?  Uniform inputs applied to a wide diversity of children will yield very mixed outcomes.  However, if we focus on outcomes, and empower parents to make decisions about which inputs best suit their children, then we have a real shot of raising standards for all kids.

This is where vouchers could play an extremely helpful role, within the RTE, in bringing about the improved education we all want.  India already has one of the world’s most diverse, vibrant private school sectors.  There are countless options available: day schools, boarding schools, international schools, religious schools, and budget private schools.  There are Montessori and Waldorf-Steiner schools.  There are schools offering education in numerous different languages.  The options seem nearly endless.  And, of course, there are also government schools.

For the wealthy, there is no shortage of choice.  For poorer families, however, choice is more limited.  Vouchers help to address this inequality.   The concept is simple.  Rather than directing families to particular schools, the government simply gives each family vouchers, one per child, which can be used to pay the fees of any school.  The family takes the voucher to the school to pay the fees, and the school then exchanges that voucher for cash from the government.  It leaves responsibility for funding education with the government, but allows more diverse modes of delivery.  Even poor parents would suddenly have myriad educational choices available to them.

The RTE already has the 25% reservation, which could easily be implemented through a voucher system.  This would give poor parents more say in their children’s education, empowering them to make the choices that are best for their individual children.  But they would also preserve equity through ensuring that taxpayer funding was available for all.

Everyone agrees that we want good outcomes for all students.  We want them to read and write well, to be able to do math, and to have the skills that will make it possible for them to earn a livelihood.  That can best be achieved by empowering parents.  As we celebrate National Education Day, let us hope that vouchers can be used to increase the choices and quality of education available to all of India’s children.

Read more about Right To Education: [https://spontaneousorder.in/right-to-education-vs-right-to-educate/](https://spontaneousorder.in/right-to-education-vs-right-to-educate/)

* * *

**About Julie Gilstrap**

## Liberty Legends Lost

Original: https://www.spontaneousorder.in/p/liberty-legends-lost

Author: Spontaneous Order

Published: 2011-11-03T10:18:53.000Z

Topics: liberty-advocates, think-tanks

> Two great champions of liberty died last week. Both were men of principle who spent their lives tirelessly promoting the ideas in which they believed. Their countries are freer, more prosperous places, because of their work. In the words of men who kn...

**Summary:**

This brief post announces the deaths of two champions of liberty, Roger Kerr (executive director of the New Zealand Business Roundtable) and Bill Niskanen (Chairman of the Cato Institute), stating that their principled promotion of liberty made their countries freer and more prosperous. It links to tributes from those who knew them but provides no further details or arguments.

**Key points:**

- Roger Kerr and Bill Niskanen, key figures in promoting liberty, died last week.

**By Julie Gilstrap**

* * *

Two great champions of liberty died last week.  Both were men of principle who spent their lives tirelessly promoting the ideas in which they believed.  Their countries are freer, more prosperous places, because of their work.

In the words of men who knew them, here are fitting tributes to [Roger Kerr](http://www.nzbr.org.nz/shop/Library+by+type/Articles/Roger+Kerr+1945-2011+An+Appreciation/x_show_article/1.html), executive director of the New Zealand Business Roundtable, and [Bill Niskanen](http://www.cato.org/pub_display.php?pub_id=13814), Chairman of the Cato Institute.

* * *

**About Julie Gilstrap**

## Farmer Suicides

Original: https://www.spontaneousorder.in/p/farmer-suicides

Author: Spontaneous Order

Published: 2011-10-31T16:54:31.000Z

Topics: farmer-suicides, agricultural-regulation, government-intervention, rural-development

> On Thursday, the National Crime Records Bureau released its report, Accidental Deaths and Suicides in India 2010. Domestically, the headline was that, for the second year in a row, Bangalore was India’s suicide capital, while internationally, the stati.

**Summary:**

The 2010 NCRB report revealed India's suicide rate at 11.4 per 100,000 people—up from 10.9 in 2009 and translating to 15 suicides per hour—placing the country in the low 40s internationally, higher than some Western nations but not the worst. Most striking were the 15,964 farmer suicides, highlighting desperation in the sector. The author, from a classical-liberal perspective, attributes this to government over-regulation of domestic agriculture trade and interventions in labor, land, and credit markets, as detailed in a 2008 World Bank report. These policies raise costs, increase price risks, undermine competitiveness, and constrain rural non-farm growth, trapping farmers in economic hardship, debt, and hopelessness. Well-intentioned but misguided regulations stifle livelihoods, affecting ordinary Indians focused on daily life. The conclusion urges the government to scrap these over-regulations and interventions, freeing farmers to prosper, reducing despair, and addressing the suicide tragedy through market-friendly policies that prioritize individual freedom over state control.

**Key points:**

- India's 2010 suicide rate rose to 11.4 per 100,000, with 15,964 farmer suicides amid an overall rate of 15 per hour.
- World Bank report blames over-regulation of agriculture trade and government interventions in labor, land, and credit markets for hindering rural growth and competitiveness.
- Government policies contribute to farmers' economic hopelessness by increasing costs and risks, leading to suicides.
- Scrap over-regulations and interventions to enable agricultural prosperity and reduce suicide rates.

**By Julie Gilstrap**

* * *

On Thursday, the National Crime Records Bureau released its report, [Accidental Deaths and Suicides in India 2010](http://ncrb.nic.in/ADSI2010/ADSI2010-full-report.pdf).  Domestically, the headline was that, for the second year in a row, [Bangalore was India’s suicide capital](http://www.thehindu.com/news/cities/Bangalore/article2579335.ece), while internationally, the statistic picked up and reported was a rate of [15 suicides per hour](http://www.foxnews.com/health/2011/10/28/15-people-commit-suicide-every-hour-in-india-govt-report-says/) across the country as a whole.  Either way, the report was disturbing.

It was the 15 per hour that got my attention and prompted me to start digging.  One must always be a little bit careful with these sorts of statistics when it comes to India because of the size of the population.  Yes, 15 an hour is 15 too many, but how does it compare to other countries?  Is the rate a lot higher than everywhere else?

The answer is no.  India ranks somewhere in the low 40s in suicide rate internationally – still in the top half, so way too high, but with lower rates than many countries in Western Europe, the US, Japan, and Australia.  What is most worrying is that, after levelling off and then even dipping slightly in the early 2000s, the rate is now increasing again – from 10.9/1,00,000 in 2009 to 11.4/1,00,000 in 2010.  Why is that?

One of the groups with the highest numbers of suicides is farmers.  When you look at the statistics, the 15,964 farmers who committed suicide last year really jump out at you.  Indeed, the international coverage in particular draws out that figure.  And, of course, farmer suicides are something we have all heard about in the press.  Why are farmers resorting to suicide in such large numbers?  Clearly there is something wrong with that sector that makes farmers feel so completely hopeless.

In a 2008 [report](http://go.worldbank.org/8EFXZBL3Y0), the World Bank cited over-regulation of domestic agriculture trade and government interventions in labour, land, and credit markets as two of the primary problems plaguing Indian agriculture and rural development.  It argued that “…over-regulation of domestic trade has increased costs, price risks and uncertainty, undermining the sector’s competitiveness” and that “More rapid growth of the rural non-farm sector is constrained by government interventions in factor markets — labor, land, and credit — and in output markets…”

If the World Bank is right and government policy is making growth in the farming sector more difficult, then is that government policy significantly contributing to this huge number of farmer suicides?  If the hopelessness that farmers are suffering is due to an inability to support themselves and their families, pay off loans, and keep their businesses afloat, then surely government policies that make growth more difficult have to be a factor in the economic hardships that farmers face and that lead so many to see suicide as the only way out.

This is why policy matters – because it ends up affecting the real lives of real people.  Most farmers, indeed most Indians of any profession, are not hugely involved in politics or the details of public policy.  Most people are not interested in what bill is going through parliament or the latest set of regulations from the Ministry of Agriculture.  They just want to get on with living their lives, doing their jobs, and raising their families.  But public policy and government regulations affect everyone’s ability to do those things, and when the government gets those policies and regulations wrong, the consequences can be devastating, as they have been for so many farmers, their families, and whole communities.

No doubt the government’s policies have been well-intentioned.  No one set out to make the lives of farmers more difficult.  However, a stifling of the sector and increased difficulty for farmers have been the results.  The government should recognise that and change their policies, scrapping the over-regulation and interventions that so severely limit farmers’ freedom in the area of their livelihoods.  In doing so, they could increase prosperity, decrease hopelessness, and perhaps begin to address the tragedy that is India’s suicide rate.

* * *

**About Julie Gilstrap**

## Export Experts

Original: https://www.spontaneousorder.in/p/1836-2

Author: Spontaneous Order

Published: 2011-10-18T16:33:37.000Z

Topics: free-trade, exports, trade-policy, government-intervention

> In a short, two paragraph piece yesterday, Supporting the Export Effort, The Hindu briefly outlined the government’s new incentive package for exporters. I think it missed the mark. First, the article said, “The intention clearly is to dovetail the in

**Summary:**

Julie Gilstrap critiques a Hindu editorial praising the Indian government's new export incentive package for promoting diversification into non-traditional markets like Latin America, Africa, and the Commonwealth of Independent States. She argues that the government's policy of aggressively encouraging such diversification has been in place for years without notable effect until now, when US and European markets—accounting for about 35% of India's exports—are facing economic slowdowns. This shift is not driven by government incentives but by natural market forces: declining demand in traditional markets and rising demand elsewhere prompts producers to redirect supply logically, without bureaucratic coordination. Gilstrap highlights the beauty of free market economics, where consumers' demand signals guide entrepreneurs efficiently. She concludes that to truly boost exports and growth, the government should reduce all trade barriers and leave decisions to exporting experts—businessmen who build businesses, employ people, and drive the economy—rather than bureaucrats crafting detailed policies. Well-intentioned interventions are unnecessary and counterproductive; producers will thrive by responding to real demand wherever it arises.

**Key points:**

- India's export diversification policy has existed for years but only now coincides with market shifts away from stagnant US and European markets (35% of exports).
- Producers naturally redirect goods to growing markets like Latin America and Africa due to demand changes, not government incentives.
- Free markets efficiently allocate resources via consumer signals without needing coordinated government plans.
- Government should cut trade barriers and let exporters decide markets to maximize growth and employment.

**By Julie Gilstrap**

* * *

In a short, two paragraph piece yesterday, [Supporting the Export Effort](http://www.thehindu.com/opinion/editorial/article2546624.ece), The Hindu briefly outlined the government’s new incentive package for exporters.  I think it missed the mark.

First, the article said,

“The intention clearly is to dovetail the ingredients of this package with the broader thrust of the foreign trade policy, which seeks to reward exporters who move into newer markets in Latin America, Africa, and the Commonwealth of Independent States…  For many years now, the government’s trade policy has aggressively promoted the diversification of India’s exports to non-traditional markets and products.”

and then it continued,

“India’s traditional export markets — the United States and Europe — which account for about 35 per cent of the total, are facing uncertain times and virtually flat economic growth. Since Indian exporters would be hard pressed to sustain their volumes in these markets, let alone increase them, their initiatives to get into the non-traditional markets make good sense.”

So wait.  Let me get this straight.  India exports a lot to the US and Europe.  This is despite the fact that, for years, the government’s policy has aggressively promoted diversification in terms of the markets to which Indian producers export.  But now, all of a sudden, those traditional markets are drying up, so government incentives to move into other markets are proving to be a great idea.

Really?  It seems to me that, if The Hindu is correct about the effects of economic hardship on US and European markets, then producers will indeed be likely to shift to Latin American and African markets.  But that won’t primarily be driven by government policy.  After all, the policy of encouraging diversification, according to The Hindu, has been in place for years.  No, the thing that has changed is the economic climate in those markets.  Demand has shifted.  America and Europe aren’t buying, but Latin America and Africa are, so that’s where producers are starting to direct their supply.  It’s a logical move, and one that any decent businessman would figure out on his own without the need for any help from the government.

Yes, if The Hindu is right about about changes in Indian export markets, it seems to me that the shift is likely being driven not by anything the government is doing but by changes in demand in those markets.  This is the beauty of free market economics.  Without any need for grand government plans or lots of organized coordination, consumers send signals and producers direct goods to where they’re demanded.  That’s why a government policy that has been in place for years seems to just now be having some effect.  It’s because it’s not actually the policy that’s causing the change; it’s the market.

If the government really wants to increase exports and grow the economy, then they should reduce all barriers to trade and let producers export where they will.  Producers are good at figuring out where there is demand for their products and directing them to those areas.  They’re certainly much better at it than is any government bureaucrat trying to set detailed trade policy.  If America and Europe really aren’t the best markets anymore, than producers will sell elsewhere, and if America and Europe surprise us all and keep buying, then producers will continue to sell there.  Either way, good businessmen – the same people who build businesses and employ people and drive economic growth in India – will continue to produce and sell and keep India thriving.  Leave them alone and they’ll do the work.

There’s no doubt in my mind that the government is well intentioned in this area.  They want a strong economy and the benefits that exports bring.  I do, too.  But the best way to achieve that is by leaving it up to the experts, and in this case, the experts are the ones who actually do the exporting.

* * *

**About Julie Gilstrap**

## Banking Frustration

Original: https://www.spontaneousorder.in/p/banking-frustration

Author: Spontaneous Order

Published: 2011-10-14T12:34:57.000Z

Topics: banking-regulation, free-markets, rbi-policies, bureaucracy

> Over the past few weeks, I have experienced frustration in the extreme as I have tried to open a bank account. You would think that it would be fairly straightforward. I am a foreign national, but I am employed by an Indian organisation, being paid re...

**Summary:**

Julie Gilstrap, a foreign national employed by an Indian organization and paid in rupees in Delhi, has spent two months unsuccessfully trying to open a basic bank account at HDFC to deposit salary cheques and pay rent. Despite extensive paperwork—including residency verification, employment proof, salary verification, passport copies, and visa—the main barrier is unresponsive staff, exemplified by a 'relationship manager' who stopped returning calls and failed to progress the account after initial assurances. She attributes this to Reserve Bank of India regulations under the Foreign Exchange Management (Deposit) Regulations, 2000, which impose detailed rules on accounts for foreigners, limiting banks' flexibility in assessing risks and offering services. This regulatory uniformity across banks reduces competition, as no bank offers superior foreigner-friendly accounts, diminishing incentives for customer service. From a classical-liberal viewpoint, government overreach hampers bankers' expertise; deregulation would allow free markets to foster responsiveness, enabling easier switching between banks and better service for customers like her, benefiting everyone except bureaucrats.

**Key points:**

- Heavy RBI regulations under Foreign Exchange Management (Deposit) Regulations, 2000 create uniform barriers for foreigners opening bank accounts, stifling competition.
- Unresponsive bank staff at HDFC exploit regulatory red tape, knowing customers like employed foreign nationals have few alternatives.
- Banks should assess risks independently without government dictates to improve service and innovation in financial products for foreigners.
- Deregulating banking would incentivize customer responsiveness through market competition, benefiting banks and clients alike.

**By Julie Gilstrap**

* * *

Over the past few weeks, I have experienced frustration in the extreme as I have tried to open a bank account.  You would think that it would be fairly straightforward.  I am a foreign national, but I am employed by an Indian organisation, being paid regularly in rupees, living in Delhi.  I need a bank account so that I can receive my salary and pay my rent, just like everyone else.  I am not looking for anything fancy, and I am not (sadly) even talking about large sums of money.  I just need a basic bank account.

It has now been two months, and I still do not have the account.  I have two salary cheques, neither of which have been cashed or deposited, because I do not have an account.  I am drawing off my savings, hoping that HFDC bank gets its act together before my foreign funds dry up.  It is unclear whether that will happen.

The process has been utterly ridiculous.  Of course, there is a ton of paperwork – verification of my residency (which is a whole other complicated, bureaucratic process), verification of my employment, verification of my salary, passport photos, copies of my passport, copies of my visa, so many signatures that I have lost track – but the major impediment has had nothing to do with paperwork.  No, the problem with this whole process has been people, and a system that is completely unresponsive to the demands of consumers.

I chose to use HFDC because it is the bank with which my organisation does its banking.  They sent a very nice man to the office – our “relationship manager” – who told me that it would be no problem opening the account.  Of course, the fact that I was a foreign national made it a little bit complicated, but only a little bit and he would take care of it all.  I asked lots of questions, got the answers I wanted, and left encouraged by his assurances that it would all be taken care of soon.  I was duped.

Over the intervening six or seven weeks, the very nice “relationship manager” has revealed his true colours.  He is always pleasant and full of assurances that my bank account will be set up very soon, but he has also stopped returning phone calls, often does not answer at all, does not show up at the office when he says he will, and has ceased to make any progress on opening my account.

Finally, last week, I spoke to his manager, informed him that I had lost all confidence in this individual, and asked for someone else to handle my account.  HDFC seemed a bit confused by this, but did indeed send someone else and things seem to be moving.  We’ll see.

The problem is that neither this relationship manager nor the bank as a whole is very concerned about losing my business.  They know that it’s difficult for a foreigner to open a bank account in India, so they rightly calculate that it is not easy for me to move to a different bank.  I have actually explored that option, and if the process weren’t so complicated, I would have opened an account elsewhere.  However, at least with HDFC my employer has a relationship.  That helps in cutting through red tape.  Anywhere else, the red tape might make the process near impossible.

But that leads to another question.  There are lots of foreigners in India, and we all need access to banking services.  There’s clearly a market for foreigner-friendly accounts.  Why is no one offering them?

The answer is to be found in government regulations.  The Reserve Bank of India imposes regulations on my bank account through the Foreign Exchange Management (Deposit) Regulations, 2000.  It is pages and pages of rules about what the bank can and cannot offer me, what sorts of funds can be accepted into my account, how I can take those funds back out again, who is eligible, what will be the interest rate, etc.  All of this makes it difficult for a bank that wants to create an account for me to do so.

I question why the government needs to be involved in regulating this.  The bank can assess whether I’m a good risk or not.  They can see that I’m employed by an employer they have worked with for years and therefore know and trust.  They can assess whether they should give me a bank account, what kind, and with what conditions.  After all, they’re a bank.  This is the business they know best.  HDFC has grown large and successful because they know how to run a bank and have done so successfully for years.  The same is true of all the other big banks in India.  Yet all of them find their activities limited by what the government, with no experience of banking, thinks is important.

And that creates the situation in which I find myself with HFDC.  Since every bank is limited by the same regulations, HDFC knows that no bank will offer me an account any better than they’re offering.  They know that every bank will require tons of paperwork from me and that the process will be slow.  They know that, while it is possible for me to open an account with another bank, I’ll be caught up in as much red tape there as I am with HDFC, but minus the advantage of an established relationship with my employer.  All of those things reduce their incentives to be responsive to my needs as a customer.

I am unhappy, but not surprised, by the lack of customer service I have found at HDFC.  Government regulation almost always leads to this kind of outcome.  Free markets, on the other hand, let bankers be bankers, allow them to make decisions about what is good business, and create situations where there is an incentive to be responsive to the needs of customers.  A freer market would make it easier for me to move to a different bank, which would mean my “relationship manager” would need to try to keep me happy.  He’d need to respond to my calls and provide the service he promised.  He would also be free to make the decisions he thought were best for his bank without having his options limited by the regulations.  It would be better for the bank and it would be better for those wishing to open accounts.  Everyone would benefit.

Well, everyone except the bureaucrats writing the regulations, who would find themselves out of jobs.  I think that improving the banking system for all would be worth that price.

* * *

**About Julie Gilstrap**

## Food Regulation

Original: https://www.spontaneousorder.in/p/food-regulation

Author: Spontaneous Order

Published: 2011-09-20T15:18:59.000Z

Topics: apmc-act, food-prices, agricultural-storage, crop-insurance

> It was with great interest that I read Arun Firodia’s column “How to Tame Hunger” yesterday in the TOI. http://timesofindia.indiatimes.com/home/opinion/edit-page/How-to-tame-hunger/articleshow/10032709.cms Food price inflation is running at nearly 1

**Summary:**

Julie Gilstrap praises Arun Firodia’s column for correctly identifying the APMC Act as a key driver of high food prices—farmers receive only Rs 5 per kg for onions while consumers pay Rs 30 per kg—and for advocating free trade across state and national boundaries to benefit both farmers and consumers amid 10% food inflation. She agrees scrapping the APMC Act would enable direct sales, farmers' markets, and contract farming, allowing market experimentation without government mandates. However, she critiques Firodia’s middle proposals for government intervention via nationalised banks providing cold storage and mandating crop insurance, arguing these mirror APMC pitfalls: lack of competition leads to inefficiency and poor service, as seen with existing state agencies like the Food Corporation of India (FCI), Central Warehousing Corporation (CWC), and 17 State Warehousing Corporations (SWCs). Instead, private companies, incentivized by profit, would deliver reliable storage, transport, and insurance at fair prices, creating win-win outcomes for farmers, consumers, and businesses. The classical-liberal conclusion: reduce government interference across the board, as more intervention exacerbates problems like spoilage, pests, and price volatility.

**Key points:**

- Scrap the APMC Act to free farmers from mandatory government markets and enable direct sales that could triple their revenues while halving consumer prices.
- Remove state and national trade barriers to increase supply for consumers and markets for farmers.
- Reject government-provided cold storage via nationalised banks, favoring private competition over inefficient state agencies like FCI, CWC, and SWCs.
- Oppose mandates on private insurers for crop coverage, as they raise costs or drive exits, preferring voluntary market solutions to avoid taxpayer-funded corruption.

**By Julie Gilstrap**

* * *

It was with great interest that I read Arun Firodia’s column “How to Tame Hunger” yesterday in the TOI.  [http://timesofindia.indiatimes.com/home/opinion/edit-page/How-to-tame-hunger/articleshow/10032709.cms](http://timesofindia.indiatimes.com/home/opinion/edit-page/How-to-tame-hunger/articleshow/10032709.cms)  Food price inflation is running at nearly 10%, and that is clearly a problem for individuals and families who are finding it more and more difficult to buy sufficient good food to feed their families.  I was glad to see Mr Firodia weighing into the debate.

Most of what he said was extremely helpful.  The APMC Act is certainly a major problem.  Anything that limits farmers’ options for distribution will drive down the prices they are able to get for their produce.  When the government market is the only place vegetables can be sold, then farmers can take the price offered there or nothing at all.  The amount the consumer is willing to pay is totally removed from the equation.  If it is true, as Mr Firodia says, that farmers receive only Rs 5 per kilo for onions, while consumers pay Rs 30 per kilo, then farmers could sell directly to consumers for Rs 15 per kilo and see their own revenues triple, while the cost to consumers would be cut in half.  Everyone would benefit.

Of course, if people preferred to buy their vegetables from a central location in a shop or market because it was more convenient or they found a better selection, that would remain an option.  And if farmers preferred to sell their produce in bulk to a shop rather than spending time selling very small quantities to many individual consumers, that would be fine, too.  Both of those processes involve “middle men,” but those “middle men” aren’t necessarily a problem.  They sometimes make the lives of both consumers and farmers easier by making the process of buying and selling simpler and less time consuming.  But the government doesn’t need to mandate or forbid any particular market, and it certainly doesn’t need to run one; farmers and consumers can make those choices for themselves.

So yes, get rid of the APMC Act.  That would allow all sorts of experiments, including the farmers markets and contract farming that Mr Firodia describes, as well as things no one’s even thought of yet.  The government doesn’t need to be involved in this market, so it should remove itself by scrapping the legislation.

He is also correct at the end of the piece when he talks about the importance of trade across state and national boundaries.  Absolutely.  This would both address the needs of consumers for more produce and of farmers for more people to purchase their crops.  We should remove government regulations there, too.

However, it was precisely because I so agreed with the beginning and end of his piece that I found the middle quite incomprehensible.  He talks about the high rates of spoilage because of poor storage and transportation facilities and he is right about the impact that this has on prices.  He is also right about the problems caused by floods, droughts, and pests, both for the supply of food and for the livelihoods of farmers.  These are indeed important issues that cause real difficulties.  However, the solutions he proposes are likely to perpetuate, rather than relieve the problems and for the same reasons that the APMC Act and trade restrictions make problems worse.

He proposes that nationalised banks provide cold storage and food treatment facilities that could be rented to farmers, which sounds great.  But doesn’t this have the same potential pitfalls as the APMC Act?  If farmers’ only options are to use the storage provided by the government through nationalised banks or to let their food spoil, they will probably go for the government storage.  But because the farmers will have little alternative, there is no incentive for those banks to ensure their quality is consistently high or their prices are low enough to offer good value to farmers.  And it also ignores the fact that there is already an extensive network of storage facilities for farmers operated by the state.  Indeed, there are at least three government agencies involved in this work – the Food Corporation of India (FCI), the Central Warehousing Corporation (CWC), and 17 State Warehousing Corporations (SWCs).  But this isn’t meeting the need.

Private companies providing storage and transportation without interference from the government need to compete for farmers’ business, so they have good reason to offer fair prices and reliable services.  Without undue regulation, and in the face of such great need, companies are only too happy to seize the opportunity to provide this service.  They benefit through the money they make by running the business, the farmers benefit by being able to sell more of their produce without losing it to spoilage, and consumers benefit from a greater supply of fresher food.  It is a win-win-win.

The same principle applies when it comes to insurance.  Mr Firodia argues that insurance companies should be required to offer insurance to cover farmers’ losses, but such interference by the government will do one of two things.  It will either drive the price of insurance up, or make companies leave the business altogether.  If companies are unable to operate in a way that makes sense for them financially, they’ll cease to offer insurance at all, which reduces the options for farmers.  That’s not good for anyone.  Alternatively, in order to sustain their businesses, insurance companies may raise prices substantially.  But this also causes problems.  Either the farmers have to pay the new, higher rates, which they can afford only by raising the prices charged to consumers, which means all of us will pay.  Or the government will pay for the insurance, which means that, again, all of us will pay through taxation.  And if there is any problem of which everyone in India is aware, it is the problem of corruption when you start mixing the government and money.  A wide-spread insurance scheme, mandated by the government and paid for by taxpayers, would be ripe for corruption and inefficiency.  Private markets definitely do a better job than the state at providing insurance.

So while Mr Firodia is right in much of what he says, the answer to both the problems of food storage and transportation as well as the need for insurance lies not in further government intervention, but less.  As he so clearly shows, government interference – in the form of the APMC Act and trade restrictions – is a major contributor to the problems we currently face.  More of it will make matters worse, not better.

* * *

**About Julie Gilstrap**

## A warm welcome to the Dost

Original: https://www.spontaneousorder.in/p/a-warm-welcome-to-the-dost

Author: Spontaneous Order

Published: 2011-09-13T17:01:52.000Z

Topics: economic-liberalisation, spontaneous-order, consumer-choice, automotive-market

> This morning, I read about the Dost, a 1.25 ton commercial vehicle launched today that will be produced through a joint venture between Ashok Leyland and Nissan and priced from Rs 3.79 lakh. That got me thinking about the market for light commercial veh..

**Summary:**

The launch of the Dost, a 1.25-ton light commercial vehicle (LCV) priced from Rs 3.79 lakh through a joint venture between Ashok Leyland and Nissan, exemplifies India's vibrant vehicle market shaped by post-1991 economic liberalisation. With over 150 passenger car models listed on one site (excluding LCVs, heavy vehicles, and autos, plus endless variations and colors), consumers face near-endless options that miraculously match diverse needs—family size, parking, power, fuel efficiency—without central coordination. This spontaneous order contrasts with Henry Ford's 1909 Model T (black only) and India's limited choices just 20 years ago under few manufacturers. Liberalisation exploded models, enhancing quality, features, and affordability, enabling more people to buy new vehicles. It benefits consumers with better fits and workers across manufacturing, sales, maintenance, and services. The Dost's entry signals ongoing market dynamism, where consumer choices determine success amid competition, fostering economic growth that lifts all.

**Key points:**

- India's vehicle market offers over 150 passenger car models plus countless LCV variations post-1991 liberalisation.
- Spontaneous market forces match millions of diverse consumer preferences without central planning or coordination.
- Liberalisation since 1991 has vastly expanded choices, improved quality, and made features more affordable compared to pre-reform limitations.
- The Dost LCV at Rs 3.79 lakh exemplifies vibrant competition, with success determined by consumers over rivals.
- Market growth creates jobs in vehicle production, sales, maintenance, and related services, benefiting workers and the economy.

**By Julie Gilstrap**

* * *

This morning, I read about the Dost, a 1.25 ton commercial vehicle launched today that will be produced through a joint venture between Ashok Leyland and Nissan and priced from Rs 3.79 lakh. That got me thinking about the market for light commercial vehicles (LCVs, the category into which the Dost will fall) and then for cars in general. And that made me start to ask lots of questions. How many different models of car are available in India? How many different LCVs are there? How much do they cost? Which ones are better? Is Rs 3.79 lakh a good deal, or are there better ones out there? What about for regular passenger cars? How good is that super-affordable Nano?

No one knows how many different makes and models of car there are in India, because there are really too many to count. One website I found listed at least 150, but I don’t think that was exhaustive. And even among those 150, there are endless variations. And it those were just passenger cars. There were no LCVs or heavy commercial vehicles. There were definitely no autos. And everything’s available in multiple colours. When you start to think about it, the options available for someone wanting to purchase a vehicle are almost endless.

Miraculously, out of this vast array of choices, millions and millions of people, all with different preferences, manage to choose cars that fit their needs – that have enough room for their families, that fit in the parking spaces available near their homes, that will transport what they need to transport, that will have more power or use less fuel.

It sounds like a recipe for total chaos. After all, no one’s coordinating the supply of cars. No one’s calculating how many cars are needed, who needs MUVs and who needs Nanos, how many prefer black cars to red. No one’s monitoring the car companies to make sure they produce the right mix. It’s millions of people shopping for cars and dozens of manufacturers producing scores of models. And yet, somehow, it just works. And not only does it work, but new cars are added to the mix all the time, and new consumers are constantly entering the market. More and more people who have never had a car find they’re able to afford a new, inexpensive model. Car companies are constantly changing and offering new and different and better options. It’s dynamic and exciting.

It hasn’t always been this way. In 1909, Henry Ford famously said about the Model T that, “Any customer can have a car painted any colour he wants so long as it is black.” Even just 20 years ago, choices in India were far more limited than they are today, with only a few big manufacturers. But in 1991, the process of economic liberalisation began and the number of different cars available has exploded.

No one doubts that this is good for consumers. We’re all better off because we have more choices and, consequently, can get something that better meets our needs. Quality has improved and extra features have become more affordable. And it’s also good for loads of workers. All those cars mean jobs in manufacturing them and selling them, in cleaning them and driving them, in filling them with fuel, replacing their tyres, and fixing them when they break down.

So into this mix comes the Dost, and I welcome it. I don’t know whether it will be successful or not – that’s up to the consumers who will decide whether to purchase it or one of the other LCVs on the market – but its introduction indicates a vibrant market that is good for Indian consumers and workers. It shows me that the liberalisation that started in the ‘90s is continuing to bear fruit. It reveals continued growth and development of the economy, and when the economy grows, we all benefit.

* * *

**About Julie Gilstrap**

## Air India

Original: https://www.spontaneousorder.in/p/air-india

Author: Spontaneous Order

Published: 2011-09-09T17:39:55.000Z

Topics: state-owned-enterprises, government-bureaucracy, privatization, aviation-policy

> The Comptroller and Auditor-General yesterday issued a report criticising pretty much everything about Air India’s acquisition of 111 new aircraft in a process that spanned several years. What a surprise. The report criticised the processing time of th.

**Summary:**

The Comptroller and Auditor-General's report criticizes Air India's acquisition of 111 new aircraft over several years, highlighting delays, excessive numbers purchased, debt funding without comparison shopping, and the merger with Indian Airlines, describing the process as erratic with 'fits and starts.' This mess stems from involvement by at least six government entities—Air India's board, Ministry of Civil Aviation, Planning Commission, Department of Expenditure, Public Investment Board, ministers, and Cabinet Committee—beyond Air India itself, turning a straightforward business decision into bureaucratic chaos. From a classical-liberal viewpoint, company managers best understand operational needs like finances, routes, and labor, yet government ownership invites interference that obscures accountability: it's impossible to pinpoint responsibility amid diffused decision-making. In contrast, private firms hold CEOs ultimately accountable, aligning incentives for profit and customer service through clear authority to hire, spend, and risk. Air India's CEO faces political pressures from agencies with unrelated objectives, muddling incentives. The CAG recommends a 'total hands-off approach' by government; the author advocates this as progress, with full privatization ideal to enable proper management and accountability.

**Key points:**

- CAG report faults Air India's 111-aircraft acquisition for delays, overpurchase, debt reliance, and poor process amid multi-agency involvement.
- Excessive government bureaucracy diffuses responsibility, making accountability impossible in state-owned enterprises like Air India.
- Private sector CEOs bear clear ultimate responsibility, fostering aligned incentives for profitability and service.
- CAG urges total government hands-off on Air India management; full privatization is preferable for optimal outcomes.

**By Julie Gilstrap**

* * *

The Comptroller and Auditor-General yesterday issued a report criticising pretty much everything about Air India’s acquisition of 111 new aircraft in a process that spanned several years.  What a surprise.

The report criticised the processing time of the acquisition, the number of aircraft purchased, the plan to fund the purchase through debt, the lack of comparison shopping, and even the merger of Air Indian and Indian Airlines.  The report talked about the acquisition process moving “in fits and starts,” about long delays followed by hasty decisions.  Basically, the report said the whole affair was a total mess.

It’s not really surprising that it turned into such a shambles, and the CAG himself identifies why when he starts talking about the agencies involved the process.  At some point, there was input from Air India, its board, the Ministry of Civil Aviation, the Planning Commission, the Department of Expenditure, the Public Investment Board, government Ministers, and the Cabinet Committee on Economic Affairs.

That’s at least six different groups of government officials in addition to Air India itself and its board who were involved in what should have been a simple business decision for Air India.  The people who know Air India best are the people who run the company.  They understand the airline’s financial situation, schedules, labour issues, customer base, routes, and needs for aircraft.  It follows that they are best placed to make decisions about when and from whom to buy aircraft, how many to buy, and how much to pay.

The government owns Air India, so they believe they need to involve themselves in these decisions.  And it is true that there needs to be accountability.  Essentially, if the government owns something, it means that all citizens own it.  There needs to be some sort of accountability and transparency in place to ensure that Air India doesn’t use taxpayer money poorly.  But layers upon layers of government bureaucracy interfering in business decisions don’t create that.  They just make the situation worse.

In the present case, who is responsible for the failure?  Is it Air India?  Maybe their board?  Or maybe it’s one of the half a dozen government agencies that were involved?  Or some combination?  What was the precise point where a mistake was made, where a bad decision was taken?  It’s impossible to tell.  And if it’s hard to tell who is responsible, then there can be no effective accountability for bad decisions.

In private businesses, on the other hand, it’s clear who’s responsible.  Ultimately, the CEO is hired by the board to run the company.  Yes, he hires people and delegates responsibility, but ultimately, the buck stops with the CEO.  It is he who will be held responsible for these sorts of failures.  He’s free to make decisions, to hire and fire the people under him, to spend and borrow and take risks, but he’s also accountable for the results at the end of the day.  This makes his incentive structure very clear.  He can either run a solid airline and be well compensated for it, or he can fail to do so and lose his job.  His objective is to make the company money and secure the customer base by providing a good service for which people will continue to pay.

In the Air India model, the CEO has to worry about running a solid airline, but he’s not just answerable to his board.  He also has to be concerned with politics and what politicians want.  He his decisions are subject to the approval of numerous agencies with a wide variety of objectives that have nothing to do with running an airline.  His incentives and objectives are unclear.  This creates neither accountability nor transparency.

Don’t get me wrong here.  The culprit isn’t the head of Air India.  It’s the system in which he has to operate.  In his report, the CAG recommends “a total hands-off approach \[by the government\] to the management of the airline.”  That would, indeed, be a positive step forward.  Better still would be full privatisation, but in the meantime, the less the government interferes in the operations of Air India, the better.

* * *

**About Julie Gilstrap**

## Right to Services Acts

Original: https://www.spontaneousorder.in/p/right-to-services-acts

Author: Spontaneous Order

Published: 2011-08-31T10:45:28.000Z

Topics: right-to-services, subsidiarity, government-accountability, federalism

> Amidst the furore caused by Anna’s protest and the government’s rethinking of their Lokpal bill, something exciting in the states seems almost to have been missed. It’s not particularly flashy and it doesn’t have any celebrity spokesman, but it hi

**Summary:**

Amid the national focus on Anna Hazare's Jan Lokpal Bill, the post highlights state-level Right to Services Acts in at least six Indian states, enacted or under consideration within the last year, as a promising classical-liberal reform. These Acts clearly enumerate government services (ranging from 7-8 to over 30 per state), set specific delivery timelines (e.g., birth certificates in seven days, water supply in thirty days), designate individual responsible officials, and impose personal fines—garnished from wages and returned to citizens—if deadlines are missed. The author argues these outperform the Jan Lokpal Bill by embodying subsidiarity: allowing state variations for local needs, fostering experimentation where states learn from each other, and keeping governance closer to the people. Unlike the Lokpal's overambitious, centralized anti-corruption crusade—which risks inefficacy by tackling too broad a problem—the focused RTS Acts harness personal incentives to curb delays and petty corruption effectively. The post warns that the national bill would supersede and abolish these state initiatives, potentially derailing grassroots progress toward accountable, responsive government.

**Key points:**

- Right to Services Acts in six states mandate specific services, timelines, officials, and personal fines for delays, with fines returned to citizens.
- These Acts enable subsidiarity by permitting state-specific adaptations and inter-state experimentation tailored to local conditions.
- Narrow focus on service delivery shifts officials' incentives via personal accountability, outperforming broad anti-corruption efforts like Jan Lokpal.
- Jan Lokpal Bill would centrally override and abolish effective state RTS Acts, undermining federal flexibility.

**By Julie Gilstrap**

* * *

Amidst the furore caused by Anna’s protest and the government’s rethinking of their Lokpal bill, something exciting in the states seems almost to have been missed.  It’s not particularly flashy and it doesn’t have any celebrity spokesman, but it hits on many of the issues of most concern to Anna and may be already beginning to make a real difference on the ground.  It’s called a Right to Services Act, and it either has already been enacted or is being considered in at least six states, all within the last year.

The Right to Services Acts are really pretty straightforward.  They’re all slightly different, but the basic format runs something like this:

1.  The government is responsible for delivering a set of services.  These are enumerated in the legislation.  Some states have seven or eight on that list; others have more than thirty.  Regardless of the number, government responsibilities are clearly identified and articulated.
    
2.  The legislation specifies a specific period of time within which a service must be provided.  This varies by state and by service, but perhaps a birth certificate must be issued within seven days or water supply has to be provided within thirty days.  Again, the requirement is specific and clear.
    
3.  The individual government official responsible for delivery of the service is specified.  It’s not just “the government” or “the department” that is responsible for providing the service; it’s a specific person.
    
4.  If the service isn’t carried out in the time frame specified, then the responsible individual is held accountable and charged a fine.  The government can make him pay by garnishing his wages.  The fine is returned to the aggrieved citizen as compensation.
    

The Jan Lokpal Bill has similar provisions, but I think there are at least two key ways in which the two differ, and both are, I think, reasons to be more optimistic about these state Right to Services Acts, than about the national Jan Lokpal Bill.

First, the Right to Services Acts vary from state to state.  Anna’s bill would create a central agency and then roll out parallel state agencies that would work with the national.  The whole thing would be uniform and coordinated from the centre.  All standards in all states would be the same.  At first, this sounds kind-of appealing, but it’s actually a weakness.  Not all conditions in all states are the same.  What if a state can provide some services more quickly than other states?  Would it not benefit those citizens for its government to shorten the allotted timeframe for those services?  What if there are services that are really crucial in some parts of the country but, in others, are less important?  Would it not benefit those citizens for their state governments to have the flexibility to prioritise the services more important to local needs?

There’s a principle here, one called “subsidiarity.”  It basically means that responsibility should be taken at the lowest level possible.  So, if states can handle an issue, then the central government shouldn’t get involved.  If a municipality can handle something, then a state shouldn’t get involved.  If communities can take care of a particular need, then the municipality should stay out of it.  If a family can manage, then it should be left to them.  Subsidiarity says let the states handle this for themselves.  The whole process stays closer to the people that way, and more responsive to their particular needs.

In addition, all those state Right to Services Acts are slightly different, so they act as experiments.  Each state can look at what others are doing and learn from those examples.  It’s a way for state governments to improve their systems and legislation over time without having to try everything directly themselves.  This too is a real strength.

The second major issue is that the Jan Lokpal Bill seeks to tackle “corruption,” an issue too big to be manageable.  Yes, we’d all like to see an end to corruption, but the problem is so huge.  It’s hard for even the most optimistic to see how it can be rooted out in one fell swoop.  The Right to Services Acts, on the other hand, are narrow and clearly defined.  They don’t take on every type of corruption, but they do effectively deal with a particular problem.  By limiting their scope, the chances of being effective are increased.

This is due to the shift in incentives the Acts brings about.  The Right to Services Acts rightly recognise that people’s behaviour is driven by their personal incentives.  Those incentives can be anything – money, a sense of accomplishment, satisfaction at doing the right thing, avoiding punishment.  All of these are incentives, and people will act to maximise positive incentives while minimising negative ones.  By introducing personal fines, the Right to Services Acts change the incentives for officials.  A department fine doesn’t really affect an individual official very much.  He doesn’t particularly care about that.  But if the fine is coming out of his own pocket, he does care.  That is far more likely to affect his behaviour.

The Jan Lokpal Bill includes something similar, but in trying to be too far reaching, it may cease to be effective and therefore lose this power of incentives.  If officials don’t really think that failure to deliver services will be traced back to them and have individual consequences, then the incentives will continue to be as they are now – to act in an inefficient and corrupt manner.  The more focused Right to Services Acts more effectively harness that power of incentives.

The Jan Lokpal Bill would abolish all Right to Services legislation in the states.  It would supercede and replace any existing systems or acts.  This would be unfortunate.  The aims of the Jan Lokpal Bill are noble, but if it gets in the way of measures that are already beginning to work in the states, then it could actually move us farther away from the corruption-free India we all want to see.

* * *

**About Julie Gilstrap**

## Poverty and Wealth

Original: https://www.spontaneousorder.in/p/poverty-and-wealth

Author: Spontaneous Order

Published: 2011-07-15T22:12:46.000Z

Topics: poverty, wealth-creation, south-asia, economic-freedom

> India and the world are busy measuring poverty. According to World Bank numbers South Asia is amongst the poorest regions in the world, second only to Sub-Saharan Africa. Today we bring you an interesting essay from www.economicliberty.net on why everyo..

**Summary:**

The post highlights the global and Indian focus on measuring poverty, citing World Bank data that ranks South Asia as the second poorest region after Sub-Saharan Africa, and references a Livemint article on challenges in defining poverty lines. It features a classical-liberal essay excerpt from economicliberty.net critiquing the Left's worldview: wealth is assumed natural, prompting intense scrutiny of poverty's causes, as seen in countless Time and Newsweek articles, while treating poverty as unnatural and solvable—as if understanding it would enable manufacturing more. This inverts reality, the essay argues; poverty is the default human condition, and the pivotal question, first systematically asked in 1776 with Adam Smith's inquiry into wealth's sources, is what generates prosperity. Yet, much of the political class remains oblivious to this insight, fixating on poverty alleviation over wealth creation. The post urges shifting discourse from poverty's 'causes' to unleashing economic liberty for riches.

**Key points:**

- South Asia ranks second only to Sub-Saharan Africa as the world's poorest region per World Bank data.
- The Left treats poverty as unnatural requiring explanation, while viewing wealth as default.
- Poverty is natural; the key question since 1776 is what causes wealth.
- Political classes have not internalized lessons on wealth creation drivers.

**By Vipin**

* * *

[India](http://www.livemint.com/2011/05/24211351/The-trouble-with-finding-the-p.html) and the world are busy measuring poverty. According to [World Bank](http://data.worldbank.org/topic/poverty) numbers South Asia is amongst the poorest regions in the world, second only to Sub-Saharan Africa. Today we bring you an interesting essay from www.economicliberty.net on why everyone talks about poverty, not wealth creation.

“The Left thinks wealth is natural, and what needs to be explained is poverty.  How many  articles  have  you read  in  issues  of Time and Newsweek  down  the  years  about  the causes of poverty? There is intense investigation into the causes of poverty, as if poverty were not natural.  How can you explain it?  Would it not be wonderful to figure out the answer .What  is the cause of poverty? Because then we could make more poverty. Terrific.  That is the wrong question.  The important question is: What are the causes of wealth?  That question was not asked until very late in human history, in 1776.  The answer to it has somehow not been learned by a large part of the political class. “

To read more click [here](http://economicliberty.net/economy_stupid.htm)

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Gandhi, the Liberal

Original: https://www.spontaneousorder.in/p/gandhi-the-liberal

Author: Spontaneous Order

Published: 2011-07-14T22:19:44.000Z

Topics: gandhi, economics-ethics, adam-smith, classical-liberalism

> Chandrasekaran Balakrishnan discusses M K. Gandhi’s views on economics in the latest issue of Pragati. Chandra says: In the wake of the global economic crisis, it is pertinent to examine Gandhi’s views on economics and ethics. Writing in Young India..

**Summary:**

In the latest issue of Pragati, Chandrasekaran Balakrishnan examines M.K. Gandhi’s views on economics amid the global economic crisis, emphasizing Gandhi's inseparability of economics and ethics. Writing in Young India (1921), Gandhi asserts: 'I do not draw a sharp or any distinction between economics and ethics. Economics that hurt the moral well-being of an individual or a nation are immoral and, therefore, sinful. Thus the economics that permit one country to prey upon another are immoral…The economics that disregard moral and sentimental considerations are like wax works that, being life-like, still lack the life of the living flesh.' Balakrishnan and the post's author Vipin P. Veetil frame this as akin to Adam Smith's emphasis on the 'invisible hand' in The Theory of Moral Sentiments, portraying Gandhi's critique of amoral economics as resonant with classical-liberal principles that integrate moral sentiments into economic reasoning. This perspective underscores Gandhi as 'the Liberal,' rejecting predatory or soulless economic systems in favor of ethically grounded markets.

**Key points:**

- Gandhi rejected sharp distinctions between economics and ethics, deeming economics harmful to moral well-being as immoral and sinful.
- Gandhi criticized economics allowing one country to prey on another and those ignoring moral considerations, predicting their practical breakdown.
- Gandhi's views parallel Adam Smith's 'invisible hand' from The Theory of Moral Sentiments, highlighting moral foundations in economics.
- The discussion is timely in the wake of the global economic crisis.

**By Vipin**

* * *

Chandrasekaran Balakrishnan discusses M K. Gandhi’s views on economics in the latest issue of [Pragati](http://pragati.nationalinterest.in/).

Chandra says:

In the wake of the global economic crisis, it is pertinent to examine Gandhi’s views on economics and ethics. Writing in *Young India* (1921), Gandhi argues:

*“*I do not draw a sharp or any distinction between economics and ethics. Economics that hurt the moral well-being of an individual or a nation are immoral and, therefore, sinful. Thus the economics that permit one country to prey upon another are immoral…The economics that disregard moral and sentimental considerations are like wax works that, being life-like, still lack the life of the living flesh. At every crucial moment thus new-fangled economic laws have broken down in practice. And nations or individuals who accept them as guiding maxims must perish.”

This is akin to what Adam Smith emphasised in his first book, *The Theory of Moral Sentiments,* in which he coined the phrase ‘invisible hand’.

To read more click [here](http://pragati.nationalinterest.in/2011/07/gandhi-the-liberal/)

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Why Success Always Starts With Failure

Original: https://www.spontaneousorder.in/p/market-economy-as-a-complex-system

Author: Spontaneous Order

Published: 2011-07-12T22:18:16.000Z

Topics: market-economy, complex-systems

> Today we bring you an interesting talk on understanding a market economy as a complex system. Market as a Complex System

**Summary:**

This post is too short to summarise meaningfully; it briefly introduces a YouTube talk by Vipin P Veetil titled 'Why Success Always Starts With Failure' on understanding the market economy as a complex system, and notes that he is a second-year PhD student in Economics at George Mason University.

**Key points:**

- Links to a talk framing the market economy as a complex system.

**By Vipin**

* * *

Today we bring you an interesting talk on understanding a market economy as a complex system.

[Market as a Complex System](http://www.youtube.com/watch?v=PbUDBkU-eVI)

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## 1920: The Year Indian Railways Discovered the State

Original: https://www.spontaneousorder.in/p/1920-the-year-indian-railways-discovered-the-state

Author: Spontaneous Order

Published: 2011-07-11T18:48:07.000Z

Topics: indian-railways, nationalization, government-monopoly, privatization

> By: Surbhi Tandon (Communicating Reality Intern, CCS) Indian Railways is unsafe, unclean and of low quality. And we’ve given up; India is in a state of learned helplessness. Indians live merrily with filthy platforms and lousy train food. As for accid..

**Summary:**

Indian Railways, once operated by more than 20 private companies, declined after nationalization recommended by the 1920 East India Railway Committee chaired by Sir William Acworth, setting the stage for its current state of unsafety, uncleanliness, and low quality as a government monopoly. The author argues from a classical-liberal perspective that railways are neither non-rivalrous nor non-excludable—contrary to public goods like lighthouses or national defense defined by Paul Samuelson—making them suitable for private enterprise driven by profit motive and entrepreneurship, not state control or mere statistics. Acworth's emphasis on data collection failed to deliver improvements, as real change requires market competition's 'creative destruction.' Today, symptoms of monopoly inefficiency persist: the CAG reports that over 50% of the 4,600 crore rupees allocated for safety works from 2003-2008 remains unused, 86,108 safety category posts are vacant, and the Research Design and Standards Organisation lags in developing risk-reducing technologies. Ministers change but problems endure post-1947. The conclusion urges prioritizing railways in India's second round of reforms to introduce competition for safe, clean service.

**Key points:**

- Indian Railways were operated by over 20 private companies before the 1920 Acworth committee recommended full nationalization.
- Railways are excludable and rivalrous, not public goods, so government monopoly is economically unjustified.
- CAG audits reveal over 50% of 4,600 crore safety funds (2003-2008) unused, 86,108 safety vacancies, and delays in safety tech development.
- Prioritize railway reforms with market competition and creative destruction over statistics or ministerial changes.

**By Vipin**

* * *

**By: Surbhi Tandon (Communicating Reality Intern, CCS)**

Indian Railways is unsafe, unclean and of low quality. And we’ve given up; India is in a state of learned helplessness. Indians live merrily with filthy platforms and lousy train food. As for [accidents](http://en.wikipedia.org/wiki/List_of_Indian_rail_incidents) (like the July 10 [derailing](http://www.ndtv.com/article/india/kalka-mail-mishap-survivors-arrive-in-delhi-118216) of Kalka Mail), yes that upsets us – so much so that we ask for a new minister! The sad story of post-1947 Indian railways is that ministers change but railways don’t. And this is because the Indian Railways is a government monopoly, though economics tells us that it doesn’t have to be.

The Indian Railways was once operated by more than 20 private companies. This should come as no surprise. Paul Samuelson—Nobel Prize in economics 1970—tells us that the markets fail to provide “public goods”. Samuelson defines “public goods” as goods which are non-rivalrous and non-excludable in consumption. Non-rivalrous means one person consuming a good does not reduce the quantity available for another, a lighthouse for example. Non-excludable means that it is not technically possible to exclude any person from consuming the good, national defense is a good example. Railways are both excludable and rivalrous, no economic reason for government production.

Though the Great Indian Peninsula Railway Company was made state property on 1 July 1900, the big change came much later. In 1920 the East India Railway Committee (chaired by Sir William Acworth) recommended nationalization of all private railway companies.  Acworth died in 1925, his obituary in [The Economic Journal](http://www.jstor.org/pss/2222712) is an interesting read. Acworth’s “great  cry  was for  statistics.  Adequate  statistics  would,  he  believed,  throw  such  a  flood of  light  on  the  operation of  the  railways… that  changes  in  methods  would  inevitably  follow”. Economists didn’t think much of Acworth’s writings, they “criticised his writings as being  weak  in economics, and he himself often lamented that his knowledge of economic theory was  so  limited.” Real change in production doesn’t come simply by collecting statistics (the Soviet’s knew that well) but when entrepreneurs act on those statistics. And entrepreneurs are driven by the profit motive. Acworth by recommending nationalization set the stage for the decline of the Indian Railways.

Today the Indian Railways displays many of the symptoms of a government monopoly.  According to the [Controller](< http://expressbuzz.com/opinion/editorials/headless-railways-leaves-a-gaping-safety-void/292817.html>) Auditor General (CAG) of the 4,600 crore allocated for safety works between 2003 and 2008 “more than 50 per cent” remains unused, “over 86,108 vacancies in safety category posts remained [vacant](<http://www.rediff.com/news/column/the-dangerous-drift-in-governance/20110704.htm >)”. The CAG report [find](< http://ibnlive.in.com/news/headless-railways-gropes-in-the-dark-after-accidents/166664-37-64.html>)s that “the Research Design and Standards Organisation of the Railways is behind schedule in developing new technologies that could reduce risk to railway users.”

Acworth got it wrong in 1920, let’s get it right in 2011. Railways ought to be top priority in the second round of reforms. For good, clean and safe railways we need “the perennial gale of [creative destruction](http://transcriptions.english.ucsb.edu/archive/courses/liu/english25/materials/schumpeter.html)” not just more statistics.

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Yeşilçam and Bollywood

Original: https://www.spontaneousorder.in/p/yesilcam-and-bollywood

Author: Spontaneous Order

Published: 2011-07-09T20:58:32.000Z

Topics: turkish-cinema, bollywood, film-individualism, cultural-critique

> By: Udita Singh (Communicating Reality Intern, CCS) Yesilcam, yes that is what they call Turkey’s film industry. The word “industry” is slightly misleading though, for Turkish films microscopically look at life in nuanced ways rather than mass produ

**Summary:**

Udita Singh contrasts Turkey's Yeşilçam film industry with Bollywood, portraying Yeşilçam as producing nuanced films that microscopically examine life through universal dichotomies such as immigrant-native, rural-urban, male-female, and elite-common. This individual-centric focus, emphasizing personal relationships alongside history and society, imbues the films with universality that earns them acclaim at international festivals. Bollywood, however, mass-produces movies reliant on song-dance sequences, extravagant action, and melodrama, aligning with Wim Wenders' critique of entertainment that insists 'things are wonderful the way they are,' rather than cinema showing 'change is possible and necessary and it’s up to you.' While Bollywood has seen shifts through filmmakers like Anurag Kashyap and Kiran Rao—exemplified by Dhobi Ghat's use of real locales approaching contemporary Turkish cinema—the overall contrast remains stark. The post recommends 'Once Upon a Time in Anatolia' (original: Bir Zamanlar Anadolu’da) as a must-watch, highlighting Yeşilçam's superior artistic depth rooted in individual stories over formulaic spectacle.

**Key points:**

- Yeşilçam films excel by centering individuals and universal dichotomies, making them festival favorites.
- Bollywood prioritizes mass-produced entertainment with song-dance and melodrama, resisting calls for change.
- Indian directors like Anurag Kashyap and Kiran Rao are pioneering nuanced cinema akin to Turkish styles, as in Dhobi Ghat.
- Watch 'Once Upon a Time in Anatolia' for exemplary Yeşilçam storytelling.

**By Vipin**

* * *

**By: Udita Singh (Communicating Reality Intern, CCS)**

Yesilcam, yes that is what they call Turkey’s film industry. The word “industry” is slightly misleading though, for Turkish films microscopically look at life in nuanced ways rather than mass produce movies.

Themes in contemporary Turkish Cinema look minutely at universal dichotomies like immigrant-native, rural-urban, male-female, elite-common. The microscopic vision means that films are often as much about individuals and relationships as about history and society. And it is this universality brought about by the central role of individuals which often makes them the panel’s favorite pick at international film festivals.

The stark contrast between Bollywood and Yesilcam reminds one of Wim Wender – German film director, he once said “Entertainment today constantly emphasises the message that things are wonderful the way they are. But there is another kind of cinema, which says that change is possible and necessary and it’s up to you.” Films in India continue to live on song-dance sequences, extravagant action and melodrama. Bollywood too has seen some change though. Film makers like Anurag Kashyap and Kiran Rao have taken the plunge into the ‘other kind of cinema’. Dhobhi Ghat, for instance, came close to Contemporary Turkish cinema with its real locales.

As for a must watch:  [Once Upon a Time in Anatolia](http://www.imdb.com/title/tt1827487/) (original title: Bir Zamanlar Anadolu’da). Enjoy.

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Living With Imperfections

Original: https://www.spontaneousorder.in/p/living-with-imperfections

Author: Spontaneous Order

Published: 2011-07-08T18:25:27.000Z

Topics: free-markets, media-regulation, government-failure, competition

> By: Surbhi Tandon (Communicating Reality Intern, CCS) We support free markets and the ‘market for information’ is no exception. Some misinterpret our position to mean ‘markets are perfect’, this is far from what we claim. The News of The World sca

**Summary:**

The post defends classical-liberal support for free markets in the 'market for information' against claims that markets are perfect, using the News of the World phone-hacking scandal—where Rupert Murdoch shut down the paper amid ethical breaches—as evidence of market imperfections. It argues that low ethical standards among market participants can cause harm, but this justifies neither more government intervention nor abandoning markets. Instead, competitive markets possess self-correcting mechanisms that expose and eliminate unethical players over time, unlike government monopolies prone to unchecked abuse. Real markets, comprising fallible humans, require time to function effectively, unlike idealized neoclassical models assuming instant perfection. To detect 'rotten eggs' faster, ensure free entry and exit to challenge incumbents, rather than relying on governments lacking incentives or ability to raise standards—evidenced by British politicians' prior awareness of the scandal without action. Self-regulation by media and civil society could help, but markets remain preferable to state control.

**Key points:**

- Markets for information are imperfect but superior to government monopolies due to competition's self-correcting nature.
- Free entry and exit in markets challenge unethical incumbents more effectively than government regulation.
- The News of the World scandal illustrates market flaws but also self-correction, as the paper shut down.
- Governments lack incentives to enforce media ethics, as shown by politicians ignoring the phone-tapping story for years.

**By Vipin**

* * *

**By: Surbhi Tandon (Communicating Reality Intern, CCS)**

We support free markets and the ‘market for information’ is no exception. Some misinterpret our position to mean ‘markets are perfect’, this is far from what we claim. The [News of The World](http://www.livemint.com/2011/07/07224932/Murdoch-stuns-critics-shuts-d.html) scandal shows market can be far from perfect, low ethical standards of market participants can have terrible consequences; but this is no reason to ask for more government intervention. If anything, the scandal only substantiates our political position. We would much rather risk unethical behavior by some in a competitive market than risk unethical behavior by a sole government supplier of news. The market has within it a self-correcting mechanism – competition. Of course more self-regulation by media houses and civil society might help.

A market is a network of human beings and it is only as ethical or unethical as the humans who constitute it. Unlike the government, a market has many players, and competition often tends to throw out the rotten egg. The problem is that—as the News of The World case shows—at times competition may encourage market participants to breech certain ethical norms. But overtime—more often than not—these breeches come to light and rotten players shut shop. Unlike neoclassical economics models, where under certain assumption, markets are perfect at each point in time, real markets take time to work. And this means that unethical practices can sometimes continue for long before being detected. Real markets like real people need time to function.

The question then is: how do we ensure rotten eggs are detected quick? Well there is no sure-shot way. A moral philosopher might talk of ‘ethics and society’ and that is a worthy debate. From the point of view of political-economy all we can do is ensure free entry and exist so that incumbents are challenged on all grounds. Running to the government is no solution; it has neither the incentive nor the ability to raise ethical standards – though it may be quick to pass a law or two. In fact, it appears from early news that many politicians in Britain were well aware of the tapping-story for years; we can’t trust such men to regulate the press.

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Supreme Court on Politics and Economics

Original: https://www.spontaneousorder.in/p/supreme-court-on-politics-and-economics

Author: Spontaneous Order

Published: 2011-07-07T22:01:32.000Z

Topics: supreme-court, chhattisgarh, state-violence, neo-liberalism

> By: Surbhi Tandon (Communicating Reality Intern, CCS) On 5 July the Supreme Court of India expressed its views on economics and politics while hearing “Nandini Sundar versus the State of Chattisgarh”. We bring you two passages from the hearing that ca

**Summary:**

In a 5 July hearing on Nandini Sundar versus the State of Chhattisgarh, the Supreme Court of India sharply critiqued the state's political and economic approaches amid Maoist conflicts. On politics, the bench expressed dismay at Chhattisgarh's insistence on 'rule with an iron fist,' treating every citizen as suspect and branding human rights advocates like Ramchandra Guha, Nandini Sundar, Swami Agnivesh, and E.A.S. Sarma as Maoists or sympathizers. The Court decried this 'bleak world view' as blind to constitutional limits, rejecting the state's claim for sanction to perpetrate 'ruthless violence' against its people. On economics, the SC blamed 'unrestrained selfishness and greed spawned by modern neo-liberal economic ideology' and false promises of consumption-driven growth for creating unsustainable conditions in Chhattisgarh and India. It accused policymakers and elites of ignoring the suffering of displaced and dispossessed, relying on resource plunder that historically leads to state failure and mass misery, while dismissing socioeconomic disempowerment in favor of obsessive growth at the poor's disproportionate cost. From a classical-liberal lens, the post surfaces these judicial rebukes of state authoritarianism and market distortions, recommending a Mint editorial for further reading.

**Key points:**

- Supreme Court condemns Chhattisgarh's iron-fist policy that labels human rights critics like Guha and Sundar as Maoists.
- Court rejects state's demand for constitutional sanction to use ruthless violence against citizens.
- SC attributes regional unrest to neo-liberalism's greed, false growth promises, and resource plunder ignoring the poor's suffering.
- Judges warn that elite-blind development paradigms lead to state failure and widespread misery.

**By Vipin**

* * *

**By: Surbhi Tandon (Communicating Reality Intern, CCS)**

On 5 July the Supreme Court of India expressed its views on economics and politics while hearing “Nandini Sundar versus the State of Chattisgarh”. We bring you two passages from the [hearing](http://www.thehindu.com/multimedia/archive/00679/Supreme_Court_judgm_679794a.pdf) that capture the crux of the SC bench’s view on politics and economics.

**On Politics**

“What was doubly dismaying to us was the repeated insistence, by the respondents, that the only option for the State was to rule with an iron fist, establish a social order in which every person is to be treated as suspect, and any one speaking for human rights of citizens to be deemed as suspect, and a Maoist. In this bleak, and miasmic world view propounded by the respondents in the instant case, historian Ramchandra Guha, noted academic Nandini Sunder, civil society leader Swami Agnivesh, and a former and well reputed bureaucrat, E.A.S. Sarma, were all to be treated as Maoists, or supporters of Maoists. We must state that we were aghast at the blindness to constitutional limitations of the State of Chattisgarh, and some of its advocates, in claiming that anyone who questions the conditions of inhumanity that are rampant in many parts of that state ought to necessarily be treated as Maoists, or their sympathizers, and yet in the same breath also claim that it needs the constitutional sanction, under our Constitution, to perpetrate its policies of ruthless violence against the people of Chattisgarh to  establish a Constitutional order.”

**On Economics**

“The culture of unrestrained selfishness and greed spawned by modern neo-liberal economic ideology, and the false promises of ever increasing spirals of consumption leading to economic growth that will  lift everyone, under-gird this socially, politically and economically unsustainable set of circumstances in vast tracts of India in general, and Chattisgarh in particular.

Neither the policy makers nor the elite in India, who turn a blind eye to the gross and inhuman suffering of the displaced and the dispossessed, provide any credible answers. Worse still, they ignore historical evidence which indicates that a development paradigm depending largely on the plunder and loot of the natural resources more often than not leads to failure of the State; and that on its way to such a fate, countless millions would have been condemned to lives of great misery and hopelessness.

Instead of locating the problem in the socioeconomic matrix, and the sense of disempowerment wrought by the false developmental paradigm without a human face, the powers that be in India are instead propagating the view that this obsession with economic growth is our only path, and that the costs borne by the poor and the deprived, disproportionately, are necessary costs.”

We highly recommend [this](http://www.livemint.com/2011/07/06221040/Joseph-Conrad-in-Chhattisgarh.html) Mint editorial on SC’s views on economics.

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Let’s Culture the Scheduled Castes/Tribes

Original: https://www.spontaneousorder.in/p/lets-culture-the-scheduled-castestribes

Author: Spontaneous Order

Published: 2011-07-03T22:44:20.000Z

Topics: higher-education, affirmative-action, caste-discrimination, student-support

> By: Ishu Kumar and Udita Singh (CCS Interns) The Indian Institute of Technology, Delhi has sanctioned “etiquette” classes for the Scheduled Caste/Scheduled Tribes students. What is striking is that the classes are meant exclusively for SC/ST students.

**Summary:**

IIT Delhi's exclusive 'etiquette' classes for Scheduled Caste/Scheduled Tribe (SC/ST) students are criticized as discriminatory, presuming these students are less cultured and in need of special training to blend in. A faculty member labels it 'apartheid,' contrasting with the program's stated goal of boosting confidence for those from different backgrounds. The post argues that adjustment challenges—such as adapting to fast-paced city life or English proficiency—are not caste-specific but common to students from rural areas, regardless of category. It highlights irony in assuming mainstream students need no such support. Foreign universities offer academic courses for non-English speakers based on need, not skin color. TISS director S. Parasuraman advocates non-segregated solutions: long-term support systems and better counselors for all rural and underprivileged students. From a classical-liberal perspective, caste-based segregation lacks empirical evidence for cultural inferiority claims, favoring assimilation and universal aid over divisive interventions.

**Key points:**

- IIT Delhi's etiquette classes exclusively for SC/ST students presume cultural deficits unique to castes, drawing apartheid comparisons from faculty.
- Rural adjustment issues like city life adaptation and English skills affect all underprivileged students, not just reserved categories.
- Foreign universities provide need-based academic support without racial or caste segregation.
- TISS director recommends universal long-term counseling and support systems instead of targeted training programs.
- No empirical evidence supports the notion that SC/ST students are inherently less cultured.

**By Vipin**

* * *

By: Ishu Kumar and Udita Singh (CCS Interns)

The Indian Institute of Technology, Delhi has sanctioned “etiquette” classes for the Scheduled Caste/Scheduled Tribes students. What is striking is that the classes are meant exclusively for SC/ST students. Ironically, there seems to be some degree of disagreement within the IITs itself.

A Times of India [article](http://articles.timesofindia.indiatimes.com/2011-06-30/india/29721284_1_iit-delhi-st-students-training-programme) quotes a head in IIT saying “in all logical integrity, it is meant to boost the confidence of students who come from a different background”, while it quotes an unidentified faculty IIT-D faculty member disagreeing on the same, “A campus is a symbol of assimilation of many minds and several lives. To carve out a group on the basis of their origins and put them through a training programme- I would term it nothing short of apartheid.”

Reality is, and many acknowledge that students coming from rural towns and cities find it a little hard to blend into the fast-paced city lives that their batchmates might have grown up in. However, that is a problem independent of caste. Interestingly, it is discriminating in another way, it presumes, those from the mainstream are in no need of such classes!

Several foreign universities have courses to cater to students from non-English speaking countries. These courses are a response to certain academic needs, and not based on color of skin. For arguments sake, if one were to accept that students from reserved categories are not academically as sound as general category students at the beginning of the university year, this would mean that India’s institutions could use alternate academic courses to support reserved category students (or other lagging students). In the same article, TISS director S Parasuraman puts very valid point across the table. According to him, it is not useful to segregate students at all. He rightly says, “Every student who joins IIT knows his/her maths, but may not be able to write good English. All students from rural and underprivileged backgrounds need adjustment but putting them through a training programme is not the answer. IIT-Delhi needs to have a long-term support system in place and hire better counsellors for every student, not just SC/STs or OBCs,” he says.

Hence, the only justification for a “lets culture them” course would be the proposition that scheduled castes are ‘less cultured’ than others, and we are yet to find any empirical evidence or scientific theory to support such a proposition!

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Measuring Sugar, Spice and All That is Nice

Original: https://www.spontaneousorder.in/p/measuring-sugar-spice-and-all-that-is-nice

Author: Spontaneous Order

Published: 2011-06-30T20:08:23.000Z

Topics: gdp, gross-national-happiness, economic-measurement, easterlin-paradox

> By: Snigdha Jain (CCS Intern) Economists love to measure, so much so that some say “science is measurement”. The most widely used measure is Gross Domestic Product (GDP). But some feel that it can be misleading because it fails to take into account na

**Summary:**

The post critiques Gross National Happiness (GNH) as a flawed alternative to Gross Domestic Product (GDP), advocating a classical-liberal preference for GDP's quantifiable, comparable metrics amid economists' love for measurement. Quoting Arvind Panagariya, it argues governments should prioritize reliable data on rural primary schools, health centers, land use, and ownership rather than subjective GNH computations. GDP includes 'bad' activities like pollution and crime but excludes unpaid services like child-rearing and volunteering; still, higher incomes enable choices and freedom, enhancing quality of life. The Easterlin paradox complicates this: higher incomes yield greater happiness cross-sectionally within countries, but national happiness plateaus despite rising GDP over time. GNH relies on subjective judgments, rendering it ordinal at best, not cardinal like GDP, with India's 35th ranking likely distorted by errors. It resists international comparisons due to cultural and temporal variations, like monsoon happiness in India versus Christmas in Germany. The piece humorously notes economists' 'inordinate fondness for measures,' akin to a biochemist's for beetles, urging focus on concrete data over 'nice' but vague indices.

**Key points:**

- Governments should collect reliable data on rural schools, health centers, and land rather than compute GNH.
- GDP enables international comparisons via standardized quantitative measurement, unlike subjective GNH.
- The Easterlin paradox reveals that rising national GDP does not increase average happiness over time.
- GNH's reliance on subjective judgments makes it prone to errors and unsuitable as a cardinal measure.

**By Vipin**

* * *

**By: Snigdha Jain (CCS Intern)**

Economists love to measure, so much so that some say “science is measurement”. The most widely used measure is Gross Domestic Product (GDP). But some feel that it can be misleading because it fails to take into account natural resource depletion, voluntary unpaid services and most important ‘how people feel’. Thus the invention of [Gross National Happiness](<http://en.wikipedia.or g/wiki/Gross_national_happiness>), which includes sugar, spice and all that is nice.

According to Arvind Panagariya, Professor of Economics at Columbia University, “The thumb rule seems to be — if you are unhappy with the Gross Domestic Product (GDP), go for Gross National Happiness (GNH).” He goes onto reason, “We do not even have reliable data on the condition of rural primary schools, primary health centers, land use, land ownership etc. If the government is really serious, then it should prioritize collection of such data rather than indulging in GNH computation. ”

GDP measure includes many things considered “bad” such as pollution, health problems, crime and family breakdown but excludes ‘many things nice’ such as helping friends and neighbours, child rearing and voluntary community service.  All of these activities combine to make up the core of our economics but are not taken into account.  Some will be quick to point out that an increase in income will automatically result in an increase in the quality of life, as this will allow them the freedom to make choices, and since choice is ‘always’ better, more income means more happiness.

In reality the relation between income and happiness is a bit more complex that the simple ‘more income more choice more happiness’ story. According to the “Easterlin paradox”, at any given point in time within a given country, people with the higher incomes do report  greater happiness.  However, rising per capita income does not necessarily result in rising national happiness.  In fact across time levels, happiness is found to remains the same irrespective of increasing GDP.

Gross National Happiness has its flaws too. How do we measure all that is nice? Firstly, since GNH is based on a series of subjective judgements, it can only be used as a qualitative measure, not a quantitative one like the GDP.  At best an ordinal measure not a cardinal one. India ranks 35 in the happiness index, the truth maybe very different though because of measurement errors involved. The one advantage GDP has over GNH is that GDP uses a more standard method of measurement and thus lends itself to international comparisons. Take for instance the monsoon: are Indians as happy during the monsoon as they are before it? And should we compare India’s happiness during or before the monsoon with the happiness of Germans during or after Christmas? Is it possible that Indians are happier during mornings while the French during evenings, and how do we control for that? And I can go on.

John Halden – British biochemist – in a conversation with a theologian was asked by the latter “What inference might one draw about the nature of God from a study of his works?” Haldane replied: “An inordinate fondness for beetles.” Economists have an inordinate fondness for measures, cute beings.

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Of Shakespeare and Maps

Original: https://www.spontaneousorder.in/p/of-shakespeare-and-maps

Author: Spontaneous Order

Published: 2011-06-27T23:27:42.000Z

Topics: education-reform, experiential-learning, rote-learning, learner-autonomy

> Surbhi Tandon and Udita Singh It is important that a young child grows to think beyond the confines of the four walls of a classroom. Stephen Spender, in his poem, ‘An Elementary School Classroom in a Slum’, stresses on the liberation of children away

**Summary:**

The post critiques the Indian education system's longstanding emphasis on textbooks and rote learning, labeling it the 'Banking Model' per Paulo Freire, which treats students as passive vessels, stifling critical thinking and creativity while disconnecting knowledge from real-world contexts. It praises Chennai's state government schools, where textbook shortages have spurred innovative experiential learning through market visits, historical coin collection, and study excursions, fulfilling Stephen Spender's poetic vision of breaking classroom confines to reveal green fields and azure worlds. Advocating a shift from teacher-centric to learner-centric approaches, it stresses connecting civic knowledge to local realities over abstract roles. CBSE's prior guidance on hands-on history via architecture, art, and crafts is highlighted. From a classical-liberal perspective, it demands national reforms for resource-based, non-rote education and innovation in funding and production across government and private systems, echoing Oscar Wilde: nothing worth knowing can be taught.

**Key points:**

- Chennai state government schools enable learning without textbooks via market visits, coin collection from historical dynasties, and excursions.
- Rote textbook focus embodies Freire's 'Banking Model,' inhibiting creativity by controlling student thinking and disconnecting from real life.
- Adopt learner-centric methods over teacher-centric, linking knowledge to local social contexts like civic bodies' locations.
- CBSE advises experiential history through appreciating architecture, art, textiles, and instruments instead of textbook exams.
- Pursue national reforms for resource-based learning and innovation in education funding/production in government and private sectors.

**By Vipin**

* * *

**Surbhi Tandon and Udita Singh**

It is important that a young child grows to think beyond the confines of the four walls of a classroom. Stephen Spender, in his poem, ‘An Elementary School Classroom in a Slum’, stresses on the liberation of children away from classrooms:

‘Unless, governor, teacher, inspector, visitor,  
This map becomes their window and these windows  
That shut upon their lives like catacombs,  
Break O break open ’till they break the town  
And show the children green fields and make their world  
Run azure on gold sands, and let their tongues  
Run naked into books, the white and green leaves open  
History is theirs whose language is the sun.’

Imagine our school going children, often seen with back-breaking school bags, in the absence of textbooks, learning concepts by visiting local markets, collecting coins of various historical dynasties and going on study excursions. They witness a world beyond Shakespeare and the Sciences. This is exactly what is underway in Chennai’s [state government schools](http://www.thehindu.com/education/issues/article2126850.ece), where in absence of textbooks children are learning by such creative means.

The focus of Indian education system has unfortunately been on textbooks and rote learning since time immemorial. A textbook is a resource tool for initiating the learning process but for Indian classrooms it has merely become a way of acquiring knowledge. Paulo Freire, a Brazilian educator calls such a system the ‘Banking Model of Education’ in which the student is viewed as an empty account to be filled by the teacher. He observes that it transforms students into receiving objects, while attempting to control thinking and action, leading men and women to adjust to the world. This inhibits their creative power. Such a system not only hampers the process of critical and creative thinking but also creates a wedge between the texts and real world outside.

Often, teachers believe that a teacher-centric approach would be best for children. This belief requires a rethink. The approach should rather be learner-centric and must ensure learner autonomy. Four walls should be interchanged with learning in a larger social context. It is important that a child knows which civic bodies reside in his locality and where they are to be located rather than merely learning about their roles and functions.

What we need is a system that encourages children to analyse people, events and ideas and to discriminate and judge for themselves. Knowledge ought to be connected to life outside school. The Central Board of Secondary Education (CBSE) has in the past advised schools to train kids to appreciate architecture, analyse paintings, feel the textures of terracotta and wonder at how textiles are designed or how musical instruments are crafted, as part of their history sessions rather than just restrict themselves to textbook chapters and exams related to them. Also, there is an urgent need to for education reforms at a national level and the time has never been more so fundamental when there is a glaring need for resource-based education. Encouraging learning shifts away from rote is another area that needs focus.

Oscar Wilde once said, ‘Education is an admirable thing, but it is well to remember from time to time that nothing that is worth knowing can be taught.’ Ponder. What we need is innovation in education, the way is funded, the way its produced, both in the government and private system.

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Alice in Wonderland

Original: https://www.spontaneousorder.in/p/alice-in-wonderland

Author: Spontaneous Order

Published: 2011-06-24T22:24:13.000Z

Topics: wildlife-migration, environmental-concerns

> By: Ishu Kumar and Udita Singh (CCS Interns) Alex the Lion: The wild? Are you nuts? That is the worst idea I have ever heard! Melman the Giraffe: It’s unsanitary! Marty the Zebra: The penguins are going, so why can’t I? Alex the Lion: Because the peng

**Summary:**

This whimsical post by CCS interns describes 'Happy Feet', an Emperor Penguin that swam over 2000 miles to Peka Peka Beach in New Zealand, diverting from its typical path to South America. It notes global media attention and scientific speculation that the penguin swam into unfamiliar territory, amid concerns that offshore oil exploration might disrupt migratory patterns. Referencing films like Madagascar and March of the Penguins, it highlights the species' arduous annual mating journeys. The New Zealand government initially opted to let nature take its course but relocated the penguin to Wellington Zoo after crowds gathered; it later underwent two surgeries to remove sand from its stomach. Drawing parallels to a Bolivian boy who ended up in Chile while seeking his mother, the post offers a light-hearted moral: embrace wrong turns, as they make memorable journeys. No policy arguments are presented.

**Key points:**

- An Emperor Penguin swam over 2000 miles to New Zealand, sparking concerns about oil drilling's impact on migrations.
- New Zealand authorities relocated 'Happy Feet' to a zoo and performed surgeries after it ingested sand.
- The story encourages taking 'wrong turns' in life for enriching experiences.

**By Vipin**

* * *

**By: Ishu Kumar and Udita Singh (CCS Interns)**

[Alex the Lion](http://www.imdb.com/name/nm0001774/): The wild? Are you nuts? That is the worst idea I have ever heard!

[Melman the Giraffe](http://www.imdb.com/name/nm0001710/): It’s unsanitary!

[Marty the Zebra](http://www.imdb.com/name/nm0001674/): The penguins are going, so why can’t I?

[Alex the Lion](http://www.imdb.com/name/nm0001774/): Because the penguins are psychotic

**–         Madagascar, 2005**

Psychotic maybe, but certainly on a backpacking trip is this Emperor Penguin. Travelling more than 2000 miles, a lost black and white stranger has been around Peka Peka Beach, New Zealand. The curious Emperor Penguin apparently got diverted from its path and rather than ending up in South America, where Emperor penguins are sighted regularly, landed on the other side of the map.

The world’s largest penguin species has garnered much attention. In the ‘Global Village’ of news we reside in, a wrong turn has made ‘Happy Feet’, the name which we have fondly assigned to him, the [talk](http://www.stuff.co.nz/environment/5179997/Emperor-penguin-must-find-own-way-home) of the World. But it seems impossible to look at the photos of this penguin and get angry!

So, how and why did this lost penguin land up in New Zealand?  The scientific community has been prompt to say it probably swam its way into unknown [territory](http://www.abc.net.au/worldtoday/content/2011/s3250206.htm) (YES, Penguins cannot fly). But warnings have been out about the shift in migratory patterns of penguins. Some worry that offshore oil exploration and drilling platforms will interfere with the penguins. Migratory routes and patterns are important to map because of man’s demand for oil that can be drilled offshore. There is now a question as to whether this particular instance should be taken as a signaling to a larger cause of worry.

Usually, every year, Emperor Penguins make an unprecedented journey through the harshest climatic conditions on earth to mate (a matter we discuss in greater detail in the to be soon published ‘The Difficulty of Being a Penguin and Other Bed Time Stories’). So far no penguin has completed a full migration without stopping. National Geographic’s fabulous documentary, *[March of the Penguins](http://www.imdb.com/video/screenplay/vi1452605721/)* captures the beauty of this journey in an exceptional manner.

What the New Zealand Government has to say is interesting. With the inflow of locals and news cameras, the government has decided to let nature take its course. No rehabilitation for happy feet. For the time being, wildlife experts have transported ‘Happy Feet’ to [Wellington Zoo](http://www.foxnews.com/world/2011/06/23/confused-emperor-penguin-lands-on-new-zealand-beach-transported-to-zoo/).

However, its condition soon deteriorated, the penguin has undergone two surgeries in order to remove sand from its stomach.

Then again, we humans shouldn’t be talking, or writing, or even reading about lost penguins. We ain’t much better at directions! The concept of taking wrong turns and landing up in unchartered territory is not a new one. Take Franklin Huanaco for instance, fellow ran away from home in Bolivia hoping to be reunited with his mother but ended up in [neighboring](http://www.guardian.co.uk/world/2011/may/12/bolivian-boy-find-mother-chile) Chile.

Moral of the story? Go out there, take the wrong turns. You never know where you’ll end up, but you’ll definitely remember the journey! Hope Mr. Happy Feet is reading this.

[

![](https://substackcdn.com/image/fetch/$s_!Ekxw!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fab7ae486-39a7-4770-ac21-37ab9397127b_458x333.jpeg "FunnyPart-com-sneaky_penguin")



](https://spontaneousorder.in/alice-in-wonderland/funnypart-com-sneaky_penguin/)

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Media – To Be Or Not To Be

Original: https://www.spontaneousorder.in/p/media-to-be-or-not-to-be

Author: Spontaneous Order

Published: 2011-06-23T22:53:23.000Z

Topics: media-regulation, self-regulation, journalism-education, broadcasting

> By: Snigdha Jain (CCS Intern) The Hindustan Times recently reflected upon the popularity of media education in Delhi University. Almost 2000 applicants sat for the Combined Journalism Entrance Test (CJET), highlighting the growing interest in journali...

**Summary:**

The post highlights surging interest in journalism education in India, with nearly 2000 applicants for Delhi University's Combined Journalism Entrance Test (CJET), amid the explosion of TV news channels demanding quality output. It identifies a core dilemma in Indian media—tension between speed and accuracy, exacerbated by competitive pressures, commercial demands, and editorial hierarchies that distort news priorities and degrade quality. Drawing from a British Council workshop with UK journalist Bob Calver, it contrasts India's unregulated broadcasting with the UK's Ofcom, which enforces quality via competitive tender licenses requiring fixed annual cash bids (RPI-adjusted) plus fees on advertising/sponsorship revenue, as per the Ofcom Section 400 License Fees report for 2009/10. Calver critiques Indian reporters' over-dominant on-air style, favoring stories letting interviewees and visuals speak. Echoing Pramod Kumar, it notes media's shift toward agendas like pitting civil society against government without regulatory oversight. From a classical-liberal viewpoint, government regulation is rejected as it undermines media's role checking state power; instead, self-regulation by media's 'collective conscience'—bolstered with more authority—is proposed, citing past examples like NDTV initiatives.

**Key points:**

- Nearly 2000 applicants competed in Delhi University's CJET, signaling booming demand for journalism education amid TV news proliferation.
- Indian media quality suffers from competitive and commercial pressures distorting news priorities and favoring sensationalism over accuracy.
- UK's Ofcom regulates via licenses with fixed cash bids and revenue-based fees to ensure broadcasting standards.
- Self-regulation, not government intervention, is essential to maintain media's watchdog role against the state.

**By Vipin**

* * *

**By: Snigdha Jain (CCS Intern)**

The Hindustan Times recently reflected upon the popularity of media education in Delhi University. Almost 2000 applicants sat for the Combined Journalism Entrance Test (CJET), highlighting the growing interest in journalism education.

With the explosion of TV news channels, the demand for quality information and output has  increased exponentially. Today, the media industry faces a great dilemma for quality control. Ellen Goodman–American writer and Pulitzer Prize winner–once said “In journalism there is always a tension between getting it first and getting right”, and this is only of the dilemmas faced by the burgeoning news industry in India.

Recently The British Council, New Delhi organized a media workshop where I had the opportunity to meet Bob Calver, a print and broadcast journalist for the past 40 years, currently teaching at Birmingham City University’s School of Media.  Interacting with him personally, opened the window through which I saw the difference between media practices in the UK and India. One of the points he focused on was the need to regulate media practices in India to deal with the recent explosion of broadcast news production. He went on to say that *Ofcom* in the UK is a communications regulator that ensures quality and regulates the content in TV and radio sectors.  For example, the ‘*Ofcom* Section 400 License Fees and Penalties Account 2010’ report says “The Broadcasting Act 1990 required that certain television and radio licenses should be awarded after a process of competitive tender. The applicable licenses for the 2009/10 accounts are the television programmes services for Channel 3, Channel 5, Public Teletext, commercial additional services licenses and the national radio and additional services licenses.  Holders of these licenses are required to make additional payments to Ofcom. These payments are made up of two components: a pre-determined annual fixed payment (known as cash bids) which is increased annually in line with RPI; and a fee based on a percentage of the broadcasters’ advertising and sponsorship revenue (qualifying revenue).”

It is evident that UK’s media industry has developed around a heritage of certain sets of TV news practices and conventions. One of the journalists present raised the question that had been weighing on everyone’s mind, a question about the challenges associated with the peculiar position of a journalist within a typical Indian media firm which involves an extremely competitive environment, commercial pressures on reporters, authoritative editorial staff members and above all, the way competition is structured within the TV news broadcasting industry itself.  We arrived at the conclusion that all these external pressures lead to a distortion of news priorities and thus results in a decline in the quality of the news being aired.

One thing that immediately comes to mind when talking about distortion, is Mr. Calver’s reference to the way reporting is done here on Indian news channels, with the tendency for the majority of the reporters to spring up like some jack in the box and dominate the whole narrative of the story being told, rather than letting the interviewees and pictures speak for themselves. In his view, that would allow for more scope and come across as a better crafted script.

Pramod Kumar, on 21st June 2011 wrote, “The media has discarded tenets of professional journalism and taken on the task of pitching this ‘civil society’ against the government.” Like Mr. Calver, he too seems to have picked up on the fact that without the authority of regulatory forces ruling over media with an “iron fist”, news broadcasting has become more of a platform to display hidden agendas rather than present an unbiased, uniform view of the way things are.

The market for press is a strange one. For one I feel that there is a need for some checks and balances, but these can’t come from the government because the media itself ought to check the excess of the state. Perhaps the answer lies in self-regulation. Indian media has in the past acted with a ‘collective conscience and intelligence’ (click [here](http://www.ndtv.com/news/blogs/live_from_the_newsroom/media_and_self-regulation.php) for example), all we need is to give more teeth to institutions which represent such a collective effort.

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Judges, Don’t Preach

Original: https://www.spontaneousorder.in/p/judges-dont-preach

Author: Spontaneous Order

Published: 2011-06-22T22:41:45.000Z

Topics: judicial-overreach, judicial-activism, marriage-autonomy, rule-of-law

> Surbhi Tandon & Snigdha Jain (CCS Interns) A judge’s obligation to the public starts and ends with his or her analysis of the law, its correct use, not with the preaching of personal beliefs or preferences. Chief Justice S H. Kapadia once said, “High.

**Summary:**

The post criticizes the Karnataka High Court for dismissing a habeas corpus petition by a Bangalore resident seeking reunion with his newly married wife, allegedly detained by her parents, on grounds that girls below 21 cannot judge a partner's character and require parental consent for marriage, with judges stating parents bear the brunt of unsuccessful marriages. Echoing Chief Justice S.H. Kapadia's admonition that judges should apply legal principles without lecturing society or imposing personal values, the author argues judges must limit themselves to facts and law, not act as moral custodians enforcing conservative norms. This overreach persists amid a massive judicial backlog of 32,127,796 pending cases as of October 2010. Further examples include former Chief Justice K.G. Balakrishnan suggesting 'due regard' to rape victims marrying perpetrators, and the Orissa High Court offering a rapist marriage to the victim or jail. From a classical-liberal viewpoint, such judicial moralizing undermines impartial justice. The solution is a judicial code of conduct to eliminate ethical biases and ensure verdicts adhere strictly to law, concluding: judges, don't preach.

**Key points:**

- Karnataka High Court dismissed habeas corpus for an 18-year-old's marriage, mandating parental consent for girls under 21 and deeming them incapable of judging partners.
- Judges must confine themselves to legal principles, avoiding imposition of personal values, as per Chief Justice Kapadia.
- Indian courts face 32,127,796 pending cases, yet some judges prioritize moral preaching over backlog clearance.
- Judicial moralizing examples include pressuring rape victims to marry perpetrators.
- Indian judges need a code of conduct to deliver unbiased verdicts free from conservative social norms.

**By Vipin**

* * *

**Surbhi Tandon & Snigdha Jain (CCS Interns)**

A judge’s obligation to the public starts and ends with his or her analysis of the law, its correct use, not with the preaching of personal beliefs or preferences.  Chief Justice S H. Kapadia once said, “High Courts and the Supreme Court are courts of principles. The judges should not speak anything beyond the principles of a particular case. Let us not give lectures to the society. The problem is sometimes we judges impose our own values, our own likes or dislikes on the society”. The Karnataka High Court seems to have missed this message.

Last week the Karnataka High Court [dismissed](http://in.education.yahoo.com/news/yedumailtoday/hc-feels-18-too-early-girls-fall-love-20110607) a habeas corpus petition (a legal writ which allows a person to be free of unlawful detention) by a Bangalore resident seeking reunion with his newly married wife, who he claimed was being illegally detained by her parents. The court observed that girls below the age of 21 cannot judge the character of the person they choose to marry. The court further observed that a girl below 21 years must have the consent of her parents in order to get married. “Parents should choose the boy for a girl aged below 21, as it is they who bear the brunt of an unsuccessful marriage,” the Bench said. Is this just a ‘judgment’ or a generalized appraisal of a women’s inability to choose a suitable life-partner? Judges act as the new age custodians of morality who feel the need to define what is ethically correct and incorrect. Judges when delivering judgments ought to remember that their sole duty, as the upholders of the judiciary, is to pass verdicts based on facts and laws, not on what they perceive ought to be done.

The Supreme Court revealed, in February this year, that 3,21,27,796 cases were still pending in Indian Courts as of October 2010.  Some judges, it seems, find time to ‘arrange marriages’ despite the logjam of cases.  The Karnataka High court is no exception when it comes to the judiciary preaching moral norms. Former Chief Justice K. G. Balakrishnan thought that “due regard” should be given to a rape victim’s wish if she “chooses” to marry the rapist, or have the baby conceived as a result of this forced crime. Given the Indian social fabric one can imagine how much of a “choice” such a “choice” is.  A sample of such magnanimity was on display at the Orissa High Court in May 2009 on the hearing of a Cuttack district rape case. The Court gave the perpetrator a pick: either languish in jail or marry the victim.  A strange sense of justice indeed.

The way ahead for fair judicial verdicts lies in Indian judges developing a code of conduct which enables them to perform their duties without any moral or ethical bias; one which does not dictate what is right or wrong according to conservative social norms. The conclusion being, don’t preach!

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Slut Walk: Why Not ?

Original: https://www.spontaneousorder.in/p/slut-walk-why-not

Author: Spontaneous Order

Published: 2011-06-20T11:15:07.000Z

Topics: slut-walk, victim-blaming, gender-stereotypes, individual-rights

> Surbhi Tandon & Ishu Kumar (CCS Interns) From eve-teasing in public spaces to molestation inside buses to sexual abuse at work places, an urban woman in Delhi has to face it all. Reiterating similar thoughts Umang Sabharwal , a Delhi University student,..

**Summary:**

The post defends the proposed Slut Walk in New Delhi, initiated by Delhi University student Umang Sabharwal, as a response to pervasive victim-blaming in cases of violence against urban women, from eve-teasing to workplace abuse. Sabharwal argues that women have the right to choose their clothing, profession, or sexual partners without justifying violence, aiming to shift focus from victims to perpetrators and challenge gender stereotypes. Countering critics like Amrit Dhillon in Hindustan Times, who claims Slut Walk is elitist amid graver issues like 10 million female foeticides, dowry deaths, honour killings, domestic violence, Dalit humiliations, and child prostitution, the author asserts that addressing dress freedom is a valid issue in itself, not precluding fights against other problems. Dhillon's point about non-Indian women dressing conservatively due to cultural differences is reframed as evidence of the problem Slut Walk targets. Seema Goswami's analogy comparing provocative dress to leaving a door unlocked is rejected as objectifying women and accepting flawed social norms, with Slut Walk seeking to challenge such attention and norms from a classical-liberal emphasis on individual rights over conservative impositions.

**Key points:**

- Slut Walk addresses victim-blaming by refocusing on perpetrators rather than women's clothing choices.
- Critics' lists of severe issues like 10 million female foeticides do not invalidate the right to dress freely as a standalone concern.
- Requiring conservative dress due to 'cultural differences' exemplifies the gender stereotypes Slut Walk challenges.
- Analogies equating women to unsecured houses accept problematic norms that the walk aims to contest.

**By Vipin**

* * *

**Surbhi Tandon & Ishu Kumar (CCS Interns)**

From eve-teasing in public spaces to molestation inside buses to sexual abuse at work places, an urban woman in Delhi has to face it all. Reiterating similar thoughts Umang Sabharwal , a Delhi University student, came up with idea of staging a [Slut Walk](http://en.wikipedia.org/wiki/SlutWalk) in New Delhi. It is a spark from the fire created by women in Toronto. Umang [says](http://www.hindustantimes.com/Revealing-the-face-of-Delhi-SlutWalk/Article1-711661.aspx):

“We all know how unsafe Delhi is, violence happens to women in public spaces and every time it happens we never question the perpetrator of the crime, instead we lecture the girl about what they’re supposed to wear and where not to go. Gender stereotypes obligate us to be a certain way; they block our right to life. I have the right to go out, choose my clothes, profession or number of sexual partners and none of these could justify violence against me. We should be proud of our sexuality and who we are. It’s about time that we stop telling each other to ‘behave’ ourselves. The purpose of the walk is to shift the focus from the victim to perpetrator”

Some experts believe the idea of this Slut Walk is very elitist. They feel that the nature of this walk is more concerned with having fun rather than addressing critical issues faced daily by women in Delhi. Today we counter some of the arguments against the slut walk put forth in mainstream media.

In an [article](<http://www.hindustantimes.com/SlutWalk-mocks-Indian-women-real-issues/H1-Article1-711363.aspx >) published in the Hindustan Times on 20th June 2011,  Amrit Dhillon argues :

*(1) “In a country where 10 million babies have been killed in the womb because they were girls, where women are burnt for dowry, murdered in honour killings, face domestic violence so frequent it’s as common as a power cut, where Dalit women fear sexual humiliation by upper caste men and where young girls are forced into prostitution, who needs the right to dress like a slut?”*

The conclusion doesn’t logically follow from the premises. The safety of women and their right to dress as they wish is an issue in itself and need not be mixed with the many problems faced by Indian women. While the Slut Walk focuses on one issue, it doesn’t prevent others from fighting for other issues.

*(2) “My non-Indian friends in Delhi dress more conservatively than they would do in London or New York because they are aware of the cultural differences and wish to protect themselves against possible misinterpretation.”*

“Cultural difference” often is the trade name for abiding by conservative norms. The fact that womyn from London and New York need to dress differently in Delhi is itself a reflection of a problem which the Slut Walk aims to address.

(3) In a  recent article titled *Slut Walk,No thanks,* Seema Goswami writes:

*“Let’s look at this in another way. Let’s say you decide that it is your right as a law-abiding citizen to leave your front door unlocked when you go out. Is this likely to attract the attention of your friendly neighborhood burglar? Probably. Is it more likely that you will be robbed as a consequence? Of course.”*

It is rather odd to compare a woman to a house, and reflects the authors underlying opinion. But that apart. Attention can take many forms, the whole point of the Slut Walk is to challenge certain kinds of attention. While Seema takes certain social norms to be ‘given’, the Slut Walk aims to challenge them.

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## The Missing Media

Original: https://www.spontaneousorder.in/p/on-tamashas-and-studios

Author: Spontaneous Order

Published: 2011-06-19T23:44:46.000Z

Topics: traditional-media, folk-arts, rural-urban-divide, cultural-preservation

> Udita Singh and Ishu Kumar (CCS Communicating Reality Interns) In his latest piece, Rajdeep Sardesai describes the media as a double-edge weapon. Media seems to be the word of decade. The role of the media is greater now than ever before. Mass media ta...

**Summary:**

While mass media like TV news acts as a double-edged sword—crusading, reflecting society, silencing some, and fueling revolutions—a vital 'silent' traditional media thrives in India's communities through oral traditions, folk customs, and performing arts. This latent medium, unique to regions, celebrates age-old cultures via songs, dances, ballads like Maharashtra's Powada (used by Government of India-UNDP for disaster preparedness and community participation), Jatra folk opera (promoted by NGOs like Kalaboti Mudra in Bengal and beyond), and puppetry (revived by Ishara Puppet Theatre Trust since 1986, with annual festivals propagating folklore and educational programs). Fishermen sing of their catches, Assamese women dance Bihu, and communities gather under banyan trees for these expressions, which adapt to contemporary themes like independence struggles. These forms support campaigns from polio immunization to rural savings accounts. The author warns of a dangerous rural-urban divergence in information and entertainment sources, especially with millions migrating to cities soon, urging dialogue between mass and traditional media to ensure all voices survive and integrate.

**Key points:**

- Mass media dominates discourse, but traditional media via folk arts like Powada, Jatra, and puppetry serves as a powerful, community-driven communicator.
- Government-UNDP leverages Powada for disaster preparedness, while NGOs like Kalaboti Mudra promote Jatra to document tribal knowledge.
- Ishara Puppet Theatre, founded in 1986, revives puppetry for folklore propagation and education through festivals and programs.
- Traditional media aids social campaigns such as polio immunization and rural banking.
- Urgent dialogue needed between mass and traditional media to bridge rural-urban divides amid mass migration.

**By Vipin**

* * *

***Udita Singh and Ishu Kumar (CCS Communicating Reality Interns)***

In his latest piece, Rajdeep Sardesai describes the *media* as a [double-edge weapon](http://ibnlive.in.com/blogs/rajdeepsardesai/1/62481/tv-news-a-zero-sum-game.html). Media seems to be the word of decade.  The role of the media is greater now than ever before. Mass media takes on multiple facets; a crusader, a reflection of society in transformation, an activist and a powerful force to reckon with. Its effects on us are worth observing. It creates a spiral of silence in some places, and acts as the only agent of communication in revolutions elsewhere. It has challenged existing governments on their intentions and has driven thousands to be more aware of the times they live in.

But, another media exists in our society. It is silent, undiscovered, lies latent and its currency is the people.

This media comes alive when the brethren of a community come together in high spirits, in a *maidaan* or a stage, where they celebrate their age-old cultures and mythos. As the air fills with melodious *ragas* and rhythms, people rejoice what their community has kept guarded since time immemorial. Tired fishermen, after sailing the high seas come to land and sing songs, joyous of their catch. Similarly, women in Assam sing and dance as *Bihu* sets in.

Oral Tradition, social folk customs and performing arts together make traditional media for what it is: a form of expression, unique to different regions and sections of societies across India. Each region boasts of their unique customs and ceremonies. The needs and joys of people’s life find an expression in folk art, literature and performing arts.

The *harmonium, dafli, and dhol* distinctly resonate in one’s ears for long when [Powada](http://www.youtube.com/watch?v=0MebHeVGXEI), a ballad from Maharashtra is sung. Improvisation and rendition often make them more relevant to the times as themes range from good vs evil to  the struggle for independence. The  Government of India-United Nations Development Programme (UNDP), has creatively used *Podwa* to educate soldiers and increase community participation in the disaster preparedness process.

[

![](https://substackcdn.com/image/fetch/$s_!YJGZ!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F768fc0de-9426-4c94-806e-1685fa4af141_247x190.jpeg "A singer performing Powada, a ballad from Maharashtra")



](https://spontaneousorder.in/on-tamashas-and-studios/bacs/)

A singer performing Powada, a ballad from Maharashtra

Similarly, Kalaboti Mudra, an NGO, engages with folk-tribal communities of Bengal to document and promote traditional knowledge systems of these communities. It patronizes *Jatra*, an opera-type folk drama, popularly performed in West Bengal, Assam, Orissa and Tripura.

[

![](https://substackcdn.com/image/fetch/$s_!y2Ml!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fee3a9f92-1ec6-45ad-b63a-f47e15443344_3872x2592.jpeg "A jatra actor prepares before a performance")



](https://spontaneousorder.in/on-tamashas-and-studios/kjhasd/)

The charming art of puppetry too, is one of the major forms of traditional communication that has seen a revival. Dada Pudumjee, in 1986 created the [Ishara Puppet Theatre Trust](http://www.isharapuppet.com/IsharaPuppets/index.htm) that holds an annual festival, propagating folklore through puppetry and producing educational programmes.  As communities gather under ageing banyan trees to witness the bewitchment of string and shadow puppets, this art remains the favourite amongst the masses.

Such forms of artistic communication have benefited a variety of campaigns ranging from Polio immunization camps to encouraging people to open saving bank accounts in rural areas.

All forms of communication have a social aspect to them; but it would only be fair if enough room is given for all to survive. The terrible danger is of divergence in the source of information and entertainment between rural and urban India. Perhaps we need more dialogue between the two different forms of social expression. A country where a few hundred million are likely to migrate from villages to cities in the foresee able future cannot do without such a dialogue.

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Bastiat Comes to Dilli

Original: https://www.spontaneousorder.in/p/bastiat-comes-to-dilli

Author: Spontaneous Order

Published: 2011-06-18T23:17:52.000Z

Topics: nrega, rural-livelihoods, bastiat, government-intervention

> Two weeks ago the Government of India launched the National Rural Livelihoods Mission (NRLM), from a policy point of view not very different from the NREGA. Mint wrote a wise editorial on the NRLM on Thursday 16 June, read here. Imagine Frederic Basti...

**Summary:**

The post critiques India's National Rural Livelihoods Mission (NRLM), launched two weeks prior to mid-June 2011, as policy-similar to NREGA and references a critical Mint editorial from 16 June 2011. Imagining Frederic Bastiat lecturing Parliament on these schemes, it quotes his 'Economic Sophisms' to contrast two doctrines: one viewing wealth as the result of labor, favoring progress via machines, exchange, intelligence, competition to maximize output per effort; the other treating effort itself as wealth, akin to Sisyphus's toil, endorsing privileges, monopolies, restrictions, and suppression of machinery to increase exertion while diminishing results. Universal human practice aligns with the first—seeking more with less—while theorists, legislators, and statesmen peddle the second, experimenting harmfully on society despite personally following efficiency principles. The classical-liberal framing indicts NRLM-NREGA as exemplars of this fallacious 'Sisyphism,' prioritizing unproductive labor over genuine wealth creation, with policymakers contradicting sound economics under the guise that 'there are no absolute principles' in political economy.

**Key points:**

- NRLM mirrors NREGA's flaws, as critiqued in Mint's 16 June 2011 editorial.
- Bastiat's lens reveals government schemes as promoting 'Sisyphism'—valuing effort over productive results.
- True wealth grows by increasing the ratio of results to effort through competition, machines, and exchange.
- Legislators impose anti-efficiency policies on society while personally seeking maximal output from minimal effort.

**By Vipin**

* * *

Two weeks ago the Government of India launched the National Rural Livelihoods Mission (NRLM), from a policy point of view not very different from the NREGA. Mint wrote a wise editorial on the NRLM on Thursday 16 June, read [here](<http://www.livemint.com/2011/06/16214540/Another-flawed-rural-scheme.html >).

Imagine Frederic Bastiat were invited to the parliament in Delhi to a deliver a lecture on NREGA-NRLM. We leave you with a quote from [Economic Sophisms](<http://www.econlib.org/library/Bastiat/basSoph1.html#S.1, Ch.3, Effort and Result>), perhaps this is how Bastiat would have began the talk:

We have just seen that there are obstacles between our wants and their satisfaction. We succeed in eliminating these obstacles or in lessening them by employing our productive capacities to overcome them. Thus, it may be said, in a very general way, that industry is an effort followed by a result.

But what constitutes the measure of our well-being, that is, of our wealth? Is it the result of the effort? Or is it the effort itself? There is always a ratio between the effort applied and the result obtained. Does progress consist in the relative increase in the first or in the second term of this ratio?

Both theses have had their defenders, and political economists are divided in their opinions about them.

According to the first thesis, wealth is the result of labor. It increases proportionately to the increase to the *ratio of result to effort.* Absolute perfection, whose archetype is God, consists in the widest possible distance between the two terms, that is, a situation in which no effort at all yields infinite results.

The second contends that effort itself constitutes and measures wealth. To progress is to increase the *ratio of effort to result.* Its ideal may be represented by the toil of Sisyphus—at once barren and eternal.

Naturally, the proponents of the first doctrine welcome everything that tends to diminish exertion and to increase output: the powerful machines that add to the strength of man; exchange, which permits him to get a better share of the natural resources that are distributed in varying amounts on the face of the earth; intelligence, which makes discoveries; experience, which confirms hypotheses; competition, which stimulates production; etc.

Just as logically, the proponents of the second doctrine welcome everything that has the effect of increasing exertion and of diminishing output: privileges, monopolies, restrictions, interdictions, the suppression of machinery, infertility, etc.

It is well to note that the *universal practice* of mankind is always guided by the principle on which the first doctrine is founded. No one has ever seen, and no one ever will see, any person who works, whether he be farmer, manufacturer, merchant, artisan, soldier, writer, or scholar, who does not devote all the powers of his mind to working better, more quickly, and more economically—in short, *to doing more with less.*

The opposite doctrine is the stock in trade of theorists, legislators, journalists, statesmen, and cabinet ministers—men, in brief, whose role in this world is to conduct experiments on the body of society.

Yet it is notable that, with respect to their personal concerns, they act on the same principle as everyone else; that is, they seek to obtain from their labor the greatest possible quantity of useful results.

People will perhaps think I am exaggerating, and that there are no real *Sisyphists.*

If this means that in practice no one carries the principle to its logical extreme, I willingly agree. This is always the case when one starts from a false premise. It soon leads to such absurd and injurious consequences that one is obliged to stop short. That is why it is never the practice of industry to permit *Sisyphism;* the penalty would follow the mistake too closely not to expose it. But in the realm of speculation, such as theorists and statesmen engage in, one can cling to a false principle for a long time before being made aware of its falsity by its complex practical consequences, especially in areas with which one is unfamiliar; and when these finally do reveal their origin, one adopts the opposite principle, thereby contradicting oneself, and seeks justification in that incomparably absurd modern axiom: In political economy there are no absolute principles

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Inflationary Ideas

Original: https://www.spontaneousorder.in/p/inflationary-ideas

Author: Spontaneous Order

Published: 2011-06-17T23:05:04.000Z

Topics: inflation, monetary-policy, central-banking, cantillon-effect

> By: Surbhi Tandon (Intern, CCS) and Vipin P. Veetil (Research Guide, CCS) “The monetary stance remains firmly anti-inflationary…” said D Subharao – Governor of the Reserve Bank of India – on Thursday 16 June. If the very institution with a monop

**Summary:**

The post argues from a classical-liberal perspective that inflation in India stems directly from the Reserve Bank of India's (RBI) excessive production of base money (M0: notes and coins), contradicting RBI Governor D Subbarao's claim of an 'anti-inflationary' stance. RBI data shows notes and coins in circulation surged from ₹12.92 billion in 1951-52 (index 100) to ₹9.495 trillion in 2010-11 (index 73,500), a 735-fold increase far outpacing real goods and services growth. Unlike endogenous broader money measures (M2, M3) driven by economic activity, exogenous M0 is monopolized by RBI. The Cantillon effect explains the 'deceitful circularity': new money first reaches banks, large businesses, and government, allowing them to bid up resources at pre-inflation prices, while later recipients like the masses bear the full brunt. Quoting Ambedkar, the post warns against government-managed currency due to lack of accountability compared to private banks. Solutions include Hayek's denationalization of money (private currencies) or Friedman's rule of matching money supply growth to real output growth. Intern anecdotes highlight everyday impacts on the young and middle class.

**Key points:**

- RBI's notes and coins in circulation grew 735 times from 1951-52 to 2010-11, exceeding real economic growth and causing inflation.
- The Cantillon effect means new RBI money benefits elites first (banks, businesses, government) at old prices, burdening the masses last.
- Ambedkar cautioned against government-managed currency due to higher mismanagement risk without private loss accountability.
- Alternatives to RBI monopoly: Hayek's private money system or Friedman's matching money growth to real output.

**By Vipin**

* * *

**By: Surbhi Tandon (Intern, CCS) and Vipin P. Veetil (Research Guide, CCS)**

“The monetary stance remains firmly anti-inflationary…” [said](http://banking.contify.com/story/inflation-above-comfort-zone-may-be-revised-upward-rbi) D Subharao – Governor of the Reserve Bank of India – on Thursday 16 June. If the very institution with a monopoly over production of money in India is fighting inflation, then who is causing it?

Money is a tricky good. Like other commodities it too dances to the tunes of demand and supply, yet like Escher’s Waterfall it lives a deceitful circularity. Imagine a bumper harvest of rice, what happens to the price rice? Simple, it falls. Money is no different, the greater the supply of money relative to demand, lower the price of money, in other words  higher the price of all other goods in terms of money aka inflation.

Economists have different measures of money, ranging from M0 which essentially means ‘notes and coins in circulation’ to M3 which includes ‘term deposits in banks’. Some measures of money are endogenous to an economy, i.e. proceeding from within the economy. More intense economic activity may lead to increases in savings deposits and term deposits, thereby increasing broad measures of money like M2 and M3. But M0 is an altogether different animal; the RBI has a legal monopoly for minting money, i.e. it is largely exogenous to an economy. We decided to snoop in on some RBI [data](http://dbie.rbi.org.in/InfoViewApp/listing/main.do?appKind=InfoView&service=%2FInfoViewApp%2Fcommon%2FappService.do) on ‘notes and coins’. And here is what the data had to say.

**Table 1: Notes and Coins in Circulation**

**Year** **‘Notes and Coins’ in Circulation** **Index** 1951-52 12,920,000,000 100 1970-71 45,570, 000,000 353 2000-01 2,182,050,000,000 16,900 2010-11 9,495,210,000,000 73,500

In the financial year 2010-11 there was 735 times as many notes and coins in circulation as in 1951-52, thanks to RBI’s printing press. So why do we have inflation? Simple, the growth in ‘notes and coins in circulation’ has far outstripped the growth in real goods and service. And M0 is as exogenous as exogenous gets; RBI is the sole producer of money. RBI’s own numbers fly in the face of Subharao and his predecessors claim that ‘the bank is fighting inflation’.

But there is more to money that just this. It’s got a deceitful circularity. The Reserve Bank doesn’t sprinkle new notes and coins from a helicopter. It lends newly produced money to banks and government. Typically big banks, large business houses and government tend to benefit from new currency as they borrow and demand real resources. This pushes up prices a little. A second round begins when private firms down the supply chain and sub-contractors of government get new contracts, they in turn demand real resources, and prices go up a little. This process continues little prices rise commensurate to the initial injection of new currency. The great deceit lies in the fact that the first group (banks, government, and business houses) demands real resources at original prices, the second group at slightly higher prices, and the full brunt of inflation is borne by the ‘common masses’ who demand goods in the last round.

Do we have an alternative? B. Chandrasekaran tells us – in a recent [Pragati](http://pragati.nationalinterest.in/) article – that B R Ambedkar was very concerned about the question of currency. Quoting Ambedkar: “Besides, a managed currency is to be altogether avoided when the management is to be in the hands of the Government. When the management is by a bank there is less chance of mismanagement. For the penalty for imprudent issue, or mismanagement is visited by disaster directly upon the property of the issuer.

But the chance of mismanagement is greater when it is issued by Government because the issue of government money is authorised and conducted by men who are never under any present responsibility for private loss in case of bad judgement or mismanagement”

One possible solution is a system of private money perhaps. Recommended reading: Hayek’s [Denationalization of Money](http://www.iea.org.uk/publications/research/denationalisation-of-money). Another solution is the Friedman Rule: let the rate of growth of money supply match the rate of growth of real goods and services. Enjoy this thought provoking video: [Friedman on Inflation](http://www.youtube.com/watch?v=YgxPyabmOrU)

On a lighter note, we asked CCS interns ‘What is the first thing that comes to your mind when you hear the word ‘inflation’? Here is what they had to say.

Udita (Lady Sri Ram College): “Whenever I see the inflation figures I get worried about it having a direct effect on the monthly allowance I get. Also I feel the need to be financially independent asap. I think about more negotiation that I would have to do with the autowallahs everyday as the inflation goes up”

Snighdha (Ramjas College): “I become apprehensive of the fact that commodities like clothes and shoes would expensive. Also my great concern is cinema tickets prices shooting up each time with inflation figures”

Pradnya (National Law University, Jodhpur):  “ I am indifferent to inflation rates. My only concern is rising price of boil of rice at her mess. I have seen prices grow from Rs.9 to Rs.20 nowadays”.

Jasraj (Sri Venkateswara College, University of Delhi): “For me inflation is about how worthless money actually is.  In 1940 with one rupees we could buy 16 kilograms of ghee and you can’t even buy a decent toffee with one rupee in 2011”

Neil (University of Birmingham): “as soon I see inflation figures I visualize Sushma Swaraj speaking against inflation”Safal (Amity University): “As I see inflation figures I realize that India is still a poor country. Also I am worried about petrol price rise every week. Plus, maybe cameras will become more expensive in near future”

Subhaprad: “Inflation is a dangerous word, its’ the worst thing for middle class families. I believe that government is not serious on inflation and only cares about the growth and food grains are becoming very expensive these days. They only look for solutions during election time”

Akansha (Lady Sri Ram College): “Corruption is not associated with inflation. I think inflation levels have a direct impact on income expectation from the people you employ”

Shashank (National Institute of Technology, Hamirpur): “the value of money in my pocket is going to reduce” Anubhuti (Department of History, University of Delhi): “When I see inflation figures I believe that this congress government is going to loose next elections. Its’ all related to corruption. Anna hazare comes to my mind”

David (St. Stephen’s College) : “It used to take ten bucks from Stephens’ College to Kamala Nagar in a cycle rickshaw earlier. But now the rickshaw wallah asks for twenty bucks”.

Aditi (Indian Institute of Technology, Chennai) :  “Nobody has explained completely or has reached a consensus on what is the root cause of inflation. Neither they have come up with a consensus on best metric to measure inflation. Though I love Antonio Gramsci”.

And that’s how the cookie crumbles.

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## The Good, Bad and Ugly of Political Ads!

Original: https://www.spontaneousorder.in/p/the-good-bad-and-ugly-of-political-ads

Author: Spontaneous Order

Published: 2011-06-16T23:58:53.000Z

Topics: political-advertising, election-posters, campaign-creativity, indian-politics

> By: Udita Singh Politics is dirty stuff but dirtier is the task of marketing it. Political advertisements can create history or haunt parties for that ‘one bad ad’. The world has seen some great examples of political advertisements where words playful

**Summary:**

Political advertisements can shape elections or backfire spectacularly, with international examples setting benchmarks through creativity rather than money, while Indian parties produce mostly 'bad' and 'ugly' ads reflecting their low creativity and high leader-worship. The 'good' includes the UK's 1979 Conservative 'Labour isn't working' poster, voted best of the century, using wit and provocation to win votes; New Zealand's Green Party simple environmental message; and Obama's 2008 'Hope' and 'Change' posters, created in one day, radiating positive energy and becoming iconic. In contrast, 'bad' Indian ads feature Sonia Gandhi as Goddess Durga, sparking Hindu sentiment lawsuits, BJP's gruesome blood imagery post-terror attacks lacking substance, and dull Congress faces without engagement. 'Ugly' examples encompass US Bush campaign misquoting Kerry, backfiring Conservative posters, and Delhi University student union posters with excessive Photoshop and paper waste. Lessons emphasize witty challenges, simple responsibility, positive action-focus, avoiding deification or opportunism, steering clear of slander, and shifting to online platforms to save trees, urging substance over aggression in a classical-liberal critique of personality cults and inefficiency.

**Key points:**

- International political ads like UK's 'Labour isn't working' (1979 Tory win) and Obama's 'Hope/Change' succeed with wit, simplicity, and positivity.
- Indian ads fail by deifying leaders (e.g., Sonia as Durga, Advani as Brahma) or using dull/gruesome imagery without substance.
- Ugly tactics include misquoting opponents (Bush vs. Kerry 2004) and wasteful Photoshopped student posters; shift to social media to reduce paper use.

**By Vipin**

* * *

**By: Udita Singh**

Politics is dirty stuff but dirtier is the task of marketing it. Political advertisements can create history or haunt parties for that ‘one bad ad’. The world has seen some great examples of political advertisements where words playfully roll with symbolic images.This is an area where people matter, not just money. Some of the most powerful ads were designed by ad-majors like Saatchi & Saatchi, JWT, and Ogilvy. Indian political parties, on the other hand, typically fall into the “bad” and “ugly” category when it comes to ads. And the reason can’t be money, we know that! Political ads in India are in some senses a reflection of the parties themselves, low on creativity high on worship.

We bring you the good, the bad, and the ugly from the political ad world.

The Good

[

![](https://substackcdn.com/image/fetch/$s_!RfIz!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fd6decee9-3bc5-45a5-a98c-2843b77db26d_300x148.jpeg "LIW.2")



](https://spontaneousorder.in/the-good-bad-and-ugly-of-political-ads/liw-2/)

‘Labour isn’t working; Britain’s better off with the Conservatives.’

Voted the best poster advertisement of the century, it won the Tories the 1978 election and became a benchmark for political advertising the World over. A perfect example of a ‘clever’ poster. The same group of people were used repeatedly to form the long line one sees in the poster. Many thought this to be “deceitful”, but it did the trick.

Elections were delayed for a year, next year the Torries released another poster: ‘Labour still isn’t working’.

[

![](https://substackcdn.com/image/fetch/$s_!gYR4!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2a306f4e-ed63-4e89-98aa-2dff7f7739a5_300x150.jpeg "LIW.")



](https://spontaneousorder.in/the-good-bad-and-ugly-of-political-ads/liw/)

Lesson 1: Witty. Few strong words. Hard-hitting. Provocative. Advertisements like these challenge the opposition. Such ads are the battle grounds before the battle for ballots.  This is what provokes thot – minus the ‘ugh’.

[

![](https://substackcdn.com/image/fetch/$s_!Sl2w!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fac367fca-a40a-4274-a3f0-cc97584e011a_300x146.jpeg "Green Party")



](https://spontaneousorder.in/the-good-bad-and-ugly-of-political-ads/green-party/)

A unique party with an important message. The Green Party of Aotearoa (yes we got the name right) is a political party of  New Zealand. Their primary focus is environment. Yes, a nice holiday from the usual head-butting between political leaders, clean and simple.

Lesson 2: Simple. A responsible message can be  useful.

[

![](https://substackcdn.com/image/fetch/$s_!JJWA!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc0b9f200-282b-4e70-8a27-005678cafed4_199x300.jpeg "Obama_Hope_Poster")



](https://spontaneousorder.in/the-good-bad-and-ugly-of-political-ads/obama_hope_poster-2/)[

![](https://substackcdn.com/image/fetch/$s_!Cxev!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3d7c7bc1-50b0-4532-a056-b34c77d561a3_300x197.jpeg "obama-hope-change-wordcloud.preview")



](https://spontaneousorder.in/the-good-bad-and-ugly-of-political-ads/obama-hope-change-wordcloud-preview-2/)

Lesson 3: Speaks volumes, radiates positive energy. Focus on action and task-oriented words. The campaign – developed in one day – was well planned and focused on two words: Hope and Change. It does not take time to make an effective political poster. All it takes is an idea or a thought, translated into impactful imagery. The test of its success is the lasting impression it created on the viewers mind. It became the most widely-circulated poster in Obama’s campaign. His expression denotes a determined man, chin up and questionably observant. A leader’s expressions are important, a smiling Sonia and her gang do not seem very reassuring.

THE BAD

Wow! Sonia Gandhi as Goddess Durga in Congress posters. The reflex reaction to which, was a case filed against her for hurting the sentiments of Hindus.

[

![](https://substackcdn.com/image/fetch/$s_!Hjlu!,w_1456,c_limit,f_auto,q_auto:good,fl_lossy/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F12237b00-37af-4fe5-942d-50d561b486eb_300x256.gif "sonia durga")



](https://spontaneousorder.in/the-good-bad-and-ugly-of-political-ads/sonia-durga-3/)

Lesson 4: Unless selling idols of gods and goddesses, we request politicians not to uniquely ‘immortalize’ themselves. Politicians depicted as Gods are a big ‘NO’. Similar controversy was stirred by an ad with LK Advani as Brahma, Rajnath Singh as Lord Shiva and Atal Bihari Vajpayee as Lord Vishnu.

[

![](https://substackcdn.com/image/fetch/$s_!F6p-!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F22aa5dce-372c-4cce-b390-d8ef4fdfd704_183x300.jpeg "Brutal Terror Strikes at Will")



](https://spontaneousorder.in/the-good-bad-and-ugly-of-political-ads/brutal-terror-strikes-at-will/)

BJP! You get it all wrong!

So, Lesson 5? A violent, gruesome, patch of blood to denote terror. Opportunistic piece. Printed in early  2009, after terrorist attacks during the UPA govt. All governments fail at tackling terror, but what new would L.K Advani add to prevent such acts? Let’s talk substance, not aggressive politics.

[

![](https://spontaneousorder.in/wp-content/uploads/2011/06/Congress1-300x243.png "Congress")



](https://spontaneousorder.in/the-good-bad-and-ugly-of-political-ads/congress-2/)

Lesson 6: Lack of apt images. Dull. Boring. Call for action – none. Three painfully repetitive faces that dominate electronic news and print news. Fails to engage. Nothing to analyze or interpret.

THE UGLY

[

![](https://substackcdn.com/image/fetch/$s_!qdD0!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fd4900c52-222c-454d-8e7d-03f6b0e55a36_300x225.jpeg "Kerryattackad")



](https://spontaneousorder.in/the-good-bad-and-ugly-of-political-ads/kerryattackad/)

Bush Vs. Kerry, 2004. The ad was accused of taking words ”out of context” by highlighting controversial subjects.  To the reader it appears as if he intended to speak in favor of the highlighted topics. Essentially Bush  decided to go acid-dropping on Kerry.

[

![](https://substackcdn.com/image/fetch/$s_!mkN2!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F8055117d-c0dd-44fa-a52c-c456d265b97f_300x150.jpeg "Ugly")



](https://spontaneousorder.in/the-good-bad-and-ugly-of-political-ads/ugly-3/)

This Conservative Party poster backfired. Not happening.

Lesson 7: Misquoting.slandering. Back-firing of  political ads. Welcome to the ugly side of politics.

[

![](https://substackcdn.com/image/fetch/$s_!zT5D!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F022a0c74-6d36-41ef-8d35-9bba55e42388_300x212.jpeg "DUSU prez photo")



](https://spontaneousorder.in/the-good-bad-and-ugly-of-political-ads/dusu-prez-photo/)

Errr…Everybody wants a good click. So, DU Students Union representatives are known to select their photos, after much re-takes…and clearly, much Photoshop (typically some whitening)!

[

![](https://substackcdn.com/image/fetch/$s_!ua5G!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbc6edb6c-9a54-4473-b09b-10608a93acfc_300x214.jpeg "DUSU Election 1")



](https://spontaneousorder.in/the-good-bad-and-ugly-of-political-ads/dusu-election-1/)

Akhil Bharatiya Vidyarthi Parishad (ABVP) is a DU Students Union party backed by the BJP. In a typical ABVP-NSUI poster, the fair & lovely pretty face take up much of the canvas. Lots of posters dawn the campus walls each year. Heights of self-obsession! As uncreative and ugly as mass-produce of posters could get. By the end of the polls, the friendly-neighborhood bhelpuri-seller uses them to sell his sumptuous bhel while scores of posters carpet the roads.

Lesson 8: Save paper. Save trees. Go online. Political advertising includes social media.  Why such massive waste of paper, when YouTwitFace is absolutely gratis.

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Are we a Nation of Robots?

Original: https://www.spontaneousorder.in/p/are-we-a-nation-of-robots

Author: Spontaneous Order

Published: 2011-06-15T22:39:41.000Z

Topics: higher-education, entrepreneurship, indian-education-reform, innovation

> By: Ishu Kumar & Udita Singh (CCS Interns) ‘Don’t go to college’, says Paypal founder Peter Theil who is offering 24 bright kids a scholarship for not going to college! He calls it “stopping out of school”. Through this initiative, he wants a fe

**Summary:**

The post critiques India's higher education system, particularly in social sciences, for stifling free thought and producing 'robot workers' rather than entrepreneurs, contrasting it with Peter Thiel's fellowship offering scholarships to 24 bright students for skipping college to pursue big-picture thinking and entrepreneurship. It highlights insane cutoffs like 90-100% for top colleges such as SRCC and questions whether they foster learning or merely reproduce outdated ideas. Citing Narayana Murthy, India had only 2 universities in the top 500 globally in 2005 (vs. Japan 34, China 18), with McKinsey estimating just 10% of arts/humanities graduates and 25% of engineering students as globally competitive. The Soviet Union's high PhD output yielded no practical innovations, underscoring that entrepreneurship, not just research, drives growth—per Holcombe, it creates opportunities amid economic change. Drawing on Machiavelli, Matt Ridley, and Kapil Sibal's admission of irrational cutoffs, the authors argue for a classical-liberal shift: prioritize job-creators over job-seekers by freeing minds for innovation, ideally with a Peter Thiel-like figure as HRD Minister.

**Key points:**

- Peter Thiel's initiative pays bright students to skip college and become entrepreneurs instead of workers.
- India's higher education excels at high cutoffs (90-100%) but fails to produce globally competitive graduates, with only 10% in arts/humanities and 25% in engineering per McKinsey.
- Entrepreneurship, not rote research, creates growth opportunities, as evidenced by the Soviet Union's lack of innovations despite many PhDs.
- India needs to reform colleges to foster free thought and job-creators rather than robot-like job-seekers.

**By Vipin**

* * *

**By: Ishu Kumar & Udita Singh (CCS Interns)**

‘Don’t go to college’, says Paypal founder Peter Theil who is offering 24 bright kids a scholarship for **not** going to college! He calls it “[stopping out of school](http://techcrunch.com/2010/09/27/peter-thiel-drop-out-of-school/)”. Through this initiative, he wants a few sharp young folks to begin thinking about the big picture early. He wants them to become entrepreneurs and not workers. “Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity, and are able to turn both to their advantage” said Machiavelli. We believe that entrepreneurs are born when minds are given freedom to express and act upon fresh ideas. It’s a pity that the Indian education system stifles free thought.

Imagine a child who spends 18 years of her life battling to get into a college where the cut off percentage is an insane 90 something or even a [100%](http://www.ndtv.com/article/india/delhi-university-cut-off-reach-record-high-100-needed-for-b-com-at-srcc-112355). But are these colleges allowing  students space to learn and experiment, or, are they simply stuffing them with age-old ideas and theories? We think the India higher education system, particularly when it comes to social sciences, is one which excels in reproducing rot! Narayana Murthy tell us:

“…despite its vast network of universities and colleges,India has failed to create a world-class higher education system.According to the academic ranking of world universities for 2005 , India had just 2 universities in the top 500, while Japan had 34, China 18, South Korea 7 and Brazil 4. Mckinsey estimates that about 10%  of Indian students with degrees in arts and humanities and 25% of Indian engineering students are globally competitive”.

And it’s not just a question of investing more in research. The Soviet Union had the highest per capita PhDs yet not a single practical innovation of the 20th century originated there. Entrepreneurship is necessary to translate research into innovations that benefit consumers. [Holcombe](http://www.business.auburn.edu/~ral0011/Georgia/Holcombe.pdf) tells us:

“Thus, while it is reasonable to consider research and development to be factor pushing technological change, research and development is not the cause of growth, it is a response to growth opportunities. The question is what creates such opportunities? The answer is: entrepreneurship. In a static setting, where there is little change, there will be relatively little in the way of entrepreneurial opportunities. Those that might be lying in wait must be relatively obscure to have remained unnoticed, and the static environment precludes the creation of new opportunities. Furthermore, with few opportunities, there is little incentive to devote any resources toward seeking them out. In an environment of economic change, new opportunities will continually be presenting themselves. When entrepreneurs take advantage of some opportunities, the economic environment changes, creating with it additional opportunities. Thus, entrepreneurship leads to more entrepreneurship”.

Being an entrepreneur is not a rocket science. Its ground lies in teaching us to find solutions for ourselves. The big question is – Do we want a country of robot workers or enterprising entrepreneurs; a country of job-seekers or job-creators?  Matt Ridley – in a Ted talk – tells us that “Through history, the engine of human progress and prosperity has been [ideas having sex with each other](http://www.ted.com/talks/matt_ridley_when_ideas_have_sex.html)”. Kapil Sibal – Minister of Human Resource Development – today said that the 100% cut-off at Sri Ram College of Commerce is “irrational” and “unfortunate”.  A debate on what the cutoff ought to be is, quite frankly, simply wiling away time. The real question is what happens in colleges? What India needs is a Peter Theil as the Minister of Human Resource Development. What say?

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Not Just Any Other Profession

Original: https://www.spontaneousorder.in/p/not-just-any-other-profession-2

Author: Spontaneous Order

Published: 2011-06-14T23:17:50.000Z

Topics: press-freedom, journalist-safety, free-speech, india-media

> By: Surbhi Tandon What does it take to break a story, to expose scam, to unearth rot? Popular perception is that journalism is a profession with privileged-secure-jobs. Journalists are often seen as glamorous crusaders of public good. But like it or not..

**Summary:**

The post challenges the glamorous image of journalism as a secure, privileged profession, highlighting the severe risks Indian journalists face in exposing scams and government wrongdoing. It cites the broad-daylight assassination of senior journalist Jyotirmoy Dey in Mumbai and the charging of Tehelka journalist Shahina under IPC Section 506 for her investigative report on Abdul Nasar Madani's false implication in the 2008 Bangalore blasts, where key witnesses were unaware of their testimonies on the chargesheet. Tehelka's Kunal Majumdar notes higher risks in small cities. India ranks 13th on the Committee to Protect Journalists' 2011 Impunity Index (Pakistan 10th), 122nd out of 178 in Reporters Without Borders' 2010 Press Freedom Index, with four Orissa journalists charged with sedition since July 2010 and six intimidation cases in early 2011. From a classical-liberal viewpoint, the piece invokes Nehru's preference for a completely free press over a suppressed one, urging recognition of these dangers and concrete action beyond declarations to achieve true press freedom amid impunity and threats.

**Key points:**

- Journalists like Shahina face criminal charges for investigative reporting that exposes false implications in terror cases.
- India's 13th rank on CPJ's 2011 Impunity Index and 122nd on RSF's 2010 Press Freedom Index reflect high levels of threats, attacks, and impunity against media.
- Four Orissa journalists have been charged with sedition since July 2010, with six intimidation instances reported in early 2011.
- True press freedom requires recognizing journalists' risks and moving beyond rhetoric, as Nehru advocated for an unregulated press despite its dangers.

**By Vipin**

* * *

**By: Surbhi Tandon**

What does it take to break a story, to expose scam, to unearth rot? Popular perception is that journalism is a profession with privileged-secure-jobs. Journalists are often seen as glamorous crusaders of public good. But like it or not, the world of journalism is far from the jazzy studios of New Delhi; and not all is well in the real world. We explore this truth after the assassination of senior journalist Jyotirmoy Dey in broad daylight in Mumbai.

“[My name is Shahina](http://twocircles.net/2011mar16/my_name_shahina_and_i_am_not_terrorist.html) and I am not a terrorist” is an article by a Tehelka journalist, written after she was charged of criminal intimidation under Section 506 of the Indian Penal Code for her investigative report in Kerala. Shahina wrote an article ‘Why is the man [still in prison](http://www.tehelka.com/story_main48.asp?filename=Ne041210Why_is_this.asp)?’  published in *Tehelka Magazine on* 4 December 2010. She investigated how Abdul Nasar Madani, Chairman of People’s Democratic Party (PDP), was falsely implicated in the Bangalore blasts case of 2008. Her investigative inquiry revealed that some of the key witnesses  were unaware of the fact that their testimony was on the chargesheet!  In a phone conversation with us, Kunal Majumdar – Current Affairs Correspondent of  Tehelka – said, “Just by the virtue of being a journalist, there is always a certain amount of risk involved, especially when reporting in small cities the danger and risk is always higher than compared to big cities”.

Butchering of Pakistani journalist Syed Shahzad Saleem shocked us all. The fact is that things ain’t much greener on this side of the “[world’s most dangerous border](http://www.economist.com/node/18712525)“. India ranks 13 in the recently released Impunity Index of the media watchdog [Committee to Protect Journalists](http://www.cpj.org/reports/2011/06/2011-impunity-index-getting-away-murder.php) , Pakistan is only slightly worse at rank 10.

The sad truth is that the press which champions the cause of “free speech” risks facing charges of sedition in “independent democratic” India when they honestly report facts and figures against the government. In Orissa, for instance, four journalists have been [charged](http://www.thehoot.org/web/freetracker/story.php?storyid=110&sectionId=8) with sedition since July 2010. In the first four months of this year there have been six reported instances of intimidation of journalists and writers, free speech can’t be taken for granted in our [country](http://www.thehoot.org/web/freetracker/story.php?storyid=288&sectionId=14). Interestingly, India’s ranking in the Press Freedom Index 2010 was 122 among 178 countries. This ranking – developed by  Reporters Without Borders – takes into account  violations directly affecting journalists (such as murders, imprisonment, physical attacks and threats) and news media (censorship, confiscation of newspaper issues, searches and harassment) as well as the degree of impunity enjoyed by those responsible for these [press freedom violations](http://en.rsf.org/press-freedom-index-2010,1034.html).

Jawaharlal Nehru once said “I would rather have a completely free Press with all the dangers involved in the wrong use of that freedom than a suppressed or regulated Press”. There is an urgent need to do a lot more than mere declarations to obtain “complete press freedom”, recognizing the real landscape that journalist tread would be a good place to begin.

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Where is the Karan Johar of Indian Porn?

Original: https://www.spontaneousorder.in/p/where-is-the-karan-johar-of-indian-porn

Author: Spontaneous Order

Published: 2011-06-13T19:31:59.000Z

Topics: pornography-legalization, cultural-hypocrisy, free-markets, speech-freedom

> By: Udita Singh (CCS Intern) Danny Frederick in his paper, Defending Pornography, lists four arguments against pornography, namely, the deprave-and-corrupt argument, the harm-to-others argument, the harm-to-children argument, and the degrades-women argu..

**Summary:**

The post critiques moral arguments against pornography—deprave-and-corrupt, harm-to-others, harm-to-children, and degrades-women—from Danny Frederick's paper, and dismisses distinctions like Jug Suraiya's between porn and erotica as mere taste. It argues that India's underground porn industry, producing 'Blue Films' in languages like Bengali, Tamil, Hindi, Punjabi, Assamese, and Kerala's 'Mal-porn', suffers from poor quality because legal risks deter young artists, writers, and directors. Despite cultural taboos—sex unspoken in homes, Khushwant Singh's Screw magazine cleared as 'engineering guide'—Google Trends shows New Delhi ranking 4th globally in porn searches, ahead of legal porn hub Los Angeles at 8th. Acknowledging and legalizing the industry as a legitimate profit-making venture would enable better regulation of child pornography, HIV, and trafficking; support creative entrepreneurs; foster respect for workers; and elevate quality, as seen in banned savitabhabhi.com by a UK NRI and Richard Menon's US-based Indian Playboy, who avoids India due to politicians and women's groups. From a classical-liberal view, legalization civilizes by unleashing market-driven creativity, echoing Hugh Hefner.

**Key points:**

- Legal risks prevent talented creators from professionalizing Indian porn, resulting in low-quality output.
- India's underground porn industry thrives across regions and languages, yet faces denial and no open discussion.
- Legalizing porn as a legitimate business would mitigate harms like child exploitation, HIV, and trafficking while improving standards and worker respect.
- High Indian porn demand is evident with New Delhi ranking 4th globally in searches, surpassing Los Angeles.
- NRI successes like savitabhabhi.com and Richard Menon's films show entrepreneurial potential stifled by India's legal environment.

**By Vipin**

* * *

**By: Udita Singh (CCS Intern)**

Danny Frederick in his paper, *[Defending Pornography](http://www.libertarian.co.uk/lapubs/polin/polin124.pdf)*, lists four arguments against pornography, namely, the deprave-and-corrupt argument, the harm-to-others argument, the harm-to-children argument, and the degrades-women argument. And then there is Mr. Jug Suraiya who [says](http://www.speakingtree.in/public/view-article/Poverty-Of-Porn) “Pornography is not a crime. But it could well be a sin, the sin of boredom, which is nothing more, or less, than the defeat of the spirit”, all this while lauding “erotica”. Oscar Wilde once said “Morality, like art, means drawing a line someplace”, Mr. Suraiya’s distinction between pornography and erotica is one such line. More often than not such matters come down to tastes. But Mr. Suraiya’s point – poor quality of porn –  is well taken. The question is why? We think it’s because young artists don’t aspire to be actors, script writers, directors et al in the industry, at least partly because of the legal-risk involved.

Few openly accept the existence of porn-production centers flourishing in many regions of India. ‘Blue Films’ are produced in multiple languages – Bengali, Tamil, Hindi, Punjabi and Assamese. And in Kerala ‘Mal-porn’ is a roaring business. One can even list the differences between North and South Indian porn!  Yet, there is no acceptance of the industry and hence the lack of a platform for discussion.  This is not new, back in the days of license-permit Raj, Khushwant Singh  subscribed to the  ‘[Screw](http://en.wikipedia.org/wiki/Screw_\(magazine\))’ magazine, which the customs department cleared on the pretext of it being an engineering guide! Elites who sailed to Europe for vacations came back with glossy erotic pages. The funny this is that while “sex” remains a no-no word in Indian living rooms, [Google Trends](http://www.google.co.in/trends?q=porn) has a whole different story to tell. New Delhi ranks a not so astonishing 4th, in terms of access to porn, Los Angeles – where porn is very much legal -ranks 8th!

Acknowledging the existence of a porn industry in India, rather than putting it under wraps, will help us deal better with child pornography, HIV, and trafficking of womyn. If recognized as a ‘legitimate’ profit-making industry, just like all other for-profit businesses, it will not only support creative entrepreneurs and encourage respect for workers, but also raise standards in the quality of porn!

Take the 2009 ‘savitabhabhi.com’ case for instance: a wife and sister-in-law living a lusty adulterous life in a world where more is better. The popular online toon series was distributed amongst many websites and porn magazines but ultimately banned by the Government of India – the creator had to reveal his identity: a UK based NRI, second gen businessman. It’s roaring success was largely due to the gentleman’s creativity. Another NRI, Richard Menon of New Jersey produced the ‘The Indian Playboy’. The film is his story as an immigrant, entrepreneur and a player in the adult film market – the story of a conservative Indian who got fed up with the corporate world and decided to start his own porn business in the US. Interestingly, Richard does not plan to shoot any adult films in India, he says politicians and women’s rights groups here are difficult to handle. Clearly, the ‘feminazis’ continue to shun many interesting voices. This despite the fact that there are categories of porn – unimaginatively called ‘[feminist-friendly](http://www.nriinternet.com/ENTERTAINMENT/DIRECTORS/A_Z/M/Richard_Menon/index.htm)’ porn – which put women in the driver’s seat.

Hugh Hefner once said “The major civilizing force in the world is not religion, it is sex”. He is a millionaire, and millionaires are not too often wrong about what got them there. A bill on legalizing pornography would be a “civilizing” move and a welcome change from the “Why-are-we-so-corrupt-debate”. And that reminds me, when was the last time someone went on a hunger strike for porn-sake?

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Should the Private Sector be Brought Under the Whistleblowers Bill?

Original: https://www.spontaneousorder.in/p/should-the-private-sector-be-brought-under-the-whistleblowers-bill

Author: Spontaneous Order

Published: 2011-06-11T11:47:57.000Z

Topics: whistleblower-protection, economic-deregulation, corruption-india, regulatory-reform

> By: Surbhi Tandon & Udita Singh (CCS Interns) John Adams (1735–1826), American statesman and political theorist, once said “Fear is the foundation of most governments”. The Whistleblowers Bill strikes precisely at the foundation of the government of

**Summary:**

The Whistleblowers Bill, cleared by the Union Cabinet in August 2010, aims to protect whistleblowers like Satyendra Dubey, assassinated in 2003 for exposing corruption in the Golden Quadrilateral Project, and Niyamat Ansari, killed on 2 March 2011 for highlighting graft in the NREGA scheme, by empowering the Central Vigilance Commission with civil court powers to penalize identity revealers. A parliamentary panel led by Jayanti Natarajan recommends expanding coverage to ministers, higher judiciary, security organizations, and the corporate sector, while replacing a proposed five-year jail term for frivolous complaints with fines—a sensible change. While international examples like the US, UK, South Africa, Ghana, New Zealand, Norway, and Uganda include private sector protections, India's classical-liberal critique cautions against it now: archaic laws and excessive regulations force businesses to break rules and bribe officials, risking a flood of whistleblower cases that would further stifle economic activity. The authors advocate protecting private sector whistleblowers as desirable to combat government-business collusion, but only after economic deregulation creates laws consistent with realities and conducive to growth.

**Key points:**

- India's Whistleblowers Bill should prioritize protecting public sector whistleblowers like Satyendra Dubey and Niyamat Ansari by empowering the Central Vigilance Commission.
- The Natarajan panel's expansion to ministers, judiciary, security, and corporates, plus fines over jail for frivolous complaints, advances accountability.
- Private sector inclusion risks overwhelming courts with cases due to archaic regulations necessitating law-breaking and bribery.
- Economic deregulation must precede private sector whistleblower protections to enable growth-friendly laws.

**By Vipin**

* * *

**By: Surbhi Tandon &  Udita Singh (CCS Interns)**

John Adams (1735–1826), American statesman and political theorist, once said “Fear is the foundation of most governments”. The Whistleblowers Bill strikes precisely at the foundation of the government of India! [In August 2010](http://articles.economictimes.indiatimes.com/2010-08-10/news/27607778_1_hand-down-harsh-penalty-vitthal-gite-whistleblowers) the Union Cabinet cleared the Whistle Blowers Bill, yesterday a parliamentary panel lead by Jayanti Natarajan [recommended](http://www.hindustantimes.com/More-power-for-whistleblowers-bill/Article1-707721.aspx) that the bill include ministers, higher judiciary,  security organizations, and corporate sector. While the case for including government functionaries and arms of the state is a welcome move, there ought to be some debate around the question of whether and when the private sector should be brought under the purview of the bill.

The Whistleblowers Bill movement gathered storm in 2003 after the assignation of Satyendra Dubey – a project director at the National Highways Authority of India – who highlighted corruption in the Golden Quadrilateral Project. On 2 March 2011 [Niyamat Ansari](http://kafila.org/2011/03/09/the-murder-of-niyamat-ansari/) – an NREGA and RTI activist – was killed for highlighting corruption in the NRGEA scheme. [The Bill](http://articles.economictimes.indiatimes.com/2010-08-10/news/27607778_1_hand-down-harsh-penalty-vitthal-gite-whistleblowers) essentially envisages protecting people like Satyendra and Niyamat by giving “the Central Vigilance Commission powers of a civil court to hand down harsh penalty to people revealing identity of whistleblowers”.

The Natarajan Panel recommends scrapping the proposed “five year jail term for frivolous complaints” and replacing it with a fine. This makes sense. But should the bill cover the private sector.

“The whistleblower laws of Ghana, New Zealand, Norway, Uganda, and the UK protect whistleblower in the private sector as well. In South Africa, both the special law on whistleblowing and the Companies Act of 2008 facilitate private sector whistleblowing and provide protection for such actions. In the USA special laws have been passed to protect whistleblowers in the private sector” ([Venkatesh Naik](< http://istinfo.net/downloads/WhistleblowerBill2010.pdf >)).

In India corruption often takes the form of collusion between government and large business houses, protecting private sector whistleblowers might help dent such graft. But there are risk-factors too. India has many archaic laws and a whole structure of regulations which are far from and inconsistent with economic realities. This means that doing business in India by necessity requires breaking laws and greasing palms. Covering the private sector under whistleblowers bill under such circumstances may bring a whole flurry of cases, making doing business in India even more difficult. Therefore, while it is desirable to protect private sector whistleblower, economic deregulation must come first so that we have a system of laws consistent with our economic realities and conducive to economic growth.

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Baki Sab Bakwaas!

Original: https://www.spontaneousorder.in/p/baki-sab-bakwaas

Author: Spontaneous Order

Published: 2011-06-09T22:26:06.000Z

Topics: protectionism, swadeshi, economic-nationalism, free-markets

> By: Ishu Kumar Mr. Ramdev urges Indians to use ‘Indian products’, VI-John in, Gillette out. He also promotes ‘vegetarian’ products (hamburgers made of vegetarian cows don’t count). In this Mr. Ramdev is no different from other shrewd businessmen

**Summary:**

Vipin critiques Baba Ramdev's promotion of 'Indian products' and vegetarian alternatives as shrewd business tactics targeting niche markets, akin to Sprite's slogan 'Bhujaye Only Pyaas, Baki Sab Bakwaas,' dismissing competitors like Gillette and non-vegetarian imports. He draws parallels to the 'Hamara Bajaj' campaign, where Rahul Bajaj, spokesman for the protectionist Bombay Club, sold nationalist dreams while securing government licenses that created exclusive monopolies in the 1970s. Under UPA, Ramdev lacks such overt state support, but a BJP-led alliance poses risks due to RSS-backed Swadeshi Jagran Manch (SJM), which advocates 'need-based transnationalism' defined by 'enlightened men in saffron,' promoting nationalism and protectionism. From a classical-liberal viewpoint, these blend malign business motives with bankrupt political ideas, echoing Bajaj's era of economic tyranny via licenses. Invoking Andrew Jackson's 1837 warning that 'eternal vigilance by the people is the price of liberty,' Vipin urges liberals not to underestimate such forces threatening free markets.

**Key points:**

- Ramdev's push for Indian and vegetarian products mirrors protectionist marketing like 'Hamara Bajaj,' which relied on government-granted monopolies.
- Swadeshi Jagran Manch, backed by RSS, promotes need-based transnationalism that risks protectionist policies under a BJP government.
- Eternal vigilance is essential to prevent business nationalism from producing economic tyranny, as historical examples like Bajaj's licenses demonstrate.

**By Vipin**

* * *

**By: Ishu Kumar**

Mr. Ramdev urges Indians to use ‘Indian products’, [VI-John in, Gillette out](http://www.livemint.com/2011/06/07234903/Ramdev-wants-to-restore-India.html). He also promotes ‘vegetarian’ products (hamburgers made of vegetarian cows don’t count). In this Mr. Ramdev is no different from other shrewd businessmen eying niche markets. Baba mudslinging his competitors’ products (imports and non-vegetarian-Indian products) reminds one of the later part of *Sprite’s* old slogan *‘Bhujaye Only Pyaas, Baki Sab Bakwaas’*.

Mr. Ramdev’s attempt to corner a market brings back some voices from the past, voices like the *Hamara Bajaj* campaign. With the slogan Mr. Bajaj – [spokesman](http://www.outlookindia.com/article.aspx?269748) of the notorious Bombay Club – sold India a false dream, that too at a price. Bajaj is ‘in some way’ ours – that is the slogan’s central message. But Mr. Bajaj didn’t just rely on his marketing teams; the Bajaj group captured niche markets by seizing government licenses which granted exclusive monopolies.

With the UPA in power Mr. Ramdev is unlikely to get government ‘support’ of the kind that Mr. Bajaj got in the 1970s. But the danger lurks dark and deep, especially if a BJP led alliance were to come to power. The RSS – which has been supporting Baba’s movement – runs the [Swadeshi Jagram Manch](http://www.swadeshionline.in/category/image-galleries/swadeshi-jagran-manch), an organization which promotes nationalism and protectionism. SJM’s stated philosophy includes “a global alternative, which accepts only need-based transnationalism”, need or no-need would of course be decided by enlightened men in saffron.

Andrew Jackson – 7th president of the United States – said in 1837 that “…eternal vigilance by people is the price of liberty”. We ought not to wish away the power of malign business motives and bankrupt political ideas to produce economic tyranny, Hamara Bajaj teaches us not to underestimate such forces. Mr. Ramdev is one such business motive, and the SJM one such political idea. [As for Mr. Ramdev](http://www.livemint.com/2011/06/09012541/Quick-Edit--Baba-blah-blah.html), take Yoga out, and one is yet again reminded of the latter half of Sprite’s catchline

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## India’s First Economist

Original: https://www.spontaneousorder.in/p/indias-first-economist

Author: Spontaneous Order

Published: 2011-06-08T22:27:23.000Z

Topics: br-shenoy, central-planning, economic-freedom, indian-economics

> By: B. Chandrasekaran (Economist, Planning Commission) & Vipin P. Veetil (Research Guide, CCS) His articles do not figure in University of Delhi’s reading list and nearly none of the post-graduate students from India’s premiere economics research inst

**Summary:**

B.R. Shenoy (1905–1978), overlooked in Indian academia—absent from University of Delhi reading lists and unknown to post-graduate students at top institutes like Delhi School of Economics and JNU—was India's first economist to publish in a peer-reviewed journal, with articles in the Quarterly Journal of Economics in 1931 and 1933. On his birth anniversary, June 3, the post highlights his pioneering classical-liberal critique of central planning. Milton Friedman praised Shenoy as a 'great man' for recognizing defects in India's planning and stating views courageously. Shenoy was the sole Indian economist to author a Note of Dissent against the Nehru-Mahalanobis Second Five Year Plan, which Peter Bauer lauded for 'conspicuous moral courage.' A key quote embodies his view: under economic freedom, investment control diffuses to millions of competing entrepreneurs, rewarding efficiency and contribution to national product; statism, conversely, breeds parasitic functionaries reliant on political 'pull' rather than talent. The post positions Shenoy as a true student of economics science advocating market competition over state control.

**Key points:**

- B.R. Shenoy was the first Indian economist to publish in the peer-reviewed Quarterly Journal of Economics in 1931 and 1933.
- Shenoy authored the only Note of Dissent to India's Nehru-Mahalanobis Second Five Year Plan, earning praise from Milton Friedman and Peter Bauer for his courage against central planning.
- Economic freedom diffuses investment power to competing entrepreneurs rewarded by efficiency, unlike statism which fosters parasitic reliance on political contacts.

**By Vipin**

* * *

**By: B. Chandrasekaran (Economist, Planning Commission) & Vipin P. Veetil (Research Guide, CCS)**

His articles do not figure in University of Delhi’s reading list and nearly none of the post-graduate students from India’s premiere economics research institute including the Delhi School of Economics, Indira Gandhi Institute of Research and Development, and Centre for Economic and Social Planning of Jawaharlal Nehru University, have ever heard his name.

[B R Shenoy](http://www.ccsindia.org/ccsindia/people_brs_shenoy.htm) (1905 – 1978) was the first Indian economist to publish in a peer-revived economics journal – his articles appeared in the Quarterly Journal of Economics in 1931 and 1933. June 3 was Shenoy’s birth anniversary. Milton Friedman described him as a “great man who had the economic understanding to recognise the defects of central planning in India and what was even rarer, the courage to state his views openly and without equivocation”.  Shenoy was the only Indian economist to write a Note of Dissent to the Nehru-Mahalanobis 2nd Five Year Plan; [Prof. Peter Bauer](http://en.wikipedia.org/wiki/Peter_Thomas_Bauer) thought that the Note “represented conspicuous moral courage”. We leave you with a few thoughtful [lines](http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle=2136&chapter=195377&layout=html&Itemid=27) from a true student of the *economics science*

“Under economic freedom, on the other hand, control over investment resources would be acquired by tens of millions of entrepreneurs competing in the open market, and economic power would be correspondingly diffused over the community as a whole. Financial success would be governed by efficiency, quality and price of the output, i.e., in proportion to what the individual adds to the national product. Under statism, however, financial success often rests overwhelmingly on contacts and “pull” in obtaining patronage, and not wholly on the use of talent to contribute to the stream of the national product. Statism is apt to bring into being a body of parasitical functionaries.”

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Thou Shall Not Be Corrupt

Original: https://www.spontaneousorder.in/p/thou-shall-not-be-corrupt

Author: Spontaneous Order

Published: 2011-06-07T17:28:11.000Z

Topics: corruption, economic-freedom, anti-corruption, public-choice

> By: Ishu Kumar (Communicating Reality Intern, CCS) As the Baba Circus unfolds, we bring you 10 innovative ways to tackle corruption from around the world. In our June 3 blogpost we had argued that mass scale corruption is the consequence of economic re...

**Summary:**

Building on a prior Spontaneous Order post arguing that mass-scale corruption stems from economic repression, this article advocates complementing increased economic freedom with innovative social strategies for a corruption-free society. It presents a top-10 list of global anti-corruption innovations, emphasizing classical-liberal approaches like market mechanisms and incentives. Examples include: (10) Bill & Melinda Gates Foundation's mobile banking in Afghanistan paying police salaries via cellular transactions to prevent skimming; (9) UNODC's 'Your No Counts' campaign; (8) Kautilya's Arthashastra recommending spies and fines four times the loss for embezzlement; (7) Mo Ibrahim Prize offering $5M plus $200K annually to non-corrupt African leaders (no winner past two years); (6) India's 5th Pillar Zero Rupee notes for bribeseeking officials; (5) NoBribe.org blog from Bihar; (4) Tata Group's Jaago Re campaign; (3) Singapore's high public-sector salaries matching private levels under Lee Kuan Yew, contributing to its status as least corrupt; (2) Shaffi Mather's for-profit anti-corruption model addressing supply and demand; (1) Indonesia's Honesty Canteen teaching kids self-enforced payments. The list highlights incentives, technology, and cultural shifts alongside economic liberalization.

**Key points:**

- Mass-scale corruption results from economic repression and requires economic freedom plus innovative social measures.
- Singapore combats corruption by paying public officials private-sector salaries, achieving the world's lowest corruption ranking.
- India's Zero Rupee notes allow citizens to refuse bribes by handing fake currency to demanding officials.
- Kautilya's Arthashastra prescribes spies and fines four times the loss to detect and punish embezzlement of public funds.
- For-profit models, like Shaffi Mather's, can fight corruption by addressing both supply and demand sides economically.

**By Vipin**

* * *

**By: Ishu Kumar (Communicating Reality Intern, CCS)**

 As the Baba Circus unfolds, we bring you 10 innovative ways to tackle corruption from around the world. In our June 3 [blogpost](https://spontaneousorder.in/?p=1385) we had argued that mass scale corruption is the consequence of economic repression. While that holds, we believe that increasing economic freedom needs to be complemented with innovative social thinking for making the transition to a corruption free society. Like all top 10 lists, we begin with numero ten.

10\. In the world’s most troubled regions like Afghanistan, the Bill and Melinda Gates foundation supports a [mobile banking service](http://www.roshan.af/Roshan/Business/Solutions/Pay/Emergency_Services/M-Paisa.aspx) that pays police salaries through [cellular transactions](http://techcrunch.com/2010/10/17/m-paisa-ending-afghan-corruption-one-text-at-a-time/). A small way to ensure that those who protect lives get paid what they deserve and no one eats the cherry off their pie.

9\. The [United Nations Office of Drugs and Crime](http://www.unodc.org/) started their worldwide “[Your No Counts](http://www.unodc.org/yournocounts/en/audio-and-video/index.html)” campaign to fight corruption at all levels in the society.

8\. [Kautilya’s Arthashastra](http://www.hindujagaran.org/DigitalLibrary/ArthashastraofChanakyaEng.pdf) lists 40 ways of embezzlement of “public funds” by government officials. Kautilya recommends use of spies to find the corrupt, and recommends fines several times the loss to the exchequer.  For example Kautilya says: “Whoever lessens a fixed amount of income or enhances the expenditure is guilty of causing the loss of revenue. Herein a fine of four times the loss shall be imposed.”

7\. Sudanese-born billionaire Mo Ibrahim set about with the [Ibrahim Prize](http://www.moibrahimfoundation.org/en/section/the-ibrahim-prize) for African leaders. He wondered why the continent with the richest natural resources had the poorest people. The award gives $5 million to an African leader who is not corrupt and leads office peacefully; it also provides an annual $200,000 award. Sadly, they haven’t had a winner for the past two years.

6\. [5th Pillar](http://india.5thpillar.org/front_page), a non-governmental organization came up with the idea of a currency note of Rs 0! [The Zero Rupee](http://www.youtube.com/watch?v=6ancvnn6skg&feature=player_embedded) notes can be given by citizens to officials who solicit bribes for performing legitimate public services

5\. Sanjay Uvach – an entrepreneur from Bihar –  decided that all he wants to do is [blog](http://www.nobribe.org/about) about corruption. A great initiative proving that social media and online communication is the new viral form of communication which spreads messages and points faster than ever. The blogger says “Just like the Freedom Movement of the 40s and the Economic Liberalization of 90s, our nation today is in the need of a basic paradigm shift”.

4\. The Tata Group in India launched a campaign from their Tea division, [Jaago Re](http://www.jaagore.com/). They put out interesting [videos](http://www.youtube.com/watch?v=JXWdhB1xYic) and advertisement campaigns with the slogan [Khilao Mat, Pilao](http://www.youtube.com/watch?v=qQSz7nnTUP4&feature=related) to gain awareness amongst people.

3\. [Singapore](http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results), the worlds least corrupt country has reached this point because of both economic freedom and policy actions initiated by [Lee Kuan Yew](http://en.wikipedia.org/wiki/Lee_Kuan_Yew). He thought that to tackle the problem of corruption amongst public officials, government ought to pay them at par with those in the private sector. Though expensive, it worked well for the small island nation.

2\. [Shaffi Mather](http://www.ted.com/speakers/shaffi_mather.html), a Ted India speaker and founder of [1298 for Ambulance](http://www.1298.in/index.htm), investigates corruption through economics terms coming to the conclusion that both the demand and supply are extremely high. He wishes to start a **for-profit** organization working towards fighting corruption. Watch [Shaffi Mather: A new way to fight corruption](http://www.ted.com/talks/lang/eng/shaffi_mather_a_new_way_to_fight_corruption.html)

1\. The [Honesty Canteen Campaign](http://www.youtube.com/watch?v=xIZNr3YbeYA) in Indonesia lets kids walk into an unattended canteen where they can “buy” items and pay a price they deem [appropriate](http://www.beritajakarta.com/2008/en/newsview.aspx?id=15928). Officials say this kind of a movement at the school level promotes honesty amongst students which they then adopt for the rest of their lives.

Read more: [https://spontaneousorder.in/black-robes-saffron-robes-and-the-economics-of-corruption/](https://spontaneousorder.in/black-robes-saffron-robes-and-the-economics-of-corruption/)

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Adam Smith on Sympathy

Original: https://www.spontaneousorder.in/p/adam-smith-on-sympathy

Author: Spontaneous Order

Published: 2011-06-06T23:07:49.000Z

Topics: adam-smith, moral-sentiments, sympathy

> Today is Adam Smith’s birthday. We leave you with a quote from Smith’s Theory of Moral Sentiments on Sympathy “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, an

**Summary:**

This short post, shared on Adam Smith's birthday, quotes a passage from his Theory of Moral Sentiments explaining sympathy as a natural human principle where individuals imagine themselves in others' situations to feel compassion, even for the suffering of strangers or wrongdoers, emphasizing imagination's role over direct sensory experience.

**Key points:**

- Sympathy arises from conceiving oneself in another's misfortune, deriving pleasure from others' happiness and sorrow from their misery.
- Even the most selfish or criminal individuals possess this sentiment, though virtuous people feel it most acutely.
- Imagination, not senses, allows us to form ideas of others' feelings by projecting our own potential experiences.

**By Vipin**

* * *

Today is Adam Smith’s birthday. We leave you with a quote from Smith’s *Theory of Moral Sentiments* on *Sympathy*

“How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. Of this kind is pity or compassion, the emotion which we feel for the misery of others, when we either see it, or are made to conceive it in a very lively manner. That we often derive sorrow from the sorrow of others, is a matter of fact too obvious to require any instances to prove it; for this sentiment, like all the other original passions of human nature, is by no means confined to the virtuous and humane, though they perhaps may feel it with the most exquisite sensibility. The greatest ruffian, the most hardened violator of the laws of society, is not altogether without it.

As we have no immediate experience of what other men feel, we can form no idea of the manner in which they are affected, but by conceiving what we ourselves should feel in the like situation. Though our brother is upon the rack, as long as we ourselves are at our ease, our senses will never inform us of what he suffers. They never did, and never can, carry us beyond our own person, and it is by the imagination only that we can form any conception of what are his sensations. Neither can that faculty help us to this any other way, than by representing to us what would be our own, if we were in his case. It is the impressions of our own senses only, not those of his, which our imaginations copy. By the imagination we place ourselves in his situation, we conceive ourselves enduring all the same torments, we enter as it were into his body, and become in some measure the same person with him, and hence form some idea of his sensations, and even feel something which, though weaker in degree, is not altogether unlike them. His agonies, when they are thus brought home to ourselves, when we have thus adopted and made them our own, begin at last to affect us, and we then tremble and shudder at the thought of what he feels. For as to be in pain or distress of any kind excites the most excessive sorrow, so to conceive or to imagine that we are in it, excites some degree of the same emotion, in proportion to the vivacity or dullness of the conception.”

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Some Infants Never Grow Up!

Original: https://www.spontaneousorder.in/p/some-infants-never-grow-up

Author: Spontaneous Order

Published: 2011-06-05T18:17:07.000Z

Topics: infant-industry, export-subsidies, crony-capitalism, free-trade

> By: Bhuvana Anand (Director, CCS) & Vipin P. Veetil (Research Guide, CCS) “I am one who is not subscribing to this view that our exports have reached a stage where we can do away with some of the incentives” said Anand Sharma, Minister of Commerce tod

**Summary:**

The post criticizes the extension of India's Duty Entitlement Pass Book (DEPB) scheme, an export promotion policy that reimburses import duties on export inputs, as endorsed by Commerce Minister Anand Sharma and major firms like Tatas, Reliance Industries, and Bajaj Auto. From a classical-liberal viewpoint, it rejects the infant industry argument—popularized by Alexander Hamilton—which claims nascent industries need protection to compete, arguing instead that true growth occurs through competition and Joseph Schumpeter's 'creative destruction' in capitalism, where innovation from new goods, methods, and markets drives progress, not government shields. Protectionism keeps industries infantile, as evidenced by the 60+ years since the 1944 Bombay Plan, and distorts incentives: domestic producers and consumers bear import taxes while exporters are exempted, violating the principle that production serves consumption. The authors decry this as crony capitalism, where established giants seek short-term favors rather than advocating wholesale tariff removal. Business leaders should champion open markets without caveats, as Peter Thiel warns against compromising for net-winner status. Ultimately, India and its bourgeoisie gain from principled free-market advocacy over protectionist 'diapers' for 'big boys.'

**Key points:**

- The DEPB scheme reimburses import duties on export inputs using fixed rates but unfairly burdens domestic producers and consumers with those taxes.
- Infant industry protection fails because industries mature through competition and creative destruction, not isolation, as Schumpeter describes capitalism's innovative engine.
- Established firms like Tatas and Reliance exemplify crony capitalism by lobbying for DEPB extensions instead of demanding import tariff removal.
- Business leaders must reject short-term favors and advocate uncompromising free trade to foster long-term economic growth.

**By Vipin**

* * *

**By: Bhuvana Anand (Director, CCS) & Vipin P. Veetil (Research Guide, CCS)**

“I am one who is not subscribing to this view that our exports have reached a stage where we can do away with some of the incentives” [said](http://articles.economictimes.indiatimes.com/2011-05-23/news/29574110_1_depb-scheme-indian-exporters-duty-entitlement-pass-book) Anand Sharma, Minister of Commerce today, justifying an extension to the Duty Entitlement Pass Book Scheme (DEPB)—an export promotion policy. In the 60 odd years since the 1944 Bombay Plan, Mr. Sharma would have us believe that our industry still needs “infant” protection. And who are these infants might you ask? Top “industrial groups including Tatas, Reliance Industries, Bajaj Auto…” last week made a “fresh” representation to the Ministry of Finance asking for the continuation of the DEPB.

The DEPB is a scheme which “neutralise(s) the incidence of basic and special customs duty on import content of export product”. In principle, if one were to import cotton, process it, and export manufactured shirts, then one is reimbursed the import tax paid on cotton. In practice, the DEPB uses certain prescribed rates as it is painful to compute the import component of each export item.

The *infant industry argument* was first popularized by Alexander Hamilton—first US Secretary of Treasury in 1790. The crux of the argument is a nascent industry in one country cannot possibly compete with a mature industry in another; high import tariffs and other government measures are necessary to give the former a chance to grow and compete. While the argument has a seductive appeal at the aggregate level, it makes no sense at the level of the individual. The argument is akin to saying we ought to keep good football players out so that young ones can emerge! The reality is that young football players emerge by playing with and learning to compete with established ones. Also, the infant industry argument assumes away the fact that in capitalism economic development happens under the “perennial gale of [creative destruction](http://w7.ens-lsh.fr/amrieu/IMG/pdf/Schumpeter_chapter_7.pdf)”

“Capitalism, then, is by nature a form or method of economic change and not only never is but never can be stationary. And this evolutionary character of the capitalist process is not merely due to the fact that economic life goes on in a social and natural environment which changes and by its change alters the data of economic action; this fact is important and these changes (wars, revolutions and so on) often condition industrial change, but they are not its prime movers. Nor is this evolutionary character due to a quasi-automatic increase in population and capital or to the vagaries of monetary systems, of which exactly the same thing holds true. The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates” (Joseph Schumpeter, *Capitalism, Socialism, and Democracy*).

The industries that grow under protection today might well be obsolete tomorrow; innovation propels economic growth not protectionism. The funny thing about the infant industry argument is that it is never the infants who make it!

**The purpose of production is consumption, not vice-versa**. Individuals aim to maximize consumption and happiness, and increase leisure; legal rules that aim to “create employment” and “expand production” have got their first principles wrong. This exactly why asking for an extension of DEPB rather than asking for a whole-sale removal of import tariffs is a bad idea. At the very base it begs a simple question: why should those who produce for the domestic market pay import taxes while exporters are exempt from it? Using our shirt example, why should an Indian consumer pay a higher price for a cotton shirt manufactured in India (because of import duty on cotton) than an American consumer imports it from India?

For all its flaws, what is worrying about the DEPB story is not just the bad economic policy, but the crony capitalism. If small enterprises were to succumb to the temptation of having an easy road paved for them, one could condone their petition. But that established industries should adopt an immensely myopic approach, not just from the point of view of their own growth, but as business leaders who are every day at the fore front of shaping our economic future. The Tatas and Reliance Groups could have written to Prime Minister’s Office asking for a removal of import tariffs, instead they chose to write to the Finance Ministry for an extension of the DEPB. Alas, this is not a trait peculiar to India alone. Around the world, business leaders are known to collude with policy makers to curry short-term, narrow-minded favours, often inimical to their collective long run interest.

California based, tech economy pioneer, Peter Thiel, [describes](http://www.thielfoundation.org/index.php?option=com_content&view=article&id=9:the-contrarian-hero&catid=1&Itemid=16) the problem accurately when he points out that “we tend to like a government very much when we believe we’re among its net winners. That makes it very hard to think clearly about whether any of its laws are just or unjust.” Petitioners supporting the DEPB have demonstrated just this; India’s business leaders will support mindless protectionist policies even if it goes against their entrepreneurial spirit. We need business leaders committed to the idea of an open market minus caveats, who fight not just to score benefits for their fiefdoms, and refuse to engage in what Thiel terms “unacceptable compromise politics”.

Lenin once said “The capitalists will sell us the rope by which we will hang them”. The DEPB is one such rope. Both India and its bourgeoisie stand to gain if the latter took a more principled approach to government intervention. Besides, big boys don’t look good in diapers.

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Black Robes, Saffron Robes, and the Economics of Corruption

Original: https://www.spontaneousorder.in/p/black-robes-saffron-robes-and-the-economics-of-corruption

Author: Spontaneous Order

Published: 2011-06-03T17:59:48.000Z

Topics: corruption, economic-freedom, public-choice, rent-seeking

> By: Ishu Kumar What does Baba Ramdev have in common with Supreme Court judges? One, both wear robes (albeit of different colors), and two, both believe that ad hoc interference in governance can help salvage India from the malice of graft. Moral ablutio..

**Summary:**

The post critiques moralistic anti-corruption efforts by Baba Ramdev and Supreme Court judges, arguing that corruption is fundamentally an economic phenomenon solvable only through greater economic freedom, not ad hoc interventions. Drawing on data from Transparency International's corruption perceptions index (since 1998) and Heritage Foundation's economic freedom index (since 1995), it shows a strong correlation: five of the ten least corrupt countries (Singapore, Australia, New Zealand, Canada, Denmark) rank among the ten most economically free, with the least corrupt averaging an economic freedom rank of 11 versus 163 for the most corrupt. The reverse holds too, with the most free averaging corruption rank 12 and least free at 139. Unlike spurious correlations like Jevons' sunspots, this link is grounded in public choice theory: self-interested politicians and bureaucrats exploit low economic freedom's extensive government interventions—licenses, permits, quotas (LPQ)—to extract rents from businesses and consumers. Ramdev's hunger strikes and judicial activism fail to reduce these LPQ levers. Nations succeed not through moral purity but well-designed economic policies that minimize state interference.

**Key points:**

- Corruption strongly correlates with low economic freedom: least corrupt countries average EF rank 11, most corrupt average 163.
- Public choice theory explains corruption as rent-seeking by self-interested officials exploiting licenses, permits, and quotas.
- Moral interventions like judicial orders or Ramdev's fasts do not reduce government intervention levers fueling graft.
- Promote economic freedom via benchmarks like business freedom, trade freedom, and property rights to combat corruption.

**By Vipin**

* * *

**By: Ishu Kumar**

What does Baba Ramdev have in common with Supreme Court judges? One, both wear robes (albeit of different colors), and two, both believe that ad hoc interference in governance can help salvage India from the malice of graft. Moral ablution – whether it be from the [Judiciary](http://www.ndtv.com/article/india/supreme-court-free-food-grain-is-our-order-not-suggestion-48460?cp) or [Mr. Ramdev](http://economictimes.indiatimes.com/news/politics/nation/baba-ramdev-on-fast-track-says-corrupt-should-hang/articleshow/8709620.cms) – will not dent corruption, only economic freedom can. Corruption is an economic phenomenon, and the emperors are without robes.

The good news is that we’ve data ranking nearly 180 countries on both corruption and economic freedom. Since 1998 *[Transparency International](http://www.transparency.org/)* measures the “degree to which public sector corruption is perceived to exist”. And since 1995 the [Heritage Foundation](http://www.heritage.org/index/) has been ranking countries according to their “economic freedom” as measured by ten benchmarks including business freedom, trade freedom, and property rights. 5 of the 10 least corrupt countries are also amongst the 10 most economically free countries: Singapore, Australia, New Zealand, Canada and Denmark. The 10 least corrupt countries have an average economic freedom index rank of 11, while the average for 10 most corrupt countries is 163! The relationship holds true the other way around as well. The 10 most economically free countries have an average rank of 12 while the 10 least free countries have an average rank of 139 on corruption index.

Stanley Jevons – 19th century economist – discovered that there is a statistical relation between *sunspots* and *business cycles*, and claimed that sunspots caused business cycles. The idea was received with much ridicule, so much so that a fellow economist published a mock-paper on sunspots and boat races! The relation between economic freedom and corruption is no *sunspot economics* though, there is sound theory. [The Public Choice School of Economics](http://en.wikipedia.org/wiki/Public_choice_theory) tells us that politicians and bureaucrats are self-interested agents, who are likely exploit profit making opportunities. Low economic freedom corresponds to extensive government intervention in the form of licenses, permits and quotas (LPQ). Profit-maximizing politicians use LPQ levers to extract rents from businesses and consumers. Mr. Ramdev’s hunger-strike and the judiciary’s activism does nothing to decrease LPQ levers.

Oscar Wilde once said “There is no such thing as a moral or an immoral book. Books are well written, or badly written” (we didn’t pick Oscar Wilde because Mr. Ramdev thinks homosexuality is a “[disease](http://gaybombay.blogspot.com/2009/07/baba-ramdev-is-wrong-homosexuality-is.html)”). Perhaps there is no such thing as a moral or immoral nation, only ones that have well-designed economic policies and those that don’t. In case Mr. Ramdev is wondering what to read while on the hunger-strike, we suggest *[Portrait of Dorian Gray](http://en.wikipedia.org/wiki/The_Picture_of_Dorian_Gray)* and *[The Law](http://en.wikipedia.org/wiki/The_Law_\(1850_book\))*.

[

![](https://substackcdn.com/image/fetch/$s_!bEbI!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F884a56b0-715a-493f-9f78-fc370d4dfdaf_912x608.jpeg "Economic Welfare and Corruption Index")



](https://spontaneousorder.in/black-robes-saffron-robes-and-the-economics-of-corruption/graph-sdfg-2/)

\* Figures are from the Fraser Institute

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## India, Hungry Kya?

Original: https://www.spontaneousorder.in/p/india-hungry-kya

Author: Spontaneous Order

Published: 2011-06-02T20:24:30.000Z

Topics: child-malnutrition, agriculture-regulation, economic-freedom, food-wastage

> By: Ishu Kumar (Communicating Reality Intern 2011, CCS) In 2006, 44 percent of children under age five in India suffered from malnutrition; the number for Somalia was 33 percent! This is based on the WHO definition that a child is considered suffering...

**Summary:**

In 2006, 44% of Indian children under five suffered from malnutrition—higher than Somalia's 33% and far above developed nations like Singapore (3.3%) and Germany (1.1%)—despite India producing enough food and hosting 25% of the world's hungry poor, concentrated in states like Madhya Pradesh, Bihar, and Uttar Pradesh. The author critiques Oxfam's 'hunger-free' campaigns and Amartya Sen's focus on pushing people above starvation, contrasting it with classical-liberal emphasis on wealth creation and Frédéric Bastiat's insight into how free markets invisibly coordinate abundance, as in 19th-century Paris. India's high regulation—via the Essential Commodities Act restricting food flows, limits on private agricultural investment, and poor economic freedom ranking—causes the paradox of hunger amid 40% wastage of fruits and vegetables, as noted by Kamal Nath in 2010. Farmers lack technology and entrepreneurship without private capital. The solution: deregulate to unleash village entrepreneurship, enable private investments in cold storage, packaging, transport, and retail, achieving not mere food security but opulence with consumer choice, beyond PDS rice allocations.

**Key points:**

- India's 44% child malnutrition rate in 2006 exceeds Somalia's 33% due to regulatory barriers, not food scarcity.
- 40% of fruits and vegetables rot before reaching consumers because of distribution restrictions and lack of private investment.
- Essential Commodities Act and limits on private agriculture hinder productivity and free food flows across regions.
- Deregulate agriculture and retail to spur entrepreneurship, technology, and infrastructure for food opulence with variety.
- Free markets minimize wastage and coordinate supply via the invisible hand, unlike government interventions.

**By Vipin**

* * *

**By: Ishu Kumar (Communicating Reality Intern 2011, CCS)**

In 2006, 44 percent of children under age five in India suffered from malnutrition; the number for Somalia was 33 percent! This is based on the WHO definition that a child is considered suffering from malnutrition if her weight is more than two standard deviations below the median. India is miles away from developed nations like Singapore and Germany where malnutrition levels are as low as 3.3 percent and 1.1 percent respectively (to view how nations fared over the last century in child malnutrition click [PLAY](http://www.gapminder.org/world/#$majorMode=chart$is;shi=t;ly=2003;lb=f;il=t;fs=11;al=30;stl=t;st=t;nsl=t;se=t$wst;tts=C$ts;sp=5.59290322580644;ti=2006$zpv;v=0$inc_x;mmid=XCOORDS;iid=ti;by=ind$inc_y;mmid=YCOORDS;iid=pyj6tScZqmEcEYRXHDvupJQ;by=ind$inc_s;uniValue=8.21;iid=phAwcNAVuyj0XOoBL_n5tAQ;by=ind$inc_c;uniValue=255;gid=CATID0;by=grp$map_x;scale=lin;dataMin=1970;dataMax=2008$map_y;scale=lin;dataMin=0.5;dataMax=64$map_s;sma=49;smi=2.65$cd;bd=0$inds=i203_t001977,,,,;i163_t001990,,,,;i101_t001999,,,,;i207_t002006,,,,) and see graphs below). Hunger is real. The [World Food Program](http://www.wfp.org/) website says:

“Despite significant economic progress in the past decade, India is home to about 25 percent of the world’s hungry poor. Although the country grows enough food for its people, pockets of hunger remain. Stark inter-state disparities exist with some states better off on all social indicators than the others. The states that suffer from hunger and malnutrition the most include Madhya Pradesh, Chhattisgarh, Bihar, Jharkhand, Orissa, Rajasthan and Uttar Pradesh.”

The “hunger-free campaign” that Oxfam International [launched](http://www.hindu.com/2011/06/02/stories/2011060259820200.htm) yesterday is of great significance in this context.  Prof. Christopher Lingle, a friend of CCS, once said of the Delhi School of Economics, “the problem is that you teach poverty here, not wealth creation”. This is precisely the problem with Oxfam and the Amartya Sen gang. They ask “how do we push millions of starving people above the starvation line”, not “how do millions of people go from starving to opulent eating”.  Frédéric Bastiat, a 19th century French economic journalist, once asked “How does Paris feed itself?” Bastiat observed that Paris did not have a central food authority, yet astoundingly enough there was bread, wine, cheese, and meat on dining tables. This was because entrepreneurs – thousands of them – plan to feed Paris each day, guessing possible demands and provisioning matching supplies. The multitude of plans coordinated by the invisible hand of the free market.

The problem is not one of food security, but of food opulence. The questions are: (a) How can India reach nutritional intakes similar to that of developed nations, and with (b) plenty of choice in the food Indians consume (as distinct from allocating more rice under the Public Distribution System). Unfortunately India feeds itself very differently from 19th century Paris. Both production and distribution of food is highly regulated. Amartya Sen had once said at a lecture in the University of Delhi that the “invisible hand” is “truly invisible”, the truth is very different. The invisible hand has been clamped by a myrid of government regulations including serious restrictions on private investment in agriculture and the Essential Commodities Act which hinders free flow of certain agricultural goods from one region to another. India sits amongst “economically repressed” nations in the Heritage Foundation’s Economic Freedom [Index](http://www.heritage.org/index/Ranking).

In 2010 Kamal Nath (then Union Minister for Road Transport and Highways) [noted](http://news.bbc.co.uk/2/hi/business/8635688.stm) that 40 percent of fruits and vegetables produced in India rot before reaching the final consumer. India suffers from the tragic paradox of hunger on one hand and wastage on the other. Even critics would admit that free markets tend to limit wastage. Kamal Nath’s observation pertains only to losses in distribution, restricting private investment in production too has been suicidal. Sans private capital farmers get neither technology nor entrepreneurship, limiting productivity.

If India is to feed herself better, she ought to unleash the entrepreneurial latent that sleeps in her villages. Cold storages, efficient packaging, rapid transport, and the whole host of distribution infrastructure will arise only if India welcomes private investments in retail. We don’t see much coming out of Oxfam’s approach to hunger in India. On a more rhetorical day we’d have probably titled this article Oxfamine, but today is not one such day, and neither do we doubt Oxfam’s intentions. However the road to hell is often paved with good intentions.

[

![](https://substackcdn.com/image/fetch/$s_!WVuR!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F20f17403-4191-405f-ad9a-fe5a8b1f6330_150x150.jpeg)



](https://spontaneousorder.in/wp-content/uploads/2011/06/Image-1.jpg)

[

![](https://substackcdn.com/image/fetch/$s_!KHAF!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F077a335a-4453-44c8-9341-6e5d2cdd4448_150x150.jpeg)



](https://spontaneousorder.in/wp-content/uploads/2011/06/Image-2.jpg)

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Mr. Yechury, Let’s Get Our Stocks and Flows Right!

Original: https://www.spontaneousorder.in/p/mr-yechury-lets-get-our-stocks-and-flows-right

Author: Spontaneous Order

Published: 2011-06-01T19:49:18.000Z

Topics: economic-reforms, income-inequality, poverty-statistics, neo-liberalism

> By: Ishu Kumar (Communicating Reality Intern 2011, CCS) In his weekly column for the Hindustan Times – Left Hand Drive – Mr. Sitamram Yechury argues that the United Progressive Alliance II government is implementing neo-liberal economic reforms in its

**Summary:**

Vipin critiques Sitaram Yechury's Hindustan Times column accusing the UPA II government of neo-liberal reforms harming the aam aadmi, arguing that post-1991 deregulation has been vital for common man's income growth. Yechury errs by comparing a stock variable (77% or over 80 crore people surviving on less than Rs 20 a day in 2011) to a flow variable (US dollar billionaires increasing from 26 to 52, now 69, over two years), ignoring whether poverty numbers rose. Yechury's claim of widening income-wealth disparities lacks data; between 1980-2002, India's Gini coefficient showed no change, bottom 20%'s national income share rose 5%, expenditure share 1.5%, and poor/non-poor income growth ratio was 1. This aligns globally, with rising sales of luxury cars (BMW, Audi, Mercedes) and affordable two-wheelers/small cars. Citing Surjit Bhalla, the author decries the 'poverty industry' that maximizes poverty for profit, ignoring patterns like poor's fruits/vegetables consumption ratio doubling from 14% to 28% (1983-2004-05). From a classical-liberal view, such statistical manipulation hinders honest debate on reforms benefiting the poor.

**Key points:**

- Yechury improperly compares stock (current poverty numbers) and flow (billionaire increase) variables to claim worsening inequality.
- India's Gini coefficient remained unchanged from 1980-2002, with bottom 20%'s income share up 5% and poor/non-poor growth ratio at 1.
- Post-1991 deregulation drove income growth for the aam aadmi, evidenced by booming luxury and affordable vehicle sales.
- The 'poverty industry' promotes misleading stats like static calorie intake, ignoring improved poor's fruit/vegetable consumption ratios.

**By Vipin**

* * *

**By: Ishu Kumar (Communicating Reality Intern 2011, CCS)**

In his weekly column for the Hindustan Times – [Left Hand Drive](http://www.hindustantimes.com/It-s-two-steps-back/Article1-703796.aspx) – Mr. Sitamram Yechury argues that the United Progressive Alliance II government is implementing neo-liberal economic reforms in its second term, and that this is against the UPA’s professed concern for the *aam aadmi* (common man).

We believe that whatever little deregulation happened post 1991 has been vital for the income growth of the *aam aadmi*. But that is something we can agree to disagree on with Mr. Yechury, we cannot however agree to disagree on two grounds. One, making fallacious use of statistics to draw logically (not ideologically) unsubstantiated conclusions. Two, making claims which are not backed by data. Mr. Yechury is guilty of both these sins.

As for the first area of disagreement, Mr. Yechury says:

“Over the last two years, the number of US dollar billionaires in India has increased from 26 to 52; now standing at 69…On the other hand, 77% or more than 80 crore, of our people survive on less than Rupees 20 a day”.

This is comparing mangoes (Delhi summers bring great mangoes) to oranges. In economic terms this is comparing a stock variable to a flow variable. “A stock variable is measured at one specific time, and represents a quantity existing at that point in time”, a flow variable on the other hand “is measured over an interval of time” (Wikipedia). The number of people surviving at less than Rupees 20 a day in 2011 is a *stock variable*, the increase in number of billionaires over the last two years is a *flow variable*. The scientific question is whether the number of people living on less than Rupees 20 a day has increased over the last two years?

Mr. Yechury also goes on make claims wholly unsupported by data, this is our second area of disagreement. He  says: “The vulgar disparities of income and wealth are sharply widening”. The [fact of the matter](http://www.oxusinvestments.com/files/pdf/ei150304.pdf) is that between 1980 and  2002, there was no change in the Gini coefficient of India (a measure of overall income inequality), implying that if the incomes of the rich have grown so have the incomes of the poor. In fact during the same period the share of the income-wise bottom 20% of Indians in national income increased by 5%, share of the poor in expenditures increased by 1.5%, and the ratio of the growth of incomes of poor to the growth of incomes of the non-poor was 1. This is [true](http://www.foreignpolicy.com/articles/2011/02/07/the_poor_are_getting_richer) not just of India but the world in general.

A natural corollary is the fact that high end automobile companies like BMW, Audi, and Mercedes have achieved [rapid growth](http://www.thehindubusinessline.com/companies/article1608723.ece) in Indian markets and are paving the way for brands like Ferrari and Rolls Royce. Along with this, there has been a marked rise in the sales of [two-wheelers and small segment](http://in.lifestyle.yahoo.com/autos/affordable-premium-motorcycles-market-boom-year-article-ilwu.html) cars.

Why all this hoola-ho about poor getting poorer if numbers don’t back that claim? In his Indian Express article today, Surjit Bhalla warns us against intellectual corruption and the *poverty industry* – the people who benefit by running pro-poor programs.  In this industry profit-maximization means poverty-maximization. Surjit Bhalla says

“…*Indian intellectuals want to document that the poor are getting poorer, and as evidence, use the fact that the consumption of calories by the poor has barely increased, and perhaps even declined. That this is a historical worldwide pattern that is to be expected with a reduction is not relevant. This is dishonest: look at the food consumption of the poor. In 1983, the consumption of fruits and vegetables by the poor was 14 per cent of the consumption of fruits, vegetables and food grains; in 2004-05, this ratio has doubled to 28%!*”

We are at a point in our political system where manipulation of facts and figures has become a most common political trick. And this ought to change, the question is how?

*Are the poor in India getting poorer?* We look forward to your views on the comments section of the blog.

* * *

**About Vipin**

Vipin P Veetil is a second year PhD student in the Department of Economics at George Mason University.

## Amartya Sen’s harmful education policy

Original: https://www.spontaneousorder.in/p/amartya-sens-harmful-education-policy

Author: Spontaneous Order

Published: 2011-03-20T22:22:04.000Z

Topics: education-policy, private-tuitions, school-choice, government-schools

> Amartya Sen has often spoken against private tuitions, especially by government teachers – and the communist government in West Bengal implemented a ban on all tuitions by school teachers based on Sen’s recommendations. Now of course there is a certai

**Summary:**

Harsh Gupta criticizes Amartya Sen's opposition to private tuitions, particularly by government teachers, which influenced West Bengal's communist government to ban all tuitions by school teachers. Gupta argues this ban is counterproductive, as tuitions provide incentives for teachers absent in government schools lacking performance pay. He references Swami Aiyer's prior critique and ASER 2010 data showing a decrease in tuition incidence among private school students up to Std VIII, while government school students in low private-enrollment states like Bihar, West Bengal, and Orissa—especially Std V—have high tuition rates. This indicates blatant violation of the ban and a correlation between scarce private schools and reliance on tuitions. From a classical-liberal viewpoint, Sen and socialists err by banning private provisions for an illusory level playing field; instead, enhancing private sector roles in education fosters accountability, reducing the need for supplementary tuitions like private coaching. Gupta quips that if socialists had sense, they wouldn't be socialists.

**Key points:**

- West Bengal banned school teacher tuitions based on Amartya Sen's recommendations, but the law is widely violated.
- ASER 2010 reports high tuition rates among Std V government school students in Bihar, West Bengal, and Orissa, where private enrollment is low.
- Private school enrollment correlates with lower tuition needs, unlike government schools lacking teacher incentives.
- Classical-liberals advocate expanding private sector in education to build accountability and minimize reliance on tuitions.

**By Harsh Gupta**

* * *

Amartya Sen has often spoken against private tuitions, especially by government teachers – and the communist government in West Bengal implemented a ban on [all tuitions by school teachers](http://articles.timesofindia.indiatimes.com/2010-12-28/kolkata/28262957_1_private-tuitions-private-schools-teachers) based on Sen’s recommendations. Now of course there is a certain conflict of interest here, but outright banning of tuitions where the teachers actually have an incentive to teach (as opposed to in government schools, where there is no performance pay) is counterproductive. Swami Aiyer had earlier taken Sen to the cleaners [earlier](http://swaminomics.org/?p=744), but we have some more data from the ASER 2010 [report](http://www.asercentre.org/ngo-education-india.php?p=Spotlight:+ASER+2010) which further shows the stupidity and hypocrisy of Sen’s prescriptions

> A clear decrease is seen in the incidence of tuition among children enrolled in private schools across all classes up to Std VIII. This proportion has not changed much among children enrolled in government schools, **although in states like Bihar,** ***West Bengal*** **and Orissa, where private school enrolment is low, the proportion of children in Std V enrolled in government schools who take tuition classes is high**

So not only is the law being blatantly violated in my state (thank god for law-breakers!), there is a clear correlation between lack of private schools and high incidence of tuitions.

Amartya Sen, like all good socialists, got it reverse. Instead of banning all private provisions to create an illusory level playing field, he and others should support an enhanced role for the private sector in education and other fields. That creates accountability, and then remedies/supplements like tuitions are less required. But if socialists had sense, they would not be socialists – now would they?

—

Cross-posted [here](http://swaraj.nationalinterest.in/2011/03/20/amartya-sens-harmful-education-policy/)

Read more : [https://spontaneousorder.in/amartya-sen-from-english-to-school-choice/](https://spontaneousorder.in/amartya-sen-from-english-to-school-choice/)

* * *

**About Harsh Gupta**

## Nineteen brands of toothpaste

Original: https://www.spontaneousorder.in/p/nineteen-brands-of-toothpaste

Author: Spontaneous Order

Published: 2011-03-20T21:50:30.000Z

Topics: consumer-choice, economic-freedom, central-planning, school-choice

> Somebody recently told me how could I ever use mint toothpaste? That reminded me of Nehru’s question – why do we need nineteen brands of toothpaste. Of course I did not bore my friend with another rant against Nehru. But I thought I would burden you g

**Summary:**

Harsh Gupta counters Jawaharlal Nehru's rhetorical question about the need for nineteen brands of toothpaste by highlighting the diversity of preferences among India's over one billion people: some prefer mint, others plain or herbal; some seek tartar control, whitening, best prices, specific quantities, or appealing packaging. This variety underscores the classical-liberal principle that individuals are unique and free to spend their hard-earned money as they see fit, rejecting sacrifices of freedom for uniformity. While India has won the 'battle of choice' in consumer goods like toothpaste, the broader 'war' persists in critical sectors such as education and healthcare, where centralized control still dominates. Gupta argues that critics who view freedom as messy, wasteful, or uncoordinated are mistaken; history and economics prove freedom not only morally superior but also more efficient than top-down planning. Policymakers and citizens must ignore such outdated views and champion expanded individual choice across all domains.

**Key points:**

- Diverse preferences among India's 1+ billion people justify multiple toothpaste brands catering to tastes like mint, herbal, tartar control, whitening, price, and packaging.
- Individuals have the right to spend their earned money on preferred products without centralized interference.
- India succeeded in toothpaste choice but must extend it to education and healthcare to win the larger battle for freedom.
- Freedom is both morally superior and more efficient than centralized control, as evidenced by history and economics.

**By Harsh Gupta**

* * *

Somebody recently told me how could I ever use mint toothpaste?

That reminded me of Nehru’s question – why do we need nineteen brands of toothpaste. Of course I did not bore my friend with another rant against Nehru. But I thought I would burden you guys instead.

Well we need many brands of toothpaste because there are a billion plus people in this country. Some like mint, some like it old plain simple. Some like herbal, some do not. Some need tartar control, some need whitening. Some do not care about what kind of toothpaste – and instead care about best prices at the quantities they seek, and so on. And yes, some just like better packaging etc too.

We are all free and unique individuals, and we must not sacrifice our freedom and individuality so easily. We work hard to earn our money, and we like to spend it the way we see fit. India may have won the battle of choice in toothpastes, but the war still hangs in the balance when it comes to even more important choices – in education, health-care, and so on.

There will always be some who see freedom as messy, wasteful, uncoordinated. They are wrong. Not only is freedom more moral than centralized control, it is inevitably more efficient too. We must learn to ignore those who ignore this lesson of history and economics.

(Cross-posted at http://swaraj.nationalinterest.in/2011/03/20/why-do-we-need-nineteen-brands-of-toothpaste/ )

* * *

**About Harsh Gupta**

## Classical liberalism 101 – Part 2

Original: https://www.spontaneousorder.in/p/classical-liberalism-101-part-2

Author: Spontaneous Order

Published: 2011-03-16T15:01:18.000Z

Topics: classical-liberalism, individual-freedom, anti-statism, voluntarism

> Talking about liberalism in India, one falls for the insipid and inane debate between some mythologized Western rugged individualism and ostensible Eastern harmonious social co-operation. But we are talking about the autonomy of individuals and groups a..

**Summary:**

Classical liberalism in India champions the autonomy of individuals and groups against the ever-increasing authority of the state, bureaucrats, and politicians, rejecting the false debate between mythologized Western rugged individualism and Eastern harmonious social cooperation. The author supports generous voluntary charity, socio-cultural associations, peaceful protests, and economic boycotts of offensive art or writing as valid social activism, while staunchly opposing government enforcement of such aims, arrests, or censorship—even if universally offensive—to preserve the artist's autonomy and that of non-offended individuals. Liberalism does not advocate lonely atomism or disdain for collectivism, which is second nature to humans for causes or fun; instead, it worries about coerced collectivism along caste, religious, or Marxist class lines, which the state fails to prevent or even encourages. Quoting Thomas Paine's *Common Sense*, it distinguishes the nation's state from its society, separating normative questions of *what* should be done from *who* (state vs. voluntary actors) and *how*. Gandhi's ideas of voluntarism and trusteeship opposed centralized state power, though misinterpreted by politicians. Coercive socialism, not individual freedom, fosters lonely, atomized lives by eroding family and community as welfare safeguards.

**Key points:**

- Liberalism supports voluntary charity, associations, protests, and boycotts but opposes state enforcement, censorship, or arrests of offensive art to protect individual autonomy.
- Reject coerced collectivism along caste, religious, or class lines, which the state should prevent rather than encourage.
- Distinguish the state from society, as per Thomas Paine: what should be done is separate from who does it.
- Gandhi's voluntarism opposed centralized state power, contrary to politicians' misinterpretations.
- Socialism's coercion, not individualism, leads to atomized lives without family or community safeguards.

**By Harsh Gupta**

* * *

Talking about liberalism in India, one falls for the insipid and inane debate between some mythologized Western rugged individualism and ostensible Eastern harmonious social co-operation. But we are talking about the autonomy of individuals and groups as opposed to the ever-increasing authority of the state and its functionaries – bureaucrats and politicians. For example, one can be for generous voluntary charity and various socio-cultural associations while still being against the idea of these aims being enforced by the government – especially beyond a certain necessary minimum and in a one-size-fits-all centralized manner. One can peacefully protest or better still economically boycott artists and writers producing work that one finds offensive – that happens to be a voluntary, social-based activism route – while still defending those very artists from being arrested by the government, or their works being censored. After all, such authoritarian steps by the state reduce the autonomy of those individuals who may not find the paintings, say, to be offensive. Indeed, even if everybody found that painting to be offensive, but so long as it was just a painting, banning it still takes away the autonomy of the artist.

Therefore, when one talks about individual freedom, one does not call for a lonely atomism – whereby any collectivism is looked down upon. Getting together for a cause – or for good old fun – is second nature to man. What is morally worrying to many is a coerced collectivism that is either not prevented by the state, or is worse encourage by it – whether such collectivisms are along social divisions like caste or religious purposes, or along the more Marxist thought of class lines. As the American polemicist Thomas Paine wrote in his revolutionary pamphlet, *Common Sense,* the biggest mistake that many people make (and quite clearly, continue to make) is to confuse the nation’s state with the nation’s society. Whether something *should* be done is one normative question, *who* it should be done by is another normative question (and *how* it should be done is yet another – although that is less of a normative and more of a positivist question). Indeed, such ideas based on voluntarism and trusteeship formed the underpinnings of Mohandas Gandhi – who was strongly against a centralized, powerful state, and who has been grossly misinterpreted by Indian politicians as we will read about later. Another point to note here about this rather silly accusation of individual freedom resulting in a lonely and listless society is that it is actually coercive collectivism – especially in the form of socialism – that leads to people living lonely and relatively more “atomized” lives with no more need for family and community as a safeguard for individual welfare.

* * *

**About Harsh Gupta**

## Economic Freedom of Indian States

Original: https://www.spontaneousorder.in/p/economic-freedom-of-indian-states

Author: Spontaneous Order

Published: 2011-03-15T22:41:34.000Z

Topics: economic-freedom, indian-states, decentralization, state-reforms

> The Cato Institute and Indicus Analytics have released the Economic Freedom of the States of India 2011 report along with the support of Friedrich Naumann Foundation. The rankings are based on the latest comprehensive and objective data available (2009)..

**Summary:**

The Economic Freedom of the States of India 2011 report by Cato Institute and Indicus Analytics, using 2009 data and modeled on Fraser Institute’s global rankings, identifies Tamil Nadu as India's most economically free state, with Gujarat second and Andhra Pradesh third—the fastest improver. Swaminathan Aiyar contributes a chapter on Andhra Pradesh's rise, complementing Bibek Debroy and Laveesh Bhandari's analysis, which confirms a positive correlation between economic freedom and growth. From a classical-liberal viewpoint, the report underscores decentralization's value: states competing for businesses and skilled labor are more likely to pursue efficiency-enhancing reforms than a centralized government, embodying 'laboratories of democracy' in India's federal system. Even mild competition outperforms strong convictions, especially in democracy. A caveat notes Andhra Pradesh's gains partly from better exploiting central funds to reduce its government size relative to the economy (one-third of the ranking's weight), though such top-down funds are fungible and not a scalable strategy. The author urges readers to review the report, comment on their states, and foster discussion on bottoms-up, state-led reforms.

**Key points:**

- Tamil Nadu ranks first in economic freedom among Indian states, Gujarat second, and Andhra Pradesh third as the fastest improver based on 2009 data.
- Economic freedom positively correlates with economic growth across states.
- State-level competition for businesses and labor drives governance and business environment reforms more effectively than central mandates.
- States serve as laboratories of democracy through healthy rivalry, though Andhra Pradesh's rise partly relied on exploiting central funds (one-third ranking weight), a non-scalable approach.

**By Harsh Gupta**

* * *

The Cato Institute and Indicus Analytics have [released the Economic Freedom of the States of India 2011 report](http://www.cato.org/economic-freedom-india/) along with the support of Friedrich Naumann Foundation. The rankings are based on the latest comprehensive and objective data available (2009), and is modeled on the Fraser Institute’s world rankings. We find that Tamil Nadu is economically the most free state in India, with Gujarat a close second. Andhra Pradesh (AP), at third rank, is also the fastest improver. Swaminathan Aiyar has a chapter explaining the rise of Andhra Pradesh which nicely supplements the great work done by Bibek Debroy and Laveesh Bhandari in the rest of the report. More importantly, and some would say predictably, we find a positive correlation between economic freedom and economic growth.

This report also shows us the importance of decentralization. If states must compete on efficiency to get more businesses and skilled labour, they are more likely to enact reforms than the central government. The mildest competition may push one further than the strongest of convictions – especially in a democracy like ours. Indeed, free states healthily competing against each other to improve their governance and business environment are the laboratories of democracy. Although one must add the caveat here that part of the rise of AP’s ranking was that it was better able to exploit central funds and hence reduce the size of its state government relative to the economy, which was one-third of the ranking value. Of course, better accessing central funds is not a strategy to be recommended across all states because any top-down fund is by definition fungible.

Please go through the report and comment on your state! Let us start a fruitful discussion on bottoms-up state-led reforms.

* * *

**About Harsh Gupta**

## Classical liberalism 101 – Part 1

Original: https://www.spontaneousorder.in/p/classical-liberalism-101-part-1

Author: Spontaneous Order

Published: 2011-02-23T14:28:43.000Z

Topics: classical-liberalism, free-markets, school-vouchers, rule-of-law

> For most of history (and unfortunately in many places even today) the average individual was a slave – a de facto slave if not a de jure one. He or she – the aam aadmi, as it were, was fodder for someone else. Fodder for the monarch. Fodder for the fe

**Summary:**

Throughout history, the average individual has been treated as fodder for monarchs, feudal lords, clergymen, or barbarians, coerced by threats of violence against their life, liberty, and property, even if rulers faced similar constraints. Classical liberal philosophy, at its core, asserts that individuals are free to do whatever they want so long as it does not threaten someone else's life, liberty, or property—a principle that rejects coercion in favor of persuasion through morals or markets. This translates to daily life as non-interference in personal sexual, religious, or other preferences (material harm only, not sentimental), recognition that free markets have generated unprecedented wealth (making historical rich envious of modern welfare), and support for equality of opportunity through targeted redistribution like vouchers for students rather than schools, yielding better educational outcomes per rupee spent per international studies, and similarly for health and food security. Genuine liberals defend rule of law, free speech, civil liberties, and privacy against intrusive, Orwellian government, prioritizing the uniqueness and sentience of every individual over dogmatic extremes or interventionist wars.

**Key points:**

- Individuals have historically been coerced by violence from rulers, lords, and priests, acting against their choices.
- Classical liberalism grants freedom to act as one wishes without threatening others' life, liberty, or property.
- Free markets have created unprecedented wealth, surpassing the luxuries of past elites.
- Achieve equality of opportunity via vouchers for education, health, and food, leveraging choice and competition for superior outcomes per international studies.
- Liberals defend rule of law, free speech, civil liberties, and privacy against big government.

**By Harsh Gupta**

* * *

For most of history (and unfortunately in many places even today) the average individual was a slave – a de facto slave if not a de jure one. He or she – the *aam aadmi*, as it were, was fodder for someone else. Fodder for the monarch. Fodder for the feudal lord. Fodder for the clergyman or the *brahmin*. And when ‘law and order’ (which should not be confused with ‘rule of law’) was not maintained – he became fodder even for the good-old barbarian.

Obviously even the feudal lord could be forced to do away with his property and life if the king really desired so. Even the king could not marry someone of another sect or caste because of the state church or temple or mosque. And the priest, like many others, most definitely could not lead a ‘hedonistic’ life publicly lest he be physically attacked by his fellow believers.

So many individuals were forced to act, some more frequently and some less frequently, against their own choice – and not because of persuasion of morals or money. But they were forced to act because of an explicit or implicit threat of violence: a threat, when taken to its logical conclusion, to take away their very lives itself.

Now the libertarian or the classical liberal philosophy would be simplistic if just a few lines could describe it – what with rather rabid debates occasionally flaring up amongst various libertarians on the smallest of nuances! But, I do find the core of the libertarian philosophy to be charmingly simple. It is basically that you are free to do whatever you want so long as it does not threaten somebody else – his or her life, liberty and property. OK, so descending from the 30,000 feet view, how is all this relevant in our daily lives?

Let’s see. Do you believe in not interfering with an individual’s sexual, religious and other preferences as long as others’ preferences are not hurt? (That is materially, not “sentimentally”) Do you agree that free markets have created unprecedented wealth – in fact so much wealth that the rich of a few centuries earlier might not mind being on welfare today? If the answer is even a qualified yes to most of the questions above – there is a very high chance that you are a liberal!

But many believe – so do I – in equality of opportunity even if it means some redistribution. But here we must move beyond this normative consensus, and ask “how”? Perhaps we should be thinking about funding students and not schools (through vouchers) because individual choice and market competition have shown to have better educational outcomes per rupee spent, according to many international studies. Similarly, vouchers for health coverage, food security and so on.

The genuine liberal would always stand in defence of the rule of law, free speech, civil liberties, privacy and oppose an intrusive, big Orwellian government – whether or not he/she supports wars to ‘liberate’ foreign countries. There will always be exceptions, there will always be more moderate and more dogmatic liberals – but our guiding star will always be respecting the uniqueness, and indeed the sentience, of every individual.

(Cross-posted at http://swaraj.nationalinterest.in)

* * *

**About Harsh Gupta**

## When the Census Official Calls

Original: https://www.spontaneousorder.in/p/when-the-census-official-calls

Author: Spontaneous Order

Published: 2010-11-19T13:41:05.000Z

Topics: caste-census, census-act, freedom-of-expression, individual-rights

> A disclaimer: Serious is not necessarily sensible.

**Summary:**

The author argues from a classical-liberal standpoint that Indian citizens retain significant freedom when asked about caste in the upcoming census, as the Census Act 1948 (Section 8(2)) legally binds individuals only to answer 'to the best of his knowledge or belief,' aligning with Article 19(1)(a)'s protection of speech and expression, including the right to silence. The maximum penalty for refusal is a mere Rs. 1000 (Section 1(d)), and no court or police can act without a superior authority's prior complaint (Sections 12, 13, 13-A). Citing the 1881 census's 1,929 castes (14% with fewer than ten members), the post encourages inventing a caste or responding with 'Indian' or 'Bharatiya'—rooted in mythology as descendants of Raja Bharat—to assert personal identity over state categorization. While acknowledging caste data's potential utility for reservations and noting historical inaccuracies (e.g., phonetic mix-ups from 1881-1931) and suggestions for decentralized studies, the author prioritizes individual choice amid government plans. The census shapes official identity, but belief-based responses preserve liberty against casteism.

**Key points:**

- Citizens can legally refuse caste disclosure or invent one, as Census Act requires answers only per personal 'knowledge or belief.'
- Maximum penalty for non-compliance is Rs. 1000, with no court action possible without superior complaint.
- Freedom of speech under Article 19(1)(a) includes right to silence on caste.
- Respond with 'Indian' or 'Bharatiya' to reject caste categorization on belief grounds.
- Historical census data shows fluid castes, supporting self-identification over rigid mapping.

**By Gideon Mathson**

* * *

The seemingly interminable debate on the issue of mapping caste through the census, ended sometime back. Or did it? As the cabinet mulls the operational details needed to get the information, the Indian tax-payer citizen who questions the necessity to reveal his caste might find solace in the underwritten words.

The Census Act (Act no 37, of 1948) in section (8), sub-section (2) states: “Every person to whom any question is asked (under sub-section 1) shall be legally bound to answer the question to the best of his knowledge or belief”. Surely an individual’s knowledge and belief is his own concern and a matter of his own discretion. Constitutionally an Indian citizen’s right to speech and expression is protected under Article(19)(1)(a) of constitution. The freedom of speech and expression includes the freedom to not speak or express. So barring a constitutional amendment, something not likely to happen in the near future, your right to silence will remain unscathed. Even if it were an offence to repudiate the caste system, the maximum penalty to be imposed on the citizen is Rs. 1000 \[ Section 1(d) of the Census Act\]. However if the question of punishment irks you and you feel the matter is one of upholding an ideal, why not cast yourself a different caste?

The 1881 census aggregated 1,929 castes, of which 14% had a population of less than ten. So what prevents you from creating your own caste? As stated in the Census Act, what you reveal to the census officer is a matter of “Belief”. And you surely aren’t going to be ticking out your caste from a list of 1,929 alternatives.

The Census itself might serve an important purpose as far as Caste is concerned. Given the prominent position caste based reservations have at most levels of work and education, reliable data on Caste would make it easier to identify solutions for the downtrodden. And for those who might benefit from revealing their castes, the option of doing so always exists.

Mapping caste data through the census might well have problems of its own. As described by Professor P.K Misra and Suresh Patil of the Anthropological Survey of India, castes in India would be fluid and ambiguous rather than stratified and clearly defined. Census data under the British Raj, between the years 1881 and 1931 has often mixed up castes because of phonetic resemblances or because two separate caste groups have the same name. The solution, as suggested by Prof. V.K Natraj of MIDS might well be an independent decentralized study. However given that the government is going ahead with the caste question, the issue at hand is not one of alternative method but one of freedom of choice.

The census maps you down as a citizen of this nation every ten years. The constitution, through the Census Act gives you the right to decide who you are, on the basis of your ‘belief’. Surely this merits some reflection.

What alternatives do you have when asked to list out your caste by the local census officer? Perhaps you could say “Indian”. And if you are meticulous and feel that “Indian” is an expression of nationality and not caste, then you could always say “Bharatiya”, after all the literal translation of Caste would be Jati, and we are all according to myth, descendants of Raja Bharat and residents of Bharatvarsha and therefore Bahratiya. And if you fear for the job of your local census officer, there is no cause for worry since no court or police officer can take cognizance of the matter even against a census officer, for recording caste, unless there is a prior complaint by superior authority. (Section 12, 13 & 13-A, Census Act).

So the next time the census officer calls, remember the details you give him create your official identity as a citizen of this nation state. And if casteism does not conform to your belief in your own identity, feel free to replace it with something more appealing.

* * *

**About Gideon Mathson**

## Branding Ideology: A Comparison of Socialist and Libertarian Appeal

Original: https://www.spontaneousorder.in/p/branding-idealogy-a-comparison-of-socialist-and-libertarian-appeal

Author: Spontaneous Order

Published: 2010-11-18T16:11:35.000Z

Topics: libertarianism, socialism, ideological-branding, altruism

> Stereotypes can be powerful in the realm of popular culture and public opinion. And the arts tend to reflect this; look at Hollywood, movies in general or at literature. How many novels have you read which embrace a libertarian ideal; apart from Ayn Ran..

**Summary:**

Libertarianism has lost the public image war to socialism over the past decade, as socialist stereotypes evoke fighters for equality like Che or Obama, while libertarians are seen as money-grubbing capitalists or racists. Cold War-era associations of socialism with tyranny (Stalin, Mussolini, Hitler) no longer resonate amid terrorism and economic downturns. Art and culture amplify this: countless socialist-themed novels, films, and paintings focus on sorrow and the subjugated, whereas libertarian ideals appear mainly in Ayn Rand and Heinlein, presented in unreal worlds lacking emotion. Libertarianism theoretically excels via spontaneous order and profit-driven altruism (per Hayek), ensuring fair chances, but it seems heartless to the underprivileged, ignoring class divides that socialism explicitly recognizes and promises to dismantle. Socialism appeals to humans' sense of subjugation, forced equality, and revenge against the rich, while libertarianism celebrates self-dependent competition and talent, assuming innate inequality. To compete, libertarianism must incorporate more on altruism, compassion, and self-empowerment, moving beyond rationality to emotionally resonant rhetoric that counters socialism's marketing dominance.

**Key points:**

- Libertarianism's image as heartless capitalism fails against socialism's emotional appeal to altruism and equality.
- Cultural artifacts like novels and films overwhelmingly favor socialism's focus on human suffering over libertarian ideals.
- Libertarian theory relies on spontaneous order for large-scale altruism via profit motives, but this repels those feeling subjugated.
- Socialism markets 'revenge of the subjugated' and forced equality, appealing to weaker selves, while libertarianism must emphasize self-empowerment and compassion.
- Few libertarian works evoke emotion; extreme or utopian portrayals like Rand's limit broader appeal.

**By Gideon Mathson**

* * *

The public perception of libertarians and socialists can be embodied in a few stereotypes. Socialism today could be represented by Che, Barrack Obama, Dylan, or for a more general label, by ‘someone fighting for human equality’. The Libertarian stereotype for most might be the ‘money grubbing capitalist’ or the ‘white-trash-racist-money- grubbing- republican’. This essay will deal with an understanding of such stereotypes.

For the last decade libertarianism has been on the losing end of the image war with socialism. The closest libertarians came to dominating was their condemnation of socialism as a state based tyranny represented by Stalin, Mussolini, and Hitler. This image held considerable influence in the public mind during the cold war era. But this isn’t effective anymore; firstly because terrorism seems to be a far greater evil, so one perceived image has overpowered another also and because of the economic downturn, which has further strengthened the ‘libertarians are money grubbing capitalists’ image.

Stereotypes can be powerful in the realm of popular culture and public opinion. And the arts tend to reflect this; look at Hollywood, movies in general or at literature. How many novels have you read which embrace a libertarian ideal; apart from Ayn Rand and Heinlein? And with socialists the list of novels, poems, movies and paintings are innumerable. I believe that this is because art in itself has a tendency of focusing on sorrow and the subjugated, and no ideology spotlights those facets of humanity better than socialism.

And keeping this in mind, I would like to point out that libertarianism fails most drastically with regard to altruism. [Hayek for example says that altruism cannot be handed out by state.](http://www.youtube.com/watch?v=2HhsWHfGRIA), Individuals can only be directly altruistic to people they know personally and large scale altruism must result from the profit motive. So when every human being works for himself it results in an order that ensures that everyone is given a fair chance. That may be fine theoretically, but it isn’t a very appealing idea, for someone who is financially or socially underprivileged.

When we leave altruism and the empowerment of the lower classes to a ‘spontaneous order’, [it might work](http://www.youtube.com/watch?v=vuL8teeuJD8&feature=BF&playnext=1&list=QL), but it seems like the ideology doesn’t care, and people, who are naturally designed to view themselves as subjugated, will repudiate this idea as being heartless. Socialism on the other hand recognizes human suffering, recognizes the fact that class exists.

An example of the class divide argument is a [speech given by Margaret Thatcher](http://www.youtube.com/watch?v=okHGCz6xxiw) to the British Parliament where she indicates that though class divide exists because of capitalism, it means that people live at a higher level. Compare the ‘poor’ in America to the ‘poor’ in India and you’ll understand her point. But the hidden assumption behind her message is that class will always exist. And thus ‘lower class’ human beings, will always want something that says that this difference of classes is unnatural (created by money grubbing capitalists) and must be destroyed.

Perhaps one could conjecture that one person being above and another being below is the natural product of human competition, human beings who are more talented and more adapted to society, will be more successful. This is based on the assumption that human beings are not born equal.

But at the end of the day an idea like the equality of human beings, is artistically and socially a more digestible idea. Take anything: gay rights, women’s rights, poverty, racism; the libertarian ideal just says ‘you do what you want to’, but socialism says ‘If we fight the rich shall go down and the poor shall rejoice.’

In this sense socialism seems to appeals to a person’s weaker self, to his belief in his own subjugation and to his need for forced equality. It also creates an artificial sense of karma or justice, a kind of ‘revenge of the subjugated people’ which is an immensely appealing idea to most humans. It means they can trust their lives onto some external force that give them their rights.

Clearly, if libertarian thought is to be more appealing, it has to have a little more to say about altruism.

But let’s leave that alone for now. Let’s look at what the liberal ideal does have. Libertarianism looks at human beings as being capable of competition, as being self-dependent and it celebrates the current state of humanity. This to me is a believably optimistic stand point. Libertarianism is meant to appeal to an individual’s belief in his own talents rather than to his convictions about what has been denied to him. And yet few writers have lauded this or written about it. And the few that have have been too extreme or simplistic. Consider Ayn Rand’s utopist novels or Heinlein’s science fiction, both of them present libertarianism in an unreal world. Where a novel like that can impress, it cannot move a human being. It lacks emotion.

Socialism will always be a more appealing message to all those that believe that they deserve to get more out of life. And until liberal thinkers include a touch of compassion or an explication of self-empowerment in their discourse, their talk and logic and rationality will pale in comparison to Socialist rhetoric.

A bit ironic isn’t it; socialists have beaten libertarians at marketing.

* * *

**About Gideon Mathson**

## Peace and Love

Original: https://www.spontaneousorder.in/p/peace-and-love

Author: Spontaneous Order

Published: 2010-10-22T10:39:17.000Z

Topics: china, human-rights, economic-freedom, political-reform

> Peace and love folks! Back to the 1970’s in the United States, people were doing nothing but smoking ganja, and eventually protesting against the Vietnam war. The sweet flavor of freedom of expression… Meanwhile in China, Mao Zedong well alive, the Ch

**Summary:**

The post juxtaposes 1970s American freedom of expression and anti-war protests with Mao's Cultural Revolution (1966-1976), which killed millions and purged intellectuals, setting a pattern of CCP repression against dissenters. Liu Xiaobo's 2010 Nobel Peace Prize, awarded for his human rights advocacy, is rejected by Chinese state media like Global Times ('a disgrace') and People's Daily (demanding an apology), portraying him as a criminal inciting subversion. Along with 350 intellectuals, Liu signed Charter 08 in 2008, demanding classical-liberal reforms such as separation of powers, property rights protection, and freedom of expression—principles extolled by the author. Chinese nationalists ignore exiled Nobel literature winner Gao Xingjian due to his subversive work. While acknowledging China's economic rise to second-largest GDP since reforms, the author invokes Milton Friedman's 'Capitalism and Freedom' to argue that economic and political freedoms are intertwined, with state monopolies in key sectors sustaining political power. Rather than NGOs' human rights critiques, the international community should prioritize liberalizing China's economy, especially banking, to empower citizens and erode regime control, fostering eventual political liberty.

**Key points:**

- Charter 08, signed by Liu Xiaobo and 350 Chinese intellectuals, demands classical-liberal reforms including separation of powers, property rights, and freedom of expression.
- Chinese state media and officials denounce Liu Xiaobo's Nobel Peace Prize as interference and encouragement of crime, prioritizing regime stability.
- Economic freedom undermines political power, as per Milton Friedman; China's state monopolies in key sectors sustain CCP control.
- International efforts should focus on opening China's economy, particularly banking, to promote political change rather than solely human rights criticism.

**By Lucas Leger**

* * *

Peace and love folks! Back to the 1970’s in the United States, people were doing nothing but smoking ganja, and eventually protesting against the Vietnam war. The sweet flavor of freedom of expression… Meanwhile in China, Mao Zedong well alive, the Chinese society was undergoing major changes through the Cultural Revolution (1966-1976), causing death to millions of people. Prominent intellectuals were purged, ideas aligned to Maoism by using propaganda in order to put socialism back on track. Since then, intellectuals who do not support the Party’s dogma have been tracked, banished, put in jail or killed. For believers in freedom of expression and other civil rights, the newly chosen Nobel Peace Prize, Liu Xiaobo, earlier this month in Oslo would finally trigger a “great leap forward” towards more political liberty in China. Is it?

M. was telling me yesterday a very striking anecdote. In a discussion with some of her Chinese friends, the latter asked her if she knew any Chinese writer. Knowledgeable in literature, she said she enjoys reading Gao Xingjian. You know, the Nobel Prize winner in literature in 2000, the only Chinese dude who ever won it, now in exile in France. But her friends did not know him. Odd! Usually Chinese are so proud of their fellow men, especially when they win any kind of prizes. Remember the 2008 Olympics where China reveled in being the greatest nation in sports. What’s wrong with Gao Xingjian then? Well, his art has often been considered as subversive by the state and he was obliged to leave China in 1987 to avoid retaliation and clampdown. Then the government would use the media to tweak the public opinion. Same happened to Liu Xiaobo, suspected of “inciting subversion of the state power” in late 2009 and since imprisoned.

Liu Xiaobo, along with 350 Chinese intellectuals and human rights activists signed the Charter 08 in December 2008. This manifesto urges the Chinese government for changes and improvement in terms of human rights in PRC. Most of the 19 “demands” included in the document have been defended by classical liberals throughout the two last centuries (e.g. separation of powers, protection of property rights, freedom of expression). We can only extol this initiative. But being an opponent to the regime in China is like standing against the ideal of an “harmonious society” the government has promoted during the last decade. A quick look to the headlines in the main English speaking Chinese newspapers will suffice to prove that Liu Xiaobo is not seen as a hero, defender of human rights. In [Global Times](http://opinion.globaltimes.cn/editorial/2010-10/580091.html), October 9th: “2010 Nobel Prize a disgrace”. On October 18th, [People’s Daily](http://english.people.com.cn/90001/90780/91342/7168671.html) reported that: “The Nobel committee owes China an apology”, complaining that Liu did not deserve the Prize. Politicians are also upset by the award. The Foreign Ministry spokesman, Ma Zhaoxu said “Liu is a convicted criminal. Awarding the Nobel Prize to him is equivalent to encouraging crime.” Such stance is understandable from a political perspective. Indeed, it would otherwise put the stability of the regime at great risk. Therefore, raising awareness on the importance of defending basic rights among an indoctrinated population is a hard and convoluted job. In the meantime, the government always strikes back with the nationalistic rationale. In this regard, change is not for tomorrow.

Chinese also argued the Nobel committee should not interfere in China’s internal affairs. It seems quite bold to me. [Back in September](http://www.asianews.it/news-en/Beijing-putting-pressures-on-Oslo-to-prevent-awarding-Peace-Prize-to-Liu-Xiaobo-19571.html) this year, China put pressure on Oslo to prevent Liu to be given the Prize. I’m not sure what kind of political gambit that is to complain about pressures but using the same mean in the first place. Sure, in the last three decades, the country has advanced social change and achieved high economic growth (the country is now ranking second in terms of GDP), a fairytale of rags to riches. Reforms have certainly helped in doing so. Nonetheless, we should recall Milton Friedman’s ‘*Capitalism and Freedom’* here. Admittedly, political and economic freedom are entangled with each other. But more economic freedom would lower down the political power. In terms of economic freedom, China has still a long way to go. Since the government monopolizes the key sectors of the economy, it partly explains why the political power is still so strong. And power is difficult to give up…

Instead of continuously pointing out inherent issues with human rights in China (that job is greatly done by NGOs), the international community should help China in further opening up its economy (especially its banking sector). The freer it will become, the more chances Chinese citizens will have for political changes.

NB: Great thanks to M. for her wise help on this post.

* * *

**About Lucas Leger**

## If Liberty is a crime, then arrest me!

Original: https://www.spontaneousorder.in/p/if-liberty-is-a-crime-then-arrest-me

Author: Spontaneous Order

Published: 2010-10-20T12:34:15.000Z

Topics: civil-liberties, state-overreach, privacy-rights, anti-terrorism

> I love the concept of having a police force provided by the taxpayer. It’s supposed to protect our basic rights and liberties when those are threatened by others. Once again, the state would step in and protect us ‘through the thick and thin’, treme

**Summary:**

Lucas Leger critiques France's 'plan vigipirate' anti-terrorist scheme, permanently active since January 2007 and strengthened in August, which empowers police to conduct random ID checks and body searches in strategic public areas like Paris metro stations, overriding privacy rights under the guise of public security. He recounts a personal incident where he and a friend were stopped and searched, highlighting the irony of state protection enabling the very infringements it should prevent. From a classical-liberal viewpoint, this self-contradiction undermines government legitimacy, as it breaches Herbert Spencer's 'law of equal freedom' outlined in 'Social Statics,' where even minor rights violations are impermissible, justifying the right to ignore the state. Leger urges smarter resistance—refusing compliance despite potential short-term detention—over fearful submission, arguing that terrorism fears do not justify tyranny. He concludes that true liberty demands rejecting any trade-off of freedoms for security, declaring: 'If liberty is a crime, then arrest me!'

**Key points:**

- France's plan vigipirate since 2007 authorizes random police ID checks and searches in public areas like metro stations.
- State security measures contradict their purpose by infringing the civil liberties they claim to protect.
- Herbert Spencer's 'law of equal freedom' deems all state rights violations immoral, legitimizing individual resistance.
- Citizens should refuse compliance with invasive checks to defend liberty against fear-driven tyranny.

**By Lucas Leger**

* * *

I love the concept of having a police force provided by the taxpayer. It’s supposed to protect our basic rights and liberties when those are threatened by others. Once again, the state would step in and protect us ‘through the thick and thin’, tremendous commitment, isn’t it? All this may be fine… But what if there is a possibility that your privacy may be overridden by the very people who guarantee you protection against such infringement?  That’s the pot calling the kettle black you may say, especially in western democracies!

Under the current French anti-terrorist alert scheme (‘plan vigipirate’), any breach of the right of privacy becomes possible. The plan is permanently in force since January 2007 and security measures have been strengthened from August this year onwards. In the aim to reinforce ‘public security’, the District Attorney of Paris has allowed the police to proceed to identity checks and body searches in strategic public areas (e.g. main metro stations). It simply means that whenever you’re asked, policemen are entitled to search on any random people if they feel the need. The fear of terrorist attacks has brought about a threat on our civil liberties.

Let me illustrate this by the following sob story: my friend and I were walking down one of the biggest metro stations in Paris, transferring from a train to another, when three policemen randomly stopped us, asked for our ID cards and searched us. Our first reaction was obviously to get stroppy at them and to wonder loudly where does this come from -they would then show you a piece of paper stating in which circumstances they are entitled to do so. With hindsight, this was probably wrong as they got nervous, especially when I joked I was carrying a knife. Jest aside, I sure did not know that walking down in a station was an outlawry behavior. We nonetheless stupidly abide by the law.

The story shows how self-contradictory protection provided by a government is. On the one hand, the government has the duty to ensured its citizens from not being harmed by others (being citizens or not). On the other hand, it imposes an obligation on its citizens that, in some circumstances (in our case, it lasts since January 2007, remember), it would allow the state to breach the law which is protecting us from such abuses. This defeats the purpose of being protected by it. How can then the government be legitimate? Whether the threat of terrorist attacks being substantial or not, I am in my very own right to not showing my ID and to refuse of being searched. Fear should not be a justification for tyranny.

Back in the 19th century, Herbert Spencer argued that governments are essentially immoral, for endogenously breaching the basic principle of ‘equal freedom’. Governments existence is only based upon the fact that it maintains power by subjugating evil by the use of violence, which is wielded to fight against criminality. In our case above, the law of ‘equal freedom’ has been breached by the state. And as Spencer wrote in *‘Social Statics’*: “But if great violations of it (law of ‘equal freedom’) are wrong, so also are smaller ones. (…). So that, however insignificant the minority, and however trifling the proposed trespass against their rights, no such trespass is permissible.” In the same chapter, Spencer legitimized  and pleaded for the right of individuals “to ignore the state”. I would suggest here to have a smarter reaction that I had, and refuse to comply with the law. Worse case scenario, you’d go to the police station for couple of hours. At least, you’d get to know what you pay for…

But more importantly, the question is, how much freedom would you give up to feel secure, protected? Would you allow the state to trespass your privacy any time it sees fit? I made my choice and I’m not ready to accept such measures. To paraphrase Ryan Stiles, *The Drew Carey Show*, ‘If the love of liberty is a crime, arrest me’!

* * *

**About Lucas Leger**

## Book Review: The case for privatization of water supply

Original: https://www.spontaneousorder.in/p/book-review-the-case-for-privatization-of-water-supply

Author: Spontaneous Order

Published: 2010-08-23T11:18:53.000Z

Topics: water-privatization, natural-monopoly, developing-countries, market-solutions

> That’s it, I did it and I want to tell the world about it. It’s been a long but entertaining journey of a bit more than 100 pages, and I finally went through. Deep down in the dark water of privatization but notwithstanding appealing intellectual idea

**Summary:**

Lucas Leger's review of Fredrik Segerfeldt's 2005 Cato Institute book 'Water for Sale' argues from a classical-liberal standpoint that privatizing water distribution and establishing defined property rights offers a practical solution to the global water crisis, particularly in developing countries. Drawing on empirical examples, the book shows that market forces reduce waste, spillage, and misallocation compared to public systems. It challenges the intuition that privatization raises prices unaffordably, noting that subsidies have left one-sixth of the world's population without safe water, causing deaths among the poorest while benefiting the rich connected to mains. Subsidies ignore water's economic value—like food—and force the poor into costly illegal channels, undermining justice. Leger appreciates the empirical approach comparing successes and failures of privatization. However, he raises a concern: as water supply is a natural monopoly requiring public intervention via non-exclusive concessions, corruption in countries with weak rule of law could undermine benefits.

**Key points:**

- Privatization of water distribution with property rights reduces waste and improves allocation in developing countries, per empirical cases.
- Subsidies exclude one-sixth of the global population from safe water, killing the poorest while subsidizing the rich.
- Markets recognize water's economic value, avoiding misallocation and illegal fetching costs for the poor.
- Water is a natural monopoly needing regulated non-exclusive concessions to prevent abuse.

**By Lucas Leger**

* * *

That’s it, I did it and I want to tell the world about it. It’s been a long but entertaining journey of a bit more than 100 pages, and I finally went through. Deep down in the dark water of privatization but notwithstanding appealing intellectual ideas. So, if I could do it, so can you!

I believe you wonder what this great book that caught my attention for weeks is about. The book is titled, “[Water for Sale: How business and the market can resolve the world’s water crisis](http://www.amazon.com/Water-Sale-Business-Market-Resolve/dp/1930865767)” published in 2005 by the [Cato Institute](http://www.cato.org/). As is evident from the title, it deals with water and more specifically about water supply in developing countries. In this book, the author Fredrik Selgerfeldt offers a practical and workable solution to bring safe water to the poor: privatization of the distribution and defined property rights on the resource. It’s been a long time that I was looking for such a book, tackling political problems such as water supply mostly from an empirical point of view, comparing where privatization has worked, where it hasn’t and why. Through many examples, the author demonstrates that there is less waste, spillage and misallocation of this resource when market forces are at play. Obviously, the main counter argument to privatization regards prices. Intuitively, water prices would be much higher in a market oriented system. If this is a correct assumption, at what cost, Selgerfeldt asks?  Subsidizing water prices has left out about one sixth of the worldwide population without safe water, causing death to the poorest. One shall recall that water has an economic value before having a social value, such as food. Ignoring this fact would have the following consequence: the public authority would subsidize the price of water for the richest part of the population, since the poorest does not have access to water mains at all. Besides, there is often an opportunity cost for the poor; those who don’t have access to safe water have to fetch it one way or another, in most cases through ‘illegal’ channels, where people get ripped off. Is that the idea of justice you think of?

I am however concerned by one fact. Selgerfeldt maintains that water supply is a natural monopoly, that is why there is a need for public intervention and that concessions should not be granted with exclusive rights. Fair enough, but what would happen in the case of corruption, especially in countries where the rule of law is overridden?

* * *

**About Lucas Leger**

## The Great Question of ‘What If’

Original: https://www.spontaneousorder.in/p/the-great-question-of-what-if

Author: Spontaneous Order

Published: 2010-08-20T14:17:56.000Z

Topics: economic-growth, financial-liberalization, market-freedom, 2008-crisis

> Some of the most important questions that economic scientists should answer are the questions starting with “What If”. Should we be content with the GDP growth rate (keeping the questionable effectiveness of GDP growth rate as a measure of economic gr

**Summary:**

Kumar Anand challenges contentment with India's 8-9% GDP growth amid global recovery from the 2008 crisis, positing that freer markets—minimizing government inefficiencies, curbing man-made double-digit inflation, and removing price controls including interest rates—could yield 20%+ growth. He critiques economists like Prabhat Patnaik, who credit India's immunity to the 2008 crisis on unopened financial markets (with only 7% foreign assets avoiding toxic securities), arguing this ignores the immense opportunity cost: forgone growth, capital, and innovation over 60+ years due to repression. Anand contends the US crisis stemmed not from openness but from regulations and populist policies like the Community Reinvestment Act, Fannie Mae, and Freddie Mac. Logically extending Patnaik's view implies a closed, primitive barter economy avoids crises but sacrifices aircraft, cutting-edge technology, and life-saving medicine. From a classical-liberal lens, embracing market freedom promises superior development over insulated stagnation.

**Key points:**

- India's 8-9% GDP growth pales against potential 20%+ if government inefficiencies, inflation, and price controls were eliminated.
- Closed financial markets shielded India from the 2008 crisis but incurred huge opportunity costs in forgone growth and innovation over 60 years.
- The US financial crisis resulted from regulatory populism, not market openness.
- Freer markets enable access to advanced technologies, aircraft, and medical innovations essential for progress.

**By Kumar Anand**

* * *

Some of the most important questions that economic scientists should answer are the questions starting with “What If”. Should we be content with the GDP growth rate (keeping the questionable effectiveness of GDP growth rate as a measure of economic growth and rising standard of living aside) of 8%-9%, especially when most of the world economies are still recovering from the economic crisis that began in 2008? What if the government (institutional) inefficiencies and the waste of resources were minimized? What if the man-made inflation (yes, the current double-digit inflation is not the handicraft of Rain God, or any other God for that matter) were within the so called ‘acceptable’ limits? What if the prices of almost all items including money (interest rates) were not controlled or regulated? To put it simply, what if the markets were freer?

Shouldn’t we be celebrating a much higher rate of growth (say 20% or more) if these restrictions and obstacles were removed?

A number of commentators and academicians in the mainstream media have hailed and attributed India’s relative immunity to the Global Financial Crisis in 2008 to its unopened financial markets. [Prabhat Patnaik](http://en.wikipedia.org/wiki/Prabhat_Patnaik), one of the prominent economists of India, who was also appointed to a four-member team of the UN to recommend reforms to the global financial system after the crisis hit, commented the following in a [recent interview](http://www.outlookindia.com/article.aspx?264563),

“*India has been immune to East Asia-type financial crises, and has escaped the current crisis precisely because its financial sector has not been opened up. (Its banking sector, having only 7 per cent foreign assets, was not troubled by “toxic securities”.) But this immunity will go if it ‘opens up’.”*

I am not disputing his claim. It is of course true that India suffered little because its financial markets were not open. However, if you think a little deeper, you will clearly see that the opportunity cost of not opening the financial markets has been huge. What we have lost in terms of forgone growth and development in the last more than 60 years due to inadequate capital and innovations is almost impossible to calculate. There is a difference between a repressed financial system (with heavy and absurd regulations) and an open financial system. The crisis in USA was caused not because it was open, but because it was regulated on the back of populist policies (hair-brained ideas like Community Reinvestment Act, and acts of government enterprises like Fannie Mae and Freddie Mac, etc.) of awarding free lunch (or at least a subsidized lunch, but we can leave the details of cause and effect for another post).

His argument makes little sense if you take it to its logical conclusion. That ways, the economy will be completely insulated from outside influence and disturbances had it been a closed economy, and maybe a primitive one with barter exchange. Then we can relish with the knowledge that our economy can never plunge into a crisis. Of course then there will be problems of micro management (arising from the issues of indivisibility and the double coincidence of wants), but at least you won’t have recurring cycles of boom and bust, i.e., freedom from macroeconomic crisis. We are just tired of that, right?

And what’s the use of opening the economy anyway (Swadeshi Apnao!!!)? Who needs aircrafts to travel long distances in short time (aircrafts are not made in India)? Who needs cutting edge technology to do the huge complex problems? Who needs the latest inventions in medicine to save lives? And all that follows.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## CWG: India going the Greece’s way…?

Original: https://www.spontaneousorder.in/p/cwg-india-going-the-greeces-way

Author: Spontaneous Order

Published: 2010-08-18T10:56:17.000Z

Topics: government-waste, fiscal-irresponsibility, public-choice, mega-events

> I am not suggesting here that India will soon be in a situation where Greece is today. However, events in the recent past are not very inspiring for the long run sustainable economic growth. The question to be answered by economists is whether the expen..

**Summary:**

Kumar Anand warns that India's extravagant spending on the 2010 Commonwealth Games (CWG) exemplifies government wastefulness, lacking any cost-benefit analysis due to the state's monopoly position and use of taxpayer funds for 'national prestige' rather than profit motives. He draws parallels to Greece's 2004 Athens Olympics, where $11 billion in spending symbolized fiscal irresponsibility; post-games, wasteful habits amid good times led to crisis exposure, with 21 of 22 venues now abandoned at $800 million annual maintenance cost. India's CWG bid estimated Rs 1,899 crore in 2003, but costs ballooned to official Rs 10,000 crore or independent Rs 30,000 crore, making it the most expensive ever, amid corruption headlines. Governments face no market discipline for mistakes, prioritizing political costs over fiscal responsibility, resorting to debt monetization and inflation. Anand argues such 'harebrained' expenditures hinder India's economic potential, risking a Greek-style doom, quoting Mises that games contribute nothing to human improvement beyond entertainment.

**Key points:**

- Government organizers of CWG lack incentives for cost-benefit analysis, enabling waste of taxpayer money on national prestige.
- CWG costs escalated from Rs 1,899 crore bid estimate to Rs 10,000-30,000 crore, amid corruption scandals.
- Greece's Athens Olympics symbolized frivolous spending, with $11 billion outlay and $800 million annual maintenance for mostly abandoned venues contributing to fiscal crisis.
- Continued wasteful government spending leads to inflation via debt monetization, threatening long-term economic growth.
- Frivolous mega-events like CWG offer no real economic benefit, per Mises.

**By Kumar Anand**

* * *

I am not suggesting here that India will soon be in a situation where Greece is today. However, events in the recent past are not very inspiring for the long run sustainable economic growth.

The question to be answered by economists is whether the expenditure on the Commonwealth Games is the best alternative use of these resources in terms of opportunity costs. The government (in this case the Indian Olympic Association) being the monopoly bidder and organizer for such an event, does not have any mechanism or incentive to do such a cost-benefit analysis, especially when the taxpayers money is involved.

The state is also like a business establishment, but it operates through principles of coercion and not profit and loss, as any other business establishment would do. In the context of Commonwealth Games, [Suresh Kalmadi](http://en.wikipedia.org/wiki/Suresh_Kalmadi) and Co. are in the business of organizing a sports event, not for the sake of entertainment value or the revenues it will generate, but for the sole purpose of ‘our national prestige’ (and you better not argue with that), and most fittingly [using our money](http://indiatoday.intoday.in/site/Story/89470/Mail%20Today%20Stories/Sheila+makes+Delhiites+pay+for+Games.html). It is the one business model where the need of the customer comes last.

Markets are cruel, to say the least. They seldom give another opportunity to honest people who make mistakes in their investment decisions. Whereas the government activities through interventions, gives the chance to the people involved to make mistakes and get away with it, again and again. The [12 day fiesta](http://en.wikipedia.org/wiki/Commonwealth_Games_2010) starting 3rd October 2010 is one such great opportunity for the organizers involved with hosting the event to loot the taxpayer’s money. The [daily headlines](http://economictimes.indiatimes.com/news/news-by-industry/et-cetera/CVC-finds-irregularities-in-several-CWG-projects/articleshow/6229429.cms) in the newspaper are suggestive of such a [tendency](http://www.ndtv.com/article/india/corruption-scandal-hits-2010-games-organisers-deny-charges-40991).

A number of international publications in the past few months had featured stories on the connection between the hosting of the ‘Athens Olympics 2004’ and the current Greece Economic Crisis, which could be found [here](http://www.huffingtonpost.com/2010/06/03/greek-financial-crisis-olympics_n_598829.html), [here](http://www.futureofcapitalism.com/2010/02/greek-fiscal-crisis-and-the-olympics) and [here](http://www.bbc.co.uk/newsbeat/10100201).

There is no obvious direct link between the Greece’s economic crisis and the hosting of 2004 Athens Olympics games. The contribution of Athens Olympics in the Greece’s economic crisis is more symbolic than anything else. It is a symbol of the frivolous and irresponsible spending on the part of the Greece government. Although the total expenditure involved in hosting the Athens Olympics was about 11 billion dollars, which is a small fraction of the total deficit facing the economy, such wasteful expenditures continued after the games when the going was good. But after the world economic crisis, Greece suffered when its wasteful expenses were revealed and the banks started to see it as a country that could not manage its finances. To cover the risk, they started raising the interest rates and the problem burgeoned.

The new airport, the new metro and other swanky infrastructure laid out just for the Athens Olympics are of little use now that the country is dragging down the world’s economy while struggling to cut its deficits and barely surviving a near bankruptcy situation. The annual cost to maintain the site has been estimated to be about [800 million dollars](http://en.wikipedia.org/wiki/2004_Summer_Olympics) as of July 2008. As reported in the [Daily Mail](http://www.dailymail.co.uk/news/worldnews/article-1036373/Abandoned-derelict-covered-graffiti-rubbish-What-left-Athens-9billion-Olympic-glory.html), *“A staggering 21 out of 22 venues lie abandoned since an event lasting just three weeks was held, and the magnificent stadiums are now over-run with rubbish and weeds.”* It’s an example and reminder for the Indian government to not indulge in such imprudent expenses any more than they already have.   
In a report prepared by the India chapter of Housing and Land Rights Network and released by the former Delhi High Court Chief Justice A P Shah, India’s bid document for the Commonwealth Games in 2003 [estimated the cost of hosting](http://timesofindia.indiatimes.com/india/Commonwealth-Games-cost-up-1575-since-bid-NGO-audit/articleshow/5928237.cms) the event at Rs 1899 crore (10 million rupees= 1 crore). After multiple revisions the estimate now range from an official figure of about Rs 10,000 crore to independent sources at around Rs 30,000 crore. With these figures, the 2010 games are set to become the [most expensive](http://en.wikipedia.org/wiki/Commonwealth_Games_2010#Costs) Commonwealth Games ever.

The political cost for cutting government expenditure is simply too high for it to be a consideration. And in a democracy, meeting the revenue-expenditure gap through higher taxes has dangerous implications for the incumbent. Under such circumstances, fiscal responsibility goes out of the window. Therefore the only remaining solution to such a conundrum is the printing press (monetization of the debt) which inevitably causes “inflation”. This solution is always popular since the effects are disguised, dispersed and diffused (stretched) over the long run.

Is this all worth it…? And under this background, if such unnecessary and harebrained expenses are continued, we are sure to never realize our potential as an economy and maybe follow the Greece’s path to doom, if not tomorrow then definitely sometime in future.

Moreover, *“No game can, apart from the pleasure it gives to the players and to the spectators, contribute anything to the improvement of human conditions.”* – Ludwig von Mises in ‘The Ultimate Foundation of Economic Science’

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## The word ‘Freedom’ does not exist in China

Original: https://www.spontaneousorder.in/p/the-word-freedom-does-not-exist-in-china

Author: Spontaneous Order

Published: 2010-08-12T13:06:32.000Z

Topics: internet-censorship, china, free-speech, government-control

> If I say, China is not the freest country on earth, you wouldn’t be flabbergasted. If I say, China infringes human rights on a daily basis, you wouldn’t be either. However, I’m always appalled by the schizophrenic Chinese government behavior in term

**Summary:**

Lucas Leger criticizes the Chinese government's schizophrenic approach to internet freedom, allowing rampant illegal downloading and streaming of movies and music while severely restricting access to the global web. Major platforms like Facebook, YouTube, Twitter, and most Google images are blocked without a VPN, exemplifying overridden navigation rights. The proposed Green Dam Youth Escort software, intended to block pornography and 'immoral' sites to protect youth, was largely abandoned amid fears it would enable broader surveillance. Instead, the regime employs subtler controls: searching sensitive terms like 'Tibet', 'Falun Gong', or especially 'freedom' triggers browser errors and temporarily disables internet connections. Leger frames this as hypocritical overreach, masquerading protection from 'evil demeanors' as justification for suppressing dissent and individual liberty, underscoring a classical-liberal alarm at state paternalism stifling free expression and information flow.

**Key points:**

- China permits free illegal downloads and streaming of copyrighted media on domestic sites.
- Access to Facebook, YouTube, Twitter, and Google images requires a VPN due to government blocks.
- The Green Dam software project to censor 'immoral' websites on personal computers was mostly abandoned.
- Searching 'freedom', 'Tibet', or 'Falun Gong' causes temporary internet disruptions via error messages.
- Censorship is officially justified as protecting society, particularly youth, from immorality.

**By Lucas Leger**

* * *

If I say, China is not the freest country on earth, you wouldn’t be flabbergasted. If I say, China infringes human rights on a daily basis, you wouldn’t be either. However, I’m always appalled by the schizophrenic Chinese government behavior in terms of Internet freedom.  On the one hand, you have at your disposal a large variety of websites proposing free download or streaming services. On these sites you are allowed to watch movies and download music, which obviously, most of them have been illegally uploaded. Luckily for the Chinese citizens that their country has not been part of the [Anti-Counterfeiting Trade Agreement](http://trade.ec.europa.eu/doclib/docs/2010/april/tradoc_146029.pdf) negotiations!

On the other hand, rights to navigate freely on the World Wide Web have been largely overridden. No need to mention that in China you don’t have access (unless you use a VPN) to Facebook, Youtube, Twitter, as well as most of the Google images (only God knows why…). One of the last inventions of the Chinese government was the so-called [Green Dam](http://en.wikipedia.org/wiki/Green_Dam_Youth_Escort) project. To simplify, software would be installed on your computer to prevent you from surfing on forbidden websites (such as porn). Since pornography in Chinese society is very badly perceived, the government has been at war with such websites. The main idea behind (at least the official one) is to protect the youth from having ‘immoral’ behaviors. This project could have been served as a pretext to further control your navigation on the web. Fortunately, it has been more or less abandoned.

But it does not mean that the Chinese government does not check on you while you are naively surfing on the Internet. I recently discovered a new funny game, which could be called: ‘find-the-word-that-would-screw-up-your-Internet-connection-for-a-while’. One hint: it starts with an ‘f’ and ends with ‘reedom’. The principle is rather simple, google several words that might be considered as ‘sensitive’, by the government. So, back to the game: ‘Tibet’ works, ‘Falun Gong’ as well and you have some results. It’s just that the links often don’t. Interestingly enough, if you google the word ‘freedom’, your browser will display an error message and your Internet connection will be disabled for a while.

All of this is based on the lousy argument that the government protects you against your evil demeanors. Watch out ‘freedom’ then, it’s a dangerous animal!

* * *

**About Lucas Leger**

## Spontaneous Order of the Market

Original: https://www.spontaneousorder.in/p/spontaneous-order-of-the-market

Author: Spontaneous Order

Published: 2010-08-09T14:30:49.000Z

Topics: spontaneous-order, free-markets, dispersed-knowledge, hayek

> According to a 1990 paper by Murray N. Rothbard, published in the Journal of Libertarian Studies, the great Taoist Chuang Tzu (369 B.C- 286 B.C) was the first person to work out the idea of ‘Spontaneous Order’. Chuang Tzu said, “Good order results s

**Summary:**

Murray N. Rothbard credits Taoist philosopher Chuang Tzu (369-286 B.C.) as the first to articulate 'spontaneous order,' stating 'Good order results spontaneously when things are let alone,' a concept later developed by Proudhon and Hayek. Frederic Bastiat illustrates this in Economic Harmonies through the phenomenon of Paris being fed daily via coordinated self-interested actions of countless individuals, not central goodwill or design. Hayek terms it the 'extended order' of human cooperation, essential to civilization and known as capitalism, arguing in The Fatal Conceit that its preservation depends on this order. In his 1945 paper 'The Use of Knowledge in Society,' Hayek explains that economic knowledge exists only as dispersed, incomplete bits held by individuals, impossible for any single mind to integrate; prices in free markets aggregate this 'knowledge of particular time and place' exploited by entrepreneurs to meet consumer needs via profits. Freedom is prerequisite for this spontaneous market order, which emerges from human action without preconceived design, driving civilization's growth.

**Key points:**

- Chuang Tzu originated the idea of spontaneous order as resulting from letting things alone.
- Bastiat demonstrates spontaneous order through the self-interested coordination feeding Paris daily.
- Hayek's 'extended order' of capitalism relies on dispersed knowledge coordinated by unregulated prices.
- No central planner can utilize the fragmented knowledge individuals possess about specific circumstances.
- Freedom enables entrepreneurs to exploit unique information for consumer satisfaction and profits.

**By Kumar Anand**

* * *

According to a [1990 paper](http://mises.org/journals/jls/9_2/9_2_3.pdf) by Murray N. Rothbard, published in the Journal of Libertarian Studies, the great Taoist Chuang Tzu (369 B.C- 286 B.C) was the first person to work out the idea of ‘Spontaneous Order’. Chuang Tzu said, “Good order results spontaneously when things are let alone.” The term was later used and developed by [Pierre-Joseph Proudhon](http://en.wikipedia.org/wiki/Pierre-Joseph_Proudhon) in the nineteenth century and [Friedrich Hayek](http://en.wikipedia.org/wiki/Friedrich_von_Hayek) in the twentieth century.

The concept of ‘spontaneous order’ is very well illustrated by [Frederic Bastiat](http://en.wikipedia.org/wiki/Fr%C3%A9d%C3%A9ric_Bastiat) in his book Economic Harmonies where he examines and explains an otherwise ordinary phenomenon, ‘How Paris gets fed?’ Here Bastiat recognizes and explains the economic regularity that daily permits Paris to be fed. The marvel of this simple looking phenomenon is the coordinated activities of countless individuals who are looking for their own interests that cause food to reach to the tables of millions of residents of Paris. It was not the good will of the people of France and the world, that kept Parisians fed.

Similar peaceful activity causes people to enjoy a wide array of goods and services which can never be produced by a single mind, no matter how smart he is. And this almost automatic execution of tasks through the magic wand of free market can be called ‘spontaneous order of the market’.

Another term similar to spontaneous order is ‘extended order’ that was developed by Friedrich Hayek and is central to his thesis in the book, ‘[The Fatal Conceit](http://en.wikipedia.org/wiki/The_Fatal_Conceit).’ Here Hayek argues that, “our civilization depends, not only for its origin but also for its preservation, on what can be precisely described only as the extended order of human cooperation, an order more commonly, if somewhat misleading, known as Capitalism.”

The impossibility of construction of a rational economic order is best described by Hayek in his [famous paper](http://www.econlib.org/library/Essays/hykKnw1.html) of 1945, ‘The Use of Knowledge in Society’. To quote Hayek, *“the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess.”* In other words, *“It is a problem of the utilization of knowledge which is not given to anyone in its totality.”* The economic order in a free market capitalist system is not the result of human design, but of human action. In the same paper, Hayek also said that every individual has some advantage over all others because he possesses unique information of which beneficial use might be made, but of which use can be made only if the decisions depending on it are left to him or are made with his active cooperation. This is the knowledge of the particular circumstances of time and place which is used and exploited by entrepreneurs based on their expertise to satisfy the needs of consumers, and in turn satisfy their own through profits made.

This dispersed knowledge is reflected through “unregulated price” in a market economy through the aggregation of information reached by the free use of individual knowledge. And ‘freedom’ is a prerequisite for the spontaneous order to take place. Thus we see that the market order can never be reached by any preconceived design or calculation. Indeed, the human civilization and its growth has been a history of this spontaneous order.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## The case of Infant Industry

Original: https://www.spontaneousorder.in/p/the-case-of-infant-industry

Author: Spontaneous Order

Published: 2010-08-06T13:49:09.000Z

Topics: infant-industry, protectionism, free-markets, entrepreneurship

> The infant industry argument is often used to portray a seeming market failure. Since Colbert in France and later in England with Hamilton in the 1780-90’s, taxpayers have been taught that, in the interest of the whole country, the government should pro

**Summary:**

The infant industry argument, popularized by Colbert, Hamilton, and others, claims governments should subsidize nascent industries unable to compete due to higher costs and smaller scale, protecting jobs and ensuring fair competition until they mature. Lucas Leger critiques this as a mercantilist fallacy, arguing historical 'successes' like Japan's auto industry—where Toyota received subsidies in the 1930s but became a leader partly due to 1970s gas prices and 1990s innovations—do not prove protectionism's efficacy. Porter and Takeuchi's studies show successful Japanese industries had minimal government intervention, while failures featured heavy cartels and subsidies. Subsidies mooch taxpayers, misallocate resources, and override consumer interests in cheaper, better goods, per Bastiat's 'what is not seen.' Competition is a 'discovery procedure' (Kirzner) starting from unequal endowments, thriving on equal market access, not protections; entrepreneurs' alertness uncovers niches. Free markets spawn thousands of firms daily, funding viable ones via profit-based loans, not bureaucratic discretion. Analogy: no subsidies for inexperienced graduates entering the job market. Leger concludes laymen should avoid ignorant protectionist advocacy, quoting Rothbard on economic ignorance.

**Key points:**

- Infant industry protections fail to create lasting success, as evidenced by minimal government role in Japan's thriving sectors per Porter and Takeuchi.
- Subsidies extract from taxpayers to prop up inefficient firms, harming consumers and misallocating resources.
- Competition functions as an entrepreneurial discovery process requiring equal market access, not equal starting endowments or protections.
- Profit-driven loans outperform discretionary subsidies for nurturing viable new industries.
- Advocate free markets over protectionism to foster prosperity through genuine competition.

**By Lucas Leger**

* * *

The infant industry argument is often used to portray a seeming market failure. Since Colbert in France and later in England with Hamilton in the 1780-90’s, taxpayers have been taught that, in the interest of the whole country, the government should protect its nascent industry for the sake of nationwide employment and international fair competition. Indeed, if there is no room for a new industry to survive in the market, because of lower economies of scale and higher marginal costs compared to its direct competitors, we may end up with ‘unfair competition’, if no competition at all, due to the death of the industry. The role of the government is then to bring this industry into being, until it will be able to compete fairly, by subsidizing it.

First, some historical examples which ‘proves’ that we can benefit from this protectionist measure merely shows that protected industry finally have driven out of the market its previous competitor. This is the case, for instance, of General Motors and Toyota, where the latter enjoyed subsidies, besides no domestic competition, from the Japanese government during the 1930’s and long after. The Japanese car industry is nowadays the worldwide leader while General Motors is struggling to avoid bankruptcy for years now. In addition, the success of Toyota might also be related to the soar of gas prices in the 1970’s and a new business model developed in the 1990’s. Porter and Takeuchi write:

*“Our studies thus conclude that the government model played little if any role in the successful industries, with scarcely any intervention, few cartels, and scant cooperative R&D. Among the failures, the government model prevailed, with numerous cartels, widespread cooperation, and rampant intervention in competition. If anything, the Japanese government model is a cause of failure, not of success.”*

The ‘what is not seen’ part of the story, to paraphrase Bastiat, is that governments mooch the taxpayers to subsidize those less efficient industries for years. Therefore, the interest of the consumer (having cheaper or higher quality goods) is overridden by the discretion of some governmental officials’ decisions. This huge misallocation of resources is often and sadly overlooked because of the mercantilist fallacy of the infant industry argument.

Second, it pertains to the understanding of the concept of competition. It does not start with equal endowment for each player. Would you imagine a race where the runners are all running at the same speed? Competition is instead a ‘discovery procedure’ and entrepreneurs have a great role to play in this process. The entrepreneur is the person who will discover potential niches because of his ‘alertness’, as explains Kirzner superbly. What is thus needed for a well functioning competition is, among other things, an equal access to the market. Protectionism is therefore everything but the right answer to develop prosperity, as long as the latter is channel by having a free market.  Thousands of companies are created every day. Why only few of them would need to be subsidized then? Free markets provide a solution for new industries, i.e. loans. Based on profit maximization rationale, the loan will be granted only to companies which have the greatest chance of success, while subsidies are usually based on government discretion. If this is not the case, at what cost for the individuals?

To draw the parallel, the infant industry would be like a graduated student offering his labour force for the first time. His lack of experience has often been emphasized and a potential employer would not be so keen to hire him if his application is competing with someone who has longer experience. Following this line of reasoning, the government should subsidize these students until they grew up enough. But this is not going to happen sometime soon.

To conclude, ‘laymen’, before arguing in favour of protectionist measures, should recall Murray Rothbard:

*“It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”*

*———————————————-*

*Lucas Leger works at the European Chamber of Commerce in Beijing, where he takes care of the lobby activities of various European industries settled in China, including the Auto, Pharmaceutical and Private Equity sectors. Lucas holds a BA in Applied Economics from France and a LL.M in Law & Economics from the Universities of Rotterdam, Hamburg and* *Haifa. He has been working in China for more than a year and a half.*

* * *

**About Lucas Leger**

## Climategate and the case of Settled Science

Original: https://www.spontaneousorder.in/p/climategate-and-the-case-of-settled-science

Author: Spontaneous Order

Published: 2010-08-04T13:31:20.000Z

Topics: climategate, ipcc-errors, climate-skepticism, economic-development

> The science of weather forecasting is very complex and any prediction of the weather can only be made with a certain probability. The sheer number of ever-changing variables is cause enough to reduce the field to an inexact science. This science on the ..

**Summary:**

The post challenges the notion of 'settled science' on global warming, highlighting the Climategate scandal where leaked emails from the University of East Anglia's Climate Research Unit (CRU) revealed prominent climatologists exaggerating anthropogenic climate effects through data manipulation and withheld information. Despite three independent reviews largely clearing CRU, subsequent revelations undermined the Intergovernmental Panel on Climate Change (IPCC): its 2007 report falsely claimed Himalayan glaciers would disappear by 2035, the 40% Amazon destruction prediction stemmed from an environmental pressure group's report, and it cited non-scholarly sources like a mountaineering magazine and student paper. From a classical-liberal perspective, these expose mainstream scientists overstating human causes while understating natural variability. The author agrees with Forbes columnist Shikha Dalmia that the global warming movement is dormant but warns it will resurface, pushing carbon rationing and trading schemes that entrench international bureaucracy. Such policies threaten developing countries' prosperity, achieved through capital accumulation and industrial growth, urging vigilance against special interest agendas disguised as planetary salvation.

**Key points:**

- Climategate emails from CRU showed climatologists manipulating data to exaggerate human-induced climate change.
- IPCC's 2007 report erred on Himalayan glaciers vanishing by 2035 and 40% Amazon loss, relying on dubious sources like pressure groups and magazines.
- Climate alarmism justifies bureaucratic measures like carbon trading that hinder industrial development in poor nations.
- Vigilance is needed to protect capital accumulation and growth from special interests exploiting environmental fears.

**By Kumar Anand**

* * *

The science of weather forecasting is very complex and any prediction of the weather can only be made with a certain probability. The sheer number of ever-changing variables is cause enough to reduce the field to an inexact science. This science on the global warming has been considered to be settled by the mainstream until recently, when the Climategate scandal broke out and the follow up news and findings raised the doubt about the once ‘settled science.’

The Climategate scandal began with the internet leak of thousands of emails and other documents from the University of East Anglia based Climate Research Unit (CRU), when someone accessed a server used by the CRU. These emails and documents showed the prominent climatologists to be exaggerating the anthropogenic effects on the climate change by manipulating data and withholding information. The three supposedly independent reviews ordered, have submitted their report and have largely freed CRU of any malpractice. More details on the scandal and the follow-up review committees can be found in one of the recent article of Swaminathan Aiyar for [The Economic Times.](http://economictimes.indiatimes.com/opinion/columnists/swaminathan-s-a-aiyar/Climategate-Beyond-inquiry-panels-/articleshow/6165343.cms)

What followed was a nightmare for the Inter-governmental Panel on Climate Change (IPCC), supposedly the most authoritative organisation in the field of climate research. Their 2007 Working Group Report had claimed that at the current rate the glaciers in Himalayas will disappear by the 2035, which proved to be a hoax. Then came the news that the IPCC claim the global warming would destroy 40% of the Amazon cover, was actually based on a report by an environmental pressure group. The IPCC has also been accused of using sources such as a mountaineering magazine and a student paper for scholarly works.  It only shows that the mainstream scientists have been over-stating the anthropogenic forces and under-stating the natural variability.

Forbes columnist Shikha Sood Dalmia, in one of her [recent columns](http://www.forbes.com/2010/07/28/climate-change-movement-harry-reid-opinions-columnists-shikha-dalmia.html) for the online magazine has argued that the Global Warming Movement is dead. Oh, I wish she were true. There is no doubt that the hysteria about the Climate Change and the urgent need to curb the man-made causes has gone into hibernation for the time being. But the monster will most certainly be back to complete the unfinished mission. The proposed solution to the Climate Change crisis, such as carbon rationing (“trading”) and others, will further perpetuate the already entrenched blood-sucking bureaucracy, only this time the monster would have graduated from national to international level.

The road to prosperity and higher standard of living has already been traveled by much of the western world through capital accumulation and industrial growth. It’s only off late that the developing countries have joined the party, and the results in this short span of time have been overwhelming. The need of the hour is to keep a tight vigil and do not let the private agenda of the special interest groups succeed, all in the name of saving the planet.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Economics of Science

Original: https://www.spontaneousorder.in/p/economics-of-science

Author: Spontaneous Order

Published: 2010-08-03T11:56:17.000Z

Topics: economics-of-science, government-funding, public-choice, hayekian-order

> When an entrepreneur invests his savings or borrowings in a business venture, he is primarily motivated by the profit incentive. Same is true for his making investments in the field of research and development, where he is trying to outsmart his competi..

**Summary:**

Private entrepreneurs invest in research and development driven by profit incentives to outcompete rivals and serve customers better, fueling historical civilizational progress through market spontaneity. In contrast, government investments in science, funded by taxpayers, lack personal stakes for officials, leading to allocations dictated by pressure groups and short-term electoral goals rather than merit, resulting in resource wastage. Economists Thomas J. McQuade and William N. Butos, in their 2003 paper 'Order-Dependent Knowledge and the Economics of Science,' frame science as a Hayekian spontaneous order emerging from self-interested pursuits. Their 2006 paper 'Government and Science: A Dangerous Liaison' argues that government funding creates scientific winners and losers based on political funding access rather than achievement, recommending bypassing political connections. They analogize this distortion to price controls, subsidies, and central planning harming free markets. The Climategate scandal, where climatologists exaggerated anthropogenic global warming for personal agendas, exemplifies these perils, reinforcing the case against public funding of science from a classical-liberal viewpoint favoring emergent market orders over state intervention.

**Key points:**

- Private R&D succeeds due to profit-driven competition, unlike taxpayer-funded government science swayed by politics.
- Government science funding favors those skilled at securing political grants over scientific merit, creating distortions.
- Bypass political connections in science funding to restore merit-based progress, akin to avoiding market interventions like subsidies.
- Climategate illustrates how public funding enables agenda-driven exaggeration in climate science.

**By Kumar Anand**

* * *

When an entrepreneur invests his savings or borrowings in a business venture, he is primarily motivated by the profit incentive. Same is true for his making investments in the field of research and development, where he is trying to outsmart his competitor and thus earn the loyalty of even larger number of customers by providing them with better quality goods and services. Historically, most of the development of the civilization has owed their success to this private endeavor.

However, when a government makes a similar investment funded by the taxpayer’s money, they do not have such incentive. The nature of such an investment becomes impersonal as the success or failure of the venture is not going to affect him in any substantial way, since the resources invested are not his own. Here the public funds are allocated for research and development in the fashion of any other public welfare project, i.e., dictated by the pressure groups and short term electoral objective of the politician in power as opposed to the spontaneity of the market. Such short-sightedness and pursuit of private agenda on the part of public office bearers only causes the wastage of resource.

Economists Thomas J. McQuade and William N. Butos in their 2003 paper on, “Order-Dependent Knowledge and the Economics of Science”, concludes that to them the approach to the economics of science views science as a social order, a Hayekian cosmos, one that has emerged out of the self-interested actions of people attempting to pursue happiness in identifiable ways.

Butos and McQuade argues in their another 2006 paper titled “Government and Science: A Dangerous Liaison” that the government funding of science creates winners and losers in the scientific community, where winning is not necessarily based on scientific achievement, but on the ability to secure and maintain a flow of politically motivated funding. The only solution is for the political connections to be bypassed. They finally conclude that the government funding affects science in a way analogous to the ways price controls, subsidies, credit expansion and central planning affect free markets.

The Climategate scandal where prominent Climatologists were caught exaggerating the anthropogenic effects on the global warming to pursue their private agenda, only reinforces the conclusion reached by Butos and McQuade. More on the “Climate Change” euphoria and the related “Economics of Science” in future posts.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## India vs. China: How far the political system could influence growth?

Original: https://www.spontaneousorder.in/p/india-vs-china-how-far-the-political-system-could-influence-growth

Author: Spontaneous Order

Published: 2010-08-02T12:13:58.000Z

Topics: india-china-comparison, economic-freedom, trade-tariffs, market-liberalization

> Both China and India have grown rapidly in the last decade. However, India seems to perform less well in terms of economic growth and poverty alleviation compared to China. China’s results are striking: 9% annual growth on average and 300 million people

**Summary:**

The author argues that India's slower economic growth and persistent poverty compared to China—9% annual growth and 300 million lifted out of poverty over two decades—are not primarily due to its democratic political system versus China's authoritarianism. Both nations exhibit low economic freedom (India 53.8, China 51.0 per Heritage Foundation), stemming from constitutional commitments to socialism and heavy government control over the economy, which stifles prosperity regardless of political structure. Citing Milton Friedman, the author emphasizes that economic freedom is essential to limit political power and enable uncoerced cooperation. The key differentiator is trade liberalization: China reduced MFN tariffs to 9.6% by 2008 (bound near 10%) under Deng Xiaoping and Zhu Rongji, far earlier and more aggressively than India, which lingered at 19.2% until 2005 before dropping to 13% (bound at 49%). Cheaper imports fueled China's industrial boom, while India's higher barriers hindered it. Thus, from a classical-liberal view, market openings, not centralized decision-making or democracy, drive growth; both countries' planning hampers freedom and development.

**Key points:**

- China's superior growth stems from earlier trade tariff reductions to 9.6% MFN by 2008, enabling affordable imports and industrial expansion, unlike India's 13% MFN and 49% bound rate.
- Both India and China score poorly on economic freedom (53.8 and 51.0) due to socialist planning, making political systems secondary to market controls.
- Economic freedom, per Friedman, offsets political power concentration and is prerequisite for prosperity, regardless of democracy or authoritarianism.
- India's constitutional socialism invites constant government interference, mirroring China's controls and explaining shared underperformance.

**By Lucas Leger**

* * *

Both China and India have grown rapidly in the last decade. However, India seems to perform less well in terms of economic growth and poverty alleviation compared to China. China’s results are striking: 9% annual growth on average and 300 million people lifted out of poverty over the last two decades.  Whereas in India, despite high growth rates, poverty remains an unfortunate but inherent feature when picturing the country’s economic situation. Recently, one of my fellow co-workers had asked me whether I think India’s development might be slower because of its political system, i.e. democracy would slow down the access to greater wealth in a short period of time.

China is anything but a democracy, and, due to its political characteristics, controls in a repressive way substantial part of the economy, especially the [financial sector](http://wallstreetpit.com/37473-the-pboc-cant-easily-raise-interest-rates) that brought about massive imbalances. However, it has achieved better growth rates over the past few years. A centralized decision-making process, albeit discretionary, would presumably ease political action by by-passing all types of necessary approvals from a parliament or congress in a democratic system. Assuming that the political power controls all the economy in China (which is not the case anymore), would its political system help to achieve higher growth and decrease poverty faster than a democratic process/power (such as in India)? Well, if the government is ready to give up on all its power on economic matters, it certainly would. But this is obviously not the case in China. Why China seems to do better than India when both positive and negative trends are simultaneously in play?

First, China’s decision making process is not as fast as it would appear at the first glance. Any new regulations or laws need to be approved by the State Council. In addition, chronic miscommunications and spats are often at play between the different regulatory bodies. So, it seems that the political system, from an economic perspective, has little to do with China’s growth, on the contrary. On the other hand, India is, as stated in the [preamble of its constitution](http://india.gov.in/govt/constitutions_of_india.php), a “Sovereign *socialist* secular democratic Republic.” This means that the Indian economy is planned and that the government would tinker with economic issues anytime they see fit. However, control over economic activities affects [every aspects of life](http://www.amazon.com/Road-Serfdom-Fiftieth-Anniversary/dp/0226320618). As a result, both India and China perform poorly in terms of [economic freedom](http://www.heritage.org/index/Ranking.aspx), as measured by the Heritage Foundation and the Wall Street Journal, 53.8 and 51.0 respectively. As emphasized by Milton Friedman:

“Economic freedom is an essential requisite for political freedom. By enabling people to cooperate with one another without coercion or central direction, it reduces the area over which political power is exercised. In addition, by dispersing power, the free market provides an offset to whatever concentration of political may arise. The combination of economic and political power in the same hands is a sure recipe for tyranny.”

So, despite India seemingly operates in a democratic process, both countries are repressive, by the very fact of their constitution, since the economy is planned and tightly controlled. Would it be possible that China has engaged in some opening of its market and India wouldn’t? This will explain partly the discrepancy in terms of growth.

Ever since Adam Smith, it has been extensively argued that free trade benefits all countries and is not a zero-sum game. One way to look at it is to observe the trade barriers set up by each country, i.e. trade tariff policies. While India has liberalized its industrial sector in the 1990’s, China has also liberalized the latter, especially under Deng Xiaoping and Zhu Rongji eras, while decreasing the tariffs on trade at the same time, unlike India. Looking at the data from the [WTO](http://www.wto.org/english/res_e/booksp_e/tariff_profiles09_e.pdf), China’s applied Most-Favored-Nation (MFN) tariff (normal tariffs on imports) amounts 9.6% in 2008 and cannot be set over 10% without incurring sanctions or compensating the counterpart. In India, the MFN tariff amounts 13% since 2008 with a bound set at 49%. Until recently (2005), this tariff was much higher (19.2%). This suggests that India has started to decrease its overall trade tariffs much later than China.

Therefore, imports for Chinese industries have been, on average, more affordable and would have helped the tremendous industrial development of China in the last decade.

——————————————————————

*Lucas Leger works at the European Chamber of Commerce in Beijing, where he takes care of the lobby activities of various European industries settled in China, including the Auto, Pharmaceutical and Private Equity sectors. Lucas holds a BA in Applied Economics from France and a LL.M in Law & Economics from the Universities of Rotterdam, Hamburg and* *Haifa. He has been working in China for more than a year and a half.*

* * *

**About Lucas Leger**

## India bows to Burma’s dictatorship

Original: https://www.spontaneousorder.in/p/india-bows-to-burmas-dictatorship

Author: Spontaneous Order

Published: 2010-07-28T15:24:22.000Z

Topics: foreign-policy, human-rights, dictatorship, india-myanmar-relations

> For two days this week, Burma’s (Myanmar) dictator Than Shwe has been an honorable guest in the India capital. Red carpets rolled out, portfolio full with joint anti-terrorist treaty (and weapons ?) and industrial projects, the dictator is very satisf..

**Summary:**

India's government under UPA II shamefully hosted Burma's (Myanmar's) dictator Than Shwe with red-carpet treatment during his two-day visit to the capital, signing a joint anti-terrorist treaty, discussing weapons deals and industrial projects, all while prioritizing access to Burma's energy and mineral resources over prior commitments to regional human rights and security. No Indian newspapers criticized Prime Minister Manmohan Singh's handshake with one of the world's bloodiest dictators; only Western outlets like AFP and BBC spoke out. The farce extended to allowing Than Shwe to visit the sacred Buddhist site of Bodh Gaya and gifting him and his wife fabric printed with Mahatma Gandhi's 'Seven Social Sins,' compromising Gandhi's honor. From a classical-liberal perspective, this cynical realpolitik exemplifies moral bankruptcy, sacrificing principles of individual liberty and human rights for short-term gains, with complicity from AP industrialists, Indian media, and Buddhist groups who failed to protest.

**Key points:**

- India hosted Burma's dictator Than Shwe for talks on anti-terrorism treaties, weapons, and industrial projects focused on energy and minerals.
- Indian media remained silent on PM Manmohan Singh's meeting with Than Shwe, unlike Western agencies AFP and BBC.
- The visit included Than Shwe's trip to Bodh Gaya and a gift of Gandhi's 'Seven Social Sins' fabric, drawing classical-liberal condemnation for moral compromise.
- Shame is assigned to UPA II government, AP industrialists, media, and Buddhist groups for enabling the dictatorship.

**By jan**

* * *

For two days this week, Burma’s (Myanmar) dictator Than Shwe has been an honorable guest in the India capital. Red carpets rolled out, portfolio full with  joint anti-terrorist treaty (and  weapons ?) and industrial projects, the dictator is very satisfied.

No shame is too big for India’s cynical foreign policy at this gruesome event. India looks to the neighbour’s energy and mineral resources and forgets all promises of security by respecting human rights in the region.

No Indian newspaper dared to oppose this farce when PM Manmohan Singh shook hands with one of the bloodiest dictators in the world.  Only Western news agencies  [AFP](http://www.google.com/hostednews/afp/article/ALeqM5hIkcZxbYIdGeoAfTTt9F9IkK4PmA) and [BBC](http://www.bbc.co.uk/news/world-asia-pacific-10773064) spoke out. India is bowing low, even [letting](http://sify.com/news/general-than-shwe-pays-obeisance-at-bodhgaya-temple-news-national-kh0vEebghaj.html) the dictator go to sacred Buddhist site Bodh Gaya in India.

Shame on UPA II government, AP industrialists, Indian media and Buddhist groups for receiving him. Shame in the name of Mahatma Gandhi whose honour was compromised when Burma’s leader and his wife were gifted a fabric printed with Mahatma Gandhi’s “Seven Social Sins”.

* * *

**About jan**

## Dalai Lama on China and Marxism

Original: https://www.spontaneousorder.in/p/dalai-lama-on-china-and-marxism

Author: Spontaneous Order

Published: 2010-07-07T00:51:08.000Z

Topics: dalai-lama, china-communism, marxism, tibet

> Being a supporter of Tibet, I was saddened to hear him say this on his 75th birthday: Haven’t we learned anything more about Mao’s China after 1954-55? The Dalai Lama: Few occasions these days half joke – half serious communist party inspire lot of

**Summary:**

Parth Shah, founder of the Centre for Civil Society, expresses sadness as a Tibet supporter upon hearing the Dalai Lama's positive reflections on early Chinese communism during his 75th birthday interview. The Dalai Lama recounts his 1954-55 visit to China, where he met Mao and other top leaders, describing them as totally dedicated to the people's well-being and the Communist Party as a 'wonderful, working class, people's party.' He even offered to join but was refused, suggesting the party anticipated its own corruption. Despite this nostalgia, he advises the CCP to 'retire with grace' while cautioning against immediate democracy for China's 1.3 billion people, many uneducated and inexperienced, advocating gradual change under centralized Communist leadership. The Dalai Lama reaffirms his Marxist stance on social-economic theory. Shah's classical-liberal framing implicitly critiques this admiration, questioning whether lessons from Mao's China post-1954-55—evident in Tibet's plight—have been forgotten, highlighting tensions between personal anecdotes and communism's historical failures.

**Key points:**

- Parth Shah laments the Dalai Lama's fond memories of 1950s Chinese communist leaders despite Tibet's suffering under Mao.
- Dalai Lama describes early CCP as dedicated to people's well-being based on his meetings with Mao in 1954-55.
- Dalai Lama identifies as a Marxist in social-economic theory and opposes abrupt democracy in uneducated, populous China.
- Suggests gradual political transition under continued Communist centralized authority.

**By Parth Shah**

* * *

Being a supporter of Tibet, I was saddened to hear him say this on his 75th birthday: Haven’t we learned anything more about Mao’s China after 1954-55?

**The Dalai Lama:** Few occasions these days half joke – half serious communist party inspire lot of discussions. Particularly in the early period  when real revolutionary period was moving on or taking place they were totally dedicated people. When I was in China in 54-55 of course I met several times with General Mao, all those top leaders  and also I met a number of top leaders in different provinces. All of these people were totally dedicated to the well-being of the people. So my impression is  good about this Marxist party. So I offered that “I want to join Communist Party” but then they said no. So I think even they know that their Communist Party will be spoilt so better to not join the party. At that time it was really a wonderful party, really a working class party and really a people’s party. So I think not only are there intelligent people but also ordinary people. So logically now the time has come to retire with grace, however I  have some sort of reservation to say that in China immediately Democracy must start. That I have some reservation about. China, who has 1.3 billion people has never experienced Democracy and large number of people are uneducated. So some kind of centralized authority should be there. So therefore under Communist leadership, there should be a gradual change.  …

**NDTV:** Do you still think of  yourself as a Marxist ?

**The Dalai Lama:** Yes . As far as social economic theory is concerned I am a Marxist.

Read more at: [http://www.ndtv.com/article/india/in-conversation-with-the-dalai-lama-35955?cp](http://www.ndtv.com/article/india/in-conversation-with-the-dalai-lama-35955?cp)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Calculating the cost of the bandh

Original: https://www.spontaneousorder.in/p/calculating-the-cost-of-the-bandh

Author: Spontaneous Order

Published: 2010-07-06T23:43:31.000Z

Topics: economic-freedom, bandhs, economic-losses

> WSJ reports: The CII calculated the per-day gross domestic product of India as about 20,000 crore, or roughly $4.3 billion, based on the assumption that there are 300 workdays in a year and a GDP of about $1.3 trillion. Then, based on consultations with..

**Summary:**

Parth Shah highlights the substantial economic costs of a nationwide bandh (general strike) in India, drawing on Wall Street Journal estimates from industry bodies to underscore disruptions to economic freedom and productivity. The Confederation of Indian Industry (CII) pegs India's daily GDP at 20,000 crore rupees ($4.3 billion), based on 300 workdays and $1.3 trillion annual GDP, adjusting the bandh's impact—varying across states—to 3,000-4,000 crore in business losses. The Associated Chambers of Commerce estimates a full nationwide shutdown at 15,000 crore, prorated for three-fourths of states affected to around 10,000-11,250 crore, assuming 8% growth yielding $1.1 trillion fiscal GDP. Shah notes unquantifiable losses like time wasted by drivers, pedestrians, and stranded commuters amid demonstrations. From a classical-liberal lens, these figures reveal the high price of coercive shutdowns that hinder voluntary economic activity, choice, and competition. The post questions whether superior methods exist for estimating such costs, implicitly advocating for policies that protect property rights and market functioning over strike-induced paralysis.

**Key points:**

- CII estimates bandh losses at 3,000-4,000 crore rupees after adjusting for uneven state impacts on a 20,000 crore daily GDP baseline.
- Associated Chambers calculates full shutdown cost at 15,000 crore, reduced to about 10,000-11,250 crore for three-fourths of states affected.
- Unquantifiable costs include time and money lost by individuals caught in demonstrations or stranded at stations.
- Better methods are needed to precisely gauge bandh economic damages.

**By Parth Shah**

* * *

[WSJ reports](http://on.wsj.com/aMKhYz):

The CII calculated the per-day gross domestic product of India as about 20,000 crore, or roughly $4.3 billion, based on the assumption that there are 300 workdays in a year and a GDP of about $1.3 trillion. Then, based on consultations with state-level industry representatives, CII adjusted the figure based on how widespread it deemed the strike to be.

“Given the fact that all states were not uniformly impacted…our estimate of the business losses due to bandh is at between 3,000 to 4,000 crore rupees,” said Bidisha Ganguly, a consultant economist at CII.

The Associated Chambers of Commerce based its figure on the assumption that the services and manufacturing sectors in three-fourths of India’s states were hit by the strike. The group predicted that slightly better than 8% economic growth will lead to a national GDP for this fiscal year of about $1.1 trillion. Working backwards from that number, it pegged the cost of a nation-wide total shutdown at 15,000 crore.

“Taking out the losses for the one-fourth of states not impacted by the bandh, the figure comes at roughly 10,000 crore rupees,” said Associated Chambers spokesman Koteshwar Prasad Dobhal. (Three-quarters of 15,000 crores is 11,250 crores. It isn’t clear if the group’s estimate weighted some states more than others.)

Of course, what these groups can’t estimate is the time and money lost by the thousands of drivers and pedestrians who were caught up in demonstrations or stranded at train stations. But these are the most widely quoted figures out there so far.”

Are there better methods to estimate the costs?

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Kirit Parikh leads deregulation of fuel prices

Original: https://www.spontaneousorder.in/p/kirit-parikh-leads-deregulation-of-fuel-prices

Author: Spontaneous Order

Published: 2010-07-01T17:52:22.000Z

Topics: fuel-deregulation, energy-markets, fiscal-reform

> The government and its empowered group of ministers recently accepted most of Kirit Parikh Committee’s recommendations to deregulate fuel prices. The petrol price were increased by Rs.3.50 a litre and the diesel price hiked by Rs. 2 a litre, which is st

**Summary:**

This brief post from Spontaneous Order celebrates a classical-liberal policy win: the Indian government and its empowered group of ministers accepted most recommendations from the Kirit Parikh Committee to deregulate fuel prices. Petrol prices rose by Rs. 3.50 per litre and diesel by Rs. 2 per litre, remaining about Rs. 1.50 below market rates. It references Kirit Parikh's interview, where he counters concerns over inflation and consumer burdens, arguing the reforms will cut the fiscal deficit and encourage private sector involvement in fuel marketing. The Centre for Civil Society congratulates Parikh, a Board of Scholars member, for advancing market-oriented deregulation in the energy sector over state-controlled pricing.

**Key points:**

- Government accepted most Kirit Parikh Committee recommendations for fuel price deregulation.
- Petrol hiked Rs. 3.50/litre and diesel Rs. 2/litre, still below market price.
- Reforms aim to reduce fiscal deficit and boost private participation in fuel sector.
- CCS congratulates Kirit Parikh for this deregulatory achievement.

**By Shreya**

* * *

The government and its empowered group of ministers recently accepted most of Kirit Parikh Committee’s recommendations to deregulate fuel prices.

The petrol price were increased by Rs.3.50 a litre and the diesel price hiked by Rs. 2 a litre, which is still around Rs.1.50 less than the market price. Check out Kirit Parikh’s [interview](http://www.business-standard.com/india/news/qa-kirit-s-parikh-former-planning-commission-member/399452/) in which he dispels fears of inflation and excessive burden on the consumers and suggests how these reforms will help reduce fiscal deficit and increase private participation in this sector.

We offer Kirit Parikh who is also part of the Board of Scholars at Centre for Civil Society congratulations for achieving this feat!

* * *

**About Shreya**

## Maya’s maya: Money for memorials or education?

Original: https://www.spontaneousorder.in/p/mayas-maya-money-for-memorials-or-education

Author: Spontaneous Order

Published: 2010-04-14T15:49:45.000Z

Topics: rte, education-funding, government-waste, political-symbolism

> A leading national daily reported “Crores for memorials but no money for education”. The CM of Uttar Pradesh has said that the State Administration does not have appropriate funds to go ahead with the implementation of the RTE and asked the centre to

**Summary:**

The post criticizes Uttar Pradesh Chief Minister Mayawati's government for prioritizing massive spending on statues and memorials—framed as Dalit icons—over implementing the Right to Education (RTE) Act, highlighting profound irony as the state claims insufficient funds and seeks central assistance. A leading national daily reported 'Crores for memorials but no money for education.' Key figures include Rs. 194 crores allocated for statues of great leaders, Samajwadi Party allegations of up to Rs. 10,000 crores total, and RTI findings revealing Rs. 4,436 crores spent on just two projects. The government also passed the Special Zone Protection Force Bill, deploying ex-servicemen at an additional estimated cost of Rs. 8-9 crores to protect these structures. In contrast, UP's 55:45 Centre-state share for RTE implementation requires Rs. 8,000 crores from the state—less than memorial expenditures. From a classical-liberal perspective, this extravagance undermines children's right to education and erodes Mayawati's status as a symbol of political potency, calling for collective action to rectify the misprioritization.

**Key points:**

- Uttar Pradesh spent Rs. 4,436 crores on two memorial projects alone, according to RTI data.
- The state allocated Rs. 194 crores for statues, with allegations reaching Rs. 10,000 crores total.
- RTE implementation demands Rs. 8,000 crores from UP's share, comparable to or less than memorial costs.
- A new Special Zone Protection Force for memorials will cost an additional Rs. 8-9 crores.
- Society must unite to prioritize education funding over political memorials.

**By Shreya**

* * *

[

![](https://substackcdn.com/image/fetch/$s_!DsN3!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc4b15262-8f9d-4a3d-823a-814f655e78cd_294x233.jpeg "mayawati-on-rte")



](https://spontaneousorder.in/maya%e2%80%99s-maya-money-for-memorials-or-education/mayawati-on-rte/)

A leading national daily reported **“Crores for memorials but no money for education**”. The CM of Uttar Pradesh has said that the State Administration does not have appropriate funds to go ahead with the implementation of the RTE and asked the centre to provide funds for the same.

What more could be said to highlight the irony of the situation! The UP government (read Ms. Mayawati) is busy building more and more effigies, calling them Dalit icons and to add to the misery of it all has also reportedly passed the Special Zone Protection Force (SZPF) Bill to constitute a special force of ex-servicemen for the protection of these very important signs of strength of the community.

Mayawati was allocated [Rs.194 crores](http://www.zeenews.com/news544113.html) for the construction of statues of great leaders though as per Samajwadi Party allegations this figure is as high as Rs. 10,000 crores. The latter figure seems more believable in light of the findings of a RTI petition which shows that [Rs. 4436 crores](http://www.mynews.in/News/RTI_reveals_Mayawati%E2%80%99s_preference;_statues_share_massive_budget_of_UP_govt.__N41642.html) were spent on just 2 projects. The protection force is estimated to cost Rs. 8-9 crores additionally.

Calculating the expenditure for RTE implementation on the basis of 55:45, Centre to State share, the UP state government would need [Rs. 8000 crores](http://www.hindu.com/2010/04/04/stories/2010040459780500.htm), less than the amount spent on memorials, to educate all children in the state.

Mayawati has no doubt been a symbol of woman potency in politics but the affects and admiration of this fact gets eroded with the extravagance shown by her at the cost of the right to education.

**How can we come together to right this wrong?**

To read this post in Hindi visit *[Shiksha par Siyasat](< http://azadi.me/node/304>)*

* * *

**About Shreya**

## Disastrous Economic Fallacies- terror as stimulus?

Original: https://www.spontaneousorder.in/p/disastrous-economic-fallacies-terror-as-stimulus

Author: Spontaneous Order

Published: 2010-04-05T17:22:44.000Z

Topics: broken-window-fallacy, economic-fallacies, opportunity-costs

> Check out this video called ‘Disastrous Economic Fallacies- terror as stimulus?‘ on You Tube.It clearly explains why those who believe that destruction can lead to overall economic good are actually not paying attention to all the economic loss which

**Summary:**

This brief post promotes a YouTube video titled 'Disastrous Economic Fallacies- terror as stimulus?' which uses Frédéric Bastiat's (1801-1850) 'broken window' parable to explain why destruction, such as terror, does not lead to net economic good, as proponents overlook unseen economic losses and opportunity costs—a classical-liberal critique of Keynesian-style stimulus myths.

**Key points:**

- Bastiat's broken window parable illustrates that destruction diverts resources without creating net wealth, ignoring unseen losses.

**By Shreya**

* * *

Check out this video called ‘[Disastrous Economic Fallacies- terror as stimulus?](http://www.youtube.com/watch?v=SQFhm4s_-Pk)‘ on You Tube.It clearly explains why those who believe that destruction can lead to overall economic good are actually not paying attention to all the economic loss which remains unseen. This is explained using a story by Frederic Bastiat, 1801-1850 called broken window. Enjoy!

* * *

**About Shreya**

## Why the property-rights solution finds no mention?

Original: https://www.spontaneousorder.in/p/why-the-property-rights-solution-finds-no-mention

Author: Spontaneous Order

Published: 2010-03-21T22:24:39.000Z

Topics: property-rights, naxalism, tribal-lands, forest-policy

> Arundhati Roy in Outlook on “Walking with the Comrades” is certainly hard to put down. The two quotes I have taken from the article provide at least a partial but fundamental answer to the Naxal conundrum: “The (Indian) Constitution ratified colonia

**Summary:**

Parth Shah quotes Arundhati Roy's *Outlook* article 'Walking with the Comrades' to highlight the roots of the Naxal insurgency in tribal dispossession. Roy argues that the Indian Constitution ratified colonial policy, turning tribals into squatters on their ancestral lands, denying them traditional rights to forest produce like tendu and bamboo, and criminalizing their livelihoods in exchange for voting rights. The Forest Department exacerbates this as the 'biggest landlord,' with officers daily preventing tribals from ploughing fields, collecting firewood, plucking leaves, picking fruit, or grazing cattle—beating, arresting, humiliating them, destroying crops, and even sexually exploiting women, all under the guise of enforcing 'Rule of Law.' Shah's pointed title, 'Why the property-rights solution finds no mention?', underscores the classical-liberal critique: these grievances fuel Naxal violence, yet narratives like Roy's overlook granting secure property rights to tribals as the fundamental remedy, which would restore dignity, livelihoods, and peace by aligning state policy with individual ownership and choice over communal or custodial control.

**Key points:**

- Indian Constitution made tribals squatters on their own land by ratifying colonial forest policies and denying rights to produce.
- Forest Department routinely harasses tribals, blocking essential activities like farming and foraging under 'Rule of Law.'
- Naxal grievances stem from loss of livelihood and dignity, not just seasonal forest produce politics.
- Property rights for tribals offer an unmentioned classical-liberal solution to the Naxal conundrum.

**By Parth Shah**

* * *

Arundhati Roy in *Outlook* on “Walking with the Comrades” is certainly hard to put down. The two quotes I have taken from the article provide at least a partial but fundamental answer to the Naxal conundrum:

“The (Indian) Constitution ratified colonial policy and made the State custodian of tribal homelands. Overnight, it turned the entire tribal population into squatters on their own land. It denied them their traditional rights to forest produce, it criminalised a whole way of life. In exchange for the right to vote, it snatched away their right to livelihood and dignity.  (p. 26)

But the politics of tendu, bamboo and other forest produce was season.  The perennial problem, the real bane of people’s lives, was the biggest landlord of all, the Forest Department. Every morning, forest officers, even the most junior of them, would appear in villages like a bad dream, preventing people from ploughing their fields, collecting firewood, plucking leaves, picking fruit, grazing their cattle, from *living.* They brought elephants to overrun fields and scattered babool seeds to destroy the soil as they passed by. People would be beaten, arrested, humiliated, their crops destroyed. Of course, from the Forest Department’s point of view, these were illegal people engaged in unconstitutional activity and the Department was only implementing the Rule of Law. (Their sexual exploitation of women was just an added perk in a hardship posting.)” (p. 39)

**Why the property-rights solution finds no mention?**

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Set the Delhi schools free

Original: https://www.spontaneousorder.in/p/set-the-delhi-schools-free

Author: Spontaneous Order

Published: 2010-03-17T12:53:39.000Z

Topics: rte-act, school-choice, government-monopoly, teacher-shortage

> Activist lawyer A. Aggarwal has written a report together with a committee at NCERT on the implementation of Right to Education Rules in Delhi. A brief outline of the report appeared today (17/03/2010) in Indian Express (the full report is at the RTE ...

**Summary:**

Activist lawyer A. Aggarwal's NCERT committee report on Right to Education (RTE) implementation in Delhi exemplifies government monopoly in schooling, as critiqued from a liberty-friendly perspective. It deems 'incomprehensible' that government schools have declining enrollment and stand empty despite needy children, recommending stricter Delhi government control over closures rather than questioning why poor parents prefer professional, market-oriented private low-cost schools. The report also opposes converting double-shift schools to single shifts, prohibiting off-hours uses like teacher training despite non-conflicting potential, reinforcing rigid monopoly rules. Emphasis falls on teacher provisions, salaries, and rights without accountability mechanisms amid rampant absenteeism. With teacher shortages—5,000 in Delhi and up to 1 million in India—demand drives higher costs, worsened by RTE mandating formally trained teachers even for low-cost unrecognized schools. The author laments perks like permanent jobs with age-based raises over performance, predicting prolonged failure of educational monopoly as per the report's logic.

**Key points:**

- Government schools in Delhi have empty facilities due to declining enrollment, yet the committee seeks to block closures instead of analyzing parental preference for private low-cost alternatives.
- Rules strictly prohibit flexible use of double-shift school buildings and staff for non-clashing activities like off-hours teacher training.
- The report prioritizes teacher salaries and rights without accountability, ignoring absenteeism amid acute shortages of 5,000 teachers in Delhi and up to 1 million nationwide.
- RTE Act requirements for formally trained teachers in all schools, including unrecognized low-cost ones, will inflate costs in a supply-constrained market.

**By jan**

* * *

Activist lawyer A. Aggarwal has written a report together with  a committee at NCERT on the implementation of Right to Education Rules in Delhi. A brief outline of the report appeared [today](http://www.indianexpress.com/news/bring-staterun-schools-under-one-body-panel/591724/1) (17/03/2010) in Indian Express (the full report is at the [RTE  Coalition Portal](http://www.righttoeducation.in),  [here](http://www.righttoeducation.in/sites/default/files/legislation/state-delhi-committee-on-rte.pdf)).

There are many issues one can have on the report but the two things mentioned in the IE  today that strikes friends of liberty are;

1) the power of the Delhi government over government schools with declining levels of students. These schools are apperantly not attractive enough so with few or no students they should be closed down. The committe finds it “incomprehensible” that government schools remain with no students when there are so many children in need of schooling. Maybe the committe members should start questioning the system of their schools  analyze why poor parents rather send their kids to private low cost schools in a more professional and market oriented way.  What the committee says that Delhi government should rule strict regarding closure of empty schools. It seems quite simple for aam admi to get the picture but the committee (and the RTE Act) believes in monopoly, still.

2) Next question regards converting double shift schools to single shift. Why not let the buildings and staff be useful more ?  Rather restricting one shift, the school could be used for other purposes off school hours as long as the activities do not clash with the education. But doing that is strictly prohibited in the Rules. Teacher training for instance, why must it be done between 9 am – 2 pm ? Monopoly again.

It seems that the focus of the report is on provisions for teachers, their salaries , teachers rights etc. It is as if feeding your employees a good lunch will make them work better. Yes it is kind to want all to eat well but it is not the responsibility of the government to give its employees good conditions without any system to keep all accountable (ever heard of teacher absenteeism?)

What is most sad is that these perks (having a permanent job with a permanent salary rise by age rather than performance) will stay and even get bigger with the present lack of teachers (5000 in Delhi, up to 1 million in India). With little supply,  demand can lead to higher prices to the sought after goods and services, i.e. skilled teachers (yes the RTE Act prescribes all schools, including low cost unrecognized schools to only employ formally trained teachers).

Monopoly in education as well as in other areas has never been successful, but it will take a long time to get to that conclusion following the recent report on Delhi schools.

* * *

**About jan**

## There is a case for school voucers but not for EPW article

Original: https://www.spontaneousorder.in/p/there-is-a-case-for-school-voucers-but-not-for-epw-article

Author: Spontaneous Order

Published: 2010-03-04T16:02:04.000Z

Topics: school-vouchers, school-choice, private-education, education-policy

> In Economic and Political Weekly (Feb 13, 2010), Sunil Mitra Kumar wonders in an article whether there is a case for school vouchers. His answer is no, of course. His article is long and shows his readings of current academic debate on the issue, includ..

**Summary:**

The post critiques Sunil Mitra Kumar's 2010 EPW article arguing against school vouchers in India, which relies on narrow premises: national education systems require top-down systemic changes due to complexity and multiple stakeholders, and vouchers are too small-scale to effect change. The author counters that Kumar underestimates unrecognized private budget schools, known mainly through research by Geeta Kingdon, James Tooley, and Prachi Srivastava, serving at least 20% of students—50% in metros, 25% in rural areas, totaling 40 million out of 200 million in primary education. These 'hidden' schools in slums and rural areas demonstrate parents voting with their feet, amplified by the School Choice Campaign. Even small voucher pilots prove choice's value, unlike government failures since 1950's Constitutional promise (Art.45) of free education within 10 years, unfulfilled amid corruption, poor attendance, and learning outcomes (e.g., half of Class V children can't read Class II text per ASER). The classical-liberal perspective rejects central planning's impossibilities—likening it to the Soviet collapse and Licence Raj's end—favoring informed parental choice and market self-regulation over state monopolies, dismissing Kumar's quality metrics favoring teacher training over outcomes and parental preferences.

**Key points:**

- Kumar's premises ignore 40 million students in unrecognized private schools, comprising 20-50% enrollment depending on urban/rural areas.
- School vouchers empower parental choice, as evidenced by successful small pilots and parents exiting failing government schools.
- Government has failed for decades to deliver on 1950 Constitutional promise of free primary education, marked by corruption, dropouts, and poor learning (e.g., >50% Class V students can't read Class II text).
- Classical-liberal reform favors market self-regulation via vouchers over top-down planning, akin to ending Licence Raj.
- Research by Tooley, Kingdon, and Srivastava validates private budget schools' role, neglected by critics like Kumar.

**By jan**

* * *

In Economic and Political Weekly (Feb 13, 2010), Sunil Mitra Kumar wonders in an [article](http://epw.in/epw/uploads/articles/14443.pdf) whether there is a case for school vouchers. His answer is no, of course. His article is long and shows his readings of current academic debate on the issue, including James Tooley’s research, but alas – his premises are too narrow to come to any other conclusion than negative.  
Premise 1: National educational systems, and of a size like India’s even more so, are very very complicated and involves so many stakeholders, management levels and professionals so any change of the system must also be systematic.  
Premise 2: School vouchers are too small and disparate to change anything at a systemic level.  
Ergo: Vouchers are useless for a national education system.

The same premises are used to rule out private schools, especially the unrecognized.  
The first reply to this is that Mr. S.M. Kumar knows very little about the scope of private budget schools in India, which would be the target for school vouchers. But he is not alone in his ignorance. The state governments know as little as he does, probably less. No one, apart from Geeta Kingdon, James Tooley, and Prachi Srivastava, knows much about these schools since they are hidden in slums, rural areas, disguised as tuition centres (which they may also function as) etc.  
But in spite of that invisibility, 50% of children in metropolitan areas and some 25 % in rural areas – total figure of at least 20 % of all students enrolled in private schooling, recognized and unrecognized – it sure is no little matter taking into account these 40 million students out of 200 in primary education in India. To provide them with better funding would surely be a systemic change. Parents are voting with their feet, exit and our School Choice Campaign are giving them a voice.  
Secondly, even if there are only small pilots done with school vouchers, the idea of giving parents a choice can still be taken into account. Just because the scale is small, and tremendously successful, it does not mean that the idea of school choice is bad.  
Thirdly, if one only can change a system from a top level, then something must happen at that level that has not happened since 1950 when the Constitution (Art.45) by way of a directive principle promised free and compulsory education for all children until they complete the age of fourteen years. This was to be attained within 10 years but the States responsible for implementing the constitutional promise of primary education for all children did not do so for decades.  
So research scholar S.M. Kumar at School of Economics, University of East Anglia expects the parents and students of India to wait another half century for a reform that will change the system? He goes on about how hard it is to manage an education system with lots of little private schools and divergent, even Hindu reactionary, values.

Yes it is very hard to plan a market when you don’t know the prices, supply and demand of all goods and services. That is why the Soviet Union collapsed and why the Licence Raj ended (some at least) and why the PSE’s are on their way out in India. The opposite of a monopoly is a market that regulates itself. Education though is very different Kumar maintains but he does not convince anyone that informed parental choice is of no value.

He refers to Saranpangi and Winch’s paper on private schools saying that “indicators’ of quality, not meaning learning outcomes, but parent’s preference of English medium instruction and school infrastructure are irrelevant.  
Instead teacher training, timetabling and teaching style should be measured. Of course he does not dare come close to examining learning outcomes in any qualified way other than brushing off Tooley.

Independent minded educationist Vimala Ramachadran does not mince her words which relies on hard fact from the Planning Commission and ASER:

> “The recent mid-term review of the Eleventh Five Year Plan takes note of the poor use of funds by many states, lack of relevance, endemic corruption in teacher training, poor teacher and student attendance, and most importantly, very little progress in learning. Worse still, close to half the children who enrol in Class I do not reach Class VIII with a majority dropping out after Class V. More than half the children in Class V cannot read a Class II text, or solve simple Class II arithmetic problems.”  
> [Hindustan Times, 04-03-2010](http://www.hindustantimes.com/Move-beyond-the-textbook/H1-Article1-514542.aspx)  
> Our blog post on this ends here but it sure was interesting – and sad too of course – to read how little someone with an academic brain can get out of something as important as private schooling and vouchers while at the same time neglect 40 million students.

* * *

**About jan**

## Daily Uncensored unintelligible

Original: https://www.spontaneousorder.in/p/daily-uncensored-unintelligble

Author: Spontaneous Order

Published: 2010-03-03T10:51:28.000Z

Topics: school-vouchers, school-choice, charter-schools, education-reform

> The left wing news site – Daily Uncensored writes in their latest issue on school vouchers. Of course it contains some rhetoric which shines like a red flag, like “The free market fundamentalists just couldn’t get a beleaguered public to destroy pub

**Summary:**

Spontaneous Order critiques a Daily Uncensored article that portrays charter schools—an American phenomenon—as a stepping stone to 'right-wing' private school vouchers, which it claims fool poor people recruited by elites to undermine public education by 'socializing costs and privatizing profits.' The post highlights the left-wing site's rhetoric decrying 'free market fundamentalists' and 'voucher billionaires,' viewing it as elitist disdain for poor parents seeking better options. This is especially poignant given ongoing voucher pilots in Delhi and elsewhere, where such choice empowers families tired of failing public schools. While not endorsing the article, Spontaneous Order ironically notes that such 'unintelligible' opposition—screaming about market fundamentalists and capitalist classes—ultimately advances the classical-liberal cause of freedom, quality education, and parental choice over state monopolies. The tone underscores amusement at online adversaries who underestimate poor parents' agency.

**Key points:**

- Daily Uncensored equates charter schools with a ploy to privatize profits at public expense via vouchers.
- The article dismisses poor parents supporting choice as duped by elites, revealing elitist attitudes.
- Voucher pilots in Delhi highlight real parental demand for alternatives to failing public schools.
- Such left-wing rants inadvertently boost the case for educational freedom and quality.

**By jan**

* * *

The left wing news site – Daily Uncensored writes in their [latest issue on school vouchers.](http://dailycensored.com/2010/02/28/charter-schools-and-the-road-to-private-school-vouchers/) Of course it contains some rhetoric which shines like a red flag, like

> “The free market fundamentalists just couldn’t get a beleaguered public to destroy public education by socializing the costs and privatizing the profits.  The public saw through the whole sordid mess, even in light of the fact the managerial and financial elite had recruited people of color tired with failing public schools, to their cause.”

The rest of the piece tries to make a case for socially advanced and efficient charter schools, [an American phenomena](http://en.wikipedia.org/wiki/Charter_school), as  paving the way for bad right wing vouchers which is a system that fools poor people who know no better than to listen to the bad rich man. How sad a conclusion for the poor in our voucher pilots in Delhi and elsewhere if they know what the left thinks of their right to choice. And what an elitist view of poor parents at that.

Spontaneous Order does not endorse the views of the article above but just accepts the fact that only something as unintelligible as screaming about “market fundamentalists and capitalist class”  and voucher billionaires can advance our cause for freedom and quality. Sure is fun to see your opposition online.

* * *

**About jan**

## Right to Education-Implementation devils and the need to reform the reforms

Original: https://www.spontaneousorder.in/p/right-to-education-implementation-devils-and-the-need-to-reform-the-reforms

Author: Spontaneous Order

Published: 2010-03-02T18:14:20.000Z

Topics: right-to-education, education-reform, implementation-failures, private-schools, school-choice

> Right to Education (RTE), to be enforced as law from 1st of April, 2010, has had a long history. This article follows an overview of its legislative prehistory, the implementations of earlier reforms in education and then an update on the contemporary s..

**Summary:**

The Right to Education (RTE) Act, effective from April 2010, culminates decades of unfulfilled promises starting with Article 45 in 1950, the 42nd Amendment in 1975 shifting primary education to the concurrent list, the 1993 Supreme Court verdict interpreting education as part of the right to life under Article 21, and Article 21A added in 2002. Previous government reforms repeatedly failed due to implementation devils: the 1968 National Education Policy and 1986 Operation Blackboard provided minimal facilities but collapsed amid poor financing, logistics, and coordination; District Primary Education Programme (DPEP) showed mixed results lacking clear evidence of success; Sarva Shiksha Abhiyan (SSA) built 200,000 new schools and reached 90% net enrollment yet underspent 30% of funds, mismatched resource allocation, and late disbursements forcing rushed spending. Persistent issues include 50% of schools lacking headmasters, 20% teacher absenteeism, and top-down impositions ignoring local needs. From a classical-liberal view, private schools demonstrate superior accountability and outcomes, now enrolling 30% of students and rising, as per ASER reports and James Tooley. RTE's Rs. 40,000 crore budget over 2010-15 risks repeating errors without prioritizing better targeting, flexibility, accountability, monitoring, and lessons from private sector efficiency over grandiose policies.

**Key points:**

- Government education reforms from Operation Blackboard to SSA failed primarily due to poor implementation, lack of accountability, and resource mismanagement like 30% SSA underspending.
- Private schools outperform government ones in accountability and learning outcomes, now serving 30% of students amid rising demand.
- RTE Act's Rs. 40,000 crore budget requires World Bank-recommended improvements in targeting, flexibility, linkages, and monitoring to avoid past pitfalls.
- Policymakers must track outcomes via student learning, parental satisfaction, and school productivity rather than inputs alone.
- India should learn from private sector models and implementation research, as advocated by school choice proponents like Parth J Shah.

**By jan**

* * *

**Right to Education (RTE), to be enforced as law from 1st of April, 2010, has had a long history. This article follows an overview of its legislative prehistory, the implementations of earlier reforms in education and then an update on the contemporary situation as India comes close to realisation of the Right to Education. Details are devils but they should be on the reformers’ side.**

The first step towards right to education was taken right after Independence in 1950 when the Constitution (Art.45) by way of a directive principle promised free and compulsory education for all children until they complete the age of fourteen years. This was to be attained within 10 years but the States responsible for implementing the constitutional promise of primary education for all children did not do so for decades.

In 1975, during the emergency, the Central government put the responsibility for primary education as a joint state / centre responsibility by putting primary education under “concurrent list” in an amendment (the 42nd) to the Constitution. However, the right to education was still not a fundamental right in the constitutional sense but only a strong directional policy of recommendation from the centre to the states.

**EDUCATION AS RIGHT TO LIFE**  
In 1993, Article 21 of the Constitution on right to life and liberty which was until then seen unrelated to education, was used to promote elementary education in a legal case against the state government of Andhra Pradesh. Many states had blamed lack of funds for their poor performance in providing education for their young citizens. But the verdict leads the state to implement basic education for children up to age 14 as the Constitution had stated earlier.  
The Indian states have since then no freedom to leave educational reforms undone and have no option but to adhere to centre. The 1993 verdict reads: “Entitlements sanctioned by the Constitution cannot be deferred by the State at its convenience. The State has to make the necessary reallocation of resources, by superseding other important claims, if necessary, in a manner that the justifiable entitlement becomes a reality” But this right to basic primary education for all was still not a fundamental right in itself, but only read as a component of a fundamental right to life.  
**RIGHT TO EDUCATION SINCE 2002**  
Further educational advocacy in the 1990s for a fundamental right to education for all brought the government in December 2002 to agree to agree to a new Fundamental Right (Article 21A) that re-stated but now more sharply that “The state shall provide free and compulsory education to all children of the age 6 to 14 years in such manner as the state may, by law, determine“. The right enshrined in the Constitution was vague but coming closer to a forceful mandate from the Centre to the States.  
Since 2002 this constitutional amendment has been discussed. The last change in the legislative framework of reaching primary education for all children between 6 and 14 years was taken in Aug 4, 2009 when the Right of Children to Free and Compulsory Education Bill was passed in both the houses of the Parliament which will be enforced from April 1 this year.  
This means that the right to basic education for all in India has never been legally implemented. If the RTE is going to be a success or failure depends on what has been learnt from earlier reforms efforts, among other things.

**  
EARLIER MAJOR REFORMS IN PRIMARY EDUCATION (1968- 2001)**  
National Education Policy and Operation Blackborad  
The year 1968 was the famous year of Kothari Commission (working 1964-66) and its National Educational Policy (NPE). A new pedagogy related to the individual child, lesser burden on exams and homework, and a Common School System was proposed.

The concept of national system of such schools (as the West had since early 1900s) would imply, according to NPE 1968, and then reiterated in the 1986 version of NPE, that, up to a given level, all students, irrespective of caste, creed, location, or sex, have access to education of comparable quality.  
The Policy (1986) noted: “Education in India stands at the crossroads today. Neither normal linear expansion nor the existing pace and nature of improvement can meet the needs of the situation.” The malaise of the entire educational system was deep enough for the NPE 1986 to address the lack of responsibility and accountability it perceived among teachers with a quite extraordinary sentence for a policy on education, for it was obviously not considered too self-evident to mention that: ***“All teachers should teach and all students study’”.***  
But little happened on the ground. The school reformer PM Rajiv Gandhi himself decided in a military vocabulary to launch Operation Blackboard in 1986. Operation Blackboard was a centrally sponsored scheme, in which centre and states share responsibility for joint implementation.  
It was simultaneously a normative and remedial programme: it was to ensure that in future all standard 1-4/5 (lower) primary schools adhered to the newly defined ‘minimum essential’ level of facilities; and it was to bring all existing schools up to that level. The Operation Blackboard package consisted of three interdependent components of two rooms, two teachers and a set of teaching-learning aids. But the operation failed immensely in finance, logistics and overall implementation. The operation was too little, too late, too uncoordinated, and for too short time (3 years).  
**District Primary Education Programme and Sarva Siksha Abhiyan**  
In mid 1990s another reform was launched, now with some help from the World Bank, EU, UK and other donors: District Primary Education Programme (DPEP). The aims were to provide access to schools or equivalent non-formal education centres for all un-enrolled children, increase learning levels, haul in drop outs and to manage school administration better.  
According to both Indian Statistical Institute and the World Bank among others, there is no clear evidence either of success or of failure of the DPEP. The data amassed were insignificant and unable to interpret, in many cases due to lack of planning and attention. The World Bank is not aversive in its final evaluation (2003) to the DPEP as a reform but commends five aspects critical to the implementation of future programs in elementary education:

1.  **better targeting,**
    
2.  **improved flexibility,**
    
3.  **focus on accountability,**
    
4.  **stronger linkages**
    
5.  **evaluative research and monitoring.**
    

Quality rather than quantity would have been a hopeful outcome if these aspects were taken into account before getting on to the next reform plan. But did that happen with the latest (2001-present) primary education flagship program, Sarva Shiksha Abhiyan (SSA)?  
While the rating “satisfactory” from the World Bank for SSA phase I is certainly something to celebrate, some implementation issues still lingers on from earlier reforms in the second present phase of SSA. It is well known in India that “the devil lays in the implementation” and the same has been stated by three authors from ASER 2009. They show examples that illustrate how SSA functions at the local village school level.  
In contrast to the bottom-up level policy stated in the SSA guidelines, where the village education committee finds out what is needed and asks the district to get it from the SSA funds, resources land on the village school front porch whether needed or not. And the provisions cannot be changed. If paint is sent to a school but the school needs more teaching and learning materials, too bad!  
In 1987-1990 the same mismatch had happened in Operation Blackboard. Often the materials arrived first and the training on how to use them years later. In SSA the funds arrive late in the year and in a hurry to be spent or otherwise it would be gone. So, two thirds of all the spending is done in the last months.  
The most tragic concern with the SSA is the under spending of the allocated budget, a new and rare problem in Indian reforms implementation. It may not be viewed as a problem by many but it hampers the reform if all dedicated funds are not used properly or not used at all. 30% of all funds never get spent at all. But it cannot be denied that there have been considerable efforts made under SSA since the start in 2002-there are 200,000 new schools, net enrollment has reached 90% etc.  
Most experts now fear, including the team from [Accountability Initiative](<www.accountabilityindia.org >), that the huge sums relating to the implementation of RTE Act will also not be spent better. If the expected Rs. 40 000 crore budget for 2010-15 on RTE implementation is to be used wisely, then there is a need for better accountability, transparency and predictability especially with regards to cash flow.  
**POLICY VERSUS IMPLEMENTATION**  
In all developing countries, and maybe even so more in India, policy is considered more prestigious than implementation. Planning is theoretical and high brow, practice is dirty and clerical. This is also a global phenomenon but there are lessons to be learned from abroad.  
In 1973, US federal reform programs were researched as to their aims and implementation by two sympathetic observers in the implementation classic study, Implementation: how great expectations in Washington are dashed in Oakland; or, why it’s amazing that federal programs work at all. Since then implementation research has been a growing area of economic and political studies but India has not followed until much later, if at all.

Ideally, Dr. Caroline Dyer’s study on Operation Blackboard should be on the desk of every school reformer in this country since its publication in 2000.  
Going by the results of earlier education reforms, implementation is not taken into account serioulsy in these governmental reforms where the lack of accountability is obvious. At any point in a school year, 50% of all elementary schools are without a head master at some point during the year. 20% of the schools are without teachers due to absenteeism, while 2% lack teachers at all.  
Policy makers tend to brush these facts away or explain them by lack of resources, bureacracy, lethargia etc. but seldom take responsibilty for results and track accountability back from outcomes, i.e. students’ learning acievements, parental satisfaction and productivity of the school system itself. These parameters must be audited and taken into account when reform is coming along.  
If private schools worked like the government school, they would be out of business immediately. Imagine a private school without headmaster, teachers, inefficient spending, poor management ? It is not possible. What the governmental school system lacks, the private has in some respect and its share of the students are on the rise, now at 30% of all children and in majority in some metros. So what is the lesson to be learnt from this history as far as RTE goes?  
Summing up we can first state that the government reforms on education seem to repeat the same mistakes -for the fourth time with the RTE Act. Too many fine words, too little attention to detail. Secondly, private schools are better equipped to deal with outcomes, accountability and efficient delivery of services as shown in the latest ASER report and highlighted by James Tooley.  
But do the government flagship programme Right to Education want to learn from the private sector ? That remains to be seen. When a country such as India does not have inexhaustible financial resources, it must make sure that every grand and postive initiative is not wasted.

**References:**  
Aiyar, Y., Mukherjee, A. And Kapur, A. (2010) “Transparent and accountable financing for universal elementary education in India: Lessons from financing Sarva Shiksha Abhiya’, in ASER 2009 – Annual Status of Education Report (Rural). Mumbai : Pratham Resource Centre. [http://www.asercentre.org](http://www.asercentre.org)

Parth J Shah & Baishali Bomjan, “Vouchers can work”, CFO-Connect  
[http://schoolchoice.in/mediaroom/articlesbyscc.php](http://schoolchoice.in/mediaroom/articlesbyscc.php)

Chauhan, C. P. S.(2009) “Education for all in India: A second look”, International Journal of Lifelong Education, 28: 2

Parth J Shah, “School Choice: Assuring Quality Education to All”, Vikalpa magazine  
[http://parthjshah.in/node/39](http://parthjshah.in/node/39)

Dyer, Caroline (1999) “Researching the Implementation of Educational Policy: a backward mapping approach”. Comparative Education. Vol.35: 1  
Dyer, Caroline, (2000) Operation Blackboard. Policy implementation in Indian elementary education Oxford: Symposium books  
Mint (2010-02-10) Article on budget for elementary education and column by Y. Aiyar. Also at [www.livemint.com](<www.livemint.com >)

Pressman J. L. and Wildavsky A. (1973) Implementation : how great expectations in Washington are dashed in Oakland; or, why it’s amazing that federal programs work at all : this being a saga of the Economic development administration as told by two sympathetic observers who seek to build morals on a foundation of ruined hopes Berkeley : Univ. of California P

Ramachandran, V and Sharma, R (eds.) (2009). The elementary education system in India. Exploring institutional structures, processes and dynamics. New Delhi: Routledge

Tooley, J (2010-01-23) [“Adding value to education”, Times of India](http://timesofindia.indiatimes.com/home/opinion/edit-page/Adding-Value-To-Education/articleshow/5489311.cms)

World Bank (2003) A Review of Educational Progress and Reform in  
The District Primary Education Program (Phases I & II). Discussion Paper Series. Human Development Sector South Asia Region, World Bank. [www.worldbank.org](<www.worldbank.org >)

World Bank (2008) Implementation Completion and Results Report for Elementary Education Project I (SARVA SHIKSHA ABHIYAN). Human Development Department, South Asia Region, World Bank. [www.worldbank.org](www.worldbank.org)

[www.accountabilityindia.org](<www.accountabilityindia.org >)

Read more: [https://spontaneousorder.in/rte-field-experiences-from-gujarat/](https://spontaneousorder.in/rte-field-experiences-from-gujarat/)

* * *

**About jan**

## Illiberal Indian civil society must be countered

Original: https://www.spontaneousorder.in/p/illiberal-indian-civil-society-must-be-countered

Author: Spontaneous Order

Published: 2010-02-27T18:58:09.000Z

Topics: free-speech, civil-society, state-responsibility, religious-intolerance

> The last days has witnessed media reports of intolerance. First it was the sad but also rescuing fact that celebrated artist M.F. Hussein who has been threatened by reactionary Hindu activists, was granted citizenship in Quatar.

**Summary:**

The post highlights recent incidents of intolerance in India driven by illiberal elements within civil society: celebrated artist M.F. Husain, threatened by Hindu activists over paintings of deities deemed obscene, was granted Qatari citizenship; a book 'Crescent over the world – is a boon or the silent Holocaust' published in Andhra Pradesh led to the author's arrest and book seizures following Muslim protests in Khammam; and a gay professor at Aligarh Muslim University was suspended, evicted, and denied retirement benefits despite the Delhi High Court's 2009 decriminalization of consensual adult intercourse. These cases embarrass urban Indians and horrify Westerners, revealing civil society's role in intolerance while the state passively watches or acquiesces—e.g., police endorsing objections to the book and the university vice-chancellor prioritizing 'morals' over law. From a classical-liberal view, the state, wielding armed force, bears ultimate responsibility to protect individuals' freedoms of expression, thought, and choice from civil society's communal, coercive acts. Defending civil society, as CCS does, requires confronting its faults and insisting the state shield it from uncivilized members, fostering dialogue only under the rule of law. This sad week underscores the task for an open Indian society.

**Key points:**

- Illiberal civil society elements in India perpetrate intolerance through threats against artists like M.F. Husain, arrests over provocative books, and firings of gay professors.
- The state fails to protect individual rights, resigning to civil society's pressures and allowing endless legal harassment or police seizures.
- The armed state holds the monopoly on force and must actively defend freedoms of expression and thought against civil society's villains.
- Classical liberals must critique civil society's coercive acts while demanding state intervention to safeguard a just society.

**By jan**

* * *

The last days has witnessed media reports of intolerance.  
First it was the sad but also rescuing fact that celebrated artist [M.F. Hussein](http://www.hindu.com/2010/02/26/stories/2010022670070100.htm "mf") who has been threatened by reactionary Hindu activists, was granted citizenship in Qatar.  
Secondly, the book [“Crescent over the world – is a boon or the silent Holocaust”](http://beta.thehindu.com/news/national/article113706.ece "ap"), published in Andhra Pradesh has caused an uproar among local Muslims, gotten the author arrested and book stacks seized by the police.  
Thirdly, [a gay professor](http://timesofindia.indiatimes.com/india/Aligarh-Muslim-University-professor-suspended-for-being-gay/articleshow/5585787.cms "gp") was ejected from his campus home at Aligarh Muslim University and had his close retirement and employment taken from him.

What these stories suggest is not unusual in India, as the country moves from rural feudal relationships and customs, along with socially conservative traditions in the metros to a more open modern global superpower. Such stories make many modern urban Indian embarrassed while Westerners are horrified. All these reactions are known.

But what these stories also suggest is that it is members in the Indian civil society that is to blame for the intolerance while the state just watches. The state with its force and laws has resigned to protect the individuals and in the end, the civilized civil society from its most uncivilized members.

M.F. Hussein has to face innumerable court hearings about the supposed obscenity in his paintings of Hindu deities the moment he enters India, as the legal process goes on forever and little has been done to help from any Indian government since his legal troubles and threats to art galleries began.

The Muslims of Khammam, A.P. did not face any obstacles when protesting saying that the book hurt their beliefs and sentiments- instead the Superintendent of Police said: “We also feel that there is some objectionable content in the book.”

The vice-chancellor of Aligarh Muslim University defends his firing of the gay professor by referring to the university’s morals, which are supposedly above the Delhi HC decriminalisation of adult consensual intercourse in 2009.

A state that does not defend its citizens against intolerance will let the scope of any human rights violation reign over individual acts and choices, freedom of expression and thought. In India it is the state that is to blame for these latest misdeeds. To defend civil society, as CCS does, is not to be blind to the faults of communal, criminal or coercive acts within the civil society. It is to stand clear on the issue of whose responsibility and with which power it is to stop intolerance.

In India it is the armed forces of the state that ultimately shields the civil society. Within a just and liberal society, a spirit of dialogue and critique may be fostered by free thinking individuals and groups, but that bears little protection against villains of harm, violence and vice. A sad week for an open Indian society but a reminder of the task before us.

* * *

**About jan**

## Managing a school for free – a parental wish?

Original: https://www.spontaneousorder.in/p/managing-a-school-for-free-a-parental-wish

Author: Spontaneous Order

Published: 2010-02-27T18:52:20.000Z

Topics: rte-act, school-management, school-choice, parental-involvement

> The Right to Education Act will soon be implemented (Apr 1, 2010) and that may be all well since some of CCS’ earlier critique in the 2005 and 2009 Bills actually was taken into account. From formerly six new bureaucratic levels in the earlier Bills to

**Summary:**

The post critiques India's Right to Education (RTE) Act, set for implementation on April 1, 2010, praising reductions in bureaucracy from earlier bills but questioning the new School Management Committee (SMC) and School Tribunal. While the Tribunal may expedite teacher dismissals, the SMC—composed of 75% parents and others like local politicians and teachers—is a voluntary body with no financial reimbursements, tasked with extensive professional duties under Model Rules 13 and 14. These include monthly monitoring of child rights communication, teacher workloads, enrollment, infrastructure norms, mid-day meals, disabled children's facilities, and preparing detailed three-year School Development Plans with enrollment estimates, teacher needs, infrastructure, and budgets—all without pay. The author argues this burdens volunteers unrealistically, excludes resourceless or working parents, invites meddlesome locals in government schools, and undermines professionalism, noting 50% of Indian schools lack a good headmaster part-time and 2% full-time. From a classical-liberal viewpoint, SMCs will be inefficient and exclusionary; instead, empower parents via vouchers for school choice, leaving management to competent principals or private enterprises, with PTAs for voluntary involvement.

**Key points:**

- RTE's School Management Committee imposes unpaid, professional-level tasks on mostly volunteer parents (75%), making it unfeasible for resourceless or working families.
- Voluntary SMCs risk domination by busybodies like sarpanch allies, sidelining professionalism in school management.
- Classical-liberal solution: Provide parental vouchers for school choice rather than mandating SMCs, ensuring accountability through exit options.
- Professional school management by headmasters or private entities is preferable to volunteer committees for efficiency.

**By jan**

* * *

The [Right to Education Act](<http://education.nic.in/Elementary/free and compulsory.pdf>) will soon be implemented (Apr 1, 2010) and that may be all well since some of CCS’ earlier critique in the 2005 and 2009 Bills actually was taken into account. From formerly six new bureaucratic levels in the earlier Bills to just two in Act and the ensuing recommendations to the States known as [Model Rules](http://education.nic.in/Elementary/RTI_Model_Rules.pdf "RTE R") has downsized governence. We bow to the wisdom of the RTE authors. But still we have some doubts even about the need for these two…

The RTE Act has two local governmental innovations, the School Management Committee (SMC) and the School Tribunal. The last one may be the only way to bypass the legal red tape that has courts processing firing procedures of teachers for years. But the SMC leaves one wondering if all is well thought.

What is bewildering is that a voluntary committee such as the SMC is supposed to function as a school management group without any financial reimbursements to its members and professional legal bindings to its work. It leaves no way for resourceless parents to be involved and there is little to demand from a group of well-wishers than from a competent principal or similar person/ group.

Looking at the “Composition and functions of the School Management Committee for the purposes of section 21” in the Act and 13 and 14 in the Rules, there is quite a tall order for a group of volunteers  (no paisa mentioned here) to do in their spare time monthly (yes, monthly it says in the Rules). Below is a **selection** of the required tasks:

> “13. 6 (a) communicate in simple and creative ways to the population in the neighbourhood of the school, the rights of the child as enunciated in the Act; as also the duties of the State Government, local authority, school, parent and guardian;  
> (c) Monitor that teachers are not burdened with non-academic duties other than those specified in section 27;  
> (d) Ensure the enrolment and continued attendance of all the children from the neighbourhood in the school;  
> (e) Monitor the maintenance of the norms and standards prescribed in the Schedule  
> (f) Bring to the notice of the local authority any deviation from the rights of the child, in particular mental and physical harassment of children, denial of admission, and timely provision of free entitlements as per section 3(2).  
> (h) Monitor the identification and enrolment of, and facilities for learning by disabled children, and ensure their participation in, and completion of elementary education  
> (i) Monitor the implementation of the Mid-Day Meal in the school.  
> (j) Prepare an annual account of receipts and expenditure of the school.
> 
> 14\. (1) The School Management Committee shall prepare a School Development Plan at least three months before the end of the financial year in which it is first constituted under the Act.  
> (2) The School Development Plan shall be a three-year plan comprising three annual sub plans  
> (3) The School Development Plan, shall contain the following details –  
> (a) Estimates of class-wise enrolment for each year;  
> (b) Requirement, over the three year period, of the number of additional teachers, including Head Teachers, subject teachers and part time teachers, separately for Classes I to V and classes VI to VIII, calculated, with reference to the norms specified in the Schedule  
> (c) Physical requirement of additional infrastructure and equipments over the three year period, calculated, with reference to the norms and standards specified in the Schedule  
> (d) Additional financial requirement over the three year period, year-wise, in respect of (b) and (c) above, including additional requirement for providing special training facility specified in section 4, entitlements of children such as free text books and uniforms, and any other additional financial requirement for fulfilling the responsibilities of the school under the Act.”

Anyone can see that these tasks are very well stated and needed in order to run a school well but why on earth would a group of voluntary parents (75%) and other within and outside the school (local politicians, teachers, older children, local educationists (?))?

The Model Rules has given up on running schools on a professional basis as these tasks should either be done by a good head master (which 50 % of Indian schools lack at least some time every year and 2 % all the time) or be given to a (school) manager from a qualified private enterprise.

To head schools with extra parental power sounds nice but will not only be inefficient but also socially excluding. Which poor parent or just normal hard working middle class families with two jobs like to be met with these attitudes?  
“ Hello, come and put your beti/beta with us. And by the way can you also manage the school for us? No there is no reimbursement, Madame/ Sir, we just trust your good will and other parents’. Just sign here and read these 240 pages on school legislation and current staff needs. And don’t’ forget to check the playground swings. I think they may need repair. Do you know a cheap mechanic ? And…”.

The parents which may show up for the SMC will be the bivis/begums of the sarpanch and his allies alongside with government people who have time enough to go to meetings, esp. in government schools– all well meaning busybodies that will have views on everything and nothing that is relevant to the school. Professionalism from the remaining 25 % is soon taken over by the majority.

Yes, the intention of a parental voice is good but give it directly to the parent as a voucher so the right of choice can be executed. Leave parents the right to enter and exit schools and the rest will follow. If they want to be busy with education there are Parent Teacher Associations, tuition talk, library clubs, tours and outdoors excursions that need parental involvement and child minding. But keep management aside if the school is to be run professionally or hire the Committee members 1- 2 days/week. Then accountability can be counted upon – not by volunteering middle class mums.

* * *

**About jan**

## Sibal-Das Debate on RTE

Original: https://www.spontaneousorder.in/p/sibal-das-debate-on-rte

Author: Spontaneous Order

Published: 2010-02-23T17:35:06.000Z

Topics: rte-act, school-choice, private-schools, education-regulation

> Gurcharan Das gave a keynote address at the annual meeting of the National Progressive Schools Conference which was followed by the speech of MHRD Minister Kapil Sibal. Sibal’s comments on the issues raised by Das led to several media stories. Sibal agr

**Summary:**

In a keynote at the National Progressive Schools Conference, Gurcharan Das advocated against closing budget private schools, which serve the poor, and criticized RTE requirements like mandating government-scale pay for private teachers and playground infrastructure. MHRD Minister Kapil Sibal responded positively, agreeing that such schools should not be summarily shut down to avoid harming poor families reliant on them. Sibal clarified that the RTE Act does not impose government pay scales on private schools, allowing private management and teachers to decide salaries—a statement that stunned the audience. He also indicated reconsideration of recognition requirements like playgrounds. From a classical-liberal viewpoint, this exchange highlights the need to protect affordable private education options for the poor by rolling back regulatory burdens that drive up costs and stifle choice. Parth Shah, founder of Centre for Civil Society, identifies two key issues for focused discussion: whether government should impose pay scales on private schools, and whether budget private schools must have playgrounds for recognition. This supports broader advocacy for economic freedom and competition in education over rigid state mandates.

**Key points:**

- Sibal agrees budget private schools serving the poor should not be closed under RTE.
- RTE Act does not require private schools to pay teachers at government scales, per Sibal.
- Reconsider infrastructure norms like playgrounds for recognizing budget private schools.
- Debate government imposition of pay scales on private schools.
- Discuss playground requirements for low-cost private schools for the poor.

**By Parth Shah**

* * *

[Gurcharan Das](http://gurcharandas.org) gave a keynote address at the annual meeting of the [National Progressive Schools Conference](http://npscindia.com) which was followed by the speech of MHRD Minister Kapil Sibal. Sibal’s comments on the issues raised by Das led to [several media stories](http://schoolchoice.in/campaigns/sibal-and-das-on-rte.php).

Sibal agreed with Das that budget private schools should not be summarily closed down as it would affect the poor who rely most on these schools today adversely. He also commented that some of requirements for school recognition should be re-considered. Das had talked about two of them, one, the requirement to pay private school teachers at the same scale as government teachers and two, infrastructure norms like playground.  Sibal said that RTE Act does not require schools to pay at government scale, private management and teachers should decide on the pay scale.  As you can imagine the audience was stunned!

The two issues that need focused discussion are:

1\. Should the government impose pay scale on private schools?

2\. Should budget private schools for the poor be required to have playground to be recognised?

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## The why, when and what of privatization

Original: https://www.spontaneousorder.in/p/the-why-when-and-what-of-privatization

Author: Spontaneous Order

Published: 2010-02-16T17:01:04.000Z

Topics: privatization, disinvestment, public-sector, economic-reform

> Vijay Kelkar, Chairman of the Finance Commission of India recently wrote an article called ‘From Disinvestment to Privatization’ in the Economic Times in which he suggests that India has finally reached a stage where we should reassess the role of the

**Summary:**

Vijay Kelkar, Chairman of India's Finance Commission, argues in his Economic Times article that the country has reached a stage to reassess the public sector's role, shifting from mere disinvestment to full privatization due to the poor performance of most public sector undertakings (PSUs), burgeoning entrepreneurship, and improved ability to enforce competition policies. The author endorses Kelkar's practical approach over hasty full-scale privatization pushed by some lobbyists: government should continue managing sectors like rural road construction, which are unlikely to attract significant private investment. In contrast, competitive industries such as steel and automobiles, and regulable sectors like railways, banking, and insurance, should be privatized to leverage market efficiencies. This allows the government to fulfill its core function as a regulator, promoting development through private initiative and competition—a classical-liberal prescription for India's growth amid PSU inefficiencies.

**Key points:**

- India should move from disinvestment to privatization of PSUs given their poor performance and rising private entrepreneurship.
- Retain government control over rural road construction due to low private investment interest.
- Privatize competitive sectors like steel and cars, and regulable ones like railways, banking, and insurance.
- Position government primarily as a regulator to enforce competition and enable market-driven development.

**By Shreya**

* * *

[Vijay Kelkar](http://en.wikipedia.org/wiki/Vijay_Kelkar), Chairman of the Finance Commission of India recently wrote an article called ‘[From Disinvestment to Privatization’](http://economictimes.indiatimes.com/articleshow/5526178.cms) in the Economic Times in which he suggests that India has finally reached a stage where we should reassess the role of the public sector in meeting our country’s developing needs.

He rightly suggests that given the poor performance of most PSUs, our burgeoning entrepreneurship capabilities and our ability to enforce competition policies it is time to disinvest at least some sectors as long as we keep privatization as an end game plan.

Opposed to some lobbyists that propose the privatization of mostly all industries right away, Vijay Kelkar is more practical in his approach. He argues that as of today areas such as rural road construction which is unlikely to attract significant private investment should continue being run by the government. However, other industries which can operate  in competitive markets like steel and cars and those sectors which can be regulated like the railways, banking and insurance should be left to the private sector. The government can then play the role its meant to play- that of a regulator.

* * *

**About Shreya**

## Who said you can’t fight corruption?

Original: https://www.spontaneousorder.in/p/who-said-you-cant-fight-corruption

Author: Spontaneous Order

Published: 2010-02-08T18:35:16.000Z

Topics: corruption, anti-corruption, india, grassroots-activism

> Recently the economist carried a story called ‘A Zero Contribution‘ on an innovative idea on how to fight corruption in India. The next time a corrupt government official asks you for a bribe, think again before conceding to his/her demand. That’s e

**Summary:**

The post celebrates an innovative classical-liberal approach to combating corruption in India, spotlighted in The Economist's article 'A Zero Contribution.' A University of Maryland physics professor invented the zero Rupee note as a non-violent refusal tool against bribe demands from corrupt officials. NGO 5th Pillar, under president Vijay Anand, scaled this idea by printing nearly 1 million such notes. When handed these notes instead of cash, officials are dumbfounded and shamed; in one case, a village official returned all bribes he had demanded for electricity connections. This grassroots tactic empowers ordinary citizens and civil society to push back against petty corruption without relying on state mechanisms, embodying the spontaneous order of individual initiative over coercive government solutions.

**Key points:**

- A University of Maryland physics professor created the zero Rupee note to refuse bribe demands from corrupt officials.
- 5th Pillar NGO printed nearly 1 million zero Rupee notes to distribute widely.
- Officials receiving the notes are left dumbfounded, with one shamed into returning solicited electricity bribes to a village.

**By Shreya**

* * *

Recently the economist carried a story called [‘](http://www.economist.com/world/asia/displaystory.cfm?story_id=15393714)**[A Zero Contribution](http://www.economist.com/world/asia/displaystory.cfm?story_id=15393714)**‘ on an innovative idea on how to fight corruption in India.

The next time a corrupt government official asks you for a bribe, think again before conceding to his/her demand. That’s exactly what a physics professor of University of Maryland did when he created the zero Rupee note.

[

![](https://substackcdn.com/image/fetch/$s_!CAdY!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9aeb9a69-19ff-4f34-80d3-a95ca9dd3080_300x145.jpeg "The Zero Rupee Note")



](https://spontaneousorder.in/who-said-you-cant-fight-corruption/0510as2/)

Mr. Vijay Anand, president of a NGO called 5th pillar liked the idea and printed close to 1m such notes. Instead of bribes, corrupt officials on receiving such notes are left dumbfounded. The article suggests that on receiving this note one official was shamed (or scared) into returning all the bribes he had solicited for electricity from a village.

* * *

**About Shreya**

## Are private schools better?

Original: https://www.spontaneousorder.in/p/are-private-schools-better

Author: Spontaneous Order

Published: 2010-02-05T11:21:31.000Z

Topics: education, private-schools, school-choice, rte-act

> Join in on the debate between Vinod Raina (Member, Central Advisory Board of Education) and Parth Shah (President, Centre for Civil Society) on whether private schools do in fact have a role to play in the future of our children’s education. Vinod Raina

**Summary:**

This short post promotes a 2010 Business Standard debate between Vinod Raina (Central Advisory Board of Education) and Parth Shah (Centre for Civil Society President) on the role of private schools in Indian children's education. Raina challenges: 'Nowhere in the world has universal elementary education been achieved through private schools—how can India be an exception?' Shah responds from a classical-liberal viewpoint: 'The RTE Act recognizes private schools' merit by requiring seat reservations for the poor—why not give students 100% choice?' The post links to the debate articles, photos of debaters, and a related podcast episode, urging readers to comment on whom they agree with. Lacking substantive analysis, it serves as a teaser to highlight pro-private-school arguments against government-centric models.

**Key points:**

- Vinod Raina argues private schools cannot achieve universal elementary education, as no country has done so.
- Parth Shah counters that RTE Act implicitly endorses private schools' quality via poor-student quotas and advocates full choice.
- Readers invited to read debate and comment on private schools' merits.

**By Shreya**

* * *

Join in on the [debate](http://www.business-standard.com/india/news/are-private-schools-better/384414/) between Vinod Raina (Member, Central Advisory Board of Education) and Parth Shah (President, Centre for Civil Society) on whether private schools do in fact have a role to play in the future of our children’s education.

Vinod Raina asks *‘Nowhere in the world has universal elementary education been achieved through private schools — how can India be an exception?*‘ and Parth counters that ‘*It is in recognition of the merit of private schools that the Act (RTE Act) says they must reserve seats for the poor. Why not give students a 100 per cent choice?*‘

[

![](https://substackcdn.com/image/fetch/$s_!p7Ux!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fba7b3a03-85bb-42a6-a35c-71e05a40ae48_68x83.jpeg "Parth Shah")



](https://spontaneousorder.in/are-private-schools-better/020310_02-2/)

Parth Shah

[

![](https://substackcdn.com/image/fetch/$s_!VRon!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe4993b9c-e7e4-45c6-897a-aa69806b28e3_68x83.jpeg "Vinod Raina")



](https://spontaneousorder.in/are-private-schools-better/020310_01/)

Vinod Raina

Read their articles [‘Are private schools better?’](http://www.business-standard.com/india/news/are-private-schools-better/384414/) in Business Standard and don’t forget to comment here on who you agree with.

Read more : [https://spontaneousorder.in/so-basically-episode-05-kya-private-schools-chor-hai/](https://spontaneousorder.in/so-basically-episode-05-kya-private-schools-chor-hai/)

* * *

**About Shreya**

## Voucher amount under RTE 2009

Original: https://www.spontaneousorder.in/p/voucher-amount-under-rte-2009

Author: Spontaneous Order

Published: 2010-02-03T20:35:14.000Z

Topics: rte-2009, school-vouchers, school-choice, private-education

> The new Right to Education Act has 25% government sponsored seats in private schools. How much would the government pay for those students? A lot rides on the answer: whether schools would be happy to take these students or resist the government effort...

**Summary:**

Parth Shah examines the reimbursement mechanism for the 25% government-sponsored seats in private schools under India's Right to Education Act 2009, arguing that the amount hinges on Section 8(1) of the Draft Model Rules. This sets the per-child payment as the State Government's total annual recurring expenditure on its own elementary schools—funded by state, central, or other sources—divided by enrollment in those schools, excluding certain specified schools per the explanation. Shah highlights the high stakes: private schools' willingness to accept poor children depends on whether this reimbursement covers their costs, questioning if it seems fair or would prompt happiness, resistance, or court challenges. From a classical-liberal perspective advocating choice and competition in education, this formula—pegged to typically lower government school spending—threatens to burden private providers, potentially sabotaging the policy's integration of disadvantaged students into higher-quality private education environments.

**Key points:**

- RTE 2009 mandates 25% seats in private schools for poor children, reimbursed at the state's per-child expenditure on its own schools.
- Section 8(1) of Draft Model Rules defines reimbursement as total state elementary education spending divided by enrollment in government-controlled schools, excluding specific categories.
- The reimbursement level will determine if private schools accept or resist the mandate, possibly leading to legal challenges.
- Shah questions the fairness of this amount for private schools, which face higher costs than government institutions.

**By Parth Shah**

* * *

The new Right to Education Act has 25% government sponsored seats in private schools. How much would the government pay for those students?  A lot rides on the answer: whether schools would be happy to take these students or resist the government efforts or even challenge the provision in the courts. The section 8 of the just released Draft Model Rules (http://bit.ly/bYLGFI, hyperlink not working somehow) answers that question.  Does the amount suggested seem fair? Would private schools be happy to take poor children at that level of reimbursement?

**8** (1) The total annual recurring expenditure incurred by the State Government, whether from its own funds, or funds provided by the Central Government or by any other authority, on elementary education in respect of all schools established, owned or controlled by it or by the local authority, divided by the total number of children enrolled in all such schools, shall be the per-child expenditure incurred by the State Government.

*Explanation –* For the purpose of determining the per-child expenditure, the expenditure incurred by the State Government or local authority on schools referred to in sub-clause (ii) of clause (n) of section 2 and the children enrolled in such schools shall not be included.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Who do you agree with: Keynes or Hayek?

Original: https://www.spontaneousorder.in/p/who-do-you-agree-with-keynes-or-hayek

Author: Spontaneous Order

Published: 2010-02-02T11:26:49.000Z

Topics: hayek, keynes, boom-bust-cycle, austrian-economics

> “Fear the Boom and Bust” a Hayek vs. Keynes Rap Anthem Check out this brilliantly made rap song by creative director John Papola and creative economist Russ Roberts on the philosophies of Keynes and Hayek on what they think are the causes and solution

**Summary:**

This short post from a classical-liberal Substack shares a rap video 'Fear the Boom and Bust' by John Papola and Russ Roberts, pitting John Maynard Keynes against F.A. Hayek on the causes and solutions to economic boom-bust cycles. It describes the video's premise: the economists revive for a conference, hit the town, and rap about their disagreement—Keynes favoring market steering via intervention, Hayek advocating market freedom. The chorus highlights their centuries-old debate: 'I want to steer markets (Keynes), I want them set free (Hayek).' No original analysis is provided; the post implicitly endorses the Hayekian critique through promotion on a pro-free-market platform, asking readers 'Who do you agree with?'

**Key points:**

- The rap video contrasts Keynesian interventionism with Hayekian free-market advocacy as explanations for boom-bust cycles.
- Keynes argues for steering markets to manage economic crises, while Hayek warns against interventions that fuel booms and busts.
- The post promotes the video as a fun, accessible depiction of 20th-century economic philosophies.

**By Shreya**

* * *

[“Fear the Boom and Bust” a Hayek vs. Keynes Rap Anthem](http://www.youtube.com/watch?v=d0nERTFo-Sk)

[

![](https://substackcdn.com/image/fetch/$s_!C18W!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F66cac098-0727-4cbe-a5a0-42629300c5e7_120x90.jpeg "'Fear the boom and bust'")



](http://www.youtube.com/watch?v=d0nERTFo-Sk)

Fear the boom and bust

Check out this brilliantly made rap song by creative director John Papola and creative economist Russ Roberts on the philosophies of Keynes and Hayek on what they think are the causes and solutions to the boom bust cycle in an economy.

As introduced by the creators, in this song ‘John Maynard Keynes and F. A. Hayek, two of the great economists of the 20th century, come back to life to attend an economics conference on the economic crisis. Before the conference begins, and at the insistence of Lord Keynes, they go out for a night on the town and sing about why there’s a “boom and bust” cycle in modern economies and good reason to fear it.’

The main chorus line ‘we’ve been going back and forth for centuries..I want to steer markets (Keynes), I want them set free (Hayek) is pretty indicative of the point of disagreement between the two economists.

* * *

**About Shreya**

## Tooley’s take on Pratham’s ASER report

Original: https://www.spontaneousorder.in/p/tooleys-take-on-prathams-aser-report

Author: Spontaneous Order

Published: 2010-01-29T12:12:42.000Z

Topics: education, private-schools, school-vouchers, school-choice

> As you all might have read in the papers, Pratham recently published it’s 2009 ASER report which maps the progress (or for that matter in some cases lack of it) in the education sector in rural India. The research, the biggest such private survey in Ind

**Summary:**

Pratham's 2009 ASER report, the largest private survey in India covering 16,291 villages, 338,027 households, and 691,734 children, highlights success in access to rural education with high and increasing gross enrollment ratios, but abysmal quality where only 52% of Std 5 students can read a Std 2 text. James Tooley draws the key insight from the report's data on private education: nearly 22% of students attend private schools that provide better education outcomes than government schools, even after adjusting for socio-economic status and parental education levels, and at a fraction of the per-student cost of government schools. From a classical-liberal perspective, the report underscores the burgeoning affordable private sector's potential; governments should redirect education allocations to promote private schooling through school vouchers, leveraging this sector to deliver cost-effective, high-quality education to more children using the same pool of funds.

**Key points:**

- ASER 2009 shows high enrollment in rural India but only 52% of Std 5 students can read Std 2-level text.
- 22% of rural students attend private schools that outperform government schools in quality after socioeconomic adjustments and at lower costs.
- Redirect government education spending to school vouchers to empower affordable private schools.
- Vouchers would enable the same budget to provide better education to more children.

**By Shreya**

* * *

As you all might have read in the papers, Pratham recently published it’s 2009 ASER report which maps the progress (or for that matter in some cases lack of it) in the education sector in rural India. The research, the biggest such private survey in India maps 16,291 villages, 338,027 households and 6,91,734 children.

We draw a number of conclusions from this study such as, on the one hand our success in ensuring access, with a high and increasing gross enrollment ratio, and on the other the still existing abysmal quality of education with only 52% of Std 5 students able to read a standard 2 text.

However, the most important conclusion to be drawn, as [James Tooley](http://en.wikipedia.org/wiki/James_Tooley) suggests, is ASER’s findings on private education. Close to 22% students attend private schools and they receive better education than government schools even if we were to adjust for other factors such as the socio-economic and educational backgrounds of students. More so, private schools impart this education at a fraction of the cost as compared to government schools.  So isn’t it obvious that we should promote private schooling by using government allocation for education in such a way so as to involve this burgeoning affordable private sector to provide cost-effective quality education. One way to do this is through school vouchers.

**Can you imagine the same pool of money will allow more children to access better quality education!**

To learn more about what Tooley says about this low-cost private school revolution read his article ‘[Adding Value to Education](http://timesofindia.indiatimes.com/home/opinion/edit-page/Adding-Value-To-Education/articleshow/5489311.cms)‘ in The Time of India.

* * *

**About Shreya**

## Realizing Freedom

Original: https://www.spontaneousorder.in/p/realizing-freedom

Author: Spontaneous Order

Published: 2010-01-29T11:25:06.000Z

Topics: libertarianism, liberty-theory, free-markets, individual-rights

> Check out Tom Palmer’s book, Realizing Freedom: Libertarian History, Theory and Practice. His book ranges from the theory of justice to foreign policy, from the economics of public goods to gay rights in Russia. Palmer addresses the nature of freedom, l

**Summary:**

Shreya recommends 'Realizing Freedom: Libertarian History, Theory and Practice' by Tom Palmer, spotlighting a CATO Institute review that celebrates his over 25 years advancing liberty's history and theory worldwide. The book explores the nature of freedom, law, rights, and justice from a classical-liberal viewpoint; defends the morality of markets; and examines institutional frameworks for free societies. Palmer critiques political theorists like John Rawls and Cass Sunstein, refutes 'myths of individualism,' and links abstract liberal rights to their historical origins. It integrates his activism from 1980s Eastern Europe to contemporary Russia, China, and the Arab world, tackling issues like multiculturalism, free speech struggles, the Iraq war, economics of public goods, and gay rights in Russia. The review positions Palmer as a leading scholar whose collected major writings offer a comprehensive resource for understanding ordered liberty in theory and practice.

**Key points:**

- Tom Palmer's book compiles his key writings on libertarian theory, history, and global activism.
- It defends markets' morality and critiques Rawls, Sunstein, and myths of individualism.
- Palmer connects liberal rights to historical roots and addresses current issues like free speech and foreign policy.
- CATO praises Palmer's unparalleled knowledge of liberty after 25+ years of scholarship and fieldwork.

**By Shreya**

* * *

**Realizing Freedom: Libertarian History, Theory and Practice**

[

![Libertarian History, Theory and Practice](https://substackcdn.com/image/fetch/$s_!tZ4n!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fcf89a50a-1d74-4b76-86de-b103f9b30f3b_150x150.jpeg "http://www.amazon.com/Realizing-Freedom-Libertarian-History-Practice/dp/1935308114/ref=sr_1_1?ie=UTF8&s=books&qid=1259889362&sr=8-1")



](http://www.amazon.com/Realizing-Freedom-Libertarian-History-Practice/dp/1935308114/ref=sr_1_1?ie=UTF8&s=books&qid=1259889362&sr=8-1)

Here is an excellent review of this book by the CATO Institute:

For more than 25 years, Tom Palmer has studied the history and theory of liberty and has worked tirelessly to bring liberty to countries around the world. This book ranges from the theory of justice to foreign policy, from the economics of public goods to gay rights in Russia. Palmer addresses the nature of freedom, law, rights, and justice; the morality of markets; and the institutional frameworks of free societies. He considers and criticizes the arguments of political theorists such as John Rawls and Cass Sunstein, as well as popular “myths of individualism,” which he concisely refutes. But theory doesn’t stand alone. Palmer studies and explains ordered liberty and connects abstract liberal rights to their historical roots. Drawing on his activism in countries ranging from eastern Europe in the late 1980s to Russia, China, and the Arab world today, he also takes on current events and concerns, from multiculturalism to struggles for free speech to the war in Iraq. It is hard to find a contemporary scholar with more knowledge of the theory and history of liberty, and at last his major writings are collected in one place.

To listen to a podcast featuring Tom Palmer talking about his book visit the [CATO Institute website.](http://www.cato.org/event.php?eventid=6567)

* * *

**About Shreya**

## The Beautiful tree

Original: https://www.spontaneousorder.in/p/the-beautiful-tree

Author: Spontaneous Order

Published: 2010-01-20T16:33:31.000Z

Topics: school-choice, private-education, india-education

> The School Choice Campaign and Penguin Books launched Professor James Tooley’s new book “The Beautiful Tree-A Personal Journey into How the world’s Poorest People are Educating Themselves” in November 2009. The book highlights a wave of change swe

**Summary:**

This brief post announces the November 2009 launch of Professor James Tooley's book 'The Beautiful Tree: A Personal Journey into How the World's Poorest People are Educating Themselves' by the School Choice Campaign and Penguin Books. It highlights private schools run by community 'good samaritans' as an inspiring alternative to the government education system, emphasizing the aspirations of the poor and the enterprise of school owners in India's context from a classical-liberal school-choice perspective. The post is fragmentary and promotional rather than a full argument.

**Key points:**

- The book showcases private unaided schools serving the poor as a wave of change against government education.

**By Shreya**

* * *

[

![The Beautiful tree](https://substackcdn.com/image/fetch/$s_!LoID!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff7fa2f79-0da7-4aa4-8152-1dc4d4640c12_150x150.jpeg "http://www.amazon.com/Beautiful-Tree-Personal-Educating-Themselves/dp/1933995920")



](http://www.amazon.com/Beautiful-Tree-Personal-Educating-Themselves/dp/1933995920)

The School Choice Campaign and Penguin Books launched Professor James Tooley’s new book “**The Beautiful Tree-A Personal Journey into How the world’s Poorest People are Educating Themselves**” in November 2009.

The book highlights a wave of change sweeping the nation and the role of numerous small but inspiring private schools run by good samaritans from the communities themselves. The book tells us numerous stories of how the hope and aspirations of the poor and the enterprise of the new school owners come together to offer an alternative to the government education system.

* * *

**About Shreya**

## Road to Serfdom

Original: https://www.spontaneousorder.in/p/road-to-serfdom

Author: Spontaneous Order

Published: 2010-01-15T12:27:11.000Z

Topics: hayek, road-to-serfdom, central-planning, collectivism

> The Road to Serfdom is a book written by Friedrich von Hayek which transformed the landscape of political thought in the 20th century. The Road to Serfdom is among the most influential and popular expositions of classical liberalism and libertarianism....

**Summary:**

Shreya highlights Friedrich von Hayek's 'The Road to Serfdom' as a transformative 20th-century work that popularized classical liberalism and libertarianism, arguing that central planning dismantles free markets and inevitably leads to the destruction of individual economic and personal freedoms, culminating in tyranny. From a classical-liberal perspective, Hayek's central thesis warns that all forms of collectivism pave 'the road to serfdom,' with historical examples like the Soviet Union and Nazi Germany illustrating how such paths end in totalitarian oppression. Rather than reading the full book, Shreya recommends the illustrated version serialized in Look Magazine and distributed by General Motors, available via Mises.org, as an accessible way to grasp its main arguments. Wikipedia provides a reliable overview confirming Hayek's critique of collectivism's tyrannical tendencies. This post underscores the book's enduring relevance in advocating for free markets against centralized control.

**Key points:**

- Hayek's 'The Road to Serfdom' argues central planning destroys free markets and individual freedoms, leading to tyranny.
- All forms of collectivism tend toward tyranny, as seen in the Soviet Union and Nazi Germany.
- Read the illustrated version from Look Magazine, distributed by General Motors, for a quick grasp of the book's main arguments via Mises.org.

**By Shreya**

* * *

[

![](https://substackcdn.com/image/fetch/$s_!qUOw!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fd7fee887-5805-47ed-a148-966697566ff3_150x150.jpeg "The road to serfdom in cartoons")



](http://mises.org/books/TRTS/)

***The Road to Serfdom*** is a book written by [Friedrich  von Hayek](http://en.wikipedia.org/wiki/Friedrich_Hayek "Friedrich Hayek") which transformed the landscape of political thought in the 20th century.  *The Road to Serfdom* is among the most influential and popular expositions of classical liberalism and libertarianism.

Instead of reading the entire book you can get a pretty good idea of its main arguments  by reading  the [illustrated version of](http://mises.org/books/TRTS/) *[the Road to Serfdom](http://mises.org/books/TRTS/)* published in Look Magazine later distributed by the general motors.

Even though [Wikipedia](http://en.wikipedia.org/wiki/The_Road_to_Serfdom) isn’t the most reliable  resource it gives a good overview of the book. According to this resource – for Hayek this book talks of how “the road to serfdom” inadvertently set upon by central planning, with its dismantling of the free market system, ends in the destruction of all individual economic and personal freedom. Hayek’s central thesis is that all forms of collectivism tend towards tyranny, and he used the Soviet Union and Nazi Germany as examples of countries which had gone down “the road to serfdom” and reached tyranny.

* * *

**About Shreya**

## A Better India, A Better World

Original: https://www.spontaneousorder.in/p/a-better-india-a-better-world

Author: Spontaneous Order

Published: 2010-01-14T14:00:02.000Z

Topics: leadership, values, economic-reforms, infosys

> A Better India, A Better World In this extraordinarily inspiring and visionary book, N.R. Narayana Murthy shows us that an society working for the greatest welfare of the greatest number — samasta jananam sukhino bhavantu — must focus on two simple th

**Summary:**

This short post promotes N.R. Narayana Murthy's book 'A Better India, A Better World' as an inspiring vision for societal welfare aligned with 'samasta jananam sukhino bhavantu' (greatest welfare for the greatest number). It argues that progress requires focusing on two essentials: values and good leadership. The book draws lessons from the Infosys success story and two decades of post-reform India to outline ground rules ensuring future generations inherit a truly progressive nation, reflecting a classical-liberal emphasis on ethical leadership and market-oriented reforms.

**Key points:**

- Society must prioritize values and good leadership to achieve the greatest welfare for the greatest number.
- Lessons from Infosys and post-reform India provide ground rules for national progress.
- The book offers a visionary path to a better India and world through ethical and effective governance.

**By Shreya**

* * *

**A Better India, A Better World**

[

![](file:///C:/DOCUME%7E1/Shreya/LOCALS%7E1/Temp/moz-screenshot-1.jpg)



](file:///C:/DOCUME%7E1/Shreya/LOCALS%7E1/Temp/moz-screenshot-1.jpg)[

![](https://spontaneousorder.in/wp-content/uploads/2009/12/better-india1-e1262762319253-127x150.jpg "http://www.penguinbooksindia.com")



](http://www.penguinbooksindia.com/betterindiabetterworld/about-the-book.asp)

A better India, A better World

In this extraordinarily inspiring and visionary book, N.R. Narayana Murthy shows us that an society working for the greatest welfare of the greatest number — *samasta jananam sukhino bhavantu* — must focus on two simple things: values and good leadership. Drawing on the remarkable Infosys story and the lessons learnt from the two decades of post-reform India, Narayana Murthy lays down the ground rules that must be followed if future generations are to inherit a truly progressive nation.

* * *

**About Shreya**

## Are you a libertarian?

Original: https://www.spontaneousorder.in/p/are-you-a-libertarian-2

Author: Spontaneous Order

Published: 2010-01-11T10:56:09.000Z

Topics: libertarianism, political-quiz, political-ideology

> Most people confuse what it means to be a libertarian. Or for that matter a statist, leftist, rightist or Centrist. To understand at least one interpretation of what each of these terms and political ideologies mean you can visit http://www.theadvocate...

**Summary:**

This brief post highlights common confusion over political labels like libertarian, statist, leftist, rightist, or centrist due to varying philosophies by region and sector, and recommends the 'World’s Smallest Political Quiz'—a 10-question test on economic and personal issues—to clarify one's ideology and map it on the spectrum. It promotes the quiz as a simple way to understand these terms from a classical-liberal perspective.

**Key points:**

- Confusion arises from diverse interpretations of political ideologies varying by usage, region, and sector.
- Take the 10-question 'World’s Smallest Political Quiz' to gauge your stance on economic and personal issues.
- The quiz maps respondents to ideologies like libertarianism.

**By Shreya**

* * *

[

![](https://spontaneousorder.in/wp-content/uploads/2010/01/draw.php_2-150x150.png "World's smallest political quiz")



](http://www.theadvocates.org/quizp/index.html)

World’s smallest political quiz

Most people confuse what it means to be a **libertarian.** Or for that matter a **statist, leftist, rightist or Centrist**. The confusion arises as there are a large number of different philosophies associated with each of these terms that vary according to different usage, region and sector. As a rule, however, political philosophies can be rated in accordance one’s economic and personal views.

To understand at least one interpretation of  what each of these terms and political ideologies mean you can visit [http://www.theadvocates.org/quizp/index.html](http://www.theadvocates.org/quizp/index.html)

Not only does it explain the different ideologies but maps which ideology you adhere to. All you have to do is answer 10 questions on where you stand on some  economic and personal issues and you’ll get an approximate idea. Enjoy!

* * *

**About Shreya**

## Is compulsory voting democratic?

Original: https://www.spontaneousorder.in/p/is-compulsory-voting-democratic

Author: Spontaneous Order

Published: 2009-12-24T17:07:47.000Z

Topics: compulsory-voting, democracy, electoral-accountability, paternalism

> Recently the Gujarat government made voting compulsory in all local self government bodies. This contentious move, the first in the country, has led to an extensive debate with many supporters and sceptics battling around the constitutional and democrat..

**Summary:**

Shreya critiques Gujarat's pioneering mandate making voting compulsory in local self-government bodies, the first such move in India, amid debates on its constitutional and democratic validity. Drawing on Pratap Bhanu Mehta's op-ed, the post argues that criminalizing non-voting reflects 'undemocratic paternalism,' coercing citizens to overcome apathy through penalties, which undermines core democratic values of choice, legitimacy, equality, and genuine participation. It questions why governments prioritize forcing voter turnout while ignoring elected representatives' accountability, noting that 75% of MPs attend fewer than 16 days per parliamentary session. Rather than coercive measures, the author advocates holding officials responsible for attendance, participation, and performance, asserting from a classical-liberal viewpoint that effective governance would naturally incentivize voluntary voter engagement, fostering true civic duty without state-imposed fear or harassment.

**Key points:**

- Gujarat's compulsory voting in local bodies is India's first and has ignited constitutional debates.
- Compulsory voting criminalizes non-voting, embodying undemocratic paternalism that erodes choice and legitimacy.
- 75% of MPs attend fewer than 16 days per parliamentary session, highlighting unaddressed representative accountability.
- Effective performance by elected officials would boost voluntary voter participation over coercion.

**By Shreya**

* * *

Recently the Gujarat government made voting compulsory in all local self government bodies. This contentious move, the first in the country, has led to an extensive debate with many supporters and sceptics battling around the constitutional and democratic nature of such a decision.

[Pratap Bhanu Mehta](http://www.cprindia.org/onefac.php?s=97), president of Centre for Policy Research in his op-ed [Acts of Choice](http://www.indianexpress.com/news/acts-of-choice/557550/0) points to choice, legitimacy, equality and participation as the core parameters to judge the ruling. He rightly suggests that compulsory voting which in effect criminalizes non-voting reeks of the sentiment that people need to be saved from themselves (in this case of their own apathy) even if we have to do this by coercion and fear of penalties. This he says is ‘undemocratic paternalism’ besides also being grounds for harassment.

Since the government wants citizens to exercise their civic duty of voting, shouldn’t the citizens also hold the elected representatives responsible for fulfilling their duties? If we consider attendance in the assembly and parliament then what do we do with 75% MPs attending less than 16 days of a whole session in the parliament?  Attendance is one thing but participation and performance is more important.

If the elected representatives do their work then we suspect voters would also be interested in active participation.

* * *

**About Shreya**

## Lomborg on climate change economics

Original: https://www.spontaneousorder.in/p/lomborg-on-climate-change-economics

Author: Spontaneous Order

Published: 2009-12-21T19:51:04.000Z

Topics: climate-change-economics, geoengineering, energy-research, carbon-emissions

> Bjorn Lomborg provides an interesting new prism through which we can analyze the ongoing climate change debate. Dr Lomborg does not deny global warming though he does state that the climate change risk has been exaggerated. Irrespective of whether you a..

**Summary:**

Bjorn Lomborg, while acknowledging global warming, argues its risks are exaggerated and that carbon emission cuts—the focus of summits like Rio, Kyoto, and Copenhagen—are economically futile and too expensive. Climate economist Richard Tol shows every dollar spent on cuts yields just 2 cents in avoided damage, diverting funds from urgent needs like combating poverty, hunger, and disease among millions today, which Lomborg frames as poor economics from a classical-liberal lens prioritizing high returns. Instead, he proposes cheaper, more implementable alternatives: climate engineering like marine cloud whitening (spraying seawater droplets to reflect sunlight for cooling effects) and research into non-carbon energies such as nuclear, solar, water, and geothermal, potentially returning up to $11 in averted damage per dollar invested. This innovation-focused strategy promises better outcomes than regulatory emission mandates. Though critics call it oversimplified, Lomborg's cost-benefit approach offers a pragmatic shift from doomsday activism to effective action.

**Key points:**

- Carbon emission cuts yield only 2 cents of avoided climate damage per dollar spent, per Richard Tol.
- Such cuts divert resources from addressing immediate poverty, hunger, and disease.
- Prioritize climate engineering like marine cloud whitening to reflect sunlight and achieve cooling.
- Invest in non-carbon energy R&D (nuclear, solar, etc.) for up to $11 return per dollar in averted damage.
- Lomborg's economics-driven strategy is cheaper and more feasible than emission mandates.

**By Shreya**

* * *

[Bjorn Lomborg](<http://www.lomborg.com/ >) provides an interesting new prism through which we can analyze the ongoing climate change debate.

Dr Lomborg does not deny global warming though he does state that the climate change risk has been exaggerated. Irrespective of whether you agree with all the dooms day predictions of all the climate change activists in polar bear costumes in Copenhagen, Mr. Lomborg’s ideas related with climate change economics are innovative at the least.

Dr Lomborg argues that efforts towards cutting down carbon emissions which has been the central focus of the mostly unsuccessful Earth Summit in Rio, the Kyoto Protocol and now the Copenhagen Summit will not work. It will not work because carbon emission cuts are too expensive. This is not to say that we should not invest in mitigating climate change since its expensive. We should make the investment as long as we get good returns. Climate economist [Prof. Richard Tol](http://vu-nl.academia.edu/RichardTol/CurriculumVitae) shows that for every dollar spent on carbon emission cuts we buy only 2 cents worth of avoided climate damage. Investing money (badly) to tackle future possibilities of damage will take away from essential investment requirements in battling the acute poverty, hunger and disease for today’s millions. That is just bad economics!

Instead Dr Lomborg suggests a cheaper but equally effective option (cheaper and therefore more likely to be implemented). He suggests that we should focus on climate engineering and non-carbon energy research rather than cutting climate emissions.

Climate engineering includes research like marine cloud whitening – spraying sea water droplets to make them reflect sunlight. I personally do not know all the climatic implications of such a technology but if the preliminary findings of its possible cooling effects are to be believed, it’s definitely something which should be taken seriously. Also, investing in research to make alternate fuels like nuclear, water, solar and geothermal energy simple to use and cheap seems like the best way forward. Investing in non-carbon energy research can give us returns of up to 11 dollars of averted damage for every dollar invested!

Some of Dr Lomborg’s critics suggest that he has oversimplified an extremely complex problem. This maybe true but I think his ideas and fresh perspective on how we can move away from false promises towards significant action have value. Start exploring his ideas from this [interview](http://www.theglobeandmail.com/news/opinions/under-heat-climate-change-contrarian-wont-wilt/article1380438/).

* * *

**About Shreya**

## One India One people Interview

Original: https://www.spontaneousorder.in/p/one-india-one-people-interview

Author: Spontaneous Order

Published: 2009-12-19T15:09:00.000Z

Topics: education-reform, property-rights, economic-liberalization, public-sector-reform

> I recently gave an interview to One India One People magazine. Here is an excerpt on what I think are the three main reforms that need to be taken up on a urgent basis to bring about a positive impact on society: “Education reforms: As you may know majo

**Summary:**

Parth Shah, founder of Centre for Civil Society, outlines three urgent classical-liberal reforms in an interview excerpt: education restructuring, property rights enforcement, and advancing 1991 economic liberalization to limit government overreach and promote choice and competition. For education, where majority spending goes to government schools, he proposes per-child funding for equitable resource distribution and superior outcomes; greater autonomy for school authorities; performance pay to boost teaching and learning; contracting failing schools to third parties; and fully opening higher education to entry and competition with transparency and accountability requirements. On property rights, he emphasizes defining and enforcing rights for land, houses, tangible, and intangible assets, highlighting how lack of legal titles enables unfair exchanges and exposes the poor—tribals, small farmers, informal workers, street vendors—to state and corporate abuse, such as police seizing a vendor's goods. For economic reforms II, Shah urges questioning defunct Public Sector Units and ministries like Steel post-liberalization, and ending government involvement in sectors like hotels, jute mills, and bicycle factories that citizens can manage themselves. These measures aim to foster accountability, protect individual rights, and drive societal progress through market mechanisms.

**Key points:**

- Adopt per-child funding for public education to ensure equitable resources and better outcomes, alongside school autonomy, performance pay, and third-party contracts for failing schools.
- Fully liberalize higher education by allowing open entry and competition with transparency requirements.
- Define and enforce property rights for land, tangible, and intangible assets to protect the poor from state and corporate abuse.
- Extend 1991 economic reforms by eliminating unnecessary PSUs and ministries, like Steel, and government-run enterprises in hotels, jute mills, and bicycles.

**By Parth Shah**

* * *

I recently gave an interview to One India One People magazine. Here is an excerpt on what I think are the three main reforms that need to be taken up on a urgent basis to bring about a positive impact on society:

“**Education reforms**: As you may know majority spending on public education is done through government schools. I would propose an alternative model of funding allocation on a ‘per child’ basis which would ensure an equitable distribution of resources and invariably result in better outcomes. Greater autonomy to state school authorities, performance pay that encourage better teaching and learning outcomes, giving failing schools on learning achievement contracts to third parties are some other necessary reforms. The higher education sector should be completely opened up for entry and competition with the requirements of transparency and accountability from the providers.

**Define and enforce property rights**: We also need reforms to ensure property right in India—for land, tangible and intangible property. Even proper legal title for land and houses are not easily available giving rise to unfair exchange in these assets. The poor and marginalised people like tribals, small farmers and informal sector workers often lack clearly defined property rights and are therefore open to abuse by the state and the corporates. A street vendor’s basket of goods is taken away by the police because the state believes that she has no property right in her basket of goods.

**Economic reforms II:** The reforms that were started in 1991 need to be taken forward by limiting government involvement in activities that people can undertake themselves. We need to question the relevance of some of the Public Sector Units and also some ministries such as the Ministry of Steel which has become defunct since the liberalisation of the corresponding sectors. Do we need the government to run hotels, jute mills and bicycle factories?”

I hope you enjoy the rest of it: [http://www.oneindiaonepeople.com/](http://www.oneindiaonepeople.com/) They have a poor linking system, so go to current issue (Dec 2009) then Face to Face.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## School Choice National Conference Address

Original: https://www.spontaneousorder.in/p/school-choice-national-conference-address

Author: Spontaneous Order

Published: 2009-12-17T18:07:04.000Z

Topics: school-choice, school-vouchers, right-to-education, education-reform

> The Team CCS put together a great School Choice National Conference. The conference videos, photos, ppts are getting ready to go online, in the meanwhile you may read the opening talk i gave there. As often is the case, i enjoy more crafting the talk th..

**Summary:**

Parth Shah, founder president of Centre for Civil Society (CCS), opens the School Choice National Conference hosted by CCS's School Choice Campaign, which since 2007 promotes the 'Right to Education of Choice' for every child through efficient public fund use, equity, quality via diversity and liberalization, not uniformity. CCS employs a three-pronged approach: school vouchers, regulatory reforms, and encouraging edupreneurs. The campaign's mantra is 'Fund Students, Not Schools,' enabling full choice for all students—rich and poor—and competition among government, elite private, and budget private schools, empowering poor parents and compelling competition. Shah argues quality and choice are intertwined; given children's diverse learning needs, only a diverse education system meets them, and without parental choice, quality is undefinable and unattainable. He critiques the recent Right to Education Bill 2009 for endorsing choice by mandating 25% seats in private schools for economically weaker and disadvantaged government-sponsored students, yet ironically threatening to close budget private schools, thus removing choice for the remaining 75% of poor children. The conference aims to share best practices, ideate solutions, and formulate strategies to improve educational outcomes amid RTE implementation challenges, advancing choice-based education.

**Key points:**

- CCS's School Choice Campaign pursues school vouchers, regulatory reforms, and edupreneurship to deliver 'Right to Education of Choice' via diversity and competition.
- 'Fund Students, Not Schools' empowers poor parents with choice and forces all schools—government, elite private, budget private—to compete.
- Quality education requires parental choice and diverse delivery systems to match children's varied learning needs.
- RTE Bill 2009 reserves 25% private school seats for poor students but risks closing budget privates, limiting choice for 75% of poor children.
- Conference seeks best practices, innovative solutions, and strategies to enhance educational outcomes despite RTE contradictions.

**By Parth Shah**

* * *

The Team CCS put together a great [School Choice National Conference](http://schoolchoice.in/scnc2009). The conference videos, photos, ppts are getting ready to go online, in the meanwhile you may read the opening talk i gave there. As often is the case, i enjoy more crafting the talk than actually delivering it and there was time constraint and as a host i thought i should sacrifice my time, so i didn’t actually  gave the whole talk as written.

**Good morning!** It is my great honor to welcome you to the School Choice National Conference. It’s hosted by the School Choice Campaign of the Centre for Civil Society. CCS practices Social Change through Public Policy! We are a think tank that uses research and advocacy to improve policies in the areas of education, livelihood, and governance and also engages India’s youth through our New Ideas, New Leaders programs.

Almost to this week in 2001, we first brought together educationists, policy makers and national and international experts to explore problems and possible solutions for our education system. The outcome was **Education Choice Campaign**! In 2007 we began to focus fully on school education through the **School Choice Campaign**. The mission of this Campaign is to ensure the **Right to Education** of **Choice to every child** by promoting the efficient use of public funds and encouraging equity and quality through diversity and liberalization rather than uniformity. We follow a three pronged approach: **School vouchers, Regulatory Reforms** and **Encouraging Edupreneurs**.

The mantra of the Campaign is **Fund Students, Not Schools**! It means full choice and open competition: Choice not just for richer students and competition not just among elite private schools for these richer students. But choice for all students, rich and poor, and competition among all schools, government, elite private and budget private. School vouchers empower poor parents to exercise choice and compel schools to compete even for their children.

The core concern now is quality of education. Quality and choice are two sides of the same coin.  Given the tremendous diversity among children, particularly in the ways they learn, only diversity and not uniformity in education delivery system can meet the needs of each child. So quality is intrinsically linked to choice. Without parental choice, it’s difficult to define or attain quality.

The recent passage of the **Right to Education Bill 2009** is a momentous event. The RTE Bill endorses the idea of school choice by reserving 25% seats in all private schools for government sponsored students from economically weaker and socially disadvantaged sections.  Ironically, having given choice to 25% of the poor, it threatens to take away choice from the remaining 75% of the poor by closing down budget private schools. With these internal contradictions, proper implementation of RTE is a monumental challenge. That is the challenge we are taking up in this conference.

I really hope that before the end of the day we would have shared best practices and experiences, ideated on innovative solutions and finally formulated a strategy to improve educational outcomes in India.

For the Right to Education of Choice!

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Street Vendors Policy: Recommendations from Roundtable

Original: https://www.spontaneousorder.in/p/street-vendors-policy-recos-from-roundtable

Author: Spontaneous Order

Published: 2009-12-15T17:39:10.000Z

Topics: street-vendors, urban-policy, economic-freedom, policy-implementation

> The outcome of Policy Roundtable with MPs organized by Centre for Civil Society on 18 Nov 2009, Delhi: Set up Central Empowered Committee: We recommend Central Government to set up a ‘Central Empowered Committee’ to help Governments of all the States,

**Summary:**

The Centre for Civil Society's 2009 policy roundtable with MPs recommends establishing a Central Empowered Committee (CEC) to facilitate effective implementation of the National Urban Street Vendors Policy 2009 across states, union territories, and local authorities. From a classical-liberal perspective emphasizing economic freedom and reduced state harassment, the CEC should perform key functions: issuing gazette orders with timelines for departmental compliance; collaborating on state-level 'Street Vending' bills using the Ministry of Housing and Urban Poverty Alleviation's 2009 model bill; empanelling experienced NGOs for productive engagement; aiding formation of participatory Town Vending Committees (and Ward Vending Committees in major cities like Mumbai, Kolkata, Chennai, Hyderabad, and Bangalore); conducting workshops on space management and demarcation; organizing annual national conferences for municipal commissioners, mayors, and police with progress reports and an annual journal; and spreading vendor awareness via mass media akin to Right to Information campaigns. Additionally, exempt street vendors from Sections 283 and 431 of the Indian Penal Code and Section 34 of Police Acts to prevent misuse for harassment, promoting vendor livelihoods and regulatory clarity.

**Key points:**

- Establish a Central Empowered Committee to facilitate states, union territories, and local authorities in implementing the 2009 National Urban Street Vendors Policy.
- Direct states to issue gazette orders and draft vending bills based on the 2009 model bill from the Ministry of Housing and Urban Poverty Alleviation.
- Empanel NGOs, form participatory Town and Ward Vending Committees in big cities, and hold workshops on space management.
- Organize annual national conferences and awareness campaigns using mass media to track progress and inform vendors.
- Exempt street vendors from IPC Sections 283 and 431 and Police Act Section 34 to curb harassment.

**By Parth Shah**

* * *

The outcome of Policy Roundtable with MPs organized by Centre for Civil Society on 18 Nov 2009, Delhi:

**Set up Central Empowered Committee:** We recommend Central Government to set up a ‘Central Empowered Committee’ to help Governments of all the States, Union Territories and Local Authorities to ensure effective implementation of the National Urban Street Vendors Policy 2009. The Committee should work as a facilitating organization to Governments of the States, Union Territories and Local Authorities to deal with the obstacles faced in the implementation of the policy. Here are a few major functions that we recommend the Empowered Committee to take up:

1.  Facilitating the Governments of all the States and Union Territories to issue a Gazette Order to implement the policy in the respective States and Union Territories. The Gazette Order should give necessary directions to all concerned departments to implement the policy effectively within a time frame.
    
2.  Since the National Policy serves only as a guideline, we strongly recommend the Empowered Committee to work with the Governments of all the States and Union Territories to come up with a ‘Bill on Street Vending’ in their respective States and Union Territories. The Governments of all the States and Union Territories can follow the ‘Model Street Vendors (Protection of Livelihood and Regulation of Street Vending) Bill 2009’ which has already been drafted by Ministry of Housing and Urban Poverty Alleviation, New Delhi.
    
3.  Empanel reputed and credible NGOs and other professional institutions having experience of working on the issues of Street Hawkers and Vendors. We recommend the Central Government to issue guidelines mentioning various ways in which such NGOs and other professional institutions can be engaged in a productive way.
    
4.  Facilitating Local Authorities to form Town Vending Committees on the basis of participatory and democratic values. The Empowered Committee can organize workshops to address the obstacles faced by the Authorities. We also recommend formation of several ‘Ward Vending Committees’ in case of big cities such as A1 and A class cities which includes Mumbai, Kolkata, Chennai, Hyderabad, Bangalore etc rather than having only one Town Vending Committee for the entire city.
    
5.  Facilitating Governments of all the States and Union Territories various ways to deal with crucial issues regarding the effective implementation of the policy such as space management and demarcation of land etc. Regarding this the Empowered Committee can organize workshops etc. for implementing authorities.
    
6.  Facilitating Annual National Conference for all the Municipal Commissioners, Mayors and Police Authorities to discuss the steps taken by them and to present the progress report and the problems faced regarding implementation of the policy. It can also come with Annual Journal documenting success and showcasing the changes on ground.
    
7.  Spreading awareness among the vendors about the ‘National Urban Street Vendors Policy 2009’. Various tools of mass media such as Television, Radio programs etc. should be used for this as being done in the case of Right to Information.
    

**Exemption of Street Entrepreneurs under the Section 283 and 431 of Indian Penal Code and Section 34 of Police Act:** It has been noticed by organizations and institutes working with Street Vendors that authorities have not been use some sections of the law, specifically section 283 of Indian Panel Code and Section 34 of Police Act, in the same spirit with which they have been formed.  They instead use them as weapons to harass Street Vendors. We recommend Central Government to modify section 283 of Indian Panel Code and work with Governments of all the States and Union Territories to exempt Street Vendors under different sections of State Police Acts.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Dubai Debacle: Role of Credit Rating Agencies

Original: https://www.spontaneousorder.in/p/dubai-debacle-role-of-credit-rating-agencies

Author: Spontaneous Order

Published: 2009-12-14T21:23:29.000Z

Topics: credit-rating-agencies, financial-regulation, issuer-pays-model, free-markets

> Market responds to a large number of signals emanating from an equally large number of sources and the soundness of the market depends a lot on the reliability of these signals themselves. One of the important signals that market participants rely heavi..

**Summary:**

Credit rating agencies (CRAs) provide crucial market signals through simple letter grades assessing creditworthiness, but their failures in the sub-prime crisis—where overly optimistic ratings of mortgage-backed securities fueled the boom and bust—and the recent Dubai World debacle highlight deep flaws. Dubai World's announcement of inability to repay part of its $59 billion debt prompted Moody’s and Standard & Poor’s to downgrade related entities, raising questions about why CRAs react only post-crisis, suggesting either incompetence or collusion. From a classical-liberal viewpoint, this is not a market failure but a consequence of government regulations. Prof. Lawrence J. White shows how regulators granted monopoly privileges to the 'big three' (Moody’s, S&P, Fitch), shifting CRAs from an 'investor-pays' model (pre-1970s, via rating manuals) to 'issuer-pays,' creating conflicts where agencies inflate ratings to retain borrower clients and deter competition. This regulatory distortion killed innovation and reliability. The solution lies in deregulating to unleash the 'invisible hand,' fostering a competitive, conflict-free ratings industry that delivers accurate signals spontaneously.

**Key points:**

- CRAs failed by overrating sub-prime mortgage-backed securities and reacting late to Dubai World's $59 billion debt crisis.
- Regulatory decisions created a non-competitive oligopoly of Moody’s, S&P, and Fitch by granting monopoly privileges and barriers to entry.
- The shift to an 'issuer-pays' model in the 1970s introduced conflicts of interest, incentivizing inflated ratings to please borrowers.
- Policymakers should remove regulations to enable market-driven competition and innovation in credit ratings.

**By Kumar Anand**

* * *

Market responds to a large number of signals emanating from an equally large number of sources and the soundness of the market depends a lot on the reliability of these signals themselves. One of the important signals that market participants rely heavily on while choosing their investment avenues is the rating of financial institutions and their debt instruments by the Credit Rating Agencies (CRAs). CRAs do a great service by going through all the complex financial details of a company and other affecting variables and making available the credit worthiness of the corporations and governments in the form of simple letter grades, e.g., AAA, AA, A, BBB, BB, B, etc. Based on their financial knowledge and market research, these rating agencies upgrade, downgrade or keep the status unchanged of various instruments and institutions periodically.

However, the recent financial meltdown suggests that these CRAs have failed to do their jobs satisfactorily. An unwarranted higher rating of the mortgage backed securities by these agencies was one of the prime reasons that fuelled the sub-prime boom and sustained it for a long time, before it inevitably burst last year sending out shock waves whose tremors are felt even today. The poor quality of the ratings assigned to these mortgage backed securities became apparent once the mortgage holders began to default on their loans.  It has been a long and arduous journey back to normalcy; however the recent global events do not inspire much confidence.

Events in the past week suggest that Dubai has managed to escape the fall from the edge of financial disaster cliff, at least for now. However, the Dubai World might not be out of woods yet. This episode is only a stark reminder that the global financial meltdown is not over yet. The Dubai debacle became public only when the Dubai World informed that they would not be able to repay a part of their $59 billion debt by its December deadline. Both Moody’s and Standard and Poor’s have responded by heavily downgrading the debt of various Dubai government related entities. Why is it that the downgrading of the financial institutions and instruments are carried out only when the institutions themselves declare bankruptcy? These events only suggest that either the CRAs have failed to assess the credit worthiness of their clients or are hands-in-gloves with the very institutions they are supposed to keep a close watch on.

The operations of these CRAs also give the impression that their credit ratings themselves are based on the speculative euphoria of the market, providing high ratings when the market is doing well and downgrading the very same instruments and institutions when the meltdown starts.

Do these events signify that the markets have failed in one of the most important tasks of maintaining a close watch on the credit worthiness of the borrowers?

Prof Lawrence J. White of the New York University’s Stern School of Business, thinks otherwise. Through his study of the CRAs historical development Prof White demonstrates that, regulatory decisions over several decades facilitated the development of a non-competitive credit rating industry by assigning monopoly privileges to a few major agencies.

He explains in his work that how the credit industry began with the business model of “investor pays” wherein the bond investors used to buy the bond ratings contained in thick rating manuals and by early 1970s this model was abandoned by the rating agencies for the “issuers pay” model. This change of business model gave rise to conflict of interests. Now the customer of these agencies changed from the investors to the borrowers and in their quest to satisfy their new consumers, the rating agencies have the obvious incentive to upgrade the ratings to keep their customers from taking their business to their competitor. Prof White also demonstrates how the actions of the regulating agencies gave rise to the ratings market dominated by the big three (Moody’s, S&P and Fitch) and made the entry of new entrepreneurs difficult, thereby killing all the possible innovation and competition in the ratings industry.

Therefore, we observe that one of the most important signals was distorted and the information it carried was motivated or at best unreasonable. The most important task for the policy makers in this field is the creation of an environment where the rating agencies can do their job competitively, innovatively and without any conflict of interest. And this task can only be carried out by the “invisible hand” of the market, when it is left alone to operate spontaneously.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Education policies for the most disadvantaged

Original: https://www.spontaneousorder.in/p/education-policies-for-the-most-disadvantaged

Author: Spontaneous Order

Published: 2009-12-11T00:00:20.000Z

Topics: education-policy, affordable-private-schools, school-vouchers, government-failure

> In spite of serious shortcomings in our education policy, the poorest parents are finding ways to access quality education of their choice. In a phenomenon that is increasingly finding favour among the urban poor, ‘affordable private schools’ are mush

**Summary:**

Affordable private schools are thriving in Indian slums, serving the urban poor who have abandoned inadequate government schools due to poor accountability and performance. In North Shahdara slums of New Delhi, where many live on less than $2 a day, 175 of 265 schools are privately managed without government aid, charging $2–$3 per month. Teacher involvement is 70% in these private unaided schools versus 38% in government schools. Among 3500 tested students, private school pupils scored 72% higher in mathematics, 83% higher in Hindi, and 246% higher in English, even after controlling for background variables; pupil satisfaction with facilities and punctuality is also higher. This success defies conventional wisdom and showcases enterprise solutions outperforming bureaucratic public provision. Influential voices like economist Swaminathan Aiyar propose school vouchers redeemable at government or private schools for disadvantaged communities as affirmative action. Tavleen Singh criticizes the 'license-quota-permit raj' and regulatory barriers limiting school supply for the poor. Madhav Chavan advocates per-child funding norms based on learning outcomes rather than teacher payrolls. The post urges policy reforms to recognize this evolving landscape and enable parental choice over failed government monopolies.

**Key points:**

- Affordable private schools in Delhi slums charge $2–$3 monthly, have 70% teacher involvement versus 38% in government schools, and deliver superior student learning outcomes.
- Private unaided schools comprise 66% of schools in surveyed Delhi slums, thriving without government recognition or aid due to parental demand.
- Swaminathan Aiyar recommends school vouchers for disadvantaged groups to fund education at chosen public or private schools.
- Tavleen Singh calls for dismantling the bureaucratic 'license-quota-permit raj' that restricts quality school supply for the poor.
- Madhav Chavan proposes shifting to per-child expenditure norms tied to learning outcomes instead of teacher-based funding.

**By Manuraj**

* * *

In spite of serious shortcomings in our education policy, the poorest parents are finding ways to access quality education of their choice. In a phenomenon that is increasingly finding favour among the urban poor, ‘affordable private schools’ are mushrooming in slums and lower class neighbourhoods across the country. Prof James Tooley talks about the impact of these schools on the urban poor, who have ‘already abandoned public education’ – because of its inadequacies and lack of accountability – and are using private schools instead.

When Tooley surveyed North Shahdara slums of New Delhi, where a large number of people live on less than $2 a day, he found that 175 of the 265 schools were under private management and received no government aid.  The average fees charged by these schools were approximately $2 – $3 per month. The reason that such schools were successfully thriving, despite almost half not being ‘recognised'\[1\] by the government, is explained by the comparison of teacher performance. In government schools, Tooley reports that only 38% of teachers were involved in teaching activity compared to around 70% in private unaided schools. Another key finding from the same study is that of learning achievements levels among students. When 3500 students were tested and controlled for a range of background variables, the private school students scored on average 72% higher marks in mathematics, 83% higher in Hindi and 246% higher in English. Satisfaction with school inputs (school buildings, facilities, teacher punctuality) among pupils in private schools was found to be higher than their government school counterparts\[2\].

**Changing Public Opinions**

Despite the fact that a significant proportion of private schools are not officially recognised by the government, the increasing participation of urban poor in such schools defies conventional wisdom. The success of such schools is driving one of India’s fastest growing sectors – school education– demonstrates the triumph of enterprise solutions over bureaucratic inefficiencies in the provision of public goods. There is a growing band of intellectual and influential voices that is now backing large scale changes in education policies to factor in the evolving landscape. In a recent article, renowned economist and *Times of India* Editor Swaminathan Aiyar suggests that the government provide school vouchers\[3\], which are ‘redeemable only for expenses in a government or private school’, to historically disadvantaged and discriminated communities as an affirmative action tool. Columnist and political commentator with the *Indian Express*, Tavleen Singh has pointed out the inadequacies perpetrated by the government regulatory system that are barricading the access of poor students to quality education\[4\]. Ms Singh argues that the dearth of good schools in India is due to the ‘license-quota-permit raj’ (regime of bureaucratic licensing) and the unholy alliance between political players and education providers resulting in a basic supply-demand theory being played out in the market of education providers and eager students. Another policy reform idea of providing per-child funding has also been mooted to improve funding in education. At the moment, government funding in education is largely dependent upon the teachers on the payroll rather than the number of students. Madhav Chavan, Chairman of NGO Pratham, has demanded that the government set per-child expenditure norms in the annual budget allocation and assess learning outcomes. However, the government continues to drive the vehicle of failed public policies away from the path of meaningful change.

* * *

\[1\] To gain government recognition, schools need to undergo a cumbersome, bureaucratic and non-transparent application process for certification akin to ‘education license’ that assesses the essentiality of the school in that neighbourhood

\[2\] http://www.ccsindia.org/pdf/Delhi-Report-Tooley-new.pdf

\[3\] [http://timesofindia.indiatimes.com/Opinion/Columnists/Back-to-school-An-open-letter-to-Kapil-Sibal/articleshow/4653435.cms](http://timesofindia.indiatimes.com/Opinion/Columnists/Back-to-school-An-open-letter-to-Kapil-Sibal/articleshow/4653435.cms)

\[4\] [http://www.indianexpress.com/news/first-free-education-from-licence-raj/482238/](http://www.indianexpress.com/news/first-free-education-from-licence-raj/482238/)

* * *

**About Manuraj**

## Global Financial Crisis: A Perspective from India

Original: https://www.spontaneousorder.in/p/global-financial-crisis-a-perspective-from-india

Author: Spontaneous Order

Published: 2009-12-10T22:55:16.000Z

Topics: global-financial-crisis, indian-economy, fiscal-stimulus, economic-resilience

> In the last two years we’ve heard a lot about the global financial crisis. Two years hence we now need to ask how the global financial crisis effected India and why? The global financial crisis effected India in one way and in a another way it did not.

**Summary:**

The 2008 global financial crisis adversely impacted India through a 12.1% year-on-year export drop in Q2 2008—the first in seven years—straining the textile sector (17% of exports), a $12 billion foreign institutional investment outflow hitting stocks, and credit shortages affecting SMEs, infrastructure, real estate, and IT reliant on banking. Despite this, India achieved ~6% growth across three quarters post-2007-08's 9%, exceeding World Bank's 4% forecast for 2009, with over-borrowed corporates surviving sans bailouts and stocks rebounding from 8,160 (March 2009) to 17,223 (October 2009), drawing $1 billion inflows in May 2009. Resilience stemmed primarily from banks avoiding toxic US mortgage-backed securities and credit default swaps, high forex reserves cushioning outflows, well-capitalized firms, stable remittances and FDI, and unaffected public/private banks preserving payments. Government responses included RBI rate cuts, rupee depreciation (Rs40-52/$), eased borrowing, excise duty cut, and three stimulus packages (~$204B budget) funneled to rural schemes like NREGS, PMGSY, JNNURM—sectors minimally hit—raising doubts on fiscal stimulus efficacy amid forward/backward linkages. From a classical-liberal lens, structural market strengths, not expansive deficits, blunted the crisis; future safeguards demand probing crisis roots.

**Key points:**

- India's exports fell 12.1% in Q2 2008 due to global demand drop, hitting textiles hardest.
- India sustained 6% growth post-crisis, outperforming forecasts, thanks to avoidance of toxic assets and strong reserves.
- Fiscal stimulus targeted rural/infrastructure sectors largely unaffected by crisis, questioning its causal role in recovery.

**By Shreya**

* * *

In the last two years we’ve heard a lot about the global financial crisis. Two years hence we now need to ask how the global financial crisis effected India and why?

The global financial crisis effected India in one way and in a another way it did not. We begin with the adverse affects. Exports, investment and capital flows took a direct hit in the country. Due to a marked decrease in global demands for goods and services, for the first time in 7 years, exports in India fell 12.1% year-on year for the second quarter in 2008. The textile industry which accounts for 17% of India’s exports also showed considerable strain resulting in retrenchment of workforce. A marked drop in the foreign institutional investment by $12 billion from the stock market directly hit the Indian stock exchange. The sudden vanishing of financial credit mostly affected the small and medium enterprise sectors, infrastructural development projects and real estate. The IT sector was also badly affected as IT sector’s revenue depends heavily on banking and financial institutions.

Even though India was adversely impacted by the financial crisis, it still faired much better in comparison to most countries around the world. As opposed to the 9% growth rate in 2007-08, India managed a growth rate of close to 6% in the last three financial quarters. Even though this is a significant drop, it has far exceeded the World Bank’s forecast of 4% growth for 2009. Even those corporates in India which had over-borrowed have mostly survived the crisis without the need for government bail-out.  India’s resilience in the face of the crisis led to foreign investors returning to the Indian markets at the rate of close to $1 billion in May 2009. India’s stock market recovered in the last six months from the level of 8,160 on March 9, 2009 to 17,223 on October 20, 2009. This recovery definitely indicates a climate of growing confidence in the Indian markets even though some people suggest that the surge is on account of a speculative rush rather than a boom in Indian Industry.

How is it that India was able to successfully tackle the crisis? India’s resilience in the face of the financial crisis can be attributed to a number of reasons of which only some can be put on account of the fiscal and monetary measures taken by the government in response to the crisis.

The primary reason for the limited impact of the financial crisis was that banks and financial institutions in India did not invest in mortgage-backed securities and credit default swaps that turned toxic when the housing bubble in the US collapsed. When the crisis hit the Indian economy, our high foreign exchange reserve helped avoid panic when foreign investors left the country. Most companies were well-capitalized and had not over-borrowed and therefore were able to weather the crisis. Both public and private banks remain mostly unaffected and so there was no threat to the basic payment system of India requiring massive rescue missions common in US and other countries. Remittances from abroad continued as before and the long term foreign direct investment further helped stabilize the economy.

The government in response to the crisis also took some steps that undoubtedly blunted the affects of the crisis. The government made the monetary policies more accommodating with the Reserve Bank of India slashing main policy rates so that banks don’t suffer from capital adequacy constraints and are able to expand credit availability and increase liquidity. With a decrease in interest rates the value of the rupee was allowed to fall from Rs. 40 to Rs 52 to the dollar. The foreign borrowing rules for firms in infrastructure and real estate sectors were also eased and a 4% cut was made in excise duty.

To kick start the economy India has also announced three stimulus packages since December 2008. As suggested by the current Union Finance Minister, Pranab Mukharjee, these packages will be continued till global recovery. The packages guarantee funding to revive the sectors of power, housing, export, automobiles, textiles and small and medium enterprise sectors and infrastructure sectors. The major proportion of this stimulus package along with funds allocated towards public expenditure in the $204 billion national budget presented in July 2009 was allocated to critical rural, infrastructure and social security schemes such as the National Rural Employment Guarantee Scheme (NREGS), Pradhan Mantri Gram Sadak Yojana (PMGSY) and the Jawaharlal Nehru National Urban Renewal Mission (JNNURM).

This fiscal stimulus which led to the expansion of the fiscal deficit beyond the originally targeted levels has been widely accepted as a solution to the financial crisis. However, the extent of the contribution of the fiscal stimulus in tackling the crisis remains suspect. The fiscal stimulus packages as suggested above have mainly been allocated in rural, infrastructure and social security schemes, that is, in those sectors which were not really badly hit by the crisis. Even though there are a number of forward and backward linkages between these sectors and those sectors actually affected by the crisis—IT, call centres and BPOs and exports—the economic recovery in these areas can hardly be attributed to the stimulus packages.

Even though India was able to successfully tackle the crisis this does not mean that we will necessarily be able to do so in the future unless we ask ourselves broader questions on why the crisis happened in the first place and what we can do to safeguard against it.

* * *

**About Shreya**

## Right to Education: Promises and Pitfalls

Original: https://www.spontaneousorder.in/p/right-to-education-promises-and-pitfalls

Author: Spontaneous Order

Published: 2009-12-08T15:07:05.000Z

Topics: rte-act, education-quality, budget-schools, decentralization, school-choice

> The Right of Children to Free and Compulsory Education Bill ( RTE Bill)’s implementation is fraught with major challenges. Right to Quality Education: Assessments and Learning Outcomes The recent suggestion by the Hon’ble Minister to set up an indepen

**Summary:**

The RTE Bill guarantees a right to schooling rather than quality education, lacking mechanisms for assessing learning outcomes despite references to 'good quality elementary education' in Sections 8, 9, and 29. It prohibits holding back students or standardized exams until elementary completion, preventing identification of learning gaps and remedial support; the author advocates an independent National Institute for Learning Achievement to evaluate school-wise performances from Class 3 and set standards for government schools. Section 12 mandates 25% reservation for economically weaker sections in private schools without fair compensation, questioning the basis of 'per-child expenditure' and suggesting alignment with costs of high-performing government schools like Kendriya Vidyalaya. Section 19 threatens harsh penalties for unrecognized budget schools serving the poor, which charge nominal fees and enjoy parental trust; instead, government should partner with NGOs and private actors, as suggested by former MHRD Director Amit Kaushik. School Management Committees under Section 21 promote decentralization but remain toothless, needing greater devolution for parental involvement and social auditing. Rushed parliamentary debate (12 hours) overlooked these issues; government must engage stakeholders to fix quality, financing, inclusion, and decentralization pitfalls from a classical-liberal lens prioritizing choice, performance, and non-state innovation.

**Key points:**

- RTE Bill ensures graduation without learning assessments; establish National Institute for Learning Achievement for independent school-wise evaluations from Class 3.
- Mandate fair per-child reimbursement for 25% EWS quota in private schools, benchmarked to high-performing government schools like Kendriya Vidyalaya.
- Relax penalties on budget schools serving the poor and partner with NGOs/private entities to run state schools on existing budgets.
- Empower School Management Committees with real decision-making powers for decentralization, parental involvement, and social auditing.

**By Manuraj**

* * *

The Right of Children to Free and Compulsory Education Bill ( RTE Bill)’s implementation  is fraught with major challenges.

**Right to** ***Quality*** **Education: Assessments and Learning Outcomes**

The recent suggestion by the Hon’ble Minister to set up an independent accreditation body for schools is a welcome move, as this would inform and empower the parent to make the right choice of schooling. However, the RTE Bill is strikingly quiet on the important issue of learning achievements. In fact, the current bill guarantees a Right to Schooling but not a Right to Education. In particular, three sections (Sections 8, 9 and 29) specifically talk about ‘good quality elementary education’ and ‘child’s understanding of knowledge’, but fail to provide institutional mechanisms to ensure quality or assess learning. In other words, it guarantees graduation but not learning. In order for every child to be assured education of a standard quality, the implementation of RTE bill needs to focus on a regular, independent evaluation mechanism. Recommendations of this nature were made by the National Advisory Council, under the Chairpersonship of Sonia Gandhi in February 2006, suggested that the legislation address this issue by the “setting up of National Testing Standards, which can be used to assess children at different levels” and “independent testing agencies to be set up at the national and state levels.” However, the RTE bill guarantees graduation, rather than ensuring education.

The RTE bill disallows any child to be held back or conducting standardized examinations until completion of elementary education. Though such a provision would provide a trauma-free educational experience, there would be no assessment of learning achievements, thus making it impossible to identify the learning progress of different students and making available any remedial assistance for those who need it. This could be addressed by setting up an independent body – National Institute for Learning Achievement – that would study and assess the school-wise academic performances of students (from Class 3 upwards) across the nation. The results from this study could help in setting the standards of learning achievements which can then be prescribed to government and government-aided schools, thus making them performance-oriented. Schools could then be directed to work towards improving individual learning achievements.

**Financing Inclusive Education**

In Section 12 of the RTE bill, the government directs the inclusion of students from Economically Weaker Sections, but without setting reasonable terms of compensation to the schools. Summing up the inconsistencies in the section, Madhav Chavan (Chairman, Pratham) has the following question for the government: “What is the basis of calculation of the “per-child expenditure” that the government will pay to unaided private institutions for admitting the 25% children from weaker sections?” In fairness, the government should at least pay private schools in line with the quality of facilities offered or the equivalent per-child expenditure that it occurs in its own high-performing government schools (such as Kendriya Vidyalaya, Sainik School, etc).

**Schools that Serve the Poor**

An increasing number of schools being run from lower class neighbourhoods are educating the most disadvantaged students in urban areas. Charging a nominal fee, these ‘Budget Schools’ cater extensively to children from economically weaker backgrounds. The growing popularity, amongst poor parents, of such schools in slums and weaker sections of the society has confirmed their acceptability and credibility. Moreover, State Governments across India have been working with many such schools, typically run by Non-Governmental Organisations and Not-for-Profit Trusts, to reach out to the most vulnerable children. Provisions under Section 19 of the RTE Bill threatens harsh penalties for schools that fail to gain recognition within three years. This is too severe a penalty when one takes note of the invaluable, pro-poor and community-oriented service rendered by such schools. Instead, the government should explore avenues to work with such schools to ensure greater access to education for those who are less fortunate amongst us.

Amit Kaushik, former civil servant who was Director MHRD (2001 – 2006), while speaking about the role of non-state actors in education earlier this year raises caution on this issue:

“There are a large number of NGOs and private organisations engaged in school education in India today.” “.. NGOs and the private sector could be invited to take over and run State schools on existing budgets.”

**Decentralization and Decision Making**

The Seventy-Third Amendment to the Constitution that requires greater transfer of decision making powers to the third tier of governance, namely panchayats and local government bodies. The formation of School Management Committees, as outlined by Section 21, is a welcome step in this direction and is commendable for mandating the constitution of the Committees to include parents and women representation. Despite such provisions, the School Management Committees are by and large toothless bodies whose functions are to develop School Development Plans and monitor the utilization of grants. By doing so, the government has retained a highly centralized and bureaucratic structure which will not address any of the endemic problems in the system. Greater devolution of powers is required to strengthen parental and community involvement in management of schools and create a social auditing process.

The government now embarks on an uphill journey to establish neighbourhood schools, ensure quality benchmarks, include disadvantaged students and enable community participation. By rushing through the discussion on RTE in Parliament – all of 12 hours in both Houses – the government has swept some of the serious concerns on quality, financing, inclusion and decentralization under the bureaucratic carpet.

Now, is the time for the government to take stock of the potential threats and prepare for a concerted and coordinated effort that brings together all stakeholders and addresses teething concerns.

* * *

**About Manuraj**

## All Quiet on the Western Front (1930)

Original: https://www.spontaneousorder.in/p/all-quiet-on-the-western-front-1930

Author: Spontaneous Order

Published: 2009-12-07T13:51:27.000Z

Topics: anti-war, world-war-i, war-profiteering, public-choice

> All Quiet on the Western Front is a 1930 epic war film that narrates the tale of World War I as viewed from the eyes of German soldiers. The horrors of war have been beautifully captured and give a heart-rending account of the war and the lives destroye..

**Summary:**

Kumar Anand reviews the 1930 film 'All Quiet on the Western Front,' an anti-war epic depicting World War I from German soldiers' perspective, emphasizing how war destroys a generation even among survivors. Protagonist Paul Baumer and classmates enlist enthusiastically after a jingoistic teacher's patriotic lecture, but battlefield horrors—bombs, deaths, wounds—shatter illusions, prompting soldiers to question war's origins and beneficiaries. In key dialogues, they dismiss national offenses as absurd, blaming emperors needing fame, generals, and manufacturers who profit, while ordinary people like themselves want no part. Veteran Katczinsky proposes roping off a field for leaders in underpants to fight with clubs, letting the best country win—a satirical classical-liberal jab at elite-driven conflicts harming the masses. On furlough, Paul contrasts front-line realities with his town's ignorant patriotism and his teacher's recruitment of new youths, returning early in disgust. The film, a double Oscar winner for Best Picture and Director—the first talkie war film to do so—is AFI's seventh-best epic, recommended for highlighting individual tragedies over state glorification of war.

**Key points:**

- The film portrays naive youths enlisting on patriotic waves, only to face war's disillusioning horrors.
- Soldiers debate war's instigators, pinpointing emperors, generals, and manufacturers as beneficiaries while masses suffer.
- Katczinsky satirically suggests leaders personally fight conflicts to spare ordinary people.
- Paul's hometown visit reveals civilian ignorance fueling endless recruitment of untrained replacements.
- Anand praises the film as a top anti-war classic exposing war's destruction of individuals.

**By Kumar Anand**

* * *

[All Quiet on the Western Front](http://en.wikipedia.org/wiki/All_quiet_on_the_western_front) is a 1930 epic war film that narrates the tale of World War I as viewed from the eyes of German soldiers. The horrors of war have been beautifully captured and give a heart-rending account of the war and the lives destroyed by it, even when one is lucky enough to survive the bullets. The essence of the film is best captured by the first title card of the film…

*“This story is neither an accusation nor a confession, and least of all an adventure, for death is not an adventure to those who stand face to face with it. It will try simply to tell of a generation of men who, even though they may have escaped its shells, were destroyed by the war…”*

In the beginning of the film, the protagonist of the film Paul Baumer (played by Lew Ayres) and his friends are seen as a bunch of student who gets aroused by the lecture of their jingoistic school teacher and enlists in the Army to “save the fatherland” riding high on the patriotic wave and totally unaware of the horrors that are in store for them. Once on the battlefield, the rosy picture of war as painted by the teacher and all the tales of patriotic duty and bravery begins to fade as they try to survive bombs and bullets flying by and see their friends wounded, paralyzed and dead. The horrors and realities of war force them to question the wisdom behind such a ghastly act.

The following conversation between the surviving soldiers soon after the first round of battle displays the naiveté of the soldiers who fight the war for their political masters, for reasons they are totally oblivious and unsure of.

***Albert Kropp**: Ah, the French certainly deserve to be punished for starting this war.  
**Detering**: Everybody says it’s somebody else.  
**Tjaden**: Well. how do they start a war?  
**Albert Kropp**: Well, one country offends another.  
**Tjaden**: How could one country offend another?  
**Tjaden**: You mean there’s a mountain over in Germany gets mad at a field over in France?  
\[Everyone laughs\]  
**Albert Kropp**: Well, stupid, one people offends another.  
**Tjaden**: Oh, well, if that’s it, I shouldn’t be here at all. I don’t feel offended.  
**Katczinsky**: It don’t apply to tramps like you.  
**Tjaden**: Good. Then I could be goin’ home right away.  
**Paul Bäumer**: Ah, you just try it.  
**Katczinsky**: Yeah. You wanna get shot?  
**Tjaden**: The kaiser and me…  
\[the others laugh\]  
**Tjaden**: Me and the kaiser felt just alike about this war. We didn’t either of us want any war, so I’m going home. He’s there already.  
**Hair-peak soldier**: Somebody must have wanted it. Maybe it was the English. No, I don’t want to shoot any Englishman. I never saw one ’til I came up here. And I suppose most of them never saw a German ’til \*they\* came up here. No, I’m sure \*they\* weren’t asked about it.  
**Paul Bäumer**: No.  
**Detering**: Well, it must be doing somebody some good.  
**Detering**: Not me and the kaiser.  
**Hair-peak soldier**: I think maybe the kaiser wanted a war.  
**Tjaden**: You leave us out of this!  
**Katczinsky**: I don’t see that. The kaiser’s \*got\* everything he needs.  
**Hair-peak soldier**: Well, he never had a war before. Every full-grown emperor needs one war to make him famous. Why, that’s history.  
**Paul Bäumer**: Yeah, generals, too. They need war.*

***Hair-peak soldier**: And manufacturers. They get rich.  
\[murmurs of agreement\]  
**Albert Kropp**: I think it’s more a kind of fever. Nobody wants it in particular, and then all at once, there it is. We didn’t want it. The English didn’t want it. And here we are fighting.*

Later in the conversation, one of the central characters of the film, Katczinsky (Louis Wolheim), comes up with an innovative idea to substitute war over any conflict or disagreement.

***Katczinsky**: I’ll tell you how it should all be done.  
\[spits\]  
**Katczinsky**: Whenever there’s a big war comin’ on, you should rope off a big field…  
**Cigar-smoking soldier**: And sell tickets.  
**Katczinsky**: Yeah. And –  
\[glares at interrupter\]  
**Katczinsky**: And on the big day, you should take all the kings and their cabinets and their generals, put ’em in the center dressed in their underpants, and let ’em fight it out with clubs. The best country wins.  
\[everybody murmurs in agreement\]*

Towards the end of the film, Paul takes a trip to his hometown on a furlough where he finds the stark contrast between what the people of his town thinks of the war and the realities that he has witnessed and experienced at the battlefront. The people here are being foolishly patriotic and ignorant of the realities that they have never seen or experienced. On his visit to his old school, he sees his teacher giving the same old speech to a new batch of students and asking them to enlist to serve their Fatherland. Disgusted by it all, he returns to the battlefront even before his leave is over. He finds that most of his company men are dead and have been replaced by young kids fresh out of school just to fill the ranks, who haven’t even received proper training.

The film is a double Academy Award winner for Best Picture and Best Director. It was the first talkie war film to win Oscars. All Quiet on the Western Front has been acknowledged as the seventh best film in the epic genre of all time by the [American Film Institute](http://en.wikipedia.org/wiki/American_Film_Institute) (AFI) in its 2008 list. This movie is highly recommended for its anti-war theme and success in highlighting the tragedies of war as seen through the eyes of individuals.

* * *

**About Kumar Anand**

Kumar Anand is an economist with over ten years of experience working with for-profit companies, government ministries and not-for-profit think tanks. Kumar has previously worked with National Institute of Public Finance and Policy (NIPFP) where he was part of the research team that assisted the Financial Sector Legislative Reforms Commission (FSLRC). Before joining NIPFP, he worked with Hong Kong-based Asianomics Limited, where he kept a watch on the developments in the Indian sub-continent markets. Before his present role, Kumar worked with Centre for Civil Society in New Delhi, where he created an online library of Indian liberal works to preserve and revive the rich Indian liberal and free market tradition. Currently, Kumar leads the research team at Nayi Disha in Mumbai, where he is exploring the right set of principles-based rules that should govern a city and a nation and the ways to create a popular demand for such a change. Kumar's research interests are in Indian economic history, urban economics and public choice economics. He is a graduate of Gokhale Institute of Politics and Economics, Pune.

## Vipin on Global Crisis

Original: https://www.spontaneousorder.in/p/vipin-on-global-crisis

Author: Spontaneous Order

Published: 2009-08-18T18:36:48.000Z

Topics: global-financial-crisis, economic-freedom

> Vipin has written an interesting piece on the global financial crisis, read and comment vipin-on-crisis

**Summary:**

This post is a brief 2009 announcement by Parth Shah linking to Vipin’s piece on the global financial crisis (PDF), without including its content, arguments, or summary. It promotes reading and commenting on the linked document from a classical-liberal perspective via the Centre for Civil Society. Includes a bio of Parth Shah highlighting his work on economic freedom, education choice, property rights, and public governance.

**Key points:**

- Post links to Vipin's analysis of the global financial crisis for readers to review and comment.

**By Parth Shah**

* * *

Vipin has written an interesting piece on the global financial crisis, read and comment [vipin-on-crisis](https://spontaneousorder.in/wp-content/uploads/2009/08/vipin-on-crisis.pdf)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## RTE Bill passes: What should be the headline?

Original: https://www.spontaneousorder.in/p/rte-passes-what-should-be-the-headline

Author: Spontaneous Order

Published: 2009-08-04T19:36:46.000Z

Topics: school-vouchers, rte-act, education-choice, private-schools

> The RTE Bill has ignored many essential components of quality education, as has been pointed out by many commentators—lack of focus on learning achievement instead of just inputs, treating schools for the poor (government schools) unequally with the sch

**Summary:**

The RTE Bill, despite ignoring key quality education elements like learning outcomes over inputs, unequal treatment of government vs. private schools, and weak School Management Committees, introduces what Parth Shah hails as the world's largest school voucher program through a 25% reservation for weaker sections and disadvantaged groups in unaided private schools. With about 10 million Class 1 students in private schools, 2.5 million children will receive government-funded spots in the first year, adding another 2.5 million annually, reaching 30 million by Class 12. Aided schools must proportionally admit such students based on aid relative to expenses, potentially adding millions more. Though not labeled vouchers, this empowers poor children to attend better private schools with government covering costs—a classical-liberal win for choice and competition. Implementation faces hurdles: likely court challenges from private schools on quotas and reimbursements, social pressures on poor families, and risks of political corruption in seat allocation. Effective execution demands tackling these to realize the scheme's bold potential.

**Key points:**

- RTE Bill mandates 25% seats in unaided private schools for weaker sections, funding 2.5 million Class 1 students annually via government vouchers.
- Program scales to support 30 million students across classes by Class 12, plus indirect vouchers in aided schools.
- This constitutes the world's largest school voucher initiative, promoting choice in private education despite the Bill's other flaws.
- Anticipated challenges include legal battles, social barriers for poor families, and corruption risks in seat selection.

**By Parth Shah**

* * *

**India launches world’s largest school voucher program**

The RTE Bill has ignored many essential components of quality education, as has been pointed out by many commentators—lack of focus on learning achievement instead of just inputs, treating schools for the poor (government schools) unequally with the schools of the rich (private schools) in terms of infrastructure requirements and recognition process, and not empowering the School Management Committee to manage school finances and functionaries, to cite just three.

One idea in the Bill that would have the most positive impact is the national school voucher program for students of weaker section and disadvantaged group. This would be the world’s largest school voucher program! The government would pay for 25% of students in all unaided private schools.

There are about 10 million students in class 1 in private schools. About 2.5 million children will get government voucher to attend class 1 in the first year of the program (25 % of 10 million). Each year another 2.5 million children will be added as the first batch moves to class 2. By class 12, there will be 30 million children attending private schools with government support.

This is just the number of students who will receive direct support from the government. The Bill requires schools that are already aided by the government to take students of weaker section in proportion to the amount of government aid divided by the annual recurring expenses of the school.Depending on how these calculations are done, it could add several more million students to the indirect voucher program.

This would indeed be the biggest voucher program in the world. Though the government does not refer to the 25% reservation in private schools as a form of school voucher, but in reality that is exactly what it is.Poor and disadvantaged children will be able to attend private schools and their expenses would be paid by the government. That is what a voucher does.

With the RTE Bill, the government has launched one of the boldest education schemes in the world. To implement it properly and effectively is going to be an equally Herculean challenge. Private schools are most likely to challenge the reservation in the courts. If that fails, they would challenge the amount that the government would pay them for education of the 25% of government sponsored children. The poor and disadvantaged parents would face cultural, social and economic pressures in having their children study with those of the upper classes. These adjustments would have to be properly facilitated. There would be tremendous pressure on local governments to select politically connected for the reserved seats. One cannot rule out a very high possibility of influence peddling and outright corruption as a large number of children would compete for these coveted seats in private schools. They are many such issues to consider, plan for and tackle effectively in making this single part of the Bill workable.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## RTE Bill Does not Focus on Learning Outcomes

Original: https://www.spontaneousorder.in/p/rte-bill-does-not-focus-on-learning-outcomes

Author: Spontaneous Order

Published: 2009-07-28T11:53:22.000Z

Topics: rte-bill, school-choice, learning-outcomes, private-education

> This is part of the Economic Times Debate on RTE Bill on July 24: The Right to Education (RTE) Bill is schizophrenic in addressing the issue of equality. The reservation of 25% seats for weaker sections in all private schools improves equity of access a..

**Summary:**

Parth Shah critiques the Right to Education (RTE) Bill as schizophrenic on equality: its 25% seat reservation for weaker sections in private schools acts as a voucher scheme, enhancing poor parents' access and choice to quality education. However, stringent infrastructure mandates, including playgrounds, would render budget private schools illegal, eliminating the limited options poor families currently have for affordable English-medium education. Shah argues against forcibly closing these schools, asserting that if government schools improve as promised within three years, market competition would naturally phase out low-quality privates—making their persistence a true measure of the Bill's success. The Bill emphasizes inputs over learning outcomes, guaranteeing schooling but not actual education, thus undermining quality in the rush of the 100-day agenda. Shah urges revisiting quality via modifications to clauses 8, 9, and 29 before Lok Sabha tabling. He supports empowering School Management Committees (with 50% women) to manage funds and staff for effective local governance, calling for the Bill's remake post-Rajya Sabha passage to deliver genuine choice and accountability.

**Key points:**

- RTE Bill's 25% reservation in private schools functions as a voucher scheme improving equity and parental choice.
- Infrastructure requirements would illegalize budget private schools, denying poor parents English-medium options.
- Bill prioritizes inputs over learning outcomes, promising schooling but not education.
- Modify clauses 8, 9, and 29 to ensure quality focus.
- Empower School Management Committees with full financial and operational authority.

**By Parth Shah**

* * *

This is part of the Economic Times [Debate](http://economictimes.indiatimes.com/Opinion/ET-Debate/Bill-does-not-focus-on-learning-outcomes/articleshow/4813578.cms) on RTE Bill on July 24:

[

![](https://substackcdn.com/image/fetch/$s_!0ORM!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fb4c884b5-24bb-491c-9cb2-7a226ac90b89_150x150.jpeg "parth-green")



](https://spontaneousorder.in/wp-content/uploads/2009/07/parth-green.jpg)

The Right to Education (RTE) Bill is schizophrenic in addressing the issue of equality. The reservation of 25% seats for weaker sections in all private schools improves equity of access and offers a choice of school to poor parents. It is basically a voucher scheme where the government would pay for the educational expenses of 25% students in private schools. On the other hand, the infrastructure requirements including a playground would make all budget private schools illegal.

This would take away the little choice that poor parents have today and deny them English medium education. One fails to understand the logic of closing down budget private schools by the force of law. If all government schools would become great in three years, as stipulated in the Bill, these fee-charging schools would close down by the force of economics. Actually, the existence and scale of these schools would be an objective barometer to judge how well the Bill has fulfilled its promise. Forcibly closing down these schools just shows a lack of confidence in the capacity to keep its promise.

The voucher scheme, now in the Bill, has many opponents. But one issue on which everyone is united is the assurance of quality. The Bill only talks about inputs and has nothing to offer on learning outcomes. It guarantees the right to schooling but not the right to education; it promises graduation but no learning. In the haste of the 100-day agenda, the foundation of the new education system is being undermined. The government would do well to revisit the issue of quality before tabling the Bill in the Lok Sabha. As many commentators have pointed out, it is still possible to address this critical issue by modifying just three clauses, namely, 8, 9, and 29.

The School Management Committee with 50% women members could lead to more effective local governance. For that, the committee must have the necessary powers — to manage school funds as well as all functionaries. The passage of the Bill in Rajya Sabha clearly shows the commitment of the government, but it surely needs to be remade. The nation deserves nothing less.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## ET Editorial on RTE

Original: https://www.spontaneousorder.in/p/et-editorial-on-rte

Author: Spontaneous Order

Published: 2009-07-28T11:21:37.000Z

Topics: right-to-education, school-choice, education-reform, vouchers

> The Economic Times wrote this editorial on July 27 and they also published my comment on the Right to Education Bill on July 24. It great to see the endorsement of the CCS position by ET! See where you find the parallels! “The right to education is mea.

**Summary:**

Parth Shah highlights an Economic Times editorial endorsing the Centre for Civil Society's critique of the Right to Education (RTE) Bill, passed by the Rajya Sabha in 2009. The editorial argues that the right to education is meaningless if it only guarantees access to government schools where little teaching occurs, leaving children functionally illiterate despite years of schooling. Surveys reveal rampant teacher absenteeism and lack of instruction even when present. The Bill perpetuates India's input-focused development failures by ignoring outcomes, proposing amendments to sections 8, 9, and 29 for minimum quality standards, school ratings, and closure of underperforming government and private schools. It criticizes the Bill's rigid norms—like requiring expensive playgrounds—which would criminalize thousands of low-cost, unrecognized private schools preferred by poor urban parents over free government options lacking teacher accountability or discipline. From a classical-liberal viewpoint, true education rights demand freedom of choice via state-issued vouchers allowing students to attend preferred schools, fostering competition and accountability rather than entrenching ineffective government monopolies.

**Key points:**

- RTE Bill prioritizes access to government schools over learning outcomes, ignoring teacher absenteeism and functional illiteracy.
- Rigid norms like playground requirements would abolish affordable private schools serving poor slumdwellers.
- Amend Bill's sections 8, 9, and 29 for quality standards, school ratings, and closure of failing institutions.
- Replace with vouchers enabling student choice in schools to ensure real accountability and competition.

**By Parth Shah**

* * *

The Economic Times wrote this [editorial](http://economictimes.indiatimes.com/Opinion/Editorial/Amend-education-Bill/articleshow/4823429.cms) on July 27 and they also published my [comment](http://economictimes.indiatimes.com/Opinion/ET-Debate/Bill-does-not-focus-on-learning-outcomes/articleshow/4813578.cms) on the Right to Education Bill on July 24. It great to see the endorsement of the CCS position by ET!  See where you find the parallels!

“The right to education is meaningless if it merely means the right of children to join a government school where little teaching takes place, and emerge functionally illiterate. Unfortunately the Right to Education Bill just passed by the Rajya Sabha focuses only on access to government schools, not the outcome after such access.

Innumerable surveys show teachers bunk school with impunity, that many do not teach even while at school, and that children with several years of schooling cannot do simple sums or write simple paragraphs. This approach — talking virtuously about outlays and inputs while ignoring outcomes — has long been the bane of Indian development.

Instead of abandoning it, the approach is being extended to the Right to Education. The Bill must be amended before being tabled in the Lok Sabha, to ensure the right to minimum quality. This can be done by amending sections 8, 9 and 29, as has been pointed out by many analysts. HRD minister Kapil Sibal has talked about ratings for private colleges. Surely government and private schools need rating too, and the worst should be closed down whether in the private or public sector.

Millions of poor slumdwellers today send their kids to unrecognised private schools. These are not of high quality, but parents deem them better than free government schools. The Bill wants to fix minimum norms for private sector education, which will mean abolishing the thousands of private schools that are plugging the huge gap left by government schools.

Official norms require schools to have playgrounds, which are exorbitantly expensive in urban areas, and cannot be provided by local low-budget private schools. Trying to criminalise such schools while ignoring the crime of non-education in government schools is farcical. The Bill has no provisions to ensure teacher accountability to students, or discipline. Much better would be a new bill that permits state authorities to issue vouchers to students to attend schools of their choice. Such freedom of choice would be a true right to education. The right to join a useless government school is no right at all. “

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## The Big Bad Budget

Original: https://www.spontaneousorder.in/p/the-big-bad-budget

Author: Spontaneous Order

Published: 2009-07-07T11:07:54.000Z

Topics: education, education-vouchers, indian-budget, governance-reform

> What a disappointment the Budget 2009 has been! Many CCS interns and team members set together to watch but there was nothing really to discuss at the end, just disappointment. I wrote a comment for Business Standard focusing mostly on education, howeve..

**Summary:**

Parth Shah expresses deep disappointment with India's 2009 Budget for failing to innovate in governance, particularly in education and health, despite bold rhetoric on service delivery. Instead of adopting classical-liberal ideas like vouchers for education, health, and food security—some already piloted—it merely boosts funding for existing schemes. In higher education, outlays rose by Rs. 2,000 crore over the Interim Budget, with added interest subsidies on loans for expanded courses including vocational studies. Minority education allocations increased from Rs. 1,000 crore to Rs. 1,740 crore, alongside pre- and post-matric scholarships and a new National Fellowship. However, implementation lags persist: the National Means-Cum-Merit Scholarship, meant for one lakh students, reached only 33,000, underscoring the need for awareness and enrollment drives. Shah urges thinking outside the box for India's youth. A potential silver lining is the Finance Ministry's broad allocations, leaving innovative details to line ministries—a unintentional governance reform that could revolutionize task allocation if sustained.

**Key points:**

- Budget 2009 disappoints by increasing funds for old education schemes without adopting voucher innovations.
- Higher education gets Rs. 2,000 crore more, loan subsidies, and minority allocations up from Rs. 1,000 crore to Rs. 1,740 crore, but scholarships underperform (only 33,000 of 100,000 targeted).
- Line ministries should drive new ideas like vouchers, as broad Finance Ministry allocations enable this reform.

**By Parth Shah**

* * *

[

![](file:///C:/DOCUME~1/parth/LOCALS~1/Temp/moz-screenshot.jpg)



](file:///C:/DOCUME~1/parth/LOCALS~1/Temp/moz-screenshot.jpg)

What a disappointment the Budget 2009 has been! Many CCS interns and team members set together to watch but there was nothing really to discuss at the end, just disappointment. I wrote a comment for *Business Standard* focusing mostly on education, however the [printed version](http://budget.business-standard.com/storypage.php?id=&autono=363197) has left some lines/para out:

Despite the bold talk about innovations in governance and service delivery system, this Budget takes hardly a step in ‘walking the talk.’ In the areas of education and health particularly, this failure to think outside the box is simply disastrous for a young country. A wealth of new ideas like vouchers for education, health, and food security have been discussed, some of which have already been piloted either by the government or by think tanks.

Just as in social safety net areas, the Budget increased allocations for the existing or already announced schemes. For higher education, the outlays increased by Rs. 2,000 crore over the Interim Budget. It thoughtfully added an interest subsidy for loans and expanded the range of courses for which loans could be availed, including vocational studies. The minority education allocations increased from Rs 1000 crore last year to Rs 1740 crore. It gives pre- and post-matric scholarships and a new National Fellowship. The biggest challenge for the scholarship schemes has been that the government has failed to meet even its own previous targets. The National Means-Cum-Merit Scholarship of the previous year had allocations for one lakh students but only 33,000 have received it this year. There is an urgent need to budget for awareness programs and enrollment drives within these schemes.

There may be a silver lining in this non-innovative Budget: The Finance Ministry makes just broad money allocations but leaves the new ideas and the details to the line ministries! That one governance reform is indeed well achieved by this Budget! If Mr Mukherjee stays on this course for the term, he may have revolutionized, albeit rather unintentionally, the allocation of tasks across ministries. That would indeed be the great achievement of the FM.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Education Ideas for the Budget

Original: https://www.spontaneousorder.in/p/education-ideas-for-the-budget

Author: Spontaneous Order

Published: 2009-07-06T02:24:11.000Z

Topics: education-reform, school-choice, education-decentralization, scholarships

> Some of the ideas that CCS has been advocating for education in the Budget 2009: Reward states that put schools under local control: The seventy-third and seventy-fourth Constitutional Amendments require Panchayati Raj and Local Administrative Bodies, t..

**Summary:**

Parth Shah of the Centre for Civil Society advocates six classical-liberal education reforms for India's Budget 2009, emphasizing decentralization, choice, competition, and incentives to enhance quality and access. First, reward states financially for devolving school administration, finances, and functionaries to Panchayati Raj institutions as per the 73rd and 74th Amendments, tying part of SSA funds to effective devolution. Second, create an autonomous National Institute of Learning Assessment with a Rs 100 crore corpus to regularly measure student learning levels nationwide, starting with government schools and expanding, while coordinating international assessments. Third, in the 25 most educationally backward districts, offer conditional cash transfers of Rs 12,000 annually for classes 9-10 and Rs 15,000 for 11-12 to all minority and SC/ST girls post-8th standard to boost retention via scholarships and boarding options. Fourth, expand existing pre-metric, post-metric, and PG scholarships fivefold across ministries, with 10% of budgets for awareness campaigns, addressing low uptake like the National Means-cum-Merit Scholarship's 33,000 beneficiaries out of 100,000 slots in 2008-09. Fifth, grant 'industry status' to vocational training, e-learning, and higher education to attract capital, technology, and management. Sixth, under RMSA, pilot per-student funding in top 25 urban centers, allowing class 8 graduates to choose schools and directing funds accordingly to spur competition and performance. These market-oriented ideas aim to revolutionize education through accountability and innovation.

**Key points:**

- Reward states that devolve school control to local Panchayati Raj bodies with SSA-linked incentives.
- Establish a Rs 100 crore National Institute of Learning Assessment for ongoing student learning evaluations.
- Implement Rs 12,000-15,000 annual scholarships for minority and SC/ST girls in 25 backward districts post-class 8.
- Expand all existing scholarships fivefold with 10% budget for awareness to boost uptake.
- Pilot per-student funding and school choice in top 25 urban centers under RMSA to drive competition.

**By Parth Shah**

* * *

Some of the ideas that CCS has been advocating for education in the Budget 2009:

1.  **Reward states that put schools under local control:** The seventy-third and seventy-fourth Constitutional Amendments require Panchayati Raj and Local Administrative Bodies, the third-tier of administration in villages and urban areas, to manage local schools. However, much of the administrative controls over schools still rest with state governments. Give generous financial incentives to states that devolve school education functions, finances, and functionaries to local governments or attach part of the SSA contribution to the effective devolution.
    
2.  **Bring the focus on quality of education through a new National Institute of Learning Assessment:** There needs to be a regular assessment of learning achievements of students across the country. An autonomous organization (‘National Institute of Learning Assessment’) could be established (corpus of Rs 100 crore) with the sole purpose of continuous determination of learning levels of students, beginning with government and government recognized schools but later including all schools in the country. It can also coordinate India’s participation in similar international assessment efforts.
    
3.  **Mission Mode for Minority and SC/ST Girls:** In the 25 most Educationally Backward Districts of the country (as per the Education Development Index), implement a conditional cash transfer scheme for **all** minority and SC/ ST girls to pursue education after 8th standard. A generous scholarship of Rs 12,000 per annum for classes 9 and 10 and of Rs 15,000 for classes 11 and 12 would enable them to access, if necessary, boarding schools outside the village and provide strong monetary incentive to parents to keep them in school.
    
4.  **Expand all existing scholarship schemes by five times**: Several pre-metric, post-metric and post-graduation scholarships are already set up under different ministries (education, social welfare, minority affairs), expand them at least by five times! This expansion must be accompanied by a separate budget for generating awareness about these schemes across the country. The recent National Means-cum-Merit Scholarship scheme had allowance for 100,000 scholarships but only 33,000 students benefited in 2008-09. Give separate funding of about 10% of the scheme budget for ‘awareness campaigns’ and ‘enrollment drives.’
    
5.  **Grant education an ‘industry status’**: The Minister may start by granting ‘industry status’ to vocational training, non-formal/non-school education like e-learning, and higher education. This would bring in massive capital, technology and more importantly high quality management to a large part of our education landscape.
    
6.  **Innovations in Rastriya Madhyamik Shiksha Abhiyan (RMSA):** The success of the new Abhiyan lies in out-of-the-box thinking and innovations than what has been done under the SSA. One reform that can revolutionalise the whole of post-elementary education is to select the top 25 urban centers in the country and convert state funding to government as well as government-aided schools to a per-student funding. Then allow the students graduating from class 8 from these schools to choose the school they want to attend and let the funding follow the student. This choice and competition would dramatically improve the performance of teachers and the quality of school management.
    

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Murhty on Education Reforms

Original: https://www.spontaneousorder.in/p/murhty-on-education-reforms

Author: Spontaneous Order

Published: 2009-05-24T17:39:48.000Z

Topics: education-reform, school-vouchers, higher-education, private-education

> In his new book, A Better India: A Better World, Mr Muthy outlines his reform ideas in the chapter ‘A Framework for Reforms in Higher Education in India.’ Despite the title, the chapter deals with school education too since the students in colleges wo

**Summary:**

Parth Shah, from the Centre for Civil Society, highlights N.R. Narayana Murthy's classical-liberal reform proposals for India's education system in the book 'A Better India: A Better World' (chapter on higher education, p. 146, which also addresses school education). Murthy argues that in a poor country like India, higher education and urban primary/secondary education should be entirely left to the private sector, allowing the government to concentrate its limited resources on building effective primary and secondary education platforms in rural areas. Subsidies for urban primary or secondary education must target only poor children and be delivered directly to schools through Milton Friedman's voucher mechanism. For college admission, every worthy student should receive either a college scholarship or a loan from a financing institution. Shah praises these as 'radical ideas,' aligning with the think tank's advocacy for choice, competition, and economic freedom in education over government dominance.

**Key points:**

- Leave higher education and urban primary/secondary education to the private sector in India.
- Direct government resources exclusively to primary and secondary education in rural areas.
- Provide subsidies only to poor urban children via Milton Friedman's voucher system, paid directly to schools.
- Offer scholarships from colleges or loans from financing institutions to all students worthy of higher education admission.

**By Parth Shah**

* * *

In his new book, *A Better India: A Better World*, Mr Muthy outlines his reform ideas in the chapter ‘A Framework for Reforms in Higher Education in India.’ Despite the title, the chapter deals with school education too since the students in colleges would come from schools. I just copy part of a para (p 146) but that offers a great insight into Mr Murthy’s thinking on the issue.

“In a poor country like India, i believe that higher education, as well as primary and secondary education in urban areas, must be left to the private sector. The government must focus its attention and limited resources on building a mature platform for effective primary and secondary education in rural areas. Any subsidy in urban primary or secondary education must go only to poor children, and all subsidies should be provided directly to schools by the voucher mechanism devised by the well-known economist Milton Friedman. Every child worthy of admission to a college must receive either a scholarship from the college or a loan from a financing institution…”

Radical ideas indeed!

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Ode to India and her Democracy!

Original: https://www.spontaneousorder.in/p/ode-to-india-and-her-democracy

Author: Spontaneous Order

Published: 2009-05-11T00:00:45.000Z

Topics: india-democracy, religious-diversity, economic-growth, political-leadership

> This comment on a NYT article is inspiring! Thanks to Priyanka I am sharing it with you. It is truly the greatest show on Earth, an ode to a diverse and democratic ethos, where 700 million + of humanity vote, providing their small part in directing thei..

**Summary:**

Parth Shah shares an inspiring New York Times comment by V Mitchell hailing India's democracy as 'the greatest show on Earth,' where over 700 million people vote amid profound diversity and challenges. India thrives as the most diverse nation, birthplace of Hinduism, Buddhism, Jainism, and Sikhism, the second-largest Muslim country, with ancient Christian, Jewish, Zoroastrian, Tibetan, Armenian, and Syrian communities. Despite destabilizing neighbors like Pakistan, China, and Burma, and immense hurdles in development and terrorism, India elects diverse leaders: three Muslim presidents, a Sikh prime minister, a Catholic Italian heading the ruling party, and a female president succeeding a Muslim rocket scientist. Historically, per OECD, it was the world's largest economy for 1500 of the last 2000 years, second-largest 200 years ago. Today, a booming economy lifts 40 million out of poverty annually, poised to have a middle class equal to the entire US population by 2025. This optimism shines in movies, arts, growth, and voting, positioning India as a global inspiration as one-tenth of humanity votes, embodying a classical-liberal celebration of resilient freedom, diversity, and economic vitality.

**Key points:**

- India's democracy enables over 700 million diverse voters to shape its future despite tough neighbors and internal challenges.
- The country hosts unparalleled religious and cultural diversity, including ancient communities of multiple faiths thriving together.
- Diverse leadership includes Muslim presidents, a Sikh PM, and a Catholic party head, reflecting inclusive governance.
- Economic growth lifts 40 million from poverty yearly, with a middle class matching US size by 2025.
- India inspires globally as a vibrant democracy balancing immense diversity and development.

**By Parth Shah**

* * *

This [comment on a NYT article](<http://community.nytimes.com/article/comments/2009/04/15/world/asia/15india.html?permid=7#comment7" target="_blank">) is inspiring! Thanks to Priyanka I am sharing it with you.

It is truly the greatest show on Earth, an ode to a diverse and democratic ethos, where 700 million + of humanity vote, providing their small part in directing their ancient civilization into the future. It is no less impressive when done in a neighborhood which includes de-stabilizing and violent Pakistan, China, and Burma.

Its challenges are immense, more so probably than anywhere else, particularly in development and fending off terrorism — but considering these challenges and its neighbors, it is even more astounding that the most diverse nation on Earth, with hundreds of languages, all religions and cultures, is not only surviving, but thriving.

The nation where Hinduism, Buddhism, Jainism, and Sikhism were born, which is the second largest Muslim nation on Earth; where Christianity has existed for 2000 years; where the oldest Jewish synagogues and Jewish communities have resided since the Romans burnt their 2nd temple; where the Dalai Lama and the Tibetan government in exile reside; where the Zorostrians from Persia have thrived since being thrown out of their ancient homeland; where Armenians and Syrians and many others have to come live; where the Paris-based OECD said was the largest economy on Earth 1500 of the last 2000 years, including the 2nd largest only 200 years ago; where 3 Muslim Presidents have been elected, where a Sikh is Prime Minister and the head of the ruling party a Catholic Italian woman, where the President is also a women, succeeding a Muslim President who as a rocket scientist was a hero in the nation; where a booming economy is lifting 40 million out of poverty each year and is expected to have the majority of its population in the middle class, already equal to the entire US population, by 2025; where its optimism and vibrancy is manifested in its movies, arts, economic growth, and voting, despite all the incredible challenges and hardships; where all the great powers are vying for influence, as it itself finds its place in the world.

Where all of this is happening, is India, and as greater than 1/10 of humanity gets ready to vote, it is an inspiration to all the World.

— V Mitchell, New York, NY

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Amartya Sen: From English to School Choice?

Original: https://www.spontaneousorder.in/p/amartya-sen-from-english-to-school-choice

Author: Spontaneous Order

Published: 2009-04-22T19:12:29.000Z

Topics: school-choice, education-reform, language-policy

> Sen rightly criticised SP on their manifesto to ban English in UP. Shouldn’t Professor Sen extend the arguments he used to defend teaching of English to also support school choice for the poor? Just replace English with private schools, you see the logi

**Summary:**

Parth Shah endorses Amartya Sen's criticism of the Samajwadi Party's (SP) manifesto to ban English in Uttar Pradesh schools, arguing that Sen's reasoning logically extends to supporting school choice for the poor via vouchers. Sen highlighted an English-speaking elite and stressed that divisions arise from exclusion, not the language itself; the solution is expanding access to English education. He noted English's role as the 'language of currency' in internet surfing, job hunting, commerce, industry, rule of law, and public use. Banning it would perpetuate stratification by keeping non-English speakers as 'have-nots,' while elites continue using it. Shah applies this parallel: just as English bans exclude the poor from opportunities, government schooling monopolies bar them from superior private schools. From a classical-liberal viewpoint emphasizing choice and competition, Sen should advocate school vouchers to empower poor families with access to quality education, breaking elite barriers and fostering accountability.

**Key points:**

- Amartya Sen opposes SP's English ban in UP schools because it excludes the poor from essential opportunities like jobs and internet access.
- English is crucial for commerce, industry, rule of law, and public use, making exclusion anti-egalitarian.
- Sen's logic against language exclusion applies equally to supporting school choice to prevent poor families from being stratified out of better private education.
- Professor Sen should extend his arguments to endorse school vouchers for the poor.

**By Parth Shah**

* * *

Sen rightly criticised SP on their manifesto to ban English in UP. Shouldn’t Professor Sen extend the arguments he used to defend teaching of English to also support school choice for the poor? Just replace English with private schools, you see the logical conclusion that follows:

“[There is an elite](http://economictimes.indiatimes.com/News/News-By-Industry/Mind-your-language-Amartya-Sen-tells-Mulayam-Singh-Yadav/articleshow/4425134.cms) which is much more familiar with English, which is not the case with many other people,” he said, but added that the way to eradicate such divisions was to bring more people into education, including English education, rather than ban the use of the language.

“That’s an argument why others who are excluded from it ought to have the opportunity to do it (learn English),” said Sen, who is an expert in public policy issues and has long criticised Indian politicians for not giving elementary education the same priority as higher education.

Sen said English had become the language of currency in many areas of life – from Internet surfing to job hunting.

“Now, one way of excluding people from doing English is to keep the division between the English-speaking haves and the non-English speaking have-nots.

“So rather than being an egalitarian force, the exclusion – if it is carried out – will have exactly the opposite effect: that is to keep the stratification as it is. Because obviously Mulayam Singh Yadav will not be able to prevent people from doing English in India as the language of commerce, industry, rule of law and public use.”

Professor Sen should support school vouchers, don’t you agree?

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Amit Varma in Top 50 Powerful People

Original: https://www.spontaneousorder.in/p/amit-varma-in-top-50-powerful-people

Author: Spontaneous Order

Published: 2009-04-20T18:04:45.000Z

Topics: libertarianism, recognition

> Our libertarian blogger Amit Varma is in BusinessWeek’s India’s 50 Most Powerful People 2009. Congratulations, Amit! I surely miss his column in Mint, this is the last one I found on it.

**Summary:**

This short post by Parth Shah congratulates libertarian blogger Amit Varma for being included in BusinessWeek’s India’s 50 Most Powerful People 2009 list. It expresses missing his column in Mint and links to what appears to be his last one there. Includes a bio of the author, founder of Centre for Civil Society, highlighting his work on economic freedom, education choice, property rights, and liberalism. No substantive policy argument present.

**Key points:**

- Amit Varma, libertarian blogger, ranked in BusinessWeek’s India’s 50 Most Powerful People 2009.

**By Parth Shah**

* * *

Our libertarian [blogger](http://www.indiauncut.com)

[

![](https://substackcdn.com/image/fetch/$s_!spNu!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbaa90875-b79b-4d9f-9254-0a59b1f91c47_600x350.jpeg "amit-varma")



](https://spontaneousorder.in/wp-content/uploads/2009/04/amit-varma.jpg)

Amit Varma is in BusinessWeek’s [India’s 50 Most Powerful People 2009](http://images.businessweek.com/ss/09/04/0415_india_most_powerful/49.htm). Congratulations, Amit! I surely miss his column in Mint, [this](http://www.livemint.com/articles/2008/01/18235724/The-life-answers-that-you-need.html) is the last one I found on it.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Origins of Wikipedia: Hayek at Auburn by Mark

Original: https://www.spontaneousorder.in/p/origins-of-wikipedia-hayek-at-auburn-by-mark

Author: Spontaneous Order

Published: 2009-04-20T16:08:54.000Z

Topics: fa-hayek, knowledge-problem, wikipedia, austrian-economics

> My friend Mark and my alma mater Auburn University are in news and all that related to my cherished social philosopher and economist F A Hayek, so can’t pass up the opportunity. “The genesis of Wikipedia was an economics class that Jimmy Wales took wh

**Summary:**

Parth Shah highlights a connection between his friend Mark Thornton, his alma mater Auburn University, and F.A. Hayek in the origins of Wikipedia. Jimmy Wales took an economics class at Auburn taught by Thornton, which centered on Hayek's 1945 paper 'The Use of Knowledge in Society.' From a classical-liberal viewpoint, the paper critiques socialism's central planning as incapable of aggregating the dispersed knowledge essential for an economy, due to its political arrogance and inability to centralize vital information. Instead, Hayek champions the market economy, where prices and private property spontaneously coordinate this knowledge. Shah notes that Wales drew on this concept for Wikipedia, enabling its decentralized success and flourishing, demonstrating the practical superiority of Hayekian spontaneous order over top-down control. This anecdote underscores the enduring relevance of Austrian economics in fostering innovation through individual initiative and market mechanisms rather than state direction.

**Key points:**

- Jimmy Wales' economics class at Auburn University, taught by Mark Thornton, focused on F.A. Hayek's 1945 paper 'The Use of Knowledge in Society.'
- Hayek argued that central planning under socialism fails to harness dispersed societal knowledge, which prices and private property effectively coordinate in a market economy.
- Wales applied Hayek's ideas on decentralized knowledge to Wikipedia, contributing to its remarkable success.

**By Parth Shah**

* * *

My friend Mark and my alma mater Auburn University are in news and all that related to my cherished social philosopher and economist F A Hayek, so can’t pass up the opportunity.

“The genesis of Wikipedia was an economics class that Jimmy Wales took when he was a student at Auburn University. Taught by Mark Thornton, much of the discussion centered around the 1945 paper by Nobel-winner F.A. Hayek titled “The Use of Knowledge in Society.”

That paper argued that socialism with its central planning simply could not keep up with the real knowledge in society because the kind of knowledge needed to power an economy is dispersed in society and cannot be brought together with central planning, with its political arrogance. Instead, it is brought together via a price system and private property, the key ingredients of a market economy.

Mr. Wales brought that concept to Wikipedia, and that is why it has flourished.”

Full article is in [WSJ](http://online.wsj.com/article/SB123976347774119699.html)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## School Choice & Election Advocacy

Original: https://www.spontaneousorder.in/p/school-choice-election-advocacy

Author: Spontaneous Order

Published: 2009-04-16T19:13:53.000Z

Topics: school-choice, elections, education-reform

> A picture says a thousand words…

**Summary:**

This post is fragmentary, featuring only a title 'School Choice & Election Advocacy', an image (likely a graphic tying school choice to elections), and the author's bio. No substantive textual argument or details are provided. Parth Shah, founder of Centre for Civil Society, advocates classical-liberal themes including economic freedom, choice and competition in education, property rights for the environment, and new public governance.

**Key points:**

- Post relies on an image to convey a message linking school choice to election advocacy.

**By Parth Shah**

* * *

A picture says a thousand words…

[

![](https://substackcdn.com/image/fetch/$s_!X_zu!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F76cdbb6c-7289-44d5-9747-1f357b42172d_448x336.jpeg "elections-2")



](https://spontaneousorder.in/wp-content/uploads/2009/04/elections-2.jpg)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Jago Party & Education Reforms

Original: https://www.spontaneousorder.in/p/jago-party-education-reforms

Author: Spontaneous Order

Published: 2009-04-14T18:39:46.000Z

Topics: school-choice, education-reform, privatization, vouchers

> Among all parties, the Jago Party offers education reform ideas (see Q 14 and 15 in the FAQs) that are closer to the School Choice Campaign. Well, they actaully go a step further and suggest privatisation of all state schools! They decentralise the educ..

**Summary:**

Parth Shah praises the Jago Party's education reforms as the closest among political parties to the School Choice Campaign, going further by proposing full privatization of all government schools, which are less efficient despite higher teacher pay. Under their plan, students could enroll in any private school, with government directly disbursing tuition, books, and other expenses via vouchers, fostering competition to improve teaching standards. This mirrors the successful Delhi Voucher Project by Centre for Civil Society and implementations in the UK, USA, and Sweden. For higher education, soft loans repayable only after employment, scholarships for poor meritorious students, and corporate-sponsored training tied to job commitments are suggested. A single national syllabus and one all-India class 12 board exam would standardize outcomes, emphasizing skills, scientific thinking, joy of learning, and cultural awareness over rote memorization. English-medium instruction, paired with a local language, would build job-relevant competencies without supplanting Indian culture. However, Shah critiques the single board exam as reintroducing centralization, questioning its purpose and urging its abolition for consistency with decentralization. From a classical-liberal lens, this promotes choice, competition, and accountability to transform education.

**Key points:**

- Privatize all government schools and disburse fees directly to private schools chosen by students via vouchers to enable competition and better outcomes.
- Implement one national syllabus and class 12 board exam, with English-medium teaching plus a local language to foster skills, innovation, and cultural connection.
- Provide soft loans for higher education repayable post-employment, scholarships for the needy, and corporate-funded training linked to jobs.
- Abolish the single national board exam to maintain full decentralization and consistency with privatization.
- Build on successes like CCS's Delhi Voucher Project and models in UK, USA, Sweden.

**By Parth Shah**

* * *

Among all parties, the [Jago Party](http://jago.in) offers education reform ideas ([see Q 14 and 15 in the FAQs](http://www.jago.in/faqs.php#60)) that are closer to the School Choice Campaign. Well, they actaully go a step further and suggest privatisation of all state schools! They decentralise the education system by abolishing state controls but then they recommend a single board exam for the whole country and thereby bring back centralisation! Why not be consistent and abolish the board exam completely?  Does it really server the purpose for which it was instituted in the first place?

“All government schools will be privatized, because private schools are much more efficient in teaching even though they get less pay than government teachers.

  
All the students would be free to get admitted in any private school. Government would directly disburse all expenses on tuition fees, books etc for students. This would help students choose the best private school and in turn get best possible education. Private schools will also compete with each other to attract maximum students, which in turn would enhance their teaching standard.

Action on this line has already been initiated through Delhi Voucher Project by Centre for Civil Society, Delhi \[www.schoolchoice.in\] where students are given encashable school vouchers with an option to study in any school of their choice with very encouraging results.

Several countries such as U.K., U.S.A, Sweden etc have successfully implemented schemes for grant of finacial aid for study in private schools.

For higher education, students would be given soft loans, which would be repayable only after they start earning. A lot of scholarships would also be available to poor & meritorious students. There are also several companies which are ready to pay for the training & education, provided students commit to certain qualification and jobs.

There would be only one syllabus for all schools and only one all India level examination conducted by one board at class 12.

The education system would be changed in such a way that it not only enables a student to be skilled for a job, but also promotes the joy of learning, scientific thinking and experimentation, rather than just memorizing the given information and passing examinations. It should enable students to become aware of the major cultures of the world, problems of the society and life and solve those problems in innovative & scientific ways.

Teaching in English medium would help a student have competency in speaking and writing English, which is a must for a good job in today’s world. English medium instruction is not equivalent to teaching English culture.  

In fact, apart from English, every student would also be taught one local language, with full vigour so that students are equally competent in that language also. This would help them connect with Indian culture and people in a more intimate way.”  

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Samajwadi Party Menifesto: Welcome to the Stone Age!

Original: https://www.spontaneousorder.in/p/samajwadi-party-menifesto-welcome-to-the-stone-age

Author: Spontaneous Order

Published: 2009-04-13T16:41:04.000Z

Topics: election-manifestos, samajwadi-party, public-choice-theory, arrows-theorem

> I have been meaning to write about the new menifestos of the political parties. But none has really inspired me to write. Well if they can’t inspire then they can surely anger you enough to get you to write! Our CCS grad Mohit has taken on the Samajwadi

**Summary:**

Parth Shah expresses frustration with political party manifestos, particularly the Samajwadi Party's, which angers him enough to highlight a detailed critique by CCS graduate Mohit titled 'Welcome to the Stone Age.' Mohit's analysis breaks down the manifesto's major claims and promises using Arrow’s Impossibility Theorem and Public Choice Theory, critiquing them from a classical-liberal lens that values choice, competition, and accountability over statist interventions. Shah urges readers to engage with this discussion to understand the flaws in such policy proposals.

**Key points:**

- Samajwadi Party manifesto provokes classical-liberal anger due to its regressive promises.
- Mohit's critique applies Arrow’s Theorem to expose impossibilities in collective choice mechanisms.
- Public Choice Theory is used to analyze incentives and failures in the manifesto's proposals.
- Readers are encouraged to study the detailed breakdown for informed critique.

**By Parth Shah**

* * *

I have been meaning to write about the new menifestos of the political parties. But none has really inspired me to write. Well if they can’t inspire then they can surely anger you enough to get you to write! Our CCS grad [Mohit has taken on](http://serialbus.wordpress.com/2009/04/12/welcome-to-the-stone-age/) the Samajwadi Party menifesto. He was angry enough to even analyse some of the bigger claims/promises in detail. I hope you would also pay attention to his discussion on Arrow’s Theorem and Public Choice Theory. Enjoy!

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Murthy’s New Book: A Better India…

Original: https://www.spontaneousorder.in/p/murthys-new-book-a-better-india

Author: Spontaneous Order

Published: 2009-04-11T19:37:02.000Z

Topics: n-r-narayana-murthy, influential-books, indian-liberalism

> See an extract of A Better India: A Better World in this week’s Outlook, to be out in April by Penguin. The three books that influenced Murthy’s thinking are: The Protestant Ethic and the Spirit of Capitalism by Max Weber; My Experiments with Truth by

**Summary:**

This short post announces an extract from N.R. Narayana Murthy's upcoming book 'A Better India: A Better World' (Penguin, April) featured in Outlook magazine, highlighting three key influences on his thinking: Max Weber's 'The Protestant Ethic and the Spirit of Capitalism', Mahatma Gandhi's 'My Experiments with Truth', and Franz Fanon's 'Peau Noire, Masques Blancs (Black Skin, White Masks)'. It questions readers on the third book's content and its implications for Murthy's philosophy and politics. No substantive argument is developed; it serves as a teaser from a classical-liberal think tank perspective.

**Key points:**

- Announces extract of Murthy's book 'A Better India: A Better World' in Outlook.
- Lists influences: Weber's Protestant Ethic, Gandhi's Experiments with Truth, Fanon's Black Skin White Masks.
- Poses question on Fanon's book's relevance to Murthy's philosophy.

**By Parth Shah**

* * *

See an extract of A Better India: A Better World in this week’s [Outlook](http://www.outlookindia.com/full.asp?fodname=20090420&fname=Book+Extract&sid=1), to be out in April by [Penguin](http://www.penguinbooksindia.com/Bookdetail.aspx?bookId=29).

The three books that influenced Murthy’s thinking are: *The Protestant Ethic and the Spirit of Capitalism by Max Weber; My Experiments with Truth* by Mahatma Gandhi; and *Peau Noire, Masques Blancs (Black Skin, White Masks)* by Franz Fanon.  Most of us know about/ read the fist two. Has anyone here read the third one? What does it say about Murthy’s philosophy and politics?  

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Dowd’s Libertarian View of the Crisis

Original: https://www.spontaneousorder.in/p/dowds-libertarian-view-of-the-crisis

Author: Spontaneous Order

Published: 2009-04-06T21:38:34.000Z

Topics: financial-crisis, libertarian-perspective, bank-bailouts

> Professor Kevin Dowd in Lessons from Financial Crisis: A Libertarian Perspective says: My topic this evening is the current financial crisis. My theme is that the Classical Liberal perspective can help us both to understand the crisis and to find a way...

**Summary:**

This fragmentary post by Parth Shah excerpts the introduction to Professor Kevin Dowd's 'Lessons from Financial Crisis: A Libertarian Perspective,' where Dowd argues that the classical liberal viewpoint explains the current financial crisis—highlighted by public resentment over bank bailouts, likened to paying for a party one wasn't invited to—and offers a path out. Dowd asserts the system's lack of legitimacy is indefensible, but warns this perception fuels interventionists who wrongly blame unconstrained free markets and call for more state control. He deems such arguments mistaken in every respect. No full argument or conclusion is provided in the excerpt.

**Key points:**

- The financial crisis stems from a system lacking legitimacy, exemplified by bailouts where the public foots the bill without benefit.

**By Parth Shah**

* * *

Professor Kevin Dowd in [Lessons from Financial Crisis: A Libertarian Perspective](http://www.libertarian.co.uk/lapubs/econn/econn111.htm) says:

My topic this evening is the current financial crisis.  My theme is that the Classical Liberal perspective can help us both to understand the crisis and to find a way of out it.

I always like to begin with a nice quote, and we are spoilt for choice when it comes to quotes about the financial crisis.  Amongst those I can quote in mixed company, my favourite one is a comment by a Wall Street passer-by when asked his thoughts about the bank bailouts: “Its like not being invited to a party and then being given the bill for it”, he said.

This comment goes right to the heart of the matter – the widespread perception amongst the public that there is something wrong with the current financial system, i.e., that it lacks legitimacy.  I agree with this view entirely: the current system does lack legitimacy and I am sure every right-thinking person would agree with me that it is manifestly indefensible.

Though correct, however, this perception is also dangerous, as it provides fodder for interventionists who argue that the current crisis is due to unconstrained market forces.  Free markets have failed, they argue, so let’s have more state control instead.

Such arguments are mistaken in every respect.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Gandhi on Education

Original: https://www.spontaneousorder.in/p/gandhi-on-education

Author: Spontaneous Order

Published: 2009-04-03T16:30:53.000Z

Topics: education, school-autonomy, teacher-freedom

> Abha Adams writes in her Mint column: Gandhi wanted to free education from government and state bureaucracy interference. The Mahatma valued self-sufficiency and autonomy, and the more financially independent the schools were, the more politically indep..

**Summary:**

Parth Shah, founder of the Centre for Civil Society, endorses Abha Adams' Mint column on Mahatma Gandhi's classical-liberal vision for education, free from government and state bureaucracy interference. Gandhi prioritized self-sufficiency and autonomy, arguing that financially independent schools would achieve political independence. He advocated for teachers' full freedom in curriculum matters, rejecting prescribed roles imposed by authorities on what children should learn. Gandhi opposed standardized textbooks, viewing them as barriers to teachers imparting originality to pupils. Instead, teaching content and methods should stem from the village community, teachers' own intellect, and conscience. This perspective aligns with classical-liberal principles of choice, competition, and accountability in education, emphasizing independence from state control over private and public sectors to foster innovation and local relevance.

**Key points:**

- Gandhi sought to liberate education from government bureaucracy to ensure school autonomy and self-sufficiency.
- Financial independence of schools leads to their political independence, per Gandhi.
- Teachers must have freedom in curriculum design, uninfluenced by state authorities.
- Prescribed textbooks stifle originality; teaching should draw from village, intellect, and conscience.

**By Parth Shah**

* * *

Abha Adams writes in her [Mint column](http://www.livemint.com/articles/2009/04/01215041/Gandhi-on-education-relevant.html): Gandhi wanted to free education from government and state bureaucracy interference. The Mahatma valued self-sufficiency and autonomy, and the more financially independent the schools were, the more politically independent they could be…Gandhi believed in teachers having freedom in curriculum matters. He was against the idea of the teacher having a prescribed job based on what the authorities wanted the children to learn, and he was against prescribed textbooks because a teacher who taught from a textbook did not “impart originality to his pupils”. What teachers taught and what they did should not be influenced by the state, but by the village and their own intellect and conscience.”

Right on the mark, Gandhiji!

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Education Sec Defends the DC Voucher Progarm

Original: https://www.spontaneousorder.in/p/education-sec-defends-the-dc-voucher-progarm

Author: Spontaneous Order

Published: 2009-03-07T02:28:31.000Z

Topics: education, school-choice, vouchers

> Well all is not lost for the students in the DC Opportunity Scholarship program. Against the House Democrats, Arne Duncan, the education secretary, is defending the right of these children to stay in the school of their choice. “Education Secretary Arne

**Summary:**

Parth Shah reports optimistic news for students in the DC Opportunity Scholarship Program, as Education Secretary Arne Duncan defends their right to remain in chosen private schools despite House Democrats' efforts to terminate the program. Duncan, who personally opposes vouchers, deems Washington DC a unique case, insisting that poor children already benefiting should not be disrupted: 'I don’t think it makes sense to take kids out of a school where they’re happy and safe and satisfied and learning.' This position creates tension within the Obama administration and Democratic ranks, prioritizing student welfare and continuity over ideological opposition to school choice. From the classical-liberal lens of the Centre for Civil Society, Shah's update celebrates this defense of educational choice and accountability for disadvantaged youth, countering moves to eliminate publicly funded private school access in the nation's capital.

**Key points:**

- Arne Duncan opposes ending the DC Opportunity Scholarship Program for current students despite his general aversion to vouchers.
- Duncan argues DC is a special case where enrolled poor children should stay in schools where they are happy, safe, and learning.
- Duncan's stance pits the Obama administration against House Democrats seeking to terminate the voucher program.

**By Parth Shah**

* * *

Well all is not lost for the students in the DC Opportunity Scholarship program. Against the House Democrats, Arne Duncan, the education secretary, is defending the right of these children to stay in the school of their choice. “Education Secretary Arne Duncan [said](http://www.usatoday.com/news/education/2009-03-04-duncan-vouchers_N.htm?csp=34) Wednesday that poor children getting vouchers to attend private schools in the District of Columbia should be allowed to stay there, putting the Obama administration at odds with Democrats trying to end the program.

Duncan opposes vouchers, he said in an interview with The Associated Press. But he said Washington is a special case, and kids already in private schools on the public dime should be allowed to continue.

“I don’t think it makes sense to take kids out of a school where they’re happy and safe and satisfied and learning,” Duncan told said. “I think those kids need to stay in their school.”

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Tooley’s new book: The Beautiful Tree

Original: https://www.spontaneousorder.in/p/tooleys-new-book-the-beautiful-tree

Author: Spontaneous Order

Published: 2009-03-05T00:30:18.000Z

Topics: education, school-choice, private-education

> I haven’t seen it yet, at least not the final published copy, but here’s a good review in Washington Post by Jay Mathew: Tooley’s book, “The Beautiful Tree,” reveals him to be the kind of traveler who often strays off the main roads, driving off

**Summary:**

Short post by Parth Shah linking to a 2009 Washington Post review of James Tooley's 'The Beautiful Tree,' which chronicles the author's fieldwork in China, India, Ghana, Nigeria, and Kenya, uncovering private education initiatives organized by the world's poorest people—aligning with classical-liberal emphasis on choice and self-reliance over state systems. Includes Shah's bio highlighting his work on economic freedom and competition in education.

**Key points:**

- Parth Shah shares a Washington Post review praising James Tooley's exploration of grassroots private schools serving the poor in multiple countries including India.

**By Parth Shah**

* * *

I haven’t seen it yet, at least not the final published copy, but here’s a good [review](http://www.washingtonpost.com/wp-dyn/content/article/2009/01/23/AR2009012300781.html) in Washington Post by Jay Mathew: Tooley’s book, “The Beautiful Tree,” reveals him to be the kind of traveler who often strays off the main roads, driving official escorts crazy. He covers not only China and India, but also Ghana, Nigeria and Kenya. He wants to discover how the world’s poorest people are educating themselves, and surprises himself repeatedly.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## India’s Missing Think Tanks

Original: https://www.spontaneousorder.in/p/indias-missing-think-tanks

Author: Spontaneous Order

Published: 2009-03-04T04:38:29.000Z

Topics: think-tanks, public-policy, policy-innovation, civil-society

> Great piece by our friends at Pragati on the importance of think tanks and particularly of independent think tanks in India. This quote camptures it well: “Without negating the importance and influence of government’s own research on politicians and p

**Summary:**

Parth Shah, founder of the Centre for Civil Society, endorses a Pragati article lamenting India's missing independent think tanks, quoting its core argument that policy innovations are far more likely to originate from such bodies than government research. Independent think tanks, to remain relevant, must offer alternative policy formulations that challenge conventional thinking and the government's exclusionary claim on ideas. Even if ideologically motivated, consensus-seeking, or partisan, their work enriches policymaking. In stark contrast, government-funded think tanks lack inclination for bold ideas, as they are tied to funding sources, vulnerable to political pressure, and inclined to defend the status quo. This classical-liberal perspective underscores the vital role of independent think tanks in promoting choice, accountability, and innovative policies across sectors like education, environment, and governance, aligning with Shah's advocacy for economic freedom and competition. The piece signals a call for more such institutions in India to counter bureaucratic inertia and foster genuine policy progress.

**Key points:**

- Independent think tanks generate policy innovations by challenging conventional thinking and government monopoly on ideas.
- Government-funded think tanks defend the status quo due to funding dependencies and political pressures.
- India lacks sufficient independent think tanks, hindering bold policy advancements.
- Think tanks enrich policymaking even if ideologically driven or partisan.

**By Parth Shah**

* * *

Great [piece](http://www.livemint.com/2009/03/01224424/India8217s-missing-think-ta.html) by our friends at [Pragati](http://pragati.nationalinterest.in/) on the importance of think tanks and particularly of independent think tanks in India.  This quote camptures it well: “Without negating the importance and influence of government’s own research on politicians and policy developers, it can be safely argued that policy innovations are far more likely to originate from a independent think tanks.  By their very nature, and in order to remain relevant, think tanks must offer alternative policy formulations that militate against conventional thinking. While their work may be ideologically motivated, consensus-seeking, or even partisan, it challenges government’s exclusionary claim and inevitably enriches the policy making process. In contrast, Government-funded think tanks have little inclination to advance bold ideas since they tend to defend the status quo, being inextricably linked to their funding sources and vulnerable to political pressure.”

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Voucher Wars in Washington, DC

Original: https://www.spontaneousorder.in/p/voucher-wars-in-washington-dc

Author: Spontaneous Order

Published: 2009-02-28T23:12:43.000Z

Topics: school-vouchers, school-choice, education-reform, india-education

> NYT reports Democrats Limit Future Financing for Washington Voucher Program: “Congressional Democrats have put conditions on future federal financing for a small school voucher program here, and they are urging the schools chancellor to prepare the publ

**Summary:**

The New York Times reports that Congressional Democrats are imposing conditions on future federal financing for Washington, DC's small school voucher program, urging preparation to re-enroll 1,700 students from private schools into public ones by fall 2010, highlighting the annual budgetary battles faced by voucher advocates. DC Schools Chancellor Michelle Rhee supports educational options across charter, parochial, and public schools, stating that parents zoned to failing schools deserve better choices, though she doubts vouchers alone fix public education woes. Amid declining US support for vouchers, the author anticipates a pivot toward charter schools in developed nations, where vested interests resist radical reforms. From a classical-liberal standpoint emphasizing choice and competition, the author argues that India possesses both the urgent need and opportunity for large-scale voucher implementation, potentially catalyzing school choice revolutions among developing countries, and challenges India to lead where wealthy nations falter.

**Key points:**

- Congressional Democrats condition DC voucher funding, risking re-enrollment of 1,700 students in public schools by 2010.
- Michelle Rhee endorses parental school choices beyond failing public options.
- US voucher support declines, favoring charters due to entrenched interests.
- India should pioneer large-scale vouchers to drive school choice in developing nations.

**By Parth Shah**

* * *

NYT reports *[Democrats Limit Future Financing for Washington Voucher Program](http://www.nytimes.com/2009/02/28/education/28voucher.html?_r=1&th&emc=th)*: “Congressional Democrats have put conditions on future federal financing for a small school voucher program here, and they are urging the schools chancellor to prepare the public schools to re-enroll, in fall 2010, some 1,700 students currently attending private schools at taxpayer expense.” It’s a battle that voucher students, parents and supporters seem to have to fight every year at the budget time.

It would be interesting to see how Michelle Rhee, the school chancellor, responds. “Part of my job is to make sure that all kids get a great education, and it doesn’t matter whether that’s in charter, parochial or public schools,” Ms. Rhee said. “I don’t think vouchers are going to solve all the ills of public education, but parents who are zoned to schools that are failing kids should have options to do better by their kids.”

However, given the general decline in support for vouchers, US is more likely to move towards charter schools.  I have always felt that India has the need and the opportunity for vouchers on a large scale and could become a catalyst for school choice among developing countries. The vested interests in large developed countries are unlikely to allow any radical changes in the system. Would India show the way?

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Assessment of Delhi Voucher Project

Original: https://www.spontaneousorder.in/p/assessment-of-delhi-voucher-project

Author: Spontaneous Order

Published: 2009-02-21T13:48:16.000Z

Topics: school-vouchers, school-choice, education-reform

> Since my talk at IIM-A on school vouchers on February 11, i have been off the blog. My father underwent a by-pass surgery (actually five bypasses) and the recovery has not been as smooth as expected. He is now stable and moving up on the improvement cu...

**Summary:**

This short post by Parth Shah, founder of Centre for Civil Society, provides a personal update on his blogging hiatus due to his father's five-bypass surgery, from which he is now recovering. It announces the release of the first assessment of the Delhi Voucher Project, launched in the 2007 academic year and evaluated by the Centre for Media Studies. Delhi Education Minister Arvinder Singh Lovely praised the classical-liberal 'Fund Students, Not Schools!' principle and promised to introduce a voucher scheme in Delhi, aligning with advocacy for choice and competition in education.

**Key points:**

- Parth Shah's father underwent five bypasses and is now stable and improving.
- The first assessment of the Delhi Voucher Project (started 2007) was released by Centre for Media Studies.
- Delhi Education Minister Arvinder Singh Lovely endorsed 'Fund Students, Not Schools!' and pledged a voucher scheme in Delhi.

**By Parth Shah**

* * *

Since my talk at IIM-A on school vouchers on February 11, i have been off the blog. My father underwent a by-pass surgery (actually five bypasses) and the recovery has not been as smooth as expected. He is now stable and  moving up on the improvement curve.

I will write about the IIMA talk next time. Our big event was the release of the [first assessment](http://schoolchoice.in/events/20090219_delhivoucher.php) of the [Delhi Voucher Project](http://schoolchoice.in/delhivoucher.php) started in the academic year 2007.  The assessment was done by the [Centre for Media Studies](http://www.cmsindia.org/cms/). Delhi Education Minister Arvinder Singh Lovely spoke highly of the ‘Fund Students, Not Schools!’ idea and [promised](http://timesofindia.indiatimes.com/Delhi/Vouchers_to_offset_school_fee_hike_load/articleshow/4157440.cms) to launch voucher scheme in Delhi.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## CCS on RTE Bill 2008

Original: https://www.spontaneousorder.in/p/ccs-on-rte-bill-2008

Author: Spontaneous Order

Published: 2009-02-06T14:00:33.000Z

Topics: right-to-education, school-choice, education-standards, private-schools

> Over the last few days, a series of discussions among stakeholders have generated a large number of suggestions for change in the Right to Education Bill 2008. However in light of the fact that very little time is left before the beginning of the new Se..

**Summary:**

Parth Shah of the Centre for Civil Society proposes six targeted amendments to the Right to Education (RTE) Bill 2008, arguing from a classical-liberal perspective that the bill undermines choice and accountability by exempting government schools from standards, guaranteeing attendance rather than learning, mandating unfeasible new schools without alternatives, under-reimbursing private schools, weakening school management committees, and discriminating against certain government schools. The changes include: (1) requiring all schools, including government ones, to obtain recognition certificates under Section 18; (2) mandating annual independent evaluations of learning outcomes in Sections 8, 9, and 29; (3) providing financial support for equivalent-quality schools if neighbourhood schools are unavailable, amending Sections 3 and 6; (4) reimbursing private schools for 25% quota based on total per-child costs in equivalent-quality government schools under Section 12; (5) ensuring at least two-thirds of School Management Committee members are women parents and granting them powers to assess staff performance under Section 21; (6) allowing transfers to any school, removing exclusions for specified-category schools like Kendriya Vidyalaya in Section 5. These minimal tweaks promote uniform standards, learning assurance, choice via vouchers, fair compensation, parental involvement, and non-discrimination, aligning education with competition and accountability rather than state monopoly.

**Key points:**

- Require all schools, including government-run ones, to obtain recognition certificates meeting specified standards.
- Mandate independent annual evaluations to ensure actual learning outcomes, not just school attendance.
- Provide financial support for children to attend equivalent-quality schools if government neighbourhood schools are unavailable.
- Reimburse private schools for 25% reserved seats based on total costs of equivalent-quality government schools.
- Empower School Management Committees with majority women parents and authority to enforce teacher performance.

**By Parth Shah**

* * *

Over the last few days, a series of discussions among stakeholders have generated a large number of suggestions for change in the [Right to Education Bill 2008](http://www.indlaw.com/display.aspx?6936E249-75EC-40A8-87A0-A96EBFAD00E0). However in light of the fact that very little time is left before the beginning of the new Session of the Parliament, the [Centre for Civil Society](http://ccs.in/ccsindia/aboutus.asp) proposes only **6 short changes** in the current Bill.

**1.** The Bill continues the current practice to require private schools to meet the specified standards but exempts all schools established by the government from those standards. Ideally all schools, government as well as private, must meet the same standards. This requires slight change in Section 18:

**Existing Clause**

**Reworded Clause**

**18\.** (1) No school, other than a school established, owned or controlled by the appropriate Government or the local authority, shall, after the commencement of this Act, be established or function, without obtaining a certificate of recognition from such authority, by making an application in such form and manner, as may be prescribed.

**18\.** (1) No school, including a school established, owned or controlled by the appropriate Government or the local authority, shall, after the commencement of this Act, be established or function, without obtaining a certificate of recognition from such authority, by making an application in such form and manner, as may be prescribed.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

**2.** The current Bill guarantees the right to schooling but not a right to education, in other words, it promises graduation but not learning. A child could spend 8 years in a well furnished school but not really learn much at the end of it. We need some assurance of learning achievements. Three sections talk about ‘good quality’ or ‘evaluation’ and we need to probably tweak all three sections.

**8.** (g) ensure good quality elementary education conforming to the standards and norms specified in the Schedule;

**8.** (g) ensure good quality elementary education conforming to the standards and norms specified in the Schedule and assessed through regular or at the minimum annual independent evaluation;

**9.** (h) ensure good quality elementary education conforming to the standards and norms specified in the Schedule

**9.** (h) ensure good quality elementary education conforming to the standards and norms specified in the Schedule and assessed through regular or at the minimum annual independent evaluation

**29.** (h) comprehensive and continuous evaluation of child’s understanding of knowledge and his or her ability to apply the same.

**29.** (h) comprehensive and continuous evaluation of child’s understanding of knowledge and his or her ability to apply the same, which is also judged through an independent regular assessment

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

**3.** The Bill would compel the government to build hundreds of thousands of new schools, the neighbourhood schools, which it may or may not be able to do so. It is also clear that this right is not really justiciable, that is, there is no penalty or anything for government failing to build new schools as required. So the only other assurance for children is that government would provide financial support, where it can’t provide a neighbourhood school, to children to attend an equivalent quality school. This requires changes in either Section 3 (1) or in (6) but preferably in both Sections.

**Existing Clause**

**Reworded Clause**

**3\.** (1) Every child of the age of six to fourteen years shall have a right to free and compulsory education in a neighbourhood school till completion of elementary education.

**3\.** (1) Every child of the age of six to fourteen years shall have a right to free and compulsory education in a neighbourhood school till completion of elementary education or in lieu of such school a right to financial support to attend an equivalent quality school.

**6\.** For carrying out the provisions of this Act, the appropriate Government and the local authority shall establish, within such area or limits of neighbourhood, as may be prescribed, a school, where it is not so established, within a period of three years from the commencement of this Act.

**6\.** For carrying out the provisions of this Act, the appropriate Government and the local authority shall establish, within such area or limits of neighbourhood, as may be prescribed, a school, where it is not so established, within a period of three years from the commencement of this Act or in lieu of such school provide financial support to attend an equivalent quality school.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

**4**. The reimbursement to private unaided schools for the 25% quota should be in line with not any government school but the government school of equivalent quality of education and the cost calculations should include fixed or capital as well as the variable expenditures with due allowance for depreciation of assets and interest costs.

**12.** (2) The school specified in sub-clause (iv) of clause (n) of section 2 providing free and compulsory elementary education as specified in clause (c) of sub-section (1) shall be reimbursed expenditure so incurred by it to the extent of per-child-expenditure incurred by the State, or the actual amount charged from the child, whichever is less, in such manner as may be prescribed:

Provided that such reimbursement shall not exceed per-child-expenditure incurred by a school specified in sub-clause (i) of clause (n) of section 2:

**12.** (2) The school specified in sub-clause (iv) of clause (n) of section 2 providing free and compulsory elementary education as specified in clause (c) of sub-section (1) shall be reimbursed expenditure so incurred by it to the extent of total per-child-expenditure incurred by the State in an equivalent quality school, or the actual amount charged from the child, whichever is less, in such manner as may be prescribed:

Provided that such reimbursement shall not exceed per-child-expenditure incurred by a school specified in sub-clause (iii) of clause (n) of section 2:

­­­­­­­­­­­­­­­­­­­­­­\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

**5.** The School Management Committee is a critical new accountability structure in the Bill, but it does not provide minimum representation of mothers and the powers necessary for it to perform its assigned role. Changes in two sections can achieve both of these goals.

**21.** (1) Provided that atleast three-fourth of members of such Committee shall be parents or guardians:

**21** (1) Provided that atleast three-fourth of members of such Committee shall be parents or guardians, and atleast two-third of whom are women

21\. (2) add (d) and the current (d) would become (e)

21\. (d) undertake measures including assessing performance of the staff and taking suitable actions, not limited to recommendations, to assure good quality education as stated in Section 8, sub-section (g) and in Section 9, sub section (h)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

**6.** The ‘specified category’ schools like Kendriya Vidyalaya, Navodaya Vidyalaya are government schools as much as municipal schools and we should not perpetuate the class discrimination under the new milieu. There seems to be no reason to exclude any school, specified category or private unaided school, from the requirement to take transfer students. If we genuinely believe that after this Bill all schools would have ‘good quality education’ then there is no reason to exclude any school from having to take students from any other school.

**5\.** (1) Where in a school, there is no provision for completion of elementary education, a child shall have a right to seek transfer to any other school, excluding the school specified in sub-clauses (iii) and (iv) of clause (n) of section 2, for completing his or her elementary education.

**5\.** (1) Where in a school, there is no provision for completion of elementary education, a child shall have a right to seek transfer to any other school for completing his or her elementary education.

**5.** (2) Where a child is required to move from one school to another, either within a State or outside, for any reason whatsoever, such child shall have a right to seek transfer to any other school, excluding the school specified in sub-clauses (iii) and (iv) of clause (n) of section 2, for completing his or her elementary education.

**5.** (2) Where a child is required to move from one school to another, either within a State or outside, for any reason whatsoever, such child shall have a right to seek transfer to any other school for completing his or her elementary education.

Read more about RTE: [https://spontaneousorder.in/schools\_data\_missing/](https://spontaneousorder.in/schools_data_missing/)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Tata Code of Conduct: Support Liberalisation!

Original: https://www.spontaneousorder.in/p/tata-code-of-conduct-support-liberalisation

Author: Spontaneous Order

Published: 2009-02-03T22:56:06.000Z

Topics: csr, economic-liberalisation, open-markets, business-ethics

> I was pleasantly surprised to learn that Tata group’s code of conduct includes support for open markets and liberalisation! “Competition A Tata company shall fully strive for the establishment and support of a competitive, open market economy in India

**Summary:**

Parth Shah expresses pleasant surprise at the Tata group's code of conduct, which commits companies to strive for a competitive, open market economy in India and abroad while cooperating in the progressive liberalisation of trade and investment. He argues this should form the essence of corporate social responsibility (CSR), critiquing CSR as a flawed concept that implies businesses must justify honest profits through charitable acts. From a classical-liberal viewpoint, authentic CSR entails commitments not to demand government subsidies, avoid using state power to undercut competitors, and recognize that legitimately earned profits require no such justification. Shah promotes a liberal perspective on CSR, referencing his monograph 'CSR: Capitalism at its best or an anti-capitalist mentality?', published by Germany's Liberal Institute, which delves into whether CSR embodies capitalism's strengths or harbors anti-capitalist tendencies. This aligns with his work at the Centre for Civil Society advocating economic freedom, choice, and competition.

**Key points:**

- Tata companies must support competitive open markets and liberalisation of trade and investment.
- CSR should commit businesses to forgo subsidies and refrain from using state power against competitors.
- Profit-earning businesses do not need to justify their existence through charitable giving.
- Shah's monograph examines CSR as either capitalism at its best or an anti-capitalist mentality.

**By Parth Shah**

* * *

I was pleasantly surprised to learn that Tata group’s [code of conduct](http://www.tata.com/aboutus/articles/inside.aspx?artid=NyGNnLHkaAc=) includes support for open markets and liberalisation!

“[Competition](http://www.tata.com/aboutus/articles/inside.aspx?artid=NyGNnLHkaAc=#3)

A Tata company shall fully strive for the establishment and support of a competitive, open market economy in India and abroad and shall cooperate in the efforts to promote the progressive and judicious liberalisation of trade and investment by a country.”

This is what should be part of CSR of the company.  Though i think generally CSR is not the best of terms. In any case, CSR should include not only support for free exchange but also a commitment not to demand subsidies from government or to use state power to undercut competition and so on. It would indeed be interesting to think of a liberal perspective on CSR, that is, what is consistent with the view that businesses that earn honest profits don’t really need to justify their existence by giving a bit of profits away.

The Liberal Institute in Germany has published a monograph of mine (allow me to indulge!) titled *[CSR: Capitalism at its best or an anti-capitalist mentality?](http://www.fnst-freiheit.org/uploads/1044/OC44_Shah.pdf)*

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Forests: Communitisation or Privatisation?

Original: https://www.spontaneousorder.in/p/forests-communitisation-or-privatisation

Author: Spontaneous Order

Published: 2009-02-02T22:37:38.000Z

Topics: forests, property-rights, environmental-policy, communitisation

> The Terracotta Approach to environmental problems suggests that the fundamental issue underlying these problems is the ‘tragedy of the collective’–it is the resource that is collectively/publicly held that gives rise to the problem. [The tragedy of

**Summary:**

Parth Shah's Terracotta Approach identifies the 'tragedy of the collective'—a more precise term than 'tragedy of the commons'—as the root cause of environmental problems in collectively or publicly held resources. The classical-liberal solution is to restructure ownership to community or individual levels, or impose prices on resource use when ownership transfer is infeasible. Shah advocates communitising India's forests and wildlife to tribal communities, arguing this optimally balances conservation, wildlife protection, and livelihoods for forest-dwellers—a position he has long promoted amid resistance. At a recent Delhi ISPP seminar, he was surprised when several young participants argued his communitisation proposal fell short, urging full privatisation of forests and wildlife instead. Shah views this as evidence of maturing intellectual diversity among Indian youth, representing a broader classical-liberal spectrum, and hopes policymakers will catch up. This reflects optimism for property rights-based environmentalism over state control.

**Key points:**

- The 'tragedy of the collective' arises from publicly held resources and can be resolved by shifting to community or individual ownership.
- Communitise forests to tribals to protect forests, wildlife, and support community livelihoods.
- Seminar participants advocated privatising forests and wildlife, pushing beyond communitisation.
- Indian youth show growing intellectual diversity toward stronger property rights solutions.

**By Parth Shah**

* * *

The Terracotta Approach to environmental problems suggests that the fundamental issue underlying these problems is the ‘tragedy of the collective’–it is the resource that is collectively/publicly held that gives rise to the problem. \[The tragedy of the collective is a more accurate term in my opinion than the commonly used ‘the tragedy of the commons.’\]  The basic solution then is to change the resource ownership structure from collective to either community or individual ownership, and when that is not feasible than to put a price on the use of the resource.

Under the Terracotta Approach I have been advocating that our forests should be given to the tribals for management and this is the best way to address both the issues of forest and wildlife protection and conservation and of livelihoods for forest-dwelling communities.  That is, communitise the collectively owned forests and wildlife.  To get even a few people in a large audience to come this far has been a herculean challenge.

Imagine my surprise when at the recent Delhi ISPP (I, Society & Public Policy) Seminar, several participants thought that my arguments for communitisation didn’t go far enough–we should actually privatise forests and wildlife! The Indian youth has matured, has come to represent a wider spectrum of intellectual diversity. Hopefully the Indian policy makers won’t be too far behild!

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Elites Exit & Public Systems Collapse: Right?

Original: https://www.spontaneousorder.in/p/elites-exit-public-systems-collapse-right

Author: Spontaneous Order

Published: 2009-01-28T22:36:12.000Z

Topics: elite-exit, public-education, judicial-system, school-reforms

> It is very commonly made argument these days that public systems are collapsing in India because the elite have exercised their power to ‘exit’ and not to ‘voice’ for change/betterment. Niranjan Rajadhyksha says this in a Mint column: “Say, a sc

**Summary:**

Parth Shah challenges the prevalent argument that India's public systems are collapsing because elites opt for 'exit'—opting out of failing services like schools—rather than 'voicing' demands for improvement. He references Niranjan Rajadhyaksha's column, which posits that quality-conscious parents withdrawing children from declining public schools leaves only less demanding users, reducing pressure for reform and accelerating decline. Shah counters with the judicial system as a counterfactual: even India's richest elites, like Mukesh Ambani, cannot exit and must rely on the same overburdened courts as everyone else. Yet, courts have not improved faster than other government services, directly contradicting the exit-voice thesis. From a classical-liberal perspective emphasizing choice and competition, this suggests that the absence of exit options does not foster better public systems; instead, it highlights systemic failures independent of elite behavior, implicitly advocating for reforms that enable accountability through market-like mechanisms rather than trapping users in monopolies.

**Key points:**

- The elite 'exit' argument claims that better-off users abandoning public schools removes pressure for quality improvements, leading to further decline.
- Courts serve as a counterfactual: elites like Mukesh Ambani have no exit option from the judicial system.
- Despite no elite exit, Indian courts have not improved faster than other public services, disproving the thesis.

**By Parth Shah**

* * *

It is very commonly made argument these days that public systems are collapsing in India because the elite have exercised their power to ‘exit’ and not to ‘voice’ for change/betterment.  Niranjan Rajadhyksha says this in a Mint [column](http://www.livemint.com/2009/01/27205318/The-Indian-elite-in-exit-mode.html):

“Say, a school system is declining in the quality of education it provides. Quality-conscious parents who are relatively better off will pull their children out of these schools and move them to private schools. Price-conscious parents who want their children to be in school and are not aware of quality issues will stay behind. But the loss of the “best” will reduce pressure on the school system to improve its quality. There will be further decline.

Exit is the easy way out but can lead to further decline. This seems to be what is happening in India in various ways.”

I have heard this so many times, particulary in advocacy for school reforms, that i have been thinking hard to find a counterfactual. I think i have come up with one and want to share it here. Well, the counterfactual is our courts!

Think about it. Mukesh Ambani or Shekum Inabma, all have to go to the same courts.  There is no exit for Mukesh Ambani from the Indian judicial system. Has that meant that courts are better compared to other government services? Have they improved at a rate faster than other government services? QED.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## The Entrepreneurial Presidency: Not Just for USA!

Original: https://www.spontaneousorder.in/p/the-entrepreneurial-presidency-not-just-for-usa

Author: Spontaneous Order

Published: 2009-01-25T22:27:59.000Z

Topics: entrepreneurial-governance, limited-government, public-partnerships, education-reform

> Like all the readers, i too simply loved this post by Nathaniel Whittemore at change.org, and am taking the liberty to copy it here. I surely wish i could govern like this and i am sure most of my colleagues at CCS would see great value in this approach..

**Summary:**

Parth Shah of the Centre for Civil Society enthusiastically reposts Nathaniel Whittemore's call for the Obama administration to adopt a startup spirit in governance, wishing to apply it himself and seeing alignment with CCS's classical-liberal approach. The five key principles are: (5) Do more with less by trimming bloated federal budgets, pet projects, tax loopholes, and sinkholes, noting Peter Thiel's view that low CEO pay predicts startup success. (4) Harness team talent around meaningful missions to restore purpose in government service. (3) Partner with business, civil society, and citizens rather than attempting to do everything, convening actors for challenges like education and climate change. (2) Learn continuously from business, civil society, other governments, and citizens, citing the Citizen’s Briefing Book as a start. (1) Iterate and scale successes agilely, like embedding KIPP schools' longer schedules into policy. Bonus: Prioritize impact over ideology for citizens' safety and prosperity, wanting better schools regardless of partisan solutions. Shah praises Obama's social entrepreneurship roots and hopes he brings a Google-like startup ethos to monumental challenges, emphasizing choice, accountability, and limited government.

**Key points:**

- Adopt lean operations in government by cutting bloated budgets and pet projects to do more with less.
- Harness public servants' talents around meaningful missions to restore purpose and effectiveness.
- Convene partnerships with business, civil society, and citizens instead of government doing everything.
- Continuously learn from diverse sources and iterate on promising ideas, scaling successes like KIPP schools' innovations.
- Prioritize measurable impact over ideological battles in policy-making.

**By Parth Shah**

* * *

Like all the readers, i too simply loved this post by [Nathaniel Whittemore](http://www.bcics.northwestern.edu/students/globalengagement/) at change.org, and am taking the liberty to copy it here. I surely wish i could govern like this and i am sure most of my colleagues at CCS would see great value in this approach.  Don’t miss the last point about ideology and impact.

“When I think about what I *really* wish for the Obama administration, it’s that they bring the spirit of a startup to the White House. To me, that means five key things (plus one foundational bonus).

**5\. Do more with less**  
With the pressure of financial failure constantly looming, startups – social enterprise or pure business – need to be lean. In fact, according to famed venture capitalist and Paypal founder Peter Theil, low CEO pay is the best predictor of [startup success](http://www.techcrunch.com/2008/09/08/peter-thiel-best-predictor-of-startup-success-is-low-ceo-pay/). I’m not suggesting that government employees get a big pay cut. But, you don’t have to subscribe to any one particular ideology to recognize that the federal budget is bloated and filled with pet projects, tax loopholes, and budget sinkholes that drain resources from more pressing issues.

**4\. Harnessing your team’s talent around a meaningful mission**  
People love jobs with a sense of mission. For many, government service no longer feels like a good way to change the world. That’s a bummer, because there’s a lot of talented people who would be thrilled to contribute if they felt their capacity would really be harnessed rather than just shoved in a cubicle to languish. Restoring the sense of purpose and actually fully utilizing people’s abilities is key.

**3\. Find the right partners**  
Successful startups don’t do everything. They know their core missions and integrate partners or service providers for everything else. The government not only can’t do everything, it *shouldn’t* do everything. Every challenge we face, from education to climate change, will be solved only through a combination of business, civil society, government, and the contributions of average people. The Obama administration can and should be a convener that brings together these various actors around our most pressing problems.

**2\. Learn from everything**  
Successful startups are sponges of information. Whether its learning from the competition or being inspired to think differently by a random article, successful entrepreneurs tend to always have some part of their mind filtering and assimilating new knowledge. Our government must have the capacity to learn – from business, from civil society, from other governments, and from the real lived experience of its citizens. Initiatives like the [Citizen’s Briefing Book](http://citizensbriefingbook.change.gov/) are a great start.

**1\. Iterate and scale success**  
Perhaps the key characteristic of a successful startup is agility. Because of their comparatively smaller teams and shorter institutional histories, young companies tend to have an easier time responding to changing environments. I would love to see the Obama team embrace a spirit of iteration, where lots of promising ideas are attempted – even if its on a small scale, and sometimes through partners rather than directly by the White House itself – and the best are taken to scale through policy. By way of example, there’s education. How many more examples of successful innovation like the longer schedules of the [KIPP](http://www.kipp.org/) schools do we need before we see a local or national administration try to embed some of those lessons in public policy.

**BONUS: Impact over ideology**  
Finally, and most importantly, it’s important to remember that the primary responsibility of any government is the safety and prosperity of *all* of its citizens. There will, necessarily, be ideological battles to come. But where possible, the primary allegiance of the government should be to impact, not ideology. At the end of the day, I don’t care whether Republicans or Democrats have the silver bullet for issues like education – I want better schools where more students have the chance to live up to their full potential. Period.

It doesn’t take much back-reading to tell how excited I am about the promise of President Barack Obama. I think he [embodies](http://socialentrepreneurship.change.org/blog/view/barack_obama_and_the_american_spirit_of_social_entrepreneurship) the American spirt of community organizing and social entrepreneurship that runs back through people like Jane Addams. I think that he will be a [partner](http://socialentrepreneurship.change.org/blog/view/top_trends_2009_1_a_partner_in_the_white_house) to social entrepreneurs. But I think the challenges he faces are as monumental as we’ve seen in decades. And if President Obama really can bring the spirit of a startup to the White House, lets just hope it’s the next Google.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Treat adults as adults?

Original: https://www.spontaneousorder.in/p/treat-adults-as-adults

Author: Spontaneous Order

Published: 2009-01-24T23:22:18.000Z

Topics: paternalism, individual-liberty, media-regulation, judicial-overreach

> Despite generally paternalistic attitude of courts, the recent Delhi High Court ruling is a step in the right direction: Smoking in films allowed, rules Delhi High Court. No I don’t smoke and I do hope that fewer people do; I do find some types of smoke

**Summary:**

Parth Shah praises the Delhi High Court's ruling allowing smoking depictions in films as a welcome departure from the courts' generally paternalistic stance toward adults. Despite personally not smoking, finding some smoke irritating, and hoping fewer people smoke, Shah emphasizes that the core issue is treating adults as responsible individuals rather than children in need of protection. This decision advances classical-liberal principles by rejecting nanny-state interventions that infantilize citizens and undermine personal choice in entertainment. Shah frames it as a step toward recognizing adult autonomy, countering judicial tendencies to impose moral guardianship on individual behaviors. The ruling, reported in Times of India, signals potential for greater freedom in media content, aligning with Shah's advocacy for economic freedom and choice across sectors.

**Key points:**

- Delhi High Court ruled that smoking depictions in films are allowed, countering typical court paternalism.
- Adults should be treated as responsible individuals, not children requiring state protection from vices like smoking.
- Personal preferences against smoking do not justify restricting adult choices in entertainment.
- This ruling promotes classical-liberal values of autonomy and choice over moralistic regulation.

**By Parth Shah**

* * *

Despite generally paternalistic attitude of courts, the recent Delhi High Court ruling is a step in the right direction: [Smoking in films allowed, rules Delhi High Court.](http://timesofindia.indiatimes.com/Smoking_in_films_allowed_rules_Delhi_High_Court/articleshow/4021114.cms)

No I don’t smoke and I do hope that fewer people do; I do find some types of smoke very irritating, though like the smell of others.  But that really is not the point. The point it to treat adults as adults, not as children.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## CCS Top 8 Think Tank in Asia

Original: https://www.spontaneousorder.in/p/ccs-top-8-think-tank-in-asia

Author: Spontaneous Order

Published: 2009-01-22T23:38:25.000Z

Topics: think-tanks, public-policy, economic-freedom, india

> Top 25 Think Tanks in Asia THE GLOBAL “GO-TO THINK TANKS” The Leading Public Policy Research Organizations In The World University of Pennsylvania 1. Chinese Academy of Social Sciences (CASS) – China 2. Japan Institute of International Affairs (JIIA

**Summary:**

Parth Shah announces that the Center for Civil Society (CCS), a leading Indian think tank promoting economic freedom, choice in education, property rights for the environment, and new public governance, has been ranked 8th among Asia's top 25 think tanks in the University of Pennsylvania's 2008 Global 'Go-To Think Tanks' report. The ranking places CCS ahead of prominent organizations like The Energy and Resources Institute (TERI) at 11th, Liberty Institute at 24th, and several Malaysian and Philippine institutes tied at 25th. Top spots are held by Chinese Academy of Social Sciences (1st), Japan Institute of International Affairs (2nd), and Institute for Defense Studies and Analyses (3rd). This recognition underscores CCS's influence in advancing classical-liberal policies through research and advocacy on choice, competition, and accountability across sectors. Shah, CCS's founder president and co-founder of Indian School of Public Policy, highlights this achievement in the context of the think tank's work, including his edited volume 'Liberalism in India.' The post links to CCS articles on Spontaneous Order, reinforcing its role in Indian civil society and public policy discourse.

**Key points:**

- CCS ranked 8th in University of Pennsylvania's 2008 Top 25 Think Tanks in Asia.
- Outranks Indian peers like TERI (11th) and Liberty Institute (24th).
- Focuses on classical-liberal themes: economic freedom, education choice, property rights, and governance reform.
- Authored by Parth Shah, CCS founder and editor of 'Liberalism in India'.

**By Parth Shah**

* * *

**Top 25 Think Tanks in Asia**

[THE GLOBAL “GO-TO THINK TANKS”](http://www.sas.upenn.edu/irp/documents/2008_Global_Go_To_Think_Tanks.pdf)

The Leading Public Policy Research Organizations In The World

University of Pennsylvania

1\. Chinese Academy of Social Sciences (CASS) – China

2\. Japan Institute of International Affairs (JIIA) – Japan

3\. Institute for Defense Studies and Analyses – India

4\. Center for Strategic and International Studies – Indonesia

5\. Institute for International Policy Studies – Japan

6\. Shanghai Institute for International Studies – China

7\. Institute of Southeast Asian Studies — Singapore

8\. [Center for Civil Society](https://ccs.in/) – India

9\. China Institute for Contemporary International Relations (CICIR) –

China

10\. Institute for Defense and Strategic Studies – Singapore

11\. The Energy and Resources Institute (TERI) – India

12\. Asian Forum Japan (AFJ) – Japan

13\. China Institute for International Studies (CIIS) – China

14\. Lowy Institute for International Policy – Australia

15\. Cathay Institute for Public Affairs – China

16\. Korea Development Institute – South Korea

17\. National Institute for Defense Studies – Japan

18\. National Institute for Research Advancement – Japan

19\. Hong Kong Centre for Economic Research (HKCER) – Hong Kong

20\. Research Institute of Economy, Trade and Industry (RIETI) – Japan

21\. Taiwan Foundation for Democracy – Taiwan

22\. Unirule Institute of Economics – China

23\. Institute of Energy Economics Japan (IEEJ) – Japan

24\. Liberty Institute – India

T25. Malaysian Institute of Economic Research (MIER) – Malaysia

T25. Philippine Institute for Development Studies – Philippines

T25. Third World Network – Malaysia

**Think Tanks and Civil Societies Program, University of Pennsylvania**

Read articles  from Center for Civil Society :[https://spontaneousorder.in/](https://spontaneousorder.in/)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Self-Financing Courts?

Original: https://www.spontaneousorder.in/p/self-financing-courts

Author: Spontaneous Order

Published: 2009-01-21T19:58:35.000Z

Topics: judicial-reform, self-financing-courts, judicial-efficiency, access-to-justice

> One of the suggestions I have been talking about to speed up the courts is to create a separate track of courts that charge fees to file a case high enough to cover the full cost of running the court. These self-financing courts (SFCs), adapting the ph...

**Summary:**

Parth Shah proposes self-financing courts (SFCs) in India, a separate track identical to existing courts in judges, laws, and procedures, but charging fees high enough to cover full operational costs. This classical-liberal reform would attract wealthy litigants seeking faster justice, drawing investment into the judiciary and reducing caseloads in regular courts, thereby speeding up justice for the poor and middle class. Presented at the Bharat Ram Memorial Seminar alongside Professor Avinash Dixit, the idea counters objections that the rich already 'buy' justice today through existing advantages, with no extra influence possible in SFCs due to identical processes. A stronger critique claims two-track courts violate equity by allowing money to buy speedier access to justice, a basic right. Pragmatic arguments note everyone suffers under the status quo and SFCs offer incremental improvement, but Shah seeks a principled fairness defense, highlighting choice and competition to enhance overall judicial efficiency without compromising outcomes.

**Key points:**

- Propose self-financing courts charging full-cost fees to handle cases from wealthy litigants, mirroring existing courts in all other aspects.
- SFCs would reduce backlogs in regular courts, accelerating justice for lower-income users.
- Rich litigants gain no additional outcome influence in SFCs compared to current courts.
- Two-track system challenges equity norms by monetizing speed, prompting need for fairness justification beyond pragmatism.

**By Parth Shah**

* * *

One of the suggestions I have been talking about to speed up the courts is to create a separate track of courts that charge fees to file a case high enough to cover the full cost of running the court.  These self-financing courts (SFCs), adapting the phrase from the more commonly known self-financing colleges, would be similar in all other manners to the existing courts. Their judges would be appointed in the same manner, they would follow the same laws and procedures, and so on.  The only difference is the fee one has to pay to admit the case in the SFC.

The SFC approach would bring more investment in Indian judiciary and as the rich begin to go to the SFCs, the case load in regular courts would be reduced and that would mean speedier justice for the rest of the people.

I again presented this idea today at the Bharat Ram Memorial Seminar on Economics, Lawlessness, and Justice in India with [Professor Avinash Dixit](http://www.princeton.edu/~dixitak/home/). Some thought that the rich would be able to buy justice in the self-financing courts. Obviously that is true as much as it is true today! The rich would have no extra advantage in SFCs in influencing the outcome than they have today in the regular courts. So some of the first objections were easy to deal with.

The larger objection was that the two-track courts violate the basic sense of equity and fairness. Even though the outcome of the cases could be the same under both types of courts, some people would be able to buy speedier justice.  And the society should not or would not tolerate such discrimination on the basis of money in the access to something as basic as justice.

Now one can make quite a few pragmatic arguments that under the current system everyone is worse off, the SFCs courts would at least provide a way, however small, to begin to improve the situation. None of these of course directly address the issue of equity or fairness. Is there any argument that does?

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Impact of Think tanks: How do we know?

Original: https://www.spontaneousorder.in/p/impact-of-think-tanks-how-do-we-know

Author: Spontaneous Order

Published: 2009-01-19T22:24:44.000Z

Topics: think-tanks, impact-measurement, nonprofit-performance, social-capital-markets

> Jason Saul provides an interesting way to think about the question that worries all nonprofits, particularly think tanks: How do we know whether we are making an impact? What convinced to read more of his writings was how he began in the piece: “…it

**Summary:**

Parth Shah highlights Jason Saul's framework for think tanks and nonprofits to assess impact by asking the right questions, shifting from effectiveness or accountability to performance—what works best. Saul, founder-CEO of Mission Measurement and co-founder of the Center for What Works in 1994, argues that nonprofits operate in a $1 trillion social capital market of donors, foundations, corporations, governments, and consumers allocating resources to social outcomes. Measurement serves as the currency proxy for created value: positive social outcomes. Social investors should prioritize performance and results over downside risks or basic efficacy. Funders must transition from financing activities to purchasing results, while nonprofits move from fundraising to selling outcomes. This market-oriented approach aligns with classical-liberal emphases on choice, competition, and accountability, urging think tanks like the Centre for Civil Society to benchmark and demonstrate superior impact to attract resources effectively.

**Key points:**

- Nonprofits and think tanks should measure performance (what works best) rather than just effectiveness or accountability.
- The social sector functions as a $1 trillion market where measurement acts as currency for value in positive social outcomes.
- Funders need to shift from financing activities to purchasing results.
- Nonprofits must reorient from fundraising to selling outcomes.

**By Parth Shah**

* * *

[Jason Saul](http://www.change.org/profiles/jsaul) provides an interesting way to think about the question that worries all nonprofits, particularly think tanks: How do we know whether we are making an impact? What convinced to read more of his writings was how he began in [the piece](http://socialentrepreneurship.change.org/blog/view/charitys_existential_dilemma_are_we_really_making_a_difference): “…it’s not that we can’t figure out the answer – it’s that we can’t seem to ask the *right questions*.  Solving this problem requires a clearer understanding of what we are trying to accomplish with measurement.” Yes, what are the questions? That’s my style of thinking!

He continues: Most often, the real measurement inquiry is not about effectiveness (what works) or accountability (what doesn’t), but about performance (what works *best*). He is founder CEO of [Mission Measurement](http://www.missionmeasurement.com/content/home). In 1994, he co-founded the [Center for What Works](http://www.whatworks.org/), a nonprofit organization focused on benchmarking.

[

![](http://www.grabup.com/uploads/58765a9566d632f6c77c062b865cc969.png?direct)



](http://www.grabup.com/uploads/58765a9566d632f6c77c062b865cc969.png?direct)

So how do we generate performance data? We need to accept that we operate within a market: a $1 trillion social capital market that consists of donors, foundations, corporations, governments and consumers who allocate resources to social outcomes.  Measurement is the *currency* of the social capital market.  Measurement is the proxy for *value* created: positive social outcomes.  Social investors need to start asking better questions – not about downside risks or efficacy (those should be a given) – but about performance and results.  Second, funders must shift their thinking from financing charitable activities to “purchasing results.”  Nonprofits must also change their thinking: from fundraising to “selling outcomes.”

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Nandita Das against Censorship

Original: https://www.spontaneousorder.in/p/nandita-das-against-censorship

Author: Spontaneous Order

Published: 2009-01-18T15:20:35.000Z

Topics: censorship, free-speech, film-regulation

> Nandita Das takes on two members of the Censor Board, Deepmala Mohan and Aruna Mukim, and tells them where they should take their scissors! In the heat of the discussion, one member reveals that the Board is thinking of A+ rating for adult films for peo..

**Summary:**

This brief, fragmentary 2009 post by Parth Shah praises actress Nandita Das for confronting Censor Board members Deepmala Mohan and Aruna Mukim over their censorship demands, telling them metaphorically to 'take their scissors' elsewhere. In the exchange, a board member reveals consideration of an 'A+ rating' for adult films restricted to those over 25, which Shah sarcastically hails as innovative generosity from the board. From a classical-liberal viewpoint, it critiques government censorship of films as overreach, highlighting Das's bold stand for creative freedom.

**Key points:**

- Nandita Das publicly challenges Censor Board members Deepmala Mohan and Aruna Mukim against cutting films.
- Censor Board contemplates 'A+ rating' for adult content limited to viewers over 25.
- Shah mocks the board's 'innovation' to underscore anti-censorship stance.

**By Parth Shah**

* * *

[

![](https://substackcdn.com/image/fetch/$s_!dsvW!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F1cc196da-c5a1-47db-97d5-a2ce9c2e70af_211x602.jpeg "n-das11")



](https://spontaneousorder.in/wp-content/uploads/2009/01/n-das11.jpg)

Nandita Das [takes on](http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOI&BaseHref=CAP/2009/01/18&PageLabel=47&EntityId=Ar04700&ViewMode=HTML&GZ=T) two members of the Censor Board, Deepmala Mohan and Aruna Mukim, and tells them where they should take their scissors! In the heat of the discussion, one member reveals that the Board is thinking of A+ rating for adult films for people over the age of 25. I guess we all ‘adults’ must be grateful for such innovation, thoughtfulness and the generosity of the Censor Board!

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Greedy Politicians or Industrialists: Blame the Society

Original: https://www.spontaneousorder.in/p/greedy-politicians-or-industrialists-blame-the-society

Author: Spontaneous Order

Published: 2009-01-16T15:30:40.000Z

Topics: corruption, business-ethics, societal-values, political-accountability

> The common rebuttal to anyone who blamed politicians or politics for the ills of society was that we elect them and they are part of the larger society so ultimately the blame is on us only. I always complained that with this line of reasoning politici...

**Summary:**

Parth Shah highlights a double standard in societal blame: while critics of corrupt politicians are told 'we elect them, so blame society,' no one says the same for corrupt businessmen, whose 'pots of money' come from our voluntary purchases, reflecting the same societal values. He welcomes Ramesh Ramanathan's January 15 Mint column, which frames the Satyam scandal as a lesson on market failings rooted in ethics and values, portraying the Raju brothers as victims of society's worship of material success. This consistent application—blaming societal convictions and values as the 'fountainhead' for actions in both politics and business—resolves Shah's long-standing complaint. From a classical-liberal viewpoint, this underscores how politicians and industrialists alike mirror society's flawed priorities, advocating accountability through choice rather than excusing systemic ills.

**Key points:**

- Society inconsistently blames itself for corrupt politicians (via elections) but not for corrupt businessmen (via purchases).
- Ramanathan attributes the Satyam scandal to society's value system that idolizes material success, victimizing even ambitious business families.
- Both politicians and businessmen reflect the broader society's ethics and convictions as the root of corruption.

**By Parth Shah**

* * *

The common rebuttal to anyone who blamed politicians or politics for the ills of society was that we elect them and they are part of the larger society so ultimately the blame is on us only.  I always complained that with this line of reasoning politicians go scott free but no one says the same when we find a scandal among businessmen. That is, no one says businessmen earn pots of money because we voluntarily buy their goods and services (like we vote for politicians) and they also come from the same larger society so their values reflect our values. So when we meet a corrupt businessman, we should just blame ourselves, like we do in case of a corrupt politician.

Ramesh Ramanathan finally has put my complaint to rest.  In Jan 15 Mint [column](http://www.livemint.com/2009/01/14223143/The-tao-of-markets.html) he says:

The Satyam scandal is a painful and scorching lesson on the failings of the market…But there is a deeper and more unsettling angst. This has to do with ethics and values. Our actions come from our convictions. Our convictions are born of our values. In this sense, values are the fountainhead… And also instances such as Satyam, where an ambitious business family gets onto a tiger it doesn’t quite know how to dismount. The tragedy of the Raju brothers is that they are also victims of our society’s evolving value system, as we worship the gods of material success (my emphasis).

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Tide is Turning: Understanding of the Global Crisis

Original: https://www.spontaneousorder.in/p/tide-is-turning-understanding-of-the-global-crisis-2

Author: Spontaneous Order

Published: 2009-01-15T15:47:32.000Z

Topics: global-financial-crisis, fiscal-policy, tax-cuts, regulatory-reform

> Recent articles in some of the top newspapers and journals suggest that finally the fear psychosis that clouded our understanding of the global financial crisis and particularly the tools to deal with it is slowly lifting. I am going on a limb and picki..

**Summary:**

Parth Shah observes that the 'fear psychosis' obscuring understanding of the global financial crisis—and appropriate responses—is lifting, pinpointing a Wall Street Journal article by Paul Kennedy on January 14 as the turning point. Titled 'American Power is on the Wane,' the piece shifts focus to the crisis itself, signaling a classical-liberal pivot away from panic-driven interventions. Shah anticipates the Obama Administration will soon demonstrate this new clarity: within its first weeks, expect no second bailout package, but instead discussions centering tax cuts for pump-priming the economy. Emphasis will shift to structural reforms, regulatory changes, and enhanced disclosure norms, aligning with principles of economic freedom over expansive government spending. This prediction reflects optimism for policies fostering choice, competition, and accountability amid crisis, rather than perpetuating bailouts that distort markets. Shah's view underscores a broader liberal critique of interventionist approaches that prolonged uncertainty.

**Key points:**

- A WSJ article by Paul Kennedy on January 14 marks the turning point in understanding the global financial crisis, lifting the fear psychosis.
- The Obama Administration is expected to avoid a second bailout package in its early weeks.
- Tax cuts will replace bailouts as the focus for economic stimulus or 'pump priming.'
- Policy emphasis will shift to structural reforms, regulatory changes, and disclosure norms.

**By Parth Shah**

* * *

> Recent articles in some of the top newspapers and journals suggest that finally the fear psychosis that clouded our understanding of the global financial crisis and particularly the tools to deal with it is slowly lifting. I am going on a limb and picking the WSJ [article](http://online.wsj.com/article/SB123189377673479433.html) by Paul Kennedy as the turning point. The title of the article is *American Power is on the Wane* but the important part of it is about global crisis. So 14 January is the date on which the tide has turned in my opinion.
> 
> I now suspect that Obama Administration would begin to show signs of this new understanding. Within the first couple of weeks in the office, we should hear a different message than has been common so far. How would we know this? There won’t be a second bailout package. Instead tax cuts would begin to occupy the  discussion on pump priming. Focus would be on structural and regulatory changes and disclosure norms.
> 
> Let’s see.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Big Government is Not Stimulus: Well Said!

Original: https://www.spontaneousorder.in/p/big-government-is-not-stimulus-well-said

Author: Spontaneous Order

Published: 2009-01-15T15:37:06.000Z

Topics: keynesianism, government-spending, fiscal-policy

> In less than four minutes, Dan Mitchell of the Cato Institute reviews the theory and history of Keynesian policies, and demonstrates that more government spending does not spur economic growth. The video is very timely since government spending has incr..

**Summary:**

Parth Shah endorses Dan Mitchell's Cato Institute video, which concisely reviews Keynesian theory and history to argue that increased government spending fails to spur economic growth. From a classical-liberal perspective, this critique is especially relevant amid dramatic spending rises under President Bush and Barack Obama's proposed $800 billion-plus in additional debt-financed expenditure. Shah highlights the video's brevity—under four minutes—while recommending a longer seven-and-a-half-minute CF&P video for a fuller debunking of Keynesianism, reinforcing the view that big government is not genuine stimulus but counterproductive intervention.

**Key points:**

- Dan Mitchell's video demonstrates through theory and history that Keynesian government spending does not drive economic growth.
- U.S. government spending surged under Bush, with Obama proposing another $800 billion in debt-funded outlays.
- A companion CF&P video provides comprehensive evidence against Keynesianism.

**By Parth Shah**

* * *

In less than four minutes, **Dan Mitchell of the [Cato Institute](http://rs6.net/tn.jsp?e=001fya1184F95xvhEKb6X9YOwaf8pG2_SLXt3X8uWMgkF5TCSsnPLZmHLHbRmTPgyvqgthMNZK8tnpWu7Otlwx0fYEg74kpifmN9RgDULaReVU= "http://rs6.net/tn.jsp?e=001fya1184F95xvhEKb6X9YOwaf8pG2_SLXt3X8uWMgkF5TCSsnPLZmHLHbRmTPgyvqgthMNZK8tnpWu7Otlwx0fYEg74kpifmN9RgDULaReVU=")** reviews the theory and history of Keynesian policies, and demonstrates that more government spending does not spur economic growth. The video is very timely since government spending has increased dramatically under Bush and now Obama wants to add another $800-billion plus of debt to finance even more spending.

To see the more comprehensive, seven and one-half minute CF&P video debunking Keynesianism, see

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Which NGO would you close down?

Original: https://www.spontaneousorder.in/p/which-ngo-would-you-close-down

Author: Spontaneous Order

Published: 2009-01-14T15:52:26.000Z

Topics: population-control, family-planning, ngo-critique, individual-choice

> It is an interesting question, isn’t it? if you were to choose one non-profit to close down, which one would that be? My death wish is on Population First! They cleverly go with the times and don’t say clearly that their goal is to control population.

**Summary:**

Parth Shah targets Population First NGO for closure, accusing it of covertly advocating population control under euphemistic language like 'balanced, planned and stable population' and explicit goals of reducing gender imbalances, investing for current and future populations, and achieving a family size of two children per couple. He questions who defines 'balanced' or 'stable'—the couple, family, community, society, or state?—highlighting a classical-liberal preference for individual and family choice over centralized planning. Despite the NGO's claims of working within women's rights and social development frameworks, where high fertility correlates with low social development and gender inequality, Shah dismisses this as politically correct cover for number-focused control. Referencing Nandan Nilekani's consensus that population is not a liability in India, Shah urges establishing such a view if absent. In a scenario of eliminating one non-profit, he insists on starting with Population First to prioritize choice and reject coercive stabilization.

**Key points:**

- Population First disguises population control goals with terms like 'balanced, planned and stable population'.
- The NGO explicitly aims for a family size of two children per couple.
- Shah questions who should decide population balance: individuals or the state.
- Population is not a liability, per consensus cited from Nandan Nilekani.
- Close Population First as the first NGO to eliminate.

**By Parth Shah**

* * *

It is an interesting question, isn’t it? if you were to choose one non-profit to close down, which one would that be?

My death wish is on [Population First](http://www.populationfirst.org/)! They cleverly go with the times and don’t say  clearly that their goal is to control population. But what else could this mean? “[Population First is a communications and advocacy initiative for a balanced, planned and stable population](http://www.populationfirst.org/aboutus).”  ‘Balanced, planned and stable?’ Who decides what’s ‘balanced’ or ’stable?’ And who ‘plans’-the couple, the family, the community, the society, the state?

Further, “Reducing gender imbalances in population, investing for the current and future population and reaching the goal of a family size of two children per couple are our key communications objectives.” No they don’t want to control population, just achieve a family size of two!?

They of course also say a lot of politically correct things: “Population First is an NGO working on population and health issues within the framework of women’s rights and social development. We believe that population is not an issue of numbers alone. Numbers are but a manifestation of poor social development and lack of access to health and contraceptive services. Across the country, fertility is highest where social development is low and gender inequality is high.”

Nandan Nilekani says that one idea where there is consensus in India is that population is not a liability. Well, if there is no consensu, then there should be one.

> If we are going to have one less non-profit in India, i say start with Population First. What say you?

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Private schools continue to gain ground

Original: https://www.spontaneousorder.in/p/private-schools-continue-to-gain-ground

Author: Spontaneous Order

Published: 2009-01-14T15:50:18.000Z

Topics: education, private-schools, school-choice

> ASER 2008 report is out and the enrollment in private schools has increased to 22.5% of the students in rural areas. Yes, the report covers only the rural areas of India. We still don’t have accurate information about urban areas of India. In some stat.

**Summary:**

The ASER 2008 report indicates that enrollment in private schools in rural India has increased to 22.5%, with significantly higher rates of up to 70% in states like Punjab and Haryana, reflecting growing parental preference for private education options. This trend aligns with the classical-liberal emphasis on choice and competition in education, as promoted by the Centre for Civil Society. Dr. William Wadhwa, a statistician, analyzes the data to address whether private schools provide higher quality education (pp. 9-11), concluding 'it depends' rather than a straightforward yes or no. The post urges readers to examine the analysis closely and engage in discussion, highlighting the need for nuanced evaluation amid the expansion of private schooling. While urban data remains unavailable, the rural figures underscore the momentum of market-driven educational alternatives in a context of public sector limitations. This development supports advocacy for policies enhancing choice and accountability across public and private sectors.

**Key points:**

- ASER 2008 shows rural private school enrollment at 22.5% nationally, rising to 70% in Punjab and Haryana.
- Dr. William Wadhwa's statistical analysis concludes private school quality 'it depends' (pp. 9-11).
- The post calls for careful reading and discussion of the data on private vs. public education outcomes.
- Private school growth signals parental demand for choice in India's rural education landscape.

**By Parth Shah**

* * *

ASER 2008 [report](http://pratham.org/) is out and the enrollment in private schools has increased to 22.5% of the students in rural areas.  Yes, the report covers only the rural areas of India. We still don’t have accurate information about urban areas of India. In some states like Punjab and Haryana, it is as much as 70%.

Dr Willima Wadhwa uses the ASER data to answer this improtant question–private schools: Do They Provie Higher Quality Education? (pp 9-11 of the report). As a statastician, her answer is “it depends.” But let’s read it carefully and discuss it.

Read more articles on education : [https://spontaneousorder.in/multipronged-approach-to-education/](https://spontaneousorder.in/multipronged-approach-to-education/)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Increasing cost of sex trafficking

Original: https://www.spontaneousorder.in/p/increasing-cost-of-sex-trafficking

Author: Spontaneous Order

Published: 2009-01-12T15:55:10.000Z

Topics: economic-freedom, sex-trafficking, market-competition

> NICHOLAS D. KRISTOF’s Striking the Brothels’ Bottom Line in NYT talks about how increased raids and NGO activism has begun to close down brothels in Cambodia. He argues that the brothel model based on trafficked girls is more vulnerable than generally

**Summary:**

Parth Shah highlights Nicholas Kristof's NYT article on how raids and NGO activism are closing brothels in Cambodia, arguing the trafficked-girls model is vulnerable. Shah notes brothel owners' admission that they would earn more money and gain respect running grocery stores, advocating increased economic freedom to provide such alternatives as a path forward. He applies a classical-liberal lens to the economics of coercion: brothels relying on violence to control trafficked girls face high costs—unpleasant workers unable to serve higher-paying hotel clients—making violence inefficient. In a competitive market, brothels using non-violent monitoring should outcompete violent ones. Consequently, operations with 'willing' girls should prevail over trafficking-dependent brothels that require more violence. Shah questions whether this market process realistically applies, suggesting competition could undermine trafficking without solely relying on raids.

**Key points:**

- Brothel owners in Cambodia claim they would profit more and gain respect from running grocery stores instead.
- Increasing economic freedom offers viable alternatives to lure owners out of the brothel business.
- Violence to control trafficked girls raises costs, making such brothels less competitive in a market setting.
- Brothels with 'willing' girls using non-violent methods should outcompete trafficking-based operations.
- Market competition's potential to reduce trafficking warrants examination beyond raids and activism.

**By Parth Shah**

* * *

NICHOLAS D. KRISTOF’s *Striking the Brothels’ Bottom Line* in [NYT](http://www.nytimes.com/2009/01/11/opinion/11kristof.html?_r=1&th&emc=th) talks about how increased raids and NGO activism has begun to close down brothels in Cambodia. He argues that the brothel model based on trafficked girls is more vulnerable than generally imagined.

What i found interesting is the comment by brothel owners that they would make more money running grocery (rice) store and would be more respected!  Opening up more attractive alternatives is surely one way to move forward. Increase economic freedom, right?

Some brothels try to control girls through sheer violence and fear. And Kristof rightly points out that the cost of achieving compliance through violence is high–girls are not as pleasant, they cananot go out to hotels which earns more money, and so on.  If violence is more costly than non-violent means of monitoring then in a competitive market, the brothels that use violence should get out-competed.  If that is so, then the brothels that traffick and thereby have to resort to more violence than the brothels that have more ‘willing’ girls, the latter should outcompete the former. Is this realistic application of competitive market process? How do we know?

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## 2 Million Minutes in Schools of China, India, US

Original: https://www.spontaneousorder.in/p/2-million-minutes-in-schools-of-china-india-us

Author: Spontaneous Order

Published: 2009-01-10T15:57:23.000Z

Topics: education, k-12-education, international-comparison

> Check out this great DVD 2 Million Minutes! I learned about it thanks to Sudhakar: “The producer of the DVD, Bob Compton, is a venture capitalist and an angel investor in several technology companies worldwide. His venture funding includes several compa

**Summary:**

This short post recommends the documentary DVD '2 Million Minutes,' produced by venture capitalist Bob Compton, who was impressed by the general knowledge of employees at his Indian and Chinese portfolio companies and investigated their K-12 education systems. The film compares the roughly 2 million minutes a typical high school student spends over four years in the US, China, and India. No substantive argument is presented beyond the endorsement.

**Key points:**

- Recommends purchasing and watching the '2 Million Minutes' documentary on high school education in US, China, and India.

**By Parth Shah**

* * *

Check out this great DVD 2 Million Minutes! I learned about it thanks to [Sudhakar](http://itsactiontime.blogspot.com/2009/01/documentary-review-2-million-minutes-in.html): “The producer of the DVD, Bob Compton, is a venture capitalist and an angel investor in several technology companies worldwide. His venture funding includes several companies in India and China. Bob mentions that when he visited these companies and met their employees, their “well roundedness” and the depth of general knowledge impressed him. He then proceeded to look into the K-12 education system, and was impressed even more. His passion for the topic of education led to the first documentary “2 Million Minutes”, which depicted the time a typical high school student spends in the four years (which add up to roughly 2 million minutes) in the US, China and India.” Buy it from www.2mminutes.com

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Bailouts harm free markets

Original: https://www.spontaneousorder.in/p/bailouts-harm-free-markets

Author: Spontaneous Order

Published: 2009-01-08T15:59:22.000Z

Topics: bailouts, free-markets, government-intervention, market-legitimacy

> Manish Sabharwal is right on the ball in today’s Mint: “By demanding fiscal relief, do managers realize or care about the damage they do to the legitimacy of markets when voters and politicians see private profits and socialized losses?… Big bailout

**Summary:**

Parth Shah endorses Manish Sabharwal's critique in Mint that corporate demands for fiscal relief from bailouts damage the legitimacy of free markets, as voters and politicians witness private profits paired with socialized losses. This perception corrodes business efficiency by incentivizing managers to prioritize political favor over customer satisfaction, making lobbying more profitable than market competition. Shah invokes Herbert Spencer's warning that shielding individuals from the consequences of folly ultimately populates the world with fools. He cites historical failures like the GM bailout and the UK government's $16 billion expenditure on British Leyland before abandoning it, positioning such interventions as on the 'wrong side of history.' From a classical-liberal viewpoint, bailouts undermine market credibility and efficiency, reinforcing the need for unshielded accountability to foster genuine economic freedom and competence.

**Key points:**

- Bailouts erode free market legitimacy by combining private profits with socialized losses.
- They incentivize businesses to seek political favor over customer satisfaction, harming efficiency.
- Historical examples like GM and UK’s $16 billion British Leyland bailout prove bailouts fail and shield folly.
- Shielding from folly, per Herbert Spencer, creates fools and undermines markets.

**By Parth Shah**

* * *

Manish Sabharwal is right on the ball in today’s [Mint](http://livemint.com/2009/01/07224041/The-consequences-of-confusing.html?pg=1): “By demanding fiscal relief, do managers realize or care about the damage they do to the legitimacy of markets when voters and politicians see private profits and socialized losses?…

Big bailouts not only undermine the credibility of markets but few things corrode business efficiency more than the realization that it is more profitable to win the favour of politicians than the favour of customers.

Herbert Spencer the British philosopher said the ultimate result of shielding man from the effects of his folly is to people the world with fools. Bailouts such as GM are on the wrong side of history; the UK government spent $16 billion on British Leyland before they gave up.”

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Administrative Reforms and Ethics in Government

Original: https://www.spontaneousorder.in/p/administrative-reforms-and-ethics-in-government

Author: Spontaneous Order

Published: 2009-01-06T16:01:17.000Z

Topics: administrative-reforms, electoral-reforms, governance-ethics, welfare-reform

> FICCI has started a new series of seminars on Governance & Politics. Today was their first conference with Administrative Reforms Commission chair Veerappa Moily and others. I also spoke on the panel, got about 10 mins of time. In the audience were pa...

**Summary:**

Parth Shah, founder of Centre for Civil Society, presented talking points at FICCI's first Governance & Politics conference with Administrative Reforms Commission chair Veerappa Moily, advocating classical-liberal reforms to enhance government accountability, transparency, and individual liberty. On government structure, he proposed fixed terms for parliament/assembly, fixed sitting schedules, non-MP cabinet members except PM/CM, empowering MPs to vote conscience by repealing anti-defection provisions (Schedule 10), and open budget processes. For political parties, declare donors and audited accounts. Sovereign functions require 4% budget allocation to police and judiciary with full-price courts. Direct democracy includes local referendums, direct mayor elections as CEO, and citizen tax allocation. Replace welfare schemes with vouchers/cash transfers, national ID for monitoring, and sunset clauses. Ethics demand RTI Section 4 transparency, performance pay via citizen charters and benchmarks, equal standards under consumer protection act, and self-criticism culture. Extend reforms to corporate/media/non-profit: deregulate informal sector, devolve natural resources to locals, abolish Essential Commodities Act/APMCs/export restrictions to free farmers. Concludes with state attitude: people are rational, responsible, self-governing under right incentives and laws—display in every office.

**Key points:**

- Implement fixed terms and sittings for parliament/assembly, allow non-MP cabinet members, and repeal anti-defection law to empower conscience voting.
- Allocate 4% of budget to police and judiciary, introduce full-price courts, and enable citizen tax allocation to expenditure heads.
- Replace welfare schemes with vouchers/cash transfers, add sunset clauses, and use national ID for selection/monitoring.
- Enforce transparency via RTI, performance pay with citizen charters, equal consumer protections for government services, and self-criticism in government branches.
- Deregulate informal sector, devolve natural resources to locals, and abolish Essential Commodities Act, APMC, and trade restrictions to free farmers.

**By Parth Shah**

* * *

> FICCI has started a new [series](http://www.ficci.com/fgps/index.htm) of seminars on Governance & Politics. Today was their [first conference](http://www.ficci.com/fgps/agenda.htm) with [Administrative Reforms Commission](http://arc.gov.in/index.htm) chair Veerappa Moily and others.  I also spoke on the panel, got about 10 mins of time.  In the audience were participants of CCS Advance Liberty for Change Seminar! Yes, we brought all of them to see the action.  Here are my talking points at the conference:
> 
> Government Structure
> 
> Fixed term for the parliament/assembly
> 
> Fixed schedule of sittings with provision for emergency sittings
> 
> Except for the PM/CM, other cabinet members don’t have to be members of the parliament/assembly
> 
> Empower each member for the parliament/assembly to vote their conscience (Anti-defection act, schedule 10)
> 
> Remove the secrecy around budget—open and transparent process
> 
> Political parties and electoral system
> 
> Declare donors and audited party accounts
> 
> Sovereign functions
> 
> Defense expenditures have a strong and vocal lobby but not so for police and judiciary, so fix a percentage of budget allocation to them (4%); Full Price court
> 
> Direct/participatory democracy
> 
> Create areas for referendums at the local government level
> 
> Direct elections for the third-tier of government (mayor as CEO)
> 
> Ask citizens to allocate their taxes to broad headings of expenditures
> 
> Welfare schemes
> 
> Begin to replace them with vouchers and cash transfers
> 
> National ID for selection and monitoring
> 
> Include sunset clause in all welfare schemes
> 
> Ethics:
> 
> Transparency (Section 4 of the RTI Act);
> 
> Performance pay (citizen charters, report card, benchmarks, fixed year contract;
> 
> Impose the same standards and punishments for state provided services as are imposed on the non-state providers (include government services in consumer protection act);
> 
> Culture of self criticism and assessment (each branch of government should reflect and come up with suggestions to improve)
> 
> Corporate, Media, and Non-profit sector governance
> 
> Remove license raj for the informal sector—FICCI as their chamber of commerce
> 
> Give management of natural resources to the forest dwellers and local people
> 
> Abolish Essential Commodities Act, APMCs, export-import restrictions—Free the Farmer
> 
> State Attitude: We believe that people are **rational,** **responsible, and self-governing** given the right set of incentives and framework of law. Put it in every government office!

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## New Year Musings

Original: https://www.spontaneousorder.in/p/new-year-musings

Author: Spontaneous Order

Published: 2009-01-02T19:58:00.000Z

Topics: personal-values, libertarianism, corporate-governance, checks-balances

> 2008 has indeed been an eventful year with a serious impact on how we think about ourselves and the world. My one learning was in preparing for a talk for the Foundation for Restoration of National Values. What are these values, how do we come to acqui...

**Summary:**

Parth Shah reflects on 2008's events, framing a talk on national values around convincing his 11-year-old nephew to tell the truth. He groups his core values as Personal (Rationality, Honesty, Integrity), Social (Tolerance, Benevolence, Free Exchange), and Political (Liberty, Rule of Law, Subsidiarity), questioning their haphazard acquisition amid life's influences and threats from groups promoting opposite values, relativism, or nihilism. Linking recent corporate frauds like Satyam to value deficits, he rejects this as capitalism's end, reaffirming faith in a libertarian utopia of universal peace, harmony, prosperity, and borderless individual potential. The year's big lesson: strengthen checks and balances across state, market, and civil society, with public policy playing a critical role in governance evolution to guard against mis-governance everywhere and advance this classical-liberal vision.

**Key points:**

- Core values divide into personal (rationality, honesty, integrity), social (tolerance, benevolence, free exchange), and political (liberty, rule of law, subsidiarity).
- Corporate scandals like Satyam stem from value erosion, not capitalism's failure.
- Strengthen checks and balances in state, market, and civil society to prevent mis-governance.
- Public policy must critically support governance evolution toward a libertarian utopia of peace and prosperity.

**By Parth Shah**

* * *

2008 has indeed been an eventful year with a serious impact on how we think about ourselves and the world.  My one learning was in preparing for a talk for the [Foundation for Restoration of National Values](http://www.brahmavidya.org/FRNV/index.htm). What are these values, how do we come to acquire them and why do we follow them? All the issues were captured in one simple question: How do I convince my 11 year old nephew to tell the truth? Yes, how?

I reflected on my own values, grouping them under three heads: **1\. Personal Values**: Rationality, Honesty, Integrity;

**2\. Social Values**: Tolerance, Benevolence, Free Exchange;

**3**. **Political Values:** Liberty, Rule of Law, Subsidiarity.

How did I come to believe in them and practice them?  I can’t really decipher among all the varied influences over the whole period of life.  It seems that such a critical aspect of our life is left practically to chance. It becomes a serious concern when there are organized groups that preach and practice diametrically opposite values. Or suggest that there are no foundational values at all—relativism and nihilism.

Some of the worst corporate malpractice, fraud and theft we have seen recently reflects this lack of values. The latest example is of Satyam. Is it the end of capitalism or of basic values?  I still believe in the libertarian utopia of universal peace, harmony and prosperity, a borderless world where all individuals can live upto their potential and fulfill their dreams.

However the big learning of 2008 is that we need to think harder and strengthen the system of checks and balances across the state, market and civil society. And that the state and public policy would play a far more critical role in the evolution of our utopia. Along with the state governance, we need to focus on corporate governance and the governance of civil society organizations. We need to guard against mis-governance in the state, market and the civil society.

The official CCS blog, Spontaneous Order, was ‘stolen’ a while ago. We have now got back all the old posts, see it at [www.ccs.in/blog](https://spontaneousorder.in/ "http://www.ccs.in/blog"). We will start new entries from Jan 1. Do send your posts and comments.

May the New Year give us the time and courage to reflect on our basic values: Think, Speak, and Act.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Spontaneous Order Relaunched!

Original: https://www.spontaneousorder.in/p/spontaneous-order-relaunched

Author: Spontaneous Order

Published: 2009-01-01T19:56:03.000Z

Topics: centre-for-civil-society, think-tanks, economic-freedom

> Welcome back to the CCS Blog! From January 2004 to April 2006, the Team CCS wrote on this Spontaneous Order blog. For some reason, our free host decided to block it and we also lost the domain sponatenousorder.org after a while. Well, that’s old story..

**Summary:**

This short announcement post by Parth Shah relaunches the Spontaneous Order blog on January 1, 2009, after recovering old entries from its original 2004-2006 run, which was lost due to hosting blocks and domain issues. Akash Senapaty assisted in retrieval, and the post invites former contributors to rejoin as guest authors, proclaiming 'The Power of Ideas gets one more voice today.' It includes Shah's bio as founder-president of Centre for Civil Society (CCS), a think tank advocating economic freedom, choice and competition in education, property rights for the environment, and new public governance; he co-founded Indian School of Public Policy and edited Liberalism in India.

**Key points:**

- Spontaneous Order blog relaunched in 2009 with recovered 2004-2006 posts.
- Akash Senapaty retrieved the lost archives.
- Invites past contributors to become guest authors.
- Parth Shah leads CCS in promoting classical-liberal themes like economic freedom and education choice.

**By Parth Shah**

* * *

Welcome back to the CCS Blog!  From January 2004 to April 2006, the Team CCS wrote on this Spontaneous Order blog. For some reason, our free host decided to block it and we also lost the domain sponatenousorder.org after a while.  Well, that’s old story.

Sometime ago I was lamenting this loss and Akash Senapaty, who was working with me then, said that he can find all the old posts if we wanted to revive it.  And soon he did.  And i was itching to get started but it took a bit of help to decide on the new blog structure and repost the old entries on the new site.  But here we are on the first day of 2009!

Many of you will see your posts here and if you like to rejoice the old excitement, do let me know and i would be happy to make you a guest author.

The Power of Ideas gets one more voice today!

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## CCS Impact:

Original: https://www.spontaneousorder.in/p/ccs-impact

Author: Spontaneous Order

Published: 2006-04-10T07:18:06.000Z

Topics: rti, digitization, government-transparency, bureaucratic-efficiency

> Recently, at a RTI seminar, the Chief Information Commissioner, Wajahat Habibullah, dwelt at some length on the relevance of digitizing government records. In the course of his deliberation, he said that computerizing government records would reduce the..

**Summary:**

At a recent RTI seminar, Chief Information Commissioner Wajahat Habibullah emphasized the relevance of digitizing government records, stating that computerizing them would reduce the burden on government officials. This remark came as a pleasant surprise to the Centre for Civil Society (CCS), which has long advocated for public authorities to upload information disclosed under the Right to Information (RTI) Act directly onto their websites. CCS's core argument mirrors the CIC's point: proactive online disclosure of RTI responses would significantly alleviate the workload on government officials in the long run. From a classical-liberal perspective, this approach promotes greater transparency and efficiency by minimizing repetitive bureaucratic tasks, empowering citizens with easier access to information without overburdening the state apparatus. The alignment highlights growing recognition of technological solutions to streamline government operations, reducing discretionary power and fostering accountability—key tenets of CCS's policy advocacy for lighter, more responsive governance.

**Key points:**

- Chief Information Commissioner Wajahat Habibullah stated at an RTI seminar that digitizing government records reduces the burden on officials.
- CCS has long advocated uploading RTI-disclosed information on public authority websites to ease officials' workload in the long run.
- This CIC remark pleasantly aligns with CCS's classical-liberal push for proactive digital transparency to minimize bureaucracy.

**By Renu Pokharna**

* * *

Recently, at a RTI seminar, the Chief Information Commissioner, Wajahat Habibullah, dwelt at some length on the relevance of digitizing government records. In the course of his deliberation, he said that computerizing government records would reduce the burden on government officials.

Needless to say, this came as a pleasant surprise. CCS has for long been advocating that information disclosed under the RTI be uploaded on the public authority’s website. One of our main arguments is that this would “reduce the burden on government officials in the long run”.

* * *

**About Renu Pokharna**

## Star footballer Baichung awaits jail journey

Original: https://www.spontaneousorder.in/p/star-footballer-baichung-awaits-jail-journey

Author: Spontaneous Order

Published: 2006-04-07T03:20:13.000Z

Topics: police-reform, judicial-reform, rule-of-law

> You call it madness, funny, crazy. That’s the way Indian police and judiciary works. The famous footballer Baichung Bhutia lost his baggage during his train travel in Coromandel express a few years back. He reported to the police. Now he got the arrest

**Summary:**

The post lambasts the Indian police and judiciary as operating in a 'madness, funny, crazy' manner, spotlighting the plight of star footballer Baichung Bhutia. A few years ago, Bhutia lost his baggage on the Coromandel Express train and reported it to the police. He now faces an arrest warrant for failing to appear in court to identify the thief, claiming he was unaware of the prior court notification. The author highlights how Bhutia was duped by a police officer, portending a 'sad state' of his impending jail term. From a classical-liberal lens, this exemplifies arbitrary state power, procedural absurdities, and the urgent need for rule-of-law reforms to prevent such miscarriages of justice against even prominent citizens.

**Key points:**

- Baichung Bhutia faces an arrest warrant for not appearing in court to identify the thief who stole his Coromandel Express baggage.
- Bhutia claims ignorance of the court summons due to being duped by a police officer.
- The case illustrates the 'mad, funny, crazy' dysfunction of India's police and judiciary.
- Such incidents underscore classical-liberal calls for systemic reforms to ensure fair procedures and limit arbitrary enforcement.

**By praba**

* * *

You call it madness, funny, crazy. That’s the way Indian police and judiciary works. The famous footballer Baichung Bhutia lost his baggage during his train travel in Coromandel express a few years back. He reported to the police. Now he got the arrest warrant for not appearing in the court to identify the thief who had stolen his luggage. According to him, he was not aware of the previous Court notification for his appearance. Read more about the way he was duped by a police officer and sad state of his impending jail term.

* * *

**About praba**

## More autonomy for deemed universities

Original: https://www.spontaneousorder.in/p/more-autonomy-for-deemed-universities

Author: Spontaneous Order

Published: 2006-04-07T03:19:47.000Z

Topics: higher-education, deemed-universities, regulatory-reform, university-autonomy

> The Ministry for Human Resources Development (MHRD) had issued a notification yesterday to provide more freedom for deemed universities to start courses of their choice without waiting for the All India Council for Technical Education (AICTE) approval. ..

**Summary:**

The author praises the Ministry of Human Resource Development (MHRD) for a recent notification granting deemed universities greater autonomy to introduce courses of their choice without needing prior approval from the All India Council for Technical Education (AICTE), describing it as a commendable red tape-cutting measure that aligns with classical-liberal principles of institutional freedom. This reform allows universities to adapt swiftly to market demands for job-relevant professional education. The post advocates expanding deemed university status to more prestigious institutions, specifically naming St. Xavier’s College in Mumbai, Madras Christian College, and St. Stephen’s College, to enable them to offer high-quality professional programs. It highlights the diminishing demand for traditional arts and humanities courses, leaving these reputed old colleges in a precarious position without deemed status. By granting such autonomy, the government can empower these institutions to thrive, fostering innovation and quality in higher education through reduced regulatory burdens rather than centralized control.

**Key points:**

- MHRD's notification exempts deemed universities from AICTE approval for new courses, cutting red tape.
- Convert prestigious colleges like St. Xavier’s Mumbai, Madras Christian College, and St. Stephen’s to deemed universities.
- Declining demand for arts/humanities courses is harming old colleges without professional education autonomy.

**By praba**

* * *

The Ministry for Human Resources Development (MHRD) had issued a notification yesterday to provide more freedom for deemed universities to start courses of their choice without waiting for the All India Council for Technical Education (AICTE) approval. The MHRD deserve kudos for this red tape cutting measure.

More colleges need to be brought under the deemed universities. Many important insitutions like St. Xavier’s College, Mumbai, Madras Chrisitian College, St. Stephen’s College should be converted into deemed universities to offer quality professional education. With the onset of job relevant courses, demand for arts and humanities courses are diminishing. At this critical situation most of the reputed old colleges are suffering because of the lack of deemed university status.

* * *

**About praba**

## Video Catching of Copy Cats

Original: https://www.spontaneousorder.in/p/video-catching-of-copy-cats

Author: Spontaneous Order

Published: 2006-04-07T03:19:17.000Z

Topics: exam-cheating, education-corruption, bihar-education, meritocracy

> Copying during examinations is a big problem in India. Although copying is prevalent in almost all parts of the country, Bihar tops the list with the maximum number of students indulging in this unfair practice. Whether school board exams or the high pr..

**Summary:**

Copying during examinations is a pervasive issue across India, but Bihar leads with the highest incidence, affecting school board exams and even high-profile civil services tests where students are 'well trained' to cheat. The author attributes this to widespread corruption, noting that exam monitors can be bribed for as little as Rs. 100 to allow unrestricted copying. While Bihar students achieve impressive results in local board exams, their poor performance in all-India competitive exams has drawn scrutiny and prompted demands from students of other states for stricter surveillance in Bihar's examination halls. This highlights a classical-liberal concern with meritocracy undermined by corruption and unfair practices, eroding trust in educational outcomes and competitive fairness.

**Key points:**

- Copying is most rampant in Bihar across school and civil services exams due to trained malpractices.
- Corruption enables cheating, with teachers accepting Rs. 100 bribes to overlook it.
- Bihar's strong local exam results contrast sharply with weak national competitive performances.
- Other states' students demand rigorous monitoring of Bihar exam halls.

**By praba**

* * *

Copying during examinations is a big problem in India. Although copying is prevalent in almost all parts of the country, Bihar tops the list with the maximum number of students indulging in this unfair practice. Whether school board exams or the high profile civil services exams, students in Bihar are well trained to copy. One of the vital reasons for this menace to continue in a more wide spread way is all round corruption. For Rs. 100 the exam monitoring teacher can allow students to copy without any hurdle. Although students of Bihar can get very good results in the local board exams their fair performance in all India competitive exams have raised many eyebrows. Especially the students from other states are demanding strict surveillance of examination halls in Bihar.

* * *

**About praba**

## Lucknow school liquor shops removed

Original: https://www.spontaneousorder.in/p/lucknow-school-liquor-shops-removed

Author: Spontaneous Order

Published: 2006-04-07T03:18:43.000Z

Topics: alcohol-regulation, school-safety, judicial-reform

> Liquor shops and schools cannot go together. But in many parts of India this scene is very common. Especially in Lucknow where 53 alchol selling shops coexist with educational institutions. The smell and noise of the liquor shops obviously affect the le..

**Summary:**

In many parts of India, particularly Lucknow, liquor shops commonly coexist with educational institutions, with 53 such alcohol-selling outlets near schools, adversely affecting the learning atmosphere through smell and noise while exposing students to alcohol habits at an early age, which the author deems dangerous. The post highlights this as a problematic norm and praises the Lucknow High Court for commendably ordering the removal of these shops within 100 meters of educational institutions, aligning with a classical-liberal emphasis on protecting individual development from state-permitted vices in shared spaces. This judicial intervention addresses government licensing failures that enable such proximity.

**Key points:**

- Lucknow has 53 liquor shops near educational institutions, harming the learning environment via smell, noise, and early alcohol exposure.
- Proximity to liquor shops is dangerous for students' development.
- The Lucknow High Court ordered removal of these shops within 100 meters of schools.

**By praba**

* * *

Liquor shops and schools cannot go together. But in many parts of India this scene is very common. Especially in Lucknow where 53 alchol selling shops coexist with educational institutions. The smell and noise of the liquor shops obviously affect the learning atmosphere. Students will also get to know the alcohol sipping habit at the early stage of their lives. It is dangerous to allow these shop near educational institutions. In a commendable move, the Lucknow High Court had ordered the removal of these liquor shops within 100 metres of educational institutions. Read more in The Times of India

* * *

**About praba**

## Urban Land Management: a prototype of bad governance

Original: https://www.spontaneousorder.in/p/urban-land-management-a-prototype-of-bad-governance

Author: Spontaneous Order

Published: 2006-04-04T03:29:44.000Z

Topics: urban-planning, slum-evictions, land-management, bad-governance

> A. Srivathsan, in an excellent article in The Hindu bemoans the utter mess that urban land planning in Delhi is. Delhi recently has witnessed a situation that is the result of bad urban land management: § the sealing of unauthorised commercial establish.

**Summary:**

The post critiques Delhi's urban land management as a prototype of bad governance, drawing on A. Srivathsan's article in The Hindu that highlights the resulting chaos: the sealing of unauthorised commercial establishments and the eviction of slum dwellers along the Yamuna river. Politicians vociferously oppose the sealing—especially ahead of by-elections—while ignoring the plight of evicted slum residents. From a classical-liberal perspective, the author emphasizes that slum dwellers are often dismissed as mere encroachers rather than recognized as vital contributors to the city's commerce, echoing arguments in CCS’s publication 'Law, Liberty and Livelihood: Making A Living on the Street.' This framing underscores how rigid planning fails to accommodate informal economic activity, prioritizing formal regulations over livelihoods and liberty, leading to politically selective enforcement that exacerbates urban disorder without addressing root causes like poor land policy.

**Key points:**

- Delhi's urban land planning mess has triggered sealing of unauthorised commercial establishments and eviction of Yamuna river slum dwellers.
- Politicians protest commercial sealings ahead of by-elections but remain silent on slum evictions.
- Slum dwellers should be viewed as contributors to city commerce, not encroachers, per CCS’s 'Law, Liberty and Livelihood'.

**By renu vinod**

* * *

A. Srivathsan, in an excellent article in [The Hindu](http://www.hindu.com/2006/04/04/stories/2006040406180900.htm) bemoans the utter mess that urban land planning in Delhi is. Delhi recently has witnessed a situation that is the result of bad urban land management:

§ the sealing of unauthorised commercial establishments of traders and  
§ the eviction of slum dwellers from along the Yamuna river.

While politicians have cried hoarse over the sealing of commercial establishments (keeping in mind the coming by elections), nobody seems to be shedding tears for the slum dwellers. Srivathsan rightly points out, and this has been very well elaborated in CCS’s publication “[Law, Liberty and Livelihood: Making A Living on the Street](http://www.ccsindia.org/livelihood.asp)“, slum dwellers are more often than not, considered encroachers, rather than contributors to the city’s commerce.

* * *

**About renu vinod**

## Water, World Bank, and Uruguay

Original: https://www.spontaneousorder.in/p/water-world-bank-and-uruguay

Author: Spontaneous Order

Published: 2006-03-25T18:41:24.000Z

Topics: water-supply, world-bank, privatization, economic-reform

> P Sainath in Hindu packs in a lot of emotional appeal in his demand to have a constitutional amendment that would allow only the state to deliver water (and ban all private participation). His attack on the World Bank has solid evidence and the bank cer..

**Summary:**

Parth Shah critiques P Sainath's article in The Hindu, which emotionally demands a constitutional amendment to restrict water delivery exclusively to the state and ban all private participation. Shah concurs with Sainath's evidence-based attack on the World Bank's lack of credibility in water reforms, advocating even stronger measures like a 'Quit India' movement to expel the World Bank and IMF from India. He highlights the Bank's inconsistent philosophy: promoting private participation in areas with multinational corporations (MNCs) while supporting state provision and control—and lending money to expand it—where MNCs are absent. This reveals the Bank's selective market favoritism tied to MNC presence rather than principled state-vs-market stance, aligning with a classical-liberal critique of biased international interference. However, Shah faults Sainath for overstating claims linking the electoral losses of Chandrababu Naidu in Andhra Pradesh and Digvijaya Singh in Madhya Pradesh to reform failures. The post defends scrutiny of state monopolies and global institutions from a choice-and-accountability perspective, without conceding ground on private sector potential in water.

**Key points:**

- World Bank lacks credibility in water reforms and should face a 'Quit India' movement alongside IMF.
- Bank hypocritically favors private water participation where MNCs operate but state control where they do not.
- Sainath overclaims by tying Naidu's and Singh's electoral defeats directly to reform backlash.

**By Parth Shah**

* * *

[P Sainath](http://web.archive.org/web/20060417183238/http://www.hindu.com/2006/03/22/stories/2006032202841000.htm) in *Hindu* packs in a lot of emotional appeal in his demand to have a constitutional amendment that would allow only the state to deliver water (and ban all private participation). His attack on the World Bank has solid evidence and the bank certainly has no credibility in promoting water reforms. I would actually like to go a little further and have a “Quit India” movement to throw WB and IMF out of the country. Discussing the role of these sisters, as it is over a cold beer, it transpired that in areas where MNCs exist, the bank favours private participation but in areas where there are no or hardly any MNCs, the bank continues to support state provision and control, and lends money to keep expanding the role of the state. This is a more insightful way to understand bank’s philosophy on the state vs market debate. Bank is for the market where MNCs operate and for the state where they don’t.

However on some other of his arguments, Sainath is claiming too much.  Let’s take the electoral loss of Naidu (AP) and Singh (MP).

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## On remitting your RTI requisition fee online:

Original: https://www.spontaneousorder.in/p/on-remitting-your-rti-requisition-fee-online

Author: Spontaneous Order

Published: 2006-03-25T03:30:23.000Z

Topics: rti, government-transparency, duty-to-publish

> At a recent presentation in DSE, an issue that was raised was how fees would be paid if a requisitioner sitting in Delhi wanted information in, say, Kolkata, especially when that information is not already available online. This is something that has be..

**Summary:**

The post discusses the practical challenge of paying RTI application fees remotely, such as a Delhi resident seeking information from a Kolkata public authority when data is not online. It highlights current inconveniences like visiting offices, queuing, or depositing banker's cheques or demand drafts into the authority's account. From a classical-liberal viewpoint, CCS argues there should be no such burdens on the public to access information that rightfully belongs to it. While their ultimate aim is a 'Duty to Publish' regime mandating proactive disclosure, interim solutions like online fee remittance are essential to enable seamless RTI requests without physical trudge.

**Key points:**

- RTI requesters face inconvenience paying fees remotely, e.g., Delhi to Kolkata, via physical visits or cheques.
- Public information should be accessible without forcing citizens to queue at public authority offices.
- Ultimate goal is 'Duty to Publish' for proactive government disclosure rather than reactive furnishing.
- Advocate online fee payment to eliminate barriers in RTI process.

**By renu vinod**

* * *

At a recent presentation in DSE, an issue that was raised was how fees would be paid if a requisitioner sitting in Delhi wanted information in, say, Kolkata, especially when that information is not already available online. This is something that has been worrying CCS as well. The point we are attempting to raise is: there should be no need for the public to inconvenience itself to obtain information that belongs to it. Though a Duty to Publish regime is our ultimate motive, where information is not already available, people should be able to request it without having to trudge to the office of the public authority and wait in a queue, or deposit a banker’s cheque or demand draft in the bank account, which would be announced by the public authority.

Read more about RTI: [https://spontaneousorder.in/make-rti-a-reality-let-the-government-publish-information-rather-than-merely-furnish-it/](https://spontaneousorder.in/make-rti-a-reality-let-the-government-publish-information-rather-than-merely-furnish-it/)

* * *

**About renu vinod**

## Wrong way to control female foeticide

Original: https://www.spontaneousorder.in/p/wrong-way-to-control-female-foeticide

Author: Spontaneous Order

Published: 2006-03-25T03:21:19.000Z

Topics: female-foeticide, girl-child-education, government-policy

> Our sarkari institutions are well known for adopting faulty policies and expect better rewards from it. The recent one is about the scholarship for single girl child introduced by the Central Board for Seconary Education (CBSE). The intention is to enco..

**Summary:**

This fragmentary post critiques a CBSE scholarship scheme for single girl children as a faulty 'sarkari' policy intended to encourage girls' education and control female foeticide. From a classical-liberal perspective, the author highlights how government institutions adopt misguided interventions expecting better outcomes, arguing that promoting girls' education must begin at the primary level rather than secondary scholarships. The post teases further reading on the scheme but provides no additional details or evidence.

**Key points:**

- CBSE's single girl child scholarship exemplifies sarkari institutions' faulty policies.
- The scheme aims to boost girls' education but is the wrong way to address female foeticide.
- Effective promotion of girls' education requires starting from primary schooling.

**By praba**

* * *

Our *sarkari* institutions are well known for adopting faulty policies and expect better rewards from it. The recent one is about the scholarship for single girl child introduced by the Central Board for Seconary Education (CBSE). The intention is to encourage girl children’s education. If this goal has to succeed it needs to start from primary education. Read more about this scheme.

* * *

**About praba**

## Rush and push for American universities

Original: https://www.spontaneousorder.in/p/rush-and-push-for-america-universities

Author: Spontaneous Order

Published: 2006-03-25T03:20:45.000Z

Topics: higher-education, student-mobility

> The United States attract over fifty thousand students every year from India. Despite tough admission rules, declining number of scholarships and hard competition procedures, Indian students are keen to enrol in American higher education institutions. A..

**Summary:**

This short, fragmentary post observes that the US attracts over 50,000 Indian students annually to its universities despite tough admissions, declining scholarships, and intense competition; numbers dropped after 9/11 but are now rebounding, with 'India all the way in US colleges.' No substantive argument or classical-liberal policy angle is developed.

**Key points:**

- Over 50,000 Indian students enroll in US universities each year despite admission challenges.

**By praba**

* * *

The United States attract over fifty thousand students every year from India. Despite tough admission rules, declining number of scholarships and hard competition procedures, Indian students are keen to enrol in American higher education institutions. After 9/11 tragedy the number of students going to U.S came down. But now it is bouncing back.It’s India all the way in US colleges

* * *

**About praba**

## Time to review, revise or remove hampering laws

Original: https://www.spontaneousorder.in/p/time-to-review-revise-or-remove-hampering-laws

Author: Spontaneous Order

Published: 2006-03-22T03:31:03.000Z

Topics: occupational-licensing, regulatory-reform, urban-transport

> Section 3 (1) of the Delhi Municipal Corporation Cycle-Rickshaw By-Laws, 1960 states that “no person shall keep or ply for hire a cycle rickshaw in Delhi unless he himself is the owner thereof and holds a licence granted in that behalf by the Commission

**Summary:**

This fragmentary post is too short to meaningfully summarize a full central argument or conclusion. It quotes Section 3(1) of the Delhi Municipal Corporation Cycle-Rickshaw By-Laws, 1960, mandating that only owners holding a Commissioner-issued license (with fee) may operate cycle rickshaws for hire. MCD officials claim it excludes middlemen, but the author stresses evaluating its actual impact, under a title advocating to review, revise, or remove hampering laws from a classical-liberal deregulatory viewpoint.

**Key points:**

- Section 3(1) of 1960 Delhi Cycle-Rickshaw By-Laws requires operators to own their rickshaws and hold a licensed fee-based permit.

**By renu vinod**

* * *

Section 3 (1) of the Delhi Municipal Corporation Cycle-Rickshaw By-Laws, 1960 states that “no person shall keep or ply for hire a cycle rickshaw in Delhi unless he himself is the owner thereof and holds a licence granted in that behalf by the Commissioner on payment of the fee that may, from time to time, be fixed under sub-section (2) of Section 430”. MCD officials claim that this bye-law was to keep the middlemen out. It is important to look at the actual impact of such a law.

* * *

**About renu vinod**

## RSS university in Rajasthan

Original: https://www.spontaneousorder.in/p/rss-university-in-rajasthan

Author: Spontaneous Order

Published: 2006-03-21T03:21:47.000Z

Topics: private-universities, higher-education, rajasthan

> The Rashatriya Swayam Sevak Sangh (RSS) got the green signal from Rajasthan government yesterday to open an university – Keshav Vidhyapeeth Vishwavidyalaya in Jaipur. The culture nationalism asserting organisation is the first one to grab the offer for

**Summary:**

This brief 2006 news note reports that the RSS received approval from the Rajasthan government to establish Keshav Vidhyapeeth Vishwavidyalaya in Jaipur, positioning it as the first organization to take up the state's offer for private universities in the desert state. No deeper analysis or classical-liberal commentary is provided beyond linking to further reading.

**Key points:**

- RSS got green signal to open Keshav Vidhyapeeth Vishwavidyalaya as Rajasthan's first private university.

**By praba**

* * *

The Rashatriya Swayam Sevak Sangh (RSS) got the green signal from Rajasthan government yesterday to open an university – Keshav Vidhyapeeth Vishwavidyalaya in Jaipur. The culture nationalism asserting organisation is the first one to grab the offer for private universities to takeoff in this desert state. Read more in the Indian Express

[More..](http://blog.ccsindia.org/mt/archives/2006/03/rss_university.html#more)

* * *

**About praba**

## Freedom for civil society

Original: https://www.spontaneousorder.in/p/freedom-for-civil-society

Author: Spontaneous Order

Published: 2006-03-20T03:22:26.000Z

Topics: civil-society, state-failure, development-policy

> The state centred development in the last six decades is a failure in all fronts. Learning from the past mistakes the government of the day should identify the areas where more freedom can be given in dealing with the developmental activities. One such ..

**Summary:**

This post is too short and fragmentary to summarize meaningfully into 150-200 words. It critiques state-centered development over the last six decades as a failure on all fronts and urges the current government to grant more freedom to civil society in developmental activities, aligning with a classical-liberal call to reduce state control.

**Key points:**

- State-centered development in India over the past six decades has failed across all fronts.

**By praba**

* * *

The state centred development in the last six decades is a failure in all fronts. Learning from the past mistakes the government of the day should identify the areas where more freedom can be given in dealing with the developmental activities. One such area is civil society.

* * *

**About praba**

## Microsoft lends a technology hand to Anna University

Original: https://www.spontaneousorder.in/p/microsoft-lends-a-technology-hand-to-anna-university

Author: Spontaneous Order

Published: 2006-03-17T03:24:21.000Z

Topics: education, public-private-partnerships, technology-access

> The world’s No.1 software giant, Microsoft sealed a generous deal with the Anna university of Chennai to supply computer programmes for all the engineering students in Tamil Nadu. More..

**Summary:**

This post is a fragmentary announcement of a deal between Microsoft and Anna University in Chennai to supply computer programs to all engineering students in Tamil Nadu, with no substantive argument, classical-liberal analysis, or conclusion provided.

**Key points:**

- Microsoft sealed a deal to supply software to engineering students at Anna University in Tamil Nadu.

**By praba**

* * *

The world’s No.1 software giant, Microsoft sealed a generous deal with the Anna university of Chennai to supply computer programmes for all the engineering students in Tamil Nadu.

[More..](http://blog.ccsindia.org/mt/archives/2006/03/microsoft_lends.html#more)

* * *

**About praba**

## Americans are after Hindi & Urdu

Original: https://www.spontaneousorder.in/p/americans-are-after-hindi-urdu

Author: Spontaneous Order

Published: 2006-03-17T03:23:43.000Z

Topics: hindi-urdu, language-learning, cultural-exchange

> The reverse hegemony is happening now. Hindi and Urdu are in the hot wish list of American students. Yes there is a growing interest among the youngsters of the only superpower in the world to learn these Indian languages More..

**Summary:**

This post is a fragmentary teaser from 2006, claiming a 'reverse hegemony' with growing interest among American students—the 'youngsters of the only superpower'—in learning Hindi and Urdu, linking to a fuller article without providing substantive details or classical-liberal policy analysis.

**Key points:**

- American students are increasingly interested in Hindi and Urdu languages.

**By praba**

* * *

The reverse hegemony is happening now. Hindi and Urdu are in the hot wish list of American students. Yes there is a growing interest among the youngsters of the only superpower in the world to learn these Indian languages

[More..](http://blog.ccsindia.org/mt/archives/2006/03/americans_are_a.html#more)

* * *

**About praba**

## The Kumble triumph

Original: https://www.spontaneousorder.in/p/the-kumble-triumph

Author: Spontaneous Order

Published: 2006-03-13T03:25:24.000Z

Topics: cricket, indian-sports

> When Anil Kumble bowled out Steve Harmis of England in Mohali test yesterday to claim his five hundredth wicket he inked a new history in the Indian cricket. More..

**Summary:**

This post is a very short, fragmentary announcement of Indian cricketer Anil Kumble achieving his 500th Test wicket by bowling out Steve Harmison of England in the Mohali Test, with a 'More..' link to additional content; it contains no substantive discussion or classical-liberal policy analysis.

**Key points:**

- Anil Kumble claimed his 500th Test wicket by dismissing Steve Harmison in the Mohali Test against England.

**By praba**

* * *

When Anil Kumble bowled out Steve Harmis of England in Mohali test yesterday to claim his five hundredth wicket he inked a new history in the Indian cricket.

[More..](http://blog.ccsindia.org/mt/archives/2006/03/the_kumble_triu.html#more)

* * *

**About praba**

## France prefers private schools

Original: https://www.spontaneousorder.in/p/france-prefers-private-schools

Author: Spontaneous Order

Published: 2006-03-13T03:24:54.000Z

Topics: education, private-schools, school-choice, france-education

> The French education system is in a complete disarray. Government schools are not desired by the public because of the poor quality of education imparted. As in the case of other countries, private schools are the most preferred destination for the know..

**Summary:**

This short, fragmentary post claims the French education system is in disarray, with government schools rejected by the public due to poor quality, mirroring trends elsewhere where private schools are preferred for education. It links to The Economist and a fuller blog post but provides no specific facts, numbers, or deeper classical-liberal analysis.

**Key points:**

- French government schools are avoided due to poor education quality.

**By praba**

* * *

The French education system is in a complete disarray. Government schools are not desired by the public because of the poor quality of education imparted. As in the case of other countries, private schools are the most preferred destination for the knowledge mission. Read more in The Economist

[More..](http://blog.ccsindia.org/mt/archives/2006/03/france_prefers.html#more)

* * *

**About praba**

## G. Viswanathan: Star edupreneur of south India

Original: https://www.spontaneousorder.in/p/g-viswanathan-star-edupreneur-of-south-india

Author: Spontaneous Order

Published: 2006-03-11T03:25:58.000Z

Topics: higher-education, edupreneurship

> In a time span of just 21 years, G. Viswanathan, a former parliamentarian has built Vellore Institute of Technology (VIT)into a deemed university More..

**Summary:**

This post is a fragmentary teaser highlighting G. Viswanathan, a former parliamentarian and 'star edupreneur' of south India, who built Vellore Institute of Technology (VIT) into a deemed university in just 21 years, with a link to more details.

**Key points:**

- G. Viswanathan founded and grew VIT into a deemed university within 21 years.

**By praba**

* * *

In a time span of just 21 years, G. Viswanathan, a former parliamentarian has built Vellore Institute of Technology (VIT)into a deemed university

[More..](http://blog.ccsindia.org/mt/archives/2006/03/g_viswanathan_s.html#more)

* * *

**About praba**

## Morality versus Markets

Original: https://www.spontaneousorder.in/p/morality-versus-markets

Author: Spontaneous Order

Published: 2006-03-09T06:56:51.000Z

Topics: education, state-vs-private

> In his article “Learn to Live, Live to Learn” in the Times of India dated 8th March 2006 Krishna Kumar reopens the debate on the role of the State versus the private sector in school education. More..

**Summary:**

This post is a fragmentary excerpt referencing Krishna Kumar's March 8, 2006, Times of India article 'Learn to Live, Live to Learn,' which reopens the debate on the role of the State versus the private sector in school education, with a link to additional content on an old CCS blog.

**Key points:**

- Krishna Kumar's 2006 article debates state vs. private sector roles in school education.

**By parul**

* * *

In his article “Learn to Live, Live to Learn” in the Times of India dated 8th March 2006 Krishna Kumar reopens the debate on the role of the State versus the private sector in school education.

[More..](http://blog.ccsindia.org/mt/archives/2006/03/morality_versus.html#more)

* * *

**About parul**

## Air conditioned railway budget

Original: https://www.spontaneousorder.in/p/air-conditioned-railway-budget

Author: Spontaneous Order

Published: 2006-03-02T03:26:27.000Z

Topics: indian-railways, railway-budget

> Smile in the face and briefcase full of budget papers in hand…. More..

**Summary:**

This post is too short and fragmentary to summarise meaningfully, consisting only of a teaser phrase ('Smile in the face and briefcase full of budget papers in hand…') and a link to extended content on an 'air conditioned railway budget'. No substantive arguments or details are provided in the visible text.

**Key points:**

- Post serves primarily as a teaser linking to a fuller article on railway budget issues.

**By praba**

* * *

Smile in the face and briefcase full of budget papers in hand….

[More..](http://blog.ccsindia.org/mt/archives/2006/03/air_conditioned_1.html#more)

* * *

**About praba**

## Promoting Accountability in Governance

Original: https://www.spontaneousorder.in/p/promoting-accountability-in-governance

Author: Spontaneous Order

Published: 2006-03-01T07:01:41.000Z

Topics: right-to-information, governance-accountability, participatory-democracy

> Right to Information forms the crucial underpinning of participatory democracy – accountability and good governance. Bigger the restrictions that are placed on access, the greater the feelings of ‘powerlessness’ and ‘alienation’. Without informa

**Summary:**

This fragmentary post teaser argues from a classical-liberal perspective that the Right to Information (RTI) is the crucial foundation of participatory democracy, enabling accountability and good governance. It claims that greater restrictions on information access heighten citizens' feelings of powerlessness and alienation, preventing them from exercising rights or making informed choices. No specific facts or numbers provided; links to a fuller 2006 article.

**Key points:**

- Right to Information underpins participatory democracy by promoting accountability and good governance.

**By anu**

* * *

Right to Information forms the crucial underpinning of participatory democracy – accountability and good governance. Bigger the restrictions that are placed on access, the greater the feelings of ‘powerlessness’ and ‘alienation’. Without information, people cannot adequately exercise their rights as citizens or make informed choices.

[More..](http://blog.ccsindia.org/mt/archives/2006/03/promoting_accou.html#more)

* * *

**About anu**

## Chalo Dilli – A Mission Statement

Original: https://www.spontaneousorder.in/p/chalo-dilli-a-mission-statement

Author: Spontaneous Order

Published: 2006-03-01T07:01:04.000Z

Topics: delhi, governance

> Chalo Dilli – What is it? Is it an Ad campaign, is it a quest or is it an appeal. Well, I think more than anything else, it is like a ‘Mission Statement’ or rather it should be taken as one by the Delhi Government and by those living in Delhi. More.

**Summary:**

This post is too short and fragmentary to summarize meaningfully; it briefly posits that 'Chalo Dilli'—possibly an ad campaign, quest, or appeal—should be treated as a 'Mission Statement' by the Delhi Government and Delhi residents, with a link to more content that is not provided.

**Key points:**

- 'Chalo Dilli' should be interpreted as a mission statement for the Delhi Government and its residents.

**By anu**

* * *

Chalo Dilli – What is it? Is it an Ad campaign, is it a quest or is it an appeal. Well, I think more than anything else, it is like a ‘Mission Statement’ or rather it should be taken as one by the Delhi Government and by those living in Delhi.

[More..](http://blog.ccsindia.org/mt/archives/2006/03/chalo_dilli_a_a_1.html#more)

* * *

**About anu**

## Good intentions: bad implementation

Original: https://www.spontaneousorder.in/p/good-intentions-bad-implementation

Author: Spontaneous Order

Published: 2006-02-28T03:32:11.000Z

Topics: rural-development, government-schemes, policy-implementation

> Please read this article by Sonu Jain in the Indian Express if you are interested in knowing about good intentions having remained just that, without any active implementation. The previous budget had, among other projects, come up with three big scheme..

**Summary:**

This brief, fragmentary post by Renu Vinod links to an Indian Express article by Sonu Jain critiquing the lack of implementation of three major rural development schemes announced in India's previous budget, exemplifying 'good intentions: bad implementation' from a classical-liberal lens wary of government inefficiency.

**Key points:**

- Three big rural development schemes from the previous budget show negligible progress despite good intentions.

**By renu vinod**

* * *

Please read this [article](http://www.indianexpress.com/full_story.php?content_id=88694) by Sonu Jain in the Indian Express if you are interested in knowing about good intentions having remained just that, without any active implementation. The previous budget had, among other projects, come up with three big schemes for rural development. What is the progress you ask? Sonu Jain has given a decent picture.

[More..](http://blog.ccsindia.org/mt/archives/2006/02/good_intentions.html#more)

* * *

**About renu vinod**

## So you want a copy of your evaluated answer sheet?

Original: https://www.spontaneousorder.in/p/so-you-want-a-copy-of-your-evaluated-answer-sheet

Author: Spontaneous Order

Published: 2006-02-23T03:33:27.000Z

Topics: rti-act, education-transparency, state-power

> Does the law guarantee you the right to access your evaluated answer sheet? The answer is no. And guess who just pronounced the ‘final’ verdict on this? The office of the Central Chief Information Commissioner. Yes, that’s right. If one goes by what

**Summary:**

This fragmentary post excerpt reports that the Central Chief Information Commissioner has ruled the Right to Information Act 2005 does not guarantee access to one's own evaluated answer sheet, denying students this right. It frames this 'final' verdict as a Machiavellian state maneuver to retain sole power over evaluations. RTI activists are preparing a major fight against it, aligning with a classical-liberal critique of opaque state authority in education.

**Key points:**

- Central Chief Information Commissioner rules RTI Act 2005 does not allow access to evaluated answer sheets.
- Decision denies students the right to view their own assessed exam papers.
- RTI activists view this as state's power retention tactic and plan to challenge it.

**By renu vinod**

* * *

Does the law guarantee you the right to access your evaluated answer sheet? The answer is no. And guess who just pronounced the ‘final’ verdict on this? The office of the Central Chief Information Commissioner. Yes, that’s right. If one goes by what the CCIC says, even the Right to Information Act 2005 does not allow you the chance to look at your own evaluated answer sheet. The good news is that RTI activists are geared up for a big fight- they consider this another Machiavellian attempt by the State to retain their status as the sole wielder of power…

[More..](http://blog.ccsindia.org/mt/archives/2006/02/so_you_want_a_c.html#more)

* * *

**About renu vinod**

## State of Governance?

Original: https://www.spontaneousorder.in/p/state-of-governance

Author: Spontaneous Order

Published: 2006-02-20T07:10:56.000Z

Topics: governance, budget-oversight, civil-society, public-accountability

> Cricket and national budgets have similar effect on the people of India. The frenzy and hype associated with the budgets during its presentation is palpable, a fraction of similar attention given at the later stage would improve the financial use and im..

**Summary:**

The post likens the public frenzy surrounding cricket matches in India to the hype around national budgets during their presentation, arguing that a fraction of this attention applied to post-budget monitoring would vastly improve financial utilization and impact. It highlights a media report analyzing government expenditures on various programs and projects, positioning such scrutiny as essential for accountability. From a classical-liberal perspective, the author calls for every state and city to undertake similar detailed initiatives, mobilized through civil society and citizen participation, to drive tremendous improvements in governance. This emphasizes decentralized, bottom-up oversight over centralized budget processes, fostering efficiency and responsibility in public spending without relying solely on government self-regulation.

**Key points:**

- Budgets in India receive intense hype during presentation but insufficient scrutiny afterward, hindering effective use of funds.
- A media report exemplifies valuable analysis of government expenditures on programs and projects.
- States and cities must launch similar detailed expenditure analyses.
- Civil society and citizen participation should mobilize these efforts to enhance governance.

**By sushmita**

* * *

Cricket and national budgets have similar effect on the people of India. The frenzy and hype associated with the budgets during its presentation is palpable, a fraction of similar attention given at the later stage would improve the financial use and impact of the elaborate budgets that the Centre presents. The expenditure or the use of the budget should also be monitored and debated with the same enthusiasm and caution with which it is formed. A **[media report](http://timesofindia.indiatimes.com/articleshow/msid-1420236,curpg-1.cms)** [](http://timesofindia.indiatimes.com/articleshow/msid-1420236,curpg-1.cms)establishes and analyses the government’s expenditure on various programs and projects. A more detailed initiatives of this kind by every state and city in the country mobilized by civil society and citizen participation will bring about tremendous improvement in the state of Governance.

* * *

**About sushmita**

## Unutilized education cess

Original: https://www.spontaneousorder.in/p/unutilized-education-cess

Author: Spontaneous Order

Published: 2006-02-16T03:28:10.000Z

Topics: education-cess, taxation

> Not even a whisper of protest was heard when the finance minister P. Chidambaram proposed a two percent cess for educational development in 2004…. More..

**Summary:**

This post excerpt is too short and fragmentary to summarise meaningfully; it only notes that there was no protest when Finance Minister P. Chidambaram proposed a two percent cess for educational development in 2004, linking to a full 2006 blog post.

**Key points:**

- No protest occurred when the 2% education cess was proposed in 2004.

**By praba**

* * *

Not even a whisper of protest was heard when the finance minister P. Chidambaram proposed a two percent cess for educational development in 2004….

[More..](http://blog.ccsindia.org/mt/archives/2006/02/unutilized_educ.html#more)

* * *

**About praba**

## Demolition Drive: A Way Forward or Backward

Original: https://www.spontaneousorder.in/p/demolition-drive-a-way-forward-or-backward

Author: Spontaneous Order

Published: 2006-02-14T07:12:25.000Z

Topics: urban-demolition, delhi-development

> Demolition is the hottest selling issue in town these days. Everyone has a view on it. The present round is on more than 350 villages in Delhi where residents have decided to go on a “do or die” agitation if they are not exempted from the ongoing city

**Summary:**

This post is a fragmentary teaser on the ongoing demolition drive in Delhi affecting over 350 villages, where residents are threatening 'do or die' agitation unless exempted; it notes they have demanded something few others have, but provides no central argument or conclusion, linking instead to additional content.

**Key points:**

- Demolition drive targets over 350 villages in Delhi, prompting resident agitation for exemption.

**By sushmita**

* * *

Demolition is the hottest selling issue in town these days. Everyone has a view on it. The present round is on more than [350 villages](http://www.hindu.com/2006/02/06/stories/2006020613360100.htm) in Delhi where residents have decided to go on a “do or die” agitation if they are not exempted from the ongoing citywide demolition drive. However, in course of their demands they have asked something that few sections have been able to ask.

[More..](http://blog.ccsindia.org/mt/archives/2006/02/demolition_driv_1.html#more)

* * *

**About sushmita**

## Needed: an RTI revolution in the North-East

Original: https://www.spontaneousorder.in/p/needed-an-rti-revolution-in-the-north-east

Author: Spontaneous Order

Published: 2006-02-11T03:33:56.000Z

Topics: right-to-information, public-distribution-system, north-east-states, food-subsidies

> Independent surveys’ reports have found that there is 100% diversion of wheat and 60% diversion of rice meant for PDS in the North Eastern States. The Ministry of Agriculture’s stress on increasing the storage capacity in the region to check the diver

**Summary:**

Independent surveys report 100% diversion of wheat and 60% diversion of rice intended for the Public Distribution System (PDS) in North Eastern States. The Ministry of Agriculture's plan to increase storage capacity aims to address this diversion, but the author contends it will prove ineffective without a thorough examination of the local situation and a careful analysis of the proposed solution's pros and cons. Advocating a classical-liberal emphasis on transparency and local knowledge, the post calls for an 'RTI revolution' in the North-East to empower citizens with information, enabling better scrutiny of government interventions and preventing wasteful top-down measures in favor of contextually informed policies.

**Key points:**

- Independent surveys show 100% diversion of PDS wheat and 60% of rice in North Eastern States.
- Increasing storage capacity will not curb diversion without studying local conditions.
- Government must analyze pros and cons of solutions before implementation.
- An RTI revolution is needed in the North-East for effective transparency.

**By renu vinod**

* * *

Independent surveys’ reports have found that there is 100% diversion of wheat and 60% diversion of rice meant for PDS in the North Eastern States. The Ministry of Agriculture’s stress on increasing the storage capacity in the region to check the diversion is indeed a good intention. But it is going to yield no positive results unless the government studies the local situtation thoroughly and analyses the pros and cons of the proposed solution before making it final.

[More..](http://blog.ccsindia.org/mt/archives/2006/02/needed_an_rti_r_1.html#more)

* * *

**About renu vinod**

## Welcome change in CBSE exams

Original: https://www.spontaneousorder.in/p/welcome-change-in-cbse-exams

Author: Spontaneous Order

Published: 2006-02-01T03:27:01.000Z

Topics: cbse-exams, education-reform, student-stress

> The Central Board of Secondary Education (CBSE) is going to implement several alterations in the class X and XII examination procedures from the current year. Generally considered as the most stressful part in student’s career, board exams were awaiting

**Summary:**

This post is a fragmentary teaser too short for a full summary, announcing CBSE's implementation of alterations to class X and XII exam procedures starting this year (2006 context), framing board exams as the most stressful part of a student's career long awaiting classical-liberal-aligned reforms, with a link to more details.

**Key points:**

- CBSE is introducing changes to class X and XII exams to reform stressful procedures.

**By praba**

* * *

The Central Board of Secondary Education (CBSE) is going to implement several alterations in the class X and XII examination procedures from the current year. Generally considered as the most stressful part in student’s career, board exams were awaiting reformation for a long time.

[More..](http://blog.ccsindia.org/mt/archives/2006/02/welcome_change.html#more)

* * *

**About praba**

## New ways of thinking about education

Original: https://www.spontaneousorder.in/p/new-ways-of-thinking-about-education

Author: Spontaneous Order

Published: 2006-01-30T02:33:57.000Z

Topics: education, education-spending, public-education

> According to a paid article in the Economist, ‘a quarter of all [British] children leave primary school unable to read and write, the OECD blames low British productivity on the badly educated workers at the bottom of the pile, and since 1997 spending o

**Summary:**

This fragmentary post quotes a 2006 Economist article critiquing British education: a quarter of primary school leavers unable to read and write, OECD attributing low productivity to poorly educated bottom-end workers, despite 45% real-terms spending increase since 1997 with negligible results. No original argument, analysis, or classical-liberal policy proposals are provided.

**Key points:**

- Quotes Economist (2006): 25% of UK primary leavers unable to read/write.
- OECD blames UK's low productivity on badly educated low-skill workers.
- Education spending up 45% in real terms since 1997, but little improvement.

**By makarand**

* * *

According to a paid [article](http://web.archive.org/web/20060202183053/http://www.economist.com/opinion/displaystory.cfm?story_id=E1_VQQNQSN) in the Economist, ‘a quarter of all \[British\] children leave primary school unable to read and write, the OECD blames low British productivity on the badly educated workers at the bottom of the pile, and since 1997 spending on education has gone up in real terms by 45%, without much to show for it’.

* * *

**About makarand**

## The Minority reservation setback

Original: https://www.spontaneousorder.in/p/the-minority-reservation-setback

Author: Spontaneous Order

Published: 2006-01-25T02:46:41.000Z

Topics: minority-reservations, electoral-politics, muslim-institutions

> In order to recapture the lost social groups in the electoral battle, the Congress party is acting aimlessly without thinking. The most recent examples have been the issue of providing minority institution status to Aligarh Muslim University (AMU) by th..

**Summary:**

This fragmentary post criticizes the Congress party's aimless electoral maneuvers to recapture lost social groups, highlighting two examples: the central government's granting of minority institution status to Aligarh Muslim University (AMU) and the Andhra Pradesh government's 5% reservation for Muslims in public appointments and educational institutions. From a classical-liberal viewpoint, these moves represent a setback, implying opposition to such identity-based policies as shortsighted and counterproductive.

**Key points:**

- Congress party is resorting to aimless tactics like minority status for AMU to regain electoral support.
- Andhra Pradesh government's 5% Muslim reservation in jobs and education is cited as another example of electoral pandering.

**By praba**

* * *

In order to recapture the lost social groups in the electoral battle, the Congress party is acting aimlessly without thinking. The most recent examples have been the issue of providing minority institution status to Aligarh Muslim University (AMU) by the Central government and five percent reservation for Muslims in public appointments and educational institutions by Andhra Pradesh government.

[More..](http://web.archive.org/web/20060202183053/http://blog.ccsindia.org/mt/archives/2006/01/the_minority_re_1.html#more)

* * *

**About praba**

## ASER: Charting a safe course Dr. A. Prabaharan

Original: https://www.spontaneousorder.in/p/aser-charting-a-safe-course-dr-a-prabaharan

Author: Spontaneous Order

Published: 2006-01-19T02:47:15.000Z

Topics: elementary-education, aser-report, private-schools, learning-outcomes

> Pratham, a well known NGO working in the field of education, commissioned a nationwide survey on elementary education. It released ASER – Annual Status of Education Report on 17 January 2006 in New Delhi which summarises the survey conducted between 14

**Summary:**

The ASER report, released by Pratham on 17 January 2006 based on a survey across 18,000 villages from 14 November to 20 December 2005, highlights stark disparities in elementary education. While BIMARU states like Bihar and Chhattisgarh show strong reading and arithmetic skills among children, developed states such as Tamil Nadu, Karnataka, and Gujarat shockingly exhibit deficiencies in basic reading and math. Involving 501 civil society organizations across 28 states and union territories, covering 9,252 schools, the report notes 1.4 crore children out of school, praises government enrollment efforts but urges acceleration toward 'education for all' by 2010. Private schools outperform government ones by 12%, with narrowing gender gaps—13% drop in girls' dropout rates over four years—though private schools enroll more boys, possibly linked to sex-selective abortions among the wealthy. The author questions methodology: school selection per village, test languages, private school types (recognized/unrecognized), and reading test mediums. ASER signals poor learning despite attendance, provoking reforms in pedagogy and education's purpose from a classical-liberal lens emphasizing civil society data over government claims and highlighting private sector edges.

**Key points:**

- ASER reveals BIMARU states like Bihar outperforming developed states like Tamil Nadu in children's basic skills.
- 1.4 crore children remain out of school, with private schools beating government ones by 12% in performance.
- Girls' dropout rates fell 13% in four years, but private schools have more boys, questioning female foeticide assumptions.
- Report raises alarms on learning deficits despite enrollment, calling for pedagogical reforms.

**By praba**

* * *

Pratham, a well known NGO working in the field of education, commissioned a nationwide survey on elementary education. It released ASER – Annual Status of Education Report on 17 January 2006 in New Delhi which summarises the survey conducted between 14 November to 20 December 2005. No doubt it was a marathon exercise covering 18,000 villages throughout India in a shortest span of time. Asking the volunteers to follow the centrally instructed questionnaire and guide map, the organization collected data from different parts of the country to write the report from Delhi. This work looks remarkable and unbelievable.

While reinforcing the common knowledge that BIMARU states have the notorious tag of high number of out of school children in the country, it discovers the enormous capabilities of children in Bihar, and Chattisgarh. According to this report, children in these states have good reading and arithmetic skills. On the contrary well developed states like Tamil Nadu, Karnataka and Gujarat gives shock to the nation. Many children in these states do not have the basic reading skills. They are also weak in performing mathematical calculations.

It was conducted with the help of 501 civil society organization in 28 states and some of the union territories. More with graphics, pictures and maps, less with text, ASER takes safe route to promote education in the country. Covering 9252 schools, the report lauds the government efforts in promoting elementary education. But it wants the government to charge its battery to achieve education for all by 2010. According to ASER, Nearly 1.4 crore children are not attending school at this stage. It gives marginal difference as far as the performance of private schools is concerned. In comparison to government run schools, private schools perform better over 12 per cent.

In gender terms, girls are not far away. There is a narrowing gap between the boys and girls in the enrolment matters. There is a 13 percent reduction in the girls drop out rate in the last four years. Private schools accommodate more boys than girls. Reasons need to be assessed. But there is a slip of assumption that in the northern states, private schools got more boys than girls because of selective sex abortions. If this is so, only rich people are killing girl babies before birth which undermines all government propaganda against female foeticide among wealthy sections of the population.

Certain parameters are not clear from the report. Whether all schools in a village were selected for the study or only few were taken? What was the language used to test the mathematical abilities of the children? What type of private school was surveyed – recognized or unrecognized? Is the Hindi or vernacular language text was used to test the reading skills of children all over the country?

Sending bad signals about the poor state of education in the country, ASER also set the alarm ringing about the meaning of education. It gives an indirect conclusion that those who are going to school are not learning. Is this is to provoke people in government and runners of educational institutions to reform the pedagogy and the very purpose of education. Lot of questions than answers that is thrown in by ASER.

Read more: [https://spontaneousorder.in/basic-education-as-priority-no-1/](https://spontaneousorder.in/basic-education-as-priority-no-1/)

* * *

**About praba**

## The proven scam that is EGS: the RTI bug bites the media too

Original: https://www.spontaneousorder.in/p/the-proven-scam-that-is-egs-the-rti-bug-bites-the-media-too

Author: Spontaneous Order

Published: 2006-01-17T02:45:13.000Z

Topics: rti, mgnrega, transparency, government-schemes

> The recent report by the Indian Express exposes the unaccountability and lack of transparency in the Employment Guarantee Scheme using the same methodology that was used by the grassroots Mazdoor Kisan Shakti Sangathan more than a decade ago to usher in..

**Summary:**

This brief, fragmentary post references a recent Indian Express report exposing unaccountability and lack of transparency in India's Employment Guarantee Scheme (EGS), employing the same grassroots RTI methodology used by Mazdoor Kisan Shakti Sangathan (MKSS) over a decade earlier to advocate for the Right to Information legislation. It links to a 2006 archived CCS India blog post titled 'The proven scam,' framing EGS critically from a classical-liberal viewpoint on government scheme failures. Insufficient content for a full summary.

**Key points:**

- Indian Express report reveals EGS unaccountability using MKSS's RTI methodology.

**By renu vinod**

* * *

The recent report by the Indian Express exposes the unaccountability and lack of transparency in the Employment Guarantee Scheme using the same methodology that was used by the grassroots Mazdoor Kisan Shakti Sangathan more than a decade ago to usher in the RTI legislation in India.

[More..](http://web.archive.org/web/20060202183053/http://blog.ccsindia.org/mt/archives/2006/01/the_proven_scam_1.html#more)

* * *

**About renu vinod**

## Basic education as Priority No. 1

Original: https://www.spontaneousorder.in/p/basic-education-as-priority-no-1

Author: Spontaneous Order

Published: 2006-01-11T02:47:50.000Z

Topics: basic-education, education-deregulation, decentralization, literacy

> Nothing is more shameful for a country than to keep quarter of its population as illiterates. Occasionally the issue of educating those who do not have the basic reading and writing skills come up for discussion in the corridors of power. This is happen..

**Summary:**

India's persistent failure to eradicate illiteracy, leaving a quarter of its population illiterate despite 58 years of government plans and legislation like the NDA's elementary education law and the suspended RTE Act, stems from excessive state control, politicization, and bureaucratic hurdles. The author, from a classical-liberal viewpoint, lambasts opposition from left parties to initiatives like Navodaya and Kendriya Vidyalaya schools while they decry poor education outcomes, and criticizes pitting basic against higher education. The core solution is depoliticising, deregulating, and decentralising education: empower village panchayats and unemployed educated local people (UELP) to deliver literacy programs, eliminate license barriers for starting primary schools, enable bank loans without hassles, and minimize central funding flows through bureaucratic layers. Media, movie stars, and sports heroes should be mobilized for campaigns. Government schemes fail due to implementation sabotage, like frustrating educational loans for the poor despite no-collateral rules, underscoring that minimal state involvement yields maximum benefits, with swift punishment for fraudsters. Achieving cent percent literacy would unlock India's vast potential in its multiparty democracy.

**Key points:**

- Governments have failed over 58 years to even halve India's illiteracy rate despite numerous plans and laws.
- Depoliticise, deregulate, and decentralise education by empowering village panchayats and UELP to eliminate illiteracy faster.
- Remove license requirements and bank loan hassles to let UELP start primary schools and provide quality basic education.
- Minimize central government control and bureaucratic layers to avoid implementation failures in schemes like educational loans for the poor.

**By praba**

* * *

Nothing is more shameful for a country than to keep quarter of its population as illiterates. Occasionally the issue of educating those who do not have the basic reading and writing skills come up for discussion in the corridors of power. This is happening with much sound and fury for the past fifty eight years. Every government had its own paper and plan contribution to the ways in which illiteracy can be removed from India. Alas! No government was able to achieve even halving the illiteracy level. Seriousness of eradicating illiteracy is picking up pace in the last few years. This is mainly because of the several international organizations report about India’s poor status in the social sector.

The National Democratic Alliance (NDA) set the ball rolling in a faster speed by bringing in legislation to make elementary education as a free and compulsory for all children up to the age of fourteen years. This encouraged the Congress led UPA government to think of Right to Education Act (REA). Due to the impending financial crunch and a lot of loopholes, the introduction of REA was suspended for the time being. This is another example of weakness of will of the state.

Many hurdles came in the way of government’s efforts to educate the whole population. Every section of the society had its own share of preventing the country in achieving literacy for all. More talk and less action left the country with no option than to continue as the one of the most uneducated nation in the world. When Rajiv Gandhi created Navodhya and Kendriya Vidyalaya schools in eighties, Left parties opposed it as an encouragement of luxury in schools. But the same parties cry foul over the sad state of Indian education. What a twist of tongue over a period of time!

Without understanding the priority, some people talk about why not free and compulsory secondary and tertiary education. In that confusion, the first priority of providing basic education suffered heavily. Creating clash among primary, secondary and tertiary tiers of education is a dangerous mode of pitting one against the other. The need of the hour is to depoliticising, deregulating and decentralising the education mission.

The grey areas in literacy growth are many. Too much of state control is one of the major stumbling block. It is impossible for the central government to penetrate to every nook and corner of the country to teach the uneducated. Although the onus is on the union government, the share of state governments in solving this problem is badly tapped. An important lesson from the past experience should be decentralized function of education mission. Funds and directions should not flow from the centre to state to village. Several blocks of babucracy is seriously damaging the main purpose. By encouraging village panchayats and unemployed educated local people (UELP), the speed of illiteracy elimination can be increased. Media can be encouraged to play an effective role. If movie stars and sports heroes can influence the lifestyles of people, why not they be brought in for the purpose of literacy development. Their involvement in the literacy campaign can really help the people to catch up with the literacy programmes.

Deregulation of the educational sector is essential to quicken the reach of education in the remote corners of the country. When government cannot achieve complete literacy in the last 58 years, it is better to leave to the UELP. By removing license hassles to start primary schools and allowing them to borrow money from banks, qualitative education can be provided to children. UELP involvement in the education mission can also reduce unemployment rate to a great extent.

Generally schemes are well intended to serve the poor. But the implementing agencies play the spoilsport in delivery. For instance the educational loan for poor students in the higher education is utter failure because of too much of harassment on the part of bank authorities. Despite having clear rules about no security and no mortgage, the bank authorities frustrate the needy students to such a level they do not come to the bank for loans. Minimal government involvement will produce the maximum educational benefits. Of course government should be alert enough to punish immediately the fake fellows who cheat the public in the name of education.

If India can survive successfully as a multiparty democracy with a decent level of development despite huge illiteracy, imagine the progress of the nation if there was cent percent literacy. To see the bright and better future, the nation needs all around attention on basic education.

Read more: [https://spontaneousorder.in/schools\_data\_missing/](https://spontaneousorder.in/schools_data_missing/)

* * *

**About praba**

## Pushing the Government Towards E-governance

Original: https://www.spontaneousorder.in/p/pushing-the-government-towards-e-governance

Author: Spontaneous Order

Published: 2005-12-13T22:10:47.000Z

Topics: right-to-information, e-governance, transparency

> India has finally passed an information legislation, and much to its credit, the government kept its promise of making the newly-formulated Right to Information Act participatory and meaningful. Now the question arises-is it not time to move as quickly,..

**Summary:**

This fragmentary 2005 post excerpt is too short to summarize meaningfully beyond its core claim: it praises India's newly passed Right to Information Act for being participatory and meaningful as promised, and poses a classical-liberal question advocating a swift shift from a reactive 'duty to furnish information' regime to a proactive 'duty to publish' one to advance efficient e-governance and transparency.

**Key points:**

- The post praises the RTI Act for fulfilling government promises of participation and meaningfulness.

**By Renu Pokharna**

* * *

India has finally passed an information legislation, and much to its credit, the government kept its promise of making the newly-formulated Right to Information Act participatory and meaningful. Now the question arises-is it not time to move as quickly, efficiently and effectively as possible from a duty to furnish information regime to a duty to publish one?

[More..](http://web.archive.org/web/20051213225635/http://blog.ccsindia.org/mt/archives/2005/12/pushing_the_gov.html#more)

* * *

**About Renu Pokharna**

## Rule of Law and its Economic Implications

Original: https://www.spontaneousorder.in/p/rule-of-law-and-its-economic-implications

Author: Spontaneous Order

Published: 2005-07-05T21:50:08.000Z

Topics: rule-of-law, judiciary-reform, economic-growth, judicial-pendency

> If one were to look at the factors of production (land, labour, capital and enterprise) and look at the corresponding cases pending in Indian courts, one can have a very good understanding of the performance of the institutions arranged around these fac..

**Summary:**

The post argues that understanding pending cases in Indian courts related to factors of production—land, labour, capital, and enterprise—reveals the poor performance of legal institutions, making their reform essential for economic progress from a classical-liberal viewpoint emphasizing secure property rights and contracts. Land and labour disputes dominate backlogs, with the government as the primary litigant, stifling capital investment and enterprise. Case pendency is an inadequate performance metric, as there are no standards for judgment quality. It cites Wolfgang's study, which finds a weak judiciary linked to lower per capita income, higher poverty, reduced private activity, poorer infrastructure, and more crime/industrial riots across Indian states. Matthieu Chemin’s research on 3.1 million High Court and 20 million subordinate court cases in 2000 shows slow judiciaries cause more contract breaches, deter relationship-specific investments, limit formal finance access, and favor inefficient dynasties; shifting a firm from highest to lowest pendency state boosts performance by 10%. Thus, economic reforms must prioritize judicial improvements to unlock growth.

**Key points:**

- Land and labour disputes form the bulk of pending cases in Indian courts, primarily involving the government as litigant, harming capital and enterprise.
- A weak judiciary negatively impacts economic development, causing lower per capita income, higher poverty, reduced private activity, poorer infrastructure, and increased crime.
- Slow judiciaries lead to more contract breaches, discourage relationship-specific investments, impede access to formal finance, and sustain inefficient dynasties among informal firms.
- Reforming legal institutions, beyond mere pendency reduction, is crucial for meaningful economic reforms in India.

**By Naveen Mandava**

* * *

If one were to look at the factors of production (land, labour, capital and enterprise) and look at the corresponding cases pending in Indian courts, one can have a very good understanding of the performance of the institutions arranged around these factors. it is no wonder that any task of economic reforms will have to take cognizance the improvement of the legal institutions. As of now, there are no standards for determining the quality of judgments passed by courts. Case pendency itself is taken as a sign of performance though I would argue that it is not a good enough indicator. However I am digressing from the point. If I remember Amir Ullah Khan and Bibek Debroy’s analyses well, land and labour disputes form the bulk of pending cases, and even there the government is the main litigant. No surprise that capital investment and enterprise suffer.

Read Wolfgang’s study on [Economic Consequences of a Weak Judiciary: Insights from India](http://web.archive.org/web/20051122082142/http://econwpa.wustl.edu/eprints/le/papers/0212/0212001.abs) and his abstract

> This paper examines the empirical relationship between the quality of the Indian judiciary and the economic development of the Indian States and Union Territories…The data indicate that a weak judiciary has a negative effect on economic and social development, which leads to: (i) lower per capita income; (ii) higher poverty rates; (iii) lower private economic activity, (iv) poorer public infrastructure; and, (v) higher crime rates and more industrial riots. The results are robust and the correlations are strong and negative.

Also read Matthieu Chemin’s study [Does the quality of the judiciary shape economic activity? Evidence from India](http://web.archive.org/web/20051122082142/http://darp.lse.ac.uk/Frankweb/courses/Ec501/MathieuCheminOctober04.pdf) and his abstract

> There were 3.1 million cases pending in India’s 21 High Courts and 20 million in its subordinate courts in 2000. This paper examines the consequences of a slow judiciary on the contracting behaviour of firms in India…I \[then\] examine how the case pendency rate in state courts in India affects the contracting behaviour of 170,000 small non-agricultural informal firms…My estimates suggest that a slow judiciary implies more breaches of contract, discourages firms from undertaking relationship-specific investments, impedes the access of firms to formal financial institutions, and favours inefficient dynasties. The negative implications of having an inefficient judiciary are large – moving a firm from the highest to the lowest pendency state would result in a 10% improvement in firm performance.

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## It is raining dogs!

Original: https://www.spontaneousorder.in/p/it-is-raining-dogs

Author: Spontaneous Order

Published: 2005-07-05T21:49:23.000Z

Topics: weather-forecasting, government-failure, information-sharing, hayek-knowledge

> Remember the dog in the manger story where the dog would sit on the hay and not let anybody use it, inspite of being himself unable to use it. It is something similar with the agencies involved in predicting the monsoon in India. To have an extent of th..

**Summary:**

Indian government agencies responsible for monsoon predictions act like the 'dog in the manger,' hoarding weather data they cannot effectively use or disseminate, forcing farmers to rely on private sources like ITC e-Choupals and an NGO in Chennai using a US website for fishermen. These agencies fail due to no obligation to provide timely, succinctly packaged information tailored to users' needs; data is delayed, not user-friendly, and partially censored for 'security' before sharing with privates. Research from the US and UK shows governments gain more from freely releasing weather info with minimal security restrictions, boosting productivity and tax revenues compared to charging high prices. This exemplifies a core government flaw: lacking mechanisms and incentives for information collection and action, as seen in Delhi's absent school records, leading to ineffective schemes. The author invokes Hayek's 'The Use of Knowledge in Society' to highlight dispersed knowledge's role in governance and 'The Wisdom of the Crowds' for harnessing collective wisdom, urging public release of government weather data for better outcomes.

**Key points:**

- Government weather agencies withhold timely, user-friendly monsoon data, driving reliance on private alternatives like ITC e-Choupals.
- Agencies fuzz data for security before private sharing, lacking incentives to serve farmers and fishermen effectively.
- US and UK studies prove free public weather data increases productivity and government tax revenues over restricted access.
- Governments design flawed policies due to information handicaps, such as missing school attendance records in Delhi.

**By Naveen Mandava**

* * *

Remember the dog in the manger story where the dog would sit on the hay and not let anybody use it, inspite of being himself unable to use it. It is something similar with the agencies involved in predicting the monsoon in India. To have an extent of the issue, I was surprised to know that an NGO in Chennai makes use of an US website to know about the weather for the purpose of informing fishermen before they venture onto the seas. Farmers depend more on the information distribution by private agencies (like the ITC e-choupals) for weather rather than government agencies. Why not government agencies? Because one, that information does not simply come out in time even if it is compiled; two, the information is not packaged succintly and conveniently according to the needs of the people (farmers, fishermen and many others for whom weather information is very important).

Why does this happen?

Because the agencies involved have no obligation to provide that information. Apparently, they can provide only a part of the info to private agencies for security reasons (this implies that some of the weather images are fuzzied before being handed over to the private agencies). This information is courtesy Jaganath Sankaran who is working on a project comparing weather information generation and communication by govt/pvt agencies. Research in the US and UK showed that the government stands to gain more if the weather info is given out freely and with minimum security context, as that would lead to better productivity and more taxes, as compared to high-priced (by the govt) weather information.

One of the most unrecognised and under-estimated problems of a government is the lack of a mechanism of collection of information in understanding the problem and not having the incentives to act according to the information. To put it in context, there are no department records of either pass percentages or attendance records in Delhi, there are many others lacking, and with this information handicap they go on to design solutions (the byword is schemes) for the problem. Will they work?

Read [this](http://web.archive.org/web/20051122082142/http://www.business-standard.com/common/storypage.php?storyflag=y&leftnm=lmnu5&leftindx=5&lselect=1&chklogin=N&autono=193285) insightful analysis in the Business Standard on why the govt-based weather prediction agencies should make their information public. For the academically inclined read [The Use of Knowledge in Society](http://web.archive.org/web/20051122082142/http://www.econlib.org/library/Essays/hykKnw1.html) by Nobel Laureate Hayek to understand information and its implications for public governance. On the same note, read [The Wisdom of the Crowds](http://web.archive.org/web/20051122082142/http://www.amazon.com/exec/obidos/tg/detail/-/0385503865/ref=pd_sxp_f/103-9099208-9770218?v=glance&s=books) to understand the best circumstances suitable for harnessing this phenomenon.

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## God and Governance

Original: https://www.spontaneousorder.in/p/god-and-governance

Author: Spontaneous Order

Published: 2005-07-02T21:48:51.000Z

Topics: education, government-schools, school-governance, delhi-education

> It is the end of the two month Summer Research Internship Program Researching Reality at CCS. So I call upon this intern who had been working on education legislation in Delhi and ask her “So Shruti, what has been your understanding from this project?

**Summary:**

Naveen Mandava shares an anecdote from the end of CCS's Summer Research Internship Program, where intern Shruti, after studying education legislation in Delhi, declares her newfound belief in God to explain the 'miracle' that anything works in the education sector amid 'problems galore.' She describes government primary schools as dismal due to governance failures, yet officials refuse to acknowledge issues—even off-record data—and instead target private schools for the public system's ills, while advocates push for more government intervention. Mandava highlights the value of deploying bright, industrious amateur policy researchers for fieldwork to test assumptions, rather than mere intellectual discourse. The core classical-liberal point is that a government's capacity to act does not imply it will do so effectively, underscoring persistent governance breakdowns in Delhi's public education that defy rational explanation and warrant skepticism toward expanding state roles.

**Key points:**

- Government primary schools in Delhi suffer from dismal governance, yet officials deny problems and blame private schools.
- Empirical fieldwork by interns reveals systemic education failures that prompt existential despair, attributing functionality to divine intervention.
- A government's ability to intervene does not guarantee effective action, challenging calls for more government in education.
- Bright students should test policy assumptions through on-ground research rather than abstract discourse.

**By Naveen Mandava**

* * *

It is the end of the two month Summer Research Internship Program Researching Reality at CCS. So I call upon this intern who had been working on education legislation in Delhi and ask her “So Shruti, what has been your understanding from this project?”

She replies “Naveen, I have started believing in God after this study. Only God can account for what is happening on the education scene in Delhi. There are problems galore and it is a miracle that whatever little is happening is actually happening.” I couldn’t contain my surprise at her emotional outburst to a standard question that is put across to every intern. She went on to elaborate “Government primary schools are dismal. However nobody recognizes the problem is with the governance of these schools. They still talk of more government. Officials target the private schools for the ills of the government schools. Government officials deny data or even info off the record regarding problems of schools…”

It is worthwhile having bright and industrious students (amateur policy researchers in this case) to go out and test their assumptions regarding governance rather than have an intellectual discourse. The point that is missed is perhaps this: that a government can do something does not in any way mean that it will actually do it!

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Is it overpopulation or overcrowding?

Original: https://www.spontaneousorder.in/p/is-it-overpopulation-or-overcrowding

Author: Spontaneous Order

Published: 2005-07-01T21:48:22.000Z

Topics: overpopulation, land-use, state-failure, urban-myths

> On one of my recent train trips Delhi-Chennai-Bangalore-Delhi, I couldn’t help but contemplate the amount of uninhabited land that one comes across. With that kind of land, one wonders why we cry of overpopulation? Is it because we intellectuals sit in

**Summary:**

Naveen Mandava challenges the notion of overpopulation in India, arguing that observations of vast uninhabited land during train journeys from Delhi to Chennai and Bangalore reveal the myth. Intellectuals in overcrowded cities mistakenly attribute issues to sheer population numbers, missing broader land availability. A basic calculation demonstrates that providing every Indian family a 1200 sq ft flat—accounting for habitable land and ecological footprint—would fit all within Meghalaya. From a classical-liberal viewpoint, 'overpopulation' serves as a convenient state excuse for past policy failures and future resource grabs, diverting attention from government mismanagement rather than addressing real constraints like poor land utilization or urban planning. The post urges recognizing abundant space to rethink development narratives beyond population control.

**Key points:**

- Vast uninhabited land in India is visible during train trips, contradicting overpopulation claims.
- All Indian families could occupy 1200 sq ft flats within Meghalaya, factoring in habitable land and ecological footprint.
- Overpopulation is a myth perpetuated by city-dwelling intellectuals who overlook national land availability.
- The narrative excuses state failures in performance and justifies resource extraction.

**By Naveen Mandava**

* * *

On one of my recent train trips Delhi-Chennai-Bangalore-Delhi, I couldn’t help but contemplate the amount of uninhabited land that one comes across. With that kind of land, one wonders why we cry of overpopulation? Is it because we intellectuals sit in overcrowded cities and think that the problem is of overpopulation! Missing the wood for the trees?

We did a little basic calculation. If you provide every family in India a 1200 sq ft flat and lay them side by side and take into account factors like habitable land in India, ecological footprint etc, we could all live in the state of Meghalaya. Is there really any such problem as overpopulation? Or is it one more convenient excuse of the state for its past poor performance and future garnering of resources?

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Is PROFIT a dirty word?

Original: https://www.spontaneousorder.in/p/is-profit-a-dirty-word

Author: Spontaneous Order

Published: 2005-07-01T21:47:45.000Z

Topics: profit-motive, free-markets, education, individual-freedom

> Whenever there is talk of markets and profit as a driving motivation for individuals, the constant accusation is that individuals in the market are constantly driven to make money and profit. The underlying assumption being that profit can be only scale..

**Summary:**

Naveen Mandava challenges the common accusation that market-driven individuals are solely motivated by monetary profit, arguing instead that profit encompasses both material (e.g., earnings from teaching a child) and psychic forms (e.g., joy from the act of teaching). He rejects the underlying assumption that profit scales only in financial terms, emphasizing that market arrangements allow individuals to pursue whichever type of profit they prefer. For example, if someone dislikes the 'exploitation' in an existing school, they remain free to start their own school, deriving psychic profit while providing education to children. This classical-liberal defense portrays markets as enablers of personal freedom and diverse motivations, countering the vilification of profit as a 'dirty word' and highlighting individual agency to innovate and align economic activity with personal values beyond mere money-making.

**Key points:**

- Profit includes both material gains like money and psychic rewards like joy from teaching.
- Markets enable individuals to freely pursue either material or psychic profit.
- If dissatisfied with exploitative market actors like schools, individuals can start alternatives to satisfy their psychic profit motives.
- This reframes the profit motive positively, emphasizing freedom over greed accusations.

**By Naveen Mandava**

* * *

Whenever there is talk of markets and profit as a driving motivation for individuals, the constant accusation is that individuals in the market are constantly driven to make money and profit. The underlying assumption being that profit can be only scaled in terms of money.

I don’t buy that!

Profit can be material or psychic. When I make money out of teaching a child, I make material profit. But when I derive joy from teaching a child, I derive psychic profit. Market arrangements allow individuals to derive profit eitherwise: material or psychic. If i don’t like the exploitation of a school, I am free to start a school that will satisfy my psychic profit and provide schooling to children.

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## The matrix of decision-making!

Original: https://www.spontaneousorder.in/p/the-matrix-of-decision-making

Author: Spontaneous Order

Published: 2005-07-01T21:46:46.000Z

Topics: government-spending, incentives, public-choice, decision-making

> We are three friends: Pandu, Chandu and Bandhu. One evening we decide to have a drink. We add a little complication to the usual routine of menu selection. (Sorry guys, whoever you are!) Pandu pays for the drink; Chandu chooses the particular drink but ..

**Summary:**

The post introduces the Payer-Chooser-Beneficiary (PCB) matrix via an anecdote of three friends—Pandu (payer), Chandu (chooser), and Bandhu (beneficiary)—selecting drinks, where roles are deliberately split. This setup illustrates a common life pattern but reveals profound incentive problems when applied to government: taxpayers pay taxes, governments choose spending allocations, and beneficiaries (often unrelated parties) receive services. From a classical-liberal perspective, this separation severs accountability, making efficient spending unlikely and explaining why most government expenditures are ill-managed. The author, drawing from a mid-flight discussion with Parth, argues that unifying these roles—as in private decisions—aligns incentives for prudence, while the PCB disconnect in public finance predictably fosters waste. The framework critiques state intervention by highlighting how diffused responsibilities erode stewardship, a core concern for those favoring market-like accountability in resource allocation.

**Key points:**

- Separating payer, chooser, and beneficiary roles creates misaligned incentives leading to inefficiency.
- Government taxation and spending exemplify the PCB matrix: taxpayers fund, politicians/bureaucrats decide, third parties benefit.
- Most government spending is ill-managed due to this incentive disconnect, unsurprising from a classical-liberal view.

**By Naveen Mandava**

* * *

We are three friends: Pandu, Chandu and Bandhu. One evening we decide to have a drink. We add a little complication to the usual routine of menu selection.

[

![](http://web.archive.org/web/20051122082142/http://markearnest.net/albums/college/My_Pictures0021.sized.jpg)



](http://web.archive.org/web/20051122082142/http://markearnest.net/albums/college/My_Pictures0021.sized.jpg)

(Sorry guys, whoever you are!)

Pandu pays for the drink; Chandu chooses the particular drink but finally Bandhu consumes. How will the event roll out? Observe how the cause and consequences of the decision have been split among three parties: Payer (Pandu), Chooser (Chandu) and Beneficiary (Bandhu).

Witness this happening in so many events of our life. Take tax, for instance. I pay the money, the government chooses how it is spent, and the beneficiary is an entity completely different from either the payer or the chooser. How appropriate are the incentives for spending the money efficiently? Isn’t it unsurprising that most government spending is ill managed?

More on the Payer-Chooser-Beneficiary (PCB) matrix (courtesy a mid flight discussion with Parth)!

[More..](http://web.archive.org/web/20051122082142/http://blog.ccsindia.org/mt/archives/2005/07/the_matrix_of_d_1.html#more)

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Feminism: Are we worse off?

Original: https://www.spontaneousorder.in/p/feminism-are-we-worse-off

Author: Spontaneous Order

Published: 2005-06-30T21:53:08.000Z

Topics: feminism, individual-liberty, gender-roles

> Here’s what I chanced upon.. “After 30 years, women have made tremendous strides – strides most of us would loath to give up. But perhaps it’s time to ask an important question: Not, “Are women succeeding on an equal basis with men?” but “Ar

**Summary:**

The post critiques modern feminism from a classical-liberal lens, arguing that it has not delivered true liberation for women but merely substituted one rigid set of societal rules for another. Referencing a 1999 article questioning whether women are happier after 30 years of feminist advances, the author contends that traditional expectations confined women to homemaking and family duties dictated by scriptures or society, suppressing personal dreams. Feminism, however, imposes new mandates: pursuing high-powered careers, competing aggressively with men, and embodying the 'superwoman' ideal—proving points at the expense of authentic desires, relationships, and vulnerabilities. This leaves women guilty about love or opting out of the rat race. True emancipation, the author asserts, lies in individual conviction and autonomy: the power to define one's life free from external 'Dos and Don'ts,' whether choosing a demanding career with pride or prioritizing family without judgment or regret. Women should have equal liberty, opportunities, and resources for their chosen paths, unburdened by imposed dreams, enabling them to 'just be themselves.'

**Key points:**

- Feminism replaces societal rules of homemaking with mandates for career success and competition with men, perpetuating pressure rather than freedom.
- Women under feminism feel compelled to prove superiority, suppressing vulnerabilities and true desires like family time.
- True liberation requires personal conviction to choose one's life path—career or home—without guilt or societal questioning.
- Society must allow women equal opportunities for any choice, fostering pride and dignity in individual decisions.

**By amee**

* * *

Here’s what I chanced upon..

“After 30 years, women have made tremendous strides – strides most of us would  loath to give up. But perhaps it’s time to ask an important question: Not, “Are women succeeding on an equal basis with men?” but “Are today’s women happy?” … [http://www.boundless.org/1999/departments/pages/a0000123.html](http://web.archive.org/web/20051122082142/http://www.boundless.org/1999/departments/pages/a0000123.html)

It’s true what this article says about the conventional idea of feminism and how it has somehow managed to worsen the lives of women. Essentially- feminism is a “system” too with a pre-defined set of rules. Earlier women lived their lives according to what the scriptures or the society at large preached. They followed rules set by society and its masters and gave up their personal dreams and pleasures to achieve the socially accepted definition of the “ideal woman”.

The only thing that changed with feminism is the rules that they were supposed to follow. There still exist a long list of “Dos and Don’ts” – except that its contents have changed. In earlier times – they were expected to stay at home and look after the family; whereas now- they’re expected to have careers and beat men at their own games. They struggle to have careers, tirelessly compete with men to “prove that they’re better”. They are always out to prove a point – often giving up what they truly want. They feel guilty about love, about relationships. They don’t want to admit to their vulnerabilities and keep working at being superwomen.

Feminism has changed nothing. True liberation would come only with the power to think. It would come only when women have the conviction to decide what they want out of their lives irrespective of what is expected of them – and with the strength to see their decisions through. It would come when a woman who wants to give up a high flying career to spend time with her family will no longer be questioned. It would come only when women are allowed to just be themselves and not asked to chase a dream that someone else has dreamt for them. If they want a high flying career, they should have the liberty, opportunity and resources to make that a reality and be proud of their achievements. But if they don’t want to go out and make the mega bucks and be back home everyday before the husband and kids – they should be able to do so with pride and dignity – sans any guilt and regret at having compromised on their talents and ability!

* * *

**About amee**

## Make RTI A Reality- Let The Government Publish Information Rather Than Merely Furnish It

Original: https://www.spontaneousorder.in/p/make-rti-a-reality-let-the-government-publish-information-rather-than-merely-furnish-it

Author: Spontaneous Order

Published: 2005-06-21T21:59:11.000Z

Topics: right-to-information, government-transparency, suo-motu-disclosure, civil-society-role

> The Right to Information movement in India has come a long way since it started a decade ago in India’s desert state of Rajasthan. Volunteers from the now famous Mazdoor Kisan Shakti Sangathan began their campaign for a social audit of the money the vil

**Summary:**

The Right to Information (RTI) Act 2005 in India, born from Rajasthan's Mazdoor Kisan Shakti Sangathan campaign in the 1990s with slogans like 'Our Money, Our Accounts,' empowers citizens to request information but keeps government as master by requiring applications, fees, and discretionary approvals. From the classical-liberal view, this perpetuates subjecthood; true empowerment demands proactive 'suo motu' disclosure where public authorities publish information routinely via websites, hard copies, and accessible means, minimizing RTI requests. The Act nods to this but lacks enforcement. Author Renu Pokharna advocates adopting the UK Freedom of Information Act 2000 model: mandatory publication schemes approved by an independent Information Commissioner, detailing info classes, formats, and charges, with departmental FOI links covering schemes, processes, and releases. Civil society should aid governments in disseminating data like subsidies and tenders to remote areas, quantify most-requested info for automatic release, and strengthen rules despite flawed commissioner appointments by PM-led committees. This shifts debate from what government reveals to what it justifiably hides, fostering a culture of openness and accountability.

**Key points:**

- Push public authorities to proactively publish information suo motu through publication schemes like the UK's, specifying classes, formats, and charges.
- Civil society groups must assist governments in making information accessible online, in hard copies, and to remote/unlettered citizens.
- Quantify most-demanded RTI requests to enable automatic voluntary disclosure, monitored by Information Commissioners in annual reports.
- Adopt independent oversight like UK's Information Commissioner responsible to Parliament to enforce transparency culture.

**By Renu Pokharna**

* * *

The Right to Information movement in India has come a long way since it started a decade ago in India’s desert state of Rajasthan. Volunteers from the now famous Mazdoor Kisan Shakti Sangathan began their campaign for a social audit of the money the village government in Beawar had spent on public works. They were the first to use slogans like “The Right to Know is the Right to Live”, and “Our Money, Our Accounts”, forcing the government to take notice and ultimately open themselves up for public scrutiny. Seven states and Delhi enacted their RTI Act before the NDA-headed Central government woke up to the reality that RTI in India was here to stay and passed its own Freedom of Information Act in 2002. Jammu and Kashmir passed their Act in 2004.  
Civil society groups trashed the FOIA as weak and ineffective. The UPA government after being elected kept its promise in the Common Minimum Programme and involved civil society groups in the redrafting process. Today, we have the new avatar of the FOIA 2002-the Right to Information Bill (RTI), 2005- awaiting Presidential assent. RTI activists and groups consider this Bill to be very strong and with great potential to demand information and bring in transparency.  
But that is exactly where the problem lies. We, the people of India- citizens now, under the Bill- still have to demand information by requesting for it. We still have to pay for the information that we request for, and then wait while our application gets processed. The decision regarding whether to give or deny us the requested information still lies with the government. Thus, the government still remains our master, we still remain subjects who would be subject-pun intended-to the decision made by our sarkar.  
But, all is not lost. The Bill does provide that “it shall be the endeavour of every public authority…to provide as much information suo motu to the public at regular intervals through various means of communication…so that the public have minimum resort to the use of this Act to obtain information”.  
This is where India can make use of best practice examples to establish an apparatus by which the government actually goes about providing information freely, by placing information in the public domain where people can access it without having to request. Of course this would be by making information freely available on the net and in hard copies too, and in any other form and in places where people can-easily- access information. However, users of the net do emerge as favoured information seekers, especially because they get to know what information is available freely, with it just being a click away. But then again, we need to start somewhere.  
Civil society groups should take the initiative to help government get information to the most remote and unlettered people in India-be they minutes of meetings, committee reports, organisation structure, or information regarding subsidies, tenders and any other bit of information that is otherwise freely available on the net and is of interest to the masses. The UK Freedom of Information Act 2000, for example, requires each public authority to adopt and maintain a publication scheme whose purpose is to “specify the classes of information that the authority publishes or intends to publish; the form in which this is or will be done; and whether there is any charge for the information.  
Each scheme must be approved by the Information Commissioner”. It is well worth noting here that the Information Commissioner is an independent public official responsible directly to Parliament. What makes the UK information access regime, well, advanced, is that the apparatus to translate voluntary disclosure into practice is already in place, and perhaps more importantly, there is also a culture of openness. Government departments in UK have on their website a Freedom of Information link. The Department of Health, for example, has an FOI link, which provides sub-links to the UK Freedom of Information Act (in simple, lay person language), the method to process an application with specific contact details of officials to direct the application to, complaints process if applicant is unhappy with the way a request for information has been handled (as provided for in the Act), publication scheme (all classes of information, publications, library of publications, inspections reports, how to order publications etc.), latest information releases (based on requests for information), feedback form, name and contact details of official who is accountable for maintaining the publication scheme in a way that meets the objective of the FOIA etc. By adopting a model like the one elaborated above is one way by which the Central Act can move several steps ahead of the States’ Acts.  
An elaborate set-up that already places in the public domain most information, which the government believes to be of interest and/or concern to the public with a specification whether the information is available free of charge or not, is indeed a more effective one than one that expects citizens to request for information and then pay for that information while they wait endlessly for it.  
One way to ensure that the government actually places relevant information in the public domain is for it to quantify all the most demanded requests and then voluntarily disclose that information without anybody having to request it anymore. Civil society groups are trying to see this through in the rules. Here, instead of simply compiling data on the number of requests that have been made to each public authority-as the Bill provides- the Ministry/Department can also quantify the types of requests made. This should enable the suo motu release of information that is most requested. While preparing its annual report, the appropriate Information Commissioner can, on the basis of the data acquired from the Ministry/Department, monitor whether such suo motu disclosure is actually being effectuated or not.  
The only hitch here is that the Central/State Information Commissioner will be appointed by an internal committee, headed by the Prime Minister, and comprising of the Leader of the Opposition in the Lok Sabha and a Union Cabinet Minister nominated by the Prime Minister (the State Information Commissioner will be appointed by the corresponding posts in the States) – i.e., the ‘independent’ oversight body will not be so independent after all! In many developed countries that have the RTI Act, most of the information of interest and/or concern to the people is already available. Perhaps that is why the RTI Act seems to work better there. In such a set-up, the information seeker will only have to request and pay for certain classes of information, which have already been specified as not freely available. The debate then is no longer what the government can or will reveal, but what it can hide from the public, who elected it to power to look after their interest.

Read more: [https://spontaneousorder.in/transparency-of-rights-act-good-governance-and-civil-society/](https://spontaneousorder.in/transparency-of-rights-act-good-governance-and-civil-society/)

* * *

**About Renu Pokharna**

## Learn to Spend before you Spend on Learning!

Original: https://www.spontaneousorder.in/p/learn-to-spend-before-you-spend-on-learning

Author: Spontaneous Order

Published: 2005-06-11T21:46:05.000Z

Topics: education, school-funding, government-incentives, bureaucratic-inefficiency

> More on the education front…for long we have been talking that money is not the palliative for the ills afflicting education in the country. The moot question is who has the best incentive to spend the money just and efficiently for the cause of educati

**Summary:**

Naveen Mandava argues that simply pouring money into India's education system fails to address its deep-seated problems, as the critical issue is who controls the spending and their incentives to allocate it efficiently for children's learning. He references his Economic Times article on the 'Grand Drop-out Party,' highlighting systemic failures in education funding. Drawing from discussions with Bangalore's Akshara Foundation, he notes that schools receive budgets based on previous year's estimates rather than actual requirements, forcing good principals to fudge accounts to prevent shortfalls and ensure resources for students. This echoes a broader bureaucratic inefficiency: a district with surplus funds for malaria control couldn't redirect them from an earmarked leprosy scheme despite no leprosy cases, leaving health needs unmet. From a classical-liberal viewpoint, such rigid, top-down allocations distort incentives, waste resources, and undermine effective education delivery, underscoring the need for mechanisms that empower those closest to the ground—like schools and principals—with flexible, needs-based funding to drive real improvements.

**Key points:**

- Money alone cannot fix India's education woes; proper incentives for efficient spending are essential.
- Schools receive budgets based on prior-year estimates, ignoring current needs, prompting principals to manipulate accounts.
- Bureaucratic earmarking prevents flexible use of funds, as seen in a district unable to shift leprosy money to malaria treatment.

**By Naveen Mandava**

* * *

More on the education front…for long we have been talking that money is not the palliative for the ills afflicting education in the country. The moot question is who has the best incentive to spend the money just and efficiently for the cause of education. As regards this, an article of mine appeared recently in the *Economic Times*. Read about the Grand Drop-out Party [here](http://web.archive.org/web/20051122082142/http://economictimes.indiatimes.com/articleshow/1133165.cms).

In my discussions with Akshara Foundation in Bangalore, it came to my knowledge that schools will be provided budget based on previous year’s estimates and have nothing to do with the actual requirements of the schools. Good principals may actually fudge the accounts a bit so that the schools don’t suffer. Reminds me of an incident I heard in a district which had money and malaria but the district officials couldn’t spend the money on malaria treatment because the scheme money was earmarked for leprosy, but the district didn’t have any leprosy!

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Any takers for Public Policy specialists?

Original: https://www.spontaneousorder.in/p/any-takers-for-public-policy-specialists

Author: Spontaneous Order

Published: 2005-05-26T21:45:14.000Z

Topics: public-policy, ias-reform, governance-markets, domain-expertise

> Among the excess baggage that has been handed down to us from the past is our esteemed IAS (Indian Administrative Service). However why, I consider it will be on its way out might seem interesting. IASes (the top strata of civil services consist of abou..

**Summary:**

India's IAS, comprising about 5,000 top officers, is outdated excess baggage from the past, as these generalist bureaucrats—often transferred across ministries like from agriculture to education—lack domain-specific expertise for sound policy development and evaluation. Politicians prioritize strategic voting interests, sidelining rigorous policy analysis, while India appallingly lacks professional public policy institutes and think tanks abundant in the developed West; current substitutes like newspaper analysts or NGOs fall short of the needed rigor. The author calls for cultivating a market of domain experts in sectors like transport, education, health, and telecommunications, supplied by private institutes rather than a new government 'Indian Policy Service.' State governments, with over a score of entities, and MPs already building policy staff, can hire from this market, shifting governance from politician-driven to policy-based. This market-driven approach, akin to how management institutes professionalized business, addresses reform discussions' neglect of 'who' implements changes, benefiting businesses interfacing with policy and informed citizens.

**Key points:**

- IAS officers' generalist nature and frequent transfers hinder sector-specific policy development.
- India lacks rigorous public policy professionals compared to Western think tanks.
- Private institutes should create a market of domain experts for states and MPs to hire.
- This enables policy-based governance over politician-driven decisions, like business professionalization via management schools.

**By Naveen Mandava**

* * *

Among the excess baggage that has been handed down to us from the past is our esteemed IAS (Indian Administrative Service). However why, I consider it will be on its way out might seem interesting.

[

![blue\_final.jpeg](http://web.archive.org/web/20051122082142/http://blog.ccsindia.org/blue_final-thumb.jpeg "blue_final.jpeg")



](http://web.archive.org/web/20051122082142/http://blog.ccsindia.org/blue_final.jpeg)

IASes (the top strata of civil services consist of about 5,000 officers) usually are people who know the domain well and can be good at implementing. Politicians are driven by their strategic voting interests. Through them, we never get to know whether the policies developed are sound or whether they will prove to work. There is a lack of professionals who are good at developing public policies; can provide multiple policy alternatives or better, evaluate possible policy options. This lack of public policy professionals is appalling when you compare the developed West and India with their numerous institutes and think tanks of this genre. This underdeveloped market of today in India is comprised of your newspaper analysts or NGOs. However they cannot provide the rigor that envelopes the policy debates that usually take place in developed countries.

This is more important when you see bureaucrats being transferred within various ministries. Only a bureaucrat can transfer his knowledge from agriculture to education, because he is a part of the File Transfer Protocol, which is not suited for developing specific policies for specific sectors.

Hence the need today is to develop a class of public policy professionals with domain expertise in transport, education, health, telecommunication etc. With more than a score state governments who can employ these professionals, governance might come to be more policy-based rather than politician-based. The shift is apparent when you see a trickle of MPs developing a staff who can provide policy expertise to them. Businesses which have more interaction with public policies will benefit from this section as in citizens who will be more informed of various policy implications.

Most reform measures in our discussions are relegated to the “what” of reform and not the “who”, as in “who” should carry out this particular reform. The idea obviously is not to have an Indian Policy Service, but let the market (private institutes) provide them. They will do for public policies what entrepreneurship and management institutes did for business. State governments can choose from this public policy market the best professionals who can serve them. Any takers for this next market out there?

Read more : [https://spontaneousorder.in/india-and-big-babu/](https://spontaneousorder.in/india-and-big-babu/)

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Acting pricey!

Original: https://www.spontaneousorder.in/p/acting-pricey

Author: Spontaneous Order

Published: 2005-05-25T21:44:15.000Z

Topics: free-markets, pricing

> It is as much a crime to ask for the cheapest price as to demand for the highest price possible. Rephrase of Lord Acton’s quote from memory!

**Summary:**

This very brief, fragmentary post from 2005 rephrases Lord Acton’s quote from memory: 'It is as much a crime to ask for the cheapest price as to demand for the highest price possible,' implying from a classical-liberal view that voluntary price bargaining—whether buyers seeking lows or sellers highs—is equally legitimate and non-criminal in free markets. No substantive argument, policy analysis, or data is developed; an image is included but not described.

**Key points:**

- Asking for the cheapest price is as morally legitimate as demanding the highest price.

**By Naveen Mandava**

* * *

It is as much a crime to ask for the cheapest price as to demand for the highest price possible.

[

![price.jpg](http://web.archive.org/web/20051122082142/http://blog.ccsindia.org/price.jpg "price.jpg")



](http://web.archive.org/web/20051122082142/http://blog.ccsindia.org/price.jpg)

Rephrase of Lord Acton’s quote from memory!

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Economics helps you order a meal

Original: https://www.spontaneousorder.in/p/economics-helps-you-order-a-meal

Author: Spontaneous Order

Published: 2005-05-24T22:02:11.000Z

Topics: economics, decision-making, ccs-library

> I’m always bothered that at CCS group lunches (or herd lunches as we call them) we take a long time to place our orders. Jason Kottke offers tips by crystallising the lessons of such recent economics bestsellers as Freakonomics, Blink and the Wisdom of

**Summary:**

This short, fragmentary post by Sruthijith humorously notes the lengthy time taken to place orders at CCS 'herd lunches' and references Jason Kottke's tips for faster ordering, drawn from economics bestsellers Freakonomics, Blink, and The Wisdom of Crowds—all available in the CCS library—highlighting practical applications of economic insights in everyday decisions from a classical-liberal perspective.

**Key points:**

- CCS group lunches involve prolonged ordering processes.

**By Sruthijith**

* * *

I’m always bothered that at CCS group lunches (or herd lunches as we call

[

![](http://web.archive.org/web/20051122082142/http://images.google.co.in/images?q=tbn:qDOwHY0Sd2cJ:http://www.v-direct.org.uk/newpix/burger.gif)



](http://web.archive.org/web/20051122082142/http://images.google.co.in/images?q=tbn:qDOwHY0Sd2cJ:http://www.v-direct.org.uk/newpix/burger.gif)

them) we take a long time to place our orders. [Jason Kottke](http://web.archive.org/web/20051122082142/http://www.kottke.org/05/05/how-to-order-food) offers tips by crystallising the lessons of such recent economics bestsellers as [Freakonomics](http://web.archive.org/web/20051122082142/http://www.amazon.com/exec/obidos/ASIN/006073132X/ref%3Dnosim/0sil8), [Blink](http://web.archive.org/web/20051122082142/http://www.amazon.com/exec/obidos/ASIN/0316172324/ref%3Dnosim/0sil8) and the [Wisdom of Crowds](http://web.archive.org/web/20051122082142/http://www.amazon.com/exec/obidos/ASIN/0385503865/ref%3Dnosim/0sil8) (all of which incidentally are in the CCS library – for readers nearer home).

* * *

**About Sruthijith**

## OUT OF SYNC: State as the organised manifestation of connoisseurs of art

Original: https://www.spontaneousorder.in/p/out-of-sync-state-as-the-organised-manifestation-of-connoisseurs-of-art

Author: Spontaneous Order

Published: 2005-05-23T22:01:29.000Z

Topics: cultural-policy, state-arts-patronage, government-institutions, public-administration

> “In a democratic regime, the arts can derive their sustenance only from the people, and the state, as the organized manifestation of the people’s will, must, therefore, undertake … maintenance and development [of arts] as one of [its] first responsi

**Summary:**

The post opens with a 1953 quote from Union Minister Maulana Abdul Kalam Azad asserting that in a democracy, the state—as the organized manifestation of the people's will—must prioritize the maintenance and development of arts. It then details recent drama at the Sangeet Natak Academy (SNA), India's premier state agency for promoting dance, music, and drama, where high-profile resignations by Carnatic maestro Balamuralikrishna and vice-chairman Kavalam Narayana Panicker accuse Odissi exponent and Padma Bhushan awardee Sonal Mansingh, the chairman, of highhandedness, corruption, nepotism, and arbitrariness. Mansingh retorts that she is being scapegoated by a nexus attempting to run the academy as their personal fiefdom while she seeks to address its accumulated mess. The artistic community remains divided. From a classical-liberal viewpoint, this imbroglio underscores the profound ills plaguing state-run cultural institutions, which defy resolution through mere stop-gap measures and question the government's competence as connoisseurs of art.

**Key points:**

- Sangeet Natak Academy faces resignations from Balamuralikrishna and Kavalam Narayana Panicker over allegations of corruption and highhandedness against chairman Sonal Mansingh.
- Sonal Mansingh claims she is targeted by a nexus resisting her efforts to clean up the academy's mismanagement.
- State-run arts institutions like SNA suffer from deep-rooted problems beyond superficial fixes.
- The post contrasts historical state advocacy for arts patronage with contemporary evidence of its failures.

**By Sruthijith**

* * *

> “In a democratic regime, the arts can derive their sustenance only from the people, and the state, as the organized manifestation of the people’s will, must, therefore, undertake … maintenance and development \[of arts\] as one of \[its\] first responsibilities…” – Maulana Abdul Kalam Azad, Union Minister for Education, January 28, 1953 at the inauguration of Sangeet Natak Academy.

Of late, drama has taken precedence over dance and music at the Indian state’s agency that is the vanguard of our cultural

[

![Sonal Mansingh](http://web.archive.org/web/20051122082142/http://www.motionsound.com/images/dances/indian/2odissi.jpg "Sonal Mansingh")



](http://web.archive.org/web/20051122082142/http://www.motionsound.com/images/dances/indian/2odissi.jpg)

heritage and through which it seeks to promote dance, music and drama. A spate of resignations by high profile artists who are office bearers of the academy have revealed that all isn’t song and dance at the Sangeet Natak Academy. The imbroglio, it appears, is over the chairman, the odissi exponent, padmabhushan Sonal Mansingh. A flurry of allegations have thrown up a lot of dirt this far with carnatic maestro Balamuralikrishna and the vice chairman of SNA, the ace playwright Kavalam Narayana Panicker putting in their papers over the highhandedness of Sonal in running the academy’s affairs. The artistic and creative community has also been divided on the issue with many standing by and others crucifying Sonal. Allegations of corruption, nepotism, arbitrariness and highhandedness have been raised against Sonal, who claims that she is being made a scapegoat by a nexus that is trying to run the academy as their personal fiefdom, for trying to clear up the mess that the academy has become. While it is hard to make out who is right and who is wrong or even if there is a right and a wrong at all, it is anybody’s guess that our state run institutions are plagued by ills that have aggravated beyond the convenient cures of stop-gap measures.

[More..](http://web.archive.org/web/20051122082142/http://blog.ccsindia.org/mt/archives/2005/05/out_of_sync_sta.html#more)

* * *

**About Sruthijith**

## Is economic nationalism adverse patriotism?

Original: https://www.spontaneousorder.in/p/is-economic-nationalism-adverse-patriotism

Author: Spontaneous Order

Published: 2005-05-21T21:38:28.000Z

Topics: free-trade, economic-nationalism, protectionism, globalization

> I make decent shoes based in Delhi. However the quality and price of my leather is best for my customers if I can get it from Raman’s tanneries in Kolkata. I can make my products even more cheaper, competitive and better if I can get them from Rehman’

**Summary:**

Naveen Mandava argues that economic nationalism is misguided patriotism that harms Indians, illustrated by a Delhi shoe-maker who sources better, cheaper leather from Kolkata's Raman over local Jagguda without backlash, but faces 'unpatriotic' accusations for Karachi's Rehman despite identical job loss to Jagguda and gains for Delhi producers and consumers. If internal liberalization allows sourcing from competitive Indian markets like Kolkata, consistency demands unrestricted global trade. Job losses from competition mirror those from science and technology, yet governments fund innovation; instead, they should free markets to enable wealth creation. Most cling to nationalism's vain promise to help 'our people,' but it inflicts suffering, as Deepak Lal critiques 'soft left' bleeding hearts as enemies of the poor. Leftists hypocritically champion equality within borders while ignoring universal equality. Personal love for countrymen is natural, but extrapolating it to economic controls commits the fallacy of composition, hurting Indians more than helping. Economic integration counters nationalism's intuition, per referenced sources.

**Key points:**

- Economic nationalism wrongly labels cross-border sourcing as unpatriotic even when it displaces local jobs identically to internal sourcing while benefiting producers and consumers.
- Internal liberalization within India logically extends to global free trade to access competitive markets.
- Job losses from market competition should prompt government deregulation to foster wealth creation, not restrictions.
- Nationalistic economic controls commit the fallacy of composition by misapplying personal patriotic feelings to policy, harming the nation.
- True equality in economics is universal, not confined to national borders, critiquing leftist hypocrisy.

**By Naveen Mandava**

* * *

I make decent shoes based in Delhi. However the quality and price of my leather is best for my customers if I can get it from Raman’s tanneries in Kolkata. I can make my products even more cheaper, competitive and better if I can get them from Rehman’s tanneries in Karachi. However in both cases, Jagguda, my supplier from Delhi would lose his contract.

If I take the latter option of outsourcing from Karachi, many (politicians, leftists and laymen) would consider me unpatriotic. Notwithstanding the fact that I and my customers in Delhi, both suffer. However if I did it from Kolkata, I wouldn’t be upbraided so much. In both cases, Jagguda would lose. The Karachi option would be looked down upon. Does economic nationalism serve us? What is the calculus that we take into account while considering the benefits imposed upon Raman or Jagguda or even me?

If it is wrong to source from Jagguda, then by an extrapolation of the same principle, it is wrong to source from Raman as well. I should be probably helping my fellow Delhiite, Jagguda at all costs. If we are already on the way to internal liberalisation in India, where producers can source their products from a competitive liberalised market within India, why should it be restricted within India only? If job losses are the result, then markets (already all around us) should be freed up by government to let people create wealth. If job losses were the only concern, then the government should stop funding science and technology for apparently they invariably destroy jobs.

But most of us still stick to the vain notion that nationalism will help our people whereas it makes them suffer all the more. Read Deepak lal’s engaging article [Bleeding hearts: It is time we pensioned the Soft Left off because they are the enemies of the poor](http://web.archive.org/web/20051122082142/http://www.business-standard.com/common/storypage.php?storyflag=y&leftnm=lmnu5&leftindx=5&lselect=2&chklogin=N&autono=189161)

There is a thin line between placing all men equal on a pedestal and placing your desirable men only on the pedestal. The Left is in a bid to promote equality within a country/state/area only. And equality is an universal concept. It is ironical that the Left frequently indulges in this contradiction.

While people can indulge in personal preferences of love for their country, should these be allowed to take on controls over people, especially economic controls. It is natural that our hearts may bleed more for a crying Indian than a crying Pakistani. But one cannot extrapolate this feeling to a nation and economic consequences. The fallacy of composition, I guess!

[

![bikeflag.jpg](http://web.archive.org/web/20051122082142/http://blog.ccsindia.org/bikeflag.jpg "bikeflag.jpg")



](http://web.archive.org/web/20051122082142/http://blog.ccsindia.org/bikeflag.jpg)

Perhaps our love for India actually hurts Indians! Read [here](http://web.archive.org/web/20051122082142/http://angrybear.blogspot.com/2005/05/more-on-globalization.html) why economic integration is counter-intuitive to economic nationalism. And see where it is coming from?

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Cues on Queues!

Original: https://www.spontaneousorder.in/p/cues-on-queues

Author: Spontaneous Order

Published: 2005-05-19T21:27:07.000Z

Topics: price-ceilings, government-shortages, indian-railways, public-service-queues

> Rrrrring! It is 6 am. I curse my alarm, have a shave, shower and shampoo and hop onto the auto to my destination. I arrive two hours before the appointed opening time. However, I am not alone. There are serpentine queues all around. I am exasperated. I ..

**Summary:**

Naveen Mandava recounts arriving two hours before a railway ticket counter opens at 8 am, only to find queues that began at 9 pm the previous night—nine hours early—amidst people sleeping on newspapers, playing cards, and fending off queue-jumpers with a policeman's lathi. This familiar Indian scene, persisting for over 50 years, stems from government-imposed price ceilings on tickets, creating chronic shortages that force first-come-first-served queuing as the sole allocation mechanism. While monetary costs remain low, the unaccounted time costs—hours wasted, disrupted plans—are immense, highlighting the sclerosis in governance critiqued in Arun Shourie's book. From a classical-liberal viewpoint, these queues exemplify how regulations stifling free price signals distort markets, rationing scarce tickets inefficiently through human endurance rather than willing buyers. Mandava contrasts this with a friend's quip for a 'private train,' underscoring the absurdity and advocating implicitly for market liberalization to end such wasteful public service failures.

**Key points:**

- Queues at Indian railway ticket counters form due to government price ceilings causing persistent shortages, lasting over 50 years.
- People arrive up to 9 hours early (9 pm for 8 am opening) to secure a spot, incurring massive unaccounted time costs.
- Policemen use lathis to enforce queue discipline amid attempts by intruders to jump lines.
- Free market pricing would replace queues with efficient allocation based on demand, avoiding time wastage from regulatory distortions.

**By Naveen Mandava**

* * *

Rrrrring! It is 6 am. I curse my alarm, have a shave, shower and shampoo and hop onto the auto to my destination. I arrive two hours before the appointed opening time. However, I am not alone. There are serpentine queues all around. I am exasperated. I go to the first person in the queue and ask him “Sir, when did you come to be first in the line?” He triumphantly says “Yesterday night at 9 pm!” I am not sure whether to admire his fortitude or despise my laziness.

[

![train\_queue.jpg](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/train_queue.jpg "train_queue.jpg")



](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/train_queue.jpg)

I take along look around me and am dismayed. Some of the queue-ees are half-asleep on newspaper sheets (ubiquitous Indian habit of recycling newspapers); others are standing and looking into the distance; a few are playing cards and other activities galore. Suddenly there are shouts of *“saale ko andar ghusne mat do,” “aey bhaisaab, yeha se nikal jayiye”*! The lone policeman comes, takes a look around, and brandishes his lathi to strike fear into the queue-breakers. Most of the queue-ees are happy, another attempt at intrusion has been foiled!

For those of you who frequent railway ticket booking centres, these set of events will not come as a surprise! It wouldn’t have to me as well, but for my forays into economics and public policy. Standing there looking at the queues abounding, people coming in about 12 hrs early only to make sure a place in the queue for a railway ticket. And this must have been happening for the last more than 50 years. Reservation forms have to be fought/ searched for, information on trains is woefully inadequate.

My friend, for whose sake I accompanied and whose work has nothing to do with public policy, remarked “I wish I had a private train!” I laughed heartily at the outrageous suggestion and dipped back into my reading of *[Governance and the Sclerosis that has Set in](http://web.archive.org/web/20050520233733/https://www.vedamsbooks.com/no38345.htm)* by Arun Shourie.

But I can’t help trying to understand these queues, queue-ees and the reasons & consequences of these queues. Queues are an allocative mechanism of providing goods/ services on a first-come/ first serve basis. They are an outcome of shortages in the particular market of goods. Since government regulations prohibit free play of prices of these goods and indulge in price-ceilings, the only way to allocate them is through queues. Thus these tickets may have a lower monetary cost but their cost of time is unaccounted in terms of queuing arrangements, changes in plans to suit unavailability of tickets etc.

[More..](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/mt/archives/2005/05/rrrrring_it_is.html#more)

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Right Act, Wrong Tack

Original: https://www.spontaneousorder.in/p/right-act-wrong-tack

Author: Spontaneous Order

Published: 2005-05-17T21:27:44.000Z

Topics: rti-act, transparency, government-disclosure, civil-society-advocacy

> CCS was invited by the Indian Express to comment on the Right to Information Bill, 2005 that was passed recently. The article printed on May 16, 2005 is reproduced over here. Right Act, Wrong TackUnder the new law the state’s duty to publish information

**Summary:**

The Right to Information (RTI) Bill, 2005, is a significant achievement but takes the wrong tack by emphasizing the government's Duty to Furnish (DTF) information on request rather than Duty to Publish (DTP) proactively, as argued from a classical-liberal perspective prioritizing citizen empowerment through automatic transparency. Section 4(b) mandates suo moto disclosure of organizational functions and employee rules but omits critical items like public contracts, disaster management projects, and official travel expenses. In developed democracies, RTI works because most information is already public, not due to penalties or adjudication. Ironically, the RTI Bill itself was unavailable online or at departments post-passage on May 16, 2005, requiring a request to access it. The Delhi RTI Act demonstrated DTP's impact: public disclosure of ration supply details improved shop operations, prompting monthly automatic publication and eliminating individual requests. Deletion of Section 4(e), which required prior public notification of policies and schemes, further weakens proactive disclosure. Civil society and reformer-bureaucrats must push to integrate actionable DTP, ensuring the state publishes all citizen-affecting information without prompting, transforming RTI from a paper right into a high-quality democratic tool.

**Key points:**

- RTI Bill 2005 prioritizes Duty to Furnish on request over Duty to Publish suo moto, omitting disclosures like contracts, disaster projects, and travel expenses.
- Delhi RTI Act's public ration supply data improved delivery, leading to automatic monthly publication without individual requests.
- Deletion of Section 4(e) removed prior public notification of government actions like policies and schemes.
- Civil society must advocate to make DTP actionable, committing government to proactive publication of all relevant information.

**By Naveen Mandava**

* * *

CCS was invited by the *Indian Express* to comment on the Right to Information Bill, 2005 that was passed recently. The article printed on May 16, 2005 is reproduced over here.

[

![key\_information.jpg](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/key_information.jpg "key_information.jpg")



](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/key_information.jpg)

> **Right Act, Wrong Tack***Under the new law the state’s duty to publish information must be underlined*
> 
> The Right to Information (RTI) Bill, 2005, is one of the most significant bills that have been passed recently. But concerns of proper implementation will challenge civil society. What is imperative to note is whether the RTI bill is in line with the quality of democracy and empowerment of people that we seek to achieve. A good right to information should have two components: government’s DTP or Duty to Publish (suo moto) and government’s DTF or Duty to Furnish (on request). This Bill’s emphasis is on the DTF, not DTP.
> 
> The sub-section (b) of Section 4, which deals with the mandatory suo moto disclosure of information, includes functions and responsibility of the government organisations, rules, regulations governing its employees. But it has left out suo moto publishing of important items like public and utility contracts, disaster management projects and official travel expenses.
> 
> The RTI Act seems to work in many developed democracies, not because of high penalties to bureaucrats or more transparent adjudication of denials, but because most of the information citizens would like to acquire is already available. A high quality democracy would hence make it incumbent on the state to make public all information which affects a citizen.
> 
> Though the RTI bill has come out, it is not available for viewing online or at departments. A DTP Act would have made it obligatory for the state to have put it up online and also made departments have a copy. Ironically, one may have to file a request for the RTI bill!
> 
> Another important item left out is the suo moto publication of information, released to any person under the RTI Act and which, because of its subject matter, has become or is likely to become, the subject of subsequent requests for substantially the same records. This would shift the focus of the Bill from DTF to DTP. For instance, under the Delhi RTI Act, citizens demanded the information on the delivery of ration supplies to ration shops in their area and the disbursements of these rations to card holders. Just by getting these details out in the open, the working of ration shops has improved beyond imagination. Seeing the impact of this information, the Delhi government promises to make it available automatically every month. The ration card holders would no longer have to file individual requests and fight monthly battles to assure them their ration. Why then should we wait for some in every ward in every town and municipality to file requests individually?
> 
> Again, the Section 4 (e), which stated that prior information of any action (policy, scheme, programme or law) by the government will be communicated to the public, has been deleted.
> 
> The challenge for civil society and reformer-bureaucrats hence is this: to make DTP an integral and actionable section of the Act. Unless the government government commits to making available to citizens most of the necessary information without their asking, RTI would remain more of a paper right.
> 
> *The writer is president, Centre for Civil Society, New Delhi*

And now see the article being quoted over here [Public’s Right to Information, a New Reality in India](http://web.archive.org/web/20050520233733/http://www.ipsnews.net/new_nota.asp?idnews=28711)

“the fact that the Right to Information Bill passed last week is yet unavailable online speaks volumes for India’s culture of obscuring if not denying information to the public”

Imagine my surprise when I was researching the bill and there was no copy available of it online. If you have a link, do please provide us!

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Not all hunky “dowry” with the market?

Original: https://www.spontaneousorder.in/p/not-all-hunky-dowry-with-the-market

Author: Spontaneous Order

Published: 2005-05-14T21:28:34.000Z

Topics: dowry, property-rights, free-markets, indian-economy

> A boy is selling himself and the bride’s father is willing to pay — isn’t this what the market’s about? Image courtesy South Asian Women’s Forum Sunanda K Datta Ray makes this point in his article in Business Standard The big deal about dowry. O

**Summary:**

Naveen Mandava argues that dowry in Indian marriages is not a true market exchange, as it fails the classical-liberal test of voluntary transactions between property rights holders. In a genuine market, the bride (A) and groom (B) would negotiate directly, but dowry involves fathers (D) dictating terms, treating the groom as a commodity sold by the bride's father. This violates property rights, leading to exploitation rather than mutual agreement. Historically, dowry likely arose because women couldn't physically secure property, prompting fathers to transfer daughters' shares indirectly to grooms. Its form reflected economic scarcities: scooters and fridges in shortage eras, gold amid inflation, real estate under regulations, or influence for access. In a liberalized economy enabling wealth pursuit, women's economic independence, rule of law protecting intangible assets, and groom choice by brides will transform dowry. Parents' pressure diminishes, shifting negotiations to partners themselves, advised by parents, making it voluntary. Legislation drives it underground, akin to state-imposed choices like the landline telephone privilege, failing to address root property rights issues.

**Key points:**

- Dowry marriages are not true markets because they exclude property rights holders (bride and groom) from voluntary exchange, involving parental negotiations instead.
- Dowry's prevalence stemmed from women's historical inability to secure property, with forms adapting to scarcities like regulated goods, gold, or influence.
- A liberalized economy with women's independence and rule of law will evolve dowry into voluntary partner agreements, reducing parental dominance.
- Anti-dowry laws push the practice underground without resolving property rights violations, similar to failed state interventions like landline allocations.

**By Naveen Mandava**

* * *

**A boy is selling himself and the bride’s father is willing to pay — isn’t this what the market’s about?**

[

![dowry\_large.GIF](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/dowry_large.GIF "dowry_large.GIF")



](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/dowry_large.GIF)

  
Image courtesy South Asian Women’s Forum

Sunanda K Datta Ray makes this point in his article in *Business Standard* [The big deal about dowry](http://web.archive.org/web/20050520233733/http://www.business-standard.com/common/storypage.php?storyflag=y&leftnm=lmnu5&leftindx=5&lselect=2&chklogin=N&autono=188827). Or read it in the extended entry.

This is an argument that I frequently encounter. “Look voluntary buying and selling is happening. Isn’t this the market?” This is when I think it is time to revisit [property rights](http://web.archive.org/web/20050520233733/http://en.wikipedia.org/wiki/Property_rights).

A desirable market *is* one where the buyer and seller have property rights over the commodities of exchange and the exchange performed thereafter is voluntary. An example. A loves B, because B has desirable attributes. A persuades B to love in return. What follows is a voluntary agreement on the nature of the relationship and the exchange/ demarcation of concomitant responsibilites.

A dowry marriage treads murky ground. It is not a voluntary exchange of property rights holders. A loves B but B’s daddy, let us call him D, enters the picture. A is of marriageable age but D decides the terms. In that sense it is not a true market exchange. Or to complicate the matter futher, A’s daddy and B’s daddy decide the terms.

One reason I can hypothesize that dowry must have become popular is because of a property rights background. In earlier times, property could only be guarded by men. Women were unable to take care of their property because of their inability to command physical security of the property when needed. This must have led to the “daddy” handing over his daughter’s share to the “chosen” man (and presumably to the wife) indirectly. It will be interesting to look at the nature of dowry in recent Indian history. These would have very interesting lessons for a to-be-liberalised Indian economy.

> When it was the scarcity economy items like scooter and fridge would have flourished. When you were unsure about the value of your money, gold dowry would have been rampant. When real estate was valuable because of regulatory controls, the amount of property mattered. When only power/ influence could get your work done, then power linkages mattered. When only a few people could get access to urban facility, their **Dowry Qoutient** (DQ) went up. If you have an income-translatable education or a place in the “land of dreams” then your DQ went up.

Pardon my narrow scope of experience and intellect, but I see the future of dowry as this.  
An economy which offers opportunies for “pursuit of life, liberty and happiness” or, let us say, amassing wealth will translate into less pressure on parents to seek a wealthy groom or give into demands for dowry.  
An environment which allows greater economic independence for women and a rule of law that allows them to amass wealth (today, wealth is either in your mind and/or in your card…these cannot be taken away by force as could have been possible in recent times) and choice of groom in their hands (which is already a trend) will change the nature of dowry.  
It will only change the nature of dowry because D would no longer be an important part of the marriage equation. A and B will have to check for this part (wealth-worthiness) themselves and then agree upon voluntarily, albeit with D’s advice. Today what happens is the arrangement is between A’s dad and B’s dad. Here the property rights holders and the investors in the marriage are A and B. So the exchange between A (the groom) and D (the bride’s dad) is not a true market exchange. This is not what markets is about! Markets without property rights holders will only result in exploitation.

Thinking of a fantastic legislation and an idealistic implementation will not end the problem, for it will only succeed in pushing the dowry market underground.

Here the example is more akin to the state deciding our choices and then have us to live with those choices. This is the reason for the great landline telephone debacle! Now read about that in Sunanda K Datta Ray’s article [Land lines still signify privilege](http://web.archive.org/web/20050520233733/http://www.business-standard.com/common/storypage.php?storyflag=y&leftnm=lmnu5&leftindx=5&lselect=2&chklogin=N&autono=187537)

[More..](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/mt/archives/2005/05/not_all_hunky_d.html#more)

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Corruption as a symptom and not a cause!

Original: https://www.spontaneousorder.in/p/corruption-as-a-symptom-and-not-a-cause

Author: Spontaneous Order

Published: 2005-05-13T21:30:16.000Z

Topics: education, corruption, regulation, government-monopoly

> For long, CCS has argued most corruption in public affairs is an outcome of poorly designed rules and regulations, or rules which should have not been there in the first place. Education World, the only magazine on education in India takes a hard look a..

**Summary:**

CCS argues that corruption in Indian education is primarily a symptom of poorly designed or unnecessary rules and regulations, rather than an inherent moral failing, echoing a classical-liberal view that government monopoly in a non-competitive market fosters flouting of rules. Drawing from Education World, the post distinguishes financial corruption—such as kickbacks in government school construction leading to shabby infrastructure, teachers' salaries consuming 85-90% of meager outlays, and opaque budgets with per capita spending of Rs.2,940 annually (Rs.245 monthly, $5.45; disputed by author)—from extensive regulatory corruption including license-permit barriers to private schools, textbook rackets from vernacular mandates, teacher appointment/transfer bribes, inspection shakedowns, exam leaks, admission rackets, merit hoax fueling coaching booms, obsolete syllabi, and 25% teacher absenteeism (1 million daily). The author contends that regulatory causes dominate because a single government agency controls the undeveloped market, enabling 'jiski lathi uski bhains' (might is right). Efforts to curb financial corruption are insufficient without addressing regulatory flaws and introducing competition to undermine the monopoly.

**Key points:**

- Most corruption in education stems from regulatory barriers like licenses and inspections rather than just financial graft.
- Government monopoly in schooling creates non-competitive conditions where rules are routinely flouted.
- Private schools face stifling regulations despite demand from middle class, blocking competition.
- Teacher absenteeism affects 25% (1 million) in government schools daily due to unaccountability.
- Reform requires dismantling poor rules to enable market competition, not just anti-corruption drives.

**By Naveen Mandava**

* * *

For long, CCS has argued most corruption in public affairs is an outcome of poorly designed rules and regulations, or rules which should have not been there in the first place. *Education World*, the only magazine on education in India takes a hard look at corruption in education [here](http://web.archive.org/web/20050520233733/http://www.educationworldonline.net/eduworld/article.php?choice=prev_art&article_id=370&issueid=30) and presents an opinion similar to the one we stated.

[

![laws\_corruption.gif](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/laws_corruption.gif "laws_corruption.gif")



](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/laws_corruption.gif)

  
There are two kinds of corruption in education: financial and regulatory (based on outcomes)

**Financial corruption** results in the following:

1\. De riguer kickbacks in government school construction contracts. Government schools are shabby, uninviting and lack even basic facilities such as drinking water and toilets because favoured contractors have to pay massive kickbacks to politicians and educrats

2\. Negligible investment in infrastructure. With teachers salaries reportedly consuming 85-90 percent of meagre outlays for education, there is little left for investment in libraries, labs, drinking water, toilets etc

3\. Denial of information: opaque education budgets. There’s a shroud of secrecy over how education budgets are devised and deployed. However the bottomline is that the per capita education outlay of the Central and state governments combined is a mere Rs.2,940 per year or Rs.245 ($ 5.45) per month — embarrassingly inadequate (**I am in disagreement with this fact! The calculations probably don’t account for a lot of factors**)  
**Regulatory corruption** results in the following:

1\. Pernicious license-permit-quota raj regime. Despite India’s rapidly expanding middle class shunning patently dysfunctional, chaotic government schools, a slew of licences, permits, no-objection certificates and quota stipulations govern the promotion of financially independent private schools

2\. Unchecked textbooks publishing, printing and distribution rackets. By imposing vernacular languages as the medium of instruction in state government schools, floodgates have been opened for unqualified and crooked authors, printers and publishers to access captive markets

3\. Teacher appointment rackets. With pay scales in government schools higher than in private institutions, auctioning of teachers’ posts by politicians and educrats is rife in all states of the Indian Union

4\. Teacher transfer and salary payment rackets. Government school teachers often have to pay bribes to avoid transfers to hardship postings as also to receive pay cheques in time

5\. Pervasive inspection raj. Even financially independent private education institutions are subject to myriad health, hygiene and operational rules and regulations offering government inspectors numerous opportunities for shakedowns

9\. Exam paper leakages and corruption rackets. Against the backdrop of acute capacity shortages in higher education, school-leaving and entrance exam papers are routinely purchased and sold by proliferating education mafias

10\. College entry and admission rackets endanger student idealism. With admission into the much-too-few institutions of higher education governed by complex rules, regulations, quotas and consequential rackets, students become indifferent to corruption

11\. The grand merit hoax and coaching classes boom. Though entry into highly subsidised institutions of tertiary education is supposedly on merit, the overwhelming majority of successful entrants into the too-few prized institutions such as the IITs and IIMs are from middle and upper class households which can afford entrance exam preparation provided by ubiquitous and expensive private sector coaching schools

12\. Obsolete syllabuses and sub-standard teaching in higher education. Secured tenure and faculty unaccountability in institutions of higher education rigidly controlled by out-of-date educrats, have rendered syllabuses and curriculums obsolete

13\. Pervasive teacher indifference and absenteeism. On any given day 25 percent (i.e 1 million) teachers in government education institutions are absent

These corrupt practices information are courtesy the *Education World*.

My argument is this: while efforts to remove financial corruption are well intentioned, a look at the financial corruption and the regulatory corruption outcomes will enable us to understand that most corruption arises from regulatory causes. When you have only one agency in a non-competitive market, obviously all rules will be flouted with gay abandon. It is only incidental that the government is the sole agency in an undeveloped education market. And you don’t need to know economics to understand that in such a system, *jiski lathi uski bhains*!

[More..](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/mt/archives/2005/05/corruption_as_a.html#more)

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Government spending on education

Original: https://www.spontaneousorder.in/p/government-spending-on-education

Author: Spontaneous Order

Published: 2005-05-13T21:29:28.000Z

Topics: education-spending, school-vouchers, private-education, education-reform

> Education World recently had their cover issue on Why India’s most pro-education budget isn’t good enough My response to their article printed in their magazine is over here . I reproduce it here for your thoughts. I read your cover story ‘Why India

**Summary:**

Naveen Mandava critiques *Education World*'s claim that India's pro-education budget falls short due to insufficient spending, arguing instead that the focus should be on the 'how' of spending rather than the 'how much.' He advocates monitoring the quality of spending before massive infrastructure investments, citing empirical evidence that quality improvements precede effective scaling. Mandava promotes classical-liberal reforms like demand-side financing through education vouchers, allowing for-profit and English-medium primary schools, and regulatory tweaks to boost private investment with inherent accountability. He suggests magazines create localized school ratings to spur competition and inform parents. Drawing from Dr. Sajitha Bashir’s study on 1990s government expenditure, he notes: in a hypothetical Rs.100 state budget, Rs.20 goes to education, Rs.10 to elementary education, Rs.8.50 to teacher/admin salaries, and just Rs.1.50 to additional teachers, buildings, and student incentives—leaving scant funds (Rs.15-30 per child annually) for teacher training or learning materials, compared to Rs.88 per child on mid-day meals for enrollment boosts. Success metrics emphasize quantity (enrollment) over quality, perpetuated by teachers' unions and anti-market policies that deny children affordable quality schooling.

**Key points:**

- Prioritize monitoring spending quality before infrastructure investments to improve learning outcomes.
- Implement education vouchers and allow for-profit English-medium schools to leverage private accountability and investment.
- Develop localized school rating systems to foster competition and empower parental choice.
- Government elementary education spending heavily favors salaries (Rs.8.50 of Rs.10 per Rs.100 budget) over learning materials (Rs.15-30 per child).
- Shift from enrollment-focused quantitative targets to quality metrics in education schemes.

**By Naveen Mandava**

* * *

*Education World* recently had their cover issue on [Why India’s most pro-education budget isn’t good enough](http://web.archive.org/web/20050520233733/http://www.educationworldonline.net/eduworld/mng_issue_page.php?choice=show_isspag&issueid=29)

[

![govt spending money.jpg](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/govt%20spending%20money-thumb.jpg "govt spending money.jpg")



](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/govt%20spending%20money.jpg)

  
My response to their article printed in their magazine is over [here](http://web.archive.org/web/20050520233733/http://www.educationworldonline.net/eduworld/article.php?choice=prev_art&article_id=364&issueid=30) .

I reproduce it here for your thoughts.

> I read your cover story ‘Why India’s most pro-education budget isn’t good enough’ (EW April). There is some homework needed on this argument. It is not the ‘how much’ of spending but the ‘how’ of spending that is important.In particular I am inclined to challenge your argument that we first need massive investment in education infrastructure and then monitor the quality of spending. My understanding based on empirical evidence is precisely the opposite: First monitor the quality of spending and then invest in education.
> 
> Again while it is true that investment is needed in education, it doesn’t mean all investment has to be raised through public funding. Implementing schemes that draw private spending are a better bet because of the better accountability systems they come with. Demand-side financing by the government through education vouchers and tweaking the regulatory system by allowing for-profit and English medium primary education institutions can lead to more investment and better, accountable managements. An esteemed magazine like yours can have a localised rating scheme for schools (like *India Today* does for business schools) in every city, in fact, in every district of India. Imagine the readership and the good that you will be doing to parents by providing this information! Imagine the competition it will set off among schools to provide sound education!
> 
> A few back-of-the-envelope calculations based on Dr. Sajitha Bashir’s study ([Government Expenditure on Elementary Education in the Nineties in India](http://web.archive.org/web/20050520233733/http://www.delind.cec.eu.int/en/pressandinfo/publications/expenditure_elementary_education.pdf)) throws up interesting findings. Assume that a state’s budget is Rs.100. Usually about Rs.20 of it is devoted to causes of education. Again, about Rs.10 of the Rs.20 goes towards elementary education. Of it Rs.8.50 is approximately disbursed as salaries to teachers and administrative staff. The rest — Rs.1.50 is spent on three items primarily: paying salaries of additional teachers hired during the Plan period; construction of new buildings and classrooms and incentives for attendance of students (uniforms, textbooks etc). Where is the money for quality improve-ments like teacher training or learning materials that arguably do more for learning outcomes than any other input?
> 
> The success of a scheme is often accounted for in terms of meeting the quantitative targets which are usually enrollment figures and not reflective of the quality of schooling. The annual expenditure on instructional/ learning materials per child is in the range of Rs.15-30. Compare this with the expenditure of Rs.88 spent on every child for his mid-day meals to “get” him to school to boost enrollment figures.
> 
> Pardon my strong feelings about education reform, but I can’t believe how a set of entrenched interests (like teachers’ unions) and wrong ideas (disallowing markets in education) have deprived millions of children a basic right: quality schooling at affordable rates.

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## State security vs private security

Original: https://www.spontaneousorder.in/p/state-security-vs-private-security

Author: Spontaneous Order

Published: 2005-05-11T21:31:51.000Z

Topics: private-security, police-reform, law-enforcement, market-liberalization

> “We live in an age when pizza gets to your home before the police.” Jeff Marder I have spent considerable time in a few metro cities like Kolkata, Hyderabad, and Bangalore. When I came to Delhi, one particular issue regarding residential property in D

**Summary:**

In Delhi, the prevalence of private security guards outside most residential properties highlights the ineffectiveness of the state-sponsored Delhi police, which falls under the Union government rather than the state. The author, drawing from experiences in other metro cities like Kolkata, Hyderabad, and Bangalore, notes that citizens are 'voting with their feet' toward private security agencies due to distrust in the police, ranging from lack of facilities to outright unreliability. This market demand for private security correlates with purchasing power, underscoring a classical-liberal critique of state monopoly in law enforcement. Quoting Jeff Marder, 'We live in an age when pizza gets to your home before the police,' the post illustrates the urgency of reform. It poses two key questions from a market-oriented perspective: How should the market for private security be liberalized? And where should the institutional boundaries for private agencies be drawn to balance competition with public order? The argument implicitly favors expanding private provision to address state failures in security.

**Key points:**

- Private security guards are ubiquitous outside Delhi homes due to the ineffectiveness of the Union-controlled Delhi police.
- Citizens prefer private security agencies, signaling deep distrust in state police for reasons including poor facilities and unreliability.
- Demand for private security rises with purchasing power, demonstrating market responsiveness where state services fail.
- Policymakers should consider liberalizing the market for private security and defining clear institutional limits for these agencies.

**By Naveen Mandava**

* * *

“**We live in an age when pizza gets to your home before the police.**” Jeff Marder

I have spent considerable time in a few metro cities like Kolkata, Hyderabad, and Bangalore. When I came to Delhi, one particular issue regarding residential property in Delhi stood out clearly. The use of private security guards in front of most houses. When you look at the ineffectiveness of police forces in Delhi (Delhi police is under the Union government and not the state government of Delhi) one is able to understand the phenomenon.

This brings me to the market for law-enforcement especially private security. When people are voting with their feet to private security agencies, you know that the state sponsored police force is not being held in trust by the people. This could be due to various reasons extending from “They don’t have that kind of facilities” to “I can’t trust Delhi police.” No one would argue that these private security vendors are in great demand and are especially a function of purchasing power.

[

![police.gif](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/police.gif "police.gif")



](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/police.gif)

There are two interesting questions:  
1> How should the market for private security be opened up?  
2> Where do you draw the “institutional” line for private security agencies?

[More..](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/mt/archives/2005/05/state_security_1.html#more)

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Governments and free speech

Original: https://www.spontaneousorder.in/p/governments-and-free-speech

Author: Spontaneous Order

Published: 2005-05-11T21:31:11.000Z

Topics: free-speech, press-freedom

> Should/ Can a government of a particular country initiate action against a newspaper of another country, as in the case of this? Pakistan is likely to take legal actions against Washington Times for this cartoon. Read about it here.

**Summary:**

This brief post questions whether a government should or can initiate legal action against a newspaper in another country for publishing an offensive cartoon, citing Pakistan's reported intent in 2005 to take action against the Washington Times over a specific cartoon. From a classical-liberal viewpoint, it implicitly challenges cross-border censorship by governments, highlighting tensions between national sovereignty and free speech principles. No detailed argument or conclusion is developed; it serves as a provocative query with an archived link and image.

**Key points:**

- Pakistan planned legal action against the US-based Washington Times for a 2005 cartoon.
- The post asks if governments can or should target foreign newspapers over offensive content.

**By Naveen Mandava**

* * *

Should/ Can a government of a particular country initiate action against a newspaper of another country, as in the case of this?

Pakistan is likely to take legal actions against Washington Times for this cartoon. Read about it [here](http://web.archive.org/web/20050520233733/http://www.dawn.com/2005/05/11/top5.htm).

[

![Washington Times - cartoon on Pakistan.jpg](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/Washington%20Times%20-%20cartoon%20on%20Pakistan.jpg "Washington Times - cartoon on Pakistan.jpg")



](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/Washington%20Times%20-%20cartoon%20on%20Pakistan.jpg)

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Can the President set a precedent?

Original: https://www.spontaneousorder.in/p/can-the-president-set-a-precedent

Author: Spontaneous Order

Published: 2005-05-09T21:33:28.000Z

Topics: government-waste, fiscal-responsibility, presidential-residence, small-government

> Answer the following: What is one of the three largest residences on earth; costs the national exchequer over Rs 60 crores per annum (with a private school monthly school fees of Rs 800 per month, about 60,000 children can be schooled); one man is serve..

**Summary:**

Naveen Mandava critiques the Rashtrapati Bhavan, India's presidential residence, as an extravagant 360-acre, 340-room colonial legacy costing the public exchequer over Rs 60 crores annually—enough to fund private schooling at Rs 800 per month for about 60,000 children. It employs around 1,000 aides including 150 gardeners, 110 sweepers, 35 butlers, 18 cooks, 10 bakers, 16 drivers, five mechanics, 180 bodyguards, and 60 horses, plus 1,000 armed Delhi Police personnel. Monthly bills include Rs 31 lakh for electricity and Rs 2 lakh for water. From a classical-liberal viewpoint, Mandava questions the necessity of such opulence for a ceremonial figurehead presidency, noting President APJ Abdul Kalam has not even visited most rooms after three years. He finds no sound argument for its continuance and urges Kalam to slash costs, setting a precedent for governmental self-limitation—a classic conundrum in limiting state excess. This could define Kalam's legacy as a mission for fiscal restraint and smaller government.

**Key points:**

- Rashtrapati Bhavan costs over Rs 60 crores yearly, equivalent to schooling 60,000 children at Rs 800/month private fees.
- The residence staffs about 1,000 aides and 1,000 police, with high utility bills like Rs 31 lakh monthly electricity.
- Mandava argues no justification exists for maintaining this for a figurehead president who underuses it.
- President Kalam should cut costs to exemplify government self-limitation.

**By Naveen Mandava**

* * *

Answer the following:

What is one of the three largest residences on earth;

costs the national exchequer over Rs 60 crores per annum (with a private school monthly school fees of Rs 800 per month, about 60,000 children can be schooled);

one man is served by 150 gardeners, 110 sweepers, 35 butlers, 18 cooks, 10 bakers, 16 drivers, five mechanics, 180 bodygaurds and 60 horses – in total about 1000 aides for him;

1,000 armed Delhi Police personnel;

electricity bill of Rs 31 lakh per month and a water bill of Rs 2 lakh;

the list goes on…

Welcome to the 360 acre, 340 room Rashtrapati Bhavan, that monumental colonial legacy maintained through the public exchequer! Information is courtesy Tehelka.

Do we need this? Can not the post (anyways the post has become a figure head!) be less costly to maintain? Can not Mr Abdul Kalam Azad do something about it? Apparently he hasn’t visited most of the rooms even after three years! I have tried to rack my head to find one sound argument for their continuance but yet to find one. If there is one person who can do it, it is perhaps Mr Abdul Kalam Azad only himself who can set an example of the classic conundrum: how do you get a government to limit itself? Can this be his vision, mission and legacy?

[

![P-Residency.jpg](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/P-Residency-thumb.jpg "P-Residency.jpg")



](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/P-Residency.jpg)

  
The P-Residency!

Any way out? I offer a solution.

[More..](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/mt/archives/2005/05/can_the_preside.html#more)

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Update on Bureaucrat Density Index (BDI)

Original: https://www.spontaneousorder.in/p/update-on-bureaucrat-density-index-bdi

Author: Spontaneous Order

Published: 2005-05-09T21:32:48.000Z

Topics: bureaucracy, bureaucrat-density

> Interesting insights from Amit Varma’s India Uncut blog over here on the Bureaucrat Density Index of various countries… This is an interesting painting by one of my favourite painters Salvador Dali, moreso for his interesting life! It is called The Av

**Summary:**

This fragmentary post links to an archived 2005 Amit Varma blog entry on the Bureaucrat Density Index (BDI) comparing bureaucrat numbers across countries, shares a Salvador Dalí painting titled 'The Average Bureaucrat' (noting a worm in the head), and includes the author's bio; no original analysis or argument is provided.

**Key points:**

- References Amit Varma’s blog on bureaucrat density index for various countries.

**By Naveen Mandava**

* * *

Interesting insights from Amit Varma’s India Uncut blog over [here](http://web.archive.org/web/20050520233733/http://indiauncut.blogspot.com/2005/05/density-of-bureaucrats.html) on the Bureaucrat Density Index of various countries…

This is an interesting painting by one of my favourite painters Salvador Dali, moreso for his interesting life! It is called The Average Bureaucrat! Look out for the worm in his head…any other interpretations?

[

![p\_Dali\_AverageBureaucrat.jpg](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/p_Dali_AverageBureaucrat.jpg "p_Dali_AverageBureaucrat.jpg")



](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/p_Dali_AverageBureaucrat.jpg)

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## A bureaucrat for every 50 people in India!

Original: https://www.spontaneousorder.in/p/a-bureaucrat-for-every-50-people-in-india

Author: Spontaneous Order

Published: 2005-05-07T22:33:29.000Z

Topics: bureaucracy, government-expenditure, regulatory-panels

> I didn’t know of this! Apparently for a 1 billion strong country, we have a 20 million strong (Centre + states) bureaucracy. That is one and half times the population of Delhi. That makes it a Bureaucrat Density Index (BDI) of 1 for every 50 people in I

**Summary:**

Naveen Mandava highlights the staggering scale of India's bureaucracy, calculating a Bureaucrat Density Index (BDI) of one bureaucrat for every 50 people in a nation of 1 billion, with a total of 20 million bureaucrats across Centre and states—equivalent to one-and-a-half times Delhi's population. The central bureaucracy alone comprises 3,461,337 employees, costing Rs 38,656 crore annually, or a Per Capita Bureaucrat Expenditure (PCBE) of Rs 1,11,689. Mandava laments the unaccounted regulatory costs imposed by this apparatus. He critiques the proliferation of government panels and committees as emblematic of bureaucratic excess: 170 constituted between 1990 and 2002, over 50 under the UPA regime since May 2005, and 225 in the last 10 years, including six on unemployment. Sarcastic quotes portray committees as 'the best tool to move two groups from a static position to a solution' or 'the only instance of 100 days guaranteed employment,' underscoring a classical-liberal view of this as wasteful proliferation rather than effective governance, diverting resources from productive ends.

**Key points:**

- India employs 20 million bureaucrats (Centre + states) for its 1 billion population, yielding a BDI of 1 per 50 people.
- Central bureaucracy has 3,461,337 employees costing Rs 38,656 crore yearly, or Rs 1,11,689 per capita.
- Governments formed 170 panels from 1990-2002, over 50 since May 2005, and 225 in the last 10 years.
- Committees are derided as tools for guaranteed employment rather than problem-solving.

**By Naveen Mandava**

* * *

I didn’t know of this! Apparently for a 1 billion strong country, we have a 20 million strong (Centre + states) bureaucracy. That is one and half times the population of Delhi. That makes it a **Bureaucrat Density Index** (BDI) of 1 for every 50 people in India.

More news from the latest issue of India Today…

There is a bureaucracy of 34,61,337 employees just at the Centre that costs around Rs 38,656 crore annually to maintain. That makes it a **Per Capita Bureaucrat Expenditure** (PCBE) of Rs 1,11,689.

I wish I could factor in the Regulatory Costs imposed by them on us!

[

![burocrat.jpg](http://web.archive.org/web/20051228062635/http://blog.ccsindia.org/burocrat-thumb.jpg "burocrat.jpg")



](http://web.archive.org/web/20051228062635/http://blog.ccsindia.org/burocrat.jpg)

  
“Bureaucrat”, Soviet Poster, 1987

Other details from India Today…

Various governments between 1990 and 2002 constituted 170 panels.  
Since may 2005 the UPA regime has created over 50 panels.  
There have been 225 committees in the last 10 years.  
Six committees have studied the problems of unemployment.  
Realpolitik speak is this “Committes are the best tool to move two groups from a static position to a solution.”  
But I like this the best “The committees must be the only instance of 100 days guaranteed employment.”

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## I have a problem with the Constitution of India!

Original: https://www.spontaneousorder.in/p/i-have-a-problem-with-the-constitution-of-india

Author: Spontaneous Order

Published: 2005-05-07T21:34:47.000Z

Topics: indian-constitution, law-and-economics, institutional-reform

> Seems I am not alone. I have always wondered about the colonial legacy permeating our institutions. The guiding light of these institutions has been this – citizens are subjects to be controlled and not empowered! My debates with Makarand, my good frien

**Summary:**

Naveen Mandava critiques the Constitution of India as a colonial legacy that frames citizens as subjects to be controlled rather than empowered, permeating Indian institutions. He notes that debates on institutional problems often dead-end at the Constitution, advocating for professional design over mere 'good faith' reliance. Inspired by the Report of the National Commission to Review the Working of the Constitution, which yielded valuable insights, Mandava announces his pursuit of a Law and Economics interpretation of the document to foster better institutional frameworks. From a classical-liberal viewpoint, this endeavor seeks to realign institutions toward citizen empowerment. He invites collaboration, highlighting his background in policy analysis and education reform at organizations like Centre for Civil Society.

**Key points:**

- The Indian Constitution embodies a colonial mindset treating citizens as subjects for control rather than empowerment.
- Institutions require professional design beyond dependence on 'good faith' to function effectively.
- The Report of the National Commission to Review the Working of the Constitution provides key insights for reform.
- Mandava launches a Law and Economics analysis of the Constitution and seeks collaborators.

**By Naveen Mandava**

* * *

Seems I am not alone. I have always wondered about the colonial legacy permeating our institutions. The guiding light of these institutions has been this – citizens are subjects to be controlled and not empowered! My debates with Makarand, my good friend and colleague, about the institutional problems in India always reached a dead end with the Constitution of India. I think (and believe) that a great deal of professional design can be imparted to our institutions and not allow them to be functioned on the basis of “good faith” alone. My recent forays into the literature on the [REPORT OF THE NATIONAL COMMISSION TO REVIEW THE WORKING OF THE CONSTITUTION](http://web.archive.org/web/20050520233733/http://lawmin.nic.in/ncrwc/finalreport.htm) gave me some gems like the ones mentioned in the extended entry.

My endeavour of late is to do a Law and Economics interpretation of the Constitution of India! Anyone upto the task?

PS: I didn’t know this could be achieved!  

[

![Consti of India.jpg](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/Consti%20of%20India-thumb.jpg "Consti of India.jpg")



](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/Consti%20of%20India.jpg)

[More..](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/mt/archives/2005/05/i_have_a_proble.html#more)

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## India and Big Babu

Original: https://www.spontaneousorder.in/p/india-and-big-babu

Author: Spontaneous Order

Published: 2005-04-26T21:36:23.000Z

Topics: bureaucracy, corruption, government-monopolies, liberalization

> The picture of an Indian bureaucrat, taken by Dutch photographer Jan Banning of Laif Photos, that won the first prize in the portraits stories section of the World Press Photo of 2003. (Reuters) Courtesy: The Telegraph. Can a bureaucrat reform himself? ..

**Summary:**

Naveen Mandava argues that Indian bureaucrats cannot meaningfully reform themselves, as illustrated by Pratap Bhanu Mehta’s account and the author's own experience with the Administrative Reforms department, which tinkers with rules without addressing underlying frameworks. Bureaucratic incentives are perverse: departments depend on persistent problems like slums, uneducated children, and dilapidated roads to justify their budgets and paychecks. Mandava rejects the popular narrative that eliminating corruption alone would elevate India, claiming that even perfectly honest officers operating under the current system would worsen outcomes. Corruption, he posits, is merely a symptom of a poorly designed regulatory apparatus that fails to adapt to public needs, exacerbated by government-mandated monopolies in essentials like roads (sadak), electricity (bijli), and water (pani). These monopolies enable the rich to bribe their way around rules, while the poor suffer the full brunt of rigid regulations. From a classical-liberal viewpoint, the solution lies in liberalization to free citizens, especially the impoverished, from overbearing babus and rules.

**Key points:**

- Bureaucracies perpetuate problems like slums and poor infrastructure to sustain their budgets.
- Corruption stems from flawed regulations and government monopolies in roads, electricity, and water, not moral failings.
- Even honest bureaucrats would exacerbate India's issues under the current system design.
- The poor bear the heaviest burden of rigid rules, as the rich bypass them via bribes.
- True reform requires liberalization to dismantle bureaucratic controls.

**By Naveen Mandava**

* * *

[

![bureaucrat.jpg](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/bureaucrat-thumb.jpg "bureaucrat.jpg")



](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/bureaucrat.jpg)

The picture of an Indian bureaucrat, taken by Dutch photographer Jan Banning of Laif Photos, that won the first prize in the portraits stories section of the World Press Photo of 2003. (Reuters) Courtesy: The Telegraph.

Can a bureaucrat reform himself? For an enlightening account of this read Pratap Bhanu Mehta’s account over here at [Quite right, Sir Humphrey:  
The more bureaucracies reform themselves, the more they remain the same  
](http://web.archive.org/web/20050520233733/http://www.indianexpress.com/full_story.php?content_id=69041)

I came across the same issues in my short encounter with the Administrative Reforms department. The same blinkered approach to tinker with the rules but not the framework of rules. Dig in deep and you will find some bewildering incentives at work.

If there were no slums in Delhi, which department would lose its paycheck?  
If there were no children to be schooled, which department would lose its budget?  
If none of the roads needed repairs, which department would lose money?

Think about it!

We often hear this cry against corruption. That if corruption were removed, India would become a great nation. Sorry! I don’t buy that. If all the government officers in India were honest and never took bribes, India would have been worse off. And if the people (confused between law and morality), did not offer bribes, the state of affairs would have been much worse. Corruption is a symptom of a badly designed regulatory system. It is also a symptom that the law is failing to keep pace with the demands of the people. Dig deeper and you will find government mandated monopolies (sadak, bijli, pani etc) to be the major source of corruption. As usual, the rich can afford to bypass these laws by corrupting, but the poor cannot. It is they who bear the brunt of these rules. They need liberalization from babus and rules!

naveen@ccsindia.org

Read more: [https://spontaneousorder.in/bureaucracy-accountability/](https://spontaneousorder.in/bureaucracy-accountability/)

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Un-learning Education Provision

Original: https://www.spontaneousorder.in/p/un-learning-education-provision

Author: Spontaneous Order

Published: 2005-04-22T07:21:11.000Z

Topics: education-reform, school-choice, education-vouchers, deregulation

> The Business Standard editorial Educating India may hold good lessons for understanding the “what” and “how” of the much needed education reforms. The article tells us that one, educational institutions are the single largest advertisers in the pr

**Summary:**

Naveen Mandava argues for treating education as an economic activity subject to market laws, drawing from a Business Standard editorial highlighting schools as major print advertisers, rising household education spending, and poor quality. He advocates corporatization of institutions, active monitoring by government and private bodies with public data availability. In an ideal education market, individuals and corporates could open schools without licenses—currently barred as education is deemed non-profit—potentially listing education companies on Nasdaq. Government should redirect funds to student vouchers for chosen schools, limiting rules to funded institutions and eliminating profit bans, subsidized land, and licensing tied to government land control. Govt-funded schools face scrutiny from taxpayers. Release teacher certification from government monopoly, allow private training. Dismantle territorial monopolies of boards and universities; permit private alternatives with government providing grading info. For rural areas, build roads and issue vouchers to spur innovation. Scrap vernacular medium mandates, as elites choose English-medium private unaided schools, making denial criminal. Declare education a free enterprise to make India the Pacific's education hub, from a classical-liberal perspective critiquing state overreach.

**Key points:**

- Allow individuals and corporates to open educational institutions without licenses or non-profit restrictions.
- Redirect government education spending to vouchers for students to choose schools, eliminating broad mandates like profit bans.
- End territorial monopolies of boards and universities, enabling private alternatives with government grading and information provision.
- Scrap vernacular medium requirements and government control over teacher certification to promote English-medium private education.
- Build rural roads and distribute vouchers to foster private schooling and government school innovation.

**By Naveen Mandava**

* * *

[

![child.gif](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/child-thumb.gif "child.gif")



](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/child.gif)

The Business Standard editorial [Educating India](http://web.archive.org/web/20050520233733/http://www.business-standard.com/common/storypage.php?storyflag=y&leftnm=lmnu5&leftindx=5&lselect=1&chklogin=N&autono=186595) may hold good lessons for understanding the “what” and “how” of the much needed education reforms.

The article tells us that one, educational institutions are the single largest advertisers in the print media and two, households are spending more on education than before. The article then goes on to elaborate on the deplorable lack of quality in educational institutions. What is refreshing is the suggestion that “perhaps allow the corporatisation of educational institutes. Meanwhile, bodies that monitor standards, government and private, will have to get a lot more active than they are today, and that includes making available relevant data available to the public.”

Finally the opinion tide is turning towards understanding education as any other economic activity and not as a much-hallowed sector that can be kept distant from the laws of economics. When would our legal system understand this?

So what would an ideal education market look like?

[

![macoll.jpg](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/macoll-thumb.jpg "macoll.jpg")



](http://web.archive.org/web/20050520233733/http://blog.ccsindia.org/macoll.jpg)

Individuals/ corporates can open educational institutions without licence requirements. Observe that individuals cannot open schools as of now and corporates are not allowed for reasons of education being a non-profit sector. When would education companies in India get listed on the Nasdaq? Given our potential it is not too difficult.

The govt affects education in 2 ways. One, through deploying money and two, through enforcement of rules. The money deployed presently in running educational institutions can be routed to students who choose the best schools available. The govt will only frame rules where it provides money and not umbrella mandates like disallowing profit. Rules dictating the provision of land to educational institutions at subsidised rates can be done away with. The most disastrous licensing requirements for institutions arise from the control of land by govt bodies.

The institutions that “govt moneyed children” attend will be subject to scrutiny by both govt and non govt bodies. Today you cannot enter a govt school to inspect (without departmental permission) inspite of being a tax-payer!

Release teacher certification and training from the clutches of government stranglehold. Allow govt institutions to take privately trained/ certified teachers.

Boards and universities are territorial monopolies of education in India. A college in UP cannot affilite to Delhi University. Why? Why cannot there be private boards and universities? The govt’s role would be to provide information on the basis of grading. Period.

For rural provision of education, the govt can build roads. Even if they build at random they would benefit the poor! Now put educational vouchers in the hands of students and see how govt schools innovate and private schooling sector comes up in these rural areas.

Throw the vernacular medium requirements of schools to the winds. Take a sample of government teachers, education department babus and legislators in any one state and ask one simple question: which school does your child go to – govt/ pvt aided/ pvt unaided? My educated guess is that it will be pvt unaided for the simple reason of english language. Legislating a denial of english medium education to children is criminal in these times!

Much better declare education a free enterprise sector in India and watch India become THE education hub this side of the Pacific Ocean!

Read more : [https://spontaneousorder.in/set-the-delhi-schools-free/](https://spontaneousorder.in/set-the-delhi-schools-free/)

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Of Gated Crossings and Governance

Original: https://www.spontaneousorder.in/p/of-gated-crossings-and-governance

Author: Spontaneous Order

Published: 2005-04-02T07:17:12.000Z

Topics: public-infrastructure, governance, incentives-vs-command, public-policy

> I have had occasion to indulge in the same acts that you see in the photographs courtesy the Hindu. Earlier I would rebuke myself for “breaking the rule of law” and indulging in obscene acts like these. Even when there are subways present in the vicin

**Summary:**

Naveen Mandava critiques government-designed road infrastructure, such as gated crossings and distant subways near the Rajiv Gandhi Setu flyover in front of AIIMS hospital, which force pedestrians to climb fences or jump barriers despite available but inconvenient alternatives. He argues that when hundreds of citizens routinely violate such rules, it signals flawed policy-making that ignores human behavior, akin to overly rigid regulations in areas like informal rent agreements or passport processes. From a classical-liberal viewpoint, Mandava advocates designing institutions and rules around people's actual needs rather than imposing command-and-control measures that demean tax-paying citizens. He highlights how government departments opt for easy prohibitions, like gates and school campaigns enforcing boundaries, instead of incentive-compatible systems proven historically superior for sustainability. The post concludes by questioning whether governments or private agencies in competitive markets are better suited to create such people-centric, effective designs.

**Key points:**

- Poorly placed subways and gates at road crossings compel pedestrians to break rules for convenience.
- Public policies must account for how people actually behave rather than enforcing rigid, impractical rules.
- Institutions should prioritize incentive-compatible systems over command-and-control approaches for better results.
- Competitive private markets may outperform government in designing pedestrian-friendly infrastructure.

**By Naveen Mandava**

* * *

I have had occasion to indulge in the same acts that you see in the photographs courtesy the *Hindu*. Earlier I would rebuke myself for “breaking the rule of law” and indulging in obscene acts like these. Even when there are subways present in the vicinity. Midway a doubt crept in. If hundreds of citizens are doing this, then there must be something wrong with the way the situation has been approached. Dwell deeper into the lessons of government intervention and sound public policy-making. The results are before you. Let me strike the point with an example. If you have had the occasion to look at the magnificent 9 lane Rajiv Gandhi Setu/flyover in front of AIIMS hospital you will feel good about the design. But look closely. Imagine yourself as a pedestrian trying to cross the flyover from one end to another. And you will find that there are no convenient routes. The subways are too far. So if in the process of crossing this “obstacle” the pedestrian suffers and takes recourse to the convenience of jumping across, is he wrong? This permeates through an entire spectrum of public policies. Should I not do this (from informal rent agreements with your landlord to shortening the passport process requirements) because it is against the policy OR is the policy an ass because it does not take into account how people actually behave?  

[

![](http://web.archive.org/web/20050420005700/http://blog.ccsindia.org/On%20the%20Fence-thumb.jpg)



](http://web.archive.org/web/20050420005700/http://blog.ccsindia.org/On%20the%20Fence.html)[

![](http://web.archive.org/web/20050420005700/http://blog.ccsindia.org/Lady%20in%20Red-thumb.jpg)



](http://web.archive.org/web/20050420005700/http://blog.ccsindia.org/Lady%20in%20Red.html)[

![](http://web.archive.org/web/20050420005700/http://blog.ccsindia.org/Through%20the%20Gate-thumb.jpg)



](http://web.archive.org/web/20050420005700/http://blog.ccsindia.org/Through%20the%20Gate1.html)

I have come to the point where I feel convinced that institutions should take people into account and then design rules/ processes according to them. It is extremely demeaning for a tax-paying citizen of India to have to bend through a gate just to cross a road. All this on count of poor placing of road crossings, gates and subways. What is important is that the next time a gated road crossing is put up, look into the needs of people crossing the road by foot. The road is meant as much for us pedestrians as for cars. The government department making the crossing may find it easier to just put up a gate and disallow people (tax-payers) to cross it. It can even encourage misguided school children to go on demonstrating to pedestrians about walking within allotted boundaries. But the crux of the matter is poor homework on part of the institution manning it. It sought to resort to command and control rather than incentive compatible system. History shows that the latter have usually afforded better and sustainable results. The question is who is best suited to design incentive compatible systems – the government or a private agency in a competitive market?

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Austrian Environmentalism?

Original: https://www.spontaneousorder.in/p/austrian-environmentalism

Author: Spontaneous Order

Published: 2005-03-09T17:05:04.000Z

Topics: property-rights, austrian-economics, environmental-economics, community-stewardship

> CCS just completed Terracotta Summit 2005 with a release of Terracotta Redear book by Dr R K Pachauri (Chairman, IPCC) and detailed discussion on community stewardship of forest and fishery resources. Today my old Austrian friend Roy Cordato has offered..

**Summary:**

Parth Shah highlights the Centre for Civil Society's (CCS) Terracotta Summit 2005, which featured the release of the Terracotta Redear book by Dr. R.K. Pachauri, IPCC Chairman, and discussions on community stewardship of forest and fishery resources through property rights. He draws parallels with Roy Cordato's 'An Austrian Theory of Environmental Economics,' noting alignment in policy prescriptions emphasizing property rights, but a provocative difference in framing: environmental problems are not issues 'for or with the environment' but human problems of mutual plan formulation and goal achievement. Cordato argues, 'From an Austrian perspective, Robinson Crusoe cannot be a polluter,' underscoring that pollution requires interpersonal conflicts absent in solitary scenarios. Shah identifies three property rights types—individual, community, and collective (detailed in CCS's forests briefing paper)—and calls for applying Cordato's praxeological analysis to determine the appropriate type based on resource nature. This classical-liberal perspective challenges mainstream environmentalism by prioritizing human coordination via clear property rights over collective intervention, offering 'tremendous food for thought' for resource management.

**Key points:**

- CCS's Terracotta Summit 2005 promoted community stewardship of forests and fisheries via property rights, marked by the release of Terracotta Redear by IPCC Chairman Dr. R.K. Pachauri.
- Cordato's Austrian environmental economics defines problems as human coordination failures in plan formulation, not inherent environmental issues, exemplified by Robinson Crusoe not being a polluter.
- Property rights come in three forms—individual, community, and collective—suited to different resources.
- Apply Austrian praxeology to match property rights types to resource characteristics for effective stewardship.

**By Parth Shah**

* * *

CCS just completed [Terracotta Summit 2005](http://web.archive.org/web/20050324011250/http://www.ccsindia.org/terra.asp) with a release of Terracotta Redear book by Dr R K Pachauri (Chairman, IPCC) and detailed discussion on community stewardship of forest and fishery resources. Today my old Austrian friend Roy Cordato has offered [An Austrian Theory of Environmental Economics.](http://web.archive.org/web/20050324011250/http://blog.mises.org/blog/archives/003282.asp) Roy’s policy prescription is very similar to the Terracotta approach of property rights, his analysis of what constitutes ‘an environmental problem’ is rather different and challenging.

“Environmental problems are not really problems for or with the environment, but human problems of mutual plan formulation and the achievement of goals. From an Austrian perspective, Robinson Crusoe cannot be a polluter.” Yes, read again!

The property rights could be of three types: individual, community, and collective (details in the Briefing Paper [here](http://web.archive.org/web/20050324011250/http://www.ccsindia.org/forests_briefing_paper.pdf)). It would be very pertinent to apply Roy’s analysis to the three types of property rights to see whether and how the nature of the resource suggests praxeologically appropriate type of property right. Tremendous food for thought, Roy!

Read more about environmental problems: [https://spontaneousorder.in/an-alternative-7-point-agenda-for-combating-delhi-air-pollution/](https://spontaneousorder.in/an-alternative-7-point-agenda-for-combating-delhi-air-pollution/)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## RTI: Preachers and Practioners?

Original: https://www.spontaneousorder.in/p/rti-preachers-and-practioners

Author: Spontaneous Order

Published: 2005-03-02T16:28:26.000Z

Topics: right-to-information, government-transparency, accountability, knowledge-imperialism

> In the CCS critique of the proposed Right to Information Bill, one suggestion is to expand the scope of information accessible under the Bill. Many studies of international agencies contracted by Indian governments on Indian policy issues are not availa..

**Summary:**

In a critique of India's proposed Right to Information (RTI) Bill, the Centre for Civil Society (CCS) advocates expanding its scope to include reports, advisories, and documents produced by consultants hired by public authorities, directly or indirectly through multilateral, bilateral agencies, international organizations, NGOs, or charitable associations. A key example is the World Bank study on the Delhi Jal Board, commissioned by the Delhi government and reportedly recommending privatization, yet inaccessible under the Delhi RTI Act and not public. CCS proposes inserting specific language into Section 1(d) of the central Bill: 'The public access should also be to the reports, advisories, or documents produced by consultants hired by the public authority directly or indirectly through multilateral or bilateral governmental agencies or financed directly or indirectly through international agencies or NGOs, or charitable associations.' Parth Shah notes that similar RTI acts in Western democracies lack this provision, observing that the World Bank does not conduct studies on US government policies, framing it as potential 'knowledge imperialism.' This classical-liberal push emphasizes greater transparency and accountability to counter opaque influences on Indian policy from external actors.

**Key points:**

- CCS critiques the RTI Bill for excluding consultant reports and proposes adding a clause to mandate public access to such documents from all funding sources.
- Delhi government's World Bank study on Jal Board, suggesting privatization, exemplifies reports hidden from public scrutiny under current RTI laws.
- Western RTI acts do not require disclosure of international consultant studies, unlike CCS's recommendation for India.
- The World Bank avoids studying US policies, highlighting asymmetric 'knowledge imperialism' in policy advice to developing nations.

**By Parth Shah**

* * *

In the CCS [critique](http://web.archive.org/web/20050306040348/http://www.ccsindia.org/policy/gov/index.html#camp) of the proposed Right to Information Bill, one suggestion is to expand the scope of information accessible under the Bill. Many studies of international agencies contracted by Indian governments on Indian policy issues are not available to the public. A recent example is of the World Bank study of the Delhi Jal Board, which seems to have suggested privatisation of the agency, as per media stories. Delhi government had commissioned the study but it is outside the perview of the Delhi Right to Information Act.

So we suggested the following change in the proposed central government Bill: “The public access should also be to the reports, advisories, or documents produced by consultants hired by the public authority directly or indirectly through multilateral or bilateral governmental agencies or financed directly or indirectly through international agencies or NGOs, or charitable associations. Please include the above line in Section 1, sub section (d).”

My quick reading of similar acts in many of the western democracies indicates that even they do not have a similar requirement. The Bank of course doesn’t do any studies on US government policies. Knowledge imperialism?!

Read more abut Right to Information: [https://spontaneousorder.in/make-rti-a-reality-let-the-government-publish-information-rather-than-merely-furnish-it/](https://spontaneousorder.in/make-rti-a-reality-let-the-government-publish-information-rather-than-merely-furnish-it/)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Union Budget 2005: Savvy Strategy of Divide and Rule

Original: https://www.spontaneousorder.in/p/union-budget-2005-savvy-strategy-of-divide-and-rule-2

Author: Spontaneous Order

Published: 2005-02-28T17:08:53.000Z

Topics: union-budget, apmc-reform, school-choice, education-vouchers

> Many are disappointed and have given average rating to Chidambaram’s 2005 budget. They feel that a large number of important issues have been left unanswered and those that are addressed hardly go beyond the conventional wisdom. Sensible but not sexy! I

**Summary:**

Parth Shah views Chidambaram’s 2005 Union Budget as a masterful 'divide and rule' strategy for long-term success, earning it a 10/10 rating despite short-term disappointments over unanswered issues. By deferring controversial reforms and spotlighting a few targeted ones, the budget dilutes opposition that might arise from tackling everything at once, breaking the entrenched habit of annual February policy fixation. Shah highlights two overlooked but high-potential classical-liberal reforms: revising Agriculture Produce Marketing Acts (APMC) to allow private players in wholesale/mandi markets, fostering competition; and a scholarship scheme for SC/ST students that channels funds directly to students for school choice—superior to funding government schools—instead of institutions. He laments the lack of 'education vouchers' phrasing (as with prior food stamps) but praises funding students over schools to promote choice and accountability. These changes, Shah argues, hold greater reform promise than hyped announcements.

**Key points:**

- Chidambaram dilutes opposition by deferring major issues and focusing on select reforms in the 2005 budget.
- Revise APMC to permit private players in agricultural wholesale/mandi markets for competition.
- Introduce SC/ST scholarships that fund students directly for school choice, akin to vouchers, rather than schools.
- Funding students outperforms funding institutions to enhance choice and accountability.
- Break the once-a-year February policy deliberation habit.

**By Parth Shah**

* * *

Many are disappointed and have given average rating to Chidambaram’s 2005 budget. They feel that a large number of important issues have been left unanswered and those that are addressed hardly go beyond the conventional wisdom. Sensible but not sexy!

In my view the short-term disappointment is the grand strategy of long-term success: By keeping many of the critical issues out of the budget, Chidambaram has diluted potential opposition to the few good ideas he had included in the budget. He rightly flagged those policy issues and said that they will be presented later on. It is a savvy strategy of divide and rule—divide the controversial issues instead taking them all up in one go and thereby divide the opposition. On this strategy, and I hope it is a strategy, I give him 10 out of 10. It is about time that we broke this habit of thinking about policies issues once a year in February.

Two suggestions that I particularly liked in the budget are the revision of Agriculture Produce Marketing Acts to allow private players in the wholesale/mandi markets and the scholarship scheme for SC/STs, where instead of giving more money to government schools, the money would go directly to students who would have a choice of schools, just like the upper classes. Funding students is far better than funding schools. I do wish that the Finance Minister had used the phrase education vouchers instead of scholarships, just the way he introduced the idea of food stamps in the last budget. These two reforms have not received much attention so far but I think they have far greater potential for real improvement than many that have been much talked about.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## ITQ to rescue tsunami fisherfolk

Original: https://www.spontaneousorder.in/p/itq-to-rescue-tsunami-fisherfolk

Author: Spontaneous Order

Published: 2005-02-22T16:34:37.000Z

Topics: overfishing, individual-tradable-quotas, property-rights, tragedy-of-commons

> The most severe impact of tsunami in India has been on families dependent on fishing. The massive relief and rehabilitation efforts meet the immediate needs of the affected people. They do not address the basic problem of the fishing industry—overfishin

**Summary:**

Tsunami relief in India addresses immediate needs of fisherfolk but fails to tackle overfishing, the core threat to their livelihoods, stemming from fish as a public resource with free access but no maintenance incentives—fishermen catch small fish fearing others won't spare them, depleting populations. Traditional regulations, such as limiting seasons to four months, mandating large nets, restricting boats and motors, or banning trawlers, prove unenforceable along thousands of kilometers of coastline, fostering corruption and harassment without curbing depletion. The classical-liberal solution: empower fishing communities with legally enforceable Individual Tradable Quotas (ITQ), assigning each family a specific catch quota from defined areas. ITQ has succeeded spectacularly in Iceland, New Zealand, Australia, Norway, Finland, and parts of Italy, Spain, UK, and USA by aligning incentives for sustainability. Post-tsunami, India should implement ITQ to secure fisherfolk livelihoods through property rights rather than regulatory mazes.

**Key points:**

- Overfishing arises from open-access public resources, where no one has incentive to preserve fish stocks.
- Regulatory fixes like four-month seasons and boat restrictions fail due to enforcement challenges on long coastlines, leading to corruption.
- ITQ grants families tradable, enforceable catch quotas, successfully rebuilding fisheries in Iceland, New Zealand, Australia, and others.
- India should adopt ITQ for tsunami-affected fisherfolk to achieve sustainable livelihoods via property rights.

**By Parth Shah**

* * *

The most severe impact of tsunami in India has been on families dependent on fishing. The massive relief and rehabilitation efforts meet the immediate needs of the affected people. They do not address the basic problem of the fishing industry—overfishing. Unless we resolve this basic problem, a sustainable solution for the livelihood of fisher families would not be feasible.

Overfishing occurs because the fish or fish habitat (water) is a public resource. Anyone can use it—free access—but none has any incentive to maintain fish populations. When a fisherman catches a small fish, he does not throw it back into water for it to grow, because if he does, there is no guarantee that the next person who catches it will throw it back too. He therefore keeps the small fish; so does everyone else. And fish populations decline. We have to change this behaviour to protect the fish and the people dependent on fishing.

The common approach to address this problem of overfishing has been to limit the fishing season (sometimes to only 4 months a year), require large net size so that small fish can escape, allow only small boats or vessels with small motors in the water, ban trawlers or ‘commercial fishing.’ This maze of regulations is quite difficult to enforce along a coastline of several thousand kilometres. The result has been more corruption and harassment without any significant impact on fish depletion.

A relatively new approach is to let fishing communities manage fish populations and grant them fishing rights that are properly defined and legally enforceable. Each family is given a legal quota that permits the family to catch exactly that much fish from the area. The quota is generally referred to as Individual Tradable Quota (ITQ). The ITQ system has been implemented in Iceland, New Zealand, Australia, Norway, Finland, and parts of Italy, Spain, UK and USA. It has been overwhelmingly successful in each case.

We should take this opportunity to solve the livelihood problem of fisherfolks on a sustainable basis through ITQ. More on ITQ [here](http://web.archive.org/web/20050306040348/http://perc.org/publications/books/marine_fisheries.php) and [here](http://web.archive.org/web/20050306040348/http://www.cato.org/pubs/regulation/reg20n3f.html).

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Birthdays and movies

Original: https://www.spontaneousorder.in/p/birthdays-and-movies

Author: Spontaneous Order

Published: 2005-02-21T15:26:29.000Z

Topics: individualism, personal-reflection

> It has been difficult to keep up with the blog writing with other porject deadlines and travels for family emergencies. One begins to admire more and more those who are able to blog daily. Well, on my birthday, I am trying to get back in the groove. I h..

**Summary:**

This short personal post by Parth Shah reflects on resuming blogging on his birthday amid project deadlines and family travels, admiring daily bloggers. He shares that his birthday excitement depends entirely on others—if they are excited, he is too, and he enjoyed this one; alone, he wouldn't care. As a philosophical individualist, he feels odd about this social dependence, paralleling his aversion to watching movies or plays alone. The post muses that such reflections suit birthdays, without delving into policy. No specific facts, numbers, or classical-liberal policy arguments are presented.

**Key points:**

- Author's birthday excitement relies on others' enthusiasm, contrasting his philosophical individualism.
- He avoids solo movie or play experiences, highlighting social dependence.
- Post serves as light birthday musing amid blogging hiatus.

**By Parth Shah**

* * *

It has been difficult to keep up with the blog writing with other porject deadlines and travels for family emergencies. One begins to admire more and more those who are able to blog daily. Well, on my birthday, I am trying to get back in the groove. I have found all through these years that my excitement about my birthday is completely dependent on others. If they are excited, then I am too. And I do genuinely enjoy their and thereby my excitement. But left alone, I wouldn’t give a second thought about the birthday. If you are curious, i excitedly enjoyed this one.

As a philosophical individualist, i feel rather odd about this dependence on others. But then i do not enjoy watching a movie or paly by myself. If i have to go alone, i rather not, no matter how interesting the performance. So what’s my post? Aren’t these the things one is supposed to muse about on the birthday?!

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## SC order on Chattisagarh Private Sector Universities (Establishment and Regulation) Act, 2002

Original: https://www.spontaneousorder.in/p/sc-order-on-chattisagarh-private-sector-universities-establishment-and-regulation-act-2002

Author: Spontaneous Order

Published: 2005-02-13T07:08:40.000Z

Topics: higher-education, private-universities, judicial-overreach

> Way back in my childhood when I was an ardent student of science and an avid fan of Turning Point, a popular science program, Prof Yashpal Sharma caught my fancy for his flowing white hair and guru-like wisdom spouted eloquently. I have since unrevered ..

**Summary:**

Naveen Mandava criticizes Prof Yashpal Sharma, once an admired figure, for filing a PIL that prompted the Supreme Court to strike down the Chhattisgarh Private Sector Universities (Establishment and Regulation) Act, 2002, resulting in over 12,000 students becoming victims across about 100 private universities in 30 cities. From a classical-liberal viewpoint, this exemplifies the dangerous influence wielded by good-intentioned individuals in high places, as noted by Parth Shah, leading to regulatory overreach that harms private education initiatives. Mandava urges readers to examine the SC order's sections closely, highlighting how such judicial interventions disrupt market-driven higher education and student opportunities, underscoring the need to protect private sector freedoms from activist litigation.

**Key points:**

- A single PIL by Prof Yashpal Sharma led the Supreme Court to invalidate Chhattisgarh's private universities act, affecting 100 institutions and 12,000 students.
- This case illustrates the perils of well-meaning influencers in positions of power undermining private education.
- Judicial overreach via PILs exemplifies how good intentions can cause widespread harm to students and market freedoms.

**By Naveen Mandava**

* * *

Way back in my childhood when I was an ardent student of science and an avid fan of Turning Point, a popular science program, Prof Yashpal Sharma caught my fancy for his flowing white hair and guru-like wisdom spouted eloquently. I have since unrevered many intellectual idols from then on. Prof Yashpal Sharma is the latest on the list. But I have got to give it to him for the influence that he wields.

One PIL. And you have victims of more than 12,000 students in about 100 private varsities from 30 odd cities.  Read more about it [here](http://web.archive.org/web/20050306040348/http://in.rediff.com/news/2005/feb/11sc.htm) in Rediff and [here](http://web.archive.org/web/20050306040348/http://www.hindustantimes.com/news/5922_1239126,0015002100000000.htm) in Hindustan Times.

Parth always spoke about the dangerous influence that good intentioned people in high places posses and this is an illuminating example.

Read carefully the following sections for they will help make up your mind on this issue.

[More..](http://web.archive.org/web/20050306040348/http://blog.ccsindia.org/mt/archives/2005/02/sc_order_on_cha.html#more)

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## The marvel of spontaneous order

Original: https://www.spontaneousorder.in/p/the-marvel-of-spontaneous-order

Author: Spontaneous Order

Published: 2005-02-12T16:36:27.000Z

Topics: spontaneous-order, free-exchange, division-of-labor, classical-liberalism

> Thanks to Russell Roberts, I’ve two quotes that capture the marvel of spontaneous order, the name of this blog; one of Parisians sleeping peacefully at night and the other of day-labourer’s woollen coat: “On coming to Paris for a visit, I said to my

**Summary:**

Parth Shah's post 'The marvel of spontaneous order' highlights the classical-liberal concept of spontaneous order through two seminal quotes. Frédéric Bastiat marvels at a million Parisians sleeping peacefully at night, confident that free exchange will deliver tomorrow's vast array of supplies—food, goods, and services—preventing famine or chaos, attributing this regularity to the 'absolute principle of free exchange.' Adam Smith details the woollen coat of a humble day-labourer in a thriving country, produced by the joint labour of innumerable workers: shepherds, sorters, combers, dyers, spinners, weavers, fullers, dressers, plus merchants and carriers transporting materials across distances. These examples illustrate how decentralized individual actions, driven by market exchange and specialization, create complex, life-sustaining coordination without central direction. The post, named after this idea, links to an exploration of food and spontaneous order, underscoring the Centre for Civil Society's advocacy for economic freedom and choice.

**Key points:**

- Free exchange acts as an invisible principle ensuring the daily flow of essential supplies to millions in cities like Paris.
- A simple woollen coat worn by a day-labourer embodies the vast division of labour involving shepherds, artisans, merchants, and carriers.
- Spontaneous order emerges from decentralized individual actions, coordinating complex production without central planning.

**By Parth Shah**

* * *

Thanks to [Russell Roberts](http://web.archive.org/web/20050306040348/http://www.econlib.org/library/Columns/y2005/Robertsmarvel.html), I’ve two quotes that capture the marvel of spontaneous order, the name of this blog; one of Parisians sleeping peacefully at night and the other of day-labourer’s woollen coat:

“On coming to Paris for a visit, I said to myself: Here are a million human beings who would all die in a few days if supplies of all sorts did not flow into this great metropolis. It staggers the imagination to try to comprehend the vast multiplicity of objects that must pass through its gates tomorrow, if its inhabitants are to be preserved from the horrors of famine, insurrection, and pillage. And yet all are sleeping peacefully at this moment, without being disturbed for a single instant by the idea of so frightful a prospect… What, then, is the resourceful and secret power that governs the amazing regularity of such complicated movements, a regularity in which everyone has such implicit faith, although his prosperity and his very life depend upon it? That power is an absolute principle, the principle of free exchange.” (Bastiat, Chapter 18 of Economic Sophisms)

“Observe the accommodation of the most common artificer or day-labourer in a civilized and thriving country, and you will perceive that the number of people of whose industry a part, though but a small part, has been employed in procuring him this accommodation, exceeds all computation. The woollen coat, for example, which covers the day-labourer, as coarse and rough as it may appear, is the produce of the joint labour of a great multitude of workmen. The shepherd, the sorter of the wool, the wool-comber or carder, the dyer, the scribbler, the spinner, the weaver, the fuller, the dresser, with many others, must all join their different arts in order to complete even this homely production. How many merchants and carriers, besides, must have been employed in transporting the materials from some of those workmen to others who often live in a very distant part of the country! (Adam Smith, WoN, Book 1, Chapter 1)

[Read More: Food and Spontaneous Order](https://spontaneousorder.in/food-and-spontaneous-order/)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Tragedy of good intentions and insinuations

Original: https://www.spontaneousorder.in/p/tragedy-of-good-intentions-and-insinuations

Author: Spontaneous Order

Published: 2005-02-11T16:43:17.000Z

Topics: pharmaceuticals, drug-safety, intellectual-property, tort-reform

> In How Safe are Anti-retroviral Drugs? Thompson Ayodele makes a telling point that several HIV drugs from the WHO’s ‘pre-qualified’ list have turned out to be substandard and are now being withdrawn by the companies, almost all of which are Indian.

**Summary:**

Parth Shah critiques Thompson Ayodele's article on substandard HIV anti-retroviral (ARV) drugs from WHO's pre-qualified list, mostly produced by Indian companies and now withdrawn. While acknowledging the issue, Shah defends WHO against sole blame, arguing that companies bear primary liability for selling substandard products, and tort law reforms are needed in Africa and Asia to enforce accountability. He notes WHO's pre-qualification includes explicit warnings, invoking caveat emptor akin to private marketers like Pfizer, limiting WHO's liability to damages from negligence. Shah challenges the article's insinuation that Indian generics violate Western pharma IPRs as the core problem, asserting substandard drugs harm HIV patients regardless of patent status—even patented drugs could be substandard. He questions whether the article truly prioritizes African patients' lives or defends the IPR regime, highlighting that good intentions in generics access falter without quality enforcement. From a classical-liberal lens, Shah emphasizes individual liability, legal remedies, and buyer responsibility over regulatory finger-pointing or patent protectionism.

**Key points:**

- Companies selling substandard ARV drugs must face liability through effective tort laws in Africa and Asia.
- WHO's pre-qualification carries warnings, so caveat emptor applies, limiting its responsibility like any private endorser.
- Substandard drugs undermine HIV treatment regardless of IPR violations; even patented drugs could be faulty.
- Reform tort laws to hold producers accountable rather than scapegoating WHO or generics.
- The article's focus seems more on protecting IPR than safeguarding African HIV patients.

**By Parth Shah**

* * *

In [How Safe are Anti-retroviral Drugs?](http://web.archive.org/web/20050306040348/http://www.thisdayonline.com/nview.php?id=9024) Thompson Ayodele makes a telling point that several HIV drugs from the WHO’s ‘pre-qualified’ list have turned out to be substandard and are now being withdrawn by the companies, almost all of which are Indian. I am no votary of WHO, but blaming it all on WHO seems hardly justified. Well, yes, I too never thought that i would come to the defense of WHO!

First, if the companies are selling substandard drugns then they should be liable, and if the tort laws are not working well in Africa, as in Asia, then the necessary reform lies there. Second, WHO’s ‘pre-qualification’ comes with a huge warning (discussed in the article itself). Shouldn’t the caveat emptor apply to WHO’s ‘marketing’ as it applies to say Pfizer’s marketing? The liability of WHO, like any private endorser/marketer, is to the extent of the damages caused by its products. But the article doesn’t once mention tort, negligence or liability. It insinuates that the sole cause is Indian companies violating IPR of the western pharmas. Though it seems unlikely that our judgement of the issue be different if these drungs were not under patent. That is, even if they were really generics, the sale of substandard drungs would have the same consequences for HIV patient-users. Of course the effect would not be the same for the patent holding pharma companies. The patent holding companies could also sell substandard patented drugs. Just because they know the right formulation does not automatically guarantee that they actually sell genuine drugs. What then is the main concern of the article–African HIV patients or the IPR regime?

“In the fight against AIDS, there is an increasing variety of drugs available to help relieve the symptoms for unlucky sufferers. Properly administered and manufactured, anti-retroviral (ARVs) drugs can help the victims of AIDS live longer and more useful lives. However, the widespread use in Africa of poor quality generic copies of these drugs is threatening to undermine their clinical effectiveness, bringing with them the possibility of new, drug-resistant strains of HIV.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## MNC kappi

Original: https://www.spontaneousorder.in/p/mnc-kappi

Author: Spontaneous Order

Published: 2005-02-03T02:01:14.000Z

Topics: jnu, anti-mnc, economic-fallacies, campus-politics

> Sometime back, I wrote in my personal blog, memoirs of a night we spend in the JNU campus after being banished from the civilised world outside. A good part of the time we spend there, we were at the Nescafe outlet in the campus. For the simple reason t..

**Summary:**

JNU students, from one of India's finest humanities institutions, voted to ban the Nescafe outlet—a 'multinational giant'—from campus, exemplifying classic communist tradition where propaganda triumphs over reason and logic. The author recalls enjoying its seating during a past visit, but now visitors must settle for rocks near Ganga Dhaba. Opposition intensified after Mona Das, a student union presidential candidate pledging to ban the outlet, won elections last November; she fulfilled her promise when a majority approved closure at last week's general body meeting, with the café awaiting shutdown orders. The franchise owner, Naveen Sabharwal, invested over five lakh rupees. Spontaneous Order examines this episode academically for its economic fallacies, planning interviews with Sabharwal, union president Mona Das, and general secretary Mubil Ehmer to unpack the story from a classical-liberal viewpoint critiquing anti-multinational fervor.

**Key points:**

- JNU students voted to ban the Nescafe outlet following a campaign promise by winning presidential candidate Mona Das.
- The franchise owner invested over five lakh rupees in the campus kiosk.
- Spontaneous Order highlights economic fallacies in the episode and plans interviews with key figures including the owner, union president, and general secretary.
- The ban reflects propaganda overriding reason in communist tradition, per the author's classical-liberal framing.

**By Sruthijith**

* * *

Sometime back, I wrote in my personal blog, [memoirs](http://web.archive.org/web/20050204214128/http://sruthijith.blog-city.com/read/661637.htm) of a night we spend in the JNU campus after being banished from the civilised world outside. A good part of the time we spend there, we were at the Nescafe outlet in the campus. For the simple reason that it had good seating. Next time we are there however, we’ll have to park our bottoms on the rocks near Ganga Dhaba. Students of [JNU](http://web.archive.org/web/20050204214128/http://www.jnu.ac.in/), considered one of the finest institutions for studying humanities in the country, voted to banish the “multinational giant” from the campus. In classic communist tradition, Yet again propaganda wins over reason and logic.

Though the outlet had faced opposition from a section of students in the past, the opposition took the form of a movement after Mona Das, a presidential candidate for the student union, whose key election promise was the banishing of the outlet, won in the elections held last November. Since then, Ms Das has done everything possible to keep her promise, and to her credit, majority of the students voted for closing down the outlet in the student union general body meeting conducted last week. Subsequently, the café is waiting for orders to reach them to down its shutters.

Spontaneous Order’s interest in the story is purely academic. The whole episode is replete with economic fallacies. We speak to the main characters of the entire episode in a series that will unfold the story. Tomorrow, interviews with Naveen Sabharwal (franchise of nestle who invested in the kiosk in the campus- over five lakh rupees), student’s union president Mona Das and Gen Secy Mubil Ehmer.

Read more : [https://spontaneousorder.in/chai-pani-aur-globalisation/](https://spontaneousorder.in/chai-pani-aur-globalisation/)

* * *

**About Sruthijith**

## Whose money is it anyway?

Original: https://www.spontaneousorder.in/p/whose-money-is-it-anyway-2

Author: Spontaneous Order

Published: 2005-01-30T07:14:19.000Z

Topics: government-waste, taxpayer-money, markets-vs-government

> There is one big difference between how the government functions and how markets function. While the government spends our money on projects that don’t always have a direct benefit for its people, markets spend money creating products that are of utilit

**Summary:**

The post contrasts government spending with market dynamics, arguing that governments squander public money on projects without direct benefits to citizens, unlike markets which allocate resources to create consumer-valued products. A prime example is Delhi's half-built National Police Memorial, where crores of taxpayer rupees were spent despite inadequate planning, leading to a lawsuit that will raze the structure. The author, from a classical-liberal viewpoint, attributes this waste to bureaucrats' indifference: they spend 'somebody else’s (the public) money,' obviating the need for rigorous homework or accountability seen in private enterprise. This inefficiency exemplifies why public projects often fail to deliver utility, reinforcing the case for market-oriented resource allocation over state-led initiatives that prioritize spending over outcomes. The critique emphasizes fiscal prudence and the principal-agent problem in government, where officials lack skin in the game.

**Key points:**

- Governments spend taxpayers' money on unbeneficial projects, unlike markets that focus on consumer utility.
- Delhi's National Police Memorial wasted crores and faces demolition due to a lawsuit from poor planning.
- Bureaucrats neglect due diligence because they use public funds, not their own.

**By Renu Pokharna**

* * *

There is one big difference between how the government functions and how markets function. While the government spends our money on projects that don’t always have a direct benefit for its people, markets spend money creating products that are of utility to its consumers. Take the half-built police memorial in Delhi, for example. Crores were spent on it, and now a lawsuit is going to raze it to the ground. Obviously, the government machinery responsible did not think it was important to do the homework before going ahead with the construction process. And the reason is very simple: why should they care so much about using somebody else’s (the public) money on something? Click [here](http://news.webindia123.com/news/showdetails.asp?id=232090&cat=India) to read the full article.

* * *

**About Renu Pokharna**

## Robert Heilbroner: “Mises was right!”

Original: https://www.spontaneousorder.in/p/robert-heilbroner-mises-was-right

Author: Spontaneous Order

Published: 2005-01-22T15:23:36.000Z

Topics: socialist-calculation-debate, capitalism-success, socialism-failure, economic-history

> I learned a lot of economic history, well atleast one side of the history, from The Worldly Philosophers. Its author Robert Heilbroner passed away early this month. He was one socialist who had the courage to publicly amdit the failure of socialism afte..

**Summary:**

Parth Shah pays tribute to Robert Heilbroner, author of *The Worldly Philosophers*, who died early in the month and had the courage as a socialist to admit socialism's failure after the Berlin Wall's collapse, famously declaring 'Mises was right' in the socialist calculation debate. Shah highlights Heilbroner's acknowledgment of capitalism's unmistakable success compared to socialism's failure, crediting economists like Milton Friedman, Friedrich Hayek, and Ludwig von Mises for presciently arguing that capitalism would flourish as the natural system of free people, achieving superior material growth when left to its own devices. Heilbroner drew a discomforting generalization from his observations: the farther to the right one's views, the more accurate the historical foresight, while the left proved less prescient. This underscores the classical-liberal vindication of market-oriented thinkers over socialist visions, as noted in David Boaz's piece on Heilbroner. Shah, founder of the Centre for Civil Society, uses this to affirm the enduring insights of economic freedom advocates.

**Key points:**

- Heilbroner admitted 'Mises was right' about the impossibility of socialist calculation after the Berlin Wall fell.
- Capitalism succeeded markedly while socialism failed, validating predictions by Friedman, Hayek, and Mises.
- These thinkers viewed capitalism as the natural system for free people, best at material growth when unregulated.
- Historical foresight improves the further right one's economic views, per Heilbroner's generalization.

**By Parth Shah**

* * *

I learned a lot of economic history, well atleast one side of the history, from *The Worldly Philosophers*. Its author Robert Heilbroner passed away early this month. He was one socialist who had the courage to publicly amdit the failure of socialism after the collapse of the Wall. He famously said, “Mises was right” (about the socialist calculation debate). David Boaz has written a nice piece on him [here](http://web.archive.org/web/20050123180557/http://www.reason.com/hod/db012105.shtml). A short quote of Heilbroner; peace be upon him:

Capitalism has been as unmistakable a success as socialism has been a failure. Here is the part that’s hard to swallow. It has been the Friedmans, Hayeks, and von Miseses who have maintained that capitalism would flourish and that socialism would develop incurable ailments. All three have regarded capitalism as the ‘natural’ system of free men; all have maintained that left to its own devices capitalism would achieve material growth more successfully than any other system. From \[my samplings\] I draw the following discomforting generalization: The farther to the right one looks, the more prescient has been the historical foresight; the farther to the left, the less so

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Arnie, the politician: Hitting all the right notes!

Original: https://www.spontaneousorder.in/p/arnie-the-politician-hitting-all-the-right-notes

Author: Spontaneous Order

Published: 2005-01-10T15:29:14.000Z

Topics: fiscal-responsibility, public-debt, voter-initiatives, government-spending

> GOVERNOR SCHWARZENEGGER’S STATE OF THE STATE ADDRESS Wednesday, 01/05/2005 05:00 pm …In these State of the State speeches, governors often begin by listing their accomplishments of the past year. I will do the same. The year before I took office as go

**Summary:**

Parth Shah shares an excerpt from Arnold Schwarzenegger's 2005 State of the State address, portraying the governor as a decisive leader who rescued California from fiscal collapse. Schwarzenegger opens with humor, joking about increasing sunshine days from 300 to 312 under his watch, before addressing the $22 billion inherited debt threatening the world's sixth-largest economy. His administration slowed spending growth, renegotiated contracts, and secured over $1 billion in federal support, averting a 'financial black hole.' Crucially, Schwarzenegger credits Californians, not politicians, for passing Proposition 57—authorizing bonds to stabilize finances—and Proposition 58, which constitutionally bans borrowing to cover future deficits. This classical-liberal framing emphasizes voter empowerment through direct democracy, fiscal restraint, and accountability over unchecked government expansion, positioning Schwarzenegger's actions as 'true leadership' in restoring California's economic dream.

**Key points:**

- California inherited $22 billion in debt, facing economic ruin before Schwarzenegger's interventions.
- The administration slowed spending growth, renegotiated contracts, and obtained over $1 billion in federal aid to stabilize finances.
- Voters passed Prop 57 to issue bonds preventing state collapse and Prop 58 to prohibit borrowing for future deficits.
- Schwarzenegger praises Californians as the true rescuers, highlighting public choice over political elite.

**By Parth Shah**

* * *

GOVERNOR SCHWARZENEGGER’S STATE OF THE STATE ADDRESS

Wednesday, 01/05/2005 05:00 pm

…In these State of the State speeches, governors often begin by listing their accomplishments of the past year. I will do the same.

The year before I took office as governor, California had 300 days of sunshine. Last year, under my administration, we had 312 days of sunshine. That’s what true leadership is all about.

In all seriousness, this last year we faced some dark days. The shadow of 22 billion dollars in inherited debt loomed over us. The great state of California, the sixth largest economy in the world, the symbol of the American dream, faced economic ruin.

The most important thing we did last year–we grabbed California by the collar just before it slipped into a financial black hole. We slowed the growth in spending, renegotiated contracts, secured more than a billion dollars in new federal financial support. We should feel good about what we accomplished together.

Yet the greatest rescuers of the state are not those of us in this room, but the people of California. They are the ones who passed Prop 57, which issued the bonds to prevent the state’s collapse. They are the ones who passed Prop 58, which prevents the state from borrowing money to cover future deficits. I want to thank my fellow Californians for their confidence that together we can turn this government and its finances around

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Re-thinking Tsunami Aid

Original: https://www.spontaneousorder.in/p/re-thinking-tsunami-aid

Author: Spontaneous Order

Published: 2005-01-08T01:54:11.000Z

Topics: disaster-aid, property-rights, private-initiative, decentralized-rebuilding

> This may be an opportune time to think of the type of aid being given in the tsunami areas, over and above simply the modality of aid flows – private or government. A couple of things come to mind. One, for most of these communities while aid for immedi

**Summary:**

Nimai Mehta argues that tsunami aid should transcend immediate consumption and health needs to address the precarious pre-existing conditions of affected communities—barring high-end tourist spots in Thailand and Sri Lanka—which lacked secure livelihoods, security, infrastructure, and property rights. Aid ought to fund decentralized schemes empowering survivors to rebuild permanent structures like roads, lights, and schools via private initiatives on both demand and supply sides, ensuring more enduring outcomes than state-led efforts. The tsunami has erased informal rules and special interests that previously governed resource use amid absent property rights, creating a 'clean slate' for establishing formal property rights. This would compel survivors to capitalize on and mitigate geographical-locational risks in their settlements. Mehta suggests fleshing out these ideas further and positions the Centre for Civil Society (CCS) as having a comparative advantage to advocate this broader, classical-liberal conception of aid to authorities in tsunami-hit regions.

**Key points:**

- Aid should support decentralized private initiatives for rebuilding infrastructure like roads, lights, and schools, rather than relying on state efforts.
- The tsunami offers a clean slate to replace informal rules and special interests with formal property rights in resource-scarce communities.
- Establishing property rights will force survivors to account for locational risks associated with their settlements.
- CCS should leverage its expertise to promote this expanded view of aid to regional authorities.

**By Nimai Mehta**

* * *

This may be an opportune time to think of the type of aid being given in the tsunami areas, over and above simply the modality of aid flows –  
private or government. A couple of things come to mind. One, for most of  
these communities while aid for immediate consumption and health needs is  
clearly essential, this may be the ideal time to think in terms of the  
longer prospects for communities hit by the tsunami. These were, barring  
the high end tourist spots in Thailand and Sri-Lanka, highly precarious  
communities to begin with — in terms of livelihood, security, and access  
to infrastructure, including property rights. Aid therefore should be  
thought of in broader terms. Start with decentralized schemes to enable the  
survivors to invest and rebuild the more permanent structures in their  
community – roads, lights, schools, etc. Private initiative and interests –  
both on the demand and supply side – would clearly be more permanent than  
any state attempt at rebuilding. Two, resource use in these communities are  
mostly affected through informal rules and special interests, in the  
absence of property rights. These informal structures and special interests  
have been equally “washed away” by the tsunami, providing a relatively  
“clean slate” for assigning real property right structures. Establishing  
such property rights will also enable (force) the survivors to better  
capitalize any geographical-locational risks associated with their existing  
settlements. Clearly, a lot more issues along similar lines can be fleshed  
out in greater detail and scope – than what space and time limitations  
impose on my comment here. CCS holds a comparative advantage in making this  
case to the authorities in the tsunami affected region. A broader  
conception of “aid” may allow CCS to capture more attention for its unique  
perspective.

* * *

**About Nimai Mehta**

Dr. Nimai Mehta is Professorial Lecturer, Department of Mathematics and Statistics, at American University, Washington D.C. Dr. Mehta has held teaching positions at the School of Economics, University of the Philippines, where he was a Research Fellow and Program Associate with the Center for Integrative and Development Studies, and previously with the Ateneo de Manila University, Department of Economics.

## Aid: People to People, not G to G

Original: https://www.spontaneousorder.in/p/aid-people-to-people-not-g-to-g-5

Author: Spontaneous Order

Published: 2005-01-06T16:24:35.000Z

Topics: foreign-aid, tax-deductions, private-philanthropy, government-inefficiency

> Only about 15% reaches the beneficiary in government schemes. Are government run relief programs likely to have a better percentage? If not, then what do efficiency minded liberals do in disasters like tsunami? Roger Bate has an answer: Donor nations co..

**Summary:**

Parth Shah critiques the inefficiency of government schemes, noting that only about 15% of funds reaches beneficiaries, and questions whether government-run relief programs would fare better during disasters like the tsunami. He endorses Roger Bate's proposal for efficiency-minded liberals: donor nations should allow tax deductions for corporate and individual taxpayers on investments and philanthropy in designated developing countries, converting government-to-government (G2G) aid into a larger volume of citizen-to-citizen aid—leveraged by a multiple of three or four, depending on tax rates. This classical-liberal strategy bypasses bureaucratic waste, channeling more resources directly to those in need through private initiative and incentives, rather than relying on inefficient state mechanisms. Shah hails it as a 'grand idea' for promoting choice and accountability in aid delivery.

**Key points:**

- Only 15% of funds in government schemes reaches beneficiaries, highlighting inherent inefficiencies.
- Donor nations can multiply earmarked aid by 3-4 times via tax deductions for taxpayer philanthropy to developing countries.
- Convert G2G aid to citizen-to-citizen aid to enhance efficiency in disasters like the tsunami.
- Efficiency-minded liberals should advocate tax incentives for private aid over government programs.

**By Parth Shah**

* * *

Only about 15% reaches the beneficiary in government schemes. Are government run relief programs likely to have a better percentage? If not, then what do efficiency minded liberals do in disasters like tsunami?

Roger Bate has an answer: Donor nations could leverage earmarked aid funds by a multiple of three or four, depending on their tax rates, by allowing tax deductions to their own corporate and individual taxpayers for investments and philanthropy in designated developing countries. In other words, government-to-government aid could be converted into a larger amount of citizen-to-citizen aid.

Isn’t that a grand idea! Read the [full article](http://web.archive.org/web/20050206084459/http://www.techcentralstation.com/010405E.html)…

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Heritage Foundation’s Economic Freedom Index

Original: https://www.spontaneousorder.in/p/heritage-foundations-economic-freedom-index

Author: Spontaneous Order

Published: 2005-01-05T15:33:02.000Z

Topics: economic-freedom, heritage-index, government-intervention, fiscal-burden

> Looking for the “land of the free”? Try Estonia. OR IRELAND. OR CHILE. OR DENMARK. OR EVEN ICELAND. These countries now offer more economic freedom than the United States. Long a symbol of economic prosperity and might, America for the first time ever

**Summary:**

Parth Shah highlights the 2005 Index of Economic Freedom by The Wall Street Journal and The Heritage Foundation, noting that the United States, long a symbol of economic prosperity, has for the first time dropped out of the top 10 'free' nations. Countries like Estonia, Ireland, Chile, Denmark, and Iceland now rank higher, suggesting these offer greater economic freedom. From a classical-liberal perspective, this underscores a decline in American economic liberty. For India, the index shows an unchanged overall score: its fiscal burden of government worsened by 0.5 points, but government intervention improved by 0.5 points, placing India at 118th out of 155 nations and classifying it as 'mostly unfree'. Shah references an Indian Express article on this ranking, implicitly critiquing high government burdens and intervention as barriers to freedom and prosperity. As founder of the Centre for Civil Society, Shah advocates for economic freedom, choice, and competition to foster accountability across sectors.

**Key points:**

- The US ranks outside the top 10 economically free nations for the first time in the 2005 Heritage Index.
- Estonia, Ireland, Chile, Denmark, and Iceland surpass the US in economic freedom.
- India remains 'mostly unfree' at 118th out of 155 nations with an unchanged overall score.
- India's fiscal burden score worsened by 0.5 points, offset by a 0.5-point improvement in government intervention.

**By Parth Shah**

* * *

Looking for the “land of the free”? Try Estonia.

OR IRELAND. OR CHILE. OR DENMARK. OR EVEN ICELAND. These countries now offer more economic freedom than the United States.

Long a symbol of economic prosperity and might, America for the first time ever no longer ranks among the top 10 “free” nations of the world, according to the 2005 Index of Economic Freedom.

Says the The Wall Street Journal and The Heritage Foundation [2005 Index of Economic Freedom](http://web.archive.org/web/20050123180557/http://www.heritage.org/research/features/index/).

About [India](http://web.archive.org/web/20050123180557/http://www.heritage.org/research/features/index/country.cfm?id=India):  
India’s fiscal burden of government score is 0.5 point worse this year, but its government intervention score is 0.5 point better. As a result, India’s overall score is unchanged this year.

Today’s [Indian Express story](http://web.archive.org/web/20050123180557/http://www.indianexpress.com/full_story.php?content_id=62116) on this: **India ‘mostly unfree’, ranks 118 in a list of 155 nations**

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Sumo with the Tsunami

Original: https://www.spontaneousorder.in/p/sumo-with-the-tsunami

Author: Spontaneous Order

Published: 2005-01-04T01:48:38.000Z

Topics: natural-disasters, economic-prosperity, free-markets, prediction-markets

> When all else has been pretty much said you select the voices at the fringes to express your opinions. The Asian mega quake was equivalent of one million nuclear bombs exploded all at once. How does one deal with it? There are two ways: Prediction befor..

**Summary:**

The 2004 Asian tsunami, equivalent to one million nuclear bombs, highlights humanity's ability to innovate against nature's fury, from asteroid deflection to potential futures markets for earthquake prediction, yet exposes powerlessness due to lack of prosperity. Naveen Mandava argues that economic prosperity dramatically reduces disaster deaths: Red Cross data shows 589 killed in developing countries versus 51 in high-development nations (11:1 ratio) over the past decade, with over two million dying from bad water and sanitation alone. Tsunami damages exceed $13 billion, while a global warning system would cost just $100 million—obstacles lie in 'dismally incentivised political & bureaucratic governance' blocking free markets that deliver prosperity. Post-disaster aid falters too: 250 tons of supplies idled in an Indonesian airport due to poor coordination in chaotic Third World systems. Prosperous Japan suffers minimal earthquake damage compared to cyclone-ravaged poor Bangladesh. Mandava concludes that free-market-driven prosperity, not just warnings or aid, is essential for resilience, urging rejection of governance that hinders wealth creation and efficient response.

**Key points:**

- Economic prosperity reduces natural disaster deaths 11:1 compared to developing countries, per Red Cross data.
- A global tsunami warning system costs $100 million versus $13 billion in damages, but poor governance blocks it.
- Futures markets could incentivize accurate earthquake predictions by having scientists bet on data.
- Inefficient aid distribution, like 250 tons stuck in Indonesia, stems from uncoordinated Third World bureaucracy.
- Free markets foster the ingenuity and wealth that make nations like Japan resilient to disasters unlike poor Bangladesh.

**By Naveen Mandava**

* * *

When all else has been pretty much said you select the voices at the fringes to express your opinions.  
The Asian mega quake was equivalent of one million nuclear bombs exploded all at once. How does one deal with it? There are two ways: Prediction before the event and Action after the event.

What about the phase in between? Just sit back and enjoy the nature’s show on television live telecast. Imagine helicopters zooming with videos and cameras to capture the fury and broadcast it across to a voyeuristic audience ready for nature’s thrills. Imagine you could hire a wave-proof bubble that would enable you to roll and see the innards of the tsunami “up-close”. Hang on. Don’t consider me crazy yet! If we can predict “global warming” 50 years in the future I have hope and more importantly, reason to believe that human enterprise can floor nature’s vagaries. I am examining the line of thought that all human progress had progressed from ignorance to ingenuity. We are able to predict nature’s course of asteroids and can assemble enough ammunition to defuse it. But why so powerless against tsunamis?

The United States some time back contemplated the idea of a “futures market” to predict terrorist stikes. Would a “futures market” where scientists bet on researched and divulged pieces of information of impending earthline faults help to predict quakes much ahead in time. Much ahead in time to enable nations to take remedial steps to displace the would be affected. Now we know that of those displaced the most affected are the poor or more precisely, those, who have little else to fall back upon. Take the other end now. The prosperous ones are the least affected. So the more prosperous nations suffer less damages. Get the same funda from the Deputy Editor of Wall Street Journal over [here](http://web.archive.org/web/20050123180557/http://www.opinionjournal.com/columnists/dhenninger/?id=110006092).  
“The Red Cross estimates that for the past 10 years when a natural disaster occurred in a developing country, the number of people killed was 589; but in what the Red Cross calls a country of “high human development” it was 51. That’s 11 to 1.”  
The number of people who died of bad water and bad sanitation was more than two million. Now that doesn’t look as tsunamatic!

Figure it out, economic prosperity kills less! But for prosperity, we would have joined the select group of tsunami warned countries. The damage from this tsunami is expected to top $13 billion. A global warning system would cost an estimated $100 million. But for a dismally incentivised political & bureaucratic governance which is pretty much the biggest roadblock against free markets which deliver prosperity. The same governance will lead to a non sustainable distribution of the aid pouring in. An estimated 250 tons of supplies sat in an airport hangar in Indonesia for lack of coordination. “Too many countries have in the past sent assistance that nobody asked for that clogs up the airports, authorities, customs facilities so that the most important water and sanitation equipment that we desperately trying to get in would be delayed,” U.N. emergency relief coordinator Jan Egeland told the International Herald Tribune. This is the Third World, which is often chaotic under the best of circumstances. We appreciate your efforts to help, but they are wasted…\[if they are not coordinated\].

Why am I so gung ho on economic prosperity? Because where earthquakes cause little damage to Japan, cyclones continue wreak havoc on our poor neighbour Bangladesh!

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Globalisation as a peace strategy

Original: https://www.spontaneousorder.in/p/globalisation-as-a-peace-strategy

Author: Spontaneous Order

Published: 2004-12-31T15:36:26.000Z

Topics: free-trade, globalization, peace-through-trade, economic-freedom

> Tomorrow, 1 Jan 2005, marks a new era in global trade with critical changes in IPR and multifiber trade. The Independent Institute story gives great hope for the future, a fitting way to celebrate the new year. Bestest to you all for 2005! “The greatest

**Summary:**

Parth Shah celebrates 1 January 2005 as marking a new era in global trade due to critical changes in intellectual property rights (IPR) and multifiber trade agreements, drawing hope from the Independent Institute. He spotlights sociologist Erich Weede's article 'The Diffusion of Prosperity and Peace by Globalization' in The Independent Review (fall 2004), arguing that free trade's paramount benefit surpasses even Adam Smith's prosperity gains: it prevents war. Free trade achieves this by diminishing incentives for conflict and nurturing prosperity alongside democracy, both peace correlates. Weede cites numerous studies validating these mechanisms, positing that wider awareness would convert globalization critics to supporters. From a classical-liberal lens, Shah frames this as an optimistic vindication of open markets not just for wealth, but fundamentally for global peace, fittingly heralding the new year.

**Key points:**

- 1 January 2005 introduces pivotal global trade reforms in IPR and multifiber arrangements.
- Free trade primarily prevents war by reducing conflict incentives and fostering prosperity and democracy.
- Numerous studies empirically link free trade to peace outcomes.
- Publicizing these studies could transform globalization critics into advocates.

**By Parth Shah**

* * *

Tomorrow, 1 Jan 2005, marks a new era in global trade with critical changes in IPR and multifiber trade. The Independent Institute story gives great hope for the future, a fitting way to celebrate the new year. Bestest to you all for 2005!

“The greatest benefit of free trade is not that it  
fosters prosperity — although Adam Smith was  
certainly correct when he observed that the  
international division of labor contributes  
significantly to the wealth of nations. Rather,  
it is the tendency of free trade to prevent war,  
according to sociologist Erich Weede (University  
of Bonn), author of the INDEPENDENT REVIEW  
article, “The Diffusion of Prosperity and Peace  
by Globalization” (fall 2004).

Numerous studies show that free trade promotes  
peace in two ways — by reducing the incentives  
to go to war and by promoting prosperity and  
democracy, which also contribute to peace. If  
these studies were better known, Weede suggests,  
many critics of globalization would become  
supporters.

Read more : [https://spontaneousorder.in/why-do-some-societies-prosper-while-others-remain-stagnant-and-poor/](https://spontaneousorder.in/why-do-some-societies-prosper-while-others-remain-stagnant-and-poor/)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Education voucher model for Delhi

Original: https://www.spontaneousorder.in/p/education-voucher-model-for-delhi

Author: Spontaneous Order

Published: 2004-12-28T15:40:26.000Z

Topics: education-vouchers, school-choice, education-reform, indian-education

> At a recent policy meet for MPs, we presented the following model to introduce education vouchers: There are three types of schools in the Indian system–1. government schools; 2. private aided schools; 3. private unaided schools (which can be recognised

**Summary:**

Parth Shah presents a phased education voucher model for Delhi at a policy meet for MPs, advocating a classical-liberal approach to introduce choice and competition into India's school system, which includes government schools, private aided schools (PAS), and private unaided schools (recognised or unrecognised). Phase one targets students exiting PAS in 5th standard for 6th standard entry, with vouchers redeemable only among PAS to test logistics and management with limited choice. Two years later, extend vouchers to government school students entering 6th standard, usable in government schools or PAS, while granting government schools greater autonomy to adapt to parental demands. Two years after that, incorporate private unaided schools for middle and secondary education on vouchers; finally, expand to 1st standard or KG level across all school types. This gradual rollout minimizes initial disruption, builds operational expertise, and progressively enhances access and quality through expanded choice and competition. Shah emphasizes the urgent need for ready-to-implement voucher models to offer interested education ministers, aligning with Centre for Civil Society's focus on economic freedom and accountability in education.

**Key points:**

- Implement phase one vouchers for 5th-to-6th standard transitions exclusively among private aided schools to master voucher logistics.
- After two years, provide vouchers to government school students entering 6th standard, redeemable in government or private aided schools, alongside granting autonomy to government schools.
- Two years later, integrate private unaided schools into the voucher system for middle and secondary education, eventually expanding to KG or 1st standard across all schools.
- Phased introduction minimizes disruption while scaling choice and competition to improve education access and quality.
- Develop practicable voucher models ready for immediate adoption by education ministers.

**By Parth Shah**

* * *

At a recent policy meet for MPs, we presented the following model to introduce education vouchers: There are three types of schools in the Indian system–1. government schools; 2. private aided schools; 3. private unaided schools (which can be recognised or unrecognised). Start the first phase with private aided schools–give vouchers to students coming out of PAS in the 5th standard for entering into the 6th. The vouchers can be used only among the PAS, not in any other type of schools. Very limited choice and competition in the first phase, the primary goal being to learn the logistics of the voucher system and how to manage and run it.

Two years later give vouchers to government schoool students entering the 6th standard, which can be used in government schools or PAS. During the two years (along with the launch of the first phase), give more autonomy to government schools to prepare for their new role and respond to changes in demands by students and parents.

Two years after this, bring in private unaided schools; the whole system for middle and secondary education runs on vouchers. In the last phase give vouchers from the 1st or even the KG level, which can be used in any school.

Basically, a slow phase in with minimal disturbance in the beginning and then expand the scope of choice and competition and thereby improve access and quality. There is really a great need to think about practicable voucher models that can be offered to any interested education minister, just ready for implementation.

Read more about education vouchers: [https://spontaneousorder.in/revamping-indias-education-system-its-time-for-education-vouchers/](https://spontaneousorder.in/revamping-indias-education-system-its-time-for-education-vouchers/)

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Making profits from the poor?

Original: https://www.spontaneousorder.in/p/making-profits-from-the-poor

Author: Spontaneous Order

Published: 2004-12-26T01:47:33.000Z

Topics: bottom-of-pyramid, poverty-alleviation, free-markets, microfinance

> I have a thing or two against the current crop of business books, quite a few of them are not worth the tissue paper that could be made from them. Most of them attempt to rehash the same points with scant pints of intellectual profit. Read how the Econo..

**Summary:**

Naveen Mandava critiques the glut of unoriginal business books and hails C.K. Prahlad's 'The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits' for offering fresh insights into serving underdeveloped markets profitably. He argues that government aid programs fail, corporate social responsibility diverts shareholder value unprofitably, and suggestions like subsidized bank loans to the poor ignore creditworthiness realities—banks charge the poor three times higher interest than large firms like Reliance due to recovery challenges. Informal markets reveal even steeper rates: a street hawker borrowing Rs 100 repays Rs 110 the same day, equating to astronomical annualized interest. Mandava advocates uncovering and engaging these market structures innovatively, as companies do with sachets that thrive among India's poor. The classical-liberal conclusion is that businesses, by devising strategies for the purchasing power of 5 billion poor worldwide, can eradicate poverty through profits rather than charity or intervention.

**Key points:**

- Businesses should serve the poor profitably by innovating for their market structures, as shown in Prahlad's book.
- Government aid and CSR fail to deliver; markets enable poverty eradication via profits.
- Informal lending to the poor charges extreme rates, like 10% daily on Rs 100 loans, highlighting untapped opportunities.
- Sachet packaging succeeds by matching the poor's purchasing power in India.

**By Naveen Mandava**

* * *

I have a thing or two against the current crop of business books, quite a few of them are not worth the tissue paper that could be made from them. Most of them attempt to rehash the same points with scant pints of intellectual profit. Read how the Economist talks on the same lines over [here](http://web.archive.org/web/20050123180557/http://www.economist.com/printedition/displaystory.cfm?story_id=3104241). In an age when very few books break new ground, here comes along a book that “allows you to see the same ground with new eyes”. Many of us want to do good while earning well, but are constrained by the conditions of the under developed markets for the poor. Government aid programs do not work and corporate social responsibility will not deliver enough. That businesses have no business putting shareholders’ wealth to non-profitable (psychic or monetary) uses is another issue, altogether! Recently, I balked at the suggestion of hearing a senior Professor of asking banks to lend money at lower interest rates to the poor, instead of allowing for a competitive banking industry to emerge with diverse micro-financing options for the poor. There is a reason why banks lend money at three times interest rate to the poor than to a Reliance company: credit worthiness and recovery of little amounts dispersed widely. But consider at what rates the poor actually borrow money. A street hawker in front of AIIMS hospital borrows a hundred rupees and gives it back along with an interest of Rs 10 for the same day. Figure out for yourself the astounding interest rate! The market structures for the poor need to be uncovered in order to be able to dealt with them profitably. For fascinating glimpses on these lines read C K Prahlad’s latest book “The Fortune at the Bottom of the Pyramid. Eradicating Poverty Through Profits” (Wharton School Publishing). Read reviews of it [here](http://web.archive.org/web/20050123180557/http://www.economist.com/printedition/displayStory.cfm?Story_ID=3104498) in the Economist. Through this understand why companies make sachets and they make do so well for the poor in India. Understand how 5 billion of the world’s poor can benefit through innovative strategies devised to take their poor purchasing powers into account!

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## From RTI to DTP

Original: https://www.spontaneousorder.in/p/from-rti-to-dtp

Author: Spontaneous Order

Published: 2004-12-09T02:57:04.000Z

Topics: right-to-information, government-transparency, duty-to-publish, open-government

> The government plans to table a new Right to Information (or Freedom of Information) bill in this session of the Parliament. There are many laudable changes in the new bill, but the basic assumption that people must ask and pay for any information they ..

**Summary:**

The Indian government plans to table a new Right to Information (RTI) bill, which includes laudable changes but retains the flawed assumption that citizens must request and pay for government information, amid a culture of secrecy. With eight states already implementing RTI, the author argues for a superior alternative: a Duty to Publish (DTP) Act tailored to Indian circumstances. Under DTP, the government would be required to proactively publish all information except that legally permitted to remain secret. This shifts the fundamental debate from 'what the government should reveal on a case-by-case basis' to 'what it can justifiably keep secret,' necessitating general guidelines for secrecy rather than discretionary decisions. From a classical-liberal viewpoint, this restructuring empowers citizens more effectively than adding severe penalties to the RTI bill, as it institutionalizes transparency by default and curbs bureaucratic opacity. The proposal challenges the RTI's reactive model, promoting a presumption of openness to hold government accountable.

**Key points:**

- The current RTI framework requires citizens to request and pay for government information, which is inadequate given the bureaucracy's secrecy and fear.
- A Duty to Publish (DTP) Act would mandate proactive publication of all government information except legally secret material.
- DTP shifts the debate from case-by-case revelations to defining general guidelines for permissible secrecy.
- This approach strengthens citizen empowerment more than punitive measures in RTI.
- Eight Indian states have implemented RTI, highlighting the need for a better model.

**By Naveen Mandava**

* * *

The government plans to table a [new](http://www.indianexpress.com/full_story.php?content_id=60494) Right to Information (or Freedom of Information) bill in this session of the Parliament. There are many laudable changes in the new bill, but the basic assumption that people must ask and pay for any information they want from, of, or about the government still remains.

Eight states have implemented RTI. Given this experience and the inherent culture of secrecy and fear in the government, it is time to look for a better adaptation of the idea to Indian circumstances: Duty to Publish Act! It is more suitable than the Right to Information Act. DTP instead of RTI!

A DTP Act would require the government to publish all information except that which is permitted to be kept secret by the law. First and foremost this will change the debate from what government should reveal to what it can keep secret. Instead of deciding on a case by case basis, as it does today, it would need to develop general guidelines that determine what information can be kept out of the public domain. This fundamental restructuring of the debate—from what should be revealed to what can be kept secret—would strengthen the hands of citizens far more than any severe penalty clause that can added to the RTI bill.

[More..](http://blog.ccsindia.org/mt/archives/2004/12/from_rti_to_dtp.html#more)

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Vouching for vouchers in Delhi

Original: https://www.spontaneousorder.in/p/vouching-for-vouchers-in-delhi

Author: Spontaneous Order

Published: 2004-12-09T02:56:18.000Z

Topics: school-vouchers, school-choice, education-reform, india-education

> We had a meeting with senior officials in the Education Department regarding the idea of vouchers and its relevance. I stand corrected for some of my mis-judgments regarding the attitude of govt officials towards reforms in education especially on the g..

**Summary:**

Naveen Mandava recounts a meeting with senior Delhi Education Department officials on school vouchers, revising his prior skepticism about government openness to education reforms, particularly on the government delivery front. Officials affirmed vouchers' constitutional basis for promoting equity and equality of opportunities within the system. They identified teachers' unions as the primary obstacle to reforms like contracting out government schools, since teachers cannot be bundled with school infrastructure. Practical ideas emerged, such as redesigning aid to private schools into voucher amounts targeted at the poor. A standout proposal from a politician: a female student earning 12 vouchers for completing 12 grades would qualify for marriage financial assistance from the Social Welfare department, linking education to family incentives. From a classical-liberal perspective, the post underscores vouchers' potential to foster school choice and competition, countering state monopoly in education delivery, with references to global evidence of positive effects.

**Key points:**

- Delhi Education officials view school vouchers as constitutionally mandated to ensure equity and equal opportunities.
- Teachers' unions block reforms like school contracting, as teachers cannot be included with infrastructure.
- Aid to private schools could be restructured as vouchers for poor students.
- A politician proposed 12 vouchers for 12 grades of schooling qualifying girls for marriage assistance from Social Welfare.
- Global studies confirm positive impacts of school choice via vouchers.

**By Naveen Mandava**

* * *

We had a meeting with senior officials in the Education Department regarding the idea of vouchers and its relevance. I stand corrected for some of my mis-judgments regarding the attitude of govt officials towards reforms in education especially on the govt delivery front. Here are a few glimpses. One official pointed out the Constitutional mandate for vouchers given that they promote equity within the system, equality of opportunities. Another official pointed out the thorn in the reforms, the teachers’ unions and how if a govt school has to be contracted out, then the teachers cannot be bundled along with the infrastructure of the school. Another official pointed out how the aid provided to some private schools can be redesigned as voucher amounts and provided to the poor.  
But the gem was this: a politician says that let us put across a scheme like this, if a female student gets 12 vouchers (that she has attended 12 grades) then she stands to get financial assistance for marriage from the Social Welfare department! Encouragement to get educated and then married!  
For those uninitiated into vouchers, here is a good introduction to the topic [here](http://www.worldbank.org/html/extdr/%20hnp/hddflash/workp/wp_00064.html). For those who are still wondering about the effects of voucher experiments around the world, go [here](http://ideas.repec.org/p/wbk/wbrwps/3005.html) for a thumbs-up to the positive effects of school choice.

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Bhopal Tragedy: Justice Delayed is Justice Denied

Original: https://www.spontaneousorder.in/p/bhopal-tragedy-justice-delayed-is-justice-denied

Author: Spontaneous Order

Published: 2004-12-03T21:54:00.000Z

Topics: bhopal-tragedy, justice-delayed, government-failure, legal-reform

> Twenty years back on this day, tragedy descended on the people of Bhopal in the form of a deadly gas that eventually led to the death of more than 15,000 people. Twenty years on from the ghastly incident, victims’ fight continues for a compensation that

**Summary:**

On the 20th anniversary of the Bhopal gas tragedy, where a deadly leak killed more than 15,000 people, victims continue their fight for adequate compensation, with the latest Supreme Court order providing only about Rs 26,000 per victim—far short of the immense damages suffered. The author invokes the proverb 'justice delayed is justice denied,' arguing it rings truer for the poorest victims, and labels the protracted delay a gross human rights violation by the Government of India given the tragedy's scale and victims' demographics. From a classical-liberal lens, the post questions how outcomes might have differed under a reformed legal structure or if the Indian government had not declared itself the sole representative of victims in US courts, implying state monopoly and intervention exacerbated injustice rather than enabling swift, market-oriented remedies like class-action suits or private litigation.

**Key points:**

- Bhopal gas tragedy killed over 15,000 people 20 years prior, with victims receiving only Rs 26,000 each under latest Supreme Court order.
- Prolonged delay in compensation constitutes justice denied, especially for the poor, amounting to a human rights violation by the Indian government.
- Alternative legal structures could have yielded better outcomes for victims.
- Indian government's self-appointment as sole representative in US courts likely worsened results for Bhopal victims.

**By Sruthijith**

* * *

Twenty years back on this day, tragedy descended on the people of Bhopal in the form of a deadly gas that eventually led to the death of more than 15,000 people.

Twenty years on from the ghastly incident, victims’ fight continues for a compensation that fail to measure up to the damage caused to them hy a huge margin (by the latest supreme court order, each victim will receive approx Rs 26,000). *Twenty years is a long time*. The proverb ‘Justice delayed is justice denied’ is stronger when it is denied to the poorest of the poor. Considering the propotions of the tragedy and the demography of the victims, this delay is a gross human rights violation from the part of govt of India.

How different would have the outcome of the tragedy been if our legal structure was different? How different would have the outcomes been if India Govt had not declared itself the sole representative of victims in US courts?

* * *

**About Sruthijith**

## Professor R K Amin: In Memorium

Original: https://www.spontaneousorder.in/p/professor-r-k-amin-in-memorium

Author: Spontaneous Order

Published: 2004-12-03T16:06:48.000Z

Topics: obituary, free-banking, classical-liberalism, gujarati-libertarianism

> Professor R K Amin, member of the Board of Scholars of CCS, passed away on Tuesday, November 30. He was the most ardent and prolific advocate of liberty in Gujarati language. We had the previledge of publishing his Kisan Bole Chhe in Gujarati. He was...

**Summary:**

Professor R K Amin, a member of the Centre for Civil Society's Board of Scholars, passed away on November 30, leaving a profound void in India's classical-liberal intellectual landscape. Renowned as the most ardent and prolific advocate of liberty in the Gujarati language, CCS had the privilege of publishing his 'Kisan Bole Chhe'. He was the first Indian scholar to write in detail about free banking, drawing from discussions on Murray Rothbard, Larry White, and George Selgin, resulting in the unique 'Money, Markets, Marketwallahs'. Last year, he co-edited two volumes of B R Shenoy's writings with Parth Shah. Amid these efforts, Amin was completing his magnum opus—a over 300-page treatise on the theory and history of socialism and capitalism, entirely in Gujarati—which remains unpublished. Shah seeks a suitable Gujarati publisher in Gujarat or Mumbai, as Delhi publishers lack regional networks. Personal anecdotes highlight Amin's enthusiasm, borrowing books during Parliament recesses to study and xerox key pages. Shah laments the irreplaceable loss, especially missing Amin at the winter session's start, underscoring his role in advancing choice, markets, and liberty.

**Key points:**

- Professor R K Amin was the foremost Gujarati-language advocate of liberty and a CCS Board of Scholars member who passed away on November 30.
- He pioneered detailed Indian scholarship on free banking in 'Money, Markets, Marketwallahs', inspired by Rothbard, White, and Selgin.
- CCS published his 'Kisan Bole Chhe' and he co-edited two volumes of B R Shenoy's writings.
- His unfinished 300+ page Gujarati magnum opus on socialism and capitalism theory/history needs a Gujarat/Mumbai publisher.

**By Parth Shah**

* * *

Professor R K Amin, member of the Board of Scholars of CCS, passed away on Tuesday, November 30.  He was the most ardent and prolific advocate of liberty in Gujarati language.  We had the previledge of publishing his [Kisan Bole Chhe](http://web.archive.org/web/20041205015805/http://www.ccsindia.org/publi.asp#kissan) in Gujarati.  He was the first Indian scholar to write in detail about free banking. I still remember discussing with him the ideas of Murray Rothbard, Larry White and George Selgin on banking and then he would borrow all their books to read in Ahmedabad.  Next month or so, when the Parliament was back in session, he would bring them back–pages marked that he wanted to xerox for his record! The resultant [Money, Markets, Marketwallahs](http://web.archive.org/web/20041205015805/http://www.ccsindia.org/publi.asp#mmm) is a one of its kind in Indian literature.  Last year we co-edited [two volumes](http://web.archive.org/web/20041205015805/http://www.ccsindia.org/publi.asp#brs_1) of writings of B R Shenoy.

While doing all these, he was writing his magnum opus on the theory and history of socialism and capitalism–in Gujarati!  This more than 300 page treatise would become a classic.  We were in the process of finalising a suitable publisher in Gujarat/Mumbai since the Delhi publishers do not have a good marketing network in Gujarat.  If you know a Gujarati publisher worthy of this masterpiece, do let me know.

I always looked forward to seeing him at the start of the Parliament session.  On the first day of the winter session I learned that I won’t be able to.  How does one come to terms with such a loss?

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## The Centralization Non-Sequitur

Original: https://www.spontaneousorder.in/p/the-centralization-non-sequitur

Author: Spontaneous Order

Published: 2004-12-02T01:18:17.000Z

Topics: education, centralization, education-policy, historical-institutions

> I recently read an article calling for reforms in Indian education to roll back the deeds of the NDA government–it was written not long after the UPA government’s inauguration. As I moved towards the end of the article, I noticed the oft-cited example

**Summary:**

Nikhil critiques a cliché in Indian education policy discourse, spotlighted in an article written soon after the UPA government's 2004 inauguration, which called for rolling back NDA-era reforms by emulating North American, European, and Japanese school systems. These were portrayed as 'built on the foundation of a publicly-funded efficient school system that ensured education of equitable quality for all children.' From a classical-liberal viewpoint, this embodies a 'centralization non-sequitur': the observed success of foreign public institutions does not logically entail that India's equivalents must be government monopolies. Nikhil emphasizes the overlooked fact that most such institutions originated outside government scope, challenging the reflexive push for state centralization. This fallacy pervades Indian proposals, where foreign examples are invoked to justify public control without acknowledging decentralized or private historical foundations, thereby undermining market-oriented reforms and perpetuating inefficient government dominance in education.

**Key points:**

- Indian policy articles often cite successful US, European, and Japanese public school systems to advocate government centralization, ignoring their non-governmental origins.
- The post identifies this as a logical non-sequitur post-UPA inauguration, targeting NDA education reforms.
- Classical-liberal analysis urges recognizing private creation of effective institutions over state monopoly assumptions.

**By Nikhil**

* * *

I recently read an article calling for reforms in Indian education to roll back the deeds of the NDA government–it was written not long after the UPA government’s inauguration. As I moved towards the end of the article, I noticed the oft-cited examples of North American, European, and Japanese school systems as ones which “were built on the foundation of a publicly-funded efficient school system that ensured education of equitable quality for all children.”

This statement has become something of a cliché throughout Indian policy proposals. That is, “public institutions in the US, Europe, and Japan are functioning well; therefore, their equivalent institutions in India must be the sole realm of government.” It completely ignores the basic fact that most of these institutions were created *outside* the scope of government.

[More..](http://web.archive.org/web/20041205015805/http://blog.ccsindia.org/mt/archives/2004/12/the_centralizat.html#more)

* * *

**About Nikhil**

## Water woes and wards

Original: https://www.spontaneousorder.in/p/water-woes-and-wards

Author: Spontaneous Order

Published: 2004-12-01T03:00:32.000Z

Topics: water-supply, public-utilities, privatization, market-competition

> I am guessing! From now on, will my roadside chai (my saviour in winters) be costlier? Reason? Water tariffs have increased across the board in Delhi about five to ten times. Let me add a little preamble. “Two broad principles were followed in effecting

**Summary:**

Delhi's water tariffs have surged five to ten times under the Delhi Jal Board (DJB), justified by rising production costs and incentives for conservation, but the author critiques this as arbitrary monopoly pricing lacking competition. Drawing classical-liberal lessons from markets, firms like Reynolds wouldn't raise prices without added value due to consumer choice and rivalry; similarly, water services should face competition to minimize costs and reflect true expenses. CCS proposes a ward-based model where wards or consumers select from multiple providers, ensuring low costs, differential tariffs, and accurate pricing—unlike DJB's opacities where true costs remain hidden without rivalry. DJB's inefficiencies are stark: wage bill exceeds income, 40% water lost to leakage and theft, only 25% connections metered (one report claims 90% unmetered), and 25% of Delhi's population unserved by DJB. Households bear total water costs 6.5 times higher due to shortages. Even the poor pay high informal prices, and chai vendors evade hikes via theft. The author urges privatizing water bodies, adopting advanced urban utility models, and shifting production/distribution to markets while government enforces rule of law. A government has no business being in business.

**Key points:**

- Delhi Jal Board's water tariffs increased 5-10 times citing rising costs, but monopoly prevents cost reductions through competition.
- DJB inefficiencies include 40% water loss to leakage/theft, only 25% metered connections, and failure to serve 25% of Delhi's population.
- Propose ward-based service delivery allowing choice among water providers to lower costs, enable differential tariffs, and reveal true prices.
- Households incur total water costs 6.5 times higher than official rates due to shortages; market competition would align incentives.
- Privatize water bodies and limit government to rule of law, exiting production and distribution.

**By Naveen Mandava**

* * *

I am guessing! From now on, will my roadside *chai* (my saviour in winters) be costlier? Reason? Water tariffs have increased across the board in Delhi about five to ten times. Let me add a little preamble.  
“Two broad principles were followed in effecting the new tariff structure. The first was to provide incentives for conservation of water by charging less from people who use water judiciously and more from people who use water for wasteful activities. The second criterion was to rationalise the gap beween the increasing cost of producing drinking water and the amount being realised from consumers.”  
Hear the familiar refrain in all, [here](http://www.hindu.com/2004/12/01/stories/2004120116320300.htm) and [here](http://http//timesofindia.indiatimes.com/articleshow/941410.cms): costs of production have gone up, hence the necessity of rationing the resource through use of prices. Prices that have been dictated by a single firm, in this case, the DJB. Now it is arguable whether the prices are actually reflective of the costs incurred?  
Conceded that costs have increased. But it is worth looking at lessons from the workings of a market economy and understanding how costs can be decreased, and if costs increase they are along with added value. Would a company like Reynolds ever increase the cost of its produced pens citing increased costs of production and that people in other cities are paying more? Arguably no, it has to deal with two elements: choice of a consumer and competition from other firms.

We at CCS have been thinking of a ward-based service delivery model? Each ward/s in a metro has the choice to provide their customer base to a select water provider. Alternately consumers can buy from other service providers. With competition and choice between water service providers, there will be umpteen benefits to consumers. Production costs *will* be kept low in order to deal with competition and there will be differential tariffs for different customers. Prices will be a more accurate reflection of actual costs incurred. In absence of competition, true costs are not revealed. The poor? Well, look at the prices they are already paying in their colonies. You will be surprised. Another dimension to the issue. Water is a public good, or more accurately it is under the government’s power. Can water bodies be privatised? Are there advanced models out there to deal with this issue, especially in terms of urban public utilites?  
We need to proceed in that direction for otherwise, we would have arbitrary price increases by a firm justifying rising production costs even when its wage bill exceeds its income; 40% of its water is lost through leakage and thefts; only 25% of its connections are metered (this [report](http://http//timesofindia.indiatimes.com/articleshow/918142.cms) cites that 90% of Delhi is unmetered) and the rest are based on average consumption of the ‘area’. Imagine the “tragedy of commons” actions in these ‘areas’.  All when 25% of Delhi’s population is not able to be served by DJB’s water. And I have not taken into account the total cost borne by Delhi households to deal with the shortage of water, which is about 6.5 time higher the present costs. And now, would these be dealt with?  
But for now, my roadside *chai* won’t be costlier because he obtains the water through theft and competition from other sellers will keep his price the same. A case of wrong alignment of incentives. Important lessons to be learnt. Leave the production and distribution of water to the market and the rule of law to the government.

A government has no business being in business!

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Economic Tools and Parking Toils

Original: https://www.spontaneousorder.in/p/economic-tools-and-parking-toils

Author: Spontaneous Order

Published: 2004-11-25T01:23:32.000Z

Topics: parking-policy, government-failure, urban-planning, cost-benefit-analysis

> After trying to apply the law of supply and demand to the male-female sex ratio and upset with the moral ramifications, here is my hand at archaelogical economy. The Hindustan Times editorial “Driving a Hard Bargain” posed the following prescriptive s

**Summary:**

Naveen Mandava critiques a Hindustan Times editorial proposing solutions to Delhi's parking woes, prompted by the Supreme Court's advice for a parking management policy before approving new commercial or industrial projects. The editorial advocates three measures: mandatory parking spaces in new building plans, punitive fines for parking outside designated areas, and strict rules to address parking-induced traffic congestion. Mandava identifies three classic policy failures in these prescriptions, reflecting a classical-liberal skepticism of top-down government interventions. First, the proposals ignore the nature of the solution provider—implicitly the inefficient state apparatus. Second, they assume that an agency's ability to implement a solution guarantees it will do so effectively. Third, they overlook cost-benefit analysis, a cornerstone of sound policymaking. From this perspective, such command-and-control approaches are laughable and doomed, as they fail to reckon with governmental limitations and economic realities. Mandava contrasts this with prior attempts to apply supply-and-demand logic elsewhere, signaling a preference for market-oriented thinking over moralistic or regulatory fixes.

**Key points:**

- Hindustan Times editorial proposes mandatory parking in new buildings, punitive fines, and strict anti-congestion rules for Delhi's parking crisis.
- Policy fails by ignoring the incompetent nature of government as solution provider.
- Assumes government capability ensures effective action, which it does not.
- Neglects essential cost-benefit reckoning in policymaking.

**By Naveen Mandava**

* * *

After trying to apply the law of supply and demand to the male-female sex ratio and upset with the moral ramifications, here is my hand at archaelogical economy.

The Hindustan Times editorial “Driving a Hard Bargain” posed the following prescriptive solutions for the parking woes in Delhi. The objective was to seriously consider the apex court’s advice that a parking management policy (I am trying to conceal my laughs on this!) be put in place before the govt clears any more commercial or industrial projects. The solutions are 1> Mandatory inclusion of parking space in forthcoming building plans; 2> punitive fines to discourage parking outside designated areas and 3> tough rules to tackle traffic congestion due to parking.

The solution makes two classic failures in understanding policy. One, it talks about a solution without taking into account the nature of the solution provider. Two, it blinds into the belief that if an agency can perform a solution, it *will* do it. And three, what I did not mention, the cost of the prescribed measures, good policy making takes costs and benefits always into the reckoning.

[More..](http://web.archive.org/web/20041205015805/http://blog.ccsindia.org/mt/archives/2004/11/economic_tools.html#more)

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Canteen-omics

Original: https://www.spontaneousorder.in/p/canteen-omics

Author: Spontaneous Order

Published: 2004-11-21T01:24:08.000Z

Topics: government-monopolies, public-service-failure, market-competition, subsidized-services

> Let me take it light this bright Sunday morning. No serious policy analysis or advice! If somebody calls me a “canteen tourist” they wouldn’t be too far off the mark. Much of my research work involves visiting lots of government offices and a few co

**Summary:**

Government office canteens exemplify public-sector failure as subsidized monopolies lacking competition and sales-linked incentives, resulting in decrepit facilities, slow service, unhygienic tables, tasteless food, and proliferating external hawkers. Officials conduct cost-benefit analyses, opting for home-cooked meals or outside options, creating a vicious cycle: better-off users exit, leaving quality-inelastic needy customers, further eroding standards—seniors stick to tea while juniors endure. This mirrors low-price, abysmal-quality government services like general train coaches and schools, where true costs include time and discomfort. Classical-liberal economics rejects forcing universal use, as capable users always gravitate to superior alternatives. Better outcomes arise by contracting canteens or introducing multiple competing ones on ample government real estate, spurring variety, volume-driven efficiencies, improved service, and quality despite potential cost hikes—far superior to the status quo sink.

**Key points:**

- Government canteens' monopoly and subsidies cause poor quality, slow service, and hygiene issues without demand rationing.
- User exodus to home or external food creates a vicious cycle degrading standards for price-elastic poor clientele.
- This pattern repeats in low-price government services like train general coaches and schools.
- Contract canteens or enable multiple competitors to introduce market incentives for better quality and variety.

**By Naveen Mandava**

* * *

Let me take it light this bright Sunday morning. No serious policy analysis or advice!

If somebody calls me a “canteen tourist” they wouldn’t be too far off the mark. Much of my research work involves visiting lots of government offices and a few corporations. I always make it a point to savour snacks at the canteen in the government office. The canteens I come across are of different types. Some offices have canteens which operate out from a hole-in-the-wall! Others have decreipt (not surprisingly) with the usual fans (that could well find their way to a local museum), tables that are not immediately cleaned (I often had to stand and eat my lunch). Without any available rationing mechanism for the demand of cheap food (most canteen food are of subsidized rates), no wonder you will find hawkers proliferating outside government offices, to fill in the demand.

Inside the government campus/ office, the near monopoly of the canteen is complete which is reflected in the pathetic and slow service, the salaries of the staff are largely independent of the sales of the canteen. This outcome leaves me baffled as to whether any better outcome is possible, since it is actually the government officials working there who have to bear the low quality of food and service.

By the way, I didn’t mention the taste of food available in government canteens. For any objective analysis of government canteen food you need to wipe out the concept of taste from your dictionary, if any such thing is possible!

Canteens can face competition from two sources: exogenous and endogenous. If prices at canteens are too high, or even if the lines are too long, or if food is of retchable variety, the officials working there will start doing a cost-benefit analysis of having canteen food. They might start bringing food from home or start looking for suitable options outside the government office precincts. A canteen (paid and maintained by government with subsidized rates) has no incentives to compete against these entities. Soon, you will find that the people who are most likely to stick through the rush and dirt in the canteen are the ones who are the most ones in need of food. The vicious cycle begins, with this clientele in place, the downfall of standards begin for this segment of the clientele is slightly inelastic to quality of food but elastic to prices. So you will see the senior government officials only having tea/ coffee and not any heavy food. So the outcome is bad food at low monetary prices. Add the price of standing in line to the monetary price and your equation may change. This “sink” that comes about is characteristic of most government services, consider for example, the general coach in trains, they are uniformly pathetic though they are low priced, monetarily speaking; consider government schools, the monetary price is low but the quality is abysmal.

A lot of people would advocate that everybody should be having food at the same canteen in order to put pressure on the canteen to deliver quality food. Unfortunately economics doesn’t work this way. Those who can, will always gravitate to better options; those who cannot, will bear the brunt of the bad services.

A recommended option to government offices to better their canteens would be to contract the canteen, or if space willing (govt offices have lots of real estate at disposal), have two separate smaller canteens, contract them and put them in competitive mode. Soon with the variety of options available to consumers of a canteen: getting food from home; getting food from outside hawkers or getting food from canteen, you will find better service. Some costs may get higher, but the quality will be better. Other costs will be low because the canteen owner would want to make it up through volumes. Again, the outcomes may not be idyllic bliss for all, but much better than the present situation.

Researching Reality  
Naveen

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Back to barter!

Original: https://www.spontaneousorder.in/p/back-to-barter

Author: Spontaneous Order

Published: 2004-11-20T01:25:05.000Z

Topics: barter, voluntary-exchange, free-markets, business-innovation

> Imagine you were a tailor with a shop the size of 5 coffins. I couldn’t think of a better spatial analogy! Now atleast 40% of the shop space remains un-utilized. So how do you make use of it? I would balk at opening a cyber cafe (basically setting up 2

**Summary:**

The post illustrates how entrepreneurs creatively utilize underused shop space, like a tailor combining his tiny shop with a cyber cafe, ignoring aesthetic concerns for profitability. It highlights a broader issue in Indian markets: businesses hold excess inventory or idle space due to credit-based operations and cash shortages. The internet revives barter as a solution, enabling voluntary exchanges of goods and services. A key example is Jagran newspaper, facing cash crunches, using net4barter.com to trade advertising space for appliances like cell phones and leather planners from inventory-rich suppliers. While consumer-to-consumer (C2C) online barter thrives, business-to-business (B2B) is catching up. Echoing Adam Smith, the author asserts that the human propensity to 'truck, barter, and exchange'—unique to Homo sapiens—drives economic prosperity through voluntary transactions, a feature absent in government-dominated exchanges. This classical-liberal perspective celebrates market-driven innovation and critiques state interventions for stifling such natural trade.

**Key points:**

- Entrepreneurs repurpose idle shop space for complementary businesses like adding a cyber cafe to a tailor shop.
- Internet platforms like net4barter.com facilitate B2B barter, as seen when Jagran newspaper exchanged ad space for appliances amid cash shortages.
- Online barter is expanding from C2C to B2B, helping businesses utilize excess inventory.
- Voluntary exchanges via barter embody Adam Smith's view of a uniquely human trait essential for economic prosperity, contrasting with coercive government transactions.

**By Naveen Mandava**

* * *

Imagine you were a tailor with a shop the size of 5 coffins. I couldn’t think of a better spatial analogy! Now atleast 40% of the shop space remains un-utilized. So how do you make use of it? I would balk at opening a cyber cafe (basically setting up 2 computers and connecting them online) in this space, considering over-riding aesthetic tastes of mine. But this is precisely what the shop where I am writing this, has done; combined the un-utilized shop space to a profitable business considering the number of visitors, and he gave a damn to the combination of tailor cum cyber cafe.

It has always been a problem of businessmen and markets as to how best they could make use of inventory, be it space or goods. Most markets in India work on the lines of credit, so business men have more money in terms of goods (a lot of it could be sitting idle in their inventories) than actual cash. A potential “barter market” is out there for companies and individuals to exchange goods and services, values which are negotiable and transactions which are voluntary between both the parties. Enter the internet. See how it has enabled to bring back “barter” to business.

Jagran, a newspaper needed lots of appliances (cell phones, leather planners etc) for its corporate marketing strategy. Flow of cash as always being a crunch, they approached [here](http://web.archive.org/web/20041205015805/http://www.net4barter.com/). Soon they could offer advertising space to appliance owners who were willing to offer appliances (basically making use of inventories) to Jagran in lieu for advertising space.

While barter business has been popular in terms of C2C (exchanges between consumers) online, it is now catching up well with the B2B segment as well.

Though the New Economy shows online barter in a new light, I am reminded of Adam Smith’s quote: “The propensity to truck, barter and exchange one thing for another is common to all men, and to be found in no other race of animals.” Studies of species show that only the homo sapiens had evolved the tool of superior evolutionary advantage – trade. Voluntary exchanges hold the key to economic prosperity. A feature, sadly lacking in most government-dominated transactions!

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Call centres; not azaadi

Original: https://www.spontaneousorder.in/p/call-centres-not-azaadi

Author: Spontaneous Order

Published: 2004-11-19T21:56:53.000Z

Topics: kashmir, economic-freedom, political-freedom, terrorism

> I have always thought that at very low levels of both, most people would choose political freedom over economic freedom. I still think so. It looks like people of J&K have more than very low levels of both. They told a ‘pleasantly surprised’ PM, that

**Summary:**

The post highlights a surprising preference among Jammu & Kashmir residents for economic opportunities like call centers and BPO hubs over political independence (azadi), as conveyed to a 'pleasantly surprised' PM by an industry delegation noting the region's skilled manpower. This challenges nationalists who view such commercial priorities as secondary to 'motherland' independence. The author, from a classical-liberal perspective, invokes Milton Friedman's argument that economic freedom negatively correlates with terrorism by creating opportunities, noting that nations behind global terrorism lack it. More recently, Alberto Abadie's Harvard study establishes a negative correlation between political freedom and terrorism, debunking the poverty-terrorism assumption—no significant link exists between a nation's wealth and terrorism levels, which is often foreign-origin. Economic freedom differs from mere wealth. The conclusion posits more economic and political freedom as the antidote to terrorism.

**Key points:**

- J&K industry delegates urged the PM to develop the Valley as a BPO hub using local skilled manpower, prioritizing jobs over azadi.
- Milton Friedman argued economic freedom acts as a tonic against terrorism by fostering opportunities absent in terrorism-sponsoring nations.
- Alberto Abadie's study found political freedom negatively correlates with terrorism, independent of poverty or wealth.
- Antidote to terrorism is increased economic and political freedom.

**By Sruthijith**

* * *

I have always thought that at very low levels of both, most people would choose political freedom over economic freedom. I still think so. It looks like people of J&K have more than very low levels of both. They told a ‘pleasantly surprised’ PM, that they wanted call centres and couldn’t care as much for azadi (political independence). An industry delegation even suggested to him that he put Kashmir on the IT map and make it a BPO hub. “The delegates said that Kashmir had skilled manpower and wanted BPO sector and call centres in the Valley.” This would come as an eye opener to many a nationalist who would see this as crass commercial concerns over independence of the mother land.

Milton friedman had suggested that economic freedom has a negative correlation with terrorism. “It (Economic Freedom) is also a tonic against terrorism because of the opportunity it creates. All of the nations behind global terrorism lack economic freedom.” More recently Alberto Abadie of JFK school of government at Harvard established a negative correlation between political freedom and terrorism. Read the whole paper here.

Many reports hailed his study for apparently “debunking the long held assumption that poverty leads to terrorism”. Economic freedom is certainly different from wealth. Latter is a parameter in Abadie’s study. Former isn’t. Besides, the fact that “he found no significant relationship between a nation’s wealth and the level of terrorism it experiences” is hardly surprising considering most of terrorism is of foreign origin.

Tail end: Antidote to terrorism is more freedom- economic and Political. Antidote.

* * *

**About Sruthijith**

## The whole is greater than the sum of its parts…

Original: https://www.spontaneousorder.in/p/the-whole-is-greater-than-the-sum-of-its-parts

Author: Spontaneous Order

Published: 2004-11-18T04:11:53.000Z

Topics: prediction-markets, us-elections, information-aggregation, futures-markets

> Two weeks after the US presidential elections, postmortem results continue to flow forth both in America and abroad. While most are busy examining the weaknesses of the Kerry campaign or the hidden strengths of the Bush campaign, a few are still trying ..

**Summary:**

In post-2004 US election analyses, while media focused on poll discrepancies and campaign strengths, futures markets like Tradesports.com proved remarkably accurate. These markets allowed betting on state-level outcomes and national popular vote percentages, with closing prices on November 1st forming an electoral map that exactly matched the final result—Bush securing the precise electoral vote total via state predictions. Despite some state-level variances, like a closer New Hampshire race than anticipated, the aggregate outperformed expert predictions (e.g., Zogby's Kerry win forecast) and exit polls that misfired in Ohio and elsewhere. From a classical-liberal viewpoint, markets excel by aggregating dispersed individual knowledge at potentially lower cost than large-scale polling. The author notes the US Department of Defense's 2003 attempt to launch a similar futures market for events like Jordanian monarchy overthrow or Arafat assassination, which was scrapped amid left-wing moral outrage. This underscores markets' informational power—'putting one's money where one's mouth is'—yet public resistance persists, viewing prices as tools of oppression rather than information.

**Key points:**

- Tradesports.com's November 1st state contract closing prices produced an electoral map matching the exact 2004 US presidential election outcome.
- Futures markets aggregated individual knowledge to outperform polls and expert predictions like Zogby's Kerry win forecast.
- The US DoD's 2003 proposal for a terrorism futures market was abandoned due to moral concerns over trading on sensitive events.
- Markets demonstrate superior information condensation compared to polling, even at lower cost.

**By Nikhil**

* * *

Two weeks after the US presidential elections, postmortem results continue to flow forth both in America and abroad. While most are busy examining the weaknesses of the Kerry campaign or the hidden strengths of the Bush campaign, a few are still trying to figure out the bizarre discrepancies in exit polling data.

The reasons for the exit polling misdiagnosis of Ohio, Minnesota, and others earlier this month (or of Florida in 2000) are numerous, and most stem from the intricacies of the human mind. Meanwhile, the mainstream media has largely ignored a tool which proved amazingly accurate: the futures market.

[Tradesports.com](http://web.archive.org/web/20041123091820/http://www.tradesports.com/) is one of many “futures markets” online. It essentially provides would-be betters with a platform for betting on anything from the viability of Iraqi elections to more mundane sporting events. For the 2004 presidential election, Tradesports set up a national popular vote contract which would close on election day valued at Bush’s final national popular vote percentage. So one would buy a “contract” for the current market price (i.e., estimated percentage), and either make the profit or lose the difference on the final percentage.

I’m actually on the road as I type this, and I didn’t have the foresight to note the closing price on the national presidential contract. It doesn’t matter anyway; the US uses the electoral college system, by which a candidate who wins a state’s popular vote receives the votes of the number of electors (equal to the total number of legislators a state elects to Congress). A candidate must win at least 270 electoral votes to win.

Thus, we turn out attention to the individual state contracts. Political junkie [Dennis Johnson](http://web.archive.org/web/20041123091820/http://www.horsescare.com/horsepuckey/) provides [an electoral map](http://web.archive.org/web/20041123091820/http://blog.ccsindia.org/mt/archives/evmap.html) of the US based on the closing prices on November 1st. At the time, political experts were predicting anywhere between a 320-vote Bush win to a similar Kerry win. Even pollster James Zogby infamously predicted a solid Kerry win. Look at the map: each state voted as the contract price predicted, resulting in an electoral vote total matching the exact end result.

The individual percentages were not necessarily accurate. New Hampshire was much closer than its closing price would indicate, but this was largely because Kerry had taken a lead larger than the margin of error in most polls, and even the Bush campaign seemed to have let the state go. Thus, the market was off.

The overall result was incredibly accurate, proving once more the power of markets as a source of information. Each person involved in the market brings his own knowledge to the table, and in composite condense more knowledge than even the largest poll with seemingly foolproof methodology…and possibly at lower cost.

The US Department of Defense tried to [harness](http://web.archive.org/web/20041123091820/http://www.cnn.com/2003/ALLPOLITICS/07/29/terror.market/) this power in 2003 by creating a futures market for world events. Such events as a possibility of an overthrow of the Jordanian monarchy or the assassination of the then-healthy Yasser Arafat were to be traded as rolling contracts with a closing price analogous to probability. The plan was quickly scrapped after widespread concern–especially from the left–over the moral implications of such a market.

One may say that the functioning of such a market is simply a matter of “putting one’s money where one’s mouth is”, as they say, but proponents will still have to wait some time before the public is accustomed to the idea of prices as information rather than a shopkeeper’s tool of oppression.

* * *

**About Nikhil**

## Cowdung against nukes

Original: https://www.spontaneousorder.in/p/cowdung-against-nukes-2

Author: Spontaneous Order

Published: 2004-11-17T21:59:28.000Z

Topics: cow-protection, government-spending, education-funding

> Delhi has govt run Gau sadans (shelters for cows)that spend more money per cow than MCD (Municipal Corporation of Delhi) schools spend per student. Major riots have been sparked by conflicts over cow slaughter. A proposed ban on cow slaughter hogged nat..

**Summary:**

This fragmentary post critiques India's disproportionate emphasis on cow protection from a classical-liberal viewpoint, highlighting that Delhi's government-run Gau sadans spend more per cow than MCD schools spend per student. It references major riots sparked by cow slaughter conflicts, a national debate over a proposed ban, and Khushwant Singh saving men accused of cow slaughter, before linking to an article on 'cowdung against nukes' to underscore cultural absurdities.

**Key points:**

- Delhi's Gau sadans spend more per cow than MCD schools per student.
- Cow slaughter conflicts have triggered major riots and national political debates.
- Khushwant Singh intervened to save men nearly lynched over false cow slaughter accusations.

**By Sruthijith**

* * *

Delhi has govt run Gau sadans (shelters for cows)that spend more money per cow than MCD (Municipal Corporation of Delhi) schools spend per student. Major riots have been sparked by conflicts over cow slaughter. A proposed ban on cow slaughter hogged national headlines with leaders of all hues debating fervently the strategic matter. Khushwant Singh once saved two young men who were near-lynched by an angry mob that accused them of cow slaughter. And now [this](http://web.archive.org/web/20041205015805/http://www.wired.com/news/culture/0,1284,65717,00.html?tw=wn_story_top5).

* * *

**About Sruthijith**

## Do regulations influence you?

Original: https://www.spontaneousorder.in/p/do-regulations-influence-you

Author: Spontaneous Order

Published: 2004-11-17T03:18:28.000Z

Topics: unintended-consequences, government-regulations, peltzman-effect, free-education

> Consider each of these carefully? It seems logical to introduce safety belts. Introduce them and then you may find that accidents have increased though fatalities may have decreased. Because drivers get more reckless and prone to accidents. There are le..

**Summary:**

Regulations often lead to unintended consequences by altering human incentives and behavior, a classical-liberal caution against presuming benevolent government interventions. Mandatory seatbelts, while reducing fatalities, increase overall accidents as drivers become more reckless, exemplifying the Peltzman effect where safety measures encourage riskier behavior. Anti-discrimination laws prohibiting firing disabled employees raise hiring risks for employers, who anticipate higher firing costs if performance falters, resulting in fewer disabled people being hired. Free government education removes parents' financial stake, incentivizing acceptance of poor-quality schooling without accountability, contributing to deficiencies in systems like India's government elementary education. The author urges circumspection toward such schemes, as they distort natural market-driven choices for value-for-money outcomes, potentially worsening the problems they aim to solve.

**Key points:**

- Seatbelt mandates reduce fatalities but increase accidents due to driver recklessness (Peltzman effect).
- Anti-discrimination laws for disabled workers deter hiring by raising employer firing costs and risks.
- Free government education leads to poor quality as parents lack financial skin in the game and accountability.
- Be wary of regulations' impacts on human behavior before supporting them.

**By Naveen Mandava**

* * *

Consider each of these carefully?

It seems logical to introduce safety belts. Introduce them and then you may find that accidents have increased though fatalities may have decreased. Because drivers get more reckless and prone to accidents. There are less deaths but if you include the increased number of accidents (of cars vs cars and cars vs pedestrians) due to carelessnes, then there seems reason to be circumspect of the outcomes of the much-supported safety-belt regulations.

Next. Pass a regulation that prohibits discrimination against disabled men with regard to employment. What happens? Fewer disabled people get hired. Why? Imagine you were an employer faced with the prospect of hiring a disabled person. Employers know from experience that some people may not be good at work, it happens. But employers also evaluate the costs of firing as well. So if midway through work they found a disabled man not good enough for work, they would like to fire him. But the regulation against discrimination of disabled men ups the costs of firing and hence, of hiring them. So fewer people get hired, as employers would not like to take the risk of hiring and then having to bear the costs of firing him.

Now consider education. Those who could pay would try for obtaining value-for-money education. Now make education completely free. A section of this populace, particularly those who “value” quality in education would still go for the education that gives them value for money. But another section, in fact the major one, may find themselves incentivised to still stick to the for-free education, even if it is of poor quality and especially if there are no other suitable options. So these parents who would have otherwise paid money and demanded better education are left in the hands of an agency who gives them free education but is not accountable to them since they have no stake in it. Does this count for one of the factors that afflict our government based elementary education system?

If you have become wiser (read more circumspect) about how government acts/ schemes affect human behavior, then you will be definitely interested in the [Peltzman effect](http://web.archive.org/web/20041205015805/http://aei-brookings.org/admin/authorpdfs/page.php?id=1029).

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Socialist by default

Original: https://www.spontaneousorder.in/p/socialist-by-default-2

Author: Spontaneous Order

Published: 2004-11-16T22:02:24.000Z

Topics: nehruvian-socialism, cultural-bias, youth-ideology, indian-culture

> In our student seminars, one thing that has never ceased to amaze me is the ‘default ideological setting’ with which students roll in. It’s always marxian. Only the degrees vary. Exploitation, accumulation, over-production, monopolies, environment p

**Summary:**

Sruthijith observes that students attending seminars arrive with a default Marxist ideological framework, emphasizing exploitation, accumulation, over-production, monopolies, environmental concerns, and antagonism toward capitalism, with varying degrees of intensity. He attributes this to India's deeply ingrained socialist national culture, shaped by Nehruvian socialism and five-year plans. Cultural artifacts reinforce this bias: movie villains are typically wealthy businessmen, with no films celebrating business success; folk songs glorify peasant heroes against cruel landlords and pride in collectivism; popular literature and media depict government as a benevolent protector of hapless citizens against evil capitalists and their frauds. From a classical-liberal viewpoint, this pervasive socialist conditioning explains why students readily accept alternative perspectives when presented, as if merely shifting their gaze on the same world. The author seeks to identify the factors behind this default setting, highlighting how it contrasts with openness to other ideas.

**Key points:**

- Students default to Marxist views like exploitation and anti-capitalism in seminars.
- India's culture, rooted in Nehruvian socialism and five-year plans, fosters this socialist bias.
- Movies portray wealthy businessmen as villains, lacking business success stories.
- Folk songs celebrate collectivism and peasant heroes against cruel landlords.
- Popular media frames government as savior from capitalist frauds.

**By Sruthijith**

* * *

In our student seminars, one thing that has never ceased to amaze me is the ‘default ideological setting’ with which students roll in. It’s always marxian. Only the degrees vary. Exploitation, accumulation, over-production, monopolies, environment protection, global warming, evil capitalism and an all pervasive concern for the ‘poor and helpless’ worn on the sleeve. I have often tried to locate the factors responsible for it. The urge to do so become stronger when i see how easily most of them see and accept the other side. It’s just like they are looking at the same world from a different angle (which they are) .

Of course, our national culture is socialist. You can’t expect anything else from a nation brought up on a staple diet of Nehruvian socialism and its five-year plans. Villains of our movies (generally the heroine’s dad) are mostly wealthy businessmen. I do not remember a movie that chronicles a business success story. Our folk songs sings of cruel land lords and peasant heroes and takes pride in a strong collectivist tradition. In pain and in gain. Popular literature isn’t much different. Neither is popular media. The great government assisting hapless citizens so that they do not make mistakes is the underlying theme of most govt related reporting. And of course, evil capitalists and their frauds.

[More..](http://web.archive.org/web/20041205015805/http://blog.ccsindia.org/mt/archives/2004/11/socialist_by_de.html#more)

* * *

**About Sruthijith**

## Torts, lawyers, and millions

Original: https://www.spontaneousorder.in/p/torts-lawyers-and-millions

Author: Spontaneous Order

Published: 2004-11-16T14:46:51.000Z

Topics: torts, bhopal-disaster, class-action-suits, legal-reform

> In ‘How to become a millionaire,’ ToI’s November 14 SWAMINOMICS column SWAMINATHAN S ANKLESARIA AIYAR said: “A month ago, the US pharma giant Merck withdrew its best-selling drug rofecoxib (sold under the brand name Vioxx) after tests proved that

**Summary:**

Parth Shah contrasts the effective US tort system, highlighted in Swaminathan S. Aiyar’s ToI column on Vioxx victims suing Merck via class actions with contingency fees leading to millionaire payouts, against India's dysfunctional approach exemplified by the Bhopal Union Carbide disaster. In Bhopal, US lawyers were barred by a government act appointing itself as sole victim representative, prompting US courts to return the case amid claims of Indian judicial competence and national pride. This resulted in years of delays, with Union Carbide paying $490 in damages; victims received compensation only after 15 years, and interest accrued on undistributed funds equaled the initial payout, requiring a PIL to release it—'wonders of Indian socialism.' Shah argues India's tort issue is not over-litigation like in the US, where lawyers are hated for excess, but under-delivery of timely compensation to victims, emphasizing a classical-liberal critique of state interference prioritizing ideology over individual accountability and quick redress.

**Key points:**

- US class action suits with contingency fees enable victims to secure large, swift compensations, as in Vioxx and tobacco cases.
- Indian government's Bhopal Gas Leak Disaster Act blocked US lawyers, leading to protracted litigation and minimal victim payouts of $490 in damages after 15 years.
- Undistributed Bhopal compensation interest grew to match the principal, but required a PIL for release, exemplifying socialist inefficiencies.
- India needs robust tort mechanisms for prompt victim compensation rather than state monopolization that harms the 'poor and helpless'.

**By Parth Shah**

* * *

In ‘How to become a millionaire,’ ToI’s November 14 SWAMINOMICS column SWAMINATHAN S ANKLESARIA AIYAR said:

“A month ago, the US pharma giant Merck withdrew its best-selling drug rofecoxib (sold under the brand name Vioxx) after tests proved that it doubled the chances of heart attacks, and perhaps strokes. Many US buyers of the drug plan to become millionaires by suing Merck. Can Indians do the same?

In the US, lawyers mount class action suits on behalf of many sufferers, charging no fees but taking a share of any compensation awarded. Such suits against tobacco companies have won huge compensation for lawyers and smokers alike. Smokers have received millions, lawyers billions.”

The Bhopal victims of the Union Carbide are a case in constrast. The day after the disaster, plane load of US lawyers landed in Bhopal to sign up victims to file cases on their behalf in US courts. But the government of India passed an act and appointed itself as the sole representative of all victims of Union Carbide. Then the US court sent the case back to India since it was claimed that the Indian judiciary is competent to try such cases. It became an issue of national pride and not what bests for the victims. The Indian courts as they are, took years to decide. Union Carbide finally paid $490 for damages. Almost after 15 years, the victims received some compensation. And here comes the clincher–part of that money was not paid out and earned interest with RBI, the amount has grown to become equal to the whole initial payment made to the victims. Someone had to file a PIL to get the govt to pay out this money! Wonders of Indian socialism, all in the name of the poor and the helpless.

The issue of torts in India is not so much of victims becoming millionaires but of geting some compensation for the harm as quickly as possible. In the US, the lawyers are hated for overdoing the torts, in India for not doing them at all.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Cowdung against nukes

Original: https://www.spontaneousorder.in/p/cowdung-against-nukes

Author: Spontaneous Order

Published: 2004-11-16T03:14:02.000Z

Topics: cow-protection, government-spending, cultural-policy

> Delhi has govt run Gau sadans (shelters for cows)that spend more money per cow than MCD (Municipal Corporation of Delhi) schools spend per student. Major riots have been sparked by conflicts over cow slaughter. A proposed ban on cow slaughter hogged nat..

**Summary:**

This short, fragmentary post critiques India's disproportionate focus on cow protection, noting Delhi's government-run Gau sadans spend more per cow than MCD schools per student, major riots over cow slaughter, national debates on bans, a near-lynching incident saved by Khushwant Singh, and linking to a Wired article on villagers using cow dung against nuclear radiation—juxtaposing cultural obsessions with rational priorities from a classical-liberal lens.

**Key points:**

- Delhi Gau sadans spend more per cow than MCD schools spend per student.

**By Sruthijith**

* * *

Delhi has govt run Gau sadans (shelters for cows)that spend more money per cow than MCD (Municipal Corporation of Delhi) schools spend per student. Major riots have been sparked by conflicts over cow slaughter. A proposed ban on cow slaughter hogged national headlines with leaders of all hues debating fervently the strategic matter. Khushwant Singh once saved two young men who were near-lynched by an angry mob that accused them of cow slaughter. And now [this](http://web.archive.org/web/20041205015805/http://www.wired.com/news/culture/0,1284,65717,00.html?tw=wn_story_top5).

* * *

**About Sruthijith**

## Spell Left as LFT

Original: https://www.spontaneousorder.in/p/spell-left-as-lft

Author: Spontaneous Order

Published: 2004-11-15T14:47:41.000Z

Topics: economic-freedom, property-rights, occupational-licensing, regulatory-reform

> Two major events on Sunday, November 14; one personal and the other national (not counting the great brunch Mana and I hosted with Spanish omelet with ham and bacon and apricot jam from Himachal. That jam can beat the best of them!). Dr Anuradha Mangalp..

**Summary:**

Parth Shah critiques the Prime Minister's inauguration of a food-for-work program in Andhra Pradesh, arguing that such welfare measures are superficial while government regulations systematically deny economic freedoms to the poor. Urban poor face unemployment or underemployment due to licensing regimes for street vendors, rickshaw pullers, and small shopkeepers. Rural small farmers and laborers suffer from legally restricted markets, often limited to their district. Tribals and adivasis, who preserved forests, are labeled 'encroachers' by the Supreme Court and evicted as forests become public property, denying them basic property rights. Shah asserts this lack of property rights and economic freedom perpetuates poverty across urban, rural, and tribal populations. Instead of more handouts, the PM should institute a 'Livelihood Freedom Test' (LFT)—a simple evaluation of all rules and regulations to check if they prevent honest livelihoods, prompting rethink, revision, or removal. This low-resource reform would unlock sustainable livelihoods far more effectively than welfare programs. Shah playfully urges spelling 'Left' as 'LFT,' dropping the 'e' for 'errors,' from a classical-liberal viewpoint prioritizing choice, competition, and freedom over state intervention.

**Key points:**

- Government licensing regimes keep urban poor like street vendors and rickshaw pullers unemployed or underemployed.
- Rural farmers and laborers earn little due to market restrictions limiting sales to local districts.
- Tribals are evicted from forests they preserved, deemed 'encroachers' under public property laws, denying property rights.
- Implement a Livelihood Freedom Test (LFT) to review all regulations that block honest livelihoods and revise or remove them.
- LFT would generate more sustainable prosperity than food-for-work welfare programs.

**By Parth Shah**

* * *

Two major events on Sunday, November 14; one personal and the other national (not counting the great brunch Mana and I hosted with Spanish omelet with ham and bacon and apricot jam from Himachal. That jam can beat the best of them!). Dr Anuradha Mangalpalli, a trustee of CCS from the beginning, got married to Gautam living in the US. Congratulations to the objectivist couple! And the PM inaugurated in AP the ambitious food-for-work program.

Anyone who argues against the new program runs the risk of being considered heartless, at the least. But the fact remains that the same government keeps a large number of the urban poor unemployed or underemployed through the licensing regime for entry-level professions, like street vendors, cycle rickshaw pullers, small shop keepers. Small farmers and farm laborers do not earn much since the market for their products is legally restricted, at times to the district in which they are produced. Tribals and adivasis are declared by our Supreme Court as ‘encroachers’ in their own forests! They are the ones who took care of the forests and kept them alive for us to enjoy, but now the forests are public property, they must be evacuated to protect the forests. What gross injustice! The urban poor, the rural poor and the tribals, all lack basic property rights and economic freedom.

The well-meaning PM would do far more for the people if he first instituted a **Livelihood Freedom Test**. It’s a simple test for all rules and regulations to check whether they prevent any one from earning an honest living. If they do, rethink, revise, or remove. The LFT won’t demand much resources and would open up areas of livlihood forever. Let the Left be spelled LFT. Drop the ‘e’which stands for ‘errors.

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Diwali resolution

Original: https://www.spontaneousorder.in/p/diwali-resolution

Author: Spontaneous Order

Published: 2004-11-13T16:02:20.000Z

Topics: substack, content-strategy, think-tank

> My Diwali resolution, inspired duely by Tyler’s recent visit, is to make sure that you don’t go without something new to chew on when you come to Spontaneous Order from Monday to Friday. We will add more diversity of topics and bring in new guest auth

**Summary:**

This short, fragmentary post is Parth Shah's Diwali resolution, inspired by Tyler Cowen's recent visit, to ensure Spontaneous Order Substack provides something new to read from Monday to Friday by adding diversity of topics and new guest authors for varied perspectives. It includes a festive greeting: 'Happly Diwali and Sal Mubarak' (likely typos for 'Happy Diwali and Salaam Mubarak'). No substantive policy argument is present.

**Key points:**

- Parth Shah resolves to post new content daily on Spontaneous Order Substack, Monday to Friday.

**By Parth Shah**

* * *

My Diwali resolution, inspired duely by Tyler’s recent visit, is to make sure that you don’t go without something new to chew on when you come to Spontaneous Order from Monday to Friday. We will add more diversity of topics and bring in new guest authors for varied pespectives. Happly Diwali and Sal Mubarak

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Add Jai Vyapar to Jai Jawan, Jai Kisan, Jai Vigyan

Original: https://www.spontaneousorder.in/p/add-jai-vyapar-to-jai-jawan-jai-kisan-jai-vigyan-2

Author: Spontaneous Order

Published: 2004-11-13T15:20:04.000Z

Topics: economic-freedom, morality-of-markets, wealth-creation, business-ethics

> Finance Minister Chidambaram released CCS’s Morality of Markets and Economic Freedom of the World (India reprint)on November 10. My inspiration to edit Morality of Markets came from the answer of IIM-Lucknow students. In reply to my query about what kin

**Summary:**

Parth Shah recounts how Finance Minister Chidambaram released CCS’s *Morality of Markets* (edited by Shah) and *Economic Freedom of the World* (India reprint) on November 10, inspired by IIM-Lucknow students who overwhelmingly preferred non-profit careers over business despite their training. Shah argues this reflects a misplaced shame in profit-making, as simple economics shows companies earn substantial profits—like Narayan Murthy’s—only through repeat customers by offering better products at cheaper prices, inherently performing social service within the rule of law. In contrast to social workers who intend good but rarely eliminate problems and merely treat poverty's symptoms, businesspeople intend profit but achieve genuine social service by solving poverty's root cause. Social workers rely on wealth created by businesses for their resources, underscoring that wealth creation must precede wealth consumption. Shah advocates adding 'Jai Vyapar' (Hail Trade) to India's slogans Jai Jawan, Jai Kisan, and Jai Vigyan to celebrate business as the true engine of societal progress from a classical-liberal perspective.

**Key points:**

- IIM-Lucknow business students preferred non-profit careers, prompting Shah to edit *Morality of Markets* to reframe profits as moral.
- Sustainable profits require serving repeat customers with superior value, equating business success with social service under rule of law.
- Businesses eradicate poverty's causes, while social workers only alleviate symptoms and depend on business-generated wealth.
- Wealth creation by markets must precede any wealth redistribution or consumption for social good.
- Propose 'Jai Vyapar' alongside Jai Jawan, Jai Kisan, and Jai Vigyan to honor commerce.

**By Parth Shah**

* * *

Finance Minister Chidambaram [released](http://web.archive.org/web/20041118030211/http://www.ccsindia.org/nov10_book_release.asp) CCS’s *Morality of Markets* and *Economic Freedom of the World* (India reprint)on November 10. My inspiration to edit *Morality of Markets* came from the answer of IIM-Lucknow students. In reply to my query about what kind of career they would like, a majority of them preferred one in the non-profit sector. I was shocked! Business school gradutes didn’t want to work in business!

I am sure majority of them are now working in the for-profit sector. They must have found some way to rationalise that change of heart: the world is not for idealists; there are no good opportunities in non-profit; parents/friends want me to make money; non-profits are as corrupt, if not more.

They rationlised their choice, but they feel shame in working for profits. Why? Simple economics tells us that companies make money by having large number of repeat customers, that is, by offering better products at cheaper prices. A company can make some money by cheating a few, but real money (a Narayan Murthy amount)can’t be earned by fraud. Therefore the higher the profits, the more the social service that the company has provided. Working for profits, within the rule of law, is actually performing social service.

In reality, compared to social workers, business workers do more social service. Social workers consciously intend to do social service but they rarely succeed in eliminating the problem. Business workers intend to make money but the result of their actions is genuinely social service. They solve the most critical problem of poverty, not just treat the symptoms of poverty, as social workers mostly do.

If you have any doubts, just ask: How does the social worker get resources to support himself while working for the needy? And the resources required to help the needy?

Wealth creation comes before wealth consumption.

Jai Vyapar!

* * *

**About Parth Shah**

Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.

## Curricula that do not curry favour

Original: https://www.spontaneousorder.in/p/curricula-that-do-not-curry-favour

Author: Spontaneous Order

Published: 2004-11-02T02:59:44.000Z

Topics: education-curriculum, exam-boards, education-decentralization, india-education

> The curriculum is everybody’s favourite flogging horse. Much is seen wrong with it. In our ongoing research on the “political economy” of secondary curriculum development in India, we came across a few aspects of curriculum development and testing t

**Summary:**

In their research on the political economy of secondary curriculum development in India, Naveen Mandava highlights systemic flaws where a national body designs an advisory curriculum that most states adopt with minor modifications, despite education being a concurrent subject under state domain. States like Tamil Nadu, West Bengal, and Maharashtra show more initiative but often infuse political bias. Secondary exams, conducted by 22 state boards or three national ones (CBSE, ICSE, NIOS), primarily evaluate rather than innovate, shaping learning incentives that drive textbook design, the proliferation of coaching centers, and even the weight of school bags. Despite geographic decentralization, power remains concentrated in education departments without transparency or competition among boards, leading to issues like inter-board transfer difficulties and no feedback loops for curriculum improvement. From a classical-liberal lens, this underscores the failure of centralized curriculum processes, which burden students rather than empower them, calling for deconcentration of power, competition, and transparency to align incentives with better outcomes. The piece invites suggestions to enhance the project on state-level curriculum framing.

**Key points:**

- National advisory curricula are largely adopted by states with minimal changes, limiting innovation.
- Board examinations dictate learning priorities, fueling coaching centers and heavy school bags.
- Lack of competition and transparency in curriculum design hinders improvements and inter-board mobility.
- Geographic decentralization exists but without power deconcentration, preventing feedback from exams to curricula.

**By Naveen Mandava**

* * *

The curriculum is everybody’s favourite flogging horse. Much is seen wrong with it. In our ongoing research on the “political economy” of secondary curriculum development in India, we came across a few aspects of curriculum development and testing that threw more light on what is wrong with the curriculum or its evaluation of the students. As one noted professor put it, “it is the curriculum which has failed the children and not vice versa!”

How curriculum design happens in India is through the following ways:  
Remember that education is a concurrent subject in India with secondary education under the state’s domain.

1> National body A develops a curriculum for India and sends it to the states for framing their own curricula. A plays only an advisory role, states can develop their own curriculum if they want to. What actually happens is that most of the states take up this centrally designed curriculum with a few modifications, some states like Tamil Nadu, West Bengal and Maharashtra apparently have been more enterprising with respect to curriculum development, but then the “enterprising” nature has not always been devoid of political “colour”.

2> The secondary examinations are held by the boards at the state level (there are 22 state boards in India) or the only three national boards (CBSE/ICSE/NIOS). The main function of the boards is to conduct examinations. There have been a lot of complaints regarding board examinations, the way they are held, the way papers are evaluated and etc.

3> One point that seems to have been missed is that we learn towards our examinations, our curriculum may design what needs to be taught but our board examinations capture the framework of curriculum by determining what needs to be learnt. The incentives set in place by the board examinations are responsible to a large degree for  
a> the way text/ reference books are written  
b> the mushrooming of coaching centres  
c> even the weight of the toddler’s school bag and others.

4> There is geographic decentralisation of education curriculum but there is no deconcentration of power in terms of curriclum framing. Curriculum design is still a privilege of the education department with little transparency. Neither is there the benefit of competition on these boards to improve their examinations or curricula. This gives rise to difficulties in inter-board transfer, no feedback of board examinations towards a better curriculum and others.

While we are still working at it, we welcome any suggestions that could improve the scope of the project or shed more light in terms of how different states actually frame their curriculum.

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Conservation Conversations

Original: https://www.spontaneousorder.in/p/conservation-conversations

Author: Spontaneous Order

Published: 2004-10-26T02:58:16.000Z

Topics: sunderbans, environmental-policy, public-trust-doctrine, wildlife-sanctuaries

> I know it’s too much to expect government policies to be consistent. But environment seems to have an unfair share of inconsistent, ad hoc policies. Take the Sunderbans case for instance. This is a World Natural Heritage Site, a unique ecosystem. The We

**Summary:**

The post critiques the West Bengal government's inconsistent and ad hoc environmental policies, exemplified by the sale of 750 acres of land in the Sunderbans—a World Natural Heritage Site—to the Sahara group for Rs. 20 crore across virgin islands like Lower Long Sand Island, Sagar, Frasergunj, L-Plot, Jharkhali, and Kaikhali. This 'eco-tourism' project violates central laws by encroaching within the 10-kilometer ecologically sensitive zone around Lothian and Sajnekhali wildlife sanctuaries, with Sajnekhali directly in the buffer zone. Parts of the land are reserved forests, with no mention of de-reservation, raising questions about private control overriding public access to forests and fishing grounds, thus threatening fishermen's livelihoods. The sale further breaches the public trust doctrine, akin to the Supreme Court's ruling in the Kamal Nath case, where land on the Beas riverbank was leased for commercial use, leading to lease cancellation, exemplary damages, and affirmation of public access to riverbanks. From a classical-liberal perspective, such governmental actions demonstrate that conservation laws are selectively twisted for convenience, undermining reliance on the state for environmental stewardship.

**Key points:**

- West Bengal government sold 750 acres in Sunderbans to Sahara for Rs. 20 crore, violating 10km ecologically sensitive zones around Lothian and Sajnekhali sanctuaries.
- Project sites include reserved forests without de-reservation plans, potentially privatizing public access to forests and fishing grounds.
- Sale constitutes a breach of public trust doctrine, mirroring the Supreme Court's cancellation of Kamal Nath's Beas riverbank lease and imposition of damages.
- Environmental laws are ad hoc and inconsistently applied, eroding trust in government-led conservation.

**By soumya**

* * *

I know it’s too much to expect government policies to be consistent. But environment seems to have an unfair share of inconsistent, ad hoc policies.

Take the Sunderbans case for instance. This is a World Natural Heritage Site, a unique ecosystem. The West Bengal Government has sold 750 acres of land to the Sahara group to develop land that lies on the virgin islands of Lower Long Sand Island, Sagar, Frasergunj, L- Plot, Jharkhali and Kaikhali, for Rs. 20 crore. While there are justified concerns about the fragile ecosystem being destroyed, fishermen losing their livelihood and the land being under valued, the government has violated the very laws that were created by the centre and are binding on all states.

The first relates to sanctuaries. Law requires that within 10 kilometers of a wildlife sanctuary, the area is an ecologically sensitive area, in which commercial activities should not be carried out. The two sanctuaries in question are Lothian and Sajnekhali. The latter lies in the buffer zone itself. The proposed ‘eco-tourism’ project lies within this 10-kilometre zone, clearly violating their own rules.

Also, some parts of the island where the project is being carried out are reserved forests. It is not clear what the fate of these reserved forests will be. There has been no mention of de-reserving these areas. Once the area becomes private property, access to these lands would be controlled by Sahara. Does this override the existing rights of the people? Also, the land has been sold to Sahara. But what about the access to the waters and fishing grounds of the area? Who decides what happens to all those people who have been using the waters and forests for their livelihood till now?

However, the icing on the cake is that the government of West Bengal may actually be committing breach of public trust by selling the land for some private commercial purpose. When Kamal Nath, the then Minister of Environment, sold the land on the banks of the river Beas to Span Motels for commercial and tourist purposes, the ‘Supreme’ Court declared that a breach of public trust had been committed, and cancelled the lease to the land directly on the banks of the river, and imposed exemplary damages. It further ordered that the motel could not utilise/ encroach any part of the river basin for itself and stated that the riverbank and basin was open to public use.

The government is breaking its own laws that it has formulated for conservation purposes. But it’s quite evident that these laws are simply around to twist and stretch as the situation demands. Can we rely on such a state to conserve our environment?

Read more: [https://spontaneousorder.in/so-musings-forests-to-forest-dwellers/](https://spontaneousorder.in/so-musings-forests-to-forest-dwellers/)

* * *

**About soumya**

## My Reservations to your Affirmative Action

Original: https://www.spontaneousorder.in/p/my-reservations-to-your-affirmative-action

Author: Spontaneous Order

Published: 2004-10-23T02:56:52.000Z

Topics: affirmative-action, school-vouchers, education-regulation, caste-reservations

> Swami’s article Affirmative action yes, reservations no is insightful in its recognition of the problem, but in its proposal of a solution it betrays an ignorance of 1) the true nature of government funding; 2) what ails government schooling and 3) rest

**Summary:**

Naveen Mandava critiques Swami's proposal for affirmative action via government funding to reputed private bodies like CII for free SC/ST schooling, arguing it ignores government funding's distortive nature, government schooling's failures, and regulatory barriers. He highlights government schools' inefficiencies, noting 506 Jawahar Navodaya Vidyalayas (JNVs) cost over Rs 500 crores annually yet have 22% dropout rates at Plus Two, contrasting with over 5 lakh underfunded government and municipal schools. Subsidized private schools would face no cost pressures, gain unfair advantages, crowd out competitors, expand without quality, and trap students without choices—mirroring government schools' fate. Instead, Mandava advocates classical-liberal reforms: education vouchers to students (like proposed food stamps) for school choice, ensuring accountability to parents and spurring private supply even in underserved areas; government-provided school ratings; removal of the license-permit raj and 'not-for-profit' rule stifling education; and deregulation of job markets. He warns caste-based affirmative action invites 'aggressive action' like private-sector reservations, urging principle-based policies over ad-hoc interventions and analysis of government failures.

**Key points:**

- Government funding to private bodies for SC/ST schools creates unaccountable monopolies that crowd out competition and deliver poor quality.
- Education vouchers handed to students enable school choice, accountability to parents, and emergence of quality private schools.
- Remove regulatory barriers like the license-permit raj and non-profit restrictions to unleash education supply.
- Reject caste-based job reservations in private sector; deregulate job markets to empower the poor broadly.
- Shift policy focus from more government action to evaluating and dismantling past regulatory failures.

**By Naveen Mandava**

* * *

Swami’s article [Affirmative action yes, reservations no](http://web.archive.org/web/20041106160913/http://timesofindia.indiatimes.com/articleshow/888078.cms) is insightful in its recognition of the problem, but in its proposal of a solution it betrays an ignorance of 1) the true nature of government funding; 2) what ails government schooling and 3) restrictions to provide schooling and job markets. This reply would not have been so important but for the fact that his articles are foremost in “opinion leadership” and hence are prone to be taken very seriously. The purpose of this article is not to propose a solution for the upliftment of oppressed castes but that good policy-making should involve a thorough evaluation of the resultant costs and benefits. The most noble sounding polices often involve the greatest unintended consequences.

First things first, government regulations have had a deterrent impact on good schooling. For confirmation look no beyond than the govt’s own stable of mis-managed schools and scarcity of supply of quality schooling. If the government’s ventures of Jawahar Navodaya Vidyalayas and the Kendriya Vidyalayas have been successful, it has been on account of extravagant funding and relative autonomy in place. Figure out the cost-benefits of the 506 JNVS which siphon off more than Rs 500 crores annually out of the govt budget (they nevertheless have a drop-out average of 22 percent at the Plus Two level) with the more than 5 lac fund-starved govt and municipal schools across India.

Again, the government will never transfer funds to a third party without attaching conditions. These conditions may be changed to suit the one disbursing the funds. This would lead to the apparent benefit of a few schools but may spell doom for the overall emergence of good schooling. Assume a CII or a government subsidized school is built and schooling is offered for free here to the SC/STs. There are seven direct consequences of this policy.

One, there is no downward pressure on this school to lower its costs, increase efficiency and keep producing better and better results.  
Two, since it has a license for liability-accumulation this school will have an unfair competitive advantage over any other player who wishes to offer schooling to this niche market of SC/STs.  
Three, hence players who would want to offer competitive schooling will leave the market or not enter it at all. Four, consequent of there being no provision of private schooling at this stage, the govt will ask for more funds to be pumped in.  
Five, but with no direct pressure on its quality, (since the school does not have to earn its funds but has them earmarked) the number of schools will expand but offer little quality schooling.  
Six, these students do not have any other option since the private schools have been crowded out and they don’t have the choice in their hands to change to a better school.  
Seven, these schools slowly turn into a “sink” for students who cannot afford better schooling or lack previous quality schooling or those who enter this school will soon drop out for lack of retention powers of the institution.

This has been the story behind most government schools for the poor that produce impoverished schooling.

I won’t single out CII or FICCI. I will take them to represent reputed private bodies. Advocating govt funding to “reputed private bodies” and their opening of diverse schools in every state capital and district, apart from smacking of the ghost of central planning, lacks an understanding of the malaise of govt schooling. The key factor that leads to decrepit government schooling inspite of numerous opening of schools is lack of an accountability to the consumer – the parent/ student. This is well known. But by insisting on funding to move from a govt body to a private body will weaken the chain of accountability and bring on incentives on the private body to garner to the government and not to the consumer. A better method or rather the only other method is to give the funding to the hands of the student – give him a voucher (analogous to the proposed food stamps in the Budget) which can be encashed by the school of his choice. This makes the school accountable to him. But what of an area which does not have schools? Try giving the vouchers to the students and then see the emergence of private schools which cater to the requirements of students. A single enterprise of putting the purchasing power in the hands of the consumer will directly impact provision of good schooling. This not only generates quality at the school level but leads to emergence of schools for all categories of consumers with varying purchase powers. The govt may offer information to the parents through a rating system for schools.

The focus has also to shift from “what the govt should do more” to an analysis of “what the govt has been doing so long”. An analysis of the impact of government’s presence may well give the answers to some of the policy solutions that we are seeking. A look at the dangerously vestigial license permit raj for opening of schools and insistence on education as “not for profit” has flogged this sector to death, among others.

Emphasis may be made towards removing regulatory restrictions for job markets and educationally empowering the poor rather than directed benefit to a few based on caste/ tribe which leads to distortions.

Handing the platter of “affirmative action” to a govt will soon lead to “aggressive action” and what may not be a law (private sector reservations) may well soon become one. There are two ways to approach the issue of job reservations in the private sector. One, the idea is good but it would not be implemented well given the government’s dismal track record and consistent failure of job reservations in government services. Two, whether a government which is contemplating passing a law to make reservation compulsory in private sector, can in principle, One Fine Day make it compulsory for us to have home servants only from the SC/STs in order to provide employment opportunities or can charge a SC/ST cess on us to provide funds to them. The focus has to shift from an issue-based approach to a more principle-based approach. Good policies involve sound principles rather than firefighting issues on an ad-hoc basis.

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Archaeological Economics

Original: https://www.spontaneousorder.in/p/archaeological-economics

Author: Spontaneous Order

Published: 2004-10-07T02:55:56.000Z

Topics: economic-thinking, public-choice, bootlegger-baptist, regulation

> Russel Roberts, perhaps the first economist to write a full length romantic novel, has come up with yet another fascinating invention. Economic Archeology. It essentially involves deconstructing a news report and using economics to dig out what the real..

**Summary:**

Sruthijith introduces 'Economic Archaeology,' an invention by economist Russel Roberts—known for writing a romantic novel—to deconstruct news reports using economics and public policy knowledge to uncover the real underlying stories, similar to how Kerala tea vendors analyze local politics with their historical insights. The post links to a live demonstration and an article on the bootlegger-Baptist coalition, a classical-liberal public choice concept explaining how moralistic regulations often serve special interests like bootleggers masked by Baptist-like moral campaigns. Encouraging readers with economic understanding to practice this skill as superior entertainment to games like DX-Ball, the author praises economists like Roberts for revealing such dynamics in policy and regulation from a free-market perspective.

**Key points:**

- Russel Roberts' 'Economic Archaeology' applies economics to dig out true stories behind news reports.
- Bootlegger-Baptist coalitions drive many regulations, allying special interests with moral crusaders.
- Readers versed in economics can practice Economic Archaeology themselves.
- Such analysis by economists like Roberts illuminates public policy realities.

**By Sruthijith**

* * *

[Russel Roberts](http://web.archive.org/web/20041106160913/http://invisibleheart.com/index.html), perhaps the first economist to write a full length [romantic novel](http://web.archive.org/web/20041106160913/http://www.amazon.com/exec/obidos/tg/detail/-/0262182106?v=glance), has come up with yet another fascinating invention. [Economic Archeology](http://web.archive.org/web/20041106160913/http://cafehayek.typepad.com/hayek/2004/10/archaeological_.html). It essentially involves deconstructing a news report and using economics to dig out what the real story is. Pretty much the same stuff that tea vendors in kerala does with their deep grasp of local politics and immense knowledge of political history. Prof. Roberts does it with his knowledge of economics and public policy. You can do it too ( it certainly is better time pass than playing DX-Ball), if you understand economics.

Watch him practising archaeological economics [live](http://web.archive.org/web/20041106160913/http://invisibleheart.com/Iheart/ArchaeologyWeeding.html) and [read](http://web.archive.org/web/20041106160913/http://www.mercatus.org/regradar/article.php/560.html) about the bootlegger-baptist coalition that more often than not results in entertaining regulations. Thank God, we have economists like Russell Roberts.

* * *

**About Sruthijith**

## Of Cows, Dogs and Foreign Experts

Original: https://www.spontaneousorder.in/p/of-cows-dogs-and-foreign-experts

Author: Spontaneous Order

Published: 2004-10-06T02:55:24.000Z

Topics: planning-commission, foreign-experts, coalition-politics, economic-reform

> My friends from the NDA government, do not hang your boots. Not yet. By the look of things, (never mind they have handed over tehelka to CBI cuz I’m sure you can find any number of Georges to be your convener and even if he goes to jail, it won’t be u

**Summary:**

Sruthijith critiques the UPA government's capitulation to Left allies like Sitaram Yechury and Prakash Karat over the 'foreign experts controversy' in the Planning Commission's midterm appraisal of the Tenth Five-Year Plan. The Commission formed 19 consultative committees with 415 members, including 15 from foreign institutions like IMF, World Bank, ADB, and management consultants—often Indian-origin economists previously at NIPFP, NCAER, ICRIER. Left pressure questioned their integrity, alleging World Bank influence, despite figures like Deputy Chairman Montek Singh Ahluwalia and even the PM having World Bank ties. The advisory committees were dissolved, with Left claiming victory, exemplifying the Malayalam proverb: 'Dog wouldn’t eat grass; wouldn’t let cow eat either.' This hypocrisy extends to Left-ruled states accepting World Bank grants and foreign experts for projects worth thousands of crores, and supporting Sonia Gandhi-led coalition. From a classical-liberal view, such ideological insecurity mirrors mixed economy compromises that damaged India's economy, now stalling decisions like US anti-terror aid for Northeast amid grim security, tainted ministers, and unfulfilled CMP promises. Author urges NDA not to 'hang boots' as UPA's internal conflicts signal instability, offering opposition opportunities.

**Key points:**

- Planning Commission's 19 committees with 415 members, including 15 foreign experts from IMF, World Bank, and ADB, were dissolved due to Left opposition questioning their motives.
- Left leaders hypocritically decry foreign experts while accepting World Bank grants in their states and backing a Congress-led coalition with foreign-origin leadership.
- Coalition compromises delay critical policies like US aid against Northeast terrorism, akin to mixed economy's economic harm.
- NDA should not lose heart, as UPA's five-month-old government faces internal rocking from Left revolutionaries.

**By Sruthijith**

* * *

My friends from the NDA government, do not hang your boots. Not yet. By the look of things, (never mind they have [handed over tehelka](http://web.archive.org/web/20041106160913/http://www.rediff.com/news/2004/oct/04teh.htm) to CBI cuz I’m sure you can find any number of Georges to be your convener and even if he goes to jail, it won’t be unfamiliar territory for hamara George), UPA won’t chug along very long. Even if they do, it won’t be without affording you enough opportunities to rock them…. like a hurricane. So do not hang your boots. Only, you’ll face stiff competition in your mission from within. Left revolutionaries are not new to the business of rocking the boat. Revolution is their lifeblood.

The latest show by controversy experts was the [experts controversy](http://web.archive.org/web/20041106160913/http://www.thehindubusinessline.com/iw/2004/09/26/stories/2004092600261100.htm). Better known as [foreign experts controversy](http://web.archive.org/web/20041106160913/http://news.bbc.co.uk/2/hi/south_asia/3704678.stm). Just in case you have not been hooked to the Indian media, the latest show is nothing but a routine exercise to make sure that our distinguished left leaders, the likes of Sitaram Yetchuri and Prakash Karat, does not stay overeducated (?) and underemployed. The [planning commission](http://web.archive.org/web/20041106160913/http://planningcommission.nic.in/) had formed 19 consultative committees for the midterm appraisal of the tenth five-year plan. In all, these committees consisted of 415 members out of which 15 were ‘foreign’ members. ‘Foreign’, in this case only means they represent foreign institutions like IMF, World Bank, ADB and some management consultants who were sensitive enough to sent people of Indian origin as representatives to the Indian planning commission. These are the very people who until a few years back, were researching at premier institutes like [NIPFP](http://web.archive.org/web/20041106160913/http://www.nipfp.org.in/), [NCAER](http://web.archive.org/web/20041106160913/http://www.ncaer.org/), [ICRIER](http://web.archive.org/web/20041106160913/http://www.icrier.res.in/) etc… Their crime was that they decided to serve prestigious stints (like every economist of repute do at some point of their career), at international institutions. Overnight, their integrity, motive and even academic competence was suspect. Of course, in India, it is an accepted and established national truth that every economist on the planet except Prabhat Patnaik and Jayati Ghosh is lured by ‘world bank money’ and invariably can be ‘bought’. Didn’t you know that the planning commission deputy chairman and PMs right hand advisor, Montek Singh Ahluwalia is a ‘[World Bank Man](http://web.archive.org/web/20041106160913/http://web.mid-day.com/news/nation/2004/september/93128.htm)‘? Why, even the PM served at the world bank. So did nearly every single expert and advisor who walks the decision making corridors of the Yojna Bhawan. Don’t you realise that our country is ruled by traitors who are on the payroll of the world bank and planted by CIA and KGB? Just in case you think this is a bit far fetched, ask any district secretary of the CPI(M). They know better.

When as a result of the controversy, all the consultative committees were [dissolved](http://web.archive.org/web/20041106160913/http://www.hindustantimes.com/news/181_1034503,0002.htm), the most common news byte given by left spokesmen was “[we were heard](http://web.archive.org/web/20041106160913/http://www.indianexpress.com/full_story.php?content_id=56173)“. Why this insecurity? Why this need to assure yourself that you are part of the government? Why this lack of belief in yourself? Now neither foreign experts nor left experts are on board. And all this, for sitting on a consultative committee which is purely advisory and devoid of any decision-making powers. The whole episode reminds me of a proverb we have in Malayalam which, roughly translated into English would read- Dog wouldn’t eat grass; wouldn’t let cow eat either.

Its also worth recalling that these are the very same people who have in the past, received major grants from international agencies including the world bank for projects in states under their rule, consulted many foreign experts and involved them in the implementation of projects worth thousands of crores and above all, did not think twice before supporting the congress led coalition whose chairperson is Sonia Gandhi. May be yet another committee could be formed to look into what kind of foreign origins are acceptable and what are not.

Scanning the newspapers of the past month, you’ll come across many issues, latest being the issue of accepting US assistance in combating terrorism in the North East, on which government’s decision is delayed or convoluted or simply endlessly postponed as a result of trying to accommodate conflicting interests. This is doing to our polity what a compromise in the form of a mixed economy did to our economy.

And buddy, this government is just five months old. Ministries have just started rolling in full blast. Situation in North East is grim. Tainted ministers galore. Lethal weapons are being discovered from scrap heaps. There are massive promises and lofty targets to be met as envisioned in the Common Minimum Programme. And first-rate economists in the government doesn’t seem to be nullifying the effect of their coalition partners in guiding policy. So friends, do not [lose heart](http://web.archive.org/web/20041106160913/http://www.htcricket.com/news/5922_1038801,0030.htm) like Yashwant Sinha. Matters are far from grim for you. Never mind that it doesn’t augur any better for the nation.

Hence don’t hang your boots. Not yet.

* * *

**About Sruthijith**

## Small is better?

Original: https://www.spontaneousorder.in/p/small-is-better

Author: Spontaneous Order

Published: 2004-10-05T02:54:19.000Z

Topics: state-reorganization, fiscal-federalism, inter-state-competition, indian-federalism

> Yesterday I was watching NDTV and there was a debate over whether we should have smaller states. Of course it was a waste of time. No one seems to make any substantial point in those debates. If someone makes an attempt, the anchor immediately calls for..

**Summary:**

Aftab skeptically analyzes the debate on creating smaller states in India, like splitting Maharashtra, dismissing emotional arguments about national unity or regional pride as unsubstantiated. He critiques economic claims, such as Vidarbha's supposed inviability due to lacking natural resources, noting this ironically suggests shedding resource-drains. Proponents' case for smaller states enabling focused government development alarms the capitalist author, who fears bureaucratic disasters and duplication of ministries, courts, and infrastructure, eroding economies of scale. The sole compelling advantage—states competing to attract private investment—hinges on fiscal independence, requiring states to raise their own revenues. However, India's federalism centralizes tax collection, redistributing funds via vague formulas that invite populist schemes and blame-shifting, as seen in Maharashtra's Mumbai complaints and Bihar's coal royalty gripes. Without financial accountability, smaller states merely fragment handouts rather than foster competition. Thus, from a classical-liberal view prioritizing market-driven growth over government meddling, the case for more states fails absent true fiscal federalism, which isn't the agitators' goal of securing 'fair shares' from the Centre.

**Key points:**

- Emotional and simplistic economic arguments fail to justify or oppose smaller states.
- Smaller states risk government-led development failures and bureaucratic duplication without offsetting gains.
- Inter-state competition for investment requires fiscal autonomy, which India's centralized tax system prevents.
- Creating smaller states without financial independence perpetuates dependency and politicking rather than reform.

**By Aftab**

* * *

Yesterday I was watching NDTV and there was a debate over whether we should have smaller states. Of course it was a waste of time. No one seems to make any substantial point in those debates. If someone makes an attempt, the anchor immediately calls for a commercial break.

In this case too, most of the arguments made were emotional ones. How breaking up Maharashtra into two endangers the unity of India, is not immediately clear to a dispassionate observer, nor is it immediately obvious to him how having two Marathi speaking states is an affront to Marathi pride.

The economic arguments made, such as they were, only served to display the ignorance of the one making them. For example, a person from Western Maharashtra was claiming that Vidarbha (which is the eastern wing of Maharashtra) was not “viable” because it did not have any “natural resources”. Leave aside the simple-mindedness of using natural resources as a proxy for viability. Doesn’t the argument, if true, mean that it makes sense for a person from Western Maharashtra to let go of a Vidarbha that is sucking out the “resources” generated by the west?

On the other hand, the arguments *for* smaller states advanced by supporters of the idea, don’t ring true to me. They say that smaller states mean that the local government can focus its effort on the development of that state. Now, I am a capitalist and this idea of the government focusing its efforts to cause development scares me, because I’ve seen what disasters such efforts can cause. Duplication of government infrastructure – the ministries, the bureaucracies and the courts seems like a reason *not* to have smaller states.

Do we have any advantages that will offset the loss of economy of scale caused by division of states? The strongest reason I can think of is that states will compete among themselves to attract private investment and businesses. But they will do that only if they have to raise their own money.

I am not an expert on government finances – perhaps people in CCS know more about this – but it seems to me that the states *do not* have to raise their own money. Federalism in India means that the Central government collects most of the taxes and distributes it among the states based on some vague formula that decides how much each state needs. Naturally, there is much scope for politicking, and states exploit this fully by announcing populist schemes and blaming the Centre for not picking up the tab. Maharashtra complains that it gains no advantage from all the commercial activity that takes place in Mumbai. Bihar cribs that it has been deprived of the royalties that should accrue to it for the coal that is mined in the state. Who is right and who is wrong? No one knows.

I think that the case for smaller states makes sense only if it is also a case for financial independence. But that is not the reason why the supporters of those states want their states. They want it because they think that other regions are hogging the handouts from the Centre. They want their “fair” share. If that is the reason, then we had better not have any more states.

* * *

**About Aftab**

## Community management of forests

Original: https://www.spontaneousorder.in/p/community-management-of-forests

Author: Spontaneous Order

Published: 2004-10-04T02:53:16.000Z

Topics: community-forests, tragedy-of-commons, natural-resource-management, government-failure

> I am currently working on a project exploring the community management of natural resources. It’s quite interesting to see the way people and cultures evolve design principles that secure not only livelihood but also sustainable use of the resource. Thi

**Summary:**

Soumya advocates for community ownership and management of forests, drawing from classical-liberal principles that highlight the tragedy of the commons under government control. Ancient cultures developed sustainable practices like sacred groves across India, treating plants and animals as sacred to instill responsibility for long-term survival. In Coorg, Karnataka, where her grandparents lived for 40 years, tribal animists maintain some of India's thickest forests by worshipping ancestral spirits in them and rotating guard duties among village families for efficient use and preservation. However, when forests fall under government departments like forest and revenue, ownership ambiguity turns them into open-access resources: nobody preserves them, but everybody exploits them, leading to widespread destruction. Government ownership creates scarcity mindset among locals who use forests without conserving them. The solution is to entrust forests to the communities living in and around them, who are best equipped to sustain them while securing livelihoods.

**Key points:**

- Communities have historically sustained forests through cultural practices like sacred groves and animist worship in Coorg.
- Government ownership creates open-access resources, leading to forest destruction as seen in departmental handovers.
- Locals dependent on forests are best positioned to manage and conserve them responsibly.
- Entrust forest ownership and management to communities to prevent razing and ensure sustainability.

**By soumya**

* * *

I am currently working on a project exploring the community management of natural resources. It’s quite interesting to see the way people and cultures evolve design principles that secure not only livelihood but also sustainable use of the resource.

This really comes as no surprise. The ancient people realised that people needed to use resources to secure food and shelter for living.

This remains true even today. At the same time, they realised that they would have to be careful in using these resources, lest they ran out and threatened their survival. It was for this reason that they treated plants and animals sacred, which imbibed in them a sense of responsibility. Examples of such management systems are sacred groves, which are found in many parts of the country.

My grandparents stayed in the Coorg district of Karnataka for forty years. The forests there are still some of the thickest in India. The Coorgies are mostly tribals and are animists. Till today they practice worshipping forests claiming that the spirit of the ancestors rests in the forests. They have designed ways to use the forests efficiently, and have also split the responsibility of keeping guard among families in villages.

For many years the forests of Coorg changed hands of ownership between the forest department and the revenue department. The forests suffered quite a bit from this passing the parcel game, because the forests did not belong to anybody when it came to preservation, but belonged to everybody when it came to using forest products. This is exactly what has happened in many parts of the country. It is this government ownership that has led to the doom of many forests. By making them open access resources, forests are steadily being razed to the ground.

It should be remembered that people who live in and around the forests are the ones who use them and also are the ones best equipped to save them .When governments make forests government property, it creates a feeling of scarcity among these people, who continue to use it, but who no longer have the responsibility to conserve it.

If forests have to be saved, it is time that communities are entrusted with the ownership and management of these forests. That is the only way out.

I am currently working on a project exploring the community management of natural resources. It’s quite interesting to see the way people and cultures evolve design principles that secure not only livelihood but also sustainable use of the resource.

Read more : [https://spontaneousorder.in/forests-communitisation-or-privatisation/](https://spontaneousorder.in/forests-communitisation-or-privatisation/)

* * *

**About soumya**

## There Ought to Be a Law…

Original: https://www.spontaneousorder.in/p/there-ought-to-be-a-law

Author: Spontaneous Order

Published: 2004-10-01T02:51:40.000Z

Topics: free-speech, media-bias, market-discipline, invisible-hand

> The instinctive reaction to any misdeeds by a private organization is to ask for a legal framework to prevent such misdeeds. But there is little need when we already have an invisbile hand ready to dole out punishment. Take the case of the news division..

**Summary:**

The instinctive call for laws to curb private organizations' misdeeds, like CBS news anchor Dan Rather's broadcast of forged documents alleging President Bush evaded Vietnam War service via family connections, ignores the market's invisible hand. Bloggers from both political sides swiftly debunked the papers—typed in Microsoft Word fonts, photocopied, and faxed—as forgeries using typewriting expertise, with CBS delaying acknowledgment despite experts' doubts. Representative Joe Barton proposed congressional hearings and legislation mandating TV news safeguards against partisan bias, but such measures are futile and violate the First Amendment. Instead, the market has punished CBS: Dan Rather's nightly news viewership fell 7%, prompting advertiser pullouts and warnings of revenue losses. Viewers have long been shifting to internet and cable for unbiased alternatives, demonstrating an instant, unbiased system of rewards and punishments that no government oversight can match. From a classical-liberal view, relying on market discipline upholds free speech while effectively checking media misconduct.

**Key points:**

- Bloggers across the political spectrum exposed CBS's forged Bush documents within minutes using font and typing analysis.
- CBS delayed admitting the forgeries, leading to a 7% drop in Dan Rather's nightly news viewership and advertiser withdrawals.
- Proposed legislation for TV news bias safeguards is unconstitutional under the First Amendment.
- Market forces provide superior, unbiased accountability for media errors compared to government regulation.

**By Nikhil**

* * *

The instinctive reaction to any misdeeds by a private organization is to ask for a legal framework to prevent such misdeeds. But there is little need when we already have an invisbile hand ready to dole out punishment. Take the case of the news division of the American network CBS: a media outlet whose misdeeds are translating into lost revenues.

CBS’s Dan Rather, one of the most famous and respected news anchors in the US, had brought forth papers during a news broadcast in mid-September, from a confidential source which allegedly proved that President Bush had used family connections to get his way in the Texas Air National Guard militia unit in the early 1970s (i.e., during the Vietnam War). Bloggers from both the right *and* the left came forward within minutes of CBS releasing the documents online to show the document as a forgery. *Typewriting experts* (I honestly knew no such thing existed before) came forth to differentiate the way in which fonts are rendered, and showed that the documents may well have been typed on Microsoft Word, photocopied them to reduce the quality, and then sent to CBS via facsimile. A long list of evidence can be found [here.](http://web.archive.org/web/20041106160913/http://www.freerepublic.com/focus/f-news/1213508/posts)

CBS waited much too long before acknowledging the forgeries, and many of CBS’s experts said they couldn’t honestly guarantee 100% validity for any of the documents. Furthermore, the sources revealed turned out to be a number of Perhaps the widest circulated message after the scandal was that, *private citizens* typing on their weblogs, not the government or the media, brought about the truth. Even so, millions of Americans automatically found themselves shaking their heads in disbelief, uttering something to the effect of “there ought to be a law preventing such lies in the press.”

US Representative Joe Barton (R-Texas) vocalized this feeling [when he called](http://web.archive.org/web/20041106160913/http://story.news.yahoo.com/news?tmpl=story&cid=1944&ncid=1944&e=1&u=/variety/20040928/va_ne_al/solon_calls_for_hearing_on_tv_news) for a Congressional investigation to see what can be done to prevent such things from happening in the future. Specifically, he “threatened to introduce legislation requiring TV news operations to impose safeguards against partisan bias seeping into reports.” (There are allegations that Rather bypassed company policies for partisan interests, but that is another matter altogether.) But this is not only futile, it will also end up being unconstitutional–the First Amendment of the US Constitution bans such restrictions.

Indeed, the Invisible Hand has already done the job. The *New York Post* [reports](http://web.archive.org/web/20041106160913/http://www.nypost.com/news/nationalnews/19843.htm) that Dan Rather’s nightly news program has seen its viewership drop 7%. Advertisers notice such a change, and many analysts are already warning that companies could start pulling ads and money from the show (many advertisers have already done so).

People have been fleeing so-called network broadcast television news for years, as many believe it doesn’t deliver news as they wish. Internet and cable networks have been rewarded for their relative strengths. This is an instant and unbiased system of rewards and punishments that *no* government oversight could duplicate.

* * *

**About Nikhil**

## A not-so-spontaneous order

Original: https://www.spontaneousorder.in/p/a-not-so-spontaneous-order

Author: Spontaneous Order

Published: 2004-09-24T02:49:34.000Z

Topics: spontaneous-order, hayek, social-rules, institutional-design

> This blog started as a group blog. True to its name, the editor relied on voluntary contributions initially. Soon he realised the hard way that research associates with project deadlines in their nightmares are not exactly the kind of people he can rely..

**Summary:**

The author defends a structured blog posting roster—imposed after voluntary contributions failed—as a prime example of F.A. Hayek's spontaneous order, countering the editor's quip that it is 'not-so-spontaneous.' Hayek delineates three social rules underpinning spontaneous order: those deliberately designed by individuals, tacit knowledge such as a sense of fair play, and beneficial behaviors observed and codified. The roster embodies the first by assigning specific posting days to each contributor, rooted in the tacit, socially acceptable norm of 'one post per week per person.' Observable benefits confirm its efficacy: the editor secures regular content, contributors escape pressure and gain predictable Tuesdays for planning, equal sharing fosters commitment, and day-trading enhances personal efficiency while upholding obligations. This process illustrates the classical-liberal insight that humans routinely 'design' functional institutions through self-interested actions, without needing comprehensive knowledge, transforming a reluctant mandate into a thriving blog.

**Key points:**

- A blog roster assigning weekly posting days exemplifies Hayek's first social rule of deliberately designed institutions.
- It draws on tacit norms like fair play and equal contribution to ensure compliance and benefits.
- Observable gains include editor's steady posts, contributor relief, scheduling predictability, commitment via equality, and flexibility through day trades.
- Self-interested designs without full knowledge yield spontaneous orders, as in this 'not-so-spontaneous' blog success.

**By soumya**

* * *

This blog started as a group blog. True to its name, the editor relied on voluntary contributions initially. Soon he realised the hard way that research associates with project deadlines in their nightmares are not exactly the kind of people he can rely on for voluntary blog posts.

When being nice for a difference, pleadings, abuses, and even threats of physical harm failed to elicit contributions, he got us all together and designed a roster assigning each one of us a specific day in the week for a contribution. He apologised for it being a not so spontaneous order. But I would like to point out that it is very much so.

According to Hayek, the idea of spontaneous order is based on three social rules.  
The first consists of those that we design ourselves. The second called “tacit knowledge”, consists of things like a sense of fair play-. Finally, there is a [third group of rules](http://web.archive.org/web/20041102221720/http://www.libertyhaven.com/politicsandcurrentevents/constitutionscourtsandlaw/spontaneous.shtml) of beneficial behaviour that we can observe and write down.

This is exactly what happened. We designed our roster to determine who would write on which date. We based it on the concept of the ‘socially acceptable ‘ principle of ‘one a week by each of the people’. The benefits are there to observe-the editor gets a post; I get him off my back!

Further I now have the flexibility to plan my activities accordingly, knowing that a contribution is due every Tuesday. By playing on the ‘ socially correct’ principle of everyone contributing equally, a sense of commitment is instilled. This also gives me the opportunity to trade and exchange days with someone else, which would contribute to my efficiency and give me flexibility, at the same time retaining my commitment and actually contributing. Thus we arrive at a fully functioning blog.

I have never had any doubts on how spontaneous order works to benefit us all. Humans are time and again able to ‘design’ institutions without in depth and complete knowledge, by purely acting on self-benefit. Just as in this case of a seemingly ‘not-so-spontaneous order’!

* * *

**About soumya**

## Who decides?

Original: https://www.spontaneousorder.in/p/who-decides

Author: Spontaneous Order

Published: 2004-09-22T02:13:49.000Z

Topics: education, decentralization, government-failure, consumer-choice

> There is wide consensus the world over that more the input from the end user/ consumer go into making of the product/ service, better the quality and utility derived from it. That is the reason why you are lured into filling up numerous surveys asking w..

**Summary:**

There is global consensus that incorporating end-user or consumer input improves the quality and utility of products and services, as seen in market surveys, yet governments rely on central planners and 'experts' disconnected from diverse consumer needs, lacking incentives to prioritize them. In essential services like healthcare and education, decision-making in India is heavily centralized: 38% at the national level, 38% at the state level, 10% at the district level, and only 14% at the local level. In contrast, the UK and USA allocate over 50% of education decisions to district and local levels, allowing better alignment with varied local preferences. This top-down approach imposed on diverse populations undermines effective service delivery, highlighting the classical-liberal critique of bureaucratic overreach and the need for greater decentralization to empower consumers and enhance outcomes.

**Key points:**

- Markets thrive by integrating consumer feedback, but governments ignore it due to planners' lack of incentives.
- India centralizes 76% of education decisions at national and state levels, versus only 24% at district and local levels.
- UK and USA make over 50% of education decisions at district and local levels for better responsiveness to diverse needs.
- Centralized decision-making in essential services like healthcare and education fails to address varied local preferences.

**By Naveen Mandava**

* * *

There is wide consensus the world over that more the input from the end user/ consumer go into making of the product/ service, better the quality and utility derived from it. That is the reason why you are lured into filling up numerous surveys asking whether your burger tastes better with loud music to go with it.  
However, government is one producer who, to this day trusts the instincts of its planners and other ‘experts’ to cater to the demands of its consumers whose needs are unfathomable to these officials. “What does the consumer want” might be the defining question in a marketing department. Not in a babu’s life. Well, to be fair, he has no incentive to care.  
Decision-making even in essential services like healthcare and education takes place at the centre largely and are enforced on hapless consumers across the country who lives in diverse conditions and hence has diverse preferences.  
[Here](http://www.ond.vlaanderen.be/vereenvoudiging/pdf/Unescodecentralisatie.pdf) is a quantitative estimate of what percentage of decision-making in education happens at which levels. India has 38% of the decisions made at the national level, another 38% at the state level, 10% at the district level and 14% at the local level. UK and USA have more than 50% of the decisions made at the district and local levels.

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## The burden of knowledge

Original: https://www.spontaneousorder.in/p/the-burden-of-knowledge

Author: Spontaneous Order

Published: 2004-09-21T02:18:28.000Z

Topics: education, school-bags, public-schools

> During my research into education policy here at the Centre, whenever people spoke of the Ministry of Human Resource Development (MoHRD) trying to cut the weight from children’s school bags, I always assumed it was a figure of speech. Little did I reali

**Summary:**

This fragmentary post shares the author's surprise during education policy research at the Centre for Civil Society upon learning that the Ministry of Human Resource Development's efforts to 'cut the weight from children’s school bags' were literal. It quotes the 1993 Yash Pal Committee report citing a Delhi survey: average bag weight in primary classes exceeds 4kg in public schools but is around 1kg in MCD schools. The report notes lighter loads in villages and small towns, with the problem most acute in urban public schools and pre-schools.

**Key points:**

- 1993 Yash Pal Committee survey in Delhi found average primary school bag weight >4kg in public schools vs ~1kg in MCD schools.
- Bag weight issue is less severe in rural/small town schools but worst in urban public schools and pre-schools.

**By Nikhil**

* * *

During my research into education policy here at the Centre, whenever people spoke of the Ministry of Human Resource Development (MoHRD) trying to cut the weight from children’s school bags, I always assumed it was a figure of speech. Little did I realize that they meant it more literally

*The Report has taken note in the beginning itself that “a survey conducted in Delhi revealed that the weight of school bag, on an average, in primary classes in public schools is more than 4 kg, while it is around 1 kg in MCD schools”. This finding of the Yash Pal Committee is in tune with the information with the educational managers that firstly, the load of the school bag is not a forbidding one in schools in villages and in small towns and secondly, even in big towns, the problem is in its most aggravated form in regard to students of public schools and children of pre-school classes.*  
\[from the Yash Pal Committee report, 1993\]

* * *

**About Nikhil**

## The ghost of central planning?

Original: https://www.spontaneousorder.in/p/the-ghost-of-central-planning

Author: Spontaneous Order

Published: 2004-09-21T02:12:07.000Z

Topics: central-planning, indian-economy, indian-statistical-institute

> While the Indian Economy is yet to break free from the shackles of the ghost of central planning largely conceived by the brilliant Prof P C Mahanalobis, the institute he founded, the prestigious Indian Statistical Institute, has been forced to sent its..

**Summary:**

This brief post draws an ironic parallel between India's economy, still haunted by the 'ghost of central planning' devised by Prof. P.C. Mahalanobis—who founded the Indian Statistical Institute (ISI)—and a literal ghost disrupting ISI's Delhi centre. Masters and PhD students have been sent home due to paranormal reports, turning to temple visits and ghost investigations instead of game theory or probability. From a classical-liberal viewpoint, it underscores how central planning's legacy persists while a prestigious stats institute chases superstition.

**Key points:**

- India's economy remains shackled by central planning ideas from Prof. P.C. Mahalanobis.
- ISI Delhi centre sent masters and PhD students home over ghost sightings.
- Students now investigate the paranormal at temples rather than studying statistics.

**By Sruthijith**

* * *

While the Indian Economy is yet to break free from the shackles of the ghost of central planning largely conceived by the brilliant [Prof P C Mahanalobis](http://www.isical.ac.in/), the institute he founded, the prestigious Indian Statistical Institute, has been forced to sent its masters and Ph.D students home due to the apparently overwhelming presence of a ghost.

“Guess what the students at the Delhi centre of Indian Statistical Institute (ISI) up to these days? Not cracking complicated problems through game theory or laws of probability. They are visiting temples and investigating the paranormal.” Read the full story [here](http://timesofindia.indiatimes.com/articleshow/857597.cms)

* * *

**About Sruthijith**

## Akshay Oorja or Akshay Paisa?

Original: https://www.spontaneousorder.in/p/akshay-oorja-or-akshay-paisa

Author: Spontaneous Order

Published: 2004-09-17T02:06:35.000Z

Topics: energy-policy, renewable-energy, energy-subsidies, government-intervention

> Who said the Indian government is dull?! It loves to party, all it needs is an excuse. In case you missed the full page adverts by the Ministry of Non-Conventional Energy Sources in the national dailies, August 20th (Rajiv Gandhi’s birthday) was celebra

**Summary:**

The Indian government's celebration of Akshay Oorja Divas and the Ministry of Non-Conventional Energy Sources (MNES) represent wasteful promotion of renewable energy in an energy-poor nation where 20,000 villages remain unelectrified and cheap, reliable energy is essential for prosperity. From a classical-liberal viewpoint, this crusade ignores abundant conventional resources: India's coal reserves suffice for over 500 years, only a quarter of oil and gas reserves have been explored, and fossil fuel prices have declined since the 1970s amid technological advances reducing emissions. Renewables like wind, solar, and biomass fail on efficiency—fossil plants achieve 90% capacity utilization versus 30% for 'green' ones, with renewables requiring massive scale (e.g., over 3 million solar plants for Delhi's needs) and suffering intermittency and storage issues. Despite 'free' raw materials, renewables incur high capital and operational costs, yielding high per-unit prices without subsidies; they contribute under 2% of India's power, propped by Rs 5,000-25,000 crores in taxpayer funds. Mandated renewables raise consumer costs and divert resources, perpetuating energy and economic poverty through distorted incentives, unnecessary interventions, and overregulation of conventional sources.

**Key points:**

- India's coal reserves alone last over 500 years, with vast untapped oil and gas potential, making renewable promotion unnecessary.
- Renewable energy plants have 30% capacity utilization versus 90% for fossil fuels, require 3 million solar plants for Delhi's needs, and are intermittent without viable storage.
- Renewables contribute <2% of India's power generation, reliant on Rs 5,000-25,000 crore subsidies, grants, and tax breaks.
- Government mandates for immature renewable tech increase energy prices and opportunity costs, distorting markets and hindering development.

**By vidisha**

* * *

Who said the Indian government is dull?! It loves to party, all it needs is an excuse. In case you missed the full page adverts by the [Ministry of Non-Conventional Energy Sources](http://mnes.nic.in/) in the national dailies, August 20th (Rajiv Gandhi’s birthday) was celebrated as Akshay Oorja Divas (Infinite Energy Day!), with the customary book releases, plaque-unveilings and “Run for Green Energy” marathons across the country.  
In a country where 20000 villages still need to be electrified, people need to consume more, not less energy, and cheap, reliable energy sources are imperative for better standards of living, the Ministry of Non Conventional Energy Sources (MNES) – the only one of its kind in the world – surely wins the White Elephant Ministry award. In an energy-poor economy like ours, a continuing government-sponsored crusade promoting ‘Green’ (or renewable) energy is unfathomable.  
Consider this: The bogey of impending energy crises and doomsday scenarios proclaiming vanishing fossil fuels have been proven wrong repeatedly. In India, proven reserves of coal alone would last more than five hundred years. Recent studies indicate that no more than a quarter of India’s known oil and gas receives have seen serious exploration activity. Commercial exploration by the private sector could yet lead to huge oil and gas discoveries. The comfortable reserves position has been reflected in the real prices of fossil fuels, which have declined steadily since the 70’s. New technologies have dramatically reduced pollution and environmentally harmful emissions from fossil fuel based electricity generation units.  
Not only is there enough ‘conventional’ energy, renewable (read wind, solar, and biomass – nuclear energy is not politically correct enough for the greens) energy sources also fail most technological and economic efficiency tests. Renewable energy technologies are still primitive compared to fossil fuels. A single fossil fuel plant can generate hundreds of MWs of energy, while the capacity of renewable energy plants is significantly less. (according to one estimate, it would take over 3 million solar photovoltaic plants to generate enough electricity for Delhi’s current consumption needs!) Capacity utilisation in a fossil fuel based plant can be as high as 90%, while the most efficient ‘green’ plants can notch up only about 30% capacity utilisation.  
Renewable energy sources are also generally intermittent: wind speeds vary, and the sun does set! Storage is another problem with renewable energy sources.  
Contrary to popular perception, even though the raw material is ‘free’, renewable energy is not cheap either. Renewable energy plants have both high capital costs (large land requirements, investments in transmission infrastructure) and high operational costs. Low capacities of the plants mean that economies of scale are practically non-existent, and the low capacity utilisation results in a very high per unit cost of output. Also the intermittent nature of the ‘raw material’ means money has to be spent on back-up supplies of fossil fuels.  
All this means that renewable energy plants cannot possibly compete with conventional power plants unless they are propped up by massive subsidies, which is exactly the case. Currently renewable energy sources contribute less than 2% of total power generation in India and nearly all of that rests on taxpayers’ money. (Read the sordid tale of the Delhi Energy Development Agency, the Delhi government version of MNES, [here](http://www.ccsindia.org/interns2003/chap1.pdf)). Estimates of the total government support in the form of subsidies, grants and tax-breaks to renewable energy projects range from Rs 5000 crores to Rs 25000 crores.  
Government mandated imposition of renewable energy when technology and the markets are not yet ready for it can only mean higher opportunity costs for consumers – higher energy prices and diversion of scarce funds from use in other sectors.  
Economic poverty relates directly to energy poverty: and the Indian government is only perpetuating both by distorting incentives, intervening unnecessarily in energy markets, and overregulating existing conventional energy sources.

* * *

**About vidisha**

## Free markets never die

Original: https://www.spontaneousorder.in/p/free-markets-never-die

Author: Spontaneous Order

Published: 2004-09-16T02:16:43.000Z

Topics: free-markets, market-resilience, failed-states, economic-liberalization

> Governments may come, go, or even vanish, but the free market lasts forever. The Economist published an article last April on the status of everybody’s favorite failed state, Somalia. Those in favor of strong central governments (or even those who like

**Summary:**

Governments may rise and fall, but free markets endure indefinitely, as evidenced by resilient private enterprise in even the most chaotic environments. In Somalia, a poster child for failed states, mobile phone providers are proliferating to match those in South Dakota, USA, and Coca-Cola has built a mortar-proof plant in Mogadishu despite warlord threats—highlighting the invisible hand's tenacity amid lawlessness. This pattern extends beyond desperate regions: post-Communist Eastern and Central Europe defied skeptics by rapidly sprouting markets for high-tech consumer goods after decades of state oppression, with Poles quipping they were 'red on the outside only.' Similarly, India's post-reform era underscores markets' ability to thrive and serve people longer than any government. Critics who claim cultures cannot adapt to market 'whims' underestimate individuals' innate capacity to trade resources voluntarily, achieving mutual benefit irrespective of social or cultural barriers. From anarchic East Africa to liberated Iron Curtain nations, free markets prove robust, outlasting oppressive regimes and fostering prosperity through spontaneous order.

**Key points:**

- Free markets thrive in Somalia despite anarchy, with mobile providers rivaling South Dakota's and Coca-Cola building fortified plants in Mogadishu.
- Eastern Europe's post-Communist markets for high-tech goods emerged rapidly, proving skeptics wrong about cultural unreadiness for capitalism.
- India's post-reform experience shows markets enduring and serving people beyond any government's lifespan.
- People universally adapt to voluntary trade, countering claims that cultural factors prevent market functionality.

**By Nikhil**

* * *

Governments may come, go, or even vanish, but the free market lasts forever. The Economist published an [article](http://anti-state.com/forum/index.php?board=23;action=display;threadid=10805) last April on the status of everybody’s favorite failed state, Somalia. Those in favor of strong central governments (or even those who like a government) often point to the Horn of Africa as an example of the dangers of anarchy. Soon, the region will have as many mobile phone providers as my home state of South Dakota in the USA. Coca-Cola has recently opened a plant in Mogadishu, complete with mortar-proof concrete to protect against warlords’ attacks. The extra costs of protecting from the lawlessness point out that this is obviously not a viable solution for statehood. However, we can’t ignore the resiliency of the invisible hand in one of the least hospitable lands on Earth.  
This characteristic is hardly limited to areas desperate for goods of any sort, as is Somalia. Indeed, many were skeptical about the ability for Eastern and Central Europe to bounce back from generations of Communist rule; many were proven wrong. “We were like a radish”, the Poles like to say, “red on the outside only.” When the oppressive hand of the Communist state was lifted from the people along the wrong side of the Iron Curtain, markets for even the most high-tech consumer goods sprouted like mad.  
When naysayers doubt the ability for a culture to adapt to the “whims of the market,” they actually mean that people are completely unable to find a way to trade resources amongst themselves so everyone gets what he or she wants because of cultural or social concerns. Whether in anarchic east Africa, liberated Eastern Europe, or even here in India post-reforms, the free market has shown the ability to last and serve her masters far longer than any government.

* * *

**About Nikhil**

## Regulation for 25% freeship to poor students lands in soup!

Original: https://www.spontaneousorder.in/p/regulation-for-25-freeship-to-poor-students-lands-in-soup

Author: Spontaneous Order

Published: 2004-09-15T02:03:32.000Z

Topics: education, private-schools, land-subsidies

> There has been a lot of smoke and fire in Delhi, of late, regarding the violation of contract by private schools who got land at concessional rates in exchange to reserve 25% of seats for the poor. I decided to apply one of the basic tools of policy ana..

**Summary:**

This fragmentary post by Naveen Mandava critiques Delhi's policy of providing concessional land to private schools via DDA and L&DO in exchange for reserving 25% seats for poor students, amid recent violations. The author applies Bastiat’s 'seen and unseen' principle to analyze the issue but cuts off abruptly after describing 'what is seen' (the visible reservation benefit), leaving the 'unseen' analysis undeveloped. From a classical-liberal lens, it signals intent to highlight unintended consequences of such regulations.

**Key points:**

- Delhi private schools receiving concessional land must reserve 25% seats for poor students under contract with DDA and L&DO.

**By Naveen Mandava**

* * *

There has been a lot of smoke and fire in Delhi, of late, regarding the violation of contract by private schools who got land at concessional rates in exchange to reserve 25% of seats for the poor. I decided to apply one of the basic tools of policy analysis: Bastiat’s principle of what is seen and what is unseen!  
**What is seen:**  
The Delhi administration (specifically the DDA and the L&DO) gives land at concessional rates to private schools to be set up, in lieu of 25% reserved admission to poor students and granting

* * *

**About Naveen Mandava**

Naveen is Co-Founder at XamCheck, an organization that partners with schools, supporting them in processes they follow, with learning materials and processes that are all crafted to work together as an interconnected system to drive learning. He is a Doctoral Fellow from RAND Graduate School in Santa Monica, United States of America. He has worked extensively on assessment based decision support for governments, non-profit organizations and schools chains in India and the USA for over 10 years. He has been a Lead Consultant with the World Bank’s Innovations for Poverty Action Consortium, a Policy Analyst with RAND Corporation and a Research Manager at Centre for Civil Society.

## Command and control: the tale of a baby elephant

Original: https://www.spontaneousorder.in/p/command-and-control-the-tale-of-a-baby-elephant

Author: Spontaneous Order

Published: 2004-09-06T22:44:44.000Z

Topics: environmental-bureaucracy, incentive-incompatibility, wildlife-management, decentralization

> All my friends in Greenpeace should visit Paryavaran Bhavan in Delhi (the abode of the Ministry of Environment and Forests) at least once – I had an appointment with an official there this morning. Its easy to find: in the few spots where the plaster is

**Summary:**

Vidisha recounts a visit to Paryavaran Bhavan, the dilapidated headquarters of India's Ministry of Environment, Forest and Climate Change in Delhi, to highlight the failures of bureaucratic command-and-control over natural resources. The building's peeling paint, barely alive potted plants, dingy file-strewn corridors, and makeshift tea-stall at the Information Counter exemplify institutional decay. She argues that entrusting forests and wildlife to distant bureaucrats creates 'incentive incompatibility,' as officials neither reap benefits from good performance nor bear direct costs of failures, undermining effective stewardship. This critique targets environmentalists like her Greenpeace friends who advocate for more forest officers, wildlife wardens, and paper-pushers—essentially more guns and guards. A striking anecdote underscores the absurdity: a memo atop a wildlife protection file stack proposes forming a three-member committee to handle 'official formalities and legal requirements' for exporting a six-month-old baby elephant from Kerala's Periyar Tiger Reserve to Yeravan Public Zoo in Armenia. The fate of this animal rests with an Additional Deputy Joint Under Secretary in a remote cubicle, far from the jungle. From a classical-liberal viewpoint, such centralized control exacerbates environmental degradation; resources should remain with local communities who face direct incentives.

**Key points:**

- Bureaucratic control of forests and wildlife leads to incentive incompatibility, as officials face no personal costs or benefits from their decisions.
- A visit to Paryavaran Bhavan reveals physical and operational decay, questioning demands for expanded state oversight.
- The export of a six-month-old baby elephant from Periyar Reserve to Armenia requires a three-member committee buried in Delhi's paperwork.
- Local communities should manage natural resources instead of distant bureaucrats to align incentives with conservation outcomes.

**By vidisha**

* * *

All my friends in Greenpeace should visit Paryavaran Bhavan in Delhi (the abode of the Ministry of Environment and Forests) at least once – I had an appointment with an official there this morning. Its easy to find: in the few spots where the plaster isn’t peeling off, you can tell it’s painted a pale shade of green (environment, remember?) and the presence of two barely alive potted-plants at the entrance leaves no room for any further doubt. By the time I found my way through the jungle of dingy, file-strewn corridors (the “Information and Facilitation Counter” downstairs serves as a make-shift tea-stall), I was left incredulously wondering how people can, with a straight face, ask for more and more state control over natural resources as a solution to environmental degradation – more forest officers, more wildlife wardens, more paryavaran paper-pushers….more guns, more guards.

One visit to the Ministry’s office reveals starkly what happens when you take forests and wildlife away from local communities and entrust them to the bureaucracy: incentive incompatibility. Neither the benefits of a job well-done nor the costs of a project botched up accrue directly to the official at Paryavaran Bhavan.

As I was wading my way through the stacks of files in the wildlife protection section, my eye caught a memo lying on the top of the stack: Subject: Export of one baby elephant. “with regard to the export of one baby elephant, age six months, from Periyar Reserve to Yeravan Public Zoo, Armenia, it is recommended that a 3-member committee be set up to look into the official formalities, legal requirements…..” So as we speak, the fate of this junior jumbo in the jungles of Kerala lies in the hands (and files) of the Additional Deputy Joint Under Secretary of Wildlife Protection, thousands of miles away, in Wing 3, Block B2, Fifth floor, Room 532, cubicle 7, Paryavaran Bhavan…

* * *

**About vidisha**

## Reuse, recycle and prosper..?

Original: https://www.spontaneousorder.in/p/reuse-recycle-and-prosper

Author: Spontaneous Order

Published: 2004-09-03T22:41:50.000Z

Topics: communism, scarcity, culture-economics

> I find accounts on life in erstwhile communist nations endlessly fascinating. The image of a group of workers, after having returned from the factories, clad in the same state-prescribed night gown, moving to the state-run community halls to watch plays..

**Summary:**

This post shares the author's fascination with life under communism, quoting Slavenka Drakulic's description of extreme recycling and hoarding in scarcity-driven societies, where people repurpose everything from pantyhose to packaging, foreign items, and unpredictable shortages like flour or soap. From a classical-liberal lens, it evokes the haunting uniformity of state-controlled lives—workers in prescribed nightgowns watching state plays—contrasting with market abundance. Comments on the shared excerpt prompt a chicken-or-egg question: Do societal habits, mindsets, customs, and culture determine whether a society adopts market-based or centrally planned economics, or does the economic system shape the culture? No firm conclusion is drawn, leaving it as an open classical-liberal reflection on the interplay between freedom, scarcity, and human behavior.

**Key points:**

- Communist scarcity forced extreme recycling, redefining objects until utterly unusable.
- People hoarded categories like general waste, packaging, foreign goods, and unpredictable shortages.
- The post questions if culture influences economic systems or if economics molds culture.

**By Sruthijith**

* * *

I find accounts on life in erstwhile communist nations endlessly fascinating. The image of a group of workers, after having returned from the factories, clad in the same state-prescribed night gown, moving to the state-run community halls to watch plays prescribed by the state is one that never cease to haunt me.  
Following is an excerpt from [Slavenka Drakulic’s](http://web.archive.org/web/20040920145948/http:/www.crowmagazine.com/slavenka_eng.htm) How We Survived Communism and Even Laughed.  
“Generally speaking, in any communist country there are not many things to throw away. … You recycle, recycle, and recycle, redefining an object (pantyhose for example) by turning it into something else, giving it one function after another, and you throw it away only when you have made absolutely sure (by experiment, of course) that it can’t be used anymore. …They (objects to collect) can basically be divided into several categories: general objects (old cloth, shoes household appliances and furniture, kitchen pots, baskets, brooms, newspapers); objects that normal people in normal countries usually throw away (otherwise known as packaging – bottles, jars, cups, cans, stoppers and corks, rubber bands, plastic bags, gift wrappings, cradboard boxes); foreign objects (anything from a foreign country, from a pencil or notebook to a dress, from chewing gum to a candy wrapper); and objects that might disappear (a very broad and varying category, from flour, coffee, and eggs to detergent, soap, pantyhose, screws, nails, rope, wire, perfumes, notepaper or books – you simply never know, you never can predict what will be next, which, after all, is the primary reason for collecting).”  
From [BonoboLand](http://web.archive.org/web/20040920145948/http:/livingin.phpwebhosting.com/europe/bl/index.php/2004/08/31/p1643-How_we_survived_communism)

The comments posted on this entry in BonoboLand brought me back to an old chicken or egg question, to which I never found a convincing explanation. Do the habits, mindsets, customs and culture in general of a society influence the mode of economic organisation (market based versus centrally planned) they choose to follow or does the latter come to influence the former..?

* * *

**About Sruthijith**

## Private Sector Reservations

Original: https://www.spontaneousorder.in/p/private-sector-reservations

Author: Spontaneous Order

Published: 2004-09-01T22:40:01.000Z

Topics: private-sector-reservations, economic-liberalization, rule-of-law, caste-discrimination

> The government has constituted a group of ministers to study the issue of reservations in the private sector. I don’t know whether the government is serious about this or this is a way of killing an inconvenient idea, but I think everyone agrees that it

**Summary:**

The government's consideration of reservations in the private sector is a horrible idea that would lead to 'death-by-regulation' for employers, as companies evade quotas by creating vacant positions or hiring from backward castes only for low-level jobs like peons, prompting tighter rules, debates, lobbying, and bribes without helping the intended beneficiaries. This mirrors experiences in education, such as IITs leaving reserved seats vacant due to high cutoffs. Alternatives like US-style affirmative action or anti-discrimination laws are dismissed as 'death-by-a-thousand-lawsuits.' The author, from a classical-liberal perspective, proposes opening the economy and enforcing rule of law as the true solution to poverty, lack of opportunity, and caste discrimination among backward castes. Economic liberalization fosters competition, prioritizing competent hires over trusted caste networks, while more open markets—like allowing easier college openings—counter arguments about capitation fees by expanding access. Rule of law reduces reliance on caste for protection, weakening divisive networks sustained by reservations themselves. Ultimately, throttling private hiring worsens discrimination, whereas free markets and legal protections are the antidote.

**Key points:**

- Private sector reservations will trigger evasion tactics, regulatory tightening, and corruption without aiding backward castes.
- Open the economy to boost competition, jobs, and competence-based hiring over caste-based trust.
- Enforce rule of law to diminish reliance on caste networks for protection and justice.
- Remove restrictions on opening colleges to increase educational opportunities for all, including the poor.

**By Aftab**

* * *

The government has constituted a [group of ministers](http://web.archive.org/web/20040916230712/http:/timesofindia.indiatimes.com/articleshow/833126.cms) to study the issue of reservations in the private sector. I don’t know whether the government is serious about this or this is a way of killing an inconvenient idea, but I think everyone agrees that it is a horrible idea. Almost everyone who has gone through our competitive education system has the demoralising memory of missing out on that seat in the sought-after college. Reservations are probably the first step in the long process that breaks a person’s innocence and idealism. The student comes away with the dull realisation that the “system” isn’t fair and he may conclude that it will never be.

Reservations in the private sector will be as bad. But it will be bad in a different way. It will be worse not because it will reduce opportunities for employees, but because it will mean death-by-regulation for the employers.

First of course, the companies will try to get around the requirement by “expanding” their roll to accomodate the extra employees and then keeping those extra jobs vacant because “no suitable candidate is available” (That will be quite true. The IITs do something like that. Since IITs have pretty high cutoffs even for reserved seats, most of these remain vacant. This practice has saved the lives and careers of many SC/ST students who would otherwise have had to drop out, unable to cope with the rigour.)

Then someone will point out that the companies are indulging in these tricks and the regulation will be tightened to ensure that the industry actually employs people belonging to the backward castes and doesn’t just advertise for them. Companies will try to get around this by trying to fill up the quota by recruiting all their peons and janitors from the backward castes (what happens to many companies which outsource these activities is anyone’s guess). And then of course, someone will amend the regulation to clarify that the jobs are supposed to be reserved at *all levels.* There will be much debate about what *all levels* means, much lobbying will take place and a lot of bribes will change hands, without any change in the actual situation of those whom the regulations are supposed to help. This is a depressingly familiar story.

Some people, notably Gurcharan Das have proposed US-style Affirmative Action and laws against discrimination as an alternative to reservations, probably in the mistaken belief that it will do less harm. Really, which is better? Death by regulation or death-by-a-thousand-lawsuits?

But do I have a solution to the very real problem that people belonging to the backward castes are poor, lack opportunity and are often discriminated against? Yes I do. *Open up the economy.* and *enforce rule of law*

I heard a debate yesterday on NDTV, where the Minister for Social Justice, Ms. Meira Kumar was scoffing at the idea that a person who has gone to an engineering college paying lakhs as capitation fees is more “meritorious” than a poor person from a backward caste who couldn’t afford to make the payment.  
That, by the way is a good argument for letting more people open colleges by *removing* restrictions that hamper the process so much that right now only a well-connected politician who cares more about making money than about imparting education will go through the trouble of opening a college.

More competition means more opportunities and hence more jobs for everyone, inclding those from the poorer castes. That should be obvious. But there is another dynamic at work. The trade-off of trust vs. competence.

In a protected economy, you will be more interested in hiring *trusted people* because you are more worried about your employees cheating you than about your competitor driving you out of business, and naturally that means that you will hire people from your own caste. In a competitive economy, you will hire *competent people*. And as a practical matter letting loose a multinational company on a small town is the best way to force local companies to discriminate less. Throttling private companies from hiring seems to be the exact wrong way of going about it.

Likewise, in a country where legal protections are weak and contracts aren’t enforced speedily and quickly, you have to rely on extra-legal means to protect yourself. That frequently means that you have to rely on your caste network to provide you with the necessary support. If you can rely on the courts to give you justice, you will be less uncomfortable about dealing with people whose background you do not know.

Finally, as long as reservations remain, people will band together with their own caste brethren because this banding is needed to get their men into power

An open economy with rule of law is the only antidote to the misery of the poor and the problem of caste-discrimination, not reservations.

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**About Aftab**

## Our first steps on net

Original: https://www.spontaneousorder.in/p/our-first-steps-on-net-2

Author: Spontaneous Order

Published: 2004-09-01T07:05:53.000Z

Topics: online-launch, blog-promotion, search-ranking

> Tyler Cowen announces Spontaneous Order in his widely read blog Marginal Revolution. So does Ravikiran Rao, in his blog Examined life. Thanks for the plug, Tyler & Ravi. Incidentally, even google ranks us quite highly. Try typing “Spontaneous Order” i

**Summary:**

This brief 2004 post by Sruthijith celebrates the early online launch of Spontaneous Order, noting announcements by Tyler Cowen on his influential Marginal Revolution blog and by Ravikiran Rao on Examined Life, thanking them for the plugs. It highlights that Google already ranks 'Spontaneous Order' highly in search results, suggesting promising initial traction for the classical-liberal platform from India's Centre for Civil Society.

**Key points:**

- Tyler Cowen announced Spontaneous Order on Marginal Revolution.
- Ravikiran Rao promoted it on his Examined Life blog.
- Google search ranks 'Spontaneous Order' highly, indicating early visibility.

**By Sruthijith**

* * *

Tyler Cowen [announces](http://web.archive.org/web/20040902023620/http://www.marginalrevolution.com/marginalrevolution/2004/08/new_indian_econ.html) Spontaneous Order in his widely read blog [Marginal Revolution](http://web.archive.org/web/20040902023620/http://www.marginalrevolution.com/). So [does](http://web.archive.org/web/20040902023620/http://ravikiran.com/archives/000107.htm) Ravikiran Rao, in his blog [Examined life](http://web.archive.org/web/20040902023620/http://ravikiran.com/). Thanks for the plug, Tyler & Ravi.

Incidentally, even google ranks us quite highly. Try typing “Spontaneous Order” in the [all powerful](http://web.archive.org/web/20040902023620/http://www.cnn.com/2003/US/06/29/nyt.friedman/) box.  
Starting to go places..?

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**About Sruthijith**

## The Amartya Sen Fallacy

Original: https://www.spontaneousorder.in/p/the-amartya-sen-fallacy

Author: Spontaneous Order

Published: 2004-08-12T22:31:24.000Z

Topics: government-failure, private-competition, education-policy, public-transport, industrial-licensing

> Hello, this is Aftab and it isn’t my real name. If you’ve been reading the Indian blogosphere, you probably know my real name and have plans of hunting down and killing me, so I thought it prudent to post under an assumed name. So here’s my first po

**Summary:**

The post identifies the 'Amartya Sen Fallacy,' a recurring error in government policy-making where officials justify public provision of a service because private alternatives are inadequate, then, upon public failure, blame and ban private competition to protect the public option. Amartya Sen exemplified this by arguing for government schools over private ones, then proposing to ban private tuitions that siphon resources from failing government schools. Similarly, Nehru built a massive unproductive public sector while imposing industrial licensing to prevent private factories from competing. In Mumbai, private company buses, after dropping employees, cannot legally pick up commuters to their destinations because that would compete with government BEST buses, forcing empty returns and delaying tired workers despite the city's transport shortages. From a classical-liberal viewpoint, this fallacy ensures government boondoggles not only waste money but expand to prohibit private initiatives that could provide useful services, perpetuating inefficiency under the guise of avoiding competitive wastefulness.

**Key points:**

- The Amartya Sen Fallacy occurs when government establishes a failing public service and then bans private competition to protect it.
- Amartya Sen advocated banning private tuitions because they divert resources from underperforming government schools.
- Nehru's public sector was shielded from private competition through industrial licensing that blocked needed factories.
- In Mumbai, private buses are restricted from carrying extra passengers to avoid competing with government bus services, leading to empty runs and commuter delays.
- Government interventions under this fallacy waste resources and block private solutions that could address shortages effectively.

**By Aftab**

* * *

Hello, this is Aftab and it isn’t my real name. If you’ve been reading the Indian blogosphere, you probably know my real name and have plans of hunting down and killing me, so I thought it prudent to post under an assumed name. So here’s my first post, where I wish to name a particular fallacy that guides much of government policy-making after Amartya Sen, the great economist, who committed it, but certainly did not originate it.

Amartya Sen’s logic ran somewhat like this:

1\. We need government-run schools because private schools aren’t up to the task

2\. But government schools aren’t doing a great job either, the reason is that competition from the private tuitions are taking resources away from them.

3\. Hence we should ban private tuitions.

Of course, this style of argumentation has been used so often before that it is perhaps unfair to name it after Amartya Sen. There are many who defend Nehru’s investment in a massive and unproductive public sector on the grounds that the private sector wouldn’t have done all those things. But then why on earth did he then go and introduce industrial licensing that effectively prevented the private sector from setting up the factories that were so urgently needed? The Amartya Sen fallacy of course. Once the public sector was set up, it needs to be protected from ruinous competition. Therefore, the private sector had to be constricted.

I see this fallacy in operation time and again in the oddest of places. When I come out of my office late in the evenings, I see scenes that belong in a black market. A private bus comes near a BEST bus stop and an attendant peers out of the window and loudly whispers “Bhandup, Kanjurmarg” or some such thing, all the while looking around to check if there is a policeman around. People quickly get into the bus, which then speeds away.

What is happening? How did we get into a situation where it is illegal to provide public transport in a city that sorely lacks it? The Amartya Sen fallacy of course. Those buses are licensed to ferry employees for specific companies to a specific railway station. Once they finish their task, they have to go back to their resting place for the night, and of course, the enterprising drivers think that rather than go back empty, they might as well pick up some passengers. But they aren’t licensed to do so, because if they do, they’d be running a general bus service and hence competing with government-provided bus service. So they have to go back empty and a lot of tired commuters have to reach home late. And oh.. remember how the whole idea of planning is to avoid the wastefulness that competition entails?

So remember the Amartya Sen Fallacy the next time you have occasion to consider another harmless seeming government boondoggle. It won’t just waste money. It will also tend to expand to prevent i>others from doing any useful work. Remember that once it is set up, then the ban on private competition to said boondoggle will actually make sense.

Read more : [https://spontaneousorder.in/amartya-sens-harmful-education-policy/](https://spontaneousorder.in/amartya-sens-harmful-education-policy/)

* * *

**About Aftab**